Exhibit 2.4
"CATEGORY 5 TECHNOLOGIES, INC. AGREES TO FURNISH SUPPLEMENTALLY A COPY OF ANY
OMITTED SCHEDULE TO THE SECURITIES AND EXCHANGE COMMISSION UPON REQUEST."
STOCK PURCHASE AND EXCHANGE AGREEMENT
-------------------------------------
THIS STOCK PURCHASE AND EXCHANGE AGREEMENT (this "Agreement") is made
and entered into as of January 20, 2002 by and among Category 5 Technologies,
Inc., a Nevada corporation ("Category 5"), Amathus Holdings, Ltd.
("Shareholder"), the sole shareholder of TransAxis S.A., a Swiss corporation,
(the "Company"), and Xxxxx Xxxxx ("Xxxxx"), an individual (Shareholder and
Xxxxx, together, the "Sellers").
RECITALS
WHEREAS, the Company is engaged in the business of selling credit card
transaction processing and other e-commerce services (the "Business"); and
WHEREAS, the Company has entered into a License Agreement with Digital
Courier Technologies, Inc., attached hereto as Exhibit A (the "License
Agreement"), pursuant to which the Company has the right to license and utilize
certain payment processing technology; and
WHEREAS, Shareholder owns all of the issued and outstanding shares of
capital stock of the Company; and
WHEREAS, Shareholder desires to sell to Category 5, and Category 5
desires to purchase from Shareholder, all of such issued and outstanding shares
of capital stock of the Company on the terms and conditions set forth herein
(the "Acquisition").
NOW, THEREFORE, in consideration of the premises, representations and
mutual covenants hereinafter set forth and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, agree as follows:
ARTICLE I
PURCHASE AND SALE OF THE SHARES
1.1 Purchase and Sale of the Shares. Sellers hereby agree to exchange,
sell, transfer and deliver to Category 5, and Category 5 hereby agrees to
purchase and acquire from Sellers, on the Closing Date (as hereinafter defined)
all of the outstanding capital stock (the "Shares") of the Company free from any
charge, lien, encumbrance or adverse claim of any kind whatsoever.
1.2 Consideration for Shares. Category 5 shall deliver at the Closing
(as hereinafter defined), in exchange and as consideration for the Shares, stock
certificates representing in the aggregate 15,000 shares of Category 5's Common
Stock (the "Category 5 Shares"), par value $.001 per share.
1
1.3 Delivery of Shares. At the Closing, Shareholder shall deliver to
Category 5, in addition to those items set forth in Section 8.2, in exchange for
the Category 5 Shares, stock certificates representing all of the Shares, duly
endorsed in favor of Category 5 or accompanied by stock powers duly executed in
favor of and in a form reasonably acceptable to Category 5, free from any
charge, lien, encumbrance or adverse claim of any kind whatsoever, together with
the minute books and stock ledger of the Company.
1.4 Legends. The certificates evidencing the Category 5 Shares shall
bear the following legend and any legends required by any state securities laws:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS.
THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT OR AN EXEMPTION
UNDER THE ACT THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO
THE REASONABLE SATISFACTION OF THE COMPANY."
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company and each of the Sellers jointly and severally agree with,
and represent and warrant to Category 5 as follows:
2.1 Corporate Existence, Good Standing and Authority. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation. The Company has full corporate power and
corporate authority to carry on its business as now being conducted and is
entitled to own, lease or operate the property and assets now owned, leased or
operated by it. The Company is qualified to do business, is in good standing and
has all required and appropriate licenses in each jurisdiction in which its
failure to obtain or maintain such qualification, good standing or licensing (i)
would, individually or in the aggregate, have or reasonably could be expected to
have a material adverse effect on the assets, business, financial condition, or
prospects of the Company (a "Material Adverse Effect"), or (ii) would result in
a material breach of any of the other representations, warranties or covenants
set forth in this Agreement. The Company has all requisite corporate power and
corporate authority to enter into this Agreement all other agreements and
documents contemplated hereby (the "Ancillary Agreements") and to consummate the
transactions contemplated hereby and thereby. This Agreement has been, and the
Ancillary Agreements, when executed, will be, duly executed and delivered by the
Company and each of the Sellers, has been authorized by all necessary corporate
action of the Company and constitutes a legal, valid and binding obligation of
the Company and each of the Sellers, enforceable against the Company and each of
the Sellers in accordance with its terms, except as enforcement may be limited
by equitable principles or bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to creditors' rights generally.
2
2.2 Capitalization. The authorized capital stock of the Company
consists of 100 shares of common stock, of which 100 shares are issued and
outstanding (the "Shares"). All of the Shares have been duly authorized and
validly issued and are fully paid and nonassessable. All of the Shares are being
exchanged for the Category 5 Shares. There are no options, warrants, conversion
rights, rights of exchange, or other rights, plans, agreements or other
commitments providing for the purchase, issuance or sale of any shares of the
Company's capital stock or any securities convertible into or exchangeable for
any shares of the Company's capital stock.
2.3 Good and Marketable Title To Shares. All of the Shares are owned,
beneficially and of record, only by the Sellers and are free from any charge,
lien, encumbrance or adverse claim of any kind whatsoever. The Sellers have the
absolute and unrestricted right, power, authority and capacity to transfer the
Shares to Category 5 and upon the Closing, without exception, Category 5 will
acquire from the Sellers legal and beneficial ownership of, good and valid title
to, and all rights to vote, the Shares, free from any charge, lien, encumbrance
or adverse claim of any kind whatsoever.
2.4 Subsidiaries. Except as set forth on Schedule 2.4, the Company does
not presently own, directly or indirectly, any interest in any other
corporation, association, joint venture or other business entity.
2.5 Financial Statements. The balance sheet and related statements of
income and cash flows of the Company since inception through September 2, 2001
(the "TransAxis Financial Statements") have been provided to Category 5. The
internal books and records of the Company from which the TransAxis Financial
Statements were prepared do not contain any information which is false or
misleading. The TransAxis Financial Statements (i) were prepared in accordance
with such books and records; (ii) were prepared in accordance with the Company's
accounting policies and principles, and are in accordance with international
accounting standards ("IAS"), applied on a consistent basis; and (iii) present
fairly the Company's financial position and results of operations at the dates
and for the periods reflected therein.
2.6 Properties. The Company does not own or hold title to any real
property, nor does it lease any real property.
2.7 Litigation. No litigation, arbitration or proceeding is pending or,
to the best knowledge of the Company, threatened by or against the Company, its
properties or assets, the Shares or its officers, directors or the Sellers
before any court or any government agency, and, to the knowledge of the Company,
no facts exist which might form the basis for any such litigation, arbitration
or proceeding. To the knowledge of the Company, the Company is not the subject
of any investigation for violation of any laws, regulations or administrative
orders applicable to its businesses by any governmental authority or any other
person. There is no judgment, writ, decree, injunction, rule or order of any
court, governmental department, commission, agency, instrumentality or
arbitrator outstanding against the Company, its properties or assets or the
Shares.
2.8 Non-Contravention. The execution and delivery of this Agreement by
the Company and consummation of the transactions contemplated hereby will not
result in or constitute any of the following: (i) a conflict, violation or
default with or an event that, with notice or lapse of time or both, would be a
3
default, breach, or violation of the Articles of Incorporation or Bylaws of the
Company, any contract, lease, license, permit, promissory note, conditional
sales contract, commitment, indenture, mortgage, deed of trust, or other
agreement, instrument or arrangement to which the Company is a party or by which
the Company or its assets are bound; (ii) an event that would permit any party
to terminate any agreement or instrument or to accelerate the maturity of or
permit the subordination of any indebtedness or other obligation of the Company;
(iii) the creation or imposition of any lien, charge, or encumbrance on any of
the assets of the Company; or (iv) conflict with or result in the violation or
breach of any law, rule or regulation of any governmental authority, or any
judgment, order, injunction or decree applicable to the Company or its assets.
2.9 Absence of Certain Changes. Except as set forth in Schedule 2.9,
since September 30, 2001, there has not been:
(a) Any Material Adverse Effect;
(b) Any indebtedness incurred by the Company, except such as may
have been incurred or entered into in the ordinary course of business;
(c) Any loan made or agreed to be made by the Company, nor has the
Company become liable or agreed to become liable as a guarantor with
respect to any loan;
(d) Any waiver or compromise by the Company of any right or rights
in the License Agreement;
(e) Any sale, assignment, or transfer of any intangible assets of
material value, including the License Agreement, other than licenses
granted in the ordinary course of business;
(f) Any purchase or other acquisition of, or any sale, lease,
disposition of, mortgage, pledge or subjection to any lien or
encumbrance on, any material property or asset, tangible or intangible,
of the Company or any agreement to do any of the foregoing;
(g) Any actual or threatened amendment, termination or loss of (i)
any material contract, license or other agreement to which the Company
is a party, including the License Agreement; or (ii) any certificate or
other authorization required for the continued operation by the Company
of any material portion of any of its business;
2.10 Employees. The Company has complied in all material respects with
all applicable laws, rules and regulations relating to employment, including
those relating to wages, hours, collective bargaining and the payment and
withholding of taxes and other sums as required by appropriate governmental
authorities.
2.11 Compliance with Law; Consents. The business and operations of the
Company have been and are being conducted in compliance with all laws, rules,
regulations and licensing requirements applicable thereto, except where failure
4
to be so in compliance would not have a Material Adverse Effect. The Company is
unaware of any facts which might form the basis for a claim that any material
violation of such laws exists. No consent, approval, order or authorization of,
or registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority or any third party on the part of
the Company or the Sellers is required in connection with the execution,
delivery and performance by the Company or the Sellers of this Agreement, the
consummation of the transactions contemplated hereby or Category 5's operation
of the business of the Company following the Closing Date.
2.12 Contracts and Other Agreements. The License Agreement is the only
material contract or agreement to which the Company is a party or by or to which
it or its assets or properties are bound or subject.. The License Agreement is
valid, existing, in full force and effect, binding upon the Company, and to the
best knowledge of the Company, binding upon the other party thereto in
accordance with its terms, and the Company is not in default under the License
Agreement, nor, to the best knowledge of the Company, is any other party to any
such contract or other agreement in default thereunder, nor does any condition
exist that with notice or lapse of time or both would constitute a default
thereunder, except such defaults as would not, individually or in the aggregate,
have a material adverse effect on the Business of Company.
2.13 No Termination of Business Relationship. Neither DCTI nor any of
its officers, directors, employees, agents or affiliates has given notice of any
intention to cancel or otherwise terminate the License Agreement or a material
business relationship with the Company and the Company has no knowledge of any
event (including, without limitation, the transactions contemplated hereby)
which would precipitate the cancellation or termination of, or entitle any such
entity or customer to terminate, such a material business relationship.
2.14 Consents of Non-Governmental Third Parties. No consent, waiver or
approval of any non-governmental third party is necessary for the consummation
by the Sellers and the Company of the transactions contemplated hereby.
2.15 Intellectual Property Rights. To the Company's best knowledge ,
the Company possesses all licenses and rights (collectively, the "Intellectual
Property") necessary for its business without any conflict with or infringement
of the valid rights of others and the lack of which could have a Material
Adverse Effect, and the Company has not received any notice of infringement upon
or conflict with the asserted rights of others. All Intellectual Property which
is licensed to the Company by others are identified in Schedule 2.15, and all
such licenses will continue in full force and effect upon the consummation of
the transactions contemplated hereby. The Company is not aware that any of its
employees is obligated under any contract (including licenses, covenants or
commitments of any nature) or other agreement, or subject to any judgment,
decree or order of any court or administrative agency, that would interfere with
the use of his or her best efforts to promote the interests of the Company or
that would conflict with the Company's business.
2.16 No Undisclosed Liabilities. The Company does not have any
liabilities, obligations or commitments of any nature (absolute, accrued,
contingent or otherwise) matured or unmatured ("Liabilities"). .
5
2.17 Representations Complete. None of the representations and
warranties made by the Sellers or the Company herein, nor any statement made in
any Exhibit, Schedule or certificate furnished pursuant to this Agreement,
contains or will contain any untrue statement of a material fact, or omit to
state any material fact required to be stated therein, or necessary in order to
make the statements made, in light of the circumstances under which they were
made, not misleading.
2.18 Broker's and Finder's Fees. Neither the Company nor the Sellers
has incurred, nor will it incur, directly or indirectly, any liability for
brokerage or finder's fees or agents' commissions or any similar charges in
connection with this Agreement or any transaction contemplated hereby.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
Each of the Sellers agree with, and represent and warrant to Category 5
as follows:
3.1 Good and Marketable Title to Shares. The Sellers have and will have
on the Closing Date, full right, power, and authority to sell, transfer and
deliver the Shares as provided in this Agreement.
3.2 Purchase Entirely for Own Account. Each Seller understands that
Category 5 is entering into this Agreement with each Seller in reliance upon
such Seller's representation to Category 5, which by such Seller's execution of
this Agreement such Seller hereby confirms, that the Category 5 Shares to be
received by such Seller, (for purposes of Article III, the "Securities") will be
acquired for investment for such Seller's own account, not as a nominee or
agent, and not with a view to the resale or distribution of any part thereof,
and that such Seller has no present intention of selling, granting any
participation in, or otherwise distributing the same. By executing this
Agreement, each Seller further represents that such Seller does not have any
contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participation to such person or to any third person, with
respect to any of the Securities. Each Seller represents that it has full power
and authority to enter into this Agreement.
3.3 Disclosure of Information. Each Seller believes that it has
received all the information it considers necessary or appropriate for deciding
whether to purchase the Securities. Each Seller further represents that it has
had an opportunity to ask questions and receive answers from Category 5
regarding Category 5 and its business and operations and the terms and
conditions of the offering of the Securities.
3.4 Investment Experience. Each Seller acknowledges that it is able to
fend for itself, can bear the economic risk of its investment and has such
knowledge and experience in financial or business matters that it is capable of
evaluating the merits and risks of the investment in the Securities.
3.5 Restricted Securities. Each Seller understands that the Category 5
Shares it is purchasing are characterized as "restricted securities" under the
United States securities laws inasmuch as they are being acquired from Category
5 in a transaction not involving a public offering and that under such laws and
6
applicable regulations such securities may be resold without registration under
the Securities Act of 1933, as amended (the "Act"), only in certain limited
circumstances. In this connection, each Seller represents that it is familiar
with Rule 144 promulgated under the Act, as now in effect, and understands the
resale limitations imposed thereby and by the Act. Each Selling Seller agrees
that it will (i) not sell, assign or transfer any of the Category 5 Shares to
anyone other than Category 5 or to a transferee who has agreed to be bound by
the Exchange Agreement, (ii) not make any disposition of all or any portion of
the Category 5 Shares unless such disposition is in compliance with all
applicable federal and state securities law, and (iii) not, to the extent
requested by an underwriter of common stock (or other securities) of Category 5
during a two-year period following the Closing, sell or otherwise transfer or
dispose of any such securities during a reasonable and customary period of time,
as agreed to by Category 5 and the underwriters.
3.6 Foreign Investor. If such Seller is not a United States person,
such Seller hereby represents that it has satisfied itself as to the full
observance of the laws of its jurisdiction in connection with any invitation to
subscribe for the Securities or any use of this Agreement, including (i) the
legal requirements within its jurisdiction for the purchase of the Securities,
(ii) any foreign exchange restrictions applicable to such purchase, (iii) any
governmental or other consents that may need to be obtained, and (iv) the income
tax and other tax consequences, if any, that may be relevant to the purchase,
holding, redemption, sale or transfer of the Securities. Such Investor's
subscription and payment for, and its continued beneficial ownership of the
Securities, will not violate any applicable securities or other laws of its
jurisdiction.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF CATEGORY 5
Category 5 represents and warrants to the Sellers and the Company that:
4.1 Corporate Existence, Good Standing and Authority. Category 5 has
been duly incorporated and is validly existing and in good standing under the
laws of the State of Delaware. Category 5 has full corporate power and authority
to enter into, deliver, perform its obligations under and carry out this
Agreement and the Ancillary Agreements to which it is a party. This Agreement
constitutes, and all agreements and Ancillary Agreements will constitute, valid
and legally binding obligations of Category 5 enforceable in accordance with
their terms, subject as to enforcement to bankruptcy, insolvency, reorganization
and other laws of general applicability relating to or affecting creditors'
rights and to general equity principles.
4.2 Category 5 Shares Fully Paid and Non-Assessable. The Category 5
Shares deliverable pursuant to Section 1.2 when issued and delivered as herein
provided, will be validly issued and outstanding shares of Category 5 Common
Stock, fully paid and non-assessable, free and clear of all liens, encumbrances,
restrictions and claims of every kind.
4.3 Consents and Approvals. Except as otherwise described herein, no
consent, approval, authorization, order, registration or qualification of or
with any court or any regulatory authority or any other governmental body is
required for the consummation by Category 5 of the transactions contemplated by
this Agreement.
7
4.4 Financial Statements. The consolidated audited financial statements
of Category 5 and its subsidiaries as filed with the Securities and Exchange
Commission (the "SEC") on Form 10K on October 4, (the "Category 5 Audited
Financial Statements") and the unaudited consolidated financial statements of
Category 5 and its subsidiaries as filed with the SEC on Form 10-Q on October
29, 1999 (the "Category 5 Unaudited Financial Statements") comply as to form in
all material respects with applicable accounting requirements and with
applicable rules and regulations of the Securities and Exchange Commission. The
Category 5 Audited Financial Statements and the Category 5 Unaudited Financial
Statements (i) were prepared in accordance with Category 5's internal books and
records; (ii) were prepared in accordance with Category 5's accounting policies
and principles, and are in accordance with generally accepted accounting
principles ("GAAP"), applied on a consistent basis; and (iii) present fairly
Category 5's financial position and results of operations at the dates for the
periods reflected therein.
4.5 Representations Complete. None of the representations and
warranties made by Category 5 herein, nor any statement made in any Exhibit,
Schedule or certificate furnished pursuant to this Agreement, contains or will
contain any untrue statement of a material fact, or omit to state any material
fact required to be stated therein, or necessary in order to make the statements
made, in light of the circumstances under which they were made, not misleading.
4.6 Broker's and Finder's Fees. Category 5 has not incurred, nor will
it incur, directly or indirectly, any liability for brokerage or finder's fees
or agents' commissions or any similar charges in connection with this Agreement
or any transaction contemplated hereby.
ARTICLE V
COVENANTS
5.1 Best Efforts. Each of Category 5, the Company and the Sellers will
use its best efforts to perform and fulfill all obligations on their respective
parts to be performed and fulfilled under this Agreement, and to cause all the
conditions precedent to the consummation of the transactions to be timely
satisfied, to the end that the transactions contemplated by this Agreement shall
be effected substantially in accordance with its terms. Each of Category 5, the
Company and the Sellers shall each cooperate with Category 5 in such actions and
in securing requisite approvals and shall deliver such further documents as
Category 5 may reasonably request as necessary to evidence such transactions.
5.2 Employee Matters. Category 5 shall enter into employment agreements
with such employees as are determined in good faith by the parties hereto(the
"Employment Agreements"), substantially in the form attached hereto as Exhibit
B.
8
ARTICLE VI
CONDITIONS PRECEDENT TO
OBLIGATIONS OF CATEGORY 5
The obligation of Category 5 to consummate the transactions
contemplated by this Agreement is subject to the satisfaction, at or before the
Closing, of all the following conditions, unless waived in writing by Category
5:
6.1 Certificates for Shares. Category 5 shall have received
certificates for the Shares, which shall constitute all of the issued and
outstanding capital stock of the Company.
6.2 Representations and Warranties True. All representations and
warranties of the Company and the Sellers in this Agreement or the Schedules and
Exhibits hereto, or in any written statement or certificate that shall be
delivered to Category 5 by the Company or the Sellers under this Agreement,
shall be true and correct on and as of the Closing Date as if made on the date
thereof.
6.3 Covenants Performed. The Company and the Sellers shall have
performed, satisfied, and complied with all covenants, agreements, and
conditions required by this Agreement to be performed or complied with by the
Company and the Sellers on or before the Closing Date.
6.4 Certificate. Category 5 shall have received from the Company and
the Sellers a certificate, dated the Closing Date, certifying, in such detail as
Category 5 and its counsel may reasonably request, that the conditions specified
in this Article VII have been satisfied.
6.5 Opinion of Counsel for the Company. Category 5 shall have received
an opinion from counsel for the Company, dated the Closing Date, substantially
in the form attached hereto as Exhibit C (the "Seller's Counsel Opinion").
6.6 No Material Adverse Effect. During the period from September 30,
2001 to the Closing, there shall not have been any Material Adverse Effect.
6.7 Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated hereby and all documents and
instruments incident to such transactions shall be in form and substance
reasonably satisfactory to Category 5 and its counsel, and Category 5 shall have
received all such counterpart originals or certified or other copies of such
documents as it may reasonably request.
6.8 Schedules. The Company shall have completed and attached hereto all
Schedules required by this Agreement, and all such Schedules shall have been
acceptable to Category 5, in its sole discretion.
9
ARTICLE VII
CONDITIONS PRECEDENT TO
OBLIGATIONS OF THE COMPANY AND THE SELLERS
The obligation of the Company and the Sellers to consummate the
transactions contemplated by this Agreement is subject to the satisfaction, at
or before the Closing, of all the following conditions, unless waived in writing
by the Company and the Sellers:
7.1 Representations and Warranties True. All representations and
warranties by Category 5 in this Agreement or the Schedules and Exhibits hereto,
or in any written statement or certificate that shall be delivered to the
Company by Category 5 under this Agreement shall be true on and as of the
Closing as though such representations and warranties were made on and as of
that date, and a duly authorized Category 5 officer shall have delivered a
certificate, dated the Closing Date, to the Company so certifying.
7.2 Covenants Performed. Category 5 shall have performed, satisfied,
and complied with all covenants, agreements, and conditions required by this
Agreement to be performed or complied with by Category 5 on or before the
Closing, and a duly authorized Category 5 officer shall have delivered a
certificate, dated the Closing Date, to the Company so certifying.
7.3 Delivery of Documents. The Company shall have received all
documents and other items to be delivered by Category 5 under Section 9.3.
7.4 No Material Adverse Change. During the period from the date hereof
to the Closing, there shall not have been any material adverse change in the
condition (financial or other), liabilities, business or prospects of Category
5. The Company shall have received a certificate from Category 5 dated the
Closing Date to the foregoing effect.
7.5 Required Consents. All consents, approvals and waivers from third
parties and governmental authorities necessary to the transactions as
contemplated hereby shall have been obtained.
ARTICLE VIII
CLOSING
8.1 Time and Place. The purchase and sale of the Shares hereunder (the
"Closing") shall occur at such time and date to which the parties may agree in
writing (the "Closing Date").
8.2 Deliveries of the Company. At the Closing, the Company will execute
and deliver or cause to be executed and delivered to Category 5:
(a) Stock Certificates. Certificates representing the Shares,
endorsed over to Category 5 or accompanied by duly executed stock
powers;
10
(b) Corporate Documents. The Articles of Incorporation of the
Company, certified by the appropriate government agency as of a recent
date and the Bylaws of the Company, certified by the secretary of the
Company as in effect at the Closing;
(c) Certificate of Good Standing. Certificates of Good Standing,
dated as of a recent date, with respect to the Company, issued by the
appropriate authority of each jurisdiction listed in Schedule 8.2(c);
(d) Resolutions. A copy of the resolutions of the Board of
Directors of the Company, certified by the secretary of the Company as
having been duly and validly adopted and being in full force and
effect, authorizing execution and delivery of this Agreement and
performance of the transactions contemplated hereby by the Company;
(e) Books and Records. All of the minute books, stock ledgers and
similar corporate records of the Company;
(f) Opinion of Counsel. The Seller's Counsel Opinion;
(g) Company's Certificate. A certificate from Company dated the
Closing Date, containing the information required pursuant to Section
7.4;
(h) Other Documents. Such other documents and instruments as
Category 5 or its counsel reasonably shall deem necessary to consummate
the transactions contemplated hereby.
All documents delivered to Category 5 shall be in form and substance
reasonably satisfactory to Category 5 and its counsel.
8.3 Deliveries of Category 5. At the Closing, Category 5 will execute
and deliver or cause to be executed and delivered to the Company simultaneously
with delivery of the items referred to in Section 9.2 above:
(a) Payment of the Consideration. The Category 5 Shares;
(b) Other Documents. Such other documents and instruments as
Category 5 or its counsel reasonably shall deem necessary to consummate
the transactions contemplated hereby.
ARTICLE IX
OBLIGATIONS OF SELLERS AND CATEGORY 5 AFTER CLOSING
9.1 Indemnification by the Sellers. The Sellers shall indemnify and
hold harmless Category 5 and its respective officers, directors, employees,
successors and assigns in respect of any and all claims, actions, suits or other
proceedings and any and all losses, costs, expenses, liabilities, fines,
penalties, interest, and damages, whether or not arising out of any claim,
action, suit or other proceeding (and including reasonable counsel and
accountants' fees and expenses and all other reasonable costs and expenses of
investigation, defense or settlement of claims and amounts paid in settlement)
11
incurred by, imposed on or borne by Category 5 (collectively "Damages")
resulting from:
(a) The breach of any of the representations or warranties made by
the Company or the Sellers in this Agreement;
(b) The breach or the failure of performance by the Company or the
Sellers of any of the covenants that they are to perform hereunder;
(c) The payment of any taxes (including interest and penalties) of
any kind or nature imposed, whether before or after the Closing, by any
government or subdivision thereof upon the business, assets or
employees or independent contractors of the Company or otherwise
resulting from or relating to the respective businesses or operations
of the Company prior to the Closing or any of its properties or assets
as they existed as of or any time prior to the Closing Date and the
transactions contemplated by this Agreement;
(d) All employment-related claims and causes of action, and all
other claims and causes of actions, that have arisen or arise out of in
connection with the operations of the businesses of the Company
conducted prior to the Closing (whether asserted, discovered or
established before or after the Closing).
Damages shall exclude any amount with respect to which Category 5 or
the Company as the case may be shall have received under any insurance policy
which provides coverage for the liability to which such amount relates.
9.2 Indemnification by Category 5. Category 5 shall indemnify and hold
harmless the Sellers, in respect of any and all claims, losses, costs, expenses,
liabilities, fines, penalties, interest, and damages (including reasonable
counsel and accountants' fees and expenses and all other reasonable costs and
expenses of investigation, defense or settlement of claims and amounts paid in
settlement) incurred by, imposed on or borne by the Sellers resulting from:
(a) The breach of any of the representations or warranties made by
Category 5 in this Agreement; or
(b) The breach or the failure of performance by Category 5 of any
of the covenants that it is to perform hereunder.
9.3 Indemnification Procedure for Claims. Whenever any claim shall
arise for indemnification hereunder, the party entitled to indemnification (the
"indemnified party") shall promptly notify the other party or parties (the
"indemnifying party") of the claim and, when known, the facts constituting the
basis for such claim; provided, that the indemnified party's failure to give
such notice shall not affect any rights or remedies of an indemnified party
hereunder with respect to indemnification for damages except to the extent that
the indemnifying party is materially prejudiced thereby. In the event of any
claim for indemnification hereunder resulting from or in connection with any
claim or legal proceedings by a third party, the notice to the indemnifying
party shall specify, if known, the amount or an estimate of the amount of the
liability arising therefrom. The indemnified party shall not settle or
compromise any claim by a third party for which it is entitled to
indemnification hereunder, without the prior written consent of the indemnifying
12
party (which shall not be unreasonably withheld) unless suit shall have been
instituted against it and the indemnifying party shall not have taken control of
such suit after notification thereof as provided in Section 13.8 this Agreement.
9.4 Manner of Indemnification. All indemnification hereunder shall be
effected by payment of cash or delivery of a certified or official bank check to
the indemnified party.
ARTICLE X
GENERAL PROVISIONS
10.1 Survival. The representations and warranties of the Company and
the Sellers set forth in this Agreement or in any instrument or document
furnished in connection herewith shall survive the Closing and all
representations and warranties set forth herein or in any instrument or document
furnished in connection herewith will expire on the third anniversary of the
Closing Date. No claim or action for indemnity for breach of any representation
or warranty shall be asserted or maintained by any party hereto after the
expiration of such representation or warranty pursuant to the provisions of this
Section 10.1 except for claims made in writing prior to such expiration and
actions (whether instituted before or after such expiration) based on any claim
made in writing prior to such expiration. Each party hereto may rely on the
representations and warranties made by the other parties hereto notwithstanding
any investigation of the facts constituting the basis of the representations and
warranties of any party by any other party hereto.
10.2 Further Assurances. At the request of any of the parties hereto,
and without further consideration, the other parties agree to execute such
documents and instruments and to do such further acts as may be necessary or
desirable to effectuate the transactions contemplated hereby.
10.3 Each Party to Bear Own Costs. Each of the parties shall pay all
costs and expenses incurred or to be incurred by it in negotiating and preparing
this Agreement and in closing and carrying out the transactions contemplated by
this Agreement.
10.4 Headings. The subject headings of the Articles and Sections of
this Agreement are included for purposes of convenience only, and shall not
affect the construction or interpretation of any of its provisions.
10.5 Entire Agreement; Waivers. This Agreement and the Exhibits and
Schedules hereto constitute the entire agreement between the parties pertaining
to the contemporaneous agreements, representations, and understandings of the
parties. No supplement, modification, or amendment of this Agreement shall be
binding unless executed in writing by all parties. No waiver of any of the
provisions of this Agreement shall be deemed, or shall constitute, a waiver of
any other provision, whether or not similar, nor shall any waiver constitute a
continuing waiver. No waiver shall be binding unless executed in writing by the
party making the waiver.
13
10.6 Third Parties. Nothing in this Agreement, whether express or
implied, is intended to confer any rights or remedies under or by reason of this
Agreement on any persons other than the parties to it and their respective
successors and assigns, nor is anything in this Agreement intended to relieve or
discharge the obligation or liability of any third person to any party to this
Agreement, nor shall any provision give any third persons any right of
subrogation or action over against any party to this Agreement.
10.7 Successors and Assigns. This Agreement shall not be assigned by
the Company or the Sellers without the written consent of Category 5. This
Agreement shall be binding on, and shall inure to the benefit of, the parties to
it and their respective heirs, legal representatives, successors, and assigns.
10.8 Notices. All notices, requests, demands, and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given when so delivered in person, by overnight courier, by facsimile
transmission (with receipt confirmed by telephone or by automatic transmission
report) or two business days after being sent by registered or certified mail
(postage prepaid, return receipt requested) as follows:
To the Company at: TransAxis, S.A.
C/o Pestalozzi Lachenal Xxxxx
0, xxxxx xx Xxxxxx
0000 Xxxxxx
Xxxxxxxxxxx
To the Sellers: Xxxxx Xxxxx
To Category 5 at: Category 5 Technologies, Inc.
0000 X. Xxxxxxx Xxxx., Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Fax: 000-000-0000
Any party may change its address for purposes of this paragraph by
giving notice of the new address to each of the other parties in the manner set
forth above.
10.9 Intentionally Left Blank.
10.10 Attorneys' Fees. If any party to this Agreement shall bring any
action, suit, counterclaim or appeal for any relief against the other,
declaratory or otherwise, to enforce the terms hereof or to declare rights
hereunder (collectively, an "Action"), the Prevailing Party shall be entitled to
recover as part of any such Action its reasonable attorneys' fees and costs,
including any fees and costs incurred in bringing and prosecuting such Action
and/or enforcing any order, judgment, ruling or award granted as part of such
14
Action. "Prevailing party" within the meaning of this Section 13.10 includes,
without limitation, a party who agrees to dismiss an Action upon the other
party's payment of all or a portion of the sums allegedly due or performance of
the covenants allegedly breached, or who obtains substantially the relief sought
by it.
10.11 Governing Law. The terms of this Agreement shall be governed by
the laws of the State of Utah applicable to agreements entered into, to be
wholly performed in and among residents exclusively of, Utah.
10.12 Consent to Jurisdiction and Forum Selection. The parties agree
that all actions or proceedings arising in connection with this Agreement shall
be tried and litigated exclusively in the State and Federal courts located in
Utah. The aforementioned choice of venue is intended by the parties to be
mandatory and not permissive in nature, thereby precluding the possibility of
litigation between the parties with respect to or arising out of this Agreement
in any jurisdiction other than that specified in this Section 13.12. Each party
hereby waives any right it may have to assert the doctrine of forum non
conveniens or similar doctrine or to object to venue with respect to any
proceeding brought in accordance with this paragraph, and stipulates that the
State and Federal courts located in Utah shall have in personam jurisdiction and
venue over each of them for the purposes of litigating any dispute, controversy
or proceeding arising out of or related to this Agreement. Each party hereby
authorizes and accepts service of process sufficient for personal jurisdiction
in any action against it as contemplated by this Section 13.11 by registered or
certified mail, return receipt requested, postage prepaid, to its address for
the giving of notices as set forth in this Agreement, or in the manner set forth
in Section 13.8 of this Agreement for the giving of notice. Any final judgment
rendered against a party in any action or proceeding shall be conclusive as to
the subject of such final judgment and may be enforced in other jurisdictions in
any manner provided by law.
10.13 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.
10.14 Severability. All provisions contained herein are severable and
in the event that any of them shall be held to be to any extent invalid or
otherwise unenforceable by any court of competent jurisdiction, such provision
shall be construed as if it were written so as to effectuate to the greatest
possible extent the parties' expressed intent; and in every case the remainder
of this Agreement shall not be affected thereby and shall remain valid and
enforceable, as if such affected provision were not contained herein.
10.15 Publicity. The parties shall cooperate with each other in the
development and distribution of all news releases and other public disclosures
relating to the transactions contemplated hereby. None of the parties shall
issue or make, or cause to have issued or made, any press release or
announcement concerning the transactions contemplated hereby without the advance
approval in writing of the form and substance thereof by the other parties,
unless otherwise required by applicable law.
15
IN WITNESS WHEREOF, the parties hereto have executed this Stock
Purchase and Exchange Agreement as of the date first above written.
TRANSAXIS S.A.
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
CATEGORY 5 TECHNOLOGIES, INC.
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
SELLERS
------------------------------
Amathus Holdings
16