Exhibit 10.46
SECURITIES PURCHASE
AGREEMENT
THIS SECURITIES
PURCHASE AGREEMENT (this “ Agreement ”),
dated as of August 29, 2007, by and among SENESCO TECHNOLOGIES,
INC., a Delaware corporation (the “ Company
”), and the Buyers listed on Schedule I attached hereto
(individually, a “ Buyer ” or collectively
“ Buyers ”).
WITNESSETH
WHEREAS , the
Company and the Buyer(s) are executing and delivering this
Agreement in reliance upon an exemption from securities
registration pursuant to Section 4(2) and/or Rule 506 of Regulation
D (“ Regulation D ”) as promulgated by the U.S.
Securities and Exchange Commission (the “ SEC ”)
under the Securities Act of 1933, as amended (the “
Securities Act ”);
WHEREAS , the
parties desire that, upon the terms and subject to the conditions
contained herein, the Company shall issue and sell to the Buyer(s),
as provided herein, and the Buyer(s) shall purchase (i) up to Five
Million Dollars ($5,000,000) of secured convertible debentures in
the form attached hereto as “ Exhibit A ” (the
“ Convertible Debentures ”), which shall be
convertible into shares of the Company’s common stock, par
value $0.01 (the “ Common Stock ”) (as
converted, the “ Conversion Shares ”), and (ii)
Series A warrants substantially in the form attached hereto as
“ Exhibit B ” and Series B warrants
substantially in the form attached hereto as “ Exhibit
C ” (collectively, the “ Warrants ”),
to acquire up to that number of additional shares of Common Stock
set forth opposite such Buyer’s name in columns (5), (6) and
(7) of the Schedule I (as exercised, the “ Warrant
Shares ”), of which Two Million Dollars ($2,000,000)
shall be funded within two (2) business days following the later of
(i) the date Stockholder Approval (as defined below) is obtained or
(ii) the date that the initial registration statement relating to
the YA Global Closing (as defined below) is filed with the
Securities and Exchange Commission (the “ First
Closing ”), One Million Five Hundred Thousand Dollars
($1,500,000) shall be funded on the First Milestone Date (as
defined below) (the “ Second Closing ”), and One
Million Five Hundred Thousand Dollars ($1,500,000) shall be funded
on the Second Milestone Date (as defined below) (the “
Third Closing ”) (individually referred to as a
“ Closing ” collectively referred to as the
“ Closings ”), for a total purchase price of up
to Five Million Dollars ($5,000,000), (the “ Purchase
Price ”) in the respective amounts set forth opposite
each Buyer(s) name on Schedule I (the “ Subscription
Amount ”);
WHEREAS ,
contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a
Registration Rights Agreement (the “ Registration Rights
Agreement ”) pursuant to which the Company has agreed to
provide certain registration rights under the Securities Act and
the rules and regulations promulgated there under, and applicable
state securities laws;
WHEREAS , the
Convertible Debentures are secured by (i) a security interest in
all of the assets of the Company and of each of the Company’s
subsidiaries as evidenced by the security agreement substantially
in the form agreed to by the Company and the Buyer on the date
hereof (the “ Security Agreement ”) and (ii) a
security interest in all of the intellectual property of the
Company and of each of the Company’s subsidiaries as
evidenced by the patent security agreement substantially in the
form agreed to by the Company and the Buyer on the date hereof
(the “
Patent Security Agreement ” and together with the
Security Agreement collectively the “ Security
Documents ”);
WHEREAS ,
contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering
Irrevocable Transfer Agent Instructions (the “ Irrevocable
Transfer Agent Instructions ”); and
WHEREAS , the
Convertible Debentures, the Conversion Shares, the Warrants, and
the Warrants Shares collectively are referred to herein as (the
“ Securities ”).
NOW, THEREFORE , in
consideration of the mutual covenants and other agreements
contained in this Agreement, the Company and the Buyer(s) hereby
agree as follows:
1. PURCHASE AND SALE
OF CONVERTIBLE DEBENTURES .
(a)
Purchase of Convertible Debentures . Subject to the
satisfaction (or waiver) of the terms and conditions of this
Agreement, each Buyer agrees, severally and not jointly, to
purchase at each Closing and the Company agrees to sell and issue
to each Buyer, severally and not jointly, at each Closing,
Convertible Debentures in amounts corresponding with the
Subscription Amount set forth opposite each Buyer’s name on
Schedule I hereto and the Warrants to acquire up to that number of
Warrant Shares as set forth opposite such Buyer’s name in
columns (5), (6) and (7) on Schedule I. The First Milestone
Date shall be defined as the Company entering into a supply
agreement with a third party manufacturer for sufficient quantity
and quality of nano-particle for encapsulation of eIF5A gene to be
used in toxicology and proof of concept human studies under a
United States Food and Drug Administration (“ FDA
”) accepted Investigational New Drug (“ IND
”) application. The Second Milestone Date shall be
defined as the Company entering into a supply agreement with a
third party manufacturer to provide sufficient quantity and quality
of eIF5A DNA to carry out toxicology and proof of concept human
studies under a FDA accepted IND application.
(b)
Closing Dates . The First Closing of the purchase and
sale of the Convertible Debentures and Warrants shall take place at
10:00 a.m. Eastern Standard Time on the second (2 nd )
business day following the later of (i) the date Stockholder
Approval is obtained or (ii) the date that the initial registration
statement relating to the YA Global Closing is filed with the
Securities and Exchange Commission, subject to notification of
satisfaction of the conditions to the First Closing set forth
herein and in Sections 6 and 7 below (or such later date as is
mutually agreed to by the Company and the Buyer(s)) (the “
First Closing Date ”), the Second Closing of the
purchase and sale of the Convertible Debentures shall take place at
4:00 p.m. Eastern Standard Time on the First Milestone Date,
subject to notification of satisfaction of the conditions to the
Second Closing set forth herein and in Sections 6 and 7 below (or
such later date as is mutually agreed to by the Company and the
Buyer(s)) (the “ Second Closing Date ”), and the
Third Closing of the purchase and sale of the Convertible
Debentures shall take place at 10:00 a.m. Eastern Standard Time on
the Second Milestone Date, subject to notification of satisfaction
of the conditions to the Third Closing set forth herein and in
Sections 6 and 7 below (or such earlier date as is mutually agreed
to by the Company and the Buyer(s)) (the “ Third Closing
Date ”) (collectively referred to a the “
Closing Dates ”). The Closings shall occur on
the respective Closing Dates at the offices of Morgan, Lewis &
Bockius LLP, 502 Carnegie Center,
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Princeton, New Jersey 08540 (or such other
place as is mutually agreed to by the Company and the
Buyer(s)). Notwithstanding the foregoing or anything else in
this Agreement to the contrary (including, but not limited to, the
terms of Section 7 below), the Buyer hereunder shall not be
obligated to fund any amounts to the Company which would, when
aggregated with all other amounts previously funded by the Buyer
hereunder, exceed the aggregate amounts funded by YA Global to the
Company as of such date pursuant to subsection (d)
below.
(c)
Form of Payment . Subject to the satisfaction of the
terms and conditions of this Agreement, on each Closing Date, (i)
the Buyers shall deliver to the Company such aggregate proceeds for
the Convertible Debentures and Warrants to be issued and sold to
such Buyer at such Closing, minus the fees to be paid directly from
the proceeds of such Closing as set forth herein, via irrevocable
wire transfer, and (ii) the Company shall deliver to each Buyer,
Convertible Debentures and Warrants which such Buyer is purchasing
at such Closing in amounts indicated opposite such Buyer’s
name on Schedule I, duly executed on behalf of the Company.
(d)
YA Global Agreement . In addition to the foregoing,
Buyer hereby agrees to the Company’s sale and issuance of an
additional $5,000,000 of convertible debentures to YA Global
Investments, L.P. (“ YA Global ”) (the “
YA Global Closing ”) on substantially similar terms
hereunder subject to Stockholder Approval as set forth in Section
1(e) below.
(e)
Stockholders Approval . The Company shall call and
hold a special meeting of the shareholders as soon as reasonably
practicable (and use commercially reasonable best efforts to call
and hold such meeting within ninety (90) days of the date hereof),
for the purpose of (i) approving the transactions contemplated
herein and the YA Global Closing, including the issuance of all
shares of Common Stock issuable pursuant to the terms of the
Transaction Documents, including, but not limited to, all shares of
Common Stock issuable upon conversion of the Debenture, the
exercise of the Warrants and the issuance of the Interest Shares,
and after giving effect to any adjustments in the amount of shares
of Common Stock issuable pursuant to the Transaction Documents as a
result of any stock split, reverse stock split, stock dividend,
reorganization, recapitalization, reclassification or other like
change, and (ii) increasing the authorized Common Stock of the
Company to at least 100,000,000 shares of Common Stock (such
affirmative approval being referred to herein as the “
Stockholder Approval ”) The Company’s
Board shall recommend to the shareholders to vote in favor of
approving the transactions contemplated herein and the YA Global
Closing and the increase of the Company’s authorized Common
Stock; provided , however that the Board shall not be
obligated to make such a recommendation if the Board determines in
good faith, after receiving the advice of its independent legal and
financial advisors, that such a recommendation would cause the
Board to breach its fiduciary duties.
2.
BUYER’S REPRESENTATIONS AND WARRANTIES .
Each Buyer
represents and warrants, severally and not jointly,
that:
(a)
Investment Purpose . Each Buyer is acquiring the
Securities for its own account for investment only and not with a
view towards, or for resale in connection with,
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the
public sale or distribution thereof, except pursuant to sales
registered or exempted under the Securities Act; provided ,
however, that by making the representations herein, such Buyer
reserves the right to dispose of the Securities at any time in
accordance with or pursuant to an effective registration statement
covering such Securities or an available exemption under the
Securities Act. Such Buyer does not presently have any
agreement or understanding, directly or indirectly, with any Person
to distribute any of the Securities.
(b)
Accredited Investor Status . Each Buyer is an “
Accredited Investor ” as that term is defined in Rule
501(a)(3) of Regulation D.
(c)
Reliance on Exemptions . Each Buyer understands that
the Securities are being offered and sold to it in reliance on
specific exemptions from the registration requirements of United
States federal and state securities laws and that the Company is
relying in part upon the truth and accuracy of, and such
Buyer’s compliance with, the representations, warranties,
agreements, acknowledgments and understandings of such Buyer set
forth herein in order to determine the availability of such
exemptions and the eligibility of such Buyer to acquire the
Securities.
(d)
Information . Each Buyer and its advisors (and his, or
its, counsel), if any, have been furnished with all materials
relating to the business, finances and operations of the Company
and information he deemed material to making an informed investment
decision regarding his purchase of the Securities, which have been
requested by such Buyer. Each Buyer 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 Buyer or its advisors,
if any, or its representatives shall modify, amend or affect such
Buyer’s right to rely on the Company’s representations
and warranties contained in Section 3 below. Each Buyer
understands that its investment in the Securities involves a high
degree of risk. Each Buyer is in a position regarding the
Company, which, based upon employment, family relationship or
economic bargaining power, enabled and enables such Buyer to obtain
information from the Company in order to evaluate the merits and
risks of this investment. Each Buyer has sought such
accounting, legal and tax advice, as it has considered necessary to
make an informed investment decision with respect to its
acquisition of the Securities.
(e)
No Governmental Review . Each Buyer understands that
no United States federal or state agency or any other government or
governmental agency has passed on or made any recommendation or
endorsement of the Securities, or the fairness or suitability of
the investment in the Securities, nor have such authorities passed
upon or endorsed the merits of the offering of the Securities.
(f)
Transfer or Resale . Each Buyer understands that
except as provided in the Registration Rights Agreement: (i) the
Securities have not been and are not being registered under the
Securities Act or any state securities laws, and may not be offered
for sale, sold, assigned or transferred unless (A) subsequently
registered thereunder, (B) such Buyer shall have delivered to the
Company an opinion of counsel, in a generally acceptable form, to
the effect that such Securities to be sold, assigned or transferred
may be sold, assigned or transferred pursuant to an exemption from
such registration requirements, or (C) such Buyer provides the
Company with reasonable assurances (in the form of seller and
broker representation letters) that
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such Securities can be sold, assigned or
transferred pursuant to Rule 144, Rule 144(k), or Rule 144A
promulgated under the Securities Act, as amended (or a successor
rule thereto) (collectively, “ Rule 144 ”), in
each case following the applicable holding period set forth
therein; (ii) any sale of the Securities made in reliance on Rule
144 may be made only in accordance with the terms of Rule 144 and
further, if Rule 144 is not applicable, any resale of the
Securities under circumstances in which the seller (or the person
through whom the sale is made) may be deemed to be an underwriter
(as that term is defined in the Securities Act) may require
compliance with some other exemption under the Securities Act or
the rules and regulations of the SEC thereunder; and (iii) neither
the Company nor any other person is under any obligation to
register the Securities under the Securities Act or any state
securities laws or to comply with the terms and conditions of any
exemption thereunder.
(g)
Legends . Each Buyer agrees to the imprinting, so long
as is required by this Section 2(g), of a restrictive legend in
substantially the following form:
THE SECURITIES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TOWARD RESALE AND MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS, OR AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM,
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE
STATE SECURITIES LAWS.
Certificates evidencing
the Conversion Shares or Warrant Shares shall not contain any
legend (including the legend set forth above), (i) while a
registration statement (including the Registration Statement)
covering the resale of such security is effective under the
Securities Act, (ii) following any sale of such Conversion Shares
or Warrant Shares pursuant to Rule 144, (iii) if such Conversion
Shares or Warrant Shares are eligible for sale under Rule 144(k),
or (iv) if such legend is not required under applicable
requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the
SEC). The Company shall cause its counsel to issue a legal
opinion to the Company’s transfer agent promptly after the
effective date (the “ Effective Date ”) of a
Registration Statement if required by the Company’s transfer
agent to effect the removal of the legend hereunder. If all
or any portion of the Convertible Debentures or Warrants are
exercised by a Buyer that is not an Affiliate of the Company (a
“ Non-Affiliated Buyer ”) at a time when there
is an effective registration statement to cover the resale of the
Conversion Shares or the Warrant Shares, such Conversion Shares or
Warrant Shares shall be issued free of all legends. The
Company agrees that following the Effective Date or at such time as
such legend is no longer required under this Section 2(g), it will,
no later than three (3) Trading Days following the delivery by a
Non-Affiliated Buyer to the Company or the Company’s transfer
agent of a certificate representing Conversion Shares or Warrant
Shares, as
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the case may be, issued
with a restrictive legend (such third Trading Day, the “
Legend Removal Date ”), deliver or cause to be
delivered to such Non-Affiliated Buyer a certificate representing
such shares that is free from all restrictive and other
legends. The Company may not make any notation on its records
or give instructions to any transfer agent of the Company that
enlarge the restrictions on transfer set forth in this
Section. Each Buyer acknowledges that the Company’s
agreement hereunder to remove all legends from Conversion Shares or
Warrant Shares is not an affirmative statement or representation
that such Conversion Shares or Warrant Shares are freely
tradable. Each Buyer, severally and not jointly with the
other Buyers, agrees that the removal of the restrictive legend
from certificates representing Securities as set forth in this
Section 2(g) is predicated upon the Company’s reliance that
the buyer will sell any Securities pursuant to either the
registration requirements of the Securities Act, including any
applicable prospectus delivery requirements, or an exemption
therefrom, and that if Securities are sold pursuant to a
Registration Statement, they will be sold in compliance with the
plan of distribution set forth therein.
(h)
Authorization, Enforcement . This Agreement has been
duly and validly authorized, executed and delivered on behalf of
such Buyer and is a valid and binding agreement of such Buyer
enforceable in accordance with its terms, except as such
enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation and other similar laws relating to, or affecting
generally, the enforcement of applicable creditors’ rights
and remedies.
(i)
Receipt of Documents . Each Buyer and his or its
counsel has received and read in their entirety: (i) this
Agreement and each representation, warranty and covenant set forth
herein and the Transaction Documents (as defined herein); (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 fiscal year
ended June 30, 2006; (iv) the Company’s Form 10-Q for the
fiscal quarter ended March 31, 2007 and (v) answers to all
questions each Buyer submitted to the Company regarding an
investment in the Company; and each Buyer has relied on the
information contained therein and has not been furnished any other
documents, literature, memorandum or prospectus.
(j)
Due Formation of Corporate and Other Buyers . If the
Buyer(s) is a corporation, trust, partnership or other entity that
is not an individual person, it has been formed and validly exists
and has not been organized for the specific purpose of purchasing
the Securities and is not prohibited from doing so.
(k)
No Legal Advice From the Company . Each Buyer
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. Each Buyer
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.
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3.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY .
Except as set
forth under the corresponding section of the Disclosure Schedules
or in the Company’s SEC Documents (as defined below) which
Disclosure Schedules and/or SEC Documents shall be deemed a part
hereof and to qualify any representation or warranty otherwise made
herein to the extent of such disclosure, the Company hereby makes
the representations and warranties set forth below to each
Buyer:
(a)
Subsidiaries . All of the direct and indirect
subsidiaries of the Company are set forth on Schedule 3(a).
The Company owns, directly or indirectly, all of the capital stock
or other equity interests of each subsidiary free and clear of any
liens, and all 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 its
subsidiaries are corporations duly organized and validly existing
in good standing under the laws of the jurisdiction in which they
are incorporated, and have the requisite corporate power to own
their properties and to carry on their business as now being
conducted. Each of the Company and its subsidiaries is duly
qualified as a foreign corporation to do business and is in good
standing in every jurisdiction in which the nature of the business
conducted by it makes such qualification necessary, except to the
extent that the failure to be so qualified or be in good standing
would not have or reasonably be expected to result in (i) a
material adverse effect on the legality, validity or enforceability
of any Transaction Document, (ii) a material adverse effect on the
results of operations, assets, business or condition (financial or
otherwise) 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, Compliance with Other
Instruments . (i) The Company has the requisite corporate
power and authority to enter into and perform its obligations under
this Agreement, the Convertible Debentures, the Warrants, the
Security Documents, the Registration Rights Agreement, the
Irrevocable Transfer Agent Instructions, and each of the other
agreements entered into by the parties hereto in connection with
the transactions contemplated by this Agreement (collectively the
“ Transaction Documents ”) and to issue the
Securities in accordance with the terms hereof and thereof, (ii)
the execution and delivery of the Transaction Documents by the
Company and the consummation by it of the transactions contemplated
hereby and thereby, including, without limitation, the issuance of
the Securities, the reservation for issuance and the issuance of
the Conversion Shares, and the reservation for issuance and the
issuance of the Warrant Shares, have been duly authorized by the
Company’s Board of Directors and no further consent or
authorization is required by the Company, its Board of Directors or
its stockholders, (iii) the Transaction Documents have been duly
executed and delivered by the Company, (iv) the Transaction
Documents constitute the valid and binding obligations of the
Company enforceable against the Company in accordance with their
terms, except as such enforceability may be limited by general
principles of equity or
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applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating
to, or affecting generally, the enforcement of creditors’
rights and remedies. The authorized officer of the Company
executing the Transaction Documents knows of no reason why the
Company cannot file the Registration Statement as required under
the Registration Rights Agreement or perform any of the
Company’s other obligations under the Transaction
Documents.
(d)
Capitalization . The authorized capital stock of the
Company consists of 60,000,000 shares of Common Stock and 5,000,000
shares of Preferred Stock, par value $0.01 (“ Preferred
Stock ”) of which 17,473,694 shares of Common Stock and
zero shares of Preferred Stock are issued and outstanding.
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. Except as disclosed in Schedule 3(d): (i) none of
the Company’s capital stock is subject to preemptive rights
or any other similar rights or any liens or encumbrances suffered
or permitted by the Company; (ii) there are no outstanding options,
warrants, scrip, rights to subscribe to, calls or commitments of
any character whatsoever relating to, or securities or rights
convertible into, or exercisable or exchangeable for, any capital
stock of the Company or any of its subsidiaries, or contracts,
commitments, understandings or arrangements by which the Company or
any of its subsidiaries is or may become bound to issue additional
capital stock of the Company or any of its subsidiaries or options,
warrants, scrip, rights to subscribe to, calls or commitments of
any character whatsoever relating to, or securities or rights
convertible into, or exercisable or exchangeable for, any capital
stock of the Company or any of its subsidiaries; (iii) there are no
outstanding debt securities, notes, credit agreements, credit
facilities or other agreements, documents or instruments evidencing
indebtedness of the Company or any of its subsidiaries or by which
the Company or any of its subsidiaries is or may become bound; (iv)
there are no financing statements securing obligations in any
material amounts, either singly or in the aggregate, filed in
connection with the Company or any of its subsidiaries; (v) there
are no outstanding securities or instruments of the Company or any
of its subsidiaries which contain any redemption or similar
provisions, and there are no contracts, commitments, understandings
or arrangements by which the Company or any of its subsidiaries is
or may become bound to redeem a security of the Company or any of
its subsidiaries; (vi) there are no securities or instruments
containing anti-dilution or similar provisions that will be
triggered by the issuance of the Securities; (vii) the Company does
not have any stock appreciation rights or “phantom
stock” plans or agreements or any similar plan or agreement;
and (viii) the Company and its subsidiaries have no liabilities or
obligations required to be disclosed in the SEC Documents but not
so disclosed in the SEC Documents, other than those incurred in the
ordinary course of the Company’s or its subsidiaries’
respective businesses and which, individually or in the aggregate,
do not or would not have a Material Adverse Effect. The
Company has furnished to the Buyers true, correct and complete
copies of the Company’s Certificate of Incorporation, as
amended and as in effect on the date hereof (the “
Certificate of Incorporation ”), and the
Company’s Bylaws, as amended and as in effect on the date
hereof (the “ Bylaws ”), and the terms of all
securities convertible into, or exercisable or exchangeable for,
shares of Common Stock and the material rights of the holders
thereof in respect thereto. Except for Stockholder Approval
of the transactions contemplated by this Agreement, no further
approval or authorization of any stockholder, the Board of
Directors of the Company or others is required for the issuance
and
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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.
(e)
Issuance of Securities . The issuance of the
Convertible Debentures and the Warrants is duly authorized and free
from all taxes, liens and charges with respect to the issue
thereof. Upon conversion in accordance with the terms of the
Convertible Debentures or exercise in accordance with the Warrants,
as the case may be, the Conversion Shares and Warrant Shares,
respectively, when issued will be validly issued, fully paid and
nonassessable, free from all taxes, liens and charges with respect
to the issue thereof. The Company has reserved from its duly
authorized capital stock the appropriate number of shares of Common
Stock as set forth in this Agreement.
(f)
No Conflicts . 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, without limitation, the issuance of the
Convertible Debentures and the Warrants, and reservation for
issuance and issuance of the Conversion Shares and the Warrant
Shares) will not (i) result in a violation of any certificate of
incorporation, certificate of formation, any certificate of
designations or other constituent documents of the Company or any
of its subsidiaries, any capital stock of the Company or any of its
subsidiaries or bylaws of the Company or any of its subsidiaries or
(ii) conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) in any
respect under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Company or any of its
subsidiaries is a party, or (iii) result in a violation of any law,
rule, regulation, order, judgment or decree (including foreign,
federal and state securities laws and regulations and the rules and
regulations of the Primary Market) applicable to the Company or any
of its subsidiaries or by which any property or asset of the
Company or any of its subsidiaries is bound or affected; except in
the case of each of clauses (ii) and (iii), such as could not,
individually or in the aggregate, have or reasonably be expected to
result in a Material Adverse Effect. The business of the
Company and its subsidiaries is not being conducted, and shall not
be conducted in violation of any material law, ordinance, or
regulation of any governmental entity. Except as specifically
contemplated by this Agreement and as required under the Securities
Act and any applicable state securities laws, the Company is not
required to obtain any consent, authorization or order of, or make
any filing or registration with, any court or governmental agency
in order for it to execute, deliver or perform any of its
obligations under or contemplated by this Agreement or the
Registration Rights Agreement in accordance with the terms hereof
or thereof. All consents, authorizations, orders, filings and
registrations which the Company is required to obtain pursuant to
the preceding sentence have been obtained or effected on or prior
to the date hereof. The Company and its subsidiaries are
unaware of any facts or circumstance, which might give rise to any
of the foregoing.
(g)
SEC Documents; Financial Statements . The Company has
filed all reports, schedules, forms, statements and other documents
required to be filed by it with the SEC under the Securities
Exchange Act of 1934, as amended (the “ Exchange Act
”), for the two years preceding the date hereof (or such
shorter period as the Company was required by law or regulation to
file such material) (all of the foregoing filed prior to the date
hereof or amended
9
after the date hereof and all exhibits included
therein and financial statements and schedules thereto and
documents incorporated by reference therein, being hereinafter
referred to as the “ SEC Documents ”) on timely
basis or has received a valid extension of such time of filing and
has filed any such SEC Document prior to the expiration of any such
extension. The Company has delivered to the Buyers or their
representatives, or made available through the SEC’s website
at http://www.sec.gov., true and complete copies of the SEC
Documents. As of their respective dates, the SEC Documents
complied in all material respects with the requirements of the
Exchange Act and the rules and regulations of the SEC promulgated
thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, 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. As of their respective
dates, the financial statements of the Company included in the SEC
Documents complied as to form in all material respects with
applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto. Such financial
statements have been prepared in accordance with generally accepted
accounting principles, consistently applied, during the periods
involved (except (i) as may be otherwise indicated in such
financial statements or the notes thereto, or (ii) in the case of
unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly
present in all material respects the financial position of the
Company as of the dates thereof and the results of its operations
and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments).
No other information provided by or on behalf of the Company to the
Buyers which is not included in the SEC Documents, including,
without limitation, information referred to in Section 2(i) of this
Agreement, contains any untrue statement of a material fact or
omits to state any material fact necessary in order to make the
statements therein, in the light of the circumstance under which
they are or were made and not misleading.
(h)
10(b)-5 . The SEC Documents do not include any untrue
statements of material fact, nor do they omit to state any material
fact required to be stated therein necessary to make the statements
made, in light of the circumstances under which they were made, not
misleading.
(i)
Absence of Litigation . There is no action, suit,
proceeding, inquiry or investigation before or by any court, public
board, government agency, self-regulatory organization or body
pending against or affecting the Company, the Common Stock or any
of the Company’s subsidiaries, wherein an unfavorable
decision, ruling or finding would have a Material Adverse
Effect.
(j)
Acknowledgment Regarding Buyer’s Purchase of the
Convertible Debentures . The Company acknowledges and
agrees that each Buyer is acting solely in the capacity of an
arm’s length purchaser with respect to this Agreement and the
transactions contemplated hereby. The Company further
acknowledges that each Buyer is not acting as a financial advisor
or fiduciary of the Company (or in any similar capacity) with
respect to this Agreement and the transactions contemplated hereby
and any advice given by each Buyer or any of their respective
representatives or agents in connection with this Agreement and the
transactions contempl
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