SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT, dated as of the date of
acceptance set forth below, is entered into by and between ALL AMERICAN FOOD
GROUP, INC., a New Jersey corporation, with headquarters located at ▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ("Company"), and the undersigned (the
"Buyer").
W I T N E S S E T H:
WHEREAS, the Company and the Buyer are executing and
delivering this Agreement in accordance with and in reliance upon the exemption
from securities registration afforded, inter alia, by Rule 506 under Regulation
D ("Regulation D" as promulgated by the United States Securities and Exchange
Commission (the "SEC") under the Securities Act of 1933, as amended (the "1933
Act"), and/or Section 4(2) of the 1933 Act; and
WHEREAS, the Buyer wishes to purchase, upon the terms and
subject to the conditions of this Agreement, 6% Convertible Debentures (the
"Debentures"), of the Company which will be convertible into shares of Common
Stock, $.01 par value per share of the Company (the "Common Stock"), upon the
terms and subject to the conditions of such Debentures (the Common Stock and the
Debentures sometimes referred to herein as the "Securities"), and subject to
acceptance of this Agreement by the Company;
NOW THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. AGREEMENT TO PURCHASE; PURCHASE PRICE.
a. Purchase. The undersigned hereby agrees to initially
purchase from the Company, the Debentures of the Company, in the principal
amount set forth on the signature page of this Agreement, out of a total
offering of $2,600,000 in Debentures as more specifically set forth in P. 4(h),
and having the terms and conditions and being in the form attached hereto as
Annex I. The purchase price for the Debentures shall be as set forth on the
signature page hereto and shall be payable in United States Dollars.
b. Form of Payment. The Buyer shall pay the purchase price for
the Debentures by delivering immediately available good funds in United States
Dollars to the escrow agent (the "Escrow Agent") identified in the Joint Escrow
Instructions attached hereto as Annex II (the "Joint Escrow Instructions") as
set forth below. Promptly following payment by the Buyer to the Escrow Agent of
the purchase price of the Debentures, the Company shall deliver the Debentures
duly executed on behalf of the Company to the Escrow Agent. By signing this
Agreement, the Buyer and the Company, and subject to acceptance by the Escrow
Agent, each
agrees to all of the terms and conditions of, and becomes a party to, the Joint
Escrow Instructions, all of the provisions of which are incorporated herein by
this reference as if set forth in full.
c. Method of Payment. Payment into escrow of the purchase
price for the Debentures shall be made by wire transfer of funds to:
Bank of New York
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
ABA# ▇▇▇▇▇▇▇▇▇
For credit to the account of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Esqs.
Account No.: 637-▇▇▇▇▇▇▇
Not later than 1:00 p.m., New York time, on the date which is two (2) New York
Stock Exchange trading days after the Company shall have accepted this Agreement
and returned a signed counterpart of this Agreement to the Escrow Agent by
facsimile, the Buyer shall deposit with the Escrow Agent the aggregate purchase
price for the Debentures, in currently available funds. Time is of the essence
with respect to such payment, and failure by the Buyer to make such payment,
shall allow the Company to cancel this Agreement.
2. BUYER REPRESENTATIONS, WARRANTIES, ETC.; ACCESS TO
INFORMATION; INDEPENDENT INVESTIGATION.
The Buyer represents and warrants to, and covenants and agrees
with, the Company as follows:
a. Without limiting Buyer's right to sell the Common Stock
pursuant to the Registration Statement, the Buyer is purchasing the Debentures
and will be acquiring the shares of Common Stock issuable upon conversion of the
Debenture for its own account for investment only and not with a view towards
the public sale or distribution thereof and not with a view to or for sale in
connection with any distribution thereof;
b. The Buyer is (i) an "accredited investor" as that term is
defined in Rule 501 of the General Rules and Regulations under the 1933 Act by
reason of Rule 501(a)(3), and (ii) experienced in making investments of the kind
described in this Agreement and the related documents, (iii) able, by reason of
the business and financial experience of its officers (if an entity) and
professional advisors (who are not affiliated with or compensated in any way by
the Company or any of its affiliates or selling agents), to protect its own
interests in connection with the transactions described in this Agreement, and
the related documents, and (iv) able to afford the entire loss of its investment
in the Securities;
c. All subsequent offers and sales of the Debentures and the
shares of Common
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Stock issuable upon conversion of, or issued as dividends on, the Debentures
(the "Shares" or "Common Stock") by the Buyer shall be made pursuant to
registration of the Shares under the 1933 Act or pursuant to an exemption from
registration;
d. The Buyer understands that the Debentures are being offered
and sold, and the Shares are being offered, to it in reliance on specific
exemptions from the registration requirements of United States federal and state
securities laws and that the Company is relying upon the truth and accuracy of,
and the Buyer's compliance with, the representations, warranties, agreements,
acknowledgements and understandings of the Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of the Buyer
to acquire the Debentures and to receive an offer of the Shares;
e. The Buyer and its advisors, if any, have been furnished
with all materials relating to the business, finances and operations of the
Company and materials relating to the offer and sale of the Debenture and the
offer of the Shares which have been requested by the Buyer, including Annex V
hereto. The Buyer and its advisors, if any, have been afforded the opportunity
to ask questions of the Company and have received complete and satisfactory
answers to any such inquiries. Without limiting the generality of the foregoing,
the Buyer has also had the opportunity to obtain and to review the Company's (1)
Annual Report on Form 10-K for the fiscal year ended October 31, 1997, (2)
Quarterly Report on Form 10-Q for the fiscal quarters ended January 31, 1997,
and April 30, 1997, (3) Forms 8-K dated July 24, 1997 and August 14, 1997, and
(4) Form S-B2 dated December 12, 1996 (the "Company's SEC Documents").
f. The Buyer understands that its investment in the Securities
involves a high degree of risk;
g. The Buyer understands that no United States federal or
state agency or any other government or governmental agency has passed on or
made any recommendation or endorsement of the Securities;
h. This Agreement has been duly and validly authorized,
executed and delivered on behalf of the Buyer and is a valid and binding
agreement of the Buyer enforceable in accordance with its terms, subject as to
enforceability to general principles of equity and to bankruptcy, insolvency,
moratorium and other similar laws affecting the enforcement of creditors' rights
generally.
i. Neither the Buyer, nor any affiliate of the Buyer, has any
present intention of entering into, any put option, short position, or other
similar position with respect to the Debentures or the Shares.
j. Notwithstanding the provisions hereof or of the Debentures,
in no event (except with respect to an Event of Mandatory Conversion upon the
maturity of the Debentures) shall the holder be entitled to convert any
Debenture to the extent after such conversion, the sum
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of (1) the number of shares of Common Stock beneficially owned by the Buyer and
its affiliates (other than shares of Common Stock which may be deemed
beneficially owned through the ownership of the unconverted portion of the
Debenture), and (2) the number of shares of Common Stock issuable upon the
conversion of the Debenture with respect to which the determination of this
proviso is being made, would result in beneficial ownership by the Buyer and its
affiliates of more than 4.99% of the outstanding shares of Common Stock. For
purposes of the proviso to the immediately preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), except as otherwise provided
in clause (1) of such proviso.
3. COMPANY REPRESENTATIONS, ETC.
The Company represents and warrants to the Buyer that:
a. Concerning the Shares. There are no preemptive rights of
any stockholder of the Company, as such, to acquire the Common Stock.
b. Reporting Company Status. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New Jersey, and has the requisite corporate power to own its properties and to
carry on its business as now being conducted. The Company is duly qualified as a
foreign corporation to do business and is in good standing in each jurisdiction
where the nature of the business conducted or property owned by it makes such
qualification necessary other than those jurisdictions in which the failure to
so qualify would not have a material and adverse effect on the business,
operations, properties, prospects or condition (financial or otherwise) of the
Company. The Company has registered its Common Stock pursuant to Section 12 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
Common Stock is listed and traded on the NASDAQ/Small Cap Market. The Company
has received no notice, either oral or written, with respect to the continued
eligibility of the Common Stock for such listing, and the Company has maintained
all requirements for the continuation of such listing.
c. Authorized Shares. The Company has sufficient authorized
and unissued Shares as may be reasonably necessary to effect the conversion of
the Debenture. The Shares have been duly authorized and, when issued upon
conversion of, or as interest on, the Debentures, will be duly and validly
issued, fully paid and non-assessable and will not subject the holder thereof to
personal liability by reason of being such holder.
d. Securities Purchase Agreement; Registration Rights
Agreement and Stock. This Agreement and the Registration Rights Agreement, the
form of which is attached hereto as Annex IV (the "Registration Rights
Agreement"), and the transactions contemplated thereby, have been duly and
validly authorized by the Company, this Agreement has been duly executed and
delivered by the Company and this Agreement is, and the Registration Rights
Agreement, when executed and delivered by the Company, will be, valid and
binding agreements
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of the Company enforceable in accordance with their respective terms, subject as
to enforceability to general principles of equity and to bankruptcy, insolvency,
moratorium, and other similar laws affecting the enforcement of creditors'
rights generally; and the Debentures will be duly and validly authorized and,
when executed and delivered on behalf of the Company in accordance with this
Agreement, will be a valid and binding obligation of the Company in accordance
with its terms, subject to general principles of equity and to bankruptcy,
insolvency, moratorium, or other similar laws affecting the enforcement of
creditors' rights generally.
e. Non-contravention. The execution and delivery of this
Agreement and the Registration Rights Agreement by the Company, the issuance of
the Securities, and the consummation by the Company of the other transactions
contemplated by this Agreement, the Registration Rights Agreement, and the
Debentures do not and will not conflict with or result in a breach by the
Company of any of the terms or provisions of, or constitute a default under (i)
the articles of incorporation or by-laws of the Company, (ii) any indenture,
mortgage, deed of trust, or other material agreement or instrument to which the
Company is a party or by which it or any of its properties or assets are bound,
including any listing agreement for the Common Stock except as herein set forth,
(iii) to its knowledge, any existing applicable law, rule, or regulation or any
applicable decree, judgment, or (iv) to its knowledge, order of any court,
United States federal or state regulatory body, administrative agency, or other
governmental body having jurisdiction over the Company or any of its properties
or assets, except such conflict, breach or default which would not have a
material adverse effect on the transactions contemplated herein.
f. Approvals. No authorization, approval or consent of any
court, governmental body, regulatory agency, self-regulatory organization, or
stock exchange or market or the Stockholders of the Company is required to be
obtained by the Company for the issuance and sale of the Securities to the Buyer
as contemplated by this Agreement, except such authorizations, approvals and
consents that have been obtained.
g. SEC Filings. None of the SEC Filings contained, at the time
they were filed, any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
made therein in light of the circumstances under which they were made, not
misleading. Except as set forth on Annex V hereto, the Company has since [13
Months] timely filed all requisite forms, reports and exhibits thereto with the
Securities and Exchange Commission.
h. Absence of Certain Changes. Since April 30, 1997, there has
been no material adverse change and no material adverse development in the
business, properties, operations, financial condition, or results of operations
of the Company, except as disclosed in Annex V or in the documents referred to
in Section 2(e) hereof.
i. Full Disclosure. There is no fact known to the Company
(other than general economic conditions known to the public generally) or as
disclosed in the documents referred to in Section 2(e), that has not been
disclosed in writing to the Buyer that (i) would
5
reasonably be expected to have a material adverse effect on the business or
financial condition of the Company or (ii) would reasonably be expected to
materially and adversely affect the ability of the Company to perform its
obligations pursuant to this Agreement.
j. Absence of Litigation. Except as set forth in Annex V
hereto, and in the documents referred to in Section 2(e), which the Buyer has
reviewed, there is no action, suit, proceeding, inquiry or investigation before
or by any court, public board or body pending or, to the knowledge of the
Company, threatened against or affecting the Company, wherein an unfavorable
decision, ruling or finding would have a material adverse effect on the business
or financial condition of the Company or the transactions contemplated by this
Agreement or any of the documents contemplated hereby or which would adversely
affect the validity or enforceability of, or the authority or ability of the
Company to perform its obligations under, this Agreement or any of such other
documents.
k. Absence of Events of Default. Except as set forth in Annex
V hereto and Section 3(e), no Event of Default, as defined in the respective
agreement to which the Company is a party, and no event which, with the giving
of notice or the passage of time or both, would become an Event of Default (as
so defined), has occurred and is continuing, which would have a material adverse
effect on the Company's financial condition or results of operations.
l. Prior Issues. Except as set forth in Annex V, during the
twelve (12) months preceding the date hereof, the Company has not issued any
convertible securities. The presently outstanding unconverted principal amount
of each such issuance as at June 30, 1997 are set forth in Annex V.
4. CERTAIN COVENANTS AND ACKNOWLEDGMENTS.
a. Transfer Restrictions. The Buyer acknowledges that (1) the
Debentures have not been and are not being registered under the provisions of
the 1933 Act and, except as provided in the Registration Rights Agreement, the
Shares have not been and are not being registered under the 1933 Act, and may
not be transferred unless (A) subsequently registered thereunder or (B) the
Buyer shall have delivered to the Company an opinion of counsel, reasonably
satisfactory in form, scope and substance to the Company, to the effect that the
Securities to be sold or transferred may be sold or transferred pursuant to an
exemption from such registration; (2) any sale of the Securities made in
reliance on Rule 144 promulgated under the 1933 Act may be made only in
accordance with the terms of said Rule and further, if said Rule is not
applicable, any resale of such Securities under circumstances in which the
seller, or the person through whom the sale is made, may be deemed to be an
underwriter, as that term is used in the 1933 Act, may require compliance with
some other exemption under the 1933 Act or the rules and regulations of the SEC
thereunder; and (3) neither the Company nor any other person is under any
obligation to register the Securities (other than pursuant to the Registration
Rights Agreement) under the 1933 Act or to comply with the terms and conditions
of any exemption thereunder.
6
b. Restrictive Legend. The Buyer acknowledges and agrees that
the Debentures, and, until such time as the Common Stock has been registered
under the 1933 Act as contemplated by the Registration Rights Agreement and sold
in accordance with an effective registration statement ("Registration
Statement"), the Shares issued to the Holder upon conversion of the Debentures
shall bear a restrictive legend in substantially the following form (and a
stop-transfer order may be placed against transfer of the Debentures and such
Shares):
THESE SECURITIES (THE "SECURITIES") HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD
OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION OF
COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE CORPORATION THAT
SUCH REGISTRATION IS NOT REQUIRED.
c. Registration Rights Agreement. The parties hereto agree to
enter into the Registration Rights Agreement, in substantially the form attached
hereto as Annex IV, on or before the Closing Date.
d. Filings. The Company undertakes and agrees to make all
necessary filings in connection with the sale of the Debentures to the Buyer
under any United States laws and regulations, or by any domestic securities
exchange or trading market, and to provide a copy thereof to the Buyer promptly
after such filing.
e. Reporting Status. So long as the Buyer beneficially owns
any of the Debentures, the Company shall file all reports required to be filed
with the SEC pursuant to Section 13 or 15(d) of the 1934 Act, and the Company
shall not terminate its status as an issuer required to file reports under the
1934 Act even if the 1934 Act or the rules and regulations thereunder would
permit such termination.
f. Use of Proceeds. The Company will use the proceeds from the
sale of the Debentures (excluding amounts paid by the Company for legal fees and
finder's fees in connection with the sale of the Debentures) for internal
working capital purposes, and shall not, directly or indirectly, use such
proceeds for any loan to or investment in any other corporation, partnership
enterprise or other person.
g. Option. At the option of the Company, the Buyer agrees to
purchase up to an additional $1,300,000 principal amount of Debentures (the
"Additional Debentures") in one tranche of $1,300,000, occurring not later than
the 30th day after the Effective Date (as defined below) and upon 15 days
written demand by the Company, upon the same terms and conditions as those
applicable to the Debentures issued pursuant to this Agreement (the "Additional
Closing
7
Date"). Buyer's obligation to purchase the Additional Debentures on the
Additional Closing Date shall be contingent upon the satisfaction of the
following conditions: On each Additional Closing Date (i) the Registration
Statement required to be filed under the Registration Rights Agreement is
effective (the "Effective Date"), (ii) the representations and warranties of the
Company contained in Section 3 are true and correct in all material respects,
and (iii) the Market Price on the Additional Closing Date (as defined in the
Debenture) exceeds $1.25 per share. Each such Debenture shall mature on the last
day of the twenty-fourth month following its issuance,
h. Available Shares. The Company shall have at all times
authorized and reserved for issuance, free from preemptive rights, shares of
Common Stock sufficient to yield the number of shares of Common Stock issuable
at conversion as may be required to satisfy the conversion rights of the Buyer
pursuant to the terms and conditions of the Debentures.
i. Warrants. The Company agrees to issue to Buyer within
thirty (30) days after the Closing Date and each Additional Closing Date,
transferable divisible warrants with cashless exercise provisions (the
"Warrants") for 50,000 shares of Common Stock for each $1,000,000 principal
amount of Debentures. Such Warrants shall bear an exercise price per share of
Common Stock equal to 150% of the Market Price, as defined in the Debentures, on
the Closing Date, and shall be immediately exercisable and for a period of five
(5) years thereafter, in the form annexed hereto as Annex VI, together with
piggy-back registration rights, and demand registration rights.
5. TRANSFER AGENT INSTRUCTIONS.
a. Promptly following the delivery by the Buyer of the
aggregate purchase price for the Debentures in accordance with Section 1(c)
hereof, the Company will irrevocably instruct its transfer agent to issue Common
Stock from time to time upon conversion of the Debentures in such amounts as
specified from time to time by the Company to the transfer agent, bearing the
restrictive legend specified in Section 4(b) of this Agreement prior to
registration of the Shares under the 1933 Act, registered in the name of the
Buyer or its nominee and in such denominations to be specified by the Buyer in
connection with each conversion of the Debentures. The Company warrants that no
instruction other than such instructions referred to in this Section 5 and stop
transfer instructions to give effect to Section 4(a) hereof prior to
registration and sale of the Shares under the 1933 Act will be given by the
Company to the transfer agent and that the Shares shall otherwise be freely
transferable on the books and records of the Company as and to the extent
provided in this Agreement, the Registration Rights Agreement, and applicable
law. Nothing in this Section shall affect in any way the Buyer's obligations and
agreement to comply with all applicable securities laws upon resale of the
Securities. If the Buyer provides the Company with an opinion of counsel
reasonably satisfactory to the Company that registration of a resale by the
Buyer of any of the Securities in accordance with clause (1)(B) of Section 4(a)
of this Agreement is not required under the 1933 Act, the Company shall (except
as provided in
8
clause (2) of Section 4(a) of this Agreement) permit the transfer of the
Securities and, in the case of the Shares, promptly instruct the Company's
transfer agent to issue one or more certificates for Common Stock without legend
in such name and in such denominations as specified by the Buyer.
b. Subject to the completeness and accuracy of the Buyer's
representations and warranties herein, upon the conversion of any Debenture by a
person who is a non-U.S. Person, and following the expiration of any applicable
Restricted Period, the Company, shall, at its expense, take all necessary action
(including the issuance of an opinion of counsel) to assure that the Company's
transfer agent shall issue stock certificates without restrictive legend or stop
orders in the name of Buyer (or its nominee (being a non-U.S. Person) or such
non-U.S. Persons as may be designated by Buyer) and in such denominations to be
specified at conversion representing the number of shares of Common Stock
issuable upon such conversion, as applicable. Nothing in this Section 4,
however, shall affect in any way Buyer's or such nominee's obligations and
agreement to comply with all applicable securities laws upon resale of the
Securities.
c. The Company will permit the Buyer to exercise its right to
convert the Debentures by telecopying an executed and completed Notice of
Conversion to the Company and delivering within three business days thereafter,
the original Notice of Conversion and the Debentures representing the Shares to
the Company by express courier, with a copy to the transfer agent. Each date on
which a Notice of Conversion is telecopied to and received by the Company in
accordance with the provisions hereof shall be deemed a Conversion Date. The
Company will transmit the certificates representing the Shares issuable upon
conversion of any Debenture (together with the Debentures representing the
Shares not so converted) to the Buyer via express courier, by electronic
transfer or otherwise, within three business days after receipt by the Company
of the original Notice of Conversion and the Debenture representing the Shares
to be converted (the "Delivery Date").
d. The Company understands that a delay in the issuance of the
Shares of Common Stock beyond the Delivery Date could result in economic loss to
the Buyer. As compensation to the Buyer for such loss, the Company agrees to pay
late payments to the Buyer for late issuance of Shares upon Conversion in
accordance with the following schedule (where "No. Business Days Late" is
defined as the number of business days beyond five (5) business days from
Delivery Date:
Late Payment For Each
$10,000 of Debenture
No. Business Days Late Principal Amount Being Converted
1 $100
2 $200
3 $300
4 $400
5 $500
6 $600
9
7 $700
8 $800
9 $900
10 $1,000
[Greater than] 10 $1,000 +$200 for each Business
Day Late beyond 10 days
The Company shall pay any payments incurred under this Section in immediately
available funds upon demand. Furthermore, in addition to any other remedies
which may be available to the Buyer, in the event that the Company fails for any
reason to effect delivery of such shares of Common Stock within five business
days after the Delivery Date, the Buyer will be entitled to revoke the relevant
Notice of Conversion by delivering a notice to such effect to the Company
whereupon the Company and the Buyer shall each be restored to their respective
positions immediately prior to delivery of such Notice of Conversion.
e. Delivery of Common Stock Upon Conversion. Upon receipt of a
Notice of Conversion, the Company shall, no later than the later of the (a)
third business day following the Conversion Date, and (b) the date of such
receipt (the "Delivery Period"), issue and deliver to the Buyer (x) that number
of shares of Common Stock issuable upon conversion of that portion of Preferred
Stock being converted. In lieu of delivering physical certificates representing
the Common Stock issuable upon conversion, provided the Company's transfer agent
is participating in the Depository Trust Company ("DTC") Fast Automated
Securities Transfer program, upon request of the Buyer and its compliance with
the provisions contained in this paragraph, so long as the certificates therefor
do not bear a legend and the Buyer thereof is not obligated to return such
certificate for the placement of a legend thereon, the Company shall use its
best efforts to cause its transfer agent to electronically transmit the Common
Stock issuable upon conversion to the Buyer by crediting the account of Buyer's
Prime Broker with DTC through its Deposit Withdrawal Agent Commission system.
6. DELIVERY INSTRUCTIONS.
The Debentures shall be delivered by the Company to the Escrow
Agent pursuant to Section 1(b) hereof, or a delivery against payment basis on
the Closing Date and on each Additional Closing Date.
7. CLOSING DATE.
The date and time of the issuance and sale of the Debentures
(the "Closing Date" and "Additional Closing Date") shall occur no later than
12:00 Noon, New York time on the first NYSE trading day after the fulfillment or
waiver of all closing conditions pursuant to Sections 8 and 9, or such other
mutually agreed to time. The closing shall occur on such date at the offices of
the Escrow Agent. Notwithstanding anything to the contrary contained herein, the
Escrow Agent will be authorized to release the funds representing the Purchase
Price for the Debentures,
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and the Debentures only upon satisfaction of the conditions set forth in Section
8 hereof.
8. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The Buyer understands that the Company's obligation to sell
the Debentures on the Closing Date and Additional Closing Date to the Buyer
pursuant to this Agreement is conditioned upon:
a. The receipt and acceptance by the Company of such Agreement
as evidenced by execution of this Agreement by the Company for at least One
Million Five Hundred Thousand ($1,500,000.00) Dollars in Debentures (or such
lesser amount as the Company, in its sole discretion, shall determine);
b. Delivery by the Buyer to the Escrow Agent of good funds as
payment in full of an amount equal to the purchase price for the Debentures in
accordance with Section 1(c) hereof;
c. The accuracy on the Closing Date and Additional Closing
Date of the representations and warranties of the Buyer contained in this
Agreement as if made on the Closing Date and the performance by the Buyer on or
before the Closing Date and Additional Closing Date of all covenants and
agreements of the Buyer required to be performed on or before the Closing Date
and Additional Closing Date;
d. There shall not be in effect any law, rule or regulation
prohibiting or restricting the transactions contemplated hereby, or requiring
any consent or approval which shall not have been obtained.
9. CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.
The Company understands that the Buyer's obligation to
purchase the Debentures on the Closing Date and Additional Closing Date is
conditioned upon:
a. Acceptance by Buyer of an Agreement for the sale of
Debentures, as indicated by execution of this Agreement;
b. Delivery by the Company to the Escrow Agent of the
Debenture in accordance with this Agreement;
c. The accuracy in all material respects on the Closing Date
and Additional Closing Date of the representations and warranties of the Company
contained in this Agreement as if made on the Closing Date and Additional
Closing Date and the performance by the Company on or before the Closing Date
and Additional Closing Date of all covenants and agreements of the Company
required to be performed on or before the Closing Date and Additional Closing
Date;
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and
d. On the Closing Date and Additional Closing Date, the Buyer
having received an opinion of counsel for the Company, dated the Closing Date
and Additional Closing Date, in form, scope and substance reasonably
satisfactory to the Buyer, to the effect set forth in Annex III attached hereto,
and the Registration Rights Agreement annexed hereto as Annex IV.
10. GOVERNING LAW: MISCELLANEOUS.
This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York. Each of the parties consents
to the jurisdiction of the federal courts whose districts encompass any part of
the City of New York or the state courts of the State of New York sitting in the
City of New York in connection with any dispute arising under this Agreement and
hereby waives, to the maximum extent permitted by law, any objection, including
any objection based on forum non conveniens, to the bringing of any such
proceeding in such jurisdictions. A facsimile transmission of this signed
Agreement shall be legal and binding on all parties hereto. This Agreement may
be signed in one or more counterparts, each of which shall be deemed an
original. The headings of this Agreement are for convenience of reference and
shall not form part of, or affect the interpretation of, this Agreement. If any
provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement in any other jurisdiction. This Agreement may
be amended only by an instrument in writing signed by the party to be charged
with enforcement. This Agreement supersedes all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof.
11. NOTICES. Any notice required or permitted hereunder shall
be given in writing (unless otherwise specified herein) and shall be deemed
effectively given, (i) on the date delivered, (a) by personal delivery, or (b)
if advance copy is given by fax, (ii) seven business days after deposit in the
United States Postal Service by regular or certified mail, or (iii) three
business days mailing by international express courier, with postage and fees
prepaid, addressed to each of the other parties thereunto entitled at the
following addresses, or at such other addresses as a party may designate by ten
days advance written notice to each of the other parties hereto.
COMPANY: ALL AMERICAN FOOD GROUP, INC.
▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
ATT: Mr. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
12
with a copy to:
▇▇▇▇▇▇ & Eilen, Esqs.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇, Esq.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
PURCHASER: At the address set forth on the signature page of this
Agreement.
ESCROW AGENT: ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Esqs.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
12. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Company's
representations and warranties shall survive the execution and delivery hereof
of this Agreement and the delivery of the Debentures and the Purchase Price, and
shall inure to the benefit of their respective successors and assigns.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
13
IN WITNESS WHEREOF, this Agreement has been duly executed by
the Buyer or one of its officers thereunto duly authorized as of the date set
forth below.
AGGREGATE INITIAL PURCHASE PRICE OF SUCH DEBENTURE: $ 1,300,000
SIGNATURES FOR ENTITIES
IN WITNESS WHEREOF, the undersigned represents that the
foregoing statements are true and correct and that it has caused this Securities
Purchase Agreement to be duly executed on its behalf this 16th day of
September, 1997.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇ CORP.
------------------------------------ ------------------------------------
Address Printed Name of Subscriber
Tel Aviv, Israel
------------------------------------
By:
---------------------------------
Telecopier No. __________________ (Signature of Authorized Person)
------------------------------------
British Virgin Islands Printed Name and Title
------------------------------------
Jurisdiction of Incorporation
or Organization
This Agreement has been accepted as of the date set forth below.
ALL AMERICAN FOOD GROUP, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Title: Chairman & CEO
----------------------------------
Date: September 16, 1997
----------------------------------
14
ANNEX I FORM OF DEBENTURE
ANNEX II JOINT ESCROW INSTRUCTIONS
ANNEX III OPINION OF COUNSEL
ANNEX IV REGISTRATION RIGHTS AGREEMENT
ANNEX V COMPANY DISCLOSURE MATERIALS
ANNEX VI FORM OF WARRANT
ANNEX I
-------
FORM OF DEBENTURE
THESE SECURITIES (THE "SECURITIES") HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR SALE IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE
CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.
No. 97-1 US $ 1,300,000
------------ ----------------
ALL AMERICAN FOOD GROUP, INC.
6% CONVERTIBLE DEBENTURE DUE SEPTEMBER 30, 1999
THIS DEBENTURE is one of a duly authorized issue up to $2,600,000 in
Debentures of ALL AMERICAN FOOD GROUP, INC., a corporation duly organized and
existing under the laws of the State of New Jersey (the "Company") designated as
its 6% Convertible Debenture Due September 30,1999.
FOR VALUE RECEIVED, the Company promises to pay to SOUTH SEAS
IMPORT-EXPORT CORP., the registered holder hereof (the "Holder"), the principal
sum of ONE MILLION THREE HUNDRED THOUSAND and 00/100 (US $1,300,000) Dollars on
September 30, 1999 (the "Maturity Date") and to pay interest on the principal
sum outstanding from time to time in arrears upon conversion as provided herein
on September 30, 1999 at the rate of 6% per annum accruing from the date of
initial issuance. Accrual of interest shall commence on the first such business
day to occur after the date hereof until payment in full of the principal sum
has been made or duly provided for. Subject to the provisions of Paragraph 4
below, the principal of, and interest on, this Debenture are payable at the
option of the Holder, in shares of Common Stock $.01 par value per share of the
Company ("Common Stock"), or in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts, at the address last appearing on the Debenture Register of the
Company as designated in writing by the Holder from time to time. The Company
will pay the principal of and interest upon this Debenture on the Maturity Date,
less any amounts required by law to be deducted, to the registered holder of
this Debenture as of the tenth day prior to the Maturity Date and addressed to
such holder as the last address appearing on the Debenture Register. The
forwarding of such check shall constitute a payment of principal and interest
hereunder and shall satisfy and discharge the liability for principal and
interest on this Debenture to the extent of the sum represented by such check
plus any amounts so deducted.
This Debenture is subject to the following additional provisions:
1. The Debentures are issuable in denominations of Fifty Thousand
Dollars (US$50,000) and integral multiples thereof. The Debentures are
exchangeable for an equal aggregate principal amount of Debentures of different
authorized denominations, as requested by the Holders surrendering the same. No
service charge will be made for such registration or transfer or exchange.
2. The Company shall be entitled to withhold from all payments of
principal of, and interest on, this Debenture any amounts required to be
withheld under the applicable provisions of the United States income tax laws or
other applicable laws at the time of such payments, and Holder shall execute and
deliver all required documentation in connection therewith.
3. This Debenture has been issued subject to investment representations
of the original purchaser hereof and may be transferred or exchanged only in
compliance with the Securities Act of 1933, as amended (the "Act"), and other
applicable state and foreign securities laws. In the event of any proposed
transfer of this Debenture, the Company may require, prior to issuance of a new
Debenture in the name of such other person, that it receive reasonable transfer
documentation including opinions that the issuance of the Debenture in such
other name does not and will not cause a violation of the Act or any applicable
state or foreign securities laws. Prior to due presentment for transfer of this
Debenture, the Company and any agent of the Company may treat the person in
whose name this Debenture is duly registered on the Company's Debenture Register
as the owner hereof for the purpose of receiving payment as herein provided and
for all other purposes, whether or not this Debenture be overdue, and neither
the Company nor any such agent shall be affected by notice to the contrary.
4. A. Subject to Section 4B and 4C, the Holder of this Debenture is
entitled, at its option, to convert at any time commencing the earlier of (a)
sixty (60) days after the Issuance Date, or (b) the effective date of the
Registration Statement filed pursuant to the Registration Rights Agreement
between the Company and the Holder, or the Holder's predecessor in interest, the
principal amount of this Debenture, provided that the principal amount is at
least US $10,000 (unless if at the time of such election to convert the
aggregate principal amount of all Debentures registered to the Holder is less
that Ten Thousand Dollars (US $10,000), then the whole amount thereof) into
shares of Common Stock of the Company at a conversion price for each share of
Common Stock equal to the lesser of (a) 100% of the Market Price on the Issuance
Date, and (b) (i) 82% of the Market Price on the Conversion Date if such date is
between sixty (60) and ninety (90) days from the date hereof; (ii) 80% of the
Market Price if the date is between ninety-one (91) and one hundred twenty (120)
days from the date hereof; (iii) 77.5% of the Market Price if the date is
between one hundred twenty-one (121) and one hundred fifty (150) days from the
date hereof; or (iv) 75% of the Market Price thereafter. For purposes of this
Section 4, the Market Price shall be the average closing bid price of the Common
Stock on the five (5) trading days immediately preceding the Closing Date or
Conversion Date, as may be applicable, as reported by the National Association
of Securities Dealers, or the closing bid price on the over-the-counter market
on such date or, in the event the Common Stock is listed on a stock exchange,
the Market Price shall be the closing price on the exchange on such date, as
reported in the Wall Street Journal. Conversion
shall be effectuated by surrendering the Debentures to be converted to the
Company with the form of conversion notice attached hereto as Exhibit A,
executed by the Holder of the Debenture evidencing such Holder's intention to
convert this Debenture or a specified portion (as above provided) hereof, and
accompanied, if required by the Company, by proper assignment hereof in blank.
Interest accrued or accruing from the date of issuance to the date of conversion
shall, at the option of the Company, be paid in cash or Common Stock upon
conversion at the Conversion Rate. No fraction of Shares or scrip representing
fractions of shares will be issued on conversion, but the number of shares
issuable shall be rounded to the nearest whole share. The date on which notice
of conversion is given (the "Conversion Date") shall be deemed to be the date on
which the Holder has delivered this Debenture, with the conversion notice duly
executed, to the Company or, the date set forth in such facsimile delivery of
the notice of conversion if the Debenture is received by the Company within
three (3) business days therefrom. Facsimile delivery of the conversion notice
shall be accepted by the Company at telephone number (▇▇▇-▇▇▇-▇▇▇▇); ATTN: ▇.
▇▇▇▇▇▇▇▇▇). Certificates representing Common Stock upon conversion will be
delivered within three (3) business days from the date the notice of conversion
with the original Debenture is delivered to the Company.
B. (i) The Company shall have the right to redeem
any Debentures for which a Notice of
Conversion has not theretofore been
submitted by delivering a Notice of
Redemption to the Holder of the Debenture.
(ii) The redemption price shall be calculated so
that the Holder will realize the full
economic benefit that the Holder would
derive from converting the securities into
Common Stock and immediately selling the
Common Stock on the date of delivery of the
Notice of Redemption, and shall be paid to
the Holder within ten (10) days from the
date of the Notice of Redemption, except
with respect to any Debentures for which a
Notice of Conversion is submitted to the
Company, within five (5) business days of
the Holder's receipt of the Company's Notice
of Redemption. Furthermore, in the event
such payment is not timely made, any rights
of the Company to redeem the Debenture shall
terminate, and the Notice of Redemption
shall be null and void.
C. The Company shall have the right to require, by written
notice to the Holder of this Debenture at least ten (10) days prior to the
Maturity Date, that the Holder of this Debenture exercise its right of
conversion with respect to all or that portion of the principal amount and
interest outstanding on the Maturity Date.
5. No provision of this Debenture shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the principal of,
and interest on, this Debenture at the time, place, and rate, and in the coin or
currency, herein prescribed. This Debenture and all other Debentures now or
hereafter issued of similar terms are direct obligations of the Company.
6. No recourse shall be had for the payment of the principal of, or the
interest on, this Debenture, or for any claim based hereon, or otherwise in
respect hereof, against any incorporator, shareholder, officer or director, as
such, past, present or future, of the Company or any successor corporation,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, all such liability being,
by the acceptance hereof and as part of the consideration for the issue hereof,
expressly waived and released.
7. In the event that an Event of Default occurs pursuant to Section 12
hereof, then, provided the Holder is not a U.S. Person as that term is defined
under the Regulation S of the Act, the Holder may, at is option, convert the
principal amount and accrued interest under this Debenture into shares of Common
Stock in accordance with the terms of this Debenture. In such event, the shares
of Common Stock shall be issued pursuant to Regulation S and shall be
transferable in accordance with the provisions of Regulation S as set forth
below. Upon the conversion of any Debenture pursuant to this provision, the
Company shall instruct its transfer agent to issue in the name of the holder, or
such non-U.S. Person as the Holder designates, a certificate or certificates
representing the shares issuable upon such conversion. The certificates issued
shall either be without legend, or may contain a self-liquidating legend at the
end of the restricted period under Regulation S (the "Restricted Period"). The
Company warrants that the only restriction it will impose in the certificate(s)
with its transfer agent will be to monitor the Restricted Period and that
following the Restricted Period, to the full extent permitted by applicable law,
the shares will otherwise be freely transferable on the books and records of the
Company. Nothing in this Section 9 shall affect in any way the Holder's, or the
Holder's nominee's, obligation and agreements to comply with all applicable
securities laws upon resale of the Common Stock.
8. If the Company merges or consolidates with another corporation or
sells or transfers all or substantially all of its assets to another person and
the holders of the Common Stock are entitled to receive stock, securities or
property in respect of or in exchange for Common Stock, then as a condition of
such merger, consolidation, sale or transfer, the Company and any such
successor, purchaser or transferee agree that the Debenture may thereafter be
converted on the terms and subject to the conditions set forth above into the
kind and amount of stock, securities or property receivable upon such merger,
consolidation, sale or transfer by a holder of the number of shares of Common
Stock into which this Debenture might have been converted immediately before
such merger, consolidation, sale or transfer, subject to adjustments which shall
be as nearly equivalent as may be practicable. In the event of any proposed
merger, consolidation or sale or transfer of all or substantially all of the
assets of the Company (a "Sale"), the Holder hereof shall have the right to
convert by delivering a Notice of Conversion to the Company within fifteen (15)
days of receipt of notice of such Sale from the Company. In the event the Holder
hereof shall elect not to convert, the Company may prepay all outstanding
principal and accrued interest on this Debenture, less all amounts required by
law to be deducted, upon which tender of payment following such notice, the
right of conversion shall terminate.
9. The Holder of the Debenture, by acceptance hereof, agrees that this
Debenture is being acquired for investment and that such Holder will not offer,
sell or otherwise dispose of this Debenture or the Shares of Common Stock
issuable upon conversion thereof except under
circumstances which will not result in a violation of the Act or any applicable
state Blue Sky or foreign laws or similar laws relating to the sale of
securities.
10. This Debenture shall be governed by and construed in accordance
with the laws of the State of New York. Each of the parties consents to the
jurisdiction of the federal courts whose districts encompass any part of the
City of New York or the state courts of the State of New York sitting in the
City of New York in connection with any dispute arising under this Agreement and
hereby waives, to the maximum extent permitted by law, any objection, including
any objection based on forum non coveniens, to the bringing of any such
proceeding in such jurisdictions.
11. The Holder of the Debenture, by acceptance hereof, agrees that this
Debenture is being acquired for investment and that such Holder will not offer,
sell or otherwise dispose of this Debenture or the Shares of Common Stock
issuable upon conversion thereof except under circumstances which will not
result in a violation of the Act or any applicable state Blue Sky or foreign
laws or similar laws relating to the sale of securities.
12. The following shall constitute an "Event of Default":
a. The Company shall default in the payment of principal
or interest on this Debenture and such default shall
remain unremedied for five (5) business days after
the Company has been notified of the default in
writing by a Holder; or
b. Any of the representations or warranties made by the
Company herein, in the Securities Purchase Agreement,
or in any certificate or financial or other written
statements furnished by the Company in connection
with the execution and delivery of this Debenture or
the Securities Purchase Agreement shall be false or
misleading in any material respect at the time made;
or
c: The Company fails to issue shares of Common Stock to
the Holder or to cause its Transfer Agent to issue
shares of Common Stock upon exercise by the Holder of
the conversion rights of the Holder in accordance
with the terms of this Debenture, fails to transfer
or to cause its Transfer Agent to transfer any
certificate for shares of Common Stock issued to the
Holder upon conversion of this Debenture and when
required by this Debenture or the Registration Rights
Agreement, or fails to remove any restrictive legend
or to cause its Transfer Agent to transfer on any
certificate or any shares of Common Stock issued to
the Holder upon conversion of this Debenture as and
when required by this Debenture, the Securities
Purchase Agreement or the Registration Rights
Agreement and any such failure shall continue uncured
for five (5) business days after the Company has been
notified of such failure in writing by Holder.
d. The Company shall fail to perform or observe, in any
material respect, any other covenant, term,
provision, condition, agreement or obligation of the
Company under this Debenture and such failure shall
continue uncured for a period of thirty (30) days
after written notice from the Holder of such failure;
or
e. The Company shall (1) admit in writing its inability
to pay its debts generally as they mature; (2) make
an assignment for the benefit of creditors or
commence proceedings for its dissolution; or (3)
apply for or consent to the appointment of a trustee,
liquidator or receiver for its or for a substantial
part of its property or business; or
f. A trustee, liquidator or receiver shall be appointed
for the Company or for a substantial part of its
property or business without its consent and shall
not be discharged within sixty (60) days after such
appointment; or
g. Any governmental agency or any court of competent
jurisdiction at the instance of any governmental
agency shall assume custody or control of the whole
or any substantial portion of the properties or
assets of the Company and shall not be dismissed
within sixty (60) days thereafter; or
h. Any money judgment, writ or warrant of attachment, or
similar process in excess of Two Hundred Thousand
($200,000) Dollars in the aggregate shall be entered
or filed against the Company or any of its properties
or other assets and shall remain unpaid, unvacated,
unbonded or unstayed for a period of sixty(60) days
or in any event later than five (5) days prior to the
date of any proposed sale thereunder; or
i. Bankruptcy, reorganization, insolvency or liquidation
proceedings or other proceedings for relief under any
bankruptcy law or any law for the relief of debtors
shall be instituted by or against the Company and, if
instituted against the Company, shall not be
dismissed within sixty (60) days after such
institution or the Company shall by any action or
answer approve of, consent to, or acquiesce in any
such proceedings or admit the material allegations
of, or default in answering a petition filed in any
such proceeding; or
j. The Company shall have its Common Stock suspended or
delisted from an exchange or over-the-counter market
from trading for in excess of five trading days.
Then, or at any time thereafter, and in each and every such case, unless such
Event of Default shall have been waived in writing by the Holder (which waiver
shall not be deemed to be a waiver of any subsequent default) at the option of
the Holder and in the Holder's sole discretion, the Holder may consider this
Debenture immediately due and payable, without presentment, demand, protest
or notice of any kinds, all of which are hereby expressly waived, anything
herein or in any note or other instruments contained to the contrary
notwithstanding, and the Holder may immediately enforce any and all of the
Holder's rights and remedies provided herein or any other rights or remedies
afforded by law.
13. Nothing contained in this Debenture shall be construed as
conferring upon the Holder the right to vote or to receive dividends or to
consent or receive notice as a shareholder in respect of any meeting of
shareholders or any rights whatsoever as a shareholder of the Company, unless
and to the extent converted in accordance with the terms hereof.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by an officer thereunto duly authorized.
Dated: , 1997
-------------------
ALL AMERICAN FOOD GROUP, INC.
By:
---------------------------------------
------------------------------------------
(Print Name)
-----------------------------------------
(Title)
EXHIBIT A
NOTICE OF CONVERSION
(To be Executed by the Registered Holder in order to Convert the Debenture)
The undersigned hereby irrevocably elects to convert $ ________________
of the principal amount of the above Debenture No. ___ into shares of Common
Stock of ALL AMERICAN FOOD GROUP, INC. (the "Company") according to the
conditions hereof, as of the date written below. In converting the Debenture No.
______________, the undersigned hereby confirms and acknowledges that the shares
of Common Stock are being acquired solely for the account of the undersigned and
not a nominee for any other party, and that the undersigned will not offer, sell
or otherwise dispose of any such shares of Common Stock, except under
circumstances that will not result in a violation of the Securities Act of 1933,
as amended.
Date of Conversion* ___________________________________________________________
Applicable Conversion Price __________________________________________________
Signature _____________________________________________________________________
[Name]
Address: ______________________________________________________________________
______________________________________________________________________
* This original Debenture and Notice of Conversion must be received by
the Company by the third business date following the Date of
Conversion.
ANNEX IV
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of September
_____, 1997 (this "Agreement"), is made by and between ALL AMERICAN FOOD GROUP,
INC., a New Jersey corporation (the "Company"), and the entity named on the
signature page hereto (the "Initial Investor").
W I T N E S S E T H:
WHEREAS, upon the terms and subject to the conditions of the
Securities Purchase Agreement, dated as of September ______, 1997, between the
Initial Investor and the Company (the "Securities Purchase Agreement"), the
Company has agreed to issue and sell to the Initial Investor one or more 6%
Convertible Debentures of the Company, in an aggregate principal amount not
exceeding $2,600,000 (collectively, the "Debentures"), and warrants to purchase
up to 100,000 shares of Common Stock, which Debentures will be convertible into
shares of the common stock, $.01 par value (the "Common Stock"), of the Company
(the "Conversion Shares") upon the terms and subject to the conditions of such
Debentures, and the Warrants will be exercisable for shares of Common Stock (the
"Warrant Shares"); and
WHEREAS, to induce the Initial Investor to execute and deliver
the Securities Purchase Agreement, the Company has agreed to provide certain
registration rights under the Securities Act of 1933, as amended, and the rules
and regulations thereunder, or any similar successor statute (collectively, the
"Securities Act"), with respect to the Conversion Shares and Warrant Shares;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Initial Investor hereby agrees as follows:
1. Definitions.
(1) As used in this Agreement, the
following terms shall have the following
meanings:
(i) "Investor" means the Initial Investor and any permitted
transferee or assignee who agrees to become bound by the provisions of this
Agreement in accordance with Section 9 hereof.
(ii) "Register," "Registered," and "Registration" refer to a
registration effected by preparing and filing a Registration Statement or
Statements in compliance with the Securities Act and pursuant to Rule 415 under
the Securities Act or any successor rule providing for offering securities on a
continuous basis ("Rule 415"), and the declaration or ordering of effectiveness
of such Registration Statement by the United States Securities and Exchange
Commission (the "SEC").
(iii) "Potential Material Event" means any of the following:
(a) the possession by the Company of material information not ripe for
disclosure in a registration statement, which shall be evidenced by
determinations in good faith by the Board of Directors of the Company that
disclosure of such information in the registration statement would be
detrimental to the business and affairs of the Company; or (b) any material
engagement or activity by the Company which would, in the good faith
determination of the Board of Directors of the Company, be adversely affected by
disclosure in a registration statement at such time, which determination shall
be accompanied by a good faith determination by the Board of Directors of the
Company that the registration statement would be materially misleading absent
the inclusion of such information.
(iv) "Registrable Securities" means the Conversion Shares and
the Warrant Shares.
(v) "Registration Statement" means a registration statement of
the Company under the Securities Act.
(2) Capitalized terms used herein and
not otherwise defined herein shall have the
respective meanings set forth in the
Securities Purchase Agreement.
2. Registration.
(1) Mandatory Registration. The Company
shall prepare and file with the SEC, no
later than forty-five (45) days following
the initial Closing Date under the
Securities Purchase Agreement, either a
Registration Statement on Form SB-2
registering for resale by the Investor a
sufficient number of shares of Common Stock
for the Initial Investors (or such lesser
number as may be required by the SEC, but in
no event less than the number of shares into
which the Debentures would be convertible
and the Warrants exercisable at the time of
filing of the Form SB-2, or an amendment to
any pending Company Registration Statement
on Form SB-2, which Registration Statement
shall be declared effective no later than 90
days after the Closing Date. If at any time
the number of shares of Common Stock into
which the Debentures may be converted
exceeds the aggregate number of shares of
Common Stock then registered, the Company
shall, within ten (10) business days after
receipt of a written notice from any
Investor, either (i) amend the Registration
Statement filed by the Company pursuant to
the preceding sentence, if such Registration
Statement has not been declared effective by
the SEC at that time, to register all shares
of Common Stock into which the Debentures
may be converted, or (ii) if such
Registration Statement has been declared
effective by the SEC at that time, file with
the SEC an additional Registration Statement
on Form SB-2 to register the shares of
Common Stock into which the Debentures may
be converted that exceed the aggregate
number of shares of Common Stock already
registered.
(2) Payments by the Company. If the
Registration Statement covering the
Registrable Securities required to be filed
by the Company pursuant to Section 2(a)
hereof is not effective within the earlier
of (a) 5 days after notice by the SEC that
it may be declared effective or (b) ninety
(90) days following the initial Closing Date
(the Required Effective Date"), or after a
Suspension Period (except as provided by the
last sentence of section 2a), then the
Company will make payments to the Initial
Investor in such amounts and at such times
as shall be determined pursuant to this
Section 2(b). The amount to be paid by the
Company to the Initial Investor shall be
determined as of each Computation Date, and
such amount shall be equal to two (2%)
percent of the purchase price paid by the
Initial Investor for all Debentures then
purchased and outstanding pursuant to the
Securities Purchase Agreement for any period
from the Required Effective Date and three
(3%) percent to each Computation Date
thereafter, until the Registration Statement
is declared effective by the SEC (the
"Periodic Amount"). The full Periodic Amount
shall be paid by the Company in immediately
available funds within three business days
after each Computation Date. Notwithstanding
the foregoing, the amounts payable by the
Company pursuant to this provision shall not
be payable to the extent any delay in the
effectiveness of the Registration Statement
occurs because of an act of, or a failure to
act or to act timely by the Initial Investor
or its counsel, or in the event all of the
Registrable Securities may be sold pursuant
to Rule 144 or another available exemption
under the Act.
As used in this Section 2(b), the following terms shall have
the following meanings:
"Computation Date" means the date which is thirty (30) days
after the Required Effective Date (except as provided by the last sentence of
section 2(a)), and, if the Registration Statement required to be filed by the
Company pursuant to Section 2(a) has not theretofore been declared effective by
the SEC, each date which is thirty (30) days after the previous Computation Date
(pro rated for partial periods) until such Registration Statement is so declared
effective.
3. Obligations of the Company. In connection
with the registration of the Registrable Securities,
the Company shall do each of the following.
(1) Prepare promptly, and file with the
SEC by forty-five (45) days after the
initial Closing Date, a Registration
Statement with respect to not less than the
number of Registrable Securities provided in
Section 2(a), above, and thereafter use its
reasonable best efforts to cause each
Registration Statement relating to
Registrable Securities to become effective
the earlier of (a) 5 days after notice by
the SEC that it may be declared effective or
(b) ninety (90) days following the initial
Closing Date, and keep the Registration
Statement effective at all times until the
earliest (the "Registration Period") of (i)
the date that is two years after the Closing
Date (ii) the date when the Investors may
sell all Registrable Securities under Rule
144 or (iii) the date the Investors no
longer own any of the Registrable
Securities, which Registration Statement
(including any amendments or supplements
thereto and prospectuses contained therein)
shall not contain any untrue statement of a
material fact or omit to state a material
fact required to be stated therein or
necessary to make the statements therein, in
light of the circumstances in which they
were made, not misleading;
(b) Prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration Statement and the
prospectus used in connection with the Registration Statement as may be
necessary to keep the Registration effective at all times during the
Registration Period, and, during the Registration Period, comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities of the Company covered by the Registration Statement
until such time as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof as set forth in the Registration Statement;
(c) The Company shall permit a single firm of counsel
designated by the Initial Investors to review the Registration Statement and all
amendments and supplements thereto a reasonable period of time prior to their
filing with the SEC, and not file any document in a form to which such counsel
reasonably objects.
(d) Furnish to each Investor whose Registrable Securities are
included in the Registration Statement and its legal counsel identified to the
Company, (i) promptly after the same is prepared and publicly distributed, filed
with the SEC, or received by the Company, one (1) copy of the Registration
Statement, each preliminary prospectus and prospectus, and each amendment or
supplement thereto, and (ii) such number of copies of a prospectus, and all
amendments and supplements thereto and such other documents, as such Investor
may reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such Investor;
(e) As promptly as practicable after becoming aware of such
event, notify each Investor of the happening of any event of which the Company
has knowledge, as a result of which the prospectus included in the Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, and use its best efforts promptly to prepare a supplement
or amendment to the Registration Statement or other appropriate filing with the
SEC to correct such untrue statement or omission, and deliver a number of copies
of such supplement or amendment to each Investor as such Investor may reasonably
request;
(f) As promptly as practicable after becoming aware of such
event, notify each Investor who holds Registrable Securities being sold (or, in
the event of an underwritten offering, the managing underwriters) of the
issuance by the SEC of a Notice of Effectiveness or any notice of effectiveness
or any stop order or other suspension of the effectiveness of the Registration
Statement at the earliest possible time;
(g) Notwithstanding the foregoing, if at any time or from time
to time after the date of effectiveness of the Registration Statement, the
Company notifies the Investors in writing of the existence of a Potential
Material Event, the Investors shall not offer or sell any Registrable Shares, or
engage in any other transaction involving or relating to the Registrable Shares,
from the time of the giving of notice with respect to a Potential Material Event
until such Investor receives written notice from the Company that such Potential
Material Event either has been disclosed tot he public or no longer constitutes
a Potential Material Event; provided, however, that the Company may not so
suspend the right to such holders of Registrable Shares for more than two twenty
(20) day period in the aggregate during any 12-month period ("Suspension
Period") with at least a ten (10) business day interval between such periods,
during the periods the Registration Statement is required to be in effect.
(h) Use its reasonable efforts to secure designation of all
the Registrable Securities covered by the Registration Statement as a National
Association of Securities Dealers Automated
Quotations System ("NASDAQ") "Small Capitalization" within the meaning of Rule
11Aa2-1 of the SEC under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the quotation of the Registrable Securities on the NASDAQ
Small Cap Market; or if, despite the Company's reasonable efforts to satisfy the
preceding clause, the Company is unsuccessful in doing so, to secure NASDAQ/OTC
Bulletin Board authorization and quotation for such Registrable Securities and,
without limiting the generality of the foregoing, to arrange for at least two
market makers to register with the National Association of Securities Dealers,
Inc. ("NASD") as such with respect to such Registrable Securities;
(i) Provide a transfer agent and registrar, which may be a
single entity, for the Registrable Securities not later than the effective date
of the Registration Statement;
(j) Cooperate with the Investors who hold Registrable
Securities being offered to facilitate the timely preparation and delivery of
certificates for the Registrable Securities to be offered pursuant to the
Registration Statement and enable such certificates for the Registrable
Securities to be in such denominations or amounts as the case may be, as the
Investors may reasonably request, and, within three (3) business days after a
Registration Statement which includes Registrable Securities is ordered
effective by the SEC, the Company shall deliver, and shall cause legal counsel
selected by the Company to deliver, to the transfer agent for the Registrable
Securities (with copies to the Investors whose Registrable Securities are
included in such Registration Statement) an appropriate instruction and opinion
of such counsel; and
(k) Take all other reasonable actions necessary to expedite
and facilitate disposition by the Investor of the Registrable Securities
pursuant to the Registration Statement.
4. Obligations of the Investors. In connection
with the registration of the Registrable Securities,
the Investors shall have the following obligations:
(1) It shall be a condition precedent
to the obligations of the Company to
complete the registration pursuant to this
Agreement with respect to the Registrable
Securities of a particular Investor that
such Investor shall furnish to the Company
such information regarding itself, the
Registrable Securities held by it, and the
intended method of disposition of the
Registrable Securities held by it, as shall
be reasonably required to effect the
registration of such Registrable Securities
and shall execute such documents in
connection with such registration as the
Company may reasonably request. At least
five (5) days prior to the first anticipated
filing date of the Registration Statement,
the Company shall notify each Investor of
the information the Company
requires from each such Investor (the
"Requested Information") if such Investor
elects to have any of such Investor's
Registrable Securities included in the
Registration Statement. If at least two (2)
business days prior to the filing date the
Company has not received the Requested
Information from an Investor (a
"Non-Responsive Investor"), then the Company
may file the Registration Statement without
including Registrable Securities of such
Non-Responsive Investor;
(2) Each Investor by such Investor's
acceptance of the Registrable Securities
agrees to cooperate with the Company as
reasonably requested by the Company in
connection with the preparation and filing
of the Registration Statement hereunder,
unless such Investor has notified the
Company in writing of such Investor's
election to exclude all of such Investor's
Registrable Securities from the Registration
Statement; and
(3) Each Investor agrees that, upon
receipt of any notice from the Company of
the happening of any event of the kind
described in Section 3(e) or 3(f), above,
such Investor will immediately discontinue
disposition of Registrable Securities
pursuant to the Registration Statement
covering such Registrable Securities until
such Investor's receipt of the copies of the
supplemented or amended prospectus
contemplated by Section 3(e) or 3(f) and, if
so directed by the Company, such Investor
shall deliver to the Company (at the expense
of the Company) or destroy (and deliver to
the Company a certificate of destruction)
all copies in such Investor's possession, of
the prospectus covering such Registrable
Securities current at the time of receipt of
such notice.
5. Expenses of Registration. All reasonable
expenses, other than underwriting discounts and
commissions incurred in connection with
registrations, filings or qualifications pursuant to
Section 3, but including, without limitation, all
registration, listing, and qualifications fees,
printers and accounting fees, the fees and
disbursements of counsel for the Company, and a fee
for a single counsel for the Investor not
exceeding $3,500 shall be borne by the Company.
6. Indemnification. In the event any
Registrable Securities are included in a Registration
Statement under this Agreement:
(1) To the extent permitted by law, the
Company will indemnify and hold harmless
each Investor who holds such Registrable
Securities, the directors, if any, of such
Investor, the officers, if any, of such
Investor, each person, if any, who controls
any Investor within the meaning of the
Securities Act or the Exchange Act (each, an
"Indemnified Person" or "Indemnified
Party"), against any losses, claims,
damages, liabilities or expenses (joint or
several) incurred (collectively, "Claims")
to which any of them may become subject
under the Securities Act, the Exchange Act
or otherwise, insofar as such Claims (or
actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of
or are based upon any of the following
statements, omissions or violations in the
Registration Statement, or any
post-effective amendment thereof, or any
prospectus included therein: (i) any untrue
statement or alleged untrue statement of a
material fact contained in the Registration
Statement or any post-effective amendment
thereof or the omission or alleged omission
to state therein a material fact required to
be stated therein or necessary to make the
statements therein not misleading, (ii) any
untrue statement or alleged untrue statement
of a material fact contained in the final
prospectus (as amended or supplemented, if
the Company files any amendment thereof or
supplement thereto with the SEC) or the
omission or alleged omission to state
therein any material fact necessary to make
the statements made therein, in light of the
circumstances under which the statements
therein were made, not misleading or (iii)
any violation or alleged violation by the
Company of the Securities Act, the Exchange
Act, any state securities law or any rule or
regulation under the Securities Act, the
Exchange Act or any state securities law
(the matters in the foregoing clauses (i)
through (iii) being, collectively,
"Violations").
Subject to clause (b) of this Section 6, the
Company shall reimburse the Investors,
promptly as such expenses are incurred and
are due and payable, for any legal fees or
other reasonable expenses incurred by them
in connection with investigating or
defending any such Claim. Notwithstanding
anything to the contrary contained herein,
the indemnification agreement contained in
this Section 6(a) shall not (I) apply to a
Claim arising out of or based upon a
Violation which occurs in reliance upon and
in conformity with information furnished in
writing to the Company by or on behalf of
any Indemnified Person expressly for use in
connection with the preparation of the
Registration Statement or any such amendment
thereof or supplement thereto, (II) be
available to the extent such Claim is based
on a failure of the Investor to deliver or
cause to be delivered the prospectus made
available by the Company; or (III) apply to
amounts paid in settlement of any Claim if
such settlement is effected without the
prior written consent of the Company, which
consent shall not be unreasonably withheld.
Each Investor will indemnify the Company and
its officers, directors and agents against
any claims arising out of or based upon a
Violation which occurs in reliance upon and
in conformity with information furnished in
writing to the Company, by or on behalf of
such Investor, expressly for use in
connection with the preparation of the
Registration Statement, subject to such
limitations and conditions as are applicable
to the Indemnification provided by the
Company to this Section 6. Such indemnity
shall remain in full force and effect
regardless of any investigation made by or
on behalf of the Indemnified Person and
shall survive the transfer of the
Registrable Securities by the Investors
pursuant to Section 9.
(2) Promptly after receipt by an
Indemnified Person or Indemnified Party
under this Section 6 of notice of the
commencement of any action (including any
governmental action), such Indemnified
Person or Indemnified Party shall, if a
Claim in respect thereof is to be made
against any indemnifying party under this
Section 6, deliver to the indemnifying party
a written notice of the commencement thereof
and the
indemnifying party shall have the right to
participate in, and, to the extent the
indemnifying party so desires, jointly with
any other indemnifying party similarly
noticed, to assume control of the defense
thereof with counsel mutually satisfactory
to the indemnifying party and the
Indemnified Person or the Indemnified Party,
as the case may be. In case any such action
is brought against any Indemnified Person or
Indemnified Party, and it notifies the
indemnifying party of the commencement
thereof, the indemnifying party will be
entitled to participate in, and, to the
extent that it may wish, jointly with any
other indemnifying party similarly notified,
assume the defense thereof, subject to the
provisions herein stated and after notice
from the indemnifying party to such
Indemnified Person or Indemnified Party of
its election so to assume the defense
thereof, the indemnifying party will not be
liable to such Indemnified Person or
Indemnified Party under this Section 6 for
any legal or other reasonable out-of-pocket
expenses subsequently incurred by such
Indemnified Person or Indemnified Party in
connection with the defense thereof other
than reasonable costs of investigation,
unless the indemnifying party shall not
pursue the action of its final conclusion.
The Indemnified Person or Indemnified Party
shall have the right to employ separate
counsel in any such action and to
participate in the defense thereof, but the
fees and reasonable out-of-pocket expenses
of such counsel shall not be at the expense
of the indemnifying party if the
indemnifying party has assumed the defense
of the action with counsel reasonably
satisfactory to the Indemnified Person or
Indemnified Party. The failure to deliver
written notice to the indemnifying party
within a reasonable time of the commencement
of any such action shall not relieve such
indemnifying party of any liability to the
Indemnified Person or Indemnified Party
under this Section 6, except to the extent
that the indemnifying party is prejudiced in
its ability to defend such action. The
indemnification required by this Section 6
shall be made by periodic payments of the
amount thereof during the course of the
investigation or defense, as such expense,
loss, damage or liability is incurred and is
due and
payable.
7. Contribution. To the extent any
indemnification by an indemnifying party is
prohibited or limited by law, the
indemnifying party agrees to make the
maximum contribution with respect to any
amounts for which it would otherwise be
liable under Section 6 to the fullest extent
permitted by law; provided, however, that
(a) no contribution shall be made under
circumstances where the maker would not have
been liable for indemnification under the
fault standards set forth in Section 6; (b)
no seller of Registrable Securities guilty
of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from
any seller of Registrable Securities who was
not guilty of such fraudulent
misrepresentation; and (c) contribution by
any seller of Registrable Securities shall
be limited in amount to the net amount of
proceeds received by such seller from the
sale of such Registrable Securities.
8. Reports under Exchange Act. With a view to
making available to the Investors the benefits of
Rule 144 promulgated under the Securities Act or any
other similar rule or regulation of the SEC that may
at any time permit the Investors to sell securities
of the Company to the public without registration
("Rule 144"), the Company agrees to:
(1) make and keep public information
available, as those terms are understood and
defined in Rule 144;
(2) file with the SEC in a timely
manner all reports and other documents
required of the Company under the Securities
Act and the Exchange Act; and
(3) furnish to each Investor so long as
such Investor owns Registrable Securities,
promptly upon request, (i) a written
statement by the Company that it has
complied with the reporting requirements of
Rule 144, the Securities Act and the
Exchange Act, (ii) a copy of the most recent
annual or quarterly report of the Company
and such other reports and documents so
filed by the Company and (iii) such other
information as may be reasonably requested
to permit the Investors to sell such
securities pursuant to
Rule 144 without registration.
9. Assignment of the Registration Rights. The
rights to have the Company register Registrable
Securities pursuant to this Agreement shall be
automatically assigned by the Investors to any
transferee of the Registrable Securities (or all or
any portion of any Debenture of the Company which is
convertible into such securities) only if: (a) the
Investor agrees in writing with the transferee or
assignee to assign such rights, and a copy of such
agreement is furnished to the Company within a
reasonable time after such assignment, (b) the
Company is, within a reasonable time after such
transfer or assignment, furnished with written notice
of (i) the name and address of such transferee or
assignee and (ii) the securities with respect to
which such registration rights are being transferred
or assigned, (c) immediately following such transfer
or assignment the further disposition of such
securities by the transferee or assignee is
restricted under the Securities Act and applicable
state securities laws, and (d) at or before the time
the Company received the written notice contemplated
by clause (b) of this sentence the transferee or
assignee agrees in writing with the Company to be
bound by all of the provisions contained herein. In
the event of any delay in filing or effectiveness of
the Registration Statement as a result of such
assignment, the Company shall not be liable for any
damages arising from such delay, or the payments set
forth in Section 2(c) hereof.
10. Amendment of Registration Rights. Any
provision of this Agreement may be amended and the
observance thereof may be waived (either generally or
in a particular instance and either retroactively or
prospectively), only with the written consent of the
Company and Investors who hold an eighty (80%)
percent interest of the Registrable Securities. Any
amendment or waiver effected in accordance with this
Section 10 shall be binding upon each Investor and
the Company.
11. Miscellaneous.
(1) A person or entity is deemed to be
a holder of Registrable Securities whenever
such person or entity owns of record such
Registrable Securities. If the Company
receives conflicting instructions, notices
or
elections from two or more persons or
entities with respect to the same
Registrable Securities, the Company shall
act upon the basis of instructions, notice
or election received from the registered
owner of such Registrable Securities.
(2) Notices required or permitted to be
given hereunder shall be in writing and
shall be deemed to be sufficiently given
when personally delivered (by hand, by
courier, by telephone line facsimile
transmission, receipt confirmed, or other
means) or sent by certified mail, return
receipt requested, properly addressed and
with proper postage pre-paid (i) if to the
Company, ALL AMERICAN FOOD GROUP, INC., ▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ATT: Mr. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Telecopier
No.: (▇▇▇) ▇▇▇-▇▇▇▇; with a copy to ▇▇▇▇▇▇ &
Eilen, Esqs., ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.,
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇
▇▇▇▇▇▇, Esq., Telecopier No.: (516)
222-0948; (ii) if to the Initial Investor,
at the address set forth under its name in
the Securities Purchase Agreement, with a
copy to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq., ▇▇▇▇▇▇▇ &
Prager, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇ and (iii) if to any other
Investor, at such address as such Investor
shall have provided in writing to the
Company, or at such other address as each
such party furnishes by notice given in
accordance with this Section 11(b), and
shall be effective, when personally
delivered, upon receipt and, when so sent by
certified mail, four (4) calendar days after
deposit with the United states Postal
Service.
(3) Failure of any party to exercise
any right or remedy under this Agreement or
otherwise, or delay by a party in exercising
such right or remedy, shall not operate as a
waiver thereof.
(4) This Agreement shall be governed by
and interpreted in accordance with the laws
of the State of New York. Each of the
parties consents to the jurisdiction of the
federal courts whose districts encompass any
part of the City of New York or the state
courts of the State of New York sitting in
the
City of New York in connection with any
dispute arising under this Agreement and
hereby waives, to the maximum extent
permitted by law, any objection, including
any objection based on forum non coveniens,
to the bringing of any such proceeding in
such jurisdictions. A facsimile transmission
of this signed Agreement shall be legal and
binding on all parties hereto. This
Agreement may be signed in one or more
counterparts, each of which shall be deemed
an original. The headings of this Agreement
are for convenience of reference and shall
not form part of, or affect the
interpretation of, this Agreement. If any
provision of this Agreement shall be invalid
or unenforceable in any jurisdiction, such
invalidity or unenforceability shall not
affect the validity or enforceability of the
remainder of this Agreement or the validity
or enforceability of this Agreement in any
other jurisdiction. This Agreement may be
amended only by an instrument in writing
signed by the party to be charged with
enforcement. This Agreement supersedes all
prior agreements and understandings among
the parties hereto with respect to the
subject matter hereof.
(5) This Agreement constitutes the
entire agreement among the parties hereto
with respect to the subject matter hereof.
There are no restrictions, promises,
warranties or undertakings, other than those
set forth or referred to herein. This
Agreement supersedes all prior agreements
and understandings among the parties hereto
with respect to the subject matter hereof.
(6) Subject to the requirements of
Section 9 hereof, this Agreement shall inure
to the benefit of and be binding upon the
successors and assigns of each of the
parties hereto.
(7) All pronouns and any variations
thereof refer to the masculine, feminine or
neuter, singular or plural, as the context
may require.
(8) The headings in this Agreement are
for convenience of reference only and shall
not limit or
otherwise affect the meaning thereof.
(i) This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same agreement. This Agreement, once executed by a party,
may be delivered to the other party hereto by telephone line facsimile
transmission of a copy of this Agreement bearing the signature of the party so
delivering this Agreement.
(j) Neither party shall be liable for consequential damages.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed by their respective officers thereunto duly authorized as of
the day and year first above written.
ALL AMERICAN FOOD GROUP, INC.
By:
--------------------------------------
Name:
Title:
SOUTH SEAS IMPORT-EXPORT CORP.
By:
--------------------------------------
Name:
Title:
ANNEX VI
FORM OF WARRANT
THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR THE SECURITIES LAWS OF ANY STATE, AND MAY BE REOFFERED AND SOLD ONLY
IF SO REGISTERED OR IF AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF ARE
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AS SET FORTH HEREIN.
EXERCISABLE AT ANY TIME UNTIL 5:00 P.M., NEW
YORK CITY TIME, ON THE FIFTH ANNIVERSARY
OF THE EXPIRATION DATE OR, IF NOT A BUSINESS DAY,
THE IMMEDIATELY FOLLOWING BUSINESS DAY
UNLESS EXTENDED PURSUANT TO THIS WARRANT CERTIFICATE.
No. 2
ALL AMERICAN FOOD GROUP, INC.
WARRANT CERTIFICATE
Warrant Certificate for One Warrant
to Purchase 175,000 shares of Common Stock
of All American Food Group, Inc.
This Warrant Certificate certifies that, for value received,
South Seas Import-Export Corp., or registered assigns (the "Holder"), is the
owner of one Warrant (as defined below), which entitles the Holder to purchase
at any time from and after the date hereof and until 5:00 p.m., New York City
time, on the fifth anniversary of the issue date or, if not a business day, the
immediately following business day, at the purchase price equal to $______ (130%
of the closing bid price of the Common Stock at the end of trading on September
__, 1997) (the "Exercise Price"), up to an aggregate of _______ shares of common
stock, par value $.01 per share (the "Common Stock"), of All American Food
Group, Inc., a New Jersey corporation (the "Company"). The number of shares
purchasable upon exercise of the Warrants and the Exercise Price shall be
subject to adjustment from time to time as herein provided. In this Warrant
Certificate, the right to purchase each share of Common Stock is referred to as
a "Warrant"; the shares of Common Stock or, pursuant to the terms hereof, other
securities, issuable upon exercise of the Warrants are referred to as the
"Warrant Shares."
The Warrants are subject to the following terms, conditions and
provisions:
SECTION 1. Registration; Transferability; Exchange of Warrant
Certificate.
1.1 Registration. The Company shall number and register each Warrant in
a register (the "Warrant Register") maintained at the office of the Company (the
"Office") as they are issued by the Company. The Company shall be entitled to
treat the Holder of any Warrant as the owner in fact thereof for all purposes
and shall not be bound to recognize any equitable or other claim to or interest
in such Warrant on the part of any other person, and shall not be liable for any
registration of transfer of Warrants which are registered or to be registered in
the name of a fiduciary or the nominee of a fiduciary unless made with the
actual knowledge that a fiduciary or nominee is committing a breach of trust in
requesting such registration or transfer, or with knowledge of such facts that
its participation therein amounts to bad faith.
1.2 Transfer. Subject to compliance with the restrictions on transfer
set forth herein and in Section 3 hereof, the Warrants shall be transferable
only on the Warrant Register maintained at the Office upon delivery thereof duly
endorsed by the Holder or by his, her or its duly authorized attorney or
representative, or accompanied by proper evidence of succession, assignment or
authority to transfer. In all cases of transfer by an attorney, the original
power of attorney, duly approved, or a copy thereof, duly certified, shall be
deposited and remain with the Company. In case of transfer by executors,
administrators, guardians or other legal representatives, duly authenticated
evidence of their authority shall be produced, and may be required to be
deposited and to remain with the Company in its discretion.
1.3 Exchange of Warrant Certificates. Subject to the provisions herein,
each Warrant Certificate may be exchanged for another Warrant Certificate(s)
entitling the Holder to purchase a like aggregate number of Warrant Shares as
this Warrant Certificate then entitles such Holder to purchase. If the Holder
desires to exchange this Warrant Certificate, it shall make such request in
writing and deliver it to the Company, and shall surrender, properly endorsed,
this Warrant Certificate. Thereupon, the Company shall sign and deliver to the
person entitled thereto a new Warrant Certificate as so requested.
SECTION 2. Terms of Warrants; Exercise of Warrants.
2.1 Terms of Warrants. Subject to the terms of this Warrant
Certificate, each Holder shall have the right, which may be exercised at any
time from the date hereof until 5:00 p.m., New York City time, on the fifth
anniversary of the issue date or, if not a business day, the immediately
following business day (the "Expiration Date") to purchase from the Company (and
the Company shall issue and sell to the Holder of the Warrant) up to an
aggregate of _______ fully paid and nonassessable Warrant Shares or such other
number of Warrant Shares which the Holder may at the time be entitled to
purchase in accordance with this Warrant Certificate. Each Warrant not exercised
prior to 5:00 p.m., New York City time, on the Expiration Date shall become
void, and all rights under this Warrant Certificate shall cease as of such time.
2.2 Exercise of Warrants. The Warrants evidenced by this Warrant
Certificate may be exercised in whole or in part upon surrender to the Company,
at its Office, of this Warrant Certificate, with the Purchase Form attached
hereto duly completed and signed, and upon payment to the Company of the
Exercise Price for the number of Warrant Shares in respect of which such
Warrants are then exercised. Payment of the aggregate Exercise Price shall be at
the option of the Holder in cash or by bank check payable to the order of the
Company or a combination thereof.
Subject to Section 3 hereof, upon the surrender of this Warrant
Certificate, with the Purchase Form duly executed and payment of the Exercise
Price as aforesaid, the Company shall cause to be issued and delivered with all
reasonable dispatch to or upon the written order of the Holder and in such name
or names as the Holder may designate a certificate(s) for the number of Warrant
Shares so purchased, together, at the option of the Company as provided in
Section 7 hereof, with cash in respect of any fractional Warrant Shares
otherwise issuable upon such surrender. Such certificate(s) shall be deemed to
have been issued as of the date of the surrender of this Warrant Certificate and
payment of the Exercise Price, as aforesaid. The rights of purchase represented
by this Warrant Certificate shall be exercisable, at the election of the Holder,
either in full at any time or from time to time in part prior to the Expiration
Date. In the event that the Holder of this Warrant Certificate shall exercise
fewer than all the Warrants evidenced hereby at any time prior to the Expiration
Date, a new Warrant Certificate evidencing the remaining unexercised Warrant(s)
shall be issued.
2.3 Exercise Price. The price per share at which each Warrant Share
shall be purchased upon exercise of each Warrant shall be equal to $______ (130%
of the closing bid price of the Common Stock at the end of trading on September
__, 1997), subject to adjustment pursuant to Section 6 hereof.
SECTION 3. Payment of Taxes. The Company covenants and agrees that it
will pay when due and payable all documentary, stamp and other taxes, if any,
which may be payable in respect of the issuance or delivery of any Warrant or of
the Warrant Shares purchasable upon the exercise of such Warrants; provided,
however, that the Company shall not be required to pay any tax or other
governmental charge which may be payable in respect of any transfer involved in
the transfer or delivery of any warrant or the issuance or delivery of
certificates for Warrant Shares in a name other than that of the Holder of such
Warrants.
SECTION 4. Mutilated or Missing Warrants. In the event this Warrant
Certificate shall be mutilated, lost, stolen or destroyed, the Company shall
issue and deliver in exchange and substitution for and upon cancellation of the
mutilated Warrant Certificate, or in lieu of and in substitution for the Warrant
Certificate lost, stolen or destroyed, a new Warrant Certificate of like tenor
and representing an equivalent right or interest, but only upon, in the event of
a lost, stolen or destroyed certificate, receipt of evidence satisfactory to the
Company of such loss, theft or destruction. An applicant for such a substitute
Warrant Certificate shall also comply with such other reasonable regulations and
pay such other reasonable charges as the Company may prescribe.
SECTION 5. Reservation and Availability of Warrant Shares; Purchase and
Cancellation of Warrants.
5.1 Reservation of Warrant Shares. (a) The Company shall at all times
reserve and keep available free from preemptive rights, out of the aggregate of
its authorized but unissued shares of Common Stock, for the purpose of enabling
it to satisfy any obligations to issue the Warrant Shares upon exercise of
Warrants, the full number of Warrant Shares deliverable upon the exercise of all
outstanding Warrants evidenced by this Warrant Certificate. The Company or, if
appointed, the transfer agent for the Common Stock and every subsequent transfer
agent for any shares of the Company's capital stock issuable upon the exercise
of any of the rights of purchase aforesaid (each, a "Transfer Agent") will be
irrevocably authorized and directed at all times to reserve such number of
authorized shares as shall be required for such purpose. The Company will keep a
copy of this Warrant Certificate on file with each Transfer Agent. The Company
will furnish such Transfer Agent a copy of all notices of adjustments and
certificates related thereto which are transmitted to the Holder pursuant to
Section 6 hereof.
(b) The Company covenants that all Warrant Shares issuable upon
exercise of Warrants will, upon issuance, be fully paid, nonassessable and free
from preemptive rights and free from all taxes, liens, charges, and security
interests with respect to the issuance thereof.
(c) Before taking any action which would cause an adjustment pursuant
to Section 6 reducing the Exercise Price, the Company will take any and all
corporate action which may, in the opinion of its counsel (which may be counsel
employed by the Company), be necessary in order that the Company may validly and
legally issue fully paid and nonassessable Warrant Shares at the Exercise Price
as so adjusted.
5.2 Warrant Shares Record Date. Each person in whose name any stock
certificate for Warrant Shares is issued shall for all purposes be deemed to
have become the holder of record of the Warrant Shares represented thereby on,
and such stock certificate shall be dated the date upon which this Warrant
Certificate was duly surrendered and payment of the Exercise Price (and any
applicable transfer taxes) was made.
5.3 Purchase of Warrants by the Company. The Company shall have the
right, except as limited by law, other agreements or herein, to purchase or
otherwise acquire in negotiated transactions Warrants evidenced hereby at such
times, in such manner and for such consideration as it may deem appropriate.
5.4 Cancellation of Warrants. Any Warrant Certificate surrendered for
exchange, substitution, transfer or exercise in whole or in part shall be
canceled by the Company and retired.
SECTION 6. Adjustment of Number of Warrant Shares and Exercise Price.
The number and kind of securities purchasable upon the exercise of each Warrant
and the Exercise Price shall be subject to adjustment from time to time upon the
happening of certain events as hereinafter described.
6.1 Mandatory Adjustments. The number and kind of securities
purchasable upon the exercise of each Warrant and the Exercise Price shall be
subject to adjustment as follows:
(a) In case the Company shall (i) declare or pay a dividend on
its outstanding Common Stock in shares of Common Stock or make a
distribution to all holders of its outstanding Common Stock in shares
of Common Stock, (ii) subdivide its outstanding shares of Common Stock
into a greater number of shares of Common Stock, (iii) combine its
outstanding shares of Common Stock into a smaller number of shares of
Common Stock or (iv) issue by reclassification of its shares of Common
Stock other securities of the Company (including any such
reclassification in connection with a consolidation, merger or other
business combination in which the Company is the surviving
corporation), the number and kind of Warrant Shares purchasable upon
exercise of each Warrant shall be adjusted so that the Holder of each
Warrant upon exercise thereof shall be entitled to receive the kind and
number of Warrant Shares or other securities of the Company that the
Holder would have owned or have been entitled to receive after the
happening of any of the events described above had such Warrant been
exercised immediately prior to the happening of such event or any
record date with respect thereto. An adjustment made pursuant to this
paragraph (a) shall become effective on the date of the dividend
payment, subdivision, combination or issuance retroactive to the record
date with respect thereto, if any, for such event. Such adjustment
shall be made successively whenever such an issuance is made.
(b) No adjustment in the number of Warrant Shares purchasable
hereunder shall be required unless such adjustment would require an
increase or decrease of at least one percent (1%) in the number of
Warrant Shares purchasable upon the exercise of each Warrant; provided,
however, that any adjustments which by reason of this Section 6.1(b)
are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations shall be made to
the nearest one-thousandth of a share. No adjustment need be made for a
change in the par value of the Warrant Shares.
6.2 Voluntary Adjustment by the Company. The Company may at its option,
at any time during the term of the Warrants, reduce the then current Exercise
Price to any amount deemed appropriate by the Board of Directors of the Company;
provided that if the Company elects so to reduce the then current Exercise
Price, such reduction shall remain in effect for at least a 15-day period, after
which time the Company may, at its option, reinstate the Exercise Price in
effect prior to such reduction.
6.3 Notice of Adjustment. Upon any adjustment of the number of Warrant
Shares purchasable upon the exercise of each Warrant or the Exercise Price of
such Warrant, as herein provided, the Company shall promptly mail within 10 days
thereafter by first class mail, postage prepaid, to each Holder a notice of such
adjustment(s) and a certificate of the Chief Financial Officer of the Company,
accompanied by the report thereon by a firm of independent public accountants
selected by the Board of Directors of the Company (who may be the regular
accountants for the Company), setting forth in reasonable detail (i) the number
of Warrant Shares purchasable upon the exercise of each Warrant and the Exercise
Price of such Warrant after such adjustment(s), (ii) a brief statement of the
facts requiring such adjustment(s) and (iii) the computation by which such
adjustment(s) was made.
6.4 No Adjustment for Dividends. Except as provided in Section 6.1
hereof, no adjustment in respect of any dividends or other payments or
distributions made to holders of securities issuable upon exercise of Warrants
shall be made during the term of a Warrant or upon the exercise of a Warrant.
6.5 Preservation of Purchase Rights Upon Merger, Consolidation, etc. In
case of any consolidation of the Company with or merger of the Company into
another person (whether or not the Company is the surviving corporation), or in
the case of any sale, transfer or lease to another person of all or
substantially all the property of the Company, the Company or such successor or
purchasing person, as the case may be, shall deliver to the Holder an
undertaking that the Holder shall have the right thereafter upon payment of the
Exercise Price in effect immediately prior to such action to purchase upon
exercise of each Warrant the kind and amount of securities, cash and property
which the Holder would have owned or have been entitled to receive after the
happening of such consolidation, merger, sale, transfer or lease had such
Warrant been exercised immediately prior to such action, and if the successor or
purchasing person is not a corporation, such person shall provide appropriate
tax indemnification with respect to such shares and other securities and
property so that, upon exercise of the Warrants, the Holder thereof would have
the same benefits he otherwise would have had if such successor or purchasing
person were a corporation. Such undertaking shall provide for adjustments, which
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Section 6. The provisions of this Section 6.5 shall similarly apply
to successive consolidations, mergers, sales, transfers or leases.
6.6 Statement on Warrants. Irrespective of any adjustments in the
number or kind of securities purchasable upon the exercise of the Warrants or
the Exercise Price, any Warrant Certificate theretofore or thereafter issued may
continue to express the same price and number and kind of shares as are stated
in this Warrant Certificate.
SECTION 7. Fractional Interests. The Company shall issue, upon request
of the Holder, fractional Warrant Shares on the exercise of Warrants. If more
than one Warrant shall be presented for exercise in full at the same time by a
Holder, the exercise thereof shall be computed on the basis of the aggregate
number of Warrant Shares purchasable on exercise of the Warrants so presented.
If any fraction of a Warrant Share would be issuable on the exercise of any
Warrant (or specified portion thereof), the Company may, in its sole discretion,
issue such fraction of a Warrant Share or pay to the Holder of the Warrant an
amount in cash equal to the then current market price per share of Common Stock
computed as of the trading day immediately preceding the date the Warrant is
presented for exercise, multiplied by such fraction (but in no event less than
an amount equal to such fraction multiplied by the Exercise Price in effect at
such time) or if the Common stock is not then currently traded such amount as
the Board of Directors of the Company shall in good faith determine.
SECTION 8. Registration Rights.
8.1 General. The Company has agreed that after the 60th day following
the date hereof, the Company shall file a registration statement with the
Securities and Exchange Commission (the "Commission") under the Securities Act
providing for the public sale of all of the Warrant Shares.
8.2 Procedures. The following provisions shall also be applicable to
any such registration statement utilized pursuant to this Section 8:
(i) The registered holders whose shares of Warrant Shares are
to be included in any such registration statement (the "Sellers") shall
furnish the Company with such appropriate information (relating to the
intentions of such holders) in connection therewith as the Company
shall reasonably request in writing. Following the effective date of
the registration statement, the Company shall upon the request of any
Seller forthwith supply such reasonable number of prospectuses meeting
the requirements of the Securities Act as shall be requested by such
Seller to permit such Seller to make a public offering of all the
securities of such Seller included therein. The Company shall use
reasonable efforts (i) to keep such registration statement current
until resales of such securities are permitted pursuant to Rule 144
under the Securities Act (or, if earlier, until all such securities are
sold pursuant to the registration statement); (ii) to qualify such
securities for sale in such states as the Sellers shall reasonably
designate at the cost and expense of the Company provided that no such
qualification shall be required in any jurisdiction where, as a result
thereof, the Company would be subject to service of general process or
to taxation as a foreign corporation doing business in such
jurisdiction to which it is not then subject; and (iii) to qualify such
offering, at the cost and expense of the Company with the National
Association of Securities Dealers, Inc., if applicable.
(ii) The Company shall indemnify and hold harmless each Seller
and each underwriter, within the meaning of the Securities Act, who may
purchase from or sell for any Seller any Warrant Shares from and
against any and all loss, liability, claim, damage and expense
whatsoever (including, but not limited to, any and all expenses
whatsoever reasonably incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim
whatsoever) arising out of any untrue statement or alleged untrue
statement of a material fact contained in the registration statement or
any amendment thereto or any prospectus included therein required to be
filed or furnished by reason of this Section 8, or caused by any
omission or alleged omission to state therein a material fact requiring
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading,
except insofar as such loss, liability, claim, damage or expense is
caused by any such untrue statement or alleged untrue statement or
omission or alleged omission based upon information furnished in
writing to the Company by such Seller or underwriter expressly for use
therein, which indemnification shall include each person, if any, who
controls any such Seller or underwriter within the meaning of the
Securities Act; provided, however, that the indemnity agreement by the
Company set forth in this Section 8 with respect to any such prospectus
which shall be subsequently amended prior to the written confirmation
of the sale of any such Shares, shall not inure to the benefit of any
Seller or underwriter from whom the person asserting any such loss,
liability, claim, damage or expense purchased the Shares which are the
subject thereof (or to the benefit of any person controlling such
Seller or underwriter), if such Seller or underwriter failed to send or
give a copy of the prospectus as so amended to such person at or prior
to the written confirmation of the sale of such Shares to such person
and if the amended prospectus did not contain any untrue statement or
alleged untrue statement or omission or alleged omission giving rise to
such loss, liability, claim, damage or expense.
(iii) Such Seller and underwriter shall at the same time
indemnify the Company, their respective directors, each officer signing
the related registration statement and each person, if any, who
controls the Company, within the meaning of the Securities Act, from
and against any and all loss, liability, claim, damage and expense
whatsoever (including, but not limited to, any and all expenses
whatsoever reasonably incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim
whatsoever) arising out of any untrue statement of a material fact
contained in any registration statement or any prospectus required to
be filed or furnished by reason of this Section 8 or caused by any
omission or alleged omission to state therein a material fact to be
stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, insofar
as such loss, liability, claim, damage or expense is caused by any
untrue statement or alleged untrue statement or omission or alleged
omission based upon information furnished in writing to the Company by
any such seller or underwriter expressly for use therein.
SECTION 9. No Rights as Stockholders; Notices to Holder. Nothing
contained in this Warrant Certificate shall be construed as conferring upon the
Holder or its transferees the right to vote or to receive dividends (except as
provided in Section 6 hereof) or to consent or to receive notice as stockholders
in respect of any meeting of stockholders of the Company for the election of the
directors of the Company or any other matter, or any rights whatsoever as
stockholders of the Company. If, however, at any time prior to the expiration of
the Warrants and prior to their exercise, any of the following events shall
occur:
(a) the Company shall declare any dividend payable in cash or
in any securities upon its shares of Common Stock or make any
distribution to the holders of its shares of Common Stock;
(b) the Company shall offer to all holders of its shares of
Common Stock any additional shares of Common Stock or securities
convertible into or exchangeable for shares of Common Stock or any
right to subscribe for or purchase any thereof;
(c) a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation, merger, sale, transfer
or lease of all or substantially all of its property, assets and
business as an entirety) shall be proposed; or
(d) any consolidation or merger to which the Company is a
party and for which approval of the holders of Common Stock is
required, or of the conveyance or transfer of the properties and assets
of the Company as, or substantially as, an entirety, or of any
reclassification or change of outstanding shares of Common Stock
issuable upon exercise of the Warrants (other than a change in par
value to no par value, or from no par value to par value) or as a
result of a subdivision or combination.
then in any one or more of said events, the Company shall give to the Holder by
registered mail (return receipt requested) at least 20 days prior to the
applicable record date hereinafter specified, a written notice stating (i) the
date as of which the holders of record of shares of Common Stock to be
entitled to receive any such dividends, distributions, rights or warrants are to
be determined or (ii) the date on which any such dissolution, liquidation,
winding up, consolidation, merger, conveyance or transfer is expected to become
effective and the date as of which it is expected that holders of record of
shares of Common Stock shall be entitled to exchange their shares of Common
Stock for securities or other property, if any, deliverable upon such
reclassification, consolidation, merger, conveyance, transfer, dissolution,
liquidation, or winding up. Failure to mail or receive such notice or any defect
therein or in the mailing thereof shall not affect the validity of any action
taken in connection with such dividend, distribution or subscription rights, or
such proposed dissolution, liquidation, winding up, consolidation, merger,
conveyance, transfer or reclassification.
SECTION 10. Identity of Transfer Agent. Forthwith upon the appointment
of any Transfer Agent for the Common Stock, or any other shares of the Company's
capital stock issuable upon the exercise of the Warrants, the Company shall
promptly notify the Holder of the name and address of such Transfer Agent.
SECTION 11. Notices. Any notice, except as provided in Section 9 of
this Warrant Certificate, or demand authorized by this Warrant Certificate to be
given by the Holder to the Company, shall be in writing and shall be delivered
in person or by facsimile transmission, or mailed by first class mail, postage
prepaid, to the Company, at ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇. The Company may change the address to which notices to it are to be
delivered or mailed hereunder by notice to the Holder.
Any notice pursuant to this Warrant Certificate by the Company to the
Holder shall be in writing and shall be mailed by first class mail, postage
prepaid, or otherwise delivered, to the Holder at its address on the books of
the Warrant Register.
Notices delivered personally shall be effective at the time delivered
by hand, notices sent by mail shall be effective two days after mailing, notices
sent by facsimile transmission shall be effective when receipt is acknowledged
and notices sent by courier guaranteeing next day delivery shall be effective on
the next business day after timely delivery to the courier.
SECTION 12. Supplements and Amendments. This Warrant Certificate may
not be supplemented, amended or otherwise modified without the prior written
consent of the Holder.
SECTION 13. Successors. All the covenants and provisions of this
Warrant Certificate by or for the benefit of the Company shall bind and inure to
the benefit of its respective successors and assigns hereunder.
SECTION 14. Merger or Consolidation of the Company. The Company will
not merge or consolidate with or into, or sell, transfer or lease all or
substantially all of its property to, any other corporation unless the
successor, transferee or lessee corporation, as the case may be (if not the
Company), shall expressly assume that due and punctual performance and
observance of each and every covenant and condition of this Warrant Certificate
to be performed and observed by the Company.
SECTION 15. Applicable Law. This Warrant Certificate and the Warrants
evidenced hereby shall be governed by and construed in accordance with the laws
of the State of New York, without giving effect to principles of conflict of
laws. The Company and the Holder agree to submit to the jurisdiction of the
courts of the State of New York in any action or proceeding arising out of or
relating to this Warrant Certificate and the Warrants evidenced hereby.
SECTION 16. Benefits of this Warrant Certificate. Nothing in this
Warrant Certificate shall be construed to give to any person or entity other
than the Company and the Holder any legal or equitable right, remedy or claim
under this Warrant Certificate; and this Warrant Certificate shall be for the
sole and exclusive benefit of the Company and the Holder.
SECTION 17. Captions. The captions of the Sections and paragraphs of
this Warrant Certificate have been inserted for convenience only and shall have
no substantive effect.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed as of this 19th day of September, 1997.
ALL AMERICAN FOOD GROUP, INC.
By:
-----------------------------------
Name:
Title:
PURCHASE FORM
(To be executed upon exercise of Warrant)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase __________ shares of Common
Stock as provided for herein and herewith tenders in payment for such shares of
Common Stock payment of the purchase price in full in the form of cash or a bank
check payable to the order of All American Food Group, Inc. or a combination
thereof in the amount of $________, all in accordance with the terms hereof. The
undersigned requests that a certificate for such shares of Common Stock be
registered in the name of _________________________ whose address is
______________________________________ and that such certificate shall be
delivered to ____________________ whose address is
________________________________________. If said number of shares of Common
Stock is less than all of the shares of Common Stock purchasable hereunder, the
undersigned requests that a new Warrant Certificate representing the right to
purchase the remaining balance of the shares of Common Stock be registered in
the name of ______________________ whose address is
________________________________ and that such certificate shall be delivered to
_____________________ whose address is
_________________________________________.
Dated:
--------------------------
--------------------------
(Insert social security or other
identifying number of holder)
Signature. . . . . . . . . . . . . . . . . .
Note: Signature must conform in all
respects to name of holder as
specified on the face of this
Warrant Certificate in every
particular, without alteration or
enlargement or any change
whatsoever, unless this Warrant
Certificate has been assigned.
ASSIGNMENT
(To be executed only upon assignment of the Warrant Certificate)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto __________________________________________ (Name and Address of Assignee
Must Be Printed or Typewritten) the within Warrant Certificate, together with
all right, title and interest therein, and does hereby irrevocably constitute
and appoint ______________________, Attorney, to transfer said Warrant
Certificate on the books of the within-named Company, with full power of
substitution in the premises.
Dated: ___________________, 19__
. . . . . . . . . . . . . . . . . . . . . .
Signature of Registered Holder
Note: The above signature must correspond
with the name as written on the
face of this Warrant Certificate in
every particular, without
alteration or enlargement or any
change whatever.