EXCHANGE AGREEMENT
THIS AGREEMENT is made effective as of the 1st day of October,
1997, between GALAXY MALL, INC., a Wyoming Corporation with a
principal place of business at 0000 Xxxxx Xxxxxx Xxxx, Xxxxx 000,
Xxxxx, Xxxx 00000, (hereinafter referred to as GALAXY), and PROFIT
EDUCATION SYSTEMS, INC., a Wyoming Corporation with a principal
place of business at 0000 Xxxxx Xxxxxx Xxxx, Xxxxx 000, Xxxxx, Xxxx
00000, (hereinafter referred to as PES).
WITNESSETH
WHEREAS GALAXY, is in the business of providing electronic
storefronts, Internet hosting and related services via an
electronic mall on the World Wide Web known as "Galaxy Mall"; and
WHEREAS PES is in the business of promoting and conducting
Internet Marketing workshops; and
WHEREAS GALAXY desires to purchase the business and all
related marketing programs from PES for storefronts and advertising
on the Galaxy Mall; and
WHEREAS PES desires to sell or transfer ownership to GALAXY
for said marketing programs and their related income opportunities;
and
WHEREAS GALAXY and PES are willing to enter into an exclusive
exchange and royalty agreement pursuant to the terms hereof.
NOW, THEREFORE, in consideration of the promises and other
good and valuable consideration, the receipt and sufficiency of
which the parties hereto acknowledge, the parties agree to, and
hereby agree as follows:
1. EXCHANGE AND TRANSFER TERMS: The transfer of the marketing
business shall be done on an assumption of debt and any and all
ongoing liabilities of PES.
A. GALAXY carries on its books a receivable from PES in the
amount of approximately $450,000 more or less. This receivable in
its entire amount from PES is hereby canceled or forgiven.
B. PES currently has outstanding payables of approximately
$500,000 which are hereby assumed by GALAXY, and which will be paid
from either profits from GALAXY or equity financing to be arranged
in the future by GALAXY.
C. PES currently has approximately $100,000 more or less in
pre-paid marketing costs along with computers, office equipment,
merchant account deposits, and other related inventory and
miscellaneous assets of approximately $150,000 more or less. These
assets are hereby transferred to GALAXY.
2. ASSUMPTION OF LEASES, SPEAKING FEES, AND COMPANY
OBLIGATIONS: GALAXY hereby agrees to assume full and complete
responsibility for the payment of all sums due or that may become
due in the future for such items as:
A. Long term lease on 2 high speed printers for marketing and
promotion materials.
B. Assumption of all telecommunication, phone, Internet
connection, rent and related lease or payment obligations.
C. PES has in place speakers, presenters, and staff for
Internet conferences and workshops. GALAXY hereby assumes the
obligation of making such individuals either GALAXY employees or
recognizing them as independent contractors providing services for
GALAXY.
3. CANCELLATION OF PREVIOUS EXCLUSIVE MARKETING AGREEMENT.
GALAXY and PES hereby terminate the prior exclusive marketing
agreement dated August 1, 1996 between the two parties in which PES
agreed to provide marketing services for GALAXY in return for
ninety percent (90%) of the gross receipts from all GALAXY or
Galaxy Mall Internet training events. From this date forward GALAXY
assumes all responsibility for marketing its Internet training
events and for providing customer service for same. Customer
service for said Internet Training events was to be provided under
contract with PES and COOP Communications. PES hereby releases
GALAXY from said contractual obligation with the express
understanding that by separate agreement the existing customer
service business provided by COOP Communications will be
transferred to GALAXY.
4. BENEFICIAL INTERESTS. GALAXY and PES understand and recognize
that Xxxx X. Xxxxxxx, is a stockholders of both GALAXY and PES.
5. TERM OF THIS AGREEMENT. This Agreement will remain in effect in
perpetuity.
6. ASSIGNMENT. PES and GALAXY agree that this Agreement may only be
assigned to another party if said assignment does not injure the
non assigning party.
7. COMPLIANCE WITH LAWS. GALAXY and PES shall conduct and maintain,
at all times, its activities and business operations in strict
compliance with all federal and state laws as applicable hereto.
8. NOTICES. All notices, requests, demands, and other
communications under this Agreement shall be in writing and shall
be deemed to have been duly given on the date of service if served
personally on the party to whom notice is to be given, or on the
third day after mailing, if mailed to the party to whom notice is
to be given, by first-class, registered or certified mail,
postage prepaid, and unless either party should notify the other
party in writing of a change of address, properly addressed, as
follows:
To: GALAXY Attention: Xxxxxxx Xxxxx
Chief Operating Officer
Galaxy Mall, Inc.
0000 X. Xxxxxx Xxxx, Xxxxx 000
Xxxxx, XX 00000
To: PES Attention: Xxxx X. Xxxxxxx
President
Profit Education Systems, Inc.
0000 X. Xxxxxx Xxxx, Xxxxx 000
Xxxxx, XX 00000
9. ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the parties. It may not be changed orally, but
only by an agreement in writing signed by the party against whom
enforcement of any waiver, change, modification, extension, or
discharge is sought.
10. SUCCESSION. This Agreement shall inure to the benefit and be
binding upon the parties hereto and upon their assignees and
successors in interest of any kind whatsoever.
11. SECTION HEADINGS. The section headings herein have been
inserted for convenience only and shall not be deemed to limit or
otherwise affect the construction of any provision herein.
12. SITUS. This Agreement shall be governed by the laws of the
state of Utah.
13. ATTORNEY'S FEES. In the event of a breach of this Agreement,
the breaching party shall pay to the enforcing party all
reasonable costs of enforcement, with or without suit, including
a reasonable attorney's fee, together with such other legal costs
as may be authorized by law.
14. SEVERABILITY. In the event any section, paragraph, or portion
of this Agreement shall be deemed to be by any court having
lawful jurisdiction of the subject matter of this Agreement
void, voidable, or invalid for any reason, this Agreement shall
be otherwise valid, and enforceable as if said void, voidable, or
invalid article, section, paragraph, or portion of this Agreement
had not been a part hereof in the first instance.
15. AUTHORITY TO BIND. Each person executing this Agreement
hereby warrants that he has full and legal authority to execute
this Agreement for and on behalf of the respective parties,
and no further approval or consent of any other person is
necessary in connection therewith. Further, each person
executing this Agreement covenants and represents that the
execution of this Agreement is not in contravention of and will
not result in a breach of any other agreement, contract,
instrument, order, judgement or decree to which such person is a
party.
16. COUNTERPARTS. This Agreement may be executed in duplicate
originals, each of which shall be considered an original. For
purposes of this section 16, facsimile copies of this Agreement
executed and transmitted by a party shall be binding against such
party as an original thereof.
17. CONFIDENTIALITY. The parties agree that the terms of this
Agreement shall remain confidential and shall not be publicized
nor disclosed, other than to management without the prior written
consent of the non-disclosing party.
IN WITNESS WHEREOF, the parties hereto this 15th day of August,
1997 have hereunto set their hands and seals effective the day
and year first written above.
GALAXY MALL, INC.
BY:/S/Xxxxxxx Xxxxx, Chief
Operating Officer
PROFIT EDUCATION SYSTEMS, INC.
BY:/S/Xxxx X. Xxxxxxx, President
