Exhibit 10.3
SUBSCRIPTION AGREEMENT
ORDINARY SHARES
TNCI UK Limited
February 12, 2002
TO: TNCI UK LIMITED
Xxx Xxxx
Xxxxx Xxxx
Xxxxx XX0 0XX
Xxxxxxx
Tel: 00(0) 0000 000 000
Fax: 00(0) 0000 000 000
Attention: Xxxxxxx X. Xxxxxx, Managing Director
Gentlemen:
1. SUBSCRIPTION. The investor named below hereby agrees to subscribe for
21,112,470 ordinary shares of 0.01p each ("Ordinary Shares") in the capital of
TNCI UK Limited, a company incorporated under the laws of England and Wales (the
"Company"), at a price per Ordinary Share of $0.0758. The number of Ordinary
Shares subscribed for shall equal 51% of the Company's outstanding share
capital, which shall consist of actual shares outstanding and employee stock
options and warrants. The aggregate consideration payable for the subscription
shall be $1,600,000. Payment of the subscription price shall be made on signing
of this Agreement and shall consist of $1,000,000 by wire of immediately
available funds pursuant to the instructions attached hereto as Exhibit "B" and
a $600,000 note payable within 90 days after the date hereof (the "Note"). The
form of Note is attached hereto as Exhibit "A".
2. ADDITIONAL TERMS. Investor acknowledges and understands that: (i) as
consideration for its services in connection with this transaction, Global
Technologies, Ltd., a Delaware corporation ("Global"), shall receive warrants
exercisable for 2,069,850 Ordinary Shares (representing 5% of the Company's
outstanding share capital) and a grant of the exclusive distributorship with
respect to any of the Company's products or technologies for the rail industry
for the United States of America; and (ii) as consideration for its services in
connection with this transaction, the Company shall enter into a two-year
management and consulting agreement with Ocean Castle Partners LLC, which such
agreement shall provide for payment of $33,000 per month.
3. CONDITIONS. It shall be a condition to investor's obligation to fund the
purchase price:
(i) That Global shall have converted its debt position to equity,
except for $48,000 in advances that Company shall repay to Global
in 12 monthly instalments beginning with the month in which funds
are received by the Company pursuant hereto and then continuing
for the next 11 months on the first day thereof.
(ii) That Global shall have provided a letter to the Company pursuant
to which Global waives any preferential rights that it may have in
connection with its Preference Shares until such time as the
Company has sufficient authorized Ordinary Shares to allow for the
conversion by Global of its Preference Shares to Ordinary Shares,
and that at such time, Global shall direct that its Preference
Shares be so converted.
(iii) That the investor shall have the right to designate a majority of
the directors of the Company's board.
4. REPRESENTATIONS AND WARRANTIES OF SUBSCRIBER. By executing this
Subscription Agreement, the investor signatory hereto represents and warrants to
Company that such investor has the full right, power, authority and capacity to
execute and deliver this Agreement and to perform its obligations hereunder; and
that this Agreement has been duly authorized, executed and delivered by the
investor and constitutes the legal, valid and binding obligation thereof,
enforceable against the investor in accordance with its terms.
5. REPRESENTATIONS AND WARRANTIES OF COMPANY. By executing this
Subscription Agreement, Company represents and warrants that Company has the
full right, power, authority and capacity to execute and deliver this Agreement
and to perform its obligations hereunder; that this Agreement has been duly
authorized, executed and delivered by the Company and constitutes the legal,
valid and binding obligations of the Company, enforceable against the Company in
accordance with its terms; and that the Ordinary Shares being issued pursuant to
this Agreement, and any Ordinary Shares issued upon exercise of any warrants
subscribed for pursuant to the terms hereof, are duly authorized, validly issued
and fully paid. In addition, the Company hereby represents and warrants that at
such time as the Company's Ordinary Shares become publicly tradable in the
United Kingdom, any and all restrictions on transfer of Ordinary Shares
contained in the Company's organization documents shall be of no further force
or effect.
6. MISCELLANEOUS.
(a) BINDING AND BENEFIT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, personal
representatives, successors and permitted assigns.
(b) INDULGENCES, ETC. Neither the failure nor any delay on the part of
either party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence. No waiver shall be effective unless it is
in writing and is signed by the party asserted to have granted such waiver.
(c) CONTROLLING LAW. This Agreement and all questions relating to its
validity, interpretation, performance and enforcement shall be governed by and
construed in accordance with the laws of the England and Wales.
(d) EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument. This Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signatures of all of the parties reflected hereon as the
signatories.
(e) PROVISIONS SEPARABLE. The provisions of this Agreement are
independent of and separable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that for any reason
any other or others of them may be invalid or unenforceable in whole or in part.
(f) ENTIRE AGREEMENT. This Agreement contains the entire understanding
between the parties hereto with respect to the subject matter hereof, and
supersedes all prior and contemporaneous agreements and understandings,
inducements or conditions, express or implied, oral or written, except as herein
contained. The express terms hereof control and supersede any course of
performance and/or usage of the trade inconsistent with any of the terms hereof.
This Agreement may not be modified or amended other than by an agreement in
writing.
(g) PARAGRAPH HEADINGS. The Paragraph and subparagraph headings in
this Agreement have been inserted for convenience of reference only; they form
no part of this Agreement and shall not affect its interpretation.
(h) GENDER, ETC. Words used herein, regardless of the number and
gender specifically used, shall be deemed and construed to include any other
number, singular or plural, and any other gender, masculine, feminine or neuter,
as the context indicates is appropriate.
(i) NON-ASSIGNMENT. The investor agrees not to assign, charge or
otherwise deal with this Agreement in any way without the prior written consent
of the Company.
[The balance of this page is left blank intentionally.]
TNCI UK LIMITED
COUNTERPART SUBSCRIPTION AGREEMENT SIGNATURE PAGE
Investor, desiring to subscribe for Ordinary Shares of the Company, by
executing this Signature Page hereby accepts, adopts and agrees to all terms,
conditions and representations of the foregoing Subscription Agreement and
agrees to subscribe for the number of Ordinary Shares stated below.
Number of Ordinary Shares subscribed for: 21,112,470, constituting 51% of the
outstanding share capital of the Company, including employee stock options.
Investor shall transfer via wire transfer of immediately available funds to an
account designated by the Company: $1,000,000. In addition, investor shall
execute and deliver to Company the Note.
Dated: February 12, 2002
SIGNATURE BELOW:
Individuals:
------------------------------------ -----------------------------------
(Investor's Signature) (Print Investor's Name
Entities:
ROYAL HILL COMPANY, a BVI company
(Name of Entity)
/s/ Xxxx Xxxxxxxx
------------------------------------ X. Xxxxxxxx
(Signature of Authorized Signatory (Print Authorized Signatory's Name)
for Entity)
President
(Authorized Signatory's Title)
Principal Address: Mailing Address, if different from
Principal Address:
------------------------------------ -----------------------------------
------------------------------------ -----------------------------------
------------------------------------ -----------------------------------
ACCEPTANCE
This Subscription for Ordinary Shares of TNCI UK Limited is hereby accepted
by TNCI UK Limited.
DATED: February 12, 2002.
TNCI UK Limited
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------
Authorized Signatory
EXHIBIT A
PROMISSORY NOTE
Principal Sum: $600,000 Dated: February 12, 2002
Holder: TNCI UK Limited
Address: Xxx Xxxx
Xxxxx Xxxx
Xxxxx, XX0 0XX
Xxxxxxx
Attention: Managing Director
ROYAL HILL COMPANY, a company incorporated under the laws of the British
Virgin Islands (the "Company"), hereby promises to pay the Principal Sum to the
order of Holder, its successors or permitted assigns, on the date (the "Maturity
Date"), which is the earlier of (i) the date that is 90 days from the date
hereof or (ii) the date on which Holder gives an Acceleration Declaration (as
defined below). This Note shall not bear interest prior to the Maturity Date.
This Note shall accrue interest after the Maturity Date at the rate of 18% per
annum (or, if less, the highest rate permitted by law) ("Default Interest").
Payment shall be made to Holder in immediately available funds at the address
set forth above or by wire transfer of immediately available funds pursuant to
the wire instructions attached hereto as Exhibit "A".
The Company may at any time prepay the outstanding principal balance
represented by this Note, in whole. Any such prepayment shall be by wire
transfer of immediately available funds in accordance with the wire instructions
provided by Holder that are attached hereto as Exhibit "A", together with
written notice to Holder advising it of such prepayment.
An "event of default" with respect to this Note shall exist if any of the
following shall occur:
(i) The Company shall breach or fail to comply with any material provision
of this Note and such breach or failure to comply shall continue for two
days after written notice by Holder to the Company for a monetary default,
and five days after written notice by Holder to the Company for a
non-monetary default.
(ii) A receiver, liquidator or trustee of the Company or of a substantial
part of its properties shall be appointed by court order and such order
shall remain in effect for more than 30 days; or the Company shall be
adjudicated bankrupt or insolvent; or a substantial part of the property of
the Company shall be sequestered by court order and such order shall remain
in effect for more than 30 days; or a petition to reorganize the Company
under any bankruptcy, reorganization or insolvency law shall be filed
against the Company and shall not be dismissed within 30 days after such
filing.
(iii) The Company shall file a petition in voluntary bankruptcy or request
reorganization under any provision of any bankruptcy, reorganization or
insolvency law, or shall consent to the filing of any petition against it
under any such law.
(iv) The Company shall make an assignment for the benefit of its creditors,
or admit in writing its inability to pay its debts generally as they become
due, or consent to the appointment of a receiver, trustee or liquidator of
the Company, or of all or any substantial part of its properties.
If an event of default referred to above shall occur, the Holder may at any
time thereafter, in addition to Holder's other remedies, by written notice to
the Company (an "Acceleration Declaration"), declare the principal amount of
this Note, plus any Default Interest and any other amounts due hereunder to be
due and payable immediately.
All notices and other communications required or permitted to be given
hereunder shall be in writing and shall be given by delivery in person, by
facsimile, recognized overnight courier, e-mail, or by registered or certified
mail, postage prepaid, return receipt requested, addressed as follows: (i) if to
the Holder, to such address, e-mail address or facsimile number as is set forth
in the heading hereof or as the Holder shall furnish to the Company in
accordance with this paragraph, and (ii) if to the Company, to it at its
headquarters office, e-mail address or facsimile number as set forth below, or
to such other address as the Company shall furnish to the Holder in accordance
with this paragraph. Delivery in person shall be deemed received by the intended
recipient thereof upon delivery, by recognized overnight courier two days after
receipt by such courier, by e-mail upon actual receipt, by registered or
certified mail five days after posted, and by fax at the time indicated for
delivery by a facsimile transmission confirmation sheet produced by the
facsimile machine that originated the facsimile transmission.
This Note shall be governed and construed in accordance with the laws of
England and Wales applicable to agreements made and to be performed entirely
within such jurisdiction. The courts in London, England shall have exclusive
jurisdiction over this instrument and the enforcement hereof.
The Company waives protest, notice of protest, presentment, dishonor,
notice of dishonor and demand.
If any provision of this Note shall for any reason be held to be invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provision hereof, but this Note shall be construed as if such invalid or
unenforceable provision had never been contained herein.
The waiver of any event of default or the failure of the Holder to exercise
any right or remedy to which it may be entitled shall not be deemed a waiver of
any subsequent event of default or of the Holder's right to exercise that or any
other right or remedy to which the Holder is entitled.
The Holder of this Note shall be entitled to recover its legal and other
costs of collecting on this Note, and such costs shall be deemed added to the
principal amount of this Note.
This Note may be changed, terminated or otherwise modified only in writing
executed by the party against whom such modification is sought to be enforced.
Any notices required hereunder to the Company shall be sent, e-mailed or
faxed to the Company's principal business address at:
----------------------------------
----------------------------------
----------------------------------
----------------------------------
Fax No.
--------------------------
e-mail
--------------------------
[THE REMAINDER OF THIS PAGE IS LEFT INTENTIONALLY BLANK]
IN WITNESS WHEREOF, the Company has caused this Note to be duly executed on
the date first above written.
ROYAL HILL COMPANY
By: /s/ Xxxx Xxxxxxxx
---------------------------------
Name: Xxxx Xxxxxxxx
Title: President
EXHIBIT A
-------------------------
WIRE INSTRUCTIONS
BANK OF SCOTLAND
00 XXXXX XXXXXX
XXXXXXXXXX, XX0 0XX
XXXXXXX
SORT CODE 12-09-26
ACCOUNT NO.: 07804USD01
BENEFICIARY: TNCI UK LTD
EXHIBIT B
BANK OF SCOTLAND
00 XXXXX XXXXXX
XXXXXXXXXX, XX0 0XX
XXXXXXX
SORT CODE 12-09-26
ACCOUNT NO.: 07804USD01
BENEFICIARY: TNCI UK LTD
