NATURALSHRIMP INCORPORATED (the “Issuer”) PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT (CONVERTIBLE NOTE) INSTRUCTIONS TO SUBSCRIBER NATURALSHIMP INCORPORATED PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT
Exhibit 10.16
NATURALSHRIMP INCORPORATED
(the
“Issuer”)
PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT
(CONVERTIBLE NOTE)
1. You must complete
all the information in the boxes on page 2 and sign where indicated
with an “X”.
2. If you are a
“U.S. Purchaser”, as defined in Exhibit A, you must
complete and sign Exhibit A “United States Accredited
Investor Questionnaire”.
3. If you are paying
for your subscription with funds drawn from a U.S. bank or Non U.S.
source, you may pay by by wire transfer to the Issuer pursuant to
the wiring instructions set out in Exhibit B.
The
undersigned (the “Subscriber”) hereby irrevocably
subscribes for and agrees to purchase from NaturalShrimp
Incorporated (the “Issuer”) a 6% Unsecured
Convertible Note of the Issuer (the “Note”) in the principal amount set
out below. The form of the Note is attached to this Subscription
Agreement as Exhibit C. The Subscriber agrees to be bound by the
terms and conditions set forth in the attached “Terms and
Conditions of Subscription for Securities”.
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Subscriber
Information
Dragon
Acquisitions LLC
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Note
to be Purchased
Principal Amount of
Note: $ ____________
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Account
Reference (if applicable): ________
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X___________________________________(Signature
of Subscriber – if the Subscriber is an
Individual)
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Aggregate
Subscription Price: $ ___________
(the
“Subscription
Amount”, plus wire fees if applicable)
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X
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(Signature
of Authorized Signatory – if the Subscriber is not an
Individual)
(Name
and Title of Authorized Signatory – if the Subscriber is not
an Individual)
(SSN or
other Tax Identification Number of the Subscriber)
0000
Xxxx Xxxxxx, #0, Xxxxxxxxxx, XX 00000
(Subscriber’s
Address, including postal or zip code)
(000)
000-0000
(Telephone
Number)
(Email
Address)
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Please
complete if purchasing as agent or trustee for a principal
(beneficial purchaser) (a “Disclosed Principal”) and
not purchasing as trustee or agent for accounts fully managed by
it.
(Name
of Disclosed Principal)
(Address of
Disclosed Principal)
(Account Reference,
if applicable)
(SSN or
other Tax Identification Number of Disclosed
Principal)
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Register
the Note as set forth below:
Dragon
Acquisitions LLC
(Name
to Appear on Note Certificate)
(Account Reference,
if applicable)
(Address, including
postal or zip code)
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Deliver
the Note as set forth below:
(Attention -
Name)
(Account Reference,
if applicable)
(Street
Address, including postal or zip code – no PO Boxes permitted)
(Telephone
Number)
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Number and kind of securities of the Issuer already held, directly
or indirectly, or over which control or direction is exercised by,
the Subscriber, if any (i.e., shares, warrants,
options):
____________________________________
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The
Issuer hereby accepts the Subscription (as defined herein) on the
terms and conditions contained in this private placement
subscription agreement (this “Agreement”) as of the ____ day of __________(the “Closing Date”).
NATURALSHRIMP INCORPORATED
Per:
Authorized
Signatory
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1.
Subscription
1.1 On the basis of the
representations and warranties, and subject to the terms and
conditions, set forth in this Agreement and in the form of Note
attached as Exhibit C to this Agreement, the Subscriber hereby
irrevocably subscribes for and agrees to purchase the Note in the
principal amount as set forth on page 2 of this Agreement for the
Subscription Amount shown on page 2 of this Agreement, which is
tendered herewith (such subscription and agreement to purchase
being the “Subscription”), and the Issuer
agrees to sell the Note to the Subscriber, effective upon the
Issuer’s acceptance of this Agreement.
1.2 The principal
amount of the Note will accrue interest at 6% per annum. The
Subscriber will have the right to convert all or any portion of the
outstanding principal amount of the Note and all accrued but unpaid
interest thereon into shares of common stock in the capital of the
Issuer (each, a “Conversion
Shares”) in accordance with terms of the Note. The
Note and the Conversion Shares are referred to collectively herein
as the “Securities”.
1.3 All dollar amounts
referred to in this Agreement are in lawful money of the United
States of America, unless otherwise indicated.
2.
Payment
2.1 Payment of the
Aggregate Subscription Price is required upon submission of the
subscription documents.
2.2 The Subscriber
acknowledges and agrees that this Agreement, the Subscription
Amount and any other documents delivered in connection herewith
will be held by or on behalf of the Issuer. In the event that this
Agreement is not accepted by the Issuer for whatever reason, which
the Issuer expressly reserves the right to do, the Issuer will
return the Subscription Amount (without interest thereon) to the
Subscriber at the address of the Subscriber as set forth on page 2
of this Agreement, or as otherwise directed by the
Subscriber.
3.1 The Subscriber must
complete, sign and return to the Issuer the following
documents:
(a) this
Agreement;
(b) if the Subscriber
is a U.S. Purchaser (as defined in Exhibit A), the United States
Accredited Investor Questionnaire (the “Questionnaire”) attached as
Exhibit A;
(c) such other
supporting documentation that the Issuer or the Issuer’s
Counsel may request to establish the Subscriber’s
qualification as a qualified investor; and
(d) the Subscriber
acknowledges and agrees that the Issuer will not consider the
Subscription for acceptance unless the Subscriber has provided all
of such documents to the Issuer.
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3.2 As soon as
practicable upon any request by the Issuer, the Subscriber will
complete, sign and return to the Issuer any additional documents,
questionnaires, notices and undertakings as may be required by any
regulatory authorities or applicable laws.
3.3 The Issuer and the
Subscriber acknowledge and agree that the Issuer’s Counsel
has acted as counsel only to the Issuer and is not protecting the
rights and interests of the Subscriber. The Subscriber acknowledges
and agrees that the Issuer and the Issuer’s Counsel have
given the Subscriber the opportunity to seek, and are hereby
recommending that the Subscriber obtain, independent legal advice
with respect to the subject matter of this Agreement and, further,
the Subscriber hereby represents and warrants to the Issuer and the
Issuer’s Counsel that the Subscriber has sought independent
legal advice or waives such advice.
The
Subscriber acknowledges that the certificate representing the Note
will be available for delivery within two business days of the
Company’s acceptance of the subscription hereunder, provided
that the Subscriber has satisfied the requirements of Section
3 hereof and the Issuer has accepted
this Agreement.
The
Subscriber acknowledges and agrees that:
(a) none of the
Securities have been or will be registered under the United States
Securities Act of 1933, as amended, (the “1933 Act”), or under any
securities or “blue sky” laws of any state of the
United States, and, unless so registered, may not be offered or
sold in the United States or, directly or indirectly, to any U.S.
Person (as defined in Section 2), except in accordance with the
provisions of Regulation S under the 1933 Act (“Regulation S”), pursuant to an
effective registration statement under the 1933 Act, or pursuant to
an exemption from, or in a transaction not subject to, the
registration requirements of the 1933 Act, and in each case only in
accordance with applicable securities laws;
(b) the Issuer has not
undertaken, and will have no obligation, to register any of the
Securities under the 1933 Act or any other applicable securities
laws;
(c) the Issuer will
refuse to register the transfer of any of the Securities to a U.S.
Person not made pursuant to an effective registration statement
under the 1933 Act or pursuant to an available exemption from the
registration requirements of the 1933 Act and in each case in
accordance with applicable laws;
(d) the decision to
execute this Agreement and to acquire the Securities has not been
based upon any oral or written representation as to fact or
otherwise made by or on behalf of the Issuer other than as set
forth in this Agreement and such decision is based entirely upon a
review of any public information which has been filed by the Issuer
with the United States Securities and Exchange Commission (the
“SEC”)
(collectively, the “Public
Record”);
(e) the Issuer and
others will rely upon the truth and accuracy of the
acknowledgements, representations, warranties, covenants and
agreements of the Subscriber contained in this Agreement and the
Questionnaire, as applicable, and agrees that if any of such
acknowledgements, representations and agreements are no longer
accurate or have been breached, the Subscriber will promptly notify
the Issuer;
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(f) there are risks
associated with the purchase of the Securities, as more fully
described in the Public Record;
(g) the Subscriber and
the Subscriber’s advisor(s) have had a reasonable opportunity
to ask questions of, and receive answers from, the Issuer in
connection with the distribution of the Securities hereunder, and
to obtain additional information, to the extent possessed or
obtainable without unreasonable effort or expense, necessary to
verify the accuracy of the information about the
Issuer;
(h) finder’s fees
or broker’s commissions may be payable by the Issuer to
finders who introduce subscribers to the Issuer;
(i) the books and
records of the Issuer were available upon reasonable notice for
inspection, subject to certain confidentiality restrictions, by the
Subscriber during reasonable business hours at its principal place
of business, and all documents, records and books in connection
with the distribution of the Securities hereunder have been made
available for inspection by the Subscriber, its legal counsel
and/or its advisor(s);
(j) all of the
information which the Subscriber has provided to the Issuer is
correct and complete and if there should be any change in such
information prior to the Closing, the Subscriber will immediately
notify the Issuer, in writing, of the details of any such
change;
(k) the Issuer is
entitled to rely on the representations and warranties of the
Subscriber contained in this Agreement and the Questionnaire, as
applicable, and the Subscriber will hold harmless the Issuer from
any loss or damage it or they may suffer as a result of the
Subscriber’s failure to correctly complete this Agreement or
the Questionnaire, as applicable;
(l) any resale of the
Securities by the Subscriber will be subject to resale restrictions
contained in the securities laws applicable to the Issuer, the
Subscriber and any proposed transferee, including resale
restrictions imposed under United States securities laws and
additional restrictions on the Subscriber’s ability to resell
any of the Securities in any other jurisdiction under applicable
securities laws;
(m) it is the
responsibility of the Subscriber to find out what any applicable
resale restrictions are and to comply with such restrictions before
selling any of the Securities;
(n) the Subscriber has
been advised to consult the Subscriber’s own legal, tax and
other advisors with respect to the merits and risks of an
investment in the Securities and with respect to applicable resale
restrictions, and it is solely responsible (and the Issuer is not
in any way responsible) for compliance with:
(i) any applicable laws
of the jurisdiction in which the Subscriber is resident in
connection with the distribution of the Securities hereunder,
and
(ii) applicable
resale restrictions;
(o) there may be
material tax consequences to the Subscriber of an acquisition or
disposition of the Securities and the Issuer gives no opinion and
makes no representation to the Subscriber with respect to the tax
consequences to the Subscriber under federal, state, provincial,
local or foreign tax laws that may apply to the Subscriber’s
acquisition or disposition of the Securities;
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(p) the Issuer has
advised the Subscriber that the Issuer is relying on an exemption
from the requirements to provide the Subscriber with a prospectus
and to offer or sell the Securities through a person registered to
sell securities under applicable securities laws, and, as a
consequence of acquiring the Securities pursuant to such exemption,
certain protections, rights and remedies provided by applicable
securities laws, including statutory rights of rescission or
damages, may not be available to the Subscriber;
(q) no documents in
connection with the issuance of the Securities have been reviewed
by the SEC or any other securities regulators;
(r) neither the SEC nor
any other securities commission or similar regulatory authority has
reviewed or passed on the merits of any of the
Securities;
(s) there is no
government or other insurance covering any of the
Securities;
(t) hedging
transactions involving the Securities may not be conducted unless
such transactions are in compliance with the provisions of the 1933
Act and in each case only in accordance with applicable securities
laws; and
(u) this Agreement is
not enforceable by the Subscriber unless it has been accepted by
the Issuer and the Issuer reserves the right to reject this
Subscription for any reason.
The
Subscriber hereby represents and warrants to the Issuer (which
representations and warranties will survive the Closing)
that:
(a) Unless the
Subscriber has completed Exhibit A, the Subscriber is not a U.S.
Purchaser;
(b) the Subscriber is
resident in the jurisdiction set out on page 2 of this
Agreement;
(c) if the Subscriber
is resident outside of the United States:
(i) the Subscriber is
knowledgeable of, or has been independently advised as to, the
applicable securities laws having application in the jurisdiction
in which the Subscriber is resident (the “International Jurisdiction”) which
would apply to the offer and sale of the Securities;
(ii) the
Subscriber is purchasing the Securities pursuant to exemptions from
prospectus or equivalent requirements under applicable laws of the
International Jurisdiction or, if such is not applicable, the
Subscriber is permitted to purchase the Securities under applicable
securities laws of the International Jurisdiction without the need
to rely on any exemptions;
(iii) the
applicable laws and regulations of the International Jurisdiction
do not and will not require the Issuer to make any filings or seek
any approvals of any kind from any securities regulator of any kind
in the International Jurisdiction in connection with the offer,
issue, sale or resale of any of the Securities.
(iv) the
purchase of the Securities by the Subscriber does not
trigger:
(1) any obligation to
prepare and file a prospectus or similar document, or any other
report with respect to such purchase in the International
Jurisdiction, or
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(2) any continuous
disclosure reporting obligation of the Issuer in the International
Jurisdiction, and
(v) the Subscriber
will, if requested by the Issuer, deliver to the Issuer a
certificate or opinion of local counsel from the International
Jurisdiction which will confirm the matters referred to in
subparagraphs (ii), (iii) and (iv) above to the satisfaction of the
Issuer, acting reasonably;
(d) the Subscriber: (i)
has adequate net worth and means of providing for its current
financial needs and possible personal contingences, (ii) has no
need for liquidity in this investment, (iii) has such knowledge and
experience in business matters as to be capable of evaluating the
merits and risks of its prospective investment in the Securities,
(iv) is able to bear the economic risks of an investment in the
Securities for an indefinite period of time, and (v) can afford the
complete loss of the Subscription Amount;
(e) the
Subscriber has the legal capacity and competence to enter into and
execute this Agreement and to take all actions required pursuant
hereto and, if the Subscriber is a corporate entity, it is duly
incorporated and validly subsisting under the laws of its
jurisdiction of incorporation and all necessary approvals by its
directors, shareholders and others have been obtained to authorize
execution and performance of this Agreement on behalf of the
Subscriber;
(f) the entering into
of this Agreement and the transactions contemplated hereby do not
and will not result in the violation of any of the terms and
provisions of any law applicable to, and, if applicable, any of the
constituting documents of, the Subscriber or of any agreement,
written or oral, to which the Subscriber may be a party or by which
the Subscriber is or may be bound;
(g) the Subscriber has
duly executed and delivered this Agreement and it constitutes a
valid and binding agreement of the Subscriber enforceable against
the Subscriber;
(h) the Subscriber has
received and carefully read this Agreement;
(i) the
Subscriber is aware that an investment in the Issuer is speculative
and involves certain risks, including those risks disclosed in the
Public Record and the possible loss of the entire Subscription
Amount;
(j) the Subscriber has
made an independent examination and investigation of an investment
in the Securities and the Issuer and agrees that the Issuer will
not be responsible in any way for the Subscriber’s decision
to invest in the Securities and the Issuer;
(k) the Subscriber is
not an underwriter of, or dealer in, any of the Securities, nor is
the Subscriber participating, pursuant to a contractual agreement
or otherwise, in the distribution of the Securities;
(l) the Subscriber is
purchasing the Securities for its own account for investment
purposes only and not for the account of any other person and not
for distribution, assignment or resale to others, and no other
person has a direct or indirect beneficial interest in such
Securities, and the Subscriber has not subdivided its interest in
any of the Securities with any other person;
(m) the Subscriber is
not aware of any advertisement of any of the Securities and is not
acquiring the Securities as a result of any form of general
solicitation or general advertising, including advertisements,
articles, notices or other communications published in any
newspaper, magazine or similar media, or broadcast over radio or
television, or any seminar or meeting whose attendees have been
invited by general solicitation or general
advertising;
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(n) the Subscriber has
not acquired the Securities as a result of, and will not itself
engage in, any “directed selling efforts” (as defined
in Regulation S) in the United States in respect of any of the
Securities which would include any activities undertaken for the
purpose of, or that could reasonably be expected to have the effect
of, conditioning the market in the United States for the resale of
any of the Securities, provided, however, that the Subscriber may
sell or otherwise dispose of any of the Securities pursuant to
registration of any of the Securities pursuant to the 1933 Act and
any applicable securities laws or under an exemption from such
registration requirements; and
(o) no person has made
to the Subscriber any written or oral representations:
(i) that any person
will resell or repurchase any of the Securities,
(ii) that
any person will refund the purchase price of any of the Securities,
or
(iii) as
to the future price or value of any of the Securities.
In this
Agreement, the term “U.S.
Person” will have the meaning ascribed thereto in
Regulation S, and for the purpose of this Agreement includes,
but is not limited to: (a) any person in the United States; (b) any
natural person resident in the United States; (c) any partnership
or corporation organized or incorporated under the laws of the
United States; (d) any partnership or corporation organized outside
the United States by a U.S. Person principally for the purpose of
investing in securities not registered under the 1933 Act, unless
it is organized or incorporated, and owned, by accredited investors
who are not natural persons, estates or trusts; or (e) any estate
or trust of which any executor or administrator or trustee is a
U.S. Person.
The
Subscriber acknowledges and agrees that the representations and
warranties contained in this Agreement and the Questionnaire, as
applicable, are made by it with the intention that such
representations and warranties may be relied upon by the Issuer and
the Issuer’s Counsel in determining the Subscriber’s
eligibility to purchase the Securities under applicable laws, or,
if applicable, the eligibility of others on whose behalf the
Subscriber is contracting hereunder to purchase the Securities
under applicable laws. The Subscriber further agrees that, by
accepting delivery of the certificate representing the Note, it
will be representing and warranting that the representations and
warranties contained herein are true and correct as at the Closing
Date with the same force and effect as if they had been made by the
Subscriber on the Closing Date and that they will survive the
purchase by the Subscriber of the Securities and will continue in
full force and effect notwithstanding any subsequent disposition by
the Subscriber of such Securities.
The
Subscriber has acknowledged that the decision to acquire the
Securities was solely made on the basis of the Public Record. The
Subscriber hereby waives, to the fullest extent permitted by law,
any rights of withdrawal, rescission or compensation for damages to
which the Subscriber might be entitled in connection with the
distribution of any of the Securities.
The
Subscriber hereby acknowledges that, upon the issuance thereof, and
until such time as the same is no longer required under applicable
securities laws, any certificates representing any of the
Securities will bear a legend in substantially the following
form:
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“NONE
OF THE SECURITIES REPRESENTED HEREBY HAVE BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933
ACT”), OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO
REGISTERED, NONE MAY BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN
THE UNITED STATES OR TO U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO
AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN
ACCORDANCE WITH APPLICABLE SECURITIES LAWS.”
The
Subscriber hereby acknowledges and agrees to the Issuer making a
notation on its records or giving instructions to the registrar and
transfer agent of the Issuer in order to implement the restrictions
on transfer set forth and described in this Agreement.
10.1 The
Subscriber acknowledges and consents to the fact that the Issuer is
collecting the Subscriber’s personal information for the
purpose of fulfilling this Agreement and completing the Agreement.
The Subscriber acknowledges that its personal information (and, if
applicable, the personal information of those on whose behalf the
Subscriber is contracting hereunder) may be included in record
books in connection with the Agreement and may be disclosed by the
Issuer to: (a) stock exchanges or securities regulatory
authorities, (b) the Issuer's registrar and transfer agent, (c) tax
authorities, (d) authorities pursuant to the PATRIOT Act (U.S.A.)
and (e) any of the other parties involved in the Agreement,
including the Issuer’s Counsel. By executing this Agreement,
the Subscriber is deemed to be consenting to the foregoing
collection, use and disclosure of the Subscriber's personal
information (and, if applicable, the personal information of those
on whose behalf the Subscriber is contracting hereunder) for the
foregoing purposes and to the retention of such personal
information for as long as permitted or required by applicable
laws. Notwithstanding that the Subscriber may be purchasing the
Note as agent on behalf of an undisclosed principal, the Subscriber
agrees to provide, on request, particulars as to the nature and
identity of such undisclosed principal, and any interest that such
undisclosed principal has in the Issuer, all as may be required by
the Issuer in order to comply with the foregoing.
10.2 Furthermore,
the Subscriber is hereby notified that the Issuer may deliver to
any government authority having jurisdiction over the Issuer, the
Subscriber or this Subscription, including the SEC and/or any state
securities commissions, certain personal information pertaining to
the Subscriber, including the Subscriber’s full name,
residential address and telephone number, the number of Shares or
other securities of the Issuer owned by the Subscriber, the
principal amount of Note purchased by the Subscriber, the total
Subscription Amount paid for the Note and the date of distribution
of the Note.
11.
This
Agreement is governed by the laws of the State of Nevada (without
reference to its rules governing the choice or conflict of laws).
Any dispute arising under or in relation to this Agreement shall be
resolved exclusively in the competent courts in Nevada, and each of
the parties hereby submits irrevocably to the jurisdiction of such
court.
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12.
This
Agreement, including, without limitation, the representations,
warranties and covenants contained herein, will survive and
continue in full force and effect and be binding upon the Issuer
and the Subscriber, notwithstanding the completion of the purchase
of the Securities by the Subscriber.
13.
This
Agreement is not transferable or assignable.
14.
The
invalidity or unenforceability of any particular provision of this
Agreement will not affect or limit the validity or enforceability
of the remaining provisions of this Agreement.
15.
Except
as expressly provided in this Agreement and in the exhibits,
agreements, instruments and other documents attached hereto or
contemplated or provided for herein, this Agreement contains the
entire agreement between the parties with respect to the sale of
the Securities and there are no other terms, conditions,
representations or warranties, whether expressed, implied, oral or
written, by statute or common law, by the Issuer or by anyone
else.
16.
All
notices and other communications hereunder will be in writing and
will be deemed to have been duly given if hand delivered or
transmitted by any standard form of telecommunication, including
facsimile, electronic mail or other means of electronic
communication capable of producing a printed copy. Notices to the
Subscriber will be directed to the address of the Subscriber set
forth on page 2 of this Agreement and notices to the Issuer will be
directed to it at the address of the Issuer set forth on page 3 of
this Agreement.
This
Agreement may be executed in any number of counterparts, each of
which, when so executed and delivered, will constitute an original
and all of which together will constitute one instrument. Delivery
of an executed copy of this Agreement by electronic facsimile
transmission or other means of electronic communication capable of
producing a printed copy will be deemed to be execution and
delivery of this Agreement as of the Closing Date.
18.
The
exhibits attached hereto form part of this Agreement.
19.
Each of
the parties will indemnify and hold harmless the other party and,
where applicable, the other party’s directors, officers,
employees, agents, advisors and shareholders, from and against any
and all loss, liability, claim, damage and expense whatsoever
(including, but not limited to, any and all fees, costs and
expenses whatsoever reasonably incurred in investigating, preparing
or defending against any claim, lawsuit, administrative proceeding
or investigation whether commenced or threatened) arising out of or
based upon any representation or warranty of the other party
contained in this Agreement, the Questionnaire or in any document
furnished by the other party in connection herewith being untrue in
any material respect, or any breach or failure by the other party
to comply with any covenant or agreement made by such other party
in connection therewith.
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EXHIBIT A
UNITED STATES ACCREDITED INVESTOR QUESTIONNAIRE
Capitalized
terms used in this Questionnaire (this “Questionnaire”) and not
specifically defined have the meaning ascribed to them in the
Private Placement Subscription Agreement (the “Agreement”) between the Subscriber
and the Issuer to which this Exhibit A is attached.
This
Questionnaire applies only to persons that are U.S. Purchasers. A
“U.S. Purchaser”
is: (a) any U.S. Person, (b) any person purchasing the Note on
behalf of any U.S. Person, (c) any person that receives or received
an offer of the Note while in the United States, or (d) any person
that is in the United States at the time the Subscriber’s buy
order was made or this Agreement was executed or
delivered.
The
Subscriber understands and agrees that none of the Securities have
been or will be registered under the 1933 Act, or applicable state,
provincial or foreign securities laws, and the Securities are being
offered and sold to the Subscriber in reliance upon the exemption
provided in Section 4(a)(2) of the 1933 Act and Rule 506 of
Regulation D under the 1933 Act for non-public offerings. The
Securities are being offered and sold within the United States only
to “accredited investors” as defined in Rule 501(a) of
Regulation D. The Securities offered hereby are not transferable
except in accordance with the restrictions described herein and the
Agreement.
The
Subscriber represents, warrants, covenants and certifies (which
representations, warranties, covenants and certifications will
survive the Closing) to the Issuer (and acknowledges that the
Issuer is relying thereon) that:
1. it has such
knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of an investment in the
Securities and it is able to bear the economic risk of loss of its
entire investment;
2. the Issuer has
provided to it the opportunity to ask questions and receive answers
concerning the terms and conditions of the Note and it has had
access to such information concerning the Issuer as it has
considered necessary or appropriate in connection with its
investment decision to acquire the Securities;
3. it is acquiring the
Securities for its own account, for investment purposes only and
not with a view to any resale, distribution or other disposition of
the Securities in violation of the United States securities
laws;
4. it (i) has adequate
net worth and means of providing for its current financial needs
and possible personal contingencies, (ii) has no need for liquidity
in this investment, and (iii) is able to bear the economic risks of
an investment in the Securities for an indefinite period of
time;
5. if the Subscriber
is an individual (that is, a natural person and not a corporation,
partnership, trust or other entity), then it satisfies one or more
of the categories indicated below (please place an “X”
on the appropriate lines):
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a
natural person whose individual net worth, or joint net worth with
that person’s spouse, exceeds US$1,000,000. For purposes of
this category, "net worth" means the excess of total assets at fair
market value (including personal and real property, but excluding
the estimated fair market value of a person's primary home) over
total liabilities. Total liabilities excludes any mortgage on the
primary home in an amount of up to the home's estimated fair market
value as long as the mortgage was incurred more than 60 days before
the Securities are acquired, but includes (i) any mortgage amount
in excess of the home's fair market value and (ii) any mortgage
amount that was borrowed during the 60-day period before the date
of the acquisition of Securities for the purpose of investing in
the Securities;
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___________
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a
natural person who had an individual income in excess of US$200,000
in each of the two most recent years, or joint income with their
spouse in excess of US$300,000 in each of those years and has a
reasonable expectation of reaching the same income level in the
current year, or
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___________
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a
director or executive officer of the Issuer.
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6. if the Subscriber
is a corporation, partnership, trust or other entity), then it
satisfies one or more of the categories indicated below (please
place an “X” on the appropriate lines):
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__________
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an
organization described in Section 501(c)(3) of the United States
Internal Revenue Code, a corporation, a Massachusetts or similar
business trust or partnership, not formed for the specific purpose
of acquiring the Securities, with total assets in excess of
US$5,000,000;
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___________
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a
“bank” as defined under Section (3)(a)(2) of the
1933 Act or savings and loan association or other institution as
defined in Section 3(a)(5)(A) of the 1933 Act acting in its
individual or fiduciary capacity; a broker dealer registered
pursuant to Section 15 of the Securities Exchange Act of 0000 (Xxxxxx
Xxxxxx); an insurance company as defined in Section 2(13) of
the 1933 Act; an investment company registered under the
Investment Company Act of
1940 (United States) or a business development company as
defined in Section 2(a)(48) of such Act; a Small Business
Investment Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business Investment Act of 0000
(Xxxxxx Xxxxxx); a plan with total assets in excess of US$5,000,000
established and maintained by a state, a political subdivision
thereof, or an agency or instrumentality of a state or a political
subdivision thereof, for the benefit of its employees; an employee
benefit plan within the meaning of the Employee Retirement Income Security Act of
1974 (United States) whose investment decisions are made by
a plan fiduciary, as defined in Section 3(21) of such Act,
which is either a bank, savings and loan association, insurance
company or registered investment adviser, or if the employee
benefit plan has total assets in excess of US$5,000,000, or, if a
self-directed plan, whose investment decisions are made solely by
persons that are accredited investors;
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___________
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a
private business development company as defined in
Section 202(a)(22) of the Investment Advisers Act of 0000 (Xxxxxx
Xxxxxx);
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___________
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a trust
with total assets in excess of US$5,000,000, not formed for the
specific purpose of acquiring the Securities, whose purchase is
directed by a sophisticated person as described in
Rule 506(b)(2)(ii) under the 1933 Act, or
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___________
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an
entity in which all of the equity owners satisfy the requirements
of one or more of the categories set forth in Section 6 of this
Questionnaire.
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14
7. it has not
purchased the Securities as a result of any form of general
solicitation or general advertising, including advertisements,
articles, notices or other communications published in any
newspaper, magazine or similar media or broadcast over radio,
internet, television or other form of telecommunications, or any
seminar or meeting whose attendees have been invited by general
solicitation or general advertising;
8. if the Subscriber
decides to offer, sell or otherwise transfer any of the Securities,
it will not offer, sell or otherwise transfer any of such
Securities, directly or indirectly, unless:
(a) the sale is to the
Issuer;
(b) the sale is made
outside the United States in a transaction meeting the requirements
of Rule 904 and 905 of Regulation S under the 1933 Act and in
compliance with applicable local laws and regulations in which such
sale is made;
(c) the sale is made
pursuant to the exemption from the registration requirements under
the 1933 Act provided by Rule 144 thereunder and in accordance with
any applicable state securities or “blue sky”
laws;
(d) the Securities are
sold in a transaction that does not require registration under the
1933 Act or any applicable state laws and regulations governing the
offer and sale of securities; and
(e) it has, prior to
such sale pursuant to subsection (b), (c) or (d), furnished to the
Issuer an opinion of counsel of recognized standing reasonably
satisfactory to the Issuer, to such effect.
9. it understands and
agrees that there may be material tax consequences to the
Subscriber of an acquisition or disposition of the Securities. The
Issuer gives no opinion and makes no representation with respect to
the tax consequences to the Subscriber under United States, state,
local or foreign tax law of the Subscriber’s acquisition or
disposition of the Securities;
10. it consents to the
Issuer making a notation on its records or giving instructions to
any transfer agent of the Issuer in order to implement the
restrictions on transfer set forth and described in this
Questionnaire and the Agreement;
11. it is resident in
the United States of America, its territories and possessions or
any state of the United States or the District of Columbia
(collectively the “United
States”), is a “U.S. Person” as such term
is defined in Regulation S or was in the United States at the time
the Securities were offered or the Agreement was executed;
and
12. except as
contemplated in the Agreement, it understands that the Issuer has
no obligation to register any of the Securities or to take action
so as to permit sales pursuant to the 1933 Act (including Rule 144
thereunder).
15
The
Subscriber undertakes to notify the Issuer immediately of any
change in any representation, warranty or other information
relating to the Subscriber set forth herein which takes place prior
to the closing time of the purchase and sale of the
Securities.
Dated:
__________, 2017.
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X
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Signature
of individual (if Subscriber is an individual)
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Authorized
signatory (if Subscriber is not an individual)
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Dragon
Acquisitions LLC
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Name of
Subscriber (please print)
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Name of
authorized signatory (please print)
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16
EXHIBIT B
INSTRUCTIONS FOR WIRING FUNDS
REMITTANCE INSTRUCTIONS
17
EXHIBIT C
FORM OF NOTE
THIS CONVERTIBLE NOTE (THE “NOTE”) AND THE SECURITIES
ISSUABLE UPON THE CONVERSION HEREOF OR WARRANTS THERTO HAVE NOT
BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), NOR UNDER ANY STATE
SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, PLEDGED, SOLD,
ASSIGNED, TRANSFERRED, OR OTHERWISE DISPOSED OF UNLESS AN EXEMPTION
EXISTS OR UNLESS SUCH DISPOSITION IS NOT SUBJECT TO THE SECURITIES
ACT OR STATE SECURITIES LAWS, AND THE AVAILABILITY OF ANY EXEMPTION
OR THE INAPPLICABILITY OF SUCH SECURITIES LAWS MUST BE ESTABLISHED
BY AN OPINION OF COUNSEL, WHICH OPINION OF COUNSEL WILL BE
REASONABLY SATISFACTORY TO THE COMPANY.
Issue Date: ______________
$ ____________
SIX PERCENT (6%) UNSECURED CONVERTIBLE NOTE
1.
General
(a) FOR VALUE RECEIVED, NATURALSHRIMP INCORPORATED
(the “Company”) promises to pay
to the order of
__________________ (the “Holder”) the principal
sum of __________________ ($_________), in lawful
currency of the United States (the “Principal Amount”) on _______________, 2018 (the “Maturity Date”), and to pay
interest to the Holder on the aggregate unconverted and then
outstanding Principal Amount at the rate of six percent (6.0%) per
annum, subject to Section 5 below, payable on the earlier of: (i)
the Maturity Date, and (ii) the date of conversion of the last of
the outstanding Principal Amount and accrued interest. Interest
shall be calculated on the basis of a 360-day year and shall accrue
daily, commencing on the Issue Date, until payment in full of the
Principal Amount, together with all accrued and unpaid interest and
other amounts which may become due hereunder, has been made.
Interest shall cease to accrue with respect to the Principal Amount
converted, provided that the Company has delivered the Conversion
Shares (as defined herein).
(b) Payment of this
Note shall be paid to the Holder by the Company by wire transfer in
accordance with the wiring instructions set out by Holder at time
of payment (or such other instructions as the Holder may give the
Company of from time to time in accordance with Section 6) (or such
other method as may be mutually agreed to by the Holder and the
Company from time to time). The Company will withhold and remit any
tax required to be withheld and remitted to U.S. and/or applicable
foreign taxing authorities. IN EACH
CASE SUBJECT TO THE SECURITIES ACT LEGEND AT THE TOP OF THIS NOTE
AND APPLICABLE LAW, THIS NOTE MAY BE TRANSFERRED WITHOUT THE PRIOR
WRITTEN CONSENT OF THE COMPANY PROVIDED THAT NO TRANSFER SHALL BE
MADE TO A COMPETITOR WITHOUT THE PRIOR WRITTEN CONSENT OF THE
COMPANY.
2.
This section
intentionally left blank.
3.
Event of Default
(a) For the purposes of
this Note, the Company shall be in default upon the occurrence of
any one or more of the following events (each such event being an
“Event of
Default”):
18
(i) default shall be
made in the payment of any installment of principal or interest on
this Note when due and the Company fails to cure such default
within five (5) days after written notice of default is sent to the
Company;
(ii) there
is a material default by the Company in the observance or
performance of any non-monetary representation, warranty, covenant
or agreement contained herein or in the Private Placement
Subscription Agreement by and between the Company and the Holder,
dated as of the date hereof (the “Subscription Agreement”) and the
Company fails to cure such default within thirty (30) days after
written notice of default is sent to the Company (or within such
other time period as may be therein specifically
provided);
(iii) the
Company shall file a voluntary petition in bankruptcy or shall be
adjudicated bankrupt or insolvent, or shall file any petition or
answer seeking or acquiescing in any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar
relief for itself under any present or future federal, state or
other statute, law or regulation relating to bankruptcy, insolvency
or other relief for debtors; or shall seek, consent to, or
acquiesce in, the appointment of any trustee, receiver or
liquidator of the Company or of all or substantially all of the
assets of the Company (the “Assets”), or of any or all of the
royalties, revenues, rents, issues or profits thereof, or shall
make any general assignment for the benefit of creditors, or shall
admit in writing its inability to pay its debts generally as they
become due;
(iv) a
petition to a court of competent jurisdiction shall be filed for
the entry of an order, judgment or decree approving a petition
filed against the Company seeking any reorganization, dissolution
or similar relief under any present or future federal, state or
other statute, law or regulation relating to bankruptcy, insolvency
or other relief for debtors, and such petition shall remain
unvacated or not removed for an aggregate of sixty (60) days
(whether or not consecutive) from the first date of entry thereof
or rejected by such court; or any trustee, receiver or liquidator
of the Company or of all or any part of the Assets, or of any or
all of the royalties, revenues, rents, issues or profits thereof,
shall be appointed without the consent or acquiescence of the
Company and such appointment shall remain unvacated and unstayed
for an aggregate of thirty (30) days (whether or not
consecutive);
(v) the Company ceases
or threatens to cease to carry on its business; or
(b) If any Event of
Default occurs, subject to any cure period, the full Principal
Amount, together with interest and other amounts owing in respect
thereof to the date of acceleration shall become, at the
Holder’s election, immediately due and payable in cash. Upon
payment of the full Principal Amount, together with interest and a
default interest at the rate of 24% per annum (accruing as from the
time of occurrence of the Event of Default) and other amounts owing
in respect thereof, in accordance herewith, this Note shall
promptly be surrendered to or as directed by the Company. The
Holder need not provide and the Company hereby waives any
presentment, demand, protest or other notice of any kind, and the
Holder may immediately and without expiration of any grace period
enforce any and all of its rights and remedies hereunder and all
other remedies available to it under applicable law. Such
declaration may be rescinded and annulled by the Holder at any time
prior to payment hereunder and the Holder shall have all rights as
a Note holder until such time, if any, as the full payment under
this Section 3 shall have been received by it. No such rescission
or annulment shall affect any subsequent Event of Default or impair
any right consequent thereon.
19
4.
Conversion
(a) Investor
Conversion. The Holder shall have the right, but not the
obligation, at any time and from time-to-time while all or any
portion of the Principal Amount under the Note that is still
outstanding to convert all or any portion of the outstanding
Principal Amount and all accrued but unpaid interest thereon into a
number of shares of Common Stock of the Company (the
“Conversion
Shares”) calculated as the total dollar amount to be
converted divided by $0.30 (the
“Conversion
Price”). The Conversion Price shall be subject to the
following adjustments from time to time such that in the event the
Company effects a stock split or subdivision, distribution of bonus
shares to all shareholders or any other reclassification,
reorganization or recapitalization of the Company’s share
capital where the shareholders retain their pro rata holdings in
the Company, the Conversion Price shall be proportionately
adjusted.
(b) Not later than five
(5) Business Days after any conversion date, the Company will
deliver to the Holder, by overnight courier service to the address
of the Holder set out on page 1 of this Note (or such other address
as the Holder may notify the Company of from time to time in
accordance with Section 6), certificates representing the
Conversion Shares (bearing such legends as may be required by
applicable law) representing the aggregate number of Conversion
Shares being acquired.
(c) Upon a conversion
hereunder, the Company shall not be required to issue certificates
representing fractions of any Conversion Shares, and the number of
Conversion Shares shall be rounded down to the nearest whole
number.
5.
Prepayment
(a) The Company may,
upon ten (10) days’ prior written notice to the Holder (a
“Prepayment
Notice”), prepay any portion of the Principal Amount,
and accrued interest thereon, without the prior written consent of
the Holder, subject to the prepayment terms and conditions set out
in this Section 5. The Prepayment Notice shall set forth the date
on which prepayment is to occur, such date not being any earlier
than ten (10) days after the date of the Prepayment Notice and no
later than the Maturity Date (the “Prepayment Date”) and shall set
forth that portion of the Principal Amount to be prepaid, along
with the calculated accrued interest thereon, as through and
including the then applicable Maturity Date (the
“Prepayment
Amount”).
(b) The Prepayment
Amount (less any tax, if applicable to the Holder, required by
applicable law to be withheld by the Company, provided, that the
Company shall be permitted to withhold the amount of tax as above
if it timely and fully provides the Holder with any and all
documentation as may be required the Israeli Taxes Authority to
enable the Holder to be credited by against or offset the amount so
withheld) shall be wire transferred to the Holder by the Company in
accordance with the wiring instructions set out on page 1 of this
Note (or such other instructions as the Holder may give the Company
of from time to time in accordance with Section 6) (or such other
method as may be mutually agreed to by the Holder and the Company
from time to time). The wiring of the Prepayment Amount, or payment
by other means (if agreed upon, as above), by the Company on or
before the Prepayment Date shall be deemed to be payment on the
Prepayment Date unless the wire, or payment by such other means as
may be mutually agreed to by the Holder and the Company, is not
received prior to the Prepayment Date. If only a part of the
Principal Amount is to be prepaid, a new certificate for the
balance of the Principal Amount shall be issued at the expense of
the Company and delivered to the Holder, together with the cheque
representing the Prepayment as provided for in this Section
5(b).
20
(c) At any time after a
Prepayment Notice is given, the Company shall have the right to
deliver to the Holder, or to such other person as may be directed
by the Holder, the Prepayment Amount. Upon the delivery of the
Prepayment Amount to the Holder being made or upon the Prepayment
Date, whichever is later, the Note shall be and be deemed to be
paid.
6.
Adjustments
(a) If, at any time
while any portion of this Note remains outstanding, the Company
effectuates a stock split or reverse stock split of its Common
Stock or issues a dividend on Common Stock consisting of shares of
Common Stock, the Conversion Price and any other amounts calculated
as contemplated hereby or by any of the other Agreements shall be
equitably adjusted to reflect such action. By way of illustration,
and not in limitation, of the foregoing, (i) if the Company
effectuates a 2:1 split of its Common Stock, thereafter, with
respect to any conversion for which the Company issues shares after
the record date of such split, the Conversion Price shall be deemed
to be one-half of what it had been immediately prior to such split;
(ii) if the Company effectuates a 1:10 reverse split of its Common
Stock, thereafter, with respect to any conversion for which the
Company issues shares after the record date of such reverse split,
the Conversion Price shall be deemed to be ten times what it had
been calculated to be immediately prior to such split; and (iii) if
the Company declares a stock dividend of one share of Common Stock
for every 10 shares outstanding, thereafter, with respect to any
conversion for which the Company issues shares after the record
date of such dividend, the Conversion Price shall be deemed to be
such amount multiplied by a fraction, of which the numerator is the
number of shares (10 in the example) for which a dividend share
will be issued and the denominator is such number of shares plus
the dividend share(s) issuable or issued thereon (11 in the
example).
(b) In case of any
capital reorganization or of any reclassification of the capital of
the Company or in case of the consolidation, merger or amalgamation
of the Company with or into any other company or of the sale of the
assets of the Company as or substantially as an entirety or of any
other company, this Note shall, after such capital reorganization,
reclassification of capital, consolidation, merger, amalgamation or
sale, confer the right to convert into that number of shares or
other securities or property of the Company or of the company
resulting from such capital reorganization, reclassification,
consolidation, merger, amalgamation or to which such sale shall be
made, as the case may be, to which the Holder of the shares
deliverable at the time of such capital reorganization,
reclassification of capital, consolidation, merger, amalgamation or
sale had the Note been converted would have been entitled on such
capital reorganization, reclassification, consolidation, merger,
amalgamation or sale and in any such case, if necessary,
appropriate adjustments shall be made in the application of the
provisions set forth herein with respect to the rights and interest
thereafter of the Holders of the Notes to the end that the
provisions set forth herein shall thereafter correspondingly be
made applicable as nearly as may reasonable be expected in relation
to any shares or other securities or property thereafter
deliverable on the exercise of the Warrants. The subdivision or
consolidation of the shares at any time outstanding into a greater
or lesser number of shares (whether with or without par value)
shall not be deemed to be a capital reorganization or a
reclassification of the capital of the Company for the purposes of
this Section.
7.
Notices
(a) Any and all notices
or other communications or deliveries to be provided by the Holder
hereunder, including, without limitation, any Conversion Notice,
shall be in writing, sent by a nationally recognized overnight
courier service or by electronic mail, addressed to the Company:
NaturalShrimp Incorporated, Attn: Xxxxxx Xxxxxxxxxx, President,
00000 Xxxxxxx Xx, Xxxxx 000, Xxxxxx, Xxxxx 00000, Email:
xxxxxxxxxxx@XxxxxxxXxxxxx.xxx or such other address as the Company
may specify for such purposes by notice to the Holder delivered in
accordance with this Section 7.
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(b) Any and all notices
or other communications or deliveries to be provided by the Company
hereunder shall be in writing and delivered personally, by
facsimile, sent by a nationally recognized overnight courier
service addressed to the Holder at the Email or street address of
the Holder appearing on page 1 of this Note (or such other address
as the Holder may notify the Company of from time to time in
accordance with this Section 6), or if no such email or street
address appears, at the address of the Holder to which this Note
was delivered.
(c) Any notice or other
communication or deliveries hereunder shall be deemed given and
effective on the earliest of (a) the date of transmission, if such
notice or communication is delivered via electronic mail at the
address specified in this Section 6 prior to 5:30 p.m. (U.S.
Eastern Time), (b) the date after the date of transmission, if such
notice or communication is delivered via electronic mail at the
Email address specified in this Section 6 later than 5:30 p.m.
(U.S. Eastern Time) on any date and earlier than 11:59 p.m. (U.S.
Eastern Time) on such date, (c) the second Business Day following
the date of mailing, if sent by nationally recognized overnight
courier service, or (d) upon actual receipt by the party to whom
such notice is required to be given.
8.
Definitions
(a) For the purposes
hereof, in addition to the terms defined elsewhere in this Note,
the following terms shall have the following meanings:
(i) “Business Day” means any day on
which banking institutions in New York are open for
business;
(ii) “Competitor”
means any person engaged directly or indirectly in any business in
which NaturalShrimp Incorporated or a subsidiary or affiliate
thereof is then engaged in a similar business; and
(iii) “Person”
means a corporation, an association, a partnership, organization, a
business, an individual, a government or political subdivision
thereof or a governmental agency.
9.
Replacement of Note if Lost or Destroyed
If this
Note shall be mutilated, lost, stolen or destroyed, the Company
shall execute and deliver, in exchange and substitution for and
upon cancellation of a mutilated Note, or in lieu of or in
substitution for a lost, stolen or destroyed Note, a new Note for
the balance outstanding at such time with respect to the Principal
Amount, but only upon receipt of evidence of such loss, theft or
destruction of such Note, and of the ownership hereof, and
indemnity, if requested, all reasonably satisfactory to the
Company.
10.
Governing Law
All
questions concerning the construction, validity, enforcement and
interpretation of this Note shall be governed by and construed and
enforced in accordance with the internal laws of Nevada, without
regard to the principles of conflicts of law thereof. Any dispute
arising under or in relation to this Note shall be resolved
exclusively in the competent courts in Nevada, and each of the
parties hereby submits irrevocably to the jurisdiction of such
court.
11.
Waivers
Any
waiver by the Company or the Holder of a breach of any provision of
this Note shall not operate as or be construed to be a waiver of
any other breach of such provision or of any breach of any other
provision of this Note. The failure of the Company or the Holder to
insist upon strict adherence to any term of this Note on one or
more occasions shall not be considered a waiver or deprive that
party of the right thereafter to insist upon strict adherence to
that term or any other term of this Note. Any waiver must be in
writing.
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12.
Next Business Day
Whenever any
payment or other obligation hereunder shall be due on a day other
than a Business Day, such payment shall be made on the next
succeeding Business Day.
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NATURALSHRIMP INCORPORATED
By:
Authorized
Signatory
Name:
Xxxxxx Xxxxxxxxxx
Title:
President
24