Exhibit 10.1
SHARE PURCHASE
AGREEMENT
This Share Purchase
Agreement (this “ Agreement ”) is dated as of
May [__], 2012, by and among Saratoga Resources, Inc., a Texas
corporation (the “ Company ”), and each
purchaser identified on the signature pages hereto (each, including
its successors and assigns, a “ Purchaser ” and
collectively, the “ Purchasers ”).
RECITALS
A.
The Company and each
Purchaser is executing and delivering this Agreement in reliance
upon the exemption from securities registration afforded by
Section 4(2) of the Securities Act of 1933, as amended (the
“ Securities Act ”), and Rule 506 of
Regulation D (“ Regulation D ”) as
promulgated by the United States Securities and Exchange Commission
(the “ Commission ”) under the Securities
Act.
B.
Each Purchaser,
severally and not jointly, wishes to purchase, and the Company
wishes to sell, upon the terms and conditions stated in this
Agreement, that aggregate number of shares of common stock, $0.001
par value per share (the “ Common Stock ”), of
the Company, set forth below such Purchaser’s name on the
signature page of this Agreement (which aggregate amount for all
Purchasers together shall be [_______] shares of Common Stock and
shall be collectively referred to herein as the “
Shares ”).
C.
The Company has engaged
C.K. Cooper & Company as its non-exclusive placement agent (the
“ Placement Agent ”) for the offering of the
Shares.
D.
Contemporaneously with
the execution and delivery of this Agreement, the parties hereto
are executing and delivering a Registration Rights Agreement,
substantially in the form attached hereto as Exhibit A
(the “ Registration Rights Agreement ”),
pursuant to which, among other things, the Company will agree to
provide certain registration rights with respect to the Shares
under the Securities Act and the rules and regulations promulgated
thereunder and applicable state securities laws.
E.
In connection with the
offering of shares of Common Stock of which this Agreement is a
part (the “ Offering ”), the Company has entered
into, or intends to enter into, subscription agreements, securities
purchase agreements or similar agreements (the “ Other
Agreements ”) with investors other than the Purchasers
(the “ Other Investors ”) relating to purchases
of Common Stock at a price per share not less than the Purchase
Price.
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 the
Purchasers hereby 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 shall have the meanings indicated in this
Section 1.1:
“ Action
” means any Proceeding, inquiry, notice of violation, pending
or, to the Company’s Knowledge, threatened in writing against
the Company, any Subsidiary or any of their respective properties
or any officer, director or employee of the Company or any
Subsidiary acting in his or her capacity as an officer, director or
employee before or by any federal, state, county, local or foreign
court, arbitrator, governmental or administrative agency,
regulatory authority, stock market, stock exchange or trading
facility.
“ Affiliate
” means, with respect to any Person, any other Person that,
directly or indirectly through one or more intermediaries,
Controls, is controlled by or is under common control with such
Person, as such terms are used in and construed under Rule 405
under the Securities Act.
“ Agreement
” has the meaning ascribed to such term in the
Preamble.
“ Business
Day ” means a day, other than a Saturday or Sunday, on
which banks in New York City are open for the general transaction
of business.
“ Buy-In
” has the meaning set forth in
Section 4.1(e).
“ Buy-In
Price ” has the meaning set forth in
Section 4.1(e).
“ Closing
” means the closing of the purchase and sale of the Shares
pursuant to this Agreement.
“Closing Bid
Price” means, for any security as of any
date, the last closing price for such security on the Principal
Trading Market, as reported by Bloomberg, or, if the Principal
Trading Market begins to operate on an extended hours basis and
does not designate the closing bid price then the last bid price of
such security prior to 4:00:00 p.m., New York City Time, as
reported by Bloomberg, or, if the Principal Trading Market is not
the principal securities exchange or trading market for such
security, the last closing price of such security on the principal
securities exchange or trading market where such security is listed
or traded as reported by Bloomberg, or if the foregoing do not
apply, the last closing price of such security in the
over-the-counter market on the electronic bulletin board for such
security as reported by Bloomberg, or, if no closing bid price is
reported for such security by Bloomberg, the average of the bid
prices of any market makers for such security as reported in the
“pink sheets” by OTC Markets Group Inc. If the Closing
Bid Price cannot be calculated for a security on a particular date
on any of the foregoing bases, the Closing Bid Price of such
security on such date shall be the fair market value as mutually
determined by the Company and the holder. If the Company and the
holder are unable to agree upon the fair market value of such
security, then the Company shall, within two Business Days submit
via facsimile (a) the disputed determination to an
independent, reputable investment bank selected by the Company and
approved by the holder or (b) the disputed arithmetic calculation
to the Company’s independent, outside accountant. The Company
shall cause at its expense the investment bank or the accountant,
as the case may be, to perform the determinations or calculations
and notify the Company and the holder of the results no later than
ten Business Days from the time it receives the disputed
determinations or calculations. Such investment bank’s or
accountant’s determination or calculation, as the case may
be, shall be binding upon all parties absent demonstrable error.
All such determinations shall be appropriately adjusted for any
stock dividend, stock split, stock combination or other similar
transaction during the applicable calculation period.
“ Closing
Date ” means the Trading Day when all of the Transaction
Documents have been executed and delivered by the applicable
parties thereto, and all of the conditions set forth in Sections
2.1, 2.2, 5.1 and 5.2 hereof are satisfied or waived, as the case
may be, or such other date as the parties may agree.
“
Commission ” has the meaning set forth in the
Recitals.
“ Common
Stock ” has the meaning set forth in the Recitals, and
also includes any securities into which the Common Stock may
hereafter be reclassified or changed.
“ Company
Counsel ” means Michael W. Sanders, Attorney at
Law.
“ Company
Deliverables ” has the meaning set forth in
Section 2.2(a).
“
Company’s Knowledge ” means with respect to any
statement made to the knowledge of the Company, that the statement
is based upon the actual knowledge of the executive officers of the
Company having responsibility for the matter or matters that are
the subject of the statement after reasonable
investigation.
“ Control
” (including the terms “controlling”,
“controlled by” or “under common control
with”) means the possession, direct or indirect, of the power
to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities, by
contract or otherwise.
“ Disclosure
Materials ” has the meaning set forth in
Section 3.1(h).
“ Effective
Date ” means the date on which the initial Registration
Statement required by Section 2(a) of the Registration Rights
Agreement is first declared effective by the Commission.
“ Environmental
Laws ” has the meaning set forth in
Section 3.1(l).
“ Exchange
Act ” means the Securities Exchange Act of 1934, as
amended, or any successor statute, and the rules and regulations
promulgated thereunder.
“ GAAP
” means U.S. generally accepted accounting principles, as
applied by the Company.
“ Indemnified
Person ” has the meaning set forth in
Section 4.8(a).
“ Intellectual
Property ” has the meaning set forth in
Section 3.1(r).
“ Lien
” means any lien, charge, claim, encumbrance, security
interest, right of first refusal, preemptive right or other
restrictions of any kind.
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“ Material
Adverse Effect ” means any of (i) a material and adverse
effect on the legality, validity or enforceability of any
Transaction Document , (ii) a material and adverse effect on the
results of operations, assets, properties, business, condition
(financial or otherwise) or prospects of the Company and the
Subsidiaries, taken as a whole, or (iii) any adverse impairment to
the Company’s ability to perform in any material respect on a
timely basis its obligations under any Transaction
Document.
“ Material
Contract ” means any contract of the Company that was, or
was required to be, filed as an exhibit to the SEC Reports pursuant
to Item 601 of Regulation S-K.
“ Material
Permits ” has the meaning set forth in
Section 3.1(p).
“ New York
Courts ” means the state and federal courts sitting in
Borough of Manhattan, the State of New York.
“ Outside
Date ” means the fifteenth (15 th ) day
following the date of this Agreement; provided that if such day is
not a Business Day, the first day following such day that is a
Business Day.
“ Person
” means an individual, corporation, partnership, limited
liability company, trust, business trust, association, joint stock
company, joint venture, sole proprietorship, unincorporated
organization, governmental authority or any other form of entity
not specifically listed herein.
“ Placement
Agent ” has the meaning set forth in the
Recitals.
“ Principal
Trading Market ” means the Trading Market on which the
Common Stock is primarily listed on and quoted for trading, which,
as of the date of this Agreement and the Closing Date, shall be the
NYSE Amex.
“
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.
“ Purchase
Price ” means $6.25 per Share.
“ Purchaser
Deliverables ” has the meaning set forth in
Section 2.2(b).
“ Registration
Rights Agreement ” has the meaning set forth in the
Recitals.
“ 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 Registrable Securities
(as defined in the Registration Rights Agreement).
“ Regulation
D ” has the meaning set forth in the Recitals.
“ Required
Approvals ” has the meaning set forth 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.
“ SEC
Report s” has the meaning set forth in
Section 3.1(h).
“
Secretary’s Certificate ” has the meaning set
forth in Section 2.2(a)(vi).
“ Securities
Act ” means the Securities Act of 1933, as amended or any
successor statute, and the rules and regulations promulgated
thereunder.
“ Shares
” has the meaning set forth in the Recitals.
“ Subscription
Amount ” means with respect to each Purchaser, the
aggregate amount to be paid for the Shares purchased hereunder as
indicated on such Purchaser’s signature page to this
Agreement next to the heading “Aggregate Purchase Price
(Subscription Amount)”.
“
Subsidiary ” means any entity in which the Company,
directly or indirectly, owns sufficient capital stock or holds a
sufficient equity or similar interest such that it is consolidated
with the Company in the financial statements of the
Company.
“ Trading
Day ” means (i) a day on which the Common Stock is
listed or quoted and traded on its Principal Trading Market (other
than the OTC Bulletin Board), or (ii) if the Common Stock is
not listed on a Trading Market (other than the OTC Bulletin Board),
a day on which the Common Stock is traded in the over-the-counter
market, as reported by the OTC Bulletin Board, or (iii) if the
Common Stock is not quoted on any Trading Market, a day on
which
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the Common Stock is
quoted in the over-the-counter market as reported in the
“pink sheets” by OTC Markets Group Inc. (or any similar
organization or agency succeeding to 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 whichever of the New York Stock Exchange,
the NYSE Amex, the NASDAQ Global Select Market, the NASDAQ Global
Market, the NASDAQ Capital Market or the OTC Bulletin Board on
which the Common Stock is listed or quoted for trading on the date
in question.
“ Transaction
Documents ” means this Agreement, the schedules and
exhibits attached hereto, the Registration Rights Agreement and any
other documents or agreements executed or delivered in connection
with the transactions contemplated hereunder.
“ Transfer
Agent ” means Securities Transfer Corporation, or any
successor transfer agent for the Company.
ARTICLE II.
PURCHASE AND SALE
2.1
Closing
.
(a)
Purchase of
Shares .
Subject to the terms and conditions set forth in this
Agreement, at the Closing the Company shall issue and sell to each
Purchaser, and each Purchaser shall, severally and not jointly,
purchase from the Company, the number of Shares set forth below
such Purchaser’s name on the signature page of this Agreement
at a per Share price equal to the Purchase Price.
(b)
Closing
. The Closing of
the purchase and sale of the Shares shall take place at the offices
of Michael W. Sanders, Attorney at Law, on the Closing Date or at
such other locations or remotely by facsimile transmission or other
electronic means as the parties may mutually agree.
(c)
Form of
Payment .
Unless otherwise agreed to by the Company and a Purchaser (as
to itself only), on the Closing Date, (1) the Company shall deliver
to each Purchaser one or more stock certificates, evidencing the
number of Shares set forth on such Purchaser’s signature page
to this Agreement and (2) upon receipt thereof, each Purchaser
shall wire its Subscription Amount, in United States dollars and in
immediately available funds, in accordance with the Company’s
written wire transfer instructions.
2.2
Closing
Deliveries .
(a)
On or prior to the
Closing, the Company shall issue, deliver or cause to be delivered
to each Purchaser the following (the “ Company
Deliverables ”):
(i)
this Agreement, duly
executed by the Company;
(ii)
one or more stock
certificates, evidencing the Shares subscribed for by Purchaser
hereunder, registered in the name of such Purchaser or as otherwise
set forth on such Purchaser’s Stock Certificate Questionnaire
included as Exhibit B-2 hereto (the “ Stock
Certificates ”);
(iii)
a legal opinion of
Company Counsel, dated as of the Closing Date and in the form
attached hereto as Exhibit C , executed by such counsel
and addressed to the Purchasers;
(iv)
the Registration Rights
Agreement, duly executed by the Company;
(v)
a certificate of the
Secretary of the Company, in the form attached hereto as
Exhibit D (the “ Secretary’s
Certificate ”), dated as of the Closing Date,
(a) certifying the resolutions adopted by the Board of
Directors of the Company or a duly authorized committee thereof
approving the transactions contemplated by this Agreement and the
other Transaction Documents and the issuance of the Shares,
(b) certifying the current versions of the articles of
incorporation, as amended, and by-laws, as amended, of the Company
and (c) certifying as to the signatures and authority of
persons signing the Transaction Documents and related documents on
behalf of the Company;
(vii)
a certificate of the
Chief Executive Officer, President or Chief Financial Officer of
the Company, in the form attached hereto as Exhibit E ,
dated as of the Closing Date, certifying as to the fulfillment of
the conditions specified in Section 5.1(a) and 5.1(b);
and
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(viii)
a Certificate of Good
Standing for the Company from the Texas Secretary of State as of a
recent date.
(b)
On or prior to the
Closing, each Purchaser shall deliver or cause to be delivered to
the Company the following (the “ Purchaser
Deliverables ”):
(i)
this Agreement, duly
executed by such Purchaser;
(ii)
its Subscription Amount,
in U.S. dollars and in immediately available funds, in the amount
indicated below such Purchaser’s name on the applicable
signature page hereto under the heading “Aggregate Purchase
Price (Subscription Amount)” by wire transfer in accordance
with the Company’s written instructions;
(iii)
the Registration Rights
Agreement, duly executed by such Purchaser; and
(iv)
a fully completed and
duly executed Accredited Investor Questionnaire and Stock
Certificate Questionnaire in the forms attached hereto as
Exhibits B-1 and B-2 , respectively.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1
Representations and
Warranties of the Company . The Company hereby represents and
warrants as of the date hereof and the Closing Date (except for the
representations and warranties that speak as of a specific date,
which shall be made as of such date), to each of the Purchasers
that:
(a)
Subsidiaries . The Company has no direct or
indirect Subsidiaries other than those listed in
Schedule 3.1(a) hereto. The Company owns, directly or
indirectly, all of the capital stock or comparable equity interests
of each Subsidiary free and clear of any and all Liens, and all the
issued and outstanding shares of capital stock or comparable equity
interest of each Subsidiary are validly issued and are fully paid,
non-assessable and free of preemptive and similar rights to
subscribe for or purchase securities.
(b)
Organization and
Qualification . The Company and each of its
Subsidiaries is an entity duly incorporated or otherwise organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization (as applicable),
with the requisite power and authority to own or lease and use its
properties and assets and to carry on its business as currently
conducted. 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. The Company and each of its 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, would not be
expected to have a Material Adverse Effect.
(c)
Authorization;
Enforcement; Validity . 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
the Other Agreements to which it is a party and otherwise to carry
out its obligations hereunder and thereunder, including, without
limitation, to issue the Shares and the shares under the Other
Agreements in accordance with the terms hereof and thereof. The
Company’s execution and delivery of each of the Transaction
Documents and the Other Agreements and the consummation by it of
the transactions contemplated hereby and thereby (including, but
not limited to, the sale and delivery of the Shares and the shares
under the Other Agreements) have been duly authorized by all
necessary corporate action on the part of the Company, and no
further corporate action is required by the Company, its Board of
Directors or its stockholders in connection therewith. Each of the
Transaction Documents and the Other Agreements has been (or upon
delivery will have been) duly executed by the Company and is, or
when delivered in accordance with the terms hereof or thereof, will
constitute the legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms,
except (i) as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally the enforcement
of, creditors’ rights and remedies or by other equitable
principles of general application, (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. There are no stockholder agreements, voting
agreements, voting trust agreements or similar arrangements with
respect to the Company’s capital stock to which the Company
is a party or, to the Company’s Knowledge, between or among
any of the Company’s stockholders.
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(d)
No
Conflicts .
The execution, delivery and performance by the Company of the
Transaction Documents and the Other Agreements and the consummation
by the Company of the transactions contemplated hereby or thereby
(including, without limitation, the issuance of the Shares and the
shares under the Other Agreements) do not and will not
(i) conflict with or violate any provisions of the
Company’s or any Subsidiary’s certificate or articles
of incorporation, bylaws or otherwise result in a violation of the
organizational documents of the Company or any Subsidiary, (ii)
conflict with, or constitute a default (or
an event that with notice or lapse of time or both would result in
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 Material Contract, or (iii) subject to receipt of 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 is subject (including federal and state securities laws and
the rules and regulations thereunder, assuming the correctness of
the representations and warranties made by the Purchasers herein,
of any self-regulatory organization to which the Company or its
securities are subject, including the Principal Trading Market), or
by which any property or asset of the Company is bound or affected,
except in the case of clauses (ii) and (iii) such as
would not have or reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect.
(e)
Filings, Consents and
Approvals .
Neither the Company nor any of its Subsidiaries is 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,
self-regulatory organization (including the Principal Trading
Market) or other Person in connection with the execution, delivery
and performance by the Company of the Transaction Documents and the
Other Agreements (including, without limitation, the issuance of
the Shares and the shares under the Other Agreements), other than
(i) the filing with the Commission of one or more Registration
Statements in accordance with the requirements of the Registration
Rights Agreement, (ii) filings required by applicable state
securities laws, (iii) the filing of a Notice of Exempt
Offering of Securities on Form D with the Commission under
Regulation D of the Securities Act, (iv) the filings
required in accordance with Section 4.6 of this Agreement and
(v) those that have been made or obtained prior to the date of
this Agreement (collectively, the “ Required Approvals
”). The Company is unaware of any facts or
circumstances relating to the Company or its Subsidiaries which
would be likely to prevent the Company from obtaining or effecting
any of the foregoing.
(f)
Issuance of the
Shares . The
issuance of the Shares and the shares under the Other Agreements
has been duly authorized and the Shares and the shares under the
Other Agreements, when issued and paid for in accordance with the
terms of the Transaction Documents and the Other Agreements, will
be duly and validly issued, fully paid and non-assessable and free
and clear of all Liens, other than restrictions on transfer imposed
by applicable securities laws, and shall not be subject to
preemptive or similar rights. Assuming the accuracy of
the representations and warranties of the Purchasers in this
Agreement, the Shares and the shares under the Other Agreements
will be issued in compliance with all applicable federal and state
securities laws.
(g)
Capitalization
. The number of shares
and type of all authorized, issued and outstanding capital stock,
options and other securities of the Company (whether or not
presently convertible into or exercisable or exchangeable for
shares of capital stock of the Company) is set forth in Schedule
3.1(g) hereto. All of the outstanding shares of capital stock of
the Company are duly authorized, validly issued, fully paid and
non-assessable, have been issued in compliance in all material
respects with all applicable 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
any capital stock of the Company. No shares of the Company’s
outstanding capital stock are subject to preemptive rights or any
other similar rights; 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 contracts, commitments,
understandings or arrangements by which the Company is or may
become bound to issue additional shares of capital stock of the
Company or 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, other
than those issued or granted pursuant to compensatory plans,
contracts or arrangements described in the SEC Reports; except as
set forth in Schedule 3.1(g), there are no material outstanding
debt securities, notes, credit agreements, credit facilities or
other agreements, documents or instruments evidencing indebtedness
of the Company or by which the Company is bound; except for the
Registration Rights Agreement and that certain Registration Rights
Agreement, dated as of July 12, 2011, there are no agreements or
arrangements under which the Company is obligated to register the
sale of any of its securities under the Securities Act; there are
no outstanding securities or instruments of the Company that
contain any
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redemption or similar
provisions, and there are no contracts, commitments, understandings
or arrangements by which the Company is or may become bound to
redeem a security of the Company or any of its Subsidiaries; the
Company does not have any stock appreciation rights or
“phantom stock” plans or agreements or any similar plan
or agreement; and neither the Company nor any of its Subsidiaries
have any liabilities or obligations required to be disclosed in the
SEC Reports but not so disclosed in the SEC Reports, which,
individually or in the aggregate, will have or would reasonably be
expected to have a Material Adverse Effect. There are no
securities or instruments issued by or to which the Company is a
party containing anti-dilution or similar provisions that will be
triggered by the issuance of the Shares.
(h)
SEC Reports;
Disclosure Materials . The Company has filed all reports,
schedules, forms, statements and other documents required to be
filed by it under the Exchange Act, including pursuant to Section
13(a) or 15(d) thereof, for the eighteen (18) months preceding the
date hereof (the foregoing materials, including the exhibits
thereto and documents incorporated by reference therein, being
collectively referred to herein as the “ SEC Reports
” and together with this Agreement and the schedules to this
Agreement, the “ Disclosure Materials ”), 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 filing 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.
(i)
Financial
Statements .
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 GAAP applied on a
consistent basis during the periods involved, 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 balance sheet of the Company and its
Subsidiaries taken as a whole 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,
year-end audit adjustments, which would not be material, either
individually or in the aggregate.
(j)
Tax
Matters . The
Company (i) has prepared and filed all foreign, federal and
state income and all other tax returns, reports and declarations
required by any jurisdiction to which it is subject, (ii) has
paid all taxes and other governmental assessments and charges that
are material in amount, shown or determined to be due on such
returns, reports and declarations, except those being contested in
good faith, with respect to which adequate reserves have been set
aside on the books of the Company and (iii) has set aside on
its books provisions reasonably adequate for the payment of all
taxes for periods subsequent to the periods to which such returns,
reports or declarations apply, except, in the case of clauses
(i) and (ii) above, where the failure to so pay or file
any such tax, assessment, charge or return would not have or
reasonably be expected to have a Material Adverse
Effect.
(k)
Material
Changes .
Since the date of the latest audited financial statements included
within the SEC Reports, except as disclosed in subsequent SEC
Reports filed prior to the date hereof, (i) there have been no
events, occurrences or developments that have had or would
reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect, (ii) the Company has not
incurred any material liabilities (contingent or otherwise) other
than (A) trade payables, accrued expenses and other
liabilities incurred in the ordinary course of business consistent
with past practice and (B) liabilities not required to be
reflected in the Company’s financial statements pursuant to
GAAP or required to be disclosed in filings made with the
Commission, (iii) the Company has not altered materially its
method of accounting or the manner in which it keeps its accounting
books and records, (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, (v) the
Company has not issued any equity securities to any officer,
director or Affiliate, except Common Stock issued pursuant to
existing Company stock option or stock purchase plans or executive
and director arrangements disclosed in the SEC Reports and
(vi) there has not been any material change or amendment to,
or any waiver of any material right by the Company under, any
Material Contract under which the Company or any of its
Subsidiaries is bound or subject. Except for the transactions
contemplated by this Agreement, no event, liability or development
has occurred or exists with respect to the Company or its
Subsidiaries or their respective business, properties, operations
or financial condition that would be req