|
Exhibit 10.1
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this " Agreement
"), dated as of December 18, 2006, is by and between LIPID
SCIENCES, INC., a Delaware corporation (the " Company
"), and each of the entities whose names appear on the signature
pages hereof. Such entities are each referred to herein as an
" Investor " and, collectively, as the "
Investors . "
The Company wishes to sell to each Investor, and each Investor
wishes to purchase, on the terms and subject to the conditions set
forth in this Agreement, shares (" Shares ") of the
Company’s common stock, $0.001 par value per share (the "
Common Stock ").
The Company has agreed to effect the registration of the Shares
for resale by the holders thereof under the Securities Act of 1933,
as amended (the " Securities Act "), pursuant to a
Registration Rights Agreement in the form attached hereto as
Exhibit A (the " Registration Rights
Agreement ").
The sale of the Shares by the Company to the Investors will be
effected in reliance upon the exemption from the securities
registration requirements of the Securities Act afforded by the
provisions of Regulation D (" Regulation D
"), as promulgated by the Commission (as defined below) under the
Securities Act.
The obligations of each Investor hereunder are several and not
joint with the obligations of the other Investors hereunder, and no
Investor shall be responsible in any way for the performance of the
obligations of any other Investor hereunder.
The Company and each Investor hereby agree as follows:
1.1
Closing . Upon the terms and subject to the
satisfaction or waiver of the conditions set forth herein, the
Company agrees to sell and each Investor agrees, severally and not
jointly, to purchase Shares in the amount set forth below such
Investor’s name on the signature pages hereof. The date
on which the closing of such purchase and sale occurs (the "
Closing ") is hereinafter referred to as the "
Closing Date ". The Closing will be deemed to
occur at the offices of the Company, 7068 Koll Center Parkway,
Suite 401, Pleasanton, CA 94566 at 12:30 p.m., Pacific Daylight
Time, on December 18, 2006, or at such other time and place upon
which the Company and the Investors shall agree.
1.2
Certain Definitions . When used herein, the following
terms shall have the respective meanings indicated:
" Affiliate " means, as to any Person (the "
subject Person "), any other Person (a) that
directly or indirectly through one or more intermediaries controls
or is controlled by, or is under direct or indirect common control
with, the subject Person, (b) that directly or indirectly
beneficially owns or holds ten percent (10%) or more of any class
of voting equity of the subject Person, or (c) ten percent
(10%) or more of the voting equity of which is directly or
indirectly beneficially owned or held by the subject Person. For
the purposes of this definition, " control " when
used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, through
representation on such Person’s board of directors or other
management committee or group, by contract or otherwise.
" Board of Directors " means the Company’s
board of directors.
" Business Day " means any day
other than a Saturday, a Sunday or a day on which the New York
Stock Exchange is closed or on which banks in the City of New York
are required or authorized by law to be closed.
" Closing " has the meaning specified in
Section 1.1 of this Agreement.
" Closing Date " has the meaning specified in
Section 1.1 of this Agreement.
" Commission " means the Securities and Exchange
Commission.
" Common Stock " has the meaning specified in the
preamble to this Agreement.
" Disclosure Documents " means all SEC Documents
filed with the Commission at least five (5) Business Days prior to
the Execution Date.
" Effective Date " has the meaning set forth in
the Registration Rights Agreement.
" Environmental Law " means any federal, state,
provincial, local or foreign law, statute, code or ordinance,
principle of common law, rule or regulation, as well as any Permit,
order, decree, judgment or injunction issued, promulgated, approved
or entered thereunder, relating to pollution or the protection,
cleanup or restoration of the environment or natural resources, or
to the public health or safety, or otherwise governing the
generation, use, handling, collection, treatment, storage,
transportation, recovery, recycling, discharge or disposal of
hazardous materials.
" Equity Securities " means (i) any shares of
Common Stock, (ii) any other equity security of the Company,
including without limitation shares of preferred stock,
(iii) any other security of the Company which by its terms is
convertible into or exchangeable or exercisable for any equity
security of the Company, or (iv) any option, warrant or other
right to subscribe for, purchase or otherwise acquire any such
security described in the foregoing clauses (i) through
(iii).
" ERISA " means the Employee Retirement Income
Security Act of 1974, as amended, and the regulations and published
interpretations thereunder.
" Exchange Act " means the Securities Exchange Act
of 1934, as amended (or any successor act), and the rules and
regulations thereunder (or respective successors thereto).
" Execution Date " means the date of this
Agreement.
" GAAP " means generally accepted accounting
principles, applied on a consistent basis, as set forth in
(i) opinions of the Accounting Principles Board of the
American Institute of Certified Public Accountants,
(ii) statements of the Financial Accounting Standards Board
and (iii) interpretations of the Commission and the staff of
the Commission. Accounting principles are applied on a
"consistent basis" when the accounting principles applied in a
current period are comparable in all material respects to those
accounting principles applied in a preceding period.
" Governmental Authority " means any nation or
government, any state, provincial or political subdivision thereof
having jurisdiction over the Company and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, including without
limitation any stock exchange, securities market or self-regulatory
organization.
2
" Governmental Requirement " means
any law, statute, code, ordinance, order, rule, regulation,
judgment, decree, injunction, franchise, license or other directive
or requirement of any federal, state, county, municipal, parish,
provincial or other Governmental Authority or any department,
commission, board, court, agency or any other instrumentality of
any of them to which the Company is bound.
" Intellectual Property " means any U.S. or
foreign patents, patent rights, patent applications, trademarks,
trade names, service marks, brand names, logos and other trade
designations (including unregistered names and marks), trademark
and service mark registrations and applications, copyrights and
copyright registrations and applications, inventions, invention
disclosures, protected formulae, formulations, processes, methods,
trade secrets, computer software, computer programs and source
codes, manufacturing research and similar technical information,
engineering know-how, customer and supplier information, assembly
and test data drawings or royalty rights.
" Knowledge of the Company " means any other
phrases of similar import, with respect to any matter in question
relating to the Company, if S. Lewis Meyer, Sandra Gardiner or
H. Bryan Brewer, Jr., M.D. has actual knowledge of such matter,
without duty of investigation or inquiry.
" Lien " means, with respect to any Property, any
mortgage, pledge, hypothecation, assignment, deposit arrangement,
security interest, tax lien, financing statement, pledge, charge,
or other lien, charge, easement, encumbrance, preference, priority
or other security agreement or preferential arrangement of any kind
or nature whatsoever on or with respect to such Property
(including, without limitation, any conditional sale or other title
retention agreement having substantially the same economic effect
as any of the foregoing).
" Material Adverse Effect " means an effect that
is material and adverse to (i) the consolidated business,
properties, assets, operations, results of operations, financial
condition or prospects, of the Company taken as a whole, or
(ii) the ability of the Company to perform its obligations
under this Agreement or the other Transaction Documents (as defined
below).
" Material Contracts " means, as to the Company,
any agreement required pursuant to Item 601 of Regulation S-B or
Item 601 of Regulation S-K, as applicable, promulgated under the
Securities Act to be filed as an exhibit to any report, schedule,
registration statement or definitive proxy statement filed or
required to be filed by the Company with the Commission under the
Exchange Act or any rule or regulation promulgated thereunder, and
any and all amendments, modifications, supplements, renewals or
restatements thereof.
" NASD " means the National Association of
Securities Dealers, Inc.
" Pension Plan " means an employee benefit plan
(as defined in ERISA) maintained by the Company for employees of
the Company or any of its Affiliates.
" Permitted Liens " means the following:
(a)
encumbrances consisting of easements, rights-of-way, zoning
restrictions or other restrictions on the use of real property or
imperfections to title that do not (individually or in the
aggregate) materially impair the ability of the Company to use such
Property in its businesses, and none of which is violated in any
material respect by existing or proposed structures or land
use;
(b)
Liens for taxes, assessments or other governmental charges
(including without limitation in connection with workers’
compensation and unemployment insurance) that are not
3
delinquent or which are being contested in good
faith by appropriate proceedings, which proceedings have the effect
of preventing the forfeiture or sale of the Property subject to
such Liens, and for which adequate reserves (as determined in
accordance with GAAP) have been established;
(c)
Liens of mechanics, materialmen, warehousemen, carriers, landlords
or other similar statutory Liens securing obligations that are not
yet due and are incurred in the ordinary course of business or
which are being contested in good faith by appropriate proceedings,
which proceedings have the effect of preventing the forfeiture or
sale of the Property subject to such Liens, for which adequate
reserves (as determined in accordance with GAAP) have been
established; and
(d)
Liens in an amount not to exceed $10,000.
" Person " means any individual, corporation,
trust, association, company, partnership, joint venture, limited
liability company, joint stock company, Governmental Authority or
other entity.
" Principal Market " means the principal exchange
or market on which the Common Stock is listed or traded.
" Property " means property and/or assets of all
kinds, whether real, personal or mixed, tangible or intangible
(including, without limitation, all rights relating thereto).
" Pro Rata Share " means, with respect to an
Investor, the ratio determined by dividing (i) the number of
Shares purchased hereunder by such Investor by (ii) the
aggregate number of Shares purchased hereunder by all of the
Investors.
" Purchase Price " means, with respect to an
Investor, the number of Shares purchased by such Investor at the
Closing multiplied by $1.35.
" Registrable Securities " has the meaning set
forth in the Registration Rights Agreement.
" Rule 144 " means Rule 144 under the Securities
Act or any successor provision.
" SEC Documents " has the meaning specified in
Section 3.4 of this Agreement.
" Subsequent Placement " means the issuance, sale,
exchange, or agreement or obligation to issue, sell or exchange or
reserve, or agreement to or set aside for issuance, sale or
exchange, any Equity Securities, other than in connection with bona
fide licensing or other strategic transactions not for the primary
purpose of raising equity capital approved by the Board of
Directors.
" Subsidiary " means, with respect to any Person,
any corporation or other entity of which at least a majority of the
outstanding shares of stock or other ownership interests having by
the terms thereof ordinary voting power to elect a majority of the
board of directors (or Persons performing similar functions) of
such corporation or entity (regardless of whether or not at the
time, in the case of a corporation, stock of any other class or
classes of such corporation shall have or might have voting power
by reason of the happening of any contingency) is at the time
directly or indirectly owned or controlled by such Person or one or
more of its Subsidiaries or by such Person and one or more of its
Subsidiaries.
" Trading Day " means any day on which the Common
Stock is purchased and sold on the Principal Market.
4
" Transaction Documents " means,
collectively, this Agreement, the Registration Rights Agreement,
the warrant issued to the Placement Agent (as defined herein) and
all other agreements, schedules, documents and other instruments
executed and/or delivered by or on behalf of the Company or any of
its officers at the Closing.
1.3
Other Definitional Provisions . All definitions
contained in this Agreement are equally applicable to the singular
and plural forms of the terms defined. The words "
hereof ", " herein " and "
hereunder " and words of similar import referring to
this Agreement refer to this Agreement as a whole and not to any
particular provision of this Agreement.
Each Investor (with respect to itself only) hereby represents
and warrants to the Company and agrees with the Company that, as of
the Execution Date:
2.1
Authorization; Enforceability . Such Investor is duly
and validly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or organization
as set forth below such Investor’s name on the signature page
hereof. Such Investor has the requisite organizational power
and authority to purchase the Shares to be purchased by it
hereunder and to execute, deliver and perform its obligations
pursuant to this Agreement and the other Transaction Documents to
which it is a party. This Agreement constitutes, and upon
execution and delivery thereof, each other Transaction Document to
which such Investor is a party will constitute, such
Investor’s valid and legally binding obligation, enforceable
in accordance with its terms, subject to (i) applicable
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other similar laws of general application relating to
or affecting the enforcement of creditors’ rights generally,
and (ii) general principles of equity.
2.2
Accredited Investor . Such Investor (i) is an
"accredited investor" as that term is defined in Rule 501 of
Regulation D, (ii) was not formed or organized for the
specific purpose of making an investment in the Company, and
(iii) is acquiring the Shares solely for its own account and
not with a present view to the public resale or distribution of all
or any part thereof, except pursuant to sales that are registered
under, or exempt from the registration requirements of, the
Securities Act; provided, however , that in making such
representation, such Investor reserves the right to sell, transfer
or otherwise dispose of the Shares in accordance with the
provisions of this Agreement (including pursuant to the
Registration Rights Agreement) and with Federal and state
securities laws applicable to such sale, transfer or disposition.
Such Investor can bear the economic risk of a total loss of its
investment in the Shares and has such knowledge and experience in
business and financial matters so as to enable it to understand the
risks of and form an investment decision with respect to its
investment in the Shares.
2.3
Information . Investor acknowledges that it has been
provided with information regarding the business, operations and
financial condition of the Company and has, prior to the Execution
Date, been granted the opportunity to ask questions of and receive
answers from representatives of the Company, its officers,
directors, employees and agents concerning the Company in order for
such Investor to make an informed decision with respect to its
investment in the Shares. Neither such information nor any
other investigation conducted by such Investor or any of its
representatives shall modify, amend or otherwise affect such
Investor’s right to rely on the Company’s
representations and warranties contained in this Agreement.
2.4
Limitations on Disposition . Such Investor
acknowledges that, except as provided in the Registration Rights
Agreement, the Shares have not been and are not being registered
under the Securities Act and may not be transferred or resold
without registration under the Securities Act or unless pursuant to
an exemption therefrom.
5
2.5
Legend . Such Investor understands that the
certificates representing the Shares may bear at issuance a
restrictive legend in substantially the following form:
-
-
-
-
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the "
Securities Act "), or the securities laws of any
state, and may not be offered or sold unless a registration
statement under the Securities Act and applicable state securities
laws shall have become effective with regard thereto, or an
exemption from registration under the Securities Act and applicable
state securities laws is available in connection with such offer or
sale."
Notwithstanding the foregoing, it is agreed that, as long as
(A) the resale or transfer (including without limitation a
pledge) of any of the Shares is registered pursuant to an effective
registration statement, (B) such Shares have been sold
pursuant to Rule 144, or (C) such Shares are eligible for
resale under Rule 144(k) or any successor provision, such Shares
shall be issued without any legend or other restrictive language
and, with respect to Shares upon which such legend is stamped, the
Company shall issue new certificates without such legend to the
holder upon request; provided that , in the case of
clause (B) and (C), such holder provides customary
documentation reasonably acceptable to the Company.
2.6
Reliance on Exemptions . Such Investor understands
that the Shares are being offered and sold to it in reliance upon
specific exemptions from the registration requirements of U.S.
federal and state securities laws and that the Company is relying
upon the truth and accuracy of the representations and warranties
of such Investor set forth in this Section 2 in order
to determine the availability of such exemptions and the
eligibility of such Investor to acquire the Shares.
2.7
Non-Affiliate Status; Common Stock Ownership .
Investor is not an Affiliate of the Company or of any other
Investor and is not acting in association or concert with any other
Person in regard to its purchase of the Shares or otherwise in
respect of the Company. Investor’s investment in the
Shares is not for the purpose of acquiring, directly or indirectly,
control of, and it has no intent to acquire or exercise control of,
the Company or to influence the decisions or policies of the Board
of Directors.
2.8
Fees . Such Investor is not obligated to pay any
compensation or other fee, cost or related expenditure to any
underwriter, broker, agent or other representative in connection
with the transactions contemplated hereby.
2.9
No Conflicts . The execution and performance of this
Agreement and the other Transaction Documents to which it is a
party do not conflict in any material respect with any agreement to
which such Investor is a party or is bound thereby, any court order
or judgment applicable to such Investor, or the constituent
documents of such Investor.
2.10 No
Governmental Review . Such Investor understands that no
U.S. federal or state agency or any other Governmental Authority
has passed on or made any recommendation or endorsement of the
Shares or the fairness or suitability of the investment in the
Shares nor have such authorities passed upon or endorsed the merits
of the offering of the Shares.
2.11 No
General Solicitation . Investor is not purchasing the
Shares as a result of any advertisement, article, notice or other
communication published in a newspaper or magazine or similar media
or broadcast over television or radio, whether closed circuit, or
generally available, or any seminar, meeting or other conference
whose attendees were invited by any general solicitation or general
advertising.
6
2.12 Short
Sales . From the time Investor first learned of the
offering until the public announcement of the offering, (i)
Investor has not and will not, directly or indirectly, offer, sell,
pledge, transfer or otherwise dispose of (or solicit any offers to
buy, purchase or otherwise acquire or take a pledge of) any of the
Shares, and (ii) neither the Investor nor its Affiliates has
engaged or will engage in any short sales of Shares or other
securities of the Company (including all securities over which the
Investor and its Affiliates exercise investment or voting
control).
2.13 Reliance
on Information . Investor has, in connection with
Investor’s decision to purchase Shares, not relied upon any
representations or other information (whether oral or written)
other than as set forth in the representations and warranties of
the Company contained herein and the SEC Documents, and Investor
has, with respect to all matters relating to this Agreement and the
offer and sale of Shares, relied solely upon the advice of such
Investor’s own counsel and has not relied upon or consulted
counsel of the Company.
2.14
Acknowledgment Regarding Placement Agent . Investor
acknowledges that Oppenheimer & Co. Inc. (" Placement
Agent ") is acting as the exclusive placement agent on a
"best efforts" basis for the Shares being offered hereby and will
be compensated by the Company for acting in such capacity in the
form of a cash fee equal to 7% of the gross proceeds of the sale of
the Shares and warrants to purchase shares of the Company’s
Common Stock equal to 4% of the number of Shares sold.
Investor represents that (i) Investor was contacted regarding
the sale of the Shares by the Placement Agent (or an authorized
representative thereof) and (ii) no Shares were offered or
sold by it by means of any form of general solicitation or general
advertising.
3.1
Organization, Good Standing and Qualification . The
Company is duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all requisite power
and authority to carry on its business as now conducted. The
Company is duly qualified to transact business and is in good
standing in each jurisdiction in which it conducts business except
where the failure so to qualify has not had or would not reasonably
be expected to have a Material Adverse Effect. The Company
does not have any operating Subsidiaries.
3.2
Authorization; Consents . The Company has the
requisite corporate power and authority to enter into and perform
its obligations under the Transaction Documents, to issue and sell
the Shares to the Investors in accordance with the terms hereof and
thereof. No further consent or authorization of the Company,
its Board of Directors, any Governmental Authority or organization,
or any other Person is required (other than such approval as may be
required under the Securities Act and applicable state securities
laws in respect of the Registration Rights Agreement) except for
such consents or authorizations that have been obtained.
3.3
Enforcement . This Agreement has been and, at or prior
to the Closing, each other Transaction Document to be delivered at
the Closing will be, duly executed and delivered by the Company.
This Agreement constitutes and, upon the execution and delivery
thereof by the Company, each other Transaction Document will
constitute the valid and legally binding obligation of the Company,
enforceable against it in accordance with its terms, subject to
(i) applicable bankruptcy, insolvency, fraudulent transfer,
moratorium, reorganization or other similar laws of general
application relating to or affecting the enforcement of
creditors’ rights generally and (ii) general principles
of equity.
7
3.4
Disclosure Documents; Agreements; Financial Statements; Other
Information . The Company is subject to the reporting
requirements of the Exchange Act and has filed with the Commission
on a timely basis all reports, schedules, registration statements
and definitive proxy statements that the Company was required to
file with the Commission on or after December 31, 2005
(collectively, the " SEC Documents "). The
Company is not aware of any event occurring or expected to occur on
or prior to the Closing Date (other than the transactions effected
hereby) that would require the filing of, or with respect to which
the Company intends to file, a Form 8-K within five (5) Business
Days after the Closing. Each SEC Document, as of the date of
the filing thereof with the Commission (or if amended or superseded
by a filing prior to the Execution Date, then on the date of such
amending or superseding filing), complied in all material respects
with the requirements of the Securities Act or Exchange Act, as
applicable, and the rules and regulations promulgated thereunder
and, as of the date of such filing (or if amended or superseded by
a filing prior to the Execution Date, then on the date of such
filing), such SEC Document (including all exhibits and schedules
thereto and documents incorporated by reference therein) did not
contain an untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading. All documents required to be
filed as exhibits to the SEC Documents have been filed as
required. Except as set forth in the Disclosure Documents,
the Company has no liabilities, contingent or otherwise, other than
liabilities incurred in the ordinary course of business which,
under GAAP, are not required to be reflected in the financial
statements included in the Disclosure Documents and which,
individually or in the aggregate, are not material to the
consolidated business or financial condition of the Company taken
as a whole. As of their respective dates, the financial
statements of the Company included in the SEC Documents complied as
to form in all material respects with applicable accounting
requirements and the published rules and regulations of the
Commission with respect thereto. Such financial statements have
been prepared in accordance with GAAP consistently applied at the
times and during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes
thereto, or (ii) in the case of unaudited interim statements,
to the extent they may exclude footnotes or may be condensed or
summary statements) and fairly present in all material respects the
financial position of the Company as of the dates thereof and the
results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end
adjustments). Since the date of the latest audited financial
statements included within the SEC Documents, except as disclosed
in the SEC Documents, (i) there has been no event, occurrence or
development that, individually or in the aggregate, has had or that
would result in a Material Adverse Effect, (ii) the Company has not
altered its method of accounting, (iii) the Company has not
declared or made any dividend or distribution of cash or other
property to its stockholders, in their capacities as such, or
purchased, redeemed or made any agreements to purchase or redeem
any shares of its capital stock (except for repurchases by the
Company of shares of capital stock held by employees, officers,
directors, or consultants pursuant to an option of the Company to
repurchase such shares upon the termination of employment or
services), and (iv) the Company has not issued any equity
securities to any officer, director or Affiliate, except pursuant
to existing Company stock-based plans. The Company has not
taken any steps to seek protection pursuant to any bankruptcy law
nor does the Company have any Knowledge or reason to believe that
its creditors intend to initiate involuntary bankruptcy proceedings
or any Knowledge of any fact which would reasonably lead a creditor
to do so. The Company is not as of the date hereof, and after
giving effect to the transactions contemplated hereby to occur at
the applicable Closing, will not be Insolvent (as defined
below). For purposes of this Section 3.4, "Insolvent" means
(i) the present fair saleable value of the Company’s
assets is less than the amount required to pay the Company’s
total Indebtedness (as defined below), (ii) the Company is unable
to pay its debts and liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and
matured, or (iii) the Company intends to incur or believes that it
will incur debts that would be beyond its ability to pay as such
debts mature.
8
3.5
Capitalization . The capitalization of the Company,
including its authorized capital stock, the number of shares issued
and outstanding, the number of shares issuable and reserved for
issuance pursuant to the Company’s stock option plans and
agreements, and the number of shares issuable and reserved for
issuance pursuant to securities exercisable for, or convertible
into or exchangeable for any shares of Common Stock, is as set
forth on Schedule 3.5 and in the Disclosure Documents. The
Company has not issued any capital stock since such filing other
than pursuant to the exercise of employee stock options under the
Company’s stock option plans. All outstanding shares of
capital stock of the Company have been, or upon issuance will be,
validly issued, fully paid and non-assessable, and issued and sold
in compliance with the Securities Act and applicable state
securities laws. No shares of the capital stock of the
Company are subject to preemptive rights or any other similar
rights of the shareholders of the Company or any Liens created by
or through the Company. Except (i) as a result of the
purchase and sale of the Shares, (ii) with respect to
securities issued pursuant to employee stock option plans or
(iii) as set forth in the Disclosure Documents, there are no
outstanding options, warrants, scrip, rights to subscribe to, calls
or commitments of any character whatsoever relating to, or
securities or rights convertible into or exercisable or
exchangeable for, any shares of capital stock of the Company or any
of its Subsidiaries, or arrangements by which the Company or any of
its Subsidiaries is or may become bound to issue additional shares
of capital stock of the Company or any of its Subsidiaries (whether
pursuant to anti-dilution, "reset" or other similar
provisions). To the Knowledge of the Company, except as
disclosed in the Disclosure Documents and any schedules filed with
the SEC pursuant to Rule 13d-1 of the Exchange Act by reporting
persons, no Person or group of related Persons beneficially owns
(as determined pursuant to Rule 13d-3 under the Exchange Act), or
has the right to acquire, by agreement with or by obligation
binding upon the Company, beneficial ownership of in excess of 5%
of the Company’s outstanding Common Stock.
3.6
Due Authorization; Valid Issuance . The Shares are
duly authorized and reserved for issuance and, when issued in
accordance with the terms of this Agreement, will be duly and
validly issued, fully paid and nonassessable, free and clear of any
Liens imposed by or through the Company other than restrictions on
transfer provided for in the Transaction Documents.
3.7
No Conflict . The Company is not in violation of any
provisions of its charter or Bylaws. The Company is not in
violation of or in default (and no event has occurred which, with
notice or lapse of time or both, would constitute a default) under
any provision of any Material Contract, or in violation of any
provision of any Governmental Requirement applicable to the
Company, except for any violation or default that has not had or
would not reasonably be expected to have a Material Adverse
Effect. The (i) execution, delivery and performance of
this Agreement and the other Transaction Documents and
(ii) consummation of the transactions contemplated hereby and
thereby (including without limitation, the issuance of the Shares)
will not result in any violation of any provisions of the
Company’s charter or Bylaws or in a default under any
provision of any Material Contract, or in violation of any
provision of any Governmental Requirement applicable to the Company
(other than any provision under the rules of the Principal Market
requiring prior notice to the Principal Market of the transactions
contemplated by this Agreement and the other Transaction Documents)
or be in conflict with or constitute, with or without the passage
of time and giving of notice, either a default under any such
provision, instrument or contract or an event which results in the
creation of any Lien upon any assets of the Company or the
triggering of any preemptive or anti-dilution rights (including
without limitation pursuant to any "reset" or similar provisions)
or rights of first refusal or first offer, or any other rights that
would allow or permit the holders of the Company’s securities
to purchase shares of Common Stock or other securities of the
Company (whether pursuant to a shareholder rights plan provision or
otherwise), on the part of holders of the Company’s
securities.
9
3.8
Financial Condition; Taxes; Litigation .
3.8.1 The financial
condition of the Company and each Company Subsidiary is, in all
material respects, as described in the Disclosure Documents, except
for changes in the ordinary course of business and normal year-end
adjustments that are not, in the aggregate, materially adverse to
the consolidated business or financial condition of the Company
taken as a whole. There has been no (i) material adverse
change to the business, operations, properties, financial
condition, or results of operations of the Company and its
Subsidiaries taken as a whole since the date of the Company’s
most recent audited financial statements contained in the
Disclosure Documents or (ii) change by the Company in its
accounting principles, policies and methods except as required by
changes in GAAP.
3.8.2 The Company has
prepared in good faith and duly and timely filed all tax returns
required to be filed by it and such returns are complete and
accurate in all material respects. The Company has pa
|
