SECURITIES PURCHASE
AGREEMENT
This Securities
Purchase Agreement (this “ Agreement ”) is dated
as of February [ ], 2009, 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:
1.1
Definitions . In addition to the terms defined elsewhere in
this Agreement: (a) capitalized terms that are not otherwise
defined herein have the meanings given to such terms in the
Debentures (as defined herein), and (b) the following terms
have the meanings set forth in this Section 1.1:
“
Acquiring Person ” shall have the meaning ascribed to
such term in Section 4.5.
“
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 on which 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, in each case, have been satisfied or
waived.
“
Commission ” means the United States 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,
pursuant to the terms of the Securities 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.
“
Conversion Shares ” means the shares of Common Stock
issuable upon conversion or redemption of the Debentures pursuant
to the Indenture.
“
Debentures ” means the 7.5824% Convertible Debentures
due February , 2014, issued under the
Indenture.
“ Escrow
Agent ” means Bank of New York Mellon.
“ Escrow
Agreement ” means the escrow agreement entered into as of
the date hereof, by and among the Company, the Purchasers and the
Escrow Agent, pursuant to which the Purchasers shall deposit
Subscription Amounts with the Escrow Agent to be applied to the
transactions contemplated hereunder.
“
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 price, exchange price or conversion price of
such securities, except to the extent
2
provided
therein, (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 (or to the equityholders of a Person) which is,
itself or through its subsidiaries, an operating company or an
asset 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 and (d) with the prior written consent of Rodman
& Renshaw.
“ 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(aa).
“
Indenture ” means that certain Trust Indenture, dated
[ ], 2009, between the Company and The Bank of New York Mellon, as
Trustee, pursuant to which the Debentures are issued.
“
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).
“ Maximum
Rate ” shall have the meaning ascribed to such term in
Section 5.17.
“
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.
“
Preliminary 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 any free writing prospectus complying with Rule 433 of the
Securities Act that is filed with the Commission.
3
“
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 prospectus filed with the
Registration Statement.
“
Prospectus Supplement ” means 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 the Commission file No. 333-153895
which registers the sale of the Debentures, Warrants and Underlying
Shares.
“
Required Approvals ” shall have the meaning ascribed
to such term in Section 3.1(e).
“ Rodman
& Renshaw ” means Rodman & Renshaw, LLC, the
placement agent to the transactions contemplated
hereunder.
“
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.
“
Rule 424 ” means Rule 424 promulgated by the
Commission pursuant to the Securities Act, as such Rule may be
amended or interpreted from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially
the same purpose and effect as such Rule.
“ SEC
Reports ” shall have the meaning ascribed to such term in
Section 3.1(h).
“
Securities ” means the Debentures, the Warrants and
the Underlying Shares.
“
Securities Act ” shall have the meaning ascribed to
such term in the preamble 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 Debentures 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.
4
“
Subsidiary ” means any subsidiary of the Company as
set forth on Exhibit 21.1 to the Company’s Annual Report
on Form 10-K for the year ended December 31, 2007, and shall,
where applicable, also include any direct or indirect subsidiary of
the Company formed or acquired after the date thereof.
“ tbg
” means Technologie-Beteiligungs Gesellschaft mbH der
Deutschen Ausgleichsbank.
“ Trading
Day ” means a day on which the principal Trading Market
is open for trading.
“ Trading
Market ” means any of the following markets or exchanges
on which the Common Stock is listed or quoted for trading on the
date in question: the NYSE Alternext US, NYSE Arca, The Nasdaq
Capital Market, The Nasdaq Global Market, The Nasdaq Global Select
Market, the New York Stock Exchange or the OTC Bulletin Board (or
any successors to any of the foregoing).
“
Transaction Documents ” means this Agreement, the
Indenture, the Form of Note, the Form of Warrant, the Escrow
Agreement, all exhibits and schedules thereto and hereto 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 15 th Avenue, 3 rd Floor, Brooklyn, NY 11219 and a facsimile number
of (718) 921-8327, and any successor transfer agent of the
Company.
“
Underlying Shares ” means the Conversion Shares and
the Warrant Shares.
“
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 the six month anniversary of the date hereof and
have a term of exercise equal to 5 years from the date hereof,
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 $25,000,000 in principal
amount of the Debentures and Warrants. Each Purchaser shall deliver
to the Escrow Agent via wire transfer or a certified check of
immediately available funds equal to such Purchaser’s
Subscription Amount as set forth on the signature page hereto
executed by such Purchaser, and the Company shall deliver to each
Purchaser its respective Debenture and a Warrant, as determined
pursuant to Section 2.2(a), and
5
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 Company Counsel 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:
(i) this Agreement
duly executed by the Company;
(ii) the Escrow
Agreement duly executed by the Company;
(iii) a legal
opinion of Company Counsel, substantially in the form of
Exhibit B attached hereto;
(iv) a Debenture
with a principal amount equal to such Purchaser’s
Subscription Amount, registered in the name of such
Purchaser;
(v) a copy of the
fully executed Indenture;
(vi) a Warrant
registered in the name of such Purchaser to purchase up to a number
of shares of Common Stock equal to 40% of such Purchaser’s
Subscription Amount divided by $439.56, with an exercise price
equal to $1.0465, subject to adjustment therein; and
(vii) 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:
(i) this Agreement
duly executed by such Purchaser;
(ii) the Escrow
Agreement duly executed by such Purchaser;
(iii) a completed
Form W-9; and
(iv) such
Purchaser’s Subscription Amount by wire transfer to the
account specified by the Escrow Agent.
(a) The
obligations of the Company hereunder in connection with the Closing
as to any Purchaser are subject to the following conditions being
met:
(i) the accuracy
in all material respects when made and on the Closing Date of the
representations and warranties of such Purchaser contained
herein
6
(unless as of a
specific date therein);
(ii) all
obligations, covenants and agreements of such Purchaser required to
be performed at or prior to the Closing Date shall have been
performed; and
(iii) the delivery
by such Purchaser of the items set forth in Section 2.2(b) of
this Agreement.
(b) The respective
obligations as to any Purchaser hereunder in connection with the
Closing are subject to the following conditions being
met:
(i) the accuracy
in all material respects when made and on the Closing Date of the
representations and warranties of the Company contained herein
(unless as of a specific date therein);
(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 from the date hereof 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
Preliminary Prospectus Supplement, the Prospectus Supplement or the
SEC Reports, which Registration Statement, Prospectus, Preliminary
Prospectus Supplement, Prospectus Supplement and SEC Reports shall
qualify any
7
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
Subsidiaries 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
nor 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
reasonably be expected to result in: (i) a material adverse
effect on the legality, validity or enforceability against the
Company of any Transaction Document with respect to the Company,
(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 . The Company has the requisite
corporate power and authority to enter into 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
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 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 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)
8
that rights to
indemnification and contribution provisions may be limited by
federal or state securities laws or public policy relating
thereto.
(d) No
Conflicts . The execution, delivery and performance by the
Company of the Transaction Documents, the issuance and sale of the
Securities and the consummation by the Company of the other
transactions contemplated hereby and thereby to which it is a party
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, (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 could 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 or other entity of any kind, in connection with the
execution, delivery and performance by the Company of the
Transaction Documents, other than: (i) the filings required
pursuant to Section 4.4 of this Agreement, (ii) the
filing with the Commission of the Prospectus Supplement,
(iii) notice and/or application(s) to each applicable Trading
Market for the issuance and sale of the Securities and the listing
of the Underlying Shares for trading thereon in the time and manner
required thereby, (iv) such filings as are required to be made
under applicable federal and state securities laws, FINRA and the
Trading Market, and (v) those already obtained (collectively,
the “ Required Approvals ”). A press release of
the Company is the only action required by the OMX Nordic Exchange
for the listing or quotation of the Underlying Shares
thereon.
(f) Issuance of
the Securities . 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 for in the
Transaction Documents. The Underlying Shares, when issued in
accordance with the terms of the Transaction Documents, will be
validly issued, fully paid and nonassessable, free and clear of all
Liens imposed by the Company. The Company has reserved from its
duly authorized Common Stock the maximum number of shares of Common
Stock issuable pursuant to this Agreement. The Company has prepared
and filed the Registration
9
Statement in
conformity with the requirements of the Securities Act, which
became effective on October 21, 2008, including the
Prospectus, and such amendments and supplements thereto as may have
been required as of the date of this Agreement. The Registration
Statement is effective under the Securities Act, and to the
knowledge of the Company, 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, shall file the Prospectus with the Commission
pursuant to Rules 424(b) or 433 under the Securities Act. 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 the time the Prospectus or any amendment or
supplement thereto was issued as of their respective dates and the
Closing Date, conformed 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, the Prospectus, the
Preliminary Prospectus Supplement, the Prospectus Supplement 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 the Registration Statement, the
Prospectus, the Preliminary Prospectus Supplement, the Prospectus
Supplement and the 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 and/or exercise of 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 Securities and
as described in the Registration Statement, the Prospectus, the
Preliminary Prospectus Supplement, the Prospectus Supplement and
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, the Preliminary Prospectus
Supplement, the 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
10
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.
Except as set forth in the Agreement and those approvals which may
have already been received (if any), 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 one year period immediately preceding and
including 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
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 the light of the circumstances under which they were
made, not misleading. The Company is not an issuer subject to Rule
144(i) under the Securities Act. 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, Prospectus, the Preliminary
Prospectus Supplement and the Prospectus Supplement, (i) there
has been no event, occurrence or development that has had or that
could reasonably be expected to result in a Material Adverse
Effect, (ii) the Company has not incurred any
liabilities
11
(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
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 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 Preliminary Prospectus Supplement, the Prospectus Supplement or
SEC Reports, no event, liability, fact, circumstance, occurrence or
development has occurred or exists with respect to the Company or
its Subsidiaries or their respective business, properties,
operations, assets 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 Preliminary Prospectus Supplement or the Prospectus
Supplement.
(j)
Litigation . Except as disclosed in the Registration
Statement, the Prospectus, the Preliminary Prospectus Supplement,
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) could, if there were an
unfavorable decision, reasonably be expected to result in a
Material Adverse Effect. Neither the Company nor any Subsidiary,
nor any director or officer thereof, is 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 of the
Company or any current or former director or officer of the Company
in their capacity as an officer or director 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 could reasonably be expected to
result in 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
12
with respect to
any of the foregoing matters. The Company and its Subsidiaries are
in compliance with all U.S. federal, state, local and applicable
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 could not,
individually or in the aggregate, reasonably be expected to result
in a Material Adverse Effect.
(l)
Compliance . Except as disclosed in the Registration
Statement, the Prospectus, the Preliminary Prospectus Supplement,
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, could result in a default by the
Company or any Subsidiary under), nor has the Company or any
Subsidiary received notice of a claim that it is in default under
or violation of 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
judgment, decree or order of any court, arbitrator or governmental
body or (iii) is or has been in violation of any statute,
rule, ordinance or regulation of any governmental authority,
including without limitation all foreign, federal, state and local
laws applicable to its business and all such laws that affect the
environment, except in each case as could not reasonably be
expected to have a Material Adverse Effect.
(m) Regulatory
Permits . Except as disclosed in the Registration Statement,
the Prospectus, the Preliminary Prospectus Supplement, the
Prospectus Supplement or the SEC Reports, 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, the Prospectus the
Preliminary Prospectus Supplement or the Prospectus Supplement,
except where the failure to possess such permits could not
reasonably be expected to result in a Material Adverse Effect
(“ Material Permits ”), and neither the Company
nor any Subsidiary has received any notice of proceedings relating
to the revocation or modification of any Material
Permit.
(n) Title to
Assets . The Company and the Subsidiaries have good and
marketable title in fee simple to all real property owned by them
that is material to the business of the Company and the
Subsidiaries and good and marketable 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 in favor of Hercules and 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 with which the
Company and the Subsidiaries are in compliance.
(o) Patents and
Trademarks . The Company and the Subsidiaries have, or have
rights to use, all patents, patent applications, trademarks,
trademark applications, service
13
marks, trade
names, trade secrets, inventions, copyrights, licenses and other
intellectual property rights currently employed by them and similar
rights as described in the Prospectus, the Preliminary Prospectus
Supplement or the Prospectus Supplement as necessary or material
for use in connection with the business currently operated by them
except where the failure to do so could not reasonably be expected
to have a Material Adverse Effect (collectively, the “
Intellectual Property Rights ”). Neither the Company
nor any Subsidiary has received a notice (written or otherwise)
that any of 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 existing infringement by
another Person of any of the Intellectual Property Rights. The
Company and its Subsidiaries have taken reasonable measures to
protect the secrecy, confidentiality and value of all of their
intellectual properties, except where failure to do so could not,
individually or in the aggregate, reasonably be expected to 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 are prudent and customary in the
businesses in which the Company and the Subsidiaries are engaged,
including, but not limited to, directors and officers insurance
coverage. To the knowledge of the Company, such insurance contracts
are accurate and complete. 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.
(q)
Transactions With Affiliates and Employees . Except as
disclosed in the the SEC Reports, the Registration Statement, the
Prospectus, the Preliminary Prospectus Supplement or the Prospectus
Supplement, 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 o
|
