Exhibit 4.1
LANDEC CORPORATION
SERIES A PREFERRED STOCK PURCHASE AGREEMENT
NOVEMBER 19, 1999
LANDEC CORPORATION
SERIES A PREFERRED STOCK PURCHASE AGREEMENT
This Series A Preferred Stock Purchase Agreement (the "AGREEMENT") is
made as of the 19th day of November, 1999 by and between Landec Corporation, a
California corporation (the "COMPANY"), and Frederick Frank (the "PURCHASER").
The parties hereby agree as follows:
1. PURCHASE AND SALE OF PREFERRED STOCK.
1.1 SALE AND ISSUANCE OF PREFERRED STOCK.
(a) As of the Closing (as defined below) Company will
have authorized the issuance, pursuant to the terms and conditions of this
Agreement, of 50,000 shares of Series A-1 Preferred Stock, $0.001 par value, and
116,667 shares of Series A-2 Preferred Stock, $0.001 par value, each having the
rights, preferences, privileges and restrictions set forth in the Certificate of
Determination of Rights, Preferences and Privileges of Series A Preferred Stock
attached to this Agreement as EXHIBIT B (the "CERTIFICATE OF DETERMINATION"),
and shall have filed the Certificate of Determination with the California
Secretary of State. As used herein, the term "Series A Preferred Stock" shall
refer to each of the SERIES A-1 PREFERRED STOCK and the Series A-2 Preferred
Stock.
(b) Subject to the terms and conditions of this
Agreement, the Purchaser agrees to purchase at the Closing and the Company
agrees to sell and issue to the Purchaser at the Closing that number of shares
of Series A Preferred Stock set forth opposite the Purchaser's name on EXHIBIT A
attached hereto at a purchase price of $60.00 per share. The shares of Series A
Preferred Stock issued to the Purchaser pursuant to this Agreement shall be
hereinafter referred to as the "STOCK", and the Common Stock of the Company
issuable upon conversion of the Stock shall be hereinafter referred to as the
"CONVERTED COMMON STOCK".
1.2 CLOSING; DELIVERY.
(a) The purchase and sale of the Stock shall take
place at the offices of Orrick, Herrington & Sutcliffe LLP, 1020 Marsh Road,
Menlo Park, California, at 10:00 a.m., on November 19, 1999, or at such other
time and place as the Company and the Purchaser mutually agree upon, orally or
in writing (which time and place are designated as the "CLOSING").
(b) At the Closing, the Company shall deliver to the
Purchaser a certificate representing the Stock being purchased thereby against
payment of the purchase price therefor by certified check or by wire transfer to
the Company's bank account.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY. The
Company hereby represents, warrants and covenants to the Purchaser as follows:
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2.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of California and has all requisite corporate power
and authority to carry on its business as now conducted and as proposed to be
conducted. The Company is duly qualified to transact business and is in good
standing in each jurisdiction in which the failure so to qualify would have a
material adverse effect on its business or properties.
2.2 AUTHORIZATION. All corporate action on the part of the
Company, its officers, directors and shareholders necessary for the
authorization, execution and delivery of this Agreement and the Standstill
Agreement in the form attached hereto as EXHIBIT C (the "STANDSTILL AGREEMENT")
to be executed by the Purchaser, the performance of all obligations of the
Company hereunder and thereunder and the authorization, issuance and delivery of
the Stock and the Converted Common Stock (together, the "SECURITIES") has been
taken or will be taken prior to the Closing, and the Agreement, when executed
and delivered by the Company, shall constitute a valid and legally binding
obligations of the Company, enforceable against the Company in accordance with
its terms except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, and other laws of general
application affecting enforcement of creditors' rights generally, as limited by
laws relating to the availability of specific performance, injunctive relief, or
other equitable remedies.
2.3 VALID ISSUANCE OF SECURITIES. The Stock that is being
issued to the Purchaser hereunder, when issued, sold and delivered in accordance
with the terms hereof for the consideration expressed herein, will be duly and
validly issued, fully paid and nonassessable and free of restrictions on
transfer other than restrictions on transfer under this Agreement, the
Standstill Agreement and those set forth under the Certificate of Determination
and applicable state and federal securities laws. Based in part upon the
representations of the Purchaser in this Agreement and subject to the provisions
of Section 2.5 below, the Stock will be issued in compliance with all applicable
federal and state securities laws. The Converted Common Stock has been duly and
validly reserved for issuance, and upon issuance in accordance with the terms of
the Certificate of Determination, shall be duly and validly issued, fully paid
and nonassessable and free of restrictions on transfer other than restrictions
on transfer under this Agreement, the Standstill Agreement and applicable
federal and state securities laws and will be issued in compliance with all
applicable federal and state securities laws.
2.4 GOVERNMENTAL CONSENTS. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
the Company is required in connection with the consummation of the transactions
contemplated by this Agreement and the Standstill Agreements, except for such
filings as may be required to be made with the Securities and Exchange
Commission (the "SEC") and the Nasdaq National Market and similar filings under
applicable state securities laws.
2.5 DISCLOSURE. The Company has furnished the Purchaser with
true and complete copies of all documents (other than preliminary materials)
filed with the SEC (the "SEC") since January 1, 1998 (the "SEC DOCUMENTS"). As
of their respective filing dates, the
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SEC Documents complied in all material respects with the requirements of the
Securities Act of 1933 (the "SECURITIES ACT") or the Securities Exchange Act of
1934 (the "EXCHANGE ACT"), as applicable. Neither the Agreement nor any of the
SEC Documents as of their respective dates included an untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The financial statements of the Company included in the
SEC Documents (the "FINANCIAL STATEMENTS") comply as to form in all material
respects with applicable accounting requirements and with the published rules
and regulations of the SEC with respect thereto. The Financial Statements have
been prepared in accordance with generally accepted accounting principles
consistently applied and fairly present the consolidated financial position of
the Company and any subsidiaries at the dates thereof and the consolidated
results of their operations and consolidated cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal, recurring
adjustments).
2.6 CHANGES. Except as disclosed herein or in reports filed
with the SEC by the Company, since July 31, 1999, there has not been (a) any
change in the assets, liabilities, financial condition, business prospects or
operations of the Company from those reflected in the Financial Statements,
except changes in the ordinary course of business which, individually and in the
aggregate, have not had a material adverse effect on the Company and its
subsidiaries considered as one enterprise; (b) any material change or amendment
to a contract or arrangement by which the Company or any of its assets or
properties is bound or subject and filed as an exhibit to the SEC Documents; (c)
any resignation or termination of employment, or to the Company's knowledge, any
impending resignation or termination of employment, of any executive officer or
of the Company; or (d) any declaration or payment of any dividend or other
distribution of assets of the Company.
2.7 INDIVIDUAL PURCHASER. The Company hereby understands and
agrees that the Purchaser is purchasing solely in his individual and personal
capacity and not as a representative or officer, director or employee of Lehman
Brothers, and that Lehman Brothers shall have no liability whatsoever with
respect to any obligations of the Purchaser hereunder, including but not limited
to the obligation to purchase the Stock in accordance with the terms and
conditions hereof.
3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The
Purchaser hereby represents and warrants to the Company that:
3.1 AUTHORIZATION. This Agreement and the Standstill
Agreement has been duly authorized by all necessary corporate action on the part
of the Purchaser and, when executed and delivered by Purchaser, will constitute
valid and legally binding obligations of Purchaser, enforceable in accordance
with their terms, except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, and any other laws of general
application affecting enforcement of creditors' rights generally, and as limited
by laws relating to the availability of a specific performance, injunctive
relief, or other equitable remedies.
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3.2 PURCHASE ENTIRELY FOR OWN ACCOUNT. This Agreement is made
with Purchaser in reliance upon Purchaser's representation to the Company, which
by Purchaser's execution of this Agreement, Purchaser hereby confirms, that the
Securities to be acquired by Purchaser will be acquired for investment for
Purchaser's own account, not as a nominee or agent for any person or entity,
including but not limited to Lehman Brothers, and not with a view to the resale
or distribution of any part thereof, and that Purchaser has no present intention
of selling, granting any participation in, or otherwise distributing the same.
By executing this Agreement, Purchaser further represents that Purchaser does
not presently have any contract, undertaking, agreement or arrangement with any
person or entity, including but not limited to Lehman Brothers, to sell,
transfer or grant participations to such person or to any third person, with
respect to any of the Securities. Such Purchaser represents that it has full
power and authority to enter into this Agreement.
3.3 DISCLOSURE OF INFORMATION. Purchaser has had an
opportunity to discuss the Company's business, management, financial affairs and
the terms and conditions of the offering of the Stock with the Company's
management and has reviewed the SEC Documents. Purchaser understands that such
discussions, as well as the written information issued by the Company, were
intended to describe the aspects of the Company's business which it believes to
be material.
3.4 RESTRICTED SECURITIES. Purchaser understands that the
Securities have not been registered under the Securities Act, by reason of a
specific exemption from the registration provisions of the Securities Act which
depends upon, among other things, the bona fide nature of the investment intent
and the accuracy of such Purchaser's representations as expressed herein.
Purchaser understands that the Securities are "restricted securities" under
applicable U.S. federal and state securities laws and that, pursuant to these
laws, Purchaser must hold the Securities indefinitely unless they are registered
with the SEC and qualified by state authorities, or an exemption from such
registration and qualification requirements is available. Purchaser acknowledges
that if an exemption from registration or qualification is available, it may be
conditioned on various requirements including, but not limited to, the time and
manner of sale, the holding period for the Securities, and on requirements
relating to the Company which are outside of such Purchaser's control, and which
the Company may not be able to satisfy.
3.5 LEGENDS. Purchaser understands that the Securities and
any securities issued in respect of or exchange for the Securities, may bear one
or all of the following legends:
(a) "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A
FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER
THE SECURITIES ACT OF 1933."
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(b) Any legend required by the Blue Sky laws of any
state to the extent such laws are applicable to the shares represented by the
certificate so legended.
3.6 ACCREDITED INVESTOR. Purchaser is an accredited investor
as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.
3.7 FOREIGN INVESTORS. Purchaser is a United States person
(as defined by Section 7701(a)(30) of the Internal Revenue Code of 1986, as
amended). Purchaser's subscription and payment for and continued beneficial
ownership of the Securities, will not violate any applicable securities or other
laws of Purchaser's jurisdiction.
3.8 GOVERNMENTAL CONSENTS. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
the Company is required in connection with the consummation of the transactions
contemplated by this Agreement and the Standstill Agreement, except for such
filings as may be required to be made with the SEC and the Nasdaq National
Market. and similar filings under applicable state securities laws.
4. REGISTRATION REQUIREMENTS.
4.1 SHELF REGISTRATION. The Company shall use reasonable
commercial efforts to prepare and file with the Securities and Exchange
Commission (the "SEC") a Registration Statement pursuant to Rule 415 (or any
appropriate similar rule that may be adopted by the SEC) under the Securities
Act covering the Converted Common Stock (including any amendment thereto, the
"SHELF REGISTRATION") not later than sixty (60) days after the Closing (the
"FILING DATE"). The Shelf Registration shall be on Form S-3 or another
appropriate form permitting registration of such Converted Common Stock for
resale by the Purchaser from time to time. The Purchaser agrees to furnish
promptly to the Company in writing all information required from time to time to
be disclosed in order to make the information previously furnished to the
Company by such holder not misleading.
4.2 EFFECTIVENESS. The Company shall use reasonable
commercial efforts to cause the Shelf Registration to become effective under the
Securities Act not later than one hundred twenty (120) days after the Closing
(the "EFFECTIVE DATE"). Subject to the requirements of the Securities Act
including, without limitation, requirements relating to updating through
post-effective amendments, prospectus supplements or otherwise, the Company
shall use its reasonable commercial efforts to keep the Shelf Registration
continuously effective and in compliance with the Securities Act until the
earlier of (i) the date twelve (12) months following the Effective Date, or (ii)
such date as all of the Converted Common Stock have been resold; provided,
however, that in the event of a Suspension Period, as set forth in Section 4.3
hereof, the Company shall extend the period of effectiveness of such Shelf
Registration by the number of days of each such Suspension Period. The Company
shall use reasonable commercial efforts to take such actions under the laws of
various states as may be required, from time to time during the effectiveness of
the Shelf Registration (and subject to Purchaser's compliance with its
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obligations hereunder), to cause the resale of the Converted Common Stock
pursuant to the Shelf Registration to be lawful.
4.3 SUSPENSION PERIODS. Following the effectiveness of the
Shelf Registration filed pursuant to this Section, the Company may, at any time,
suspend the effectiveness of such Shelf Registration for up to thirty (30) days,
as appropriate (a "SUSPENSION PERIOD"), by giving notice to the Purchaser, if
the Company shall have determined, through action by its Board of Directors,
that the Company may be required to disclose any material corporate development,
which disclosure, in the judgment of the Company's Board of Directors, could
reasonably be expected to have a material adverse effect on the Company; and at
least two (2) business days prior to implementing any such Suspension Period,
the Company shall deliver to the Purchaser a certificate to that effect.
Notwithstanding the foregoing, no more than two (2) Suspension Periods may occur
in any calendar year. The period of any such suspension of the registration
statement shall be added to the period of time the Company agrees to keep the
Shelf Registration effective as provided in Section 4.2. The Company shall use
its reasonable commercial efforts to limit the duration and number of any
Suspension Periods, including, without limitation, preparing and filing with the
SEC post-effective amendments to the Shelf Registration and/or prospectus
supplements to the prospectus included in the Shelf Registration. The Purchaser
agrees that, upon receipt of notice from the Company of a Suspension Period in
accordance with the provisions of this Section 4.3, the Purchaser shall
forthwith discontinue disposition of shares covered by such registration
statement or prospectus in accordance with the provisions of this Section 4.3
until the Purchaser (i) is advised in writing by the Company that the applicable
Suspension Period has been terminated and the use of the prospectus may be
resumed, (ii) has received copies of a supplemental or amended prospectus, if
applicable, and (iii) has received copies of any additional or supplemental
filings which are incorporated or deemed to be incorporated by reference in such
prospectus. The Purchaser shall treat any information relating to a Suspension
Period, including its receipt of notice of a Suspension Period, as confidential
information of the Company, and shall not use or disclose any such information
except with the prior written consent of the Company.
4.4 REGISTRATION EXPENSES. The Company shall pay all
Registration Expenses (as defined below) in connection with any registration,
qualification or compliance hereunder, and the Purchaser shall pay all Selling
Expenses (as defined below) and other expenses that are not Registration
Expenses relating to the Converted Common Stock resold by such Purchaser.
"Registration Expenses" shall mean all expenses, except for Selling Expenses,
incurred by the Company in complying with the registration provisions herein
described, including, without limitation, all registration, qualification and
filing fees, printing expenses, escrow fees, fees and expenses in connection
with listing the Converted Common Stock for quotation on Nasdaq NMS, fees and
disbursements of counsel for and the independent auditors of the Company, blue
sky fees and expenses, the expense of any special audits incident to or required
by any such registration and the reasonable fees and expenses of one special
counsel to the Purchaser. "Selling Expenses" shall mean selling commissions,
underwriting fees and stock transfer taxes applicable to the Converted Common
Stock.
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4.5 NOTIFICATION. In addition to the Company's other
obligations under this Section 4, in connection with the registration of the
Converted Common Stock on the Shelf Registration, the Company shall:
(a) As promptly as practicable after becoming aware
of such event, notify the Purchaser of the occurrence of any event, as a result
of which the prospectus included in the Shelf Registration, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, and
promptly prepare an amendment to the Shelf Registration and supplement to the
prospectus to correct such untrue statement or omission, and deliver a number of
copies of such supplement and amendment to the Purchaser as the Purchaser may
reasonably request; and
(b) As promptly as practicable after becoming aware
of such event, notify the Purchaser who holds Converted Common Stock being sold
of the issuance by the SEC of any stop order or other suspension of the
effectiveness of the Shelf Registration at the earliest possible time and take
all lawful action to effect the withdrawal, recession or removal of such stop
order or other suspension; and
(c) With a view to making available to the Purchaser
the benefits of Rule 144 under the Securities Act ("RULE 144") and any other
rule or regulation of the SEC that may at any time permit the Purchaser to sell
Converted Common Stock to the public without registration or pursuant to
registration, the Company covenants and agrees to use its reasonable commercial
efforts to: (i) make and keep public information available, as those terms are
understood and defined in Rule 144, until the earlier of (A) the date that is
thirty (30) months from the date of the Closing or (B) such date as all of the
Converted Common Stock shall have been resold; and (ii) file with the SEC in a
timely manner all reports and other documents required of the Company under the
Exchange Act.
4.6 INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold
harmless the Purchaser from and against any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) to which the
Purchaser (including for such purpose its officers, directors, partners,
attorneys and agents) may become subject (under the Securities Act or otherwise)
to the extent such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon, any untrue
statement of a material fact contained in the Shelf Registration or the
prospectus (including any supplement) contained therein or arise out of, or are
based upon, the omission to state therein a material fact required to be stated
therein or necessary to make the statements therein (in light of the
circumstances under which they were made in the case of the prospectus), not
misleading, or to the extent arising out of any failure by the Company to
fulfill any undertaking included in the Shelf Registration, and the Company
will, on a quarterly basis, reimburse the Purchaser for any legal or other
expenses reasonably incurred in investigating or defending any such action,
proceeding or claim; provided, however, that the Company shall not be liable in
any such case to the extent that such loss, claim, damage or
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liability arises out of, or is based upon (i) an untrue statement made in such
Shelf Registration in reliance upon and in conformity with information furnished
to the Company by or on behalf of the Purchaser, (ii) the failure of the
Purchaser to comply with the covenants and agreements contained in this
Agreement, or (iii) any untrue statement in any prospectus that is corrected in
any subsequent prospectus that was delivered to the Purchaser prior to the
pertinent sale or sales by the Purchaser.
(b) Each Purchaser, severally and not jointly,
agrees to indemnify and hold harmless the Company (including for such purpose
its officers, directors, partners, attorneys and agents) from and against any
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) to which the Company may become subject (under the Securities Act or
otherwise) to the extent such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) arise out of, or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the Shelf
Registration or the prospectus (including any supplement) contained therein or
to the extent arising out of, or are based upon, the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (in light of the circumstances under
which they were made in the case of the prospectus), not misleading, in each
case, to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by or
on behalf of the Purchaser specifically for use in preparation of the Shelf
Registration.
(c) Promptly after receipt by any indemnified
person of a notice of a claim or the beginning of any action in respect of which
indemnity is to be sought against an indemnifying person pursuant to this
Section 4.6, such indemnified person shall notify the indemnifying person in
writing of such claim or of the commencement of such action (but the omission to
so notify the indemnifying party shall not relieve it from any liability that it
otherwise may have to the indemnified party, except to the extent that the
indemnifying party is materially prejudiced and forfeits substantive rights and
defenses by reason of such failure), and, subject to the provisions hereinafter
stated, in case any such action shall be brought against an indemnified person
and the indemnifying person shall have been notified thereof, the indemnifying
person shall be entitled to participate therein, and, in the case of any claim
as to which both the indemnified party and the indemnifying party are parties,
to the extent that it shall wish, the indemnifying party may assume the defense
thereof, with counsel reasonably satisfactory to the indemnified person. After
notice from the indemnifying person to such indemnified person of the
indemnifying person's election to assume the defense thereof, the indemnifying
person shall not be liable to such indemnified person for any legal expenses
subsequently incurred by such indemnified person in connection with the defense
thereof; provided, however, that if there exists or shall exist a conflict of
interest that would make it inappropriate in the reasonable judgment of the
indemnified person for the same counsel to represent both the indemnified person
and such indemnifying person or any affiliate or associate thereof, the
indemnified person shall be entitled to retain its own counsel at the expense of
such indemnifying person. If the indemnifying party shall assume the defense of
any such claim, it shall not, without prior written consent of the indemnified
party (which consent shall not unreasonably be withheld), settle or compromise
any such claim or consent to the entry of any
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judgment that does not include an unconditional release of the indemnified party
from all liabilities with respect to such claim or judgment. Further, no
indemnifying party shall have any obligation with respect to any settlement
entered into by an indemnified party without the prior written approval of this
indemnifying party.
(d) If the indemnification provided for in this
Section 4.6 is unavailable to or insufficient to hold harmless an indemnified
party under subsection (a) or (b) above in respect of any losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) referred
to therein, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative fault of the Company on the one hand and the Purchaser
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions in respect thereof), as
well as any other relevant equitable considerations. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or the Purchaser on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Purchaser agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, or liabilities (or actions in respect thereof) referred to
above in this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
4.7 NASDAQ NMS LISTING. The Company shall use its reasonable
commercial efforts to cause the Converted Common Stock to be listed for
inclusion on the Nasdaq National Market System no later than on the Effective
Date.
5. FINDER'S FEE. At the Closing, the Company shall pay to the
Purchaser a finders' fee in the amount of $800,000 in consideration of the
Purchaser's arrangement of the financing.
6. CONDITIONS OF THE PURCHASER'S OBLIGATIONS AT THE CLOSING. The
obligations of the Purchaser to the Company under this Agreement are subject to
the fulfillment, on or before the Closing, of each of the following conditions,
unless otherwise waived:
6.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company contained in Section 2 shall be true and correct in
all material respects on and as of the Closing with the same effect as though
such representations and warranties had been made on and as of the date of the
Closing.
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6.2 PERFORMANCE. The Company shall have performed and
complied with all covenants, agreements, obligations and conditions contained in
this Agreement that are required to be performed or complied with by it on or
before the Closing.
6.3 COMPLIANCE CERTIFICATE. The President of the Company
shall deliver to the Purchaser at the Closing a certificate certifying that the
conditions specified in Sections 6.1 and 6.2 have been fulfilled.
6.4 QUALIFICATIONS. All authorizations, approvals or permits,
if any, of any governmental authority or regulatory body of the United States or
of any state that are required in connection with the lawful issuance and sale
of the Stock pursuant to this Agreement shall be obtained and effective as of
the Closing.
6.5 OPINION OF COMPANY COUNSEL. The Purchaser shall have
received from Orrick, Herrington & Sutcliffe LLP, counsel for the Company, an
opinion, dated as of the Closing, in substantially the form of EXHIBIT D.
6.6 CERTIFICATE OF DETERMINATION. The Company shall have
filed the Certificate of Determination with the Secretary of State of California
on or prior to the date of the Closing, and the Certificate of Determination
shall continue to be in full force and effect as of the date of the Closing.
6.7 STANDSTILL AGREEMENT. The Company and the Purchaser shall
have executed and delivered a Standstill Agreement between the Company and the
Purchaser in the form attached hereto as EXHIBIT C.
6.8 GOVERNMENTAL CONSENTS. There shall have been obtained at
or prior to the date of the Closing such permits or authorizations, and there
shall been taken such other action, as may be required by any regulatory
authority having jurisdiction over the parties and the subject matter and the
actions herein proposed to be taken.
6.9 LEGAL INVESTMENT. At the time of the Closing the purchase
and sale of the Stock shall be legally permitted by all laws and regulations to
which the Purchaser and the Company are subject.
7. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT THE CLOSING. The
obligations of the Company to the Purchaser under this Agreement are subject to
the fulfillment, on or before the Closing, of each of the following conditions,
unless otherwise waived:
7.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Purchaser contained in Section 3 shall be true and correct in all
material respects on and as of the Closing with the same effect as though such
representations and warranties had been made on and as of the Closing.
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7.2 PERFORMANCE. All covenants, agreements and conditions
contained in this Agreement to be performed by the Purchaser on or prior to the
Closing shall have been performed or complied with in all material respects.
7.3 QUALIFICATIONS. All authorizations, approvals or permits,
if any, of any governmental authority or regulatory body of the United States or
of any state that are required in connection with the lawful issuance and sale
of the Stock pursuant to this Agreement shall be obtained and effective as of
the Closing.
7.4 STANDSTILL AGREEMENT. The Company and the Purchaser shall
have executed and delivered a Standstill Agreement between the Company and the
Purchaser.
7.5 GOVERNMENTAL CONSENTS. There shall have been obtained at
or prior to the date of the Closing such permits or authorizations, and there
shall been taken such other action, as may be required by any regulatory
authority having jurisdiction over the parties and the subject matter and the
actions herein proposed to be taken.
7.6 LEGAL INVESTMENT. At the time of the Closing the purchase
and sale of the Stock shall be legally permitted by all laws and regulations to
which the Purchaser and the Company are subject.
8. MISCELLANEOUS.
8.1 SURVIVAL OF WARRANTIES. Unless otherwise set forth in
this Agreement, the warranties, representations and covenants of the Company and
the Purchaser contained in or made pursuant to this Agreement shall survive the
execution and delivery of this Agreement and the Closing for a period of one (1)
year following the Closing.
8.2 TRANSFER; SUCCESSORS AND ASSIGNS. The terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective 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.
8.3 GOVERNING LAW. This Agreement and all acts and
transactions pursuant hereto and the rights and obligations of the parties
hereto shall be governed, construed and interpreted in accordance with the laws
of the State of California, without giving effect to principles of conflicts of
law.
8.4 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
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8.5 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.
8.6 NOTICES. Any notice required or permitted by this
Agreement shall be in writing and shall be deemed sufficient upon delivery, when
delivered personally or by overnight courier or sent by telegram or fax, or
forty-eight (48) hours after being deposited in the U.S. mail, as certified or
registered mail, with postage prepaid, addressed to the party to be notified at
such party's address as set forth below or on EXHIBIT A hereto, or as
subsequently modified by written notice, and (a) if to the Company, with a copy
to
Orrick, Herrington & Sutcliffe LLP
1020 Marsh Road
Menlo Park, CA 94025
Fax: 650-614-7464
Attn: Geoffrey P. Leonard
or (b) if to the Purchaser, with a copy to
Alan C. Mendelson, Esq.
Cooley Godward LLP
5 Palo Alto Square
3000 El Camino Real
Palo Alto, CA 94306-2155
8.7 FINDER'S FEE. Except for the finder's fee set forth in
Section 5, each party represents that it neither is, nor will be, obligated for
any other finder's fee or commission in connection with this transaction. The
Purchaser agrees to indemnify and to hold harmless the Company from any
liability for any commission or compensation in the nature of a finder's fee
(and the costs and expenses of defending against such liability or asserted
liability) for which the Purchaser or any of its officers, employees, or
representatives is responsible. The Company agrees to indemnify and hold
harmless the Purchaser from any liability for any commission or compensation in
the nature of a finder's fee (and the costs and expenses of defending against
such liability or asserted liability) for which the Company or any of its
officers, employees or representatives is responsible other than that described
in this Section 8.7.
8.8 FEES AND EXPENSES. Each party shall pay its own fees and
expenses, irrespective of whether the Closing occurs; provided, however, in the
event that the Closing occurs, the Company will pay, concurrent with the
Closing, the reasonable fees and expenses of Cooley Godward LLP, special counsel
to the Purchaser in an amount not to exceed $7,500.
8.9 ATTORNEY'S FEES. If any action at law or in equity
(including arbitration) is necessary to enforce or interpret the terms of any of
the Agreements, the prevailing party shall be entitled to reasonable attorney's
fees, costs and necessary disbursements in addition to any other relief to which
such party may be entitled.
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8.10 AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended with the written consent of the Company and the holders of at least a
majority of the Converted Common Stock. Any amendment or waiver effected in
accordance with this Section 9.10 shall be binding upon the Purchaser and each
transferee of the Stock (or the Common Stock issuable upon conversion thereof),
each future holder of all such securities, and the Company.
8.11 SEVERABILITY. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, the parties agree to
renegotiate such provision in good faith. In the event that the parties cannot
reach a mutually agreeable and enforceable replacement for such provision, then
(a) such provision shall be excluded from this Agreement, (b) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (c) the
balance of the Agreement shall be enforceable in accordance with its terms.
8.12 DELAYS OR OMISSIONS. No delay or omission to exercise any
right, power or remedy accruing to any holder of any of the Stock, upon any
breach or default of the Company under this Agreement, shall impair any such
right, power or remedy of such holder nor shall it be construed to be a waiver
of any such breach or default, or an acquiescence therein, or of or in any
similar breach or default thereafter occurring; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. Any waiver, permit, consent or approval of
any kind or character on the part of any holder of any breach or default under
this Agreement, or any waiver on the part of any holder of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies, either under
this Agreement or by law or otherwise afforded to any holder, shall be
cumulative and not alternative.
8.13 ENTIRE AGREEMENT. This Agreement, and the documents
referred to herein constitute the entire agreement between the parties hereto
pertaining to the subject matter hereof, and any and all other written or oral
agreements existing between the parties hereto are expressly canceled.
8.14 CORPORATE SECURITIES LAW. THE SALE OF THE SECURITIES
WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE
COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF THE
SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR
PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT
FROM THE QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA
CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY
CONDITIONED UPON THE QUALIFICATION BEING OBTAINED UNLESS THE SALE IS SO EXEMPT.
[Signature Pages Follow]
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The parties have executed this Series A Preferred Stock Purchase
Agreement as of the date first written above.
COMPANY:
LANDEC CORPORATION
By: /s/ Gary T. Steele
------------------------------------
Gary T. Steele, President and CEO
Address: Landec Corporation
3603 Haven Avenue
Menlo Park, CA 94025
Tel: (650) 306-1650
Fax: (650) 261-3616
PURCHASER:
/s/ Frederick Frank
-----------------------------------------
Frederick Frank
Address: 109 East 91st Street
New York, NY 10128
Tel: (212) 526-3262
Fax: (212) 526-3738