SUBSCRIPTION AGREEMENT
Exhibit
1.2
Beacon
Power Corporation
000
Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxx,
Xxxxxxxxxxxxx 00000
Gentlemen:
The
undersigned (the “Investor”)
hereby
confirms its agreement with you as follows:
1. This
Subscription Agreement, including the Terms and Conditions for Purchase of
Units
attached hereto as Annex
I
(collectively, this “Agreement”)
is
made as of the date set forth below between Beacon Power Corporation, a Delaware
corporation (the “Company”),
and
the Investor.
2. The
Company has authorized the sale and issuance to the Investor of up to an
aggregate of 11,911,852
units (the “Units”), each consisting of (i) one share (the “Share,” collectively
the “Shares”) of its common stock, par value $0.01 per share (the “Common
Stock”), and (ii) one warrant (the “Warrant,” collectively the “Warrants”) to
purchase 0.95
of a
share of Common Stock (and the fractional amount being the “Warrant Ratio”), for
a purchase price of $2.09875 per Unit (the “Purchase Price”), reflecting a price
of $1.98
per
Share and $0.11875 per Warrant. The initial exercise price of the Warrant is
$2.97 per whole share. The shares of Common Stock issuable upon the exercise
of
the Warrants are referred to herein as the “Warrant Shares.” The Warrant Shares,
together with the Shares and the Warrants, are referred to herein as the
“Securities.”.
3. The
offering and sale of the Units (the “Offering”) are being made pursuant to (1)
an effective Registration Statement on Form S-3 (including the Prospectus
contained therein (the “Base Prospectus”), the “Registration Statement”) filed
by the Company with the Securities and Exchange Commission (the “Commission”),
(2) if applicable, certain “free writing prospectuses” (as that term is defined
in Rule 405 under the Securities Act of 1933, as amended (the “Act”)), that have
been or will be filed with the Commission and delivered to the Investor on
or
prior to the date hereof, and (3) a Prospectus Supplement (the “Prospectus
Supplement” and together with the Base Prospectus, the “Prospectus”) containing
certain supplemental information regarding the Securities and terms of the
Offering that will be filed with the Commission and delivered to the Investor
(or made available to the Investor by the filing by the Company of an electronic
version thereof with the Commission).
4. The
Company and the Investor agree that the Investor will purchase from the Company
and the Company will issue and sell to the Investor the Units set forth below
for the aggregate Purchase Price set forth below. The Units shall be purchased
pursuant to the Terms and Conditions for Purchase of Units attached hereto
as
Annex
I
and
incorporated herein by this reference as if fully set forth herein. The Investor
acknowledges that the Offering is not being underwritten by the placement agent
(the “Placement Agent”) named in the Prospectus Supplement and that there is no
minimum offering amount.
5. The
Investor represents that, except as set forth below, (a) it has had no position,
office or other material relationship within the past three years with the
Company or persons known to it to be affiliates of the Company, (b) it is not
a
NASD member or an Associated Person (as such term is defined under the NASD
Membership and Registration Rules Section 1011) as of the Closing, and (c)
neither the Investor nor any group of Investors (as identified in a public
filing made with the Commission) of which the Investor is a part in connection
with the Offering of the Units, has acquired, or has obtained the right to
acquire, 20% or more of the Common Stock (or securities convertible into or
exercisable for Common Stock) or the voting power of the Company on a
post-transaction basis. Exceptions:
________________________________________________________________________________________________
(If
no
exceptions, write “none.” If left blank, response will be deemed to be
“none.”)
6. The
Investor represents that it has received (or otherwise had made available to
it
by the filing by the Company of an electronic version thereof with the
Commission) the Base Prospectus, dated August 14, 2007, which is a part of
the
Company’s Registration Statement, and the documents incorporated by reference
therein (collectively, the “Disclosure
Package”),
prior
to or in connection with the receipt of this Agreement. The Investor
acknowledges that, prior to the delivery of this Agreement to the Company,
the
Investor will receive certain additional information regarding the Offering,
including pricing information (the “Offering
Information”).
Such
information may be provided to the Investor by any means permitted under the
Act, including the Prospectus Supplement and oral communications.
7. No
offer
by the Investor to buy Units will be accepted and no part of the Purchase Price
will be delivered to the Company until the Investor has received the Offering
Information and the Company has accepted such offer by countersigning a copy
of
this Agreement, and any such offer may be withdrawn or revoked, without
obligation or commitment of any kind, at any time prior to the Company sending
(orally, in writing or by electronic mail) notice of its acceptance of such
offer. An indication of interest will involve no obligation or commitment of
any
kind until the Investor has been delivered the Offering Information and this
Agreement is accepted and countersigned by or on behalf of the
Company.
-2-
Number
of
Units: _________
Purchase
Price Per Unit: $2.09875
Aggregate
Purchase Price: $__________
Please
confirm that the foregoing correctly sets forth the agreement between us by
signing in the space provided below for that purpose.
| Dated as of: October 25, 2007 | |||
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INVESTOR |
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Copies of notices etc. pursuant to Section 7
of the
Terms and Conditions For Purchase of
Units:
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-3-
Agreed
and Accepted
as
of
October 25, 2007:
BEACON
POWER CORPORATION
| By: | |||
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Name:
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Title:
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-4-
ANNEX
I
TERMS
AND CONDITIONS FOR PURCHASE OF UNITS
1. Authorization
and Sale of the Units.
Subject
to the terms and conditions of this Agreement, the Company has authorized the
sale of the Units, which consist of the Shares and the Warrants.
2. Agreement
to Sell and Purchase the Units; Placement Agent.
2.1 At
the
Closing (as defined in Section
3.1),
the
Company will sell to the Investor, and the Investor will purchase from the
Company, upon the terms and conditions set forth herein, the number of Units
set
forth on the last page of the Agreement to which these Terms and Conditions
for
Purchase of Units are attached as Annex
I
(the
“Signature
Page”)
for
the aggregate Purchase Price therefor set forth on the Signature
Page.
2.2 The
Company may enter into agreements similar to this Agreement with other investors
(the “Other Investors”) and expects to complete sales of the Units to them. (The
Investor and the Other Investors are hereinafter referred to as the “Investors”
and this Agreement and the agreements executed by the Other Investors are
hereinafter collectively referred to as the “Agreements”). The Company may
accept or reject any one or more Agreements in its sole discretion.
2.3 The
Company has entered into a Placement Agent Agreement, dated October
25,
2007
(the “Placement
Agreement”),
with
Xxxxxxxx Curhan & Ford Co. (the “Placement
Agent”)
that
contains certain representations, warranties, covenants and agreements of the
Company that may be relied upon by the Investor, which shall be a third party
beneficiary thereof. Investor acknowledges that the Company has agreed to pay
the Placement Agent a fee (the “Placement
Fee”)
in
respect of the sale of Units to the Investor. The Company further confirms
that
neither it nor any other Person acting on its behalf has provided the Investor
or their agents or counsel with any information that constitutes or could
reasonably be expected to constitute material, nonpublic information. The
Company understands and confirms that the Investor will rely on the foregoing
representations in effecting transactions in securities of the
Company.
2.4 The
Company covenants and agrees to use its best efforts to keep the Registration
Statement effective for as long as is needed to deliver freely tradable Warrant
Shares.
3. Closings
and Delivery of the Units and Funds.
3.1 Closing.
The
completion of the purchase and sale of the Units (the “Closing”)
shall
occur at a place and time (the “Closing
Date”)
and in
the manner specified by the Company and the Placement Agent as provided in
the
Placement Agreement, and of which the Investor will be notified in advance
by
the Placement Agent, in accordance with Rule 15c6-1 promulgated under the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”).
3.2 Conditions
to the Company’s Obligations.
The
Company’s obligation to issue and sell the Units to the Investor shall be
subject to: (i) the receipt by the Company of the Purchase Price for the Units
being purchased hereunder as set forth on the Signature Page and (ii) the
accuracy of the representations and warranties made by the Investor and the
fulfillment of those undertakings of the Investor to be fulfilled prior to
the
Closing Date.
-5-
3.3 Conditions
to the Investor’s Obligations.
The
Investor’s obligation to purchase the Units will be subject to the condition
that the Placement Agent shall not have: (a) terminated the Placement Agreement
pursuant to the terms thereof or (b) determined that the conditions to the
closing in the Placement Agreement have not been satisfied.
3.4 Delivery
of Funds and Units.
The
Investor will settle the Shares purchased by the Investor by delivery versus
payment through DTC, and no
later than one (1) business day after the execution of this Agreement by the
Investor and the Company,
the
Investor shall (1) confirm that the account or accounts at the DTC Holder to
be
credited with the Shares being purchased by the Investor have a minimum balance
equal to the aggregate purchase price for the Units being purchased by the
Investor, and (2) notify the DTC Holder of the account or accounts to be
credited with the Units being purchased by the Investor. On the Closing Date,
(i) the Company shall deliver the Shares to the Investor through DTC directly
to
the account(s) at the DTC Holder identified by Investor and simultaneously
therewith payment shall be made by the DTC Holder by wire transfer to the
Company and (ii) Xxxxxx Xxxxxx Xxxxxx & Dodge LLP, counsel to the Company,
shall deliver a legal opinion to the Investor in the form attached as Exhibit
B
hereto.
4. Representations,
Warranties and Covenants of the Investor.
The
Investor acknowledges, represents and warrants to, and agrees with, the Company
and the Placement Agent that:
4.1 The
Investor (a) is knowledgeable, sophisticated and experienced in making, and
is
qualified to make decisions with respect to, investments in Units presenting
an
investment decision like that involved in the purchase of the Units, including
investments in securities issued by the Company and investments in comparable
companies, (b) has answered all questions on the Signature Page and the Investor
Questionnaire and the answers thereto are true and correct as of the date hereof
and will be true and correct as of the Closing Date and (c) in connection with
its decision to purchase the number of Units set forth on the Signature Page,
has received and is relying only upon the Disclosure Package and the documents
incorporated by reference therein. Other than the issuance of the Units as
described in Section 1 of this Agreement, the Investor acknowledges that it
has
not received from the Company any information that the Company has advised
the
Investor that it deems to be material or non-public concerning the
Company.
4.2 (a)
No
action has been or will be taken in any jurisdiction outside the United States
by the Company or the Placement Agent that would permit an offering of the
Securities, or possession or distribution of offering materials in connection
with the issue of the Securities in any jurisdiction outside the United States
where action for that purpose is required, (b) if the Investor is outside the
United States, it will comply with all applicable laws and regulations in each
foreign jurisdiction in which it purchases, offers, sells or delivers Securities
or has in its possession or distributes any offering material, in all cases
at
its own expense and (c) the Placement Agent is not authorized to make and has
not made any representation, disclosure or use of any information in connection
with the issue, placement, purchase and sale of the Units, except as set forth
or incorporated by reference in the Base Prospectus or the Prospectus
Supplement.
4.3
(a)
The
Investor has full right, power, authority and capacity to enter into this
Agreement and to consummate the transactions contemplated hereby and has taken
all necessary action to authorize the execution, delivery and performance of
this Agreement, and (b) this Agreement constitutes a valid and binding
obligation of the Investor enforceable against the Investor in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’ and
contracting parties’ rights generally and except as enforceability may be
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and except
as
to the enforceability of any rights to indemnification or contribution that
may
be violative of the public policy underlying any law, rule or regulation
(including any federal or state securities law, rule or
regulation).
-6-
4.4 The
Investor understands that nothing in this Agreement, the Prospectus or any
other
materials presented to the Investor in connection with the purchase and sale
of
the Units constitutes legal, tax or investment advice. The Investor has
consulted such legal, tax and investment advisors as it, in its sole discretion,
has deemed necessary or appropriate in connection with its purchase of
Units.
4.5 Since
the
date on which the Placement Agent first contacted the Investor about the
Offering, the Investor has kept the Offering confidential and has not engaged
in
any purchases
or sales of
the
securities of the Company (including, without limitation, any Short Sales
involving the Company’s securities). The Investor covenants that it will keep
the Offering confidential and not engage in any purchases
or sales of
the
securities of the Company (including Short Sales) prior to the time that the
transactions contemplated by this Agreement are publicly disclosed. The Investor
is aware of, and will adhere to, the position of the Commission set forth in
Item A.65 of the Commission's Telephone Interpretations Manual. For purposes
hereof, “Short Sales” include, without limitation, all “short sales” as defined
in Rule 200 promulgated under Regulation SHO under the Exchange Act, whether
or
not against the box, and all types of direct and indirect stock pledges, forward
sales contracts, options, puts, calls, short sales, swaps, “put equivalent
positions” (as defined in Rule 16a-1(h) under the Exchange Act) and similar
arrangements (including on a total return basis), and sales and other
transactions through non-US broker dealers or foreign regulated
brokers.
5. Covenants.
5.1 Certain
Definitions.
For
purposes of this Section 5, the following terms shall have the respective
meanings set forth below:
“Approved
Stock Plan”
means
any employee benefit plan that has been approved by the Board of Directors
of
the Company, including, without limitation, the Company’s deferred compensation
arrangements, pursuant to which the Company's securities, including, without
limitation, restricted stock or restricted stock units, may be issued to any
employee, officer or director for services provided to the Company.
“Common
Stock Equivalents”
means,
collectively, Options and Convertible Securities.
“Convertible
Securities”
means
any stock or securities (other than Options) convertible into or exercisable
or
exchangeable for shares of Common Stock.
“Excluded
Securities”
means
Common Stock issued or issuable: (i) in connection with any Approved Stock
Plan,
(ii) upon exercise of the Warrants, (iii) upon conversion of any Options or
Convertible Securities that are outstanding on the day immediately preceding
the
Closing Date, provided
that the
terms of such Options or Convertible Securities are not amended, modified or
changed on or after the date hereof, (iv) a transaction whose primary purpose
is
not to raise equity capital for the Company's general operations, such as in
connection with any acquisition or merger by the Company of any business, assets
or technologies, or with a strategic transaction by the Company which involves
Company warrants or shares as part of a broader transaction or set of
transactions, or with efforts to finance a particular project, or with loans
from the state which may be supported by Company warrants; (v) upon exercise
of
an option issued to a consultant by the Company to purchase 50,000 shares of
the
Company's Common Stock and (vi) pursuant to a bona fide firm commitment
underwritten public offering with a nationally recognized underwriter that
generates gross proceeds to the Company in excess of $25,000,000 (other than
an
"at-the-market offering" as defined in Rule 415(a)(4) under the Act and "equity
lines").
-7-
“Options”
means
any rights, warrants or options to subscribe for or purchase Common Stock or
Convertible Securities.
5.2 Company
Lock-up.
Until
the two month anniversary of the Closing Date, the Company will not, without
the
consent of the Investors, (1) directly or indirectly, offer, sell, grant any
option to purchase, or otherwise dispose of (or announce any offer, sale, grant
or any option to purchase or other disposition of) any of its or its
subsidiaries' equity or equity equivalent securities, including without
limitation any debt, preferred stock or other instrument or security that is,
at
any time during its life and under any circumstances, convertible into or
exchangeable or exercisable for shares of Common Stock or Common Stock
Equivalents (any such offer, sale, grant, disposition or announcement being
referred to as a “Subsequent
Placement”);
provided
that the
foregoing shall not apply to any Subsequent Placement that does not have the
right to have any of its securities registered for resale prior to the one
year
anniversary of the Closing Date; or (2) amend, modify or change the terms of
any
warrants to acquire Common Stock outstanding on the date hereof.
6. Survival
of Representations, Warranties and Agreements; Third Party Beneficiary.
Notwithstanding
any investigation made by any party to this Agreement or by the Placement Agent,
all covenants, agreements, representations and warranties made by the Company
and the Investor herein will survive the execution of this Agreement, the
delivery to the Investor of the Units being purchased and the payment therefor.
The Placement Agent shall be third party beneficiaries with respect to the
representations, warranties and agreements of the Investor in Section 4
hereof.
7. Notices.
All
notices, requests, consents and other communications hereunder will be in
writing, will be mailed (a) if within the domestic United States by first-class
registered or certified airmail, or nationally recognized overnight express
courier, postage prepaid, or by facsimile or (b) if delivered from outside
the
United States, by International Federal Express or facsimile, and will be deemed
given (i) if delivered by first-class registered or certified mail domestic,
three business days after so mailed, (ii) if delivered by nationally recognized
overnight carrier, one business day after so mailed, (iii) if delivered by
International Federal Express, two business days after so mailed and (iv) if
delivered by facsimile, upon electronic confirmation of receipt and will be
delivered and addressed as follows:
if
to
the Company, to:
Beacon
Power Corporation
000
Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxx,
Xxxxxxxxxxxxx, 00000
Attention:
Xxxxx Xxxxxxx
Facsimile:
(000) 000-0000
-8-
with
copies (for information purposes only) to:
Xxxxxxx
Xxxxxx Xxxxxx & Dodge LLP
000
Xxxxxxxxxx Xxxxxx
Xxxxxx,
Xxxxxxxxxxxxx 00000
Attention:
Xxxxxx Xxxxx,
Esq.
Facsimile:
617.517.5576
If
to
the Investor:
At
its
address on the Signature Page hereto, or at such other address or addresses
as
may have been furnished to the Company in writing, with copies (for
informational purposes only) to the person(s) identified on the Signature Page
hereto.
8. Changes.
This
Agreement may not be modified or amended except pursuant to an instrument in
writing signed by the Company and the Investor.
9. Headings.
The
headings of the various sections of this Agreement have been inserted for
convenience of reference only and will not be deemed to be part of this
Agreement.
10. Severability.
In case
any provision contained in this Agreement should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of
the
remaining provisions contained herein will not in any way be affected or
impaired thereby.
11. Governing
Law.
This
Agreement will be governed by, and construed in accordance with, the internal
laws of the State of New York, without giving effect to the principles of
conflicts of law that would require the application of the laws of any other
jurisdiction.
12. Counterparts.
This
Agreement may be executed in two or more counterparts, each of which will
constitute an original, but all of which, when taken together, will constitute
but one instrument, and will become effective when one or more counterparts
have
been signed by each party hereto and delivered to the other parties. The Company
and the Investor acknowledge and agree that the Company shall deliver its
counterpart to the Investor along with the Prospectus Supplement (or the filing
by the Company of an electronic version thereof with the Commission).
13. Confirmation
of Sale.
The
Investor acknowledges and agrees that the Investor’s receipt of the Company’s
counterpart to this Agreement, together with the Prospectus Supplement (or
the
filing by the Company of an electronic version thereof with the Commission),
shall constitute written confirmation of the Company’s sale of Units to the
Investor.
14. Press
Release.
The
Company and the Investor agree that the Company shall issue a press release
announcing the material
terms of the Offering
prior to the opening of the financial markets in New York City on the business
day immediately after the date hereof. From and after the issuance of the press
release referred to above, the Investor shall not be in possession of any
material, nonpublic information received from the Company, its Subsidiary or
any
of their respective officers, directors, employees or agents, that is not
disclosed in the press release. The Company shall not, and shall cause its
Subsidiary and each of their respective officers, directors, employees and
agents, not to, provide the Investor with any material, non public information
regarding the Company or its Subsidiary from and after the issuance of the
press
release without the express written consent of the Investor.
-9-
15. Termination.
In the
event that the Placement Agreement is terminated by the Placement Agent pursuant
to the terms thereof, this Agreement shall terminate without any further action
on the part of the parties hereto.
-10-
EXHIBIT
A
BEACON
POWER CORPORATION
INVESTOR
QUESTIONNAIRE
Pursuant
to Section
3
of
Annex
I
to the
Agreement, please provide us with the following information:
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1. The
exact name that your Shares and Warrants are to be registered in.
You may
use a nominee name if appropriate:
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___________________
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2. The
relationship between the Investor and the registered holder listed
in
response to item 1 above:
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___________________
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3. The
mailing address of the registered holder listed in response to item
1
above:
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___________________
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4. The
Social Security Number or Tax Identification Number of the registered
holder listed in the response to item 1 above:
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___________________
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5. Name
of DTC Participant (broker-dealer at which the account or accounts
to be
credited with the Shares are maintained):
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___________________
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6. DTC
Participant Number:
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___________________
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7. Name
of Account at DTC Participant being credited with the
Shares:
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___________________
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8. Account
Number at DTC Participant being credited with the Shares:
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___________________
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EXHIBIT
B
MATTERS
TO BE COVERED IN THE XXXXXXX XXXXXX XXXXXX & DODGE LLP LEGAL
OPINION
1. The
Company has been duly incorporated, and is validly existing as a corporation
in
good standing under the laws of the State of Delaware. The Company’s sole
Subsidiary of which we have notice has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the Commonwealth
of
Massachusetts.
2. Each
of
the Company and its Subsidiary is in good standing as a foreign corporation
and
is duly qualified to transaction business in every jurisdiction in which
the
Company or Subsidiary, as applicable, owns or leases properties or conducts
business for which the failure to be so qualified would have a material adverse
effect on the Company and Subsidiary, taken as a whole.
3. The
Company has the corporate power and authority to enter into and perform its
obligations under the Transaction Documents.
4. Each
of
the Offered Shares and the Offered Warrants have been duly authorized and,
when
issued and delivered by the Company pursuant to the Placement Agency Agreement
against due payment of applicable consideration, will be validly issued, fully
paid and nonassessable. The Warrant Shares have been duly authorized and
reserved for issuance pursuant to the terms of the Offered Warrants and the
Warrant Shares, when issued and delivered upon valid exercise of the Offered
Warrants and payment of the exercise price, will be validly issued, fully paid
and nonassessable.
5. The
issuance of the Offered Securities is not subject to any statutory preemptive
right of any securityholder of the Company
or other
right known
to
such counsel to
subscribe for or otherwise acquire the
Offered Securities.
6. Except
as
set forth in or otherwise contemplated by the Registration Statement or the
Prospectus, to the knowledge of such counsel, no person has the right to require
the Company or its Subsidiary to register any securities for sale under the
Securities Act of 1933, as amended (the “Act”), by reason of the filing of the
Registration Statement with the Commission or by reason of the issuance and
sale
of the Offered Securities, except for rights which have been waived or
satisfied.
7. The
statements in the Prospectus under the captions “Description of Capital Stock”
and “Description of Warrants,” insofar as they purport to constitute summaries
of the terms of the Company’s charter or by-laws or Delaware statutes, rules and
regulations thereunder, constitute accurate summaries of the terms of such
documents, statutes, rules and regulations in all material
respects.
8. The
execution, delivery and performance of the Transaction Documents do not, and
will not, result in any violation of the provisions of the charter or by-laws
of
the Company in effect on the date hereof. The Transaction Documents have been
duly authorized, executed and delivered by the Company and each constitutes
a
valid and binding agreement of the Company, and is enforceable against the
Company in accordance with the terms thereof .
9. To
the
knowledge of such counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued under the Act and no proceedings for
that
purpose have been instituted, are pending or are threatened by the
Commission.
10. The
Registration Statement and Prospectus, and each amendment or supplement to
the
Registration Statement and Prospectus, as the case may be, as of their
respective effective or issue dates, or as of the dates they were filed with
the
Commission, or for any as have been amended then as of the dates of such
amendments, as the case may be (other than the financial statements,
other
financial information
and
supporting schedules included therein or omitted therefrom, as to which we
express no opinion), complied as to form in all material respects with the
applicable requirements of the Act and the rules and regulations of the
Commission promulgated thereunder (the “Rules and Regulations”) and the
applicable requirements of the Securities Exchange Act of 1934, as amended
(the
“Exchange Act”).
11. To
our
knowledge, there is not pending or threatened in writing any action, suit or
proceeding, inquiry or investigation to which the Company or its Subsidiary
is a
party, or to which the property of the Company or its Subsidiary is subject,
before or brought by any court or governmental agency or body that is of a
character required to be disclosed in the Registration Statement which is not
adequately disclosed in the Prospectus.
12. To
the
knowledge of such counsel, there are no franchises, contracts indentures,
mortgages, loan agreements, notes, leases or other instruments known to such
counsel of a character required to be described in the Registration Statement
or
the Prospectus, or to be filed as exhibits thereto, which are not described
or
filed as required.
13. No
filing
with, or authorization, approval, consent, license, order, registration or
qualification of any domestic court or governmental agency or body of the State
of New York, the Commonwealth of Massachusetts, the DGCL, or the federal
government (other than under the Act and the Rules and Regulations, which have
been obtained, or as may be required under the securities or blue sky laws
of
any jurisdiction in connection with the distribution of the Offered Securities
by the Placement Agent or the purchase of the Offered Securities by the
Investors in the manner contemplated in the Placement Agency Agreement and
in
the Prospectus or the by-laws and rules of the NASD,
as
to
which we express no opinion) is required in connection with the due
authorization, execution and delivery of the Transaction Documents or for the
offering, issuance, sale or delivery of the Offered Securities.
14. The
execution, delivery and performance of the Transaction Documents and the
consummation of the transactions contemplated therein and in the Registration
Statement and the Prospectus (including the issuance and sale of the Offered
Securities to the Investors), compliance by the Company with its obligations
under the Placement Agency Agreement and in connection with the offering, and
issuance and sale of the Offered Securities to the Investors do not and will
not
conflict with, result
in
a breach or violation of or imposition of any lien, charge or encumbrance upon
any property or assets of the Company pursuant to, (i) the charter or by-laws
of
the Company or (ii) any statute, law, rule, regulation or any judgment, order
or
decree applicable to the Company of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having jurisdiction
over the Company or any of its properties, which violation or default would,
in
the case of clause (ii) above, either individually or in the aggregate with
all
other violations and defaults referred to in this paragraph (14) (if any),
have
a material adverse effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its Subsidiary, taken as
a
whole, whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus.
15. The
Company is not, nor will be after giving effect to the offering and sale of
the
Offered Securities and the application of the proceeds thereof as described
in
the Prospectus, an “investment company” as such terms are defined in the
Investment Company Act of 1940, as amended.
While
we
are not passing upon and do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus, or any supplements or amendments thereto, no facts
have come to our attention which have caused us to believe that: (i) the
Registration Statement or any amendments thereto, at the time the Registration
Statement or any such amendments became effective or as of the Closing Date,
contained or contains any untrue statement of a material fact or omitted or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; (ii) the Prospectus as of the
Applicable Time, contained any untrue statement of a material fact or omitted
to
state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading; or (iii)
the Prospectus, as of its date or as of the date hereof, contained or contains
any untrue statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading (it being understood
that in each case that we are not expressing a belief as to the financial
statements, including the notes and schedules thereto, or any other financial
or
accounting information, or the information regarding the Placement Agent or
the
method of distribution of the Offered Securities included in the Registration
Statement or the Prospectus or any such amendments or supplements
thereto).
