hybridexh4_91.htm


    
      

    


    EXHIBIT
4.9.1

    


    FORM OF SUBSCRIPTION
AGREEMENT

    


    SUBSCRIPTION
BOOKLET

    


    


    HYBRID
DYNAMICS CORPORATION

    


    


    Offering
of $750,000 worth of Units consisting of

     Series
B Convertible Preferred Stock and Warrants to purchase Common Stock

    


    


    


    


    CONTENTS

    


    Instructions
for Subscription

    


    Exhibit
A:                               Wiring
and Check Instructions

    


    Exhibit
B:                                Subscription
Agreement

    


    Exhibit
C:                                Confidential
Purchaser Questionnaire

    


    Exhibit
D:                                Form
W-9

    


     

     

     

     

     

    
 

    



    
      
         


      

      
         


        
          

        

      

      
         


      

    


    HYBRID
DYNAMICS CORPORATION

    


    SUBSCRIPTION
BOOKLET

    


    


    INSTRUCTIONS
FOR SUBSCRIPTION FOR UNITS

    


    Each
subscriber for units (the “Units”) consisting of up to 2,000 Shares of Series B
Convertible Preferred Stock $500 stated value and 200,000 Warrants of Hybrid
Dynamics Corporation (the “Company”) must do the following:

    


    
      	
               
      

            	
              1.

            	
              Complete,
      sign and deliver the Subscription Agreement included in this Subscription
      Booklet.

            


    

    


    
      	
               
      

            	
              2.

            	
              Complete,
      sign and deliver the Confidential Purchaser Questionnaire included in this
      Subscription Booklet and the Form
W-9

            


    

    


    
      	
               
      

            	
              3.

            	
              Deliver
      payment in the amount of $50,000.00 per Unit in accordance with the wire
      transfer and check instructions attached hereto as Exhibit
      A.

            


    

    


    
      	
               
      

            	
              4.

            	
              Delivery
      of the completed subscription documents described above and check (if
      applicable) should be delivered directly to the Company at the following
      address:

            


    

    


    


    Hybrid
Dynamics Corporation

    52-66
Iowa Avenue

    Paterson,
NJ 07503

    


    Attention: Mark S.
Klein

    


    


    THE
COMPANY MAY ACCEPT OR REJECT SUBSCRIPTIONS IN THEIR SOLE
DISCRETION.  THE OFFERING IS AVAILABLE ONLY TO “ACCREDITED INVESTORS”
AS DEFINED UNDER REGULATION D UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.  In the event that a subscription offer is not accepted by
the Company the subscription funds shall be returned to the subscriber, without
interest thereon or deduction therefrom.

     

     

     

    
 


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    EXHIBIT
A

    


    Wire and Check
Instructions

    


    


    


    Wiring
Instructions:

    


    
      	
              Bank
      Name:

            	 
      	 
      
	
              ABA
      #:

            	 
      	 
      
	
              Acct
      #:

            	 
      	 
      
	
              Acct.
      Name:

            	 
      	
              Hybrid
      Dynamics Corporation

            


    

    


    


    Checks:

    


    Checks
should be made out to “Hybrid Dynamics Corporation”

     

     

     

     

     

     

     

     

     

    
 


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    EXHIBIT
B

    


    SUBSCRIPTION
AGREEMENT

    


    


    


    HYBRID
DYNAMICS CORPORATION

    


    


    


    


    


    Please
review, sign on page S-1, and return to:

    


    Hybrid
Dynamics Corporation

    52-66
Iowa Avenue

    Paterson,
NJ 07503

    


    Attention: Mark S.
Klein

    Phone:
(973) 279-3261

    Fax:
(973) 279-3262

    


    


    


     

     

     

     

     

     

    
 


    
      
         


      

      
         

        
          

        

      

      
         


      

    


    HYBRID
DYNAMICS CORPORATION

    


    SUBSCRIPTION
AGREEMENT

    


    The
undersigned (hereinafter “Subscriber”) hereby confirms
his/her/its subscription for the purchase of units (the “Units”) each consisting
of 100 Shares of Series B Convertible Preferred Stock and Warrants for the
purchase of 10,000 Shares of Common Stock of Hybrid Dynamics Corporation (the
“Securities”), a Nevada
corporation (the “Company”), on the terms
described below, at a purchase price of $50,000.00 per unit (the “Purchase Price”);

     

    Capitalized
terms used and not otherwise defined herein shall have the meanings set forth
for such terms in the Company’s Confidential Summary Memorandum, dated May 29,
2009 (as amended or supplemented, and together with all documents and filings
attached thereto, the “Memorandum”).

     

    In
connection with this subscription, Subscriber and the Company agree as
follows:

    


    1.            
Purchase and Sale of
the Securities.

     

    (a)           Under
this Subscription Agreement (“the Subscription Agreement”), the
Company hereby agrees to issue a maximum of twenty (20) Units (the “Units”) each
Unit composed of (i) 100 shares its Series B Convertible Preferred Stock $500
stated value (“Unit Preferred Stock”), and (ii) Warrants for the purchase of
10,000 shares of its $0.00015 par value common stock (“Unit Common Stock”) at a
strike price of $5.00 (“Unit Warrant”), at a purchase price of $50,000.00 per
Unit (“Purchase Price”). Subscriber hereby agrees to purchase from the Company,
a number of Units at a price equal to Purchase Price and for the aggregate
subscription amount set forth on the signature page hereto.  The
minimum investment is $50,000.00 per subscriber.  The Subscriber
understands that this subscription is not binding upon the Company until the
Company accepts it.  The Subscriber acknowledges and understands that
acceptance of this subscription will be made only by a duly authorized
representative of the Company executing and mailing or otherwise delivering to
the Subscriber, at the Subscriber’s address set forth herein, a counterpart copy
of the signature page to this Subscription Agreement indicating the Company’s
acceptance of this Subscription.  The Company reserves the rights, in
its sole discretion and for any reason whatsoever to accept or reject this
subscription in whole or in part.  Following the acceptance of this
Subscription Agreement by the Company and the receipt the Company shall issue
and deliver to Subscriber certificates evidencing the appropriate number of
Securities subscribed for against payment in U.S. Dollars of the Purchase
Price.  If this subscription is rejected, the Company and Subscriber
shall thereafter have no further rights or obligations to each other under or in
connection with this Subscription Agreement.  If this subscription is
not accepted by the Company on or before the last day of the Offering Period,
this subscription shall be deemed rejected.

     

    (b)           Subscriber
has hereby delivered and paid concurrently herewith the aggregate Purchase Price
set forth on the signature page hereto required to purchase the Shares
subscribed


    
      
         


      

      
        1

        
          

        

      

      
         


      

    


    for
hereunder, which amount has been paid in U.S. Dollars by cash, wire transfer or
check, subject to collection, to the order of “Hybrid Dynamics
Corporation.”

     

    (c)           Subscriber
understands and acknowledges that this subscription is part of a private
placement by the Company of up to $750,000.00 of gross proceeds (subject to an
increase of an additional $250,000 of gross proceeds), which offering is being
made on a “best efforts” basis.  Subscriber understands that payments
hereunder shall, upon having been received and accepted by the Company will
become immediately available to the Company.

    


    2.            
Representations and
Warranties of Subscriber.  Subscriber represents and warrants
to the Company as follows:

     

    (a)           Subscriber
is an “accredited investor” as defined by Rule 501 of Regulation D (“Regulation D”) promulgated
under the Securities Act of 1933, as amended (the “Act”), and Subscriber is
capable of evaluating the merits and risks of Subscriber’s investment in the
Company and has the ability and capacity to protect Subscriber’s own
interests.

     

    (b)           Subscriber
understands that the Unit, the Unit Preferred Stock, the Warrants and the
underlying shares of common stock, par value $.00015 per share (the “Common Stock” and, with the
Unit Preferred Stock and the Warrants, the “Securities”) will not be
registered under the Act on the grounds that the issuance thereof is exempt from
the registration requirements of the Act by Section 4(2) of the Act and/or
Regulation D promulgated thereunder as a transaction by an issuer not involving
any public offering and that, in the view of the United States Securities and
Exchange Commission (the “Commission”), the statutory
basis for the exception claimed would not be present if the representations and
warranties of Subscriber contained in this Subscription Agreement or the
Confidential Purchase Questionnaire are untrue or, notwithstanding Subscriber’s
representations and warranties, Subscriber currently has in mind acquiring the
Securities for resale or distribution upon the occurrence or non-occurrence of
some predetermined event.

     

    (c)           Subscriber
is purchasing the Securities subscribed for hereby for investment purposes for
their own account and not with a view to distribution or resale, nor with the
intention of selling, transferring or otherwise disposing of all or any part
thereof for any particular price, or at any particular time, or upon the
happening of any particular event or circumstances, except selling,
transferring, or disposing the Securities in full compliance with all applicable
provisions of the Act, the rules and regulations promulgated by the Commission
thereunder, and applicable state securities laws; and that an investment in the
Securities is not a liquid investment.  Subscriber understands that
the Company is publicly held, and that there is a limited trading market for its
securities.

     

    (d)           Subscriber
acknowledges that the Securities must be held indefinitely unless subsequently
registered under the Act or unless an exemption from such registration is
available.  Subscriber is aware of the provisions of Rule 144
promulgated under the Act, which permits limited resale of securities purchased
in a private placement subject to certain limitations and to the satisfaction of
certain conditions.


    
      
         


      

      
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    (e)           Subscriber
acknowledges that Subscriber has had the opportunity to ask questions of, and
receive answers from, the Company or any authorized person acting on its behalf
concerning the Company and its business and to obtain any additional
information, to the extent possessed by the Company (or to the extent it could
have been acquired by the Company without unreasonable effort or expense)
necessary to verify the accuracy of the information received by
Subscriber.  In connection therewith, Subscriber acknowledges that
Subscriber has had the opportunity to discuss the Company’s business, management
and financial affairs with the Company’s management or any authorized person
acting on its behalf.  Subscriber has received and reviewed the
Memorandum, and all the information that Subscriber desires.  Without
limiting the generality of the foregoing, Subscriber has been furnished with or
has had the opportunity to acquire, and to review all information that
Subscriber desires with respect to the Company’s business, management, financial
affairs and prospects.  In determining whether to make this
investment, Subscriber has relied solely on Subscriber’s own knowledge and
understanding of the Company and its business based upon Subscriber’s own due
diligence investigations and the information furnished pursuant to this
paragraph.  Subscriber understands that no person has been authorized
to give any information or to make any representations which were not contained
in the Memorandum and Subscriber has not relied on any other representations or
information.

     

    (f)           Subscriber
has all requisite legal and other power, authority and capacity to execute and
deliver this Subscription Agreement and to carry out and perform Subscriber’s
obligations under the terms of this Subscription Agreement.  This
Subscription Agreement constitutes a valid and legally binding obligation of
Subscriber, enforceable in accordance with its terms, and subject to laws of
general application relating to bankruptcy, insolvency and the relief of debtors
and other general principals of equity, whether such enforcement is considered
in a proceeding in equity or law.

     

    (g)           Subscriber
has carefully considered and has discussed with the Subscriber’s legal, tax,
accounting and financial advisors, to the extent the Subscriber has deemed
necessary, the suitability of this investment and the transactions contemplated
by this Subscription Agreement for the Subscriber’s particular federal, state,
local and foreign tax and financial situation and has independently determined
that this investment and the transactions contemplated by this Subscription
Agreement are a suitable investment for the Subscriber.  Subscriber
has relied solely on such advisors and not on any statements or representations
of the Company or any of its agents.  Subscriber understands that
Subscriber (and not the Company) shall be responsible for Subscriber’s own tax
liability that may arise as a result of this investment or the transactions
contemplated by this Subscription Agreement. 

     

    (h)           This
Subscription Agreement and the Confidential Purchase Questionnaire accompanying
this Subscription Agreement do not contain any untrue statement of a material
fact or omit any material fact concerning Subscriber. Subscriber has a net worth
and annual gross income as stated in the Purchaser Questionnaire, and all of the
answers and statements in the Purchaser Questionnaire are true and
correct.


    
      
         


      

      
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    (i)           There
are no actions, suits, proceedings or investigations pending against Subscriber
or Subscriber’s assets before any court or governmental agency (nor, to
Subscriber’s knowledge, is there any threat thereof) which would impair in any
way Subscriber’s ability to enter into and fully perform Subscriber’s
commitments and obligations under this Subscription Agreement or the
transactions contemplated hereby.

     

    (j)           The
execution, delivery and performance of and compliance with this Subscription
Agreement will not result in any material violation of, or conflict with, or
constitute a material default under, any of Subscriber’s articles of
incorporation or bylaws, if applicable, or any agreement to which Subscriber is
a party or by which Subscriber is bound, nor result in the creation of any
mortgage, pledge, lien, encumbrance or charge against any of the assets or
properties of Subscriber or the Securities.

     

    (k)           Subscriber
acknowledges that an investment in the Securities is speculative and involves a
high degree of risk and that Subscriber can bear the economic risk of the
purchase of the Securities, including a total loss of Subscriber’s investment.
Subscriber has adequate means of providing for current needs and personal
contingencies and has no need for liquidity in an investment in the
Securities.  Subscriber’s overall financial commitment to investments
that are not readily marketable is not disproportionate to Subscriber’s net
worth, and Subscriber’s investment in the Securities will not cause an overall
commitment to become excessive. Subscriber has no reason to anticipate any
change in Subscriber’s personal circumstances, financial or otherwise, which may
cause Subscriber to attempt to resell or transfer the Securities.

     

    (l)           Subscriber
acknowledges that he/she/it has carefully reviewed and considered the risk
factors discussed in the “Risk Factors” section of the Memorandum prior to
making an investment decision.

     

    (m)          Subscriber
recognizes that no federal, state or foreign agency has recommended or endorsed
the purchase of the Securities.

     

    (n)           Subscriber
is aware that the Securities are and will be, when issued, “restricted
securities” as that term is defined in Rule 144 promulgated under the
Act.

     

    (o)           Subscriber
understands that any and all certificates representing the Securities and any
and all securities issued in replacement thereof or in exchange therefore shall
bear the following legend or one substantially similar thereto, which Subscriber
has read and understands:

    


    “THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES NOR
ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT OR SUCH LAWS OR AN EXEMPTION FROM


    
      
         


      

      
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    REGISTRATION
UNDER SUCH ACT AND SUCH LAWS WHICH, IN THE OPINION OF COUNSEL FOR THIS
CORPORATION, IS AVAILABLE.”

     

    (p)           In
addition, the certificates representing the Securities, and any and all
securities issued in replacement thereof or in exchange therefore, shall bear
such legend as may be required by the securities laws of the jurisdiction in
which Subscriber resides.

     

    (q)           Because
of the restrictions imposed on resale, Subscriber understands that the Company
shall have the right to note stop-transfer instructions in its stock transfer
records, and Subscriber has been informed of the Company’s intention to do
so.  Any sales, transfers, or any other dispositions of the Securities
by Subscriber, if any, will be in compliance with the Act and all applicable
rules and regulations promulgated thereunder.

     

    (r)           Subscriber
acknowledges that Subscriber has such knowledge and experience in financial and
business matters that he is capable of evaluating the merits and risks of an
investment in the Securities and of making an informed investment decision.
Subscriber has read the Memorandum (including the business and risk factors
sections and financial statements provided herein) and understands and has
evaluated the risks and the terms of the offering made hereby.

     

    (s)           Subscriber
represents that:  (i) Subscriber is able to bear the economic risks of
an investment in the Securities and to afford the complete loss of the
investment, and (ii) (A) Subscriber could be reasonably assumed to have the
capacity to protect his/her/its own interests in connection with this
subscription; or (B) Subscriber has a pre-existing personal or business
relationship with either the Company or any affiliate thereof or of such
duration and nature as would enable a reasonably prudent purchaser to be aware
of the character, business acumen and general business and financial
circumstances of the Company or such affiliate and is otherwise personally
qualified to evaluate and assess the risks, nature and other aspects of this
subscription.

     

    (t)           Subscriber
further represents that the address set forth below is Subscriber’s principal
residence (or, if Subscriber is a company, partnership or other entity, the
address of its principal place of business); that Subscriber is purchasing the
Securities for Subscriber’s own account and not, in whole or in part, for the
account of any other person; Subscriber is purchasing the Securities for
investment and not with a view to resale or distribution; and that Subscriber
has not formed any entity for the purpose of purchasing the
Securities.

     

    (u)           Subscriber
understands that the Company shall have the unconditional right to accept or
reject this subscription, in whole or in part, for any reason or without a
specific reason, in the sole and absolute discretion of the Company (even after
receipt and clearance of Subscriber’s funds).  This Subscription
Agreement is not binding upon the Company until accepted in writing by an
authorized officer of the Company.  In the event that the subscription
is rejected, then Subscriber’s subscription funds (to the extent of such
rejection) will be returned promptly in full without interest thereon or
deduction therefrom.


    
      
         


      

      
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    (v)           Reserved.

     

    (w)           Subscriber
represents that Subscriber is not subscribing for Securities as a result of or
subsequent to any advertisement, article, notice or other communication
published in any newspaper, magazine or similar media or broadcast over the
Internet, television or radio or presented at any seminar or meeting or any
public announcement by the Company.

     

    (x)           Subscriber
has carefully read this Subscription Agreement and the Memorandum, and
Subscriber has accurately completed the Confidential Purchaser Questionnaire
which accompanies this Subscription Agreement.

     

    (y)           No
representations or warranties have been made to Subscriber by the Company, or
any officer, employee, agent, affiliate or subsidiary of the Company, other than
the representations of the Company contained herein, and in subscribing for the
Securities the Subscriber is not relying upon any representations other than
those contained in the Memorandum or in this Subscription
Agreement.

     

    (z)           To
the best of Subscriber’s knowledge, that except as has otherwise been disclosed
to Company in writing, no finder, broker, agent, financial advisor or other
intermediary, nor any purchaser representative or any broker-dealer acting as a
broker, is entitled to any compensation in connection with the transactions
contemplated by this Subscription Agreement.

     

    (aa)         Subscriber
has: (i) not distributed or reproduced the Memorandum, in whole or in part, at
any time, without the prior written consent of the Company, (ii) kept
confidential the existence of the Memorandum and the information contained
therein or otherwise made available in connection with any further investigation
of the Company and (iii) refrained and shall refrain from trading in any
publicly-traded securities of the Company or any other relevant company for so
long as such recipient has been in possession of the material non-public
information contained in the Memorandum.

     

    (bb)         If
Subscriber is a corporation, partnership, limited liability company, trust or
other entity, the person executing this Subscription Agreement hereby represents
and warrants that the above representations and warranties shall be deemed to
have been made on behalf of such entity and the Subscriber has made such
representations and warranties after due inquiry to determine the truthfulness
of such representations and warranties.

     

    (cc)         
If the Subscriber is a corporation, partnership, limited liability company,
trust or other entity: (i) it is duly organized, validly existing and in good
standing in its jurisdiction of incorporation or organization and has all
requisite power and authority to execute and deliver this Subscription Agreement
and purchase the Securities, as provided herein; (ii) the purchase of the
Securities will not result in any violation of, or conflict with, any term or
provision of the charter, bylaws or other organizational documents of Subscriber
or any other instrument or agreement to which the Subscriber is a party or is
subject; (iii) the execution and delivery of this Subscription Agreement and
Subscriber’s purchase of the Securities has been duly authorized by all
necessary


    
      
         


      

      
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    action on
behalf of the Subscriber and constitute a legal, valid and binding agreement of
Subscriber.

    


    3.           
 Representations
and Warranties of the Company.  The Company represents and
warrants to Subscriber as follows:

     

    (a)           The
Company is duly organized and validly exists as a corporation in good standing
under the laws of the State of Delaware.

     

    (b)           The
Company has all such corporate power and authority to enter into, deliver and
perform this Subscription Agreement.

     

    (c)           All
necessary corporate action has been duly and validly taken by the Company to
authorize the execution, delivery and performance of this Subscription Agreement
by the Company, and the issuance and sale of the Securities to be sold by the
Company pursuant to this Subscription Agreement.  This Subscription
Agreement has been duly and validly authorized, executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors’ rights
generally and by general equitable principles, whether such enforcement is
considered in a proceeding in equity or in law.

     

    (d)           The
authorized capital stock of the Company consists of 99,000,000 shares of the
Common Stock, of which ______________ shares
is issued and outstanding as of May 29, 2009, and 1,000,000 shares of preferred
stock, $0.00015 par value, of which 660,000 shares have been designated Series A
Convertible 8% Preferred Stock and 2,000 have been designated Series B
Convertible Preferred Stock, and of which 60,000 shares of Series A Preferred
Stock and no shares of Series B Preferred stock are issued and outstanding as of
the date hereof, and the designations, powers, preferences, rights,
qualifications, limitations, and restrictions in respect of each class and
series of authorized capital stock of the Company, as set forth in the Company’s
articles of incorporation, as amended (the “Articles of Incorporation”) and the
Certificate, will be valid, binding and enforceable, and in accordance with all
applicable laws. Except as disclosed in the Memorandum, (i) there is no
commitment by or obligation of the Company to issue any shares of capital stock,
subscriptions, warrants, options, convertible securities, or other similar
rights to purchase or receive Company securities or to distribute to the holders
of any of its equity securities any evidence of indebtedness, cash, or other
assets, (ii) the Company is under no obligation (contingent or otherwise) to
purchase, redeem, or otherwise acquire any of its equity or debt securities or
any interest therein or to pay any dividend or make any other distribution in
respect thereof, and (iii) there are no voting trusts or similar agreements,
stockholders’ agreements, pledge agreements, transfer restrictions, buy-sell
agreements, rights of first refusal, preemptive rights, or proxies relating to
any securities of the Company. Except as set forth in the Memorandum, no person
holds of record or, to the best of the Company’s knowledge, beneficially, 5% or
more of the outstanding shares of the capital stock of the Company. All
outstanding securities of the Company were issued in compliance with applicable
Federal and state securities laws. The capital stock of the Company conforms in
all material respects to the


    
      
         


      

      
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    description
thereof contained in the Memorandum. Except as disclosed in the Memorandum, the
Offering or sale of the Shares as contemplated in the Transaction Documents will
not give rise to any rights for or relating to the registration of any shares of
Common Stock other than the registration rights of the holders of the Shares and
pursuant to the Warrants.

     

    (e)           Neither
the Memorandum nor the Subscription Documents contain any untrue statement of a
material fact, and will not omit to state any material fact necessary in order
to make the statements made, in light of the circumstances under which they were
made, not misleading.

     

    (f)           Other
than as set forth in the Memorandum, neither the Company nor any Subsidiary is
in: (i) violation of its certificate or articles of incorporation, by-laws or
other organizational documents, (ii) default under, and no event has occurred
which, with notice or lapse of time or both, would constitute a default under or
result in the creation or imposition of any Lien upon any of its property or
assets pursuant to, any material indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which it is a party or by which it
is bound or to which any of its property or assets is subject or (iii) violation
in any respect of any law, rule, regulation, ordinance, directive, judgment,
decree or order of any judicial, regulatory or other legal or governmental
agency or body, foreign or domestic, except (in the case of clause (ii) above)
for any Lien disclosed in the Memorandum and the exhibits thereto and except, in
the cases of (ii) and (iii), where such defaults or violations do not,
individually or in the aggregate, have a Material Adverse Effect.

     

    (g)           The
Company has never declared, paid or made any dividends or other distributions of
any kind on or in respect of its capital stock other than as set forth in the
Memorandum.

     

    (h)           Except
as disclosed in the Memorandum, since December 31, 2008, there has been no
material adverse change (or any development involving a prospective material
adverse change), whether or not arising from transactions in the ordinary course
of business, in or affecting: (i) the business, condition (financial or
otherwise), results of operations, shareholders’ equity, properties or prospects
of the Company and each Subsidiary, taken as a whole; (ii) the long-term debt or
capital stock of the Company or any of its Subsidiaries; or (iii) the Placement
or consummation of any of the other transactions contemplated by the Memorandum
and hereby.  Since the date of the latest balance sheet presented in
or attached to the Memorandum, neither the Company nor any Subsidiary has
incurred or undertaken any liabilities or obligations, whether direct or
indirect, liquidated or contingent, matured or unmatured, or entered into any
transactions, including any acquisition or disposition of any business or asset,
which are materially adverse to the Company and the Subsidiaries taken as a
whole, except for liabilities, obligations and transactions which are disclosed
in the Memorandum and the exhibits thereto or incurred in the ordinary course of
business.

     

    (j)           The
financial statements, including the notes thereto, and the supporting schedules
included in the Memorandum present fairly, in all material respects and as of
the dates indicated


    
      
         


      

      
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    and for
the periods specified the financial position and the cash flows and results of
operations of the Company and the Subsidiaries.  The supporting
schedules, if any, included in the Memorandum present fairly the information
required to be stated therein.  The other financial and statistical
information included in the Memorandum present fairly the information included
therein in all material respects.

     

    (j)           No
consent, approval, authorization or order of any court or governmental or
regulatory agency or body or any individual or entity is required on the part of
the Company or any Subsidiary for the lawful consummation of the transactions
contemplated hereby and thereby, except for such consents and approvals with
respect to the offer and sale of the Securities.

     

    (k)           Each
of the Company and the Subsidiaries has all necessary consents, approvals,
authorizations, orders, registrations, qualifications, licenses, filings and
permits of, with and from all applicable judicial, regulatory and other legal or
governmental agencies and bodies and all third parties, foreign and domestic
(collectively, the “Consents”), to own, lease and
operate their respective properties and conduct their respective businesses as
are now being conducted and as disclosed in the Memorandum, except where the
failure to have any such Consent would not have a Material Adverse
Effect.  Each such Consent is valid and in full force and effect, and
neither the Company nor any Subsidiary has received written notice of any
investigation or proceedings which results in or, if decided adversely to the
Company or any Subsidiary, could reasonably be expected to result in, the
revocation of, or imposition of a materially burdensome restriction on, any
Consent.

     

    (l)           The
Company and each Subsidiary: (i) owns or possesses all rights to use, option
and/or license, as the case may be, all patents, patent applications,
provisional patents, trademarks, service marks, trade names, trademark
registrations, service mark registrations, copyrights, licenses, formulae, mask
works, customer lists, internet domain names, know-how and other intellectual
property (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures, “Intellectual Property”)
necessary for the conduct of their respective businesses as being conducted and
as described in the Memorandum and (ii) does not believe that the conduct of
their respective businesses does or will conflict with, and have not received
any notice of any claim of conflict with, any such right of others, which
conflict would have a Material Adverse Effect.  To the best of the
Company’s knowledge, all Intellectual Property developed by and belonging to the
Company or any Subsidiary (including, without limitation, that which is
developed by consultants to the Company or any Subsidiary) which has not been
patented has been kept confidential so as, among other things, all such
information may be deemed proprietary to the Company.  To the
Company’s knowledge, there is no infringement by third parties of any
Intellectual Property.  There are no pending or, to the Company’s
knowledge, threatened actions, suits, proceedings or claims by others
challenging the Company’s or any Subsidiary’s rights in or to any Intellectual
Property, and there are no facts to the knowledge of the Company which would
form a reasonable basis for any such claim.  There is no pending or,
to the Company’s knowledge, threatened action, suit, proceeding or claim by
others that the Company or any Subsidiary infringes or otherwise
violates

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    any
Intellectual Property rights of others, in each case which would be reasonably
likely to have a Material Adverse Effect, and the Company is unaware of any
other fact which would form a reasonable basis for any such claim.

    


    4.            
Indemnification.  Subscriber
agrees to indemnify and hold harmless the Company, the Selling Agent, and their
respective officers, directors, employees, shareholders, agents representatives
and affiliates, and any person acting for or on behalf of the Company or Selling
Agent, from and against any and all damage, loss, liability, cost and expense
(including reasonable attorneys’ fees and disbursements) which any of them may
incur by reason of the failure by Subscriber to fulfill any of the terms and
conditions of this Subscription Agreement, or by reason of any breach of the
representations and warranties made by Subscriber herein, or in any other
document provided by Subscriber to the Company in connection with the subject
matter hereof.  All representations, warranties and covenants of each
of Subscriber and the Company contained herein shall survive the acceptance of
this subscription and the Closings.

     

    5.            
Reserved.

     

    6.         
   Miscellaneous.

     

    (a)           Subscriber
agrees not to transfer or assign this Subscription Agreement or any of
Subscriber’s interest herein and further agrees that the transfer or assignment
of the Securities acquired pursuant hereto shall be made only in accordance with
all applicable laws.

     

    (b)           Subscriber
agrees that Subscriber cannot cancel, terminate, or revoke this Subscription
Agreement or any agreement of Subscriber made hereunder, and this Subscription
Agreement shall survive the death or legal disability of Subscriber and shall be
binding upon Subscriber’s heirs, executors, administrators, successors, and
permitted assigns.

     

    (c)           Subscriber
has read and has accurately completed this entire Subscription
Agreement.

     

    (d)           This
Subscription Agreement, together with the Memorandum and the Confidential
Purchaser Questionnaire, constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof and may be amended or waived
only by a written instrument executed by all parties.

     

    (e)           Subscriber
acknowledges that it has been advised to consult with Subscriber’s own attorney
or accountant regarding this subscription and Subscriber has done so to the
extent that Subscriber deems appropriate.  Subscriber understands and
agrees that Subscriber has not been represented in this transaction by counsel
to the Company or the Selling Agent.

     

    (f)           Any
notice or other document required or permitted to be given or delivered to the
parties hereto shall be in writing and sent: (i) by fax if the sender on the
same day sends a confirming copy of such notice by a recognized overnight
delivery service (charges prepaid), or


    
      
         


      

      
        10

        
          

        

      

      
         


      

    


    (b) by
registered or certified mail with return receipt requested (postage prepaid) or
(c) by a recognized overnight delivery service (with charges
prepaid).

    


    If to the
Company, at:

    


    Hybrid Dynamics
Corporation

    892 North 340 East

    American
Fork, UT 84003

    Attn:
Chief Executive Officer

    


    If to the
Subscriber, at:

    


    His, her
or its address set forth on the signature page to this Subscription Agreement,
or such other address as Subscriber shall have specified to the Company in
writing.

     

    (g)           Failure
of the Company to exercise any right or remedy under this Subscription Agreement
or any other agreement between the Company and the Subscriber, or otherwise, or
delay by the Company in exercising such right or remedy, will not operate as a
waiver thereof.  No waiver by the Company will be effective unless and
until it is in writing and signed by the Company.

     

    (h)           This
Subscription Agreement shall be enforced, governed and construed in all respects
in accordance with the laws of the State of New York, as such laws are applied
by the New York courts except with respect to the conflicts of law provisions
thereof, and shall be binding upon the Subscriber, the Subscriber’s heirs,
estate, legal representatives, successors and permitted assigns and shall inure
to the benefit of the Company, its successors and assigns.

     

    (i)           Any
legal suit, action or proceeding arising out of or relating to this Subscription
Agreement or the transactions contemplated hereby shall be instituted
exclusively in the State of New Jersey, or in the United States District Court
for the ______________.  The
parties hereto hereby:  (i) waive any objection which they may now
have or hereafter have to the venue of any such suit, action or proceeding, and
(ii) irrevocably consent to the jurisdiction of the _________________, and
the United States District Court for the ______________ in any
such suit, action or proceeding.  The parties further agree to accept
and acknowledge service of any and all process which may be served in any such
suit, action or proceeding in the ______________ k, or
in the United States District Court for the ______________ and
agree that service of process upon a party mailed by certified mail to such
party’s address shall be deemed in every respect effective service of process
upon such party in any such suit, action or proceeding.

     

    (j)           If
any provision of this Subscription Agreement is held to be invalid or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed modified to conform to such statute or rule of
law.  Any provision hereof that may prove invalid


    
      
         


      

      
        11

        
          

        

      

      
         


      

    

     

    or
unenforceable under any law shall not affect the validity or enforceability of
any other provisions hereof.

     

    (k)           The
parties understand and agree that money damages would not be a sufficient remedy
for any breach of the Subscription Agreement by the Company or the Subscriber
and that the party against which such breach is committed shall be entitled to
equitable relief, including injunction and specific performance, as a remedy for
any such breach, without the necessity of establishing irreparable harm or
posting a bond therefore.  Such remedies shall not be deemed to be the
exclusive remedies for a breach by either party of the Subscription Agreement
but shall be in addition to all other remedies available at law or equity to the
party against which such breach is committed.

     

    (l)           All
pronouns and any variations thereof used herein shall be deemed to refer to the
masculine, feminine, singular or plural, as identity of the person or persons
may require.

     

    (m)         This
Subscription Agreement may be executed in counterparts and by facsimile, each of
which shall be deemed an original, but all of which shall constitute one and the
same instrument.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
 

    
      
         


      

      
        12

        
          

        

      

      
         


      

    


    Signature
Page for Individuals:

    


    IN WITNESS WHEREOF, Subscriber has
caused this Subscription Agreement to be executed as of the date indicated
below.

    


    
      	
               

              $___________________________________

            	
               

              ___________________________________

            
	
              Purchase
      Price ($10,000.00 per unit)

               

            	
              Number
      of Units

            
	
              ____________________________________

            	
              ___________________________________

            
	
              Print
      or Type Name

               

            	
              Print
      or Type Name (Joint-owner)

               

            
	
              ____________________________________

            	
              ___________________________________

            
	
              Signature

               

            	
              Signature
      (Joint-owner)

               

            
	
              ___________________________________

            	
              __________________________________

            
	
              Date

               

            	
              Date
      (Joint-owner)

               

            
	
              ____________________________________

            	
              ___________________________________

            
	
              Social
      Security Number

               

            	
              Social
      Security Number (Joint-owner)

               

            
	
              ___________________________________

            	
              ____________________________________

               

            
	
              ___________________________________

            	
              ____________________________________

            
	
              Address

            	
              Address
      (Joint-owner)

            
	 	 
	 	 
	
              _______
      Joint Tenancy 

            	______
      Tenants in Common
	 	 


    

     

    _______
Tenancy by the Entirety

    


    Wiring
Instructions:

    


    
      	
              Bank
      Name:

            	 
      	 
      
	
              ABA
      #:

            	 
      	 
      
	
              Acct
      #:

            	 
      	 
      
	
              Acct.
      Name:

            	 
      	
              Hybrid
      Dynamics Corporation

            


    

     

     

     

    
 

    
      
         


      

      
         

        
          

        

      

      
         


      

    


    Partnerships,
Corporations or Other Entities:

    


    


    IN WITNESS WHEREOF, Subscriber has
caused this Subscription Agreement to be executed as of the date indicated
below.

    


    


    $
______________________________                                                                                                                    
   ______________________________

       Total
Purchase Price ($50,000.00 per
unit)                                                                                                                                 
    Number of Units

    


    


    ____________________________________

    Print or
Type Name of Entity

    


    


    _________________________________________________________________________________________________________________

    Address

    


    


    ____________________________________                                                                                                ____________________________________

    Taxpayer
I.D. No. (if
applicable)                                                                                                                           
Date

    


    


    


    By:
____________________________________                                                                                         ____________________________________

    Signature: 
Name:                                                                                                                                                     Print
or Type Name and Indicate

        Title:                                                                                                                                                      
Title or Position with Entity

    


    


    ____________________________________                                                                                                ____________________________________

    Signature
(other authorized
signatory)                                                                                                                Print
or Type Name and Indicate

                                                                       Title
or Position with Entity

    


    


    


    Wiring
Instructions:

    


    
      	
              Bank
      Name:

            	 
      	 
      
	
              ABA
      #:

            	 
      	 
      
	
              Acct
      #:

            	 
      	 
      
	
              Acct.
      Name:

            	 
      	
              Hybrid
      Dynamics Corporation

            


    

    


    


    



    
      
         


      

      
         


        
          

        

      

      
         


      

    


    [Company
Execution Page for Subscription Agreement]

    


    


    IN WITNESS WHEREOF, the
Company has caused this Subscription Agreement to be executed, and the foregoing
subscription accepted, as of the date indicated
below.

     

    
      
        
          
            
              
                
                  	 	HYBRID
      DYNAMICS CORPORATION	 
	 	 	 	 
	 	 	 	 
	
                           

                        	
                          By:
      

                        	______________________________________________________	 
	 	 	Name:	 
	 	 	Title:	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	Date:
      __________________________, 2007