FORM OF STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement") made and entered
as of this 3rd day of March, 2000, by and among DELICIOUS BRANDS, INC., a
Delaware corporation (the "Company") and the purchasers set forth on Schedule A
attached hereto (each a "Purchaser" and, collectively, the "Purchasers").
WITNESSETH:
WHEREAS, the Company desires to issue and sell, and the
Purchasers desire to purchase, all upon the terms and subject to the conditions
set forth in this Agreement, shares of the Series D Convertible Preferred Stock
of the Company, par value $.01 per share (the "Series D Preferred Stock").
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements of the parties herein contained, the parties
hereby agree as follows:
1. Purchase and Sale of Stock.
1.1 Sale and Issuance of Series D Preferred Stock.
(a) A Certificate of Designation (the "Certificate"),
setting forth the designation, preferences and other rights and qualifications
of the Series D Preferred Stock (the "Series D Preferred Stock") in the form
attached hereto as Exhibit A has been filed with the Secretary of State of the
State of Delaware and the Company has authorized the issuance and sale of up to
100,000 shares of the Series D Preferred Stock (the "Shares").
(b) Subject to the terms and conditions of this
Agreement, each Purchaser severally agrees to purchase at the Closing (as
defined below), and the Company agrees to sell and issue to each Purchaser at
the Closing, the number of shares of the Series D Preferred Stock set forth
opposite such Purchaser's name on the Schedule of Purchasers attached hereto as
Schedule A, at a purchase price of $20.00 per share.
1.2 Closing.
(a) The First Closing. The closing of the purchase
and the sale of the Shares of Series D Preferred Stock hereunder (the "Closing")
shall be held at the offices of Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx & Wolosky LLP,
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 10 a.m., local time, on the date
hereof, or at such other time and place upon which the Company and the
Purchasers participating in such Closing shall agree (the "First Closing Date").
(b) Subsequent Closings. One or more additional
closings of the purchase and sale of the Shares of Series D Preferred Stock may
occur solely at the discretion of the Company. Any such additional closing may
be evidenced by the execution of an additional signature page to this Agreement
by the Company and an additional Purchaser, and the inclusion of such additional
Purchaser's name (along with the number of Shares such additional Purchaser is
purchasing, together with the aggregate purchase price to be paid for such
Shares) on the Schedule of Purchasers, without any requirement on the part of
the Company to seek the consent or approval of the Purchasers.
(c) General. For purposes of this Agreement, unless
the context otherwise requires, the specific closing at which the sale and
purchase of Shares occurs shall be referred to herein as the "Closing" for such
sale and purchase. The applicable date of each such sale and purchase of Shares
is referred to herein for purposes of such sale and purchase as the "Closing
Date."
(d) Delivery. At the Closing, the Company shall
deliver to each Purchaser a certificate or certificates, registered in such
Purchaser's name as set forth on the Schedule of Purchasers, representing the
number of Shares designated on the Schedule of Purchasers to be purchased by
such Purchaser, against payment of the purchase price therefor. The purchase
price for the Shares may be paid by (i) check payable to the Company, (ii) wire
transfer pursuant to the Company's instructions or (iii) any combination of the
foregoing.
2. Representations, Warranties and Covenants of the Company.
The Company represents warrants and covenants to the Purchasers as follows:
2.1 Corporate Organization. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware, and has all requisite corporate power and authority to own,
operate and lease its properties and to carry on its business as and in the
places where such properties are now owned, operated and leased or such business
is now being conducted.
2.2 Authorization. The Company has the necessary corporate
power and authority to enter into this Agreement and to assume and perform its
obligations hereunder. The execution and delivery of this Agreement and the
performance by the Company of its obligations hereunder have been duly
authorized by the Board of Directors of the Company. This Agreement has been
duly executed and delivered by the Company and constitutes a legal, valid and
binding obligation of the Company enforceable against it in accordance with its
terms, subject to (i) applicable bankruptcy, insolvency, reorganization and
moratorium laws, (ii) other laws of general application affecting the
enforcement of creditors' rights generally and general principles of equity,
(iii) the discretion of the court before which any proceeding therefor may be
brought, and (iv) as rights to indemnity may be limited by federal or state
securities laws or by public policy.
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2.3 Approvals and Consents. No action, approval, consent
or authorization, including, but not limited to, any action, approval, consent
or authorization by any governmental or quasi-governmental agency, commission,
board, bureau, or instrumentality is necessary or required as to the Company in
order to constitute this Agreement as a valid, binding and enforceable
obligation of the Company in accordance with its terms, except for the consent
of U.S. Bancorp Republic Commercial Finance, Inc., which the Company has
obtained.
2.4 Commissions; Use of Proceeds. Icahn Associates Corp.
will earn a 3% fee on the gross proceeds of this transaction and Network 1
Financial Securities, Inc. ("Network 1") will earn a 10% fee on the gross
proceeds of all sales of Shares by the Company to Network 1's clients for which
Network 1 acts as placement agent on this transaction. The commissions shall be
paid in cash, except such commission may be deferred at the recipients' sole
discretion. The net proceeds received by the Company from this transaction will
be used for general corporate purposes, including capital expenditures, product
development, marketing and sales and working capital and to establish a working
capital reserve in connection with a potential sale of substantially all of the
assets of the Company at the request of a potential purchaser against
unanticipated expenses which may arise prior to the potential closing. The
proceeds allocated to general corporate purposes may be utilized in the
discretion of the Board of Directors of the Company.
3. Representations and Warranties of the Purchasers. Each of
the Purchasers represents and warrants to the Company as to itself as follows:
3.1 Organization and Existence. To the extent indicated on
the signature pages hereto, such Purchaser is either (i) a limited partnership
duly organized and validly existing under the laws of its respective state of
formation, (ii) a limited liability company duly organized and validly existing
under the laws of its respective state of formation, (iii) a corporation duly
organized and validly existing under the laws of its respective state of
incorporation or (iv) an individual. Each Purchaser represents that it was not
organized for the purpose of making an investment in the Company.
3.2 Authorization. The execution, delivery and performance
of this Agreement by such Purchaser and the consummation by such Purchaser of
the transactions contemplated hereby and thereby are within the powers of such
Purchaser and have been duly authorized by all necessary individual, corporate,
partnership or limited liability company action, as appropriate, on the part of
such Purchaser. This Agreement has been duly executed and delivered by such
Purchaser and constitutes a legal, valid and binding obligation of the Purchaser
enforceable against such Purchaser in accordance with its terms, subject to (i)
applicable bankruptcy, insolvency, reorganization and moratorium laws, (ii)
other laws of general application affecting the enforcement of creditors' rights
generally and general principles of equity, (iii) the discretion of the court
before which any proceeding therefor may be brought, and (iv) as rights to
indemnity may be limited by federal or state securities laws or by public
policy.
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3.3 Approvals and Consents. No action, approval, consent
or authorization, including, but not limited to, any action, approval, consent
or authorization by any governmental or quasi-governmental agency, commission,
board, bureau, or instrumentality is necessary or required as to such Purchaser
in order to constitute this Agreement as a valid, binding and enforceable
obligation of such Purchaser in accordance with its terms.
3.4 Investment. Such Purchaser is acquiring the Shares
being purchased by it for its own account as principal, not as a nominee or
agent, for investment purposes only, and not with a view to, or for, resale,
distribution or fractionalization thereof in whole or in part and no other
person or entity has a direct or indirect beneficial interest in such Shares.
Such Purchaser does not have any contract, undertaking, agreement or arrangement
with any person or entity to sell, transfer or grant participations to such
person or entity or to any third person or entity with respect to any of such
Shares.
3.5 Exemption From Registration. Such Purchaser
acknowledges that the offering and sale of the Shares (the "Offering") is
intended to be exempt from registration under the Securities Act of 1933, as
amended (the "Securities Act"), by virtue of Section 4(2) of the Securities Act
and the provisions of Regulation D promulgated thereunder ("Regulation D"). In
furtherance thereof, such Purchaser represents and warrants to the Company as
follows:
(i) Such Purchaser realizes that the basis for the
exemption may not be present if, notwithstanding any
representations and/or warranties to the contrary herein
contained, such Purchaser has in mind merely acquiring the
Shares for a fixed or determinable period in the future;
(ii) Such Purchaser has the financial ability to bear the
economic risk of his investment, has adequate means for
providing for its current needs and contingencies and has
no need for liquidity with respect to its investment in
the Company; and
(iii) Such Purchaser has such knowledge and experience in
financial, and business matters as to be capable of
evaluating the merits and risks of an investment in the
Shares.
3.6 Accredited Investor. Such Purchaser is an "accredited
investor," as that term is defined in Rule 501 of Regulation D.
3.7 Available Information. Such Purchaser:
(i) Has been furnished with any and all documents that may
have been made available by the Company upon request of
the Purchaser for a reasonable time prior to the date
hereof including, but not limited to, those documents set
forth on Annex A hereto;
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(ii) Has been provided an opportunity for a reasonable
time prior to the date hereof to obtain additional
information concerning the Offering, the Company and all
other information to the extent the Company possesses such
information or can acquire it without unreasonable effort
or expense;
(iii) Has been given the opportunity for a reasonable time
prior to the date hereof to ask questions of, and receive
answers from, the Company or its representatives
concerning the terms and conditions of the Offering and
other matters pertaining to an investment in the Shares,
or that which was otherwise provided in order for them to
evaluate the merits and risks of a purchase of the Shares
to the extent the Company possesses such information or
can acquire it without unreasonable effort or expense;
(iv) Has not been furnished with any oral representation
or oral information in connection with the Offering; and
(v) Has determined that the Shares are a suitable
investment for such Purchaser and that at this time such
Purchaser could bear a complete loss of such investment.
3.8 Purchaser Representative. Such Purchaser is not
relying on any statements or representations made by the Company or its
affiliates or any purchaser representative with respect to economic
considerations involved in an investment in the Shares.
3.9 Transfer Restrictions. Such Purchaser shall not sell
or otherwise transfer any of the Shares without registration under the
Securities Act or an exemption therefrom and such Purchaser fully understands
and agrees that such Purchaser must bear the economic risk of such Purchaser's
purchase because, among other reasons, the Shares have not been registered under
the Securities Act or under the securities laws of any state and, therefore,
cannot be resold, pledged, assigned or otherwise disposed of unless they are
subsequently registered under the Securities Act and under the applicable
securities laws of such states, or unless exemptions from such registration
requirements are available. In particular, such Purchaser is aware that the
Shares are "restricted securities," as such term is defined in Rule 144
promulgated under the Securities Act. Such Purchaser also understands that the
Company is under no obligation to register the Shares on such Purchaser's behalf
or to assist such Purchaser in complying with any exemption from the
registration requirements of the Securities Act or applicable state securities
laws. Such Purchaser further understands that sales or transfers of the Shares
are further restricted by state securities laws and the provisions of this
Agreement.
3.10 Entire Agreement. No representations or warranties
have been made to such Purchaser by the Company, or any officer, director,
employee, agent, affiliate or subsidiary
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of the Company other than those contained herein, and in subscribing for Shares
such Purchaser is not relying upon any representations other than those
contained herein.
3.11 Purchaser Information. Any information that such
Purchaser has heretofore furnished or is simultaneously herewith furnishing to
the Company with respect to such Purchaser's financial position and business
experience is correct and complete as of the date of this Agreement and, if
there should be any material change in such information, such Purchaser will
immediately furnish revised or corrected information to the Company.
3.12 Legends. The Purchaser understands and acknowledges
that the Shares and the shares of the Company's Common Stock, par value $.01 per
share ("Common Stock"), issuable upon conversion of the Shares (the "Conversion
Shares") shall bear a legend substantially as follows until (i) such securities
shall have been registered under the Securities Act and effectively been
disposed of in accordance with an effective registration statement thereunder;
or (ii) in the opinion of counsel for the Company such securities may be sold
without registration under the Securities Act as well as any applicable "Blue
Sky" or state securities laws:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THEY MAY NOT BE OFFERED, SOLD, PLEDGED,
HYPOTHECATED, ASSIGNED OR TRANSFERRED EXCEPT (i)
PURSUANT TO A REGISTRATION STATEMENT UNDER THE
SECURITIES ACT WHICH HAS BECOME EFFECTIVE AND IS
CURRENT WITH RESPECT TO THESE SECURITIES, OR (ii)
PURSUANT TO A SPECIFIC EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT BUT ONLY UPON A HOLDER
HEREOF FIRST HAVING OBTAINED THE WRITTEN OPINION OF
COUNSEL TO DELICIOUS BRANDS, INC. (THE
"CORPORATION"), OR OTHER COUNSEL REASONABLY
ACCEPTABLE TO THE CORPORATION, THAT THE PROPOSED
DISPOSITION IS CONSISTENT WITH ALL APPLICABLE
PROVISIONS OF THE SECURITIES ACT AS WELL AS ANY
APPLICABLE "BLUE SKY" OR OTHER STATE SECURITIES
LAW."
3.13 Purchaser Address. The address set forth on the
signature pages of this Agreement is such Purchaser's true and correct business,
residence or domicile address.
3.14 Non-Marketable Investments. Such Purchaser's overall
commitment to investments that are not readily marketable is not
disproportionate to such Purchaser's net worth, and an investment in the Shares
will not cause such overall commitment to become excessive.
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3.15 Finders. Such Purchaser represents and warrants that
such Purchaser has not retained any finder, broker, agent, financial advisor or
other intermediary in connection with the transactions contemplated by this
Agreement and agrees to indemnify and hold harmless the Company, its officers,
directors, affiliates, subsidiaries, employees and agents from liability for any
compensation to any such intermediary retained by such Purchaser and the fees
and expenses of defending against such liability or alleged liability.
3.16 Survival. The foregoing representations, warranties
and agreements shall survive the execution of this Agreement.
4. Piggyback Registration.
4.1 Registration Rights. If, at any time commencing after
the date hereof, the Company proposes to register any of its securities under
the Securities Act (other than pursuant to Form X-0, X-0 or a comparable
registration statement) it will give written notice by registered mail, at least
thirty (30) days prior to the filing of each such registration statement, to the
Purchasers of its intention to do so. If any of the Purchasers notifies the
Company within twenty (20) days after receipt of any such notice of its desire
to include any of the Conversion Shares in such proposed registration statement,
the Company shall afford such Purchaser the opportunity to have any such
Conversion Shares (referred to in this Section 4 as the "Securities") registered
under such registration statement.
Notwithstanding the provisions of this Section 4.1, the
Company shall have the right at any time after it shall have given written
notice pursuant to this Section 4.1 (irrespective of whether a written request
for inclusion of any such Securities shall have been made) to elect not to file
any such proposed registration statement, or to withdraw the same after the
filing but prior to the effective date thereof.
4.2 Provisions With Respect to Registration. In connection
with any registration under Section 4.1 hereof, the following provisions shall
apply:
(a) The Company (i) shall use its best efforts to file
a registration statement within sixty (60) days of receipt of any request by a
Purchaser to have its Securities included therein, (ii) shall use its best
efforts to have such registration statement declared effective at the earliest
possible time, and (iii) shall furnish to each Purchaser whose Securities have
been included in such registration statement (each a "Participant" and,
collectively, the "Participants") such number of prospectuses as shall
reasonably be requested.
(b) The Company shall pay all costs (excluding any
underwriting or selling commissions or other charges of any broker-dealer acting
on behalf of a Participant), fees and expenses in connection with all
registration statements filed pursuant to this Section 4, including, without
limitation, the Company's legal and accounting fees, printing expenses and blue
sky fees and expenses.
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(c) The Company will take all necessary action which
may be required in qualifying or registering the Securities included in a
registration statement for offering and sale under the securities or blue sky
laws of such states as reasonably are requested by the Participants, provided
that the Company shall not be obligated to (i) execute or file any general
consent to service of process, (ii) qualify as a foreign corporation to do
business under the laws of any such jurisdiction or (iii) subject itself to
taxation in such jurisdiction.
(d) The Company shall indemnify each Participant and
each person, if any, who controls such Participant within the meaning of Section
15 of the Securities Act or Section 20(a) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), against all loss, claim, damage, expense
or liability (including all expenses reasonably incurred in investigating,
preparing or defending against any claim whatsoever) to which any of them may
become subject under the Securities Act, the Exchange Act or otherwise, arising
from such registration statement (excluding any loss, claim, damage, expense or
liability arising from information furnished in writing by or on behalf of such
Participant, or its successors or assigns, for specific inclusion in such
registration statement).
(e) Each Participant and its successors and assigns,
shall indemnify the Company, its officers and directors and each person, if any,
who controls the Company within the meaning of Section 15 of the Securities Act
or Section 20(a) of the Exchange Act, against all loss, claim, damage or expense
or liability (including all expenses reasonably incurred in investigating,
preparing or defending against any claim whatsoever) to which they may become
subject under the Securities Act, the Exchange Act or otherwise, arising solely
from the inclusion in such registration statement of information furnished in
writing by or on behalf of such Participant, or its successors or assigns,
specifically for use in such registration statement; provided that each
Participant's liability hereunder shall not exceed the net proceeds of the sale
of Securities by such Participant pursuant to such registration statement.
(f) Nothing contained in this Agreement shall be
construed as requiring a Purchaser to convert its Shares prior to the initial
filing of any registration statement or the effectiveness thereof.
(g) In the case of an underwritten offering pursuant
to Section 4.1, if the managing underwriter with respect to such offering
requests in writing that the number of the Company's securities to be offered by
selling security holders in the registration be reduced because, in the judgment
of the managing underwriter, the proposed offering would be materially and
adversely affected, then such securities shall be reduced by such amount as the
managing underwriter may determine in writing so as to not materially and
adversely affect the proposed offering, which reduced number of securities shall
be included in the offering, selected, first, from any persons or entities
participating in such offering pursuant to demand registration rights and, next,
to the extent available, among the other selling security holders participating
in such offering, as
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nearly as possible pro rata, on the basis of the number of the Company's
securities so requested by each holder thereof to be included therein.
(h) Each Participant, if, as and when its Securities
are covered by a registration statement filed pursuant to this Section 4, agrees
if and to the extent requested by the managing underwriter, in the case of an
underwritten sale of its Securities (to the extent timely notified in writing by
the Company or the managing underwriter), not to effect any public sale or
distribution of its Securities included in such registration statement,
including a sale pursuant to Rule 144 (or any similar rule then in force) under
the Act, except as part of such underwritten registration, during the 30-day
period prior to, and a period of up to 180 days (as determined by the managing
underwriter) beginning on, the effective date of any underwritten sale of its
Securities made pursuant to such registration statement.
5. Consent. Each Purchaser hereby consents to the increase of
the authorized shares for issuance of the Series D Preferred Stock, par value
$.01 from 100,000 shares to 150,000 shares, provided that, a majority of the
Board of Directors of the Company at such later date deems such increase
necessary in the Board of Directors' business judgment and the Board of
Directors approves such increase.
6. General Provisions.
6.1 Entire Agreement; Amendment and Waiver. This Agreement
constitutes the entire agreement between the parties hereto with respect to the
subject matter contained herein and supersedes all prior oral or written
agreements, if any, between the parties hereto with respect to such subject
matter and, except as otherwise expressly provided herein, is not intended to
confer upon any other person any rights or remedies hereunder. Any amendments
hereto or modifications hereof must be made in writing and executed by each of
the parties hereto. Any failure by the Company or the Purchasers to enforce any
rights hereunder shall not be deemed a waiver of such rights.
6.2 Notices. Unless otherwise provided, any notice required
or permitted under this Agreement shall be given in writing and shall be deemed
effectively given (i) upon personal delivery to the party to be notified, (ii)
four (4) days after deposit with the United States Post Office, by registered or
certified mail, postage prepaid, or (iii) one day after deposit with a reputable
overnight courier service and addressed to the party to be notified at the
address indicated for such party on the signature page hereof, or at such other
address as such party may designate by ten (10) days' advance written notice to
the other parties, with a copy (which shall not constitute notice) for the
Company to Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP, 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000-0000, Attention: Xxxxx Xxxxxxx, Esq.
6.3 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York without giving
effect to conflict of laws principles.
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6.4 Binding Effect; Assignment. This Agreement and the
various rights and obligations arising hereunder shall inure to the benefit of
and be binding upon the Company and the Purchasers and each of their respective
successors and assigns. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be transferred or assigned (by operation of law
or otherwise) by any of the parties hereto without the prior written consent of
the other parties hereto. Any transfer or assignment of any of the rights,
interests or obligations hereunder in violation of the terms hereof shall be
void and of no force or effect.
6.5 Expenses. All costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such costs and expenses.
6.6 Headings. The headings or captions contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
6.7 Pronouns. Whenever the pronouns "it" or "its" are used
herein, they shall also be deemed to mean "he" or "his" or "she" or "hers"
whenever applicable. Words in the singular shall be read and construed as though
in the plural and words in the plural shall be read and construed as though in
the singular in all cases where they would so apply.
6.8 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by virtue of any
rule of law, or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner adverse to any party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the maximum extent possible.
6.9 Information Confidential. Each Purchaser acknowledges
that the information received by it pursuant hereto may be confidential and is
for such Purchaser's use only. Such Purchaser agrees that it will not use such
information in violation of the Exchange Act, or reproduce, disclose or
disseminate such information to any other person , unless the Company has made
such information available to the public generally.
6.10 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument.
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[SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT]
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
COMPANY:
DELICIOUS BRANDS, INC.
By:
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Name:
Title:
Address:
PURCHASERS:
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Name:
Address:
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Name:
Address:
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