ACQUISITION AGREEMENT AND PLAN OF REORGANIZATION
ZiaSun Technologies, Inc.
A Nevada Corporation
ACQUISITION OF SHARES OF
Memory Improvement Systems, Inc.
A Utah Corporation
Dated: September 26, 2000
Table of Contents Page
-------------------------------------------------------------------------------
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 Exemption from Registration ....................... 2
1.5 Registration Rights ............................... 2
1.6 Non-taxable Transaction ........................... 2
2. REPRESENTATION AND WARRANTIES OF THE SHAREHOLDERS .......... 2
2.1 Organization ...................................... 2
2.2 Capital Stock ..................................... 2
2.3 Options, Warrants, Rights, etc. ................... 2
2.4 Subsidiaries ...................................... 3
2.5 Directors and Officers............................. 3
2.6 Financial Statements............................... 3
2.7 Absence of Changes................................. 3
2.8 Absence of Undisclosed Liabilities................. 3
2.9 Tax Returns........................................ 3
2.10 Patents, Trade Names and Rights.................... 3
2.11 Compliance with Laws............................... 3
2.12 Litigation......................................... 4
2.13 Authority.......................................... 4
2.14 Ability to Carry Out Obligations................... 4
2.15 Full Disclosure.................................... 4
2.16 Assets............................................. 4
2.17 Material Contracts................................. 4
3. REPRESENTATIONS AND WARRANTIES OF ZIASUN ................... 4
3.1 Organization....................................... 4
3.2 Capital Stock...................................... 5
3.3 Options, Warrants, Rights, etc. ................... 5
3.4 Non-Reporting Publicly Traded Status .............. 5
3.5 Subsidiaries ...................................... 5
3.6 Directors and Officers ............................ 5
3.7 Patents, Trade Names and Rights.................... 5
3.8 Compliance with Laws............................... 5
3.9 Litigation......................................... 6
3.10 Authority.......................................... 6
3.11 Ability to Carry Out Obligations................... 6
3.12 Full Disclosure.................................... 6
3.13 Assets............................................. 6
4. COVENANTS................................................... 6
4.1 Investigative Rights............................... 6
4.2 Conduct of Business................................ 6
Page(i)
Table of Contents (continued) Page
-------------------------------------------------------------------------------
5. CLOSING ................................................... 7
5.1 Closing............................................ 7
5.2 Shareholders' Deliveries at Closing................ 7
5.3 ZiaSun's Deliveries at Closing..................... 7
6 CONDITIONS TO OBLIGATIONS TO CLOSE.......................... 7
6.1 Conditions to Obligations of MIS Shareholders to Close.. 7
6.2 Conditions to Obligations of ZiaSun ............... 8
7. INDEMNIFICATION............................................. 8
7.1 Indemnification by Shareholders.................... 8
7.2 Indemnification by ZiaSun ......................... 8
7.3 Notice and Opportunity to Defend................... 8
8. MISCELLANEOUS............................................... 9
8.1 Costs.............................................. 9
8.2 Additional Documentation........................... 9
8.3 Captions and Headings.............................. 9
8.4 No Oral Change..................................... 9
8.5 Non-Waiver......................................... 9
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 ................................... 11
EXHIBIT 1.3.1 Shares issued and delivered to MIS Shareholders at Closing
EXHIBIT 1.4 Investment Letter
EXHIBIT 1.5 Registration Rights Agreement
EXHIBIT 2.4 Subsidiaries of MIS
EXHIBIT 2.5 Present Officers and Directors of MIS
EXHIBIT 2.6 Audited Financial Statements of MIS
EXHIBIT 2.8 Liabilities of MIS
EXHIBIT 2.12 MIS Legal Proceedings and Litigation
EXHIBIT 2.16 Exceptions to Good Title to Assets of MIS
EXHIBIT 2.17 Material Contracts of MIS
EXHIBIT 3.5 Subsidiaries of ZiaSun
EXHIBIT 3.6 Present Officers and Directors of ZiaSun
EXHIBIT 3.9 Pending Litigation of ZiaSun
EXHIBIT 3.13 Exceptions to Good Title to Assets of ZiaSun
EXHIBIT 5.2.3 Post Closing Officers and Directors of MIS
EXHIBIT 8.12 Brokers
Page (ii)
AGREEMENT
---------
This Acquisition Agreement and Plan of Reorganization (the "Agreement" or
"Acquisition Agreement") made as of September 26, 2000, 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 Memory Improvement Systems, Inc., a corporation organized and existing
under the laws of the State of Utah ("MIS").
A. Whereas, MIS is a marketing group comprised of various marketing and
promotional personnel, consultants, and speakers.
B. Whereas, Shareholders hold all of the issued and outstanding common
stock of MIS; and
C. Whereas, ZiaSun, a 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 MIS held by the Shareholders, thereby making
MIS a wholly owned subsidiary of ZiaSun; and
D. Whereas, Shareholders desire to exchange all of the issued and
outstanding capital stock of MIS for Four Hundred Thousand (400,000)
unregistered and restricted shares of the Common stock of ZiaSun.
E. 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 MIS, ZiaSun shall acquire all of the issued and outstanding
capital stock of MIS (the "MIS Shares") owned by the Shareholders of MIS.
1.2 Acquisition Consideration. The total Acquisition Consideration to be
paid by ZiaSun for the MIS Shareholders shall be Four Hundred Thousand (400,000)
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"). Said ZiaSun Shares shall be subject to certain "piggyback registration
rights" as set forth in paragraph 1.5 and that certain Registration Rights
Agreement, a copy of which is attached hereto as Exhibit 1.5
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, Four Hundred
Thousand (400,000) unregistered and restricted shares of the Common stock
of ZiaSun shall be issued and delivered to the MIS Shareholders of MIS to
be provided to ZiaSun prior to closing, as set forth in Exhibit 1.3.1.
1.4 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 1.4 attached hereto.
1.5 Registration Rights for Shares. The ZiaSun Shares issuable to the MIS
Shareholders shall be subject to certain "piggyback registration rights" as set
forth in that certain Registration Rights Agreement, a copy of which is attached
hereto as Exhibit 1.5.
1.6 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 MIS AND THE SHAREHOLDERS.
The Officers and Directors of MIS and certain Shareholders (the "Warranting
Shareholders") hereby represent and warrant to ZiaSun that:
2.1 Organization. MIS is a corporation duly organized, validly existing and
in good standing under the laws of the State of Utah, 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 states where its business requires qualification.
2.2 Capital Stock. The authorized capital stock of MIS consists of 100,000
shares of Common Stock, no par value per share (the "MIS Shares"). Immediately
prior to closing there shall be Five Thousand (5,000) MIS Shares issued and
outstanding, all of which are owned by the Shareholders. All of the issued and
outstanding shares of capital stock of MIS 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 MIS to issue or to transfer from
treasury any additional shares of its capital stock of any class.
Page 2
2.4 Subsidiaries. MIS 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 MIS 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 MIS will provide audited financial
statements to ZiaSun, if such financial statements are required under the
Securities and Exchange Act of 1934. Any such required financial statements will
be prepared in accordance with generally accepted accounting principles and
practices consistently followed by MIS throughout the periods indicated, and
will fairly present the financial position of MIS as of the dates of the balance
sheets included in the financial statements and the results of operations for
the periods indicated.
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 MIS, 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, MIS 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 MIS
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, MIS
has filed all federal, state and local tax returns required by law and 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 MIS.
2.10 Patents, Trade Names and Rights To the best of its knowledge MIS 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.
MIS 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 MIS and each of its subsidiaries have 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) affecting its properties or the
operation of its business.
Page 3
2.12 Litigation. Except as set forth in Exhibit 2.12 attached hereto,
neither MIS 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 MIS or its subsidiaries or their business,
assets or financial condition. MIS 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. MIS and
its subsidiaries are not engaged in any material lawsuits to recover moneys due
it.
2.13 Authority. The Board of Directors of MIS has authorized the execution
of this Agreement and the consummation of the transactions contemplated herein,
and MIS 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 MIS 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 MIS; or (c) an event that
would result in the creation or imposition of any lien, charge or encumbrance on
any asset of MIS.
2.15 Full Disclosure. None of the representations and warranties made by
MIS, 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,
MIS 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 MIS are set forth in Exhibit
2.17, attached hereto an incorporated herein.
3. REPRESENTATIONS AND WARRANTIES OF ZIASUN.
ZiaSun represents and warrants to MIS 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.
Page 4
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 as of September 15, 2000, there were 32,330,170 shares are
presently issued and outstanding. Immediately prior to Closing there shall not
be more the 33,000,000 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.
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 Reporting Publicly Traded Status. The Common Stock of ZiaSun is
currently listed on the OTC Bulletin Board under the symbol "ZSUN". ZiaSun is a
reporting public company, subject to the filing and reporting requirements of
the Securities Exchange Act of 1934 and files period or annual reports with the
Securities and Exchange Commission. ZiaSun is current in its reporting
requirements
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.
Page 5
3.9 Litigation. Except as set forth in Exhibit 3.9 attached hereto, 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.
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
MIS shall conduct its business in the normal course. MIS 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.
page 6
5. CLOSING.
5.1 Closing. The closing of this transaction shall be held at the offices
of ZiaSun on or before October 15, 2000, 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:
5.2.1 Certificates representing all of the shares of capital stock MIS
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 1.4 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 Pursuant to paragraph 1.3.1, to the MIS Shareholders, either (a)
certificates representing the ZiaSun Shares, duly issued with restrictive
legend, to the Shareholders as listed on Exhibit 1.3.1 attached hereto, or
(b) a copy of a letter from ZiaSun to its transfer agent, Colonial Stock
Transfer Co., Inc., instructing such transfer agent to issue the
certificates representing the ZiaSun Shares to the Shareholders as listed
on Exhibit 1.3.1;
6. CONDITIONS TO OBLIGATIONS TO CLOSE AND MATERIAL TERMS OF AGREEMENT
6.1 Conditions to Obligations of MIS and 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.
Page 7
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
MIS 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 MIS 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 MIS 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 one (1) year of the date hereof.
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 8
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.
Page 9
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:
If to ZiaSun, addressed to it at:
--------------------------------
Xx. Xxxxx X. Xxxxxxx
President and CEO
ZiaSun Technologies, Inc.
000 Xxxxxxx Xxxxxx
Xxxxx 000
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 MIS, addressed to: and the Shareholders, to them at:
---------------------------------------------------------
Xx. Xxxxxx X. Xxxxxxx
President
Memory Improvement Systems, Inc.
0000 X. 0000 X.
Xxxxxxxx Xxxx, Xxxx 00000
Page 10
With a copy to their tax advisor, addressed to:
-----------------------------------------------
Xx. Xxxxx X. Xxxxxxxx
Xxxxxxxx & Company CPA
0000 Xxxxx 000 Xxxx
Xxxxx 0-X
Xxxxx, Xxxx 00000
If to the Shareholders, Addressed to them at:
--------------------------------------------
Their addresses as set forth on Exhibit 1.3.1. hereto.
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/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.
AGREED AND ACCEPTED as of the date first above written.
ZIASUN TECHNOLOGIES, INC.
A Nevada Corporation
Dated: 9/29/2000 /s/ Xxxxx X. Xxxxxxx
----------------------------------
By: Xxxxx X. Xxxxxxx
Its: President and CEO
MEMORY IMPROVEMENT SYSTEMS, INC.
A Utah Corporation
Dated: 10/10/2000 /s/ Xxxxxx X. Xxxxxxx
----------------------------------
By: Xxxxxx X. Xxxxxxx
Its: President and Secretary
Page 11
SHAREHOLDERS OF MEMORY IMPROVEMENT SYSTEMS, INC.
Dated: 10/10/2000 /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxx
Dated: 10/10/2000 /s/ Xxxxx Xxxxx
----------------------------------
Xxxxx Xxxxx
Page 12
EXHIBIT 1.3.1
SHARES TO BE ISSUED TO MIS SHAREHOLDERS AT CLOSING
-------------------------------------------------------------------------------
Shareholder Number of
Name and Address ZiaSun Shares
-------------------------------------------------------------------------------
Xxx Xxxxxxx 200,000
0000 X. 0000 X.
Xxxxxxxx Xxxx, Xxxx 00000
Xxxxx Xxxxx 200,000
0000 X. 0000 Xxxxx
Xxxx, Xxxx 00000
-------------------------------------------------------------------------------
Total 400,000
EXHIBIT 1.4
INVESTMENT LETTER
-------------------------------------------------------------------------------
Xx. Xxxxx X. Xxxxxxx
ZiaSun Technologies, Inc.
000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx Xxxxx, XX 00000
Re: INVESTMENT LETTER
Gentlemen:
The undersigned having acquired by a stock-for-stock exchange ___________
restricted and unregistered shares of Common Stock, $0.001 par value per share
(the "Securities") of ZiaSun Technologies, Inc., a Nevada Corporation, (the
"Company"), 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 withthe 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 1.5
REGISTRATION RIGHTS AGREEMENT
-------------------------------------------------------------------------------
Issuer: ZiaSun Technologies, Inc. (the "Company" or "ZiaSun")
Address: 000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxxx, XX 00000
Date: September 26, 2000
This Registration Rights Agreement (the "Agreement") is entered into as of
the above date by and between ZiaSun Technologies, Inc., a Nevada Corporation
(the "Company") and the undersigned shareholders (the "Shareholders") who are
the owners of 100% of the capital stock of Memory Improvement Systems, Inc., a
corporation organized and existing under the laws of the State of Utah ("MIS").
RECITALS
--------
A. Whereas, concurrently with the execution of this Agreement, the Company,
MIS and the Shareholders, have executed An Acquisition Agreement and Plan of
Reorganization (the "Acquisition Agreement") under which the Company will
acquired all of the issued and outstanding capital stock of MIS in a
stock-for-stock exchange for Four Hundred Thousand (400,000) unregistered and
restricted shares of the Common stock of the Company (the `ZiaSun Shares"),
which will be issued to the Shareholders.
B. Whereas, by this Agreement, the Company, MIS and the Shareholders desire
to set forth the registration rights, all as provided herein, of the Ziasun
Shares which will be issued to the Shareholders pursuant to the Acquisition
Agreement.
AGREEMENT
---------
NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions hereinafter set forth, the parties hereto mutually agree as follows:
1. Registration Rights. The Company covenants and agrees as follows:
1.1 Definitions. For purposes of this Section 1:
1.1.1 The term "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act of 1933, as amended
(the "Securities Act"), and the declaration or ordering of effectiveness of
such registration statement or document;
1.1.2 The term "Registrable Securities" means (i) the Shares of Common
Stock of the Company issuable to the Shareholders of MIS pursuant to the
terms of the Acquisition Agreement executed concurrently herewith.
1.1.3 The term "SEC" means the Securities and Exchange Commission.
Page 1 of 8
1.2 Company Registration.
1.2.1 Piggyback Registration. If at any time or from time to time, the
Company shall determine to register any of its securities, for its own
account or the account of any of its shareholders, other than a
registration on S-8 relating solely to employee stock option or purchase
plans, or a registration on Form S-4 relating solely to an SEC Rule 145
transaction, or any successor to such forms, which does not include
substantially the same information as would be required to be included in a
registration statement covering the sale of Registrable Securities, the
Company will:
(i) promptly give to the Shareholders written notice thereof
(which shall include a list of the jurisdictions in which the Company
intends to attempt to qualify such securities under the applicable
blue sky or other state securities laws); and
(ii) include in such registration (and compliance), and in any
underwriting involved therein, all the Registrable Securities
specified in a written request or requests, made within 20 days after
receipt of such written notice from the Company, by the Shareholders,
except as set forth in subsection 1.3 below.
Notwithstanding the above, if the Company shall determine to complete
a registration on Form S-4 relating solely to an SEC Rule 145 transaction,
or a successor form, and the Company in its sole discretion determines that
the concurrent registration of the Registrable Securities will not material
effect or delay the registration of the underlying transaction which is the
subject of the Form S-4 registration, then the Company will include in the
Form S-4 registration statement the registration of the Registrable
Securities.
1.3 Underwriting. If the registration of which the Company gives notice is
for a registered public offering involving an underwriting, the Company shall so
advise the Shareholders as a part of the written notice given pursuant to
section 1.2. In such event the right of the Shareholders to registration
pursuant to section 1.2 shall be conditioned upon participation in such
underwriting and the inclusion of such Registrable Securities in the
underwriting to the extent provided herein. All shareholders, including the
Shareholders, proposing to distribute their securities through such underwriting
shall (together with the Company and the other shareholders distributing their
securities through such underwriting) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting by the Company. *
* Notwithstanding any other provision of this Agreement, if the
managing underwriter advises the Company that marketing factors require
a limitation of the number of shares to be underwritten, then the
Company shall so advise all holders of Registrable Securities and the
number of shares of Registrable Securities that may be included in the
registration and underwriting shall be allocated among all holders of
Registrable Securities in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities held by such holders at
the time of filing the registration statement.
Page 2 of 8
If such offering is other than the first registered offering of ZiaSun
securities to the public, the underwriter may not limit the Registrable
Securities to be included in such offering to less than 20% of the securities
included therein (based on aggregate market values.) ZiaSun shall advise the
Shareholders and all shareholders of Registrable Securities which would
otherwise be registered and underwritten pursuant hereto of any such
limitations, and the number of shares of Registrable Securities that may be
included in the registration. If the Shareholders disapproves of the terms of
any such underwriting, they may elect to withdraw there from by written notice
to ZiaSun and the underwriter. Any securities excluded or withdrawn from such
underwriting shall not be transferred prior to 90 days after the effective date
of the registration statement for such underwriting, or such shorter period as
the underwriter may require.
1.4 Expenses of Registration. All expenses incurred in connection with any
registration, qualification or compliance pursuant to this Section 1 including
without limitation, all registration, filing and qualification fees, printing
expenses, fees and disbursements of counsel for the Company and expenses of any
special audits incidental to or required by such registration, shall be borne by
the Company except the Company shall not be required to pay underwriters' fees,
discounts or commissions relating to Registrable Securities. All expenses of any
registered offering not otherwise borne by the Company shall be borne pro rata
among the Shareholders and the shareholders participating in the offering and
the Company.
Further, the Company shall not be required to pay for expenses of any
registration proceeding begun pursuant to this Section, the request of which has
been subsequently withdrawn by the Shareholders, in which case, such expenses
shall be borne by the the Shareholders (including Registrable Securities)
requesting or causing such withdrawal.
1.5 Registration Procedures. In the case of each registration,
qualification or compliance effected by the Company pursuant to this
Registration Rights Agreement, the Company will keep the Shareholders advised in
writing as to the initiation of each registration, qualification and compliance
and as to the completion thereof. Except as otherwise provided in subsection
1.3, at its expense the Company will:
1.5.1 Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause
such registration statement to become effective, and, upon the request of
the Shareholders, keep such registration statement effective for up to 90
days or until the Shareholders has completed the distribution described in
the registration statement relating thereto, whichever first occurs; and.
1.5.2 Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of
the Securities Act with respect to the disposition of all securities
covered by such registration statement.
Page 3 of 8
1.5.3 Furnish to the Shareholders copies of a prospectus, including a
preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in
order to facilitate the disposition of Registrable Securities owned by
them.
1.5.4 Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or, Blue
Sky laws of such jurisdictions as shall be reasonably requested by the
Shareholders, provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions.
1.5.5 In the event of any underwritten public offering enter into and
perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. the
Shareholders shall also enter into and perform its obligations under such
an agreement.
1.5.6 Notify the Shareholders and each shareholder of Registrable
Securities covered by such registration statement at any time when a
prospectus relating thereto is required to be delivered under the
Securities Act or the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.
1.6 Indemnification.
1.6.1 The Company will indemnify the Shareholders and each of its
officers, directors and partners, and each person controlling such, with
respect to which such registration, qualification or compliance has been
effected pursuant to this Rights Agreement, and each underwriter, if any,
and each person who controls any underwriter of the Registrable Securities
held by or issuable to the Shareholders, against all claims, losses,
expenses, damages and liabilities (or actions in respect thereto) arising
out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any prospectus, offering circular or other
document (including any related registration statement, notification or the
like) incident to any such registration, qualification or compliance, or
based on any omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make the statement
therein not misleading, or any violation or alleged violation by the
Company of the Securities Act, the Securities Exchange Act of 1934, as
amended ("Exchange Act"), or any state securities law applicable to the
Company or any rule or regulation promulgated under the Securities Act, the
Exchange Act or any such state law and relating to action or inaction
required of the Company in connection with any such registration,
qualification of compliance, and will reimburse the Shareholders, each of
its officers, directors and partners, and each person controlling such,
each such underwriter and each person who controls any such underwriter,
within a reasonable amount of time after incurred for any reasonable legal
and any other expenses incurred in connection with investigating, defending
or settling any such claim, loss, damage, liability or action; provided,
however, that the indemnity agreement contained in this subsection 1.6.1
shall not apply to amounts paid in settlement of any such claim, loss,
damage, liability, or action if such settlement is effected without the
consent of the Company (which consent shall not be unreasonably withheld);
and provided further, that the Company will not be liable in any such case
to the extent that any such claim, loss, damage or liability arises out of
or is based on any untrue statement or omission based upon written
information furnished to the Company by an instrument duly executed by the
Shareholders or underwriter specifically for use therein.
Page 4 of 8
1.6.2 the Shareholders will, if Registrable Securities held by or
issuable are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company, each
of its directors and officers, each underwriter, if any, of the Company's
securities covered by such a registration statement, each person who
controls the Company within the meaning of the Securities Act, and each
other such shareholder, each of its officers, directors and partners and
each person controlling such shareholder, against all claims, losses,
expenses, damages and liabilities (or actions in respect thereof) arising
out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any such registration statement, prospectus,
offering circular or other document, or any omission (or alleged omission)
to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, and will reimburse the
Company, such shareholders, such directors, officers, partners, persons or
underwriters for any reasonable legal or any other expenses incurred in
connection with investigating, defending or settling any such claim, loss,
damage, liability or action, in each case to the extent, but only to the
extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to the Company by an
instrument duly executed by the Shareholders specifically for use therein;
provided, however, that the indemnity agreement contained in this
subsection 1.6.2 shall not apply to amounts paid in settlement of any such
claim, loss, damage, liability or action if such settlement is effected
without the consent of the Shareholders (which consent shall not be
unreasonably- withheld); and provided further, that the total amount for
which the Shareholders shall be liable under this subsection 1.6.2 shall
not in any event exceed the aggregate proceeds received by such from the
sale of Registrable Securities held by same in such registration.
1.6.3 Each party entitled to indemnification under this subsection 1.5
(the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity
may be sought, and shall permit the Indemnifying Party to assume the
defense of any such claim or any litigation resulting therefrom; provided
that counsel for the Indemnifying Party, who shall conduct the defense of
such claim or litigation, shall be approved, by the Indemnified Party
(whose approval shall not be unreasonably withheld), and the Indemnified
Party may participate in such defense at such party's expense; and provided
further, that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
hereunder, unless such failure resulted in prejudice to the Indemnifying
Party; and provided further, that an Indemnified Party (together with all
other Indemnified Parties which may be represented without conflict by one
counsel) shall have the right to retain one separate counsel, with the fees
and expenses to be paid by the Indemnifying Party, if representation of
such Indemnified Party by the counsel retained by the Indemnifying Party
would be inappropriate due to actual or potential differing interests
between such Indemnified Party and any other party represented by such
counsel in such proceeding. No Indemnifying Party, in the defense of any
such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release
from all liability in respect to such claim or litigation.
Page 5 of 8
1.7 Information by the Shareholders. the Shareholders shall promptly
furnish to the Company such information regarding themselves and the
distribution proposed by such as the Company may request in writing and as shall
be required in connection with any registration, qualification or compliance
referred to herein.
1.8 Rule 144 Reporting. With a view to making available to shareholders and
the Shareholders, the benefits of certain rules and regulations of the SEC which
may permit the sale of the Registrable Securities to the public without
registration, the Company agrees at all times to:
1.8.1 Make and keep public information available, as those terms are
understood and defined in SEC Rule 144, after 90 days after the effective
date of the first registration filed by the Company for an offering of its
securities to the general public;
1.8.2 File with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange
Act (at any time after it has become subject to such reporting
requirements); and
1.8.3 So long as the Shareholders owns any Registrable Securities, to
furnish to such upon request with a written statement by the Company as to
its compliance with the reporting requirements of said Rule 144 (at any
time after 90 days after the effective date of the first registration
statement filed by the Company for an offering of its securities to the
general public), and of the Securities Act and the Exchange Act (at any
time after it has become subject to such reporting requirements), a copy of
the most recent annual or quarterly report of the Company, and such other
reports and documents so filed by the Company as the Shareholders may
reasonably request in complying with any rule or regulation of the SEC
allowing the Shareholders to sell any such securities without registration.
Page 6 of 8
1.9 Transfer of Registration Rights. the Shareholders' rights to cause the
Company to register their securities and keep information available, granted to
them by the Company under subsections 1.2 and 1.7 may not be assigned to a
transferee or assignee of the Shareholders' Registrable Securities not sold to
the public. The Company prohibits the transfer of any the Shareholders' rights
under this subsection 1.8.
2. General.
2.1 Waivers and Amendments. With the written consent of the Shareholders
the obligations of the Company and the rights of the Shareholders under this
agreement may be waived (either generally or in a particular instance, either
retroactively or prospectively, and either for a specified period of time or
indefinitely), and with the same consent the Company, when authorized by
resolution of its Board of Directors, may enter into a supplementary agreement
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement; provided, however, that no
such modification, amendment or waiver shall reduce the aforesaid percentage of
Registrable Securities. Upon the effectuation of each such waiver, consent,
agreement of amendment or modification, the Company shall promptly give written
notice thereof to the Shareholders and the record shareholders of the
Registrable Securities who have not previously consented thereto in writing.
This Agreement or any provision hereof may be changed, waived, discharged or
terminated only by a statement in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is sought, except to
the extent provided in this subsection 2.1.
2.2 Governing Law. This Agreement shall be governed in all respects by the
laws of the State of California as such laws are applied to agreements between
California residents entered into and to be performed entirely within
California.
2.3 Attorneys Fees. The parties agree that if any legal action is necessary
to enforce the terms of this Agreement, the prevailing party shall be entitled
to reasonable attorneys' fees in addition to any other relief to which that
party may be entitled.
2.4 Successors and Assigns. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
2.5 Entire Agreement. Except as set forth below, this Agreement and the
other documents delivered pursuant hereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof.
2.6 Notices. etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by first class mail,
postage prepaid, certified or registered mail, return receipt requested,
addressed (a) if to the Shareholders, at such address as set forth in the
heading to this Agreement, or at such other address as furnished to the Company
in writing, or (b) if to the Company, at the Company's, address set forth in the
heading to this Agreement, or at such other address as the Company shall have
furnished to the Shareholders in writing.
Page 7 of 8
2.7 Severability. In case any provision of this Agreement shall be invalid,
illegal, or unenforceable, the validity, legality and enforceability of the
remaining provisions of this Agreement or any provision of the other Agreements
shall not in any way be affected or impaired thereby.
2.8 Titles and Subtitles. The titles of the sections and subsections of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
2.9 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.
AGREED AND ACCEPTED, effective as of the date first above written.
ZIASUN TECHNOLOGIES, INC.
A Nevada Corporation
Dated: ____________________ ______________________________
By: Xxxxx X. Xxxxxxx
Its: President and CEO
MEMORY IMPROVEMENT SYSTEMS, INC.
A Utah Corporation
Dated: ____________________ ______________________________
By: Xxxxxx X. Xxxxxxx
Its: President and Secretary
SHAREHOLDERS OF MEMORY IMPROVEMENT SYSTEMS, INC.
Dated: ____________________ ______________________________
Xxxxxx X. Xxxxxxx
Dated: ____________________ ______________________________
Xxxxx Xxxxx
Page 8 of 8
EXHIBIT 2.4
SUBSIDIARIES OF MIS
-------------------------------------------------------------------------------
NONE
EXHIBIT 2.5
PRESENT OFFICERS AND DIRECTORS MIS
-------------------------------------------------------------------------------
OFFICERS
President.......................................... Xxxxxx X. Xxxxxxx
Treasurer.......................................... Xxxxxx X. Xxxxxxx
Secretary.......................................... Xxxxxx X. Xxxxxxx
DIRECTORS
---------
1. Xxxxxx X. Xxxxxxx
EXHIBIT 2.6
AUDITED FINANCIAL STATEMENTS MIS
-------------------------------------------------------------------------------
TO BE PROVIDED WITHIN SIXTY (60) DAYS OF CLOSING IF SUCH FINANCIAL STATEMENTS
ARE REQUIRED UNDER THE SECURITIES AND EXCHANGE ACT OF 1934.
EXHIBIT 2.8
LIABILITIES OF MIS
-------------------------------------------------------------------------------
NONE
EXHIBIT 2.12
MIS LITIGATION AND LEGAL PROCEEDINGS
-------------------------------------------------------------------------------
NONE
EXHIBIT 2.16
EXCEPTIONS TO GOOD TITLE TO ASSETS OF MIS
-------------------------------------------------------------------------------
NONE
EXHIBIT 2.17
MATERIAL CONTRACTS OF MIS
-------------------------------------------------------------------------------
Letter Agreement dated September 7, 1999 between Xxxxx Xxxxx and Xxxxxx X.
Xxxxxxx, the shareholders of MIS, and Online Investors Advantage, Inc., a
wholly owned subsidiary of ZiaSun, setting forth compensation terms for
Messrs. Xxxxx and Xxxxxxx to perform speaking services for Online
Investors.
EXHIBIT 3.5
SUBSIDIARIES OF ZIASUN
-------------------------------------------------------------------------------
1. Online Investors Advantage Incorporated, a Utah corporation ("OIA"), is
a wholly owned subsidiary of ZiaSun. OIA is in the business training individuals
how to effectively use the financial planning and investment tools available on
the internet to manage their own investment portfolios. The training is
structured around a five-step discipline, which includes searching for an
investment, evaluating the investment and assessing the risk, timing the
purchase, establishing an exit point and monitoring the investment. This is done
through live workshops, and video-based, self-directed home learning programs,
which include the use of OIA's proprietary website xxx.xxxxxxxxxxxxxxx.xxx. In
exchange for all of the capital stock of OIA, the
2. BestWay Beverages, Inc., a Nevada Corporation is a wholly owned
subsidiary of ZiaSun Technologies, Inc. BestWay Beverages, Inc., is inactive
presently but 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.
3. 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.
4. Asia Prepress Technologies, Inc. ("Asia Prepress"), a Maryland
corporation, is a wholly owned subsidiary of ZiaSun. Asia Prepress which is
headquartered in Glen Burnie Maryland, and has operations in the Philippines, is
an Internet-based provider of electronic book and document conversion and data
entry services. Asia Prepress provides a true 24/7 operation for conversion of
books and other hard-copy documents into a searchable electronic format via the
Internet.
5. Asia Internet Xxxxxxxx.xxx, Inc. ("Asia Internet"), a Maryland
corporation is a wholly owned subsidiary of ZiaSun. Asia Internet which has
operations in the Philippines, is an Internet-based provider of background
customer service for its client's websites. Asia Internet Services provides a
true 24/7 response center for its background website customer service, wherein
they become the first point-of-contact response for any inquiries to a given
customer's website.
EXHIBIT 3.6
PRESENT OFFICES AND DIRECTORS OF ZIASUN
-------------------------------------------------------------------------------
OFFICERS
--------
President and CEO........................................ Xxxxx X. Xxxxxxx
Vice President........................................... Vacant
Chief Financial Officer.................................. Xxxxx X. Xxxxxxx
Secretary................................................ Xxxxx X. Xxxxxxx
DIRECTORS
---------
Xxxxx X. Xxxxxxx
D. Xxxxx Xxxxx
Xxxx X. Xxxxxxx
Xxxx Xxx Xxxxx
Xxxxxxxxxxx X. Xxxxxx
EXHIBIT 3.9
PENDING LITIGATION OF ZIASUN
-------------------------------------------------------------------------------
ZIASUN TECHNOLOGIES, INC. V. XXXXX X. XXXXXXXXX, ET AL. The company is a party
Plaintiff in the matter of ZiaSun Technologies, Inc. v. Xxxxx X. Xxxxxxxxx, et
al., United Xxxxxx Xxxxxxxx Xxxxx, Xxxxxxx Xxxxxxxx xx Xxxxxxxxxx, X00-0000.
This action arises from the defendants alleged defamatory campaign against the
Company and its officers and directors. This alleged cyber smear campaign
involved the defendants postings of statements about the Company and its offices
and directors which are alleged to be false and defamatory. The Company alleges
that the defendants were and are knowingly posting false statements with the
intent of negatively impacting the Company's stock prices in order for
defendants to benefit financially in short selling. To protect the Company, its
shareholders and its officers and directors, on June 24, 1999, the Company filed
a civil action in the United States District Court, Western District of
Washington seeking damages and injunction relief, alleging among other things,
Securities Fraud through the defendants posting of false and misleading
defamatory statements, violation of the Washington Consumer Protection Act,
Intentional Interference with Business Expectancy, Violation of Federal RICO
Statute 28 USA Sec. 1962, and violation of Washington's Criminal Profiteering
Act. On November 29,1999, defendant, Xxxxxxx Xxxxxxxxxxx who posts under the
name "Xxxxx Xxxxxxxxxx" filed a motion to dismiss on various grounds including
that Washington was improper venue. The Xxxxxxxxx Xxxxxx Xxxxxxx granted the
Company's motion for preliminary injunction against Xxxxx Xxxxxxxxx on January
21, 2000, restraining him from posting defamatory or untrue remarks on the
internet or elsewhere. On February 28, 2000, the Court granted the defendant,
Worthington's motion on the grounds of improper venue without ruling on the
defendant's other claims motions, and further ruled on the Court's own
initiative that venue was inappropriate for all defendants, dismissing the case.
The Company thereafter filed a motion for reconsideration of the dismissal
asking in the alternative that this case be transferred to another venue. The
Court granted The Company's motion for reconsideration on March 24, 2000,
reinstating the action and pending preliminary injunction, and subsequently, on
April 7, 2000, ordered that the entire action be transferred to the United
States District Court for the Northern District of California. The case was
physically retained in Washington for 30 days and then transferred to the United
States District Court for the Northern District of California, before the
Xxxxxxxxx Xxxxxxx X. Xxxxxx, on approximately May 5, 2000. The case has since
been transferred to Judge Xxxxxxx X. Xxxxxxxx. The matter is pending at present
time.
ZIASUN TECHNOLOGIES, INC. V. FINANCIAL XXX.XXX, INC., ET AL. The company was a
party Plaintiff in the matter of ZiaSun Technologies, Inc. v. Financial xxx.Xxx,
Inc., et al., Xxxxxxx Xxxxx xx Xxxxxxxx Xxxxxx, Xxxxxxx, 00-0000-XX-00-X. This
action arises from the defendants posting of alleged false and defamatory
article about the Company on its website known as "The Stock Detective." The
defendants allegedly knowingly posted the false and defamatory article with the
intent on negatively impacting the Company's stock prices in order for
defendants to benefit financially. The Company requested that defendant publish
a retraction but defendant has refused to do so. To protect the Company, its
shareholders and its officers and directors, the Company filed a civil action in
the Circuit Court of Seminole County Florida, seeking damages and injunction
relief. The matter is pending at present time.
JOAKIMIDIS X. XXXXXX, ET AL. The company was a party cross-defendant in the
matter of Xxxxxx Joakimidis v. Xxxxxx Xxxxxx, et al., Superior Court of
California, County of San Diego, Case No. 730826. The Plaintiff alleges Unfair
Business Practices, Fraud and Breach of Contract against ZiaSun, alleging that
in October 1997 he invested in various corporations, including ZiaSun based on
representations of third parties other than ZiaSun. Plaintiff alleges that the
financial condition of these corporations were other than as represented to him,
that past officers and directors of these corporations made misrepresentations
during the course of attempting to settle their dispute, and that these
corporations breached the terms of the alleged settlement. The Plaintiff is
claiming damages of $45,000 and is also seeking punitive damages. The Company
believes that the allegations are without merit and will vigorously defend this
matter. The matter is pending at present time.
EXHIBIT 3.13
EXCEPTIONS TO GOOD TITLE TO ASSETS OF ZIASUN
-------------------------------------------------------------------------------
NONE
EXHIBIT 5.2.3
POST CLOSING OFFICERS AND DIRECTORS OF MIS
-------------------------------------------------------------------------------
OFFICERS
--------
President.......................................... Xxxxxx X. Xxxxxxx
Treasurer.......................................... Xxxxxx X. Xxxxxxx
Secretary.......................................... Xxxxxx X. Xxxxxxx
DIRECTORS
---------
1. Xxxxxx X. Xxxxxxx
2. D. Xxxxx Xxxxx
EXHIBIT 8.12
BROKERS
-------------------------------------------------------------------------------
With the exception of the shares issued to the Shareholders of MIS 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.
