Exhibit 10.1
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this
“ Agreement ”) is dated as of July ___, 2008, between EpiCept
Corporation, a Delaware corporation (the “
Company ”), and
each purchaser identified on the signature pages hereto (each,
including its successors and assigns, a “
Purchaser ” and
collectively the “ Purchasers ”).
WHEREAS, subject to the terms and conditions set
forth in this Agreement and pursuant to an effective registration
statement under the Securities Act of 1933, as amended (the
“ Securities Act
”), the Company desires to issue and sell to
each Purchaser, and each Purchaser, severally and not jointly,
desires to purchase from the Company, securities of the Company as
more fully described in this Agreement.
NOW, THEREFORE, IN CONSIDERATION of the mutual
covenants contained in this Agreement, and for other good and
valuable consideration the receipt and adequacy of which are hereby
acknowledged, the Company and each Purchaser agree as
follows:
ARTICLE I.
DEFINITIONS
1.1
Definitions. In
addition to the terms defined elsewhere in this Agreement, for all
purposes of this Agreement, the following terms have the meanings
set forth in this Section 1.1:
“ Action
” shall have the meaning ascribed to such term
in Section 3.1(j).
“ Affiliate ” means any Person
that, directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with a
Person as such terms are used in and construed under Rule 405 under
the Securities Act. With respect to a Purchaser, any investment
fund or managed account that is managed on a discretionary basis by
the same investment manager as such Purchaser will be deemed to be
an Affiliate of such Purchaser.
“ Board of
Directors ” means the board of
directors of the Company.
“ Business
Day ” means any day except any
Saturday, any Sunday, any day which is a federal legal holiday in
the United States or any day on which banking institutions in the
State of New York are authorized or required by law or other
governmental action to close.
“ Closing
” means the closing of the purchase and sale
of the Securities pursuant to Section 2.1.
“ Closing
Date ” means the Trading Day when
all of the Transaction Documents have been executed and delivered
by the applicable parties thereto, and all conditions precedent to
(i) the Purchasers’ obligations to pay the Subscription
Amount and (ii) the Company’s obligations to deliver the
Securities have been satisfied or waived.
“ Closing
Price ” means on any particular
date (a) the last reported closing bid price per share of
Common Stock on such date on the Trading Market (as reported by
Bloomberg L.P. at 4:15 p.m. (New York City time)), or (b) if there
is no such price on such date, then the closing bid price on the
Trading Market on the date nearest preceding such date (as reported
by Bloomberg L.P. at 4:15 p.m. (New York City time)), or (c)
if the Common Stock is not then listed or quoted on a Trading
Market and if prices for the Common Stock are then reported in the
“pink sheets” published by Pink Sheets LLC (or a
similar organization or agency succeeding to its functions of
reporting prices), the most recent bid price per share of the
Common Stock so reported, or (d) if the shares of Common Stock
are not then publicly traded the fair market value of a share of
Common Stock as determined by an independent appraiser selected in
good faith by the Purchasers of a majority in interest of the
Shares then outstanding and reasonably acceptable to the Company,
the fees and expenses of which shall be paid by the
Company.
“ Commission ” means the
Securities and Exchange Commission.
“ Common
Stock ” means the common stock of
the Company, par value $0.0001 per share, and any other class of
securities into which such securities may hereafter be reclassified
or changed into.
“ Common Stock
Equivalents ” means any securities
of the Company or the Subsidiaries which would entitle the holder
thereof to acquire at any time Common Stock, including, without
limitation, any debt, preferred stock, rights, options, warrants or
other instrument that is at any time convertible into or
exercisable or exchangeable for, or otherwise entitles the holder
thereof to receive, Common Stock.
“ Company
Counsel ” means Weil Gotshal &
Manges LLP, with offices located at 767 Fifth Avenue, New York, NY
10153.
“ Evaluation
Date ” shall have the meaning
ascribed to such term in Section 3.1(r).
“ Exchange
Act ” means the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated
thereunder.
“ Exempt
Issuance ” means the issuance of
(a) shares of Common Stock or options to employees, officers or
directors of the Company pursuant to any stock or option plan duly
adopted for such purpose, by a majority of the non-employee members
of the Board of Directors or a majority of the members of a
committee of non-employee directors established for such purpose,
(b) securities upon the exercise or exchange of or conversion of
any Securities issued hereunder and/or other securities exercisable
or exchangeable for or convertible into shares of Common Stock
issued and outstanding on the date of this Agreement, provided that
such securities have not been amended since the date of this
Agreement to increase the number of such securities or to decrease
the exercise, exchange or conversion price of such securities and
(c) securities issued pursuant to acquisitions or strategic
transactions approved by a majority of the disinterested directors
of the Company, provided that any such issuance shall only be to a
Person which is, itself or through its subsidiaries, an operating
company in a business
synergistic with the business of the Company and in
which the Company receives benefits in addition to the investment
of funds, but shall not include a transaction in which the Company
is issuing securities primarily for the purpose of raising capital
or to an entity whose primary business is investing in
securities.
“ FWS
” means Feldman Weinstein & Smith LLP with
offices located at 420 Lexington Avenue, Suite 2620, New York, New
York 10170-0002.
“ GAAP
” shall have the meaning ascribed to such term
in Section 3.1(h).
“ Hercules
” means Hercules Technology Growth Capital,
Inc. and its affiliates.
“ Indebtedness ” shall have the
meaning ascribed to such term in Section 3.1(z).
“ Intellectual
Property Rights ” shall have the
meaning ascribed to such term in Section 3.1(o).
“ Liens
” means a lien, charge, security interest,
encumbrance, right of first refusal, preemptive right or other
restriction.
“ Material Adverse
Effect ” shall have the meaning
assigned to such term in Section 3.1(b).
“ Material
Permits ” shall have the meaning
ascribed to such term in Section 3.1(m).
“ Per Share Purchase
Price ” equals
$0.25 , subject to
adjustment for reverse and forward stock splits, stock dividends,
stock combinations and other similar transactions of the Common
Stock that occur after the date of this Agreement.
“ 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.
“ Pre-Notice ” shall have the
meaning ascribed to such term in Section 4.12.
“ Proceeding ” means an action,
claim, suit, investigation or proceeding (including, without
limitation, an informal investigation or partial proceeding, such
as a deposition), whether commenced or threatened.
“ Prospectus ” means the final
prospectus filed for the Registration Statement.
“ Prospectus
Supplement ” means the preliminary
prospectus supplement to the Prospectus complying with Rule 424(b)
of the Securities Act that is filed with the Commission and the
final prospectus supplement to the Prospectus complying with Rule
424(b) of the Securities Act that is filed with the Commission and
delivered by the Company to each Purchaser at the
Closing.
“ Purchaser
Party ” shall have the meaning
ascribed to such term in Section 4.8.
“ Registration
Statement ” means the effective
registration statement with Commission file No. 333-145561 which
registers the sale of the Shares, the Warrants and the Warrant
Shares by the Purchasers.
“ Required
Approvals ” shall have the meaning
ascribed to such term in Section 3.1(e).
“ Rule 144
” means Rule 144 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from
time to time, or any similar rule or regulation hereafter adopted
by the Commission having substantially the same effect as such
Rule.
“ SEC
Reports ” shall have the meaning
ascribed to such term in Section 3.1(h).
“ Securities ” means the Shares,
the Warrants and the Warrant Shares.
“ Securities
Act ” means the Securities Act of
1933, as amended, and the rules and regulations promulgated
thereunder.
“ Shares
” means the shares of Common Stock issued or
issuable to each Purchaser pursuant to this Agreement.
“ Short
Sales ” means all “short
sales” as defined in Rule 200 of Regulation SHO under the
Exchange Act (but shall not be deemed to include the location
and/or reservation of borrowable shares of Common
Stock).
“ Subscription
Amount ” means, as to each
Purchaser, the aggregate amount to be paid for Shares and Warrants
purchased hereunder as specified below such Purchaser’s name
on the signature page of this Agreement and next to the heading
“Subscription Amount,” in United States dollars and in
immediately available funds.
“ Time of Sale
Prospectus ” means the Prospectus,
together with the Prospectus Supplement, if any, and the free
writing prospectuses, if any, used in connection with the offering
of the Securities, including any documents incorporated by
reference therein.
“ Trading
Day ” means a day on which the
Common Stock is traded on the Trading Market or an over-the-counter
market, if applicable.
“ Trading
Market ” means the following
markets or exchanges on which the Common Stock is listed or quoted
for trading on the date in question: the American Stock Exchange,
The Nasdaq Capital Market, The Nasdaq Global Market, The Nasdaq
Global Select Market, the New York Stock Exchange or the OTC
Bulletin Board.
“ Transaction
Documents ” means this Agreement,
the Warrants and any other documents or agreements executed in
connection with the transactions contemplated hereunder.
“ Transfer
Agent ” means American Stock
Transfer & Trust Company, the current transfer agent of the
Company, with a mailing address of 6201 15th Avenue, 3
rd Floor, Brooklyn, NY 11219 and a facsimile number of
718-921-8327, and any successor transfer agent of the
Company.
“ VWAP
” means, for any date, the price determined by
the first of the following clauses that applies: (a) if the Common
Stock is then listed or quoted on a Trading Market, the daily
volume weighted average price of the Common Stock for such date (or
the nearest preceding date) on the Trading Market on which the
Common Stock is then listed or quoted for trading as reported by
Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York
City time) to 4:02 p.m. (New York City time); (b) if the OTC
Bulletin Board is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding
date) on the OTC Bulletin Board; (c) if the Common Stock is not
then quoted for trading on the OTC Bulletin Board and if prices for
the Common Stock are then reported in the “Pink Sheets”
published by Pink Sheets, LLC (or a similar organization or agency
succeeding to its functions of reporting prices), the most recent
bid price per share of the Common Stock so reported; or (d) in
all other cases, the fair market value of a share of Common Stock
as determined by an independent appraiser selected in good faith by
the Purchasers of a majority in interest of the Shares then
outstanding and reasonably acceptable to the Company, the fees and
expenses of which shall be paid by the Company.
“ Warrants
” means, collectively, the Common Stock
purchase warrants delivered to the Purchasers at the Closing in
accordance with Section 2.2(a) hereof, which Warrants shall be
exercisable on or after the 6 month anniversary of the date hereof
and have a term of exercise equal to 5 years from the Initial
Exercise Date, in the form of Exhibit
A attached hereto.
“ Warrant
Shares ” means the shares of Common
Stock issuable upon exercise of the Warrants.
ARTICLE II.
PURCHASE AND SALE
2.1
Closing . On the
Closing Date, upon the terms and subject to the conditions set
forth herein, substantially concurrent with the execution and
delivery of this Agreement by the parties hereto, the Company
agrees to sell, and the Purchasers, severally and not jointly,
agree to purchase, up to an aggregate of $500,000 of Shares and
Warrants. Each Purchaser shall deliver to the Company, via wire
transfer or a certified check, immediately available funds equal to
its Subscription Amount and the Company shall deliver to each
Purchaser its respective Shares and a Warrant as determined
pursuant to Section 2.2(a), and the Company and each Purchaser
shall deliver the other items set forth in Section 2.2 deliverable
at the Closing. Upon satisfaction of the covenants and conditions
set forth in Sections 2.2 and 2.3, the Closing shall occur at the
offices of FWS or such other location as the parties shall mutually
agree.
(a) On or
prior to the Closing Date, the Company shall deliver or cause to be
delivered to each Purchaser the following:
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(i)
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this Agreement duly executed by the
Company;
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(ii) a
legal opinion of Company Counsel, substantially in the form
of Exhibit B attached hereto;
(iii) a copy of
the irrevocable instructions to the Company’s transfer agent
instructing the transfer agent to deliver via the Depository Trust
Company Deposit Withdrawal Agent Commission System (“
DWAC ”) Shares
equal to such Purchaser’s Subscription Amount divided by the
Per Share Purchase Price, registered in the name of such
Purchaser;
(iv) a Warrant
registered in the name of such Purchaser to purchase up to a number
of shares of Common Stock equal to 100% of the number of Shares
purchased by each Purchaser, with an exercise price equal to
$0.39 ,
subject to adjustment therein (such Warrant
certificate may be delivered within three Trading Days of the
Closing Date); and
(v) the
Prospectus and Prospectus Supplement (unless the conditions set
forth under Rule 172 under the Securities Act have been
satisfied).
(b) On or
prior to the Closing Date, each Purchaser shall deliver or cause to
be delivered to the Company the following:
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(i)
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this Agreement duly executed by such Purchaser;
and
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(ii) such
Purchaser’s Subscription Amount by wire transfer to the
account as specified in writing by the Company.
(a) The
obligations of the Company hereunder in connection with the Closing
are subject to the following conditions being met:
(i) the accuracy
in all material respects on the Closing Date of the representations
and warranties of the Purchasers contained herein;
(ii) all
obligations, covenants and agreements of each Purchaser required to
be performed at or prior to the Closing Date shall have been
performed; and
(iii) the
delivery by each Purchaser of the items set forth in Section 2.2(b)
of this Agreement.
(b) The
respective obligations of the Purchasers hereunder in connection
with the Closing are subject to the following conditions being
met:
(i) the accuracy
in all material respects on the Closing Date of the representations
and warranties of the Company contained herein;
(ii) all
obligations, covenants and agreements of the Company required to be
performed at or prior to the Closing Date shall have been
performed;
(iii) the
delivery by the Company of the items set forth in Section 2.2(a) of
this Agreement;
(iv) there shall
have been no Material Adverse Effect with respect to the Company
since the date hereof; and
(v) from
the date hereof to the Closing Date, trading in the Common Stock
shall not have been suspended by the Commission or the
Company’s principal Trading Market (except for any suspension
of trading of limited duration agreed to by the Company, which
suspension shall be terminated prior to the Closing), and, at any
time prior to the Closing Date, trading in securities generally as
reported by Bloomberg L.P. shall not have been suspended or
limited, or minimum prices shall not have been established on
securities whose trades are reported by such service, or on any
Trading Market, nor shall a banking moratorium have been declared
either by the United States or New York State authorities nor shall
there have occurred any material outbreak or escalation of
hostilities or other national or international calamity of such
magnitude in its effect on, or any material adverse change in, any
financial market which, in each case, in the reasonable judgment of
each Purchaser, makes it impracticable or inadvisable to purchase
the Securities at the Closing.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1
Representations and Warranties of the
Company . Except as set forth in the
Registration Statement, the Prospectus, the Prospectus Supplement
or the SEC Reports, which the Registration Statement, Prospectus,
Prospectus Supplement and SEC Reports shall qualify any
representation or warranty otherwise made herein to the extent of
such disclosure, the Company hereby makes the following
representations and warranties set forth below to each
Purchaser:
(a)
Subsidiaries . The
Company owns, directly or indirectly, all of the capital stock or
other equity interests of each of its direct and indirect
subsidiaries (individually, a “ Subsidiary ”) free and clear of
any Liens, (except for Liens held by Hercules), and all of the
issued and outstanding shares of capital stock of each Subsidiary
are validly issued and are fully paid, non-assessable and free of
preemptive and similar rights to subscribe for or purchase
securities.
(b)
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 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 (i) a material adverse
effect on the legality, validity or enforceability of any
Transaction Document with respect to the Company, (ii) a material
adverse effect on the results of operations, assets, business or
financial condition of the Company and the Subsidiaries, taken as a
whole, or (iii) a material adverse effect on the Company’s
ability to perform in any material respect on a timely basis its
obligations under any Transaction Document (any of (i), (ii) or
(iii), a “ 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.
(c)
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, the Board of Directors or the Company’s 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) that rights to indemnification and contribution thereunder
may be limited by federal or state securities laws or public policy
relating thereto.
(d)
No Conflicts . The
execution, delivery and performance of the Transaction Documents by
the Company, the issuance and sale of the Securities 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 (except as may have been waived) or
(iii) subject to the Required Approvals, 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 would not have a Material Adverse
Effect.
(e)
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, 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
Section 4.4 of this Agreement, (ii) the filing with the Commission
of the Prospectus Supplement, (iii) application(s) to each
applicable Trading Market for the listing of the Securities for
trading thereon in the time and manner required thereby and (iv)
such filings as are required to be made under applicable state
securities laws, FINRA and the Trading Market (collectively, the
“ Required Approvals
”).
(f)
Issuance of the Securities;
Registration . The Securities 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 any restrictions on transfer provided
herein. The Warrant Shares, when issued in accordance with the
terms of the Warrants, will be validly issued, fully paid and
nonassessable, free and clear of all Liens imposed by the Company.
Other than the Warrant Shares, the Company has reserved from its
duly authorized capital stock the maximum number of shares of
Common Stock issuable pursuant to this Agreement. The Company has
prepared and filed the Registration Statement in conformity with
the requirements of the Securities Act, which became effective
on September 18, 2007 (the “ Effective Date ”), including
the Prospectus, and such amendments and supplements thereto as may
have been required to the date of this Agreement. The Registration
Statement is effective under the Securities Act and no stop order
preventing or suspending the effectiveness of the Registration
Statement or suspending or preventing the use of the Prospectus has
been issued by the Commission and no proceedings for that purpose
have been instituted or, to the knowledge of the Company, are
threatened by the Commission. The Company, if required by the rules
and regulations of the Commission, proposes to file the Prospectus,
with the Commission pursuant to Rule 424(b). At the time the
Registration Statement and any amendments thereto became effective,
at the date of this Agreement and at the Closing Date, the
Registration Statement and any amendments thereto conformed and
will conform in all material respects to the requirements of the
Securities Act and did not and will not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading; and the Prospectus and any amendments or
supplements thereto, at time the Prospectus or any amendment or
supplement thereto was issued and at the Closing Date, conformed
and will conform in all material respects to the requirements of
the Securities Act and did not
and will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order
to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(g)
Capitalization . The
capitalization of the Company is as described in the Registration
Statement and the SEC Reports. The Company has not issued any
capital stock since its most recently filed periodic report under
the Exchange Act, other than as described in SEC Reports, or
pursuant to the exercise of employee 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 plans and pursuant to the conversion or exercise of
Common Stock Equivalents. 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
Securities and as described in the Registration Statement,
Prospectus, Prospectus Supplement or the SEC Reports, there are no
outstanding options, warrants, scrip 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. Except as disclosed in
the Prospectus, Prospectus Supplement and the Registration
Statement or the SEC Reports, the issuance and sale of the
Securities will not obligate the Company to issue shares of Common
Stock or other securities to any Person (other than the Purchasers)
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 or others
is required for the issuance and sale of the Securities. Except as
described in the Registration Statement and the SEC Reports, 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.
(h)
SEC Reports; Financial Statements
. The Company has complied in all material respects
with requirements to file all reports, schedules, forms, statements
and other documents required to be filed by the Company under the
Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for the year preceding the date hereof (or such shorter period as
the Company was required by law or regulation to file such
material) (the foregoing materials, including the exhibits thereto
and documents incorporated by reference therein, 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 Securities Act and the
Exchange Act, as applicable, and the rules and regulation of the
Commission
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
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 Commission with
respect thereto as in effect at the time of filing. Such financial
statements have been prepared in accordance with United States
generally accepted accounting principles applied on a consistent
basis during the periods involved (“ GAAP ”), except as may be
otherwise specified in such financial statements or the notes
thereto and except that unaudited financial statements may not
contain all footnotes required by GAAP, and fairly present in all
material respects the financial position of the Company and its
consolidated subsidiaries as of and for the dates thereof and the
results of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.
(i)
Material Changes; Undisclosed Events, Liabilities
or Developments . Since the date of the
latest audited financial statements included within the SEC Reports
or the Registration Statement, except as disclosed in the SEC
Reports, (i) there has been no event, occurrence or development
that has had or that would result in a Material Adverse Effect,
(ii) the Company has not incurred any liabilities (contingent or
otherwise) other than (A) trade payables and accrued expenses
incurred in the ordinary course of business consistent with past
practice and (B) liabilities not required to be reflected in the
Company’s financial statements pursuant to GAAP or disclosed
in filings made with the Commission, (iii) the Company has not
altered its method of accounting, (iv) the Company has not declared
or made any dividend or distribution of cash or other property to
its stockholders or purchased, redeemed or made any agreements to
purchase or redeem any shares of its capital stock and (v) the
Company has not issued any equity securities to any officer,
director or Affiliate, except pursuant to existing Company equity
compensation plans. The Company does not have pending before the
Commission any request for confidential treatment of information.
Except for the issuance of the Securities contemplated by this
Agreement or as set forth in the Prospectus Supplement or the SEC
Reports, no event, liability or development has occurred or exists
with respect to the Company or its Subsidiaries or their respective
business, properties, operations or financial condition, that would
be required to be disclosed by the Company under applicable
securities laws at the time this representation is made or deemed
made that has not been publicly disclosed prior to the date of this
Agreement or in the Time of Sale Prospectus.
(j)
Litigation . Except as
disclosed in the Registration Statement, the Prospectus, the
Prospectus Supplement or the SEC Reports, there is no action, suit,
inquiry, notice of violation, proceeding or investigation pending
or, to the knowledge of the Company, threatened against or
affecting the Company, any Subsidiary or any of their respective
properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state,
county, local or foreign) (collectively, an “
Action ”) which
(i) adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the
Securities or (ii) would, if
there were an unfavorable decision, have a Material
Adverse Effect. Neither the Company nor any Subsidiary, nor any
director or officer thereof, is or has been the subject of any
Action involving a claim of violation of or liability under federal
or state securities laws or a claim of breach of fiduciary duty.
There has not been, and to the knowledge of the Company, there is
not pending or contemplated, any investigation by the Commission
involving the Company or any current or former director or officer
of the Company. To the knowledge of the Company, the Commission has
not issued any stop order or other order suspending the
effectiveness of any registration statement filed by the Company or
any Subsidiary under the Exchange Act or the Securities
Act.
(k)
Labor Relations . No
material labor dispute exists or, to the knowledge of the Company,
is imminent with respect to any of the employees of the Company
which would have a Material Adverse Effect. No executive officer,
to the knowledge of the Company, is in violation of any material
term of any employment contract, confidentiality, disclosure or
proprietary information agreement or non-competition agreement, or
any other contract or agreement or any restrictive covenant, and,
to the Company’s knowledge, the continued employment of each
such executive officer does not subject the Company or any of its
Subsidiaries to any liability with respect to any of the foregoing
matters. The Company and its Subsidiaries are in compliance with
all U.S. federal, state, local and foreign laws and regulations
relating to employment and employment practices, terms and
conditions of employment and wages and hours, except where the
failure to be in compliance would not, individually or in the
aggregate, have a Material Adverse Effect.
(l)
Compliance . Except as
disclosed in the Registration Statement, the Prospectus, the
Prospectus Supplement or the SEC Reports, neither the Company nor
any Subsidiary (i) is in default under or in violation of (and no
event has occurred that has not been waived that, with notice or
lapse of time or both, would result in a default by the Company or
any Subsidiary under),
