EXHIBIT 3.3
SUBSCRIPTION AGREEMENT
This Subscription Agreement ("Agreement") is entered into as of July __,
2003 (the "Effective Date"), by and between Organic Corporation of America, a
Delaware corporation (the "Company"), and Medical Nutrition USA, Inc., a
Delaware corporation ("Purchaser"). The Company and Purchaser agree as follows:
1. SALE AND PURCHASE. The Company hereby agrees to sell, and the Purchaser
hereby agrees to purchase, six percent (6%) of the Company's issued and
outstanding capital stock (as determined on a fully-diluted basis) (the
"Shares") for aggregate consideration of $150,000. The closing of the sale and
purchase of the Shares will take place on the Effective Date.
2. REPRESENTATIONS AND WARRANTIES OF COMPANY. The Company represents and
warrants that:
2.1 Organization. The Company is a corporation duly organized and
existing under the laws of the State of Delaware with its principal place
of business at __________________________. It has the power to own its
property and to carry on its business as it is now being conducted. It is
duly qualified and authorized to do business and is in good standing in
every state, country, or other jurisdiction in which the nature of its
business and properties makes such qualification necessary.
2.2 Authority. The Company has full power and authority to execute
and deliver this Agreement, to issue the Shares and any other instrument
or agreement required under this Agreement, and to perform and observe the
terms and provisions of this Agreement and of all such other instruments
and agreements.
2.3 Corporate Action. All corporate action by the Company, its
directors or stockholders, necessary for the authorization, execution,
delivery, and performance of this Agreement, the issuance of the Shares
and any other instrument or agreement required under this Agreement has
been duly taken.
2.4 Incumbency and Authority of Signators. The officer(s) of the
Company executing this Agreement, the Shares and any other instrument or
agreement required under this Agreement are duly and properly in office
and fully authorized to execute them.
2.5 Due and Valid Execution. This Agreement has been duly
authorized, executed, and delivered by the Company, and is a legal, valid,
and binding agreement of the Company, enforceable against the Company in
accordance with the terms and provisions hereof, except (a) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
laws of general application affecting enforcement of creditors' rights and
(b) general principles of equity that restrict the availability of
equitable remedies. The Shares and any other instrument or agreement
required under this Agreement has been so authorized and, when executed
and delivered, will be similarly valid, binding and enforceable.
2.6 Capitalization. Attached hereto as Exhibit A is a capitalization
table that sets forth the Company's capitalization immediately prior to
the issuance of the Shares.
2.7 No Violation. There is no charter, bylaw, or capital stock
provision of the Company, and no provision of any indenture or agreement,
written or oral, to which the Company is a party or under which the
Company is obligated, nor is there any statute, rule, or regulation, or
any judgment, decree, or order of any court or agency binding on the
Company which would be contravened by the execution and delivery of this
Agreement, the Shares or any other instrument or agreement required under
this Agreement, or by the performance of any provision, condition,
covenant or other term of this Agreement, the Shares or any such other
instrument or agreement.
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2.8 Litigation Pending. There is no litigation, tax claim,
proceeding or dispute pending, or, to the knowledge of the Company,
threatened, against or affecting the Company or its property, the adverse
determination of which might affect the Company's financial condition or
operations or impair the Company's ability to perform its obligations
under this Agreement or under the Shares or any other instrument or
agreement required by this Agreement.
3. REPRESENTATIONS AND WARRANTIES OF PURCHASER. This Agreement is made
with Purchaser in reliance upon Purchaser's representation and warranties to the
Company, which by Purchaser's execution of this Agreement Purchaser hereby
confirms, that:
3.1 Authorization. This Agreement constitutes Purchaser's valid and
legally binding obligation, enforceable in accordance with its terms.
3.2 Investment Intent. The Shares to be received by Purchaser will
be acquired for investment for Purchaser's own account, not as a nominee
or agent, and not with a view to the resale or distribution of any part
thereof, and Purchaser has no present intention of selling, granting any
participation in, or otherwise distributing the same. By executing this
Agreement, Purchaser further represents that Purchaser does not have any
contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participation to such person or to any third person,
with respect to the Shares.
3.3 Enforceability. The Purchaser hereby represents and warrants
that the execution and delivery by Purchaser of this Agreement, when duly
executed by the other parties hereto, will result in legally binding
obligations of Purchaser, enforceable against him, her or it in accordance
with the respective terms and provisions hereof, except (a) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
laws of general application affecting enforcement of creditors' rights and
(b) general principles of equity that restrict the availability of
equitable remedies.
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3.4 Disclosure of Information. Purchaser believes Purchaser has
received all the information Purchaser considers necessary or appropriate
for deciding whether to acquire the Shares. Purchaser further represents
that Purchaser has had an opportunity to ask questions and receive answers
from officers of the Company regarding the Company, its business and the
terms and conditions of the Shares. Purchaser recognizes that any
investment in the Company must be considered to be highly speculative.
3.5 Confidentiality. Purchaser hereby represents, warrants and
covenants that Purchaser shall maintain in confidence, and shall not use
or disclose without the prior written consent of the Company, any
information identified as confidential that is furnished to Purchaser by
the Company in connection with this Agreement. This obligation of
confidentiality shall not apply, however, to any information (a) in the
public domain through no unauthorized act or failure to act by Purchaser;
or (b) lawfully disclosed to Purchaser by a third party who possessed such
information without any obligation of confidentiality. Purchaser further
covenants that Purchaser shall return to the Company all tangible
materials containing such information upon request by the Company.
3.6 Investment Experience. Purchaser is a Purchaser and investor in
securities of companies in the development stage and acknowledges
Purchaser is able to fend for himself, herself or itself, can bear the
economic risk and complete loss of Purchaser's investment and has such
knowledge and experience in financial or business matters that Purchaser
is capable of evaluating the merits and risks of the investment in the
Shares.
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3.7 Restricted Securities. Purchaser understands the Shares
Purchaser is acquiring are characterized as "restricted securities" under
the federal securities laws inasmuch as they are being acquired from the
Company in a transaction not involving a public offering and that under
such laws and applicable regulations such securities may not be resold
without registration under the Securities Act of 1933, as amended (the
"Securities Act"), except in certain limited circumstances. In this
connection Purchaser represents that Purchaser is familiar with Securities
and Exchange Commission ("SEC") Rule 144, as presently in effect, and
understands the resale limitations imposed thereby and by the Securities
Act.
3.8 Further Limitations on Disposition. Without in any way limiting
the representations set forth above, Purchaser further agrees not to make
any disposition of all or any portion of the Shares unless and until:
3.8.1 There is then in effect a registration statement under
the Securities Act covering such proposed disposition and such
disposition is made in accordance with such registration statement;
or
3.8.2 (a) Purchaser shall have notified the Company of the
proposed disposition and shall have furnished the Company with a
detailed statement of the circumstances surrounding the proposed
disposition and (b) if reasonably requested by the Company,
Purchaser shall have furnished the Company with an opinion of
counsel that such disposition will not require registration of such
shares under the Securities Act.
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3.9 Legends. It is understood the certificate representing the
Shares ("Certificate") may bear one or more of the following legends:
"These securities have not been registered under the
Securities Act of 1933. They may not be sold, offered for
sale, pledged or hypothecated in the absence of a registration
statement in effect with respect to the securities under such
Act or an opinion of counsel satisfactory to the Company that
such registration is not required or unless sold pursuant to
Rule 144 of such Act."
3.10 Accredited Investor. Purchaser is an "accredited
investor" as that term is defined in CFR Section 230. 501(a)
(Regulation D), as amended, of the SEC under the Securities Act.
3.11 Removal of Legends; Further Covenants.
3.11.1 Any legend placed on the Shares or a Certificate
pursuant to Section 3.9 hereof shall be removed (a) if the
Shares shall have been effectively registered under the
Securities Act or otherwise lawfully sold in a public
transaction, (b) if the shares may be transferred in
compliance with Rule 144(k) promulgated under the Securities
Act, or (c) if Purchaser shall have provided the Company with
an opinion of counsel, in form and substance acceptable to the
Company and its counsel and from attorneys reasonably
acceptable to the Company and its counsel, stating that a
public sale, transfer or assignment of the Shares may be made
without registration.
3.11.2 Any legend placed on the Shares pursuant to
Section 3.9 hereof shall be removed if the Company receives an
order of the appropriate state authority authorizing such
removal or if Purchaser provides the Company with an opinion
of counsel, in form and substance acceptable to the Company
and its counsel and from attorneys reasonably acceptable to
the Company and its counsel, stating that such state legend
may be removed.
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3.11.3 Purchaser further covenants that Purchaser will not
transfer the Shares, in violation of the Securities Act, the
Securities and Exchange Act of 1934, as amended (the "Exchange
Act"), or the rules of the Commission promulgated thereunder,
including Rule 144 under the Securities Act. Further, Purchaser
agrees that Purchaser will not transfer the Shares without the
Company's prior consent, even if Purchaser is otherwise permitted to
transfer them pursuant to this Agreement and applicable law.
3.12 Risk Factors. The Purchaser agrees and acknowledges that
there are risk factors related to, among other things, (a) the sale
by the Company of the Shares, and (b) the Company's business and
financial condition. THE PURCHASER IS AWARE THAT PURCHASER'S
INVESTMENT IN THE SHARES IS A SPECULATIVE INVESTMENT THAT HAS
LIMITED LIQUIDITY AND IS SUBJECT TO THE RISK OF COMPLETE LOSS. THE
PURCHASER IS ABLE, WITHOUT IMPAIRING PURCHASER'S FINANCIAL
CONDITION, TO SUFFER A COMPLETE LOSS OF PURCHASER'S INVESTMENT IN
THE SHARES.
4. COVENANTS OF THE COMPANY [DISCUSS]
4.1 Voting. Without the consent of the holders of an _______ percent
(__%) super-majority of the Company's outstanding capital stock, the Company
will not take any action that: [DISCUSS]
4.1.1 alters or changes the rights, preferences or privileges
of the Company's Common Stock;
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4.1.2 amends the Certificate of Incorporation or Bylaws of the
Company;
4.1.3 authorizes or issues, or obligates the Company to issue,
whether by recapitalization, reclassification or otherwise, any
other equity security, including any other security convertible into
or exercisable for any equity security;
4.1.4 increases or decreases the size of the Company's Board
of Directors;
4.1.5 causes the Company to engage in any business other than
the business in which it is engaged as of the Effective Date;
4.1.6 causes the Company to make a material acquisition of the
stock, assets or business of any other entity in any form of
transaction;
4.1.7 causes the Company to sell, convey, or otherwise dispose
of or encumber all or substantially all of its property or business
or merge into or consolidate with any other entity (other than a
wholly-owned subsidiary corporation) or effect any transaction or
series of related transactions in which more than fifty percent of
the voting power of the Company is disposed of;
4.1.8 causes the Company to incur indebtedness or make any
loan or advance of more than $100,000 in the aggregate;
4.1.9 increases or decreases the total number of authorized
shares of Common Stock;
4.1.10 causes the Company to make any capital expenditure in
excess of $100,000;
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4.1.11 causes the Company to guarantee any third party
obligations in excess of $100,000;
4.1.12 causes the Company to redeem, purchase or otherwise
acquire (or pay into or set aside for a sinking fund for such
purpose) any share or shares of capital stock;
4.1.13 causes the Company to enter into any transaction or
transactions with any director, officer or stockholder of the
Company, or any affiliate or family member of the foregoing; or
4.1.14 causes the Company to pay any bonus compensation to any
officer, director or employee of the Company.
4.2 Information. [DISCUSS]
4.2.1 As soon as practicable after the end of each fiscal year
of the Company, and in any event within ninety (90) days thereafter,
the Company will furnish to Purchaser a balance sheet of the
Company, as at the end of such fiscal year, and a statement of
income and a statement of cash flows of the Company, for such year,
all prepared in accordance with generally accepted accounting
principles consistently applied (except as noted therein) and
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail. Such financial
statements shall be accompanied by a report and opinion thereon by
independent public accountants of national standing selected by the
Board.
4.2.2 The Company will furnish to Purchaser, as soon as
practicable after the end of the first, second and third quarterly
accounting periods in each fiscal year of the Company, and in any
event within forty-five (45) days thereafter, a balance sheet of the
Company as of the end of each such quarterly period, and a statement
of income and a statement of cash flows of the Company for such
period and for the current fiscal year to date, prepared in
accordance with generally accepted accounting principles
consistently applied (except as noted therein), with the exception
that no notes need be attached to such statements and year-end audit
adjustments may not have been made.
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4.2.3 Within fifteen (15) days of the end of each month an
unaudited income statement and statement of cash flows and balance
sheet for and as of the end of such month, in reasonable detail.
4.2.4 The Company will furnish to Purchaser at least thirty
(30) days prior to the beginning of each fiscal year an annual
budget and operating plans for such fiscal year (and as soon as
available, any subsequent written revisions thereto).
4.2.5 The Company shall furnish Purchaser such other financial
and operating data and such other information with respect to the
Company's business, properties and assets as Purchaser may from time
to time request.
4.3 Board of Directors. The Company shall take all appropriate
actions to fix and maintain its Board of Directors at _______ directors,
one member of which shall be selected by Purchaser. [DISCUSS]
5. RIGHT OF FIRST OFFER. [DISCUSS]
4.1 Subject to applicable securities laws, the Purchaser shall have
a right of first offer to purchase its pro rata share of all Equity
Securities (as defined below) that the Company may, from time to time,
propose to sell and issue after the Effective Date. The Purchaser's pro
rata share is equal to the ratio of (a) the number of shares of the
Company's Common Stock which the Purchaser is deemed to be a holder
immediately prior to the issuance of such Equity Securities to (b) the
total number of shares of the Company's outstanding Common Stock
(including all shares of Common Stock issued or issuable upon conversion
of outstanding Preferred Stock or upon the exercise of any outstanding
warrants or options) immediately prior to the issuance of the Equity
Securities.
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5.2 If the Company proposes to issue any Equity Securities, it shall
give the Purchaser written notice of its intention, describing the Equity
Securities, the price and the terms and conditions upon which the Company
proposes to issue the same. The Purchaser shall have thirty (30) days from
the giving of such notice to agree to purchase its pro rata share of the
Equity Securities for the price and upon the terms and conditions
specified in the notice by giving written notice to the Company and
stating therein the quantity of Equity Securities to be purchased.
5.3 If the Purchaser fails to exercise in full the rights of first
refusal, the Company shall have ninety (90) days thereafter to sell the
Equity Securities in respect of which the Purchaser's rights were not
exercised, at a price and upon general terms and conditions not materially
more favorable to the purchasers thereof than specified in the Company's
notice to the Purchaser pursuant to Section 5.2 hereof. If the Company has
not sold such Equity Securities within ninety (90) days of the notice
provided pursuant to this Section 5.3, the Company shall not thereafter
issue or sell any Equity Securities, without first offering such
securities to the Purchaser in the manner provided above.
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5.4 The rights of first refusal established by this Section 5 shall
not apply to, and shall terminate upon the effective date of the
registration statement pertaining to the Company's initial public offering
of securities.
5.5 "Equity Securities" shall refer to (a) any capital stock
(including Common Stock and/or Preferred Stock) of the Company whether now
authorized or not, and rights, options or warrants to purchase such
capital stock, and securities of any type that are, or may become,
convertible into capital stock, or (b) any stock appreciation rights or
phantom stock rights.
6. RIGHT OF FIRST REFUSAL; RIGHT OF CO-SALE. [DISCUSS]
6.1 Promptly following the execution of this Agreement the Company's
stockholders shall enter a stockholder agreement, pursuant to which the
Purchaser shall have a right to participate on a pro rata basis in any
secondary sales by a holder of the Company's capital stock, or in the
alternative, at the sole option of the Purchaser, have a right of first
refusal with respect to any such sale.
7. MISCELLANEOUS.
7.1 Notices. Any communications between the parties or notices
provided for in this Agreement may be given by mailing them, first class,
postage prepaid, to
Purchaser at:
If to the Company at:
Organic Corporation of America
______________________________
______________________________
Attn:_________________________
and to the Purchaser at:
Medical Nutrition USA, Inc.
00 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxx Xxxxxx
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With a copy to:
Xxxxx & Lardner
000 Xxxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx
or to such other address as either party may indicate to the other in writing
after the date of this Agreement.
7.2 Successors and Assigns. This Agreement shall bind and inure to
the benefit of the parties and their respective successors and assigns;
provided, however, that the Company shall not assign this Agreement or any
of the rights, duties, or obligations of the Company under this Agreement
without the prior written consent of Purchaser.
7.3 Attorney Fees. In the event of any legal action or suit in
relation to this Agreement, the prevailing part shall be entitled to
recover its reasonable attorney fees.
7.4 Severability. In the event any sentence or paragraph of this
Agreement is declared void by a court of competent jurisdiction, said
sentence or paragraph shall be deemed severed from the remainder of this
Agreement, and the balance of this Agreement shall remain in effect.
7.5 Titles, Captions and Paragraph Headings. Paragraph and
subparagraph titles and captions contained in this Agreement are inserted
only as a matter of convenience for reference. Such titles, captions, and
paragraph headings in no way define, limit, extend or describe the scope
of this Agreement or the intent of any provisions hereof.
7.6 Number and Gender. Whenever a singular number is used in this
Agreement or where required by context, the same shall include plural.
Masculine gender shall include feminine and neuter genders and the word
"person" shall include corporation, firm, partnership, or other forms of
association.
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7.7 Entire Agreement. This Agreement constitutes the entire
Agreement between all parties herein and supersedes all prior Agreements
and understandings, oral or written, between the parties hereto with
respect to the subject matter hereof, and shall not be modified or amended
except in writing, executed by all parties herein.
7.8 Counterparts. This Agreement may be executed in several
counterparts, and as so executed shall constitute an Agreement, binding to
all parties herein. Each counterpart may be signed and transmitted via
facsimile with the same validity as if it were an ink-signed document.
7.9 Amendment. This Agreement may be amended by written agreement
signed by the parties hereto.
7.10 Non-Waiver. No delay or omission on the part of any party
herein in exercising any rights or remedies herein shall operate as a
waiver of such rights or remedies. No waiver of any default shall
constitute a waiver of any other default, whether of the same or any other
covenant or condition. No waiver, benefit, privilege or service
voluntarily given or performed by any party herein shall give the other
parties any contractual right by custom, estoppel or otherwise. Any waiver
by any party herein must be executed in writing, expressly specifying the
subject and extent of the waiver.
7.11 Governing Law and Venue. This Agreement and all amendments
hereto shall be governed, construed, and enforced in accordance with the
laws of the State of Delaware.
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7.12 Construction. This Agreement has been negotiated between the
parties and their advisors, and shall not be construed against the party
preparing it, but shall be construed as if all parties jointly prepared
this Agreement and any uncertainty and ambiguity shall not be interpreted
against any one party.
7.13 No Other Inducement. The making, execution and delivery of this
Agreement by the parties hereto has been induced by no representations,
statements, warranties or agreements other than those expressed herein.
7.14 Expenses. Each of the parties will bear their own expenses and
costs (including, without limitation, attorneys' fees and expenses)
incurred in connection with the negotiation and preparation of this
Agreement, the Shares and any other instrument or agreement required under
this Agreement
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IN WITNESS WHEREOF, the parties to this Agreement have executed this
Agreement by their duly authorized officers effective as of the day and year
first above written.
"PURCHASER" Medical Nutrition USA, Inc.,
a Delaware corporation
By:_________________________________
Print Name:__________________________
Title:________________________________
"COMPANY" Organic Corporation of America,
a Delaware corporation
By:_________________________________
Print Name:__________________________
Title:________________________________
(if applicable)
[SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT]
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EXHIBIT A
CAPITALIZATION
--------------------------------------------------
Stockholder Number of Shares
--------------------------------------------------
Xxxxx X. Xxxxx 121,792
--------------------------------------------------
Xxx Xxxxxxxxx 121,792
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Estate of Xxxxxx Xxxxxx 12,000
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Xxxxx X. Ebaniettti 6,400
==================================================
Total 261,948
--------------------------------------------------
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