Exhibit 3.15
SUBSCRIPTION AGREEMENT
FOOD EXTRUSION, INC. (the "Company") and Cambro Investment Group (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
125,000 shares of Common Stock at $.01 per share as further consideration
for assisting the Company with financial consulting and capital
structuring.
5. Acknowledgments. 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 obligation 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
to 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 deemed 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
famished 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 OR 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 farther agrees and acknowledges that the obligation
to indemnify 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 representations, 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 or
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
other 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. Severabilitv. 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 Food Extrusion, Inc. a California corporation
/s/ Xxxxx X. Xxxxxx
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(Signature, Cambro Investment Group)
Xxxxx X. Xxxxxx /s/ Xxxxxx X. Xxxxx
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(Name: Please Print) Xxxxxx X. Xxxxx, Secretary
