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EXHIBIT 4.3
DOVE ENTERTAINMENT, INC.
Reg-D Private Placement Financing
SUBSCRIPTION, REPRESENTATION AND
SECURITIES TRANSFER RESTRICTION AGREEMENT
DATED MARCH 26, 1997
TO BE USED ONLY IN CONJUNCTION WITH
AN INVESTMENT IN SHARES DESCRIBED HEREIN
INSTRUCTIONS TO SUBSCRIBERS
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If you wish to subscribe for the Reg-D Private Placement consisting of
(i) shares of common stock, par value $.01 per share (the "Common Stock") of
DOVE ENTERTAINMENT, INC., a California corporation (the "Company"), and (ii)
warrants to purchase Common Stock (the "Warrants"), please complete and sign the
Subscription, Representation and Securities Transfer Restriction Agreement (the
"Agreement") marked "Execution Copy," following the instructions carefully. If
you have any questions concerning any of the information called for, you should
ask your lawyer, accountant or financial advisor for assistance, and if you
desire, contact the individual indicated below.
The completed and signed Agreement, together with your wired funds in
the amount of your total subscription payable to "MILLENIUM BANK AS ESCROW AGENT
FOR DOVE ENTERTAINMENT, INC.," should then be sent to the address set forth
below. You should retain a copy of the executed Agreement for your files.
ANSWER ALL QUESTIONS.
ALL INFORMATION WILL BE TREATED CONFIDENTIALLY.
MILLENIUM BANK AS ESCROW AGENT FOR DOVE ENTERTAINMENT, INC.
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Routing Number: 0000-0000-0
Account No.: 01000-21088
XXXXXX XXXXXX CAPITAL GROUP, LLC
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Phone: (000) 000-0000
Attn: Xxxxx Xxxxxx
Operations Officer
NEITHER THE COMMON STOCK, THE WARRANTS, NOR THE SHARES OF
COMMON STOCK ISSUABLE UPON EXERCISE OF THE WARRANTS HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
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AMENDED, OR QUALIFIED UNDER THE CALIFORNIA CORPORATE
SECURITIES LAW OF 1968, AS AMENDED, OR REGISTERED OR
QUALIFIED UNDER THE SECURITIES OR BLUE SKY LAWS OF ANY OTHER
JURISDICTION, AND MAY ONLY BE SOLD, ASSIGNED, PLEDGED,
DISTRIBUTED, DONATED OR OTHERWISE TRANSFERRED OR DISPOSED OF
BY AN INVESTOR IF SUBSEQUENTLY REGISTERED UNDER THE
SECURITIES ACT AND REGISTERED OR QUALIFIED UNDER ANY
APPLICABLE STATE SECURITIES OR BLUE SKY LAWS, UNLESS THE
COMPANY DETERMINES THAT EXEMPTIONS FROM SUCH REGISTRATION AND
QUALIFICATION REQUIREMENTS ARE AVAILABLE.
SUBSCRIPTION, REPRESENTATION AND
SECURITIES TRANSFER RESTRICTION
AGREEMENT
DOVE ENTERTAINMENT, INC.
0000 Xxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
GENTLEMEN:
1. Subscription of Common Stock and Warrants. By executing and delivering
this Subscription, Representation and Stock Transfer Restriction
Agreement (the "Agreement"), the undersigned (and each of the
undersigned if more than one) hereby subscribes to purchase, on the
terms and conditions described herein, (i) _____________ shares of
common stock, par value $.01 per share (the "Common Stock") of DOVE
ENTERTAINMENT, INC., a California corporation (the "Company"), and (ii)
warrants to purchase Common Stock (the "Warrants") pursuant to the
terms of the Warrant Certificate attached hereto as Exhibit A, for an
aggregate purchase price of $_____________.
2. Acknowledgments. The undersigned (and each of the undersigned if more
than one) acknowledges that:
2.1 This subscription may be rejected in whole or in part at the
sole discretion of the Company, and the execution and delivery
of this Agreement by the undersigned investor or investors do
not constitute an agreement to sell the Common Stock or
Warrants or any other securities to such investor(s) unless
and until this Agreement has been accepted in writing by the
Company. This Agreement, however, is irrevocable as to the
undersigned once executed by the undersigned and delivered to
the Company.
2.2 The Company will rely upon the information contained herein
for purposes of determining my suitability as an investor in
the Company.
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2.3 The management of the Company is vested in the Board of
Directors and that being a shareholder confers no right to
participate in the Company's business or in the decisions of
its directors and officers.
3. Representations. The undersigned (and each of the undersigned if more
than one) hereby makes the following representations and warranties to
the Company:
3.1 I have received and carefully reviewed this Agreement, and I
have separately received and carefully reviewed the Company's
Private Placement Investment Information and Background
Material, which includes the information, including
Supplemental Disclosure, set forth in Schedule A attached
hereto and incorporated herein by this reference
(collectively, the "Investment Information").
3.2 I have obtained from the Company satisfactory responses to all
questions and requests for further information regarding the
business and plans of the Company, the contents of the
Investment Information, the terms and conditions of the
Offering and all other relevant matters.
3.3 I have been given access to and the opportunity to obtain such
additional information as I have deemed necessary to verify
the accuracy of the information provided to me by the Company.
3.4 I have not received and am not relying upon any written
offering literature or prospectus other than this Agreement
and the materials contained in the Investment Information, and
have not received and am not relying upon any oral or any
other written, representations, warranties, information or
statements whatsoever.
3.5 I personally have substantial knowledge and experience in
financial and business matters, have specific experience
making investment decisions of a similar nature, and am
capable, without the use of a financial or other advisor, of
utilizing and analyzing the information made available in
connection with this offering and of evaluating the merits and
risks of an investment in Securities. I will provide the
Company, upon request, with such information concerning my
prior investment experience, business or professional
experience and other information as the Company may deem
necessary to further evaluate the foregoing representations.
In addition, I have available to me and, when I desire or deem
appropriate, have utilized such financial or other advisors to
further supplement my own knowledge and experience.
3.6 I am subscribing to acquire the shares of Common Stock and
Warrants for investment purposes only, for my own account, and
not for resale to others or in connection with (or with any
view to) any further distribution of such security.
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3.7 I understand that (a) the shares of Common Stock, the Warrants
and the shares of Common Stock issuable upon Conversion of the
Warrants, have not been registered under the Securities Act of
1933, as amended (the "Securities Act"), or qualified under
the California Corporate Securities Law of 1968, as amended,
or the securities or blue sky laws of any other jurisdiction,
(b) the shares of Common Stock, the Warrants and the shares of
Common Stock issuable upon Conversion of the Warrants, cannot
be resold unless they subsequently are registered under the
Securities Act and qualified under applicable state securities
or blue sky laws, unless the Company determines that
exemptions from such registration and qualification
requirements are available and (c) consequently, subscribers
must bear the economic risk of an investment in the shares of
Common Stock, the Warrants and the shares of Common Stock
issuable upon Conversion of the Warrants, for an indefinite
period of time. I understand that only a very limited public
market now exists for the Company's Common Stock and it is
uncertain whether a substantial public market will ever exist
for the Common Stock.
3.8 I am aware that an investment in the securities offered hereby
is speculative and involves a high degree of risk.
3.9 I have adequate means of providing for my current needs and
possible personal contingencies and have no need for liquidity
in an investment in the shares of Common Stock or Warrants. I
am able to bear the economic risk of an investment in such
securities, can afford to hold them for an indefinite period
of time and, at the present time, could afford a complete loss
of such investment.
3.10 I may be deemed to be an accredited investor, because I meet
the requirements of one or more of the following categories:
(Please initial all boxes which apply to you.)
[ ] I am a director or executive officer of the Company.
[ ] I am a natural person whose individual net worth, or joint
net worth with my spouse, exceeds $1,000,000.
[ ] I am a natural person and had individual (not joint)
income in excess of $200,000 in each of the two most
recent years and reasonably expect to reach the same
income level in the current year, or I am a natural person
and had joint income (together with my spouse) in excess
of $300,000 in each of the two most recent years and
reasonably expect to reach the same income level in the
current year.
[ ] The undersigned is a private business investment company
as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940.
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[ ] The undersigned is a corporation, trust, Massachusetts
or similar business trust, partnership or other
organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended (i.e., tax
exempt entities), not formed for the specific purpose of
acquiring the Shares, with total assets in excess of $5
million according to its most recent audited financial
statements, and the investment decisions of which are
directed by one or more persons who have substantial
knowledge and experience in financial and business
matters, have specific experience making investment
decisions of a similar nature, and are capable, without
the use of a financial or other advisor, of utilizing and
analyzing the information made available in connection
with this offering and of evaluating the merits and risks
of an investment in the Securities.
[ ] The undersigned is (a) a small business investment
company licensed by the U.S. Small Business Administration
under Section 301(c) or (d) of the Small Business
Investment Company Act of 1958; (b) any investment company
registered under the Investment Company Act of 1940 or a
business development company as defined in Section
2(a)(48) of that Act; or (c) a U.S. bank or savings and
loan association, whether acting for itself or as a
trustee, or an insurance company as defined in Section
(2)(13) of the Act.
[ ] The undersigned is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income
Security Act of 1974, the investment decisions of which
are made by a plan fiduciary, as defined in Section 3(21)
of such Act, which is either a bank, a savings and loan
association, an insurance company, or a registered
investment advisor.
[ ] The undersigned is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income
Security Act of 1974, which either has total assets in
excess of $5,000,000 or is a self-directed plan, the
investment decisions of which are made solely by one or
more persons able to make the representations contained in
section 3.5 above and who fits into one of the above
categories.
[ ] The undersigned is an entity in which all of the equity
owners are accredited investors, falling into one or more
of the categories described above.
NOTE: The Company will not sell shares of Common Stock to an
investor unless the investor falls within one or more of the
above categories.
3.11 All information which I have provided to the Company
concerning myself, my financial position and my knowledge of
and experience with financial and business matters is correct
and complete as of the date set forth at the end of this
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Agreement, and if there should be any material change in such
information prior to the Final Closing of this Offering, I
will immediately provide the Company with such information.
3.12 If an individual, the undersigned is at least 21 years of age.
If an entity other than an individual, the undersigned is duly
authorized to purchase and hold the securities offered hereby.
3.13 If an individual, the residence, or, if an entity other than
an individual, the principal place of business, of the
undersigned, is as set forth on the signature page of this
Agreement. This address is the true and correct address of the
undersigned and is the only jurisdiction in which an offer to
sell the shares of Common Stock was made to the undersigned.
The undersigned has no present intention, if an individual, of
becoming a resident of, or, if an entity other than an
individual, of moving its principal place of business to, any
other state or jurisdiction.
4. Restrictions on Transfer of Securities. The undersigned (and each of
the undersigned if more than one) hereby makes the following further
agreements, representations and warranties regarding the restrictions
on the transferability of the Securities:
4.1 I agree that I will not directly or indirectly sell, assign,
pledge, distribute, donate, or otherwise transfer or dispose
of, or offer or agree to do any of the foregoing with respect
to, any of the shares of Common Stock or shares of Common
Stock received upon exercise of the Warrant (the "Conversion
Shares"), or any beneficial interest in the shares of Common
Stock or Conversion Shares, unless either (a) the shares of
Common Stock or Conversion Shares, as applicable, are
registered under and sold in accordance with the Securities
Act and the rules and regulations promulgated thereunder, and
are registered or qualified under and sold in accordance with
the provisions of any applicable state securities or blue sky
laws or (b) the Company has determined that exemptions from
such registration and qualification requirements are
available.
4.2 I understand and agree that a legend will be stamped on each
certificate representing the Common Stock or Conversion
Shares, as applicable, substantially in the following form:
The Securities represented by this certificate have
not been registered under the Securities Act of 1933,
as amended (the "Securities Act"), or qualified under
the California Corporate Securities Law of 1968, as
amended, or the securities or blue sky laws of any
other jurisdiction. The Securities represented hereby
cannot be sold, assigned, pledged, distributed,
donated or otherwise transferred or disposed of
without such registration under the Securities Act
and registration or qualification under applicable
state securities or blue sky laws, unless the Company
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determines that exemptions from such registration and
qualification requirements are available.
4.3 I understand and agree that the Company may issue such stop
transfer instructions to its transfer agents, if any, as it
may deem necessary to enforce the above transfer restrictions.
5. Joint Signers: Successors and Assigns. If this Agreement is signed by
more than one person or entity, then the obligations of the undersigned
under this Agreement shall be joint and several, and the
acknowledgments, representations, warranties and agreements herein
contained shall be deemed to be made by and be binding upon each such
person or entity. This Agreement shall survive the death or disability
of the undersigned and shall be binding upon the undersigned's heirs,
executors, administrators, successors and permitted assigns.
6. Miscellaneous.
6.1 This Agreement shall be governed by and construed in
accordance with the laws of the State of California applicable
to contracts between California residents entered into and to
be performed entirely within the State of California without
giving effect to any principle of conflict of law.
6.2 Except as otherwise provided herein, the provisions hereof
shall insure to the benefit of, and be binding upon, the
successors and permitted assigns of the parties hereto.
6.3 This Agreement constitutes the full and entire understanding
and agreement between the parties with regard to the subjects
hereof and supersedes all prior agreements, understandings and
arrangements, whether oral or written.
6.4 This Agreement may be executed in counterparts, each of which
shall be enforceable against the parties actually executing
such counterparts, and all of which together shall constitute
one instrument.
6.5 In the case any provision of this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any
way be affected or impaired thereby.
6.6 This Agreement may not be modified without the written consent
of the Company. No waiver of any provision shall be deemed a
waiver of any other provision or any subsequent application of
the provision so waived.
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7. CERTIFICATION AS TO TAXPAYER IDENTIFICATION NUMBER AND BACKUP
WITHHOLDING AND NON-FOREIGN STATUS-SUBSTITUTE FORM W-9 SOCIAL SECURITY
OR TAX ID NUMBER.
UNDER PENALTY OF PERJURY, I CERTIFY BY MY SIGNATURE BELOW THAT (a) THE
NUMBER SHOWN ON THIS FORM IS MY CORRECT TAXPAYER IDENTIFICATION NUMBER, (b) I AM
NOT SUBJECT TO BACKUP WITHHOLDING EITHER BECAUSE (I) I AM EXEMPT FROM BACKUP
WITHHOLDING, (II) I HAVE NOT BEEN NOTIFIED THAT I AM SUBJECT TO BACKUP
WITHHOLDING AS A RESULT OF A FAILURE TO REPORT ALL INTEREST OR DIVIDENDS, OR
(III) THE INTERNAL REVENUE SERVICE HAS NOTIFIED ME THAT I AM NO LONGER SUBJECT
TO BACK WITHHOLDING, (c) I AM NOT A NON-RESIDENT ALIEN FOR PURPOSES OF U.S.
INCOME TAXATION, (d) MY HOME ADDRESS (INDIVIDUAL) OR BUSINESS ADDRESS (ENTITY)
SET FORTH IN THE AGREEMENT IS CORRECT AND (e) IF I BECOME A NON-RESIDENT ALIEN,
I WILL NOTIFY THE COMPANY WITHIN SIXTY (60) DAYS OF DOING SO.
IF YOU HAVE BEEN NOTIFIED BY THE IRS THAT YOU ARE PRESENTLY SUBJECT TO BACKUP
WITHHOLDING, STRIKE OUT THE LANGUAGE UNDER (b) ABOVE BEFORE SIGNING.
8. Type of Ownership for the Common Stock subscribed for (Check the
Appropriate Box):
[ ] INDIVIDUAL OWNERSHIP BY UNMARRIED PERSON
[ ] OWNERSHIP BY MARRIED PERSON AS SOLE AND SEPARATE PROPERTY (if you
live in a state which has community property laws, signatures of
both spouses may be required)
[ ] COMMUNITY PROPERTY (signatures of both spouses are required)
[ ] JOINT TENANTS WITH RIGHT OF SURVIVORSHIP (both parties must sign)
[ ] TENANTS-IN-COMMON (both parties must sign)
[ ] CORPORATION
[ ] PARTNERSHIP
[ ] TRUST
[ ] OTHER ENTITY
Any person executing this Agreement on behalf of such entities hereby
represents and agrees that: (a) he or she is duly authorized to act on
behalf of such corporation, partnership, trust or other entity, (b)
such corporation, partnership, trust or other entity was formed on
_____________, 19__ and (c) he or she will provide such information as
the Company may request confirming the authority to sign on behalf of
such entity.
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9. Subscription Details and Execution. IN WITNESS WHEREOF, the undersigned
hereby subscribe(s) for the amount of Common Stock and Warrants at the
subscription price as indicated below, provide(s) the information
indicated, and execute(s) and deliver(s) this Agreement as of the date
indicated. Upon close of escrow in accordance with the joint escrow
instructions, the Escrow Agent will mail to you at the address
indicated below original certificates representing the purchased shares
of Common Stock and the Warrant.
[remainder of page intentionally left blank,
signature page to follow]
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Subscription Price Enclosed: $______; make wired funds payable to
"______________ AS ESCROW AGENT FOR DOVE ENTERTAINMENT, INC.")
Date of Execution: ______________, 1997
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Investor #1 (Print or Type Name) Investor #2 (Print or Type Name)
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Signature Signature
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Social Security or Tax ID # Social Security or Tax ID #
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Residence Xxxxxx Xxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxx
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City and State Zip City and State Zip
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Residence Telephone Residence Telephone
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Business Name Business Name
---------------------------------- ----------------------------------
Business Address Business Address
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City and State Zip City and State Zip
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Business Telephone Business Telephone
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Mail Correspondence to: Mail Correspondence to:
[ ] Residence [ ] Business [ ] Residence [ ] Business
SUBSCRIPTION ACCEPTED:
DOVE ENTERTAINMENT, INC.
By: Date: , 1997
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Xxxxxxx Xxxxx
Chairman and Chief Executive Officer
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SCHEDULE A
Public Disclosure Documents
1. Form 10-KSB for the Fiscal Year Ended December 31, 1995, as amended by
Form 10- KSB filed with the Securities and Exchange Commission (the
"SEC") on September 12, 1996.
2. Form 10-QSB for the Quarter Ended March 31, 1996, as amended by Form
10-QSB/A filed with the SEC on September 10, 1996.
3. Form 10-QSB for the Quarter Ended June 30, 1996, as amended by Form
10-QSB/A filed with the SEC on September 11, 1996.
4. Form 10-QSB for the Quarter Ended September 30, 1996.
5. Rule 424(b) Prospectus filed with the SEC on September 20, 1996.
6. Proxy Statement, dated October 11, 1996.
Supplemental Disclosure
The Company believes, based upon its current operations and
obligations, that the net proceeds from the proposed sale and issuance of Common
Stock will not be adequate, together with the Company's existing working
capital, to pay all of the Company's existing obligations, many of which are
past due. Accordingly, the Company is currently seeking to raise additional
funds by, among other means, additional equity financings, a new bank facility
and/or entering into an agreement with a strategic partner to make an investment
in the Company. While there can be no assurance that such efforts by the Company
to raise additional funds or to find a strategic partner will be successful, the
Company is currently in discussions with several intermediaries concerning
potential financings, various banks and at least two potential strategic
partners. While there can be no assurance as to the occurrence of any of the
following, such potential strategic partner may (a) agree to make an investment
in the Company in the form of the purchase of (i) Common Stock and warrants,
(ii) a security (possibly debt or preferred stock) convertible into Common Stock
or (iii) other securities (including debt) of the Company, (b) seek
representation on the Board of Directors of the Company through one or more
seats thereon, (c) seek to bring new senior management personnel to the Company
and/or (d) attempt to assist the Company in obtaining a new bank facility. If
the Company is unable to obtain additional financing by the end of March 1997,
the Company very likely would be subject to receiving a "going concern opinion"
from its independent public accountants when such independent public accountants
issue their audit report for the Company due at such time. See MD&A -- Liquidity
and Capital Resources.
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