-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, El8UU3oS3hI/kNNnXh0baqaLiMN7h6+eRHD4TRcY0etqVM2ObrKJ7t3oVVoSNNm/ QZ2nXnDp7iYKTbACR9Zxhw== 0000788738-03-000143.txt : 20030723 0000788738-03-000143.hdr.sgml : 20030723 20030625131119 ACCESSION NUMBER: 0000788738-03-000143 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20030624 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030625 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VECTOR HOLDINGS CORP CENTRAL INDEX KEY: 0000830664 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLES & PASSENGER CAR BODIES [3711] IRS NUMBER: 651021346 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10559 FILM NUMBER: 03756286 BUSINESS ADDRESS: STREET 1: 1959 SOUTH POWER ROAD STREET 2: BUILDING 103, SUITE 158 CITY: MESA STATE: AZ ZIP: 85206 BUSINESS PHONE: 602-762-8111 MAIL ADDRESS: STREET 1: 268 WEST 400 SOUTH, SUITE 300 STREET 2: SUITE 300 CITY: SALT LAKE CITY STATE: UT ZIP: 84101 FORMER COMPANY: FORMER CONFORMED NAME: VECTOR AEROMOTIVE CORP DATE OF NAME CHANGE: 19920703 8-K 1 sukumo8k.txt UNITED STATES 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 Event: June 24, 2003 (date of earliest event reported) NCI Holdings, Inc. ------------------ (Exact name of registrant as specified in its charter) Nevada (State or other jurisdiction of incorporation or organization) 000-17303 65-1021346 --------- ---------- (Commission File Number) (IRS Employer Identification Number) 1959 South Power Road, Building 103, Suite 158, Mesa, Arizona 85206 (Address of principal executive offices) (602) 762 8111 -------------- (Registrant's telephone number, including area code) Vector Holdings, Inc. (Former name or former address, if changed since last report) ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE NCI Holdings, Inc.'s (NCIH) plan of operation for the coming year is to identify and acquire a favorable business opportunity. NCIH's current plans, which are subject to change, is to acquire operations in the medical technologies sector and will evaluate such opportunities on their respective merits. NCIH has reviewed and evaluated a number of business ventures for possible acquisition or participation by NCIH. However, NCIH has not entered into any agreement, nor does it have any commitment to enter into or become engaged in a transaction as of the date of this filing. NCIH continues to investigate, review, and evaluate business opportunities as they become available and will seek to acquire or become engaged in business opportunities at such time as specific opportunities warrant. NCIH as of the date of this filing entered in to an Offshore Stock Purchase Agreement, as more fully described below. NCIH anticipates that the proceeds from the sale of such securities will provide it with sufficient capital to continue operations until the end of the year 2003, but there can be no assurance that this expectation will be fully realized. NCIH's management will have full discretion over the use of such proceeds and expects that such proceeds will be used for working capital and other general purposes until such time as NCIH acquires operations and formulates its business plan. As the date of this filing, NCIH has no plans for the purchase or sale of any plant or equipment. NCIH is a development stage company and currently has no employees. NCIH has not formulated plans to make any changes in the number of employees and does not anticipate doing so until it acquires a business or an interest in an operating company. NCIH does not expect to generate any meaningful revenue or incur operating expenses unless and until it acquires an interest in an operating company. On June 24, 2003, NCI Holdings, Inc. (NCIH), formerly known as Vector Holdings, Inc,. entered into an Offshore Stock Purchase Agreement (the "Agreement") with The Sukumo Group, Inc., a British Virgin Islands corporation (Sukumo). Pursuant to the Agreement Sukumo has the right to purchase up to 10,000,000 shares of NCIH pursuant to Regulation S of the Securities Act of 1933 at a purchase price equivalent to 30% of the bid price per share on the day that NCIH receives payment from Sukumo for the specified number of shares to be reflected in written buy orders sent to NCIH. The Agreement calls for NCIH to deliver a certificate in the amount of 10,000,000 shares of its restricted common stock (Certificate) to a designated escrow agent within 14 days of the day the Agreement was executed. Sukumo will only be deemed to have voting control or the power to dispose of that portion of the shares of common stock that will be released at the direction of Sukumo upon payment being rendered in U.S. dollars to NCIH or a designated third party escrow agent. It is anticipated that subsequent to the delivery of the Certificate representing such shares, Sukumo will begin drawing against the Certificate at Sukumo's discretion, excepting that at no time will Sukumo have direct or indirect beneficial ownership of more than 9.9% of the total issued and outstanding shares of NCIH. Sukumo may at its option resell the shares to its clients in compliance with Regulation S or hold such shares for their own account. In the event Sukumo acts as a selling agent with respect to reselling the NCIH shares, Sukumo is responsible for disclosing any mark ups, commissions or other consideration Sukumo or its representatives receives directly or indirectly as a result of reselling the NCIH shares. 2 In any event, NCIH will only receive 30% of the proceeds from any such resales of up to 10,000,000 shares based upon the bid price onthe day of such sale. As of the date of this filing, NCIH's best bid price was $.65. The bid price of NCIH is subject to change based upon market fluctuations. Accordingly, the net dollar amount NCIH receives could fluctuate significantly if the market price of NCIH's common stock rises or falls substantially. Select Representations Made by Sukumo Under the terms of the Agreement Sukumo has represented the following: Federal and State Securities Laws. Sukumo knows and understands the laws passed by the Federal Governments of the countries wherein they will resale the shares issued to Sukumo under this agreement and the accompanying rules and regulations propagated by the Securities and Exchange Commissions of those countries and the corresponding laws passed by the different counties and states' Securities divisions wherein Sukumo conducts its business. Sukumo expressly warrants and represents to NCIH that at all times during the term of this agreement that they shall abide by all Federal, County and State securities laws, rules and regulations of the United States of America or any other country wherein Sukumo conducts its business. Further, Sukumo agrees and warrants that it shall in no manner compromise NCIH by the violation of any such laws, rules or regulations. Sukumo understands that NCIH will abide by the securities laws and that NCIH expects Sukumo to abide by the securities laws. If Sukumo fails to abide by any such law, this agreement shall immediately be terminated and NCIH shall no longer be bound by the terms hereof. Representations to Sukumo's Clients. Sukumo agrees that all representations made by it, its sales agents, brokers, dealers, customer service representatives or any other agent of Sukumo who solicits the purchase of these securities by an investor shall be complete and accurate and shall contain only the information that is available to the market places. Sukumo shall not disseminate any information to its clients that is not completely accurate and factual. If Sukumo becomes aware that any of its sales representatives are disseminating information that is not completely accurate, Sukumo shall take all necessary steps to prevent further dissemination of the information and shall take all necessary steps to correct the information with the investors to whom the information has been passed. General Overview of Regulation S Regulation S provides generally that any offer or sale that occurs outside of the United States is exempt from the registration requirements of the Securities Act of 1933, provided that certain conditions are met. Regulation S has two safe harbors. One safe harbor applies to offers and sales by issuers, securities professionals involved in the distribution process pursuant to contract, their respective affiliates, and persons acting on behalf of any of the foregoing (the "issuer safe harbor"), and the other applies to resales by persons other than the issuer, securities professionals involved in the distribution process pursuant to contract, their respective affiliates who are not officers or directors, and persons acting on behalf of any of the forgoing (the "resale safe harbor"). An offer, sale or resale of securities that satisfied all conditions of the applicable safe harbor is deemed to be outside the United States as required by Regulation S. The distribution compliance period for shares sold in reliance on Regulation S is one year. 3 NCIH has complied with the requirements of Regulation S by having no directed selling efforts made in the United States, by selling only to buyers who were outside the United States at the time the buy orders originated, ensuring that each person is a non-U.S. person with address in a foreign country and having each person make representation to NCIH certifying that he or she is not a U.S. person and is not acquiring the Securities for the account or benefit of a U.S. person other than persons who purchased Securities in transactions exempt from the registration requirements of the Securities Act; and also agrees only to sell the Securities in accordance with the registration provisions of the Securities Act or an exemption therefrom, or in accordance with the provisions of the Regulation. Legend NCIH's transfer agent has been advised to place the following legend on each certificate representing shares of NCIH being sold in conjunction with the Agreement: These securities are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under the Act, 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. Limited Market for Common Stock. There is currently a limited trading market for our shares of common stock, and there can be no assurance that a more substantial market will ever develop or be maintained. Any market price for shares of common stock of NCIH is likely to be very volatile, and numerous factors beyond our control may have a significant adverse effect. In addition, the stock markets generally have experienced, and continue to experience, extreme price and volume fluctuations which have affected the market price of many small capital companies and which have often been unrelated to the operating performance of these companies. These broad market fluctuations, as well as general economic and political conditions, may also adversely affect the market price of our common stock. Further, there is no correlation between the present limited market price of our common stock and our revenues, book value, assets or other established criteria of value. The present limited quotations of our common stock should not be considered indicative of the actual value of NCIH or our common stock. Risks of Penny Stock. NCIH's common stock (OTC BB: NCIH) may be deemed to be "penny stock" as that term is defined in Rule 3a51-1 of the Securities and Exchange Commission. Penny stocks are stocks (i) with a price of less than $5.00 per share; (ii) that are not traded on a "recognized" national exchange; (iii) whose prices are 4 not quoted on the NASDAQ automated quotation system (NASDAQ-listed stocks must still meet requirement (i) above); or (iv) in issuers with net tangible assets less than $2,000,000 (if the issuer has been in continuous operation for at least three years) or $5,000,000 (if in continuous operation for less than three years), or with average sales of less than $6,000,000 for the last three years. There has been a limited public market for our common stock during the last five years. There is no assurance that the current price level will continue, as there has thus far been low volume, and our stock may be deemed to be penny stock at any time. Section 15(g) of the Securities Exchange Act of 1934, as amended, and Rule 15g-2 of the Securities and Exchange Commission require broker/dealers dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document before effecting any transaction in a penny stock for the investor's account. Potential investors in our common stock are urged to obtain and read such disclosure carefully before purchasing any shares that are deemed to be a "penny stock." Moreover, Rule 15g-9 of the Securities and Exchange Commission requires broker/dealers in penny stocks to approve the account of any investor for transactions in such stocks before selling any penny stocks to that investor. This procedure requires the broker/dealer to (i) obtain from the investor information concerning his or her financial situation, investment experience and investment objectives; (ii) reasonably determine, based on that information, that transactions in penny stocks are suitable for the investor and that the investor has sufficient knowledge and experience as to be reasonably capable of evaluating the risks of penny stock transactions; (iii) provide the investor with a written statement setting forth the basis on which the broker/dealer made the determination in (ii) above; and (iv) receive a signed and dated copy of such statement from the investor, confirming that it accurately reflects the investor's financial situation, investment experience and investment objectives. Compliance with these requirements may make it more difficult for investors in our common stock to resell their shares to third parties or to otherwise dispose of them. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS The following exhibits are included as part of this report: EXHIBIT PAGE NO. NO. DESCRIPTION 10(i) 6 Offshore Stock Purchase Agreement dated June 24, 2003, between NCIH and The Sukumo Group, Inc. Pursuant to the requirement 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. 5 NCI Holdings, Inc. Signature Date /s/ Gino Carlucci - ----------------------------------- Gino Carlucci June 24, 2003 as CEO, President and Director 6 EXHIBIT 10(i) 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 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, 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 24th day of June, 2003 (the "Effective Date"), by and between NCI Holdings, Inc., a Nevada corporation ("NCIH") and The Sukumo Group, Inc. ("Sukumo"), a British Virgin Islands corporation. WHEREAS, Sukumo desires to purchase up to Ten Million (10,000,000) shares of restricted common stock of NCIH (the "Shares"); and WHEREAS, NCIH agrees to deliver the Shares for the Consideration (as defined below) to be paid by Sukumo, 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, Sukumo hereby agrees to purchase the Shares at a purchase price of 30% of the Bid price per share on the day that NCIH receives payment from Sukumo for the specific number of shares purchased to be reflected in written buy orders sent to NCIH or its designee ("Consideration"), and NCIH hereby agrees to sell the Shares to Sukumo for such Consideration. 7
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 NCIH Escrow Account specified by NCIH (the "Escrow Account"). NCIH shall deliver the Shares to Sukumo physically delivering certificates representing the shares to the Escrow Agent, within 14 days of the signing of this agreement by the parties hereto. 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 Sukumo : Sukumo shall deliver, or cause to be ---------- delivered, to NCIH : (a) the balance of the Consideration (if any); and (b) such other documents, including a signed Subscription Agreement, 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 NCIH in furtherance of the intent of this Agreement; (2) by NCIH : NCIH shall deliver , or cause -------- the following to be delivered, to Sukumo: (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 Sukumo 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. Sukumo will ensure that all payments are forwarded to the Escrow Account. NCIH will supply Sukumo with the Escrow Account's banking co-ordinates within 7 days of the authorization of this agreement. 3. Any Resale Shall Be Made Pursuant to Rule 904 of Regulation S. Sukumo and NCIH both understand and agree that the repurchase and/or resale of securities provided for herein shall only be made pursuant to the provisions of Rule 904 of Regulation S of the Securities Act of 1933. A. Sukumo shall not offer or sell any of the securities except in an off-shore transaction, with no directed selling efforts in the United States or any person acting in Sukumo's behalf; and B. Neither Sukumo nor any of its agents or affiliates acting on its behalf shall knowingly sell to a U.S. person. C. If Sukumo or any person acting on its behalf knows that a purchaser is a dealer, as defined in the Securities Act of 1933, or is a person receiving a selling concession, fee or other remuneration in respect of the securities sold Sukumo or any person acting on its behalf 8 shall send to the purchaser a confirmation or other notice stating that the securities may be offered and sold during the distribution compliance period only in accordance with the provisions of Regulation S, pursuant to registration of the securities, or pursuant to an available exemption from registration requirements. D. Dealer. If Sukumo acts as a dealer they will comply with 3C. above. E. Investment Risk. Because of NCIH's financial position and other factors as disclosed in NCIH's United States Securities and Exchange Commission filings at www.sec.gov (which Sukumo 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 possibility that they may be required to bear the financial risks of this investment for an indefinite period of time. F. Access to Information. Sukumo and NCIH and their advisors have been afforded the opportunity to discuss the transaction with NCIH and accounting professionals and to examine and evaluate the financial impact of the sale and exchange contemplated herein. Sukumo has received and reviewed NCIH's business plan. 4. Representations and Warranties of Sukumo: Sukumo hereby covenants and represents and ----------------------------------------- warrants to NCIH that: A. Organization. Sukumo is a corporation validly existing and in good standing under the laws of 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 Sukumo. This Agreement has been duly executed and delivered by Sukumo and constitutes a binding and enforceable obligation of Sukumo. 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 Sukumo in connection with the execution, delivery, or performance of this Agreement or the transfer of the Shares, or if any such is required, Sukumo will have or will obtain the same prior to Closing. C. Litigation. Sukumo 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 Sukumo, and the execution and performance of this Agreement will not violate, or result in a breach of, or constitute a 9 default in, any agreement, instrument, judgment, order, or decree to which Sukumo is a party or to which the Consideration is subject. E. Offshore Transaction. Sukumo represents and warrants to NCIH as follows: (i) Sukumo is not a "U.S. person" as that term is defined in Rule 902 of Regulation S; (ii) Sukumo is not, and on the Closing date will not be, an affiliate of NCIH ; (iii) at the execution of this Agreement, as well as the time this transaction is or was due, Sukumo was outside the United States, and no offer to purchase the Shares was made in the United States; (iv) Sukumo represents that all offers and subsequent 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) Sukumo is may be 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 Sukumo 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 Sukumo 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 NCIH of Sukumo's purchase, and shall survive thereafter. If Sukumo has knowledge, prior to the acceptance of this Offshore Stock Purchase Agreement by NCIH , that any such representations and warranties shall not be true and accurate in any respect, Sukumo prior to such acceptance, will give written notice of such fact to NCIH specifying which representations and warranties are not true and accurate and the reasons therefor. Sukumo agrees to fully indemnify, defend and hold harmless NCIH, 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 Sukomo's representations, warranties and agreements contained herein. F. Accredited Investor. Sukumo is an accredited investor as that term is defined in Rule 501(a) of Regulation D promulgated under the Act. Sukumo further represents and warrants that the information as disclosed in the Subscription Agreement attached hereto is true and correct. G. Directed Selling Efforts. Sukumo 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 Sukumo nor any person acting for Sukumo has conducted nor will conduct any "directed selling efforts" as that term is defined in Rule 902 of Regulation S. 10 H. Independent Investigation; Access. Sukumo, in electing to purchase the Shares herein based upon and has relied solely upon an independent investigation made by it and its representatives. Sukumo has been given no oral or written representation or warranty from NCIH other than as set forth in this Agreement. Sukumo 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 NCIH, all material contracts and documents relating to NCIH and this offering and an opportunity to ask questions of, and to receive answers from, NCIH or any officer of NCIH acting on its behalf concerning NCIH and the terms and conditions of this offering. Sukumo and its advisors, if any, have been furnished with access to all publicly available materials relating to the business, finances and operations of NCIH and materials relating to the offer and sale of the Shares which have been requested. Sukumo and its advisors, if any, have received complete and satisfactory answers to any such inquiries. I. No Government Recommendation or Approval. Sukumo 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. J. No Formation or Membership in "Group." Sukumo is not part of a "group" as that term is defined under the Act. Sukumo 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 NCIH. K. Hedging Transactions. Sukumo 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 NCIH's Closing. All obligations of NCIH under this Agreement, and as -------------------------------------- an inducement to NCIH to enter into this Agreement, are subject to Sukumo's covenants and agreements to each of the following: A. Acceptance of Documents. All instruments and documents delivered to NCIH and Sukumo pursuant to this Agreement or reasonably requested by NCIH to verify the representations and warranties of Sukumo herein, shall be satisfactory to NCIH and its counsel. B. Representations and Warranties. The representations and warranties by Sukumo and NCIH 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. Sukumo and NCIH 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. 11 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 NCIH or Sukumo's 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 June 24, 2003. 7. Restrictive Legend. Sukumo 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 conduted unless in compliance with the Act. 8. NCIH's Obligation to Refuse Transfer. Pursuant to Regulation S promulgated under the Act, NCIH 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. Federal and State Securities Laws. Sukumo knows and understands the laws passed by the --------------------------------- Federal Governments of the countries wherein they will resale the shares issued to Sukumo under this agreement and the accompanying rules and regulations promulgated by the Securities and Exchange Commissions of those countries and the corresponding laws passed by the different countries and states' Securities divisions wherein Sukumo conducts its business. Sukumo expressly warrants and represents to NCIH that at all times during the term of this agreement that they shall abide by all Federal, County and State securities laws, rules and regulations of the United States of America or any other country wherein Sukumo conducts its business. Further, Sukumo agrees and warrants that it shall in no manner compromise NCIH by the violation of any such laws, rules or regulations. Sukumo understands that NCIH will abide by the securities laws and that NCIH expects Sukumo to abide by the securities laws also. If Sukumo fails to abide by any such law, this agreement shall immediately be terminated and NCIH shall no longer be bound by the terms hereof. 10. Representations to Sukumo's Clients. Sukumo agrees that all representations made by it, its ----------------------------------- sales agents, brokers, dealers, customer service representatives or any other agent of Sukumo who solicits the purchase of these securities by an investor shall be complete and accurate and shall contain only the information that is available to the market places. Sukumo shall not disseminate any information to its clients that is not completely accurate and factual. If Sukumo becomes aware that any of its sales representatives are disseminating information that is not completely accurate, Sukumo shall take all necessary steps to prevent further dissemination of the information and shall take all necessary steps to correct the information with the investors to whom the information has been passed. 11. Miscellaneous. ------------- A. Authority. The officers of Sukumo and NCIH by executing this Agreement are duly authorized to do so, and each party has taken all action required for valid execution. 12 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 Sukumo The Sukumo Group, Inc. Otemachi First Square East Tower 4 F 1-5-1 Otemachi, Chiyoda-KU Tokyo, Japan 100-0004 To NCIH 1959 South Power Road, Building 103 Mesa, Arizona 85206 (602) 762-8111 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 of America, State of Utah. It shall be governed by and interpreted in accordance with the the laws of the United States of America and the State of Utah, regardless of any conflict-of-law provision to the contrary. Any dispute arising out of this Agreement shall be brought in a court of competent jurisdiction in the State of Utah.. The parties expressly consent to the personal jurisdiction of the above-identified courts. The parties agree to exclude and waive any statute, law or treaty which allows or requires any dispute to be decided in another forum or by rules of decision other than as provided in this Agreement. 13 G. Attorney's Fees. If any 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 executed this agreement below. The Sukumo Group, Inc. NCI Holdings, Inc. By: /s/ Michael Newman By: /s/ Gino Carlucci -------------------------------------------------- -------------------------------------------------------- Michael Newman, President Gino Carlucci, President
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