UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
CHANNEL i INC.
SERIES B VOTING CONVERTIBLE PREFERRED SHARES, $.001 PAR VALUE
CUSIP number
159156 10
(Common Shares)
Richard Antoine
Box 538, Salmon Arm, BC., Canada, V1E 4N6
ph: (250) 832-2003
(Name, Address and Telephone Number of Person authorized to
Receive Notices and Communications)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1 (b)(3) or (4), check the following box....
Check the following box if a fee is being paid with the statement....
SCHEDULE 13D
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CUSIP No. ______________ Page 1 of 3 pages.
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO OF ABOVE PERSON
RICK ANTOINE
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
a) b) x
3. SEC USE ONLY
4. SOURCE OF FUNDS
EXCHANGE OF SHARES - 00
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IF REQUIRED PURSUANT TO ITEMS
2(D) OR 2(E)
6. CITIZENSHIP OR PLACE OF ORGANIZATION
CANADIAN
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7. SOLE VOTING POWER
650,000 (12.9%)
8. SHARED VOTING POWER
N/A
9. SOLE DISPOSITIVE POWER
650,000 (12.9%)
10. SHARED DISPOSITIVE POWER
N/A
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
650,000 (12.9%)
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.9%
14. TYPE OF REPORTING PERSON
IN
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SCHEDULE 13D Page 2 of 3 pages
Item 1. Security and Issuer
Series B Voting Convertible Preferred Shares $.001 par value.
Robert G. Clarke, President and Chief Executive and Financial Officer.
555 W. Hastings St., Suite 700,
Vanvouver, B.C., V6B 4N5
Item 2. Identity and Background
a) Richard Antoine
b) 141 Hudson Ave., N.E., Salmon Arm, BC., Canada, V1E 4R9
c) Principal of and employed as manager by M.W.C. Inc.,
d) None
e) None
f) Canadian citizen
Item 3. Source and Amount of Funds or Other Consideration
The Securities were acquired in exchange for the sale of shares (equity stock)
in Major Wireless Communications Inc. , a Canadian Company, incorporated under
the laws of the Province of British Columbia and as a result of a Share Exchange
Agreement executed on the 13th day of May, 1997and which transaction closed on
May 21st, 1997. No cash or other consideration was involved as the transaction
constituted a share exchange only.
Item 4. Purpose of Transaction
The purpose of the acquisition of the securities is as consideration for payment
for the shares sold of Major Wireless Communications Inc. and as an investment.
(a) None
(b) None
(c) None
(d) None
(e) It is intended to increase the authorized Common Stock of the Company,
$.001 par value to 100,000,000 shares.
(f) None
(g) In addition to (e) above, it is intended to change the name of the
Company to "WaveRider Communications Inc."
(h) None
(i) None
(j) None
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Page 3 of 3 pages.
Item 5. Interest in Securities of the Issuer
(a) 650,000 Series B Voting Convertible Preferred Shares, $.001 par value. These
shares are convertible at the option of the holder into 10 Common shares of the
stock of the Company and until such conversion carry with them the right to vote
along with the Common shareholders on the basis of 10 votes per share.
Calculating the 40,000 Common Shares already held, and In relation to the votes
available to all shareholders the percentage is 12.9%.
(b) Sole Power to vote - 650,000 shares
Shared Power to vote - Nil
Sole Power to dispose or direct disposition - 650,000 shares Shared
Power to dispose or direct disposition - Nil
(c) None
(d) N/A
(e) N/A
Item 6. Contracts, Arrangements, Understandings, or Relationships with Respect
to Securities of the Issuer
N/A
Item 7. Material to be Filed as Exhibits
Share Exchange Agreement dated May 13th, 1997.
Signature:
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
May 26th, 1997 .........................
Richard Antoine
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SHARE EXCHANGE AGREEMENT
BETWEEN:
CHANNEL i INC., a body corporate, incorporated under the laws of the State of
Nevada, United States of America, with offices at 700, 555 West Hastings St.,
Vancouver, British Columbia, Canada, V6B 4N5.
(hereafter referred to as the "Purchaser")
AND:
RICK ANTOINE, "Businessman" of Box 538, Salmon Arm, B.C., Can., V1E 4N6
STEPHEN GRANT, "Businessman" of 3702 Wilho Rd., Sorrento, B.C., Can. V0E 1W0
TIM ZBOYOVSKY, "Businessman" of Box 142, Salmon Arm, B.C., Can., V1E 4N2 and
PACIFIC WESTERN MORTGAGE CORP., a body corporate, incorporated under the laws of
the Province of British Columbia, Canada, with offices at 300 Stewart Road, Salt
Spring Island, British Columbia, V8K 2C4, (hereafter collectively called the
"Vendors")
AND:
MAJOR WIRELESS COMMUNICATIONS INC., a body corporate, incorporated under the
laws of the Province of British Columbia, Canada, with offices at 141 Hudson
Ave., N.E., (Box 3218), Salmon Arm, British Columbia, Canada, V1E 4R9.
(hereafter called "MWCI")
WHEREAS:
A. The Vendors are the registered owners of all the issued and outstanding
shares of the capital stock of MWCI, the particulars of which are as follows:
Class A Class B
------- -------
Rick Antoine 260 260
Stephen Grant 240 240
Tim Zboyovsky 20 20
Pacific Western Mortgage Corp. 1080 1080
B. On February 7th, 1997, negotiations were commenced and agreement was
reached, on a number of the basic terms of this agreement whereby the
Purchaser agreed to purchase all of the said shares of the capital stock of
MWCI in exchange for the issuance of certain shares of the Purchaser's
stock in accordance with an evaluation made as of that date, and which the
Parties now wish to consummate in accordance with the terms and conditions
set forth herein; C. The respective boards of Directors of both Channel i
Inc. and MWCI deemed it to be in the best interests of their respective
Companies to enter into this agreement, and have approved the terms and
contents of this agreement and the execution thereof;
<PAGE>
NOW THEREFORE, in consideration of the premises, and of the mutual promises,
covenants, terms and conditions herein, the parties covenant and agree as
follows:
1. The Exchange:
1.01 Exchange of Shares: Subject to the terms and conditions contained herein,
at the closing of the transactions described in this agreement:
a) The Vendors and each of them, shall sell, transfer, assign, convey and
deliver to the Purchaser all of the said shares legally owned by them as
previously described (hereafter referred to as the "Control Shares"), free
and clear of all adverse claims, security interests, liens, claims and
encumbrances (other than restrictions under applicable securities laws),
and the Purchaser shall accept and acquire the same;
b) As payment in full for the control shares, the Purchaser shall ratably
issue and deliver to the Vendors and aggregate of 4,000,000 shares of the
Company's authorized but unissued Series B Voting Convertible Preferred
Stock, $.001 par value per share, (hereafter referred to as the "Exchange
Shares"); The Exchange Shares shall incorporate, inter alia, the right of
conversion to common shares at a ratio of 10 common shares for each
Exchange Share and the right to vote with each Exchange Share having 10
votes. The Exchange Shares shall be allocated among the Vendors and issued
in proportion to their ownership of Control Shares. The said Exchange
Shares shall be held by the Corporate Secretary and shall be actually
released to the Vendors on the occurrence of the events and in the numbers
set forth in Schedule A hereto. In the event any one or more of the events
described have not occurred prior to the expiration of 5 years from the
date of execution of this agreement, the remaining Exchange Shares not so
released, shall be cancelled by the Company; provided however that the
Company, by its Board of Directors at their sole discretion and from time
to time, may extend the said 5 year time frame for such additional time or
times up to a cumulative period of 2 years, as it may deem advisable,
where, in their sole discretion, the failure to do so would be unfair to
the Vendors. So long as any of the said Exchange Shares are held by the
Corporate Secretary in accordance with the terms of this paragraph, the
registered owners thereof shall have full voting rights together with the
right to received dividends, with all other rights associated with
ownership of the said Exchange Shares to be subject to the terms of this
paragraph.
c) This agreement shall be deemed effective between the parties as of
February 7th, 1997, when certain of its principal terms including the
valuation of shares, were negotiated and agreed to. As of that date the
market price of the Purchaser's Common shares was U.S. $0.0625 per share.
1.02 Adjustment: The number of Exchange shares shall be proportionally increased
or decreased, should the Purchaser's stock be subject to a forward or reverse
split prior to closing.
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1.03 Entire Purchase Price: The Exchange Shares constitute the entire purchase
price payable for the Control Shares. The Exchange shares shall not be subject
to any preemptive rights, options, or similar rights on the part of any
shareholder or creditor of the Purchaser or any other person or entity. The
Vendors hereby acknowledge the sufficiency of the purchase price, and upon
consummation of the Exchange, shall have no further rights in or claims to MWCI
and shall thereafter have only those rights accorded shareholders of the
Purchaser and as set forth in this agreement.
1.04 Included Assets: At the time of Closing, MWCI. shall continue to own all of
the assets and properties, both tangible and intangible, of every kind and
description, owned by it on this date, plus all assets and properties as may be
acquired prior to closing and excepting properties, assets or cash expended
solely in the ordinary course of business, without withdrawal or removal.
1.05 Breaches and Violations: If, and to the extent that the sale and purchase
of the Control Shares is alleged to constitute a breach of any lease, loan or
financing agreement, or other contract, license, franchise, permit, approval,
trust or other property or contractual interest, or a violation of any law,
decree, order, regulation, or other governmental edict, both the Vendors and
MWCI shall expend all reasonable efforts at their respective expense, to obtain
any consents and waivers of third parties or otherwise resolve any such breach
or violation and the Purchaser shall cooperate with them wherever possible.
1.06 Assumption of Ownership and Possession: At closing, Purchaser shall take
ownership, possession and control of MWCI, its books, records, properties,
assets and operations in whatever form the same may be and wherever the same may
be located.
1.07 Continuing Obligation of the Parties: The Parties hereto each agree that,
should anything required to be done, conveyed or delivered by any party through
inadvertence or otherwise, not be done, conveyed or delivered at Closing, they
will each do, or cause to be done, such further or other acts as may be required
to complete the same.
1.08 Securities not Registered: MWCI and the Vendors each acknowledge and agree
that the Exchange shares have not been registered under the Securities Act of
1933, as amended, (the "Act"), in reliance upon the exemption from registration
provided by Rule 902(c)(2) of Regulation S under the Act, on the grounds that
the Exchange herein is an offshore transaction, that none of the Vendors is a
"U.S. Person" and that the Exchange Shares have been offered and will be issued
solely outside the United States of America. Each Vendor understands and agrees
that the prior written consent of the Purchaser will be necessary for any
transfer of any or all of the Exchange Shares, unless and until the securities
have been duly registered under the Act or the transfer is made in accordance
with an available exemption from registration under the Act. The Purchaser
similarly acknowledges that the Control Shares have not been registered under
the Act and are restricted securities.
1.09 Restrictive Legend: The Vendors each acknowledge and agree, that, unless
and until removed in accordance with law, all certificates which are issued
evidencing the Exchange Shares, shall contain a customary form of investment
legend in substantially the following form:
<PAGE>
"The shares evidenced by this Certificate and any other securities of the
corporation into which such securities may be converted or exchanged, have not
been registered under the U.S. Securities Act of 1933, (the "Act") but have been
offered and sold in reliance upon Regulation S under the Act. Transfer of these
securities is prohibited except in accordance with the provisions of Regulation
S or pursuant to registration under the Act.", and which legend shall include a
self-liquidating or self-destructing date, where allowed by law.
1.10 Closing: Subject to the conditions precedent set forth herein, the closing
of all transactions herein contemplated, ("Closing"), shall take place at the
offices of the Purchaser C9. at 700, 555 West Hastings St., Vancouver, B.C.,
Canada, on or before the 13th day of May, 1997, at a time mutually agreed upon,
or such earlier or later date and time as may be mutually agreed upon by the
Parties. This agreement shall be effective and binding when signed by all
Parties hereto.
1.11 The Purchaser has registered its common shares under the Securities
Exchange Act of 1934, as amended ("Exchange Act"), and is subject to the
information and reporting requirements of the Exchange Act. The Purchaser, MWCI
and the Vendors acknowledge that the following filings must be made with the
U.S. Securities and Exchange Commission ("SEC"), in relation to this Agreement
and the transactions contemplated herein:
a) A current report on Form 8-K must be filed by the Purchaser within 15 days
following the execution of this Agreement which describes in details the
terms of this Agreement and other required information, and certain audited
and unaudited financial statements of MWCI will need to be timely filed
with the SEC;
b) If a majority of the Purchaser's board of Directors will change in
connection with this Agreement, a notice pursuant to SEC Rule 14F-1 must be
filed with the SEC and mailed to the Purchaser's shareholders not less than
10 days before the new directors take office;
c) Every person who becomes an executive officer or director of the Purchaser
must within 10 days file with the SEC a report of beneficial ownership of
securities on Form 3;
d) Upon consummation of this Agreement, every person who as a result becomes
the beneficial owner of more than 5% of Purchaser's voting securities
(including securities obtainable within 60 days upon exercise, exchange, or
conversion of other securities), must within 10 days, file with the SEC, a
report of beneficial ownership of securities on Schedule 13D, and
e) Upon consummation of this Agreement, every person who as a result becomes
the beneficial owner of 10% or more of the Purchaser's voting securities,
(including securities obtainable within 60 days upon exercise, exchange or
conversion of other securities), must file with the SEC a Form 3 containing
all required information.
1.12 Approval of Certain Actions by Purchaser: MWCI and the Vendors acknowledge
that they wish for the Purchaser to: i) increase its authorized capital stock,
and, ii) change its corporate name to WAIVERIDER COMMUNICATIONS INC. The Vendors
agree that they will, following consummation of this agreement and issuance to
them of the Exchange Shares, vote such shares in favor of both proposals by
means of a consent in lieu of a shareholder meeting.
<PAGE>
1.13 SEC Investigation: The staff of the SEC in 1994 commenced a private
investigation into, among other things, certain past equity offerings made by
Purchaser. This is a civil, not a criminal, investigation. The current executive
officers and directors of the Purchaser had no involvement in the transactions
which are the subject of the investigation. If the SEC staff concludes that the
Purchaser, or affiliated persons, violated United States securities laws, it is
possible that the SEC will then initiate one of several actions against the
Purchaser and such persons. The potential actions which could be taken include a
civil action for damages or for injunctive or other relief, or the commencement
of administrative proceedings by the Commission itself, against the Purchaser or
any affiliated individuals believed to have engaged in wrongdoing. The Purchaser
cannot at this time predict what action, if any, the SEC staff or the SEC
itself, may later take, or what money damages or other relief it might seek, nor
can the effect upon the Purchaser by predicted. Based on the facts known to
management however, the Purchaser does not believe that it or any affiliated
persons engaged in violations of United States laws or rues or regulations
thereunder. The Purchaser has cooperated and intends to continue to cooperate
with the SEC staff in regard to this investigation. Purchaser has had no
communication with the SEC staff for over a year and believes the investigation
has, as a practical matter, ended, but no assurance of this can be made.
2. Representations and Warranties of MWCI: MWCI hereby represents and warrants
that the following are true and correct as of the date hereof and will be true
and correct through to and including the Closing date, as if made on that latter
date:
a) MWCI is a corporation duly organized, validly existing and in good standing
under the laws of the Province of British Columbia, in the Dominion of
Canada with all requisite power and authority to carry on the business in
which it is engaged and has no subsidiary.
b) There are no claims, actions, suits, proceedings, or investigations of any
kind pending or threatened against or affecting MWCI or any of its
properties or business anywhere in the world.
c) MWCI has complied in all material respects with all applicable laws,
regulations, and rules, applicable to its business or properties.
d) All taxes, assessments and other charges owing by MWCI to any taxing
authority shall have been duly paid and all applicable tax returns shall
have been properly filed.
e) The execution, delivery and performance by MWCI of this agreement and any
other agreements contemplated hereby, and the consummation of the transactions
contemplated hereby and thereby, have been duly authorized by all requisite
corporate action of MWCI. This agreement and any other agreement contemplated
hereby have been and will be, as of the Closing Date, duly executed and
delivered by MWCI and constitutes and will constitute legal, valid and binding
obligations of MWCI, enforceable against it in accordance with their respective
terms, except as may be limited by applicable bankruptcy, insolvency or similar
laws affecting creditors' rights generally, or the availability of equitable
remedies.
<PAGE>
f) No consent, approval, authorization, or order of any court, or other agency
or authority, or any other person whatsoever, is required for MWCI to
execute, deliver and consummate this agreement.
g) As at the date of this agreement, the authorized capital stock of MWCI
consists of 2,220,000 shares divided into: 10,000 Class A shares without
par value, 10,000 Class B shares without par value, 2,000,000 Class C
shares with a par value of $0.01 per share, 100,000 Class D shares with a
par value of $0.01 per share, and 100,000 Class E shares with a par value
of $100.00 per share, of which the Control Shares are the only shares of
MWCI stock issued and outstanding: No other shares of capital stock have
been authorized or have been issued. All of the said issued and
outstanding shares have been duly authorized, validly issued, and are
fully paid and nonassessable. MWCI is not a party to, or bound by, nor does
it have any knowledge of any agreement, instrument, arrangement, contract,
obligation, commitment or understanding of any character, whether written
or oral, express or implied, whereby MWCI is bound to issue shares of its
capital stock, or any instrument or right convertible into or exchangeable
for its capital stock, nor relating to the sale, assignment, encumbrance,
conveyance, transfer or delivery of any capital stock of MWCI , of any type
or class. MWCI shall provide to the Purchaser a list of all registered
holders of capital stock, inc luding the number of shares held by each and
the number of each certifica te held, duly certified by the Secretary of
MWCI.
h) Outstanding Options, Warrants or other Rights: MWCI has no outstanding
warrants, options or similar rights, whether issued pursuant to a benefit
or other plan or not, whereby any person may subscribe for or purchase
shares of its capital stock, nor are there any other securities outstanding
which are convertible into or exchangeable for its capital stock.
i) Stock or Other Benefit Plans: As of the date of this agreement and the date
of closing, MWCI has not and will not have authorized or have in effect any
stock option plan, employee stock option or stock purchase plan, dividend
reinvestment plan or similar plan pursuant to which any person is entitled
to acquire capital stock of MWCI or securities convertible into or
exchangeable for capital stock of MWCI.
j) Pension and Similar Plans: As of the date of this agreement and the date of
closing, MWCI has not and will not have authorized or have in effect any
bonus, deferred compensation, pension, profit-sharing, retirement or
similar plan covering its directors, officers, employees, or any other
persons whatsoever.
k Financial Statements: MWCI shall furnish to the Purchaser copies of its
financial statements, unaudited , to the end of the month immediately
preceeding closing, a balance sheet, and an income statement and cash flow
statement. Such statements shall fairly present the assets, liabilities and
financial condition of MWCI as of the said date, shall have been prepared
in conformity with generally accepted accounting principles, consistently
applied during the period covered, and shall include all notes and
schedules thereto. In addition, MWCI shall provide the Purchaser with such
additional financial information, books and records as the Purchaser may
request, all of which shall be furnished no later than 60 days following
execution of this agreement.
<PAGE>
l) Material Liabilities: MWCI has not incurred any liabilities or obligations
whatever, (whether direct, indirect, accrued, contingent, absolute,
secured, unsecured, or otherwise), including liabilities as guarantor,
surety or otherwise for the obligations of others and tax liabilities due
or to become due, except as described in the Financial Statements or as
otherwise disclosed in writing to the Purchaser.
m) Material Transactions and Adverse Changes: Except as has been disclosed in
writing to the Purchaser, MWCI has not and as of the date of Closing will
not have: i) suffered any materially adverse change in its assets,
liabilities, or financial condition taken as a whole; ii) suffered any
damage or destruction in the nature of a casualty loss to any oneor more of
its properties, whether or not covered by insurance, which singly, or in
the aggregate, are materially adverse to the properties or business of
MWCI; iii) purchased or redeemed any of its capital stock, or authorized or
paid any stock dividends, or authorized or paid any cash dividends or made
any distribution of capital or earnings, or authorized or made any split,
combination (reverse split), or other reclassification of or affecting any
of its capital stock; iv) made any change in any method of accounting or
accounting practice, including the revaluation of any asset; v) increased
or made any commitment to increase the salary, fees or other forms of
compensation of any employee, officer or director; or vi) agreed in writing
or otherwise, to take any action described in this paragraph.
n) Contracts: MWCI has provided or will provide to the Purchaser prior to
Closing, a copy of all contracts to which MWCI is a party or of which it is
aware and which in any way, might affect MWCI or its business operations.
o) Patents, Trademarks, etc.: MWCI is in the process of applying for a patent
or patents along with registered trademarks associated with the technology
and business of providing internet services, however, these are still in
the formative stages and no patent or trademark rights are as yet
guaranteed. MWCI will furnish to the Purchaser copies of all such
applications.
p) Litigation: There are no claims, actions, suits, proceedings or
investigations pending or threatened against or affecting MWCI, or any of
its properties in any court or by or before any federal, state, provincial,
municipal or other governmental department, commission, board, bureau,
agency or other instrumentality, domestic or foreign, or arbitration
tribunal or other forum which, if determined adversely to MWCI, would
materially m affect its business, prospects, properties or financial
condition, or its right to conduct business as being conducted or expected
to be conducted, except as disclosed in writing to the Purchaser. There are
no judgments, decrees, injunctions, writs, orders or other mandates
outstanding to which MWCI is a party or by which it is bound or affected,
except as disclosed in writing to the Purchaser.
<PAGE>
q) Affiliate Relationships: MWCI is not indebted to any officer, director,
employee, shareholder or agent thereof as of the date of this Agreement,
and no money or property is owed to MWCI by any officer, director, employee
or shareholder thereof, except as disclosed in writing to the Purchaser.
r) Salaries: MWCI has delivered to the Purchaser a true and correct
description of the annual rate of compensation (including benefits) of all
employees of MWCI. There is no obligation, commitment or past repetitive
historical practice of MWCI to pay bonuses, royalties or other similar
compensation designed to reward past performance, create incentive for
future performance, or otherwise, to any director, officer or other
employee of MWCI, except as disclosed to the Purchaser.
s) Documents Genuine: All originals and/or copies of MWCI's articles of
incorporation and bylaws, each amended to date, and all minutes of meetings
and written consents in lieu of meetings of shareholders, directors and
committees of directors of MWCI, financial data, and any and all other
documents, material, data, files or information which have been or will be
furnished to the Purchaser, are and will be true, complete and correct and
unmodified originals and/or copies of such documents, information, data,
files or material.
t) Restrictive Covenants: Prior to the consummation of the Exchange here in,
MWCI, shall conduct its business in the ordinary and usual course without
unusual commitments and in compliance with all applicable laws, rules,
and regulations. Furthermore, MWCI will not, without the prior written
consent of the Purchaser: i) make any changes to its capital structure, ii)
incur any liability or obligation other than current liabilities incurred
in the ordinary and usual course of business, iii) incur any indebtedness
for borrowed money, iv) make any loans or advances oth er than advances to
employees in the ordinary and usual course of business, v) declare or pay
any dividend or make any other distribution with respect to its capital
stock, vi) issue, sell, or deliver or purchase or otherwise acquire for
value any of its stock or other securities, vii) mortgage, pledge, or
subject to encumbrance, any of its assets or properties, viii) sell or
transfer any of its assets or properties, except in the ordinary and usual
course of business, ix) make any investment of a capital nature, x) adopt
or amend in any material respect, any collective bargaining agreement or
employee benefit plan, or x i) enter into any contract, agreement, or
other commitment which is material to the business, assets, properties, or
financial position of MWCI.
u) Law Violations: MWCI has never been convicted in any criminal proceedings
or named subject of a pending criminal proceeding (excluding minor
offences), nor has it been the subject of any order, judgment or decree,
not subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently enjoining it from, or otherwise limiting the
engagement in any type of business practice; or engaging in any activity in
connection with the purchase or sale of any security or commodity in
connection with violation of federal, state, or provincial security laws.
<PAGE>
v) Access to Information: MWCI agrees to make available access to any and all
corporate and financial files and records of MWCI for inspection prior to
closing.
w) Disclaimer of Further Warranties: Except as expressly set forth in this
Agreement and any schedules and exhibits hereto, the Purchaser has not made
any representations or warranties to MWCI in connection with this
Agreement.
4. Representations and Warranties of the Vendors: The Vendors each and severally
represent and warrant that the following are true and correct as of the date
hereof and will be true and correct through the Closing date as if made on that
latter date:
a) The Vendor is not a "U.S. Person" as that term is defined in Rule 902 (o)
of Regulation S under the Securities Act and at the time this Agreement was
executed and delivered to the Purchaser, Vendor was outside the United
States. Vendor if an entity, was not formed for the purpose of investing in
the Exchange Shares and maintains its business offices at the address shown
in this Agreement.
b) Vendor is accepting the Exchange Shares for its own account (and/or for the
beneficial account of other non-United States persons who are outside the
United States) and not on behalf of or for the account of any U.S. person;
and Vendor has not made any pre-arrangement to transfer the Exchange Shares
to a U.S. person or to return the Exchange Shares to the United States
securities market (which includes short sales in the United States within
the restricted period to be covered by delivery of Exchange Shares) and is
not accepting the Exchange Shares as part of any plan or scheme to evade
the registration requirements of the Securities Act.
c) Vendor acknowledges and agrees that the offering restrictions applicable to
the Exchange Shares restrict Vendor from selling any of the Exchange Shares
into the United States or to a U.S. person during the 40 day restricted
period, commencing upon completion of the Exchange (the "restricted
period"); that such restricted period shall be deemed to commence on the
date the Purchaser certifies to be the date that all parties and all
Vendors have executed a counterpart of this Agreement; and that the
Purchaser will instruct its transfer agent to place a stop transfer order
with respect to the certificates representing the Exchange Shares and that
such certificates shall bear a legend substantially in the form set forth
in Section 1 above. Vendor acknowledges that a certain number of the
Control Shares are held for the beneficial account of others with the
result that certain of the Exchange shares may be issued in the names of
the persons or entities retaining such beneficial interest. The Vendor
confirms that it will have obtained the acknowledgment of all such parties
having a beneficial interest, that they are aware of the said restrictions
and that they will abide by all of the covenants applicable to such
restrictions, given by the Vendor herein.
d) Each Vendor represents, warrants and hereby agrees that all offers and
sales of the Exchange Shares by Vendor in the United States or to U.S.
persons, or otherwise, whether prior to the expiration or after the
expiration of the Restricted period shall be made only pursuant to a
registration of the Exchange Shares under the Act or an exemption from
registration.
<PAGE>
e) Vendor has not engaged in any "directed selling efforts" (as defined in
Rule 902 of Regulation S) in the United States regarding the Exchange
Shares, nor has he, she or it engaged in any act which reasonably might
have the effect of preconditioning the U.S. market for the resale of the
Exchange Shares being subscribed.
f) Vendor is not an officer, director or affiliate (as that term is defined in
Rule 405 under the Act), of the Purchaser, or an underwriter or dealer (as
such terms are defined in the federal securities law of the United States),
and the purchase of the Exchange Shares by Vendor is not a transaction, (or
part of a series of transactions), that is part of any plan or scheme to
evade the registration provisions of the Act. If Vendor becomes an
affiliate of the Purchaser at any time after purchasing the Exchange
Shares, Vendor understands and agrees that every sale made by it thereafter
must be made in compliance with the provisions of Rule 144 of the Act
(except for the two year holding period requirement), including the filing
of Form 144 with the Securities and Exchange Commission at the time of
sale, as required under Rule 144. Vendor understands and agrees that the
provisions of Rule 144, if at any time applicable to it, are separate and
apart from and independent of any restrictions imposed by Regulations S and
will apply even after the expiration of the 40 day restricted period of
Regulation S.
g) Vendor does not have a short position in the shares of the Purchaser and
will not have a short position in such shares at any time prior to the
expiration of the restricted period.
h) If at any time after the expiration of the restricted period, the Vendor
wishes to transfer or attempts to transfer the Exchange Shares to a U.S.
person, the Vendor agrees to notify the Purchaser if at such time it is an
"affiliate" of the Purchaser or is then acting as an "underwriter" ,
"dealer", or "distributor" as to such Exchange Shares (as such terms are
defined in the federal securities laws of the United States or the
regulations promulgated thereunder, including, but not limited to,
Regulation S), or if such transfer is being made as part of a plan or
scheme to evade the registration provisions of the Act.
i) Vendor understands that no Federal or State Agency has approved or passed
upon or made any recommendation as to or endorsement of the Exchange
Shares.
j) Each Vendor has received and carefully reviewed in its entirety,
information otherwise provided in writing by Purchaser and any other
information from books and records of the Purchaser, and have relied on the
information contained therein. The Vendor understands that additional
information concerning Purchaser has been made available for inspection by
the Vendor and his attorney, accountant or other advisers. The Vendor and
his advisers have had a reasonable opportunity to ask questions of and
receive answers from Purchaser or a person or persons acting on its behalf,
concerning the Exchange of shares, and all such questions have been
answered to the Vendor's or their satisfaction.
<PAGE>
k) Vendor recognizes that the Exchange Shares are speculative and involve a
high degree of risk and trade in the non-Nasdaq segment of the over the
counter (OTC) markets.
l) The Vendor's own the Control Shares in the respective numbers as set forth
previously in this agreement, and the address of each is similarly set
forth; The Control Shares are free and clear of all liens, claims, rights,
or other encumbrances whatever and of all options and similar rights of
third persons; no person has or will have any right in and to such shares
except as are created by force of law under any marital, community property
or similar rights; and no person owns or will own any right of first
refusal, per-emptive right, option or similar right to acquire any of the
Control Shares, in either case, except as disclosed in writing to the
Purchaser prior to Closing.
m) Each Vendor has the full right, power and legal capacity to enter into this
Agreement and sell and deliver the Control Shares to the Purchaser on the
terms herein. As to each Vendor which is a corporation or other entity, all
requisite corporate or equivalent action has been taken that is necessary
to approve the execution and performance of this Agreement.
n) Each Vendor represents and warrants that he is not now insolvent and will
not be insolvent after selling and delivering the Control Shares to the
Purchaser on the terms of this Agreement, and each Vendor is receiving new
consideration at least equal to the full and fair value of the Control
Shares being sold.
o) The Vendor alone, or together with the Vendor's advisor(s), possesses such
knowledge and experience in financial, tax and business matters as to
enable each Vendor to utilize the information made available by the
Purchaser, in connection with the Exchange and issuance of the Exchange
Shares, to evaluate the merits and risks of exchanging the Control Shares
for the Exchange Shares and to make an informed investment decision with
respect thereto.
p) All information which each Vendor has provided or will provide to the
Purchaser is or will be correct and complete as of the date furnished to
the Purchaser and if there should be any material change in such
information prior to the Closing as to any Vendor, that Vendor will
immediately provide the Purchaser with such information.
q) Except as expressly set forth in this Agreement and any schedules and
exhibits hereto, Purchaser has not made any representation or warranty to
any Vendor in connection with this Agreement, and the Purchaser has made no
communication to any Vendor that constitutes or could be construed as
constituting tax or investment advice.
r) To the best of the knowledge of each Vendor, all of the representations and
warranties of MWCI as set forth in this Agreement, are accurate and true.
5. Representations and Warranties of Purchaser: Unless specifically tated
otherwise in this Agreement, the Purchaser represents and warrants that the
following are true and correct as of the date hereof and will be true and
correct through the Closing Date as if made on that date:
<PAGE>
a) Exchange Shares Duly Authorized: The Exchange Shares will be when issued,
validly issued, fully paid and nonassessable; the sale, issuance and
delivery of the Exchange Shares on the terms herein contemplated has been
authorized by all requisite corporate action of the Purchaser and the
Exchange Shares will not be subject to any preemptive rights, options, or
similar rights on the part of any shareholder or creditor of the Purchaser
or any other person.
b) Restricted Securities, etc.: Purchaser acknowledges that the Control
Shares have not been registered pursuant to the Act or any applicable state
security laws, that the Control Shares will be characterized as "restricted
securities" under the Act, and that under such laws and applicable
regulations, the Control Shares cannot be sold or otherwise disposed of
without registration under the Act or an exemption therefrom. Purchaser
acknowledges that all certificates issued to it respecting the Control
Shares will bear an appropriate investment legend. Purchaser is acquiring
the Control Shares for its own account for investment and not with a view
to or for the sale or other disposition in connection with any distribution
of all or any part thereof, except: i) in an offering covered by a
registration statement filed with the Securities and Exchange Commission
under the Act covering the Control Shares, or ii) pursuant to applicable
exemption under the Securities Act.
c) Organization and Good Standing: Purchaser is and on the Closing Date will
be duly organized, validly existing and in good standing under the laws of
the State of Nevada, with all requisite power and authority to carry on the
business in which it is engaged and is duly qualified and licensed to do
business and is in good standing in all jurisdictions where the nature of
its business makes such qualification necessary.
d) Capitalization: As provided in its Articles of Incorporation, the
authorized capital stock of the Purchaser consists of: 50,000,000 shares
divided into 45,000,000 Common shares and 5,000,000 Preferred shares. of
which there are approximately 7,500,000 Common shares and 300,000 Series A,
Preferred shares issued and outstanding. The terms, rights, preferences and
privileges of the preferred stock are described in the Purchaser's Articles
of Incorporation, and where amended or restated to date, have been
furnished to the other parties.
e) Outstanding Options, Warrants or Other Rights: Except as described to the
Vendors in writing, Purchaser has no outstanding warrants, options or
similar rights to subscribe for or purchase shares of its capital stock
(not any securities convertible into or exchangeable for its capital
stock), nor are there any other securities outstanding convertible into or
exchangeable for its common stock, and there are no contracts or
commitments pursuant to which any person may acquire or Purchaser may be
bound to issue any shares of its capital stock save as may have been
disclosed to the Vendors in writing.
<PAGE>
f) Litigation: Except as more particularly disclosed in this agreement, there
are no claims, actions, suits, proceedings or investigations pending or
threatened against or affecting the Purchaser in any Court or by or before
any federal, state, provincial, municipal or other governmental department,
commission, board, bureau, agency, or other instrumentality, do mestic or
foreign, or arbitration tribunal or other forum, except as disclosed to the
Vendors in writing. There are no judgments, decrees, injunctions, writs,
orders or other mandates outstanding to which the Purchaser is a party or
by which it is bound or affected.
g) Financial Statements: Purchaser will provide to the Vendors and to any
requesting Vendor, the Purchaser's audited balance sheet and the other
financial statements of the Purchaser for such periods as the Vendors
reasonably request. All such statements shall fairly present the assets,
liabilities and financial condition of the Purchaser as of the respective
dates thereof and all shall have been prepared in conformity with generally
accepted accounting principles, consistently applied during the periods
covered. For purposes of this agreement, such statements shall include all
notes thereto.
h) No Undisclosed Material Liabilities: Purchaser has not incurred any
liabilities or obligations whatever, (whether direct, indirect, accrued,
contingent, absolute, secured, unsecured or otherwise), which, singly, or
in the aggregate, are material to its assets, operations, or financial
conditions, except as reflected in the Purchaser's financial statements or
otherwise disclosed in writing to the Vendors.
i) Taxes: All income, excise, unemployment, social security, occupational,
franchise and other taxes, duties, assessments or charges levied, assessed
or imposed upon the Purchaser by the United States or by any state or
municipal government or subdivision or instrumentality thereof , have been
duly paid or adequately provided for, and all required tax returns or
reports concerning any such items have been duly filed or will be so fi
led.
j) Authorization and Validity: The execution, delivery and performance by
the Purchaser of this agreement and any other agreements contemplated
hereby, and the consummation of the transactions contemplated hereby and
thereby, have been duly authorized by all requisite corporate actions of
the Purchaser. This Agreement and any other agreements contemplated hereby
have been or will be as of the Closing Date, duly executed and delivered by
the Purchaser and constitutes and will constitute legal, valid and binding
obligations of the Purchaser, enforceable against it in accordance with
their respective terms, except, as may be limited by applicable bankruptcy,
insolvency or similar laws affecting creditors' rights generally or the
availability of equitable remedies. The approval of the Purchaser's
shareholders is not necessary for the Purchaser's execution and performance
of this Agreement.
k) Consents/ Approvals/ Conflict: No consent, approval, authorization or order
of any court, or governmental agency or other body is required for the
Purchaser to execute and perform its obligations under this Agreement.
Neither the execution, delivery, consummation or performance of this
Agreement shall conflict with, constitute a breach of Purchaser's articles
of incorporation and bylaws as amended to date, or any note, mortgage,
<PAGE>
indenture, deed of trust or other agreement or instrument to which the
Purchaser is a party or by which it is bound; nor, to the best of the Purc=
haser's knowledge and belief, any existing law, rule, regulation, or any
decree of any court or governmental department, agency, commission, board ,
or bureau, foreign or domestic, having jurisdiction over the Purchaser.
l) Disclaimer of Further Warranties: Except as expressly set forth in this
Agreement and any schedules and exhibits hereto, neither MWCI nor any
Vendor has made any representation or warranty to the Purchaser in
connection with this Agreement.
m) Approval for Name Change: The Purchaser has reserved the name,
"Waverider Communications Inc." and undertakes to effect a name change for
itself, at the earliest possible date.
n) Miscellaneous: The execution and performance of this Agreement and
compliance with the provisions hereof, will not violate, with or without
giving notice and /or the passage of time, any provisions of law applicable
to the Purchaser. All statements made by the Purchaser in this Agreement,
or in any exhibit or schedule hereto, or in any document or certificate
executed and delivered herewith, are true, correct and complete as of the
date of this Agreement and will be so as of the Closing Date. All copies of
documents provided and to be provided by the Purchaser are and shall be
true and correct copies of such documents.
6.Conditions to Obligations of the Parties; Deliveries: All obligations of the
parties under this Agreement are subject to the fulfillment, prior to the
Closing, of all conditions precedent and to performance of all covenants and
agreements, and completion of all deliveries contemplated herein, unless
specifically waived in writing by the party entitled to performance or to demand
fulfillment of the covenant or delivery of the documents. The Purchaser's
obligations to purchase and pay for the Control Shares are further subject to
the representations and warranties of MWCI and the Vendors being true and
correct at the Closing, and the obligations of the Vendors to sell, transfer,
assign, convey and deliver the Control Shares is further subject to the
representations and warranties of the Purchaser being true and correct at the
Closing.
6.01 Documents to be Delivered to Purchaser: At the closing, the following
documents shall be delivered to the Purchaser by MWCI or the Vendors as the case
may be, which documents shall be in a form and content satisfactory to the
Purchaser's counsel:
a) A Certificate executed by an Officer of MWCI, dated the Closing
Date,certifying that the representations and warranties of MWCI, contained
in this Agreement and the information set forth in any exhibits or
schedules hereto, are then true and correct and that MWCI has complied with
all things required of it by this Agreement and all related Agreements; and
at the option of the Purchaser, a legal opinion as to any such matters as
the Purchaser may in its sole discretion, require.
b) A Shareholders list, reflecting the names, addresses and shareholdings
<PAGE>
of MWCI, (both legal and beneficial), immediately prior to closing, such as
to enable the Purchaser to properly allocate and issue the Exchange Shares,
and an incumbency certificate, naming the Officers and Directors of MWCI,
specifying the Offices held by each, both duly certified by the Secretary
of MWCI.
c) A copy of the Directors' resolutions or minutes of the meeting of the
Directors of MWCI approving the execution and performance of this
Agreement.
d) All schedules, exhibits and other information called for in this
Agreement, in proper form and properly completed.
e) Upon receiving delivery of the original certificates evidencing the
Control Shares, MWCI shall cancel such certificates and issue and deliver
to and in the name of the Purchaser a certificate or certificates,
evidencing all of the Control Shares purchased hereunder.
6.02 Documents to be Delivered by the Vendors: At the closing, the Vendor s
shall deliver to MWCI , for cancellation, all of the certificates evidencing the
Control Shares, each certificate endorsed by the Vendor transferring it, or
accompanied by a stock power signed by the Vendor transferring it, duly
notarized or medallion guaranteed.
6.03 Documents to be Delivered To MWCI and the Vendors: At the closing, the
following documents shall be delivered to MWCI and the Vendors, by the
Purchaser, which documents shall be satisfactory in form and content to counsel
for both:
a) Certificates evidencing the Exchange Shares in proper denominations.
b) A certificate executed by the Secretary of the Purchaser and dated the
Closing Date, certifying that the representations and warranties of the
Purchaser contained in this Agreement are then true and correct and that
the Purchaser has complied with all agreements and conditions required by
this Agreement to be performed and complied with by it.
c) A copy of Directors' resolution or minutes of the meeting of the
Directors of the Purchaser, approving the execution and performance of this
Agreement.
d) All schedules, exhibits and information called for in this Agreement and
not yet received.
6.04 Conditions Precedent: The obligations of the parties under this Agreement
are subject to the satisfaction of the following conditions (in addition to
other conditions and terms of this Agreement), unless waived in writing, on or
prior to the Closing, in addition to any other conditions precedent set forth in
this Agreement;
a) Representations and Warranties Correct: The representations and
warranties of every party to this Agreement shall be in all material
respects true and correct as at the Closing Date as if made on that date.
<PAGE>
b) Compliance: Purchaser, MWCI and the Vendors each shall have performed
all covenants and agreements, satisfied all conditions and complied with
all other terms and provisions of this Agreement to be respectively
performed, satisfied, or complied with as of the Closing Date.
c) No Errors or Misrepresentations: Purchaser shall not have discovered any
material error, misstatement or omission in or failure of any
representation or warranty made by MWCI or any Vendor, and neither MWCI nor
the Vendors shall have discovered any material error, misstatement or
omission in or failure of any representation or warranty made by the
Purchaser.
d) Due Diligence Examination: Purchaser shall have completed a due
diligence examination of MWCI reasonably satisfactory to the Purchaser,
covering all books, records, contracts and other documents and all
financial affairs of MWCI. MWCI and the Vendors shall have completed a
due diligence examination of the Purchaser reasonably satisfactory to each,
covering all books, records, contracts, and other documents and all
financial affairs.
e) No Material Change. Between the date of this Agreement and the Closing
Date, MWCI shall not have incurred any liabilities or obligations, direct
or contingent, or entered into any material transactions of any kind except
those which are in the usual and ordinary course of business or previously
agreed to by the Purchaser, shall have no material undisclosed liabilities
and shall not have done any act or engaged in any course of conduct
prohibited , without the consent of the other parties.
f) Legal Matters: All legal matters in connection with this Agreement and
the consummation of all transactions herein contemplated, and all documents
and instruments delivered in connection herewith, shall be in reasonably
satisfactory form to each party.
g) Prohibition: No injunction or restraining order of any kind is in effect
which prevents the purchase of the Control Shares, or issuance and delivery
of the Exchange Shares, and no lawsuit or other proceeding has been filed
by any person by the Closing Date contesting or attempting to enjoin either
action, and no action is taken and no law is passed after the date of this
Agreement which prevents the purchase of the Control Shares or issuance and
delivery of the Exchange Shares.
7. Additional Covenants of the Parties: The parties each agree that, prior to
closing:
a) Effectuation of this Agreement: Each of the parties hereto will use
their best efforts to cause this Agreement and all related agreements, to
become effective, and all transactions herein, and therein contemplated to
be consummated, in accordance with its and their terms, to obtain all
required consents, waivers and authorizations of governmental entities and
other third parties, to make all filings and give all notices to those
regulatory authorities or other third parties which may be necessary or
<PAGE>
reasonably required in order to effect the transactions contemplated in
this Agreement and to comply with all federal, local and state laws, rules
and regulations as may be applicable to the contemplated transactions.
b) Restriction on Action: The parties each agree that he, will not do any
thing or act prohibited by this Agreement or any related agreement, or fail
to do any thing or act which he, has undertaken to do in this Agreement or
any related agreement.
c) Stand-Still Agreement: Each of the parties agree not to solicit from any
third party any offer or expression of interest in or with respect to any
acquisition, combination or similar transaction involving the parties of a
tenor similar to this Agreement and further agree that each will promptly
inform the others of the existence of any unsolicited offer or expression
of interest.
8. Termination of this Agreement:
8.01 Grounds for Termination: This agreement shall terminate:
a) By mutual written consent of all parties;
b) By any party hereto, if:
i) all the conditions precedent to its respective obligations hereunder
have not been satisfied or waived prior to the Closing Date, as it may be
accelerated or extended;
ii) any other party or parties hereto shall have defaulted or refused to
perform in any material respect under this Agreement, or if any party
should have reasonable cause to believe there has been a material
misrepresentation concerning, or failure or breach of, any representation
or warranty by any other party, or if it appears that any party has
committed any unlawful acts affecting any of the others;
iii) the transactions contemplated in this Agreement and related Agreements
have not been consummated on the Closing Date, as it may be accelerated or
extended, or:
iv) any party hereto having reasonably determined that the transactions
contemplated in this Agreement have become inadvisable by reason of the
institution or threat by any federal, state, provincial or municipal
governmental authorities, or by any other person whatsoever, of a formal
investigation or of any action, suit, or proceeding of any kind against any
of the parties which in the reasonable belief of any of them, is material
to this agreement, in light of the other party's business, prospects,
properties or financial condition.
8.02 Manner of Termination: Any termination of this Agreement shall be made in
accordance with the above listed grounds and if terminated by a corporation,
shall be evidenced by written resolution of the terminating party's board of
Directors. Written notice of termination shall be given to the other parties as
required under the Agreement as promptly as is practical under the
circumstances. Upon the party's receipt of such termination notice, the
<PAGE>
Agreement shall terminate and the transactions herein contemplated shall be
abandoned without further action by the parties.
8.03 Survival of Confidential Provisions: Upon termination of this Agreement for
any reason:
i) the covenants of the parties concerning confidentiality and the
proprietary nature of all documents and other information furnished
hereunder shall remain in force except as to information which has
otherwise become public knowledge, and
ii) each party shall promptly return all documents received from the other
party in connection with this Agreement. This section constitutes a mutual
covenant of the parties and each may judicially enforce it.
9. Necessary Information: MWCI shall furnish to the Purchaser promptly upon its
request all information regarding MWCI and its business, assets, properties, and
financial condition which, in the judgment of the Purchaser, is necessary to
enable the Purchaser to conduct its due diligence examination relating to the
proposed purchase of the Control Shares. Each of the parties hereto shall
furnish to the others all information concerning such party as may be required
for inclusion in any application or statement to be filed or made by the other
party with or to any governmental agency or other third party in connection with
the proposed sale of the Control Shares.
10. Miscellaneous Provisions: The parties and each of them further agree that:
a) Amendments: This Agreement may be amended, modified, or supplemented
only by instrument in writing executed by all parties.
b) Assignment: No assignment of this Agreement shall be effective without
the written consent of the other parties and no such assignment shall
relieve the assignor of any obligations hereunder, except as may be
expressly released by the other parties.
c) Parties in Interest; No Third Party Beneficiaries: Except as otherwise
provided herein, the terms and conditions of this Agreement shall enure to
the benefit of and be binding on the parties and their respective heirs,
executors, administrators, successors and assigns. Neither this Agreement
nor any other agreement contemplated hereby shall, by itself, be deemed to
confer upon any person not a party hereto or thereto, any rights or
remedies hereunder or thereunder.
d) Entire Agreement.This Agreement and the agreements contemplated hereby
constitute the entire agreement of the parties regarding the subject matter
hereof and supersede all prior agreements and understandings, both written
and oral, among the parties or any of them, with respect to the subject
matter hereof.
e) Severability:If any provision of this Agreement should be held to be
<PAGE>
illegal, invalid or unenforceable under present or future laws effective
during the term hereof, such provision shall be fully severable and this
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision never comprised a part thereof; and the remaining
provisions hereof shall remain in full force and effect and shall not be
affected by the illegal, invalid or unenforceable provision or by its
severance herefrom. Further, in lieu of such illegal, invalid or
unenforceable provision, there shall be added automatically as part of this
Agreement, a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and
enforceable.
f) Survival of Representations, Warranties and Covenants: The
representations, warranties and covenants of all parties contained herein,
shall survive the Closing and all statements contained in any certificate,
exhibit, schedule or other instrument delivered by or on behalf of either
party, shall survive the Closing.
g) Interpretation: This Agreement shall be governed by and construed under
the laws of the State of Nevada and the same shall be interpreted as if all
parties participated equally in its drafting and preparation. The captions
in this Agreement are for reference only and shall not limit or otherwise
effect the interpretation of any of the terms or provisions hereof.
h) Gender and Number, etc.; Wherever the context requires, the gender of
all words used herein shall include the masculine, feminine and neuter and
the number of all words shall include the singular and plural. Use of the
words "herein", "hereof" and the like shall be construed as references to
this Agreement as a whole and not to any particular article, section or
provision, unless otherwise specified.
i) Confidentiality: Each party shall keep this Agreement and its terms
confidential and shall make no press release or public disclosure, either
written or oral, regarding the transactions contemplated by this Agreement,
without the prior knowledge and consent of the other parties hereto;
provided that the foregoing shall not prohibit or apply to any disclosure
i) by press release, Form 8-K filing or otherwise, that is required by
federal securities laws, and
ii) to attorneys, accountants, investment bankers, or other agents of
the parties, assisting the parties in connection with the transactions
contemplated under this Agreement. In the event that the transactions
contemplated hereby are not consummated for any reason whatsoever, the
parties hereto agree not to disclose or use any confidential
information they may have concerning the affairs of the other parties,
except for information that is required by law to be disclosed.
j) Notice: Any notice or communication hereunder or in any agreement entered
into in connection with the transactions contemplated hereby, must be in
writing and given by depositing same in the mail, addressed to the party to
be notified, postage prepaid, and registered or certified with return
receipt requested, by telefax transmission, or by delivery by use of a
messenger which regularly retains its delivery receipts. Such notice
shall be deemed to be received on the fourth day following such posting or
delivery. The addresses of the parties are those set forth herein and as
may be changed from time to time by any party by written notice to the
others in accordance with this paragraph.
<PAGE>
k) No Finders: Subject as may previously have been disclosed in writing,
each party represents and warrants to the others and agrees that it has not
employed or engaged and will not employ or engage, any person as a finder
or broker in connection with the transactions contemplated herein, and that
no person is entitled to compensation as a finder or broker. Each party
hereby agrees to indemnify the other parties and holds the other parties
harmless from and against any claims of any third person claiming to have
acted as a finder or broker in connection with the transactions herein
contemplated, and such indemnity shall include all expenses, costs and
damages arising from or related to such claims, including reasonable legal
fees.
l) Expenses: Except as may otherwise be expressly provided herein, each
party shall pay its costs and expenses incurred in connection with the
Exchange and any other foregoing proposed transactions. The Purchaser will
pay for any audit of MWCI.
m) Counterparts: This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original, and all of which together shall
constitute one and the same instrument. Execution and delivery of this
Agreement by exchange of facsimile copies bearing a facsimile signature of
a party shall constitute a valid and binding execution and delivery of this
Agreement by such party. Such facsimile copies shall constitute enforceable
original documents.
n) Prevailing Party Clause. In the even of any litigation or proceeding
arising as a result of a breach of this Agreement, or the failure to
perform hereunder, or failure or untruthfulness of any representation or
warranty herein, the party or parties prevailing in such litigation or
proceeding shall be entitled to collect the costs and expenses of bringing
or defending such litigation or proceeding, including reasonable attorney
fees, from the party or parties not prevailing.
o) Specific Performance: All parties agree that his legal remedy for
damages, based upon the breach by them of their respective obligations
under this Agreement will be inadequate to the other parties and that in
addition to any other remedies a Party may have, the aggrieved Party shall
be entitled to obtain specific performance of this Agreement and temporary
and permanent injunctive relief, without the necessity of proving actual
damages.
IN WITNESS WHEREOF all the parties have executed this Agreement, having
initialed each page, as of the dates indicated below:
Witness: Party:
"Braden Marr" "Rick Antoine"
- ------------------------------- --------------------------------
Rick Antoine Date: May 13, 1997
"M. McTaggart" "Stephen Grant"
- ------------------------------ ---------------------------------
Stephen Grant Date: May 13, 1997
<PAGE>
"Duane Bemister" "Tim Zboyovsky"
- ------------------------------ ----------------------------------
Tim Zboyovsky Date: May 13, 1997
Canadian Pacific Mortgage Corp. Channel i Inc.
per Per____"Robert Clarke"________________
"William Krebs" President Date: May 13, 1997
- -------------------------
Major Wireless Communications Inc.
Per:__"Rick Antoine"__________________
President
__"William Krebs"________________
Secretary Date: May 13, 1997
<PAGE>
Schedule "A" - Release of Shares:
MWCI is a development stage company which has developed and has certain
proprietary rights to technology allowing for the wireless transmission of both
voice and data. Its initial move to the marketplace is in the field of internet
delivery in which its wireless systems will be licensed to internet providers
for a fee. The following schedule references the various stages of such
marketing. "Prototype" refers to the complete system enabling such wireless
transmission. "License agreements" refers to the agreements between MWCI and
individual Internet servers for the use of MWCI's system and "Gross revenue"
includes all cumulative revenue generated by MWCI whether from License fees, the
lease or sale of equipment or otherwise, but does not include any taxes required
to be collected by MWCI with respect to same.
Event % of shares released
Prototype development completed 5%
Prototype operational in one community 10%
25 Non-conditional License agreements
signed with non-refundable deposits received 15%
25 Licensees operational utilizing the system 15%
Gross revenue exceeds $10 million CDN 25%
Gross revenue exceeds $25 million CDN 30%
<PAGE>
This Agreement entered into this 13th day of May, 1997.
BETWEEN:
RICK ANTOINE, "Businessman" of Box 538, Salmon Arm, BC., Canada, V1E 4N6,
STEPHEN GRANT, "Businessman" of 3702 Wilho Rd., Sorrento, BC., Canada, V0E 1W0,
TIM ZBOYOVSKY, "Businessman" of Box 142, Salmon Arm, BC., Canada, V1E 4N2
And
PACIFIC WESTERN MORTGAGE CORP., a body corporate, incorporated under the laws of
the Province of British Columbia, Canada, with offices at 300 Stewart Road, Salt
Spring Island, BC., Canada, V8K 2C4 (hereafter called the "Vendors")
AND:
CHANNEL i INC., a body corporate, incorporated under the laws of the State of
Nevada, United States of America, with offices at 700, 555 West Hastings St.,
Vancouver, British Columbia, Canada, V6B 4N5 (hereafter called the "Purchaser")
WHEREAS:
The parties hereto entered into a Share Exchange Agreement this date under the
terms of which the Vendors are to receive certain Exchange Shares, consisting of
4,000,000 Series B Voting Convertible Preferred Stock, $.001 par value per
share;
The said Exchange Shares are convertible into 10 Common Shares of the Company's
stock at the option of the holder;
<PAGE>
The said Exchange Shares are subject to being held by the Corporate Secretary
pending certain performance by Major Wireless Communications Inc. as more
particularly defined therein;
All parties hereto are aware that it is in the best interests of the Purchaser
and its Common Stock performance on the open market, and therefore also in the
best interests of each of the Vendors, that the exercise of the right to
conversion of the said Exchange Shares into Common Shares not be effected until
Major Wireless Communications Inc. has succeeded in attaining such performance;
NOW THEREFORE, in consideration of the mutual benefit to all Parties hereto, the
Parties agree as follows:
1. The Vendors and each of them jointly and severally agree not to exercise
their right to convert the said Exchange Shares to be issued in their
respective names as a result of the said Share Exchange Agreement, until such
time as Major Wireless Communications Inc. has attained the performance levels
set forth in Schedule A to that agreement.
2. The Vendors and each of them agree that the Company Secretary together with
any other appropriate stock agent, may rely on this agreement as both permission
and authority not to effect such conversion until both a request is received
from the holder of such Exchange Shares and Major Wireless Communications Inc.
has attained the said performance levels.
3. In the event of a dispute as to whether or not Major Wireless Communications
Inc. has attained the said performance levels, the Parties hereto agree to refer
the same to the Company's auditors, who shall make such determination and whose
decision with respect to the same shall be final and binding on the Parties.
4. This agreement is acknowledged by the Parties to have been entered into and
executed in counterpart, subsequent to the said Share Exchange Agreement, but
shall nevertheless be binding on the Parties hereto, their respective heirs,
executors, administrators, successors and assigns.
5. In all respects the Parties hereto ratify and confirm the terms of the said
Share Exchange Agreement.
IN WITNESS WHEREOF, all of the Parties hereto have executed this agreement
effective the above date.
Witness: Party:
"Mary McTaggert" "Rick Antoine"
- -------------------------- ---------------------------
Rick Antoine
"Mary McTaggert" "Stephen Grant"
- ---------------------------- ---------------------------
Stephen Grant
"Mary McTaggert" "Tim Zboyovsky"
- ---------------------------- --------------------------
Tim Zboyovsky
<PAGE>
Pacific Western Mortgage Corp.
" William Krebs"
Per: ____________________________
Channel i Inc.
"Robert Clarke"
Per: ____________________________
