AQUACELL TECHNOLOGIES, INC.
SUBSCRIPTION AGREEMENT
INSTRUCTIONS
------------
IMPORTANT: PLEASE READ CAREFULLY BEFORE SIGNING.
SIGNIFICANT REPRESENTATIONS ARE CONTAINED IN THIS DOCUMENT.
1. Fill in your name and amount of investment on Page 1.
2. Individual Investors must complete the requested
information on pages 13 and 14 and sign the signature
page on Page 14.
3. Entity Investors must complete the requested
information on pages 15 and 16, and if applicable, page
17 and sign the signature page on page 16 and if
applicable, page 17.
DELIVER THE EXECUTED AGREEMENTS TO:
AQUACELL TECHNOLOGIES, INC.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇ ▇▇▇▇▇
ALONG WITH PAYMENT FOR THE COMMON STOCK
AND WARRANTS SUBSCRIBED FOR
If you are tendering a check, make it payable to "AquaCell
Special Account." If you are paying by wire transfer, please
contact ▇▇▇▇ ▇▇▇▇▇ for instructions at (▇▇▇) ▇▇▇-▇▇▇▇.
If you have any questions regarding this form, please
contact ▇▇▇▇ ▇▇▇▇▇ for instructions at (▇▇▇) ▇▇▇-▇▇▇▇.
Print Name of Subscriber __________________
Amount of Investment __________________
SUBSCRIPTION AGREEMENT
AquaCell Technologies, Inc. ("Company") and the Investor
hereby agree as follows:
1. Subscription for Securities. I (sometimes referred to
herein as the "Investor") hereby subscribe for and agree to
purchase the number of shares of Common Stock ("Stock") and
warrants ("Warrants") to purchase shares of common stock, par
value $.001 per share ("Common Stock") of the Company set forth
on the signature page hereto upon the terms and conditions
described in this Agreement. The purchase price per share of the
Stock and Warrant will be equal to $1.15. The exercise price of
the Warrants will be $1.90.
2. Offering Period. The Stock and Warrants will be offered for
sale until April 16, 2004 (Referred to as the "Termination
Date").
3. Investor Delivery of Documents and Payment. I hereby tender
to the Company (i) the full purchase price of the Stock and
Warrants I am purchasing by check or wire and (ii) one manually
executed copy of this Subscription Agreement. If the Company
does not receive and accept my subscription by the Termination
Date, my payment will be returned to me without interest or
deduction.
4. Offering to Accredited Investors. This offering is limited
to accredited investors as defined in Section 2(15) of the
Securities Act of 1933, as amended ("Securities Act"), and Rule
501 promulgated thereunder, and is being made without
registration under the Securities Act in reliance upon the
exemptions contained in Sections 3(b), 4(2) and/or 4(6) of the
Securities Act and applicable state securities laws. As
indicated by the responses on the signature page hereof, the
Investor is an accredited investor within the meaning of Section
2(15) of the Securities Act and Rule 501 promulgated thereunder.
5. Closing and Delivery of Securities. The offering is being
made on a "best efforts" basis. Accordingly, there is no minimum
amount of Stock and Warrants that must be subscribed for in order
for the Company to hold a closing ("Closing") with respect to the
Stock and Warrants that are subscribed and paid for. The Company
will hold only one Closing on April 16, 2004. Once my
subscription is received and there is a Closing, my payment will
be released to the Company and the certificates representing the
shares of Stock and Warrants will be delivered promptly to me
along with a copy of a fully executed version of this Agreement.
1
6. Representations and Warranties of the Company. The Company
hereby represents and warrants to the Investor as follows:
6.1. Due Incorporation and Qualification. The Company has
been duly incorporated, is validly existing and is in good
standing under the laws of its state of incorporation and is
duly qualified as a foreign corporation for the transaction
of business and is in good standing in each jurisdiction in which
the ownership or leasing of its properties or the conduct of its
business requires such qualification, except where the failure to
so qualify would not have a material adverse effect on the
business, operations, assets, financial condition or prospects of
the Company ("Material Adverse Effect"). The Company has all
requisite corporate power and authority necessary to own or hold
its properties and conduct its business.
6.2. Authorized Capital; Outstanding Securities. As of the
date hereof, the Company's capitalization is as described in the
Offering Summary. As more fully described in its SEC filings,
the Company has other outstanding options, warrants and
convertible securities. As of the date of Closing, there will be
no other securities of the Company outstanding, except for (i)
stock options granted to employees since the date hereof in the
ordinary course with exercise prices no less than fair market
value on the date of grant, and (ii) additional Common Stock
issued upon conversion or exercise of such outstanding options,
warrants and convertible securities. All of the issued and
outstanding shares of Common Stock have been duly and validly
authorized and issued and are fully paid and non-assessable. The
offers and sales of all securities of the Company within the last
three years were at all relevant times either registered under
the Securities Act and the applicable state securities or Blue
Sky laws or exempt from such registration.
6.3. No Preemptive Rights; Registration Rights. Except as
set forth in the Offering Summary, there are no preemptive or
other rights to subscribe for or purchase, or any restriction
upon the voting or transfer of, any shares of Common Stock or
other securities of the Company, under the Certificate of
Incorporation or By-Laws of the Company or under any agreement or
other outstanding instrument to which the Company is a party or
by which it is bound. The Company has reserved for issuance a
sufficient number of shares of Common Stock to be issued to the
Subscribers upon the exercise of the Warrants.
6.4. Financial Statements. The financial statements of the
Company filed as part of its Form 10-KSB and Forms 10-QSB fairly
present the financial position and results of operations of the
Company at the dates thereof and for the periods covered thereby,
subject, in the case of interim periods, to year-end adjustments
and normal recurring accruals. The Company has no material
liabilities or obligations, contingent, direct, indirect or
otherwise except (i) as set forth in the latest balance sheet
included in the Financials or the footnotes thereto (the date of
such balance sheet being referred to as the "Balance Sheet
Date"), and (ii) those incurred in the ordinary course of
business since the Balance Sheet Date.
6.5. No Material Adverse Changes. There has not been any
material adverse change in the condition, financial or otherwise,
of the Company since the filing of its last Form 10-QSB.
6.6. No Pending Actions. There are no actions, suits,
proceedings, claims or hearings of any kind or nature existing or
pending (or, to the best knowledge of the Company, threatened)
or, to the best knowledge of the Company, any investigations or
inquiries, before or by any court, or other governmental
authority, tribunal or instrumentality (or, to the Company's best
knowledge, any state of facts that would give rise thereto),
pending or threatened against the Company, or involving the
properties of the Company, that might result in any Material
Adverse Effect or that might adversely affect the transactions or
other acts contemplated by this Agreement or the validity or
enforceability of this Agreement.
2
6.7. Private Offering Exemption; Offering Documents. The
Offering Summary does not contain any untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading. The Common Stock and Warrants conform in all
material respects to the descriptions thereof contained in the
Offering Summary. Assuming that (i) a proper Form D is filed in
accordance with Rule 503 of Reg D, (ii) the offer and the sale of
the Common Stock and Warrants was made in compliance with Rule
502(c) of Reg D and/or Section 4(2) of the Securities Act, and
(iii) the representations of the Subscribers in the Subscription
Agreements signed by them are true and correct (which facts will
not be independently verified by the Company), the sale of Common
Stock and Warrants in the Offering is exempt from registration
under the Securities Act and is in compliance with Reg D.
6.8. Due Authorization. The Company has full right, power
and authority to enter into this Subscription Agreement, to issue
the Common Stock and Warrants, and to perform all of its
obligations hereunder and thereunder. This Subscription
Agreement, Common Stock, Warrants, and the shares of Common Stock
issuable upon exercise of the Warrants (the "Underlying Common
Stock"), when executed and delivered, will have been, duly
authorized by all necessary corporate action and no further
corporate action or approval is or will be required for their
respective execution, delivery and performance. This Subscription
Agreement, Common Stock and Warrants, upon execution and delivery
will constitute, valid and binding obligations of the Company,
enforceable in accordance with their respective terms, except (i)
as the enforceability thereof may be limited by bankruptcy or
other laws now or hereafter in effect relating to or affecting
creditors' rights generally, (ii) that the remedy of specific
performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and to the discretion of the
court before which any proceedings therefore may be brought and
(iii) that the enforceability of the indemnification and
contribution provisions of the respective agreements may be
limited by the federal and state securities laws and public
policy.
6.9. Non-Contravention; Consents. The Company's execution
and delivery of the Subscription Agreement and the incurrence of
the obligations herein set forth, and the consummation of the
transactions contemplated herein will not (i) conflict with, or
constitute a breach of, or a default under, the certificate of
incorporation or by-laws of the Company, or any contract, lease
or other agreement or instrument to which the Company is a party
or in which the Company has a beneficial interest or by which the
Company is bound; (ii) violate any existing applicable law, rule,
regulation, judgment, order or decree of any governmental agency
or court, domestic or foreign, having jurisdiction over the
Company or any of its properties or business (collectively,
"Laws"), except where such violation(s) would not, singly or in
the aggregate, result in a Material Adverse Effect; or (iii) have
any effect on any permit, certification, registration, approval,
consent, license or franchise (collectively, "Permits") necessary
for the Company to own or lease and operate any of its properties
or to conduct its business, except for such effects as would not,
singly or in the aggregate, have a Material Adverse Effect. No
consent, permit, approval, authorization, order of, or filing
with, any court or governmental authority or any other third
party is required to consummate the transactions contemplated by
this Subscription Agreement, except that the offer and sale of
such securities in certain jurisdictions may be subject to the
provisions of the securities or Blue Sky laws of such
jurisdictions.
3
6.10. Valid Issuances. The Common Stock and Warrants, when
issued and delivered in accordance with the terms of this
Subscription Agreement, will be duly and validly issued. The
shares of Common Stock issuable upon exercise of the Warrants
have been duly and validly authorized and, when issued and
delivered in accordance with the terms of this Agreement, the
Common Stock and the Warrants will be duly and validly issued,
fully paid and non-assessable. The holders of the Common Stock
and Warrants will not be subject to personal liability by reason
of being such holders and will not be subject to the preemptive
rights of any holders of any security of the Company or similar
contractual rights granted by the Company.
6.11. No Right to Purchase. The issuance of the Common
Stock, Warrants or Underlying Common Stock in the Offering will
not give any holder of any of the Company's outstanding shares of
Common Stock, options, warrants or other convertible securities
or rights to purchase securities of the Company (i) the right to
purchase any additional shares of Common Stock or any other
securities of the Company, or (ii) the right to purchase any
securities at a reduced price.
6.12. Material Contracts; No Defaults. The exhibit index set
forth in the Company's Annual Report on Form 10-KSB for the
fiscal year ended June 30, 2003 as it may have been updated with
subsequent filings by the Company with the Commission, contains a
true and complete list of all material contracts, agreements,
instruments, indentures, mortgages, loans, leases, licenses,
arrangements or undertakings of any nature, of the Company that
are required to be filed with the Commission (collectively,
"Contracts"). Each of the Contracts is in full force and effect,
the Company has performed in all material respects all of its
obligations thereunder and is not in default thereunder, and no
party to a Contract has made a claim to the effect that the
Company has failed to perform any obligations thereunder. To the
knowledge of the Company, there is no plan, intention, or
indication of any contracting party to a Contract to cause
termination, cancellation or modification of such Contract or to
reduce or otherwise change its activity thereunder so as to
adversely affect in any material respect the benefits derived or
expected to be derived therefrom by the Company. The Company
does not know of the occurrence of any event or the existence of
any state of facts that with notice or the passage of time or
both could cause it to be in default.
6.13. Conduct of Business; Compliance with Law. The Company
has all requisite corporate power and authority, and has all
necessary Permits, to own or lease its properties and conduct its
business, except where the failure to have such Permits would not
have a Material Adverse Effect. The Company is not in violation
of, and has been operating its business in compliance with all
such Permits, except where such noncompliance would not have a
Material Adverse Effect. The Company is in compliance with all
Laws, except where noncompliance, singly or in the aggregate,
would not have a Material Adverse Effect. The Company is not in
violation of any term or provision of its certificate of
incorporation or by-laws.
6.14. Title to Property; Insurance. The Company has good and
marketable title to, or valid and enforceable leasehold estates
in, all items of real and personal property (tangible and
intangible) owned or leased by it, free and clear of all liens,
encumbrances, claims, security interests, defects and
restrictions of any material nature whatsoever, except such as
would not, singly or in the aggregate, have a Material Adverse
Effect. The Company has adequately insured its properties
against loss or damage by fire or other casualty and maintains
such insurance in adequate amounts.
4
6.15. Intangibles. The Company owns or possesses the
requisite licenses or rights to use all trademarks, service
marks, service names, trade names, patents and patent
applications, copyrights and other rights (collectively,
"Intangibles") used by the Company in its business or relating to
products or services of the Company. The Company's Intangibles
that have been registered in the United States Patent and
Trademark Office have been fully maintained and are in full force
and effect. To the best of the Company's knowledge, the
Intangibles and the Company's current products, services and
processes do not infringe on any intangibles held by any third
party. To the best of the Company's knowledge, no others have
infringed upon the Intangibles of the Company.
6.16. Employee Matters. The Company has generally enjoyed a
satisfactory employer-employee relationship with its employees
and is in compliance in all material respects with all federal,
state and local laws and regulations respecting the employment of
its employees and employment practices, terms and conditions of
employment and wages and hours relating thereto. There are no
pending investigations involving the Company by any government
Department of Labor or any other governmental agency responsible
for the enforcement of employment laws and regulations. There is
no unfair labor practice charge or complaint against the Company
pending before a Labor Relations Board or any strike, picketing,
boycott, dispute, slowdown or stoppage pending or threatened
against or involving the Company or any predecessor entity. No
questions concerning representation exist respecting the
employees of the Company and no collective bargaining agreement
or modification thereof is currently being negotiated by the
Company. No grievance or arbitration proceeding is pending under
any expired or existing collective bargaining agreements of the
Company, if any.
6.17. Subsidiaries Included in Representations and
Warranties. The representations and warranties made by the
Company in this Agreement shall also apply and be true with
respect to each subsidiary, individually and taken as a whole
with the Company and all other subsidiaries, as if each
representation and warranty contained herein made specific
reference to the subsidiary each time the term "Company" was
used, except as the context of the representation of warranty
clearly indicates otherwise.
7. Registration Rights.
7.1. Filing of Registration Statement. The Company will, not
later than May 10, 2004, file a registration statement with
the SEC providing for the resale of the common shares and the
common shares underlying the warrants. The Company will use its
best efforts to have the registration declared effective and to
cause the registration to remain effective until the shares are
eligible for sale under Rule 144(k). If the registration
statement is not declared effective within 90 days of the closing
of this offering the Company will pay to investors a cash penalty
of 1% per month of delay.
7.2. Procedures. The Company will promptly give written
notice of such proposed registration to all holders ("Holders")
of Stock and Warrants and will forward a selling stockholder
questionnaire to each Holder that must be completed by the Holder
and returned to the Company in order for the Underlying Common
Stock to be included in the registration statement.
5
7.3. Effective and Current. The Company will use its
reasonable commercial efforts to keep the registration statement
which registers the Underlying Common Stock pursuant hereto
effective and the related prospectus current until the earlier of
the date by which all of the registered Underlying Common Stock
has been sold and the date that the Underlying Common Stock may
be sold pursuant to Rule 144(k) promulgated under the Securities
Act.
7.4. Amended Prospectus. The Company will notify each Holder
of such Underlying Common Stock as expeditiously as possible
following the effectiveness of such registration statement, of
any request by the Commission for the amending or supplementing
of such registration statement or prospectus. If the prospectus
is amended to comply with the requirements of the Securities Act,
the Holders, if notified by the Company, will immediately cease
making offers of the Underlying Common Stock and return all
prospectuses to the Company and the Company will promptly provide
the Holders with revised prospectuses to enable the Holders to
resume making offers of the Underlying Common Stock. The Company
will promptly notify the Holders, if after delivery of a
prospectus to the Holders, that, in the judgment of the Company,
it is advisable to suspend use of the prospectus delivered to the
Holders due to pending material developments or other events that
have not yet been publicly disclosed and as to which the Company
believes public disclosure would be detrimental to the Company.
Upon receipt of such notice, each such Holder will immediately
discontinue any sales of Underlying Common Stock pursuant to such
registration statement until such Holder has received copies of a
supplemented or amended prospectus or until such Holder is
advised in writing by the Company that the then current
prospectus may be used and has received copies of any additional
or supplemental filings that are incorporated or deemed
incorporated by reference in such prospectus.
7.5. Covenants. After the filing of the registration
statement, the Company will:
(a) as expeditiously as possible furnish to each Holder
such reasonable numbers of copies of the prospectus in conformity
with the requirements of the Securities Act, and such other
documents as such Holder may reasonably request in order to
facilitate the public sale or other disposition of the Underlying
Common Stock owned by such Holder; and
(b) as expeditiously as possible, notify each Holder,
promptly after it receives notice thereof, of the time when such
registration statement has become effective or a supplement to
any prospectus forming a part of such registration statement has
been filed.
7.6. Fees and Expenses. In any registration statement in
which Underlying Common Stock are included, the Company will bear
all expenses and pay all fees incurred in connection therewith,
excluding underwriting discounts and commissions payable with
respect to the Underlying Common Stock, but including the
expenses of providing a reasonable number of copies of the
prospectus contained therein to the Holders.
6
7.7. Indemnification.
(a) The Company will indemnify the Holders of the
Underlying Common Stock to be sold pursuant to any registration
statement hereunder, the officers and directors of each Holder,
each underwriter of such Underlying Common Stock and each person,
if any, who controls such Holders or underwriters within the
meaning of Section 15 of the Securities Act or Section 20(a)
of the Securities Exchange Act of 1934, as amended ("Exchange
Act"), or any state securities law or regulation, against all
loss, claim, damage, expense or liability (including all
reasonable attorneys' fees and other expenses reasonably incurred
in investigating, preparing or defending against any claim
whatsoever incurred by the indemnified party in any action or
proceeding between (A) the indemnified party and any third party
or otherwise or (B) the indemnitor and the indemnified party
only with respect to an action or proceeding to enforce the
indemnification provisions of this Section 7.7(a) to which any of
them may become subject under the Securities Act, the Exchange
Act or any other statute or at common law or otherwise under the
laws of any of the United States or foreign countries,
arising from such registration statement or based upon any
untrue statement or alleged untrue statement of a material fact
contained in (x) any preliminary prospectus, the registration
statement or prospectus (as from time to time each may be
amended and supplemented); (y) any post-effective amendment or
amendments or any new registration statement and prospectus
in which is included the Underlying Common Stock; or (z) any
application or other document or written communication
(collectively called "application") executed by the
Company or based upon written information furnished by the
Company in any jurisdiction in order to qualify the Underlying
Common Stock under the securities laws thereof or filed with the
Commission, any state securities commission or agency, Nasdaq or
any securities exchange; or the omission or alleged omission
therefrom of a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, unless
such statement or omission is made in reliance upon, and in
conformity with, written information furnished to the Company by
and with respect to such registered holders ("Purchaser
Information") expressly for use in any preliminary prospectus,
the registration statement or prospectus, or any amendment or
supplement thereof, or in any application, as the case may be, or
unless the indemnities failed to deliver a final prospectus in
which the material misstatement or omission was corrected.
Subject to the foregoing provisions of this paragraph, the
Company will reimburse such Holder, underwriter and each such
controlling person for any legal or any other expenses reasonably
incurred by such Holder, underwriter or controlling person in
connection with investigating or defending any such loss, claim,
damage, liability or action. The Company agrees promptly to
notify such Holders of the commencement of any litigation or
proceedings against the Company or any of its officers, directors
or controlling persons in connection with the issue and sale or
resale of the Underlying Common Stock or in connection with the
registration statement or prospectus.
(b) The Holders agree to indemnify and hold harmless
the Company, the officers and directors of the Company and each
person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20(a) of the Exchange
Act against all loss, claim, damage, expense or liability to
which the Company or such controlling person may become subject,
under the Securities Act or otherwise insofar as such losses,
claims, damages, expenses or liabilities (or actions in respect
thereof) arise out of or are based upon Purchaser Information
that is included or relied upon by the Company in the
registration statement or prospectus or any amendment or
supplement thereto or in any application; and will reimburse the
Company, officer, director and each such controlling person for
any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim,
damage, liability or action, provided that such loss, claim,
damage, expense or liability is found ultimately to arise out of
or be based upon such Purchaser Information. Notwithstanding
anything to the contrary, the Holders' liability shall be limited
to the proceeds from any stock sales made by them.
7
(c) Any party entitled to indemnification hereunder
("Indemnified Party") will permit the Company to assume the
defense of any such claim or any litigation resulting therefrom;
provided, that counsel for the Company, who will conduct the
defense of such claim or litigation, will be approved by the
Indemnified Party (whose approval shall not be unreasonably
withheld). The Indemnified Party may participate in such defense
at such party's expense; provided, however, that the Company will
pay such expense if representation of such Indemnified Party by
the counsel retained by the Company would be inappropriate due to
actual or potential differing interests between the Indemnified
Party and any other party represented by such counsel in such
proceeding; provided further that in no event will the Company be
required to pay the expenses of more than one law firm per
jurisdiction as counsel for the Indemnified Party. The Company
is also responsible for the expenses of such defense if the
Company does not elect to assume such defense. The Company, in
the defense of any such claim or litigation may not, except with
the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all
liability in respect of such claim or litigation, and no
Indemnified Party may consent to entry of any judgment or settle
such claim or litigation without the prior written consent of the
Company, which consent may not be unreasonably withheld.
7.8. Expiration of Registration Rights. Notwithstanding
anything to the contrary contained herein, such registration is
not required for a Holder of Underlying Common Stock if in the
opinion of counsel to the Company, the Holder can sell his
Underlying Common Stock without restriction under Rule 144(k)
promulgated under the Securities Act and all restrictive legends
under the Securities Act are removed from the certificates
representing such securities and any stop transfer order for such
certificates is removed.
7.9. Successors. The registration rights granted to the
Holders inure to the benefit of all the Holder's successors,
heirs, pledges, assignees, transferees and purchasers of the
Stock, Warrants or underlying securities.
8. Investor Representations and Warranties.
8.1. Investor Representations. I am aware that, except for
any rescission rights that may be provided under applicable laws,
I am not entitled to cancel, terminate or revoke this
subscription, and any agreements made in connection herewith
will survive my death or disability. In order to induce the
Company to issue and sell the Stock and Warrants to me, I
represent and warrant that the information relating to me stated
herein is true and complete as of the date hereof and will be
true and complete as of the date on which my purchase of Stock
and Warrants becomes effective. If, prior to the final
consummation of the offer and sale of the Stock and Warrants,
there should be any change in such information or any of such
information becomes incorrect or incomplete, I agree to notify
the Company and supply the Company promptly with corrective
information.
8
8.2. Information About the Company.
(a) I have been given access to full and complete
information regarding the Company including the Company's filings
on Form 10-KSB, Form 10-QSB and the Company's Proxy Statement
under the Securities Exchange Act, and have utilized such access
to my satisfaction for the purpose of verifying the information,
and I have either met with or been given reasonable opportunity
to meet with officers of the Company for the purpose of asking
reasonable questions of such officers concerning the terms and
conditions of the offering of the Stock and Warrants and the
business and operations of the Company and all such questions
have been answered to my full satisfaction. I also have been
given an opportunity to obtain any additional relevant
information to the extent reasonably available to the Company. I
have received all information and materials regarding the Company
that I have reasonably requested. After my reading of the
materials about the Company, I understand that there is no
assurance as to the future performance of the Company.
(b) I have received no representation or warranty from
the Company or any of its officers, directors, employees or
agents in respect of my investment in the Company. I am not
participating in the offering as a result of or subsequent to:
(i) any advertisement, article, notice or other communication
published in any newspaper, magazine or similar media or
broadcast over television, radio or the Internet or (ii) any
seminar or meeting whose attendees have been invited by any
general solicitation or general advertising.
8.3. Speculative Investment. I am aware that the Stock and
Warrants are a speculative investment that involves a high degree
of risk including, but not limited to, the risk of losses from
operations of the Company and the total loss of my investment. I
have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of an
investment in the Stock and Warrants and have obtained, in my
judgment, sufficient information from the Company to evaluate the
merits and risks of an investment in the Company. I have not
utilized any person as my purchaser representative (as defined in
Regulation D) in connection with evaluating such merits and risks
and have relied solely upon my own investigation in making a
decision to invest in the Company. I have been urged to seek
independent advice from my professional advisors relating to the
suitability of an investment in the Company in view of my overall
financial needs and with respect to the legal and tax
implications of such investment. I believe that the investment
in the Stock and Warrants is suitable for me based upon my
investment objectives and financial needs, and I have adequate
means for providing for my current financial needs and
contingencies and have no need for liquidity with respect to my
investment in the Company. The investment in the Company does
not constitute all or substantially all of my investment
portfolio.
8.4. Restrictions on Transfer. I understand that (i) none
of the shares of Stock, Warrants or Underlying Common Stock have
been registered under the Securities Act or the securities laws
of certain states in reliance on specific exemptions from
registration, (ii) no securities administrator of any state or
the federal government has recommended or endorsed this offering
or made any finding or determination relating to the fairness of
an investment in the Company and (iii) the Company is relying on
my representations and agreements for the purpose of determining
whether this transaction meets the requirements of the exemptions
afforded by the Securities Act and certain state securities laws.
Other than as set forth herein, I acknowledge that there is no
assurance that the Company will file any registration statement
for the securities I am purchasing, that such registration
statement, if filed, will be declared effective or, if declared
effective, that the Company will be able to keep it effective
until I sell the securities registered thereon. Furthermore, I
agree to furnish the Company with such information regarding
myself and the distribution of the securities proposed by me as
the Company may request in connection with any registration,
qualification or compliance with the Company's registration
obligations set forth herein.
9
8.5. Investment Representation. I am purchasing the Stock
and Warrants for my own account for investment and not with a
view to, or for sale in connection with, any subsequent
distribution of the securities, nor with any present intention of
selling or otherwise disposing of all or any part of the Stock,
Warrants or Underlying Common Stock. I understand that, although
there is a public market for the Underlying Common Stock, there
is no assurance that such market will continue and there is no
market at present for the Stock or Warrants and it is unlikely
that a market will ever develop for these securities in the
future. I understand and agree that the Stock, Warrants and
Underlying Common Stock cannot be resold, pledged, assigned or
otherwise disposed of unless they are subsequently registered
under the Securities Act and under applicable securities laws of
certain states, or an exemption from such registration is
available. I understand that, except as set forth herein, the
Company is under no obligation to register the securities or to
assist me in complying with any exemption from such registration
under the Securities Act or any state securities laws. I hereby
authorize the Company to place a legend denoting the restrictions
on the certificates representing the securities. Nothing
contained herein shall be deemed a representation or warranty by
such Purchaser to hold Securities for any period of time.
8.6. Entity Authority. If the Investor is a corporation,
partnership, company, trust, employee benefit plan, individual
retirement account, ▇▇▇▇▇ Plan or other tax-exempt entity, it is
authorized and qualified to become an investor in the Company and
the person signing this Subscription Agreement on behalf of such
entity has been duly authorized by such entity to do so.
8.7. No Offer Until Determination of Suitability. I
acknowledge that any delivery to me of the documents relating to
the offering of the Stock and Warrants prior to the
determination by the Company of my suitability will not
constitute an offer of the Stock and Warrants until such
determination of suitability is made.
9. Indemnification. I hereby agree to indemnify and hold
harmless the Company, its respective officers, directors,
stockholders, employees, agents and attorneys against any and all
losses, claims, demands, liabilities, and expenses (including
reasonable legal or other expenses incurred by each such person
in connection with defending or investigating any such claims or
liabilities, whether or not resulting in any liability to such
person or whether incurred by the indemnified party in any action
or proceeding between the indemnitor and indemnified party or
between the indemnified party and any third party) to which any
such indemnified party may become subject, insofar as such
losses, claims, demands, liabilities and expenses (a) arise out
of or are based upon any untrue statement or alleged untrue
statement of a material fact made by me and contained herein or
(b) arise out of or are based upon any breach by me of any
representation, warranty or agreement made by me contained herein.
10
10. Severability; Remedies. In the event any parts of this
Subscription Agreement are found to be void, the remaining
provisions of this Subscription Agreement are nevertheless
binding with the same effect as though the void parts were
deleted.
11. Governing Law and Jurisdiction. This Subscription Agreement
will be deemed to have been made and delivered in Rancho
Cucamonga, California and will be governed as to validity,
interpretation, construction, effect and in all other respects by
the internal laws of the State of Delaware. Each of the Company
and the Investor hereby (i) agrees that any legal suit, action or
proceeding arising out of or relating to this Subscription
Agreement will be instituted exclusively in the United States
District Court for the Central District of California, (ii)
waives any objection to the venue of any such suit, action or
proceeding and the right to assert that such forum is not a
convenient forum for such suit, action or proceeding, (iii)
irrevocably consents to the jurisdiction of the United States
District Court for the Central District of California in any such
suit, action or proceeding, (iv) agrees to accept and acknowledge
service of any and all process that may be served in any such
suit, action or proceeding in United States District Court for
the Central District of California and (v) agrees that service of
process upon it mailed by certified mail to its address set forth
on my signature page will be deemed in every respect effective
service of process upon it in any suit, action or proceeding.
12. Counterparts. This Subscription Agreement may be executed
in one or more counterparts, each of which will be deemed an
original but all of which together will constitute one and the
same instrument. The execution of this Subscription Agreement
may be by actual or facsimile signature.
13. Notices. All notices, offers, acceptance and any other acts
under this Subscription Agreement (except payment) must be in
writing, and is sufficiently given if delivered to the addressees
in person, by overnight courier service, or, if mailed, postage
prepaid, by certified mail (return receipt requested), and will
be effective three days after being placed in the mail if mailed,
or upon receipt or refusal of receipt, if delivered personally or
by courier or confirmed telecopy, in each case addressed to a
party. All communications to me should be sent to my preferred
address on the signature page hereto. All communications to the
Company should be sent to:
11
AquaCell Technologies, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Chief Executive Officer
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to: ▇▇▇▇▇▇ ▇▇▇▇ LLC
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
14. Oral Evidence. This Subscription Agreement constitutes the
entire agreement between the parties with respect to the subject
matter hereof and supersedes all prior oral and written
agreements between the parties hereto with respect to the subject
matter hereof. This Subscription Agreement may not be changed,
waived, discharged, or terminated orally, but rather, only by a
statement in writing signed by the party or parties against which
enforcement or the change, waiver, discharge or termination is
sought.
15. Section Headings. Section headings herein have been
inserted for reference only and will not be deemed to limit or
otherwise affect, in any matter, or be deemed to interpret in
whole or in part, any of the terms or provisions of this
Subscription Agreement.
16. Survival of Representations, Warranties and Agreements. The
representations, warranties and agreements contained herein will
survive the delivery of, and the payment for, the Stock and
Warrants.
17. Acceptance of Subscription. The Company may accept this
Subscription Agreement at any time for all or any portion of the
Securities subscribed for by executing a copy hereof as provided
and notifying me within a reasonable time thereafter.
12
SIGNATURE PAGE FOR INDIVIDUAL INVESTORS - COMPLETE ALL INFORMATION
Name:_____________________ Name of Joint Investor (if any):____________________
Residence Address:______________________________________________________________
Telephone: (H)________________ (W)____________________ Fax__________________
Occupation:___________________ Employer:_______________________________________
Business Address:_______________________________________________________________
Send communications to: __ Home __ Office __ E-Mail:_________________________
Age:_______________
Social Security Number:____________________
Check manner in which securities are to be held:
__ Individual Ownership __ Tenants in Common __ Joint Tenants with
Right of Survivorship
(both parties must sign)
__ Community Property __ Other (please indicate)
________________________
Amount of Investment:
Number of shares:______________
Corresponding dollar amount ($1.15 multiplied by number of shares): $___________
Accredited Investor Status For Individuals. (INVESTORS THAT ARE CORPORATIONS,
LIMITED LIABILITY COMPANIES, PARTNERSHIPS, REVOCABLE TRUSTS, IRREVOCABLE
TRUSTS, EMPLOYEE BENEFIT PLAN TRUSTS AND INDIVIDUAL RETIREMENT ACCOUNTS
SHOULD IGNORE THE FOLLOWING QUESTIONS AND PROCEED TO THE ENTITY SIGNATURE PAGE).
(a) I am an accredited investor within the meaning of Section 2(15) of the
Securities Act and Rule 501 promulgated thereunder because (check any boxes that
apply):
____ My individual annual income during each of the
two most recent years exceeded $200,000 and I
expect my annual income during the current
year will exceed $200,000.
13
____ If I am married, my joint annual income with
my spouse during each of the two most recent
years exceeded $300,000 and I expect my joint
annual income with my spouse during the
current year will exceed $300,000.
____ My individual or joint (together with my
spouse) net worth (including my home, home
furnishings and automobiles) exceeds
$1,000,000.
(b) The aggregate value of my assets is approximately $___________.
(c) My aggregate liabilities are approximately $___________.
(d) My current and expected income is:
YEAR INCOME
2004 (Estimated) $______________
2003 (Estimated) $______________
2002 (Actual) $______________
2001 (Actual) $______________
I hereby confirm the information set forth above is true and correct in all
respects as of the date hereof and will be on the date of the purchase of
the Stock and Warrants.
ALL INVESTORS MUST SIGN AND The foregoing subscription is
PRINT NAME BELOW accepted and the Company hereby
agrees to be bound by its terms.
Signature:___________________________
AQUACELL TECHNOLOGIES, INC.
Print Name:__________________________
Date:________________________________ By:_____________________________
Signature:___________________________ Name:___________________________
Print Name:__________________________ Title:__________________________
Date:________________________________ Date:___________________________
14
SIGNATURE PAGE FOR ENTITY INVESTORS - COMPLETE ALL INFORMATION
Name of Entity:_________________________________________________________________
Address of Principal Office:____________________________________________________
Telephone:____________________________ Fax:_________________________________
Taxpayer Identification Number:____________________________
Check type of Entity:
___ Employee ___ Limited ___ General ___ Individual
Benefit Plan Partnership Partnership Retirement
Trust Account
___ Limited ___ Revocable ___ Corporation ___ Other
Liability Trust (please
Company indicate)
___ Irrevocable Trust (If the Investor is an Irrevocable
Trust, a supplemental questionnaire must be completed by
the person directing the decision for the trust to
determine by accredited investor status. Please contact
the Company for a copy of such supplemental
questionnaire.)
Amount of Investment:
Number of shares:______________
Corresponding dollar amount ($1.15 multiplied by number of shares): $___________
Date of Formation or incorporation:____________ State of Formation:___________
Describe the business of the Entity:
________________________________________________________________________________
List the names and positions of the executive officers, managing members,
partners or trustees authorized to act with respect to investments by the
Entity generally and specify who has the authority to act with respect to
this investment.
Authority for
this investment
Name Position (yes or no)
______________________________ ________________ __________________________
______________________________ ________________ __________________________
15
Accredited Investor Status for Entities.
(a) Check all boxes which apply (IRA Entities can skip this question and
go to (b)):
____ The Entity was not formed for the specific purpose of investing in the
Company.
____ The Entity has total assets in excess of $5 million dollars.
____ For Employee Benefit Plan Trusts Only: The decision to invest in the
Company was made by a plan fiduciary, as defined in Section 3(21) of
ERISA, who is either a bank, insurance company or registered investment
advisor.
(b) If you did not check the first two of the three boxes in Question (a)
or if the Entity is an Individual Retirement Account, a Self-directed Employee
Benefit Plan Trust or an Irrevocable Trust, list the name of each person who:
(i) owns an equity interest in the Entity (i.e., each shareholder
if the Entity is a corporation, each member if the Entity is a limited liability
company and each partner if the Entity is a partnership); or
(ii) is a grantor for the revocable trust or Individual Retirement
Account; or
(iii) is the person making the investment decision for a self-
directed Employee Benefit Plan Trust; or
(iv) is the person making the investment decisions for an
Irrevocable Trust.
___________________________ __________________________
___________________________ __________________________
EACH PERSON LISTED ABOVE MUST SEPARATELY COMPLETE AND SUBMIT TO THE COMPANY THE
ANSWERS TO THE QUESTIONS FOLLOWING THE SIGNATURE BOX BELOW AND SIGN THE WRITTEN
CONFIRMATION IMMEDIATELY FOLLOWING.
INVESTOR: The foregoing subscription is
accepted and the Company hereby
agrees to be bound by its terms.
____________________________________ AQUACELL TECHNOLOGIES, INC.
Signature of Authorized Signatory
By:______________________________
Name:_______________________________ Name:____________________________
Title:______________________________ Title:___________________________
Date:_______________________________ Date:____________________________
16
Accredited Investor Questions for Entity equity owners and investment decision
makers
(a) I am an accredited investor within the meaning of Section 2(15) of the
Securities Act and Rule 501 promulgated thereunder because (check any boxes that
apply):
____ My individual annual income during each of the
two most recent years exceeded $200,000 and I
expect my annual income during the current
year will exceed $200,000.
____ If I am married, my joint annual income with
my spouse during each of the two most recent
years exceeded $300,000 and I expect my joint
annual income with my spouse during the
current year will exceed $300,000.
____ My individual or joint (together with my
spouse) net worth (including my home, home
furnishings and automobiles) exceeds
$1,000,000.
(b) The aggregate value of my assets is approximately $___________.
(c) My aggregate liabilities are approximately $___________.
(d) My current and expected income is:
YEAR INCOME
2004 (Estimated) $______________
2003 (Estimated) $______________
2002 (Actual) $______________
2001 (Actual) $______________
I hereby confirm the information set forth above is true and correct in all
respects as of the date hereof and will be on the date of the purchase of
the Stock and Warrants.
Date:__________________________________ __________________________________
Name:
17