ACQUISITION AGREEMENT AND PLAN OF REORGANIZATION
ZiaSun Technologies, Inc.
A Nevada Corporation
ACQUISITION OF SHARES OF
Momentum Internet Incorporated
A Corporation organized under the laws of
the British Virgin Islands
Dated October 5, 1998
Table of Contents Page
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1 EXCHANGE OF SECURITIES .................................... 1
1.1 Exchange of Shares ............................... 1
1.2 Exemption from Registration ...................... 1
1.3 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 ..................................... 2
2.5 Directors and Officers............................ 2
2.6 Financial Statements.............................. 2
2.7 Absence of Changes................................ 2
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........................................ 3
2.13 Authority......................................... 3
2.14 Ability to Carry Out Obligations.................. 3
2.15 Full Disclosure................................... 3
2.16 Assets............................................ 4
2.17 Material Contracts................................ 4
3. REPRESENTATIONS AND WARRANTIES OF ZIASUN .................. 4
3.1 Organization...................................... 4
3.2 Capital Stock..................................... 4
3.3 Options, Warrants, Rights, etc. .................. 4
3.4 Non-Reporting Publicly Traded Status ............. 4
3.5 Subsidiaries ..................................... 4
3.6 Directors and Officers ........................... 5
3.7 Patents, Trade Names and Rights................... 5
3.8 Compliance with Laws.............................. 5
3.9 Litigation........................................ 5
3.10 Authority......................................... 5
3.11 Ability to Carry Out Obligations.................. 5
3.12 Full Disclosure................................... 5
3.13 Assets............................................ 6
4. COVENANTS.................................................. 6
4.1 Investigative Rights.............................. 6
4.2 Conduct of Business............................... 6
5. CLOSING ................................................. 6
5.1 Closing........................................... 6
5.2 Shareholders' Deliveries at Closing............... 6
5.3 ZiaSun's Deliveries at Closing.................... 7
Table of Contents (continued) Page
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6 CONDITIONS TO OBLIGATIONS TO CLOSE......................... 7
6.1 Conditions to Obligations of Momentum Internet
Shareholders to Close........................... 7
6.2 Conditions to Obligations of ZiaSun .............. 7
7. INDEMNIFICATION............................................ 7
7.1 Indemnification by Shareholders................... 7
7.2 Indemnification by ZiaSun ........................ 7
7.3 Notice and Opportunity to Defend.................. 8
8. MISCELLANEOUS.............................................. 8
8.1 Costs............................................. 8
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................................... 9
8.7 Choice of Law..................................... 9
8.8 Counterparts and/or Facsimile Signature........... 9
8.9 Notices........................................... 9
8.10 Binding Effect.................................... 10
8.11 Mutual Cooperation................................ 10
8.12 Brokers........................................... 10
8.13 Survival of Representations and Warranties........ 10
Signature Pages .................................. 10
SCHEDULES A ...... List of Momentum Internet Shareholders
EXHIBIT 1.2....... Investment Letter
EXHIBIT 2.4....... Subsidiaries of Momentum Internet
EXHIBIT 2.5....... Present Officers and Directors of Momentum Internet
EXHIBIT 2.6....... Audited Financial Statements of Momentum Internet
EXHIBIT 2.8....... Liabilities of Momentum Internet
EXHIBIT 2.12...... Momentum Internet Legal Proceedings and Litigation
EXHIBIT 2.16...... Exceptions to Good Title to Assets of
Momentum Internet
EXHIBIT 2.17...... Material Contracts of Momentum Internet
EXHIBIT 3.5....... Subsidiaries of ZiaSun
EXHIBIT 3.6....... Present Officers and Directors of ZiaSun
EXHIBIT 3.13...... Exceptions to Good Title to Assets of ZiaSun
EXHIBIT 5.2.3..... Post Closing Officers and Directors of
Momentum Internet
EXHIBIT 8.12...... Brokers
ii
AGREEMENT
---------
This Acquisition Agreement and Plan of Reorganization (the "Agreement" or
"Acquisition Agreement") made this 5th day of October, 1998, 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 Momentum Internet Incorporated, a corporation organized and existing
under the laws of the British Virgin Islands ("Momentum Internet").
A. Whereas, Shareholders hold all of the issued and outstanding common
stock of Momentum Internet; and
B. Whereas, ZiaSun, a non-reporting public company, desires to exchange
shares of its Common Stock, $0.001 par value (the "Common Stock") for all of the
issued and outstanding capital stock of Momentum Internet held by the
Shareholders, thereby making Momentum Internet a wholly owned subsidiary of
ZiaSun; and
C. Whereas, Shareholders desire to exchange all of the issued and
outstanding capital stock of Momentum Internet for 565,000 shares of the Common
stock of ZiaSun, all as more fully set forth herein below; and
D. Whereas, the Board of Directors of ZiaSun has authorized its proper
corporate officers to effect the transactions contemplated herein.
AGREEMENT
---------
NOW THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree to the following terms
and conditions:
1. EXCHANGE OF SECURITIES.
1.1. Exchange of Shares. Subject to all the terms and conditions of this
Agreement, ZiaSun will deliver to the Shareholders of Momentum Internet 565,000
shares of previously authorized but unissued unregistered and restricted shares
of the Common Stock, $0.001 par value per shares of ZiaSun (the "ZiaSun
Shares"), in exchange for all of the issued and outstanding capital stock of
Momentum Internet owned by the Momentum Internet Shareholders.
1.2. 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 1.2 attached hereto.
Page 1 of 13
1.3. 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 MOMENTUM INTERNET AND THE SHAREHOLDERS.
The Officers and Directors of Momentum Internet and certain Shareholders
(the "Warranting Shareholders") hereby represent and warrant to ZiaSun that:
2.1. Organization. Momentum Internet is a corporation duly organized,
validly existing and in good standing under the laws of the Bristish Virgin
Islands, 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 Momentum Internet
consists of 50,000 shares of capital stock, one dollar ($1.00) par value per
share, (United States Currency) (the "Momentum Internet Shares") of which one
(1) share is issued and outstanding. Immediately prior to closing there shall be
only one (1) Momentum Internet Shares issued and outstanding all of which are
owned by the Shareholders. All of the issued and outstanding shares of capital
stock of Momentum Internet 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 Momentum Internet to
issue or to transfer from treasury any additional shares of its capital stock of
any class.
2.4. Subsidiaries. Momentum Internet 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 Momentum Internet 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, Momentum Internet 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 Momentum Internet throughout the periods
indicated, and will fairly present the financial position of Momentum Internet
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 Momentum Internet, except for changes in the ordinary course of
business, which changes have not, in the aggregate, been materially adverse.
Page 2 of 13
2.8. Absence of Undisclosed Liabilities. Except as set forth on Exhibit 2.8
attached hereto, Momentum Internet 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 Momentum Internet 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,
Momentum Internet 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 Momentum Internet.
2.10. Patents, Trade Names and Rights. To the best of its knowledge
Momentum Internet 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. Momentum Internet 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. Momentum Internet 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 Momentum Internet 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 Momentum Internet or its
subsidiaries or their business, assets or financial condition. Momentum Internet
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. Momentum Internet and its
subsidiaries are not engaged in any material lawsuits to recover moneys due it.
2.13. Authority. The Board of Directors of Momentum Internet has authorized
the execution of this Agreement and the consummation of the transactions
contemplated herein, and Momentum Internet 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 Momentum Internet 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 Momentum Internet; or
(c) an event that would result in the creation or imposition of any lien, charge
or encumbrance on any asset of Momentum Internet.
Page 3 of 13
2.15. Full Disclosure. None of the representations and warranties made by
Momentum Internet, 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, Momentum Internet 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 Momentum Internet are set
forth in Exhibit 2.17, attached hereto an in corporated herein.
3. REPRESENTATIONS AND WARRANTIES OF ZIASUN.
ZiaSun represents and warrants to Momentum Internet and the Shareholders
that:
3.1. Organization. ZiaSun is a corporation duly organized, validly existing
and in good standing under the laws of the State of Nevada, has all necessary
corporate powers to own its properties and to carry on its business as now owned
and operated by it, and is duly qualified to do business and is in good standing
in each of the states where its business requires qualification.
3.2. Capital Stock. The authorized capital stock of ZiaSun consists of
50,000,000 shares of common stock, $0.001 par value per share (the "Common
Stock") of which 7,900,009 shares are presently issued and outstanding.
Immediately prior to closing there shall be 7,900,009 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 no outstanding
subscriptions, options, rights, debentures, instruments, convertible securities
or other agreements or commitments obligation ZiaSun to issue or to transfer
from treasury any additional shares of its Common Stock, or any other class of
securities.
3.4. Non-Reporting Publicly Traded Status. The Common Stock of ZiaSun is
currently listed on the OTC Bulletin Board under the symbol "ZTEC". ZiaSun is a
non-reporting public company. It is not subject to the filing and reporting
requirements of the Securities Exchange Act of 1934 and as such does not file
any period or annual reports with the Securities and Exchange Commission.
Page 4 of 13
3.5. Subsidiaries. Except as set forth in Exhibit 3.5 attached hereto
ZiaSun does not have any other subsidiaries or own any interest in any other
enterprise.
3.6. Directors and Officers. The names and titles of all present officers
and directors of ZiaSun are as set forth on Exhibit 3.6 attached hereto.
3.7. Patents, Trade Names and Rights. To the best of its knowledge ZiaSun
and its subsidiaries own and hold all necessary patents, franchise rights,
trademarks, service marks, trade names, inventions, processes, know-how, trade
secrets, copyrights, licenses and other rights necessary to its business as now
conducted or proposed to be conducted. ZiaSun is not infringing upon or
otherwise acting adversely to the right or claimed right of any person with
respect to any of the foregoing.
3.8. Compliance with Laws. ZiaSun has complied with, and is not in
violation of, applicable federal, state or local statutes, laws and regulations
(including, without limitation, any applicable building, zoning or other law,
ordinance or regulation and all federal and state securities laws (including,
without limitation, the Securities Act of 1933 and the Securities Exchange Act
of 1934) and all material respects NASDAQ rules) affecting its properties or the
operation of its business. To the best of its knowledge all stock of ZiaSun
issued to date has been issued in compliance with all Federal and State
securities laws.
3.9. Litigation. ZiaSun is not a party to any suit, action, arbitration or
legal, administrative or other proceeding, or governmental investigation which
is pending or, to the best knowledge of ZiaSun threatened against or affecting
ZiaSun or its business, assets or financial condition except for suits as
described in its 1934 Act filings. ZiaSun is not in default with respect to any
order, writ, injunction or decree of any federal, state, local or foreign court,
department, agency or instrumentality applicable to it.
3.10. Authority. The Board of Directors of ZiaSun has authorized the
execution of this Agreement and the consummation of the transactions
contemplated herein, and ZiaSun has full power and authority to execute, deliver
and perform this Agreement, and this Agreement is a legal, valid and binding
obligation of ZiaSun enforceable in accordance with its terms.
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.
Page 5 of 13
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
Momentum Internet shall conduct its business in the normal course. Momentum
Internet 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 prior to October 15, 1998, 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
Momentum Internet held by the Shareholders, along with a stock power or
stock powers with signatures guaranteed, duly executed by the Shareholders
in blank or to ZiaSun Technologies, Inc.;
5.2.2 An investment letter in the form of Exhibit 1.2 hereof, duly
executed by the Shareholders;
5.2.3 Resignations of the officers and directors of Momentum Internet
and a resolution concurrently therewith appointing ZiaSun's designated
Officers and Directors as set forth on Exhibit 5.2.3 attached hereto
Page 6 of 13
5.3. ZiaSun's Deliveries at Closing. At the Closing, ZiaSun shall deliver
the following items:
5.3.1 Either (a) certificates representing the ZiaSun Shares, duly
issued with restrictive legend, to the Shareholders as listed on Schedule A
attached hereto, or (b) a copy of a letter from ZiaSun to its transfer
agent, Signature Stock Transfer, Inc., instructing such transfer agent to
issue the certificates representing the ZiaSun Shares to the Shareholders
as listed on Schedule A.
6. CONDITIONS TO OBLIGATIONS TO CLOSE AND MATERIAL TERMS OF AGREEMENT.
6.1. Conditions to Obligations of Momentum Internet 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.
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
Momentum Internet 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 Momentum Internet 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 Momentum Internet perform any of its material representations,
warranties, covenants or agreements in this Agreement or in any schedule,
certificate, exhibit or other instrument furnished or to be furnished by
Shareholders under this Agreement; provided however, that notice of any such
breach shall have been communicated with specificity within two (2) years of the
date hereof.
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.
Page 7 of 13
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.
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.
Page 8 of 13
8.2. Additional Documentation. The parties acknowledge that further
agreements and documents, in addition to the Exhibits appended hereto, may be
required in order to effect the transactions contemplated hereunder. Each party
agrees to provide and execute such other and further agreements or documentation
as, in the opinions of respective counsel, are reasonably necessary to effect
the transactions contemplated hereunder and to maintain regulatory and legal
compliance.
8.3. Captions and Headings. The article and paragraph headings throughout
this Agreement are for convenience and reference only and shall not define,
limit or add to the meaning of any provision of this Agreement.
8.4. No Oral Change. This Agreement and any provision hereof may not be
waived, changed, modified or discharged orally, but only by an agreement in
writing signed by the party against whom enforcement of any such waiver, change,
modification or discharge is sought.
8.5. Non-Waiver. The failure of any party to insist in any one or more
cases upon the performance of any of the provisions, covenants or conditions of
this Agreement or to exercise any option herein contained shall not be construed
as a waiver or relinquishment for the future of any such provisions, covenants
or conditions. No waiver by any party of one breach by another party shall be
construed as a waiver with respect to any subsequent breach.
8.6. Time of Essence. Time is of the essence of this Agreement and of each
and every provision.
8.7. Choice of Law. This Agreement and its application shall be governed by
the laws of the State of Nevada.
8.8. Counterparts and/or Facsimile Signature. This Agreement may be
executed in any number of counterparts, including counterparts transmitted by
telecopier or FAX, any one of which shall constitute an original of this
Agreement. When counterparts of facsimile copies have been executed by all
parties, they shall have the same effect as if the signatures to each
counterpart or copy were upon the same document and copies of such documents
shall be deemed valid as originals. The parties agree that all such signatures
may be transferred to a single document upon the request of any party.
8.9. Notices. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given
on the date of service if served personally on the party to whom notice is to be
given, or on the third day after mailing if mailed to the party to whom notice
is to be given, by first class mail, registered or certified, postage prepaid,
and properly addressed as follows:
If to ZiaSun, addressed to it at:
Xx. Xxxxxx X. Xxxxxx, President
ZiaSun Technologies, Inc.
000 X. Xxxxx, #00
Xxxxxx Xxxxx, Xxxxxxxxxx 00000
Page 9 of 13
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 Momentum Internet and the Shareholders, to them at:
Xxxxxxx Xxxxx
3E, Block 00
Xxxxx Xxxxxxxx, Xx Xxx Xxxx
Xxxx, Xxxx, Xxxxx
With a copy to their Counsel, addressed to:
Mr. Xxxx Xxx
Compusec Services Limited
Suite C, 16th Floor, On Hing Xxxxxxxx
0-0 Xx Xxxx Xxxxxxx, Xxxxxxx, Xxxx Xxxx
8.10. Binding Effect. This Agreement shall inure to and be binding upon the
heirs, executors, personal representatives, successors and assigns of each of
the parties to this Agreement.
8.11. Mutual Cooperation. The parties hereto shall cooperate with each
other to achieve the purpose of this Agreement and shall execute such other and
further documents and take such other and further actions as may be necessary or
convenient to effect the transaction described herein.
8.12. Brokers. The parties hereto represent that no other broker has
brought about this Agreement, and no other finder's fee has been paid or is
payable by either party, except for the broker whose name is set forth on
Exhibit 8.12, and whose fee shall be paid by the Shareholders. Each party hereto
shall indemnify and hold the other harmless against any and all claims, losses,
liabilities or expenses which may be asserted against it as a result of its
dealings, arrangements or agreements with any other broker.
8.13. Survival of Representations and Warranties. The representations,
warranties, covenants and agreements of the parties set forth in this Agreement
or in any instrument, certificate, opinion or other writing provided for herein
shall survive the Closing.
Page 10 of 13
AGREED AND ACCEPTED as of the date first above written.
ZIASUN TECHNOLOGIES, INC.
A Nevada Corporation
Dated: October 5, 1998 /S/ Xxxxxx X. Xxxxxx
-----------------------------------
By: Xxxxxx X. Xxxxxx
Its: President
Dated: October 5, 1998 /S/ Xxxxxxxx X. XxXxxx
-----------------------------------
By: Xxxxxxxx X. XxXxxx
Its: Secretary
MOMENTUM INTERNET INCORPORATED
A British Virgin
Islands Corporation
Dated: October 5, 1998 /S/ Xxxxxxx Xxxxx
-----------------------------------
By: Xxxxxxx Xxxxx
Its: Director
SHAREHOLDERS OF MOMENTUM INTERNET INCORPORATED WHO WILL WARRANT
THE REPRESENTATIONS HEREIN:
/S/ Xxxxxxx Xxxxx
-------------------------------- ----------------------------------
Vulcan Consultants Limited
By: Xxxxxxx Xxxxx
Its: Director
Page 11 of 13
NON-WARRANTING MOMENTUM INTERNET INCORPORATED SHAREHOLDER SIGNATURE PAGE for
Acquisition Agreement and Plan of Reorganization between ZiaSun Technologies,
Inc., and the Shareholders of Momentum Internet, Inc.
The undersigned shareholders of Momentum Internet hereby execute this Agreement
solely for the purpose of affirming the following and for no other purpose.
Delivery of Momentum Internet Stock.
-----------------------------------
Each Momentum Internet Shareholder signing hereto hereby agrees to sell,
assign, transfer and deliver and does hereby sell, assign, transfer and deliver
to ZiaSun, and ZiaSun agrees to acquire and accept from each Momentum Internet
Shareholder, upon the terms and conditions set forth in this Agreement,
complete, absolute and unencumbered right, title and interest in and to the
Momentum Internet Shares held by each Momentum Internet Shareholder.
Consideration.
-------------
The entire consideration to be paid to Momentum Internet Shareholders in
exchange for the transfer, assignment and deliver of the Momentum Internet
Shares is the common shares of the authorized but unissued capital stock of
ZiaSun as allocated on Schedule A to each shareholder.
Exchange of Shares.
------------------
At the Closing Date as defined in this Agreement, ZiaSun shall deliver to
the Momentum Internet Shareholders, in accordance with Schedule A, 565,000
shares of the authorized but unissued Common Stock of ZiaSun (the "ZiaSun
Shares"). The exchange of shares contemplated by this Agreement is intended to
result in a tax-free reorganization within the meaning of Section 368(a)(1)(B)
of the Code. The Momentum Internet Shareholders agree to assist ZiaSun in
adopting and filing any documentation necessary to comply with the Code in order
to preserve the tax-free treatment of the within exchange of shares.
Investment Representation.
-------------------------
The Shares being acquired by the Momentum Internet Shareholders hereunder
are being acquired for investment purposes only and not with a view towards
resale or redistribution and no person or entity has any beneficial interest in
such shares except the Momentum Internet Shareholders. The Shares being acquired
have not been registered under the Securities Act of 1933 as amended (the
"Securities Act"), are restricted securities and the Momentum Internet
Shareholders acknowledge and agree that they may not sell, offer, transfer,
hypothecate or convey such shares except pursuant to a registration statement
pursuant to the Securities Act or an exemption therefrom. Such shares shall be
issued with the following legend and shall be subject to a stock transfer order
delivered by the Company to the transfer agent, such legend to be as follows:
Page 12 of 13
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.
NOT APPLICABLE
Dated: _________________________ _____________________________
Signature of Non-Warranting
Momentum Internet Incorporated
Shareholder
Page 13 of 13
SCHEDULE A
LIST OF MOMENTUM INTERNET SHAREHOLDERS
Shareholder Number of Number of
Name and Address Momentum Internet Shares ZiaSun Shares
--------------------------------------------------------------------------------
Vulcan Consultants Limited. 1 565,000
P.O. Box 957
Offshore Incorporation Centre Road
Tortola, British Virgin Islands
--------------------------------------------------------------------------------
Total 1 565,000
EXHIBIT 1.2
INVESTMENT LETTER
--------------------------------------------------------------------------------
Xx. Xxxxxx X. Xxxxxx
ZiaSun Technologies, Inc.
000 X. Xxxxx, #00
Xxxxxx Xxxxx, XX 00000
Re: INVESTMENT LETTER
-----------------
Gentlemen:
The undersigned having acquired by a stock-for-stock exchange a certain
amount of the total 565,000 restricted and unregistered shares of Common Stock,
$0.001 par value per share (the "Securities") of ZiaSun Technologies, Inc., a
Nevada Corporation, (the "Company"), hereby represents to the Company that:
1. The Securities which are being acquired by the undersigned are being
acquired for the undersigned's own account and for investment and not with a
view to the public resale or distribution thereof.
2. The undersigned will not sell, transfer or otherwise dispose of the
Securities unless, in the opinion of the Company's counsel, such disposition
conforms with applicable securities laws requirements.
3. The undersigned is aware that the Securities are "restricted securities"
as that term is defined in Rule 144 (the "Rule") promulgated under the
Securities Act of 1933, as amended (the "Act").
4. The undersigned acknowledges that the undersigned has had an opportunity
to ask questions of and receive answers from duly designated representatives of
the Company concerning the finances of the Company and the proposed business
plan of the Company.
5. The undersigned acknowledges and understands that the Securities are
unregistered and must be held indefinitely unless they are subsequently
registered under the Act or an exemption from such registration is available.
6. The undersigned further acknowledges that the undersigned is fully aware
of the applicable limitations on the resale of the Securities. These
restrictions for the most part are set forth in Rule 144 (the "Rule"). The Rule
permits sales of "restricted securities" upon compliance with the requirements
of such Rule. If and when the Rule is available to the undersigned, the
undersigned may make only sales of the Securities in accordance with the terms
and conditions of the rule (which may limit the amount of Securities that may be
sold).
Investment Letter
Page 2 of 2
--------------------------------------------------------------------------------
7. By reason of the undersigned's knowledge and experience in financial and
business matters in general, and investments in particular, the undersigned is
capable of evaluating the merits and risks of an investment by the undersigned
in the Securities.
8. The undersigned is capable of bearing the economic risks of an
investment in the Securities. The undersigned fully understands the speculative
nature of the Securities and the possibility of loss.
9. The undersigned's present financial condition is such that the
undersigned is under no present or contemplated future need to dispose of any
portion of the Securities to satisfy any existing or contemplated undertaking,
need, or indebtedness.
10. Any and all certificates representing the Securities, and any and all
securities issued in replacement thereof or in exchange therefor, shall bear the
following restrictive legend.
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. THE SHARES HAVE BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION FOR THESE SHARES UNDER SUCH ACT OR AN
OPINION OF THE COMPANY'S COUNSEL THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER SAID ACT.
11. The undersigned further agrees that the Company shall have the right to
issue stop-transfer instructions to its transfer agent until such time as sale
is permitted under Security Laws and acknowledges that the Company has informed
the undersigned of its intention to issue such instructions.
Very truly yours,
----------------------------------
Undersigned
Date: ____________________________
----------------------------------
Address
----------------------------------
Social Security Number
EXHIBIT 2.4
SUBSIDIARIES OF MOMENTUM INTERNET
-------------------------------------------------------------------------------
None
EXHIBIT 2.5
PRESENT OFFICERS AND DIRECTORS MOMENTUM INTERNET
--------------------------------------------------------------------------------
OFFICERS
Not Applicable
DIRECTORS
Xxxxxxx Xxxxx
Xxxxxx Xxxxx
Xxxx Xxxxxx Day
EXHIBIT 2.6
AUDITED FINANCIAL STATEMENTS MOMENTUM INTERNET
--------------------------------------------------------------------------------
TO BE PROVIDED WITHIN SIXTY (60) DAYS OF CLOSING
EXHIBIT 2.8
LIABILITIES OF MOMENTUM INTERNET
--------------------------------------------------------------------------------
NONE
EXHIBIT 2.12
MOMENTUM INTERNET LITIGATION AND LEGAL PROCEEDINGS
--------------------------------------------------------------------------------
NONE
EXHIBIT 2.16
EXCEPTIONS TO GOOD TITLE TO ASSETS OF MOMENTUM INTERNET
--------------------------------------------------------------------------------
NONE
EXHIBIT 2.17
MATERIAL CONTRACTS OF MOMENTUM INTERNET
--------------------------------------------------------------------------------
NONE
EXHIBIT 3.5
SUBSIDIARIES OF ZIASUN
--------------------------------------------------------------------------------
1. Best Way Beverages, Inc., a Nevada Corporation is a wholly
owned subsidiary of ZiaSun Technologies, Inc. Best Way
Beverages, Inc., holds a license from Fountain Fresh
International, Inc., under which Best Way will market , sell
and distribute the Beverage Center Equipment developed by
Fountain Fresh which is used to dispense Fountain Fresh
Beverages and purified water. The Beverage Center Equipment is
a patented in-store, self service, pressure fill, mini
bottling plant/beverage center.
2. Upon the completion of the pending acquisition of Momentum
Asia, Inc., a Corporation formed under the laws of the
Republic of the Philippines. Momentum Asia, Inc. will become a
wholly owned subsidiary of ZiaSun Technologies, Inc. Momentum
Asia, Inc., is, among other things, in printing and
publication design business.
EXHIBIT 3.6
PRESENT OFFICES AND DIRECTORS OF ZIASUN
--------------------------------------------------------------------------------
OFFICERS
--------
CEO and President ....................................... Xxxxxx X. Xxxxxx
Vice President ......................................... Xxxx Xxxxxx
Vice President of Operations ........................... Xxxxx X. Xxxxxxx
Chief Financial Officer ............................. Xxxxxxxx X. XxXxxx
Secretary ........................................... Xxxxxxxx X. XxXxxx
DIRECTORS
---------
Xxxxxx X. Xxxxxx
Xxxx Xxxxxx
Xxxxxxxx X. XxXxxx
EXHIBIT 3.13
EXCEPTIONS TO GOOD TITLE TO ASSETS OF ZIASUN
--------------------------------------------------------------------------------
NONE
EXHIBIT 5.2.3
POST CLOSING OFFICERS AND DIRECTORS
--------------------------------------------------------------------------------
OFFICERS
--------
Not Applicable
DIRECTORS
---------
Xxxxxxx Xxxxx
Xxxxxx Xxxxx
Xxxx Xxxxxx Day
EXHIBIT 8.12
BROKERS
--------------------------------------------------------------------------------
With the exception of the shares issued to the Shareholders of Momentum Internet
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.
