0000912057-01-536680.txt : 20011030
0000912057-01-536680.hdr.sgml : 20011030
ACCESSION NUMBER: 0000912057-01-536680
CONFORMED SUBMISSION TYPE: 8-K
PUBLIC DOCUMENT COUNT: 4
CONFORMED PERIOD OF REPORT: 20011025
ITEM INFORMATION: Other events
ITEM INFORMATION: Financial statements and exhibits
FILED AS OF DATE: 20011026
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: LANDEC CORP \CA\
CENTRAL INDEX KEY: 0001005286
STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE PRODUCTION - CROPS [0100]
IRS NUMBER: 943025618
STATE OF INCORPORATION: CA
FISCAL YEAR END: 1031
FILING VALUES:
FORM TYPE: 8-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 000-27446
FILM NUMBER: 1766826
BUSINESS ADDRESS:
STREET 1: 3603 HAVEN AVE
CITY: MENLO PARK
STATE: CA
ZIP: 94025
BUSINESS PHONE: 4152613697
MAIL ADDRESS:
STREET 1: 3603 HAVEN AVE
CITY: MINLO PARK
STATE: CA
ZIP: 94025
8-K
1
a2061927z8-k.txt
8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): OCTOBER 25, 2001
LANDEC CORPORATION
(Exact name of registrant as specified in its charter)
0-27446
(Commission File Number)
CALIFORNIA 94-3025618
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
3603 HAVEN AVENUE, MENLO PARK, CALIFORNIA 94025
(Address of principal executive offices, with zip code)
(650) 306-1650
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Item 5. OTHER EVENTS.
Pursuant to a Series B Preferred Stock Purchase Agreement (the "Purchase
Agreement") dated as of October 24, 2001, Landec Corporation (the "Registrant")
completed a private placement of 142,857 shares of Series B Preferred Stock,
$0.001 par value, (the "Series B Preferred Stock") to Seahawk Ranch Irrevocable
Trust of Foster City, California. Mr. Kenneth E. Jones, a director of Landec
Corporation, is one of the trustees of Seahawk Ranch Irrevocable Trust. The
Series B Preferred Stock is convertible into Common Stock at $3.50 per share.
The Series B Preferred Stock earns cumulative dividends payable in
additional shares of Series B Preferred Stock at an annual rate of eight percent
(8%) for the first two years, ten percent (10%) for the third year and twelve
percent (12%) thereafter. The Series B Preferred Stock may be redeemed by Landec
Corporation at any time for the original purchase price plus all accrued and
unpaid dividends.
One half of the Series B Preferred Stock is convertible into Common Stock
at the option of the holder after the six-month anniversary of the closing. All
of the Series B Preferred Stock is convertible into Common Stock at the option
of the holder after one-year from the closing. If the holder elects to convert
all or a portion the Series B Preferred Stock, then the Company has agreed to
use its best efforts to prepare and file with the Securities and Exchange
Commission a Registration Statement under the Securities Act covering the
converted Common Stock within ninety (90) days after the date the holder
notifies the Company of its intent to convert.
Item 7. FINANCIAL STATEMENTS AND EXHBITS
(c) Exhibits.
3.1 Certificate of Determination of Rights, Preferences and Privileges
of Series B Preferred Stock.
4.1 Series B Preferred Stock Purchase Agreement between the Registrant
and Seahawk Ranch Irrevocable Trust, dated as of October 24, 2001.
99.1 Press Release dated October 25, 2001.
* The Registrant hereby agrees to furnish to the Securities and Exchange
Commission supplementally, any schedules or exhibits to such agreement which are
not filed herewith, upon the request of the Securities and Exchange Commission.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this Report to be signed on its behalf
by the undersigned, thereunto duly authorized.
LANDEC CORPORATION
Registrant
Date: October 25, 2001 By: /s/ GREGORY S. SKINNER
-----------------------------
Gregory S. Skinner
Vice President of Finance and
Chief Financial Officer
LANDEC CORPORATION
INDEX TO EXHIBITS
EXHIBIT NO. EXHIBIT TITLE
----------- -------------
3.1 Certificate of Determination of Rights, Preferences and Privileges of Series B
Preferred Stock.
4.1 Series B Preferred Stock Purchase Agreement between the Registrant and Seahawk Ranch
Irrevocable Trust, dated as of October 24, 2001.
99.1 Press Release dated October 25, 2001.
* The Registrant hereby agrees to furnish to the Securities and Exchange
Commission supplementally, any schedules or exhibits to such agreement which are
not filed herewith, upon the request of the Securities and Exchange Commission.
EX-3.1
3
a2061927zex-3_1.txt
EXHIBIT 3.1
EXHIBIT 3.1
CERTIFICATE OF DETERMINATION OF RIGHTS, PREFERENCES
AND PRIVILEGES OF
SERIES B PREFERRED STOCK
OF
LANDEC CORPORATION
The undersigned, Gregory S. Skinner and Geoffrey P. Leonard, do hereby
certify:
1. That they are the duly elected Vice President of Finance and Chief
Financial Officer and Secretary, respectively, of Landec Corporation, a
California corporation (the "Corporation").
2. That pursuant to the authority conferred upon the Board of Directors by
the Articles of Incorporation of the said Corporation, the said Board of
Directors on October 18, 2001 adopted the following resolutions creating a
series of shares of Preferred Stock designated as Series B Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board of Directors
of the Corporation by the Articles of Incorporation, the Board of Directors
does hereby provide for the issue of a new series of Preferred Stock of the
Corporation, that shall be designated "Series B Preferred Stock," par value
$0.001 per share, and shall initially consist of 225,000 shares. To the
extent that the designations, powers, preferences and relative and other
special rights and the qualifications, limitations and restrictions of the
Series B Preferred Stock are not stated and expressed in the Articles of
Incorporation, the Board of Directors does hereby fix and herein state and
express such designations, powers, preferences and relative and other
special rights and the qualifications, limitations and restrictions thereof
(all terms used herein which are defined in the Articles of Incorporation
shall be deemed to have the meanings provided therein), as follows:
Section 1. DESIGNATION AND AMOUNT. The shares shall be designated as
"Series B Preferred Stock," par value $0.001 per share, and the number of shares
constituting such series shall be 225,000.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(A) DEFINITIONS.
(i) "Dividends" shall mean the "paid-in-kind" dividends as set
forth in Section 2(B) below.
(ii) "Dividend Payment Amount" shall mean the amount of accrued
dividends per share, as expressed in dollars, with respect to any Dividend
Payment Period
determined by applying the Dividend Rate (calculated by multiplying the Dividend
Rate by 25% for each Dividend Payment Period) to the Original Issue Price.
(iii) "Dividend Payment Date" shall mean January 31, April 30,
July 31 and October 31 of each year commencing January 31, 2002.
(iv) "Dividend Payment Period" shall mean the period from, and
including, the Purchase Date, to, but not including, the first Dividend Payment
Date and thereafter, each quarterly period, including any Dividend Payment Date
to, but not including, the next Dividend Payment Date.
(v) "Dividend Rate" shall mean an annual rate of eight percent
(8%) until and including the second -year anniversary of the Purchase Date; and
thereafter an annual rate of ten percent (10%) until and including the
third-year anniversary of the Purchase Date; and thereafter an annual rate of
twelve percent (12%).
(vi) "Dividend Record Date" shall mean the date that is ten (10)
business days prior to any Dividend Payment Date.
(vii) "Original Issue Price" shall mean an amount per share of
Series B Preferred Stock equal to $35.00.
(viii) "Purchase Date" shall mean the date of the closing of the
Corporation's initial sale of shares of Series B Preferred Stock.
(B) DIVIDEND RIGHTS.
(i) The holders of record of Series B Preferred Stock shall be
entitled, on each Dividend Payment Date, to receive cumulative dividends payable
in additional shares of Series B Preferred Stock (such dividends paid in kind
being herein referred to as "Dividends") in the amount set forth in subsection
(ii) immediately below. Dividends shall cease to accrue on each share of Series
B Preferred Stock upon its Redemption Date, Conversion Date or Automatic
Conversion Date (each as defined below), unless the Corporation defaults in its
obligations to convert or redeem such shares.
(ii) Dividends with respect to any Dividend Payment Period for
each share of Series B Preferred Stock shall be paid by delivering to the
holders of Series B Preferred Stock a stock certificate or certificates for the
number of shares of Series B Preferred Stock determined by dividing the Dividend
Payment Amount with respect to such Dividend Payment Period by the Original
Issue Price. The issuance of such Dividends shall constitute full payment of
such dividend. Fractional shares of Series B Preferred Stock payable as
Dividends (after aggregating all Dividends payable to the holder of Series B
Preferred Stock with respect to such Dividend Payment Period) shall not be paid
in shares of Series B Preferred Stock, and in lieu of such fractional shares the
Corporation shall pay the holder the amount in cash equal to the fraction of
such share of Series B Preferred Stock multiplied by the Original Issue Price.
2
(iii) Any additional shares of Series B Preferred Stock issued
pursuant to this Section 2 shall be subject in all respects to the same terms as
the Series B Preferred Stock originally issued on the Purchase Date.
(iv) Dividends shall accrue (whether or not declared by the Board
of Directors) on each share of Series B Preferred Stock during each Dividend
Payment Period.
(v) In the case of Series B Preferred Stock issued and/or
accumulated as a Dividend, Dividends shall accrue (whether or not declared by
the Board of Directors) on such shares and be cumulative from the Dividend
Payment Date in respect of which such shares were issued and/or accumulated as a
Dividend.
(vi) Prior to each Dividend Record Date immediately preceding
each Dividend Payment Date, the Board of Directors shall declare Dividends on
the Series B Preferred Stock in accordance with this Section 2(B), payable on
the next Dividend Payment Date.
(vii) If the Dividend Payment Date occurs on a day that is not a
business day, any accrued Dividends otherwise payable on such Dividend Payment
Date shall be paid on the next succeeding business day. Dividends shall be paid
to the holder of record of the Series B Preferred Stock on each Dividend Payment
Date as their names shall appear on the share register of the Corporation on the
Dividend Record Date.
(viii) In addition to the Dividends, before the Corporation pays
dividends ("Common Dividends"), when and if declared by the Board of Directors,
on its Common Stock, in cash or in kind, the holders of record on the record
date of outstanding Series B Preferred Stock shall be entitled to receive
dividends in such an amount as they would be entitled to receive as a result of
such declaration if, as of the record date, their shares of Series B Preferred
Stock had been converted into shares of Common Stock pursuant to Section 6
hereof. No Common Dividend shall be paid or set aside for payment to the holders
of Common Stock until and unless all dividends (including Dividends and as set
forth in the immediately preceding sentence) then payable to the holders of the
Series B Preferred Stock shall have been paid, or declared and set aside for
payment, in full.
(ix) Notwithstanding anything contained herein to the contrary,
no dividends on shares of Series B Preferred Stock shall be declared by the
Board of Directors or paid or set apart for payment by the Corporation at such
time if such declaration or payment shall be restricted or prohibited by law.
Section 3. VOTING RIGHTS. The holders of shares of Series B Preferred Stock
shall have the following voting rights:
(A) The holder of each share of Series B Preferred Stock shall have
the right to one vote for each share of Common Stock into which such Preferred
Stock could then be converted, and with respect to such vote, such holder shall
have full voting rights and powers equal to the voting rights and powers of the
holders of Common Stock, and shall be entitled, notwithstanding any provision
hereof, to notice of any shareholders' meeting in accordance with
3
the bylaws of the Corporation, and shall be entitled to vote, together with
holders of Common Stock, with respect to any question upon which holders of
Common Stock have the right to vote. Fractional votes shall not, however, be
permitted and any fractional voting rights available on an as-converted basis
(after aggregating all shares into which shares of Series B Preferred Stock held
by each holder could be converted) shall be rounded to the nearest whole number
(with one-half being rounded upward).
(B) Except as otherwise provided herein or by law, the holders of
shares of Preferred Stock and the holders of shares of Common Stock shall vote
together as one class on all matters submitted to a vote of shareholders of the
Corporation.
(C) Except as provided herein or by law, holders of Series B Preferred
Stock shall have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote with holders of Common
Stock as set forth herein) for taking any corporate action.
Section 4. REDEMPTION.
(A) REDEMPTION DATE AND PRICE. The Corporation may, on any date (a
"Redemption Date") determined by the Board of Directors (provided that funds are
legally available to do so), redeem in whole or in part the Series B Preferred
Stock by paying in cash therefor a sum equal to (i) $35.00 per share (as
adjusted for any stock combinations or splits with respect to such shares) plus
(ii) an amount in cash equal to all accrued and unpaid dividends on each such
share (whether or not declared) calculated by applying the then applicable
Dividend Rate to the Original Issue Price for the period beginning on, and
including, the last succeeding Dividend Payment Date to, but not including, the
Redemption Date (collectively, the "Redemption Price"); provided, however, that
in the event the Redemption Date occurs prior to the six-month anniversary of
the Purchase Date, then the amount calculated in (ii) immediately above shall be
calculated as if the Redemption Date were April 30, 2002. Any redemption
effected pursuant to this Section 4 shall be made on a pro rata basis among the
holders of the Series B Preferred Stock in proportion to the number of shares of
Series B Preferred Stock then held by them.
(B) PROCEDURE. At least thirty (30) but no more than sixty (60) days
prior to each Redemption Date, written notice shall be mailed, first class
postage prepaid, to each holder of record (at the close of business on the
business day next preceding the day on which notice is given) of the Series B
Preferred Stock to be redeemed, at the address last shown on the records of the
Corporation for such holder, notifying such holder of the redemption to be
effected, specifying the number of shares to be redeemed from such holder, the
Redemption Date, the applicable Redemption Price, the place at which payment may
be obtained and calling upon such holder to surrender to the Corporation, in the
manner and at the place designated, such holder's certificate or certificates
representing the shares to be redeemed (the "Redemption Notice"); provided,
however, that prior to the six-month anniversary of the Purchase Date, the
Redemption Notice may be delivered not less than fifteen (15) days prior to the
Redemption Date. Except as provided in Section 4(C), on or after the Redemption
Date, each holder of Series B Preferred Stock to be redeemed shall surrender to
the Corporation the certificate or certificates representing
4
such shares, in the manner and at the place designated in the Redemption Notice,
and thereupon the Redemption Price of such shares shall be payable to the order
of the person whose name appears on such certificate or certificates as the
owner thereof and each surrendered certificate shall be cancelled. In the event
less than all the shares represented by any such certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares.
(C) EFFECT OF REDEMPTION; INSUFFICIENT FUNDS. From and after the
Redemption Date, unless there shall have been a default in payment of the
Redemption Price, all rights of the holders of shares of Series B Preferred
Stock designated for redemption in the Redemption Notice as holders of such
Preferred Stock (except the right to receive the applicable Redemption Price
without interest upon surrender of their certificate or certificates) shall
cease with respect to such shares, and such shares shall not thereafter be
transferred on the books of the Corporation or be deemed to be outstanding for
any purpose whatsoever. Subject to the rights of series of Preferred Stock that
may from time to time come into existence, if funds of the Corporation legally
available for redemption of shares of Series B Preferred Stock on any Redemption
Date are insufficient to redeem the total number of shares of Series B Preferred
Stock to be redeemed on such date, those funds which are legally available will
be used to redeem the maximum possible number of such shares ratably among the
holders of such shares to be redeemed based upon their total Redemption Price
applicable to their shares of Series B Preferred Stock which are subject to
redemption on such Redemption Date and the remainder called for redemption shall
not be redeemed. Subject to the rights of series of Preferred Stock that may
from time to time come into existence, at any time thereafter when additional
funds of the Corporation are legally available for the redemption of shares of
Series B Preferred Stock called for redemption but not redeemed as a result of
funds not being legally available therefor, such funds will immediately be used
to redeem the balance of the shares which the Corporation has become obliged to
redeem on any Redemption Date but which it has not redeemed.
(D) REACQUIRED SHARES. Any shares of Series B Preferred Stock
redeemed, purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof.
All such shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock and may be reissued as part of a new series of
Preferred Stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein.
Section 5. LIQUIDATION, DISSOLUTION OR WINDING UP.
(A) Upon any liquidation (voluntary or otherwise), dissolution or
winding up of the Corporation, no distribution shall be made to the holders of
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series B Preferred Stock unless, prior
thereto, the holders of shares of Series B Preferred Stock shall have received
an amount equal to the greater of (i) $35.00 per share of Series B Preferred
Stock plus an amount in cash equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, calculated by applying the then
applicable Dividend Rate to the Original Issue Price for the period beginning
on, and including, the last succeeding Dividend Payment Date to, but not
including, the date of such payment; or (ii) such amount per share of Series B
Preferred Stock as would have been payable had each such share been converted
into Common Stock immediately
5
prior to such liquidation, dissolution or winding up of the Corporation (the
"Series B Liquidation Preference"). After payment has been made to the holders
of the Series B Preferred Stock of the full amounts to which they shall be
entitled pursuant to this Section 5(A) above and subject to the rights of the
Series A Preferred Stock and any series of Preferred Stock that may from time to
time come into existence, all remaining assets of the Corporation available for
distribution to its shareholders, if any, shall be distributed ratably to the
holders of Common Stock. The Series A Preferred Stock shall rank on parity with
the Series B Preferred Stock.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series B Liquidation Preference and
the liquidation preferences of the Series A Preferred Stock and all other series
of Preferred Stock, if any, which rank on a parity with the Series B Preferred
Stock, then such assets available for distribution shall be distributed ratably
to the holders of such parity shares in proportion to their respective
liquidation preferences.
Section 6. CONVERSION. The Corporation and the holders of the Series B
Preferred Stock shall have conversion rights as follows (the "Conversion
Rights"):
(A) RIGHT TO CONVERT. Subject to Section 6(C), each share of Series B
Preferred Stock shall be convertible, at the option of the holder thereof, at
any time after the six-month anniversary of the Purchase Date, at the office of
the Corporation or any transfer agent for such stock, into such number of fully
paid and nonassessable shares of Common Stock as is determined by dividing (i)
the sum of (a) the Original Issue Price plus (b) an amount in cash equal to
accrued and unpaid dividends and distributions on the shares to be converted
(whether or not declared) calculated by applying the then applicable Dividend
Rate to the Original Issue Price for the period beginning on, and including, the
last succeeding Dividend Payment Date to, but not including, the Conversion Date
(defined below) by (ii) the Series B Conversion Price (determined as hereafter
provided) (the "Conversion Rate") in effect on a Conversion Date; provided,
however, that if a Conversion Date occurs on or prior to the first-year
anniversary of the Purchase Date, then no more than one-half of the shares of
Series B Preferred Stock held by such holder on the Purchase Date shall be
convertible at the option of such holder on or prior to such first-year
anniversary. The Series B Conversion Price shall initially be $3.50.
(B) AUTOMATIC CONVERSION. Upon the date specified by written consent
or agreement of the holders of at least a majority of the then outstanding
shares of Series B Preferred Stock ("Automatic Conversion Date"), which date
shall not be earlier than the first anniversary of the Purchase Date, each share
of Series B Preferred Stock shall automatically be converted into shares of
Common Stock at the Conversion Rate.
(C) MECHANICS OF CONVERSION.
(i) Before any holder of Series B Preferred Stock shall be
entitled to convert the same into shares of Common Stock pursuant to Section
6(A) above, the holder shall surrender the certificate or certificates therefor,
duly endorsed, at the office of the Corporation or of any transfer agent for the
Series B Preferred Stock, and shall give written notice to the Corporation at
its principal corporate office, of the election to convert the same and shall
state
6
therein the name or names in which the certificate or certificates for shares of
Common Stock are to be issued. The Corporation shall, as soon as practicable
thereafter, issue and deliver at such office to such holder of Series B
Preferred Stock, or to the nominee or nominees of such holder, a certificate or
certificates for the number of shares of Common Stock to which such holder shall
be entitled as aforesaid. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of such surrender of the
shares of Series B Preferred Stock to be converted, and the person or persons
entitled to receive the shares of Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder or holders of such shares
of Common Stock as of such date (a "Conversion Date").
(ii) Upon the date specified by written consent or agreement of
the holders of at least a majority of the then outstanding shares of Series B
Preferred Stock pursuant to Section 6(B) above, the outstanding shares of Series
B Preferred Stock shall be converted automatically without any further action by
the holders of such shares and whether or not the certificates representing such
shares are surrendered to the Corporation or its transfer agent; PROVIDED,
HOWEVER, that the Corporation shall not be obligated to issue certificates
evidencing the shares of Common Stock issuable upon such conversion unless the
certificates evidencing such shares of Series B Preferred Stock are either
delivered to the Corporation or its transfer agent as provided below, or the
holder notifies the Corporation or its transfer agent that such certificates
have been lost, stolen or destroyed and executes an agreement satisfactory to
the Corporation to indemnify the Corporation from any loss incurred by it in
connection with such certificates. Upon the occurrence of such automatic
conversion of the Series B Preferred Stock, the holders of Series B Preferred
Stock shall surrender the certificates representing such shares at the principal
corporate office of the Corporation or any transfer agent for the Series B
Preferred Stock. Thereupon, there shall be issued and delivered to such holder
promptly at such office and in its name as shown on such surrendered certificate
or certificates, a certificate or certificates for the number of shares of
Common Stock into which the shares of Series B Preferred Stock surrendered were
convertible on the date on which such automatic conversion occurred.
(D) CONVERSION PRICE ADJUSTMENTS OF PREFERRED STOCK FOR CERTAIN SPLITS
AND COMBINATIONS. The Series B Conversion Price shall be subject to adjustment
from time to time as follows:
(i) In the event the Corporation should at any time or from time
to time after the Purchase Date fix a record date for the effectuation of a
split or subdivision of the outstanding shares of Common Stock or the
determination of holders of Common Stock entitled to receive a dividend or other
distribution payable in additional shares of Common Stock or other securities or
rights convertible into, or entitling the holder thereof to receive directly or
indirectly, additional shares of Common Stock (hereinafter referred to as
"Common Stock Equivalents") without payment of any consideration by such holder
for the additional shares of Common Stock or the Common Stock Equivalents
(including the additional shares of Common Stock issuable upon conversion or
exercise thereof), then, as of such record date (or the date of such dividend
distribution, split or subdivision if no record date is fixed), the Series B
Conversion Price shall be appropriately decreased so that the number of shares
of Common Stock issuable on conversion of each share of Series B Preferred Stock
shall be increased in proportion to such increase of the aggregate of shares of
Common Stock outstanding and those issuable with respect to such
7
Common Stock Equivalents with the number of shares issuable with respect to
Common Stock Equivalents determined from time to time.
(ii) If the number of shares of Common Stock outstanding at any
time after the Purchase Date is decreased by a combination of the outstanding
shares of Common Stock, then, following the record date of such combination, the
Series B Conversion Price shall be appropriately increased so that the number of
shares of Common Stock issuable on conversion of each share of such series shall
be decreased in proportion to such decrease in outstanding shares.
(iii) The following provisions shall apply for purposes of this
Section 6(D):
(a) The aggregate maximum number of shares of Common Stock
deliverable upon conversion or exercise of Common Stock Equivalents (assuming
the satisfaction of any conditions to convertibility or exercisability,
including, without limitation, the passage of time, but without taking into
account potential antidilution adjustments) shall be deemed to have been issued
at the time such Common Stock Equivalents were issued.
(b) In the event of any change in the number of shares of
Common Stock deliverable or in the consideration payable to the Corporation upon
conversion or exercise of such Common Stock Equivalents including, but not
limited to, a change resulting from the antidilution provisions thereof, the
Series B Conversion Price, to the extent in any way affected by or computed
using such Common Stock Equivalents, shall be recomputed to reflect such change,
but no further adjustment shall be made for the actual issuance of Common Stock
or any payment of such consideration upon the exercise of any such options or
rights or the conversion or exchange of such securities.
(c) Upon the termination or expiration of the convertibility
or exercisability of any such Common Stock Equivalents, the Series B Conversion
Price, to the extent in any way affected by or computed using such Common Stock
Equivalents, shall be recomputed to reflect the issuance of only the number of
shares of Common Stock (and Common Stock Equivalents which remain convertible or
exercisable) actually issued upon the conversion or exercise of such Common
Stock Equivalents.
Section 7. AMENDMENT. The Articles of Incorporation of the Corporation
(including this Certificate of Determination) shall not be further amended in
any manner which would materially alter or change the powers, preference or
special rights of the Series B Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of at least a majority of the then
outstanding shares of Series B Preferred Stock, voting separately as a class.
Section 8. FRACTIONAL SHARES. Series B Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series B Preferred Stock.
8
Section 9. RESERVATION OF CAPITAL STOCK. The Corporation shall at all
times reserve and keep available out of its authorized but unissued shares of
Series B Preferred Stock and Common Stock, solely for the purpose of effecting
the payment of Dividends and conversion of the shares of the Series B Preferred
Stock, respectively, such number of its shares of the Series B Preferred Stock
and Common Stock as shall from time to time be sufficient to effect the payment
of Dividends and conversion of all outstanding shares of Series B Preferred
Stock. If at any time the number of authorized but unissued shares of Series B
Preferred Stock shall not be sufficient to effect the payment of accrued but
unpaid Dividends, or the number of authorized but unissued shares of Common
Stock shall not be sufficient to effect the conversion of all then outstanding
shares of the Series B Preferred Stock, the Corporation will take such corporate
action as may, in the opinion of its counsel, be necessary to increase its
authorized but unissued shares of Series B Preferred Stock and/or Common Stock
to such number of shares as shall be sufficient for such purposes.
9
3. That the authorized number of shares of Preferred Stock of the
Corporation is 2,000,000 and the authorized number of shares of Series B
Preferred Stock is 225,000. None of the shares of Series B Preferred Stock has
been issued.
We further declare under penalty of perjury that the matters set forth in
the foregoing Certificate of Determination are true and correct of our own
knowledge.
Executed at Menlo Park, California on October 23, 2001.
/s/ GREGORY S. SKINNER
-------------------------------------
Gregory S. Skinner, Vice President of
Finance and Chief Financial Officer
/s/ GEOFFREY P. LEONARD
-------------------------------------
Geoffrey P. Leonard, Secretary
EX-4.1
4
a2061927zex-4_1.txt
EXHIBIT 4.1
EXHIBIT 4.1
LANDEC CORPORATION
SERIES B PREFERRED STOCK PURCHASE AGREEMENT
OCTOBER 24, 2001
LANDEC CORPORATION
SERIES B PREFERRED STOCK PURCHASE AGREEMENT
This Series B Preferred Stock Purchase Agreement (the "AGREEMENT") is
made as of October 24, 2001 by and between Landec Corporation, a California
corporation (the "COMPANY"), and Seahawk Ranch Irrevocable Trust (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 142,857 shares of Series B Preferred Stock, $0.001 par value
(the "SERIES B PREFERRED Stock") having the rights, preferences, privileges and
restrictions set forth in the Certificate of Determination of Rights,
Preferences and Privileges of Series B Preferred Stock attached to this
Agreement as EXHIBIT A (the "CERTIFICATE OF DETERMINATION"), and shall have
filed the Certificate of Determination with the California Secretary of State.
(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 142,857 shares of
Series B Preferred Stock at a purchase price of $35.00 per share. The shares
of Series B 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 October 24, 2001, 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:
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
1
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 B (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 Agreement, 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 made available to the
Purchaser all documents (other than preliminary materials) filed with the SEC
since January 1, 2000 (the "SEC DOCUMENTS"). As of their respective filing
dates, the 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,
2
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 29, 2001, 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 of
the Company; or (d) any declaration or payment of any dividend or other
distribution of assets of the Company.
2.7 NO CONFLICTS. The execution, delivery, and performance of
and compliance with this Agreement and the Standstill Agreement, and the
issuance and sale of the Stock pursuant hereto and of the Converted Common Stock
pursuant to the Certificate of Determination, are not prohibited by, and will
not violate or conflict with, any provision of the Articles of Incorporation or
Bylaws of the Company, or any provision of any contract to which the Company is
a party, except where any of the foregoing would not have, individually or in
the aggregate, a material adverse effect on the Company.
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 action on the part of the Purchaser
and, when executed and delivered by the Purchaser, will constitute valid and
legally binding obligations of the 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.
3.2 PURCHASE ENTIRELY FOR OWN ACCOUNT. This Agreement is made
with the Purchaser in reliance upon the Purchaser's representation to the
Company, which by the Purchaser's execution of this Agreement, the Purchaser
hereby confirms, that the Securities to be acquired by the Purchaser will be
acquired for investment for the Purchaser's own account, not as a nominee or
agent for any person or entity and not with a view to the resale or distribution
of
3
any part thereof, and that the Purchaser has no present intention of selling,
granting any participation in, or otherwise distributing the same. By executing
this Agreement, the Purchaser further represents that the Purchaser does not
presently have any contract, undertaking, agreement or arrangement with any
person or entity to sell, transfer or grant participations to such person or to
any third person, with respect to any of the Securities. The Purchaser
represents that it has full power and authority to enter into this Agreement.
3.3 DISCLOSURE OF INFORMATION. The 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. The 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. The 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 the Purchaser's representations as expressed herein. The
Purchaser understands that the Securities are "restricted securities" under
applicable U.S. federal and state securities laws and that, pursuant to these
laws, the 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. The 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 the Purchaser's
control, and which the Company may not be able to satisfy.
3.5 LEGENDS. The 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 (THE "ACT"), 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 UNLESS:
(I) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO,
(II) THERE IS AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT
SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT, OR (III) THE SHARES ARE SOLD
PURSUANT TO RULE 144 PROMULGATED UNDER THE ACT."
(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. The Purchaser is an accredited
investor as defined in Rule 501(a) of Regulation D promulgated under the
Securities Act.
4
4. REGISTRATION REQUIREMENTS.
4.1 SHELF REGISTRATION. The Company shall use its best 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 ninety (90) days after the date the Purchaser notifies the Company of
its intent to convert all or a portion of the Stock (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 its best efforts to
cause the Shelf Registration to become effective under the Securities Act not
later than one hundred twenty (120) days after the Conversion Date (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 best
efforts to keep the Shelf Registration continuously effective and in compliance
with the Securities Act until the earlier of (i) such date as all of the
Converted Common Stock have been resold, or (ii) all of the Converted Common
Stock may be sold under Rule 144 under the Securities Act ("RULE 144") during
any ninety (90) day 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
the Purchaser's compliance with its 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 4, 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 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
5
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 the 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.
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 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
6
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 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) The Purchaser 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. Notwithstanding
the foregoing, the liability of the Purchaser under this Section 4.6(b) shall be
limited to an amount equal to the net proceeds from the sale of the shares sold
by the Purchaser.
7
(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 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
8
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.
4.8 TRANSFER OF REGISTRATION RIGHTS. The rights to cause the
Company to register the Converted Common Stock under this Section 4 may be
assigned to a transferee or assignee that is an affiliate (as such term is
defined in Rule 405 of the Securities Act) of the Purchaser provided that: (i)
such transfer is otherwise effected in accordance with applicable securities
laws, (ii) written notice is promptly given to the Company and (iii) such
transferee agrees to be bound by the provisions of this Agreement.
5. COVENANTS OF THE COMPANY.
5.1 THE PURCHASER'S FILINGS. The Company shall use its
reasonable commercial efforts to assist the Purchaser and its affiliates in
preparing and filing all reports required by the Purchaser and its affiliates
under the Exchange Act as a result of the transactions under this Agreement,
including Schedule 13D and Form 4, and shall bear all of the expenses relating
to the preparation and filing of such reports.
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.
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
9
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 C.
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 the Standstill Agreement between the Company and
the Purchaser in the form attached hereto as EXHIBIT B.
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 the 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.
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 the Standstill Agreement between the Company and
the Purchaser.
10
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 four
(4) years 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.
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
the address set forth on the signature page hereof, 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: 650-614-7401
Attn: Geoffrey P. Leonard
11
or (b) if to the Purchaser, with a copy to:
Cooley Godward LLP
Five Palo Alto Square
3000 El Camino Real
Palo Alto, CA 94306
Direct: (650) 843-5191
Fax: (650) 849-7400
Attn: Brett White
8.7 FINDER'S FEE. 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.
8.8 FEES AND EXPENSES. Each party shall pay its own fees and
expenses irrespective of whether the Closing occurs; provided, however, that in
the event the Closing occurs, the Company shall pay the legal fees and expenses
incurred by the Purchaser in connection with the transactions under this
Agreement, such fees and expenses not to exceed $10,000.
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.
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 (calculated on an as-if-converted basis).
Any amendment or waiver effected in accordance with this Section 8.10 shall be
binding upon the Purchaser and each transferee of the Stock (or the Converted
Common Stock), 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
12
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]
13
The parties have executed this Series B 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:
SEAHAWK RANCH IRREVOCABLE TRUST
By: /s/ KENNETH E. JONES
------------------------------------
Kenneth E. Jones, Trustee
Address: 550 Pilgrim Drive, Suite F
Foster City, CA 94404
SIGNATURE PAGE TO PURCHASE AGREEMENT
EX-99.1
5
a2061927zex-99_1.txt
EXHIBIT 99.1
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
CONTACT INFORMATION:
AT THE COMPANY: FINANCIAL RELATIONS BOARD/BSMG:
Gregory S. Skinner Pamela Roberts or Liz Saghi
Vice President Finance and CFO (415) 986-1591
(650) 306-1650
LANDEC CORPORATION ISSUES $5.0 MILLION OF
PREFERRED STOCK
MENLO PARK, CA - October 25, 2001 -- Landec Corporation (Nasdaq: LNDC),
a developer and marketer of technology-based polymer products for food,
agricultural and licensed partner applications, announced today a private
placement of $5 million of Series B Preferred Stock to the Seahawk Ranch
Irrevocable Trust of Foster City, California, effective October 24, 2001.
Mr. Kenneth E. Jones, a director of Landec Corporation, is one of the
trustees of the Seahawk Ranch Irrevocable Trust. The Series B Preferred Stock
is convertible into Common Stock at $3.50 per share, approximately the
average price of Landec's Common Stock for the five days prior to the close.
The Series B Preferred Stock earns cumulative dividends payable in
additional shares of Series B Preferred Stock at an annual rate of eight
percent (8%) for the first two years, ten percent (10%) for the third year
and twelve percent (12%) thereafter. The Series B Preferred Stock may be
redeemed by Landec Corporation at any time for the original purchase price
plus all accrued and unpaid dividends.
One half of the Series B Preferred Stock is convertible at any time into
Common Stock at the option of the holder after the six-month anniversary of
the closing. All of the Series B Preferred Stock is convertible at the
holder's option after one-year from the closing date. If shares are
converted under the agreement, the Company has agreed to use its best efforts
to prepare and file with the Securities and Exchange Commission a
Registration Statement under the Securities Act covering the converted Common
Stock within ninety (90) days after the date the holder notifies the Company
of its intent to convert all or a portion of the Series B Preferred Stock.
The Company intends to use the proceeds from this issuance to pay down
bank debt, fund short-term working capital needs and help fund the expansion
of the Company's value-added fresh-cut business.
Gary Steele, Landec's CEO stated, "Landec's plan for strengthening its
balance sheet is focused on generating positive cash flow from operations
during fiscal year 2002 and selling selective non-strategic assets. Given
the reality of recent global events, we expect that the sale of non-strategic
assets will take longer than originally anticipated. The trustees of the
Seahawk Ranch Irrevocable Trust are showing their confidence in Landec's
future by providing bridge financing for the period of time we will need to
achieve our objectives."
The shares of Series B Preferred Stock and underlying Common Stock have
not been and will not be registered under the Securities Act of 1933 and may
not be offered or sold in the United States absent registration or an
applicable exemption from registration requirements.
ABOUT LANDEC CORPORATION
Landec Corporation designs, develops, manufactures and sells
temperature-activated and other specialty polymer products for a variety of
food, agricultural and licensed partner applications. The Company's
temperature-activated polymer products are based on its proprietary
Intelimer(R) polymers which differ from other polymers in that they can be
customized to abruptly change their physical characteristics when heated or
cooled through a pre-set temperature switch.
2