Amendment No. 2
to the
Shareholders Agreement
in respect of
VIP Calling (Hong Kong) Limited
This Amendment No. 2, made between VIP Calling, Inc. and Microworld Limited,
Witnesseth That
WHEREAS VIP Calling, Inc. and Microworld Limited entered into a Shareholders
Agreement dated March 28, 1998, in relation to the joint venture company VIP
Calling (Hong Kong) Limited (the "Shareholders Agreement"); and
WHEREAS VIP Calling, Inc. and Microworld Limited entered into Amendment No. 1 to
the Shareholders Agreement in respect to the extension of the time for making
their contributions in accordance with Article 2 of the Shareholders Agreement;
and
WHEREAS both VIP Calling, Inc. and Microworld Limited have determined that it is
in their mutual interest to make certain further amendments to the Shareholders
Agreement;
NOW THEREFORE, VIP Calling, Inc. and Microworld Limited have agreed to amend the
Shareholders Agreement as follows:
1. Paragraphs 2.1, 2.2, and 2.3 of the Shareholders Agreement are amended to
read as follows:
2.1 The initial authorized capital of the Company shall be the Hong Kong
Dollar equivalent of Xxx Xxxxxxx Xxxxxxxx Xxxxxx Xxxxxx Dollars
(US$100,000) (currently, HK$775,000) represented by Seven Hundred
Seventy-Five Thousand (775,000) shares with par value of One Hong Kong
Dollar (HK$1.00) each. The issued capital shall also be the Hong Kong
Dollar equivalent of Xxx Xxxxxxx Xxxxxxxx Xxxxxx Xxxxxx Dollars
(US$100,000) and no shares may be issued until fully paid.
2.2 The capital structure of the Company shall be as follows:
Name of Party No. of Shares Amount (US$) Percentage Ownership
------------- ------------- ------------ --------------------
VIP Calling 395,250 US$51,000 51%
(Of which Xxxx Xxxxxx owns 1 share)
Microworld 379,750 US$49,000 49%
2.3 The Parties shall make their contributions as set forth in Paragraph
2.2 on or before November 15, 1998 or such other date as the Parties may
agree in writing. The failure of a Party to make the full contribution
amount within such time period shall constitute a material breach of this
Agreement by such Party. Once these contributions are made, the Parties
shall have no obligation to make any additional contributions to the
capital of the Company.
2. In the last sentence of each of Paragraphs 6.1, 6.2, 6.3 and 6.4 of the
Shareholders Agreement, the language "during 12-month period from which this
Agreement is signed" is deleted and replaced with "during the 12-month period
from the time both Parties have made their contributions to the Company as set
forth in Paragraph 2.2."
3. Sub-paragraph 7.2 (a) of the Shareholders Agreement is amended to read as
follows:
(a) either of the Parties withdraws from this Agreement in accordance
with Paragraph 7.1 above, and such termination of this Agreement
shall take effect
(i) on the date the share purchase takes effect, in the event
the non-withdrawing Party opts to purchase the withdrawing
Party's shares, or
(ii) thirty (30) days from the date of receipt by the
non-withdrawing Party of the written notification of
withdrawal, in the event the non-withdrawing Party does not
opt to purchase the withdrawing Party's shares;
4. Sub-paragraph 7.2(c) of the Shareholders Agreement is amended to read as
follows:
(c) one Party elects to terminate this Agreement upon the liquidation,
bankruptcy or insolvency of the other Party, and such termination of
this Agreement shall take effect
(i) on the date the share purchase takes effect, in the event
that the terminating Party opts to purchase the shares owned
by the liquidated, bankrupt or insolvent Party pursuant to
Paragraph 7.4, or
(ii) thirty (30) days from the date of receipt by the
liquidated, bankrupt or insolvent Party of the written
notification of termination, in the event that the terminating
Party does not opt to purchase the shares owned by the
liquidated, bankrupt or insolvent Party; or
5. A new Paragraph 7.4 is added to the Shareholders Agreement, immediately
following the last sentence in existing Paragraph 7.3. New Paragraph 7.4
is to read as follows:
7.4 Upon the liquidation, bankruptcy or insolvency of either Party, the
other Party shall have the option to purchase the Company shares owned by
the liquidated, bankrupt or insolvent Party at a price equal to four (4)
times the gross sales of the Company (in United States dollars) in the
last-completed fiscal quarter multiplied by the percentage equity
ownership of the Company held by the liquidated, bankrupt or insolvent
Party. The Party opting to purchase the liquidated, bankrupt, or insolvent
Party's shares under this paragraph shall provide written notification of
the exercise of such option to the liquidated, bankrupt or insolvent Party
in accordance with Article 13 within thirty (30) days from the date it
becomes aware of such liquidation, bankruptcy or insolvency and must make
payment by thirty (30) days thereafter or by such other date as the
Parties may agree.
6. The text of Article 8 of the Shareholders Agreement is amended to read as
follows:
Upon termination of this Agreement for any reason other than:
(a) withdrawal under Subparagraph 7.2(a) when the non-withdrawing
Party elects to purchase the shares of the Company owned by
the withdrawing Party,
(b) termination under Subparagraph 7.2(c) when the terminating
Party elects to purchase the shares of the Company owned by
the liquidated, bankrupt or insolvent Party, or
(c) in accordance with Subparagraph 7.2(d),
the Company shall be dissolved and wound up pursuant to the applicable
provisions of the laws of Hong Kong.
7. This Amendment No. 2 is made in accordance with Paragraph 17.3 of the
Shareholders Agreement and shall be effective as soon as both VIP Calling,
Inc. and Microworld Limited have signed below. Except as modified herein,
all other provisions of the Shareholders Agreement shall remain as written
and agreed.
IN WITNESS WHEREOF, VIP Calling, Inc. and Microworld Limited have executed this
Amendment No. 2 on the dates as indicated below.
For and on Behalf of VIP Calling, Inc. For and on Behalf of Microworld Limited
/s/ Xxxx Xxxxxx /s/ Xxxxxx Xxxx
-------------------------------- --------------------------------
By: XXXX XXXXXX By XXXXXX XXXX
-------------------------- --------------------------
Date: Date:
-------------------------- --------------------------