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Exhibit 10.156
CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
Between
ECOGEN INC.
and
AMRO INTERNATIONAL, S.A.,
ASPEN INTERNATIONAL, LTD.
and
MARKHAM HOLDINGS LIMITED
Dated as of February 14, 2000
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CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement"),
dated as of February 14, 2000, between Ecogen Inc., a Delaware corporation (the
"Company"), and Amro International, S.A., a corporation incorporated under the
laws of Switzerland, Aspen International, Ltd. and Markham Holdings Limited
(collectively, the "Purchaser").
WHEREAS, subject to the terms and conditions set forth in this
Agreement, the Company desires to issue and sell to the Purchaser and the
Purchaser desires to purchase from the Company, shares of the Company's 7%
Series 2000-A Convertible Preferred Stock, par value $.01 per share
(the "Preferred Stock").
IN CONSIDERATION of the mutual covenants contained in this Agreement,
the Company and Purchaser agree as follows:
ARTICLE I
PURCHASE AND SALE OF PREFERRED STOCK
1.1 Purchase and Sale. (a) Subject to the terms and conditions
set forth herein, the Company shall issue and sell to the Purchaser, and the
Purchaser shall purchase from the Company 15,000 shares of the Preferred Stock
(the "Shares").
(b) The Preferred Stock shall have the respective
rights, preferences and privileges set forth in the form of the Certificate of
Designations, Preferences and Rights of 7% Series 2000-A Convertible Preferred
Stock attached hereto as Exhibit A, which shall be approved by the Purchaser and
filed prior to the time of the Closing (as defined below) by the Company with
the Secretary of State of Delaware (the "Certificate of Designations").
For purposes of this Agreement, "Business Day," Conversion Price,"
"Original Issue Date," "Trading Day" and "Per Share Market Value" shall have the
meanings set forth in the Certificate of Designations.
1.2 Purchase Price. The purchase price per Share shall be
$100.00.
1.3 The Closing. (a) The closing of the purchase and sale of
the Shares (the "Closing") shall take place at the offices of Paul, Hastings,
Xxxxxxxx & Xxxxxx LLP, 0000 Xxxxxxxxxx Xxxxxxxxx, Xxxxxxxx, XX 00000,
immediately following the execution hereof or such later date or at such other
place as the parties shall agree. The date of the Closing is hereinafter
referred to as the "Closing Date."
(b) At the Closing, the parties shall deliver or
shall cause to be delivered the following: (i) the Company shall deliver to each
Purchaser (1) a stock certificate representing Shares registered in the name of
each Purchaser as specified in Schedule 1.3, (2) a five year common stock
purchase warrant in the form of Exhibit B (the "Warrant") entitling the
Purchaser to purchase an aggregate of 200,000 shares (as specified in Schedule
1.3) of the Company's common stock, $.01 par value per share (the "Common
Stock"), at an exercise price equal to 120% of the Per Share Market Value on the
Closing Date, registered in the name of the Purchaser, (3) the legal opinion of
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP, outside counsel to
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the Company, substantially in the form of Exhibit C, dated the Closing Date, and
(4) all other documents, instruments and writings required to have been
delivered at or prior to the Closing Date by the Company pursuant to this
Agreement, including an executed Registration Rights Agreement, dated the date
hereof, between the Company and the Purchaser, in the form of Exhibit D (the
"Registration Rights Agreement"), and the Irrevocable Transfer Agent
Instructions, dated the Closing Date, in the form of Exhibit E, delivered to and
acknowledged by the Company's transfer agent (the "Transfer Agent
Instructions"); and (ii) the Purchaser shall deliver to the Company (1)
$1,500,000 (as specified in Schedule 1.3) in United States dollars in
immediately available funds by wire transfer to an account designated in writing
by the Company for such purpose prior to the Closing Date (the "Purchase Price")
less the amounts referred to in Section 4.1, and (2) all documents, instruments
and writings required to have been delivered at or prior to the Closing Date by
the Purchaser pursuant to this Agreement, including an executed Registration
Rights Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Representations, Warranties and Agreements of the Company.
The Company hereby makes the following representations and warranties to the
Purchaser:
(a) Organization and Qualification. The Company is a
corporation, duly incorporated, validly existing and in good standing under the
laws of the State of Delaware, with the requisite corporate power and authority
to own and use its properties and assets and to carry on its business as
currently conducted. The Company has no subsidiaries other than as set forth in
Schedule 2.1(a) (collectively the "Subsidiaries"). Except as set forth in
Schedule 2.1(a), each of the Subsidiaries is an entity, duly incorporated or
otherwise organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization (as applicable), with the full
corporate power and authority to own and use its properties and assets and to
carry on its business as currently conducted except where the failure to be duly
organized, validly existing or in good standing, as the case may be is not
reasonably likely to, individually or in the aggregate, (x) adversely affect the
legality, validity or enforceability of the Securities (as defined below) or any
of this Agreement, the Certificate of Designations, the Warrant or the
Registration Rights Agreement (collectively, the "Transaction Documents"), (y)
have or result in a material adverse effect on the results of operations,
assets, or condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole, or (z) adversely impair the Company's ability to
perform fully on a timely basis its obligations under any of the Transaction
Documents (any of (x), (y) or (z), being a "Material Adverse Effect"). Except as
set forth in Schedule 2.1(a), each of the Company and the Subsidiaries is duly
qualified 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 to be
so qualified or in good standing, as the case may be, is not reasonably likely
to have a Material Adverse Effect.
(b) Authorization; Enforcement. The Company has the
requisite corporate power and authority to enter into and to consummate the
transactions contemplated by each of the Transaction Documents, and otherwise to
carry out its obligations thereunder. The execution and delivery of each of the
Transaction Documents by the Company and the
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consummation by it of the transactions contemplated thereby have been duly
authorized by all necessary action on the part of the Company and no further
action is required by the Company. Each of the Transaction Documents has been
duly executed by the Company and, when delivered (or filed, as the case may be)
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. Neither the Company nor any Subsidiary is in violation of any of the
provisions of its respective certificate of incorporation, by-laws or other
charter documents.
(c) Capitalization. The number of authorized, issued
and outstanding shares of capital stock of the Company is set forth in Schedule
2.1(c). No shares of Common Stock are entitled to preemptive or similar rights,
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
of the Transaction Documents, except as set forth in Schedule 2.1(c). Except as
disclosed in Schedule 2.1(c), there are no outstanding options, warrants, script
rights to subscribe to, calls or commitments of any character whatsoever
relating to, or, except as a result of the purchase and sale of the Shares and
the Warrant, securities, rights or obligations convertible into or exchangeable
for, or giving any Person any right to subscribe for or acquire any shares of
Common Stock, or contracts, commitments, understandings, or arrangements by
which the Company or any Subsidiary is or may become bound to issue additional
shares of Common Stock, or securities or rights convertible or exchangeable into
shares of Common Stock. To the knowledge of the Company, except as specifically
disclosed in the SEC Documents (as defined below) or Schedule 2.1(c), 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 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. A "Person" 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) Issuance of the Shares and the Warrant. The
Shares and the Warrant are duly authorized, and, when issued and paid for in
accordance with the terms hereof, will be validly issued, fully paid and
nonassessable, free and clear of all liens, encumbrances and rights of first
refusal of any kind (collectively, "Liens"). The Company has on the date hereof
and, at all times while the Shares and the Warrant are outstanding, will
maintain an adequate reserve of duly authorized shares of Common Stock, reserved
for issuance to the holders of the Shares and the Warrant to enable it to
perform its conversion, exercise and other obligations under this Agreement, the
Certificate of Designations and the Warrant. Such number of reserved and
available shares of Common Stock shall be not less than the sum of (i) the
number of shares of Common Stock which would be issuable upon conversion in full
of the Shares, assuming such conversion were effected on the Closing Date or the
Filing Date (as defined in the Registration Rights Agreement), whichever yields
a lower Conversion Price, (ii) the number of shares of Common Stock issuable
upon exercise in full of the Warrant, and (iii) 175% of the number of shares of
Common Stock which would be issuable upon conversion of additional Shares issued
as payment of dividends on the Shares (such additional Shares, the "Dividend
Shares"), assuming each Share and Dividend Share is outstanding for two years
and all dividends are paid in the form of Dividend Shares. The shares of Common
Stock issuable upon conversion of the Shares and Dividend Shares and upon
exercise of the Warrant are collectively referred to
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herein as the "Underlying Shares." The Shares, the Dividend Shares, the Warrant
and the Underlying Shares are collectively referred to herein as the
"Securities." When issued in accordance with the Certificate of Designations and
upon exercise of the Warrant, in accordance with their respective terms, the
Underlying Shares will be duly authorized, validly issued, fully paid and
nonassessable, free and clear of all Liens.
(e) No Conflicts. The execution, delivery and
performance of the Transaction Documents by the Company and the consummation by
the Company of the transactions contemplated thereby do not and will not (i)
conflict with or violate any provision of its certificate of incorporation,
bylaws or other charter documents (each as amended through the date hereof), or
(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, credit facility,
indenture or instrument (evidencing a Company 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 is
subject (including Federal and state securities laws and regulations), or by
which any property or asset of the Company is bound or affected, except in the
case of each of clauses (ii) and (iii), as is not reasonably likely to,
individually or in the aggregate, have or result in a Material Adverse Effect.
The business of the Company is not being conducted in violation of any law,
ordinance or regulation of any governmental authority, except for violations
which, individually or in the aggregate, are not reasonably likely to have or
result in a Material Adverse Effect.
(f) Consents and Approvals. Except as specifically
set forth in Schedule 2.1(f), neither the Company nor any Subsidiary is required
to obtain 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 or other Person in connection with the
execution, delivery and performance by the Company of the Transaction Documents,
other than (i) the filings of the Certificate of Designations with the Secretary
of State of Delaware, (ii) the filing of an initial Registration Statement with
the Securities and Exchange Commission (the "Commission") pursuant to the
Registration Rights Agreement (the "Underlying Securities Registration
Statement"), (iii) the application(s) to the Nasdaq National Market ("NASDAQ")
for the listing of the Underlying Shares with the NASDAQ (and with any other
national securities exchange or market on which the Common Stock is then
listed), (iv) the filing of a Form D with the Commission, and (v) in all other
cases where the failure to obtain such consent, waiver, authorization or order,
or to give such notice or make such filing or registration is not reasonably
likely to have or result in, individually or in the aggregate, a Material
Adverse Effect (together with the consents, waivers, authorizations, orders,
notices and filings referred to in Schedule 2.1(f), the "Required Approvals").
(g) Litigation; Proceedings. Except as specifically
disclosed in the SEC Documents, there is no action, suit, notice of 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
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administrative agency or regulatory authority (Federal, state, county, local or
foreign) which is reasonably likely, individually or in the aggregate, to have
or result in a Material Adverse Effect.
(h) No Default or Violation. Except as set forth in
Schedule 2.1(h), neither the Company nor any Subsidiary (i) is in default under
or in violation of (and no event has occurred which has not been waived which,
with notice or lapse of time or both, would result in a default by the Company
or any Subsidiary under), nor has the Company or any Subsidiary received notice
of a claim that it is in default under or that it is in violation of, any
indenture, loan or 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, (ii) is in
violation of any order of any court, arbitrator or governmental body, or (iii)
is in violation of any statute, rule or regulation of any governmental
authority, except, with respect to each of (i), (ii) and (iii), as is not
reasonably likely, individually or in the aggregate, to have or result in a
Material Adverse Effect.
(i) Private Offering. Assuming the accuracy of the
representations and warranties of the Purchaser set forth in Sections
2.2(b)-(g), the offer, issuance and sale of the Securities to the Purchaser as
contemplated hereby are exempt from the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act"). Neither the Company
nor any Person acting on its behalf has taken any action which might subject the
offering, issuance or sale of the Securities to the registration requirements of
the Securities Act.
(j) SEC Documents; Financial Statements. The Company
has filed all reports required to be filed by it under the Exchange Act,
including pursuant to Section 13(a) or 15(d) thereof, for the two years
preceding the date hereof (or such shorter period as the Company was required by
law to file such material) (the foregoing materials being collectively referred
to herein as the "SEC Documents" and, together with the Schedules to this
Agreement the "Disclosure Materials") on a timely basis or has received a valid
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 material agreements to which the Company is a party or to which
the property or assets of the Company are subject have been filed as exhibits to
the SEC Documents as required. The financial statements of the Company included
in the SEC Documents comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing. Such financial statements were
prepared in accordance with generally accepted accounting principles applied on
a consistent basis ("GAAP") 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 the results of operations and cash flows for
the periods then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments. Since October 31, 1998, except as
specifically disclosed in the SEC Documents, (a) there has been no event,
occurrence or development that has resulted or is reasonably expected to result
in a Material Adverse Effect, (b) the Company has not incurred any liabilities
(contingent or otherwise) other than (x)
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liabilities incurred in the ordinary course of business consistent with past
practice and (y) liabilities not required to be reflected in the Company's
financial statements pursuant to GAAP, (c) the Company has not altered its
method of accounting or the identity of its auditors and (d) the Company has not
declared or made any payment or distribution of cash or other property to its
stockholders or officers or directors (other than in compliance with existing
Company stock option plans or other existing plan for the benefit of the
Company's employees described in the SEC Documents) with respect to its capital
stock, or purchased, or redeemed (or made any agreements to purchase or redeem)
any shares of its capital stock. The Company last filed audited financial
statements with the Commission on January 15, 1999, and has not received any
comments from the Commission in respect thereof.
(k) Investment Company. The Company is not, and is
not an Affiliate (as defined in Rule 405 under the Securities Act) of, an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
(l) Certain Fees. Except for certain fees payable by
the Company to Jesup & Xxxxxx Securities Corp., no fees or commissions will be
payable by the Company to any broker, financial advisor or consultant, finder,
placement agent, investment banker, or bank with respect to the transactions
contemplated by this Agreement. The Purchaser shall have no obligation with
respect to any fees or with respect to any claims made by or on behalf of other
Persons for fees of a type contemplated in this Section that may be due in
connection with the transactions contemplated by this Agreement. The Company
shall indemnify and hold harmless the Purchaser, its employees, officers,
directors, agents, and partners, and their respective Affiliates, from and
against all claims, losses, damages, costs (including the costs of preparation
and reasonable attorney's fees) and expenses suffered in respect of any such
claimed or existing fees, as such fees and expenses are incurred.
(m) Solicitation Materials. Neither the Company nor
any Person acting on the Company's behalf has (i) distributed any offering
materials in connection with the offering and sale of the Securities, or (ii)
solicited any offer to buy or sell the Securities by means of any form of
general solicitation or advertising.
(n) Form S-3 Eligibility. The Company is eligible to
register securities for resale with the Commission under Form S-3 promulgated
under the Securities Act.
(o) Seniority. No class of equity securities of the
Company is senior to the Shares in right of payment, whether upon liquidation or
dissolution, or otherwise.
(p) Patents and Trademarks. The Company has, or has
rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, licenses and rights
(collectively, the "Intellectual Property Rights") which the Company reasonably
believes are necessary for use in connection with its business, and which the
failure to so have would have a Material Adverse Effect. To the best knowledge
of the Company, all such Intellectual Property Rights are enforceable and there
is no existing infringement by another Person of any of the Intellectual
Property Rights that is reasonably likely to have a Material Adverse Effect.
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(q) Listing and Maintenance Requirements Compliance.
The Company has not in the two years preceding the date hereof received notice
(written or oral) from NASDAQ or any other 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 respect to
the Common Stock with the listing or maintenance requirements of such exchange
or market.
(r) Registration Rights; Rights of Participation.
Except as described on Schedule 6(b) to the Registration Rights Agreement, (i)
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 Commission or any other governmental authority which
has not been satisfied and (ii) no Person, has any right of first refusal,
preemptive right, right of participation, or any similar right to participate in
the transactions contemplated by the Transaction Documents.
(s) Regulatory Permits. The Company and the
Subsidiaries possess all certificates, authorizations and permits issued by the
appropriate Federal, state or foreign regulatory authorities necessary to
conduct their respective businesses as described in the SEC Documents, except
where the failure to possess such permits could not, individually or in the
aggregate, have or result in a Material Adverse Effect.
(t) Disclosure. The Company confirms that it has not
provided the Purchaser or its agents or counsel with any information that
constitutes or might constitute material non-public information, other than
information the substance of which will be disclosed upon the filing by the
Company of its next Quarterly Report in Form 10-Q or the Underlying Securities
Registration Statement filed by the Company with the Commission pursuant to the
Registration Rights Agreement or which within 60 days from the date hereof will
cease to be material nonpublic information. The Company understands and confirms
that the Purchaser shall be relying on the foregoing representations in
effecting transactions in securities of the Company.
2.2 Representations and Warranties of the Purchaser. The
Purchaser hereby represents and warrants to the Company as follows:
(a) Organization: Authority. The Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, with the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by the
Transaction Documents and otherwise to carry out its obligations thereunder. The
purchase by the Purchaser of the Securities hereunder has been duly authorized
by all necessary action on the part of the Purchaser. Each of this Agreement and
the Registration Rights Agreement has been duly executed and delivered by the
Purchaser and constitutes the valid and legally binding obligation of the
Purchaser, enforceable against it in accordance with its terms.
(b) Investment Intent. The Purchaser is acquiring the
Securities for its own account for investment purposes only and not with a view
to or for distributing or reselling such Securities or any part thereof or
interest therein, without prejudice, however, to the
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Purchaser's right, subject to the provisions of this Agreement and the
Registration Rights Agreement, at all times to sell or otherwise dispose of all
or any part of such Securities pursuant to an effective registration statement
under the Securities Act and in compliance with applicable state securities laws
or under an exemption from such registration.
(c) Purchaser Status. At the time the Purchaser was
offered the Shares and the Warrant, it was, and at the date hereof, it is, and
at each exercise date under the Warrant, it will be, an "accredited investor" as
defined in Rule 501(a) under the Securities Act.
(d) Experience of the Purchaser. The Purchaser,
either alone or together with its representatives, has 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
Securities, and has so evaluated the merits and risks of such investment.
(e) Ability of the Purchaser to Bear Risk of
Investment. The Purchaser is able to bear the economic risk of an investment in
the Securities and, at the present time, is able to afford a complete loss of
such investment.
(f) Access to Information. The Purchaser acknowledges
receipt of the Disclosure Materials and further acknowledges that it has
reviewed the Disclosure Materials and has been afforded (i) the opportunity to
ask such questions as it has deemed necessary of, and to receive answers from,
representatives of the Company concerning the terms and conditions of the
offering of the Securities and the merits and risks of investing in the
Securities; (ii) access to information about the Company and the Company's
financial condition, results of operations, business, properties, management and
prospects sufficient to enable it to evaluate its investment; and (iii) the
opportunity to obtain such additional information which the Company possesses or
can acquire without unreasonable effort or expense that is necessary to make an
informed investment decision with respect to the investment and to verify the
accuracy and completeness of the information contained in the Disclosure
Materials.
(g) General Solicitation. The Purchaser is not
purchasing the Shares as a result of or subsequent to any advertisement,
article, notice or other communication published in any newspaper, magazine or
similar media or broadcast over television or radio or presented at any seminar.
(h) Reliance. The Purchaser understands and
acknowledges that (i) the Securities are being offered and sold to it without
registration under the Securities Act in a private placement that is exempt from
the registration provisions of the Securities Act and (ii) the availability of
such exemption, depends in part on, and the Company will rely upon the accuracy
and truthfulness of, the foregoing representations and the Purchaser hereby
consents to such reliance.
The Company acknowledges and agrees that the Purchaser makes
no representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section 2.2.
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ARTICLE III
OTHER AGREEMENTS OF THE PARTIES
3.1 Transfer Restrictions. (a) Securities may only be disposed
by the Purchaser or a subsequent transferee of the Securities pursuant to an
effective registration statement under the Securities Act, to the Company or
pursuant to an available exemption from or in a transaction not subject to the
registration requirements of the Securities Act. In connection with any transfer
of Securities other than pursuant to an effective registration statement or to
the Company, except as otherwise set forth herein, the Company may require the
transferor thereof to provide to the Company an opinion of counsel selected by
the transferor and reasonably satisfactory to the Company, the form and
substance of which opinion shall be reasonably satisfactory to the Company, to
the effect that such transfer does not require registration under the Securities
Act. Notwithstanding the foregoing, the Company hereby consents to and agrees to
register on the books of the Company and with any transfer agent for the
securities of the Company any transfer of Securities by the Purchaser to an
Affiliate of the Purchaser or to a fund under common management with the
Purchaser, or any transfer among any such Affiliates or funds, provided that
transferee certifies to the Company that it is an "accredited investor" as
defined in Rule 501(a) under the Securities Act and that it is acquiring the
Securities solely for investment purposes. Any such transferee shall agree in
writing to be bound by the terms of this Agreement and shall have the rights of
the Purchaser under this Agreement and the Registration Rights Agreement.
(b) The Purchaser agrees to the imprinting, so long
as is required by this Section 3.1(b), of the following legend on the
Securities:
NEITHER THESE SECURITIES NOR THE SECURITIES INTO
WHICH THESE SECURITIES ARE [CONVERTIBLE] [EXERCISABLE] HAVE BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE 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 AND IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.
Underlying Shares shall not contain the legend set forth above
nor any other legend if the conversion of Shares and Dividend Shares, exercise
of the Warrant or other issuances of Underlying Shares as contemplated hereby or
by the Certificate of Designations occurs at any time while an Underlying
Securities Registration Statement is effective under the Securities Act or in
the event there is not an effective Underlying Securities Registration Statement
at such time, if in the opinion of counsel to the Company such legend is not
required under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the Commission). The
Company shall cause its counsel to issue the Transfer Agent Instructions to the
Company's transfer agent on the day that the Underlying Securities Registration
Statement is declared effective by the Commission. The
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Company agrees that it will provide the Purchaser, upon request, with a
certificate or certificates representing Underlying Shares, free from such
legend at such time as such legend is no longer required hereunder. The Company
may not make any notation on its records or give instructions to any transfer
agent of the Company which enlarge the restrictions of transfer set forth in
this Section.
3.2 Acknowledgment of Dilution. The Company acknowledges that
the issuance of the Underlying Shares upon (i) conversion of the Shares and
Dividend Shares in accordance with the terms of the Certificate of Designations,
and (ii) exercise of the Warrant, may result in dilution of the outstanding
shares of Common Stock, which dilution may be substantial under certain market
conditions. The Company further acknowledges that its obligation to issue
Underlying Shares upon (x) conversion of the Shares and Dividend Shares in
accordance with the terms of the Certificate of Designations, and (y) exercise
of the Warrant, is unconditional and absolute, subject to the limitations set
forth in this Agreement, in the Certificate of Designations or pursuant to the
Warrant, regardless of the effect of any such dilution.
3.3 Furnishing of Information. As long as the Purchaser owns
Securities, the Company covenants to 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(a) or 15(d) of the Exchange Act. As long as the Purchaser owns Securities, if
the Company is not required to file reports pursuant to such sections, it will
prepare and furnish to the Purchaser and make publicly available in accordance
with Rule 144(c) promulgated under the Securities Act annual and quarterly
financial statements, together with a discussion and analysis of such financial
statements in form and substance substantially similar to those that would
otherwise be required to be included in reports required by Section l3(a) or
15(d) of the Exchange Act, as well as any other information required thereby, in
the time period that such filings would have been required to have been made
under the Exchange Act. The Company further covenants that it will take such
further action as any holder of Securities may reasonably request, all to the
extent required from time to time to enable such Person to sell Underlying
Shares without registration under the Securities Act within the limitation of
the exemptions provided by Rule 144 promulgated under the Securities Act,
including the legal opinion referenced above in this Section. Upon the
reasonable request of any such Person, the Company shall deliver to such Person
a written certification of a duly authorized officer as to whether it has
complied with such requirements.
3.4 Blue Sky Laws. In accordance with the Registration Rights
Agreement, the Company shall qualify or exempt the issuance and sale of the
Underlying Shares under the securities or Blue Sky laws of such jurisdictions as
the Purchaser may reasonably request and shall continue such qualification or
exemption at all times until the Purchaser notifies the Company in writing that
it no longer owns Securities; provided, however, that neither the Company nor
its Subsidiaries shall be required in connection therewith to qualify as a
foreign corporation where they are not now so qualified or to take any action
that would subject the Company to general service of process in any such
jurisdiction where it is not then required to be so subject or subject the
Company to any material tax in any such jurisdiction where it is not then so
subject.
12
3.5 Integration. The Company shall not, and shall use its best
efforts to ensure that, no Affiliate shall, 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 Securities in a manner that would require the registration under the
Securities Act of the sale of the Securities to the Purchaser.
3.6 Increase in Authorized Shares. At such times as the
Company would be, if a notice of conversion or exercise (as the case may be)
were to be delivered on such date, precluded from (a) converting 175% of the
Shares and Dividend Shares outstanding that remain unconverted at such date, or
(b) honoring the exercise in full of the Warrant due to the unavailability of a
sufficient number of shares of authorized but unissued or reacquired Common
Stock, the Board of Directors of the Company shall promptly (and in any case,
within thirty (30) Business Days from such date) prepare and mail to the
stockholders of the Company proxy materials requesting authorization to amend
the Company's Certificate of Incorporation to increase the number of shares of
Common Stock which the Company is authorized to issue to at least such number of
shares as reasonably requested by the Purchaser in order to provide for such
number of authorized and unissued shares of Common Stock to enable the Company
to comply with its conversion, exercise and reservation of shares obligations as
set forth in this Agreement, the Certificate of Designations and the Warrant
(the sum of (x) the number of then authorized shares of Common Stock, (y) the
number of shares of Common Stock then outstanding plus all shares of Common
Stock issuable upon exercise of all outstanding options, warrants and
convertible instruments, and (z) the sum of (i) 175% of the number of Underlying
Shares as are then issuable upon a conversion in full of all Shares and Dividend
Shares, and (ii) the number of Underlying Shares as are issuable upon exercise
in full of the Warrant, shall be a reasonable number). In connection therewith,
the Board of Directors shall (a) adopt proper resolutions authorizing such
increase, (b) recommend to and otherwise use its best efforts to promptly and
duly obtain stockholder approval to carry out such resolutions (and hold a
special meeting of the stockholders no later than the sixtieth (60th) day after
delivery of the proxy materials relating to such meeting) and (c) within five
(5) Business Days of obtaining such stockholder authorization, file an
appropriate amendment to the Company's Certificate of Incorporation to evidence
such increase.
3.7 Reservation of Underlying Shares. The Company shall
maintain a reserve of Common Stock for issuance upon conversion of the Shares
and Dividend Shares, and upon exercise of the Warrant in accordance with its
terms, in such amount as may be required to perform its obligations in full
under the Transaction Documents, which reserve shall include a number of shares
of Common Stock equal to no less than two times the number of shares of Common
Stock as would be issuable upon conversion in full of the Shares and Dividend
Shares, and upon exercise in full of the Warrant.
3.8 [Intentionally omitted.]
3.9 Conversion Procedures. The Transfer Agent Instructions,
Conversion Notice (as defined in Exhibit A) and Notice of Exercise under the
Warrant set forth the totality of the procedures with respect to the conversion
of the Shares and Dividend Shares and exercise of the Warrant, including the
form of legal opinion, if necessary, that shall be rendered to the Company's
transfer agent and such other information and instructions as may be reasonably
13
necessary to enable the Purchaser to convert its Shares and Dividend Shares and
exercise the Warrant as contemplated in the Certificate Designations and the
Warrant (as applicable).
3.10 Notice of Breaches. (a) Each of the Company and the
Purchaser shall give prompt written notice to the other of any material breach
by it of any representation, warranty or other agreement contained in any
Transaction Document, as well as any events or occurrences arising after the
date hereof which would reasonably be likely to cause any representation or
warranty or other agreement of such party, as the case may be, contained therein
to be incorrect or breached as of the Closing Date. However, no disclosure by
either party pursuant to this Section shall be deemed to cure any breach of any
representation, warranty or other agreement contained in any Transaction
Document.
(b) Notwithstanding the generality of Section
3.10(a), the Company shall promptly notify the Purchaser of any notice or claim
(written or oral) that it receives from any lender of the Company to the effect
that the consummation of the transactions contemplated by the Transaction
Documents violates or would violate any written agreement or understanding
between such lender and the Company, and the Company shall promptly furnish by
facsimile to the holders of the Shares a copy of any written statement in
support of or relating to such claim or notice.
3.11 Conversion and Exercise Obligations of the Company. The
Company shall honor conversions of the Shares and Dividend Shares and exercises
of the Warrant and shall deliver Underlying Shares in accordance with the
respective terms and conditions and time periods set forth in the Certificate of
Designations and the Warrant.
3.12 Subsequent Registrations and Resale Restrictions. (a)
Except for (w) Underlying Shares, (x) other "Registrable Securities" (as such
term is defined in the Registration Rights Agreement) to be registered in
accordance with the Registration Rights Agreement, (y) the securities listed on
Schedule 6(b) to the Registration Rights Agreement, and (z) Company securities
to be registered for resale in connection with any rights of first refusal of
Jesup & Xxxxxx Securities Corp. ("Jesup") pursuant to that certain letter
agreement between Jesup and the Company dated the date hereof, the Company shall
not, without the prior written consent of the Purchaser (i) issue or sell any of
its or any of its Affiliates' equity or equity-equivalent securities pursuant to
Regulation S promulgated under the Securities Act, or (ii) register for resale
any securities of the Company for a period of not less than ninety (90) Trading
Days after the later to occur of (1) the date that an Underlying Securities
Registration Statement is declared effective by the Commission and (2) the
ninetieth (90th) Trading Day after the Closing Date. Any days that the Purchaser
is unable to sell Underlying Shares under an Underlying Securities Registration
Statement shall be added to such 90 Trading Day period.
3.13 Certain Securities Laws Disclosures; Publicity. Pursuant
to the Closing, the Company shall (i) timely file with the Commission a Form D
promulgated under the Securities Act as required under Regulation D promulgated
under the Securities Act and provide a copy thereof to the Purchaser promptly
after the filing thereof, and (ii) file with the Commission a Report on Form 8-K
or, if permitted, Form 10-Q disclosing the transactions contemplated hereby
within ten (10) Business Days after the Closing Date.
14
3.14 Use of Proceeds. The Company shall use the net proceeds
from the sale of the Securities hereunder for working capital purposes and not
for the satisfaction of any portion of Company debt (other than capitalized
lease obligations) or to redeem any Company equity or equity equivalent
securities. Pending application of the proceeds of this placement in the manner
permitted hereby, the Company will invest such proceeds in interest bearing
accounts and/or short-term, investment grade interest bearing securities.
3.15 Reimbursement. If the Purchaser, other than by reason of
its gross negligence or willful misconduct, becomes involved in any capacity in
any action, proceeding or investigation brought by or against any Person,
including stockholders of the Company, in connection with or as a result of the
consummation of the transactions contemplated by Transaction Documents, the
Company will reimburse the Purchaser for its reasonable legal and other expenses
(including the cost of any investigation and preparation) incurred in connection
therewith, as such expenses are incurred. In addition, other than with respect
to any matter in which the Purchaser is a named party, the Company will pay the
Purchaser the charges, as reasonably determined by the Purchaser, for the time
of any officers or employees of the Purchaser devoted to appearing and preparing
to appear as witnesses, assisting in preparation for hearings, trials or
pretrial matters, or otherwise with respect to inquiries, hearings, trials, and
other proceedings relating to the subject matter of this Agreement. The
reimbursement 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 Affiliates of the Purchaser who are
actually named in such action, proceeding or investigation, and partners,
directors, agents, employees and controlling persons (if any), as the case may
be, of the Purchaser 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 Purchaser and any such Affiliate and any such Person. The
Company also agrees that neither the Purchaser nor 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 the
Transaction Documents except to the extent that any losses, claims, damages,
liabilities or expenses incurred by the Company result from the gross negligence
or willful misconduct of the Purchaser or entity in connection with the
transactions contemplated by this Agreement.
3.16 Exclusivity. The Company shall not issue and sell any
Shares to any Person other than the Purchaser except with the specific prior
written consent of the Purchaser.
ARTICLE IV
MISCELLANEOUS
4.1 Fees and Expenses. On the Closing Date, the Purchase Price
shall be reduced by (i) $90,000 to be paid to Jesup & Xxxxxx Securities Corp.,
and (ii) $10,500 to be paid to Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLP
in connection with legal fees and expenses relating to the Closing, in each case
directly from the Purchaser. Other than the amounts contemplated in the
immediately prior sentence, and except as otherwise 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
15
incident to the negotiation, preparation, execution, delivery and performance of
this Agreement. The Company shall pay all stamp and other taxes and duties
levied in connection with the issuance of the Securities pursuant hereto.
4.2 Entire Agreement; Amendments. This Agreement, together
with the Exhibits and Schedules hereto, the Registration Rights Agreement, the
Certificate of Designations and the Warrant 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,
which the parties acknowledge have been merged into such documents, exhibits and
schedules.
4.3 Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via confirmed
facsimile at the facsimile telephone number specified in this Section prior to
8:00 p.m. (New York City time) on a Business Day, (ii) the Business Day after
the date of transmission, if such notice or communication is delivered via
confirmed facsimile at the facsimile telephone number specified below later than
8:00 p.m. (New York City time) on any date and earlier than 11:59 p.m. (New York
City time) on such date, (iii) the Business Day following the date of mailing,
if sent by nationally recognized overnight courier service, or (iv) upon actual
receipt by the party to whom such notice is required to be given. The address
for such notices and communications shall be as follows:
If to the Company: Ecogen Inc.
0000 Xxxxx Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Chief Financial Officer
With copies to: Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
0000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxxxxx X. Xxxxxx, Esq.
If to Purchaser: Amro International, S.A.
c/o Ultra Finance, Ltd.
Grossmuenster Xxxxx 00, X.X. Xxx 0000
Xxxxxx, Xxxxxxxxxxx, CH 8022
Facsimile No.: ( )
Attn: Xxxxxx Xxxxxx
Aspen International, Ltd.
Charlotte House, Charlotte St.
Nassau Bahamas
Facsimile No.: (000) 000-0000
00
Xxxxxxx Xxxxxxxx Xxxxxxx
Xxxxx 0X and 8B
50 Town Range
Gibraltar
Facsimile No.: 011-350-40-40-4
Attention: J. Xxxxx Xxxxxx
or such other address as may be designated in writing hereafter, in the same
manner, by such Person.
4.4 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 the Purchaser; 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.
4.5 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.
4.6 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 the Purchaser. Except as set
forth in Section 3.1(a), the Purchaser may not assign this Agreement or any of
the rights or obligations hereunder without the consent of the Company. This
provision shall not limit the Purchaser's right to transfer securities or
transfer or assign rights hereunder or under the Registration Rights Agreement,
each in accordance with the terms of this Agreement.
4.7 No Third-Party Beneficiaries. This Agreement is intended
for the benefit of the parties hereto and their respective successors and
permitted assigns and is not for the benefit of, nor may any provision hereof be
enforced by, any other Person.
4.8 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.
4.9 Survival. The representations, warranties, agreements and
covenants contained herein shall survive the Closing and the delivery and
conversion or exercise (as the case may be) of the Shares, the Dividend Shares
and the Warrant.
4.10 Execution. 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
17
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.
4.11 Publicity. The Company and the Purchaser 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 the
disclosing party shall provide the other party with prior notice of such public
statement. Notwithstanding the foregoing, the Company shall not publicly
disclose the name of the Purchaser without the prior written consent of the
Purchaser, except to the extent such disclosure (but not any disclosure as to
the controlling Persons thereof) is required by law, in which case the Company
shall provide the Purchaser with prior notice of such disclosure.
4.12 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.
4.13 Remedies. In addition to being entitled to exercise all
rights provided herein or granted by law, including recovery of damages, the
Purchaser will be entitled to specific performance of the obligations of the
Company under the Transaction Documents. Each of the Company and the Purchaser
agree that monetary damages may not be adequate compensation for any loss
incurred by reason of any breach of its obligations described in the foregoing
sentence and hereby agrees to waive in any action for specific performance of
any such obligation the defense that a remedy at law would be adequate.
4.14 Independent Nature of Purchasers' Obligations and Rights.
The obligations of each Purchaser under any Transaction Document is several and
not joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser under any Transaction Document. Nothing contained herein or in any
Transaction Document, and no action taken by any Purchaser pursuant 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 the Transaction Document. Each Purchaser shall
be entitled to independently protect and enforce its rights, including without
limitation the rights arising out of this Agreement or out of the other
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.
18
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOLLOWS]
19
IN WITNESS WHEREOF, the parties hereto have caused this
Convertible Preferred Stock Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated above.
ECOGEN INC.
By:
-------------------------------------
Name: Xxxxx X. Xxxxxx, Xx.
Title: Chairman and CEO
AMRO INTERNATIONAL, S.A.
By:
-------------------------------------
Name:
Title:
ASPEN INTERNATIONAL, LTD.
By:
-------------------------------------
Name:
Title:
MARKHAM HOLDINGS LIMITED
By:
-------------------------------------
Name:
Title:
20
SCHEDULE 1.3
--------------------------------------------------------------------------------------------------------------------------
Purchaser Shares to be delivered Warrants to be delivered Purchase Price to be
by Company by Company delivered by Purchaser
--------------------------------------------------------------------------------------------------------------------------
Amro International S.A. 8,000 106,667 $800,000
--------------------------------------------------------------------------------------------------------------------------
Aspen International, Ltd. 5,000 66,667 $500,000
--------------------------------------------------------------------------------------------------------------------------
Markham Holdings Limited 2,000 26,666 $200,000
--------------------------------------------------------------------------------------------------------------------------
21
SCHEDULE 2.1(a)
SUBSIDIARIES*
State or Other Jurisdiction of
Name of Subsidiary Incorporation or Organization
------------------ -----------------------------
Ecogen-Bio Inc. Delaware
Ecogen Investments Inc. Delaware
Ecogen-Jerusalem Inc. Delaware
Ecogen-Israel Delaware
Ecogen-Technologies I Incorporated Delaware
Ecogen-Bio Germany GmbH Germany
Ecogen Biotechnologies Israel Ltd. Israel
Ecogen Israel International Inc. Delaware
* All of the subsidiaries listed above are wholly-owned subsidiaries of
Ecogen Inc. with the exception of Ecogen Technologies I Incorporated of
which Ecogen Inc. owns approximately 70% of the outstanding common
stock. The following corporations, all of which were incorporated under
the laws of the state of Delaware, are wholly-owned subsidiaries of
Ecogen Technologies I Incorporated; Ecoresearch Mildew I Inc.,
Ecoresearch Harvest Rot II Inc., Ecoresearch Corn Borer III Inc.,
Ecoresearch Nematodes IV Inc., Ecoresearch Rootworm V Inc. and
Ecoresearch Turf VI Inc.
22
SCHEDULE 2.1(c)
CAPITALIZATION
1. Prior to the Closing, the authorized capital stock of the Company
consists of 42,000,000 shares of Common Stock, par value $0.01, and
7,500,000 shares of Preferred Stock, par value $0.01, the terms of
which will be determined by the Company's Board of Directors as and
when such shares are issued. Of the 7,500,000 shares of Preferred
Stock, 35,000 have been designated Series 1998-A Convertible Preferred
Stock, 50,000 have been designated Series 0000-X Xxxxxxxxxxx Preferred
Stock and 30,000 have been designated Series 1999-A Convertible
Preferred Stock. As of January 31, 2000, 10,509,263 shares of Common
Stock, no shares of Series 1998-A Convertible Preferred Stock 32,354
shares of Series 0000-X Xxxxxxxxxxx Preferred Stock and 7,500 shares of
Series 1999-A Convertible Preferred Stock were outstanding.
2. The Convertible Preferred Stock Purchase Agreement, dated as of August
20, 1998, between Ecogen Inc. and United Equities (Commodities)
Company, among other things, provides: (i) United Equities has certain
anti-dilution protections in the event Ecogen issues shares of its
common stock or securities convertible into common stock; and (ii)
United Equities has certain registration rights.
3. As of January 31, 2000, the Company had outstanding options to purchase
up to 384,526 shares of the Company's Common Stock pursuant to the
terms of the Company's 1987 Stock Option Plan (the "1987 Plan"). No
grants of stock options have been made under the 1987 Plan since July
31, 1998. As of January 31, 2000, the Company had outstanding options
to purchase up to 525,000 shares of the Company's Common Stock pursuant
to the terms of the Company's 1998 Stock Option Plan (the "1998 Plan").
No additional stock options will be granted under the 1998 Plan. As of
January 31, 2000, the Company had outstanding options to purchase up to
908,000 shares of the Company's Common Stock pursuant to the terms of
the Company's 1999 Stock Option Plan (the "1999 Plan"). Up to 592,000
shares of the Company's Common Stock are available for issuance in
connection with options to be granted under the 1999 Plan. As of
January 31, 2000, the Company had outstanding warrants and options
(exclusive of options issued under the 1987 Plan, the 1998 Plan and the
1999 Plan) to purchase up to 629,121 shares of the Company's Common
Stock.
4. The Convertible Preferred Stock Purchase Agreements, dated as of June
5, 1998 and May 2, 1999, respectively, between the Company and KA
Investments LDC, each provide, among other things, that: (i) KA
Investments LDC has certain anti-dilution protection in the event the
Company issues shares of its Common Stock or securities convertible
into its Common Stock and (ii) KA Investments LDC has certain
registration rights.
5. Investment Agreement, dated as of January 24, 1996, between Ecogen Inc.
and Monsanto Company, among other things, provides: (i) Monsanto has a
right of first refusal in the event Ecogen sells shares of its common
stock or other voting securities; and (ii) certain registration rights.
23
SCHEDULE 2.1(f)
CONSENTS AND APPROVALS
Monsanto Company
Congress Financial Corporation
The Berkshire Bank
24
SCHEDULE 2.1(h)
NO DEFAULT OR VIOLATION
The Company is not in compliance with the net worth and working capital
covenants contained in the Loan and Security Agreement between the Company and
Congress Financial Corporation ("Congress") dated August 20, 1998. Congress has
not declared the Company in default under such covenants. The Company expects
Congress to waive compliance with such covenants.
