SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this "Agreement"), dated as of June 4,
1999 is entered into by and between The State of Wisconsin Investment Board, an
independent state agency organized under the laws of Wisconsin, with an address
at 000 X. Xxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxx, Xxxxxxxxx 00000-0000, Attn:
Investment Director for Small Cap Stocks (the "Purchaser"), and AgriBioTech,
Inc., a Nevada corporation with an address at 000 Xxxxxxxxx Xxxx Xxxxx,
Xxxxxxxxx, Xxxxxx 00000 (the "Company").
The Company has offered for sale, and the Purchaser has agreed to purchase
four million, two hundred seventy six thousand, eight hundred and fifty
(4,276,850) shares (the "Shares") of fully registered common stock, par value of
$.001 per share, of the Company ("Common Stock") on the terms and conditions
herein provided. In connection herewith, the Company and the Purchaser hereby
agree as follows:
1. Purchase and Sale of Shares. Upon the basis of the representations and
warranties and subject to the terms and conditions set forth herein, the Company
agrees to issue and sell the Shares to the Purchaser on the Closing Date (as
herein defined) at $6.546875 per Share, or an aggregate purchase price of
$28,000,000 (the "Purchase Price") and, upon the basis of the representations
and warranties and subject to the terms and conditions set forth herein, the
Purchaser agrees to purchase the Shares from the Company on the Closing Date at
the Purchase Price.
Notwithstanding the foregoing, in the event that the Company sells any
shares (or securities that may be converted into or exchanged for shares) of
Common Stock in an original issuance (not shares traded on Nasdaq in the
aftermarket) for less than $6.546875 per share at any time during the forty-five
(45) day period commencing on the date hereof (except for shares issued pursuant
to (a) stock options, (b) purchases by the Company of outstanding existing stock
options (c) warrants outstanding as of the date hereof, and (d) agreements
existing as of the date hereof that guarantee the price of common stock issued
in transactions with HybriGene, LLC and Kimeragen, Inc.), the Company shall have
the obligation to promptly notify and pay the Purchaser (x) the aggregate
difference between (i) the per share price of the Shares and (ii) the per share
price of such additional shares of the Company's Common Stock (or securities
that may be converted into or exchanged for shares of Common Stock) so sold, (y)
multiplied by the number of Shares purchased hereunder, at the Company's option,
in either cash or additional shares of the Company's Common Stock. If the
Company elects to pay in Common Stock, the Common Stock shall be valued at the
price at which the Company sells any such shares (or securities that may
converted into or exchanged for shares) of Common Stock and will be payable
within five (5) days of such other sale.
2. Closing. The closing of the purchase and sale of the Shares (the
"Offering") shall take place on June 7, 1999 as coordinated by the parties, or
on such other date or at such other time and place as the Company and the
Purchaser may agree upon (such time and date of the closing being referred to
herein as the "Closing Date"). Upon payment of the Purchase Price in full in
immediately available funds by or on behalf of the Purchaser to the Company by
wire transfer to an account specified by the Company to the Purchaser prior to
the Closing Date, the Company will promptly cause its transfer agent to deliver
to the Purchaser on the Closing Date certificates representing the shares of
Common Stock in such denominations and registered in such names as the Purchaser
shall request.
3. Registration.
(a) On August 14, 1998, the Company's Registration Statement on Form S-3,
No. 333-61127, was declared effective by the Securities and Exchange
Commission ("Commission") and on May 13, 1999 Post-Effective Amendment
No. 1 was declared effective (including all exhibits thereto and all
information and documents incorporated by reference therein, the
"Registration Statement") and includes the registration of the
original issuance of the Shares of Common Stock purchased by the
Purchaser pursuant to this Agreement.
(b) Promptly after the Closing Date, the Company shall take all requisite
action to list the Shares for trading on The Nasdaq National Market.
4. Representations and Warranties of the Company. The Company represents and
warrants, as of the date hereof and as of the Closing Date, as follows:
(a) no consent, approval, authorization or order of any court,
governmental agency or body or arbitrator having jurisdiction over the
Company or any of the Company's affiliates is required for the
execution of this Agreement or the sale of the Shares to the
Purchaser;
(b) neither the sale of the Shares nor the performance of the Company's
other obligations pursuant to this Agreement will violate, conflict
with, result in a breach of, or constitute a default (or an event
that, with the giving of notice or the lapse of time or both, would
constitute a default or trigger any right of a third party to acquire
equity interests in the Company or cause mandatory adjustment of the
price at which an outstanding security of the Company is convertible
into Common Stock) under (i) the Certificates of Incorporation or
bylaws of the Company; (ii) any decree, judgment, order or
determination of any court, governmental agency or body, or arbitrator
having jurisdiction over the Company or any of the Company's
properties or assets; (iii) any law, treaty, rule or regulation
applicable to the Company (other than the federal securities laws,
representations and warranties with respect to which are made by the
Company, or the requirements of the Nasdaq Stock Market); or (iv) the
terms of any bond, debenture, note or other evidence of indebtedness,
or any agreement, stock option or similar plan by which the Company is
bound or to which any property of the Company is subject, in any event
above, which violation, conflict or breach would have a material
adverse effect on the Company;
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(c) the Company has taken all corporate action required to authorize the
execution and delivery of this Agreement and the performance of its
obligations hereunder and will use the proceeds of sale for working
capital and to fully repay any balance remaining on the bridge loans
listed in paragraph (g) of this Section 4;
(d) the Company has duly authorized the issuance of the Shares and, when
issued and delivered to and paid for by the Purchaser in accordance
with the terms hereof, the Common Stock will be duly and validly
issued, fully paid and non-assessable and will not constitute
"restricted securities" within the meaning of Rule 144(a)(3)
promulgated under the Securities Act of 1933, as amended (the "Act");
(e) the Company's Prospectus dated May 13, 1999 included in the Company's
Post-Effective Amendment to its Registration Statement on Form S-3
(Registration No. 333-61127 attached hereto as Exhibit A) with a draft
supplement for this Offering, which includes the risk factor
disclosure (Exhibit B); the Company's Annual Report on Form 10-K for
its Fiscal Year Ended June 30, 1998, amended on January 29, 1999 and
March 31, 1999; the Company's proxy statement dated January 11, 1999,
as amended on February 8, 1999, for its Annual Meeting held on
February 22, 1999; the description of the Company's common stock,
$.001 par value, included in registration statement on Form 8-A (File
No. 0-19352), filed July 11, 1995, including any amendment or report
filed for the purpose of updating such information; the Company's
Quarterly Reports on Form 10-Q and 10-QSB for the fiscal quarters
ended March 31, 1996 (as amended on July 12, 1996), September 30,
1998, December 31, 1998, and March 31, 1999; the following Current
Reports on Form 8-K (collectively, Forms "8-K") filed by the Company
since July 1, 1998: Dated October 30, 1996 and filed on November 12,
1996, and amended on January 13, 1997, February 17, 1998 and August
11, 1998; Dated June 23, 1998 and filed on July 8, 1998 and amended on
August 28, 1998; Dated August 28, 1998 and filed September 11, 1998
and amended November 12, 1998 and January 29, 1999; Dated January 6,
1998 and filed on January 16, 1998, and amended on March 10, 1998,
March 30, 1998, August 11, 1998 and March 23, 1999; Dated January 9,
1998 and filed on January 20, 1998, and amended on March 10, 1998,
March 30, 1998 and August 11, 1998; Dated January 26, 1998 and filed
on March 10, 1998, and amended on March 30, 1998, August 11, 1998 and
September 4, 1998; Amendment filed on August 28, 1998 to report dated
October 22, 1997 and filed on November 6, 1997; Dated June 30, 1998
and filed October 26, 1998; Dated December 30, 1998 and filed on
January 11, 1999; Dated January 22, 1999 and filed on January 27,
1999; and Dated January 22, 1999 and filed on February 5, 1999
(collectively, the "Disclosure Documents") have been delivered to
Purchaser and, as of the date of each such respective document
included therein and when considered as of today together and with
this Agreement, such Disclosure Documents do not contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances in which they were made with
respect to the Company;
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(f) the Company's Financial Statements for the year ended June 30, 1998,
as amended, included in the Disclosure Documents comply in all
material respects with the applicable requirements of the Securities
Exchange Act of 1934, as amended, and have been prepared, and fairly
present in all material respects the consolidated financial condition,
results of operations and cash flows of the Company and its
subsidiaries at the respective dates and for the respective periods
indicated, in accordance with generally accepted accounting principles
consistently applied throughout such periods (except as noted
therein);
(g) except as set forth in the Disclosure Documents or pursuant to this
Agreement, since June 30, 1998 (i) the Company has not incurred any
material liabilities, direct or contingent, except (A) in the ordinary
course of business, (B) additional borrowings under a revolving credit
facility (the Loan and Security Agreement dated June 23, 1998, as
amended) with Bank of America National Trust and Savings Association,
as successor to BankAmerica Business Credit Inc., as agent, and
Deutsche Financial Services Corporation as administrative agent under
which the Company had borrowed approximately $ 99 million as of June
2, 1999 and had $4 million available to be borrowed, (C) a $15 million
bridge loan from Deutsche Bank AG, (D) approximately $23.3 million of
subordinated convertible debentures, (E) indebtedness and liabilities
assumed in connection with acquisitions, and (F) bridge loans the
proceeds of which were used to redeem or repurchase the Company's
outstanding 5% Convertible Debentures due 2001 and (ii) there has been
no material adverse change in the properties, business, results of
operations or financial condition of the Company; and
(h) as of June 2, 1999 (and without giving effect to the sale of Shares of
Common Stock hereunder), the Company had a total of 42,117,711 shares
of Common Stock issued and outstanding; approximately 9.1 million
shares of Common Stock were reserved for issuance pursuant to existing
stock options under the Company's current stock option plans or
outside of the plans and an additional approximately 1.1 million
shares were issuable upon exercise of options available for future
grant; 400,000 shares of Common Stock were reserved for issuance upon
grant of Shares under the Bonus Plan, and 3,219,500 shares were
reserved for issuance pursuant to exercise of outstanding Warrants,
and there will be no changes in these numbers prior to the Closing
Date except as a result of (i) shares issued in connection with the
conversion or exchange of any securities of the Company or stock
options granted under or shares issued under any existing stock option
plan or other existing employee bonus or existing incentive plan of
the Company, (ii) shares issued pursuant to agreements existing as of
the date hereof that guarantee the price of common stock issued in
transactions with HybriGene, LLC and Kimeragen, Inc.), and (iii)
options to purchase up to 500,000 shares of Common Stock granted to
executive management.
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5. Conditions of Closing. The obligations of each party hereunder shall be
subject to
(a) the accuracy in all material respects of the representations and
warranties of the other party hereto as of the date hereof and as of
the Closing Date, as if such representations and warranties had been
made again on and as of the Closing Date, (b) the performance in all
material respects by the other party of its obligations hereunder
which must be performed prior to the Closing Date, (c) issuance of
legal opinions to the Purchaser by counsels to the Company in the
forms set forth in Exhibit C hereto, with such changes thereto as may
be agreed upon by the Purchaser and the applicable counsel, and (d)
redemption or repurchase of all of the Company's outstanding 5%
Convertible Debentures due December 30, 2001 (or a combination
thereof) on or prior to the Closing Date.
6. Indemnification.
(a) The Company agrees to indemnify and hold harmless the Purchaser, each
person, if any, who controls the Purchaser within the meaning of
Section 15 of the Act and each officer, director, employee and agent
of the Purchaser and of any such controlling person against any and
all liabilities, claims, damages or expenses whatsoever, as incurred
arising out of or resulting from any breach or alleged breach or other
violation of any representation, warranty, covenant or undertaking by
the Company contained in this Agreement, and the Company will
reimburse the Purchaser for its reasonable legal and other expenses
(including the reasonable cost of any investigation and preparation,
and including the reasonable fees and expenses of counsel) incurred in
connection therewith.
(b) The Purchaser agrees to indemnify and hold harmless the Company, each
person, if any, who controls the Company within the meaning of Section
15 of the Act and each officer, director, employee and agent of the
Company and of any such controlling person against any and all losses,
liabilities, claims, damages or expenses whatsoever, as incurred
arising out of or resulting from any breach or alleged breach or other
violation or alleged violation of any representation, warranty,
covenant or undertaking by the Purchaser contained in this Agreement,
and the Purchaser will reimburse the Company for its reasonable legal
and other expenses (including the reasonable cost of any investigation
and preparation, and including the reasonable fees and expenses of
counsel) incurred in connection therewith.
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7. Agreements. The Company shall:
(a) (i) use its best efforts to reduce the percentage of all outstanding
stock options, including qualified and non-qualified stock options,
granted to directors and employees to 15% of the outstanding Common
Stock of the Company by the Company's 2001 annual stockholders meeting
(after giving effect to actions taken at such meeting), unless the
owners of a majority of the outstanding shares of Common Stock provide
their approval to a higher percentage; (ii) obtain additional
independent directors (as defined by the Council of Institutional
Investors in Exhibit D hereto) so that a majority of the Company's
Board of Directors shall consist of independent directors by the
Company's 2001 annual stockholders meeting (after giving effect to the
election of directors at such meeting); and (iii) by the Company's
2000 annual stockholders meeting (after giving effect to actions taken
at such meeting), have the Board of Directors establish a Nominating
Committee, consisting solely of independent directors, to select
future additional candidates for election to the Board;
(b) not adopt a shareholder rights plan in the form of a "poison pill"
unless the plan provides (i) for approval of continuation of the plan
or the use of the blank check preferred stock by the owners of a
majority of the Common Stock of the Company by a vote taken no later
than the third annual stockholders meeting after its adoption by the
Company, and subsequent such approvals of continuation of the plan are
obtained no further apart than every three annual stockholders'
meetings thereafter; and (ii) that a holding of up to 20 percent of
outstanding shares by Purchaser will not trigger the rights plan, any
dilution of Purchaser's ownership interests or any loss of rights by
Purchaser; and
(c) not issue blank check preferred stock with the primary effect of
preventing the hostile acquisition of securities of the Company unless
such issuance has been approved by the owners of a majority of the
Common Stock
(d) unless the owners of a majority of the Common Stock give their
approval, not grant any stock options at less than the closing market
price on the date of grant or reduce the price of any options which
either were granted as a non-qualified stock option grant to an
incoming employee or vendor or were granted under any of the Company's
existing or future stock option plans, provided, however, that the
forgoing shall not preclude the Company from (i) issuing new, lower
priced options issued from a stock option plan to persons holding
higher priced options from such plan, provided however, that if such
new lower priced options are granted in exchange for such higher
priced options, the shares covered by such higher priced options shall
be canceled or surrendered and not available for re-grant under such
stock option plan or (ii) reducing the higher price and number of a
non-qualified stock option grant in exchange for a lesser number of
lower priced options having a substantially equivalent value as vauled
by a recognized stock option valuation model (e.g., Black-Scholes);
provided that, such reduced non-qualified stock option grants are
subject to a revised vesting schedule acceptable to the Purchaser.
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8. Survival of Representations and Warranties. The respective agreements,
representations, warranties, indemnities and other statements made by or on
behalf of each party hereto pursuant to this Agreement, as of the date they were
made, shall, unless otherwise specified, survive until the third anniversary of
the Closing Date, provided however, that the rights of Purchaser to enforce
Paragraphs 7 shall last for as long as Purchaser owns Common Stock of the
Company, and shall expire thereafter.
9. Miscellaneous.
(a) This Agreement may be executed in one or more counterparts and such
counterparts shall constitute but one and the same agreement and
authorized signatures may be evidenced to the other party by facsimile
copies thereof; provided that the originally signed signature page of
any party is provided to the other party within two business days
after original execution.
(b) This Agreement shall inure to the benefit of and be binding upon the
parties hereto. This Agreement shall not be assignable by any party
hereto without the prior written consent of the other party hereto and
no other person shall have any right or obligation hereunder. Without
limiting the foregoing, the rights of Purchaser set forth in
Paragraphs 3 and 7 shall not be transferable to subsequent purchasers
of the Shares. Any assignment contrary to the terms hereof shall be
null and void and of no force or effect.
(c) This Agreement contains the entire agreement between the parties with
respect to the subject matter hereof and supersedes any prior
agreements or understandings, whether written or oral, between the
parties respecting such subject matter. In particular, the agreements
set forth in the resolutions regarding repricing by the Company of
stock options, authorizations of further issuances of Preferred Stock
having an anti-takeover effect and adoption by the Company of
shareholders rights plans adopted by the Board of Directors of the
Company at their meeting held on December 17, 1997 (the
"Resolutions"), are hereby abrogated and superseded by this Agreement.
Purchaser will not object or take any action if the Board of Directors
of the Company rescinds the Resolutions or takes any actions
inconsistent with the Resolutions, so long as Company acts in
accordance with its obligations in this Agreement.
(d) If within 45 days of the date hereof the Company enters into or is a
party to any agreement to issue additional equity securities (or
securities convertible or exchangeable therefor), the Company shall
promptly provide notice of such agreement to the Purchaser, together
with a copy of such agreement.
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10. Governing Law. This Agreement shall be governed by the internal laws of the
State of Nevada.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have entered into this Agreement as of the
date first set forth above.
AGRIBIOTECH, INC.
By: /s/ Xxxxx Xxxxxx
--------------------------
Xxxxx Xxxxxx,
Co-President and
Chief Financial Officer
THE STATE OF WISCONSIN INVESTMENT BOARD
By: /s/ Xxxx X. Xxxxxx
---------------------------
Xxxx X. Xxxxxx
Investment Director,
State of Wisconsin Investment
Board
