Exhibit 3.14
SUBSCRIPTION AGREEMENT
FOOD EXTRUSION, INC. (the "Company") and Xxxxxxx EuroInvest (the "Subscribers"),
effective January 1, 1996 agree as follows:
1. Background. The Company is offering to Subscriber, along with certain
other creditors, the opportunity to convert debt into shares of Common
Stock of the Company ("Shares"). Subscriber is a creditor of the
Company to whom the Company owes Seventy Five Thousand Dollars
($75,000) plus accrued and unpaid interest ("Debt"). The Company now
desires to transfer to Subscriber, and Subscriber desires to accept
from the Company, in exchange for the cancellation other Debt, the
number of Shares, and on the terms and conditions, set forth below.
2. Purchase of Shares. Subscriber hereby agrees to purchase 15,000 Shares
in exchange for cancellation of Debt, for a purchase price of Five
Dollars ($5.00) of debt cancellation per share ('Purchase Price"). Such
exchange shall be rounded down to the nearest five dollar ($5.00)
increment. The Company shall deliver to Subscriber a share certificate
evidencing the Shares.
3. Cancellation of Debt. With the execution of this Agreement, Subscriber
hereby cancels the obligation of the Company to Subscriber in the
amount of Seventy Five Thousand Dollars ($75,000) plus accrued and
unpaid interest, subject only to the condition that the Company accepts
Subscriber's offer to purchase the Shares set forth herein and
consummates the transaction by vesting ownership of the Shares in
Subscriber. Subscriber shall take all actions necessary and proper, and
shall deliver all documents appropriately endorsed and canceled
including without limitation a purchaser questionnaire and any
promissory notes or other evidences of indebtedness, to consummate the
debt cancellation contemplated hereunder.
4. Common Stocks Warrant. The Company offers subscriber to purchase up to
55,000 shares of Common Stock at $.01 per share as further
consideration for assisting the Company with financial consulting and
capital structuring.
5. Acknowledgements. Subscriber acknowledges and understands the following:
(a) No federal or state agency has made any funding or
determination as to the fairness of the offering of the Shares
for investment, or any recommendation or endorsement of the
Shares;
(b) These securities involve a high degree of risk and should not
be purchased by anyone who cannot afford the risk of loss of
that investor's entire investment;
(c) The offering of Shares has not been registered under the
Securities Act of 1933, as amended (the "Act"), or qualified
under the securities laws of any jurisdiction, and the Shares
may not be offered for sale, sold or otherwise transferred
unless so registered and qualified or unless an exemption from
such registration and qualification is available. The Company
is under no obligations to so register or qualify the Shares;
(d) This Agreement has been prepared for distribution to a limited
number of debt holders to enable them to participate in the
proposed investment in the Company. This Agreement does not
constitute an offer of securities, but rather is a
solicitation of an offer to purchase. Offers to purchase will
be accepted only from persons eligible as Accredited
Investors, as described in the Act, for participation by the
Company in its sole discretion;
(e) At no time have any of the following been guaranteed or
warranted to Subscriber by the Company, any of its officers,
directors, agents or employees, or any other person, expressly
or by implication:
(i) the approximate or exact length of time that
Subscriber will be required to remain the owner of
the Shares;
(ii) the amount of profit and/or amount of any type of
consideration, profit or loss, if any, to be realized
as a result of this investment; or
(iii) any prediction as to the future successful operation
of the Company.
(f) No representations or warranties of any kind are intended to
be made in this Agreement nor should any be inferred from the
information and statements contained herein with respect to
the economic return or benefits which may accrue to investors.
No assurance will be given that existing tax laws will not be
changed or interpreted adversely. Prospective investors are
not construe the contents of this Agreement or any prior,
concurrent or subsequent communication from the Company or its
officers, directors, agents employees, or any professional
associated with this offering as legal tax or investment
advice. Each investor should consult with his or her own
counsel, accountant, and other advisors as to the legal tax
and related matters concerning the transactions described
herein and a purchase by such investor of the Shares.
(g) If you have any questions regarding this offering or desire
any additional information or documents to verify or
supplement the information contained in this Agreement or any
prior, concurrent or subsequent communication from the Company
or its officers or directors, please write or call (or have
your purchaser representative write or call) Xxxxxx X. XxXxxx,
Chairman & CEO, Food Extrusion, Inc. 1241 Hawk's Xxxxxx Xxxxx,
Xx Xxxxxx Xxxxx, Xxxxxxxxxx 00000.
Phone: (000) 000-0000 or Fax: (000) 000-0000.
6. Risk Factors. Subscriber acknowledges and understands the following risk
factors:
(a) No Certainty of Dividends. The Company has never paid cash or
other dividends and does not expect to pay cash or other
dividends in the foreseeable future with respect to its Common
Stock. Dividends, if any, will at all times be distributed
only after the payment of current Company expenses and the
maintenance of adequate reserves. Shareholders who receive
dividends of cash may be liable under California law to repay
them to the Company if Company assets are not adequate to
discharge its liabilities to creditors at the time of
dissolution.
(b) Dependency on Key Personnel. The success of the Company is
heavily dependent upon retaining key management and
engineering personnel. Untimely loss of these personnel during
the start-up process could adversely affect revenue
generation.
(c) Tax Consequences. The tax consequences to Subscriber of
investing in the Company will depend on Subscriber's
particular circumstances and neither the Company nor its
officers, directors, employees, agents affiliates, or
consultants of any of them will be responsible to Subscriber
for the tax consequences of any investment in the Company.
Subscriber will look solely to, and rely upon, his or her own
advisor with respect to the tax consequences of this
investment;
(d) Merger. There is no assurance as to the outcome, and the
effect on the marketability of the Shares, of the merger with
Core Iris which is currently being evaluated by the Company
and which was described to Subscriber in the letter from the
Company dated November 9, 1995. There is no assurance that the
merger will be consummated by the Company.
(e) Arbitrary Offering Price. The offering price of the Shares has
been determined arbitrarily by the Company and does not
necessarily bear any relationship to the assets, book value or
any other recognized criteria of value of the Company's
assets. No assurance is or can be given that any Shares, if
transferable, could be sold for the offering price or for any
amount.
7. Representations, Warranties, and Covenants. Subscriber represents,
warrants and covenants as follows:
(a) Subscriber is acquiring the Shares for Subscribers own
account, solely for investment and not with a view to resale
or distribution.
(b) Subscriber either:
(i) has a preexisting personal or business relationship
with the Company or one of its officers, directors,
affiliates, agents or employees: or
(ii) by reason of Subscriber's business or financial
experience or the business or financial experience of
Subscriber's professional advisor who is not
affiliated with or compensated by the Company, has
the capacity to evaluate adequately the merits and
risks of, and protect his or her own interests in
connection with this investment. If Subscriber uses a
professional advisor, Subscriber and the professional
advisor have execute an Statement of Purchaser
Representative, attached hereto;
(c) Subscriber is an "accredited investor" as such term is defined
herein. For purposes of this Agreement, an "accredited
investor"
(i) The investor in a natural person who has a net worth
individually or jointly with that person's spouse, at
the time of his or her purchase, of more than one
million dollars ($1,000,000);
(ii) The investor is a natural person who had an
individual income in excess of two hundred thousand
dollars ($200,000) in each of the two most recent
years or joint income with that person's spouse of
more than three hundred thousand dollars ($300,000)
in each of those years and has a reasonable
expectation of reaching the same income level in the
current year
(iii) The investor is a trust, with total assets of at
least five million dollars ($5,000,000), not formed
for the specific purpose of acquiring the securities
offered, whose purchase is directed by a
sophisticated person as described in the Securities
Exchange Commission ("SEC") Rule 506 (b)(2)(ii);
(iv) The investor is an entity in which all of the equity
owners are accredited investors;
(v) The investor is a "bank," "broker/dealer," "Insurance
company," Investment company," "Small Business
Investment Company," or "private business development
company," as such terms are defined under federal
securities laws; or certain employee benefit plans
within the meaning of the Employee Retirement
Security Act of 1974, as amended; or a corporation, a
Massachusetts or similar business trust, or a
partnership; and, for any of the above entities, the
entity was not formed for the specific purpose of
acquiring the securities offered, and has total
assets in excess of five million dollars
($5,000,000).
(d) Subscriber can afford to bear the economic risks of this
investment for an indefinite period and has no need for
liquidity in this investment. Subscriber has adequate means of
providing for Subscriber's current needs and contingencies if
this investment results in a total loss;
(e) Subscriber is acquiring the Shares without having been
furnished any offering memorandum or prospectus. Subscriber is
aware of and has investigated the Company's business,
management and financial condition, and has had the
opportunity to inspect the Company's facilities and has had
access to all such other information about the Company as
Subscriber had deem necessary or desirable to reach an
informed and knowledgeable investment decision;
(f) The Company has made available to the Subscriber all documents
that have been requested relating to an investment in the
Company and has provided answers to all of Subscriber's
questions concerning the offering. In evaluating the
suitability of an investment in the Company, subscriber has
not relied upon any representations or other information
(whether oral or written) other than as contained in any
documents or answers to questions furnished by the Company, or
gained through Subscriber's due diligence described in subpart
(d);
(g) Subscriber recognizes that the investment in the Company
involves risk, including a risk of total loss of Subscriber's
investment and that the success of the Company is dependent
upon many factors which are not in the control of the Company,
including but not limited to competition by other companies
with substantially greater assets to apply to the business of
the Company;
(h) Within five (5) days after receipt of a written request from
the Company, Subscriber shall provide such information and
shall execute and deliver such documents as reasonably may be
necessary to comply with any and all laws, regulations and
ordinances to which the Company is subject; and
(i) All of the information provided to the Company or its
agents and all representations made herein are
complete, true and correct as of the date hereof.
SUBSCRIBER UNDERSTANDS THAT SUBSCRIBER'S ANSWERS WILL
BE CONFIDENTIAL BUT AUTHORIZES THE COMPANY OR ITS
AGENTS TO DISCLOSE THE INFORMATION CONTAINED HEREIN
TO APPROPRIATE REGULATORY AGENCIES IF CALLED UPON TO
ESTABLISH THE AVAILABILITY OF AN EXEMPTION FROM
REGISTRATION UNDER THE ACT OR QUALIFICATION UNDER
STATE SECURITIES LAWS FOR OTHER COMPANY PURPOSES.
8. Indemnification. Subscriber hereby agrees to defend, indemnify and hold
harmless the Company and its officers, directors, affiliates, agents
and employees from all damages, losses costs and expenses (including
reasonable attorneys' fees) which they may incur separately or together
(i) by reason of Subscriber's failure to fulfill any of the terms and
conditions of this Agreement, (ii) by reason of Subscriber's breach of
any of the representations, warranties or agreements contained in this
Agreement, and (iii) with respect to any and all claims made by or
involving any person, other than Subscriber personally, claiming any
interest, right, title, power or authority regarding Subscriber's
purchase of Shares. Subscriber further agrees and acknowledges that the
obligation to indemnity shall survive any sale or transfer, or
attempted sale or transfer, of any portion of Subscriber's Shares, or
Subscriber's death or default under this Agreement.
9. Reliance on Information. Subscriber should not construe any information
provided to Subscriber by the Company or its agents as legal, business,
investment, accounting or tax advice.
10. Entire Agreement. This Agreement constitutes the entire agreement
between Subscriber and the Company with respect to the subject matter
of this Agreement and may be amended only by a writing signed by the
party to be charged.
11. Survival of Representations. All representation, warranties, covenants
and agreements of the parties contained in this Agreement shall survive
the closing of the sale of the Shares.
12. Attorneys' Fees: Prejudgment Interest. If the services of an attorney
are required by any party to secure the performance of this Agreement
or otherwise upon the breach or default of another party to this
Agreement, or if any judicial remedy or arbitration is necessary to
enforce to interpret any provision of this Agreement or the rights and
duties of any person in relation thereto, the prevailing party shall be
entitled to reasonable attorneys' fees, cost and other expenses, in
addition to any relief to which such party may be entitled. Any award
of damages following judicial remedy or arbitration as a result of the
breach of this Agreement or any of its provisions shall include an
award of prejudgment interest from the date of the breach at the
maximum amount of interest allowed by law.
13. Severability. If any provision of this Agreement is held by a court of
competent jurisdiction to be invalid or unenforceable, the remainder of
the Agreement which can be given effect without the invalid provision
shall continue in full force and effect and shall in no way be impaired
or invalidated.
14. Governing Law. The rights and obligations of the parties and
interpretation and performance of this Agreement shall be governed by
the law of California, excluding its conflict of laws rules.
SUBSCRIBERS
/s/Xxxxxxx Xxxxxxx Food Extrusion, Inc. a California corporation
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(Signature, Xxxxxxx EuroInvest)
Xx. Xxxxxxx Xxxxxxx /s/ Xxxxxx X. Xxxxx
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(Name: Please Print) Xxxxxx X. Xxxxx, Secretary
