EX-10
RESCISSION AGREEMENT
This Rescission Agreement ("Agreement") is made and entered into
this 24th day of August, 2004, by and between FreeStar Technology
Corporation, a Nevada corporation ("FreeStar"), and TransAxis, Inc., a
Delaware corporation ("TransAxis"), and is made effective as of June
17, 2004.
The parties recite and declare that:
A. On September 24, 2003, FreeStar entered into a stock
purchase agreement with certain shareholders of TransAxis, Inc.
("TransAxis") (formerly Digital Courier Technologies, Inc.) for the
acquisition of a majority of the common stock of this publicly held
company ("TA Acquisition Agreement"). The terms of the acquisition
provided for FreeStar to purchase a majority of the shares that
consist of the following: (a) the 2,916,533 shares that will be
outstanding upon the conversion of certain debt of TransAxis
("Conversion Right"); and (b) the 805,000 shares of Registrant common
stock issued and outstanding. In exchange the Registrant agreed to
issue on a pro rata basis based on the sellers' current percentage
beneficial ownership of TransAxis common stock (including the
beneficial ownership of the TransAxis common stock represented by the
Conversion Right) the aggregate number of shares of Registrant common
stock which is the greater of (i) 7,000,000 shares of common stock,
or (ii) that number of shares of common stock equal to $1,260,000
divided by the average closing bid price per share of the common
stock on the five days prior to the closing date.
B. On October 8, 2003, the parties amended the TA Acquisition
Agreement. The following, among other things, was amended under this
document:
The parties to the Agreement concur that the original amount of
Registrant common stock to be issued in connection with the TA
Acquisition Agreement is 31,500,000 shares, but that due to a certain
liability of TransAxis, the total amount of common stock to be issued
by the Registrant is reduced to 25,312,053. In addition, due to a
missing stock certificate of that Registrant, the Registrant will be
required to deliver a further reduced total of 25,183,418 shares of
common stock at the closing, with the remaining 128,585 shares only
upon delivery to the Registrant the missing stock certificate.
C. On February 20, 2004, the parties further amended the TA
Acquisition Agreement ("Amendment No. 2"). The Registrant claimed
that it had identified certain accounting-related deficiencies in the
books of TransAxis which predate the closing date, and that such
deficiencies have and will continue to preclude TransAxis from being
able to obtain audited financial statements without undue effort and
expense. In order to avoid the cost of litigation and further
disputes and negotiation, the Registrant and TransAxis agreed to
reduce the number of shares issuable under the TA Acquisition
Agreement from 25,183,418 to 3,200,000, which have been issued. In
exchange, the Registrant actually received 350,900 shares of
TransAxis stock, or 43.5%, although it remains entitled to receive an
additional 22,482 lost shares. The Registrant never exercised the
Conversion Right, and never controlled a majority of the shares of
TransAxis.
D. TransAxis and FreeStar now desire to make this
Agreement and carry out the actions required of them hereunder in
order to effect a rescission of the Conversion Right, effective as of
the close of business on June 17, 2004.
1. The parties agree that for valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the Conversion
Right is rescinded and cancelled effective on June 17, 2004.
2. Signed facsimile transmissions of this document shall be
considered as valid as the original. This Agreement may be executed as
a single document or in counterparts, each of which shall be deemed an
original, and all of which together shall constitute one and the same
agreement.
3. This agreement will be governed and construed in accordance
with the laws of the State of California. This Agreement was
produced by all parties hereto and shall not be construed against any
of them.
4. Each person signing this agreement for an entity confirms
that they have full authority to execute this agreement and obligate
such company, firm, corporation, partnership, organization,
individual, and/or entity identified as a party herein.
5. Each of the parties, at the request of any other party, will
execute all such further instruments and take all such further action
consistent with the provisions hereof as may be reasonably necessary
to carry out the intent of this Agreement.
FreeStar Technology Corporation
By: /s/ Xxxx Xxxx
Xxxx Xxxx, President
TransAxis, Inc.
By: /s/ Xxxx Xxxx
Xxxx Xxxx, President
