ACQUISITION AGREEMENT
Exhibit 10.11
AGREEMENT made this 1st day of November, 2004, by and between KNIGHT XXXXXX,
INC., a Delaware corporation, (hereinafter “Knight Xxxxxx”), and its subsidiary, PAYCELL, INC., a
California corporation (hereinafter “PayCell”), CELTRON INTERNATIONAL, INC., a Nevada
corporation (hereinafter “CLTR”), its subsidiary, ORBTECH HOLDINGS LIMITED, a South
African corporation (hereinafter “Orbtech”,) and its operating subsidiary, CREDITPIPE (PTY) LTD.,
a South African corporation, (hereinafter “CreditPipe”),
In consideration of the mutual promises, covenants, and representations contained herein, and
other good and valuable consideration,
THE PARTIES HERETO AGREE AS FOLLOWS:
1. RECITALS:
This agreement is made and entered into with reference to the following facts and
circumstances:
A. Orbtech owns 100% of the 200 outstanding common shares of CreditPipe (Pty) Ltd.;
X. Xxxxxx Xxxxxx owns 100% of the 100 outstanding common shares of PayCell, Inc.;
C. CreditPipe holds a license from Mosaic Software, for a Postillion Financial switch, which
will enable CreditPipe and PayCell to become their own acquiring house with direct entry into the
banking network to switch and effect financial transactions, specifically on mobile commerce and
credit card transactions originating form the businesses of CreditPipe and PayCell. For this,
CreditPipe is indebted to Orbtech for the 1.5 million Rand cost of acquisition of the license;
D. This agreement is intended to be the definitive operating agreement which determines the
rights and duties of Knight Xxxxxx and PayCell, on the one hand, and Orbtech and CreditPipe, on the
other hand, with respect to the establishment and operation of a worldwide mobile credit card
processing network (“the network”) for the benefit of all parties, and supersedes any and all
agreements between the parties with respect to the network; and
X. Xxxxxx Xxxxxx and PayCell have committed the sum of ZAR 5 million (5 million Rand) to
Orbtech and CreditPipe for the establishment of the network, in exchange for ownership of 50% of
the license and 50% of the common share capital of CreditPipe, with an additional option to purchase
up to 60% of the common share capital of CreditPipe.
2. OWNERSHIP OF THE LICENSE
For a one time royalty payment of 1.5 million Rand, CreditPipe hereby sublicenses to
PayCell, the Postillion Switch for PayCell’s use worldwide, with the exception of the African
continent. PayCell shall be bound to the same terms and conditions for the use of the license, a copy
of which is attached hereto as Exhibit A, as exist between CreditPipe and Mosaic Software.
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3. OWNERSHIP OF CREDITPIPE
PayCell shall purchase from Orbtech, for a total price of 1 million Rand, 20 common shares
of CreditPipe, and shall purchase from CreditPipe, 160 common shares of CreditPipe, to be issued
from its treasury (“treasury stock”), in exchange for 2.5 million Rand.
4. SCHEDULE OF PAYMENTS
The payments for the sublicense and shares called for in this agreement shall be made to
Orbtech at the rate of 1 million Rand per month, on the first day of each month, beginning November
1, 2004 and continuing until the sum of 5 million Rand has been paid in full. The first 1.5 million
Rand paid shall be applied toward the purchase of the license, the next 1 million Rand shall be
applied toward the acquisition of CreditPipe stock from Orbtech, and the remaining payments applied
toward the acquisition of treasury stock from CreditPipe. Upon receipt of each payment for the
treasury stock, CreditPipe shall issue a pro rata amount of common shares from its treasury to
PayCell that corresponds to the payments received. If all payments are made on or before March 5,
2005, CreditPipe grants to PayCell an option to purchase an additional 20 shares of CreditPipe for the
sum of 100,000 Rand, so that PayCell’s holdings of CreditPipe shall be 60%. If all payments are not
made by March 5, 2005, then PayCell shall retain the percentage of CreditPipe stock it has paid for,
and there shall be no further recourse for CreditPipe or Orbtech against PayCell or Knight Xxxxxx.
5. LICENSE OF TECHNOLOGY
As additional consideration for the payments by PayCell recited herein, CLTR and
CreditPipe shall enter into a new license for PayCell’s worldwide use (excepting the African
continent) of all CreditPipe technology, which shall supersede that license agreement between the
parties dated May 16, 2004.
6. MISCELLANEOUS PROVISIONS:
This agreement shall be construed in accordance with the laws of the State of Nevada.
This agreement shall be binding upon and shall inure to the benefit of the parties hereto, their
beneficiaries, heirs, representatives, assigns, and all other successors in interest.
Each of the parties does hereby promise and agree to execute any and all documents required
to be executed and perform all acts required to be performed in order to effectuate the terms of this
agreement.
This agreement contains all of the agreements and understandings of the parties hereto with
respect to the matters referred to herein, and no prior agreement or understanding pertaining to any
such matters shall be effective for any purpose.
Each of the parties does hereby agree to the use of the particular language of the provisions
of this Agreement, and any question of doubtful interpretation shall not be resolved by any rule of
interpretation against the party who causes the uncertainty to exist or against the draftsman.
This agreement may not be superseded, amended or added to except by an agreement in
writing, signed by the parties hereto, or their respective successors-in-interest.
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Any waiver of any provision of this agreement shall not be deemed a waiver of such
provision as to any prior or subsequent breach of the same provision or any other breach of any other
provision of this agreement.
If any provision of this agreement is held, by a court of competent jurisdiction, to be invalid,
or unenforceable, said provisions shall be deemed deleted, and neither such provision, its severance
or deletion shall affect the validity of the remaining provisions of this agreement, which shall,
nevertheless, continue in full force and effect.
The parties may execute this agreement in two or more counterparts, each of which shall be
signed by all of the parties; and each such counterpart shall be deemed an original instrument as
against any party who has signed it.
The parties shall use their reasonable best efforts to obtain the consent of all necessary
persons and agencies to the transfer of shares provided for in this agreement.
The parties agree that they will endeavor to settle any dispute, controversy or claim arising out of
or relating to this Agreement, which they are unable to settle through direct discussions, by mediation
administered by the American Arbitration Association in accordance with the provisions of the
Commercial Mediation Rules of the American Arbitration Association, and agree that the arbitrator
shall have the power to make injunctive orders, which orders shall be enforceable in any court of
competent jurisdiction, without the right of either party to appeal. The parties agree to conduct good
faith efforts to resolve their dispute by mediation. The parties agree to submit to mediation
conducted by the American Arbitration Association and to conduct the mediation in a mutually
agreed upon location.
Any dispute, controversy or claim arising out of or relating to this contract, or the breach
thereof, shall be finally settled by arbitration administered by the American Arbitration Association,
in accordance with the commercial rules of the American Arbitration Association, and judgment on
the award rendered by the arbitrator may be entered in any court having jurisdiction. The number of
arbitrators shall be one, the language of the arbitration shall be in English, and the place of arbitration
shall be Los Angeles, California, United States of America.
The prevailing party in any mediation, arbitration, or litigation shall be entitled to recover
from the other party reasonable attorney's fees, court costs, and the administrative costs, fees, and
expenses of the American Arbitration Association, each as applicable, incurred in the same, in
addition to any other relief that may be awarded.
IN WITNESS WHEREOF, the parties have executed this agreement as of the day and
year first above written.
CELTRON INTERNATIONAL, INC.
By__________________________________
Xxxxx Xxxxxxxxx, President
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ORBTECH HOLDINGS LIMITED
By__________________________________
Xxxxx Xxxxxxxxx, President
CREDITPIPE (PTY.), LTD.
By__________________________________
Xxxxxxx Xxxxxxxxx, President
KNIGHT XXXXXX, INC.
By__________________________________
Xxxxxxx Xxxxxxx, VP, Secretary
PAYCELL, INC.
By__________________________________
Xxxxxxx Xxxxxxxxx, President
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