Exhibit
10.1


 


SUBSCRIPTION AND INVESTMENT REPRESENTATION AGREEMENT


 


INTAC
International, Inc.

Unit 6-7, 32/F., Laws Commercial
Plaza
788 Cheung Sha Wan Road
Kowloon, Hong Kong


 


Attention:  Wei Zhou, Chief Executive Officer


 


Dear
Mr. Zhou:


 


This
Subscription and Investment Representation Agreement (this “Agreement”) is
entered into as of the date set forth on the signature page hereof by and
between INTAC International, Inc., a Nevada corporation (together with its
successors and permitted assigns, the “Company”), and the undersigned
accredited investor (together with its successors and permitted assigns, the
“Investor”).


 


The
Investor desires to purchase from the Company and the Company desires to sell
to the Investor, on the terms and conditions set forth in this Agreement, eight
hundred thousand (800,000) shares of the common stock, $.001 par value per
share (the “Common Stock”), of the Company.


 


On
the terms and conditions of this Subscription and Investment Representation
Agreement (the “Agreement”), the Investor proposes to make an investment in the
Company as follows:


 


1.                    Subscription.  Subject to the terms and conditions hereof, Investor hereby
irrevocably subscribes to purchase eight hundred thousand (800,000) shares (the
“Shares”) of Common Stock of the Company at a price of U.S.$15.00 per
share.  In so doing, Investor is hereby
delivering to the Company, for the Company’s benefit, a check, draft, money
order or wire transfer payable to the order of “INTAC International, Inc.” in
the amount of U.S.$12,000,000.00, the aggregate purchase price payable in
respect of the purchase of the Shares. 
The Company will deliver a stock certificate representing the Shares
purchased by the Investor within ten business days after receipt of the
purchase price.


 


2.                    Representations and Warranties of the
Company.  The Company represents and
warrants to the Investor as follows:


 


(a)  The Company is a corporation duly organized
and validly existing under the laws of the State of Nevada.


 


(b)  As of the date hereof, the entire authorized
capital stock of the Company consists of (1) One Hundred Million (100,000,000)
shares of Common Stock, of which Twenty Million One Hundred Eighty-Nine
Thousand Four Hundred and Fifty-Five (20,189,455) shares are issued and
outstanding on the date hereof prior to the offering made hereby, and (2) Ten
Million (10,000,000) shares of Preferred Stock, of which no shares are issued
and outstanding on the date hereof.  All
of the issued and outstanding shares are duly authorized, validly issued, fully
paid, and nonassessable. The Shares to be issued to the Investor in the
offering will be, when issued and paid for in accordance with the terms of this
Agreement, validly issued, fully paid and nonassessable.


 


(c)  The Company has full corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder.  This Agreement constitutes a
valid and legally binding obligation of the Company, enforceable in accordance
with its terms and conditions.


 

















 


3.                    Representations and Warranties of
Investor.  Investor hereby represents
and warrants to the Company as follows:


 


(a)  The offer and sale of the Shares to Investor
is made in reliance upon Investor’s representation to the Company, which, by
Investor’s execution of this Agreement, Investor hereby confirms, that the
Shares are being acquired for investment for Investor’s own account, not as a
nominee or agent, and not with a view to the sale or distribution of any part
thereof, and that Investor has no present intention of selling, granting any
participation in, or otherwise distributing the same.  By executing this Agreement, Investor further represents that
Investor has no contract, undertaking, agreement or arrangement with any person
to sell, transfer, or grant participation rights to such person or to any third
person, with respect to any of the Shares and has no present intention to enter
into any such contract, undertaking, agreement or arrangement.


 


(b)  Investor understands and acknowledges that
the Offering of the Shares has not and will not be registered under the
Securities Act of 1933, as amended (the “Securities Act”), on the grounds that
the offering and sale of the Shares are exempt from registration pursuant to
the provisions of Section 4(2) and/or Rule 506 of Regulation D of the
Securities Act, and that the Company’s reliance upon such exemption is, in
part, predicated upon Investor’s representations set forth in this Agreement.


 


(c)  Investor covenants that in no event will
Investor dispose of any of the Shares, or any part thereof, unless and until
(i) there is an effective Registration Statement under the Securities Act
covering the proposed disposition and such disposition is made in accordance
with such Registration Statement, and (ii) Investor shall have notified the
Company of the proposed disposition and shall have furnished the Company with a
statement of the circumstances surrounding the proposed disposition, and, if
reasonably requested by the Company, Investor shall have furnished the Company
with an opinion of counsel satisfactory in form and substance to the Company
and the Company’s counsel to the effect that (A) such disposition will not
require registration under the Securities Act and (B) appropriate action
necessary for compliance with the Securities Act and any applicable state,
local or foreign law has been taken. In addition, the Investor agrees that the
Investor will comply with the contractual lock-up period imposed upon Investor
under this Agreement.


 


(d)  Investor represents that Investor (i) has
such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of Investor’s prospective investment
in the Shares; (ii) has received from the Company all the information he has
requested and considers necessary or appropriate for deciding whether to
purchase the Shares; (iii) has had an opportunity to ask questions and receive
answers from the Company regarding the Company, its business, operations,
market potential, capitalization, financial condition and prospects, and the
terms and conditions of the offering of the Shares; (iv) has the ability to
bear the economic risks of Investor’s prospective investment; and (v) is able,
without materially impairing his financial condition, to hold the Shares for an
indefinite period of time and to suffer complete loss on his investment.


 


(e)  Investor represents that he is a bona fide
resident of the state or country indicated herein, and if Investor is an
individual, Investor is at least 21 years of age. Investor further represents
that he has no present intention of becoming a resident of any other state or
jurisdiction.


 


(f)  If Investor’s purchase of the Shares is
subject to regulation by the government of a sovereign jurisdiction other than
the United States, Investor has complied with all laws and regulations
governing the purchase and sale of the Shares imposed by such sovereign
jurisdiction.


 

















 


(g)  Investor has received and read or reviewed,
and is thoroughly familiar with, the Company’s filings with the Securities and
Exchange Commission (the “SEC Filings”), particularly the information set forth
under the captions “Business Risk Factors” and “Cautionary Statement Regarding
Forward-Looking Statements” found in the Company’s Annual Report on Form 10-KSB
for the year ended December 31, 2003 and Investor is aware of the high
degree of risk involved in making an investment in the Company; it being
understood, however, that this representation does not constitute a waiver of
any rights that Investor has under the Securities Act, any applicable state
securities act or the rules and regulations promulgated thereunder.


 


(h)  Investor has had the opportunity to review,
at the Company’s offices or otherwise, any materials available to the Company
relating to the Company or any other matters or items discussed in or
accompanying the SEC Filings.  The
Company has answered all inquiries from Investor, and given Investor the
opportunity to obtain any additional information (to the extent the Company
possessed such information or could acquire it without unreasonable effort or
expense) requested by the Investor necessary to verify the accuracy of any
information set forth in this Agreement, the SEC Filings, or otherwise.


 


(i)  Investor understands that he is purchasing the
Shares only in reliance upon the information set forth in this Agreement.  Investor acknowledges that, except as set
forth in this Agreement, no representations or warranties have been made to
Investor or the Investor’s advisors by the Company or by any persons acting on
their behalf with respect to the business of the Company, the financial
condition of the Company or any other aspect of or related to a purchase of the
Shares, and that Investor has not relied upon any information concerning this
transaction, written or oral.


 


(j)  Investor acknowledges and is aware of the
following:


 


(i)  The Shares are a highly
speculative investment that involves a substantial risk of loss by Investor of
his entire investment in the Company.


 


(ii)  There are substantial restrictions on the
transferability of the Shares.  The
Shares will only be registered under the Securities Act only pursuant to the
terms and conditions of Section 8 of this Agreement; accordingly, there may
be no public market for the Shares; Investor may not be able to avail himself
of the provisions of Rule 144 under the Securities Act with respect to the
resale of the Shares; and the Investor may have to hold the Shares indefinitely
and may not be able to liquidate his investment in the Company.


 


(iii)  No federal or state agency has made any
finding or determination as to the fairness of the offering of the Shares for
investment or any recommendation or endorsement of the Shares.


 


(iv)  The Company, its officers, directors, agents
or employees or any other person, have not represented, guaranteed or warranted
to Investor, expressly or by implication, any of the following:


 


•                       the approximate or exact length of time that
Investor will be required to remain an owner of the Shares;


 


•                       the amount of or type of consideration,
profit or loss to be realized, if any, as a result of an investment in the
Company; or


 


•                       the likelihood that the Company’s business
plan will succeed.


 

















 


(k)  Investor has neither distributed nor
disclosed, directly or indirectly, any of the Company’s confidential
information, including, without limitation, the information contained in any
contract or agreement to which the Company is a party, to anyone other than his
legal, tax, accounting or other advisors for their use solely in that capacity
for Investor, and no one other than the undersigned and his legal, tax,
accounting or other advisors, if any, has used the confidential information.


 


(l)  Investor represents and warrants to the
Company that he is an “accredited investor” within the meaning of SEC Rule
501(a) of Regulation D, as presently in effect, under the definition set forth
in the box initialed below by the Investor.


 


o  1.
Any bank as defined in section 3(a)(2) of the Act, or any savings and loan
association or other institution as defined in section 3(a)(5)(A) of the
Act whether acting in its individual or fiduciary capacity; any broker or
dealer registered pursuant to section 15 of the Securities Exchange Act of
1934; any insurance company as defined in section 2(13) of the Act; any
investment company registered under the Investment Company Act of 1940 or a
business development company as defined in section 2(a)(48) of that Act;
any Small Business Investment Company licensed by the U.S. Small Business
Administration under section 301(c) or (d) of the Small Business
Investment Act of 1958; any plan established and maintained by a state, its
political subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees, if such plan has
total assets in excess of $5,000,000; any employee benefit plan within the
meaning of the Employee Retirement Income Security Act of 1974 if the
investment decision is made by a plan fiduciary, as defined in
section 3(21) of such act, which is either a bank, savings and loan
association, insurance company, or registered investment adviser, or if the
employee benefit plan has total assets in excess of $5,000,000 or, if a
self-directed plan, with investment decisions made solely by persons that are
accredited investors;


 


o  2.
Any private business development company as defined in section 202(a)22 of
the Investment Advisers Act of 1940;


 


o  3.
Any organization described in section 501(c)3 of the Internal Revenue
Code, corporation, Massachusetts or similar business trust, or partnership, not
formed for the specific purpose of acquiring the securities offered, with total
assets in excess of $5,000,000;


 


o  4.
Any director, executive officer, or general partner of the issuer of the
securities being offered or sold, or any director, executive officer, or
general partner of a general partner of that issuer;


 


o  5.
Any natural person whose individual net worth, or joint net worth with that
person’s spouse, at the time of his purchase exceeds $1,000,000;


 


o  6.
Any natural person who had an individual income in excess of $200,000 in each
of the two most recent years or joint income with that person’s spouse in
excess of $300,000 in each of those years and has a reasonable expectation of
reaching the same income level in the current year;


 


o  7.
Any trust, with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the securities offered, whose purchase is
directed by a sophisticated person as described in Rule 506(b)(2)(ii) and


 


ý  8.
Any entity in which all of the equity owners are accredited investors.


 


The
foregoing statements are true and accurate to the best of my information and
belief, and I will promptly notify the Company of any changes.


 

















 


(m)  At no time was Investor presented with or
solicited by any publicly issued or circulated newspaper, mail, radio,
television or other form of general advertising or solicitation in connection
with the Shares.


 


(n)  In addition, Investor has been advised that
Rule 144 promulgated by the SEC under the Securities Act, which permits certain
limited sales of unregistered securities, may not be presently available with
respect to the Shares and, in any event, requires that the Shares be held for a
minimum of one (1) year, and in certain cases two (2) years, after they have
been purchased and paid for (within the meaning of SEC Rule 144), before they
may be resold under SEC Rule 144.


 


(o)  Investor agrees that the Company may rely on
the representations found in this Section 3.  Investor further agrees that he will furnish to the Company such
further information as the Company may deem relevant in determining whether the
undersigned is an “accredited investor” within the meaning of Rule 501(a) and
whether the undersigned’s proposed investment may have any adverse legal
effects, and the undersigned authorizes the Company and its agents to confirm,
as necessary, with the undersigned’s tax adviser, investment counselor, lawyer,
accountant, banker or other financial representative named below, such
information as the Company may deem relevant in making such determination.


 


(p)  The foregoing representations and warranties
are true and accurate as of the date hereof and shall survive the Closing of
the purchase of the Shares.  If in any
respect such representations and warranties shall not be true and accurate
prior to the Closing Date, Investor shall give written notice of such fact to
the Company, specifying which representations and warranties are not true and
accurate and the reasons therefor.


 


4.  Indemnification.  Investor recognizes that the sale of the
Shares to Investor will be based upon his representations and warranties set
forth in Paragraph 3 hereof, and Investor agrees to indemnify and to hold
harmless the Company, each of its officers and directors, and each person who
controls the Company, from and against any and all loss, damage, liability or
expense, including costs and reasonable attorneys’ fees, to which they may be
subject or which they may incur by reason of, or in connection with, any
misrepresentation made by Investor in this Agreement, any breach by Investor of
his warranties or failure by Investor to fulfill any covenants or agreements
set forth herein or arising out of the sale or distribution of any such shares
by Investor in violation of the Securities Act or other applicable securities
laws.  All representations, warranties,
and covenants and the indemnification contained in this Agreement shall survive
the acceptance of this subscription and the issuance to Investor of the Shares.


 


5.  Confidentiality.  Investor hereby covenants and agrees to maintain the confidential
status of all Confidential Information (as defined below), and not to use,
directly or indirectly, any such Confidential Information for any purpose other
than to evaluate an investment in the Company, and not to disclose, directly or
indirectly, any such Confidential Information to any third party.  For the purposes of this Agreement,
“Confidential Information” means all business, financial, technical and other
information about the Company, designated as confidential or proprietary, or
information which, by the nature of the circumstances surrounding the
disclosure, ought in good faith to be treated as confidential, including,
without limitation, the confidential information provided to the Investor.


 


6.  Acknowledgment.  Investor acknowledges and understands that he may receive or may
be provided confidential or otherwise non-public information about the Company
that may constitute material, non-public information concerning the Company,
and that he is obligated to


 

















 


refrain
from (a) selling any shares of common stock beneficially owned or held by him
and (b) otherwise trading in the Company’s securities, at any time during which
Investor is in possession of non-public, material information concerning the
Company.


 


7.  Restrictive Legends.  Investor understands and agrees that the
following restrictions and limitations are applicable to his purchase and any
resale or other transfer he may make of the Shares:


 


(a)  The Shares shall not be sold or otherwise
transferred unless they are registered under the Securities Act and applicable
state securities laws or are exempt therefrom.


 


(b)  Legends in substantially the following form
will be placed on each certificate evidencing the Shares:


 


THE
SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAW.  THE SHARES HAVE BEEN ACQUIRED FOR PRIVATE
INVESTMENT AND MAY NOT BE OFFERED FOR SALE OR SOLD IN THE ABSENCE OF  (i) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SHARES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE
STATE SECURITIES LAWS, OR (ii) AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED. THE SHARES REPRESENTED HEREBY
ARE SUBJECT TO A SUBSCRIPTION AND INVESTMENT REPRESENTATION AGREEMENT AND MAY
NOT BE SOLD, PLEDGED, ENCUMBERED OR OTHERWISE TRANSFERRED OR DISPOSED OF,
EXCEPT IN ACCORDANCE WITH THE TERMS THEREOF, COPIES OF WHICH ARE ON FILE AT THE
PRINCIPAL OFFICE OF THE COMPANY AND WILL BE PROVIDED UPON REQUEST TO THE
COMPANY.


 


8.  (a) 
Registration Rights.  As soon as
practicable, but in no event later than the forty-fifth day following the
Closing Date, as such term is defined in Section 13 of this Agreement (the
“Filing Deadline”), the Company shall prepare and file with the Securities and
Exchange Commission (the “Commission”) a Registration Statement on Form S-3 as
a “shelf” registration statement under Rule 415 under the Securities Act (“Rule
415”) covering the resale of the Shares.


 


(b)  Effectiveness.  The Company shall use its best efforts to cause the Registration
Statement to become effective as soon as practicable following the filing
thereof.  The Company shall respond
promptly to any and all comments made by the staff of the Commission on the
Registration Statement, and shall promptly submit to the Commission, within two
(2) business days after the Company learns that no review of the Registration
Statement will be made by the staff of the Commission or that the staff of the
Commission has no further comments on the Registration Statement, as the case
may be, a request for acceleration of the effectiveness of the Registration
Statement to a time and date not later than three (3) Business Days after the
submission of such request; provided that at any time prior to the end of the
Registration Deadline, the Company may delay its request for effectiveness for
a period of up to ten days if the Company is required to file an Exchange Act
report within such ten (10) day period that would require an amendment to the
Registration Statement or a supplement to the Prospectus to be used in
connection with the Registration Statement. 
The Company will maintain the effectiveness of the Registration
Statement until the earlier to occur of (i) the date on which all of the
Registrable Securities eligible for resale thereunder have been publicly sold
pursuant to either the Registration Statement or Rule 144 and (ii) the date on
which all of the Registrable Securities remaining to be sold under the
Registration Statement (in the reasonable opinion of counsel to the Holder) may
be immediately sold to the


 

















 


public
under Rule 144 or 144(k) or any successor provision within a three month period
(the period beginning on the Closing Date and ending on the earlier to occur of
(i) or (ii) above being referred to herein as the “Registration Period”).


 


(c)                                  Allowed Delay.  The Company may delay the disclosure of material non-public
information, and suspend the availability of the Registration Statement, for no
more than (i) five (5) consecutive Business Days or (ii) twenty (20) calendar
days in any twelve (12) month period, in the event of a proposed merger,
reorganization or similar transaction involving the Company, as long as its
board of directors (A) has determined, upon the advice of counsel, that such
information would be required to be disclosed in an offering registered under
the Securities Act and (B) reasonably deems it in the Company’s best interests
not to disclose such information publicly (an “Allowed Delay”). The
Company shall promptly (i) notify each Holder in writing of the existence of
material non-public information giving rise to an Allowed Delay (but in no
event, without the prior written consent of such Holder, shall the Company
disclose to such Holder any of the facts or circumstances regarding any
material non-public information), (ii) advise each Holder in writing to cease
all sales under the Registration Statement until the termination of the Allowed
Delay and (iii) notify each Holder in writing immediately upon the termination
or expiration of an Allowed Delay.


 


9.  No Waiver. Notwithstanding any of the
representations, warranties, acknowledgments or agreements made herein by
Investor, Investor does not thereby or in any other manner waive any rights
granted to Investor under federal or state securities laws.


 


10.  Assignment. 
Investor agrees not to transfer or assign this Agreement, or any of his
interest therein.


 


11.  No Revocation.  Investor acknowledges and agrees that his subscription for
Shares, made by the execution and delivery of this Agreement by Investor, is
irrevocable and shall survive the death or incapacity of Investor.


 


12.  Closing. 
The closing of the purchase and sale of the Shares (the “Closing”) shall
take place contemporaneously with the parties’ execution of this Agreement (the
“Closing Date”). Execution by the Company hereunder shall constitute its
written acknowledgment of the receipt of and payment for the full purchase
price for the Shares.


 


13.  Miscellaneous.


 


(a)  All notices or other communications to the
Company given or made hereunder shall be in writing and shall be delivered or
mailed by registered or certified mail, return receipt requested, postage
prepaid, to Chief Executive Officer, INTAC International, Inc., Unit 6-7,
32/F., Laws Commercial Plaza, 788 Cheung Sha Wan Road, Kowloon, Hong Kong, with
a copy to the Chief Financial Officer, 12221 Merit Drive, Suite 1350, Dallas,
Texas  75251, or such other principal
executive offices of the Company as shall then be in existence.  All notices or other communications to the
Investor given or made hereunder shall be in writing and shall be delivered to
Investor by registered or certified mail, return receipt requested, postage
prepaid, to the Investor’s address as set forth on the signature page to this
Agreement.


 


(b)  Notwithstanding the place where this
Agreement may be executed by any of the parties hereto, the parties expressly
agree that all of the terms and provisions hereof shall be construed in
accordance with and governed by the laws of the State of Nevada applicable to
agreements made and to be wholly performed therein.


 

















 


(c)  This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and may be amended only by an instrument in writing executed by all parties.


 


(d)  This Agreement shall be binding upon the
heirs, estates, legal representatives, successors and assigns of the parties
hereto.


 


(e)  All terms used herein shall be deemed to
include the masculine, feminine and neuter, and the singular and plural as the
context requires.  Captions herein are
for convenience of reference only and shall not alter or affect the meaning or
construction of the paragraphs hereof to which they relate.


 


(f)  Each of the parties hereto agree to execute
such other documents, instruments or agreements as shall be reasonably
necessary, appropriate or required to evidence the intent of the parties hereto.


 


IN
WITNESS WHEREOF, the undersigned have executed, or caused to be executed, this
Subscription and Investment Representation Agreement this 13th day
of May, 2004.


 


 


	
  INVESTOR

  
	
   

  
	
  Thomas
  Crown Investments Limited

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Geraldo C. M. Guimaraes

  	
   

  
	
  Name:

  	
  Geraldo
  C. M. Guimaraes

  	
   

  
	
  Title:

  	
  Director

  	
   

  
	
   

  
	
  Address:

  	
  Unit
  3, 20th Floor, Golden Centre

  
	
   

  	
  188
  Des Voeux Road Central

  
	
   

  	
  Hong
  Kong, China

  
				



 


Agreed
and Accepted:


 


INTAC
INTERNATIONAL, INC.


 


 


	
  By:

  	
  /s/
  Wei Zhou

  	
   

  
	
   

  	
  Wei
  Zhou, Chief Executive Officer