ACQUISITION AGREEMENT AND PLAN OF REORGANIZATION
ZiaSun Technologies, Inc.
A Nevada Corporation
ACQUISITION OF SHARES OF
Seminar Marketing Group, Inc.
A Utah Corporation
Dated: September 8, 2000
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 Exemption from Registration .......................... 3
1.5 Registration Rights .................................. 4
1.6 Non-taxable Transaction .............................. 4
2. REPRESENTATION AND WARRANTIES OF THE SHAREHOLDERS ............. 3
2.1 Organization ......................................... 4
2.2 Capital Stock ........................................ 4
2.3 Options, Warrants, Rights, etc. ...................... 4
2.4 Subsidiaries ......................................... 4
2.5 Directors and Officers................................ 4
2.6 Financial Statements.................................. 4
2.7 Absence of Changes.................................... 4
2.8 Absence of Undisclosed Liabilities.................... 5
2.9 Tax Returns........................................... 5
2.10 Patents, Trade Names and Rights....................... 5
2.11 Compliance with Laws.................................. 5
2.12 Litigation............................................ 5
2.13 Authority............................................. 5
2.14 Ability to Carry Out Obligations...................... 5
2.15 Full Disclosure....................................... 6
2.16 Assets................................................ 6
2.17 Material Contracts.................................... 6
3. REPRESENTATIONS AND WARRANTIES OF ZIASUN ...................... 6
3.1 Organization.......................................... 6
3.2 Capital Stock......................................... 6
3.3 Options, Warrants, Rights, etc. ...................... 6
3.4 Non-Reporting Publicly Traded Status ................. 6
3.5 Subsidiaries ......................................... 6
3.6 Directors and Officers ............................... 7
3.7 Patents, Trade Names and Rights....................... 7
3.8 Compliance with Laws.................................. 7
3.9 Litigation............................................ 7
3.10 Authority............................................. 7
3.11 Ability to Carry Out Obligations...................... 7
3.12 Full Disclosure....................................... 7
3.13 Assets................................................ 8
4. COVENANTS...................................................... 8
4.1 Investigative Rights.................................. 8
4.2 Conduct of Business................................... 8
Page (i)
Table of Contents (continued) Page
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5. CLOSING ...................................................... 8
5.1 Closing............................................... 8
5.2 Shareholders' Deliveries at Closing................... 8
5.3 ZiaSun's Deliveries at Closing........................ 8
6 CONDITIONS TO OBLIGATIONS TO CLOSE............................. 9
6.1 Conditions to Obligations of SMG Shareholders to Close.. 9
6.2 Conditions to Obligations of ZiaSun .................. 9
7. INDEMNIFICATION................................................ 9
7.1 Indemnification by Shareholders....................... 9
7.2 Indemnification by ZiaSun ............................ 10
7.3 Notice and Opportunity to Defend...................... 10
8. MISCELLANEOUS.................................................. 10
8.1 Costs................................................. 11
8.2 Additional Documentation.............................. 11
8.3 Captions and Headings................................. 11
8.4 No Oral Change........................................ 11
8.5 Non-Waiver............................................ 11
8.6 Time of Essence....................................... 11
8.7 Choice of Law......................................... 11
8.8 Counterparts and/or Facsimile Signature............... 11
8.9 Notices............................................... 11
8.10 Binding Effect........................................ 12
8.11 Mutual Cooperation.................................... 12
8.12 Brokers............................................... 12
8.13 Survival of Representations and Warranties............ 12
Signature Pages ...................................... 13
EXHIBIT 1.3.1 Shares issued and delivered to SMG Shareholders at Closing
EXHIBIT 1.4 Subscription Agreement
EXHIBIT 1.5 Registration Rights Agreement
EXHIBIT 2.4 Subsidiaries of SMG
EXHIBIT 2.5 Present Officers and Directors of SMG
EXHIBIT 2.6 Audited Financial Statements of SMG
EXHIBIT 2.8 Liabilities of SMG
EXHIBIT 2.12 SMG Legal Proceedings and Litigation
EXHIBIT 2.16 Exceptions to Good Title to Assets of SMG
EXHIBIT 2.17 Material Contracts of SMG
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 SMG
EXHIBIT 8.12 Brokers
Page (ii)
AGREEMENT
---------
This Acquisition Agreement and Plan of Reorganization (the "Agreement" or
"Acquisition Agreement") made as of September 8, 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 Seminar Marketing Group, Inc., a corporation organized and existing
under the laws of the State of Utah ("SMG").
A. Whereas, SMG is a marketing group comprised of various marketing and
promotional personnel, consultants, and speakers who provide services to Online
Investors Advantage, Inc. ("Online"), a wholly owned subsidiary of ZiaSun.
B. Whereas, Shareholders hold all of the issued and outstanding common
stock of SMG; 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 SMG held by the Shareholders, thereby making
SMG a wholly owned subsidiary of ZiaSun; and
D. Whereas, Shareholders desire to exchange all of the issued and
outstanding capital stock of SMG for Three Hundred Seventy Thousand (370,000)
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 SMG, ZiaSun shall acquire all of the issued
and outstanding capital stock of SMG (the "SMG Shares") owned by the
Shareholders of SMG.
1.2 Acquisition Consideration. The total Acquisition Consideration to
be paid by ZiaSun for the SMG Shareholders shall be Three Hundred Seventy
Thousand (370,000) 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, Three
Hundred Seventy Thousand (370,000) unregistered and restricted shares
of the Common stock of ZiaSun shall be issued and delivered to the SMG
Shareholders of SMG 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) and/or Rule 506 of Regulation D 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, a
Subscription Agreement 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
SMG 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 SMG AND THE SHAREHOLDERS.
The Officers and Directors of SMG and certain Shareholders (the "Warranting
Shareholders") hereby represent and warrant to ZiaSun that:
2.1 Organization. SMG 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. On or before the Closing, the SMG Articles of
Incorporation shall have been amended to reflect that the authorized
capital stock of SMG consists of 5,000,000 shares of Common Stock, $0.001
par value per share (the "SMG Shares"). Immediately prior to closing there
shall be Three Hundred Seventy Thousand (370,000) SMG Shares issued and
outstanding, all of which are owned by the Shareholders. All of the issued
and outstanding shares of capital stock of SMG are duly and validly issued,
fully paid and nonassessable. There are no other authorized class of
capital stock.
Page 2
2.3 Options, Warrants, Rights, etc. There are no outstanding
subscriptions, options, rights, warrants, debentures, instruments,
convertible securities or other agreements or commitments obligating SMG to
issue or to transfer from treasury any additional shares of its capital
stock of any class.
2.4 Subsidiaries. SMG 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 SMG 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 SMG 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 SMG throughout the periods indicated, and will
fairly present the financial position of SMG 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 SMG, 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, SMG 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 SMG 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,
SMG 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 SMG.
2.10 Patents, Trade Names and Rights To the best of its knowledge SMG
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. SMG 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.
Page 3
2.11 Compliance with Laws SMG 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.
2.12 Litigation. Except as set forth in Exhibit 2.12 attached hereto,
neither SMG 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 SMG or its subsidiaries or
their business, assets or financial condition. SMG 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. SMG and its subsidiaries are not engaged
in any material lawsuits to recover moneys due it.
2.13 Authority. The Board of Directors of SMG has authorized the
execution of this Agreement and the consummation of the transactions
contemplated herein, and SMG 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
agreem ent or instrument to which SMG 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 SMG; or (c) an event that would result in the creation or
imposition of any lien, charge or encumbrance on any asset of SMG.
2.15 Full Disclosure. None of the representations and warranties made
by SMG, 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, SMG 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 SMG are set forth in
Exhibit 2.17, attached hereto an incorporated herein.
3. REPRESENTATIONS AND WARRANTIES OF ZIASUN.
ZiaSun represents and warrants to SMG and the Shareholders that:
Page 4
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 as of June 30, 2000, there were 32,330,170 shares are
presently issued and outstanding. Immediately prior to Closing there shall
not be more the 32,750,000 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.
Page 6
4.2 Conduct of Business. Prior to Closing, the Shareholders represent
that SMG shall conduct its business in the normal course. SMG 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 September 30, 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 SMG 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 The completed and executed appropriate Investor Letter.
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 SMG 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 SMG 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 SMG 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 SMG 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 SMG 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
Page 8
(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.
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 SMG, addressed to: and the Shareholders, to them at:
---------------------------------------------------------
Mr. Xxxxxx Xxxxxx III
President
SMG Investors Advantage, Inc.
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxx, Xxxx 00000
With a copy to their Counsel, addressed to:
Xx. Xxxxxx X. Xxxxxxxxx
Attorney at Law
Eagle Gate Building
60 East South Temple
Suite 1680 B
Xxxx Xxxx Xxxx, Xxxx 00000
Page 10
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: 18 Sep 2000 /s/ Xxxxx X. Xxxxxxx
---------------------------------
By: Xxxxx X. Xxxxxxx
Its: President and CEO
SEMINAR MARKETING GROUP, INC.
A Utah Corporation
Dated: September 29, 2000 /S/ Xxxxxx Xxxxxx III
---------------------------------
By: Xxxxxx Xxxxxx III
Its: President
Dated: September 29, 2000 /S/ Lincoln Xxxxxxxx
---------------------------------
By: Lincoln Xxxxxxxx
Its: Secretary
Page 11
SHAREHOLDERS OF SEMINAR MARKETING GROUP, INC.
Dated: ____________________ ______________________________________
Shareholder Name and Signature
Page 12
EXHIBIT 1.3.1
SHARES TO BE ISSUED TO SMG SHAREHOLDERS AT CLOSING
--------------------------------------------------------------------------------
[TO BE PROVIDED PRIOR TO CLOSING]
EXHIBIT 1.4
SUBSCRIPTION AGREEMENT
--------------------------------------------------------------------------------
ZIASUN TECHNOLOGIES, INC.
This Subscription Agreement, is made as of the date set forth on the
signature page hereof, between ZiaSun Technologies, Inc., a Nevada corporation,
with offices at 000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx Xxxxx, Xxxxxxxxxx 00000
(the "Company") and the undersigned (the "Subscriber").
Whereas, the Company has entered into an Acquisition Agreement and Plan of
Reorganization (the "Acquisition Agreement") dated September 8, 2000, with the
shareholders of Seminar Marketing Group, Inc., a Utah corporation ("SMG") under
which the Company will acquire, in a stock-for-stock exchange, all of the issued
and outstanding shares of SMG, in exchange for 370,000 restricted shares of the
Company's Common Stock, $0.001 par value per share.
Whereas, pursuant to the terms of the above reference Acquisition Agreement
and that certain Confidential Term Sheet dated September 8, 2000, (the "Term
Sheet"), the Company desires to issue 370,000 restricted shares of the Company's
Common Stock, $0.001 par value per share (the "Shares"), pursuant to an
exemption from the registration provisions of the Securities Act of 1933 (the
"Act") provided Section 4(2) and/or by Rule 506 of Regulation D, and the
Subscriber desires to acquire the number of Shares set forth on the signature
page hereof.
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants hereinafter set forth, the parties hereto do hereby agree as follows:
I. SUBSCRIPTION FOR SHARES AND REPRESENTATIONS BY AND COVENANTS OF
SUBSCRIBER
1.1 Subject to the terms and conditions hereinafter set forth, the
Subscriber hereby subscribes for and to acquire from the Company such
number of Shares as is set forth upon the signature page hereof pursuant to
the terms of the Acquisition Agreement, and the Company agrees to issue and
deliver such Shares to the Subscriber, in exchange for all of the
Subscribers shares of common stock of SMG. The Shares will be delivered by
the Company within 10 days following the consummation of acquisition and
the deliver of Subscriber's shares of SMG pursuant to the terms of the
Acquisition Agreement.
1.2 The Subscriber recognizes that the purchase of Shares involves a
high degree of risk in that (i) an investment in the Company is highly
speculative and only investors who can afford the loss of their entire
investment should consider investing in the Company and the Shares; (ii) he
may not be able to liquidate his investment; (iii) transferability of the
securities comprising the Shares is extremely limited; and (iv) an investor
could suffer the loss of his entire investment, as well as other risk
factors as more fully set forth herein and in the Term Sheet.
Page S-1
1.3 The Subscriber has either (i) a pre-existing personal or business
relationship with the Company or one or more of its officers, directors, or
control persons or (ii) by reason of Purchaser business or financial
experience or by reason of the business or financial of Purchaser's
financial advisor who is unaffiliated with and who is not compensated,
directly or indirectly, by the Company or any affiliate or selling agent of
the Company, Purchaser is capable of evaluating the risks and merits of
this investment and of protecting Purchaser's own interests in connection
with this investment.
1.4 The Subscriber represents and warrants that he is able to bear the
economic risk of an investment in the Shares. The Subscriber further
represents and warrants that the information furnished in the Investor
Questionnaire is accurate and complete in all material respects.
1.5 The Subscriber acknowledges that he has prior investment
experience; including investment in non-listed and non-registered
securities and that he recognizes the highly speculative nature of this
investment.
1.6 The Subscriber acknowledges receipt and careful review of the Term
Sheet and all exhibits thereto and other documents furnished in connection
with this transaction (collectively, the "Offering Documents") and hereby
represents that he has been furnished by the Company during the course of
this transaction with all information regarding the Company which he has
requested or desires to know and that he has been afforded the opportunity
to ask questions of and receive answers from duly authorized officers or
other representatives of the Company concerning the terms and conditions of
the offering.
1.7 The Subscriber acknowledges that this offering of Shares may
involve tax consequences and that the contents of the Offering Documents do
not contain tax advice or information. The Subscriber acknowledges that he
must retain his own professional advisors to evaluate the tax and other
consequences of an investment in the Shares.
1.8 The Subscriber acknowledges that this offering of Shares has not
been reviewed by the United States Securities and Exchange Commission
("SEC") because of the Company's representations that this is intended to
be a nonpublic offering pursuant to an exemption from the registration
provisions of the Securities Act of 1933 (the "Act") provided by Section
4(2) and/or Rule 506 of Regulation D. The Subscriber represents that the
Shares are being purchased for his own account, for investment and not for
distribution or resale to others. The Subscriber agrees that he will not
sell or otherwise transfer the Shares unless they are registered under the
Act or unless an exemption from such registration is available.
1.9 The Subscriber understands that Rule 144 (the "Rule") promulgated
under the Act requires, among other conditions, a one-year holding period
prior to the resale (in limited amounts) of securities acquired in a
non-public offering without having to satisfy the registration requirements
under the Act. The Subscriber understands that the Company makes no
representation or warranty regarding its fulfillment in the future of any
reporting requirements under the Securities Exchange Act of 1934, as
amended, or its dissemination to the public of any current financial or
other information concerning the Company, as is required by the Rule as one
of the conditions of its availability. The Subscriber understands and
hereby acknowledges that the Company is under no obligation to register the
Shares under the Act, with the exception of certain registration rights set
forth in Article IV herein. The Subscriber consents that the Company may,
if it desires, permit the transfer of the Common Stock out of his name only
when his request for transfer is accompanied by an opinion of counsel
reasonably satisfactory to the Company that neither the sale nor the
proposed transfer results in a violation of the Act or any applicable state
"blue sky" laws (collectively "Securities Laws").
Page S-2
1.10 The Subscriber consents to the placement of a legend on any
certificate or other document evidencing the Shares stating that they have
not been registered under the Act and setting forth or referring to the
restrictions on transferability and sale thereof.
1.11 The Subscriber acknowledges that if he is a Registered
Representative of an NASD member firm, he must give such firm the notice
required by the NASD's Rules of Fair Practice, receipt of which must be
acknowledged by such firm on the signature page hereof.
1.12 If the undersigned Subscriber is a partnership, corporation,
trust or other entity, such partnership, corporation, trust or other entity
further represents and warrants that: (i) it was not formed for the purpose
of investing in the Company; (ii) it is authorized and otherwise duly
qualified to purchase and hold the Shares; and (iii) that this Subscription
Agreement has been duly and validly authorized, executed and delivered
constitutes the legal, binding and enforceable obligation of the
undersigned.
II. REPRESENTATIONS BY THE COMPANY
2.1 The Company represents and warrants to the Subscriber that prior
to the consummation of this offering and at the Closing Date:
(a) The Company is a corporation duly organized, existing and in
good standing under the laws of the State of Nevada and has the
corporate power to conduct the business which it conducts and proposes
to conduct and is qualified to do business in California, Utah and any
other jurisdiction in which the Company conducts business.
(b) The execution, delivery and performance of this Subscription
Agreement by the Company will have been duly approved by the Board of
Directors of the Company and all other actions required to authorize
and effect the offer and sale of the Shares will have been duly taken
and approved.
(c) The Shares have been duly and validly authorized and when
issued and paid for in accordance with the terms hereof, will be duly
and validly issued and fully paid and non assessable.
Page S-3
(d) The Company has obtained, or is in the process of obtaining,
all licenses, permits and other governmental authorizations necessary
to the conduct of its business; such licenses, permits and other
governmental authorizations obtained are in full force and effect; and
the Company is in all material respects complying therewith.
(e) The Company knows of no pending or threatened legal or
governmental proceedings to which the Company is a party which could
materially adversely affect the business, property, financial
condition or operations of the Company.
(f) The Company is not in violation of or default under, nor will
the execution and delivery of this Subscription Agreement, the
issuance of the Shares, and the incurrence of the obligations herein
and therein set forth and the consummation of the transactions herein
or therein contemplated, result in a violation of, or constitute a
default under, the Company's articles of incorporation or by-laws, any
material obligations, agreement, covenant or condition contained in
any bond, debenture, note or other evidence of indebtedness or in any
material contract, indenture, mortgage, loan agreement, lease, joint
venture or other agreement or instrument to which the Company is a
party or by which it or any of its properties may be bound or any
material order, rule, regulation, writ, injunction, or decree of any
government, governmental instrumentality or court, domestic or
foreign.
III. TERMS OF SUBSCRIPTION
3.1 The shares will be offered exclusively to the Shareholders of SMG in
accordance with the terms and conditions of the Acquisition Agreement.
3.2 The Subscriber hereby authorizes and directs the Company to deliver
certificates representing the securities to be issued to such Subscriber
pursuant to this Subscription Agreement to the residential or business address
indicated in the Investor Questionnaire.
3.3 If the Subscriber is not a United States person, such Subscriber hereby
represents that it has satisfied itself as to the full observance of the laws of
its jurisdiction in connection with any invitation to subscribe for the
securities comprising the Shares or any use of this Agreement, including (i) the
legal requirements within its jurisdiction for the purchase of the Shares, (ii)
any foreign exchange restrictions applicable to such purchase, (iii) any
governmental or other consents that may need to be obtained, and (iv) the income
tax and other tax consequences, if any, that may be relevant to the purchase,
holding, redemption, sale or transfer of the securities comprising the Shares.
Such Subscriber's subscription and payment for, and his or her continued
beneficial ownership of the Shares, will not violate any applicable securities
or other laws of the Subscriber's jurisdiction.
IV. REGISTRATION RIGHTS
4.1 "Piggyback" Registration Rights. The Shares to be issued to Subscriber
shall be subject to certain "piggyback registration rights" as set forth in that
certain Registration Rights Agreement, a copy of which is attached as Exhibit
1.5, to the Acquisition Agreement.
Page S-4
V. MISCELLANEOUS
5.1 Any notice or other communication given hereunder shall be deemed
sufficient if in writing and sent by registered or certified mail, return
receipt requested, addressed to the Company, at its registered office, 000
Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx Xxxxx, Xxxxxxxxxx 00000, Attention: Xxxxx X.
Xxxxxxx, President and CEO, and to the Subscriber at his address indicated on
the last page of this Subscription Agreement. Notices shall be deemed to have
been given on the date of mailing, except notices of change of address and
notices sent from outside the continental United States, which shall be deemed
to have been given when received.
5.2 This Subscription Agreement shall not be changed, modified or amended
except by a writing signed by the parties to be charged, and this Subscription
Agreement may not be discharged except by performance in accordance with its
terms or by a writing signed by the party to be charged.
5.3 This Subscription Agreement shall be binding upon and inure to the
benefit of the parties hereto and to their respective heirs, legal
representatives, successors and assigns. This Subscription Agreement sets forth
the entire agreement and understanding between the parties as to the subject
matter thereof and merges and supersedes all prior discussions, agreements and
understandings of any and every nature among them.
5.4 Notwithstanding the place where this Subscription Agreement may be
executed by any of the parties hereto, the parties expressly agree that all the
terms and provisions hereof shall be construed in accordance with and governed
by the laws of the State of California. The parties hereby agree that any
dispute which may arise between them arising out of or in connection with this
Subscription Agreement shall be adjudicated before a court located in San Diego
and they hereby submit to the exclusive jurisdiction of the courts of the State
of California located in San Diego, California and of the federal courts in the
Southern District of California with respect to any action or legal proceeding
commenced by any party, and irrevocably waive any objection they now or
hereafter may have respecting the venue of any such action or proceeding brought
in such a court or respecting the fact that such court is an inconvenient forum,
relating to or arising out of this Subscription Agreement or any acts or
omissions relating to the sale of the securities hereunder, and consent to the
service of process in any such action or legal proceeding by means of registered
or certified mail, return receipt requested, in care of the address set forth
below or such other address as the undersigned shall furnish in writing to the
other.
5.5 This Subscription Agreement may be executed in counterparts. Upon the
execution and delivery of this Subscription Agreement by the Subscriber, this
Subscription Agreement shall become a binding obligation of the Subscriber with
respect to the purchase of Shares as herein provided; subject, however, to the
right hereby reserved to the Company to enter into the same agreements with
other subscribers and to add and/or to delete other persons as subscribers.
Page S-5
5.6 The holding of any provision of this Subscription Agreement to be
invalid or unenforceable by a court of competent jurisdiction shall not affect
any other provision of this Subscription Agreement, which shall remain in full
force and effect.
5.7 It is agreed that a waiver by either party of a breach of any provision
of this Subscription Agreement shall not operate, or be construed, as a waiver
of any subsequent breach by that same party.
5.8 The parties agree to execute and deliver all such further documents,
agreements and instruments and take such other and further action as may be
necessary or appropriate to carry out the purposes and intent of this
Subscription Agreement.
5.9 The Company agrees not to disclose the names, addresses or any other
information about the Subscribers, except as required by law, provided, that the
Company may use information relating to the Subscriber in any registration
statement under the Act, or as other wise required by law.
VI. RESTRICTIVE AND OTHER BLUE SKY LEGENDS
6.1 Any and all certificates representing the Shares, and any and all
securities issued in replacement thereof or in exchange therefore, 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.
6.2 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.
VII. SIGNATURE
The Signature Page to this Subscription Agreement is contained on page 7,
entitled Signature Page to Subscription Agreement.
Page S-6
SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Subscription Agreement as of
the ______ day of _____________________, 2000.
----------------------------------- --------------------------------
Signature of Subscriber Number of Shares Subscribed For
-----------------------------------
Name of Subscriber [please print]
-----------------------------------
Social Security or Taxpayer
Identification Number of Subscriber
--------------------------------------------------------------------------------
*If Subscriber is a Registered Representative with an NASD member firm, have the
following acknowledgment signed by the appropriate party:
The undersigned NASD member firm acknowledges receipt of the notice required by
Rule 3050 of the NASD Conduct Rules.
--------------------------------- --------------------------------------
Name of NASD Member Firm By: Authorized Officer
--------------------------------------------------------------------------------
Subscription Accepted:
ZIASUN TECHNOLOGIES, INC.
-------------------------
By: Xxxxx X. Xxxxxxx
Its: President and CEO
Page S-7
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 8, 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 Seminar Marketing Group, Inc., a
corporation organized and existing under the laws of the State of Utah ("SMG").
RECITALS
--------
A. Whereas, concurrently with the execution of this Agreement, the Company,
SMG 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 SMG in a
stock-for-stock exchange for Three Hundred Seventy Thousand (370,000)
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, SMG 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 SMG
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 9
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 9
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 9
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 9
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 9
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 9
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 9
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
SEMINAR MARKETING GROUP, INC.
A Utah Corporation
Dated: ____________________ ________________________________
By: Xxxxxx Xxxxxx III
Its: President
Dated: ____________________ ________________________________
By: Lincoln Xxxxxxxx
Its: Secretary
Page 8 of 9
SIGNATURE PAGE
TO
REGISTRATION RIGHTS AGREEMENT
FOR
SHAREHOLDERS OF SEMINAR MARKETING GROUP, INC.
Dated: ____________________ ________________________________
Signature of Shareholder
________________________________
Name of Shareholder (Print or Type Name)
Page 9 of 9
EXHIBIT 2.4
SUBSIDIARIES OF SMG
--------------------------------------------------------------------------------
NONE
EXHIBIT 2.5
PRESENT OFFICERS AND DIRECTORS SMG
--------------------------------------------------------------------------------
OFFICERS
--------
President.......................................... Xxxxxx Xxxxxx III
Vice President..................................... Xxxxxx Xxxxxx Sr.
Treasurer.......................................... Lincoln Xxxxxxxx
Secretary.......................................... Lincoln Xxxxxxxx
DIRECTORS
---------
1. Xxxxxx Xxxxxx III
2. Xxxxxx Xxxxxx Sr.
3. Lincoln Xxxxxxxx
EXHIBIT 2.6
AUDITED FINANCIAL STATEMENTS SMG
--------------------------------------------------------------------------------
TO BE PROVIDED WITHIN SIXTY (60) DAYS OF CLOSING
EXHIBIT 2.8
LIABILITIES OF SMG
--------------------------------------------------------------------------------
NONE
EXHIBIT 2.12
SMG LITIGATION AND LEGAL PROCEEDINGS
--------------------------------------------------------------------------------
NONE
EXHIBIT 2.16
EXCEPTIONS TO GOOD TITLE TO ASSETS OF SMG
--------------------------------------------------------------------------------
NONE
EXHIBIT 2.17
MATERIAL CONTRACTS OF SMG
--------------------------------------------------------------------------------
NONE
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.
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.
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. 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. ZiaSun is presently negotiating for the sale of
Momentum Internet to Vulcan Consultants, Ltd. Notice should be taken that on
July 1, 2000, ZiaSun entered into an agreement with Vulcan Consultant's Limited
under which ZiaSun would sell all shares of Momentum Internet Inc., to Vulcan
Consultants in exchange for 725,000 restricted shares of ZiaSun owned by Vulcan
Consultants. It is expected that this sale will be consummated on or before
September 30, 2000.
5. 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.
6. 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 SMG
--------------------------------------------------------------------------------
OFFICERS
--------
President.......................................... Xxxxxx Xxxxxx III
Vice President..................................... Xxxxxx Xxxxxx Sr.
Treasurer.......................................... Lincoln Xxxxxxxx
Secretary.......................................... Lincoln Xxxxxxxx
DIRECTORS
---------
1. Xxxxxx Xxxxxx III
2. Xxxxxx Xxxxxx Sr.
3. Lincoln Xxxxxxxx
EXHIBIT 8.12
BROKERS
--------------------------------------------------------------------------------
With the exception of the shares issued to the Shareholders of SMG 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.
