EXHIBIT 10.3
SUBSCRIPTION AGREEMENT
This Agreement (hereinafter the "Agreement") is entered into this 30th
day of September, 2003, by and between ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇") and Power
Efficiency Corporation ("PEC").
WHEREAS, ▇▇▇▇▇▇▇▇ desires to purchase from PEC, and PEC desires to sell
to ▇▇▇▇▇▇▇▇, 536,638 shares of PEC's common stock at the per shares price of
$0.87;
NOW, THEREFORE, in consideration of the foregoing and of the promises
and covenants contained herein, it is hereby covenanted and agreed as follows:
1. Agreed Subscription; Purchase Price. ▇▇▇▇▇▇▇▇ hereby purchases
from PEC 536,638 newly issued shares of PEC's common stock
(the "Shares") for the purchase price of $466,875 ($0.87 per
share). The purchase price shall be paid to PEC by the
cancellation of $466,875 of debt owed by PEC to ▇▇▇▇▇▇▇▇. The
debt hereby cancelled consists of:
a. The promissory note executed by PEC in favor of
▇▇▇▇▇▇▇▇ dated June 6, 2002 for the principal amount
of $375,000, plus $28,125 of interest on the
promissory note representing all of the accrued
interest on such promissory note; and
b. All of the accrued but unpaid salary currently owed
by PEC to ▇▇▇▇▇▇▇▇ representing an aggregate amount
of $63,750.
2. Acknowledgments; Economic Risk; No Liquidity. ▇▇▇▇▇▇▇▇
understands and agrees that the purchase of the Shares is not
a liquid investment. In particular and in addition to the
representations in Section 3 hereof, ▇▇▇▇▇▇▇▇ recognizes,
acknowledges and agrees that:
▇. ▇▇▇▇▇▇▇▇ must bear the economic risk of investment in
the Shares for an indefinite period of time since the
Shares have not been registered under the Securities
Act of 1933, as amended (the "Securities Act") or
applicable state securities laws ("State Acts"), and,
therefore, cannot be transferred or sold unless
either they are subsequently registered under the
Securities Act and applicable State Acts, or an
exemption from registration is available and a
favorable opinion of counsel to that effect is
obtained.
b. Although there is a limited public market for the
Company's Common Stock, which is thinly traded on the
National Association of Securities Dealers' Over the
Counter Bulletin Board ("OTCBB") under the symbol
"PREF", the Shares are being issued in a private
transaction exempt from the registration requirements
of the Securities Act and therefore cannot be freely
resold. The Shares are restricted securities. The
Shares may be resold in accordance with the
provisions of Securities Act Rule 144.
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3. Representations. ▇▇▇▇▇▇▇▇ represents to, and agrees with the
Company that:
▇. ▇▇▇▇▇▇▇▇ has carefully reviewed and understands the
risks of and other considerations relating to a
purchase of the Shares.
▇. ▇▇▇▇▇▇▇▇ is acquiring the Shares for which he hereby
subscribes as principal for his own investment
account, and not (1) with a view to the resale or
distribution of all or any part thereof, or (2) on
behalf of another person. No person other than the
undersigned will have a direct or indirect interest
in the Shares subscribed for hereby.
▇. ▇▇▇▇▇▇▇▇ consents to the placement of a legend on any
certificate(s) evidencing the Shares stating that
such securities have not been registered under the
Securities Act and setting forth or referring to the
restrictions on transferability and sale thereof. The
▇▇▇▇▇▇▇▇ is aware that the Company will make a
notation in its appropriate records with respect to
the restrictions on the transferability of such
securities.
4. Terms of Subscription and Closing.
a. This subscription, upon acceptance by the Company,
shall be binding upon the heirs, executors,
administrators, successors and assigns of ▇▇▇▇▇▇▇▇.
b. This Agreement shall be construed in accordance with
and governed by the laws of the State of Delaware,
without giving effect to conflict of laws principles.
[Signature page to immediately follow.]
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IN WITNESS WHEREOF, the parties hereto have executed this Subscription
Agreement dated September 30, 2003.
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POWER EFFICIENCY CORPORATION, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, individually
a Delaware Corporation
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By:
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: President & CEO
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