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SECURITIES PURCHASE AGREEMENT

Purchase and Sale Agreement

SECURITIES PURCHASE AGREEMENT | Document Parties: WIN GAMING MEDIA, INC. | Zone4Play, Inc You are currently viewing:
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WIN GAMING MEDIA, INC. | Zone4Play, Inc

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Title: SECURITIES PURCHASE AGREEMENT
Governing Law: New York     Date: 1/27/2005
Industry: Software and Programming     Law Firm: Thelen Reid     Sector: Technology

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                          SECURITIES PURCHASE AGREEMENT

      This Securities Purchase Agreement (this "Agreement") is dated as of
January 27, 2005, among Zone4Play, Inc., a Nevada 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 Section 4(2) of the Securities Act (as defined below), and Rule
506 promulgated thereunder, the Company desires to issue and sell to the
Purchasers, and the Purchasers, severally and not jointly, desire to purchase
from the Company, in the aggregate, up to 4 million shares of Common Stock (as
defined below) on the Closing Date (as defined below).

      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 agrees
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 indicated 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 144. 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.

      "Closing" means the closing of the purchase and sale of the Common Stock
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 (a) the Purchasers' obligations to pay the Subscription
Amount and (b) the Company's obligations to deliver the Shares have been
satisfied or waived.

       "Closing Price" means on any particular date (a) the last reported closing
price per share of Common Stock on such date on the Trading Market (as reported
by Bloomberg L.P. ), or (b) if there is no such price on such date, then the
closing price on the Trading Market on the date nearest preceding such date (as
reported by Bloomberg L.P., (c) if the Common Stock is not then listed or quoted
on the Trading Market and if prices for the Common Stock are then reported in
the "pink sheets" published by the Pink Sheets LLC (formerly the National
Quotation Bureau Incorporated (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 a qualified independent appraiser selected in good faith by the Purchasers of
a majority in interest of the Shares then outstanding.

<PAGE>

      "Commission" means the United States Securities and Exchange Commission.

      "Common Stock" means the common stock of the Company, $0.001 par value per
share, and any securities into which such common stock may hereafter be
reclassified.

      "Common Stock Equivalents" means any securities of the Company or the
Subsidiaries which would entitle the holder thereof to acquire at any time
shares of Common Stock, including without limitation, any debt, preferred stock,
rights, options, warrants or other instrument that is at any time convertible
into or exchangeable for, or otherwise entitles the holder thereof to receive,
shares of Common Stock.

      "Company Counsel" means Sichenzia Ross Friedman Ference LLP, with offices
at 1065 Avenue of the Americas, New York, New York 10018, Tel: (212) 930-9700,
Fax: (212) 930-9725.

      "Disclosure Schedules" means the Disclosure Schedules of the Company
attached hereto and incorporated herein.

      "Effective Date" means the date that a Registration Statement is first
declared effective by the Commission.

      "Exchange Act" means the Securities Exchange Act of 1934, as amended.

      "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 similar restriction.

      "Material Adverse Effect" shall have the meaning ascribed to such term in
Section 3.1(b).

      "Material Permits" shall have the meaning ascribed to such term in Section
3.1(m).

      "OTCBB" means the Over-The-Counter Bulletin Board.

      "Per Share Purchase Price" equals $1.50, 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 legal entity of any kind.

      "Proceeding" means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition).


                                        2
<PAGE>

      "Registration Statement" means a registration statement meeting the
requirements set forth in the Registration Rights Agreement and covering the
resale by the Purchasers of the Shares or a portion thereof (as provided for in
the Registration Rights Agreement).

      "Registration Rights Agreement" means the Registration Rights Agreement,
dated as of the date of this Agreement, by and among the Company and each
Purchaser, in the form of Exhibit A hereto.

      "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 Act" means the Securities Act of 1933, as amended.

      "Shares" means the shares of Common Stock issued or issuable to each
Purchaser pursuant to this Agreement.

      "Subscription Amount" means, as to each Purchaser, the amounts set forth
below such Purchaser's signature block on the signature page hereto, in United
States dollars and in immediately available funds.

      "Subsidiary" shall mean the subsidiaries of the Company, if any, set forth
on Schedule 3.1(a).

      "TRP" shall mean Thelen Reid & Priest LLP with offices located at 875
Third Avenue, New York, New York 10022.

      "Trading Day" means a day on which the Common Stock is traded on a Trading
Market.

      "Trading Market" means each of the following markets or exchanges on which
the Common Stock is listed or quoted for trading on the date in question: OTCBB,
the American Stock Exchange, the New York Stock Exchange, the Nasdaq National
Market or the Nasdaq SmallCap Market.

      "Transaction Documents" means this Agreement and the Registration Rights
Agreement and any other documents or agreements executed in connection with the
transactions contemplated hereunder.

                                  ARTICLE II.
                                PURCHASE AND SALE

      2.1 Closing. On the Closing Date, each and every Purchaser shall purchase
from the Company, severally and not jointly with the other Purchasers, and the
Company shall issue and sell to each Purchaser, (a) a number of Shares equal to
such Purchaser's Subscription Amount divided by the Per Share Purchase Price.
The aggregate Subscription Amounts for Shares sold hereunder shall be up to
$6,000,000. Upon satisfaction or waiver of the conditions set forth in Sections
2.2(a), (b), (c) and (d), the Closing shall occur at the offices of TRP or such
other location as the parties shall mutually agree.


                                       3
<PAGE>

      2.2 Deliveries; Closing Conditions.

            (a) On the Closing Date, the Company shall deliver or cause to be
delivered to each Purchaser the following:

                  (i) this Agreement duly executed by the Company;

                  (ii) a copy of duly executed irrevocable instructions, which
            shall be satisfactory in form and substance to each of the
            Purchasers, to the Company's transfer agent instructing the transfer
            agent to deliver, on an expedited basis, a certificate evidencing a
            number of Shares equal to such Purchaser's Subscription Amount
            divided by the Per Share Purchase Price, registered in the name of
            such Purchaser;

                  (iii) the Registration Rights Agreement duly executed by the
            Company; and

                  (iv) a legal opinion of Company Counsel, in the form of
            Exhibit B attached hereto.

             (b) On the Closing Date, each Purchaser shall deliver or cause to be
delivered to the Company the following:

                  (i) this Agreement duly executed by such Purchaser;

                  (ii) such Purchaser's Subscription Amount by wire transfer to
            the account as specified in writing by the Company; and

                  (iii) the Registration Rights Agreement duly executed by such
            Purchaser.

            (c) All representations and warranties of the other party contained
herein shall remain true and correct in all material respects as of the Closing
Date and all covenants of the other party shall have been performed if due prior
to such date.

            (d) From the date hereof to the Closing Date, trading in the Common
Stock shall not have been suspended by the Commission (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 shall not have been suspended or limited on any
Trading Market, nor shall a general commercial 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 Purchasers representing a majority of the Subscription
Amounts made by all Purchasers, makes it impracticable or inadvisable to
purchase the Shares at the Closing.


                                       4
<PAGE>

                                  ARTICLE III.
                          REPRESENTATIONS AND WARRANTIES

      3.1 Representations and Warranties of the Company. Except as otherwise set
forth under the corresponding section of the Disclosure Schedules attached
hereto, which Disclosure Schedules shall be deemed a part hereof, the Company
hereby represents and warrants as of the date hereof and as of the Closing Date
to each Purchaser as follows:

            (a) Subsidiaries. All of the direct and indirect Subsidiaries of the
Company are set forth on Schedule 3.1(a). Except for Mix TV, in which the
Company owns a 50.1% interest, 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 such securities. If
the Company has no subsidiaries, then references in the Transaction Documents to
the Subsidiaries will be disregarded.

            (b) Organization and Qualification. Each of the Company and 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 except where failure to be so qualified, organized or
have such power and authority would not reasonably be expected to have a
Material Adverse Effect (as defined below). 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, 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
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 to the
knowledge of the Company, 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 execute and deliver this Agreement and to
consummate the transactions contemplated by each of the Transaction Documents to
which it is a party and otherwise to carry out its obligations thereunder. The
execution, delivery and performance by the Company of each of the Transaction
Documents to which it is a party and the consummation by it of the transactions
contemplated thereby have been duly authorized by all necessary action on the
part of the Company and no further action is required by the Company in
connection therewith other than in connection with the Required Approvals. Each
Transaction Document to which it is a party has been (or upon delivery will have
been) duly executed by the Company and, when delivered in accordance with the
terms hereof, will constitute the valid and legally binding obligation of the
Company enforceable against the Company in accordance with its terms except (i)
as limited by 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) as the
rights to indemnification or contribution hereunder and thereunder may be
limited by applicable law.


                                       5
<PAGE>

            (d) No Conflicts. The execution, delivery and performance by the
Company of the Transaction Documents to which it is a party, the issuance and
sale of the Shares and the consummation by the Company of the other transactions
contemplated 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 material asset of the Company or any
Subsidiary is bound, 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 (iv) violate the terms of any agreement by
which the Company or any Subsidiary is bound or to which any property or asset
of the Company or any Subsidiary is bound; except in the case of each of clauses
(ii), (iii) and (iv), such as would not have or reasonably be expected to result
in 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 Registration Statement, (iii)
application(s) to each applicable Trading Market for the listing of the Shares
for trading thereon in the time and manner required thereby, (iv) the filing of
Form D with the Commission and such filings as are required to be made under
applicable state securities laws, (v) any other filings required to be made
pursuant to the terms of the Registration Rights Agreement, and (vi) the notices
set forth on Schedule 3.1(e) (collectively, the "Required Approvals").


                                       6
<PAGE>

            (f) Issuance of the Shares. The Shares have been duly authorized
and, when issued and paid for in accordance with the terms of the 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 and under applicable federal
and state securities laws. The Company has reserved from its duly authorized
capital stock the maximum number of shares of Common Stock issuable pursuant to
this Agreement.

            (g) Capitalization. Since September 30, 2004, the Company has not
issued any capital stock other than pursuant to the exercise of employee stock
options under the Company's stock option plans, the issuance of shares of Common
Stock to employees pursuant to the Company's employee stock purchase plan and
pursuant to the conversion or exercise of outstanding Common Stock Equivalents
outstanding. 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, and except for warrants and shares issuable to certain
advisors listed on Schedule 3.1(g), 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
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 securities or rights convertible or
exchangeable into shares of Common Stock. The issue and sale of the Shares 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 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 were issued in violation of any preemptive rights or
similar rights to subscribe for or purchase securities. No further approval or
authorization of any shareholder, the Board of Directors of the Company or
others is required for the issuance and sale of the Shares. Except as disclosed
in the SEC Reports, there are no shareholders 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 shareholders.

            (h) SEC Reports; Financial Statements. Except as set forth in
Schedule 3.1(h), the Company has filed all reports required to be filed by it
under the Exchange Act, including without limitation, those filed pursuant to
Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (the
foregoing materials, including the exhibits thereto, 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 Exchange Act and
the rules and regulations 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 light of the circumstances under
which they were made, not misleading. The financial statements of the Company
included in the SEC Reports comply as to form 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.


                                       7
<PAGE>

            (i) Material Changes. Since December 31, 2003, except as
specifically disclosed in the SEC Reports, (i) there has been no event,
occurrence or development that has had or that would reasonably be expected to
result in a Material Adverse Effect, (ii) the Company has not incurred any
liabilities (contingent or otherwise) other than (A) liabilities 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 required to be 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
shareholders 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 stock option plans. The Company does not have pending before the
Commission any request for confidential treatment of information.

            (j) Litigation. There is no action, suit, inquiry, notice of
violation or proceeding pending or, to the knowledge of the Company, threatened,
nor, to the knowledge of the Company, is any investigation pending or
threatened, against 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) challenges the legality, validity or
enforceability of any of the Transaction Documents or the Shares or (ii) would,
if there were an unfavorable decision, have or reasonably be expected to result
in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor to the
knowledge of the Company, 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, any
investigation by the Commission involving the Company or any current or former
director or officer 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 or any Subsidiary which would reasonably be expected to result in a
Material Adverse Effect.


                                       8
<PAGE>

             (l) Compliance. 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), nor has the Company or any Subsidiary
received written notice of a claim that it is in default under, any indenture,
loan or credit agreement or any other agreement or instrument to which it is a
party or by which it or any of its properties is bound (whether or not such
default or violation has been waived), (ii) is in violation of any order of any
court, arbitrator or governmental body, or (iii) is in violation of any statute,
rule or regulation of any governmental authority, including without limitation
all foreign, federal, state and local laws applicable to its business, except in
each case as would not have a Material Adverse Effect.

            (m) Regulatory Permits. The Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses as described in the SEC Reports, except where the failure
to possess such permits would not have or reasonably be expected to result in a
Material Adverse Effect ("Material Permits"), and neither the Company nor any
Subsidiary has received any written notice of proceedings relating to the
revocation or modification of any Material Permit.

            (n) Title to Assets. The Company and the Subsidiaries have good,
marketable and fee simple title to all real property owned by them that is
material to the business of the Company and the Subsidiaries and valid title in
all personal property owned by them that is material to the business of the
Company and the Subsidiaries, in each case free and clear of all Liens, except
for Liens as do not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such property
by the Company and the Subsidiaries and Liens for the payment of federal, state
or other taxes, the payment of which is neither delinquent nor subject to
penalties. Any real property and facilities held under lease by the Company and
the Subsidiaries are held by them under valid, subsisting and enforceable leases
and no landlord for any such real property or facility has notified the Company
or any such Subsidiary that any of them are in default under any such lease.

            (o) Patents and Trademarks. The Company and the Subsidiaries have,
or have rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, licenses and other similar
rights necessary or material for use in connection with their respective
businesses as described in the SEC Reports and which the failure to so have
would have a Material Adverse Effect (collectively, the "Intellectual Property
Rights"). Neither the Company nor any Subsidiary has received a written notice
that the Intellectual Property Rights used by the Company or any Subsidiary
violates or infringes upon the rights of any Person. To the knowledge of the
Company, all such Intellectual Property Rights are enforceable and there is no
known existing infringement by another Person of any of the Intellectual
Property Rights of others which would have a Material Adverse Effect.

            (p) Insurance. The Company and the Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as the Company believes are prudent and customary in the
businesses in which the Company and the Subsidiaries are engaged. Neither the
Company nor any Subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue
its business without a significant increase in cost.


                                       9
<PAGE>

            (q) Transactions With Affiliates and Employees. Except as set forth
in the SEC Reports and in Schedule 3.1(q), none of the officers or directors of
the Company and, to the knowledge of the Company, none of the employees of the
Company is presently a party to any transaction with the Company or any
Subsidiary (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any entity in
which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner, in each case in excess of $60,000
other than (i) for payment of salary or consulting fees for services rendered,
(ii) reimbursement for expenses incurred on behalf of the Company and (iii) for
other benefits under benefit or pension plans sponsored by the Company,
including without limitation stock option agreements under any stock option plan
of the Company.

            (r) Sarbanes-Oxley; Internal Accounting Controls. The Company is in
material compliance with all provisions of the Sarbanes-Oxley Act of 2002 which
are applicable to it as of the Closing Date. To the extent required by
applicable law, the Company and the Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management's general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. To
the extent required by applicable law, the Company has established disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the Company and designed such disclosure controls and procedures
to ensure that material information relating to the Company, including its
Subsidiaries, is made known to the certifying officers by others within those
entities. To the extent required by applicable law, the Company's certifying
officers have evaluated the effectiveness of the Company's controls and
procedures as of the end of the period covered by its most recently filed
periodic report under the Exchange Act (the date of such evaluation, the
"Evaluation Date"). To the extent required by applicable law, the Company
presented in its most recently filed periodic report under the Exchange Act the
conclusions of the certifying officers about the effectiveness of the disclosure
controls and procedures based on their evaluations as of the Evaluation Date and
since the Evaluation Date, there have been no significant changes in the
Company's internal control over financial reporting (as defined in Exchange Act
Rules 13a-15(f) and 15d-15(f)) or, to the best of the Company's knowledge, in
other factors that could significantly affect the Company's internal controls.

            (s) Certain Fees. Other than as set forth in footnote 1 in Schedule
3.1(g), no brokerage or finder's fees or commissions are or will be payable by
the Company or any Subsidiary to any broker, financial advisor or consultant,
finder, placement agent, investment banker, bank or other Person with respect to
the transactions contemplated by this Agreement. To the knowledge of the
Company, the Purchasers shall have no obligation with respect to any fees or
with respect to any claims made against the Company by or on behalf of other
Person  


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