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Exhibit
1.1
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Placement
Agent Agreement.
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HYPERDYNAMICS
CORPORATION
PLACEMENT AGENCY AGREEMENT
May
11, 2008
C.K.
COOPER & COMPANY, INC.
18300
Von Karman Avenue, Suite 700
Irvine,
California 92612
Ladies
and Gentlemen:
Hyperdynamics
Corporation, a Delaware corporation (the “ Company
”), proposes, subject to the terms and conditions stated
herein, to issue and sell to one or more qualified investors
(collectively, the “ Investors
”) (i) up to an aggregate of 2,424,242 shares (the
“ Shares
”) of the Company’s Common Stock, par value $0.001
per share (the “ Common
Stock ”) and (ii) warrants to purchase up to
2,424,242 shares of Common Stock (the “ Warrants
” and collectively with the Shares, the “
Securities
”). The shares of Common Stock issuable upon
exercise of the Warrants are hereinafter referred to as the
“ Warrant
Shares ”. The Company desires to
engage C.K. Cooper & Company, Inc. as its exclusive
placement agent (the “ Placement
Agent ”) in connection with the issuance and sale
of the Securities. The Securities are described
more fully in the Prospectus that is referred to
below.
The
Company confirms its agreements with the Placement Agent as
follows:
Agreement
to Act as Placement Agent.
On
the basis of the representations, warranties and agreements of
the Company herein contained and subject to all of the terms
and conditions of this Agreement, the Company engages the
Placement Agent to act as its exclusive placement agent in
connection with the issuance and sale of the Securities and
the Placement Agent hereby agrees, as an agent of the Company,
to use its commercially reasonable efforts to solicit offers
to purchase the Securities upon the terms and conditions set
forth in the Prospectus (as defined below). Prior
to the earlier of (i) the date on which this Agreement is
terminated and (ii) the Closing Date (as defined below), the
Company shall not, without the prior consent of the Placement
Agent, solicit or accept offers to purchase Common Stock
(other than pursuant to the exercise of options or warrants to
purchase shares of Common Stock that are outstanding as of the
date hereof) otherwise than through the Placement Agent in
accordance herewith.
As
compensation for the services rendered hereunder, on the
Closing Date (as defined below), the Company shall pay to the
Placement Agent, by wire transfer of immediately available
U.S. funds payable to the order of the Placement Agent, to an
account or accounts designated by the Placement Agent, an
amount equal to 8% of the aggregate gross proceeds received by
the Company from the sale of the Securities (the “
Fee
”). The Placement Agent may, in its
discretion, retain other brokers or dealers to act as
sub-agents on the Placement Agent’s behalf in connection
with the offering of the Securities, provided that the Company
shall not be obligated to pay any additional amounts to the
Placement Agent or any such sub-agent with respect
thereto.
This
Agreement shall not give rise to a commitment by the Placement
Agent or any of its affiliates to underwrite or purchase any
of the Securities or otherwise provide any financing, and the
Placement Agent shall have no authority to bind the Company in
respect of the sale of any Securities. The Company
shall have the sole right to accept offers to purchase the
Securities and may reject any such offer in whole or in
part. The Placement Agent shall have the right, in
its discretion reasonably exercised, without notice to the
Company, to reject any offer to purchase Securities received
by it, in whole or in part, and any such rejection shall not
be deemed a breach of its agreement contained
herein. The sale of the Securities shall be made
pursuant to one or more purchase agreements in substantially
the form attached hereto as Exhibit A
(the “ Purchase
Agreements ”).
Delivery
and Payment. Subject to the terms and
conditions hereof, delivery of the Securities shall be made by
the Company to the Investors, and payment of the purchase
price shall be made by the Investors, in accordance with the
Purchase Agreements.
Representations
and Warranties of the Company. The Company represents,
warrants and covenants to the Placement Agent
that:
The
Company meets the requirements for use of Form S-3 under
the Securities Act of 1933, as amended (the “
1933
Act ”) for a primary offering. A
Registration Statement on Form S-3 (Registration No.
333-148287) with respect to the Securities, including a base
prospectus (the “ Base
Prospectus ”), and such amendments to such
registration statement as may have been required to the date
of this Agreement, has been carefully prepared by the Company
pursuant to and in conformity with the requirements of the
1933 Act, and the rules and regulations thereunder (the
“ Rules and
Regulations ”) of the Securities and Exchange
Commission (the “ SEC
”) and has been filed with the SEC under the 1933
Act. Such registration statement has been declared
effective by the SEC. Copies of such registration
statement, including any amendments thereto, each related
preliminary prospectus (meeting the requirements of Rule 430,
430A or 430B of the Rules and Regulations) contained therein,
and the exhibits, financial statements and schedules thereto
have heretofore been delivered by the Company to the Placement
Agent. A final prospectus supplement containing
information permitted to be omitted at the time of
effectiveness by Rule 430A or 430B of the Rules and
Regulations will be filed promptly by the Company with the SEC
in accordance with Rule 424(b) of the Rules and
Regulations. The term “ Registration
Statement ” as used herein means the registration
statement as amended at the time it became effective by the
SEC under the 1933 Act (the “ Effective
Date ”), including financial statements, all
exhibits and all documents incorporated by reference therein
and, if applicable, the information deemed to be included by
Rule 430A or 430B of the Rules and
Regulations. If an abbreviated registration
statement is prepared and filed with the SEC in accordance
with Rule 462(b) under the 1933 Act (an “
Abbreviated
Registration Statement ”), the term “
Registration
Statement ” as used in this Agreement includes
the Abbreviated Registration Statement. The term
“ Prospectus
” as used herein means, together with the Base
Prospectus, (i) the final prospectus supplement as first
filed with the SEC pursuant to Rule 424(b) of the Rules and
Regulations, or (ii) if no such filing is required, the
form of final prospectus included in the Registration
Statement at the Effective Date, including, in each case, the
documents incorporated by reference therein. The
term “ Preliminary
Prospectus ” as used herein shall mean a
preliminary prospectus as contemplated by Rule 430, 430A
or 430B of the Rules and Regulations included at any time in
the Registration Statement, including the Base Prospectus and
any preliminary prospectus supplement, and including in each
case the documents incorporated by reference
therein. The term “ Free Writing
Prospectus ” as used herein shall have the
meaning set forth in Rule 405 of the Rules and
Regulations. The term “ Issuer Free
Writing Prospectus ” as used herein shall have
the meaning set forth in Rule 433 of the Rules and
Regulations. The term “ Disclosure
Package ” as used herein shall mean the
Preliminary Prospectus as most recently amended or
supplemented prior to the Initial Time of Sale (as defined
below) together with the Issuer Free Writing Prospectuses
identified in Schedule I hereto, if any, and any other
Free Writing Prospectus that the parties hereto shall
hereafter expressly agree to treat as part of the Disclosure
Package. The Preliminary Prospectus, if any, any
Issuer Free Writing Prospectus required to be filed pursuant
to Rule 433(d) of the Rules and Regulations and the Prospectus
delivered to the Placement Agent for use in connection with
the offering of the Securities have been and will be identical
to the respective versions thereof transmitted to the SEC for
filing via the Electronic Data Gathering Analysis and
Retrieval System (“ EDGAR
”), except to the extent permitted by
Regulation S-T. For purposes of this Agreement, the words
“amend,” “amendment,”
“amended,” “supplement” or
“supplemented” with respect to the Registration
Statement, the Prospectus, any Free Writing Prospectus or the
Disclosure Package shall mean amendments or supplements to the
Registration Statement, the Prospectus, any Free Writing
Prospectus or the Disclosure Package, as the case may be, as
well as documents filed after the date of this Agreement and
prior to the completion of the distribution of the Securities
and incorporated by reference therein as described
above.
Neither
the SEC nor any state or other jurisdiction or other
regulatory body has issued, and neither is, to the knowledge
of the Company, threatening to issue, any stop order under the
1933 Act or other order suspending the effectiveness of the
Registration Statement (as amended or supplemented) or
preventing or suspending the use of any Preliminary
Prospectus, Issuer Free Writing Prospectus, the Disclosure
Package or the Prospectus or suspending the qualification or
registration of the Securities for offering or sale in any
jurisdiction nor instituted or, to the knowledge of the
Company, threatened to institute proceedings for any such
purpose. The Preliminary Prospectus at its date of
issue and as of 10:00 a.m. Eastern Standard Time on the date
hereof (the “ Initial Time of
Sale ”), the Registration Statement at each
effective date and the Initial Time of Sale, and the
Prospectus and any amendments or supplements thereto or to the
Registration Statement when they are filed with the SEC or
become effective, as the case may be, contain or will contain,
as the case may be, all statements that are required to be
stated therein by, and in all material respects conform or
will conform, as the case may be, to the requirements of, the
1933 Act and the Rules and Regulations. Neither the
Registration Statement nor any amendment thereto, as of the
applicable effective date, contains or will contain, as the
case may be, any untrue statement of a material fact or omits
or will omit to state any material fact required to be stated
therein or necessary to make the statements therein, not
misleading. Neither the Preliminary Prospectus, the
Prospectus nor any supplement thereto contains, as of the date
thereof, or will contain, as the case may be, any untrue
statement of a material fact or omits or will omit to state
any material fact required to be stated therein or necessary
to make the statements therein, in the light of the
circumstances under which they were made, not
misleading. Neither the Disclosure Package nor any
supplement thereto, at the Initial Time of Sale, contains or
will contain, as the case may be, any untrue statement of a
material fact or omits or will omit to state any material fact
required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under
which they were made, not
misleading. Notwithstanding the foregoing, the
Company makes no representation or warranty as to information
contained in or omitted from the Registration Statement, the
Disclosure Package or the Prospectus, or any such amendment or
supplement, in reliance upon, and in conformity with, written
information furnished to the Company relating to the Placement
Agent by or on behalf of the Placement Agent expressly for use
in the preparation thereof (as provided in Section 12
hereof). The documents incorporated by reference in
the Disclosure Package or the Prospectus at the time they were
filed with the SEC, complied in all material respects with the
requirements of the Securities Exchange Act of 1934, as
amended (the “ 1934 Act
”), and the rules and regulations adopted by the SEC
thereunder (the “ 1934 Act Rules
and Regulations ”). Any future
documents incorporated by reference so filed, when they are
filed, will comply in all material respects with the
requirements of the 1934 Act and the 1934 Act Rules and
Regulations; no such incorporated document contained or will
contain any 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; and,
when read together and with the other information in each of
the Disclosure Package and the Prospectus, at the time the
Registration Statement became effective, at the Initial Time
of Sale and at the Closing Date, each such incorporated
document did not or will not, as the case may be, contain an
untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading.
The
Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of
Delaware, with full power and authority (corporate and
otherwise) to own its properties and conduct its business as
described in the Disclosure Package, and has been duly
qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts
any business so as to require such qualification, except where
the failure to be so qualified or in good standing would not
result in a Material Adverse Effect (as defined
below).
Each
of the Company’s subsidiaries is set forth on Exhibit
21.1 to the Company’s Annual Report on Form 10-K for the
year ended June 30, 2007.
The
Company has the full corporate power and authority to enter
into and to consummate the transactions contemplated by each
of the Transaction Documents (as defined below) and otherwise
to carry out its obligations hereunder and
thereunder. The execution and delivery of each of
the Transaction Documents by the Company and the consummation
by it of the transactions contemplated hereby and thereby have
been duly authorized by all necessary action on the part of
the Company and no further consent or action is required by
the Company, its Board of Directors or its
stockholders. Each of the Transaction Documents has
been (or upon delivery will be) duly executed by the Company
and is, or when delivered in accordance with the terms hereof,
will constitute, the valid and binding obligation of the
Company enforceable against the Company in accordance with its
terms, except as such enforceability may be limited by
applicable (i) bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or similar laws in effect
which affect creditors’ rights generally, or (ii) laws
relating to the availability of specific performance,
injunctive relief or other equitable remedies. The
execution, delivery and performance of the Transaction
Documents by the Company and the consummation by the Company
of the transactions contemplated hereby and thereby, including
the issuance and sale by the Company of the Securities and the
issuance of the Warrant Shares upon due exercise of the
Warrants in accordance with their terms, do not and will
not: (i) conflict with or violate any provision of
the Company’s certificate of incorporation, bylaws or
other organizational or charter documents as of the date of
execution of this Agreement, or (ii) subject to obtaining the
Required Approvals (as defined below), conflict with, breach,
or constitute a default (or an event that with notice or lapse
of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both)
of, any agreement, mortgage, indenture, credit facility, debt
or other instrument (evidencing a Company debt or otherwise)
or other understanding to which the Company is a party or by
which any property or asset of the Company is bound or
affected, or (iii) result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which
the Company is subject (including federal and state securities
laws and regulations), or by which any property or asset of
the Company is bound or affected; except in the case of each
of clauses (ii) and (iii), such as could not, individually or
in the aggregate: (a) adversely affect the legality, validity
or enforceability of this Agreement and any other documents or
agreements executed in connection with the transactions
contemplated hereunder (collectively, the “ Transaction
Documents ”), (b) reasonably be expected to have
or result in a material adverse effect on the results of
operations, assets, business, management, operations,
financial condition or prospects of the Company, or (c)
adversely impair the Company’s ability to perform fully
on a timely basis its obligations under any of the Transaction
Documents (any of foregoing clauses (a), (b) or (c), a “
Material Adverse
Effect ”).
Neither
the Company nor any of its subsidiaries is in violation of its
Certificate of Incorporation or bylaws (or similar
organizational documents) or in default in the performance or
observance of any material obligation, agreement, covenant or
condition contained in any agreement, mortgage, indenture,
credit facility, debt or other instrument (evidencing a
Company debt or otherwise) or other understanding to which the
Company or any of its subsidiaries is a party or by which any
property or asset of the Company or any of its subsidiaries is
bound or affected.
The
Company is not required to obtain any consent, approval,
waiver, authorization or order of, give any notice to, or make
any filing or registration with, or qualification of, any
court or other federal, state, local or other governmental
authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction
Documents, including the issuance and sale by the Company of
the Securities and the issuance of the Warrant Shares upon due
exercise of the Warrants in accordance with their terms, other
than (i) the filing of a Form 8-K disclosing the transaction
contemplated hereby, (ii) the filing with the SEC of a
prospectus supplement, (iii) the filing of an application for
the listing of additional securities to the American Stock
Exchange (the “ Principal
Market ”) for the listing of the Shares and the
Warrant Shares for trading thereon in the time and manner
required thereby, and (iv) applicable Blue Sky filings
(collectively, the “ Required
Approvals ”). “ Person
” means an individual or corporation, partnership,
trust, incorporated or unincorporated association, joint
venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other
entity of any kind.
There
are no contracts or other documents required to be described
in the Registration Statement or to be filed as exhibits to
the Registration Statement by the 1933 Act or by the Rules and
Regulations which have not been described in, filed as
exhibits to, or incorporated by reference in the Registration
Statement, as required. The contracts so described
in the Disclosure Package to which the Company or any of its
subsidiaries is a party have been duly authorized, executed
and delivered by the Company or its subsidiaries, constitute
valid and binding agreements of the Company or its
subsidiaries (as applicable) and are enforceable against the
Company or its subsidiaries (as applicable) in accordance with
their respective terms, except as such enforceability may be
limited by (i) bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or similar laws in effect
which affect creditors’ rights generally, or (ii) laws
relating to the availability of specific performance,
injunctive relief or other equitable remedies, and, to the
Company’s knowledge, such contracts are enforceable in
accordance with their respective terms by the Company against
the other parties thereto, except as such enforceability may
be limited by (x) bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or similar laws in effect
which affect creditors’ rights generally, or (y) laws
relating to the availability of specific performance,
injunctive relief or other equitable remedies, and such
contracts are in full force and effect on the date
hereof. Neither the Company nor any of its
subsidiaries, nor, to the best of the Company’s
knowledge, any other party thereto, is in breach of or default
under any of such contracts, except for such breaches or
defaults that will not result in a Material Adverse
Effect.
As
of May 11, 2008, the authorized capital stock of the Company
consists of 250,000,000 shares of Common Stock, par value
$0.001 per share, of which 56,807,771 shares are issued and
outstanding and approximately 18,500,000 shares are reserved
for issuance upon conversion of preferred stock, 11,600,000
shares are reserved for exercise of stock options or warrants,
or the vesting of restricted stock awards, outstanding under
the Company’s stock option plans or otherwise, and
11,275,203 reserved for the potential conversion of debt if
and only if there is a future default. As of May 11, 2008 this
leaves 151,817,026 as available for issuance. All
of the issued shares of capital stock of the Company have been
duly and validly authorized and issued, are fully paid and
non-assessable and conform to the descriptions thereof
incorporated by reference in the Disclosure
Package. All of the issued shares of capital stock
of each subsidiary of the Company (i) have been duly and
validly authorized and issued, are fully paid and
non-assessable and (ii) except as disclosed in the Disclosure
Package, are owned directly by the Company, free and clear of
all liens, encumbrances, equities or claims. Except
as disclosed in this Section 3(h) and except for the
transactions contemplated by this Agreement, neither the
Company nor any subsidiary has outstanding any options to
purchase, or any preemptive rights or other rights to
subscribe for or to purchase any securities or obligations
convertible into, or any contracts or commitments to issue or
sell, shares of its capital stock or any such options, rights,
convertible securities or obligations. The
description of the Company’s stock option and stock
purchase plans and the options or other rights granted and
exercised thereunder set forth in the Disclosure Package
accurately and fairly presents in all material respects the
information required by the 1933 Act and the Rules and
Regulations to be shown with respect to such plans, options
and rights.
Except
as disclosed in the Disclosure Package, there are no legal or
governmental actions, suits or proceedings pending or, to the
best of the Company’s knowledge, threatened to which the
Company or any of its subsidiaries is or may be a party or of
which property owned or leased by the Company or any of its
subsidiaries is or may be the subject, or related to
environmental or discrimination matters, which actions, suits
or proceedings, would reasonably be expected, individually or
in the aggregate, to prevent or adversely affect the
transactions contemplated by the Transaction Documents or have
a Material Adverse Effect. No labor disturbance by
the employees of the Company or any of its subsidiaries exists
or, to the knowledge of the Company, is imminent that would
reasonably be expected to have a Material Adverse
Effect. Neither the Company nor any of its
subsidiaries is a party or subject to the provisions of any
material injunction, judgment, decree or order of any court,
regulatory body, administrative agency or other governmental
body, that would reasonably be expected to have a Material
Adverse Effect.
The
Company owns, or possesses sufficient rights in, and/or has
been granted valid and enforceable licenses for, all
registered patents, patent applications, trademarks, trademark
applications, tradenames, servicemarks and copyrights
necessary to the conduct of its business as such business is
described in the Disclosure Package (collectively, the “
Registered
Intellectual Property ”). There has
been no infringement or misappropriation by third parties of
any of the Registered Intellectual Property, or any material
inventions, manufacturing processes, formulae, trade secrets,
know-how, unregistered trademarks, and other intangible
property and assets necessary to the conduct of its business
as such business is described in the Disclosure Package
(collectively, the “ Other
Intellectual Property ,” and together with the
Registered Intellectual Property, the “ Intellectual
Property ”), nor is there any pending or, to the
best knowledge of the Company, threatened action, suit,
proceeding or claim by others challenging the Company’s
rights of title or other interest in or to any Intellectual
Property. There is no pending or, to the best
knowledge of the Company, threatened action, suit, proceeding
or claim by others challenging the validity and scope of any
Intellectual Property. There is no pending or, to
the best knowledge of the Company, threatened action, suit,
proceeding or claim by others that the Company or any of its
products or processes or the Intellectual Property infringe or
otherwise violate any patent, trademark, servicemark,
copyright, trade secret or other proprietary right of
others. There is no pending or, to the best
knowledge of the Company, threatened action, suit proceeding
or claim by any current or former employee, consultant or
agent of the Company seeking either ownership rights to any
invention or other intellectual property right or compensation
from the Company for any invention or other intellectual
property right made by such employee, consultant or agent in
the course of his/her employment with the Company or
otherwise. The Disclosure Package fairly and
accurately describes in all material respects the
Company’s rights with respect to the Intellectual
Property.
The
Company and its subsidiaries have good and marketable title in
fee simple to all real property and good and marketable title
to all tangible properties and assets described in the
Disclosure Package as owned by it, in each case free and clear
of all liens, charges, claims, encumbrances or restrictions,
except such as (i) are described in the Disclosure Package or
(ii) do not materially affect the value of such property and
do not interfere with the use made and proposed to be made of
such property by the Company and its
subsidiaries. Any real property and buildings held
under lease by the Company and its subsidiaries are held by
them under valid, subsisting and enforceable leases with such
exceptions as are not material and do not interfere with the
use made and proposed to be made of such property and
buildings by the Company and its subsidiaries. The
Company and its subsidiaries own or lease all such properties
as are necessary to its operations as now conducted or as
proposed to be conducted, except where the failure to so own
or lease would not have a Material Adverse
Effect.
The
Company and its subsidiaries possess all licenses,
certificates, authorizations or permits issued by the
appropriate governmental or regulatory agencies or authorities
that are necessary to enable them to own, lease and operate
their respective properties and to carry on their respective
businesses as presently conducted, except where the failure to
possess such licenses, certificates, authorization or permits
would not reasonably be expected to have a Material Adverse
Effect. Neither the Company nor any of its
subsidiaries has received any notice of proceedings relating
to the revocation or modification of any such license,
certificate, authority or permit which, singly or in the
aggregate, would reasonably be expected to have a Material
Adverse Effect.
Each
of the Company and its subsidiaries maintains insurance of the
types and in the amounts which it deems adequate for its
business, including, but not limited to, third-party liability
and all-risk insurance, and insurance covering real and
personal property owned or leased by the Company and its
subsidiaries against theft, damage, destruction, acts of
vandalism and all other risks customarily insured against, all
of which insurance is in full force and effect.
The
Company (i) is in compliance in all material respects with any
and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and
safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants (collectively, “
Environmental
Laws ”), (ii) has received and is in compliance
with all permits, licenses or other approvals required of it
under applicable Environmental Laws to conduct its business
and (iii) has not received notice of any actual or potential
liability for the investigation or remediation of any disposal
or release of hazardous or toxic substances or wastes,
pollutants or contaminants, except where such non-compliance
with Environmental Laws, failure to receive required permits,
licenses or other approvals, or liability would not,
individually or in the aggregate, have a Material Adverse
Effect, whether or not arising from transactions in the
ordinary course of business, except as set forth in or
contemplated by the Disclosure Package. The Company has not
been named as a "potentially responsible party" under the
Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended.
Neither
the Company nor any of its subsidiaries has sustained since
the date of the latest audited financial statements
incorporated by reference in the Disclosure Package any loss
or interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order
or decree, that is in each case material to the Company and
its subsidiaries taken as a whole, otherwise than as set forth
in the Disclosure Package. Since the respective
dates as of which information is given in the Registration
Statement, the Prospectus and the Disclosure Package, (i)
there has not been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries or
any Material Adverse Effect, and (ii) the Company or its
subsidiaries have not entered into any material transaction or
incurred any material obligation outside of the ordinary
course of business, otherwise than as set forth, or
incorporated by reference, in the Disclosure
Package.
The
Shares have been duly and validly authorized by the Company
and, when issued, delivered and paid for in accordance with
the terms of this Agreement and the Purchase Agreements, will
have been duly and validly issued and will be fully paid and
nonassessable and will not be subject to any statutory or
contractual preemptive rights or other rights to subscribe for
or purchase or acquire any shares of Common Stock of the
Company, which have not been waived or complied with and will
conform in all material respects to the description thereof
contained in the Disclosure Package and the Prospectus and
such description conforms in all material respects to the
rights set forth in the instruments defining the same. The
Warrants conform, or when issued will conform, to the
description thereof contained in the Disclosure Package and
the Prospectus and have been duly and validly authorized by
the Company and upon delivery to the Investors at the Closing
Date will be valid and binding obligations of the Company,
enforceable in accordance with their terms, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the
rights and remedies of creditors generally or subject to
general principles of equity. The Warrant Shares initially
issuable upon exercise of the Warrants conform, or when issued
will conform, to the description thereof contained in the
Disclosure Package and the Prospectus and have been duly
authorized and reserved for issuance and when issued in
accordance with the terms thereof will be validly issued,
fully paid and nonassessable.
The
issuance by the Company of the Securities has been registered
under the 1933 Act and all of the Securities are freely
transferable and tradable by the Investors without
restriction. No other document with respect to the
Registration Statement or document incorporated by reference
in the Registration Statement or Preliminary Prospectus has
heretofore been filed with the SEC. The “Plan
of Distribution” section in the Preliminary Prospectus
permits the issuance and sale of the Securities
hereunder. The description of the Company’s
capital stock set forth in the Disclosure Package, insofar as
it purports to constitute a summary of the terms of the Common
Stock, is accurate, complete and fair. Upon payment
for, and receipt of, the Securities, the Investors will have
good and marketable title to the Securities free and clear of
any liens or encumbrances except those incurred by the
Investors.
Neither
the Company, nor any of its Affiliates, nor any Person acting
on its or their behalf has, directly or indirectly, made any
offers or sales of any security or solicited any offers to buy
any security, under circumstances that would cause this
offering of the Securities to be integrated with prior
offerings by the Company for purposes of the Principal Market,
nor will the Company take any action or steps that would cause
the offering of the Securities to be integrated with other
offerings. Except as disclosed in the SEC Reports
(as defined below), the Company has not, in the 12 months
preceding the date hereof, received notice from the Principal
Market to the effect that the Company is not in compliance
with the listing or maintenance requirements of the Principal
Market. The Company is, and has no reason to
believe that it will not in the foreseeable future continue to
be, in compliance with all such listing and maintenance
requirements. The issuance and sale of the
Securities hereunder does not contravene the rules and
regulations of the Principal Market and no stockholder
approval is required for the Company to fulfill its
obligations under the Transaction Documents. The
Common Stock has been registered pursuant to Section 12(b) of
the 1934 Act and is currently listed on the Principal
Market.
The
Company has filed all reports required to be filed by it under
the 1934 Act, including pursuant to Section 13(a) or 15(d)
thereof, for the three (3) years preceding the filing date of
the Registration Statement and for the three (3) year period
preceding the date hereof (the foregoing materials being
collectively referred to herein as the “ SEC
Reports ”) on a timely basis or has received a
valid extension of such time of filing and has filed any such
SEC Reports prior to the expiration of any such
extension. As of their respective dates, the SEC
Reports complied in all material respects with the
requirements of the 1934 Act and the rules and regulations of
the SEC promulgated thereunder, and none of the SEC Reports,
when filed, contained any untrue statement of a material fact
or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein,
in the light of the circumstances under which they were made,
not misleading.
The
Company is in material compliance with the Sarbanes-Oxley Act
of 2002, and the rules and regulations promulgated thereunder
by all government and regulatory authorities and
agencies. The Company maintains a system of
internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance
with management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with
generally accepted accounting principles in the United States
and to maintain accountability for assets, (iii) access to
assets is permitted only in accordance with management’s
general or specific authorization and (iv) the recorded
accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with
respect thereto. The Company has established and
maintains and evaluates “disclosure controls and
procedures” (as such term is defined in Rule 13a-15 and
Rule 15d-15 under the 1934 Act) and “internal control
over financial reporting” (as such term is defined in
Rule 13a-15 and Rule 15d-15 under the 1934
Act). Such disclosure controls and procedures are
designed to ensure that material information relating to the
Company, including its consolidated subsidiaries, is made
known to the Company’s principal executive officer and
principal financial officer by others within those entities,
and such disclosure controls and procedures are effective to
perform the functions for which they were
established.
The
financial statements of the Company included in the SEC
Reports comply in all material respects with applicable
accounting requirements and the rules and regulations of the
SEC with respect thereto as in effect at the time of
filing. Such financial statements have been
prepared in accordance with generally accepted accounting
principle
