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STOCK PURCHASE AGREEMENT

Stock Purchase Agreement

STOCK PURCHASE AGREEMENT | Document Parties: FIRSTWAVE TECHNOLOGIES, INC. | ALLABOUTTICKETS, LLC You are currently viewing:
This Stock Purchase Agreement involves

FIRSTWAVE TECHNOLOGIES, INC. | ALLABOUTTICKETS, LLC

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Title: STOCK PURCHASE AGREEMENT
Governing Law: Georgia     Date: 6/9/2005
Industry: Software and Programming     Sector: Technology

STOCK PURCHASE AGREEMENT, Parties: firstwave technologies  inc. , allabouttickets  llc
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Exhibit 2.1

 

EXECUTION COPY

 

 

 

 

STOCK PURCHASE AGREEMENT

 

 

BETWEEN

 

 

FIRSTWAVE TECHNOLOGIES, INC.

 

 

AND

 

 

ALLABOUTTICKETS, LLC

 

 

 

 

 

 

 

 

 


 

 

TABLE OF CONTENTS

 

 

  1.

 

  Definitions

 

 

  1

 

 

 

 

  2.

 

  Purchase and Sale of Target Shares  

  4

 

 

  (a)

  Basic Transaction

  4

 

 

  (b)

  Purchase Price  

  4

 

 

 

 

 

 

  3.

 

  Representations and Warranties Concerning Transaction  

  4

 

 

  (a)

  Seller’s Representations and Warranties regarding Seller  

  4

 

 

  (b)

  Seller Representations and Warranties Regarding Target  

  5

 

 

  (c)

  Buyer’s Representations and Warranties  

  7

 

 

 

 

 

 

  4.

 

  [Intentionally Omitted]

  7

 

 

 

 

 

 

  5.

 

  Post-Closing Covenants  

  7

 

 

  (a)

  Assigned Contracts  

  7

 

 

  (b)

  Termination of Guarantees  

  8

 

 

  (c)

  Lease Termination  

  8

 

 

  (d)

  Collections and Operational Expenses  

  8

 

 

  (e)

  Transition

  8

 

 

  (f)

  General

  9

 

 

  (g)

  Litigation Support  

  9

 

 

  (h)

  Change of Control of Target; Operation of Target Business  

  9

 

 

  (i)

  Access to Books and Records  

  10

 

 

 

 

 

 

  6.

 

  Related Documents and Actions  

  10

 

 

  (a)

  Stock Power  

  10

 

 

  (b)

  License

  10

 

 

  (c)

  Note

 

  10

 

 

  (d)

  Negative Pledge Agreement  

  10

 

 

  (e)

  Pledge Agreement  

  10

 

 

  (f)

  Release of Target  

  10

 

 

  (g)

  Termination of Prior Agreements  

  10

 

 

  (h)

  Resignation  

  10

 

 

  (i)

  Cash in Deposit Accounts  

  10

 

 

  (j)

  Forgiveness Tax  

  11

 

 

  (k)

  Secretary’s Certificate  

  11

 

 

  (l)

  Closing Statement  

  11

 

 

  (m)

  License Agreement  

  11

 

 

 

 

 

 

  7.

 

  Survival of Representations and Warranties  

  11

 

 

 

 

 

 

  8.

 

  [Intentionally Omitted]

  11

 

 

 

 

 

 

  9.

 

  Miscellaneous  

  11

 

 

  (a)

  Press Releases and Public Announcements  

  11

 

 

  (b)

  No Third-Party Beneficiaries  

  11

 

 

  (c)

  No Code §338 Election  

  11

 

 

  (d)

  Entire Agreement  

  12

 

 

  (e)

  Succession and Assignment  

  12

 

 

  (f)

  Counterparts

  12

 

 

  (g)

  Headings

  12

 

 

  (h)

  Notices  

  12

 

 

i


 

 

 

 

  (i)

  Governing Law  

  13

 

 

  (j)

  Jurisdiction/Venue  

  13

 

 

  (k)

  No Agency  

  13

 

 

  (l)

  Amendments and Waivers  

  13

 

 

  (m)

  Severability

  13

 

 

  (n)

  Expenses  

  13

 

 

  (o)

  Construction

  13

 

 

  (p)

  Incorporation of Exhibits and Schedules  

  14

 

 

  (q)

  Governing Language; Currency  

  14

 

 

 

 

 

 

  Exhibit A—Form of Buyer Note

 

  Exhibit B—Form of Negative Pledge Agreement

 

  Exhibit C—Form of License Agreement

 

  Exhibit D—Form of Pledge Agreement

 

  Schedule I - List of Assigned Contracts

 


 

ii


 

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:

 

1.    Definitions

 

   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

 

1


 

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  

        completed).

 

   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).

  

2


 

   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

        and frequency).

 

   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.

 

 

3


 

   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.

 

 

4


 

(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.

 

5


 

(iv)    Capitalization . All of the Target Shares are validly issued, fully paid and nonassessable. No


 
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