ACQUISITION AGREEMENT AND PLAN OF REORGANIZATION
ZiaSun Technologies, Inc.
A Nevada Corporation
ACQUISITION OF SHARES OF
Xxxx0xxxx.xxx, Ltd.
A Hong Kong Registered Company
Dated: March 25, 1999
Table of Contents Page
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1 EXCHANGE OF SECURITIES .......................................... 1
1.1 Exchange of Shares ..................................... 1
1.2 Acquisition Consideration .............................. 1
1.3 Payment of Acquisition Consideration ................... 2
1.4 Calculation of Actual Xxxx0xxxx.xxx Earnings.......... 2
1.5 Adjustment Based on Actual Xxxx0xxxx.xxx Earnings..... 2
1.6 Exemption from Registration............................. 3
1.7 Non-taxable Transaction................................. 3
2. REPRESENTATION AND WARRANTIES OF Xxxx0xxxx.XXX AND THE
SHAREHOLDERS .................................................... 3
2.1 Organization ........................................... 3
2.2 Capital Stock .......................................... 3
2.3 Options, Warrants, Rights, etc. ........................ 3
2.4 Subsidiaries ........................................... 3
2.5 Directors and Officers.................................. 3
2.6 Financial Statements.................................... 3
2.7 Absence of Changes...................................... 4
2.8 Absence of Undisclosed Liabilities...................... 4
2.9 Tax Returns............................................. 4
2.10 Patents, Trade Names and Rights......................... 4
2.11 Compliance with Laws.................................... 4
2.12 Litigation.............................................. 4
2.13 Authority............................................... 5
2.14 Ability to Carry Out Obligations........................ 5
2.15 Full Disclosure......................................... 5
2.16 Assets................................................... 5
2.17 Material Contracts...................................... 5
3. REPRESENTATIONS AND WARRANTIES OF ZIASUN ........................ 5
3.1 Organization............................................ 5
3.2 Capital Stock........................................... 5
3.3 Options, Warrants, Rights, etc. ........................ 6
3.4 Non-Reporting Publicly Traded Status ................... 6
3.5 Subsidiaries ........................................... 6
3.6 Directors and Officers ................................. 6
3.7 Patents, Trade Names and Rights......................... 6
3.8 Compliance with Laws.................................... 6
3.9 Litigation.............................................. 6
3.10 Authority............................................... 6
3.11 Ability to Carry Out Obligations........................ 7
3.12 Full Disclosure......................................... 7
3.13 Assets.................................................. 7
4. COVENANTS........................................................ 7
4.1 Investigative Rights.................................... 7
4.2 Conduct of Business..................................... 7
Table of Contents(continued) Page
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5. CLOSING ..................................................... 7
5.1 Closing............................................... 7
5.2 Shareholders' Deliveries at Closing................... 7
5.3 ZiaSun's Deliveries at Closing........................ 8
6 CONDITIONS TO OBLIGATIONS TO CLOSE............................ 8
6.1 Conditions to Obligations of Xxxx0xxxx.xxx
Shareholders to Close................................. 8
6.2 Conditions to Obligations of ZiaSun .................. 8
7. INDEMNIFICATION................................................. 8
7.1 Indemnification by Shareholders....................... 8
7.2 Indemnification by ZiaSun ............................ 9
7.3 Notice and Opportunity to Defend...................... 9
8. MISCELLANEOUS.................................................. 10
8.1 Costs................................................. 10
8.2 Additional Documentation.............................. 10
8.3 Captions and Headings................................. 10
8.4 No Oral Change........................................ 10
8.5 Non-Waiver............................................ 10
8.6 Time of Essence....................................... 10
8.7 Choice of Law......................................... 10
8.8 Counterparts and/or Facsimile Signature............... 10
8.9 Notices............................................... 10
8.10 Binding Effect........................................ 11
8.11 Mutual Cooperation.................................... 11
8.12 Brokers............................................... 11
8.13 Survival of Representations and Warranties............ 11
Signature Pages ...................................... 12
EXHIBIT 1.2(a)....CASH DISTRIBUTED TO THE Xxxx0xxxx.XXX
SHAREHOLDERS AT CLOSING
EXHIBIT 1.3.1.....SHARES TO BE ISSUED TO Xxxx0xxxx.XXX
SHAREHOLDERS AT CLOSING
EXHIBIT 1.6.......INVESTMENT LETTER
EXHIBIT 2.4.......SUBSIDIARIES OF Xxxx0xxxx.XXX
EXHIBIT 2.5.......PRESENT OFFICERS AND DIRECTORS OF Xxxx0xxxx.XXX
EXHIBIT 2.6.......AUDITED FINANCIAL STATEMENTS OF Xxxx0xxxx.XXX
EXHIBIT 2.8.......LIABILITIES OF Xxxx0xxxx.XXX
EXHIBIT 2.12......Xxxx0xxxx.XXX LITIGATION AND LEGAL PROCEEDINGS
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Table of Contents (continued) Page
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EXHIBIT 2.16......EXCEPTIONS TO GOOD TITLE TO ASSETS
OF Xxxx0xxxx.XXX
EXHIBIT 2.17......MATERIAL CONTRACTS OF Xxxx0xxxx.XXX
EXHIBIT 3.5...... SUBSIDIARIES OF ZIASUN
EXHIBIT 3.6...... PRESENT OFFICERS AND DIRECTORS OF ZIASUN
EXHIBIT 3.13......EXCEPTIONS TO GOOD TITLE TO ASSETS OF ZIASUN
EXHIBIT 5.2.3.....POST CLOSING OFFICERS AND DIRECTORS OF
Xxxx0xxxx.XXX
EXHIBIT 8.12......BROKERS
iii
AGREEMENT
This Acquisition Agreement and Plan of Reorganization (the "Agreement" or
"Acquisition Agreement") made this 25th day of March, 1999, is by and among
ZiaSun Technologies, Inc., a Nevada Corporation ("ZiaSun") and the undersigned
shareholders (the "Shareholders") who are the owners of 100% of the capital
stock of Xxxx0xxxx.xxx, Ltd., a corporation organized and existing under the
laws of Hong Kong ("Xxxx0xxxx.xxx").
A. Whereas, Shareholders hold all of the issued and outstanding common
stock of Xxxx0xxxx.xxx; and
B. Whereas, ZiaSun, a non-reporting public company, desires to exchange
shares of its Common Stock, $0.001 par value (the "Common Stock") for all of the
issued and outstanding capital stock of Xxxx0xxxx.xxx held by the
Shareholders, thereby making Xxxx0xxxx.xxx a wholly owned subsidiary of
ZiaSun; and
C. Whereas, Shareholders desire to exchange all of the issued and
outstanding capital stock of Xxxx0xxxx.xxx for acquisition consideration
consisting of $15,000.00 and 50,000 shares of the common stock of ZiaSun, as
adjusted and determined pursuant to the terms of this agreement, all as more
fully set forth herein below; and
D. Whereas, the Board of Directors of ZiaSun has authorized its proper
corporate officers to effect the transactions contemplated herein.
AGREEMENT
NOW THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree to the following terms
and conditions:
1. EXCHANGE OF SECURITIES.
1.1. Exchange of Shares. Subject to all the terms and conditions set forth
in this Agreement, in exchange for the acquisition consideration (the
"Acquisition Consideration"), as set forth in paragraph 1.2 hereof, paid by
ZiaSun to the Shareholders of Xxxx0xxxx.xxx, ZiaSun shall acquire all of the
issued and outstanding capital stock of Xxxx0xxxx.xxx (the "Xxxx0xxxx.xxx
Shareholders") owned by the Shareholders of Xxxx0xxxx.xxx.
1.2. Acquisition Consideration. The total Acquisition Consideration to be
paid by ZiaSun for the Xxxx0xxxx.xxx Shares shall be equal to: (a) Cash in the
amount of $15,000 distributed prorata to the Xxxx0xxxx.xxx Shareholders as set
forth in Exhibit 1.2(a) attached hereto, (b) 50,000 shares of the previously
authorized but unissued unregistered and restricted shares of the Common Stock,
$0.001 par value per shares of ZiaSun (the "ZiaSun Shares"), and (c) one (1)
additional ZiaSun Share for each Two dollars ($2.00) of actual earnings of
Xxxx0xxxx.xxx ("Actual Xxxx0xxxx.xxx Earnings") for the period from April 1,
1999 through September 31, 2000 (the "Earnings Period"). The Acquisition
Consideration shall be adjusted as determined pursuant to paragraph 1.6 of this
Agreement. In addition, concurrently with the Closing, ZiaSun agrees to make a
loan to Xxxxxxxxxx.xxx in the principal amount of $50,000. Said loan shall bear
interest at the rate of 6.0% per annum the principal and unpaid accrued interest
due and payable in one year.
Page 1
1.3 Payment of Acquisition Consideration. The Acquisition Consideration
shall be paid and delivered as follows:
1.3.1 Upon the Closing as set forth in paragraph 5.1, 50,000 ZiaSun
Shares shall be issued and delivered to the Xxxx0xxxx.xxx Shareholders as
set forth in Exhibit 1.3.1; and
1.3.2 $15,000 payable prorata to the Xxxx0xxxx.xxx Shareholders as
set forth in Exhibit 1.3.2.
1.4 Calculation of Actual Xxxx0xxxx.xxx Earnings. For the purpose of this
Agreement, Actual Xxxx0xxxx.xxx Earnings for the Earnings Period shall be
calculated based on EBITDA determine in accordance with general accepted
accounting principals. Actual Xxxx0xxxx.xxx Earnings shall mean the total
gross sales of Xxxx0xxxx.xxx less the costs of sales, less general
administrative expenses before interest, taxes, depreciation and amortization.
As soon as practicable, but in no event later than ninety (90) days following
the end of the Earnings Period, the independent auditors of ZiaSun shall
calculate the Actual Xxxx0xxxx.xxx Earnings for the Earnings Period. In the
event that the parties disagree on the determination of the Actual
Xxxx0xxxx.xxx Earnings, then ZiaSun, on the one hand, shall designate one (1)
independent auditor, at its expense and the Xxxx0xxxx.xxx Shareholders
collectively as a group, on the second hand, shall designate one (1) independent
auditor, at its expense. The two designated independent auditors, shall choose a
third independent auditor, at the joint expense of the parties. In no event
shall there be more than three (3) independent auditors. Each independent
auditor shall make a determination of the Actual Xxxx0xxxx.xxx Earnings during
the Earnings Period. If a majority of the independent auditors concur on the
Actual Xxxx0xxxx.xxx Earnings during the Earnings Period that value shall be
binding and conclusive. If a majority of the independent auditors do not concur,
then the determination of the independent auditor whose appraisal is neither the
highest nor lowest shall be binding and conclusive.
1.5 Adjustment Based on Actual Xxxx0xxxx.xxx Earnings. Adjustments based
on the Actual Xxxx0xxxx.xxx Earnings shall be made as follows:
(a) Increase Adjustment. For each $2.00 of Actual lAsia4sale Earnings
during the Earnings Period, ZiaSun shall issue an aggregate of one (1)
additional share of restricted common stock to be distributed prorata to the
Xxxx0xxxx.xxx Shareholders as set forth on Exhibit 1.3.1.
(b) Fractional Shares. No fractional shares shall be issued and all
fractions shall be rounded down to the next whole share.
Page 2
1.6 Exemption from Registration. The parties hereto intend that the ZiaSun
Shares to be exchanged shall be exempt from the registration requirements of the
Securities Act of 1933, as amended (the "Act"), pursuant to Section 4(2) of the
Act and the rules and regulations promulgated thereunder and exempt from the
registration requirements of the applicable states. In furtherance thereof,
Shareholders will execute and deliver to ZiaSun on the closing date, investment
letters suitable to legal counsel for ZiaSun, in form substantially as set forth
in Exhibit 1.6 attached hereto.
1.7 Non-taxable Transaction. The parties intend to effect this transaction
as a non-taxable reorganization pursuant to Section 368(a)(1)(B) of the Internal
Revenue Code of 1986, as amended.
2. REPRESENTATIONS AND WARRANTIES OF Xxxx0xxxx.XXX AND THE SHAREHOLDERS.
The Officers and Directors of Xxxx0xxxx.xxx and certain Shareholders (the
"Warranting Shareholders") hereby represent and warrant to ZiaSun that:
2.1 Organization. Xxxx0xxxx.xxx is a corporation duly organized, validly
existing and in good standing under the laws of Hong Kong, and has all necessary
corporate powers to own its properties and to carry on its business as now owned
and operated by it, and is duly qualified to do business and is in good standing
in each of the countries where its business requires qualification.
2.2 Capital Stock. The authorized capital stock of Xxxx0xxxx.xxx consists
of 10,000 ordinary shares, HK$1.00 par value per share, of which 100 shares are
issued and outstanding. Immediately prior to closing there shall be 100
Xxxx0xxxx.xxx Shares issued and outstanding all of which are owned by the
Shareholders. All of the issued and outstanding shares of capital stock of
Xxxx0xxxx.xxx are duly and validly issued, fully paid and nonassessable. There
are no other authorized class of capital stock.
2.3 Options, Warrants, Rights, etc. There are no outstanding subscriptions,
options, rights, warrants, debentures, instruments, convertible securities or
other agreements or commitments obligating Xxxx0xxxx.xxx to issue or to
transfer from treasury any additional shares of its capital stock of any class.
2.4 Subsidiaries. Xxxx0xxxx.xxx has no subsidiaries and owns no interest
in other enterprises except as set forth on Exhibit 2.4 attached hereto.
2.5 Directors and Officers. Exhibit 2.5 hereto contains the names and
titles of all present officers and directors Xxxx0xxxx.xxx as of the date of
this Agreement.
2.6 Financial Statements. Within sixty (60) days of the Close of the
acquisition contemplated by this agreement, Xxxx0xxxx.xxx will provide audited
financial statements to ZiaSun, which financial statements will be prepared in
accordance with generally accepted accounting principles and practices
consistently followed by Xxxx0xxxx.xxx throughout the periods indicated, and
will fairly present the financial position of Xxxx0xxxx.xxx as of the dates of
the balance sheets included in the financial statements and the results of
operations for the periods indicated.
Page 3
2.7 Absence of Changes. The financial statements which will be provided
pursuant to paragraph 2.6, will reflect that since the date of said financial
statements, there has not been any change in the financial condition or
operations of Xxxx0xxxx.xxx, except for changes in the ordinary course of
business, which changes have not, in the aggregate, been materially adverse.
2.8 Absence of Undisclosed Liabilities. Except as set forth on Exhibit 2.8
attached hereto, Xxxx0xxxx.xxx does not have any material debt, liability or
obligation of any nature, whether accrued, absolute, contingent or otherwise,
and whether due or to become due, that will not be reflected in the balance
sheet of Xxxx0xxxx.xxx included in the financial statements to be provided
pursuant to paragraph 2.6.
2.9 Tax Returns. Within the times and in the manner prescribed by law,
Xxxx0xxxx.xxx has filed all tax returns in all countries where it is bound by
law to pay taxes, including, but not limited to any U.S. federal, state and
local tax returns as required by U.S. law. Xxxx0xxxx.xxx has paid all taxes,
assessments and penalties due and payable. The provisions for taxes, if any
reflected in the Exhibits are adequate for the periods indicated. There are no
present disputes as to taxes of any nature payable by Xxxx0xxxx.xxx.
2.10 Patents, Trade Names and Rights. To the best of its knowledge
Xxxx0xxxx.xxx and its subsidiaries (if any) own and hold all necessary
patents, franchise rights, trademarks, service marks, trade names, inventions,
processes, know-how, trade secrets, copyrights, licenses and other rights
necessary to its business, and the business of its subsidiaries as now conducted
or proposed to be conducted. Xxxx0xxxx.xxx and its subsidiaries are not
infringing upon or otherwise acting adversely to the right or claimed right of
any person with respect to any of the foregoing.
2.11 Compliance with Laws. Xxxx0xxxx.xxx and each of its subsidiaries
have complied with, and are not in violation of any laws or regulations in any
of the countries in which they do business. This includes, but is not limited
to, any applicable U.S. federal, state or local statutes, laws and regulations
(including, without limitation, any applicable building, zoning or other law,
ordinance or regulation) affecting its properties or the operation of its
business.
2.12 Litigation. Except as set forth in Exhibit 2.12 attached hereto,
neither Xxxx0xxxx.xxx or any of its subsidiaries is a defendant to any suit,
action, arbitration or legal, administrative or other proceeding, or
governmental investigation which is pending or, to the best knowledge of the
Shareholders, threatened against or affecting Xxxx0xxxx.xxx or its
subsidiaries or their business, assets or financial condition. Xxxx0xxxx.xxx
and its subsidiaries are not in default with respect to any order, writ,
injunction or decree of any federal, state, local or foreign court, department,
agency or instrumentality applicable to it. Xxxx0xxxx.xxx and its subsidiaries
are not engaged in any material lawsuits to recover moneys due it.
Page 4
2.13 Authority. The Board of Directors of Xxxx0xxxx.xxx has authorized
the execution of this Agreement and the consummation of the transactions
contemplated herein, and Xxxx0xxxx.xxx has full power and authority to
execute, deliver and perform this Agreement, and this Agreement is a legal,
valid and binding obligation of the Shareholders and is enforceable in
accordance with its terms and conditions.
2.14 Ability to Carry Out Obligations. The execution and delivery of this
Agreement by the Shareholders and the performance by the Shareholders of their
obligations hereunder in the time and manner contemplated will not cause,
constitute or conflict with or result in (a) any breach or violation of any of
the provisions of or constitute a default under any license, indenture,
mortgage, instrument, article of incorporation, bylaw, or other agreement or
instrument to which Xxxx0xxxx.xxx is a party, or by which it may be bound, nor
will any consents or authorizations of any party to the Shareholders'
performance of their obligations hereunder be required; (b) an event that would
permit any party to any agreement or instrument to terminate it or to accelerate
the maturity of any indebtedness or other obligation of Xxxx0xxxx.xxx; or (c)
an event that would result in the creation or imposition of any lien, charge or
encumbrance on any asset of Xxxx0xxxx.xxx.
2.15 Full Disclosure. None of the representations and warranties made by
Xxxx0xxxx.xxx, its officers, directors of the Shareholder herein or in any
exhibit, certificate or memorandum furnished or to be furnished by the
Shareholders, or on their behalf, contain or will contain any untrue statement
of material fact or omit any material fact the omission of which would be
misleading.
2.16 Assets. Except as otherwise indicated in Exhibit 2.16 attached hereto,
Xxxx0xxxx.xxx and each of its subsidiaries (if any) has good and marketable
title to all of its property, free and clear of all liens, claims and
encumbrances.
2.17 Material Contracts. Material contracts of Xxxx0xxxx.xxx are set
forth in Exhibit 2.17, attached hereto an incorporated herein.
3. REPRESENTATIONS AND WARRANTIES OF ZIASUN.
ZiaSun represents and warrants to Xxxx0xxxx.xxx and the Shareholders
that:
3.1 Organization. ZiaSun is a corporation duly organized, validly existing
and in good standing under the laws of the State of Nevada, has all necessary
corporate powers to own its properties and to carry on its business as now owned
and operated by it, and is duly qualified to do business and is in good standing
in each of the states where its business requires qualification.
3.2 Capital Stock. The authorized capital stock of ZiaSun consists of
50,000,000 shares of common stock, $0.001 par value per share (the "Common
Stock") of which 10,465,009 shares are presently issued and outstanding, which.
Immediately prior to Closing there shall not be more the 12,000,000 shares of
Common Stock issued and outstanding. All of the issued and outstanding shares
are duly and validly issued, fully paid and nonassessable. There are no other
authorized class of capital stock.
Page 5
3.3 Options, Warrants, Rights, etc. There are outstanding rights granted to
various shareholders of ZiaSun's subsidiary's under which additional shares may
be issued based on the performance of these subsidiaries. The exact number of
shares which may be issued cannot be calculated with any certainty. There are no
other outstanding subscriptions, options, rights, debentures, instruments,
convertible securities or other agreements or commitments obligation ZiaSun to
issue or to transfer from treasury any additional shares of its Common Stock, or
any other class of securities.
3.4 Non-Reporting Publicly Traded Status. The Common Stock of ZiaSun is
currently listed on the OTC Bulletin Board under the symbol "ZSUN". ZiaSun is a
non-reporting public company. It is not subject to the filing and reporting
requirements of the Securities Exchange Act of 1934 and as such does not file
any period or annual reports with the Securities and Exchange Commission.
3.5 Subsidiaries. Except as set forth in Exhibit 3.5 attached hereto ZiaSun
does not have any other subsidiaries or own any interest in any other
enterprise.
3.6 Directors and Officers. The names and titles of all present officers
and directors of ZiaSun are as set forth on Exhibit 3.6 attached hereto.
3.7 Patents, Trade Names and Rights. To the best of its knowledge ZiaSun
and its subsidiaries own and hold all necessary patents, franchise rights,
trademarks, service marks, trade names, inventions, processes, know-how, trade
secrets, copyrights, licenses and other rights necessary to its business as now
conducted or proposed to be conducted. ZiaSun is not infringing upon or
otherwise acting adversely to the right or claimed right of any person with
respect to any of the foregoing.
3.8 Compliance with Laws. ZiaSun has complied with, and is not in violation
of, applicable federal, state or local statutes, laws and regulations
(including, without limitation, any applicable building, zoning or other law,
ordinance or regulation and all federal and state securities laws (including,
without limitation, the Securities Act of 1933 and the Securities Exchange Act
of 1934) and all material respects NASDAQ rules) affecting its properties or the
operation of its business. To the best of its knowledge all stock of ZiaSun
issued to date has been issued in compliance with all Federal and State
securities laws.
3.9 Litigation. ZiaSun is not a party to any suit, action, arbitration or
legal, administrative or other proceeding, or governmental investigation which
is pending or, to the best knowledge of ZiaSun threatened against or affecting
ZiaSun or its business, assets or financial condition except for suits as
described in its 1934 Act filings. ZiaSun is not in default with respect to any
order, writ, injunction or decree of any federal, state, local or foreign court,
department, agency or instrumentality applicable to it.
3.10 Authority. The Board of Directors of ZiaSun has authorized the
execution of this Agreement and the consummation of the transactions
contemplated herein, and ZiaSun has full power and authority to execute, deliver
and perform this Agreement, and this Agreement is a legal, valid and binding
obligation of ZiaSun enforceable in accordance with its terms.
Page 6
3.11 Ability to Carry Out Obligations. The execution and delivery of this
Agreement by ZiaSun and the performance by the ZiaSun of the obligations
hereunder in the time and manner contemplated will not cause, constitute or
conflict with or result in (a) any breach or violation of any of the provisions
of or constitute a default under any license, indenture, mortgage, instrument,
article of incorporation, bylaw, or other agreement or instrument to which
ZiaSun is a party, or by which it may be bound, nor will any consents or
authorizations of any party to ZiaSun's performance of its obligation hereunder;
(b) an event that would permit any party to any agreement or instrument to
terminate it or to accelerate the maturity of any indebtedness or other
obligation of ZiaSun; or (c) an event that would result in the creation or
imposition of any lien, charge or encumbrance on any asset of ZiaSun.
3.12 Full Disclosure. None of the representations and warranties made by
ZiaSun herein or in any exhibit, certificate or memorandum furnished or to be
furnished by ZiaSun or on its behalf, contains or will contain any untrue
statement of material fact or omit any material fact the omission of which would
be misleading.
3.13 Assets. ZiaSun has good and marketable title to all of its property,
free and clear of all liens, claims and encumbrances, except as otherwise
indicated on Exhibit 3.13 attached hereto.
4. COVENANTS RELATING TO THE PERIOD PRIOR TO CLOSING.
4.1 Investigative Rights. From the date of this Agreement until the Closing
Date, each party shall provide to the other party, and such other party's
counsel, accountants, auditors and other authorized representatives, full access
during normal business hours and upon reasonable advance written notice to all
of each party's properties, books, contracts, commitments and records for the
purpose of examining the same. Each party shall furnish the other party with all
information concerning each party's affairs as the other party may reasonably
request.
4.2 Conduct of Business. Prior to Closing, the Shareholders represent that
Xxxx0xxxx.xxx shall conduct its business in the normal course. Xxxx0xxxx.xxx
shall not amend its Articles of Incorporation or Bylaws (except as may be
described in this Agreement), declare dividends, redeem securities, incur
additional or newly-funded liabilities outside the ordinary course of business,
acquire or dispose of fixed assets, change employment terms, enter into any
material or long-term contract, guarantee obligations of any third party, settle
or discharge any balance sheet receivable for less than its stated amount, pay
more on any liability than its stated amount, or enter into any other
transaction without the prior approval of ZiaSun, not to be unreasonably
withheld.
5. CLOSING.
5.1 Closing. The closing of this transaction shall be held at the offices
of ZiaSun on or before April 10, 1999, or at such other place and time as is
mutually agreeable to the parties, or by FAX and Federal Express.
5.2 Shareholders' Deliveries at Closing. At the Closing, the Shareholders
shall deliver the following items:
Page 7
5.2.1 Certificates representing all of the shares of capital
stock Xxxx0xxxx.xxx held by the Shareholders, along with a stock
power or stock powers with signatures guaranteed, duly executed by the
Shareholders in blank or to ZiaSun Technologies, Inc.;
5.2.2 An investment letter in the form of Exhibit 1.2 hereof,
duly executed by the Shareholders;
5.3 ZiaSun's Deliveries at Closing. At the Closing, ZiaSun shall deliver
the following items:
5.3.1 Either (a) certificates representing the ZiaSun Shares,
duly issued with restrictive legend, to the Shareholders as listed on
Schedule A attached hereto, or (b) a copy of a letter from ZiaSun to
its transfer agent, Signature Stock Transfer, Inc., instructing such
transfer agent to issue the certificates representing the ZiaSun
Shares to the Shareholders as listed on Schedule A.
6. CONDITIONS TO OBLIGATIONS TO CLOSE AND MATERIAL TERMS OF AGREEMENT.
6.1 Conditions to Obligations of Xxxx0xxxx.xxx Shareholders to Close. The
obligations of the Shareholders to consummate the transactions contemplated by
this Agreement shall be subject to the satisfaction of the conditions that the
representations and warranties of ZiaSun shall be true in all material respects
on and as of the Closing Date with the same force and effect as though made on
and as of the Closing date, that ZiaSun shall have performed and complied in all
material respects with all covenants and agreements required by this Agreement
to be performed or complied with by it on or prior to the Closing Date.
6.2 Conditions to Obligations of ZiaSun. The obligations of ZiaSun to
consummate the transactions contemplated by this Agreement shall be subject to
the satisfaction of the conditions that the representations and warranties of
Xxxx0xxxx.xxx and the Shareholders shall be true in all material respects on
and as of the Closing Date with the same force and effect as though made on and
as of the Closing Date, that the Shareholders shall have performed and complied
in all material respects with all covenants and agreements required by this
Agreement and between ZiaSun, its shareholders and Xxxx0xxxx.xxx and related
parties, be performed or complied with by it on or prior to the Closing Date.
7. INDEMNIFICATION.
7.1 Indemnification by Shareholders. The Warranting Shareholders agree to
indemnify, defend and hold the ZiaSun shareholders, ZiaSun, its officers and
directors, harmless against and in respect of any and all claims, demands,
losses, costs, expenses, obligations, liabilities, damages, recoveries and
deficiencies, including interest, penalties and reasonable attorney fees that it
shall incur or suffer, which arise out of, result or relate to any breach of, or
failure by Xxxx0xxxx.xxx perform any of its material representations,
warranties, covenants or agreements in this Agreement or in any schedule,
certificate, exhibit or other instrument furnished or to be furnished by
Shareholders under this Agreement; provided however, that notice of any such
breach shall have been communicated with specificity within two (2) years of the
date hereof.
Page 8
7.2 Indemnification by ZiaSun. ZiaSun agrees to indemnify, defend and hold
the Shareholders harmless against and in respect of any and all claims, demands,
losses, costs, expenses, obligations, liabilities, damages, recoveries and
deficiencies, including interest, penalties and reasonable attorney fees, that
it shall incur or suffer, which arise out of, result or relate to any breach of,
or failure by ZiaSun to perform any of its material representations, warranties,
covenants or agreements in this Agreement or in any schedule, certificate,
exhibit or other instrument furnished or to be furnished by ZiaSun under this
Agreement.
7.3 Notice and Opportunity to Defend. If there occurs an event which any
Party asserts is an indemnifiable event, the Party seeking indemnification shall
notify the Party obligated to provide indemnification (the "Indemnifying Party")
promptly. If such event involves (i) any claim or (ii) the commencement of any
action or proceeding by a third person, the Party seeking indemnification will
give such Indemnifying Party written notice of such claim or the commencement of
such action or proceeding. Such notice shall be a condition precedent to any
liability of the Indemnifying Party hereunder. Such Indemnifying Party shall
have a period of thirty (30) days within which to respond thereto. If such
Indemnifying Party does not respond within such thirty (30) days period, such
Indemnifying Party shall be obligated to compromise or defend, at its own
expense and by counsel chosen by the Indemnifying Party shall provide reasonably
satisfactory to the Party seeking indemnity, such matter and the Indemnifying
Party shall provide the Party seeking indemnification with such assurances as
may be reasonably required by the latter to assure that the Indemnifying Party
will assume, and be responsible for, the entire liability issue. If such
Indemnifying Party does not respond within such thirty (30) day period and
rejects responsibility for such matter in whole or in part, the Party seeking
indemnification shall be free to pursue, without prejudice to any of its rights
hereunder, such remedies as may be available to such Party under applicable law.
The Party seeking indemnification agrees to cooperate fully with the
Indemnifying Party and its counsel in the defense against any such asserted
liability. In any event, the Party seeking indemnification shall have the right
to participate at its own expense in the defense of such asserted liability. Any
compromise of such asserted liability by the Indemnifying Party shall require
the prior written consent of the Party seeking indemnification. If, however, the
Party seeking indemnification refuses its consent to a bona fide offer of
settlement which the Indemnifying Party wishes to accept, the Party seeking
indemnification may continue to pursue such matter, free of any participation by
the Indemnifying Party, at the sole expense of the Party seeking
indemnification. In such event, the obligation of the Indemnifying Party to the
Party seeking indemnification shall be equal to the lesser of (i) the amount of
the offer of settlement which the Party seeking indemnification refused to
accept plus the costs and expenses of such Party prior to the date the
Indemnifying Party notifies the Party seeking indemnification of the offer of
settlement and (ii) the actual out-of-pocket amount the Party seeking
indemnification is obligated to pay as a result of such Party's continuing to
pursue such an offer. An Indemnifying Party shall be entitled to recover from
the Party seeking indemnification any additional expenses incurred by such
Indemnifying Party as a result of the decision of the Party seeking
indemnification to pursue such matter.
Page 9
8. MISCELLANEOUS.
8.1 Costs. Each party shall bear its own costs associated with this
Agreement, the closing of this Agreement, and all ancillary or related measures,
including without limitation, costs of attorneys fees, accountants fees, filing
fees, or other costs or expenses, without right or recourse from the other.
8.2 Additional Documentation. The parties acknowledge that further
agreements and documents, in addition to the Exhibits appended hereto, may be
required in order to effect the transactions contemplated hereunder. Each party
agrees to provide and execute such other and further agreements or documentation
as, in the opinions of respective counsel, are reasonably necessary to effect
the transactions contemplated hereunder and to maintain regulatory and legal
compliance.
8.3 Captions and Headings. The article and paragraph headings throughout
this Agreement are for convenience and reference only and shall not define,
limit or add to the meaning of any provision of this Agreement.
8.4 No Oral Change. This Agreement and any provision hereof may not be
waived, changed, modified or discharged orally, but only by an agreement in
writing signed by the party against whom enforcement of any such waiver, change,
modification or discharge is sought.
8.5 Non-Waiver. The failure of any party to insist in any one or more cases
upon the performance of any of the provisions, covenants or conditions of this
Agreement or to exercise any option herein contained shall not be construed as a
waiver or relinquishment for the future of any such provisions, covenants or
conditions. No waiver by any party of one breach by another party shall be
construed as a waiver with respect to any subsequent breach.
8.6 Time of Essence. Time is of the essence of this Agreement and of each
and every provision.
8.7 Choice of Law. This Agreement and its application shall be governed by
the laws of the State of Nevada.
8.8 Counterparts and/or Facsimile Signature. This Agreement may be executed
in any number of counterparts, including counterparts transmitted by telecopier
or FAX, any one of which shall constitute an original of this Agreement. When
counterparts of facsimile copies have been executed by all parties, they shall
have the same effect as if the signatures to each counterpart or copy were upon
the same document and copies of such documents shall be deemed valid as
originals. The parties agree that all such signatures may be transferred to a
single document upon the request of any party.
8.9 Notices. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given
on the date of service if served personally on the party to whom notice is to be
given, or on the third day after mailing if mailed to the party to whom notice
is to be given, by first class mail, registered or certified, postage prepaid,
and properly addressed as follows:
Page 10
If to ZiaSun, addressed to it at:
Xx. Xxxxxxx Xxxxx, President
ZiaSun Technologies, Inc.
000 X. Xxxxx, #00
Xxxxxx Xxxxx, Xxxxxxxxxx 00000
With copy to Counsel, addressed to:
Xxxxxx X. Xxxxxxx, Esq.
Wenthur & Chachas
0000 Xx Xxxxx Xxxxxxx Xxxxx
Xxxxx 000
Xx Xxxxx, Xxxxxxxxxx 00000
If to Xxxx0xxxx.xxx and the Shareholders, to them at:
Xxxx0xxxx.xxx
12A, First Xxxxxxx Xxxxxx
00 Xxxxxxxxxx Xxxx
Xxxxxxx, Xxxx Xxxx
With a copy to their Counsel, addressed to:
Xxxx Xxx
Xxxxxxx & Xxxxx
Suite D, 16th Floor, On Hing Xxxxxxxx
0-0 Xxxxxx Xxxxxxx
Xxxxxxx, Xxxx Xxxx
8.10 Binding Effect. This Agreement shall inure to and be binding upon the
heirs, executors, personal representatives, successors and assigns of each of
the parties to this Agreement.
8.11 Mutual Cooperation. The parties hereto shall cooperate with each other
to achieve the purpose of this Agreement and shall execute such other and
further documents and take such other and further actions as may be necessary or
convenient to effect the transaction described herein.
8.12 Brokers. The parties hereto represent that no other broker has brought
about this Agreement, and no other finder's fee has been paid or is payable by
either party, except for the broker whose name is set forth on Exhibit 8.12, and
whose fee shall be paid by the Shareholders. Each party hereto shall indemnify
and hold the other harmless against any and all claims, losses, liabilities or
expenses which may be asserted against it as a result of its dealings,
arrangements or agreements with any other broker.
8.13 Survival of Representations and Warranties. The representations,
warranties, covenants and agreements of the parties set forth in this Agreement
or in any instrument, certificate, opinion or other writing provided for herein
shall survive the Closing.
Page 11
AGREED AND ACCEPTED as of the date first above written.
ZIASUN TECHNOLOGIES, INC.
A Nevada Corporation
Dated: March 25, 1999 /S/ Xxxxxx X. Xxxxxx
-----------------------------------
By: Xxxxxx X. Xxxxxx
Its: President
Dated: March 25, 1999 /S/ Xxxxxxxx X. XxXxxx
-----------------------------------
By: Xxxxxxxx X. XxXxxx
Its: Secretary
XXXX0XXXX.XXX, LTD.
A Hong Kong Registered Company
Dated: March 25, 1999 /S/ Xxxxx Xxxxxxx
-----------------------------------
By: Xxxxx Xxxxxxx
Its: President and Secretary
SHAREHOLDERS OF XXXX0XXXX.XXX INC. WHO WILL WARRANT THE REPRESENTATIONS HEREIN:
/S/ Xxxxx Xxxxxxx
-----------------------------------
Xxxxx Xxxxxxx
Page 12
EXHIBIT 1.2(a)
CASH DISTRIBUTED TO THE Xxxx0xxxx.XXX SHAREHOLDERS AT CLOSING
Shareholder
Name Cash
--------------------------------------------------------------------------------
Xxxxx Xxxxxxx $15,000.00
--------------------------------------------------------------------------------
Total $15,000.00
--------------------------------------------------------------------------------
EXHIBIT 1.3.1
SHARES TO BE ISSUED TO Xxxx0xxxx.XXX SHAREHOLDERS AT CLOSING
Shareholder Number of Number of
Name and Addressd Address Asia4sale Shares ZiaSun Shares
--------------------------------------------------------------------------------
Xxxxx Xxxxxxx 99 50,000
1st Floor, 67 Xxx Xxx
Sai Kung
New Territories
Hong Kong
Tempest Company Limited 1 0
--------------------------------------------------------------------------------
Total 100 50,000
EXHIBIT 1.62
INVESTMENT LETTER
--------------------------------------------------------------------------------
Xx. Xxxxxxx Xxxxx, President
ZiaSun Technologies, Inc.
00000 Xxxx Xxxxx Xxxxx
0xx Xxxxx
Xxx Xxxxx, XX 00000
Re: INVESTMENT LETTER
Gentlemen:
The undersigned having acquired by a stock-for-stock exchange a minimum
of 50,000 restricted and unregistered shares of Common Stock, $0.001 par value
per share (the "Securities") of ZiaSun Technologies, Inc., a Nevada Corporation,
(the "Company"), and such other shares of Common Stock which represent the
Acquisition Consideration as adjusted and determined pursuant to the terms of
that certain Acquisition Agreement and Plan of Reorganization between the
undersigned and the Company, hereby represents to the Company that:
1. The Securities which are being acquired by the undersigned are being
acquired for the undersigned's own account and for investment and not with a
view to the public resale or distribution thereof.
2. The undersigned will not sell, transfer or otherwise dispose of the
Securities unless, in the opinion of the Company's counsel, such disposition
conforms with applicable securities laws requirements.
3. The undersigned is aware that the Securities are "restricted
securities" as that term is defined in Rule 144 (the "Rule") promulgated under
the Securities Act of 1933, as amended (the "Act").
4. The undersigned acknowledges that the undersigned has had an
opportunity to ask questions of and receive answers from duly designated
representatives of the Company concerning the finances of the Company and the
proposed business plan of the Company.
5. The undersigned acknowledges and understands that the Securities are
unregistered and must be held indefinitely unless they are subsequently
registered under the Act or an exemption from such registration is available.
6. The undersigned further acknowledges that the undersigned is fully aware
of the applicable limitations on the resale of the Securities. These
restrictions for the most part are set forth in Rule 144 (the "Rule"). The Rule
permits sales of "restricted securities" upon compliance with the requirements
of such Rule. If and when the Rule is available to the undersigned, the
undersigned may make only sales of the Securities in accordance with the terms
and conditions of the rule (which may limit the amount of Securities that may be
sold).
Investment Letter
Page 2 of 2
--------------------------------------------------------------------------------
7. By reason of the undersigned's knowledge and experience in financial
and business matters in general, and investments in particular, the undersigned
is capable of evaluating the merits and risks of an investment by the
undersigned in the Securities.
8. The undersigned is capable of bearing the economic risks of an
investment in the Securities. The undersigned fully understands the speculative
nature of the Securities and the possibility of loss.
9. The undersigned's present financial condition is such that the
undersigned is under no present or contemplated future need to dispose of any
portion of the Securities to satisfy any existing or contemplated undertaking,
need, or indebtedness.
10. Any and all certificates representing the Securities, and any and
all securities issued in replacement thereof or in exchange therefor, shall bear
the following restrictive legend.
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. THE SHARES HAVE BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION FOR THESE SHARES UNDER SUCH ACT OR AN
OPINION OF THE COMPANY'S COUNSEL THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER SAID ACT.
11. The undersigned further agrees that the Company shall have the
right to issue stop-transfer instructions to its transfer agent until such time
as sale is permitted under Security Laws and acknowledges that the Company has
informed the undersigned of its intention to issue such instructions.
Very truly yours,
Date: ____________________. __________________________________
Undersigned
----------------------------------
Address
----------------------------------
Social Security Number
EXHIBIT 2.4
SUBSIDIARIES OF Xxxx0xxxx.XXX
--------------------------------------------------------------------------------
NONE
EXHIBIT 2.5
PRESENT OFFICERS AND DIRECTORS Xxxx0xxxx.XXX
--------------------------------------------------------------------------------
OFFICERS
President ......................... Xxxxx Xxxxxxx
Chief Financial Officer ........... Xxxxx Xxxxxxx
Treasurer ......................... Xxxxx Xxxxxxx
Secretary ......................... Larville Ltd.
DIRECTORS
Xxxxx Xxxxxxx
Larville Ltd.
EXHIBIT 2.6
AUDITED FINANCIAL STATEMENTS Xxxx0xxxx.XXX
-------------------------------------------------------------------------------
TO BE PROVIDED WITHIN SIXTY (60) DAYS OF CLOSING
EXHIBIT 2.8
LIABILITIES OF Xxxx0xxxx.XXX
-------------------------------------------------------------------------------
NONE
EXHIBIT 2.12
XXXX0XXXX.XXX LITIGATION AND LEGAL PROCEEDINGS
--------------------------------------------------------------------------------
NONE
EXHIBIT 2.16
EXCEPTIONS TO GOOD TITLE TO ASSETS OF Xxxx0xxxx.XXX
--------------------------------------------------------------------------------
NONE
EXHIBIT 2.17
MATERIAL CONTRACTS OF Xxxx0xxxx.XXX
--------------------------------------------------------------------------------
EXHIBIT 3.5
SUBSIDIARIES OF ZIASUN
--------------------------------------------------------------------------------
1. BestWay Beverages, Inc., a Nevada Corporation is a wholly
owned subsidiary of ZiaSun Technologies, Inc. BestWay
Beverages, Inc., holds a license from Fountain Fresh
International, Inc., under which BestWay will market , sell
and distribute the Beverage Center Equipment developed by
Fountain Fresh which is used to dispense Fountain Fresh
Beverages and purified water. The Beverage Center Equipment is
a patented in-store, self service, pressure fill, mini
bottling plant/beverage center.
2. Momentum Asia, Inc., a Corporation formed under the laws of
the Republic of the Philippines is a wholly owned subsidiary
of ZiaSun Technologies, Inc. Momentum Asia, Inc., is, among
other things, in printing and publication design business.
3. Momentum Internet Incorporation, a Corporation formed under
the laws of the British Virgin Islands, Momentum Internet
Incorporation is a wholly owned subsidiary of ZiaSun
Technologies, Inc. Momentum Internet Incorporated is, among
other things, in the Financial Internet Website publication
business wherein subscribers can received financial news,
stock quotes and market information about various companies.
4. Internet Holdings, Inc., a Utah Corporation is a wholly owned
subsidiary of ZiaSun Technologies, Inc.
EXHIBIT 3.6
PRESENT OFFICES AND DIRECTORS OF ZIASUN
--------------------------------------------------------------------------------
OFFICERS
--------
CEO and President ...................... Xxxxxxx Xxxxx
Vice President ......................... Xxxxx X. Xxxxxxx
Vice President of Investor Relations ... Xxxx Xxxxxx
Chief Financial Officer ................ Xxxxx X. Xxxxxxx
Treasurer ............................... Xxxxx X. Xxxxxxx
Secretary ............................... Xxxxxxxx X. XxXxxx
DIRECTORS
---------
Xxxxx X. Xxxxxxx
Xxxxxxx Xxxxx
EXHIBIT 3.13
EXCEPTIONS TO GOOD TITLE TO ASSETS OF ZIASUN
--------------------------------------------------------------------------------
NONE
EXHIBIT 5.2.3
POST CLOSING OFFICERS AND DIRECTORS OF Xxxx0xxxx.XXX
--------------------------------------------------------------------------------
CEO and President ............................ Xxxxx Xxxxxxx
Vice President ............................... Xxxxx Xxxxxxx
Treasurer .................................... Xxxxx Xxxxxxx
Secretary .................................... Xxxxx Xxxxxxx
DIRECTORS
---------
Xxxxx Xxxxxxx
Xxxxxxx Xxxxx
EXHIBIT 8.12
BROKERS
--------------------------------------------------------------------------------
With the exception of the shares issued to the Shareholders of Xxxx0xxxx.xxx
as set forth herein, no brokerage of finders fees in the form of cash or
securities were paid to any party or person in connection with the acquisition.
