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EXHIBIT 10.10
SHARE PURCHASE AGREEMENT
THIS AGREEMENT made as of August 16, 1999
AMONG:
VIBRO-TECH INDUSTRIES INC., a body corporate subsisting under the laws of
Delaware, with a place of business at Suite 201-11240 Bridgeport Road, Richmond,
B.C. V6X IT2
(the "Company")
OF THE FIRST PART
AND:
Tan Phaik Sim., Businesswoman, with a place of business at Suite 1830, 0000
Xxxxx Xxxxxx, Xxxxxxxxx, X. X. X0X 0X0
(the "Purchaser")
OF THE SECOND PART
WHEREAS:
A. The Company is not a distributing company under the Securities Exchange Act
of 1934 or a reporting issuer under any provincial securities legislation of
Canada;
B. The Purchaser is, or will be, an affiliate of the Company as interpreted
under the Securities Act of 1933 by reason of becoming a member of the board of
directors of the Company; and
C. The Company wishes to sell to the Purchaser 175,000 units, each unit
comprised of one share for US$0.40 per share and a share purchase warrant to
acquire before August 16, 2001 a share for $0.40 per share; and
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WITNESSES that the parties mutually covenant and agree as follows:
ARTICLE 1 DEFINITIONS AND INTERPRETATION
1.01 In this Agreement, including the recitals and schedules to this Agreement,
unless the context otherwise requires:
Closing means the procedure for the issue of Shares on the Closing Date.
Closing Date means the earlier of August, 1999 or such other date designated by
the Company when the date on which the Company will issue, and the Purchaser
will pay for, the Units.
Company means Vibro-Tech Industries Inc..
Exchange means the OTC Bulletin Board.
Exchange Act means the Securities Exchange Act of 1934 (U.S.), as amended from
time to time.
Exercise Price means US$0.40 per Warrant Share.
Expiry Date means the earlier of 5:00 p.m., Delaware time, on July 31, 2000 or
thirty business days after the Purchaser ceases to be a member of the board of
directors of the Company.
Purchaser means Xx. Xxx Phaik Sim.
Rule 504, Regulation D means Rule 504, Regulation D under the Securities Act.
Shares means 175,000 shares of the Company to by Purchased by the Purchaser for
US$0.40 per share.
Share Purchase Warrant means the right granted by this Agreement to acquire the
Warrant Shares.
Securities Act means the Securities Act of 1933 (U.S.), as amended from time to
time.
Share or Shares means a common share or common shares of the Company as
constituted on August 12, 1999.
Unit means the unit purchased by the purchaser comprised of one share for
US$0.40 per share and a non-transferable share purchase warrant to acquire
before August 16, 2001 a share for $0.40 per share;
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Warrant Shares means 175,000 shares to be acquired, if at all, before August 16,
2001 for US$0.40 per share.
1.02 The captions, section numbers and article numbers appearing in this
Agreement are inserted for convenience of reference only and will in no way
define, limit, constrict or describe the scope or intent of this Agreement nor
in any way affect this Agreement.
1.03 This Agreement and all matters arising under this Agreement will be
governed by, construed and enforced in accordance with the laws of Delaware and
any proceeding commenced or maintained in connection with this Agreement will be
so commenced and maintained in the court of appropriate jurisdiction in the City
of Wilmington, Delaware to which jurisdiction the parties irrevocably attorn.
1.04 In this Agreement, wherever the context requires, words importing the
singular number will include the plural and vice versa, words importing the
masculine gender will include the feminine and neuter genders and words
importing persons will include firms and corporations and vice versa.
1.05 Unless otherwise stated, a reference in this Agreement to a numbered or
lettered article, section, paragraph or subparagraph refers to the article,
section, paragraph or subparagraph bearing that number or letter in this
Agreement.
1.06 If any covenant or other provision of this Agreement is invalid, illegal or
incapable of being enforced by reason of any rule of law or public policy such
covenant or other provision will be severed; all other terms and conditions of
this Agreement will, nevertheless, remain in full force and effect and no
covenant or provision will be deemed dependent upon any other covenant or
provision unless so expressed herein.
ARTICLE 2 SUBSCRIPTION FOR UNITS
Subscription
2.01 The Purchaser subscribes for, and agrees to pay on the Closing Date for,
175,000 Units at the subscription price of US$0.40 per Unit on the terms and
other conditions of this Agreement.
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Acceptance
2.02 The Company accepts the Purchaser's subscription and agrees to allot and
issue to the Purchaser on the Closing Date 175 000 Units comprising 175,000
Shares and 175,000 Share Purchase Warrants on the terms and other conditions of
this Agreement and to cause a certificate or certificates representing the
Shares and the Share Purchase Warrants to be issued to the Purchaser.
2.03 It is a condition of the acceptance of the Purchaser that the Purchaser is
appointed a member of the board of directors of the Company forthwith on
execution of this contract and is one of management's nominees for election to
the board of directors of the Company at the first annual meeting of the
shareholders of the Company for which the board of directors are required to
solicit proxies for the election of their nominees to the board of directors.
Certificate Legend
2.04 The certificate or certificates representing the Shares, the Share Purchase
Warrants and any Warrant Shares acquired on exercise of the Share Purchase
Warrants will be endorsed with a legend as follows:
THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT"), THE DELAWARE STATE SECURITIES ACT OR ANY
OTHER APPLICABLE SECURITES ACT AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED
EXCEPT (1) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND
SUCH STATE SECURITIES LAWS, OR (2) AT THE OPTION OF THE COMPANY, UPON DELIVERY
TO THE COMPANY OF AN OPINION OF COUNSEL FOR THE TRANSFEROR, REASONABLY
SATISFACTORY TO COUNSEL FOR THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED.
Securities Considerations
2.05 Purchaser acknowledges that the Units are issued pursuant to the exemption
from the registration requirements contained in Rule 504, Regulation D of the
Securities Act an exemption form the prospectus and registration requirements of
the Securities Act (British Columbia) and that:
(a) the Shares, Share Purchase Warrants and Warrant Shares have not been
registered under the Securities Act or any state or provincial securities laws,
are being offered in reliance on certain exemptions contained in the Securities
Act and such state or provincial securities laws and that the Company will use
its best efforts to register the Shares and the Warrant Shares before December
31, 1999;
(b) the Shares will not be sold or transferred except pursuant to:
(i) an effective registration statement under the Securities Act and any
applicable state securities laws;
(ii) Rule 144 promulgated under the Securities Act; or
(ii) an opinion of counsel satisfactory to the Company to the effect that such
registration is not required; and
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(c) the Share Purchase Warrants are non-transferable regardless of whether or
not there exists an exemption under which the Share Purchase Warrants could be
sold or transferred to a third party; and
(d) no federal, state or provincial agency has made any finding or determination
as to the fairness of the investment, or any recommendation or endorsement of
the Shares or any other securities of the Company.
ARTICLE 3 REPRESENTATIONS, WARRANTIES AND COVENANTS
Representations, Warranties and Covenants of the Company
3.01 The Company represents and warrants to, and covenants with, the Purchaser
that:
(a) the Company is a body corporate subsisting under the laws of Delaware,
validly exists and is in good standing with respect to all applicable law, and
is duly registered to carry on business in all jurisdictions in which it carries
on business;
(b) the Units for which certificates are delivered to the Purchaser pursuant to
this Agreement will, at the time of such delivery, be duly authorized, validly
issued, fully paid and non-assessable;
(c) the authorized capital of the Company is 100,000,000 common shares without
par value and the Company will allot and conditionally reserve for issuance
sufficient number of common shares to issue the Shares;
(d) the Company is not a distributing corporation under the Securities Exchange
Act of 1934 or a reporting issuer under any other applicable legislation but
will use its best efforts to become a distributing corporation under the
Securities Exchange Act of 1934 before December 31, 1999; and
(e) the execution and delivery of this Agreement has been duly authorized by all
necessary corporate proceedings and the completion of the transactions
contemplated in this Agreement does not conflict with or result in the breach or
acceleration of any indebtedness under, or constitute default under, the
constating documents of the Company or any indenture, mortgage, agreement,
lease, license or other instrument to which the Company is a party or by which
it is bound, or any judgment or order of any Court or administrative body by
which the Company is bound; and
3.02 The representations, warranties, covenants and agreements of the Company
contained in this Agreement will be true at and as of the Closing as though such
representations, warranties, covenants and agreements were made at and as of the
Closing and except for the waiver of any condition by the Purchaser, the
representations, warranties, covenants and agreements of the Company will
survive the Closing and notwithstanding the closing of the issuance of the Units
under this Agreement, will continue in full force and effect.
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Representations, Warranties and Covenants of the Purchaser
3.03 The Purchaser represents and warrants to and covenants with the Company
that:
(a) the Purchaser is a resident of British Columbia and is aware that the Units
are being, and the securities comprising the Units will be, issued pursuant to
the exemption from registration contained in Regulation S of the Securities Act;
(b) the Purchaser is purchasing the Shares for investment purposes as principal
for its own account and not for the benefit of any other person;
(c) the Purchaser has the legal capacity and competence to execute this
Agreement and that all necessary approvals by directors and shareholders of the
Purchaser have been, or will in the ordinary course be, given to authorize the
execution and delivery of this Agreement by the Purchaser;
(d) the Purchaser is not purchasing the Shares as a result of having any
material information about the Company's affairs which has not been generally
disclosed as at the date of the announcement of the purchase;
(e) the Purchaser acknowledges that any interest accruing on Subscription Funds
will accrue to the sole benefit of the Company and may be applied by the Company
for general corporate purposes; and
(f) the Purchaser is, or will be, an affiliate of the Company as interpreted
under the Securities Act;
(g) the Purchaser understands that the Shares have not been registered under the
Securities Act or the securities laws of any states of the United States or of
the provinces of Canada;
(h) the Purchaser has such knowledge and experience in financial and business
matters that it is capable of seeking out and evaluating the information
relevant to evaluating the Company, the proposed activities thereof, and the
merits and risks of the prospective investment, and to make an informed
investment decision in connection therewith;
(i) the Purchaser realizes that, since the Shares are restricted and cannot be
readily sold, that the Purchaser may not be able to sell or dispose of any of
the Shares and, therefore, that Purchaser must not purchase the Shares unless
Purchaser has liquid assets sufficient to assure that such purchase will cause
no undue financial difficulties;
(j) the Purchaser is aware of the provisions of Rule 144 promulgated under the
Securities Act ("Rule 144") which permit limited resale of shares purchased in a
private placement subject to the satisfaction of certain conditions, including,
among other things, the existence of a public market for the Shares or
conversion stock, the availability of certain current public information about
the Company, the resale occurring not less than one year after a party has
purchased and paid for the security to be sold, the sale being effected through
a "broker's transaction" or in transactions directly with a "market maker" and
the number of shares being sold during any three-month period not exceeding
specified limitations;
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(k) the Purchaser understands that all information which Purchaser has provided
to the Company concerning the Purchaser, the Purchaser's financial position and
knowledge of financial and business matters is correct and complete as of this
Agreement and, if there should be any material change in such information before
the acceptance of this subscription, the Purchaser promptly notify the Company;
(l) the Purchaser is an "accredited investor" within the meaning of Rule 501(a)
of Regulation D promulgated by the Securities and Exchange Commission and a
sophisticated purchaser with the meaning of that expression under the Securities
Act (B.C.);
(m) the Purchaser has been provided with all materials and information
requested, to the extent possessed or obtainable by the Company without
unreasonable effort and expense, including any information requested to verify
information furnished and has been provided the opportunity to ask questions of,
and receive answers from, the Company and the officers, employees, and
representatives of the Company concerning the terms and conditions of this
offering; and
(n) no party has made any representations to the Purchaser as to the
profitability, if any, of the Company, nor has the Purchaser relied on any
statements made by any persons concerning the value of the investment in the
Shares or the risks associated therewith and the Purchaser has made such
inquiries as deemed necessary to make an informed decision, independent of any
representations by any persons connected in any way with the Company.
3.04 The Purchaser will execute and complete Form 20(IP) attached to this
agreement as schedule A.
3.05 The representations, warranties, covenants and agreements of the Purchaser
contained in this Agreement will be true at and as of the Closing as though such
representations, warranties, covenants and agreements were made at and as of the
Closing and except for the waiver of any condition by the Company, the
representations, warranties, covenants and agreements of the Purchaser will
survive the Closing and notwithstanding the closing of the issuance of the
Shares under this Agreement, will continue in full force and effect.
ARTICLE 4 CLOSING
4.01 Closing will occur at the principal business office of the Company at 10:00
a.m. on the Closing Date as designated by the Company.
4.02 At the Closing, the issuance of the Shares will be completed by the tabling
and delivery:
(a) by the Company of:
(i) a certificate representing the Shares;
(ii) a certificate representing the Share Purchase Warrants; and
(iii) a certified copy of a resolution of the board of directors of the Company
appointing the Purchaser as a member of the board of directors of the Company;
and
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(b) by the Purchaser of:
(i) a certified cheque or bank draft drawn in United States dollars and payable
to the Company for the Subscription Funds; and
(ii) a written consent to act as a director of the Company.
ARTICLE 5 GENERAL PROVISIONS
Time
5.01 Time is of the essence of the performance of every obligation under this
Agreement, and no failure or lack of diligence by any party in proclaiming or
seeking redress for any violation of, or insisting on strict performance of, any
provision of this Agreement will prevent a subsequent violation of that
provision, or of any other provision, from giving rise to any remedy that would
be available if it were an original violation of that provision or another
provision.
5.02 This Agreement will be binding upon and enure to the benefit of the
respective heirs, executors, administrators and other legal representatives and,
to the extent permitted hereunder, the respective successors and assigns, of the
parties.
Notices
5.03 Unless otherwise provided herein, any notice, payment or other
communication to a party under this Agreement may be made, given or served by
delivery or telecopy and addressed as follows:
(a) if to the Company:
Vibro-Tech Industries Ltd.
201-11240 Bridgeport Road
Richmond, B.C. V6X IT2
Attention: Mr. Boo Xxxx Xxxxx, Chief Executive Officer
Attention: Xx. Xxxxxxx Xxxx, President
Fax: 000-000-0000
(b) if to the Purchaser:
Xx. Xxx, Phaik Sim
Suite 1830, 0000 Xxxxx Xxxxxx
Xxxxxxx, X. X. X0X 0X0
5.04 Any notice, payment or other communication so delivered or telecopied will
be deemed to have been given or served at the time of delivery of transmission
by telecopy
5.05 A party may by notice change its address for service.
Entire Agreement
5.06 This Agreement constitutes the entire agreement between the parties and
supercedes all previous agreements or understandings between the parties in any
way relating to its subject matter and the Company has made not representations,
inducements, warranties or promises concerning this Agreement or the matters
referred to herein which are not embodied in this Agreement.
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Binding Agreement
5.07 This Agreement will enure to the benefit of and will be binding upon the
parties hereto and their respective heirs, executors, administrators, personal
representatives and successors.
IN WITNESS WHERE OF this Agreement has been executed by the Company and the
Purchaser as at the date first set forth above.
VIBRO-TECH INDUSTRIES INC.
By: /s/ Boo Xxxx Xxxxx
Boo Xxxx Xxxxx, Chief Executive Officer
Signed, Sealed and Delivered by Tan )
Phaik Sim in the presence of: )
/s/ Xxxx XxxXxxxxx /s/ Tan, Phaik Sim
Xxxx XxxXxxxxx TAN, PHAIK SIM
600-1090 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, X. X. X0X 0X0
30072001/1-10
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SCHEDULE A
FORM 20A (IP) - Securities Act (B.C.) - ONLY B.C. RESIDENTS
Acknowledgement of Individual Purchaser
1. I have agreed to purchase from Vibro-Tech Industries Inc. (the "Company")
175,000 units at US$0.40 per unit (the "Securities") of the Company, each unit
comprised on one share (a "Share") and one non-transferable share purchase
warrant (a "Warrant") of the Company. One Warrant entitles the holder to
purchase an additional share of the Company for US$0.40 per share up to one
years after the closing date in respect of that unit.
2. I am purchasing the Securities as principal and, on closing of the agreement
of purchase and sale, I will be the beneficial owner of the Securities.
3. I [circle one] have/have not received an offering memorandum describing the
Company and the Securities.
4. I acknowledge that:
(a) no securities commission or similar regulatory authority has reviewed or
passed on the merits of the Securities, AND
(b) there is no government or other insurance covering the Securities, AND
(c) I may lose all of my investment, AND
(d) there are restrictions on my ability to resell the Securities and it is my
responsibility to find out what those restrictions are and to comply with them
before selling the Securities, AND
(e) I will not receive a prospectus that the British Columbia Securities Act
(the "Act") would otherwise require be given to me because the Company has
advised me that it is relying on a prospectus exemption, AND
(f) because I am not purchasing the Securities under a prospectus, I will not
have the civil remedies that would otherwise be available to me, AND
(g) the Company has advised me that it is using an exemption from the
requirement to sell through a dealer registered under the Act, except purchases
referred to in paragraph 5(g), and as a result I do not have the benefit of any
protection that might have been available to me by having a dealer act on my
behalf.
5. I also acknowledge that: [circle one]
(a) the Investor is purchasing as principal and has the investment acumen to
assess the offering as a result of his net worth and previous business or
investment experience, or advice he received relating to the investment that was
independent advice on the offering obtained from a registered advisor or an
advisor exempted from registration under one of the Act applicable in the
Jurisdiction in which the subscriber is resident and not obtained from a
promoter of the Company; or
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(b) the Investor is purchasing as principal and is able, on the basis of
information about the investment provided by the Company, to evaluate the risks
and merits of the prospective investment because of:
(i) the Investor's financial, business or investment experience;
(ii) advice the Investor receives from a person that is registered to advise, or
is exempt from the requirement to be registered to advise, in respect of the
Shares and that is not an insider of, or in a special relationship with, the
Company; or
(c) the Investor is one of the following:
(i) a person who is registered under the B. C. Act; or
(ii) an individual resident in British Columbia who:
(A) has a net worth, or net worth jointly with the individual's spouse, at the
Closing date, of not less than Cdn $400,000; or (B) has had in each of the two
most recent calendar years, and reasonably expects to have in the current
calendar year:
(I) an annual net income before tax of not less than Cdn $75,000; or
(II) and annual net income before tax, jointly with the individual's spouse, of
not less than Cdn $125,000; or (iii) a corporation, partnership or trust
resident in British Columbia that:
(A) has assets of not less than Cdn $400,000; or
(B) has had in each of the two most recent calendar years, and reasonably
expects to have in the current calendar year, net income before tax of not less
than Cdn $125,000; or
(C) in B.C., a corporation in which all of the voting shares are beneficially
owned by sophisticated purchasers or of which the majority of the directors are
sophisticated purchasers;
(D) in B.C., a general partnership in which all of the partners are
sophisticated purchasers;
(E) in B. C., a limited partnership in which the majority of the general
partners are sophisticated purchasers; or
(F) in B. C., a trust in which all of the beneficiaries are sophisticated
purchasers or the majority of the trustees are sophisticated purchasers; or
(d) the Investor is purchasing as principal and is a spouse, parent, brother,
sister or child of a senior officer or director of the Company, or of an
affiliate of the Company, or is a company, all the voting securities of which
are owned beneficially by one or more of a spouse, parent, brother, sister or
child of a senior officer or director of the Company, or of an affiliate of the
Company; or
(e) the Investor is a director or senior officer of the Company, or an affiliate
of the Company, or is a company, all the voting securities of which are owned
beneficially by one or more of a director or senior officer of the Company, or
of an affiliate of the Company; or
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6. If I am an individual referred to in paragraph 5(b), 5(c), or 5(d), I
acknowledge that, on the basis of information about the Securities furnished by
the Company, I am able to evaluate the risks and merits of the Securities
because: [circle one]
(a) of my financial, business or investment experience, OR
(b) I have received advice from a person [Name of adviser: ____________________
(the "Adviser")] who has advised me that the Adviser is:
(i) registered to advise, or exempted from the requirement to be registered to
advise, in respect of the Securities, and
(ii) not an insider of, or in a special relationship with, the Company.
The statements made in this report are true.
DATED __________________________, 1999.
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Signature of Purchaser
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Name of Purchaser
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Address of Purchaser
RHS\RHS07280\7\
