EXHIBIT 10.2
SUBSCRIPTION AGREEMENT
THIS AGREEMENT is effective the 29th day of September, 2000 between XXXXXX.XXX
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SOFTWARE LTD. (the "Issuer"), a company incorporated pursuant to the laws of
British Columbia and having a registered office located at 000 Xxxxxxxxxx
Xxxxxx, 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 172 and IQUEST
NETWORKS INC. (formerly know as Interlink Systems Inc. and Glassmaster
Industries Inc.), a company incorporated pursuant to the laws of Wyoming (the
"Subscriber") with an address of 507 - 000 Xxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxx Xxxxxxxx, X0X 0X0.
WHEREAS the Issuer bas offered to sell and the Subscriber has agreed to purchase
certain securities of the Issuer pursuant to, and in compliance with, an
exemption ("Exemption") from the registration and prospectus requirements of the
Securities Act (British Columbia) (the "Act"), and the Securities Rules (the
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"Rules").
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual
covenants and agreements herein contained, the receipt of which is hereby
acknowledged, the parties covenant and agree with each other as follows:
Subscription
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1. The Subscriber hereby irrevocably subscribes for and agrees to purchase,
and the Issuer agrees to issue and sell, 2,500,000 Class B common shares
("Shares") of the Issuer at a price of $0.10 per Share, for an aggregate
purchase price (the "Purchase Price") of $250,000. The Shares will be
recorded in the name of the Subscriber at the address set out below.
Delivery and Use of Purchase Price
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2. The Subscriber has advanced $200,000 of the Purchase Price to the Issuer.
The Subscriber agrees to deliver the remainder of the Purchase Price to the
issuer together with an executed copy of this Agreement and the applicable
prescribed regulatory forms fully executed and completed. Upon receipt, the
subscription hereby constituted shall be irrevocable, and the Subscriber
irrevocably agrees that, upon due acceptance of the subscription by the
Issuer, the Issuer may immediately use the Purchase Price for its ongoing
business.
3. The undersigned hereby directs that, upon acceptance of this offer by the
Issuer, the Shares be issued in its name at the address provided below and
delivered to the undersigned at the address provided below.
4. In the event that a Subscriber's offer is not accepted within 90 days of
the date of this Subscription Agreement, the Issuer agrees to return its
subscription monies to the undersigned, without interest.
Acknowledgement
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5. The Subscriber acknowledges, confirms and agrees with the following:
(a) no prospectus has been filed by the Issuer in connection with the
issuance of the Shares, it being understood that the issuance of the
Shares is to be made pursuant to an Exemption on the basis that the
Subscriber meets certain qualifications, and, as a consequence:
i) the Subscriber is restricted from using most of the civil
remedies available under the Act and the Rules;
Minerals subject to agreement between the parties, that Interlink
will receive the Acquired Shares for the Purchase Price.
Shareholders' Agreement - On the Closing Date, and
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concurrent with the execution of the Subscription Agreement,
the Company, Interlink and the Founders will enter into a
Shareholders' Agreement on terms to be agreed between the
parties. The Shareholders' Agreement will include the
following terms:
- the Company shall have three directors, and Interlink
shall have the right to appoint one director;
- before allotting new Class B Common shares, the
directors of the Company must offer those shares
proportionately to the existing holders of issued Class
B Common shares;
- Interlink shall have the right to match future
financing of the Company;
- all shareholders shall be prohibited from selling their
Class B Common shares for one year from the Closing
Date;
- no shareholder may sell its Class B Common shares to a
third party unless that third party is prepared to
purchase all issued Class B Common shares in the
Company; and
- all Company cheques over $5,000 shall require the
signature of both an authorized agent of the Company
and an authorized agent of Interlink.
Closing Payment - As well as other terms agreed to by the
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parties, on Closing, and upon execution of the Shareholders'
Agreement and Subscription Agreement, Interlink will pay the
Purchase Price to the Company in cash, less the amount of
$100,000 already loaned to the Company as of the Closing
Date.
XXXXXX.XXX SOFTWARE LTD.
By: ________________________________ _______________________________
Authorized Signatory XXXXXXXX XXXXXX
TECHKNOWLEDGE CONSULTING INC.
By: ________________________________ _______________________________
Authorized Signatory XXXXX XXXXXXXX
________________________________ _______________________________
XXXX XXXX XXXXXXX XXXXX
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(d) 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 the Subscriber or of any
agreement, written or oral, to which the Subscriber may be a party or
by which the Subscriber is or may be bound;
(e) this Agreement has been duly executed and delivered by the Subscriber
and constitutes a valid and binding agreement of the Subscriber
enforceable against the Subscriber in accordance with its terms;
(f) the Subscriber is aware and has been advised that its subscription
monies represent "seed" or "risk" capital for the Issuer, that the
Issuer is in a promotional and speculative stage of development, that
then is no market whatsoever for the securities of the Issuer and that
the Shares may now or in the future have little or no value;
(g) the Subscriber is aware that if the Subscriber is a resident in a
jurisdiction other than British Columbia, any Shares issued to the
Subscriber upon acceptance of the Subscribers subscription may be
subject to restrictions on resale imposed under the law of such
jurisdiction. The Subscriber acknowledges that it is its duty to find
out what restrictions may apply and that the Issuer is under no
obligation to and does not intend to qualify the Shares for resale in
such jurisdiction;
(h) the Issuer is a non-reporting issuer under the laws of the Province of
British Columbia and the Shares to be issued to the Subscriber upon
acceptance of this subscription will be issued as an exempt trade,
based upon the relationship set out in paragraph (a) above, and no
filings or clearances or reviews under the Act have been or are being
made in connection with such trade;
(i) the Subscriber understands that prior to the date hereof the Issuer
may have allotted and issued shares;
(j) the Subscriber has such knowledge in financial and business affairs as
to be capable of evaluating the merits and risks of this investment
and the Subscriber is able to bear the economic risk of a total loss
of this investment;
(k) the Subscriber is not purchasing the Shares as a result of an
advertisement of the Shares in printed media of general and regular
paid circulation, radio or television;
(l) no person has made to the Subscriber any written or oral
representations:
i) that any person will resell or repurchase the Shares;
ii) that any person will refund the purchase price of the Shares;
iii) as to the future price or value of the Shares; or
iv) that the Shares will be listed and posted for trading on a stock
exchange, or that application has been made to list and post the
Shares for trading on a stock exchange;
(m) to the Subscriber's knowledge, the Subscriber has not been solicited
to make this subscription in any manner contrary to the Act or the
Rules or the USA Securities Act of 1933, as amended; and
(n) the Subscriber has had the opportunity to consult his or her own
independent professional advisors with respect to the consequences of
purchasing the Shares, and with respect to the applicable regulatory
requirements for the purchase and eventual sale of the Shares;
Representations and Warranties of the Issuer
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7. The Issuer represents and warrants to the Subscriber, acknowledging that
the Subscriber will be relying upon such representations and warranties in
entering into this Agreement, that:
(a) the Issuer and its subsidiaries, if any, are valid and subsisting
corporations duly incorporated and in good standing under the laws of
their governing jurisdictions;
(b) to the best of its knowledge, there are no actions, suits, judgements,
investigations or proceedings of any material kind outstanding,
pending, or threatened against or affecting the Issuer, its
subsidiaries, if any, or its directors, officers or promoters at law
or in equity or before or by any federal, provincial, state,
municipal, or other governmental department, commission, board, bureau
or agency of any kind whatsoever and, to the best of its knowledge,
there is no basis therefor,
(c) the issuance and sale of the Shares by the Issuer does not and will
not conflict with and does not and will not result in a breach of any
of the terms, conditions or provisions of its constating documents or
any agreement or instrument to which the Issuer is a party,
(d) the execution of this Agreement has been duly authorized by all
necessary corporate action on behalf of the Issues, and constitutes a
binding obligation of the Issuer enforceable in accordance with its
terms;
(e) the Issuer will reserve or set aside sufficient shares in the treasury
of the Issuer to issue to the Subscriber the Shares purchased; and
(f) upon their issuance, the Shares will be validly issued and outstanding
fully paid and non assessable common shares of the Issuer registered
in the name of the Subscriber as provided for herein, fine and clear
of all voting restrictions, trade restrictions (except as may be
imposed by operation of applicable securities laws as a result of the
use of the prospectus and registration exemptions described herein),
liens, charges or encumbrances of any kind whatsoever.
Condition
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8. The distribution of the Shares by the Issuer is conditional upon compliance
with the requirements of the Exemption.
Miscellaneous
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9. This Agreement constitutes the entire agreement between the Subscriber and
the Issuer, and there are no other agreements, warranties, representations,
conditions or covenants, written or oral, express or implied, in respect at
or which affect, the transactions herein contemplated, and this Agreement
supersedes and supplants any previous dealings whatsoever between the
Subscriber and the Issuer in respect of this subscription.
10. This Agreement may not be assigned by either party hereto, and shall be
binding on the Subscriber's heirs, executors, trustees in bankruptcy or
other legal representatives or successors.
11. Time is of the essence of this Agreement.
12. A party to this Agreement will give all notices to, or written
communications with, the other party concerning this Agreement by hand
(including courier) or by registered mail addressed to the other party's
address set out above, as may be amended by like notice, and such notices
shall be effective on the date of delivery.
13. This Agreement will be governed by, and construed in accordance with, the
laws of British Columbia.
14. This Agreement may be signed by the parties in counterparts and may be
delivered by facsimile, each of which when delivered will be deemed to be
an original and all of which together will constitute one instrument.
IN WITNESS WHEREOF the parties have executed this Agreement effective as of the
28th day of September, 2000.
XXXXXX.XXX SOFTWARE LTD.
Per: _______________________________
Authorized Officer
SUBSCRIBER'S ADDRESS:
IQUEST NETWORKS INC. -----------------------------
Per: /s/ #000-000 X. Xxxxxxxx Xx.
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Authorized Officer Director Xxxxxxxxx, X.X.
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X0X 0XX
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