As filed with the Securities and Exchange Commission
on July 18, 2024
Registration Statement No. 333-
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
DATA
STORAGE CORPORATION
(Exact name of registrant as specified in its charter)
| Nevada |
|
7374 |
|
98-0530147 |
(State or other jurisdiction of
incorporation or organization) |
|
(Primary Standard Industrial
Classification Code Number) |
|
(I.R.S. Employer
Identification No.) |
Data Storage Corporation
225 Broadhollow Road, Suite 307
Melville, New York 11747
(212) 564-4922
(Address, including zip code, and telephone number,
including area code, of registrant’s principal executive offices)
Charles M. Piluso
Chief Executive Officer
Data Storage Corporation
225 Broadhollow Road, Suite 307
Melville, New York 11747
(212) 564-4922
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Leslie Marlow, Esq.
Patrick J. Egan, Esq.
Blank Rome LLP
1271 Avenue of the Americas
New York, New York 10020
Telephone: (212) 885-5000
Facsimile: (212) 885-5001
Approximate date of commencement of proposed sale
to the public: From time to time after the effective date of this registration statement,
as determined by market conditions.
If
the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please
check the following box. ☐
If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check
the following box. ☒
If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act registration statement number of the earlier effective registration statement
for the same offering. ☐
If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box
and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If
this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become
effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ☐
If
this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register
additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following
box. ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer |
☐ |
Accelerated filer |
☐ |
| Non-accelerated filer |
☒ |
Smaller reporting company |
☒ |
| |
|
Emerging growth company |
☐ |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided to Section 7(a)(2)(B) of the Securities Act. ☐
The
Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment that specifically states that this registration statement shall thereafter become effective
in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this registration statement shall become
effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
EXPLANATORY NOTE
This registration statement contains:
| ● | a
base prospectus, which covers the offering, issuance and sales by us of up to $50,000,000
in the aggregate of the securities identified above from time to time in one or more offerings;
and |
| ● | an
equity distribution agreement prospectus covering the offer, issuance and sale by us of up
to a maximum aggregate offering price of up to $10,600,000 of our common stock that may be
issued and sold from time to time under an equity distribution agreement (the “Equity
Distribution Agreement”) by and between us and Maxim Group LLC (the “Sales Agent”
or “Maxim”). |
The base prospectus
immediately follows this explanatory note. The specific terms of any securities to be offered pursuant to the base prospectus will be
specified in a prospectus supplement to the base prospectus. The Equity Distribution Agreement prospectus immediately follows the base
prospectus. The $10,600,000 of common stock that may be offered, issued and sold under the Equity Distribution Agreement prospectus is
included in the $50,000,000 of securities that may be offered, issued and sold by us under the base prospectus. Upon termination of the
equity distribution agreement, any portion of the $10,600,000 included in the equity distribution agreement prospectus that is not sold
pursuant to the Equity Distribution Agreement will be available for sale in other offerings pursuant to the base prospectus, and if no
shares are sold under the Equity Distribution Agreement, the full $10,600,000 of securities may be sold in other offerings pursuant to
the base prospectus.
The information contained in this prospectus is not complete
and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission
is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction
where the offer or sale is not permitted.
Subject to Completion, Dated July 18,
2024
PROSPECTUS
$50,000,000
DATA STORAGE CORPORATION
Common Stock
Preferred Stock
Debt Securities
Warrants
Units
We may, from time to time, offer and sell up to $50,000,000
of any combination of our common stock, par value $0.001 (the “common stock”), preferred stock, par value $0.001 (the “preferred
stock”), debt securities, warrants or units described in this prospectus, either individually or in combination with other securities,
at prices and on terms described in one or more supplements to this prospectus. We may also offer common stock or preferred stock upon
conversion of debt securities, common stock upon conversion of preferred stock, or common stock, preferred stock, or debt securities upon
the exercise of warrants.
This prospectus provides you with a general description
of the securities that we may offer. Each time we offer and sell securities, we will provide a supplement
to this prospectus that contains specific information about the offering and the amounts, prices and terms of the securities. We
may also authorize one or more free writing prospectuses to be provided to you in connection with these offerings. The prospectus supplement
and any related free writing prospectus may also add, update or change information contained in this prospectus. You should carefully
read this prospectus, the applicable prospectus supplement and any related free writing prospectus, as well as the documents incorporated
by reference, before buying any of the securities being offered.
Securities may be sold by us to or through underwriters
or dealers, directly to purchasers or through agents designated from time to time. For additional information on the methods of sale,
you should refer to the section entitled “Plan of Distribution” in this prospectus and in the applicable prospectus supplement.
If any underwriters, dealers or agents are involved in the sale of any of the securities, their
names and any applicable purchase price, fee, commission or discount arrangement between or among them will be set forth, or will be calculable
from the information set forth, in the applicable prospectus supplement. The price to the public of such securities and the net
proceeds we expect to receive from such sale will also be set forth in a prospectus supplement. No
securities may be sold without delivery of this prospectus and the applicable prospectus supplement describing the method and terms of
the offering of such securities.
Our common stock is listed on the Nasdaq Capital Market
under the symbol “DTST.” Warrants to purchase shares of our common stock issued by us on May 18, 2021 are listed on the Nasdaq
Capital Market under the symbol “DTSTW.” On July 9, 2024, the last reported sale price of our common stock on the Nasdaq Capital
Market was $6.44 per share. The applicable prospectus supplement will contain information, where applicable, as to any other listing,
if any, on any securities market or other exchange of the specific security covered by such prospectus supplement.
As of the date of this prospectus, the aggregate market
value of our outstanding common stock held by non-affiliates is approximately $32,092,110, which is calculated based on 4,109,105 shares
of our outstanding common stock held by non-affiliates and a price of $7.81 per share, the closing price of our common stock on May 29,
2024, which is the highest closing sale price of our common stock on the Nasdaq Capital Market within the prior 60 days of this prospectus.
During the prior twelve calendar month period that ends on and includes the date hereof, we have not offered and sold any of our securities
pursuant to General Instruction I.B.6 to Form S-3.
Investing in our securities involves a high degree
of risk. You should review carefully the risks and uncertainties described under the heading “Risk Factors” beginning on page 7
of this prospectus and contained in the applicable prospectus supplement and in any free writing prospectuses we have authorized for use
in connection with a specific offering, and under similar headings in the other documents that are incorporated by reference into this
prospectus.
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
The date of this prospectus is , 2024.
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement
on Form S-3 that we filed with the Securities and Exchange Commission (the “SEC”) using a “shelf” registration
process. Under this shelf registration statement, we may sell from time to time in one or more offerings up to a total dollar amount of
$50,000,000 of shares of common stock, preferred stock, various series of debt securities and/or warrants to purchase any of such securities,
either individually or as units in combination with other securities as described in this prospectus. Each time we sell any type or series
of securities under this prospectus, we will provide a prospectus supplement that will contain more specific information about the terms
of that offering. We may also authorize one or more free writing prospectuses to be provided to you that may contain material information
relating to these offerings. The prospectus supplement and any related free writing prospectus that we may authorize to be provided to
you may also add, update or change any of the information contained in this prospectus or in the documents we have incorporated by reference
into this prospectus. To the extent that any statement that we make in a prospectus supplement is inconsistent with statements made in
this prospectus, the statements made in this prospectus will be deemed modified or superseded by those made in a prospectus supplement.
You should carefully read both this prospectus and the applicable prospectus supplement and any related free writing prospectus, together
with the additional information described under “Where You Can Find More Information,” before buying any of the securities
being offered.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE
A SALE OF SECURITIES UNLESS IT IS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT
Neither we, nor any agent, underwriter or dealer has
authorized any person to give any information or to make any representation other than those contained or incorporated by reference in
this prospectus, any applicable prospectus supplement or any related free writing prospectus prepared by or on behalf of us or to which
we have referred you. If anyone provides you with different or inconsistent information, you should not rely on it. This prospectus, any
applicable supplement to this prospectus or any related free writing prospectus does not constitute an offer to sell or the solicitation
of an offer to buy any securities other than the registered securities to which they relate, nor does this prospectus, any applicable
supplement to this prospectus or any related free writing prospectus constitute an offer to sell or the solicitation of an offer to buy
securities in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction.
You should not assume that the information contained
in this prospectus, any applicable prospectus supplement or any related free writing prospectus is accurate on any date subsequent to
the date set forth on the front of the document or that any information we have incorporated by reference is correct on any date subsequent
to the date of the document incorporated by reference, even though this prospectus, any applicable prospectus supplement or any related
free writing prospectus is delivered, or securities are sold, on a later date.
This prospectus contains summaries of certain provisions
contained in some of the documents described herein, but reference is made to the actual documents for complete information. All of the
summaries are qualified in their entirety by the actual documents. Copies of some of the documents referred to herein have been filed,
will be filed or will be incorporated by reference as exhibits to the registration statement of which this prospectus is a part, and you
may obtain copies of those documents as described below under the section entitled “Where You Can Find More Information.”
Except as otherwise indicated herein or as the context
otherwise requires, references in this prospectus to “Data Storage,” “the Company,” “we,” “us,”
“our” and similar references refer to Data Storage Corporation, an entity incorporated under the laws of the State of Nevada,
and where appropriate our consolidated subsidiaries.
This prospectus and the information incorporated herein
by reference include trademarks, service marks and trade names owned by us or other companies. All trademarks, service marks and trade
names included or incorporated by reference into this prospectus, any applicable prospectus supplement or any related free writing prospectus
are the property of their respective owners.
PROSPECTUS SUMMARY
The following summary highlights information contained
elsewhere in this prospectus or incorporated by reference herein and does not contain all the information that may be important to purchasers
of our securities. Prospective purchasers of our securities should carefully read the entire prospectus, the applicable prospectus supplement
and any related free writing prospectus, including the risks of investing in our securities discussed under the heading “Risk Factors”
contained in this prospectus, the applicable prospectus supplement and any related free writing prospectus, and under similar headings
in the other documents that are incorporated by reference into this prospectus. Prospective purchasers of our securities should also carefully
read the information incorporated by reference into this prospectus, including our financial statements, and the exhibits to the registration
statement of which this prospectus is a part.
Overview
Data Storage Corporation, a Nevada corporation (“Data Storage,”
“the Company,” “we,” “us,” and “our”), is headquartered in Melville, New York. We leverage
our expertise through our two subsidiaries: CloudFirst Technologies Corporation, a Delaware corporation (“CloudFirst Technologies”),
and Nexxis Inc., a Nevada corporation (“Nexxis”). Through these subsidiaries, we provide solutions and services to a broad
range of clients in various industries, including healthcare, banking and finance, distribution services, manufacturing, construction,
education, and government. Our subsidiaries maintain robust business development teams and independent distribution channels.
Strategic Growth and Infrastructure
In response to a capital raise and Nasdaq uplisting in 2021, we expanded
our distribution networks and bolstered our team, focusing on enhancing our sales, marketing, and technological capabilities. We operate
in six geographically diverse data centers across the U.S. and Canada, supporting our commitment to providing secure and reliable subscription-based
services.
Market Opportunity and Strategic Focus
Recognizing the urgent need for reliable and efficient IT solutions, we
aim to tap into the growing demand for managed cloud and cybersecurity services. CloudFirst Technologies is positioned to capture a significant
share of management’s estimate of the $36 billion annual recurring revenue market in the U.S. and Canada. Our IBM platform, with
assets deployed in six data centers, aligns with IBM’s estimate that 10% of workloads will migrate to cloud-based solutions annually.
Our offerings are designed to support a spectrum of needs, from cloud-based
IBM Power System deployments for critical workloads to comprehensive disaster recovery and cybersecurity protections. Our focus on hybrid
cloud deployments ensures that data and workloads remain secure against various threats.
Operational Footprint
We operate from key locations in New York, Florida, and Texas, with technology
centers and labs designed to meet sophisticated client requirements. Our network includes seven geographically diverse data centers across
the U.S. and Canada, providing secure, resilient, and scalable IT solutions.
Solutions and Services
The Company provides fully integrated cloud hosting, disaster recovery,
cybersecurity, IT automation, and voice & data solutions. With strategic technical investments in multiple regions, DTST serves a
diverse clientele, including Fortune 500 companies, in sectors such as government, manufacturing, education, and healthcare. Focused on
the fast-growing, multi-billion-dollar business continuity market and cloud infrastructure solutions, DTST is recognized as a stable and
emerging growth leader. Our seven regional data centers across North America enable us to deliver sustainable services through recurring
subscription agreements.
Growth and Innovation
Driven by a steadfast commitment to innovation and client satisfaction,
we continuously refine our service offerings and expand our market reach. Our strategic growth is bolstered by a team of solution architects
and business development professionals dedicated to addressing complex business challenges and nurturing long-term client relationships.
By integrating organic growth strategies with targeted expansion efforts, we are well-positioned to seize opportunities in the dynamic
IT landscape and deliver exceptional value to our clients.
Growth Strategies
We aim to enhance revenue streams and market presence by:
| ● | Expanding
Our Service Offerings: We will continuously innovate and expand our service offerings
to meet the evolving needs of our clients, ensuring that we remain at the forefront of industry
trends and technological advancements. |
| ● | Investing
in Research and Development: By investing in R&D, we will drive innovation, develop
cutting-edge solutions, and maintain our competitive edge in the market. |
| ● | Enhancing
Customer Experience: We will focus on improving customer satisfaction through personalized
services, robust support systems, and continuous feedback mechanisms to ensure we meet and
exceed client expectations. |
| ● | Strengthening
Strategic Alliances: We will forge and strengthen strategic alliances with key industry
players to enhance our service portfolio and market reach. |
| ● | Implementing
Sustainable Practices: By adopting sustainable business practices, we will contribute
to environmental conservation and appeal to the growing market segment that values corporate
responsibility. |
Core Services
We provide a comprehensive suite of multi-cloud IT solutions, ensuring
high security and enterprise-level services for clients using IBM Power Systems, Microsoft Windows, and Linux. Our key service areas include:
| o | ezManage™:
Comprehensive IT management solutions, including system monitoring, maintenance, and
support to ensure optimal performance and uptime. |
| o | ezCompliance™:
Compliance management services to help clients adhere to industry regulations and standards. |
| ● | Advanced
Analytics and Reporting: |
| o | ezAnalytics™:
Advanced analytics services that provide actionable insights, helping clients make informed
decisions. |
| o | ezReporting™:
Customizable reporting solutions that offer real-time visibility into system performance
and business metrics. |
| ● | Application
Development and Integration: |
| o | ezDevelop™:
Custom application development services to meet specific business needs. |
| o | ezIntegrate™:
Seamless integration services that ensure smooth interoperability between different systems
and applications. |
| ● | Training
and Consulting Services: |
| o | ezTrain™:
Comprehensive training programs to empower clients with the knowledge and skills needed
to effectively utilize our solutions. |
| o | ezConsult™:
Expert consulting services to provide strategic guidance and support for IT projects
and initiatives. |
These strategies and services position us for sustained growth by meeting
the evolving needs of our clients and capitalizing on market opportunities.
Corporate Information
Data Storage Corporation, a Delaware corporation founded in 2001, became
a subsidiary of Data Storage Corporation, a Nevada corporation (“Data Storage Corporation Nevada”), in 2008. Initially known
as Euro Trend Inc., Data Storage Corporation Nevada was founded on October 20, 2008, and commenced its operations with a share exchange
transaction. Following this acquisition, we adopted our current corporate identity.
Our principal executive offices are located at 225 Broadhollow Road, Suite
307, Melville, New York 11747. You can reach us by phone at (212) 564-4922. For more information, please visit our website at www.dtst.com.
Please note that information on our website is provided for informational purposes only and is not incorporated by reference into this
prospectus. It should not be considered part of this prospectus or the registration statement to which it pertains. The SEC maintains
a website that contains reports, proxy and information statements, and other documents filed electronically with the SEC by issuers like
us. You can access these documents at www.sec.gov.
Smaller Reporting Company
We are a “smaller reporting company” as
defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As a result, we may take advantage of certain
reduced disclosure obligations available to smaller reporting companies, including the exemption from compliance with the auditor attestation
requirements pursuant to the Sarbanes-Oxley Act of 2022, reduced disclosure about our executive compensation arrangements and the requirements
to provide only two years of audited financial statements in our annual reports and registration statements. We will continue to be a
“smaller reporting company” as long as (1) we have a public float (i.e., the market value of our common stock held by
non-affiliates) less than $250 million calculated as of the last business day of our most recently completed second fiscal quarter, or
(2) our annual revenues are less than $100 million for our previous fiscal year and we have either no public float or a public float
of less than $700 million as of the end of that fiscal year’s second fiscal quarter. Decreased disclosures in our SEC filings due
to our status as a “smaller reporting company” may make it harder for investors to analyze our results of operations and financial
prospects.
Risks Associated with our Business
Our business is subject to numerous risks, as described
under the heading “Risk Factors” contained in the applicable prospectus supplement and in any free writing prospectuses we
have authorized for use in connection with a specific offering, and under similar headings in the documents that are incorporated by reference
into this prospectus.
The Securities We May Offer
We may offer shares of our common stock, preferred
stock, various series of debt securities and/or warrants to purchase any of such securities, either individually or as units in combination
with other securities, with a total value of up to $50,000,000 from time to time under this prospectus at prices and on terms to be determined
at the time of any offering. This prospectus provides you with a general description of the securities we may offer. Each time we offer
a type or series of securities under this prospectus, we will provide a prospectus supplement that will describe the specific amounts,
prices and other important terms of the securities, including, to the extent applicable:
| |
● |
designation or classification; |
| |
● |
aggregate principal amount
or aggregate offering price; |
| |
● |
original issue discount; |
| |
● |
rates and times of payment
of interest or dividends; |
| |
● |
redemption, conversion,
exercise, exchange or sinking fund terms; |
| |
● |
voting or other rights; |
| |
● |
conversion or exchange
prices or rates and, if applicable, any provisions for changes to or adjustments in the conversion or exchange prices or rates and
in the securities or other property receivable upon conversion or exchange; and |
| |
● |
a discussion of material
United States federal income tax considerations, if any. |
The prospectus supplement and any related free writing
prospectus that we may authorize to be provided to you may also add, update or change information contained in this prospectus or in documents
we have incorporated by reference. However, no prospectus supplement or free writing prospectus will offer a security that is not registered
and described in this prospectus at the time of the effectiveness of the registration statement of which this prospectus is a part.
We may sell the securities directly to investors or
to or through agents, underwriters or dealers. We, and our agents, underwriters or dealers reserve the right to accept or reject all or
part of any proposed purchase of securities. If we do offer securities to or through agents, underwriters or dealers, we will include
in the applicable prospectus supplement:
| |
● |
the names of those agents,
underwriters, or dealers; |
| |
● |
applicable fees, discounts
and commissions to be paid to them; |
| |
● |
details regarding over-allotment
options, if any; and |
| |
● |
the net proceeds to us. |
The following is a summary of the securities we may
offer with this prospectus.
Common Stock
We may issue shares of our common stock from time
to time. Each holder of our common stock is entitled to one vote for each share on all matters submitted to a vote of the stockholders,
including the election of directors. Under our articles of incorporation, as amended (the “Articles of Incorporation”) and
bylaws, as amended (the “Bylaws”), our stockholders do not have cumulative voting rights. Subject to preferences that may
be applicable to any then-outstanding preferred stock, holders of common stock are entitled to receive ratably those dividends, if any,
as may be declared from time to time by the board of directors out of legally available funds. In the event of our liquidation, dissolution
or winding up, holders of common stock are entitled to share ratably in the net assets legally available for distribution to stockholders
after the payment of all of our debts and other liabilities and the satisfaction of any liquidation preference granted to the holders
of any then-outstanding shares of preferred stock. Holders of shares of our common stock do not have preemptive, subscription, redemption,
or conversion rights and there are no redemption or sinking fund provisions applicable to the common stock. The rights, preferences and
privileges of the holders of common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any
series of preferred stock that we may designate in the future.
Preferred Stock
We may issue shares of our preferred stock from time
to time, in one or more series. Our board of directors will determine the designations, voting powers, preferences and rights of the preferred
stock, as well as the qualifications, limitations or restrictions thereof, including dividend rights, conversion rights, preemptive rights,
terms of redemption or repurchase, liquidation preferences, sinking fund terms and the number of shares constituting any series or the
designation of any series. Convertible preferred stock will be convertible into our common stock or exchangeable for other securities.
Conversion may be mandatory or at the holder’s option and would be at prescribed conversion rates. If we sell any series of preferred
stock under this prospectus, we will fix the designations, voting powers, preferences and rights of such series of preferred stock, as
well as the qualifications, limitations or restrictions thereof, in the certificate of designation relating to that series. We will file
as an exhibit to the registration statement of which this prospectus is a part or will incorporate by reference from reports that we file
with the SEC, the form of any certificate of designation that describes the terms of the series of preferred stock that we are offering
before the issuance of the related series of preferred stock.
We urge you to read the applicable prospectus supplement
(and any free writing prospectus that we may authorize to be provided to you) related to the series of preferred stock being offered,
as well as the complete certificate of designation that contains the terms of the applicable series of preferred stock.
Debt Securities
We may issue debt securities from time to time, in
one or more series, as either senior or subordinated debt or as senior or subordinated convertible debt. The senior debt securities will
rank equally with any other unsecured and unsubordinated debt. The subordinated debt securities will be subordinate and junior in right
of payment, to the extent and in the manner described in the instrument governing the debt, to all of our senior indebtedness. Convertible
debt securities will be convertible into or exchangeable for our common stock or other securities. Conversion may be mandatory or at your
option and would be at prescribed conversion rates.
Any debt securities issued under this prospectus
will be issued under one or more documents called indentures, which are contracts between us and a national banking association or other
eligible party, as trustee. In this prospectus, we have summarized certain general features of the debt securities. We urge you, however,
to read the applicable prospectus supplement (and any free writing prospectus that we may authorize to be provided to you) related to
the series of debt securities being offered, as well as the complete indentures that contain the terms of the debt securities. A form
of indenture has been filed as an exhibit to the registration statement of which this prospectus is a part, and supplemental indentures
and forms of debt securities containing the terms of the debt securities being offered will be filed as exhibits to the registration
statement of which this prospectus is a part or will be incorporated by reference from reports that we file with the SEC.
Warrants
We may issue warrants for the purchase of common stock,
preferred stock and/or debt securities in one or more series. We may issue warrants independently or as units in combination with common
stock, preferred stock and/or debt securities, and the warrants may be attached to or separate from these securities. In this prospectus,
we have summarized certain general features of the warrants.
We urge you, however, to read the applicable prospectus
supplement (and any free writing prospectus that we may authorize to be provided to you) related to the series of warrants being offered,
as well as any warrant agreements and warrant certificates that contain the terms of the warrants. We will file as exhibits to the registration
statement of which this prospectus is a part, or will incorporate by reference from reports that we file with the SEC, the form of warrant
and/or the warrant agreement and warrant certificate, as applicable, that contain the terms of the particular series of warrants we are
offering, and any supplemental agreements, before the issuance of such warrants.
Any warrants issued under this prospectus may be evidenced
by warrant certificates. Warrants also may be issued under an applicable warrant agreement that we enter into with a warrant agent. We
will indicate the name and address of the warrant agent, if applicable, in the prospectus supplement relating to the particular series
of warrants being offered.
Units
We may issue units consisting of any combination of
the other types of securities offered under this prospectus in one or more series. We may evidence each series of units by unit certificates
that we will issue under a separate agreement. We may enter into unit agreements with a unit agent. Each unit agent will be a bank or
trust company that we select. We will indicate the name and address of the unit agent in the applicable prospectus supplement relating
to a particular series of units.
In this prospectus, we have summarized certain general
features of the units under “Description of Units.” We urge you, however, to read the applicable prospectus supplement (and
any related free writing prospectus that we may authorize to be provided to you) related to the series of units being offered, as well
as the complete unit agreement that contains the terms of the units. We will file as exhibits to the registration statement of which this
prospectus is a part, or will incorporate by reference from reports that we file with the SEC, the specific unit agreement that contains
the terms of the particular series of units we are offering, before the issuance of such units.
RISK FACTORS
Investing in our securities involves a high degree
of risk. Before deciding whether to invest in our securities, you should consider carefully the risks and uncertainties described under
the heading “Risk Factors” contained in the applicable prospectus supplement and any related free writing prospectus, and
discussed under the section entitled “Risk Factors” contained in our most recent Annual Report on Form 10-K, as may be
updated by subsequent annual, quarterly and other reports that are incorporated by reference into this prospectus in their entirety. The
risks described in these documents are not the only ones we face, but those that we consider to be material. There may be other unknown
or unpredictable economic, business, competitive, regulatory or other factors that could have material adverse effects on our future results.
Past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate
results or trends in future periods. If any of these risks actually occurs, our business, financial condition, results of operations or
cash flow could be seriously harmed. This could cause the trading price of our common stock to decline, resulting in a loss of all or
part of your investment. Please also read carefully the section below entitled “Forward-Looking Statements.”
FORWARD-LOOKING STATEMENTS
This prospectus, including the documents that we incorporate
by reference herein, contains, and any applicable prospectus supplement or free writing prospectus including the documents we incorporate
by reference therein may contain, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as
amended (the “Securities Act”) and Section 21E of the Exchange Act, including statements regarding our future financial
condition, business strategy and plans and objectives of management for future operations. Forward-looking statements include all statements
that are not historical facts. In some cases, you can identify forward-looking statements by terminology such as “believe,”
“will,” “may,” “estimate,” “continue,” “anticipate,” “intend,”
“should,” “plan,” “might,” “approximately,” “expect,” “predict,”
“could,” “potentially” or the negative of these terms or other similar expressions. Forward-looking statements
include statements regarding our intentions, beliefs, projections, outlook, analyses or current expectations.
Discussions containing these forward-looking statements
may be found, among other places, in the sections entitled “Business,” “Risk Factors” and “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” contained in the documents incorporated by reference herein,
including our most recent Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K,
as well as any amendments thereto.
These statements relate to future events or our future
financial performance and involve known and unknown risks, uncertainties and other factors that could cause our actual results, levels
of activity, performance or achievement to differ materially from those expressed or implied by these forward-looking statements. We discuss
in greater detail, and incorporate by reference into this prospectus in their entirety, many of these risks and uncertainties under the
heading “Risk Factors” contained in the applicable prospectus supplement, in any free writing prospectus we may authorize
for use in connection with a specific offering, and in the documents incorporated by reference herein. These statements reflect our current
views with respect to future events and are based on assumptions and subject to risks and uncertainties. We undertake no obligation to
revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks
and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. All forward-looking statements
are qualified in their entirety by this cautionary statement.
USE OF PROCEEDS
We will retain broad discretion over the use of the
net proceeds from the sale of the securities offered hereby. Except as described in any prospectus supplement or in any related free writing
prospectus that we may authorize to be provided to you, we currently intend to use the net proceeds from the sale of the securities offered
by us hereunder primarily for working capital and general corporate purposes. We will set forth in the applicable prospectus supplement
or free writing prospectus our intended use for the net proceeds received from the sale of any securities sold pursuant to the prospectus
supplement or free writing prospectus.
DESCRIPTION OF CAPITAL STOCK
The following is a description of the material
terms of our capital stock. This is a summary only and does not purport to be complete. It is subject to and qualified in its entirety
by reference to our Articles of Incorporation and our Bylaws, each of which are incorporated by reference as an exhibit to the registration
statement of which this prospectus forms a part. We encourage you to read our Articles of Incorporation, our Bylaws and the applicable
provisions of the Nevada Revised Statute (the “NRS”), for additional information.
Our authorized capital stock consists of:
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250,000,000 shares of common
stock, par value $0.001 per share; and |
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10,000,000 shares of preferred
stock, par value $0.001 per share. |
Common Stock
Outstanding Shares. As of July 9, 2024, there
were 6,995,822 shares of our common stock outstanding.
Voting Rights. The holders of the common stock
are entitled to one vote for each share held of record on all matters submitted to a vote of the stockholders, including the election
of directors, and do not have cumulative voting rights. Accordingly, the holders of a majority of the shares of the common stock entitled
to vote in any election of directors can elect all of the directors standing for election.
Dividend Rights. Subject to preferences that
may be applicable to any then outstanding preferred stock, the holders of common stock are entitled to receive dividends, if any, as may
be declared from time to time by our board of directors out of legally available funds.
Liquidation Rights. In the event of our liquidation,
dissolution or winding up, holders of the common stock will be entitled to share ratably in the net assets legally available for distribution
to stockholders after the payment of all of our debts and other liabilities, subject to the satisfaction of any liquidation preference
granted to the holders of any then outstanding shares of preferred stock.
Other Rights and Preferences. The holders of
the common stock have no preemptive, conversion or subscription rights, and there are no redemption or sinking fund provisions applicable
to the common stock. The rights, preferences and privileges of the holders of the common stock are subject to, and may be adversely affected
by, the rights of the holders of shares of any series of our preferred stock that we may designate and issue in the future.
Fully Paid and Nonassessable. All of our outstanding
shares of common stock are fully paid and nonassessable.
Preferred Stock
The following summary of terms of our preferred stock
is not complete. We will file as an exhibit to the registration statement of which this prospectus is a part or will incorporate by reference
from reports that we file with the SEC, the form of any certificate of designation that describes the terms of the series of preferred
stock that we are offering before the issuance of the related series of preferred stock. We urge you to read the applicable prospectus
supplement (and any free writing prospectus that we may authorize to be provided to you) related to the series of preferred stock being
offered, as well as the complete certificate of designation that contains the terms of the applicable series of preferred stock.
Our board of directors may, without further action
by our stockholders, fix the rights, preferences, privileges and restrictions of up to an aggregate of 10,000,000 shares of preferred
stock in one or more series and authorize their issuance. There are no shares of preferred stock designated or outstanding. These rights,
preferences and privileges could include dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences,
sinking fund terms and the number of shares constituting any series or the designation of such series, any or all of which may be greater
than the rights of our common stock.
Our board of directors will fix the designations,
voting powers, preferences and rights of the preferred stock of each series we issue under this prospectus, as well as the qualifications,
limitations or restrictions thereof, in the certificate of designation relating to that series. We will describe in the applicable prospectus
supplement the terms of the series of preferred stock being offered, including, to the extent applicable:
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the title and stated value; |
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the number of shares we
are offering; |
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the liquidation preference
per share; |
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the dividend rate, period
and payment date and method of calculation for dividends; |
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whether dividends will
be cumulative or non-cumulative and, if cumulative, the date from which dividends will accumulate; |
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the procedures for any
auction and remarketing; |
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the provisions for a sinking
fund; |
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the provisions for redemption
or repurchase, if applicable, and any restrictions on our ability to exercise those redemption and repurchase rights; |
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any listing of the preferred
stock on any securities exchange or market; |
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whether the preferred stock
will be convertible into our common stock, and, if applicable, the conversion price, or how it will be calculated, and the conversion
period; |
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whether the preferred stock
will be exchangeable into debt securities, and, if applicable, the exchange price, or how it will be calculated, and the exchange
period; |
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voting rights of the preferred
stock; |
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restrictions on transfer,
sale or other assignment; |
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whether interests in the
preferred stock will be represented by depositary shares; |
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a discussion of material
United States federal income tax considerations applicable to the preferred stock; |
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the relative ranking and
preferences of the preferred stock as to dividend rights and rights if we liquidate, dissolve or wind up our affairs; |
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any limitations on the
issuance of any class or series of preferred stock ranking senior to or on a parity with the series of preferred stock as to dividend
rights and rights if we liquidate, dissolve or wind up our affairs; and |
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any other specific terms,
preferences, rights or limitations of, or restrictions on, the preferred stock. |
Anti-Takeover Effects of Nevada Law
The provisions of NRS, our Articles of Incorporation
and our Bylaws described below may have the effect of delaying, deferring or discouraging another party from acquiring control of us.
Business Combinations
The “business combination” provisions
of Sections 78.411 to 78.444, inclusive, of the NRS generally prohibit a Nevada corporation with at least 200 stockholders from engaging
in various “combination” transactions with any interested stockholder
for a period of two years after the date of the transaction
in which the person became an interested stockholder, unless the transaction is approved by the board of directors prior to the date the
interested stockholder obtained such status or the combination is approved by the board of directors and thereafter is approved at a meeting
of the stockholders by the affirmative vote of stockholders representing at least 60% of the outstanding voting power held by disinterested
stockholders, and extends beyond the expiration of the two-year period, unless:
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the combination was approved
by the board of directors prior to the person becoming an interested stockholder or the transaction by which the person first became
an interested stockholder was approved by the board of directors before the person became an interested stockholder or the combination
is later approved by a majority of the voting power held by disinterested stockholders; or |
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if the consideration to
be paid by the interested stockholder is at least equal to the highest of: (a) the highest price per share paid by the interested
stockholder within the two years immediately preceding the date of the announcement of the combination or in the transaction in which
it became an interested stockholder, whichever is higher, (b) the market value per share of common stock on the date of announcement
of the combination and the date the interested stockholder acquired the shares, whichever is higher, or (c) for holders of preferred
stock, the highest liquidation value of the preferred stock, if it is higher. |
A “combination” is generally defined to
include mergers or consolidations or any sale, lease exchange, mortgage, pledge, transfer, or other disposition, in one transaction or
a series of transactions, with an “interested stockholder” having: (a) an aggregate market value equal to 5% or more
of the aggregate market value of the assets of the corporation, (b) an aggregate market value equal to 5% or more of the aggregate
market value of all outstanding shares of the corporation, (c) 10% or more of the earning power or net income of the corporation,
and (d) certain other transactions with an interested stockholder or an affiliate or associate of an interested stockholder.
In general, an “interested stockholder”
is a person who, together with affiliates and associates, owns (or within two years, did own) 10% or more of a corporation’s voting
stock. The statute could prohibit or delay mergers or other takeover or change in control attempts and, accordingly, may discourage attempts
to acquire our company even though such a transaction may offer our stockholders the opportunity to sell their stock at a price above
the prevailing market price.
Control Share Acquisitions
The “control share” provisions of Sections
78.378 to 78.3793, inclusive, of the NRS apply to “issuing corporations” that are Nevada corporations with at least 200 stockholders,
including at least 100 stockholders of record who are Nevada residents, and that conduct business directly or indirectly in Nevada. The
control share statute prohibits an acquirer, under certain circumstances, from voting its shares of a target corporation’s stock
after crossing certain ownership threshold percentages, unless the acquirer obtains approval of the target corporation’s disinterested
stockholders. The statute specifies three thresholds: one-fifth or more but less than one-third, one-third but less than a majority, and
a majority or more, of the outstanding voting power. Generally, once an acquirer crosses one of the above thresholds, those shares in
an offer or acquisition and acquired within 90 days thereof become “control shares” and such control shares are deprived of
the right to vote until disinterested stockholders restore the right. These provisions also provide that if control shares are accorded
full voting rights and the acquiring person has acquired a majority or more of all voting power, all other stockholders who do not vote
in favor of authorizing voting rights to the control shares are entitled to demand payment for the fair value of their shares in accordance
with statutory procedures established for dissenters’ rights.
A corporation may elect to not be governed by, or
“opt out” of, the control share provisions by making an election in its articles of incorporation or bylaws, provided that
the opt-out election must be in place on the 10th day following the date an acquiring person has acquired a controlling interest, that
is, crossing any of the three thresholds described above. We have not opted out of the control share statutes, and will be subject to
these statutes if we are an “issuing corporation” as defined in such statutes.
The effect of the Nevada control share statutes is
that the acquiring person, and those acting in association with the acquiring person, will obtain only such voting rights in the control
shares as are conferred by a resolution of the stockholders at an annual or special meeting. The Nevada control share law, if applicable,
could have the effect of discouraging takeovers of our company.
Anti-takeover Effects of our Articles of Incorporation
and Bylaws
Our Articles of Incorporation and Bylaws contain certain
provisions that may have anti-takeover effects, making it more difficult for or preventing a third party from acquiring control of the
Company or changing our board of directors and management. According to the Articles of Incorporation and Bylaws, the holders of our common
stock do not have cumulative voting rights in the election of our directors. The lack of cumulative voting makes it more difficult for
other stockholders to replace our board of directors or for a third party to obtain control of our Company by replacing its board of directors.
Effects of Certain Provisions of our Articles of Incorporation and Bylaws
Provisions of our Articles of Incorporation and Bylaws
may delay or discourage transactions involving an actual or potential change of control or change in our management, including transactions
in which stockholders might otherwise receive a premium for their shares, or transactions that our stockholders might otherwise deem to
be in their best interests. Therefore, these provisions could adversely affect the price of our common stock.
Board of Directors; Removal of Directors for Cause.
Our Bylaws provide for the election of directors to one-year terms at each annual meeting of the stockholders. All directors elected to
our Board will serve until the election and qualification of their respective successors or their earlier resignation or removal. The
Board is authorized to create new directorships, subject to the Articles of Incorporation, and to fill such positions so created by a
majority vote of the directors. Members of the Board may only be removed by the affirmative vote of the holders of not less than two-thirds
of the voting power of our issued and outstanding stock entitled to vote at a special meeting of stockholders.
Board Vacancies. Vacancies on the Board may
be filled by the remaining members of the Board.
Special Meetings of Stockholders. Special meetings
of the stockholders may be called only by Board pursuant to the requirements of our Bylaws.
Blank-Check Preferred Stock. The Board is authorized
to issue, without stockholder approval, preferred stock, the rights of which will be determined at the discretion of the Board and that,
if issued, could operate as a “poison pill” to dilute the stock ownership of a potential hostile acquirer to prevent an acquisition
that our Board does not approve.
Potential Effects of Authorized but Unissued Stock.
We have shares of common stock available for future issuance without stockholder approval. We may utilize these additional shares for
a variety of corporate purposes, including future public offerings to raise additional capital, to facilitate corporate acquisitions or
payment as a dividend on the capital stock. The existence of unissued and unreserved common stock may enable our board of directors to
issue shares to persons friendly to current management.
Quorum. At each meeting of stockholders, except
where otherwise provided by law, the presence in person or by proxy of the holders of thirty-three and one-third percent of the outstanding
shares of our voting stock shall constitute a quorum.
Limitations of Director Liability and Indemnification
of Directors, Officers and Employees
NRS 78.138 provides that a director of a corporation
is not individually liable to the corporation or its stockholders or creditors for any damages as a result of any act or failure to act
in his or her capacity as a director or officer unless: (a) the presumption that directors and officers acted in good faith on an
informed basis with a view toward the best interest of the corporation has been rebutted and (b) it is proven that:
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The director’s or
officer’s act or failure to act constituted a breach of his or her fiduciary duties as a director or officer; and |
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such breach involved intentional
misconduct, fraud or a knowing violation of law. |
Our Bylaws provide that a
director shall cause us to indemnify a director or former director and the directors may cause us
to indemnify a director or former director of a corporation of which we are or were a shareholder and the heirs and personal representatives
of any such person against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, actually
and reasonably incurred by him or them including an amount paid to settle an action or satisfy a judgment inactive criminal or administrative
action or proceeding to which he is or they are made a party by reason of his or her being or having been our director or a director of
such corporation, including an action brought by us or such corporation. Each of our directors on being elected or appointed is deemed
to have contracted with the Corporation on the terms of the foregoing indemnity. Our Bylaws also provide that the directors may
cause us to indemnify an officer, employee or agent of the Corporation or of a corporation of which the Corporation is or was a shareholder
(notwithstanding that he is also a director), and his or her heirs and personal representatives against all costs, charges and expenses
incurred by him or them and resulting from his or her acting as an officer, employee or agent of the Corporation or corporation.
Our Bylaws also
provide that the directors may cause the Corporation to purchase and maintain insurance for the benefit of a person who is or was serving
as a director, officer, employee or agent of the Corporation or as a director, officer, employee or agent of a corporation of which the
Corporation is or was a shareholder and his or her heirs or personal representatives against a liability incurred by him as a director,
officer, employee or agent. We have obtained a policy of directors’ and officers’ liability insurance.
We believe that these bylaw provisions are necessary
to attract and retain qualified persons as directors and officers.
The limitation of liability and indemnification provisions
in our Articles of Incorporation and Bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their
fiduciary duties. They may also reduce the likelihood of derivative litigation against directors and officers, even though an action,
if successful, might provide a benefit to us and our stockholders. Our results of operations and financial condition may be harmed to
the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions.
Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers or persons controlling us, we have been informed that, in the opinion
of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
At present, there is no pending litigation or proceeding
involving any of our directors or officers as to which indemnification is required or permitted, and we are not aware of any threatened
litigation or proceeding that may result in a claim for indemnification.
Description of Common Stock Purchase Warrants Issued
on May 18, 2021
The material provisions of the Warrants that we issued
on May 18, 2021 (the “May 2021 Warrants”) are set forth below and a copy of the Warrant Agency Agreement, dated as of May
18, 2021 (the “Warrant Agency Agreement”), by and between us and VStock Transfer, LLC, as warrant agent (the “Warrant
Agent”), governing the May 2021 Warrants has been filed as an exhibit to our Current Report on Form 8-K filed with the SEC on May
18, 2021. The Company and the Warrant Agent may amend or supplement the Warrant Agency Agreement without the consent of any holder for
the purpose of curing any ambiguity, or curing, correcting or supplementing any defective provision contained therein or adding or changing
any other provisions with respect to matters or questions arising under the Warrant Agency Agreement as the parties thereto may deem necessary
or desirable and that the parties determine, in good faith, shall not adversely affect the interest of the holders. All other amendments
and supplements shall require the vote or written consent of holders of at least 50.1%. The exercise price and number of shares of common
stock issuable upon exercise of the Warrants may be adjusted in certain circumstances, including in the event of a stock dividend, extraordinary
dividend on or recapitalization, reorganization, merger or consolidation.
Outstanding May 2021 Warrants. As of July 9,
2024, there were 1,464,610 May 2021 Warrants outstanding to purchase 1,464,610 shares of our common stock.
Exercisability
The May 2021 Warrants are exercisable at any time
after their original issuance and at any time up to the date that is five (5) years after their original issuance. The May 2021 Warrants
may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the Warrant Agent, with
the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full payment of the
exercise price, by certified or official bank check payable to us, for the number of warrants being exercised. Under the terms of the
Warrant Agency Agreement, if at the time of exercise hereof there is no effective registration statement registering, or the prospectus
contained therein is not available for the issuance of, the common stock issuable upon exercise of the warrants, the holders of the May
2021 Warrants shall have the right to exercise the warrants solely via a cashless exercise feature provided for in the warrants, until
such time as there is an effective registration statement and current prospectus. Notwithstanding the foregoing, on the expiration date
of the May 2021 Warrants, the warrants shall be automatically exercised via cashless exercise pursuant to the terms of the May 2021 Warrants.
Exercise Limitation
A holder may not exercise any portion of a May
2021 Warrant to the extent that the holder, together with its affiliates and any other person or entity acting as a group, would own
more than 4.99% (or, upon election by a warrant holder prior to the issuance of such warrants, 9.99%) of the outstanding common
stock immediately after such exercise, as such percentage ownership is determined in accordance with the terms of the warrant,
except that upon at least 61 days’ prior notice from the holder to us, the holder may waive such limitation up to a percentage
not in excess of 9.99%.
Exercise Price
The exercise price per whole share of common stock
purchasable upon exercise of the May 2021 Warrants is $7.425 per share. The exercise price is subject to appropriate adjustment in the
event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting our
common stock and also upon any distributions of assets, including cash, stock or other property to our stockholders.
Fractional Shares
No fractional shares of our common stock will be issued
upon exercise of the May 2021 Warrants. If, upon exercise of the May 2021 Warrants, a holder would be entitled to receive a fractional
interest in a share, we will, upon exercise, and our election, either pay a cash adjustment in respect of such fraction in an amount equal
to such fraction multiplied by the exercise price or round up to the next whole share. If multiple warrants are exercised by the holder
at the same time, we shall pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the
exercise price.
Transferability
Subject to applicable laws, the May 2021 Warrants,
at the option of the holder upon surrender of the May 2021 Warrants to us or our designated agent, together with the appropriate instruments
of transfer may be offered for sale, sold, transferred or assigned without our consent.
Amendment and Waiver
Subject to any non-conflicting terms of the Warrant
Agency Agreement and the exercise adjustment provisions of the May 2021 Warrants, the May 2021 Warrants may be modified or amended or
the provisions thereof waived (i) with respect to an amendment or modification, upon obtaining the written consent of us and the holders
of at least 50.1% of the shares common stock issuable upon the exercise of the then-outstanding May 2021 Warrants issued pursuant to the
Warrant Agency Agreement and (ii) in the case of a waiver, by the party against whom enforcement of any such waived provision is sought;
provided, that, in each case, if any amendment, modification or waiver disproportionately, materially and adversely impacts a warrant
holder (or group of holders), the written consent of such disproportionately impacted holder (or group of holders) shall also be required,
and provided further that such modification, amendment or waiver applies to all of the then-outstanding May 2021 Warrants.
Exchange Listing
The May 2021 Warrants are listed on Nasdaq Capital
Market under the symbol “DTSTW.”
Fundamental Transactions
In the event of a fundamental transaction, as described
in the May 2021 Warrants and generally including any reorganization, recapitalization or reclassification of our common stock, the sale,
transfer or other disposition of all or substantially all of our properties or assets, our consolidation or merger with or into another
person, the acquisition of more than 50% of our outstanding common stock, or any person or group becoming the beneficial owner of 50%
of the voting power represented by our outstanding common stock, the holders of the May 2021 Warrants will be entitled to receive the
kind and amount of securities, cash or other property that the holders would have received had they exercised the May 2021 Warrants immediately
prior to such fundamental transaction.
Rights as a Stockholder
The holders of the May 2021 Warrants do not have the
rights or privileges of holders of our common stock or any voting rights until they exercise their May 2021 Warrants and receive shares
of our common stock. After the issuance of shares of our common stock upon exercise of the May 2021 Warrants, each holder will be entitled
to one vote for each share held of record on all matters to be voted on by stockholders.
Governing Law
The May 2021 Warrants and the Warrant Agency Agreement
are governed by New York law.
Listing of the Common Stock and May 2021 Warrants
on the Nasdaq Capital Market
Our common stock is listed on the Nasdaq Capital Market
under the symbol “DTST.” The May 2021 Warrants are listed on the Nasdaq Capital Market under the symbol “DTSTW.”
Transfer Agent and Registrar
The transfer agent and registrar for our common stock
and Warrant Agent for the May 2021 Warrants is VStock Transfer, LLC with an address at 18 Lafayette Place, Woodmere, New York 11598, telephone:
(212) 828-843.
Stock Options
As of July 9, 2024, we had options outstanding to purchase an aggregate of
935,721 shares of common stock that were issued under our equity compensation plans. As of July 9, 2024, there were 961,782 shares of
common stock reserved for future issuance under our equity incentive plans.
DESCRIPTION OF DEBT SECURITIES
We may issue debt securities from time to time, in
one or more series, as either senior or subordinated debt or as senior or subordinated convertible debt. While the terms we have summarized
below will apply generally to any debt securities that we may offer under this prospectus, we will describe the particular terms of any
debt securities that we may offer in more detail in the applicable prospectus supplement. The terms of any debt securities offered under
a prospectus supplement may differ from the terms described below. Unless the context requires otherwise, whenever we refer to the indenture,
we also are referring to any supplemental indentures that specify the terms of a particular series of debt securities.
We will issue the debt securities under the indenture
that we will enter into with the trustee named in the indenture. The indenture will be qualified under the Trust Indenture Act of 1939,
as amended (the “Trust Indenture Act”). We have filed the form of indenture as an exhibit to the registration statement of
which this prospectus is a part, and supplemental indentures and forms of debt securities containing the terms of the debt securities
being offered will be filed as exhibits to the registration statement of which this prospectus is a part or will be incorporated by reference
from reports that we file with the SEC.
The following summary of material provisions of the
debt securities and the indenture is subject to, and qualified in its entirety by reference to, all of the provisions of the indenture
applicable to a particular series of debt securities. We urge you to read the applicable prospectus supplement and any related free writing
prospectus related to the debt securities that we may offer under this prospectus, as well as the complete indenture that contains the
terms of the debt securities.
General
The indenture will not limit the amount of debt securities
that we may issue. It provides that we may issue debt securities up to the principal amount that we may authorize and may be in any currency
or currency unit that we may designate. Except for the limitations on consolidation, merger and sale of all or substantially all of our
assets contained in the indenture, the terms of the indenture do not contain any covenants or other provisions designed to give holders
of any debt securities protection against changes in our operations, financial condition or transactions involving us.
We may issue the debt securities issued under the
indenture as “discount securities,” which means they may be sold at a discount below their stated principal amount. These
debt securities, as well as other debt securities that are not issued at a discount, may be issued with “original issue discount,”
or OID, for U.S. federal income tax purposes because of interest payment and other characteristics or terms of the debt securities. Material
U.S. federal income tax considerations applicable to debt securities issued with OID will be described in more detail in any applicable
prospectus supplement.
We will describe in the applicable prospectus supplement
the terms of the series of debt securities being offered, including:
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the title of the series
of debt securities; |
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any limit upon the aggregate
principal amount that may be issued; |
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the maturity date or dates; |
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the form of the debt securities
of the series; |
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the applicability of any
guarantees; |
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whether or not the debt
securities will be secured or unsecured, and the terms of any secured debt; |
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whether the debt securities
rank as senior debt, senior subordinated debt, subordinated debt or any combination thereof, and the terms of any subordination; |
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if the price (expressed
as a percentage of the aggregate principal amount thereof) at which such debt securities will be issued is a price other than the
principal amount thereof, the portion of the principal amount thereof payable upon declaration of acceleration of the maturity thereof,
or if applicable, the portion of the principal amount of such debt securities that is convertible into another security or the method
by which any such portion shall be determined; |
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the interest rate or rates,
which may be fixed or variable, or the method for determining the rate and the date interest will begin to accrue, the dates interest
will be payable and the regular record dates for interest payment dates or the method for determining such dates; |
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our right, if any, to defer
payment of interest and the maximum length of any such deferral period; |
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if applicable, the date
or dates after which, or the period or periods during which, and the price or prices at which, we may, at our option, redeem the
series of debt securities pursuant to any optional or provisional redemption provisions and the terms of those redemption provisions; |
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the date or dates, if any,
on which, and the price or prices at which we are obligated, pursuant to any mandatory sinking fund or analogous fund provisions
or otherwise, to redeem, or at the holder’s option to purchase, the series of debt securities and the currency or currency
unit in which the debt securities are payable; |
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the denominations in which
we will issue the series of debt securities, if other than denominations of $1,000 and any integral multiple thereof; |
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any and all terms, if applicable,
relating to any auction or remarketing of the debt securities of that series and any security for our obligations with respect to
such debt securities and any other terms which may be advisable in connection with the marketing of debt securities of that series; |
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whether the debt securities
of the series shall be issued in whole or in part in the form of a global security or securities; the terms and conditions, if any,
upon which such global security or securities may be exchanged in whole or in part for other individual securities; and the depositary
for such global security or securities; |
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if applicable, the provisions
relating to conversion or exchange of any debt securities of the series and the terms and conditions upon which such debt securities
will be so convertible or exchangeable, including the conversion or exchange price, as applicable, or how it will be calculated and
may be adjusted, any mandatory or optional (at our option or the holders’ option) conversion or exchange features, the applicable
conversion or exchange period and the manner of settlement for any conversion or exchange; |
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if other than the full
principal amount thereof, the portion of the principal amount of debt securities of the series which shall be payable upon declaration
of acceleration of the maturity thereof; |
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additions to or changes
in the covenants applicable to the particular debt securities being issued, including, among others, the consolidation, merger or
sale covenant; |
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additions to or changes
in the events of default with respect to the securities and any change in the right of the trustee or the holders to declare the
principal, premium, if any, and interest, if any, with respect to such securities to be due and payable; |
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additions to or changes
in or deletions of the provisions relating to covenant defeasance and legal defeasance; |
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additions to or changes
in the provisions relating to satisfaction and discharge of the indenture; |
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additions to or changes
in the provisions relating to the modification of the indenture both with and without the consent of holders of debt securities issued
under the indenture; |
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the currency of payment
of debt securities if other than U.S. dollars and the manner of determining the equivalent amount in U.S. dollars; |
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whether interest will be
payable in cash or additional debt securities at our or the holders’ option and the terms and conditions upon which the election
may be made; |
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the terms and conditions,
if any, upon which we will pay amounts in addition to the stated interest, premium, if any and principal amounts of the debt securities
of the series to any holder that is not a “United States person” for federal tax purposes; |
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any restrictions on transfer,
sale or assignment of the debt securities of the series; and |
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any other specific terms,
preferences, rights or limitations of, or restrictions on, the debt securities, any other additions or changes in the provisions
of the indenture, and any terms that may be required by us or advisable under applicable laws or regulations. |
Conversion or Exchange Rights
We will set forth in the applicable prospectus supplement
the terms on which a series of debt securities may be convertible into or exchangeable for our common stock or our other securities. We
will include provisions as to settlement upon conversion or exchange and whether conversion or exchange is mandatory, at the option of
the holder or at our option. We may include provisions pursuant to which the number of shares of our common stock or our other securities
that the holders of the series of debt securities receive would be subject to adjustment.
Consolidation, Merger or Sale
Unless we provide otherwise in the prospectus supplement
applicable to a particular series of debt securities, the indenture will not contain any covenant that restricts our ability to merge
or consolidate, or sell, convey, transfer or otherwise dispose of our assets as an entirety or substantially as an entirety. However,
any successor to or acquirer of such assets (other than a subsidiary of ours) must assume all of our obligations under the indenture or
the debt securities, as appropriate.
Events of Default under the Indenture
Unless we provide otherwise in the prospectus supplement
applicable to a particular series of debt securities, the following are events of default under the indenture with respect to any series
of debt securities that we may issue:
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if we fail to pay any installment
of interest on any series of debt securities, as and when the same shall become due and payable, and such default continues for a
period of 90 days; provided, however, that a valid extension of an interest payment period by us in accordance with the terms of
any indenture supplemental thereto shall not constitute a default in the payment of interest for this purpose; |
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if we fail to pay the principal
of, or premium, if any, on any series of debt securities as and when the same shall become due and payable whether at maturity, upon
redemption, by declaration or otherwise, or in any payment required by any sinking or analogous fund established with respect to
such series; provided, however, that a valid extension of the maturity of such debt securities in accordance with the terms of any
indenture supplemental thereto shall not constitute a default in the payment of principal or premium, if any; |
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if we fail to observe or
perform any other covenant or agreement contained in the debt securities or the indenture, other than a covenant specifically relating
to another series of debt securities, and our failure continues for 90 days after we receive written notice of such failure, requiring
the same to be remedied and stating that such is a notice of default thereunder, from the trustee or holders of at least 25% in aggregate
principal amount of the outstanding debt securities of the applicable series; and |
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if specified events of
bankruptcy, insolvency or reorganization occur. |
If an event of default with respect to debt securities
of any series occurs and is continuing, other than an event of default specified in the last bullet point above, the trustee or the holders
of at least 25% in aggregate principal amount of the outstanding debt securities of that series, by notice to us in writing, and to the
trustee if notice is given by such holders, may declare the unpaid principal of, premium, if any, and accrued interest, if any, due and
payable immediately. If an event of default specified in the last bullet point above occurs with respect to us, the principal amount of
and accrued interest, if any, of each issue of debt securities then outstanding shall be due and payable without any notice or other action
on the part of the trustee or any holder.
The holders of a majority in principal amount of the
outstanding debt securities of an affected series may waive any default or event of default with respect to the series and its consequences,
except defaults or events of default regarding payment of principal, premium, if any, or interest, unless we have cured the default or
event of default in accordance with the indenture. Any waiver shall cure the default or event of default.
Subject to the terms of the indenture, if an event
of default under an indenture shall occur and be continuing, the trustee will be under no obligation to exercise any of its rights or
powers under such indenture at the request or direction of any of the holders of the applicable series of debt securities, unless such
holders have offered the trustee reasonable indemnity. The holders of a majority in principal amount of the outstanding debt securities
of any series will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee,
or exercising any trust or power conferred on the trustee, with respect to the debt securities of that series, provided that:
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the direction so given
by the holder is not in conflict with any law or the applicable indenture; and |
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subject to its duties under
the Trust Indenture Act, the trustee need not take any action that might involve it in personal liability or might be unduly prejudicial
to the holders not involved in the proceeding. |
A holder of the debt securities of any series will
have the right to institute a proceeding under the indenture or to appoint a receiver or trustee, or to seek other remedies only if:
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the holder has given written
notice to the trustee of a continuing event of default with respect to that series; |
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the holders of at least
25% in aggregate principal amount of the outstanding debt securities of that series have made written request, |
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such holders have offered
to the trustee indemnity satisfactory to it against the costs, expenses and liabilities to be incurred by the trustee in compliance
with the request; and |
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the trustee does not institute
the proceeding, and does not receive from the holders of a majority in aggregate principal amount of the outstanding debt securities
of that series other conflicting directions within 90 days after the notice, request and offer. |
These limitations do not apply to a suit instituted
by a holder of debt securities if we default in the payment of the principal, premium, if any, or interest on, the debt securities.
We will periodically file statements with the trustee
regarding our compliance with specified covenants in the indenture.
Modification of Indenture; Waiver
We and the trustee may change an indenture without
the consent of any holders with respect to specific matters:
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to cure any ambiguity,
defect or inconsistency in the indenture or in the debt securities of any series; |
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to comply with the provisions
described above under “Description of Debt Securities—Consolidation, Merger or Sale;” |
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to provide for uncertificated
debt securities in addition to or in place of certificated debt securities; |
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to add to our covenants,
restrictions, conditions or provisions such new covenants, restrictions, conditions or provisions for the benefit of the holders
of all or any series of debt securities, to make the occurrence, or the occurrence and the continuance, of a default in any such
additional covenants, restrictions, conditions or provisions an event of default or to surrender any right or power conferred upon
us in the indenture; |
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to add to, delete from
or revise the conditions, limitations, and restrictions on the authorized amount, terms, or purposes of issue, authentication and
delivery of debt securities, as set forth in the indenture; |
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to make any change that
does not adversely affect the interests of any holder of debt securities of any series in any material respect; |
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to provide for the issuance
of and establish the form and terms and conditions of the debt securities of any series as provided above under “Description
of Debt Securities—General” to establish the form of any certifications required to be furnished pursuant to the terms
of the indenture or any series of debt securities, or to add to the rights of the holders of any series of debt securities; |
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to evidence and provide
for the acceptance of appointment under any indenture by a successor trustee; or |
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to comply with any requirements
of the SEC in connection with the qualification of any indenture under the Trust Indenture Act. |
In addition, under the indenture, the rights of holders
of a series of debt securities may be changed by us and the trustee with the written consent of the holders of at least a majority in
aggregate principal amount of the outstanding debt securities of each series that is affected. However, unless we provide otherwise in
the prospectus supplement applicable to a particular series of debt securities, we and the trustee may make the following changes only
with the consent of each holder of any outstanding debt securities affected:
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extending the fixed maturity of any debt securities
of any series; |
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reducing the principal
amount, reducing the rate of or extending the time of payment of interest, or reducing any premium payable upon the redemption of
any series of any debt securities; or |
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reducing the percentage
of debt securities, the holders of which are required to consent to any amendment, supplement, modification or waiver. |
Discharge
Each indenture provides that we can elect to be discharged
from our obligations with respect to one or more series of debt securities, except for specified obligations, including obligations to:
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provide for payment; |
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register the transfer or exchange of debt securities of the series; |
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replace stolen, lost or mutilated debt securities of the series; |
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pay principal of and premium and interest on any debt securities of the series; |
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maintain paying agencies; |
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hold monies for payment in trust; |
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recover excess money held by the trustee; |
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compensate and indemnify the trustee; and |
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appoint any successor trustee. |
In order to exercise our rights to be discharged,
we must deposit with the trustee money or government obligations sufficient to pay all the principal of, any premium, if any, and interest
on, the debt securities of the series on the dates payments are due.
Form, Exchange and Transfer
We will issue the debt securities of each series only
in fully registered form without coupons and, unless we provide otherwise in the applicable prospectus supplement, in denominations of
$1,000 and any integral multiple thereof. The indenture provides that we may issue debt securities of a series in temporary or permanent
global form and as book-entry securities that will be deposited with, or on behalf of, The Depository Trust Company, or DTC, or another
depositary named by us and identified in the applicable prospectus supplement with respect to that series. To the extent the debt securities
of a series are issued in global form and as book-entry, a description of terms relating such securities will be set forth in the applicable
prospectus supplement. At the option of the holder, subject to the terms of the indenture and the limitations applicable to global securities
described in the applicable prospectus supplement, the holder of the debt securities of any series can exchange the debt securities for
other debt securities of the same series, in any authorized denomination and of like tenor and aggregate principal amount.
Subject to the terms of the indenture and the limitations
applicable to global securities set forth in the applicable prospectus supplement, holders of the debt securities may present the debt
securities for exchange or for registration of transfer, duly endorsed or with the form of transfer endorsed thereon duly executed if
so required by us or the security registrar, at the office of the security registrar or at the office of any transfer agent designated
by us for this purpose. Unless otherwise provided in the debt securities that the holder presents for transfer or exchange, we will impose
no service charge for any registration of transfer or exchange, but we may require payment of any taxes or other governmental charges.
We will name in the applicable prospectus supplement
the security registrar, and any transfer agent in addition to the security registrar, that we initially designate for any debt securities.
We may at any time designate additional transfer agents or rescind the designation of any transfer agent or approve a change in the office
through which any transfer agent acts, except that we will be required to maintain a transfer agent in each place of payment for the debt
securities of each series.
If we elect to redeem the debt securities of any series,
we will not be required to:
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issue, register the transfer
of, or exchange any debt securities of that series during a period beginning at the opening of business 15 days before the day of
mailing of a notice of redemption of any debt securities that may be selected for redemption and ending at the close of business
on the day of the mailing; or |
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register the transfer of
or exchange any debt securities so selected for redemption, in whole or in part, except the unredeemed portion of any debt securities
we are redeeming in part. |
Information Concerning the Trustee
The trustee, other than during the occurrence and
continuance of an event of default under an indenture, undertakes to perform only those duties as are specifically set forth in the applicable
indenture. Upon an event of default under an indenture, the trustee must use the same degree of care as a prudent person would exercise
or use in the conduct of his or her own affairs. Subject to this provision, the trustee is under no obligation to exercise any of the
powers given it by the indenture at the request of any holder of debt securities unless it is offered reasonable security and indemnity
against the costs, expenses and liabilities that it might incur.
Payment and Paying Agents
Unless we otherwise indicate in the applicable prospectus
supplement, we will make payment of the interest on any debt securities on any interest payment date to the person in whose name the debt
securities, or one or more predecessor securities, are registered at the close of business on the regular record date for the interest.
We will pay principal of and any premium and interest
on the debt securities of a particular series at the office of the paying agents designated by us, except that unless we otherwise indicate
in the applicable prospectus supplement, we will make interest payments by check that we will mail to the holder or by wire transfer to
certain holders. Unless we otherwise indicate in the applicable prospectus supplement, we will designate the corporate trust office of
the trustee as our sole paying agent for payments with respect to debt securities of each series. We will name in the applicable prospectus
supplement any other paying agents that we initially designate for the debt securities of a particular series. We will maintain a paying
agent in each place of payment for the debt securities of a particular series.
All money we pay to a paying agent or the trustee
for the payment of the principal of or any premium or interest on any debt securities that remains unclaimed at the end of two years after
such principal, premium or interest has become due and payable will be repaid to us, and the holder of the debt security thereafter may
look only to us for payment thereof.
Governing Law
The indenture and the debt securities will be governed
by and construed in accordance with the internal laws of the State of New York, except to the extent that the Trust Indenture Act is applicable.
DESCRIPTION OF WARRANTS
The following description, together with the additional
information we may include in any applicable prospectus supplement and in any related free writing prospectus, summarizes the material
terms and provisions of the warrants that we may offer under this prospectus, which may consist of warrants to purchase common stock,
preferred stock or debt securities and may be issued in one or more series. Warrants may be offered independently or in combination with
common stock, preferred stock or debt securities offered by any prospectus supplement. While the terms we have summarized below will apply
generally to any warrants that we may offer under this prospectus, we will describe the particular terms of any series of warrants in
more detail in the applicable prospectus supplement. The following description of warrants will apply to the warrants offered by this
prospectus unless we provide otherwise in the applicable prospectus supplement. The applicable prospectus supplement for a particular
series of warrants may specify different or additional terms.
We have filed or will file forms of the warrant agreements
and forms of warrant certificates containing the terms of the warrants that may be offered as exhibits to the registration statement of
which this prospectus is a part. We will file as exhibits to the registration statement of which this prospectus is a part, or will incorporate
by reference from reports that we file with the SEC, the form of warrant and/or the warrant agreement and warrant certificate, as applicable,
that contain the terms of the particular series of warrants we are offering, and any supplemental agreements, before the issuance of such
warrants. The following summaries of material terms and provisions of the warrants are subject to, and qualified in their entirety by
reference to, all the provisions of the form of warrant and/or the warrant agreement and warrant certificate, as applicable, and any supplemental
agreements applicable to a particular series of warrants that we may offer under this prospectus. We urge you to read the applicable prospectus
supplement related to the particular series of warrants that we may offer under this prospectus, as well as any related free writing prospectus,
and the complete form of warrant and/or the warrant agreement and warrant certificate, as applicable, and any supplemental agreements,
that contain the terms of the warrants.
General
We will describe in the applicable prospectus supplement
the terms of the series of warrants being offered, including, to the extent applicable:
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the offering price and
aggregate number of warrants offered; |
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the currency for which
the warrants may be purchased; |
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the designation and terms
of the securities with which the warrants are issued, and the number of warrants issued with each such security or each principal
amount of such security; |
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the date on and after which
the warrants and the related securities will be separately transferable; |
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in the case of warrants
to purchase debt securities, the principal amount of debt securities purchasable upon exercise of one warrant and the price at, and
currency in which, this principal amount of debt securities may be purchased upon such exercise; |
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in the case of warrants
to purchase common stock or preferred stock, the number of shares of common stock or preferred stock, as the case may be, purchasable
upon the exercise of one warrant and the price at which these shares may be purchased upon such exercise; |
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the effect of any merger,
consolidation, sale or other disposition of our business on the warrant agreements and the warrants; |
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the terms of any rights
to redeem or call the warrants; |
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any provisions for changes
to or adjustments in the exercise price or number of securities issuable upon exercise of the warrants; |
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the dates on which the
right to exercise the warrants will commence and expire; |
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the
manner in which the warrant agreements and warrants may be modified;
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a discussion of material
United States federal income tax consequences of holding or exercising the warrants; |
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the terms of the securities
issuable upon exercise of the warrants; and |
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any other specific terms,
preferences, rights or limitations of or restrictions on the warrants. |
Before exercising their warrants, holders of warrants
will not have any of the rights of holders of the securities purchasable upon such exercise, including:
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in the case of warrants
to purchase common stock or preferred stock, the right to receive dividends, if any, or, payments upon our liquidation, dissolution
or winding up or to exercise voting rights, if any; or |
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in the case of warrants
to purchase debt securities, the right to receive payments of principal of, or premium, if any, or interest on, the debt securities
purchasable upon exercise or to enforce covenants in the applicable indenture. |
Exercise of Warrants
Each warrant will entitle the holder to purchase the
securities that we specify in the applicable prospectus supplement at the exercise price that we describe in the applicable prospectus
supplement. Unless we otherwise specify in the applicable prospectus supplement, holders of the warrants may exercise the warrants at
any time up to the specified time on the expiration date that we set forth in the applicable prospectus supplement. After the close of
business on the expiration date, unexercised warrants will become void.
Unless we otherwise specify in the applicable prospectus
supplement, holders of the warrants may exercise the warrants by delivering the warrant or warrant certificate representing the warrants
to be exercised together with specified information, and paying the required amount to the warrant agent, if applicable, in immediately
available funds, as provided in the applicable prospectus supplement. We will set forth on the reverse side of any warrant certificate
and in the applicable prospectus supplement the information that the holder of the warrant will be required to deliver to any warrant
agent in connection with the exercise of the warrant.
Upon receipt of payment and the warrant or warrant
certificate, as applicable, properly completed and duly executed at the corporate trust office of the warrant agent, if any, or any other
office, including ours, indicated in the prospectus supplement, we will, as soon as practicable, issue and deliver the securities purchasable
upon such exercise. If fewer than all of the warrants (or the warrants represented by such warrant certificate) are exercised, a new warrant
or a new warrant certificate, as applicable, will be issued for the remaining warrants.
Governing Law
Unless we provide otherwise in the applicable prospectus
supplement, the warrants and warrant agreements, and any claim, controversy or dispute arising under or related to the warrants or warrant
agreements, will be governed by and construed in accordance with the laws of the State of New York.
Enforceability of Rights by Holders of Warrants
Each warrant agent, if any, will act solely as our
agent under the applicable warrant agreement and will not assume any obligation or relationship of agency or trust with any holder of
any warrant. A single bank or trust company may act as warrant agent for more than one issue of warrants. A warrant agent will have no
duty or responsibility in case of any default by us under the applicable warrant agreement or warrant, including any duty or responsibility
to initiate any proceedings at law or otherwise, or to make any demand upon us. Any holder of a warrant may, without the consent of the
related warrant agent or the holder of any other warrant, enforce by appropriate legal action its right to exercise, and receive the securities
purchasable upon exercise of, its warrants.
DESCRIPTION OF UNITS
The following description, together with the additional
information we may include in any applicable prospectus supplement and related free writing prospectus, summarizes the material terms
and provisions of the units that we may offer under this prospectus. We may issue units consisting of any combination of the other types
of securities offered under this prospectus in one or more series. We will issue each unit so that the holder of the unit is also the
holder of each security included in the unit. As a result, the holder of a unit will have the rights and obligations of a holder of each
included security. The unit agreement under which a unit is issued may provide that the securities included in the unit may not be held
or transferred separately, at any time or at any time before a specified date. We may evidence each series of units by unit certificates
that we will issue under a separate agreement. We may enter into unit agreements with a unit agent. Each unit agent will be a bank or
trust company that we select. We will indicate the name and address of any unit agent in the applicable prospectus supplement relating
to a particular series of units. The summary below and that contained in any prospectus supplement is qualified in its entirety by reference
to all of the provisions of the unit agreement and/or unit certificate, and depositary arrangements, if applicable. We urge you to read
the applicable prospectus supplements and any related free writing prospectuses related to the units that we may offer under this prospectus,
as well as the complete unit agreement and/or unit certificate, and depositary arrangements, as applicable, that contain the terms of
the units.
We will file as exhibits to the registration statement
of which this prospectus is a part, or will incorporate by reference from reports that we file with the SEC, the form of unit agreement
and/or unit certificate, and depositary arrangements, as applicable, that contain the terms of the particular series of units we are offering,
and any supplemental agreements, before the issuance of such units.
We will describe in the applicable prospectus supplement
the terms of the series of units being offered, including:
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the designation and terms
of the units and of the securities comprising the units, including whether and under what circumstances those securities may be held
or transferred separately; |
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any provisions for the
issuance, payment, settlement, transfer, or exchange of the units or of the securities composing the units; |
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whether the units will
be issued in fully registered or global form; and |
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any other terms of the
units. |
LEGAL OWNERSHIP OF SECURITIES
We can issue securities in registered form or in the
form of one or more global securities. We describe global securities in greater detail below. We refer to those persons who have securities
registered in their own names on the books that we or any applicable trustee, depositary or warrant agent maintain for this purpose as
the “holders” of those securities. These persons are the legal holders of the securities. We refer to those persons who, indirectly
through others, own beneficial interests in securities that are not registered in their own names, as “indirect holders” of
those securities. As we discuss below, indirect holders are not legal holders, and investors in securities issued in book-entry form or
in street name will be indirect holders.
Book-Entry Holders
We may issue securities in book-entry form only, as
we will specify in the applicable prospectus supplement. This means securities may be represented by one or more global securities registered
in the name of a financial institution that holds them as depositary on behalf of other financial institutions that participate in the
depositary’s book-entry system. These participating institutions, which are referred to as participants, in turn, hold beneficial
interests in the securities on behalf of themselves or their customers.
Only the person in whose name a security is registered
is recognized as the holder of that security. Global securities will be registered in the name of the depositary or its participants.
Consequently, for global securities, we will recognize only the depositary as the holder of the securities, and we will make all payments
on the securities to the depositary. The depositary passes along the payments it receives to its participants, which in turn pass the
payments along to their customers who are the beneficial owners. The depositary and its participants do so under agreements they have
made with one another or with their customers; they are not obligated to do so under the terms of the securities.
As a result, investors in a global security will not
own securities directly. Instead, they will own beneficial interests in a global security, through a bank, broker or other financial institution
that participates in the depositary’s book-entry system or holds an interest through a participant. As long as the securities are
issued in global form, investors will be indirect holders, and not legal holders, of the securities.
Street Name Holders
We may terminate a global security or issue securities
that are not issued in global form. In these cases, investors may choose to hold their securities in their own names or in “street
name.” Securities held by an investor in street name would be registered in the name of a bank, broker or other financial institution
that the investor chooses, and the investor would hold only a beneficial interest in those securities through an account he or she maintains
at that institution.
For securities held in street name, we or any applicable
trustee or depositary will recognize only the intermediary banks, brokers and other financial institutions in whose names the securities
are registered as the holders of those securities, and we or any such trustee or depositary will make all payments on those securities
to them. These institutions pass along the payments they receive to their customers who are the beneficial owners, but only because they
agree to do so in their customer agreements or because they are legally required to do so. Investors who hold securities in street name
will be indirect holders, not holders, of those securities.
Legal Holders
Our obligations, as well as the obligations of any
applicable trustee or third party employed by us or a trustee, run only to the legal holders of the securities. We do not have obligations
to investors who hold beneficial interests in global securities, in street name or by any other indirect means. This will be the case
whether an investor chooses to be an indirect holder of a security or has no choice because we are issuing the securities only in global
form.
For example, once we make a payment or give a notice
to the holder, we have no further responsibility for the payment or notice even if that holder is required, under agreements with its
participants or customers or by law, to pass it along to the indirect holders but does not do so. Similarly, we may want to obtain the
approval of the holders to amend an indenture, to relieve us of the consequences of a default or of our obligation to comply with a particular
provision of an indenture, or for other purposes. In such an event, we would seek approval only from the legal holders, and not the indirect
holders, of the securities. Whether and how the legal holders contact the indirect holders is up to the legal holders.
Special Considerations for Indirect Holders
If you hold securities through a bank, broker or other
financial institution, either in book-entry form because the securities are represented by one or more global securities or in street
name, you should check with your own institution to find out:
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how it handles securities
payments and notices; |
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whether it imposes fees
or charges; |
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how it would handle a request
for the holders’ consent, if ever required; |
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whether and how you can
instruct it to send you securities registered in your own name so you can be a holder, if that is permitted in the future; |
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how it would exercise rights
under the securities if there were a default or other event triggering the need for holders to act to protect their interests; and |
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if the securities are in
book-entry form, how the depositary’s rules and procedures will affect these matters. |
Global Securities
A global security is a security that represents one
or any other number of individual securities held by a depositary. Generally, all securities represented by the same global securities
will have the same terms.
Each security issued in book-entry form will be represented
by a global security that we issue to, deposit with and register in the name of a financial institution or its nominee that we select.
The financial institution that we select for this purpose is called the depositary. Unless we specify otherwise in the applicable prospectus
supplement, The Depository Trust Company, New York, New York, known as DTC, will be the depositary for all securities issued in book-entry
form.
A global security may not be transferred to or registered
in the name of anyone other than the depositary, its nominee or a successor depositary, unless special termination situations arise. We
describe those situations below under “—Special Situations When a Global Security Will Be Terminated.” As a result of
these arrangements, the depositary, or its nominee, will be the sole registered owner and legal holder of all securities represented by
a global security, and investors will be permitted to own only beneficial interests in a global security. Beneficial interests must be
held by means of an account with a broker, bank or other financial institution that in turn has an account with the depositary or with
another institution that does. Thus, an investor whose security is represented by a global security will not be a legal holder of the
security, but only an indirect holder of a beneficial interest in the global security.
If the prospectus supplement for a particular security
indicates that the security will be issued in global form only, then the security will be represented by a global security at all times
unless and until the global security is terminated. If termination occurs, we may issue the securities through another book-entry clearing
system or decide that the securities may no longer be held through any book-entry clearing system.
Special Considerations for Global Securities
As an indirect holder, an investor’s rights
relating to a global security will be governed by the account rules of the investor’s financial institution and of the depositary,
as well as general laws relating to securities transfers. We do not recognize an indirect holder as a holder of securities and instead
deal only with the depositary that holds the global security.
If securities are issued only as global securities,
an investor should be aware of the following:
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an investor cannot cause
the securities to be registered in his or her name, and cannot obtain non-global certificates for his or her interest in the securities,
except in the special situations we describe below; |
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an investor will be an
indirect holder and must look to his or her own bank or broker for payments on the securities and protection of his or her legal
rights relating to the securities, as we describe above; |
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an investor may not be
able to sell interests in the securities to some insurance companies and to other institutions that are required by law to own their
securities in non-book-entry form; |
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an investor may not be
able to pledge his or her interest in the global security in circumstances where certificates representing the securities must be
delivered to the lender or other beneficiary of the pledge in order for the pledge to be effective; |
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the depositary’s
policies, which may change from time to time, will govern payments, transfers, exchanges and other matters relating to an investor’s
interest in the global security; |
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we and any applicable trustee
have no responsibility for any aspect of the depositary’s actions or for its records of ownership interests in the global security,
nor will we or any applicable trustee supervise the depositary in any way; |
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the depositary may, and
we understand that DTC will, require that those who purchase and sell interests in the global security within its book-entry system
use immediately available funds, and your broker or bank may require you to do so as well; and |
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financial institutions
that participate in the depositary’s book-entry system, and through which an investor holds its interest in the global security,
may also have their own policies affecting payments, notices and other matters relating to the securities. |
There may be more than one financial intermediary
in the chain of ownership for an investor. We do not monitor and are not responsible for the actions of any of those intermediaries.
Special Situations When a Global Security Will
Be Terminated
In a few special situations described below, a global
security will terminate and interests in it will be exchanged for physical certificates representing those interests. After that exchange,
the choice of whether to hold securities directly or in street name will be up to the investor. Investors must consult their own banks
or brokers to find out how to have their interests in securities transferred to their own names, so that they will be direct holders.
We have described the rights of holders and street name investors above.
Unless we provide otherwise in the applicable prospectus
supplement, a global security will terminate when the following special situations occur:
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if the depositary notifies
us that it is unwilling, unable or no longer qualified to continue as depositary for that global security and we do not appoint another
institution to act as depositary within 90 days; |
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if we notify any applicable
trustee that we wish to terminate that global security; or |
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if an event of default
has occurred with regard to securities represented by that global security and has not been cured or waived. |
The applicable prospectus supplement may also list
additional situations for terminating a global security that would apply only to the particular series of securities covered by the applicable
prospectus supplement. When a global security terminates, the depositary, and neither we nor any applicable trustee, is responsible for
deciding the names of the institutions that will be the initial direct holders.
PLAN OF DISTRIBUTION
We may sell the securities from time to time pursuant
to underwritten public offerings, direct sales to the public, an “at the market offering” within the meaning of Rule 415(a)(4) of
the Securities Act to or through a market maker or into an existing trading market on an exchange or otherwise, negotiated transactions,
block trades or a combination of these methods. We may sell the securities to or through one or more underwriters or dealers (acting as
principal or agent), through agents, or directly to one or more purchasers. We may distribute securities from time to time in one or more
transactions:
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at a fixed price or prices,
which may be changed; |
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at market prices prevailing
at the time of sale; |
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at prices related to such
prevailing market prices; or |
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at negotiated prices. |
A prospectus supplement or supplements (and any related
free writing prospectus that we may authorize to be provided to you) will describe the terms of the offering of the securities, including,
to the extent applicable:
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the name or names of the
underwriters, dealers, agents or other purchasers, if any; |
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the purchase price of the
securities or other consideration therefor, and the proceeds we will receive from the sale; |
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any option to purchase
additional shares or other options under which underwriters, dealers, agents or other purchasers may purchase additional securities
from us; |
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any agency fees or underwriting
discounts to be allowed or paid to the agent or underwriters and other items constituting agents’ or underwriters’ compensation; |
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any public offering price; |
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any discounts or concessions
allowed or reallowed or paid to dealers; and |
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any securities exchange
or market on which the securities may be listed. |
Only underwriters named in the prospectus supplement
will be underwriters of the securities offered by the prospectus supplement. Dealers and agents participating in the distribution of the
securities may be deemed to be underwriters, and compensation received by them on resale of the securities may be deemed to be underwriting
discounts. If such dealers or agents were deemed to be underwriters, they may be subject to statutory liabilities under the Securities
Act.
If underwriters are used in the sale, they will acquire
the securities for their own account and may resell the securities from time to time in one or more transactions at a fixed public offering
price or at varying prices determined at the time of sale. The obligations of the underwriters to purchase the securities will be subject
to the conditions set forth in the applicable underwriting agreement. We may offer the securities to the public through underwriting syndicates
represented by managing underwriters or by underwriters without a syndicate. Subject to certain conditions, the underwriters will be obligated
to purchase all of the securities offered by the prospectus supplement other than securities covered by any option to purchase additional
shares or other option. If a dealer is used in the sale of securities, we, or an underwriter, will sell the securities to the dealer,
as principal. The dealer may then resell the securities to the public at varying prices to be determined by the dealer at the time of
resale. To the extent required, we will set forth in the prospectus supplement the name of the dealer and the terms of the transaction.
Any public offering price and any discounts or concessions allowed or reallowed or paid to dealers may change from time to time. We may
use underwriters, dealers or agents with whom we have a material relationship. We will describe in the prospectus supplement, naming the
underwriter, dealer or agent, the nature of any such relationship.
We may sell securities directly or through agents
we designate from time to time. We will name any agent involved in the offering and sale of securities, and we will describe any commissions
we will pay the agent in the prospectus supplement. Unless the prospectus supplement states otherwise, the agent will act on a best-efforts
basis for the period of its appointment.
We may authorize agents or underwriters to solicit
offers by certain types of institutional investors to purchase securities from us at the public offering price set forth in the prospectus
supplement pursuant to delayed delivery contracts providing for payment and delivery on a specified date in the future. We will describe
the conditions to these contracts and the commissions we must pay for solicitation of these contracts in the prospectus supplement.
We may provide agents, dealers and underwriters with
indemnification against civil liabilities, including liabilities under the Securities Act, or contribution with respect to payments that
the agents, dealers or underwriters may make with respect to these liabilities. Agents, dealers and underwriters or their affiliates may
engage in transactions with, or perform services for, us in the ordinary course of business.
All securities we may offer, other than common stock,
will be new issues of securities with no established trading market. Any underwriters may make a market in these securities, but will
not be obligated to do so and may discontinue any market making at any time without notice. We cannot guarantee the liquidity of the trading
markets for any securities.
Any underwriter may engage in overallotment, stabilizing
transactions, short covering transactions and penalty bids. Overallotment involves sales in excess of the offering size, which create
a short position. Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed
a specified maximum price. Syndicate covering or other short-covering transactions involve purchases of the securities, either through
exercise of the option to purchase additional shares or in the open market after the distribution is completed, to cover short positions.
Short covering transactions involve purchases of the securities in the open market after the distribution is completed to cover short
positions. Penalty bids permit the underwriters to reclaim a selling concession from a dealer when the securities originally sold by the
dealer are purchased in a stabilizing or covering transaction to cover short positions. Those activities may cause the price of the securities
to be higher than it would otherwise be. If commenced, the underwriters may discontinue any of the activities at any time. These transactions
may be effected on any exchange or over-the-counter market or otherwise.
Any underwriters, dealers or agents that are qualified
market makers on the Nasdaq Capital Market may engage in passive market making transactions in our common stock on the Nasdaq Capital
Market in accordance Regulation M under the Exchange Act, during the business day prior to the pricing of the offering, before the commencement
of offers or sales of the securities. Passive market makers must comply with applicable volume and price limitations and must be identified
as passive market makers. In general, a passive market maker must display its bid at a price not in excess of the highest independent
bid for such security; if all independent bids are lowered below the passive market maker’s bid, however, the passive market maker’s
bid must then be lowered when certain purchase limits are exceeded. Passive market making may stabilize the market price of the securities
at a level above that which might otherwise prevail in the open market and, if commenced, may be discontinued at any time.
The specific terms of any lock-up provisions in respect of any given offering
will be described in the applicable prospectus supplement.
The anticipated date of delivery of offered securities
will be set forth in the applicable prospectus supplement relating to each offer.
LEGAL MATTERS
The validity
of the securities being offered by this prospectus with respect to matters of Nevada law is being passed upon by Parsons Behle &
Latimer, Reno, Nevada. The validity of the securities being offered by this prospectus with respect
to matters of New York law is being passed upon by Blank Rome LLP, New York, New York, which is acting as securities counsel
to Data Storage Corporation. Additional legal matters may be passed upon for us or any underwriters, dealers or agents, by counsel that
we will name in the applicable prospectus supplement.
EXPERTS
The consolidated financial statements of Data Storage
Corporation as of December 31, 2023 and 2022 and for each of the two years in the period ended December 31, 2023 incorporated
by reference in this prospectus and in the registration statement of which this prospectus forms a part have been so incorporated in reliance
on the report of Rosenberg Rich Baker Berman, P.A., an independent registered public accounting
firm, given on the authority of said firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus is part of a registration statement
we filed with the SEC. This prospectus does not contain all of the information set forth in the registration statement and the exhibits
to the registration statement. For further information with respect to us and the securities we are offering under this prospectus, we
refer you to the registration statement and the exhibits and schedules filed as a part of the registration statement. Neither we nor any
agent, underwriter or dealer has authorized any person to provide you with different information. We are not making an offer of these
securities in any state where the offer is not permitted. You should not assume that the information in this prospectus is accurate as
of any date other than the date on the front page of this prospectus, regardless of the time of delivery of this prospectus or any
sale of the securities offered by this prospectus.
We file annual, quarterly and current reports, proxy
statements and other information with the SEC. Our SEC filings are available to the public at the SEC’s website at www.sec.gov.
Our SEC filings are also available on our website, www.dtst.com under the heading “SEC Filings.” The reference to our
website is an inactive textual reference only, the information contained in, and that can be accessed through our website, is not incorporated
into and is not a part of this prospectus. We make available on our website our SEC filings as soon as reasonably practicable after those
reports are filed with the SEC.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to “incorporate by reference”
information from other documents that we file with it, which means that we can disclose important information to you by referring you
to those documents. The information incorporated by reference is considered to be part of this prospectus. Information in this prospectus
supersedes information incorporated by reference that we filed with the SEC prior to the date of this prospectus.
We incorporate by reference into this prospectus and
the registration statement of which this prospectus is a part the information or documents listed below that we have filed with the SEC
(Commission File No. 001-35384):
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Our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on March 28, 2024; |
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Our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2024 filed with the SEC on May 15, 2024; |
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Our Current Reports on
Form 8-K filed with the SEC on January
5, 2024, January 18, 2024, January
19, 2024, March 11, 2024, March
27, 2024, April 2, 2024, May
6, 2024 and June 24, 2024; |
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The description of our common stock and May 2021 Warrants set forth in (i) our registration statement on Form 8-A12B, filed with the SEC on May 10, 2021 (File No. 001-35384) and (ii) Exhibit 4.10—Description of Securities to our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on March 28, 2024. |
We also incorporate by reference any future
filings (other than current reports furnished under Item 2.02 or Item 7.01 of Form 8-K and exhibits filed on such form that are
related to such items unless such Form 8-K expressly provides to the contrary) made with the SEC pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act, including those made (i) on or after the date of the initial filing of the
registration statement of which this prospectus forms a part and prior to effectiveness of such registration statement, and
(ii) on or after the date of this prospectus but prior to the termination of the offering (i.e., until the earlier of the date
on which all of the securities registered hereunder have been sold or the registration statement of which this prospectus forms a
part has been withdrawn). Information in such future filings updates and supplements the information provided in this prospectus.
Any statements in any such future filings will automatically be deemed to modify and supersede any information in any document we
previously filed with the SEC that is incorporated or deemed to be incorporated herein by reference to the extent that statements in
the later filed document modify or replace such earlier statements.
We will furnish without charge to each person, including
any beneficial owner, to whom a prospectus is delivered, upon written or oral request, a copy of any or all of the documents incorporated
by reference into this prospectus but not delivered with the prospectus, including exhibits that are specifically incorporated by reference
into such documents. You should direct any requests for documents to:
Data Storage Corporation
225 Broadhollow Road, Suite 307
Melville, New York 11747
Telephone: (212) 564-4922
Attention: Corporate Secretary
You may also access these documents, free of charge,
on the SEC’s website at www.sec.gov or on our website at www.dtst.com/sec-filings. The information contained in, or
that can be accessed through, our website is not incorporated by reference in, and is not part of, this prospectus or any accompanying
prospectus supplement.
In accordance with Rule 412 of the Securities
Act, any statement contained in a document incorporated by reference herein shall be deemed modified or superseded to the extent that
a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement.
You should rely only on information contained in,
or incorporated by reference into, this prospectus and any prospectus supplement. We have not authorized anyone to provide you with information
different from that contained in this prospectus or incorporated by reference into this prospectus. We are not making offers to sell the
securities in any jurisdiction in which such an offer or solicitation is not authorized or in which the person making such offer or solicitation
is not qualified to do so or to anyone to whom it is unlawful to make such an offer or solicitation.
The information contained in this prospectus
is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange
Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities
in any jurisdiction where the offer or sale is not permitted.
Subject to Completion, Dated July 18,
2024
PROSPECTUS
Up to $10,600,000 of Shares
of Common Stock
We have entered into an Equity Distribution Agreement,
dated July 18, 2024 (the “Equity Distribution Agreement”), with Maxim Group LLC (“Maxim” or the “Sales Agent”),
pursuant to which we may, issue and sell shares of our common stock, par value $0.001 per share, from time to time through or to the Sales
Agent, acting as our agent or principal, of which up to $10,600,000 of shares of our common stock are covered by this prospectus.
Sales of shares of our common stock, if any, under
this prospectus will be made in sales deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated
under the Securities Act of 1933, as amended (the “Securities Act”). The Sales Agent is not required to sell any specific
amount, but will act as sales agent on a commercially reasonable efforts basis consistent with its normal trading and sales practices,
on mutually agreed terms between the Sales Agent and us. There is no arrangement for funds to be received in any escrow, trust or similar
arrangement.
As Sales Agent, Maxim is entitled to compensation
at a fixed commission rate up to 2.5% of the gross proceeds of each sale of shares of our common stock made pursuant to the Equity Distribution
Agreement. In connection with the sale of shares of our common stock on our behalf, the Sales
Agent will be deemed to be an “underwriter” within the meaning of the Securities Act and the compensation of the Sales Agent
will be deemed to be underwriting commissions or discounts. We have also agreed to provide indemnification and contribution to the Sales
Agent with respect to certain liabilities, including liabilities under the Securities Act. We will pay all of the expenses incident to
the registration, offering and sale of the shares of our common stock under this prospectus.
Our common stock is listed on the Nasdaq Capital Market
under the symbol “DTST.” On July 9, 2024, the last reported sale price of our common stock on the Nasdaq Capital Market was
$6.44 per share.
As of the date of this prospectus, the aggregate market
value of our outstanding common stock held by non-affiliates is approximately $32,092,110, which is calculated based on 4,109,105 shares
of our outstanding common stock held by non-affiliates and a price of $7.81 per share, the closing price of our common stock on May 29,
2024, which is the highest closing sale price of our common stock on the Nasdaq Capital Market within the prior 60 days of this prospectus.
During the prior twelve calendar month period that ends on and includes the date hereof, we have not offered and sold any of our securities
pursuant to General Instruction I.B.6 to Form S-3.
Investing in our common stock involves a high degree of risk. Before making an investment
decision, please read the information under the heading “Risk Factors” beginning on page S-8 of this prospectus, page
7 of the base prospectus and in the documents incorporated by reference into this prospectus.
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus.
Any representation to the contrary is a criminal offense.
Maxim Group LLC
The date of this prospectus is , 2024
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
This prospectus relates to part of a registration
statement on Form S-3 that we have filed with the Securities and Exchange Commission (the “SEC”) utilizing a “shelf”
registration process. Under this shelf registration process, we may sell any combination of the securities described in our base prospectus
included in the shelf registration statement in one or more offerings up to a total aggregate offering price of $50,000,000. The $10,600,000
of shares of common stock that may be offered, issued and sold under this prospectus is included in the $50,000,000 of securities that
may be offered, issued and sold by us pursuant to our shelf registration statement. In connection with such offers and when accompanied
by the base prospectus included in the registration statement of which this prospectus is a part, this prospectus will be deemed a prospectus
supplement to such base prospectus.
This prospectus relates to the offering of our shares
of common stock. Before buying any of our shares of common stock that we are offering, we urge you to carefully read this prospectus,
together with the information incorporated by reference as described under the headings “Where You Can Find More Information”
and “Incorporation of Certain Information by Reference” in this prospectus. These documents contain important information
that you should consider when making your investment decision.
This prospectus describes the terms of this offering
of our shares of common stock and also adds to and updates information contained in the documents incorporated by reference into this
prospectus. To the extent there is a conflict between the information contained in this prospectus, on the one hand, and the information
contained in any document incorporated by reference into this prospectus that was filed with the SEC before the date of this prospectus,
on the other hand, you should rely on the information in this prospectus. If any statement in one of these documents is inconsistent with
a statement in another document having a later date (for example, a document incorporated by reference into this prospectus) the statement
in the document having the later date modifies or supersedes the earlier statement.
You should rely only on the information contained
in or incorporated by reference in this prospectus and in any free writing prospectus that we have authorized for use in connection with
this offering. We have not, and the Sales Agent has not, authorized anyone to provide you with different information. If anyone provides
you with different or inconsistent information, you should not rely on it. We are not, and the Sales Agent is not, making an offer to
sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in
this prospectus, the documents incorporated by reference in this prospectus, and in any free writing prospectus that we have authorized
for use in connection with this offering, is accurate only as of the date of those respective documents. Our business, financial condition,
results of operations and prospects may have changed since those dates. You should carefully read this prospectus, the documents incorporated
by reference in this prospectus, and any free writing prospectus that we have authorized for use in connection with this offering, in
their entirety before making an investment decision.
We further note that the representations, warranties
and covenants made by us in any agreement that is filed as an exhibit to any document that is incorporated by reference in this prospectus
were made solely for the benefit of the parties to such agreement, including, in some cases, for the purpose of allocating risk among
the parties to such agreements, and should not be deemed to be a representation, warranty or covenant to you. Moreover, such representations,
warranties or covenants were accurate only as of the date when made. Accordingly, such representations, warranties and covenants should
not be relied on as accurately representing the current state of our affairs.
This prospectus contains and incorporates by reference
market data and industry statistics and forecasts that are based on independent industry publications and other publicly available information.
Although we believe that these sources are reliable, we do not guarantee the accuracy or completeness of this information and we have
not independently verified this information. Although we are not aware of any misstatements regarding the market and industry data presented
in this prospectus and the documents incorporated herein by reference, these estimates involve risks and uncertainties and are subject
to change based on various factors, including those discussed under the heading “Risk Factors” in this prospectus and under
similar headings in the other documents that are incorporated by reference into this prospectus. Accordingly, investors should not place
undue reliance on this information.
Except as otherwise indicated herein or as the context
otherwise requires, references in this prospectus to “Data Storage,” the “Company,” “we,” “us,”
“our” and similar references refer to Data Storage Corporation, an entity
incorporated under the laws of the State of Nevada, and where appropriate our consolidated subsidiaries.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, including the documents that we incorporate
by reference herein, may contain, forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E
of the Securities Exchange Act of 1934, as amended (“the Exchange Act”), including statements regarding our future financial
condition, business strategy and plans and objectives of management for future operations. Forward-looking statements include all statements
that are not historical facts. In some cases, you can identify forward-looking statements by terminology such as “believe,”
“will,” “may,” “estimate,” “continue,” “anticipate,” “intend,”
“should,” “plan,” “might,” “approximately,” “expect,” “predict,”
“could,” “potentially” or the negative of these terms or other similar expressions. Forward-looking statements
include statements regarding our intentions, beliefs, projections, outlook, analyses or current expectations.
Discussions containing these forward-looking statements
may be found, among other places, in the sections entitled “Business,” “Risk Factors” and “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” contained in the documents incorporated by reference in
this prospectus, including our most recent Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q, as well as any
amendments thereto.
These statements relate to future events or our future
financial performance and involve known and unknown risks, uncertainties and other factors that could cause our actual results, levels
of activity, performance or achievement to differ materially from those expressed or implied by these forward-looking statements. We discuss
in greater detail, and incorporate by reference into this prospectus in their entirety, many of these risks and uncertainties under the
section entitled “Risk Factors” included in our most recent Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q,
as well as any amendments thereto, filed with the SEC, which are incorporated by reference into this prospectus. Additional factors are
discussed under the section entitled “Risk Factors” in this prospectus and any free writing prospectus and under similar headings
in the other documents that are incorporated by reference into this prospectus. These statements reflect our current views with respect
to future events and are based on assumptions and subject to risks and uncertainties. New risks and uncertainties arise from time to time,
and it is impossible for us to predict these events or how they may affect us. We undertake no obligation to revise or publicly release
the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers
are cautioned not to place undue reliance on such forward-looking statements. All forward-looking statements are qualified in their entirety
by this cautionary statement.
PROSPECTUS SUMMARY
The following summary highlights information contained
elsewhere in this prospectus or incorporated by reference herein and does not contain all the information that may be important to purchasers
of our securities. This summary is not intended to be complete and does not contain all of the information that you should consider before
deciding to invest in our securities. You should read this entire prospectus carefully, especially the “Risk Factors” section
beginning on page S-8 and other documents or information included or incorporated by reference in this prospectus before making an
investment decision.
Overview
Data Storage Corporation, a Nevada corporation (“Data Storage,”
“the Company,” “we,” “us,” and “our”), is headquartered in Melville, New York. We leverage
our expertise through our two subsidiaries: CloudFirst Technologies Corporation, a Delaware corporation (“CloudFirst Technologies”),
and Nexxis Inc., a Nevada corporation (“Nexxis”). Through these subsidiaries, we provide solutions and services to a broad
range of clients in various industries, including healthcare, banking and finance, distribution services, manufacturing, construction,
education, and government. Our subsidiaries maintain robust business development teams and independent distribution channels.
Strategic Growth and Infrastructure
In response to a capital raise and Nasdaq uplisting in 2021, we expanded
our distribution networks and bolstered our team, focusing on enhancing our sales, marketing, and technological capabilities. We operate
in six geographically diverse data centers across the U.S. and Canada, supporting our commitment to providing secure and reliable subscription-based
services.
Market Opportunity and Strategic Focus
Recognizing the urgent need for reliable and efficient IT solutions, we
aim to tap into the growing demand for managed cloud and cybersecurity services. CloudFirst Technologies is positioned to capture a significant
share of management’s estimate of the $36 billion annual recurring revenue market in the U.S. and Canada. Our IBM platform, with
assets deployed in six data centers, aligns with IBM’s estimate that 10% of workloads will migrate to cloud-based solutions annually.
Our offerings are designed to support a spectrum of needs, from cloud-based
IBM Power System deployments for critical workloads to comprehensive disaster recovery and cybersecurity protections. Our focus on hybrid
cloud deployments ensures that data and workloads remain secure against various threats.
Operational Footprint
We operate from key locations in New York, Florida, and Texas, with technology
centers and labs designed to meet sophisticated client requirements. Our network includes seven geographically diverse data centers across
the U.S. and Canada, providing secure, resilient, and scalable IT solutions.
Solutions and Services
The Company provides fully integrated cloud hosting, disaster recovery,
cybersecurity, IT automation, and voice & data solutions. With strategic technical investments in multiple regions, DTST serves a
diverse clientele, including Fortune 500 companies, in sectors such as government, manufacturing, education, and healthcare. Focused on
the fast-growing, multi-billion-dollar business continuity market and cloud infrastructure solutions, DTST is recognized as a stable and
emerging growth leader. Our seven regional data centers across North America enable us to deliver sustainable services through recurring
subscription agreements.
Growth and Innovation
Driven by a steadfast commitment to innovation and client satisfaction,
we continuously refine our service offerings and expand our market reach. Our strategic growth is bolstered by a team of solution architects
and business development professionals dedicated to addressing complex business challenges and nurturing long-term client relationships.
By integrating organic growth strategies with targeted expansion efforts, we are well-positioned to seize opportunities in the dynamic
IT landscape and deliver exceptional value to our clients.
Growth Strategies
We aim to enhance revenue streams and market presence by:
| ● | Expanding Our Service Offerings: We will continuously innovate and expand our service offerings to meet the evolving needs
of our clients, ensuring that we remain at the forefront of industry trends and technological advancements. |
| ● | Investing in Research and Development: By investing in R&D, we will drive innovation, develop cutting-edge solutions, and
maintain our competitive edge in the market. |
| ● | Enhancing Customer Experience: We will focus on improving customer satisfaction through personalized services, robust support
systems, and continuous feedback mechanisms to ensure we meet and exceed client expectations. |
| ● | Strengthening Strategic Alliances: We will forge and strengthen strategic alliances with key industry players to enhance our
service portfolio and market reach. |
| ● | Implementing Sustainable Practices: By adopting sustainable business practices, we will contribute to environmental conservation
and appeal to the growing market segment that values corporate responsibility. |
Core Services
We provide a comprehensive suite of multi-cloud IT solutions, ensuring
high security and enterprise-level services for clients using IBM Power Systems, Microsoft Windows, and Linux. Our key service areas include:
| o | ezManage™:
Comprehensive IT management solutions, including system monitoring, maintenance, and
support to ensure optimal performance and uptime. |
| o | ezCompliance™:
Compliance management services to help clients adhere to industry regulations and standards. |
| ● | Advanced
Analytics and Reporting: |
| o | ezAnalytics™:
Advanced analytics services that provide actionable insights, helping clients make informed
decisions. |
| o | ezReporting™:
Customizable reporting solutions that offer real-time visibility into system performance
and business metrics. |
| ● | Application
Development and Integration: |
| o | ezDevelop™:
Custom application development services to meet specific business needs. |
| o | ezIntegrate™:
Seamless integration services that ensure smooth interoperability between different systems
and applications. |
| ● | Training
and Consulting Services: |
| o | ezTrain™:
Comprehensive training programs to empower clients with the knowledge and skills needed
to effectively utilize our solutions. |
| o | ezConsult™:
Expert consulting services to provide strategic guidance and support for IT projects
and initiatives. |
These strategies and services position us for sustained growth by meeting
the evolving needs of our clients and capitalizing on market opportunities.
Corporate Information
Data Storage Corporation, a Delaware corporation founded in 2001, became
a subsidiary of Data Storage Corporation, a Nevada corporation (“Data Storage Corporation Nevada”), in 2008. Initially known
as Euro Trend Inc., Data Storage Corporation Nevada was founded on October 20, 2008, and commenced its operations with a share exchange
transaction. Following this acquisition, we adopted our current corporate identity.
Our principal executive offices are located at 225 Broadhollow Road, Suite
307, Melville, New York 11747. You can reach us by phone at (212) 564-4922. For more information, please visit our website at www.dtst.com.
Please note that information on our website is provided for informational purposes only and is not incorporated by reference into this
prospectus. It should not be considered part of this prospectus or the registration statement to which it pertains. The SEC maintains
a website that contains reports, proxy and information statements, and other documents filed electronically with the SEC by issuers like
us. You can access these documents at www.sec.gov.
| THE OFFERING |
| |
|
| Issuer |
Data Storage Corporation |
| |
|
Common
stock to be offered by us
pursuant
to this prospectus |
Up to 1,645,962 shares
of our common stock having an aggregate offering price of up to approximately $10,600,000 at an assumed offering price of $6.44 per
share, which was the last reported sale price of our common stock on the Nasdaq Capital Market on July 9, 2024. |
| |
|
Common
stock to be outstanding
after
the offering |
Up to 8,641,784 shares
of our common stock (as more fully described in the notes following this table), assuming sales of approximately $10,600,000 shares
of our common stock, or 1,645,962 shares of our common stock in this offering at an assumed offering price of $6.44 per share, which
was the last reported sale price of our common stock on the Nasdaq Capital Market on July 9, 2024. The actual number of shares issued
will vary depending on the sales price under this offering.(1) |
| |
|
| Manner of offering |
“At the market offering”
as defined in Rule 415(a)(4) pursuant to which we may, issue and sell shares of our common stock, from time to time through or to
the Sales Agent, acting as our agent or principal, of which up to $10,600,000 of shares of our common stock (or 1,645,962 shares
of our common stock in this offering at an assumed offering price of $6.44 per share, which was the last reported sale price of our
common stock on the Nasdaq Capital Market on July 9, 2024) are covered by this prospectus. See the section of this prospectus entitled
“Plan of Distribution.” |
| |
|
| Use of proceeds |
We currently intend to
use the net proceeds from this offering for working capital and general corporate purposes,
business development and potential acquisitions. See the section of this prospectus entitled “Use of Proceeds.” |
| |
|
| Risk factors |
You should read the “Risk
Factors“ section of this prospectus and in the documents incorporated by reference in this prospectus for a discussion of factors
to consider before deciding to purchase shares of our common stock. |
| |
|
Nasdaq
Capital Market
Trading
Symbol |
DTST |
Unless we indicate otherwise, all information in this
prospectus is based on 6,995,822 shares of our common stock outstanding as of July 9, 2024.
The number of shares outstanding as used throughout this prospectus, unless otherwise indicated, excludes, as of July 9, 2024:
●
701,346 shares of our common stock issuable upon the exercise of outstanding stock options, with a weighted-average exercise price of
$2.77 per share;
●
2,495,860 shares of our common stock issuable upon exercise of outstanding warrants, with a weighted average exercise price of $6.90
per share;
●
234,375 shares of our common stock issuable upon vesting of restricted stock units (“RSUs”); and
●
961,782 additional shares of our common stock reserved for future issuance under our equity incentive plans as of July 9,
2024.
RISK FACTORS
Investing in our common stock involves a high degree
of risk, and you should be able to bear the complete loss of your investment. You should consider carefully the risks described below
and those described under the section captioned “Risk Factors” contained in our Annual Report on Form 10-K for the year
ended December 31, 2023 filed with the SEC on March 28, 2024, any subsequent Annual Reports on Form 10-K, any subsequent Quarterly
Reports on Form 10-Q or Current Reports on Form 8-K, and all other information contained or incorporated by reference into this
prospectus and documents incorporated by reference into this prospectus before deciding whether to purchase any of the common stock being
offered under this prospectus. If any of the risks actually occur, our business, consolidated financial condition or results of operations
could be adversely affected. In such case, the trading price of our common stock could decline and you could lose all or part of your
investment. Our actual results could differ materially from those anticipated in the forward-looking statements made throughout this prospectus
as a result of different factors, including the risks we face described below.
Risks Related to this Offering
Our management will have broad discretion over
the use of proceeds from this offering and may not use the proceeds effectively.
Our management will have broad discretion over the
use of proceeds from this offering. We intend to use the net proceeds from this offering, if any, for working capital and general corporate
purposes, business development and potential acquisitions. Our management will have
considerable discretion in the application of the net proceeds, and you will not have the opportunity, as part of your investment decision,
to assess whether the proceeds are being used appropriately. The net proceeds, if any, may be used for corporate purposes that do not
improve our operating results or enhance the value of our common stock. The failure of our management to use these funds effectively could
have a material adverse effect on our business and cause the market price of our common stock to decline. Pending their use, we may invest
the net proceeds from this offering in short-term, investment-grade, interest-bearing instruments and U.S. government securities. These
investments may not yield a favorable return to our stockholders.
The Company’s
stock price has fluctuated in the past and may be volatile in the future, and as a result, investors in our common stock could incur substantial
losses.
Our stock price has fluctuated
in the past, has recently been volatile, and may be volatile in the future. By way of example, on September 1, 2023, the reported low
sale price of our common stock on the Nasdaq Capital Market was $3.21, and the reported high sales price was $3.75. For comparison purposes,
on January 12, 2023, the price of our common stock closed on the Nasdaq Capital Market at $1.61 per share, on October 17, 2023, our stock
price closed at $3.49 per share, and on May 29, 2024, its stock price closed at $7.81 per share with no discernable announcements or developments
by us or third parties (other than the filing of our Quarterly Reports on Form 10-Q). More recently, from
January 1, 2024 through May 29, 2024, the reported closing price of our common stock on the Nasdaq Capital Market has
fluctuated between $2.78 and $7.81 per share. Such volatility can be attributable to a number of factors. For example,
we may incur rapid and substantial decreases in our stock price in the foreseeable future that are unrelated to our operating performance
or prospects. The stock market has experienced extreme volatility that has often been unrelated to the operating performance of particular
companies. As a result of this volatility, investors may experience losses on their investment in our common stock. The market price for
our common stock may be influenced by many factors, including the following:
| |
● |
investor reaction
to our business strategy; |
| |
● |
the success
of competitive products or technologies; |
| |
● |
regulatory
or legal developments in the United States and other countries, especially changes in laws or regulations applicable to our
products; |
| |
● |
variations
in our financial results or those of companies that are perceived to be similar to us; |
| |
● |
our
ability or inability to raise additional capital and the terms on which we raise it; |
| |
|
|
| |
● |
declines
in the market prices of stocks generally; |
| |
● |
our
public disclosure of the terms of any financing which we consummate in the future; |
| |
● |
an
announcement that we have effected a reverse split of our common stock and treasury stock; |
| |
● |
our
failure to be profitable; |
| |
● |
our
failure to raise working capital; |
| |
● |
any
acquisitions we may consummate; |
| |
● |
announcements
by us or our competitors of significant contracts, new services, acquisitions, commercial relationships, joint ventures or capital
commitments; |
| |
● |
cancellation
of key contracts; |
| |
● |
our
failure to meet financial forecasts it publicly discloses; |
| |
● |
trading volume
of our common stock; |
| |
● |
sales of our
common stock by us or our stockholders; |
| |
● |
general economic,
industry and market conditions; and |
| |
|
|
| |
● |
other
events or factors, including those resulting from such events, or the prospect of such events, including war, terrorism and other
international conflicts, public health issues including health epidemics or pandemics, and natural disasters such as hurricanes,
floods, fires, earthquakes, tornadoes or other adverse weather and climate conditions, whether occurring in the United States or
elsewhere, could disrupt our operations, disrupt the operations of its suppliers or result in political or economic instability. |
These broad market and industry
factors may seriously harm the market price of our common stock, regardless of our operating performance. Since the stock price of our
common stock has fluctuated in the past, has been volatile recently and may be volatile in the future, investors in our common stock could
incur substantial losses. In the past, following periods of volatility in the market, securities class-action litigation has often been
instituted against companies. Such litigation, if instituted against the Company, could result in substantial costs and diversion of management’s
attention and resources, which could materially and adversely affect its business, financial condition, results of operations and growth
prospects. There can be no guarantee that our stock price will remain at current prices or that future sales of our common stock will
not be at prices lower than those sold to investors.
Additionally, recently, securities
of certain companies have experienced significant and extreme volatility in stock price due to short sellers of shares of common stock,
known as a “short squeeze.” These short squeezes have caused extreme volatility in those companies and in the market and have
led to the price per share of those companies to trade at a significantly inflated rate that is disconnected from the underlying value
of the company. Many investors who have purchased shares in those companies at an inflated rate face the risk of losing a significant
portion of their original investment as the price per share has declined steadily as interest in those stocks has abated. While the Company
has no reason to believe its shares would be the target of a short squeeze, there can be no assurance that it won’t be in the future,
and you may lose a significant portion or all of your investment if you purchase our shares at a rate that is significantly disconnected
from its underlying value.
If you purchase shares of our common stock sold
in this offering, you will experience immediate and substantial dilution in the net tangible book value of your shares. In addition, we
may in the future issue additional equity securities or securities convertible into or exchangeable for equity securities, which may result
in additional dilution to investors.
The price per share of our common stock being offered
may be higher than the net tangible book value per share of our outstanding common stock prior to this offering. Assuming that an aggregate
of 1,645,962 shares of our common stock are sold at a price of $6.44 per share, the last reported sale price of our common stock on the
Nasdaq Capital Market on July 9, 2024, new investors in this offering will incur immediate dilution of $3.60 per share, representing the
difference between our as adjusted net tangible book value per share as of March 31, 2024 after giving effect to this offering and the
assumed price. For a more detailed discussion of the foregoing, see the section entitled “Dilution” elsewhere in this prospectus.
To the extent that our outstanding stock options or warrants are exercised, there will be further dilution to new investors.
Our need for future financing may result in
the issuance of additional securities which will cause investors to experience dilution.
Our cash requirements may vary from those now planned
depending upon numerous factors. There are no commitments by any person for future financing. Our securities may be offered to other investors
at a price lower than the price per share offered to current stockholders, or upon terms which may be deemed more favorable than those
offered to current stockholders. In addition, the issuance of securities in any future financing may dilute an investor’s equity
ownership and have the effect of depressing the market price for our securities. Moreover, we may issue derivative securities, including
options and/or warrants, from time to time, to procure qualified personnel or for other business reasons. The issuance of any such derivative
securities, which is at the discretion of our Board of Directors, may further dilute the equity ownership of our stockholders.
We may sell shares or other securities in any other
offering at a price per share that is less than the price per share paid by investors in this offering, and investors purchasing shares
or other securities in the future could have rights superior to existing stockholders. The price per share at which we sell additional
shares of our common stock, or securities convertible or exchangeable into common stock, in future transactions may be higher or lower
than the price per share paid by investors in this offering. No assurance can be given as to our ability to procure additional financing,
if required, and on terms deemed favorable to us. To the extent additional capital is required and cannot be raised successfully, we may
then have to limit our then current operations and/or may have to curtail certain, if not all, of our business objectives and plans.
Upon exercise of our
outstanding options or warrants, it will be obligated to issue a substantial number of additional shares of common stock, which will dilute
its present shareholders.
We are obligated to issue additional shares of our common stock in connection
with any exercise or conversion, as applicable, of its outstanding options, warrants, and shares of its convertible preferred stock. As
of March 31, 2024, there were options and warrants outstanding convertible into an aggregate of 2,495,860 shares of our common stock.
The exercise of warrants or options will cause us to issue additional shares of our common stock and will dilute the percentage ownership
of its shareholders. In addition, we have in the past, and may in the future, exchange outstanding securities for other securities on
terms that are dilutive to the securities held by other shareholders not participating in such an exchange.
We have additional securities available for issuance, which, if issued,
could adversely affect the rights of the holders of our common stock.
Our Articles of Incorporation, as amended (the “Articles
of Incorporation”), authorizes the issuance of 250,000,000 shares of our common stock and 10,000,000 shares of preferred stock.
In certain circumstances, shares of our common stock, as well as the awards available for issuance under our equity incentive plans, can
be issued by our Board of Directors, without stockholder approval. Any future issuances of such stock would further dilute the percentage
ownership of us held by holders of our common stock and preferred stock. In addition, the issuance of certain securities, including pursuant
to the terms of our stockholder rights plan, may be used as an “anti-takeover” device without further action on the part of
our stockholders, and may adversely affect the holders of the common stock.
Because we do not intend to declare cash dividends
on our shares of common stock in the foreseeable future, stockholders must rely on appreciation of the value of our common stock for any
return on their investment.
We have never declared or paid cash dividends on our
common stock. We currently anticipate that we will retain future earnings for the development, operation and expansion of our business
and do not anticipate declaring or paying any cash dividends in the foreseeable future. As a result, we expect that only appreciation
of the price of our common stock, if any, will provide a return to investors in this offering for the foreseeable future.
Resales of our common stock in the public market
during this offering by our stockholders may cause the market price of our common stock to fall.
We may issue shares of our common stock from time
to time in connection with this offering. This issuance from time to time of these new shares of our common stock, or our ability to issue
these shares of our common stock in this offering, could result in resales of our common stock by our current stockholders concerned about
the potential dilution of their holdings. In turn, these resales could have the effect of depressing the market price for our common stock.
The actual number of shares we will issue under
the Equity Distribution Agreement, at any one time or in total, is uncertain.
Subject to certain limitations in the Equity Distribution
Agreement with the Sales Agent and compliance with applicable law, we have the discretion to deliver placement notices to the Sales Agent
at any time throughout the term of the Equity Distribution Agreement. The number of shares that are sold by the Sales Agent after delivering
a placement notice will fluctuate based on the market price of the common stock during the sales period and limits we set with the Sales
Agent.
The shares of common stock offered under this
prospectus and documents incorporated by reference into this prospectus may be sold in an “at the market offering,” and investors
who buy shares at different times will likely pay different prices.
Investors who purchase shares under this prospectus
and documents incorporated by reference into this prospectus at different times will likely pay different prices, and so may experience
different outcomes in their investment results. We will have discretion, subject to market demand, to vary the timing, prices, and numbers
of shares sold, and there is no minimum or maximum sales price. Investors may experience declines in the value of their shares as a result
of share sales made at prices lower than the prices they paid.
Sales of a significant number of shares of our
common stock in the public markets, or the perception that such sales could occur, could depress the market price of our common stock.
Sales of a significant number of shares of our common
stock in the public markets, or the perception that such sales could occur as a result of our utilization of our shelf registration statement,
our Equity Distribution Agreement with Maxim or otherwise could depress the market price of our common stock and impair our ability to
raise capital through the sale of additional equity securities. We cannot predict the effect that future sales of our common stock or
the market perception that we are permitted to sell a significant number of our securities would have on the market price of our common
stock.
USE OF PROCEEDS
We may issue and sell shares of our common stock having
aggregate gross sales proceeds of up to $10,600,000, from time to time. Because there is no minimum offering amount required as a condition
to close this offering, the actual total public offering amount, commissions and proceeds to us, if any, are not determinable at this
time. The amount of proceeds from this offering will depend upon the number of shares of our common stock sold and the market price at
which they are sold. There can be no assurance that we will be able to sell any shares under or fully utilize the Equity Distribution
Agreement as a source of financing.
We currently intend to use the net proceeds, if any,
from the sales of shares of our common stock offered by this prospectus for working and general corporate purposes, business
development and potential acquisitions. We have broad discretion in determining how the proceeds of this offering will be used,
and our discretion is not limited by the aforementioned possible uses. Our Board of Directors believes the flexibility in application
of the net proceeds is prudent.
As of the date of this prospectus, we cannot specify
with certainty all of the particular uses for the net proceeds to be received from this offering. The amounts and timing of our actual
expenditures will depend on numerous factors including our operating costs and the amount of funding, if any, received by us. Accordingly,
our management will have broad discretion in the application of the net proceeds, and investors will be relying on the judgment of management
regarding the application of the net proceeds from the offering. We may find it necessary or advisable to reallocate the net proceeds
of this offering; however, any such reallocation would be substantially limited to the categories set forth above as we do not intend
to use the net proceeds for other purposes. Pending such uses set forth above, we plan to invest the net proceeds in government securities
and other short-term investment grade, marketable securities.
DIVIDEND POLICY
We have never declared or paid any cash dividends
on our capital stock and we do not currently intend to pay any cash dividends on our common stock in the foreseeable future. We expect
to retain all available funds and future earnings, if any, to fund the development and growth of our business. Any future determination
to pay dividends, if any, on our common stock will be at the discretion of our Board of Directors and will depend on, among other factors,
our results of operations, financial condition, capital requirements and contractual restrictions.
DILUTION
Our net tangible book value
as of March 31, 2024 was approximately $14.4 million, or $2.08 per share. Net tangible book value per share is determined by dividing
our total tangible assets, less total liabilities, by the number of shares of our common stock outstanding as of March 31, 2024 (or 6,929,950
shares). Dilution with respect to net tangible book value per share represents the difference between the amount per share paid by purchasers
of shares of common stock in this offering and the net tangible book value per share of our common stock immediately after this offering.
After giving effect to the
issuance of 65,872 shares of our common stock subsequent to March 31, 2024 upon the vesting of restricted stock units, our pro forma net
tangible book value as of March 31, 2024 would have been approximately $14.4 million, or $2.06 per share.
After giving effect to the
pro forma adjustment above and the sale of 1,645,962 shares of our common stock in this offering at an assumed offering price of
$6.44 per share, which was the closing price of our common stock on the Nasdaq Capital Market on July 9, 2024, and after deducting the
Sales Agent fees and estimated offering expenses payable by us, our pro forma, as adjusted net tangible book value as of March 31, 2024
would have been approximately $24.6 million, or $2.84 per share. This represents an immediate increase in as adjusted net tangible
book value of $0.78 per share to existing stockholders and an immediate dilution of $3.60 per share to new investors purchasing shares
of common stock in this offering. The following table illustrates this per share dilution:
| Assumed public offering price per share | |
| | | |
$ | 6.44 | |
| Pro Forma net tangible book value per share as of March 31, 2024 | |
$ | 2.06 | | |
| | |
| Increase in pro forma net tangible book value per share attributable to this offering | |
$ | 0.78 | | |
| | |
| Pro Forma as adjusted net tangible book value per share as of March 31, 2024, after giving effect to this offering | |
| | | |
$ | 2.84 | |
| Dilution per share to new investors purchasing shares of our common stock in this offering | |
| | | |
$ | 3.60 | |
The above discussion and table is
based on 6,929,950 shares of our common stock outstanding as of March 31, 2024, as adjusted for the adjustments set forth above and excludes,
as of March 31, 2024:
| |
● |
701,346
shares of our common stock issuable upon the exercise of outstanding stock options, with a weighted average exercise price of $2.76
per share; |
| |
● |
2,495,860
shares of our common stock issuable upon exercise of outstanding warrants,
with a weighted average exercise price of $6.90 per share; |
| |
● |
242,541
shares of our common stock issuable upon vesting of restricted stock units (“RSUs”); and |
| |
● |
0
additional shares of our common stock reserved for future issuance under our equity incentive plans. |
The above illustration of dilution per share to investors
participating in this offering assumes no exercise of outstanding options to purchase our common stock or outstanding warrants to purchase
shares of our common stock. To the extent that any of these outstanding options or warrants are exercised or we issue additional shares
under our equity incentive plans, there will be further dilution to new investors. In addition, we may choose to raise additional capital
due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.
To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of these securities
could result in further dilution to our stockholders.
PLAN OF DISTRIBUTION
We entered into the Equity Distribution Agreement
with Maxim on July 18, 2024 pursuant to which we may, issue and sell shares of our common stock, from time to time through or to Maxim,
acting as our agent or principal, of which up to $10,600,000 of shares of our common stock are covered by this prospectus. The sales of
shares of our common stock, if any, under this prospectus will be made at market prices by any method deemed to be an “at the market
offering” as defined in Rule 415(a)(4) under the Securities Act.
Each time that we wish to issue and sell shares of
our common stock under the Equity Distribution Agreement, we will provide the Sales Agent with a placement notice describing the amount
of shares to be sold, the time period during which sales are requested to be made, any limitation on the amount of shares of our common
stock that may be sold in any single day, any minimum price below which sales may not be made or any minimum price requested for sales
in a given time period and any other instructions relevant to such requested sales. Upon receipt of a placement notice, Maxim, acting
as our sales agent, will use commercially reasonable efforts, consistent with its normal trading and sales practices and applicable state
and federal laws, rules and regulations and the rules of the Nasdaq Capital Market, to sell shares of our common stock under
the terms and subject to the conditions of the placement notice and the Equity Distribution Agreement. We or the Sales Agent may suspend
the offering of shares of our common stock pursuant to a placement notice upon notice.
Settlement for sales of shares of common stock, unless
the parties agree otherwise, will occur on the first trading day following the date on which any sales are made in return for payment
of the net proceeds to us. There are no arrangements to place any of the proceeds of this offering in an escrow, trust or similar account.
Sales of shares of our common stock as contemplated in this prospectus will be settled through the facilities of The Depository Trust
Company or by such other means as we and the Sales Agent may agree upon.
The Sales Agent will be entitled to compensation at
a fixed commission rate of up to 2.5% of the gross proceeds from the sale of shares of our common stock on our behalf pursuant to the
Equity Distribution Agreement. Pursuant to the terms of the Equity Distribution Agreement, we agreed to reimburse the Sales Agent for
the documented fees and costs of its legal counsel reasonably incurred in connection with entering into the transactions contemplated
by the Equity Distribution Agreement in an amount not to exceed $25,000 in the aggregate, in addition to up to $5,000 quarterly
for the Sales Agent’s counsel’s fees and any incidental expenses to be reimbursed by us. We will report at least quarterly
the number of shares of common stock sold through the Sales Agent under the Equity Distribution Agreement, the net proceeds to us and
the compensation paid by us to the Sales Agent in connection with the sales of common stock.
We estimate that the total expenses for this offering,
excluding the fixed commission rate payable as compensation to the Sales Agent, will be approximately $165,000. The remaining sales proceeds,
after deducting any expenses payable by us and any transaction fees imposed by any governmental, regulatory, or self-regulatory organization
in connection with the sales, will equal our net proceeds for the sale of such shares of common stock.
Because there are no minimum sale requirements as
a condition to this offering, the actual total public offering price, commissions and net proceeds to us, if any, are not determinable
at this time. The actual dollar amount and number of shares of common stock we sell through this prospectus will be dependent, among other
things, on market conditions and our capital raising requirements.
In connection with the sale of shares of common stock
on our behalf, the Sales Agent will be deemed to be an “underwriter” within the meaning of the Securities Act, and the compensation
of the Sales Agent will be deemed to be underwriting commissions or discounts. We have agreed to provide indemnification and contribution
to the Sales Agent against certain civil liabilities, including liabilities under the Securities Act.
The Sales Agent will not engage in any market making
activities involving shares of our common stock while the offering is ongoing under this prospectus if such activity would be prohibited
under Regulation M or other anti-manipulation rules under the Securities Act. As our sales agent, the Sales Agent will not engage
in any transactions that stabilizes shares of our common stock.
The offering pursuant to the Equity Distribution Agreement
will terminate upon the earlier of (i) the sale of all shares of common stock subject to the Equity Distribution Agreement; (ii)
twelve (12) months from the date of the Equity Distribution Agreement; and (iii) termination of the Equity Distribution Agreement
as permitted therein. We may terminate the Equity Distribution Agreement in our sole discretion at any time by giving five (5) business
days’ prior written notice to the Sales Agent. The Sales Agent may terminate the Equity Distribution Agreement if the Sales Agent
is not full satisfied, in its sole discretion, with the results of its and its representatives’ review of our company and our business,
at any time by giving five (5) business days’ prior notice to us.
Electronic Distribution
This prospectus may be made available in electronic
format on a website maintained by the Sales Agent, and the Sales Agent may distribute this prospectus electronically.
Other Relationships
The Maxim Group LLC and/or its affiliates have provided,
and may in the future provide, various investment banking and other financial services for us, for which services they have received and
may in the future receive customary fees. In addition, from time to time, Maxim and its affiliates may effect transactions for their own
account or the account of customers, and hold on behalf of themselves or their customers, long or short positions in our debt or equity
securities or loans, and may do so in the future. However, except as disclosed in this prospectus, we have no present arrangements with
Maxim for any further services.
May 2021 Underwritten Offering
As stated above, Maxim and its affiliates has provided
us with certain investment banking services in the ordinary course of their business, for which they received customary fees and commissions.
For example, on May 13, 2021, we entered into an Underwriting Agreement (the “Underwriting Agreement”) with Maxim Group LLC,
as representative of the several underwriters (the “Representative”), for an underwritten public offering (the “May
2021 Offering”) of an aggregate of 1,600,000 units (the “Units”), each consisting of one share of our common stock,
together with one May 2021 Warrant to purchase one share of common stock at an exercise price equal to $7.425 per share of common stock.
The public offering price was $6.75 per Unit and the
underwriters agreed to purchase 1,600,000 Units at a 7.5% discount to the public offering price. We granted the Representative a 45-day
option to purchase an additional 240,000 shares of our common stock and/or an additional 240,000 May 2021 Warrants, in any combination
thereof, to cover over-allotments, if any. On May 15, 2021, the Representative partially exercised the over-allotment option to purchase
an additional 240,000 May 2021 Warrants to purchase 240,000 shares of common stock. The May 2021 Offering closed on May 18, 2021.The gross
proceeds from the May 2021 Offering were approximately $10.8 million, or approximately $12.4 million if the Representative elected to
exercise in full its over-allotment option, before deducting underwriting discounts and commissions and other expenses of the May 2021
Offering.
Pursuant to the Underwriting Agreement, we agreed
to issue to the Representative, as a portion of the underwriting compensation payable to the Representative, warrants to purchase up to
a total of 80,000 shares of our common stock (the “Representative’s Warrants”). The Representative’s Warrants
are exercisable at $7.425 per share, were initially exercisable 180 days from the commencement of sales of the securities issued in connection
with the May 2021 Offering, or November 14, 2021, and have a term of five years from their initial issuance date, or May 18, 2026. Pursuant
to FINRA rules, the Representative’s Warrants were subject to a lock-up agreement pursuant to which the Representative was not able
to sell, transfer, assign, pledge, or hypothecate these warrants or the securities underlying these warrants, nor will it engage in any
hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the warrants or the
underlying securities for a period of 180 days from the beginning on the date of commencement of sales of the securities issued in connection
with this offering.
July 2021 Registered Direct Offering and Concurrent
Private Placement
On July 19, 2021, we entered into a securities purchase
agreement (the “Purchase Agreement”) with certain accredited institutional investors resulting in the raise of $8,305,000
in gross proceeds. Pursuant to the terms of the Purchase Agreement, we agreed to sell, (i) in a registered direct offering priced at-the-market
under Nasdaq rules, an aggregate of 1,375,000 shares of our common stock, and (ii) in a concurrent private placement, warrants to purchase
an aggregate of 1,031,250 shares of our common stock (the “July 2021 Warrants”) at a combined price of $6.04 per share of
common stock and 0.75 of one July 2021 Warrant (collectively, the “July 2021 Offering”). The July 2021 Offering closed on
July 21, 2021.
Maxim Group LLC acted as the sole placement agent
(the “Placement Agent”) for us in connection with the July 2021 Offering. Pursuant to that certain Placement Agency Agreement,
dated as of July 19, 2021, between us and the Placement Agent (the “Placement Agency Agreement”), the Placement Agent received
a cash fee of 6.5% of the gross proceeds of the July 2021 Offering and the reimbursement for certain out-of-pocket expenses up to $50,000.
Listing of the Common Stock on the Nasdaq Capital
Market
Our common stock is listed on the Nasdaq Capital Market
under the symbol “DTST.”
Transfer Agent and Registrar
The transfer agent and registrar for our common stock
is VStock Transfer, LLC with an address at 18 Lafayette Place, Woodmere, New York 11598, telephone: (212) 828-843.
LEGAL MATTER
The validity
of the shares of common stock being offered by this prospectus is being passed upon by Parsons Behle & Latimer, Reno,
Nevada. Blank Rome LLP, New York, New York is representing us in connection with the offering. Pryor Cashman, New York, New York is acting
as counsel for the Sales Agent in connection with this offering.
EXPERTS
The consolidated financial statements of Data Storage
Corporation as of December 31, 2023 and 2022 and for each of the two years in the period ended December 31, 2023 incorporated
by reference in this prospectus and in the registration statement of which this prospectus forms a part have been so incorporated in reliance
on the report of Rosenberg Rich Baker Berman, P.A., an independent registered public accounting
firm, given on the authority of said firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus is part of a registration statement
we filed with the SEC. This prospectus does not contain all of the information set forth in the registration statement and the exhibits
to the registration statement. For further information with respect to us and the securities we are offering under this prospectus, we
refer you to the registration statement and the exhibits and schedules filed as a part of the registration statement. Neither we nor any
agent, underwriter or dealer has authorized any person to provide you with different information. We are not making an offer of these
securities in any state where the offer is not permitted. You should not assume that the information in this prospectus is accurate as
of any date other than the date on the front page of this prospectus, regardless of the time of delivery of this prospectus or any
sale of the securities offered by this prospectus.
We file annual, quarterly and current reports, proxy
statements and other information with the SEC. Our SEC filings are available to the public at the SEC’s website at www.sec.gov.
Our SEC filings are also available on our website, www.dtst.com/sec-filings under the heading “SEC Filings.” The reference
to our website is an inactive textual reference only, the information contained in, and that can be accessed through our website, is not
incorporated into and is not a part of this prospectus. We make available on our website our SEC filings as soon as reasonably practicable
after those reports are filed with the SEC.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to “incorporate by reference”
information from other documents that we file with it, which means that we can disclose important information to you by referring you
to those documents. The information incorporated by reference is considered to be part of this prospectus. Information in this prospectus
supersedes information incorporated by reference that we filed with the SEC prior to the date of this prospectus.
We incorporate by reference into this prospectus and
the registration statement of which this prospectus is a part the information or documents listed below that we have filed with the SEC
(Commission File No. 001-35384):
| |
● |
Our Annual Report on Form
10-K for the fiscal year ended December 31, 2023 filed with the SEC on March 28, 2024; |
| |
|
|
| |
● |
Our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2024 filed with the SEC on May 15, 2024; |
| |
|
|
| |
● |
Our Current Reports on
Form 8-K filed with the SEC on January
5, 2024, January 18, 2024, January
19, 2024, March 11, 2024, March
27, 2024, April 2, 2024, May
6, 2024 and June 24, 2024; |
| |
|
|
| |
● |
The description of our common stock and May 2021 Warrants set forth in (i) our registration statement on Form 8-A12B, filed with the SEC on May 10, 2021 (File No. 001-35384) and (ii) Exhibit 4.10—Description of Securities to our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on March 28, 2024. |
We also incorporate by reference any future filings
(other than current reports furnished under Item 2.02 or Item 7.01 of Form 8-K and exhibits filed on such form that are related to
such items unless such Form 8-K expressly provides to the contrary) made with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of
the Exchange Act, including those made (i) on or after the date of the initial filing of the registration statement of which this
prospectus forms a part and prior to effectiveness of such registration statement, and (ii) on or after the date of this prospectus
but prior to the termination of the offering (i.e., until the earlier of the date on which all of the securities registered hereunder
have been sold or the registration statement of which this prospectus forms a part has been withdrawn). Information in such future filings
updates and supplements the information provided in this prospectus. Any statements in any such future filings will automatically be deemed
to modify and supersede any information in any document we previously filed with the SEC that is incorporated or deemed to be incorporated
herein by reference to the extent that statements in the later filed document modify or replace such earlier statements.
We will furnish without charge to each person,
including any beneficial owner, to whom a prospectus is delivered, upon written or oral request, a copy of any or all of the documents
incorporated by reference into this prospectus but not delivered with the prospectus, including exhibits that are specifically incorporated
by reference into such documents. You should direct any requests for documents to:
Data Storage Corporation
225 Broadhollow Road, Suite 307
Melville, New York 11747
Telephone: (212) 564-4922
Attention: Corporate Secretary
You may also access these documents, free of charge,
on the SEC’s website at www.sec.gov or on our website at www.dtst.com/sec-filings. The information contained in, or
that can be accessed through, our website is not incorporated by reference in, and is not part of, this prospectus or any accompanying
prospectus supplement.
In accordance with Rule 412 of the Securities
Act, any statement contained in a document incorporated by reference herein shall be deemed modified or superseded to the extent that
a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement.
You should rely only on information contained in,
or incorporated by reference into, this prospectus and any prospectus supplement. We have not authorized anyone to provide you with information
different from that contained in this prospectus or incorporated by reference into this prospectus. We are not making offers to sell the
securities in any jurisdiction in which such an offer or solicitation is not authorized or in which the person making such offer or solicitation
is not qualified to do so or to anyone to whom it is unlawful to make such an offer or solicitation.
Up to $10,600,000
Shares of Common Stock
Prospectus
Maxim Group LLC
, 2024
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following sets forth
the estimated costs and expenses, all of which shall be borne by Data Storage Corporation (the “Registrant”), in connection
with the offering of the securities pursuant to this registration statement.
| SEC registration fee |
|
$ |
7,380 |
|
| FINRA filing fee |
|
|
8,000 |
|
| Transfer agent and registrar expenses |
|
|
(1 |
) |
| Accounting fees and expenses |
|
|
(1 |
) |
| Legal fees and expenses |
|
|
(1 |
) |
| Printing and engraving expenses |
|
|
(1 |
) |
| Miscellaneous |
|
|
(1 |
) |
| Total |
|
$ |
(1 |
) |
| (1) |
These fees are calculated based on the securities offered and the number of issuances and, accordingly, cannot be estimated at this time. An estimate of the aggregate expenses in connection with the sale and distribution of securities being offered will be included in the applicable prospectus supplement. |
Item 15. Indemnification of Directors and Officers.
Section 78.138 of the Nevada Revised Statute
provides that, subject to certain exceptions, a director or officer is not individually liable to the corporation or its stockholders
or creditors for any damages as a result of any act or failure to act in his capacity as a director or officer unless the presumption
that the director or officer acted in good faith, on an informed basis and with a view to the interest of the corporation is rebutted
and it is proven that (1) his act or failure to act constituted a breach of his fiduciary duties as a director or officer and (2) his
breach of those duties involved intentional misconduct, fraud or a knowing violation of law.
This provision is intended to afford directors and
officers protection against and to limit their potential liability for monetary damages resulting from suits alleging a breach of the
duty of care by a director or officer. As a consequence of this provision, stockholders of the Registrant will be unable to recover monetary
damages against directors or officers for action taken by them that may constitute negligence or gross negligence in performance of their
duties unless such conduct falls within one of the foregoing exceptions. The provision, however, does not alter the applicable standards
governing a director’s or officer’s fiduciary duty and does not eliminate or limit the right of the Registrant or any stockholder
to obtain an injunction or any other type of non-monetary relief in the event of a breach of fiduciary duty.
Under the Registrant’s Articles of Incorporation,
as amended, the liability of our officers and directors will be eliminated or limited to the fullest extent permitted by Nevada law. If
Nevada law is amended to further eliminate or limit, or authorize further corporate action to further eliminate or limit, the liability
of officers and directors, the liability of officers and directors shall be eliminated or limited to the fullest extent permitted by Nevada
law then in effect.
The Registrant has an insurance policy in place that
covers its officers and directors with respect to certain liabilities, including liabilities arising under the Securities Act or otherwise.
Any underwriting agreement, agency agreement, equity
distribution agreement or similar agreement that the Registrant may enter into will likely provide for indemnification by any underwriters
or agents of the Registrant, its directors, its officers who sign the registration statement and the Registrant’s controlling persons
for some liabilities, including liabilities arising under the Securities Act.
To the extent
that indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling the
Registrant pursuant to the foregoing provisions, we have been informed that, in the opinion of the SEC, such indemnification is against
public policy as expressed in the Securities Act and is therefore unenforceable. If a claim for indemnification against such liabilities
(other than the payment by us of expenses incurred or paid by a director, officer or controlling person of the Company in the successful
defense of any action, suit or proceeding) is asserted by any of our directors, officers or controlling persons in connection with the
securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such indemnification by us is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of that issue.
Item 16. Exhibits.
The exhibits
to this registration statement are listed in the Exhibit Index to this registration statement, which immediately precedes the Signature
Page and which Exhibit Index is hereby incorporated by reference.
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
| |
(1) |
To file, during any period
in which offers or sales are being made, a post-effective amendment to this registration statement: |
| |
(i) |
To include any prospectus
required by Section 10(a)(3) of the Securities Act; |
| |
(ii) |
To reflect in the prospectus
any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation
of Registration Fee” table in the effective registration statement; and |
| |
(iii) |
To include any material
information with respect to the plan of distribution not previously disclosed in the registration statement or any material change
to such information in the registration statement; |
provided, however, that the undertakings set
forth in paragraphs (1)(i), (1)(ii) and (1)(iii) above do not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in reports filed with or furnished to the SEC by the registrant pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, that are incorporated by reference
in this registration statement or are contained in a form of prospectus filed pursuant to Rule 424(b) that is part of this registration
statement.
| |
(2) |
That, for the purpose of
determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof. |
| |
(3) |
To remove from registration
by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
| |
(4) |
That, for the purpose of
determining liability under the Securities Act to any purchaser: |
| |
(i) |
Each prospectus filed by
the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed
prospectus was deemed part of and included in the registration statement; and |
| |
|
|
| |
(ii) |
Each prospectus required
to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B
relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information
required by Section 10(a) of the Securities Act shall be deemed to be part of and included in the registration statement
as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale
of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and
any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement
relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in
a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated
by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with
a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement
or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date. |
| |
(5) |
That, for the purpose of
determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities,
the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration
statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold
to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and
will be considered to offer or sell such securities to such purchaser: |
| |
(i) |
any preliminary prospectus
or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
| |
(ii) |
any free writing prospectus
relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
| |
(iii) |
the portion of any other
free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities
provided by or on behalf of the undersigned registrant; and |
| |
(iv) |
any other communication
that is an offer in the offering made by the undersigned registrant to the purchaser. |
| |
(6) |
That, for purposes of determining
any liability under the Securities Act, each filing of the registrant’s annual report pursuant to Section 13(a) or
15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be
a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof. |
| |
(7) |
To file an application
for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture
Act in accordance with the rules and regulations prescribed by the SEC under Section 305(b)(2) of the Trust Indenture
Act. |
| |
(8) |
Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification
is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. |
EXHIBIT INDEX
| Exhibit
Number |
|
Description |
| 1.1* |
|
Equity Distribution Agreement, dated July 18, 2024, by and between Data Storage Corporation and Maxim Group LLC |
| |
|
|
| 1.2** |
|
Form of
Underwriting Agreement |
| |
|
|
| 3.1 |
|
Articles
of Incorporation (incorporated by reference to Exhibit 3.1 to the Registrant’s Registration Statement on Form SB-2 (File No. 333-148167)
filed on December 19, 2007 (the “SB-2”)) |
| |
|
|
| 3.2 |
|
Certificate
of Amendment to Articles of Incorporation (incorporated by reference to Exhibit 3.1 to Form 8-K (File No. 333-148167) filed on October
24, 2008) |
| |
|
|
| 3.3 |
|
Certificate
of Amendment to Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Current Report to Form 8-K (File No. 333-148167)
filed January 9, 2009) |
| |
|
|
| 3.4 |
|
Certificate
of Designation for Series A Preferred Stock (Incorporated by reference to Exhibit F to the Information Statement on Schedule 14C (File
No. 001-35384) filed with the Securities and Exchange Commission March 8, 2021 |
| |
|
|
| 3.5 |
|
Bylaws
(incorporated by reference to Exhibit 3.2 to the SB-2 (File No. 333-148167)) |
| |
|
|
| 3.6 |
|
Amended
Bylaws (incorporated by reference to Exhibit 3.2 to Form 8-K (File No. 333-148167) filed on October 24, 2008) |
| |
|
|
| 3.7 |
|
Certificate
of Amendment to the Articles of Incorporation (incorporated by reference to Appendix A to the Information Statement on Schedule 14C (File
No. 001-35384) filed with the Securities and Exchange Commission on March 8, 2021) |
| |
|
|
| 3.8 |
|
Certificate
of Validation and Ratification of the Certificate of Correction to the Certificate of Amendment to the Articles of Incorporation dated
October 7, 2008 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K (File No. 001-35384) filed with the Securities
and Exchange Commission on April 20, 2021) |
| |
|
|
| 3.9 |
|
Certificate
of Correction to the Certificate of Amendment to the Articles of Incorporation dated October 16, 2008 (incorporated by reference to Exhibit
3.2 to the Current Report on Form 8-K (File No. 001-35384) filed with the Securities and Exchange Commission on April 20, 2021) |
| |
|
|
| 3.10 |
|
Certificate
of Correction to the Certificate of Amendment to the Articles of Incorporation dated January 6, 2009 (incorporated by reference to Exhibit
3.3 to the Current Report on Form 8-K (File No. 001-35384) filed with the Securities and Exchange Commission on April 20, 2021) |
| |
|
|
| 3.11 |
|
Certificate
of Validation and Ratification of the Certificate of Correction to the Certificate of Amendment to the Articles of Incorporation dated
January 6, 2009 (incorporated by reference to Exhibit 3.4 to the Current Report on Form 8-K (File No. 001-35384) filed with the Securities
and Exchange Commission on April 20, 2021) |
| |
|
|
| 3.12 |
|
Certificate
of Designations, Preferences and Rights of Series A Preferred Stock of Data Storage Corporation (incorporated by reference to Appendix
F to the Information Statement on Schedule 14C (File No. 001-35384) filed with the Securities and Exchange Commission on March 8, 2021) |
| 3.13 |
|
Share
Exchange Agreement, dated October 20, 2008, by and among Euro Trend Inc., Data Storage Corporation and the shareholders of Data Storage
Corporation named on the signature page thereto (incorporated by reference to Exhibit 10.1 to Form 8-K (File No. 333-148167) filed on
October 24, 2008) |
| |
|
|
| 3.14 |
|
Share
Exchange Agreement, dated October 20, 2008, by and among, Euro Trend Inc., Data Storage Corporation and the shareholders of Data Storage
Corporation named on the signature page thereto (incorporated by reference to Exhibit 10.1 to Form 8-K/A (File No. 333-148167) filed
on June 29, 2009) |
| |
|
|
| 4.1** |
|
Specimen
Preferred Stock Certificate and Form of Certificate of Designation of Preferred Stock |
| |
|
|
| 4.2* |
|
Form of Indenture |
| |
|
|
| 4.3** |
|
Form of Debt Securities |
| |
|
|
| 4.4** |
|
Form of
Common Stock Warrant Agreement and Warrant Certificate |
| |
|
|
| 4.5** |
|
Form of
Preferred Stock Warrant Agreement and Warrant Certificate |
| |
|
|
| 4.6** |
|
Form of
Debt Securities Warrant Agreement and Warrant Certificate |
| |
|
|
| 4.7** |
|
Form
of Unit Agreement |
| |
|
|
| 5.1(a)* |
|
Opinion of Parsons Behle & Latimer |
| |
|
|
| 5.1(b)* |
|
Opinion of Blank Rome LLP |
| |
|
|
| 23.1* |
|
Consent of Rosenberg Rich Baker Berman P.A. Independent Registered Public Accounting Firm |
| |
|
|
| 23.2* |
|
Consent of Parsons Behle & Latimer (included in Exhibit 5.1(a)) |
| |
|
|
| 23.3* |
|
Consent of Blank Rome LLP (Included in Exhibit 5.1(b)) |
| |
|
|
| 24.1* |
|
Powers of Attorney (included on signature page to this Registration Statement) |
| |
|
|
| 25.1*** |
|
Statement
of Eligibility of Trustee under the Indenture |
| |
|
|
| 107* |
|
Calculation of Filing Fee Table |
| * |
Filed herewith. |
| ** |
To be filed, if applicable,
by amendment or by a report filed under the Exchange Act and incorporated herein by reference. |
| *** |
To be filed separately,
if applicable, in accordance with the requirements of Section 305(b)(2) of the Trust Indenture Act of 1939 as amended,
and the appropriate rules and regulations thereunder. |
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused
this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Melville, State of
New York, on the 18th day of July, 2024.
| |
DATA STORAGE CORPORATION |
| |
|
| |
By: |
/s/ Charles M. Piluso |
| |
Name: |
Charles M. Piluso |
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Title: |
Chief Executive Officer and Chairman of the Board |
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person
whose signature appears below hereby constitutes and appoints Charles M. Piluso, as his true and lawful agent, proxy and attorney-in-fact,
with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to (i) act
on, sign and file with the Securities and Exchange Commission any and all amendments (including post-effective amendments) to this registration
statement together with all schedules and exhibits thereto and any subsequent registration statement filed pursuant to Rule 462(b) under
the Securities Act of 1933, as amended, together with all schedules and exhibits thereto, (ii) act on, sign and file such certificates,
instruments, agreements and other documents as may be necessary or appropriate in connection therewith, (iii) act on and file any
supplement to any prospectus included in this registration statement or any such amendment or any subsequent registration statement filed
pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and (iv) take any and all actions which may be necessary
or appropriate to be done, as fully for all intents and purposes as he might or could do in person, hereby approving, ratifying and confirming
all that such agent, proxy and attorney-in-fact or any of his substitutes may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act
of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
| SIGNATURE |
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TITLE |
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DATE |
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| /s/ Charles M. Piluso |
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Chief Executive Officer and Chairman of the Board |
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July 18, 2024 |
| Charles M. Piluso |
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(Principal Executive Officer) |
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| /s/ Christos H. Panagiotakos |
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Chief Financial Officer |
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July 18, 2024 |
| Christos H. Panagiotakos |
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(Principal Financial Officer and Principal Accounting Officer) |
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| /s/ Harold J. Schwartz |
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President, Director |
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July 18, 2024 |
| Harold J. Schwartz |
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| /s/ Thomas C. Kempster |
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Executive Vice President of Strategic Development, Director |
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July 18, 2024 |
| Thomas C. Kempster |
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| /s/ John Argen |
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Director |
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July 18, 2024 |
| John Argen |
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| /s/ Lawrence A. Maglione, Jr. |
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Director |
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July 18, 2024 |
| Lawrence A. Maglione, Jr. |
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| /s/ Matthew Grover |
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Director |
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July 18, 2024 |
| Matthew Grover |
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| /s/ Todd A. Correll |
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Director |
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July 18, 2024 |
| Todd A. Correll |
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| /s/ Clifford Stein |
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Director |
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July 18, 2024 |
| Clifford Stein |
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| /s/ Nancy M. Stallone |
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Director |
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July 18, 2024 |
| Nancy M. Stallone |
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| /s/Uwayne A. Mitchell |
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Director |
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July 18, 2024 |
| Uwayne A. Mitchell |
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II-7
EXHIBIT 1.1
DATA STORAGE CORPORATION
Up to $10,600,000 of Common Stock
EQUITY DISTRIBUTION AGREEMENT
July 18, 2024
Maxim Group LLC
300 Park Avenue, 16th Floor
New York, New York 10022
Ladies and Gentlemen:
Data Storage Corporation, a Nevada
corporation (the “Company”), proposes to issue and sell through Maxim Group LLC (the “Agent”),
as sales agent, common stock of the Company, par value $0.001 per share (the “Common Stock”), having an aggregate
offering price of up to $10,600,000 of Common Stock (the Common Stock subject to this Equity Distribution Agreement (this “Agreement”)
being referred to herein as the “Shares”) on terms set forth herein. The Shares consist entirely of authorized
but unissued Common Stock to be issued and sold by the Company.
The Company hereby confirms its
agreement with the Agent with respect to the sale of the Shares.
1. Representations
and Warranties of the Company.
(a) The
Company represents and warrants to, and agrees with, the Agent as follows:
(i) A
registration statement on Form S-3 will be filed with the Securities and Exchange Commission (the “Commission”),
under the Securities Act of 1933, as amended (the “Securities Act of 1933”), and the rules and regulations promulgated
thereunder (the “Rules and Regulations” and collectively with the Securities Act of 1933, the “Securities
Act”).. Except where the context otherwise requires, “Registration Statement,” as used herein,
means the registration statement on Form S-3 to be filed pursuant to Rule 415(a)(6) under the Securities Act by the Company to cover any
Shares, as amended at the time of such registration statement’s effectiveness for purposes of Section 11 of the Securities Act,
as such section applies to the Agent, including (1) all documents filed as a part thereof or incorporated or deemed to be incorporated
by reference therein, (2) any information contained or incorporated by reference in a prospectus filed with the Commission pursuant to
Rule 424(b) under the Securities Act, to the extent such information is deemed, pursuant to Rule 430B or Rule 430C under the Securities
Act, to be part of the registration statement at such time, and (3) any registration statement filed to register the offer and sale of
Shares pursuant to Rule 462(b) under the Securities Act (the “462(b) Registration Statement”). Except where
the context otherwise requires, “Base Prospectus,” as used herein, means the prospectus filed as part of the
Registration Statement, together with any amendments or supplements thereto as of the date of this Agreement. Except where the context
otherwise requires, “Prospectus Supplement,” as used herein, means the most recent prospectus supplement relating
to the offering of the Shares pursuant to this Agreement, filed by the Company with the Commission pursuant to Rule 424(b) under the Securities
Act and in accordance with the terms of this Agreement. Except where the context otherwise requires, “Prospectus,”
as used herein, means the Prospectus Supplement together with the Base Prospectus attached to or used with the Prospectus Supplement,
as may be amended or supplemented from time to time.
“Permitted Free Writing Prospectus,” as used herein, means
the documents, if any, listed on Schedule A attached hereto and, after the date hereof, any “issuer free writing prospectus”
as defined in Rule 433 under the Securities Act, that is expressly agreed to by the Company and the Agent in writing to be a Permitted
Free Writing Prospectus. Any reference herein to the Registration Statement, the Base Prospectus, the Prospectus Supplement, the Prospectus
or any Permitted Free Writing Prospectus shall be deemed to refer to and include the documents, if any, incorporated by reference, or
deemed to be incorporated by reference, therein pursuant to Item 12 of Form S-3 (the “Incorporated Documents”),
including, unless the context otherwise requires, the documents, if any, filed as exhibits to such Incorporated Documents. For purposes
of this Agreement, all references to the Registration Statement, the Rule 462(b) Registration Statement, the Base Prospectus, the Prospectus
or any amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval System (“EDGAR”). All references in this Agreement to financial statements
and schedules and other information which is “described,” “contained,” “included” or “stated”
in the Registration Statement, the Base Prospectus, the Prospectus or any Permitted Free Writing Prospectus (or other references of like
import) shall be deemed to mean and include all such financial statements and schedules and other information which is incorporated by
reference in or otherwise deemed by the Rules and Regulations to be a part of or included in the Registration Statement, the Base Prospectus,
the Prospectus or Permitted Free Writing Prospectus as the case may be. Any reference herein to the terms “amend,”
“amendment” or “supplement” with respect to the Registration Statement, any Base Prospectus,
the Prospectus, the Prospectus Supplement or any Permitted Free Writing Prospectus shall be deemed to refer to and include the filing
of any document under the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (collectively, the “Exchange
Act”) on or after the initial effective date of the Registration Statement, or the date of such Base Prospectus, the Prospectus,
the Prospectus Supplement or such Permitted Free Writing Prospectus, if any, as the case may be, and incorporated or deemed to be incorporated
therein by reference pursuant to Item 12 of Form S-3. “Time of Sale” means each time a Share is purchased pursuant
to this Agreement.
(ii) (A) The
Registration Statement will comply upon the effectiveness of any amendment thereto and at each Time of Sale and each Settlement Date (as
applicable), in all material respects, with the requirements of the Securities Act; at all times during which a prospectus is required
by the Securities Act to be delivered (whether physically or through compliance with Rule 172 under the Securities Act or any similar
rule) in connection with any sale of Shares (the “Prospectus Delivery Period”); the Registration Statement,
as may be amended, will comply, in all material respects, with the requirements of the Securities Act; the conditions to the use of Form
S-3 in connection with the offering and sale of the Shares as contemplated hereby (the “Offering”) have been
satisfied; the Registration Statement meets, and the Offering complies with, the requirements of Rule 415 under the Securities Act (including,
without limitation, Rule 415(a)(5)); the Registration Statement will not, as of the effective date of any amendment thereto, at each Time
of Sale, if any, and at all times during a Prospectus Delivery Period, 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.
(B) The
Prospectus, as of the date of the Prospectus Supplement, (if filed with the Commission on or prior to the date hereof), at each Settlement
Date and Time of Sale (as applicable), and at all times during a Prospectus Delivery Period, will comply, in all material respects, with
the requirements of the Securities Act; and the Prospectus, and each supplement thereto, as of their respective dates, at each Settlement
Date or Time of Sale (as applicable), and at all times during a Prospectus Delivery Period, did not and will not include 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.
(C) Each
Permitted Free Writing Prospectus, if any, as of its date and as of each Settlement Date and Time of Sale (as applicable), and at all
times during a Prospectus Delivery Period (when taken together with the Prospectus at such time) will not include 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.
The representations and warranties
set forth in subparagraphs (A), (B) and (C) above shall not apply to any statement contained in the Registration Statement, any Base Prospectus,
the Prospectus or any Permitted Free Writing Prospectus in reliance upon and in conformity with information concerning the Agent that
is furnished in writing by or on behalf of the Agent expressly for use in the Registration Statement, such Base Prospectus, the Prospectus
or such Permitted Free Writing Prospectus, if any, it being understood and agreed that only such information furnished by the Agent as
of the date hereof consists of the information described in Section 5(b)(ii).
(iii) Prior
to the execution of this Agreement, the Company has not, directly or indirectly, offered or sold any Shares by means of any “prospectus”
(within the meaning of the Securities Act) or used any “prospectus” (within the meaning of the Securities Act) in connection
with the Offering, in each case other than the Base Prospectus or any Permitted Free Writing Prospectus; the Company has not, directly
or indirectly, prepared, used or referred to any Permitted Free Writing Prospectus except in compliance with Rules 164 and 433 under the
Securities Act; assuming that a Permitted Free Writing Prospectus, if any, is sent or given after the Registration Statement was filed
with the Commission (and after such Permitted Free Writing Prospectus, if any, was, if required pursuant to Rule 433(d) under the Securities
Act, filed with the Commission), the Company will satisfy the provisions of Rule 164 or Rule 433 necessary for the use of a free writing
prospectus (as defined in Rule 405) in connection with the Offering; the conditions set forth in one or more of subclauses (i) through
(iv), inclusive, of Rule 433(b)(1) under the Securities Act are satisfied, and the registration statement relating to the Offering, as
initially filed with the Commission, includes a prospectus that, other than by reason of Rule 433 or Rule 431 under the Securities Act,
satisfies the requirements of Section 10 of the Securities Act; neither the Company nor the Agent is disqualified, by reason of subsection
(f) or (g) of Rule 164 under the Securities Act, from using, in connection with the Offering, “free writing prospectuses”
(as defined in Rule 405 under the Securities Act) pursuant to Rules 164 and 433 under the Securities Act; the Company is not an “ineligible
issuer” (as defined in Rule 405 under the Securities Act) as of the eligibility determination date for purposes of Rules 164 and
433 under the Securities Act with respect to the offering of the Shares contemplated by the Registration Statement; the parties hereto
agree and understand that the content of any and all “road shows” (as defined in Rule 433 under the Securities Act) related
to the Offering is solely the property of the Company.
(iv) Each
Permitted Free Writing Prospectus, as of its issue date, each Time of Sale and each Settlement Date occurring after such issue date and
at all subsequent times through the Prospectus Delivery Period (as defined below) or until any earlier date that the Company notified
or notifies the Agent as described in Section 3(c)(iii), did not and does not include any information that conflicted, conflicts
or will conflict with the information contained in the Registration Statement, any Base Prospectus or the Prospectus. The foregoing sentence
does not apply to statements in or omissions from any Permitted Free Writing Prospectus based upon and in conformity with written information
furnished to the Company by the Agent specifically for use therein, it being understood and agreed that only such information furnished
by the Agent as of the date hereof consist of the information described in Section 5(b)(ii).
(v) The
consolidated financial statements of the Company and the Subsidiaries (as defined below), together with the related notes, set forth or
incorporated by reference in the Registration Statement and the Prospectus comply in all material respects with the requirements of the
Securities Act and the Exchange Act and fairly present in all material respects the financial condition of the Company and the Subsidiaries,
as a whole, as of the dates indicated and the results of operations and changes in cash flows for the periods therein specified in conformity
with U.S. generally accepted accounting principles consistently applied throughout the periods involved. The selected financial data and
the summary financial information included in the documents in the Registration Statement and in the Prospectus constitute a fair summary
of the information purported to be summarized and have been compiled on a basis consistent with that of the audited financial statements
included in the Registration Statement. No other financial statements or supporting schedules are required to be included or incorporated
by reference in the Registration Statement or the Prospectus under the Securities Act except as so included or incorporated by reference.
All disclosures contained in the Registration Statement or the Prospectus or incorporated by reference therein regarding “non GAAP
financial measures” (as such term is defined by the applicable rules and regulations of the Commission) comply with Regulation G
of the Exchange Act and Item 10 of Regulation S-K of the Securities Act to the extent applicable. To the Company’s knowledge, Rosenberg
Rich Baker Berman P.A., which has expressed its opinion with respect to the audited financial statements for the fiscal year ended December
31, 2023, and schedules, if any, and which has reviewed the unaudited financial statements for the three months ended March 31, 2024 (collectively,
the “Incorporated Financial Statements”), filed as a part of the Registration Statement and included in the
Registration Statement and the Prospectus, is a registered public accounting firm within the meaning of the Securities Act, and in the
performance of its work for the Company has not been in violation of the auditor independence requirements of the Sarbanes-Oxley Act of
2002 (the “Sarbanes-Oxley Act”).
(vi) The
Company has been duly organized and is validly existing as a corporation under the laws of its jurisdiction of incorporation. The Company
and each of the Subsidiaries has full corporate power and authority to own its respective properties and conduct its business as currently
being carried on and as described in the Registration Statement and the Prospectus, and is duly qualified to do business as a foreign
corporation in good standing in each jurisdiction in which it owns or leases real property or in which the conduct of its business makes
such qualification necessary and in which the failure to so qualify would have a material adverse effect upon the results of operations,
business, management, properties, prospects, conditions (financial or otherwise) or operations, of the Company and the Subsidiaries, either
individually or taken as a whole (“Material Adverse Effect”).
(vii) Except
as disclosed in the Registration Statement or the Prospectus, subsequent to the dates as of which information is given in the Registration
Statement or Prospectus, the Company (including its Subsidiaries on a consolidated basis) has not incurred any material liabilities or
obligations, direct or contingent, or entered into any material transactions, or declared or paid any dividends or made any distribution
of any kind with respect to the capital stock of the Company; and there has not been any change in the capital stock of the Company, or
issuance of options, warrants, convertible securities or other rights to purchase the capital stock of the Company, or any material change
in the long-term debt of the Company (other than as a result of the issuance of securities under the Company’s equity incentive
plans, the exercise of any currently outstanding options or warrants that are disclosed in the Prospectus, or the vesting of previously
granted restricted stock units that are disclosed in the Registration Statement or Prospectus), or any Material Adverse Effect or any
development that would reasonably be expected to result in a Material Adverse Effect. Since the date of the latest balance sheet presented
in the Registration Statement and the Prospectus, neither the Company nor any Subsidiary has entered into any transactions, including
any acquisition or disposition of any business or asset, which are material to the Company and the Subsidiaries taken as a whole, except
for transactions which are disclosed in the Registration Statement and the Prospectus.
(viii) Except
as set forth in the Registration Statement or Prospectus, there is not pending or, to the knowledge of the Company, threatened or contemplated,
any action, suit or proceeding to which the Company or any of its Subsidiaries or of which any property or assets of the Company or any
of its Subsidiaries is the subject before or by any court or governmental agency, authority or body, or any arbitrator or mediator, which,
individually or in the aggregate, would reasonably be expected to result in any Material Adverse Effect.
(ix) There
are no statutes, regulations, contracts or documents that are required to be described in the Registration Statement and the Prospectus
or be filed as exhibits to the Registration Statement by the Securities Act that have not been so described or filed.
(x) This
Agreement has been duly authorized, executed and delivered by the Company, and constitutes a valid, legal and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except as rights to indemnity hereunder may be limited by federal
or state securities laws or public policy considerations in respect thereof and except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting the rights of creditors generally and subject to general principles of equity. The
execution, delivery and performance of this Agreement and the consummation of the transactions herein contemplated will not result in
a breach or violation of any of the terms and provisions of, or constitute a default under, (i) any law, rule or regulation to which the
Company or any of its Subsidiaries is subject, (ii) any agreement or instrument to which the Company or any of its Subsidiaries or by
which it is bound or to which any of its property is subject, (iii) the Company’s Articles of Incorporation, as amended (the “Charter”),
or Amended Bylaws, as amended or the organizational documents of any of its Subsidiaries, or (iv) any order, rule, regulation or decree
of any court or governmental agency or body having jurisdiction over the Company or any of its Subsidiaries or any of its properties,
except, in the case of clauses (i), (ii) and (iv), for such breaches, violations or defaults that would not reasonably be expected to
result in a Material Adverse Effect; no consent, approval, authorization or order of, or filing with, any court or governmental agency
or body is required for the execution, delivery and performance of this Agreement or for the consummation of the transactions contemplated
hereby and thereby, including the issuance or sale of the Shares by the Company, except for such consents, approvals, authorizations,
orders or filings as have been obtained or made or as may be required under the Securities Act or state securities or blue sky laws; and
the Company has and will have full power and authority to enter into this Agreement and to authorize, issue and sell the Shares as contemplated
hereby and thereby.
(xi) All
of the issued and outstanding shares of capital stock of the Company, including the outstanding Common Stock, are duly authorized and
validly issued, fully paid and nonassessable, have been issued in compliance with all applicable foreign, federal and state securities
laws, were not issued in violation of or subject to any preemptive rights or other rights to subscribe for or purchase securities that
have not been waived in writing, and the holders thereof are not subject to personal liability by reason of being such holders; all of
the issued and outstanding shares of capital stock of each of the Subsidiaries are duly authorized and validly issued, fully paid and
nonassessable, and are owned by the Company, directly or through wholly-owned Subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity except for those arising under any credit facility or loan agreement (“Credit Facilities”)
to which the Company or any of its Subsidiaries is a party or their assets are bound as disclosed in the Registration Statement and the
Prospectus, have been issued in compliance with all applicable foreign, federal and state securities laws, were not issued in violation
of or subject to any preemptive rights or other rights to subscribe for or purchase securities that have not been waived in writing, and
the holders thereof are not subject to personal liability by reason of being such holders; the Shares which may be sold under this Agreement
by the Company have been duly authorized and, when issued, delivered and paid for in accordance with the terms of this Agreement will
have been validly issued and will be fully paid and nonassessable, and the holders thereof will not be subject to personal liability solely
by reason of being such holders; and the capital stock of the Company, including the Common Stock, conforms in all material respects to
the description thereof in the Registration Statement and the Prospectus. Except as otherwise stated in the Registration Statement and
the Prospectus, there are no preemptive rights or other rights to subscribe for or to purchase, or any restriction upon the voting or
transfer of, any Common Stock pursuant to the Company’s Charter, or any agreement or other instrument to which the Company is a
party or by which the Company is bound. Neither the filing of the Registration Statement nor the Offering gives rise to any rights for
or relating to the registration of any Common Stock or other securities of the Company, except for such registration rights as have been
duly waived. Except as described in the Registration Statement and the Prospectus, there are no options, warrants, agreements, contracts
or other rights in existence to purchase or acquire from the Company any shares of the capital stock of the Company. The Company has an
authorized and outstanding capitalization as set forth in the Registration Statement and the Prospectus as of the dates set forth therein.
(xii) The
Company and each of its Subsidiaries holds, and is operating in compliance with all grants, authorizations, licenses, permits, consents,
certificates and orders of any governmental or self-regulatory body required for the conduct of its respective businesses and all such
grants, authorizations, licenses, permits, consents, certifications and orders are valid and in full force and effect, except for such
noncompliance or failures to be in full force and effect that would not reasonably be expected to result in a Material Adverse Effect;
and neither the Company nor any of its Subsidiaries has received notice of any revocation or modification of any such grant, authorization,
license, permit, consent, certification or order or has reason to believe that any such grant, authorization, license, permit, consent,
certification or order will not be renewed in the ordinary course; and the Company and each of its Subsidiaries is in compliance with
all applicable federal, state, local and foreign laws, regulations, orders and decrees, except for such noncompliance that would not reasonably
be expected to result in a Material Adverse Effect. No approval, authorization, consent or order of or filing with any foreign, federal,
state or local governmental or regulatory commission, board, body, authority or agency is required in connection with the issuance and
sale of the Shares or the consummation by the Company of the transactions contemplated hereby, other than (i) registration of the Shares
under the Securities Act, (ii) any necessary qualification under the securities or blue sky laws of the various jurisdictions in which
the Shares are being offered by the Agent, (iii) the filing of any reports under the Exchange Act, (iv) such approvals as may be required
by the Conduct Rules of the Financial Industry Regulatory Authority, Inc. (“FINRA”), (v) filing of the listing
of the Shares with the Nasdaq Capital Market or (vi) such approvals as have been obtained or made as of the Time of Sale.
(xiii) The
Company and each of its Subsidiaries has good and marketable title to all property (whether real or personal) described in the Registration
Statement and the Prospectus as being owned by it, in each case free and clear of all liens, claims, security interests, other encumbrances
or defects except such as are described in the Registration Statement and the Prospectus, except as would not materially impair the use
or value thereof. The property held under lease by the Company and each of its Subsidiaries is held by it under valid, subsisting and
enforceable leases with only such exceptions with respect to any particular lease as do not interfere in any material respect with the
conduct of the business of the Company or such Subsidiary.
(xiv) The
Company and each of its Subsidiaries owns, possesses, or has sufficient
rights to all Intellectual Property (as defined below) necessary for the conduct of their respective businesses as now conducted or as
described in the Registration Statement and the Prospectus to be conducted, except to the extent that the failure to own or possess adequate
rights to use such Intellectual Property would not, individually or in the aggregate, have a Material
Adverse Effect. Except as would not result in a Material Adverse Effect, (A) there are
no rights of third parties to any such Intellectual Property owned by the Company, except as otherwise disclosed to the Agent in writing
by the Company prior to the date hereof; (B) to the knowledge of the Company, there is no infringement, misappropriation or violation
by third parties of any such Intellectual Property; (C) there is no pending or, to the knowledge of the Company, threatened, action, suit,
proceeding or claim by others challenging the Company’s or any Subsidiary’s rights in or to any such Intellectual Property,
and the Company is unaware of any facts which would form a reasonable basis for any such claim; (D) the Intellectual Property owned by
the Company and each of the Subsidiaries, and to the knowledge of the Company, the Intellectual Property licensed to the Company, each
of the Subsidiaries, has not been adjudged invalid or unenforceable, in whole or in part, and there is no pending or, to the knowledge
of the Company, threatened action, suit, proceeding or claim by others challenging the validity or scope of any such Intellectual Property,
and the Company is unaware of any facts which would form a reasonable basis for any such claim; (E) there is no pending or, to the knowledge
of the Company, threatened action, suit, proceeding or claim by others that the Company or any of its Subsidiaries infringes, misappropriates
or otherwise violates any Intellectual Property or other proprietary rights of others, and neither the Company nor any of the Subsidiaries
has received any written notice of such claim; and (F) to the Company’s knowledge, no employee of the Company or any of its Subsidiaries
is in or has ever been in violation of any term of any employment contract, patent disclosure agreement, invention assignment agreement,
non-competition agreement, non-solicitation agreement, nondisclosure agreement or any restrictive covenant to or with a former employer
where the basis of such violation relates to such employee’s employment with the Company or any of its Subsidiaries or actions undertaken
by the employee while employed with the Company or any of its Subsidiaries. “Intellectual Property” shall mean
all patents, patent applications, trade and service marks, trade and service mark registrations, trade names, copyrights, licenses, inventions,
trade secrets, domain names, technology, know-how and other intellectual property.
(xv) Neither
the Company nor any of its Subsidiaries is (A) in violation of its Charter or similar organizational documents, or (B) in breach of or
otherwise in default, and no event has occurred which, with notice or lapse of time or both, would constitute such a default in the performance
of any material obligation, agreement or condition contained in any bond, debenture, note, indenture, loan agreement, mortgage, deed of
trust or any other material contract, lease or other instrument to which it is subject or by which any of them may be bound, or to which
any of the material property or assets of the Company or any of its Subsidiaries is subject (collectively, the “Material Contracts”);
or (C) in violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory
authority, except in the case of (B) and (C) above, as would not, individually or in the aggregate, reasonably be expected to result in
a Material Adverse Effect.
(xvi) The
Company and each of the Subsidiaries has timely filed all applicable federal, state, local, foreign and other income and franchise tax
returns required to be filed and are not in default in the payment of any taxes which were payable pursuant to said returns or any assessments
with respect thereto, other than any which the Company or any of its Subsidiaries is contesting in good faith, except where the failure
to timely file or any default in payment would not reasonably be expected to result in a Material Adverse Effect. There is no pending
dispute with any taxing authority relating to any of such returns, and the Company has no knowledge of any proposed liability for any
tax to be imposed upon the properties or assets of the Company or any of its Subsidiaries for which there is not an adequate reserve reflected
in the Company’s financial statements included in the Registration Statement. There are no documentary, stamp or other issuance
or transfer taxes or duties or similar fees or charges under U.S. federal law or the laws of any U.S. state, required to be paid in connection
with the execution and delivery of this Agreement or the issuance, sale and delivery by the Company of the Shares.
(xvii) The
Company has not distributed and will not distribute any prospectus or other offering material in connection with the Offering other than
the Registration Statement and the Prospectus or other materials permitted by the Securities Act to be distributed by the Company; provided,
however, that the Company has not made and will not make any offer relating to the Shares that would constitute a “free writing
prospectus” as defined in Rule 405 under the Securities Act, except in accordance with the provisions of Section 3(p) of
this Agreement.
(xviii) The
issuance and sale of the Shares as contemplated in this Agreement does not contravene the rules and regulations of the Nasdaq Capital
Market. The Common Stock is registered pursuant to Section 12(b) of the Exchange Act and is listed on the Nasdaq Capital Market and the
Company has taken no action designed to, or likely to have the effect of, terminating the registration of the Common Stock under the Exchange
Act or delisting the Common Stock from the Nasdaq Capital Market nor, except as disclosed in the Registration Statement or the Prospectus,
has the Company received any notification that the Commission or the Nasdaq Capital Market is contemplating terminating such registration
or listing. Except as disclosed in the Registration Statement or the Prospectus, the Company has complied in all material respects with
the applicable requirements of the Nasdaq Capital Market for maintenance of the listing of the Common Stock thereon. The Company has filed
an application to include the Shares on the Nasdaq Capital Market.
(xix) The
Company has no subsidiaries other than those described in the Registration Statement or Prospectus (collectively, the “Subsidiaries”).
The Company does not own, directly or indirectly, any shares of stock or any other equity or long-term debt securities of any other corporation
or have any equity interest in any other corporation, partnership, joint venture, association, trust or other entity.
(xx) Except
as described in the Registration Statement or the Prospectus, the Company and each of its Subsidiaries have established and maintain systems
of internal accounting controls sufficient to provide reasonable assurances that (A) transactions are executed in accordance with management’s
general or specific authorization; (B) transactions are recorded as necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles and to maintain accountability for assets; (C) access to assets is permitted only in accordance
with management’s general or specific authorization; and (D) amounts reflected on the Company’s consolidated balance sheet
for assets are compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
Except as described in the Registration Statement and the Prospectus, since the filing of the annual report on Form 10-K for the fiscal
year ended December 31, 2023, there has been (i) no new material weakness identified to the Company’s board of directors (or committee
thereof) in the Company’s internal control over financial reporting (whether or not remediated) and (ii) no change in the Company’s
internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s
internal control over financial reporting.
(xxi) Except
as described in the Registration Statement or the Prospectus, the Company
and each of the Subsidiaries: (A) is and at all times since January 1, 2023 has been in material compliance with all United States (federal,
state and local) and foreign statutes, rules, regulations, treaties, or guidance applicable to the Company or the Subsidiaries (“Applicable
Laws”); (B) since January 1, 2023 has not received any notice of adverse finding, warning letter, untitled letter or other
correspondence or notice from any Governmental Authority (as defined below) alleging or asserting noncompliance with any Applicable Laws
or any licenses, certificates, approvals, clearances, authorizations, permits and supplements or amendments thereto required by any such
Applicable Laws (“Authorizations”); (C) since January 1, 2023 has not received notice of any material claim,
action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from any Governmental Authority or third party
alleging that any product operation or activity is in violation of any Applicable Laws or Authorizations and has no knowledge that any
such Governmental Authority or third party intends to assert any such claim, litigation, arbitration, action, suit, investigation or proceeding;
(D) since January 1, 2023 has not received notice that any Governmental Authority has taken, is taking or intends to take action to limit,
suspend, modify or revoke any Authorizations and the Company has no knowledge that any such Governmental Authority is considering such
action; and (E) has filed, obtained, maintained or submitted all material reports, documents, forms, notices, applications, records, claims,
submissions and supplements or amendments as required by any Applicable Laws or Authorizations and that all such reports, documents, forms,
notices, applications, records, claims, submissions and supplements or amendments were complete and correct in all material respects on
the date filed (or were corrected or supplemented by a subsequent submission). “Governmental Authority” means
any federal, provincial, state, local, foreign or other governmental or quasi-governmental agency or body or any other type of regulatory
authority or body, including, without limitation, the Nasdaq Capital Market. The aggregate of all pending legal or governmental proceedings
to which the Company or any Subsidiary is a party or of which any of their respective property or assets is the subject which are not
described in the Registration Statement or the Prospectus, including ordinary routine litigation incidental to the business, would not
result in a Material Adverse Effect.
(xxii) Other
than as contemplated by this Agreement, the Company has not incurred any liability for any finder’s or broker’s fee or agent’s
commission in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby.
The Company has not entered into any other sales agency agreements or other similar arrangements with any agent or any other representative
in respect of “at the market” offerings of the Shares in accordance with Rule 415 under the Securities Act.
(xxiii) The
Company and each of the Subsidiaries carries, or is covered by, insurance in such amounts and covering such risks the Company reasonably
believes are adequate for the conduct of its respective business and the value of its properties and as is customary for companies engaged
in similar businesses in similar industries; all policies of insurance and any fidelity or surety bonds insuring the Company, each of
its Subsidiaries and their respective businesses, assets, employees, officers and directors are in full force and effect; the Company
and each of its Subsidiaries is in compliance with the terms of such policies and instruments in all material respects; there are no claims
by the Company or any of the Subsidiaries under any such policy or instrument as to which any insurance company is denying liability or
defending under a reservation of rights clause; neither the Company nor any of the Subsidiaries has been refused any insurance coverage
sought or applied for; and the Company has no reason to believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost
that would not have a Material Adverse Effect.
(xxiv) The
Company is not (and is not an affiliate of), and immediately after receipt of payment for the Shares, will not be (and will not be an
affiliate of), an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The Company currently
intends to conduct its business in a manner so that it will not become subject to the Investment Company Act of 1940, as amended.
(xxv) The
Incorporated Documents, at the time they were or hereinafter are filed with the Commission, conformed and will conform in all material
respects to the requirements of the Securities Act and the Exchange Act, and were filed on a timely basis with the Commission and no Incorporated
Document contained or will contain an untrue statement of a material fact or omitted to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading; provided, that, no representation is made herein
regarding the representations, warranties and covenants, or any descriptions thereof, contained in any agreements or documents included
as exhibits to the Incorporated Documents. There is no material document required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement which was not described or filed as required. All material agreements
of the Company and all material agreements governing or evidencing any and all related party transactions have been filed with the Commission
to the extent required and applicable under the Exchange Act. Neither the Company nor any Subsidiaries has sent or received any communication
regarding termination of, or intent not to renew, any of the contracts or agreements referred to or described in the Registration Statement
and the Prospectus, or referred to or described in, or filed as an exhibit to, the Registration Statement or any Incorporated Document,
and no such termination or non-renewal has been threatened by the Company or any of its Subsidiaries or, to the Company’s knowledge,
any other party to any such contract or agreement. Any descriptions of the terms of any of the foregoing contracts and agreements that
are contained in the Registration Statement and the Prospectus are accurate and complete in all material respects.
(xxvi) The
Company is in compliance in all material respects with all applicable provisions of the Sarbanes-Oxley Act and the rules and regulations
of the Commission thereunder.
(xxvii) Except
as described in the Registration Statement and the Prospectus, the Company has established and maintains disclosure controls and procedures
(within the meaning of Rule 13a-15(e) of the Exchange Act) and such controls and procedures are designed to ensure that information required
to be disclosed in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the rules and forms of the Commission and that such information is accumulated and communicated to
the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions
regarding required disclosure. The Company has utilized such controls and procedures in preparing and evaluating the disclosures in the
Registration Statement and the Prospectus.
(xxviii)
To the knowledge of the Company, neither the Company, the Subsidiaries, nor any director, officer, agent, employee or affiliate of the
Company or any Subsidiary, has taken any action directly or indirectly, that would result in a violation by such persons of the FCPA (as
defined below), 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 and each of its Subsidiaries has conducted its business in compliance with the FCPA and has instituted and maintains policies
and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith. “FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder.
(xxix) The
Company and each of its Subsidiaries have complied in all material respects with the money laundering statutes of applicable jurisdictions,
the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by
applicable governmental agencies (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.
(xxx) Neither
the Company, any of its Subsidiaries, nor, to the knowledge of the Company, any director or officer of the Company or any of its Subsidiaries
is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury.
(xxxi) No
transaction has occurred or agreement or understanding entered into between or among the Company or any of its Subsidiaries on the one
hand, and any officer, director or 5% or greater stockholder of the Company or any Subsidiary of the Company or any affiliate or affiliates
of any such officer, director or 5% or greater stockholder that is required to be described that is not so described in the Registration
Statement and the Prospectus. Neither the Company nor any of its Subsidiaries has, directly or indirectly, extended or maintained credit,
or arranged for the extension of credit, or renewed an extension of credit, in the form of a personal loan to or for any of its directors
or executive officers in violation of applicable laws, including Section 402 of the Sarbanes-Oxley Act.
(xxxii) (a)
Neither the Company nor any of its Subsidiaries is in violation of any applicable international, national, state or local convention,
law, regulation, order, governmental license, convention, treaty (including those promulgated by the International Maritime Organization)
or other requirement relating to pollution or protection of human health or safety (as they relate to exposure to Materials of Environmental
Concern (as defined below)) or protection of the environment (including, without limitation, ambient air, surface water, groundwater,
land surface or subsurface strata) or protection of natural resources, including without limitation, conventions, laws or regulations
relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum, petroleum products or other hydrocarbons (collectively, “Materials of Environmental Concern”),
or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Materials
of Environmental Concern (collectively, “Environmental Laws”), nor has the Company or any Subsidiary received
any written communication, whether from a Governmental Authority, citizens group, employee or otherwise, that alleges that the Company
or any such Subsidiary is in violation of any Environmental Law or governmental license required pursuant to Environmental Law; except,
in each case, as would not, individually or in the aggregate, have a Material Adverse Effect; (b) there is no claim, action or cause of
action filed with a court or Governmental Authority and no investigation, or other action with respect to which the Company or any Subsidiary
has received written notice alleging potential liability for investigatory costs, cleanup costs, governmental response costs, natural
resources damages, property damages, personal injuries, attorneys’ fees or penalties arising out of, based on or resulting from
the presence, or release into the environment, of any Material of Environmental Concern at any location owned, leased or operated by the
Company or any Subsidiary, now or in the past, or from any vessel owned, leased or operated by the Company or any Subsidiary, now or in
the past (collectively, “Environmental Claim”), pending or, to the knowledge of the Company, threatened against
the Company or any Subsidiary or any person or entity whose liability for any Environmental Claim the Company or any Subsidiary has retained
or assumed either contractually or by operation of law, except as would not, individually or in the aggregate, have a Material Adverse
Effect; (c) to the knowledge of the Company, there are no past or present actions, activities, circumstances, conditions, events or incidents,
including, without limitation, the release, emission, discharge, presence or disposal of any Material of Environmental Concern, that reasonably
would be expected to result in a violation of any Environmental Law, require expenditures to be incurred pursuant to Environmental Law,
or form the basis of an Environmental Claim against the Company, any Subsidiary or against any person or entity whose liability for any
Environmental Claim the Company or any Subsidiary has retained or assumed either contractually or by operation of law, except as would
not, individually or in the aggregate, have a Material Adverse Effect (for the avoidance of doubt, the operation of vessels in the ordinary
course of business shall not be deemed, by itself, an action, activity, circumstance or condition set forth in this clause (c)); and (d)
none of the Company or any Subsidiary is subject to any pending proceeding under Environmental Law to which a Governmental Authority is
a party and which the Company reasonably believes is likely to result in monetary sanctions of US$100,000 or more. The Company has reasonably
concluded that any existing compliance and remediation costs and liabilities arising under Environmental Laws and resulting from the business,
operations or properties of the Company or any Subsidiary would not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect, except as set forth in or contemplated in the Registration Statement and the Prospectus. No facts or circumstances
have come to the Company’s attention that could result in costs or liabilities that could be expected, individually or in the aggregate,
to have a Material Adverse Effect.
(xxxiii)
The Company and each of the Subsidiaries (A) is in compliance, in all material respects, with applicable foreign, federal, state and local
laws, rules, regulations, statutes and codes promulgated by applicable governmental authorities (including pursuant to the Occupational
Health and Safety Act) relating to the protection of human health and safety in the workplace (“Occupational Laws”);
(B) has received all material permits, licenses or other approvals required of it under applicable Occupational Laws to conduct its business
as currently conducted; and (C) is in compliance, in all material respects, with all terms and conditions of such permit, license or approval.
No action, proceeding, revocation proceeding, writ, injunction or claim is pending or, to the Company’s knowledge, threatened against
the Company or any of its Subsidiaries relating to Occupational Laws, and the Company does not have knowledge of any facts, circumstances
or developments relating to its operations or cost accounting practices that could reasonably be expected to form the basis for or give
rise to such actions, suits, investigations or proceedings.
(xxxiv) No
material labor problem or dispute with the employees of the Company or any of its Subsidiaries exists or, to the knowledge of the Company,
is threatened or imminent.
(xxxv) The
Company has not, and to its knowledge no one acting on its behalf has, (a) taken, directly or indirectly, any action designed to cause
or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any
of the Shares, (b) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Shares or (c) paid or agreed
to pay to any person any compensation for soliciting another to purchase any other securities of the Company, other than, in the case
of clauses (b) and (c), compensation paid to the Agent in connection with the sale of the Shares.
(xxxvi) Other
than with respect to this Agreement, the Company is not a party to any agreement with an agent or underwriter for any other “at
the market” offering or continuous equity transaction.
(xxxvii) There
is no transaction, arrangement or other relationship between the Company or any of its Subsidiaries and an unconsolidated or other off
balance sheet entity that is required to be disclosed by the Company in the Registration Statement or the Prospectus and is not so disclosed
or that otherwise could be reasonably likely to have a Material Adverse Effect.
(xxxviii) To
the Company’s knowledge, none of the Company, its Subsidiaries, or any of their respective affiliates (within the meaning of the
Securities Act), has, prior to the date hereof, made any offers or sales of any security which are required to be “integrated”
pursuant to the Securities Act with the offer and sale of the Shares pursuant to the Registration Statement.
(xxxix) Any
statistical and market-related data included in the Registration Statement and the Prospectus are based on or derived from sources that
the Company believes to be reliable and accurate and, to the extent required, the Company has obtained the written consent to the use
of such data from such sources, except for such failures to obtain written consent which (individually or in the aggregate) would not
reasonably be expected to have a Material Adverse Effect).
(xl) The
Registration Statement is not the subject of a pending proceeding or examination under Section 8(d) or 8(e) of the Securities Act, and
the Company is not the subject of a pending proceeding under Section 8A of the Securities Act in connection with the offering of the Shares.
(xli) To
the Company’s knowledge, there are no affiliations with any FINRA member firm among the Company’s officers, directors, except
as set forth in the Registration Statement or the Prospectus.
(xlii) The
Company is not a “foreign private issuer” as defined in Rule 405 promulgated under the Securities Act.
(xliii) The
Company did not qualify as a “passive foreign investment company” within the meaning of Section 1297 of the United States
Internal Revenue Code of 1986, as amended, for its most recently completed taxable year, if any.
(b) Any
certificate signed by any officer of the Company and delivered to the Agent or the Agent’s counsel shall be deemed a representation
and warranty by the Company to the Agent as to the matters covered thereby.
(c) At
each Bringdown Date (as defined herein) and each Time of Sale, the Company shall be deemed to have affirmed each representation and warranty
contained in or made pursuant to this Agreement as of such date as though made at and as of such date (except that such representations
and warranties shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented relating to such
Shares on such date).
2. Purchase,
Sale and Delivery of Shares.
(a) At
the Market Sales. On the basis of the representations, warranties and agreements herein the Company agrees that, from time to time
during the term of this Agreement, on the terms and subject to the conditions set forth herein, it may issue and sell through the Agent,
acting as sales agent, the Shares up to an aggregate offering price of $10,600,000; provided, however, that in no event shall the
Company issue or sell through the Agent such number of Shares that (a) exceeds the number or dollar amount of Common Stock registered
on the Registration Statement, pursuant to which the Offering is being made, (b) exceeds the number of authorized but unissued Common
Stock or (c) would cause the Company or the offering of the Shares to not satisfy the eligibility and transaction requirements for use
of Form S-3 (including, if applicable, General Instruction I.B.6 of Form S-3 (the lesser of (a), (b) and (c), the “Maximum
Amount”)). Notwithstanding anything to the contrary contained herein, the parties hereto agree that
compliance with the
limitations set forth in this Section 2(a) on the number and aggregate sales price of Shares issued and sold under this Agreement
shall be the sole responsibility of the Company and that Agent shall have no obligation in connection with such compliance. Notwithstanding
the foregoing, the Company agrees that it will provide the Agent with written notice no less than one (1) business day prior to the date
on which it makes the initial sale of Shares under this Agreement. As used herein, the terms “business day”
means any day (other than Saturday, Sunday or any federal holiday in the United States) in which commercial banks in New York, New York
are open for business.
(i) For
purposes of selling the Shares through the Agent, the Company hereby appoints the Agent as exclusive agent of the Company for the purpose
of soliciting purchases of the Shares from the Company pursuant to this Agreement and the Agent agrees to use its commercially reasonable
efforts to sell the Shares on the terms and subject to the conditions stated herein.
(ii) Each
time the Company wishes to issue and sell the Shares hereunder (each, a “Transaction”), it will notify the Agent
by telephone (confirmed promptly by facsimile or e-mail to the appropriate individual listed on Schedule D hereto, using a form
substantially similar to that set forth on Schedule C hereto (a “Transaction Notice”) as to the maximum
number of Shares to be sold by the Agent on such day and in any event not in excess of the amount available for issuance under the Prospectus
and the currently effective Registration Statement, the time period during which sales are requested to be made, any limitation on the
number of shares that may be sold in any one Trading Day (as defined below), and any minimum price below which sales may not be made.
The Transaction Notice shall originate from any of the individuals from the Company set forth on Schedule B (with a copy to each
of the other individuals from the Company listed on such Schedule), and shall be addressed to each of the individuals from the Agent set
forth on Schedule D, as such Schedule D may be amended from time to time. Subject to the terms and conditions hereof and
unless the sale of the Shares described therein has been declined, suspended, or otherwise terminated in accordance with the terms of
this Agreement, the Agent shall promptly acknowledge the Transaction Notice by facsimile or e-mail (or by some other method mutually agreed
to in writing by the parties) and shall use its commercially reasonable efforts to sell all of the Shares so designated by the Company
in, and in accordance with the terms set forth in, the Transaction Notice; provided, however, that any obligation of the Agent to use
such commercially reasonable efforts shall be subject to the continuing accuracy of the representations and warranties of the Company
herein, to the performance by the Company of its obligations hereunder and to the continuing satisfaction of the additional conditions
specified in Section 4 of this Agreement. The gross sales price of the Shares sold under this Section 2(a) shall be equal
to the market price for the Common Stock sold by the Agent under this Section 2(a) on the Nasdaq Capital Market at the time of
such sale. For the purposes hereof, “Trading Day” means any day on which Common Stock are purchased and sold
on the principal market on which the Common Stock are listed or quoted.
(iii) The
Company or the Agent may, upon notice to the other party hereto by telephone (confirmed promptly by facsimile or e-mail to the respective
individuals of the other party set forth on Schedule D hereto, which confirmation shall be promptly acknowledged by the other party),
suspend the Offering for any reason and at any time, whereupon the Agent shall so suspend the offering of Shares until further notice
is provided by the other party to the contrary; provided, however, that such suspension or termination shall not affect
or impair the parties’ respective obligations with respect to the Shares sold hereunder prior to the receipt by the Agent of such
notice. Each of the parties agrees that no such notice under this Section 2(a)(iii) shall be effective against the other unless
it is made to one of the individuals named on Schedule D hereto, as such Schedule may be amended from time to time.
(iv) The
Company acknowledges and agrees that (A) there can be no assurance that the Agent will be successful in selling the Shares, (B) the Agent
will incur no liability or obligation to the Company or any other person or entity if it does not sell Shares for any reason other than
a failure by the Agent to use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable
law and regulations to sell such Shares as required under this Agreement, and (C) the Agent shall be under no obligation to purchase shares
on a principal basis pursuant to this Agreement.
(v) The
Agent may sell Shares by any method permitted by law to be an “at the market offering” as defined in Rule 415 under the Securities
Act, including, without limitation, sales made directly on the Nasdaq Capital Market, on any other existing trading market for the Common
Stock or to or through a market maker. The Agent may also sell Shares in privately negotiated transactions (which, for the avoidance of
doubt, shall not include block trades initiated on the Nasdaq Capital Market) with the Company’s prior written approval.
(vi) The
compensation to the Agent for sales of the Shares, as an agent of the Company, shall be a cash transaction fee equal to two and one-half
percent (2.5%) (the “Transaction Fee”) of the gross sales price of all of Shares sold pursuant to this Section
2(a). The remaining proceeds, after further deduction for any transaction or other fees imposed by any governmental or self-regulatory
organization in respect of such sales, shall constitute the net proceeds to the Company for such Shares (the “Net Proceeds”).
The Agent shall notify the Company as promptly as practicable if any deduction referenced in the preceding sentence will be required.
(vii) The
Agent shall provide written confirmation (which may be by facsimile or electronic mail) to the Company following the close of trading
on the Nasdaq Capital Market each day in which the Shares are sold under this Section 2(a) setting forth the number of the Shares
sold on such day, the aggregate gross sale proceeds, the Net Proceeds to the Company, and the compensation payable by the Company to the
Agent with respect to such sales.
(viii) All
Shares sold pursuant to this Section 2(a) will be delivered by the Company to Agent for the accounts of the Agent on the second
full business day following the date on which such Shares are sold, or at such other time and date as Agent and the Company determine
pursuant to Rule 15c6-1(a) under the Exchange Act, each such time and date of delivery being herein referred to as a “Settlement
Date.” On each Settlement Date, the Shares sold through the Agent for settlement on such date shall be issued and delivered
by the Company to the Agent against payment of the Net Proceeds from the sale of such Shares. Settlement for all such Shares shall be
effected by free delivery of the Shares by the Company or its transfer agent (i) to the Agent or its designee’s account (provided
the Agent shall have given the Company written notice of such
designee prior to the Settlement Date) at The Depository Trust Company (“DTC”)
or (ii) by such other means of delivery as may be mutually agreed upon by the parties hereto, which in all cases (provided that such Shares
were sold pursuant to the Registration Statement) shall be freely tradable, transferable, registered shares in good deliverable form,
in return for payment in same day funds delivered to an account designated by the Company. If the Company or its transfer agent (if applicable)
shall default on its obligation to deliver the Shares on any Settlement Date, the Company shall (A) indemnify and hold the Agent harmless
against any loss, claim or damage arising from or as a result of such default by the Company and (B) pay the Agent any commission to which
it would otherwise be entitled absent such default against payment of the Net Proceeds therefor by wire transfer of same day funds payable
to the order of the Company at 9:00 a.m. New York City time. If the Agent breaches this Agreement by failing to deliver the Net Proceeds
on any Settlement Date for the shares delivered by the Company, the Agent will pay the Company interest based on the effective prime rate
until such proceeds, together with such interest, have been fully paid.
(ix) Under
no circumstances shall the Company cause or request the offer or sale of any Shares if, after giving effect to the sale of such Shares,
the aggregate gross sales proceeds sold pursuant to this Agreement would exceed the lesser of (A) together with all sales of Shares under
this Agreement, the Maximum Amount, (B) the amount available for offer and sale under the currently effective Registration Statement and
(C) the amount authorized from time to time to be issued and sold under this Agreement by the Company’s board of directors, a duly
authorized committee thereof or a duly authorized executive committee, and notified to the Agent in writing. Under no circumstances shall
the Company cause or request the offer or sale of any Shares at a price lower than the minimum price authorized from time to time by the
Company’s board of directors, duly authorized committee thereof or a duly authorized executive committee, and notified to the Agent
in writing. Further, under no circumstances shall the aggregate offering amount of the Shares sold pursuant to this Agreement, including
any separate underwriting or similar agreement covering principal transactions, exceed the Maximum Amount.
(x) Unless
the exceptive provisions set forth in Rule 101(c)(1) of Regulation M under the Exchange Act are satisfied with respect to the
Shares, the Company shall give the Agent at least one business day’s prior notice of its intent to sell any Shares in order to allow
the Agent time to comply with Regulation M.
(xi) The
Company agrees that during the term of this Agreement, any offer to sell, any solicitation of an offer to buy, or any sales of Shares
in an “at the market offering” as defined in Rule 415 under the Securities Act, including pursuant to Section 3(o)
of this Agreement, shall only be effected by or through the Agent; provided, however, that the foregoing limitation shall not apply to
the exercise of any outstanding option or warrant described in the Registration Statement and the Prospectus.
(b) Nothing
herein contained shall constitute the Agent an unincorporated association or partner with the Company. Under no circumstances shall any
Shares be sold pursuant to this Agreement after the date which is three years after the Registration Statement is first declared effective
by the Commission.
(c) Notwithstanding
any other provisions of this Agreement, the Company agrees that no sale of Shares shall take place, and the Company shall not request
the sale of any Shares, and the Agent shall not be obligated to sell, during any period in which the Company is, or could be deemed to
be, in possession of material non-public information or the Company’s insider trading policy would prohibit the purchase and sale
of the Company’s Common Stock by its officers and directors.
3. Covenants.
The Company covenants and agrees with the Agent as follows:
(a) After
the date hereof and through any Prospectus Delivery Period, prior to amending or supplementing the Registration Statement (including any
Rule 462(b) Registration Statement), Base Prospectus, the Prospectus or any Permitted Free Writing Prospectus, the Company shall furnish
to the Agent for review a copy of each such proposed amendment or supplement, allow the Agent a reasonable amount of time to review and
comment on such proposed amendment or supplement, and the Company shall not file any such proposed amendment or supplement to which the
Agent or counsel to the Agent reasonably object; provided, that the foregoing shall not apply with regards to the filing by the Company
of any Form 10-K, Form 10-Q or other Incorporated Document. Subject to this Section 3(a), immediately following execution of this
Agreement, the Company will prepare a prospectus supplement describing the selling terms of the Shares hereunder, the plan of distribution
thereof and such other information as may be required by the Securities Act or the Rules and Regulations or as the Agent and the Company
may deem appropriate, and if requested by the Agent, a Permitted Free Writing Prospectus containing the selling terms of the Shares hereunder
and such other information as the Company and the Agent may deem appropriate, and will file or transmit for filing with the Commission,
in accordance with Rule 424(b) or Rule 433, as the case may be, copies of the Prospectus as supplemented and each such Permitted Free
Writing Prospectus.
(b) After
the date of this Agreement, the Company shall promptly advise the Agent in writing (i) of the receipt of any comments of, or requests
for additional or supplemental information from, the Commission or for any amendments or supplements to the Registration Statement, the
Base Prospectus, the Prospectus or any Permitted Free Writing Prospectus (excluding any Incorporated Documents), (ii) of the time and
date of any filing of any post-effective amendment to the Registration Statement or any amendment or supplement to any Base Prospectus,
the Prospectus or any Permitted Free Writing Prospectus (excluding any Incorporated Documents), (iii) of the time and date that any post-effective
amendment to the Registration Statement becomes effective, (iv) of the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment thereto or of any order preventing or suspending its use or the use of any
Base Prospectus, the Prospectus or any Permitted Free Writing Prospectus, or (v) of any proceedings to remove, suspend or terminate from
listing or quotation the Common Stock from any securities exchange upon which it is listed for trading or included or designated for quotation,
or of the threatening or initiation of any proceedings for any of such purposes. If the Commission shall enter any such stop order at
any time, the Company may terminate this Agreement. Additionally, the Company agrees that it shall comply with the provisions of Rules
424(b), 430B and 430C, as applicable, under the Securities Act and will use its reasonable efforts to confirm that any filings made by
the Company under Rule 424(b), Rule 433 or Rule 462 were received in a timely manner by the Commission (without reliance on Rule 424(b)(8)
or Rule 164(b)).
(c) (i) From the date hereof
through the later of (A) the termination of this Agreement and (B) the end of any applicable Prospectus Delivery Period, the Company will
comply in all material respects with all requirements imposed upon it by the Securities Act, as now and hereafter amended, and by the
Rules and Regulations, as from time to time in force, and by the Exchange Act so far as necessary to permit the continuance of sales of
or dealings in the Shares as contemplated by the provisions hereof, the Base Prospectus, the Prospectus and any Permitted Free Writing
Prospectus. If during any applicable Prospectus Delivery Period any event occurs as a result of which the Base Prospectus, the Prospectus,
or any Permitted Free Writing Prospectus would include an untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances then existing, not misleading, or if during any applicable Prospectus
Delivery Period it is necessary or appropriate in the opinion of the Company or its counsel or in the reasonable opinion of the Agent
or counsel to the Agent to amend the Registration Statement or supplement the Base Prospectus, the Prospectus or any Permitted Free Writing
Prospectus, to comply with the Securities Act or to file under the Exchange Act any document which would be deemed to be incorporated
by reference in the Prospectus in order to comply with the Securities Act or the Exchange Act, the Company will promptly notify Agent
(or the Agent will notify the Company, as applicable), and the Agent shall suspend the offering and sale of any such Shares, and the Company
will amend the Registration Statement or supplement the Base Prospectus, the Prospectus or any Permitted Free Writing Prospectus or file
such document (at the expense of the Company) so as to correct such statement or omission or effect such compliance within the time period
prescribed by the Securities Act or the Exchange Act.
(ii) In
case the Agent is required to deliver (whether physically or through compliance with Rule 172 under the Securities Act or any similar
rule), in connection with the sale of the Shares, a Prospectus after the nine-month period referred to in Section 10(a)(3) of the Securities
Act, or after the time a post-effective amendment to the Registration Statement is required pursuant to Item 512(a) of Regulation S-K
under the Securities Act, the Company will prepare, at its expense, promptly upon request such amendment or amendments to the Registration
Statement and the Prospectus as may be necessary to permit compliance with the requirements of Section 10(a)(3) of the Securities Act
or Item 512(a) of Regulation S-K under the Securities Act, as the case may be. The Company shall cause each amendment or supplement to
any Base Prospectus or the Prospectus to be filed with the Commission as required pursuant to the applicable paragraph of Rule 424(b)
of the Securities Act or, in the case of any document which would be deemed to be incorporated by reference therein, to be filed with
the Commission as required pursuant to the Exchange Act, within the time period prescribed. The Company shall promptly notify the Agent
if any Material Contract is terminated or if the other party thereto gives written notice of its intent to terminate any such Material
Contract.
(iii) If
at any time following issuance of a Permitted Free Writing Prospectus there occurs an event or development as a result of which such Permitted
Free Writing Prospectus would conflict with the information contained in the Registration Statement, the Base Prospectus or the Prospectus,
or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances prevailing at that subsequent time, not misleading, the Company promptly will notify
the Agent and will promptly amend or supplement, at its own expense, such Permitted Free Writing Prospectus to eliminate or correct such
conflict, untrue statement or omission.
(d) The
Company shall use commercially reasonable efforts to take or cause to be taken all necessary action to qualify the Shares for sale under
the securities laws of such jurisdictions as Agent reasonably designates, if applicable, and to continue such qualifications in effect
so long as required for the distribution of the Shares, except that the Company shall not be required in connection therewith to qualify
as a foreign corporation or to execute a general consent to service of process in any state. The Company shall promptly advise the Agent
of the receipt by the Company of any notification with respect to the suspension of the qualification of the Shares for offer or sale
in any jurisdiction or the initiation or threatening of any proceeding for such purpose.
(e) The
Company will furnish to the Agent and counsel for the Agent, to the extent requested, copies of the Registration Statement, the Base Prospectus,
the Prospectus, any Permitted Free Writing Prospectus, and all amendments and supplements to such documents, in each case as soon as available
and in such quantities as the Agent may from time to time reasonably request.
(f) The
Company will make generally available to its security holders as soon as practicable an earnings statement (which need not be audited)
covering a 12-month period that shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 of the Rules and Regulations.
If the Company makes any public announcement or release disclosing its results of operations or financial condition for a completed quarterly
or annual fiscal period (each, an “Earnings Release”) and the Company has not yet filed an Annual Report on
Form 10-K or a Form 10-Q with respect to such information, as applicable, then, prior to any sale of Shares, the Company shall be obligated
to (x) file a prospectus supplement with the Commission under the applicable paragraph of Rule 424(b), which prospectus supplement shall
include the applicable financial information or (y) file a Report on Form 8-K, which Form 8-K shall include the applicable financial information.
(g) The
Company, whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated, will pay or cause to
be paid (i) all expenses (including stock or transfer taxes and stamp or similar duties allocated to the respective transferees) incurred
in connection with the registration, issue, sale and delivery of the Shares, (ii) all reasonable and documented expenses and fees (including,
without limitation, fees and expenses of the Company’s accountants and counsel) in connection with the preparation, printing, filing,
delivery, and shipping of the Registration Statement (including the financial statements therein and all amendments, schedules, and exhibits
thereto), the Base Prospectus, each Prospectus, any Permitted Free Writing Prospectus, and any amendment thereof or supplement thereto,
and the producing, word-processing, printing, delivery, and shipping of this Agreement and other closing documents, including Blue Sky
Memoranda (covering the states and other applicable jurisdictions) prepared by counsel, if required, and including the cost to furnish
copies of each thereof to the Agent, (iii) all filing fees, (iv) listing fees, if any, and (v) all other costs and expenses of the
Company
incident to the performance of its obligations hereunder that are not otherwise specifically provided for herein. The Company shall reimburse
the Agent upon request for its reasonable costs and out-of-pocket expenses incurred in connection with this Agreement, including the fees
and disbursements of its legal counsel, not to exceed (except in the case of legal fees and disbursements as provided for below) US$25,000
without the approval of the Company (such approval not to be unreasonably withheld). In addition, the Company shall pay the Agent US$2,500
for its legal fees on each Bringdown Date. All such reimbursements under this Agreement shall be paid in U.S. dollars.
(h) The
Company will apply the net proceeds from the sale of the Shares in the manner set forth under the caption “Use of Proceeds”
in the Base Prospectus, the Prospectus, and any Permitted Free Writing Prospectus.
(i) The
Company will not, without (i) giving the Agent at least five business days’ prior written notice specifying the nature of the proposed
sale and the date of such proposed sale and (ii) the Agent’s suspending activity under this Agreement for such period of time as
requested by the Company or as deemed appropriate by the Agent in light of the proposed sale, offer for sale, sell, contract to sell,
pledge, grant any option for the sale of, enter into any transaction which is designed to, or might reasonably be expected to, result
in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the Company
or any Subsidiary, or otherwise issue or dispose of, directly or indirectly (or publicly disclose the intention to make any such offer,
sale, pledge, grant, issuance or other disposition), of any Common Stock or any securities convertible into or exchangeable for, or any
options or rights to purchase or acquire, Common Stock, or permit the registration under the Securities Act of any Common Stock, such
securities, options or rights, except for (i) the registration of the Shares and the sales through the Agent pursuant to this Agreement
(ii) the registration of Common Stock issued or issuable with respect to any currently outstanding options and warrants that are described
in the Registration Statement and the Prospectus and (iii) a registration statement on Form S-8 relating to employee benefit plans.
(j) The
Company shall not, at any time at or after the execution of this Agreement, offer or sell any Shares by means of any “prospectus”
(within the meaning of the Securities Act), or use any “prospectus” (within the meaning of the Securities Act) in connection
with the offer or sale of the Shares, in each case other than the Prospectus or any Permitted Free Writing Prospectus.
(k) Until
the termination of this Agreement, the Company will not take, 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 in violation
of the Securities Act, the Exchange Act or the rules and regulations thereunder of the price of any security of the Company to facilitate
the sale or resale of the Shares or otherwise violate any provision of Regulation M under the Exchange Act.
(l) The
Company will not incur any liability for any finder’s or broker’s fee or agent’s commission in connection with the execution
and delivery of this Agreement or the consummation of the transactions contemplated hereby or thereby, except as contemplated herein.
(m) During
any applicable Prospectus Delivery Period, the Company will file on a timely basis with the Commission such periodic and current reports
as required by the Rules and Regulations.
(n) Except
as described in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2023, the Company has maintained
and will maintain, such controls and other procedures, including without limitation those required by Sections 302 and 906 of the Sarbanes-Oxley
Act and the applicable regulations thereunder, that are designed to ensure that information required to be disclosed by the Company in
the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified
in the Commission’s rules and forms, including without limitation, controls and procedures designed to ensure that information required
to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s
management, including its principal executive officer and its principal financial officer, or persons performing similar functions, as
appropriate to allow timely decisions regarding required disclosure, to ensure that material information relating to Company is made known
to them by others within those entities.
(o) Each
of the Company and Agent represent and agree that, neither the Company nor the Agent has made or will make any offer relating to the Shares
that would constitute an “issuer free writing prospectus,” as defined in Rule 433 under the Securities Act, or that would
otherwise constitute a “free writing prospectus,” as defined in Rule 405 under the Securities Act, required to be filed with
the Commission other than a Permitted Free Writing Prospectus. The Company represents that it has treated or agrees that it will treat
each Permitted Free Writing Prospectus as an “issuer free writing prospectus,” as defined in Rule 433, and has complied and
will comply with the requirements of Rule 433 applicable to any Permitted Free Writing Prospectus, including timely Commission filing
where required, legending and record keeping.
(p) On
the date hereof and each date when the Company (A) amends or supplements (other than a supplement to a Prospectus filed pursuant to Rule
424(b) under the Securities Act relating solely to the offering of securities other than the Shares ) the Registration Statement or Prospectus
by means of a post-effective amendment, sticker, or supplement but not by means of incorporation of documents by reference into the Registration
Statement or the Prospectus relating to the Shares, (B) files an annual report on Form 10-K under the Exchange Act (including any Form
10-K/A containing amended material financial information or a material amendment to the previously filed Form 10-K) or (C) files a report
on Form 10-Q containing quarterly financial information that is incorporated by reference in the Registration Statement and Prospectus
(each of the dates in (A) through (C) are referred to herein as a “Bringdown Date”), the Agent shall receive
a favorable opinion of Blank Rome LLP, counsel for the Company, dated as of a date within ten (10) days after the applicable Bringdown
Date, addressed to the Agent and modified as necessary to relate to the Registration Statement and the Prospectus as amended and supplemented
to the time of delivery of such opinions. With respect to this Section 3(p), in lieu of delivering such opinions or letters for
Bringdown Dates subsequent to the date hereof, such counsel may furnish agent with a letter (a “Reliance Letter”)
to the effect that Agent may rely upon a prior opinion or letter delivered under this Section 3(p) to the same extent as if it
were dated
the date of such letter (except that statement in such prior opinion shall be deemed to relate to the Registration Statement
and the Prospectus as amended or supplemented as of the date of such Reliance Letter); provided, however, the requirement to provide
opinions and letters under this Section 3(p) is hereby waived for any Bringdown Date occurring at a time at which no Transaction
Notice is pending, which waiver shall continue until the earlier to occur of the date the Company delivers a Transaction Notice hereunder
and the next occurring Bringdown Date. Notwithstanding the foregoing, if the Company subsequently decides to sell Shares following a Bringdown
Date when the Company relied on such waiver and did not provide Agent with opinions and letters under this Section 3(p), then before
the Company delivers the Transaction Notice or Agent sells any Shares, the Company shall cause Blank Rome LLP, to furnish to the Agent
a written opinion or Reliance Letter dated the date of the Transaction Notice.
(q) On
the date hereof, and each date when the Company files an annual report on Form 10-K, or a report on Form 10-Q containing quarterly financial
information that is incorporated by reference in the Registration Statement and Prospectus, the Company shall cause Rosenberg Rich Baker
Berman P.A., or other independent accountants satisfactory to the Agent, to deliver to the Agent (x) a letter, dated as of a date within
ten (10) days after such date and addressed to Agent, in form and substance satisfactory to Agent (the first such letter, the “Initial
Comfort Letter”), confirming that they are independent public accountants within the meaning of the Securities Act and are
in compliance with the applicable requirements relating to the qualifications of accountants under Rule 2-01 of Regulation S-X of the
Commission, and stating the conclusions and findings of said firm with respect to the financial information and other matters and (y)
a letter updating the Initial Comfort Letter with any information that would have been included in the Initial Comfort Letter had it been
given on such date and as modified as necessary to relate to the date of such letter (each such letter, a “Bringdown Comfort
Letter”); provided, however, the requirement to provide a Bringdown Comfort Letter under this Section 3(q)
is hereby waived for any Bringdown Date occurring at a time at which no Transaction Notice is pending, which waiver shall continue until
the earlier to occur of the date the Company delivers a Transaction Notice hereunder and the next occurring Bringdown Date. Notwithstanding
the foregoing, if the Company subsequently decides to sell Shares following a Bringdown Date when the Company relied on such waiver and
did not provide Agent with a Bringdown Comfort Letter under this Section 3(q), then before the Company delivers the Transaction
Notice or Agent sells any Shares, the Company shall cause Rosenberg Rich Baker Berman P.A., or other independent accountants satisfactory
to the Agent, to deliver to the Agent a Bringdown Comfort Letter dated the date of the Transaction Notice.
(r) On
the date hereof and each Bringdown Date, the Company shall furnish to the Agent a certificate, dated as of a date within ten (10) days
after the applicable Bringdown Date and addressed to Agent, signed by the chief executive officer and by the chief financial officer of
the Company, to the effect that:
(i) The
representations and warranties of the Company in this Agreement are true and correct in all material respects as if made at and as of
the date of the certificate, and the Company has complied in all material respects with all the agreements and satisfied all the conditions
on its part to be performed or satisfied at or prior to the date of the certificate;
(ii) No
stop order or other order suspending the effectiveness of the Registration Statement or any part thereof or any amendment thereof or the
qualification of the Shares for offering or sale or notice that would prevent use of the Registration Statement, nor suspending or preventing
the use of the Base Prospectus, the Prospectus or any Permitted Free Writing Prospectus, has been issued, and no proceeding for that purpose
has been instituted or, to the best of their knowledge, is contemplated by the Commission or any state or regulatory body;
(iii) The
Shares to be sold on that date have been duly and validly authorized by the Company and all corporate action required to be taken for
the authorization, issuance and sale of the Shares on that date has been validly and sufficiently taken;
(iv) Subsequent
to the respective dates as of which information is given in the Base Prospectus, the Prospectus or any Permitted Free Writing Prospectus,
as amended and supplemented, and except for pending transactions disclosed therein, the Company has not incurred any material liabilities
or obligations, direct or contingent, or entered into any material transactions, not in the ordinary course of business, or declared or
paid any dividends or made any distribution of any kind with respect to its capital stock, and there has not been any change in the capital
stock or any issuance of options, warrants, convertible securities or other rights to purchase the capital stock (other than as a result
of the exercise of any currently outstanding options or warrants that are disclosed in the Prospectus), or any material change in the
long-term debt, of the Company, or any Material Adverse Effect or any development that would reasonably be likely to result in a Material
Adverse Effect (whether or not arising in the ordinary course of business), or any material loss by strike, fire, flood, earthquake, accident
or other calamity, whether or not covered by insurance, incurred by the Company; and
(v) Except
as stated in the Base Prospectus, the Prospectus, and any Permitted Free Writing Prospectus, as amended and supplemented, there is not
pending, or, to the knowledge of the Company, threatened or contemplated, any action, suit or proceeding to which the Company is a party
before or by any court or governmental agency, authority or body, or any arbitrator, which would reasonably be likely to result in any
Material Adverse Effect; provided, however, the requirement to provide a certificate under this Section 3(r) is hereby waived for
any Bringdown Date occurring at a time at which no Transaction Notice is pending, which waiver shall continue until the earlier to occur
of the date the Company delivers a Transaction Notice hereunder and the next occurring Bringdown Date. Notwithstanding the foregoing,
if the Company subsequently decides to sell Shares following a Bringdown Date when the Company relied on such waiver and did not provide
Agent with a certificate under this Section 3(r), then before the Company delivers the Transaction Notice or Agent sells any Shares,
the Company shall provide Agent with a certificate dated the date of the Transaction Notice.
(s) A
reasonable time prior to each Bringdown Date, the Company, if so requested by the Agent, shall conduct a due diligence session, in form
and substance, satisfactory to the Agent, which shall include representatives of the management and the accountants of the Company.
(t) The
Company shall disclose in its annual report on Form 10-K and its reports on Form 10-Q with quarterly financial information the number
of Shares sold through the Agent under this Agreement, the Net Proceeds to the Company and the compensation paid by the Company with respect
to sales of the Shares pursuant to this Agreement.
(u) The
Company shall ensure that there are at all times sufficient Common Stock to provide for the issuance, free of any preemptive rights, out
of its authorized but unissued Common Stock, of the maximum aggregate number of Shares authorized for issuance by the Company’s
board of directors pursuant to the terms of this Agreement. The Company will use its reasonable best efforts to cause the Shares to be
listed on the Nasdaq Capital Market, and to maintain such listing. The Company shall cooperate with Agent and use its reasonable efforts
to permit Shares to be eligible for clearance and settlement through the facilities of DTC.
(v) At
any time during the term of this Agreement, the Company will advise the Agent promptly after it receives notice or obtains knowledge of
any information or fact that would alter or affect any opinion, certificate, letter and other document provided to the Agent pursuant
to Section 3 herein.
(w) Subject
to compliance with any applicable requirements of Regulation M under the Exchange Act and compliance with applicable securities laws,
the Company consents to the Agent trading in Common Stock for the Agent’s own account and for the account of its clients (in compliance
with all applicable laws) at the same time as sales of the Shares occur pursuant to this Agreement.
(x) If
to the knowledge of the Company, any condition set forth in Section 4 of this Agreement shall not have been satisfied on the applicable
Settlement Date, the Company will offer to any person who has agreed to purchase the Shares on such Settlement Date from the Company as
the result of an offer to purchase solicited by the Agent the right to refuse to purchase and pay for such Shares.
(y) On
the date hereof and each Bringdown Date, the Company shall furnish to the Agent an incumbency certificate, dated as of such date and addressed
to Agent, signed by the secretary of the Company.
(z) Each
acceptance by the Company of an offer to purchase the Shares hereunder shall be deemed to be an affirmation to the Agent that the representations
and warranties of the Company contained in or made pursuant to this Agreement are true and correct as of the date of such acceptance as
though made at and as of such date (other than those representations and warranties made as of a specified date or time), and an undertaking
that such representations and warranties will be true and correct as of the Settlement Date for the Shares relating to such acceptance,
as though made at and as of such date (except that such representations and warranties shall be deemed to relate to the Registration Statement
and the Prospectus as amended and supplemented relating to such Shares).
(aa) The
Company shall ensure that there are at all times sufficient Common Stock to provide for the issuance, free of any preemptive rights, out
of its authorized but unissued Common Stock or Common Stock held in treasury, of the maximum aggregate number of Shares authorized for
issuance by the Company’s board of directors pursuant to the terms of this Agreement.
(bb) During
any period when the delivery of a prospectus relating to the Shares is required (including in circumstances where such requirement may
be satisfied pursuant to Rule 172, 173 or any similar rule) to be delivered under the Securities Act, the Company will file all documents
required to be filed with the Commission pursuant to the Exchange Act within the time periods required by the Exchange Act and the regulations
thereunder.
(cc) The
Company shall cooperate with Agent and use its reasonable efforts to permit the Shares to be eligible for clearance and settlement through
the facilities of DTC.
(dd) The
Company will apply the Net Proceeds from the sale of the Shares in the manner set forth in the Prospectus.
(ee) To the extent that
the Registration Statement is not available for the sales of the Shares as contemplated by this Agreement, the Company shall file a
new registration statement with respect to any additional shares of Common Stock necessary to complete such sales of the Shares and
shall cause such registration statement to become effective as promptly as practicable. After the effectiveness of any such
registration statement, all references to “Registration Statement” included in this Agreement shall be deemed to include
such new registration statement, including all documents incorporated by reference therein pursuant to Item 12 of Form S-3, and all
references to “Base Prospectus” included in this Agreement shall be deemed to include the final form of prospectus,
including all documents incorporated therein by reference, included in any such registration statement at the time such registration
statement became effective.
4. Conditions
of Agent’s Obligations. The obligations of the Agent hereunder are subject to (i) the accuracy of, as of the date hereof,
each Bringdown Date, and each Time of Sale (in each case, as if made at such date), and compliance with, all representations, warranties
and agreements of the Company contained herein, (ii) the performance by the Company of its obligations hereunder and (iii) the following
additional conditions:
(a) If
the filing of the Prospectus, or any amendment or supplement thereto, or any Permitted Free Writing Prospectus, is required under the
Securities Act or the Rules and Regulations, the Company shall have filed the Prospectus (or such amendment or supplement) or such Permitted
Free Writing Prospectus with the Commission in the manner and within the time period so required (without reliance on Rule 424(b)(8) or
Rule 164(b)); the Registration Statement shall remain effective; no stop order suspending the effectiveness of the Registration Statement
or any part thereof, any Rule 462(b) Registration Statement, or any amendment thereof, nor suspending or preventing the use of the Base
Prospectus, the Prospectus or any Permitted Free Writing Prospectus shall have been issued; no proceedings for the issuance of such an
order shall have been initiated or threatened; and any request of the Commission for additional information (to be included in the Registration
Statement, the Base Prospectus, the Prospectus, any Permitted Free Writing Prospectus or otherwise) shall have been complied with to the
Agent’s satisfaction.
(b) The
Agent shall not have advised the Company that the Registration Statement, the Base Prospectus, the Prospectus, or any amendment or supplement
thereto, or any Permitted Free Writing Prospectus, contains an untrue statement of fact which, in the Agent’s opinion, is material,
or omits to state a fact which, in the Agent’s opinion, is material and is required to be stated therein or is necessary to make
the statements therein (i) with respect to the Registration Statement, not misleading and (ii) with respect to the Base Prospectus, the
Prospectus or any Permitted Free Writing Prospectus, in light of the circumstances under which they were made, not misleading.
(c) Except
as set forth or contemplated in the Base Prospectus, the Prospectus and any Permitted Free Writing Prospectus, subsequent to the respective
dates as of which information is given therein, the Company shall not have incurred any material liabilities or obligations, direct or
contingent, or entered into any material transactions, or declared or paid any dividends or made any distribution of any kind with respect
to its capital stock and there shall not have been any change in the capital stock, or any issuance of options, warrants, convertible
securities or other rights to purchase the capital stock (other than as a result of the exercise of any currently outstanding options
or warrants that are disclosed in the Prospectus), or any material change in the short-term or long-term debt, of the Company, or any
Material Adverse Effect or any development that would be reasonably likely to result in a Material Adverse Effect (whether or not arising
in the ordinary course of business), or any material loss by strike, fire, flood, earthquake, accident or other calamity, whether or not
covered by insurance, incurred by the Company, the effect of which, in any such case described above, in the Agent’s judgment, makes
it impractical or inadvisable to offer or deliver the Shares.
(d) The
Company shall have performed each of its obligations under Section 3(q).
(e) The
Company shall have performed each of its obligations under Section 3(r).
(f) The
Company shall have performed each of its obligations under Section 3(s).
(g) FINRA
shall not have raised any objection to the fairness and reasonableness of the terms and arrangements under this Agreement.
(h) All
filings with the Commission required by Rule 424 under the Securities Act to have been filed by the Settlement Date shall have been made
within the applicable time period prescribed for such filing by Rule 424.
(i) The
Company shall have furnished to Agent and the Agent’s counsel such additional documents, certificates and evidence as they may have
reasonably requested.
(j) Trading
in the Common Stock shall not have been suspended on the Nasdaq Capital Market. The Shares shall have been listed and authorized for trading
on the Nasdaq Capital Market prior to the first Settlement Date, and satisfactory evidence of such actions shall have been provided to
the Agent and its counsel, which may include oral confirmation from a representative of the Nasdaq Capital Market.
All such opinions, certificates,
letters and other documents will be in compliance with the provisions hereof only if they are reasonably satisfactory in form and substance
to Agent and the Agent’s counsel. The Company will furnish Agent with such conformed copies of such opinions, certificates, letters
and other documents as Agent shall reasonably request.
5. Indemnification
and Contribution.
(a) (i) The Company agrees
to indemnify and hold harmless the Agent and each of the other Indemnified Parties (as defined below) from and against, and pay on demand
for, any losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses and disbursements, and any and
all actions, suits, proceedings and investigations in respect thereof and any and all legal and other costs, expenses and disbursements
in giving testimony or furnishing documents in response to subpoena or otherwise (including, without limitation, the costs, expenses and
disbursements, as and when incurred, of investigating, preparing, pursuing or defending any such action, suit, proceeding or investigation
(whether or not in connection with litigation in which any Indemnified Party is a party)) (collectively, “Losses”),
directly or indirectly, caused by, relating to, based upon, arising out of , or in connection with this Agreement, including, without
limitation, any act or omission by the Agent in connection with its acceptance of or the performance or non-performance of its obligations
under the Agreement, any breach by the Company of any representation, warranty, covenant or agreement contained in the Agreement (or in
any instrument, document or agreement relating thereto, including any agency agreement), or the enforcement by the Agent of its rights
under the Agreement or these indemnification provisions, except to the extent that any such Losses are found in a final judgment by a
court of competent jurisdiction (not subject to further appeal) to have resulted primarily and directly from the gross negligence or willful
misconduct of the Indemnified Party seeking indemnification hereunder. The Company also agrees that no Indemnified Party shall have any
liability (whether direct or indirect, in contract or tort or otherwise) to the Company for or in connection with this Agreement for any
other reason, except to the extent that any such liability is found in a final judgment by a court of competent jurisdiction (not subject
to further appeal) to have resulted primarily and directly from such Indemnified Party’s gross negligence or willful misconduct
This indemnity agreement will be in addition to any liability that the Company otherwise might have.
(ii) These
indemnification provisions shall extend to the following persons (collectively, the “Indemnified Parties”):
Maxim, its managers, members, officers, employees and controlling persons (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act), and the officers, directors, partners, stockholders, members, managers, employees and controlling persons of
any of them. These indemnification provisions shall be in addition to any liability which the Company may otherwise have to any Indemnified
Party.
(iii) If
any action, suit, proceeding or investigation is commenced, as to which an Indemnified Party proposes to demand indemnification, it shall
notify the Company with reasonable promptness; provided, however, that any failure by an Indemnified Party to notify the
Company shall not relieve the Company from its obligations hereunder except to the extent that the Company is actually and materially
prejudiced by such failure to notify. An Indemnified Party shall have the right to retain counsel of its own choice to represent it, and
the fees, expenses and disbursements of such counsel shall be borne by the Company. Any such counsel shall, to the extent consistent with
its professional responsibilities, cooperate with the Company and any counsel designated by the Company. The Company shall be liable for
any settlement of any claim against any Indemnified Party made with the Company’s written consent. The Company shall not, without
the prior written consent of the Agent, settle or compromise any claim, or permit a default or consent to the entry of any judgment in
respect thereof, unless such settlement, compromise or consent (i) includes, as an unconditional term thereof, the giving by the claimant
to all of the Indemnified Parties of an unconditional release from all liability in respect of such claim, and (ii) does not contain any
factual or legal admission by or with respect to an Indemnified Party or an adverse statement with respect to the character, professionalism,
expertise or reputation of any Indemnified Party or any action or inaction of any Indemnified Party.
(iv) In
order to provide for just and equitable contribution, if a claim for indemnification pursuant to these indemnification provisions is made
but it is found in a final judgment by a court of competent jurisdiction (not subject to further appeal) that such indemnification may
not be enforced in such case, even though the express provisions hereof provide for indemnification in such case, then the Company shall
contribute to the Losses to which any Indemnified Party may be subject (i) in accordance with the relative benefits received by the Company
and its stockholders, subsidiaries and affiliates, on the one hand, and the Indemnified Party, on the other hand, and (ii) if (and only
if) the allocation provided in clause (i) of this sentence is not permitted by applicable law, in such proportion as to reflect not only
the relative benefits, but also the relative fault of the Company, on the one hand, and the Indemnified Party, on the other hand, in connection
with the statements, acts or omissions which resulted in such Losses as well as any relevant equitable considerations. No person found
liable for a fraudulent misrepresentation shall be entitled to contribution from any person who is not also found liable for fraudulent
misrepresentation. The relative benefits received (or anticipated to be received) by the Company and its stockholders, subsidiaries and
affiliates shall be deemed to be equal to the aggregate consideration payable or receivable by such parties in connection with the transaction
or transactions to which the Agreement relates relative to the amount of fees actually received by the Agent in connection with such transaction
or transactions. Notwithstanding the foregoing, in no event shall the amount contributed by all Indemnified Parties exceed the amount
of fees previously received by the Agent pursuant to the Agreement.
(b) (i) The Agent will indemnify
and hold harmless the Company and its affiliates, employees, and directors and each officer of the Company who signed the Registration
Statement and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, legal counsel, agents and controlling persons of any of them (the “Company Indemnified Parties”)
from and against any Losses to which the Company or the Company Indemnified Parties may become subject, under the Securities Act or otherwise
(including in settlement of any litigation, if such settlement is effected with the written consent of the Agent), insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue
statement or omission or alleged
untrue statement or omission of a material fact contained in the Registration Statement, any Base Prospectus, the Prospectus, or any amendment
or supplement thereto or any Permitted Free Writing Prospectus, but only and solely to the extent that such untrue statement or alleged
untrue statement or omission or alleged omission was made in the Registration Statement, any Base Prospectus, the Prospectus, or any amendment
or supplement thereto, or any Permitted Free Writing Prospectus in reliance upon and in conformity with written information furnished
to the Company by Agent expressly for use in the preparation thereof, it being understood and agreed that the only information furnished
by the Agent consists of the information described as such in Section 5(b)(ii) hereof, by the Company in connection with investigating
or defending against any such loss, claim, damage, liability or action.
(ii) The
Agent confirms and the Company acknowledges that as of the date hereof no information has been furnished in writing to the Company by
or on behalf of the Agent specifically for inclusion in the Registration Statement, any Base Prospectus, the Prospectus or any Permitted
Free Writing Prospectus.
(c) If
the indemnification provided for in this Section 5 is unavailable or insufficient to hold harmless an indemnified party under subsection
(a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of
the losses, claims, damages or liabilities referred to in subsection (a) or (b) above, (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the Agent on the other from the Offering or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on the one hand and the Agent on the other in connection with
the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the Agent on the other shall be deemed to be in the same proportion
as the total net proceeds from the Offering (before deducting expenses) received by the Company and the total commissions received by
the Agent, bear to the total public offering price of the Shares. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Agent and the parties’ relevant intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The Company and the Agent agree that it would not be just and equitable
if contributions pursuant to this subsection (c) were to be determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the first sentence of this subsection (c). The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (c) shall
be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending
against any action or claim which is the subject of this subsection (c). Notwithstanding the provisions of this subsection (c), the Agent
shall not be required to contribute any amount in excess of the amount by which the total price at which the Shares underwritten by it
and distributed to the public were offered to the public exceeds the amount of any damages that the Agent has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(d) Neither
termination of this Agreement nor completion of the Offering shall affect these indemnification provisions which shall remain operative
and in full force and effect. The indemnification provisions shall be binding upon the Company and the Agent and their respective successors
and assigns and shall inure to the benefit of the Indemnified Parties and the Company Indemnified Parties and their respective successors,
assigns, heirs and personal representatives.
6. Representations
and Agreements to Survive Delivery. All representations and warranties of the Company herein or in certificates delivered pursuant
hereto, and agreements of the Agent and the Company herein, including but not limited to the agreements of the Agent and the Company contained
in Section 5 hereof, shall remain operative and in full force and effect regardless of any investigation made by or on behalf of
the Agent or any controlling person thereof, or the Company or any of its officers, directors, or controlling persons, and shall survive
delivery of, and payment for, the Shares to and by the Agent hereunder.
7. Termination
of this Agreement.
(a) The
Company shall have the right, by giving written notice as hereinafter specified, to terminate the provisions of this Agreement relating
to the solicitation of offers to purchase the Shares in its sole discretion at any time upon five (5) business days’ prior written
notice. Any such termination shall be without liability of any party to any other party except that (i) if the Shares have been sold through
the Agent for the Company, then Sections 3(g), 3(o) and 3(y) shall remain in full force and effect, (ii) with respect
to any pending sale, through the Agent for the Company, the obligations of the Company with respect to such pending sale of Shares, including
in respect of compensation of the Agent, shall remain in full force and effect notwithstanding such termination and (iii) the provisions
of Section 2(a)(vi), Section 3(g), Section 3(o), Section 5 and Section 6 of this Agreement shall remain
in full force and effect notwithstanding such termination.
(b) The
Agent shall have the right, by giving written notice as hereinafter specified, to terminate the provisions of this Agreement by giving
five (5) business days’ prior written notice, if the Agent is not fully satisfied, in its sole discretion, with the results of its
and its representatives’ review of the Company and the Company’s business. Any such termination shall be without liability
of any party to any other party except that (i) the provisions of the last three sentences of Section 3(g) and the entirety of
Section 3(o), Section 5 and Section 6 of this Agreement shall remain in full force and effect notwithstanding such
termination and (ii) the provisions of Section 3(g) other than the last three sentences thereof shall remain in full force and
effect only if the Agent has terminated this Agreement as a result of the Company’s default of its obligations hereunder and its
failure to cure any default within a reasonable period of time.
(c) This
Agreement shall remain in full force and effect for twelve (12) months from the date hereof unless terminated pursuant to Sections
7(a) or (b) above or otherwise by mutual agreement of the parties; provided that any such termination by mutual agreement shall
in all cases be deemed to provide that Section 3(g), Section 3(o), Section 5 and Section 6 shall remain in
full force and effect. This Agreement shall terminate automatically upon the issuance and sale of Shares having an aggregate offering
price equal to the amount set forth in the first paragraph of this Agreement.
(d) Any
termination of this Agreement shall be effective on the date specified in such notice of termination; provided that such termination shall
not be effective until the close of business on the date of receipt of such notice by the Agent or the Company, as the case may be. If
such termination shall occur prior to the Settlement Date for any sale of the Shares, such sale shall settle in accordance with the provisions
of Section 2(a) of this Agreement.
8. Default
by the Company. If the Company shall fail at any Settlement Date to sell and deliver the number of Shares which it is obligated
to sell hereunder, then this Agreement shall terminate without any liability on the part of the Agent or, except as provided in Section
3(g) hereof, any non-defaulting party. No action taken pursuant to this Section 8 shall relieve the Company from liability,
if any, in respect of such default, and the Company shall (A) hold the Agent harmless against any loss, claim or damage arising from or
as a result of such default by the Company and (B) pay the Agent any commission to which it would otherwise be entitled absent such default.
9. Notices.
Except as otherwise provided herein, all communications under this Agreement shall be in writing and, if to the Agent, shall be mailed,
delivered or sent by facsimile or email transmission to:
Maxim Group LLC
300 Park Avenue, 16th Floor
New York, New York 10022
Attention: Clifford A. Teller, Co-President
Fax: (212) 895-3783
email: cteller@maximgrp.com.
with a required copy (which shall not constitute notice)
to:
Pryor Cashman LLP
7 Times Square
New York, New York 10036
Attention: M. Ali Panjwani, Esq.
Fax: (212) 326-0806
Email: ali.panjwani@pryorcashman.com.
Notices to the Company shall be given to it at:
225 Broadhollow Road, Suite 307
Melville, New York 11747
Attention: Charles M. Piluso
Email: cpiluso@datastoragecorp.com
with a required copy (which shall not constitute notice)
to:
Blank Rome LLP
1271 Avenue of the Americas
New York, New York 10020
Attn: Leslie Marlow, Esq.
Email: leslie.marlow@blankrome.com
Any party to this Agreement
may change such address for notices by sending to the parties to this Agreement written notice of a new address for such purpose.
10. Persons
Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns and the controlling persons, officers and directors referred to in Section 5. Nothing in this Agreement
is intended or shall be construed to give to any other person, firm or corporation any legal or equitable remedy or claim under or in
respect of this Agreement or any provision herein contained. The term “successors and assigns” as herein used shall not include
any purchaser, as such purchaser, of any of the Shares from the Agent.
11. Absence
of Fiduciary Relationship. The Company acknowledges and agrees that: (a) the Agent has been retained solely to act as an sales
agent and/or principal in connection with the sale of the Shares and that no fiduciary, advisory or agency relationship between the Company
and the Agent has been created in respect of any of the transactions contemplated by this Agreement, irrespective of whether the Agent
has advised or are advising the Company on other matters; (b) the price and other terms of the Shares set forth in this Agreement were
established by the Company following discussions and arms-length negotiations with the Agent and the Company is capable of evaluating
and understanding and understands and accepts the terms, risks and conditions of the transactions contemplated by this Agreement; (c)
it has been advised that the Agent and its affiliates are engaged in a broad range of transactions which may involve interests that differ
from those of the Company and that the Agent has no obligation to disclose such interest and transactions to the Company by virtue of
any fiduciary, advisory or agency relationship; (d) it has been advised that the Agent is acting, in respect of the transactions contemplated
by this Agreement, solely for the benefit of the Agent, and not on behalf of the Company; and (e) it waives to the fullest extent permitted
by law, any claims it may have against the Agent for breach of fiduciary duty or alleged breach of fiduciary duty in respect of any of
the transactions contemplated by this Agreement and agrees that the Agent shall have no liability (whether direct or indirect) to the
Company in respect of such a fiduciary duty claim on behalf of or in right of the Company, including stockholders, employees or creditors
of the Company.
12. Governing
Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, including Section
5-1401 of the General Obligations Law of the State of New York, but otherwise without regard to conflict of laws rules that would apply
the laws of any other jurisdiction.
13. Counterparts.
This Agreement may be executed in one or more counterparts and, if executed in more than one counterpart, the executed counterparts shall
each be deemed to be an original and all such counterparts shall together constitute one and the same instrument.
14. Adjustments
for Stock Splits. The parties acknowledge and agree that all share-related numbers contained in this Agreement shall be adjusted
to take into account any stock split, stock dividend or similar event effected with respect to the Shares.
15. Entire
Agreement; Amendment; Severability; Headings. This Agreement (including all schedules and exhibits attached hereto and transaction
notices issued pursuant hereto) constitutes the entire agreement and supersedes all other prior and contemporaneous agreements and undertakings,
both written and oral, among the parties hereto with regard to the subject matter hereof. Neither this Agreement nor any term hereof may
be amended except pursuant to a written instrument executed by the Company and the Agent. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable as written by a court of competent
jurisdiction, then such provision shall be given full force and effect to the fullest possible extent that it is valid, legal and enforceable,
and the remainder of the terms and provisions herein shall be construed as if such invalid, illegal or unenforceable term or provision
was not contained herein, but only to the extent that giving effect to such provision and the remainder of the terms and provisions hereof
shall be in accordance with the intent of the parties as reflected in this Agreement. The section headings used in this Agreement are
for convenience only and shall not affect the construction hereof.
16. Waiver
of Jury Trial. Each of the Company and the Agent hereby waives any right it may have to a trial by jury in respect of any claim
based upon or arising out of this Agreement or the transactions contemplated hereby.
[Signature Page Follows]
If the foregoing is in accordance with your understanding
of our agreement, please sign and return to the Company the enclosed duplicate of this Agreement, whereupon this letter and your acceptance
shall represent a binding agreement between the Company and the Agent in accordance with its terms.
| |
Very truly yours,
DATA STORAGE CORPORATION
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By: |
/s/ Charles M. Piluso |
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Name: |
Charles M. Piluso |
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Title: |
Chief Executive Officer |
Confirmed as of the date first
above mentioned.
|
MAXIM GROUP LLC
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| By: |
/s/ Ritesh M. Veera |
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Name: |
Ritesh M. Veera |
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Title: |
Co-Head, Investment Banking |
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Schedule A
Permitted Free Writing Prospectus
None.
Schedule B
Individuals Permitted to Authorize Sales of Shares
Schedule C
Form of Transaction Notice
From: Data Storage Corporation
To: Maxim Group LLC
Subject: Transaction Notice
Date: [•], 202__
Ladies and Gentlemen:
Pursuant to the terms and subject
to the conditions contained in the Sales Agreement between Data Storage Corporation (the “Company”), and Maxim
Group LLC (“Agent”), dated June [ ], 2024, the Company hereby requests that the Agent sell up to [•] of
the Company’s common stock, par value $0.001 per share, at a minimum market price of $[•] per share, during the time period
beginning [month, day, time] and ending [month, day, time].
Schedule D
Individual to Which Notice Can Be Given
Maxim Group LLC
40
Exhibit 4.2
DATA STORAGE CORPORATION
Issuer
AND
[TRUSTEE],
Trustee
INDENTURE
Dated as of ______, 202_
Debt Securities
TABLE OF CONTENTS
| |
PAGE |
| ARTICLE 1 DEFINITIONS |
5 |
| |
|
| Section 1.01 |
Definitions of Terms |
5 |
| |
|
| ARTICLE 2 ISSUE, DESCRIPTION, TERMS,
EXECUTION, REGISTRATION AND EXCHANGE OF SECURITIES |
7 |
| |
|
| Section 2.01 |
Designation and Terms of Securities |
7 |
| |
|
| Section 2.02 |
Form of Securities and Trustee’s Certificate |
9 |
| |
|
| Section 2.03 |
Denominations: Provisions for Payment |
9 |
| |
|
| Section 2.04 |
Execution and Authentications |
10 |
| |
|
| Section 2.05 |
Registration of Transfer and Exchange |
11 |
| |
|
| Section 2.06 |
Temporary Securities |
12 |
| |
|
| Section 2.07 |
Mutilated, Destroyed, Lost or Stolen Securities |
12 |
| |
|
| Section 2.08 |
Cancellation |
12 |
| |
|
| Section 2.09 |
Benefits of Indenture |
13 |
| |
|
| Section 2.10 |
Authenticating Agent |
13 |
| |
|
| Section 2.11 |
Global Securities |
13 |
| |
|
| Section 2.12 |
CUSIP Numbers |
14 |
| |
|
| ARTICLE 3 REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS |
14 |
| |
|
| Section 3.01 |
Redemption |
14 |
| Section 3.02 |
Notice of Redemption |
14 |
| |
|
| Section 3.03 |
Payment Upon Redemption |
15 |
| |
|
| Section 3.04 |
Sinking Fund |
15 |
| |
|
| Section 3.05 |
Satisfaction of Sinking Fund Payments with Securities |
15 |
| |
|
| Section 3.06 |
Redemption of Securities for Sinking Fund |
15 |
| |
|
| ARTICLE 4 COVENANTS |
16 |
| |
|
| Section 4.01 |
Payment of Principal, Premium and Interest |
16 |
| |
|
| Section 4.02 |
Maintenance of Office or Agency |
16 |
| |
|
| Section 4.03 |
Paying Agents |
16 |
| |
|
| Section 4.04 |
Appointment to Fill Vacancy in Office of Trustee |
17 |
| |
|
| ARTICLE 5 SECURITYHOLDERS’ LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE |
17 |
| |
|
| Section 5.01 |
Company to Furnish Trustee Names and Addresses of Securityholders |
17 |
| |
|
| Section 5.02 |
Preservation Of Information; Communications With Securityholders |
17 |
| |
|
| Section 5.03 |
Reports by the Company |
17 |
| |
|
| Section 5.04 |
Reports by the Trustee |
18 |
| |
|
| ARTICLE 6 REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT |
18 |
| |
|
| Section 6.01 |
Events of Default |
18 |
| |
|
| Section 6.02 |
Collection of Indebtedness and Suits for Enforcement by Trustee |
19 |
| |
|
| Section 6.03 |
Application of Moneys Collected |
20 |
| |
|
|
| Section 6.04 |
Limitation on Suits |
20 |
| |
|
| Section 6.05 |
Rights and Remedies Cumulative; Delay or Omission Not Waiver |
21 |
| |
|
| Section 6.06 |
Control by Securityholders |
21 |
| |
|
| Section 6.07 |
Undertaking to Pay Costs |
21 |
| |
|
| ARTICLE 7 CONCERNING THE TRUSTEE |
22 |
| |
|
| Section 7.01 |
Certain Duties and Responsibilities of Trustee |
22 |
| |
|
| Section 7.02 |
Certain Rights of Trustee |
22 |
| |
|
| Section 7.03 |
Trustee Not Responsible for Recitals or Issuance or Securities |
24 |
| |
|
| Section 7.04 |
May Hold Securities |
24 |
| Section 7.05 |
Moneys Held in Trust |
24 |
| |
|
| Section 7.06 |
Compensation and Reimbursement |
24 |
| |
|
| Section 7.07 |
Reliance on Officer’s Certificate |
25 |
| |
|
| Section 7.08 |
Disqualification; Conflicting Interests |
25 |
| |
|
| Section 7.09 |
Corporate Trustee Required; Eligibility |
25 |
| |
|
| Section 7.10 |
Resignation and Removal; Appointment of Successor |
25 |
| |
|
| Section 7.11 |
Acceptance of Appointment By Successor |
26 |
| |
|
| Section 7.12 |
Merger, Conversion, Consolidation or Succession to Business |
27 |
| |
|
| Section 7.13 |
Preferential Collection of Claims Against the Company |
27 |
| |
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| Section 7.14 |
Notice of Default |
27 |
| |
|
| ARTICLE 8 CONCERNING THE SECURITYHOLDERS |
28 |
| |
|
| Section 8.01 |
Evidence of Action by Securityholders |
28 |
| |
|
| Section 8.02 |
Proof of Execution by Securityholders |
28 |
| |
|
| Section 8.03 |
Who May be Deemed Owners |
28 |
| |
|
| Section 8.04 |
Certain Securities Owned by Company Disregarded |
28 |
| |
|
| Section 8.05 |
Actions Binding on Future Securityholders |
29 |
| |
|
| ARTICLE 9 SUPPLEMENTAL INDENTURES |
29 |
| |
|
| Section 9.01 |
Supplemental Indentures Without the Consent of Securityholders |
29 |
| |
|
| Section 9.02 |
Supplemental Indentures With Consent of Securityholders |
30 |
| |
|
| Section 9.03 |
Effect of Supplemental Indentures |
30 |
| |
|
| Section 9.04 |
Securities Affected by Supplemental Indentures |
30 |
| |
|
| Section 9.05 |
Execution of Supplemental Indentures |
30 |
| |
|
| ARTICLE 10 SUCCESSOR ENTITY |
31 |
| |
|
| Section 10.01 |
Company May Consolidate, Etc. |
31 |
| |
|
| Section 10.02 |
Successor Entity Substituted |
31 |
| |
|
| ARTICLE 11 SATISFACTION AND DISCHARGE |
31 |
| |
|
| Section 11.01 |
Satisfaction and Discharge of Indenture |
31 |
| |
|
| Section 11.02 |
Discharge of Obligations |
32 |
| |
|
| Section 11.03 |
Deposited Moneys to be Held in Trust |
32 |
| Section 11.04 |
Payment of Moneys Held by Paying Agents |
32 |
| |
|
| Section 11.05 |
Repayment to Company |
32 |
| |
|
| ARTICLE 12 IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS |
32 |
| |
|
| Section 12.01 |
No Recourse |
32 |
| |
|
| ARTICLE 13 MISCELLANEOUS PROVISIONS |
33 |
| |
|
| Section 13.01 |
Effect on Successors and Assigns |
33 |
| |
|
| Section 13.02 |
Actions by Successor |
33 |
| |
|
| Section 13.03 |
Surrender of Company Powers |
33 |
| |
|
| Section 13.04 |
Notices |
33 |
| |
|
| Section 13.05 |
Governing Law; Jury Trial Waiver |
33 |
| |
|
| Section 13.06 |
Treatment of Securities as Debt |
33 |
| |
|
| Section 13.07 |
Certificates and Opinions as to Conditions Precedent |
33 |
| |
|
| Section 13.08 |
Payments on Business Days |
34 |
| |
|
| Section 13.09 |
Conflict with Trust Indenture Act |
34 |
| |
|
| Section 13.10 |
Counterparts |
34 |
| |
|
| Section 13.11 |
Separability |
34 |
| |
|
| Section 13.12 |
Compliance Certificates |
34 |
| |
|
| Section 13.13 |
Patriot Act |
34 |
| |
|
| Section 13.14 |
Force Majeure |
35 |
| |
|
| Section 13.12 |
Table of Contents; Headings |
35 |
INDENTURE
INDENTURE, dated as of
______, 202__, among Data Storage Corporation, a Nevada corporation (the “Company”), and [TRUSTEE], as trustee (the
“Trustee”):
WHEREAS, for its lawful
corporate purposes, the Company has duly authorized the execution and delivery of this Indenture to provide for the issuance of debt securities
(hereinafter referred to as the “Securities”), in an unlimited aggregate principal amount to be issued from time to time in
one or more series as in this Indenture provided, as registered Securities without coupons, to be authenticated by the certificate of
the Trustee;
WHEREAS, to provide the
terms and conditions upon which the Securities are to be authenticated, issued and delivered, the Company has duly authorized the execution
of this Indenture; and
WHEREAS, all things necessary
to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, in consideration
of the premises and the purchase of the Securities by the holders thereof, it is mutually covenanted and agreed as follows for the equal
and ratable benefit of the holders of Securities:
ARTICLE 1
DEFINITIONS
Section 1.01 Definitions of Terms.
The terms defined in this Section (except
as in this Indenture or any indenture supplemental hereto otherwise expressly provided or unless the context otherwise requires) for all
purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this Section and
shall include the plural as well as the singular. All other terms used in this Indenture that are defined in the Trust Indenture Act of
1939, as amended, or that are by reference in such Act defined in the Securities Act of 1933, as amended (except as herein or any indenture
supplemental hereto otherwise expressly provided or unless the context otherwise requires), shall have the meanings assigned to such terms
in said Trust Indenture Act and in said Securities Act as in force at the date of the execution of this instrument.
“Authenticating Agent”
means the Trustee or an authenticating agent with respect to all or any of the series of Securities appointed by the Trustee pursuant
to Section 2.10.
“Bankruptcy Law”
means Title 11, U.S. Code, or any similar federal or state law for the relief of debtors.
“Board of Directors”
means the Board of Directors (or the functional equivalent thereof) of the Company or any duly authorized committee of such Board.
“Board Resolution”
means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors (or duly authorized committee thereof) and to be in full force and effect on the date of such certification.
“Business Day”
means, with respect to any series of Securities, any day other than a day on which federal or state banking institutions in the Borough
of Manhattan, the City of New York, or in the city of the Corporate Trust Office of the Trustee, are authorized or obligated by law, executive
order or regulation to close.
“Commission”
means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any time after
the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
“Company”
means Data Storage Corporation, a corporation duly organized and existing under the laws of the State of Nevada, and, subject to the provisions
of Article Ten, shall also include its successors and assigns.
“Corporate Trust
Office” means the office of the Trustee at which, at any particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at [_____].
“Custodian”
means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.
“Defaulted Interest”
has the meaning set forth in Section 2.03.
“Depositary”
means, with respect to Securities of any series for which the Company shall determine that such Securities will be issued as a Global
Security, The Depository Trust Company, another clearing agency, or any successor registered as a clearing agency under the Exchange Act,
or other applicable statute or regulation, which, in each case, shall be designated by the Company pursuant to either Section 2.01
or 2.11.
“Event of Default”
means, with respect to Securities of a particular series, any event specified in Section 6.01, continued for the period of time,
if any, therein designated.
“Exchange Act”
means the United States Securities and Exchange Act of 1934, as amended, and the rules and regulations promulgated by the Commission
thereunder.
The term “given”,
“mailed”, “notify” or “sent” with respect to any notice
to be given to a Securityholder pursuant to this Indenture, shall mean notice (x) given to the Depositary (or its designee) pursuant
to the standing instructions from the Depositary or its designee, including by electronic mail in accordance with accepted practices or
procedures at the Depositary (in the case of a Global Security) or (y) mailed to such Holder by first class mail, postage prepaid,
at its address as it appears on the Security Register (in the case of a definitive Security). Notice so “given” shall be deemed
to include any notice to be “mailed” or “delivered,” as applicable, under this Indenture.
“Global Security”
means a Security issued to evidence all or a part of any series of Securities which is executed by the Company and authenticated and delivered
by the Trustee to the Depositary or pursuant to the Depositary’s instruction, all in accordance with the Indenture, which shall
be registered in the name of the Depositary or its nominee.
“Governmental Obligations”
means securities that are (a) direct obligations of the United States of America for the payment of which its full faith and credit
is pledged or (b) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States
of America, the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America that,
in either case, are not callable or redeemable at the option of the issuer thereof at any time prior to the stated maturity of the Securities,
and shall also include a depositary receipt issued by a bank or trust company as custodian with respect to any such Governmental Obligation
or a specific payment of principal of or interest on any such Governmental Obligation held by such custodian for the account of the holder
of such depositary receipt; provided, however, that (except as required by law) such custodian is not authorized to make any deduction
from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the Governmental
Obligation or the specific payment of principal of or interest on the Governmental Obligation evidenced by such depositary receipt.
“herein”,
“hereof” and “hereunder”, and other words of similar import, refer to this Indenture
as a whole and not to any particular Article, Section or other subdivision.
“Indenture”
means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental
hereto entered into in accordance with the terms hereof and shall include the terms of particular series of Securities established as
contemplated by Section 2.01.
“Interest Payment
Date”, when used with respect to any installment of interest on a Security of a particular series, means the date specified
in such Security or in a Board Resolution or in an indenture supplemental hereto with respect to such series as the fixed date on which
an installment of interest with respect to Securities of that series is due and payable.
“Officer”
means, with respect to the Company, the chairman of the Board of Directors, a chief executive officer, a president, a chief financial
officer, a chief operating officer, any executive vice president, any senior vice president, any vice president, the treasurer or any
assistant treasurer, the controller or any assistant controller or the secretary or any assistant secretary.
“Officer’s
Certificate” means a certificate signed by any Officer. Each such certificate shall include the statements provided for
in Section 13.07, if and to the extent required by the provisions thereof.
“Opinion of Counsel”
means an opinion in writing subject to customary exceptions of legal counsel, who may be an employee of or counsel for the Company, that
is delivered to the Trustee in accordance with the terms hereof. Each such opinion shall include the statements provided for in Section 13.07,
if and to the extent required by the provisions thereof.
“Outstanding”,
when used with reference to Securities of any series, means, subject to the provisions of Section 8.04, as of any particular time,
all Securities of that series theretofore authenticated and delivered by the Trustee under this Indenture, except (a) Securities
theretofore canceled by the Trustee or any paying agent, or delivered to the Trustee or any paying agent for cancellation or that have
previously been canceled; (b) Securities or portions thereof for the payment or redemption of which moneys or Governmental Obligations
in the necessary amount shall have been deposited in trust with the Trustee or with any paying agent (other than the Company) or shall
have been set aside and segregated in trust by the Company (if the Company shall act as its own paying agent); provided, however, that
if such Securities or portions of such Securities are to be redeemed prior to the maturity thereof, notice of such redemption shall have
been given as provided in Article Three, or provision satisfactory to the Trustee shall have been made for giving such notice; and
(c) Securities in lieu of or in substitution for which other Securities shall have been authenticated and delivered pursuant to the
terms of Section 2.07.
“Person”
means any individual, corporation, partnership, joint venture, joint-stock company, limited liability company, association, trust, unincorporated
organization, any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.
“Predecessor Security”
of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular
Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 2.07 in lieu of a lost,
destroyed or stolen Security shall be deemed to evidence the same debt as the lost, destroyed or stolen Security.
“Responsible Officer”
when used with respect to the Trustee means any officer within the Corporate Trust Office of the Trustee (or any successor group of the
Trustee) or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because
of his or her knowledge of and familiarity with the particular subject and in each case who shall have direct responsibility for the administration
of this Indenture.
“Securities”
has the meaning stated in the first recital of this Indenture and more particularly means any Securities authenticated and delivered under
this Indenture.
“Securities Act” means the
Securities Act of 1933, as amended.
“Securityholder”,
“holder of Securities”, “registered holder”, or other similar term, means the Person
or Persons in whose name or names a particular Security is registered on the Security Register kept for that purpose in accordance with
the terms of this Indenture.
“Security Register”
and “Security Registrar” shall have the meanings as set forth in Section 2.05.
“Subsidiary”
means, with respect to any Person, any corporation, association, partnership or other business entity of which more than 50% of the total
voting power of shares of capital stock or other interests (including partnership interests) entitled (without regard to the occurrence
of any contingency) to vote in the election of directors, managers, general partners or trustees thereof is at the time owned or controlled,
directly or indirectly, by (i) such Person; (ii) such Person and one or more Subsidiaries of such Person; or (iii) one
or more Subsidiaries of such Person.
“Trustee”
means, and, subject to the provisions of Article Seven, shall also include its successors and assigns, and, if at any time there
is more than one Person acting in such capacity hereunder, “Trustee” shall mean each such Person. The term “Trustee”
as used with respect to a particular series of the Securities shall mean the trustee with respect to that series.
“Trust Indenture
Act” means the Trust Indenture Act of 1939, as amended.
“U.S.A. Patriot Act”
means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub.
L. 107-56, as amended and signed into law October 26, 2001.
ARTICLE 2
ISSUE, DESCRIPTION, TERMS, EXECUTION, REGISTRATION
AND
EXCHANGE OF SECURITIES
Section 2.01 Designation
and Terms of Securities.
(a) The aggregate
principal amount of Securities that may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued
in one or more series up to the aggregate principal amount of Securities of that series from time to time authorized by or pursuant to
a Board Resolution or pursuant to one or more indentures supplemental hereto. Prior to the initial issuance of Securities of any series,
there shall be established in or pursuant to a Board Resolution, and set forth in an Officer’s Certificate, or established in one
or more indentures supplemental hereto:
(1) the title of the
Securities of the series (which shall distinguish the Securities of that series from all other Securities);
(2) any limit upon the
aggregate principal amount of the Securities of that series that may be authenticated and delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of that series);
(3) the maturity date
or dates on which the principal of the Securities of the series is payable;
(4) the form of the
Securities of the series including the form of the certificate of authentication for such series;
(5) the applicability
of any guarantees;
(6) whether or not the
Securities will be secured or unsecured, and the terms of any secured debt;
(7) whether the Securities
rank as senior debt, senior subordinated debt, subordinated debt or any combination thereof, and the terms of any subordination;
(8) if the price (expressed
as a percentage of the aggregate principal amount thereof) at which such Securities will be issued is a price other than the principal
amount thereof, the portion of the principal amount thereof payable upon declaration of acceleration of the maturity thereof, or if applicable,
the portion of the principal amount of such Securities that is convertible into another security or the method by which any such portion
shall be determined;
(9) the interest rate
or rates, which may be fixed or variable, or the method for determining the rate and the date interest will begin to accrue, the dates
interest will be payable and the regular record dates for interest payment dates or the method for determining such dates;
(10) the Company’s
right, if any, to defer the payment of interest and the maximum length of any such deferral period;
(11) if applicable, the date
or dates after which, or the period or periods during which, and the price or prices at which, the Company may at its option, redeem the
series of Securities pursuant to any optional or provisional redemption provisions and the terms of those redemption provisions;
(12) the date or dates, if
any, on which, and the price or prices at which the Company is obligated, pursuant to any mandatory sinking fund or analogous fund provisions
or otherwise, to redeem, or at the Securityholder’s option to purchase, the series of Securities and the currency or currency unit
in which the Securities are payable;
(13) the denominations in
which the Securities of the series shall be issuable, if other than denominations of one thousand U.S. dollars ($1,000) or any integral
multiple thereof;
(14) any and all terms, if
applicable, relating to any auction or remarketing of the Securities of that series and any security for the obligations of the Company
with respect to such Securities and any other terms which may be advisable in connection with the marketing of Securities of that series;
(15) whether the Securities
of the series shall be issued in whole or in part in the form of a Global Security or Securities; the terms and conditions, if any, upon
which such Global Security or Securities may be exchanged in whole or in part for other individual Securities; and the Depositary for
such Global Security or Securities;
(16) if applicable, the provisions
relating to conversion or exchange of any Securities of the series and the terms and conditions upon which such Securities will be so
convertible or exchangeable, including the conversion or exchange price, as applicable, or how it will be calculated and may be adjusted,
any mandatory or optional (at the Company’s option or the holders’ option) conversion or exchange features, the applicable
conversion or exchange period and the manner of settlement for any conversion or exchange, which may, without limitation, include the
payment of cash as well as the delivery of securities;
(17) if other than the full
principal amount thereof, the portion of the principal amount of Securities of the series which shall be payable upon declaration of acceleration
of the maturity thereof pursuant to Section 6.01;
(18) additions to or changes
in the covenants applicable to the series of Securities being issued, including, among others, the consolidation, merger or sale covenant;
(19) additions to or changes
in the Events of Default with respect to the Securities and any change in the right of the Trustee or the Securityholders to declare the
principal, premium, if any, and interest, if any, with respect to such Securities to be due and payable;
(20) additions to or changes
in or deletions of the provisions relating to covenant defeasance and legal defeasance;
(21) additions to or changes
in the provisions relating to satisfaction and discharge of this Indenture;
(22) additions to or changes
in the provisions relating to the modification of this Indenture both with and without the consent of Securityholders of Securities issued
under this Indenture;
(23) the currency of payment
of Securities if other than U.S. dollars and the manner of determining the equivalent amount in U.S. dollars;
(24) whether interest will
be payable in cash or additional Securities at the Company’s or the Securityholders’ option and the terms and conditions upon
which the election may be made;
(25) the terms and conditions,
if any, upon which the Company shall pay amounts in addition to the stated interest, premium, if any and principal amounts of the Securities
of the series to any Securityholder that is not a “United States person” for federal tax purposes;
(26) any restrictions on
transfer, sale or assignment of the Securities of the series; and
(27) any other specific terms,
preferences, rights or limitations of, or restrictions on, the Securities, any other additions or changes in the provisions of this Indenture,
and any terms that may be required by us or advisable under applicable laws or regulations.
All Securities of any one series
shall be substantially identical except as may otherwise be provided in or pursuant to any such Board Resolution or in any indentures
supplemental hereto.
If any of the terms of the series
are established by action taken pursuant to a Board Resolution of the Company, a copy of an appropriate record of such action shall be
certified by the secretary or an assistant secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officer’s
Certificate of the Company setting forth the terms of the series.
Securities of any particular
series may be issued at various times, with different dates on which the principal or any installment of principal is payable, with different
rates of interest, if any, or different methods by which rates of interest may be determined, with different dates on which such interest
may be payable and with different redemption dates.
Section 2.02 Form of Securities
and Trustee’s Certificate.
The Securities of any series
and the Trustee’s certificate of authentication to be borne by such Securities shall be substantially of the tenor and purport as
set forth in one or more indentures supplemental hereto or as provided in a Board Resolution, and set forth in an Officer’s Certificate,
and they may have such letters, numbers or other marks of identification or designation and such legends or endorsements printed, lithographed
or engraved thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Indenture, or as may be
required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any securities
exchange on which Securities of that series may be listed, or to conform to usage.
Section 2.03 Denominations: Provisions
for Payment.
The Securities shall be issuable
as registered Securities and in the denominations of one thousand U.S. dollars ($1,000) or any integral multiple thereof, subject to Section 2.01(a)(13).
The Securities of a particular series shall bear interest payable on the dates and at the rate specified with respect to that series.
Subject to Section 2.01(a)(23), the principal of and the interest on the Securities of any series, as well as any premium thereon
in case of redemption or repurchase thereof prior to maturity, and any cash amount due upon conversion or exchange thereof, shall be payable
in the coin or currency of the United States of America that at the time is legal tender for public and private debt, at the office or
agency of the Company maintained for that purpose. Each Security shall be dated the date of its authentication. Interest on the Securities
shall be computed on the basis of a 360-day year composed of twelve 30-day months.
The interest installment on any
Security that is payable, and is punctually paid or duly provided for, on any Interest Payment Date for Securities of that series shall
be paid to the Person in whose name said Security (or one or more Predecessor Securities) is registered at the close of business on the
regular record date for such interest installment. In the event that any Security of a particular series or portion thereof is called
for redemption and the redemption date is subsequent to a regular record date with respect to any Interest Payment Date and prior to such
Interest Payment Date, interest on such Security will be paid upon presentation and surrender of such Security as provided in Section 3.03.
Any interest on any Security
that is payable, but is not punctually paid or duly provided for, on any Interest Payment Date for Securities of the same series (herein
called “Defaulted Interest”) shall forthwith cease to be payable to the registered holder on the relevant regular record date
by virtue of having been such holder; and such Defaulted Interest shall be paid by the Company, at its election, as provided in clause
(1) or clause (2) below:
(1) The Company may
make payment of any Defaulted Interest on Securities to the Persons in whose names such Securities (or their respective Predecessor Securities)
are registered in the Security Register at the close of business on a special record date for the payment of such Defaulted Interest,
which shall be fixed in the following manner: the Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed
to be paid on each such Security and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee
an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust
for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a special
record date for the payment of such Defaulted Interest which shall not be more than 15 nor less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly
notify the Company of such special record date and, in the name and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the special record date therefor to be sent, to each Securityholder not less than 10 days prior
to such special record date. Notice of the proposed payment of such Defaulted Interest and the special record date therefor having been
sent as aforesaid, such Defaulted Interest shall be paid to the Persons in whose names such Securities (or their respective Predecessor
Securities) are registered in the Security Register on such special record date.
(2) The Company may
make payment of any Defaulted Interest on any Securities in any other lawful manner not inconsistent with the requirements of any securities
exchange on which such Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.
Unless otherwise set forth in
a Board Resolution or one or more indentures supplemental hereto establishing the terms of any series of Securities pursuant to Section 2.01
hereof, the term “regular record date” as used in this Section with respect to a series of Securities and any Interest
Payment Date for such series shall mean either the fifteenth day of the month immediately preceding the month in which an Interest Payment
Date established for such series pursuant to Section 2.01 hereof shall occur, if such Interest Payment Date is the first day of a
month, or the first day of the month in which an Interest Payment Date established for such series pursuant to Section 2.01 hereof
shall occur, if such Interest Payment Date is the fifteenth day of a month, whether or not such date is a Business Day.
Subject to the foregoing provisions
of this Section, each Security of a series delivered under this Indenture upon transfer of or in exchange for or in lieu of any other
Security of such series shall carry the rights to interest accrued and unpaid, and to accrue, that were carried by such other Security.
Section 2.04 Execution and Authentications.
The Securities shall be signed
on behalf of the Company by one of its Officers. Signatures may be in the form of a manual or facsimile signature.
The Company may use the facsimile
signature of any Person who shall have been an Officer (at the time of execution), notwithstanding the fact that at the time the Securities
shall be authenticated and delivered or disposed of such Person shall have ceased to be such an officer of the Company. The Securities
may contain such notations, legends or endorsements required by law, stock exchange rule or usage. Each Security shall be dated the
date of its authentication by the Trustee.
A Security shall not be valid
until authenticated manually by an authorized signatory of the Trustee, or by an Authenticating Agent. Such signature shall be conclusive
evidence that the Security so authenticated has been duly authenticated and delivered hereunder and that the holder is entitled to the
benefits of this Indenture. At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver
Securities of any series executed by the Company to the Trustee for authentication, together with a written order of the Company for the
authentication and delivery of such Securities, signed by an Officer, and the Trustee in accordance with such written order shall authenticate
and deliver such Securities.
Upon the Company’s delivery
of any such authentication order to the Trustee at any time after the initial issuance of Securities under this Indenture, the Trustee
shall be provided with, and (subject to Sections 315(a) through 315(d) of the Trust Indenture Act) shall be fully protected
in relying upon, (1) an Opinion of Counsel or reliance letter and (2) an Officer’s Certificate stating that all conditions
precedent to the execution, authentication and delivery of such Securities are in conformity with the provisions of this Indenture.
The Trustee shall not be required
to authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee’s own rights,
duties or immunities under the Securities and this Indenture or otherwise in a manner that is not reasonably acceptable to the Trustee.
Section 2.05 Registration of Transfer
and Exchange.
(a) Securities of
any series may be exchanged upon presentation thereof at the office or agency of the Company designated for such purpose, for other Securities
of such series of authorized denominations, and for a like aggregate principal amount, upon payment of a sum sufficient to cover any tax
or other governmental charge in relation thereto, all as provided in this Section. In respect of any Securities so surrendered for exchange,
the Company shall execute, the Trustee shall authenticate and such office or agency shall deliver in exchange therefor the Security or
Securities of the same series that the Securityholder making the exchange shall be entitled to receive, bearing numbers not contemporaneously
outstanding.
(b) The Company shall
keep, or cause to be kept, at its office or agency designated for such purpose a register or registers (herein referred to as the “Security
Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall register the Securities and the
transfers of Securities as in this Article provided and which at all reasonable times shall be open for inspection by the Trustee.
The registrar for the purpose of registering Securities and transfer of Securities as herein provided shall be appointed as authorized
by Board Resolution or Supplemental Indenture (the “Security Registrar”).
Upon surrender for transfer of
any Security at the office or agency of the Company designated for such purpose, the Company shall execute, the Trustee shall authenticate
and such office or agency shall deliver in the name of the transferee or transferees a new Security or Securities of the same series as
the Security presented for a like aggregate principal amount.
The Company initially appoints
the Trustee as initial Security Registrar for each series of Securities.
All Securities presented or surrendered
for exchange or registration of transfer, as provided in this Section, shall be accompanied (if so required by the Company or the Security
Registrar) by a written instrument or instruments of transfer, in form satisfactory to the Company or the Security Registrar, duly executed
by the registered holder or by such holder’s duly authorized attorney in writing.
(c) Except as provided
pursuant to Section 2.01 pursuant to a Board Resolution, and set forth in an Officer’s Certificate, or established in one or
more indentures supplemental to this Indenture, no service charge shall be made for any exchange or registration of transfer of Securities,
or issue of new Securities in case of partial redemption of any series or repurchase, conversion or exchange of less than the entire principal
amount of a Security, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge in relation
thereto, other than exchanges pursuant to Section 2.06, Section 3.03(b) and Section 9.04 not involving any transfer.
(d) The Company and
the Security Registrar shall not be required (i) to issue, exchange or register the transfer of any Securities during a period beginning
at the opening of business 15 days before the day of the sending of a notice of redemption of less than all the Outstanding Securities
of the same series and ending at the close of business on the day of such sending, nor (ii) to register the transfer of or exchange
any Securities of any series or portions thereof called for redemption or surrendered for repurchase, but not validly withdrawn, other
than the unredeemed portion of any such Securities being redeemed in part or not surrendered for repurchase, as the case may be. The provisions
of this Section 2.05 are, with respect to any Global Security, subject to Section 2.11 hereof.
The Trustee shall have no obligation
or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable
law with respect to any transfer of any interest in any Security (including any transfers between or among Depositary participants or
beneficial owners of interests in any Global Security) other than to require delivery of such certificates and other documentation or
evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the
same to determine substantial compliance as to form with the express requirements hereof.
Section 2.06 Temporary Securities.
Pending the preparation of definitive
Securities of any series, the Company may execute, and the Trustee shall authenticate and deliver, temporary Securities (printed, lithographed
or typewritten) of any authorized denomination. Such temporary Securities shall be substantially in the form of the definitive Securities
in lieu of which they are issued, but with such omissions, insertions and variations as may be appropriate for temporary Securities, all
as may be determined by the Company. Every temporary Security of any series shall be executed by the Company and be authenticated by the
Trustee upon the same conditions and in substantially the same manner, and with like effect, as the definitive Securities of such series.
Without unnecessary delay the Company will execute and will furnish definitive Securities of such series and thereupon any or all temporary
Securities of such series may be surrendered in exchange therefor (without charge to the Securityholders), at the office or agency of
the Company designated for the purpose, and the Trustee shall authenticate and such office or agency shall deliver in exchange for such
temporary Securities an equal aggregate principal amount of definitive Securities of such series, unless the Company advises the Trustee
to the effect that definitive Securities need not be executed and furnished until further notice from the Company. Until so exchanged,
the temporary Securities of such series shall be entitled to the same benefits under this Indenture as definitive Securities of such series
authenticated and delivered hereunder.
Section 2.07 Mutilated, Destroyed,
Lost or Stolen Securities.
In case any temporary or definitive
Security shall become mutilated or be destroyed, lost or stolen, the Company (subject to the next succeeding sentence) shall execute,
and upon the Company’s request the Trustee (subject as aforesaid) shall authenticate and deliver, a new Security of the same series,
bearing a number not contemporaneously outstanding, in exchange and substitution for the mutilated Security, or in lieu of and in substitution
for the Security so destroyed, lost or stolen. In every case the applicant for a substituted Security shall furnish to the Company and
the Trustee such security or indemnity as may be required by them to save each of them harmless, and, in every case of destruction, loss
or theft, the applicant shall also furnish to the Company and the Trustee evidence to their satisfaction of the destruction, loss or theft
of the applicant’s Security and of the ownership thereof. The Trustee may authenticate any such substituted Security and deliver
the same upon the written request or authorization of any officer of the Company. Upon the issuance of any substituted Security, the Company
may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Trustee) connected therewith.
In case any Security that has
matured or is about to mature shall become mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a substitute
Security, pay or authorize the payment of the same (without surrender thereof except in the case of a mutilated Security) if the applicant
for such payment shall furnish to the Company and the Trustee such security or indemnity as they may require to save them harmless, and,
in case of destruction, loss or theft, evidence to the satisfaction of the Company and the Trustee of the destruction, loss or theft of
such Security and of the ownership thereof.
Every replacement Security issued
pursuant to the provisions of this Section shall constitute an additional contractual obligation of the Company whether or not the
mutilated, destroyed, lost or stolen Security shall be found at any time, or be enforceable by anyone, and shall be entitled to all the
benefits of this Indenture equally and proportionately with any and all other Securities of the same series duly issued hereunder. All
Securities shall be held and owned upon the express condition that the foregoing provisions are exclusive with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities, and shall preclude (to the extent lawful) any and all other rights or remedies,
notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement or payment of negotiable
instruments or other securities without their surrender.
Section 2.08 Cancellation.
All Securities surrendered for
the purpose of payment, redemption, repurchase, exchange, registration of transfer or conversion shall, if surrendered to the Company
or any paying agent (or any other applicable agent), be delivered to the Trustee for cancellation, or, if surrendered to the Trustee,
shall be cancelled by it, and no Securities shall be issued in lieu thereof except as expressly required or permitted by any of the provisions
of this Indenture. On request of the Company at the time of such surrender, the Trustee shall deliver to the Company canceled Securities
held by the Trustee. In the absence of such request the Trustee may dispose of canceled Securities in accordance with its standard procedures
and deliver a certificate of disposition to the Company. If the Company shall otherwise acquire any of the Securities, however, such acquisition
shall not operate as a redemption or satisfaction of the indebtedness represented by such Securities unless and until the same are delivered
to the Trustee for cancellation.
Section 2.09 Benefits of Indenture.
Nothing in this Indenture or
in the Securities, express or implied, shall give or be construed to give to any Person, other than the parties hereto and the holders
of the Securities any legal or equitable right, remedy or claim under or in respect of this Indenture, or under any covenant, condition
or provision herein contained; all such covenants, conditions and provisions being for the sole benefit of the parties hereto and of the
holders of the Securities.
Section 2.10 Authenticating Agent.
So long as any of the Securities
of any series remain Outstanding there may be an Authenticating Agent for any or all such series of Securities which the Trustee shall
have the right to appoint. Said Authenticating Agent shall be authorized to act on behalf of the Trustee to authenticate Securities of
such series issued upon exchange, transfer or partial redemption, repurchase or conversion thereof, and Securities so authenticated shall
be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder.
All references in this Indenture to the authentication of Securities by the Trustee shall be deemed to include authentication by an Authenticating
Agent for such series. Each Authenticating Agent shall be acceptable to the Company and shall be a corporation that has a combined capital
and surplus, as most recently reported or determined by it, sufficient under the laws of any jurisdiction under which it is organized
or in which it is doing business to conduct a trust business, and that is otherwise authorized under such laws to conduct such business
and is subject to supervision or examination by federal or state authorities. If at any time any Authenticating Agent shall cease to be
eligible in accordance with these provisions, it shall resign immediately.
Any Authenticating Agent may
at any time resign by giving written notice of resignation to the Trustee and to the Company. The Trustee may at any time (and upon request
by the Company shall) terminate the agency of any Authenticating Agent by giving written notice of termination to such Authenticating
Agent and to the Company. Upon resignation, termination or cessation of eligibility of any Authenticating Agent, the Trustee may appoint
an eligible successor Authenticating Agent acceptable to the Company. Any successor Authenticating Agent, upon acceptance of its appointment
hereunder, shall become vested with all the rights, powers and duties of its predecessor hereunder as if originally named as an Authenticating
Agent pursuant hereto.
Section 2.11 Global Securities.
(a) If the Company
shall establish pursuant to Section 2.01 that the Securities of a particular series are to be issued as a Global Security, then the
Company shall execute and the Trustee shall, in accordance with Section 2.04, authenticate and deliver, a Global Security that (i) shall
represent, and shall be denominated in an amount equal to the aggregate principal amount of, all of the Outstanding Securities of such
series, (ii) shall be registered in the name of the Depositary or its nominee, (iii) shall be delivered by the Trustee to the
Depositary or pursuant to the Depositary’s instruction (or if the Depositary names the Trustee as its custodian, retained by the
Trustee), and (iv) shall bear a legend substantially to the following effect: “Except as otherwise provided in Section 2.11
of the Indenture, this Security may be transferred, in whole but not in part, only to another nominee of the Depositary or to a successor
Depositary or to a nominee of such successor Depositary.”
(b) Notwithstanding
the provisions of Section 2.05, the Global Security of a series may be transferred, in whole but not in part and in the manner provided
in Section 2.05, only to another nominee of the Depositary for such series, or to a successor Depositary for such series selected
or approved by the Company or to a nominee of such successor Depositary.
(c) If at any time
the Depositary for a series of the Securities notifies the Company that it is unwilling or unable to continue as Depositary for such series
or if at any time the Depositary for such series shall no longer be registered or in good standing under the Exchange Act, or other applicable
statute or regulation, and a successor Depositary for such series is not appointed by the Company within 90 days after the Company receives
such notice or becomes aware of such condition, as the case may be, or if an Event of Default has occurred and is continuing and the Company
has received a request from the Depositary or from the Trustee, this Section 2.11 shall no longer be applicable to the Securities
of such series and the Company will execute, and subject to Section 2.04, the Trustee will authenticate and deliver the Securities
of such series in definitive registered form without coupons, in authorized denominations, and in an aggregate principal amount equal
to the principal amount of the Global Security of such series in exchange for such Global Security. In addition, the Company may at any
time determine that the Securities of any series shall no longer be represented by a Global Security and that the provisions of this Section 2.11
shall no longer apply to the Securities of such series. In such event the Company will execute and, subject to Section 2.04, the
Trustee, upon receipt of an Officer’s Certificate evidencing such determination by the Company, will authenticate and deliver the
Securities of such series in definitive registered form without coupons, in authorized denominations, and in an aggregate principal amount
equal to the principal amount of the Global Security of such series in exchange for such Global Security. Upon the exchange of the Global
Security for such Securities in definitive registered form without coupons, in authorized denominations, the Global Security shall be
canceled by the Trustee. Such Securities in definitive registered form issued in exchange for the Global Security pursuant to this Section 2.11(c) shall
be registered in such names and in such authorized denominations as the Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such Securities to the Depositary for delivery to the
Persons in whose names such Securities are so registered.
Section 2.12 CUSIP Numbers.
The Company in issuing the Securities
may use “CUSIP” numbers (if then generally in use), and, if so, the Trustee shall use “CUSIP” numbers in notices
of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness
of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only
on the other elements of identification printed on the Securities, and any such redemption shall not be affected by any defect in or omission
of such numbers. The Company will promptly notify the Trustee of any change in the “CUSIP” numbers.
ARTICLE 3
REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS
Section 3.01 Redemption.
The Company may redeem the Securities
of any series issued hereunder on and after the dates and in accordance with the terms established for such series pursuant to Section 2.01
hereof.
Section 3.02 Notice of Redemption.
(a) In case the Company
shall desire to exercise such right to redeem all or, as the case may be, a portion of the Securities of any series in accordance with
any right the Company reserved for itself to do so pursuant to Section 2.01 hereof, the Company shall, or shall cause the Trustee
to, give notice of such redemption to holders of the Securities of such series to be redeemed by mailing, first class postage prepaid
(or with regard to any Global Security held in book entry form, by electronic mail in accordance with the applicable procedures of the
Depositary), a notice of such redemption not less than 30 days and not more than 90 days before the date fixed for redemption of that
series to such Securityholders, unless a shorter period is specified in the Securities to be redeemed. Any notice that is mailed in the
manner herein provided shall be conclusively presumed to have been duly given, whether or not the registered holder receives the notice.
In any case, failure duly to give such notice to the holder of any Security of any series designated for redemption in whole or in part,
or any defect in the notice, shall not affect the validity of the proceedings for the redemption of any other Securities of such series
or any other series. In the case of any redemption of Securities prior to the expiration of any restriction on such redemption provided
in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish the Trustee with an Officer’s Certificate
evidencing compliance with any such restriction.
Each such notice of redemption
shall identify the Securities to be redeemed (including CUSIP numbers, if any), specify the date fixed for redemption and the redemption
price at which Securities of that series are to be redeemed, and shall state that payment of the redemption price of such Securities to
be redeemed will be made at the office or agency of the Company, upon presentation and surrender of such Securities, that interest accrued
to the date fixed for redemption will be paid as specified in said notice, that from and after said date interest will cease to accrue
and that the redemption is from a sinking fund, if such is the case. If less than all the Securities of a series are to be redeemed, the
notice to the holders of Securities of that series to be redeemed in part shall specify the particular Securities to be so redeemed.
In case any Security is to be
redeemed in part only, the notice that relates to such Security shall state the portion of the principal amount thereof to be redeemed,
and shall state that on and after the redemption date, upon surrender of such Security, a new Security or Securities of such series in
principal amount equal to the unredeemed portion thereof will be issued.
(b) If less than all
the Securities of a series are to be redeemed, the Company shall give the Trustee at least 45 days’ notice (unless a shorter notice
shall be satisfactory to the Trustee) in advance of the date fixed for redemption as to the aggregate principal amount of Securities of
the series to be redeemed, and thereupon the Securities to be redeemed shall be selected, by lot, on a pro rata basis, or in such other
manner as the Company shall deem appropriate and fair in its discretion and that may provide for the selection of a portion or portions
(equal to one thousand U.S. dollars ($1,000) or any integral multiple thereof) of the principal amount of such Securities of a denomination
larger than $1,000, the Securities to be redeemed and shall thereafter promptly notify the Company in writing of the numbers of the Securities
to be redeemed, in whole or in part. The Company may, if and whenever it shall so elect, by delivery of instructions signed on its behalf
by an Officer, instruct the Trustee or any paying agent to call all or any part of the Securities of a particular series for redemption
and to give notice of redemption in the manner set forth in this Section, such notice to be in the name of the Company or its own name
as the Trustee or such paying agent may deem advisable. In any case in which notice of redemption is to be given by the Trustee or any
such paying agent, the Company shall deliver or cause to be delivered to, or permit to remain with, the Trustee or such paying agent,
as the case may be, such Security Register, transfer books or other records, or suitable copies or extracts therefrom, sufficient to enable
the Trustee or such paying agent to give any notice by mail that may be required under the provisions of this Section.
Section 3.03 Payment Upon Redemption.
(a) If the giving
of notice of redemption shall have been completed as above provided, the Securities or portions of Securities of the series to be redeemed
specified in such notice shall become due and payable on the date and at the place stated in such notice at the applicable redemption
price, together with interest accrued to, but excluding, the date fixed for redemption and interest on such Securities or portions of
Securities shall cease to accrue on and after the date fixed for redemption, unless the Company shall default in the payment of such redemption
price and accrued interest with respect to any such Security or portion thereof. On presentation and surrender of such Securities on or
after the date fixed for redemption at the place of payment specified in the notice, said Securities shall be paid and redeemed at the
applicable redemption price for such series, together with interest accrued thereon to, but excluding, the date fixed for redemption (but
if the date fixed for redemption is an Interest Payment Date, the interest installment payable on such date shall be payable to the registered
holder at the close of business on the applicable record date pursuant to Section 2.03).
(b) Upon presentation
of any Security of such series that is to be redeemed in part only, the Company shall execute and the Trustee shall authenticate and the
office or agency where the Security is presented shall deliver to the Securityholder thereof, at the expense of the Company, a new Security
of the same series of authorized denominations in principal amount equal to the unredeemed portion of the Security so presented.
Section 3.04 Sinking Fund.
The provisions of Sections 3.04,
3.05 and 3.06 shall be applicable to any sinking fund for the retirement of Securities of a series, except as otherwise specified as contemplated
by Section 2.01 for Securities of such series.
The minimum amount of any sinking
fund payment provided for by the terms of Securities of any series is herein referred to as a “mandatory sinking fund payment,”
and any payment in excess of such minimum amount provided for by the terms of Securities of any series is herein referred to as an “optional
sinking fund payment”. If provided for by the terms of Securities of any series, the cash amount of any sinking fund payment may
be subject to reduction as provided in Section 3.05. Each sinking fund payment shall be applied to the redemption of Securities of
any series as provided for by the terms of Securities of such series.
Section 3.05 Satisfaction of Sinking
Fund Payments with Securities.
The Company (i) may deliver
Outstanding Securities of a series and (ii) may apply as a credit Securities of a series that have been redeemed either at the election
of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant
to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment with respect to the Securities
of such series required to be made pursuant to the terms of such Securities as provided for by the terms of such series, provided that
such Securities have not been previously so credited. Such Securities shall be received and credited for such purpose by the Trustee at
the redemption price specified in such Securities for redemption through operation of the sinking fund and the amount of such sinking
fund payment shall be reduced accordingly.
Section 3.06 Redemption of Securities
for Sinking Fund.
Not less than 45 days prior to
each sinking fund payment date for any series of Securities (unless a shorter period shall be satisfactory to the Trustee), the Company
will deliver to the Trustee an Officer’s Certificate specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of the series, the portion thereof, if any, that is to be satisfied by delivering and crediting Securities of that
series pursuant to Section 3.05 and the basis for such credit and will, together with such Officer’s Certificate, deliver to
the Trustee any Securities to be so delivered. Not less than 30 days before each such sinking fund payment date the Securities to be redeemed
upon such sinking fund payment date shall be selected in the manner specified in Section 3.02 and the Company shall cause notice
of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 3.02. Such
notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Section 3.03.
ARTICLE 4
COVENANTS
Section 4.01 Payment of Principal,
Premium and Interest.
The Company will duly and punctually
pay or cause to be paid the principal of (and premium, if any) and interest on the Securities of that series at the time and place and
in the manner provided herein and established with respect to such Securities. Payments of principal on the Securities may be made at
the time provided herein and established with respect to such Securities by U.S. dollar check drawn on and mailed to the address of the
Securityholder entitled thereto as such address shall appear in the Security Register, or U.S. dollar wire transfer to, a U.S. dollar
account if such Securityholder shall have furnished wire instructions to the Trustee no later than 15 days prior to the relevant payment
date. Payments of interest on the Securities may be made at the time provided herein and established with respect to such Securities by
U.S. dollar check mailed to the address of the Securityholder entitled thereto as such address shall appear in the Security Register,
or U.S. dollar wire transfer to, a U.S. dollar account if such Securityholder shall have furnished wire instructions in writing to the
Security Registrar and the Trustee no later than 15 days prior to the relevant payment date.
Section 4.02 Maintenance of Office
or Agency.
So long as any series of the
Securities remain Outstanding, the Company agrees to maintain an office or agency with respect to each such series and at such other location
or locations as may be designated as provided in this Section 4.02, where (i) Securities of that series may be presented for
payment, (ii) Securities of that series may be presented as herein above authorized for registration of transfer and exchange, and
(iii) notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be given or served,
such designation to continue with respect to such office or agency until the Company shall, by written notice signed by any officer authorized
to sign an Officer’s Certificate and delivered to the Trustee, designate some other office or agency for such purposes or any of
them. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company
hereby appoints the Trustee as its agent to receive all such presentations, notices and demands. The Company initially appoints the Corporate
Trust Office of the Trustee as its paying agent with respect to the Securities.
Section 4.03 Paying Agents.
(a) If the Company
shall appoint one or more paying agents for all or any series of the Securities, other than the Trustee, the Company will cause each such
paying agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions
of this Section:
(1) that it will hold
all sums held by it as such agent for the payment of the principal of (and premium, if any) or interest on the Securities of that series
(whether such sums have been paid to it by the Company or by any other obligor of such Securities) in trust for the benefit of the Persons
entitled thereto;
(2) that it will give
the Trustee notice of any failure by the Company (or by any other obligor of such Securities) to make any payment of the principal of
(and premium, if any) or interest on the Securities of that series when the same shall be due and payable;
(3) that it will, at
any time during the continuance of any failure referred to in the preceding paragraph (a)(2) above, upon the written request of the
Trustee, forthwith pay to the Trustee all sums so held in trust by such paying agent; and
(4) that it will perform
all other duties of paying agent as set forth in this Indenture.
(b) If the Company
shall act as its own paying agent with respect to any series of the Securities, it will on or before each due date of the principal of
(and premium, if any) or interest on Securities of that series, set aside, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay such principal (and premium, if any) or interest so becoming due on Securities of that series
until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of such
action, or any failure (by it or any other obligor on such Securities) to take such action. Whenever the Company shall have one or more
paying agents for any series of Securities, it will, prior to each due date of the principal of (and premium, if any) or interest on any
Securities of that series, deposit with the paying agent a sum sufficient to pay the principal (and premium, if any) or interest so becoming
due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless such paying
agent is the Trustee) the Company will promptly notify the Trustee of this action or failure so to act.
(c) Notwithstanding
anything in this Section to the contrary, (i) the agreement to hold sums in trust as provided in this Section is subject
to the provisions of Section 11.05, and (ii) the Company may at any time, for the purpose of obtaining the satisfaction and
discharge of this Indenture or for any other purpose, pay, or direct any paying agent to pay, to the Trustee all sums held in trust by
the Company or such paying agent, such sums to be held by the Trustee upon the same terms and conditions as those upon which such sums
were held by the Company or such paying agent; and, upon such payment by the Company or any paying agent to the Trustee, the Company or
such paying agent shall be released from all further liability with respect to such money.
Section 4.04 Appointment to Fill
Vacancy in Office of Trustee.
The Company, whenever necessary
to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 7.10, a Trustee, so that there
shall at all times be a Trustee hereunder.
ARTICLE 5
SECURITYHOLDERS’ LISTS AND REPORTS BY THE
COMPANY AND THE TRUSTEE
Section 5.01 Company to Furnish
Trustee Names and Addresses of Securityholders.
The Company will furnish or cause
to be furnished to the Trustee (a) within 15 days after each regular record date (as defined in Section 2.03) a list, in such
form as the Trustee may reasonably require, of the names and addresses of the holders of each series of Securities as of such regular
record date, provided that the Company shall not be obligated to furnish or cause to furnish such list at any time that the list shall
not differ in any respect from the most recent list furnished to the Trustee by the Company and (b) at such other times as the Trustee
may request in writing within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a
date not more than 15 days prior to the time such list is furnished; provided, however, that, in either case, no such list need be furnished
for any series for which the Trustee shall be the Security Registrar.
Section 5.02 Preservation Of Information;
Communications With Securityholders.
(a) The Trustee shall
preserve, in as current a form as is reasonably practicable, all information as to the names and addresses of the holders of Securities
contained in the most recent list furnished to it as provided in Section 5.01 and as to the names and addresses of holders of Securities
received by the Trustee in its capacity as Security Registrar (if acting in such capacity).
(b) The Trustee may
destroy any list furnished to it as provided in Section 5.01 upon receipt of a new list so furnished.
(c) Securityholders
may communicate as provided in Section 312(b) of the Trust Indenture Act with other Securityholders with respect to their rights
under this Indenture or under the Securities, and, in connection with any such communications, the Trustee shall satisfy its obligations
under Section 312(b) of the Trust Indenture Act in accordance with the provisions of Section 312(b) of the Trust Indenture
Act.
Section 5.03 Reports by the Company.
(a) The Company will
at all times comply with Section 314(a) of the Trust Indenture Act. The Company covenants and agrees to provide (which delivery
may be via electronic mail) to the Trustee within 30 days, after the Company files the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may
from time to time by rules and regulations prescribe) that the Company is required to file with the Commission pursuant to Section 13
or Section 15(d) of the Exchange Act; provided, however, the Company shall not be required to deliver to the Trustee any correspondence
filed with the Commission or any materials for which the Company has sought and received confidential treatment by the Commission; and
provided further, that so long as such filings by the Company are available on the Commission’s Electronic Data Gathering, Analysis
and Retrieval System (EDGAR), or any successor system, such filings shall be deemed to have been filed with the Trustee for purposes hereof
without any further action required by the Company. For the avoidance of doubt, a failure by the Company to file annual reports, information
and other reports with the Commission within the time period prescribed thereof by the Commission shall not be deemed a breach of this
Section 5.03.
(b) Delivery of reports,
information and documents to the Trustee under Section 5.03 is for informational purposes only and the information and the Trustee’s
receipt of the foregoing shall not constitute constructive notice of any information contained therein, or determinable from information
contained therein including the Company’s compliance with any of their covenants thereunder (as to which the Trustee is entitled
to rely exclusively on an Officer’s Certificate). The Trustee is under no duty to examine any such reports, information or documents
delivered to the Trustee or filed with the Commission via EDGAR to ensure compliance with the provision of this Indenture or to ascertain
the correctness or otherwise of the information or the statements contained therein. The Trustee shall have no responsibility or duty
whatsoever to ascertain or determine whether the above referenced filings with the Commission on EDGAR (or any successor system) has occurred.
Section 5.04 Reports
by the Trustee.
(a) If required by
Section 313(a) of the Trust Indenture Act, the Trustee, within sixty (60) days after each May 1, shall send to the Securityholders
a brief report dated as of such May 1, which complies with Section 313(a) of the Trust Indenture Act.
(b) The Trustee shall
comply with Section 313(b) and 313(c) of the Trust Indenture Act.
(c) A copy of each
such report shall, at the time of such transmission to Securityholders, be filed by the Trustee with the Company, with each securities
exchange upon which any Securities are listed (if so listed) and also with the Commission. The Company agrees to notify the Trustee when
any Securities become listed on any securities exchange.
ARTICLE 6
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT
OF DEFAULT
Section 6.01 Events of
Default.
(a) Whenever used
herein with respect to Securities of a particular series, “Event of Default” means any one or more of the following events
that has occurred and is continuing:
(1) the Company defaults
in the payment of any installment of interest upon any of the Securities of that series, as and when the same shall become due and payable,
and such default continues for a period of 90 days; provided, however, that a valid extension of an interest payment period by the Company
in accordance with the terms of any indenture supplemental hereto shall not constitute a default in the payment of interest for this purpose;
(2) the Company defaults
in the payment of the principal of (or premium, if any, on) any of the Securities of that series as and when the same shall become due
and payable whether at maturity, upon redemption, by declaration or otherwise, or in any payment required by any sinking or analogous
fund established with respect to that series; provided, however, that a valid extension of the maturity of such Securities in accordance
with the terms of any indenture supplemental hereto shall not constitute a default in the payment of principal or premium, if any;
(3) the Company fails
to observe or perform any other of its covenants or agreements with respect to that series contained in this Indenture or otherwise established
with respect to that series of Securities pursuant to Section 2.01 hereof (other than a covenant or agreement that has been expressly
included in this Indenture solely for the benefit of one or more series of Securities other than such series) for a period of 90 days
after the date on which written notice of such failure, requiring the same to be remedied and stating that such notice is a “Notice
of Default” hereunder, shall have been given to the Company by the Trustee, by registered or certified mail, or to the Company and
the Trustee by the holders of at least 25% in principal amount of the Securities of that series at the time Outstanding;
(4) the Company pursuant
to or within the meaning of any Bankruptcy Law (i) commences a voluntary case, (ii) consents to the entry of an order for relief
against it in an involuntary case, (iii) consents to the appointment of a Custodian of it or for all or substantially all of its
property or (iv) makes a general assignment for the benefit of its creditors; or
(5) a court of competent
jurisdiction enters an order under any Bankruptcy Law that (i) is for relief against the Company in an involuntary case, (ii) appoints
a Custodian of the Company for all or substantially all of its property or (iii) orders the liquidation of the Company, and the order
or decree remains unstayed and in effect for 90 days.
(b) In each and every
such case (other than an Event of Default specified in clause (4) or clause (5) above), unless the principal of all the Securities
of that series shall have already become due and payable, either the Trustee or the holders of not less than 25% in aggregate principal
amount of the Securities of that series then Outstanding hereunder, by notice in writing to the Company (and to the Trustee if given by
such Securityholders), may declare the principal of (and premium, if any, on) and accrued and unpaid interest on all the Securities of
that series to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable.
If an Event of Default specified in clause (4) or clause (5) above occurs, the principal of and accrued and unpaid interest
on all the Securities of that series shall automatically be immediately due and payable without any declaration or other act on the part
of the Trustee or the holders of the Securities.
(c) At any time after
the principal of (and premium, if any, on) and accrued and unpaid interest on the Securities of that series shall have been so declared
due and payable, and before any judgment or decree for the payment of the moneys due shall have been obtained or entered as hereinafter
provided, the holders of a majority in aggregate principal amount of the Securities of that series then Outstanding hereunder, by written
notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if: (i) the Company has paid or
deposited with the Trustee a sum sufficient to pay all matured installments of interest upon all the Securities of that series and the
principal of (and premium, if any, on) any and all Securities of that series that shall have become due otherwise than by acceleration
(with interest upon such principal and premium, if any, and, to the extent that such payment is enforceable under applicable law, upon
overdue installments of interest, at the rate per annum expressed in the Securities of that series to the date of such payment or deposit)
and the amount payable to the Trustee under Section 7.06, and (ii) any and all Events of Default under the Indenture with respect
to such series, other than the nonpayment of principal on (and premium, if any, on) and accrued and unpaid interest on Securities of that
series that shall not have become due by their terms, shall have been remedied or waived as provided in Section 6.06.
No such rescission and annulment
shall extend to or shall affect any subsequent default or impair any right consequent thereon.
(d) In case the Trustee
shall have proceeded to enforce any right with respect to Securities of that series under this Indenture and such proceedings shall have
been discontinued or abandoned because of such rescission or annulment or for any other reason or shall have been determined adversely
to the Trustee, then and in every such case, subject to any determination in such proceedings, the Company and the Trustee shall be restored
respectively to their former positions and rights hereunder, and all rights, remedies and powers of the Company and the Trustee shall
continue as though no such proceedings had been taken.
Section 6.02 Collection
of Indebtedness and Suits for Enforcement by Trustee.
(a) The Company covenants
that (i) in case it shall default in the payment of any installment of interest on any of the Securities of a series, or in any payment
required by any sinking or analogous fund established with respect to that series as and when the same shall have become due and payable,
and such default shall have continued for a period of 90 days, or (ii) in case it shall default in the payment of the principal of
(or premium, if any, on) any of the Securities of a series when the same shall have become due and payable, whether upon maturity of the
Securities of a series or upon redemption or upon declaration or otherwise then, upon demand of the Trustee, the Company will pay to the
Trustee, for the benefit of the holders of the Securities of that series, the whole amount that then shall have been become due and payable
on all such Securities for principal (and premium, if any) or interest, or both, as the case may be, with interest upon the overdue principal
(and premium, if any) and (to the extent that payment of such interest is enforceable under applicable law) upon overdue installments
of interest at the rate per annum expressed in the Securities of that series; and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, and the amount payable to the Trustee under Section 7.06.
(b) If the Company
shall fail to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, shall be entitled
and empowered to institute any action or proceedings at law or in equity for the collection of the sums so due and unpaid, and may prosecute
any such action or proceeding to judgment or final decree, and may enforce any such judgment or final decree against the Company or other
obligor upon the Securities of that series and collect the moneys adjudged or decreed to be payable in the manner provided by law or equity
out of the property of the Company or other obligor upon the Securities of that series, wherever situated.
(c) In case of any
receivership, insolvency, liquidation, bankruptcy, reorganization, readjustment, arrangement, composition or judicial proceedings affecting
the Company, or its creditors or property, the Trustee shall have power to intervene in such proceedings and take any action therein that
may be permitted by the court and shall (except as may be otherwise provided by law) be entitled to file such proofs of claim and other
papers and documents as may be necessary or advisable in order to have the claims of the Trustee and of the holders of Securities of such
series allowed for the entire amount due and payable by the Company under the Indenture at the date of institution of such proceedings
and for any additional amount that may become due and payable by the Company after such date, and to collect and receive any moneys or
other property payable or deliverable on any such claim, and to distribute the same after the deduction of the amount payable to the Trustee
under Section 7.06; and any receiver, assignee or trustee in bankruptcy or reorganization is hereby authorized by each of the holders
of Securities of such series to make such payments to the Trustee, and, in the event that the Trustee shall consent to the making of such
payments directly to such Securityholders, to pay to the Trustee any amount due it under Section 7.06.
(d) All rights of
action and of asserting claims under this Indenture, or under any of the terms established with respect to Securities of that series,
may be enforced by the Trustee without the possession of any of such Securities, or the production thereof at any trial or other proceeding
relative thereto, and any such suit or proceeding instituted by the Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment shall, after provision for payment to the Trustee of any amounts due under Section 7.06, be for
the ratable benefit of the holders of the Securities of such series.
In case of an Event of Default
hereunder, the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by such appropriate
judicial proceedings as the Trustee shall deem most effectual to protect and enforce any of such rights, either at law or in equity or
in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement contained in the Indenture or in aid of
the exercise of any power granted in this Indenture, or to enforce any other legal or equitable right vested in the Trustee by this Indenture
or by law.
Nothing contained herein shall
be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Securityholder any plan of reorganization,
arrangement, adjustment or composition affecting the Securities of that series or the rights of any Securityholder thereof or to authorize
the Trustee to vote in respect of the claim of any Securityholder in any such proceeding.
Section 6.03 Application
of Moneys Collected.
Any moneys collected by the Trustee
pursuant to this Article with respect to a particular series of Securities shall be applied in the following order, at the date or
dates fixed by the Trustee and, in case of the distribution of such moneys on account of principal (or premium, if any) or interest, upon
presentation of the Securities of that series, and notation thereon of the payment, if only partially paid, and upon surrender thereof
if fully paid:
FIRST: To the payment of costs
and expenses of collection and of all amounts payable to the Trustee under Section 7.06;
SECOND: To the payment of the
amounts then due and unpaid upon Securities of such series for principal (and premium, if any) and interest, in respect of which or for
the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due
and payable on such Securities for principal (and premium, if any) and interest, respectively; and
THIRD: To the payment of the
remainder, if any, to the Company or any other Person lawfully entitled thereto.
Section 6.04 Limitation
on Suits.
No holder of any Security of
any series shall have any right by virtue or by availing of any provision of this Indenture to institute any suit, action or proceeding
in equity or at law upon or under or with respect to this Indenture or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless (i) such Securityholder previously shall have given to the Trustee written notice of an Event of Default
and of the continuance thereof with respect to the Securities of such series specifying such Event of Default, as hereinbefore provided;
(ii) the holders of not less than 25% in aggregate principal amount of the Securities of such series then Outstanding shall have
made written request upon the Trustee to institute such action, suit or proceeding in its own name as Trustee hereunder; (iii) such
Securityholder or Securityholders shall have offered to the Trustee indemnity satisfactory to it against the costs, expenses and liabilities
to be incurred in compliance with such request; (iv) the Trustee for 90 days after its receipt of such notice, request and offer
of indemnity, shall have failed to institute any such action, suit or proceeding and (v) during such 90 day period, the holders of
a majority in principal amount of the Securities of that series do not give the Trustee a direction inconsistent with the request.
Notwithstanding anything contained
herein to the contrary or any other provisions of this Indenture, the right of any holder of any Security to receive payment of the principal
of (and premium, if any) and interest on such Security, as therein provided, on or after the respective due dates expressed in such Security
(or in the case of redemption, on the redemption date), or to institute suit for the enforcement of any such payment on or after such
respective dates or redemption date, shall not be impaired or affected without the consent of such holder and by accepting a Security
hereunder it is expressly understood, intended and covenanted by the taker and holder of every Security of such series with every other
such taker and holder and the Trustee, that no one or more holders of Securities of such series shall have any right in any manner whatsoever
by virtue or by availing of any provision of this Indenture to affect, disturb or prejudice the rights of the holders of any other of
such Securities, or to obtain or seek to obtain priority over or preference to any other such holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all holders of Securities of such series.
For the protection and enforcement of the provisions of this Section, each and every Securityholder and the Trustee shall be entitled
to such relief as can be given either at law or in equity.
Section 6.05 Rights and
Remedies Cumulative; Delay or Omission Not Waiver.
(a) Except as otherwise
provided in Section 2.07, all powers and remedies given by this Article to the Trustee or to the Securityholders shall, to the
extent permitted by law, be deemed cumulative and not exclusive of any other powers and remedies available to the Trustee or the holders
of the Securities, by judicial proceedings or otherwise, to enforce the performance or observance of the covenants and agreements contained
in this Indenture or otherwise established with respect to such Securities.
(b) No delay or omission
of the Trustee or of any holder of any of the Securities to exercise any right or power accruing upon any Event of Default occurring and
continuing as aforesaid shall impair any such right or power, or shall be construed to be a waiver of any such default or an acquiescence
therein; and, subject to the provisions of Section 6.04, every power and remedy given by this Article or by law to the Trustee
or the Securityholders may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Securityholders.
Section 6.06 Control
by Securityholders.
The holders of a majority in
aggregate principal amount of the Securities of any series at the time Outstanding, determined in accordance with Section 8.04, shall
have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee with respect to such series; provided, however, that such direction shall not be in conflict
with any rule of law or with this Indenture or subject the Trustee in its sole discretion to personal liability. Subject to the provisions
of Section 7.01, the Trustee shall have the right to decline to follow any such direction if the Trustee in good faith shall, by
a Responsible Officer or officers of the Trustee, determine that the proceeding so directed, subject to the Trustee’s duties under
the Trust Indenture Act, would involve the Trustee in personal liability or might be unduly prejudicial to the Securityholders not involved
in the proceeding. The holders of a majority in aggregate principal amount of the Securities of any series at the time Outstanding affected
thereby, determined in accordance with Section 8.04, may on behalf of the holders of all of the Securities of such series waive any
past default in the performance of any of the covenants contained herein or established pursuant to Section 2.01 with respect to
such series and its consequences, except a default in the payment of the principal of, or premium, if any, or interest on, any of the
Securities of that series as and when the same shall become due by the terms of such Securities otherwise than by acceleration (unless
such default has been cured and a sum sufficient to pay all matured installments of interest and principal and any premium has been deposited
with the Trustee (in accordance with Section 6.01(c)). Upon any such waiver, the default covered thereby shall be deemed to be cured
for all purposes of this Indenture and the Company, the Trustee and the holders of the Securities of such series shall be restored to
their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other default or impair
any right consequent thereon.
Section 6.07 Undertaking
to Pay Costs.
All parties to this Indenture
agree, and each holder of any Securities by such holder’s acceptance thereof shall be deemed to have agreed, that any court may
in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee
for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of
such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees and expenses,
against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to any suit instituted by the Trustee, to any suit instituted by any Securityholder,
or group of Securityholders, holding more than 10% in aggregate principal amount of the Outstanding Securities of any series, or to any
suit instituted by any Securityholder for the enforcement of the payment of the principal of (or premium, if any) or interest on any Security
of such series, on or after the respective due dates expressed in such Security or established pursuant to this Indenture.
ARTICLE 7
CONCERNING THE TRUSTEE
Section 7.01 Certain
Duties and Responsibilities of Trustee.
(a) The Trustee, prior
to the occurrence of an Event of Default with respect to the Securities of a series and after the curing of all Events of Default with
respect to the Securities of that series that may have occurred, shall undertake to perform with respect to the Securities of such series
such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants shall be read into this Indenture
against the Trustee. In case an Event of Default with respect to the Securities of a series has occurred (that has not been cured or waived),
the Trustee shall exercise with respect to Securities of that series such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct
of his or her own affairs.
(b) No provision of
this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act,
or its own willful misconduct, except that:
(i) prior to the occurrence
of an Event of Default with respect to the Securities of a series and after the curing or waiving of all such Events of Default with respect
to that series that may have occurred:
(A) the duties and obligations
of the Trustee shall with respect to the Securities of such series be determined solely by the express provisions of this Indenture, and
the Trustee shall not be liable with respect to the Securities of such series except for the performance of such duties and obligations
as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the
Trustee; and
(B) in the absence of
bad faith on the part of the Trustee, the Trustee may with respect to the Securities of such series conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but in the case of any such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Indenture;
(ii) the Trustee shall
not be liable to any Securityholder or to any other Person for any error of judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts;
(iii) the Trustee shall
not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the holders
of not less than a majority in principal amount of the Securities of any series at the time Outstanding relating to the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee
under this Indenture with respect to the Securities of that series;
(iv) none of the provisions
contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal financial liability
in the performance of any of its duties or in the exercise of any of its rights or powers if there is reasonable ground for believing
that the repayment of such funds or liability is not reasonably assured to it under the terms of this Indenture or adequate indemnity
against such risk is not reasonably assured to it;
(v) The Trustee shall
not be required to give any bond or surety in respect of the performance of its powers or duties hereunder;
(vi) The permissive
right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty of the Trustee; and
(vii) No Trustee shall
have any duty or responsibility for any act or omission of any other Trustee appointed with respect to a series of Securities hereunder.
Section 7.02 Certain
Rights of Trustee.
Except as otherwise provided
in Section 7.01:
(a) The Trustee may
conclusively rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, security or other paper or document believed by it to be genuine and
to have been signed or presented by the proper party or parties;
(b) Any request, direction,
order or demand of the Company mentioned herein shall be sufficiently evidenced by a Board Resolution or an instrument signed in the name
of the Company by any authorized Officer of the Company (unless other evidence in respect thereof is specifically prescribed herein);
(c) The Trustee may
consult with counsel and the opinion or written advice of such counsel or, if requested, any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or omitted hereunder in good faith and in reliance thereon;
(d) The Trustee shall
be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any
of the Securityholders pursuant to the provisions of this Indenture, unless such Securityholders shall have offered to the Trustee security
or indemnity reasonably acceptable to the Trustee against the costs, expenses and liabilities that may be incurred therein or thereby;
nothing contained herein shall, however, relieve the Trustee of the obligation, upon the occurrence of an Event of Default with respect
to a series of the Securities (that has not been cured or waived), to exercise with respect to Securities of that series such of the rights
and powers vested in it by this Indenture, and to use the same degree of care and skill in their exercise, as a prudent man would exercise
or use under the circumstances in the conduct of his or her own affairs;
(e) The Trustee shall
not be liable for any action taken or omitted to be taken by it in good faith and believed by it to be authorized or within the discretion
or rights or powers conferred upon it by this Indenture;
(f) The Trustee shall
not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond, security, or other papers or documents or inquire as to the performance by the
Company of one of its covenants under this Indenture, unless requested in writing so to do by the holders of not less than a majority
in principal amount of the Outstanding Securities of the particular series affected thereby (determined as provided in Section 8.04);
provided, however, that if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred
by it in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee by the security afforded
to it by the terms of this Indenture, the Trustee may require security or indemnity reasonably acceptable to the Trustee against such
costs, expenses or liabilities as a condition to so proceeding. The reasonable expense of every such examination shall be paid by the
Company or, if paid by the Trustee, shall be repaid by the Company upon demand;
(g) The Trustee may
execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and
the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by
it hereunder;
(h) In no event shall
the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused
by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war
or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions
of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts
which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances;
(i) In no event shall
the Trustee be responsible or liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including,
but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and
regardless of the form of action; and
(j) The Trustee agrees
to accept and act upon instructions or directions pursuant to this Indenture sent by unsecured e-mail, facsimile transmission or other
similar unsecured electronic methods; provided, however, that such instructions or directions shall be signed by an authorized representative
of the party providing such instructions or directions. If the party elects to give the Trustee e-mail or facsimile instructions (or instructions
by a similar electronic method) and the Trustee in its discretion elects to act upon such instructions, the Trustee’s understanding
of such instructions shall be deemed controlling. The Trustee shall not be liable for any losses, costs or expenses arising directly or
indirectly from the Trustee’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or
are inconsistent with a subsequent written instruction. The party providing electronic instructions agrees to assume all risks arising
out of the use of such electronic methods to submit instructions and directions to the Trustee, including without limitation the risk
of the Trustee acting on unauthorized instructions, and the risk or interception and misuse by third parties. The Trustee may request
that the Company deliver an Officer’s Certificate setting forth the names of individuals and/or titles of officers authorized at
such time to furnish the Trustee with Officer’s Certificates, Company Orders and any other matters or directions pursuant to this
Indenture.
(k) The rights, privileges,
protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to,
and shall be enforceable by, the Trustee in each of its capacities hereunder and under the Securities, and each agent, custodian or other
person employed to act under this Indenture.
(l) The Trustee shall
not be deemed to have knowledge of any Default or Event of Default (other than an Event of Default constituting the failure to pay the
interest on, or the principal of, the Securities if the Trustee also serves the paying agent for such Securities) until the Trustee shall
have received written notification in the manner set forth in this Indenture or a Responsible Officer of the Trustee shall have obtained
actual knowledge.
Section 7.03 Trustee
Not Responsible for Recitals or Issuance or Securities.
(a) The recitals contained
herein and in the Securities shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the correctness
of the same. The Trustee shall not be responsible for any statement in any registration statement, prospectus, or any other document in
connection with the sale of Securities. The Trustee shall not be responsible for any rating on the Securities or any action or omission
of any rating agency.
(b) The Trustee makes
no representations as to the validity or sufficiency of this Indenture or of the Securities.
(c) The Trustee shall
not be accountable for the use or application by the Company of any of the Securities or of the proceeds of such Securities, or for the
use or application of any moneys paid over by the Trustee in accordance with any provision of this Indenture or established pursuant to
Section 2.01, or for the use or application of any moneys received by any paying agent other than the Trustee.
Section 7.04 May Hold
Securities.
The Trustee or any paying agent
or Security Registrar, in its individual or any other capacity, may become the owner or pledgee of Securities with the same rights it
would have if it were not Trustee, paying agent or Security Registrar.
Section 7.05 Moneys Held
in Trust.
Subject to the provisions of
Section 11.05, all moneys received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes
for which they were received, but need not be segregated from other funds except to the extent required by law. The Trustee shall be under
no liability for interest on any moneys received by it hereunder except such as it may agree with the Company to pay thereon.
Section 7.06 Compensation
and Reimbursement.
(a) The Company shall
pay to the Trustee for each of its capacities hereunder from time to time compensation for its services as the Company and the Trustee
shall from time to time agree upon in writing. The Trustee’s compensation shall not be limited by any law on compensation of a trustee
of an express trust. The Company shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred by it. Such
expenses shall include the reasonable compensation and expenses of the Trustee’s agents and counsel.
(b) The Company shall
indemnify each of the Trustee in each of its capacities hereunder against any loss, liability or expense (including the cost of defending
itself and including the reasonable compensation and expenses of the Trustee’s agents and counsel) incurred by it except as set
forth in Section 7.06(c) in the exercise or performance of its powers, rights or duties under this Indenture as Trustee or Agent.
The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. The Company shall defend the claim and the
Trustee shall cooperate in the defense. The Trustee may have one separate counsel and the Company shall pay the reasonable fees and expenses
of such counsel. The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld.
This indemnification shall apply to officers, directors, employees, shareholders and agents of the Trustee.
(c) The Company need
not reimburse any expense or indemnify against any loss or liability incurred by the Trustee or by any officer, director, employee, shareholder
or agent of the Trustee through negligence or bad faith.
(d) To ensure the
Company’s payment obligations in this Section, the Trustee shall have a lien prior to the Securities on all funds or property held
or collected by the Trustee, except that held in trust to pay principal of or interest on particular Securities. When the Trustee incurs
expenses or renders services in connection with an Event of Default specified in Section 6.01(4) or (5), the expenses (including
the reasonable fees and expenses of its counsel) and the compensation for services in connection therewith are to constitute expenses
of administration under any bankruptcy law. The provisions of this Section 7.06 shall survive the termination of this Indenture and
the resignation or removal of the Trustee.
Section 7.07 Reliance
on Officer’s Certificate.
Except as otherwise provided
in Section 7.01, whenever in the administration of the provisions of this Indenture the Trustee shall deem it reasonably necessary
or desirable that a matter be proved or established prior to taking or suffering or omitting to take any action hereunder, such matter
(unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or bad faith on the part
of the Trustee, be deemed to be conclusively proved and established by an Officer’s Certificate delivered to the Trustee and such
certificate, in the absence of negligence or bad faith on the part of the Trustee, shall be full warrant to the Trustee for any action
taken, suffered or omitted to be taken by it under the provisions of this Indenture upon the faith thereof.
Section 7.08 Disqualification;
Conflicting Interests.
If the Trustee has or shall acquire
any “conflicting interest” within the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the
Company shall in all respects comply with the provisions of Section 310(b) of the Trust Indenture Act.
Section 7.09 Corporate
Trustee Required; Eligibility.
There shall at all times be a
Trustee with respect to the Securities issued hereunder which shall at all times be a corporation organized and doing business under the
laws of the United States of America or any state or territory thereof or of the District of Columbia, or a corporation or other Person
permitted to act as trustee by the Commission, authorized under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least fifty million U.S. dollars ($50,000,000), and subject to supervision or examination by federal, state, territorial,
or District of Columbia authority.
If such corporation or other
Person publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section, the combined capital and surplus of such corporation or other Person shall be deemed
to be its combined capital and surplus as set forth in its most recent report of condition so published. The Company may not, nor may
any Person directly or indirectly controlling, controlled by, or under common control with the Company, serve as Trustee. In case at any
time the Trustee shall cease to be eligible in accordance with the provisions of this Section, the Trustee shall resign immediately in
the manner and with the effect specified in Section 7.10.
Section 7.10 Resignation
and Removal; Appointment of Successor.
(a) The Trustee or
any successor hereafter appointed may at any time resign with respect to the Securities of one or more series by giving written notice
thereof to the Company and the Securityholders of such series. Upon receiving such notice of resignation, the Company shall promptly appoint
a successor trustee with respect to Securities of such series by written instrument, in duplicate, executed by order of the Board of Directors,
one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee. If no successor trustee
shall have been so appointed and have accepted appointment within 30 days after the sending of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of a successor trustee with respect to Securities of such
series, or any Securityholder of that series who has been a bona fide holder of a Security or Securities for at least six months may on
behalf of himself and all others similarly situated, petition any such court for the appointment of a successor trustee. Such court may
thereupon after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee.
(b) In case at any
time any one of the following shall occur:
(i) the Trustee shall
fail to comply with the provisions of Section 7.08 after written request therefor by the Company or by any Securityholder who has
been a bona fide holder of a Security or Securities for at least six months; or
(ii) the Trustee shall
cease to be eligible in accordance with the provisions of Section 7.09 and shall fail to resign after written request therefor by
the Company or by any such Securityholder; or
(iii) the Trustee shall
become incapable of acting, or shall be adjudged a bankrupt or insolvent, or commence a voluntary bankruptcy proceeding, or a receiver
of the Trustee or of its property shall be appointed or consented to, or any public officer shall take charge or control of the Trustee
or of its property or affairs for the purpose of rehabilitation, conservation or liquidation; then, in any such case, the Company may
remove the Trustee with respect to all Securities and appoint a successor trustee by written instrument, in duplicate, executed by order
of the Board of Directors, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee,
or any Securityholder who has been a bona fide holder of a Security or Securities for at least six months may, on behalf of that holder
and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of
a successor trustee. Such court may thereupon after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint
a successor trustee.
(c) The holders of
a majority in aggregate principal amount of the Securities of any series at the time Outstanding may at any time remove the Trustee with
respect to such series by so notifying the Trustee and the Company and may appoint a successor Trustee for such series with the consent
of the Company.
(d) Any resignation
or removal of the Trustee and appointment of a successor trustee with respect to the Securities of a series pursuant to any of the provisions
of this Section shall become effective upon acceptance of appointment by the successor trustee as provided in Section 7.11.
(e) Any successor
trustee appointed pursuant to this Section may be appointed with respect to the Securities of one or more series or all of such series,
and at any time there shall be only one Trustee with respect to the Securities of any particular series.
Section 7.11 Acceptance
of Appointment By Successor.
(a) In case of the
appointment hereunder of a successor trustee with respect to all Securities, every such successor trustee so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation
or removal of the retiring Trustee shall become effective and such successor trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company or the successor
trustee, such retiring Trustee shall, upon payment of any amounts due to it pursuant to the provisions of Section 7.06, execute and
deliver an instrument transferring to such successor trustee all the rights, powers, and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor trustee all property and money held by such retiring Trustee hereunder.
(b) In case of the
appointment hereunder of a successor trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring
Trustee and each successor trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental
hereto wherein each successor trustee shall accept such appointment and which (i) shall contain such provisions as shall be necessary
or desirable to transfer and confirm to, and to vest in, each successor trustee all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which the appointment of such successor trustee relates, (ii) shall
contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be
vested in the retiring Trustee, and (iii) shall add to or change any of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein
or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust, that each such Trustee shall be trustee
of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee and that
no Trustee shall be responsible for any act or failure to act on the part of any other Trustee hereunder; and upon the execution and
delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided
therein, such retiring Trustee shall with respect to the Securities of that or those series to which the appointment of such successor
trustee relates have no further responsibility for the exercise of rights and powers or for the performance of the duties and obligations
vested in the Trustee under this Indenture, and each such successor trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor trustee relates; but, on request of the Company or any successor trustee, such retiring Trustee
shall duly assign, transfer and deliver to such successor trustee, to the extent contemplated by such supplemental indenture, the property
and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of
such successor trustee relates.
(c) Upon request of
any such successor trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to
such successor trustee all such rights, powers and trusts referred to in paragraph (a) or (b) of this Section, as the case may
be.
(d) No successor trustee
shall accept its appointment unless at the time of such acceptance such successor trustee shall be qualified and eligible under this Article.
(e) Upon acceptance
of appointment by a successor trustee as provided in this Section, the Company shall send notice of the succession of such trustee hereunder
to the Securityholders. If the Company fails to transmit such notice within ten days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be transmitted at the expense of the Company.
Section 7.12 Merger,
Conversion, Consolidation or Succession to Business.
Any corporation into which the
Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation
to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee,
including the administration of the trust created by this Indenture, shall be the successor of the Trustee hereunder, provided that such
corporation shall be qualified under the provisions of Section 7.08 and eligible under the provisions of Section 7.09, without
the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding.
In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion
or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
Section 7.13 Preferential
Collection of Claims Against the Company.
The Trustee shall comply with
Section 311(a) of the Trust Indenture Act, excluding any creditor relationship described in Section 311(b) of the
Trust Indenture Act. A Trustee who has resigned or been removed shall be subject to Section 311(a) of the Trust Indenture Act
to the extent included therein.
Section 7.14 Notice of
Default.
If any Event of Default occurs
and is continuing and if such Event of Default is known to a Responsible Officer of the Trustee, the Trustee shall send to each Securityholder
in the manner and to the extent provided in Section 313(c) of the Trust Indenture Act notice of the Event of Default within
the earlier of 90 days after it occurs and 30 days after it is known to a Responsible Officer of the Trustee or written notice of it is
received by the Trustee, unless such Event of Default has been cured; provided, however, that, except in the case of a default
in the payment of the principal of (or premium, if any) or interest on any Security, the Trustee shall be protected in withholding such
notice if and so long as the Responsible Officers of the Trustee in good faith determine that the withholding of such notice is in the
interest of the Securityholders.
ARTICLE 8
CONCERNING THE SECURITYHOLDERS
Section 8.01 Evidence
of Action by Securityholders.
Whenever in this Indenture it
is provided that the holders of a majority or specified percentage in aggregate principal amount of the Securities of a particular series
may take any action (including the making of any demand or request, the giving of any notice, consent or waiver or the taking of any other
action), the fact that at the time of taking any such action the holders of such majority or specified percentage of that series have
joined therein may be evidenced by any instrument or any number of instruments of similar tenor executed by such holders of Securities
of that series in person or by agent or proxy appointed in writing.
If the Company shall solicit
from the Securityholders of any series any request, demand, authorization, direction, notice, consent, waiver or other action, the Company
may, at its option, as evidenced by an Officer’s Certificate, fix in advance a record date for such series for the determination
of Securityholders entitled to give such request, demand, authorization, direction, notice, consent, waiver or other action, but the Company
shall have no obligation to do so. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver
or other action may be given before or after the record date, but only the Securityholders of record at the close of business on the record
date shall be deemed to be Securityholders for the purposes of determining whether Securityholders of the requisite proportion of Outstanding
Securities of that series have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver
or other action, and for that purpose the Outstanding Securities of that series shall be computed as of the record date; provided, however,
that no such authorization, agreement or consent by such Securityholders on the record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later than six months after the record date.
Section 8.02 Proof of
Execution by Securityholders.
Subject to the provisions of
Section 7.01, proof of the execution of any instrument by a Securityholder (such proof will not require notarization) or his or her
agent or proxy and proof of the holding by any Person of any of the Securities shall be sufficient if made in the following manner:
(a) The fact and date
of the execution by any such Person of any instrument may be proved in any reasonable manner acceptable to the Trustee.
(b) The ownership
of Securities shall be proved by the Security Register of such Securities or by a certificate of the Security Registrar thereof.
The Trustee may require such additional proof of any
matter referred to in this Section as it shall deem necessary.
Section 8.03 Who May be
Deemed Owners.
Prior to the due presentment
for registration of transfer of any Security, the Company, the Trustee, any paying agent and any Security Registrar may deem and treat
the Person in whose name such Security shall be registered upon the books of the Security Registrar as the absolute owner of such Security
(whether or not such Security shall be overdue and notwithstanding any notice of ownership or writing thereon made by anyone other than
the Security Registrar) for the purpose of receiving payment of or on account of the principal of, premium, if any, and (subject to Section 2.03)
interest on such Security and for all other purposes; and neither the Company nor the Trustee nor any paying agent nor any Security Registrar
shall be affected by any notice to the contrary.
Section 8.04 Certain
Securities Owned by Company Disregarded.
In determining whether the holders
of the requisite aggregate principal amount of Securities of a particular series have concurred in any direction, consent or waiver under
this Indenture, the Securities of that series that are owned by the Company or any other obligor on the Securities of that series or by
any Person directly or indirectly controlling or controlled by or under common control with the Company or any other obligor on the Securities
of that series shall be disregarded and deemed not to be Outstanding for the purpose of any such determination, except that for the purpose
of determining whether the Trustee shall be protected in relying on any such direction, consent or waiver, only Securities of such series
that the Trustee actually knows are so owned shall be so disregarded. The Securities so owned that have been pledged in good faith may
be regarded as Outstanding for the purposes of this Section, if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s
right so to act with respect to such Securities and that the pledgee is not a Person directly or indirectly controlling or controlled
by or under direct or indirect common control with the Company or any such other obligor. In case of a dispute as to such right, any decision
by the Trustee taken upon the advice of counsel shall be full protection to the Trustee.
Section 8.05 Actions
Binding on Future Securityholders.
At any time prior to (but not
after) the evidencing to the Trustee, as provided in Section 8.01, of the taking of any action by the holders of the majority or
percentage in aggregate principal amount of the Securities of a particular series specified in this Indenture in connection with such
action, any holder of a Security of that series that is shown by the evidence to be included in the Securities the holders of which have
consented to such action may, by filing written notice with the Trustee, and upon proof of holding as provided in Section 8.02, revoke
such action so far as concerns such Security. Except as aforesaid any such action taken by the holder of any Security shall be conclusive
and binding upon such holder and upon all future holders and owners of such Security, and of any Security issued in exchange therefor,
on registration of transfer thereof or in place thereof, irrespective of whether or not any notation in regard thereto is made upon such
Security. Any action taken by the holders of the majority or percentage in aggregate principal amount of the Securities of a particular
series specified in this Indenture in connection with such action shall be conclusively binding upon the Company, the Trustee and the
holders of all the Securities of that series.
ARTICLE 9
SUPPLEMENTAL INDENTURES
Section 9.01 Supplemental
Indentures Without the Consent of Securityholders.
In addition to any supplemental
indenture otherwise authorized by this Indenture, the Company and the Trustee may from time to time and at any time enter into an indenture
or indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as then in effect), without the consent
of the Securityholders, for one or more of the following purposes:
(a) to cure any ambiguity,
defect, or inconsistency herein or in the Securities of any series;
(b) to comply with
Article Ten;
(c) to provide for
uncertificated Securities in addition to or in place of certificated Securities;
(d) to add to the
covenants, restrictions, conditions or provisions relating to the Company for the benefit of the holders of all or any series of Securities
(and if such covenants, restrictions, conditions or provisions are to be for the benefit of less than all series of Securities, stating
that such covenants, restrictions, conditions or provisions are expressly being included solely for the benefit of such series), to make
the occurrence, or the occurrence and the continuance, of a default in any such additional covenants, restrictions, conditions or provisions
an Event of Default, or to surrender any right or power herein conferred upon the Company;
(e) to add to, delete
from, or revise the conditions, limitations, and restrictions on the authorized amount, terms, or purposes of issue, authentication, and
delivery of Securities, as herein set forth;
(f) to make any change
that does not adversely affect the rights of any Securityholder in any material respect;
(g) to provide for
the issuance of and establish the form and terms and conditions of the Securities of any series as provided in Section 2.01, to establish
the form of any certifications required to be furnished pursuant to the terms of this Indenture or any series of Securities, or to add
to the rights of the holders of any series of Securities;
(h) to evidence and
provide for the acceptance of appointment hereunder by a successor trustee; or
(i) to comply with
any requirements of the Commission or any successor in connection with the qualification of this Indenture under the Trust Indenture Act.
The Trustee is hereby authorized
to join with the Company in the execution of any such supplemental indenture, and to make any further appropriate agreements and stipulations
that may be therein contained, but the Trustee shall not be obligated to enter into any such supplemental indenture that affects the Trustee’s
own rights, duties or immunities under this Indenture or otherwise.
Any supplemental indenture authorized
by the provisions of this Section may be executed by the Company and the Trustee without the consent of the holders of any of the
Securities at the time Outstanding, notwithstanding any of the provisions of Section 9.02.
Section 9.02 Supplemental
Indentures With Consent of Securityholders.
With the consent (evidenced as
provided in Section 8.01) of the holders of not less than a majority in aggregate principal amount of the Securities of each series
affected by such supplemental indenture or indentures at the time Outstanding, the Company, when authorized by a Board Resolution, and
the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act as then in effect) for the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of any supplemental indenture or of modifying in any manner not covered by Section 9.01
the rights of the holders of the Securities of such series under this Indenture; provided, however, that no such supplemental indenture
shall, without the consent of the holders of each Security then Outstanding and affected thereby, (a) extend the fixed maturity of
any Securities of any series, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon,
or reduce any premium payable upon the redemption thereof or (b) reduce the aforesaid percentage of Securities, the holders of which
are required to consent to any such supplemental indenture.
It shall not be necessary for
the consent of the Securityholders of any series affected thereby under this Section to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such consent shall approve the substance thereof.
Section 9.03 Effect of
Supplemental Indentures.
Upon the execution of any supplemental
indenture pursuant to the provisions of this Article or of Section 10.01, this Indenture shall, with respect to such series,
be and be deemed to be modified and amended in accordance therewith and the respective rights, limitations of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Company and the holders of Securities of the series affected thereby shall thereafter
be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.
Section 9.04 Securities
Affected by Supplemental Indentures.
Securities of any series affected
by a supplemental indenture, authenticated and delivered after the execution of such supplemental indenture pursuant to the provisions
of this Article or of Section 10.01, may bear a notation in form approved by the Company, provided such form meets the requirements
of any securities exchange upon which such series may be listed, as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Securities of that series so modified as to conform, in the opinion of the Board of Directors, to any
modification of this Indenture contained in any such supplemental indenture may be prepared by the Company, authenticated by the Trustee
and delivered in exchange for the Securities of that series then Outstanding.
Section 9.05 Execution
of Supplemental Indentures.
Upon the request of the Company,
accompanied by its Board Resolutions authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee
of evidence of the consent of Securityholders required to consent thereto as aforesaid, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture affects the Trustee’s own rights, duties or immunities
under this Indenture or otherwise, in which case the Trustee may in its discretion but shall not be obligated to enter into such supplemental
indenture. The Trustee, subject to the provisions of Section 7.01, shall receive an Officer’s Certificate or an Opinion of
Counsel as conclusive evidence that any supplemental indenture executed pursuant to this Article is authorized or permitted by the
terms of this Article and that all conditions precedent to the execution of the supplemental indenture have been complied with; provided,
however, that such Officer’s Certificate or Opinion of Counsel need not be provided in connection with the execution of a supplemental
indenture that establishes the terms of a series of Securities pursuant to Section 2.01 hereof.
Promptly after the execution
by the Company and the Trustee of any supplemental indenture pursuant to the provisions of this Section, the Company shall (or shall direct
the Trustee to) send a notice, setting forth in general terms the substance of such supplemental indenture, to the Securityholders of
all series affected thereby .as their names and addresses appear upon the Security Register. Any failure of the Company to send, or cause
the sending of, such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental
indenture.
ARTICLE 10
SUCCESSOR ENTITY
Section 10.01 Company
May Consolidate, Etc.
Nothing contained in this Indenture
shall prevent any consolidation or merger of the Company with or into any other Person (whether or not affiliated with the Company) or
successive consolidations or mergers in which the Company or its successor or successors shall be a party or parties, or shall prevent
any sale, conveyance, transfer or other disposition of the property of the Company or its successor or successors as an entirety, or substantially
as an entirety, to any other Person (whether or not affiliated with the Company or its successor or successors); provided, however, the
Company hereby covenants and agrees that, upon any such consolidation or merger (in each case, if the Company is not the survivor of such
transaction) or any such sale, conveyance, transfer or other disposition (other than a sale, conveyance, transfer or other disposition
to a Subsidiary of the Company), the due and punctual payment of the principal of (premium, if any) and interest on all of the Securities
of all series in accordance with the terms of each series, according to their tenor, and the due and punctual performance and observance
of all the covenants and conditions of this Indenture with respect to each series or established with respect to such series pursuant
to Section 2.01 to be kept or performed by the Company shall be expressly assumed, by supplemental indenture (which shall conform
to the provisions of the Trust Indenture Act, as then in effect) reasonably satisfactory in form to the Trustee executed and delivered
to the Trustee by the entity formed by such consolidation, or into which the Company shall have been merged, or by the entity which shall
have acquired such property.
Section 10.02 Successor
Entity Substituted.
(a) In case of any
such consolidation, merger, sale, conveyance, transfer or other disposition and upon the assumption by the successor entity by supplemental
indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the obligations set forth under Section 10.01
on all of the Securities of all series Outstanding, such successor entity shall succeed to and be substituted for the Company with the
same effect as if it had been named as the Company herein, and thereupon the predecessor corporation shall be relieved of all obligations
and covenants under this Indenture and the Securities.
(b) In case of any
such consolidation, merger, sale, conveyance, transfer or other disposition, such changes in phraseology and form (but not in substance)
may be made in the Securities thereafter to be issued as may be appropriate.
(c) Nothing contained
in this Article shall require any action by the Company in the case of a consolidation or merger of any Person into the Company where
the Company is the survivor of such transaction, or the acquisition by the Company, by purchase or otherwise, of all or any part of the
property of any other Person (whether or not affiliated with the Company).
ARTICLE 11
SATISFACTION AND DISCHARGE
Section 11.01 Satisfaction
and Discharge of Indenture.
If at any time: (a) the
Company shall have delivered to the Trustee for cancellation all Securities of a series theretofore authenticated and not delivered to
the Trustee for cancellation (other than any Securities that shall have been destroyed, lost or stolen and that shall have been replaced
or paid as provided in Section 2.07 and Securities for whose payment money or Governmental Obligations have theretofore been deposited
in trust or segregated and held in trust by the Company and thereupon repaid to the Company or discharged from such trust, as provided
in Section 11.05); or (b) all such Securities of a particular series not theretofore delivered to the Trustee for cancellation
shall have become due and payable, or are by their terms to become due and payable within one year or are to be called for redemption
within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption, and the Company shall deposit or
cause to be deposited with the Trustee as trust funds the entire amount in moneys or Governmental Obligations or a combination thereof,
sufficient in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay at maturity or upon redemption all Securities of that series not theretofore delivered to the Trustee
for cancellation, including principal (and premium, if any) and interest due or to become due to such date of maturity or date fixed for
redemption, as the case may be, and if the Company shall also pay or cause to be paid all other sums payable hereunder with respect to
such series by the Company then this Indenture shall thereupon cease to be of further effect with respect to such series except for the
provisions of Sections 2.03, 2.05, 2.07, 4.01, 4.02, 4.03, 7.10, 11.5 and 13.04, that shall survive until the date of maturity or redemption
date, as the case may be, and Sections 7.06 and 11.05, that shall survive to such date and thereafter, and the Trustee, on demand of the
Company and at the cost and expense of the Company shall execute proper instruments acknowledging satisfaction of and discharging this
Indenture with respect to such series.
Section 11.02 Discharge of Obligations.
If at any time all such Securities
of a particular series not heretofore delivered to the Trustee for cancellation or that have not become due and payable as described in
Section 11.01 shall have been paid by the Company by depositing irrevocably with the Trustee as trust funds moneys or an amount of
Governmental Obligations sufficient to pay at maturity or upon redemption all such Securities of that series not theretofore delivered
to the Trustee for cancellation, including principal (and premium, if any) and interest due or to become due to such date of maturity
or date fixed for redemption, as the case may be, and if the Company shall also pay or cause to be paid all other sums payable hereunder
by the Company with respect to such series, then after the date such moneys or Governmental Obligations, as the case may be, are deposited
with the Trustee the obligations of the Company under this Indenture with respect to such series shall cease to be of further effect except
for the provisions of Sections 2.03, 2.05, 2.07, 4,01, 4.02, 4,03, 7.06, 7.10, 11.05 and 13.04 hereof that shall survive until such Securities
shall mature and be paid.
Thereafter, Sections 7.06 and
11.05 shall survive.
Section 11.03 Deposited
Moneys to be Held in Trust.
All moneys or Governmental Obligations
deposited with the Trustee pursuant to Sections 11.01 or 11.02 shall be held in trust and shall be available for payment as due, either
directly or through any paying agent (including the Company acting as its own paying agent), to the holders of the particular series of
Securities for the payment or redemption of which such moneys or Governmental Obligations have been deposited with the Trustee.
Section 11.04 Payment
of Moneys Held by Paying Agents.
In connection with the satisfaction
and discharge of this Indenture all moneys or Governmental Obligations then held by any paying agent under the provisions of this Indenture
shall, upon demand of the Company, be paid to the Trustee and thereupon such paying agent shall be released from all further liability
with respect to such moneys or Governmental Obligations.
Section 11.05 Repayment
to Company.
Any moneys or Governmental Obligations
deposited with any paying agent or the Trustee, or then held by the Company, in trust for payment of principal of or premium, if any,
or interest on the Securities of a particular series that are not applied but remain unclaimed by the holders of such Securities for at
least two years after the date upon which the principal of (and premium, if any) or interest on such Securities shall have respectively
become due and payable, or such other shorter period set forth in applicable escheat or abandoned or unclaimed property law, shall be
repaid to the Company on May 31 of each year or upon the Company’s request or (if then held by the Company) shall be discharged
from such trust; and thereupon the paying agent and the Trustee shall be released from all further liability with respect to such moneys
or Governmental Obligations, and the holder of any of the Securities entitled to receive such payment shall thereafter, as a general creditor,
look only to the Company for the payment thereof.
ARTICLE 12
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS
Section 12.01 No Recourse.
No recourse under or upon any
obligation, covenant or agreement of this Indenture, or of any Security, or for any claim based thereon or otherwise in respect thereof,
shall be had against any incorporator, stockholder, officer or director, past, present or future as such, of the Company or of any predecessor
or successor corporation, either directly or through the Company or any such predecessor or successor corporation, whether by virtue of
any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood
that this Indenture and the obligations issued hereunder are solely corporate obligations, and that no such personal liability whatever
shall attach to, or is or shall be incurred by, the incorporators, stockholders, officers or directors as such, of the Company or of any
predecessor or successor corporation, or any of them, because of the creation of the indebtedness hereby authorized, or under or by reason
of the obligations, covenants or agreements contained in this Indenture or in any of the Securities or implied therefrom; and that any
and all such personal liability of every name and nature, either at common law or in equity or by constitution or statute, of, and any
and all such rights and claims against, every such incorporator, stockholder, officer or director as such, because of the creation of
the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or in
any of the Securities or implied therefrom, are hereby expressly waived and released as a condition of, and as a consideration for, the
execution of this Indenture and the issuance of such Securities.
ARTICLE 13
MISCELLANEOUS PROVISIONS
Section 13.01 Effect
on Successors and Assigns.
All the covenants, stipulations,
promises and agreements in this Indenture made by or on behalf of the Company shall bind its successors and assigns, whether so expressed
or not.
Section 13.02 Actions
by Successor.
Any act or proceeding by any
provision of this Indenture authorized or required to be done or performed by any board, committee or officer of the Company shall and
may be done and performed with like force and effect by the corresponding board, committee or officer of any corporation that shall at
the time be the lawful successor of the Company.
Section 13.03 Surrender
of Company Powers.
The Company by instrument in
writing executed by authority of its Board of Directors and delivered to the Trustee may surrender any of the powers reserved to the Company,
and thereupon such power so surrendered shall terminate both as to the Company and as to any successor corporation.
Section 13.04 Notices.
Except as otherwise expressly
provided herein, any notice, request or demand that by any provision of this Indenture is required or permitted to be given, made or served
by the Trustee, the Security Registrar, any paying or other agent under this Indenture or by the holders of Securities or by any other
Person pursuant to this Indenture to or on the Company may be given or served by being deposited in first class mail, postage prepaid,
addressed (until another address is filed in writing by the Company with the Trustee), as follows: . Any notice, election, request or
demand by the Company or any Securityholder or by any other Person pursuant to this Indenture to or upon the Trustee shall be deemed to
have been sufficiently given or made, for all purposes, if given or made in writing at the Corporate Trust Office of the Trustee.
Section 13.05 Governing
Law; Jury Trial Waiver.
This Indenture and each Security
shall be governed by, and construed in accordance with, the internal laws of the State of New York, except to the extent that the Trust
Indenture Act is applicable.
EACH PARTY HERETO, AND EACH HOLDER
OF A SECURITY BY ACCEPTANCE THEREOF, HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS INDENTURE.
Section 13.06 Treatment
of Securities as Debt.
It is intended that the Securities
will be treated as indebtedness and not as equity for federal income tax purposes. The provisions of this Indenture shall be interpreted
to further this intention.
Section 13.07 Certificates
and Opinions as to Conditions Precedent.
(a) Upon any application
or demand by the Company to the Trustee to take any action under any of the provisions of this Indenture, the Company shall furnish to
the Trustee an Officer’s Certificate stating that all conditions precedent provided for in this Indenture (other than the certificate
to be delivered pursuant to Section 13.12) relating to the proposed action have been complied with and, if requested, an Opinion
of Counsel stating that in the opinion of such counsel all such conditions precedent have been complied with, except that in the case
of any such application or demand as to which the furnishing of such documents is specifically required by any provision of this Indenture
relating to such particular application or demand, no additional certificate or opinion need be furnished.
(b) Each certificate
or opinion provided for in this Indenture and delivered to the Trustee with respect to compliance with a condition or covenant in this
Indenture (other than the certificate to be delivered pursuant to Section 13.12 of this Indenture or Section 314(a)(1) of
the Trust Indenture Act) shall include (i) a statement that the Person making such certificate or opinion has read such covenant
or condition; (ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based; (iii) a statement that, in the opinion of such Person, he has made such
examination or investigation as is reasonably necessary to enable him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and (iv) a statement as to whether or not, in the opinion of such Person, such condition or
covenant has been complied with.
Section 13.08 Payments
on Business Days.
Except as provided pursuant to
Section 2.01 pursuant to a Board Resolution, and set forth in an Officer’s Certificate, or established in one or more indentures
supplemental to this Indenture, in any case where the date of maturity of interest or principal of any Security or the date of redemption
of any Security shall not be a Business Day, then payment of interest or principal (and premium, if any) may be made on the next succeeding
Business Day with the same force and effect as if made on the nominal date of maturity or redemption, and no interest shall accrue for
the period after such nominal date.
Section 13.09 Conflict
with Trust Indenture Act.
If and to the extent that any
provision of this Indenture limits, qualifies or conflicts with the duties imposed by Section 318(c) of the Trust Indenture
Act, such imposed duties shall control.
Section 13.10 Counterparts.
This Indenture may be executed
in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same
instrument. The exchange of copies of this Indenture and of signature pages by facsimile or PDF transmission shall constitute effective
execution and delivery of this Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes.
Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.
Section 13.11 Separability.
In case any one or more of the
provisions contained in this Indenture or in the Securities of any series shall for any reason be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Indenture or of such Securities,
but this Indenture and such Securities shall be construed as if such invalid or illegal or unenforceable provision had never been contained
herein or therein.
Section 13.12 Compliance
Certificates.
The Company shall deliver to
the Trustee, within 120 days after the end of each fiscal year during which any Securities of any series were outstanding, an officer’s
certificate stating whether or not the signers know of any Event of Default that occurred during such fiscal year. Such certificate shall
contain a certification from the principal executive officer, principal financial officer or principal accounting officer of the Company
that a review has been conducted of the activities of the Company and the Company’s performance under this Indenture and that the
Company has complied with all conditions and covenants under this Indenture. For purposes of this Section 13.12, such compliance
shall be determined without regard to any period of grace or requirement of notice provided under this Indenture. If the officer of the
Company signing such certificate has knowledge of such an Event of Default, the certificate shall describe any such Event of Default and
its status.
Section 13.13 U.S.A.
Patriot Act.
The parties hereto acknowledge
that in accordance with Section 326 of the U.S.A. Patriot Act, the Trustee, like all financial institutions and in order to help
fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each person
or legal entity that establishes a relationship or opens an account with the Trustee. The parties to this Indenture agree that they will
provide the Trustee with such information as it may request in order for the Trustee to satisfy the requirements of the U.S.A. Patriot
Act.
Section 13.14 Force Majeure.
In no event shall the Trustee,
the Security Registrar, any paying agent or any other agent under this Indenture be responsible or liable for any failure or delay in
the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including
without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes
or acts of God, and interruptions, loss or malfunctions or utilities, communications or computer (software and hardware) services; it
being understood that the Trustee, the Security Registrar, any paying agent or any other agent under this Indenture shall use reasonable
efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.
Section 13.15 Table of
Contents; Headings.
The table of contents and headings
of the articles and sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered
a part hereof, and will not modify or restrict any of the terms or provisions hereof.
[Signature page follows]
IN WITNESS WHEREOF, the
parties hereto have caused this Indenture to be duly executed all as of the day and year first above written.
CROSS-REFERENCE TABLE(1)
| Section of Trust Indenture Act of 1939, as Amended |
|
Section of
Indenture |
| 310(a) |
|
7.09 |
| 310(b) |
|
7.08 |
| |
|
7.10 |
| 310(c) |
|
Inapplicable |
| 311(a) |
|
7.13 |
| 311(b) |
|
7.13 |
| 311(c) |
|
Inapplicable |
| 312(a) |
|
5.01 |
| |
|
5.02(a) |
| 312(b) |
|
5.02(c) |
| 312(c) |
|
5.02(c) |
| 313(a) |
|
5.04(a) |
| 313(b) |
|
5.04(b) |
| 313(c) |
|
5.04(a) |
| |
|
5.04(b) |
| 313(d) |
|
5.04(c) |
| 314(a) |
|
5.03 |
| |
|
13.12 |
| 314(b) |
|
Inapplicable |
| 314(c) |
|
13.07(a) |
| 314(d) |
|
Inapplicable |
| 314(e) |
|
13.07(b) |
| 314(f) |
|
Inapplicable |
| 315(a) |
|
7.01(a) |
| |
|
7.01(b) |
| 315(b) |
|
7.14 |
| 315(c) |
|
7.01 |
| 315(d) |
|
7.01(b) |
| 315(e) |
|
6.07 |
| 316(a) |
|
6.06 |
| |
|
8.04 |
| 316(b) |
|
6.04 |
| 316(c) |
|
8.01 |
| 317(a) |
|
6.02 |
| 317(b) |
|
4.03 |
| 318(a) |
|
13.09 |
| (1) |
This Cross-Reference Table does not constitute
part of the Indenture and shall not have any bearing on the interpretation of any of its terms or provisions. |
37
Exhibit 5.1(a)
July
18, 2024
The
Board of Directors
Data
Storage Corporation
225
Broadhollow Road, Suite 307
Melville,
New York 11747
Re:
Data Storage Corporation, Form S-3
Gentlemen:
We
have acted as special Nevada counsel to Data Storage Corporation, a Nevada corporation (the “Company”), in
connection with its filing on the date hereof with the Securities and Exchange Commission (the “Commission”)
of a registration statement on Form S-3 (as amended, the “Registration Statement”), including a base prospectus
(the “Base Prospectus”), which provides that it will be supplemented by one or more prospectus supplements
(each such prospectus supplement, together with the Base Prospectus, a “Prospectus ”), under the Securities
Act of 1933, as amended (the “Act”), relating to the registration for issue and sale by the Company of up to
$50,000,000 offering price of (i) shares of common stock, par value $0.001 per share (“Common Stock”),
including shares of Common Stock as may from time to time be issued upon conversion or exchange of Debt Securities or Preferred Stock
(each as defined below) or the exercise of Warrants or Units (each as defined below); (ii) shares of preferred stock, par value
$0.001 per share (“Preferred Stock”), in one or more series; (iii) debt securities, in one or more series
(the “Debt Securities”), which may be issued pursuant to an indenture to be dated on or about the date of the
first issuance of the Debt Securities thereunder, by and between a trustee to be selected by the Company (the “Trustee”)
and the Company, and one or more indentures supplemental thereto with respect to any particular series of Debt Securities (the “Indenture”);
(iv) warrants for the purchase of Common Stock, Preferred Stock or Debt Securities (“Warrants”) pursuant
to one or more warrant agreements (each, a “Warrant Agreement”) proposed to be entered into between the Company
and one or more warrant agents to be named in the applicable Warrant Agreement (each, a “Warrant Agent”) in
the forms to be filed as Exhibits 4.5, 4.6 and 4.7 to the Registration Statement; and (v) units consisting of one or more of the
Company’s Common Stock, Preferred Stock, Debt Securities or Warrants, or any combination of those securities (“Units”),
pursuant to one or more unit agreements (each, a “Unit Agreement”) proposed to be entered into between the
Company and one or more unit agents to be named in the applicable Unit Agreement (each, a “Unit Agent”). The
Common Stock, Preferred Stock, Debt Securities, Warrants and Units are collectively referred to herein as the “Securities.”
We
also have acted as special Nevada counsel to the Company in connection with the sale through Maxim Group LLC, as the sales agent (the
“Sales Agent”), from time to time by the Company of shares of Common Stock (the “Equity Distribution
Agreement Shares”) having a maximum aggregate offering price of up to $10,600,000 pursuant to the Registration Statement,
the Base Prospectus and the related prospectus for the sale of the Equity Distribution Agreement Shares included in the Registration
Statement (the Base Prospectus and such prospectus, collectively, the “Equity Distribution Agreement Prospectus”),
and that certain Equity Distribution Agreement dated as of July 18, 2024, by and between the Sales Agent and the Company (the “Equity
Distribution Agreement”).
As
such counsel, we have examined such matters of fact and questions of law
as we have considered appropriate for purposes of this opinion letter. With your consent, we have relied upon certificates and other assurances
of officers of the Company and others as to factual matters without having independently verified such factual matters (“Reliance
Documents”). We are opining herein as to the Nevada Revised Statutes (the “NRS”), and we express
no opinion with respect to the applicability thereto, or the effect thereon, of the federal securities laws, the laws of any other jurisdiction
or, in the case of Nevada, any other laws, or as to any matters of municipal law or the laws of any local agencies within any state.
The
Board of Directors
Data
Storage Corporation
July 18,
2024
Page 2
In
connection with this opinion letter, we have examined and relied upon the
representations and warranties as to factual matters contained in and made pursuant to the Reliance Documents, the Registration Statement,
and upon such other documents as in our judgment are necessary or appropriate to enable us to render the opinions expressed herein.
Our
knowledge of the Company and its legal and other affairs is limited by the scope of our engagement, which scope includes the delivery
of this opinion letter. We do not represent the Company with respect to all legal matters or issues. The Company may employ other independent
counsel and, to our knowledge, handles certain matters and issues without the assistance of independent counsel.
In
our examination of the foregoing, we have assumed, without independent
investigation or verification: (i) the genuineness of all signatures on all agreements, instruments and other documents submitted
to us; (ii) the legal capacity and authority of all persons or entities executing all agreements, instruments and other documents
submitted to us; (iii) the authenticity and completeness of all agreements, instruments, corporate records, certificates and other
documents submitted to us as originals; (iv) that all agreements, instruments, corporate records, certificates and other documents
submitted to us as certified, electronic, facsimile, conformed, photostatic or other copies conform to authentic originals thereof, and
that such originals are authentic and complete; (v) the due authorization, execution and delivery of all instruments, agreements,
and other documents by the parties thereto; (vi) that the statements contained in the certificates and comparable documents of public
officials, officers and representatives of the Company and other persons on which we have relied for the purposes of this letter are true
and correct; and (vii) that the officers and directors of the Company have properly exercised their fiduciary duties. We have assumed
that the issuance and sale of the Securities by the Company will not, in each case, violate or constitute a default or breach under (i) any
agreement or instrument to which the Company is subject, (ii) any law, rule or regulation to which the Company is subject, (iii) any
judicial or regulatory order or decree of any governmental authority, or (iv) any consent, approval, license, authorization or validation
of, or filing, recording or registration with any governmental authority.
We
have further assumed that: (i) the Registration Statement and any amendments thereto will have become effective under the Securities
Act and comply with all applicable laws at the time the Securities are offered or issued as contemplated by the Registration Statement;
(ii) an appropriate prospectus supplement, free writing prospectus or term sheet relating to the Securities offered thereby will
be prepared and filed with the Commission in compliance with the Act and will comply with all applicable laws at the time the Securities
are offered or issued as contemplated by the Registration Statement; (iii) all Securities will be issued and sold in compliance
with the applicable provisions of the Act and the Securities or Blue Sky Laws of various states and in the manner stated in the Registration
Statement and the applicable prospectus supplement; (iv) any purchase, underwriting, warrant, deposit, unit or similar agreement
(collectively the “Securities Agreements”) relating to the Securities being offered will be duly authorized,
executed and delivered by the Company and other parties thereto; (v) the terms of any Warrants and Units included in any Securities
offered and issued as executed and delivered are as described in the Registration Statement; and (vi) the number of shares of Common
Stock offered pursuant to the Registration Statement does not exceed, at the time of issuance, the authorized but unissued shares of
Common Stock.
Opinions
Subject
to the foregoing and the other matters set forth herein, it is our opinion that, as of the date hereof:
1. When
an issuance of Common Stock has been duly authorized by all necessary corporate action of the Company, upon issuance, delivery and payment
therefor in an amount not less than the par value thereof in the manner contemplated by the applicable Prospectus and by such corporate
action, such shares of Common Stock will be validly issued, fully paid and nonassessable. In rendering the foregoing opinion, we have
assumed that the Company will comply with all applicable notice requirements regarding uncertificated shares provided in the NRS.
The
Board of Directors
Data
Storage Corporation
July 18, 2024
Page 3
2. With
respect to the shares of any series of Preferred Stock offered by the Company (the “Offered Preferred Stock”),
when (i) a Certificate of Designations for the Offered Preferred Stock in accordance with the applicable provisions of Nevada corporate
law (the “Certificate of Designations”) has been filed with, and accepted for record by, the Secretary of State
of the State of Nevada, in the form to be filed as an exhibit to a post-effective amendment to the Registration Statement or as an exhibit
to a Current Report on Form 8-K or other applicable report under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), in the manner contemplated in the Registration Statement or any prospectus supplement relating thereto; (ii) the
terms of the Offered Preferred Stock and of their issuance and sale have been duly established and are then in conformity with the Articles
of Incorporation, including the Certificate of Designations relating to the Offered Preferred Stock, and the Bylaws so as not to violate
any applicable law, the Articles of Incorporation or the Bylaws or result in a default under or breach of any agreement or instrument
binding upon the Company and so as to comply with any requirement or restriction imposed by any court or other governmental authority
having jurisdiction over the Company; (iii) if the Offered Preferred Stock is to be certificated, certificates in the form required under
Nevada corporate law representing the shares of Offered Preferred Stock have been duly executed and countersigned and (iv) the shares
of Offered Preferred Stock are registered in the Company’s share registry and delivered upon payment of the agreed-upon consideration
therefor, the shares of Offered Preferred Stock, when issued and sold or otherwise distributed in accordance with the applicable underwriting
agreement, if any, or any other duly authorized, executed and delivered valid and binding agreement, will be duly authorized, validly
issued, fully paid and non-assessable, provided that the consideration therefor is not less than $0.001 per share of Preferred Stock.
3. When
the Equity Distribution Agreement Shares shall have been duly registered on the books of the transfer agent and registrar therefor in
the name or on behalf of the purchasers, and have been issued by the Company against payment therefor (not less than par value) in the
circumstances contemplated by the Equity Distribution Agreement, the issuance and sale of the Equity Distribution Agreement Shares will
have been duly authorized by all necessary corporate action of the Company, and the Equity Distribution Agreement Shares will be validly
issued, fully paid and nonassessable. In rendering the foregoing opinion, we have assumed that (i) the Company will comply with all applicable
notice requirements regarding uncertificated shares provided in the NRS and (ii) upon the issuance of any of the Equity Distribution
Agreement Shares, the total number of shares of Common Stock issued and outstanding will not exceed the total number of shares of Common
Stock that the Company is then authorized to issue under its articles of incorporation, as amended and restated as of the date hereof.
This
opinion is given as of the date hereof. We assume no obligation to advise you of changes in law or facts that may hereafter be brought
to our attention.
This
opinion letter is for your benefit in connection with the Registration Statement and may be relied upon by you and by persons entitled
to rely upon it pursuant to the applicable provisions of the Act. We consent to your filing this opinion letter as an exhibit to the
Registration Statement and to the reference to our firm contained in each of the Prospectus under the heading “Legal Matters.”
We further consent to the incorporation by reference of this letter and consent into any registration statement or post-effective amendment
to the Registration Statement filed pursuant to Rule 462(b) under the Act with respect to the Securities. In giving such consent,
we do not thereby 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 thereunder.
| |
Very truly yours, |
| |
|
| |
PARSONS BEHLE & LATIMER |
3
Exhibit 5.1(b)
1271 Avenue of the Americas |New York,
NY 10020
blankrome.com
July 18, 2024
The Board of Directors
Data Storage Corporation
225 Broadhollow Road, Suite 307
Melville, New York 11747
| Re: |
Data Storage Corporation |
Ladies and Gentlemen:
We have acted as counsel to Data
Storage Corporation, a Nevada corporation (the “Company”), in connection with its filing on the date hereof
with the Securities and Exchange Commission (the “Commission”) of a registration statement on Form S-3
(as amended, the “Registration Statement”), including a base prospectus (the “Base Prospectus”),
which provides that it will be supplemented by one or more prospectus supplements (each such prospectus supplement, together with the
Base Prospectus, a “Prospectus”), under the Securities Act of 1933, as amended (the “Securities
Act”). The Registration Statement relates to, among other things, the offer and sale from time to time, pursuant to Rule 415
of the General Rules and Regulations promulgated under the Securities Act, of up to $50,000,000 of any combination of the following
securities of the Company (the “Registered Securities”): (i) shares of common stock, par value $0.001 per
share (“Common Stock”), including shares of Common Stock as may from time to time be issued upon conversion
or exchange of Preferred Stock or Debt Securities (each as defined below) or the exercise of Warrants or Units (each as defined below);
(ii) shares of preferred stock, par value $0.001 per share (“Preferred Stock”), in one or more series;
(iii) debt securities, in one or more series (the “Debt Securities”), which may be issued pursuant to an
indenture to be dated on or about the date of the first issuance of the Debt Securities thereunder, by and between a trustee to be selected
by the Company (the “Trustee”) and the Company, in the form filed as Exhibit 4.2 to the Registration Statement
and one or more indentures supplemental thereto with respect to any particular series of Debt Securities (the “Indenture”);
(iv) warrants for the purchase of Common Stock, Preferred Stock or Debt Securities (“Warrants”) pursuant
to one or more warrant agreements (each, a “Warrant Agreement”) proposed to be entered into between the Company
and one or more warrant agents to be named in the applicable Warrant Agreement (each, a “Warrant Agent”) in
the forms to be filed as Exhibits 4.4, 4.5 and 4.6 to the Registration Statement; and (v) units consisting of one or more of the
Company’s Common Stock, Preferred Stock, Debt Securities or Warrants, or any combination of those securities (“Units”),
pursuant to one or more unit agreements (each, a “Unit Agreement”) proposed to be entered into between the Company
and one or more unit agents to be named in the applicable Unit Agreement (each, a “Unit Agent”). The Common
Stock, Preferred Stock, Debt Securities, Warrants and Units are collectively referred to herein as the “Securities.”
This opinion is being furnished in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act.
We are also acting as counsel
for the Company in connection with the Equity Distribution Agreement prospectus included in the Registration Statement (the “Equity
Distribution Agreement ATM Prospectus”) relating to the issuance and sale of shares of Common Stock having an aggregate
offering price of up to $10,600,000 (the “Equity Distribution Agreement Shares”) under that certain Equity Distribution
Agreement dated as of July 18, 2024, by and between Maxim Group LLC, as the sales agent, and the Company (the “Equity Distribution
Agreement”).
Data Storage Corporation
July 18, 2024
Page 2
In rendering this opinion, we
have assumed, without inquiry, (i) the authenticity of all documents submitted to us as originals; (ii) the conformity to the
original documents of all documents submitted to us as facsimile, electronic, certified or photostatic copies, and the authenticity of
the originals of such copies; (iii) the legal capacity of all natural persons and the genuineness of all signatures on the Registration
Statement and all documents submitted to us; and (iv) that the books and records of the Company are maintained in accordance with
proper corporate procedures.
In making our examination of executed documents or documents to be executed,
we have assumed that the parties thereto had or will have the power, corporate or other, to enter into and perform all obligations thereunder
and we have also assumed the due authorization by all requisite action, corporate or other, and execution and delivery by such parties
of such documents and (except to the extent we have opined on such matters below) the validity and binding effect on such parties. In
addition, we have assumed that (i) a purchase, underwriting or similar agreement with respect to any Registered Securities will have
been duly authorized and validly executed and delivered by the Company and the other parties thereto; (ii) the Registration Statement
and any amendments thereto will have become effective and comply with all applicable laws at the time the Registered Securities are offered
or issued as contemplated by the Registration Statement and no stop order suspending its effectiveness will have been issued and remain
in effect; (iii) all Registered Securities will be issued and sold in compliance with applicable federal and state securities laws
and in the manner stated in the Registration Statement and the applicable prospectus supplement; (iv) a prospectus supplement or
term sheet will have been prepared and filed with the Commission describing the Registered Securities offered thereby and will comply
at all relevant times with all applicable laws; (v) the Company will have obtained any legally required consents, approvals, authorizations
and other orders of the Commission and any other regulatory authorities necessary (x) to issue and sell the Registered Securities
being offered, and (y) to execute and deliver the applicable purchase, underwriting or similar agreement, or other applicable operative
document; (vi) any securities issuable upon conversion, exchange, redemption or exercise of any Registered Securities being offered
will be duly authorized, created and, if appropriate, reserved for issuance upon such conversion, exchange, redemption or exercise and,
with respect to shares of Common Stock or Preferred Stock offered, there will be sufficient shares of Common Stock or Preferred Stock,
as applicable, authorized under the Company’s Articles of Incorporation, as amended (the “Articles of Incorporation”),
and not otherwise reserved for issuance; (vii) at the time of issuance of the Registered Securities, the Company validly exists and
is duly qualified and in good standing under the laws of its jurisdiction of incorporation, and has the necessary corporate power for
such issuance; (viii) at the time of issuance of the Registered Securities, the Articles of Incorporation and then-operative by-laws,
including the current Amended By-Laws, as amended (the “By-Laws”) of the Company are in full force and effect
and have not been amended, restated, supplemented or otherwise altered, and there has been no authorization of any such amendment, restatement,
supplement or other alteration, in either case since the date hereof; and (ix) the terms, execution and delivery of the Registered
Securities (x) do not result in breaches of, or defaults under, agreements or instruments to which the Company is bound or violations
of applicable statutes, rules, regulations or court or governmental orders, and (y) comply with any applicable requirement or restriction
imposed by any court or governmental body having jurisdiction over the Company. As to any facts material to the opinions expressed herein
that we have not independently established or verified, we have relied upon, and assumed the accuracy of, statements and representations
of officers and other representatives of the Company and others.
In connection with the Equity
Distribution Agreement Shares, we have assumed (i) that each sale of Equity Distribution Agreement Shares will be duly authorized
by the Board of Directors of the Company, a duly authorized committee thereof or a person or body pursuant to an authorization granted
in accordance with the Nevada Revised Statutes, (ii) at the time of issuance of any Equity Distribution Agreement Shares, there shall
be a sufficient number of duly authorized and unissued shares of Common Stock to accommodate the issuance of the Equity Distribution Agreement
Shares, and (iii) that the price at which the Equity Distribution Agreement Shares are sold will equal or exceed the par value of
the Common Stock. We express no opinion to the extent that future issuances of securities of the Company, anti-dilution adjustments to
outstanding securities of the Company and/or other matters cause the number of shares of the Common Stock available for issuance under
the Equity Distribution Agreement to exceed the number of shares of the Common Stock available for issuance by the Company.
Data Storage Corporation
July 18, 2024
Page 3
Based upon the foregoing and subject
to the limitations, qualifications, exceptions and assumptions stated herein, we are of the opinion that:
1. With respect to any series
of Debt Securities offered by the Company (the “Offered Debt Securities”), when (i) the Indenture has been
qualified under the Trust Indenture Act of 1939, as amended (the “TIA”); (ii) the terms of the Offered
Debt Securities and of their issuance and sale have been duly established in conformity with the Indenture and any supplemental indenture
relating to such Offered Debt Securities so as not to violate any applicable law, the Articles of Incorporation or the By-laws, or result
in a default under or breach of any agreement or instrument binding upon the Company and so as to comply with any requirement or restriction
imposed by any court or other governmental authority having jurisdiction over the Company and (iii) the Offered Debt Securities,
in a form compliant with the Indenture and any supplemental indenture relating to such Offered Debt Securities and to be filed as an exhibit
to a post-effective amendment to the Registration Statement or as an exhibit to a Current Report on Form 8-K or other applicable
report under the Exchange Act in the manner contemplated in the Registration Statement or any prospectus supplement relating thereto,
have been duly executed and authenticated in accordance with the provisions of the Indenture and any supplemental indenture relating to
such Offered Debt Securities and delivered to the purchasers thereof upon payment of the agreed-upon consideration therefor, the Offered
Debt Securities, when issued and sold or otherwise distributed in accordance with the Indenture and any supplemental indenture relating
to such Offered Debt Securities and the applicable underwriting agreement, if any, or any other duly authorized, executed and delivered
valid and binding agreement, will be valid and binding obligations of the Company, enforceable against the Company in accordance with
their respective terms under the laws of the State of New York.
2. With respect to any series
of Warrants offered by the Company (the “Offered Warrants”), when (i) a Warrant Agreement relating to the
Offered Warrants has been duly authorized, executed and delivered by the Company and the other parties thereto; (ii) the terms of
the Offered Warrants and their issuance and sale have been duly established and are then in conformity with the applicable Warrant Agreement
so as not to violate any applicable law, the Articles of Incorporation or the By-Laws or result in a default under or breach of any agreement
or instrument binding upon the Company and so as to comply with any requirement or restriction imposed by any court or governmental body
having jurisdiction over the Company and (iii) the Offered Warrants have been duly executed, delivered, countersigned, issued and
sold in accordance with the provisions of the applicable Warrant Agreement to be filed as an exhibit to a post-effective amendment to
the Registration Statement or as an exhibit to a Current Report on Form 8-K or other applicable report under the Exchange Act in
the manner contemplated in the Registration Statement or any prospectus supplement relating thereto, the Offered Warrants, when issued
and sold or otherwise distributed in accordance with the applicable Warrant Agreement and the applicable underwriting agreement, if any,
or any other duly authorized, executed and delivered valid and binding purchase or agency agreement, will be valid and binding obligations
of the Company, enforceable against the Company in accordance with their respective terms under the laws of the State of New York.
3. With respect to any Units offered
by the Company (the “Offered Units”), when (i) a Unit Agreement relating to the Offered Units has been
duly authorized, executed and delivered by the Company and the other parties thereto; (ii) the terms of the Offered Units and of
their issuance and sale have been duly established and are then in conformity with the applicable Unit Agreement of which the Offered
Units are a component so as not to violate any applicable law, the Articles of Incorporation or the By-Laws, or result in a default under
or breach of any agreement or instrument binding upon the Company, and so as to comply with any requirement or restriction imposed by
any court or governmental body having jurisdiction over the Company and (iii) the Offered Units have been duly executed, delivered,
countersigned, issued and sold in accordance with the provisions of the applicable Unit Agreement to be filed as an exhibit to a post-effective
amendment to the Registration Statement or as an exhibit to a Current Report on Form 8-K or other applicable report under the Exchange
Act in the manner contemplated in the Registration Statement or any prospectus supplement relating thereto, the Offered Units, when issued
and sold or otherwise distributed in accordance with the applicable Unit Agreement and the applicable underwriting agreement, if any,
or any other duly authorized, executed and delivered valid and binding agreement, will be duly authorized and validly issued and will
be valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms under the laws
of the State of New York.
Data Storage Corporation
July 18, 2024
Page 4
In addition to the assumptions,
comments, qualifications, limitations and exceptions set forth above, the opinions set forth herein are further limited by, subject to
and based upon the following:
| |
a) |
Our opinions herein are
expressed solely with respect to the applicable laws of the State of New York that, in our experience, are normally applicable to
transactions of the type contemplated by the Registration Statement. The opinion set forth herein related to the Offered Units assumes
that such Offered Units are governed by New York law. The opinions set forth herein are made as of the date hereof and are subject
to, and may be limited by, future changes in the factual matters set forth herein, and we undertake no duty to advise you of the
same that may occur after the Registration Statement becomes effective. The opinions expressed herein are based upon the law in effect
(and published or otherwise generally available) on the date hereof, which laws are subject to change with possible retroactive effect,
and we assume no obligation to revise or supplement these opinions should such law be changed by legislative action, judicial decision
or otherwise after the Registration Statement becomes effective. In rendering our opinions, we have not considered, and hereby disclaim
any opinion as to, the application or impact of any laws, cases, decisions, rules or regulations of any other jurisdiction,
court or administrative agency. |
| |
b) |
Our opinions set forth
above are subject to and may be limited by (i) applicable bankruptcy, reorganization, insolvency, conservatorship, moratorium,
fraudulent conveyance, debtor and creditor, and similar laws which relate to or affect creditors’ rights generally, and (ii) general
principles of equity (including, without limitation, concepts of materiality, reasonableness, impossibility of performance, good
faith and fair dealing) regardless of whether considered in a proceeding in equity or at law. |
| |
c) |
Our opinions are subject
to the qualification that the availability of specific performance, an injunction or other equitable remedies is subject to the discretion
of the court before which the request is brought. |
| |
d) |
You have informed us that
you intend to issue the Registered Securities from time to time on a delayed or continuous basis, and this opinion is limited to
the laws, including the rules and regulations, as in effect on the date hereof. We understand that prior to issuing any Registered
Securities you will afford us an opportunity to review the operative documents pursuant to which such Registered Securities are to
be issued (including the applicable prospectus supplement) and will file such supplement or amendment to this opinion (if any) as
we may reasonably consider necessary or appropriate by reason of the terms of such Registered Securities. |
We consent to the use of this
opinion as an exhibit to the Registration Statement. We also consent to any and all references to us in the prospectus which is part of
said Registration Statement. In giving this consent, we do not thereby admit that we are within the category of persons whose consent
is required under Section 7 of the Securities Act or the rules and regulations of the Commission promulgated thereunder. This
opinion is strictly limited to the matters stated herein and no other or more extensive opinion is intended, implied or to be inferred
beyond the matters expressly stated herein. This opinion letter is not a guaranty, nor may one be inferred or implied.
| |
Very truly yours, |
| |
|
| |
/s/ BLANK ROME |
| |
BLANK ROME LLP |
4
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
We consent to the incorporation by reference in the
Registration Statement (Form S-3) of our report dated March 28, 2024, with respect to the audited financial statements of Data Storage
Corporation, included in its Annual Report on Form 10-K for the years ended December 31, 2023 and December 31, 2022.
We also consent to the reference to us under the caption
“Experts” in the Prospectus.
/s/ Rosenberg Rich Baker Berman, P.A.
Somerset, New Jersey
July 18, 2024
Exhibit 107
Calculation of Filing Fee Tables
Form S-3
(Form Type)
DATA
STORAGE CORPORATION
(Exact name of Registrant as specified in its charter)
Table 1: Newly Registered and Carry Forward Securities
| |
|
Security
Type |
|
Security Class
Title |
|
Fee
Calculation
or Carry
Forward
Rule |
|
Amount
Registered |
|
Proposed
Maximum
Offering
Price Per
Unit |
|
Maximum
Aggregate
Offering Price |
|
Fee Rate |
|
Amount of
Registration
Fee |
|
| Newly Registered Securities |
| Fees to Be Paid |
|
Equity |
|
|
Common Stock, par value $0.001 per share(1) |
|
|
Rule 457(o) |
|
|
(2 |
) |
|
|
(3 |
) |
|
|
(3 |
) |
|
|
— |
|
|
|
— |
|
|
| |
|
Equity |
|
|
Preferred Stock, par value $0.001 per share(1) |
|
|
Rule 457(o) |
|
|
(2 |
) |
|
|
(3 |
) |
|
|
(3 |
) |
|
|
— |
|
|
|
— |
|
|
| |
|
Debt |
|
|
Debt Securities(1) |
|
|
Rule 457(o) |
|
|
(2 |
) |
|
|
(3 |
) |
|
|
(3 |
) |
|
|
— |
|
|
|
— |
|
|
| |
|
Other |
|
|
Warrants(1) |
|
|
Rule 457(o) |
|
|
(2 |
) |
|
|
(3 |
) |
|
|
(3 |
) |
|
|
— |
|
|
|
— |
|
|
| |
|
Other |
|
|
Units(1) |
|
|
Rule 457(o) |
|
|
(2 |
) |
|
|
(3 |
) |
|
|
(3 |
) |
|
|
— |
|
|
|
— |
|
|
| |
|
Unallocated (Universal) Shelf |
|
|
— |
|
|
Rule 457(o) |
|
|
(2 |
) |
|
|
(3 |
) |
|
$ |
50,000,000 |
(3) |
|
|
0.0001476 |
|
|
$ |
7,380 |
(4) |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
Total Offering Amounts |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
Total Fees Previously Paid |
|
|
|
|
|
|
|
|
|
$ |
— |
|
|
| |
|
|
|
|
|
|
|
Total Fee Offsets |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
Net Fee Due |
|
|
|
|
|
|
|
|
|
$ |
7,380 |
|
|
| |
(1) |
Separate consideration
may or may not be received for securities that are issuable upon the conversion or exercise of, or in exchange for, other securities
offered hereby. |
| |
(2) |
There are being registered
hereunder such indeterminate number of the securities of each identified class being registered as may be sold by the registrant
from time to time at indeterminate prices, with the maximum aggregate public offering price not to exceed $50,000,000. Any securities
registered hereunder may be sold separately or together with other securities registered hereunder. |
| |
(3) |
The proposed maximum per
security and aggregate offering prices per class of securities will be determined from time to time by the Registrant in connection
with the issuance by the Registrant of the securities registered hereunder and is not specified as to each class of security pursuant
to Instruction 2.A.iii.b of the Instructions to the Calculation of Filing Fee Tables and related disclosure on Form S-3. |
| |
(4) |
Calculated pursuant to
Rule 457(o) under the Securities Act. |
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