Exhibit 10.32
SHARE AND CLASS 2 WARRANT PURCHASE AGREEMENT
THIS AGREEMENT made as of February 25, 2000 BETWEEN:
VIBRO-TECH INDUSTRIES, INC., a body corporate subsisting under the laws of
Delaware, with a place of business at Suite 0000 Xxxxxxxxx Xxxxx, 000 Xxxx
Xxxxxxx Xxxxxx, Xxxxxxxxx, X.X. X0X 0X0
(the "Company")
AND:
XX. XXXXXX XXXX, Businessman, having a residence at 0000 Xxxxxx Xxxxxx, Xxxx
Xxxx, Xx. 00000
(the "Purchaser")
WHEREAS:
A. The Company is not a distributing corporation under the Securities Act of
1933 or a reporting issuer under any provincial securities legislation of
Canada;
B. The Purchaser is not, nor will be, an affiliate of the Company as interpreted
under the Securities Act of 1933 or an associate of an affiliate or a member of
the board of directors; and C. The Company wishes to sell to the Purchaser
62,500 shares for US$0.40 per share and issue to the Purchaser 62,500 Class 2
Warrants, each Warrant entitling the Purchaser to purchase before December 31,
2002 one share for $0.50 per share, and the Purchaser has been engaged as a
financial consultant by the Company under an agreement dated February 25, 2000;
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 and Warrants on the Closing
Date.
Closing Date means the earlier of March 1, 2000 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$0.50 per Warrant.
Expiry Date means the earlier of 5:00 p.m., Delaware time, on December 31, 2002
or thirty business days after the Purchaser ceases to be a member of the board
of directors of the Company.
Purchaser means Xx. Xxxxxx Xxxx.
Rule 504, Regulation D means Rule 504, Regulation D under the Securities Act.
Shares means 62,500 shares of the Company to by purchased by the Purchaser for
US$0.40 per share.
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 February 25, 2000.
Unit means the unit purchased by the purchaser comprised of one share for
US$0.40 per share and a non-transferable Class 2 share purchase warrant to
acquire before December 31, 2002 a share for $0.50 per share.
Warrants means 62,500 Class 2 share purchase warrants, each warrant entitling
the holder to purchase before December 31, 2002 one share for US$0.50 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,
62,500 Units at the subscription price of US$0.40 per Unit on the terms and
other conditions of this Agreement.
Acceptance
2.02 The Company accepts the Purchaser's subscription and agrees to allot and
issue to the Purchaser on the Closing Date 62,500 Units comprising 62,500 Shares
and 62,500 Warrants on the terms and other conditions of this Agreement and to
cause a certificate or certificates representing the Shares and the 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 financial consultant of the Company forthwith on execution of this
contract.
Certificate Legend
2.04 The certificate or certificates representing the Shares, the Warrants and
any shares acquired on exercise of the 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 PURSUANT TO RULE 000 (0) XXXXXXXX TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT AND SUCH STATE SECURITIES LAWS, OR (3) 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 and that:
(a) the Shares, Warrants and shares to be acquired on exercise of the Warrants
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;
(b) the Shares and Warrants 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
(c) the Share Purchase Warrants are non-transferable regardless of whether or
not there exists an exemption under which the 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 with a
par value of $0.001 per share and the Company will allot and conditionally
reserve for issuance sufficient number of common shares to issue the Shares and
the share to be acquired on exercise of the Warrants;
(d) the Company is not a distributing corporation under the Securities Exchange
Act of 1934 or a reporting issuer under any other applicable legislation; 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.
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 California 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 Rule 504 of Regulation D 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;
(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;
(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 the Form 10-SB of the Company 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;
(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 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; and
(ii) a certificate representing the Warrants; and
(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.
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, telecopy or email and addressed as follows:
(a) the Purchaser:
Xx. Xxxxxx Xxxx
0000 Xxxxxx Xxxxxx, Xxxx Xxxx, Xx 00000
Fax: 000-000-0000
Email: xxxxxx_xxxx@xxxxx.xxx
(b) the Company
Vibro-Tech Industries, Inc.
0000 Xxxxxxxxx Xxxxx
000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X. X0X 0X0
Attention: Xx. Xxxx Xxxxx, President and Chief Executive Officer
Fax: 000-000-0000
Email: xxxx@xxxxx-xxxx.xxx
with a copy to:
Vibro-Tech Industries, Inc.
Xxxxx 000, 0000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, X. X. X0X 0X0
Attention: Mr. Xxxx XxxXxxxxx, Secretary
Fax: 000-000-0000
Email: xxxx@xxxxxxxxx.xxx
5.04 Any notice, payment or other communication so delivered, telecopied or
emailed will be deemed to have been given or served at the time of delivery of
transmission by telecopy or email.
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.
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, Chief Executive Officer
/s/ XXXXXX XXXX
