EXHIBIT 10.4
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER SECURITIES ACT OF
1933 (THE "ACT"), AND ARE PROPOSED TO BE ISSUED IN RELIANCE UPON AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE ACT PROVIDED BY REGULATION S
PROMULGATED UNDER THE ACT. UPON ANY SALE, SUCH SECURITIES MAY NOT BE REOFFERED
FOR SALE OR RESOLD OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF REGULATION S, PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE ACT,
OR PURSUANT TO AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT. HEDGING
TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLES: COMPLIANCE
WITH THE ACT.
THIS DEBT SETTLEMENT AGREEMENT (hereinafter referred to as the "Agreement"),
dated as of December 20, 2006, is entered into by Winslow Associates Management
& Communication Inc., a private corporation existing under the laws of the
Province of British Columbia (the "Lender"), and WorldStar Energy Corp. (the
"Debtor"), a Nevada corporation whose shares are publicly traded on the National
Association of Securities Dealers' Over the Counter Bulletin Board Service (NASD
OTC:BB) under the trading symbol "WSTR".
WHEREAS, the Debtor is indebted to the Lender for the reasons and in the amount
set out in Schedule "A" to the Agreement (the "Debt");
AND WHEREAS, the Debtor and the Lender desire to resolve the Debt between the
Debtor and Lender and to fully and finally settle the subject matter of the
aforementioned Debt and all claims that could be made in connection therewith.
NOW THEREFORE WITNESSETH that in consideration of the mutual promises and
covenants contained herein, the parties agree as follows:
1. SETTLEMENT AMOUNT. As repayment in full of the Indebtedness the Debtor will
issue to the Lender an aggregate of 500,000 common shares in the capital stock
of the Debtor (the "Shares") a deemed price of US$ 179,705.
2. LENDER'S STATUS AND REG S REPRESENTATIONS. The Lender represents and warrants
to the Debtor that the Lender is not a "U.S. Person" as defined by Regulation S
of the Act and is in acquiring the Shares for the account or benefit of a U.S.
Person. The Lender represents and warrants that the Lender was not in the United
States at the time of the offering of the Shares in consideration of the
settlement of the Indebtedness or at the time that this Agreement was executed.
The Lender acknowledges that the offering of the Shares by the Debtor has not
been reviewed by the SEC. The Lender acknowledges that the Shares will be issued
to the Lender in accordance with Regulation S under the Act, and that the Shares
will be "restricted securities" within the meaning of the Act in that
1
they are being offered by the Debtor in a transaction not involving a public
offering, and that as such, under the Act and applicable regulations the Shares
may be resold without registration under the Act only in certain limited
circumstances. In this regard, the Lender agrees to resell the Shares only in
accordance with the provisions of Regulation S of the Act, pursuant to
registration under the Act, or pursuant to an available exemption from
registration under the Act. The Lender agrees not to engage in hedging
transactions with regard to the Shares unless in compliance with the Act. The
Lender acknowledges and agrees that the Debtor will refuse to register any
transfer of the Shares not made in accordance with the provisions of Regulation
S of the Act, pursuant to registration under the Act, pursuant to an available
exemption from registration, or pursuant to this Agreement. The Shares will be
restricted shares and will bear the appropriate restrictive legend.
3. RELEASE BY THE LENDER. Upon issuance of the Shares in the name of the Lender,
the Indebtedness will be deemed to have been repaid in full by the Debtor and
the Lender does hereby fully and forever remise, release and discharge, and by
these presents, does for its agents, servants, past, present or future officers,
shareholders, directors, employees, attorneys, representatives, parents,
subsidiaries, subdivision, affiliated or related entities, affiliates,
executors, administrators, predecessors, successors and assigns, remise, release
and discharge the Debtor and any of their agents, servants, past, present or
future officers, shareholders, directors, employees, attorneys, representatives,
parents, subsidiaries, subdivision, affiliated or related entities, affiliates,
executors, administrators, predecessors, successors and assigns, from any and
all actions, causes of action, suits, debts, dues, sums of money, interest,
penalties, accounts, reckonings, bonds, bills, specialties, covenants,
contracts, controversies, agreements, promises, variances, trespasses, damages,
judgments, extents, executions, claims and demands whatsoever in law or in
equity, under federal or state constitutions, statutes, laws, ordinances or
regulations, or under common law, whether known or unknown, foreseen or
unforeseen, which the Lender ever had, has or could have against the Debtor in
connection with the subject matter relating to the Indebtedness, but does not
release the Debtor from claims arising from a breach of this Agreement.
4. RELEASE BY THE DEBTOR. For and in consideration of the release set forth
above and for other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged by the Debtor, the Debtor does hereby jointly
and severally fully and forever remise, release and discharge, and by these
presents, do for their respective agents, servants, past, present or future
officers, shareholders, directors, employees, attorneys, representatives,
parents, subsidiaries, subdivision, affiliated or related entities, affiliates,
executors, administrators, predecessors, successors and assigns, remise, release
and discharge, the Lender and any of its agents, servants, past, present or
future officers, shareholders, directors, employees, attorneys, representatives,
parents, subsidiaries, subdivision, affiliated or related entities, affiliates,
executors, administrators, predecessors, successors and assigns, from any and
all actions, causes of action, suits, debts, dues, sums of money, accounts,
reckonings, bonds, bills, specialties, covenants, contracts, controversies,
agreements, promises, variances, trespasses, damages, judgments, extents,
executions, claims and demands whatsoever in law or in equity, under federal or
state constitutions, statutes, laws, ordinances or regulations, or under common
law, whether known or unknown, foreseen or unforeseen, which the Debtor ever
had, has or could have against the Lender in connection with the
2
subject matter relating to the aforementioned dispute, but does not release the
Lender from claims arising from a breach of this Agreement or the subscription
agreement to be entered into in respect of the Shares.
5. EFFECTIVE TIME OF RELEASES. The releases described above shall become
effective immediately upon the delivery by the Debtor to the Lender of the
Shares registered in the name of the Lender.
6. EXISTENCE AND RIGHTS. The Debtor is a corporation duly organized, validly
existing, qualified to conduct business, and in good standing under the laws of
the State of Nevada.
7. CORPORATE AUTHORIZATION. The Debtor has taken or will take all corporate
action, necessary to execute, deliver and perform this Agreement.
8. NO CONFLICT. The execution, delivery and performance of this Agreement and of
the related documents by the Debtor will not violate any provision of their
respective constating documents; or violate any law or rule or regulation of any
administrative agency or governmental body; or any order, writ, injunction or
decree of any court, arbiter, administrative agency or governmental authority
having jurisdiction over either of them; or violate any indenture, mortgage,
contract, will, agreement or other undertaking to which either of them is a
party or is subject, or result in the creation or imposition of any lien or
encumbrance on any of the properties of the Debtor under any of the foregoing.
9. NOTICES. Any notice or other communication required or permitted hereunder
shall be deemed given if in writing and delivered personally, telegraphed,
telexed, sent by facsimile transmission or sent by certified, registered or
express mail, postage prepaid. Any such notice shall be deemed given when so
delivered personally or sent by overnight air courier or facsimile transmission
or, if mailed, two days after the date of mailing, as follows:
If to the Debtor:
WorldStar Energy Corp.,
65 - 468 Seymour Street
Vancouver, British Columbia V6B 3H1
Attention : President
If to the Lender:
Winslow Associates
Management & Communications Inc. 4107
Dominion Street
Burnaby, British Columbia V5G 1C5
Attention : Michael W. Kinley, President
3
10. LAW GOVERNING AGREEMENT. This Agreement is made and entered into and is to
be at least partially performed in Vancouver, British Columbia. It shall be
interpreted, construed and enforced and its construction and performance shall
be governed by the laws of the Province of British Columbia applicable to
Agreements made and to be performed entirely within such Province without regard
to principles of conflicts of laws, except to the extent that Canadian federal
and U.S. federal law may apply.
11. This Agreement may be executed in any number of counterparts and by
facsimile, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
12. Time is of the essence of this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the date
first set forth hereinabove, as evidenced by their respective signatures below.
/s/ MICHAEL W. KINLEY
___________________________
WorldStar Energy, Corp.
/s/ MICHAEL W. KINLEY
___________________________
Winslow Associates
Management & Communications Inc.
4
SCHEDULE "A"
Issuance of Shares to Settle Debt
Amount of Debt Deemed Price of Shares Number of Shares
to be Issued
US$ 179,705 US$0.35941 500,000
REASONS DEBT INCURRED
The Debtor incurred the Debt by receiving services from the Lender.
TOTAL US$ 179,705
5