SUBSCRIPTION AGREEMENT
ATLANTIS AQUAFARM
THIS SUBSCRIPTION AGREEMENT IS INTENDED ONLY FOR THE USE OF OFFICERS AND
DIRECTORS OF THE COMPANY AND MAY NOT BE USED FOR ANY OTHER POTENTIAL INVESTOR.
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF
THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS
INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE
SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING
AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS
DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND
MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
REGISTRATION OR EXEMPTIONS THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL
BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE
PERIOD OF TIME.
DATED AS OF JUNE 27, 1997
SUBSCRIPTION AGREEMENT
Subscription Agreement, dated as of June 27, 1997, between ATLANTIS
AQUAFARM INC., a New York corporation (the "Company"), and Xxxxxx Xxxxxxxxxx, a
New York resident ("Subscriber").
WHEREAS, the Subscriber desires to subscribe for, and the Company desires
to make available for purchase Fifty Six Thousand Two Hundred Fifty (56,250)
shares of the Company's Common Stock, par value $.001 per share (the "Shares"),
on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants and obligations
set forth in this Agreement, the parties hereto agree as follows:
1. Subscription for the Shares. Subject to all of the terms and conditions
of this Agreement, and in reliance upon the representations and warranties
contained herein, the Subscriber hereby subscribes for and agrees to purchase
the Shares for his own account, and the Company agrees to sell to the Subscriber
the Shares at $.10/share for a total purchase price of Five Thousand Six Hundred
and Twenty Five Dollars ($5,625).
2. Subscriber's Representations, Warranties and Covenants.
(a) Accredited Status. The Subscriber qualifies as an "accredited
investor" as defined in Rule 501(a) of Regulation D promulgated by the
Securities and Exchange Commission under the Securities Act of 1933, as amended
(the "1933 Act"), by reason of his status as an officer and/or director of the
Company.
2
(b) Investment Intention and Restrictions on Disposition. The
Subscriber represents and warrants that the Subscriber is acquiring the Shares
being purchased by him hereunder solely for the Subscriber's own account for
investment and not with a view to, or in connection with, any resale or other
distribution thereof in any transaction or series of transactions that would be
in violation of the securities laws of the United States or any state thereof.
The Subscriber agrees that he will not, directly or indirectly, offer, transfer,
sell, pledge, hypothecate or otherwise dispose of any of the Shares (or solicit
any offers to buy, purchase or otherwise acquire or take a pledge of any of the
Shares) or any interest therein, or any rights relating thereto, except in
compliance with (i) the Securities Act of 1933, as amended, and the rules and
regulations thereunder (the "Act"), (ii) all applicable state securities or
"blue sky" laws. The Subscriber further understands, acknowledges and agrees
that none of the Shares or any economic or voting rights relating thereto may be
transferred, sold, pledged, hypothecated or otherwise disposed of unless such
disposition is pursuant to an effective registration statement under the Act and
is in compliance with applicable state securities laws or is exempt from such
registration and/or compliance. Any attempt by the Subscriber, directly or
indirectly, to offer, transfer, sell, pledge, hypothecate or otherwise dispose
of any the Shares or any economic or voting rights relating thereto without
complying with the provisions of this Agreement and the Stockholder Agreement
shall be void and of no effect.
(c) Restrictions on Transfer. The Subscriber acknowledges receipt of
advice from the Company that (i) the Shares being purchased by him hereunder
have not been registered under the Act or qualified under any state securities
or "blue sky" laws, (ii) the Shares must be held indefinitely and such
Subscriber must continue to bear the economic risk of the investment in the
Shares unless the Shares are subsequently registered under the Act or an
exemption from such registration is available, (iii) there may not be any public
market for the Shares in the foreseeable future, (iv) when and if the Shares may
be disposed of without registration in reliance upon Rule 144, such disposition
can be made only in limited amounts and in accordance with the terms and
conditions of such Rule, (v) if the exemption afforded by Rule 144 is not
available, public sale without registration will require the availability of an
exemption under the Act, (vi) a restrictive legend in the form set forth in
Section 7 shall be placed on the certificates representing the Shares, and (vii)
a notation shall be made in the appropriate records of the Company indicating
that the Shares are subject to restrictions on transfer and, if the Company
should in the future engage the services of a stock transfer agent appropriate
stop-transfer instructions will be issued to such transfer agent with respect to
the Shares.
(d) Access to Information. The Subscriber represents and warrants
that (i) he is familiar with the business and financial condition, properties,
operation and prospects of the Company and that he has been granted the
opportunity to ask questions of, and receive answers from, representatives of
the Company concerning the terms and conditions of the purchase of the Shares
hereunder and to obtain any additional information that he deems necessary or
appropriate to evaluate an investment in the Company, including the Registration
Statement, and all such questions have been answered to the full satisfaction of
Subscriber, (ii) Subscriber, his attorney, accountant or other financial advisor
has had access to all material books and records of the Company and all material
contracts and documents relating to the Company, its business and the purchase
of the Shares contemplated hereby, (iii) no oral representations have been made
or oral information furnished to Subscriber or his adviser(s) in connection with
the offering of the Shares which were in any way inconsistent with the books and
records and material contracts and documents of the Company made available to
Subscriber or his adviser(s) for review, (iv) his knowledge and experience in
financial and business matters is such that he is capable of evaluating the
merits and risk of the investment in the Shares, and (v) he is at least 21 years
of age and is a resident of the State of New York.
3
(e) Ability to Bear Risk. The Subscriber represents and warrants
that (i) the financial situation of the Subscriber is such that he can afford to
bear the economic risk of holding the Shares purchased by him hereunder for an
indefinite period, (ii) he can afford to suffer the complete loss of his
investment in the Shares, (iii), Subscriber has adequate means of providing for
his and his dependents' current needs and possible personal contingencies, (iv)
has no need for liquidity in this investment, and (v) can afford a complete loss
of such investment.
(f) Current Information. All information which Subscriber has
provided to the Company concerning his investor status and financial position,
including the information contained in the attached Investor Questionnaire, is
correct and complete as of the date set forth at the end hereof, and if there
should be any adverse change in such information prior to his subscription being
accepted by the Company, Subscriber shall immediately provide the Company with
such information.
3. Representations and Warranties of the Company. The Company represents
and warrants to the Subscriber that: (i) the execution and delivery of this
Subscription Agreement, the performance of the Company's obligations hereunder
and the consummation by it of the transactions contemplated hereby have been
duly and validly authorized by all requisite corporate action on the part of the
Company, and (ii) the Shares, when issued and delivered in accordance with the
terms hereof, will be validly issued, fully paid and nonassessable, and free and
clear of any liens or encumbrances other than those created pursuant to this
Agreement or otherwise in connection with the transactions contemplated hereby
and thereby.
4. State Securities Laws. Notwithstanding anything in this Agreement to the
contrary, the Company shall not have any obligation to sell the Shares to the
Subscriber if the Subscriber is a resident of a jurisdiction in which the sale
of the Shares to the Subscriber would constitute a violation of the securities
laws of such jurisdiction.
5. Tax Matters.
(a) Individual Risk. The Subscriber represents and warrants that he
understands the tax consequences of the transactions contemplated by this
Agreement, including his purchase of Shares, and any disposition of the Shares,
and acknowledges that he will be solely responsible for any and all tax
liabilities payable by him in connection with the ownership of the Shares
including the purchase, ownership and disposition of any of the Shares. The
Subscriber acknowledges that the Company has made no representation or warranty
as to the tax consequences of any of the transactions contemplated by this
Agreement and the Company shall have no liability or obligation to the
Subscriber with respect to any liability or obligations the Subscriber may incur
as a result of such transactions.
(b) Withholding. The Company shall have the right to withhold or
require the Subscriber to remit to the Company an amount sufficient to satisfy
federal, state and local withholding tax requirements incurred upon the
purchase, ownership or disposition of any share of Shares, and the Company may
defer any issuance of stock or payment of cash from any source whatsoever to the
Subscriber until such requirements are satisfied.
4
6. Stock Certificate Legends. The certificates representing the Shares
being purchased by the Subscriber hereunder shall bear the following legend:
"THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND MAY NOT BE OFFERED, SOLD, ASSIGNED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS AND UNTIL REGISTERED UNDER THE ACT
AND ANY APPLICABLE STATE SECURITIES LAWS OR UNLESS IT IS ESTABLISHED TO THE
SATISFACTION OF COUNSEL FOR THE ISSUER THAT SUCH OFFER, SALE, ASSIGNMENT,
PLEDGE, HYPOTHECATION, TRANSFER OR OTHER DISPOSITION IS EXEMPT FROM REGISTRATION
UNDER, OR IS OTHERWISE IN COMPLIANCE WITH, THE ACT AND ALL OTHER APPLICABLE
SECURITIES LAWS.
7. Indemnification. Subscriber hereby indemnifies and holds harmless the
Company, its directors and officers and its affiliates from and against all
damages, losses, costs, and expenses (including reasonable attorneys' fees)
which they may incur by reason of the failure of Subscriber to fulfill any of
the terms or conditions of this Agreement or by reason of any breach of the
representations and warranties made by Subscriber herein or in any document
provided by the undersigned to the Company.
8. Miscellaneous.
(a) Notices. All notices and other communications required or
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been given if delivered personally or by telecopy or sent by
certified mail, return receipt requested, postage prepaid, or by Federal Express
or other similar courier service to the parties to this Agreement at the
following addresses or to such other address as the party to this Agreement
whose address it is shall specify by notice to the other: if to the Purchaser,
to the Purchaser at the address set forth under the Purchaser's name on the
Signature Page; and if to the Company, to it at 000 00xx Xxxxxx, Xxxxxxxx, Xxx
Xxxx 00000, Attention: Secretary, with a copy to Xxxxxxxx Davidson LLP, 000
Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention:
Xxxxxx X. Xxxxxxxx.
(b) Binding Effect; Benefits. This Agreement shall be binding upon
and inure to the benefit of the parties to this Agreement and their respective
heirs, successors and assigns. Nothing in this Agreement, express or implied, is
intended or shall be construed to give any person other than the parties to this
Agreement and their respective heirs or successors or permitted assigns any
legal or equitable right, remedy or claim under, or in respect of, any agreement
or any provision contained herein.
5
(c) Waiver; Amendment. No action taken pursuant to this Agreement,
including, without limitation, any investigation by or on behalf of either
party, shall be deemed to constitute a waiver by the party taking such action,
of compliance by the other party with any representations, warranties, covenants
or agreements contained herein. The waiver by either party hereto of a breach of
any provision of this Agreement shall not operate or be construed as a waiver of
any preceding or succeeding breach and no failure by either party to exercise
any right or privilege hereunder shall be deemed a waiver of such party's rights
or privileges hereunder, or shall be deemed a waiver of such party's rights to
exercise the same at any subsequent time or times hereunder. Neither this
Agreement nor any terms or provision hereof may be amended, modified, waived or
supplemented orally, but only by a written instrument executed by the Company
and the Subscriber.
(d) Assignability. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be
assignable by the Company without the prior written consent of the Subscriber,
or by the Subscriber without the prior written consent of the Company.
(e) Applicable Law. This Agreement shall be governed by and
construed in accordance with the law of the State of New York, regardless of the
law that might be applied under principles of conflicts of law.
(f) Section and Other Headings. The section and other headings
contained in this Agreement are for reference purposes only and shall not affect
the meaning or interpretation of this Agreement.
(g) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
(h) Pronouns. Any use of masculine pronouns herein shall be deemed
to include the feminine and neuter cases, as applicable.
(i) Entire Agreement. This Agreement shall constitute the entire
agreement of the parties hereto with respect to the subject hereof and shall
supersede all prior agreements or understandings, whether written or oral.
(j) Severability. In case any provision of this Agreement shall be
6
invalid or unenforceable in any jurisdiction, the validity and enforceability of
the remaining provisions shall not in any way be affected thereby.
IN WITNESS WHEREOF, the Company and the Subscriber have executed this
Agreement as of the date first set forth above.
ATLANTIS AQUAFARM, INC.
By: /s/Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: President
"SUBSCRIBER"
/s/Xxxxxx Xxxxxxxxxx
Subscriber hereby Xxxxxx Xxxxxxxxxx
Subscribes for 56,250
Shares Address: 000 Xxxxxxxxx Xxxx Xxxxx
Xxxxxxx, XX 00000
7
