EXHIBIT 4.2
AQUA DYNE, INC.
SUBSCRIPTION AGREEMENT
Rule 504 Equity Offering
Gentlemen:
The undersigned, having received and read a copy of the Offering
Memorandum dated September 1, 2000, concerning an offering of an aggregate of
1,000,000 shares of Common Stock of Aqua Dyne, Inc. (the "Company") hereby makes
an irrevocable offer to purchase money order in the amount of
$______________Shares. Tendered herewith is my check or representing the total
number of Shares subscribed to, at the purchase price of $1.00 per share, made
payable to the order of AQUA DYNE, INC.
Also enclosed is a fully executed copy of this Subscription Agreement,
in connection with which I hereby represent and agree as follows:
1. The funds tendered herewith are irrevocable. Should my
subscription be rejected by the Company, the Company shall
promptly and fully return the subscription price tendered,
without interest or deduction and this Subscription Agreement
shall be rendered null and void, and of no further force or
affect.
2. This subscription is made subject to the following terms and
conditions:
(a) The Company has the right to reject this subscription
in whole or in part;
(b) No obligation exists on the part of the Company to
accept subscriptions in any particular order;
(c) The certificates evidencing the Shares subscribed to
herein shall be issued only in my name and delivered
only to me;
(d) There is no minimum amount of subscriptions to be
received by the Company; and there is no escrow of
funds received b the Company.
(e) The offering will terminate on November 29, 2000
subject to an extension; or at any time by the
Company, prior to the final acceptance of the
subscription.
3. (a) In making my decision to subscribe to Shares of the
Company, I have relied solely upon the information and
statements furnished by of the Company in the Offering
Memorandum.
4. I understand that the Shares are being offered and sold under
an exemption from the registration requirements provided by
the Securities Act of 1933 (the "1933 Act,") and rules and
regulations promulgated thereunder, and certain exemptions
from registration provided by state securities laws.
5. This transaction has not been reviewed by, passed on or
submitted to the United States Securities and Exchange
Commission or to any state agency; accordingly, I make the
following additional representations and warranties.
(a) I am a bona fide resident or domiciliary of the State
set opposite my name on the signature page, in the
sense of being a person resident within such state,
having my principal resident and domicile in such
state: and I am a United States citizen of at least
twenty-one years of age.
(b) I understand and have fully considered, for purposes
of this investment, all the provisions of the
Offering Memorandum, with special consideration given
to the following portions, "Caveats", "Risk Factors,"
and "Description of Securities."
(c) I understand the Company has limited operating
history and little or no profits and the Units are
speculative investments which involve a high degree
of risk of loss by the subscriber; therefore, this@
investment is more suitable for one who is
sufficiently wealthy to afford a loss of his entire
investment.
(d) understand that there may be substantial restrictions
on the transferability of the Shares (and the
certificates will so Indicate), for which there may
be no market, and, accordingly, it will probably not
be possible to liquidate my investment in the Shares
in the case of an emergency need for liquidity.
(e) The Company is relying on the truth and accuracy of
my representations, declarations and warranties made
herein In their offering the Shares for sale to me
and relying upon applicable federal and state
exceptions.
(f) The Shares subscribed to herein are being acquired
for my account, for investment only, and are not
being purchased with a view toward resale,
distribution, subdivision or fractionalization. I
have no contract, understanding, undertaking,
agreement or arrangement, formal or informal, with
any person or persons to sell, transfer or pledge the
Shares, and I have no present plan to enter Into any
such contract or agreement.
(g) I could suffer serious consequences if the
statements, representations or warranties made herein
to the Company are not true, which could result in my
being subjected to the Indemnification provisions set
forth below in paragraph 7 hereof.
6. I make the within representations, warranties and undertakings
with the intent that they may be relied upon in determining my
suitability to purchase the Shares, and such representations
and warranties shall survive the within subscription.
7. I agree to indemnify and save harmless the Company, its
affiliates, officers, directors, legal counsel, accountants
and affiliates of any thereof, from any and all claims,
liabilities, damages, expenses, losses or actions directly or
indirectly arising out of or in connection with the
representations, warranties, and agreements contained herein.
8. I am not entitled to transfer or assign this Subscription
Agreement, or any interest herein, and the issuance of Units
pursuant hereto shall be made only in accordance with all
applicable laws.
9. I am not entitled to cancel, terminate or revoke this
Subscription Agreement or any agreements contained herein, and
the provisions of this's Subscription Agreement shall survive
(i) purchase and issuance of the Units subscribed to herein,
and (ii) my death or disability. However, if the Company
rejects this Subscription, this Subscription Agreement shall
automatically be canceled, terminated and revoked.
10 (a) If executing this Subscription Agreement in a
representative or fiduciary capacity, I have full power and
authority to execute and deliver this Subscription Agreement
in such capacity and on behalf of the subscribing individual,
partnership, trust, estate, corporation or other entity for
whom or which I am executing this Subscription Agreement
(b) It the Subscriber is corporation, the corporation is
duly and validly organized, validly existing and in
good tax and corporate standing as a corporation
under the laws of the jurisdiction of its
incorporation with full power and authority to
purchase the Shares to be purchased by it and to
execute and deliver the Subscription Agreement.
(c) If the Subscriber is a partnership, the
representation, warranties agreement and
understandings set forth above are true with respect
to all partners of the Subscriber (and if any such
partner Is itself a partnership, all persons holding
an interest in such partnership, directly or
indirectly, including through one or more
partnerships), and the person executing the
Subscription Agreement has made due inquiry to
determine the truthfulness of the representations and
warranties made hereby,
11. I have read Appendix A hereto, defining an "accredited
investor' as set forth in Rule 501 of Regulation D of the
Securities Act of 1933 and certify as follows: (please check
the appropriate box)
(a) ____________ I am an "accredited investor" and my
basis is
(Fill in category from Appendix A)
(b) _____________ I am NOT an accredited investor (if
this box is checked, do you have a "Purchaser
Representative" and if so please fill in name and
address)
(c) It you are not an accredited investor, please check
one of the following:
(i) ____________ My net worth is greater than
five times my investment herein and I expect
income during the current year in excess of
$100,000.
(ii) ______________ My not worth is greater than
ten times my proposed investment.
12. This agreement shall be governed by and construed in
accordance with the laws of the State of New York,
IN WITNESS WHEREOF, the undersigned does represent and certify under
penalties of perjury that the foregoing statements are true and correct and that
(s)he has executed this Subscription Agreement this ________ day of 2000,
Present Residence (Signature(s))___________________
------------------------------
(Print name beneath signature)
Telephone No._______________________
--------------------- ---------------------
Taxpayer Identification No. Occupation/Employment
TYPE OF OWNERSHIP (Check One)
___Individual (one-signature required)
___Joint Tenants with right of Survivorship (both parties must sign)
___Tenants in Common (both parties must sign)
___Community Property (one signature required if interest held in one
name, i.e. managing spouse, two signatures required if held in both
names,
___Trust (please include instrument creating Trust)
___Corporation (please include evidence of authorization to purchase in
form of resolutions or Articles of Incorporation and By-Laws)
___Partnership (please include copy of Partnership Agreement)
Please print here the exact name(s) Purchaser(s) desire(s) for the Shares:
-----------------------------------------
Print Name
Subject to the approval of the Company, the foregoing Subscription is
hereby accepted on behalf of the Company, subject to the terms and conditions
hereof, as of the _________day of 2000.
AQUA DYNE, INC,
By:_________________________
Name and Title
4
Aqua Dyne, Inc.
ADDENDUM.
The subscription offering period has been extended through February 27, 2001.
Appendix A
ACCREDITED INVESTOR. "Accredited investor' shall mean any person who
comes within any of the following categories, or who the issuer reasonably
believes comes within any of the following categories, at the time of the sale
of the securities to that person:
(1) Any bank as defined in Section 3(a) (2) of the Securities Act, or
of any savings and loan association or other institution as defined in Section
3(a) (5) (A) of the Act any broker or dealer registered pursuant to Section 15
of the Securities Exchange Act of 1934; any insurance company as defined in
Section 2 (13) of the Act; any investment company registered under the
Investment Company Act of 1940 or a business development company as defined in
Section 2 (a) (48) of that Act; any Small Business Investment Company licensed
by the U.S. Small Business Administration; any plan established and maintained
by a state, 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; any employee benefit plan within
the meaning of the Employee Retirement Income Security Act of 1974 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 adviser, 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:
(2) Any private business development company as defined in Section
202(a) (22) of the Investment Advisers Act of 1940;
(3) Any organization described in Section 501 (c) (3) of the Internal
Revenue Code, corporation, 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;
(4) Any director, executive officer, or general partner of the issuer
of the securities being offered or sold, or any director, executive officer, or
general partner of a general partner of that issuer;
(5) Any natural person whose individual net worth, or joint net worth
with that person's spouse, at the time of his purchase exceeds $1,000,000;
(6) Any 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;
(7) Any trust, with total assets in excess of $5,000,000, not formed
for the specific purpose of acquiring the securities offered, whose purchase is
directed by a sophisticated person as described in Rule 506(b)(2)(II): and
(8) Any entity in which all of the equity owners are accredited
investors.
