Exhibit 10.47
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AMENDMENT TO AGREEMENT
This Amendment to Agreement (the "Agreement") is effective as of May 31,
2000, and is by and among ZiaSun Technologies, Inc., a Nevada Corporation,
(hereinafter referred to as the "ZiaSun"), Online Investors Advantage
Incorporation, a Utah corporation ("OIA"), and D. Scott Elder, Ross W. Jardine,
David McCoy and Scott Harris, (hereinafter collectively referred to as the
"Shareholders").
RECITALS
A. Whereas, on March 31, 1999, ZiaSun and the Shareholders entered into
that certain Acquisition Agreement and Plan of Reorganization (the "Acquisition
Agreement') under which ZiaSun would acquire in a stock for stock exchange all
of the capital stock of OIA. All of the capital stock of OIA was owned by the
Shareholders as of that date.
B. Whereas, pursuant to the terms of the Acquisition Agreement, in exchange
for all of the capital stock of OIA owned by the Shareholders, the Shareholders
were to receive total Acquisition Consideration from ZiaSun of:
(a) Cash in the amount of $400,000 distributed pro rata to the OIA
Shareholders; and
(b) 6,000,000 (post-split adjusted) shares of the previously
authorized but unissued unregistered and restricted shares of the
Common Stock of ZiaSun based on anticipated earnings of OIA of
$2,500,000 for the period from April 1, 1999 through March 31,
2000.
C. Whereas, pursuant paragraph 1.3 of the Acquisition Agreement, the OIA
shareholders received cash of $400,000 and 1,000,000 (post-split adjusted)
shares of the Common Stock of ZiaSun at closing on April 7, 1999, with the
balance of 5,000,000 (post-split adjusted) shares to be held in escrow pursuant
to paragraph 1.4 of the Acquisition Agreement.
D. Whereas, paragraph 1.5 of the Acquisition Agreement provides for the
Calculation of the Actual OIA Earnings and provides that Actual OIA Earnings for
the earnings period shall be calculated based on EBITDA determine in accordance
with general accepted accounting principals. Actual OIA Earnings shall mean the
total gross sales of OIA less the costs of sales, less general administrative
expenses before interest, taxes, depreciation and amortization.
E. Whereas, paragraph 1.6 of the Acquisition Agreement provided that
adjustments based on the Actual OIA Earnings shall be made as follows:
(a) Reduction Adjustment. In the event that the Actual OIA Earnings
are less than $2,500,000, then the total number of Escrow Shares shall be
reduced on a one share basis for each $1.00 (i.e. 1 share basis for each
$0.50 on a post-split adjusted basis) of Actual OIA Earning less than
$2,500,000.
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(b) Increase Adjustment. In the event that the Actual OIA Earnings are
greater than $2,500,000, then ZiaSun shall issue a such additional shares
on the basis of one additional shares for each $1.00 (i.e. 1 share basis
for each $0.50 on a post-split adjusted basis) of Actual Online Earning
greater than $2,500,000.
F. Whereas, following the end of the earnings period as provided in the
Acquisition Agreement, OIA's audited EBITDA earnings for the period from April
1, 1999 through March 31, 2000 was $10,910,076. Accordingly, pursuant to the
terms of the Acquisition Agreement, ZiaSun would owe 21,820,152 (post-split
adjusted) shares of its common stock at March 31, 2000 to the Shareholders. The
value of these shares at March 31 was $248,204,230 which would have been added
to the goodwill on the Company's balance sheet.
G. Whereas, at the request of the Shareholders and their joint recognition
that it would clearly not be in the best interests of ZiaSun to have such a
large goodwill burden going forward, the Shareholders inquired if ZiaSun would
consider an amendment to the original terms and conditions of the Acquisition
Agreement and the earn out. The Shareholders proposed to exchange 12,000,000 of
the (post-split adjusted) shares they were to receive pursuant to the terms of
the Acquisition Agreement, for $6,000,000 in cash.
H. Whereas, pursuant to the proposed amendment, the Shareholders would
receive $6,000,000 in cash and 9,820,152 (post-split adjusted) shares of
ZiaSun's common stock rather than 21,820,152 (post-split adjusted) shares of
ZiaSun's common stock.
I. Whereas, the proposal was reviewed and accepted by ZiaSun on May 9,
2000.
J. Whereas, ZiaSun and the Shareholders now desire to memorialize the
Amendment to the Acquisition Agreement as set forth above.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, ZiaSun and the
Shareholders hereby agree as follows:
AGREEMENTS
1. OIA EBITDA Earnings. ZiaSun and the Shareholders agree that the actual
audited OIA EBITDA earnings for the period April 1, 1999 through March 31, 2000
were $10,910,076, which would have resulted in 21,820,152 (post-split adjusted)
shares of ZiaSun's common stock being issued to the Shareholders pursuant to the
terms of the Acquisition Agreement prior to this amendment.
2. Amendment to Agreement. The Shareholders and ZiaSun hereby agree that
the terms of the Acquisition Agreement are amended and modified to reflect that
in lieu of the 21,820,152 (post-split adjusted) shares of ZiaSun common stock
which the Shareholders would have received pursuant to the terms of the
Acquisition Agreement, the Shareholders shall receive, in addition to the
initial consideration received at the closing, as full, complete and final
consideration for all of their capital stock of OIA, the following:
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(a) $6,000,000 in cash which, as of the date of this Agreement has
been distributed to the Shareholders as follows:
Shareholder Name $ Amount
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Ross Jardine $2,100,000
D. Scott Elder $2,100,000
David McCoy $ 900,000
Scott Harris $ 900,000
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Total $6,000,000
(b) 9,820,152 shares of unregistered and restricted shares of the
Common Stock of ZiaSun, consisting of (i) 2,500,000 shares resulting from
the 2-for-1 forward split which have previously been delivered to the
Shareholders by the transfer agent, (ii) 2,500,000 (post-split adjusted)
shares which are being held in escrow pursuant to paragraph 1.4 of the
Acquisition Agreement, and (iii) 4,820,152 restricted shares to be issued
and delivered pursuant to section 3(b) below.
3. Delivery of Shares. Within fifteen (15) days of the execution of this
Agreement, ZiaSun shall deliver to the Shareholders the following:
(a) The 2,500,000 restricted shares of common stock being held in
escrow pursuant to paragraph 1.4 of the Acquisition Agreement as follows:
Shareholder Name Shares
-------------------------------------------------
Ross Jardine 875,000
D. Scott Elder 875,000
David McCoy 375,000
Scott Harris 375,000
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Total 2,500,000
(b) 4,820,152 restricted shares as follows:
Shareholder Name Shares
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Ross Jardine 1,687,053
D. Scott Elder 1,687,053
David McCoy 723,023
Scott Harris 723,023
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Total 4,820,152
4. All other terms and conditions of the Acquisition Agreement shall remain
in full force and effect.
5. Entire Agreement. This Agreement contain the entire agreement between
the parties relating to the subject matter contained in this Agreement. All
prior or contemporaneous agreements, representations or warranties, written or
oral, between the parties are superseded by this Agreement. This Agreement may
not be modified except by written document signed by an authorized
representative of each party. In the event that any part of this Agreement is
found to be unenforceable, the remainder shall continue in effect, to the extent
consistent with the intent of the parties as of the effective date of this
Agreement.
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6. No Oral Change. This Agreement and any provision hereof may not be
waived, changed, modified or discharged orally, but only by an agreement in
writing signed by the party against whom enforcement of any such waiver, change,
modification or discharge is sought.
7. Non-Waiver. The failure of any party to insist in any one or more cases
upon the performance of any of the provisions, covenants or conditions of this
Agreement or to exercise any option herein contained shall not be construed as a
waiver or relinquishment for the future of any such provisions, covenants or
conditions. No waiver by any party of one breach by another party shall be
construed as a waiver with respect to any subsequent breach.
8. Choice of Law. This Agreement and its application shall be governed by
the laws of the State of California.
9. Counterparts and/or Facsimile Signature. This Agreement may be executed
in any number of counterparts, including counterparts transmitted by telecopier
or FAX, any one of which shall constitute an original of this Agreement. When
counterparts of facsimile copies have been executed by all parties, they shall
have the same effect as if the signatures to each counterpart or copy were upon
the same document and copies of such documents shall be deemed valid as
originals. The parties agree that all such signatures may be transferred to a
single document upon the request of any party.
10. Binding Effect. This Agreement shall inure to and be binding upon the
heirs, executors, personal representatives, successors and assigns of each of
the parties to this Agreement.
ZIASUN TECHNOLOGIES, INC.
A Nevada Corporation
Dated: June 6, 2000 /S/ Allen D. Hardman
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By: Allen D. Hardman
Its: President and CEO
Dated: June 7, 2000 /S/ Dennis Mcgrory
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By: Dennis McGrory
Its: Secretary
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ONLINE INVESTORS ADVANTAGE, INC.
A Utah Corporation
Dated: June 10, 2000 /S/ D. Scott Elder
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By: D. Scott Elder
Its: Chief Executive Officer
Dated: June 10, 2000 /S/ David W. McCoy
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By: David McCoy
Its: Secretary
SHAREHOLDERS
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D. Scott Elder David McCoy
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Ross Jardine Scott Harris
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