SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of May
21, 2003, by and between Galaxy Nutritional Foods, Inc., a Delaware
corporation, with its principal place of business at 0000 Xxxxxxxx Xxx,
Xxxxxxx, XX 00000 (the "Company"), and Fromageries Bel S.A., a corporation
organized under the laws of France, whose address is 00, Xx Xxxxxxxxxxx
00000, Xxxxx, Xxxxxx (the "Buyer").
PRELIMINARY STATEMENTS
A. The Company has authorized the sale to Buyer of a certain number
of shares of the Company's common stock, par value $0.01 per share (the
"Common Stock") on the terms and subject to the conditions set forth in
this Agreement;
B. The Company and Buyer are executing and delivering this Agreement
in reliance upon the exemption from securities registration afforded by
Rule 506 under Regulation D ("Regulation D") as promulgated by the United
States Securities and Exchange Commission (the "SEC") under the Securities
Act of 1933, as amended (the "1933 Act");
C. Buyer wishes to purchase, in the amounts and upon the terms and
conditions stated in this Agreement, shares of Common Stock at a purchase
price of $2 million;
D. The parties hereto intend that, as a condition to the closing of
the transactions contemplated hereby, the parties hereto will execute and
deliver a Registration Rights Agreement in substantially the form attached
hereto as Exhibit A (the "Registration Rights Agreement") pursuant to which
the Company agrees to provide certain registration rights under the 1933
Act and the rules and regulations promulgated thereunder, and applicable
state securities laws; and
E. The Company intends to enter into other agreements substantially
in the form of this Agreement and Registration Rights Agreement with
certain other buyers (the "Other Buyers") and expect to complete the sale
of shares of Common Stock on or before September 30, 2003 for an aggregate
purchase price of no more than $10 million to the Other Buyers; however,
the Buyer's obligations hereunder are not expressly conditioned on the
purchase by any or all of the Other Buyers of the Common Stock that they
may agree to purchase from the Company.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and
the Buyer hereby agree as follows:
1. PREAMBLES; PURCHASE AND SALE OF COMMON STOCK; CLOSING
a. Preliminary Statements. The above preliminary statements,
recitals, definitions, preamble and provisions are true and correct and are
incorporated herein as fully as if set forth herein.
b. Purchase of Common Stock. Subject to the terms and
conditions set forth in this Agreement, the Company agrees to issue and
sell to Buyer, and Buyer agrees to purchase from the Company such number of
shares of Common Stock (the "Securities") as shall be determined by
dividing the aggregate purchase price of $2 million (the "Purchase Price")
by the per share purchase price (with any fractional shares being rounded
up to the next whole share). The per share purchase price shall be equal
to the lesser of (x) ninety-five percent (95%) of the average closing price
of the Common Stock on the Principal Market (as defined below) for the
Trading Days (as defined below) occurring during the thirty (30)
consecutive calendar days ending on the calendar day immediately prior to
the date of Closing (as defined below), or (y) $1.80. The term "Principal
Market" shall mean the American Stock Exchange, the New York Stock
Exchange, the NASDAQ National Market, or the NASDAQ SmallCap Market,
whichever is at the time the principal trading exchange or market for the
Common Stock, based upon share volume, or if the Common Stock is not traded
on an exchange or market, the OTC Bulletin Board or its successor (as of
the date hereof the Principal Market is the American Stock Exchange). The
term "Trading Day" shall mean any day during which the Common Stock is
traded on the Principal Market. The consummation of the transaction and
the payment of the Purchase Price shall occur at Closing (as defined
below).
c. Escrow. At least one (1) business day prior to Closing
(the date of which the Company shall notify Buyer in writing), Buyer shall
deliver to Gibralter Bank, F.S.B., as escrow agent ("Escrow Agent"), an
amount equal to the Purchase Price (the "Escrow Amount") by wire transfer
of immediately available United States Dollars in accordance with the
instructions set forth in the Escrow Agreement dated as of the date hereof
by and among the Company, Buyer and Escrow Agent (the "Escrow Agreement").
Escrow Agent shall hold and disburse the Escrow Amount in accordance with
the terms and conditions of the Escrow Agreement. If the Company fails to
effect the FINOVA Repayment within three (3) business days of the Buyer
depositing the Escrow Amount with Escrow Agent, then, at the request of the
Buyer at any time until the Escrow Agent initiates the disbursement of
funds under the Escrow Agreement to effect the FINOVA Repayment, the
Company shall execute with the Buyer and deliver to the Escrow Agent joint
written instructions instructing the Escrow Agent to distribute all of the
Escrow Amount to whatever account is designated by Buyer.
d. The Closing. The closing ("Closing") of the sale and
purchase of the Securities under this Agreement is contingent upon the
Company's repayment in full of the existing debt owed to (x) FINOVA Capital
Corporation pursuant to that certain Security Agreement dated as of
November 1, 1996, as amended, and (y) FINOVA Mezzanine Capital Inc.
pursuant to that certain Loan Agreement dated as of September 30, 1999, as
amended (the "FINOVA Repayment"). The parties acknowledge that the FINOVA
Repayment is being funded, in part, with the Purchase Price, with the
balance of the FINOVA Repayment provided substantially from an asset based
loan from Textron Financial Corporation (the "Textron Loan"), and a term
loan from SouthTrust Bank (the "SouthTrust Loan"). The terms of the
Textron Loan and the SouthTrust Loan shall be consummated under terms no
less favorable to the Company than as set forth on Annex A. The FINOVA
Repayment shall be subject to and in accordance with the terms of the
Escrow Agreement. The Closing shall take place at the offices of Xxxxx &
Xxxxxxxxx LLP, 200 South Orange Avenue, Suite 2300, SunTrust Center,
Xxxxxxx, Xxxxxxx 00000, as of the date of the FINOVA Repayment. The
consummation of the transaction and the payment of the Purchase Price shall
occur at Closing, as follows:
(i) Release of Escrow Amount. Escrow Agent shall release
the Escrow Amount as provided in the Escrow Agreement.
(ii) Deliveries by the Company. The Company shall direct
its stock transfer agent to agent to deliver one or more certificates
representing the Securities being purchased by Buyer, registered in the
name of Buyer (the "Stock Certificates") and to provide Buyer's counsel
with a photocopy of the Certificates along with a written confirmation from
the stock transfer agent that it will deliver the original Stock
Certificates to Buyer's counsel at the address set forth in Section 7.f. on
the following business day. The Securities shall be newly issued shares.
2. BUYER'S REPRESENTATIONS AND WARRANTIES
Buyer represents and warrants to the Company that:
a. Investment Purpose. The Securities are being acquired by
Buyer in good faith solely for its own account, for investment purposes
only, and are not being purchased for resale, resyndication, distribution,
subdivision or fractionalization thereof within the meaning of the 1933
Act; Buyer has no contract or arrangement with any person to sell, transfer
or pledge to any person the Securities or any part thereof, any interest
therein or any rights thereto; Buyer has no present plans to enter into any
such contract or arrangement; and Buyer understands that as a result it
must bear the economic risk of the investment for an indefinite period of
time because the Securities have not been registered under the 1933 Act,
and, therefore, cannot be sold unless they are subsequently registered
under the 1933 Act or in reliance upon an exemption from such registration
under the 1933 Act.
b. Accredited Investor Status. Buyer is an "accredited
investor" as that term is defined in Rule 501(a) of Regulation D.
c. Reliance on Exemptions. Buyer understands that the
Securities are being offered and sold to it under an exemption from the
registration requirements of the United States federal and state securities
laws and that the Company is relying upon the truth and accuracy of, and
Buyer's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of Buyer
to acquire the Securities.
d. Information. Buyer understands and acknowledges that it is
purchasing the Securities without being furnished any offering literature,
prospectus or other materials other than copies of the SEC Documents (as
defined hereinbelow), that this transaction has not been scrutinized by the
SEC or by any administrative agency charged with the administration of the
securities laws of any state, that all documents, records and books,
pertaining to the Company, its business, finances and operations, and this
investment have been made available to Buyer, and its advisors and
representatives, including its attorney, its accountant and/or its
purchaser representative, and that the books and records of the Company
will be available upon reasonable notice for inspection by Buyer during
reasonable business hours at the Company's principal place of business.
Buyer and its advisors and representatives, including its attorney, its
accountant and/or its purchaser representative, if any, have reviewed the
SEC Documents and been afforded the opportunity to ask questions of the
Company and have received complete and satisfactory answers to any such
inquiries. Buyer understands that its investment in the Securities is
speculative and involves a high degree of risk of loss and that Buyer must
be prepared to lose its entire investment in the Company. Buyer has sought
such accounting, legal and tax advice, as it has considered necessary to an
informed investment decision with respect to its acquisition of the
Securities. Buyer, or Buyer together with its purchaser representative, if
any, have such knowledge and experience in financial and business matters
that it and such representative are capable of evaluating the merits and
risks of an investment in the Securities and of making an informed
investment decision.
e. Governmental Review. Buyer understands that no United
States federal or state agency or any other government or governmental
agency has approved or disapproved or passed on or made any recommendation
or endorsement of the Securities or the fairness or suitability of the
investment in the Securities, nor have such authorities passed upon or
endorsed the merits of the offering of the Securities or the accuracy or
adequacy of any of the information provided by the Company to Buyer
regarding the Company, the Securities or any other matter, and that the
Company is relying on the truth and accuracy of the representations,
declarations and warranties herein made by Buyer in offering the Securities
for sale to it without having first registered the same under the 1933 Act.
f. Transfer or Resale. Buyer understands that, except as
provided in the Registration Rights Agreement, (i) the Securities have not
been and are not being registered under the 1933 Act or any state
securities laws, and may not be transferred unless (a) subsequently
registered thereunder, or (b) Buyer shall have provided the Company with a
statement of the circumstances surrounding the proposed disposition and
shall have delivered to the Company an opinion of counsel, reasonably
satisfactory in form, scope and substance to the Company, to the effect
that the Securities to be sold or transferred may be sold or transferred
pursuant to an exemption from such registration; (ii) any sale of such
Securities made in reliance on Rule 144 promulgated under the 1933 Act may
be made only in accordance with the terms of said Rule and further, if said
Rule is not applicable, any resale of such Securities under circumstances
in which the seller (or the person through whom the sale is made) may be
deemed to be an underwriter (as that term is defined in the 0000 Xxx) may
require compliance with some other exemption under the 1933 Act or the
rules and regulations of the SEC thereunder; and (iii) neither the Company
nor any other person is under any obligation to register such Securities
under the 1933 Act or any state securities laws or to comply with the terms
and conditions of any exemption thereunder.
g. Legends. Buyer understands that the stock certificates
representing the Securities shall bear a restrictive legend in
substantially the following form (and a stop-transfer order shall be placed
against transfer of such stock certificates):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE REOFFERED, SOLD, TRANSFERRED,
PLEDGED, OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID
ACT AND THE STATE SECURITIES ACT OR BLUE SKY ACT OF ANY
STATE HAVING JURISDICTION THEREOF, OR (B) AN OPINION OF
COUNSEL, REASONABLY SATISFACTORY IN FORM, SCOPE AND
SUBSTANCE TO THE COMPANY, THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT OR THE SECURITIES ACT OR BLUE
SKY ACT OF ANY STATE HAVING JURISDICTION WITH RESPECT
THERETO.
h. Authorization; Enforcement. This Agreement and the
Registration Rights Agreement have been duly and validly authorized,
executed and delivered on behalf of Buyer and are valid and binding
agreements of Buyer enforceable in accordance with their terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors' rights and remedies or
by other equitable principles of general application.
i. Domicile. If Buyer is an individual, Buyer is a resident
of, or if Buyer is an entity, Buyer's principal place of business is
located in, the Country of France.
j. Indemnification. Buyer acknowledges that Buyer understands
the meaning and legal consequences of the representations and warranties in
this Section 2, and that the Company has relied upon such representations
and warranties, and Buyer hereby agrees to indemnify and hold harmless the
Company and its officers, directors, shareholders, agents and
representatives from and against any and all claims, demands, losses,
damages, expenses or liabilities (including attorneys' fees) due to or
arising out of, directly or indirectly, a breach of any such
representations or warranties; provided, however, that such indemnification
obligation on the part of Buyer shall not exceed the amount of the Purchase
Price. Notwithstanding the foregoing, however, no representation,
warranty, acknowledgment or agreement made herein by Buyer shall in any
manner be deemed to constitute a waiver of any rights granted to such Buyer
under federal or state securities laws.
k. Short Position and Market Purchases. Buyer is not
purchasing the Securities for the purpose of covering any short position in
the Securities.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Buyer that:
a. Organization and Qualification. The Company is a
corporation duly organized and existing in good standing under the laws of
the State of Delaware, and has the requisite corporate power to own its
properties and to carry on its business as now being conducted. The
Company is duly qualified as a foreign corporation to do business and is in
good standing in every jurisdiction in which the nature of the business
conducted by it makes such qualification necessary and where the failure so
to qualify would have a material adverse effect on the operations,
properties or financial condition of the Company taken as a whole (a
"Material Adverse Effect").
b. Authorization; Enforcement. (i) The Company has the
requisite corporate power and authority to enter into and perform this
Agreement and the Registration Rights Agreement and to issue the Securities
in accordance with the terms hereof and thereof, (ii) the execution and
delivery of this Agreement and the Registration Rights Agreement by the
Company and the consummation by it of the transactions contemplated hereby
have been duly authorized by the Company's Board of Directors and no
further consent or authorization of the Company, its Board of Directors, or
its stockholders is required, (iii) this Agreement and the Registration
Rights Agreement have been duly executed and delivered by the Company, and
(iv) this Agreement and the Registration Rights Agreement constitute the
valid and binding obligations of the Company enforceable against the
Company in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally, the
enforcement of creditors' rights and remedies or by other equitable
principles of general application.
c. Capitalization. As of the date of this Agreement, the
authorized capital stock of the Company consists of (i) 85,000,000 shares
of Common Stock of which 12,761,685 shares are issued and outstanding, and
(ii) 1,000,000 shares of preferred stock, $.01 par value, of which 200,000
shares have been designated "Series A Preferred Stock," 57,384 of which are
issued and outstanding. All of such outstanding shares have been validly
issued and are fully paid and nonassessable. Except as set forth in the
SEC Documents (as defined herein) or in Schedule 3.c. attached hereto, as
of the date of this Agreement (i) there are no outstanding options,
warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into,
any shares of capital stock of the Company, or arrangements by which the
Company is or may become bound to issue additional shares of capital stock
of the Company, and (ii) there are no agreements or arrangements under
which the Company is obligated to register the sale of any of its
securities under the 1933 Act other than agreements with respect to
securities which have been previously registered or are subject to current
registration statements. The Common Stock is not subject to preemptive or
other similar rights of any stockholders of the Company.
d. Issuance of Securities. The Securities are duly authorized
and, upon issuance in accordance with the terms hereof, shall be validly
issued, fully paid and non-assessable, and free from all taxes, liens and
charges with respect to the issue thereof.
e. No Conflicts. The execution, delivery and performance of
this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby will not (i) result in any violation of
the Company's Certificate of Incorporation, as amended, as in effect on the
date hereof ("Certificate of Incorporation") or the Company's Bylaws, as in
effect on the date hereof (the "Bylaws") or (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or
both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Company is a party, or result in a
violation of any law, rule, regulation, order, judgment or decree
(including federal and state securities laws and regulations) applicable to
the Company or by which any property or asset of the Company is bound or
affected (except for such conflicts, defaults, terminations, amendments,
accelerations, cancellations and violations as would not, individually or
in the aggregate, have a Material Adverse Effect). The business of the
Company is not being conducted in violation of any law, ordinance,
regulation of any governmental entity, except for possible violations which
either singly or in the aggregate do not have a Material Adverse Effect.
Except as required under the 1933 Act and any applicable state securities
laws, the Company is not required to obtain any consent, authorization or
order of, or make any filing or registration with, any court or
governmental agency in order for it to execute, deliver or perform any of
its obligations under this Agreement in accordance with the terms hereof.
f. Common Stock. The Company has registered its Common Stock
pursuant to Section 12(b) or (g) of the 1934 Act (as defined below) and is
in full compliance with all reporting requirements of the 1934 Act, and the
Company is in compliance with all requirements for the continued listing or
quotation of its Common Stock, and such Common Stock is currently listed or
quoted on, the Principal Market. As of the date hereof, the Principal
Market is the American Stock Exchange, and except as set forth in the SEC
Documents, the Company has not received any notice regarding, and to its
knowledge there is no threat of, the termination or discontinuance of the
eligibility of the Common Stock for such posting or listing.
g. SEC Documents, Financial Statements. During the Company's
last two (2) fiscal years, the Company has filed all reports, schedules,
forms, statements and other documents required to be filed by it with the
SEC pursuant to the reporting requirements of the Securities Exchange Act
of 1934, as amended (the "1934 Act") (all of the foregoing filed prior to
the date hereof and all exhibits included therein and financial statements
and schedules thereto and documents (other than exhibits) incorporated by
reference therein, being hereinafter referred to herein as the "SEC
Documents"). The Company has delivered to Buyer true and complete copies
of the SEC Documents, except for such exhibits, schedules and incorporated
documents. As of their respective dates, subject to, with respect to
certain SEC Documents, the filing of an amendment to such SEC Documents,
the SEC Documents complied in all material respects with the requirements
of the 1934 Act and the rules and regulations of the SEC promulgated
thereunder applicable to the SEC Documents, and none of the SEC Documents,
at the time they were filed with the SEC, contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. As of their
respective dates, the financial statements of the Company included in the
SEC Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC
with respect thereto. Such financial statements have been prepared in
accordance with generally accepted accounting principles, consistently
applied, during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the notes thereto, or (ii) in the
case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in
all material respects the financial position of the Company as of the dates
thereof and the results of its operations and cash flows for the periods
then ended (subject, in the case of unaudited statements, to normal year-
end audit adjustments). No other information provided by or on behalf of
the Company to Buyer and referred to in Section 2(d) of this Agreement
contains any untrue statement of a material fact or omits to state any
material fact necessary in order to make the statements therein, in the
light of the circumstance under which they are or were made, not
misleading. The SEC Documents contain all material information in
connection with the business of the Company and its subsidiaries required
to be included therein. All liabilities, contingent and other, of the
Company are set forth in the financial statements as of December 31, 2002
contained in the Form 10-Q of the Company for such quarterly period ended,
excepting only liabilities incurred in the ordinary course of business
subsequent to December 31, 2002, and liabilities of the type not required
under generally accepted accounting principles to be reflected in such
financial statements. Since December 31, 2002, there has been no
occurrence of any event that would have a Material Adverse Effect upon the
financial condition of the Company from the financial condition stated in
such financial statements other than as disclosed in the SEC Documents.
h. Absence of Litigation. Except as disclosed in the SEC
Documents, there is no action, suit, proceeding, inquiry or investigation
before or by any court, public board or body pending or, to the knowledge
of the Company, threatened against the Company, wherein an unfavorable
decision, ruling or finding would have a Material Adverse Effect or which
would adversely affect the validity or enforceability of, or the authority
or ability of the Company to perform its obligations under, this Agreement
or any of the documents contemplated herein.
i. Exempt Transaction. Subject to the accuracy of Buyer's
representations and warranties in Section 2 of this Agreement, the offer,
sale, and issuance of the shares of Common Stock to Buyer in conformity
with the terms of this Agreement constitute transactions exempt from the
registration requirements of Section 5 of the Securities Act and from the
registration or qualification requirements of the laws of any applicable
state or United States jurisdiction.
j. S-3 Eligibility. The Company is eligible, and will take all
commercially reasonable action required to continue to be eligible, to
register securities for resale with the SEC under Form S-3 promulgated
under the Securities Act.
k. Indemnification. The Company acknowledges that the Company
understands the meaning and legal consequences of the representations and
warranties in this Section 3, and that Buyer has relied upon such
representations and warranties, and the Company hereby agrees to indemnify
and hold harmless Buyer and its officers, directors, shareholders, agents
and representatives from and against any and all claims, demands, losses,
damages, expenses or liabilities (including attorneys' fees) due to or
arising out of a material breach of any such representations or warranties;
provided, however, that such indemnification obligation on the part of the
Company shall not exceed the amount of the Purchase Price. Notwithstanding
the foregoing, however, no representation, warranty, acknowledgment or
agreement made herein by the Company shall in any manner be deemed to
constitute a waiver of any rights granted to the Company under federal or
state securities laws.
4. COVENANTS; CONDITIONS TO CLOSE
a. Form D. The Company agrees to file a Form D with respect to
the Securities as required under Regulation D and to provide a copy thereof
to Buyer promptly after such filing.
b. Reporting Status. Until the earlier of (i) the date as of
which Buyer may sell all the Securities without restriction pursuant to
Rule 144(k) promulgated under the 1933 Act, or (ii) the date on which Buyer
has sold all of the Securities, the Company shall file all reports required
to be filed with the SEC pursuant to the 1934 Act, and the Company shall
not terminate its status as an issuer required to file reports under the
1934 Act even if the 1934 Act or the rules and regulations thereunder would
permit such termination. Buyer shall give notice to the Company when it
has sold all of the Securities.
c. Board Seat. Buyer shall designate a representative (the
"Designee") which shall be appointed to the Company's Board of Directors
until the next annual meeting of the shareholders. During such time as the
Distribution Agreement (as defined below) is in full force and effect, the
Company shall nominate the Designee for consideration of the shareholders
as a proposed member of the Company's Board of Directors (which shall be
initial Designee as provided below unless Buyer notifies the Company in
writing of a change of Designee prior to the Company's filing of its
preliminary proxy statement or, in the case a preliminary proxy statement
is not required for the applicable meeting, the Company's definitive proxy
statement) for each annual (or other) meeting of shareholders at which the
Designee's seat shall become open for election. The initial Designee shall
be Xxxxxxx Xxxxxxxx.
d. Closing Conditions. The obligation of Buyer to close the
transaction contemplated by this Agreement is subject to the satisfaction
on or prior to the date of Closing of the following conditions:
(i) The execution and delivery to Buyer by the Company of
the Registration Rights Agreement;
(ii) The execution and delivery to Buyer by the Company,
Textron Financial Corporation, SouthTrust Bank and the Other Buyers of the
Escrow Agreement;
(iii) The execution and delivery to Buyer by the Company
of a Master Distribution and License Agreement (the "Distribution
Agreement") in form and substance satisfactory to Buyer; and
(iv) Satisfaction of the covenant set forth in Section 4.c.
hereof regarding the appointment of the initial Designee to the Company's
Board of Directors.
5. TRANSFER AGENT INSTRUCTIONS
Buyer acknowledges that the Securities shall be "restricted"
securities, that the Stock Certificates shall bear the restrictive legend
specified in Section 2(g) of this Agreement, and that stop-transfer
instructions have been given by the Company to its transfer agent with
respect to the Securities. If Buyer provides the Company with an opinion
of counsel, reasonably satisfactory in form, scope and substance to the
Company, that registration of a resale by Buyer of any of the Securities is
not required under the 1933 Act or any applicable state securities or blue
sky laws, the Company shall permit the transfer and promptly instruct its
transfer agent to issue one or more certificates in such name and in such
denominations as specified by Buyer.
6. TERMINATION
a. Termination. This Agreement may be terminated as follows:
(i) at any time prior to Closing, by mutual written consent
of all of the parties to this Agreement, whereupon Buyer and the Company
shall deliver to Escrow Agent joint written instructions to release the
Escrow Amount to Buyer;
(ii) at any time after July 15, 2003, by Buyer, if the
Closing has not been effected on or prior to such date and if Buyer is not
then in breach of any term of this Agreement, pursuant to written notice by
Buyer to the Company and the Escrow Agent; or
(iii) at any time after July 15, 2003, by the Company,
if the Closing has not been effected on or prior to such date, if the
Company is not then in breach of any term of this Agreement, pursuant to
written notice by the Company to Buyer and the Escrow Agent.
b. Effect of Termination. All obligations of the parties
hereunder shall cease upon any termination pursuant to Section 6.a.,
provided, however, that the provisions of Sections 6.c. and 7 hereof shall
survive any termination of this Agreement.
c. Treatment of Escrow Amount Upon Termination. If this
Agreement is terminated pursuant to its terms, the Escrow Amount shall be
treated as set forth in the Escrow Agreement.
7. GOVERNING LAW; MISCELLANEOUS
a. Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of Florida without
regard to the principles of conflict of laws.
b. Counterparts. This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party. In the event any signature
page is delivered by facsimile transmission, the party using such means of
delivery shall cause three (3) additional original executed signature pages
to be physically delivered to the other party within five (5) days of the
execution and delivery hereof.
c. Headings. The headings of this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement.
d. Severability. If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement or the validity or enforceability of this
Agreement in any other jurisdiction.
e. Entire Agreement; Amendments. This Agreement and the
instruments referenced herein contain the entire understanding of the
parties with respect to the matters covered herein and therein and, except
as specifically set forth herein or therein, neither the Company nor the
Buyer makes any representation, warranty, covenant or undertaking with
respect to such matters. No provision of this Agreement may be waived or
amended other than by an instrument in writing signed by the party to be
charged with enforcement.
f. Notices. Any notices required or permitted to be given
under the terms of this Agreement shall be sent by mail or delivered
personally or by courier and shall be effective five days after being
placed in the mail, if mailed, certified or registered, return receipt
requested, or upon receipt, if delivered personally or by courier, in each
case addressed to a party. The addresses for such communications shall be:
If to the Company: Galaxy Nutritional Foods, Inc.
0000 Xxxxxxxx Xxx
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xx. Xxxxxxxxxxx X. New
With a copy to: Xxxxx & Xxxxxxxxx LLP
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
If to the Buyer: Fromageries Bel S.A.
00, Xx Xxxxxxxxxxx 00000
Xxxxx, Xxxxxx
Telephone: 00 00 0 00 00 00 00
Telecopy: 00 33 1 40 07 75 17
Attention: Xxxx de Poncins
And Fromageries Bel S.A.
00, Xx Xxxxxxxxxxx 00000
Xxxxx, Xxxxxx
Telephone: 00 00 0 00 00 00 72
Telecopy: 00 33 1 40 07 74 00
Attention: Xxxxxx Xxxxxxxxx
With a copy to: Xxxxxxxxx Xxxxxxx, P.A.
0000 Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Each party shall provide notice to the other party of any change in
address.
g. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their successors and
assigns. Neither the Company nor Buyer shall assign this Agreement or any
rights or obligations hereunder without the prior written consent of the
other (which consent may be withheld for any reason in the sole discretion
of the party from whom consent is sought).
h. Third Party Beneficiaries. This Agreement is intended for
the benefit of the parties hereto and their respective permitted successors
and assigns, and is not for the benefit of, nor may any provision hereof be
enforced by, any other person.
i. Survival. The representations and warranties of the Company
contained in Section 3 shall survive the Closing for a period of one (1)
year thereafter. The representations and warranties of Buyer contained in
Section 2 shall survive the Closing indefinitely.
k. Publicity. The Company and Buyer shall have the right to
approve before issuance any press releases or any other public statements
with respect to the transactions contemplated hereby; provided, however,
that the Company shall be entitled, without the prior approval of Buyer, to
make any press release with respect to such transactions as the Company
reasonably determines is required by applicable law and regulations.
l. Further Assurances. Each party shall do and perform, or
cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments
and documents, as the other party may reasonably request in order to carry
out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.
m. Expenses. Subject to a maximum of $20,000, the Company
shall pay the reasonable fees, costs, expenses and disbursements of Buyer's
legal counsel and other professionals arising in connection with the
negotiation, execution and consummation of this Agreement and the
Registration Rights Agreement.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
IN WITNESS WHEREOF, Buyer and the Company have caused this Securities
Purchase Agreement to be duly executed as of the date first written above.
"Company"
GALAXY NUTRITIONAL FOODS, INC.
By: /s/ Xxxxxxxxxxx X. New
----------------------
Xxxxxxxxxxx X. New, Chief Executive Officer
"Buyer"
FROMAGERIES BEL S.A.
By: /s/ Xxxx de Poncins
-------------------
Xxxx de Poncins, Vice President of Strategy
and Development
By: /s/ Xxxxxx Xxxxxxxxx
--------------------
Xxxxxx Xxxxxxxxx, Vice President of Finance
ANNEX A
Textron Loan Terms
Minimum Loan Amount : $7,000,000
Term: No less than 36 months
Interest Rate (non-default): Not to exceed the prime rate plus 4%
SouthTrust Loan Terms
Minimum Loan Amount: $2,000,000 increase
Term: No less than 60 months
Interest Rate (non-default): Not to exceed the prime rate plus 2%
