Exhibit 3.28
FOOD EXTRUSION, INC.
0000 Xxxx'x Xxxxxx Xxxxx
Xx Xxxxxx Xxxxx, Xxxxxxxxxx 00000
October 31,1996
Monsanto Company
000 Xxxxx Xxxxxxxxx Xxxxxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Gentlemen and Ladies:
The undersigned, Food Extrusion, Inc. a Nevada corporation (the
"Company"), agrees with you as follows:
ARTICLE I. NOTE
Section 1.01. On the basis of the representations and
warranties set forth in this Agreement and subject to the terms and conditions
contained herein, you shall make loans to the Company from time to time,
generally on a month to month basis, in an aggregate principal amount at any
time outstanding not to exceed $5,000,000. Each loan made shall be in a minimum
principal amount and an integral multiple of $100,000. The funds therefor shall
be made available by you to the Company upon not less than 10 days prior written
request for same made by the Company's Chief Financial Officer; subject,
however, to the approval of such request by Xxxxxxxx X. Xxxxxxxxxx, Corporate
Executive Vice President, Monsanto Company, which approval may not be withheld
unreasonably if the funds so requested are to be used for purposes set forth in
the business plan of the Company previously presented to you and are in an
amount consistent with the requirements of the Company set forth in the cash
flow forecast attached hereto as Exhibit A. The loans shall be evidenced by
Company's promissory note in the form attached hereto as Exhibit B (the "Note").
You are authorized to endorse on the schedule attached to the Note or otherwise
record in your internal records an appropriate notation evidencing the date and
amount of each loan made under the Note; provided, however, that the failure to
make such notation or any error in such notation shall not affect the obligation
of the Company to pay the loans as hereinafter provided. Delivery of the Note
will be made at the office of the Company at 10:00 A.M., on November 1, 1996
(the "Closing Date"), against wire transfer to the Company in immediately
available funds of the initial loan in the amount of $500,000.
As used herein the term "Note" means the Note and all
promissory notes delivered in exchange or substitution therefor or in lieu
thereof.
Section 1.02. If, on or before February 1, 1997, you deliver a
written notice to the Company to the effect that you do not desire to acquire an
equity interest in the Company (the "Notice"), no additional loans shall be made
by you to the Company and the aggregate unpaid principal amount of all loans
then outstanding shall bear interest from the date of the Notice at a rate per
annum equal to the prime rate less 0.25%. Interest shall be payable in arrears
on the first business day of each calendar quarter, commencing with the quarter
following the quarter wherein the Notice is given, and at maturity. As used
herein, the term "prime rate" shall mean the rate reported as such in the Money
Rates column in The Wall Street Journal on the last business day of each month.
If, and whenever, there is a change in the reported prime rate, such change
shall take effect on the first day of the month following the month wherein the
change occurs. Interest shall be computed on the basis of a 365 day year (or, in
any leap year, 366 day year) for the actual number of days elapsed. If the
Company shall default in any payment of interest when due, such defaulted amount
and all interest thereafter payable on the Note shall be compounded quarterly
until such defaulted amount and any other amount of interest which shall have
become due, shall have been paid in full. All interest payments shall be made by
wire transfer of immediately available funds in accordance with your
instructions.
Section 1.03. The unpaid principal amount of the Note shall
mature and be payable in full on that date which is 36 months after the Closing
Date; provided, however, that the Company shall apply a minimum of 50% of all
proceeds, in excess of an aggregate of $5,000,000 less the total amount borrowed
by the Company pursuant to the Note (the "Capital Requirement"), received by it
from the sale of debt instruments and/or equity securities to the prepayment of
the Note. The unpaid principal amount of the Note may be prepaid at any time.
Each prepayment of principal shall be accompanied by the amount of interest, if
any, accrued thereon to the date of prepayment, without penalty.
Section 1.04. The Note shall be secured by the grant to you by
the Company of a security interest in the property described in the form of
Security Agreement attached hereto as Exhibit C.
Section 1.05. If, at any time before delivery of the Notice,
you and the Company enter into a definitive agreement with regard to, among
other things, the acquisition by you of an equity interest in the Company, you
shall convert the entire unpaid principal amount of the Note into shares of
Common Stock of the Company at the rate set forth in such agreement.
ARTICLE II. NEGATIVE COVENANTS
The Company covenants that so long as any amount remains
unpaid on the Note, it shall not and shall not permit any Subsidiary to:
Section 2.01. Create, assume, incur or suffer to exist, any
pledge, mortgage, lien, assignment or other encumbrance of any kind, of or upon
any of the property described in the Security Agreement or upon the income or
profits therefrom; provided, however, that this restriction shall not prohibit:
(i) liens for taxes, assessments and other governmental charges which are not
delinquent or which are being contested in good faith by appropriate proceedings
and in connection with which adequate reserves are maintained on the books of
the Company or the Subsidiary affected; liens incurred or deposits made in the
ordinary course of business in connection with Workmen's Compensation,
unemployment insurance or other similar laws or to secure the performance of
statutory obligations, surety and appeal bonds, bids, tenders and performance
bonds and other obligations of a like nature (exclusive of obligations for the
payment of money borrowed); liens imposed by law in connection with transactions
in the ordinary course of business such as liens of carriers, warehousemen,
mechanics and materialmen for sums not yet due or being contested in good faith
and by appropriate proceedings diligently conducted, if such reserve or other
appropriate provision, if any, as shall be required by generally accepted
accounting principles shall have been made therefor; liens resulting from any
litigation which is being contested in good faith by appropriate proceedings;
landlord's liens under leases to which the Company or a Subsidiary is a party;
zoning restrictions, easements, licenses and minor encumbrances and
irregularities in title; all of which in the aggregate do not materially detract
from the value of the properties involved or materially impair their use in the
operation of the business of the Company; and (ii) any conditional sale,
purchase money mortgage or other title retention agreement on personal property,
provided that the principal amount of indebtedness secured by any such lien
shall at no time exceed 90% of the lesser of (x) the cost (including the
principal amount of such indebtedness, whether or not assumed) to the Company or
Subsidiary of the property so acquired which is subject to such lien or (y) the
fair value (as determined in good faith by the Board of Directors of the
Company) of such property at the time of its acquisition.
Section 2.02. After the date of the Notice, issue, incur,
guarantee, assume or permit to be outstanding any indebtedness, except
(a) the Note;
(b) indebtedness of any Subsidiary to the Company and/or
to any other Subsidiary of the Company;
(c) current liabilities of the Company or any Subsidiary
incurred in the ordinary course of business other than for borrowed money;
(d) indebtedness for borrowed money in excess of the
Capital Requirement, the proceeds of which are used for working capital and/or
prepayment of the Note; and
(e) indebtedness of the Company set forth in Schedule E
hereto or that may hereafter be incurred in connection with the acquisition of
any business and/or property and equipment (an "Acquisition"), or in an
aggregate amount, from time to time, up to $500,000.
Section 2.03. Assume, guarantee, endorse or otherwise become
liable upon the obligation of any Person other than obligations of Subsidiaries,
except by endorsement of negotiable instruments for deposit or collection in the
ordinary course of business or in connection with an Acquisition.
Section 2.04. Make or permit to remain outstanding any loan or
advance to, or own, purchase or acquire any stock or securities of, any Person,
except that
(a) the Company may (1) make or permit to remain
outstanding loans or advances to any Subsidiary, (2) own, purchase or acquire
stock or securities of a Subsidiary, or a Person which immediately after such
purchase or acquisition will be a Subsidiary, or (3) make loans or advances to
its employees for travel or other expenses to be incurred in the ordinary course
of business; and
(b) the Company or any Subsidiary may (1) acquire and own
stock or securities received in settlement of debts (created in the ordinary
course of business) owing to the Company or any Subsidiary and (2) own, purchase
or acquire direct obligations of the United States of America, maturing in five
years or less from the date of purchase, marketable negotiable certificates of
deposit issued by any commercial bank which is a member of the Federal Reserve
System and has combined capital, surplus and undivided profits of at least
$200,000,000 and prime rated commercial paper.
Section 2.05. Sell or otherwise dispose of any shares of stock
or indebtedness of any Subsidiary, except to the Company or another Subsidiary,
and except that all shares of stock and indebtedness of any Subsidiary at the
time owned by or owed to the Company and any other Subsidiary may be sold as an
entirety for a consideration which represents the fair value (as determined in
good faith by the Board of Directors of the Company) at the time of sale of the
shares and debt so sold, provided that, at the time of such sale, such
Subsidiary shall not own, directly or indirectly, any shares of stock or debt of
any other Subsidiary unless all of the shares of stock or debt of such other
Subsidiary owned, directly or indirectly, by the Company and any other
Subsidiary, are simultaneously being sold as permitted by this Section 2.05.
Section 2.06. Merge or consolidate with any other corporation
or sell, lease or transfer or otherwise dispose of all or a substantial part of
its assets to any Person, except that (a) any Subsidiary may merge or
consolidate with the Company (provided that the Company shall be the continuing
or surviving corporation) or with any one or more other Subsidiaries, (b) any
Subsidiary may sell, lease, transfer or otherwise dispose of any of its assets
to the Company or another Subsidiary and (c) any Subsidiary may sell or
otherwise dispose of all or substantially all of its assets subject to the
conditions specified in Section 2.05 with respect to a sale of the stock of such
Subsidiary.
Section 2.07. Pay or declare any dividend on any shares of any
class of its stock (except dividends payable in stock of the Company), or make
any other distribution on account of any shares of any class of its stock, or
redeem, purchase or otherwise acquire, directly or indirectly, any shares of any
class of its stock, except as may be required in connection with an Acquisition.
ARTICLE III. AFFIRMATIVE COVENANTS
The Company covenants that so long as any amount remains
unpaid on the Note it shall and shall cause each Subsidiary to:
Section 3.01. Promptly pay and discharge, all taxes,
assessments and other governmental charges imposed upon the Company and its
Subsidiaries, or upon the income, profits, or property of it and them, and all
claims for labor, material or supplies which, if unpaid, might by law become a
lien or charge upon its or their property; provided, however, that neither the
Company nor any Subsidiary shall be required to pay any such tax assessment,
charge or claim so long as the validity thereof shall be contested in good faith
by appropriate proceedings and adequate reserves therefor shall be maintained on
its or their books.
Section 3.02. Maintain its and their properties in good
repair, working order and condition and from time to time make or cause to be
made all needful renewals, replacements and repairs so that at all time its and
their business can be conducted efficiently.
Section 3.03. Keep adequately insured by reputable and solvent
insurance companies, all properties of an insurable nature customarily insured
by persons operating similar properties (including, without limiting the
generality of the foregoing, buildings, fixtures, equipment and inventories of
merchandise and goods) against loss or damage of the kinds customarily insured
against by persons operating similar properties similarly situated, and carry
adequate public liability and all such other casualty insurance as is usually
carried by persons or concerns engaged in the same or a similar business
similarly situated and from time to time furnish you upon request appropriate
evidence of the carrying of such insurance.
Section 3.04. Keep true and complete books of record and
account in accordance with generally accepted accounting principles.
Section 3.05. Furnish to you (a) as soon as available, and in
any event within 120 days after the close of each fiscal year, a consolidated
and consolidating balance sheet of the Company and its Subsidiaries, and
consolidated and consolidating statements of profit and loss and surplus of the
Company and its Subsidiaries for such year, all in reasonable detail and
certified by independent certified public accountants of recognized standing
selected by the Company; (b) as soon as available, and in any event within 45
days after the end of each of the first three quarters of the Company's fiscal
year a consolidated balance sheet for the Company and its Subsidiaries as of the
end of such quarter and consolidated profit and loss and surplus statements for
such quarter, all in reasonable detail and certified by an authorized officer of
the Company, subject to inventory and other year-end adjustments; and (c) as
soon as available, and in any event within 15 days after the end of each month,
a balance sheet of the Company as of the end of such month, together with the
related statement of income for such month.
Section 3.06. In order to enable you to evaluate and protect
your investment in the Note, afford to any of your duly authorized employees the
right during usual business hours and upon 24 hours prior written notice, and
from time to time, to visit and inspect any of the properties of the Company and
its Subsidiaries and to examine and take extracts from its and their books and
records.
Section 3.07. Conduct the same general type of business as
that now being carried on, maintain its and their corporate existence, excepting
any transaction permitted by Section 2.06, and continue its and their compliance
with all valid applicable statutes, laws, rules and regulations.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES
To induce you to make loans to the Company, the Company hereby
represents and warrants to you that, except as set forth on the Schedule of
Exceptions attached hereto as Exhibit D specifically identifying the relevant
Section hereof:
Section 4.01. The Company is a corporation duly organized and
validly existing and in good standing under the laws of the State of Nevada and
has all requisite corporate power and authority to carry on its business as now
conducted and is duly qualified or licensed to conduct its business in all
places where such qualification or license is required; has full power, right
and authority to make this Agreement, to authorize, make, issue and deliver the
Note and to perform and observe each and all of the matters and things herein
provided for; this Agreement and the Note do not, nor does the performance or
observance by the Company of any of the matters or things herein or therein
provided for, contravene or violate any provision of law or any charter or
by-law provisions or any covenant, indenture or agreement or affecting the
Company; the Company's authorized capital consists of 50,000,000 shares of
Common Stock, $.001 par value per share, of which 18,000,751 shares are issued
and outstanding; and there are outstanding neither securities convertible into
capital stock of the Company nor rights, options or warrants to subscribe for,
purchase or otherwise acquire capital stock of the Company. The outstanding
shares of Common Stock were issued in compliance with all applicable federal and
state securities laws and agreements by which the Company is bound.
The Company has no subsidiaries on the date hereof.
Section 4.02. The Company has heretofore delivered to you
copies of its financial statements for the periods ending December 31, 1995 and
1994 certified by Coopers & Xxxxxxx. In addition, the Company has delivered to
you copies of its cumulative unaudited financial statements for the years
1989-1993; an unaudited three year projected cash flow and income statement
dated August 21, 1996; and an unaudited production and sales internal report
dated October 1, 1996 covering the preliminary production and revenue for the
period of January 1996 to September 1996. Such financial statements clearly and
accurately reflect the financial condition of the Company and the results of
operations for the respective periods covered by said financial statements, and
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods involved. Since August 31,
1996, there have been no material adverse changes in the financial condition,
business or properties of the Company, nor any changes except those occurring in
the ordinary course of business.
Section 4.03. The Company has good and marketable title to all
of the assets reflected in the above-mentioned financial statements and has good
and marketable title to all assets purported to have been acquired after
December 31, 1995; subject to no mortgages, liens, charges or encumbrances of
any nature whatsoever other than such as are permitted under Section 2.01.
Section 4.04. There is no action at law or in equity pending
or to the knowledge of the Company threatened against or affecting the Company,
and no proceedings by or before any governmental commission, bureau or other
administrative agency pending or to the knowledge of the Company threatened
against the Company which might result in any material adverse changes in the
business or prospects or condition (financial or otherwise) of the Company or in
any of its properties or assets, or which questions the validity of the Note or
of this Agreement or of any action taken or to be taken by the Company pursuant
to or in connection with this Agreement.
Section 4.05. The Company is not in default under or violating
(a) any provision of its Articles of Incorporation or By-laws or (b) any
indenture, agreement, deed, lease, loan agreement, note or other instrument to
which it is a party or by which it is bound, or to which it or any of its assets
is subject. Neither the execution and delivery of this Agreement, the
consummation of the transactions herein contemplated, nor compliance with the
terms, conditions and provisions hereof and of the Note will conflict with or
result in the breach of, or constitute a default under, any of the foregoing or
result in the creation of any lien or encumbrance upon the assets of the
Company.
Section 4.06. The Company has not, directly or indirectly,
through any broker, agent, representative or otherwise, offered the Note or any
similar security for sale to, or solicited any offer to buy the same from, or
otherwise approached or negotiated or communicated in respect thereof with such
number of persons, or under such circumstances, so as to bring the issuance or
sale of the Note within the provisions of Section 5 of the Securities Act of
1933, as amended.
Section 4.07. The proceeds of the sale of the Note will be
added to the general funds of the Company for use as working capital.
Section 4.08. Each request by the Company for a loan shall
constitute a certification that all of the representations and warranties of the
Company herein are true and correct in all material respects on the date of such
request to the same extent as if made on such date.
ARTICLE V. EVENTS OF DEFAULT
Any one or more of the events specified in Section 5.01
through Section 5.08 shall constitute an event of default hereunder.
Section 5.01. The failure by the Company to pay the principal
of the Note within five days after the same shall become due and payable by
lapse of time, acceleration, notice of prepayment or otherwise.
Section 5.02. The failure by the Company to pay any
installment of interest on the Note within ten days after the same shall become
due and payable.
Section 5.03. The failure by the Company to make any payment
of principal or interest on any other obligation for borrowed money beyond any
period of grace provided with respect thereto or in the performance of any other
term, condition or covenant contained in any agreement under which any such
obligation is created, the effect of which default is to cause or permit the
holder of such obligation to cause such obligation to become due prior to its
stated maturity.
Section 5.04. A default in the due observance or performance
by the Company of any covenant contained in Article II or any other covenant or
agreement contained in this Agreement, and the continuance thereof for thirty
days after written notice thereof shall have been given to the Company by you.
Section 5.05. If any representation or warranty made by the
Company in this Agreement or any statements in any certificate of the Company
furnished to you in accordance with this Agreement shall prove to have been
untrue in any material respect and such misrepresentation or breach of warranty
shall not have been cured, or appropriate waivers obtained, within 30 days after
notice thereof to the Company by you.
Section 5.06. If the Company shall (a) make a general
assignment for the benefit of creditors, (b) admit in writing its inability to
pay its debts generally as they mature, (c) file a petition in bankruptcy or a
petition or answer seeking a reorganization, arrangement with creditors or other
similar relief under the federal bankruptcy laws or under any other applicable
law of the United States of America or any state thereof, (d) consent to the
appointment of a trustee or receiver for the Company or for a substantial part
of its property, or (e) take any corporate action for the purpose of effecting
any of the foregoing.
Section 5.07. If an order, judgment or decree shall be entered
appointing, without the Company's consent, a trustee or receiver for the Company
or a substantial part of its property, adjudicating the Company a bankrupt on an
involuntary petition in bankruptcy or approving a petition filed against the
Company seeking a reorganization, arrangement with creditors or other similar
relief under the federal bankruptcy laws or under any other applicable law of
the United States of America or any state thereof, and such order, judgment or
decree shall not be vacated or set aside or stayed within sixty days from the
date of entry thereof.
Section 5.08. If judgments for the payment of money in excess
of $25,000 in the aggregate shall be rendered against the Company and shall
remain unsatisfied for any period of sixty days without a stay of execution.
Section 5.09. If an event of default shall occur and be
continuing, you may, at your option, by written notice or notices to the
Company, declare the entire remaining unpaid balance of the Note to be due and
payable, whereupon the same shall forthwith mature and become immediately due
and payable, together with all interest accrued thereon; provided, however, that
upon the occurrence of an event of default described in Section 5.06 or 5.07
hereof, the Note shall be automatically accelerated without notice to the
Company or action of any kind by you.
Section 5.10. In case any one or more events of default shall
occur and be continuing, you may, in addition to the remedy provided in the
preceding section and any other remedies you may have, proceed to protect and
enforce your rights by an action at law, suit in equity or other appropriate
proceeding, whether for the specific performance of any agreement contained
herein or for an injunction against a violation of any of the terms hereof or in
aid of the exercise of any power granted hereby.
ARTICLE VI. CONDITIONS
Your obligation to purchase the Note shall be subject to
fulfillment of the following conditions at or before the time of closing:
Section 6.01. The representations and warranties made in
Article IV shall be true on and as of the Closing Date, except to the extent of
changes caused by the transaction herein contemplated.
Section 6.02. There shall exist at the time of closing no
condition or event which would constitute an event of default as defined in
Article V hereof or which, after notice or lapse of time or both, would
constitute such an event of default.
Section 6.03. The Company shall have delivered to you an
executed copy of the Security Agreement.
Section 6.04. The Company shall have delivered to you an
Officer's Certificate, dated the Closing Date, certifying, in form satisfactory
to you and to your counsel, that the conditions specified in the foregoing
Sections 6.01 and 6.02 have been met.
ARTICLE VII. DEFINITIONS
For the purpose of this Agreement, the following terms shall
have the following meanings:
Section 7.01. "Officer's Certificate" shall mean a certificate
signed in the name of the Company by its President, one of its Vice Presidents
or its Treasurer.
Section 7.02. "Person" shall mean and include an individual, a
partnership, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.
Section 7.03. "Subsidiary" shall mean any corporation
organized under the laws of any state of the United States of America of which a
majority of the issued and outstanding shares of stock of every class shall,
except director's qualifying shares, at the time of which any determination is
being made, be owned by the Company either directly or through Subsidiaries.
ARTICLE VIII. MISCELLANEOUS
Section 8.01. All representations and warranties contained
herein or made in writing by the Company in connection herewith shall survive
the execution and delivery of this Agreement and of the Note and shall remain in
force so long as any amount remains unpaid on the Note.
Section 8.02. All covenants and agreements in this Agreement
contained by or on behalf of any of the parties hereto shall bind and inure to
the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not.
Section 8.03. All communications and notices provided for
hereunder, shall be sent by first class mail, postage prepaid and if to you,
addressed in the manner in which this letter is addressed and if to the Company,
at its office in El Dorado Hills, California.
Either party hereto may from time to time change its address
by written notice to the other party.
Section 8.04. No provision of this Agreement may be waived,
changed or modified or in the discharge thereof acknowledged orally, but only by
an agreement in writing signed by the party against whom the enforcement of any
waiver, change, modification or discharge is sought.
Section 8.05. The rights and obligations of the parties hereto
shall be governed by, and shall be construed and enforced in accordance with,
the laws of the State of Missouri regardless of the laws that might otherwise
govern under applicable principles of conflicts of laws thereof.
If you are in agreement with the foregoing, please sign the
form of acceptance on the enclosed counterpart of this letter and return the
same to the undersigned, whereupon this letter shall constitute an agreement
between you and the undersigned as of the day and year first above written.
Food Extrusion, Inc.
By /s/ X.X.XxXxxx
----------------
Accepted and agreed to as of the day and year first above
written.
Monsanto Company
By /s/ Xxxxxxx Xxxxxxxxxx
------------------------
Document Number: 0132051
Food Extrusion, Inc. Projected Use of Funds 10/1/97
($5,000,000)
EXHIBIT A
Capital Spending Purpose Draws Draws Draws Draws Draws Draws Draws Draws Draws
11/1/95 12/1/96 1/1/97 2/1/97 3/1/97 4/1/97 5/1/97 6/1/97 7/1/97 Total
Lab Furnishing/ $125,000 $152,000 $114,000 $114,000 $505,000
ExpansionNew Mill (SE USA)$275,000 $376,000 $349,000 $1,000,000
RBS Facility Expansion $210,000 $140,000 $350,000
Clinical Studies $200,000 $130,000 $350,000
Mill #1,#2 Enhancer $300,000 $300,000
International Joint Venture $200,000 $200,000 $200,000 $600,000
Xxx Xxxx #0 (XX XXX) $475.800 $191,800 $332,400 $1,000,000
Working Capital
Operating Expenses $100,000 $100,000
Add'l Marketing Expenses $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $90,000
Work in Progress Capital $88,100 $88,100 $75,000 $72,100 $61,100 $61,100 $445,500
Add'l Labor Personnel $9,500 $8,500 $8,500 $8,500 $14,000
TOTAL $500,000 $889,100 $1,042,100 $0 $0 $926,300 $601,400 $591,600 $417,000 $4,774,500
CUMML. $1,389,100 $3,431,100 $2,431,320$2,431,200$3,357,500 $3,950,900 $4,957,500 $4,774,500
EXHIBIT D
SCHEDULE OF EXCEPTIONS
The information in this Schedule of Exceptions shall be deemed to supplement and
to be part of the representations and warranties of Food Extrusion, Inc. (the
"Company") contained in the Note Agreement by and between the Company and
Monsanto Company (the "Agreement") and shall be construed as exceptions to the
representations specifically referred to herein unless otherwise indicated by
the context. Capitalized terms used herein and not defined herein shall the
defined meanings as set forth in the Agreement. All section references refer to
sections in the Agreement.
Section 4.01.
To the best of the Company's knowledge and in reliance on the report of the
Company's transfer agent, the number of shares issued and outstanding is
18,000,751. The Company has the following outstanding convertible securities:
(i) options to purchase 1,360,000 shares of Common Stock; and (ii) warrants to
purchase 600,000 shares of Common Stock.
Section 4.02.
None.
Section 4.03.
The company has the following outstanding liens: (i) a lien on the Company's
telephone equipment in favor of AT&T Credit Corporation; (ii) a lien on the rice
stabilization equipment located at Xxxxxx'x Xxxx Cooperative, Inc., in West
Sacramento, in favor of Dominion Resources, Inc. pursuant to a $1,750,000 loan
agreement; (iii) a lien on a forklift in favor of Industrial Finance Company.
Section 4.04.
The Company is currently a defendant in a pending claim brought by a former
employee alleging that outstanding loans and alleged accrued wages had not been
paid after the individual had agreed to forgive the indebtedness in exchange for
equity compensation. Management believes the suit is without merit and intends
to continue to defend it vigorously.
Section 4.05.
None.
Section 4.06.
None
Section 4.07.
None.
Section 4.08.
None.
SCHEDULE E
Promissory Note in favor of Dominion Resource, Inc. in the amount of $1,750,00.
