<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
ECOSCIENCE CORPORATION
(Name of the Issuer)
Common Stock
(Title of Class of Securities)
279218 20 0
(CUSIP Number)
Robert B. Vernon
McGuire, Woods, Battle & Boothe LLP
Bank of America Corporate Center, Suite 2900
100 North Tryon Street
Charlotte, NC 28202
(704) 373-8850
(Name, address and Telephone Number of Persons
Authorized to Receive Notice and Communications)
December 30, 1998
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b) (3) or (4), check the following
box: [ ]
Check the following box if a fee is being paid with the statement: [ ]
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 (the "Act") or otherwise subject to the liabilities of that section
of the Act but shall be subject to all other provisions of the Act.
The total number of shares reported herein is 1,000,000 shares, which
constitutes approximately 7.9% of the total number of shares outstanding. All
ownership percentages set forth herein are based upon 12,619,264 shares of
Common Stock issued and outstanding as of March 12, 1999.
<PAGE> 2
SCHEDULE 13D
CUSIP No. 279218 20 0
1. Name of Reporting Person; S.S. or I.R.S. Identification No. of Above
Person
Cogentrix Delaware Holdings, Inc. 51-0352024
2. Check the Appropriate Box if a Member of a Group
(a) [x]
(b) [ ]
3. SEC Use Only
4. Source of Funds
OO
5. Check Box if Disclosure of Legal Proceedings is Required to Items 2(d)
or 2(e) [ ]
6. Citizenship or Place of Organization
Delaware
Number of Shares Beneficially Owned By Each Reporting Person With
7. Sole Voting Power
1,000,000
8. Shared Voting Power
0
9. Sole Dispositive Power
1,000,000
10. Shared Dispositive Power
0
11. Aggregate Amount Beneficially Owned by Each Reporting Person
1,000,000
12. Check Box if the Aggregate Amount in Row 11 Excludes Certain Shares [ ]
13. Percent of Class Represented by Amount in Row 11
7.9%
14. Type of Reporting Person
CO
<PAGE> 3
SCHEDULE 13D
CUSIP No. 279218 20 0
1. Name of Reporting Person; S.S. or I.R.S. Identification No. of Above
Person
Cogentrix Energy, Inc. 56-1853081
2. Check the Appropriate Box if a Member of a Group
(a) [x]
(b) [ ]
3. SEC Use Only
4. Source of Funds
OO
5. Check Box if Disclosure of Legal Proceedings is Required to Items 2(d)
or 2(e) [ ]
6. Citizenship or Place of Organization
North Carolina
Number of Shares Beneficially Owned By Each Reporting Person With
7. Sole Voting Power
1,000,000 (1)
8. Shared Voting Power
0
9. Sole Dispositive Power
1,000,000 (1)
10. Shared Dispositive Power
0
11. Aggregate Amount Beneficially Owned by Each Reporting Person
1,000,000 (1)
12. Check Box if the Aggregate Amount in Row 11 Excludes Certain Shares [ ]
13. Percent of Class Represented by Amount in Row 11
7.9%
14. Type of Reporting Person
CO
<PAGE> 4
(1) Consists of 1,000,000 shares owned beneficially through
Cogentrix Delaware Holdings, Inc. Cogentrix Energy, Inc. owns
100% of the voting securities of Cogentrix Delaware Holdings,
Inc.
<PAGE> 5
ITEM 1. SECURITY AND ISSUER
Pursuant to Rule 13d-1 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), the undersigned hereby file their Schedule 13D
relating to the common stock, $0.01 par value per share (the "Common Stock"), of
EcoScience Corporation, a Delaware corporation (the "Company"), whose principal
executive offices are located at 10 Alvin Court, East Brunswick, New Jersey
08816.
Pursuant to Rule 13d-4 of the Exchange Act Rules, the Reporting Persons
expressly declare that the filing of this statement shall not be construed as an
admission that the Reporting Persons are, for the purposes of Section 13(d) of
the Act, the beneficial owner of any securities covered by this statement.
ITEM 2. IDENTITY AND BACKGROUND
(a)-(c) This statement is filed by (i) Cogentrix Delaware Holdings, Inc., a
Delaware corporation ("CDH"), with respect to shares of Common Stock
beneficially owned by it and (ii) Cogentrix Energy, Inc., a North Carolina
corporation ("Energy"), with respect to shares of Common Stock beneficially
owned by Energy and CDH. Energy is the sole shareholder of CDH. The foregoing
persons are hereinafter sometimes referred to collectively as the "Reporting
Persons."
<PAGE> 6
Each Reporting Person's present principal occupation or employment, and
the name, principal business and address of any corporation or other
organization in which such employment is conducted, is as follows:
<TABLE>
<CAPTION>
Present Principal Occupation or
Name Principal Business Address business
- -------------------------------- ------------------------------------- ---------------------------------
<S> <C> <C>
Cogentrix Energy, Inc., a North Cogentrix Energy, Inc. Acquiring, developing, owning
Carolina corporation 9405 Arrowpoint Boulevard and operating electric
Charlotte, NC 28273-8110 generating facilities
Cogentrix Delaware Holdings, Cogentrix Delaware Holdings, Inc. Holding company which owns
Inc., a Delaware corporation 1105 North Market Street, Suite 1108 shares of project developments
Wilmington, DE 19801 and operating companies
</TABLE>
(d) During the past five years, none of the persons referred to in paragraphs
(a)-(c) above has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors).
(e) During the last five years, none of the persons referred to in paragraphs
(a)-(c) above has been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The Common Stock was acquired as part of the consideration for the sale
by CDH to the Company of five corporations holding partnership interests in four
greenhouses. The shares were valued at $4,2500,000 based on the closing price on
December 30, 1998.
<PAGE> 7
ITEM 4. PURPOSE OF THE TRANSACTION
On December 7, 1998, CDH and the Company entered into a Stock Purchase
Agreement for the sale by CDH to the Company of five companies holding
partnership interests in four greenhouses. On December 30, 1998, CDH received
1,000,000 shares of Common Stock as part of the consideration for the sale.
The Reporting Persons acquired the shares of Common Stock for
investment purposes, and the Reporting Persons intend to evaluate the
performance of such securities as an investment in the ordinary course of
business.
Each Reporting Person will continuously assess the Company's business
financial condition, results of operations and prospects, general economic
conditions, the securities market in general and those for the Company's
securities in particular, other developments and other investment opportunities.
Depending on such assessments, one or more of the Reporting Persons may acquire
additional shares of Common Stock or may determine to sell or otherwise dispose
of all or some if its holdings of shares of Common Stock. Such actions will
depend upon a variety of factors, including, without limitation, current and
anticipated future trading prices for such Common Stock, the financial
condition, results of operations and prospects of the Company, alternate
investment opportunities, and general economic, financial market and industry
conditions.
The Reporting Persons have no other plans or proposals that relate to,
or could result in, any of the matters referred to in paragraphs (a) through
(j), inclusive, of Item 4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) As of the close of business on March 15, 1999, the Reporting
Persons, as a group, beneficially owned, as that term is defined in Rule 13d-3
under the Act, 1,000,000 shares of Common Stock, constituting 7.9% of the
outstanding Common Stock. The total number of shares of Common Stock outstanding
was 12,619,264 as of March 12, 1999, as reflected in the Company's amended
quarterly report on Form 10-Q/A filed as of March 18, 1999 with the Securities
and Exchange Commission for the fiscal quarter ended September 30, 1998.
<PAGE> 8
(b) The ownership of each non-individual Reporting Person is as
follows:
<TABLE>
<CAPTION>
Percent
Reporting Person Ownership
- ---------------- ---------
<S> <C>
CDH
Energy 100%
-------
100%
</TABLE>
The direct and indirect Common Stock ownership of each Reporting
Person, and the power to vote and dispose of the Common Stock, is as follows:
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Name Common Stock Common Stock Held
Held Directly Indirectly through
(1) CDH
- --------------- ------------- -------------------
<S> <C> <C>
CDH 1,000,000 --
- ----------------------------------------------------------
- ----------------------------------------------------------
Energy -- 1,000,000
- ----------------------------------------------------------
- ----------------------------------------------------------
</TABLE>
(1) Holdings has the sole power to vote and dispose of the Common
Stock. The senior management of Energy controls the investment
decisions by Holdings.
(c) No other transactions by the Reporting Persons have ever been
effected in the class of securities reported in the Schedule 13D.
(d) No person, other than the Reporting Persons, is known to have the
right to receive or the power to direct the receipt of dividends or
proceeds from the sale of the shares of Common Stock held by the
Reporting Persons.
(e) Not applicable.
<PAGE> 9
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER
CDH and the Company entered into a Stock Purchase Agreement dated as of
December 7, 1998 whereby CDH acquired 1,000,000 shares of restricted Common
Stock. Pursuant to the Stock Purchase Agreement, CDH must have the Company's
consent to sell or otherwise transfer the acquired Common Stock before September
30, 1999. CDH may sell up to 250,000 shares after April 1, 1999 and up to
500,000 shares after June 30, 1999 without the consent of the Company, provided
CDH gives the Company seven days prior written notice of its intention to sell
100,000 or more shares in a single transaction. CDH may sell any number of
shares if a promissory note from the Company to CDH is not paid in full when
due. As a further inducement to CDH, the Company provided a Registration Rights
Agreement for the CDH shares dated as of December 30, 1998, as amended as of
March 11, 1999, whereby the Company is obligated to register the shares for
resale by June 15, 1999.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 99.1. Stock Purchase Agreement between CDH and the Company dated as of
December 7, 1998. (Exhibit C - Form of Registration Rights Agreement was
intentionally omitted and the executed Registration Rights Agreement is filed
herewith as Exhibit 99.2)
Exhibit 99.2. Registration Rights Agreement between CDH and the Company dated as
of December 30, 1998.
Exhibit 99.3. First Amendment to Registration Rights Agreement between CDH and
the Company dated as of March 11, 1999.
<PAGE> 10
SIGNATURE
After reasonable inquiry and to the best of the undersigned's knowledge
and belief, each of the undersigned certifies that the information set forth in
this statement is true, complete and correct.
COGENTRIX DELAWARE HOLDINGS, INC.
By:/s/ THOMAS F. SCHWARTZ March 29, 1999
-------------------------------------
Thomas F. Schwartz
Senior Vice President - Finance and Treasurer
COGENTRIX ENERGY, INC.
By:/s/ THOMAS F. SCHWARTZ March 29, 1999
-------------------------------------
Thomas F. Schwartz
Senior Vice President - Finance and Treasurer
<PAGE> 1
EXHIBIT 99-1
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT dated as of December 7, 1998, is
made by and among COGENTRIX DELAWARE HOLDINGS, INC., a Delaware corporation,
having its principal place of business at 1105 North Market Street, Suite 1108,
Wilmington, DE 19801 ("Seller"), and ECOSCIENCE CORPORATION, a Delaware
corporation, having its principal place of business at 10 Alvin Court, East
Brunswick, New Jersey 08816 (the "Purchaser").
WHEREAS, Seller owns all of the outstanding shares (the "Shares")
of common stock, of COGENTRIX OF BUFFALO, INC. ("CBI"), COGENTRIX OF FORT DAVIS
I, INC., ("CFDI") COGENTRIX GREENHOUSE INVESTMENTS, INC, ("CGI"), COGENTRIX OF
MARFA, INC., ("CMI") and COGENTRIX OF POCONO, INC., ("CPI"), each Delaware
corporations (each of CBI, CFDI, CGI, CMI and CDI are referred to herein as a
"Company" and collectively as the "Companies"), and Seller wishes to sell to
Purchaser, and Purchaser wishes to purchase from Seller, the Shares upon the
terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the representations,
warranties and agreements herein contained, the parties agree as follows:
1. Sale of the Shares. Upon the terms and subject to the
conditions set forth in this Agreement, at the Closing, Seller will sell,
transfer and deliver to Purchaser, and Purchaser will purchase from Seller, the
Shares for the Purchase Price (as defined in Section 3(a)).
2. Conditions to the Closing. The obligation of Seller to sell
the Shares to Purchaser, and Purchaser's obligation to purchase the Shares, are
subject to the satisfaction at the time of the Closing of the following
conditions (any or all of which may be waived by either party in its sole
discretion):
(a) Each of the representations of the other party
hereto made in this Agreement shall be true and correct as of the
date of this Agreement and as of the time of the Closing as
though made as of such time and the other party shall have
performed each and every covenant contained in this Agreement
required to be performed by such party by the time of the
Closing.
(b) The parties shall have executed and/or
delivered the items required to be delivered under Section 3
hereof.
(c) The applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(the "HSR Act") shall have expired or been earlier terminated
without action by the Justice Department or the Federal Trade
Commission to prevent consummation of the transactions
contemplated by this Agreement.
<PAGE> 2
(d) Purchaser shall have received all the consents
listed on Schedule 2(d) (the "Required Consents").
(e) Cogentrix Energy, Inc. ("Cogentrix") shall have
assigned and contributed to CGI that certain promissory note of
APD in the face amount of $643,197.16, Village Farms of Texas,
L.P. shall have cancelled that certain promissory note (the "CGX
Note") of Cogentrix in the face amount of $1,838,420.47 and CGI
shall have issued to Village Farms of Texas L.P. a promissory
note in the amount of $1,838,420.47 (the "CGI Note") dated the
date of, and bearing interest at the same rate as, the CGX Note.
3. Closing.
(a) The closing (the "Closing") of the purchase and
sale of the Shares shall be held on December 31, 1998 at the
office of Fennebresque, Clark, Swindell & Hay, 100 North Tryon,
Suite 2900, Charlotte, North Carolina 28202, or at such other
time and place as Purchaser and Seller may agree. At the Closing,
Purchaser will deliver to Seller an executed promissory note (the
"Note") payable to Seller in the principal amount equal to Twenty
Million, Six Hundred Thousand and No/100 Dollars ($20,600,000),
substantially in the form attached hereto as Exhibit A, and
Seller shall deliver to Purchaser certificates representing the
Shares, duly endorsed in blank or accompanied by stock powers
duly executed by Seller in blank, in proper form for transfer. At
the Closing, Purchaser shall deliver to Seller a certificate, or
certificates, representing One Million (1,000,000) shares (the
"Stock Consideration") of common stock, $.01 par value, of
Purchaser, registered in the name of Seller, or to an affiliate
of Seller as Seller may direct. The Note and the Stock
Consideration shall constitute the "Purchase Price".
(b) At the Closing, Seller shall deliver to
Purchaser the resignations by all officers and directors of the
Companies and the corporate minute books, stock records, bylaws
and articles or certificates of incorporation of each of the
Companies.
(c) At the Closing, Purchaser and Seller shall
deliver to each other executed counterparts of (i) a Stock Pledge
Agreement (the "Stock Pledge"), substantially in the form
attached hereto as Exhibit B, whereby the Purchaser will pledge
the Shares and all of the shares of common stock of Agro Power
Development, Inc. (the "APD Shares") as collateral for the Note,
(ii) the Registration Rights Agreement (the "Rights Agreement")
in the Form of Exhibit C hereto and (iii) a termination agreement
in mutually agreeable form terminating the Agreement Regarding
Future Projects, dated as of February 6, 1996 between Cogentrix
Energy, Inc. and Agro Power Development, Inc.
(d) At the Closing, Purchaser shall also deliver to
Seller certificates representing the Shares and the APD Shares as
required by the Stock Pledge.
4. Representations and Warranties of Seller. Seller hereby
represents and warrants to Purchaser as follows:
(a) Organization and Authority of the Seller. The
Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware
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<PAGE> 3
and has all necessary corporate power and authority to enter into
this Agreement, to carry out its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby
and thereby. The execution and delivery of this Agreement, the
Stock Pledge and the Rights Agreement by the Seller, the
performance by the Seller of its obligations hereunder and
thereunder and the consummation by the Seller of the transactions
contemplated hereby and thereby have been duly authorized by all
requisite action on the part of the Seller. This Agreement, the
Stock Pledge and the Rights Agreement have been duly executed and
delivered by the Seller, and (assuming due authorization,
execution and delivery by the Purchaser) each of this Agreement,
the Stock Pledge and the Rights Agreement constitutes a valid and
binding obligation of the Seller enforceable against the Seller
in accordance with its terms.
(b) No Conflict. Assuming compliance with the
notification requirements of the HSR Act, except as may result
from any facts or circumstances relating solely to the Purchaser,
the execution, delivery and performance of this Agreement and the
Stock Pledge by the Seller do not and will not (a) violate,
conflict with or result in the breach of any provision of the
Certificate of Incorporation or By-laws of the Seller or any
Company, (b) conflict with or violate any law or governmental
order applicable to the Seller or any Company or (c) conflict
with, or result in any breach of, constitute a default (or event
which with the giving of notice or lapse or time, or both, would
become a default) under, require any consent under, or give to
others any rights of termination, amendment, acceleration,
suspension, revocation, or cancellation of, or result in the
creation of any encumbrance on any of the assets or properties of
the Seller or any Company pursuant to, any note, bond, mortgage
or indenture, contract, agreement, lease, sublease, license,
permit, franchise or other instrument or arrangement to which the
Seller or any Company is a party or by which any of such assets
or properties are bound or affected which would have a material
adverse effect on the ability of the Seller to consummate the
transactions contemplated by this Agreement or would have a
material adverse affect on the value of the Shares.
(c) Governmental Consents and Approvals. The
execution, delivery and performance of this Agreement, the Stock
Pledge and the Rights Agreement by the Seller do not and will not
require any consent, approval, authorization or other order of,
action by, filing with, or notification to, any governmental
authority, except (a) as described in a writing given to the
Purchaser by the Seller on the date of this Agreement and (b) the
notification requirements of the HSR Act.
(d) Title. Seller has legal and beneficial
ownership of the Shares, and good and marketable title to the
Shares, free and clear of all liens, claims, charges and
encumbrances.
(e) Economic Risk. Seller acknowledges and
understands that the shares constituting the Stock Consideration
to be received by it have not been registered under the
Securities Act of 1933 (the "Securities Act"), or any state
securities or blue sky laws and, therefore, cannot be resold
unless such shares are registered under the Securities Act and
under any applicable state securities or blue sky laws or unless
an exemption from registration thereunder is available. Seller is
acquiring the Stock Consideration for its
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<PAGE> 4
own account for investment, and not with a view to, or for resale
in connection with, the distribution thereof, and has no present
intention of distributing or reselling any of the Stock
Consideration. In making the foregoing representation, Seller is
aware that it must bear, and it is able to bear, the economic
risk of such investment for an indefinite period of time.
(f) Capitalization of the Companies. The Shares
represent all of the capital stock of the Companies which are
issued and outstanding. All of the Shares have been duly
authorized and are validly issued, fully paid and non-assessable.
There are no outstanding options, warrants, rights, calls,
commitments, conversion rights, plans or other agreements of any
character providing for the purchase or issuance of any capital
stock or other securities of the Companies.
(g) No Other Business or Assets. Except for the
ownership of partnership interests (the "Partnership Interests")
in Village Farms of Buffalo, L.P., Village Farms of Texas, L.P.,
Village Farms of Marfa, L.P. and Pocono Village Farms, L.P. (each
a "Partnership" and collectively, the "Partnerships"), none of
the Companies has conducted any active business or held any other
assets. Except for the agreements of limited partnership which
govern the Partnerships, none of the Companies is a party to any
agreement. None of the Companies owns an interest in any
subsidiaries.
(h) Title to Partnership Interests. The Companies
have legal and beneficial ownership of the Partnership Interests,
free and clear of all liens, claims, charges and encumbrances
(collectively, "Liens") other than Liens related to indebtedness
of the Partnerships.
(i) No Litigation; Compliance with Laws. There are
no actions, lawsuits, claims or proceedings pending, or to the
knowledge of Seller, threatened against or affecting the
Companies in any court or before any arbitrator or governmental
agency, domestic or foreign. Each of the Companies has conducted
its activities in compliance in all material respects with all
applicable laws and governmental regulations.
(j) Absence of Liabilities. Except for obligations
to the Partnerships and the other partners of the Partnerships
that may exist under the respective agreements of limited
partnerships which govern the Partnerships, none of the Companies
has any material debts, liabilities or obligations of any kind,
whether accrued, absolute, contingent or otherwise, including,
without limitation, any liability or obligation on account of
taxes or any governmental charges or penalty, interest or fines.
(k) Tax Matters. Each of the Companies has filed
all tax returns that it was required to file. All such tax
returns were correct and complete in all material respects. All
taxes owed by each of the Companies have been paid and none of
the Companies has any additional liability for taxes.
(l) Corporate Records. The copies of the stock
records, corporate minutes, by-laws and articles of incorporation
of the Companies which shall be delivered at the Closing will be
true, correct and complete.
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<PAGE> 5
(m) Organization of Companies. Each of the
Companies is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware. Each of
the Companies is qualified to do business in each state in which
it is required to be so qualified, except where the failure to be
so qualified would have a material adverse effect.
(n) Knowledge and Experience of Seller. Seller has
such knowledge and experience in financial and business matters
that Seller is capable of evaluating the merits and risks of an
acquisition of the Stock Consideration to be received by Seller.
Seller has been given the opportunity to ask questions of, and
receive answers from Purchaser concerning the terms and
conditions of the Stock Consideration to be acquired by it and
other matters pertaining to an investment in the Purchaser, and
has been given the opportunity to obtain such additional
information in order for Seller to evaluate the merits and risks
of an acquisition of the Stock Consideration to be received by
Seller to the extent Purchaser possesses such information or can
acquire it without unreasonable effort or expense. Seller
understands and has evaluated the merits and risks of the
acquisition of the Stock Consideration.
(o) Reliance. Seller acknowledges that Purchaser is
entering into this Agreement in reliance upon Seller's
representations and warranties in this Agreement.
5. Representations and Warranties of Purchaser. Purchaser hereby
represents and warrants to Seller as follows:
(a) Organization and Authority of the Purchaser.
The Purchaser is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and
has all necessary corporate power and authority to enter into
this Agreement, the Stock Pledge and the Rights Agreement and to
issue the Note, to carry out its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby
and thereby. The execution and delivery of this Agreement, the
Stock Pledge and the Rights Agreement and the issuance of the
Note by the Purchaser, the performance by the Purchaser of its
obligations hereunder and thereunder and the consummation by the
Purchaser of the transactions contemplated hereby and thereby
have been duly authorized by all requisite action on the part of
the Purchaser. This Agreement, the Stock Pledge, the Rights
Agreement and the Note have been duly executed and delivered by
the Purchaser, and (assuming due authorization, execution and
delivery by the Seller) each of this Agreement, the Stock Pledge,
the Rights Agreement and the Note constitutes a valid and binding
obligation of the Purchaser enforceable against the Purchaser in
accordance with its terms.
(b) No Conflict. Assuming compliance with the
notification requirements of the HSR Act, except as may result
from any facts or circumstances relating solely to the Seller,
the execution, delivery and performance of this Agreement, the
Stock Pledge and the Rights Agreement and the issuance of the
Note by the Purchaser do not and will not except for the Required
Consents (a) violate, conflict with or result in the breach of
any provision of the Certificate of Incorporation or By-laws of
the Purchaser, (b) conflict with or violate any law or
governmental order applicable to the Purchaser or (c) conflict
- 5 -
<PAGE> 6
with, or result in any breach of, constitute a default (or event
which with the giving of notice or lapse or time, or both, would
become a default) under, require any consent under, or give to
others any rights of termination, amendment, acceleration,
suspension, revocation, or cancellation of, or result in the
creation of any encumbrance on any of the assets or properties of
the Purchaser pursuant to, any note, bond, mortgage or indenture,
contract, agreement, lease, sublease, license, permit, franchise
or other instrument or arrangement to which the Purchaser is a
party or by which any of such assets or properties are bound or
affected which would have a material adverse effect on the
ability of the Purchaser to consummate the transactions
contemplated by this Agreement.
(c) Governmental Consents and Approvals. The
execution, delivery and performance of this Agreement, the Stock
Pledge and the Rights Agreement and the issuance of the Note by
the Purchaser do not and will not require any consent, approval,
authorization or other order of, action by, filing with, or
notification to, any governmental authority, except (a) as
described in a writing given to the Seller by the Purchaser on
the date of this Agreement and (b) the notification requirements
of the HSR Act.
(d) Knowledge and Experience of Purchaser.
Purchaser has such knowledge and experience in financial and
business matters that Purchaser is capable of evaluating the
merits and risks of a purchase of the Shares to be purchased by
Purchaser. Purchaser has been given the opportunity to ask
questions of, and receive answers from, Seller and the Companies
concerning the terms and conditions of the Shares to be purchased
by it and other matters pertaining to an investment in the
Companies, and has been given the opportunity to obtain such
additional information in order for Purchaser to evaluate the
merits and risks of a purchase of the Shares to be purchased by
Purchaser to the extent Seller and the Companies possess such
information or can acquire it without unreasonable effort or
expense. Purchaser understands and has evaluated the merits and
risks of the purchase of the Shares.
(e) Economic Risk. Purchaser acknowledges and
understands that the Shares to be purchased by it have not been
registered under the Securities Act, or any state securities or
blue sky laws and, therefore, cannot be resold unless such Shares
are registered under the Securities Act and under any applicable
state securities or blue sky laws or unless an exemption from
registration thereunder is available. Purchaser is acquiring the
Shares to be purchased by it for its own account for investment,
and not with a view to, or for resale in connection with, the
distribution thereof, and has no present intention of
distributing or reselling any of the Shares. In making the
foregoing representation, Purchaser is aware that it must bear,
and it is able to bear, the economic risk of such investment for
an indefinite period of time.
(f) Public Documents. The Purchaser has heretofore
delivered to the Seller, true, complete and accurate copies of
the Purchaser's Annual Report on Form 10-K for the year ended
June 30, 1998 (the "Form 10-K"), a Quarterly Report on Form 10-Q
for the quarter ended September 30, 1998, Current Reports on Form
8-K filed since July 1, 1998, the Purchaser's proxy statement
relating to its special meeting in lieu of the 1997 annual
meeting of its shareholders and all other reports or documents
required to be filed
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<PAGE> 7
by the Purchaser pursuant to Section 13(a) or 15(d) of the
Exchange Act since the filing of the most recent quarterly report
on Form 10-Q (collectively, including all the financial
statements contained therein, the "Disclosure Documents"). The
Disclosure Documents have been prepared, filed and comply in all
material respects in accordance with the rules and regulations
promulgated by the Securities and Exchange Commission (the
"Commission") and as of the date of this Agreement, no additional
filing or amendment to any previous filing is required under such
rules and regulations. The Form 10-K fairly summarizes the
assets, properties, business, operations and management of the
Purchaser and its Subsidiaries as of the date thereof. The
Disclosure Documents, as of the case may be, did not contain any
misstatements of a material fact or omit to state a material fact
necessary to make the statements contained therein, in the light
of the circumstances under which they were made, not misleading.
(g) Financial Statements. The audited consolidated
financial statements (including the notes thereto) of the
Purchaser and its Subsidiaries set forth in the Form 10-K fairly
present the consolidated financial position of the Purchaser and
its Subsidiaries as of the respective dates thereof and the
results of operations and cash flow for the respective periods
covered thereby in accordance with GAAP (except as specifically
noted therein). The unaudited consolidated financial statements
included in each Form 10-Q, fairly present in all material
respects (subject to normal year-end audit adjustments) the
consolidated financial position of the Purchaser and its
Subsidiaries for the respective periods covered thereby in
accordance with GAAP applied on a consistent basis (other than
the footnote disclosure included therewith). Since September 30,
1998, there have been no changes in the Purchaser's method of
accounting for tax purposes or any other purposes. The financial
statements of the Purchaser as of September 30, 1998, included in
the Disclosure Documents disclose all liabilities of the
Purchaser required to be disclosed therein and contained adequate
reserves for taxes and all other material accrued liabilities as
on the date thereof.
(h) Reliance. Purchaser acknowledges that Seller is
entering into this Agreement in reliance upon Purchaser's
representations and warranties in this Agreement.
6. No Brokers. Seller and Purchaser each represent to the other
that no agent, broker or other firm or person is or will be entitled to any
broker's or finder's fees or any other commission or similar fee in connection
with the purchase and sale of the Shares contemplated by this Agreement and
respectively agree to indemnify and hold the other harmless from and against any
and all claims, liabilities or obligations with respect to any such fees,
commissions or expenses asserted by any person on the basis of any act or
statement alleged to have occurred or been made by such party.
7. Survival of Representations and Covenants. All representations
and warranties made by the parties to this Agreement shall survive the Closing
for a period of one year after the Closing hereunder.
8. Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by either party without the
prior written consent of the other party.
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<PAGE> 8
Subject to the preceding sentence, this Agreement will be binding upon, inure to
the benefit of and be enforceable by the parties and their respective heirs,
personal representatives, successors and permitted assigns. Any purported
assignment in violation of the foregoing shall be void.
9. General Provisions.
(a) Specific Performance. The parties hereto
acknowledge that damages would be an inadequate remedy for any
breach of the provisions of this Agreement and agree that the
obligations of the parties hereunder shall be specifically
enforceable.
(b) Expenses. Neither Seller nor Purchaser shall be
responsible for the expenses incurred by the other in connection
with this Agreement and the transactions contemplated hereby.
(c) Amendments. This Agreement may not be amended
except by an instrument in writing signed by each of the parties
hereto.
(d) Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if
delivered personally, sent by overnight courier or mailed by
registered or certified mail (return receipt requested) to the
parties at the following addresses (or at such other address for
a party as shall be specified by like notice):
(i) if to Purchaser, to:
EcoScience Corporation
10 Alvin Court
East Brunswick, New Jersey 08816
with a copy to:
Philip D. Forlenza, Esq.
Giordano, Halleran & Ciesla
125 Half Mile Road
Post Office Box 190
Middletown, New Jersey 07748
(ii) if to Seller, to:
Cogentrix Delaware Holdings, Inc.
9405 Arrowpoint Boulevard
Charlotte, North Carolina 28273-8110
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<PAGE> 9
with a copy to:
Robert B. Vernon
Fennebresque, Clark, Swindell & Hay
Suite 2900
100 North Tryon Street
Charlotte, North Carolina 28202-4011
(e) Counterparts. This Agreement may be executed in
one or more counterparts, all of which shall be considered one
and the same agreement, it being understood that all parties need
not sign the same counterpart.
(f) Entire Agreement; No Third-Party Beneficiaries.
This Agreement (including the documents and instruments referred
to herein and therein) (i) constitutes the entire agreement and
supersedes all prior agreements and understandings, both written
and oral, between Seller and Purchaser with respect to the
subject matter hereof and (ii) is not intended to confer upon any
person other than the parties hereto any rights or remedies
hereunder.
(g) Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of
North Carolina.
10. Mandatory Prepayments. If an Event of Default under the Stock
Pledge occurs, the principal and all accrued and unpaid interest on the Note
shall without further act become immediately due and payable in full.
The following shall constitute "Prepayment Events"; (i) Purchaser
or any of its subsidiaries shall incur any indebtedness for borrowed money,
(other than under their respective working capital facilities (a "Debt Event")
(ii) Purchaser or any of its Subsidiaries shall issue any capital stock for cash
(a "Stock Event"), or (iii) Purchaser or any of its Subsidiaries, shall sell any
asset, other than in the ordinary course of business (an "Asset Sale"). Net
Proceeds shall mean (i) in the case of a Debt Event, all cash loan proceeds,
less reasonable transactions expenses, (ii) in the case of a Stock Event, all
cash proceeds, less reasonable transaction expenses and (iii) in the case of an
Asset Sale, all net cash proceeds, after payment of reasonable transactions
expenses and indebtedness required to be repaid by any lien attached to the
related asset, and, only in the case of a sale of the Pocono facility, the
payment of indebtedness to Agro Power Development, Inc. related to the Pocono
facility.
On the day that a Prepayment Event occurs, Purchaser shall pay
over to Seller as a prepayment on the Note, the lesser of the Net Proceeds
related to such Prepayment Event and the principal and interest the outstanding
on the Note. Amounts received by Seller shall be applied first against accrued
interest and the balance against the remaining principal outstanding. If any
such payment shall be sufficient to pay the Note in full, Seller shall on
receipt of such payment, mark the Note as cancelled and return the same to
Purchaser. If such payment is not sufficient to pay the Note in full, Seller
shall, on receipt of a new Note, in the form of Exhibit A in a principal amount
equal to the outstanding principal after such payment, surrender to Purchaser
the Note then held by Seller.
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<PAGE> 10
11. Restrictions on Sale of Stock Consideration. Seller agrees
that until September 30, 1999 it will not sell or otherwise transfer any shares
of the Stock Consideration without the written consent of Purchaser; provided
that no consent of Purchaser shall be required for Seller to sell (i) up to
250,000 shares of the Stock Consideration after April 1, 1999, (ii) up to
500,000 shares of the Stock Consideration (including shares sold after April 1,
1999 and prior to June 30, 1999) after June 30, 1999 or (iii) any number of
shares so long as the Note shall not have been paid in full when due and remains
unpaid. Seller agrees that it will give Purchaser at least seven days prior
written notice (a "Sale Notice") of Seller's intention to sell 100,000 or more
shares of the Stock Consideration in any one transaction. Seller agrees that on
receipt of a Sale Notice, it will not, nor will it permit any of the officers or
directors of Seller or any subsidiary of Seller to execute, or place for
execution, any sales of Common Stock of Seller, until the earlier of (a) the
sale of the shares of Stock Consideration by the Seller shall have been
consummated and (b) expiration of the thirty (30) day period following the
receipt of the Sale Notice.
12. Restrictive Legend. Each certificate representing the shares
comprising the Stock Consideration (the "EcoScience Shares") or any other
securities issued in respect of the EcoScience Shares upon any stock split,
stock dividend, recapitalization, merger, consolidation or similar event, shall
(unless otherwise permitted or unless the securities evidenced by such
certificate shall have been registered under the Securities Act) be stamped or
otherwise imprinted with a legend in substantially the following form (in
addition to any legend required under applicable state securities laws):
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR ANY STATE SECURITIES
LAWS. THEY MAY NOT BE SOLD OR OFFERED FOR SALE IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
AS TO THE SECURITIES LAW OR AN OPINION OF COUNSEL
FOR OR SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED. IN ADDITION, THESE
SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFER
CONTAINED IN A STOCK PURCHASE AGREEMENT DATED
DECEMBER 4, 1998, A COPY OF WHICH IS ON FILE AT THE
COMPANY'S OFFICES.
At any time after the EcoScience Shares shall have been registered under the
Securities Act or shall be tradable without restriction under this Agreement or
any Rule or Regulation promulgated under the Securities Act, Seller shall, at
Purchaser's request, exchange the certificates held by Purchaser for
certificates that do not contain the foregoing legend.
13. "Market Stand-Off" Agreement. On and after December 1, 1999,
if requested by the Purchaser and an underwriter of common stock (or other
securities) of the Purchaser, Seller shall not sell or otherwise transfer or
dispose of any common stock of the Purchaser held by Purchaser during the ten
(10) day period prior to and the ninety (90) day period following the
anticipated effective date (as notified to Seller in writing by Purchaser) of a
registration statement of the Purchaser filed under the Securities Act, provided
that:
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<PAGE> 11
(a) such agreement only applies to such
registration statements of the Purchaser, including securities to
be sold on its behalf to the public in a firm commitment
underwritten offering, and Seller owns 5% or more of the
outstanding Common Stock of the Purchaser; and
(b) all other shareholders holding at least 5% of
the Common Stock of Seller and officers and directors of
Purchaser enter into similar agreements.
The Purchaser may impose stop-transfer instructions with respect
to the shares (or securities) subject to the foregoing restrictions during said
one hundred (100) day period.
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<PAGE> 12
IN WITNESS WHEREOF, Seller and Purchaser have each caused this
Agreement to be duly executed as of the date first written above.
PURCHASER:
ECOSCIENCE CORPORATION
By: /s/ J. KEVIN COBB
----------------------------------
Name: J. Kevin Cobb
Title: Senior Vice President
SELLER:
COGENTRIX DELAWARE HOLDINGS, INC.
By: /s/ THOMAS F. SCHWARTZ
----------------------------------
Name: Thomas F. Schwartz
Title: Senior Vice President -
Finance and Treasurer
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<PAGE> 13
APPENDICES
Schedules
Schedule 2(d) - Required Consents
Exhibits
Exhibit A - Form of Promissory Note
Exhibit B - Form of Stock Pledge Agreement
Exhibit C - Form of Registration Rights Agreement
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<PAGE> 14
EXHIBIT A
TO
STOCK PURCHASE AGREEMENT
PROMISSORY NOTE
$20,600,000.00 December ___, 1998
FOR VALUE RECEIVED, the undersigned, ECOSCIENCE CORPORATION, a
Delaware corporation, having its principal place of business at 10 Alvin Court,
East Brunswick, New Jersey 08816 (collectively, the "Maker"), hereby promises to
pay to the order of COGENTRIX DELAWARE HOLDINGS, INC., a Delaware corporation,
having its principal place of business at 1105 North Market Street, Suite 1108,
Wilmington, DE 19801 (together with his successors and assigns, the "Holder),
the principal sum of TWENTY MILLION, SIX HUNDRED THOUSAND AND NO/100 DOLLARS
($20,600,000.00), together with interest at eleven and a quarter percent
(11.25%) per annum, in one installment payable on the 15th day of March, 1999.
If (i) there should be a default in the payment of interest or
principal due hereunder or (ii) the Maker or any other person liable hereon
should make an assignment for the benefit of creditors or (iii) attachment or
garnishment proceedings are commenced against the Maker or any other person
liable hereon, or (iv) a receiver, trustee or liquidator is appointed over or
execution levied upon any property of the Maker or (v) proceedings are
instituted by or against the Maker or any other person liable hereon under any
bankruptcy, insolvency, reorganization or other law relating to the relief of
debtors, including without limitation the United States Bankruptcy Code, as
amended, or (vii) the Maker makes any misrepresentation or breaches any
warranties made to the Holder in connection with any loans extended by the
Holder to the Maker, then, and in each such event, the Holder may, at its
option, without notice or demand, declare the remaining unpaid principal balance
of this Promissory Note and all accrued interest thereon immediately due and
payable in full.
Any amount hereunder which is not paid when due, whether at
stated maturity, by acceleration or otherwise, shall bear interest from the date
when due until paid at the lesser of (a) the foregoing rate per annum plus four
percentage points or (b) the maximum rate permitted by law, said interest to be
compounded annually and computed on the basis of a 360-day year consisting of
twelve 30 day months.
All payments made hereunder shall be made in lawful currency of
the United States of American to Wilmington Trust Company, Wilmington, Delaware,
ABA Routing Number 031- 100-092, Account of Cogentrix Delaware Holdings, Inc.,
Account Number 32561-4, Attn: Christopher Monigle, or at such other place as the
Holder may designate in writing. All payments made hereunder, whether a
scheduled payment, prepayment, or payments as a result
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<PAGE> 15
of acceleration, shall be allocated first to accrued but unpaid interest, and
then to payments of principal remaining outstanding hereunder.
Maker agrees to pay all reasonable costs of collection, including
attorneys' fees paid or incurred by the Holder in enforcing this Promissory Note
on default or the rights and remedies herein provided.
This Promissory Note is made pursuant to the provisions of the
Stock Purchase Agreement (the "Purchase Agreement") dated as of December 7,
1998, between the Maker and the Holder. This Promissory Note is secured by a
Stock Pledge Agreement dated as of December ___, 1998, between the Maker and the
Holder. This Promissory Note is subject to mandatory prepayment, in whole or in
part, as provided in the Purchase Agreement. The Maker may prepay this
Promissory Note in whole or in part without premium or penalty.
The Maker, for itself and for any guarantors, sureties, endorsers
and/or any other person or persons now or hereafter liable hereon, if any,
hereby waives demand of payment, presentment for payment, protest, notice of
nonpayment or dishonor and any and all other notices and demands whatsoever, and
any and all delays or lack of diligence in the collection hereof, and expressly
consents and agrees to any and all extensions or postponements of the time of
payment hereof from time to time at or after maturity and any other indulgence
and waives all notice thereof.
This Promissory Note shall be governed by and construed and
enforced in accordance with the laws of the State of North Carolina.
IN WITNESS WHEREOF, the undersigned has duly caused this
Promissory Note to be executed and delivered as of the date first written above.
ECOSCIENCE CORPORATION
By:
---------------------------------
Name:
Title:
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<PAGE> 16
EXHIBIT B
TO
STOCK PURCHASE
AGREEMENT
STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT (the "Agreement"), entered into as of
December ____, 1998, is made by ECOSCIENCE CORPORATION, a Delaware corporation,
having its principal place of business at 10 Alvin Court, East Brunswick, New
Jersey 08816 (the "Pledgor"), to COGENTRIX DELAWARE HOLDINGS, INC., a Delaware
corporation, having its principal place of business at 1105 North Market Street,
Suite 1108, Wilmington, DE 19801 ("Pledgee").
WHEREAS, Pledgor and Pledgee have entered into a Stock Purchase
Agreement (the "Stock Purchase Agreement") dated as of December 7, 1998 pursuant
to which (i) Pledgor has executed a promissory note in favor of Pledgee (the
"Note"), which Note is dated of even date herewith and under the terms of which
Pledgor has agreed to pay to Pledgee the principal sum of TWENTY MILLION, SIX
HUNDRED THOUSAND AND NO/00 Dollars ($20,600,000.00), together with interest on
such principal sum at eleven and one-quarter percent (11.25%) per annum as set
forth therein, on March 15, 1999 and (ii) Pledgee has sold to Pledgor all of the
outstanding shares of common stock (the "Shares") of COGENTRIX OF BUFFALO, INC.
("CBI"), COGENTRIX OF FORT DAVIS I, INC., ("CFDI") COGENTRIX GREENHOUSE
INVESTMENTS, INC., ("CGI"), COGENTRIX OF MARFA, INC., ("CMA") AND COGENTRIX OF
POCONO INC. ("CPI"), each a Delaware corporation (each of CBI, CFDI, CGI, CMI
and CDI are referred to herein as a "Company" and collectively as the
"Companies"). In connection with the Stock Purchase Agreement, Pledgor and
Pledgee have entered into a Registration Rights Agreement (the "Rights
Agreement") of even date herewith. The Stock Purchase Agreement, the Rights
Agreement and the Note are referred to herein collectively as the "Documents".
WHEREAS, Pledgor is the legal and beneficial owner of all of the
shares of common stock, par value _________ per share (the "APD Shares", and
together with the Shares, the "Pledged Shares"), of AGRO POWER DEVELOPMENT, INC.
("APD"). Pledgor has agreed to pledge the Pledged Shares (and during the term of
this Agreement agrees to pledge all Additional Shares (as defined in Section 4.2
hereof)) to the Pledgee to secure the performance by Pledgor of any and all
obligations arising as a result of a default by the Pledgor under any Document.
NOW, THEREFORE, in consideration of the benefits accruing to
Pledgor under the Documents, and in order to induce Pledgee to enter into the
Documents, Pledgor hereby agrees as follows:
1. Security for Obligations. This Agreement is for the benefit of
Pledgee to secure (i) the performance of the obligations of Pledgor under the
Documents, and (ii) all costs and
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<PAGE> 17
expenses that may be incurred by Pledgee in connection with the exercise or
enforcement of its rights and remedies hereunder (including reasonable
attorneys' fees actually incurred) (all such obligations collectively being the
"Secured Obligations").
2. Pledge of Shares; etc.
2.1 Pledge. For the purposes set forth in Section
1, Pledgor hereby pledges the Pledged Shares to Pledgee, together with (i) the
certificates representing such Pledged Shares delivered herewith accompanied by
undated stock powers duly executed in favor of Pledgee by Pledgor, (ii) subject
to the rights of Pledgor set forth in Section 4, all dividends (whether in cash,
stock, warrants, options, or other securities), cash, instruments or other
property from time to time received, receivable or otherwise distributed in
respect of, or in exchange for, any or all of the Pledged Shares pledged by
Pledgor hereunder, and (iii) all cash and non-cash proceeds of the foregoing,
and hereby assigns, transfers, hypothecates and sets over to Pledgee all of
Pledgor's right, title and interest in and to and grants to a Pledgee security
interest in the Pledged Shares (and in and to the certificates or instruments
evidencing the items described in clauses (i), (ii) and (iii) above) to be held
by Pledgee, upon the terms and conditions set forth in this Agreement. Pledgor
agrees to deliver to Pledgee all certificates and instruments evidencing the
items described in clauses (ii) and (iii) above promptly upon Pledgor's receipt
thereof.
2.2 Delivery of Pledged Shares. All certificates
or instruments representing or evidencing the Pledged Shares shall be delivered
to and held by or on behalf of the Pledgee, pursuant hereto and shall be in
suitable form for transfer by delivery, duly endorsed and shall be accompanied
by duly executed instruments of transfer or assignments in blank, with
signatures appropriately guaranteed, and accompanied in each case by any
required transfer tax stamps, all in form and substance satisfactory to the
Pledgee.
2.3 Definition of Collateral. The Pledged Shares
and all items described in clauses (ii) and (iii) of Section 2.1, including,
without limitation, Additional Shares (as defined in Section 4.2 hereof) are
hereinafter called the "Collateral".
3. Security Interests Absolute. All rights of the Pledgee
hereunder, and all obligations of the Pledgor hereunder, shall be absolute and
unconditional and, without limiting the generality of the foregoing, shall not
be released, discharged or otherwise affected by:
(a) any extension, renewal, settlement, compromise,
waiver or release in respect of any Secured Obligation or any
other document securing any Secured Obligation, by operation of
law or otherwise;
(b) any modification or amendment or supplement to
the Documents, or any other document evidencing or securing any
Secured Obligation;
(c) any release, non-perfection or invalidity of
any other direct or indirect security for any Secured Obligation;
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<PAGE> 18
(d) any change in the existence, structure or
ownership of the Pledgor or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting the Pledgor
or its assets or any resulting disallowance, release or discharge
of all or any portion of the Secured Obligations;
(e) the existence of any claim, set-off or other
right which the Pledgor may have at any time against the Pledgee
or any other corporation or person, whether in connection
herewith or any unrelated transactions; provided that nothing
herein shall prevent the assertion of any such claim by separate
suit or compulsory counterclaim;
(f) any invalidity or unenforceability for any
reason of any Secured Obligation relating to or against the
Pledgor or any provision of applicable law or regulation
purporting to prohibit the payment by the Pledgor of the Secured
Obligations;
(g) any failure by the Pledgee (i) to file or
enforce a claim against the Pledgor or its estate (in a
bankruptcy or other proceeding), (ii) to give notice of the
existence, creation or incurrence by the Pledgor of any new or
additional indebtedness or obligation under or with respect to
the Secured Obligations, (iii) to commence any action against the
Pledgor, (iv) to disclose to the Pledgor any facts which the
Pledgee may now or hereafter know with regard to the Pledgor or
(v) to proceed with due diligence in the collection, protection
or realization upon any collateral securing the Secured
Obligations; or
(h) any other act or omission to act or delay of
any kind by the Pledgor, the Pledgee or any other person or any
other circumstance whatsoever which might, but for the provisions
of this clause, constitute a legal or equitable discharge of the
Pledgor's obligations hereunder.
4. Right to Receive Distributions on Pledged Collateral; Voting.
(a) So long as no Event of Default shall have occurred and be continuing:
(i) The Pledgor shall be entitled to exercise any
and all voting and other consensual rights pertaining to the
Pledged Shares or any part thereof for any purpose permitted by
the terms of this Agreement.
(ii) The Pledgor shall be entitled to receive and
retain any and all dividends, interest and principal paid in cash
on the Pledged Shares to the extent and only to the extent that
such cash dividends, interest and principal are permitted by, and
otherwise paid in accordance with, applicable laws. Other than
pursuant to the first sentence of this paragraph (a)(ii), all
principal, all noncash dividends, interest and principal, and all
dividends, interest and principal paid or payable in cash or
otherwise in connection with a partial or total liquidation or
dissolution, return of capital, capital surplus or paid-in
surplus, and all other distributions made on or in respect of
Pledged Shares, whether paid or payable in cash or otherwise,
whether resulting from a subdivision, combination or
reclassification or received in exchange for Pledged Shares or
any part thereof, or in redemption thereof, or as a result of any
merger, consolidation, acquisition or other exchange of assets or
otherwise, shall be and become part of the Collateral, and, if
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<PAGE> 19
received by the Pledgor, shall not be commingled by the Pledgor
with any of his other funds or property but shall be held
separate and apart therefrom, shall be held in trust for the
benefit of the Pledgee and shall be forthwith delivered to the
Pledgee in the form in which received (with any necessary
endorsement).
(iii) The Pledgee shall execute and deliver (or
cause to be executed and delivered) to the Pledgor all such
proxies, powers of attorney, consents, ratifications and waivers
and other instruments as the Pledgor may reasonably request for
the purpose of enabling the Pledgor to exercise the voting and
other rights which it is entitled to exercise pursuant to
paragraph (i) above and to receive the dividends or interest
payments which it is authorized to receive and retain pursuant to
paragraph (ii) above.
(b) Upon the occurrence and during the continuance of an Event of
Default:
(i) All rights of the Pledgor to receive the
dividends and interest payments which it would otherwise be
authorized to receive and retain pursuant to Section 4(a)(ii)
shall cease, and all such rights shall thereupon become vested in
the Pledgee which shall thereupon have the sole right to receive
and hold as Collateral such dividends and interest payments.
(ii) All dividends and interest payments which are
received by the Pledgor contrary to the provisions of paragraph
(i) of this Section 4(b) shall be received in trust for the
benefit of the Pledgee, shall be segregated from other funds of
the Pledgor and shall be forthwith paid over to the Pledgee as
Collateral in the same form as so received (with any necessary
endorsement).
After all Events of Default have been cured or waived, the Pledgee shall repay
to the Pledgor an amount equal to the excess, if any, of (A) the aggregate
amount of any dividends and interest payments actually collected by the Pledgee
under clauses (i) and (ii) of this Section 4(b) over (B) the aggregate amount of
such dividends and interest payments applied by the Pledgee pursuant to Section
8.
(c) Upon the occurrence and during the continuance of an Event of
Default, all rights of the Pledgor to exercise the voting and other consensual
rights which it would otherwise be entitled to exercise pursuant to Section
4(a)(i) shall cease, and all such rights shall thereupon become vested in the
Pledgee, which shall thereupon have the sole right to exercise such voting and
other consensual rights. After all Events of Default have been cured or waived,
the Pledgor will have the right to exercise the voting and consensual rights and
powers to which it would otherwise be entitled pursuant to the terms of
paragraph 4(a)(i).
4.2 Additional Shares. In the event that any Company or APD shall
issue to Pledgor, any additional common stock, preferred stock, warrants,
options to purchase unissued stock or other securities (collectively referred to
as "Additional Shares") during the term of this Agreement, Pledgor shall pledge
or cause to be pledged to Pledgee all such Additional Shares during the term of
this Agreement.
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<PAGE> 20
5. Events of Default.
5.1 DEFINITION OF EVENTS OF DEFAULT. Any of the
following specified events shall constitute an event of default (each an "Event
of Default") under this Agreement with respect to Pledgor:
(a) the failure of Pledgor to pay when due any
amount under the Note;
(b) any representation, warranty or statement made
or deemed to be made by Pledgor under or in connection with this
Agreement, the Stock Purchase Agreement or the Rights Agreement
shall have been false or misleading in any material respect when
made or deemed to have been made and on the date on which such
misrepresentation or breach is discovered or determined;
provided, that, no such misrepresentation or breach shall
constitute an Event of Default hereunder if such
misrepresentation or breach is cured within thirty (30) days
after the earlier of (i) its discovery or determination by
Pledgor and (ii) notice to Pledgor by Pledgee and the costs of
effecting such cure are not material;
(c) Pledgor shall breach or fail to observe or
perform any covenant or agreement set forth in the Documents;
(d) an involuntary proceeding shall be commenced
or an involuntary petition shall be filed in a court of competent
jurisdiction seeking (A) relief in respect of the Pledgor, or of
a substantial part of his property or assets, under Title 11 of
the United States Code, as now constituted or hereafter amended,
or any other Federal, state or foreign bankruptcy, insolvency,
receivership or similar law, (B) the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official
for the Pledgor, or for a substantial part of his property or
assets, or (C) the winding-up or liquidation of the Pledgor; and
such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the
foregoing shall be entered; or
(e) the Pledgor shall (A) voluntarily commence any
proceeding or file any petition seeking relief under Title 11 of
the United States Code, as now constituted or hereafter amended,
or any other Federal, state or foreign bankruptcy, insolvency,
receivership or similar law, (B) consent to the institution of,
or fail to contest in a timely and appropriate manner, any
proceeding or the filing of any petition described in paragraph
(i) above, (C) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator, conservator or
similar official for such party or for a substantial part of its
property or assets, (D) file an answer admitting the material
allegations of a petition filed against it in any such
proceeding, (E) make a general assignment for the benefit of
creditors, (F) become unable, admit in writing its inability or
fail generally to pay its debts as they become due or (G) take
any action for the purpose of effecting any of the foregoing.
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<PAGE> 21
5.2 Notice and Opportunity to Cure. Except with
respect to a failure to observe or perform any covenant or agreement set forth
in Sections 4, 5.1(a), 12 or 15 hereof with respect to which no notice shall be
required, Pledgee shall give Pledgor written notice that an Event of Default has
occurred or is occurring hereunder, and Pledgor shall have ten (10) days (or
such longer period as may otherwise be expressly provided herein) from the
receipt of such notice to cure or cause to be cured the Event of Default. If the
Event of Default is not cured with such period, then Pledgee shall be entitled
to exercise the remedies set forth in Section 5.3 below. Any failure of Pledgee
to give notice to Pledgor upon the occurrence or continuation of an Event of
Default shall in no way be deemed to limit or abridge the rights of Pledgee
under this Agreement or the Documents, including the right of Pledgee to
exercise the remedies set forth in Section 5.3 upon the giving of any notice or
opportunity to cure that is required hereunder.
5.3 Remedies. If an Event of Default shall have
occurred and be continuing, Pledgee shall be entitled to exercise all of the
rights, powers and remedies (whether vested in it by this Agreement or by law
and including, without limitation, all rights and remedies of a secured party of
a debtor in default under the Uniform Commercial Code (the "Code") in effect in
the State of North Carolina at that time) for the protection and enforcement of
its rights in respect of the Collateral relating to the Pledged Shares of
Pledgor with respect to whom an Event of Default has occurred. In addition to,
and not in limitation of the foregoing, Pledgee shall be entitled to exercise
the following rights:
(a) to receive all amounts in respect of such
Collateral otherwise payable under Section 4 to Pledgor and to
enforce the payment rights appurtenant to the Pledged Shares and
to exercise all of the rights, powers, and remedies of Pledgor
thereunder;
(b) to transfer all or any part of such Collateral
into Pledgee's name or the name of its nominee or nominees;
(c) to vote all or any part of such Collateral
(whether or not transferred into the name of Pledgee) and give
all consents, waivers and ratifications in respect of such
Collateral and otherwise act with respect thereto as though it
were the outright owner thereof;
(d) at any time or from time-to-time to sell,
assign and deliver, or grant options to purchase, all or any part
of such Collateral, or any interest therein, at any public or
private sale at any exchange, broker's board or elsewhere,
without demand of performance, advertisement or notice of
intention to sell or of the time or place of sale or adjournment
thereof or to redeem or otherwise (all of which are hereby
expressly and irrevocably waived by Pledgor), for cash, on credit
or for other property, for immediate or future delivery without
any assumption of credit risk, and for such price or prices and
on such terms as Pledgee in its sole discretion may determine.
Pledgor agrees that to the extent that notice of sale shall be
required by any applicable law, ten (10) days' notice to a
Pledgor of the time and place of any public sale or the time
after which any private sale is to be made shall constitute
reasonable notification. Pledgee shall
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<PAGE> 22
not be obligated to make any sale of Collateral regardless of
notice of sale having been given. Pledgee may adjourn any public
or private sale from time-to-time by announcement at the time and
place fixed therefor, and any such sale may, without further
notice, be made at the time and place to which it was so
adjourned. Pledgor hereby waives and releases to the fullest
extent permitted by law any right or equity of redemption with
respect to the Collateral, whether before or after sale
hereunder. At any such sale, unless prohibited by applicable law,
Pledgee may bid for and purchase all or any part of the
Collateral so sold free from any such right or equity of
redemption. Pledgee shall not be liable for failure to collect or
realize upon any or all of the Collateral or for any delay in so
doing, nor shall it be under any obligation to take any action
whatsoever with regard thereto;
(e) to settle, adjust, compromise and arrange all
accounts, controversies, questions, claims and demands whatsoever
in relation to all or any part of such Collateral;
(f) to execute all contracts, agreements,
documents and instruments to bring, defend and abandon all such
actions, suits and proceedings and to take all other actions in
relation to all or any part of such Collateral as Pledgee in its
sole discretion may determine;
(g) to appoint agents for any of the purposes
mentioned in the foregoing provisions of this Section 5.3 and to
dismiss the same, all as Pledgee in its sole discretion may
determine; and
(h) generally, to take all such other action as
Pledgee may determine as incidental or conducive to any of the
matters or powers mentioned in the foregoing provisions of this
Section 5.3 and which Pledgee may or can do lawfully and to use
the name of Pledgor for the purposes aforesaid and in any
proceedings arising therefrom.
5.4. Additional Rights of the Pledgee. Upon the occurrence and
during the continuance of an Event of Default:
(a) The Pledgee shall have the right and power to institute and
maintain such suits and proceedings as it may deem appropriate to protect and
enforce the rights vested in it by this Agreement and may proceed by suit or
suits at law or in equity to enforce such rights and to foreclose upon and sell
the Collateral or any part thereof pursuant to the judgment or decree of a court
of competent jurisdiction.
(b) The Pledgee shall, to the extent permitted by law and without
regard to the solvency or insolvency at the time of any person then liable for
the payment of any of the Secured Obligations or the then value of the
Collateral, and without requiring any bond from any party to such proceedings,
be entitled to the appointment of a special receiver or receivers (who may be
the Pledgee) for the Collateral or any part thereof and for the rents, issues,
tolls, profits, royalties, revenues and other income therefrom, which receiver
shall have such powers
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<PAGE> 23
as the court making such appointment shall confer, and to the entry of an order
directing that the rents, issues, tolls, profits, royalties, revenues and other
income of the property constituting the whole or any part of the Collateral be
segregated, sequestered and impounded for the benefit of the Pledgee, and the
Pledgor irrevocably consents to the appointment of such receiver or receivers
and to the entry of such order.
5.5. Securities Act, etc. In view of the position of the Pledgor
in relation to the Pledged Shares, or because of other present or future
circumstances, a question may arise under the Securities Act of 1933, as now or
hereafter in effect, or any similar statute hereafter enacted analogous in
purpose or effect (such Act and any such similar statute as from time to time in
effect being herein called the "Federal Securities Laws"), with respect to any
disposition of the Pledged Shares permitted hereunder. The Pledgor understands
that compliance with the Federal Securities Laws might very strictly limit the
course of conduct of the Pledgee if the Pledgee were to attempt to dispose of
all or any part of the Pledged Shares, and might also limit the extent to which
or the manner in which any subsequent transferee of any such Pledged Shares
could dispose of the same. Similarly, there may be other legal restrictions or
limitations affecting the Pledgee in any attempt to dispose of all or part of
the Pledged Shares under applicable Blue Sky or other state securities laws or
similar laws analogous in purpose or effect.
Accordingly, the Pledgor expressly agrees that the Pledgee is
authorized, in connection with any sale of the Pledged Shares, if it deems it
advisable so to do, (i) to restrict the prospective bidders on or purchasers of
any of the Pledged Shares to a limited number of sophisticated investors who
will represent and agree that they are purchasing for their own account for
investment and not with a view to the distribution or sale of any of such
Pledged Shares, (ii) to cause to be placed on certificates for any or all of the
Pledged Shares or on any other securities pledged hereunder a legend to the
effect that such security has not been registered under the Federal Securities
Laws and may not be disposed of in violation of the provision of the Federal
Securities Laws and (iii) to impose such other limitations or conditions in
connection with any such sale as the Pledgee deems necessary or advisable in
order to comply with the Federal Securities Laws or any other law. The Pledgor
covenants and agrees that it will execute and deliver such documents and take
such other action as the Pledgee deems necessary or advisable in order to comply
with the Federal Securities Laws or any other law in connection with any private
sale of the Pledged Shares. The Pledgor acknowledges and agrees that such
limitations may result in prices and other terms less favorable to the seller
than if such limitations were not imposed, and, notwithstanding such
limitations, agrees that any such sale shall be deemed to have been made in a
commercially reasonable manner, it being the agreement of the Pledgor and the
Pledgee that the provisions of this Section 5.5 will apply notwithstanding the
existence of a public or private market upon which the quotations or sales
prices may exceed substantially the price at which the Pledgee sells the Pledged
Shares. The Pledgee shall be under no obligation to delay a sale of any Pledged
Shares for a period of time necessary to permit the issuer of any securities
contained therein to register such securities under the Federal Securities Laws,
or under applicable state securities laws, even if the issuer would agree to do
so.
5.6. Remedies Not Exclusive. (a) No remedy conferred upon or
reserved to the Pledgee in this Agreement is intended to be exclusive of any
other remedy or remedies, but every such remedy shall be cumulative and shall be
in addition to every other remedy conferred herein or now or hereafter existing
at law, in equity or by statute.
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<PAGE> 24
(b) If the Pledgee shall have proceeded to enforce any right,
remedy or power under this Agreement and the proceeding for the enforcement
thereof shall have been discontinued or abandoned for any reason or shall have
been determined adversely to the Pledgee, the Pledgor and the Pledgee shall,
subject to any determination in such proceeding, severally and respectively be
restored to their former positions and rights under this Agreement, and
thereafter all rights, remedies and powers of the Pledgee shall continue as
though no such proceedings had been taken.
(c) All rights of action under this Agreement may be enforced by
the Pledgee without the possession of any instrument evidencing any Secured
Obligation or the production thereof at any trial or other proceeding relative
thereto, and any suit or proceeding instituted by the Pledgee shall be brought
in its name and any judgment shall be held as part of the Collateral.
5.7 Transfer in lieu of Foreclosure. Pledgee agrees that in lieu
of any other remedy available to Pledgor hereunder or at law or equity, so long
as an Event of Default has occurred and is continuing, Pledgor may in its sole
discretion elect to transfer the Shares to its own name, or the name of its
nominee, cancel the Note, release Pledgor from the remaining Secured Obligations
and release the remaining Collateral from the lien of this Agreement. Upon such
transfer and releases, legal and beneficial ownership in the Shares shall
automatically vest in Pledgee, free and clear of any claim, including any right
or equity of redemption of Pledgor. Pledgor agrees that the exercise of Pledgee
of its rights under this Section 5.7 is strictly in the nature of a remedy, and
shall in no way constitute a recession of the Stock Purchase Agreement. Pledgor
agrees that Pledgee shall have the absolute right to retain the Stock
Consideration, (as defined in the Stock Purchase Agreement), as consideration of
the releases granted by Pledgee under this Section 5.7 and as liquidated
damages, and not as a penalty, for Pledgor's breach.
6. Waiver and Estoppel. (a) The Pledgor, to the extent it may
lawfully do so, agrees that it will not at any time in any manner whatsoever
claim or take the benefit or advantage of any appraisement, valuation, stay,
extension, moratorium, turnover or redemption law, or any law now or hereafter
in force permitting it to direct the order in which the Collateral shall be sold
which may delay, prevent or otherwise affect the performance or enforcement of
this Agreement and the Pledgor hereby waives the benefits or advantage of all
such laws, and covenants that it will not hinder, delay or impede the execution
of any power granted to the Pledgee in this Agreement but will permit the
execution of every such power as though no such law were in force; provided that
nothing contained in this Section 6 shall be construed as a waiver of any rights
of the Pledgor under any applicable Federal bankruptcy law.
(b) The Pledgor, to the extent it may lawfully do so, on behalf
of itself and all who may claim through or under it, including any and all
subsequent creditors, vendees, assignees and lienors, waives and releases all
rights to demand or to have any marshalling of the Collateral upon any sale,
whether made under any power of sale granted herein or pursuant to judicial
proceedings or upon any foreclosure or any enforcement of this Agreement and
consents and agrees that all of the Collateral may at any such sale be offered
and sold as an entirety.
(c) The Pledgor, to the extent it may lawfully do so, waives
presentment, demand, protest and any notice of any kind (except notices
explicitly required under any document) in
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<PAGE> 25
connection with this Agreement and any action taken by the Pledgee with respect
to the Collateral.
7. Power of Attorney. The Pledgor hereby irrevocably constitutes
and appoints the Pledgee, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of the Pledgor and in the name of the Pledgor or in its own name, from
time to time in the Pledgee's discretion for the purpose of carrying out the
terms of this Agreement, to take any and all appropriate action and to execute
any and all documents and instruments which may be necessary or desirable to
accomplish the purposes of this Agreement and, without limiting the generality
of the foregoing, hereby gives the Pledgee the power and right, on behalf of the
Pledgor, without notice to or assent by the Pledgor to do the following:
(a) upon the occurrence and during the continuance
of any Event of Default, to pay or discharge taxes, liens,
security interests or other encumbrances levied or placed on or
threatened against the Collateral; and
(b) upon the occurrence and during the continuance
of any Event of Default and otherwise to the extent provided in
this Agreement, (i) to direct any party liable for any payment
under any of the Collateral to make payment of any and all moneys
due and to come due thereunder directly to the Pledgee or as the
Pledgee shall direct; (ii) to receive payment of and receipt for
any and all moneys, claims and other amounts due and to become
due at any time in respect of or arising out of any Collateral;
(iii) to commence and prosecute any suits, actions or proceedings
at law or in equity in any court of competent jurisdiction to
collect the Collateral or any thereof and to enforce any other
right in respect of any Collateral; (iv) to defend any suit,
action or proceeding brought against the Pledgor with respect to
any Collateral; (v) to settle, compromise and adjust any suit,
action or proceeding described above and, in connection
therewith, to give such discharges or releases as the Pledgee may
deem appropriate; and (vi) generally to sell, transfer, pledge,
make any agreement with respect to or otherwise deal with any of
the Collateral as fully and completely as though the Pledgee were
the absolute owner thereof for all purposes, and to do, at the
option of the Pledgee and the Pledgor's expense, at any time, or
from time to time, all acts and things which the Pledgee deems
necessary to protect, preserve or realize upon the Collateral and
the Pledgee's security interest therein, in order to effect the
intent of this Agreement, all as fully and effectively as the
Pledgor might do.
The Pledgor hereby ratifies all that such attorneys shall
lawfully do or cause to be done by virtue hereof. This power of attorney is a
power coupled with an interest and shall be irrevocable, provided, however, that
this power of attorney shall terminate immediately upon the satisfaction of the
Secured Obligations.
Except as provided by law or the Code or its equivalent, nothing
herein contained shall be construed as requiring or obligating the Pledgee to
make any commitment or to make any inquiry as to the nature or sufficiency of
any payment received by the Pledgee, or to present or file any claim or notice,
or to take any action with respect to the Collateral or any part thereof or the
moneys due or to become due in respect thereof or any property covered thereby,
and the
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<PAGE> 26
Pledgee shall not be liable hereunder for any action taken by the Pledgee or
omitted to be taken with respect to the Collateral or any part thereof (other
than any action or inaction that a court of competent jurisdiction shall have
determined by final and nonappealable judgment to constitute gross negligence or
willful misconduct). The provisions of this Section 7 shall in no event relieve
the Pledgor of any of his obligations hereunder with respect to the Collateral
or any part thereof or impose any obligation on the Pledgee to proceed in any
particular manner with respect to the Collateral or any part thereof, or in any
way limit the exercise by the Pledgee of any other or further right which it may
have on the date of this Agreement or hereafter, whether hereunder or by law or
otherwise.
8. Application of Proceeds. All moneys collected by Pledgee upon
any sale, collection or other disposition of the Collateral, together with all
other moneys received by Pledgee hereunder, shall be applied as follows:
First, to the payment of the reasonable costs and
expenses of such sale, collection or other realization,
including, without limitation, reasonable attorneys' fees and all
other reasonable expenses, liabilities and advances actually made
or incurred by Pledgee in connection therewith;
Second, to the payment in full of all obligations
owing to Pledgee under the Secured Obligations; and
Third, to the Pledgor, or its successors or
assigns, or to whomsoever may be lawfully entitled to receive the
same, or as a court of competent jurisdiction may direct, any
surplus then remaining from such proceeds.
(b) The Pledgee shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement.
9. Purchasers of Collateral. Upon any sale of any of the
Collateral hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt by Pledgee or the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold, and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to Pledgee or such officer or be answerable in any way for the
misapplication or nonapplication thereof.
10. Further Assurances. Pledgor agrees that it will do such acts
and things and promptly execute and deliver to Pledgee such additional
conveyances, assignments, agreements and instruments as Pledgee may reasonably
require or deem advisable to carry into effect the purposes of this Agreement or
to further assure and confirm unto Pledgee its rights, powers and remedies
hereunder.
11. Representations and Warranties. Pledgor hereby represents and
warrants that: (i) the Pledged Shares are subject to no liens or other
encumbrances, except liens and security interests created by this Agreement or
expressly permitted by this Agreement or the Documents; (ii) it has legal
capacity, power and right to pledge all of the Pledged Shares pledged by it
pursuant to this Agreement; (iii) except as contemplated by the Stock Purchase
Agreement no
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<PAGE> 27
consent of any other party (including, without limitation, any creditor of
Pledgor), and no order, consent, license, permit, approval, validation or
authorization of, exemption by, notice to or registration, recording, filing or
declaration with, any governmental or public body or authority, is required to
be obtained by Pledgor in connection with the execution, delivery or performance
of this Agreement or consummation of the transactions contemplated hereby,
including, without limitation, the exercise by Pledgee of the voting or other
rights provided for in this Agreement or the remedies in respect of the
Collateral pursuant to this Agreement (except as may be required in connection
with the disposition of the Pledged Shares by laws affecting the offering and
sale of securities generally); (iv) the pledge and delivery of the Pledged
Shares pursuant to this Agreement creates a valid and perfected first priority
security interest in the Pledged Shares, and the proceeds thereof, which
security interest is not subject to any prior lien permitted by Pledgor or any
agreement purporting to grant to any third party a lien on the property or
assets of Pledgor which would include the Pledged Shares; and (v) Pledgor is the
sole beneficial owner of the Pledged Shares. All Pledged Shares have been duly
authorized and validly issued and are fully paid and nonassessable. None of the
Pledged Shares is subject to options to purchase or similar rights of any
person. The Pledgor is not and will not become a party to or otherwise bound by
any agreement, other than this Agreement, which restricts in any manner the
rights of any present or future holder of any of the Pledged Shares with respect
thereto.
12. Covenants of Pledgor. Pledgor covenants and agrees that it
will not, with respect to any Collateral, without the prior written consent of
Pledgee, enter into any shareholder agreements, voting agreements, voting
trusts, trust deeds, irrevocable proxies or any other similar agreements or
instruments.
13. Payment of Taxes, etc. The Pledgor will pay all taxes,
assessments and other governmental charges or levies imposed upon the Collateral
or in respect of any of its income or profits therefrom when the same become due
and payable, but in any event before any penalty or interest accrues thereon,
and all claims (including claims for labor, services, materials and supplies)
for sums which have become due and payable and which by law have or might become
a Lien upon any of his properties or assets, and promptly reimburse the Pledgee
for any such taxes, assessments, charges or claims paid by them; provided that
no such tax, assessment, charge or claim need be paid or reimbursed if being
contested in good faith by appropriate proceedings promptly initiated and
diligently conducted and if such reserves or other appropriate provision, if
any, as shall be required by generally accepted accounting principles ("GAAP")
shall have been made therefor and be adequate in the good faith judgment of the
Pledgor.
14. Limitation on Liens on Collateral. The Pledgor will not
create, permit or suffer to exist, but will defend the Collateral and the
Pledgor's rights with respect thereto against and take such other action as is
necessary to remove, any security interest, encumbrance, claim or other Lien in
respect of the Collateral.
15. Limitations on Dispositions of Collateral. The Pledgor will
not, directly or indirectly, sell, transfer, lease or otherwise dispose of any
of the Collateral (or any interest therein), or attempt, offer or contract to do
so. The inclusion of proceeds of the Collateral under the security interest
granted hereby shall not be deemed a consent by the Pledgee to any sale or
disposition of any Collateral.
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<PAGE> 28
16. Notices. The Pledgor will advise the Pledgee promptly and in
reasonable detail, (a) of any security interest, encumbrance or claim made or
other Lien asserted against any of the Collateral, (b) of any material change in
the composition of the Collateral and (c) of the occurrence of any other event
which would have a material effect on the aggregate value of the Collateral or
on the security interests granted to the Pledgee in this Agreement.
17. Change of Law. The Pledgor shall promptly notify the Pledgee
in writing of any change in law known to it which (i) adversely affects or will
adversely affect the validity, perfection or priority of the security interests
granted hereby, (ii) requires or will require a change in the procedures to be
followed in order to maintain and protect such validity, perfection and priority
or (iii) could result in the Pledgee not having a perfected security interest in
any of the Collateral.
18. Notices, etc. All notices and other communications hereunder
shall be given in accordance with Section 9(d) of the Stock Purchase Agreement.
19. Partial Release of Collateral; Termination. Upon payment in
full of the Note, and so long as the registration statement referred to in
Section 2(a) of the Rights Agreement shall have been filed by Pledgor and
Pledgor is diligently pursuing the effectiveness of such registration statement,
Pledgee shall, at Pledgor's written request, release the APD Shares from the
lien of this Agreement and return the certificates representing the APD Shares
to Pledgor, at Pledgor's expense. Upon the full satisfaction of the Secured
Obligations this Agreement shall terminate, and Pledgee will execute and deliver
to Pledgor a proper instrument or instruments acknowledging the satisfaction and
termination of Pledgor's obligation and will duly assign, transfer and deliver
to Pledgor (without recourse and without representation or warranty) such of the
Collateral, including the Pledged Shares, as may be in the possession or under
the control or direction of Pledgee and which has not theretofore been sold or
otherwise applied pursuant to this Agreement, together with any moneys with
respect thereto held by or under the control or direction of Pledgee at that
time pursuant to this Agreement.
20. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Pledgor herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement shall be considered to have been relied upon by the
Pledgee regardless of any investigation made by the Pledgee, and shall continue
in full force and effect until the Secured Obligations have been indefeasibly
paid in full.
21. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument. This Agreement shall be
effective with respect to the Pledgor when a counterpart hereof which bears the
signature of the Pledgor shall have been delivered to the Pledgee.
22. Amendments, Etc. No amendment, modification or waiver of any
provision of this Agreement and no consent to any departure by the Pledgor
therefrom shall in any event be effective unless the same shall be in a writing,
executed and delivered by Pledgor and Pledgee, and then such amendment,
modification, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
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<PAGE> 29
23. Assignments. This Agreement and the terms, covenants and
conditions hereof shall be binding upon the Pledgor and its successors and shall
inure to the benefit of the Pledgee and its successors and assigns. The Pledgor
shall not be permitted to assign, transfer or delegate any of its rights or
obligations under this Agreement (and any such purported assignment, transfer or
delegation without such consent shall be void).
24. Savings Clause. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect with respect to the Pledgor, no party hereto shall
be required to comply with such provision with respect to the Pledgor for so
long as such provision is held to be invalid, illegal or unenforceable, and the
validity, legality and enforceability of the remaining provisions contained
herein, and of such invalid, illegal or unenforceable provision with respect to
any other party, shall not in any way be affected or impaired. The parties shall
endeavor in good-faith negotiations to replace any invalid, illegal or
unenforceable provisions with valid provisions, the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
25. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NORTH CAROLINA.
26. Entire Agreement. This Agreement and the Documents constitute
the entire contract between the parties relative to the subject matter hereof.
Any previous agreement among the parties with respect to the subject matter
hereof is superseded by this Agreement and the Documents. Nothing in this
Agreement, expressed or implied, is intended to confer upon any party other than
the parties hereto, any rights, remedies, obligations or liabilities under or by
reason of this Agreement.
27. No Waiver. No failure on the part of the Pledgee to exercise,
and no delay in exercising, any right, power or remedy hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy by such person preclude any other or further exercise thereof or
the exercise of any other right, power or remedy.
28. Submission to Jurisdiction. (a) The Pledgor hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any North Carolina State court or Federal court of
the United States of America sitting in Charlotte, North Carolina, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Documents, or for recognition or
enforcement of any judgment, and hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in such North Carolina State or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Pledgee may otherwise
have to bring any action or proceeding relating to this Agreement or the other
Documents against the Pledgor or his properties in the courts of any
jurisdiction.
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<PAGE> 30
(b) The Pledgor hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the other Documents
in any North Carolina State court or Federal court of the United States of
America sitting in Charlotte, North Carolina. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
(c) Each party to this Agreement irrevocably consents to service
of process in the manner provided for notices in Section 18. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
33. NO ORAL AGREEMENTS. THIS AGREEMENT AND THE INSTRUMENTS AND
DOCUMENTS EXECUTED IN CONNECTION HEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
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<PAGE> 31
IN WITNESS WHEREOF, Pledgor and Pledgee have executed, or caused
to be executed by their duly authorized officers, this Agreement as an
instrument under seal as of the date first above written.
PLEDGEE:
COGENTRIX DELAWARE HOLDINGS, INC.
By:
-------------------------------
Name:
Title:
PLEDGOR:
ECOSCIENCE CORPORATION
By:
-------------------------------
Name:
Title:
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<PAGE> 1
EXHIBIT 99-2
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of December 30, 1998 by and among ECOSCIENCE CORPORATION, a
Delaware corporation (the "Company"), and COGENTRIX DELAWARE HOLDINGS, INC.
("CDH").
This Agreement is made pursuant to the Stock Purchase Agreement
dated as of December 7, 1998 (the "Stock Purchase Agreement"), by and between
the Company and CDH.
Pursuant to the Stock Purchase Agreement, CDH will receive shares
(the "Shares") of common stock, $.01 par value (the "Common Stock"), of the
Company on December 31, 1998 (the "Delivery Date").
In order to induce CDH to enter into the Stock Purchase
Agreement, the Company has agreed to provide to CDH and their direct and
indirect transferees the registration rights with respect to the Registrable
Shares (as defined below) set forth in this Agreement. The execution of this
Agreement is a condition to the closing under the Stock Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions.
As used in this Agreement, the following capitalized defined
terms shall have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended from
time to time.
"1934 Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
"CDH" shall have the meaning set forth in the preamble.
"Common Stock" shall have the meaning set forth in the preamble.
"Company" shall have the meaning set forth in the preamble and
shall also include the Company's successors.
"Delivery Date" shall have the meaning set forth in the preamble.
"Holder" shall mean a holder of Registrable Shares.
<PAGE> 2
"Interested Persons" shall mean the Holders of Registrable Shares
included within the coverage of the Shelf Registration.
"Majority Holders" shall mean the Holders of a majority of the
outstanding Registrable Shares.
"Person" shall mean an individual, partnership, corporation,
trust or unincorporated organization, or a government or agency or political
subdivision thereof.
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Shares covered by a Shelf Registration Statement, and by all other
amendments and supplements to such prospectus, and in each case including all
material incorporated by reference therein.
"Registrable Shares" shall mean (i) the Shares and (ii) any
Common Stock issued or issuable with respect to the capital stock referred to in
clause (i) above by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization; provided, however, that the Shares shall cease to be Registrable
Shares (i) when a Shelf Registration Statement with respect to such Shares shall
have been declared effective under the 1933 Act and such Shares shall have been
disposed of pursuant to such Shelf Registration Statement, (ii) when such Shares
have been sold to the public pursuant to Rule 144(k) (or any similar provision
then in force, but not Rule 144A) under the 1933 Act or (iii) when such Shares
shall have ceased to be outstanding.
"Registration Expenses" shall mean any and all expenses incident
to performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC (as defined below), stock exchange, automated
quotation system or National Association of Securities Dealers, Inc.
registration and filing fees, (ii) all fees and expenses incurred in connection
with compliance with state securities or blue sky laws (including reasonable
fees and disbursements of counsel for any Underwriters (as defined below) in
connection with blue sky qualification of any of the Registrable Shares), (iii)
all expenses of any Persons retained by the Company in preparing or assisting in
preparing, word processing, printing and distributing any Registration
Statement, any Prospectus, any amendments or supplements thereto, any
underwriting agreements, securities sales agreements and other documents
relating to the performance of and compliance with this Agreement, (iv) the fees
and disbursements of counsel for the Company and (v) the fees and disbursements
of the independent public accountants of the Company and any Person, including
special experts, retained by the Company (including the expenses of any special
audits or "cold comfort" letters required by or incident to such performance and
compliance) but excluding fees and expenses of counsel to the Underwriters
(other than fees and expenses set forth in clause (ii) above) or the Holders and
underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of Registrable Shares by a Holder.
"Registration Statement" shall mean any registration statement of
the Company that covers any of the Shares pursuant to the provisions of this
Agreement and all amendments and
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<PAGE> 3
supplements to any such Registration Statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
"SEC" shall mean the Securities and Exchange Commission.
"Shelf Registration" shall mean a registration effected pursuant
to Section 2(a) hereof on any applicable registration form.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company pursuant to the provisions of Section 2(a) of this
Agreement which covers all of the Registrable Shares on an appropriate form
under Rule 415 under the 1933 Act, or any similar rule that may be adopted by
the SEC, and all amendments and supplements to such registration statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated by
reference therein.
"Stock Purchase Agreement" shall have the meaning set forth in
the preamble.
"Transfer Agent" shall mean Boston Equiserve or any successor
transfer agent appointed by the Company.
"Underwriters" shall have the meaning set forth in Section 3
hereof.
"Underwritten Registration" or "Underwritten Offering" shall mean
a registered offering in which Registrable Shares are sold to an Underwriter for
reoffering to the public.
2. Registration Under the 1933 Act.
(a) As promptly as reasonably possible, the Company shall prepare
and file with the SEC the Shelf Registration Statement relating to all of the
Registrable Shares. The Company shall use its commercially reasonable efforts to
(i) cause such Shelf Registration Statement to be declared effective by the SEC
at the earliest practicable time, but in no event later than March 16, 1999 and
(ii) keep such Shelf Registration Statement effective until the earlier of (A)
the sale by the Holders of all the Registrable Shares relating to such Shelf
Registration Statement, (B) the date upon which the Registrable Shares may be
sold without registration under Rule 144(k) promulgated under the 1933 Act
("Rule 144(k)) or (C) three years after the date the Shelf Registration
Statement is declared effective; provided, however, that no Holders shall be
entitled to have Registrable Shares held by such Holder covered by such Shelf
Registration Statement unless the Holder agrees to be bound by all of the
provisions of this Agreement applicable to such Holder; and provided, further,
that, if for any reason the effectiveness of the Shelf Registration Statement is
suspended, the period set forth in clause (B) above shall be extended by the
aggregate number of days of each suspension period.
The Company further agrees to supplement or amend the Shelf
Registration Statement as required by the rules, regulations or instructions
applicable to the registration form used by the Company for such Shelf
Registration Statement or by the 1933 Act or by any other rules and regulations
thereunder for shelf registration or if reasonably requested by a Holder with
respect
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<PAGE> 4
to information relating to such Holder, the Company agrees to furnish the Holder
of the Registrable Shares copies of any such supplement or amendment prior to
its being used and/or filed with the SEC, and to use its commercially reasonable
efforts to cause any such amendment to become effective and such Shelf
Registration Statement to become usable as soon as practicable thereafter. The
Company agrees to furnish to the Holders of Registrable Shares copies of any
such supplement or amendment promptly after its being used or filed with the
SEC.
(b) The Company shall pay all Registration Expenses in connection
with the registration pursuant to Section 2(a) or (e), whether or not it becomes
effective. Each Holder shall pay all underwriting discounts and commissions and
transfer taxes, if any, relating to the sale or disposition of such Holder's
Registrable Shares pursuant to the Shelf Registration Statement.
(c) A Shelf Registration Statement pursuant to Section 2(a)
hereof will not be deemed to have become effective unless it has been declared
effective by the SEC; provided, however, that if, after it has been declared
effective, the offering of Registrable Shares pursuant to a Shelf Registration
Statement is interfered with by any stop order, injunction or other order or
requirement of the SEC or any other governmental agency or court, such
Registration Statement will be deemed not to have been effective during the
period of such interference until the offering of Registrable Shares pursuant to
such Registration Statement may legally resume. If the Shelf Registration
Statement is not declared effective by the SEC on or prior to March 16, 1999,
each Holder shall have the right thereafter to sell to the Company upon demand
and the Company shall buy from such Holder on or prior to the third business day
following the date of such demand, as many Registrable Shares as such Holder
shall elect (but, if the Note shall have been paid in full when due, in no event
more than the number of shares that may be sold without the consent of the
Company under Section 11 of the Stock Purchase Agreement) from time to time,
until the Shelf Registration Statement shall have been declared effective at a
purchase price equal to the greater of $4.00 and the closing price for the
Common Stock on the National Association of Securities Dealers Automated
Quotations System on the day prior to such sale.
(d) Without limiting the remedies available to the Interested
Persons, the Company acknowledges that any failure by the Company to comply with
its obligations under Section 2(a) hereof may result in material irreparable
injury to the Interested Persons for which there is no adequate remedy at law,
that it will not be possible to measure damages for such injuries precisely and
that, in the event of any such failure, the Interested Persons may obtain such
relief as may be required to specifically enforce the Company's obligations
under Section 2(a).
(e) Piggyback Registrations
(i) Right to Piggyback. If at any time upon the earlier to occur
of: (i) after 60 days subsequent to the termination of the effectiveness of the
Shelf Registration Statement effected pursuant to Section 2 prior to the
expiration of the periods set forth in Section 2(a)(ii), or (ii) if the Shelf
Registration Statement has not been declared effective on or before March 16,
1999, and the Company proposes to file a registration statement under the 1933
Act (except on Form S-4, Form S-8 or any successor forms thereto), whether or
not for its own account (other than a registration effected pursuant to Section
2.a hereof), then the Company shall give written
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<PAGE> 5
notice of such proposed filing to Holders at least thirty days before the
anticipated effective date (the "Piggyback Notice"). The Piggyback Notice shall
offer such holders the opportunity to register such amount of Registerable
Shares as each such holder may request (a "Piggyback Registration"). Any such
request shall be made by the Holder no later than 10 days after receipt of the
Piggyback Notice. Subject to Section 2.2(e)(ii) hereof, the Company shall
include in each such Piggyback Registration all Registrable Shares requested to
be included in the registration for such offering. The holders of Registrable
Shares shall be permitted to withdraw all or part of the Registrable Shares from
a Piggyback Registration at any time prior to the effective date of such
Piggyback Registration.
(ii) Priority on Piggyback Registrations. Subject to any rights
that have been granted to security holders of the Company prior to the date
hereof (the "Prior Rights"). The Company shall cause the managing underwriters
of a proposed underwritten offering to permit holders of Registrable Shares
requested to be included in the registration for such offering to include all
such Registrable Shares on the same terms and conditions as any similar
securities, if any, of the Company or any selling security holder included.
Notwithstanding the foregoing, if the managing underwriters of such underwritten
offering determines in good faith that the total number of securities that such
Holders, the Company, and any other person having rights to participate in such
registration, propose to include in such offering is such as to materially and
adversely affect the success of such offering, then, subject to the Prior
Rights, (x) if such Piggyback Registration is a primary registration on behalf
of the Company, the securities to be offered (i) for the account of all such
other persons shall be reduced or limited pro rata in proportion to the
respective dollar amounts of securities owned to the extent necessary to reduce
the total number of securities to be included in such offering to the amount
recommended by such managing underwriters, and (y) if such Piggyback
Registration is an underwritten secondary registration on behalf of the holders
of securities of the Company, the Company shall include in such registration:
(A) first, up to the full number of securities of such persons exercising
"demand" registration rights that in the opinion of such underwriter can be sold
(allocated among such holders as they may so determine), and (B) second, the
number of securities included in such registration pursuant to this Section 2.2
in excess of the securities such persons exercising "demand" registration rights
proposed to sell that, in the opinion of such managing underwriter, can be sold
(allocated pro rata on the basis of the aggregate dollar amount of securities
requested to be included therein). The rights granted under this Section 2(e)
may only be exercised by a Holder in a non-underwritten offering, if Rule 144(k)
(or any successor rule) is not then available for the sale of the Holder's
Registrable Shares.
3. Registration Procedures
In connection with the obligations of the Company with respect to
the Shelf Registration Statement pursuant to Section 2(a) hereof, the Company
shall as soon as reasonably possible:
(a) prepare and file with the SEC a Shelf Registration Statement
on the appropriate form under the 1933 Act, which form (x) shall be selected by
the Company and (y) shall be available for the sale of the Registrable Shares by
the selling Holders thereof, and which Shelf Registration Statement shall comply
as to form in all material respects with the requirements of the applicable form
and include all financial statements by the SEC to be filed therewith, and the
Company shall use commercially reasonable efforts to cause such Shelf
Registration
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<PAGE> 6
Statement to become effective and remain effective in accordance with Section 2
hereof, and upon the occurrence of any event that would cause any such Shelf
Registration Statement or the Prospectus contained therein (A) to contain a
material misstatement or omission or (B) not to be effective and usable during
the period required by this Agreement, the Company shall file promptly an
appropriate amendment to such Shelf Registration Statement, in the case of
clause (A), correcting any such misstatement or omission, and, in the case of
either clause (A) or (B), use its best efforts to cause such amendment to be
declared effective and such Shelf Registration Statement and the related
Prospectus to become usable for their intended purpose(s) as soon as practicable
thereafter;
(b) prepare and file with the SEC such amendments and
post-effective amendments to the Shelf Registration Statement as may be
necessary to keep such Registration Statement effective for the applicable
period and cause each Prospectus to be supplemented by any required prospectus
supplement and, as so supplemented, to be filed pursuant to Rule 424 under the
1933 Act and to keep each Prospectus current during the period described under
Section 4(3) and Rule 174 under the 1933 Act that is applicable to transactions
by brokers or dealers with respect to the Registrable Shares;
(c) furnish to the Interested Persons, and to each Underwriter of
an Underwritten Offering of Registrable Shares, if any, without charge, as many
copies, which copies may be photocopies, of each Prospectus, including each
preliminary Prospectus, and any amendment or supplement thereto and such other
documents as such Interested Persons or Underwriter may reasonably request, in
order to facilitate the public sale or other disposition of the Registrable
Shares; and the Company consents to the use of such Prospectus and any amendment
or supplement thereto in accordance with applicable law by each of the
Interested Persons and any such Underwriters in connection with the offering and
sale of the Registrable Shares covered by and in the manner described in such
Prospectus or any amendment or supplement thereto in accordance with applicable
law;
(d) use its commercially reasonable efforts to register or
qualify, by the time the Shelf Registration Statement is declared effective by
the SEC, the Registrable Shares under all applicable state securities or "blue
sky" laws of such jurisdictions in which any Holder of Registrable Shares
covered by the Shelf Registration Statement reasonably requests, to cooperate
with such Holder in connection with any filings required to be made with the
National Association of Securities Dealers, Inc. and do any and all other acts
and things which may be reasonably necessary or advisable to enable such Holder
to consummate the disposition in each such jurisdiction of such Registrable
Shares owned by such Holder; provided, however, that the Company shall not be
required to (i) qualify as a foreign corporation or as a dealer in securities in
any jurisdiction where it would not otherwise be required to qualify but for
this Section 3(d), (ii) file any general consent to service of process or (iii)
subject itself to taxation in any such jurisdiction if it is not otherwise so
subject;
(e) notify the Interested Persons promptly and, if requested by
any of the Interested Persons, confirm such advice in writing (i) when a Shelf
Registration Statement has become effective and when any post-effective
amendment thereto has been filed and becomes effective, (ii) of any request by
the SEC or any state securities authority for amendments and supplements to the
Shelf Registration Statement and Prospectus or for additional information after
the Shelf
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<PAGE> 7
Registration Statement has become effective, (iii) of the issuance by the SEC or
any state securities authority of any stop order suspending the effectiveness of
the Shelf Registration Statement or the initiation of any proceedings for that
purpose, (iv) if, between the effective date of the Shelf Registration Statement
and the closing of any sale of Registrable Shares covered thereby, the
representations and warranties of the Company contained in any underwriting
agreement, securities sales agreement or other similar agreement, if any,
relating to the offering cease to be true and correct in all material or if the
Company receives any notification with respect to the suspension of the
qualification of the Registrable Shares for sale in any jurisdiction or the
initiation of any proceeding for such purpose, (v) of the happening of any event
or existence of any fact during the period the Shelf Registration Statement is
effective which any statement made in such Shelf Registration Statement or the
related Prospectus untrue in any material respect or which requires the making
of any changes in such Shelf Registration Statement or Prospectus in order to
make the statements therein not misleading and (vi) of any determination by the
Company that a post-effective amendment to the Shelf Registration Statement
would be appropriate;
(f) make every commercially reasonable effort to obtain the
withdrawal of any order suspending the effectiveness of the Shelf Registration
Statement at the earliest possible moment and provide immediate notice to the
Interested Persons of the withdrawal of any such order;
(g) furnish to the Interested Persons, without charge, at least
one conformed copy of the Shelf Registration Statement and any post-effective
amendment thereto (without documents incorporated therein by reference or
exhibits thereto, unless requested);
(h) cooperate with the Interested Persons to facilitate the
timely preparation and delivery of certificates representing Registrable Shares
to be sold and not bearing any restrictive legends and enable such Registrable
Shares to be in such denominations (consistent with the provisions of the
Certificate of Incorporation) and registered in such names as the Holders may
reasonably request at least two business days prior to the closing of any sale
of Registrable Shares;
(i) upon the occurrence of any event contemplated by Section
3(e)(v) hereof, use its commercially reasonable efforts to prepare a supplement
or post-effective amendment to the Shelf Registration Statement or the related
Prospectus or any document incorporated therein by reference or file any other
required document so that, as thereafter delivered to the purchasers of the
Registrable Shares, such Prospectus will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The Company agrees to notify the Interested Persons to use of the
Prospectus as promptly as practicable after the occurrence of such an event, and
the Holders hereby agree to suspend use of the Prospectus until the Company has
amended or supplemented Prospectus to correct such misstatement or omission;
(j) within a reasonable time prior to the filing of the Shelf
Registration Statement, any Prospectus, any amendment to the Shelf Registration
Statement or amendment or supplement to a Prospectus or any document which is to
be incorporated by reference into the Shelf Registration Statement (except the
Company's filing under the 1934 Act) or a Prospectus after initial filing of the
Shelf Registration Statement, provide copies of such document to the Persons
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<PAGE> 8
and make such representatives of the Company as shall be reasonably requested by
the Interested Persons available for discussion of such document;
(k) make available for inspection by one representative of the
Interested Persons, any Underwriter participating in any disposition pursuant to
such Shelf Registration Statement, and accountants designated by the Interested
Persons, at reasonable times and in reasonable manner, all financial and
records, pertinent documents and properties of the Company (collectively,
"Records"), as shall be reasonably necessary to enable them to exercise any
applicable due diligence responsibilities, and cause the officers, directors and
employees of the Company to supply all information reasonably requested by any
such representative, Underwriter, attorney or accountant in connection with a
Shelf Registration Statement. Records which the Company determines, in good
faith, to be confidential and any Records which it notifies any representative
of the Holders or any Underwriter as confidential shall not be disclosed by such
persons, unless (f) the disclosure of such Records is necessary to avoid or
correct a misstatement or omission in such Shelf Registration Statement, (ii)
the release of such Records is ordered pursuant to a subpoena from a court of
competent jurisdiction or (iii) the information in such Records has generally
been made available to the public. Each Holder will be required to agree that
information obtained by it as a result of such inspections shall be deemed
confidential and shall not be used by it as the basis for any market
transactions in the securities of the Company unless and until such information
is made generally available to the public. Each Holder will be required to
further agree that it will, upon learning that disclosure of such Records is
sought in a court of competent jurisdiction, give notice to the Company and
allow the Company to undertake appropriate action to prevent disclosure of the
confidential at its expense;
(l) use its commercially reasonably efforts to cause all
Registrable Shares to be listed or quoted, as applicable on any securities
exchange or any automated quotation system on which similar securities issued by
the Company are then listed or quoted to the extent such Registrable Shares
satisfy applicable listing or quotation requirements;
(m) if reasonably requested by any Holder of Registrable Shares
covered by a Registration Statement, (i) promptly incorporate in a Prospectus
Supplement or post-effective amendment such information with respect to such
Holder as such Holder reasonably requests to be included and (ii) make all
required filings of such Prospectus supplement or such post-effective amendment
as soon as the Company has received notification of the matters to be
incorporated in such filing; provided, however, that if such Holder requests
that the Company make such amendment or supplement because such Holder provided
misleading or false information to the Company, such Holder shall bear all the
costs and expenses related to such amendment or supplement; and
(n) in connection with an Underwritten Offering pursuant to a
Shelf Registration Statement, take all actions as are reasonably requested by
the managing Underwriter in order to facilitate the disposition of the
Registrable Shares, and in such connection, (i) make such representations and
warranties to the Holders and any Underwriters of such Registrable Shares with
respect to the business of the Company and its subsidiaries, the Registration
Statement, Prospectus and documents incorporated by reference or deemed
incorporated by reference, if any, in each case, in form, substance and scope as
are customarily made by issuers to Underwriters in underwritten offerings and
confirm the same if and when requested, (ii) obtain
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<PAGE> 9
opinions of counsel to the Company (which counsel and opinions, in form, scope
and substance, shall be reasonably satisfactory to the Holders and such
Underwriters and its counsel) addressed to each Holder and Underwriter of
Registrable Shares, covering the matters customarily covered in opinions
requested in underwritten offerings, (iii) obtain "cold comfort" letters from
the independent certified public accountants of the Company (and, if applicable,
any other certified public accountant of any business acquired by the Company
for which financial statements and financial data are or are required to be
included in the Registration Statement) addressed to each Holder and Underwriter
of Registrable Shares, such letters to be in customary form and covering matters
of the type customarily covered in "cold comfort" letters in connection with
underwritten offerings, and (iv) deliver such documents and certificates as may
be reasonably requested by the Holders of a majority in principal amount of the
Registrable Shares being sold or the Underwriters, and which are customarily
delivered in underwritten offerings, to evidence the continued validity of the
representations and warranties of the Company made pursuant to clause (i) above
and to evidence compliance with any customary conditions contained in an
underwriting agreement.
The Company may require each Holder of Registrable Shares to
furnish to the Company such information regarding the Holder and the proposed
distribution by such Holder of such Registrable Shares as the Company may from
time to time reasonably request in writing. The Company may exclude from a
Registration Statement the Registrable Shares of any Holder who fails to furnish
such information in writing to the Company within 20 business days (or such
longer period if the Company agrees in writing) after the Company mails such
request. Each Holder of Registrable Shares included within the coverage of any
Registered Statement agrees to furnish promptly to the Company all information
required by applicable law to be disclosed by such Holder in order to make the
information previously to the Company not misleading.
Each Holder agrees that, upon receipt of any notice from the
Company (a "Suspension Notice") of the happening of any event of the kind
described in Section 3(e) (iii), (iv), (v) or (vi) hereof, such Holder will
forthwith discontinue disposition of Registrable Shares pursuant to the Shelf
Registration Statement until such Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 3(i) hereof, and, if
so directed by the Company, such Holder will deliver to the Company (at its
expense) all copies in it possession, other than permanent file copies then in
such Holder's possession, of the Prospectus covering such registrable Shares
current at the time of receipt of the Suspension Notice or until such Holder is
advised in writing (the "Advice") by the Company that the use of the applicable
prospectus may be resumed, and has received copies of any amendments or
supplements thereto. If the Company shall give a Suspension Notice to the
disposition of Registrable Shares pursuant to the Shelf Registration Statement,
the Company shall extend the period during which the Shelf Registration
Statement shall be maintained effective pursuant to this Agreement by the number
of days during the period from and including the date of the giving of the
Suspension Notice to and including the date when the Holders shall have received
copies of the supplemented or amended Prospectus necessary to resume such
dispositions or the Advice.
The Holders of Registrable Shares covered by a Shelf Registration
Statement who desire to do so may sell such Registrable Shares in an
Underwritten Offering. In any such Underwritten Offering, the investment banker
or investment bankers and manager or managers (the "Underwriters") that will
administer the offering will be selected by the Majority Holders
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<PAGE> 10
of the Registrable Shares included in such offering and shall be reasonably
acceptable to the Company.
No Holder may participate in an Underwritten Offering hereunder
unless such Holder (a) agrees to sell such Holder's Registrable Shares on the
basis provided in any underwriting arrangements approved by the persons or
entities entitled hereunder to approve such arrangements and (b) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting
arrangements.
4. Indemnification and Contribution.
(a) In connection with a Shelf Registration Statement, the
Company agrees to indemnify and hold harmless (i) each Holder of Registrable
Shares included in such Shelf Registration Statement, (ii) each Person, if any,
who controls any such Holder within the meaning of either Section 15 of the 1933
Act or Section 20 of the 1934 Act, or is under common control with, or is
controlled by any such Holder and (iii) the respective officers, directors,
partners, employees, representatives and agents of any Holder or any controlling
person (any person referred to in clauses (i), (ii) or (iii), an "Indemnified
Party"), from and against, to the fullest extent lawful, all losses, claims,
damages, judgments, actions, expenses and liabilities (including, without
limitation, any legal or other expenses reasonably incurred by any Indemnified
Party in connection with defending or investigating any such action or claim),
to which any Indemnified Party may subject, under the 1933 Act or otherwise,
insofar as any such loss, claim, damage, judgments, actions, expenses or
liability is directly or indirectly caused by, related to, based upon, arising
out of in connection with (i) any untrue statement or alleged untrue statement
of a material fact contained in the Shelf Registration Statement (or any
amendment thereto) pursuant to which Registrable Shares were registered under
the 1933 Act, including all documents incorporated therein by reference, (ii)
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
caused by any untrue statement or alleged untrue statement of a material fact
contained in any Prospectus (as amended or supplemented if the Company shall
have any amendments or supplements thereto), or (iii) any omission or alleged
omission to state therein a material fact necessary to make the statements
therein in light of the circumstances under which they were made not misleading,
except insofar as such losses, claims, damages, judgments, actions, expenses or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or alleged omission based upon and in conformity with
information relating to an Interested Persons furnished to the Company in
writing by the Interested Persons, expressly for use therein. This indemnity
agreement will be in addition to any liability that the Company may otherwise
have. In connection with any Underwritten Offering permitted by Section 3 of
this Agreement, the Company will also indemnify the Underwriters, if any,
selling brokers, dealers and similar securities industry professionals
participating in the distribution, their officers and directors and each Person
who controls such Persons (within the meaning of the 1933 Act and the 1934 Act)
to the same extent as provided above with respect to the indemnification of the
Indemnified Party, if requested in connection with any Registration Statement.
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<PAGE> 11
(b) Each Holder agrees, severally and not jointly, to indemnify
and hold harmless the Company, the Interested Persons, each Person, if any, who
controls the Company or any such Interested Person within the meaning of either
Section 15 of the 1933 Act or Section 20 of the 1934 Act, or is under common
control with, or is controlled by the Company or any such Interested Person and
each of their directors, officers and employees to the same extent as the
foregoing indemnity from the Company to the Interested Persons, but only with
reference to information relating to such Holder furnished to the Company in
writing by such Holder expressly for use in the Shelf Registration Statement (or
any amendment thereto) or any Prospectus (or any amendment or supplement
thereto). In no event shall the liability of any selling Holder hereunder be
greater in amount than the dollar amount of the proceeds received by such Holder
upon the sale of the Registrable Shares giving rise to such indemnification
obligation.
(c) In case any action or proceeding (including any governmental
investigation or proceeding) shall be brought, asserted or instituted involving
any Person in respect of which indemnity may be sought pursuant to either
paragraph (a) or paragraph (b) above, such the Indemnified Party shall promptly
notify the Person against whom such indemnity may be sought (the "indemnifying
party") in writing; provided however, that the failure to notify the
indemnifying party shall not relieve it of any liability which it may have under
this Section 5 except to the extent that the indemnifying party did not
otherwise learn of such action and it has been prejudiced by such failure. The
indemnifying party, upon request of the Indemnified Party, shall retain counsel
reasonably satisfactory to the Indemnified Party to represent the Indemnified
Party and any others the indemnifying party may reasonably designate in such
proceeding and shall pay the reasonable fees and disbursements of such counsel
related to such proceeding. If any such claim or action shall be brought against
an Indemnified Party, and it shall have notified the indemnifying party, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similar notified indemnified party, to
assume the defense of thereof with counsel reasonably satisfactory to be the
Indemnified Party. In any such proceeding, any Indemnified Party shall have the
right to retain its own counsel, but the fees and expenses of such counsel shall
be at the expense of such Indemnified Party unless (i) the indemnifying party
has failed to assume the defense on behalf of Indemnified Party, (ii) the
indemnifying party and the Indemnified Party shall have mutually agreed to the
retention of such counsel or (iii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
Indemnified Party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
fees and expenses of more than one separate counsel (in addition to any local
counsel) designated in writing by a majority of the Holders of Registrable
Shares seeking indemnification, if more than one Holder is an Indemnified Party,
as the case may be, and that all such reasonable fees and expenses shall be
reimbursed as they are incurred. The indemnifying party shall not be liable for
any settlement of any proceeding effected without its written consent but, if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the Indemnified Party from and against
any loss or liability by reason of such settlement or judgment. No indemnifying
party shall, without the prior written consent of the Indemnified Party, effect
any settlement of any pending or threatened proceeding in respect of which such
Indemnified Party is or could have been a party and indemnity could have been
sought hereunder by such
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<PAGE> 12
Indemnified Party, unless such settlement includes an unconditional release of
such Indemnified Party from all liability on claims that are the subject matter
of such proceeding. Notwithstanding the foregoing sentence, if at any time an
Indemnified Party shall have requested an indemnifying party to reimburse the
Indemnified Party for fees and expenses of counsel as contemplated by the second
and third sentences of this paragraph, the Indemnified Party may settle any
proceeding without the written consent of the indemnifying party, if the
indemnifying party has not agreed to indemnify the Indemnified Party pursuant to
this paragraph within 60 days of such request for indemnification from the
Indemnified Party.
(d) If the indemnification provided for in paragraph (a) or
paragraph (b) of this Section 4 is unavailable to an Indemnified Party or
insufficient in respect of any losses, claims, damages, expenses or liabilities,
then each applicable indemnifying party under such paragraph, in lieu of
indemnifying such Indemnified Party thereunder, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such losses, claims,
damages, expenses or liabilities in such proportion as is appropriate to reflect
the relative fault of the indemnifying party or parties on the one hand of the
Indemnified Party or parties on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages, expenses or
liabilities, as well as any other relevant equitable considerations. The
relative fault of the Company and the Holders 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 or by the Holders and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Holders' obligations to
contribute pursuant to this Section 5(d) are several in proportion to the number
of Registrable Shares of such Holder that were registered pursuant to a
Registration Statement.
(e) Company and each Holder agree that it would not be just or
equitable if contribution pursuant to this Section 4 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph (d) above. The amount paid
or payable by an Indemnified Party as a result of the losses, claims, damages
and liabilities referred to in paragraph (d) above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such Indemnified Party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 4, no Holder shall be required to contribute any amount in excess of the
amount by which the total price at which Registrable Shares were sold by such
Holder exceeds the amount of any damages that such Holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No Person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
from any Person who was not guilty of such fraudulent misrepresentation. The
remedies provided for in this Section 4 are not exclusive and shall not limit
any rights or remedies which may otherwise be available to any Indemnified Party
at law or in equity. The Holder's obligations to contribute pursuant to this
Section 5(e) are several in proportion to the respective amount of Registrable
Shares registered by each of the Holders and not jointly.
(f) Survival. The indemnity and contribution provisions contained
in this Section 4 shall remain operative and in full force and effect regardless
of (i) any termination of this
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<PAGE> 13
Agreement, (ii) any investigation made by or on behalf of the Interested Persons
or any person controlling the Interested Persons, or by or on behalf of the
Company, its officers or directors or any Person controlling the Company, and
(iii) any sale of Registrable Shares pursuant to the Shelf Registration
Statement.
(a) No Inconsistent Agreements. The Company has not entered into,
and on or after the date of this Agreement will not enter into, any agreement
which is inconsistent with the rights granted to the Holders of Registrable
Shares in this Agreement or otherwise conflicts with the provisions hereof. The
rights granted to the Holders hereunder do not in any way conflict with and are
not inconsistent with the rights granted to the holders of the Company's other
issued and outstanding securities under any such agreements.
(b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, a waivers or consents to departures from the provisions hereof may
not be given, unless the Company has obtained the written consent of Holders of
at least a majority of the outstanding Registrable Shares affected by such
amendment, modification, supplement, waiver or consent; provided however, that
no amendment, modification, supplement, waiver or consents to any departure from
the provisions of Section 4 hereof shall be effective as against any Holder of
Registrable Shares unless consented to in writing by such Holder.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such Holder to
the Company by means of a notice given in accordance with the provisions of this
Section 5(c), which address initially is as set forth on Schedule A, (ii) if to
the Company, initially at 10 Alvin Court, East Brunswick, New Jersey 08816,
Attention: Michael A. DeGiglio, President, with a copy to Giordano, Halleran &
Ciesla, D.C., 125 Half Mile Road, P.O. Box 190, Middletown New Jersey 07747,
Attention: Philip D. Forlenza, and thereafter at such other address, notice of
which is given in accordance with the provisions of this Section 5(c).
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied; and
on the next business day, if timely delivered to an air courier guaranteeing
overnight delivery.
(d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of each
of the parties, including, without limitation and without the need for an
express assignment, subsequent Holders; provided that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of Registrable
Shares in violation of the terms of the Stock Purchase Agreement. If any
transferee of any Holder shall acquire Registrable Shares, in any manner,
whether by operation of law or otherwise, such Registrable Shares shall be held
subject to all of the terms of this Agreement, and by taking and holding such
Registrable Shares such person shall be conclusively deemed to
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<PAGE> 14
have to be bound by and to perform all of the terms and provisions of this
Agreement and such person shall be entitled to receive benefits hereof.
(e) Counterparts. This Agreement may be executed manually or by
telecopier in any number of counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together shall constitute one
and the same agreement.
(f) Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NORTH CAROLINA,
WITHOUT REGARD TO THE CONFLICT OF LAW RULES THEREOF.
(h) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
(i) Entire Agreement. This Agreement (together with the Stock
Purchase Agreement) is intended by the parties as a final expression of their
agreement and intended to be a complete and exclusive statement of the agreement
and understanding of the parties hereto in respect of the subject matter
contained herein. Them are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein (or therein) with
respect to the registration rights granted by the Company with respect to the
Registrable Shares. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
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<PAGE> 15
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first written above.
ECOSCIENCE CORPORATION
By: /s/ J. KEVIN COBB
-------------------------------
Name: J. Kevin Cobb
Title: Senior Vice President
COGENTRIX DELAWARE
HOLDINGS, INC.
By: /s/ THOMAS F. SCHWARTZ
-------------------------------
Name: Thomas F. Schwartz
Title: Senior Vice President -
Finance and Treasurer
- 15 -
<PAGE> 16
SCHEDULE 2(d)
Consent of Silicon Valley Bank under Loan and Security Agreement dated April 28,
1997
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<PAGE> 1
EXHIBIT 99.3
FIRST AMENDMENT TO
REGISTRATION RIGHTS AGREEMENT
This First Amendment to Registration Rights Agreement is made and
entered into as of March 11, 1999 by and among ECOSCIENCE CORPORATION (the
"Company"), a Delaware corporation and Cogentrix Delaware Holdings, Inc., a
Delaware corporation ("CDH").
WHEREAS, the Company and CDH have entered into a Registration Rights
Agreement dated as of December 30, 1998 (the "Registration Rights Agreement");
WHEREAS, the Company and CDH with to amend certain provisions of the
Registration Rights Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
set forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:
1. Amendment of Agreement. The references to the date "March 16, 1999"
contained in Sections 2(a), 2(c) and 2(e)(i) of the Registration Rights
Agreement are hereby deleted and replaced with the date "June 15,
1999."
2. Representation of CDH. CDH hereby represents that it is the sole owner
of the Shares (as defined in the Registration Rights Agreement) and it
has not transferred or assigned any of such Shares or its rights under
the Registration Rights Agreement to any other party.
IN WITNESS WHEREOF, the parties have executed and delivered this First
Amendment to Registration Rights Agreement as of the date first above written.
ECOSCIENCE CORPORATION
By: /s/ J. KEVIN COBB
----------------------------------------
Name: J. Kevin Cobb
Title: Senior Vice President
COGENTRIX DELAWARE HOLDINGS, INC.
By: /s/ THOMAS F. SCHWARTZ
----------------------------------------
Name: Thomas F. Schwartz
Title: Senior Vice President-Finance
and Treasurer
