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U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A-1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) March 15, 2000
INVESTAMERICA, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEVADA 0-28303 87-0400797
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(STATE OR OTHER JURISDICTION OF (COMMISSION (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) FILE NUMBER) IDENTIFICATION NO.)
1776 Park Avenue, #4, Park City, Utah 84060
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 435-615-8801
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(Former name or former address, if changed since last report.)
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
On November 22, 1999, the Company entered into an Agreement (the
"Acquisition Agreement") with Optica Communications International Inc.
(f/k/a Oakbay Trading Limited), a British Virgin Islands corporation
("Optica"), and the shareholders of Optica pursuant to which the Company
acquired all of the issued and outstanding stock of Optica (the "Optica
Acquisition"). The shares of Optica were acquired in consideration for
450,000 shares of the Company's Series A Convertible Preferred Stock, par
value $.001 per share (the "Series A Preferred Stock"). The transaction
was consummated on March 15, 2000, but had an effective date as of November
24, 1999. Optica is the sole stockholder of Optica Communications, Inc. a
British Columbia corporation ("Optica Canada"), and Optica Communications,
Inc., a Nevada corporation ("Optica USA"). Optica Canada and Optica USA are
start-up companies that are endeavoring to become a leading supplier of
managed dark fiber and innovative band-with services on a global basis. As
a result of the Optica Acquisition, Optica is a wholly-owned subsidiary of
the Company. As described below, the former stockholders of Optica have
acquired control of the Company through the issuance to them of Series A
Preferred Stock, that is convertible into Common Stock of the Company.
Each share of Series A Preferred Stock is currently convertible into
185 shares of Common Stock. Therefore, an aggregate of 83,250,000 shares
of Common Stock are issuable upon the conversion of all of the Series A
Preferred Stock. In addition, each share of Series A Preferred Stock
currently has 185 votes (an aggregate of 83,250,000 votes for all of the
outstanding Series A Preferred Stock), voting together with the holders
of Common Stock as a single class. Based on the 30,522,703 shares of
Common Stock currently issued and outstanding, the holders of Series A
Preferred Stock would own approximately 73% of the Company's outstanding
Common Stock upon conversion of the Series A Preferred Stock (without
giving effect to any currently outstanding options). Therefore, the
issuance of the Series A Preferred Stock resulted in a change in control
of the Company.
The Company currently has 50,000,000 shares of Common Stock authorized
for issuance of which 30,522,703 shares are issued and outstanding.
Based on the number of shares of Common Stock that are issuable upon
conversion of the Series A Preferred Stock, the Company does not have a
sufficient number of authorized common shares available. The Board of
Directors of the Company has approved an amendment to the Company's
Articles of Incorporation to increase the number of authorized common
shares from 50,000,000 to 200,000,000. Such amendment is subject to
approval by the shareholders of the Company. Therefore, the Company
will call a Special Meeting of Shareholders in the near future to
consider and vote upon the amendment.
On October 21, 1999, in contemplation of entering into the Acquisition
Agreement, Douglas Smith, the President of Optica was named Chairman,
President (CEO) and a director of the Company. Immediately prior to
that time, Brian Kitts was the sole officer and director of the Company
and a principal stockholder (owning 2,012,500 shares of Common Stock -
approximately 21% of the Company's issued and outstanding voting
stock). Brian Kitts resigned as President of the Company and retained
his position as Secretary of the Company. Under the Acquisition Agreement,
the stockholders of Optica were given the right, at any time following the
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closing, to designate up to four directors of the Company for so long as
they collectively own or have the right to acquire at least 50% of the
issued and outstanding shares of Common Stock. The Acquisition Agreement
also provides that Brian Kitts will remain a director for at least one
year from the date of the closing of the transaction. On November 24,
1999, two additional directors, Ernst Gemassmer and Fred F. Fierling,
were named to the Board as designees of the Optica shareholders, although
neither of them is affiliated with any of the Optica shareholders or
directors.
The former stockholders of Optica, who now have voting control of
the Company, are comprised of four corporations, Russells Systems Limited,
Crystsal Marriott S.A., Winjoy Services Centre Limited and Virgil
Securities S.A. Douglas Smith, Chairman and President (CEO) of the
Company, is one of the beneficiaries of a trust that is the sole
stockholder of Virgil Securities S.A.
The following table sets forth stock ownership information as of
March 15, 2000 concerning (i) each director and persons nominated to
become directors of The Company, (ii) each person (including any "group"
as defined in Section 13(d)(3) of the Securities Exchange Act of 1934)
who is known by the Company to beneficially own more than five (5%)
percent of the outstanding shares of the Company's Common Stock and
Series A Preferred Stock, (iii) the Chief Executive Officer and the
other executive officers of the Company, and (iv) The Company's
executive officers and directors as a group. As indicated in footnotes
to the table, pro forma effect is given to the conversion in full of the
Series A Preferred Stock at the rate of 185 shares of Common Stock for
each share of Series A Preferred Stock.
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<TABLE>
<CAPTION>
Amount and
Nature of
Name and Address Position with Beneficial Percentage
of Beneficial Owners the Company Ownership(1) of Class(1)
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<S> <C> <C> <C>
Russells Systems Limited(2)
Suite 61, Grosvenor Close
Shirley Street
Nassau, New Providence,
Bahamas Shareholder 54,040,180 63.9%
Crystsal Marriott S.A.(3)
Suite 61, Grosvenor Close
Shirley Street
Nassau, New Providence,
Bahamas Shareholder 7,604,980 19.9%
Winjoy Services Centre Limited (4)
Suite 61, Grosvenor Close
Shirley Street
Nassau, New Providence,
Bahamas Shareholder 7,604,980 19.9%
Virgil Securities S.A.(5)
Suite 61, Grosvenor Close
Shirley Street
Nassau, New Providence,
Bahamas Shareholder 10,499,860 25.6%
Montreau Investments Ltd.(6)
PO Box 1062
One Capital Place
Georgetown, Grand Caymon
Brisitsh West Indies Shareholder 3,500,000 10.3%
Douglas Smith(7) Chairman,
President
(CEO) and
Director 560,000 1.8%
Brian Kitts(8)
1776 Park Ave. #4
PO Box 770 Secretary
Park City, Utah 84060 Treasurer,
and Director 2,362,500 7.6%
Ernst Gemassmer(9) Director 145,000 0.5%
Fred F. Fierling(10) Director 145,000 0.5%
Daniel Tepper(10)
1350 East Flamingo Road, #52
Las Vegas, Nevada 89119 Shareholder 4,916,250 16.1%
All officers and directors as
a group of 4 persons (12) 3,212,500 10.1%
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(1) A person is deemed to be the beneficial owner of securities that
can be acquired by such person within 60 days from March 15, 2000
upon the exercise of options. Each beneficial owner's percentage
ownership is determined by assuming that options and/or Series A
Preferred Stock that are held by such person (but not those held
by any other person) and which are exercisable or convertible
within 60 days from March 15, 2000 have been exercised or converted,
as the case may be.
(2) Comprised of shares issuable upon conversion of 292,109 shares of
Series A Preferred Stock. Russells Systems Limited is a Bahamas
company whose sole stockholder is a trust.
(3) Comprised of shares issuable upon conversion of 41,108 shares of
Series A Preferred Stock. Crystsal Marriott S.A. is a Bahamas
company whose sole stockholder is a trust.
(4) Comprised of shares issuable upon conversion of 41,108 shares of
Series A Preferred Stock. Winjoy Services Centre Limited is a
Bahamas company whose sole stockholder is a trust.
(5) Comprised of shares issuable upon conversion of 56,756 shares of
Series A Preferred Stock. Virgil Securities S.A. is a Bahamas
company whose sole stockholder is a trust. Douglas Smith is a
beneficiary of the trust but Mr. Smith is not a trustee, does not
have the right to vote the shares or dispose of the shares, or to
terminate the trust. Mr. Smith disclaims beneficial ownership of
the shares. Does not include shares issuable to Mr. Smith upon the
exercise of options disclosed in footnote 6 below.
(6) Comprised of shares issuable upon conversion of 18,919 shares of
Series A Preferred Stock. Montreau Investments Ltd. is a British
West Indies company whose sole stockholder is a trust.
(7) Comprised of shares that Mr. Smith may acquire pursuant to stock
options that are currently exercisable or exercisable within 60
days. Mr. Smith was granted options to purchase an aggregate of
2,800,000 shares, which vest at the rate of 112,000 shares per
month commencing December 24, 1999. Does not include shares owned
by Virgil Securities S.A., beneficial ownership of which is
disclaimed by Mr. Smith. (See footnote 5 above).
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(8) Includes 350,000 shares that Mr. Kitts may acquire pursuant to
stock options that are currently exercisable or exercisable within
60 days. Mr. Kitts was granted options to purchase an aggregate
of 1,750,000 shares, which vest at the rate of 70,000 shares per
month commencing December 24, 1999.
(9) Comprised of shares that Mr. Gemassmer may acquire pursuant to
stock options that are currently exercisable or exercisable within
60 days. Mr. Gemassmer was granted options to purchase an aggregate
of 725,000 shares, which vest at the rate of 29,000 shares per month
commencing December 24, 1999.
(10) Comprised of shares that Mr. Fierling may acquire pursuant to stock
options that are currently exercisable or exercisable within 60 days.
Mr. Fierling was granted options to purchase an aggregate of 725,000
shares, which vest at the rate of 29,000 shares per month commencing
December 24, 1999.
(11) Based solely on information set forth in the Company's records that
has not been verified by Mr. Tepper. Under the terms of a Settlement
Agreement and Release between Mr. Tepper, Mr. Kitts and the Company,
Mr. Tepper is obligated to vote all of his shares for management
nominees to the Company's Board of Directors and on all other matters
in the same proportion as the votes cast by the shareholders of the
Company.
(12) Includes 1,200,000 shares that directors and officers may acquire
pursuant to stock options that are currently exercisable or
exercisable within 60 days. Does not include shares beneficially
owned by Virgil Securities S.A. (See footnote 5 above).
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On March 15, 2000, the Company fully consummated the acquisition of Optica
in accordance with the Acquisition Agreement described in Item 1 above. The
Company acquired all of the issued and outstanding shares of Optica in
consideration for 450,000 shares of the Company's Series A Preferred Stock.
The Series A Preferred Stock is convertible into an aggregate of 83,250,000
shares of Common Stock. The transaction was consummated on March 15, 2000,
but had an effective date as of November 24, 1999. See Item 1 above for
additional information regarding the transaction.
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ITEM 7. FINANCIAL STATEMENTS, PRO-FORMS FINANCIAL INFORMATION AND EXHIBITS.
A. Financial Statements. The following financial statements will
Be filed as soon as they are available and in any event no later
than sixty (60) days after the date on which this Current Report on
Form 8-K is required to be filed:
(1) The Consolidated Financial Statements of Optica for the fiscal year
ended September 30, 1999.
(2) The Consolidated Financial Statements of Optica for the three months
ended December 31, 1999.
(b) Pro-Forma Financial Information. The unaudited pro forma combined
condensed statements of operations of the Company for the fiscal
year ended September 30,1999 and the unaudited pro forma combined
condensed balance sheet of the Company as at December 31, 1999
will be filed as soon as they are available and in any event no
later than sixty (60) days after the date on which this Current
Report on Form 8-K is required to be filed.
(c) The following exhibit is filed herewith:
(1) Agreement dated as of November 22, 1999 among the Company, Optica and
the shareholders of Optica.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INVESTAMERICA, INC.
By: /s/ Douglas Smith
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Douglas Smith, President
Dated: April 13, 2000
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</TABLE>
EXHIBIT 10.3
AGREEMENT (the "Agreement") dated as of November 22, 1999 by and among
INVESTAMERICA, INC., a Nevada corporation ("INVT"), OAKBAY TRADING LIMITED
(a BVI corporation to be re-named Optica Communications Group Inc., and
which shall hereinafter be referred to as "Optica"), and the shareholders
of Optica (collectively referred to herein as the "Optica Shareholders")
WHEREAS The Board of Directors of INVT and the Board of Directors of Optica
and the Optica Shareholders, respectively, deem it advisable and in the best
interests of INVT and Optica, and their respective shareholders that INVT
acquire Optica in exchange for a controlling interest in INVT upon the terms
and subject to the conditions of this Agreement.
Accordingly, the parties hereto hereby agree as follows:
1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms have
the following meanings:
(a) "Agreement": this Agreement, as amended, supplemented or otherwise
modified from time to time.
(b) "Capital Stock": any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, and
any and all equivalent ownership interests in a partnership or other
Person (other than a corporation).
(c) "Closing": has the meaning set forth in Section 2.1.
(d) "Contractual Obligation": as to any Person, any provision of any
agreement, instrument or other undertaking to which such Person is a
party or by which it or any of its property is bound.
(e) "Convertible Securities": options, warrants, subscriptions or other
commitments or rights of any nature to purchase, or securities
convertible into or exchangeable for, Capital Stock.
(f) "Exchange Act": the Securities Exchange Act of 1934, as amended from
time to time, and the regulations and rulings issued thereunder.
(g) "Governmental Authority": any nation or government, any state or other
political subdivision thereof and any federal, state, county, local or
foreign entity or body exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.
(h) "INVT Common Shares": shares of voting Common Stock, par value $.001 per
share, of INVT.
(i) "INVT Preferred Shares": 450,000 shares of Preferred Stock, par value
$.001 per share, of INVT, to be issued on Closing, each having attached
thereto the right of conversion into 185 INVT Common Shares.
(j) "Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), or preference,
priority or other security interest or agreement or preferential
arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of
the foregoing, and the filing of any financial statement under the
Uniform Commercial Code or comparable law of any jurisdiction in respect
of any of the foregoing).
(k) "Optica Common Shares": shares of voting Common Stock without par value
of Optica.
(l) "Person": an individual, partnership, corporation, business trust, joint
stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
(m) "Requirement of Law": as to any Person, any law, treaty, rule or
regulation or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its
property is subject.
(n) "SEC": the Securities and Exchange Commission.
(o) "Securities Act": the Securities Act of 1933, as amended, and the rules
and regulations thereunder.
1.2 Other Definitional Provisions; Interpretation.
(a) Unless otherwise specified therein, all terms defined in this Agreement
shall have the defined meanings when used in any certificate or other
agreement, instrument or document made or delivered pursuant hereto.
(b) The words "hereof", "herein" and "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section and
Schedule references are to this Agreement unless otherwise specified.
(c) The headings in this Agreement are included for conveniences of
reference only and shall not in any way affect the meaning or
interpretation of this Agreement.
(d) The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.
2. THE ACQUISITION
2.1 Closing. The acquisition described herein shall be consummated at a
closing (the Closing) to take place at the Offices of INVT or at such other
place as may be agreed by the parties. The Closing shall take place on
November 22, 1999 or as soon as practicable thereafter.
2.2 Transfer of Optica Common Shares. Subject to the terms and conditions
of this Agreement, at the Closing the Optica Shareholders will transfer all of
the issued and outstanding Optica Common Shares (being 45,000 Common Shares)
to INVT in exchange for 450,000 INVT Preferred Shares such that each Optica
Shareholder shall receive 10 INVT Preferred Shares for each Optica Common
Share held by it.
3. CONVERSION OF INVT PREFERRED SHARES INTO INVT COMMON SHARES
3.1 Conversion Right. On Closing, each INVT Preferred Share shall be
convertible into 185 INVT Common Shares.
3.2 Procedure for Exercise of Conversion Right. The Conversion Right
shall be exercisable at any time following Closing and may be exercised
in respect of all or part of the INVT Preferred Shares. The holder of
INVT Preferred Shares wishing to exercise its Conversion Right shall
deliver to INVT written notice of such exercise indicating the number
of INVT Preferred Shares that it wishes to convert, together with stock
certificates, duly endorsed, representing such INVT Preferred Shares.
Upon delivery of such notice and surrender of such stock certificate,
new stock certificates representing INVT Common Shares shall be issued
to the holder within ten (10) days.
3.3 No Fractional Shares. No certificates or scrip for fractional INVT
Common Shares will be issued pursuant to the Conversion Right. Fractional
INVT Common Shares that would otherwise be issuable shall be rounded upward or
downward to the nearest whole share (with fractions of .5 or higher being
rounded upward).
3.4 Adjustments Upon Changes in Capitalization. Subject and pursuant to the
provisions of this Section 3.4, the number of INVT Common Shares subject
to the Conversion Right shall be subject to adjustment from time to time
as set forth hereinafter:
3.4.1 If INVT shall at any time subdivide its outstanding shares of Stock by
recapitalization, reclassification or split-up thereof, or if INVT shall
declare a stock dividend or distribute INVT Common Shares to its
shareholders, the number of INVT Common Shares subject to the Conversion
Right immediately prior to such subdivision, stock dividend or
distribution shall be proportionately increased, and if INVT shall at
any time combine the outstanding INVT Common Shares by recapitalization,
reclassification or combination thereof, the number of INVT Common
Shares subject to the Conversion Right immediately prior to such
combination shall be proportionately decreased. Any such adjustment
pursuant to this Section 3.4 shall be effective at the close of business
on the effective date of such subdivision of combination or, in the case
of any adjustment which is the result of a stock dividend or
distribution, the effective date for such adjustment shall be the record
date therefor.
3.4.2 In case of any reclassification of the outstanding shares of Stock,
other than a change covered by Section 3.4.1 hereof or which solely affects
the par value of INVT Common Shares, or in the case of any merger or
consolidation of INVT with or into another company (other than a merger or
consolidation in which INVT is the continuing company and which does not
result in any reclassification or capital reorganization of the outstanding
INVT Common Shares), or in the case of any sale or conveyance to another
company of the property of INVT as an entirety or substantially as an entirety
in connection with which INVT is dissolved, the holders of INVT Preferred
Shares shall have the right thereafter to receive upon the exercise of the
Conversion Right, for the same INVT Preferred Shares deliverable hereunder
immediately prior to such event, the kind and amount of shares of Capital
Stock or other property receivable upon such reclassification, capital
reorganization, merger or consolidation, or upon the dissolution following any
sale or other transfer, by a holder of the number of INVT Common Shares
obtainable upon exercise of the Conversion Right immediately prior to such
event; and if any reclassification also results in a change in INVT Common
Shares covered by Section 3.4.1, then such adjustment shall be made pursuant
to both Section 3.4.1 and this Section 3.4.2. The provisions of this Section
3.4 shall similarly apply to any successive reclassification, capital
reorganization, merger, consolidation, sale or other similar transaction.
4. REPRESENTATIONS AND WARRANTIES OF OPTICA
Optica and the Optica Shareholders hereby represent and warrant to INVT
that, except as disclosed on any Schedule:
4.1 Organization of Optica. Optica is a corporation duly organized, validly
existing and in good standing under the laws of BVI and has the corporate
power and lawful authority to own, lease and operate its assets, properties
and business and to carry on its businesses in all material respects as now
being conducted.
4.2 Authority. Optica and the Optica Shareholders have all requisite power
and authority to execute, deliver and perform this Agreement and Optica has
taken all necessary corporate action to authorize the execution, delivery and
performance by it of this Agreement and to consummate the transactions
contemplated by this Agreement. This Agreement (i) has been duly executed and
delivered by Optica and the Optica Shareholders, and (ii) constitutes legal,
valid and binding obligations of Optica and the Optica Shareholders
enforceable against Optica and the Optica Shareholders in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally or by principles governing the availability of equitable
remedies.
4.3 Capitalization. Optica's authorized Capital Stock consists of
50,000,000 Optica Common Shares, of which 45,000 are issued and outstanding as
of the date of this Agreement. Prior to Closing, no additional shares of
Optica Capital Stock or Convertible Securities to acquire Optica Capital Stock
may be issued. No other class of Capital Stock of Optica is authorized or
outstanding. All of the issued and outstanding Optica Common Shares are duly
authorized and are legally and validly issued, fully paid and nonassessable.
4.4 Optica Convertible Securities. There are no outstanding Convertible
Securities to acquire any Capital Stock of Optica from Optica or from any of
the Optica Shareholders, except pursuant to the Conversion Right contemplated
by this Agreement. No shares of Capital Stock of Optica are reserved or set
aside as treasury shares for any purpose and no shareholder of Optica has
preemptive rights. There are no voting trusts or other agreements or
understanding with respect to the voting of shares of any class of Capital
Stock of Optica.
4.5 Subsidiaries. Optica Communications Inc., a British Columbia
corporation, is a wholly owned subsidiary of Optica. Optica has no other
subsidiaries and Optica is not a party to any partnership or joint venture
agreement or arrangement or owns any equity interest in any other corporation,
partnership or other entity.
4.6 Charter Documents. Optica has made available to INVT true, correct and
complete copies of the corporate charter documents of Optica and its
subsidiary, Optica Communications Inc., and all amendments thereto as of the
date hereof (collectively the "Optica Charter Documents").
4.7 No Conflicts. Neither the execution and delivery of this Agreement, nor
the consummation of any of the transactions contemplated hereby, conflict with
or will conflict with or has resulted or will result in the breach of or
violation of any of the terms or conditions of, or constitute (or, with notice
or lapse of time or both, would constitute) a default or result in the
acceleration of any material obligation of Optica under: (i) any Optica
Charter Documents; or (ii) any Requirement of Law or Contractual Obligation of
Optica and will not result in, or require, the creation of imposition of any
Lien on any of its assets, properties or revenues pursuant to any such
Requirement of Law or Contractual Obligation.
4.8 Permits. Optica has all licenses, permits, orders, authorizations,
notifications and approvals of any Governmental Authority material to the
conduct of its business as presently conducted.
4.9 No Consents. No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Authority or any
other Person is required in connection with the execution, delivery or
performance of this Agreement by Optica and the consummation by Optica of any
of the transactions contemplated hereby.
4.10 Litigation. Optica is not a party to, nor, to its knowledge, threatened
with, any litigation or judicial, administrative or arbitration proceeding or
investigation. There is no dispute with any Person under contract with Optica
which has a material adverse effect on Optica, or is reasonably likely to have
a material adverse effect on Optica.
4.11 Liabilities. As at the date of this Agreement, Optica did not have any
material direct or indirect indebtedness or liabilities accrued, absolute, or
contingent (and likely of occurring) or otherwise, whether or not of a kind
required by United States Generally Accepted Accounting Principles to be set
forth, accrued, reserved for or reflected in a financial statement ("Optica
Liabilities"), except Optica Liabilities incurred in the ordinary course of
business or in connection with this Agreement.
4.12 Employee Benefit Plans. There are no written or oral pension, profit
sharing, retirement, deferred compensation, stock purchase, stock option,
incentive compensation, bonus, vacation, severance, sickness or disability,
hospitalization, individual and group health and accident insurance,
individual and group life insurance or other material employee benefit plans,
programs, commitments or funding arrangements maintained by Optica, to which
Optica is a party, or under which Optica has any obligations, present or
future.
4.13 Potential Conflicts of Interest. No officer, director or shareholder of
Optica: (i) owns, directly or indirectly, any interest in (excepting not
more than 5% stock holdings for investment purposes in securities of publicly
held and traded companies) or is an officer, director, employee or consultant
of any entity which is a competitor, lessor, lessee, customer or supplier of
Optica; (ii) has any interest, direct or indirect, in any material property or
assets of Optica (except in his capacity as a shareholder of Optica); (iii)
owns directly or indirectly, in whole or in part, any material copyright,
trademark, trade name, service mark, franchise, patent, invention, permit,
license, secret or confidential information of the nature requiring a license
for use by Optica which Optica is using or the use of which is necessary for
the business of Optica; or
iv) has any material cause of action or other claim whatsoever against, or
owes any material amount to, Optica.
4.14 Opportunity to Investigate. Each of the Optica Shareholders and Optica
(i) has had an opportunity to ask questions concerning INVT and all such
questions posed have been answered to its satisfaction; (ii) has been given an
opportunity to obtain any additional information it deems necessary to verify
the accuracy of any information obtained concerning INVT; and (iii) has such
knowledge and experience in financial and business matters that it is able to
evaluate the merits and risks of entering into this Agreement and consummating
the transactions contemplated herein.
4.15 Accredited Investor. Each of the Optica Shareholders is an "accredited
investor" as such term is defined in Regulation D under the Securities Act.
4.16 Investment Intent. Each of the Optica Shareholders who exercises the
Conversion Right will acquire the INVT Common Shares thereunder for its own
account for the purpose of investment and not with a view to, or for sale in
connection with, the distribution thereof, and it will not acquire the INVT
Common Shares with the intention of distributing or selling such shares. The
Optica Shareholders understand that the INVT Common Shares have not been
registered under the Securities Act, or the securities laws of any state or
other jurisdiction, and hereby agrees not to make any sale, transfer or other
dispositions off such INVT Common Shares unless either (i) such INVT Common
Shares have been registered under the Securities Act and all applicable state
and other securities laws and any such registration remains in effect or (ii)
registration is not required under the Securities Act or applicable state
securities laws with respect to such sale, transfer or other disposition.
4.17 Full Disclosure. None of the information supplied or to be supplied by
Optica for inclusion in the documents to be prepared in connection with the
transactions contemplated by this Agreement including, without limitation, (i)
documents to be filed with the SEC, including the Registration Statement and
(ii) filings pursuant to any Sate securities and blue sky laws, will, in the
case of the Registration Statement (as defined in Section 6.6) at the time of
the mailing thereof, and in the case of other documents at the time such
documents are filed with any federal or state regulatory authority, contain or
will contain any untrue statements of a material fact or omit to state any
material fact necessary in order to make the statements therein not misleading
(or, in the case of the Registration Statement, in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading).
5. REPRESENTATIONS AND WARRANTIES OF INVT.
INVT hereby represents and warrants to Optica and the Optica Shareholders
that, except as disclosed on any Schedule:
5.1 Organization of INVT. INVT is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada and has
the corporate power and lawful authority to own, lease and operate its asset,
properties and business and to carry on its business in all material respects
as now conducted. INVT is publicly trading on the NASD-OTCBB Exchange under
the symbol INVT.
5.2 Authority. INVT has all requisite corporate power and authority to
execute, deliver and perform this Agreement, and has taken all necessary
corporate action to authorize the execution, delivery and performance by it of
this Agreement, and to consummate the transactions contemplated by this
Agreement. This Agreement has been executed and delivered by INVT and
constitutes legal, valid and binding obligations of INVT, enforceable against
INVT in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally or by principles governing
the availability of equitable remedies.
5.3 Capitalization. On the date hereof, INVT's authorized Capital Stock
consists of 50,000,000 INVT Common Shares, of which 17,480,000 shares are
issued and outstanding as of the date hereof and 5,000,000 shares of
Preferred Stock, par value $.001 per share, none of which is outstanding. On
Closing the number of issued and outstanding INVT Common Shares will not
exceed 20,480,000. INVT has no treasury shares outstanding. No other class
of Capital Stock of INVT is authorized or outstanding. All of the issued and
outstanding INVT Common Shares are duly authorized and are legally and
validly issued, fully paid and non-assessable. The INVT Preferred Shares and
the INVT Common Shares issued puursuant to the Conversion Right will be
validly issued, fully paid, non-assessable shares free and clear of all Liens.
5.4 INVT Convertible Securities. There are no outstanding Convertible
Securities to acquire any Capital Stock of INVT from INVT or, to INVT's
knowledge, from any of the shareholders of INVT except pursuant to the
Conversion Right contemplated by this Agreement; (b) no shares of Capital
Stock of INVT are reserved or set aside as treasury shares for any purpose and
no shareholder of INVT has preemptive rights; and (c) there are no voting
trusts or other agreements or understanding of which INVT has knowledge with
respect to the voting of shares of any class of Capital Stock of INVT.
5.5 Subsidiaries. INVT has no subsidiaries and INVT is not a party to any
partnership or joint venture agreement or arrangement or owns any equity
interest in any other corporation, partnership or other entity.
5.6 Charter Documents. INVT has made available to Optica and the Optica
Shareholders true, correct and complete copies of the Articles of
Incorporation, by-laws, and all amendments thereto as of the date hereof.
5.7 No Conflicts. Neither the execution and delivery of this Agreement, nor
the consummation of any of the transactions contemplated hereby, nor the
issuance or delivery of the INVT Common Shares by INVT in the Conversion Right
pursuant to this Agreement conflict with or will conflict with or has resulted
or will result in the breach of or violation of any of the terms or conditions
of, or constitute (or, with notice or lapse of time or both, would constitute)
a default or result in the acceleration of any material obligation of INVT
under: (i) the articles of incorporation or by-laws of INVT; or (ii) any
Requirement of Law or Contractual Obligation of INVT and will not result in,
or require, the creation of imposition of any Lien on any of its assets,
properties or revenues pursuant to any such Requirement of Law or Contractual
Obligation.
5.8 Permits. INVT has all licenses, permits, orders, authorizations,
notifications and approvals of any Governmental Authority material to the
conduct of its business as presently conducted.
5.9 No Consents. Except for applicable requirements of the Nevada corporate
laws, the Securities Act, the Exchange Act, NASD and state securities or blue
sky laws, no consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Authority or any other Person is
required in connection with the execution, delivery or performance of this
Agreement by INVT, the consummation by INVT of any of the transactions
contemplated hereby or thereby or the issuance or delivery of INVT Common
Shares under the Conversion Right pursuant to this Agreement.
5.10 Litigation. INVT is not a party to, or to its knowledge, threatened
with, any material litigation or judicial, administrative or arbitration
proceeding or investigation. There is no dispute with any Person under
contract with INVT which has a material adverse effect on INVT, or is
reasonably likely to have a material adverse effect on INVT.
5.11 Liabilities. As at the date of this Agreement, INVT did not have any
material direct or indirect indebtedness or liabilities accrued, absolute, or
contingent (and likely of occurring) or otherwise, whether or not of a kind
required by United States Generally Accepted Accounting Principals to be set
forth, accrued, reserved for or reflected in a financial statement ("INVT
Liabilities"), except INVT Liabilities incurred in the ordinary course of
business or in connection with this Agreement.
5.12 Employee Benefit Plans. There are no written or oral pension, profit
sharing, retirement, deferred compensation, stock purchase, stock option,
incentive compensation, bonus, vacation, severance, sickness or disability,
hospitalization, individual and group health and accident insurance,
individual and group life insurance or other material employee benefit plans,
programs, commitments or funding arrangements maintained by INVT, to which
INVT is a party, or under which INVT has any obligations, present or future.
5.13 Opportunity to Investigate. Subject to its continuing right of due
diligence investigation of Optica, INVT (i) has had an opportunity to ask
questions concerning Optica and all such questions posed have been answered to
its satisfaction; (ii) has been given an opportunity to obtain any additional
information it deems necessary to verify the accuracy of any information
obtained concerning Optica; and (iii) has such knowledge and experience in
financial and business matters that it is able to evaluate the merits and
risks of entering into this Agreement and consummating the trans-actions
contemplated herein.
5.14 Investment Intent. INVT is acquiring the Optica Common Shares at the
Closing for its own account for the purpose of investment and not with a view
to, or for sale in connection with, the distribution thereof, and it has no
present intention of distributing or selling such Optica Common Shares. INVT
understands that the Optica Common Shares have not been registered under the
Securities Act, or the securities laws of any state or other jurisdiction, and
hereby agrees not to make any sale, transfer or other disposition of such
Optica Common Shares unless either (i) such Optica Common Shares have been
registered under the Securities Act and all applicable state and other
securities laws and any such registration remains in effect or (ii)
registration is not required under the Securities Act or applicable state
securities laws with respect to such sale, transfer or other disposition.
5.15 Full Disclosure. None of the information supplied or to be supplied by
INVT for inclusion in the documents to be prepared in connection with the
transactions contemplated by this Agreement including, without limitation, (i)
documents to be filed with the SEC, including the Registration Statement, (ii)
filings pursuant to any State securities and blue sky laws, will, in the case
of the Registration Statement at the time of the mailing thereof, and in the
case of other documents at the time such documents are filed with any federal
or state regulatory authority, contain or will contain any untrue statements
of a material fact or omit to state any material fact necessary in order to
make the statements thereon not misleading (or, in the case of the
Registration Statement, in order to make the statements therein, in light of
the circumstances under which they were made, not misleading).
6. COVENANTS AND AGREEMENTS
The parties covenant and agree as follows:
6.1 Directors of INVT. At any time following the Closing, upon written
notice to INVT, the Optica Shareholders, so long as they collectively are
beneficial owners of at least fifty percent (50%) of the issued and
Outstanding INVT Common Shares, or have the right collectively pursuant to the
Conversion Right to acquire at least such amount, shall have the right to
designate up to four directors of INVT. Upon receipt of such notice, INVT
shall take any and all steps required to cause such designees to be nominated
for election.
6.2 Brian Kitts. Following Closing, Brian Kitts shall remain a director for
at least one year from the date of Closing and each of the Optica
Shareholders, to the extent it owns INVT Common Shares agrees to vote such
shares in favour of Brian Kitts as a director during the said one-year period.
6.3 Officers of INVT. Following the Closing, INVT's President and CEO shall
be Douglas Smith and its Treasurer and Secretary shall be Brian Kitts.
6.4 Corporate Examination and Investigations. INVT shall continue to afford
to the Optica Shareholders, directly or through representatives, the
opportunity to make such reasonable investigation of the property and plant of
INVT as are reasonable and appropriate for them to make a decision with
respect to exercising the Conversion Right. In order that the Optica
Shareholders may have full opportunity to make such business, accounting,
regulatory and legal review, examination or investigation, INVT shall furnish
the Optica Shareholders until such time that the Conversion Right is exercised
in full, all such information as the Optica Shareholders may reasonably
request and cause its officers, employees, consultants, accountants and
attorneys to cooperate fully with them in connection with such review and
examination and to make full disclosure of all material facts affecting such
party's financial condition, regulatory affairs and business operations.
6.5 Cooperation in Preparing SEC Reports and Filings. The parties agree
that they and each of them will assist and cooperate fully with each other
in the prompt preparation and filing of any applications, approvals,
consents or similar documents necessary or advisable in connection with the
transactions contemplated hereunder or under any qualifications under state
securities laws, which are required for the proper and effective consummation
of the transactions provided for in this Agreement and for the future business
operations of INVT and Optica. The Optica Shareholders hall also provide such
assistance and cooperation with respect to the preparation and filing by INVT
of all other proxy statements, reports and filings that are required by a
reporting company under the Exchange Act.
6.7 Registration Statement. As soon as practicable after execution of
this Agreement, INVT shall file with the SEC a registration statement on
Form 10 (the "Registration Statement") to register the Common Stock of INVT.
The parties hereto agree to fully cooperate in connection with the
preparation and filing of the Registration Statement. Without limiting the
generality of the foregoing, each of Optica, INVT and the Optica Shareholders
agrees to furnish, and to cause its independent public accountants and
attorneys to furnish, INVT's and Optica's counsel and accountants, as the
case may be, promptly with such information as they may reasonably request
in order to complete the preparation and filing of the Registration Statement,
and any amendments thereto.
6.7 Further Registrations. INVT shall file in a timely manner all such
Registration Statements as may be necessary to register the Common Stock of
INVT acquired pursuant to the Conversion Right.
6.8 Issuance of Capital Stock. Neither Optica nor INVT shall issue, commit
to issue, redeem or purchase, or amend the terms of, any of its Capital Stock
or Convertible Securities after the date hereof and prior to the Closing,
except that INVT may issue such additional INVT Common Shares as will increase
the total issued and outstanding INVT Common Shares on Closing to not more
than 20,480,000.
6.9 Financing of Start-Up Costs. INVT will undertake to maintain at least
$250,000 to finance the start-up costs of Optica (less any amounts previously
advanced).
6.10 Implementation of Business Plan. Upon receipt of the financing referred
to in Section 6.9, Optica will undertake fo develop and implement the business
described in its business plan dated April 15, 1999.
6.11 Further Assurances. Each of the parties shall execute such documents
and other papers and take such further action as may be reasonably required or
desirable to carry out the provisions of this Agreement and the transactions
contemplated hereby. Each party shall use its best efforts to fulfill or
obtain the fulfillment of the conditions to the Closing.
7. MISCELLANEOUS
7.1 Broker. Each of the parties represents and warrants to the other that
no broker, finder or other financial consultant has acted on their or its
behalf in connection with the negotiation and execution of this Agreement.
Each such party agrees to indemnify and save the other harmless from any claim
or demand for commission or other compensation by any broker, finder,
financial consultant or similar agent not so disclosed claiming to have been
employed by or on behalf of such party, and to bear the cost of legal expenses
incurred in defending against any such claim.
7.2 Schedules and Exhibits. The Schedules and Exhibits to this Agreement
are part of this Agreement as if set forth in full herein.
7.3 Notices. Any notice or other communication required or which may be
given hereunder shall be in writing and shall be delivered personally,
telegraphed or telecopied, or sent overnight delivery by FedEx or UPS or sent
by certified or registered mail, postage prepaid, and shall be deemed given
when so delivered personally telegraphed or telecopied or if sent by FedEx or
UPS, one business day after the date of mailing, or if sent by certified or
registered mail, four business days after the date of mailing, as follows (or
to such other address as any party may from time to time specify in writing
pursuant to the notice provisions hereof):
(i) if to Optica to:
Euro-American Building , R.G. Hodge Plaza, 3rd floor, Wickhams Cay 1,
Road Town, Tortola, British Virgin Islands
(ii) if to the Optica Shareholders, to:
Suite 61, Grosvenor Close, Shirley Street, PO Box N7521, Nassau, New
Providence, Bahamas
(iii) if to INVT, to:
1776 Park Avenue, Unit 4, Park City, Utah 84060
7.4 Entire Agreement. This Agreement (including all Schedules and Exhibits
hereto and all agreements or covenants contained therein) contains the entire
agreement among the Parties with respect to the Acquisition contemplated under
Section 2 and the Conversion Right contemplated under Section 3, and all
transactions related thereto, and supersedes all prior agreements or
understandings, written or oral, with respect thereto.
7.5 Waivers and Amendments. This Agreement may be amended, modified,
superseded, cancelled, renewed or extended, and the terms and conditions
hereof may be waived, only by a written instrument signed by the Parties or,
in the case of a waiver, signed by the party waiving compliance. No delay on
the part of any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any waiver on the part of any
party of any right, power or privilege hereunder, nor any single or partial
exercise of any right, power or privilege hereunder, preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege hereunder. The rights and remedies herein provided are cumulative
and are not exclusive or any rights or remedies that any party may otherwise
have at law or in equity.
7.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada, without giving effect to the
choice of law principles thereof.
7.7 No Assignment. This Agreement is not assignable except by operation of
law.
7.8 Variations in Pronouns. All pronouns and any variations thereof refer
to the masculine, feminine or neither singular or plural, as the identity of
the person or persons may require.
7.9 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed and original but all of which
together shall constitute one and the same instrument.
7.10 Severability. If any one or more of the provisions of this Agreement is
held invalid, illegal or unenforceable, the remaining provisions of this
Agreement shall be unimpaired, and the invalid, illegal or unenforceable
provision shall be replaced by a mutually acceptable valid, legal and
enforceable provision which comes closest to the intent of the parties.
7.11 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and legal
representatives and permitted assigns.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officers of the corporate parties hereto on the date
first above written.
INVESTAMERICA, INC. OPTICA SHAREHOLDERS:
RUSSELLS SYSTEMS LIMITED
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By: Brian Kitts, President
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By:
OAKBAY TRADING LIMITED
CRYSTSAL MARRIOTT S.A.
- ----------------------------------- ------------------------------
By: By:
WINJOY SERVICES CENTRE LIMITED
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By:
VIRGIL SECURITIES S.A.
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By:
