NOTE PURCHASE AGREEMENT
NOTE PURCHASE AGREEMENT, dated as of January 26, 1998, among
each of the Purchasers parties set forth on Exhibit A attached hereto (each, a
"Purchaser" and collectively, the "Purchasers") and Soulfood Concepts, Inc. (the
"Company").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, each Purchaser desires to purchase, severally and not
jointly, the principal amount of the Company's 8% convertible secured notes,
substantially in the form of Exhibit B attached hereto (the "Notes") set forth
opposite such Purchaser's name on Exhibit A attached hereto, together with a
warrant, substantially in the form of Exhibit C attached hereto (the "Warrant")
to purchase up to that number of shares of the Company's common stock, par value
$.003 per share (the "Common Stock"), as set forth opposite such Purchaser's
name on Exhibit A attached hereto; and
WHEREAS, the Company desires to issue the Notes and Warrants
to the Purchasers in accordance with the terms hereof.
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein set forth, the parties hereto agree as follows:
ARTICLE I
Sale and Exchange
2 Sale of the Notes and Warrants. The Company hereby sells, conveys, transfers
and delivers to each Purchaser, severally and not jointly, and each Purchaser,
severally and not jointly, hereby purchases and accepts, the Notes and the
Warrants, in the amounts set forth on Exhibit A attached hereto, in accordance
with the terms hereof.
2.1 Consideration. In reliance upon the representations,
warranties, covenants and agreements contained herein, subject to the terms and
conditions hereof (including, without limitation, full performance by the
Company of its obligations pursuant to Section 1.4), and in consideration of the
sale, conveyance, transfer and delivery of the Notes and the Warrants pursuant
to Section 1.1, each Purchaser, severally and not jointly, shall deliver to the
Company at the Closing described in Section 1.3 hereof the principal amount of
the Notes purchased by such Purchaser as set forth on Exhibit A attached hereto
in immediately available funds.
2.2 Closing. The closing of the purchase of the Notes and
Warrants (the "Closing") shall take place simultaneously with the execution
hereof, unless the parties shall otherwise agree, at the offices of Xxxx
Xxxxxxx, P.C., 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 on January
26, 1998 at 10:00 A.M. or at such other place or time as the parties may agree
(the "Closing Date").
2.3 Deliveries by the Company. At the Closing, the Company
shall deliver to each Purchaser (a) the Note purchased by such Purchaser, (b)
the Warrant purchased by such Purchaser, (c) a certificate of good standing of
the Company from the Secretary of State of the State of Delaware, and (d) an
officer's certificate of the Company, containing true and accurate copies of the
resolutions adopted by the Company authorizing the transactions contemplated
hereby.
2.4 Deliveries by the Purchaser. At the Closing, each
Purchaser, severally and not jointly, shall deliver to the Company the principal
amount of the Notes purchased by such Purchaser as set forth on Exhibit A
attached hereto in immediately available funds.
2.5 Further Assurances. In addition to the other obligations
required to be performed by the Company and the Purchasers hereunder, each of
the Company and the Purchasers agrees that it shall, at the Closing and at any
time, and from time to time thereafter, without cost to the other, execute,
acknowledge and deliver such instruments and documents, and take such other
actions, as may reasonably be requested of it by the other in order to
effectively vest in the Purchasers good and marketable title to the Note and
Warrant purchased by such Purchaser, free and clear of all liens, pledges, or
encumbrances.
ARTICLE II
Purchaser's Representations and Warranties
Each Purchaser, severally and not jointly, hereby represents
and warrants to the Company that:
3 Binding Agreement. The Purchaser has full power, authority and legal capacity
to (i) execute, deliver and perform this Agreement and (ii) consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by the Purchaser. This Agreement constitutes the legal, valid and
binding obligation of the Purchaser enforceable against it in accordance with
its terms.
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3.1 Acquisition of Note and Warrant for Own Account;
Restrictions on Transfer. The Purchaser is acquiring the Note and the Warrant
for investment and not with a view to the sale or distribution thereof, and is
acquiring such Note and Warrant for its own account and not on behalf of others
and has not granted any other person any right or option or any participation or
beneficial interest in any of the Note or the Warrant. The Purchaser
acknowledges its understanding that the Note and the Warrant constitute
restricted securities within the meaning of Rule 144 of the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Securities Act"), and that none of such Note or the Warrant may be
sold except pursuant to an effective registration statement under the Securities
Act or in a transaction exempt from registration under the Securities Act, and
acknowledges that it understands the meaning and effect of such restriction. The
Purchaser has sufficient knowledge and experience in financial and business
matters so that it is capable of evaluating the risks and merits of the
acquisition of the Note and the Warrant. The Purchaser is aware of and has
investigated the Company's business, management and financial condition, has had
a satisfactory opportunity to ask questions of, and receive answers from, agents
and employees of the Company concerning the business of the Company and the
terms and conditions of this transaction and has had access to such other
information about the Company as the Purchaser deemed necessary or desirable to
reach an informed and knowledgeable decision to purchase the Note and the
Warrant hereunder. The Purchaser further acknowledges that the Company is not
currently subject to the reporting requirements of the Securities Exchange Act
of 1934, as amended.
3.2 Accreditation. The Purchaser is an accredited investor
within the meaning of Rule 501 of the rules and regulations of the Commission
promulgated under the Securities Act, and has the financial ability to bear the
economic risk of its acquisition of the Note and the Warrant.
ARTICLE III
Company's Representations, Warranties and Covenants
The Company hereby represents and warrants to each Purchaser,
and covenants and agrees with each Purchaser, that:
4 Validity and Binding Agreement. The Company has full power, authority and
legal capacity to (i) execute, deliver and perform this Agreement and (ii)
consummate the transactions contemplated hereby. This Agreement has been duly
executed and delivered by the Company. This Agreement constitutes the legal,
valid and binding obligation of the Company, enforceable against it in
accordance with its terms.
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4.1 Organization and Standing; Corporate Power. The Company is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. The Company has the corporate power and authority
to own and operate its properties, to carry on its business as now conducted and
to enter into this Agreement and carry out the transactions contemplated hereby.
4.2 Capitalization.
(i) On the date of this Agreement, the authorized
capital stock of the Company consists of 14,500,000 shares of Common Stock, of
which 3,139,816 shares are issued and outstanding and 500,000 shares of
preferred stock, par value $.003 per share, none of which are issued and
outstanding.
(ii) The shares of Common Stock into which the Notes
are convertible (the "Note Shares") and the shares of Common Stock into which
the Warrants are exercisable (the "Warrant Shares") are duly reserved for
issuance, and upon issuance thereof in accordance with the terms and provisions
of the Note and the Warrant, respectively, the Note Shares and the Warrant
Shares will be duly and validly issued, fully paid and non-assessable.
4.3 Use of Proceeds of Financing. Upon the completion by the
Company of an equity financing which results in net proceeds to the Company of
at least $2,000,000, the Company shall use such net proceeds to fully, finally
and indefeasibly pay all of its obligations to the Purchasers evidenced hereby
and by the Notes, Warrants and all other agreements, documents and instruments
executed in connection herewith and therewith.
ARTICLE IV
Registration Rights
The rights of the Purchasers herein under this Article IV are
subject in all respects to the rights of the Purchasers parties to that certain
Note Purchase Agreement, dated as of May 21, 1997, between the Company and the
Purchasers parties thereto, and to the rights of the Purchaser party to that
certain Stock Purchase Agreement, dated as of June 6, 1997, between the Company
and the Purchaser party thereto.
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5 Demand Registration Rights. Beginning on January 1, 1999, the Company, upon
written demand of the Purchasers holding in the aggregate a majority of the
principal amount of Notes outstanding, agrees to register on two occasions, all
or any portion of the Note Shares or the Warrant Shares (collectively, the
"Registrable Shares"). Such Purchasers have the right to request in writing that
the Company effect the registration under the Securities Act of the Registrable
Shares, and the Company shall, as expeditiously as possible, use its best
efforts to effect the registration, on a form of general use under the
Securities Act, of all the Registrable Shares which the Company has been
requested to register. Notwithstanding the foregoing, if the Company shall
furnish to the Purchasers requesting a registration under this Section 4.1 a
certificate signed by the Chief Executive Officer of the Company stating that in
the good faith judgment of the Board of Directors of the Company it would be
detrimental to the Company and its shareholders for such registration statement
to be filed and it is therefore essential to defer the filing of such
registration statement, the Company shall have the right to defer taking action
with respect to such filing for a period of not more than 90 days after receipt
by the Purchasers of such certificate; provided, however, that the Company may
not utilize this right more than once in any 12-month period. In addition, the
Company shall not be obligated to effect, or to take any action to effect, any
registration pursuant to this Section 4.1 during the period starting with the
date 30 days prior to the Company's good faith estimate of the date of filing
of, and ending on a date 120 days after the effective date of, a registration
subject to Section 4.2 hereto; provided that the Company is actively employing
in good faith its best efforts to cause such registration statement to be filed
and thereafter to become effective.
5.1 "Piggyback" Registration Rights. At any time after the
Closing Date, the Company shall, at least thirty (30) days prior to the filing
of any registration statement under the Securities Act (other than a
registration statement on Form S-8 or Form S-4 or any successor forms) relating
to the public offering of its Common Stock by the Company or any of its security
holders, give written notice of such proposed filing and of the proposed date
thereof to the Purchasers, and if, on or before the twentieth (20th) day
following the date on which such notice is given, the Company shall receive a
written request from the Purchasers requesting that the Company include among
the securities covered by such registration statement some or all of the
Registrable Shares held by the Purchasers, the Company shall, subject to Section
4.3 hereof, include such the Registrable Shares in such registration statement,
if filed, so as to permit such Registrable Shares to be sold or disposed of in
the manner and on the terms of the offering thereof set forth in such request.
5.2 Terms and Conditions of Registration. Except as otherwise
provided herein, in connection with any registration statement filed pursuant to
Sections 4.1 or 4.2 herein, the following provisions shall apply:
(i) If such registration statement shall be filed
pursuant to Section 4.2 hereof and if the managing underwriter advises the
Company in writing that the inclusion in such
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registration of some or all of the Registrable Shares sought to be registered by
such Purchasers creates a substantial risk that the proceeds or price per share
that will be derived from such registration will be reduced or that the number
of shares to be registered at the insistence of such Purchasers, plus the number
of shares of Common Stock sought to be registered by the Company and any other
stockholders of the Company is too large a number to be reasonably sold, then,
in such event, the number of shares sought to be registered for the Company, the
other stockholders of the Company having registration rights, and such
Purchasers, as applicable, shall be reduced, pro rata in proportion to the
number of shares sought to be registered to the number of shares recommended be
sold by the managing underwriter. In no event will any securities to be sold by
the Company be excluded from such registration by reason of any underwriters'
cut-backs unless the Company has agreed thereto with the underwriter.
(ii) If requested by such Purchasers in connection
with a registration statement filed pursuant to Section 4.1, the Company will
enter into an underwriting agreement with the underwriters for such offering,
such agreement to be reasonably satisfactory in form and substance to the
Company, such Purchasers and the underwriters, and to contain such
representations, warranties and covenants by the Company and such other terms as
are customarily contained in such agreements used by the managing underwriter,
including, without limitation, restrictions of sales of Common Stock or other
securities by the Company as may be reasonably agreed to between the Company and
such underwriters, and indemnities and rights to contributions to the effect and
to the extent provided in Sections 4.4 and 4.5 hereof. Such Purchasers shall be
a party to any underwriting agreement relating to an underwritten sale of its
Registrable Shares and may, at their option, require that any or all of the
representations, warranties and covenants of the Company to or for the benefit
of such underwriters, shall also be made to and for the benefit of such
Purchasers. All representations and warranties of such Purchasers shall be made
to or for the benefit of the Company.
(iii) The Company shall provide a transfer agent and
registrar (which may be the same entity) for the Registrable Shares, not later
than the effective date of such registration.
(iv) All expenses in connection with the preparation
and filing of a registration statement filed pursuant to Sections 4.1 or 4.2
shall be borne solely by the Company, except for any transfer taxes payable with
respect to the disposition of such Registrable Shares, and any underwriting
discounts and selling commissions applicable solely to such sales of Registrable
Shares, which shall be paid by such Purchasers, severally.
(v) The Company shall use its best efforts to cause
all of the shares of Common Stock covered by such registration statement to be
listed on NASDAQ or on such other securities exchange as such shares may then be
listed, on which similar shares are listed for trading, if the listing of such
registered shares is permitted by such exchange.
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(vi) Following the effective date of such
registration statement, the Company shall, upon the request of such Purchasers,
forthwith supply such number of prospectuses (including exhibits thereto and
preliminary prospectuses and amendments and supplements thereto) meeting the
requirements of the Securities Act and such other documents as are referred to
in the prospectus as shall be reasonably requested by such Purchasers to permit
such Purchasers to make a public distribution of their Registrable Shares.
(vii) Such Purchasers may select the underwriter or
underwriters, if any, who are to undertake any offering and distribution of the
Registrable Shares to be included in a registration statement filed under the
provisions of Section 4.1 hereof, subject to the Company's prior approval of the
underwriter, which approval shall not be unreasonably withheld.
(viii) The Company shall use its best efforts to
register the Registrable Shares covered by any such registration statements
filed pursuant to Section 4.1 or 4.2 under such securities or Blue Sky laws in
addition to those in which the Company would otherwise sell Registrable Shares,
as such Purchasers shall request, except that neither the Company nor such
Purchasers shall for any such purpose be required to execute a general consent
to service of process or to qualify to do business as a foreign corporation in
any jurisdiction where it is not so qualified. The fees and expenses incurred in
connection with such registration shall be borne by the Company.
(ix) Such Purchasers shall cooperate fully with the
Company and provide the Company with all information reasonably requested by the
Company for inclusion in the registration statement or as necessary to comply
with the Securities Act. The Company shall cooperate fully with any underwriters
selected by such Purchasers and counsel to such underwriters, and shall provide
reasonable and customary access to the Company's books and records (upon receipt
from such underwriters of customary confidentiality agreements) in order to
facilitate such underwriters' review and examination of the Company in
connection with such underwriting.
(x) The Company shall notify such Purchasers, at any
time after effectiveness when a prospectus relating thereto is required to be
delivered under the Securities Act, of the happening of any event as a result of
which the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of circumstances then existing (and upon receipt of such
notice and until a supplemented or amended prospectus as set forth below is
available, such Purchasers shall not offer or sell any securities covered by
such registration statement and shall return all copies of such prospectus to
the Company if requested to do so by it), and at the request of such Purchasers
prepare and furnish such Purchasers as promptly as practicable, but in any event
within 30 days, a reasonable number of copies of a supplement to or an amendment
of such prospectus as may be
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necessary so that, as thereafter delivered to the purchasers of such shares,
such prospectus shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing.
(xi) The Company shall furnish to such Purchasers at
the time of the registration of the Registrable Shares, a signed copy of an
opinion of the Company's regular in- house or outside general counsel, or other
counsel of the Company's selection reasonably acceptable to, and which opinion
shall be reasonably satisfactory in form and substance to, such Purchasers to
the effect that: (a) a registration statement covering the Registrable Shares
has been filed with the Commission under the Securities Act and has been
declared effective by order of the Commission, (b) said registration statement
and prospectus contained therein comply as to form in all material respects with
the requirements of the Securities Act, and nothing has come to such counsel's
attention (after due inquiry) which would cause such counsel to believe that
either said registration statement or such prospectus (other than the financial
statements contained therein, as to which such counsel need not express any
opinion) contains any untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein (in the case of such prospectus, in light of the circumstances under
which they were made) not misleading, (c) after due inquiry such counsel knows
of no legal or governmental proceedings required to be described in such
registration statement or prospectus which are not described as required, or of
any contracts or documents of a character required to be described in such
registration statement or such prospectus to be filed as an exhibit to such
registration statement or to be incorporated by reference therein which are not
described and filed as required and (d) to such counsel's knowledge, no stop
order has been issued by the Commission suspending the effectiveness of such
registration statement; it being understood that such opinion may contain such
qualifications and assumptions as are customary in the rendering of similar
opinions, and that such counsel may rely, as to all factual matters treated
therein, on certificates of the Company (copies of which shall be delivered to
such Purchasers).
(xii) The Company will use its best efforts to comply
with the reporting requirements of Sections 13 and 15(d) of the Securities
Exchange Act of 1934, as amended, to the extent it shall be required to do so
pursuant to such sections, and at all times while so required shall use its best
efforts to comply with all other public information reporting requirements of
the Commission (including reporting requirements which serve as a condition to
utilization of Rule 144 promulgated by the Commission under the Securities Act)
from time to time in effect and relating to the availability of an exemption
from the Securities Act for the sale of any of the Company's Common Stock held
by such Purchasers. The Company will also cooperate with such Purchasers in
supplying such information and documentation as may be necessary for such
Purchasers to complete and file any information reporting forms presently or
hereafter required by the Commission as a condition to the availability of an
exemption from the Securities Act for the sale of any of the Company's Common
Stock held by such Purchasers.
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5.3 Indemnification.
(i) In the event of the registration of any
Registrable Shares of the Company under the Securities Act pursuant to the
provisions of Sections 4.1 or 4.2, the Company agrees to indemnify and hold
harmless such Purchasers, each underwriter, broker or dealer, if any, and their
respective directors, officers and employees, of such Registrable Shares, and
each other person, if any, who controls the holders of the Registrable Shares
(or a permitted assignee thereof), such underwriter, broker or dealer within the
meaning of the Securities Act, from and against any and all losses, claims,
damages or liabilities (or actions in respect thereof), joint or several, to
which such Purchasers (and as applicable) its directors, officers or employees,
or such underwriter, broker or dealer or controlling person may become subject
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained
in any registration statement under which the Registrable Shares were registered
under the Securities Act, any preliminary prospectus or final prospectus
relating to such Registrable Shares, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, or any violation by the Company of any rule
or regulation under the Securities Act applicable to the Company or relating to
any action or inaction required by the Company in connection with any such
registration and will reimburse such Purchasers, each such underwriter, broker
or dealer and controlling person, and their respective directors, officers or
employees, for any legal or other expenses reasonably incurred by such
Purchasers or such underwriter, broker or dealer or controlling person in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in such registration statement, such
preliminary prospectus, such final prospectus or such amendment or supplement
thereto in reliance upon and in conformity with written information furnished to
the Company by such Purchasers and as applicable, such Purchasers' directors,
officers or employees, or such underwriter, broker, dealer or controlling person
for use in the preparation thereof. Such indemnity shall remain in full effect
irrespective of any investigation by any person indemnified above.
(ii) In the event of the registration of any
Registrable Shares of such Purchasers under the Securities Act for sale pursuant
to the provisions of this Agreement, such Purchasers agree, severally and not
jointly, to indemnify and hold harmless the Company, its directors, officers and
employees, from and against any losses, claims, damages or liabilities, joint or
several, to which the Company, its directors, officers or employees, may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which such Registrable Shares
9
were registered under the Securities Act, any preliminary prospectus or final
prospectus relating to such Registrable Shares, or any amendment or supplement
thereto, or arise out of or are based upon omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, which untrue statement or alleged untrue
statement or omission or alleged omission was made therein in reliance upon and
in conformity with written information furnished to the Company by such
Purchasers for use in the preparation thereof. Such indemnity shall remain in
full effect irrespective of any investigation by any person indemnified above.
(iii) Promptly after receipt by a person entitled to
indemnification under this Section 4.4 (for purposes of this Section 4.4, an
"Indemnified Party") of notice of the commencement of any action or claim
relating to any registration statement filed under Sections 4.1 or 4.2 or as to
which indemnity may be sought hereunder, such Indemnified Party will, if a claim
for indemnification hereunder in respect thereof is to be made against any other
party hereto (for purposes of this Section 4.4, an "Indemnifying Party"), give
written notice to such Indemnifying Party of the commencement of such action or
claim, but the failure to so notify the Indemnifying Party will not relieve it
from any liability which it may have to any Indemnifying Party otherwise than
pursuant to the provisions of this Section 4.4 and shall also not relieve the
Indemnifying Party of its obligations under this Section 4.4, except to the
extent that the Indemnifying Party is damaged solely as a result of the failure
to give timely notice. In case any such action is brought against an Indemnified
Party, and it notifies an Indemnifying Party of the commencement thereof, the
Indemnifying Party will be entitled (at its own expense) to participate in and,
to the extent that it may wish, jointly with any other Indemnifying Party
similarly notified, to assume the defense with counsel satisfactory to such
Indemnified Party, of such action and/or to settle such action and, after notice
from the Indemnifying Party to such Indemnified Party of its election so to
assume the defense thereof, the Indemnifying Party will not be liable to such
Indemnified Party for any legal or other expenses subsequently incurred by such
Indemnified Party in connection with the defense thereof, other than the
reasonable cost of investigation; provided, however, that no Indemnifying Party
and no Indemnified Party shall enter into any settlement agreement which would
impose any liability on such other party or parties without the prior written
consent of such other party or parties.
(iv) Notwithstanding the foregoing provisions of this
Section 4.4, in no event shall any such Purchaser be liable for an amount in
excess of the net proceeds received by such Purchaser from the sale of the
Registrable Shares.
5.4 Contribution. If the indemnification provided for in
Section 4.4 hereof is unavailable to the Indemnified Party in respect of any
losses, claims, damages or liabilities referred to herein, then each such
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages or liabilities (i) as between the Company and
such Purchasers on the one
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hand and the underwriters on the other, in such proportion as is appropriate to
reflect the relative benefits received by the Company and such Purchasers on the
one hand and the underwriters on the other from the offering of the shares of
Common Stock, or if such allocation is not permitted by applicable law, in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company and such Purchasers on the one hand and of the
underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations and (ii) as between the Company on the one
hand and such Purchasers on the other, in such proportion as is appropriate to
reflect the relative fault of the Company and of such Purchasers in connection
with such statements or omissions, as well as any other relevant equitable
considerations.
In no event shall the obligation of any Indemnifying
Party to contribute under this Section 4.5 exceed the amount that such
Indemnifying Party would have been obligated to pay by way of indemnification if
the indemnification provided for under Section 4.4 hereof had been available
under the circumstances.
The amount paid or payable by an Indemnified Party as a result
of the losses, claims, damages and liabilities shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses incurred
by such Indemnified Party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 4.5, no
underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Registrable Shares purchased by it and
distributed to the public were offered to the public exceeds the amount of any
damages that such underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
5.5 Survival. The indemnity and contribution agreements
contained in Sections 4.4 and 4.5 shall remain operative and in full force and
effect regardless of (i) any termination of this Agreement or any underwriting
agreement, (ii) any investigation made by or on behalf of any Indemnified Party
or by or on behalf of the Company and (iii) the consummation of the sale or
successive resales of the Registrable Shares.
5.6 Future Registration Rights. Until such time as the
registration statement has been declared effective by the Commission, the
Company shall not grant to any third party any registration rights equal to or
more favorable than those contained in this Article 4; provided, however, that
the foregoing prohibition shall not prevent the Company from granting to a third
party specific registration rights that are equal to those contained in this
Article 4, as long as all of the registration rights granted to such third
party, taken as a whole, are less favorable to the third party that those
granted to such Purchasers herein. In the event that the registration
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statement shall fail to remain effective (or a stop order shall be entered with
respect thereto) while any of the Registrable Shares remain unsold, the
provisions of this Section 4.7 shall become applicable once again.
ARTICLE V
Conditions to Closing
6 Conditions to the Purchaser's Obligations to Close. The Purchaser's
obligations to close hereunder shall be subject to the following condition: (a)
all of the documents required to be delivered by the Company to the Purchaser
pursuant to Section 1.4 hereof shall have been delivered to the Purchaser.
6.1 Conditions to the Company's Obligation to Close. The
Company's obligation to close hereunder shall be subject to the following
condition: (a) the purchase price for the Shares and the Warrant required to be
delivered by the Purchaser to the Company pursuant to Section 1.5 hereof shall
have been delivered to the Company.
ARTICLE VI
Amendments
7 Amendments. This Agreement may not be amended or modified orally and no waiver
of compliance with any provision or condition hereof shall be effective unless
evidenced by an instrument in writing duly executed by the party hereto sought
to be charged with such amendment, modification or waiver.
ARTICLE VII
Legend
8 Legend. The following legend shall be noted conspicuously on all certificates
representing the Note Shares and the Warrant Shares to be issued to the
Purchaser pursuant to the terms of this Agreement, the Note and the Warrant:
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"THE SHARES OF COMMON STOCK REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. SUCH SHARES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE SOLD, ASSIGNED, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE
OF A PRIOR EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR A PRIOR
OPINION OF COUNSEL TO THE COMPANY OR SUCH OTHER
COUNSEL AS SHALL BE SATISFACTORY TO THE COMPANY
STATING THAT REGISTRATION IS NOT REQUIRED UNDER SAID
ACT OR STATE SECURITIES LAWS."
ARTICLE VIII
Notices
9 Notices. Any notice, demand, waiver, or consent required or permitted
hereunder shall be in writing and shall be given personally or by registered or
certified mail, with return receipt requested, or by facsimile transmission,
addressed as follows:
If to the Company:
Soulfood Concepts, Inc.
000 Xxxxx Xxxxxx
Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xx. Xxxxx Xxxxxxxxxxx
13
If to the Purchaser:
At the address of such Purchaser as set forth on
Exhibit A attached hereto.
A given notice shall be deemed received upon the date of
delivery if given personally or by facsimile transmission (with delivery of a
copy by registered or certified mail), or, if given by registered or certified
mail, on the fifth day after the day on which it is deposited in the mails
properly addressed with postage prepaid as herein provided. Any party may change
his or her address for the purpose of notice by giving notice in accordance with
the provisions of this Section 8.1.
ARTICLE IX
Miscellaneous
10
Miscellaneous. This Agreement sets forth the entire
understanding of the parties and supersedes any and all prior agreements,
arrangements and understandings relating to the subject matter hereof, and no
representation, promise, inducement or statement of intention has been mae by
any party, which is not embodied herein and no party shall be bound by, or be
liable for, any alleged representation, promise, inducement or statement of
intention not embodied herein. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns. This
Agreement may be executed in any number of counterparts, and all such
counterparts shall constitute one and the same instrument. Facsimile copies
shall be deemed valid and binding. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to its conflict of laws rules.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
SOULFOOD CONCEPTS, INC.
By: /s/ Xxxxx Xxxxxxxxxxx
Name: Xxxxx Hinchchliffe
Title: President
PURCHASERS:
CLARION FINANZ AG
14
By: /s/ Xxxxx Xxxxxxx
-----------------------------
Name: Xxxxx Xxxxxxx
Title: President
US GLOBAL INVESTORS (GUERNSEY) LTD.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxx
Title: President
/s/ Xxxxx Xxxxxxxxxxx
-----------------------------
Xxxxx Xxxxxxxxxxx
15
EXHIBIT A
Name of Purchaser Principal Amount of No. of Shares of Common Stock into
and Address: Note: which Warrant is Exercisable:
----------- ---- ----------------------------
Clarion Finanz AG $150,000 15,000
Xxxxxxxxxxxxxx 000
0000 Xxxxxx, Xxxxxxxxxxx
US Global Investors $100,000 10,000
(Guernsey) Ltd.
0000 Xxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000
Xxxxx Xxxxxxxxxxx $ 15,000 1,500
000 Xxxxxxxxx Xxxxxx
Xxxxx Xxxxx
Xxx Xxxx, XX 00000
Totals: $265,000 26,500
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