EXHIBIT 10.1
FRESH AMERICA CORP.
SECURITIES PURCHASE AGREEMENT
DATED AS OF MAY 4, 1998
$20,000,000 12% SENIOR SUBORDINATED NOTES DUE MAY 1, 2003
155,483 WARRANTS TO PURCHASE COMMON STOCK
TABLE OF CONTENTS PAGE
1. PURCHASE AND SALE OF SECURITIES...................................... 1
1.1 Issue of Securities by the Company............................. 1
1.2 The Closing.................................................... 2
1.3 Original Issue Discount........................................ 3
2. WARRANTIES AND REPRESENTATIONS OF THE COMPANY........................ 3
2.1 Nature of Business............................................. 3
2.2 Financial Statements; Debt; Material Adverse
Change......................................................... 3
2.3 Subsidiaries and Affiliates.................................... 5
2.4 Title to Properties............................................ 5
2.5 Taxes.......................................................... 6
2.6 Pending Litigation............................................. 6
2.7 Corporate Organization and Authority........................... 6
2.8 Charter Instruments, Other Agreements.......................... 7
2.9 Restrictions on the Company.................................... 7
2.10 Compliance with Law............................................ 7
2.11 Pension Plans.................................................. 8
2.12 Environmental Compliance....................................... 9
2.13 Due Authorization; Enforceability.............................. 9
2.14 Governmental Consent to Sale of Purchased
Securities..................................................... 10
2.15 Xxxx-Xxxxx-Xxxxxx Compliance................................... 11
2.16 No Defaults.................................................... 11
2.17 Private Offering of Purchased Securities....................... 11
2.18 Use of Proceeds................................................ 12
2.19 Capitalization................................................. 12
2.20 Solvency....................................................... 13
2.21 Full Disclosure................................................ 13
3. REPRESENTATIONS OF THE PURCHASER..................................... 14
3.1 Purchase for Investment........................................ 14
3.2 ERISA.......................................................... 14
4. FIRST CLOSING CONDITIONS............................................. 16
4.1 Opinions of Counsel............................................ 16
4.2 Warranties and Representations True; Compliance................ 16
4.3 Officers' Certificates......................................... 16
4.4 Organic Documents.............................................. 17
4.5 Legality....................................................... 17
4.6 Financing Documents............................................ 17
4.7 Reservation of Shares.......................................... 18
4.8 Certain Consents............................................... 18
4.9 Private Placement Numbers...................................... 18
4.10 Fees and Expenses.............................................. 18
4.11 Other Purchasers............................................... 18
4.12 Proceedings Satisfactory....................................... 19
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5. SECOND CLOSING CONDITIONS............................................ 19
5.1 Opinions of Counsel............................................ 19
5.2 Warranties and Representations True; Compliance................ 19
5.3 Officers' Certificates......................................... 20
5.4 Organic Documents.............................................. 20
5.5 Legality....................................................... 20
5.6 Financing Documents............................................ 20
5.7 Fees and Expenses.............................................. 21
5.8 Other Purchasers............................................... 21
5.9 Proceedings Satisfactory....................................... 21
6. INTERPRETATION OF THIS AGREEMENT..................................... 21
6.1 Terms Defined.................................................. 21
6.2 Other Definitions.............................................. 24
6.3 Section Headings and Table of Contents and
Construction................................................... 24
6.4 Governing Law.................................................. 24
7. MISCELLANEOUS........................................................ 25
7.1 Communications................................................. 25
7.2 Reproduction of Documents...................................... 25
7.3 Survival....................................................... 25
7.4 Successors and Assigns......................................... 26
7.5 Amendment and Waiver........................................... 26
7.6 Expenses....................................................... 26
7.7 Waiver of Jury Trial; Consent to Jurisdiction;
Etc............................................................ 26
7.8 Indemnification of Each Purchaser.............................. 27
7.9 Entire Agreement............................................... 28
7.10 Execution in Counterpart....................................... 28
Annex 1 -- Information as to Purchasers
Annex 2 -- Payment Instructions at Closing; Address of Company for Notices
Annex 3 -- Information as to Company
Exhibit 0 -- Form of Note Agreement
Exhibit 0 -- Form of Warrant Agreement
Exhibit 0 -- Form of Opinion of Company Counsel -- First Closing
Exhibit 0 -- Form of Opinion of Purchasers' Counsel -- First Closing
Exhibit 0 -- Form of Officers' Certificate -- First Closing
Exhibit 0 -- Form of Secretary's Certificate -- First Closing
Exhibit 0 -- Form of Subsidiary Guarantor Secretary's Certificate
Exhibit 0 -- Form of Subsidiary Guarantee
Exhibit 0 -- Form of Opinion of Company Counsel -- Second Closing
Exhibit 0 -- Form of Opinion of Purchasers' Counsel -- Second Closing
Exhibit 0 -- Form of Officers Certificate -- Second Closing
Exhibit 0 -- Form of Secretary's Certificate -- Second Closing
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FRESH AMERICA CORP.
SECURITIES PURCHASE AGREEMENT
$20,000,000 12% SENIOR SUBORDINATED NOTES DUE MAY 1, 2003
155,483 WARRANTS TO PURCHASE COMMON STOCK
Dated as of May 4, 1998
[SEPARATELY EXECUTED BY EACH OF THE
PURCHASERS LISTED ON ANNEX 1 HERETO]
Ladies and Gentlemen:
FRESH AMERICA CORP. (together with any successors and assigns who become
such in accordance herewith, the "COMPANY"), a Texas corporation, hereby agrees
with you as set forth below.
1. PURCHASE AND SALE OF SECURITIES.
1.1 ISSUE OF SECURITIES BY THE COMPANY.
(A) ISSUE OF NOTES. The Company will authorize the issue of Twenty
Million Dollars ($20,000,000) in aggregate principal amount of its twelve
percent (12%) Senior Subordinated Notes due May 1, 2003 (all such notes,
whether initially issued, or issued in exchange or substitution for, any
such note, in each case in accordance with the Note Agreement,
collectively, the "NOTES"). The Notes shall be issued pursuant to a Note
Agreement (as may be amended, restated or otherwise modified from time to
time, the "NOTE AGREEMENT") in the form of Exhibit 0. The Notes shall be
in the form of Attachment A to the Note Agreement, and shall have the
terms as provided in the Note Agreement and in the Notes.
(B) ISSUE OF WARRANTS. The Company will authorize the issue of an
aggregate of one hundred fifty-five thousand four hundred eighty-three
(155,483) Warrants (the "WARRANTS") to purchase shares of Common Stock.
The Warrants shall be issued pursuant to a Warrant Agreement (as may be
amended, restated or otherwise modified from time to time, the "WARRANT
AGREEMENT") in the form of Exhibit 0. The certificates representing the
Warrants (the "WARRANT CERTIFICATES") shall be in the form of Attachment A
to the Warrant Agreement, and the Warrants shall have the terms provided
in the Warrant Certificates and the Warrant Agreement.
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1.2 THE CLOSING.
(A) PURCHASE AND SALE OF PURCHASED SECURITIES. The Company hereby
agrees to sell to you and you hereby agree to purchase from the Company,
in accordance with the provisions hereof, the aggregate principal amount
of Notes set forth below your name on Annex 1 and the aggregate amount of
Warrants set forth below your name on Annex 1, at an aggregate purchase
price for such Notes and Warrants equal to one hundred percent (100%) of
the principal amount of Notes to be purchased.
(B) FIRST CLOSING. The closing (the "FIRST CLOSING") of the sale of
the First Closing Purchased Securities will be held at 10:00 a.m., local
time, on May 15, 1998, or such other time and date as the Other
Purchasers, the Company and you shall agree (the "FIRST CLOSING DATE"), at
the office of Xxxx & Xxxxxx, a Professional Corporation, Xxx Xxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxxxxx 00000. At the First Closing:
(i) the Company will deliver to you one or more Notes (if any,
as set forth below your name on Annex 1), in the denominations
indicated on Annex 1 under the heading "First Closing," in the
aggregate principal amount of your purchase on the First Closing
Date, dated the First Closing Date and registered in the name of the
holder indicated on Annex 1; and
(ii) the Company will deliver to you one or more Warrant
Certificates (if any,
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as set forth below your name on Annex 1), representing the number of
Warrants indicated on such Annex 1 under the heading "First
Closing," and registered in the name of the holder indicated on
Annex 1;
against payment by federal funds wire transfer in immediately available
funds of the purchase price therefor, as directed by the Company on Annex
2, which shall be an account at a bank located in the United States of
America.
(C) SECOND CLOSING. The closing (the "SECOND Closing") of the sale
of the Second Closing Purchased Securities will be held at such time and
on such date (but in no event later than August 3, 1998) as the Other
Purchasers, the Company and you shall agree (the "SECOND CLOSING DATE"),
at the office of Xxxx & Xxxxxx, a Professional Corporation, Xxx Xxxxx
Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000; PROVIDED, HOWEVER, that the Company
shall have given you and each Other Purchaser not less than five (5)
Business Days' advance notice of the proposed Second Closing Date. At the
Second Closing:
(i) the Company will deliver to you one or more Notes (if any,
as set forth below your name on Annex 1), in the denominations
indicated on Annex 1 under the heading "Second Closing," in the
aggregate principal amount of your purchase on the Second Closing
Date, dated the Second Closing Date and registered in the name of
the holder indicated on Annex 1; and
(ii) the Company will deliver to you one or more Warrant
Certificates (if any, as set forth below your name on Annex 1),
representing the number of Warrants indicated on such Annex 1 under
the heading "Second Closing," and registered in the name of the
holder indicated on Annex 1;
against payment by federal funds wire transfer in immediately available
funds of the purchase price therefor, as directed by the Company on Annex
2, which shall be an account at a bank located in the United States of
America.
(D) OTHER PURCHASERS. Contemporaneously with the execution and
delivery hereof, the Company is entering into a separate Securities
Purchase Agreement identical (except for the name and signature of the
purchaser) to this Agreement (this Agreement and such other separate
Securities Purchase Agreements, each as from time to time amended or
modified, being herein sometimes referred to as the "SECURITIES PURCHASE
AGREEMENTS") with each other purchaser (individually, an "OTHER
PURCHASER," and collectively, the "OTHER PURCHASERS") listed on Annex 1,
providing for the sale to each Other Purchaser of the Purchased Securities
set forth below its name on such Annex. The sales of the Purchased
Securities to you and to each Other Purchaser are separate sales.
1.3 ORIGINAL ISSUE DISCOUNT. You and the Company agree to treat, for
income tax purposes and purposes of determining compliance with the Applicable
Interest Law and calculation of the Maximum Legal Rate of Interest, any original
issue discount attributable, as a result of the delivery of the Warrants, to any
Note issued by the Company in accordance with the terms and conditions of this
Agreement as being less than the product of:
(a) one-quarter of one percent (0.25%) of the stated redemption
price at maturity (as such term is defined in Section 1273(a) of the IRC)
of such Note; MULTIPLIED BY
(b) the number of complete years to maturity of such Note.
You and the Company agree to use the foregoing for all United States federal,
state and local income tax purposes with respect to the transactions
contemplated by the Financing Documents.
2. WARRANTIES AND REPRESENTATIONS OF THE COMPANY
To induce you to enter into this Agreement and to purchase and pay for the
Purchased Securities to be delivered to you at each Closing, the Company
warrants and represents, as of each Closing Date, as follows:
2.1 NATURE OF BUSINESS. The Offering Memorandum describes correctly in all
material respects the general nature of the business and principal Properties
and assets of the Company.
2.2 FINANCIAL STATEMENTS; DEBT; MATERIAL ADVERSE CHANGE.
(A) FINANCIAL STATEMENTS. The Company has provided you with the
financial statements of the Company contained in the Offering Memorandum
and those described on PART 0 OF ANNEX 3. Such financial statements
present fairly in all material respects the financial position of the
Company and the Subsidiaries on a consolidated basis as of the respective
dates specified in
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such Part and the results of their consolidated operations and cash flows
for the respective periods so specified in conformity with GAAP applied on
a consistent basis throughout the periods involved.
(B) DEBT. PART 0 OF ANNEX 3 lists, both before and after giving
effect to the transactions contemplated by the Financing Documents, all
Debt of the Company and the Subsidiaries which has either an outstanding
principal amount or, in the case of a revolving credit or similar
facility, a commitment or commitments, of One Million Dollars ($1,000,000)
or more, and provides the following information with respect to each item
of such Debt: the obligor, each guarantor thereof and each other Person
similarly liable in respect thereof, the holder thereof, the outstanding
amount as of April 3, 1998, the current portion of the outstanding amount
as at such date, the final maturity, required sinking fund payments, and a
description of the collateral securing such Debt. The aggregate principal
amount of all Debt of the Company and the Subsidiaries as of the First
Closing Date was Twenty-Four Million One Hundred Thirty-Nine Thousand
Dollars ($24,139,000).
(C) LIENS. PART 0 OF ANNEX 3 lists, both before and after giving
effect to the transactions contemplated by the Financing Documents, all
Liens securing Debt of the Company and the Subsidiaries which has either
an outstanding principal amount or, in the case of a revolving credit or
similar facility, a commitment or commitments, of One Million Dollars
($1,000,000) or more, and provides the following information with respect
to each Lien: the holder thereof, the Debt or other obligations secured by
such Lien, the outstanding amount thereof and a description of the
collateral. The aggregate principal amount of all Debt of the Company and
the Subsidiaries secured by any Lien as of the First Closing Date was
Twenty Million Two Hundred Fifty-Nine Thousand Dollars ($20,259,000).
(D) CONTINGENT OBLIGATIONS. There are no Guaranties or other
contingent obligations in respect of which disclosure is required, or for
which provisions are required to be made, in the consolidated financial
statements of the Company and the Subsidiaries in accordance with GAAP,
other than those so disclosed, and for which such provision has been made,
in the financial statements referred to in Section 0 and which are
described on PART 2.2(B) OF ANNEX 3.
(E) MATERIAL ADVERSE CHANGE. Since January 2, 1998, there has been
no change in the business, operations, profits, financial condition,
Properties or business prospects of the Company and the Subsidiaries,
except changes that, in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.
(F) PROJECTIONS. The Company has delivered to you projected
financial statements of the Company contained in PART 0 OF ANNEX 3
(collectively, the "PROJECTIONS"). The assumptions used in preparation of
the Projections were reasonable when made. Such Projections were prepared
by the executive and financial personnel of the Company and the
Subsidiaries in the light of the business of the Company and the
Subsidiaries. Such Projections were prepared in good faith, had a
reasonable basis and represented the good faith opinion of the Company as
to the projected results of the operations of the Company and the
Subsidiaries as of the date thereof.
(G) INVESTMENTS. PART 0 OF ANNEX 3 lists all Investments of the
Company and the Subsidiaries outstanding on the First Closing Date which,
but for clause (h) of the definition of
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Restricted Investments, would be classified as Restricted Investments in
accordance with the provisions of the Note Agreement.
2.3 SUBSIDIARIES AND AFFILIATES.
(A) OWNERSHIP OF SUBSIDIARIES. PART 0 OF ANNEX 3 sets forth for each
Subsidiary:
(i) its full legal name;
(ii) its jurisdiction of incorporation or organization;
(iii) the percentage of the Voting Stock of which is held by
the Company and each other Subsidiary.
(B) AFFILIATES. PART 0 OF ANNEX 3 sets forth the name of each
Affiliate (other than members of the families of officers and directors of
the Company) and the nature of the affiliation of such Affiliate.
(C) IDENTIFICATION OF CERTAIN SUBSIDIARIES. PART 0 OF ANNEX 3 sets
forth the identity of each Subsidiary which is liable (as a guarantor,
borrower, co-obligor or otherwise) in respect of any of the obligations of
the Company under the Senior Credit Agreement, as in effect on such
Closing Date.
2.4 TITLE TO PROPERTIES.
(A) GENERAL. Each of the Company and the Subsidiaries has good and
marketable title to all of the Property reflected in the most recent
balance sheet referred to in Section 0 (except as sold or otherwise
disposed of in the ordinary course of business), free from Liens not
otherwise permitted by provisions of the Note Agreement. Each of the
Company and the Subsidiaries has maintained and kept, or caused to be
maintained and kept, its respective properties in good repair, working
order and condition (ordinary wear and tear excepted), so that the
business to be carried on in connection therewith may be properly
conducted at all times.
(B) LEASES. All leases necessary for the conduct of the business of
the Company and the Subsidiaries are valid and subsisting and are in full
force and effect, except for such failures to be valid and subsisting
that, in the aggregate for all such failures, could not reasonably be
expected to have a Material Adverse Effect. Each lease of real Property
grants to the Company or the Subsidiary party thereto the right to the
quiet enjoyment of the premises leased thereunder during the term thereof.
(C) INTELLECTUAL PROPERTY. Each of the Company and the Subsidiaries
owns, possesses or has the right to use all of the licenses, permits,
franchises, patents, copyrights, trademarks, service marks and trade names
necessary for the present and currently planned future conduct of its
business, without any known conflict with the rights of others, except for
such failures to own, possess, or have the right to use, that, in the
aggregate for all such failures, could not reasonably be expected to have
a Material Adverse Effect.
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2.5 TAXES.
(A) RETURNS FILED; TAXES PAID. All material tax returns required to
be filed by the Company, any Subsidiary and each other Person with which
the Company or any Subsidiary files or has filed a consolidated return in
any jurisdiction have in fact been filed on a timely basis. All taxes,
assessments, fees and other governmental charges upon the Company and any
such Person, and upon any of their respective Properties, income or
franchises, that are due and payable have been paid, except for such
failures to pay that, in the aggregate for all such Persons, could not
reasonably be expected to have a Material Adverse Effect. Except for the
tax matters set forth on PART 2.5 OF ANNEX 3, the Company knows of no
proposed additional tax assessment against it or any such Person that
could reasonably be expected to have a Material Adverse Effect.
(B) BOOK PROVISIONS ADEQUATE. The amount of the liability for taxes
reflected in each of the statements of financial condition referred to in
Section 0 is in each case an adequate provision in all material respects
for taxes as of the dates of such statements of financial condition
(including, without limitation, any payment due pursuant to any tax
sharing agreement) as are or may become payable by any one or more of the
Company and the other Persons consolidated with the Company in such
financial statements in respect of all tax periods ending on or prior to
such dates.
2.6 PENDING LITIGATION.
(A) PENDING LITIGATION. There are no proceedings, actions or
investigations pending or threatened, against or affecting the Company or
any of the Subsidiaries in any court or before any Governmental Authority
or arbitration board or tribunal that, in the aggregate for all such
proceedings, actions and investigations, could reasonably be expected to
have a Material Adverse Effect.
(B) NO VIOLATIONS. Neither the Company nor any Subsidiary is in
violation of any judgment, order, writ, injunction or decree of any court,
Governmental Authority, arbitration board or tribunal that, in the
aggregate for all such violations, could reasonably be expected to have a
Material Adverse Effect.
2.7 CORPORATE ORGANIZATION AND AUTHORITY.
Each of the Company and each Subsidiary:
(a) is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation;
(b) has all corporate power and authority necessary to own and
operate its Properties and to carry on its business as now conducted and
as presently proposed to be conducted;
(c) has all licenses, certificates, permits, franchises and other
governmental authorizations necessary to own and operate its Properties
and to carry on its business as now conducted and as presently proposed to
be conducted, except where the failure to have such
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licenses, certificates, permits, franchises and other governmental
authorizations, in the aggregate for all such failures, could not
reasonably be expected to have a Material Adverse Effect; and
(d) has duly qualified or has been duly licensed, and is authorized
to do business and is in good standing, as a foreign corporation, in each
state in the United States of America and in each other jurisdiction where
it is required to do so, except where the failure to be so qualified or
licensed and authorized and in good standing, in the aggregate for all
such failures, could not reasonably be expected to have a Material Adverse
Effect.
2.8 CHARTER INSTRUMENTS, OTHER AGREEMENTS.
Neither the Company is nor any Subsidiary is in violation in any respect
of:
(a) any term of any charter instrument or bylaw; or
(b) any term in any agreement or other instrument to which it is a
party or by which it or any of its Property may be bound, except for such
violations that, in the aggregate for all such violations, could not
reasonably be expected to have a Material Adverse Effect.
2.9 RESTRICTIONS ON THE COMPANY.
Neither the Company nor any Subsidiary:
(a) is a party to any contract or agreement, or subject to any
charter or other corporate restriction that, in the aggregate for all such
contracts, agreements, and charter and corporate restrictions, is
reasonably likely to have a Material Adverse Effect;
(b) is a party to any contract or agreement that restricts its right
or ability to incur Debt or to issue Rights of the Company, as the case
may be, other than the Financing Documents and the agreements listed on
PART 0(B) OF ANNEX 3, none of which restricts the issuance and sale of the
Notes or the Warrants or the execution and delivery of, or compliance with
this Agreement or the other Financing Documents by the Company or any
Subsidiary Guarantor; and
(c) has agreed or consented to cause or permit in the future (upon
the happening of a contingency or otherwise) any of its Property, whether
now owned or hereafter acquired, to be subject to a Lien not permitted by
the provisions of the Note Agreement.
True, correct and complete copies of each of the agreements, if any, listed on
PART 0(B) OF ANNEX 3 have been provided to you.
2.10 COMPLIANCE WITH LAW.
Neither the Company nor any Subsidiary is in violation of any law,
ordinance, governmental rule or regulation to which it is subject, except for
such violations that, in the aggregate, could not reasonably be expected to have
a Material Adverse Effect.
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2.11 PENSION PLANS.
(A) OPERATION OF PLANS; LIABILITIES. The Company and each ERISA
Affiliate have operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance as have not
resulted in and could not reasonably be expected to result in a Material
Adverse Effect. Neither the Company nor any ERISA Affiliate has incurred
any liability pursuant to Title I or IV of ERISA or the penalty or excise
tax provisions of the IRC relating to employee benefit plans (as defined
in section 3 of ERISA), and no event, transaction or condition has
occurred or exists that could reasonably be expected to result in the
incurrence of any such liability by the Company or any ERISA Affiliate, or
in the imposition of any Lien on any of the rights, Properties or assets
of the Company or any ERISA Affiliate, in either case pursuant to Title I
or IV of ERISA or to such penalty or excise tax provisions or to section
401(a)(29) or 412 of the IRC, other than such liabilities or Liens as
individually or in the aggregate would not have a Material Adverse Effect.
(B) RELATIONSHIP OF BENEFIT LIABILITIES TO PLAN ASSETS. The present
value of the aggregate benefit liabilities under each of the Plans, if
any, as is subject to Title IV of ERISA (other than Multiemployer Plans),
determined as of the end of such Plan's most recently ended plan year on
the basis of the actuarial assumptions specified for funding purposes in
such Plan's most recent actuarial valuation report, did not exceed the
aggregate current value of the assets of such Plan allocable to such
benefit liabilities, except as could not reasonably be expected to have a
Material Adverse Effect or result in the imposition of any fine, penalty
or forfeiture or in any Lien upon any Property of the Company or any
Subsidiary or ERISA Affiliate. The term "BENEFIT LIABILITIES" has the
meaning specified in section 4001 of ERISA and the terms "CURRENT VALUE"
and "PRESENT VALUE" have the meaning specified in section 3 of ERISA.
(C) WITHDRAWAL LIABILITIES. The Company and its ERISA Affiliates
have not incurred withdrawal liabilities (and are not subject to
contingent withdrawal liabilities) under section 4201 or 4204 of ERISA in
respect of Multiemployer Plans, other than such liabilities as
individually or in the aggregate would not have a Material Adverse Effect.
(D) POSTRETIREMENT BENEFIT OBLIGATIONS. The expected postretirement
benefit obligation (determined as of the last day of the Company's most
recently ended fiscal year in accordance with Financial Accounting
Standards Board Statement No. 106, without regard to liabilities
attributable to continuation coverage mandated by section 4980B of the
IRC) of the Company will not have a Material Adverse Effect.
(E) PROHIBITED TRANSACTIONS. The execution and delivery of the
Financing Documents and the issuance and sale of the Purchased Securities
hereunder will not involve any transaction that is subject to the
prohibitions of section 406 of ERISA or in connection with which a tax
could be imposed pursuant to section 4975(c)(1)(A)-(D) of the IRC. The
representation by the Company in the foregoing sentence is made in
reliance upon and subject to the accuracy of your representation in
Section 0 as to the Sources of the funds used to pay the purchase price of
the Purchased Securities to be purchased by you.
(F) FOREIGN PENSION PLANS. Other than as set forth in PART 0 OF
ANNEX 3, the
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Company does not have or maintain, and is not required to contribute to,
any Foreign Pension Plan.
2.12 ENVIRONMENTAL COMPLIANCE.
(A) COMPLIANCE -- Except as disclosed on PART 0(A) OF ANNEX 3, each
of the Company and the Subsidiaries is in compliance with all
Environmental Protection Laws in effect in each jurisdiction where it is
presently doing business or is located, other than any non-compliance
which could not reasonably be expected to have a Material Adverse Effect.
(B) LIABILITY -- Except as disclosed on PART 0(B) OF ANNEX 3,
neither the Company nor any Subsidiary is subject to any liability under
any Environmental Protection Law that, individually or in the aggregate,
could be reasonably expected to have a Material Adverse Effect.
(C) NOTICES -- Except as disclosed on PART 0(C) OF ANNEX 3, neither
the Company nor any Subsidiary has received any:
(i) written notice from any Governmental Authority by which
any of its present or previously-owned or leased real Properties has
been designated, listed, or identified in any manner by any
Governmental Authority charged with administering or enforcing any
Environmental Protection Law as a hazardous substance disposal or
removal site, "Super Fund" clean-up site, or candidate for removal
or closure pursuant to any Environmental Protection Law;
(ii) written notice of any Lien arising under or in connection
with any Environmental Protection Law that has attached to any
revenues of, or to, any of its owned or leased real Properties; or
(iii) summons, citation, notice, directive, letter, or other
written communication from any Governmental Authority concerning any
intentional or unintentional action or omission by the Company or
any Subsidiary in connection with its ownership or leasing of any
real Property resulting in the releasing, spilling, leaking,
pumping, pouring, emitting, emptying, dumping, or otherwise
disposing of any hazardous substance into the environment resulting
in any material violation of any Environmental Protection Law;
which, in any such case, relates to or makes reference to an event or
condition which could reasonably be expected to have a Material Adverse
Effect.
2.13 DUE AUTHORIZATION; ENFORCEABILITY.
(A) SALE OF PURCHASED SECURITIES IS LEGAL AND AUTHORIZED. The
issuance, sale and delivery of the Notes and the Warrants by the Company,
the execution and delivery by each Obligor of the Financing Documents to
which it is a party and compliance by each Obligor with all of the
provisions of each Financing Document to which it is a party:
(i) is within the corporate powers of such Obligor; and
(ii) is legal and does not conflict with, result in any breach
of any of the
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provisions of, constitute a default under, or result in the creation
of any Lien upon any Property of any Obligor under the provisions
of:
(A) any agreement, charter instrument, bylaw or other
instrument to which such Obligor is a party or by which such
Obligor is or may be bound;
(B) any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to such
Obligor or any of its Property; or
(C) any statute or other rule or regulation of any
Governmental Authority applicable to such Obligor or any of
its Property.
(B) OBLIGATIONS ARE ENFORCEABLE. Each Obligor has duly authorized by
all necessary action on its part each of the Financing Documents to which
it is a party. Each of the Financing Documents has been executed and
delivered by one or more duly authorized officers of each Obligor which is
a party thereto and constitutes a legal, valid and binding obligation of
such Obligor, enforceable in accordance with its terms, except that:
(i) the enforceability thereof may be limited by applicable
bankruptcy, reorganization, arrangement, insolvency, moratorium, or
other similar laws affecting the enforceability of creditors' rights
generally and subject to the availability of equitable remedies; and
(ii) rights to indemnity and contribution contained therein
may be limited by applicable law or public policy.
2.14 GOVERNMENTAL CONSENT TO SALE OF PURCHASED SECURITIES.
(a) Neither the nature of any Obligor nor of any of its businesses
or Properties, nor any relationship between any Obligor and any other
Person, nor any circumstance in connection with the offer, issuance, sale
or delivery of the Notes or the Warrants and the execution and delivery of
any Financing Document, nor the performance of the obligations of any
Obligor thereunder, is such as to require a consent, approval or
authorization of, or pre-filing, registration or qualification with, any
Governmental Authority on the part of such Obligor as a condition thereto,
except for:
(i) to the extent required, registration under the Securities
Act of resales of the Common Stock issuable upon exercise of the
Warrants as required pursuant to the provisions of the Warrant
Agreement; and
(ii) such consents, approvals, authorizations, pre-filings,
registrations and qualifications described on PART 2.14(A) OF ANNEX
3, all of which have been obtained on or prior to such Closing Date.
(b) Each of the issuance and sale of the Notes and the Warrants, the
incurrence of the Debt and the other obligations represented thereby, the
execution and delivery of the Financing Documents by each Obligor which is
a party thereto and the performance of the obligations of each Obligor
hereunder and thereunder, by such Obligor:
10
(i) is not subject to regulation under the Investment Company
Act of 1940, as amended, the Public Utility Holding Company Act of
1935, as amended, the Transportation Acts of the United States of
America (49 U.S.C.), as amended, or the Federal Power Act, as
amended; and
(ii) does not violate any provision of any statute or other
rule or regulation of any Governmental Authority applicable to such
Obligor.
2.15 XXXX-XXXXX-XXXXXX COMPLIANCE.
The Warrants are "convertible voting securities" as such term is defined
in 16 C.F.R. ss.801.1(f)(2) which do not entitle the Purchasers to presently
vote in respect of the election of directors of the Company. Assuming that,
notwithstanding the fact that the Warrants are not currently exercisable on
either Closing Date, the Warrants were all exercised on such Closing Date, the
Purchasers as a group would not hold (as such term is defined in 16 C.F.R.
ss.801.1(c)) on the Second Closing Date either:
(a) fifteen percent (15%) or more of the total number of shares of
the Common Stock of the Company; or
(b) Common Stock having a Fair Market Value of Fifteen Million
Dollars ($15,000,000) or more.
2.16 NO DEFAULTS.
No event has occurred and no condition exists that, upon the execution and
delivery of the Financing Documents and the issuance and sale of the Purchased
Securities, would constitute a Default or an Event of Default.
2.17 PRIVATE OFFERING OF PURCHASED SECURITIES.
(A) NUMBER OF OFFEREES. Neither the Company, BancAmerica Xxxxxxxxx
Xxxxxxxx (the only agent, broker or dealer retained by the Company in
connection with the sale of the Purchased Securities) nor any other Person
acting on behalf of the Company has offered any of the Purchased
Securities or any Security of the Company similar to either the Notes or
the Warrants for sale to, or solicited offers to buy any thereof from, or
otherwise approached or negotiated with respect thereto with, any
prospective purchaser, other than the number of institutional "accredited
investors" (as defined in Regulation D under the Securities Act)
(including you) set forth on PART 0(A) OF ANNEX 3, each of whom was
offered all or a portion of the Purchased Securities at private sale for
investment.
(B) CONDUCT OF SALE. Neither the Company, BancAmerica Xxxxxxxxx
Xxxxxxxx nor any Person acting on behalf of the Company in connection with
the transactions contemplated by the Financing Documents (including,
without limitation, the offering and sale of the Purchased Securities) has
engaged in any conduct or entered into any agreements or understandings so
as to subject the transactions contemplated by the Financing Documents to
the registration provisions of section 5 of the Securities Act, the
provisions of the Trust Indenture Act of 1939, as amended, or to the
11
registration, qualification or other similar provisions of any securities
or "blue sky" law of any applicable state.
2.18 USE OF PROCEEDS.
(A) USE OF PROCEEDS. The Company shall apply the proceeds from the
sale of the Purchased Securities as specified on PART 0 OF ANNEX 3.
(B) MARGIN REGULATIONS. None of the transactions contemplated in any
of the Financing Documents (including, without limitation, the use of the
proceeds from the sale of the Purchased Securities) violates, will violate
or will result in a violation of section 7 of the Exchange Act, or any
regulation issued pursuant thereto, including, without limitation,
Regulation G, Regulation T or Regulation X of the Board of Governors of
the Federal Reserve System, 12 C.F.R., Chapter II.
(C) ABSENCE OF FOREIGN OR ENEMY STATUS. Neither the sale of the
Purchased Securities nor the use of proceeds from the sale thereof will
result in a violation of any of the foreign assets control regulations of
the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as
amended), or any ruling issued thereunder or any enabling legislation or
Presidential Executive Order in connection therewith.
2.19 CAPITALIZATION.
(A) CAPITALIZATION. PART 0(A) OF ANNEX 3 correctly sets forth, after
giving effect to the issuance of the Purchased Securities and the
consummation of all other transactions contemplated by this Agreement on
each Closing Date:
(i) the authorized and outstanding shares of the Capital
Stock, Rights and other Securities of the Company (specifying the
type, class or series of all such Capital Stock and other Securities
and whether such Capital Stock and other Securities are voting or
non-voting) and, in the case of any Rights, the number of shares of
Common Stock into which such Rights are currently exercisable or
convertible; and
(ii) all obligations (contingent or otherwise) of the Company
to repurchase or otherwise acquire or retire any shares of Capital
Stock or Rights of the Company.
All such outstanding shares of Capital Stock have been duly authorized and
validly issued and are fully paid, non-assessable and free and clear of
any Lien created by the Company. There are no preemptive rights,
subscription rights, or other contractual rights similar in nature to
preemptive rights with respect to any Capital Stock of the Company.
(B) RESERVATION OF COMMON STOCK. The Company has authorized and
unissued, and has reserved for issuance, a sufficient number of shares of
Common Stock to permit, after giving effect to the transactions
contemplated by the Financing Documents, the exercise of all of the
Warrants and all other Rights (including, without limitation, the
Outstanding Warrant) exercisable or convertible into Common Stock. Each
share of Common Stock reserved for issuance upon exercise of the Warrants,
when issued, will be fully paid and nonassessable, free and clear of any
12
Lien and not subject to any preemptive rights.
(C) STOCKHOLDERS AGREEMENTS. Other than the Warrant Agreement and as
specified on PART 0(C) OF ANNEX 3, there is no other agreement or
understanding known to the Company between or among any holders of the
Capital Stock or Rights of the Company regarding the Capital Stock of the
Company. The Company has provided you with true,accurate and complete
copies of all agreements referred to in PART 0(C) OF ANNEX 3.
2.20 SOLVENCY.
(A) ASSETS GREATER THAN LIABILITIES. The fair value of the business
and assets of the Company, of each Subsidiary Guarantor and of the Company
and the Subsidiaries, on a consolidated basis exceeds, as of and after
giving effect to the transactions consummated on each Closing Date, the
liabilities of such Person or group of Persons (including, without
limitation, the Notes, the Subsidiary Guarantees and all other Debt of
such Person or group of Persons) as of such time.
(B) MEETING LIABILITIES. After giving effect to the transactions
contemplated by the Financing Documents, the Company, each Subsidiary
Guarantor and the Company and the Subsidiaries, on a consolidated basis:
(i) will not be engaged in any business or transaction, or
about to engage in any business or transaction, for which such
Person or group of Persons has unreasonably small assets or capital
(within the meaning of the Uniform Fraudulent Transfer Act, the
Uniform Fraudulent Conveyance Act and section 548 of the Federal
Bankruptcy Code); and
(ii) will be able to pay its debts as they mature.
(C) INTENT. The Obligors are entering into the Financing Documents
with no intent to hinder, delay, or defraud either current creditors or
future creditors of any Obligor.
2.21 FULL DISCLOSURE.
Neither the statements made in this Agreement, the Offering Memorandum,
the financial statements referred to in Section 0, nor any other written
statement furnished by or on behalf of the Company to you in connection with the
negotiation or the closing of the sale of the Purchased Securities, taken as a
whole, contain any untrue statement of a material fact or omit a material fact
necessary to make the statements contained therein and herein, taken as a whole,
not misleading.
13
3. REPRESENTATIONS OF THE PURCHASER
3.1 PURCHASE FOR INVESTMENT.
You represent to the Company that you are a financially sophisticated
institutional investor that is experienced in financial matters and you are
purchasing the Purchased Securities listed on Annex 1 below your name for your
own account, or for the account of one or more separate accounts maintained by
you, for investment and with no present intention of, or view to, distributing
such Purchased Securities or any part thereof except in compliance with the
Securities Act, but without prejudice to your right at all times to:
(a) sell or otherwise dispose of all or any part of the Purchased
Securities under a registration statement filed under the Securities Act,
or in a transaction exempt from the registration requirements of such Act,
including (in the case of the Notes) a transaction pursuant to Rule 144A;
and
(b) have control over the disposition of all of your assets to the
fullest extent required by any applicable law.
It is understood that, in making the representations set out in Section
0(a) and Section 0, the Company is relying, to the extent applicable, upon your
representation as aforesaid.
3.2 ERISA.
You represent that at least one of the following statements is an accurate
representation as to each source of funds (a "SOURCE") to be used by you to pay
the purchase price of the Purchased Securities:
(A) GENERAL ACCOUNT -- you are an insurance company and the Source
is an "insurance company general account," as such term is defined in DOL
Prohibited Transaction Class Exemption 95-60 (issued July 12, 1995) ("PTCE
95-60"), and there is no employee benefit plan, treating as a single plan
all plans maintained by the same employer (and affiliates thereof as
defined in section V(a)(1) of PTCE 95-60) or by the same employee
organization, with respect to which the amount of the general account
reserves and liabilities for all contracts held by or on behalf of such
plan, exceeds 10% of the total reserves and liabilities of such general
account as determined under PTCE 95-60 (exclusive of separate account
liabilities) plus surplus, as set forth in the National Association of
Insurance Commissioners Annual Statement filed with your state of
domicile; or
(B) SEPARATE ACCOUNT -- the Source is a separate account:
(I) 10% POOLED SEPARATE ACCOUNT -- that is an insurance
company pooled separate account, within the meaning of DOL
Prohibited Transaction Class Exemption 90-1 (issued January 29,
1990) ("PTCE 90-1") and with respect to which the requirements of
XXXX 00-0 are otherwise met, and to the extent that there are any
plans whose assets in such separate account exceed ten percent (10%)
of the assets of such separate account, you have disclosed the names
of such plans to the Company in writing; or
14
(II) IDENTIFIED PLAN ASSETS -- that is comprised of employee
benefit plans identified by you in writing and with respect to which
the Company hereby warrants and represents that, as of each Closing
Date, neither the Company nor any ERISA Affiliate is a "party in
interest" (as defined in section 3 of ERISA) or a "disqualified
person" (as defined in section 4975 of the Code) with respect to any
plan so identified; or
(III) GUARANTIED SEPARATE ACCOUNT -- that is maintained solely
in connection with fixed contractual obligations of an insurance
company, under which any amounts payable, or credited, to any
employee benefit plan having an interest in such account and to any
participant or beneficiary of such plan (including an annuitant) are
not affected in any manner by the investment performance of the
separate account (as provided by 29 CFR ss.2510.3-101(h)(1)(iii));
or
(C) QPAM -- the Source constitutes assets of an "investment fund"
(within the meaning of Part V of the QPAM Exemption) managed by a
"qualified professional asset manager" or "QPAM" (within the meaning of
Part V of the QPAM Exemption), no employee benefit plan's assets that are
included in such investment fund, when combined with the assets of all
other employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of section V(c)(1) of the
QPAM Exemption) of such employer or by the same employee organization and
managed by such QPAM, exceed twenty percent (20%) of the total client
assets managed by such QPAM, the conditions of Part I(c) and (g) of the
QPAM Exemption are satisfied, neither the QPAM nor a person controlling or
controlled by the QPAM (applying the definition of "control" in section
V(e) of the QPAM Exemption) owns a five percent (5%) or more interest in
the Company and:
(i) the identity of such QPAM; and
(ii) the names of all employee benefit plans whose assets are
included in such investment fund
have been disclosed to the Company in writing; or
(D) EXEMPT PLANS -- the Source does not include assets of any
employee benefit plan, other than a plan exempt from the coverage of ERISA
and IRC ss.4975.
As used in this Section 0, the terms "EMPLOYEE BENEFIT PLAN" and "SEPARATE
ACCOUNT" shall have the respective meanings assigned to such terms in Section 3
of ERISA.
It is understood that, in making the representations set out in Section
0(a), Section 0 and Section 0, the Company is relying, to the extent applicable,
upon your representation as aforesaid.
15
4. FIRST CLOSING CONDITIONS
Your obligations under this Agreement, including, without limitation, the
obligation to purchase and pay for the First Closing Purchased Securities are
subject to the following conditions precedent, and the failure by the Company to
satisfy all such conditions shall relieve you, at your election, of all such
obligations.
4.1 OPINIONS OF COUNSEL.
You shall have received from
(a) Xxxxxx & Xxxx, L.L.P., special counsel for the
Company; and
(b) Xxxx & Xxxxxx, your special counsel;
closing opinions, each dated as of the First Closing Date, and substantially in
the respective forms set forth in Exhibit 0 and Exhibit 0. This Section 0 shall
constitute direction by the Company to such counsel named in Section 0 to
deliver such closing opinion to you.
4.2 WARRANTIES AND REPRESENTATIONS TRUE; COMPLIANCE.
(A) WARRANTIES AND REPRESENTATIONS TRUE. The warranties and
representations contained in Section 0 shall be true on the First Closing
Date with the same effect as though made on and as of that date.
(B) COMPLIANCE WITH THIS AGREEMENT AND FINANCING DOCUMENTS. The
Company shall have performed and complied with all agreements and
conditions contained herein and in the other Financing Documents that are
required to be performed or complied with by the Company on or prior to
the First Closing Date, and such performance and compliance shall remain
in effect on the First Closing Date.
4.3 OFFICERS' CERTIFICATES.
You shall have received:
(A) OFFICERS' CERTIFICATE -- a certificate dated the First Closing
Date and signed (on behalf of the Company) by two (2) Senior Officers of
the Company, substantially in the form of Exhibit 0; and
(B) SECRETARY'S CERTIFICATE -- COMPANY -- a certificate dated the
First Closing Date and signed on behalf of the Company by the Secretary or
an Assistant Secretary of the Company, substantially in the form of
Exhibit 0.
(C) SECRETARY'S CERTIFICATE -- SUBSIDIARY GUARANTORS -- a
certificate dated the First Closing Date and signed on behalf of each
Subsidiary Guarantor by the Secretary or an Assistant Secretary of each
such Subsidiary Guarantor, substantially in the form of Exhibit 0.
16
4.4 ORGANIC DOCUMENTS.
You shall have received:
(A) COMPANY GOOD STANDING CERTIFICATE -- a long-form certificate of
good standing or equivalent certificate or certificates of the Secretary
of State of the State of Texas, certifying the due incorporation, good
standing and satisfactory tax status of the Company and listing all
charter documents with respect to the Company on file with the Secretary
of State of the State of Texas;
(B) SUBSIDIARY GUARANTOR GOOD STANDING CERTIFICATES -a long-form
certificate of good standing or equivalent certificate or certificates of
the Secretary of State of the State of incorporation of each Subsidiary
Guarantor, certifying the due incorporation, good standing and
satisfactory tax status of such Subsidiary Guarantor and listing all
charter documents with respect to such Subsidiary Guarantor on file with
the Secretary of State of the State of incorporation of such Subsidiary
Guarantor;
(C) COMPANY CHARTER -- copies of all charter documents on file with
the Secretary of State of the State of Texas with respect to the Company,
certified by the Secretary of State of the State of Texas to be true,
correct and complete; and
(D) SUBSIDIARY GUARANTOR CHARTERS -- copies of all charter documents
on file with the Secretary of State of the State of incorporation of each
Subsidiary Guarantor with respect to such Subsidiary Guarantor, certified
by such Secretary of State to be true, correct and complete.
4.5 LEGALITY.
The Notes and the Warrants shall on the First Closing Date qualify as a
legal investment for you under applicable insurance law (without regard to any
"basket" or "leeway" provisions), and the acquisition thereof shall not subject
you to any penalty or other onerous condition pursuant to any such law or
regulation, and you shall have received such evidence as you may reasonably
request to establish compliance with this condition.
4.6 FINANCING DOCUMENTS.
(A) NOTE AGREEMENT; NOTES. The Company shall have executed and
delivered to each Purchaser the Note Agreement. The Company shall have
issued to each such Purchaser Notes in the respective principal amounts
set forth below such Purchaser's name on Annex 1.
(B) WARRANT AGREEMENT; WARRANTS. The Company shall have executed and
delivered to each Purchaser the Warrant Agreement. The Company shall have
issued to each such Purchaser Warrants in the respective amounts set forth
below such Purchaser's name on Annex 1.
(C) SUBSIDIARY GUARANTEE. Each of the Subsidiary Guarantors shall
have executed and delivered to you an Unconditional Guarantee (as may be
amended, restated or otherwise modified from time to time in accordance
with the terms thereof, a "SUBSIDIARY GUARANTEE") in the form of Exhibit
0.
17
4.7 RESERVATION OF SHARES. The shares of Common Stock issuable upon
exercise of each Warrant (whether issuable at the First Closing or the Second
Closing) shall have been duly authorized and reserved for issuance.
4.8 CERTAIN CONSENTS.
(A) SENIOR AGENT. The Senior Agent shall have executed and delivered
to you a consent, in form and substance acceptable to you, to the
transactions contemplated by the Financing Documents, permitting the
Company to incur and have outstanding the indebtedness and all other
obligations in respect of the Note Agreement, the Warrant Agreement, the
Notes and the Warrants, the issuance and sale of the Notes and the
Warrants and the issuance of Common Stock to the holders of the Warrants
upon exercise of the Warrants, permitting each Subsidiary Guarantor to
enter into the Subsidiary Guarantee, and waiving any default or event of
default which might have occurred by virtue of the execution and delivery
of this Agreement and the other Financing Documents.
(B) OTHER EQUITY HOLDERS. No consent of the holder of the
Outstanding Warrant or of any other class of Capital Stock or Rights shall
be required to enter into the transactions contemplated by the Financing
Documents or having any anti-dilution, preemptive right, redemption right
or similar right in respect of any of the transactions contemplated by the
Financing Documents.
4.9 PRIVATE PLACEMENT NUMBERS.
The Company shall have obtained or caused to be obtained private placement
numbers for the Notes and the Warrants from the CUSIP Service Bureau of Standard
& Poor's, a division of XxXxxx-Xxxx, Inc. and you shall have been informed of
such private placement numbers. The Company shall have informed the Purchasers
in writing of the CUSIP number for the Common Stock.
4.10 FEES AND EXPENSES.
All fees and disbursements required to be paid pursuant to Section 0 shall
have been paid in full.
4.11 OTHER PURCHASERS.
None of the Other Purchasers shall have failed to execute and deliver a
Securities Purchase Agreement, the Note Agreement, the Warrant Agreement or any
other Financing Document to be executed and delivered by it, or to accept
delivery of or make payment for the First Closing Purchased Securities.
4.12 PROCEEDINGS SATISFACTORY.
All proceedings taken in connection with the issuance and sale of the
First Closing Purchased Securities and all documents and papers relating thereto
shall be reasonably satisfactory to you and your special counsel. You and your
special counsel shall have received copies of such documents and papers as you
or they may reasonably request in connection therewith or in connection with
your special counsel's closing opinion, all in form and substance reasonably
satisfactory to you and your special counsel.
18
5. SECOND CLOSING CONDITIONS
Your obligations under this Agreement, including, without limitation, the
obligation to purchase and pay for the Second Closing Purchased Securities are
subject to the following conditions precedent, and the failure by the Company to
satisfy all such conditions shall relieve you, at your election, of all such
obligations.
5.1 OPINIONS OF COUNSEL.
You shall have received from
(a) Xxxxxx & Xxxx, L.L.P., special counsel for the Company; and
(b) Xxxx & Xxxxxx, your special counsel;
closing opinions, each dated as of the Second Closing Date, and substantially in
the respective forms set forth in Exhibit 0 and Exhibit 0. This Section 0 shall
constitute direction by the Company to such counsel named in Section 0 to
deliver such closing opinion to you.
5.2 WARRANTIES AND REPRESENTATIONS TRUE; COMPLIANCE.
(A) WARRANTIES AND REPRESENTATIONS TRUE. The warranties and
representations contained in Section 0 shall be true in all material
respects on the Second Closing Date with the same effect as though made on
and as of that date.
(B) COMPLIANCE WITH THIS AGREEMENT AND FINANCING DOCUMENTS. The
Company shall have performed and complied with all agreements and
conditions contained herein and in the other Financing Documents that are
required to be performed or complied with by the Company on or prior to
the Second Closing Date, and such performance and compliance shall remain
in effect on the Second Closing Date.
(C) MATERIAL ADVERSE CHANGE. No event or circumstance (either
individually or in the aggregate with all other events and circumstances)
shall have occurred since the First Closing Date which shall have had a
material adverse effect upon:
(i) the business, operations, profits, financial condition or
Properties of the Company and the Restricted Subsidiaries, taken as
a whole;
(ii) the ability of the Company to perform its obligations
under any Financing Document; or
(iii) the validity or enforceability of any of the Financing
Documents.
5.3 OFFICERS' CERTIFICATES.
You shall have received:
19
(A) OFFICERS' CERTIFICATE -- a certificate dated the Second Closing
Date and signed (on behalf of the Company) by two (2) Senior Officers of
the Company, substantially in the form of Exhibit 0; and
(B) SECRETARY'S CERTIFICATE -- a bring-down certificate dated the
Second Closing Date and signed on behalf of the Company by the Secretary
or an Assistant Secretary of the Company, substantially in the form of
Exhibit 0.
5.4 ORGANIC DOCUMENTS.
You shall have received:
(A) COMPANY GOOD STANDING CERTIFICATE -- a long-form certificate of
good standing or equivalent certificate or certificates of the Secretary
of State of the State of Texas, certifying the due incorporation, good
standing and satisfactory tax status of the Company and listing all
charter documents with respect to the Company on file with the Secretary
of State of the State of Texas;
(B) COMPANY CHARTER -- copies of all charter documents on file with
the Secretary of State of the State of Texas with respect to the Company
and not delivered at the First Closing, certified by the Secretary of
State of the State of Texas to be true, correct and complete.
5.5 LEGALITY.
The Notes and the Warrants shall on the Second Closing Date qualify as a
legal investment for you under applicable insurance law (without regard to any
"basket" or "leeway" provisions), and the acquisition thereof shall not subject
you to any penalty or other onerous condition pursuant to any such law or
regulation, and you shall have received such evidence as you may reasonably
request to establish compliance with this condition.
5.6 FINANCING DOCUMENTS.
(A) AGREEMENTS IN FULL FORCE AND EFFECT. Each of the Note Agreement,
the Warrant Agreement, each Subsidiary Guarantee and each of the First
Closing Purchased Securities shall be and remain in full force and effect.
(B) CONFIRMATION OF SUBSIDIARY GUARANTEE. Each of the Subsidiary
Guarantors shall have acknowledged in writing that the Subsidiary
Guarantee executed by such Subsidiary Guarantor extends to the obligations
of the Company evidenced by the Notes issued at the Second Closing, and
that such Notes are "Guaranteed Obligations" as defined in such Subsidiary
Guarantee.
5.7 FEES AND EXPENSES.
All fees and disbursements required to be paid pursuant to Section 0 shall
have been paid in full.
20
5.8 OTHER PURCHASERS.
None of the Other Purchasers shall have failed to accept delivery of or
make payment for the Second Closing Purchased Securities.
5.9 PROCEEDINGS SATISFACTORY.
All proceedings taken in connection with the issuance and sale of the
Second Closing Purchased Securities and all documents and papers relating
thereto shall be reasonably satisfactory to you and your special counsel. You
and your special counsel shall have received copies of such documents and papers
as you or they may reasonably request in connection therewith or in connection
with your special counsel's closing opinion, all in form and substance
reasonably satisfactory to you and your special counsel.
6. INTERPRETATION OF THIS AGREEMENT
6.1 TERMS DEFINED.
As used herein, the following terms have the respective meanings set forth
below or set forth in the Section hereof following such term:
AGREEMENT, THIS -- means this Securities Purchase Agreement, as it may be
amended, restated or otherwise modified from time to time.
CLOSING -- means and includes the First Closing Date and the Second
Closing Date.
CLOSING DATE -- means and includes the First Closing Date and the Second
Closing Date.
COMPANY -- has the meaning specified in the introductory sentence.
ENVIRONMENTAL PROTECTION LAW -- means any law, statute or regulation
enacted by any Governmental Authority in connection with or relating to the
protection or regulation of the environment, including, without limitation,
those laws, statutes and regulations regulating the disposal, removal,
production, storing, refining, handling, transferring, processing or
transporting of Hazardous Materials and any applicable orders, decrees or
judgments issued by any court of competent jurisdiction in connection with any
of the foregoing.
FINANCING DOCUMENTS -- means and includes this Agreement, the identical
Securities Purchase Agreements executed by the Other Purchasers, the Note
Agreement, the Notes, the Warrant Agreement, the Warrants, the Warrant
Certificates, each Subsidiary Guarantee and the other agreements, certificates
and instruments to be executed pursuant to the terms of each of the foregoing,
as each may be amended, restated or otherwise modified from time to time.
FIRST CLOSING -- Section 0.
FIRST CLOSING DATE -- Section 0.
21
FIRST CLOSING PURCHASED SECURITIES -- means the Notes and the Warrants to
be purchased by the Purchasers at the First Closing, as set forth for each
Purchaser on Annex 1 hereto under the heading "First Closing."
GOVERNMENTAL AUTHORITY -- means:
(a) the government of:
(i) the United States of America and any state or other
political subdivision thereof; or
(ii) any other jurisdiction in which the Company or any
Subsidiary conducts all or any part of its business, or that asserts
any jurisdiction over the conduct of the affairs of, or the Property
of, the Company or any such Subsidiary; and
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
HAZARDOUS MATERIAL -- means all or any of the following:
(a) substances that are defined or listed in, or otherwise
classified pursuant to, any applicable Environmental Protection Laws as
"hazardous substances", "hazardous materials", "hazardous wastes", "toxic
substances" or any other formulation intended to define, list or classify
substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, "TLCP
toxicity" or "EP toxicity";
(b) oil, petroleum or petroleum derived substances, natural gas,
natural gas liquids or synthetic gas and drilling fluids, produced waters
and other wastes associated with the exploration, development or
production of crude oil, natural gas or geothermal resources;
(c) any flammable substances or explosives or any radioactive
materials;
(d) asbestos or urea formaldehyde in any form; and
(e) dielectric fluid containing levels of polychlorinated biphenyls
in excess of fifty parts per million.
NOTE AGREEMENT -- Section 0.
NOTES -- Section 0.
OBLIGORS -- means and includes the Company and each Subsidiary Guarantor.
OTHER PURCHASERS -- Section 0.
OUTSTANDING WARRANT -- means that certain warrant to purchase five
thousand (5,000) shares of the Common Stock issued to Xxxxx Xxxxxx & Associates.
22
PROJECTIONS -- Section 0.
PTCE 95-60 -- Section 0.
PURCHASED SECURITIES -- means the Notes and the Warrants to be purchased
by the Purchasers pursuant to Section 0 of this Agreement, and shall include the
First Closing Purchased Securities and the Second Closing Purchased Securities.
PURCHASERS -- means you and the Other Purchasers.
QPAM EXEMPTION -- means Prohibited Transaction Class Exemption 84-14
issued by the DOL.
RULE 144A -- means Rule 144A promulgated under the Securities Act, 17
C.F.R. ss.230.144A, as such rule may be amended from time to time.
SECOND CLOSING -- Section 0.
SECOND CLOSING DATE -- Section 0.
SECOND CLOSING PURCHASED SECURITIES -- means the Notes and the Warrants to
be purchased by the Purchasers at the Second Closing, as set forth for each
Purchaser on Annex 1 hereto under the heading "Second Closing."
SECURITIES PURCHASE AGREEMENT -- Section 0.
SOURCE -- Section 0.
SUBSIDIARY GUARANTEE -- Section 0.
SUBSIDIARY GUARANTOR -- means each Subsidiary scheduled or required to be
scheduled on PART 0 OF ANNEX 3.
WARRANT AGREEMENT -- Section 0.
WARRANT CERTIFICATES -- Section 0.
WARRANTS -- Section 0.
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6.2 OTHER DEFINITIONS.
The following terms shall have the respective meanings ascribed to such
terms in the Note Agreement:
Affiliate Lien
Applicable Interest Law Material Adverse Effect
Bank of America Maximum Legal Rate of Interest
Business Day Multiemployer Plan
Capital Stock Offering Memorandum
Common Stock Person
Debt Plan
Default Property
DOL Restricted Investment
ERISA Rights
ERISA Affiliate Securities Act
Event of Default Security
Exchange Act Senior Agent
Fair Market Value Senior Credit Agreement
Foreign Pension Plan Senior Officer
GAAP Subsidiary
Investments Voting Stock
IRC
6.3 SECTION HEADINGS AND TABLE OF CONTENTS AND
CONSTRUCTION.
(A) SECTION HEADINGS AND TABLE OF CONTENTS, ETC. The titles of the
Sections of this Agreement and the Table of Contents of this Agreement
appear as a matter of convenience only, do not constitute a part hereof
and shall not affect the construction hereof. The words "herein,"
"hereof," "hereunder" and "hereto" refer to this Agreement as a whole and
not to any particular Section or other subdivision. References to Sections
are, unless otherwise specified, references to Sections of this Agreement.
References to Annexes and Exhibits are, unless otherwise specified,
references to Annexes and Exhibits attached to this Agreement.
(B) CONSTRUCTION. Each covenant contained herein shall be construed
(absent an express contrary provision herein) as being independent of each
other covenant contained herein, and compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with one or more other covenants.
6.4 GOVERNING LAW.
THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK.
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7. MISCELLANEOUS
7.1 COMMUNICATIONS.
(A) METHOD; ADDRESS. All communications hereunder shall be in
writing and shall be delivered either by nationwide overnight courier or
by facsimile transmission (confirmed by delivery by nationwide overnight
courier sent on the day of the sending of such facsimile transmission).
Communications to the Company shall be addressed as set forth on Annex 2,
or at such other address of which the Company shall have notified each
Purchaser. Communications to the Purchasers shall be addressed as set
forth on Annex .
(B) WHEN GIVEN. Any communication addressed and delivered as herein
provided shall be deemed to be received when actually delivered to the
address of the addressee (whether or not delivery is accepted) or received
by the telecopy machine of the recipient. Any communication not so
addressed and delivered shall be ineffective.
(C) SERVICE OF PROCESS. Notwithstanding the foregoing provisions of
this Section 0, service of process in any suit, action or proceeding
arising out of or relating to this Agreement or any document, agreement or
transaction contemplated hereby shall be delivered in the manner provided
in Section 0(c).
7.2 REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating hereto, including, without
limitation, consents, waivers and modifications that may hereafter be executed,
documents received by you at the closing of your purchase of the Purchased
Securities (except the Purchased Securities themselves), and financial
statements, certificates and other information previously or hereafter furnished
to any Purchaser, may be reproduced by the Company or any Purchaser by any
photographic, photostatic, microfilm, micro-card, miniature photographic,
digital or other similar process and each Purchaser may destroy any original
document so reproduced. Any such reproduction shall be admissible in evidence as
the original itself in any judicial or administrative proceeding (whether or not
the original is in existence and whether or not such reproduction was made by
the Company or such Purchaser in the regular course of business) and any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence. Nothing in this Section 0 shall prohibit the
Company or any Purchaser from contesting the accuracy or validity of any such
reproduction.
7.3 SURVIVAL.
All warranties, representations, certifications and covenants made by the
Company herein or in any certificate or other instrument delivered by the
Company on behalf of the Company hereunder shall be considered to have been
relied upon by you and shall survive the delivery to you of the Purchased
Securities regardless of any investigation made by you or on your behalf. All
statements in any certificate or other instrument delivered by or on behalf of
the Company pursuant to the terms hereof shall constitute warranties and
representations by the Company hereunder.
25
7.4 SUCCESSORS AND ASSIGNS.
This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties hereto. The provisions hereof are
intended to be for the benefit of the Purchasers and their successors and
assigns, and shall be enforceable by any such Purchaser, successor or assignee
whether or not an express assignment of rights hereunder shall have been made by
you or your successor or assign. Anything contained in this Section 0
notwithstanding, the Company may not assign any of its respective rights, duties
or obligations hereunder or under any of the other Financing Documents without
the prior written consent of all Purchasers.
7.5 AMENDMENT AND WAIVER.
This Agreement may be amended, and the observance of any term hereof may
be waived, with (and only with) the written consent of the Company and you.
7.6 EXPENSES.
Whether or not the Notes and the Warrants are sold, the Company shall pay,
at the Closing (if the Notes and the Warrants are sold, and otherwise upon
receipt of any statement or invoice therefor), all reasonable out-of-pocket
fees, expenses and costs attributable to legal and accounting services incurred
by you relating hereto, including, without limitation, the statement
presented at the Closing by your special counsel for reasonable fees and
disbursements incurred in connection herewith, each additional statement for
reasonable fees and disbursements (promptly upon receipt thereof) of your
special counsel rendered after the Closing in connection with the issuance of
the Notes and the Warrants, all fees and disbursements of Ernst & Young related
hereto and all expenses incurred by you or on your behalf or the Company's
behalf in complying with each of the conditions to the Closing set forth in
Section 0.
7.7 WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION; ETC.
(A) WAIVER OF JURY TRIAL. THE PARTIES HERETO VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OF THE DOCUMENTS, AGREEMENTS OR TRANSACTIONS
CONTEMPLATED HEREBY.
(B) CONSENT TO JURISDICTION. ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT, OR ANY OF THE DOCUMENTS, AGREEMENTS
OR TRANSACTIONS CONTEMPLATED HEREBY OR ANY ACTION OR PROCEEDING TO EXECUTE
OR OTHERWISE ENFORCE ANY JUDGMENT IN RESPECT OF ANY BREACH UNDER THIS
AGREEMENT OR ANY DOCUMENT OR AGREEMENT CONTEMPLATED HEREBY MAY BE BROUGHT
BY SUCH PARTY IN ANY FEDERAL DISTRICT COURT LOCATED IN NEW YORK CITY, NEW
YORK, OR ANY NEW YORK STATE COURT LOCATED IN NEW YORK CITY, NEW YORK AS
SUCH PARTY MAY IN ITS SOLE DISCRETION ELECT, AND BY THE EXECUTION AND
DELIVERY OF THIS AGREEMENT, THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY SUBMIT TO THE NON-EXCLUSIVE IN PERSONAM
26
JURISDICTION OF EACH SUCH COURT, AND EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES AND AGREES NOT TO ASSERT IN ANY PROCEEDING BEFORE ANY
TRIBUNAL, BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, ANY CLAIM THAT IT
IS NOT SUBJECT TO THE IN PERSONAM JURISDICTION OF ANY SUCH COURT. IN
ADDITION, EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE
TO THE LAYING OF VENUE IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY DOCUMENT, AGREEMENT OR TRANSACTION
CONTEMPLATED HEREBY BROUGHT IN ANY SUCH COURT, AND HEREBY IRREVOCABLY
WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(C) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY AGREES THAT
PROCESS PERSONALLY SERVED OR SERVED BY U.S. REGISTERED MAIL AT THE
ADDRESSES PROVIDED HEREIN FOR NOTICES SHALL CONSTITUTE, TO THE EXTENT
PERMITTED BY LAW, ADEQUATE SERVICE OF PROCESS IN ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT,
AGREEMENT OR TRANSACTION CONTEMPLATED HEREBY, OR ANY ACTION OR PROCEEDING
TO EXECUTE OR OTHERWISE ENFORCE ANY JUDGMENT IN RESPECT OF ANY BREACH
HEREUNDER OR UNDER ANY DOCUMENT OR AGREEMENT CONTEMPLATED HEREBY. RECEIPT
OF PROCESS SO SERVED SHALL BE CONCLUSIVELY PRESUMED AS EVIDENCED BY A
DELIVERY RECEIPT FURNISHED BY THE UNITED STATES POSTAL SERVICE OR ANY
COMMERCIAL DELIVERY SERVICE.
(D) OTHER FORUMS. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT
THE ABILITY OF ANY PURCHASER TO SERVE ANY WRITS, PROCESS OR SUMMONSES IN
ANY MANNER PERMITTED BY APPLICABLE LAW OR TO OBTAIN JURISDICTION OVER THE
COMPANY IN SUCH OTHER JURISDICTION, AND IN SUCH OTHER MANNER, AS MAY BE
PERMITTED BY APPLICABLE LAW.
27
7.8 INDEMNIFICATION OF EACH PURCHASER.
From and at all times after the date of this Agreement, and in addition to
all of your other rights and remedies against the Company, the Company agrees to
indemnify and hold harmless you and each of your directors, officers, employees,
agents, investment advisors and affiliates against any and all claims (whether
valid or not), losses, damages, liabilities, costs and expenses of any kind or
nature whatsoever (including, without limitation, reasonable attorneys' fees,
costs and expenses), incurred by or asserted against you or any such director,
officer, employee, agent, investment advisor or affiliate, from and after the
date hereof, whether direct, indirect or consequential, as a result of or
arising from or in any way relating to any suit, action or proceeding (including
any inquiry or investigation) by any Person, whether threatened or initiated,
asserting a claim for any legal or equitable remedy against any Person under any
statute or regulation, including, but not limited to, any federal or state
securities laws, or under any common law or equitable cause or otherwise,
arising from or in connection with the negotiation, preparation, execution,
performance or enforcement of this Agreement or the other Financing Documents or
any transactions contemplated herein or therein, or any of the transactions
contemplated hereunder, whether or not such you or any such director, officer,
employee, agent, investment advisor or affiliate is a party to any such action,
proceeding, suit or the target of any such inquiry or investigation; PROVIDED,
HOWEVER, that no indemnified party shall have the right to be indemnified
hereunder for any liability resulting from the willful misconduct or gross
negligence of such indemnified party or breach by such indemnified party of its
own obligations under this Agreement. All of your foregoing losses, damages,
costs and expenses shall be payable as and when incurred upon the demand of the
indemnified party. The obligations of the Company and your rights under this
Section 0 shall survive the termination of this Agreement.
7.9 ENTIRE AGREEMENT.
This Agreement constitutes the final written expression of all of the
terms hereof and is a complete and exclusive statement of those terms.
7.10 EXECUTION IN COUNTERPART.
This Agreement may be executed in one or more counterparts and shall be
effective when at least one counterpart shall have been executed by each party
hereto, and each set of counterparts that, collectively, show execution by each
party hereto shall constitute one duplicate original.
[Remainder of page intentionally blank. Next page is signature page.]
28
If this Agreement is satisfactory to you, please so indicate by signing
the acceptance at the foot of a counterpart hereof and returning such
counterpart to the Company, whereupon this Agreement shall become binding among
us in accordance with its terms.
Very truly yours,
FRESH AMERICA CORP.
By:_____________________________
Name:
Title:
Accepted:
[SEPARATELY EXECUTED BY EACH
OF THE FOLLOWING PURCHASERS]
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