Document:

EXHIBIT 10.9

Exhibit 10.9

August 31, 2004

Page 1 of 5

Definitive Purchase Agreement

I.

Acquiring Entity

Tom Albanese, a qualified buyer, (the “Buyer”) and an unincorporated individual, will purchase (the “Purchase” or the “Transaction”)  the customer base, hardware, software and any other intellectual property (the “Assets”) of Sitestar Applied Technologies, Inc.(“SAT”), a wholly owned subsidiary of Sitestar Corporation, (the “Seller” or the “Company”),  incorporated in the State of Nevada. 

II.

Structure and Consideration

Buyer will acquire certain Assets of the Seller, including, but not limited to Sitestar Applied Technologies, Inc’s. customers, hardware, software and intellectual property (trademarks, brands, trade names, customer lists, etc) currently directly intrinsic to Sitestar Applied Technologies exclusively.  Buyer will incorporate SAT’s business into a company called SERVATUS, LLC.

III.

Company Representations and Warranties

a.

SAT provides multiple services to a corporate customer base. Service offerings including software development, information technology consulting and other services accounted for by Seller as SAT.  

b.

The SAT is in good standing with its creditors, employees and suppliers and is not currently party to any pending legal action.

IV.

Purchase Consideration

Purchase consideration is based on SERVATUS, LLC’s aggregate revenue and the general financial performance reflecting the representations of the Company.  Seller reserves the right to audit Buyers financial records monthly to confirm the purchase consideration.  Assets of SAT include intellectual property (exceptions set forth in section X) utilized in the operation of the business and other related elements such as software, development tools, and development workstations as agreed upon in the Agreement. A definitive list of assets shall be compiled and agreed upon by Buyer and Seller. All additional terms and conditions of the purchase consideration will be addressed in the definitive agreement (Agreement), as defined in paragraph XI of this document.      

 August 31, 2004

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V.

Valuation

Based on the Company’s representations, the Transaction will have a value based on the revenue from SERVATUS, LLC’s customers.  

a.

The actual value may be greater or less based on the all revenue including but not limited to collected revenue of the Company’s customers during the payment period including work for customers performed under any name or entity.  Similar work done outside the company will be included unless otherwise agreed upon in the Agreement.

b.

Buyer will not assume any of the Seller’s ongoing financial responsibilities. 

c.

Contingent liabilities, if found to be attached to the assets of SAT, shall be deducted from the Purchase Consideration.

VI.

 Payment Structure

This Transaction will include the following components: 

a.

Months following consummation 1-48: Seller shall receive twenty percent (20%) of the Buyer’s Collected Revenues or $5,000, whichever is less, for all products and services derived from SERVATUS, LLC’s products and services not to exceed an aggregate of $180,000.  For the first three (3) months of the forty eight (48) months, Buyer will make no payments then for each of the succeeding forty five (45) months of the forty eight (48) following the consummation of the Agreement, Buyer will remit payments to Seller.  Total of the forty five (45) payments to Seller will not exceed $180,000.  

b.

Buyer will surrender all of the shares of Company common stock,  1,460,796 shares, owned by Buyer at the consummation date of the Agreement.

c.

Seller will provide Buyer office space including utilities, co-location for customers, internet bandwidth, and other related services, use of  phone system (exclusive of any additional tolls) at no cost to Buyer for a period of twelve (12) months from consummation of the Agreement.  After the initial twelve (12) months the aforementioned services can be negotiated.

VII.

Other Obligations and Terms

a.

Tom Albanese and Len Lindsay hereby tender their resignations as employees of the Company effective on the consummation date of this Agreement.

August 31, 2004

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b.

Buyer will not market the name “Sitestar” except as it relates to transitioning to Buyer’s chosen trade name.

      VIII.     Early Buy-out

                 Option #1

a.

Buyer has the option to buy-out the Agreement for a single payment at any time after month six (6) of the Agreement.

b.

Purchase consideration to be calculated at 120% of the average of the six (6) most recent payments multiplied by the number of monthly payments remaining of the forty-eight (48) monthly payments.                

Option #2

a.

Buyer has the option to buy-out the Agreement for a single payment at time during the term of the Agreement.

b.

Purchase consideration to be calculated at $180,000 less 100% of the monthly payments made to date.

Option #3

a.

Buyer has the option to buy-out the Agreement for a single payment at any time during the term of the Agreement.

b.

Purchase consideration to be negotiated at the option of Buyer and Seller.  This consideration most likely would involve a net present value discounted at 7% on estimated remaining monthly payments.         

IX.       Covenants

a.

Each party shall be responsible for their own legal and transactional expenses.

b.

Any debts incurred by the Company that are attached to assets must be disclosed and a portion of payments may be made directly to satisfy the outstanding debt.

August 31, 2004

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X.        Intellectual property exceptions

c.

The Sitestar Corporation dialer and associated utilities will remain the property of the Sitestar Corporation.  Buyer will complete the dialer and the connection advisor sufficient to be placed into service as soon as possible.  The date for this completion is no later than three (3) months from the consummation of this Agreement.  The dialer setup shall also be able to set up e-mail addresses.  Seller will pay for any future maintenance and upgrades at an agreed upon rate.  

d.

Web development and hosting business except as specifically agreed upon by parties to this document.  

e.

Crisis Management Software 

XI.     Confidentiality

All matters related to this Transaction will be held in strict confidence by both Parties, excluding any disclosure requirements incurred by the Buyer. 

AGREED AND ACCEPTED:

                                                                                     

Sitestar Corporation

Tom Albanese                  

By: Frank Erhartic

/s/ Tom Albanese

/s/ Frank Erhartic

             

           President       

CONFIDENTIAL

August 31, 2004

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SCHEDULE 1

LIST OF ASSETS

ITEM

 #

DESCRIPTION

Original COST

1.

DOT12 SFA SERVER 2

$1,200 

2.

Gateway 5300 Laptop 700Mhz 20Gig HD w/Software

$1,700

3.

Gateway 5300 Laptop 800Mhz 10Gig HD w/Software

$1,700

4.

2 - 40 Gig External HD

$298

5.

98 TEST Server PII 300Mhz

$499

6.

4 Monitors

$800

7.

Window 2003 Web Edition

$399

8.

Workstation Desks (3)

$150

9.

Chairs (5)

$200EXHIBIT 10.10

 Exhibit 10.10

DEFINITIVE PURCHASE AGREEMENT

I.

Acquiring Entity

Sitestar Corporation (the “Buyer” “Sitestar”) incorporated in the State of Nevada, will purchase certain assets of (the “Purchase” or the “Transaction”) Exchange Computers/ExisNet, Inc. (“Seller,” or the “Company”) incorporated in the State of Virginia; its assets currently owned by Richard Stephen Haynes and Catherine Geer Haynes (the “Owners”). 

II.

Structure and Consideration

Buyer will acquire the assets of the Company, including (but not limited to): all customers, accounts receivable, software, hard assets and intellectual property (trademarks, brands, trade names, customer lists, Web content, etc).  

III.

Company Representations and Warranties

a.

The Company provides multiple services to a broad residential and corporate customer base. Service offerings including dial-up, ISDN and T1 Internet access, server rental, consulting and network installations and service.  

b.

For calendar year 2003, the Company generated approximately $390,000.00 in gross internet revenue.

c.

The Company has approximately 1,700 Internet dial-up access subscribers.  The average subscriber rate for all Internet accounts (business and residential) is $17.50 per month.

d.

The Company’s unearned income (a.k.a. deferred revenue) at closing does not exceed $53,000.00 or any overage shall be deducted from the Purchase Consideration.

e.

The Company’s hard assets (not including company vehicle, portable diesel generator and notepbook computer) have a current fair market value of $______.00. 

f.

The Company is in good standing with its creditors, employees and suppliers and is not currently party to any pending legal action.

IV.

Purchase Consideration

Purchase consideration is based on the Company’s aggregate revenue and number of subscribers, select asset base and general financial performance 

 1

reflecting the representations of the Company. Should the actual value differ from the values represented by the Company, the Purchase Price will be adjusted accordingly. Assets of the Company include selected balance sheet items including other assets and intellectual property utilized in the operation of the business. A definitive list of assets shall be compiled and agreed upon by Buyer and Seller. All additional terms and conditions of the purchase consideration will be addressed in the definitive agreement.

         

V.

Payment Structure

This Transaction will include the following components: 

a.

Seller shall receive a total of $150,000.00.  This is to be paid in one $30,000.00 payment at closing and twelve equal monthly installments of $10,000.00, payable on the 22nd of each subsequent month.

 b.

 Notwithstanding the assumption of KMC contract, Yellow Pages and Utilities, Buyer will execute a Promissory Note to Seller for the installment component of the transaction.  

c.

For value received, Seller will enter into a Non-Compete Agreement.  

d.

Buyer will not assume any of the Seller’s ongoing financial responsibilities unless otherwise agreed. 

 

 f.

 If any liens or encumbrances are found to be attached to the assets of the purchased assets, the value shall be deducted from the Purchase Consideration.

VI.

Covenants

a.

Each party shall be responsible for their own legal and transactional expenses.

b.

Any debts incurred by the Company that are attached to assets must be disclosed and a portion of payments may be made directly to satisfy the outstanding debt.

VII.

Employment/Non-Compete Contracts

a.

Included in the Purchase Price, Steve Haynes shall provide his services for a reasonable transition period, up to a maximum of ninety (90) days.  From that point forward, up to one year, Owners agree to be available to Sitestar management on an as-needed basis.  In consideration, Sitestar will provide a T1 link to Sitestar’s Internet backbone to Owners’ home for a 

 2

period of 12 months from the effective date of this Agreement, and will continue to provide the service at cost for an additional 24 months.

b.

Sitestar will require Owners to enter into a Non-Compete Contract pertaining to Internet access and computer services within the state of Virginia and bordering states for a period of 48 months. The terms and conditions of this agreement will be addressed during the due diligence period.

VIII.

Conduct of Business

From the date of your acceptance hereof, through the closing date, the Seller shall conduct its business only in the ordinary course and consistent with relationships and goodwill existing on the date hereof and promptly notify Buyer of any emergency or other change in the ordinary course of the Seller’s business.

 

 

XI.

Confidentiality

The Purchase Price and all discussions pertaining to this agreement or this Transaction will be held by the parties in strict confidence and will not be disclosed to anyone other than the agents or representatives and financing sources of the parties who need to know such information in connection with the Transaction completed hereby.

 X.

 Intermediaries

 a.

 Buyer and the Company agree that no intermediaries have represented either party in the proposed Transaction.

 

 

 

 

 

AGREED AND ACCEPTED:

ExisNet, Inc.

By: Frank Erhartic

Richard Stephen Haynes

President/Owner

Chairman & CEO

Catherine Geer Haynes

Co-Owner

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