SECURITIES PURCHASE AGREEMENT
This
Securities Purchase Agreement (this “ Agreement
”) is dated as of August 12, 2009, between Palatin
Technologies, Inc., a Delaware corporation (the “
Company ”), and each purchaser identified on the
signature pages hereto (each, including its successors and assigns,
a “ Purchaser ” and collectively the
“Purchasers ”).
WHEREAS,
subject to the terms and conditions set forth in this Agreement and
pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the “ Securities
Act ”), the Company desires to issue and sell to each
Purchaser, and each Purchaser, severally and not jointly, desires
to purchase from the Company, securities of the Company as more
fully described in this Agreement.
NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration the
receipt and adequacy of which are hereby acknowledged, the Company
and each Purchaser agree as follows:
ARTICLE I.
DEFINITIONS
1.1
Definitions . In addition to the terms defined elsewhere in
this Agreement, for all purposes of this Agreement, the following
terms have the meanings set forth in this Section 1.1:
“
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.
“
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.
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“
Common Stock ” means the common stock of the Company,
par value $0.01 per share, and any other class of securities into
which such securities may hereafter be reclassified or
changed.
“
Common Stock Equivalents ” means any securities of the
Company or the Subsidiaries which would entitle the holder thereof
to acquire at any time Common Stock, including, without limitation,
any debt, preferred stock, rights, options, warrants or other
instrument that is at any time convertible into or exercisable or
exchangeable for, or otherwise entitles the holder thereof to
receive, Common Stock.
“
Company Counsel ” means Mintz, Levin, Cohn, Ferris,
Glovsky and Pepeo, P.C., with offices located at The Chrysler
Center, 666 Third Avenue, New York, New York 10017.
“
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, and (c) securities issued pursuant to acquisitions or
strategic transactions approved by a majority of the disinterested
directors of the Company, provided that any such issuance shall
only be to a Person (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 shall provide to the Company additional benefits in addition to
the investment of funds, but shall not, for purposes of this clause
(c) 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.
“
FDA ” shall have the meaning ascribed to such term in
Section 3.1(gg).
“
FDCA ” shall have the meaning ascribed to such term in
Section 3.1(gg).
“
GAAP ” shall have the meaning ascribed to such term in
Section 3.1(h).
“
Indebtedness ” shall have the meaning ascribed to such
term in Section 3.1(z).
“
Intellectual Property Rights ” shall have the meaning
ascribed to such term in Section 3.1(o).
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“
Liens ”means a lien, charge, security interest,
encumbrance, right of first refusal, preemptive right or other
restriction.
“
Material Adverse Effect ” shall have the meaning
assigned to such term in Section 3.1(b).
“
Material Permits ” shall have the meaning ascribed to
such term in Section 3.1(m).
“
Per Share Purchase Price ” equals $0.33, subject to
adjustment for reverse and forward stock splits, stock dividends,
stock combinations and other similar transactions of the Common
Stock that occur after the date of this Agreement.
“
Person ”means an individual or corporation,
partnership, trust, incorporated or unincorporated association,
joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of
any kind.
“
Pharmaceutical Product ” shall have the meaning
ascribed to such term in Section 3.1(gg).
“
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 in writing.
“
Prospectus ” means the final prospectus filed for the
Registration Statement.
“
Prospectus Supplement ” means the supplement to the
Prospectus complying with Rule 424(b) of the Securities Act that is
filed with the Commission and delivered by the Company to each
Purchaser at the Closing.
“
Purchaser Party ” shall have the meaning ascribed to
such term in Section 4.8.
“
Registration Statement ” means the effective
registration statement with Commission file No. 333-146392 which
registers the sale of the Shares, the Warrants and the Warrant
Shares by the Purchasers.
“
Required Approvals ” shall have the meaning ascribed
to such term in Section 3.1(e).
“
Rule 144 ” means Rule 144 promulgated by the
Commission pursuant to the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same
effect as such Rule.
“
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.
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“
SEC Reports ” shall have the meaning ascribed to such
term in Section 3.1(h).
“
Securities ” means the Shares, the Warrants and the
Warrant Shares.
“
Securities Act ” means the Securities Act of 1933, as
amended, and the rules and regulations promulgated
thereunder.
“
Shares ”means the shares of Common Stock issued or
issuable to each Purchaser pursuant to this Agreement.
“
Short Sales ” means all “short sales” as
defined in Rule 200 of Regulation SHO under the Exchange Act (but
shall not be deemed to include the location and/or reservation of
borrowable shares of Common Stock).
“
Subscription Amount ” means, as to each Purchaser, the
aggregate amount to be paid for Shares and Warrants purchased
hereunder as specified below such Purchaser’s name on the
signature page of this Agreement and next to the heading
“Subscription Amount,”in United States dollars and in
immediately available funds.
“
Subsidiary ” means any subsidiary consolidated in the
Company’s financial statements.
“
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 AMEX, 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 and the
Warrants being issued in connection with this Agreement.
“
Transfer Agent ” means American Stock Transfer &
Trust Company, LLC, the current transfer agent of the Company, with
a mailing address of 59 Maiden Lane, Plaza Level, New York, New
York 10038 and a facsimile number of (718) 765-8718, and any
successor transfer agent of the Company.
“
Warrants ”means, collectively, the Common Stock
purchase warrants delivered to the Purchasers at the Closing in
accordance with Section 2.2(a) hereof, which Warrants shall be
exercisable on the Closing Date and have a term of exercise equal
to 5 years from the Closing Date , in the form of Exhibit
A attached hereto.
“
Warrant Shares ” means the shares of Common Stock
issuable upon exercise of the Warrants.
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“
WS ”means Weinstein Smith LLP with offices located at
420 Lexington Avenue, Suite 2620, New York, New York
10170-0002.
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 $3,130,000 of Shares and
Warrants. Each Purchaser shall deliver to the Company, 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 Shares and a Warrant
as determined pursuant to Section 2.2(a), and the Company and each
Purchaser shall deliver the other items set forth in Section 2.2
deliverable at the Closing. Upon satisfaction of the covenants and
conditions set forth in Sections 2.2 and 2.3, the Closing shall
occur at the offices of WS or such other location as the parties
shall mutually agree.
2.2
Deliveries .
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(a)
On or prior to the Closing Date, the Company shall deliver
or cause to be delivered to each Purchaser the
following:
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(i)
this Agreement duly executed by the Company;
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(ii)
a legal opinion of Company Counsel, substantially in the
form of Exhibit B attached hereto;
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(iii)
a copy of the irrevocable instructions to the
Company’s transfer agent instructing the transfer agent to
deliver via the Depository Trust Company Deposit Withdrawal Agent
Commission System (“ DWAC ”) Shares equal to
such Purchaser’s Subscription Amount divided by the Per Share
Purchase Price, registered in the name of such
Purchaser;
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(iv)
a Warrant registered in the name of such Purchaser to
purchase up to a number of shares of Common Stock equal to 35% of
the number of Shares purchased by such Purchaser, with an exercise
price equal to $0.33, subject to adjustment therein (such Warrant
certificate may be delivered within three Trading Days of the
Closing Date); and
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(v)
the Prospectus and Prospectus Supplement (which may be
delivered in accordance with Rule 172 under the Securities
Act).
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(b)
On or prior to the Closing Date, each Purchaser shall
deliver or cause to be delivered to the Company the
following:
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(i)
this Agreement duly executed by such Purchaser;
and
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(ii)
such Purchaser’s Subscription Amount by wire transfer
to the account as specified in writing by the Company.
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2.3
Closing Conditions.
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(a)
The obligations of the Company hereunder in connection with the
Closing are subject to the following conditions being
met:
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(i)
the accuracy in all material respects on the Closing Date of
the representations and warranties of the Purchasers contained
herein (unless as of a specific date therein);
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(ii)
all obligations, covenants and agreements of each Purchaser
required to be performed at or prior to the Closing Date shall have
been performed; and
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(iii)
the delivery by each Purchaser of the items set forth in
Section 2.2(b) of this Agreement.
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(b)
The respective obligations of the Purchasers hereunder in
connection with the Closing are subject to the following conditions
being met:
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(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);
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(ii)
all obligations, covenants and agreements of the Company
required to be performed at or prior to the Closing Date shall have
been performed;
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(iii)
the delivery by the Company of the items set forth in
Section 2.2(a) of this Agreement;
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(iv)
there shall have been no Material Adverse Effect with
respect to the Company since the date hereof; and
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(v)
from the date hereof to the Closing Date, trading in the
Common Stock shall not have been suspended by the Commission or the
Company’s principal Trading Market (except for any suspension
of trading of limited duration agreed to by the Company, which
suspension shall be terminated prior to the Closing), and, at any
time prior to the Closing Date, trading in securities generally as
reported by Bloomberg L.P. shall not have been suspended or
limited, or minimum prices shall not have been established on
securities whose trades are reported by such service, or on any
Trading Market, nor shall a banking moratorium have been declared
either by the United States or New York State authorities nor shall
there have occurred any material outbreak or escalation of
hostilities or other national or international calamity of such
magnitude in its effect on, or any material adverse change in, any
financial market which, in each
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case, in the
reasonable judgment of each Purchaser, makes it impracticable or
inadvisable to purchase the Securities at the Closing.
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ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1
Representations and Warranties of the Company . Except as
described in the SEC Reports or any information contained or
incorporated therein, the Company hereby makes the following
representations and warranties to each Purchaser:
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(a)
Subsidiaries . All of the direct and indirect
subsidiaries of the Company are described in the Company’s
SEC Reports. 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 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.
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(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, 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,
except to the extent that any such default, could not have or
reasonably be expected to result in: (i) a material adverse effect
on the legality, validity or enforceability of any Transaction
Document, (ii) a material adverse effect on the results of
operations, assets, business, prospects 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 ”) provided,
that none of the following alone shall be deemed, in and of itself,
to constitute a Material Adverse Effect: (i) a change in the market
price or trading volume of the Common Stock or (ii) changes in
general economic conditions or changes affecting the industry in
which the Company operates generally (as opposed to
Company-specific changes) so long as such changes do not have a
materially disproportionate effect on the Company. Each of the
Company and the Subsidiaries is duly qualified to conduct business
and is in good standing as a foreign corporation or other entity in
each jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except
where the failure to be so qualified or in good standing, as the
case may be, could not have or reasonably be expected to result in
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.
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(c)
Authorization; Enforcement . The Company has the
requisite corporate power and authority to enter into and to
consummate the transactions contemplated by each of the Transaction
Documents and otherwise to carry out its obligations
hereunder
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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 (assuming due execution and delivery by
all other parties thereto), except (i) as limited by general
equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and
(iii) insofar as indemnification and contribution provisions may be
limited by applicable law.
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(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 it of
the 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, or (ii) conflict with, or
constitute a default (or an event that with notice or lapse of time
or both would become a default) under, result in the creation of
any Lien upon any of the properties or assets of the Company or any
Subsidiary, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time
or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company or Subsidiary debt or otherwise)
or other understanding to which the Company or any Subsidiary is a
party or by which any property or asset of the Company or any
Subsidiary is bound or affected, or (iii) 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.
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(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) the filings required pursuant to Section
4.4 of this Agreement, (ii) the filing with the Commission of the
Prospectus Supplement, (iii) application(s) to each applicable
Trading Market for the listing of the Securities for trading
thereon in the time and manner required thereby and (iv) such
filings as are required to be made under applicable state
securities laws (collectively, the “ Required
Approvals ”).
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(f)
Issuance of the Securities; Registration . The
Securities are duly authorized and, when issued and paid for in
accordance with the applicable Transaction Documents, will be duly
and validly issued, fully paid and non-assessable, free and clear
of all Liens imposed by the Company. The Warrant Shares, when
issued in accordance with the terms of the Warrants, will be
validly issued, fully paid and non-assessable, free and clear of
all Liens imposed by the Company. The Company has or will have,
prior to issuance, reserved from its duly authorized capital stock
the maximum number of shares of Common Stock issuable pursuant to
this Agreement and the Warrants. The Company has prepared and filed
the Registration Statement in conformity with the requirements of
the Securities Act, which became effective on November 27,
2007 (the “ Effective Date ”), including the
Prospectus, and such amendments and supplements thereto as may have
been required to the date of this Agreement. The Registration
Statement is effective under the Securities Act and no stop order
preventing or suspending the effectiveness of the Registration
Statement or suspending or preventing the use of the Prospectus has
been issued by the Commission and no proceedings for that purpose
have been instituted or, to the knowledge of the Company, are
threatened by the Commission. The Company, if required by the rules
and regulations of the Commission, proposes to file the Prospectus,
with the Commission pursuant to Rule 424(b). At the time the
Registration Statement and any amendments thereto became effective,
at the date of this Agreement and at the Closing Date, the
Registration Statement and any amendments thereto conformed and
will conform in all material respects to the requirements of the
Securities Act and, as of their respective effective dates, did not
and will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; and the
Prospectus and any amendments or supplements thereto, at time the
Prospectus or any amendment or supplement thereto was issued and at
the Closing Date, conformed and will conform in all material
respects to the requirements of the Securities Act and did not and
will not contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made,
not misleading.
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(i)
The authorized capital stock of the Company consists of 150,000,000
shares of Common Stock, par value $0.01 per share and 10,000,000
shares of preferred stock, par value $0.01 per share
(“Preferred Stock”). There are 86,670,401 shares of
Common Stock and 4,997 shares of Preferred Stock, all of which are
Series A Preferred Stock, outstanding as of the Closing
Date.
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(ii)
There are options to purchase 10,231,352 shares of Common Stock
outstanding as of the Closing Date.
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(iii)
There are restricted stock unit stock awards for 1,725,000 shares
of Common Stock outstanding as of the Closing Date.
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(iv)
There are warrants to purchase 3,323,591 shares Common Stock
outstanding as of the Closing Date.
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(v)
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, 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 SEC Reports or in any exhibit thereto, the issuance and sale of
the Securities will not obligate the Company to issue shares of
Common Stock or other securities to any Person (other than the
Purchasers) and will not result in a right of any holder of Company
securities to adjust the exercise, conversion, exchange or reset
price under any of such securities. All of the outstanding shares
of capital stock of the Company are validly issued, fully paid and
non-assessable, have been issued in compliance with all federal and
state securities laws, and none of such outstanding shares was
issued in violation of any preemptive rights or similar rights to
subscribe for or purchase securities. No further approval or
authorization of any stockholder, the Board of Directors or others
is required for the issuance and sale of the Securities. Except as
disclosed in the SEC Reports or in any exhibit thereto, 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.
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(h)
SEC Reports; Financial Statements . The Company has
filed all reports, schedules, forms, statements and other documents
required to be filed by the Company under the Securities Act and
the Exchange Act, including pursuant to Section 13(a) or 15(d)
thereof, for the two years preceding the date hereof (or such
shorter period as the Company was required by law or regulation to
file such material) (the foregoing materials, including the
exhibits thereto and documents incorporated by reference therein,
together with the Prospectus and the Prospectus Supplement, 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 as to form in all material respects with the
requirements of the Securities Act and the Exchange Act, as
applicable, 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 has never been 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
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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.
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(i)
Material Changes; Undisclosed Events, Liabilities or
Developments . Since the date of the latest audited financial
statements included within the SEC Reports, except as specifically
disclosed in a subsequent SEC Report filed prior to the date
hereof, (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 (contingent or otherwise) other than (A) trade payables
and accrued expenses incurred in the ordinary course of business
consistent with past practice and (B) liabilities not required to
be reflected in the Company’s financial statements pursuant
to GAAP or disclosed in filings made with the Commission, (iii) the
Company has not altered its method of accounting, (iv) the Company
has not declared or made any dividend or distribution of cash or
other property to its stockholders or purchased, redeemed or made
any agreements to purchase or redeem any shares of its capital
stock and (v) the Company has not issued any equity securities to
any officer, director or Affiliate, except pursuant to existing
Company stock option 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 disclosed in the SEC Reports, no event,
liability, fact, circumstance, occurrence or development has
occurred or exists or is reasonably expected to occur or exist 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 at least 1
Trading Day prior to the date that this representation is
made.
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(j)
Litigation . There is no action, suit, notice of
violation or proceeding 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, have or reasonably be
expected to result in a Material Adverse Effect. Nor has the
Company received written notice of an inquiry or investigation.
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 or threatened any
investigation by the Commission involving the Company or, to the
knowledge of the Company, 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.
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(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. None of the
Company’s or its Subsidiaries’ employees is a member of
a union that relates to such employee’s relationship with the
Company or such Subsidiary, and neither the Company nor any of its
Subsidiaries is a party to a collective bargaining agreement, and
the Company and its Subsidiaries believe that their relationships
with their employees are good. No executive officer, to the
knowledge of the Company, is, or is now expected to be, 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 in favor of any third party, and the
continued employment of each such executive officer does not
subject the Company or any of its Subsidiaries to any liability
with respect to any of the foregoing matters. The Company and its
Subsidiaries are in compliance with all material U.S. federal,
state, local and foreign laws and regulations relating to
employment and employment practices, terms and conditions of
employment and wages and hours, except where the failure to be in
compliance could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
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(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 or that it is
in 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 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 have or reasonably be expected to result in a Material
Adverse Effect.
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(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 currently
conducted as described in the SEC Reports, 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.
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(n)
Title to Assets . The Company and the Subsidiaries
have 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 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
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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 except where the failure to be in compliance would
not reasonably be expected to have a Material Adverse
Effect.
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(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, trade secrets, inventions, copyrights, licenses and
other intellectual property rights and 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 could
reasonably expect 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
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