AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Plan") is made this 31st day
of October, 2000, among Pacific WebWorks, Inc., a Nevada corporation
("Pacific"); Logio, Inc., a Nevada corporation, any and all of its
subsidiaries (hereinafter collectively referred to as "Logio"). and its
shareholders (hereinafter "Shareholders").
WHEREAS, the Board of Directors of Pacific and Logio have unanimously
approved the acquisition of Logio by Pacific;
WHEREAS, this Plan is contingent upon approval of a majority of the Logio
Shareholders and such Shareholders by their approval agree to exchange Logio
shares in accordance with the terms of this Plan; and
WHEREAS, this Plan is contingent upon registration of the common shares
to be issued in the exchange pursuant to the Securities Act of 1933. Pacific
WebWorks agrees to file a registration statement of Form S-4 as soon as
possible upon the execution of this Plan.
Pacific wishes to acquire all the issued and outstanding stock of Logio
for and in exchange for stock of Pacific, in a stock for stock transaction
intending to qualify as a tax-free exchange pursuant to Sectin 368(a)(1)(B)
of the Internal Revenue Code of 1986, as amended. The parties intend for this
Plan to represent the terms and conditions of such tax-free reorganization,
which Plan the parties hereby adopt.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, IT IS AGREED:
Section 1
Terms of Exchange
1.1 Number of Shares. Upon the execution hereof and approval by a
majority of the Logio shareholders the Shareholders of Logio agree to assign,
transfer, and deliver to Pacific, free and clear of all liens, pledges,
encumbrances, charges, restrictions or known claims of any kind, nature or
description, approximately 18,425,830 shares of Logio common stock which
represents 100% of the issued and outstanding stock of Logio, in exchange for
2,800,000 common shares of Pacific's stock, par value $.001 subject to the
provisions of this Plan. Subsequent to the date hereof, the Shareholders
shall surrender all the Logio certificates to Pacific. Upon the consummation
of the transaction contemplated herein, Logio shall be a wholly owned
subsidiary of Pacific.
1.2 Anti-Dilution. For all relevant purposes of this Plan, the number
of Pacific shares to be issued and delivered pursuant to this Plan, shall be
appropriately adjusted to take into account any stock split, stock dividend,
reverse stock split, recapitalization, or similar change in Pacific common
stock, which may occur between the date of the execution of this Plan and the
date of the delivery of such shares.
1.3 Further Assurances. Subsequent to the execution hereof, and from
time to time thereafter, the Shareholders shall execute such additional
instruments and take such other action as Pacific may reasonably request in
order to more effectively sell, transfer and assign clear title and ownership
in the Logio Shares to Pacific.
Section 2
Closing Events
2.1 Execution of Plan. The execution of the Plan shall be completed at
the law office of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, 525 South 300 East, Salt Lake City, Utah
on or before November 15, 2000 or at such other time or place as may be
mutually agreed upon by the parties. The execution may also be accomplished
by wire, express mail or other courier service, conference telephone
communications or as otherwise agreed by the respective parties or their duly
authorized representatives. Upon the execution of the Plan, each of the
respective parties hereto shall execute, acknowledge and deliver (or shall
cause to be executed, acknowledged, and delivered) any agreements,
resolutions, rulings, or other instruments required by this Plan to be so
delivered, together with such other items as may be reasonably requested by
the parties hereto and their respective legal counsel in order to effectuate
or evidence the transaction contemplated hereby by December 31, 2000
2.2 Registration of Pacific Shares. Upon the execution of the Plan as
outlined in Section 1.1 hereof, Pacific shall, as soon as practicable, file an
S-4 Registration Statement with the Securities and Exchange Commission to
cover the 2,800,000 shares issued pursuant to this agreement.
2.3 Delivery of Certificates. Once the Securities and Exchange
Commission has declared the Registration Statement effective the Shareholders
shall transfer to Pacific the shares of common stock of Logio listed opposite
their respective names on Exhibit A hereto (the "Logio Shares") in exchange
for shares of the common stock of Pacific as outlined above in Section 1.1
hereof (the "Pacific Stock"). All of such shares of Pacific Stock shall be
issued to the Shareholders of Logio, in the numbers shown opposite their
respective names in Exhibit A no later than 30 days after the registration
statement is declared effective. The transfer of Logio Shares by the
Shareholders shall be effected by the delivery to Pacific of certificates
representing the transferred shares endorsed in blank or accompanied by stock
powers executed in blank, with all signatures guaranteed by a national bank
and with all necessary transfer taxes and other revenue stamps affixed and
acquired at the Shareholders' expense.
2.4 Closing. The closing shall be effected, as soon as practicable,
after all of the outlined conditions and transactions contained in Sections
1.1., 1.2 and 1.3 have been satisfied (the"Closing") .
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Section 3
Representations, Warranties and Covenants of Pacific
Pacific represents and warrants to, and covenants with, the Shareholders
and Logio as follows:
3.1 Corporate Status. Pacific is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada. Pacific
has full corporate power and is duly authorized, qualified, franchised, and
licensed under all applicable laws, regulations, ordinances, and orders of
public authorities to own all of its properties and assets and to carry on its
business on all material respects as it is now being conducted, and there is
no other jurisdiction in which the character and location of the assets owned
by it, or the nature of the business transacted by it, requires qualification.
Included in the Pacific schedules (defined below) are complete and correct
copies of its Articles of Incorporation and Bylaws as in effect on the date
hereof. The execution and delivery of this Plan does not, and the
consummation of the transactions contemplated hereby will not, violate any
provision of Pacific's Articles of Incorporation or Bylaws. Pacific has taken
all action required by law, its Articles of Incorporation, its Bylaws, or
otherwise, to authorize the execution and delivery of this Plan.
3.2 Capitalization. The authorized capital stock of Pacific as of the
date hereof consists of 50,000,000 common shares, par value $.001. As of the
date hereof there are 15,008,342 common shares of Pacific issued and
outstanding. The foregoing shares constitute fully paid, non-assessable
shares.
3.3 Options, Warrants and Rights. Pacific has entered into stock option
and warrant contracts with key employees, directors, consultants and investors
for an equity interest in Pacific and the resulting issuance of shares
pursuant to certain agreements. As of October 15, 2000, Pacific has options
outstanding to purchase 1,122,735 shares of its common stock and warrants to
purchase 1,250,000 common shares to certain persons pursuant to various
agreements attached hereto as Exhibit B.
3.4 Financial Statements.
(a) Pacific hereby warrants and covenants to Logio that the
reviewed financial statements for the period ended September 30, 2000 and
audited financial statements for the years ended December 31, 1999 and 1998,
fairly and accurately represent the financial condition of Pacific and that
the same will be prepared along with the period ended as of the date of
Closing, for consolidation, which shall be prepared in accordance with
generally accepted accounting principles consistently applied, on or before
the expiration of forty-five days from the date of execution of the Plan.
(b) Pacific hereby warrants and represents that the audited
financial statements for the periods set forth in subparagraph (a), supra,
fairly and accurately represent the financial condition of Pacific as
submitted heretofore to Logio for examination and review.
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3.5 Conduct of Business. Pacific will use its best efforts to maintain
and preserve its business organization, employee relationships and goodwill
intact, and will not, without the prior written consent of Logio, enter into
any material commitments except in the ordinary course of business.
Pacific will conduct itself in the following manner pending the Closing:
(a) Certificate of Incorporation and Bylaws. No change will be
made in the Articles of Incorporation or Bylaws of Pacific.
(b) Capitalization, etc. Pacific will not make any change in its
authorized or issued shares of any class, declare or pay any dividend or other
distribution, or issue, encumber, purchase or otherwise acquire any of its
shares of any class.
3.6 Title to Property. Pacific has good and marketable title to all of
its properties and assets, real and personal, proprietary or otherwise, as
will be reflected in the balance sheets of Pacific, and the properties and
assets of Pacific are subject to no mortgage, pledge, lien or encumbrance,
unless as otherwise disclosed in its financial statements.
3.7 Litigation. There are no material actions, suits, or proceedings,
pending, or, to the best knowledge of Pacific, threatened by or against or
affecting Pacific at law or in equity, or before any governmental agency or
instrumentality, domestic or foreign, or before any arbitrator of any kind;
Pacific does not have any knowledge of any default on its part with respect to
any judgment, order, writ, injunction, decree, warrant, rule, or regulation of
any court, arbitrator, or governmental agency or instrumentality.
3.8 Books and Records. From the date hereof until the Closing, and for
any reasonable period subsequent thereto, Pacific and its present management
will (I) give to the Shareholders and Logio, or their duly authorized
representatives, full access, during normal business hours, to all of its
books, records, contracts and other corporate documents and properties so that
the Shareholders and Logio, or their duly authorized representatives, may
inspect them; and (ii) furnish such information concerning the properties and
affairs of Pacific as the Shareholders and Logio, or their duly authorized
representatives, may reasonably request.
3.9 Confidentiality. Until the Closing (and thereafter if there is no
Closing), Pacific and its representatives will keep confidential any
information which they obtain from the Shareholders or from Logio concerning
its properties, assets and the proposed business operations of Logio. If the
terms and conditions of this Plan imposed on the parties hereto are not
consummated on or before the Closing or otherwise waived or extended in
writing to a date mutually agreeable to the parties hereto, Pacific will
return to Logio all written matter with regard to Logio obtained in connection
with the negotiations or consummation of this Plan.
3.10 Conflict with Other Instruments. The transactions contemplated by
this Plan will not result in the breach of any term or provision of, or
constitute a default under any indenture, mortgage,
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deed of trust, or any material agreements or instrument to which Pacific was
or is a party, or to which any of its assets or operations are subject, and
will not conflict with any provision of the Articles of Incorporation or
Bylaws of Pacific.
3.11 Corporate Authority. Pacific has full corporate power and
authority to enter into this Plan and to carry out its obligations hereunder
and will deliver to the Shareholders and Logio, or their respective
representatives, as of the date of the execution of the Plan, a certified copy
of resolutions of its Board of Directors authorizing execution of this Plan by
its officers and performance thereunder.
3.12 Special Covenants and Representations Regarding the Exchanged
Pacific Stock. The consummation of this Plan and the transactions herein
contemplated include the issuance of the exchanged Pacific shares to the
Shareholders, which constitutes an offer and sale of securities under the
Securities Act of 1933, as amended, and applicable states' securities laws.
The shares to be issued in the transaction shall be registered.
3.13 Undisclosed or Contingent Liabilities. Pacific hereby represents
and warrants that it has no undisclosed or contingent liabilities which have
not been disclosed to Logio.
3.14 Information. The information concerning Pacific set forth in this
Plan, and the Pacific schedules attached hereto, are complete and accurate in
all material respects and do not contain, or will not contain, when delivered,
any untrue statement or a material fact or omit to state a material fact the
omission of which would be misleading to Logio or the shareholders of Logio in
connection with this Plan.
3.15 Title and Related Matters. Pacific has good and marketable title
to all of its properties, interests in properties, and assets, real and
personal, which are reflected, or will be reflected, in the Pacific balance
sheets, free and clear of any and all liens and encumbrances.
3.16 Contracts or Agreements. Pacific is not bound by any material
contracts, agreements or obligations which it has not already disclosed to
Logio in writing.
3.17 Governmental Authorizations. Pacific has all licenses, franchises,
permits and other government authorizations that are legally required to
enable it to conduct its business in all material respects as conducted on the
date hereof. Except for compliance with federal and state securities laws, no
authorization, approval, consent or order of, or registration, declaration, or
filing with, any court or other governmental body is required in connection
with the execution and delivery by Pacific of this Plan and the consummation
by Logio of the transactions contemplated hereby.
3.18 Compliance with Laws and Regulations. Pacific has complied with
all applicable statutes and regulations of any federal, state, or other
applicable jurisdiction or agency thereof, except to the extent that
noncompliance would not materially and adversely affect the business,
operations, properties, assets, or condition of Pacific or except to the
extent that noncompliance would incur any material liability, not otherwise
disclosed to Logio.
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3.19 Approval of Plan. The Board of Directors of Pacific has authorized
the execution and delivery of this Plan by Pacific and have approved the Plan
and the transactions contemplated hereby. Pacific has full power, authority,
and legal right to enter into this Plan and to consummate the transactions
contemplated hereby.
3.20 Investment Intent. Pacific is acquiring the Logio Shares to be
transferred to it under this Plan for investment and not with a view to the
sale or distribution thereof, and Pacific has no commitment or present
intention to liquidate Logio or to sell or otherwise dispose of the Logio
Shares.
3.21 Unregistered Shares and Access to Information. Pacific understands
that the offer and sale of the Logio Shares have not been registered with or
reviewed by the Securities and Exchange Commission under the Securities Act of
1933, as amended, or with or by any state securities law administrator, and no
federal, state securities law administrator has reviewed or approved any
disclosure or other material concerning Logio or the Logio Shares. Pacific
has been provided with and reviewed all information concerning Logio, the
Logio Shares as it has considered necessary or appropriate as a prudent and
knowledgeable investor to enable it to make an informed investment decision
concerning the Logio Shares. Pacific has made an investigation as to the
merits and risks of its acquisition of the Logio Shares and has had the
opportunity to ask questions of, and has received satisfactory answers from,
the officers and directors of Logio concerning Logio, the Logio Shares and
related matters, and has had an opportunity to obtain additional information
necessary to verify the accuracy of such information and to evaluate the
merits and risks of the proposed acquisition of the Logio Shares.
3.22 Pacific Schedules. Pacific has delivered to Logio the following
items pertaining to Pacific, listed below, hereafter referred to as the
"Pacific Schedules", which is hereby incorporated by reference and made a part
hereof. A certification has been executed by a duly authorized officer of
Pacific on or about the date which the Plan is executed to certify that the
Pacific Schedules are true and correct.
(a) Copy of Articles of Incorporation and any amendments, and
Bylaws;
(b) Financial Statements;
(c) Shareholder List;
(d) Resolutions of Directors approving Plan;
(e) Officers' Certificate as required under Section 6.2 of the
Plan;
(f) Opinion of counsel as required under Section 6.4 of the Plan;
(g) Certificate of Good Standing;
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Section 4
Representations, Warranties and Covenants of Logio
Logio represents and warrants to, and covenants with, the Shareholders
and Pacific as follows:
4.1 Corporate Status. Logio is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada
incorporated on November 24, 1997. Logio has full corporate power and is duly
authorized, qualified, franchised, and licensed under all applicable laws,
regulations, ordinances, and orders of public authorities to own all of its
properties and assets and to carry on its business on all material respects as
it is now being conducted. Included in the Logio schedules (defined below)
are complete and correct copies of its Articles of Incorporation and Bylaws as
in effect on the date hereof. The execution and delivery of this Plan does
not, and the consummation of the transactions contemplated hereby will not,
violate any provision of Logio's Articles of Incorporation or Bylaws. Logio
has taken all action required by law, its Articles of Incorporation, its
Bylaws, or otherwise, to authorize the execution and delivery of this Plan.
4.2 Capitalization. The authorized capital stock of Logio as of the
date hereof consists of 60,000,000 common shares, $.001 and 50,000 preferred
shares, $.01 par value. As of the date hereof there are 18,425,830 common
shares and no preferred shares issued and outstanding. The issued and
outstanding common shares of Logio are fully paid, non-assessable shares.
4.3 Options, Warrants and Rights. Logio has entered into stock option
and warrant contracts with key employees, directors, consultants and investors
for an equity interest in Logio and the resulting issuance of shares pursuant
to certain agreements. As of October 15, 2000, Logio has options outstanding
to purchase 1,450,166 shares of its common stock and warrants outstanding to
purchase 749,449 shares of its common stock to certain persons pursuant to
various agreements attached hereto as Exhibit C.
4.4 Conduct of Business. Logio will use its best efforts to maintain
and preserve its business organization, employee relationships and goodwill
intact, and will not, without the prior written consent of Pacific, enter into
any material commitments except in the ordinary course of business.
Logio agrees that Logio will conduct itself in the following manner
pending the Closing:
(a) Certificate of Incorporation and Bylaws. No change will be
made in the Certificate of Incorporation or Bylaws of Logio.
(b) Capitalization, etc. Logio will not make any change in its
authorized or issued shares of any class, declare or pay any dividend or other
distribution, or issue, encumber, purchase or otherwise acquire any of its
shares of any class.
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4.5 Title to Property. Logio has good and marketable title to all of
its properties and assets, real and personal, proprietary or otherwise, as
will be reflected in the balance sheets of Logio, and the properties and
assets of Logio are subject to no mortgage, pledge, lien or encumbrance,
unless as otherwise disclosed in its financial statements.
4.6 Litigation. There are no material actions, suits, or proceedings,
pending, or, to the best knowledge of Logio, threatened by or against or
affecting Logio at law or in equity, or before any governmental agency or
instrumentality, domestic or foreign, or before any arbitrator of any kind;
Logio does not have any knowledge of any default on its part with respect to
any judgment, order, writ, injunction, decree, warrant, rule, or regulation of
any court, arbitrator, or governmental agency or instrumentality.
4.7 Books and Records. From the date hereof, and for any reasonable
period subsequent thereto, Logio and its present management will (I) give to
Pacific, or their duly authorized representatives, full access, during normal
business hours, to all of its books, records, contracts and other corporate
documents and properties so that Pacific, or their duly authorized
representatives, may inspect them; and (ii) furnish such information
concerning the properties and affairs of Logio as Pacific, or their duly
authorized representatives, may reasonably request. Any such request to
inspect Logio's books shall be directed to Logio's representative, at the
address set forth herein under Section 10.4 Notices.
4.8 Confidentiality. Until the Closing (and thereafter if there is no
Closing), Logio and its representatives will keep confidential any information
which they obtain from Pacific concerning its properties, assets and the
proposed business operations of Logio. If the terms and conditions of this
Plan imposed on the parties hereto are not consummated on or before 5:00 p.m.
MST on December 31, 2000 or otherwise waived or extended in writing to a date
mutually agreeable to the parties hereto, Logio will return to Pacific all
written matter with regard to Pacific obtained in connection with the
negotiations or consummation of this Plan.
4.9 Vote Required. The affirmative vote of the holders of at least a
majority of the outstanding Logio Shares is the only vote of the holders of
any class or series of Logio's capital stock necessary to approve and adopt
this Plan.
4.10 Access to Information. Logio and the Shareholders understand that
the offer and sale of Pacific shares to be exchanged for the Logio shares will
be registered with the Securities and Exchange Commission under the
Securities Act of 1933, as amended. Logio and the Shareholders have or will
be provided with all information concerning Pacific and Pacific shares to be
exchanged for the Logio Shares. Logio has considered such information as
necessary or appropriate as a prudent and knowledgeable investors to enable it
to make informed investment decisions concerning the Pacific shares, to be
exchanged for the Logio Shares. Logio has made an investigation as to the
merits and risks of its acquisition of the Pacific shares to be exchanged for
the Logio Shares and has had the opportunity to ask questions of, and have
received satisfactory answers from, the officers and directors of Pacific
concerning Pacific shares to be exchanged for the Logio Shares and related
matters, and has had an opportunity
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to obtain additional information necessary to verify the accuracy of such
information and to evaluate the merits and risks of the proposed acquisition
of the Pacific shares to be exchanged for the Logio Shares.
4.11 Title to Shares. The Shareholders are the beneficial and record
owners of all of the shares of Logio of whatever class or series, which the
Shareholders have contracted to exchange.
4.12 Contracts.
(a) Except for the contracts set forth in the Logio Schedules,
Logio is not a party to any other license agreements, material contracts,
written or oral, nor is Logio a party to any franchise agreements or other
commitments.
(b) Except as may be set forth in the Logio Schedules, Logio is not
a party to any contract, agreement, corporate restriction, or subject to any
judgment, order, writ, injunction, decree, or award, which materially and
adversely affect the business, operations, properties, assets, or conditions
of Logio.
(c) Except as set forth in the Logio Schedules, Logio is not a
party to any material oral or written (I) contract for employment of any
officer which is not terminable on 30 days (or less) notice; (ii) profit
sharing, bonus, deferred compensation, stock option, severance, or any other
retirement plan or arrangement covered by Title IV of the Employee Retirement
Income Security Act, as amended, or otherwise covered; (iii) agreement
providing for the sale, assignment or transfer of any of its rights, assets or
properties, whether tangible or intangible, except sales of its property in
the ordinary course of business with a value of less than $5,000; or (iv)
waiver of any right of any value which in the aggregate is extraordinary or
material concerning the assets or properties scheduled by Logio, except for
adequate value and pursuant to contract. Logio has not entered into any
material transaction which is not listed in the Logio Schedules or reflected
in the Logio financial statements.
4.13 Material Contract Defaults. Except for a $125,000 dispute with
Oracle Corporation Logio is not in default in any material respect under the
terms of any contract, agreement, lease or other commitment which is material
to the business, operations, properties or assets, or condition of Logio, and
there is no event of default or event which, with notice or lapse of time or
both, would constitute a default in any material respect under any such
contract, agreement, lease, or other commitment in respect of which Logio has
not taken adequate steps to prevent such default from occurring, or otherwise
compromised, reached a satisfaction of, or provided for extensions of time in
which to perform under any one or more contract obligations, among others.
4.14 Conflict with Other Instruments. The consummation of the within
transactions will not result in the breach of any term or provision of, or
constitute a default under any indenture, mortgage, deed of trust, or other
material agreement or instrument to which Logio was or is a party, or to which
any of its assets or operations are subject, and will not conflict with any
provision of the Articles of Incorporation or Bylaws of Logio.
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4.15 Governmental Authorizations. Logio is in good standing in the State
of Nevada. and qualified to do business in the State of Utah. Except for
compliance with federal and state securities laws, no authorization, approval,
consent or order of, or registration, declaration, or filing with, any court
or other governmental body is required in connection with the execution and
delivery by Logio of this Plan and the consummation by Logio of the
transactions contemplated hereby.
4.16 Compliance with Laws and Regulations. Logio has complied with all
applicable statutes and regulations of any federal, state, or other applicable
jurisdiction or agency thereof, except to the extent that noncompliance would
not materially and adversely affect the business, operations, properties,
assets, or condition of Logio or except to the extent that noncompliance would
incur any material liability, not otherwise disclosed to Pacific.
4.17 Approval of Plan. The Board of Directors of Logio have authorized
the execution and delivery of this Plan by Logio and have approved the Plan
and the transactions contemplated hereby. Logio has full power, authority,
and legal right to enter into this Plan and to consummate the transactions
contemplated hereby.
4.18 Information. The information concerning Logio set forth in this
Plan, and the Logio Schedules attached hereto, are complete and accurate in
all material respects and do not contain, or will not contain, when delivered,
any untrue statement of a material fact or omit to state a material fact the
omission of which would be misleading to Pacific in connection with this Plan.
4.19 Logio Schedules. Logio has delivered to Pacific the following
items listed below, hereafter referred to as the "Logio Schedules", which is
hereby incorporated by reference and made a part hereof. A certification has
been executed by a duly authorized officer of Logio on or about the date which
the Plan is executed to certify that the Logio Schedules are true and correct.
(a) Copy of Articles of Incorporation and Bylaws;
(b) Financial Statements;
(c) Resolutions of Board of Directors approving Plan;
(d) Shareholders approving Plan;
(e) Schedule of all debts, mortgages, security interests,
pledges, liens, encumbrances, claims and the like;
(f) A list of key employees, including current compensation,
with notation as to job description and whether or not such employee is
subject to written contract, and if subject to a contract or employment
agreement, a copy of the same;
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(g) A schedule showing the name and location of each bank or
other institution with which Logio has an account and the names of the
authorized persons to draw thereon or having access thereto;
(h) A schedule setting forth the shareholders, together with
the number of shares owned beneficially or of record by each (also attached as
Exhibit A);
(I) A schedule setting forth all material contracts;
(j) Officers' Certificate as required by Section 7.2 of the
Plan;
(k) Certificate of Good Standing.
Section 5
Special Covenants
5.1 Information Incorporated in Parties' Reports. Logio and Pacific
represent and warrant to each other that all the information furnished under
this Plan shall be true and correct in all material respects and that there is
no omission of any material fact required to make the information stated not
misleading. Logio and Pacific agree to indemnify and hold each other
harmless, including each of its Directors and Officers, and each person, if
any, who controls such party, under any applicable law from and against any
and all losses, claims, damages, expenses or liabilities to which any of them
may become subject under applicable law, or reimburse them for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such actions insofar as such losses, claims, damages, expenses,
liabilities or actions arise out of or are based on any untrue statement,
intentional untrue statement, or intentional omission of a material fact
contained in such information delivered hereunder. This indemnity shall only
survive as long as specified within this agreement.
5.2 Special Covenants and Representations Regarding the Exchanged
Pacific Stock. The consummation of this Plan and the transactions herein
contemplated, including the issuance of the Pacific shares in exchange for all
of the issued and outstanding shares of Logio to the Shareholders constitutes
the offer and sale of securities under the Securities Act and the applicable
state statutes, which depend, inter alia, on the circumstances under which the
Shareholders acquire such securities. Pacific intends to register the shares
under the Securities Act of 1933.
5.3 Action Prior to Closing. Upon the execution hereof until the
Closing date, and the completion of the consolidated audited financial
statements:
(a) Logio and Pacific will (I) perform all of its obligations under
material contracts, leases, insurance policies and/or documents relating to
its assets and business; (ii) use its best efforts to maintain and preserve
its business organization intact, to retain its key employees, and to maintain
its relationship with existing potential customers and clients; and (iii)
fully comply with and perform in all
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material respects all duties and obligations imposed on it by all federal and
state laws and all rules, regulations, and orders imposed by all federal or
state governmental authorities.
(b) Neither Logio nor Pacific will (I) make any change in its
Articles of Incorporation or Bylaws except and unless as contemplated pursuant
to Section 3 of this Plan; (ii) enter into or amend any contract, agreement,
or other instrument of the types described in the parties' schedules, except
that a party may enter into or amend any contract or other instrument in the
ordinary course of business involving the sale of goods or services, provided
that such contract does not involve obligations in excess of $5,000.
Section 6
Conditions Precedent to Obligations of
Logio and the Shareholders
All obligations of Logio and the Shareholders under this Plan are subject
to the satisfaction, on or before the date of the execution or the Closing
date, except as otherwise provided for herein, or waived or extended in
writing by the parties hereto, of the following conditions:
6.1 Accuracy of Representations. The representations and warranties
made by Pacific in this Plan were true when made and shall be true as of the
date of execution of the Plan (except for changes therein permitted by this
Plan) and have the same force and effect as if such representations and
warranties were made at and as of the execution of the Plan; and, Logio shall
have performed and complied with the terms and conditions of this Plan prior
to the execution of this Plan, unless permitted otherwise by this Plan. Logio
and its shareholders shall have been furnished with a certificate, signed by a
duly authorized executive officer of Pacific and dated as of the date of the
execution of this Plan, to the foregoing effect.
6.2 Officers' Certificate. As of the date of the execution of the Plan,
Logio and the Shareholders shall have been furnished with a certificate signed
by a duly authorized executive officer of Pacific, to the effect that no
litigation, proceeding, investigation, or inquiry is pending, or to the best
knowledge of Pacific, threatened, which might result in an action to enjoin or
prevent the consummation of the transactions contemplated by this Plan, or
which might result in any material adverse change in the assets, properties,
business, or operations of Pacific.
6.3 No Material Adverse Change. Prior to the Closing date, there shall
have not occurred any material adverse change in the condition, business or
operations of Pacific, nor shall any event have occurred which, with lapse of
time or the giving of notice or both, may cause or create any material adverse
change in the financial condition, business or operations of Pacific, except
as otherwise disclosed to Logio.
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6.4 Opinion of Counsel of Pacific. Pacific shall furnish to Logio and
the Shareholders an opinion dated as of the date of execution and in the form
and substance satisfactory to Logio and the Shareholders to the effect that:
(a) Pacific is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Nevada, and with all
requisite corporate power to perform its obligations under this Plan.
(b) The business of Pacific, as presently conducted, including,
upon the consummation hereof, the ownership of all of the issued and
outstanding shares of Logio does not require it to register to do business as
a foreign corporation in any other jurisdiction. Pacific is registered as a
foreign corporation in the State of Utah and has complied to the best of its
knowledge in all material respects with all the laws, regulations, licensing
requirements and orders applicable to its business activities and has filed
with the proper authorities, including the Department of Commerce, Division of
Corporations, and Secretary of State for the State of Utah and the State of
Nevada.
(c) The authorized and outstanding capital stock of Pacific as set
forth in Section 3.2 above, and all issued and outstanding shares have been
duly and validly authorized and issued and are fully paid and non-assessable.
(d) There are no material claims, suits or other legal proceedings
pending or threatened against Pacific in any court or before or by any
governmental body which might materially affect the business of Pacific or the
financial condition of Pacific as a whole and no such claims, suits or legal
proceedings are contemplated by governmental authorities against Pacific.
(e) To the best knowledge of such counsel, the consummation of the
transactions contemplated by this Plan will not violate or contravene the
provisions of the Articles of Incorporation or Bylaws of Pacific, or any
contract, agreement, indenture, mortgage, or order by which Pacific is bound.
(f) This Plan constitutes a legal, valid and binding obligation of
Pacific enforceable in accordance with its terms, subject to the affect of any
bankruptcy, insolvency, reorganization, moratorium, or similar law affecting
creditors' rights generally and general principles of equity (regardless of
whether such principles are considered in a proceeding in equity or law).
(g) The execution and delivery of this Plan and the consummation of
the transactions contemplated hereby have been duly authorized by its Board of
Directors.
6.5 Good Standing. Logio shall have received a Certificate of Good
Standing from the State of Nevada obtained and delivered, prior to the
execution of the Plan, certifying that Pacific is in good standing as a
corporation in the State of Nevada.
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6.6 Other Items. Logio and the Shareholders shall have received such
further documents, certifications or instruments relating to the transactions
contemplated hereby as Logio and the Shareholders may reasonably request.
Section 7
Conditions Precedent to Obligations of Pacific
All obligations of Pacific under this Plan are subject, at its option, to
the fulfillment of either the execution of the Plan or the Closing, of each of
the following conditions:
7.1 Accuracy of Representations. The representations and warranties
made by Logio and the Shareholders under this Plan were true when made and
shall be true as of the execution date (except for changes therein permitted
by this Plan) and have the same force and effect as if such representations
and warranties were made as of the execution date; and Pacific shall have
performed and complied with the terms and conditions of this Plan prior to the
execution of the Plan and/or Closing, unless waived or extended in writing by
the parties hereto. Pacific and its shareholders shall have been furnished
with a certificate, signed by a duly authorized executive officer of Logio and
dated the as of the execution of the Plan, to the foregoing effect.
7.2 Officers' Certificate. Pacific shall have been furnished with a
certificate dated, as of the date of execution of the Plan, and signed by a
duly authorized executive officer of Logio, to the effect that no litigation,
proceeding, investigation, or inquiry is pending, or to the best knowledge of
Logio, threatened, which might result in an action to enjoin or prevent the
consummation of the transactions contemplated by this Plan, or which might
result in any material adverse change in the assets, properties, business, or
operations of Logio.
7.3 No Material Adverse Change. Prior to the Closing date, there shall
have not occurred any material adverse change in the final condition, business
or operations of Pacific, nor shall any event have occurred which, with lapse
of time or the giving of notice or both, may cause or create any material
adverse change in the financial condition, business or operations of Logio,
except as otherwise disclosed to Pacific.
7.4 Good Standing. Pacific shall have received either a Certificate of
Good Standing from the State of Nevada or some kind of verification certifying
that Logio is in good standing as a corporation in the State of Nevada.
7.5 Other Items. Pacific shall have received such further documents,
certifications or instruments relating to the transactions contemplated hereby
as Pacific may reasonably request.
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Section 8
Termination
8.1 Termination by Logio or the Shareholders. This Plan may be
terminated at any time prior to the Closing date by action of Logio or the
Shareholders, if Pacific shall fail to comply in any material respect with any
of the covenants or agreements contained in this Plan, or if any of its
representations and warranties contained herein shall be inaccurate in any
material respect.
8.2 Termination by Pacific. This Plan may be terminated at any time
prior to the Closing date by action of Pacific if Logio shall fail to comply
in any material respect with any of the covenants or agreements contained in
this Plan, or if any of its representations or warranties contained herein
shall be inaccurate in any material respect.
8.3 Termination by Mutual Consent
(a) This Plan may be terminated at any time prior to the Closing
date by mutual consent of Pacific, expressed by action of its Board of
Directors, Logio or the Shareholders.
(b) If this Plan is terminated pursuant to Section 8, this Plan
shall be of no further force and effect and no obligation, right or liability
shall arise hereunder. Each party shall bare its own costs in connection
herewith.
(c) If the Plan is terminated pursuant to Section 8, the parties
hereto shall sign non-disclosure agreements which shall survive the
cancellation of the Plan.
Section 9
Shareholders' Representative
The Shareholders hereby irrevocably designate and appoint ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
as their agent and attorney in fact (the "Shareholders' Representative") with
full power and authority until the Closing to execute, deliver and receive on
their behalf all notices, requests and other communications hereunder. To
waive, amend or modify any provisions of this Plan and to take such other
action on their behalf in connection with this Plan, the transactions
contemplated hereby as such agent deems appropriate; provided, however, that
no such waiver, amendment or modification may be made if it would decrease the
number of shares to be issued to the Shareholders under Section 1 hereof or
increase the extent of their obligation to Pacific hereunder, unless agreed in
writing by the Shareholders.
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Section 10
General Provisions
10.1 Further Assurances. At any time, and from time to time, after the
Closing date, each party will execute and deliver such additional instruments
and take such action as may be reasonably requested by the other party to
confirm or perfect title to any property transferred hereunder or otherwise to
carry out the intent and purposes of the Plan.
10.2 Payments of Estimated Costs and Fees. Pacific and Logio mutually
determine and agree that Pacific shall pay the actual costs and fees incurred
by any party hereto in connection with the execution and consummation of the
Plan.
10.3 Press Release and Shareholders' Communications. On the date of
Closing, or as soon thereafter as practicable, Logio and the Shareholders
shall cause to have promptly prepared and disseminated a news release
concerning the execution and consummation of the Plan, such press release and
communication to be released promptly and within the time required by the
laws, rules and regulations as promulgated by the United States Securities and
Exchange Commission, and concomitant therewith to cause to be prepared a full
and complete letter to Pacific's shareholders which shall contain information
required by Regulation 240.14f-1 as promulgated under Section 14(f) as
mandated under the Securities and Exchange Act of 1934, as amended.
10.4 Notices. All notices and other communications required or
permitted hereunder shall be sufficiently given if personally delivered, sent
by registered mail, or certified mail, return receipt requested, postage
prepaid, or by facsimile transmission addressed to the following parties
hereto or at such other addresses as follows:
If to Pacific: Pacific WebWorks, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
If to Logio or the Logio, Inc.
Shareholders of Logio: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
or at such other addresses as shall be furnished in writing by any party in
the manner for giving notices hereunder, and any such notice or communication
shall be deemed to have been given as of the date so delivered, mailed, sent
by facsimile transmission, or telegraphed.
10.5 Entire Agreement. This Plan represents the entire agreement
between the parties relating to the subject matter hereof, including any
previous letters of intent, understandings, or agreements between Pacific,
Logio and the Shareholders with respect to the subject matter hereof, all of
which are hereby merged into this Plan, which alone fully and completely
expresses the agreement of
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the parties relating to the subject matter hereof. Excepting the foregoing
agreement, there are no other courses of dealing, understandings, agreements,
representations, or warranties, written or oral, except as set forth herein
with respect to the subject matter hereof.
10.6 Governing Law. This Plan shall be governed by and construed and
enforced in accordance with the laws of the State of Nevada, except to the
extent preempted by federal law, in which event (and to that extent only)
federal law shall govern.
10.7 Tax Treatment. The transaction contemplated by this Plan is
intended to qualify as a "tax-free" reorganization under the provisions of
Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended. Logio
and Pacific acknowledge, however, that each are being represented by their own
tax advisors in connection with this transaction, and neither has made any
representations or warranties to the other with respect to treatment of such
transaction or any part or effect thereof under applicable tax laws,
regulations or interpretations; and no attorney's opinion or tax revenue
ruling has been obtained with respect to the tax consequences of the
transactions contemplated by the within Plan.
10.8 Attorney Fees. In the event that any party prevails in any action
or suit to enforce this Plan, or secure relief from any default hereunder or
breach hereof, the nonprevailing party or parties shall reimburse the
prevailing party or parties for all reasonable costs, including all attorney
fees, incurred in connection therewith.
10.9 Amendment of Waiver. Every right and remedy provided herein shall
be cumulative with every other right and remedy, whether conferred herein, at
law or in equity, and may be enforced concurrently or separately, and no
waiver by any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then, therefore, or
thereafter occurring or existing. Any time prior to the expiration of thirty
(30) days from the date hereof, this Plan may be amended in writing signed by
all parties hereto, with respect to any of the terms contained herein
including but not limited to Section 9, and any term or condition of this Plan
may be waived or the time for performance thereof may be extended by a writing
signed by the party or parties for whose benefit the provision is intended.
10.10 Counterparts. This Plan may be executed in any number of
counterparts, each of which when executed and delivered shall be deemed to be
an original, and all of which together shall constitute one and the same
instruments.
10.11 Headings. The section and subsection headings in this Plan are
inserted for convenience only and shall not effect in any way the meaning or
interpretation of the Plan.
10.12 Parties in Interest. Except as may be otherwise expressly
provided herein, all terms and provisions of this Plan shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
beneficiaries, personal and legal representatives, and assigns.
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IN WITNESS WHEREOF, the parties have executed this Plan and Agreement of
Reorganization effective the day and year first set forth above.
PACIFIC WEBWORKS, INC.
Attest: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
_____________________ By: _______________________________________
Its President
LOGIO, INC.
Attest: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇ ▇. ▇▇▇▇
_____________________ By: _______________________________________
Its President