DAC Technologies Group International, Inc.
Subscription Agreement
EXHIBIT 10.6
FORM OF ACCREDITED INVESTOR SUBSCRIPTION AGREEMENT
ACCREDITED INVESTOR SUBSCRIPTION AGREEMENT
To: DAC Technologies Group International, Inc.
c/o Keane Securities Co., Inc. ("Placement Agent")
00 Xxxxxxxx
Xxx Xxxx, X. Y. 10004
Attn.: Xxxxxx X. X' Xxxxx, Xx.,
Sr. Vice-President
RE: PURCHASE OF UNITS CONSISTING OF COMMON SHARES AND WARRANTS OF DAC
TECHNOLOGIES GROUP INTERNATIONAL, INC. (THE CORPORATION")
Dear Sirs:
1. SUBSCRIPTION AGREEMENT. This letter subscription agreement ("Agreement")
will confirm my (hereinafter "Subscriber") subscription to invest, as
provided in this Agreement, the consideration specified in paragraph 20
below (the "Subscription Consideration") in the Corporation. The
Subscription Consideration will be applied to purchase that number of
units consisting of shares of common stock ("Common Stock") and warrants
("Unit Warrants") (collectively the "Units") of the Corporation at the
rate of $25,000 per Unit as further described in the as described in the
Term Sheet, attached as Exhibit A attached hereto and incorporated herein
by reference. The Subscription Consideration shall be paid by check, wire
transfer or other good funds and the Units, when issued, will be fully
paid and non-assessable.
2. OFFERING. Subscriber understands you will be offering Units totaling $1.7
million (the "Offering") in accordance with the terms set forth on Exhibit
A. The Corporation is offering no preemptive rights in the event future
shares are sold following the completion of this Offering.
3. ANTI-DILUTION. Subject to the provisions of this Section, the number of
shares of Common
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Stock into which each Unit Warrant may be exchanged will be subject to
adjustment from time to time pursuant to a warrant certificate in the form
attached as Exhibit B hereto and incorporated herein by reference.
4. REPRESENTATIONS OF THE SUBSCRIBER. Subscriber acknowledges, represents and
warrants, as follows:
(a) RECEIPT OF CORPORATE INFORMATION. No Private Placement Memorandum
("PPM") or other customary private offering or disclosure document(s) are
provided in connection with this Offering, but that Subscriber has been
furnished with all requested publicly-available documents, records and
books pertaining to the Corporation's, including, without limitation, its
most recent annual report on Form 10-KSB for the Year Ended December 31,
2003 (the "Form 10-KSB") with the Securities and Exchange Commission
"SEC") and copy of which is attached hereto as Exhibit C and made a part
hereof. All of the Corporation's prior SEC filings, including Quarterly
Report on Form 10QSB for the Quarter Ended September 30, 2003 (the "Form
10-QSB;" the Form 10-KSB and the Form 10-QSB are collectively referred to
herein as the SEC Documents") may be accessed on line at xxx.xxx.xxx . The
SEC Documents have been made available to the Subscriber
and/or its advisors, and all of the Subscriber 's questions and requests
for information have been answered to the Subscriber's satisfaction.
(b) NO NEED FOR PPM. Subscriber declines the need for a PPM because of its
personal wealth, due diligence, ability and sophistication in evaluating
the investment. In this regard, Subscriber acknowledges that he will:
- be furnished at Subscriber's request with full and complete
access to all material information relating to the
Corporation, including, but not limited to: leases, material
contracts, financial statements, pending litigation,
competition, use of proceeds, capitalization, and principal
owners;
- met with or have been invited to meet with and question the
key officers, principals and employees concerning all of the
matters identified in the previous bullet point as well as the
material risks associated with the offering and the business
of the Corporation;
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- been provided sufficient time to conduct his personal due
diligence including inquiring of and being advised by, his
personal attorneys, financial and investment advisors. The
Corporation has also afforded Subscriber the opportunity to
obtain any additional nonproprietary information necessary to
verify the accuracy of any other information provided to
Subscriber. In evaluating the suitability of an investment in
the Units, Subscriber has not relied upon any representations
or other information provided by third parties, with the
exception of Subscriber's personal advisors.
(c) RISKS. The Subscriber acknowledges and understands that the purchase
of the Securities involves a high degree of risk and is suitable only for
persons of adequate financial means who have no need for liquidity in this
investment in that (i) the Subscriber may not be able to liquidate the
investment in the event of an emergency; (ii) transferability is extremely
limited; and (iii) in the event of a disposition, the Subscriber could
sustain a complete loss of its entire Subscriber has adequate means of
providing for Subscriber's current needs and possible personal
contingencies and have no need for liquidity of this investment.
(d) ACCREDITED INVESTOR STATUS. The Subscriber is an "accredited
investor," as defined in Rule 501(a) of Regulation D, promulgated by the
Securities & Exchange Commission (the "SEC") under the Securities Act of
1933, as amended (the "Securities Act"). Subscriber considers
himself/itself to have knowledge and experience in financial and business
matters generally such that Subscriber is capable of evaluating the merits
and risks of an investment in the Units and Subscriber is able to bear the
economic risk of an investment in Units, including loss of the entire
investment. Subscriber agrees to make such additional representations and
warranties and furnish such information regarding Subscriber's investment
experience and financial position as the Corporation may reasonably
require.
(e) INVESTMENT INTENT. The Subscriber hereby represents that the
Securities being purchased hereunder are being acquired for the
Subscriber's own account, with no intention of distributing such
securities to others. The Subscriber has no contact,
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undertaking, agreement or arrangement with any person to sell, transfer or
otherwise distribute to any person or to have any person sell, transfer or
otherwise distribute for the Subscriber the Securities being purchased
hereunder or any interest therein. The Subscriber is presently not
engaged, nor does the Subscriber plan to engage within the presently
foreseeable future, in any discussion with any person regarding such a
sale, transfer or other distribution of the securities being purchased
hereunder or any interest therein.
(f) COMPLIANCE WITH FEDERAL AND STATE SECURITIES LAWS. The Subscriber
understands that the Securities being offered and sold hereunder have not
been registered under the Securities Act. The Subscriber understands that
the Securities being offered and sold hereunder must be held indefinitely,
unless the sale or other transfer thereof is subsequently registered under
the Securities Act or an exemption from such registration is available.
Moreover, the Subscriber understands that its right to transfer the
Securities being purchased hereunder will be subject to certain
restrictions, which include restrictions against transfer under the
Securities Act, and applicable state securities laws. In addition to such
restrictions, the Subscriber realizes that it may not be able to sell or
dispose of the Securities being purchased hereunder as there may be no
public or other market for them. The Subscriber understands that
certificates evidencing the Securities being purchased hereunder shall
bear a legend, substantially as follows:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY APPLICABLE
STATE LAW. THEY MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR PLEDGED WITHOUT (1) REGISTRATION UNDER THE SECURITIES ACT
OF 1933 AND ANY APPLICABLE STATE LAW, OR (2) AN OPINION
(REASONABLY SATISFACTORY TO THE COMPANY) OF COUNSEL THAT
REGISTRATION IS NOT REQUIRED.
(g) AUTHORITY; ENFORCEABILITY. The Subscriber has the full right, power,
and authority to execute and deliver this Agreement and perform its
obligations hereunder.
(h) NON-CONTRAVENTION. This Agreement constitutes a valid and legally
binding
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obligation of the Subscriber, and neither the execution of this Agreement,
nor the consummation of the transactions contemplated hereby, will
constitute a violation of or default under, or conflict with, any
judgment, decree, statute or regulation of any governmental authority
applicable to the Subscriber or any contract, commitment, agreement or
restriction of any kind to which the Subscriber is a party or by which its
assets are bound. The execution and delivery of this Agreement does not,
and the consummation of the transactions described herein will not,
violate applicable law, or any mortgage, lien, agreement, indenture, lease
or understanding (whether oral or written) of any kind outstanding
relative to the Subscriber.
(i) APPROVALS. No approval, authorization, consent, order or other action
of, or filing with, any person, firm or corporation or any court,
administrative agency or other governmental authority is required in
connection with the execution and delivery of this Agreement by the
Subscriber or the consummation of the transactions described herein.
(j) PLACEMENT AGENT'S COMPENSATION. The Subscriber acknowledges that the
Placement Agent, as compensation for its having assisted the Company in
the placement of the Units hereunder, will receive (i) a fee equal to 8%
of the aggregate proceeds from the sale of the Units offered and sold
hereunder; (ii) reimbursement of the Placement Agent's accountable
expenses up to a maximum of $30,000; and (iii) 5,000 Warrants identical to
the Unit Warrants for each Unit sold.
(k) SUBSEQUENT SALES. The Subscriber acknowledges that the Corporation may
from time to time raise additional capital, which may include, but not be
limited to, subsequent offers and sales by the Corporation ("Subsequent
Sales") of additional shares of Common Stock (with the same or different
terms). Nothing herein shall prohibit the Company from offering or selling
additional shares of its equity in addition to the Units.
(l) CONSENTS TO AMENDMENTS TO ARTICLES OF INCORPORATION. The Subscriber
hereby consents to the filing of an amendment or amendments, to the
Corporations's Articles of Incorporation to effect any adjustments to its
capitalization to implement this private placement.
(m) ADDITIONAL INFORMATION. All information that Subscriber has provided
to the Corporation is correct and complete as of the date set forth below
and if there should be any
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material change in the information set forth herein, or in any other
information provided to the Corporation prior to my admission to the
Corporation, Subscriber will immediately furnish such revised or corrected
information to the Corporation.
5. REPRESENTATIONS OF THE CORPORATION. Subscriber understands that the
Corporation acknowledges, represents and agrees, as follows:
(a) CORPORATE ORGANIZATION. The Corporation is duly organized, validly
existing and in good standing under the laws of the State of Florida and
has full corporate power, authority and legal right to own its properties
and to conduct the businesses in which it is now engaged. The Corporation
is duly licensed or qualified to transact business as a foreign
corporation and is in good standing in each jurisdiction where the
ownership or lease of its assets or the operation of its business requires
such qualification, except where the failure to be so qualified would not
have a material adverse effect on the business, operations, property or
financial or other condition of the Corporation (a "Material Adverse
Effect").
(b) AUTHORITY. The Corporation has full corporate power and authority to
execute and deliver this Agreement and to perform all of its covenants and
agreements hereunder. The execution and delivery of this Agreement by the
Corporation, the performance by the Corporation of its covenants and
agreements hereunder and the consummation by the Corporation of the
transactions contemplated hereby, have been duly authorized by all
necessary corporate action.
(c) ENFORCEABILITY. This Agreement when duly executed and delivered by the
Corporation, will constitute a valid and legally binding obligation of the
Corporation, enforceable against the Corporation in accordance with its
terms, except as such enforceability may be limited by (i) bankruptcy,
insolvency, moratorium or similar laws affecting the enforcement of
creditors' rights generally, or by the principles governing the
availability of specific performance, injunctive relief and other
equitable remedies (regardless of whether such enforceability is
considered in equity or at law), including requirements of reasonableness
and good faith in the exercise of rights and remedies thereunder; (ii)
applicable laws and court decisions which may limit or render
unenforceable certain terms and provisions contained therein, but which,
in our opinion, do not substantially interfere with the practical
realization of the benefits thereof, except for the economic consequences
of
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any procedural delay which may be imposed by, relate to or result from
such laws and court decisions; and (iii) the limitations on the
enforceability of the securities indemnification provisions set forth
herein by reason of matters of public policy.
(d) NONCONTRAVENTION. Neither the execution and delivery of this Agreement
by the Corporation, nor the consummation of the transactions contemplated
hereby, nor the performance by the Corporation of its covenants and
agreements hereunder (i) violates any provision of the Articles of
Incorporation or By-Laws of the Corporation; (ii) violates any existing
law, statute, ordinance, regulation, or any order, judgment or decree of
any court or governmental agency to which the Corporation is a party, or
by which the Corporation or any of its assets is bound; or (iii) conflicts
with or will result in any breach of any of the terms of, or constitute a
default under or result in the termination of or the creation of any lien
pursuant to the terms of any indenture, mortgage, real property lease,
securities purchase agreement, credit or loan agreement or other material
agreement to which the Corporation is a party or by which the Corporation
or any of its assets is bound, to the extent such violation thereof,
conflict therewith, breach thereof, default thereunder or termination
thereof would have a Material Adverse Effect.
(e) WARRANT SHARES. The Common Shares have been duly authorized and
reserved for issuance and, when issued upon the exercise of the Unit
Warrants in accordance with the terms thereof, will be duly and validly
authorized and issued, fully paid and non-assessable.
(f) APPROVALS. Except as may be required under federal and state
securities laws (which have been or, in the case of compliance required on
a post-sale basis, will be complied with), the execution, delivery and
performance of this Agreement by the Corporation does not require (i) the
consent, waiver, approval, license or authorization of or any filing with
any person or any governmental authority; or (ii) the approval or
authorization of the shareholders of the Corporation.
(g) LEGAL PROCEEDINGS. There are no (i) actions, suits, claims,
investigations or legal or administrative or arbitration proceedings
pending or, to the best knowledge of the Corporation, threatened against
or affecting the Corporation, whether at law or in equity, or before or by
any governmental authority; (ii) judgments, decrees, injunctions or orders
of any governmental authority or arbitrator against the Corporation,
which, in either case, could
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have a Material Adverse Effect.
(h) SEC FILINGS, ETC. The Corporation has heretofore furnished or provided
reasonable access or to each Subscriber correct and complete copies of the
SEC Documents. The SEC Documents were true and correct in all material
respects at the time filed with respect to the periods covered thereby;
and such reports, as amended, supplemented, or updated by subsequent
filings, are true and correct as of the date so amended, supplemented, or
updated in all material respects, do not contain any misstatement of a
material fact, and do not omit to state a material fact or any fact
required to be stated therein or necessary to make the statements
contained therein not materially misleading with respect to the periods
covered thereby; and all amendments or supplements thereto required to be
filed under the federal securities laws have been so filed. The
consolidated financial statements of the Corporation included in the SEC
Documents complied, when filed, with the then -applicable accounting
requirements and the published rules and regulations of the SEC with
respect thereto, were prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods
involved (except as may have been indicated in the notes thereto or, in
the case of the unaudited statements, as permitted by Form 10-QSB
promulgated by the SEC) and fairly presented (subject, in the case of the
unaudited statements, to normal audit adjustments) the financial position
of the Corporation at the dates thereof and the consolidated results of
the operations and statement of changes in financial position for the
periods then ended. The Corporation has filed all documents and agreements
that were required to be filed as exhibits to the SEC Documents and all
such documents and agreements when filed were correct and complete in all
material respects.
(i) ABSENCE OF UNDISCLOSED LIABILITIES. Except as disclosed in the
financial statements (the "Financial Statements") included in the SEC
Documents, or as incurred in the ordinary course of business subsequent to
December 31, 2003, as of the date hereof (i) the Corporation has no
material liability of any nature (matured or unmatured, fixed or
contingent) that was not provided for or disclosed in the Financial
Statements, and (ii) to the best knowledge of the Corporation, all
liability reserves established by the Corporation and set forth in the
Financial Statements were adequate in all material respects for the
purposes indicated therein.
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(j) NO CHANGE. Except as disclosed in or contemplated by the SEC
Documents, since December 31, 2003, there has not been (i) any material
change in the condition (financial or otherwise), operations, results of
operations, assets, liabilities, business or prospects of the Corporation
taken as a whole; (ii) any material liability or obligation (contingent or
otherwise) incurred by the Corporation, other than current liabilities (or
obligations) or capital leases incurred in the ordinary course of
business; (iii) any asset or property of the Corporation made subject to a
lien of any kind, except (a) liens for taxes not yet due or which are
being contested in good faith and by appropriate proceedings provided
adequate reserves with respect thereto, are maintained on the
Corporation's books in accordance with generally accepted principles; (b)
landlords', carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like liens arising in the ordinary course of business
which are not overdue for a period of more than sixty (60) days or which
are being contested in good faith and by appropriate proceedings; (c)
pledges or deposits in connection with worker's compensation, unemployment
insurance and other social security legislation; (d) deposits to secure
the performance of contracts, bids, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature;
(e) easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business; and (f) liens which, in the
aggregate, are not material in amount, and which do not in any case
materially detract from the value of the property subject thereto or
interfere with the ordinary conduct of the Corporation's business; (iv)
any waiver of any material valuable right of the Corporation, or the
cancellation of any material debt or claim held by the Corporation; (v)
any payment of dividends on, or other distributions with respect to, or
any direct or indirect redemption or acquisition of, any shares of the
Common Stock of the Corporation, or any agreement or commitment therefore;
(vi) any mortgage, pledge, sale, assignment or transfer of any tangible or
intangible assets of the Corporation, except, with respect to tangible
assets, in the ordinary course of business; (vii) any loan by the
Corporation to any officer, director, employee or shareholder of the
Corporation, or any agreement or commitment therefor; (viii) any material
damage, destruction or loss (whether or not covered by insurance) which
does nor may adversely affect the condition (financial or otherwise),
operations, results of assets, property, business or prospects of the
Corporation; or (ix) any change in the accounting methods or practices
followed by the Corporation.
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(k) TAXES. The Corporation has accurately prepared and timely filed or
has had accurately prepared and timely filed on its behalf all tax returns
which, to the knowledge of the Corporation, are required to be filed by
it, and has paid all taxes shown to be due and payable on said returns or
on any assessments made against it or any of its property and all other
taxes, fees or other charges imposed on it or any of its property by any
nation or government, any state or other political subdivision thereof,
and any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government (other than those
the amount or validity of which is currently being contested in good faith
by appropriate proceedings and with respect to which reserves in
conformity with generally accepted accounting principles have been
provided on the books of the Corporation); and except as set forth on a
Schedule hereto, no tax liens have been filed and, to the knowledge of the
Corporation, no claims are being asserted with respect to any such taxes,
fees or other charges.
(l) DISCLOSURE. The representations or warranties made by the
Corporation in this Agreement or, except to the extent modified or amended
by subsequent written disclosure to each of the Subscribers through the
date hereof, in any other document or certificate furnished in connection
herewith did not contain at the time made, or, if set forth herein, does
not contain any untrue statement of a material fact, or omit to state any
material fact necessary to make the statements herein or therein, in light
of the circumstances under which they are made, not misleading in any
material respect. There is no fact known to the Corporation that
materially adversely affects or, other than general economic conditions in
the industry in which the Corporation operates, that the Corporation
reasonably believes will in the future materially adversely affect the
business, operations, affairs or condition, financial or otherwise, of the
Corporation, which has not been set forth in this Agreement or in the SEC
Documents.
m. CAPITALIZATION The authorized capital stock of the Corporation
consists of:
(i) Common stock, $.001 par value authorized 50,000,000 shares;
issued 5,843,056 shares and outstanding 5,713,056 shares at
December 31, 2003;
(ii) Preferred stock, $.001 par value; authorized 10,000,000
shares; none issued and outstanding. These "blank check"
shares empower the Board of Directors, without stockholder
approval, to designate and issue additional
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series of preferred stock with dividend, liquidation,
conversion, voting or other rights, including the right to
issue convertible securities with no limitations on
conversion. These designations and issuances may:
- adversely affect the voting power or other rights
of the holders of Common stockholders;
- substantially dilute the Common shareholder's
interest;
- depress the price of Common Stock; and
- delay, deter, or prevent a merger, take over or
change in control without any action by the
shareholders.
n. RELATED PARTY TRANSACTIONS Except to the extent described in the SEC
Documents, no current principal shareholder or current or former director,
officer or employee of the Corporation nor any "affiliate" (as defined in the
rules and regulations promulgated under the Securities Exchange Act of 1934, as
amended), of any such person, is currently, directly or indirectly through his
affiliation with any other person or entity, a party to any transaction (other
than as an employee, consultant or shareholder) with the corporation providing
for the furnishing of services by, or rental of real or personal property from,
or otherwise requiring cash payments from or to any such person.
6. REGISTRATION RIGHTS
(a) FILING OF REGISTRATION STATEMENT. The Corporation, at its sole
expense, shall file (i) on or before September 30, 2004 a registration
statement of the Common Stock and the Unit Warrants on Form S-3 (which
permits the inclusion or incorporation by reference of substantial
information by reference to other documents filed by the Corporation with
the SEC)(the "Registration Statement") or (ii) a Registration Statement as
soon thereafter as the Corporation is eligible to use Form S-3. In the
event the Corporation is not eligible to use Form S-3, it shall provide to
the Subscriber evergreen piggy-back registration rights covering the
Common Shares and Unit Warrants. The corporation shall use its best
efforts to achieve the effectiveness of the registration in question.
(b) OBLIGATIONS OF THE CORPORATION. In connection with the filing of the
Registration Statement, the Corporation shall:
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- prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration
Statement and the prospectus used in connection with the
Registration Statement and take such other reasonable action
as may be necessary to keep the Registration Statement
effective until the earlier of the (A) public sale of the
Common Shares or (B) the Common Shares becoming capable of
full and complete public sale without registration under the
Securities Act, and to comply with the provisions of the
Securities Act and the Exchange Act, and the rules and
regulations thereunder, with respect to the disposition of the
Common Shares;
- Notify the Subscriber, after becoming aware thereof: (A) when
the Registration Statement or the prospectus included therein
or any prospectus amendment or supplement or post-effective
amendment has been filed and, with respect to the Registration
Statement or any post-effective amendment, when the same has
become effective, or (B) of any request by the SEC for
amendment of or supplement to the Registration Statement or
related prospectus or for additional information.
7. FILINGS CURRENT. Subscriber has been advised that the Corporation is a
reporting Corporation as that term is used in the Securities Exchange Act
of 1934 ("Exchange Act""), and has, to date, is current in its report
filings with the SEC.
8. FORWARD-LOOKING STATEMENTS. Subscriber acknowledges that much of the
information and statements provided to him/it constitutes forward-looking
information. These are statements that plan for or anticipate the future.
Subscriber further acknowledges that forward-looking statements include
statements about the future of the of the Corporation, the future of
products in that industry, statements about the Corporation's future plans
and strategies, and most other statements not historical in nature.
Subscriber further acknowledges these statements are based on assumptions
that may or may not prove to be accurate and Subscriber has not relied
upon these projected results as indicative of the actual results that may
be obtained by the Corporation. No representation or warranty of any kind
has been given to Subscriber with respect to the accuracy of such
projections or the underlying assumptions. Moreover, Subscriber
understands forward-looking statements may be identified by the use of
forward-looking terminology such as "may," "will," "expect," "believe,"
"estimate,"
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"anticipate," "continue," or similar terms, variations of those terms, or
the negative of those terms. Forward-looking statements involve risks and
uncertainties, and Subscriber understands that the Corporation's actual
results could differ materially from the results discussed in the
forward-looking statements.
9. ACCEPTANCE/REJECTION. The Corporation and the Placement Agent each has the
right to accept or reject this Subscription in whole or in part. This
Agreement will be deemed to be accepted by the Corporation only when
signed by the Corporation or its authorized agent. Once accepted by the
Corporation, this Subscription is irrevocable except as otherwise required
by applicable state securities laws.
10. Subscriber understands that:
- Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal
offense.
- Subscriber's right to transfer all or any part of the Units will be
"restricted" as that term is defined under Rule 144 promulgated
pursuant to, and such Common Units may not be transferred unless
registered under the Securities Act of 1933, (the "Securities Act,"
15 USCA Sections 7a et seq.), and any applicable state securities
laws, unless an exemption from such registration is available.
11. Subscriber hereby certifies that Subscriber qualifies as an "accredited
investor" within the meaning of Rule 501(a) of Regulation D promulgated under
the Securities Act both because I am a natural person and (CHECK ONE ):
A._______ MY (OR COMBINED WITH MY SPOUSE) NET WORTH EXCEEDS
$1,000,000 AT THE TIME OF THE PURCHASE OF THE UNITS, OR
B._______BECAUSE MY ANNUAL INCOME IN EACH OF 2002 AND 2003 HAS
EXCEEDED $200,000 (OR $300,00 IF COMBINED WITH MY SPOUSE), AND IN
THE CURRENT YEAR (2004) IS EXPECTED TO REACH THE SAME INCOME LEVEL;
OR
C.______ANY EXECUTIVE OFFICER OR DIRECTOR OF THE CORPORATION; OR
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D.______CERTAIN FINANCIAL INSTITUTIONS; OR
E.______ BUSINESS DEVELOPMENT CORPORATION UNDER SECTION 202(A)(22)
OF THE INVESTMENT ADVISER OF 1940; OR
F.______ORGANIZATIONS DESCRIBED IN SECTION 501 (C)(3) OF THE
INTERNAL REVENUE CODE AND CERTAIN OTHER CORPORATIONS, TRUSTS OR
PARTNERSHIPS NOT FORMED FOR THE SPECIFIC PURPOSE OF ACQUIRING THE
SECURITIES OFFERED, WITH TOTAL ASSETS IN EXCESS OF $5,000,000; OR
G.______ANY TRUST WITH TOTAL ASSETS IN EXCESS OF $5,000,000 NOT
FORMED FOR THE SPECIFIC PURPOSE S OFFERED, WHOSE PURCHASE IS
DIRECTED BY A SOPHISTICATED PERSON; AND
H._____AN ENTITY IN WHICH ALL OF THE ENTITY OWNERS MEET ONE OR MORE
OF THE CATEGORIES SET FORTH IN SUBSECTIONS (A) THROUGH (G) HEREOF.
12. Subscriber understands the meaning and legal consequences of the
representations and warranties and the restrictions and limitations
on transfer contained in this Agreement and hereby agree to
indemnify and hold harmless the Corporation, the Board members, the
Placement Agent, and each of their affiliates, advisors, agents and
employees, from and against any and all loss, damage or liability
due to or arising out of any inaccuracy in or breach of any of those
representations or warranties by Subscriber. Notwithstanding the
provisions of this paragraph, Subscriber acknowledges specifically
that the representations and warranties and understandings and
agreements set forth in this Agreement will survive the date of this
Agreement.
13. Failure by the Corporation to exercise any right or remedy under this
Agreement or any other agreement between the Corporation and him, or delay
by the Corporation in exercising the same, shall not operate as a waiver.
No waiver by the Corporation shall be effective unless it is in writing
and signed by the Corporation.
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14. In the event that any provision of this Agreement is invalid or
unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may conflict
with such statute or rule of law and shall be deemed modified to conform
therewith. Any provision hereof which may prove invalid or unenforceable
shall not affect the validity or enforceability of any other provision
hereof..
15. Notices required or permitted to be given under this Agreement shall be in
writing and shall be deemed to be sufficiently given when sent by
registered or certified United States mail, postage prepaid, addressed to
the party for whom intended at the address of such party set forth below.
For the notice required regarding the exercise of the Unit Warrants or
other related notice, please see the Unit Warrant Certificate, Exhibit B.
16. This Agreement is not transferable or assignable by Subscriber.
17. This Agreement and all questions relating to its validity, interpretation,
performance and enforcement shall be governed and construed in accordance
with the laws of the State of Florida, without giving effect to conflict
of law principles (except insofar as affected by the state securities or
"Blue Sky" laws of the jurisdiction in which the offerings described
herein have been made). Subscriber understands that this Agreement: (I)
shall be binding upon Subscriber and his legal representatives, successors
and assigns and shall inure to the benefit of the Corporation, its
successors and assigns; (ii) shall survive his admission as a shareholder
of the Corporation; and (iii) may be executed by his and accepted by the
Corporation in one or more counterparts, each of which shall be an
original and all of which together shall constitute one instrument.
18. Miscellaneous:
00.00.XX PUBLICATION. Subscriber agrees Subscriber will not voluntarily
publish or disclose in any manner the terms of this Agreement.
18.02.FURTHER ASSURANCES. Subscriber agrees to execute and deliver such
other instruments and do such other acts as may be necessary to
carry out the intent and purposes of this Agreement.
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18.03.COUNTERPARTS. This Agreement may be executed in any number of
counterparts. All executed counterparts shall constitute one
Agreement, notwithstanding that all signatories are not signatories
to the original or the same counterpart.
18.04.COMPLETENESS AND MODIFICATION. Subscriber understands this
Agreement constitutes the entire understanding among the parties
concerning the subject matter hereof and it supercedes all prior or
contemporaneous agreements or understandings. No waiver or
modification of the terms hereof shall be valid unless in writing
signed by the parties or party to be charged and only to the extent
therein set forth. No covenant, representation or condition not
expressed in this agreement shall offset or be effective to
interpret change or modify any of the expressed provisions of this
Agreement.
18.05.ARBITRATION. The parties hereto agree that all actions,
controversies, disputes and proceedings relating directly or
indirectly hereto shall be arbitrated in Palm Beach County, Florida
before and in accordance with the rules and regulations of the
American Arbitration Association. The parties hereby expressly
consent to the jurisdiction of any such arbitration forum or court
and to venue therein and consent to service the process in any such
action or proceeding by certified or registered mailing of the
summons/complaint thereof directly to the parties as their
respective addresses as set forth in this Agreement.
18.06.BINDING AFFECT. This Agreement shall be binding upon the heirs and
personal representatives, guardians, legal representatives,
administrators, assigns and successors or the parties hereto.
18.07.RIGHT TO COUNSEL. Subscriber acknowledges that Subscriber has had
the opportunity to discuss the contents of this Agreement with his
attorneys.
19. RESIDENCY REPRESENTATION. Subscriber represents that his principal
residence (if an individual), is the state shown on this Agreement; if the
Subscriber is an entity (except a general partnership) such as a
corporation, trust, limited partnership, or limited liability Corporation,
it was incorporated, or organized and is existing under the laws of the
state shown in this Agreement. If the Subscriber is a general partnership,
the principal residence of all general partners are in the states shown in
this Agreement. The Subscriber represents that regardless of the form of
the entity, it was not formed for the specific purpose of engaging in this
transaction.
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Subscription Agreement
20. SUBSCRIPTION CONSIDERATION
The Subscription Consideration consists of the following:
AMOUNT $__________ NUMBER OF UNITS________ (INITIAL_______)
21. FORM OF OWNERSHIP (CHECK ONE)
Subscriber has initialed the form of ownership Subscriber desires for the
Units.
[ ] Individual (one signature required)
[ ] Joint Tenants with Right of Survivorship (all parties must sign)
[ ] Tenants in Common (all parties must sign)
[ ] Tenants by the Entirety (all parties must sign)
[ ] Community Property (one signature required if interest held in one
name, i.e, managing spouse; two signatures required if interest is held in
both names)
[ ] Corporation (signature of authorized officer or officers required)
[ ] Partnership (signature of general partner and any additional
signatures required by partnership agreement required)
[ ] Trust (signature of trustee and any additional signatures required by
trust instrument required)
[ ] Other Entities (all signatures required by governing instrument
required)
22. BLUE SKY PROVISIONS
SALES IN FLORIDA: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR THE FLORIDA SECURITIES
ACT, BY REASON OF SPECIFIC EXEMPTIONS THEREUNDER RELATING TO THE LIMITED
AVAILABILITY OF THE OFFERING. THESE SECURITIES CANNOT BE SOLD, TRANSFERRED
OR OTHERWISE DISPOSED OF TO ANY PERSON OR ENTITY UNLESS SUBSEQUENTLY
REGISTERED UNDER THE ACT OR THE LAWS OF THE STATE, IF SUCH REGISTRATION IS
REQUIRED.
FLORIDA LAW PROVIDES THAT WHEN SALES ARE MADE TO FIVE OR MORE PERSONS IN
FLORIDA, ANY SALE MADE IN FLORIDA IS VOIDABLE BY THE PURCHASER WITHIN
THREE (3) DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH
PURCHASER TO THE CORPORATION, AN AGENT OF THE CORPORATION OR AN ESCROW
AGENT OR WITHIN THREE DAYS AFTER THE AVAILABILITY OF THAT PRIVILEGE IS
COMMUNICATED TO SUCH PURCHASER, WHICHEVER OCCURS LATER. PAYMENTS FOR
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TERMINATED SUBSCRIPTIONS WILL BE PROMPTLY REFUNDED WITHOUT INTEREST. SUCH
WITHDRAWAL WILL BE WITHOUT ANY FURTHER LIABILITY TO ANY PERSON. TO
ACCOMPLISH SUCH WITHDRAWAL, AN INVESTOR NEED ONLY SEND A LETTER OR
TELEGRAM TO THE CORPORATION AT THE ADDRESS SHOWN HEREIN INDICATING HIS
INTENTION TO WITHDRAW. SUCH LETTER OR TELEGRAM MUST BE SENT AND POSTMARKED
PRIOR TO THE END OF THE AFOREMENTIONED THIRD BUSINESS DAY. IF SENDING A
LETTER, AN INVESTOR SHOULD SEND IT BY CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO ENSURE THAT IT IS RECEIVED AND TO EVIDENCE THE TIME WHEN IT
IS MAILED. ANY ORAL REQUESTS FOR RESCISSION SHOULD BE ACCOMPANIED BY A
REQUEST FOR WRITTEN CONFIRMATION THE ORAL REQUEST WAS RECEIVED ON A TIMELY
BASIS.
AS REQUIRED BY SECTION 517.061(11)(a)3, FLORIDA STATUTES, AND RULE 3E-5
00.05(5)(a) PROMULGATED THEREUNDER, PROSPECTIVE INVESTORS AND THEIR
PURCHASER REPRESENTATIVES MAY HAVE, AT THE OFFICES OF THE CORPORATION AT
ANY REASONABLE HOUR, AFTER REASONABLE PRIOR NOTICE, ACCESS TO THE
MATERIALS SET FORTH IN THE RULE, ANY OTHER MATERIALS RELATING TO THE
CORPORATION, THE OFFERING DESCRIBED IN THIS MEMORANDUM OR ANYTHING SET
FORTH IN THIS MEMORANDUM WHICH THE CORPORATION CAN OBTAIN WITHOUT
UNREASONABLE EFFORT OR EXPENSE. SEE, "ADDITIONAL INFORMATION".
NSAA NOTICE: IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON
THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING,
INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT
BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR
REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE
NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS
DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED
UNDER THE SECURITIES LAWS, PURSUANT TO REGISTRATION
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OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL BE
REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME.
IN WITNESS WHEREOF, I have executed this Agreement this ___day of
____,2004.
Witnesses:
________________________ ________________________
Subscriber
________________________
ACCEPTED:
DAC TECHNOLOGIES GROUP INTERNATIONAL, INC.
By:________________________
Principal Officer
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