11
Exhibit 3(g)
ALOTTAFUN, INC.
SUBSCRIPTION AGREEMENT
1. General:
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This Subscription Agreement sets forth the terms under
which the undersigned investor, ________________________________________ (the
"Investor"), will acquire ______ Shares of the Common Stock, $___ par value per
share (the "Shares"), at a price of $_____ per share of ALOTTAFUN, INC., a
Delaware corporation (the "Company") for an aggregate purchase price of
$_______.
The Shares are being sold by the Company. There will be
a finder's concession of paid, and the Company will receive the balance of the
offering proceeds.
The Shares are being offered by the Company to a suitable
Investor pursuant to Rules 504 or 506 of Regulation D and Section 4(2) of the
Securities Act of 1933, as amended. Execution of this Subscription Agreement by
the Investor shall constitute an offer by the Investor to subscribe for the
Shares on the terms and conditions specified herein. The Company reserves the
right to reject such subscription offer, or, by executing a copy of this
Subscription Agreement, to accept such offer. If the Investor's offer is
accepted, the Company will execute this Subscription Agreement and issue the
Shares. If the Investor's offer is rejected, the payment accompanying this
Subscription Agreement will be returned to the Investor, with no interest
thereon, with the notice of rejection.
2. Acceptance of Subscription Agreement:
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It is understood and agreed by the undersigned that the
Company will have the unconditional right to reject this subscription, in whole
or in part, if it believes that the undersigned is not a qualified purchaser
under Regulation D promulgated under the Securities Act of 1933, as amended, or
for any other reason.
3. Investor's Representations, Warranties and Covenants:
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The Investor represents, warrants and covenants to the Company
as follows:
a. He acknowledges that he has been furnished with and has
been given access to all underlying documents in connection with this
transaction as well as such other information as he deems necessary or
appropriate as a prudent and knowledgeable investor in evaluating his investment
in the Shares. He further acknowledges that the Company has given him the
opportunity to obtain additional information and to evaluate the merits and
risks of his investment. He acknowledges that he has had the opportunity to ask
questions of, and receive satisfactory answers from, the officers and directors
of the Company concerning the terms and conditions of the offering.
b. He acknowledges that this transaction has not been
scrutinized by the United States Securities and Exchange Commission or by any
state securities commissions.
c. He has adequate means of providing for his current and
future needs and possible personal contingencies, and has no need for liquidity
of his investment in the Shares.
d. He can bear the economic risk of losing his entire
investment in the Shares.
e. He is acquiring the Shares for his own account, for
investment only and not with a view toward the resale, fractionalization,
division or distribution thereof and he has no present plans to enter into any
contract, undertaking, agreement or arrangement for any such resale,
distribution, division or fractionalization thereof.
f. He does not have an overall commitment to investments which
are not readily marketable, including the Shares and other similar investments,
disproportionate to his net worth or gross income.
g. He understands that the offer and sale of the Shares is
being made by means of a private placement of Shares and that he has read or
reviewed and is familiar with this Subscription Agreement.
h. He was previously informed that all documents, records and
books pertaining to this investment were at all times available at the offices
of the Company, 000 X. Xxxx Xxxxxx, Xxxx Xxxx, Xxxxxxxxx 00000; that all such
documents, records and books pertaining to this investment requested by the
Investor have been made available to him and any persons he has retained to
advise him; and that he has no questions concerning any aspect of the investment
for which he has not previously received satisfactory answers.
i. He and his agents or advisers have had an opportunity to
ask questions of and receive answers from the Company, or a person or persons
acting on its behalf, concerning the terms and conditions of this Subscription
Agreement and the transactions contemplated hereby and thereby, as well as the
affairs of the Company and related matters.
j. He has had an opportunity to obtain additional information
necessary to verify the accuracy of the information referred to in subparagraph
(i) hereof.
k. HE UNDERSTANDS THAT THE COMPANY HAS A LIMITED FINANCIAL AND
OPERATING HISTORY.
l. HE UNDERSTANDS THAT THE SHARES ARE A SPECULATIVE INVESTMENT
WHICH INVOLVES A HIGH DEGREE OF RISK OF LOSS BY HIM OF HIS ENTIRE INVESTMENT.
CERTAIN OF THE RISKS CONCERNING AN INVESTMENT IN THE SHARES ARE SET FORTH BELOW.
HOWEVER, THERE ARE ADDITIONAL RISKS IN CONNECTION WITH SUCH INVESTMENT, AND
THERE IS NO ASSURANCE THAT THE RISKS SET FORTH BELOW ARE THE MOST SIGNIFICANT
WHICH AN INVESTOR SHOULD CONSIDER.
(i) Limited Operating History. To date, the Company has not generated
profitable operations. There can be no assurance the Company will be
profitable or that it will be able to expand its operations. The
Company's success is dependent upon its ability to develop new sources
of revenue and to obtain adequate financing for the expansion of its
business. There is no assurance that the Company will be able to
develop such revenue or obtain such financing. The growth of the
Company's operations are subject to all of the risks inherent in
development of any new business enterprise, including the lack of an
operating history. The likelihood or success of the Company should be
considered in light of the problems, expenses and delays which are
frequently encountered in the formation of a new business and the
competitive environment in which the Company will operate.
(ii) Dilution. The net tangible book value per share of the Shares after
the offering will be substantially less than the price of the Shares
offered hereby. Thus, Investors acquiring Shares in this offering will
be subject to immediate substantial dilution.
(iii)Requirement for Additional Funds. It is anticipated that all of the
proceeds from the Shares will be utilized to fund the Company's
ongoing operations. There is no assurance that the Company will not
require additional capitalization after expending all the proceeds of
this offering. In such event, the failure of the Company to secure
additional funds necessary to finance continued operations will have
an adverse impact on the financial position and growth of the Company,
and could result in the loss by Investor of the entire investment in
the Company. The Company currently has no alternative sources of
financing available to it, and there can be no assurance that
alternative financing will be available or available on acceptable
terms when and if the Company requires such financing.
(iv) Determination of Offering Price of Shares. The offering price for the
Shares has been determined arbitrarily by the Company and is not an
indication of the value of the Shares or the assets or earnings of the
Company.
(v) Shares Eligible for Future Sale. The possibility of future sales by
existing shareholders under Rule 144 may, in the future, have a
depressive effect on the market price of the Company's Common Stock,
and such sales, if substantial, might also adversely affect the
Company's ability to raise additional capital.
Generally, under Rule 144, a person holding restricted securities for
a period of at least one year may, every three months, sell in
ordinary brokerage transactions or transactions with a market maker an
amount equal to the greater of (a) 1% of the Company's then
outstanding Common Stock; or (b) the average weekly volume of sales
during the four calendar weeks preceding the sale, if there is
adequate public information available concerning the Company. Rule 144
does not limit the amount of restricted securities which a person who
is not an affiliate of the Company may sell after three years.
Affiliate sales under Rule 144 are subject to the above-described
volume limitations regardless of the length of the holding period.
(vi) No Assurance of Dividends on the Shares; No Likelihood of Future
Dividends on Common Stock. The Company has never paid and does not
expect to pay in the foreseeable future any cash dividends on its
Common Stock. It is anticipated that any earnings which may be
generated from operations of the Company will be used to finance the
growth of the Company.
(vii)Limitation on Officer and Director Liability; Indemnification. In
accordance with Delaware law, the Company's Articles of Incorporation
and Bylaws contain provisions providing for the maximum
indemnification provided under Delaware law for officers, directors,
employees and agents.
As a result of the inclusion of such provisions, neither the Company
nor its stockholders may be able to recover monetary damages against
officers, directors, employees and agents of the Company for actions
taken by them, and, with respect to directors, which actions are
ultimately found not to have violated the specific provisions
enumerated above, although it may be possible to obtain injunctive or
other equitable relief with respect to certain actions. If equitable
remedies are found not to be available to stockholders in any
particular case, stockholders may not have an effective remedy against
the challenged conduct.
m. He understands all aspects of and risks associated with
this investment or has consulted with his own financial adviser who has advised
him thereof and he has no further questions with respect thereto.
n. HE UNDERSTANDS THAT THERE ARE SUBSTANTIAL RESTRICTIONS ON
THE SALE OR OTHER TRANSFERABILITY OF THE SHARES; the Shares will not be, and the
Investor has no right to require, that the Shares be registered under the
Securities Act of 1933 or under any state securities laws; there will be no
public market for the Shares and the undersigned may not be able to avail
himself of the provisions of Rule 144 adopted by the Securities and Exchange
Commission under the Securities Act with respect to the resale of the Shares
and, accordingly, THE INVESTOR MAY HAVE TO HOLD THE SHARES INDEFINITELY AND
POSSIBLY MAY NOT BE ABLE TO LIQUIDATE HIS INVESTMENT OR TRANSFER ANY SHARE
WITHOUT POTENTIAL ADVERSE FINANCIAL CONSEQUENCES; THEREFORE, THE SHARES SHOULD
NOT BE PURCHASED UNLESS THE INVESTOR HAS LIQUID ASSETS SUFFICIENT TO ASSURE THAT
SUCH PURCHASE WILL CAUSE NO UNDUE FINANCIAL DIFFICULTIES AND UNLESS THE INVESTOR
CAN OTHERWISE PROVIDE FOR HIS CURRENT NEEDS AND POSSIBLE PERSONAL CONTINGENCIES.
o. He will not transfer or assign this subscription, the
Shares or any interest therein without the prior written consent of the Company.
If this subscription is accepted, he agrees that the assignment and
transferability of the Shares subscribed for and acquired by him will be
governed by all applicable laws.
p. He understands that the Shares have not been registered
under the Securities Act of 1933 or under any state securities laws on the
grounds that the issuance and sale of the Shares to the Investor is exempt as
not involving a public offering. He further acknowledges his understanding that
the Company's reliance on such exemption is, in part, based upon the
representations, warranties and covenants of the Investor set forth herein.
q. He is knowledgeable and experienced in financial and
business matters. He and/or his financial or business advisers, if any, are
capable of evaluating the merits and risks of an investment in the Shares.
r. All information which he has provided to the Company
concerning his financial position and knowledge of financial and business
matters is correct and complete as of the date set forth at the end of this
Subscription Agreement, and if there should be any material change in such
information prior to acceptance of this Subscription Agreement by the Company,
he will immediately provide the Company with such information.
s. He is purchasing the Shares without relying on any offering
literature or prospectus other than the information set forth herein and
furnished by the Company.
t. He is a bona fide resident of the State of
___________________, maintains his principal residence there, and is at least
eighteen (18) years of age.
u. If he is executing this Subscription Agreement on behalf of
a corporation, partnership, trust or other entity, he has been duly authorized
by such entity to execute this Subscription Agreement and all other instruments
in connection with the purchase of the Shares, his signature is binding upon
such corporation, partnership, trust or other entity and he represents and
warrants that such corporation, partnership, trust or other entity was not
organized for the purpose of acquiring the Shares subscribed for pursuant to
this Subscription Agreement and that the acquisition of the Shares is an
authorized investment of the corporation, partnership, trust or other entity.
v. This Subscription Agreement shall be binding upon the
heirs, estate, legal representatives, successors and assigns of the undersigned.
w. The following special provisions are applicable solely to
Investors offered or sold Shares in the particular states indicated:
For Florida Investors. The undersigned understands
that in accordance with the provisions of the Florida
Securities and Investor Protection Act, he has the
right to cancel and void his investment in the Shares
until three (3) days after the later of: (i) the
first tender of consideration is made by the
Investor; or (ii) the availability of that privilege
is communicated to him.
The undersigned also understands that these
securities have not been registered under the
Securities Act of 1933, as amended, or the Florida
Securities and Investor Protection Act, by reason of
specific exemptions thereunder relating to the
limited availability of the offering. These
securities cannot be sold, transferred or otherwise
disposed of to any person or entity unless
subsequently registered under the Securities Act of
1933, as amended, or the laws of Florida, if such
registration is required.
For California Residents. These securities have not
been registered under the Securities Act of 1933, as
amended, or the California Corporations Code, by
reason of specific exemptions thereunder relating to
the limited availability of the offering. These
securities cannot be sold, transferred, or otherwise
disposed of to any person or entity unless they are
subsequently registered or an exemption from
registration is available.
For Colorado Residents. These securities have not
been registered under the Securities Act of 1933, as
amended, or the Colorado Securities Act of 1981, by
reason of specific exemptions thereunder relating to
the limited availability of the offering. These
securities cannot be sold, transferred, or otherwise
disposed of to any person or entity unless they are
subsequently registered or an exemption from
registration is available.
For Connecticut Residents. These securities have not
been registered under Section 36-485 of the
Connecticut Uniform Securities Act and therefore
cannot be resold unless they are registered under
such Act or unless an exemption from registration is
available.
For Michigan Residents. These securities have not
been registered under Section 451.701 of the Michigan
Uniform Securities Act (the "Act") and may be
transferred or resold by residents of Michigan only
if registered pursuant to the provisions of the Act
or if an exemption from registration is available.
For Nevada Residents. These securities have not been
registered under the Securities Act of 1933, as
amended, or the Nevada Securities Act, by reason of
specific exemptions thereunder relating to the
limited availability of the offering. These
securities cannot be sold, transferred, or otherwise
disposed of to any person or entity unless they are
subsequently registered or an exemption from
registration is available.
For New York Residents. These securities have not
been registered under the Securities Act of 1933, as
amended, or the New York Fraudulent Practices
("Xxxxxx") Act, by reason of specific exemptions
thereunder relating to the limited availability, or
otherwise disposed of to any person or entity unless
subsequently registered under the Securities Act of
1933, as amended, or the New York Fraudulent
Practices ("Xxxxxx") Act, if such registration is
required.
This offering has not been filed with or reviewed by
the Attorney General prior to its issuance and use.
The Attorney General of the State of New York has not
passed on or endorsed the merits of this offering.
Any representation to the contrary is unlawful.
Purchase of these securities involves a high degree
of risk. This offering does not contain an untrue
statement of a material fact or omit to state a
material fact necessary to make the statements made,
in light of the circumstances under which they were
made, not misleading, it contains a fair summary of
the material terms of documents purported to be
summarized herein.
4. Responsibility and Indemnification:
The Company will exercise its best judgment in the conduct of
all matters arising under this Subscription Agreement. The undersigned
acknowledges that he understands the meaning and legal consequences of the
representations and warranties contained herein, and he hereby agrees to
indemnify and hold harmless the Company, its officers, directors, shareholders
and employees, and any of their affiliates and their officers, directors,
shareholders and employees, or any professional advisor or entity thereto, from
and against any and all loss, damage, liability or expense, including costs and
reasonable attorney's fees, to which said entities and persons may be put or
which they may incur by reason of, or in connection with, any misrepresentation
made by the Investor, any breach of any of his warranties, or his failure to
fulfill any of his covenants or agreements under this Subscription Agreement.
5. Company Solely Responsible for Disclosure; No Independent Review or
Opinions.
The Company has assumed sole responsibility for compliance
with the disclosure requirements of federal and state securities laws in
connection with the offer and sale of the Shares. No law firm, accounting firm,
securities broker/ dealer or other third party has conducted any due diligence
review of the Company and its business and affairs or any disclosures with
respect thereto, written or oral, made by the Company or others. The Company has
agreed to indemnify and hold harmless its law firm for any claim, loss, damage
or liability incurred as a result of violation of federal or state securities
laws in connection with the disclosure obligations thereof. Notwithstanding the
preparation of any documents or agreements related to the Company or this
investment, the Company's law firm has not rendered any legal opinions
concerning any aspect of the Company's business and affairs, including but not
limited to, the validity or enforceability of any contracts, agreements,
obligations or security interests related to an investment in the Company. By
execution of this Subscription Agreement, the undersigned acknowledges that the
Company is solely responsible for all disclosures to potential Investors
concerning the Company and its business and affairs and that no legal opinions
have been rendered by the Company's law firm as described above. For value
received, the undersigned does hereby release the Company's law firm and its
officers, directors, shareholders and employees from any claim, loss, liability
or damage with respect to the foregoing.
6. Survival of Representations, Warranties, Covenants and
Agreements:
The representations, warranties, covenants and agreements
contained herein shall survive the delivery of, and the payment for, the Shares.
7. Notices:
Any and all notices, designations, consents, offers,
acceptances or any other communication provided for herein shall be given in
writing by registered or certified mail which shall be addressed to, in the case
of the Company, 000 X. Xxxx Xxxxxx, Xxxxx 000, Xxxx Xxxx, Xxxxxxxxx 00000, and
in the case of the Investor, to the address set forth in this Subscription
Agreement or otherwise appearing on the books of the Company or his residence or
to such other address as may be designated by him in writing.
8. Miscellaneous:
This Subscription Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Delaware, both
substantive and remedial. The section headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Subscription Agreement. This Subscription Agreement shall
be enforceable in accordance with its terms and be binding upon and shall inure
to the benefit of the parties hereto and their respective successors, assigns,
executors and administrators, but this Subscription Agreement and the respective
rights and obligations of the parties hereunder shall not be assignable by any
party hereto without the prior written consent of the other. This Subscription
Agreement represents the entire understanding and agreement between the parties
hereto with respect to the subject matter hereof; supersedes all prior
negotiations, letters and understandings relating to the subject matter hereof;
and cannot be amended, supplemented or modified except by an instrument in
writing signed by the party against whom enforcement of any such amendment,
supplement or modification is sought. In the event of any litigation between the
parties to this Subscription Agreement relating to, or arising out of, this
Subscription Agreement, the prevailing party shall be entitled to an award of
reasonable attorney's fees and costs, whether incurred before, during or after
trial or at the appellate level. The failure or finding of invalidity of any
provision of this Subscription Agreement shall in no manner affect the right to
enforce the other provisions of same, and the waiver by any party of any breach
of any provision of this Subscription Agreement shall not be construed to be a
waiver by such party of any subsequent breach of any other provision.
9. Subscription Amount and Payments:
Investor hereby subscribes for ______ Shares at a price of
$______ per share for a total purchase price of $________ and tenders to the
Company the Investor's check payable to the order of ALOTTAFUN, INC.
10. THE UNDERSIGNED HEREBY REPRESENTS THAT HE HAS READ THIS ENTIRE
SUBSCRIPTION AGREEMENT AND THE RELATED DOCUMENTS.
[BALANCE OF PAGE LEFT INTENTIONALLY BLANK]
11. Suitability Questions:
Please complete all the following suitability questions below.
a. I am an Accredited Investor because I meet one of the
following standards:
_____ (i) An individual whose individual net worth or joint
net worth with that individual's spouse, exceeds $1,000,000 (including the value
of homes, home furnishings and personal automobiles).
_____ (ii) Natural person(s) who had an income in excess of
$200,000 (individual) or $300,000 (joint) in each of the years 1999 and 1998 and
who reasonably expects an income in excess of $200,000 (individual) or $300,000
(joint) in 2000. For purposes of this offering, individual income shall equal
adjusted income, as reported in the Investor's federal tax return, increased by
the following amounts: (i) the amount of any tax exempt interest received, (ii)
the amount of losses claimed as a limited partner in a limited partnership,
(iii) any deduction claimed for depletion, (iv) amounts contributed to an XXX or
Xxxxx retirement plan, (v) alimony paid, and (vi) any amount by which income
from long-term capital gains has been reduced in arriving at adjusted gross
income pursuant to the provisions of Section 1202 of the Internal Revenue Code.
For the individual test, income related to a spouse is excluded.
___ (iii) Employee Benefit Plan which has total assets
in excess of $5,000,000.
___ (iv) A Self-Directed Plan with investment
decisions made solely by persons that are accredited investors.
___ (v) A Trust with total assets in excess of $5,000,000
not formed for the specific purpose of acquiring the securities offered, whose
purchase is directed by a sophisticated person as described in Rule 506(b) (2)
(ii) of the Securities Act.
___ (vi) Any entity in which all of the equity owners
are accredited investors.
b. Do you think you have sufficient knowledge of the Company
to evaluate the risks associated with investing in the Shares?
Yes_____ No_____ If you answered No - why?________
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c. If you answered "No" to the preceding question, do you have
an Investment Advisor or Purchaser Representative upon whom you rely for
investment advice?
Yes_____ No_____ If so, please provide
his name and address
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d. Do you understand the nature of the investment in the
Shares and the risks involved?
Yes_____ No_____
e. Do you understand that you will not be able to resell the
Shares which you purchase or the underlying shares of Common Stock into which
the Shares are convertible, unless you do so in an exempt transaction or unless
you take steps to register them under the federal Securities Act of 1933 and
applicable state securities laws and then only if the Company approves the
transfer?
Yes_____ No_____
f. Do you understand that there is no assurance of any
financial return on this investment and that you run the risk of losing your
entire investment?
Yes_____ No_____
g. Are you aware that you have the opportunity to inspect the
Company's financial records, legal documents, and other records?
Yes_____ No_____ Did you do so? Yes___ No___
h. Do you understand that this investment is illiquid?
Yes_____ No_____
i. Are you acting for your own account?
Yes_____ No_____ If No, complete the
following:
(1) Capacity in which you are acting
(agent, trustee or otherwise):
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(2) Name, address and telephone number(s)
of person(s) you represent:
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(3) Nature of evidence of authority attached:
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IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement this ___ day of ______________, 2000.
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Print Name:__________________________
TYPE OF OWNERSHIP (Check One)
___ INDIVIDUAL OWNERSHIP ___ COMMUNITY PROPERTY (One
(One Signature Required) Signature Required if Interest in
One Name, Two Signatures Required
if Interest Held in Both Names)
___ JOINT TENANTS WITH RIGHT ___ TENANTS IN COMMON (Both
OF SURVIVORSHIP (Both or or all Parties Must Sign)
all Parties Must Sign)
___ PARTNERSHIP (Please ___ GRANTOR TRUST
Include a Copy of the
Partnership Agreement
Authorizing Signature)
___ CORPORATION (Please In- ___ CUSTODIAN
include Certified Cor-
porate Resolution
Authorizing Signature)
___ PROFIT SHARING PLAN ___ PENSION PLAN
___ XXX ___ XXXXX
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WITNESSES:
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Print Name:_____________________ Investor Signature
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Print Name:_____________________ Print or Type Name
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Social Security Number
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Street Address
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City, State and Zip
SUBSCRIPTION ACCEPTED:
ALOTTAFUN, INC.,
a Delaware corporation
By:____________________________
President
MTC/ej/217068
