Exhibit 4.1
SUBSCRIPTION AGREEMENT
SUBSCRIPTION OFFER
TO: IQ POWER TECHNOLOGY INC. (the "Issuer")
a corporation incorporated under the laws of Canada ▇▇▇▇ ▇▇▇▇
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AND TO: IPO CAPITAL CORP. (the "Agent")
The undersigned purchaser ("Purchaser") hereby irrevocably subscribes for and
agrees to purchase on the Private Placement Subscription Terms and Conditions
set out in Sections 1 through 6 attached:
----------- common shares (the "Shares") of the Issuer, at a price per Share of
US$1.00 (the "Subscription Price"), for an aggregate purchase price (the
"Purchase Price") of US$ ---------------
The execution by the Purchaser of this Agreement will constitute an irrevocable
offer by the Purchaser to the Issuer to subscribe for the Shares. The acceptance
of such offer by the Issuer, as evidenced by the signature of its authorized
officer below, will constitute an agreement between the Purchaser and the Issuer
for the Purchaser to purchase from the Issuer and for the Issuer to issue and
sell to the Purchaser the Shares upon the terms and conditions contained herein
and to issue the Shares in accordance with the Registration Instructions and
Delivery Instructions indicated below.
DATED at --------------, in the ----------- of ------------------, on
--------------------, 1999.
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(Name of Purchaser - please print) (Purchaser's Address)
By:
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Authorized Signature
( )
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(Official Capacity or Title - please print) (Telephone and Telecopier Numbers)
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(Please print name of individual whose (Please print name of individual whose
signatures appears above if different than signatures appears above if different than
the name of the Purchaser printed above) the name of the Purchaser printed above)
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(Print the jurisdiction of incorporation for a corporate
Purchaser)
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Registration Instructions: Delivery Instructions:
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Registered Owner Address
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Account reference, if applicable Account reference, if applicable
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Address Contact Name
( )
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Share Certificate Splits Telephone Number
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SUBSCRIPTION ACCEPTANCE
The Subscription Offer is hereby accepted The obligations of the Agent under this Agreement
by the Issuer are effective --------, 1999. are hereby accepted and agreed to by the Agent
effective ---------------------, 1999.
IQ POWER TECHNOLOGY INC. IPO CAPITAL CORP.
Per: ---------------------------------- Per: ----------------------------------
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PRIVATE PLACEMENT SUBSCRIPTION TERMS AND CONDITIONS
1. PURCHASE AND SALE OF SHARES
1.1 The Purchaser, as principal, hereby subscribes for and agrees to purchase,
and the Issuer agrees to issue to the Purchaser, the Shares for the Subscription
Price per Share (the "Private Placement").
1.2 The Private Placement is part of an offering of up to 5,500,000 Shares by
the Issuer (the "Offering") having a minimum subscription per Purchaser of
25,000 Shares (US$25,000) although the Issuer may, in its sole discretion,
accept a lesser amount.
1.3 The Purchaser shall pay the aggregate acquisition cost of the Shares (the
"Purchase Price"), being the Subscription Price multiplied by the number of
Shares, to the Agent on the date of execution of this Agreement (the "Payment
Day") and the Agent shall hold those funds in escrow and release them to the
Issuer at closing (the "Closing") in accordance with subsections 1.4 through
1.7.
1.4 The Purchase Price will be held in escrow by the Agent and will be released
to the Issuer after
a. the Issuer receives subscriptions for at least 3,000,000 Shares in the
aggregate from all subscribers on terms equivalent to the Private
Placement; and
b. the registration statement of the Issuer on Form 8-A under the Shares and
Exchange Act of 1934, as amended, has been declared effective by the United
States Securities and Exchange Commission.
1.5 The Closing of the purchase and sale of the Shares will take place upon
acceptance by the Issuer of the Subscription Offer of the Purchaser and the
release of the Purchase Price to the Issuer by the Agent from escrow.
1.6 At the Closing, the Issuer shall deliver one or more share certificates
representing the number of Shares purchased in accordance with the registration
instructions and delivery instructions provided on the subscription form
attached.
1.7 The Issuer and the Purchaser also hereby agree to execute and deliver at
Closing such other documents as may be necessary or appropriate to complete such
Closing.
1.8 The Purchaser acknowledges that although a number of other subscriptions for
Shares may be closed concurrent with the Closing, there may also be other
separate closings under the Offering, some or all of which may occur before or
after the Closing. As a result, there may be several Closings. To the extent
that the Closing forms part of the initial closings of subscriptions under the
Offering, the Purchaser is aware of the risk that insufficient further funds may
be raised to meet the objectives of the Issuer.
1.9 The Subscription Offer attached shall be deemed an offer to acquire up to
the number of Shares indicated thereon and the Issuer may accept or reject any
Subscription Offer in whole or in part or may elect to allot to the Purchaser
less than the number of Shares applied for by the Purchaser in which event the
Subscription Offer shall be deemed amended to be for the number of Shares
allotted by the Issuer without the need to obtain an amendment or any consent
thereto from the Purchaser. If the Issuer rejects the Subscription Offer of the
Purchaser or elects to allot to the Purchaser less than the number of Shares
applied for, the Agent will return to the Purchaser that part of the Purchase
Price not required to purchase the Shares allotted without interest or deduction
forthwith after determining the allotment of Shares hereunder.
2. ACKNOWLEDGMENTS OF THE SUBSCRIBER
The Purchaser acknowledges and declares that:
a. the Purchaser is aware that the Shares have not been qualified under the
Shares Act, R.S.B.C. 1996, c.418 (the "Act"), or the Securities Rules (the
"Rules") or the Securities Regulation (the "Regulation") promulgated under
the Act (collectively the Act, the Rules, and the Regulation shall be
referred to as the "Legislation") for distribution to the public, that no
prospectus has been filed by the Issuer under the Act in connection with
the distribution of the Shares, and that the Issuer is relying on
exemptions from the registration and prospectus requirements of the
Legislation in respect of the distribution of the Shares, and that as a
result:
i. the Purchaser is restricted from using most of the civil remedies
available under the Legislation,
ii. the Purchaser may not receive information that would be otherwise
available to him under the Legislation in connection with his purchase
of the Shares, and
iii. the Purchaser is relieved from certain obligations that would
otherwise apply under the Legislation;
b. the Purchaser is aware that the Shares form a part of a private placement
offering of up to an aggregate of 5,500,000 Shares by the Issuer, as more
particularly described in the Offering Memorandum, and that there is no
minimum subscription for such offering and therefore any subscription funds
may be accepted and used by the Issuer;
c. the Purchaser is aware and has been advised that his subscription funds
will represent "risk" capital for the Issuer at a speculative stage of the
development of the Issuer;
d. no person has made to the Purchaser any written or oral representations:
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i. that any person will resell or repurchase the Shares,
ii. that any person will refund the purchase price of the Shares except in
accordance with this Agreement, or
iii. as to the future price or value of the Shares;
e. no information or representation concerning the Issuer has been provided to
the Purchaser by the Issuer or the Agent other than those contained in this
Agreement and in the Offering Memorandum, and that the Purchaser is relying
entirely upon information or documents made available by the Issuer to make
a decision to purchase the Shares subscribed for hereunder;
f. there are restrictions on the ability of the Purchaser to resell the Shares
and it is the responsibility of the Purchaser to find out what those
restrictions are and to comply with them before selling the Shares and it
is not the obligation of the Issuer or the Agent or their respective
solicitors to keep the Purchaser informed in this regard and, without
limiting the generality of the foregoing, the resale of the Shares will be
subject to resale restrictions, including a hold period, which will make it
very difficult if not impossible, to resell the Shares in British Columbia;
g. where the sale of the Shares is exempted under paragraph (a), (b), or (c)
of section 128 of the Rules or under section 76 of the Act in circumstances
requiring delivery of an Offering Memorandum, the Purchaser has been
provided with and has read and understood the offering memorandum of the
Issuer (the "Offering Memorandum") prepared and delivered in connection
with the sale of the Shares, and has based its decision to invest in the
Issuer solely on the disclosure set out therein;
h. the Issuer has recommended the Purchaser seek and obtain independent legal
advice from the solicitor for the Purchaser with respect to this Agreement
prior to its execution and has provided the Purchaser with sufficient
opportunity to do so and the Purchaser further acknowledges that it
understands the terms, and its rights and obligations under this Agreement;
i. no securities commission or similar regulatory authority has reviewed or
passed on the merits of the Shares;
j. there is no government or other insurance covering the Shares; and
k. there are risks associated with the purchase of the Shares.
3. REPRESENTATIONS AND WARRANTIES OF THE SUBSCRIBER
The Purchaser represents and warrants to the Issuer as of the date of the
Subscription Offer and at the Closing that:
a. the Purchaser is resident at the address set forth on the Subscription
Offer;
b. the Purchaser is purchasing the Shares as principal and no other person,
firm or corporation will have a beneficial interest in the Shares;
c. the statements of fact set out in any Form 20A (IP) or Form 20A (NIP)
delivered to the Issuer by the Purchaser with the Subscription Offer are
true and correct;
d. the Purchaser is either:
i. a person exempted under section 74(2)(1) of the Act,
ii. designated by the Executive Director under the Act (the "Executive
Director") as an exempt purchaser under section 74(2)(3) of the Act,
iii. purchasing as a principal where the Purchase Price exceed Cdn$97,000
under section 74(2)(4) of the Act and, where the Purchaser is a
resident of Ontario, Cdn $150,000,
iv. a person exempted under section 74(2)(9) of the Act who was not
induced to purchase the Shares by expectation of employment or
continued employment,
v. a person exempted under paragraph (a) of section 128 of the Rules by
virtue of being
A. a "sophisticated purchaser" as defined in Appendix A to the Form
20A (NIP) attached hereto (a "Sophisticated Purchaser"),
B. a spouse, parent, brother, sister or child of a senior officer or
director of the Issuer, or of an affiliate of the Issuer, or
C. a company, all the voting securities of which are beneficially
owned by one or more of a senior officer or director of the
Issuer, or of an affiliate of the Issuer, or a spouse, parent,
brother, sister or child of a senior officer or director of the
Issuer, or of an affiliate of the Issuer,
vi. a person exempted under paragraph (b) of section 128 of the Rules by
virtue of being a Sophisticated Purchaser where the Purchase Price are
not less than Cdn$25,000,
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vii. a person exempted under paragraph (c) of section 128 of the Rules by
virtue of an authorized signatory having spoken to a person (the
"Registered Person") who has advised that signatory that the
Registered Person is registered to trade or advise in the Shares and
that the purchaser of the Shares is a suitable investment for the
Purchaser where the Purchase Price are not less than Cdn$25,000,
viii.a person exempted under section 76 of the Act by reason of BOR #97/4
or otherwise;
e. the Subscription Offer was not solicited in any manner contrary to the
Legislation;
f. the Shares are being purchased for investment purposes only and not with a
view to resale or distribution;
g. the Purchaser is not acquiring the Shares as a result of any material
information about the affairs of the Issuer that has not been publicly
disclosed, save knowledge of this particular transaction;
h. the Purchaser will sell, assign or transfer the Shares only in accordance
with the requirements of all applicable legislation;
i. where the Purchaser is a corporation, the Purchaser is duly incorporated
and validly subsisting under the laws of its jurisdiction of incorporation
and all necessary approvals by its directors, shareholders and others have
been given to authorize execution of this Agreement on behalf of the
Purchaser and the entering into of this Agreement, and the transactions
contemplated hereby will not result in the violation of any of the terms
and provisions of any law applicable to, or the constating documents of,
the Purchaser or of any agreement, written or oral, to which the Purchaser
may be a party or by which he is or may be bound;
j. this Agreement has been duly executed and delivered by the Purchaser and
constitutes a valid and binding agreement of the Purchaser enforceable
against the Purchaser;
k. the Purchaser is not purchasing the Shares as a result of any advertisement
of the Shares or the Offering; and
l. if the Purchaser is more than one person, the obligations of the Purchaser
hereunder shall be joint and several and the agreements, representations,
warranties and acknowledgments herein contained shall be deemed to be made
by and be binding upon each such person and his/her heirs, executors,
administrators, successors, legal representatives and permitted assigns.
4. REPRESENTATIONS AND WARRANTIES OF THE ISSUER
The Issuer represents and warrants to the Purchaser that the Shares issued to
the Purchaser pursuant to this Agreement will be duly authorized, validly
issued, fully paid and non-assessable.
5. GENERAL
5.1 The parties hereto agree to do or cause to be done all acts or things
necessary to implement and carry into effect the provisions of and the intent of
this Agreement including executing any undertakings required by the regulatory
authorities or exchanges and furnishing, executing and delivering such documents
and instruments and taking such other action as a party may reasonably request
of the other as necessary or desirable to carry out the transactions
contemplated herein, and the Purchaser specifically agrees to execute and
deliver to the Issuer the Form 20A Acknowledgement and Undertaking as required
under the Rules, copies of which have been provided to the Purchaser.
5.2 All funds referred to under the terms of this Agreement shall be funds
designated in the lawful currency of the United States of America.
5.3 This Agreement, including all matters of construction, validity and
performance, shall be governed by and construed and enforced in accordance with
the internal laws of the Province of British Columbia, Canada, without giving
effect to any laws or principles that would apply the laws of any other
jurisdiction. Any action or proceeding seeking to enforce any provision of, or
based on any right arising out of, this Subscription Agreement may be brought
against either of the parties in the courts of British Columbia, Canada, and
each of the parties irrevocably consents to the non-exclusive jurisdiction of
such courts (and of the appropriate appellate courts) in any such action or
proceeding and waives any objection to venue laid therein. Process in any action
or proceeding referred to in the preceding sentence may be served on either
party anywhere in the world.
5.4 For valuable consideration received, the Purchaser waives the need for the
Issuer to communicate acceptance of the Subscription Offer of the Purchaser for
the Shares and agrees that the Subscription Offer is irrevocable by the
Purchaser and, except as required by law, the Purchaser is not entitled to
cancel, terminate or revoke this Agreement, and this Agreement shall survive the
death or disability of the Purchaser and shall be binding upon and inure to the
benefit of the parties and their heirs, executors, administrators, successors,
legal representatives and permitted assigns once executed by the Purchaser.
5.5 This Agreement shall enure to the benefit of and be binding upon the parties
hereto and their respective heirs, administrators, successors and assigns.
5.6 The obligations of the Issuer under this Agreement are subject to and
conditional upon the Exchange providing the Issuer with written notice that it
has accepted the Private Placement for filing within 3 months of the reference
date of this Agreement, failing which this Agreement may be declared null and
void by the Issuer at any time prior to Closing.
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5.7 This subscription, upon acceptance by the Issuer, will represent the entire
agreement of the parties hereto with respect to the subject matter hereof and
there are no representations, warranties, covenants, other agreements or
understandings, oral and written, relating to the subject matter hereof except
as stated or referred to in this subscription. It supersedes and merges within
it all prior agreements or understandings between the parties, whether written
or oral. In interpreting or construing this Agreement, the fact that one or the
other of the parties may have drafted this Agreement or any provision shall not
be given any weight or relevance.
5.8 Neither this subscription agreement nor any provision hereof shall be
modified, changed, discharged or terminated except by an instrument in writing
signed by the party against whom any waiver, change, discharge or termination is
sought.
5.9 Time is of the essence of this Agreement and will be calculated in
accordance with the provisions of the Interpretation Act (British Columbia).
5.10 The Purchaser will have the contractual rights of action described in the
Offering Memorandum which rights are incorporated by reference herein.
5.11 Any notice under this Agreement must be in writing, delivered, telecopied
or mailed by prepaid post, addressed to the party to which notice is to be given
at the address for such party indicated herein or at another address designated
by either party in writing. Notice which is delivered or telecopied will be
deemed to have been given at the time of transmission or delivery. If notice is
by mail it will be deemed to have been given 48 hours following the date of
mailing. If there is an interruption in normal mail service at or prior to the
time a notice is mailed, the notice must be delivered or telecopied.
5.12 The representations, warranties and covenants of the parties contained in
this Agreement will survive the Closing of the purchase and sale of the Shares.
6. POWER OF ATTORNEY TO COMPLETE
PRIVATE PLACEMENT DOCUMENTS
(If the Purchaser does not want to grant the following power of attorney,
please cross out section 6 and initial at either end of the cross-out lines).
Effective upon the execution of this Agreement by the Issuer, the Purchaser:
a. irrevocably appoints the President of the Issuer (the "Attorney") as the
attorney and agent for the Purchaser, with a full power of substitution, to
execute, swear to, acknowledge, deliver, make, file, amend and record when,
and as, necessary any instrument, acknowledgment, undertaking, direction or
other document required to be filed by the Issuer or the Purchaser with any
competent securities regulatory authority or stock exchange in connection
with the purchase and sale of the Shares or necessary, in the opinion of
the Attorney, to complete or perfect the transactions contemplated by this
subscription, including, without limitation, any Form 20A required under
the Rules;
b. declares that the power of attorney hereby granted is irrevocable and will
survive the death, incapacity or bankruptcy of the Purchaser and will
extend to and bind the Purchaser and the heirs, assigns, executors,
trustees in bankruptcy or other legal representatives or successors of the
Purchaser; and
c. agrees to be bound by any representations made or actions taken by the
Attorney if such representations or actions are made or taken in good faith and
in accordance with the power of attorney hereby granted, and the Purchaser
waives any and all defences which may be available to the Purchaser to deny,
contest, or disaffirm any such representations or actions.