Exhibit 10.55
LONDONDERRY XX#0, 00 Xxxxxxxxxxxxx Xxxxxxx
CAPITAL STRUCTURING LTD. Xxxxxxxxxxx, Xxxxxxx X0X 0X0
Tel: (000) 000-0000 Fax: (000) 000-0000
email: xxxxxx.xxxxx@xxxxxxxxx.xx
October 27, 1999
Rotary Power International, Inc.
Xxx Xxxxxxx Xxxxxx
X.X. Xxx 000
Xxxx-Xxxxx, Xxx Xxxxxx 00000-0000
Attention: Xx. Xxx Xxxxx, President
Dear Xx. Xxxxx;
RE: SUBSCRIPTION AGREEMENT
Attached is an executed subscription agreement for the 3,000,000 common share
offering of Rotary Power International, Inc. executed by Londonderry Capital
Structuring Ltd. which is being sent to you subject to the following conditions
in accordance with the confidential term sheet dated October 27, 1999.
Conditions of Londonderry Capital Structuring Ltd. are as follows:
1. Lock-up agreement to have been executed by shareholders or effective
equivalent representing at least 33% of the currently outstanding common shares
2. Issuance of the audited financial statements of the Company for the
year ended December 31, 1998 and unaudited financial statements for the year
ended December 31, 1999
3. Completion of due diligence on the Company, the results of which must
be to the reasonable satisfaction of Londonderry Capital Structuring Ltd. at its
sole and unfettered discretion
4. Rotary Power International, Inc. shall bring U.S. Securities Exchange
Commission filings up to date
5. Mutually satisfactory Business Plan
6. Rotary Power International, Inc. to appoint two mutually acceptable
outside directors to its Board of Directors
Yours truly;
/s/ Xxxxxx X. XxXxxxx
-----------------------------
Xxxxxx X. XxXxxxx, President
ROTARY POWER INTERNATIONAL, INC.
SUBSCRIPTION AGREEMENT
October 27, 1999
Rotary Power International, Inc.
Xxx Xxxxxxx Xxxxxx
X.X. Xxx 000
Xxxx-Xxxxx. Xxx Xxxxxx 00000-0000
Gentlemen:
1. SUBSCRIPTION. The undersigned (the "Purchaser"), intending to be
legally bound, hereby irrevocably agrees, on the terms and conditions set forth
herein, to purchase from Rotary Power International, Inc., a Delaware
corporation (the "Company"), that number of shares (the "Shares") of the
Company's Common Stock, par value $0.01 per share (the `Common Stock"), set
forth on the signature page hereof. The terms and provisions of the Common Stock
are more fully described in the Company's Term Sheet (the "Term Sheet"). The
Company intends to use the proceeds from the sale of the Shares to the Purchaser
for its general business and working capital purposes.
2. CLOSING AND PAYMENT. On the Date of Closing (as defined below), the
Purchaser shall deliver, by check, electronic transfer or otherwise, as payment
of the purchase price for the Shares an amount equal to $0.18 US for every Share
which the Purchaser has agreed to purchase (as set forth on the signature page
hereto) and the Company shall deliver the Shares to the Purchaser simultaneously
therewith. The Shares which are delivered to the Purchaser on the Date of
Closing (i) have not been registered under the Securities Act of 1933, as
amended (the "Securities Act"), or the securities laws of any state and said
Shares may not be sold, transferred, pledged or hypothecated to any person or
entity unless they have been so registered or the Company shall have received an
opinion of counsel satisfactory to the Company to the effect that registration
thereof for purposes of transfer is not required under the Securities Act, (ii)
shall contain a legend stating that the Shares have not been registered under
the Securities Act or the securities laws of any state and the restrictions on
transferability set forth in Section 2 (i) hereof, and (iii) shall be registered
in the name of the Purchaser. The "Date of Closing" for all purposes of this
Subscription Agreement shall mean February 15, 2000, or any other date mutually
agreed upon in writing by the Purchaser and the Company. Notwithstanding
anything contained herein to the contrary, if the Company cannot deliver the
Shares to the Purchaser on the Date of Closing in conformity with the provisions
of this paragraph, the Purchaser shall have no obligation to purchase the Shares
or deliver to the Company the amount required by the first sentence of this
paragraph.
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3. ACCEPTANCE OF SUBSCRIPTION. The Purchaser understands and agrees that
the Company in its sole discretion reserves the right to accept or reject this
subscription for the Shares, and further, that the total of shares issued under
this Agreement, together with the aggregate of shares currently issued and
outstanding if fully diluted, must not exceed the Company's authorized limit of
10,000,000 common shares. The Company shall have no obligation hereunder until
the Company shall execute and deliver to the Purchaser an executed copy of this
Subscription Agreement. If this subscription is rejected by the Company, this
Subscription Agreement shall thereafter be of no further force or effect.
4. ACKNOWLEDGEMENT OF PURCHASER. The Purchaser hereby acknowledges and
understands as follows:
(a) The Shares are not registered under the Securities Act or any state
securities laws and the offering and sale of the Shares by the Company pursuant
to this Subscription Agreement is intended to be exempt from registration under
the Securities Act by virtue of Section 4(2) of the Securities Act and the
provisions of Regulation D promulgated thereunder, based, in part, upon the
representations, warranties and agreements of the Purchaser contained in this
Subscription Agreement;
(b) Neither the United States Securities and Exchange Commission (the
"Securities and Exchange Commission") nor any state securities commission has
approved the Shares or passed upon or endorsed the merits of the offering and
sale of the Shares;
(c) All pertinent documents, records, books and other information in the
Company's possession or which the Company could reasonably acquire pertaining to
the Company or an investment in the Shares have been made available for
inspection by the Purchaser; and
(d) The Shares may not be sold, assigned or otherwise transferred by the
Purchaser unless they are registered under the Securities Act or unless an
exemption from registration is available.
5. REPRESENTATIONS. WARRANTIES AND AGREEMENTS OF PURCHASER. The Purchaser
hereby represents, warrants and agrees as follows:
(a) The Purchaser has received all documents and other information regarding the
Company or an investment in the Shares as has been requested by the Purchaser
(including, but not limited to, the Term Sheet) has carefully reviewed all such
documents and understands the information contained therein, and the Purchaser
has had access to sufficient information to determine the value of its
investment;
(b) The Purchaser has had a reasonable opportunity to ask questions of and
receive answers from a person or persons acting on behalf of the Company
concerning the offering of the Shares and all such questions have been answered
to the full satisfaction of the Purchaser;
(c) In evaluating the suitability of an investment in the Company, the Purchaser
is relying upon its own investigation and is not relying upon any representation
made by the Company or any other party (either oral or written) other than those
contained in this Subscription Agreement and in the Company's annual reports and
published financial data, Form 10-KSB for the fiscal year ended December 31,
1997 and the Company's quarterly reports on Form l0-QSB for the periods
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ended March 31, 1998 and June 30, 1998, respectively;
(d) The Purchaser is unaware of, and in subscribing for the Shares is in no way
relying on, and did not become aware of the offering of the Shares through or as
a result of, any form of general solicitation or general advertising including,
without limitation, any article, notice, advertisement or other communication
published in any newspaper, magazine or similar media, or broadcast over
television or radio, in connection with the offering and sale of the Shares and
is not subscribing for Shares and did not become aware of the offering of the
Shares through or as a result of any seminar or meeting to which the Purchaser
was invited by, or any solicitation of a subscription by, a person not
previously known to the Purchaser in connection with investments in securities
generally;
(e) The Purchaser has taken no action which would give rise to any claim by any
person for brokerage commissions for which RPI would be liable, finders' fees or
the like relating to this Subscription Agreement or the transactions
contemplated hereby;
(f) The Purchaser has such knowledge and experience in financial, tax, and
business matters, in general, and investments in securities, in particular, so
as to enable him to utilize the information made available to him in connection
with the offering of the Shares to evaluate the merits and risks of an
investment in the Shares and to make an informed investment decision with
respect thereto;
(g) The Purchaser is not relying on the Company, or any of its employees or
agents with respect to the legal, tax, economic and related considerations of an
investment in the Shares, and the Purchaser has relied on the advice of, or has
consulted with, only his own counsel or other advisors;
(h) The Purchaser is acquiring the Shares solely for his own account for
investment and not with a view to the resale or distribution thereof, in whole
or in part. The Purchaser has no agreement or arrangement, formal or informal,
with any person to sell or transfer all or any part of the Shares and the
Purchaser has no plans to enter into any such agreement or arrangement;
(i) The Purchaser has adequate means of providing for the Purchaser's current
financial needs and foreseeable contingencies and has no need for liquidity of
the Purchaser's investment in the Shares for an indefinite period of time;
(j) The Purchaser is aware that an investment in the Shares involves a number of
very significant risks;
(k) The Purchaser has received the annual report of the Company on Form l0-KSB
for the fiscal year ended December 31, 1997, the Company's quarterly reports on
Form 10-QSB for the periods ended March 31, 1998 and June 30, 1998,
respectively;
(1) The execution and delivery of this Subscription Agreement will not violate
or be in conflict with any order, judgment, injunction, agreement or controlling
document to which the Purchaser is a party or by which he is bound; and this
Subscription Agreement has been duly executed and delivered on behalf of the
Purchaser and is a legal, valid and binding obligation of the Purchaser;
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(m) Any information which the Purchaser has heretofore furnished or furnishes
herewith to the Company is complete and accurate and may be relied upon by the
Company in determining the availability of an exemption from registration under
Federal and state securities laws in connection with the offering of the Shares
and the Purchaser shall notify and supply corrective information to the Company
immediately upon the occurrence of any change therein occurring prior to the
Company's issuance of the Shares;
(n) The Purchaser has significant prior investment experience and is
knowledgeable about investment considerations in companies similarly situated as
the Company. The Purchaser has a sufficient net worth to sustain a loss of its
entire investment in the Company in the event such a loss should occur. The
Purchaser's overall commitment to investments which are not readily marketable
is nor excessive in view of its net worth and financial circumstances and the
purchase of the Shares will not cause such commitment to become excessive. The
investment in the Shares is a suitable one for the Purchaser; and
(o) The Purchaser is satisfied that he has received adequate information with
respect to all matters which he considers material to its decision to make this
investment; and
6. IRREVOCABILITY: BINDING EFFECT. The Purchaser hereby acknowledges and
agrees that the subscription hereunder is irrevocable by the Purchaser, except
as required by applicable law. This Subscription Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns.
7. MODIFICATION. This Subscription Agreement shall not be modified or
waived except by an instrument in writing signed by the party against whom any
such modification or waiver is sought
8. NOTICES. All notices and other communications hereunder shall be in
writing and shall be personally delivered or mailed by certified mail, return
receipt requested, postage prepaid. addressed (i) if to the Purchaser, to the
address shown under the Purchaser's signature at the end of this Subscription
Agreement, or (ii) if to the Company, to Rotary Power International, Inc., Xxx
Xxxxxxx Xxxxxx. X.X. Xxx 000, Xxxx-Xxxxx, Xxx Xxxxxx 00000-0000, Attention:
President, or at such other address as either party hereto shall have furnished
to the other party. Notices hereunder shall be deemed to have been duly given
when personally delivered, mailed by registered or certified mail to the party
entitled to receive the same.
9. ASSIGNABILITY: This Subscription Agreement and the rights, interests
and obligations hereunder are not transferable or assignable by the Purchaser
and the transfer or assignment of the Shares shall be made only in accordance
with the restrictions contained herein and all applicable laws.
10. APPLICABLE LAW. This Subscription Agreement shall be governed by and
construed in accordance with the internal laws of the State of New Jersey
without regard to its conflicts of laws or principles.
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11. BLUE SKY QUALIFICATION. The purchase of Shares under this Subscription
Agreement is expressly conditioned upon the exemption from qualification of the
offer and sale of the Shares from applicable Federal and state securities laws.
The Company shall not be required to qualify this transaction under the
securities laws of any jurisdiction and, should qualification be necessary, the
Company shall be released from any and all obligations to maintain its offer,
and may rescind any sale contracted, in such jurisdiction.
12. USE OF PRONOUNS. All pronouns and any variations thereof used herein
shall be deemed to refer to the masculine, feminine, neuter, singular or plural
as the identity of the person or persons referred to may require.
13. CONFIDENTIALITY. The Purchaser acknowledges and agrees that any
information or data the Purchaser has acquired from or about the Company, not
otherwise properly in the public domain, was received in confidence. The
Purchaser agrees not to divulge, communicate or disclose, except as may be
required by law or for the performance of this Subscription Agreement, or use to
the detriment of the Company or for the benefit of any other person or persons,
or misuse in any way, any confidential information of the Company, including any
scientific, technical, trade or business secrets of the Company and any
scientific, technical, trade or business materials that are treated by the
Company as confidential or proprietary, including, but not limited to, ideas,
discoveries, inventions, developments and improvements belonging to the Company
and confidential information obtained by or given to the Company about or
belonging to third parties.
14. MISCELLANEOUS.
(a) This Subscription Agreement constitutes the entire agreement between the
Purchaser and the Company with respect to the subject matter hereof and
supersedes all prior oral or written agreements and understandings, if any,
relating to the subject matter hereof. The terms and provisions of this
Subscription Agreement may be waived, or consent for the departure therefrom
granted, only by a written document executed by the party entitled to the
benefits of such terms or provisions.
(b) The provisions of Sections 4, 5, and 13 of this Subscription Agreement shall
survive the execution and delivery hereof and delivery of the Shares.
(c) Each of the parties hereto shall pay its own fees and expenses (including
the fees of any attorneys, accountants, appraisers or others engaged by such
party) in connection with this Subscription Agreement and the transactions
contemplated hereby whether or not the transactions contemplated hereby are
consummated.
(d) This Subscription Agreement may be executed in one or more counterparts each
of which shall be deemed an original, but all of which shall together constitute
one and the same instrument.
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(e) Each provision of this Subscription Agreement shall be considered separable
and if for any reason any provision hereof is determined to be invalid or
contrary to applicable law, such invalidity or illegality shall not impair the
operation of or affect the remaining portions of this Subscription Agreement.
(f) Section titles are for descriptive purposes only and shall not control or
alter the meaning of this Subscription Agreement as set forth in the text.
IN WITNESS WHEREOF, the Purchaser has executed this Subscription Agreement this
27 day of October, 1999.
Number of Shares Purchased:
______________ Shares Purchaser: ___________________________.
Price per Share: $0.18 US
by: ________________________________
Name:
Title:
Total Purchase Price for
Shares Purchased : $__________
Purchaser's Address and Tax I.D. Number:
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Tax I.D. Number
Agreed and accepted as of this
27 of October, 1999
ROTARY POWER INTERNATIONAL, INC.
BY: /s/ Xxx Xxxxx
-----------------------------
Name: Xxx Xxxxx
Title: President
