Exhibit
2.1
EXECUTION
COPY
STOCK PURCHASE
AGREEMENT
BETWEEN
FIRSTWAVE TECHNOLOGIES,
INC.
AND
ALLABOUTTICKETS,
LLC
TABLE OF CONTENTS
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1.
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Definitions
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1
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2.
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Purchase
and Sale of Target Shares
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4
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(a)
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Basic
Transaction
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4
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(b)
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Purchase
Price
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4
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3.
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Representations and Warranties Concerning
Transaction
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4
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(a)
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Seller’s Representations and Warranties
regarding Seller
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4
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(b)
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Seller
Representations and Warranties Regarding Target
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5
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(c)
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Buyer’s Representations and
Warranties
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7
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4.
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[Intentionally Omitted]
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7
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5.
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Post-Closing Covenants
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7
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(a)
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Assigned
Contracts
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7
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(b)
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Termination of Guarantees
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8
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(c)
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Lease
Termination
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8
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(d)
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Collections and Operational Expenses
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8
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(e)
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Transition
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8
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(f)
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General
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9
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(g)
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Litigation Support
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9
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(h)
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Change
of Control of Target; Operation of Target Business
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9
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(i)
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Access
to Books and Records
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10
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6.
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Related
Documents and Actions
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10
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(a)
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Stock
Power
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10
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(b)
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License
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10
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(c)
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Note
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10
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(d)
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Negative
Pledge Agreement
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10
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(e)
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Pledge
Agreement
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10
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(f)
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Release
of Target
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10
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(g)
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Termination of Prior Agreements
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10
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(h)
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Resignation
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10
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(i)
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Cash in
Deposit Accounts
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10
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(j)
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Forgiveness Tax
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11
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(k)
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Secretary’s Certificate
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11
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(l)
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Closing
Statement
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11
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(m)
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License
Agreement
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11
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7.
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Survival
of Representations and Warranties
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11
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8.
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[Intentionally Omitted]
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11
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9.
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Miscellaneous
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11
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(a)
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Press
Releases and Public Announcements
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11
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(b)
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No
Third-Party Beneficiaries
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11
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(c)
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No Code
§338 Election
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11
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(d)
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Entire
Agreement
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12
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(e)
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Succession and Assignment
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12
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(f)
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Counterparts
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12
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(g)
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Headings
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12
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(h)
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Notices
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12
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(i)
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Governing Law
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13
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(j)
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Jurisdiction/Venue
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13
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(k)
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No
Agency
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13
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(l)
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Amendments and Waivers
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13
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(m)
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Severability
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13
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(n)
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Expenses
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13
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(o)
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Construction
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13
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(p)
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Incorporation of Exhibits and Schedules
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14
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(q)
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Governing Language; Currency
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14
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Exhibit
A—Form of Buyer Note
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Exhibit
B—Form of Negative Pledge Agreement
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Exhibit
C—Form of License Agreement
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Exhibit
D—Form of Pledge Agreement
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Schedule
I - List of Assigned Contracts
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STOCK PURCHASE
AGREEMENT
This Stock Purchase
Agreement (this “ Agreement
”) is entered into as of June 3, 2005, by and between
Firstwave Technologies, Inc., a Georgia corporation (“
Seller ”), and AllAboutTickets, LLC, a
Georgia limited liability company (“
Buyer ”). Buyer and Seller are
referred to herein individually as a “ Party
” and collectively herein as the “
Parties ”.
WHEREAS
, Seller owns all of the issued
share capital of Firstwave Technologies UK, Ltd., whose registered
offices are located at The Pavillion, 1 Atwell Place, Thames
Ditton, Surrey, KT7 ONF (“ Target
”); and
WHEREAS
, this Agreement contemplates a
transaction in which Buyer will purchase from Seller, and Seller
will sell to Buyer, all of the issued share capital of Target upon
the terms of, and for the consideration set forth in, this
Agreement.
NOW
, THEREFORE , in
consideration of the premises and the mutual promises herein made,
and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as
follows:
“ Affiliate ” has
the meaning set forth in Rule 12b-2 of the regulations promulgated
under the Securities Exchange Act.
“ Agreement ” has
the meaning set forth in the preface above.
“ April 1, 2005 ”
means 12:01a.m. England time on April 1, 2005.
“ Assigned Contracts
” means those contracts and agreements of Target listed on
Schedule I , all of which are to be assigned by Target
to Seller as promptly
after the date hereof as is practicable.
“ Buyer ” has the
meaning set forth in the preface above.
“ Buyer Note ”
has the meaning set forth in §2(b) below.
“ Buyer Sub”
shall mean a subsidiary wholly owned by Buyer, one or more
shareholders of Buyer as of the date of this Agreement, and Shaun
Lucas.
“ Change of Control
” means the occurrence of any of the following events:
(i) the ceasing of the stockholders or other owners of Buyer
as of the date of execution and delivery of this Agreement to have
record and beneficial ownership (within the meaning of
Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the “ Exchange Act ”)) and
sole control of more than seventy percent (70%) (on a fully-diluted
basis, disregarding any director qualifying share ownership) of the
combined voting power or economic benefit of the then issued or
outstanding equity interests of Buyer (or any successor, by
operation of law or otherwise, or assign thereof) entitled to vote
generally in the election of members to the board of directors,
board of managers or similar governing body of Buyer (or such
successor or assign), (ii) the ceasing of Buyer to have record
and beneficial ownership (within the meaning of Rule 13d-3
under the Exchange Act) and sole control, of one hundred percent
(100%) (on a fully-diluted basis, disregarding any director
qualifying share ownership) of the voting power of the then issued
or outstanding equity interests of Target (or any successor, by
operation of law or otherwise, or assign thereof) entitled to vote
generally in the election of members of the board of directors,
board of managers or similar governing body of Target (or such
successor or assign); (iii) individuals who constitute the
board of directors, board of managers or other similar body
of
Buyer or Target
on the Closing Date (each an “ Incumbent
Board ”) shall cease to constitute for any reason at
least two-thirds of the members of such governing body of Buyer and
Target at any time; (iv) the sale of all, substantially all or
any significant portion of the assets of Buyer or Target; or
(v) the entry into any agreement to accomplish or the effect
of which, if the terms thereof are consummated, would be any of the
events described in clauses (i) through (iv) above.
Notwithstanding the forgoing, Buyer may, upon Seller’s prior
written consent, organize Buyer Sub and transfer the Target Shares
to Buyer Sub, and any such transfer with Seller’s prior
written consent shall not constitute a “ Change of
Control .” It is understood and agreed that Seller
may withhold its consent to this transfer for any reason or no
reason whatsoever, in its sole discretion, except that if Buyer Sub
becomes a joint obligor or guarantor of the Buyer Note, Buyer Sub
executes and delivers a security agreement in a form that is
sufficient to establish and perfect a first priority security
interest and pledge in all of Buyer Sub’s assets, Buyer Sub
executes and delivers to Seller a pledge agreement and all stock
and share powers and other documents ancillary thereto with respect
to the Target Shares that are sufficient to perfect a first
priority security interest in the Target Shares in favor of Seller,
and Buyer, Buyer Sub and Target execute any modifications to the
Transaction Documents that may be necessary to preserve the rights
and obligations set forth therein, all in such forms as are
reasonably acceptable to Seller, then Seller will not unreasonably
withhold its consent to such transfer; and further provided that in
addition to the provisions set forth above it also shall be a
Change in Control if, after Target Shares are transferred to Buyer
Sub, Buyer, the shareholders of Buyer of the date hereof and Shaun
Lucas cease to have record and beneficial ownership (within the
meaning of Rule 13d-3 under the Exchange Act) and sole
control, of one hundred percent (100%) (on a fully-diluted basis,
disregarding any director qualifying share ownership) of the voting
power of the then issued and outstanding equity interests of Buyer
Sub (or any successor, by operation of law or otherwise, or assign
thereof) entitled to vote generally in the election of members of
the board of directors, board of managers or similar governing body
of Buyer Sub (or such successor or assign) or Buyer Sub ceases to
have record and beneficial ownership (within the meaning of
Rule 13d-3 under the Exchange Act) and sole control, of one
hundred percent (100%) (on a fully-diluted basis, disregarding any
director qualifying share ownership) of the voting power of the
then issued and outstanding equity interests of Target (or any
successor, by operation of law or otherwise, or assign thereof)
entitled to vote generally in the election of members of the board
of directors, board of managers or similar governing body of Target
(or such successor or assign).
“ Code ” means
the U.S. Internal Revenue Code of 1986, as amended.
“ Financial Statements
” means the financial statements of Target, prepared in
accordance with generally accepted accounting principles and
in
a manner consistent with past practices.
“ Knowledge of Seller
” or “ to the knowledge of Seller ” or
similar phrases mean those matters actually known by Richard Brock
or Judi Vitale.
“ License Agreement
” means the License Agreement in the form of
Exhibit C attached hereto executed by Buyer and Seller
(with all blanks appropriately
“ Lien ” means
any mortgage, pledge, lien, encumbrance, charge, or other security
interest, other than (a) liens for taxes not yet due and
payable or for taxes that the taxpayer is contesting in good faith
through appropriate proceedings, (b) purchase money liens and
liens securing rental payments under capital lease arrangements,
(c) that certain rent deposit deed in the approximate amount
of £44,000 in favor of SHL Group Plc; and (d) other liens
arising in the Ordinary Course of Business and not incurred in
connection with the borrowing of money.
“ Negative Pledge
Agreement ” means the Negative Pledge Agreement in
substantially the form of Exhibit B attached hereto
executed by Buyer in favor
of Seller (with all blanks appropriately
completed).
“ Operational Expenses
” means all expenses of Target, including all expenses with
respect to the office space used by Target (rent, utilities,
insurance, etc.), all expenses related to Target’s employees
(salary, bonus, travel, expense reimbursement, insurance,
perquisites, severance, vacation pay, sick pay, holiday pay, etc.),
all expenses relating to software development and support
activities, all expenses relating to the acquisition, maintenance
and use of equipment (computers, software, copiers, telephones,
telecommunication charges, etc.), all professional and service
fees, all sales and marketing expenses, and all Taxes.
“ Ordinary Course of
Business ” means the ordinary course of business
consistent with past custom and practice (including with respect to
quantity
“ Parties ” and
“ Party ” have the meanings set forth in the
preface above.
“ Person ” means
an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, a U.K. limited company,
any other business entity or a governmental entity (or any
department, agency, or political subdivision thereof).
“ Pledge Agreement
” means the Pledge Agreement in the form of
Exhibit D attached hereto executed by Buyer
Sub.
“ Purchase Price
” has the meaning set forth in §2(b) below.
“ SEC ” means the
United States Securities and Exchange Commission.
“ Securities Act
” means the Securities Act of 1933, as amended.
“ Securities Exchange
Act ” means the Securities Exchange Act of 1934, as
amended.
“ Seller ” has
the meaning set forth in the preface above.
“ Subsidiary ”
means, with respect to any Person, any Person of which (i) if
a corporation, a majority of the total voting power of shares of
stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers, or
trustees thereof is at the time owned or controlled, directly or
indirectly, by such first Person or one or more of the other
Subsidiaries of such first Person or a combination thereof or
(ii) if a limited liability company, partnership, association,
or other business entity (other than a corporation), a majority of
partnership or other similar ownership interest thereof is at the
time owned or controlled, directly or indirectly, by that Person or
one or more Subsidiaries of that Person or a combination thereof
and for this purpose, a Person or Persons owns a majority ownership
interest in such a business entity (other than a corporation) if
such Person or Persons shall be allocated a majority of such
business entity’s gains or losses or shall be or control any
managing director or general partner of such business entity (other
than a corporation). The term “Subsidiary” shall
include all Subsidiaries of such Subsidiary.
“ Target ” has
the meaning set forth in the recitals above.
“ Target Shares ”
means all shares of Target owned by Seller representing all of the
issued share capital of Target.
“ Tax ” and
“ Taxes ” means any federal, state, local,
foreign, provincial or city income, gross receipts, license,
payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental (including taxes under
Code §59A), customs duties, capital stock, franchise,
profits, withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any
interest, penalty, or addition thereto, whether disputed or
not.
“ Transaction Documents
” means this Agreement, the Buyer Note, the Negative Pledge
Agreement, the License Agreement, and all other documents and
agreements referenced therein, together with all schedules,
exhibits and annexes to each of them.
2.
Purchase and Sale of Target
Shares .
(a)
Basic Transaction
. On and subject to the terms and
conditions of this Agreement, Buyer hereby purchases from Seller,
and Seller hereby sells to Buyer, all of the Target Shares for the
aggregate consideration specified below in this §2.
(b)
Purchase Price
. Buyer agrees to pay to Seller the
aggregate amount of $2,214,000.00 (as adjusted pursuant to the
terms of this Agreement, the
“ Purchase Price ”) as
follows:
(i)
Simultaneously with the execution of
this Agreement, Buyer has paid Seller in immediately available
funds the amount of $256,000.00; and
(ii)
Simultaneously with the execution of
this Agreement, Buyer has delivered to Seller the promissory note
in the form of Exhibit A attached hereto in
the aggregate
principal amount of $1,620,000 (the “ Buyer
Note ”), which shall serve as partial consideration
for the license granted by Seller to Buyer pursuant to the License
Agreement;
(iii)
Simultaneously with the execution of
this Agreement, Target has executed and delivered to Seller the
License Agreement in the form attached hereto
as
Exhibit C pursuant to which Target agrees to pay, in
addition to the $1,620,000 payable under the Buyer Note, the
aggregate amount of $338,000 in prepaid royalties to
Seller.
3.
Representations and Warranties
Concerning Transaction .
(a)
Seller’s Representations
and Warranties regarding Seller . Seller represents and warrants to Buyer and
Target that the statements contained in this §3(a)
are
true and
correct as of the closing of the transactions contemplated by this
Agreement.
(i)
Organization of
Sellers . Seller is duly
organized, validly existing, and in good standing under the laws of
the State of Georgia.
(ii)
Authorization of
Transaction . Seller has
full power and authority (including full corporate power and
authority) to execute and deliver this
Agreement
and, upon receipt of the consents and approvals contemplated
hereby, to perform its obligations hereunder. This Agreement
constitutes the valid and legally binding obligation of Seller,
enforceable against Seller in accordance with its terms and
conditions, except as enforceability may be limited by laws
concerning bankruptcy, insolvency, creditors’ rights or
general equitable principles.
(iii)
Noncontravention
. Neither the execution and the
delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will
(A) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling,
charge, or other restriction of any government, governmental
agency, or court to which Seller is subject, or (B) result in
the imposition or creation of a Lien upon or with respect to the
Target Shares.
(iv)
Target Shares
. Seller holds of record and owns
beneficially all Target Shares, free and clear of any restrictions
on transfer (other than restrictions
under the
Securities Act and other securities laws), Liens and purchase
rights. Seller is not a party to any option, warrant, purchase
right, or other contract or commitment that could require Seller to
sell, transfer, or otherwise dispose of any capital stock of Target
(other than this Agreement). The Target Shares constitute all of
the issued share capital of Target.
(v)
Broker’s Fees
. Neither the Target nor the Seller
has any liability or obligation to pay any fees or commissions to
any broker, finder or agent with
respect to the
transactions contemplated by this Agreement.
(vi)
No Intent to Sue
. Seller has no plan, proposal or
intention of suing or bringing a claim (including without
limitation a claim sounding in a conflict of
interest,
violation of fiduciary duty or diversion of corporate opportunity)
against David Simmons or Shaun Lucas with respect to any capacity
either may have held in Seller or Target for any action or inaction
in such capacity in connection with the attempt of Seller to sell
Target or with respect to any negotiations to sell Target. David
Simmons and Shaun Lucas shall be third party beneficiaries of this
representation.
(b)
Seller Representations and
Warranties Regarding Target . Seller represents and warrants to Buyer and
Target that the statements contained in this §3(b)
are
true and
correct as of the closing of the transactions contemplated by this
Agreement. With respect to the statements made in clauses (vi)
through (x) of this §3(b), such statements are made to the
Knowledge of Seller. To the extent David Simmons or Shaun Lucas
know or reasonably should know any fact which would render any of
the following representations and warranties untrue, Seller will
not be deemed to have made such representation or
warranty.
(i)
Organization of the
Target . The Target is a
limited stock company or other entity duly organized, validly
existing and in good standing under the laws
of the
jurisdiction of its incorporation. The Target is duly authorized to
conduct the business it is presently conducting, and is in good
standing, under the laws of each jurisdiction where the failure to
qualify would have a material adverse effect.
(ii)
Authorizations
. The Target has full power and
authority to execute and deliver each of the Transaction Documents
to which the Target is a party,
and to perform
its obligations thereunder. Each of the Transaction Documents to
which Target is a party constitutes the valid and legally binding
obligation of the Target, enforceable in accordance with its terms
and conditions, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors’ rights generally, or by the exercise of
judicial discretion in accordance with general equitable
principles.
(iii)
Noncontravention
. Neither the execution and the
delivery of the Transaction Documents by the Target and the Seller,
nor the consummation by the
Target and the
Seller of the transactions contemplated thereby, will
(i) violate in any material respect any Law, rule, injunction,
judgment, order, decree, stipulation, ruling, charge or other
restriction of any government or court to which the Target is
subject, or any provision of the charter or other organizational
documents of the Target, or (ii) to the Knowledge of Seller
conflict with, result in a material breach of, constitute a
material default under, result in the acceleration of, create in
any Person the right to accelerate, terminate, modify or cancel, or
require any notice under, any agreement, contract, lease, permit,
instrument or other arrangement to which the Target is a party, or
by which the Target is bound or to which any assets of the Target
is subject (or result in the imposition of any Lien upon any assets
of the Target), it being understood and agreed that no
representation or warranty is being given by Target or Seller under
this Agreement with respect to the Assigned Contracts.
(iv)
Capitalization
. All of the Target Shares are
validly issued, fully paid and nonassessable. No
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