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EXHIBIT (B); PAGE 1
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SUBSCRIPTION AGREEMENT
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The Board of Directors of
Electropure, Inc.
00000 Xxxxx Xxxxxx, Xxxxx X
Xxxxxx Xxxxx, XX 00000
Gentlemen:
The undersigned hereby applies to Electropure, Inc. (the "Company") to purchase
the number of Shares indicated on Page B-7 of this document, in accordance with
the terms of this Subscription Agreement attached to the Confidential Private
Placement Memorandum dated June 24, 1988, relating to the Shares (such
Confidential Private Placement Memorandum, including all financial statements,
exhibits and schedules attached thereto, contained or specified therein as
available from the Company, and any amendments and supplements thereto, is
herein called the "Memorandum"). This subscription is irrevocable.
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INSTRUCTIONS
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Please complete the Subscription Agreement in the following manner:
1. Complete Sections D and E by inserting the amount of your subscription and/or
other information called for in those Sections.
2. Complete the signature page.
A. REPRESENTATIONS AND WARRANTIES. The undersigned acknowledges, represents,
warrants and agrees as follows:
1. The undersigned has received and carefully reviewed the Memorandum
and has relied only on the information contained therein, information otherwise
provided to him in writing by the Company or information from books and records
of the Company. The undersigned acknowledges that all documents, records and
books pertaining to this investment have been made available for inspection by
him, his attorney and/or his accountant and in the Memorandum, and that the
books and records of the Company will be available upon reasonable notice, for
inspection by investors during reasonable business hours at the principal place
of the business of the Company. The undersigned and/or his advisor(s) have had a
reasonable opportunity to ask questions of and receive answers from the Company
or a person or persons acting on its behalf, concerning the terms and conditions
of the Offering, and to obtain additional information, to the extent possessed
or obtainable without unreasonable effort or expense, necessary to verify the
accuracy of the information in the Memorandum. All such questions have been
answered to the full satisfaction of the undersigned. No oral representations
have been made or oral information furnished to the undersigned or his
advisor(s) in connection with the Offering which were in any way inconsistent
with the Memorandum.
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EXHIBIT (B); PAGE 2
2. The undersigned (i) has adequate means of providing for his current needs and
possible personal contingencies, (ii) has no need for liquidity in this
investment, (iii) is able to bear the substantial economic risks of an
investment in the Shares for an indefinite period, (iv) at the present time, can
afford a complete loss of such investment, and (v) does not have an overall
commitment to investments which are not readily marketable that is
disproportionate to the undersigned's net worth, and the undersigned's
investment in the Shares will not cause such overall commitment to become
excessive.
3. The undersigned is an "accredited investor" (as set forth in the Purchaser
Questionnaire accompanying this Subscription Agreement) and the undersigned's
total investment in the Shares does not exceed 10% of the undersigned's net
worth or joint net worth the undersigned's spouse.
4. The undersigned recognizes that the Company was incorporated in 1979 and has
had only limited operating revenues to date and no current revenues and that the
Shares as an investment involve significant risks, including those set forth
under the caption "Risk Factors Concerning the Company" in Exhibit A to the
Memorandum.
5. The undersigned understands that the Memorandum has not been filed with or
reviewed by the United States Securities and Exchange Commission and may not
have been filed or reviewed by certain state securities administrators because
of the representation made by the Company as to the private or limited nature of
the Offering.
6. The undersigned understands that neither the Offering nor the sale of the
Shares has been registered under the Securities Act of 1933, as amended (the
"Act") in reliance upon an exemption therefrom. The undersigned understands that
the Shares must be held indefinitely unless the sale or other transfer thereof
is subsequently registered under the Act, as amended, or an exemption from such
registration is available. The undersigned further understands that the Company
is under no obligation to register the Shares on his behalf (except as set forth
in the Memorandum) or to assist him in complying with any exemption from
registration.
7. The Shares are being purchased solely for the undersigned's own account for
investment purposes only and not for the account of any other person and not for
distribution, assignment or resale to others, and no other person has a direct
or indirect beneficial interest in such Shares.
8. The undersigned will not transfer the Shares without registering them under
applicable federal or state securities laws unless the transfer is exempt from
registration under such laws. The undersigned realizes that the Company may not
allow a transfer of the Shares unless the transferee meets the suitability
standards for an initial purchaser of the Shares. The undersigned understands
that legends will be placed on the certificates representing the Shares (or
common shares underlying the Shares), with respect to the above restrictions on
resale or other disposition of the Shares and that stop transfer instructions
have or will be placed with respect to the Shares so as to restrict the
assignment, resale or other disposition thereof.
9. The Company will direct its transfer agent to place such an order in its
books respecting the transfer of the Shares, and the certificate or certificates
representing the Shares (or common shares underlying the Shares) will bear the
following legend or a legend substantially similar thereto:
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EXHIBIT (B); PAGE 3
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933. THEY MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF: (1)
AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER THE ACT,
OR (2) AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED. FURTHER, TRANSFER IS RESTRICTED PURSUANT
TO AN AGREEMENT WITH THE COMPANY."
10. Rules 144, promulgated by the Securities and Exchange Commission under the
Act, may be available for sale of the Shares, but there is no assurance that it
will be available at any particular time in the future. If and when Rule 144 is
available for sale of such Shares, such sales in reliance upon Rule 144 may only
be made (i) in limited quantities after the Shares have been held for two years,
including two years after the exercise of a warrant or (ii) in unlimited
quantities by non-affiliates after the Shares have been held for three years
(including three years after exercise of a warrant), in each case in accordance
with the conditions of the Rule, all of which must be met (including the
requirement, if applicable, that adequate information concerning the Company is
then available to the public). The Company has no obligation to supply the
information required for sales under Rule 144.
11. The undersigned is a citizen of the United States and is at least 21 years
of age.
12. All information which the undersigned has provided to the Company in the
Purchaser Questionnaire or otherwise concerning himself, his investor status,
financial position and knowledge and experience in financial, tax and business
matters is correct and complete as of the date set forth at the end hereof, and
if there should be any adverse change in such information prior to acceptance of
his subscription, the undersigned will immediately provide the Company with such
information.
13. The undersigned, if a corporation, partnership, trust or other entity, is
authorized and otherwise duly qualified to purchase and hold the Shares, such
entity has its principal place of business as set forth on the signature page
hereof and such entity has NOT been formed for the specific purpose of acquiring
Shares unless all of its equity owners qualify as accredited individual
investors under the standards set forth in the accompanying Purchaser
Questionnaire. Beneficiaries of a trust will NOT be considered equity owners.
B. INDEMNIFICATION. The undersigned agrees to indemnify and hold harmless the
Company and its officers, directors and affiliates from and against all damages,
losses, costs and expenses (including reasonable attorneys' fees) which they may
incur by reason of the failure of the undersigned to fulfill any of the terms or
conditions of this Subscription Agreement, or by reason of any breach of the
representations and warranties made by the undersigned herein, in the
undersigned's related Purchaser Questionnaire or in any document provided by the
undersigned to the Company.
C. MISCELLANEOUS.
1. The undersigned agrees not to transfer or assign this Subscription
Agreement, or any of the undersigned's interest herein, and further agrees that
the transfer or assignment of the Shares acquired
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EXHIBIT (B); PAGE 4
pursuant hereto shall be made only in accordance with the conditions and
restrictions contained in the Memorandum and all applicable laws.
2. The undersigned agrees that the undersigned may not cancel,
terminate or revoke this Subscription Agreement or any agreement of the
undersigned made hereunder (except as otherwise specifically provided herein)
and that this Subscription Agreement shall survive the death or disability of
the undersigned and shall be binding upon the undersigned's heirs, executors,
administrators, successors and assigns.
3. Notwithstanding any of the representations, warranties,
acknowledgments or agreements made herein by the undersigned, the undersigned
does not thereby or in any other manner waive any rights granted to the
undersigned under federal or state securities laws.
4. This Subscription Agreement constitutes the entire agreement among
the parties with respect to the subject matter hereof and may be amended only by
a writing executed by all parties.
5. This Subscription Agreement shall be enforced, governed and
construed in all respects in accordance with the laws of the State of
California.
6. Within five days after receipt of a written request from the
Company, the undersigned agrees to provide such information and to execute and
deliver such documents as reasonably may be necessary to comply with any and all
laws, rules and regulations to which the Company is subject.
7. The representations and warranties of the undersigned set forth
herein shall survive the sale of the Shares pursuant to this Subscription
Agreement.
D. SUBSCRIPTION AND METHOD OF PAYMENT. The undersigned, acknowledging that Ten
Thousand (10,000) Shares is the minimum subscription required and that this
Offering involves the sale of up to 500,000 Shares at $1.17 per share with
registration rights at set forth in the Memorandum or at $0.94 per share without
registration rights, hereby subscribes for the following number of Shares and
encloses payment as follows:
(1) (2)
Shares at $0.94 per Share for an
15,957 aggregate purchase price of
---------------------- $10,000.00, payable by check or money order
Number of Shares to "HOH Water Technology Corp."
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(1) Fill in the number of Shares you desire to purchase pursuant to this
Offering.
(2) Fill in the aggregate purchase price of the Shares purchased.
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EXHIBIT (B); PAGE 5
E. FORM OF OWNERSHIP. Please indicate the form of ownership you desire for the
Shares.
X Individual (one signature required)
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Joint Tenants with right of survivorship (both parties
----------- must sign)
----------- Tenants-in-Common (all parties must sign)
Community Property (one signature required if
----------- interest held in one name, i.e., managing spouse;
two signatures required if interest is held in both
names)
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Xxxxx Xxxxxxx
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Please PRINT here the exact name(s) (registration) investor
desires for the Shares
ACCEPTED:
HOH WATER TECHNOLOGY CORPORATION
By /s/ XXXXXXXXX XXXXXXXXX
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Xxxxxxxxx Xxxxxxxxx
Corporate Secretary
Dated: 08/18/88 Number of Shares: 15,957
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EXHIBIT (B); PAGE 6
SIGNATURE PAGE
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INDIVIDUALS/JOINT TENANTS/TENANTS-IN-COMMON/COMMUNITY/PROPERTY
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If the Shares are to be owned by joint tenants or tenants-in-common, all tenants
must sign. If the securities are to be owned as community property, one
signature is required if the securities are to be held in one name (i.e., by
managing spouse) and two signatures if the securities are to be held in both
names.
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INVESTOR #1 INVESTOR #2
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/s/ XXXXX XXXXXXX
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Signature Signature
Xxxxx Xxxxxxx
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Print Name Print Name
###-##-####
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Social Security Number Social Security Number
Residence Address: Residence Address:
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0000 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
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Executed at: Executed at:
Burbank , CA ,
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City State City State
this 18th day of August , 1988 this day of , 1996
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Mailing Address (if different from residence address):
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