EXCHANGE AGREEMENT
DATED AS OF JULY 29, 2002
BY AND BETWEEN
VERTICALNET, INC.
AND
ALEXANDRA GLOBAL INVESTMENT FUND I, LTD.
-----------------------
RELATING TO
5 1/4% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2004
VERTICALNET, INC.
EXCHANGE AGREEMENT
TABLE OF CONTENTS
PAGE
1. Definitions...........................................................1
2. Agreement to Exchange; Exchange Value.................................3
(a) Agreement to Exchange.............................................3
(b) Closing...........................................................4
(c) DWAC and DTC Delivery.............................................4
3. Representations, Warranties, Covenants, Etc. of the Holder............5
(a) Ownership of Securities...........................................5
(b) Authority.........................................................5
(c) Absence of Certain Transactions...................................5
4. Representations, Warranties, Covenants, Etc. of the Company...........5
(a) Organization and Authority........................................5
(b) Concerning the Shares.............................................6
(c) Corporate Authorization...........................................6
(d) Non-contravention.................................................6
(e) Approvals, Filings, Etc...........................................7
(f) Information Provided..............................................7
(g) SEC Filings.......................................................7
(h) Absence of Certain Changes........................................7
(i) Absence of Brokers, Finders, Etc..................................7
(j) Certain Securities Law Matters....................................8
(k) No Integrated Offering............................................8
5. Certain Covenants.....................................................8
(a) Covenants by the Company..........................................8
(1) Limitation on Certain Issuances of Securities...................8
(2) Exchange with Holders of Other Debentures.......................8
(3) Principal Market Listing; Reporting Status......................8
(4) State Securities Laws...........................................9
(b) Holder Covenant...................................................9
6. Conditions to the Company's Obligation to Exchange...................10
7. Conditions to the Holder's Obligations to Exchange...................10
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8. Indemnification and Contribution.....................................11
(a) Indemnification..................................................11
(b) Contribution.....................................................12
(c) Other Rights.....................................................13
9. Miscellaneous........................................................13
(a) Governing Law....................................................13
(b) Headings.........................................................13
(c) Severability.....................................................13
(d) Notices..........................................................13
(e) Counterparts.....................................................13
(f) Entire Agreement; Benefit........................................14
(g) Waiver...........................................................14
(h) Amendment........................................................14
(i) Best Efforts.....................................................14
(j) Further Assurances...............................................15
(k) Expenses.........................................................15
(l) Termination......................................................15
(m) Survival.........................................................15
(n) Public Statements, Press Releases, Etc...........................16
(o) Construction.....................................................16
ANNEXES
ANNEX I Form of Opinion of General Counsel to be Delivered on the Closing
Date
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EXCHANGE AGREEMENT
THIS
EXCHANGE AGREEMENT, dated as of July 29, 2002 (this
"Agreement"), by and between VERTICALNET, INC., a Pennsylvania corporation (the
"Company"), and ALEXANDRA GLOBAL INVESTMENT FUND I, LTD., a British Virgin
Islands company (the "Holder").
W I T N E S S E T H:
WHEREAS, the Holder is the owner of one or more Debentures
(such capitalized term and all other capitalized terms used in this Agreement
having the meanings provided in Section 1);
WHEREAS, upon the terms and subject to the conditions of this
Agreement, the Holder wishes to exchange the Debentures with the Company for
shares of Common Stock and cash, and the Company wishes to issue shares of
Common Stock and pay cash to the Holder in exchange for the Debentures; and
WHEREAS, the parties hereto intend that the shares of Common
Stock to be issued in exchange for the Debentures be exempt from registration
pursuant to Section 3(a)(9) of the 1933 Act;
NOW THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. DEFINITIONS.
(a) As used in this Agreement, the terms "Agreement",
"Company" and "Holder" shall have the respective meanings assigned to such terms
in the introductory paragraph of this Agreement.
(b) All the agreements or instruments herein defined shall
mean such agreements or instruments as the same may from time to time be
supplemented or amended or the terms thereof waived or modified to the extent
permitted by, and in accordance with, the terms thereof and of this Agreement.
(c) The following terms shall have the following meanings
(such meanings to be equally applicable to both the singular and plural forms of
the terms defined):
"Claims" means any losses, claims, damages, liabilities or
expenses (joint or several), incurred by a Person.
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"Closing Date" means 12:00 noon,
New York City time, on July
29, 2002 or such other mutually agreed to time.
"Common Stock" means the Common Stock, par value $0.01 per
share, of the Company.
"Common Stock Equivalents" means any warrant, option,
subscription or purchase right with respect to shares of Common Stock, any
security convertible into, exchangeable for, or otherwise entitling the holder
thereof to acquire, shares of Common Stock or any warrant, option, subscription
or purchase right with respect to any such convertible, exchangeable or other
security.
"Debentures" means $8,850,000.00 aggregate principal amount of
the Company's 5 1/4% Convertible Subordinated Debentures due 2004, owned by the
Holder and registered in the name of the Holder or its nominee.
"DTC" means The Depository Trust Company.
"Event of Default" shall have the meaning provided in the
Indenture.
"Exchange Consideration" shall have the meaning provided in
Section 2(a)(1).
"Indemnified Person" means the Holder and each of its
affiliates and their respective officers, directors, stockholders and members
and each Person who controls the Holder within the meaning of the 1933 Act or
the 1934 Act.
"Indenture" means the Indenture, dated as of September 27,
1999, between the Company and Deutsche Bank (as successor to Bankers Trust
Company), a
New York banking corporation, as Trustee, relating to the Company's
5 1/4% Convertible Subordinated Debentures due 2004.
"1934 Act" means the Securities Exchange Act of 1934, as
amended.
"1933 Act" means the Securities Act of 1933, as amended.
"Person" means any natural person, corporation, partnership,
limited liability company, trust, incorporated organization, unincorporated
association, or similar entity or any government, governmental agency or
political subdivision.
"Principal Market" means the Nasdaq Smallcap Market or such
other U.S. market or exchange which is the principal market on which the Common
Stock is then listed for trading.
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"Rule 144" means Rule 144 under the 1933 Act or any other
similar rule or regulation of the SEC that may at any time provide a "safe
harbor" exemption from registration under the 1933 Act so as to permit a holder
of any securities to sell securities of the Company to the public without
registration under the 1933 Act.
"SEC" means the Securities and Exchange Commission.
"SEC Reports" means all annual reports, quarterly reports,
proxy statements and other reports filed by the Company under the 1934 Act, in
each case as filed with the SEC and including the information and documents
(other than exhibits) incorporated therein by reference.
"Shares" means the shares of Common Stock issuable or issued
in exchange for the Debentures.
"Short Sale" shall have the meaning given such term in Rule
3b-3 under the 1934 Act as in effect on the date of this Agreement.
"Subsidiary" means any corporation or other entity of which a
majority of the capital stock or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions are at the time directly or indirectly owned by the
Company.
"Trading Day" means a day on which the Principal Market is
open for the general trading of securities.
"Violation" means
(i) any violation or alleged violation by the Company of the
1933 Act, the 1934 Act, any state securities law or any rule or
regulation under the 1933 Act, the 1934 Act or any state securities
law, or
(ii) any breach or alleged breach by any Person other than the
Holder of any representation, warranty, covenant, agreement or other
term of this Agreement.
2. AGREEMENT TO EXCHANGE; EXCHANGE VALUE.
(a) AGREEMENT TO EXCHANGE. Upon the terms and subject to the
conditions of this Agreement,
(1) the Holder agrees to sell, assign, transfer and deliver
the Debentures to the Company in exchange for (A) payment by the
Company to
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the Holder of $1,371,750.00 in cash, (B) issuance by the Company to the
Holder of 812,062 Shares and (C) payment by the Company to the holder
of an amount equal to accrued and unpaid interest on the Debentures to
the Closing Date in cash (collectively, the "Exchange Consideration");
and
(2) the Company agrees (A) to pay the Holder $1,371,750.00 in
cash, (B) to issue to the Holder 812,062 Shares and (C) to pay the
Holder in cash an amount equal to accrued and unpaid interest on the
Debentures to the Closing Date, in exchange for the Debentures.
The Company agrees to cancel the Debentures in full immediately after the
closing.
(b) CLOSING. The closing of the exchange provided for in
Section 2(a) shall occur on the Closing Date at the Law Offices of Xxxxx X
Xxxxx, Penthouse Suite, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx. At the closing,
upon the terms and subject to the conditions of this Agreement, (1) the Company
shall pay or issue, as applicable, the Exchange Consideration to the Holder
against delivery by the Holder to the Company of the Debentures in the manner
provided in Section 2(c), and (2) the Holder shall deliver to the Company the
Debentures against payment and delivery by the Company to the Holder of the
Exchange Consideration.
(c) DWAC AND DTC DELIVERY. (1) The Company shall effect
delivery of the Shares to the Holder by causing its transfer agent
electronically to transmit the Shares to the Holder at the closing on the
Closing Date by crediting the account of the Holder's broker with DTC through
its Deposit Withdrawal Agent Commission system under the Fast Automated
Securities Transfer program. The Holder shall furnish the name and account
number of its broker to the Company prior to the closing in order to effect such
delivery.
(2) Payment by the Company to the Holder on the Closing Date
of the portion of the Exchange Consideration to be paid in cash shall be made by
wire transfer of immediately available funds at the closing on the Closing Date
to:
Chase Manhattan Bank
ABA No. 000-000-000
For credit to account No. 000-0-000000
For credit to the account of Xxxxxxx Xxxxx & Co., NY
For further credit to account No. 000-00000-0
For further credit to the account of Alexandra Global
Investment Fund I, Ltd.
(3) The transfer of the Debentures by the Holder at the
closing shall be made in accordance with Section 2.5(b)(2) of the Indenture, in
accordance with
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the applicable procedures of DTC. The Company shall furnish to the Holder the
name of the Company's broker who is a DTC participant and account number prior
to the closing, in order to effect such delivery.
3. REPRESENTATIONS, WARRANTIES, COVENANTS, ETC. OF THE HOLDER.
The Holder represents and warrants to, and covenants and agrees with, the
Company as follows:
(a) OWNERSHIP OF SECURITIES. The Holder is the beneficial
owner of the Debentures and, upon consummation of the exchange of the Exchange
Consideration for the Debentures as provided in Section 2(a), will transfer and
deliver to the Company good title to the Debentures, free and clear of any lien
or encumbrance.
(b) AUTHORITY. The execution, delivery and performance by the
Holder of this Agreement are within the powers of the Holder and have been duly
authorized by all necessary action on the part of the Holder. This Agreement
constitutes a valid and binding agreement of the Holder, enforceable against the
Holder in accordance with its terms, subject to the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting creditors' rights generally and
general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
(c) ABSENCE OF CERTAIN TRANSACTIONS. The Holder has not made
since June 29, 2002, and will not make from the date of execution and delivery
of this Agreement to the Closing Date, a Short Sale of the Common Stock. The
Holder will not make from the Closing Date through 180 days after the Closing
Date, a Short Sale of the Common Stock, except as permitted under Section 5(b)
hereof.
4. REPRESENTATIONS, WARRANTIES, COVENANTS, ETC. OF THE
COMPANY. The Company represents and warrants to the Holder that the following
matters are true and correct on the date of execution and delivery of this
Agreement, will be true and correct on the Closing Date and the Company
covenants and agrees with the Holder as follows:
(a) ORGANIZATION AND AUTHORITY. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania and has all requisite corporate power and authority
(i) to own, lease and operate its properties and to carry on its business as
described in the SEC Reports and as currently conducted, and (ii) to execute,
deliver and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby.
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(b) CONCERNING THE SHARES. The Shares have been duly
authorized and when issued in exchange for the Debentures at the closing will be
duly and validly issued, fully paid and non-assessable and will not subject the
holder thereof to personal liability by reason of being such holder. The holders
of outstanding shares of capital stock of the Company are not entitled to
preemptive or other rights to subscribe for the Shares. The Common Stock is
listed for trading on the Principal Market and (1) the Company and the Common
Stock meet the criteria for continued listing and trading on the Principal
Market, except as set forth on SCHEDULE 4(B) hereto; (2) the Company has not
been notified since December 31, 2000 of any failure or potential failure to
meet the criteria for continued listing and trading on the Principal Market,
except as set forth on SCHEDULE 4(b) hereto, and (3) no suspension of trading in
the Common Stock is in effect. The Company knows of no reason that the Shares
will not be eligible for listing on the Principal Market.
(c) CORPORATE AUTHORIZATION. This Agreement has been duly and
validly authorized by the Company; this Agreement has been duly executed and
delivered by the Company and, assuming due execution and delivery by the Holder,
this Agreement is a valid and binding obligation of the Company enforceable in
accordance with its terms, subject to the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to or affecting creditors' rights generally and general
principles of equity, regardless of whether such enforceability is considered in
a proceeding in equity or at law.
(d) NON-CONTRAVENTION. The execution and delivery of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated herein do not and will not, with or without the giving of notice or
the lapse of time, or both, (i) result in any violation of any provision of the
certificate of incorporation or by-laws or similar instruments of the Company or
any Subsidiary, (ii) conflict with or result in a breach by the Company or any
Subsidiary of any of the terms or provisions of, or constitute a default under,
or result in the modification of, or result in the creation or imposition of any
lien, security interest, charge or encumbrance upon any of the properties or
assets of the Company pursuant to, any indenture, mortgage, deed of trust or
other agreement or instrument to which the Company or any Subsidiary is a party
or by which the Company or any Subsidiary or any of their respective properties
or assets are bound or affected which would have a material adverse effect on
the business, properties, operations, condition (financial or other), results of
operations or prospects of the Company and the Subsidiaries, taken as a whole,
(iii) violate or contravene any applicable law, rule or regulation or any
applicable decree, judgment or order of any court, United States federal or
state regulatory body, administrative agency or other governmental body having
jurisdiction over the Company or any Subsidiary or any of their respective
properties or assets which would have a material adverse effect on the business,
properties, operations, condition (financial or other), results
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of operations or prospects of the Company and the Subsidiaries, taken as a
whole, or (iv) have any material adverse effect on any permit, certification,
registration, approval, consent, license or franchise necessary for the Company
or any Subsidiary to own or lease and operate any of its properties and to
conduct any of its business or the ability of the Company or any Subsidiary to
make use thereof.
(e) APPROVALS, FILINGS, ETC. No authorization, approval or
consent of, or filing with, any court, governmental body, regulatory agency,
self-regulatory organization, or stock exchange or market or the stockholders of
the Company is required to be obtained or made by the Company or any Subsidiary
in connection with the execution, delivery and performance of this Agreement and
the issuance of the Shares as contemplated by this Agreement other than
application by the Company to the Principal Market for the listing of the
Shares.
(f) INFORMATION PROVIDED. The information provided by or on
behalf of the Company to the Holder in connection with this Agreement does not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading, it being understood
that for purposes of this Section 4(f), any statement contained in such
information shall be deemed to be modified or superseded for purposes of this
Section 4(f) to the extent that a statement in any document included in such
information which was prepared or filed with the SEC on a later date modifies or
replaces such statement, whether or not such later prepared or filed statement
so states.
(g) SEC FILINGS. The Company has timely filed all reports
required to be filed under the 1934 Act and any other material reports or
documents required to be filed with the SEC since December 31, 2000. All of such
reports and documents complied, when filed, in all material respects, with all
applicable requirements of the 1933 Act and the 1934 Act.
(h) ABSENCE OF CERTAIN CHANGES. Since December 31, 2000, there
has been no material adverse change in the business, properties, operations,
condition (financial or other), results of operations or, to the best knowledge
of the Company and the Subsidiaries, prospects of the Company and the
Subsidiaries, taken as a whole, except as disclosed in the SEC Reports.
(i) ABSENCE OF BROKERS, FINDERS, ETC. No broker, finder, or
similar Person is entitled to any commission, fee, or other compensation by
reason of the transactions contemplated by this Agreement. The Company has not
and will not pay any commission or other remuneration for soliciting exchanges
of Debentures for Shares.
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(j) CERTAIN SECURITIES LAW MATTERS. The Shares may be issued
to the Holder pursuant to this Agreement without registration under the 1933 Act
by virtue of Section 3(a)(9) of the 1933 Act. For purposes of Rule 144, the
Holder will be entitled to tack the holding period of the Debentures to the
holding period of the Shares and, so long as (x) the aggregate period during
which the Debentures and the Shares are held is at least two years and (y) at
the time of determination the Holder is not and has not for the preceding three
months been an "affiliate" (as such term is defined in Rule 144) of the Company,
the Shares may be sold pursuant to Rule 144(k).
(k) NO INTEGRATED OFFERING. Neither the Company nor any Person
acting on its behalf has taken or will take any action (including, without
limitation, any offering of any securities of the Company under circumstances
which would require, under the 1933 Act, the integration of such offering with
the transactions contemplated hereby) which might reasonably be expected to
subject the issuance of the Shares to the registration requirements of Section 5
of the 1933 Act.
5. CERTAIN COVENANTS.
(a) COVENANTS BY THE COMPANY.
(1) LIMITATION ON CERTAIN ISSUANCES OF SECURITIES. Until the
earlier of (1) the Closing Date and (2) the termination of this Agreement by the
Holder pursuant to Section 9(k) hereof, the Company shall not issue or sell, or
agree to issue or sell, shares of Common Stock or Common Stock Equivalents at a
price below the greater of (x) 90% of the closing bid price of the Common Stock
on the Principal Market on the date of issuance of such Common Stock or Common
Stock Equivalents or (y) 90% of $.666 per share of Common Stock or Common Stock
Equivalents, except Common Stock issued pursuant to the Company's stock option
plans existing on the date hereof maintained for the officers, directors or
employees of the Company.
(2) EXCHANGE WITH HOLDERS OF OTHER DEBENTURES. For a period of
90 days after the Closing Date the Company will not enter into any agreement
with any other holder of the Company's 5 1/4% Convertible Subordinated
Debentures due 2004 to exchange, repurchase, retire, repay or otherwise acquire
any of such debentures (other than by payment when due at maturity) upon terms
more favorable to such holder than the terms set forth in this Agreement,
without the prior written consent of the Holder.
(3) PRINCIPAL MARKET LISTING; REPORTING STATUS. Prior to the
Closing Date, the Company will file with Nasdaq an application or other document
required by Nasdaq for the listing of the Shares with the Principal Market and
shall provide evidence of such filing to the Holder. So long as the Holder
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beneficially owns any of the Shares, the Company shall (x) use its best efforts
to maintain the listing of the Common Stock on the Nasdaq SmallCap Market or the
Nasdaq National Market, and (y) timely file all reports required to be filed
with the SEC pursuant to Section 13 or 15(d) of the 1934 Act, and the Company
shall not terminate its status as an issuer required to file reports under the
1934 Act even if the 1934 Act or the rules and regulations thereunder would
permit such termination.
(4) STATE SECURITIES LAWS. On or before the Closing Date, the
Company shall take such action as shall be necessary to qualify, or to obtain an
exemption for, the offer and sale of the Shares to the Holder as contemplated by
this Agreement under such of the securities laws of jurisdictions in the United
States as shall be applicable thereto. Notwithstanding the foregoing obligations
of the Company in this Section 5(a)(4), the Company shall not be required (1) to
qualify to do business in any jurisdiction where it would not otherwise be
required to qualify but for this Section 5(a)(4), (2) to subject itself to
general taxation in any such jurisdiction, (3) to file a general consent to
service of process in any such jurisdiction, (4) to provide any undertakings
that cause more than nominal expense or burden to the Company or (5) to make any
change in its charter or by-laws which the Company determines to be contrary to
the best interests of the Company and its stockholders. The Company shall
furnish the Holder with copies of all filings, applications, orders and grants
or confirmations of exemptions relating to such securities laws on or before the
Closing Date.
(b) HOLDER COVENANT. The Holder agrees that so long as (1)
there shall have been no material breach of any representation, warranty,
covenant or agreement of the Company contained in this Agreement and (2) no
Event of Default shall have occurred and be continuing, the Holder shall not
make any open market sale (including by way of Short Sale) of any of the Shares
during the period from the Closing Date to the date that is 180 days after the
Closing Date. Nothing in this Section 5(b) shall prohibit the Holder from making
a bona fide pledge of the Shares to an institutional lender or shall prohibit
such lender from exercising its rights or remedies (including realizing on and
selling the Shares so pledged as collateral) following a default by the Holder.
Within five Business Days after the end of each full calendar month during such
180-day period, commencing with the month of August 2002, the Holder shall
provide a certificate to the Company, duly executed on behalf of the Holder,
confirming that the Holder is in compliance with this Section 5(b) as of the
last day of such calendar month and that the Holder has been in compliance
during the entire month. In addition, if the Company has reason to believe that
the Holder may not be in compliance with this Section 5(b) during such 180-day
period, the Company shall have the right, on three occasions only, to provide a
written statement to the Holder setting forth in reasonable detail the basis for
the Company's belief that the Holder is not in compliance with this Section 5(b)
and requesting the Holder to provide written certification of such compliance.
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The Holder shall furnish such certification within five Business Days after it
receives such request.
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO EXCHANGE. The
Holder understands that the Company's obligation to issue and pay to the Holder
the Exchange Consideration in exchange for the Debentures on the Closing Date is
conditioned upon satisfaction of the following conditions precedent on or before
the Closing Date (any or all of which may be waived by the Company in its sole
discretion):
(a) On the Closing Date, no legal action, suit or proceeding
shall be pending or threatened which seeks to restrain or prohibit the
transactions contemplated by this Agreement; and
(b) The representations and warranties of the Holder contained
in this Agreement shall have been true and correct on the date of this Agreement
and on the Closing Date as if made on the Closing Date and on or before the
Closing Date the Holder shall have performed all covenants and agreements of the
Holder required to be performed by the Holder on or before the Closing Date.
7. CONDITIONS TO THE HOLDER'S OBLIGATIONS TO EXCHANGE. The
Company understands that the Holder's obligation to exchange Debentures for the
Exchange Consideration on the Closing Date is conditioned upon satisfaction of
the following conditions precedent on or before the Closing Date (any or all of
which may be waived by the Holder in its sole discretion):
(a) On the Closing Date, no legal action, suit or proceeding
shall be pending or threatened which seeks to restrain or prohibit the
transactions contemplated by this Agreement;
(b) The representations and warranties of the Company
contained in this Agreement shall have been true and correct on the date of this
Agreement and shall be true and correct on the Closing Date as if given on and
as of the Closing Date (except for representations given as of a specific date,
which representations shall be true and correct as of such date), and on or
before the Closing Date the Company shall have performed all covenants and
agreements of the Company contained herein required to be performed by the
Company on or before the Closing Date;
(c) No Event of Default under and as defined in the Indenture
or event which, with the giving of notice or the passage of time, or both, would
constitute an Event of Default under and as defined in the Debentures shall have
occurred and be continuing;
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(d) The Company shall have delivered to the Buyer a
certificate, dated the Closing Date, duly executed by its Chief Executive
Officer or Chief Financial Officer to the effect set forth in subparagraphs (a),
(b), and (c) of this Section 7;
(e) The Company shall have delivered to the Holder a
certificate, dated the Closing Date, of the Secretary of the Company certifying
(A) the Certificate of Incorporation and By-Laws of the Company as in effect on
the Closing Date, (B) all resolutions of the Board of Directors (and committees
thereof) of the Company relating to this Agreement and the transactions
contemplated hereby and (C) such other matters as reasonably requested by the
Holder;
(f) On the Closing Date, the Buyer shall have received an
opinion of Xxxxx X. XxXxxxxx, Xx. Esq., Executive Vice President and General
Counsel of the Company, dated the Closing Date, addressed to the Holder, in
form, scope and substance reasonably satisfactory to the Holder, substantially
in the form of ANNEX I to this Agreement;
(g) The Shares shall have been approved for listing on the
Principal Market; and
(h) On the Closing Date (i) trading in securities on the
New
York Stock Exchange, Inc., the American Stock Exchange, Inc. or the Nasdaq
National Market shall not have been suspended or materially limited and (ii) a
general moratorium on commercial banking activities in the State of
New York
shall not have been declared by either federal or state authorities.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) INDEMNIFICATION. (1) To the extent not prohibited by
applicable law, the Company will indemnify and hold harmless each Indemnified
Person against any Claims to which any of them may become subject, insofar as
such Claims (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any Violation or any of the
transactions contemplated by this Agreement; provided that the Company shall not
be liable under this provision to the extent that such Claims resulted from the
gross negligence or willful misconduct of the Indemnified Person. The Company
shall reimburse each such Indemnified Person, promptly as such expenses are
incurred and are due and payable, for any documented reasonable legal fees or
other documented and reasonable expenses incurred by them in connection with
investigating or defending any such Claim. Notwithstanding anything to the
contrary contained herein, the indemnification agreement contained in this
Section 8(a) shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of the Company, which
consent shall not be unreasonably withheld.
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(2) Promptly after receipt by an Indemnified Person under this
Section 8(a) of notice of the commencement of any action (including any
governmental action), such Indemnified Person shall, if a Claim in respect
thereof is to be made against the Company under this Section 8(a), deliver to
the Company a notice of the commencement thereof and the Company shall have the
right to participate in, and, to the extent the Company so desires, to assume
control of the defense thereof with counsel reasonably satisfactory to the
Indemnified Person; provided, however, that an Indemnified Person shall have the
right to retain its own counsel with the fees and expenses to be paid by the
Company, if, in the reasonable opinion of counsel retained by the Company, the
representation by such counsel of the Indemnified Person and the Company would
be inappropriate due to actual or potential differing interests between such
Indemnified Person and any other party represented by such counsel in such
proceeding; provided further, however, that the Company shall not be responsible
for the fees and expenses of more than one separate counsel for all Indemnified
Persons hereunder and one separate counsel in each jurisdiction in which a Claim
is pending or threatened. The failure to deliver notice to the Company within a
reasonable time of the commencement of any such action shall not relieve the
Company of any liability to the Indemnified Person under this Section 8(a),
except to the extent that the Company is prejudiced in its ability to defend
such action. The indemnification required by this Section 8(a) shall be made by
periodic payments of the amount thereof during the course of the investigation
or defense, as such expense, loss, damage or liability is incurred and is due
and payable.
(b) CONTRIBUTION. To the extent any indemnification by the
Company as set forth in Section 8(a) above is applicable by its terms but is
prohibited or limited by law, the Company agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 8(a) to the fullest extent permitted by law. In determining the
amount of contribution to which the respective parties are entitled, there shall
be considered the relative fault of each party, the parties' relative knowledge
of and access to information concerning the matter with respect to which the
Claim was asserted, the opportunity to correct and prevent any statement or
omission and any other equitable considerations appropriate under the
circumstances; provided, however, that (a) no contribution shall be made under
circumstances where the maker would not have been liable for indemnification
under the fault standards set forth in Section 8(a) and (b) no Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 0000
Xxx) shall be entitled to contribution from any other Person who was not guilty
of such fraudulent misrepresentation.
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(c) OTHER RIGHTS. The indemnification and contribution
provided in this Section shall be in addition to any other rights and remedies
available at law or in equity.
9. MISCELLANEOUS.
(a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.
(b) HEADINGS. The headings, captions and footers of this
Agreement are for convenience of reference and shall not form part of, or affect
the interpretation of, this Agreement.
(c) SEVERABILITY. If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement or the validity or enforceability of this Agreement
in any other jurisdiction.
(d) NOTICES. Any notices required or permitted to be given
under the terms of this Agreement shall be in writing and shall be sent by mail,
personal delivery, by telephone line facsimile transmission or courier and shall
be effective five days after being placed in the mail, if mailed, or upon
receipt, if delivered personally, by telephone line facsimile transmission or by
courier, in each case addressed to a party at such party's address (or telephone
line facsimile transmission number) shown in the introductory paragraph or on
the signature page of this Agreement or such other address (or telephone line
facsimile transmission number) as a party shall have provided by notice to the
other party in accordance with this provision. In the case of any notice to the
Company, such notice shall be addressed to the Company at its address (or
telephone line facsimile transmission number) shown on the signature page
hereto, Attention: Chief Executive Officer, with a copy addressed to the General
Counsel, and in the case of any notice to the Holder, such notice shall be
addressed to the Holder at its address (or telephone line facsimile transmission
number) shown on the signature page hereto and a copy shall be given to: Law
Offices of Xxxxx X Xxxxx, Penthouse Suite, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (telephone line facsimile transmission number (000) 000-0000).
(e) COUNTERPARTS. This Agreement may be executed in
counterparts and by the parties hereto on separate counterparts, each of which
shall be deemed to be an original but all of which together shall constitute one
and the same instrument. A telephone line facsimile transmission of this
Agreement bearing a signature on behalf of a party hereto shall be legal and
binding on such party. Although this Agreement is dated as of the date first set
forth above, the
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actual date of execution and delivery of this Agreement by each party is the
date set forth below such party's signature on the signature page hereof. Any
reference in this Agreement or in any of the documents executed and delivered by
the parties hereto in connection herewith to (1) the date of execution and
delivery of this Agreement by the Holder shall be deemed a reference to the date
set forth below the Holder's signature on the signature page hereof, (2) the
date of execution and delivery of this Agreement by the Company shall be deemed
a reference to the date set forth below the Company's signature on the signature
page hereof and (3) the date of execution and delivery of this Agreement, or the
date of execution and delivery of this Agreement by the Holder and the Company,
shall be deemed a reference to the later of the dates set forth below the
signatures of the parties on the signature page hereof.
(f) ENTIRE AGREEMENT; BENEFIT. This Agreement constitutes the
entire agreement between the parties hereto with respect to the subject matter
hereof. There are no restrictions, promises, warranties, or undertakings, other
than those set forth or referred to herein and therein. This Agreement
supersedes all prior agreements and understandings, whether written or oral,
between the parties hereto with respect to the subject matter hereof. This
Agreement and the terms and provisions hereof are for the sole benefit of only
the Company, the Holder and their respective successors and permitted assigns
and in no event shall the Holder have any liability to any stockholder or
creditor of the Company or any other Person (other than the Company) in any way
relating to or arising from this Agreement or the transactions contemplated
hereby.
(g) WAIVER. Failure of any party to exercise any right or
remedy under this Agreement or otherwise, or delay by a party in exercising such
right or remedy, or course of dealing between the parties, shall not operate as
a waiver thereof or an amendment hereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or exercise of any other right or power.
(h) AMENDMENT. No amendment, modification, waiver, discharge
or termination of any provision of this Agreement nor consent to any departure
by the Holder or the Company therefrom shall in any event be effective unless
the same shall be in writing and signed by the party to be charged with
enforcement, and then shall be effective only in the specific instance and for
the purpose for which given. No course of dealing between the parties hereto
shall operate as an amendment of this Agreement.
(i) BEST EFFORTS. Each of the parties shall use its best
efforts timely to satisfy each of the conditions to the other party's
obligations set forth in Section 6 or 7, as the case may be, of this Agreement
on or before the Closing Date.
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(j) FURTHER ASSURANCES. Each party to this Agreement will
perform any and all acts and execute any and all documents as may be necessary
and proper under the circumstances in order to accomplish the intents and
purposes of this Agreement and to carry out its provisions.
(k) EXPENSES. The Company and the Holder shall each be
responsible for their expenses (including, without limitation, the legal fees
and expenses of its counsel), except as otherwise specifically provided in this
Section 9(j), incurred by them in connection with the negotiation and execution
of, and closing under, this Agreement and of the transactions contemplated
hereby. If the closing under this Agreement shall have occurred, then the
Company shall pay or reimburse the Holder for one-half of its reasonable legal
fees and expenses relating to this Agreement, not to exceed $10,000 to be paid
by the Company. The Company shall pay on demand all expenses incurred by the
Holder after the Closing Date, including reasonable fees and disbursements of
counsel, as a consequence of, or in connection with (1) any default or breach of
any of the Company's obligations set forth in this Agreement and (2) the
enforcement or restructuring of any right of, including the collection of any
payments due, the Holder under this Agreement, including any action or
proceeding relating to such enforcement or any order, injunction or other
process seeking to restrain the Company from paying any amount due the Holder.
(l) TERMINATION. The Holder shall have the right to terminate
its obligation to exchange the Debenture under this Agreement by giving notice
to the Company at any time at or prior to the closing or Closing Date if:
(1) the Company shall have failed, refused, or been unable at
or prior to the date of such termination of this Agreement to perform
any of its material obligations hereunder;
(2) any other material condition of the Holder's obligations
hereunder is not fulfilled; or
(3) the closing shall not have occurred on a Closing Date on
or before August 2, 2002, other than solely by reason of a breach of
this Agreement by the Holder.
Any such termination shall be effective upon the giving of notice thereof by the
Holder. Upon a termination under Section 9(l)(1) or (3), the Holder shall have
no further obligation to the Company.
(m) SURVIVAL. The respective representations, warranties,
covenants and agreements of the Company and the Holder contained in this
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Agreement and the documents delivered in connection with this Agreement shall
survive the execution and delivery of this Agreement and the closing hereunder,
and shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Holder or any Person controlling or
acting on behalf of the Holder or by the Company or any Person controlling or
acting on behalf of the Company.
(n) PUBLIC STATEMENTS, PRESS RELEASES, ETC. The Company and
the Holder shall have the right to approve before issuance any press releases or
any other public statements with respect to the transactions contemplated
hereby; provided, however, that the Company shall be entitled, without the prior
approval of the Holder, to make any press release or other public disclosure
with respect to such transactions as is required by applicable law and
regulations, including the 1934 Act and the rules and regulations promulgated
thereunder (although the Holder shall be consulted by the Company in connection
with any such press release or other public disclosure prior to its release and
shall be provided with a copy thereof).
(o) CONSTRUCTION The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party.
[Remainder of this Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed by their respective officers or other representatives thereunto
duly authorized as of the date first set forth above and on the dates set forth
below their respective signatures.
VERTICALNET, INC.
By:
---------------------------------------
Name:
Title:
Address:
000 Xxxxxxx Xxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
Facsimile No.: (610) 240- 9470
Date: July 29, 2002
ALEXANDRA GLOBAL INVESTMENT FUND I, LTD.
BY: ALEXANDRA INVESTMENT MANAGEMENT, LLC,
AS INVESTMENT ADVISOR
By:
---------------------------------
Xxxxxxx Xxxxxxxxx
Managing Member
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Address:
c/o Alexandra Investment Management, LLC
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Date: July 29, 2002
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SCHEDULE 4(b)
TO
EXCHANGE AGREEMENT
The Company does not currently meet the minimum $1.00 bid price for Nasdaq
Small-Cap continued listing. The Company has taken advantage of the Nasdaq Bid
Price Grace Period Program, which allows the Company a grace period from the
$1.00 minimum bid price until October 1, 2002 (180 days from date of
notification). If the Company meets the Nasdaq Small-Cap initial listing
criteria (other than bid price) at October 1, 2002, then the Company is
permitted to continue in the Bid Price Grace Period Program for an additional
180 days (or until April 1, 2003).
At June 30, 2002, the Company did not meet the minimum $2.5 million
shareholders' equity requirement for Nasdaq Small-Cap continued listing. After
giving effect to the transaction under the Agreement, the Company will be in
compliance with this requirement. As soon as the closing has taken place, the
Company will inform its Nasdaq listing qualifications representative with the
details of the transaction and request that Nasdaq not issue a delisting letter.
If the Company receives a delisting letter from Nasdaq, it will immediately
request a hearing (which it has the right to do) at which the Company will
present the details of this transaction and the Company's other plans for
meeting the continued listing requirements for the foreseeable future. If the
Company receives a delisting letter, then the Company is required to issue a
press release to that effect, in which the Company would also disclose that it
had requested a hearing and had taken steps to remedy the listing deficiency.
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