Underwriting Agreement
Xx. Xxxxxxx Xxxxxxx
Atlantis Aquafarm, Inc.
000 00xx Xxxxxx
Xxxxxxxx, XX 00000
Dear Xx. Xxxxxxx:
This Underwriting Agreement is between Boe & Company, Inc., 00000 Xxxx
Xxxx Xxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000 (the "Underwriter") and Atlantis
Aquafarm, Inc., 000 00xx Xxxxxx, Xxxxxxxx, Xxx Xxxx, (the "Company").
1. Registration Statement. We will agree on a timetable for the filing of
a Registration Statement on Form SB-2, amendments, blue sky filings, and all
other steps necessary to make the proposed public Offering effective on a date
acceptable to the Underwriter. The Company will carefully prepare with the
Underwriter, a Registration Statement with exhibits covering the Units proposed
to be offered. The Registration Statement will be filed with the Securities and
Exchange Commission ("SEC"). The Company shall seek counsel qualified and
experienced in the preparation of filings under the Securities Act to prepare
the Registration Statement. All financial statements contained in the
Registration Statement, as amended from time to time, will be in the form and
content satisfactory to the Underwriter and to the Underwriter's counsel, and
will have been prepared and reported on by independent certified public
accountants.
The proposed Registration Statements will be submitted to the Underwriter
as soon as possible and at least 15 days before the Company proposes to file
such Registration Statement with the SEC. The content of all comment letters
shall be supplied to the Underwriter upon request. All Amendments to the
Registration Statement shall be available for review by the Underwriter prior to
the time they are filed with the SEC.
2. Public Offering. The Company proposes to offer through the Underwriter
and/or underwriting group selected by the Underwriter up to 220,000 Units,
consisting of One Share of Common Stock, no par value ("Share") and One Class A
Warrant ("Class A Warrant"), which entitles the holder to purchase one share of
Common Stock, and One Class B Warrant ("Class B Warrant"), which entitles the
holder to purchase one share of Common Stock. The Underwriter shall not have an
over-allotment option. The Underwriter reserves the right to re-price the issue
in the light of conditions existing at the time the Offering becomes effective.
The Underwriter contemplates underwriting the Offering on a best efforts basis.
3. Underwriter's Counsel. Underwriter's counsel, if any, shall make all
required filings with the National Association of Securities Dealers, Inc. All
corporate proceedings undertaken by the Company and other legal matters which
relate to the public Offering shall be satisfactory in all material respects to
counsel for the Underwriter, if any.
4. Warrants and Options. Warrants and options issued and to be issued by
the Company within a specified time period shall be acceptable to the
Underwriter.
5. Future Sales. It is understood that during the period of the proposed
Offering and for one year from the date of the definitive Prospectus, the
Company will not sell any equity or long term debt securities without the
Underwriter's prior written consent which shall not be unreasonably withheld.
Prior to the effective date of the Registration Statement, the Company will
cause each of its officers and directors and shareholders who own over 5% of the
Company's shares outstanding prior to the effective date of the Registration
Statement to enter into an undertaking such that he will not sell any shares
owned directly or indirectly by him to the public for 12 months from the date of
the definitive Prospectus used in the Offering without the Underwriter's prior
written consent.
6. Reciprocal Indemnification. It is understood that the proposed
Underwriting Agreement will provide for reciprocal indemnification between the
Company and the Underwriter as to certain liabilities, including liabilities
under the Securities Act of 1933, as amended.
7. Information Available. It is understood and agreed between the Company
and the Underwriter that all documents and other information relating to the
Company's affairs will be made available upon request to the Underwriter and
it's counsel, if any. Included therein are all Articles of Incorporation and
Amendments, By-Laws and Amendments, Minutes of the Company's Incorporators,
Director's and Shareholders Meetings, all financial statements and correct
copies of any material contracts, leases, and agreements, to which the Company
is a party. The Company will provide the Underwriter upon request, with
unaudited monthly financial data concerning the Company from now until
termination of the Offering.
8. Properties, Capital Structure, Dilution, Employee Benefit Plans. The
properties owned or held under option by the Company, the capital structure of
the Company immediately proceeding the public Offering, the contemplated
dilution to the public investor, and the Company's business plan shall be
acceptable to the Underwriter. It is contemplated that the Common Stock held by
the public upon completion of the maximum amount of the public offering will
represent at least 39% of the outstanding shares. Shares underlying options and
warrants, other than warrants held by the Underwriter, shall be deemed
outstanding for this purpose. Any employee incentive plan, of whatever nature,
presently contemplated, shall be fully disclosed to the Underwriter and subject
to the approval of the Underwriter.
9. Blue-Sky Laws. It is understood and agreed between the Company and the
Underwriter that it shall be the obligation of the Company to qualify, at its
sole expense, such states as may be reasonably designated between the Company
and the Underwriter. The officers, directors and promoters of the Company will
comply with applicable Blue-Sky requirements, including those pertaining to the
escrow of shares, providing such escrow shall in no event extend beyond a period
of two years.
2.
10. Issue, Sale and Delivery of Units. The Company hereby employs the
Underwriter, as its exclusive agent to sell for the Company's account the Units,
on a cash basis only, at the price of $6.00 per Unit. The Underwriter hereby
agrees to use its best efforts on an "all-or-none" basis, as agent for the
Company, to sell the first 150,000 Units subject to the terms, provisions, and
conditions set forth in this Agreement and agrees to use its "best efforts" as
agent for the Company, to sell the remaining 70,000 Units offered to the public.
It is understood between the parties hereto that there is no firm commitment by
the Underwriter to purchase any or all of the Units, and the Underwriter agrees
that it will exert its best efforts to sell the Units covered by the
Registration Statement in accordance with all of the provisions of the Act.
The Underwriter shall have the right to associate with other dealers as it
may determine. The Underwriter shall have the right to grant to such persons
such concessions out of the commissions to be received by the Underwriter as the
Underwriter may determine.
11. Underwriter Expense Allowance. It is understood that the Company shall
reimburse the Underwriter for its expenses in the amount of three percent (3%)
of which a non-refundable payment of $5,000.00 has been paid.
12. Warrants. Upon termination of the Offering, the Company will sell to
the Underwriter a maximum of 22,000 Common Stock Purchase Warrants, for a
purchase price of $220.00, which entitles the Underwriter to purchase one share
of the Company's Common Stock for each ten shares of the Company's Common Stock
which have been sold in the Offering. The Warrants shall be non-exercisable for
a period of twelve (12) months following the date of the definitive Prospectus,
unless the Company merges, the Warrants may be exercised immediately prior to
such action. The Warrants shall contain anti-dilution provisions acceptable to
the Underwriter. The Warrants will be exercisable for a period of five (5)
years, such period to commence twelve (12) months after the date of the
definitive Prospectus used in this Offering and if the Warrants are not
exercised during this term, they shall by their terms automatically expire. The
exercise price of the Warrants shall be 120% of the per share Offering price.
The shares underlying said Warrant will be fully registered in the initial
Registration Statement to which this offering is a part of The Warrants will not
be transferred to anyone for a period of twelve months after the date of the
definitive Prospectus, except that they may be assigned in whole or in part to
or among the officers of the Underwriter, to participating dealers, and their
officers and partners with whom the Underwriter associates in the offering, by
operation of law as a result of the death of any transferee to whom the warrants
may be transferred, and to any successor to the business of the Underwriter.
13. Right of First Refusal. Subject to compliance by the Underwriter with
the terms of the Underwriting Agreement, the Company and the Underwriter
understand and agree that for a period of three (3) years from the date of the
definitive Prospectus the Underwriter shall have a preferential right to
purchase for its account or to sell for the account of the Company any equity or
debt securities with respect to which the Company may seek a public offering or
private offering for cash.
3.
Specifically excluded from the Underwriter's right of first refusal are public
or private offerings of the Company's shares in exchange for properties, assets
or stock of other individuals or corporations. The Company will consult the
Underwriter with regard to any such covered offering for cash prior to
consulting any other prospective underwriter and will offer the Underwriter the
opportunity to purchase or sell any such securities on terms not less favorable
to the Company than it can secure elsewhere. The Underwriter shall have thirty
(30) days in which to accept such offer. The Company shall not be required to
consult the Underwriter concerning any borrowing from banks and institutional
lenders or concerning financing under any equipment leasing or similar
arrangements.
14. Expenses. The Company agrees that it is to pay (1) All fees and
expenses of any counsel whom it may employ to represent it separately in
connection with or on account of the Offering; (2) All fees and costs, including
legal and accounting fees, incurred in connection with preparation of the
Registration Statement and all amendments thereto; (3) All costs of issuing and
delivering the subject Units; (4) All costs of printing and delivering to the
Underwriter such number of copies of the Prospectus the Underwriter may
reasonably require; (5) Except as set forth herein, all fees and costs,
including legal and accounting fees, incurred in connection with registration or
qualification of all or any part of the securities offered by the Prospectus, or
attempted registration or qualification of the same, for sale in various states,
together with all mailings, telephone, travel, clerical and other office costs
incurred or to be incurred by the Company in connection with the Offering which
is subject to this Agreement. The Underwriter agrees that it is to pay (1) All
fees and expense of any legal counsel whom it may employ to represent it
separately in connection with or on account of the Offering; (2) All fees and
expenses incurred in qualifying your organization as a Broker/Dealer with the
Securities and Exchange Commission and the securities departments or commissions
of the various states in which the Offering is made and such registration is
required; (3) All advertising, mailing, telephone, travel, clerical and other
office costs incurred or to be incurred by the Underwriter or by Underwriter's
sales personnel in connection with the Offering which is subject to this
Agreement.
15. Representation of the Company. The Company represents to the
Underwriter that no person has acted as a finder or investment advisor in
connection with the transactions contemplated herein and will indemnify the
Underwriter with respect to any claim for finder's fee in connection herewith.
The Company represents and warrants that no officer, director shareholder of the
Company is a member of the NASD, an employee or associated member of the NASD.
The Company represents that it has separately disclosed to the Underwriter all
potential conflicts of interest involving officers, directors, principals,
shareholders, and/or employees.
16. 1934 Act, Quarterly Reports to Shareholders, Quotation on NASDAQ,
Listing in Xxxxx'x, Transfer Agent. The Company agrees that for at least five
years after its Units are registered under Securities Exchange Act of 1934, the
Company will issue to its shareholders within 45 days after the end of the
Company's first three fiscal quarters, quarterly reports containing unaudited
financial information. The Company, upon request of the Underwriter, will
promptly upon becoming eligible apply for quotation on the NASD Automatic
Quotation System.
4.
The Company will as soon as possible after the completion of the Offering apply
for a listing in Standard and Poor's Corporate Record and maintain such listing
on a current basis, The Company shall obtain a CUSIP number for its certificates
and shall engage a transfer agent.
17. Binding Agreement. This Agreement shall be binding upon and inure
solely to the benefit of the parties hereto and their representatives,
successors, assigns, and no other person shall acquire or have any right under
or by virtue of this Agreement. No purchaser of the Units shall be construed as
a successor or assignee by reason merely of such purchase. If any event occurs
during the term of this Agreement changing or modifying the facts as set forth
in any such representation or warranty, the party to whom such representation or
warranty shall be made, will immediately advised thereof by the other party.
Notices provided for herein may be given by mail, postage prepaid or
personal delivery. If to the Company, to Atlantis Aquafarm Inc., 000 00xx
Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000. Notices to the Underwriter shall be addressed
to Boe & Company, Inc., 00000 X. Xxxx Xx., #000, Xxxxxx, Xxxxxxxx 00000.
The undersigned represents that this Agreement has been duly authorized by
the Company and that he has authority from the Board of Directors to sign the
Agreement.
If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the spaces provided below for that purpose and return
to us a signed counterpart hereof, whereupon this letter and your acceptance
shall constitute a binding agreement between us.
Dated this 22 day of October,1997.
Very Truly Yours,
BY AUTHORITY OF THE BOARD OF DIRECTORS
Atlantis Aquafarm, Inc.
By:/s/Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxx, President
Boe & Company, Inc.
By:/s/Xxxxxxx Xxx
-------------------
Xxxxxxx Xxx, President
5.
