RD: I went back to look at the terms of their purchase agreement, which follows. I think this means they would need to provide plenty of advance notice via SEC filings before selling the stock. That is unlikely without strong favorable news driving the stock's fundamentals. Don't you agree or am I misreading the agreement?
Following extracted from Kimberlin "Unit Purchase Agreement" as filed with the SEC 5-98.
3.5 Restricted Securities. Investor understands that
the Securities are characterized as "restricted securities" under
the federal securities laws inasmuch as they are being acquired
from the Company in a transaction not involving a public offering
and that under such laws and applicable regulations such
securities may be resold without registration under the
Securities Act only in reliance on an exemption therefrom. In
this connection Investor represents that it is familiar with SEC
Rule 144, as presently in effect ("Rule 144"), and understands
the resale limitations imposed thereby and by the Securities Act.
3.6 Further Limitations on Disposition. Without in
any way limiting the representations set forth above, Investor
further agrees not to make any disposition of all or any portion
of the Securities unless and until:
(a) One (1) year from the date hereof has elapsed; and
(b) The entire principal balance of the promissory
note attached hereto as Exhibit B, together with all accrued and
unpaid interest, fees and late charges thereon, has been paid in
full by Investor to the Company; and
(c) There is then in effect a Registration Statement
under the Securities Act covering such proposed disposition and
such disposition is made in accordance with such Registration
Statement; or
(d) (i) Such Investor shall have notified the Company
of the proposed disposition and shall have furnished the Company
with a reasonably detailed statement of the circumstances sur-
rounding the proposed disposition, and (ii) if reasonably
requested by the Company, such Investor shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to
the Company, that such disposition will not require registration
of such shares under the Securities Act. It is agreed that the
Company will not require opinions of counsel for transactions
made pursuant to Rule 144, as currently in existence, except in
unusual circumstances. |
