SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE
AGREEMENT (“Agreement”) is made
as of the ___ day of December, 2008, by and among Emy’s Salsa Aji Distribution
Company, Inc., a Nevada corporation (the “Company”), and the
Investors set forth on the signature page affixed hereto (each an “Investor” and
collectively, the “Investors”).
Recitals:
A. The
Company and the Investors are executing and delivering this Agreement in
connection with an offering of securities of the Company (the “Offering”) in
reliance upon the exemption from securities registration afforded by the
provisions of Regulation D (“Regulation D”), as
promulgated by the United States Securities and Exchange Commission (the “SEC”) under the
Securities Act of 1933, as amended (the “1933 Act”);
and
B. The
Investors wish to purchase from the Company, and the Company wishes to sell and
issue to the Investors, upon the terms and conditions stated in this Agreement,
shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”)
aggregating $375,000 (the “Investment”)
C. The
purchase price for the Investment shall be $1.00 per share of Common Stock (the
“Purchase
Price”); and
D. Pursuant
to its terms an aggregate of up to 375,000 shares of Common Stock may be sold in
this Offering.
In consideration of the mutual promises
made herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Definitions. In addition to
those terms defined above and elsewhere in this Agreement, for the purposes of
this Agreement, the following terms shall have the meanings set forth
below:
“Affiliate” means,
with respect to any Person, any other Person which directly or indirectly
through one or more intermediaries Controls, is controlled by, or is under
common control with, such Person.
“Business Day” means a
day, other than a Saturday or Sunday, on which banks in New York City are open
for the general transaction of business.
“Common Stock” means
the Company’s common stock, par value $0.001 per share, and any securities into
which the common stock may be reclassified.
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“Company’s Knowledge”
means the actual knowledge of the executive officers (as defined in Rule 405
under the 0000 Xxx) of the Company, after due inquiry.
“Control” (including
the terms “controlling”, “controlled by” or “under common control with”) means
the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
“Material Adverse
Effect” means a material adverse effect on (i) the assets, liabilities,
results of operations, condition (financial or otherwise), business, or
prospects of the Company and its Subsidiaries taken as a whole, or (ii) the
ability of the Company to perform its obligations under this
Agreement.
“Person” means an
individual, corporation, partnership, limited liability company, trust, business
trust, association, joint stock company, joint venture, sole proprietorship,
unincorporated organization, governmental authority or any other form of entity
not specifically listed herein.
“SEC Filings” has the
meaning set forth in Section 4.6.
“Securities” means the
Common Stock purchased pursuant to this Agreement.
“Shares” means the
shares of Common Stock to be purchased in connection with the
Offering.
“Subsidiary” of any
Person means another Person, an amount of the voting securities, other voting
ownership or voting partnership interests of which is sufficient to elect at
least a majority of its Board of Directors or other governing body (or, if there
are no such voting interests, 50% or more of the equity interests of which) is
owned directly or indirectly by such first Person.
“1933 Act” has the
meaning set forth in the Recitals above.
“1934 Act” means the
Securities Exchange Act of 1934, as amended, or any successor statute, and the
rules and regulations promulgated thereunder.
2. Purchase and Sale of the
Units.
2.1 Purchase and
Sale. Subject to the terms and
conditions of this Agreement, on the Closing Date, the Investors shall
severally, and not jointly, purchase, and the Company shall sell and issue to
the Investor, shares of Common Stock in the respective amounts set forth
opposite the Investor’s names on the signature pages attached hereto in exchange
for payment of each Investor’s pro rata share of the Purchase Price as specified
in Section 3 below; provided, however, that not
more than $375,000 of Common Stock at a price of $1.00 per shares, in the
aggregate, shall be purchased in this Offering.
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3. Closing. Each Investor
shall deliver, or cause to be delivered, their pro rata share of the Purchase
Price to the Escrow Agent, in immediately available funds, to be held and
disbursed by the Escrow Agent as provided in the Escrow
Agreement. The Escrow Agent shall promptly notify the Company of its
receipt of the aggregate Purchase Price from any Investor and shall deposit such
amount in an interest bearing account, as further set forth in the Escrow
Agreement. The Company shall deliver certificates representing the
appropriate number of Shares of Common Stock to the Escrow Agent to be held and
disbursed by the Escrow Agent as provided in the Escrow
Agreement. The Purchase Price and Shares of Common Stock are
hereafter referred to collectively as, the “Escrow
Property”). The Escrow Agent shall hold the Escrow Property in
accordance with the terms and conditions of the Escrow Agreement. On
the date (the “Closing
Date”) the Escrow Agent receives joint written instructions from the
Company and each Investor directing the manner in which the Escrow Agent shall
distribute all or any portion of the Purchase Price, plus any interest earned
thereon, and the Shares of Common Stock, and provided each of the conditions set
forth in Section 6 hereof have been satisfied or waived by the appropriate party
or parties, the Escrow Property shall be released to the Investors and the
Company, as applicable (each, a “Closing”). The
Closing(s) shall take place at the offices of Xxxxxx & Xxxxxx, LLP, 000
Xxxxx 0 Xxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000, or at such other location and on
such other date as the Company and the Investors shall mutually
agree.
4. Representations
and Warranties of the Company. The Company
hereby represents and warrants to the Investors that, except as set forth in the
schedules delivered herewith (collectively, the “Disclosure
Schedules”):
4.1 Organization, Good Standing
and Qualification. Each of the Company and its Subsidiaries is
a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation and has all requisite corporate
power and authority to carry on its business as now conducted and to own its
properties. Each of the Company and its Subsidiaries is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction in which the conduct of its business or its ownership or
leasing of property makes such qualification or leasing necessary unless the
failure to so qualify has not had and could not reasonably be expected to have a
Material Adverse Effect.
4.2 Authorization. The
Company has full power and authority and has taken all requisite action on the part
of the Company, its officers, directors and stockholders necessary for the
authorization, execution and delivery of this Agreement, the Common Stock and
the authorization of the performance of all obligations of the Company
hereunder. This Agreement constitute the legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability, relating
to or affecting creditors’ rights generally.
4.3 Valid
Issuance. The Shares have been duly and validly authorized
and, when issued and paid for pursuant to this Agreement, will be validly
issued, fully paid and nonassessable, and shall be free and clear of all
encumbrances and restrictions (other than those created by the
Investors).
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4.5 Delivery of SEC Filings;
Business. The Company has made available to the Investors
through the XXXXX system, true and complete copies of the Company’s Annual
Report on Form 10-KSB for the fiscal year ended December 31, 2007 (the “10-KSB”), and all
other reports filed by the Company pursuant to the 1934 Act since the filing of
the 10-KSB and prior to the date hereof (collectively, the “SEC
Filings”). Except as indicated in the SEC Filings, the SEC
Filings are the only filings required of the Company pursuant to the 1934 Act
for such period. The Company and its Subsidiaries are engaged in all
material respects only in the business described in the SEC Filings and the SEC
Filings contain a complete and accurate description in all material respects of
the business of the Company and its Subsidiaries, taken as a whole.
4.6 No Material Adverse
Change. Since September 30, 2007, there has not
been:
(a) any
change in the consolidated assets, liabilities, financial condition or operating
results of the Company from that reflected in the financial statements included
in the Company’s Quarterly Report of Form 10-QSB for the fiscal quarter ended
September 30, 2007, except for changes in the ordinary course of business which
have not had and could not reasonably be expected to have a Material Adverse
Effect, individually or in the aggregate;
(b) any
declaration or payment of any dividend, or any authorization or payment of any
distribution, on any of the capital stock of the Company, or any redemption or
repurchase of any securities of the Company;
(c) any
material damage, destruction or loss, whether or not covered by insurance to any
assets or properties of the Company or its Subsidiaries;
(d) any
waiver, not in the ordinary course of business, by the Company or any Subsidiary
of a material right or of a material debt owed to it;
(e) any
satisfaction or discharge of any lien, claim or encumbrance or payment of any
obligation by the Company or a Subsidiary, except in the ordinary course of
business and which is not material to the assets, properties, financial
condition, operating results or business of the Company and its Subsidiaries
taken as a whole (as such business is presently conducted and as it is proposed
to be conducted);
(f) any
change or amendment to the Company’s Certificate of Incorporation or Bylaws, or
material change to any material contract or arrangement by which the Company or
any Subsidiary is bound or to which any of their respective assets or properties
is subject;
(g) any
material labor difficulties or labor union organizing activities with respect to
employees of the Company or any Subsidiary;
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(h) any
material transaction entered into by the Company or a Subsidiary other than in
the ordinary course of business;
(i) the
loss of the services of any key employee, or material change in the composition
or duties of the senior management of the Company or any
Subsidiary;
(j) the
loss or threatened loss of any customer which has had or could reasonably be
expected to have a Material Adverse Effect; or
(k) any
other event or condition of any character that has had or could reasonably be
expected to have a Material Adverse Effect.
4.7 SEC
Filings.
(a) At
the time of filing thereof, the SEC Filings complied as to form in all material
respects with the requirements of the 1934 Act and did not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading.
(b) To
the Company’s knowledge, each registration statement and any amendment thereto
filed by the Company pursuant to the 1933 Act and/or 1934 Act, and the rules and
regulations thereunder, as of the date such statement or amendment became
effective, complied as to form in all material respects with the 1933 Act and/or
1934 Act, and did not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements made therein not misleading; and each prospectus filed
pursuant to Rule 424(b) under the 1933 Act, as of its issue date and as of the
closing of any sale of securities pursuant thereto did not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not
misleading.
4.8 No Conflict, Breach,
Violation or Default. The
execution, delivery and performance of this Agreement by the Company and the
issuance and sale of the Securities will not conflict with or result in a breach
or violation of any of the terms and provisions of, or constitute a default
under (i) the Company’s Certificate of Incorporation, as amended by the
Amendment, or the Company’s Bylaws, in effect on the date hereof (true and
complete copies of which have been made available to the Investors), or (ii)(a)
any statute, rule, regulation or order of any governmental agency or body or any
court, domestic or foreign, having jurisdiction over the Company, any Subsidiary
or any of their respective assets or properties, or (b) any agreement or
instrument to which the Company or any Subsidiary is a party or by which the
Company or a Subsidiary is bound or to which any of their respective assets or
properties is subject.
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4.9 Tax
Matters. The Company has timely prepared and filed all tax
returns required to have been filed by the Company or such subsidiary with all
appropriate governmental agencies and timely paid all taxes shown thereon or
otherwise owed by it. The charges, accruals and reserves on the books
of the Company in respect of taxes for all fiscal periods are adequate in all
material respects, and there are no material unpaid assessments against the
Company or any Subsidiary nor, to the Company’s Knowledge, any basis for the
assessment of any additional taxes, penalties or interest for any fiscal period
or audits by any federal, state or local taxing authority except for any
assessment which is not material to the Company and its Subsidiaries, taken as a
whole. All taxes and other assessments and levies that the Company or
any Subsidiary is required to withhold or to collect for payment have been duly
withheld and collected and paid to the proper governmental entity or third party
when due. There are no tax liens or claims pending or, to the
Company’s Knowledge, threatened against the Company or any Subsidiary or any of
their respective assets or property. There are no outstanding tax
sharing agreements or other such arrangements between the Company and any
Subsidiary or other corporation or entity.
4.10 Title to
Properties. The Company has good and marketable title to all
real properties and all other properties and assets owned by it, in each case
free from liens, encumbrances and defects that would materially affect the value
thereof or materially interfere with the use made or currently planned to be
made thereof by them and the Company holds any leased real or personal property
under valid and enforceable leases with no exceptions that would materially
interfere with the use made or currently planned to be made thereof by
them.
4.11 Certificates, Authorities
and Permits. The Company possesses adequate certificates,
authorities or permits issued by appropriate governmental agencies or bodies
necessary to conduct the business now operated by it, and the Company has not
received any notice of proceedings relating to the revocation or modification of
any such certificate, authority or permit that, if determined adversely to the
Company, could reasonably be expected to have a Material Adverse Effect,
individually or in the aggregate.
4.12 Litigation. There
are no pending actions, suits or proceedings against or affecting the Company or
any of its or their properties; and to the Company’s knowledge, no such actions,
suits or proceedings are threatened or contemplated.
4.13 Financial
Statements. The financial statements included in each SEC
Filing present fairly, in all material respects, the consolidated financial
position of the Company as of the dates shown and its consolidated results of
operations and cash flows for the periods shown, and such financial statements
have been prepared in conformity with United States generally accepted
accounting principles applied on a consistent basis (“GAAP”) (except as may
be disclosed therein or in the notes thereto, and, in the case of quarterly
financial statements, as permitted by Form 10-QSB under the 1934
Act).
4.14 No Directed Selling Efforts
or General Solicitation. Neither the Company nor any Person
acting on its behalf has conducted any general solicitation or general
advertising (as those terms are used in Regulation D) in connection with the
offer or sale of any of the Securities.
4.15 No Integrated
Offering. Neither the Company nor any of its Affiliates, nor
any Person acting on its or their behalf has, directly or indirectly, made any
offers or sales of any Company security or solicited any offers to buy any
security, under circumstances that would adversely affect reliance by the
Company on Section 4(2) for the exemption from registration for the transactions
contemplated hereby or would require registration of the Securities under the
1933 Act.
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4.16 Private
Placement. The offer and sale of the Securities to the
Investors as contemplated hereby is exempt from the registration requirements of
the 1933 Act.
4.17 Dilution; Hedging.
The Company acknowledges and agrees that the issuance of the Securities will
have a potential dilutive effect on the equity holdings of other holders of the
Company’s equity or rights to receive equity of the Company. The Board of
Directors of the Company has concluded, in its good faith business judgment,
that the issuance of the Securities is in the best interests of the
Company.
5. Representations
and Warranties of the Investors. The Investors
hereby severally, and not jointly, represents and warrants to the Company
that:
5.1 Organization and
Existence. Each Investor is an individual or a validly
existing corporation, limited partnership, or limited liability company and has
all requisite individual, corporate, partnership or limited liability company
power and authority to invest in the Common Stock pursuant to this
Agreement.
5.2 Authorization. The
execution, delivery and performance by such Investor of this Agreement to which
such Investor is a party have been duly authorized and will each constitute the
valid and legally binding obligation of such Investor, enforceable against such
Investor in accordance with their respective terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability, relating to or affecting creditors’ rights
generally.
5.3 Purchase Entirely for Own
Account. The Common Stock to be received by such Investor
hereunder will be acquired for such Investor’s own account, not as nominee or
agent, and not with a view to the resale or distribution of any part thereof in
violation of the 1933 Act, and such Investor has no present intention of
selling, granting any participation in, or otherwise distributing the same in
violation of the 1933 Act without prejudice,
however, to such Investor’s right at all times to sell or otherwise dispose of
all or any part of such Securities in compliance with applicable federal and
state securities laws. Nothing contained herein shall be deemed a
representation or warranty by such Investor to hold the Securities for any
period of time. Such Investor is not a broker-dealer
registered with the SEC under the 1934 Act or an entity engaged in a business
that would require it to be so registered.
5.4 Investment
Experience. Such Investor acknowledges that it can bear the
economic risk and complete loss of its investment in the Securities and has such
knowledge and experience in financial or business matters that it is capable of
evaluating the merits and risks of the investment contemplated
hereby.
5.5 Disclosure of
Information. Such Investor has had an opportunity to receive
all information related to the Company requested by it and to ask questions of
and receive answers from the Company regarding the Company, its business and the
terms and conditions of the offering of the Securities. Such Investor
acknowledges receipt of copies of the SEC Filings. Neither such
inquiries nor any other due diligence investigation conducted by such Investor
shall modify, amend or affect such Investor’s right to rely on the Company’s
representations and warranties contained in this Agreement.
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5.6 Restricted
Securities. Such Investor understands that the Securities are
characterized as “restricted securities” under the U.S. federal securities laws
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable regulations
such securities may be resold without registration under the 1933 Act only in
certain limited circumstances.
5.7 Legends. It
is understood that, except as provided below, certificates evidencing the
Securities may bear the following or any similar legend:
(a) “The
securities represented hereby may not be transferred unless (i) such securities
have been registered for sale pursuant to the 1933 Act, as amended, (ii) such
securities may be sold pursuant to Rule 144, or (iii) the Company has received
an opinion of counsel reasonably satisfactory to it that such transfer may
lawfully be made without registration under the 1933 Act, as amended, or
qualification under applicable state securities laws.”
(b) If
required by the authorities of any state in connection with the issuance of sale
of the Securities, the legend required by such state authority.
5.8 Accredited
Investor. Such Investor is an “accredited investor” within the
meaning of Rule 501(a) of Regulation D promulgated under the 0000
Xxx.
5.9 No General
Solicitation. Such Investor did not learn of the investment in
the Securities as a result of any public advertising or general
solicitation.
5.10 Brokers and
Finders. No Person will have, as a result of the transactions
contemplated by this Agreement, any valid right, interest or claim against or
upon the Company, any Subsidiary or an Investor for any commission, fee or other
compensation pursuant to any agreement, arrangement or understanding entered
into by or on behalf of such Investor.
5.11 Reliance on
Exemptions. Such Investor understands that the Securities are
being offered and sold to it in reliance upon specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying upon the truth and accuracy of, and such Investor’s
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of such Investor set forth herein in order to determine the
availability of such exemptions and the eligibility of such Investor to acquire
the Securities.
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6. Conditions to
Closing.
6.1 Conditions to the Investor’s
Obligations. The obligation of each Investor to purchase the Securities
at the Closing is subject to the fulfillment to such Investor’s satisfaction, on
or prior to the Closing Date, of the following conditions, any of which may be
waived by such Investor (as to itself only):
(a) The
representations and warranties made by the Company in Section 4 hereof qualified
as to materiality shall be true and correct at all times prior to and on the
Closing Date, except to the extent any such representation or warranty expressly
speaks as of a specific date, in which case such representation or warranty
shall be true and correct as of such date, and, the representations and
warranties made by the Company in Section 4 hereof not qualified as to
materiality shall be true and correct in all material respects at all times
prior to and on the Closing Date, except to the extent any such representation
or warranty expressly speaks as of a specific date, in which case such
representation or warranty shall be true and correct in all material respects as
of such specific date.
(b) The
Company shall have performed in all material respects all obligations and
covenants herein required to be performed by it on or prior to the Closing
Date.
(c) The
Company shall have obtained any and all consents, permits, approvals,
registrations and waivers necessary or appropriate
for consummation of the purchase and sale of the Securities all of which shall
be in full force and effect.
(d) The
Company shall have executed and delivered certificates representing the
appropriate number of Shares of Common Stock.
(e) The
Company and the Escrow Agent shall have executed and delivered the Escrow
Agreement.
(f) The
Company and the Stockholders shall have executed and delivered the Lock-Up
Agreement.
(g) No
judgment, writ, order, injunction, award or decree of or by any court, or judge,
justice or magistrate, including any bankruptcy court or judge, or any order of
or by any governmental authority, shall have been issued, and no action or
proceeding shall have been instituted by any governmental authority, enjoining
or preventing the consummation of the transactions contemplated
hereby.
(h) The
Company shall have delivered a Certificate, executed on behalf of the Company by
its Secretary, dated as of the Closing Date, certifying the resolutions adopted
by the Board of Directors of the Company approving the transactions contemplated
by this Agreement and the issuance of the Securities, certifying the current
versions of the Certificate of Incorporation and Bylaws of the Company and
certifying as to the signatures and authority of persons signing this Agreement
and related documents on behalf of the Company.
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6.2 Conditions to Obligations of
the Company. The Company’s obligation to sell and issue the Shares of
Common Stock at the Closing is subject to the fulfillment to the satisfaction of
the Company on or prior to the Closing Date of the following conditions, any of
which may be waived by the Company:
(a) The
representations and warranties made by the Investor in Section 5 hereof shall be
true and correct in all material respects when made, and shall be true and
correct in all material respects on the Closing Date with the same force and
effect as if they had been made on and as of said date. The
Investment Representations shall be true and correct in all respects when made,
and shall be true and correct in all respects on the Closing Date with the same
force and effect as if they had been made on and as of said date. The
Investor shall have performed in all material respects all obligations and
covenants herein required to be performed by them on or prior to the Closing
Date.
(b) The
Investor shall have delivered to the Escrow Agent the Purchase Price for the
number of Shares of Common Stock to be purchased.
(c) The
Investor and the Escrow Agent shall have executed and delivered the Escrow
Agreement.
(d) No
judgment, writ, order, injunction, award or decree of or by any court, or judge,
justice or magistrate, including any bankruptcy court or judge, or any order of
or by any governmental authority, shall have been issued, and no action or
proceeding shall have been instituted by any governmental authority, enjoining
or preventing the consummation of the transactions contemplated
hereby.
6.3 Termination of Obligations
to Effect Closing; Effects.
(a) The
outstanding obligations of the Company, on the one hand, and the Investor, on
the other hand, to effect the Closing shall terminate as follows:
(i) Upon
the mutual written consent of the Company and the Investor;
(ii) By
the Company if any of the conditions set forth in Section 6.2 shall have become
incapable of fulfillment, and shall not have been waived by the
Company;
(iii) By
an Investor (with respect to itself only) if any of the conditions set forth in
Section 6.1 shall have become incapable of fulfillment, and shall not have been
waived by the Investor;
(iv) By
either the Company, or any Investor (with respect to itself only), if the
Closing has not occurred on or prior to November 21, 2008; or
provided, however, that, except
in the case of clause (i) above, the party seeking to terminate its obligation
to effect the Closing shall not then be in breach of any of its representations,
warranties, covenants or agreements contained in this Agreement if such breach
has resulted in the circumstances giving rise to such party’s seeking to
terminate its obligation to effect the Closing.
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(b) Nothing
in this Section 6.3 shall be deemed to release any party from any liability for
any breach by such party of the terms and provisions of this Agreement or to
impair the right of any party to compel specific performance by any other party
of its obligations under this Agreement.
7. Covenants and Agreements of
the Company.
7.1 No Conflicting
Agreements. The Company will not take any action, enter into
any agreement or make any commitment that would conflict or interfere in any
material respect with the Company’s obligations to the Investor under this
Agreement.
7.2 Compliance with
Laws. The Company will comply in all material respects with
all applicable laws, rules, regulations, orders and decrees of all governmental
authorities.
7.3 Removal of
Legends. Upon the earlier of (i) registration for resale
pursuant to the Registration Rights Agreement or (ii) Rule 144 becoming
available the Company shall (A) deliver to the transfer agent for the Common
Stock (the “Transfer
Agent”) irrevocable instructions that the Transfer Agent shall reissue a
certificate representing shares of Common Stock without legends upon receipt by
such Transfer Agent of the legended certificates for such shares, and (B) cause
its counsel to deliver to the Transfer Agent one or more blanket opinions to the
effect that the removal of such legends in such circumstances may be effected
under the 1933 Act. From and after the earlier of such dates, upon
the Investor’s written request, the Company shall promptly cause certificates
evidencing the Investor’s Securities to be replaced with certificates which do
not bear such restrictive legends.
7.4 Registration
Rights. The Investor does not
have registration rights, however, if at any time the Company files a
registration statement and the Common Stock purchased herein by the Investor is
not freely saleable under Rule 144 or registered in an effective registration
statement, then such Investor shall have piggyback registration rights in order
to include the Investor’s Common Stock in the registration
statement.
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7.5 Most Favored Nation
Provision. For a period of twenty four (24) months following the Closing
Date, other than the Excepted Issuances (as defined herein), if the Company
shall offer, issue or agree to issue any Common Stock or securities (including
preferred stock, debentures, warrants, options or other rights, howsoever
denominated) convertible into or exercisable for shares of Common Stock (or
modify any of the foregoing which may be outstanding) (collectively, “New Securities”) to
any person or entity at a purchase or conversion price per share and/or an
exercise price per share, respectively, which shall be less than the Purchase
Price (adjusted for capital adjustments such as stock splits or dividends paid
in shares of common stock), then the Investor shall have the right to apply the
lowest such purchase price, conversion price or exercise price of the offering
or sale of such New Securities to the purchase price of the Common Shares then
held by the Investors (and, if necessary, the Company will issue additional
shares to Investors to take into account the amount paid by the Investors as of
the Closing Date and the adjustment made to the per share purchase price
contemplated herein), as of the date of the offering or sale of such New
Securities, and the appropriate adjustments to this Agreement will be deemed
made accordingly, provided, however, that any
such adjustment required to be made because of an issuance of New Securities
shall not adjust the Purchase Price to a price lower than $0.25 per share.
The rights of the Investor set forth herein are in addition to any other rights
the Investor has pursuant to this Agreement and any other agreement referred to
or entered into in connection herewith. For purposes of this section, the
term “Excepted
Issuances” shall mean: (i) the Company’s issuance of Common Stock or the
issuances or grants of options to purchase Common Stock pursuant to stock option
plans and employee stock purchase plans, if any, hereto at prices equal to or
higher than the Purchase Price; or (ii) upon conversion of any options or
convertible securities which are outstanding on the date hereof, provided that
such issuance is made pursuant to the terms of such options or convertible
securities in effect on the date hereof and the option or convertible security
is not amended or changed after the date hereof and the other material terms of
such options or convertible securities are not otherwise amended or changed
after the date hereof.
7.6 Current Public Information
for Rule 144’s “evergreen” Requirement. Beginning on the date
following the expiration of the holding period under Rule 144 and until such
time as all Shares issued in connection with this Offering are sold or may be
sold without restriction under Rule 144, the Company shall use its commercially
reasonable efforts 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 the Exchange Act in order to enable
the Investors to sell the Securities under Rule 144 of the Securities Act.
The Company will prepare and make publicly available in accordance with Rule
144(c) and Rule 144(i) such information as is required for the Company to keep
current in its filings and for the Investors to sell the Shares under Rule
144. In the event that the Company fails to timely file all reports
required to keep the Company current in its filings so the Investors may sell
under Rule 144, the Company shall pay to each Investor, an amount in cash, as
partial liquidated damages and not as a penalty, equal to 0.5% of the aggregate
purchase price paid by such Investor pursuant to this Agreement on the date of
the expiration of the one-year period following the Closing Date and an
additional 0.5% of the aggregate purchase price paid for each thirty (30) day
period thereafter that this Section 7.6 is not complied with. Liquidated
damages payable by the Company pursuant to this Section 7.6 shall be payable on
the first (1st)
business day of each thirty (30) day period that the terms of this section are
not complied with, provided, however, that such liquidated damages shall not
exceed 10% of the aggregate purchase price paid by the Investors.
8. Survival and
Indemnification.
8.1 Survival. The
representations, warranties, covenants and agreements contained in this
Agreement shall survive the Closing of the transactions contemplated by this
Agreement, provided, however, that Sections 7.3, 7.4 and 7.6 shall survive for
the period of time provided in each respective section.
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8.2 Indemnification. The
Company agrees to indemnify and hold harmless each Investor and its Affiliates
and their respective directors, officers, employees and agents from and against
any and all losses, claims, damages, liabilities and expenses (including without
limitation reasonable attorney fees and disbursements and other expenses
incurred in connection with investigating, preparing or defending any action,
claim or proceeding, pending or threatened and the costs of enforcement thereof)
(collectively, “Losses”) to which
such Person may become subject as a result of any breach of representation,
warranty, covenant or agreement made by or to be performed on the part of the
Company under this Agreement, and will reimburse any such Person for all such
amounts as they are incurred by such Person.
8.3 Conduct of Indemnification
Proceedings. Promptly
after receipt by any Person (the “Indemnified Person”)
of notice of any demand, claim or circumstances which would or might give rise
to a claim or the commencement of any action, proceeding or investigation in
respect of which indemnity may be sought pursuant to Section 8.2, such
Indemnified Person shall promptly notify the Company in writing and the Company
shall assume the defense thereof, including the employment of counsel reasonably
satisfactory to such Indemnified Person, and shall assume the payment of all
fees and expenses; provided, however, that the failure of any
Indemnified Person so to notify the Company shall not relieve the Company of its
obligations hereunder except to the extent that the Company is materially
prejudiced by such failure to notify. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless: (i) the Company and the Indemnified Person shall have mutually agreed to
the retention of such counsel; or (ii) in the reasonable judgment of counsel to
such Indemnified Person representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between
them. The Company shall not be liable for any settlement of any
proceeding effected without its written consent, which consent shall not be
unreasonably withheld, but if settled with such consent, or if there be a final
judgment for the plaintiff, the Company shall indemnify and hold harmless such
Indemnified Person from and against any loss or liability (to the extent stated
above) by reason of such settlement or judgment. Without the prior
written consent of the Indemnified Person, which consent shall not be
unreasonably withheld, the Company shall not effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Person is
or could have been a party and indemnity could have been sought hereunder by
such Indemnified Party, unless such settlement includes an unconditional release
of such Indemnified Person from all liability arising out of such
proceeding.
9. Miscellaneous.
9.1 Successors and
Assigns. This Agreement may not be assigned by a party hereto
without the prior written consent of the Company or the Investor, as applicable,
provided, however, that an Investor may assign its rights and delegate its
duties hereunder in whole or in part to an Affiliate or to a third party
acquiring some or all of its Securities in a private transaction without the
prior written consent of the Company or the other Investor, after notice duly
given by such Investor to the Company provided that no such assignment or
obligation shall affect the obligations of such Investor hereunder and,
provided, further, that Section 7.5 herein shall not survive such transfer or
assignment. The provisions of this Agreement shall inure to the
benefit of and be binding upon the respective permitted successors and assigns
of the parties. Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
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9.2 Counterparts;
Faxes. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement
may also be executed via facsimile, which shall be deemed an
original.
9.3 Titles and
Subtitles. The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement.
9.4 Notices. Unless
otherwise provided, any notice required or permitted under this Agreement shall
be given in writing and shall be deemed effectively given as hereinafter
described (i) if given by personal delivery, then such notice shall be deemed
given upon such delivery, (ii) if given by telex or telecopier, then such notice
shall be deemed given upon receipt of confirmation of complete transmittal,
(iii) if given by mail, then such notice shall be deemed given upon the earlier
of (A) receipt of such notice by the recipient or (B) three days after such
notice is deposited in first class mail, postage prepaid, and (iv) if given by
an internationally recognized overnight air courier, then such notice shall be
deemed given one Business Day after delivery to such carrier.
9.5 Expenses. The
parties hereto shall pay their own costs and expenses in connection
herewith. In the event that legal proceedings are commenced by any
party to this Agreement against another party to this Agreement in connection
with this Agreement, the party or parties which do not prevail in such
proceedings shall severally, but not jointly, pay their pro rata share of the
reasonable attorneys’ fees and other reasonable out-of-pocket costs and expenses
incurred by the prevailing party in such proceedings.
9.6 Amendments and
Waivers. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Investor. Any amendment or
waiver effected in accordance with this paragraph shall be binding upon each
holder of any Securities purchased under this Agreement at the time outstanding,
each future holder of all such Securities, and the
Company. Notwithstanding the foregoing, no consideration shall be
offered or paid by the Company to any Investor to amend or consent to a waiver
or modification of any provision of any of this Agreement.
9.7 Severability. Any
provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof but shall be interpreted as if it were written so as to be
enforceable to the maximum extent permitted by applicable law, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. To the
extent permitted by applicable law, the parties hereby waive any provision of
law which renders any provision hereof prohibited or unenforceable in any
respect.
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9.8 Entire
Agreement. This Agreement constitutes the entire agreement
among the parties hereof with respect to the subject matter hereof and thereof
and supersede all prior agreements and understandings, both oral and written,
between the parties with respect to the subject matter hereof and
thereof.
9.9 Further
Assurances. The parties shall execute and deliver all such
further instruments and documents and take all such other actions as may
reasonably be required to carry out the transactions contemplated hereby and to
evidence the fulfillment of the agreements herein contained.
9.10 Governing Law; Consent to
Jurisdiction; Waiver of Jury Trial. This Agreement shall be
governed by, and construed in accordance with, the internal laws of the State of
New York without regard to the choice of law principles thereof. Each
of the parties hereto irrevocably submits to the exclusive jurisdiction of the
courts of the State of New York located in New York County and the United States
District Court for the Southern District of New York for the purpose of any
suit, action, proceeding or judgment relating to or arising out of this
Agreement and the transactions contemplated hereby. Service of
process in connection with any such suit, action or proceeding may be served on
each party hereto anywhere in the world by the same methods as are specified for
the giving of notices under this Agreement. Each of the parties
hereto irrevocably consents to the jurisdiction of any such court in any such
suit, action or proceeding and to the laying of venue in such
court. Each party hereto irrevocably waives any objection to the
laying of venue of any such suit, action or proceeding brought in such courts
and irrevocably waives any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY
RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS
AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS
WAIVER.
[THE
REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY]
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[SIGNATURE
PAGE TO SECURITIES PURCHASE AGREEMENT]
IN WITNESS WHEREOF, the
parties have executed this Agreement or caused their duly authorized officers to
execute this Agreement as of the date first above written.
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EMY’S
SALSA AJI DISTRIBUTION COMPANY, INC.
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By:
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Name:
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Title:
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INVESTOR:
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Number
of Shares being purchased:
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By:
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Name:
Title:
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Address:
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Aggregate
Purchase Price:
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Facsimile:
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Number
of Shares being purchased:
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By:
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Name:
Title:
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Address:
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Aggregate
Purchase Price:
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Facsimile:
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SCHEDULE
1
Accredited
Investor Status
Investor
Name:_________________________
Please initial below the items which
apply to your status as an Accredited Investor.
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