Exhibit 10.2
SHARE SUBSCRIPTION AGREEMENT
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TO: VALEMONT SUPPLY LIMITED
ADDRESS: Suite 504 - 455 Granville Street.
Xxxxxxxxx, X.X.
Xxxxxx X0X 0X0
1. Share Subscription. The undersigned ("Subscriber") hereby agrees to
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purchase eight million (8,000,000) shares of common stock, par value $0.0001, of
Valemont Supply Limited, a Washington corporation ("Company") for a total
purchace price of $46,000 ($.0058 per share).
2. Issuer Representations and Warranties. Issuer hereby represents and
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warrants to Subscriber as follows:
2.1 Organization, Good Standing and Qualification. The
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Issuer is a corporation duly organized, validly existing and in good standing
under the laws of the State of Washington.
2.2 Valid Issuance of Common Stock. The Common Stock, when
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issued and delivered in accordance with the terms hereof for the consideration
expressed herein, will be validly issued and outstanding, fully paid and
nonassessable.
2.3 Reporting Issuer. The Issuer will use its best efforts
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to become subject to the reporting requirements of the Securities Exchange Act
of 1934 (the "34 Act").
2.4 No Market Conditioning. The Issuer undertook no activity
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for the purpose of, or that could reasonably be expected to have the effect of,
conditioning the market in the United States for the Common Stock. The Issuer
did not place any advertisements in any publication referring to the offering of
the Common Stock for sale.
3. Subscriber Representations and Warranties. Subscriber hereby
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represents and warrants to Issuer as follows:
3.1 Authority of Subscriber. The Subscriber, if a
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corporation, partnership, trust, or any other entity than a natural person,
represents that the subscription of the Common Stock referred to in this
Agreement does not contravene its charter or other organizational documents or
the laws of the country, state or province of its incorporation, formation or
organization or of any other relevant jurisdiction. The Subscriber also
represents that it has the necessary authorizations to that effect.
3.2 Investment Experience. The Subscriber has such knowledge
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and experience in financial and business matters that it is capable of
evaluating the merits and risks of the prospective investment in the Common
Stock, which are substantial and has in fact evaluated such merits and risks in
making its investment decision to purchase the Common Stock. The Subscriber, by
virtue of its business and financial expertise, has the capacity to protect its
own interest in connection with this transaction, or has consulted with tax,
financial, legal or business advisors as to the appropriateness of an investment
in the Common Stock. The Subscriber has not been organized for the purpose of
investing in the Common Stock, although such investment is consistent with its
purposes.
3.3 Accredited Investor - The Subscriber is (check applicable
box):
1
Exhibit 10.2
(a) [ ] a bank as defined in Section 3(a)(2) of the
Securities Act of 1933, as amended (the "Act"), or a
savings and loan association or other institution as
defined in Section 3(a)(5)(A) of the Act acting in
either an individual or fiduciary capacity.
(b) [ ] an insurance company as defined in Section 2(13) of
the Act.
(c) [ ] an investment company registered under the Investment
Issuer Act of 1940 or a business development company as
defined in Section 2(a)(48) of that act.
(d) [ ] a Small Business Investment Issuer licensed by the
U.S. Small Business Administration under Section 301(c)
or (d) of the Small Business Investment Act of 1958.
(e) [ ] a plan established and maintained by a state, its
political subdivisions or any agency or instrumentality
of a state or its political subdivisions for the
benefit of its employees, if such plan has total assets
in excess of $5,000,000.
(f) [ ] an employee benefit plan within the meaning of Title
1 of the Employee Retirement Income Security Act of
1974, and the investment decision is made by a plan
fiduciary, as defined in Section 3(21) of such Act,
which is either a bank, savings and loan association,
insurance company or registered investment advisor, or
an employee benefit plan having total assets in excess
of $5,000,000 or, if a self-directed plan, with
investment decisions made solely by persons who are
Accredited Investors.
(g) [ ] a private business development company as defined in
Section 202(a(22) of the investment Advisors Act of
1940.
(h) [ ] an organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, a corporation,
Massachusetts or similar business trust, or a
partnership not formed for the specific purpose of
acquiring the Common Stock, with total assets in excess
of $5,000,000.
(i) [ ] any trust with total assets in excess of $5,000,000
not formed for the specific purpose of acquiring the
Common Stock, whose purchase is directed by a
sophisticated person who has such knowledge and
experience in financial and business matters that he is
capable of evaluating the merits and risks of the
prospective investment.
(j) [ ] a broker or dealer registered pursuant to Section 15
of the Securities Exchange Act of 1934, as amended.
(k) [X] an individual (See Section 3.4(a) below)
(l) [ ] none of the above (See Section 3.4(b) below)
3.4(a) Individual Subscriber. If the Subscriber is an individual,
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then the Subscriber (check an applicable box):
2
Exhibit 10.2
[X] is a director, executive officer or general partner of
the issuer of the Common Stock being offered or sold or a
director, executive officer or general partner of a general
partner of that issuer.
[ ] has an individual net worth, or joint net worth with
that person's spouse, at the time of his purchase exceeding
$1,000,000.
[ ] had an individual income in excess of $200,000 in each
of the two most recent years or joint income with that
person's spouse in excess of $300,000 in each of those years
and has a reasonable expectation of reaching the same income
level in the current year.
[ ] none of the above.
(Initial)
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3.4(b) If the Subscriber checked the box for "none of the above",
then the Subscriber is an entity each equity owner of which is an individual who
could check one of the first three boxes in section 3.4(a) above.
(Initial)
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3.5 No Distributor, Dealer or Underwriter. Subscriber is not
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a distributor or dealer of the Common Stock. Subscriber is not taking the
Common Stock with the intent to make a distribution of the Common Stock, as such
terms are defined in the Act and the '34 Act. In any event, if Subscriber is
deemed to be the distributor of the Common Stock offered hereby, Subscriber will
act in accordance with applicable law.
3.6 Investment Intent. The Subscriber is acquiring the
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Common Stock for its own account and for investment purposes and not for sale or
with a view to distribution of all or any part of such Common Stock and has no
present plans to enter into any contract, undertaking, agreement or arrangement
for such resale or distribution.
3.7 No Immediate Need for Liquidity. The Subscriber
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understands that the Common Stock is a "restricted security" within the meaning
of the Act, and certificates representing the Common Stock are legended with
certain restrictions on the resale of the Common Stock and the Common Stock may
not be resold without a valid exemption from registration under the Act, or
until a registration statement is filed with respect thereto under the Act.
There can be no assurance that upon registration of the Common Stock pursuant to
the Act, that a market for the Common Stock will exist on an exchange or market
or quotation system. Accordingly, the Subscriber is aware that there are legal
and practical limits on the Subscriber's ability to sell or dispose of the
Common Stock, and, therefore that the Subscriber must bear the economic risk of
the investment for an indefinite period of time. The Subscriber has adequate
means of providing for the Subscriber's current needs and possible personal
contingencies and has need for only limited liquidity of this investment. The
Subscriber's commitment to illiquid investments is reasonable in relation to the
Subscriber's net worth. The Subscriber is capable of bearing the high degree of
economic risks and burdens of this investment, including but not limited to the
possibility of complete loss of all its investment capital and the lack of a
liquid market, such that it may not be able to liquidate readily the investment
whenever desired or at the then current asking price.
3.8 Exempt Subscription. The Subscriber understands that the
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Common Stock is being offered and sold in reliance on specific exemptions from
the registration requirements of U.S. federal and state law and that the
representations, warranties, agreements, acknowledgments and understandings set
forth herein are being relied upon by the Issuer in determining the
applicability of such exemptions and the suitability of the Subscriber to
acquire such Common Stock.
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Exhibit 10.2
3.9 Authority of Signatory. The Subscriber has full power
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and authority to execute and deliver this Agreement and each other document
included herein as an exhibit to this Agreement for which signature is required,
and the person executing this Agreement on behalf of the subscribing individual,
partnership, trust, estate, corporation or other entity executing this Agreement
is a duly authorized signatory. If the signatory of this Agreement on behalf of
the Subscriber is not the Subscriber or an authorized officer or partner of the
Subscriber, the signatory represents and warrants to the Issuer that the
signatory is a professional fiduciary of the Subscriber, acting solely in its
capacity as holder of such account, as a fiduciary, executor or trustee.
3.10. Private Transaction. At no time was the Subscriber
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presented with or solicited by any leaflet, public promotional meeting,
circular, newspaper or magazine article, radio or television advertisement or
any other form of general advertising.
3.11. Citizenship. The Subscriber hereby certifies that:
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(a) neither it nor its beneficial owner[s], as
determined pursuant to Rule 13d-3 under the '34 Act, was a citizen of the United
States at the time it received the offer to purchase the Common Stock, or at the
closing of the purchase of the Common Stock;
(b) it was not in the United States at the time its buy
order was originated; and
(c) it did not acquire the Common Stock for the account
or benefit of any U.S. person.
3.12 Reliance on Own Advisors. The Subscriber has relied
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completely on the advice of, or has consulted with, his own personal tax,
investment, legal or other advisors and has not relied on the Issuer or any of
its affiliates, officers, directors, attorneys, accountants or any affiliates of
any thereof and each other person, if any, who controls any thereof, within the
meaning of Section 15 of the Act, except to the extent such advisors shall be
deemed to be as such.
4. Subscriber' Covenants and Acknowledgments. Subscribers make the
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following covenants and acknowledgments
4.1 Covenants of Subscriber. Subscriber shall not make any
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sale, transfer or other disposition of the Common Stock in violation of the Act
or the '34 Act, or any other applicable securities laws, or the rules and
regulations of the U.S. Securities and Exchange commission or of any securities
authority of any jurisdiction in which the sale, transfer or disposition of all
or any portion of the Common Stock unless and until (i) there is then in effect
a Registration Statement under the Act covering such proposed sale, transfer or
disposition and such disposition is made in accordance with such Registration
Statement; or (ii) the sale, transfer or disposition is made pursuant to a valid
exemption from the registration and prospectus delivery requirements of
applicable securities laws.
4.2 Acknowledgments of Subscriber. Subscriber acknowledges
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and understands as follows:
4.2.1 Risks of Investment. The Subscriber recognizes
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that investment in the Issuer involves certain risks, including the potential
loss of the Subscriber's investment herein, and the Subscriber has taken full
cognizance of and understands all of the risk factors related to the purchase of
the Common Stock.
4.2.2 No Government Approval. No federal or state
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agency has passed upon the Common Stock or made any finding or determination as
to the fairness of this transaction.
4.2.3 Price. The Price of the Common Stock was
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determined by the Issuer and bears no relationship to the Issuer's assets, book
value or results of operation.
4
Exhibit 10.2
4.2.4 No Registration. The Common Stock and any
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component thereof has not been registered under the Act or any securities laws
of any other jurisdiction by reason of exemptions from the registration
requirements of the Act and such laws, and may not be sold, pledged, assigned or
otherwise disposed of in the absence of an effective registration statement for
the Common Stock and any component thereof under the Act or unless an exemption
from such registration is available.
4.2.5 No Assurances of Registration. There can be no
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absolute assurance that any registration statement will be filed with respect to
the Common Stock or the Common Stock underlying the Common Stock, or if filed,
that such registration statement will become effective. Therefore, unless an
exemption from the registration requirements under applicable law is available,
the Subscriber may be required to bear the economic risk of the Subscriber's
investment for an indefinite period of time.
4.2.6 Legends. The certificates representing the Common
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Stock shall bear the following legend:
THIS SECURITY HAS NOT BEEN REGISTERED WITH THE U.S. SECURITIES
AND EXCHANGE COMMISSION UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT") OR ANY OTHER SECURITIES AUTHORITIES. IT IS
BEING OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
REGULATIONS PROMULGATED UNDER THE ACT. IT MAY NOT BE SOLD OR
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT OR AN EXEMPTION TO THE REGISTRATION REQUIREMENTS OF
THOSE SECURITIES LAWS.
The Issuer may in its sole discretion place a "Blue Sky" legend on the
certificates in accordance with U.S. State securities laws or as required by
applicable securities laws.
5. Regulation S. Issuer and Subscriber agree that Issuer, through
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its transfer agent, shall refuse to register any transfer or attempted transfer
of the Common Stock not made in accordance with the provisions of Regulation S
of the Securities Act of 1933 (the "Act"), pursuant to registration under the
Act, or pursuant to an available exemption from registration. The Subscriber
agrees to resell the Common Stock only in accordance with the provisions of
Regulation S of the Act, pursuant to registration under the Act, or pursuant to
an available exemption from registration; and agrees not to engage in hedging
transactions with regard to the Common Stock unless in compliance with the Act.
6. Notices. Any notice required or permitted to be given under
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this Subscription shall be deemed to have been given when sent by registered or
certified mail, postage prepaid, addressed to the person to receive notice at
the last address available in the records of the Company.
7. Heirs and Successors Bound. Subscriber may not cancel,
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terminate or revoke this Subscription. Subscriber executes this Subscription on
behalf of Subscriber, Subscriber's spouse and the marital community composed of
them. This Subscription shall bind and inure to the benefit of Subscriber's
heirs, personal representatives and successors.
8. Assignments. Subscriber may not assign or delegate any right
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or duty under this Subscription without the written consent of the Company.
9. Applicable Law And Jurisdiction.
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5
Exhibit 10.2
9.1 This Agreement shall be governed by and construed in
accordance with the laws of the State of Washington, without regard to conflicts
of law principles.
9.2 In the event of any dispute, controversy, claim or difference
that should arise between the parties out of or relating to or in connection
with this Agreement or the breach thereof, the parties shall endeavor to settle
such conflicts amicably among themselves. Should they fail to do so, the matter
in dispute shall be settled by arbitration pursuant to the provisions of R.C.W.
7.04. Procedurally, the arbitration will be conducted in conformity with
Washington Mandatory Arbitration Rules 5.1 - 5.4. The parties shall select a
single arbitrator within ten (10) days of the receipt of demand for arbitration.
If the parties fail to appoint an arbitrator within the ten (10) day period, any
party may make immediate application to the King County Superior Court for the
appointment of an arbitrator. The arbitration hearing shall take place in
Seattle, Washington, and shall commence within sixty (60) days of the
appointment of an arbitrator. Any party which is determined in such arbitration
to be the prevailing party shall be entitled to have its attorneys' fees and
costs paid by the non-prevailing party.
IN WITNESS WHEREOF, the undersigned Subscriber has executed this Share
Subscription Agreement this 25th day of June 2001.
SUBSCRIBER:
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/s/ X. X. Xxxx
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X.X. Xxxx
ACCEPTANCE
The foregoing subscription agreement and the consideration reflected
therein are hereby accepted.
DATED this 25th day of June 2001.
/s/ X. X. Xxxx
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X.X. Xxxx, President
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