EXHIBIT 99
LETTER OF INTENT
Sept. 2, 1998
Mr. Xxxxx Xx
President
Apex Canadian Holidays Ltd.
000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, X.X.
CANADA, V5Z 1C3
RE: LETTER OF INTENT
Dear Xx. Xx:
This letter sets forth our preliminary understanding concerning the purchase by
Zstar Enterprises, Inc., a Nevada corporation ("Zstar"), of the equity interest
in Apex Canadian Holidays Ltd., a Canadian company ("Apex") (such transaction,
the "Stock Purchase").
The Stock Purchase shall take place on the following general terms:
() Zstar shall acquire, and Apex shall sell, 100% of all the outstanding
and issued equity shares of Apex, for a cash payment of Fifty Thousand
Dollars (US$50,000).
(2) In connection with the Stock Purchase contemplated hereby, Zstar shall
use its commercially reasonable efforts to raise Five Hundred Thousand
Dollars (US$500,000) through a private placement as defined under the
Securities Act of 1933 (the "Private Placement"). The successful completion
of the Private Placement is condition precedent to the consummation of the
Stock Purchase.
(3) Zstar and Apex shall negotiate in good faith with a view to entering
into a definitive stock purchase agreement (the "STOCK PURCHASE AGREEMENT")
providing for the Stock Purchase, which Stock Purchase Agreement shall
contain, among other things and in addition to the other terms of this Letter
of Intent (see Section 8), the following provisions:
(i) Zstar represents and warrants to Apex that (both as of the date of
the Stock Purchase Agreement and of the closing of the Stock
Purchase (the "Closing") unless otherwise specified herein):
(ii) Zstar is a corporation duly organized, existing and in good
standing, under the laws of the State of Nevada.
(iii) As of the Closing, the authorized capital stock of Zstar will
consist of 30,000,000 shares of Common Stock, par value $0.001 per
share, of which 10,500,000 shares will be issued and outstanding
prior to the successful consummation of the Private Placement.
(iv) There are no outstanding subscriptions, warrants, options, calls or
commitments of any character entitling any person or entity to
purchase or otherwise acquire any capital stock or other securities
or other equity interests of Zstar.
(i) Apex represents and warrants to Zstar that (both as of the date of
the Stock Purchase Agreement and of the Closing, unless otherwise
specified herein):
(ii) Apex is a corporation duly organized, existing and in good
standing, under the laws of Canada.
(iii) Except as set forth on its financial statements, to be provided to
Zstar prior to the execution of the Stock Purchase Agreement, or
such as may have arisen in the ordinary course of business, there
are no debts, liabilities or obligations, contingent or otherwise,
of Apex, or otherwise affecting Apex or its assets, which debts,
liabilities or obligations would substantially alter the financial
condition of Apex.
(iv) The financial statements of Apex delivered to Zstar are accurate
and complete, have been prepared in accordance with generally
accepted accounting principles, consistently applied throughout
the period indicated, and fairly present Apex's financial
position, results of operations and cash flow at the respective
dates thereof and for the periods therein indicated.
(v) As of the Closing, the only authorized capital stock of Apex will
consist of 100,000 shares of Common Stock, with no par value per
share, of which 100 shares will be issued and outstanding.
(vi) Other than the Stock Purchase contemplated hereby, there are no
outstanding subscriptions, warrants, options, calls or commitments
of any character entitling any person or entity to purchase or
otherwise acquire any capital stock or other securities or other
equity interests of Apex.
(vii) Since the date of its last financial statement, there have not
been, and during the period between the execution of the Stock
Purchase Agreement and the Closing there will not be, any
material adverse changes in the financial condition affecting
Apex, other than those arising from the ordinary course of
business.
(viii) Except as disclosed to Zstar, Apex has not been involved in any
litigation, government investigation or other government
proceeding and, to the best knowledge of Apex and its existing
shareholders, no litigation, government investigation or other
government proceeding is threatened against Apex.
Apex specializes in the sale of Hotel rooms (retail and wholesale) and
land tour packages throughout Asian and North American markets. Apex
has an established clientele and a website at xxx.xxxxxxxxxxxx.xxx
that will become the portal for users of the Zstar's service. Zstar
plans to use internet software to further develop and enhance Apex's
existing web site; with plans to eventually create a virtual 'shopping
centre" of travel products. Eventually, the Zstar expects to be able
to expand its offerings to include properties in Europe, Australia and
South America.
As a condition precedent to the consummation of the Stock Purchase,
the terms of the definitive Stock Purchase Agreement shall have been
approved by the shareholders of both Zstar and Apex.
The officer of each of Zstar and Apex signing the Stock Purchase
Agreement will be duly authorized by the respective board of directors
of each such company.
The number of (i) persons on Apex's board of directors, and (ii)
officers shall be increased upon consummation of the Stock Purchase
appropriately. At any time prior to the Closing, the parties may, by
written agreement approved by their respective boards of directors,
amend, modify or waive compliance with, any of the conditions,
covenants or provisions of the Stock Purchase Agreement.
The Stock Purchase Agreement and the legal relations between the
parties shall be governed by and construed in accordance with the
internal law of the State of California.
(4) Apex and Zstar agree that all the information received by either of them
in connection with the Stock Purchase, excluding any information which is
generally known to the public or subsequently becomes generally known to the
public in a manner not resulting directly or indirectly from any act or
omission on the part of such party in violation of this paragraph, shall be
deemed to be confidential information, and such confidential information
shall not be disclosed by such party receiving it to any other
person or entity, except to its directors, officers, employees, agents or
affiliates to whom or which disclosure is reasonably necessary and except as
may otherwise be required by any applicable law.
(5) The Closing shall occur on or about May 15, 1999 or as soon as possible
after the completion of the Private Placement.
(6) Except for paragraph 4 above, this Letter of Intent represents an
expression of intent only. Accordingly, neither Zstar nor Apex will be bound
by any terms of this Letter of Intent other than as set forth in the
preceding sentence. Instead, the Stock Purchase Agreement, if and when
executed, will be the binding agreement between the parties. Unless the
Stock Purchase Agreement is entered into, neither party shall be under any
obligation to the other, regardless of any negotiations, agreements or
undertakings between, or actions taken by, any party, except as set forth in
the first sentence of this paragraph.
(7) This Letter of Intent may be signed in multiple counterparts, each of
which shall be deemed to be an original, and all such counterparts shall
constitute but one instrument.
(8) For purposes of construction and interpretation, Zstar and Apex agree
that this Letter of Intent shall be governed by, and construed in accordance
with, the law of the State of Nevada, without regard for the conflict of laws
principles thereof.
If you agree that this letter correctly sets forth our mutual intent, please
so indicate by signing the enclosed copy of this letter and return it to me.
Sincerely,
Zstar Enterprises, Inc.
By: s/ Xxxx Xxxxx Xx By: s/ Xxxxxxx Xxxxx
Xxxx Xxxxx Ho, President Xxxxxxx Xxxxx, Secretary
Agreed and Accepted
this 2nd day of September, 1998
Apex Canadian Holidays Ltd.
By: s/ Xxxxx Xx
Xxxxx Xx, President
