EXHIBIT 10.2
SECURITIES PURCHASE AGREEMENT
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THIS SECURITIES PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of the 17th day of November, 1999, by and between HARRY'S FARMERS
MARKET, INC., a Georgia corporation ("Harry's"), and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Nominees
Ltd., a U.K. company ("▇▇▇▇▇▇▇").
BACKGROUND
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WHEREAS, on December 30, 1994, ▇▇▇▇▇▇▇ purchased 888,888 shares of Series A
Redeemable Convertible Preferred Stock, stated value $9.00 per share, of Harry's
(the "Series A Stock");
WHEREAS, on December 30, 1994, ▇▇▇▇▇▇▇ purchased warrants to purchase an
aggregate of 344,444 shares of Series A Stock as represented by that certain
Warrant Certificate dated December 30, 1994 to purchase up to 300,000 shares of
the Class A Common Stock, no par value, of Harry's (the "Common Stock") and that
certain Performance Warrant Certificate dated December 30, 1994 to purchase up
to 44,444 shares of Common Stock (collectively, the "Warrants").
WHEREAS, on January 31, 1997, in contemplation of Harry's entering into a
relationship with Progressive Food Concepts, Inc., Harry's and ▇▇▇▇▇▇▇ entered
into that certain Preferred Stock Exchange Agreement dated January 31, 1997
pursuant to which each share of Series A Stock held by ▇▇▇▇▇▇▇ was exchanged for
one share of Series AA Preferred Stock, stated value $9.00 per share, of Harry's
(the "Preferred Stock") and the shares of Series A Stock previously held by
▇▇▇▇▇▇▇ were canceled;
WHEREAS, on January 31, 1997, the Warrants were amended to change the
exercise price to $4.00 per share;
WHEREAS, ▇▇▇▇▇▇▇ owns and desires to sell to Harry's, and Harry's desires
to purchase from ▇▇▇▇▇▇▇, the 888,888 shares of Preferred Stock, which is all of
the Preferred Stock owned by ▇▇▇▇▇▇▇, and the Warrants, which, together,
comprise all the securities of Harry's owned by ▇▇▇▇▇▇▇, other than 50,000
shares of Common Stock owned by ▇▇▇▇▇▇▇ (the "▇▇▇▇▇▇▇ Common Stock"), which are
not a part of this Agreement.
In consideration of the foregoing, the mutual representations, warranties,
covenants and agreements set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
1. TERMS OF ACQUISITION
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1.1 Sale and Transfer of Securities.
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(a) The closing for the purchase and sale contemplated by this Agreement
shall be held at the offices of ▇▇▇▇▇▇ & Bird, One Atlantic Center, ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇, as soon as practicable following the
satisfaction of the conditions set forth in Section 8 herein, but in no event
later than December 15, 1999, or at such other place as the parties hereto may
agree in writing (the date on which the closing actually occurs is hereinafter
referred to as the "Closing Date").
(b) On the Closing Date and upon the terms and subject to the conditions of
this Agreement, ▇▇▇▇▇▇▇ will sell, convey, transfer, assign and deliver to
Harry's, and Harry's will purchase and accept from ▇▇▇▇▇▇▇, 888,888 shares of
Preferred Stock (the "Shares"), as evidenced by stock certificate number P-5,
and the Warrants (collectively, the Shares and the Warrants are referred to
herein as the "Securities").
(c) On the Closing Date, ▇▇▇▇▇▇▇ will convey to Harry's good, valid and
marketable title to the Securities free and clear of any and all liabilities,
obligations, liens, encumbrances, restrictions or rights of others of any
character whatsoever. On the Closing Date, ▇▇▇▇▇▇▇ will deliver to Harry's (i)
stock certificate number P-5 evidencing the Shares registered in the name of
▇▇▇▇▇▇▇, duly endorsed in blank on the reverse thereof or accompanied by a duly
executed stock power and (ii) the original executed Warrants.
2. PURCHASE PRICE
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2.1 Purchase Price. In full payment of the purchase price for the
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Securities, on the Closing Date, Harry's will pay ▇▇▇▇▇▇▇ Two Million Dollars
($2,000,000) (the "Purchase Price") by wire transfer of immediately payable
funds to an account designated in writing by ▇▇▇▇▇▇▇.
3. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER
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▇▇▇▇▇▇▇ represents and warrants to Harry's as follows:
3.1 Ownership of Securities. ▇▇▇▇▇▇▇ is the record and beneficial owner
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of the Securities free and clear of any liens, claims, options, charges,
encumbrances or rights of others. At no time since December 30, 1994 has
▇▇▇▇▇▇▇ assigned the Warrants in whole or in part or transferred the Warrants.
Except for the ▇▇▇▇▇▇▇ Common Stock, the Securities constitute ▇▇▇▇▇▇▇'▇ only
interest in or to Harry's, its business or any of its assets.
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3.2 Consents. ▇▇▇▇▇▇▇ may enter into this Agreement and perform its
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obligations under this Agreement without the necessity of obtaining any consent
from anyone, including any governmental authority, and all of the Securities may
be sold by it to Harry's without the imposition of any lien, charge or
encumbrance with respect to such Securities.
3.3 Authorization and Binding Effect. ▇▇▇▇▇▇▇ has the corporate power and
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authority to execute, deliver, enter into and perform this Agreement and to
consummate the transactions contemplated by this Agreement. The officers
executing this Agreement are the duly elected officers of ▇▇▇▇▇▇▇ and are duly
authorized to execute this Agreement on ▇▇▇▇▇▇▇'▇ behalf. This Agreement
constitutes a legal, valid and binding agreement enforceable against ▇▇▇▇▇▇▇ in
accordance with the terms hereof. Upon consummation of the transactions
contemplated herein, Harry's will own the Securities sold by ▇▇▇▇▇▇▇ pursuant to
this Agreement free and clear of any liens, claims, options, charges,
encumbrances or rights of others.
3.4 No Breach. The execution, delivery and performance of this Agreement
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and the consummation of the transactions contemplated hereby will not violate or
result in a breach of or default under (i) any instrument or agreement to which
▇▇▇▇▇▇▇ is a party or is bound, (ii) ▇▇▇▇▇▇▇'▇ corporate documents or (iii) any
law, rule, regulation, judgment, order, injunction, decree, or award against or
binding upon ▇▇▇▇▇▇▇.
3.5 Access to Information. ▇▇▇▇▇▇▇ has owned the Securities since
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December 30, 1994 and at all times since such date has had full and free access
to Harry's, its management personnel and its financial statements and
information. ▇▇▇▇▇▇▇ has had the opportunity to ask questions of and receive
answers or obtain additional information from Harry's concerning the financial
and other affairs and prospects of Harry's and the terms and conditions of the
sale of the Securities. ▇▇▇▇▇▇▇ is familiar with Harry's and the business in
which it is engaged. ▇▇▇▇▇▇▇ is fully aware that future events could impact the
value of the Securities, and ▇▇▇▇▇▇▇ has conducted its own analysis in deciding
to enter into this Agreement. ▇▇▇▇▇▇▇ acknowledges that the negotiations
culminating in this Agreement have been at arm's length. ▇▇▇▇▇▇▇ has made its
own investigation of Harry's, its business, its financial statements and
information, has solely relied on the results of such investigation in entering
into this Agreement and has not relied on any statements or representations by
▇▇▇▇▇`s or any of its representatives, counsel or agents other than those
representations and warranties contained in Section 4 of this Agreement.
3.6 Certain Prior Actions. Prior to the date of this Agreement, ▇▇▇▇▇▇▇
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has not taken any actions, or failed to take any actions, that if taken or not
taken immediately after the execution and delivery of this Agreement would
violate the provisions of Section 5 hereof.
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4. REPRESENTATIONS AND WARRANTIES OF HARRY'S
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Harry's represents and warrants to ▇▇▇▇▇▇▇ as follows:
4.1 Consents. Harry's may enter into this Agreement and perform its
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obligations under this Agreement without the necessity of obtaining any consent
from anyone, including any governmental authority.
4.2 Authorization and Binding Effect. Harry's has the corporate power and
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authority to execute, deliver, enter into and perform this Agreement and to
consummate the transactions contemplated by this Agreement. The officers
executing this Agreement are the duly elected officers of Harry's and are duly
authorized to execute this Agreement on Harry's behalf. This Agreement
constitutes a legal, valid and binding obligation of Harry's enforceable against
Harry's in accordance with its terms.
4.3 No Breach. The execution, delivery and performance of this Agreement
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and the consummation of the transactions contemplated hereby will not violate or
result in a breach of or default under (i) any instrument or agreement to which
Harry's is a party or is bound, (ii) its Articles of Incorporation or its
Bylaws, or (iii) any law, rule, regulation, judgment, order, injunction, decree,
or award against or binding upon Harry's.
4.4 Corporate Existence, Power and Authority.
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(a) Harry's is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation. Harry's is duly
qualified, licensed and authorized to do business and is in good standing in
each jurisdiction in which it owns or leases any property or in which the
conduct of its business requires it to so qualify or be so licensed, except for
such jurisdictions where the failure to so qualify or be so licensed would not
have a material adverse effect on Harry's assets, properties, liabilities,
business, results of operations or condition (financial or otherwise).
(b) No proceeding has been commenced looking toward the dissolution or
merger of Harry's or the amendment of its certificate of incorporation. Harry's
is not in violation in any material respect of its certificate of incorporation
or by-laws.
(c) Harry's has all requisite power, authority (corporate and other) and
legal right to own or to hold under lease and to operate the properties it owns
or holds and to conduct its business as now being conducted.
4.5 Litigation. Other than has been disclosed in its filings with
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the Securities and Exchange Commission, there is no action, suit, proceeding,
investigation or claim pending, to which Harry's has received any oral or
written notice, or, to the best knowledge of Harry's, threatened in law, equity
or otherwise before any court, administrative agency or arbitrator which (i)
questions the validity of this Agreement or
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any action taken or to be taken pursuant hereto or (ii) might adversely affect
the right or title of ▇▇▇▇▇▇▇ in the ▇▇▇▇▇▇▇ Common Stock.
5. COVENANTS OF ▇▇▇▇▇▇▇ From and after the date hereof, ▇▇▇▇▇▇▇
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shall perform and comply with the following covenant:
5.1 Nondisclosure of Trade Secrets and Confidential Information. As
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used in this Agreement, the term "Confidential Information" shall mean all
information regarding Harry's or its activities, business and current or
prospective customers or suppliers that are not generally known to persons not
employed by Harry's, including without limitation, information regarding Harry's
products, contracts, corporate records or proceedings, current or prospective
employees, pricing, costs, financial results or condition, relationships with
its customers and suppliers, and relationships with its employees. Confidential
Information shall not include information that has become generally available to
the public by the act of one who has the right to disclose such information
without violating any right or privilege of Harry's. For one (1) year after the
date hereof with respect to Confidential Information, ▇▇▇▇▇▇▇ shall not directly
or indirectly transmit or disclose any Confidential Information to any person,
concern or entity, and shall not make use of any such Confidential Information,
directly or indirectly, for itself or others. In the event that ▇▇▇▇▇▇▇ is
requested in any proceeding to disclose any Confidential Information, ▇▇▇▇▇▇▇
shall give Harry's prompt notice of such request so that Harry's may seek an
appropriate protective order. If, in the absence of a protective order, ▇▇▇▇▇▇▇
is nonetheless compelled by law to disclose Confidential Information, ▇▇▇▇▇▇▇
may disclose such information in such proceeding without liability hereunder;
provided, however, that ▇▇▇▇▇▇▇ gives Harry's written notice of the Confidential
Information to be disclosed as far in advance of its disclosure as is
practicable and, upon Harry's request and at Harry's expense, uses its best good
faith efforts to obtain assurances that confidential treatment will be accorded
to the information provided by ▇▇▇▇▇▇▇ or its agents.
5.2 Injunctive Relief. ▇▇▇▇▇▇▇ acknowledges that the nondisclosure
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covenant contained in this Section 5 is a reasonable means of protecting and
preserving Harry's interests and the confidentiality of the Confidential
Information. ▇▇▇▇▇▇▇ agrees that any breach of this covenant will result in
irreparable damage and injury to Harry's and that Harry's will be entitled to
injunctive relief in any court of competent jurisdiction without the necessity
of posting any bond. ▇▇▇▇▇▇▇ also agrees that any injunctive relief shall be in
addition to any damages that may be recoverable by Harry's.
5.3 Enforceability of Covenants. ▇▇▇▇▇▇▇ and Harry's agree that
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▇▇▇▇▇▇▇'▇ obligations under the nondisclosure covenant are separate and distinct
from its obligations under other provisions of this Agreement, are material, and
a failure or alleged failure of Harry's to perform its obligations under any
provision of this Agreement shall not constitute a defense to the enforceability
of the nondisclosure covenant.
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6. INDEMNIFICATION
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6.1 Indemnity by ▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇ hereby agrees to indemnify
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Harry's, and each of its officers, directors, shareholders, employees, agents
and counsel against, and to hold each of the foregoing harmless from, any and
all losses, liabilities, costs, damages and expenses (including but not limited
to reasonable attorneys' fees, including attorneys' fees necessary to enforce
its rights to indemnification hereunder) arising from or resulting by reason of
any material inaccuracy in any of the representations or warranties, or any
breach of any of the covenants or agreements, made or to be performed by ▇▇▇▇▇▇▇
pursuant to this Agreement.
6.2 Indemnity by Harry's. Harry's hereby agrees to indemnify ▇▇▇▇▇▇▇
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and each of its officers, directors, shareholders, employees, agents and counsel
against, and to hold each of the foregoing harmless from, any and all losses,
liabilities, costs, damages and expenses (including but not limited to
reasonable attorneys' fees, including attorneys' fees necessary to enforce his
rights to indemnification hereunder) arising from or resulting by reason of any
material inaccuracy in any of the representations or warranties, or any breach
of any of the covenants or agreements, made or to be performed by Harry's
pursuant to this Agreement.
6.3 Termination of Existing Agreements. Subject to the foregoing
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sentence, on and as of the Closing Date all agreements of any kind and nature
between ▇▇▇▇▇▇▇ and Harry's, including, without limitation, that certain Amended
and Restated Stockholders Agreement dated January 31, 1997 and that certain
Registration Rights Agreement dated December 30, 1994, as amended, will be
terminated and of no further force or effect without any further action on the
part of the parties hereto.
7. NEGATIVE COVENANT OF ▇▇▇▇▇▇▇ From the date hereof to the Closing Date,
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which shall be no later than December 15, 1999, ▇▇▇▇▇▇▇ shall not sell any of
the Shares, assign the Warrants in whole or in part or transfer the Warrants.
8. CONDITIONS PRECEDENT TO PARTIES' OBLIGATIONS TO CLOSE The obligations of
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▇▇▇▇▇▇▇ and Harry's to consummate the transactions contemplated by this
Agreement shall be subject to the satisfaction of each of the following
conditions, unless waived in whole or in part by the parties.
8.1 Financing Commitments. Harry's shall have obtained financing in
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such amount and on such terms as the Board of Directors of Harry's, in its
reasonable discretion, shall have determined is acceptable.
8.2 ▇▇▇▇▇▇▇ Representations and Warrants. The representations and
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warranties made by ▇▇▇▇▇▇▇ in Article 3 hereof shall be true and correct on and
as of the
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Closing Date with the same force and effect as though such representations and
warranties had been made on and as of the Closing Date.
8.3 Harry's Representations and Warrants. The representations and
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warranties made by Harry's in Article 4 hereof shall be true and correct on and
as of the Closing Date with the same force and effect as though such
representations and warranties had been made on and as of the Closing Date.
8.4 Compliance by ▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇ shall have duly performed in all
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material respects all of the covenants and negative covenants contained in this
Agreement to be performed by ▇▇▇▇▇▇▇.
9. MISCELLANEOUS
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9.1 Representations and Warranties. All of the representations,
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warranties, covenants and agreements made by any of the parties in or pursuant
to this Agreement shall survive the consummation of the transactions
contemplated by this Agreement.
9.2 Successors and Assigns. No party may assign any of its rights
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hereunder without the prior written consent of the other party hereto.
9.3 Governing Law. This Agreement shall be controlled, construed and
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enforced in accordance with the substantive laws of the State of New York,
without regard to the laws related to choice or conflict of laws.
9.4 Counterparts. This Agreement may be executed in one or more
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counterparts, all of which shall be one and the same Agreement and shall become
effective when one or more counterparts have been signed by all of the parties
and delivered to the other parties.
9.5 Further Assurances. ▇▇▇▇▇▇▇ shall at any time and from time to
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time after the date hereof take whatever actions Harry's may reasonably request
to effectuate, record or perfect its transfer of the Securities to Harry's
pursuant to this Agreement or to otherwise effectuate or consummate any of the
transactions contemplated hereby.
9.6 Interpretations. Neither this Agreement nor any uncertainty or
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ambiguity herein shall be construed or resolved against Harry's or ▇▇▇▇▇▇▇,
whether under any rule of construction or otherwise. No party to this Agreement
shall be considered the draftsman. On the contrary, this Agreement has been
reviewed, negotiated and accepted by both parties and their attorneys and shall
be construed and interpreted according to the ordinary meaning of the words used
so as fairly to accomplish the purposes and intentions of all parties hereto.
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9.7 Notices. All notices, requests, demands and other communications
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hereunder shall be (i) delivered by hand, (ii) mailed by registered or certified
mail, return receipt requested, first class postage prepaid and properly
addressed, (iii) sent by national overnight courier service, or (iv) sent by
facsimile, graphic scanning or other telegraphic communications equipment to the
parties, addressed as follows:
To ▇▇▇▇▇▇▇: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Nominees, Ltd.
c/▇ ▇▇▇▇▇▇▇ Capital Management
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to: ▇▇▇▇▇▇ ▇▇▇▇▇ & Bockius, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
To Harry's: Harry's Farmers Market, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to: ▇▇▇▇▇▇ & Bird LLP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(b) All notices, requests, instructions or documents given to any
party in accordance with this Section 9.7 shall be deemed to have been given (i)
on the date of receipt if delivered by hand, overnight courier service or if
sent by facsimile, graphic scanning or other telegraphic communications
equipment or (ii) on the date three (3) business days after depositing with the
United States Postal Service if mailed by United States registered or certified
mail, return receipt requested, first class postage prepaid and properly
addressed.
(c) Any party hereto may change its address specified for notices
herein by designating a new address by notice in accordance with this Section
9.7.
9.8 Entire Agreement. This Agreement constitutes the entire
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agreement among the parties relating to the subject matter hereof and thereof
and supersedes all prior
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oral and written, and all contemporaneous oral negotiations, discussions,
writings, correspondence and agreements relating to the subject matter of this
Agreement.
9.9 Modifications, Amendments and Waivers. The failure or delay of
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any party at any time or times to require performance of any provision of this
Agreement shall in no manner affect its right to enforce that provision. No
single or partial waiver by any party of any condition of this Agreement, or the
breach of any term, agreement or covenant or the inaccuracy of any
representation or warranty of this Agreement, whether by conduct or otherwise,
in any one or more instances shall be construed or deemed to be a further or
continuing waiver of any such condition, breach or inaccuracy or a waiver of any
other condition, breach or inaccuracy.
9.10 Severability. Should any one or more of the provisions of this
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Agreement be determined to be invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions hereof
shall not in any way be affected or impaired thereby. The parties shall
endeavor in good faith to replace any provisions determined to be invalid,
illegal or unenforceable with valid, legal and enforceable provisions the
economic effect of which comes as close as practicable to that of the invalid,
illegal or unenforceable provisions.
[SIGNATURES CONTINUED ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties have caused this Stock Purchase
Agreement to be duly executed and delivered under seal as of the date first
above written.
HARRY'S FARMERS MARKET, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Sr. Vice President and CFO
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[CORPORATE SEAL]
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ NOMINEES, LTD.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇
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Title: Director
---------------------------------
[SEAL]
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