Exhibit 4.1
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SECURITIES PURCHASE AGREEMENT
Among
AGRIBIOTECH, INC.,
and
THE PURCHASERS LISTED ON SCHEDULE I
Dated as of December 30, 1998
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SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (this "Agreement") is dated as of
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December 30, 1998 among AgriBioTech, Inc., a Nevada corporation (the "Company"),
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and the various purchasers identified and listed on Schedule I hereto (each
referred to herein as a "Purchaser" and, collectively, the "Purchasers").
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WHEREAS, subject to the terms and conditions set forth in this
Agreement, the Company desires to sell to the Purchasers, and the Purchasers
desire to acquire from the Company, an aggregate of $_________ principal amount
of 5% Convertible Debentures due 2001 (the "Debentures"), in the form of Exhibit
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A annexed hereto, and warrants (the "Warrants") to purchase the Company's common
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stock, par value $.001 per share (the "Common Stock"), in the form of Exhibit B
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annexed hereto, each in the amount specified in Schedule I hereto; and
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WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering an Amended and
Restated Registration Rights Agreement substantially in the form of Exhibit C
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attached hereto (the "Registration Rights Agreement") pursuant to which the
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Company has agreed to provide certain registration rights under the Securities
Act and the rules and regulations promulgated thereunder, and applicable state
securities laws.
NOW THEREFORE, in consideration of the promises and mutual covenants
and agreements hereinafter, the Company and the Purchasers hereby agree as
follows:
ARTICLE I.
PURCHASE AND SALE OF THE DEBENTURES AND WARRANTS
1.1 Purchase and Sale. Subject to the terms and conditions set forth
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herein, the Company shall issue and sell to each Purchaser, and each Purchaser,
severally and not jointly, shall purchase from the Company on the Closing Date
(as defined below), the principal amount of Debentures and Warrants as set forth
for such Purchaser on Schedule I.
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1.2 Closing.
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a. The Closing. The closing of the purchase and sale of the
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Debentures and Warrants (the "Closing")
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shall take place at the offices of Akin, Gump, Strauss, ▇▇▇▇▇ &
▇▇▇▇, L.L.P., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or by transmission
by facsimile and overnight courier, immediately following the execution hereof
or such later date or different location as the parties shall agree, but not
prior to the date that the conditions set forth in Section 4.1 have been
satisfied or waived by the appropriate party (the "Closing Date"). At the
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Closing:
(i) Each Purchaser shall deliver, as directed by the Company,
its portion of the purchase price as set forth next to its name on Schedule I in
United States dollars in immediately available funds to an account or accounts
designated in writing by the Company;
(ii) The Company shall deliver to each Purchaser a Debenture,
substantially in the form of Exhibit A hereto, representing the principal amount
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purchased by such Purchaser as set forth on Schedule I hereto;
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(iii) The Company shall deliver to each Purchaser a Warrant,
substantially in the form of Exhibit B hereto, representing the right to acquire
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the number of shares of Common Stock purchased by such Purchaser as set forth on
Schedule I hereto; and
(iv) The parties shall execute and deliver each of the
documents referred to in Section 4.1 hereof.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES
2.1 Representations, Warranties and Agreements of the Company. The
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Company hereby makes the following representations and warranties to each of the
Purchasers:
a. Organization and Qualification. The Company is a corporation duly
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incorporated, validly existing and in good standing under the laws of the State
of Nevada, with the requisite corporate power and authority to own and use its
properties and assets and to carry on its business as currently conducted.
Except as set forth on Schedule 2.1(a), the Company has no subsidiaries
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(collectively, the "Subsidiaries"). Each of the Subsidiaries (which for
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purposes of this Agreement means any entity in which the Company, directly or
indirectly, owns the majority of such entity's capital stock or holds an
equivalent equity or similar interest) is a corporation duly incorporated,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, with the full corporate power and authority to own and use its
properties and assets and to carry on its business as currently conducted. Each
of the Company and the Subsidiaries is duly qualified as a foreign corporation
to do business and is in good standing as a foreign corporation in each
jurisdiction in which the nature of the business conducted or property owned by
it makes such qualification necessary, except where the failure
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to be so qualified or in good standing, as the case may be, would not,
individually or in the aggregate, (x) adversely affect the legality, validity or
enforceability of any of this Agreement or the Transaction Documents (as defined
in Section 2.1(b)) or any of the transactions contemplated hereby or thereby,
(y) have or result in a material adverse effect on the results of operations,
assets, prospects, or financial condition of the Company and its Subsidiaries,
taken as a whole or (z) adversely impair the Company's ability to perform fully
on a timely basis its obligations under any Transaction Document (any of (x),
(y) or (z), being a "Material Adverse Effect").
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b. Authorization; Enforcement. The Company has the requisite
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corporate power and authority to enter into and to consummate the transactions
contemplated by this Agreement and the Debentures, the Warrants and the
Registration Rights Agreement (collectively, the "Transaction Documents"), and
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otherwise to carry out its obligations hereunder and thereunder. The execution
and delivery of each of this Agreement and the Transaction Documents by the
Company and the consummation by it of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action and no
further action is required by the Company, its Board of Directors or its
stockholders. Each of this Agreement and the Transaction Documents has been duly
executed by the Company and when delivered in accordance with the terms hereof
will constitute the valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally the enforcement
of, creditors' rights and remedies or by other equitable principles of general
application.
c. Capitalization. As of the date hereof, the authorized capital
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stock of the Company is as set forth in Schedule 2.1(c). All of such outstanding
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shares of capital stock have been, or upon issuance will be, validly authorized
and issued, fully paid and nonassessable and were issued in accordance with the
registration or qualification provisions of the Securities Act, or pursuant to
valid exemptions therefrom. Except as disclosed in Schedule 2.1(c), (i) no
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shares of the Company's capital stock are subject to preemptive rights or any
other similar rights or any liens or encumbrances suffered or permitted by the
Company, nor is any holder of the Common Stock entitled to preemptive or similar
rights arising out of any agreement or understanding with the Company by virtue
of any Transaction Document, (ii) there are no outstanding options, warrants,
scrips, rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into or exchangeable for, or
giving any Person (as defined below) any right to subscribe for or acquire, any
shares of capital stock of the Company or any of its Subsidiaries, or contracts,
commitments, understandings or arrangements by which the Company or any of its
Subsidiaries is or may become bound to issue additional shares of capital stock
of the Company or any of its Subsidiaries or options, warrants, scrips, rights
to subscribe to, calls or commitments of any character whatsoever relating to,
or securities or rights convertible into, any shares of capital stock of the
Company or any of its Subsidiaries, (iii) there are no outstanding debt
securities, (iv) the Company has not granted or agreed to grant to any Person
any rights (including "piggy-back" registration rights) to have any securities
of the Company registered with the Securities and Exchange Commission (the
"Commission") or any other governmental authority which has not been satisfied
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(except the Registration Rights Agreement), (v) there are no outstanding
securities of the Company or any of its Subsidiaries which contain any
redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries
is or may
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become bound to redeem a security of the Company or any of its Subsidiaries,
(vi) there are no securities or instruments containing anti-dilution or similar
provisions that will be triggered by the issuance of the shares of Common Stock
as described in this Agreement; (vii) the Company does not have any stock
appreciation rights or "phantom stock" plans or agreements or any similar plan
or agreement and (viii) to the best Knowledge (as defined at the end of this
Section 2.1) of the Company and except as specifically disclosed in the SEC
Documents (as defined in Section 2.1(k) hereof), no Person or group of related
Persons beneficially owns (as determined pursuant to Rule 13d-3 promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) or
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has the right to acquire by agreement with or by obligation binding upon the
Company beneficial ownership of in excess of 5% of the Common Stock. "Person"
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means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.
d. Authorization and Validity; Issuance of Shares. The shares of
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Common Stock issuable upon conversion of the Debentures and exercise of the
Warrants (collectively, the "Underlying Shares") are and will at all times
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hereafter continue to be duly authorized and reserved for issuance and the
shares of Common Stock issued upon conversion of the Debentures (the "Debenture
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Shares") and exercise of the Warrants (the "Warrant Shares") will be validly
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issued, fully paid and non-assessable, free and clear of all liens, encumbrances
and Company rights of first refusal, other than liens and encumbrances created
by the Purchasers, (collectively, "Liens") and will not be subject to any
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preemptive or similar rights.
e. No Conflicts. The execution, delivery and performance of this
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Agreement and each of the Transaction Documents by the Company and the
consummation by the Company of the transactions contemplated hereby and thereby
(including the issuance of the Underlying Shares) do not and will not (i)
conflict with or violate any provision of the Company's Certificate of
Incorporation, as amended and as in effect on the date hereof (the "Certificate
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of Incorporation"), the Company's Bylaws, as amended and in effect on the date
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hereof (the "Bylaws") or other charter documents of the Company or any of the
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Subsidiaries, (ii) subject to obtaining the consents referred to in Section
2.1(f), conflict with, or constitute a default (or an event which with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture, patent, patent license or instrument (evidencing a Company
or Subsidiary debt or otherwise) to which the Company or any Subsidiary is a
party or by which any property or asset of the Company or any Subsidiary is
bound or affected, or (iii) result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court or
governmental authority to which the Company or any Subsidiary is subject
(including Federal and state securities laws and regulations and the rules and
regulations of the principal market or exchange on which the Common Stock is
traded or listed) applicable to the Company or any of its Subsidiaries, or by
which any material property or asset of the Company or any Subsidiary is bound
or affected.
f. Consents and Approvals. Except as specifically set forth on
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Schedule 2.1(f), neither the Company nor any Subsidiary is required to obtain
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any consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other federal, state, local or other
governmental authority, regulatory or self regulatory agency, or other Person
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in connection with the execution, delivery and performance by the Company of
this Agreement or the Transaction Documents, other than (i) the filing of the
Registration Statement (as defined in the Registration Rights Agreement) with
the Commission, which shall be filed in accordance with and in the time periods
set forth in the Registration Rights Agreement, (ii) the application(s) or any
letter(s) acceptable to the National Market System of Nasdaq Stock Market
("Nasdaq") for the listing of the Underlying Shares with Nasdaq (and with any
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other national securities exchange or market on which the Common Stock is then
listed), and (iii) any filings, notices or registrations under applicable state
securities laws (together with the consents, waivers, authorizations, orders,
notices and filings referred to on Schedule 2.1(f), the "Required Approvals").
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g. Litigation; Proceedings. There is no action, suit, notice of
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violation, proceeding or investigation pending or, to the Knowledge of the
Company, threatened against or affecting the Company or any of its Subsidiaries
or any of their respective properties before or by any court, governmental or
administrative agency or regulatory authority (federal, state, county, local or
foreign) which (i) adversely affects or challenges the legality, validity or
enforceability of any of this Agreement or the Transaction Documents or (ii)
would individually or in the aggregate, have a Material Adverse Effect.
h. No Default or Violation. Neither the Company nor any Subsidiary
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(i) is in default under or in violation of any indenture, loan or other credit
agreement or any other agreement or instrument to which it is a party or by
which it or any of its properties is bound, and which is required to be included
as an exhibit to the SEC Documents (as defined in Section 2.1(k) hereof) or will
be required to be included as an exhibit to the Company's next report filed
under the Exchange Act, (ii) is in violation of any order of any court,
arbitrator or governmental body applicable to it, (iii) is in violation of any
statute, rule or regulation of any governmental authority to which it is
subject, (iv) is in default under or in violation of its Certificate of
Incorporation, Bylaws or other organizational documents, respectively, or (v) is
in default under or in violation of any of the listing requirements of Nasdaq as
in effect on the date hereof and is not aware of any facts which would
reasonably lead to delisting or suspension of the Common Stock by Nasdaq in the
foreseeable future. The business of the Company and its Subsidiaries is not
being conducted, and shall not be conducted, in violation of any law, ordinance,
rule or regulation of any governmental entity, except where such violations have
not resulted or would not reasonably result, individually or in the aggregate,
in a Material Adverse Effect.
i. Disclosure; Absence of Certain Changes. Neither this Agreement,
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the Schedules to this Agreement, the Transaction Documents nor the SEC Documents
contains any untrue statement of a material fact or omits to state any material
fact necessary in order to make the statements made herein and therein, in light
of the circumstances under which they were made, not misleading. Except as
disclosed in the SEC Documents filed on ▇▇▇▇▇ at least five business days prior
to the date hereof, since June 30, 1998, there has been no material adverse
change and no material adverse development in the business, properties,
operations, financial condition, liabilities or results of operations or,
insofar as can reasonably be foreseen, prospects of the Company or the
Subsidiaries. The Company has not taken any steps, and does not currently
expect to take any steps, to seek protection pursuant to any bankruptcy law nor
does the Company or any of its Subsidiaries have any Knowledge or reason to
believe that its creditors intend to initiate involuntary bankruptcy
proceedings. No event, liability, development or
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circumstance has occurred or exists, or is reasonably contemplated to occur,
with respect to the Company or its Subsidiaries or their respective businesses,
properties, operations or financial condition or, insofar as can reasonably be
foreseen, prospects, that would be required to be disclosed by the Company under
applicable securities laws on a registration statement (including by way of
incorporation by reference) filed with the Commission, on the date this
representation is made or deemed to be made, relating to an issuance and sale by
the Company of its Common Stock and which has not been publicly disclosed.
j. Private Offering. The Company and all Persons acting on its
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behalf have not directly or indirectly made, and will not make, offers or sales
of any securities or solicited any offers to buy any security under
circumstances that would require registration of the Debentures, the Warrants,
the Debentures Shares, the Warrant Shares or the Underlying Shares or the
issuance of such securities under the Securities Act. The issuance of the
Debentures, the Warrants, the Debenture Shares, the Warrant Shares to the
Purchasers will not be integrated with any other issuance of the Company's
securities (past, current, or future) under the Securities Act or for purposes
of any stockholder approval provision applicable to the Company or its
securities. Subject to the accuracy and completeness of the representations and
warranties of the respective Purchasers contained in Section 2.2 hereof, the
offer and sale by the Company to the Purchasers of the Debentures, the Warrants
and the Underlying Shares is exempt from the registration requirements of the
Securities Act.
k. SEC Documents; Financial Statements. The Common Stock of the
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Company is registered pursuant to Section 12(g) of the Exchange Act. The
Company has filed all reports, schedules, forms, statements and other documents
required to be filed by it with the Commission pursuant to the reporting
requirements of the Exchange Act, including pursuant to Section 13, 14 or 15(d)
thereof (the foregoing materials and all exhibits included therein and financial
statements and schedules thereto and documents (other than exhibits to such
documents) incorporated by reference therein being collectively referred to
herein as the "SEC Documents"), on a timely basis or has received a valid
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extension of such time of filing and has filed any such SEC Documents prior to
the expiration of any such extension. As of their respective dates, the SEC
Documents complied in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, and none of the SEC Documents, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. All agreements to which the Company or any Subsidiary is a party or
to which the property or assets of the Company or any Subsidiary are subject and
which are required to be filed as exhibits to the SEC Documents have been filed
as exhibits to the SEC Documents as required; neither the Company nor any of its
Subsidiaries is in breach of any agreement where such breach, individually or in
the aggregate, would have a Material Adverse Effect. As of their respective
dates, the financial statements of the Company included in the SEC Documents
comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the Commission with
respect thereto as in effect at the time of filing. Such financial statements
have been prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the periods involved,
except as may be otherwise specified in such financial statements or the notes
thereto, and fairly present in all material respects the financial position of
the Company as of and for the dates thereof and
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the results of operations and cash flows for the periods then ended, subject, in
the case of unaudited statements, to normal year-end audit adjustments. Schedule
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2.1(k) contains a complete list of all documents provided to the Purchasers by
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the Company. Except as disclosed on Schedule 2.1(k) and except for third party
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reports, including analyst reports, no written information provided by or on
behalf of the Company to the Purchasers which is not included in the SEC
Documents contains any untrue statement of a material fact or omits to state any
material fact necessary in order to make the statements therein, in the light of
the circumstance under which they are or were made, not misleading. Neither the
Company nor any of its Subsidiaries or any of their officers, directors,
employees or agents have provided the Purchasers with any material, nonpublic
information. The Company acknowledges that the Purchasers will be trading in the
securities of the Company in reliance on the foregoing representation and
warranty.
l. Investment Company. The Company is not, and is not controlled by
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or under common control with an affiliate (an "Affiliate") of an "investment
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company" within the meaning of the Investment Company Act of 1940, as amended.
m. Broker's Fees. No fees or commissions or similar payments with
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respect to the transactions contemplated by this Agreement or the Transaction
Documents have been paid or will be payable by the Company to any broker,
financial advisor, finder, investment banker, or bank, other than as set forth
in Schedule 2.1(m). The Purchasers shall have no obligation with respect to any
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fees or with respect to any claims made by or on behalf of other Persons for
fees of a type contemplated in this Section 2.1(m) that may be due in connection
with the transactions contemplated by this Agreement and the Transaction
Documents.
n. Form S-3 Eligibility. The Company is, and at each Closing Date
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will be, eligible to register securities (including the Underlying Shares) for
resale with the Commission under Form S-3 (or any successor form) promulgated
under the Securities Act.
o. Listing and Maintenance Requirements Compliance. The principal
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market on which the Common Stock is currently traded is Nasdaq. Except as
disclosed on Schedule 2.1(o), the Company has not in the three years preceding
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the date hereof received notice (written or oral) from Nasdaq (or any stock
exchange, market or trading facility on which the Common Stock is or has been
listed (or on which it has been quoted)) to the effect that the Company is not
in compliance with the listing or maintenance requirements of such market or
exchange. The Company is not aware of any facts which would reasonably lead to
delisting or suspension of the Common Stock by Nasdaq. After giving effect to
the transactions contemplated by this Agreement and the Transaction Documents,
the Company believes that it is and will be in compliance with all such
maintenance requirements.
p. Intellectual Property Rights. The Company and its Subsidiaries
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own or possess adequate rights or licenses to use all trademarks, trademark
applications, trade names and service marks, whether or not registered, and all
patents, patent applications, copyrights, inventions, licenses, approvals,
governmental authorizations, trade secrets and intellectual property rights
(collectively, "Intellectual Property Rights") which are necessary for use in
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connection with their respective businesses as now conducted and as described in
the SEC Documents. Except as set forth on Schedule 2.1(p), none of the
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Company's Intellectual Property
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Rights have expired or terminated, or are expected to expire or terminate within
two years from the date of this Agreement. The Company and its Subsidiaries do
not have any Knowledge of any infringement by the Company or its Subsidiaries of
any of the Intellectual Property Rights of others and, except as set forth on
Schedule 2.1(p), there is no claim, action or proceeding which has been made or
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brought against, or to the Company's Knowledge, is being made, brought or
threatened against, the Company or its Subsidiaries regarding the infringement
of any of the Intellectual Property Rights, and the Company and its Subsidiaries
are unaware of any facts or circumstances which might give rise to any of the
foregoing, except where any of the foregoing would not have a Material Adverse
Effect. The Company and its Subsidiaries have taken reasonable security
measures to protect the secrecy, confidentiality and value of all of their
intellectual properties.
q. Employee Relations. Neither the Company nor any of its
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Subsidiaries is involved in any union labor dispute nor, to the Knowledge of the
Company or any of its Subsidiaries, is any such dispute threatened. Neither the
Company nor any of its Subsidiaries is a party to a collective bargaining
agreement, and the Company and its Subsidiaries believe that relations with
their employees are good. Since December 1, 1998, no executive officer (as
defined in Rule 501(f) under the Securities Act) has notified the Company that
such officer intends to leave the Company or otherwise terminate such officer's
employment with the Company.
r. Registration Rights; Rights of Participation. Except as
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described on Schedule 2.1(r) hereto, (i) the Company has not granted or agreed
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to grant to any Person any rights (including "piggy-back" registration rights)
to have any securities of the Company registered with the Commission or any
other governmental authority which has not been satisfied and (ii) no Person,
including, but not limited to, current or former stockholders of the Company,
underwriters, brokers or agents, has any right of first refusal, preemptive
right, right of participation, or any similar right to participate in the
transactions contemplated by this Agreement or any Transaction Document.
s. Title. Except as disclosed on Schedule 2.1(s), the Company and
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the Subsidiaries have good and marketable title in fee simple to all real
property and personal property owned by them which is material to the business
of the Company and its Subsidiaries, in each case free and clear of all Liens,
except for Liens that do not materially affect the value of such property and do
not interfere with the use made and proposed to be made of such property by the
Company and the Subsidiaries. Any real property and facilities held under lease
by the Company and the Subsidiaries are held by them under valid, subsisting
and, to the Company's best Knowledge, enforceable leases with such exceptions as
are not material and do not interfere with the use made and proposed to be made
of such property and buildings by the Company and the Subsidiaries.
t. Permits. The Company and the Subsidiaries possess all
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certificates, authorizations, licenses, easements, consents, approvals, orders
and permits necessary to own, lease and operate their respective properties and
to conduct their respective businesses as currently conducted except where the
failure to possess such permits would not, individually or in the aggregate,
have a Material Adverse Effect ("Material Permits"), and there is no proceeding
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pending, or, to the Knowledge of the Company, threatened relating to the
revocation,
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modification, suspension or cancellation of any Material Permit.
Neither the Company nor any of the Subsidiaries is in conflict with or default
or violation of any Material Permit.
u. Insurance. The Company and each of its Subsidiaries are insured
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by insurers of recognized financial responsibility against such losses and risks
and in such amounts as management of the Company believes to be prudent and
customary in the businesses in which the Company and its Subsidiaries are
engaged. Neither the Company nor any such Subsidiary has any reason to believe
that it will not be able to renew its existing insurance coverages as and when
such coverage expires or to obtain similar coverage from similar insurers as may
be necessary to continue its business, at a cost that would not materially and
adversely affect the condition, financial or otherwise, or the earnings,
business or operations of the Company and its Subsidiaries, taken as a whole.
v. Internal Accounting Controls. The Company and each of the
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Subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with United States generally accepted accounting principles and to
maintain asset accountability, (iii) access to assets is permitted only in
accordance with management's general or specific authorization and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
w. Tax Status; Firpta. Except where extensions have been granted by
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the United States and appropriate state tax authorities for the fiscal year
ended June 30, 1998, the Company and each of the Subsidiaries has made or filed
all federal and state income and all other tax returns, reports and declarations
required by any jurisdiction to which it is subject (unless and only to the
extent that the Company and each of its Subsidiaries has set aside on its books
provisions reasonably adequate for the payment of all unpaid and unreported
taxes) and has paid all taxes and other governmental assessments and charges
that are material in amount, shown or determined to be due on such returns,
reports and declarations, except those being contested in good faith and for
which extensions have been granted by the appropriate tax authority, and has set
aside on it books provisions reasonably adequate for the payment of all taxes
for periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material amount claimed to
be due by the taxing authority of any jurisdiction, and the officers of the
Company know of no basis for any such claim. The Company is not a "United States
real property holding corporation" within the meaning of Section 847(c)(2) of
the Internal Revenue Code of 1986, as amended.
x. Transactions With Affiliates. Except as set forth on Schedule
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2.1(c), none of the officers, directors, or employees of the Company is
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presently a party to any transaction with the Company or any of its Subsidiaries
(other than for services as employees, officers and directors), including any
contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from,
or otherwise requiring payments to or from any officer, director or such
employee or, to the Knowledge of the Company, any corporation, partnership,
trust or entity in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee or partner other than
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transactions that would not require disclosure under Section 404 of Regulation
S-K of the Securities Act and the Exchange Act.
y. Application to Takeover Protection. The Company and its Board of
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Directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination or other
similar anti-takeover provision under the Certificate of Incorporation, Bylaws
or the laws of the state of incorporation which is or could become applicable to
the Purchasers or the Transaction Documents as a result of the transactions
contemplated by this Agreement or the Transaction Documents. None of the
transactions contemplated by this Agreement or the Transaction Documents,
including the conversion of the Debentures and the exercise of the Warrants,
will trigger any poison pill provisions of any of the Company's stockholders'
rights or similar agreements.
z. Environmental Laws. The Company and its Subsidiaries (i) are in
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compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits, licenses or
------------------
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permits, licenses or other approvals except where the
failure of any of the foregoing would not result in a Material Adverse Effect.
aa. Foreign Corrupt Practices. To the Knowledge of the Company,
-------------------------
neither the Company, nor any of its Subsidiaries, nor any director, officer,
agent, employee or other Person acting on behalf of the Company or any of its
Subsidiaries has, in the course of its actions for, or on behalf of, the Company
used any corporate funds for any unlawful contribution, gift, entertainment or
other unlawful expenses relating to political activity; made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee form corporate funds; violated or is in violation of any provision of
the U.S. Foreign Corrupt Practices Act of 1977, as amended; or made any unlawful
bribe, rebate, payoff, influence payment, kickback or other unlawful payment to
any foreign or domestic government official or employee.
bb. Solicitation Materials. The Company has not (i) distributed any
----------------------
offering materials in connection with the offering and sale of the Debentures or
the Warrants, other than the SEC Documents, the Schedules to this Agreement, any
amendments and supplements thereto or (ii) solicited any offer to buy or sell
the Debentures or the Warrants by means of any form of general solicitation or
advertising. Neither the Company, nor any of its Affiliates, nor any Person
acting on its or their behalf, has engaged or will engage in any form of general
solicitation or general advertising (within the meaning of Regulation D under
the Securities Act) in connection with the offer or sale of the Debentures or
Warrants.
cc. Acknowledgement of Dilution. The Company understands and
---------------------------
acknowledges the potentially dilutive effect to the Common Stock upon the
issuance of the Debenture Shares and Warrant Shares upon conversion of the
Debenture or exercise of the Warrants. The Company further acknowledges that its
obligation to issue Debenture Shares and Warrant Shares upon conversion of the
Debentures or exercise of the Warrants in accordance with this Agreement, the
Debentures and the Warrants is absolute and unconditional regardless of the
10
dilutive effect that such issuance may have on the ownership interests of other
stockholders of the Company.
dd. Acknowledgement Regarding Purchasers' Purchase of Securities.
------------------------------------------------------------
The Company acknowledges and agrees that the Purchasers are acting solely in the
capacity of arm's length purchasers with respect to this Agreement and the
transactions contemplated hereby. The Company further acknowledges that no
Purchaser is acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to this Agreement and the transactions
contemplated hereby and any statement made by any Purchaser or any of their
respective representatives or agents in connection with this Agreement and the
transactions contemplated hereby is not advice or a recommendation and is merely
incidental to the Purchasers' purchaser of the securities. The Company further
represents to each Purchaser that the Company's decision to enter into this
Agreement has been based solely on the independent evaluation of the Company and
its representatives.
ee. Solvency. The Company (both before and after giving effect to
--------
the transactions contemplated by this Agreement) is solvent (i.e., its assets
----
have a fair market value in excess of the amount required to pay its probable
liabilities on its existing debts as they become absolute and matured) and
currently the Company has no information that would lead it to reasonably
conclude that the Company would not have the ability to, nor does it intend to
take any action that would impair its ability to, pay its debts from time to
time incurred in connection therewith as such debts mature. The Company did not
receive a qualified opinion from its auditors with respect to its most recent
fiscal year end and does not anticipate or know of any basis upon which its
auditors might issue a qualified opinion in respect of its current fiscal year.
ff. Other Agreements. The Company has not, directly or indirectly,
----------------
made any agreements with any Purchasers relating to the terms and conditions of
the transactions contemplated by the Transaction Documents except as set forth
in the Transaction Documents.
gg. Loan Agreement. As of the close of business on December 30,
--------------
1998, the Company had the ability to borrow an additional $14.1 million under
the Loan and Security Agreement, dated June 23, 1998, among Bankamerica Business
Credit, Inc., as agent and the lenders and administrative agent named therein
(as such agreement may have been amended, modified, or restated, the "Loan
Agreement").
The Purchasers acknowledge and agree that the Company make no
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section 2.1 and in the
Schedules hereto. With respect to the representations and warranties of the
Company herein, "Knowledge" means the actual knowledge after due inquiry of all
executive officers and those persons who have been executive officers during the
past 12 months.
2.2 Representations and Warranties of the Purchasers. Each of the
------------------------------------------------
Purchasers, severally and not jointly, hereby represents and warrants to the
Company as follows:
a. Organization; Authority. Such Purchaser is a corporation,
-----------------------
limited duration company, limited liability company or limited partnership duly
formed, validly existing and in
11
good standing under the laws of the jurisdiction of its incorporation or
formation with the requisite power and authority, corporate or otherwise, to
enter into and to consummate the transactions contemplated hereby and by the
Transaction Documents and otherwise to carry out its obligations hereunder and
thereunder. The purchase by such Purchaser of the Debentures and the Warrants
hereunder has been duly authorized by all necessary action on the part of such
Purchaser. Each of this Agreement and the Registration Rights Agreement has
been duly executed and delivered by such Purchaser and constitutes the valid and
legally binding obligation of such Purchaser, enforceable against such Purchaser
in accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights generally and to general principles
of equity.
b. Investment Intent. As of the date hereof, such Purchaser is
-----------------
acquiring the Debentures and the Warrants for its own account and not with a
present view to or for distributing or reselling the Debentures, the Warrants,
the Debentures Shares or the Warrant Shares or any part thereof or interest
therein in violation of the Securities Act; provided, however, that by making
-------- -------
the representations herein, such Purchaser does not agree to hold any of the
Debentures, the Warrants, the Debentures Shares or the Warrant Shares for any
minimum or other specific term and reserves the right to dispose of the
securities at any time in accordance with or pursuant to a registration
statement or an exemption under the Securities Act.
c. Purchaser Status. At the time such Purchaser was offered the
----------------
Debentures and the Warrants, and at each Closing Date, (i) it was and will be an
"accredited investor" as defined in Rule 501 under the Securities Act and (ii)
such Purchaser, either alone or together with its representatives, had and will
have such knowledge, sophistication and experience in business and financial
matters so as to be capable of evaluating the merits and risks of the
prospective investment in the Debentures and the Warrants.
d. Reliance. Such Purchaser understands and acknowledges that (i)
--------
the Debentures and the Warrants are being offered and sold to such Purchaser
without registration under the Securities Act in a private placement that is
exempt from the registration provisions of the Securities Act under Section 4(2)
of the Securities Act or Regulation D promulgated thereunder and (ii) the
availability of such exemption depends in part on, and the Company will rely
upon the accuracy and truthfulness of, the representations set forth in this
Section 2.2 and such Purchaser hereby consents to such reliance.
e. Information. Such Purchaser 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 Debentures
and Warrants which have been requested by such Purchaser or its advisors. Such
Purchaser and its advisors, if any, have been afforded the opportunity to ask
questions of the Company. Neither such inquiries nor any other due diligence
investigation conducted by Purchaser or any of its advisors or representatives
shall modify, amend or affect Purchaser's right to rely on the Company's
representations and warranties contained in Section 2.1 above. Such Purchaser
understands that its investment in the Debentures and Warrants involves a
significant degree of risk.
12
f. Governmental Review. Such Purchaser understands that no United
-------------------
States federal or state agency or any other government or governmental agency
has passed upon or made any recommendation or endorsement of the Debentures or
Warrants.
g. Residency. Such Purchaser is a resident of the jurisdiction set
---------
forth immediately below such Purchaser's name on Schedule II hereto.
The Company acknowledges and agrees that the Purchasers make no
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section 2.2.
ARTICLE III.
OTHER AGREEMENTS
3.1 Transfer Restrictions.
---------------------
a. If any Purchaser should decide to dispose of the Debentures, the
Warrants, the Debentures Shares or the Warrant Shares held by it, each Purchaser
understands and agrees that it may do so only pursuant to an effective
registration statement under the Securities Act, to the Company or pursuant to
an available exemption from the registration requirements of the Securities Act
or Rule 144 promulgated under the Securities Act ("Rule 144"). The Company shall
--------
announce any material non-public information that it legally is required to
announce on or prior to the Effectiveness Date (as defined in the Registration
Rights Agreement) of the registration statement filed pursuant to the
Registration Rights Agreement and shall not enter into any subsequent non-
disclosure agreements that would prevent it from announcing any such information
that otherwise legally could have been announced on or prior to the
Effectiveness Date, unless confidential treatment for such information is
granted by the SEC. In connection with any transfer of any Debentures, Warrants,
Debenture Shares or Warrant Shares other than pursuant to an effective
registration statement, Rule 144 or to the Company, the Company may require the
transferor thereof to provide to the Company a written opinion of counsel
experienced in the area of United States securities laws selected by the
transferor, the form and substance of which opinion shall be customary for
opinions of counsel in comparable transactions, to the effect that such transfer
does not require registration of such transferred securities under the
Securities Act; provided, however, that if the Debentures, Warrants, Debenture
-------- -------
Shares or Warrant Shares may be sold pursuant to Rule 144(k), no written opinion
of counsel shall be required from the Purchaser if such Purchaser provides
reasonable assurances that such security can be sold pursuant to Rule 144(k).
Notwithstanding the foregoing, the Company hereby consents to and agrees to
register any transfer by any Purchaser to an Affiliate of such Purchaser,
provided that the transferee certifies to the Company that it is an "accredited
investor" as defined in Rule 501(a) under the Securities Act. Any such
transferee shall agree in writing to be bound by the terms of this Agreement and
shall have the rights of a Purchaser under this Agreement and the Transaction
Documents. Notwithstanding the foregoing or anything else contained herein to
the contrary, the securities may be pledged as collateral in connection with a
bona fide margin account or other lending arrangement.
13
b. Each Purchaser agrees to the imprinting, so long as is required
by this Section 3.1(b), of the following legend on the Debentures, the Warrants,
the Debenture Shares and the Warrant Shares:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
Neither the Debentures, the Warrants, the Debenture Shares, nor the
Warrant Shares shall contain the legend set forth above (i) at any time while a
registration statement is effective under the Securities Act covering such
security, (ii) if in the written opinion of counsel to the Company experienced
in the area of United States securities laws such legend is not required under
applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the Commission) or
(iii) if such Debentures, Warrants, Debenture Shares or Warrant Shares may be
sold pursuant to Rule 144. The Company agrees that it will provide each
Purchaser, upon request, with a certificate or certificates representing
Debentures, Warrants, Debenture Shares or Warrant Shares, free from such legend
at such time as such legend is no longer required hereunder.
3.2 Stop Transfer Instruction. The Company may not make any notation on
-------------------------
its records or give instructions to any transfer agent of the Company which
enlarge the restrictions on transfer set forth in Section 3.1.
3.3 Furnishing of Information. As long as any Purchaser owns the
-------------------------
Debentures, the Warrants, the Debenture Shares or the Warrant Shares, the
Company will cause the Common Stock to continue at all times to be registered
under Section 12(g) of the Exchange Act, will timely file (or obtain extensions
in respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof pursuant to Section
13, 14 or 15(d) of the Exchange Act and promptly furnish, but in no event later
than two (2) business days after the filing thereof with the Commission, the
Purchasers with true and complete copies of all such filings, and will not take
any action or file any document (whether or not permitted by the Exchange Act or
the rules thereunder) to terminate or suspend such reporting and filing
obligations. The Company further covenants that it will take such further
action as any holder of the Debentures, the Warrants, the Debenture Shares or
the Warrant Shares may reasonably request, all to the extent required from time
to time to enable such Person to sell the Debentures, the Warrants, the
Debenture Shares, or the Warrant Shares without registration under the
Securities Act within the limitation of the exemptions provided by Rule 144
promulgated under the Securities Act.
3.4 Blue Sky Laws. In accordance with the Registration Rights Agreement,
-------------
the Company shall qualify the Debentures Shares and the Warrant Shares under the
securities or
14
Blue Sky laws of such jurisdictions as the Purchasers may request and shall
continue such qualification at all times through the resale of all Debenture
Shares or Warrant Shares, but in any event not past the fourth anniversary of
the Closing Date.
3.5 Integration. The Company shall not sell, offer for sale or solicit
-----------
offers to buy or otherwise negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the offer or sale
of the Debentures, the Warrants, the Debenture Shares or the Warrant Shares in a
manner that would require the registration under the Securities Act of the sale
of the Debentures, the Warrants, the Debenture Shares or the Warrant Shares to
any Purchaser or cause the offering of such securities to be integrated with any
other offering of securities by the Company for the purpose of any stockholder
approval provision applicable to the Company or its securities.
3.6 Listing and Reservation of Debenture Shares and Warrant Shares.
--------------------------------------------------------------
a. The Company shall (i) file with Nasdaq (as well as any other
national securities exchange or market on which the Common Stock is then
listed), as and when required, an additional shares listing application or a
letter acceptable to Nasdaq covering and listing a number of shares of Common
Stock which is at least equal to the aggregate amount of Underlying Shares sold
or deemed to be sold in the Closing, (ii) take all steps necessary to cause the
Underlying Shares to be approved for listing on Nasdaq (as well as on any other
national securities exchange or market on which the Common Stock is then listed)
as soon as possible thereafter, (iii) maintain, so long as any other shares of
Common Stock shall be so listed, such listing of all such Underlying Shares, and
(iv) provide to the Purchasers evidence of such listing. Neither the Company nor
any of its Subsidiaries shall take any action which may result in the delisting
or suspension of the Common Stock on Nasdaq. The Company shall promptly provide
to each Purchaser copies of any notices it receives from Nasdaq regarding the
continued eligibility of the Common Stock for listing on such automated
quotation system, so long as such notice does not include material, nonpublic
information. The Company shall say all fees and expenses in connection with
satisfying its obligations under this Section 3.6(a).
b. The Company at all times shall reserve a sufficient number of
shares of its authorized but unissued Common Stock to provide for the full
conversion of the outstanding Debentures and full exercise of the outstanding
Warrants. Shares of Common Stock reserved for issuance upon conversion of the
Debentures and the exercise of the Warrants shall be allocated pro rata to each
of the Purchasers in accordance with the amount of Debentures and Warrants
issued and delivered to such Purchaser at the Closing. If at any time the
number of shares of Common Stock authorized and reserved for issuance is below
the number of Debenture Shares and Warrant Shares issued and issuable upon
conversion of the Debentures and exercise of the Warrants (based on the
Conversion Price (as defined in the Debentures) of the Debentures in effect from
time to time and the Exercise Price (as defined in the Warrants) of the Warrants
in effect from time to time) without regard to any limitation on conversions or
exercises, the Company will promptly take all corporate action necessary to
authorize and reserve a sufficient number of shares, including, without
limitation, calling a special meeting of stockholders to authorize additional
shares to meet the Company's obligations under this Section 3.6(b), in the case
of an insufficient number of authorized shares, and using its best efforts to
obtain stockholder approval of an increase in such authorized number of shares.
In addition, if, at any
15
time within the 45-day period preceding a reset of the Conversion Price pursuant
to the terms of Section 5.2 of the Debentures, the closing bid price per share
of the Common Stock on Nasdaq (or any Subsequent Market (as defined in the
Debenture) on which the Common Stock is then listed, or if there is no such
price on such date, then the closing bid price on such exchange or quotation
system on the date nearest preceding such date) is less than $9.50 for any
consecutive five (5) Trading Day period, the Company shall be required to file
within five (5) business days after such five (5) Trading Day period a
registration statement covering the greater of (a) the product of (i) one and
one-half (1.5) and (ii) the aggregate number of Underlying Shares that would be
issuable based on a Conversion Price equal to the average closing bid price
during such five (5) Trading Day period, less the number of Underlying Shares
for which a registration statement is then effective or (b) the aggregate number
of Underlying Shares, calculated as if the Conversion Price (as defined in the
Debentures) was reset on such fifth day pursuant to the terms of Section 5.2 of
the Debentures, less the number of Underlying Shares for which a registration
statement is then effective; provided, however, that if on the actual reset date
-------- -------
(pursuant to Section 5.2 of the Debentures) the registration statements are
insufficient to register all Underlying Shares (after giving effect to such
reset), the Company shall immediately, but in no more than five (5) business
days thereafter, file a registration statement sufficient to register such
additional shares of Common Stock. All calculations of the above amount shall be
made without regard to any limitation on conversions of Debentures or exercises
of Warrants.
3.7 Notice of Breaches.
------------------
a. The Company and each Purchaser shall give prompt written notice
to the other of any breach by it of any representation, warranty or other
agreement contained in this Agreement or in the Transaction Documents, as well
as any events or occurrences arising after the date hereof and prior to the
Closing Date, which would reasonably be likely to cause any representation or
warranty or other agreement of such party, as the case may be, contained herein
to be incorrect or breached as of the Closing Date provided such notice will not
constitute material non-public information. However, no disclosure by either
party pursuant to this Section 3.7 shall be deemed to cure any breach of any
representation, warranty or other agreement contained herein or in the
Transaction Documents.
b. Notwithstanding the generality of Section 3.7(a), the Company
shall promptly notify, provided such notification will not constitute material
non-public information, each Purchaser of any notice or claim (written or oral)
that it receives from any lender of the Company or any Subsidiary to the effect
that the consummation of the transactions contemplated hereby and by the
Transaction Documents violates or would violate any written agreement or
understanding between such lender and the Company or any Subsidiary, and the
Company shall promptly furnish by facsimile to the Purchasers a copy of any
written statement in support of or relating to such claim or notice.
c. The default by any Purchaser of any of its obligations,
representations or warranties under this Agreement or the Transaction Documents
shall not be imputed to, and shall have no effect upon, any other Purchaser or
affect the Company's obligations under this Agreement or any Transaction
Document to any non-defaulting Purchaser.
16
3.8 Form D; Blue Sky Laws. The Company shall, on or before the
---------------------
Closing Date, take such action as the Company shall reasonably determine is
necessary to qualify the Debentures and Warrants for sale to the Purchasers at
the Closing Date pursuant to this Agreement under applicable securities or
"blue sky" laws of the states of the United States (or to obtain an exemption
from such qualification), and shall provide evidence of any such action so taken
to each Purchaser on or prior to the applicable Closing.
3.9 Future Financings.
-----------------
a. Except for (i) issuance of the Underlying Shares; (ii) shares of
Common Stock deemed to have been issued by the Company in connection with any
contract, plan or agreement which has been approved by the Board of Directors of
the Company, pursuant to which the Company's securities may be issued to any
employee, officer, director or consultant of the Company; (iii) shares of Common
Stock issuable upon the exercise of any options or warrants outstanding on the
date hereof and listed in Schedule 2.1(c) hereto; or (iv) shares of Common Stock
issued or deemed to have been issued as consideration for an acquisition by the
Company of a division, assets or business (or stock constituting any portion
thereof) from another Person, if the Company agrees to issue shares of Common
Stock or other securities convertible into or exchangeable or exercisable for
Common Stock (the "New Security") while any Debentures are outstanding at (a) an
------------
effective price per share which is less or may be less (including, without
limitation, any security which is convertible into or exchangeable or
exercisable for Common Stock at a price which may change with the market price
of the Common Stock) than an amount equal to the Conversion Price (as defined in
the Debentures) of the Debentures as of the date thereof or (b) an effective
price per share greater than the Conversion Price but less than the Average
Price (as defined in the Debentures) on the date of such issuance or sale
(either of (a) or (b), a "Future Financing"), the Company shall provide to the
----------------
Purchasers by 5:00 p.m. (New York time) on or before the third (3rd) Trading Day
(as defined below) after the decision to issue the New Security has been made,
written notice of the Future Financing containing in reasonable detail (i) the
proposed terms of the Future Financing, (ii) the amount of the proceeds that
will be raised and (iii) the Person with whom such Future Financing shall be
effected, and attached to which shall be a term sheet or similar document
relating thereto (the "Future Financing Notice"). Upon receiving the Future
-----------------------
Financing Notice, each Purchaser shall have the pro rata right (based on the
principal amount of the Debentures held by such Purchaser relative to the
aggregate principal amount of Debentures outstanding) to purchase, on the same
terms as the Future Financing, an amount of New Securities having a purchase
price which shall not exceed the sum of (i) the then outstanding principal
amount of and any interest owing on such Purchaser's Debenture and (ii) the
number of shares of Common Stock which is the product of the Exercise Price (as
defined in the Warrants) multiplied by that number of shares of Common Stock
underlying the outstanding Warrants; provided, however, that thirty (30) Trading
Days after the effectiveness of the Initial Registration Statement (as defined
in the Registration Rights Agreement) and for so long as all registration
statements required under the Registration Rights Agreement are effective, the
Purchasers, in the aggregate, shall be entitled to purchase up to one-half of
the total amount of New Securities being offered pursuant to such Future
Financing Notice. In the event a Purchaser desires to exercise the right
granted under this Section 3.9, such Purchaser must notify the Company on or
prior to the fifth (5th) Trading Day after such Purchaser has received the
Future Financing Notice. In the event the terms and conditions of a
17
proposed Future Financing are amended in any respect after delivery of the
Future Financing Notice but prior to the closing of the proposed Future
Financing to which such Future Financing Notice relates, the Company shall
deliver a new notice to each Purchaser describing the amended terms and
conditions of the proposed Future Financing and each Purchaser thereafter shall
have an option during the five (5) Trading Day period following delivery of such
new notice to purchase its pro rata share (based on the Holder's percentage of
the principal amount of the outstanding Debentures such Holder owns) of the New
Securities being offered on the same terms as contemplated by such proposed
Future Financing, as amended. The foregoing sentence shall apply to successive
amendments to the terms and conditions of any proposed Future Financing. In the
event one or more Purchasers elects not to exercise its rights granted hereby,
the Company shall permit those Purchasers electing to exercise the right granted
under this Section 3.9 to purchase on a pro rata basis equal to its percentage
ownership of the then aggregate outstanding principal of the Debentures, the sum
of the number of shares of Common Stock that the other Purchaser(s) were
eligible to Purchase, if they had exercised their right hereunder. Those
Purchasers desiring to purchase additional shares of Common Stock must notify
the Company of their intention to do so within five (5) Trading Days after the
Company has informed the Purchasers of their right to purchase additional shares
of Common Stock. Within five (5) Trading Days of the termination of the final
notice period, the transactions contemplated by this Section 3.9 shall close and
the Company shall tender to each Purchaser certificates representing the New
Securities that it agreed to purchase and the Purchasers shall make payment for
the entire purchase price in immediately available funds at the closing of such
sale; provided, however, that each Purchaser, in lieu of providing cash as
-------- -------
consideration for the purchase price, may retire all or a portion of the
outstanding principal amount of and any interest owing on the Debentures as
payment of the purchase price for the shares of Common Stock that it desires to
purchase pursuant to this Section 3.9. "Trading Day" shall mean a day on which
-----------
the Nasdaq (or in the event the Common Stock is not traded on Nasdaq, such other
securities market on which the Common Stock is listed) is open for trading.
b. If the Company shall enter into a transaction to issue any New
Securities prior to January 16, 1999 (a "Subsequent Transaction"), each
----------------------
Purchaser shall have the right to have such Purchaser's Transaction Documents
amended to reflect the terms of such Subsequent Transaction and the Company
shall, if requested, issue new Debentures and Warrants to such Purchaser
reflecting the terms of the Subsequent Transaction.
3.10 Use of Proceeds; Repayment; Future Debt. The Company shall use the
---------------------------------------
proceeds from the sale of the Debentures and Warrants for (a) the repayment in
full of the Deutschebank Bridge Loan (as defined in Loan Agreement), (b) the
repayment of $10 million of the $15,000,000 overdraft (the "Overdraft") owed to
---------
all lenders under the Loan Agreement and (c) any excess remaining, for working
capital and pending acquisitions. The Company covenants that immediately upon
receipt of the proceeds hereunder it shall also repay from its funds an
additional $5 million of the Overdraft such that the remaining balance of the
Overdraft immediately after the First Closing is $10 million. The Company
additionally covenants that it shall use all proceeds from future financings to
repay the remaining amount on the Overdraft. In addition the Company shall not
obtain any debt financing with an interest rate of 10% or higher until the
earlier of (i) sixty (60) days after the Closing Date or (ii) the
effectiveness of the Initial Registration Statement (as defined therein)
pursuant to the terms of the Registration Rights Agreement.
18
3.11 Transactions with Affiliates. So long as any Debentures or Warrants
----------------------------
are outstanding, the Company shall not, and shall cause each of its Subsidiaries
not to, enter into, amend, modify or supplement, or permit any Subsidiary to
enter into, amend, modify or supplement, any agreement, transaction, commitment
or arrangement with any Person who is or was an officer or director of the
Company at any time during the previous two years, any Subsidiary's officers or
directors, stockholders who beneficially own 5% or more of the Common Stock, or
Affiliates or with any individual related by blood, marriage or adoption to any
such individual or with any entity in which any such entity or individual owns a
5% or more beneficial interest (each a "Related Party"), except for (a)
-------------
customary employment arrangements and benefit programs on reasonable terms, (b)
any agreement, transaction, commitment or arrangement on an arms-length basis on
terms no less favorable than terms which would have been obtainable from a
Person other than such Related Party, or (c) any agreement, transaction,
commitment or arrangement which is approved by a majority of the disinterested
directors of the Company. For purposes hereof, any director who is also an
officer of the Company or any Subsidiary of the Company shall not be a
disinterested director with respect to any such agreement, transaction,
commitment or arrangement. "Affiliate" for purposes of this section only hereof
---------
means, with respect to any person or entity, another person or entity that,
directly or indirectly, (i) has a 5% or more equity interest in that person or
entity, (ii) has 5% or more common ownership with that person or entity, (iii)
controls that person or entity, or (iv) shares common control with that person
or entity. "Control" or "Controls" for purposes of this section means that a
------- --------
person or entity has the power, direct or indirect, to conduct or govern the
policies of another person or entity.
3.12 Transfer Agent Instructions. At the Closing, the Company shall issue
---------------------------
irrevocable instructions to its transfer agent (and shall issue to any
subsequent transfer agent as required), to issue certificates, registered in the
name of each such Purchaser or its respective nominee(s), for the Debenture
Shares and/or the Warrant Shares in such amounts as specified from time to time
by each Purchaser to the Company in a form acceptable to such Purchaser (the
"Irrevocable Transfer Agent Instructions"). So long as required pursuant to
---------------------------------------
Section 3.1(b), all such certificates shall bear the restrictive legend
specified in Section 3.1(b) of this Agreement. The Company warrants that no
instruction other than the Irrevocable Transfer Agent Instructions referred to
in this Section 3.12, and stop transfer instructions to give effect to Section
3.1 hereof, prior to registration of the Debenture Shares and the Warrant Shares
under the Securities Act, will be given by the Company to its transfer agent and
that the Debentures, the Warrants, the Debenture Shares and the Warrant Shares
shall otherwise be freely transferable on the books and records of the Company
as and to the extent provided in this Agreement and the Transaction Documents.
If a Purchaser provides the Company with an opinion of counsel, in form and
substance reasonably satisfactory to the Company, to the effect that a public
sale, assignment or transfer of the Debentures, the Debenture Shares, the
Warrants and the Warrant Shares may be made without registration under the
Securities Act or the Purchaser provides the Company with reasonable assurances
that the Warrants, the Debenture Shares and the Warrant Shares can be sold
pursuant to Rule 144 without any restriction as to the number of securities
acquired as of a particular date that can then be immediately sold, the Company
shall permit the transfer, and, in the case of the Debenture Shares and the
Warrant Shares, promptly instruct its transfer agent to issue one or more
certificates in such name and in such denominations as specified by such
Purchaser and without any restrictive legend. The Company acknowledges that a
breach by it of its obligations hereunder will cause irreparable harm to the
Purchasers by violating the intent and
19
purpose of the transactions contemplated hereby. Accordingly, the Company
acknowledges that the remedy at law for a breach of its obligations under this
Section 3.12 will be inadequate and agrees, in the event of a beach or
threatened breach by the Company of the provisions of this Section 3.12, that
the Purchasers, shall be entitled, in addition to all other available remedies,
to an order and/or injunction restraining any breach and requiring immediate
issuance and transfer, without the necessity of showing economic loss and
without any bond or other security being required.
3.13 Filing of Form 8-K. Subject to the provisions of Section 6.10 hereof,
------------------
prior to opening of Nasdaq on January 4, 1999, the Company shall file a press
release in form and substance acceptable to the Purchasers. On or before
January 12, 1999, the Company shall file a Form 8-K with the Commission
describing the terms of the transaction contemplated by this Agreement and the
Transaction Documents in the form required by the Exchange Act.
3.14 Financial Information. The Company agrees to send the following to
---------------------
each Purchaser during the Registration Period: (i) within three (3) business
days after the filing thereof with the SEC, a copy of its Annual Reports on Form
10-K, its Quarterly Reports on Form 10-Q, any Current Reports on Form 8-K and
any registration statements or amendments (other than on Form S-8) filed
pursuant to the Securities Act; (ii) on the same day as the release thereof,
facsimile copies of all press releases issued by the Company or any of its
Subsidiaries and (iii) copies of any notices and other information made
available or given to the stockholders of the Company generally,
contemporaneously with the making available or giving thereof to the
stockholders.
3.15 Best Efforts. Each of the parties hereto shall use its reasonable
------------
best efforts to satisfy each of the conditions to be satisfied by it as provided
in Article IV of this Agreement.
3.16 Corporate Existence. Until such time as the Purchasers provide the
-------------------
Company with written notice that they do not beneficially own any Debentures or
Warrants, the Company shall maintain its corporate existence and shall not sell
all or substantially all of the Company's assets, except in the event of a
merger or consolidation or sale of all or substantially all of the Company's
assets, where the surviving or successor entity in such transaction (i) assumes
the Company's obligations hereunder and under the agreements and instruments
entered into in connection herewith and (ii) is a publicly traded corporation
whose common stock is listed for trading on the Nasdaq, the New York Stock
Exchange or the American Stock Exchange.
ARTICLE IV.
CONDITIONS
4.1 Closing Conditions.
------------------
a. Conditions Precedent to the Obligation of the Company to Sell.
-------------------------------------------------------------
The obligation of the Company to sell the Debenture and the Warrants at each
Closing is subject to
20
the satisfaction or waiver (with prior written notice to each Purchaser) by the
Company, at or before each Closing, of each of the following conditions:
(i) Accuracy of the Purchasers' Representations and
-----------------------------------------------
Warranties. The representations and warranties of each Purchaser in this
----------
Agreement shall be true and correct in all material respects as of the date when
made (except for representations and warranties that speak as of a specific
date) and as of each Closing Date;
(ii) Performance by the Purchasers. Each Purchaser shall have
-----------------------------
performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by such Purchaser at or prior to each Closing; and
(iii) No Injunction. No statute, rule, regulation, executive
-------------
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent
jurisdiction which prohibits the consummation of any of the transactions
contemplated by this Agreement or the Transaction Documents.
b. Conditions Precedent to the Obligation of the Purchasers to
-----------------------------------------------------------
Purchase. The obligation of each Purchaser hereunder to acquire and pay for the
--------
Debentures and Warrants is subject to the satisfaction or waiver (with prior
written notice to the Company and each other Purchaser) by such Purchaser, at or
before the Closing, of each of the following conditions:
(i) Accuracy of the Company's Representations and Warranties.
--------------------------------------------------------
The representations and warranties of the Company set forth in this Agreement
shall be true and correct in all respects as of the date when made and as of
each Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date);
(ii) Performance by the Company. The Company shall have
--------------------------
performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Company at or prior to the Closing;
(iii) No Injunction. No statute, rule, regulation, executive
-------------
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent
jurisdiction which prohibits the consummation of any of the transactions
contemplated by this Agreement and the Transaction Documents;
(iv) No Suspensions of Trading in Common Stock. The trading in
-----------------------------------------
the Common Stock on Nasdaq shall not have been suspended by the Commission or
Nasdaq;
(v) Listing of Common Stock. The Common Stock shall have been
-----------------------
at all times since the date hereof, and on the Closing Date shall be, listed
for trading on Nasdaq;
(vi) Required Approvals. All Required Approvals shall have
------------------
been obtained and copies thereof delivered to such Purchaser;
21
(vii) Shares of Common Stock. The Company shall have duly
----------------------
reserved the number of Underlying Shares required by this Agreement and the
Transaction Documents to be reserved for issuance upon conversion of the
Debentures and the exercise of the Warrants;
(viii) Change of Control. No Change of Control shall have
-----------------
occurred between the date hereof and the Closing Date. "Change of Control"
-----------------
means any event or series of events by which (i) any Person or Persons and any
Affiliates of such Person or Persons acting in concert (including a "group" as
such term is used in Section 13(d)(3) of the Exchange Act) shall acquire,
directly or indirectly, through a merger or other transaction, outstanding
shares of voting capital stock of the Company, enabling such Person or Persons
to cast more than 50% of the votes necessary for the election of directors of
the Company or possessing in excess of 50% of the total combined voting power of
the voting capital of the Company, provided, however, that the accumulation of
-------- -------
any voting capital stock of the Company by any Person or Persons listed on the
Company's Form 10-K filed with the Commission for the Company's fiscal year
ending June 30, 1997 as owning five percent (5%) or more of the Company's
outstanding common stock on such date (or by any Affiliates of such Person or
Persons) or by any Person or Affiliate thereof who has filed a Schedule 13D or
13G with the Commission as of the First Closing Date shall not be deemed a
Change of Control; or (ii) during any period of two (2) consecutive years,
individuals who at the beginning of the period constituted the Board of
Directors of the Company (or new directors whose election by the Company's
directors (or whose nomination for election by the Company's stockholders) was
approved by two-thirds (2/3) of the Company's directors then still in office who
were either directors at the beginning of the period or were previously approved
under this procedure) cease to constitute a majority of the Board of Directors
of the Company then in office;
(ix) Transfer Agent Instructions. The Irrevocable Transfer
---------------------------
Agent Instructions, in a form acceptable to the Purchasers, shall have been
delivered and acknowledged in writing by the Company's transfer agent with a
copy forwarded to each Purchaser; and
(x) Resolutions. The Board of Directors of the Company shall
-----------
have adopted resolutions consistent with Section 2.1(b) and in a form reasonably
acceptable to each Purchaser (the "Resolutions").
-----------
c. Documents and Certificates. At the Closing, the Company shall
--------------------------
have delivered to the Purchasers the following in form and substance reasonably
satisfactory to the Purchasers:
(i) Opinion. An opinion of the Company's legal counsel in the
-------
form attached hereto as Exhibit D dated as of the Closing Date;
---------
(ii) Debenture. A Debenture(s) representing the principal
---------
amount of Debentures purchased by such Purchaser as set forth next to such
Purchaser's name on Schedule I, registered in the name of such Purchaser, each
in form satisfactory to the Purchaser;
(iii) Warrant. A Warrant(s) representing the Warrants purchased
-------
by such Purchaser as set forth next to such Purchaser's name on Schedule I,
----------
registered in the name of such Purchaser;
22
(iv) Registration Rights. The Company shall have executed and
-------------------
delivered the Registration Rights Agreement;
(v) Officer's Certificate. An Officer's Certificate dated the
---------------------
Closing Date and signed by an executive officer of the Company confirming the
accuracy of the Company's representations, warranties and covenants as of the
Closing Date and confirming the compliance by the Company with the conditions
precedent set forth in this Section 4.1 as of the Closing Date;
(vi) Secretary's Certificate. A Secretary's Certificate dated
-----------------------
the Closing Date and signed by the Secretary or Assistant Secretary of the
Company certifying (A) that attached thereto is a true and complete copy of the
Certificate of Incorporation of the Company, as in effect on each Closing Date,
(B) that attached thereto is a true and complete copy of the by-laws of the
Company, as in effect on the Closing Date and (C) that attached thereto is a
true and complete copy of the Resolutions duly adopted by the Board of Directors
of the Company authorizing the execution, delivery and performance of this
Agreement and of the Transaction Documents, and that such Resolutions have not
been modified, rescinded or revoked;
(vii) Certificates of Incorporation. The Company shall have
-----------------------------
delivered to each of the Purchasers a copy of a certificate evidencing the
incorporation and good standing of the Company, and the incorporation of
material Subsidiaries, in such corporation's state of incorporation issued by
the Secretary of State of such state of incorporation as of a date within ten
days of the Closing Date. The Company shall have delivered to each of the
Purchasers a copy of its Certificate of Incorporation as certified by the
Secretary of State of the State of Nevada within ten days of the Closing Date;
(viii) Transfer Agent Letter. The Company shall have delivered
---------------------
to each Purchaser a letter from the Company's transfer agent certifying the
number of shares of Common Stock outstanding as of a date within five days of
the Closing Date; and
(ix) Other Documents. The Company shall have delivered to each
---------------
Purchaser such other documents relating to the transactions contemplated by the
Transaction Documents as the Purchasers or its counsel may reasonably request.
ARTICLE V.
INDEMNIFICATION
5.1 Indemnification. Except to the extent that matters which could be
---------------
covered by this Section 5 are covered by Section 5 of the Registration Rights
Agreement, in consideration of the Purchasers execution and delivery of this
Agreement and the Transaction Documents and acquiring the Debentures, Debenture
Shares, Warrants and Warrant Shares thereunder and in addition to all of the
Company's other obligations under this Agreement and the Transaction Documents,
the Company shall defend, protect, indemnify and hold harmless each Purchaser,
its past and present Affiliates and their successors and assigns (in accordance
with the provisions of
23
Section 6.5 hereof), each other holder of the Underlying Shares and all of their
stockholders, officers, directors, employees and direct or indirect investors
and any of the foregoing Person's agents or other representatives (including,
without limitation, those retained in connection with the transactions
contemplated by this Agreement) (collectively, the "Indemnities") from and
against any and all actions, causes of action, suits, claims, losses,
proceedings, costs (as incurred), penalties, fees (including legal fees and
expenses), liabilities and damages, and expenses in connection therewith
(irrespective of whether any such Indemnity is a party to the action for which
indemnification hereunder is sought), and including interest, penalties and
attorneys' fees and disbursements (the "Indemnified Liabilities"), incurred by
any Indemnity as a result of, or arising out of, or relating to (a) any
misrepresentation or breach of any representation or warranty made by the
Company in this Agreement or in the Transaction Documents, or any other
certificate, instrument or document contemplated hereby or thereby, (b) any
breach of any covenant, agreement or obligation of the Company contained in this
Agreement or the Transaction Documents, or any other certificate, instrument or
document contemplated hereby or thereby, or (c) any cause of action, suit or
claim brought or made, other than by the Company, against such Indemnity and
arising out of or resulting from (i) the execution, delivery, performance or
enforcement of this Agreement or the Transaction Documents, (ii) any transaction
financed or to be financed in whole or in part, directly or indirectly, with the
proceeds of the issuance of the Debentures or Warrants or (iii) solely the
status of such Purchasers or holder of the Debentures, the Debenture Shares, the
Warrants or the Warrant Shares as an investor in the Company. The
indemnification obligations of the Company under this paragraph shall be in
addition to any liability which the Company may otherwise have, shall extend
upon the same terms and conditions to any affiliate of the Purchasers and
partners, directors, agents, employees and controlling Persons (if any), as the
case may be, of the Purchasers and any such affiliate, and shall be binding upon
and inure to the benefit of any successors, assigns, heirs and personal
representatives of the Company, the Purchasers and any such affiliate and any
such Person. The Company also agrees that neither the Purchasers or any such
Affiliates, partners, directors, agents, employees or controlling Persons shall
have any liability to the Company or any Person asserting claims on behalf of or
in right of the Company in connection with or as a result of the consummation of
this Agreement or any of the Transaction Documents except to the extent that any
losses, claims, damages, liabilities or expenses incurred by the Company result
from the gross negligence, willful misconduct or incorrect information provided
in writing by such Purchaser or entity in connection with the transactions
contemplated by this Agreement or the Transaction Documents. To the extent that
the foregoing undertaking by the Company may be unenforceable for any reason,
the Company shall make the maximum contribution to the payment and satisfaction
of each of the Indemnified Liabilities which is permissible under applicable
law.
ARTICLE VI.
MISCELLANEOUS
6.1 Entire Agreement. This Agreement, together with the Exhibits and
----------------
Schedules hereto and the Transaction Documents contain the entire understanding
of the parties with respect to the subject matter hereof and supersede all prior
agreements and understandings, oral or written, with respect to such matters.
24
6.2 Notices. Any notices, consents, waivers or other communications
-------
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one business day after deposit with
a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be:
If to the Company:
AgriBioTech, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief Executive Officer
With a copy to:
Snow ▇▇▇▇▇▇ ▇▇▇▇▇▇ P.C.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
If to the Transfer Agent:
Corporate Stock Transfer
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
If to the Purchasers:
With a copy to:
25
Each party shall provide five (5) days' prior written notice to the other party
of any change in address or facsimile number.
6.3 Amendments; Waivers. No provision of this Agreement may be waived or
-------------------
amended except in a written instrument signed, in the case of an amendment, by
both the Company and each of the Purchasers or, in the case of a waiver, by the
party against whom enforcement of any such waiver is sought. No waiver of any
default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of
any other provision, condition or requirement hereof, nor shall any delay or
omission of either party to exercise any right hereunder in any manner impair
the exercise of any such right accruing to it thereafter. Notwithstanding the
foregoing, no such amendment shall be effective to the extent that it applies to
less than all of the holders of the Debentures outstanding. The Company shall
not offer or pay any consideration to a Purchaser for consenting to such an
amendment or waiver unless the same consideration is offered to each Purchaser
and the same consideration is paid to each Purchaser which consents to such
amendment or waiver.
6.4 Headings. The headings herein are for convenience only, do not
--------
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
6.5 Successors and Assigns. This Agreement shall be binding upon and
----------------------
inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of each of the Purchasers. The Purchasers may
assign this Agreement or any rights or obligations hereunder without the prior
written consent of the Company, provided, that any assignees must make the
representations and warranties set forth in Section 2.2 and otherwise comply
with the terms of this Agreement otherwise applicable to its assignor. This
provision shall not limit a
26
Purchaser's right to transfer securities in accordance with all of the terms of
this Agreement or the Transaction Documents.
6.6 No Third-Party Beneficiaries. This Agreement is intended for the
----------------------------
benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person.
6.7 Governing Law. This Agreement shall be governed by and construed and
-------------
enforced in accordance with the internal laws of the State of New York without
regard to the principles of conflicts of law thereof. Each party hereby
irrevocably submits to the nonexclusive jurisdiction of the state and federal
courts sitting in the City of New York, Borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper. Each party hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof to such party at the
address for such notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
6.8 Survival. The representations and warranties of the Company and the
--------
Purchasers contained in Sections 2.1 and 2.2, the agreements and covenants set
forth in Section 3, and the indemnification provisions set forth in Section 5,
shall survive the Closings regardless of any investigation made by or on behalf
of the such Purchaser or by or on behalf of the Company, except that, in the
case of representations and warranties such survival shall be until the Maturity
Date of the Debentures (other than with respect to any claim by a third party
against the party to this Agreement who seeks to assert a claim based on such
representations and warranties).
6.9 Counterparts. This Agreement may be executed in two or more
------------
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.
6.10 Publicity. The Company and on behalf of all the Purchasers shall
---------
consult with each other in issuing any press releases or otherwise making public
statements with respect to the transactions contemplated hereby and neither
party shall issue any such press release or otherwise make any such public
statement without the prior written consent of the other, which consent shall
not be unreasonably withheld or delayed, except that no prior consent shall be
required if such disclosure is required by law, in which such case
27
the disclosing party shall provide the other party with prior notice of such
public statement. The Company shall not publicly or otherwise disclose the
names of any of the Purchasers without each such Purchaser's prior written
consent.
6.11 Severability. In case any one or more of the provisions of this
------------
Agreement shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Agreement shall not
in any way be affected or impaired thereby and the parties will attempt to agree
upon a valid and enforceable provision which shall be a reasonable substitute
therefor, and upon so agreeing, shall incorporate such substitute provision in
this Agreement.
6.12 Remedies. In addition to being entitled to exercise all rights
--------
provided herein or granted by law, including recovery of damages, the Purchasers
will be entitled to specific performance of the obligations of the Company under
this Agreement or the Transaction Documents without the showing of economic loss
and without any bond or other security being required. Each of the Company and
the Purchasers (severally and not jointly) agree that monetary damages would not
be adequate compensation for any loss incurred by reason of any breach of its
obligations described in the foregoing sentence and hereby agree to waive in any
action for specific performance of any such obligation the defense that a remedy
at law would be adequate.
6.13 Independent Nature of Purchasers' Obligations and Rights. The
--------------------------------------------------------
obligations of each Purchaser hereunder is several and not joint with the
obligations of the other Purchasers hereunder, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser hereunder. Nothing contained herein or in any other agreement or
document delivered at any closing, and no action taken by any Purchaser pursuant
hereto or thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert with
respect to such obligations or the transactions contemplated by this Agreement.
Each Purchaser shall be entitled to protect and enforce its rights, including
without limitation the rights arising out of this Agreement or out of the
Transaction Documents, and it shall not be necessary for any other Purchaser to
be joined as an additional party in any proceeding for such purpose.
6.14 Payment Set Aside. To the extent that the Company makes a payment or
-----------------
payments to the Purchasers hereunder or pursuant to the Transaction Documents or
the Purchasers enforce or exercise their rights hereunder or thereunder, and
such payment or payments or the proceeds of such enforcement or exercise or any
part thereof are subsequently invalidated, declared fraudulent or preferential,
set aside, recovered from, disgorged by or are required to be refunded, repaid
or otherwise restored to the Company, a trustee, receiver or any other Person
under any law (including, without limitation, any bankruptcy law, state or
federal law, common law or equitable cause of action), then to the extent of any
such restoration the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not occurred.
28
6.15 Further Assurances. Each party shall do and perform, or cause to be
------------------
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
6.16 Fees and Expenses. Except as set forth in the Registration Rights
-----------------
Agreement, each party shall pay the fees and expenses of its advisers, counsel,
accountants and other experts, if any, and all other expenses incurred by such
party incident to the negotiation, preparation, execution, delivery and
performance of this Agreement; provided, however, that the Company shall
-------- -------
reimburse the Purchasers for the reasonable fees and expenses of Akin, Gump,
Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P. in connection with negotiating and preparing the
Transaction Documents and consummating the transactions contemplated thereby,
which amount shall not be greater than $50,000. The Company shall pay all stamp
and other taxes and duties levied in connection with the issuance of the
Debenture Shares and the Warrant Shares pursuant hereto.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES TO FOLLOW
29
IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized persons as of the
date first indicated above.
AGRIBIOTECH, INC.
By:________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Executive Officer
30
Exhibit A
[Form of Convertible Debenture]
Exhibit B
[Form of Warrant]
Exhibit C
[Registration Rights Agreement]
Exhibit D
[Company's Legal Opinion]