SOCKEYE SEAFOOD GROUP, INC. SUBSCRIPTION AGREEMENT
SOCKEYE
SEAFOOD GROUP, INC.
THE
SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR IN ANY STATE AND THEREFORE
MAY
NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN
THE
ABSENCE OF (I) AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER
SAID ACT OR (II) AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED. THIS AGREEMENT SHALL NOT CONSTITUTE AN OFFER
TO
SELL NOR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES IN ANY JURISDICTION
IN
WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.
I. SUBSCRIPTION
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A.
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The
Units.
This Subscription Agreement relates to units of Sockeye Seafood Group,
Inc., a Nevada corporation (the “Company”), each unit consisting of one
share of common stock (the “Subscribed Shares”), and one share purchase
warrant, exercisable for one share of common stock at an exercise
price of
US$2.50 (“Purchase Warrants”) (collectively referred to as “Units”). The
price per Unit is US$1.00. The Company is offering for sale up to
a
maximum amount of 10,000,000 Units.
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Notwithstanding
anything contained herein to the contrary, neither the amount of
Subscribed Shares nor the amount of shares of common stock issuable
upon
exercise of the Purchase Warrants shall be affected by the next stock
split to be effectuated by the Company. For purposes of illustration
only,
if the undersigned purchases 100,000 Units and then the Company
effectuates a split (whether reverse or forward), notwithstanding
the
split the undersigned shall have 100,000 Subscribed Shares and 100,000
Purchase Warrants to purchase 100,000 shares of common stock at an
exercise price of US$2.50 per
share.
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| B. |
Subscriber
and Method of Payment. The
undersigned subscriber (the “Subscriber”) hereby subscribes, on the terms
and conditions set forth in this Subscription Agreement, to purchase
1,000,000 Units at an aggregate purchase price of US$1,000,000 (the
“Purchase Price”), consisting of 1,000,000 Subscribed Shares and 1,000,000
Purchase Warrants attached.
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The
Subscriber acknowledges that by executing this Subscription Agreement and upon
delivery to ▇▇▇▇▇ ▇▇▇▇▇ & Associates, PLLC (“Escrow Agent”) that the
Subscriber is making an irrevocable offer to purchase the Units from the Company
against payment of the Purchase Price. This subscription may be rejected by
the
Company in its sole discretion. The Subscriber hereby agrees, on the day upon
which it receives notification from the Escrow Agent that this Subscription
Agreement has been unconditionally accepted by the Company, to deliver to the
Escrow Agent, in favor of the Company, a wire or certified check backed by
immediately available funds in the amount of the
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Purchase
Price. Upon receipt by the Escrow Agent of the amount of the Purchase Price
in
the specified manner, the Company shall deliver to the Escrow Agent a share
certificate(s) of the Company in the name of the Subscriber evidencing the
Subscribed Shares and the Subscriber’s ownership thereof along with
documentation evidencing the Purchase Warrants in the form of a Warrant to
Purchase Common Shares of Sockeye Seafood Group, Inc. (attached as Appendix
“A”
to this Subscription Agreement). The Escrow Agent shall then disperse the
Purchase Price to the Company and the share certificate(s) and Purchase Warrants
to the Subscriber.
The
wire
instructions for the Escrow Agent are as follows:
Bank
of
America
ABA:
▇▇▇▇▇▇▇▇▇
SWIFT:
BOFAUS3N
ACH:
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇ & Associates Master Escrow Account: 9429354769
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C.
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Terms
and Exercise of Purchase Warrants.
The terms and exercise particulars of the purchase warrants are as
follows:
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(i) Term
of Warrants.
Each
Purchase Warrant will entitle the Subscriber to acquire one share of the
Company’s common stock on or before the date that is twenty-four (24) months
after the date this Subscription Agreement is accepted by the Company at US$2.50
per common share (“Warrant Purchase Price”), subject to the forced conversion
provisions detailed herein.
(ii) Exercise
of Purchase Warrants.
Each
Purchase Warrant may be purchased upon delivery to the Company at its principal
office, the following: (a) payment of the Warrant Purchase Price, (b) the
Subscription Form (attached hereto as Appendix “B” to this Subscription
Agreement) providing written notice setting out the number of Purchase Warrants
to be purchased, and (c) delivery of the Warrant to Purchase Common Shares
of
Sockeye Seafood Group, Inc.
Upon
payment of the Warrant Purchase Price and delivery of the required
documentation, the Company will issue and cause to be delivered with all
reasonable dispatch to or upon the written order of Subscriber, a certificate
or
certificates for the number of shares of the Company’s common stock so
purchased. The right to purchase represented by the Purchase Warrants shall
be
exercisable, at the election of the Subscriber thereof, either in full or from
time to time in part. In the event the Purchase Warrants are exercised in
respect to less than all of the Purchase Warrants convertible prior to the
date
of expiration thereof, the remaining Purchase Warrants will continue to be
subject to adjustment as set forth in herein.
(iii) Forced
Conversion of Purchase Warrants. The
Purchase Warrants shall be subject to forced conversion, at the option of the
Company, if the Company’s common stock trades at or above 100% above the closing
ask price of the Common Stock of the Corporation on the date the Purchase Price
is received by the Escrow Agent and accepted by the Corporation for forty-five
(45) consecutive trading days, in which case the Purchase Warrants will expire
on the twentieth (20th)
calendar day following the date notice of forced conversion is mailed to all
Purchase Warrant holders.
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| D. |
Reservation
of Purchase Warrant Shares.
The Company will at all times keep reserved and available, out if
its
authorized common stock, such number of shares of common stock as
will be
sufficient to provide for the exercise of the rights to purchase
the
Company’s common stock represented by the Purchase Warrants. The transfer
agent for the common stock and any successor transfer agent for any
shares
of the Company’s capital stock issuable upon the exercise of any of such
rights of purchase, will be irrevocably authorized and directed at
all
times to reserve such number of authorized shares as shall be requisite
for such purpose. The Company will keep a copy of this Subscription
Agreement on file with the transfer agent or its
successors.
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E.
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Adjustment
of the Number of Purchase Warrants.
The number of Purchase Warrants convertible pursuant to this Subscription
Agreement shall be subject to adjustment from time to time upon the
happening of certain events, as
follows:
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(i) Adjustment
for Recapitalization.
In the
event the Company shall (a) subdivide its outstanding shares
of
common stock, (b) reverse split or otherwise reduce its outstanding shares
of
common stock into a smaller number of shares of common stock, or (c) issue
or
convert by reclassification or recapitalization of its shares of common stock
into, for, or with other securities (“Recapitalization”), the number of Purchase
Warrants exercisable hereunder immediately following such Recapitalization
and
the Warrant Purchase Price shall be proportionately adjusted. An adjustment
made
pursuant to this paragraph shall be calculated by the Company and shall become
effective immediately after the effective date of such action retroactive to
the
effective date.
(ii) Preservation
of Purchase Rights Under Consolidation.
In case
of any Recapitalization or any other consolidation of the Company with or merger
of the Company into another corporation, or in case of any sale or conveyance
to
another corporation of the property of the Company as an entirely or
substantially as an entirety, the Company shall prior to the closing of such
transaction, cause such successor or purchasing corporation, as the case may
be,
to acknowledge and accept responsibility for the Company’s obligations hereunder
and to grant the Subscriber the right thereafter upon payment of the Warrant
Purchase Price to purchase the kind and amount of shares and other securities
and property which it would have owned or have been entitled to receive after
the happening of such consolidation, merger, sale or conveyance. The provisions
of this paragraph shall similarly apply to successive consolidations, mergers
sales or conveyances.
(iii) Notice
of Adjustment.
Whenever the number of Purchase Warrants convertible hereunder is adjusted,
as
herein provided, the Company will mail by first class mail, postage prepaid,
to
the Subscriber notice of such adjustment or adjustments, setting forth the
adjusted number of Purchase Warrants exercisable and a brief statement of the
facts requiring such adjustment, including the computation by which such
adjustment was made.
(iv) Adjustment
for Dividends.
Except
as provided herein, no adjustment to the Purchase Warrants shall be made in
respect to any cash dividend.
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F.
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Failure
to Deliver Purchase Warrant Shares Constitutes Breach of the
Agreement.
Failure by the Company, for any reason, to deliver the certificates
representing any shares purchased pursuant to the Purchase Warrants,
or
the placement of a stop
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transfer
order by the Company, shall constitute a breach under the Agreement and, for
the
purpose of the Purchase Warrants, failure to deliver or transfer the subject
shares shall automatically toll the expiration of this Subscription Agreement
for a period of time equal to the delay in delivering the subject shares or
term
of the stop transfer order.
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G.
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Assignment.
This Subscription Agreement and the rights hereunder shall not be
assigned
by either party hereto.
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H.
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Shareholder’s
Rights.
Subscriber shall have shareholder rights with respect to the Purchase
Warrants only when Subscriber has converted the Purchase Warrants
to
purchase those shares and provided the Company with payment and
documentation as specified in Section I Part C (i) and (ii) of this
Agreement.
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I.
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Commission.
The Units will be offered and sold on behalf of the Company by the
directors, officers, or employees of the Company or by broker-dealers.
To
the extent Units are offered and sold by broker-dealers or other
finders,
the Company will pay such broker-dealers a commission of up to ten
(10%)
percent of the gross proceeds raised from the sale of Units sold.
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J.
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Escrow
Fees.
The Company has entered into an escrow agent agreement with ▇▇▇▇▇
▇▇▇▇▇
& Associates, PLLC whereby the Company shall pay one and a half
percent (½%) of the gross amount raised, up to a maximum escrow fee
payable of $10,000. Further, Escrow Agent will be reimbursed for
its
expenses in connection with acting as escrow agent hereunder. No
other
escrow fees are payable to Escrow
Agent.
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| K. |
Registration
Rights.
The Company agrees that, within six months from the date that all
the
Units being offered herein are sold and the Company completing raising
aggregate gross proceeds of $10,000,000 hereunder (the “Closing”), it
shall prepare and file with the Securities and Exchange Commission
a
registration statement (the “Registration Statement”) relating to the
re-sale of the Subscribed Shares and the shares underlying the Warrants
under the Securities Act of 1933, as amended (the
“Act”).
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If the
Registration Statement is not filed by the seventh month after the Closing,
then
the Company will make payments to the Subscribers of the Units in such amounts
and at such times as shall be determined pursuant to this Section as their
exclusive and sole relief for the damages to the Subscribers by reason of any
such delay in or reduction of their ability to sell their shares (which remedy
shall be exclusive of any other remedies available at law or in equity). The
Company shall pay to each Subscriber an amount equal to 1% of such investor’s
applicable Purchase Price for each month after the Closing that the Registration
Statement is not filed with the SEC.
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II.
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ACKNOWLEDGEMENTS
OF THE SUBSCRIBER. The
Subscriber acknowledges to the Company
that:
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A.
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The
Company has made available to it and/or its advisors any and all
information related to the Company that might be required to fully
evaluate the merits and risks of an investment in the Units (the
“Investment”) and the Subscriber has carefully evaluated its financial
resources and investment position, as well as the risks associated
with
the Investment. The Subscriber has not relied on any oral representations
or oral information furnished to the Subscriber or its advisors by
the
Company or its officers,
directors,
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shareholders,
employees, attorneys, accountants, agents or representatives (collectively
the
“Company Representatives”), in connection with this offering. The Subscriber, in
determining to make the Investment, has relied solely on the information
contained in the Company’s disclosure documentation filed with the Securities
and Exchange Commission pursuant to Section 13 or 15(d) of the Exchange Act
of
1934, as amended and information otherwise provided in writing by officers
and
directors of the Company. Neither the Company nor any of the Company
Representatives, nor anyone purporting to act on their behalf, has made any
oral
representation to Subscriber with respect to any tax, financial or economic
benefits to be derived from the Investment. The Subscriber is relying solely
upon the Subscriber’s own knowledge and upon the advice of its personal advisors
with respect to the tax, financial, economic and other pertinent aspects of
the
Investment.
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B.
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The
Company has a limited operating history for this and other reasons,
the
Investment involves significant financial risks, including the risk
of
loss to the Subscriber of the entire Purchase
Price.
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C.
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No
assurance can be made that the Company will continue to operate,
or, if it
does operate and there is a profit, that dividends will be declared
and
paid on the Company’s common
shares.
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D.
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The
Subscriber may not be able to sell or dispose of the Units or the
securities underlying the Units.
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E.
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The
Subscriber’s commitment to investments which are not readily marketable is
not disproportionate to the Subscriber’s net worth and making this
investment will not cause the Subscriber’s overall commitment thereto to
become excessive. The Subscriber has the financial ability to bear
the
economic risk of its investment, had adequate means for providing
for its
current needs and contingencies and has no need for liquidity with
respect
to his investment in the Units.
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F.
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The
Subscriber is aware that the offer and sale of the Units has not
been
registered under the Securities Act or registered or qualified under
applicable state securities or “Blue Sky” laws, and , therefore, the
securities underlying the Units cannot be reoffered and resold unless
either the reoffer and resale thereof are subsequently registered
and
qualified under the Act and said Blue Sky laws or an exemption from
such
registration and qualification is available; the Company has no intention
of registering or qualifying the Units under the Act or any such
Blue Sky
laws and no exemption from registration or qualification may be available
under the Act or such Blue Sky laws to the Subscriber at the time
he
wishes to dispose of the Company’s common
shares.
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G.
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No
federal or state agency has passed upon the Units or made any finding
or
determination as to the fairness of the
Investment.
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H.
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Neither
the Company nor any Company Representative offered to sell the Subscriber
any security by means of any form of general advertising or general
solicitation, such as media advertising or
seminars.
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I.
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The
Subscriber is an “accredited investor” as that term is defined in Rule 501
of the General Rules and Regulations under the Securities Act by
reason of
Rule 501(a)(3). In connection therewith, the Subscriber represents
and
warrants to the Company that all information that the Subscriber
has
provided to the Company, including, without limitation, the information
in
the Investor Questionnaire attached hereto or previously provided
to the
Company (the “Investor Questionnaire”), is correct and complete
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| J. |
The
Subscriber is acquiring the Units for its own account as principal,
Shares
for his own account as principal, not as a nominee or agent, for
investment purposes only, and not with a view to, or for, resale,
distribution or fractionalization thereof in whole or in part and
no other
person has a direct or indirect beneficial interest in such Units
or any
portion thereof. Further, the Subscriber does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer
or
grant participations to such person or to any third person, with
respect
to the Units for which the undersigned is subscribing or any part
of the
Units.
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| K. |
The
Subscriber has full power and authority to enter into this Agreement,
the
execution and delivery of this Agreement has been duly authorized,
if
applicable, and this Agreement constitutes a valid and legally binding
obligation of the undersigned.
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L.
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The
Subscriber is not subscribing for the Units as a result of or subsequent
to any advertisement, article, notice or other communication published
in
any newspaper, magazine or similar media or broadcast over television
or
radio, or presented at any seminar or meeting, or any solicitation
of a
subscription by person previously not known to the undersigned in
connection with investment securities
generally.
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M.
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The
Subscriber is (i) experienced in making investments of the kind described
in this Agreement and the related documents, (ii) able, by reason
of the
business and financial experience of its officers (if an entity)
and
professional advisors (who are not affiliated with or compensated
in any
way by the Company or any of its affiliates or selling agents), to
protect
its own interests in connection with the transactions described in
this
Agreement, and the related documents, and (iii) able to afford the
entire
loss of its investment in the
Units.
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| III. |
ACKNOWLEDGEMENTS
OF
THE COMPANY.
The
Company represents, covenants and warrants the
following:
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| A. |
Reporting
Status and Stage of the Company.
The Company is a corporation duly organized, validly existing and
in good
standing under the laws of the State of Nevada and is duly qualified
as a
foreign corporation in all jurisdictions in which the failure to
so
qualify would have a material adverse effect on the Company and its
subsidiaries taken as a whole. The Company is subject to the reporting
requirements of section 13 or 15(d) of the Securities Exchange Act
of
1934, as amended. The Company is not an investment company subject
to
reporting requirements the Investment Company Act of
1940.
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| B. |
Concerning
the Stock.
The issuance, sale and delivery of the Units are within the Company's
corporate powers and have been duly authorized by all required corporate
action on the part of the Company. When such shares of the Company’s
common stock are issued, sold and delivered in accordance with the
terms
hereof for the consideration
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expressed
herein, such securities will be duly and validly issued, fully paid and
non-assessable. There are no preemptive rights of any shareholders of the
Company.
| C. |
Subscription
Agreement.
This Subscription Agreement has been duly authorized, validly executed
and
delivered on behalf of the Company and is a valid and binding agreement
enforceable against the Company in accordance with its terms, subject
to
general principles of equity and to bankruptcy or other laws affecting
the
enforcement of creditors' rights.
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| IV. |
RELIANCE
ON REPRESENTATIONS. The
Subscriber understands that the offer and sale of the Units is not
being
registered under the Act. The Company is relying on the representations,
warranties and agreements of the Subscriber made herein to determine
exemption from registration under the
Act.
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| V. |
RESALES.
Subscriber acknowledges and agrees that the securities underlying
the
Units may only be resold (a) in compliance with all state and federal
securities laws, (b) pursuant to a Registration Statement under the
Act or
(c) pursuant to an exemption from registration under the Act and
any
applicable U.S. state securities
laws.
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| VI. |
TRANSFER
AGENT INSTRUCTIONS.
The
Company will instruct its transfer agent to issue one or more stock
certificates representing the Subscribed Shares with the restrictive
legend set forth above in the name of Subscriber and will instruct
such
agent that the Subscribed Shares have been issued pursuant to Regulation
D. The Company further agrees that upon the expiration of the distribution
compliance period, the Company will cooperate as fully as the law
allows
with Subscriber’s request to lift the restrictive legend from such shares
upon receipt of sufficient evidence that the Subscriber has complied
with
applicable securities laws and, upon receipt of such evidence, shall
promptly instruct the Transfer Agent to transfer the Subscribed Shares
without legend as expeditiously as practical after receipt of the
certificates representing such Shares, provided that the Company
shall not
be required to deliver such instructions if it knows, or reasonably
believes, that any of the representations made by the Subscriber
is
false.
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| VII. |
STOCK
DELIVERY INSTRUCTIONS.
The Subscribed Shares shall be delivered to the Subscriber in accordance
with the process required by Section I as agreed upon
herein.
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| VIII. |
CONDITIONS
OF THE COMPANY’S OBLIGATION TO ISSUE SHARES.
Subscriber understands that the Company’s obligation to issue the
Subscribed Shares and authorize the Purchase Warrants is conditioned
upon:
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The
receipt and acceptance by the Company of this Subscription Agreement, which
receipt and acceptance will be evidenced by execution of this Subscription
Agreement by an executive officer of the Company and delivery of the Subscribed
Shares, this Subscription Agreement and a Warrant to Purchase Common Shares
of
Sockeye Seafood Group, Inc. to Subscriber.
Notwithstanding
the foregoing, the Subscriber understands and agrees that the Company reserves
the right to reject this subscription for the Units if, in its reasonable
judgment, it deems such action in the best interest of the Company. The
Subscriber understands and agrees that its subscription for the Purchased Shares
is irrevocable. In the event the sale of the Units subscribed for by the
Subscriber is not consummated by
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the
Company for any reason (in which event this Subscription Agreement shall be
deemed to be rejected), this Subscription Agreement and any other agreement
entered into between the Subscriber and the Company relating to this
subscription shall thereafter have no force or effect and the Company shall
promptly return or cause to be returned to the undersigned the Purchase Price
remitted to the Company by the Subscriber, without interest thereon or deduction
therefrom.
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IX.
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ENTIRE
AGREEMENT.
This
Agreement constitutes the entire agreement among the parties hereto
with
respect to the subject matter hereof and supersedes any and all prior
or
contemporaneous representations, warranties, agreements and understandings
in connection therewith. This Agreement may be amended only by a
writing
executed by all parties hereto.
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| X. |
INDEMNIFICATION.
The Subscriber agrees to indemnify the Company and its officers,
directors, employees, shareholders, agents, representatives, affiliates
and their respective successors and assigns harmless from and against
any
and all losses, damages, liabilities, costs and expenses (including
attorneys' fees) which any of the foregoing may sustain or incur
in
connection with any breach by the Subscriber of any representation,
warranty or covenant made by it in this Subscription
Agreement.
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| XI. |
NOTICES.
Any notice to be given or to be served upon any party to this Subscription
Agreement in connection with this Subscription Agreement must be
in
writing and will be deemed to have been given and received upon confirmed
receipt, if sent by facsimile, or five (5) days after it has been
submitted for delivery by Federal Express or an equivalent carrier,
charges prepaid and addressed to the following addresses with a
confirmation of delivery:
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If
to the
Company, to:
Sockeye
Seafood Group, Inc.
______________________
______________________
Phone
No.:
Fax
No.:
If
to the
Escrow Agent, to:
▇▇▇▇▇
▇▇▇▇▇ & Associates, PLLC
▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇ ▇▇▇▇▇, Esq.
Phone
No:
(▇▇▇) ▇▇▇-▇▇▇▇
Fax
No.:
(▇▇▇) ▇▇▇-▇▇▇▇
If
to the
Subscriber, to:
Hampton
Park Capital LLC
______________________
______________________
______________________
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Attn:
__________________
Phone
No.: _____________
Fax
No.:
_______________
Any
party
may, at any time by giving written notice to the other party, designate any
other address in substitution of an address established pursuant to the
foregoing, to which such notice will thereafter be given.
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XII.
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MULTIPLE
COUNTERPARTS. This
Subscription Agreement may be executed in several counterparts, each
of
which will be deemed to be an original but all of which will constitute
one in the same instrument. However, in enforcing any party's rights
under
this Subscription Agreement it will be necessary to produce only
one copy
of this Subscription Agreement signed by the party to be charged.
A
signature sent by legible facsimile shall be deemed an original.
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| XIII. |
GOVERNING
LAW. This
Subscription Agreement will be construed and enforced in accordance
with
and governed by the laws of the State of Nevada except for matters
arising
under the Securities Act, without reference to principles of conflicts
of
law. Each of the parties hereby consents to the personal jurisdiction
of
the federal courts whose districts encompass any part of the State
of Utah
in connection with any dispute arising under this Subscription Agreement
and hereby waives, to the maximum extent permitted by law, any objection,
including any objection based on forum
non conveniens,
to the bringing of any such proceeding in such jurisdictions. Each
party
hereby agrees that if another party to this Subscription Agreement
obtains
a judgment against it in such a proceeding, the party which obtained
such
judgment may enforce same by summary judgment in the courts of any
country
having jurisdiction over the party against whom such judgment was
obtained, and each party hereby waives any defenses available to
it under
local law and agrees to the enforcement of such a judgment. Each
party to
this Subscription Agreement irrevocably consents to the service of
process
in any such proceeding by the mailing of copies thereof by registered
or
certified mail, postage prepaid, to such party at its address set
forth in
this agreement. Nothing herein shall affect the right of any party
to
serve process in any other manner permitted by
law.
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The
undersigned acknowledges that this Subscription Agreement shall not be effective
unless and until accepted by the Company as indicated below.
“Subscriber”
Hampton
Park Capital LLC
Printed
Name: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title:
Manager
DATED
this 1st day of December, 2006
Jurisdiction
of Execution:
“The
Company”
By:
/s/
▇▇▇▇▇▇ ▇▇▇▇▇, Chief Executive Officer
Accepted
this 1st day of December, 2006
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APPENDIX
“A”
WARRANT
TO PURCHASE COMMON SHARES
OF
SOCKEYE
SEAFOOD GROUP, INC.
(Incorporated
under the laws of the State of Nevada)
THIS
IS
TO CERTIFY THAT, for value received, ____________________ with offices located
at____________________________________________ (the “Holder”), is entitled to
purchase:
_________________________
(__________)
non-assessable
common shares of Sockeye Seafood Group, Inc. (hereinafter called the "Company")
as such shares were constituted on the date hereof at any time up to 5:00 p.m.
local time in New York on or before _____________, 2008, the expiration date
of
the entitlement to purchase common shares of the Company, at a price of US$2.50
per share in lawful money of the United States, upon and subject to the “Terms,
Conditions and Instructions” attached hereto.
This
warrant (the “Warrant”) may not be transferred by the Holder. This Warrant and
the common shares to be issued upon its exercise have not been registered under
the Securities Act of 1933, as amended ("the Securities Act") or the securities
laws of any state of the United States. This Warrant may not be exercised by
or
on behalf of any U.S. person, directly or indirectly, or in the United States,
unless (i) the common shares are registered under the Securities Act and the
applicable laws of any such state, or, (ii) an exemption from such registration
requirements is available. "United States" and "U.S. person" are as defined
by
Rule 901 of Regulation S under the Securities Act.
This
Warrant may be exercised only through the principal offices of the Company.
SOCKEYE
SEAFOOD GROUP, INC.
By:
DATE:
_________________, 2006
-
11 -
APPENDIX
“A” TERMS,
CONDITIONS AND INSTRUCTIONS
| 1. |
The
Holder of this Warrant may subscribe for the number of shares of
the
Company indicated on the face
hereof.
|
| 2. |
For
each share purchased pursuant to this Warrant, payment must be made
in the
amount of US$2.50 per share. All payments must be made in US funds,
in
cash or by certified check, bank draft or money order payable in
New York.
If payment is in the form of an uncertified check, the Company reserves
the right to deem the payment not received until the check has cleared
the
account upon which it has been
drawn.
|
| 3. |
To
exercise the rights evidenced by this Warrant, this Warrant with
the
attached Subscription Form, must be delivered or mailed to the Company,
at
________, and must be received by the
Company.
|
| 4. |
The
rights evidenced by this Warrant expire at 5:00 p.m. local time in
New
York on ______________, 2008 subject to the condition that this
Warrant will be subject to forced exercise, at the option of the
Company,
if the Company’s common shares trade at or above 100% of $__, in which
case this Warrant will expire on the 20th
calendar day following the date notice of forced conversion is mailed
to
all Warrant Holders.
|
| 5. |
The
rights evidenced by this Warrant may not be
transferred.
|
| 6. |
If
this Warrant or the purchase price is forwarded by mail it is suggested
that registered mail be used as the Company will not be responsible
for
any losses which occur through the use of
mails.
|
| 7. |
The
rights evidenced by this Warrant are to purchase common shares in
the
capital stock of the Company as they were constituted on the date
hereof.
The number of shares and the exercise price of the Warrants are subject
to
adjustment in the events and in the manner
following:
|
|
(a)
|
if
the Company consolidates or subdivides its shares or pays a stock
dividend, the number of shares issuable on the exercise of one Warrant
and
the purchase price of the Warrant will be increased or decreased
proportionately so that each Warrant will entitle the holder to acquire
the same percentage of shares of the Company at the same total price
immediately after the subdivision, consolidation or stock dividend
as the
holder could purchase immediately before that event
occurred;
|
|
(b)
|
in
case of any capital reorganization or reclassification of the capital
of
the Company or the merger or amalgamation of the Company with or
into any
other company, each Warrant will entitle the holder to acquire, at
the
same total price, the number of shares or other securities of the
Company
or the company resulting from the capital reorganization,
reclassification, merger or amalgamation, as the case may be, to
which the
holder would have been entitled if the holder had exercised one Warrant
immediately before the capital reorganization, reclassification,
merger or
amalgamation;
|
|
(c)
|
the
adjustments provided for in this subsection are
cumulative.
|
-
12 -
APPENDIX
“B”
SUBSCRIPTION
FORM
The
Undersigned, _______________________ holder of the attached Warrant, hereby
subscribes for ______________________ common shares of Sockeye Seafood Group,
Inc. if the number of shares purchased hereby is less than the number of shares
to which the Undersigned is entitled under this Warrant, the Undersigned
requests issuance and delivery to it at the following address of a new Warrant
certificate evidencing the right to purchase the balance of the shares to which
the Undersigned is entitled hereunder. The Undersigned directs that the shares
hereby subscribed for be issued and delivered to it as follows:
Name:
_________________________
Address:
______________________
No.
of
Shares: __________________
DATED
this ______ day of ________________, 200___.
Per:
Signature
Name
(Please print)
-
13 -
INVESTOR
QUESTIONNAIRE
|
1.
|
Print
Full Name of Investor:
|
Individual:
|
|
|
||
|
First,
Middle, Last
|
||
|
Partnership,
Corporation, Trust, Custodial Account, Other:
|
||
|
|
||
|
Name
of Entity
|
||
|
2.
|
Address
for Notices:
|
|
|
|
||
|
|
||
|
3.
|
Name
of Primary Contact Person:
|
|
| Title: | ||
|
4.
|
Telephone
Number:
|
|
|
5.
|
E-Mail
Address:
|
|
|
6.
|
Facsimile
Number:
|
|
| Permanent Address: | ||
|
7.
|
Permanent
Address:
|
|
| (if different from Address for Notices above) | ||
| 8. | Authorized Signatory: | |
| Title: | ||
| Telephone Number: | ||
| Facsimile Number: |
-
14 -
B. Accredited
Investor Status
The
Investor represents and warrants that the Investor is an “accredited investor”
within the meaning of Rule 501 of Regulation D under the Securities Act of
1933,
as amended (the “Securities Act”), and has checked the box or boxes below which
are next to the categories under which the Investor qualifies as an accredited
investor:
|
FOR
INDIVIDUALS:
|
|||
|
o
|
A
natural person with individual net worth (or joint net worth with
spouse)
in excess of $1 million. For purposes of this item, “net worth” means the
excess of total assets at fair market value, including home, home
furnishings and automobiles (and including property owned by a spouse),
over total liabilities.
|
||
|
o
|
A
natural person with individual income (without including any income
of the
Investor’s spouse) in excess of $200,000, or joint income with spouse of
$300,000, in each of the two most recent years and who reasonably
expects
to reach the same income level in the current
year.
|
|
|
FOR
ENTITIES:
|
|||
|
o
|
A
bank as defined in Section 3(a)(2) of the Securities Act or any savings
and loan association or other institution as defined in Section 3(a)(5)(A)
of the Securities Act, whether acting in its individual or fiduciary
capacity.
|
||
|
o
|
An
insurance company as defined in Section 2(13) of the Securities
Act.
|
||
|
o
|
A
broker-dealer registered pursuant to Section 15 of the Securities
Exchange
Act of 1934.
|
||
|
o
|
An
investment company registered under the Investment Company Act of
1940, as
amended (the “Investment Company Act”). If an Investor has checked this
box, please contact ▇▇▇▇▇ ▇▇▇▇▇, Esq. at (▇▇▇) ▇▇▇-▇▇▇▇ or
▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ for additional information that will be
required.
|
||
|
o
|
A
business development company as defined in Section 2(a)(48) of the
Investment Company Act.
|
||
|
o
|
A
small business investment company licensed by the Small Business
Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958.
|
||
-
15 -
|
o
|
A
private business development company as defined in Section 202(a)(22)
of
the Investment Advisers Act of 1940. If an Investor has checked this
box,
please contact ▇▇▇▇▇ ▇▇▇▇▇, Esq. for additional information that
will be
required.
|
|
|
o
|
An
organization described in Section 501(c)(3) of the Internal Revenue
Code,
a corporation, Massachusetts or similar business trust, or partnership,
not formed for the specific purpose of acquiring the Purchased Shares,
with total assets in excess of $5 million.
|
|
|
o
|
A
trust with total assets in excess of $5 million not formed for the
specific purpose of acquiring the Purchased Shares, whose purchase
is
directed by a person with such knowledge and experience in financial
and
business matters as to be capable of evaluating the merits and risks
of an
investment in the Company and the purchase of the Purchased
Shares.
|
|
|
o
|
An
employee benefit plan within the meaning of ERISA if the decision
to
invest in the Purchased Shares is made by a plan fiduciary, as defined
in
Section 3(21) of ERISA, 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 $5 million
or, if
a self-directed plan, with investment decisions made solely by persons
that are accredited investors.
|
|
|
o
|
A
plan established and maintained by a state, its political subdivisions,
or
any agency or instrumentality of a state or its political subdivisions,
for the benefit of its employees, if the plan has total assets in
excess
of $5 million.
|
|
|
o
|
An
entity, including a grantor trust, in which all of the equity owners
are
accredited investors as determined under any of the foregoing paragraphs
(for this purpose, a beneficiary of a trust is not an equity owner,
but
the grantor of a grantor trust is an equity
owner).
|
-
16 -
C.
Supplemental
Data for Entities
1. If
the
Investor is not a natural person, furnish the following supplemental data
(natural persons may skip this Section C of the Investor
Questionnaire):
Legal
form of entity (trust, corporation, partnership, etc.):
_________________________
Jurisdiction
of organization: ________________________________________________
2.
Was
the
Investor organized for the specific purpose of acquiring the Purchased
Shares?
|
o
Yes
|
o
No
|
If
the
answer to the above question is “Yes,” please contact ▇▇▇▇▇ ▇▇▇▇▇, Esq. for
additional information that will be required.
3.
Are
shareholders, partners or other holders of equity or beneficial interest in
the
Investor able to decide individually whether to participate, or the extent
of
their participation, in the Investor’s investment in the Company (i.e., can
shareholders, partners or other holders of equity or beneficial interest in
the
Investor determine whether their capital will form part of the capital invested
by the Investor in the Company)?
|
o
Yes
|
o
No
|
If
the
answer to the above question is “Yes,” please contact ▇▇▇▇▇ ▇▇▇▇▇, Esq. for
additional information that will be required.
4(a).
Please
indicate whether or not the Investor is, or is acting on behalf of, (i) an
employee benefit plan within the meaning of Section 3(3) of ERISA, whether
or not such plan is subject to ERISA,
or (ii)
an entity which is deemed to hold the assets of any such employee benefit plan
pursuant to 29 C.F.R. § 2510.3-101. For example, a plan which is maintained by a
foreign corporation, governmental entity or church, a ▇▇▇▇▇ plan covering no
common-law employees and an individual retirement account are employee benefit
plans within the meaning of Section 3(3) of ERISA but generally are not subject
to ERISA (collectively, “Non-ERISA
Plans”).
In
general, a foreign or US entity which is not an operating company and which
is
not publicly traded or registered as an investment company under the Investment
Company Act of 1940, as amended, and in which 25% or more of the value of any
class of equity interest is held by
-
17 -
employee
pension or welfare plans (including an entity which is deemed to hold the assets
of any such plan), would be deemed to hold the assets of one or more employee
benefit plans pursuant to 29 C.F.R. § 2510.3-101. However, if only Non-ERISA
Plans were invested in such an entity, the entity generally would not be subject
to ERISA. For purposes of determining whether this 25% threshold has been met
or
exceeded, the value of any equity interest held by a person (other than such
a
plan or entity) who has discretionary authority or control with respect to
the
assets of the entity, or any person who provides investment advice for a fee
(direct or indirect) with respect to such assets, or any affiliate of such
a
person, is disregarded.
|
o
Yes
|
o
No
|
4(b).
If
the
Investor is, or is acting on behalf of, such an employee benefit plan, or is
an
entity deemed to hold the assets of any such plan or plans, please indicate
whether or not the Investor is subject to ERISA.
|
o
Yes
|
o
No
|
4(c.) If
the
Investor answered “Yes” to question 4.(b) and the Investor is investing the
assets of an insurance company general account, please indicate what percentage
of the Investor’s assets the purchase of the Purchased Shares is subject to
ERISA. ___________%.
5.
Does
the
amount of the Investor’s subscription for the Purchased Shares in the Company
exceed 40% of the total assets (on a consolidated basis with its subsidiaries)
of the Investor?
|
o
Yes
|
o
No
|
If
the
question above was answered “Yes,” please contact ▇▇▇▇▇ ▇▇▇▇▇, Esq. for
additional information that will be required.
6(a). Is
the
Investor a private investment company which is not registered under the
Investment Company Act, in reliance on Section 3(c)(1) or Section 3(c)(7)
thereof?
|
o
Yes
|
o
No
|
6(b).
If
the
question above was answered “Yes,” was the Investor formed prior to April 30,
1996?
|
o
Yes
|
o
No
|
If
the
questions set forth in (a) and (b) above were both answered “Yes,” please
contact ________ for additional information that will be required.
7(a).
Is
the
Investor a grantor trust, a partnership or an S-Corporation for US federal
income tax purposes?
|
o
Yes
|
o
No
|
-
18 -
7(b).
If
the
question above was answered “Yes,” please indicate whether or not:
(i)
more
than 50 percent of the value of the ownership interest of any beneficial owner
in the Investor is (or may at any time during the term of the Company be)
attributable to the Investor’s (direct or indirect) interest in the Company;
or
|
o
Yes
|
o
No
|
(ii)
it
is a principal purpose of the Investor’s participation in the Company to permit
the Partnership to satisfy the 100 partner limitation contained in US Treasury
Regulation Section 1.7704-1(h)(3).
|
o
Yes
|
o
No
|
If
either
question above was answered “Yes,” please contact ▇▇▇▇▇ ▇▇▇▇▇, Esq. for
additional information that will be required.
8. If
the
Investor’s tax year ends on a date other than December 31, please indicate such
date below:
|
(Date)
|
D. Related
Parties
1. To
the
best of the Investor’s knowledge, does the Investor control, or is the Investor
controlled by or under common control with, any other investor in the
Company?
|
o
Yes
|
o
No
|
If
the
answer above was answered “Yes”, please identify such related investor(s)
below.
Name(s)
of related investor(s):
_______________________________________________
2. Will
any
other person or persons have a beneficial interest in the Purchased Shares
to be
acquired hereunder (other than as a shareholder, partner, or other beneficial
owner of equity interest in the Investor)?
|
o
Yes
|
o
No
|
If
either
question above was answered “Yes”, please contact ▇▇▇▇▇ ▇▇▇▇▇, Esq. for
additional information that will be required.
-
19 -
The
Investor understands that the foregoing information will be relied upon by
the
Company for the purpose of determining the eligibility of the Investor to
purchase the Purchased Shares. The Investor agrees to notify the Company
immediately if any representation or warranty contained in this Subscription
Agreement, including this Investor Questionnaire, becomes untrue at any time.
The Investor agrees to provide, if requested, any additional information that
may reasonably be required to substantiate the Investor’s status as an
accredited investor or to otherwise determine the eligibility of the Investor
to
purchase the Purchased Shares. The Investor agrees to indemnify and hold
harmless the Company and each officer, director, shareholder, agent and
representative of the Company and their respective affiliates and successors
and
assigns from and against any loss, damage or liability due to or arising out
of
a breach of any representation, warranty or agreement of the Investor contained
herein.
|
INDIVIDUAL:
|
|
|
|
|
|
(Signature)
|
|
|
|
|
|
(Print
Name)
|
|
|
PARTNERSHIP,
CORPORATION, TRUST, CUSTODIAL ACCOUNT, OTHER:
|
|
|
Hampton
Park Capital LLC
|
|
|
(Name
of Entity)
|
|
|
By:
/s/
▇▇▇▇▇ ▇▇▇▇▇▇
|
|
|
(Signature)
|
|
|
▇▇▇▇▇
▇▇▇▇▇▇, Manager
|
|
|
(Print
Name and Title)
|
-
20 -
Annex
1
DEFINITION
OF “INVESTMENTS”
The
term
“investments” means:
(1) Securities,
other than securities of an issuer that controls, is controlled by, or is under
common control with, the Investor that owns such securities, unless the issuer
of such securities is:
(i) An
investment company or a company that would be an investment company but for
the
exclusions or exemptions provided by the Investment Company Act, or a commodity
pool; or
(ii) a
Public
Company (as defined below);
(iii) A
company
with shareholders’ equity of not less than $50 million (determined in accordance
with generally accepted accounting principles) as reflected on the company’s
most recent financial statements, provided that such financial statements
present the information as of a date within 16 months preceding the date on
which the Investor acquires Purchased Shares;
(2) Real
estate held for investment purposes;
(3) Commodity
Shares (as defined below) held for investment purposes;
(4) Physical
Commodities (as defined below) held for investment purposes;
(5) To
the
extent not securities, Financial Contracts (as defined below) entered into
for
investment purposes;
(6) In
the
case of an Investor that is a company that would be an investment company but
for the exclusions provided by Section 3(c)(1) or 3(c)(7) of the Investment
Company Act, or a commodity pool, any amounts payable to such Investor pursuant
to a firm agreement or similar binding commitment pursuant to which a person
has
agreed to acquire an interest in, or make capital contributions to, the Investor
upon the demand of the Investor; and
(7) Cash
and
cash equivalents held for investment purposes.
Real
Estate that is used by the owner or a Related Person (as defined below) of
the
owner for personal purposes, or as a place of business, or in connection with
the conduct of the trade or business of such owner or a Related Person of the
owner, will NOT be considered Real Estate held for investment purposes, provided
that real estate owned by an Investor who is engaged primarily in the business
of investing, trading or developing real estate in connection with such business
may be deemed to be held for investment purposes. However, residential real
estate will
-
21 -
not
be
deemed to be used for personal purposes if deductions with respect to such
real
estate are not disallowed by section 280A of the Internal Revenue Code of 1986,
as amended.
A
Commodity Interest or Physical Commodity owned, or a Financial Contract entered
into, by the Investor who is engaged primarily in the business of investing,
reinvesting, or trading in Commodity Shares, Physical Commodities or Financial
Contracts in connection with such business may be deemed to be held for
investment purposes.
“Commodity
Shares” means commodity futures contracts, options on commodity futures
contracts, and options on physical commodities traded on or subject to the
rules
of:
(i) Any
contract market designated for trading such transactions under the Commodity
Exchange Act and the rules thereunder; or
(ii) Any
board
of trade or exchange outside the United States, as contemplated in Part 30
of
the rules under the Commodity Exchange Act.
“Public
Company” means a company that:
(i) files
reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934,
as amended; or
(ii) has
a
class of securities that are listed on a Designated Offshore Securities Market,
as defined by Regulation S of the Securities Act.
“Financial
Contract” means any arrangement that:
(i) takes
the
form of an individually negotiated contract, agreement, or option to buy, sell,
lend, swap, or repurchase, or other similar individually negotiated transaction
commonly entered into by participants in the financial markets;
(ii) is
in
respect of securities, commodities, currencies, interest or other rates, other
measures of value, or any other financial or economic interest similar in
purpose or function to any of the foregoing; and
(iii) is
entered into in response to a request from a counter party for a quotation,
or
is otherwise entered into and structured to accommodate the objectives of the
counterparty to such arrangement.
“Physical
Commodities” means any physical commodity with respect to which a Commodity
Interest is traded on a market specified in the definition of Commodity Shares
above.
“Related
Person” means a person who is related to the Investor as a sibling, spouse or
former spouse, or is a direct lineal descendant or ancestor by birth or adoption
of the Investor, or is a spouse of such descendant or ancestor, provided that,
in the case of a Family Company, a
-
22 -
Related
Person includes any owner of the Family Company and any person who is a Related
Person of such an owner. “Family Company” means a company that is owned directly
or indirectly by or for two or more natural persons who are related as siblings
or spouse (including former spouses), or direct lineal descendants by birth
or
adoption, spouses of such persons, the estates of such persons, or foundations,
charitable organizations or trusts established for the benefit of such
persons.
For
purposes of determining the amount of investments owned by a company, there
may
be included investments owned by majority-owned subsidiaries of the company
and
investments owned by a company (“Parent Company”) of which the company is a
majority-owned subsidiary, or by a majority-owned subsidiary of the company
and
other majority-owned subsidiaries of the Parent Company.
In
determining whether a natural person is a qualified purchaser, there may be
included in the amount of such person’s investments any investment held jointly
with such person’s spouse, or investments in which such person shares with such
person’s spouse a community property or similar shared ownership interest. In
determining whether spouses who are making a joint investment in the Partnership
are qualified purchasers, there may be included in the amount of each spouse’s
investments any investments owned by the other spouse (whether or not such
investments are held jointly). There shall be deducted from the amount of any
such investments any amounts specified by paragraph 2(a) of Annex 2 incurred
by
such spouse.
In
determining whether a natural person is a qualified purchaser, there may be
included in the amount of such person’s investments any investments held in an
individual retirement account or similar account the investments of which are
directed by and held for the benefit of such person.
-
23 -
Annex
2
VALUATIONS
OF INVESTMENTS
The
general rule for determining the value of investments in order to ascertain
whether a person is a qualified purchaser is that the value of the aggregate
amount of investments owned and invested on a discretionary basis by such person
shall be their fair market value on the most recent practicable date or their
cost. This general rule is subject to the following provisos:
(1) In
the
case of Commodity Shares, the amount of investments shall be the value of the
initial margin or option premium deposited in connection with such Commodity
Shares; and
(2) In
each
case, there shall be deducted from the amount of investments owned by such
person the following amounts:
(i) The
amount of any outstanding indebtedness incurred to acquire the investments
owned
by such person.
(ii) A
Family
Company, in addition to the amounts specified in paragraph (a) above, shall
have
deducted from the value of such Family Company’s investments any outstanding
indebtedness incurred by an owner of the Family Company to acquire such
investments.
-
24 -