Document:

Exhibit 10.2

 

EXECUTION VERSION

 

PURCHASE AGREEMENT

 

PURCHASE AGREEMENT, dated May 10, 2018 (this “Agreement”), by and between the seller listed on Schedule I hereto, as seller (the “Seller”), and Virtu Financial, Inc., a Delaware corporation, as purchaser (the “Purchaser”).

 

WHEREAS, the Board of Directors of the Purchaser (the “Board”) has determined to effect an underwritten public offering (the “Offering”) of the Purchaser’s Class A common stock, par value $0.00001 per share (the “Class A Common Stock”); and

 

WHEREAS, in connection with the consummation of the Offering, the Seller wishes to sell to the Purchaser, and the Purchaser wishes to purchase from the Seller, the number of non-voting common interest units (“Virtu Financial Units”) of Virtu Financial LLC, a Delaware limited liability company, and shares of the Purchaser’s Class D common stock, par value $0.00001 per share (the “Class D Common Stock”), set forth opposite the Seller’s name on Schedule I hereto;

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE 1

 

DEFINITIONS

 

1.1                               Definitions.  As used in this Agreement, and unless the context requires a different meaning, the following terms shall have the meanings set forth below:

 

“Additional Closing” means each closing of the purchase of Additional Purchased Paired Interests.

 

“Additional Offering Closing” means any additional closing of the sale of Class A Common Stock in the Offering pursuant to the exercise of the underwriters’ option to purchase additional shares of Class A Common Stock, which closing may occur on the same date and time as the Offering Closing.

 

“Additional Purchased Paired Interests” means the number of Paired Interests to be sold by the Seller at any Additional Closing (determined by multiplying (i) the number of Paired Interests set forth opposite the Seller’s name under the column entitled “Additional Purchased Paired Interests” on Schedule I hereto by (ii) (a) the total number of shares of Class A Common Stock to be sold in the related Additional Closing divided by (b) the total number of shares of Class A Common Stock that may be sold pursuant to the exercise of the underwriters’ option to purchase additional shares of Class A Common Stock (rounded up or down to the next whole number by the Purchaser in its sole discretion)).

 

 

“Closing” means each Additional Closing together with the Initial Closing.

 

“Commission” means the Securities and Exchange Commission or any similar agency then having jurisdiction to enforce the Securities Act.

 

“Discounted Price” means (i) the Offering Price less (ii) the Per Share Underwriting Discount.

 

“Governmental Authority” means the government of any nation, state, city, locality or other political subdivision of any thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

 

“Initial Closing” means the closing of the purchase of the Initial Purchased Paired Interests.

 

“Initial Purchased Paired Interests” means the number of Paired Interests set forth opposite the Seller’s name under the column entitled “Initial Purchased Paired Interests” on Schedule I hereto.

 

“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment, encumbrance, lien (statutory or other) or other security interest of any kind or nature whatsoever.

 

“Offering Closing” means the initial closing of the sale of Class A Common Stock in the Offering.

 

“Offering Price” means the per share public offering price for the Class A Common Stock in the Offering.

 

“Paired Interest” or “Paired Interests” means one or more Virtu Financial Units together with an equal number of shares of Class D Common Stock.

 

“Per Share Underwriting Discount” means the underwriting discount per share paid to the underwriters in the Offering.

 

“Person” means any individual, firm, corporation, partnership, limited liability company, trust, incorporated or unincorporated association, joint venture, joint stock company, Governmental Authority or other entity of any kind.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.

 

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ARTICLE 2

 

PURCHASE AND SALE OF PAIRED INTERESTS

 

2.1                               Purchase and Sale.

 

(a)                                 Subject to the terms herein set forth, at the Initial Closing, (i) the Seller agrees (severally and not jointly) to sell, convey, assign and transfer to the Purchaser the Initial Purchased Paired Interests, and the Purchaser agrees to purchase such Initial Purchased Paired Interests from the Seller for a purchase price equal to the Offering Price per Initial Purchased Paired Interest and (ii) the Seller shall be responsible for the Per Share Underwriting Discount with respect to each Initial Purchased Paired Interest sold, conveyed, assigned and transferred by the Seller.  For administrative convenience, the net amount per Initial Purchased Paired Interest paid to the Seller by the Purchaser shall be the Discounted Price.

 

(b)                                 Subject to the terms herein set forth, at each Additional Closing, (i) the Seller agrees to sell, convey, assign and transfer to the Purchaser the Additional Purchased Paired Interests, and the Purchaser agrees to purchase such Additional Purchased Paired Interests from the Seller for a purchase price equal to the Offering Price per Additional Purchased Paired Interest and (ii) the Seller shall be responsible for the Per Share Underwriting Discount with respect to each Additional Purchased Paired Interest sold, conveyed, assigned and transferred by the Seller.  For administrative convenience, the net amount per Additional Purchased Paired Interest paid to the Seller by the Purchaser shall be the Discounted Price.

 

2.2                               Closing.

 

(a)                                 The Initial Closing shall occur at the offices of Paul, Weiss, Rifkind, Wharton & Garrison LLP, 1285 Avenue of the Americas, New York, New York, 10019 immediately following the Offering Closing.

 

(b)                                 Each Additional Closing shall occur at the offices of Paul, Weiss, Rifkind, Wharton & Garrison LLP, 1285 Avenue of the Americas, New York, New York, 10019 immediately following the Offering Closing.

 

(c)                                  At each Closing, (i) the Purchaser shall deliver to the Seller the Discounted Price for each Initial Purchased Paired Interest or Additional Purchased Paired Interest, as applicable, being purchased by the Purchaser from the Seller as set forth in Section 2.1, by wire transfer of immediately available funds to a bank account designated in writing by the Seller and (ii) the Seller shall deliver to the Purchaser (A) a duly endorsed instrument of assignment with respect to the Virtu Financial Units included in the Initial Purchased Paired Interests or the Additional Purchased Paired Interests being sold at such Closing in substantially the form attached hereto as Exhibit A (a “Virtu Financial Unit Assignment Agreement”) and (B) a duly executed and notarized, irrevocable Power of Attorney in substantially the form attached hereto as Exhibit B (the “Power of Attorney”) appointing certain officers of the Purchaser the Seller’s true and

 

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lawful attorney-in-fact to: (1) execute for and on behalf of the Seller a Transfer of Ownership with W-9 Form (the “Transfer of Ownership”) in connection with the transfer of Class D Common Stock by the Seller to the Company pursuant to this Agreement and (2) do and perform any and all acts for and on behalf of the Seller that may be necessary or desirable to complete and execute any such Transfer of Ownership.

 

2.3                               Conditions to Closing.

 

(a)                                 The obligations of the Purchaser and the Seller to be performed at the Initial Closing shall be conditioned upon the simultaneous or prior completion of the Offering Closing, and the obligations of the Purchaser and the Seller to be performed at any Additional shall be conditioned upon the simultaneous or prior completion of the applicable Additional Offering Closing.

 

(b)                                 The obligations of the Purchaser to be performed at any Closing shall be subject to the condition that the representations and warranties set forth in Article 3 shall be true and correct as of such Closing as if then made.

 

(c)                                  The obligations of each Seller to be performed at any Closing shall be subject to the condition that the representations and warranties of Purchaser set forth in Article 4 shall be true and correct as of such Closing as if then made.

 

ARTICLE 3

 

REPRESENTATIONS AND WARRANTIES OF THE SELLER

 

The Seller represents, warrants, and agrees as of the date hereof as follows:

 

3.1                               Capacity; Authority; Execution and Delivery; Enforceability.  The Seller has the full power and authority to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby.  The execution and delivery by the Seller of this Agreement and the consummation by the Seller of the transactions contemplated hereby have been duly authorized by all necessary action on the part of the Seller and no other proceedings on the part of the Seller are necessary to approve this Agreement and to consummate the transactions contemplated hereby. The Seller has duly executed and delivered this Agreement (and will duly execute and deliver any Virtu Financial Unit Assignment Agreement and Power of Attorney), and, assuming due execution and delivery by the Purchaser, each such agreement constitutes or will constitute the legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability.

 

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3.2                               Title.  The Seller owns beneficially and of record and has full power and authority to convey, free and clear of any Liens, the Virtu Financial Units and shares of Class D Common Stock included in the Initial Purchased Paired Interests or Additional Purchased Paired Interests, as applicable, set forth opposite its name on Schedule I hereto (subject to any transfer restrictions of general applicability as may be provided under the Securities Act and the “blue sky” laws of the various states of the United States).  Assuming the Purchaser has the requisite power and authority to be the lawful owner of the Virtu Financial Units and shares of Class D Common Stock, upon the Seller’s receipt of the applicable purchase price and the transfer of the Initial Purchased Paired Interests or Additional Purchased Paired Interests at the Initial Closing or any Additional Closing, as applicable, good, valid and marketable title to the Virtu Financial Units and shares of Class D Common Stock included in the Initial Purchased Paired Interests or any Additional Purchased Paired Interests, as applicable, will pass to the Purchaser, free and clear of any Liens.

 

3.3                               No Conflicts.  Neither the execution nor the delivery of this Agreement (and any Virtu Financial Unit Assignment Agreement and Power of Attorney) nor the consummation of the transactions contemplated hereby will (i) result in any breach of or constitute a default under any term of any material agreement, mortgage, indenture, license, permit, lease, or other instrument, or (ii) conflict with or result in a violation of any judgment, decree, order, law, or regulation by which the Seller is bound.

 

ARTICLE 4

 

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

 

The Purchaser makes the following representations and warranties for the benefit of the Seller as of the date hereof:

 

4.1                               Organization, Standing and Power.  The Purchaser is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized.

 

4.2                               Authority; Execution and Delivery; Enforceability.  The Purchaser has the full power and authority to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby.  The execution and delivery by the Purchaser of this Agreement and the consummation by the Purchaser of the transactions contemplated hereby have been duly authorized by all necessary action on the part of the Purchaser and no other proceedings on the part of the Purchaser are necessary to approve this Agreement and to consummate the transactions contemplated hereby.  The Purchaser has duly executed and delivered this Agreement, and, assuming due execution and delivery by the Seller, this Agreement constitutes the legal, valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability.

 

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4.3                               No Conflicts.  Neither the execution nor the delivery of this Agreement nor the consummation of the transactions contemplated hereby will (i) result in any breach of or constitute a default under any term of any material agreement, mortgage, indenture, license, permit, lease, or other instrument or (ii) conflict with or result in a violation of any judgment, decree, order, law or regulation by which the Purchaser is bound.

 

ARTICLE 5

 

MISCELLANEOUS

 

5.1                               Notices.  All notices or other communication required or permitted hereunder shall be in writing and shall be delivered personally, telecopied or sent by certified, registered or express mail, postage prepaid.  Any such notice shall be deemed given when so delivered personally, telecopied or sent by certified, registered or express mail, as follows:

 

(a)                                 If to the Seller, at the address specified for the Seller on the member schedule of Virtu Financial or to such other address as the Seller may hereafter specify to the Purchaser for the purpose by notice:

 

(b)                                 If to the Purchaser, to:

 

Virtu Financial, Inc.

300 Vesey Street
 New York, NY 10282
 Telephone:  (212) 418-0100

Facsimile: (212) 418 0100
 Attention:  General Counsel

 

With a copy to (which shall not constitute actual or constructive notice):

 

Paul, Weiss, Rifkind, Wharton & Garrison LLP
 1285 Avenue of the Americas
 New York, NY  10019-6064
 Telephone:  (212) 373-3000
 Facsimile:  (212) 757-3990
 Attention:  John C. Kennedy, Esq.

 

Any party may by notice given in accordance with this Section 5.1 designate another address or person for receipt of notices hereunder.

 

5.2                               Successors and Assigns.  This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of the parties hereto.  No Person other than the parties hereto and their successors and permitted assigns is intended

 

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to be a beneficiary of this Agreement.  No party hereto may assign its rights under this Agreement without the prior written consent of the other party hereto.

 

5.3                               Amendment and Waiver.

 

(a)                                 No failure or delay on the part of the Seller or the Purchaser in exercising any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy.  The remedies provided for herein are cumulative and are not exclusive of any remedies that may be available to the Seller or the Purchaser at law, in equity or otherwise.

 

(b)                                 Any amendment, supplement or modification of or to any provision of this Agreement and any waiver of any provision of this Agreement shall be effective only if it is made or given in writing and signed by the Seller and the Purchaser.

 

5.4                               Counterparts.  This Agreement may be executed in any number of counterparts and in separate counterparts, all of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.  Facsimile signatures or signatures received as a .pdf attachment to electronic mail shall be treated as original signatures for all purposes of this Agreement.  This Agreement shall become effective when, and only when, each party hereto shall have received a counterpart signed by all of the other parties hereto.

 

5.5                               Headings.  The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

5.6                               Governing Law.  This agreement shall be governed by and construed in accordance with the laws of the State of Delaware.  The parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this agreement or the transactions contemplated hereby shall be brought in the Delaware chancery court or, if such court shall not have jurisdiction, any federal court located in the State of Delaware or other Delaware state court, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.  Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court.

 

5.7                               Severability.  If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not

 

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be in any way impaired, unless the provisions held invalid, illegal or unenforceable shall substantially impair the benefits of the remaining provisions hereof.

 

5.8                               Entire Agreement.  This Agreement, together with the schedules and exhibits hereto, are intended by the parties as a final expression of their agreement and are intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and therein.  There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein or therein.  This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

 

5.9                               Further Assurances.  Each of the parties shall execute such documents and perform such further acts (including, without limitation, obtaining any consents, exemptions, authorizations, or other actions by, or giving any notices to, or making any filings with, any Governmental Authority or any other Person) as may be reasonably required or desirable to carry out or to perform the provisions of this Agreement.

 

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their respective officers hereunto duly authorized as of the date first above written.

 

	
 
    	
TJMT   HOLDINGS LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Michael Viola
    
	
 
    	
 
    	
Name:
    	
Michael   Viola
    
	
 
    	
 
    	
Title:
    	
Class B   Managing Member
    

 

[Signature Page to Purchase Agreement]

 

 

	
 
    	
VIRTU   FINANCIAL, INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Douglas A. Cifu
    
	
 
    	
 
    	
Name:
    	
Douglas   A. Cifu
    
	
 
    	
 
    	
Title:
    	
Chief   Executive Officer
    

 

[Signature Page to Purchase Agreement]

 

 

Schedule I

 

Initial Purchased Paired Interests.

 

	
Seller
    	
 
    	
Initial
   Purchased
   Paired
   Interests
    	
 
    
	
TJMT Holdings   LLC
    	
 
    	
8,718,750
    	
 
    

 

 

Additional Purchased Paired Interests.

 

	
Seller
    	
 
    	
Additional
   Purchased Paired
   Interests
    	
 
    
	
TJMT Holdings   LLC
    	
 
    	
1,800,000
    	
 
    

 

 

EXHIBIT A

 

FORM OF ASSIGNMENT AGREEMENT

 

ASSIGNMENT AGREEMENT (this “Agreement”), dated as of May [·], 2018, by and between [·] (the “Seller”), Virtu Financial, Inc., a Delaware corporation (the “Purchaser”), and Virtu Financial LLC, a Delaware limited liability company (“Virtu Financial”).  Each capitalized term used herein without definition shall have the meaning assigned to it in the Purchase Agreement (as defined below).

 

RECITALS

 

WHEREAS, the Purchaser and the Seller entered into a Purchase Agreement, dated as of May [·], 2018 (the “Purchase Agreement”), pursuant to which each Seller agreed to sell, assign, convey and transfer Virtu Financial Units to the Purchaser; and

 

WHEREAS, the Purchaser has agreed to purchase such Virtu Financial Units from each Seller pursuant to the Purchase Agreement.

 

NOW, THEREFORE, in consideration of the mutual agreements contained herein and in the Purchase Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement agree as follows:

 

1.                                      Transfer.  Each Seller hereby sells, assigns, conveys and transfers to the Purchaser the number of Virtu Financial Units set forth below its signature on the signature pages hereto.

 

2.                                      Acknowledgement of Sale by Virtu Financial.  Virtu Financial hereby acknowledges the sale, assignment, conveyance and transfer by each Seller to the Purchaser of the number of Virtu Financial Units set forth under the Seller’s signature hereto and shall cause the member schedule to its Third Amended and Restated Limited Liability Company Agreement to be amended to reflect the sale and transfer of Virtu Financial Units as contemplated in the Purchase Agreement and herein.

 

3.                                      Governing Law.  This agreement shall be governed by and construed in accordance with the laws of the State of Delaware.  The parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this agreement or the transactions contemplated hereby shall be brought in the Delaware chancery court or, if such court shall not have jurisdiction, any federal court located in the State of Delaware or other Delaware state court, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.  Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court.

 

 

4.                                      Headings.  The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

5.                                      Further Assurances.  Each of the parties shall execute such documents and perform such further acts (including, without limitation, obtaining any consents, exemptions, authorizations, or other actions by, or giving any notices to, or making any filings with, any Governmental Authority or any other Person) as may be reasonably required or desirable to carry out or to perform the provisions of this Agreement.

 

6.                                      Counterparts.  This Agreement may be executed in any number of counterparts and in separate counterparts, all of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.

 

[remainder of page intentionally left blank]

 

 

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the Parties to this Agreement as of the date first written above.

 

	
 
    	
Seller
    
	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
Number   of Virtu Financial
    
	
 
    	
Units:
    	
 
    

 

[Signature Page to Assignment Agreement]

 

 

	
 
    	
Virtu   Financial, Inc.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

	
 
    	
Virtu   Financial LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

[Signature Page to Assignment Agreement]

 

 

EXHIBIT B

 

Form of Power of Attorney

 

Know all by these presents, that the undersigned hereby irrevocably constitutes and appoints each of the following officers of Virtu Financial, Inc. (the “Company”):

 

(i)                                     General Counsel,

 

(ii)                                  Chief Financial Officer, and

 

(iii)                               Chief Executive Officer

 

signing singly, the undersigned’s true and lawful attorney-in-fact to:

 

(1) execute for and on behalf of the undersigned a Transfer of Ownership with W-9 Form (the “Transfer of Ownership”) in connection with the transfer of shares of Class D common stock, par value $0.00001 per share, of the Company by the undersigned to the Company pursuant to that certain Purchase Agreement, by and between the undersigned and the Company (the “Purchase Agreement”); and

 

(2) do and perform any and all acts for and on behalf of the undersigned that may be necessary or desirable to complete and execute any such Transfer of Ownership.

 

The undersigned hereby grants to each such attorney-in-fact full power and authority to do and perform any and every act and thing whatsoever requisite, necessary, or proper to be done in the exercise of any of the rights and powers herein granted, as fully to all intents and purposes as the undersigned might or could do if personally present, with full power of substitution or revocation, hereby ratifying and confirming all that such attorney-in-fact, or such attorney-in-fact’s substitute or substitutes, shall lawfully do or cause to be done by virtue of this power of attorney and the rights and powers herein granted.

 

This Power of Attorney and all authority conferred hereby are granted and conferred subject to the interests of the Company; and, in consideration of those interests and for the purpose of completing the transactions contemplated by the Purchase Agreement and this Power of Attorney, this Power of Attorney and all authority conferred hereby, to the extent enforceable by law, shall be deemed an agency coupled with an interest and be irrevocable and not subject to termination by the undersigned or by operation of law, whether by the death or incapacity of the undersigned or any executor or trustee or the termination of any estate or trust or by the dissolution or liquidation of any corporation or partnership or by the occurrence of any other event, and the obligations of the undersigned under the Purchase Agreement similarly are not to be subject to termination. If any such individual or any such executor or trustee should die or become incapacitated or if any such estate or trust should be terminated or if any such corporation or partnership should be dissolved or liquidated or if any other such event should occur before the delivery of the shares to be sold by the undersigned under the Purchase  Agreement, certificates representing such shares shall be delivered by or on behalf of the undersigned in accordance with the 

 

 

terms and conditions of the Purchase Agreement and all other actions required to be taken under the Purchase Agreement shall be taken, and actions taken by the Attorneys-in-Fact, or any of them acting alone, pursuant to this Power of Attorney shall be as valid as if such death, incapacity, termination, dissolution, liquidation or other event had not occurred, regardless of whether or not the Attorneys-in-Fact, or any of them acting alone, shall have received notice of such death, incapacity, termination, dissolution, liquidation or other event.

 

Notwithstanding the foregoing, if the Purchase Agreement is not executed and delivered on or prior to the ninetieth day after the date of this Power of Attorney, then from and after such date the undersigned shall have the power to revoke all authority hereby conferred by giving written notice to each of the Attorneys-in-Fact that this Power of Attorney has been terminated; subject, however, to all lawful action done or performed by the Attorneys-in-Fact or any one of them, pursuant to this Power of Attorney prior to the actual receipt of such notice.

 

This Power of Attorney shall remain in full force and effect until the consummation of the all of the transactions contemplated by the Purchase Agreement, unless earlier revoked by the undersigned in a signed writing delivered to the foregoing attorneys-in-fact.

 

 

IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed as of this     day of [May] 2018.

 

	
 
    	
Stockholder:
    
	
 
    	
 
    
	
 
    	
[·]
    
	
 
    	
By:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Title:   [·]
    

 

	
STATE OF
 COUNTY OF
    	
}
    	
ss.:
    

 

On this ........ day of ............................................., 20......, before me personally came ..........................................................., to me known and known to me to be the individual who executed the foregoing instrument and acknowledged that he/she executed, and was duly authorized to execute, the same as and for the act and deed of such person.Exhibit 10.11

 

COMPANY’S
DISCLOSURE SCHEDULE

 

to
the

 

SECURITIES
PURCHASE AGREEMENT

 

by
and among

 

INPIXON,

 

a
Nevada corporation (the “Company”)

 

and

 

Each
of the Purchasers Identified on the Signature Pages thereto

 

Dated:
April 20, 2018

 

     

     

    

 

3.1(a)       Subsidiaries

 

		A.	List
                                         of the Company’s Subsidiaries:

 

		1.	Inpixon
                                         USA

 

		2.	Inpixon
                                         Federal, Inc.

 

		3.	Inpixon
                                         Canada, Inc.

 

		4.	Sysorex
                                         India Limited

 

		B.	Liens

 

		1.	Payplant
                                         LLC has a first priority lien upon all of the assets of Inpixon USA and Inpixon Federal,
                                         Inc., as evidenced by the loan purchase agreements between Payplant and GemCap.

 

		2.	Avnet,
                                         Inc. and AVT Technology Solutions LLC have a junior subordinated lien on all inventory,
                                         goods or other tangible assets sold by Avnet to Inpixon USA and other certain personal
                                         property of Inpixon USA and also assets of the Company.

 

    	 	2	 

     

    

 

 

3.1(b)       Organization
and Qualification

 

None.

 

    	 	3	 

     

    

 

3.1(d)       Conflicts

 

None.

 

    	 	4	 

     

    

 

3.1(e)       Required
Consents

 

None.

 

    	 	5	 

     

    

 

3.1(g)(i)       Capitalization

 

As
of April 19, 2018, the Company had 255,000,000 authorized shares of capital stock, par value $0.001 per share, of which 250,000,000
were shares of common stock and 5,000,000 were shares of “blank check” preferred stock. As of April 19, 2018, the
Company had 9,339,291 shares of common stock outstanding and 237.25 shares of preferred stock designated as Series 3 Convertible
Preferred Stock outstanding.

 

Please
find below the number of shares of common stock beneficially owned by Affiliates of the Company as of the date of the Securities
Purchase Agreement:

 

	Name of Beneficial Owner	 	Amount and nature of beneficial ownership	 	 	Percent of Class(1)	 
	Nadir Ali	 	 	4,206	(2)	 	 	*	 
	Bret Osborn	 	 	1,845	(3)	 	 	*	 
	Leonard Oppenheim	 	 	314	(4)	 	 	*	 
	Kareem Irfan	 	 	198	(5)	 	 	*	 
	Tanveer Khader	 	 	5,015	(6)	 	 	*	 
	Soumya Das	 	 	254	(7)	 	 	*	 

 

*       less
than 1% of the issued and outstanding shares of common stock.

 

(1)     Based
on 9,339,291 shares outstanding on April 19, 2018.

 

(2)     Includes
(i) 1,267 shares of common stock held of record by Nadir Ali, (ii) 2,206 shares of common stock issuable to Nadir Ali upon exercise
of an outstanding stock option, (iii) 122 shares of common stock held of record by Lubna Qureishi, Mr. Ali’s wife and (iv)
611 shares of common stock held of record by the Qureishi Ali Grandchildren Trust. Mr. Ali is the joint-trustee (with his wife
Lubna Qureishi) of the Qureishi Ali Grandchildren Trust and has voting and investment control over the shares held.

 

(3)     Includes
(i) 1,469 shares of common stock held of record by Mr. Osborn and (ii) 376 shares of common stock issuable to Bret Osborn upon
exercise of outstanding stock options.

 

(4)     Includes
(i) 250 shares of common stock held of record by Mr. Oppenheim, and (ii) 64 shares of common stock issuable to Leonard Oppenheim
upon exercise of outstanding stock options.

 

(5)     Includes
(i) 134 shares of common stock held of record by Mr. Irfan and (ii) 64 shares of common stock issuable to Kareem Irfan upon exercise
of outstanding stock options.

 

(6)     Includes
(i) 4,817 shares of common stock owned directly by SyHolding Corp., (ii) 134 shares of common stock held of record by Mr. Khader
and (iii) 64 shares of common stock issuable to Tanveer Khader upon exercise of outstanding stock options. Tanveer Khader holds
the power to vote and dispose of the SyHolding Corp. shares.

 

(7)     Includes
(i) 156 shares of common stock held of record by Mr. Das and (ii) 98 shares of common stock issuable to Mr. Das upon exercise
of outstanding stock options.

 

    	 	6	 

     

    

 

3.1(g)(ii)       Capital
stock issued since the Company’s most recently filed periodic report under the Exchange Act, other than pursuant to the
exercise of employee stock options under the Company’s stock option plans, the issuance of shares of Common Stock to employees,
officers, directors or consultants pursuant to the Company’s employee stock purchase plans and pursuant to the conversion
and/or exercise of Common Stock Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange
Act:

 

In
connection with settlement negotiations with respect to ongoing litigation matters or other outstanding trade payables, the Company
may issue shares of common stock pursuant to transactions in accordance with Section 3(a)(10) of the Securities Act.

 

    	 	7	 

     

    

 

3.1(g)(ii)       Any
right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated
by the Transaction Documents:

 

Pursuant
to Section 4.11 of the securities purchase agreements, dated as of January 5, 2018, the purchasers are entitled to participate
in this offering up to an amount equal to 30% of the offering at the same purchase price provided for in this offering.

 

    	 	8	 

     

    

 

3.1(g)(ii)       Options,
warrants and other rights to subscribe for or acquire, any shares of Common Stock or the capital stock of any Subsidiary, or contracts,
commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional
shares of Common Stock or Common Stock Equivalents or capital stock of any Subsidiary

 

The
Company is committed to issue the following additional securities:

 

	 	●	105,606
    shares of common stock authorized for issuance under our Amended and Restated 2011 Employee Stock Incentive Plan, as amended
    (the “2011 Employee Stock Incentive Plan”), of which 6,933 shares of common stock are underlying outstanding options
    having a weighted average exercise price of $683.32 per share and 98,673 shares of common stock are available for future issuance
    and up to an additional 3,000,000 shares of common stock which may be issued under the Company’s 2018 Employee Stock
    Incentive Plan if implemented by the Company’s board of directors and 1,389 shares of common stock underlying outstanding
    options not under the 2011 or 2018 Employee Stock Incentive Plan having a weighted average of $1,215.00 per share;

 

	 	●	8,302,590
    shares of common stock issuable upon the exercise of outstanding warrants, having a weighted average exercise price of $3.91
    per share;
	 	 	 
	 	●	630,139
    shares (the “November Note Shares”) of restricted common stock which may be issued upon the conversion of the
    outstanding principal balance of $1,745,000 plus $145,416 in interest that may accrue through the maturity date of an outstanding
    convertible promissory note issued on November 17, 2017 (as amended), as amended on January 5, 2018 (the “November Note”)
    subject to a most favored nation provision for dilutive issuances. The November Note is not convertible until the six month
    anniversary of the issue date of the November Note. The conversion price of the November Note may be reduced to a variable
    rate price that is equal to 70% of the closing bid price of the Company’s common stock as reported by the Nasdaq Stock
    Market as of the date immediately prior to each applicable conversion date subject to a floor of $3.00; and
	 	 	 
	 	●	44,000
    shares of common stock reserved for issuance to investor relations firms; and
	 	 	 
	 	●	up
        to 34,627,066 additional shares of common stock underlying the February 2018 Warrants as a result of the anti-dilution
        protection provisions that will be triggered upon consummation of this offering.

        

 

    	 	9	 

     

    

 

3.1(g)(iii)       Required
Issuances, Adjustments or Approvals

 

The
Company is obligated to issue shares of common stock to Chicago Venture Partners, L.P. upon the conversion of the November Note
(as defined in Schedule 3(g)(ii)) at a conversion price of $3.00 (the “Conversion Price”).

 

Pursuant
to the terms of the securities purchase agreements dated February 15, 2018, the issuance of the Securities will be considered
a dilutive issuance triggering the requirement of the Company to issue additional shares of common stock at the floor price.

 

    	 	10	 

     

    

 

3.1(g)(iii)       Redemption.

 

The
convertible promissory note issued to Chicago Venture Partners, L.P. on November 17, 2017 allows the Company to redeem the note
at its discretion.

 

    	 	11	 

     

    

 

Schedule
3.1(g)(iv)Stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital
stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.

 

None.

 

    	 	12	 

     

    

 

3.1(i)       Material
Changes; Undisclosed Events, Liabilities or Developments

 

Spin-off

 

In
connection with our strategic business plan, Inpixon intends to separate its value-added reseller business from the IPA business
in Inpixon USA and then distribute its entire interest in Inpixon USA to Inpixon stockholders and certain warrant holders. This
separation will be accomplished through a spin-off in which the Company intends to contribute its value-added reseller
business to Inpixon USA, Inpixon USA will contribute any portion of the IPA business to the Company and then the Company will
distribute its entire interest in Inpixon USA to its stockholders and certain warrant holders. While the revenues from the VAR
business account for approximately 93% of our total revenues the Company believes the separation of the two entities will allow
the Company to invest its capital and resources towards enhancing and developing its indoor positioning analytics technology in
order to deliver faster innovations and grow its customer base. The spin-off is subject to numerous conditions, including, without
limitation, the effectiveness of a Form 10 registration statement with the Securities and Exchange Commission, the approval for
quotation of Inpixon USA’s common stock on the OTCQB market of the OTC Markets Group, Inc., final approval from the Company’s
Board of Directors, and other customary conditions. No assurance can be provided as to the timing of the completion of the spin-off
or that all conditions to the spin-off will be met.

 

    	 	13	 

     

    

 

3.1(j)
Litigation

 

VersionOne

 

On
March 1, 2017, VersionOne, Inc. filed a complaint in the United States District Court, Eastern District of Virginia, against Inpixon,
Inpixon USA, and Inpixon Federal, Inc. (collectively, “Defendants”). The complaint alleges that VersionOne provided
services to Integrio Technologies, LLC (“Integrio”) having a value of $486,337, that in settlement of this amount
Integrio and VersionOne entered into an agreement (the “Settlement Agreement”) whereby Integrio agreed to pay, and
VersionOne agreed to accept as full payment, $243,169 (the “Settlement Amount”), and that as a result of the Defendants’
acquisition of the assets of Integrio, Defendants assumed the Settlement Amount but failed to pay amounts owed to VersionOne.
The complaint also alleges that, subsequent to closing of the acquisition, VersionOne provided additional services to Defendants
having a value of $144,724, for which it has not been paid. VersionOne alleges that, Defendants have an obligation to pay both
the Settlement Amount and the cost of the additional services. On Dec. 8, 2017, the court in VersionOne entered judgment against
Inpixon, Inpixon Federal, and Inpixon USA, jointly and severally, in the amount of $334,339.37. Inpixon and VersionOne have agreed
to a payment plan of $40,000 per month for March, April and May 2018 and then $30,000 per month from June 2018 until fully-paid.

 

Embarcadero

 

On
August 10, 2017, Embarcadero Technologies, Inc. (“Embarcadero”) and Idera, Inc. (“Idera”) filed a complaint
in the U.S. Federal District Court for the Western District of Texas against Inpixon Federal, Inc. and Integrio Technologies,
LLC (“Integrio”) for failure to pay for purchased software and services pursuant to certain reseller agreements. The
complaint alleges that Inpixon Federal, Inc. entered into an agreement with Integrio to acquire certain assets and assume certain
liabilities of Integrio and are therefore responsible for any amounts due. In the complaint, Embarcadero and Idera demand that
Inpixon Federal, Inc. and Integrio pay $1,100,000.00 in damages. On April 10, 2018, Embarcadero filed a motion for summary judgment.
The parties are currently in settlement negotiations.

 

Micro
Focus

 

On
August 11, 2017, Micro Focus (US) Inc. (“Micro Focus”), filed a complaint in the Circuit Court of Fairfax County,
Virginia against Inpixon Federal, Inc. (“Inpixon Federal”) for failure to pay a debt settlement entered into on March
13, 2017 for a principal amount of $245,538.33 plus accrued interest. The complaint demands full payment of the principal amount
of $245,538.33 plus accrued interest. On October 31, 2017, Micro Focus filed a motion for summary judgment against Inpixon Federal.
The Company consented to the court entering summary judgment in favor of Micro Focus in the amount of $245,538.33, with interest
accruing at 10% per annum from June 13, 2017 until payment is completed and the parties are currently in settlement negotiations
regarding a payment plan.

 

    	 	14	 

     

    

 

Virtual
Imaging

 

On
December 28, 2017, Virtual Imaging, Inc. (“Virtual Imaging”) filed a complaint in the United States District Court,
Eastern District of Virginia, against Inpixon USA, and Inpixon Federal, Inc. (collectively, “Defendants”). The complaint
alleges that Virtual Imaging provided products to the Defendants having an aggregate value of $3,938,390.28, of which $3,688,390.88
remains outstanding and overdue. Virtual Imaging has demanded compensation for the unpaid amount. We have filed a response and
the parties are currently in settlement negotiations.

 

Deque

 

On
January 22, 2018, Deque Systems, Inc. filed a motion for entry of default judgment (the “Motion”) against Inpixon
Federal, Inc. (“Inpixon Federal”) in the Circuit Court of Fairfax County, Virginia. The Motion alleges that Inpixon
Federal failed to respond to a complaint served on November 22, 2017. The Motion requests a default judgment in the amount of
$336,000. A trial is currently scheduled for September 12, 2018, however, the parties are currently in settlement negotiations.

 

AVT
Technology Solutions

 

On
April 6, 2018, AVT Technology Solutions, LLC, filed a complaint in the United States District Court Middle District of Florida
Tamp Division against Inpixon and Inpixon USA alleging breach of contract, breach of corporate guaranty and unjust enrichment
in connection with non-payment for goods received and requesting a judgment in an amount of not less than $9,152,698.71. We have
not yet filed a response to such complaint.

 

Atlas
Technology Group, LLC 

 

On
March 19, 2018, Inpixon was notified by Atlas Technology Group, LLC (“Atlas”) that it believes the Inpixon’s
recent financing transactions completed in the first quarter of 2018 triggered the requirement for Inpixon to pay a minimum project
fee in an amount equal to $1 million less certain amounts previously paid in connection with the “Tail Period” described
in that certain agreement, dated September 6, 2018, by and between Inpixon and Atlas. On April 18, 2018, Atlas filed a demand
for arbitration with the American Arbitration Association. Inpixon intends to contest the case vigorously.

 

    	 	15	 

     

    

 

3.1(l)       Compliance

 

None.

 

    	 	16	 

     

    

 

3.1(o)
Title to Assets

 

		1.	Payplant
                                         LLC has a first priority lien upon all of the assets of Inpixon USA and Inpixon Federal,
                                         Inc., as evidenced by the loan purchase agreements between Payplant and GemCap.

		2.	Avnet,
                                         Inc. and AVT Technology Solutions LLC have a junior subordinated lien on all inventory,
                                         goods or other tangible assets sold by Avnet to Inpixon USA and other certain personal
                                         property of Inpixon USA and also assets of the Company.

		3.	Dell
                                         Marketing, L.P. has a lien on all of the Dell-branded equipment and any related equipment,
                                         attachments and accessories in the possession of Inpixon USA.

		4.	Arrow
                                         Enterprise Computing Solutions, Inc. has a security interest in the electronic merchandize
                                         and other products it sold to Inpixon USA and any right to payment relating to these
                                         products.

 

    	 	17	 

     

    

 

3.1(r)       Transactions
With Affiliates and Employees

 

None.

 

    	 	18	 

     

    

 

3.1(v)       Registration
Rights

 

The
Company was required to register within 90 calendar days of January 5, 2018, to file a registration statement on Form S-3 (or
other appropriate form if the Company is not then S-3 eligible) providing for the resale by the January Purchasers (as defined
in Schedule 3.1(g)(ii)) of the shares of Common Stock underlying those certain warrants issued pursuant to that certain Securities
Purchase Agreement, dated January 5, 2018, by and among the company and the January Purchasers. The Company filed the registration
statement on Form S-3 on March 27, 2018, which has not been declared effective by the U.S. Securities and Exchange Commission.

 

The
Company is required to use commercially reasonable efforts to cause such registration to become effective within 181 days following
January 5, 2018 and to keep such registration statement effective at all times until the earlier of the date on which no January
Purchaser owns any warrants or shares of Common Stock issuable upon exercise thereof or such date on which the shares of Common
Stock issuable upon exercise of the warrants may be resold in accordance with Rule 144(c)(1) and otherwise without restriction
or limitation pursuant to Rule 144.

 

    	 	19	 

     

    

 

3.1(w)       Listing
and Maintenance Requirements

 

Listing
Requirements

 

On
May 19, 2017, we received written notice from the Listing Qualifications Staff of Nasdaq notifying us that we no longer comply
with Nasdaq Listing Rule 5550(b)(1) due to our failure to maintain a minimum of $2,500,000 in stockholders’ equity (the
“Minimum Stockholders’ Equity Requirement”) or any alternatives to such requirement.

 

On
October 24, 2017, we received notification (the “Staff Delisting Determination”) from Nasdaq that we have not regained
compliance with the Minimum Stockholders’ Equity Requirement. The Company appealed the Staff Delisting Determination and
requested a hearing that was held on December 7, 2017. As a result, the suspension and delisting was stayed pending the issuance
of a written decision by the Nasdaq Hearings Panel (the “Panel”).

 

By
decision dated December 14, 2017, the Panel granted the Company’s request for a further extension, through April 23, 2018,
to evidence compliance with the $2,500,000 stockholders’ equity requirement. The Company’s continued listing on Nasdaq
through April 23, 2018 and thereafter is subject to the Company’s compliance with certain interim milestones, which, if
not timely satisfied, may result in the delisting of the Company’s common stock from Nasdaq.

 

As
of December 31, 2017, we had a stockholder’s deficit equal to $18,853,000 and therefore, were not compliant with the stockholder’s
equity requirement as of such date. While we have raised net proceeds of approximately $18 million since December 31, 2018 prior
to taking into account the securities issued in this offering, and believe that the proceeds received from this offering will
satisfy the stockholders’ equity requirement as of April 23, 2018, however, evidence of the ability to maintain compliance
will be required. We are pursuing actions to maintain compliance including, but not limited to the contemplated spin-off of our
Infrastructure segment, but there are no assurances that any such transaction will be consummated or that the transaction will
be sufficient to satisfy Nasdaq that the Company will be able to maintain compliance in the long term.

 

On
August 14, 2017, we received a deficiency letter from Nasdaq indicating that, based on our closing bid price for the last 30 consecutive
business days, we do not comply with the minimum bid price requirement of $1.00 per share, as set forth in Nasdaq Listing Rule
5550(a)(2). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we had a grace period of 180 calendar days, or until February
12, 2018, to regain compliance with the minimum closing bid price requirement for continued listing. We effected a 1-for-30 reverse
stock split on February 6, 2018 in response to our non-compliance with the minimum bid price requirement and as of the date of
this filing we have achieved compliance with the minimum bid price requirement, however, since then market price for or common
stock has declined to less than $1.00. Therefore there are no assurances that we will be able to continue to maintain such compliance.

 

    	 	20	 

     

    

 

3.1(aa)       Solvency

 

	Debt*	 	Amount of  Debt	 
	Convertible Promissory Note dated as of November 17, 2017	 	$	1,745,000	(1)
	Payplant (AR facility)	 	$	2,800	 

 

*
Excludes trade debt payable.

 

(1)
The descriptions of the November Note described herein are incorporated to this Schedule 3.1(aa) by reference.

 

    	 	21	 

     

    

 

3.1(dd)       
Accountants

 

Marcum
LLP

 

750
Third Avenue

 

New
York, NY 10017

 

    	 	22	 

     

    

 

4.9       Use
of Proceeds

 

We
expect to use the net proceeds received from this offering for working capital, general corporate purposes (including research
and development, sales and marketing and the satisfaction of outstanding amounts payable to our vendors in connection with trade
payables) and transaction expenses. Additionally, we may use a portion of the net proceeds of this offering to finance acquisitions
of, or investments in, competitive and complementary businesses, products or services as a part of our growth strategy. However,
we currently have no commitments with respect to any such acquisitions or investments.

 

    	 	23

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