Exhibit 10.2
OFFER TO ACQUIRE XXXXXXXXX.XXX INC SHARES
This Agreement sets out the terms and conditions upon which CathayOnline Inc.
offers to acquire all of the issued and outstanding shares of the XxxxxXxxx.xxx
Inc., which currently holds an appointment as XXX.XXX, Inc.'s Non-Exclusive
Reseller with First to Market those Services, which terms are more particularly
defined in agreement dated July 2, 1999 between XXX.XXX, Inc and XxxxxXxxx.xxx,
Inc. and which agreement is appended hereto as Schedule A forming part of this
Agreement. This Agreement also set out the terms and conditions of the agreement
by each of the undersigned shareholders to transfer all of the shares of
XxxxxXxxx.xxx Inc.
1. DEFINITIONS
1.1 Definitions: As used in this Agreement, the following terms shall have
the meanings ascribed hereto:
"Agreement" means this Agreement, including all written amendments and
modifications thereof and all schedules and exhibits thereto;
"Cathay" means CathayOnline Inc., a company incorporated under the laws
of the State of Nevada;
"Cathay Shares" means the common shares of $0.001 par value;
"Closing" means the completion by Cathay and the Shareholders of Torch
of the
transaction set forth herein; "Closing Date" has the meaning set out in
section 5.1;
"Shareholders" means collectively all of the shareholders of Torch;
"Torch" means XxxxxXxxx.xxx Inc., as company incorporated under the
laws of the Turks & Caicos, BWI;
"Torch Shares" means the common shares of $1.00 par value;
"XXX.XXX" means a company incorporated under the laws of the State of
Delaware.
"XXX.XXX Agreement" means that Reseller Agreement contained in Schedule
A herto.
2.PURCHASE AND SALE
2.1 Purchase and Sale Relying upon the representations and warranties
herein contained and subject to the terms and conditions hereof, Cathay
hereby offers to acquire from each of the Shareholders and each of the
Shareholders hereby agrees to sell to Cathay that number of Torch
Shares held by each of the Shareholders representing in the aggregate
all of the issued and outstanding Shares of Torch.
2.2 Consideration : In consideration for the sale of the Torch Shares to
Cathay, Cathay agrees to issue Cathay Shares to the Shareholders pro
rata in accordance with the percentage of Torch Shares held by each
Shareholder as set forth as Schedule B, attached hereto and forming
part of this Agreement.
2.3 Cathay Share Resale Restrictions: Each of the Shareholders acknowledges
that:
a) Cathay is a non reporting issuer list on NASDAQ OTC Bulletin
Board; and
B) THE CATHAY SHARES HAVE NOT BEEN AND WILL NO BE REGISTERED WITH
THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
("1933 ACT') AND REGULATION S OF THE RULES AND REGULATIONS
PROMULGATED THEREUNDER, AND MAY NOT BE SOLD OR OFFERED WITHIN
THE UNITED STATES (AS DEFINED IN REGULATION S) EXCEPT PURSUANT
TO THE REGISTRATION UNDER OF AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE "1933 ACT".
c) The Cathay Shares will be subject to a hold period imposed
under the appropriate securities laws and certificates
representing the Cathay Shares will be restricted with a
legend in respect to such hold period; and
d) The Cathay Shares may, pursuant to requirements imposed by
applicable securities regulatory authorities or by virtue of a
Shareholder becoming a "control person", as defined under the
appropriate US Securities Act, be subject to restrictions in
terms of issuance, escrow arrangements, resale or such other
limitations as may be mandated by such securities regulatory
authority; and
e) The Cathay Shares will be issued in accordance with the rules
and regulations of the Securities and Exchange Commission
(SEC), under the Securities Act of 1933 as amended.
3. REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of Sbareholder~: Each Shareholder
represents and warrants, in respect of that number of Torch Shares held
by him as set forth in Schedule B, to and in favour of Cathay as
follows and acknowledges that Cathay is relying upon such
representations and warranties in consummating the transaction
contemplated by this Agreement.
a) Such Shareholder is, or shall at the Closing Date be, the
registered and beneficial owner of that number of Torch Shares
set forth in Schedule B with good and marketable title
thereto, free and clear of all charges, liens or encumbrances,
any option or similar right or right of first refusal or any
other right to acquire any such Torch Shares.
b) Such Shareholder, if an individual, has the full power and
authority to transfer its Torch Shares to Cathay without
restriction;
c) Such Shareholder has the full power and authority to transfer
its Torch Shares to Cathay and all necessary corporate action
has been taken and authority granted to allow such
Shareholders to enter into this Agreement and to complete the
transaction contemplated hereby;
d) This Agreement has been duly authorized, executed, and
delivered by such Shareholder, constitutes a legal and binding
obligation of such Shareholder in accordance with these terms;
3.2 Representations and Warranties of Cathay: Cathay represents and
warrants to and in favour of each of the Shareholders as follows and
acknowledges that each of the Shareholders in relying upon such
representations and warranties in consummating the transaction
contemplated by this Agreement:
a) Cathay is a corporation incorporated in the State of Nevada
and trades on the NASDAQ OTC Bulletin Board under the symbol
"CAOL";
b) Cathay has the corporate power and authority to enter into
this Agreement and to perform its obligations hereunder:
c) The Cathay Shares will in accordance with Schedule B, be
validly issued as fully paid and non-assessable Shares in the
capital of Cathay; and
d) The execution and delivery of this Agreement and the
completion of the transaction herein will, upon approval of
the Board of Directors constitute a valid and binding
obligation of Cathay enforceable against it in accordance with
its terms.
4. CONDITION OF CLOSING
The obligation of Cathay to complete the transaction as contemplated herein
shall be subject to the following conditions:
a) This Agreement has been duly executed by each of the
Shareholders.
b) All representatives and warranties of the Shareholders set
forth in section 3.1 shall be true and correct as at the
Closing Date;
c) Torch shall have no outstanding debts or liabilities a the
Closing Date;
d) Completion of due diligence by Cathay with results
satisfactory to Cathay, in its absolute discretion. Torch
shall provide and deliver in timely manner to Cathay any and
all reasonable requests for information, documentation
(including financial information) to enable Cathay complete
its stated due diligence.
5. CLOSING
5.1 Closing: The closing shall take place on the third business day
following the notice from Cathay to Torch stating that Cathay has
completed its due diligence to its sole and absolute satisfaction and
is ready to proceed to Close the transaction as contemplated herein;
5.2 Delivery by the Shareholders: At the Closing, each of the Shareholders
shall deliver to Cathay the following:
a) A certified true copy of resolution of the Board of Directors
of Torch evidencing its approval to this Agreement and the
transactions contemplated there under;
b) Share certificate or certificates for each of the Shareholders
and representation in the aggregate all of the Torch Shares
duly canceled:
c) A new share certificate issued by the Torch representing the
Torch Shares registered in the name of Cathay, together with
confirmation of registration of Cathay as the holder of all
the Torch Shares; and
d) Such other documents, certificates and legal opinions that are
in the opinion of the legal counsel of Cathay, reasonably
required to complete the transaction contemplated here under.
5.3 Delivery by Cathay: At the closing, Cathay shall deliver to each of the
Shareholders the following:
a) a certified true copy of resolution of the Board of Directors
of Cathay evidencing their approval of this Agreement and the
transaction contemplated hereunder;
b) A share certificate or certificates in the name of each
Shareholder or in such name or names as the Shareholder may
direct, representing that number of Cathay Shares as is listed
for each Shareholder in Schedule "B" attached hereto.
c) Such other documents, certificates and legal opinions that
are, in the opinion of legal counsel of Torch or the
Shareholders, reasonably required to complete the transaction
hereunder.
6.0 GENERAL
6.1 Binding Agreement: Upon acceptance of the terms of this
Agreement by the parties hereto, this Agreement shall be
deemed to constitute and shall be a legally valid and binding
Agreement.
6.2 Further Assurances: The parties hereto agree to execute and
deliver or cause to be delivered all such further documents
and instruments and do all such acts and things as either
party may reasonably request to give full effect to the terms
and conditions set forth or referred to herein.
6.3 Entire Agreement This Agreement constitutes the entire
Agreement between the parties hereto and in respect of the
matters referred to herein and there are no representations,
warranties, convenent, agreements expressed or implied,
collateral hereto other than as expressly set forth or
referred to herein.
6.4 Time of the Essence: Time shall be of the essence to this
Agreement.
6.5 Legal Costs: Legal costs incurred in connection with the
preparation of the Agreement and the completion of the
transaction contemplated herein shall be for the account of
each party having incurred such cost.
6.6 Applicable laws and Attornment: This Agreement shall be
governed and interpreted in accordance with the laws of the
State of Nevada and the parties hereto irrevocably attom to
the non-exclusive jurisdiction of the courts of the State of
Nevada.
6.7 Enurement: This Agreement shall ensure to the benefit of and
be binding upon the parties hereto and their respective
successors and assigns.
6.8 Counterparts: This Agreement may be executed in any number of
counterparts with the same effect as if all the parties hereto
have signed the same agreement and all counterparts will be
construed together and constitute one and the same instrument.
6.9 Notice: Any notice, request, demand or other communication to
be given under this Agreement shall be in writing and shall be
delivered by hand or by telecopy to the party at the following
respective addresses:
6.9.1 To Cathay:
Attention: President
000 -- 000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, X.X.
Xxxxxx X0X 0X0
Facsimile: (000) 000-0000
6.9.2 To Torch:
Attention: President
XxXxxx Building
P.O. Box 62
2001 Leeward Highway
Providenciales
Turks & Caicos, BWI
Facsimile: (000) 000-0000
The foregoing is hereby accepted and agreed to as of the 2'~" day of July, 1999.
CATHAYONLINE INC.
Per:
-----------------------------------------
Xxxxx X. Xxxxxx - Authorized Signatory
XXXXXXXXX.XXX, [NC.
Per:
-----------------------------------------
Xxxxxx Xxxxx -- Director
SHAREHOLDER
Per:
-----------------------------------------
Xxxxxxx Xxxxxx
Schedule B
Names of the Shareholders and the number of Torch Shares held by each:
NAME No. of Shares Held
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Xxxxxxxx Xxxxxx
Cathay shall release to the Shareholders on a pro rata basis Cathay Shares in
accordance with the following schedule:
A.
o On Closing of the Agreement: 2,500,000 Cathay Shares;
o Upon the resale of 360,000 Seats (as defined in Schedule A) or
more as called for under 3.3 (a) of Schedule A, Cathay shall
issue further 2,500,000 Cathay Shares;
o Upon the resale of 500,000 Seats or more by Torch, Cathay
shall further issue 1,250,000 Cathay Shares;
o Upon the resale of 750,000 Seats or more by Torch, Cathay
shall issue further 1,250,000 Cathay Shares.
B. In addition to the issuance of the above Cathay Shares, at Closing
Cathay shall pay US$ 10,000 to the Shareholders.
C. The Shareholders shall receive monetary compensation in respect of
resale of the Seats. This monetary compensation shall be in accordance
with the following schedule:
o Upon the resale of 35,000 Seats and up to the resale of 99,999
Seats by Torch, Torch shall pay to the Shareholders $0.01 per
Seat per month for each and every Seat.
o Upon the resale of 100,000 Seats and up to the resale of
199,999 Seats by Torch, Torch shall pay to the Shareholders
$0.03 per Seat per month for each and every Seat.
o Upon the resale of 200,000 Seats and up to the resale of
299,999 Seats by Torch, Torch shall pay to the Shareholders
$0.05 per Seat per month for each and every Seat.
o Upon the resale of 300,000 Seats and up to the resale of
399,999 Seats by Torch, Torch shall pay to the Shareholders
$0.07 per Seat per month for each and every Seat.
o Upon the resale of 400,000 or more Seats by Torch, Torch shall
pay to the Shareholders $0.10 per Seat per month for each and
every Seat.
It is hereby expressly agreed, acknowledged and understood that Cathay's
obligation to issue Cathay Shares and make the payments under (C) above are
solely predicated upon Torch achieving the various sales targets as set forth in
the Reseller Agreement continued in Schedule A of this Agreement.
