Purchase Agreement
This Agreement (Agreement) is made and entered into this 22nd day of
February, 2000 by and between Pacific WebWorks, Inc. (Pacific), a Utah
corporation with offices located at 000 X. 000 Xxxx, #000, XXX, Xxxx 00000 and
U.S. Merchant Systems, Inc. (Merchant), a California corporation with offices
located at 00000 Xxxxxxxxx Xxxxx, #000, Xxxxxx, XX 00000. Pacific and
Merchant are collectively referred to as (Members).
RECITALS
WHEREAS, Pacific and Merchant are members of World Commerce Network,
(WCN), a Utah limited liability company, with each party owning an equal
interest in the profits and losses of WCN, and
WHEREAS, Pacific desires to acquire a 1 percent interest in the capital
and profits and losses of WCN (Interest) from Merchant.
WHEREAS, Merchant is willing to sell said Interest to Pacific in exchange
for certain of Pacific's unregistered stock (Stock) on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration for ten dollars and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties mutually agree as follows:
1. Asset Sold: Merchant does hereby sell, assign, transfer and convey
good and marketable title to a 1 percent interest in the capital and profits
and losses of WCN (Interest) to Pacific. Merchant represents and warrants
that Merchant is authorized to sell said Interest to Pacific and that said
Interest will be free from any liens, encumbrances, mortgages, security
interests or other rights in any third party.
2. Purchase Price: In consideration for the purchase of the Interest,
Pacific agrees to convey to Merchant 4,663 shares of Pacific's unregistered
stock (Stock), which constitutes stock subject to Rule 144 of the Securities
and Exchange Commission (SEC). The parties further agree that the value of
the
Interest and the value of the Stock are $9,180 as of the date of this
Agreement.
3. LLC Amend: The parties agree that this Purchase Agreement will
constitute an amendment to the Articles of Organization (Articles) and the
Operating Agreement (Operating Agreement) of WCN. Nevertheless, the parties
agree to execute a more formal amendment to said Articles and Operating
Agreement to reflect this transaction. In addition, the parties agree and the
Articles and Operating Agreement will be amended to reflect the following:
1. Xxxx Xxxxxx and Xxxxx Xxxxxxxxxx will be comanagers (Managers)
of WCN. Both Members must agree in writing to change the managers of WCN.
2. WCN will have a board of directors consisting of 2
representatives from each Member. Members will have equal rights for voting.
Managers must concur on decision-making. Any decision that cannot be agreed
upon will be submitted to the board for final decision. In the event of a tie
the parties will select an agreed upon arbitrator.
3. WCN will sell the products of both Pacific and Merchants through
seminars (Seminars) conducted by an organization known as Professional
Seminars (Professional) or such other organization as the Members shall
designate. The Seminars involve the following:
1. Scheduling conference rooms
2. Mailing advertisements
3. Enrolling attendees
4. Arranging speakers
5. Handling other activities relating to the Seminar
4. Under the direction of Managers, Merchant will be responsible
for the following:
1. To oversee the relationship with Professional on behalf of
WCN.
2. To timely pay sums due Productive from Merchant funds as
they become due. This includes but is not limited to related costs such as
overhead, marketing, and production.
3. To manage the relationship with other venders providing
products for the Seminars. These products include, but are not limited, the
following:
(1) Seminar materials
(2) Shirts & Bags
(3) Coffee Mugs
(4) Banners
(5) Other necessary or desirable items
4. To invoice WCN as needed for Merchant out of pocket expenses
paid to Professional and all third parties supplying products for the
Seminars. Merchant will not xxxx for any of its overhead or administrative
costs in performing services on behalf of WCN without first obtaining
Pacific's prior written consent.
4. SEC Requirements: The parties agree to comply with all requirements
of the SEC and the California securities laws as they relate to this
transaction. In this regard, Merchant represents the following to Pacific,
to-wit:
1. The Stock which is being acquired by Merchant is being acquired
for Merchants own account for investment purposes only and not with a view to,
or for sale in connection with, any distribution thereof, nor with any present
intention of distributing, selling or otherwise disposing of any of the Stock.
2. To the extent requested, Merchant has had an opportunity to
study, review and examine all of the books, records, contracts and other
documents of the Pacific and to question representatives of Pacific as to
their questions regarding the business and assets of Pacific.
3. Merchant and their representatives are sufficiently experienced
in business, financial and investment matters and Merchant and their
representatives are capable of utilizing the information described
above and of evaluating the risks of the purchase and of making an informed
investment decision relative to such purchase.
4. Merchant represents that their total assets are in excess of
Sixty Million Dollars and that Merchant is financially able to bear the
economic risk relating to the acquisition of the Stock.
5. Xxx Xxxxxxxxx, the President and Chief Executive Officer of
Merchant and Xxxxxxxxx Xxxxxx, the President and Chief Executive Officer of
Pacific have known each other since 1997 as which time they discussed
developing a future business relationship between their respective companies.
6. The offer and sale of the Stock were not accomplished by the
publication of any advertisement.
5. Stock Legend: The following legend on each stock certificate of
Pacific which may be issued to Merchant pursuant to the terms of this
Agreement:
The Stock represented by this certificate has not
been registered under the Securities Act of 1933,
as amended. These shares have been acquired for
investment only and may not be sold, distributed,
or otherwise disposed of in the absence of:
(a) an effective registration statement for
the shares under the Securities Act of 1933,
as amended;
or
(b) a previously presented opinion of counsel
satisfactory to Pacific that registration is
not required under said Act.
Any stock certificate issued at any time in exchange or substitution for
any certificate bearing such legend shall
also bear such legend, unless in the opinion of counsel to Pacific the shares
of Stock represented thereby need no longer be subject to the restrictions
contained in this paragraph.
6. Notice: All demands and notices to be given hereunder, if any,
shall be personally delivered or sent by registered mail addressed to the
respective parties at their postal addresses as of the date of this Agreement
or to such other address as each may hereafter designate in writing.
7. Entire Agreement: This Agreement constitutes the entire agreement
and understanding between the parties and supersedes all prior agreements or
understandings with respect to the subject matter of this Agreement.
8. Amendment: This Agreement may not be altered or amended except by a
subsequent written agreement executed by all of the parties hereto.
9. Attorneys Fees: In the event of any controversy or claim or dispute
between the parties hereto arising out of or relating to this Agreement or any
of the documents provided for herein, or the breach thereof, the prevailing
party shall be entitled to recover from the losing party reasonable attorneys'
fees, expenses and costs, whether incurred prior to, during or subsequent to
trial including appeals.
10. Additional Documents: The parties hereto agree to execute such
additional documents as may be necessary or desirable to carry out the intent
of this Agreement.
11. Nonwaiver: The failure of any party to enforce the provisions of
this Agreement shall not constitute a waiver unless specifically stated in
writing, signed by the party whose rights are deemed waived, regardless of a
party's knowledge of a breach hereunder.
12. Severability: If any of the terms and conditions of this Agreement
shall be declared invalid by a court, agency, commission or other tribunal or
entity having jurisdiction thereof, the application of such
provisions to parties or circumstances other than those as to which it is held
invalid or unenforceable shall not be affected thereby, and each of them not
so declared invalid or unenforceable shall be valid and be enforced to the
fullest extent permitted by law and the rights and obligations of the parties
shall be reasonable terms consistent with the undertakings of the parties
under this Agreement has been substituted in place of the invalid provision.
13. Paragraph Headings: Paragraph headings in this Agreement are for
convenience only and shall not be deemed to modify, interpret or limit the
provisions hereof.
14. Counterparts: This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall be deemed to be one and the same instrument.
15. Authorization: The individuals who have signed this Agreement
represent and warrant that they are duly authorized to execute this Agreement,
in either their individual or representative capacity as indicated, and that
this Agreement has been approved by the bylaws or the board of directors of
the entity on whose behalf they are signing and that this Agreement is
enforceable according to its terms.
16. Equitable Remedies: It is further agreed that any breach or
evasion of any of the terms of this Agreement by either party hereto will
result in immediate and irreparable injury to the other party and will
authorize recourse to injunction and/or specific performance as well as to any
other legal or equitable remedies to which such injured party may be entitled
hereunder.
17. Assignment: No interests or obligations under this Agreement are
assignable without the written consent of all parties. If such consent is
given, no assignment shall relieve any party from the performance of all of
the covenants and conditions set forth herein.
18. Survival: The provisions, promises, warranties, representations,
and covenants set forth herein shall survive any execution, settlement,
delivery or recording of any instrument and shall not be merged therein.
19. Limitation of Warranties: It is expressly understood and agreed
between the parties hereto that there are no warranties, representations,
covenants, or agreements between, the parties hereto except as specifically
set forth herein.
20. Arbitration: Any disputes which may arise under this Agreement
shall be resolved through arbitration in accordance with the applicable rules
of the American Arbitration Association ("AAA"). The AAA shall select one
arbitrator. Member submitting a claim to arbitration agrees to submit to an
arbitrator located in the jurisdiction of the other Member. Both Members must
agree on the arbitrator. Each party shall pay for their own costs involved in
calling witnesses and preparing for the arbitration hearing. The fees and the
expenses of the arbitrator and the fees paid to the AAA shall be allocated
equally between the parties. Any arbitration decision may be entered as a
judgment in any court of competent jurisdiction. The decision of the
arbitrator shall become final and binding upon the parties. The arbitrator is
empowered to award whatever relief would be available under Utah law which
shall apply to this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year above indicated.
PACIFIC WEBWORKS, INC.
/s/ Xxxxxxxxx Xxxxxx
_______________________________
Authorized Officer
U. S. MERCHANT SYSTEMS, INC.
/s/ Xxxxxx Xxxxxxxxx
_____________________________
Authorized Officer
