ANNEX A
FORM OF SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION
AGREEMENT (this "
Agreement "), dated as of ___________, 2009, by and
among Quantum Fuel Systems Technologies Worldwide, Inc. , a
Delaware corporation (the " Company "), and the
subscriber identified on the signature page hereto ("
Subscriber ").
WHEREAS
, the Company is offering up to $15
million in Common Stock Units (the " Units" ) , with
each such Unit consisting of (i) 1,000 shares of the Company's
$.001 par value common stock ( "Common Stock") and
(ii) a common stock purchase warrant (the "Warrant")
entitling the holder thereof to purchase up to 100 shares of the
Company's Common Stock. The Units will only be offered and sold to
a limited number of subscribers who are " Accredited
Investors ," as such term is defined hereinafter, in
accordance with the terms and conditions set forth in the
confidential private placement memorandum dated June 8, 2009 (the "
Confidential Placement Memorandum " or the "
Memorandum ") that was furnished by the Company to
the Subscriber. Capitalized terms used but not otherwise defined in
this Agreement shall have the meanings ascribed to such terms in
the Memorandum. The Units and the Common Stock and Warrant
underlying the Units are sometimes hereinafter referred to as the
"Securities."
WHEREAS
, the Company and the Subscriber
are executing and delivering this Agreement in reliance upon an
exemption from securities registration afforded by the provisions
of Section 4(2) and/or Regulation D (" Regulation D
") as promulgated by the United States Securities and Exchange
Commission (the " Commission ") under the Securities
Act of 1933, as amended (the " 1933 Act "), and similar
exemptions under applicable state securities laws.
WHEREAS
, the parties desire that, upon the
terms and subject to the conditions contained herein, the Company
shall issue and sell to the Subscriber, as provided herein, and the
Subscriber, shall purchase from the Company, the number of Units
set forth on the signature page hereto. The Subscriber desires to
acquire the Units pursuant to the Confidential Placement Memorandum
and the terms and conditions of this Agreement.
NOW, THEREFORE
, in consideration of the mutual
covenants and other agreements contained in this Agreement, the
Company and the Subscriber hereby agree as follows:
1.
(a)
Subscription . In accordance with the terms and conditions
of the Confidential Placement Memorandum, the Subscriber, intending
to be legally bound, hereby irrevocably subscribes for and agrees
to purchase the Units set forth on the signature page hereto and to
pay the purchase price amount set forth on the signature page in
immediately available funds contemporaneously with the execution
and delivery of this Subscription Agreement. The execution and
delivery of this Agreement by the Subscriber will not constitute an
agreement between the Subscriber and the Company until this
Agreement has been accepted by the Company evidenced by receipt by
the Subscriber of an acceptance page of this Agreement signed by
the Company, and then subject to the terms and conditions of this
Agreement. The Subscriber understands that acceptance or rejection,
in whole or in part, by the Company of the subscription and
agreement of the Subscriber to purchase the Units is within the
sole and absolute discretion of the Company. Likewise, the
Subscriber understands acknowledges and agrees that acceptance by
the Company of any subscription of a Subscriber, in whole or in
part, is predicated upon the representations and warranties of the
Subscriber as set forth hereinafter and that SUBSCRIPTIONS, ONCE
RECEIVED BY THE COMPANY AND/OR THE PLACEMENT AGENT, ARE IRREVOCABLE
BY THE SUBSCRIBER, AND, THEREFORE, MAY NOT BE WITHDRAWN
.
(b)
Closing Date . The closing of the purchase and sale of the
Units hereunder and under other Subscription Agreements (the "
Closing ") shall be held at the offices of Alston & Bird
LLP, One Atlantic Center, Atlanta, Georgia 30309 after
subscriptions for the Units have been accepted by the Company (the
date of the Closing being hereinafter referred to as the "
Closing Date "). Subscriptions will not be refunded unless
the Company rejects Subscriber's subscription, in whole or in
part.
(c)
Deliveries. The Subscriber shall deliver at the Closing the
Omnibus Signature Page to this Agreement, which the Company shall
authorize, upon the satisfaction of the conditions set forth in
Section 7 hereof, to attach to an execution version of the Warrant,
in substantially the form attached to the Memorandum with such
minor modifications thereto, and the aggregate subscription payment
for the Units.
2.
Subscriber's Representations and Warranties . The Subscriber
hereby represents and warrants to and agrees with the Company
that:
(a)
Information on Company . The Subscriber acknowledges receipt
of the Confidential Placement Memorandum. The Subscriber has had
access at the EDGAR Website of the Commission to the Company's
Annual Report on Form 10-K for the year ended April 30, 2008, and
all periodic and current reports filed with the Commission
thereafter (hereinafter referred to as the " Reports "). The
Subscriber has had the opportunity to review information regarding
the Company, its business, operations, financial condition and the
terms and conditions of the Units and the underlying Securities,
and considered all factors Subscriber deems material in deciding on
the advisability of investing in the Units and the underlying
Securities. The offer to sell the Securities to the Subscriber was
communicated to the Subscriber by the Company in such a manner that
the Subscriber was able to ask questions of and received answers
from the Company or a person acting on the Company's behalf
concerning the terms and conditions of this transaction as well as
to obtain any information requested by the Subscriber. Any
questions raised by the Subscriber or its representatives
concerning the transactions contemplated by this Agreement have
been answered to the satisfaction of the Subscriber and its
representatives. The Subscriber can fend for itself, can bear the
economic risk of its investment and has such knowledge and
experience in financial or business matters that it is capable of
evaluating the merits and risks of the investment in the
Securities. Except as set forth in the Confidential Placement
Memorandum or this Agreement, no representations or warranties have
been made to the Subscriber by the Company or any agent, employee
or affiliate of the Company and in entering into this Agreement,
the Subscriber is not relying on any information, other than that
which is contained in the Confidential Placement Memorandum and the
results of any independent investigation by the
Subscriber.
(b)
Information on Subscriber . The Subscriber is, and will be
at the time of issuance of the Securities, an " accredited
investor ", as such term is defined in Regulation D promulgated
by the Commission under the 1933 Act, is experienced in investments
and business matters, has made investments of a speculative nature
and has purchased securities of United States publicly-owned
companies in private placements in the past and has such knowledge
and experience in financial, tax and other business matters as to
enable the Subscriber to utilize the information made available by
the Company to evaluate the merits and risks of and to make an
informed investment decision with respect to the proposed purchase,
which represents a speculative investment. The Subscriber is not a
broker-dealer under Section 15 of the Exchange Act or an officer,
director or affiliate of the Company. The Subscriber has the
authority and is duly and legally qualified to purchase and own the
Securities. The Subscriber is able to bear the risk of such
investment for an indefinite period and to afford a complete loss
thereof. The information set forth on the signature page hereto
regarding the Subscriber is accurate. The information set forth in
Schedule 1 hereto is correct in all respects.
(c)
Purchase of Units . The Subscriber is acquiring the
Securities in the ordinary course of its business as principal for
its own account, and not as nominee, for investment only and not
with a view toward, or for resale in connection with, the public
sale or any distribution thereof. The Subscriber does not have any
contract, undertaking, agreement, understanding or arrangement,
directly or indirectly, with any Person to distribute, sell,
transfer or pledge to such Person, or anyone else, all or any part
of the Securities, and the Subscriber has no present plan to enter
into any such contract, undertaking, agreement, understanding or
arrangement. The Subscriber further agrees to execute and deliver
any further investment certificates as counsel to the Company deems
necessary or advisable to comply with state or federal securities
laws.
(d)
Compliance with Securities Act . The Subscriber understands
and agrees that the Securities have not been registered under the
1933 Act or any applicable state securities laws, by reason of
their issuance in a transaction that does not require registration
under the 1933 Act (based on the accuracy of the representations
and warranties of the Subscriber contained herein), and that such
Securities may not be sold, assigned or transferred and must be
held indefinitely in the absence of (i) an effective registration
statement under the Act and applicable state securities laws with
respect thereto or (ii) an opinion of counsel satisfactory to the
Company that such registration is not required. The Subscriber
understands that the Company is under no obligation to register the
Securities.
(e)
Warrant Legend . Each Warrant shall bear the following or
similar legend (in addition to such other restrictive legends as
are required or deemed advisable under any applicable law or any
other agreement to which the Company is a party):
"THE
TRANSFER OF THIS SECURITY IS SUBJECT TO RESTRICTIONS CONTAINED
HEREIN. THIS SECURITY HAS BEEN ISSUED IN RELIANCE UPON THE
REPRESENTATION OF PAYEE THAT IT HAS BEEN ACQUIRED FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TOWARDS THE RESALE OR OTHER
DISTRIBUTION THEREOF. THIS SECURITY HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
LAWS AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, ASSIGNED,
HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT AND ANY APPLICABLE
STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED. "
(f)
Common Stock Legend . The stock certificates for the Common
Stock (including the Common Stock issuable upon exercise of the
Warrants) shall bear the following or similar legend (in addition
to such other restrictive legends as are required or deemed
advisable under any applicable law or any other agreement to which
the Company is a party):
"THE
SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
ASSIGNED, HYPOTHECATED OR OTHERWISE TRANSFERRED UNLESS (A) THERE IS
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, AND APPLICABLE
STATE SECURITIES LAWS, COVERING ANY SUCH TRANSACTION INVOLVING SAID
SECURITIES OR (B) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY STATING THAT SUCH TRANSACTION IS EXEMPT
FROM REGISTRATION. "
(g)
Communication of Offer . The offer to sell the Securities
was directly communicated to the Subscriber by the Company. At no
time was the Subscriber presented with or solicited by any leaflet,
advertisement, article, notice or other communication published in
any newspaper, magazine, or similar media or broadcast over
television or radio, or any other form of general advertising, or
solicited or invited to attend a promotional meeting or any seminar
or meeting by any general solicitation or general
advertising.
(h)
Authority; Enforceability . If the Subscriber is an entity,
it is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization with the requisite
corporate, limited liability company or partnership power and
authority to enter into and to consummate the transactions
contemplated by this Agreement and otherwise to carry out its
obligations hereunder. This Agreement and other agreements
delivered together with this Agreement or in connection herewith
have been duly authorized, executed and delivered by the Subscriber
and are valid and binding agreements enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights generally
and to general principles of equity; and Subscriber has full
corporate power and authority necessary to enter into this
Agreement and such other agreements and to perform its obligations
hereunder, thereunder and under all other agreements entered into
by the Subscriber relating hereto and thereto.
(i)
No Governmental Review . The Subscriber understands that no
United States federal or state agency or any other governmental or
state agency has passed on or made recommendations or endorsement
of the Securities or the fairness or suitability of the investment
in the Securities nor have such authorities passed upon or endorsed
the merits of the offering of the Securities. The Subscriber
understands that neither legal counsel to the Company, the
Placement Agent, nor its counsel has independently verified the
information concerning the Company included in the Memorandum or
herein, all of which has been provided by the Company, nor has such
legal counsel passed upon the adequacy or accuracy of the
Memorandum. No independent third party, such as an investment
banking firm, the Placement Agent, or other expert in evaluating
businesses or securities, has made an evaluation of the economic
potential of the Company.
(j)
Certain Trading Activities . The Subscriber has not directly
or indirectly, nor has any Person acting at the direction of the
Subscriber, engaged in any transactions in the securities of the
Company (including, without limitation, any short sales involving
the Company's securities) since the earlier to occur of (i) the
time the Subscriber was first contacted by the Company or any other
Person regarding the investment in the Company and (ii) the 30
th day prior to the date of this Agreement. The
Subscriber covenants that neither it nor any Person acting at the
direction of the Subscriber will engage in any transactions in the
securities of the Company (including short sales) after the date
hereof and prior to the date that the transactions contemplated by
this Agreement are publicly disclosed.
(k)
Correctness of Representations . The Subscriber represents
as to the Subscriber that the foregoing representations and
warranties are true and correct as of the date hereof and, unless
the Subscriber otherwise notifies the Company prior to the Closing
Date shall be true and correct as of the Closing Date.
4.
Company Representations and Warranties . The Company
represents and warrants to and agrees with the Subscriber
that:
(a)
Due Incorporation . The Company is a corporation duly
incorporated, validly existing and in good standing under the laws
of the State of Delaware and has the requisite corporate power to
own its properties and to carry on its business as disclosed in the
Reports . The Company is duly qualified as a
foreign corporation to do business and is in good standing in
California.
(b)
Outstanding Stock . All issued and outstanding shares of
capital stock of the Company have been duly authorized and validly
issued and are fully paid and nonassessable.
(c)
Authority; Enforceability . This Agreement, the Warrant, and
any other agreements delivered together with this Agreement or in
connection herewith (collectively " Transaction Documents ")
have been duly authorized, executed and delivered by the Company
and are valid and binding agreements enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights generally
and to general principles of equity. The Company has full corporate
power and authority necessary to enter into and deliver the
Transaction Documents and to perform its obligations
thereunder.
(d)
Consents . No consent, approval, authorization or order of
any court, governmental agency or body or arbitrator having
jurisdiction over the
