NO.____________________
_______________________
NAME OF OFFEREE
UNIVERSAL DETECTION TECHNOLOGY
Offering of Units
$250,000 Minimum Offering Amount
$2,000,000 Maximum Offering Amount
SUBSCRIPTION AGREEMENT AND INVESTOR QUESTIONNAIRE
Placement Agent:
Xxxxxx Associates L.P.
00 Xxxxxxxx - 0xx Xxxxx
Xxx Xxxx, XX 00000
1
CONFIDENTIAL SUBSCRIPTION AGREEMENT AND QUESTIONNAIRE
This Subscription Agreement and Investor Questionnaire (the "SUBSCRIPTION
AGREEMENT") is to be completed by each person who desires to purchase the
securities of Universal Detection Technology (the "COMPANY"), in connection with
the proposed private placement of Units comprised of shares of common stock and
common stock purchase warrants (the "Offering"). This material does not
constitute an offer to sell or a solicitation of an offer to buy any securities.
This offering will be made solely pursuant to the terms and conditions of the
Confidential Private Memorandum dated April 29, 2004 (the "MEMORANDUM") which
contains material information required to be reviewed in connection with any
investment decision. ALL TERMS NOT DEFINED HEREIN SHALL HAVE THE MEANING
ASCRIBED TO THEM IN THE MEMORANDUM.
INSTRUCTIONS:
Items to be delivered by all Investors:
a. One (1) completed and executed Subscription Agreement.
b. One (1) completed and executed Selling Security Holder Questionnaire.
c. Payment in the amount of subscription, by wire transfer of funds or
check. All checks should be made payable to "SIGNATURE BANK AS ESCROW
AGENT FOR UNIVERSAL DETECTION TECHNOLOGY." Wire instructions are as
follows:
SIGNATURE BANK
000 XXXXXXX XXXXXX
XXX XXXX, XX 00000
ABA# 000000000
ACCOUNT# 1500517634
BENEFICIARY ACCOUNT NAME: SIGNATURE BANK AS ESCROW AGENT FOR UNIVERSAL
DETECTION TECHNOLOGY
For additional information call:
XXXXXX ASSOCIATES L.P.
00 XXXXXXXX - 0XX XXXXX
XXX XXXX, XXX XXXX 00000
Attn: Xxxxxx Xxxxxxx
Telephone: (000) 000-0000
THE INVESTOR IS RESPONSIBLE FOR ALL WIRE TRANSFER FEES IMPOSED BY THE INVESTOR'S
BANK.
2
The Units are being offered by the Company through Xxxxxx Associates L.P.
as placement agent (the "PLACEMENT AGENT"). The Units, as well as the specific
terms of the Offering, are described in the Memorandum, and are being offered
without registration under the Securities Act of 1933, as amended (the "ACT"),
or the securities laws of any state or any other jurisdiction, in reliance on
the exemption contained in Section 4(2) of the Act and/or Regulation D
promulgated thereunder and on similar exemptions under applicable state laws.
Under Regulation D of the Act, the Company is required to determine that an
individual, or each individual equity owner of an "investing entity" meets
certain suitability requirements before selling Units to such individual or
entity. You understand that the Company and the Placement Agent will rely upon
the following information to determine whether you meet these suitability
requirements.
The Company will not sell Units to any subscriber who has not filled out,
as thoroughly as possible, this Subscription Agreement and other required
documents referenced herein. If an investor is a partnership, trust, corporation
or other entity, an authorized officer, or general partner or each equity owner
or beneficiary, as applicable, must complete this Subscription Agreement. This
Subscription Agreement is merely a request for information and does not
constitute an offer to sell or a solicitation of an offer to buy the Units or
any other security of the Company. No sale will occur prior to the acceptance of
any subscription by the Company and the Placement Agent. Investors should also
understand that they may be required to furnish additional information to the
Company.
Your answers will be kept confidential. At all times, however, you hereby
agree that the Company may present this Subscription Agreement to such parties
as it deems appropriate in order to assure itself that the offer and the sale of
Units to you will not result in violations of federal or state securities laws
which are being relied upon by the Company in connection with the offer and sale
thereof and as otherwise required by law or any regulatory authority.
Please type or clearly print your answers, and state "none or "not
applicable" when appropriate. If there is insufficient space for any of your
answers, please attach additional pages. If the Units are to be owned by more
than one individual or by a corporation or partnership, you may need extra
copies of this Subscription Agreement. You may use photocopies or request extra
copies from the Company or the Placement Agent.
PLEASE CONTACT YOUR LAWYER, ACCOUNTANT, OR BROKER AT XXXXXX ASSOCIATES L.P. WITH
ANY QUESTIONS.
3
SECTION A. INVESTOR INFORMATION
A1. Name(s) of Investor(s): ___________________________________
___________________________________
___________________________________
A2. Principal Amount of Units
Subscribed for $___________________________________
(Minimum Subscription
is $25,000)
A3. Xxxxxx of Ownership of Securities.
_____ One Individual Please complete Section A, B and C.
_____ Husband and Wife Please have one spouse complete Sections
Tenants by the Entirety A, B and C. Please have both spouses
complete Section C.
_____ Tenants in Common Please have each individual separately
complete Sections A, B and C.
_____ Joint Tenants with Right Please have each individual separately complete
Right of Survivorship Sections A, B and C.
Two or more Individuals
(but not husband and wife)
_____ Corporate Ownership Please complete Section A, B, D and, if applicable,
E and F for the corporation. If the corporation
does not qualify as an "accredited investor" on its
own, please have each person who owns an equity
interest in the corporation separately complete
Sections B and, if applicable, C, D, E and F.
_____ Partnership or LLC Ownership Please complete Sections A, B and D, and have
each general partner and limited partner
separately complete Sections B, C, D, E
and F, if applicable.
_____ Trust Ownership Please complete Sections A, B and F, if applicable,
and have each beneficiary and trustee of the trust
separately complete Sections B, C, D, E and F, if
applicable.
4
NASD AFFILIATION. Please state whether you or any of your associates or
affiliates (which includes your spouse, in-laws and children or parents): (i)
are a member or a person associated (including as an employee, officer,
director, partner) with a member of the National Association of Securities
Dealers, Inc. (the "NASD"), (ii) are an owner of stock or other securities of an
NASD member, (iii) has made a subordinated loan to any NASD member, or (iv) or a
relative or member of the same household of any person meeting the description
set forth in clauses (i) through (iii) above.
------- -------
Yes No
If you marked yes above, please briefly describe the NASD relationship below:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
SECTION B. ACCREDITED INVESTOR STATUS AND PATRIOT ACT CERTIFICATIONS
B1. Please check one or more of the following definitions of "accredited
investor," if any, which applies to you. If none of the following
applies to you, please leave a blank.
_____(a) A Bank as defined in Section 3 (a) (2) of the Act, or any savings and
loan association or other institution as defined in Section 3 (a) (5)
(A) of the Act whether acting in its individual or fiduciary capacity;
_____(b) Any broker or dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934 (the "EXCHANGE ACT");
_____(c) An insurance company as defined in Section 2(13) of the Act;
_____(d) 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;
_____(e) Small Business Investment Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958;
5
_____(f) Plan established and maintained by a state, or its political
subdivisions, or any agency or instrumentality of a state or its
political subdivisions for the benefit of its employees, if such
plan has total assets in excess of $5,000,000;
_____(g) Any employee benefit plan within the meaning of Title I of the
Employee Retirement Income Security Act of 1974, as amended, if the
investment decision is made by a plan fiduciary, as defined in Section
3(21) of such Act, which is either a bank, savings and loan
association, insurance company, or registered investment advisor, or
if the employee benefit plan has total assets in excess of $5,000,000
or, if a self-directed plan, with investment decisions made solely by
persons that are Accredited Investors.
_____(h) A Private Business Development Company as defined in Section 202(a)
(22) of the Investment Advisers Act of 1940.
_____(i) An organization described in Section 501(c) (3) of the Internal
Revenue Code, Massachusetts or similar business trust, or partnership,
not formed for the specific purpose of acquiring the securities
offered, with total assets in excess of $5,000,000.
_____(j) A natural person whose individual net worth,* or joint net worth with
that person's spouse, at the time of purchase exceeds $1,000,000.
_____(k) A natural person who had an individual income** in excess of
$200,000 in each of the two most recent years or joint income
with that person's spouse in excess of $300,000 in each of those
years and has a reasonable expectation of reaching the same
income level in the current year.
_____(l) A trust, with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the Units, whose purchase is directed by
a sophisticated person as described in Rule 506(b) (2) (ii) of
Regulation D.
_____(m) Any entity in which all of the equity owners are Accredited Investors.
* For purposes hereof net worth shall be deemed to include ALL of your
assets, liquid or illiquid (including such items as home, furnishings,
automobile and restricted securities) MINUS any liabilities (including such
items as home mortgages and other debts and liabilities).
* For purposes hereof the term "income" is not limited to "adjusted gross
income" as that term is defined for federal income tax purposes, but rather
includes certain items of income which are deducted in computing "adjusted
gross income." For investors who are salaried employees, the gross salary
of such investor, minus any significant expenses personally incurred by
such investor in connection with earning the salary, plus any income from
any other source including unearned income, is a fair measure
6
of "income" for purposes hereof. For investors who are self-employed,
"income" is generally construed to mean total revenues received during the
calendar year minus significant expenses incurred in connection with
earning such revenues.
B2. U.S. Patriot Act Certifications
To induce the Company to accept the undersigned's investment, the undersigned
hereby makes the following representations, warranties and covenants to the
Company:
A. The undersigned represents and warrants that no holder of any beneficial
interest in the undersigned's equity securities of the Company (each a
"BENEFICIAL INTEREST Holder") and, no Related Person (in the case the
undersigned is an entity) is or will be:
1. A person or entity whose name appears on the list of specially
designated nationals and blocked persons maintained by the Office of
Foreign Asset Control from time to time;
2. A Foreign Shell Bank; or
3. A person or entity resident in or whose subscription funds are
transferred from or through an account in a Non-Cooperative
Jurisdiction.
B. The undersigned represents that the bank or other financial institution
(the "WIRING INSTITUTION") from which the undersigned's funds will be wired
is located in a FATF Country.
C. The undersigned represents that:
1. Neither it, any Beneficial Interest Holder nor any Related Person (in
the case of the undersigned is an entity) is a Senior Foreign
Political Figure, any member of a Senior Foreign Political Figure's
Immediate Family or any Close Associate of a Senior Foreign Political
Figure; or
2. Neither it, any Beneficial Interest Holder nor any Related Person (in
the case the undersigned is an entity) is resident in, or organized or
chartered under the laws of, a jurisdiction that has been designated
by the Secretary of the Treasury under Section 311 or 312 of the USA
PATRIOT Act as warranting special measures due to money laundering
concerns.
3. Its investment funds do not originate from, nor will they be routed
through, an account maintained at a Foreign Shell Bank, an "offshore
bank," or a bank organized or chartered under the laws of a
Non-Cooperative Jurisdiction.
D. For purposes of this SECTION B, the following definitions are applicable.
7
CLOSE ASSOCIATE: With respect to a Senior Foreign Political Figure, a person who
is widely and publicly known internationally to maintain an unusually close
relationship with the Senior Foreign Political Figure, and includes a person who
is in a position to conduct substantial domestic and international financial
transactions on behalf of the Senior Foreign Political Figure.
FATF: The Financial Action Task Force on Money Laundering.
FATF COUNTRY: A country that is a member of FATF. As of September 1, 2003, the
countries which are members of FATF are: Argentina; Australia; Austria; Belgium;
Brazil; Canada; Denmark; Finland; France; Germany; Greece; Hong Kong; Iceland;
Ireland; Italy; Japan; Luxembourg; Mexico; Kingdom of the Netherlands; New
Zealand; Norway; Portugal; Singapore; South Africa; Spain; Sweden; Switzerland;
Turkey; United Kingdom and United States. For a current list of FATF members see
xxxx://xxx0.xxxx.xxx/xxxx/Xxxxxxx_xx.xxx.
FOREIGN BANK: An organization that (i) is organized under the laws of a country
outside the United States; (ii) engages in the business of banking; (iii) is
recognized as a bank by the bank supervisory or monetary authority of the
country of its organization or principal banking operations; (iv) receives
deposits to a substantial extent in the regular course of its business; and (v)
has the power to accept demand deposits, but does not include the U.S. branches
or agencies of a foreign bank.
FOREIGN SHELL BANK: A Foreign Bank without a Physical Presence in any country,
but does not include a Regulated Affiliate.
GOVERNMENT ENTITY: Any government or any state, department or other political
subdivision thereof, or any governmental body, agency, authority or
instrumentality in any jurisdiction exercising executive, legislative,
regulatory or administrative functions of or pertaining to government.
IMMEDIATE FAMILY: With respect to a Senior Foreign Political Figure, typically
includes the political figure's parents, siblings, spouse, children and in-laws.
NON-COOPERATIVE JURISDICTION: Any foreign country or territory that has been
designated as non-cooperative with international anti-money laundering
principles or procedures by an intergovernmental group or organization, such as
FATF, of which the United States is a member and with which designation the
United States representative to the group or organization continues to concur.
See xxxx://xxx0.xxxx.xxx/xxxx/XXXX_xx.xxx for FATF's list of non-cooperative
countries and territories.
PHYSICAL PRESENCE: A place of business that is maintained by a Foreign Bank and
is located at a fixed address, other than solely a post office box or an
electronic address, in a country in which the Foreign Bank is authorized to
conduct banking activities, at which location the Foreign Bank: (a) employs one
or more individuals on a full-time basis; (b) maintains
8
operating records related to its banking activities; and (c) is subject to
inspection by the banking authority that licensed the Foreign Bank to conduct
banking activities.
PUBLICLY TRADED COMPANY: An entity whose securities are listed on a recognized
securities exchange or quoted on an automated quotation system in the U.S. or
country other than a Non-Cooperative Jurisdiction or a wholly-owned subsidiary
of such an entity.
REGULATED AFFILIATE: A Foreign Shell Bank that: (a) is an affiliate of a
depository institution, credit union, or Foreign Bank that maintains a Physical
Presence in the U.S. or a foreign country, as applicable; and (b) is subject to
supervision by a banking authority in the country regulating such affiliated
depository institution, credit union, or Foreign Bank.
RELATED PERSON: With respect to any entity, any interest holder, director,
senior officer, trustee, beneficiary or grantor of such entity; provided that in
the case of an entity that is a Publicly Traded Company or a Qualified Plan, the
term "Related Person" shall exclude any interest holder holding less than 5% of
any class of securities of such Publicly Traded Company and beneficiaries of
such Qualified Plan.
SENIOR FOREIGN POLITICAL FIGURE: A senior official in the executive,
legislative, administrative, military or judicial branches of a non-U.S.
government (whether elected or not), a senior official of a major non-U.S.
political party, or a senior executive of a non-U.S. government-owned
corporation. In addition, a Senior Foreign Political Figure includes any
corporation, business or other entity that has been formed by, or for the
benefit of, a Senior Foreign Political Figure.
USA PATRIOT ACT: The Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT Act) Act of 2001
(Pub. L. No. 107-56).
SECTION C. INDIVIDUAL INFORMATION
C1. General Information
Name:___________________________________________________________
Age:_______________ Social Security Number:_____________________
Marital Status:__________ Spouse's Name:________________________
If the Securities are to be owned by two or more individuals (not husband and
wife), are you related to any other co-owner(s)?
------- -------
Yes No
9
(If Yes, please state the name of the other person, the manner in which the
Securities should be issued and explain the relationship(s):
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
C2. Principal Residence
Address: _______________________________________________________
Number Street
_______________________________________________________
City State Zip Code
_______________________________________________________
Country
Mailing Address (if other than Principal Residence above):
_______________________________________________________
Number Street
_______________________________________________________
City State Zip Code
Telephone Number:
Facsimile Number:
C3. Current Employment or Business Activity:
Company Name:
Address: _______________________________________________________
Number Street
_______________________________________________________
City State Zip Code
Telephone Number:_______________________________________________________
Principal Business:_____________________________________________________
Position and Title:_____________________________________________________
10
C4. Net worth, inclusive of the net worth of your spouse and the value of your
principal residence, furnishings therein and personal automobile and other
assets (IT IS IMPORTANT THAT YOU CHECK THE HIGHEST APPLICABLE AMOUNT)
exclusive of any liabilities:
( ) below $249,999
( ) $250,000 to $349,999 ( ) $350,000 to $699,999
( ) $700,000 to $799,999 ( ) $800,000 to $1,000,000
( ) $1,000,000 to $1,249,999 ( ) over $1,250,000
C5. Net worth: Your net worth, inclusive of the net worth of your spouse and
excluding the value of your principal residence, furnishings therein and
personal automobiles and exclusive of any liabilities:
( ) below $249,999
( ) $250,000 to $349,999 ( ) $350,000 to $699,999
( ) $700,000 to $799,999 ( ) $800,000 to $1,000,000
( ) $1,000,000 to $1,249,999 ( ) over $1,250,000
C6. Indicate (a) your individual income from all sources for the calendar years
2002 and 2003 and estimated income for 2004 or (b) your joint income with
your spouse from all sources for the calendar years 2002 and 2003 and
estimated income for 2004 (it is important that you check the highest
applicable amount):
(a) individual income:
$200,000 $300,000 $400,000 $500,000
to to to and
$299,000 $399,000 $499,000 OVER
-------- -------- --------- ---------
2002 _________ _________ _________ _________
2003 _________ _________ _________ _________
2004 _________ _________ _________ _________
(b) joint income:
$200,000 $300,000 $400,000 $500,000
to to to and
$299,000 $399,000 $499,000 OVER
-------- -------- -------- ---------
2002 _________ _________ _________ _________
2003 _________ _________ _________ _________
2004 _________ _________ _________ _________
11
C7. Investment experience:
(a) The frequency with which you invest in marketable securities is:
( ) often ( ) occasionally ( ) never
(b) The frequency with which you invest in unmarketable securities (such as
private placement offerings) is:
( ) often ( ) occasionally ( ) never
(c) Have you previously participated in private placement offerings in the last
5 years?
------- -------
Yes No
(d) If you answered "yes" to (c) above state the private placements in which
you participated in the last 5 years.
Amount Name of
YEAR INVESTED ENTITY
---- -------- -------------
1998 $________ ______________
1999 $________ ______________
2001 $________ ______________
2002 $________ ______________
2003 $________ ______________
YOU MAY USE ADDITIONAL SHEETS IF NECESSARY
C8. (a) Have you been afforded an opportunity to investigate the Company and
review relevant factors and documents pertaining to the officers, directors
and the Company and its business and to ask questions of a qualified
representative of the Company regarding this investment and the properties,
operations, and methods of doing business of the Company?
------- -------
Yes No
12
(b) Do you understand the nature of an investment in the Company and the risk
associated with such an investment?
------- -------
Yes No
(c) Do you understand that there is no guarantee of any financial return on
this investment.
------- -------
Yes No
(d) Do you understand that this investment is not liquid?
------- -------
Yes No
(e) Do you have adequate means of providing for your current needs and personal
contingencies in view of the fact that this is not a liquid investment?
------- -------
Yes No
(f) Are you aware of the Company's business affairs and financial condition,
and have you acquired all such information about the Company as you deem
necessary and appropriate to enable you to reach an informed and
knowledgeable decision to acquire Units?
------- -------
Yes No
(g) Do you have a "pre-existing relationship" with the Company or any of its
officers, directors or controlling person?
------- -------
Yes No
(For purposes hereof, "Pre-existing relationship" means any relationship
consisting of person or business contacts of a nature and duration such as would
enable a reasonable prudent investor to be aware of the character, business
acumen, and general business and financial circumstances of the person with whom
such relations exists.)
13
If so, please name the individual or other person with whom you have a
pre-existing relationship and describe the relationship:
________________________________________________________________________________
________________________________________________________________________________
SECTION D. CORPORATE OFFEREES OR PARTNERSHIP OFFEREES
D1. General Information
Legal name of Corporation or Partnership:__________________________________
___________________________________________________________________________
___________________________________________________________________________
Fictitious name (d/b/a): __________________________________________________
State or Place of Incorporation: __________________________________________
Date of Incorporation:_____________________________________________________
If Partnership, type: ______ General ______ Limited
Federal Number: ___________________________________________________________
Fiscal Year Ends:__________________________________________________________
Number of Equity Owners:___________________________________________________
Name and Title of Authorized Person Executing Subscription Agreement: _____
D2. Business Address: _________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
14
Mailing Address (if different): ___________________________________________
___________________________________________________________________________
Telephone Number: ( )_______________ Facsimile Number: ( )_____________
D3. Name of Primary Bank:______________________________________________________
Address:___________________________________________________________________
Telephone Number: ( )_______________
Account Type and Number:___________________________________________________
Person Familiar with your Account:_________________________________________
Was the corporation or partnership formed for the specific purpose of
purchasing securities?
---------- ------------
Yes No
Check if applicable to the corporation:
Subchapter S________ Professional________
D4. The undersigned represents and warrants as follows:
(a) The corporation or partnership, as the case may be, has been duly
organized (if a partnership) is validly existing as a corporation or
partnership in good standing under the laws of the jurisdiction of its
incorporation or formation with full power and authority to enter into
the transactions contemplated by the Subscription Agreement;
(b) (i) The officers or partners of the undersigned who, on behalf of the
undersigned, have considered the purchase of the Securities and
the advisers, if any, of the corporation or the partnership, as
the case may be, in connection with such consideration are named
below in this Subscription Agreement, and such officers and
advisors or partners, if any, were duly authorized to act for the
corporation or the partnership in reviewing such investment;
(ii) The names and positions of the officers or partners, of the
undersigned who, on its behalf, have reviewed the purchase of the
Securities are as follows:
______________________________________________________
15
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
(iii) In evaluating the merits and risks of the purchase of the
Securities, the corporation or the partnership, as the case may
be, intends to rely upon the advice of, or will consult with, the
following persons:
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
(c) The officers of the corporation or the partners of the partnership
who, on its behalf, have considered the purchase of the Securities and
the advisors, if any, of the corporation or the partnership who, in
connection with such consideration, together have such knowledge and
experience in financial and business matters that such offering(s),
partner(s) and such advisor(s), if any, together are capable of
evaluating the merits and risks of the purchase of Securities and of
making an informed investment decision;
(d) Together with any corporation or group of corporations with which it
files a consolidated federal income tax return, the undersigned has
reserves and/or net worth adequate to permit it to satisfy any tax or
other liabilities arising from its personal liability with respect to
the investment and the operation thereof;
(e) The total assets of the corporation or the partnership are in excess
of $---------------;
(f) The corporation or the partnership has had, during each of the past
two years, gross income from all sources of at least $_______________
and $___________________ respectively;
(g) The undersigned expects the corporation or the partnership to have
during the current and the next tax year, gross income from all
sources of at least $______; and
16
(h) The undersigned knows of no pending or threatened litigation the
outcome of which could adversely affect the answer to any question
hereunder.
(i) Indicate the following if a partnership Investor:
(1) The date the partnership was formed and state of formation:
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
(2) The names of each partner in the partnership:
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
SECTION E. TRUST OFFEREES
E1. General Information
Legal Name:________________________________________________________________
State or Place of Formation:_______________________________________________
Date of Formation:_________________________________________________________
Federal I.D. Number:_____________________ Fiscal Year Ends:___________
Number of Beneficiaries:___________________________________________________
Principal Purpose:_________________________________________________________
Was the trust formed for the specific purpose of purchasing Units?
------ ------
Yes No
E2. Business Address:__________________________________________________________
Telephone Number: ( )_____________________________________________________
Facsimile Number: ( )_____________________________________________________
Mailing Address:___________________________________________________________
17
E3. Authorization:If the trust was established in connection with a deferred
compensation plan, please attach a copy of the trust's organizational
documents and a properly certified copy of the resolutions adopted by the
trust's board of directors authorizing the trust to purchase Units and
authorizing the trustee named below to execute on behalf of the trust all
relevant documents necessary to subscribe for and purchase Units. In all
cases, please attach a properly certified copy of the resolutions adopted
by the trustees of the trust authorizing the trust to purchase Units and
authorizing the trustee named below to execute on behalf of the trust all
relevant documents necessary to subscribe for an purchase Units.
Name of Trustee Authorized and Executing Subscription Agreement:
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
Telephone Number: ( )_____________________________________________________
Facsimile Number: ( )_____________________________________________________
Account Type and Number:___________________________________________________
Person Familiar with your Account:_________________________________________
SECTION F. QUALIFIED PENSION PLAN ("PLAN") OFFEREES
F1. Please check one:
_______________a. The Plan requires the investment of each beneficiary or
participant to be held in a segregated account and the Plan allows each
beneficiary or participant to make his own investment decisions and, the
decision to purchase the Note(s) has been made by the beneficiary or the
participant and such beneficiary or participant is an Accredited Investor
(Please have each such beneficiary or participant execute a separate
Subscription Agreement).
OR
_______________b. The investment decisions made for the Plan are made by a plan
fiduciary, whether a bank, an insurance company, or a registered investment
advisor.
OR
_______________c. The Plan has total assets exceeding $5,000,000.
18
F2. General Information
Legal Name_________________________________________________________________
State or Place of Formation:_______________________________________________
Date of Formation:_________________________________________________________
Federal I.D. Number:______________ Fiscal Year Ends:_______________________
Number of Beneficiaries:___________________________________________________
Principal Purpose:_________________________________________________________
Business Address:__________________________________________________________
Telephone Number:( )____________________
Facsimile Number:( )____________________
Mailing Address:___________________________________________________________
F3. Authorization:If the investment decision is being made by a beneficiary or
participant of a Plan, please attach applicable trust documents which
permit each beneficiary or participant to make his own investment
decisions. In all other cases, please attach a properly certified copy of
the resolutions adopted by the trustees of the Plan trust authorizing the
Plan to purchase Units and authorizing the fiduciary named below to execute
on behalf of the Plan all relevant documents necessary to subscribe for and
purchase Units.
Name of Trustee Authorized and Executing Subscription Agreement:
___________________________________________________________________________
19
REPRESENTATIONS, WARRANTIES, AND COVENANTS BY ALL INVESTORS
By signing this Subscription Agreement, the undersigned hereby confirms the
following statements and make the following covenants:
(a) I have read the Memorandum and this Subscription Agreement and other
accompanying documents of the Company. I understand and confirm that the
Memorandum is confidential, may contain non public information and that I
shall not use the information contained therein for any use in connection
with the purchase or sale of securities of the Company except as a
subscriber in the Offering. Any such use for any other purpose may subject
the subscriber to civil or criminal liability under the securities laws.
(b) I acknowledge that any delivery to me of the Memorandum relating to the
Securities prior to the determination by the Company of my suitability as
an investor shall not constitute an offer of Securities until such
determination of suitability shall be made, and I agree that I shall
promptly return the Memorandum and the other Offering Documents (as defined
therein) to the Company upon request.
(c) My answers to the foregoing questions are true and complete to the best of
my information and belief and I will promptly notify the Company of any
changes in the information I have provided.
(d) I also understand and agree that, although the Company and the Placement
Agent will use their respective best efforts to keep the information
provided in answers to this Subscription Agreement strictly confidential,
the Company and the Placement Agent or their respective counsel may present
this Subscription Agreement and the information provided in answer to it to
such parties as they may deem advisable if called upon to establish the
availability under any federal or state securities laws of an exemption
from registration of the private placement or if the contents thereof are
relevant to any issue in any action, suit or proceeding to which the
Company, the Placement Agent or their respective affiliates is a party, or
by which they are or may be bound or as otherwise required by law or
regulatory authority. Notwithstanding the foregoing, in compliance with the
rules and regulations of the Internal Revenue Service:
YOU AND EACH OTHER PARTY TO THE TRANSACTION (AND EACH AFFILIATE AND PERSON
ACTING ON BEHALF OF ANY SUCH PARTY) DESCRIBED HEREIN AND IN THE MEMORANDUM AGREE
THAT EACH PARTY (AND EACH EMPLOYEE, REPRESENTATIVE, AND OTHER AGENT OF SUCH
PARTY) MAY DISCLOSE TO ANY AND ALL PERSONS, WITHOUT LIMITATION OF ANY KIND, THE
TAX TREATMENT AND TAX STRUCTURE OF THE TRANSACTION AND ALL MATERIALS OF ANY KIND
(INCLUDING OPINIONS OR OTHER TAX ANALYSES) THAT ARE PROVIDED TO SUCH PARTY OR
SUCH PERSON RELATING TO SUCH TAX TREATMENT AND TAX STRUCTURE, EXCEPT TO THE
EXTENT NECESSARY TO COMPLY WITH ANY APPLICABLE FEDERAL OR STATE SECURITIES LAWS.
THIS AUTHORIZATION IS NOT INTENDED TO PERMIT DISCLOSURE OF ANY OTHER INFORMATION
INCLUDING (WITHOUT LIMITATION) (I) ANY PORTION OF ANY MATERIALS TO THE EXTENT
NOT RELATED TO THE TAX TREATMENT OR TAX STRUCTURE OF THE TRANSACTION, (II) THE
IDENTITIES OF PARTICIPANTS OR POTENTIAL PARTICIPANTS IN THE TRANSACTION, (III)
THE EXISTENCE OR STATUS OF ANY NEGOTIATIONS, (IV) ANY PRICING OR FINANCIAL
INFORMATION (EXCEPT TO THE EXTENT SUCH PRICING OR FINANCIAL INFORMATION IS
RELATED TO THE TAX TREATMENT OR TAX STRUCTURE OF THE TRANSACTION), OR (V) ANY
OTHER TERM OR DETAIL NOT RELEVANT TO THE TAX TREATMENT OR THE TAX STRUCTURE OF
THE TRANSACTION.
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(e) I realize that this Subscription Agreement does not constitute an offer to
sell or a solicitation of an offer to buy Securities or any other security
of the Company but is merely a request for information.
(f) I understand that the Securities are being offered without registration
under the Securities Act in reliance upon the private offering exemption
contained therein, and that such reliance is based in part on the
information herein supplied.
(g) The individual signing below on behalf of any entity hereby warrants and
represents that he/she is authorized to execute this Subscription Agreement
on behalf of such entity.
(h) The undersigned is able to bear the economic risk of the investment and can
afford a complete loss of such investment.
(i) The Investor acknowledges and agrees that all subscription amounts will be
placed in a non-interest bearing special account pending acceptance by the
Company and the Placement Agent. The Offering is being made on a "best
efforts all or none" basis as to the minimum offering amount ($250,000) and
on a "best efforts" basis as to the additional offering amount
($1,750,000). An initial closing will be held as soon as practicable
following receipt and acceptance of the minimum offering amount and
thereafter from time to time.
(j) In entering into this Agreement and in purchasing the Securities, the
Investor further acknowledges that:
(i) The Company has informed the Investor that the Securities have not
been offered for sale by means of general advertising or solicitation.
(ii) The Securities may not be resold by the Investor in the absence of a
registration under the Act or exemption from registration. The
Investor (i) is acquiring the Securities solely for the Investors own
account for investment purposes solely and not with a view toward
resale or distribution, either in whole or in part; (ii) has no
contract, undertaking, agreement or other arrangement, in existence or
contemplated, to sell, pledge, assign or otherwise transfer the
Securities to any other person; and (iii) agrees not to sell or
otherwise transfer the Investors Securities unless and until they are
subsequently registered under the Securities Act and any applicable
state securities laws or unless an exemption from any such
registration is
21
available. In particular, the Investor is aware that the Securities
will be "restricted securities", as such term is defined in Rule 144
promulgated under the Securities Act ("RULE 144"), and they may not be
sold pursuant to Rule 144, unless the conditions thereof are met.
(iii) The following legend (or similar language) shall be placed on the
certificate(s) evidencing the Securities:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended ("Act"),
and may not be offered or sold except (i) pursuant to an
effective registration statement under the Act or (ii) upon the
delivery by the Investor to the Company of an opinion of counsel,
reasonably satisfactory to counsel to the Company, stating that
an exemption from registration under such Act is available."
(iv) The Company may at any time place a stop transfer order on its
transfer books against the Securities. Such stop order will be
removed, and further transfer of the Securities will be permitted upon
an effective registration of the respective Securities, or the receipt
by the Company of an opinion of counsel satisfactory to the Company
that such further transfer may be effected pursuant to an applicable
exemption from registration.
(v) The purchase of the Securities involves risks which the Investor has
evaluated, and the Investor is able to bear the economic risk of the
purchase of such securities and the loss of its entire investment.
(vi) The Investor shall be entitled to the registration rights as set forth
in the Registration Rights Agreement appended as an Exhibit to the
Memorandum. The undersigned has read the Registration Rights
Agreement, understands the terms thereof and hereby appoints Xxxxxx
Associates, L.P. as its agent to execute the Registration Rights
Agreement on behalf of the undersigned.
22
MISCELLANEOUS
The Investor agrees to indemnify and hold harmless the Company, the
officers, directors, employees, agents, counsel and affiliates of the Company,
and each other person, if any, who controls the Company, within the meaning of
Section 15 of the Act or Section 20 of the Securities and Exchange Act of 1934,
as amended, against any and all losses, liabilities, claims, damages and all
expenses reasonably incurred in investigating, preparing or defending against
any litigation commenced or threatened or any claim whatsoever arising out of or
based upon any false representation or warranty or breach or failure by the
Investor to comply with any covenant or agreement made by the Investor herein or
in any other document furnished by the Investor to any of the foregoing in
connection with this transaction.
The Investor hereby acknowledges and agrees, subject to any applicable
state securities laws that the subscription and application hereunder are
irrevocable, that the Investor is not entitled to cancel, terminate or revoke
this Subscription Agreement and that this Subscription Agreement shall survive
the death or disability of the Investor and shall be binding upon and inure to
the benefit of the Investor and his heirs, executors, administrators,
successors, legal representatives, and assigns. If the Investor is more than one
person, the obligations of the Investor hereunder shall be joint and several,
and the agreements, representations, warranties, and acknowledgments herein
contained shall be deemed to be made by and be binding upon each such person and
his heirs, executors, administrators, successors, legal representatives, and
assigns
This Agreement shall be governed, construed and interpreted by and under
the laws of the State of New York. If any provision included in this Agreement
proves to be invalid or unenforceable, it shall not affect the validity of the
remaining provisions.
This Agreement may be executed in several counterparts or by separate
instruments and all of such counterparts and instruments shall constitute one
agreement, binding on all of the parties hereto.
CONFIDENTIAL INFORMATION
We have provided to you certain information about the Company that may be
non-public, confidential or proprietary in nature (the "CONFIDENTIAL
INFORMATION"). You agree that the Confidential Information will be used solely
in connection with your potential participation in the proposed Offering. You
agree that you will keep the Confidential Information confidential except that
you may disclose such Confidential Information to your directors, officers,
employees, limited partners, affiliates and advisors who need to know the
Confidential Information in connection with your potential participation in the
Offering, and who are informed by you of the confidential nature of the
Confidential Information and are required by you to treat the Confidential
Information confidentially.
23
The term Confidential Information shall not include portions of the
Confidential Information which (i) are or become generally available to the
public, other than as a result of a disclosure by you, your directors, officers,
employees, limited partners, affiliates or advisors, or (ii) become available to
you on a non-confidential basis from a source other than the Company or its
agents or advisors, and which source is not prohibited from disclosing such
Confidential Information to you by a legal, contractual, or fiduciary obligation
to the Company.
Nothing contained herein shall be deemed to prevent the disclosure of any
Confidential Information if, in the written opinion of your counsel, such
disclosure is legally required to be made in a judicial, administrative or
governmental proceeding; PROVIDED, HOWEVER, that in making such disclosure you
will take all reasonable efforts to preserve the confidentiality of the
Confidential Information.
By signing this Subscription Agreement, you are expressly agreeing to the
foregoing in connection with the treatment of Confidential Information.
24
I understand that I am purchasing the Units without being furnished any
Offering literature or prospectus other than the Memorandum. In making my
decision to invest in the Units I have relied on the information set forth in
the Memorandum and upon no other representations or promises, written or verbal.
Dated: _____________, 2004 FOR INDIVIDUALS
__________________________________
(Print Name)
__________________________________
(Signature)
25
The undersigned understands that it is purchasing the Units without being
furnished any Offering literature or prospectus other than the Memorandum. In
making its decision to invest in the Units, the undersigned has relied on the
information set forth in the Memorandum and upon no other representations or
promises, written or verbal.
Dated:_____________________, 2004 FOR CORPORATIONS:
______________________________
Name of Company
______________________________
Executive Officer of Company
______________________________
Signature of Officer
26
The undersigned understands that it is purchasing the Units without being
furnished any Offering literature or prospectus other than the Memorandum. In
making its decision to invest in the Units, the undersigned has relied on the
information set forth in the Memorandum and upon no other representations or
promises, written or verbal.
Dated:_____________________, 2004 FOR PARTNERSHIPS:
_______________________________
Name of Partnership
_______________________________
Name of Authorized Partner
_______________________________
Signature of Authorized Partner
27
The undersigned understands that it is purchasing the Units without being
furnished any Offering literature or prospectus other than the Memorandum. In
making its decision to invest in the Units, the undersigned has relied on the
information set forth in the Memorandum and upon no other representations or
promises, written or verbal.
Dated:_____________________, 2004
FOR TRUSTS:
Name of Trust
Name of Authorized Trustee
________________________________
Signature of Authorized Trustee
28
ACCEPTANCE OF SUBSCRIPTION BY THE COMPANY
Universal Detection Technology hereby accepts the Subscription Agreement
represented hereby as of the date stated below and agrees, subject to the terms
and conditions hereof and on the basis of the representations and warranties
made herein, to issue and sell to the Investor, upon Closing, the Securities as
described in the Memorandum at a price per Unit as described in the Memorandum.
Dated:________________, 2004 UNIVERSAL DETECTION TECHNOLOGY
__________________________________
Name: Xxxxxxx Xxxxxx
Title: Chief Executive Officer
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