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U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) July 18, 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 2. Acquisition or Disposition of Assets.
On July 7, 2000, the Company consummated the acquisition of Zed
Data Systems Corp. ("Zed") pursuant to the terms of (i) a Share Exchange
Agreement (the "Exchange Agreement") among the Company, Zed and one shareholder
of Zed and (ii) a Share Purchase Agreement (the "Purchase Agreement") with
among the Company, Zed and the remaining shareholders of Zed. All of the
issued and outstanding shares of Zed were owned directly or indirectly by
Douglas Smith, President and a director of the Company. Mr. Smith is also the
President and a founder of Zed.
Under the terms of the Exchange Agreement, Smith Shelf Company
Limited, a corporation solely owned by Mr. Smith, the holder of approximately
23% of the issued and outstanding shares of Zed Common Stock, exchanged its Zed
shares for 50,000 Preferred Shares of Zed. The Zed Preferred Shares are
exchangeable for an aggregate of 50,000 shares of Series B Preferred Stock of
the Company ("Series B Preferred"). Each share of Series B Preferred, upon
issuance, will be convertible into 300 shares of Common Stock of the Company.
Therefore, an aggregate of 15,000,000 shares of Common Stock will be issuable
upon the conversion of all of the Series B Preferred Stock. In addition, each
share of Series B Preferred Stock will have 300 votes (an aggregate of
15,000,000 votes for all of the outstanding Series B Preferred Stock), voting
together with the holders of Common Stock and Series A Preferred Stock of the
Company as a single class. Based upon the 31,168,857 shares of Common Stock
currently issued and outstanding, and giving effect to the conversion of all of
the Company's outstanding Series A Preferred Stock into 83,250,000 shares of
Common Stock, the holders of Series B Preferred Stock would own approximately
11.6% of the Company's outstanding Common Stock upon conversion of the Series B
Preferred Stock (without giving effect to any currently outstanding options and
warrants of the Company).
The Company currently has 50,000,000 shares of Common Stock authorized
for issuance of which 31,168,857 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 and Series B 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 intends to call a Special
Meeting of Shareholders to consider and vote upon the amendment.
Under the terms of the Purchase Agreement, the Company acquired all of
the remaining issued and outstanding shares of Zed in consideration for a
$5,000,000 promissory note of the Company. The note bears interest at the rate
of 12% per annum and is payable in 6 equal monthly installments of $715,000
commencing July 31, 2000 followed by one final installment of $710,000 on
January 31, 2001. The note is secured by a pledge of the shares of Zed Common
Stock acquired by the Company and a security interest in all of the assets of
the Company.
The Company intends to use proceeds from a private offering of equity
or debt to pay the note.
Item 7. Financial Statements, Pro-Forma Financial Information and Exhibits.
(a) Financial Statements of Business Acquired. 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:
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(1) The Consolidated Financial Statements of Zed for the fiscal years
ended June 30, 2000 (ten months) and August 30, 1999 (twelve months).
(b) Pro-Forma Financial Information. The unaudited pro forma combined
condensed statements of operations of the Company and Zed for the fiscal year
ended September 30,1999 and the unaudited pro forma combined condensed balance
sheet of the Company as at June 30, 2000 and June 30, 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) Exhibits. The following exhibits are filed herewith:
(1) Share Exchange Agreement dated as of July 5, 2000 among the
Company, Zed and Smith Shelf Company Limited.
(2) Share Purchase Agreement dated as of July 5, 2000 among the
Company, Zed and the shareholders of Zed named therein.
(3) Form of Promissory Note of the Company.
(4) Certificate of Designation of Series B Preferred Stock of the
Company.
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: July 20, 2000
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EXHIBIT 1
SHARE EXCHANGE AGREEMENT
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THIS dated for reference 5th day of July, 2000.
AMONG:
INVESTAMERICA INC., 1776 Park Avenue, Unit 4, Park City, Utah
(herein called the "Purchaser")
AND:
ZED DATA SYSTEMS CORP., Suite 148 - 4664 Lougheed Highway, Burnaby, British
Columbia, Canada, V5C 5T5
(herein "Company")
AND:
SMITH SHELF COMPANY LIMITED
(herein "Vendor")
A. The Vendor is the registered and beneficial owner of 153 common shares in
the capital of the Company (the "Vendor's Shares");
B. Class "D" Preference Shares (the "Preferred Shares") have been created in
the capital of the Company for issuance to the Vendor as consideration for the
exchange of the Vendor's Shares in the course of a reorganization of the
capital of the Company as contemplated by section 86(1) of the Income Tax Act
(Canada);
C. Upon the terms and subject to the conditions set forth in this Agreement,
the Vendor has agreed to exchange the Vendor's Shares for Preferred Shares of
the Company;
THEREFORE in consideration of the premises and of the mutual covenants and
agreements herein set forth, the parties hereto covenant and agree each with
the other as follows:
1. INTERPRETATION
1.1 In this Agreement, except as otherwise expressly provided:
(a) "Agreement" means this share purchase agreement, including the preamble and
the Schedules hereto, as it may from time to time be supplemented or amended
and in effect;
(b) all references in this Agreement to a designated "Section" or other
subdivision or to a Schedule is to the designated Section or other subdivision
of, or Schedule to, this Agreement;
(c) the words "herein", "hereof" and "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular Section or
other subdivision or Schedule;
(d) the headings are for convenience only and do not form a part of this
Agreement and are not intended to interpret, define, or limit the scope, extent
or intent of this Agreement or any provision hereof;
(e) the singular of any term includes the plural, and vice versa; the use of
any term is equally applicable to any gender and, where applicable, a body
corporate; the word "or" is not exclusive; the word "including" means including
without limitation or prejudice to the generality of any description,
definition, term or phrase preceding that word, and the word "include" and its
derivatives will be construed accordingly; the expression "to the knowledge of"
or any similar expression as applied to a corporation or individual, refers to,
(A) in the case of an individual, the knowledge as at the relevant date that
such individual had or would have had had he exercised due diligence in making
enquiries in relation to the matter in question from all sources of information
likely to provide him with knowledge of same, and (B) in the case of a
corporate person, the knowledge (as aforementioned) of a director or officer
thereof as at the relevant date;
(f) any accounting term not otherwise defined has the meanings assigned to it
in accordance with generally accepted accounting principles applicable in the
United States;
(g) except as otherwise provided, any dollar amount referred to in this
Agreement means the lawful currency of the United States;
(h) any other term defined within the text of this Agreement has the meaning so
ascribed.
1.2 Upon and subject to the terms and conditions of this Agreement, the Company
and the Vendor agree to exchange the Vendor's Shares for 50,000 Preferred
Shares as at the Closing Date.
2. RESTRICTED SECURITIES
2.1 The Vendor acknowledges that neither the Preferred Shares nor any shares of
the Purchaser issued on exchange of the Preferred Shares in accordance with
their terms (the "Purchaser's Shares") may be sold, transferred or otherwise
disposed of without registration under the United States Securities Act of 1933
(the "1933 Act") or an exemption therefrom, and that in the absence of an
effective registration statement covering the Preferred Shares and Purchaser's
Shares or an available exemption from registration under the 1933 Act, the
Preferred Shares and Purchaser's Shares will be restricted from transfer.
2.2 It is understood and agreed that the certificates evidencing the
Purchaser's Shares may bear the following legend:
(a) "The shares represented by this certificate have not been registered under
the United States Securities Act of 1933. They may not be sold, offered for
sale, pledged, hypothecated or otherwise transferred in the absence of a
registration statement in effect with respect to such shares under such Act or
an opinion of counsel or other evidence satisfactory to InvestAmerica, Inc. and
its counsel that such registration is not required."
2.3 Within 90 days of the Closing Date the Purchaser shall file with the
Securities and Exchange Commission under the 1933 Act a registration statement
covering the sale by the Vendor of the Purchaser's Shares on a continuous or
delayed basis pursuant to Rule 415 thereunder. The Purchaser shall use its
best efforts to cause such registration statement to be declared effective on
or prior to the 120th day following filing and shall thereafter keep such
registration statement continuously effective until the earlier of the date
that all such Purchaser's Shares have been sold or are capable of being sold in
a single transaction under Rule 144 or that date which is 2 years after the
Closing Date.
3. CLOSING
3.1 The closing of the transactions contemplated herein will take place at 4:00
p.m. local time, on July 7, 2000 (the "Closing Date") at the offices of the
Purchaser's Solicitors, or at such other place, date and time, as the parties
agree upon.
4. WARRANTIES AND REPRESENTATIONS OF THE VENDOR
4.1 The Vendor warrants and represents to the Purchaser and the Company, with
the intent that the Purchaser will rely thereon in entering into this Agreement
and in concluding the share exchange contemplated herein, that:
(a) the Vendor is the registered holder and beneficial owner of the Vendor's
Shares, free and clear of all liens and the Vendor has no interest, legal or
beneficial, direct or indirect, in any shares of, or the assets or business of,
the Company other than the Vendor's Shares;
(b) the issued and outstanding share capital of the Company consists of 672
common shares;
(c) the Vendor has the power and capacity and good and sufficient right and
authority to enter into this Agreement on the terms and conditions herein set
forth and will on the Closing Date have the rights to transfer the legal and
beneficial title and ownership of the Vendor's Shares to the Company;
(d) the Vendor does not have any specific information relating to the Company
which is not generally known or which has not been disclosed to the Purchaser
and which if known could reasonably be expected to have a materially adverse
effect on the value of the Vendor's Shares or on the Company as a whole;
(e) the Vendor has had adequate opportunity to obtain from representatives of
the Purchaser such information, in addition to the representations set forth in
this Agreement, as is necessary to evaluate the merits and risks of the
Vendor's investment in the Preferred Shares and the Purchaser's Shares and the
Vendor has sufficient experience in business, financial and investment matters
to be able to evaluate the risks involved in the acquisition of the Preferred
Shares to be issued to the Vendor pursuant to the terms of this Agreement and
to make informed investment decisions with respect to such investment.
(f) no person has any agreement, right, option or privilege, consensual or
arising by law, present or future, contingent or absolute, or capable of
becoming an agreement, right or option:
(i) to require the Company to issue any further or other shares in its capital
or any other security convertible or exchangeable into shares in its capital or
to convert or exchange any securities into or for shares in the capital of the
Company;
(ii) for the issue or allotment of any of the authorized but unissued shares in
the capital of the Company;
(iii) to require the Company to purchase, redeem or otherwise acquire any of
the issued and outstanding shares in the capital of the Company;
(iv) to purchase or otherwise acquire any shares in the capital of the Company;
or
(v) which is capable of becoming an agreement for the acquisition of any of the
material assets of the Company;
(g) the Company is registered in all jurisdictions in which it currently
carries on business;
(h) the making of this Agreement and the completion of the transactions
contemplated hereby and the performance of and compliance with the terms hereof
does not and will not:
(i) conflict with or result in a breach of or violate any of the terms,
conditions, or provisions of the constating documents of the Company;
(ii) conflict with or result in a breach of or violate any of the terms,
conditions or provisions of any law, judgment, order, injunction, decree,
regulation or ruling of any court or governmental authority, domestic or
foreign, to which the Company or the Vendor is subject or constitute or result
in a default under any agreement, contract or commitment to which the Company
or the Vendor is a party;
(iii) subject to obtaining any necessary consents of applicable regulatory
authorities, give to any person any remedy, cause of action, right of
termination, cancellation or acceleration in or with respect to any agreement,
contract, or commitment to which the Company is a party;
(iv) give to any government or governmental authority, including any
governmental department, commission, bureau, board, or administrative agency
any right of termination, cancellation, or suspension of, or constitute a
breach of or result in a default under any permit, license, control, or
authority issued to any of the entities and which is necessary or desirable in
connection with the conduct and operation of the business of the Company as
currently conducted; or
(v) subject to obtaining any necessary consents of applicable regulatory
authorities, constitute a default by the Company or an event which, with the
giving of notice or lapse of time or both, might constitute an event of default
or non-observance under any agreement, contract, indenture or other instrument
relating to any indebtedness of any the Company which would give any person the
right to accelerate the maturity for the payment of any amount payable under
that agreement, contract, indenture, or other instrument;
(i) the financial statements of the Company provided to the Purchaser for the
year ending August 31, 1999 and for the period ending May 30, 2000 attached as
Schedule "B" hereto were prepared in accordance with generally accepted
accounting principles applied on a basis consistent with prior reporting
periods, are true and correct in every material respect and present fairly and
accurately the financial condition and position of the Company as at the date
thereof and the results of the operations of the Company;
(j) other than approvals and filings required under applicable securities laws,
no authorization, approval, order, license, permit or consent of any
governmental authority, regulatory body or court, and no registration,
declaration or filing by either the Vendor or the Company with any such
governmental authority, regulatory body or court is required in order for the
Vendor to complete the contemplated purchase and sale, to duly perform and
observe the terms and provisions of this Agreement, and to render this
Agreement legal, valid, binding and enforceable in accordance with its terms;
(k) there is no basis for and there are no actions, suits, judgments,
investigations or proceedings outstanding or pending or to the knowledge of the
Vendor threatened against or affecting the Company at law or in equity or
before or by any court or federal, state, municipal or other governmental
authority, department, commission, board, tribunal, bureau or agency;
(l) the Company has not guaranteed, or agreed to guarantee, any indebtedness or
other obligation of any person except as described in the financial statements
of the Company as presented to the Purchaser.
5. PURCHASER'S WARRANTIES AND REPRESENTATIONS
5.1 The Purchaser warrants and represents to the Vendor, with the intent that
the Vendor will rely thereon in entering into this Agreement and in concluding
the share exchange contemplated herein that:
(a) the Purchaser has had adequate opportunity to obtain from the Vendor such
information, in addition to the representations set forth in this Agreement, as
is necessary to evaluate the merits and risks of the Purchaser's investment in
the Company and the Purchaser has sufficient experience in business, financial
and investment matters to be able to evaluate the risks involved in the
acquisition of the Company and to make informed investment decisions with
respect to such investment;
(b) the Purchaser is a corporation duly incorporated, validly existing and in
good standing under the laws of Nevada and has the power, authority and
capacity to enter into this Agreement and to carry out its terms;
(c) the execution and delivery of this Agreement and the completion of the
transactions contemplated hereby has been duly and validly authorized by all
necessary corporate action on the part of the Purchaser, and this Agreement
constitutes a legal, valid and binding obligation of the Purchaser in
accordance with its terms except as limited by laws of general application
affecting the rights of creditors;
(d) no consent, approval, order or authorization of, or registration,
declaration or filing with, any governmental authority is required by or with
respect to Purchaser in connection with the execution and delivery of this
Agreement by the Purchaser or the consummation by the Purchaser of the
transactions contemplated hereby, except for such consents, approvals, orders,
authorizations, registrations, declarations, qualifications or filings as may
be required by the NASD and under applicable federal and state securities laws
in connection with the transactions set forth herein;
(e) there is no litigation, proceeding or governmental investigation in
progress, pending, threatened or contemplated against or relating to the
Purchaser, the business of the Purchaser, or the transactions contemplated by
this Agreement;
(f) as of their respective filing dates, the Purchaser's SEC filings complied
in all material respects with the Securities Exchange Act and as of their
respective filing dates, the Purchaser's SEC filings did not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made therein, in light of the circumstances in which they were
made, not misleading;
(g) the shares of common stock of the Purchaser are quoted on the OTCBB under
the symbol "INVT";
(h) the Preferred Shares to be issued to the Vendor hereunder on the Closing
Date and the Purchaser's Shares to be issued on exchange of the Preferred
Shares, will be validly issued, fully paid and non-assessable;
(i) there are no orders ceasing or suspending trading in the securities of the
Purchaser and to the best of the knowledge of the Purchaser, no proceedings for
this purpose have been instituted or are pending, contemplated or threatened;
and
(j) on the Closing Date the Purchaser shall have no financial liabilities or
outstanding indebtedness other than as evidenced by its most current quarterly
financial statements as filed with the SEC.
6. COVENANTS
6.1 Between the execution date and the Closing, the Vendor:
(a) will cause the Company to afford to the Purchaser and its authorized
representatives access during normal business hours to all properties, books,
contracts, commitments, records of the Company and furnish such copies
(certified if requested) thereof and other information as the Purchaser may
reasonably request, and to permit the Purchaser and its authorized
representatives to make such audit of the books of account of the Company as
the Purchaser may reasonably see fit;
(b) will diligently take all reasonable steps to obtain, prior to the Closing
Date, all consents and approvals required to complete the transactions
contemplated herein in accordance with the terms and conditions hereof;
(c) will cause the Company to conduct its business and affairs diligently and
only in the ordinary course, and preserve and maintain the goodwill of the
Company;
(d) will cause the Company to maintain insurance coverage of the scope and in
the amounts presently held;
(e) will not permit the Company to make or agree to make any payment to any
director, officer, employee or agent of the Company except in the ordinary
course of business and at the regular rates of salary and commission for such
person or as reasonable reimbursement for expenses incurred by such person in
connection with the Company.
6.2 The Purchaser shall:
(a) cause to be reserved for issuance that number of shares of common stock of
the Purchaser as are equal to the Purchaser's Shares, and, if necessary, within
reasonable time after closing and as soon as practicable, take such steps as
shall be necessary to increase its authorized capital so as to allow for the
issuance of the Purchaser's Shares;
(b) take all such steps as soon as practicable to create a class of shares (the
"Special Voting Shares") in the capital of the Purchaser having voting rights
and no other rights and restrictions and to cause to be issued to the Vendor
that number of Special Voting Shares as are equal to the number of Purchaser's
Shares.
7. NON-MERGER
7.1 The representations, warranties, covenants and agreements of the Vendor
contained herein and those contained in the documents and instruments
delivered pursuant hereto will be true at and as of the Closing Date as
though made at the Closing Date and will survive the Closing Date for a period
ending 12 months after Closing Date, and notwithstanding the completion of the
transactions herein contemplated, the waiver of any condition contained herein
(unless such waiver expressly releases the Vendor of such representation,
warranty, covenant or agreement), or any investigation by the Purchaser, the
same will remain in full force and effect for the said same 12 month period
after the Closing Date.
7.2 The representations, warranties, covenants and agreements of the Purchaser
contained herein and those contained in the documents and instruments delivered
pursuant hereto will be true at and as of the Closing Date as though made at
the Closing Date and will survive the Closing Date for a period ending 12
months after the Closing Date, and notwithstanding the completion of the
transactions herein contemplated, the waiver of any condition contained herein
(unless such waiver expressly releases the Purchaser of such representation,
warranty, covenant or agreement), or any investigation by the Vendor, the same
will remain in full force and effect for the said same 12 month period after
the Closing Date.
8. CONFIDENTIALITY
8.1 Each party agrees that all information provided to it by another party
(collectively "Confidential Information") shall be held in complete confidence
by it and by its advisors and representatives and shall not, without the prior
written consent of that other party, be disclosed to any other person, nor used
for any other purpose, other than in connection with the evaluation,
negotiation and finalization of the transactions contemplated herein. However,
a party's obligation does not apply to Confidential Information:
(a) which is generally available to third parties (unless available as a result
of a breach of this Agreement);
(b) which is lawfully in the possession of a party and which was not acquired
directly or indirectly from another party; or
(c) the disclosure of which is required by any applicable law or by any
supervisory or regulatory body to whose rules a party is subject.
9. CONDITIONS PRECEDENT
9.1 The obligations of the Purchaser and the Company to consummate the
transactions herein contemplated are subject to the fulfillment of each of the
following conditions at the times stipulated:
(a) this Agreement and the purchase of the Vendor's Shares shall have been
approved by the board of directors of the Purchaser;
(b) the representations and warranties of the Vendor contained herein shall be
true and correct in all respects at and as of the Closing Date except as may be
in writing disclosed to and approved by the Purchaser;
(c) all covenants, agreements and obligations hereunder on the part of the
Vendor to be performed or complied with at or prior to the Closing Date,
including the Vendor's obligations to deliver the documents and instruments
herein provided for, shall have been performed and complied with at and as of
the Closing;
(d) between the date hereof and the Closing Date, the Company shall not have
experienced any event, circumstance or condition or have taken any action or
become subject to any action of any character adversely affecting the Company,
or as would materially reduce the value of the Company;
(e) on or before the Closing Date, no federal, state, regional or municipal
government of any country applicable to the Company and its business or any
agency thereof will have enacted any statute or regulation, announced any
policy or taken any action that will materially and adversely affect the
Company;
(f) the Purchaser is satisfied in its sole discretion as to the operations of
the Company after completion of its due diligence investigation thereof;
(g) as at the Closing Date, the Purchaser will receive the resignations of the
directors and officers of the Company as may be requested in writing, to be
effective immediately upon Closing;
(h) no action, suit or proceeding concerning the Company will be pending or
threatened by or before any court of competent jurisdiction or governmental
entity wherein an unfavourable judgment, order, decree, stipulation or
injunction would affect materially and adversely the Company, and no such
judgment, order, decree stipulation or injunction will be in effect;
9.2 The conditions set forth in Section 9.1 are for the exclusive benefit of
the Purchaser and may be waived by the Purchaser in writing in whole or in
part at any time.
9.3 The obligations of the Vendor to consummate the transactions herein
contemplated are subject to the fulfilment of each of the following conditions
at the times stipulated, that:
(a) this Agreement and the sale of the Vendor's Shares shall have been approved
by the board of directors of the Company and by the shareholders of the Company;
(b) the representations and warranties of the Purchaser contained herein shall
be true and correct in all material respects at and as of the Closing Date
except as may be in writing disclosed to and approved by the Vendor;
(c) all covenants, agreements and obligations hereunder on the part of the
Purchaser to be performed or complied with at or prior to the Closing Date,
including in particular the Purchaser's obligations to deliver the documents
and instruments herein provided for, have been performed and complied with as
at the Closing Date;
(d) between the date hereof and the Closing Date, the Purchaser shall not have
experienced any event, circumstance or condition or have taken any action or
become subject to any action of any character adversely affecting the Purchaser
or as would materially reduce the value of the Purchaser Shares;
(e) the Vendor is satisfied in its sole discretion as to the state of the
business assets and the operations of the Purchaser after completion of their
due diligence investigation thereof; and
(f) concurrent with the Closing the Purchaser shall complete the acquisition of
the remaining common shares of the Company in accordance with the terms of the
agreement between the Purchaser, the Company and the shareholders of the
Company holding such shares dated for reference the 4th day of July, 2000.
9.4 The conditions set forth in Section 9.3 are for the exclusive benefit of
the Vendor and may be waived by the Vendor in whole or in part at any time.
9.5 The respective obligations of each party to this Agreement to consummate
the transactions herein contemplated are subject to all consents, approvals,
authorizations, waivers and orders of any regulatory authorities, shareholders
or third parities required or necessary or desirable for the completion of the
transactions contemplated herein having been obtained or received by the
Company and the Purchaser.
10. TRANSACTIONS OF THE VENDOR AT THE CLOSING
10.1 At the Closing, the Vendor and the Company will execute and deliver or
cause to be executed and delivered all documents, instruments, resolutions and
share certificates as are necessary to effectively transfer and assign the
Vendor's Shares to the Purchaser, free and clear of all liens, including:
(a) certified copies of resolutions of the directors of the Company authorizing
the exchange of the Vendor's Shares;
(b) share certificates representing the Vendor's Shares in the name of the
Vendor, duly endorsed for transfer;
(c) resignations in writing of any of the directors and officers and signing
officers of the Company requested by the Purchaser in writing;
(d) all corporate records and books of account of the Company including, minute
books, share register books, share certificate books and annual reports;
(e) the corporate seal of the Company;
(f) releases, in form and substance satisfactory to the Purchaser, acting
reasonably, executed by the Vendor in favour of the Company releasing the
Company from any and all manner of actions, causes of action, suits,
proceedings, debts, dues, profits, expenses, contracts, damages, claims,
demands and liabilities whatsoever, in law or equity, which the Vendor ever had,
now has, or may have against either of the Company for or by reason of any
matter, cause or thing whatsoever done or omitted to be done by the Company up
to the Closing Date other than in respect of obligations of the Company to the
Vendor arising in respect of:
(i) earned but unpaid salary and unpaid benefits for the then current pay
period; and
(ii) any obligations pursuant to indemnities granted to the Vendor by the
Company in connection with acts as a director of the Company provided that such
indemnities shall be ineffective in respect of any act or omission which would
constitute a default or breach pursuant to this Agreement or which render any
representation or warranty given hereunder untrue or inaccurate;
(g) a closing warranty and certificate from the Vendor confirming that the
conditions to be satisfied by the Vendor, unless waived, set out in Section 9.3
have been satisfied at the Closing Date and that all representations and
warranties of the Vendor contained in this Agreement are true at and as of the
Closing;
(h) an opinion of the Vendor's solicitors addressed to the Purchaser and the
Purchaser's solicitors in a form reasonably satisfactory to the Purchaser's
solicitors;
(i) an option agreement in the form attached as Schedule "C" hereto, duly
executed by the Vendor
(j) all such other documents and instruments as the Purchaser's solicitors may
reasonably require.
11. TRANSACTIONS OF THE PURCHASER AT THE CLOSING
11.1 The Purchaser will deliver the following at the Closing:
(a) certificates representing the Preferred Shares in the names of the Vendor;
(b) a Closing Warranty and Certificate from the Purchaser confirming that the
conditions to be satisfied by the Purchaser, unless waived, set out in Section
9.1 have been satisfied at the Closing and that all representations and
warranties of the Purchaser contained in this Agreement are true at and as of
the Closing;
(c) an opinion of the Purchaser's Solicitors addressed to the Vendor and the
Vendor's Solicitors in a form reasonably satisfactory to the Vendor's
solicitors;
(d) certified copies of the resolutions of the directors of the Purchaser
reserving the for issuance the Purchaser's Shares and of the Company
authorizing the issuance of the Preferred Shares to the Vendor; and
(e) all such other documents and instruments as the Vendor's solicitors may
reasonably require.
12. TIME OF THE ESSENCE
12.1 Time is of the essence of this Agreement.
13. FURTHER ASSURANCES
13.1 The parties will execute and deliver all such further documents and
instruments and do all such acts and things as may be reasonably necessary or
required to carry out the full intent and meaning of this Agreement and to
effect the transactions contemplated by this Agreement.
14. SUCCESSORS AND ASSIGNS
14.1 This Agreement will enure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators,
successors and permitted assigns. This Agreement may not be assigned by a
party hereto without the prior written consent of the other parties.
15. COUNTERPARTS
15.1 This Agreement may be executed in several counterparts and by fax
transmission, each of which will be deemed to be an original and all of which
will together constitute one and the same instrument.
16. NOTICE
16.1 Any notice required or permitted to be given under this Agreement will be
validly given if in writing and delivered or sent by pre-paid registered mail or
facsimile transmission, to the following addresses:
(a) If to the Vendor:
Suite 148 - 4664 Lougheed Highway
Burnaby, BC V5C 5T5
Attention: Doug Smith
(b) If to the Purchaser or the Company:
1776 Park Avenue, Unit 4
Park City, Utah
Attention: Brian Kitts
or to such other address as any party may specify in writing to the other
parties.
16.2 Any notice delivered on a business day or sent by facsimile transmission
will be deemed conclusively to have been effectively given on the date notice
was delivered or sent by facsimile transmission.
16.3 Any notice sent by prepaid registered mail will be deemed conclusively to
have been effectively given on the third business day after posting; but if at
the time of posting or between the time of posting and the third business day
thereafter there is a labour disturbance affecting postal service, then the
notice will not be effectively given until actually delivered.
17. ASSIGNMENT
17.1 The Purchaser and the Company acknowledges that the Vendor's Shares may be
transferred by the Vendor prior to Closing in connection with certain tax
planning and in this regard the Purchaser and the Company hereby consent to an
assignment by the Vendor of any or all of its interests under this Agreement to
one or more affiliates or associates of the Vendor, as those terms are defined
in the Company Act (British Columbia).
18. ENTIRE AGREEMENT
18.1 This Agreement contains the sole and entire agreement between the parties
and any modifications must be in writing and signed by each party. The parties
will in good faith investigate and negotiate the most tax effective method of
carrying out the intentions of this Agreement.
19. TENDER
19.1 Tender may be made upon the Vendor or Purchaser or upon the Purchaser's
Solicitors and money may be tendered by cheque certified by a chartered bank or
by electronic wire transfer.
20. PROPER LAW
20.1 This Agreement will be governed by and construed in accordance with the
province of the laws of the Province of British Columbia and the laws of Canada
applicable therein and the parties will attorn to the Courts thereof.
IN WITNESS WHEREOF the parties have caused this Agreement to be executed and
delivered this _______ day of __________________, 2000.
ZED DATA SYSTEMS CORP.
Per:
--------------------
Authorized Signatory
INVESTAMERICA INC.
Per:
--------------------
Authorized Signatory
SMITH SHELF COMPANY LIMITED
Per:
--------------------
Authorized Signatory
<PAGE>
Schedule "A"
RIGHTS AND RESTRICTIONS OF PREFERRED SHARES
Part 29 - SPECIAL RIGHTS AND RESTRICTIONS ATTACHED TO CLASS "D" PREFERENCE
SHARES WITH NO PAR VALUE
29.1 Definitions
For the purposes of Part 29, the following terms shall have the following
meanings:
(a) "InvestAmerica" means InvestAmerica Inc., a Nevada corporation;
(b) "InvestAmerica Share" means one share of Series B preferred stock of
InvestAmerica;
(c) "InvestAmerica Share Equivalent" means, on any date, such number of
InvestAmerica Shares as is the equivalent of one InvestAmerica Share as at July
4, 2000, expressed to two decimal places determined by applying the following
adjustments on a cumulative basis:
(i) if and whenever at any time from the date hereof and prior to the
redemption of all of the issued and outstanding Class "D" Preference Shares,
InvestAmerica shall:
A. subdivide, redivide or change its outstanding Series B preferred stock
into a greater number of shares; or
B. reduce, combine or consolidate its outstanding Series B preferred stock into
a smaller number of shares,
the number of InvestAmerica Shares obtainable for a Class "D" Preference Share
upon redemption in accordance with Part 29.4(a) or (b) shall be adjusted
immediately after the effective date of the events referred to in (1) and (2)
above by multiplying the number of InvestAmerica Shares theretofore obtainable
by a fraction of which the numerator shall be the total number of InvestAmerica
Shares outstanding immediately after such date and the denominator shall be the
total number of InvestAmerica Shares outstanding immediately prior to such
date. Such adjustment shall be made successively whenever any event referred
to in this subsection shall occur;
(ii) if and whenever at any time from the date hereof and prior to the
redemption of all of the issued and outstanding Class "D" Preference Shares,
there is a reclassification or redesignation of the InvestAmerica Shares or a
capital reorganization of InvestAmerica other than as described in Part
29.1(c)(i) or a consolidation, arrangement, amalgamation or merger of
InvestAmerica with or into any other body corporate, trust, partnership or
other entity, or a sale or conveyance of the property and assets of
InvestAmerica as an entirety or substantially as an entirety to any other body
corporate, trust, partnership or other entity, any holder of Class "D"
Preference Shares who has not exercised his right of retraction in accordance
with Part 29.4(a) prior to the effective date of such reclassification,
redesignation, capital reorganization, consolidation, arrangement, amalgamation,
merger, sale or conveyance, upon the exercise of such right thereafter, shall
be entitled to receive and shall accept, for each Class "D" Preference Share
to be then redeemed, in lieu of the number of InvestAmerica Shares then sought
to be acquired by him, the number of shares or other securities or property of
InvestAmerica or of the body corporate, trust, partnership or other entity
resulting from such merger, amalgamation, arrangement, or consolidation, or to
which such sale or conveyance may be made, as the case may be, that such holder
of Class "D" Preference Shares would have been entitled to receive on such
reclassification, redesignation, capital reorganization, consolidation,
arrangement, amalgamation, merger, sale or conveyance, if, on the record date
or the effective date thereof, as the case may be, the such holder had been the
registered holder of the number of InvestAmerica Shares receivable upon the
redemption of a Class "D" Preference Shares;
(d) "InvestAmerica Dividend Date" means the date on which the directors of
InvestAmerica declare any dividend on the InvestAmerica Shares;
(e) "Redemption Event" means the earlier of:
(i) July 4, 2005;
(ii) the liquidation, bankruptcy or winding up of the Company or InvestAmerica,
either voluntary or involuntary, or other distribution of the assets and funds
of the Company or InvestAmerica for the purposes of winding up its affairs;
(iii) the date that the shareholders of InvestAmerica approve a resolution
authorizing InvestAmerica to consolidate or merge with or into, amalgamate with
or enter into a statutory arrangement with any other person;
(f) "InvestAmerica Call Right" means the right granted to InvestAmerica by
each holder of Class "D" Preference Shares wherein, in accordance with the
terms thereof, InvestAmerica can compel such holders to exchange their Class
"D" Preference Shares for InvestAmerica Shares.
29.2 Voting Rights
The holders of the Class "D" Preference Shares shall be entitled to
receive notice of, to attend and to vote at meetings of shareholders of the
Company. The holders of the Class "D" Preference Shares shall collectively be
entitled to votes representing 10.1% of all votes which may be cast, pro rata
in accordance with their holdings; provided that, in circumstances where there
has been a partial redemption or retraction of the Class "D" Preference
Shares in accordance with the terms herein, the percentage of the total votes
cast to which the holders of the Class "D" Preference Shares shall be
collectively entitled shall be equal to that percentage determined by
multiplying the percentage which the number of converted Class "D" Preference
Shares is of 50,000 times 10.1%.
29.3 Dividends
The holders of Class "D" Preference Shares shall be entitled to receive
and the Board of Directors shall, subject to applicable law, declare a dividend
on each Class "D" Preference Share as follows:
(a) in the case of a cash dividend declared on the InvestAmerica Shares, in an
amount in cash for each Class "D" Preference Share equal to the cash dividend
declared on such number of InvestAmerica Shares as is equal to the
InvestAmerica Share Equivalent on the InvestAmerica Dividend Date;
(b) in the case of a stock dividend declared on the InvestAmerica Shares to be
paid in InvestAmerica Shares, in such number of Class "D" Preference Shares as
is equal to the number of InvestAmerica Shares to be issued as a dividend per
InvestAmerica Share with any fractional amount to be paid in cash in an amount
equal to the cash value of the InvestAmerica Share Equivalent of such fraction
of a Class "D" Preference Share as at the InvestAmerica Dividend Date;
(c) in the case of a dividend declared on the InvestAmerica Shares other than
in cash or InvestAmerica Shares, in such type and amount of property as is the
same as or economically equivalent (as determined by the Board of Directors) to
the type and amount of property to be paid as a dividend on such number of
InvestAmerica Shares as is equal to the InvestAmerica Share Equivalent on the
InvestAmerica Dividend Date.
(d) The holders of Class "D" Preference Shares shall also be entitled to
receive a dividend as and when a dividend is otherwise declared with respect
to all or any other class of shares of the Company, which dividend shall, in
respect of the Class "D" Preference Shares, collectively represent an amount
equal to 10.1% of the total cumulative amount of the dividend paid to all
classes of shares of the Company, provided that in circumstances where there
has been a partial redemption or retraction of the Class "D" Preference Shares
in accordance with the terms hereof, the percentage of the total cumulative
dividends paid to all classes of shares of the Company which the Class "D"
Preferred Shares would then be collectively entitled shall be equal to that
percentage determined by multiplying the percentage which the unconverted
Class "D" Preference Shares are of 50,000 times 10.1%.
29.4 Retraction and Redemption
(a) Right to Retraction
A holder of Class "D" Preference Shares shall be entitled at any time,
subject to the exercise of the InvestAmerica Call Right, and upon compliance
with the provisions of this Article, to require the Company to redeem any or
all of the Class "D" Preference Shares registered in the name of the holder by
delivering to such holder InvestAmerica Shares equal in number to the then
InvestAmerica Share Equivalent for each Class "D" Preference Share to be so
redeemed as at the date the written notice of retraction is received by the
Company.
(b) Right to Redemption
Subject to applicable law and subject to the exercise of the InvestAmerica
Call Right, the Company shall, upon the occurrence of a Redemption Event,
redeem all of the then outstanding Class "D" Preference Shares by delivering to
the holders thereof InvestAmerica Shares equal in number to the then
InvestAmerica Share Equivalent as at the date of the Redemption Event for each
Class "D" Preference Share held, provided that, in circumstances where a
redemption occurs hereunder as a result of the occurrence of an event described
in subparagraph
(iii) of the definition of Redemption Event in Part 29.1, such redemption shall
not be effective if the consolidation, merger, amalgamation or statutory
arrangement is not proceeded with.
(c) Mechanics of Retraction
Before any holder of Class "D" Preference Shares shall be entitled to
exercise the rights set out in Part 29.4(a) in respect of any Class "D"
Preference Shares, such holder shall surrender the certificate or certificates
therefor, duly endorsed, at the Registered Office of the Company and shall give
written notice as set out in Part 22 to the Company at its Registered Office of
the election to convert the same and shall state therein the name or names in
which the certificate or certificates for InvestAmerica are to be issued. The
Company shall, as soon as practicable thereafter, deliver to such holder of
Class "D" Preference Shares, or to the nominee or nominees of such holder, a
certificate or certificates for the number of InvestAmerica Shares to which
such holder shall be entitled.
(d) Mechanics of Redemption
Each holder of Class "D" Preference Shares to be redeemed in accordance
with Part 29.4(b) shall, upon receipt of notice in writing from the Company as
to the occurrence of a Redemption Event surrender the certificate or
certificates therefor, duly endorsed, at the Registered Office of the Company
and thereupon the Company shall, as soon as practicable thereafter, deliver to
such holder, or to the nominee or nominees of such holder, a certificate or
certificates for the number of InvestAmerica Shares to which such holder shall
be entitled, provided that, notwithstanding the surrender of the certificates,
the Class "D" Preference Shares shall be deemed to be redeemed effective as at
the date of a Redemption Event and from and after such date, but subject to the
provisions of Part 29.4(b), all rights of the holders of Class "D" Preference
Shares as such holders shall cease (except for the right to receive
InvestAmerica Shares equal in number to the then InvestAmerica Share Equivalent
for each such Class "D" Preference Share upon surrender of their certificate or
certificates therefor) and such shares shall not thereafter be transferred on
the books of the Company or be deemed to be outstanding for any purpose
whatsoever.
(e) Dividend Entitlement on Retraction or Redemption
The holders of any Class "D" Preference Shares at the close of business on
the record date for any dividend payable on such shares shall be entitled to
the dividend notwithstanding that the Class "D" Preference Shares are redeemed
pursuant to Part 29.4(a) or 29.4(b), as the case may be, after the record date
and before the payment date of the dividend. Subject to the foregoing, upon
redemption of any Class "D" Preference Shares, there shall be no payment or
adjustment by the Company or by any holder of Class "D" Preference Shares on
account of any dividend on the Class "D" Preference Shares so redeemed.
29.5 Liquidation
In the event of any liquidation, dissolution, bankruptcy or winding up of
the Company, either voluntary or involuntary, or other distribution of the
assets and funds of the Company for the purposes of winding up its affairs, the
holders of the Class "D" Preference Shares shall, collectively, be entitled to
10.1% of the assets and funds of the Company available for distribution to
shareholders, pro rata in accordance with their holdings; provided that, in
circumstances where there has been a partial retraction or redemption of the
Class "D" Preference Shares in accordance with the terms hereof, the percentage
of the assets and funds of the Company to which the holders of the Class "D"
Preference Shares shall collective be entitled shall be equal to that
percentage determined by multiplying the percentage which the unconverted
Class "D" Preference Shares are of 50,000 times 10.1%.
29.6 Status of Retracted or Redeemed Shares
In the event any Class "D" Preference Shares shall be redeemed pursuant to
Part 29.4(a) or 29.4(b) hereof, as the case may be, the shares so retracted or
redeemed shall be cancelled and shall not be re-issuable by the Company.
<PAGE>
Schedule B - Financial Statements (intentionally omitted).
<PAGE>
Schedule C CALL OPTION AGREEMENT
THIS agreement is made effective as of 7th day of July, 2000.
BETWEEN:
SMITH SHELF COMPANY LIMITED,
(the "Shareholder")
OF THE FIRST PART
AND:
INVESTAMERICA INC., a corporation incorporated under the laws of Nevada
("InvestAmerica")
OF THE SECOND PART
A. In connection with the reorganization of the Company it is proposed that
certain shareholders of the Company will exchange common shares of the Company
held by them for a like number of Class "D" Preference Shares of the Company,
said shares being subject to the rights and restrictions as detailed in the
articles of the Company;
The Shareholder is the sole legal and beneficial owner of the Common
Shares, which shares are to be exchanged for the Shares;
The Parties wish to record an agreement in relation to an option for the
sale and purchase of the Shares in the circumstances described herein;
NOW THIS AGREEMENT WITNESSES as follows:
1. INTERPRETATION
1.1 In this Agreement, unless the context or subject matter otherwise requires:
(a) "Agreement" and "this Agreement" means the agreement between the Parties
hereby constituted;
(b) "Common Shares" means 153 common shares of the Company registered in the
name of the Shareholder;
(c) "Company" means Zed Data Systems Corp., a British Columbia company;
(d) "Current Market Price" means in respect of a InvestAmerica Common Share on
any date, the closing sale price of InvestAmerica Common Shares on such date,
or if no trades occurred on such day, the last trading day prior thereto, on
such stock exchange or automated quotation system as the shares of
InvestAmerica then trade;
(e) "InvestAmerica Series B Preferred Shares" means Series B Preferred shares
of InvestAmerica;
(f) "InvestAmerica Share Equivalent" has the meaning given to that term in
Article 29.1(c) of the Articles of the Company;
(g) "InvestAmerica Voting Shares" means special voting shares of InvestAmerica,
each such share entitling the holder thereof to one vote at duly called
meetings of shareholders of InvestAmerica, but having no other rights of
participation;
(h) "Notice" means a notice of exercise of the Option in the form attached as
Schedule "A" hereto;
(i) "Option" means the option to purchase the Shares provided for herein;
(j) "Party" means a party to this Agreement and "Parties" has a corresponding
meaning;
(k) "Purchase Price" shall mean, in respect of any Notice given by
InvestAmerica to the Shareholder, an amount per Share equal to the then
InvestAmerica Share Equivalent multiplied by the then Current Market Price
with such figure then multiplied by the number of InvestAmerica common shares
into which the InvestAmerica Series B Preferred Shares are then convertible; and
(l) "Shares" means 50,000 Class "D" Preference Shares of the Company to be
acquired by the Shareholder in exchange for the Common Shares.
Any reference to currency is to the currency of the United States of America
unless otherwise indicated.
2. OPTION
2.1 The Shareholder hereby grants to InvestAmerica an option to acquire the
Shares from the Shareholder on the terms set out in this Agreement.
2.2 As consideration for the granting of the Option, InvestAmerica hereby
agrees to issue to the Shareholder 15,000,000 InvestAmerica Voting Shares upon
the creation of same in accordance with the terms of that Share Purchase
Agreement between the Company, InvestAmerica and the Shareholder dated for
reference the 5th day of July, 2000;
2.3 This Option shall expire and be of no further force and effect as of the
first business day following the earlier of:
(a) July 5, 2005;
(b) the date that the shareholders of InvestAmerica approve a resolution
authorizing InvestAmerica to consolidate or merge with or into, amalgamate with
or enter into a statutory arrangement with any other person; and
(c) the date upon which the last of the Shares have been retracted or redeemed
by the Company in accordance with their terms
provided that, in circumstances where InvestAmerica has not otherwise exercised
the Option at such time as the Option would have expired in accordance with
Section 2.3(a) and 2.3(b) hereof, InvestAmerica shall be deemed to have
exercised the Option in full immediately prior to such time.
3. EXERCISE OF OPTION
3.1 The Option may only be exercised in circumstances where the Shareholder has
exercised, or is deemed to have exercised the right of retraction in respect of
the Shares as set out in the articles of the Company, provided that it is
acknowledged and agreed that the entitlement of InvestAmerica to exercise the
Option shall take precedence to the right of the Shareholder to exercise the
above referenced right of retraction.
3.2 The Option may be exercised during the Option Period by InvestAmerica
delivering Notice to the Shareholder.
3.3 Upon receipt of a Notice the Shareholder shall forthwith deliver
certificates representing the Shares which are the subject of the Notice to
InvestAmerica.
3.4 Within seven days of receipt of the certificates referred to in section 3.3
above, InvestAmerica shall deliver the Purchase Price to the Shareholder which
Purchase Price shall be satisfied by delivering to the Shareholder such number
of InvestAmerica Series B Preferred Shares as is equal to the product obtained
by multiplying the number of Shares to be purchased by the then InvestAmerica
Share Equivalent.
4. INVESTAMERICA VOTING SHARES
4.1 Upon exercise of the Option by InvestAmerica as provided for herein, or
exercise of the rights of retraction or redemption in respect of the Shares
as provided for in the articles of the Company, the Shareholder shall
concurrently surrender to InvestAmerica such number of InvestAmerica Voting
Shares as are equal to the number of Shares disposed of by the Shareholder as
a result of the exercise of the Option or the right of retraction or redemption,
as the case may be, times 300.
5. WARRANTIES
5.1 The Shareholder represents and warrants to InvestAmerica that the
Shareholder is the sole legal and beneficial owner of the Common Shares and
will, following the exchange of such Common Shares for the Shares, be the sole
legal and beneficial owner of the Shares, free and clear of all liens charges
and encumbrances.
6. NOTICE
6.1 Any notice of other document required or permitted to be given hereunder
will be considered well and sufficiently given by hand delivery or by prepaid
first class mail if addressed to applicable party at the address set out above,
or such other address as either party may from time to time appoint by notice
in writing to the other in accordance with this clause. Any notice delivered
by hand addressed as aforesaid will be deemed to have been delivered on the day
of delivery, and any notice mailed by first class prepaid mail addressed as
aforesaid will be deemed to have been received three (3) business days after
the mailing thereof; but if at the time of mailing or between the time of
mailing and the third business day thereafter, there is a strike, lock-out or
labour disturbance affecting postal service, then such notice will not be
effectively given until actually received.
7. GOVERNING LAW
7.1 This Agreement shall be governed by the laws of the Province of British
Columbia.
8. COUNTERPARTS
8.1 This Agreement may be executed in one or more counterparts which, when so
executed by facsimile signature or otherwise, shall be read together and be
construed as one agreement.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the
day and year first above written.
SMITH SHELF COMPANY LIMITED
Per:
--------------------
Authorized Signatory
INVESTAMERICA INC.
Per:
--------------------
Authorized Signatory
<PAGE>
EXHIBIT 2
SHARE PURCHASE AGREEMENT
------------------------
THIS dated for reference 5th day of July, 2000.
AMONG:
INVESTAMERICA INC., 1776 Park Avenue, Unit 4, Park City, Utah
(herein called the "Purchaser")
AND:
ZED DATA SYSTEMS CORP., Suite 148 - 4664 Lougheed Highway, Burnaby,
Columbia, Canada, V5C 5T5
(herein "Company")
AND:
Those persons set out in Schedule A hereto
(herein "Vendors")
A. The Vendors are the registered and beneficial owners of the issued and
outstanding shares of the Company (the "Vendors' Shares") as set out opposite
their names in Schedule "A" hereto;
B. Upon the terms and subject to the conditions set forth in this Agreement,
the Vendors have agreed to sell to the Purchaser, and the Purchaser has agreed
to purchase, the Vendors' Shares for the consideration set forth below;
THEREFORE in consideration of the premises and of the mutual covenants and
agreements herein set forth, the parties hereto covenant and agree each with
the other as follows:
21. INTERPRETATION
21.1 In this Agreement, except as otherwise expressly provided:
(a) "Agreement" means this share purchase agreement, including the preamble and
the Schedules hereto, as it may from time to time be supplemented or amended
and in effect;
(b) all references in this Agreement to a designated "Section" or other
subdivision or to a Schedule is to the designated Section or other subdivision
of, or Schedule to, this Agreement;
(c) the words "herein", "hereof" and "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular Section or
other subdivision or Schedule;
(d) the headings are for convenience only and do not form a part of this
Agreement and are not intended to interpret, define, or limit the scope, extent
or intent of this Agreement or any provision hereof;
(e) the singular of any term includes the plural, and vice versa; the use of
any term is equally applicable to any gender and, where applicable, a body
corporate; the word "or" is not exclusive; the word "including" means including
without limitation or prejudice to the generality of any description,
definition, term or phrase preceding that word, and the word "include" and its
derivatives will be construed accordingly; the expression "to the knowledge of"
or any similar expression as applied to a corporation or individual, refers to,
(A) in the case of an individual, the knowledge as at the relevant date that
such individual had or would have had had he exercised due diligence in making
enquiries in relation to the matter in question from all sources of information
likely to provide him with knowledge of same, and (B) in the case of a
corporate person, the knowledge (as aforementioned) of a director or officer
thereof as at the relevant date;
(f) any accounting term not otherwise defined has the meanings assigned to it
in accordance with generally accepted accounting principles applicable in the
United States;
(g) except as otherwise provided, any dollar amount referred to in this
Agreement means the lawful currency of the United States;
(h) any other term defined within the text of this Agreement has the meaning so
ascribed.
21.2 Upon and subject to the terms and conditions of this Agreement, the
Purchaser hereby agrees to purchase from the Vendors, and the Vendors hereby
undertake to sell or procure the sale of and transfer to the Purchaser, all
legal and beneficial interest in the Vendors' Shares.
21.3 The purchase price will be paid by the Purchaser as follows:
(a) the payment of US $5,000,000 pro rata to the Vendors in accordance with
their ownership of the Vendors' Shares by way of promissory notes (the "Notes")
in substantially the form attached as Schedule "B" hereto deliverable on the
Closing Date, said Note bearing interest at 12% per annum and payable as
follows:
(i) $715,000 at the end of each month commencing on July 31, 2000; and
(ii) the balance on January 31, 2001 (the "Final Payment Date")
and secured by a pledge of the shares of the Company and by a security filing
under the Uniform Commercial Code in the States of Utah and Nevada charging all
of the present and after acquired property of the Company (the "UCC Filings").
21.4 Notwithstanding the above, in circumstances where the Purchaser completes
equity financings prior to the Final Payment Date, the net proceeds of such
financings to the Purchaser in excess of $1,000,000 shall be applied to the
repayment of the Notes on a pro rata basis.
22. CLOSING
22.1 The closing of the transactions contemplated herein will take place at
4:00 p.m. local time, on July 7, 2000 (the "Closing Date") at the offices of
the Purchaser's Solicitors, or at such other place, date and time, as the
parties agree upon.
23. WARRANTIES AND REPRESENTATIONS OF THE VENDORS
23.1 Each Vendor severally warrants and represents to the Purchaser, with the
intent that the Purchaser will rely thereon in entering into this Agreement and
in concluding the purchase and sale contemplated herein, that:
(a) the Vendor is the registered holder and beneficial owner of the Vendor's
Shares set opposite its name in Schedule A hereto, free and clear of all liens
and the Vendor has no interest, legal or beneficial, direct or indirect, in any
shares of, or the assets or business of, the Company other than the Vendor's
Shares;
(b) the issued and outstanding share capital of the Company consists of 672
common shares;
(c) the Vendor has the power and capacity and good and sufficient right and
authority to enter into this Agreement on the terms and conditions herein set
forth and will on the Closing Date have the rights to transfer the legal and
beneficial title and ownership of the Vendor's Shares to the Purchaser;
(d) the Vendor does not have any specific information relating to the Company
which is not generally known or which has not been disclosed to the Purchaser
and which if known could reasonably be expected to have a materially adverse
effect on the value of the Vendor's Shares or on the Company as a whole;
(e) the Vendor has had adequate opportunity to obtain from representatives of
the Purchaser such information, in addition to the representations set forth in
this Agreement, as is necessary to evaluate the merits and risks of such
Vendor's investment in the Purchaser's Shares and such Vendor has sufficient
experience in business, financial and investment matters to be able to evaluate
the risks involved in the acquisition of the Purchaser's Shares to be issued to
such Vendor pursuant to the terms of this Agreement and to make informed
investment decisions with respect to such investment.
(f) no person has any agreement, right, option or privilege, consensual or
arising by law, present or future, contingent or absolute, or capable of
becoming an agreement, right or option:
(i) to require the Company to issue any further or other shares in its capital
or any other security convertible or exchangeable into shares in its capital or
to convert or exchange any securities into or for shares in the capital of the
Company;
(ii) for the issue or allotment of any of the authorized but unissued shares in
the capital of the Company;
(iii) to require the Company to purchase, redeem or otherwise acquire any of
the issued and outstanding shares in the capital of the Company;
(iv) to purchase or otherwise acquire any shares in the capital of the Company;
or
(v) which is capable of becoming an agreement for the acquisition of any of the
material assets of the Company;
(g) the Company is registered in all jurisdictions in which it currently
carries on business;
(h) the making of this Agreement and the completion of the transactions
contemplated hereby and the performance of and compliance with the terms hereof
does not and will not:
(i) conflict with or result in a breach of or violate any of the terms,
conditions, or provisions of the constating documents of the Company;
(ii) conflict with or result in a breach of or violate any of the terms,
conditions or provisions of any law, judgment, order, injunction, decree,
regulation or ruling of any court or governmental authority, domestic or
foreign, to which the Company or the Vendors are subject or constitute or
result in a default under any agreement, contract or commitment to which the
Company or the Vendors are a party;
(iii) subject to obtaining any necessary consents of applicable regulatory
authorities, give to any person any remedy, cause of action, right of
termination, cancellation or acceleration in or with respect to any agreement,
contract, or commitment to which the Company is a party;
(iv) give to any government or governmental authority, including any
governmental department, commission, bureau, board, or administrative agency
any right of termination, cancellation, or suspension of, or constitute a
breach of or result in a default under any permit, license, control, or
authority issued to any of the entities and which is necessary or desirable in
connection with the conduct and operation of the business of the Company as
currently conducted; or
(v) subject to obtaining any necessary consents of applicable regulatory
authorities, constitute a default by the Company or an event which, with the
giving of notice or lapse of time or both, might constitute an event of default
or non-observance under any agreement, contract, indenture or other instrument
relating to any indebtedness of any the Company which would give any person the
right to accelerate the maturity for the payment of any amount payable under
that agreement, contract, indenture, or other instrument;
(i) the financial statements of the Company provided to the Purchaser for the
year ending August 31, 1999 and for the period ending May 31, 2000 attached as
Schedule "C" hereto were prepared in accordance with generally accepted
accounting principles applied on a basis consistent with prior reporting
periods, are true and correct in every material respect and present fairly and
accurately the financial condition and position of the Company as at the date
thereof and the results of the operations of the Company;
(j) other than approvals and filings required under applicable securities laws,
no authorization, approval, order, license, permit or consent of any
governmental authority, regulatory body or court, and no registration,
declaration or filing by any of the Vendors or the Company with any such
governmental authority, regulatory body or court is required in order for the
Vendors to complete the contemplated purchase and sale, to duly perform and
observe the terms and provisions of this Agreement, and to render this
Agreement legal, valid, binding and enforceable in accordance with its terms;
(k) there is no basis for and there are no actions, suits, judgments,
investigations or proceedings outstanding or pending or to the knowledge of the
Vendors threatened against or affecting the Company at law or in equity or
before or by any court or federal, state, municipal or other governmental
authority, department, commission, board, tribunal, bureau or agency;
(l) the Company has not guaranteed, or agreed to guarantee, any indebtedness or
other obligation of any person except as described in the financial statements
of the Company as presented to the Purchaser.
24. PURCHASER'S WARRANTIES AND REPRESENTATIONS
24.1 The Purchaser warrants and represents to the Vendors, with the intent that
the Vendors will rely thereon in entering into this Agreement and in concluding
the purchase and sale contemplated herein that:
(a) the Purchaser has had adequate opportunity to obtain from the Vendors such
information, in addition to the representations set forth in this Agreement, as
is necessary to evaluate the merits and risks of the Purchaser's investment in
the Company and the Purchaser has sufficient experience in business, financial
and investment matters to be able to evaluate the risks involved in the
acquisition of the Company and to make informed investment decisions with
respect to such investment;
(b) the Purchaser is a corporation duly incorporated, validly existing and in
good standing under the laws of Nevada and has the power, authority and
capacity to enter into this Agreement and to carry out its terms;
(c) the execution and delivery of this Agreement and the completion of the
transactions contemplated hereby has been duly and validly authorized by all
necessary corporate action on the part of the Purchaser, and this Agreement
constitutes a legal, valid and binding obligation of the Purchaser in
accordance with its terms except as limited by laws of general application
affecting the rights of creditors;
(d) no consent, approval, order or authorization of, or registration,
declaration or filing with, any governmental authority is required by or with
respect to Purchaser in connection with the execution and delivery of this
Agreement by the Purchaser or the consummation by the Purchaser of the
transactions contemplated hereby, except for such consents, approvals, orders,
authorizations, registrations, declarations, qualifications or filings as may
be required by the NASD and under applicable federal and state laws
with the transactions set forth herein;
(e) there is no litigation, proceeding or governmental investigation in
progress, pending, threatened or contemplated against or relating to the
Purchaser, the business of the Purchaser, or the transactions contemplated
by this Agreement;
(f) as of their respective filing dates, the Purchaser's SEC filings complied
in all material respects with the Securities Exchange Act and as of their
respective filing dates, the Purchaser's SEC filings did not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made therein, in light of the circumstances in which they were
made, not misleading;
(g) the shares of common stock of the Purchaser are quoted on the OTCBB under
the symbol "INVT";
(h) there are no orders ceasing or suspending trading in the securities of the
Purchaser and to the best of the knowledge of the Purchaser, no proceedings for
this purpose have been instituted or are pending, contemplated or threatened;
and
(i) on the Closing Date the Purchaser shall have no financial liabilities or
outstanding indebtedness other than as evidenced by its most current quarterly
financial statements as filed with the SEC.
25. COVENANTS
25.1 Between the execution date and the Closing, the Vendors:
(a) will cause the Company to afford to the Purchaser and its authorized
representatives access during normal business hours to all properties, books,
contracts, commitments, records of the Company and furnish such copies
(certified if requested) thereof and other information as the Purchaser may
reasonably request, and to permit the Purchaser and its authorized
representatives to make such audit of the books of account of the Company as
the Purchaser may reasonably see fit;
(b) will diligently take all reasonable steps to obtain, prior to the Closing
Date, all consents and approvals required to complete the transactions
contemplated herein in accordance with the terms and conditions hereof;
(c) will cause the Company to conduct its business and affairs diligently and
only in the ordinary course, and preserve and maintain the goodwill of the
Company;
(d) will cause the Company to maintain insurance coverage of the scope and in
the amounts presently held;
(e) will not permit the Company to make or agree to make any payment to any
director, officer, employee or agent of the Company except in the ordinary
course of business and at the regular rates of salary and commission for such
person or as reasonable reimbursement for expenses incurred by such person in
connection with the Company;
26. NON-MERGER
26.1 The representations, warranties, covenants and agreements of the Vendors
contained herein and those contained in the documents and instruments delivered
pursuant hereto will be true at and as of the Closing Date as though made at
the Closing Date and will survive the Closing Date for a period ending 12
months after Closing Date, and notwithstanding the completion of the
transactions herein contemplated, the waiver of any condition contained herein
(unless such waiver expressly releases the Vendors of such representation,
warranty, covenant or agreement), or any investigation by the Purchaser, the
same will remain in full force and effect for the said same 12 month period
after the Closing Date.
26.2 The representations, warranties, covenants and agreements of the Purchaser
contained herein and those contained in the documents and instruments delivered
pursuant hereto will be true at and as of the Closing Date as though made at
the Closing Date and will survive the Closing Date, for a period ending 12
months after the Closing Date and notwithstanding the completion of the
transactions herein contemplated, the waiver of any condition contained herein
(unless such waiver expressly releases the Purchaser of such representation,
warranty, covenant or agreement), or any investigation by the Vendors, the
same will remain in full force and effect for the same 12 month period after
the Closing Date.
27. CONFIDENTIALITY
27.1 Each party agrees that all information provided to it by another party
(collectively "Confidential Information") shall be held in complete confidence
by it and by its advisors and representatives and shall not, without the prior
written consent of that other party, be disclosed to any other person, nor used
for any other purpose, other than in connection with the evaluation,
negotiation and finalization of the transactions contemplated herein. However,
a party's obligation does not apply to Confidential Information:
(a) which is generally available to third parties (unless available as a result
of a breach of this Agreement);
(b) which is lawfully in the possession of a party and which was not acquired
directly or indirectly from another party; or
(c) the disclosure of which is required by any applicable law or by any
supervisory or regulatory body to whose rules a party is subject.
28. CONDITIONS PRECEDENT
28.1 The obligations of the Purchaser to consummate the transactions herein
contemplated are subject to the fulfilment of each of the following conditions
at the times stipulated:
(a) this Agreement and the purchase of the Vendors' Shares shall have been
approved by the board of directors of the Purchaser;
(b) the representations and warranties of the Vendors contained herein shall be
true and correct in all respects at and as of the Closing Date except as may be
in writing disclosed to and approved by the Purchaser;
(c) all covenants, agreements and obligations hereunder on the part of the
Vendors to be performed or complied with at or prior to the Closing Date,
including the Vendors' obligations to deliver the documents and instruments
herein provided for, shall have been performed and complied with at and as of
the Closing;
(d) between the date hereof and the Closing Date, the Company shall not have
experienced any event, circumstance or condition or have taken any action or
become subject to any action of any character adversely affecting the Company,
or as would materially reduce the value of the Company;
(e) on or before the Closing Date, no federal, state, regional or municipal
government of any country applicable to the Company and its business or any
agency thereof will have enacted any statute or regulation, announced any
policy or taken any action that will materially and adversely affect the
Company;
(f) the Purchaser is satisfied in its sole discretion as to the operations of
the Company after completion of its due diligence investigation thereof;
(g) as at the Closing Date, the Purchaser will receive the resignations of the
directors and officers of the Company as may be requested in writing, to be
effective immediately upon Closing;
(h) no action, suit or proceeding concerning the Company will be pending or
threatened by or before any court of competent jurisdiction or governmental
entity wherein an unfavourable judgment, order, decree, stipulation or
injunction would affect materially and adversely the Company, and no such
judgment, order, decree stipulation or injunction will be in effect;
28.2 The conditions set forth in Section 8.1 are for the exclusive benefit of
the Purchaser and may be waived by the Purchaser in writing in whole or in part
at any time.
28.3 The obligations of the Vendors to consummate the transactions herein
contemplated are subject to the fulfilment of each of the following conditions
at the times stipulated, that:
(a) this Agreement and the sale of the Vendors' Shares shall have been approved
by the board of directors of the Company and by the shareholders of the Company;
(b) the representations and warranties of the Purchaser contained herein shall
be true and correct in all material respects at and as of the Closing Date
except as may be in writing disclosed to and approved by the Vendors;
(c) all covenants, agreements and obligations hereunder on the part of the
Purchaser to be performed or complied with at or prior to the Closing Date,
including in particular the Purchaser's obligations to deliver the documents
and instruments herein provided for, have been performed and complied with as
at the Closing Date;
(d) between the date hereof and the Closing Date, the Purchaser shall not have
experienced any event, circumstance or condition or have taken any action or
become subject to any action of any character adversely affecting the Purchaser
or as would materially reduce the value of the Purchaser Shares;
(e) the Vendors are satisfied in their sole discretion as to the state of the
business assets and the operations of the Purchaser after completion of their
due diligence investigation thereof; and
(f) concurrent with the Closing the Purchaser shall complete the acquisition of
the remaining common shares of the Company in accordance with the terms of the
agreement between the Purchaser, the Company and the shareholders of the
Company holding such shares dated for reference the 4th day of July, 2000.
28.4 The conditions set forth in Section 8.3 are for the exclusive benefit of
the Vendors and may be waived by the Vendors in whole or in part at any time.
28.5 The respective obligations of each party to this Agreement to consummate
the transactions herein contemplated are subject to all consents, approvals,
authorizations, waivers and orders of any regulatory authorities, shareholders
or third parities required or necessary or desirable for the completion of the
transactions contemplated herein having been obtained or received by the
Company and the Purchaser.
29. TRANSACTIONS OF THE VENDORS AT THE CLOSING
29.1 At the Closing, the Vendors and the Company will execute and deliver or
cause to be executed and delivered all documents, instruments, resolutions and
share certificates as are necessary to effectively transfer and assign the
Vendors' Shares to the Purchaser, free and clear of all liens, including:
(a) certified copies of resolutions of the directors of the Company authorizing
the transfer of the Vendors' Shares and the registration of the Vendors' Shares
in the name of the Purchaser and authorizing the issue of new share
certificates representing the Vendors' Shares in the name of the Purchaser;
(b) share certificates representing the Vendors' Shares in the name of the
Vendors, duly endorsed for transfer to the Purchaser;
(c) duly issued share certificates in the name of the Purchaser representing
the Vendors' Shares;
(d) resignations in writing of any of the directors and officers and signing
officers of the Company requested by the Purchaser in writing;
(e) all corporate records and books of account of the Company including, minute
books, share register books, share certificate books and annual reports;
(f) the corporate seal of the Company;
(g) releases, in form and substance satisfactory to the Purchaser, acting
reasonably, executed by the Vendors in favour of the Company releasing the
Company from any and all manner of actions, causes of action, suits,
proceedings, debts, dues, profits, expenses, contracts, damages, claims,
demands and liabilities whatsoever, in law or equity, which the Vendors ever
had, now has, or may have against either of the Company for or by reason of any
matter, cause or thing whatsoever done or omitted to be done by the Company up
to the Closing Date other than in respect of obligations of the Company to the
Vendors arising in respect of:
(i) earned but unpaid salary and unpaid benefits for the then current pay
period; and
(ii) any obligations pursuant to indemnities granted to the Vendors by the
Company in connection with acts as a director of the Company provided that such
indemnities shall be ineffective in respect of any act or omission which would
constitute a default or breach pursuant to this Agreement or which render any
representation or warranty given hereunder untrue or inaccurate;
(h) a closing warranty and certificate from the Vendors confirming that the
conditions to be satisfied by the Vendors, unless waived, set out in Section
8.3 have been satisfied at the Closing Date and that all representations and
warranties of the Vendors contained in this Agreement are true at and as of the
Closing;
(i) an opinion of the Vendors' solicitors addressed to the Purchaser and the
Purchaser's solicitors in a form reasonably satisfactory to the Purchaser's
solicitors;
(j) all such other documents and instruments as the Purchaser's solicitors may
reasonably require.
30. TRANSACTIONS OF THE PURCHASER AT THE CLOSING
30.1 The Purchaser will deliver the following at the Closing:
(a) the Notes in the names of the Vendors or otherwise as they may so direct in
writing in the amount and on the terms as set out in Section 1.3(a) hereof;
(b) such documentation respecting the pledge of the shares of the Company and
the UCC Filings contemplated by Section 1.3(a) hereof as shall be requested by
the Vendors' solicitors;
(c) a Closing Warranty and Certificate from the Purchaser confirming that the
conditions to be satisfied by the Purchaser, unless waived, set out in Section
8.1 have been satisfied at the Closing and that all representations and
warranties of the Purchaser contained in this Agreement are true at and as of
the Closing;
(d) an opinion of the Purchaser's Solicitors addressed to the Vendors and the
Vendors' Solicitors in a form reasonably satisfactory to the Vendors'
solicitors;
(e) certified copies of the resolutions of the directors of the Purchaser
authorizing the acquisition of the Vendors' Shares; and
(f) all such other documents and instruments as the Vendors' solicitors may
reasonably require.
31. TIME OF THE ESSENCE
31.1 Time is of the essence of this Agreement.
32. FURTHER ASSURANCES
32.1 The parties will execute and deliver all such further documents and
instruments and do all such acts and things as may be reasonably necessary or
required to carry out the full intent and meaning of this Agreement and to
effect the transactions contemplated by this Agreement.
33. SUCCESSORS AND ASSIGNS
33.1 This Agreement will enure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators,
successors and permitted assigns. This Agreement may not be assigned by a
party hereto without the prior written consent of the other parties.
34. COUNTERPARTS
34.1 This Agreement may be executed in several counterparts and by fax
transmission, each of which will be deemed to be an original and all of which
will together constitute one and the same instrument.
35. NOTICE
35.1 Any notice required or permitted to be given under this Agreement will be
validly given if in writing and delivered or sent by pre-paid registered mail
or facsimile transmission, to the following addresses:
(a) If to the Vendors:
Suite 148 - 4664 Lougheed Highway
Burnaby, BC V5C 5T5
Attention: Doug Smith
(b) If to the Purchaser:
1776 Park Avenue, Unit 4
Park City, Utah
Attention: Brian Kitts
or to such other address as any party may specify in writing to the other
parties.
35.2 Any notice delivered on a business day or sent by facsimile transmission
will be deemed conclusively to have been effectively given on the date notice
was delivered or sent by facsimile transmission.
35.3 Any notice sent by prepaid registered mail will be deemed conclusively to
have been effectively given on the third business day after posting; but if at
the time of posting or between the time of posting and the third business day
thereafter there is a labour disturbance affecting postal service, then the
notice will not be effectively given until actually delivered.
36. ENTIRE AGREEMENT
36.1 This Agreement contains the sole and entire agreement between the parties
and any modifications must be in writing and signed by each party. The parties
will in good faith investigate and negotiate the most tax effective method of
carrying out the intentions of this Agreement.
37. ASSIGNMENT
37.1 The Purchaser acknowledges that the Vendors Shares may be transferred by
the Vendors prior to Closing in connection with certain tax planning and in
this regard the Purchaser hereby consents to an assignment by the Vendors of
any or all of their interests under this Agreement to one or more affiliates or
associates of the Vendors, as those terms are defined in the Company Act
(British Columbia).
38. TENDER
38.1 Tender may be made upon the Vendors or Purchaser or upon the Purchaser's
Solicitors and money may be tendered by cheque certified by a chartered bank or
by electronic wire transfer.
39. PROPER LAW
39.1 This Agreement will be governed by and construed in accordance with the
province of the laws of the Province of British Columbia and the laws of Canada
applicable therein and the parties will attorn to the Courts thereof.
IN WITNESS WHEREOF the parties have caused this Agreement to be executed and
delivered this _______ day of __________________, 2000.
ZED DATA SYSTEMS CORP.
Per:
--------------------
Authorized Signatory
INVESTAMERICA INC.
Per:
--------------------
Authorized Signatory
<PAGE>
SCHEDULE A
Vendors' Shares
---------------
Shareholders ZED Data Systems Corp.
Ewing Consulting Corp 73
Douglas Smith 38
Smith Shelf Company Number Fifteen Ltd. 408
----
519
Schedule B -- Form of Promissory Note (intentionally omitted)
Schedule C - Financial Statement (intentionally omitted)
<PAGE>
EXHIBIT 3
FORM OF PROMISSORY NOTE
PROMISSORY NOTE
---------------
US $____________ JULY 4, 2000
For Value Received, the undersigned promises to pay to (the "Holder"), at
or at such other address as the Holder may in writing advise the undersigned,
the sum of $ in lawful money of the United States of America, together with
interest on all amounts of said principal remaining unpaid hereunder from time
to time at the rate of 12% per annum, calculated from the date hereof both
before as well as after maturity and default and payable as herein set forth.
Commencing on July 31, 2000, and on the last business day of each month
thereafter the undersigned shall make equal consecutive monthly payments on
account of principal and interest each in the amount of $715,000 with the
outstanding balance of principal and interest being due and payable as at
January 31, 2001.
The attached Schedule shall, in the absence of manifest error, constitute
conclusive proof of the amounts and dates of repayment. This promissory note
and the Schedule may be introduced as evidence of the principal and interest
owing hereunder without the necessity for further proof.
The undersigned shall pay all principal and interest without set-off or
counterclaim and without deduction or withholding for or on account of any
present or future taxes, levies, imposts or other charges of any kind.
This promissory note is issued pursuant to and is subject to the terms of
an agreement between the undersigned, Zed Data Systems Corp. and certain
shareholders of Zed Data Systems Corp. dated for reference July 4, 2000 (the
"Agreement").
The undersigned waives demand, presentment, dishonour, notice of
dishonour, protest or notice of protest of this promissory note.
In the event that:
1.1 the undersigned fails to pay any instalment of principal and/or interest in
full when due and payable (including cheques returned for non-sufficient funds)
and such failure continues for a period of 5 business days;
1.2 the undersigned defaults in the performance or observation of any other
term, condition, obligation or covenant herein;
1.3 any representation or warranty made the undersigned or any of its officers
or directors in connection with the indebtedness or liability of the
undersigned to the Holder hereby secured proves to be untrue or misleading in
any material respect on the date as of which the facts set forth are stated;
1.4 any execution, sequestration, extent of any other process of any kind is
levied or enforced upon or against the assets of the undersigned or any part
thereof and remains unsatisfied for a period of 5 business days;
1.5 an order is made or a resolution is passed for the liquidation, winding-up
or dissolution of the undersigned;
1.6 the undersigned ceases or threatens to cease to carry on its business;
1.7 the undersigned consents to the appointment of a receiver or receiver and
manager of, or a receiver or receiver and manager is appointed for, its
property and assets or any substantial part thereof, whether judicially or
extra-judicially and such appointment is not stayed within 10 business days
thereafter; or
1.8 any proceeding, voluntary or involuntary, is commenced respecting the
undersigned pursuant to any statute relating to bankruptcy, insolvency or
reorganization of debts and such proceeding is not stayed within 30 business
days thereafter,
then the Holder may at its option, by notice to the undersigned, declare the
outstanding balance of the principal and interest owing hereunder to be
immediately due and payable.
All payments received by the Holder will be applied firstly in payment of
interest and secondly in reduction of principal.
The undersigned may, at any time and from time to time, prepay all or any
part of the amount owing hereunder without notice, penalty or bonus and the
undersigned shall be compelled to pay down the outstanding balance of principal
and interest under this promissory note in accordance with the terms of the
Agreement within 5 business days of the undersigned completing an equity
financing which, together with any other equity financings completed by the
undersigned after the date hereof, results in the undersigned receiving net
proceeds totalling in excess of US$1,000,000;
For the purposes of this promissory note, the term "business day" means
any day of the month other than a Saturday, Sunday or statutory or civic
holiday observed in British Columbia.
This promissory note and all disputes arising in connection therewith
shall be governed and construed in accordance with the laws of the Province of
British Columbia.
Time is of the essence of this promissory note.
IN WITNESS WHEREOF, the undersigned has executed this promissory note.
INVEST AMERICA INC.
Per:
--------------------
Authorized Signatory
<PAGE>
EXHIBIT 4
CERTIFICATE OF DESIGNATION OF SERIES
AND DETERMINATION OF RIGHTS AND PREFERENCES
OF
SERIES B CONVERTIBLE PREFERRED STOCK
OF
INVESTAMERICA, INC.
The undersigned, being the President and Secretary of InvestAmerica, Inc.,
a Nevada corporation (the "Corporation") under the provisions of Chapter 78 of
the Nevada Revised Statutes, do hereby certify that this is the Certificate of
Designation of the Corporation's Series B Convertible Preferred Stock. The
following are the resolutions as adopted by the Board of Directors of the
Corporation on June 29, 2000.
WHEREAS the Certificate of Incorporation of the Company authorizes
Preferred Stock consisting of 5,000,000 shares, par value $.001 per share,
issuable from time to time in one or more series; and
WHEREAS the Board of Directors of the Company is authorized, subject to
limitations prescribed by law and by the provisions of Article FOURTH of the
Company's Articles of Incorporation, as amended, to establish and fix the
number of shares to be included in any series of Preferred Stock and the
designation, rights, preferences, powers, restrictions and limitations of the
shares of such series; and
WHEREAS it is the desire of the Board of Directors to establish and fix
the number of shares to be included in a new series of Preferred Stock and the
designation, rights, preferences and limitations of the shares of such new
series; and
NOW, THEREFORE, BE IT RESOLVED that pursuant to Article FOURTH of the
Company's Certificate of Incorporation, as amended, there is hereby established
a new series of 50,000 shares of convertible preferred stock of the Company
(the "Series B Preferred Stock") to have the designation, rights, preferences,
powers, restrictions and limitations set forth in a supplement of Article
FOURTH as follows:
1. Dividends.
Holders of the Series B Preferred Stock shall be entitled to receive,
out of funds legally available therefor, cumulative dividends at a rate
equal to the rate of any such dividends payable in cash, property or securities
(other than payable in shares of Common Stock) payable in respect of the Common
Stock in an amount and form per share equal to the amount and form per share of
any such dividend paid with respect to such shares of Common Stock (subject to
appropriate adjustment in the event of any stock dividend, stock split,
combination or other similar recapitalization affecting the Common Stock) as if
the Series B Preferred Stock had been converted into Common Stock at the rate
computed in accordance with Section 4 below. No dividends except dividends
payable solely in shares of common Stock) may be paid on shares of Common Stock
unless the dividend required by the preceeding sentence is paid on the Series B
Preferred Stock, and there is no arrearage in dividends on the Series B
Preferred Stock.
2. Liquidation, Dissolution or Winding Up.
In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company, the holders of shares of Series B
Preferred Stock then outstanding shall be entitled to be paid out of the assets
of the Company available for distribution to its stockholders, after and
subject to the payment in full of all amounts required to be distributed to
the holders of any other class or series of stock of the Company ranking on
liquidation prior and in preference to the Series B Preferred Stock
(collectively referred to as "Senior Preferred Stock"), but before any payment
shall be made to the holders of Common Stock or any other class or series of
stock of the Company ranking inferior or junior to the Series B Preferred
Stock by reason of their ownership thereof, an amount equal to $.10 per share
of Series B Preferred Stock plus any accrued but unpaid dividends. If upon
any such liquidation, dissolution or winding up of the Company the remaining
assets of the Company available for distribution to its stockholders shall be
insufficient to pay the holders of shares of Series B Preferred Stock the full
amount to which they shall be entitled, the holders of shares of Series B
Preferred Stock and any class or series of stock (the "Preferred Stock")
ranking on liquidation on a parity with the Series B Preferred Stock shall
share ratably in any distribution of the remaining assets and funds of the
Company in proportion to the respective amounts which would otherwise be
payable in respect of the shares held by them upon such distribution if all
amounts payable on or with respect to such shares were paid in full. The
payment in full of the liquidation preference set forth in this paragraph
shall be the exclusive amount to which holders of the Series B Preferred
Stock shall be entitled to by reason of their ownership of shares of
Series B Preferred Stock in connection with the liquidation, dissolution or
winding up of the Company.
3. Voting.
(a) Each holder of outstanding shares of Series B Preferred Stock
shall be entitled to the number of votes equal to the number of whole shares of
Common Stock into which the shares of Series B Preferred Stock held by such
holder are convertible (as adjusted from time to time pursuant to Section 4
hereof), at each meeting of stockholders of the Company (and written actions of
stockholders in lieu of meetings) with respect to any and all matters presented
to the stockholders of the Company for their action or consideration. Except
as provided by law, by the provisions of Subsection 3(b) below, or by the
provisions establishing any other series of Preferred Stock, holders of Series
B Preferred Stock and of any other outstanding series of Preferred Stock shall
vote together with the holders of Common Stock as a single class.
(b) The Company shall not amend, alter or repeal preferences,
rights, powers or other terms of the Series B Preferred Stock so as to affect
adversely the Series B Preferred Stock, without the written consent or
affirmative vote of the holders of at least sixty-six and two-thirds percent
(66.6%) of the then outstanding shares of Series B Preferred Stock, given in
writing by a written consent or by vote at a meeting, consenting or voting (as
the case may be) separately as a class. For this purpose, without limiting the
generality of the foregoing, the authorization or issuance of any series of
Preferred Stock which is on a parity with or has preference or priority over
the Series B Preferred Stock as to the right to receive either dividends or
amounts distributable upon liquidation, dissolution or winding up of the
Company shall be deemed to affect adversely the Series B Preferred Stock.
4. Optional Conversion.
The holders of the Series B Preferred Stock shall have conversion
rights as follows (the "Conversion Rights"):
(a) Right to Convert. Each share of Series B Preferred Stock
shall be convertible, at the option of the holder thereof, at any time and from
time to time, into three hundred (300) fully paid and nonassessable shares of
Common Stock (the "Conversion Multiple"). The Conversion Multiple is subject
to adjustment as provided below.
In the event of a liquidation of the Company, the Conversion Rights
shall terminate at the close of business on the first full day preceding the
date fixed for the payment of any amounts distributable on liquidation to the
holders of Series B Preferred Stock.
(b) Fractional Shares. No fractional shares of Common Stock shall
be issued upon conversion of the Series B Preferred Stock. Fractional shares
that would otherwise be issuable shall be rounded upward to the nearest whole
share.
(c) Mechanics of Conversion.
(i) In order to convert shares of Series B Preferred Stock
into shares of Common Stock, the holder shall surrender the certificate or
certificates for such shares of Series B Preferred Stock at the office of the
transfer agent (or at the principal office of the Company if the Company serves
as its own transfer agent), together with written notice that such holder
elects to convert all or any number of the shares represented by such
certificate or certificates. Such notice shall state such holder's name or
the names of the nominees in which such holder wishes the certificate or
certificates for shares of Common Stock to be issued. If required by the
Company, certificates surrendered for conversion shall be endorsed or
accompanied by a written instrument or instruments of transfer, in form
satisfactory to the Company, duly executed by the registered holder or his or
its attorney duly authorized in writing. The date of receipt of such
certificates and notice by the transfer agent or the Company shall be the
conversion date ("Conversion Date"). The Company shall, as soon as
practicable after the Conversion Date, issue and deliver at such office to
such holder, or to his nominees, a certificate or certificates for the
number of shares of Common Stock to which such holder shall be entitled.
(ii) The Company shall at all times during which the Series B
Preferred Stock shall be outstanding, reserve and keep available out of its
authorized but unissued stock, for the purpose of effecting the conversion of
the Series B Preferred Stock, such number of its duly authorized shares of
Common Stock as shall from time to time be sufficient to effect the conversion
of all outstanding Series B Preferred Stock.
(iii) All shares of Series B Preferred Stock, which shall have
been surrendered for conversion as herein provided shall no longer be deemed to
be outstanding and all rights with respect to such shares, including the
rights, if any, to receive dividends, notices and to vote, shall immediately
cease and terminate on the Conversion Date, except only the right of the
holders thereof to receive shares of Common Stock in exchange therefor. All
shares of Common Stock issued upon conversion of shares of Series B Preferred
Stock shall be deemed to have been issued, for purposes of the rights to
receive dividends, notices and vote, on the Conversion Date. Any shares of
Series B Preferred Stock so converted shall be retired and canceled and shall
not be reissued, and the Company may from time to time take such appropriate
action as may be necessary to reduce the number of shares of authorized Series
B Preferred Stock accordingly.
(iv) If the conversion is in connection with an underwritten
offer of securities registered pursuant to the Securities Act of 1933, as
amended, or the entering into of a binding agreement or agreements to sell all
of the Common Stock to any person or entity, the conversion may at the option
of any holder tendering Series B Preferred Stock for conversion be conditioned
upon the closing with the underwriter or such persons or entities of the sale
of securities pursuant to such offering or purchase and sale, in which event
the person(s) entitled to receive the Common Stock issuable upon such
conversion of the Series B Preferred Stock shall not be deemed to have
converted such Series B Preferred Stock until immediately prior to the closing
of the sale of securities.
(d) Adjustment for Stock Splits and Combinations. If the Company
shall at any time or from time to time after the date on which the first share
of Series B Preferred Stock is first issued (the "Original Issue Date") effect
a subdivision of the outstanding Common Stock, the Conversion Multiple then in
effect immediately before that subdivision shall be proportionately increased.
If the Company shall at any time or from time to time after the Original Issue
Date combine the outstanding shares of Common Stock, the Conversion Multiple
then in effect immediately before the combination shall be proportionately
decreased. Any adjustment under this paragraph shall become effective at the
close of business on the date the subdivision or combination becomes effective.
(e) Adjustment for Certain Dividends and Distributions. In the
event the Company at any time, or from time to time, after the Original Issue
Date shall make or issue a dividend or other distribution payable in additional
shares of Common Stock, then and in each such event the Conversion Multiple
shall be increased as of the time of such issuance, by multiplying the
Conversion Multiple by a fraction:
(i) the numerator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior to the time of
such issuance plus the number of shares of Common Stock issuable in payment of
such dividend or distribution; and
(ii) the denominator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior to the time of
such issuance.
(f) Adjustment for Reclassification, Exchange, or Substitution.
If the Common Stock issuable upon the conversion of the Series B Preferred
Stock shall be changed into the same or a different number of shares of any
class or classes of stock, whether by capital reorganization, reclassification,
or otherwise (other than a subdivision or combination of shares or stock
dividend provided for above, or a reorganization, merger, consolidation, or
sale of assets provided for below), then and in each such event the holder of
each share of Series B Preferred Stock shall have the right thereafter to
convert such share into the kind and amount of shares of stock and other
securities and property receivable upon such reorganization, reclassification,
or other change, by holders of the number of shares of Common Stock into which
such shares of Series B Preferred Stock might have been converted immediately
prior to such reorganization, reclassification, or change, all subject to
further adjustment as provided herein.
(g) Adjustment for Merger or Reorganization, etc. In case of any
consolidation or merger of the Company with or into another corporation or the
sale of all or substantially all of the assets of the Company to another
corporation, at the option of the Company (and subject to the Company's rights
pursuant to Section 5 of this Certificate of Designation),
(i) if the surviving entity shall consent in writing to the
following provisions, then each share of Series B Preferred Stock shall
thereafter be convertible into the kind and amount of shares of stock or other
securities or property to which a holder of the number of shares of Common
Stock of the Company deliverable upon conversion of such Series B Preferred
Stock would have been entitled upon such consolidation, merger or sale; and, in
such case, appropriate adjustment (as determined in good faith by the Board of
Directors) shall be made in the application of the provisions in this Section 4
set forth with respect to the rights and interest thereafter of the holders of
the Series B Preferred Stock, to the end that the provisions set forth in this
Section 4 (including provisions with respect to changes in and other
adjustments of the Conversion Multiple) shall thereafter be applicable, as
nearly as reasonably may be, in relation to any shares of stock or other
property thereafter deliverable upon the conversion of the Series B Preferred
Stock; or
(ii) if the surviving entity shall not so consent, then each
holder of Series B Preferred Stock shall, after receipt of notice specified in
subsection (l), be deemed to convert such Stock into Common Shares as provided
in this Section 4.
(h) No Impairment. The Company will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Company, but will at all
times in good faith assist in the carrying out of all the provisions of this
Section 4 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of the
Series B Preferred Stock against impairment.
(i) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Multiple pursuant to this Section
4, the Company at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each holder, if
any, of Series B Preferred Stock a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based and shall file a copy of such certificate with its
corporate records. The Company shall, upon the written request at any time of
any holder of Series B Preferred Stock, furnish or cause to be furnished to
such holder a similar certificate setting forth (1) such adjustments and
readjustments, (2) the Conversion Multiple then in effect, and (3) the number
of shares of Common Stock and the amount, if any, of other property which then
would be received upon the conversion of Series B Preferred Stock. Despite
such adjustment or readjustment, the form of each or all Series B Preferred
Stock Certificates, if the same shall reflect the initial or any subsequent
Conversion Multiple, need not be changed in order for the adjustments or
readjustments to be valued in accordance with the provisions of this
Certificate of Designation, which shall control.
(j) Notice of Record Date. In the event:
(i) that the Company declares a dividend (or any other
distribution) on its Common Stock payable in Common Stock or other securities
of the Company;
(ii) that the Company subdivides or combines its outstanding
shares of Common Stock;
(iii) of any reclassification of the Common Stock of the
Company (other than a subdivision or combination of its outstanding shares of
Common Stock or a stock dividend or stock distribution thereon), or of any
consolidation or merger of the Company into or with another corporation, or of
the sale of all or substantially all of the assets of the Company; or
(iv) of the involuntary or voluntary dissolution, liquidation
or winding up of the Company;
then the Company shall cause to be filed at its principal office or at the
office of the transfer agent of the Series B Preferred Stock, and shall cause
to be mailed to the holders of the Series B Preferred Stock at their last
addresses as shown on the records of the Company or such transfer agent, at
least ten days prior to the record date specified in (A) below or twenty days
before the date specified in (B) below, a notice stating:
(A) the record date of such dividend, distribution,
subdivision or combination, or, if a record is not to be taken, the date as of
which the holders of Common Stock of record to be entitled to such dividend,
distribution, subdivision or combination are to be determined, or
(B) the date on which such reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up is expected
to become effective, and the date as of which it is expected that holders of
Common Stock of record shall be entitled to exchange their shares of Common
Stock for securities or other property deliverable upon such reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up.
5. Mandatory Conversion.
(a) The Company may, at its option, require all (and not less than
all) holders of shares of Series B Preferred Stock then outstanding to convert
their shares of Series B Preferred Stock into shares of Common Stock, at the
then effective conversion rate pursuant to Section 4, at any time on or after
(1) the closing of the sale of shares of Common Stock in an underwritten public
offering pursuant to an effective registration statement under the Securities
Act of 1933, as amended, other than a registration relating solely to an
employee benefit plan of the Company, resulting in at least $50,000,000 of
gross proceeds to the Company, or (2) the closing by the Company of a merger or
reorganization with another person or entity pursuant to which the Company is
not the entity surviving such merger or reorganization.
(b) All holders of record of shares of Series B Preferred Stock
then outstanding will be given at least 10 days' prior written notice of the
date fixed and the place designated for mandatory or special conversion of all
such shares of Series B Preferred Stock pursuant to this Section 5. Such notice
will be sent by first class or registered mail, postage prepaid, to each record
holder of Series B Preferred Stock at such holder's address last shown on the
records of the transfer agent for the Series B Preferred Stock (or the records
of the Company, if it serves as its own transfer agent).
This Certificate of Designation constitutes an agreement between the
Company and the holders of the Series B Preferred Stock.
The undersigned, being first duly sworn, affirm and depose and say that:
1. They are the President and Secretary of the Corporation;
2. They have been authorized to execute the certificate by
resolution of the Board of Directors of the Corporation adopted by Unanimous
Written Consent of the Board of Directors on June 29, 2000.
WE, THE UNDERSIGNED, have hereunto set our hands this 29th day of June, 2000.
Douglas Smith, President
Brian Kitts, Secretary
This instrument was acknowledged before me on June 29, 2000 by Douglas Smith
on behalf of InvestAmerica, Inc.
____________________________________
A notary Public in and for the
Province of British Columbia, Canada
My commission expires:______________
