“ Closing ” means each closing of the purchase and sale of the Units pursuant to Section 2.1.

 

“ Commission ” means the Securities and Exchange Commission.

 

“ Common Stock ” means the common stock of the Company, $0.01 par value per share, and any securities into which such common stock may hereafter be reclassified.

 

“ Company Counsel ” means Latham and Watkins LLP, counsel to the Company.

 

“ Disclosure Materials ” shall have the meaning ascribed to such term in Section 3.1(h).

 

“ Disclosure Schedules ” means the Disclosure Schedules attached hereto.

 

“ Effective Date ” means the date that the Registration Statement is first declared effective by the Commission.

 

“ Effectiveness Period ” shall have the meaning ascribed to such term in the Registration Rights Agreement.

 

“ Escrow Agent ” means the Company’s transfer agent or such other party reasonably acceptable to the Company.

 

“ Escrow Agreement ” means an escrow agreement reasonably acceptable to the Company and the Escrow Agent, in the form of Exhibit B hereto or in such other form as the Company and the Escrow Agreement may agree.

 

“ Evaluation Date ” shall have the meaning ascribed to such term in Section 3.1(u).

 

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

 

“ GAAP ” shall have the meaning ascribed to such term in Section 3.1(h).

 

“ Governmental Entity ” shall have the meaning ascribed to such term in Section 3.1(e).

 

“ Information Statement ” shall have the meaning ascribed to such term in Section 4.13.

 

“ Initial Closing ” means the closing of the purchase and sale of 8,900,000 Units pursuant to Section 2.1(a).

 

“ Initial Closing Date ” means the date of the Initial Closing.

 

“ Initial Subscription Amount ” means, as to each Purchaser, the amounts specified as the Initial Subscription Amount and set forth on Schedule A hereto, in United States dollars and in immediately available funds.

 

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“ Intellectual Property Rights ” shall have the meaning ascribed to such term in Section 3.1(p).

 

“ Law ” shall have the meaning ascribed to such term in Section 3.1(e).

 

“ Legend Removal Date ” shall have the meaning ascribed to such term in Section 4.1(c).

 

“ Liens ” shall have the meaning ascribed to such term in Section 3.1(a).

 

“ Majority Purchasers ” means (i) prior to the Initial Closing, Safeguard and Purchasers (other than Safeguard) that have subscribed for a majority of the aggregate Subscription Amount subscribed for by all Purchasers other than Safeguard or (ii) following the Initial Closing, Safeguard and Purchasers (other than Safeguard) holding a majority of the Shares purchased hereby (excluding Shares purchased by Safeguard).

 

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

 

“ Material Permits ” shall have the meaning ascribed to such term in Section 3.1(n).

 

“ Order ” shall have the meaning ascribed to such term in Section 3.1(d).

 

“ Per Unit Purchase Price ” equals $1.00, 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.

 

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

 

“ Regulation D ” shall have the meaning ascribed to such term in Section 3.1(ff).

 

“ Requisite Approval ” shall have the meaning ascribed to such term in Section 4.12.

 

“ Review Period ” shall have the meaning ascribed to such term in Section 4.13.

 

“ 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.

 

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“ Rule 4350(i) ” means Rule 4350(i) of The Nasdaq Stock Market.

 

“ Safeguard ” means Safeguard Delaware, Inc., a Delaware corporation, and all Affiliates of Safeguard Delaware, Inc.

 

“ 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.

 

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

 

“ Subsequent Closing ” means the closing of the purchase and sale of 6,100,000 Units following compliance with Rule 4350(i) pursuant to Section 2.1(b).

 

“ Subsequent Closing Date ” means the date of the Subsequent Closing.

 

“ Subsequent Subscription Amount ” means, as to each Purchaser, the amounts specified as the Subsequent Subscription Amount and set forth on Schedule A hereto, in United States dollars and in immediately available funds.

 

“ Subsidiary ” means any “significant subsidiary” as defined in Rule 1-02(w) of Regulation S-X promulgated by the Commission under the Exchange Act.

 

“ Subscription Amount ” means, as to each Purchaser, the sum of the Initial Subscription Amount and the Subsequent Subscription Amount set forth below such Purchaser’s signature block on the signature page hereto.

 

“ Trading Day ” means (i) a day on which the Common Stock is traded on a Trading Market, or (ii) if the Common Stock is not listed on a Trading Market, a day on which the Common Stock is traded on the over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock is not quoted on the OTC Bulletin Board, a day on which the Common Stock is quoted in the over-the-counter market as reported by the National Quotation Bureau Incorporated (or any similar organization or agency succeeding its functions of reporting prices); provided, that in the event that the Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business Day.

 

“ Trading Market ” means the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the American Stock Exchange, the New York Stock Exchange, the Nasdaq National Market or the Nasdaq SmallCap Market (the Nasdaq National Market and Nasdaq SmallCap Market, “ Nasdaq ”).

 

“ Transaction Documents ” means this Agreement, the Registration Rights Agreement, the Escrow Agreement, the Warrant, the Lock-Up Agreements and any other

 

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documents or agreements executed in connection with the transactions contemplated hereunder.

 

“ Warrants ” means Common Stock Purchase Warrants, in the form of Exhibit C , issuable to the Purchasers at Closing, which warrants shall be exercisable immediately and have an exercise price equal to $1.35 per share of Common Stock and a term of exercise of four (4) years.

 

“ Warrant Shares ” means the shares of Common Stock issuable upon exercise of the Warrants.

 

ARTICLE II.
PURCHASE AND SALE

 

2.1 Closing .

 

(a)  Initial Closing .  Subject to the terms and conditions set forth in this Agreement, at the Initial Closing, each Purchaser shall purchase, severally and not jointly, and the Company shall issue and sell, to each Purchaser such number of Units set forth opposite such Purchaser’s name as the Initial Subscription Amount on Schedule A hereto at the Per Unit Purchase Price.  The Initial Closing shall occur at the offices of Latham & Watkins LLP, 633 West Fifth Street, Suite 4000, Los Angeles, California, 90071 on November 9, 2005, or on such other date and at such other location as the Company and Purchasers shall mutually agree.

 

(b)  Subsequent Closing .  Subject to the terms and conditions set forth in this Agreement, at the Subsequent Closing, each Purchaser shall purchase, severally and not jointly, and the Company shall issue and sell, to each Purchaser such number of Units set forth opposite such Purchaser’s name as the Subsequent Subscription Amount on Schedule A hereto at the Per Unit Purchase Price.  As soon as practicable following satisfaction or waiver of the condition set forth in Section 6.3, and in any event within two Business Days of the satisfaction of such condition, the Subsequent Closing shall occur at the offices of Latham & Watkins LLP, 633 West Fifth Street, Suite 4000, Los Angeles, California, 90071, or on such other date and at such other location as the Company and Purchasers shall mutually agree.

 

2.2 Closing Deliveries .  (a) At the Initial Closing the Company shall deliver or cause to be delivered to each Purchaser the following:

 

(i)                                      this Agreement duly executed by the Company;

 

(ii)                                   a certificate evidencing a number of Shares equal to such Purchaser’s Initial Subscription Amount divided by the Per Unit Purchase Price, registered in the name of such Purchaser;

 

(iii)                                a Warrant, registered in the name of such Purchaser, pursuant to which such Purchaser shall have the right to acquire up to the number of shares of Common Stock equal to 15% of the number of Shares purchased at the Initial Closing and set forth opposite such Purchaser’s name on Schedule A hereto;

 

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(iv)                               the Escrow Agreement duly executed by the Company and the Escrow Agent;

 

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

 

(vi)                               the legal opinion(s) of Company Counsel, executed by such counsel and delivered to the Purchasers.

 

(b)                                  At the Subsequent Closing the Company shall deliver or cause to be delivered to each Purchaser the following:

 

(i)                                      a certificate evidencing a number of Shares equal to such Purchaser’s Subsequent Subscription Amount divided by the Per Unit Purchase Price, registered in the name of such Purchaser;

 

(ii)                                   a Warrant, registered in the name of such Purchaser, pursuant to which such Purchaser shall have the right to acquire up to the number of shares of Common Stock equal to 15% of the number of Shares purchased at the Subsequent Closing and set forth opposite such Purchaser’s name on Schedule A hereto; and

 

(iii)                                the legal opinion(s) of Company Counsel, executed by such counsel and delivered to the Purchasers.

 

(c)                                   At the Initial Closing each Purchaser shall deliver or cause to be delivered to the Company (except for the delivery pursuant to subclause (iii), which shall be delivered to the Escrow Agent) the following:

 

(i)                                      this Agreement duly executed by such Purchaser;

 

(ii)                                   such Purchaser’s Initial Subscription Amount by wire transfer to the account designated in writing by the Company;

 

(iii)                                such Purchaser’s Subsequent Subscription Amount by wire transfer to the account designated in writing by the Escrow Agent (the “ Escrowed Amount ”);

 

(iv)                               the Escrow Agreement duly executed by such Purchaser;

 

(v)                                  the Registration Rights Agreement duly executed by such Purchaser; and

 

(vi)                               completed Purchaser Instructions and Purchaser Information and all attachments, in the form attached as Exhibit D hereto, completed by such Purchaser.

 

(d)                                  At the Subsequent Closing, the Escrow Agent shall release the Escrowed Amount to the Company.

 

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ARTICLE III.
REPRESENTATIONS AND WARRANTIES

 

3.1 Representations and Warranties of the Company .  Except as set forth in the SEC Reports or under the corresponding section of the Disclosure Schedules delivered concurrently herewith, the Company hereby makes the following representations and warranties as of the date hereof and as of the Initial Closing Date to each Purchaser:

 

(a)                                   Subsidiaries .  The Company owns, directly or indirectly, all of the capital stock of each Subsidiary free and clear of any lien, charge, security interest, encumbrance, right of first refusal or other restriction (collectively, “ Liens ”), and all the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights.

 

(b)                                  Organization and Qualification .  Each of the Company and each Subsidiary is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization (as applicable), with the requisite power and authority to own and use its properties and assets and to carry on its business as described in the Disclosure Materials.  Each Subsidiary is a direct or indirect wholly owned Subsidiary of the Company.  Neither the Company nor any Subsidiary is in violation 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 or licensed to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, would not have or reasonably be expected to (i) result in a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) result in a material adverse effect on the results of operations, assets, business or financial condition of the Company and the Subsidiaries, taken as a whole, or (iii) adversely impair 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 ”).

 

(c)                                   Authorization; Enforcement .  The Company has the requisite corporate power and authority to execute and deliver each of the Transaction Documents and to enter into and to consummate the transactions contemplated by each of the Transaction Documents to which it is party and otherwise to carry out its obligations thereunder.  The execution and delivery of each of the Transaction Documents to which it is a party by the Company and the consummation by it of the transactions contemplated thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company or its stockholders in connection therewith.  Each Transaction Document including this Agreement has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific

 

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performance, injunctive relief or other equitable remedies and (iii) with respect to indemnification and contribution in Section 4.9 hereof, as limited by laws, or public policy underlying such laws.

 

(d)                                  No Conflicts .  The execution, delivery and performance of the Transaction Documents to which it is a party by the Company and the consummation by the Company of the transactions contemplated thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents; (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, 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; (iii) to the Company’s knowledge, conflict with, or result in or constitute any violation of, any award, decision, judgment, decree, injunction, writ, order, subpoena, ruling, verdict or arbitration award entered, issued, made or rendered by any federal, state, local or foreign government or any other Governmental Entity (each an “ Order ”), or any Law, applicable to the Company or any of its Subsidiaries, or to any of their respective properties or assets, or to any Securities; (iv) result in the creation or imposition of (or the obligation to create or impose) any Lien on any of the properties or assets of the Company or any of its subsidiaries, or on any of the Securities; or (v) conflict with, or result in or constitute any violation of, or result in the termination, suspension or revocation of, any Authorization applicable to the Company or any of its subsidiaries, or to any of their respective properties or assets, or to any of the Securities, or result in any other impairment of the rights of the holder of any such Authorization; except in the case of each of clauses (ii), (iii), (iv) and (v), such as would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect.

 

(e)                                   Filings, Consents and Approvals .  Assuming the accuracy of the representation of each Purchaser set forth in Section 3.2 hereof, no registration (including any registration under the Securities Act) or filing with, or any notification to, or any approval, permission, consent, ratification, waiver, authorization, order, finding of suitability, permit, license, franchise, exemption, certification or similar instrument or document (each, an “ Authorization ”) of or from, any court, arbitral tribunal, arbitrator, administrative or regulatory agency or commission or other governmental or regulatory authority, agency or governing body, domestic or foreign, including without limitation any Trading Market (each, a “ Governmental Entity ”), or any other person, or under any statute, law, ordinance, rule, regulation or agency requirement of any Governmental Entity, (each, a “ Law ”), on the part of the Company or any of its subsidiaries is required in connection with the execution or delivery by the Company of the Transaction Documents or the performance by the Company of its obligations under each of the Transaction Documents except (i) as would not have a Material Adverse Effect on the Company or its performance of its obligations under the Transaction Documents and (ii) Form D and blue sky filings and (iii) the filings contemplated by the Transaction Documents.

 

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(f)                                     Issuance of the Securities .  The Securities have been duly authorized and, when issued and paid for in accordance with the Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens, except for such restrictions on transfer or ownership imposed by applicable federal or state securities laws or set forth in this Agreement.  The Company has reserved from its duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant to this Agreement.

 

(g)                                  Capitalization .  As of the date hereof, the authorized capital stock of the Company consists of 108,000,000 shares, 100,000,000 shares of which are common stock, $0.01 par value per share and 8,000,000 shares of which are preferred stock, $0.01 par value per share.  As of the date hereof and immediately prior to the transactions contemplated hereby, there are 51,910,832 shares of Common Stock issued and outstanding and no shares of preferred stock issued and outstanding.  Other than as contemplated in this Agreement, the Company has not issued any capital stock since April 27, 2004 other than pursuant to the exercise of (i) stock options or restricted grants held by employees, officers, directors, or consultants, whether or not pursuant to the Company’s equity incentive plans or stock option plans, (ii) the issuance of shares of Common Stock to employees pursuant to the Company’s equity incentive plans, stock option plans, stock option agreements, restricted stock agreements, stock ownership plans or dividend reinvestment plans, and (iii) pursuant to the conversion or exercise of outstanding Common Stock Equivalents.  Except as set forth in the Disclosure Materials, 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 disclosed on Schedule 3.1(g)  of the Disclosure Schedules, there are no outstanding options, warrants, script rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock, or securities or rights convertible or exchangeable into shares of Common Stock.  The issue and sale of the Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the shares of Common Stock being issued to the Purchasers hereunder) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under such securities.

 

(h)                                  SEC Reports; Financial Statements .  The Company has filed all reports required to be filed by it 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 to file such material) (the foregoing materials, including the exhibits thereto (together with any materials filed by the Company under the Exchange Act, whether or not required), being collectively referred to herein as the “ SEC Reports ” and, together with the Disclosure Schedules to this Agreement, the “ Disclosure Materials ”) on a timely basis or has timely filed a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension.  The Company has informed each Purchaser prior to the date hereof of any filing by the Company of any SEC Reports within the 10 days

 

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preceding the date hereof.  As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations of the Commission promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.  The financial statements of the Company included in the SEC Reports comply 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 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.  All material agreements to which the Company and its Subsidiaries are a party or to which any of their respective property or assets are subject that are required to be filed as Exhibits to the SEC Reports under Item 601 of Regulation S-K are included as a part of, or specifically identified in, the SEC Reports.

 

(i)                                      Material Changes .  Since the date of the latest audited financial statements included within the SEC Reports, except as disclosed in the Disclosure Materials, (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 that would not be required to be reflected in the Company’s financial statements pursuant to GAAP or that would not be required to be disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company equity incentive plans, stock option plans, stock option agreements, restricted stock agreements, stock ownership plans or dividend reinvestment plans.  The Company does not have pending before the Commission any request for confidential treatment of information.

 

(j)                                      Litigation .  Except as disclosed in the Disclosure Materials, there are no actions, suits, inquiries, notices of violation, proceedings or investigations 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) would have or reasonably be expected to result in a Material Adverse Effect.  Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has

 

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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 or any Subsidiary which could reasonably be expected to result in a Material Adverse Effect.

 

(l)                                      Taxes .  Each of the Company and its Subsidiaries has filed all necessary material federal, state and foreign income and franchise tax returns and has paid or accrued all material taxes shown as due thereon, and neither the Company nor any of its Subsidiaries has knowledge of a tax deficiency which has been or might be asserted or threatened against it which could reasonably be expected to result in a Material Adverse Effect.

 

(m)                                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, could result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation 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 (whether or not such default or violation has been waived), (ii) is in violation of any order of any court, arbitrator or governmental body, or (iii) to the Company’s knowledge, is or has been in violation of any statute, rule or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, kickbacks and false claims in healthcare programs, occupational health and safety, product quality and safety and employment, labor matters, except in each case as would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect. The Company is in compliance with the applicable requirements of the Sarbanes-Oxley Act of 2002 and the rules and regulations thereunder promulgated by the Commission, except where such noncompliance would not have or reasonably be expected to result in a Material Adverse Effect.

 

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

 

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(o)                                  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 their respective businesses and good and marketable title in all personal property owned by them that is material to their respective businesses, in each case free and clear of all Liens, except for (i) Liens described on Schedule 3.1(o) of the Disclosure Schedules, (ii) Liens as do not materially affect the value of such property, do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries, (iii) Liens for taxes not yet due and payable and (iv) Liens which would not, individually or in the aggregate, reasonably be expected to have or result in a Material Adverse Effect.  To the Company’s knowledge, any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases of which the Company and the Subsidiaries are in compliance except, in each case, as would not reasonably be expected to result in a Material Adverse Effect.

 

(p)                                  Patents and Trademarks .  The Company and the Subsidiaries own (and are the record owner of) or possess adequate licenses to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, copyrights, licenses, confidential information, technology and other similar rights (and all goodwill associated therewith) that are necessary or that are used in connection with their respective businesses as described in the SEC Reports and which the failure to so own or have would, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect (collectively, the “ Intellectual Property Rights ”).  Except as set forth in the Disclosure Materials, neither the Company nor any Subsidiary has received a written notice that any of the Intellectual Property Rights violates or infringes upon or conflicts with the rights of any Person.  Except as set forth in the Disclosure Materials, or as would not reasonably be expected to result in a Material Adverse Effect, 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.

 

(q)                                  FDA Compliance .  The Company, and the manufacture, marketing and sales of its products, comply with any and all applicable requirements of the Federal Food, Drug and Cosmetic Act, 21 U.S.C. § 301, et seq., any rules and regulations of the Food and Drug Administration promulgated thereunder, and any similar laws outside of the United States to which the Company is subject, except where such noncompliance would not, individually or in the aggregate, have a Material Adverse Effect.

 

(r)                                     Insurance .  The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged.  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.

 

(s)                                   Price of Common Stock .  The Company has not taken, and will not take, directly or indirectly, any action designed to cause or result in, or which has constituted or which might reasonably be expected to constitute, the stabilization or manipulation of the price of the shares of the Common Stock to facilitate the sale or resale of the Securities.

 

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(t)                                     Transactions With Affiliates and Employees .  Except as set forth in the Disclosure Materials, none of the officers or directors of the Company and, to the knowledge of the Company, none of the employees of the Company is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors) which would be required to be disclosed by the Company pursuant to Item 402 under Regulation S-K under the Exchange Act, including any contract, agreement or other arrangement providing for the