EXHIBIT 10.15
Dated: The 11th day of February, 2000
POPSTAR COMMUNICATIONS, INC.
and
iTELEWAY INC.
AGREEMENT
for Subscription of Shares
of
POPstar Communications, Inc.
XXXXXXX XXXXXXXX & XXXXXXXX
In Association with Xxxx & Ng
8th Floor, Aon China Building
00 Xxxxxx Xxxx Xxxxxxx
Xxxx Xxxx
SHARE SUBSCRIPTION AGREEMENT
POPstar Communications, Inc.
THIS SHARE SUBSCRIPTION AGREEMENT is dated the 11th day of February, 2000.
B E T W E E N:
(1) POPSTAR COMMUNICATIONS, INC., a corporation incorporated under the laws of
the State of Nevada, the United States of America whose principal office
address is located at 000 Xxxx 0xx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx,
Xxxxxx (the "Company");
and
(2) iTELEWAY INC., a corporation incorporated under the laws of the British
Virgin Islands whose registered address is Sea Meadow House, Blackburne
Highway, Road Town, Tortola, the British Virgin Islands (the "Investor");
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Shares.
1.1 Sale and Issuance of Restricted Common Shares. Subject to the terms and
conditions of this Agreement, the Investor agrees to purchase at the
Closing (as defined in Section 2.1) and the Company agrees to sell and
issue to the Investor at the Closing 750,000 shares of common stock of the
Company at a price per share of US$2.00 (the "Shares").
1.2 Option. As further consideration for the aggregate amount paid to the
Company pursuant to Section 1.1, the Company hereby grants to the Investor,
or its permitted assigns or transferees, an option to purchase from the
Company at any time prior to the date which is three months subsequent the
date on which the Company's shares are relisted and/or quoted on the OTC
Bulletin Board ("OTCBB"), subject to prior termination in accordance with
Section 8.2, 750,000 Shares (such underlying shares, as increased or
decreased in accordance herewith, are hereinafter referred to collectively
as the "Option Stock"). Such option will be exercisable from time to time,
in whole or in part, for a price per Share set forth in the immediately
preceding
Section 1.1 (as modified from time to time in accordance herewith, the
"Exercise Price"). Such option shall be assignable by the Investor without
restriction (except for applicable securities laws). The Investor may
exercise its option by the delivery of written notice to the Company. The
Company will issue the Shares that are the subject of the option, and the
Investor will pay the price therefor to the Company in cash, on the third
(3rd) business day following any exercise of the option. Prior to an
exercise of the option granted it pursuant to this Section 1.2, the
Investor shall not have any rights or obligations as a shareholder
hereunder with respect to the Option Stock (the rights as a holder of the
Shares acquired pursuant to Section 1.1 being unaffected).
1.3 Anti-Dilution. With respect to the option described in Section 1.2 and the
rights of the Investor in connection therewith:
(a) Subdivision and Combination.
(i) In case the Company shall at any time subdivide or combine
the outstanding Shares, the Exercise Price shall forthwith
be proportionately decreased in the case of subdivision or
increased in the case of combination. Such (combination)
subdivision may consist of (reverse) stock splits, stock
dividends, reclassifications or any other comparable
transaction by which Shares or other capital stock are
(combined into a smaller number of shares or) issued to
holders of such Shares or other capital stock by virtue of
such share ownership.
(ii) Upon each adjustment of the Exercise Price pursuant to the
provisions of this Section 1.3, the number of shares of
Option Stock issuable upon the exercise at the adjusted
exercise price of the Investor's option shall be adjusted to
the nearest whole number of shares by multiplying the number
of shares of Option Stock issuable upon exercise of such
option prior to the adjustment by a fraction, the numerator
of which is the Exercise Price in effect immediately prior
to such adjustment and the denominator of which is the
adjusted Exercise Price.
(iii) For the purpose of this Section 1.3, the term "Shares "
shall mean (i) the Shares as defined in the recitals hereto,
or (ii) any other class of stock resulting from successive
changes or reclassifications of such Shares consisting
solely of changes in par value, or from par value to no par
value, or from no par value to par value.
(b) Merger or Consolidation. In case of any consolidation of the Company
with, or merger of the Company with or into, another corporation
(other than a consolidation or merger which does not result in any
reclassification or change of the outstanding Shares), the entity
formed by such consolidation or merger shall execute and deliver to
the Investor a supplemental option providing that the Investor shall
have the right thereafter (until the expiration of such option) to
receive, upon exercise of such option, the kind and amount of shares
of stock and other securities and property receivable upon such
consolidation or merger, by a holder of the number of shares of Option
Stock of the Company for which such option might have been exercised
immediately prior to such consolidation, merger, sale or transfer.
Such supplemental option shall
-2-
provide for adjustments which shall be identical to the adjustments
provided above. The above provision of this subsection shall similarly
apply to successive consolidations or mergers.
(c) Notices of Adjustments. After each adjustment of the Exercise Price or
the number of Shares issuable upon exercise of any of the
aforementioned option pursuant to this Section 1.3, the Company will
promptly (but in all cases within seven (7) days) prepare a notice to
the Investor setting forth: (i) the Exercise Price, as so adjusted,
(ii) the number of shares of Option Stock purchasable upon exercise of
the option after such adjustment, and (iii) a brief statement of the
facts accounting for such adjustment. The Company will cause such
notice to be sent by overnight courier to the Investor at his last
address as it shall appear on the registry books of the Company.
2. The Closing.
2.1 Closing. The closing of the purchase and sale of the Shares (the "Closing")
shall take place at 000 Xxxx 0xx Xxxxxx, Xxxxxxxxx, XX, X0X 0X0, Xxxxxx no
later than the close of business (Vancouver time) on February 18, 2000 or
at such other time, date and place as the Company and the Investor mutually
agree upon orally or in writing (the "Closing Date").
2.2 Deliveries by the Company. At the Closing, the Company shall deliver to the
Investor a certificate or certificates representing 750,000 Shares against
payment of the aggregate purchase price of US$1,500,000 therefor by
certified cheque, irrevocable wire transfer or any combination thereof.
2.3 Deliveries by the Investor. At the Closing, the Investor shall deliver a
certified cheque or such evidence of irrevocable wire transfer reasonably
satisfactory to the Company.
3. Representations and Warranties of the Company.
The Company hereby represents and warrants to the Investor, as
representations and warranties that will be true and correct as of the
Closing Date:
3.1. Organization, Good Standing and Qualification. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Nevada with full corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder. The
execution, delivery and performance of this Agreement have been duly
authorized by all necessary corporate action of the Company and this
Agreement constitutes a valid and binding obligation of the Company,
enforceable against it in accordance with its terms.
3.2. Capitalization. The authorized capital stock of the Company consists of
50,000,000 shares of common stock, par value US$0.001 per share, and no
shares of preferred stock. As of the date of this Agreement, the Company
has 18,547,500 shares of common stock issued and outstanding. No shares
have otherwise been registered under state or federal securities laws. As
of the Closing Date, all of the issued and outstanding shares of common
stock of the Company are validly issued, fully paid and
-3-
non-assessable. Except with respect to the Shares and Option Stock which
are the subject of this Agreement, the employee stock options for an
aggregate of 757,500 common shares having an average strike price of
US$0.389 per employee option share, an aggregate of up to 3,000,000
restricted common shares reserved to be issued pursuant to certain Investor
Exchange Agreements all dated July 13, 1999, 750,000 restricted common
shares and up to 750,000 option stock to be issued to Prime Star Asia
Limited pursuant to a share subscription agreement dated February 11, 2000
and an aggregate of up to 1,500,000 option stock issued to xxxxxxxx.xxx
(BVI) Limited (and/or its assignee), as of the Closing Date there will not
be outstanding any other warrants, options or other agreements on the part
of the Company obligating the Company to issue any additional Shares or any
of its securities of any kind. Save for the above, the Company will not
issue any shares of capital stock from the date of this Agreement through
the Closing Date.
3.3. Subsidiaries. Except as described in Exhibit B, the Company does not
presently own or control, directly or indirectly, any interest in any other
corporation, association, or other business entity. Except as disclosed in
Exhibit C, the Company is not a participant in any joint venture,
partnership, or similar arrangement.
3.4. Authorization. All corporate action on the part of the Company, its
officers and directors necessary for the authorization, execution and
delivery of this Agreement, and the performance of all obligations of the
Company hereunder and thereunder, and the authorization, issuance, sale and
delivery of the Shares being sold hereunder has been taken or will be taken
prior to the Closing Date, and this Agreement constitutes valid and legally
binding obligations of the Company, enforceable in accordance with its
terms.
3.5. Ownership of Shares. The delivery of certificates to the Investor will
result in the Investor's immediate acquisition of record and beneficial
ownership of the Shares, free and clear of all encumbrances other than
restrictions on transfer imposed by Federal and State securities laws. Save
as disclosed herein, there are no outstanding warrants, options, rights
(pre-emptive, conversion or otherwise), agreements or commitments of any
kind relating to the issuance, sale or transfer of any equity securities or
other securities of the Company.
3.6 Litigation. There is no action, suit, proceeding or investigation of which
the Company has notice pending or, to the best of the Company's knowledge,
currently threatened before any court, administrative agency or other
governmental body against the Company which questions the validity of this
Agreement or the right of the Company to enter hereinto, or to consummate
the transactions contemplated hereby, or which could result, either
individually or in the aggregate, in any material adverse change in the
condition (financial or otherwise), business, property, assets or
liabilities of the Company, nor is the Company aware that there is any
basis for the foregoing. The foregoing includes, without limitation,
actions, suits, proceedings or investigations pending or, to the best of
the Company's knowledge, threatened involving the prior employment of any
of the Company's employees, their use in connection with the Company's
business of any information or techniques allegedly proprietary to any of
their former employers, or their obligations under any agreements with
prior employers. Except as disclosed in writing to the Investor, to the
best of the Company's knowledge, the Company is not a party or subject to,
and
-4-
none of its assets is bound by, the provisions of any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality which materially adversely affects the condition (financial
or otherwise), business, property, assets or liabilities of the Company.
Except as disclosed in writing to the Investor, there is no action, suit or
proceeding initiated by the Company currently pending or that the Company
intends to initiate.
3.7. Title to Property and Assets. The Company has good and marketable title to
all of its properties and assets free and clear of all mortgages, liens and
encumbrances, except liens for current taxes and assessments not yet due
for which adequate reserves have been set aside and that do not, in any
case, individually or in the aggregate, materially detract from the value
of the property subject thereto or materially impair the operations of the
Company or security interests or encumbrances disclosed to the Investor.
All liens and encumbrances affecting the Company's assets are summarized in
Exhibit D hereto, which is hereby incorporated by reference. With respect
to the property and assets it leases, the Company is in compliance with
such leases and, to the best of the Company's knowledge, holds a valid
leasehold interest free of all liens, claims or encumbrances. The Company's
properties and assets and the properties and assets leased by the Company
are in good condition and repair in all material respects, reasonable wear
and tear excepted.
3.8. Brokers or Finders. The Company has not agreed to incur, directly or
indirectly, any liability for brokerage or finders' fees, agents'
commissions or other similar charges in connection with this Agreement or
any of the transactions contemplated hereby.
3.9. Meaning of Company's Knowledge. Where used herein, the expression
"Company's knowledge" means information that is within the actual knowledge
of the directors or officers of the Company after due and careful enquiry,
acting in their capacity as such in the course of their activities, duties
and responsibilities on behalf of the Company.
3.10.U.S. and other Applicable Securities Representations. The Company has
taken all necessary procedural steps and measures to offer its securities
only to "accredited investors" (as defined in Section 501(a) of Regulation
D under the U.S. Securities Act of 1933, as amended, hereinafter the
"Securities Act") or to persons that are not "U.S. persons" (as defined in
Regulation S under the Securities Act), and to otherwise ensure that the
offering of the Shares to the Investor (and to all other persons whose
purchases of Shares may be integrated with the Investor's purchase
hereunder) is exempt from the registration requirements under the
Securities Act and from all other applicable securities laws, including
without limitation the laws of the Province of British Columbia.
3.11.Books of Account Accurate. The books of account and financial records of
the Company accurately and correctly set out and disclose, in all material
respects, the current financial position of the business of the Company and
all transactions of or relating to therein have been accurately recorded in
such books and records.
0.00.Xx Undisclosed Liabilities. The Company has not been nor is now subject to
any liabilities or obligations, direct, indirect or contingent (including,
without limitation, any outstanding guarantees) other than those disclosed
in this Agreement and those arising in the ordinary course of business
(none of which, on an individual basis,
-5-
exceed US$25,000.00).
0.00.Xx Guarantees. Neither the Company nor its subsidiaries has guaranteed or
otherwise given security for or agreed to guarantee or give security for
any liability, debt or obligation of any person, firm or corporation.
0.00.Xx Union. The Company has not made any arrangements with any labour union
or employee association or made commitments to or conducted any
negotiations with any union or employee association with respect to any
future agreements and is not aware of any current attempts to organise or
establish any labour union or employee association relating to the business
of the Company.
3.15.Material Contracts. Save as disclosed in Exhibit E, the Company is not a
party to or bound by any contracts, agreements, arrangements, leases or
other documents (oral or written) other than those entered into in the
ordinary course of business or which involve a costs, expenditure or
liability of less than US$25,000.00 for each such contract or document.
3.16.Income and Other Taxes. The Company has duly filed on a timely basis all
tax returns required to be filed by them in connection with the business of
the Company and have paid all taxes that are due and payable and all
assessments, reassessments, governmental charges, penalties, interest and
fines due and payable by them. The Company has made adequate provision for
taxes payable in respect of the business of the Company for the current
fiscal period and any previous periods for which tax returns are not yet
required to be filed. The Company has withheld from each payment made to
any of its past or present employees, officers or directors, with respect
to the business, the amounts of all taxes and other deductions required to
be withheld therefrom and has paid the same to the proper tax or other
receiving authorities or officers within the time required under any
applicable legislation.
0.00.Xxxxxxxxx Statements. The Company has delivered to the Investor
consolidated balance sheets of the Company and its subsidiaries as at
December 31, 1999, and statements of income and changes in financial
position for the twelve-month period then ended. Such financial statements
are internally prepared and unaudited but fairly present the consolidated
financial condition and results of operations of the Company and its
subsidiaries as at the respective dates thereof and for the periods therein
referred to, all in accordance with generally accepted United Stated
accounting principles consistently applied throughout the periods involved,
except as set forth in the notes thereto.
0.00.Xx Material Adverse Change. Since the date of the Company's financial
statements, being December 31, 1999, there has not been any material
adverse change in the business or financial condition of the Company and
its subsidiaries taken as a whole.
3.19.Transactions with Directors and Officers. Except as disclosed in Exhibit
F, the Company and its subsidiaries do not engage in business with any
person in which any of the Company's directors or officers has a material
equity interest. No director or officer of the Company owns any property,
asset or right which is material to the business of the Company and its
subsidiaries, taken as a whole.
-6-
3.20.Borrowing and Guarantee. Save as disclosed herein, the Company and its
subsidiaries (a) do not have any indebtedness for borrowed money, (b) are
not lending or committed to lend any money (except for advances to
employees in the ordinary course of business).
4. Representations and Warranties of the Investor.
The Investor hereby represents and warrants, as representations and
warranties that will be true and correct as of the date of this Agreement
and will be true and correct as of the Closing Date, that:
4.1 No Qualification. The Investor understands and acknowledges that (i) none
of the Shares have been qualified by a prospectus or registration statement
or otherwise qualified for sale under the securities laws of any
jurisdiction; (ii) absent an exemption from registration or prospectus
requirements of applicable Federal and State securities laws of the United
States of America, the issuance and sale of the Shares would require the
involvement of a registered dealer and the filing of a prospectus and
registration statement (if applicable); (iii) the Company is and will be
issuing such securities in reliance upon exemptions from the registration
and prospectus requirements of such securities laws; and (iv) the
availability of such exemptions depends upon, among other things, the
Investor's representations, warranties and agreements contained in this
Agreement, including, without limitation, the bona fide nature of the
investment intent as expressed herein. The Investor further understands and
acknowledges that the Company, subject to its obligations under Section 8
hereof, is under no obligation to register or qualify the Shares under any
applicable securities law, or to comply with any exemptions under any
applicable securities law in connection with any resale of such Shares.
4.2 No Regulatory Review. The Investor understands and acknowledges that no
securities commission or similar regulatory authority has made any finding
or determination regarding the fairness of the offer, sale or issuance of
the securities described herein, has made any recommendation or endorsement
of the offer and sale of the securities described herein or has reviewed or
passed in any way upon this Agreement or upon the merits of the securities
described herein.
4.3 Investment. The Investor is acquiring the Shares as principal, for
investment purposes only, for Investor's own account and not with the view
to or for resale.
4.4 Speculative Investment. The Investor is aware that the acquisition of the
securities herein is a speculative investment involving a high degree of
risk and that there is no guarantee that the Investor will realize any gain
from an investment in such securities. The Investor further understands
that it could lose the entire amount of the Investor's investment herein.
The Investor is financially able to bear the economic risk of an investment
in the securities described herein, including the ability to hold such
securities indefinitely and to afford a complete loss of the Investor's
investment in such securities.
4.5 Resale Restrictions. The Investor acknowledges that it's rights to transfer
the Shares will be restricted, including restrictions under applicable
securities laws, and that the
-7-
Investor has been independently advised as to such restrictions, and,
without limiting the generality of the foregoing, the fact that the
Investor will not be able to trade in such securities except where an
exemption is available under relevant securities laws and the Investor
understands such restrictions. The Investor covenants that it will not
sell, transfer or otherwise dispose of the Shares except in compliance with
all applicable securities laws. In connection therewith, the Investor
acknowledges that the Company may make a notation on its share registers
and records regarding the restrictions on transfers set forth in this
Section 4.5 and will transfer securities on the books of the Company only
to the extent not inconsistent therewith.
4.6 No Advertising. The offering and sale of the Shares were not made through
an advertisement of the securities in the printed media of general and
regular unpaid circulation, radio or television or any other form of
advertisement or as part of a general solicitation. The Investor
acknowledges that the information received by it does not, individually or
collectively, constitute an offering memorandum or similar document
describing the business or affairs of the Company which has been, or
appears or purports to have been, prepared for delivery to, and review by,
prospective purchasers in order to assist them in making an investment
decision in respect of securities of the Company; provided, however, that
nothing contained in this sentence shall be construed as an acknowledgement
of any kind that the Investor has not relied on the accuracy of such
information.
4.7 Brokers or Finders. No finder, broker, agent, financial advisor or other
intermediary has acted on behalf of the Investor in connection with the
transactions contemplated by this Agreement.
4.8 Authorization. This Agreement when executed and delivered by the Investor
will constitute a valid and legally binding obligation of the Investor,
enforceable in accordance with its terms.
4.9 Accredited Investors. The Investor acknowledges that it has read and is
familiar with and understands Rule 501 of Regulation D under the Securities
Act. The Investor acknowledges that it is an "accredited investor" as
defined in Rule 501(a) of Regulation D under the Securities Act and has the
financial means and the business, financial and investment experience and
acumen to evaluate the merits and risks of this investment, to conduct such
investigations as is considered appropriate and to bear the risk inherent
in this investment.
4.10 Certificate Legending. The certificates evidencing the Shares may contain a
legend similar to the following or substantially as follows:
THE SHARE OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT
BE SOLD OR OTHERWISE TRANSFERRED UNLESS A COMPLIANCE WITH THE
REGISTRATION PROVISIONS OF SUCH ACT HAS BEEN MADE, OR UNLESS
AVAILABILITY OF AN EXEMPTION FROM SUCH REGISTRATION PROVISIONS HAS
BEEN ESTABLISHED, OR UNLESS SOLD PURSUANT TO RULE 144 UNDER THE
SECURITIES ACT OF 1933.
4.11 No Representation. Other than as set forth herein and those included in the
-8-
documents to be delivered with the Closing contemplated hereby, the
Investor acknowledges that it has not received and will not receive any
representations or warranties from the Company or any of its affiliates or
any of its employees or agents in making an investment decision related to
the acquisition of the securities described herein.
5. Conditions of Investor's Obligations at the Closing.
The obligations of the Investor to complete the transaction contemplated by
this Agreement are subject to the fulfillment on or before the time of
closing on the Closing Date of each of the following conditions, the waiver
of which shall not be effective against the Investor if the Investor does
not consent in writing thereto:
5.1 Representations and Warranties. The representations and warranties of the
Company contained in Section 3 shall be true on and as of the time of
Closing with the same effect as though such representations and warranties
had been made on and as of the Closing Date.
5.2 Performance. The Company shall have performed and complied with all
agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing.
6. Conditions of the Company's Obligations at the Closing.
The obligations of the Company to complete the transactions contemplated by
this Agreement are subject to the fulfillment on or before the time of
closing on the Closing Date of each of the following conditions:
6.1 Representations and Warranties. The representations and warranties of the
Investor contained in Section 4 shall be true on and as of the time of
Closing with the same effect as though such representations and warranties
had been made on and as of the Closing Date.
6.2 Payment of Purchase Price. The Investor shall have paid the purchase price
specified in Section 2.1 payable at such Closing against delivery of a
certificate or certificates representing the Shares issuable at such
Closing.
6.3 Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated at the Closing hereby, and
all documents and instruments incidental to these transactions, shall be
reasonably satisfactory in substance to the Company.
7. Miscellaneous.
7.1 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada, the United States of
America, without regard to any provisions thereof relating to conflicts of
laws principles thereof.
7.2 Survival. The representations, warranties, covenants and agreements made
herein
-9-
shall survive any investigation made by the Company or the Investor and the
closing of the transactions contemplated hereby.
7.3 Successors and Assigns. Except as otherwise provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors,
assigns, heirs, executors and administrators of the parties hereto;
provided, however, that the rights of the Investor to purchase Shares shall
not be assignable without the consent of the Company.
7.4 Entire Agreement; Amendment. This Agreement and the other documents
delivered pursuant hereto or contemplated hereby constitute the full and
entire understanding and agreement among the parties with regard to the
subjects hereof and thereof. Neither this Agreement nor any term hereof may
be amended, waived, discharged or terminated other than by a written
instrument signed by the party against whom enforcement of any such
amendment, waiver, discharge or termination is sought.
7.5 Notices, Etc. All notices and other communications required or permitted
hereunder, shall be in writing and shall be personally delivered, sent by
facsimile, or delivered by a nationally recognized overnight courier,
addressed (a) if to the Investor, at the Investor's address or facsimile
number set forth in Exhibit A, or at such other address or facsimile number
as the Investor shall have furnished to the Company in writing, or (b) if
to the Company, at its address or facsimile number set forth in Exhibit A,
or at such other address or facsimile number as the Company shall have
furnished to the Investor. Any such notice or communication shall be deemed
to have been received (A) in the case of personal delivery or delivery by
telecopier, on the date of such delivery, and (B) in the case of a
nationally-recognized overnight courier, on the next business day after the
date when sent.
7.6 Delays or Omissions. No delay or omission to exercise any right, power or
remedy accruing to any holder of any Shares upon any breach or default of
the Company under this Agreement shall impair any such right, power or
remedy of such holder, nor shall it be construed to be a waiver of any such
breach or default, or an acquiescence therein, or of or in any similar
breach or default thereafter occurring; nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. Any waiver, permit, consent or
approval of any kind or character on the part of any holder of any breach
or default under this Agreement, or any waiver on the part of any holder of
any provisions or conditions of this Agreement, must be in writing and
shall be effective only to the extent specifically set forth in such
writing or as provided in this Agreement. All remedies, either under this
Agreement or by law or otherwise afforded to any holder, shall be
cumulative and not alternative.
7.7 NO QUALIFICATION. THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT
HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY OTHER COUNTRY, STATE OR PROVINCE, IN
RELIANCE UPON CERTAIN EXEMPTIONS FORM SUCH QUALIFICATION OR REGISTRATION TO
THE EXTENT APPLICABLE. ANY REPRESENTATION TO THE CONTRARY IS AN OFFENSE. AS
A RESULT, THIS OFFERING WILL NOT BE REVIEWED OR APPROVED BY THE U.S.
SECURITIES AND EXCHANGE
-10-
COMMISSION OR ANY OTHER SECURITIES REGULATORY AGENCY.
7.8 Expenses. The Company and the Investor shall bear its own expenses and
legal fees incurred on its behalf with respect to this Agreement and the
transactions contemplated hereby.
7.9 Counterparts. This Agreement may be executed in any number of counterparts
(including by facsimile), each of which shall be enforceable against the
parties actually executing such counterparts, and all of which together
shall constitute one instrument.
7.10 Severability. In the event that any provision of this Agreement becomes or
is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and
effect without said provision; provided that no such severability shall be
effective if it materially changes the economic benefit of this Agreement
to any party.
7.11 Currency. All references to money in this Agreement and the Exhibits
hereto, except where otherwise indicated, are to amounts in lawful currency
of the United States of America.
7.12 Amendments to Comply. The parties will execute such documents and
instruments as they may each approve, acting reasonably, in order to amend
this Agreement to the extent necessary to ensure that the provisions of
this Agreement will comply with the law of the State of Nevada.
7.13 Public Announcements. The parties will make such public announcements with
respect to the transactions contemplated herein as are (a) required by
applicable law (provided that the parties consult with each other in
preparation thereof) or (b) as may be agreed to by the parties from time to
time.
8. Registration.
8.1 Quoting on OTCBB. The Company covenants that its shares will be relisted
and/or be quoted on the OTCBB within the end of the forty-five (45) days
subsequent to the date of this Agreement, all parties hereby acknowledging
that there will be no grace period for any defaults in relation to this
covenant.
8.2 Breach or Default. If the Company should be in breach under its obligation
in Section 8.1 above, the Company shall repurchase the Shares from the
Investor for the same amount of consideration that was paid by the Investor
to the Company for such Shares. The Investor shall return any instruments
evidencing the Option Stock issued pursuant to Section 1.2, marked as
"Cancelled" and do all such things and execute all such documents and
instruments as are necessary or reasonably requested by the Company to
indicate that its rights under Section 1.2 hereof are terminated.
8.3 Spending Restriction. The Company hereby covenants and agrees that until
such date that is the earlier of (a) the date on which its shares are
relisted and/or are quoted on the OTCBB as provided in Section 8.1 hereof
and (b) 45 days from the date hereof, the Company shall spend a maximum of
US$62,500 of the aggregate purchase price
-11-
payable pursuant to Section 2.1 hereof by the Investor.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
POPSTAR COMMUNICATIONS, INC.
By: /s/ Xxxx XxXxxxxxx
---------------------------------
Xxxx XxXxxxxxx
President
---------------------------------
Title
iTELEWAY INC.
By: /s/ Xxxx Xxx On
---------------------------------
President
---------------------------------
Title
For and on behalf of
iTeleway Inc.
/s/ [illegible]
--------------------------------
Authorized Signature(s)
-12-
EXHIBIT A
NOTICES (Section 8.5)
THE INVESTOR
Name of Investor: iTELEWAY Inc.
Address: Room 802, Tower I
Xxxxxxx Xxxxxx, 0 Xxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
Xxxx Xxxx
Telephone No: (000) 0000-0000
Facsimile No: (000) 0000-0000
Attention: Xx. Xxxx Xxxx Xxxxx
THE COMPANY
Name of the Company: POPstar Communications, Inc.
Address: 000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, XX X0X 0X0
Xxxxxx
Telephone No: (000) 000-0000
Facsimile No: (000) 000-0000
EXHIBIT B
SUBSIDIARIES
(Section 3.3)
The following is the only subsidiary of the Company:
POPstar Global Communications Inc. ("POPstar-BVI")
(wholly-owned)
Form of legal entity: International Business Company, limited liability
Place of incorporation: The British Virgin Islands
Date of incorporation: December 17, 1998
The following are the only subsidiaries of POPstar-BVI:
POPstar Communications Asia Pacific Limited
(wholly-owned)
Form of legal entity: Limited liability company
Place of incorporation: Hong Kong
Date of incorporation: June 20, 1991
Former name: Echelon International Limited
Date of name change: June 2, 0000
XXXxxxx Xxxxxxxxxxxxxx Xxxxxx Corp.
(wholly-owned)
Form of legal entity: Unlimited liability company
Place of incorporation: The Province of Nova Scotia, Canada
Date of incorporation: September 17, 1999
-1-
EXHIBIT C
JOINT VENTURES, PARTNERSHIP OR SIMILAR ARRANGEMENT ENTERED
INTO BY THE COMPANY
(Section 3.3)
Nil.
-1-
EXHIBIT D
LIENS AND ENCUMBRANCES AFFECTING COMPANY ASSETS
(Section 3.2)
Nil.
-1-
EXHIBIT E
MATERIAL CONTRACTS
(Section 3.15)
1. Licensing Agreement dated January 11, 1999 between POPstar-BVI and TGI
Technologies Ltd. ("TGI")
2. Services Agreement dated January 11, 1999 between POPstar-BVI and TGI.
3. Assignment of Trademark dated January 11, 1999 by TGI in favour of
POPstar-BVI.
4. Preferred Share Purchase Agreement dated January 12, 1999 between
POPstar-BVI and KECH.
5. Preferred Share Purchase Agreement dated January 12, 1999 between
POPstar-BVI and Sunfield.
6. Preferred Share Purchase Agreement dated January 12, 1999 between
POPstar-BVI and Uprising.
7. Preferred Share Purchase Agreement dated January 12, 1999 between
POPstar-BVI and Golden Harvest.
8. Supplemental Preferred Share Purchase Agreement dated March 29, 1999
between POPstar-BVI and KECH.
9. Supplemental Preferred Share Purchase Agreement dated March 29, 1999
between POPstar-BVI and Sunfield.
10. Supplemental Preferred Share Purchase Agreement dated March 29, 1999
between POPstar-BVI and Uprising.
11. Supplemental Preferred Share Purchase Agreement dated March 29, 1999
between POPstar-BVI and Golden Harvest.
12. Promissory Note (in the amount of US$1,000,000) dated March 30, 1999 by TGI
in favour of POPstar-BVI.
13. Legal Retainer Agreement dated April 29, 1999 between POPstar-BVI and the
Law Offices of M. Xxxxxxx Xxxxxx regarding securities laws services and
issue of restricted common shares in lieu of portion of fees.
14. Investor Relations Agreement dated May 1, 1999 between POPstar-BVI and The
Xxxxxxxxx Group, Inc. regarding the provision by the latter party of
investor relations services to POPstar-BVI.
15. Further Supplemental Agreement dated May 1, 1999 between POPstar-BVI and
-1-
Sunfield.
16. Acquisition Agreement dated July 13, 1999 between the Company and
POPstar-BVI.
17. Investor Exchange Agreement dated July 13, 1999 between the Company and
KECH.
18. Investor Exchange Agreement dated July 13, 1999 between the Company and
Sunfield.
19. Investor Exchange Agreement dated July 13, 1999 between the Company and
Uprising.
20. Investor Exchange Agreement dated July 13, 1999 between the Company and
Golden Harvest.
21. Share Purchase Agreement dated July 16, 1999 between the Company and Xxxxxx
Xxxxxx (100,000 restricted common shares).
22. Share Purchase Agreement dated July 20, 1999 between the Company and Xxxxxx
Xxxxxxx (10,000 restricted common shares).
23. Share Purchase Agreement dated July 20, 1999 between the Company and Xxxxxx
Xxxx (10,000 restricted common shares).
24. Share Purchase Agreement dated July 20, 1999 between the Company and Xxxxxx
Xxxxxxx (5,000 restricted common shares).
25. Amendment Agreement dated August 24, 1999 between the Company and Sunfield.
26. Amendment to Licensing Agreement dated August 24, 1999 between POPstar-BVI
and TGI.
27. Amendment to Services Agreement dated August 24, 1999 between POPstar-BVI
and TGI.
28. Share Subscription Agreement dated February 2, 2000 between the Company and
xxxxxxxx.xxx (BVI) Limited ("netalone") (1,500,000 restricted common shares
and option for up to another 1,500,000 restricted common shares).
29. Set Off Agreement dated February 2, 2000 between the Company, POPstar-BVI,
TGI and netalone.
30. Nominee Directors Agreement dated February 2, 2000 between the Company,
KECH, netalone, the trustee of the Xxxxxxxx Xxx Family Trust and the
trustee of the Xxxx XxXxxxxxx Family Trust.
31. Termination Agreement dated February 2, 2000 between the Company,
POPstar-BVI, KECH, Sunfield, Uprising, Golden Harvest, the trustee of the
Xxxxxxxx Xxx Family Trust and the trustee of the Xxxx XxXxxxxxx Family
Trust.
-2-
32. Assignment Agreement dated February 9, 2000 between the Company, netalone,
Rich Income International Limited, TGI, POPstar-BVI, KECH, the trustee of
the Xxxxxxxx Xxx Family Trust and the trustee of the Xxxx XxXxxxxxx Family
Trust.
33. Share Subscription Agreement dated February 11, 2000 between the Company
and Prime Star Asia Limited (750,000 restricted common shares and option
for up to another 750,000 restricted common shares).
-3-
EXHIBIT F
TRANSACTIONS WITH DIRECTORS AND OFFICERS
(Section 3.19)
1. Material Xxxxxxxxx xxxxxxx 0, 0, 0, 0, 0, 00, 00, 00, 26, 27, 29, 30, 31
and 32 listed in Exhibit E to this Agreement are also applicable to this
Exhibit F.
2. Employment agreements, all dated July 20, 1999, between the Company and
each of Xxxx XxXxxxxxx, Xxxxxxxx Xxx and Xxx Xxx.
3. On December 17, 1998, the Company's wholly-owned subsidiary, POPstar-BVI,
entered into an oral month to month lease for the lease of approximately
4,800 square feet of administrative space located at 000 Xxxx 0xx Xxxxxx,
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx to serve as the Company's temporary
headquarters at a rate of US$4,000.00 per month. The leased premises are
owned by Tradeglobe Consulting Ltd. Xxxx XxXxxxxxx and Xxxxxxxx Xxx,
directors and officers of the Company, are also directors and officers of
Tradeglobe Consulting Ltd.
4. On March 15, 1999, the POPstar-BVI's wholly-owned subsidiary, POPstar
Communications Asia Pacific Limited, entered into an oral month-to-month
lease for the lease of approximately 1,000 square feet of executive offices
located at Westlands Centre, Room 908, 00 Xxxxxxxxx Xxxx, Xxxxxx Xxx, Xxxx
Xxxx to serve as a sales, marketing, and technical support facility for the
the Company's Asian operations at a rate of US$2,000.00 per month. The
leased premises are owned by Easewell Management Ltd., a company
beneficially owned by Xxxxxxxx Xxx, a director and officer of the Company.
-1-
