EXHIBIT 3.2
SUBSCRIPTION AGREEMENT
This Subscription Agreement ("Agreement") is entered into as of July 31,
2003 (the "Effective Date"), by and between Medical Nutrition USA, Inc., a
Delaware corporation (the "Company"), and Organic Corporation of America, 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, 200,000 shares of the Company's common stock (the
"Shares") at a purchase price of $0.75 per share 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 00 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000. 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 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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2.7 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 has reviewed the Company's
Annual Report on Form 10-KSB for the year ended January 31, 2003 (the
"10-KSB") and each Report on Form 8-K filed by the Company since January
31, 2003. 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.
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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.
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
3.8.3 (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.
3.11.2 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.
3.11.3 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. Purchaser and Purchaser's representatives acknowledge and agree
that they have carefully reviewed in their entirety the RISK FACTORS set
forth on pages 9, 10 and 11 of the 10-KSB. Such Risk Factors are
incorporated herein by this reference. 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.
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4 MISCELLANEOUS.
4.1 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 Purchaser at:
Organic Corporation of America
______________________________
______________________________
Attn:_________________________
and to the Company at:
Medical Nutrition USA, Inc.
00 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxx Xxxxxx
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.
4.2 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.
4.3 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.
4.4 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.
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4.5 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.
4.6 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.
4.7 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.
4.8 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.
4.9 Amendment. This Agreement may be amended by written agreement
signed by the parties hereto.
4.10 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.
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4.11 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.
4.12 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.
4.13 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.
4.14 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.
"COMPANY" Medical Nutrition USA, Inc.,
a Delaware corporation
By:_________________________________
Print Name:__________________________
Title:________________________________
"PURCHASER" Organic Corporation of America,
a Delaware corporation
By:_________________________________
Print Name:__________________________
Title:________________________________
(if applicable)
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