EXHIBIT 10.5
XXXXXX.XXX, INC.
A Delaware Corporation
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May 23, 2001
[NAME OF REMAINING QINNET HOLDINGS SHAREHOLDER]
[ADDRESS]
Re: XXXXXX.XXX, INC. (the "Corporation")
- Offer to Acquire [NUMBER OF QINNET HOLDINGS SHARES HELD]
Shares of Qinnet Holdings Corp. ("Qinnet Holdings") pursuant to
Regulation S of the United States Securities Act of 1933 (the "Act")
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We write to set forth the offer of the Corporation (the "Offer") to
you to purchase the [NUMBER OF QINNET HOLDINGS SHARES HELD] shares of
the common stock of Qinnet Holdings Corp. that are registered in your
name (the "Qinnet Holdings Shares").
The Corporation is making concurrent offers to the remaining
shareholders of Qinnet Holdings owning in total an aggregate 6.4% of
the issued and outstanding shares of Qinnet Holdings (together, the
"Concurrent Offers"). The Corporation is making these Concurrent
Offers pursuant to the exemptions from the prospectus and registration
requirements provided by Regulation S of the Act and the Canadian
provincial securities statutes of British Columbia, Alberta, Manitoba
and Quebec. If all Concurrent Offers are accepted, then the
Corporation will own all of the issued and outstanding shares of
Qinnet Holdings.
This Offer is on the terms and is subject to the conditions set forth
in this letter. If this Offer is acceptable, we ask that you accept
this Offer by following the instructions in Section 5 of this letter.
This Offer is open for acceptance until 5:00 p.m. (Pacific Time) on
June 1, 2001 (the "Expiry Time"), at which time this offer will
terminate unless extended in writing. This Offer will lapse if not
accepted by you by the Expiry Time.
We are delivering to you the Corporation's Disclosure Statement dated
May 23, 2001 for your review in connection with your decision as to
whether to accept the Offer. We strongly recommend that you review
this Offer and the Disclosure Statement with your legal counsel and
your accounting and tax advisors prior to determining whether to
accept the Offer.
The Offer is on the following terms and is subject to the following
conditions:
1. Offer to Purchase
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The Corporation offers to purchase from you all of your Qinnet
Holdings Shares. Upon acceptance by you, this Offer will become a
firm and binding agreement between the Corporation and you for the
sale of your Qinnet Holdings Shares to the Corporation. The closing
of the purchase and sale of your Qinnet Holdings Shares (the
"Closing") will take place on June 8, 2001, or such earlier date as
elected by the Corporation upon receipt of your acceptance. The
Corporation's Offer is not subject to the acceptance of any other
Concurrent Offer by any other remaining shareholder of Qinnet
Holdings.
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2. Issue of Corporation Shares
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The Corporation will issue to you 1.05 shares of common stock of the
Corporation (each a "Corporation Share" and together, the "Corporation
Shares") in consideration for each Qinnet Holdings Share that you own
on closing. Accordingly, you will receive [NUMBER OF SHARES OF
XXXXXX.XXX TO BE ISSUED EQUAL TO 1.05 TIMES THE NUMBER OF QINNET
HOLDINGS SHARES HELD] shares of the Corporation's common stock on
Closing if you accept this Offer. Delivery of share certificates
representing the Corporation Shares will be conditional upon delivery
by you of any share certificates representing your Qinnet Holdings
Shares that have been delivered to you by Qinnet Holdings. The
Corporation will use its best efforts to deliver these share
certificates to you by no later than June 22, 2001, subject to
delivery by you to the Corporation of the share certificates
representing your Qinnet Holdings Shares.
3. Regulation S Agreements
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You must not be a "U.S. Person" in order for you to accept this Offer
as the Corporation Shares are being offered to you pursuant to
Regulation S of the Act. A "U.S. Person" is defined by Regulation S
of the Act to be any person who is:
(1) any natural person resident in the United States;
(2) any partnership or corporation organized or incorporated under the
laws of the United States;
(3) any estate of which any executor or administrator is a U.S. person;
(4) any trust of which any trustee is a U.S. person;
(5) any agency or branch of a foreign entity located in the United States;
(6) any non-discretionary account or similar account (other than an estate
or trust) held by a dealer or other fiduciary organized, incorporate,
or (if an individual) resident in the United States; and
(7) any partnership or corporation if:
(1) organized or incorporated under the laws of any foreign
jurisdiction; and
(2) formed by a U.S. person principally for the purpose of investing
in securities not registered under the Act, unless it is organized
or incorporated, and owned, by accredited investors [as defined in
Section 230.501(a) of the Act] who are not natural persons, estates
or trusts.
If you are a U.S Person, as defined above, then you are not eligible
to accept this Offer and any acceptance by you will not obligate the
Corporation to purchase your Qinnet Holdings Shares.
By execution of the Offer, you will also agree with the Corporation as
follows as a condition of the Corporation issuing the Corporation
Shares to you:
(1) You will resell the Corporation Shares 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
pursuant to the Act;
(2) You will not resell the Corporation Shares prior to the distribution
compliance period prescribed by Regulation S of the Act;
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(3) The Corporation will refuse to register any transfer of the
Corporation Shares not made 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;
(4) You will not engage in hedging transactions with respect to the
Corporation Shares unless in compliance with the Act.
You will acknowledge and agree by acceptance of this Offer that all
certificates representing the Corporation Shares will be endorsed with
the following legend in accordance with Regulation S of the Act:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
(THE "ACT"), AND HAVE BEEN ISSUED IN RELIANCE UPON AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
ACT PROVIDED BY REGULATION S PROMULGATED UNDER THE
ACT. SUCH SECURITIES MAY NOT BE REOFFERED FOR SALE
OR RESOLD OR OTHERWISE TRANSFERRED EXCEPT IN
ACCORDANCE WITH THE PROVISIONS OF REGULATION S,
PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE ACT,
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM
REGISTRATION UNDER THE ACT. HEDGING TRANSACTIONS
INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS
IN COMPLIANCE WITH THE ACT"
THE SECURITIES MAY BE DISTRIBUTED PURSUANT TO EXEMPTIONS FROM THE
PROSPECTUS REQUIREMENTS OF THE SECURITIES ACT (BRITISH COLUMBIA),
SECURITIES ACT (ALBERTA), THE SECURITIES ACT (MANITOBA) OR THE
SECURITIES ACT (QUEBEC). THE COMPANY IS NOT AND MAY NEVER BE A
REPORTING ISSUER IN THE PROVINCE OF BRITISH COLUMBIA, THE PROVINCE OF
ALBERTA, THE PROVINCE OF MANITOBA OR THE PROVINCE OF QUEBEC. THE
COMMON SHARES OF THE COMPANY MAY NOT BE RESOLD IN THE PROVINCE OF
BRITISH COLUMBIA, THE PROVINCE OF ALBERTA, THE PROVINCE OF MANITOBA OR
THE PROVINCE OF QUEBEC, EXCEPT UNDER A PROSPECTUS OR STATUTORY
EXEMPTION AVAILABLE ONLY IN SPECIFIC AND LIMITED CIRCUMSTANCES UNLESS
AND UNTIL THE ISSUER BECOMES A REPORTING ISSUER IN THE PROVINCE OF
BRITISH COLUMBIA, THE PROVINCE OF ALBERTA, THE PROVINCE OF MANITOBA OR
THE PROVINCE OF QUEBEC, AS APPLICABLE, AND SUCH COMMON SHARES ARE HELD
THEREAFTER FOR THE APPLICABLE HOLD PERIOD.
4. Additional Representations and Warranties
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You will make the following representations and warranties to the
Corporation by acceptance of this Offer that will be relied upon by
the Corporation in purchasing your Qinnet Holdings Shares:
(1) The Qinnet Holdings Shares are owned by you as the legal and
beneficial owner with a good and marketable title thereto, free and
clear of all mortgages, liens, charges, security interests, adverse
claims, pledges, encumbrances and demands whatsoever;
(2) You have all necessary power and authority to deal with, transfer and
sell Qinnet Holdings Shares in accordance with this Agreement;
(3) No person, firm or corporation has any agreement or option or any right
or privilege (whether by law, pre-emptive or contractual) capable of
becoming an agreement or option for the purchase from you of any of
Qinnet Holdings Shares held by you;
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(4) The entering into of this agreement and the consummation of the
transactions contemplated hereby will not result in the violation of
any of the terms and provisions of any agreement, written or oral,
to which you may be a party;
(5) This agreement has been duly authorized, validly executed and
delivered by you;
(6) You have had full opportunity to review the Corporation's Disclosure
Statement, the Corporation's filings with the United States Securities
and Exchange Commission ("SEC"), including those incorporated by
reference into the Disclosure Statement and additional information
regarding the business and financial condition of the Corporation
with your legal, tax and financial advisors prior to acceptance
of the Offer;
(7) You hereby acknowledge that this Offer and the offering of Corporation
Shares has not been reviewed by the SEC or the securities commission of
British Columbia, Alberta, Manitoba or Quebec and that the Corporation
Shares will be issued by the Corporation pursuant to an exemption from
registration provided by Regulation S pursuant to the United States
Securities Act and the Canadian provincial securities statutes of
British Columbia, Alberta, Manitoba and Quebec;
(8) You are not aware of any advertisement of the Corporation Shares;
(9) You are acquiring the Corporation Shares subscribed to hereunder
as principal for your own benefit and as an investment for your
own account, not as a nominee or agent, and not with a view toward
the resale or distribution of any part thereof, and you have no
present intention of selling, granting any participation in, or
otherwise distributing the same;
(10) You do not have any contract, undertaking, agreement or arrangement
with any person to sell, transfer or grant participation to such
person, or to any third person, with respect to any acquisition of the
Corporation Shares;
(11) You have full power and authority to accept this Offer which, when
accepted, will constitute a valid and legally binding obligation,
enforceable in accordance with its terms;
(12) You can bear the economic risk of an investment in the Corporation
Shares;
(13) You have satisfied yourself as to the full observance of the laws of
your jurisdiction in connection with the Offer, including (i) the legal
requirements within his/her jurisdiction for the issuance of the
Corporation Shares to you, (ii) any foreign exchange restrictions
applicable to such purchase, (iii) any governmental or other consents
that may need to be obtained, and (iv) the income tax and other tax
consequences, if any, that may be relevant to the acceptance of this
Offer by you;
(14) You have such knowledge and experience in finance, securities,
investments, including investment in non-listed and non registered
securities, and other business matters so as to be able to protect its
interests in connection with this transaction;
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5. Acceptance and Closing
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If you wish to accept this Offer, then you must execute this Offer
where indicated below and deliver the executed Offer together with any
share certificates representing your Qinnet Holdings Shares to us at
our address as follow:
XXXXXX.XXX, INC.
Attention: Mr. Xxxx Xxxxxxxx, Secretary
Suite 206, 0000 Xxx Xxxxxxxx Xxxx
Xxxxxxxxx XX 00000
Facsimile: (000) 000-0000
Yours truly,
XXXXXX.XXX, INC.
by its authorized signatory:
/s/ "Xxxx Xxxxxxxx"
Per:
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XXXX XXXXXXXX
Secretary and Treasurer
This undersigned shareholder of Qinnet Holdings Corp. hereby accepts
the Offer of Xxxxxx.xxx, Inc. and hereby sells, assigns and transfers
to Xxxxxx.xxx, Inc. a total of [NUMBER OF QINNET HOLDINGS SHARES
HELD] of the common stock of Qinnet Holdings Corp. free and clear of
all liens, charges and encumbrances in consideration for the issue of
[NUMBER OF SHARES OF XXXXXX.XXX TO BE ISSUED EQUAL TO 1.05 TIMES THE
NUMBER OF QINNET HOLDINGS SHARES HELD] of the common stock of
Xxxxxx.xxx, Inc. on the terms and subject to the conditions of the
Offer. The undersigned shareholder hereby irrevocably constitutes
and appoints Xxxx Xxxxxxxx, the Secretary and Treasurer of the
Corporation, as the attorney of the shareholder to transfer all
shares of Qinnet Holdings in the name of the shareholder, with full
power of substitution in the premises. The undersigned shareholder
agrees that a faxed copy of the shareholder's signature may be relied
upon for acceptance for Xxxxxx.xxx, Inc. and will be effective to
bind the shareholder.
Date of Acceptance:
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Signature of Qinnet Holdings Shareholder:
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Name of Qinnet Holdings Shareholder:
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Number of Shares of Qinnet Holdings Held:
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