Exhibit 10.4
STANDBY EQUITY DISTRIBUTION AGREEMENT
-------------------------------------
THIS AGREEMENT dated as of the 21 day of December 2006 (the
"Agreement") between CORNELL CAPITAL PARTNERS, LP, a Delaware
limited
partnership (the "Investor"), and EPICEPT CORPORATION, a
corporation organized
and existing under the laws of the State of Delaware (the
"Company").
WHEREAS, the parties desire that, upon the terms and subject to
the
conditions contained herein, the Company shall issue and sell to
the Investor,
from time to time as provided herein, and the Investor shall
purchase from the
Company up to Fifteen Million Dollars ($15,000,000) of the
Company's common
stock, par value $0.0001 per share (the "Common Stock"); and
WHEREAS, such investments will be made in reliance upon the
provisions
of Regulation D ("Regulation D") of the Securities Act of 1933, as
amended, and
the regulations promulgated thereunder (the "Securities Act"), and
or upon such
other exemption from the registration requirements of the
Securities Act as may
be available with respect to any or all of the investments to be
made hereunder.
WHEREAS, the Company has engaged Rodman & Renshaw LLC (the
"Placement
Agent"), to act as the Company's exclusive placement agent in
connection with
the sale of the Company's Common Stock to the Investor
hereunder.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I.
CERTAIN DEFINITIONS
Section 1.1. "Advance" shall mean the portion of the Commitment
Amount
requested by the Company in the Advance Notice.
Section 1.2. "Advance Date" shall mean the first (1st) Trading
Day
after expiration of the applicable Pricing Period for each
Advance.
Section 1.3. "Advance Notice" shall mean a written notice in the
form
of Exhibit A attached hereto to the Investor executed by an officer
of the
Company and setting forth the Advance amount that the Company
requests from the
Investor.
Section 1.4. "Advance Notice Date" shall mean each date the
Company
delivers (in accordance with Section 2.2(b) of this Agreement) to
the Investor
an Advance Notice requiring the Investor to advance funds to the
Company,
subject to the terms of this Agreement. No Advance Notice Date
shall be less
than five (5) Trading Days after the prior Advance Notice Date.
Section 1.5. "Bid Price" shall mean, on any date, the closing bid
price
(as reported by Bloomberg L.P.) of the Common Stock on the
Principal Market or
if the Common Stock is not traded on a Principal Market, the
highest reported
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bid price for the Common Stock, as furnished by the National
Association of
Securities Dealers, Inc.
Section 1.6. "Closing" shall mean one of the closings of a purchase
and
sale of Common Stock pursuant to Section 2.3.
Section 1.7. "Commitment Amount" shall mean the aggregate amount of
up
to Fifteen Million Dollars ($15,000,000) which the Investor has
agreed to
provide to the Company in order to purchase the Company's Common
Stock pursuant
to the terms and conditions of this Agreement, provided that, the
Company shall
not effect any sales under this Agreement and the Investor shall
not have the
right or the obligation to purchase any shares of Common Stock
under this
Agreement to the extent that after giving effect to such purchase
and sale the
aggregate number of shares issued under this Agreement would exceed
5,101,765
shares of Common Stock (which represents one less than 20% of the
25,508,830
outstanding shares of Common Stock as of the date of this
Agreement) unless or
until the Company obtains any necessary shareholder approval or
consents in
accordance with Nasdaq rules prior to such issuance.
Section 1.8. "Commitment Period" shall mean the period commencing
on
the earlier to occur of (i) the Effective Date, or (ii) such
earlier date as the
Company and the Investor may mutually agree in writing, and
expiring on the
earliest to occur of (x) the date on which the Investor shall have
made payment
of Advances pursuant to this Agreement in the aggregate amount of
the Commitment
Amount, (y) the date this Agreement is terminated pursuant to
Section 10.2 or
(z) the date occurring thirty-six (36) months after the Effective
Date.
Section 1.9. "Common Stock" shall mean the Company's common stock,
par
value $0.0001 per share.
Section 1.10. "Condition Satisfaction Date" shall have the meaning
set
forth in Section 7.2.
Section 1.11. "Damages" shall mean any loss, claim, damage,
liability,
costs and expenses (including, without limitation, reasonable
attorney's fees
and disbursements and costs and expenses of expert witnesses and
investigation).
Section 1.12. "Effective Date" shall mean the date on which the
SEC
first declares effective a Registration Statement registering the
resale of the
Registrable Securities as set forth in Section 7.2(a).
Section 1.13. Intentionally Omitted.
Section 1.14. "Exchange Act" shall mean the Securities Exchange Act
of
1934, as amended, and the rules and regulations promulgated
thereunder.
Section 1.15. "Material Adverse Effect" shall mean any
condition,
circumstance, or situation that may result in, or reasonably be
expected to
result in (i) a material adverse effect on the legality, validity
or
enforceability of the Agreement, (ii) a material adverse effect on
the results
of operations, assets, business or condition (financial or
otherwise) of the
Company, taken as a whole, or (iii) a material adverse effect on
the Company's
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ability to perform in any material respect on a timely basis its
obligations
under the Agreement.
Section 1.16. "Market Price" shall mean the average VWAP of the
Common
Stock on the Principal Market during the Pricing Period.
Section 1.17. "Maximum Advance Amount" with respect to each
Advance
Notice shall mean the greater of (i) Two Hundred Thousand Dollars
($200,000) or
(ii) the VWAP of the Common Stock on the Principal Market during
the five (5)
Trading Days immediately prior to such Advance Notice multiplied by
the average
daily volume traded (as reported by Bloomberg, LP) for the Common
Stock on the
Principal Market during the same five (5) Trading Days immediately
prior to such
Advance Notice.
Section 1.18. "NASD" shall mean the National Association of
Securities
Dealers, Inc.
Section 1.19. "Person" shall mean an individual, a corporation,
a
partnership, an association, a trust or other entity or
organization, including
a government or political subdivision or an agency or
instrumentality thereof.
Section 1.20. "Placement Agent" shall mean Rodman & Renshaw
LLC, a
registered broker-dealer.
Section 1.21. "Pricing Period" shall mean the five (5)
consecutive
Trading Days after the Advance Notice Date subject to any reduction
pursuant to
Section 2.2(c).
Section 1.22. "Principal Market" shall mean the Nasdaq Global
Market,
the Nasdaq Capital Market, the American Stock Exchange, the OTC
Bulletin Board
or the New York Stock Exchange, whichever is at the time the
principal trading
exchange or market for the Common Stock.
Section 1.23. "Purchase Price" shall be set at ninety seven
percent
(97%) of the Market Price during the Pricing Period.
Section 1.24. "Registrable Securities" shall mean the shares of
Common
Stock to be issued hereunder (i) in respect of which the
Registration Statement
has not been declared effective by the SEC, (ii) which have not
been sold under
circumstances meeting all of the applicable conditions of Rule 144
(or any
similar provision then in force) under the Securities Act ("Rule
144") or (iii)
which have not been otherwise transferred to a holder who may trade
such shares
without restriction under the Securities Act, and the Company has
delivered a
new certificate or other evidence of ownership for such securities
not bearing a
restrictive legend.
Section 1.25. "Registration Rights Agreement" shall mean the
Registration Rights Agreement dated the date hereof, regarding the
filing of the
Registration Statement for the resale of the Registrable
Securities, entered
into between the Company and the Investor.
Section 1.26. "Registration Statement" shall mean a
registration
statement on Form S-1 (if use of such form is then available to the
Company
pursuant to the rules of the SEC and, if not, on such other form
promulgated by
the SEC for which the Company then qualifies and which counsel for
the Company
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shall deem appropriate, and which form shall be available for the
resale of the
Registrable Securities to be registered thereunder in accordance
with the
provisions of this Agreement and the Registration Rights Agreement,
and in
accordance with the intended method of distribution of such
securities), for the
registration of the resale by the Investor of the Registrable
Securities under
the Securities Act.
Section 1.27. "Regulation D" shall have the meaning set forth in
the
recitals of this Agreement.
Section 1.28. "SEC" shall mean the United States Securities and
Exchange Commission.
Section 1.29. "Securities Act" shall have the meaning set forth in
the
recitals of this Agreement.
Section 1.30. "SEC Documents" shall mean Annual Reports on Form
10-K,
Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and
Proxy Statements
of the Company as supplemented to the date hereof, filed by the
Company for a
period of at least twelve (12) months immediately preceding the
date hereof or
the Advance Date, as the case may be, until such time as the
Company no longer
has an obligation to maintain the effectiveness of a Registration
Statement as
set forth in the Registration Rights Agreement.
Section 1.31. "Trading Day" shall mean any day during which the
New
York Stock Exchange shall be open for business.
Section 1.32. "Transaction Documents" shall mean this Agreement and
the
Registration Rights Agreement.
Section 1.32. "VWAP" shall mean the volume weighted average price
of
the Company's Common Stock as quoted by Bloomberg, LP.
ARTICLE II.
ADVANCES
Section 2.1. Advances.
Subject to the terms and conditions of this Agreement
(including, without limitation, the provisions of Article VII
hereof), the
Company, at its sole and exclusive option, may issue and sell to
the Investor,
and the Investor shall purchase from the Company, shares of the
Company's Common
Stock by the delivery, in the Company's sole discretion, of Advance
Notices. The
number of shares of Common Stock that the Investor shall purchase
pursuant to
each Advance shall be determined by dividing the amount of the
Advance by the
Purchase Price. No fractional shares shall be issued. Fractional
shares shall be
rounded to the next higher whole number of shares. The aggregate
maximum amount
of all Advances that the Investor shall be obligated to make under
this
Agreement shall not exceed the Commitment Amount.
Section 2.2. Mechanics.
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(a) Advance Notice. At any time during the Commitment Period,
the Company may require the Investor to purchase shares of Common
Stock by
delivering an Advance Notice to the Investor, subject to the
conditions set
forth in Section 7.2; provided, however, the amount for each
Advance as
designated by the Company in the applicable Advance Notice shall
not be more
than the Maximum Advance Amount and the aggregate amount of the
Advances
pursuant to this Agreement shall not exceed the Commitment Amount.
The Company
acknowledges that the Investor may sell shares of the Company's
Common Stock
corresponding with a particular Advance Notice after the Advance
Notice is
received by the Investor. There shall be a minimum of five (5)
Trading Days
between each Advance Notice Date.
(b) Date of Delivery of Advance Notice. An Advance Notice
shall be deemed delivered on (i) the Trading Day it is received by
facsimile or
otherwise by the Investor if such notice is received prior to 5:00
pm Eastern
Time, or (ii) the immediately succeeding Trading Day if it is
received by
facsimile or otherwise after 5:00 pm Eastern Time on a Trading Day
or at any
time on a day which is not a Trading Day. No Advance Notice may be
deemed
delivered on a day that is not a Trading Day.
(c) Minimum Acceptable Price. For the purposes of this
Agreement, the "Minimum Acceptable Price" shall mean, in connection
with each
Advance Notice delivered by the Company, eighty five percent (85%)
of the Bid
Price on the Trading Day immediately preceding the Advance Notice
Date for such
Advance Notice. Upon the issuance by the Company of an Advance
Notice the
Minimum Acceptable Price with respect to that Advance Notice shall
be determined
and (i) the Company shall automatically reduce the amount of the
Advance set
forth in such Advance Notice by twenty percent (20%) for each
Trading Day during
the Pricing Period that the VWAP of the Common Stock is below the
Minimum
Acceptable Price (each such day, an "Excluded Day"), and (ii) each
Excluded Day
shall be excluded from the Pricing Period for purposes of
determining the Market
Price. The number of shares of Common Stock to be delivered to the
Investor at
the Closing (in accordance with Section 2.3 of this Agreement)
shall correspond
with the Advance Notice amount as reduced pursuant to clause (i)
above, except
that the Company shall be obligated to sell, and the Investor shall
be obligated
to purchase any shares of Common Stock corresponding to such
Advance Notice that
have been sold by the Investor and such shares shall be purchased
at a price
equal to such Minimum Acceptable Price multiplied by ninety-seven
percent (97%).
Section 2.3. Closings. On each Advance Date (i) the Company
shall
deliver to the Investor such number of shares of the Common Stock
registered in
the name of the Investor as shall equal (x) the amount of the
Advance specified
in such Advance Notice pursuant to Section 2.1 herein, divided by
(y) the
Purchase Price and (ii) upon receipt of such shares, the Investor
shall deliver
to the Company the amount of the Advance specified in the Advance
Notice by wire
transfer of immediately available funds. In addition, on or prior
to the Advance
Date, each of the Company and the Investor shall deliver to the
other all
documents, instruments and writings required to be delivered by
either of them
pursuant to this Agreement in order to implement and effect the
transactions
contemplated herein. To the extent the Company has not paid the
fees, expenses,
and disbursements of the Investor in accordance with Section 12.4,
the amount of
such fees, expenses, and disbursements may be deducted by the
Investor (and
shall be paid to the relevant party) directly out of the proceeds
of the Advance
with no reduction in the amount of shares of the Company's Common
Stock to be
delivered on such Advance Date.
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(a) Company's Obligations Upon Closing.
(i) The Company shall deliver to the Investor the shares of
Common Stock applicable to the Advance in accordance with Section
2.3. The
certificates evidencing such shares shall be free of restrictive
legends.
(ii) the Company shall maintain the effectiveness of the
Registration Statement with respect to the resale of the shares of
Common Stock
delivered in connection with the Advance;
(iii) the Company shall obtain all material permits and
qualifications required by any applicable state for the offer and
sale of the
Registrable Securities, or have the availability of exemptions
therefrom. The
sale and issuance of the Registrable Securities shall be legally
permitted by
all laws and regulations to which the Company is subject;
(iv) the Company shall file with the SEC in a timely manner
all reports, notices and other documents required of a "reporting
company" under
the Exchange Act and applicable Commission regulations;
(v) the Company shall pay all any unpaid fees set forth in
Section 12.4 below or withhold such amounts as provided in Section
2.3; and
(vi) The Company's transfer agent shall be DWAC eligible.
(b) Investor's Obligations Upon Closing. Upon receipt of the
shares
referenced in Section 2.3(a)(i) above and provided the Company is
in compliance
with its obligations in Section 2.3, the Investor shall deliver to
the Company
the amount of the Advance specified in the Advance Notice by wire
transfer of
immediately available funds.
Section 2.5. Hardship.
In the event the Investor sells shares of the
Company's Common Stock after receipt of an Advance Notice and the
Company fails
to perform its obligations as mandated in Section 2.3, and
specifically the
Company fails to deliver to the Investor on the Advance Date the
shares of
Common Stock corresponding to the applicable Advance pursuant to
Section
2.3(a)(i), the Company acknowledges that the Investor shall suffer
financial
hardship and therefore shall be liable for any and all losses,
commissions,
fees, or financial hardship caused to the Investor.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF INVESTOR
Investor hereby represents and warrants to, and agrees with,
the
Company that the following are true and correct as of the date
hereof and as of
each Advance Date:
Section 3.1. Organization and Authorization. The Investor is
duly
incorporated or organized and validly existing in the jurisdiction
of its
incorporation or organization and has all requisite power and
authority to
purchase and hold the securities issuable hereunder. The decision
to invest and
the execution and delivery of this Agreement by such Investor, the
performance
by such Investor of its obligations hereunder and the consummation
by such
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Investor of the transactions contemplated hereby have been duly
authorized and
requires no other proceedings on the part of the Investor. The
undersigned has
the right, power and authority to execute and deliver this
Agreement and all
other instruments (including, without limitations, the Registration
Rights
Agreement), on behalf of the Investor. This Agreement has been duly
executed and
delivered by the Investor and, assuming the execution and delivery
hereof and
acceptance thereof by the Company, will constitute the legal, valid
and binding
obligations of the Investor, enforceable against the Investor in
accordance with
its terms.
Section 3.2. Evaluation of Risks. The Investor has such knowledge
and
experience in financial, tax and business matters as to be capable
of evaluating
the merits and risks of, and bearing the economic risks entailed
by, an
investment in the Company and of protecting its interests in
connection with
this transaction. It recognizes that its investment in the Company
involves a
high degree of risk.
Section 3.3. No Legal Advice From the Company. The Investor
acknowledges that it had the opportunity to review this Agreement
and the
transactions contemplated by this Agreement with his or its own
legal counsel
and investment and tax advisors. The Investor is relying solely on
such counsel
and advisors and not on any statements or representations of the
Company or any
of its representatives or agents for legal, tax or investment
advice with
respect to this investment, the transactions contemplated by this
Agreement or
the securities laws of any jurisdiction.
Section 3.4. Investment Purpose. The securities are being purchased
by
the Investor for its own account, and for investment purposes. The
Investor
agrees not to assign or in any way transfer the Investor's rights
to the
securities or any interest therein and acknowledges that the
Company will not
recognize any purported assignment or transfer except in accordance
with
applicable Federal and state securities laws. No other person has
or will have a
direct or indirect beneficial interest in the securities. The
Investor agrees
not to sell, hypothecate or otherwise transfer the Investor's
securities unless
the securities are registered under Federal and applicable state
securities laws
or unless, in the opinion of counsel satisfactory to the Company,
an exemption
from such laws is available.
Section 3.5. Accredited Investor. The Investor is an
"Accredited
Investor" as that term is defined in Rule 501(a)(3) of Regulation D
of the
Securities Act.
Section 3.6. Information. The Investor and its advisors (and
its
counsel), if any, have been furnished with all materials relating
to the
business, finances and operations of the Company and information it
deemed
material to making an informed investment decision. The Investor
and its
advisors, if any, have been afforded the opportunity to ask
questions of the
Company and its management. Neither such inquiries nor any other
due diligence
investigations conducted by such Investor or its advisors, if any,
or its
representatives shall modify, amend or affect the Investor's right
to rely on
the Company's representations and warranties contained in this
Agreement. The
Investor understands that its investment involves a high degree of
risk. The
Investor is in a position regarding the Company, which, based upon
employment,
family relationship or economic bargaining power, enabled and
enables such
Investor to obtain information from the Company in order to
evaluate the merits
and risks of this investment. The Investor has sought such
accounting, legal and
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tax advice, as it has considered necessary to make an informed
investment
decision with respect to this transaction.
Section 3.7. Receipt of Documents. The Investor and its counsel
have
received and read in their entirety: (i) this Agreement and the
Exhibits annexed
hereto; (ii) all due diligence and other information necessary to
verify the
accuracy and completeness of such representations, warranties and
covenants;
(iii) the Company's Form 10-K for the year ended December 31, 2005
and Form 10-Q
for the period ended September 30, 2006; and (iv) answers to all
questions the
Investor submitted to the Company regarding an investment in the
Company; and
the Investor has relied on the information contained therein and
has not been
furnished any other documents, literature, memorandum or
prospectus.
Section 3.8. Registration Rights Agreement. The parties have
entered
into the Registration Rights Agreement dated the date hereof.
Section 3.9. No General Solicitation. Neither the Company, nor any
of
its affiliates, nor any person acting on its or their behalf, has
engaged in any
form of general solicitation or general advertising (within the
meaning of
Regulation D under the Securities Act) in connection with the offer
or sale of
the shares of Common Stock offered hereby.
Section 3.10. Not an Affiliate. The Investor is not an officer,
director or a person that directly, or indirectly through one or
more
intermediaries, controls or is controlled by, or is under common
control with
the Company or any "Affiliate" of the Company (as that term is
defined in Rule
405 of the Securities Act).
Section 3.11. Trading Activities. The Investor's trading
activities
with respect to the Company's Common Stock shall be in compliance
with all
applicable federal and state securities laws, rules and regulations
and the
rules and regulations of the Principal Market on which the
Company's Common
Stock is listed or traded. Neither the Investor nor its affiliates
has an open
short position in the Common Stock of the Company, the Investor
agrees that it
shall not, and that it will cause its affiliates not to, engage in
any short
sales of or hedging transactions with respect to the Common Stock
during the
term of this Agreement and for a period of ninety (90) days
following the
termination of this Agreement, provided that the Company
acknowledges and agrees
that upon receipt of an Advance Notice the Investor has the right
to sell the
shares to be issued to the Investor pursuant to the Advance Notice
during the
applicable Pricing Period.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as stated below, on the disclosure schedules attached hereto
or
in the SEC Documents (as defined herein), the Company hereby
represents and
warrants to, and covenants with, the Investor that the following
are true and
correct as of the date hereof:
Section 4.1. Organization and Qualification. The Company and each
of
the subsidiaries is an entity duly incorporated or otherwise
organized, validly
existing and in good standing under the laws of the jurisdiction of
its
incorporation or organization (as applicable), with the requisite
power and
authority to own and use its properties and assets and to carry on
its business
as currently conducted. Neither the Company nor any subsidiary is
in violation
or default of any of the provisions of its respective certificate
or articles of
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incorporation, bylaws or other organizational or charter documents.
Each of the
Company and the subsidiaries is duly qualified to conduct business
and is in
good standing as a foreign corporation or other entity in each
jurisdiction in
which the nature of the business conducted or property owned by it
makes such
qualification necessary, except where the failure to be so
qualified or in good
standing, as the case may be, could not have or reasonably be
expected to result
in Material Adverse Effect and no proceeding has been instituted in
any such
jurisdiction revoking, limiting or curtailing or seeking to revoke,
limit or
curtail such power and authority or qualification.
Section 4.2 Authorization; Enforcement. The Company has the
requisite
corporate power and authority to enter into and to consummate the
transactions
contemplated by each of the Transaction Documents 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 action
is required by
the Company, its Board of Directors or its stockholders in
connection therewith
other than in connection with the Required Approvals. Each
Transaction Document
has been (or upon delivery will have been) duly executed by the
Company and,
when delivered in accordance with the terms hereof and thereof,
will constitute
the valid and binding obligation of the Company enforceable against
the Company
in accordance with its terms except (i) as limited by general
equitable
principles and applicable bankruptcy, insolvency, reorganization,
moratorium and
other laws of general application affecting enforcement of
creditors' rights
generally, (ii) as limited by laws relating to the availability of
specific
performance, injunctive relief or other equitable remedies and
(iii) insofar as
indemnification and contribution provisions may be limited by
applicable law.
Section 4.3 No Conflicts. The execution, delivery and performance
of
the Transaction Documents by the Company, the issuance and sale of
the shares of
Common Stock hereunder and the consummation by the Company of the
other
transactions contemplated hereby and thereby do not and will not
(i) conflict
with or violate any provision of the Company's or any subsidiary's
certificate
or articles of incorporation, bylaws or other organizational or
charter
documents, or (ii) conflict with, or constitute a default (or an
event that with
notice or lapse of time or both would become a default) under,
result in the
creation of any lien upon any of the properties or assets of the
Company or any
subsidiary, or give to others any rights of termination, amendment,
acceleration
or cancellation (with or without notice, lapse of time or both) of,
any
agreement, credit facility, debt or other instrument (evidencing a
Company or
subsidiary debt or otherwise) or other understanding to which the
Company or any
subsidiary is a party or by which any property or asset of the
Company or any
subsidiary is bound or affected, or (iii) conflict with or 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 or a
subsidiary is subject (including federal and state securities laws
and
regulations), or by which any property or asset of the Company or a
subsidiary
is bound or affected; except in the case of each of clauses (ii)
and (iii), such
as could not have or reasonably be expected to result in a Material
Adverse
Effect.
Section 4.4 Filings, Consents and Approvals. The Company is not
required to obtain any consent, waiver, authorization or order of,
give any
notice to, or make any filing or registration with, any court or
other federal,
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state, local or other governmental authority or other Person in
connection with
the execution, delivery and performance by the Company of the
Transaction
Documents, other than (i) filings required pursuant to the
Registration Rights
Agreement, (ii) the filing with the Commission of the Registration
Statement,
(iii) application(s) to each applicable Principal Market for the
listing of the
Common Stock for trading thereon in the time and manner required
thereby, and
(iv) the filing of Form D with the Commission and such filings as
are required
to be made under applicable state securities laws (collectively,
the "Required
Approvals").
Section 4.5 Issuance of the Securities. The shares of Common Stock
to
be issued hereunder are duly authorized and, when issued and paid
for in
accordance with the applicable Transaction Documents, will be duly
and validly
issued, fully paid and nonassessable, free and clear of all liens
imposed by the
Company other than restrictions on transfer provided for in the
Transaction
Documents.
Section 4.6 Capitalization. The capitalization of the Company is as
set
forth on Schedule 4.6. The Company has not issued any capital stock
since its
most recently filed periodic report under the Exchange Act, other
than pursuant
to the exercise of stock options under the Company's stock option
plans, the
issuance of shares of Common Stock to employees pursuant to the
Company's
employee stock purchase plan and pursuant to the conversion or
exercise of
common stock equivalents outstanding as of the date of the most
recently filed
periodic report under the Exchange Act. No Person has any right of
first
refusal, preemptive right, right of participation, or any similar
right to
participate in the transactions contemplated by the Transaction
Documents.
Except as a result of the purchase and sale of the shares of Common
Stock
hereunder, there are no outstanding options, warrants, script
rights to
subscribe to, calls or commitments of any character whatsoever
relating to, or
securities, rights or obligations convertible into or exercisable
or
exchangeable for, or giving any Person any right to subscribe for
or acquire,
any shares of Common Stock, 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. The
issuance and sale of the shares of Common Stock hereunder will not
obligate the
Company to issue shares of Common Stock or other securities to any
Person (other
than the Investor) and will not result in a right of any holder of
Company
securities to adjust the exercise, conversion, exchange or reset
price under any
of such securities. All of the outstanding shares of capital stock
of the
Company are validly issued, fully paid and nonassessable, have been
issued in
compliance with all federal and state securities laws, and none of
such
outstanding shares was issued in violation of any preemptive rights
or similar
rights to subscribe for or purchase securities. No further approval
or
authorization of any stockholder, the Board of Directors of the
Company or
others is required for the issuance and sale of the Securities.
There are no
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.
Section 4.7 SEC Reports; Financial Statements. The Company has
filed
all reports, schedules, forms, statements and other documents
required to be
filed by it under the Securities Act and the Exchange Act,
including pursuant to
Section 13(a) or 15(d) thereof, for the two years preceding the
date hereof (or
such shorter period as the Company was required by law or
regulation to file
10
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such mat
