THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE BECAUSE THEY ARE
BELIEVED TO BE EXEMPT FROM REGISTRATION UNDER REGULATION D AND/OR REGULATION S
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THE
FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY
OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THIS
SUBSCRIPTION AGREEMENT SHALL NOT CONSTITUTE AN OFFER TO SELL NOR A SOLICITATION
OF AN OFFER TO BUY THE SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION WOULD BE UNLAWFUL.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND
MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT, AN
APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE
FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. ALL OFFERS
AND SALES OF THE HEREIN-DESCRIBED SECURITIES BY NON-U.S. PERSONS BEFORE THE
EXPIRATION OF A PERIOD COMMENCING ON THE DATE OF THE CLOSING OF THIS OFFERING
AND ENDING ONE YEAR THEREAFTER SHALL ONLY BE MADE IN COMPLIANCE WITH REGULATION
S, PURSUANT TO REGISTRATION UNDER THE ACT, OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION, AND ALL OFFERS AND SALES AFTER THE EXPIRATION OF THE ONE-YEAR
PERIOD SHALL BE MADE ONLY PURSUANT TO REGISTRATION OR AN EXEMPTION FROM
REGISTRATION. HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE
CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT.
OFFSHORE STOCK PURCHASE AGREEMENT
---------------------------------
This Offshore Stock Purchase Agreement (the "Agreement") is entered into
this 4th day of December, 2002 (the "Effective Date"), by and between X-XXX.XXX,
INC., a Colorado corporation ("H-NET") and FIRST CHARTERED CAPITAL CORPORATION
INC. ("FIRST CAPITAL"), a British Virgin Islands corporation.
WHEREAS, FIRST CAPITAL desires to purchase up to Five Million (5,000,000) shares
------------------------------
of restricted common stock of H-NET (the "Shares"); and
WHEREAS, H-NET agrees to deliver the Shares for the Consideration (as defined
below) to be paid by FIRST CAPITAL, subject to the terms and conditions set
forth below.
NOW, THEREFORE, for and in consideration of the mutual promises herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1. Purchase and Sale. On the basis of the representations and warranties
------------------
herein contained, subject to the terms and conditions set forth herein, FIRST
CAPITAL hereby agrees to purchase the Shares at a purchase price of One dollar
(US$1.00) per share, the specific number of shares purchased to be reflected in
written buy orders sent to H-NET or its designee ("Consideration"), and H-NET
hereby agrees to sell the Shares to FIRST CAPITAL for such Consideration.
2. Closing. The closing of the purchase and sale contemplated by this
-------
Agreement (the "Closing") shall occur upon the transfer of the Consideration to
the VALIDATE CORPORATION ESCROW ACCOUNT FOR EXCLUSIVE BENEFIT OF X-XXX.XXX, INC.
at Brighton Bank in Salt Lake City, Utah (the "Escrow Account"). H-NET shall
deliver the Shares to FIRST CAPITAL within 14 days of receiving full payment
under this Agreement.
A. Transactions and Document Exchange at Closing. Prior to
or at the Closing, the following transactions shall occur and documents shall be
exchanged, all of which shall be deemed to occur simultaneously: (1) by FIRST
--------
CAPITAL: FIRST CAPITAL shall deliver, or cause to be deliver, to H-NET: (a) the
-----
balance of the Consideration (if any); and (b) such other documents,
instruments, and/or certificates, if any, as are required to be delivered
pursuant to the provisions of this Agreement, or which are reasonably determined
by the parties to be required to effectuate the transactions contemplated in
this Agreement, or as otherwise may be reasonably requested by H-NET in
furtherance of the intent of this Agreement; (2) by H-NET: H-NET shall deliver ,
--------
or cause the following to be delivered, to FIRST CAPITAL: (a) the Shares; and
(b) such other documents, instruments, and/or certificates, if any, as are
required to be delivered pursuant to the provisions of this Agreement, or which
are reasonably determined by the parties to be required to effectuate the
transactions contemplated in this Agreement, or as otherwise may be reasonably
requested by FIRST CAPITAL in furtherance of the intent of this Agreement.
B. Post -Closing Documents. From time to time after the
Closing, upon the reasonable request of any party, the party to whom the request
is made shall deliver such other and further documents, instruments, and/or
certificates as may be necessary to more fully vest in the requesting party the
Consideration or the Shares as provided for in this Agreement, or to enable the
requesting party to obtain the rights and benefits contemplated by this
Agreement.
C. Payment. FIRST CAPITAL will ensure that all payments
are forwarded to the Escrow Account. H-NET will supply FIRST CAPITAL with the
Escrow Account's banking co-ordinates within 7 days of the authorization of this
agreement.
3. Private Offering. FIRST CAPITAL and H-NET both understand and agree that
----------------
the purchase and sale of securities contemplated herein constitutes a private,
arms-length transaction between a willing seller and willing buyer without the
use or reliance upon a broker, distributor or securities underwriter.
A. Purchase for Investment. Neither FIRST CAPITAL nor H-NET are
underwriters of, or dealers in, the securities to be sold and exchanged
hereunder.
B. Investment Risk. Because of H-NET's financial position and other
factors as disclosed in H- NET's business plan (which FIRST CAPITAL represents
it has received and reviewed), the transaction contemplated by this Agreement
may involve a high degree of financial risk, including the risk that one or both
parties may lose its entire investment, and both parties hereby agree that they
have each undertaken an independent evaluation of the risks associated with the
Shares, and both parties understand those risks and are willing to accept the
risk that they may be required to bear the financial risks of this investment
for an indefinite period of time.
C. Access to Information. FIRST CAPITAL and H-NET and their
advisors have been afforded the opportunity to discuss the transaction with
legal and accounting professionals and to examine and evaluate the financial
impact of the sale and exchange contemplated herein.
FIRST CAPITAL has received and reviewed H-NET's most recent Form
10-KSB as amended, and quarterly reports on Form 10-QSB for the most recent two
quarters, all as filed with the SEC. FIRST CAPITAL acknowledges that it has
been furnished with the information required to conform with the provisions of
subparagraph (a)(5) of Rule 15c2-11 of the Securities and Exchange Commission.
4. Representations and Warranties of FIRST CAPITAL: FIRST CAPITAL hereby
------------------------------------------------
covenants and
represents and warrants to H-NET that:
A. Organization. FIRST CAPITAL is a corporation validly
existing and in good standing under the laws of Laos and the British Virgin
Islands, with the power and authority to carry on its business as now being
conducted. The execution and delivery of this Agreement and the consummation of
the transaction contemplated in this Agreement have been, or will be prior to
Closing, duly authorized by all requisite corporate action on the part of FIRST
CAPITAL. This Agreement has been duly executed and delivered by FIRST CAPITAL
and constitutes a binding and enforceable obligation of FIRST CAPITAL.
B. Third Party Consent. No authorization, consent, or
approval of, or registration or filing with, any governmental authority or any
other person is required to be obtained or made by FIRST CAPITAL in connection
with the execution, delivery, or performance of this Agreement or the transfer
of the Shares, or if any such is required, FIRST CAPITAL will have or will
obtain the same prior to Closing.
C. Litigation. FIRST CAPITAL is not a defendant against
whom a claim has been made or a judgment rendered in any litigation or
proceedings before any local, state, or federal government, including but not
limited to the United States, or any department, board, body, or agency thereof.
D. Authority. This Agreement has been duly executed by
FIRST CAPITAL, and the execution and performance of this Agreement will not
violate, or result in a breach of, or constitute a default in, any agreement,
instrument, judgment, order, or decree to which FIRST CAPITAL is a party or to
which the Consideration is subject.
E. Offshore Transaction. FIRST CAPITAL represents and warrants to H-NET
as follows: (i) FIRST CAPITAL is not a "U.S. person" as that term is defined in
Rule 902 of Regulation S; (ii) FIRST CAPITAL is not, and on the Closing date
will not be, an affiliate of H-NET; (iii) at the execution of this Agreement, as
well as the time this transaction is or was due, FIRST CAPITAL was outside the
United States, and no offer to purchase the Shares was made in the United
States; (iv) FIRST CAPITAL agrees that all offers and sales of the Shares shall
not be made to U.S. persons unless the Shares are registered or a valid
exemption from registration can be relied on under applicable U.S. state and
federal securities laws; (v) FIRST CAPITAL is not a distributor or dealer; (vi)
the transactions contemplated hereby have not been and will not be made on
behalf of any U.S. person or pre-arranged by FIRST CAPITAL with a purchaser
located in the United States or a purchaser which is a U.S. person, and such
transactions are not and will not be part of a plan or scheme to evade the
registration provisions of the Act; (vii)all offering documents received by
FIRST CAPITAL include statements to the effect that the Shares have not been
registered under the Securities Act of 1933 and may not be offered or sold in
the United States or to U.S. Persons (other than distributors as defined in
Regulation S) during the Restricted Period unless the Shares are registered
under the Securities Act of 1933 or an exemption from registration is available.
The foregoing representations and warranties are true and accurate as of the
date hereof, shall be true and accurate as of the date of the acceptance by
H-NET of FIRST CAPITAL's purchase, and shall survive thereafter. If FIRST
CAPITAL has knowledge, prior to the acceptance of this Offshore Stock Purchase
Agreement by H-NET, that any such representations and warranties shall not be
true and accurate in any respect, FIRST CAPITAL prior to such acceptance, will
give written notice of such fact to H-NET specifying which representations and
warranties are not true and accurate and the reasons therefore.
FIRST CAPITAL agrees to fully indemnify, defend and hold harmless H-NET, its
officers, directors, employees, agents and attorneys from and against any and
all losses, claims, damages, liabilities and expenses, including reasonable
attorney's fees and expenses, which may result from a breach of FIRST CAPITAL's
representations, warranties and agreements contained herein.
F. Accredited Investor. FIRST CAPITAL is an accredited
investor as that term is defined in Rule 501(a) of Regulation D promulgated
under the Act. FIRST CAPITAL further represents and warrants that the
information as disclosed in "Exhibit A" attached hereto is true and correct.
G. Beneficial Owner. FIRST CAPITAL is purchasing stock for
its own account or for the account of beneficiaries for whom FIRST CAPITAL has
full investment discretion with respect to stock and whom FIRST CAPITAL has full
authority to bind, so that each such beneficiary is bound hereby as if such
beneficiary were a direct signatory hereunder, and all representations,
warranties and agreements herein were made directly by such beneficiary.
H. Directed Selling Efforts. FIRST CAPITAL will not
engage in any activity for the purpose of, or that could reasonably be expected
to have the effect of, conditioning the market in the United States for any of
the Shares sold hereunder. To the best of its knowledge, neither FIRST CAPITAL
nor any person acting for FIRST CAPITAL has conducted any "directed selling
efforts" as that term is defined in Rule 902 of Regulation S.
I. Independent Investigation; Access. FIRST CAPITAL, in
electing to purchase the Shares herein, has relied solely upon independent
investigation made by it and its representatives. FIRST CAPITAL has been given
no oral or written representation or warranty from H-NET other than as set forth
in this Agreement. FIRST CAPITAL and its representatives, if any, have, prior
to any sale to it, been given access and the opportunity to examine all material
books and records of H-NET, all material contracts and documents relating to
H-NET and this offering and an opportunity to ask questions of, and to receive
answers from, H-NET or any officer of H-NET acting on its behalf concerning
H-NET and the terms and conditions of this offering. FIRST CAPITAL and its
advisors, if any, have been furnished with access to all publicly available
materials relating to the business, finances and operations of H-NET and
materials relating to the offer and sale of the Shares which have been
requested. FIRST CAPITAL and its advisors, if any, have received complete and
satisfactory answers to any such inquiries.
J. No Government Recommendation or Approval. FIRST
CAPITAL understands that no United States federal or state agency, or similar
agency of any other country, has passed upon or made any recommendation or
endorsement of the Shares, or this transaction.
K. No Formation or Membership in "Group." FIRST CAPITAL
is not part of a "group" as that term is defined under the Act. FIRST CAPITAL
is not, and does not intend to become, included with two or more persons acting
as a partnership, syndicate, or other group for the purpose of acquiring,
holding or disposing of securities of the Company.
L. Hedging Transactions. FIRST CAPITAL hereby agrees not
to engage in any hedging transactions involving the securities described herein
unless in compliance with the Act and Regulation S promulgated thereunder.
5. Conditions Precedent to H-NET's Closing. All obligations of H-NET under
---------------------------------------
his Agreement, and as an inducement to H-NET to enter into this Agreement,
are subject to FIRST CAPITAL's covenants and agreements to each of the
following:
A. Acceptance of Documents. All instruments and documents
delivered to H-NET pursuant to this Agreement or reasonably requested by H-NET
to verify the representations and warranties of FIRST CAPITAL herein, shall be
satisfactory to H-NET and its legal counsel.
B. Representations and Warranties. The representations
and warranties by FIRST CAPITAL set forth in this Agreement shall be true and
correct at and as of the Closing date, with the same force and effect as though
made at and as of the date hereof, except for changes permitted or contemplated
by this Agreement.
C. No Breach or Default. FIRST CAPITAL shall have
performed and complied with all covenants, agreements, and conditions required
by this Agreement to be performed or complied with by it prior to or at the
Closing.
6. Termination. This Agreement may be terminated at any time prior to the
-----------
date of Closing by either party if (a) there shall be any actual or threatened
action or proceeding by or before any court or any other governmental body which
shall seek to restrain, prohibit, or invalidate the transaction contemplated by
this Agreement, and which in the judgment of such party giving notice to
terminate and based upon the advice of legal counsel makes it inadvisable to
proceed with the transaction contemplated by this Agreement, or (b) if this
Agreement has not been approved and properly executed by the parties by December
20, 2001.
7. Restrictive Legend. FIRST CAPITAL agrees that the Shares shall bear a
------------------
restrictive legend to the effect that transfer is prohibited except in
accordance with the provisions of Regulation S, pursuant to registration under
the Act, or pursuant to an available exemption from registration, and that
hedging transactions involving those securities may not be conducted unless in
compliance with the Act.
8. H-NET's Obligation to Refuse Transfer. Pursuant to Regulation S
-------------------------------------
promulgated under the Act, H-NET hereby agrees to refuse to register any
transfer of the Shares not made in accordance with the provisions of Regulation
S, pursuant to registration under the Act, or pursuant to an available exemption
from registration.
9. Miscellaneous.
-------------
A. Authority. The officers of FIRST CAPITAL and H-NET executing this
Agreement are duly authorized to do so, and each party has taken all action
required for valid execution.
B. Notices. Any notice under this Agreement shall be deemed to have been
sufficiently given if sent by registered or certified mail, postage prepaid,
or by express mail service substantially equivalent to Federal Express,
addressed as follows
To FIRST CAPITAL: First Chartered Capital Corporation, Inc.
P.O. Box 8296
Vientiane, Laos, PDR
Telephone: 000 000 000 0000
Facsimile: 011 856 212 17368
To H-NET: X-xxx.xxx, Inc
000-000 Xxxxx Xxxxxx
Xxxxxxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
C. Entire Agreement. This Agreement constitutes the entire agreement among
the parties hereto with respect to the subject matter hereof and supersedes
any and all prior or contemporaneous representations, warranties, agreements
and understandings in connection therewith. This Agreement may be amended
only by a writing executed by all parties hereto.
D. Severability. If a court of competent jurisdiction determines that any
clause or provision of this Agreement is invalid, illegal or unenforceable,
the other clauses and provisions of the Agreement shall remain in full force
and effect and the clauses and provisions which are determined to be void,
illegal or unenforceable shall be limited so that they shall remain in
effect to the extent permissible by law.
E. Assignment. None of the parties hereto may assign this Agreement without
the express written consent of the other parties and any approved assignment
shall be binding on and inure to the benefit of such successor or, in the event
of death or incapacity, on assignor's heirs, executors, administrators,
representatives, and successors.
F. Applicable Law. This Agreement has been negotiated and is being
contracted for in the United States, state of Utah. It shall be governed by
and interpreted in accordance with the laws of the United States and the State
of Utah, regardless of any conflict-of-law provision to the contrary.
G. Attorney's Fees. If any legal action or other proceeding (including but
not limited to binding arbitration) is brought for the enforcement of or to
declare any right or obligation under this Agreement or as a result of a breach,
default or misrepresentation in connection with any of the provisions of this
Agreement, or otherwise because of a dispute among the parties hereto, the
prevailing party will be entitled to recover actual attorney's fees
(including for appeals and collection and including the actual cost of in-house
counsel, if any) and other expenses incurred in such action or proceeding,
in addition to any other relief to which such party may be entitled.
H. Counterparts and Facsimile. This Agreement may be executed in any number
of identical counterparts (except as to signature only), each of which may be
deemed an original for all purposes.
A fax, telecopy or other reproduction of this instrument may be executed
by one or more parties hereto and such executed copy may be delivered by
facsimile or similar instantaneous electronic transmission device pursuant
to which the signature of or on behalf of such party can be seen, and
such execution and delivery shall be considered valid, binding and effective for
all purposes.
IN WITNESS WHEREOF, the parties have execute this agreement below.
First Chartered Capital Corp., Inc. X-Xxx.Xxx, Inc.
By: By:
Xxxxxxx Xxxxxx, CEO Xxxxx Xxxxxxxx, CEO
------------------- --------------------
APPENDIX "A"
PURCHASER REPRESENTATIONS LETTER
[Name]
[Address]
[City, State, Zip]
Dear Sirs:
The undersigned,______________, is, and has been since __________, 200_,
the rightful owner of shares of Common Stock (the "Shares") of _________ (the
"Company"). These Shares were purchased pursuant to an Offshore Securities
Purchase Agreement, ("Purchase Agreement") of your design. As the three hundred
sixty five (365) day transaction restriction period attendant to the initial
issuance of the Shares has expired, the undersigned hereby requests that the
Shares be transferred into:
"Street Name" of ____________________________________,
with an address of
The undersigned represents and warrants as follows:
(1) The offer to purchase the Shares was made to it outside of the United
States, while the undersigned was, at that time and at the time the Purchase
Agreement was executed and delivered, and is now, outside the United States;
(2) It is not a U.S. Person (as such term is defined in Section 902(a) of
Regulation S ("Regulation S") promulgated under the United States Securities Act
of 1933 (the "Securities Act"); and it has purchased the Shares for its own
account and not for the account or benefit of any U.S. person;
(3) All offers and sales by the undersigned of the Shares acquired pursuant
to the Purchase Agreement shall be made pursuant to an effective registration
statement under the Securities Act or pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act;
(4) It is familiar with and understands the terms and conditions and
requirements contained in Regulation S;
(5) The undersigned has not engaged in any "directed selling efforts" (as
such term is defined in Regulation S) with respect to the Shares; and
(6) The undersigned purchased the Shares with investment intent and at
present does not have the intent to sell, dispose of, or otherwise transfer, the
Shares.
Dated this ____ day of ___________ 200 _
By: _______________________
These securities have not been registered with the United States Securities and
Exchange Commission or the securities commission of any state because they are
believed to be exempt from registration under Regulation D and/or Regulation S
promulgated under the Securities Act of 1933, as amended (The Act). The
foregoing authorities have not confirmed the accuracy or determined the adequacy
of this document. Any representation to the contrary is a criminal offense. This
subscription agreement shall not constitute an offer to sell nor a solicitation
of an offer to buy the securities in any jurisdiction in which such offer or
solicitation would be unlawful.
These securities are subject to restrictions on transferability and resale and
may not be transferred or resold except as permitted under the Act, an
applicable state securities laws, pursuant to registration or exemption
therefrom. Investors should be aware that they will be required to bear the
financial risks of this investment for an indefinite period of time. All offers
and sales of the herein-described securities by non-U.S. persons before the
expiration of a period commencing on the date of the closing of this offering
and ending one year thereafter shall only be made in compliance with Regulation
S, pursuant to registration under the Act, or pursuant to an exemption from
registration, and all offers and sales after the expiration of the one-year
period shall be made only pursuant to registration or an exemption from
registration. Hedging transactions involving these securities may not be
conducted unless in compliance with the Act.
AMENDMENT NO 1 TO OFFSHORE STOCK PURCHASE AGREEMENT
---------------------------------------------------
X-XXX.XXX, INC., a Colorado corporation ( H-NET ) and FIRST CHARTERED
CAPITAL CORPORATION INC. ( FIRST CAPITAL ), a British Virgin Islands corporation
Having entered into an Offshore Stock Purchase Agreement on or about the 4th
day of December, 2001 and the parties now desire to amend the Offshore Agreement
pursuant to the terms of this Amendment No. 1 to Offshore Stock Purchase
Agreement hereby agree to amend the Agreement as follows:
1. Purchase and Sale. On the basis of the representations and
-----------------
warranties herein contained, subject to the terms and conditions set forth
herein, FIRST CAPITAL,hereby agrees to purchase the Shares at a price of
Twenty Percent (20 %) of the bid price as listed by the OTCBB on the day
that FIRST CAPITAL elects to purchase shares under the terms of the Offshore
Agreement, the specific number of shares purchased to be reflected in written
buy orders sent to H-Net or its designee ( Consideration ), and H-Net hereby
agrees to sell the Shares to FIRST CAPITAL for such Consideration.
No other terms of the Offshore Stock Purchase Agreement are being amended
by this Amendment and shall remain in full force and effect.
DATED this _____ day of January, 2002.
First Chartered Capital Corp, Inc. X-Xxx.Xxx, Inc.
By:___________________________________ By:_________________________________
Its: its:
