Exhibit 10.1
SECURITIES PURCHASE
AGREEMENT
This Securities Purchase Agreement
(this “ Agreement ”) is dated as of
August 19, 2009 between Lightpath 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
Section 4(2) of the Securities Act of 1933, as amended (the
“ Securities Act ”), and Rule 506 promulgated
thereunder, 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 4.7.
“ 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.
“ Common Stock ”
means the Class A 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 Baker & Hostetler LLP, with offices located
at 200 South Orange Avenue, SunTrust Center, Suite 2300, Orlando,
FL 32801.
“ Disclosure Schedules
” shall mean Disclosure Schedules referred to in
Section 3.1.
“ Effective Date
” means the earlier of the date that (a) the
registration statement pursuant to which all of the Registrable
Securities (as defined in the Registration Rights Agreement) have
been registered for resale by the holders thereof is declared
effective by the Commission or (b) all of the Registrable
Securities have been sold pursuant to Rule 144 or may be sold
pursuant to Rule 144 without the requirement for the Company to be
in compliance with the current public information required under
Rule 144 and without volume or manner-of-sale
restrictions.
“ Escrow Agent ”
means Signature Bank, a New York State chartered bank and having an
office at 261 Madison Avenue, New York, New York 10016.
“ Escrow Agreement
” means the escrow agreement entered into prior to the date
hereof, by and among the Company, the Placement Agent 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,
options, restricted stock units and awards and similar issuances to
employees, officers, directors or consultants (provided that
issuances to consultants shall not exceed 200,000 shares in any 12
month period (subject to adjustment for reverse and forward stock
splits,
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recapitalizations and the like)) of
the Company pursuant to any stock option, stock purchase, stock
award or similar plan or arrangement duly adopted 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; (c) shares of Common
Stock issuable upon the exercise of any stock options, warrants, or
similar rights outstanding as of the date hereof or which the
Company is obligated to issue under any agreement or other
arrangement currently in effect as set forth on Schedule 1.1
hereto ; (d) 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 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;
provided , however , the prior written consent of
those Purchasers holding at least a majority in interest of the
Securities then outstanding will be required if the
merger/acquisition is priced below the exercise price of the
Warrants, (e) for purposes of Section 4.13 only, options
or warrants (not to exceed 200,000 shares in any 12 month period
(subject to adjustment for reverse and forward stock splits,
recapitalizations and the like)) to purchase Common Stock issued to
commercial lenders, equipment lessors, vendors or suppliers of the
Company, (f) for purposes of Section 4.13 only, options
or warrants (not to exceed 200,000 shares in any 12 month period
(subject to adjustment for reverse and forward stock splits,
recapitalizations and the like)) to purchase Common Stock issued to
underwriters, brokers or finders for payment of reasonable and
customary fees in connection with fundraising (debt or equity)
activities, including the sale of the Securities and (g) with
the prior written consent of Garden State, up to an amount of
common stock and warrants equal to the difference between 1,300,000
shares and the aggregate number of shares subscribed for hereunder,
on the same terms and conditions and prices as hereunder (
provided , however , the prices of such securities
shall be greater than the prices hereunder to the extent necessary
that such issuance(s) qualify as an “at-market”
transaction for purposes of Nasdaq’s corporate governance
rules), with investors executing definitive agreements for the
purchase of such securities and such transactions having closed on
or before the earlier of (i) the Filing Date (as defined in
the Registration Rights Agreement) or (ii) the date that the
Initial Registration Statement (as defined in the Registration
Rights Agreement) is actually filed with the Commission.
“ Force Majeure ”
shall mean the following acts or omissions provided that they are
beyond the direct control of the Company: an act of God, an act of
war, terrorism, natural disaster or prolonged and systematic
failure of communication or electrical services. Force Majeure
shall not include any act or omission by the Commission or the
Trading Market.
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“ GAAP ” shall
have the meaning ascribed to such term in
Section 3.1(h).
“ Garden State ”
means Garden State Securities, Inc.
“ Indebtedness ”
shall have the meaning ascribed to such term in
Section 3.1(aa).
“ Intellectual Property
Rights ” shall have the meaning ascribed to such term in
Section 3.1(o).
“ Knowledge of the
Company ”, “ the Company’s Knowledge
” and terms and phrases of similar import, whether or not
capitalized, means (i) actual knowledge, awareness or belief
possessed the executive officers and directors of the Company, and
(ii) the knowledge, awareness or belief that the executive
officers and directors would have possessed by using reasonable
care and diligence under the circumstances.
“ Legend Removal Date
” shall have the meaning ascribed to such term in
Section 4.1(c).
“ 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).
“ Participation Maximum
” shall have the meaning ascribed to such term in
Section 4.13(a).
“ Per Share Purchase
Price ” equals $1.26 1 ,
subject to adjustment for reverse and forward stock splits, stock
dividends, stock combinations and other similar transactions of the
Common Stock that occur after the date of this
Agreement.
“ Person ” means
an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or
subdivision thereof) or other entity of any kind.
“ Pre-Notice ”
shall have the meaning ascribed to such term in
Section 4.13(b).
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80% of the
average of the closing bid prices for the 5 Trading Days
immediately prior to the date of the first Purchase
Agreement.
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“ Pro Rata Portion
” shall have the meaning ascribed to such term in
Section 4.13(e).
“ Proceeding ”
means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or
threatened.
“ Public Information
Failure ” shall have the meaning ascribed to such term in
Section 4.3(b).
“ Public Information
Failure Payments ” shall have the meaning ascribed to
such term in Section 4.3(b).
“ Purchaser Party
” shall have the meaning ascribed to such term in
Section 4.10.
“ Registration Rights
Agreement ” means the Registration Rights Agreement,
dated the date hereof, among the Company and the Purchasers, in the
form of Exhibit A attached hereto.
“ 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 and the Warrant
Shares.
“ 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.
“ 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).
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“ 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.
“ Subsequent Financing
” shall have the meaning ascribed to such term in
Section 4.13(a).
“ Subsequent Financing
Notice ” shall have the meaning ascribed to such term in
Section 4.13(b).
“ Subsidiary ”
means any subsidiary of the Company as set forth on Schedule
3.1(a) and shall, where applicable, also include any direct or
indirect subsidiary of the Company formed or acquired after the
date hereof.
“ 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, the Warrants, the Registration Rights
Agreement, 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 Registrar and Transfer Agent Company, the current
transfer agent of the Company, with a mailing address of 10
Commerce Drive, Cranford, NJ 07016 and a facsimile number of
(908) 497-2310, and any successor transfer agent of the
Company.
“ Variable Rate
Transaction ” shall have the meaning ascribed to such
term in Section 4.14(b).
“ VWAP ” means,
for any date, the price determined by the first of the following
clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average
price of the Common Stock for such date (or the nearest preceding
date) on the Trading Market on which the Common Stock is then
listed or quoted as reported by Bloomberg L.P. (based on a Trading
Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City
time)), (b) if the OTC Bulletin
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Board is not a Trading Market, the
volume weighted average price of the Common Stock for such date (or
the nearest preceding date) on the OTC Bulletin Board, (c) if
the Common Stock is not then listed or quoted for trading on the
OTC Bulletin Board and if prices for the Common Stock are then
reported in the “Pink Sheets” published by Pink OTC
Markets, Inc. (or a similar organization or agency succeeding to
its functions of reporting prices), the most recent bid price per
share of the Common Stock so reported, or (d) in all other
cases, the fair market value of a share of Common Stock as
determined by an independent appraiser selected in good faith by
the Purchasers of a majority in interest of the Shares then
outstanding and reasonably acceptable to the Company, the fees and
expenses of which shall be paid by the Company.
“ Warrants ”
means, collectively, the Common Stock purchase warrants delivered
to the Purchasers at the Closing in accordance with
Section 2.2(a) hereof, which Warrants shall be exercisable as
set forth therein and have a term of exercise expiring 5 years from
their initial date of exercise, in the form of
Exhibit B attached hereto.
“ Warrant Shares
” means the shares of Common Stock issuable upon exercise of
the Warrants.
“ 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 1,300,000 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.
(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) a legal opinion of Company
Counsel, in substantially the form of Exhibit C attached
hereto;
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(iii) a copy of the irrevocable
instructions to the 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;
(iv) a Warrant registered in the
name of such Purchaser to purchase up to a number of shares of
Common Stock equal to 50% of such Purchaser’s Shares, with an
exercise price equal to $1.73 2 ,
subject to adjustment therein; and
(v) the Registration Rights
Agreement duly executed by the Company.
(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) such Purchaser’s
Subscription Amount by wire transfer to the Escrow Agent;
and
(iii) the Registration Rights
Agreement duly executed by such Purchaser.
2.3 Closing Conditions
.
(a) The obligations of the Company
hereunder in connection with the Closing are subject to the
following conditions being met:
(i) the accuracy in all material
respects on the Closing Date of the representations and warranties
of the Purchasers contained herein (unless as of a specific date
therein);
(ii) all obligations, covenants and
agreements of each Purchaser required to be performed at or prior
to the Closing Date shall have been performed;
(iii) the minimum aggregate
Subscription Amount hereunder shall be $800,000; and
(iv) the delivery by each Purchaser
of the items set forth in Section 2.2(b) of this
Agreement.
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110% of the average of the
closing bid prices for the 5 Trading Days immediately prior to the
date of the first Purchase 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:
(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;
(v) the minimum aggregate
Subscription Amount hereunder shall be $800,000; and
(vi) from the date hereof to the
Closing Date, trading in the Common Stock shall not have been
suspended by the Commission or the Company’s principal
Trading Market (except for any suspension of trading of limited
duration agreed to by the Company, which suspension shall be
terminated prior to the Closing), and, at any time prior to the
Closing Date, trading in securities generally as reported by
Bloomberg L.P. shall not have been suspended or limited, or minimum
prices shall not have been established on securities whose trades
are reported by such service, or on any Trading Market, nor shall a
banking moratorium have been declared either by the United States
or New York State authorities nor shall there have occurred any
material outbreak or escalation of hostilities or other national or
international calamity of such magnitude in its effect on, or any
material adverse change in, any financial market which, in each
case, in the reasonable judgment of each Purchaser, makes it
impracticable or inadvisable to purchase the Securities at the
Closing.
ARTICLE III.
REPRESENTATIONS AND
WARRANTIES
3.1 Representations and
Warranties of the Company . Except as set forth in the
Disclosure Schedules, which Disclosure Schedules shall be deemed a
part hereof and shall qualify any representation or otherwise made
herein to the extent of the disclosure contained in the
corresponding section of the Disclosure Schedules, the Company
hereby makes the following representations and warranties to each
Purchaser:
(a) Subsidiaries . All of the
direct and indirect subsidiaries of the Company are set forth on
Schedule 3.1(a) . The Company owns, directly or indirectly,
all of the capital stock or other equity interests of each
Subsidiary free and clear of any Liens, and all 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. If the
Company has no subsidiaries, all other references to the
Subsidiaries or any of them in the Transaction Documents shall be
disregarded.
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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. Each of the Company and
the Subsidiaries is duly qualified to conduct business and is in
good standing as a foreign corporation or other entity in each
jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except
where the failure to be so qualified or in good standing, as the
case may be, could not have or reasonably be expected to result in:
(i) a material adverse effect on the legality, validity or
enforceability of any Transaction Document, (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 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, subject to the satisfaction of and obtaining the
Required Approvals, 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) insofar as
indemnification and contribution provisions may be limited by
applicable law.
(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
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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, or (iii) subject to the satisfaction and
obtaining 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 in connection
with the execution, delivery and performance by the Company of the
Transaction Documents, other than: (i) the filings required
pursuant to Section 4.6 of this Agreement, (ii) the
filing with the Commission pursuant to the Registration Rights
Agreement, (iii) the notice and/or application(s) to each
applicable Trading Market for the issuance and sale of the
Securities and the listing of the Securities 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 and (v) other consents,
waivers, authorizations or orders, or notice to, or filings or
registrations with other Persons which have already been obtained,
delivered or made and set forth on Schedule 3.1(e)
(collectively, the “ Required Approvals
”).
(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 restrictions on transfer provided for in the Transaction
Documents. The Warrant Shares, when issued in accordance with the
terms of the Warrants, will be validly issued, fully paid and
nonassessable, free and clear of all Liens imposed by the Company
other than restrictions on transfer provided for in the Transaction
Documents. The Company has reserved from its duly authorized
capital stock the maximum number of shares of Common Stock issuable
pursuant to this Agreement and the Warrants.
(g) Capitalization . The
capitalization of the Company is as set forth on Schedule
3.1(g) , which Schedule 3.1(g) shall also include the
number of shares of
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Common Stock owned beneficially, and
of record, by Affiliates of the Company as of the date hereof. The
Company has not issued any capital stock since its most recently
filed periodic report under the Exchange Act, 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
plans and pursuant to the conversion and/or exercise of Common
Stock Equivalents outstanding as of the date of the most recently
filed periodic report under the Exchange Act. 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 set forth on
Schedule 3.1(g) or 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 set forth on Schedule 3.1(g) , the issuance and
sale of the Securities will not obligate the Company to issue
shares of Common Stock or other securities to any Person (other
than the Purchasers) and will not result in a right of any holder
of Company securities to adjust the exercise, conversion, exchange
or reset price under any of such securities. All of the outstanding
shares of capital stock of the Company are validly issued, fully
paid and nonassessable, have been issued in compliance with all
federal and state securities laws, and none of such outstanding
shares was issued in violation of any preemptive rights or similar
rights to subscribe for or purchase securities. No further approval
or authorization of any stockholder, the Board of Directors or
others is required for the issuance and sale of the Securities.
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 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, 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 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
12
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, 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 and stock
purchase 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 and the consummation of the transactions contemplated by
the Transaction Documents or as set forth on Schedule 3.1(i)
, 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.
(j) Litigation . Except as
set forth on Schedule 3.1(j) , 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, have or reasonably be expected to result in a
Material
13
Adverse Effect. Neither the Company
nor any Subsidiary, nor any director or officer thereof, is or has
been the subject of any Action involving a claim of violation of or
liability under federal or state securities laws or a claim of
breach of fiduciary duty. There has not been, and to the knowledge
of the Company, there is not pending or contemplated, any
investigation by the Commission involving the Company or any
current or former director or officer of the Company. 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. 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, to the knowledge of the Company, the continued
employment of each such executive officer does not subject the
Company or any of its Subsidiaries to any liability with respect to
any of the foregoing matters. The Company and its Subsidiaries are
in compliance with all U.S. federal, state, local and foreign laws
and regulations relating to employment and employment practices,
terms and conditions of employment and wages and hours, except
where the failure to be in compliance could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse
Effect.
(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 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 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 have or reasonably be expected to result in 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
14
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.
(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 as set forth on
Schedule 3.1(n) and 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 with which the
Company and the Subsidiaries are in material compliance.
(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
as described in the SEC Reports as necessary or material for use in
connection with their respective businesses and which the failure
to so have could 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 security 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 reasonably believed by the Company and this
Subsidiaries to be 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 at least
equal to $5,000,000. 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 set forth in the SEC Reports, none of
the officers or directors of the Company and, to the knowledge
of
15
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 $120,000 other than for: (i) payment of
salary or consulting fees for services rendered,
(ii) reimbursement for expenses incurred on behalf of the
Company and (iii) other employee benefits, including stock
option agreements under any stock option plan of the
Company.
(r) Sarbanes-Oxley; Internal
Accounting Controls . Except as set forth in the most recently
filed periodic SEC Report, 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. Except as set forth in the
most recently filed periodic SEC Report, 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. 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 information required to be disclosed
by the Company in the reports it files or submits under the
Exchange Act is recorded, processed, summarized and reported,
within the time periods specified in the Commission’s rules
and forms. The Company’s certifying officers have evaluated
the effectiveness of the Company’s disclosure controls and
procedures as of the end of the period covered by the
Company’s most recently filed periodic report under the
Exchange Act (such date, the “ Evaluation Date
”). 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.
Since the Evaluation Date, there have been no changes in the
Company’s internal control over financial reporting (as such
term is defined in the Exchange Act) that has materially affected,
or is reasonably likely to materially affect, the Company’s
internal control over financial reporting.
(s) Certain Fees . Except as
set forth on Schedule 3.1(s) , no brokerage or
finder’s fees or commissions are or will be payable by the
Company to any broker, financial advisor or consultant, finder,
placement agent, investment banker, bank or other Person with
respect to the transactions contemplated by the Transaction
Documents. The Purchasers shall have no obligation with respect to
any fees or with respect to any claims
16
made by or on behalf of other
Persons for fees of a type contemplated in this Section that may be
due in connection with the transactions contemplated by the
Transaction Documents.
(t) Private Placement .
Assuming the accuracy of the Purchasers’ representations and
warranties set forth in Section 3.2, no registration under the
Securities Act is required for the offer and sale of the Securities
by the Company to the Purchasers as contemplated hereby. The
issuance and sale of the Securities hereunder does not contravene
the rules and regulations of the Trading Market.
(u) Investment Company . The
Company is not, and is not an Affiliate of, and immediately after
receipt of payment for the Securities, will not be or be an
Affiliate of, an “investment company” within the
meaning of the Investment Company Act of 1940, as amended. The
Company shall conduct its business in a manner so that it will not
become an “investment company” subject to registration
under the Investment Company Act of 1940, as amended.
(v) Registration Rights .
Other than each of the Purchasers, no Person has any right to cause
the Company to effect the registration under the Securities Act of
any securities of the Company other than registrations that are
currently effective.
(w) Listing and Maintenance
Requirements . The Common Stock is registered pursuant to
Section 12(b) or 12(g) of the Exchange Act, and the Company
has taken no action designed to, or which to its knowledge is
likely to have the effect of, terminating the registration of the
Common Stock under the Exchange Act nor has the Company received
any notification that the Commission is contemplating terminating
such registration. Except as disclosed on Schedule 3.1(w) ,
the Company has not, in the 12 months preceding the date hereof,
received notice from any Trading Market on which the Common Stock
is or has been listed or quoted to the effect that the Company is
not in material compliance with the listing or maintenance
requirements of such Trading Market. The Company is, and has no
reason to believe that it will not in the foreseeable future
continue to be, in compliance with all such listing and maintenance
requirements.
(x) Application of Takeover
Protections . The Company and the Board of Directors have taken
all necessary action, if any, in order to render inapplicable any
control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other
similar anti-takeover provision under the Company’s
certificate of incorporation (or similar charter documents) or the
laws of its state of incorporation that is or could become
applicable to the Purchasers as a result of the Purchasers and the
Company fulfilling their obligations or exercising their rights
under the Transaction Documents, including without limitation as a
result of the Company’s issuance of the Securities and the
Purchasers’ ownership of the Securities.
(y) Disclosure . Except with
respect to the material terms and conditions of the transactions
contemplated by the Transaction Documents, the Company confirms
that neither it nor any other Person acting on its behalf has
provided any of the Purchasers or
17
their agents or counsel with any
information that it believes constitutes or might constitute
material, nonpublic information. The Company understands and
confirms that the Purchasers will rely on the foregoing
representation in effecting transactions in securities of the
Company. All of the disclosure furnished by the Company to the
Purchasers regarding the Company, its business and the transactions
contemplated hereby, including the Disclosure Schedules to this
Agreement, is true and correct and does not contain any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in light of
the circumstances under which they were made, not misleading. The
press releases disseminated by the Company during the twelve months
preceding the date of this Agreement taken as a whole do not
contain any untrue statement of a material fact or omit 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 and when made, not misleading. The Company
acknowledges and agrees that no Purchaser makes or has made any
representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in
Section 3.2 hereof.
(z) No Integrated Offering .
Assuming the accuracy of the Purchasers’ representations and
warranties set forth in Section 3.2, neither the Company, nor
any of its Affiliates, nor, to the knowledge of the Company, any
Person acting on its or their behalf has, directly or indirectly,
made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would cause this
offering of the Securities to be integrated with prior offerings by
the Company for purposes of (i) the Securities Act which would
require the registration of any such securities under the
Securities Act, or (ii) any applicable shareholder approval
provisions of any Trading Market on which any of the securities of
the Company are listed or designated.
(aa) Solvency . Based on the
consolidated financial condition of the Company as of the Closing
Date, after giving effect to the receipt by the Company of the
proceeds from the sale of the Securities hereunder: (i) the
fair saleable value of the Company’s assets exceeds the
amount that will be required to be paid on or in respect of the
Company’s existing debts and other liabilities (including
known contingent liabilities) as they mature, (ii) the
Company’s assets do not constitute unreasonably small capital
to carry on its business as now conducted and as proposed to be
conducted including its capital needs taking into account the
particular capital requirements of the business conducted by the
Company, and projected capital requirements and capital
availability thereof, and (iii) the current cash flow of the
Company, together with the proceeds the Company would receive, were
it to liquidate all of its assets, after taking into account all
anticipated uses of the cash, would be sufficient to pay all
amounts on or in respect of its liabilities when such amounts are
required to be paid. The Company does not intend to incur debts
beyond its ability to pay such debts as they mature (taking into
account the timing and amounts of cash to be payable on or in
respect of its debt). The Company has no knowledge of any facts or
circumstances which lead it to believe that it will file for
reorganization or liquidation under the bankruptcy or
reorganization laws of any jurisdiction within one year from the
Closing Date. Schedule 3.1(aa) sets forth as of
the
18
date hereof all outstanding secured
and unsecured Indebtedness of the Company or any Subsidiary, or for
which the Company or any Subsidiary has commitments. For the
purposes of this Agreement, “ Indebtedness ”
means (x) any liabilities for borrowed money or amounts owed
in excess of $50,000 (other than trade accounts payable incurred in
the ordinary course of business), (y) all guaranties,
endorsements and other contingent obligations in respect of
indebtedness of others, whether or not the same are or should be
reflected in the Company’s balance sheet (or the notes
thereto), except guaranties by endorsement of negotiable
instruments for deposit or collection or similar transactions in
the ordinary course of business; and (z) the present value of
any lease payments in excess of $50,000 due under leases required
to be capitalized in accordance with GAAP. Neither the Company nor
any Subsidiary is in default with respect to any
Indebtedness.
(bb) Tax Status . Except for
matters that would not, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect, the
Company and each Subsidiary has filed all necessary federal, state
and foreign income and franchise tax returns and has paid or
accrued all taxes shown as due thereon, and the Company has no
knowledge of a tax deficiency which has been asserted or threatened
against the Company or any Subsidiary.
(cc) No General Solicitation
. Neither the Company nor, to the knowledge of the Company, any
Person acting on behalf of the Company has offered or sold any of
the Securities by any form of general solicitation or general
advertising. The Company has offered the Securities for sale only
to the Purchasers and certain other “accredited
investors” within the meaning of Rule 501 under the
Securities Act.
(dd) Foreign Corrupt
Practices. Neither the Company, nor to the knowledge of the
Company, any agent or other person acting on behalf of the Company,
has: (i) directly or indirectly, used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses
related to foreign or domestic political activity, (ii) made
any unlawful payment to foreign or domestic government officials or
employees or to any foreign or domestic political parties or
campaigns from corporate funds, (iii) failed to disclose fully
any contribution made by the Company (or made by any person acting
on its behalf of which the Company is aware) which is in violation
of law or (iv) violated in any material respect any provision
of the Foreign Corrupt Practices Act of 1977, as
amended.
(ee) Accountants . The
Company’s accounting firm is set forth on Schedule
3.1(ee) of the Disclosure Schedules. To the knowledge and
belief of the Company, such accounting firm: (i) is a
registered public accounting firm as required by the Exchange Act
and (ii) shall express its opinion with respect to the
financial statements to be included in the Company’s Annual
Report for the year ended June 30, 2009.
(ff) No Disagreements with
Accountants and Lawyers . There are no disagreements of any
kind presently existing, or reasonably anticipated by the Company
to arise, between the Company and the accountants and lawyers
formerly or presently employed by the Company and the Company is
current with respect to any fees owed to its accountants and
lawyers which could affect the Company’s ability to perform
any of its obligations under any of the Transaction
Documents.
19
(gg) Acknowledgment Regarding
Purchasers’ Purchase of Securities . The Company
acknowledges and agrees that each of the Purchasers is acting
solely in the capacity of an arm’s length purchaser with
respect to the Transaction Documents and the transactions
contemplated thereby. The Company further acknowledges that no
Purchaser is acting as a financial advisor or fiduciary of the
Company (or in any similar capacity) with respect to the
Transaction Documents and the transactions contemplated thereby and
any advice given by any Purchaser or any of their respective
representatives or agents in connection with the Transaction
Documents and the transactions contemplated thereby is merely
incidental to the Purchasers’ purchase of the Securities. The
Company further represents to each Purchaser that the
Company’s decision to enter into this Agreement and the other
Transaction Documents has been based solely on the independent
evaluation of the transactions contemplated hereby by the Company
and its representatives.
(hh) Acknowledgment Regarding
Purchaser’s Trading Activity . Anything in this Agreement
or elsewhere herein to the contrary notwithstanding (except for
Sections 3.2(f) and 4.16 hereof), it is understood and acknowledged
by the Company that: (i) none of the Purchasers have been
asked by the Company to agree, nor has any Purchaser agreed, to
desist from purchasing or selling, long and/or short, securities of
the Company, or “derivative” securities based on
securities issued by the Company or to hold the Securities for any
specified term, (ii) past or future open market or other
transactions by any Purchaser, specifically including, without
limitation, Short Sales or “derivative” transactions,
before or after the closing of this or future private placement
transactions, may negatively impact the market price of the
Company’s publicly-traded securities, (iii) any
Purchaser, and counter-parties in “derivative”
transactions to which any such Purchaser is a party, directly or
indirectly, may presently have a “short” position in
the Common Stock and (iv) each Purchaser shall not be deemed
to have any affiliation with or control over any arm’s length
counter-party in any “derivative” transaction. The
Company further understands and acknowledges that (y) one or
more Purchasers may engage in hedging activities at various times
during the period that the Securities are outstanding, including,
without limitation, during the periods that the value of the
Warrant Shares deliverable with respect to Securities are being
determined, and (z) such hedging activities (if any) could
reduce the value of the existing stockholders’ equity
interests in the Company at and after the time that the hedging
activities are being conducted. The Company acknowledges that such
aforementioned hedging activities do not constitute a breach of any
of the Transaction Documents.
(ii) Regulation M Compliance
. The Company has not, and to its knowledge no one acting on
its behalf has, (i) taken, directly or indirectly, any action
designed to cause or to result in the stabilization or manipulation
of the price of any security of the Company to facilitate the sale
or resale of any of the Securities, (ii) sold, bid for,
purchased, or paid any compensation for soliciting purchases of,
any of the Securities, or
20
(iii) paid or agreed to pay to any
Person any compensation for soliciting another to purchase any
other securities of the Company, other than, in the case of clauses
(ii) and (iii), compensation paid to the Company’s
placement agent in connection with the placement of the
Securities.
(jj) Form S-3 Eligibility .
The Company is eligible to register the resale of the Securities
for resale by the Purchaser on Form S-3 promulgated under the
Securities Act.
(kk) Stock Option Plans .
Each stock option granted by the Company under the Company’s
stock option plan was granted (i) in accordance with the terms
of the Company’s stock option plan and (ii) with an
exercise price at least equal to the fair market value of the
Common Stock on the date such stock option would be considered
granted under GAAP and applicable law. No stock option granted
under the Company’s stock option plan has been backdated. The
Company has not knowingly granted, and there is no and has been no
Company policy or practice to knowingly grant, stock options prior
to, or otherwise knowingly coordinate the grant of stock options
with, the release or other public announcement of material
information regarding the Company or its Subsidiaries or their
financial results or prospects.
3.2 Representations and
Warranties of the Purchasers . Each Purchaser, for itself and
for no other Purchaser, hereby represents and warrants as of the
date hereof and as of the Closing Date to the Company as follows
(unless as of a specific date therein):
(a) Organization; Authority .
Such Purchaser is either an individual or an entity duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its organization with full right, corporate or
partnership power and authority to enter into and to consummate the
transactions contemplated by the Transaction Documents and
otherwise to carry out its obligations hereunder and thereunder.
The execution and delivery of the Transaction Documents and
performance by such Purchaser of the transactions contemplated by
the Transaction Documents have been duly authorized by all
necessary corporate, partnership, limited liability company or
similar action, as applicable, on the part of such Purchaser. Each
Transaction Document to which it is a party has been duly executed
by such Purchaser, and when delivered by such Purchaser in
accordance with the terms hereof, will constitute the valid and
legally binding
