EXHIBIT 6.44
CONVERTIBLE DEBENTURE
iQ POWER TECHNOLOGY INC. XXXX XXXXXX
(the "Debtor") (the "Creditor")
0000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 000-X 527 Chemin de L'Anse,
Vancouver, British Columbia, Xxxxxxxxx-Xxxxxx, PQ,
Canada, V6E 2 Canada J7V 3P8
iQ BATTERY RESEARCH AND DEVELOPMENT
GmbH
(the "Guarantor")
Erlenhof Park, Xxxxxxxxxxx Xxxxxxx 0
D-82008 Unterhaching, Germany
Principal Sum Secured by this Debenture: C$300,000
Issue Date: December 27, 2000
1.00 LOAN
1.01 FOR VALUE RECEIVED, the Debtor hereby acknowledges itself indebted and
promises to pay to the Creditor ON DEMAND MADE NO EARLIER THAN ONE MONTH
FOLLOWING ADVANCE:
a. all amounts now or hereafter owing by the Debtor to the Creditor
including any amount on which may be loaned by the Creditor to the
Debtor under a C$300,000 credit facility granted to the Debtor by the
Creditor (the "Principal Sum");
b. interest on the Principal Sum or the balance thereof from time to time
remaining unpaid at a rate PER ANNUM equal to 24% (the "Rate of
Interest") as well after as before maturity, calculated and payable
monthly in arrears on the first day of each month in each year
commencing from the date of issue hereof; and
c. interest, at the Rate of Interest, on overdue interest calculated and
payable in accordance with paragraph b. for the actual number of days
the overdue interest has been due;
until the Principal Sum has been repaid in full. Payments made by the Debtor
will be credited firstly, against overdue interest, secondly, against interest
on the Principal Sum, and thirdly, on account of repayment of the Principal Sum
payable hereunder. For the purpose of this Debenture, interest on the Principal
Sum and interest on any overdue interest shall be defined as "Interest").
Payment of the Principal Sum and Interest shall be made by prepaid post, mailed
to the address of the Creditor as from time to time appearing on the Register of
Debentures maintained by the Debtor at its head office. The Debtor shall be
entitled to deduct from payments required to be made to the Creditor withholding
taxes as required under the Income Tax Act (Canada).
2.00 SERIES
2.01 This Debenture is not part of a series of like debentures but is issued
alone.
3.00 CONVERSION RIGHTS
3.01 The Creditor shall have the right at his option, in accordance with the
terms of this Debenture including those in the Schedule of Conversion Rights
hereto, at any time, during the term of this Debenture to convert, from time to
time, all or any part of the Principal Sum due under this Debenture into the
securities of the Debtor described in the Schedule of Conversion Rights (the
"Securities") as
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Page 2
constituted at the date hereof at a conversion price per security (the
"Conversion Price") as set forth therein, subject to adjustment as herein
provided.
3.02 The issue of this Debenture shall not restrict or prevent the Debtor from
obtaining any other additional financing nor from issuing additional securities
or rights with respect thereto during the period within which the conversion
rights granted hereunder are exercisable.
3.03 The right of conversion in regard to this Debenture may be exercised from
time to time in respect of any portion of the Principal Sum secured by this
Debenture.
3.04 This Debenture, when fully converted under the provisions hereof, shall be
canceled by the Debtor forthwith upon delivery thereof to it and no Debenture
shall be issued in substitution therefor.
3.05 All shares issued upon conversion of this Debenture shall be issued as
fully paid and non-assessable.
4.00 SECURITY
4.01 As security for the payment of the Principal Sum and interest due and
payable under this Debenture, the Debtor hereby charges, as and by way of a
first fixed and floating charge (subject to the provisions hereinafter
contained) to and in favour of the Creditor, the undertaking and all property
and assets of the Debtor for the time being, both present and future and the
property and assets of the Debtor (excepting and reserving the last day of any
term of years reserved by any lease, verbal or written, or any agreement
therefor, now held or hereafter acquired by the Debtor, and except also as
hereinafter stated) including but without limiting the generality of the
foregoing, all personal and moveable property now owned or hereafter acquired by
the Debtor.
4.02 The Debtor covenants and agrees that:
a. the Debtor shall be bound by and subject to that certain form of security
agreement (the "Security Agreement") under the Personal Property Security
Act of the Province of British Columbia which is attached hereto as the
Schedule of Security Agreement and which form a material part hereof and
which shall govern in the event of any conflict between the terms hereof
and the terms of the Security Agreement; and
b. the Debtor shall concurrent with execution of this Agreement execute and
deliver to the Creditor the Security Agreement and such other security
documents as the Creditor may from time to time request.
4.03 This Agreement is in addition to and not in substitution for any other
agreement between the parties creating a security interest in all or part of the
property of the Debtor, whether heretofore or hereafter made, and the terms of
such other agreement or agreements shall be deemed to be continued unless
expressly provided to the contrary in writing and signed by the parties.
5.00 EARLY REPAYMENT
5.01 The Debtor may at any time pay off this Debenture in whole or in part as to
the Principal Sum remaining outstanding hereunder and accrued Interest.
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6.00 FUTURE ADVANCES
6.01 Nothing herein contained including the execution of this Debenture nor the
perfection of any of the security interests contained herein shall obligate the
Creditor to make any advance or future advance or loan or renewal or extension
of any indebtedness or liability of the Debtor whatsoever.
7.00 WARRANTIES OF DEBTOR
7.01 The Debtor hereby warrants to the Creditor that if it is a corporation then
it is duly organized and validly existing under the laws of the jurisdiction of
its incorporation and it is qualified to conduct its business in British
Columbia, and the execution, delivery and performance hereto are within its
corporate powers, have been duly authorized and do not contravene, violate or
conflict with any law or the terms of its constating documents or any indenture
or agreement to which it is a party.
8.00 UNDERTAKINGS OF DEBTOR
8.01 The Debtor hereby undertakes to:
a. promptly pay all obligations, indebtedness and liabilities owing to the
Creditor as they become due or are demanded;
b. give immediate notice to the Creditor in the event of a change of the
corporate or trade name of the Debtor; and
c. pay, on demand of the Creditor, all reasonable expenses, including
solicitor's fees and disbursements and all the remuneration of any Receiver
appointed hereunder, incurred by the Creditor in the preparation,
perfection and enforcement of this Agreement.
9.00 DEFAULT
9.01 The Creditor may, at its option, in writing, declare the Debtor to be in
default under this Agreement, and may declare the whole or any part of the
unpaid balance of any obligations, indebtedness and liabilities secured by this
Agreement immediately due and payable, or may do either, if any of the following
events occurs:
a. the Debtor fails to pay when due any of the obligations, indebtedness or
liabilities secured by this Agreement;
b. the Debtor fails to perform any term, condition, provision, covenant or
undertaking of this Agreement or any other agreement between the Debtor and
the Creditor;
c. the Debtor or one of its principal subsidiaries ceases or threatens to
cease to carry on its business, commits an act of bankruptcy, becomes
insolvent, makes an assignment or bulk sale of its assets, or proposes a
compromise or arrangement to its creditors;
d. any proceeding is taken with respect to a compromise or arrangement or to
have the Debtor declared bankrupt or wound up or to have a receiver
appointed of any part of the collateral
Convertible Debenture
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(the "Collateral") subject to any security interest granted by the Debtor
to the Creditor in accordance with this Agreement or if any encumbrancer
take possession of any part thereof;
e. any execution, sequestration or extent or any other process of any Court
becomes enforceable against the Debtor or it any distress or analogous
process is levied upon the Collateral or any part thereof;
f. the occurrence of loss, theft, damage or destruction of the Collateral not
covered by adequate insurance containing a loss payable clause for the
protection of the Creditor as its interest may appear;
g. any representation, warranty or statement made by or on behalf of the
Debtor to the Creditor is untrue in any material respect at the time when
it was made;
h. if the Debtor is a corporation, there is, in the Creditor's reasonable
opinion, a change in effective control of the Debtor, or if the Debtor is a
partnership, there is a dissolution or change in the membership of the
partnership;
i. the Debtor or one of its principal subsidiaries becomes insolvent or
bankrupt or makes a proposal or files an assignment for the benefit of
creditors under the Bankruptcy Act of Canada or similar legislation in
Canada or any other jurisdiction; a petition in bankruptcy is filed against
the Debtor; or, if the Debtor is a corporation, steps are taken under any
legislation by or against the Debtor seeking its liquidation, winding-up,
dissolution, or any arrangement or compromise of its debts;
j. a receiver, trustee, custodian or other similar official is appointed in
respect of the Debtor, or one of its principal subsidiaries, or any of the
Debtor's property; or
k. if the Creditor in good faith believes upon commercially reasonable
grounds, that the prospect of payment of performance on the part of the
Debtor of any of its obligations is, or is about to be, impaired or that
the Collateral, or any part thereof, is, or is about to be, in jeopardy
including danger of being lost, damages or confiscated.
10.00 ENFORCEMENT AND REMEDIES
10.01 Upon default, the security interests granted under the Security Agreement
or any other security agreement between the parties shall become enforceable and
the Creditor shall have all the rights and remedies available to it under the
Personal Property Security Act of British Columbia as amended from time to time
as well as any other applicable laws.
10.02 The rights and remedies herein conferred upon the Creditor shall be
cumulative and not alternative and shall be in addition to and not in
substitution for or in derogation of rights and remedies conferred by the
Personal Property Security Act of British Columbia as amended from time to time,
any other applicable laws, and any other security Agreement entered into between
the parties.
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11.00 WAIVER
11.01 The Creditor may permit the Debtor to remedy any default without waiving
the default so remedied and the Creditor may waive any default without having
waived any other subsequent or prior default by the Debtor. A waiver shall only
be binding on the Creditor if it has been given in writing.
11.02 The Debtor shall not be discharged by any extension of time, additional
advances, renewals, and extensions, the taking of further security, releasing
security, extinguishment of any of the security interests created herein as to
all or any part of the Collateral, the failure to perfect the security or any
other act except a release or discharge of the said security interests upon the
full payment of the obligations, indebtedness and liabilities secured by this
Agreement, including, charges, expenses, fees, costs and Interest.
12.00 REGISTER OF DEBENTURES
12.01 The Debtor will keep a Register of Debentures at its head office in
Vancouver, British Columbia, Canada, where there will be entered the names,
addresses and descriptions of the Creditor and the registered holders of all
other debentures of this issue and particulars of the debentures held by them
respectively. Except as specifically provided herein, this Debenture and any
rights arising hereunder are not transferable by the Creditor. This Debenture
may be transferred with approval of the Board of Directors of the Debtor and in
compliance with the applicable securities legislation and policies of any stock
exchange having jurisdiction over the Debtor and by transfer in writing signed
by the Creditor or his legal personal representative, and will only be effective
as regards the Debtor when delivered at the Debtor's head office in Vancouver,
British Columbia, Canada, accompanied by this Debenture, together with such
evidence of identity or title as the Debtor may reasonably require and upon
payment of all applicable transfer taxes. The Debtor shall be entitled to
require the Creditor deliver the Debtor a legal opinion that the transfer is in
compliance with the applicable securities legislation before completing the
transfer of any interest in this Debenture.
13.00 NOTICES
13.01 Notice may be served upon the Creditor by sending it through the post in a
prepaid letter addressed to the Creditor at his registered address. Any notice
to be given to the Debtor or the Guarantor by the Creditor may be given by
sending it through the post in a prepaid letter addressed to the Debtor at its
head office in Vancouver, British Columbia, Canada, or, as the case may be, to
the Guarantor at its head office in Unterhaching, Germany. Any such notice
served by post shall be deemed to have been served on the expiration of 72 hours
after it is posted, and in proving service of any such notice it shall be
sufficient to prove that the letter containing the notice was properly addressed
and put into the post office at the place of mailing.
14.00 SECURITIES REQUIREMENTS
14.01 This Debenture shall be governed in accordance with the laws of the
Province of British Columbia.
14.02 The Creditor acknowledges and declares that:
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a. the Creditor is aware that this Debenture and any securities of the Debtor
to be issued on the exercise of the conversion rights granted hereunder
(the "Securities") have not been qualified under the British Columbia
Securities Act (the "Act") and the rules and regulations thereto (the
"Rules") for distribution to the public, that the issuance of the
Securities pursuant to this Agreement is to be by way of private placement
exempted from the registration requirements of the Act and from the
prospectus requirements of the Act under an exemption to be determined by
the Debtor, and that the Creditor is restricted from using most of the
civil remedies available under the Act and the Rules thereto and may not
receive information that would be otherwise available to him under the Act
and the Rules in connection with his purchase of the Securities;
b. there are restrictions on the Creditor's ability to resell the Securities
and it is the responsibility of the Creditor to find out what those
restrictions are and to comply with them before selling the Securities and,
without limiting the generality of the foregoing, the resale of the
Securities may be subject to the registration and prospectus requirements
of the Act;
c. it is the obligation of the Creditor to comply with the aforesaid resale
restrictions in regard to the Securities at the time the Creditor wishes to
trade any of the Securities and it is not the obligation of the Debtor or
its solicitors to keep the Creditor informed in this regard;
d. it is aware that, in accordance with any requirements under the Act, the
Debtor will cause any prescribed hold period legends to be affixed on any
Securities from the later of the date of this Agreement and the date of the
advance of the Principal Sum hereunder to be affixed to the certificates
representing the Securities to be issued pursuant to this Agreement;
e. the Securities were not advertised for sale;
f. the Creditor 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 Placement Proceeds exceed $97,000
under section 74(2)(4) of the Act,
iv. a person exempted under section 74(2)(9) of the Act who was not
induced to purchase the Securities by expectation of employment or
continued employment, or
v. a person exempted under any of paragraphs (a), (b), (c), (e), (g), or
(h) of section 128 of the Rules in accordance with one or more of the
criteria listed in section 5 of Form 20A (IP) or section 6 of Form 20A
(NIP) published by the British Columbia Securities Commission, a copy
of which Form 20A has been given to the Creditor by the Debtor;
Convertible Debenture
Page 7
g. where the sale of the Securities is exempted under paragraph (a), (b), or
(c) of section 128 of the Rules, the Creditor has received an Offering
Memorandum from the Debtor in accordance with the applicable section;
h. the Debtor has recommended the Creditor seek and obtain independent legal
advice from the Creditor's own solicitor with respect to this Agreement
prior to its execution and has provided the Creditor with sufficient
opportunity to do so and the Creditor further acknowledges that it
understands the terms, and its rights and obligations under this Agreement;
and
i. no securities commission or similar regulatory authority has reviewed or
passed on the merits of the Securities;
j. there is no government or other insurance covering the Securities; and
k. there are risks associated with the purchase of the Securities.
14.03 The Creditor represents and warrants to the Debtor that:
a. the Creditor is taking its interest in this Debenture as principal and no
other person, firm or corporation will have a beneficial interest in the
Debenture;
b. the Debenture is being purchased for investment purposes only and not with
a view to resale or distribution;
c. as of the Issue Date, the issuance of the Securities to the Creditor would
not result in the Creditor owning 20% or more of the issued and outstanding
shares of the Debtor;
d. the Creditor is not taking its interest in this Debenture as a result of
any information about the material affairs of the Debtor that is not
generally known to the public, save knowledge of this particular
transaction; and
e. the Creditor is a "sophisticated purchaser" as that term is defined in the
Act.
f. the Creditor is not a "U.S. Person" (the definition of which includes, but
is not limited to, an individual resident in the United States and an
estate or trust of which any executor or administrator or trustee,
respectively, is a U.S. Person and any partnership or corporation organized
or incorporated under the laws of the United States);
g. the Creditor was outside the United States at the time of execution and
delivery of this subscription agreement;
h. no offers to sell the Securities were made by any person to the Creditor
while the Creditor was in the United States;
i. the Securities are not being acquired directly or indirectly, for the
account or benefit of a U.S. Person or a person in the United States and
the Creditor does not have any agreement or understanding (either written
or oral) with any U.S. Person respecting:
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i. the transfer or assignment of any rights or interest in any of the
Securities,
ii. the division of profits, losses, fees, commissions, or any financial
stake in connection with this subscription, or
iii. the voting of the common shares;
j. the Creditor acknowledges that the Securities have not been registered
under the United States Securities Act of 1933 (the "1933 Act"), and may
not be offered or sold, and the Creditor undertakes and agrees that it will
not offer or sell the Securities, in the United States unless the
Securities are registered under the 1933 Act and the securities laws of all
applicable states of the United States or an exemption from such
registration requirements is available. The Creditor understands that the
Debtor has no obligation or present intention of filing a registration
statement under the 1933 Act in respect of the Securities;
k. the Creditor and the Debtor agree that the Debtor may not permit the
transfer of the Securities unless such transfer is made in accordance with
Regulation S under the 1933 Act; and
l. the Creditor acknowledges that certificates representing the Shares may
bear a U.S. legend as stipulated by the solicitors for the Debtor.
14.04 If the Creditor's address appearing on the face of this Agreement is
located outside the Province of British Columbia, the Creditor also certifies to
the Debtor that the Creditor is not resident in British Columbia and
acknowledges that the Debtor has advised the Creditor that the Debtor is relying
on an exemption from the requirements to provide the Creditor with a prospectus
and to sell securities through a person registered to sell securities under the
Act and, as a consequence of acquiring securities pursuant to this exemption,
certain protections, rights and remedies provided by the Act, including
statutory rights of rescission or damages, will not be available to the
Creditor.
15.00 TRANSFERS
15.01 The person in whose name this Debenture shall be registered, shall be
deemed and regarded as the owner and Creditor for all purposes, and the payment
to and/or receipt of any such Creditor, as the case may be, for any principal
monies or interest hereby secured shall be a good discharge to the Debtor for
the same, and the Debtor shall not be bound to enter in the register notice of
any trust or to enquire into the title of any such Creditor or to recognize any
trust or equity affecting the title hereof save as ordered by some court of
competent jurisdiction, or as required by statute.
16.00 RECEIPT OF DEBENTURE
16.01 The Debtor hereby acknowledges receipt of a copy of this Debenture and
waives the right to receive any financing statement, financing charge statement,
or verification statement filed or issued at any time in respect of or related
to this Debenture.
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17.00 GENERAL
17.01 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 Debenture including the execution of any undertakings required by the
regulatory authorities or exchanges.
17.02 Time shall be of the essence of this Debenture.
17.03 All funds referred to under the terms of this Debenture shall be funds
designated in the lawful currency of Canada.
17.04 This Debenture shall be interpreted in accordance with the laws in effect
from time to time in the Province of British Columbia.
17.05 This Debenture shall enure to the benefit of and be binding upon the
parties hereto and their respective heirs, administrators, successors and
assigns.
17.06 The following Schedules are attached to and from a part of this Debenture:
a. Schedule of Conversion Rights; and
b. Schedule of Security Agreement.
17.07 The Debtor will pay all costs, charges and expenses, including any legal
costs, of and incidental to:
a. the preparation, execution, registration and filing of this Debenture, or
of any document required or requested hereunder;
b. taking, recovering, keeping, possessing, inspecting or protecting the
Collateral; and
c. any proceeding taken to enforce the remedies under this Debenture or
otherwise in relation to the security interests provided for hereunder, or
by reason of non-payment or procuring payment of the monies secured by this
Debenture.
17.08 If any one or more of the provisions contained in this Agreement should be
invalid, illegal, or unenforceable in any respect in any jurisdiction, the
validity, legality and enforceability of such provision or provisions shall not
in any way be affected or impaired thereby in any other jurisdiction and the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby, unless in either
case as a result of such determination this Agreement would fail in its
essential purpose.
17.09 This Agreement shall be legally binding upon the Debtor when executed by
the Debtor notwithstanding any failure of the Guarantor to execute this
Agreement upon presentation.
17.10 This Agreement may be executed in any number of counterparts, each of
which when executed, shall be deemed to be an original and all of which together
shall be deemed to be one and the same instrument and a facsimile copy of this
Agreement executed by a party hereto in counterpart or otherwise will be deemed
to be a valid and binding Agreement and accepted as an original of the
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Agreement until such time as each of the Parties has an originally executed
Agreement in its possession.
17.11 The Debtor and the Guarantor have requested that this agreement and all
related documents be drawn up in the English language with which request the
Creditor agrees. Le Debtor et le Guarantor a demande que le present contrat
ainsi que toute la documentation d'accompagnement soient rediges en anglais,
requete a laquelle le Creditor consent.
18.00 OBLIGATIONS AND SECURITY FROM GUARANTOR
18.01 The Guarantor hereby guarantees the performance of all the obligations of
the Debtor hereunder.
18.02 As additional security for the payment of the Principal Sum and interest
due and payable under this Debenture and the performance of the obligations of
the Debtor and the Guarantor hereunder, the Guarantor hereby charges, as and by
way of a first fixed and floating charge (subject to the provisions hereinafter
contained) to and in favour of the Creditor, the undertaking and all property
and assets of the Guarantor for the time being, both present and future and the
property and assets of the Guarantor (excepting and reserving the last day of
any term of years reserved by any lease, verbal or written, or any agreement
therefor, now held or hereafter acquired by the Guarantor, and except also as
hereinafter stated) including but without limiting the generality of the
foregoing, all personal and moveable property now owned or hereafter acquired by
the Guarantor.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and seals
effective Issue Date first above mentioned.
SIGNED, SEALED AND DELIVERED by ) iQ POWER TECHNOLOGY INC.
iQ POWER TECHNOLOGY INC. )
in the presence of: ) /s/ Xxxx Xxxxxx
/s/ [ILLEGIBLE] ) ---------------------------
---------------------------------- ) authorized signature
Witness )
000-0000 Xxxx Xxxxxxxx Xxxxxx ) /s/ [ILLEGIBLE]
---------------------------------- ) ------------------------
Address ) authorized signature
)
Van. BC V6E 2J3 )
---------------------------------- )
Postal Code )
SIGNED, SEALED AND DELIVERED by ) iQ BATTERY RESEARCH AND
iQ BATTERY RESEARCH AND ) DEVELOPMENT GmbH
DEVELOPMENT GmbH in the )
presence of: ) /s/ Xxxxx X. Xxxxx
/s/ [ILLEGIBLE] ) ---------------------------
---------------------------------- ) authorized signature
Witness )
[ILLEGIBLE] ) /s/ [ILLEGIBLE]
---------------------------------- ) ------------------------
Address ) authorized signature
)
[ILLEGIBLE] )
---------------------------------- )
Postal Code )
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Page 11
SIGNED, SEALED and DELIVERED )
by the Creditor in the presence of: ) /s/ Xxxx Xxxxxx
)
[Illegible] ) XXXX XXXXXX
------------------------------------)
Witness ) 000 Xxxxxx xx X'Xxxx,
) Xxxxxxxxx-Xxxxxx, PQ,
000 Xxxxxx xx X'Xxxx ) Xxxxxx X0X 0X0
------------------------------------)
Address ) (print name and address)
Xxxxxxxxx-Xxxxxx, XX X0X 0X0 )
------------------------------------)
City and Postal Code )
Schedule of Conversion Rights
1.01 Subject to the provisions of this option, the Creditor shall have the right
at his sole and exclusive option (herein called the "Option"), at any time and
from time to time during the term of the Debenture (herein called the "Term"),
to convert the whole or any part of the amount then due hereunder (the "Amount
Due") in lawful money of Canada into shares of the Debtor at the rate of US$0.50
per share
1.02 The right of conversion, shall be exercised by the surrender to the Debtor
at its principal office in Vancouver, British Columbia, Canada, of a Conversion
Form in the form attached to this Debenture duly executed by the Creditor or his
or their attorneys duly appointed by an instrument in writing in form and
execution satisfactory to the Debtor, exercising the right of conversion and
indicating the portion of the Amount Due being converted, together with this
Debenture in the case where, after conversion, no portion of the Principal Sum
remains payable.
1.03 This Debenture shall be deemed to be surrendered to the extent of the
portion of the Amount Due being converted on the date (herein called the "Date
of Conversion") on which it is so surrendered in accordance with the provisions
of this clause, and in the case of surrender by post or other means of
transmission, on the date on which it is received by the Debtor. Upon such
surrender, the holder hereof shall be deemed for all purposes the holder of
record of fully paid and non-assessable common shares of the Debtor to the
number to be issued on conversion, and shall be entitled to delivery of a
certificate or certificates representing such shares promptly after the exercise
of such right of conversion. Such conversion shall be deemed to have taken place
on the Date of Conversion.
1.04 [purposely left blank]
1.05 The number of shares of the Debtor or the kind of shares issuable on the
conversion of this Debenture, shall be subject to adjustment from time to time
as follows:
a. in the event of any subdivision, redivision or change of the outstanding
shares of the Debtor at any time while this Debenture is outstanding into a
greater number of shares, the Debtor shall thereafter deliver, and the
holder hereof shall accept, at the time of conversion of this Debenture, in
lieu of the number of shares issuable upon conversion, such greater number
of shares of the Debtor as would include the greater number of shares as
would result from said subdivision, redivision or change, without the
Creditor making any additional payment or giving any other consideration
therefor, and such adjustments shall be made successively whenever any
event listed above shall occur;
b. in the event of any consolidation of such shares of the Debtor at any time
while this Debenture is outstanding into a lesser number of shares, the
Debtor shall thereafter deliver, and the Creditor shall accept, at the time
of conversion of this Debenture, in lieu of the number of shares issuable
upon conversion, such lesser number of shares of the Debtor as would result
from such consolidation had the conversion taken place immediately before
such consolidation, and such adjustments shall be made successively
whenever any event listed above shall occur; and
c. in the event of any reclassification or change of any of the outstanding
shares of the Debtor issuable upon conversion of this Debenture (other than
a change from no par value to par value or from par value to no par value,
or a change in par value, or as a result of the
Schedule of Conversion Rights
Page ii
subdivision or consolidation) or in case of any amalgamation or merger of
the Debtor with or into another corporation (other than an amalgamation or
merger in which the Debtor is the continuing corporation and which does not
result in any re-classification or change of outstanding shares of common
stock of the class issuable upon conversion of this Debenture) or in case
of any sale, transfer or other disposition of all or substantially all of
the assets of the Debtor, the Debtor or the corporation formed by such
amalgamation, or the corporation into which the Debtor shall have been
merged, or the corporation which shall have acquired such assets, as the
case may be, shall execute a supplemental Debenture with the Creditor,
providing that the Creditor shall have the right thereafter (until the
expiration of the conversion right) to convert his Debenture into the kind
and amount of shares and other securities and properties receivable upon
such reclassification, change, amalgamation, merger, sale, transfer or
other disposition by a holder of the number of shares of the Debtor into
which this Debenture might have been converted immediately prior to such
reclassification, change, amalgamation, merger, sale, transfer or other
disposition. Such supplemental Debenture shall provide for such adjustment
or adjustments which shall be as nearly equivalent as may be practicable to
the adjustment provided for in this clause. The provisions of this clause
shall similarly apply to successive reclassifications, changes,
amalgamations, mergers, sales, transfers or other dispositions.
1.06 No fractional shares or scrip representing fractional shares shall be
issued upon the conversion of this Debenture. If any fractional interest in a
common share would, except for the provisions of this clause, be deliverable
upon the conversion of this Debenture, the Debtor shall, in lieu of delivering
any certificate for such fractional interest, satisfy such fractional interest
by paying the Creditor an amount equal to such fraction multiplied by the
Conversion Price set out in subsection 1.01 hereof. Such payment shall be made
within 15 days after the Date of Conversion by cheque drawn on the Debtor's
banker mailed by ordinary post to the registered address of the Creditor last
reported to the Debtor.
Schedule of Conversion Rights
Page iii
CONVERTIBLE DEBENTURE CONVERSION FORM
iQ POWER TECHNOLOGY INC.
(the "Debtor")
(Incorporated under the Canada Business Corporations Act)
c/o 0000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 000-X
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx, X0X 0X0
XXXX XXXXXX
(the "Creditor")
at 000 Xxxxxx xx X'Xxxx, Xxxxxxxxx-Xxxxxx, XX, Xxxxxx X0X 0X0
iQ BATTERY RESEARCH AND DEVELOPMENT GmbH
(the "Guarantor")
at Erlenhof Park, Xxxxxxxxxxx Xxxxxxx 0, X-00000 Xxxxxxxxxxxx, Xxxxxxx
Principal Sum Secured by this Debenture: C$300,000
Issue Date: December 27, 2000
TO: iQ POWER TECHNOLOGY INC.
The undersigned registered owner of the above-noted Convertible Debenture hereby
irrevocably elects to convert $___________ of the Principal Sum and Interest
secured under the said Debenture into ____________ shares of the Debtor at a
conversion price of $__________ per share in accordance with the provisions of
the Convertible Debenture and directs that the shares issuable and deliverable
on conversion be issued and delivered to the party indicated below.
DATED: ____________________, 200___.
Name
------------------------------------------- -----------------------------------
(Name of Registered Owner - please print) (Address of Registered Owner)
By:
------------------------------------------- -----------------------------------
Authorized Signature
( )
----------------------------------------- -----------------------------------
(Official Capacity or Title - please print) (Telephone and Telecopier Numbers)
----------------------------------------- -----------------------------------
(Please print name of individual whose signature appears Please print name and
address of beneficial purchaser if above if different than the name of the
Registered Owner) different than the name of the Registered Owner)
================================================================================
Registration Instructions: Delivery Instructions:
--------------------------------------- -------------------------------------
Name Address
--------------------------------------- -------------------------------------
--------------------------------------- -------------------------------------
--------------------------------------- -------------------------------------
Account reference, if applicable Account reference, if applicable
--------------------------------------- -------------------------------------
Address Contact Name
( )
--------------------------------------- -------------------------------------
Telephone Number
Schedule of Security Agreement
