IN ACCORDANCE WITH RULE 202 OF REGULATION S-T, THIS CURRENT REPORT
IS BEING FILED IN PAPER PURSUANT TO A CONTINUING HARDSHIP
EXEMPTION.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): January 10, 1997
TIREX AMERICA INC.
(Exact name of registrant as specified in its charter)
Delaware 3-17598-NY 22-2824362
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
3767 Thimens, Suite 207
Ville St.Laurent, Quebec H4R 1W4
(Address of principal executive offices) (Zip Code)
(514) 335-0111
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year,
if changed since last report)
Page 1 of 25 pages
<PAGE>
ITEM 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S
SALES
On January 10, 1997, (the "Purchase Date") Registrant sold two
hundred thousand (200,000) shares of its common stock, $.001 par value,
per share (the "Shares") without registration under the Securities Act
of 1933, as amended (the "Securities Act") pursuant to Regulation S
thereof. The following sets forth information respecting the dates,
purchasers, and consideration involved in such sales and the bases for
Registrant's claim that all such sales were exempt from the registration
provisions of Section 5 of the Securities Act.
The Shares were purchased for cash on a "delivery against payment
basis" by a corporation formed under the laws of the British Virgin Islands
and having its administrative office at P.O. Box 484, 108 Halkett Place,
St. Helier, Jersey, Channel Islands (the "Buyer") at a purchase price of
twenty-seven United States cents (US $0.27) per share (the"Per Share
Purchase Price") aggregating to a total purchase price of fifty-four
thousand ($54,000). The Buyer has represented to Registrant that such
purchase was made for investment for its own account and not with a view
to the resale or distribution thereof, and that it does not intend to
divide its participation with others or to resell or otherwise dispose
of all or any part of the Shares unless and until they are subsequently
registered under the Act, or an exemption from such registration is avail-
able.
The Buyer has entered into a subscription agreement with Registrant
(the "Subscription Agreement") which will entitle it to purchase an ad-
ditional five million, three hundred fifty-five thousand, five hundred
fifty-five (5,355,555) shares of Registrant's common stock during the
approximately six-month period ending June 23, 1997 at the same Per Share
Purchase Price. If all 5,555,555 Shares subscribed for are purchased, the
total purchase price will be approximately one million, five hundred
thousand dollars. The per share purchase price of $0.27 represented a
discount of three cents ($0.03) or ten percent (10%) from the average of
the high and low bid prices for Registrant's common stock as traded in
the over-the-counter market and reported in the NASDAQ Bulletin Board
during the month of December 1996. Registrant believes that such discount
is warranted by a number of factors including but not limited to the
length of the restricted period, the historic volatility of the market for
Registrant's common stock, and Registrant's financial condition. The
terms of the Subscription Agreement require, among other things, that pay-
ment of the full Purchase Price, must be made in good funds by the Buyer
prior to the issuance and delivery of the certificates representing any
Shares purchased. The certificates representing all shares sold under
the Subscription Agreement will bear the following legend:
The shares represented by this Certificate have not been
registered under the Securities Act of 1933, as amended
(the "Act"), but have been issued in reliance upon
Regulation S of the Act. These shares may not be sold or
otherwise transferred to a United States person (as
defined in Regulation S) or to any person with a United
States address during the restricted period following
issuance of
<PAGE> 2
these shares. Following expiration of the forty day
restricted period, any resale or transfer of these shares
to a United State person or into the United States must
be made in accordance with Regulation S, pursuant to an
effective registration statement under the Act, or
pursuant to an exemption from registration under the Act.
BASIS FOR EXEMPTION CLAIMED
This sale is claimed to have been exempt from registration under the
Securities Act pursuant to Regulation S for the following reasons:
The sale was an "offshore transaction" within the meaning of Rule 902
insofar as:
1. The offer and sale of the Shares was made outside the United
States;
2. The Buyer is an offshore corporation formed under the laws of
the British Virgin Islands and having its administrative office at P.O.
Box 484, 108 Halkett Place, St. Helier, Jersey, Channel Islands and the it
has represented itself as such to Registrant. In addition, the Buyer's
Corporate Secretary, Basel Corporate Services (Channel Islands) Limited,
and the Directors of the Buyer (the "Directors") have also represented
the same to the Registrant;
3. The Registrant did not engage in any "directed selling efforts"
to condition the United States market for the Shares in contemplation of
the sale and the Buyer has represented that, during the "restricted per-
iod" applicable to the Shares, it will not engage in any such directed
selling efforts to condition the United States market for the Shares.
4. Registrant reasonably believes that the sale of the Shares has
not been pre-arranged with a buyer in the United States, that upon Buyer's
purchase of the Shares the entire economic risk of such purchase shall be
sustained outside of the United States, and that the Shares will "come to
rest" outside of the United States. Registrant bases such belief on the
following representations which the Buyer has made in the Subscription
Agreement, on its own behalf and on behalf of each of each beneficial
owner of the Buyer (the "Beneficial Owners"), and on similar repre-
sentations certified by the Directors, that, among other things:
(a) Buyer is not organized under the laws of the Undited States and
was not formed for the sole purpose ofinvesting in securities
sold without registration under the Securities Act pursuant to
Regulation S or otherwise.
<PAGE> 3
(b) Buyer was not organized by any person or persons who are
citizens or residents of the United States and no Beneficial
Owner of Buyer is a United States citizen or resident; For
purposes of Buyer's representations, the term "Beneficial Owner"
means any natural person who, directly or indirectly through one
or more other natural persons and/or entities, has a beneficial
ownership interest in, or in any way controls, is controlled by,
or is under common control with, the Buyer.
(c) Buyer was not organized by, and neither Buyer nor any of the
Beneficial Owners is:
(i) a person who, prior to the purchase of the Shares,
has a beneficial ownership of ten percent or more
of the issued and outstanding common stock of the
Seller or in any way controls, is controlled by, or
is under common control with, the Seller; or
(ii) a person who intends upon expiration of the
Restricted Period, either directly or indirectly
through one or more intermediaries, to distribute,
arrange for, facilitate, or participate in any
other manner in the distribution of, the Shares in
the United States.
(d) At the time the buy order was originated, Buyer and each
of the Beneficial Owners of Buyer were outside the United
States;
(e) No offer to purchase the Shares was solicited or made in
the United States;
(f) The Buyer (and each of the Beneficial Owners, through the
Buyer), is purchasing the Shares for such person's own
account and neither the Buyer or any of the Beneficial
Owners intends upon the expiration of the Restricted
Period, either directly or indirectly through one or more
intermediaries, to trade, arrange for, facilitate, or
participate in any other manner in the trading of, the
Shares in the United States.
(g) All subsequent offers and sales of the Shares shall be
made in compliance with Regulation S, pursuant to the
registration of the Shares under the Securities Act, or
pursuant to an exemption from registration.
(h) Upon payment of the purchase price for the Shares, Buyer
will have assumed the entire economic risk of the
beneficial ownership of the Shares and neither the Buyer
nor any of the Beneficial Owners has directly or
indirectly entered, will not during the Restricted period
enter, and does not intend upon expiration of the
Restricted Period to enter, into any arrangements,
agreements, or understandings with any person resident in
the United States to transfer to such person all or any
part of the economic risk of beneficial ownership of the
Shares or any of the benefits or burdens of such ownership
including but not limited to any rights to
<PAGE> 4
buy or sell the Shares, short selling and other hedging
transactions such as option writing, equity swaps,
pledging the Shares as collateral, either in a margin
account or otherwise, where the lender is in the United
States and the expectation is that the collateralization
would shift the benefits and burdens of ownership to the
lender, or other types of derivative transactions which
would result in the transfer of the benefits and burdens
of the ownership of the Shares back to the United States.
(i) The Buyer does not intend, nor does any Beneficial Owner
indirectly through the Buyer intend, to purchase the
Shares in this Regulation S offering for the purpose of
evading, and such purchase will not constitute a
transaction or a part of a series of transactions that,
although in technical compliance with Regulation S, is
part of a plan or scheme to evade, the registration
provisions of the Securities Act.
(j) The funds which the Buyer is using to purchase the Shares
were not borrowed or otherwise obtained by the Buyer or
by any of the Beneficial Owners, directly or indirectly
through one or more intermediaries, from a source within
the United States of America.
(k) The Buyer has accepted the condition that before any
transfer of the Shares may be made by it, written
approval must first be obtained from Registrant's
counsel.
ITEM 7. EXHIBITS
Exhibits filed as part of this Report are as follows:
Exhibit 4. Offshore Common Stock Subscription Agreement, dated
December 20, 1996, between Registrant and Damask
Holdings Limited with the following Exhibits
appended to such Subscription Agreement:
Exhibit A Certificate of the Directors of the Buyer
Exhibit B Certificate of the Corporate Secretary of
the Buyer
Exhibit C Delivery Against Payment Instructions
<PAGE> 5
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned hereunto duly authorized.
TIREX AMERICA INC.
Dated: January 23, 1997 By /s/ Terence C.Byrne
Terence C. Byrne, President
<PAGE> 6
TIREX AMERICA INC.
OFFSHORE COMMON STOCK SUBSCRIPTION AGREEMENT
THIS OFFSHORE COMMON STOCK SUBSCRIPTION AGREEMENT is executed in re-
liance upon the transaction exemption afforded by Regulation S("Regula-
tion S") as promulgated by the United States Securities and Exchange Com-
mission (the "SEC") under the Unites States Securities Act of 1933, as
amended (the "Securities Act").
THIS AGREEMENT has been executed by the undersigned in connection
with the private placement of shares of common stock (hereinafter referred
to as the "Shares") of Tirex AmericaInc., a Delaware corporation head-
quartered at 3767 Thimens, Suite 207, Ville St. Laurent, Quebec, Canada
H4R 1W4, a corporation organized under the laws of the State of Delaware,
United States of America (hereinafter referred to as the "Seller").
The undersigned, Damask Holdings Limited, a corporation formed under
the laws of the British Virgin Islands and having its administrative of-
fice at P.O. Box 484, 108 Halkett Place, St.Helier, Jersey, Channel Is-
lands (hereinafter referred to as the "Buyer") , hereby represents and
warrants to, and agrees with the Seller as follows:
1. AGREEMENT TO SUBSCRIBE; PURCHASE PRICE AND PERIOD
1.1 OFFER TO PURCHASE
The undersigned hereby subscribes for five million, five hundred
fifty-five thousand, five hundred fifty-five (5,555,555) Shares at a
purchase price of twenty-seven United States cents (US $0.27) per share,
aggregating to approximately one million, five hundred thousand United
States Dollars (US $1,500,000), with all such Shares to be purchased
during the approximately six-month period which commences on the date
hereof and will end on June 23, 1997 (the "Purchase Period").
1.2 FORM OF PAYMENT
Buyer shall pay the purchase price by delivering good funds, in
United States Dollars, to the designated depository for closing by deli-
very of securities versus payment.
<PAGE> 7
2. REPRESENTATIONS AND WARRANTIES OF THE BUYER
2.1 OFFSHORE TRANSACTION
Buyer, on its own behalf and on behalf of each of its Beneficial
Owners hereby warrants and represents to Seller that, as of the date
hereof and as of the date of the Closing, the following statements are
and will be true and correct:
2.1.1 Buyer is not organized under the laws of the United
States and was not formed for the sole purpose of investing in securities
sold without registration under the Securities Act pursuant to Regulation
S or otherwise.
2.1.2 Buyer was not organized by any person or persons who are
citizens or residents of the United States and no Beneficial Owner of
Buyer is a United States citizen or resident; For purposes of this agree-
ment, the term "Beneficial Owner" means any natural person who, directly
or indirectly through one or more other natural persons and/or entities,
has a beneficial ownershipinterest in, or in any way controls, is con-
trolled by, or is under common control with, the Buyer.
2.1.3 Buyer was not organized by, and neither Buyer nor any of
the Beneficial Owners is:
(a) a person who, prior to the purchase of the Shares, has a
beneficial ownership of ten percent or more of the issued
and outstanding common stock of the Seller or in any way
controls, is controlled by, or is under common control
with, the Seller; or
(b) a person who intends upon expiration of the Restricted
Period, either directly or indirectly through one or more
intermediaries, to distribute, arrange for, facilitate,
or participate in any other manner in the distribution
of, the Shares in the United States.
2.1.4 At the time the buy order was originated, Buyer and
each of the Beneficial Owners of Buyer were outside the United States;
2.1.5 No offer to purchase the Shares was solicited or made
in the United States;
2.1.6 The Buyer (and each of the Beneficial Owners, through the
Buyer), is purchasing the Shares for such person's own account and neither
the Buyer or any of the Beneficial Owners intends upon the expiration of
the Restricted Period, either directly or indirectly through one or more
intermediaries, to trade, arrange for, facilitate, or participate in any
other manner in the trading of, the Shares in the United States.
<PAGE> 8
2.1.7 All subsequent offers and sales of the Shares shall be made
in compliance with Regulation S pursuant to the registration of the Shares
under the Securities Act or pursuant to an exemption from registration.
2.1.8 Upon payment of the purchase price for the Shares,
Buyer will have assumed the entire economic risk of the beneficial owner-
ship of the Shares and neither the Buyer nor any of the Beneficial Owners
has directly or indirectly entered, will not during the Restricted period
enter, and does not intend upon expiration of the Restricted Period to
enter, into any arrangements, agreements, or understandings with any person
resident in the United States to transfer to such person all or any part
of the economic risk of beneficial ownership of the Shares or any of the
benefits or burdens of such ownership including but not limited to any
rights to buy or sell the Shares, short selling and other hedging trans-
actions such as option writing, equity swaps, pledging the Shares as col-
lateral, either in a margin account or otherwise, where the lender is in
the United States and the expectation is that the collateralization would
shift the benefits and burdens of ownership to the lender, or other types
of derivative transactions which would result in the transfer of the bene-
fits and burdens of the ownership of the Shares back to the United States.
2.1.9 The Buyer does not intend, nor does any Beneficial Owner
indirectly through the Buyer intend, to purchase the Shares in this Reg-
ulation S offering for the purpose of evading, and such purchase will not
constitute a transaction or a part of a series of transactions that,
although in technical compliance with Regulation S, is part of a plan or
scheme to evade, the registratio provisions of the Securities Act.
2.1.10 The funds which the Buyer is using to purchase the Shares
were not borrowed or otherwise obtained by the Buyer or by any of the
Beneficial Owners, directly or indirectly through one or more inter-
mediaries, from a source within the United States of America.
2.1.11 The Buyer and each of the Beneficial Owners understands
that the Shares are not being registered under the Securities Act, but
are being sold pursuant to the rules governing offers and sales made out-
side the United States pursuant to Regulation S and that, in order to
determine the applicability of such exemption and the suitability of the
Buyer to acquire the Shares, the Seller is relying upon the truth and
accuracy of the representations, warranties, agreements, acknowledgments
and understandings of the Buyer, as set forth herein, of the Directors of
the Buyer as set forth in the Certificate of the Directors of the Buyer
attached as Exhibit A hereto, and of Basel Corporate Services (Channel
Islands) Limited, the Corporate Secretary of the Buyer, (the "BCSL"), as
set forth in the Certificate of the Corporate Secretary attached as Ex-
hibit B hereto.
2.2 NO GOVERNMENT RECOMMENDATION OR APPROVAL
Buyer understands that no federal or state agency of the United
States or of any other jurisdiction has passed on or made any recom-
mendation or endorsement of the Shares.
<PAGE> 9
3. REPRESENTATIONS AND WARRANTIES OF THE SELLER
Seller hereby warrants and represents to Buyer that, as of the
date hereof and as of the date of the Closing, the following statements
are and will be true and correct:
3.1 REPORTING COMPANY STATUS
Seller is a "Reporting Company, as defined in Rule 902 of Regulation
S. Seller is in full compliance with all reporting obligations under
Section 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). Seller has not registered its Common Stock pursuant to
Section 12 of the Exchange Act but may do so in the future. The Common
Stock is traded in the over-the-counter market as reported in the Elec-
tronic Bulletin Board of the National Association of Securities Dealers.
3.2 COMPANY INFORMATION
Buyer acknowledges that Seller has furnished Buyer with:
(a) copies of the Company's most recent annual report on
orm 10-KSB filed with the SEC and the Forms 10-QSB and
8-K filed thereafter (collectively, the "SEC Filings"),
and
(b) such additional financial and other data relating to
Seller and its business which Buyer considered necessary
or advisable to enable him to form a decision concerning
its investment in the Shares.
3.3 OFFSHORE TRANSACTION
3.3.1 Seller has not offered, and by means of this subscription
is not offering, the Shares which are the subject of this transaction to
any person in the United States, any identifiable groups of United States
citizens abroad, or to any United States person, as that term is defined
in Regulation S.
3.3.2 At the time the buy order for the Shares which are
the subject of this subscription agreement was originated, Seller
reasonably believed that Buyer was outside of the United States and
was not a United States person.
3.3.3 Based upon the representations made herein by Buyer,
the representations of the Directors of the Buyer set forth in
Exhibit A hereto, and the representations of the Corporate
Secretary set forth in Exhibit B hereto, Seller reasonably believes
that the transaction which is the subject of this subscription
agreement has not been pre-arranged with a buyer in the United
<PAGE> 10
States, that upon Buyer's purchase of the Shares the entire
economic risk of such purchase shall be borne outside of the United
States, and that the Shares will "come to rest" outside of
the United States.
3.4 NO DIRECTED SELLING EFFORTS
With respect to the transaction which is the subject of this
subscription agreement, Seller has not conducted any "directed
selling efforts" in the United States, as that term is defined in
Rule 902 of Regulation S, nor has Seller conducted any general
solicitation relating to the offering and sale of the Shares
to persons resident in the United States.
3.5 STATUS OF SHARES
The Shares when issued and delivered will be duly and validly
authorized and issued, fully paid and non-assessable, and will not
subject the holders thereof to personal liability by reason of
being such holders. None of the issued and outstanding shares of
Seller have preemptive rights.
3.6 SUBSCRIPTION AGREEMENT
This subscription agreement has been duly authorized, validly
executed, and delivered on behalf of the Seller and is a valid and
binding agreement in accordance with its terms.
3.7 NON-CONTRAVENTION
The execution and delivery of this Subscription Agreement,
the consummation of the issuance of the Shares, and the transactions
contemplated by the Subscription Agreement do not and will not con-
flict with or result in a breach by the Seller of any of the terms
or provisions of, or constitute a default under, the articles of
incorporation or by-laws of the Seller, or any indenture mortgage,
deed of trust, or other material agreement or instrument to which
Seller is a party or by which it or any of its properties or assets
are bound, or any existing applicable law, rule or regulation or any
applicable decree, judgment or order of any court, Federal or State re-
gulatory body, administrative agency or other governmental body having
jurisdiction over the Seller or any of its properties or assets.
<PAGE> 11
3.8 APPROVALS
Seller is not aware of any authorization, approval or consent
of any governmental body which is legally required for the issuance
and sale of the Shares in accordance with the terms of this subscrip-
tion agreement.
4. EXEMPTION
The offer and sale of the Shares are not being registered under
the Securities Act and Seller is relying on the rules governing offers
and sales made outside the United States pursuant to Regulation S.
5. CLOSING AND ISSUANCE AND DELIVERY OF SHARES
5.1 TRANSFER AGENT INSTRUCTION
Seller's transfer agent, Continental Stock Transfer & Trust
Co. will be instructed to issue one or more certificates rrepresenting
the Shares, in such names and denominations as Buyer shall instruct,
with a restrictive legend reciting "stop transfer" instructions respecting
the sale of the Shares pursuant to Regulation S and the restrictions on
transfer arising therefrom, as follows:
The shares represented by this Certificate have not been
registered under the Securities Act of 1933, as amended
(the "Act"), but have been issued in reliance upon
Regulation S of the Act. These shares may not be sold or
otherwise transferred to a United States person (as
defined in Regulation S) or to any person with a United
States address during the restricted period following
issuance of these shares. Following expiration of the
forty day restricted period, any resale or transfer of
these shares to a United State person or into the United
States must be made in accordance with Regulation S,
pursuant to an effective registration statement under the
Act, or pursuant to an exemption from registration under
the Act.
5.2 DELIVERY
The certificates representing the Shares shall be registered
and issued in the name of, and delivered to, Barclay's Private Bank
& Trust Limited of 39/41 Broad Street, St. Helier, Jersey, for the
benefit of the Buyer on a "delivery against payment" basis at such
time as the Buyer deems appropriate during the purchase period as
defined in paragraph two of the Delivery Against Payment Instructions
attached hereto as Exhibit C to this Subscription Agreement.
<PAGE> 12
5.3 CLOSING DATE
The date of the sale, issuance, and delivery of the Shares
(the "Closing Date") shall be no later than December 24, 1996, or
such other mutually agreed date at such place and time as the
parties shall mutually agree.
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL
Buyer understands that Seller's obligation to sell the Shares is
subject to the following conditions:
6.1 The receipt and acceptance by Seller of this Subscription
Agreement for all of the Shares, as evidenced by execution of this
Subscription Agreement by the president of Seller. Seller shall
not refuse to accept this Subscription Agreement for any reason
(including the fact that the market value of Seller's common stock
has increased), other than a material misrepresentation in this
Subscription Agreement which would cause the sale of the Shares to
the Buyer to be in non-compliance with Regulation S.
6.2 The receipt and acceptance by Seller of the Certificate
of Basel Corporate Services (Channel Islands) Limited as Corporate
Secretary of the Buyer with respect to:
(a) its knowledge of:
(i) the Buyer and the non-United States jurisdiction in
which it is organized;
(ii) the identities of the Directors of the Buyer, and
the non-United States jurisdiction in which the
said Signatory resides;
(iii) the identity of all of the Beneficial Owners
and the non-United States location of the
jurisdictions in which all such Beneficial
Owners reside;
(b) Confirmation that the Signatories and the Beneficial
Owners are known to it, thus enabling it to make the
representations set forth in the said Certificate.
<PAGE> 13
6.3 The receipt and acceptance by Seller of the Certificate
of the Directors of the Buyer with respect to:
(a) their knowledge of:
(i) the Buyer and the jurisdiction in which it is
organized; and
(ii) the identities of all of the Beneficial Owners and
the non-United States location of the jurisdictions
in which all such Beneficial Owners reside.
(b) Confirmation that Beneficial Owners are known to them,
thus enabling them to make the representations set forth
in the said Certificate.
6.4 Receipt of the Corporate organization documents of the Buyer.
6.5 Delivery into the Tirex America Inc. escrow account at
Barclay's Private Bank & Trust Limited, 39/41 Broad Street, St.
Helier, Jersey JE4 8PU, Channel Islands (the "Escrow Account") by
Buyer of good funds, in United States Dollars, in the amount set
forth in Paragraph 1.1 hereof, as payment in full for the purchase
of the Shares.
7. CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE
Seller understands that Buyer's obligation to purchase the
Shares is conditioned upon delivery to the Escrow Account of the
Certificates representing the Shares, as described above.
8. SURVIVAL OF EXHIBITS
Other than by reason of change of circumstances, the Exhibits
to this Agreement shall remain in full force and effect as to other
subsequent subscriptions contemplated under an agreement between
the parties.
9. GOVERNING LAW
This agreement shall be governed by and interpreted in accordance
with the laws of the State of Delaware. A facsimile transmission of
this signed agreement shall be legal and binding on all parties hereto.
<PAGE> 14
IN WITNESS WHEREOF, this Offshore Common Stock Subscription Agreement
was duly executed on the date first above written below.
DAMASK HOLDINGS LIMITED
Dated: December 20, 1996 By /s/ Jonathan Charles Brannam
Jonathan Charles Brannam, Director
DAMASK HOLDINGS LIMITED
Dated: December 20, 1996 By /s/ Donald Vernon Willis
Loic John Willis, Director
(by his alternate Donald Vernon Willis)
AGREED AND ACCEPTED:
TIREX AMERICA INC.
By /s/ Terence C. Byrne
Terence C. Byrne, President
<PAGE> 15
EXHIBIT A
To Offshore Common Stock Subscription Agreement
__________________________
CERTIFICATE OF THE DIRECTORS OF THE BUYER
__________________________
<PAGE> 16
______________
CERTIFICATE OF
THE DIRECTORS OF THE BUYER
______________
Pursuant to the provisions of Paragraph 6.3 of a certain
Offshore Common Stock Subscription Agreement, Dated December 20,
1996, (the "Subscription Agreement") for the purchase by Damask
Holdings Limited, a corporation formed under the laws of the
British Virgin Islands and having its administrative office
at P.O. Box 484, 108 Halkett Place, St. Helier, Jersey, Channel
Islands (hereinafter referred to as the "Buyer") of shares (the
"Shares") of the common stock of Tirex America Inc. (hereinafter
referred to as the "Seller") pursuant to the exemption from the
registration requirements of the United States Securities Act of
1933, as amended (the "Securities Act") provided by Regulation S
thereof ("Regulation S") I, the undersigned Jonathan Charles Brannam
and Loic John Willis hereby certify that:
1. We are the Directors of the Buyer and we have been duly
appointed and authorized by the Buyer to execute the Subscription
Agreement and to take all other actions and sign all other documents
as shall be necessary to effect and complete the transactions contem-
plated therein.
2. The representations made by the undersigned herein are
accurate and complete and nothing required to make such representations
not misleading has been omitted.
3. We have reviewed the Articles of Incorporation of the
Buyer and we are personally acquainted with each of the individuals
who are "Beneficial Owners" of the Buyer (for purposes of this
Certificate, the term "Beneficial Owner" shall have the same
meaning as in the Subscription Agreement, i.e., any natural person
who, directly or indirectly through one or more other natural
persons and/or entities, has a beneficial ownership interest
in, or in any way controls, is controlled by, or is under common
control with, the Buyer. We have personally examined the passports
of each of the said Beneficial Owners and have made such other
investigations as we deemed necessary and proper in order to
make the representations certified herein accurate and complete,
based upon which, we further certify that:
(a) The Buyer is a corporation duly formed and existing under
the laws of the British Virgin Islands and has no office
or other presence within the United States.
(b) Each of the Beneficial Owners is a natural person who is
neither a citizen nor a resident of the United States.
<PAGE> 17
(c) Buyer was not organized for the sole purpose of investing
in securities sold without registration under the
Securities Act pursuant to Regulation S or otherwise.
(d) Buyer was not organized by any person or persons who are
citizens or residents of the United States and no
Beneficial Owner" of Buyer is a United States citizen or
resident;
(e) Buyer was not organized by, and neither Buyer nor any of
the Beneficial Owners is:
(i) a person who, prior to the purchase of the
Shares, has a beneficial ownership of ten
percent or more of the issued and outstanding
common stock of the Seller or in any way
controls, is controlled by, or is under common
control with, the Seller; or
(ii) a person who intends upon expiration of the
Restricted Period, as that term is defined in
Rule 902(m) of Regulation S (the "Regulation S
Restricted Period"), either directly or
indirectly through one or more intermediaries,
to distribute, arrange for , facilitate, or
participate in any other manner in the
distribution of, the Shares in the United
States.
(f) At the time the buy order represented by the Subscription
Agreement was originated, Buyer and each of the
Beneficial Owners of Buyer were outside the United States;
(g) No offer to purchase the Shares was solicited or made in
the United States;
(h) The Buyer (and each of the Beneficial Owners, through the
Buyer), is purchasing the Shares for such person's own
account and neither the Buyer or any of the Beneficial
Owners intends upon the expiration of the Regulation S
Restricted Period, either directly or indirectly through
one or more intermediaries, to trade, arrange for,
facilitate, or participate in any other manner in the
trading of, the Shares in the United States.
(i) All subsequent offers and sales of the Shares shall be
made in compliance with Regulation S pursuant to the
registration of the Shares under the Securities Act or
pursuant to an exemption from registration.
(j) Upon payment of the purchase price for the Shares, Buyer
will have assumed the entire economic risk of the
beneficial ownership of the Shares and neither the Buyer
nor any of the Beneficial Owners has directly or
indirectly entered, will not during the Restricted period
enter, and does not intend upon expiration of the
Regulation S Restricted Period to enter, into any
arrangements, agreements, or
<PAGE> 18
understandings with any person resident in the United
States to transfer to such person all or any part of the
economic risk of beneficial ownership of the Shares or
any of the benefits or burdens of such ownership
including but not limited to any rights to buy or sell
the Shares, short selling and other hedging transactions
such as option writing, equity swaps, pledging the Shares
as collateral, either in a margin account or otherwise,
where the lender is in the United States and the
expectation is that the collateralization would shift the
benefits and burdens of ownership to the lender, or other
types of derivative transactions which would result in
the transfer of the benefits and burdens of the ownership
of the Shares back to the United States.
(k) The Buyer does not intend, nor does any Beneficial Owner
indirectly through the Buyer intend, to purchase the
Shares in this Regulation S offering for the purpose of
evading, and such purchase will not constitute a
transaction or a part of a series of transactions that,
although in technical compliance with Regulation S, is
part of a plan or scheme to evade, the registration
provisions of the Securities Act.
(l) The funds which the Buyer is using to purchase the Shares
were not borrowed or otherwise obtained by the Buyer or
by any of the Beneficial Owners, directly or indirectly
through one or more intermediaries, from a source within
the United States of America.
(m) The Buyer and each of the Beneficial Owners understands
that the Shares are not being registered under the
Securities Act, but are being sold pursuant to the rules
governing offers and sales made outside the United States
pursuant to Regulation S and that, in order to determine
the applicability of such exemption and the suitability
of the Buyer to acquire the Shares, the Seller is relying
upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments and under-
standings of the Buyer, as set forth in the Subscript-
tion Agreement, of the undersigned as set forth in this
Certificate, and of the Director of Basel Corporate Services
(Channel Islands) Limited, the Corporate Secretary of the
Buyer, as set forth in the Certificate of the Corporate
Secretary attached as Exhibit B to the Subscription Agreement.
IN WITNESS WHEREOF, each of the undersigned has executed this
certificate.
Dated: December 20, 1996 /s/ Jonathan Charles Brannam
Jonathan Charles Brannam
/s/ Donald Vernon Willis
Loic John Willis
(by his alternate Donald Vernon Willis)
<PAGE> 19
EXHIBIT B
TO OFFSHORE COMMON STOCK SUBSCRIPTION AGREEMENT
___________________________
CERTIFICATE OF THE CORPORATE SECRETARY OF THE BUYER
___________________________
<PAGE> 20
BASEL TRUST CORPORATION
__________________
CERTIFICATE OF THE CORPORATE SECRETARY
__________________
Pursuant to the provisions of Paragraph 6.2 of a certain Offshore
Common Stock Subscription Agreement, Dated December 18, 1996, (the
"Subscription Agreement") for the purchase by Damask Holdings Limited,
a corporation formed under the laws of the British Virgin Islands and
having its administrative office at P.O. Box 484, 108 Halkett Place,
St. Helier, Jersey, Channel Islands (hereinafter referred to as the
"Buyer"), of shares of the common stock of Tirex America Inc. (hereinafter
referred to as the "Seller") pursuant to the exemption from the
registration requirements of the United States Securities Act of 1933,
as amended (the "Securities Act") provided by Regulation S thereof
("Regulation S"), the undersigned corporation, Basel Corporate Services
(Channel Islands) Limited, Corporate Secretary of the Buyer, hereby
certifies that:
1. The undersigned is a corporation organized under the laws
of Jersey Channel Islands, with offices in the Channel Islands at
Basel House, St. Helier, Jersey, 1E4 S8S and that the represent-
ations made by it herein are accurate and complete and nothing
required to make such representations not misleading has been
omitted.
2. The proper officers of the undersigned have reviewed the
Articles of Association, the by-laws, the corporate minutes, and
all other relevant corporate documentation of the Buyer, have
knowledge of Messrs. Jonathan Charles Brannam and Loic John Willis,
the two Directors of the Buyer who have or will be executing the
Subscription Agreement on behalf of the Buyer (the "Directors"),
have made such other investigations as they have deemed necessary
and proper in order to make the representations certified by
the undersigned herein accurate and complete, based upon which,
the undersigned further certifies that:
(a) The Buyer is a corporation duly formed and existing under
the laws of the British Virgin Islands and to the
knowledge of the undersigned, based upon a reasonable
investigation, the Buyer has no office or other presence
within the United States.
(b) The Directors are natural persons, each of whom: (i) resides
in Sark Channel Islands, a jurisdiction outside of the United
States; (ii) is not a citizen of the United States; (iii) is a
duly appointed Director of the Buyer; and (iv) has been duly
appointed by the Buyer to sign the Subscription Agreement.
<PAGE> 21
IN WITNESS WHEREOF, Basel Corporate Services (Channel Islands)
Limited caused this Certificate to be signed on its behalf by the
undersigned thereunto duly authorized.
Basel Corporate Services (Channel
Islands) Limited
/s/ Geoffrey Pitts
Dated: December 18, 1996 By /s/ R.M.C. Blackie
(Signature of the Director of
Basel Trust Corporation Limited)
<PAGE> 22
EXHIBIT C
To Offshore Common Stock Subscription Agreement
__________________________
DELIVERY AGAINST PAYMENT INSTRUCTIONS
__________________________
<PAGE> 23
TIREX AMERICA INC.
___________________
DELIVERY AGAINST PAYMENT INSTRUCTIONS
___________________
These Delivery Against Payment Instructions are issued by
Tirex America Inc., a corporation organized in the United States
under the laws of the State of Delaware, with headquarters at 3767
Thimens, Suite 207, Vile St. Laurent, Quebec, Canada AH4R 1W4
(hereinafter referred to as the "Seller"), and accepted by Damask
Holdings Limited, a corporation formed under the laws of the British
Virgin Islands and having its administrative office at P.O. Box 484,
108 Halkett Place, St. Helier, Jersey, Channel Islands (hereinafter
referred to as the "Buyer") in connection with the Seller's sale to
Buyer of up to five million, five hundred fifty-five thousand, five
hundred fifty-five (5,555,555) shares of Seller's common stock in
reliance upon the transaction exemption afforded by Regulation S
promulgated by the United States Securities and Exchange Commission
under the United States Securities Act of 1933, as amended.
1. ESTABLISHMENT OF ESCROW ACCOUNT
Seller has or will open an Escrow Account, entitled "Tirex
America Inc. - Escrow Account" (the "Escrow Account"), at Barclay's
Private Bank & Trust Limited, 39/41 Broad Street, St. Helier,
Jersey JE4 8PU, Channel Islands (the "Escrow Agent").
2. DELIVERY AND ACCEPTANCE OF SUBSCRIPTION AGREEMENTS
At such time, and from time to time as the Buyer deems
appropriate during the Purchase Period, as that term is
defined in Paragraph 1.1 of the below referenced Subscription
Agreement, the Buyer will deliver to the Seller one or more subscription
agreements, in the form attached hereto (the "Subscription Agreement")
with all applicable attachments required under the terms thereof, for
the purchase of up to 5,555,555 shares of the common stock of the Seller
(the "Shares"), with the first tranche, consisting of not less than
200,000 Shares, to be purchased on or prior to December 24, 1996, at a per
share purchase price of $0.27, and with all subsequent tranches to be
for not less than 50,000 Shares at the same per share price of $0.27.
3. DELIVERY OF FUNDS INTO ESCROW ACCOUNT
Upon confirmation from the Seller that it accepts the
subscription, the Buyer will deposit into the Escrow Account, by
wire transfer, good funds representing the full amount of the
purchase price of the shares being purchased at that time in
tranches as set forth above in
<PAGE> 24
Paragraph 2, of these instructions (the "Purchase Price").
Wire instructions for deposit into the Escrow Account are as
follows: ___________________________________________________
____________________________________________________________
4. ISSUANCE AND DELIVERY OF CERTIFICATES
Immediately Upon confirmation from the Escrow Agent of receipt
of the Purchase Price into the Escrow Account in accordance with
Paragraph 3, above, the Seller will instruct its transfer agent to:
(i) issue certificates for the number of shares, for which receipt
of the full Purchase Price has been so confirmed, registered in the
name of Barclay's Private Bank & Trust Limited for the benefit of
the Buyer and (ii) deliver the said certificates by a recognized
courier service to the Escrow Agent for deposit into the Escrow
Account.
5. RELEASE OF FUNDS AND CERTIFICATES
Upon receipt of the certificates into the Escrow Account, the
Escrow Agent will: (i) release the Purchase Price from the Escrow
Account and wire the funds represented thereby to the Seller and
(ii) deliver the certificates to the Buyer by recognized overnight
courier, or other secure manner as is the customary practice of the
Escrow Agent, in all cases with written confirmation of receipt
required.
TIREX AMERICA INC.
By /s/ Terence C. Byrne
Terence C. Byrne, President
AGREED AND ACCEPTED:
DAMASK HOLDINGS LIMITED
By /s/ Jonathan Charles Brannam
Jonathan Charles Brannam, Director
DAMASK HOLDINGS LIMITED
By /s/ Loic John Willis
Loic John Willis, Director
<PAGE> 25
