LINE-OF-CREDIT AND INTERCOMPANY AGREEMENT
Salt Lake City, Utah
January 2, 2001
Line-of-Credit and Intercompany Agreement entered into this second day of
January, 2001 between Logio, Inc. and Pacific WebWorks, Inc. at 0000 X.
Xxxxxxx Xxx, Xxxx Xxxx Xxxx, Xxxx 00000, or such other place as designated by
Pacific WebWorks, Inc.
Whereas, Logio, Inc. is a development stage company historically engaged in
the engineering of Internet search technology and Internet directory products.
Whereas, Logio, Inc. has not commenced development or operation of its
products and services since October 2000.
Whereas, Pacific WebWorks, Inc. intends to acquire 100% of the outstanding
common stock of Logio, Inc. in an arms-length transaction.
Whereas, Pacific WebWorks, Inc, after the acquisition of Logio is complete and
when feasible, intends to assist Logio, Inc. in the further development of its
products and services and to integrate such products and services into Pacific
WebWorks products and services.
Logio, Inc. and Pacific WebWorks hereby enter into this Line-of-Credit and
Intercompany agreement:
A. Line-of-Credit
Pacific WebWorks will lend Logio, Inc. up to $120,000 as needed to fund the
payroll of remaining Logio administrative employees and Logio payment
requirements for certain capital leases and other payments as determined by
Logio management until the proposed acquisition is complete. Amounts
forwarded to Logio, Inc. from Pacific WebWorks shall constitute a
Line-of-Credit which shall possess the following terms and conditions:
1. Interest
The Line-of-Credit shall bear interest at a rate equal to twelve percent
(12%) of the outstanding balance per annum and shall accrue monthly.
2. Maturity
The Line-of-Credit balance and related interest is payable upon demand.
Should the proposed acquisition of Logio, Inc. common stock be terminated
or incomplete by February 28, 2001, the Line-of-Credit shall become
immediately due and payable to Pacific WebWorks through whatever means
possible.
2. Maturity - Continued
OR should Logio, Inc. become unable to recommence development and
operations within 250 days of the signing of this agreement, the
Line-of-Credit shall become immediately due and payable to Pacific
WebWorks through whatever means possible.
3. Collateral
This Line-of-Credit is secured by business assets of Logio, Inc.,
including all property and equipment, intellectual technologies,
proprietary source codes and other intangible assets. Pacific WebWorks,
Inc. at its option will file UCC-1 documents with the state of Utah on
the above assets.
4. Late Charge
Should any payment under this Line-of-Credit be unpaid when due, the
outstanding balance of this Line-of-Credit shall be immediately due and
such unpaid amounts shall bear interest from the date thereof until the
date of such payment at a rate per annum equal to sixteen percent (16%).
5. Right to Offset
Logio, Inc. and Pacific WebWorks, Inc. have the right to offset other
transactions between the two entities against this Line-of-Credit.
B. Intercompany Management Fees
Should the acquisition of Logio, Inc. by Pacific WebWorks Inc. be completed,
and commencing on the last day of the first month in which Logio is a 100%
wholly owned subsidiary by Pacific WebWorks, Logio, Inc. will pay Pacific
WebWorks, Inc. the sum of $1,067 per month for Management Fees consisting of
accounting, financial reporting, and management services rendered by Pacific
WebWorks' personnel. These Management Fees shall be due on the last day of
each month thereafter. Amounts due for Management fees may be included as an
increase to the Line-of-Credit
C. Intercompany Engineering Consulting Fees
Pacific WebWorks, while under period of due diligence and post acquisition,
may, at Logio's discretion, lease engineering staff for the re-commencement of
development of Logio products at rates totaling $130 per hour. Such leasing
of Pacific WebWorks engineering staff shall constitute Engineering Consulting
Fees and will be due and payable upon receipt of invoice by Logio, Inc. from
Pacific WebWorks, Inc. Amounts due for Engineering Consulting Fees may be
included as an increase to the Line-of-Credit.
D. Intercompany Equipment Rental Fees
Pacific WebWorks, immediately subsequent to the completion of its proposed
acquisition of Logio, Inc. common stock, may, at its discretion, utilize and
rent some or all of Logio, Inc. property and equipment including, but not
limited to:
1. Office Furniture and Accessories
2. Laptops, Personal Computers, Monitors and Accessories
3. Software Licenses and Related Assets
4. Operating and Development Hardware and Equipment
5. Telecommunications and Network Equipment and Accessories
6. Other Miscellaneous Assets
Pacific WebWorks shall not, for any reason, utilize or rent any assets under
capital leases that do not provide under the lease agreements for sublease
provisions.
Equipment Rental Fees shall commence on the last day of the first month of
equipment use and shall total $1,422 per month. Rental Fee payments shall be
due and payable on the last day of each month thereafter. Rental of Logio
equipment by Pacific WebWorks is on a month-to-month basis. Rental fees owed
to Logio by Pacific WebWorks may be offset against the line-of-credit balance
due.
At such time as Logio re-commences development of its Internet products, and
at such time as Logio determines that property and equipment used and rented
by Pacific WebWorks is required to further its development and operations,
Logio will provide Pacific WebWorks with reasonable written notice of rent
cancellation and Pacific WebWorks will return the use of the equipment to
Logio within three weeks of receipt of such notice.
E. This Line-of-Credit and Intercompany Agreement shall inure to the benefit
of and shall be binding upon respective successors and assigns of Logio,
Inc and Pacific WebWorks, Inc.
F. This Line-of-Credit and Intercompany Agreement shall be construed in
accordance with the laws of the State of Utah.
G. This Line-of Credit is secured with the business assets of Logio, Inc.
H. There are no personal guarantees by any officer or director of Logio, Inc.
or Pacific WebWorks, Inc. pertaining to this Line-of-Credit and
Intercompany Agreement.
I. Logio, Inc. jointly and severally, represents, warrants and covenants to
Pacific WebWorks, Inc. that: (i) this Line-of-Credit and Intercompany
Agreement is the legal, valid and binding obligation of Logio, Inc.,
enforceable against Logio, Inc. in accordance with its respective terms;
(ii) this Note is not subject to any right of rescission, counterclaim or
defense, and no claim of any such right has been asserted with respect
thereto; (iii) this Line-of-Credit and Intercompany Agreement will not,
with or without the giving of notice or lapse of time or both, violate or
conflict with, result in a breach of, or constitute a default under, any
agreement, contract, lease, license, instrument, or other arrangement to
which Logio, Inc. is a party, or by which Logio, Inc. is bound; (iv) the
execution and delivery of this note and security and Logio, Inc.'s
performance of the obligations hereunder shall not require any consents or
approvals of any third persons; and (v) the individual executing this
Line-of-Credit and Intercompany Agreement has full power and authority to
execute and deliver this Line-of-Credit and Intercompany Agreement and the
collateral pledged as security heretofore.
BY:
Logio, Inc. a development stage Nevada Corp.
/s/ Xxxxxxx X. Xxxx
___________________________
Xxxxxxx X. Xxxx
Chief Executive Officer
AND
Pacific WebWorks, Inc. a Nevada Corp.
/s/ Xxxxxxxxx Xxxxxx
__________________
Xxxxxxxxx Xxxxxx
President
