STOCK PURCHASE AGREEMENT
(REGULATION S)
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made as of April 19,
2005, by and between the purchaser named on the signature page hereto
("Purchaser") and the seller named on the signature page hereto ("Seller").
RECITALS
WHEREAS, Seller desires to sell, and Purchaser desires to purchase from
Seller, the number of shares of common stock, par value $0.001 per share (the
"Common Stock"), of Advanced Medical Institute Inc., a Nevada corporation (the
"Company"), set forth on the signature page hereto (the "Shares") for the
consideration and on the terms set forth in this Agreement.
NOW THEREFORE, in consideration of the terms and conditions contained
in this Agreement, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties, intending to be
legally bound hereby, agree as follows:
ARTICLE 1.
SALE AND TRANSFER OF SHARES; CLOSING
SECTION 1.1 The Shares. Subject to the terms and conditions hereof,
Seller agrees to sell to Purchaser, and Purchaser agrees to purchase from
Seller, the Shares at the per share price set forth on the signature page hereto
(the "Purchase Price").
SECTION 1.2 Closing. The purchase and sale (the "Closing") provided for
in this Agreement will take place on the date indicated on the signature page
hereto, or at such other time and place as the parties may mutually agree (the
"Closing Date").
SECTION 1.3 Closing Obligations. At the Closing, Seller will deliver to
Purchaser certificates representing the Shares, duly endorsed or accompanied by
duly executed stock powers, and Purchaser shall pay the Purchase Price for such
Shares to Seller.
ARTICLE 2.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser that the following
statements are true, correct and complete as of the date hereof: SECTION 2.1
Legal Capacity and Authority. Seller has the right, power, authority and
capacity to execute and deliver this Agreement and to sell the Shares as
contemplated hereunder.
SECTION 2.2 Ownership of Shares. Seller owns, of record and
beneficially, and has good, valid and indefeasible title to and the right to
transfer to Purchaser, pursuant to his Agreement, the Shares free and clear of
any and all liens, claims and encumbrances.
SECTION 2.3 Authorization. All individual action on the part of Seller
necessary for the authorization, execution, delivery and performance of this
Agreement by Seller, and the performance of all of Seller's obligations
hereunder, has been taken. This Agreement is a valid, legal and binding
obligation of Seller, enforceable according to its terms, except as may be
limited by applicable bankruptcy, insolvency, reorganization or other similar
laws of general application relating to or affecting the enforcement of creditor
rights, laws and judicial decisions regarding indemnification for violations of
federal securities laws, and the availability of specific performance or other
equitable remedies.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller that the following
statements are true, correct and complete as of the date hereof:
SECTION 3.1 Legal Capacity and Authority. Purchaser has the right,
power, authority and capacity to execute and deliver this Agreement and to
purchase the Shares as contemplated hereunder.
SECTION 3.2 Authorization. All individual action on the part of
Purchaser necessary for the authorization, execution, delivery and performance
of this Agreement by Purchaser, and the performance of all of Purchaser's
obligations hereunder, has been taken. This Agreement is a valid, legal and
binding obligation of Purchaser, enforceable according to its terms, except as
may be limited by applicable bankruptcy, insolvency, reorganization or other
similar laws of general application relating to or affecting the enforcement of
creditor rights, laws and judicial decisions regarding indemnification for
violations of federal securities laws, and the availability of specific
performance or other equitable remedies.
SECTION 3.3 Investor Representations.
(a) Not a "U.S. Person". Purchaser is not a "U.S. Person" as
defined in Rule 902 of Regulation S ("Regulation S") promulgated by the
Securities and Exchange Commission under the Securities Act of 1933, as amended
(the "Securities Act"), was not organized under the laws of any United States
jurisdiction, and was not formed for the purpose of investing in securities not
registered under the Securities Act. At the time the purchase order for this
transaction was originated, Purchaser was outside the United States.
(b) Intent. Purchaser is purchasing the Shares solely for
investment purposes, for Purchaser's own account and not for the account or
benefit of any U.S. Person, and not with a view towards the distribution or
dissemination thereof, and Purchaser has no present arrangement to sell the
Shares to or through any person or entity. Purchaser understands that the Shares
must be held indefinitely unless such Shares are resold in accordance with the
provisions of Regulation S, are subsequently registered under the Securities Act
or an exemption from registration is available.
(c) Restrictions on Transfer. Purchaser understands that the
Shares are being offered in a transaction not involving a public offering in the
United States within the meaning of the Securities Act. The Shares have not been
2
and will not be registered under the Securities Act, and, if in the future
Purchaser decides to offer, resell, pledge or otherwise transfer the Shares,
such Shares may be offered, resold, pledged or otherwise transferred only (A)
pursuant to an effective registration statement filed under the Securities Act,
(B) to a non-U.S. Person in an offshore transaction in accordance with Rule 903
or Rule 904 of Regulation S of the Securities Act, (C) pursuant to the resale
limitations set forth in Rule 905 of Regulation S, (D) pursuant to an exemption
from registration under the Securities Act provided by Rule 144 thereunder (if
available) or (E) pursuant to any other exemption from the registration
requirements of the Securities Act, and in each case in accordance with any
applicable securities laws of any state of the United States or any other
jurisdiction. Purchaser acknowledges, agrees and covenants that it will not
engage in hedging transactions with regard to Purchaser's shares of Common Stock
prior to the expiration of the distribution compliance period specified in Rule
903 of Regulation S promulgated under the Securities Act, unless in compliance
with the Securities Act. Purchaser agrees that if any transfer of its Shares or
any interest therein is proposed to be made, as a condition precedent to any
such transfer, the transferor may be required to deliver to the Company an
opinion of counsel satisfactory to the Company. Absent registration or another
exemption from registration, Purchaser agrees that it will not resell the
securities constituting Purchaser's shares of Common Stock to U.S. Persons or
within the United States.
(d) Accredited Investor. Purchaser is familiar with the term
"accredited investor" as defined in Regulation D promulgated under the
Securities Act and is an "accredited investor" within the meaning of such term
in Regulation D.
(e) Reliance on Representations and Warranties. Purchaser
understands that the Shares are being offered and sold to Purchaser in reliance
on specific provisions of United States federal and state securities laws and
that Seller is relying upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments and understandings of Purchaser set
forth in this Agreement in order to determine the applicability of such
provisions.
(f) No Advertisements. The undersigned is not subscribing for
Shares as a result of or subsequent to any advertisement, article, notice or
other communication published in any newspaper, magazine, or similar media or
broadcast over television or radio, or presented at any seminar or meeting.
ARTICLE 4.
LEGEND.
(a) Legend. The Shares bear the following legend and
appropriate "stop transfer" instructions:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THESE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED
OR OTHERWISE TRANSFERRED EXCEPT (A) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT FILED UNDER THE SECURITIES ACT, (B) TO
A NON-U.S. PERSON IN AN OFFSHORE TRANSACTION IN ACCORDANCE
WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES
ACT, (C) PURSUANT TO THE RESALE LIMITATIONS SET FORTH IN RULE
905 OF REGULATIONS S UNDER THE SECURITIES ACT, (D) PURSUANT TO
3
AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (E) PURSUANT TO ANY OTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
JURISDICTION. HEDGING TRANSACTIONS INVOLVING THESE SECURITIES
MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES
ACT.
(b) Purchaser's Compliance. Nothing in this Article 4 shall
affect in any way Purchaser's obligations and agreement to comply with all
applicable securities laws upon resale of the Shares.
ARTICLE 5.
MISCELLANEOUS
SECTION 5.1 Modification of Agreement; Sale of Interest. This Agreement
may not be modified, altered or amended, except by an agreement in writing
signed by Purchaser and Sellers. Without the prior written consent of the other
party, which consent shall not be unreasonably withheld, no party hereto may
sell, assign or transfer this Agreement, any rights, titles, interests,
remedies, powers, obligations and/or duties hereunder, including by operation of
law.
SECTION 5.2 Expenses. Each party shall bear its own expenses in
connection with the transactions contemplated by this Agreement.
SECTION 5.3 Parties. This Agreement shall be binding upon and inure to
the benefit of the successors and permitted assigns of Seller and Purchaser.
SECTION 5.4 Entire Agreement. This Agreement and any other documents
delivered pursuant hereto constitute the full and entire understanding and
agreement between the parties with regard to the subject matter hereof, and no
party shall be liable or bound to any other party in any manner by any
warranties, representations or covenants except as specifically set forth in
this Agreement. Except as expressly provided in this Agreement, neither this
Agreement nor any term hereof may be amended, waived, discharged or terminated
other than by a written instrument signed by the party against whom enforcement
of any such amendment, waiver, discharge, or termination is sought.
SECTION 5.5 Notices. Unless otherwise specified herein, all such
notices, requests, consents, approvals and demands given or made in connection
with the terms and provisions of this Agreement shall be deemed to have been
given or made when personally delivered, or, if mailed, upon the earlier of
actual receipt by the addressee or five days after sent by registered or
certified mail, postage prepaid, or, in the case of overnight courier service
(which may be utilized hereunder), when delivered by the overnight courier
company to the respective address set forth on the signature page hereto, or, in
4
the case of facsimile transmission (which may be utilized hereunder), after
receipt by the respective addressee in each case to the appropriate addresses
and telecopier numbers set forth on the signature page hereto or to such other
addresses and telecopier numbers as a party may designate by notice to the other
parties.
SECTION 5.6 Governing Law. This agreement shall be governed by and
construed under the laws of the State of New York without giving effect to any
choice or conflict of law provision or rule that would cause the application of
the laws of any jurisdiction other than the State of New York.
SECTION 5.7 Counterparts. This Agreement may be executed in a number of
identical counterparts, each of which, for all purposes, is to be deemed an
original, and all of which collectively constitute one agreement, but in making
proof of this Agreement, it shall not be necessary to produce or account for
more than one such counterpart. A facsimile or photocopy of an executed
counterpart of this Agreement shall be sufficient to bind the party or parties
whose signature(s) appear thereon.
SECTION 5.8 Further Assurances. Each party will execute and deliver
such further agreements, documents and instruments and take such further action
as may be reasonably requested by the other party to carry out the provisions
and purposes of this Agreement.
SECTION 5.9 Termination; Survival. The provisions of this Agreement,
including without limitation the representations, warranties and covenants of
the parties, shall survive the Closing.
5
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
as of the day and year first written above.
PURCHASER: SELLER:
HONORY TRADING LIMITED Dragon Enterprises Ltd.
------------------------------- ---------------------------
(print name legibly) (print name legibly)
By: By:
--------------------------- -----------------------
Name: Name:
Title: Title:
Aggregate shares of Common Stock being sold to
Purchaser (the "Shares"): 590,377
--------------
Identification number(s) of stock
certificate(s) representing the Shares being
sold to Purchaser: 1174
--------------
Per share consideration for the Shares being
sold to Purchaser (the "Purchase Price"): US$0.50
--------------
Aggregate consideration for the Shares being
sold to Purchaser: US$295,188.50
--------------
The Closing Date: April 19, 2005
--------------
6
