EXHIBIT 2.1
EXCHANGE, REGISTRATION AND LOCK-UP AGREEMENT
This Exchange, Registration and Lock-up Agreement (this "Agreement") is
made and entered into as of September 12, 2002, by and among Verticalnet, Inc.,
a corporation organized under the laws of the Commonwealth of Pennsylvania (the
"Company"), and Ballinrobe Limited ("Ballinrobe").
INTRODUCTION
The Company and Ballinrobe are parties to the Termination and
Settlement Agreement, of even date herewith (the "Termination and Settlement
Agreement"), pursuant to which the Company shall issue to Ballinrobe 1,000,000
shares of the Company's Common Stock, $.01 par value per share ("Common Stock").
Ballinrobe shall have certain rights with respect to the registration of such
shares of Common Stock for sale under the Securities Act, and there shall be
certain restrictions on the transfer by Ballinrobe of such shares of Common
Stock.
Certain capitalized terms used in this Agreement are defined in Section
10 below.
AGREEMENT
In consideration of the mutual covenants and promises contained in the
Termination and Release Agreement and in this Agreement and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Ballinrobe agree as follows:
1. Exchange of Shares.
(a) Exchange of Shares. The Company hereby issues the Shares,
which consists of 1,000,000 shares of Common Stock, to Ballinrobe in exchange
for all outstanding shares of Verticalnet Europe B.V. owned or held by
Ballinrobe (the "BV Shares"), as partial consideration for the BV Shares and
such other good and valuable consideration under the Termination and Settlement
Agreement.
(b) Representations and Warranties of Ballinrobe. Ballinrobe
represents and warrants to, and covenants and agrees with, the Company as
follows:
(1) Ownership of Securities. Ballinrobe is the beneficial
owner of the BV Shares and, upon consummation of the exchange of the Shares and
the other consideration under the Termination and Settlement Agreement for the
BV Shares as provided in Section 1(a), will transfer and deliver to the Company
valid title to the BV Shares, free and clear of any lien or encumbrance.
(2) Authority. The execution, delivery and performance by
Ballinrobe of this Agreement are within the powers of Ballinrobe and have been
duly authorized by all necessary action on the part of Ballinrobe. Assuming due
execution and delivery by the Company, this Agreement constitutes a valid and
binding agreement of Ballinrobe, enforceable against Ballinrobe 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) Representations and Warranties of the Company. The Company
represents and warrants to Ballinrobe as follows:
(1) 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
to execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby.
(2) Concerning the Shares. The Shares have been duly
authorized and when issued in exchange for the BV Shares 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 Company's authorized
capitalization consists of 100 million shares of Common Stock, of which
approximately 12.9 million shares are issued and outstanding as of the date of
this Agreement, and 10 million shares of preferred stock, of which none are
issued or outstanding as of the date of this Agreement. All the Company's
outstanding shares were duly authorized for issuance, were validly issued, and
are fully paid and nonassessable. Except as set forth on Schedule A, there are
no outstanding options, warrants or rights of any kind to acquire any shares of
any class, and there are no outstanding securities convertible into any shares
of any class, of the Company, nor are there any obligations to issue any such
options, rights or securities.
(3) 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 Ballinrobe,
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.
(4) 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, (A) result in any violation of any provision of the
articles of incorporation or by-laws or similar instruments of the Company or
any subsidiary, (B) 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,
(C) 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 of operations or
prospects of the Company and the subsidiaries, taken as a whole, or (D) 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.
2
(5) 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 shareholders 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 Nasdaq Small-Cap Market for the listing of the
Shares.
(6) Commission Filings. The Company has timely filed all
reports required to be filed under the Exchange Act and any other material
reports or documents required to be filed with the Commission since December 31,
2001. All of such reports and documents complied, when filed, in all material
respects, with all applicable requirements of the Exchange Act, and did not at
the time they were filed (or if amended or superseded by a filing prior to the
date of this Agreement, then on the date of such filing) contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(7) Private Placement. The Shares may be issued to Ballinrobe
pursuant to this Agreement without registration under the Securities Act.
(d) Absence of Brokers, Finders, Etc. Each party represents and
warrants to the other that no broker, finder, or similar person is entitled to
any commission, fee, or other compensation by reason of the transactions
contemplated by this Agreement.
(2) Resale Registration Statement. If at any time on or after March 31,
2003 and before the second anniversary of the Closing Date, Ballinrobe requests
in writing that the Company file a Registration Statement on Form S-3 (or, if
Form S-3 is not available, on such form of registration statement as is then
available to effect a registration of the Shares) (the "Resale Registration
Statement") to register the offering and sale by each Stockholder of the Shares,
then the Company shall as expeditiously as practicable, and in any event within
60 days of such request, file the Resale Registration Statement with the
Commission and shall use its best efforts to cause the Resale Registration
Statement to become effective promptly following the filing thereof and to
remain effective during the Effective Period. Before filing the Resale
Registration Statement or any amendments thereto, the Company shall furnish to
each Stockholder copies of all such documents proposed to be filed.
(3) Registration Procedures. In connection with the registration of the
Shares under the Securities Act, the Company shall as expeditiously as possible:
(a) prepare and file with the Commission any amendments and
supplements to the Resale Registration Statement and the prospectus included
therein as may be necessary to keep the Resale Registration Statement effective
for a period ending on the earliest of (i) the date on which all Shares
registered under such Resale Registration Statement have been sold and (ii) the
date all Shares may be sold under Rule 144 within 90 days (but in any event for
at least any period required under the Securities Act) (the "Effective Period");
(b) furnish to each Stockholder who so requests such reasonable
numbers of copies of the Resale Registration Statement and prospectus (as may be
amended or supplemented) in conformity with the requirements of the Securities
Act, and such other documents as such Stockholder may reasonably request in
order to facilitate the public sale or other disposition of the Shares owned by
such Stockholder;
3
(c) use its best efforts to register or qualify the Shares covered
by the Resale Registration Statement under the securities or Blue Sky Laws of
such states or U.S. jurisdictions as a Stockholder shall reasonably request, and
do any and all other acts and things that may reasonably be necessary or
desirable to enable the Stockholder to consummate the public sale or other
disposition in such states or jurisdictions of the Shares owned by such
Stockholder; provided, however, that the Company shall not be required in
connection with this paragraph (c) to qualify as a foreign corporation or
execute a general consent to service of process in any jurisdiction;
(d) upon the occurrence of any event of the kind described in
Section 6(c)(i)-(iv) below, immediately notify each Stockholder thereof and use
its best efforts to promptly rectify, or take such reasonable action with
respect to, such event so that each Stockholder is entitled to resume the
disposition of such Stockholder's Shares in accordance with the terms of this
Agreement;
(e) notify each Stockholder, and confirm such advice in writing:
(i) when the Resale Registration Statement has become effective, (ii) when any
post-effective amendment to the Resale Registration Statement becomes effective
and (iii) of any request by the Commission for any amendment or supplement to
the Resale Registration Statement or prospectus or for additional information;
(f) as soon as practicable after the effective date of the Resale
Registration Statement, and in any event within sixteen (16) months thereafter,
have "made generally available to its security holders" (within the meaning of
Rule 158 under the Securities Act) an earning statement (which need not be
audited) covering a period of at least twelve (12) months beginning after the
effective date of the Resale Registration Statement and otherwise complying with
Section 11(a) of the Securities Act;
(g) cause all Shares to be listed on each securities exchange or
included for trading in such automated quotation system on or in which the
Common Stock of the Company are then listed or included;
(h) otherwise use its best efforts in its performance of its
obligations hereunder to comply with all applicable rules and regulations of the
Commission and of state securities commissions and any stock exchange or
automated quotation system; and
(i) deliver promptly to each Stockholder copies of all
correspondence between the Commission and the Company, its counsel or
independent public accountants and all memoranda relating to discussions with
the Commission or its staff with respect to the Resale Registration Statement.
4. Blackout Periods; Revised Prospectus.
(a) The Company may by written notice require that each
Stockholder who has requested a prospectus to immediately cease sales of shares
pursuant to the Resale Registration Statement (a "Black Out Requirement") at any
time that the Company becomes engaged in a business activity or negotiation
which is not disclosed in the prospectus included in the Resale Registration
Statement which the Company reasonably believes must be disclosed therein under
applicable Law and which the Company desires to keep confidential for business
purposes, the disclosure of which at such time the Company reasonably believes
could have an adverse effect on the Company or its business or prospects or on
the successful completion of such business activity or negotiation or on the
market price of the Company's stock. The Black Out Requirement shall not exceed
90 days in any twelve month period, and the time period of any one Black Out
Requirement shall not exceed 45 days. The Company shall not be required to
disclose to such Stockholders the reasons for requiring a suspension of sales
under the Resale Registration Statement, and such
4
Stockholders shall not disclose to any third party (other than financial
advisors or other experts consulted by such Stockholders with respect to any
such sales of shares who agree to keep the information confidential) the
existence of any such suspension. The Company will promptly notify all such
Stockholders as soon as the Company determines that the Blackout Requirement is
no longer necessary.
(b) If the Company has delivered a prospectus to a Stockholder and
after having done so the prospectus is amended to comply with the requirements
of the Securities Act, the Company shall promptly notify such Stockholder and,
if requested, such Stockholder shall immediately cease making offers of the
Shares and return all undistributed prospectuses to the Company. The Company
shall promptly provide such Stockholder with a revised prospectus and, following
receipt of the revised prospectus, the Stockholders shall be free to resume
making offers of the Shares held by such Stockholders.
5. Allocation of Expenses. The Company will pay all Registration
Expenses relating to the Resale Registration Statement. For purposes of this
Section 5, the term "Registration Expenses" shall mean all expenses incurred by
the Company in complying with this Agreement, including all registration and
filing fees, listing fees, printing expenses, fees and disbursements of counsel
for the Company, accounting fees, and any state Blue Sky fees and expenses;
provided, however, that except as expressly set forth herein, in no event shall
Registration Expenses include any underwriting fees, discounts, commissions or
fees attributable to the sale of the Shares or any counsel, accounting or other
persons retained by a Stockholder in connection with the consummation of the
transactions contemplated by this Agreement.
6. Stockholder Covenants. Each Stockholder hereby covenants and agrees
that:
(a) it will not sell any Shares under the Resale Registration
Statement until it has requested and received a prospectus from the Company and
received notice from the Company that the Resale Registration Statement has
become effective;
(b) it will comply with the prospectus delivery requirements of
the Securities Act as applicable to such Stockholder in connection with sales of
Shares pursuant to the Resale Registration Statement;
(c) upon receipt of a notice from the Company of the occurrence of
any event of the kind described in Section 6(c)(i)-(iv) below, such Stockholder
shall forthwith discontinue disposition of such Shares under the Resale
Registration Statement until such Stockholder receives copies of the
supplemented prospectus and/or amended Resale Registration Statement or until
the Stockholder is advised in writing by the Company that the use of the
applicable prospectus may be resumed:
(i) any request by the Commission or any other governmental
body for amendments or supplements to the Resale Registration Statement
or prospectus or for additional information;
(ii)the issuance by the Commission of any stop order
suspending the effectiveness of the Resale Registration Statement or
the initiation of any proceedings for that purpose;
(iii) the receipt by the Company of any written notification
with respect to the suspension of the qualification or exemption from
qualification of the Shares for sale in any jurisdiction, or the
initiation or threatening in writing of any proceeding, for such
purpose; or
5
(iv)the occurrence of any event that makes any statement made
in the Resale Registration Statement or prospectus or any document
incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires any revisions to
the Resale Registration Statement, prospectus or other documents
so that, in the case of the Resale Registration Statement or the
prospectus, as the case may be, it will not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading.
(d) each Stockholder shall furnish to the Company information
regarding such Stockholder and the distribution of the Shares as is required by
Law to be disclosed in the Resale Registration Statement and is different from
the information concerning such Stockholder and the plan distribution contained
in the Resale Registration Statement.
7. Indemnification.
(a) In connection with the Resale Registration Statement, to the
extent permitted by Law:
(1) the Company will indemnify and hold harmless each
Stockholder, each of such Stockholder's directors, officers, employees and
affiliates, any underwriter (as defined in the Act) for such Stockholder and
each Person, if any, who controls such Stockholder or underwriter within the
meaning of the Securities Act or the Exchange Act, against any losses, claims,
damages, or liabilities (joint or several) to which they may become subject
under the Securities Act, the Exchange Act or other federal or state law,
insofar as such losses, claims, damages, or liabilities (or actions in respect
thereof) arise out of or are based upon any of the following statements,
omissions or violations: (A) any untrue statement or alleged untrue statement of
a material fact contained in the Resale Registration Statement, including any
preliminary prospectus or final prospectus contained therein or any amendments
or supplements thereto, or in any document filed under state securities or "blue
sky" laws in connection therewith, (B) the omission or alleged omission to state
therein a material fact required to be stated therein, or necessary to make the
statements contained in therein not misleading or (C) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act or any state
securities law; and the Company will pay to each such indemnified party, as
incurred, any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability, or
action; provided, however, that the indemnity agreement contained in this
subsection 7(a)(i) shall not apply to: (w) amounts paid in settlement of any
such loss, claim, damage, liability, or action if such settlement is effected
without the consent of the Company (which consent shall not be unreasonably
withheld), or (x) any such loss, claim, damage, liability, or action to the
extent that it arises out of or is based upon information contained in the
Resale Registration Statement in reliance upon and in conformity with written
information furnished expressly for use in connection with the Resale
Registration Statement by any such Stockholder, underwriter or controlling
person, (y) any such loss, claim, damage, liability or action to the extent that
it arises out of or is based upon such indemnified party; and
(2) each selling Stockholder will indemnify and hold harmless
the Company, each of its directors, each of its officers who has signed the
Resale Registration Statement, each person, if any, who controls the Company
within the meaning of the Securities Act, any underwriter, any other Stockholder
selling securities in such Resale Registration Statement and any controlling
person of any such underwriter or other Stockholder, against any losses, claims,
damages, or liabilities (joint or several) to which any of the foregoing persons
may become subject, under the Securities Act, the Exchange Act or other federal
or state law, insofar as such losses, claims, damages, or liabilities (or
actions in respect thereto) arise out of or are based upon information contained
in the Resale
6
Registration Statement in conformity with written information furnished by such
Stockholder expressly for use in connection with the Resale Registration
Statement; and each such Stockholder will pay, as incurred, any legal or other
expenses reasonably incurred by any person intended to be indemnified pursuant
to this subsection 7(a)(ii), in connection with investigating or defending any
such loss, claim, damage, liability, or action; provided, however, that the
indemnity agreement contained in this subsection 7(a)(ii) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Stockholder, which
consent shall not be unreasonably withheld. In no event shall the liability of
any Stockholder under this subsection 7(a)(ii) exceed the sales proceeds, net of
any commissions, received by such Stockholder upon the sale of the Shares
pursuant to the Resale Registration Statement.
(b) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 7, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, shall not relieve such indemnifying party of any liability to the
indemnified party under this Section except if, and only to the extent that, the
indemnifying party is actually and materially prejudiced thereby; and the
omission so to deliver written notice to the indemnifying party will not relieve
it of any liability that it may have to any indemnified party otherwise than
under this Section 7.
(c) If the indemnification provided for in this Section 7 is held
by a court of competent jurisdiction to be unavailable to an indemnified party
with respect to any loss, liability, claim, damage, or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage, or expense
(i) in such proportion as is appropriate to reflect the relative benefits
received by the indemnifying party on the one hand and the indemnified party on
the other or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law or provides a lesser sum to the indemnified party
than the amount hereinafter calculated, in such proportion as is appropriate to
reflect not only the relative benefits received by the indemnifying party on the
one hand and the indemnified party on the other but also the relative fault of
the indemnifying party on the one hand and of the indemnified party on the other
in connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission. In no event shall any contribution by a Stockholder under
this subsection 7(c) exceed the sales proceeds, net of any commissions, received
by such Stockholder upon the sale of the Shares pursuant to the Resale
Registration Statement. In no event shall a person or entity guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) be entitled to contribution from any person or entity who was
not guilty of fraudulent misrepresentation.
7
(d) The obligations of the Company and the Stockholders under this
Section 7 shall survive the completion of the offering of Shares under the
Resale Registration Statement.
(e) Any indemnity agreements contained herein shall be in addition
to any other rights to indemnification or contribution which any indemnified
party may have pursuant to law or contract and shall remain operative and in
full force and effect regardless of any investigation made or omitted by or on
behalf of any indemnified party.
8. Restrictions on Transfer.
(a) No Stockholder shall, during the period commencing on the
Closing Date and ending on the first anniversary thereof, directly or
indirectly, offer, pledge, sell, contract to sell, sell any option or contract
to purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, lend or otherwise transfer, assign or dispose of any of the
Shares, enter into any hedging transactions with brokers or dealers, which may
in turn engage in short sales in the course of hedging the positions such
brokers or dealers may assume, with respect to any of the Shares or enter into
any transaction to sell Company common stock short whereby such Stockholder
could deliver any of the Shares to close out such short positions (in each case
a "Transfer") held by such Stockholder.
(b) Notwithstanding Section 8(a) above, a Stockholder, may
transfer any or all of the Shares to an affiliate of Ballinrobe or BT Group PLC,
provided that, in any such case, it shall be a condition to such Transfer that
the transferee execute and deliver to the Company a joinder, in a form
reasonably satisfactory to the Company, stating that such transferee
acknowledges and agrees that such Affiliate is receiving and holding the Shares
subject to the provisions of this Agreement.
(c) In order to enforce the restrictions contained in this Section
8, the Company may place a legend on the certificates for the Shares and impose
stop-transfer instructions with respect to the Shares until the first
anniversary of the Closing Date.
(d) The provisions of this Section 8 shall terminate upon the
earliest of: (i) the closing of a sale, transfer or other disposition to any
Person of more than 50% of the shares of the capital stock then outstanding of
the Company; (ii) the closing of a sale, transfer or other disposition of all or
substantially all of the assets of the Company; or (iii) the merger or
consolidation of the Company with or into another corporation, other than a
merger or consolidation of the Company in which the holders of shares of the
Company's voting capital stock outstanding immediately before such merger or
consolidation hold greater than fifty percent (50%) of the surviving entity's
voting capital stock after such consolidation or merger.
9. Transfers Pursuant to Rule 144 or Resale Registration Statement.
Upon a Stockholder's compliance with this Agreement and the applicable
provisions of Rule 144 or prospectus delivery requirements under the Securities
Act, as the case may be, the Company will take such action as may be required
(including, soliciting an appropriate opinion from legal counsel to issue an
appropriate opinion) to cause its transfer agent to effectuate any transfer of
Shares properly requested by such Stockholder, in accordance with the terms and
conditions of Rule 144 or any sale under the Resale Registration Statement.
With a view to making available to the Stockholders the benefits of
Rule 144 and any other rule or regulation of the Commission that may at any time
permit the Stockholders to sell securities of the Company to the public without
registration, the Company agrees to:
8
(a) at all times make and keep public information available, as
those terms are understood and defined in Rule 144;
(b) file with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act; and
(c) furnish to the Stockholders, forthwith upon request (i) a
written statement by the Company that it has complied with the reporting
requirements of Rule 144 and the Securities Act and Exchange Act, (ii) a copy of
the most recent annual or quarterly report of the Company and such other reports
and documents so filed by the Company, and (iii) such other information as may
be reasonably requested in availing the Stockholders of any rule or regulation
of the SEC which permits the selling of any such securities without
registration.
10. Certain Definitions. As used in this Section 1 and elsewhere in
this Agreement, the following terms shall have the following respective
meanings:
"Closing Date" means the date that the Shares are issued to
Ballinrobe under the Termination and Settlement Agreement.
"Commission" means the Securities and Exchange Commission, or any
other Federal agency at the time administering the Securities Act.
"Effective Period" has the meaning set forth in Section 3(a).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Registration Expenses" means the expenses described in Section 4.
"Registration Statement" means a registration statement filed by
the Company with the Commission under the Securities Act for a public offering
and sale of securities of the Company.
"Rule 144" means Rule 144 of the Commission promulgated under the
Securities Act.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"Shares" means (a) the 1,000,000 shares of Common Stock issuable
to the Ballinrobe pursuant to the Termination and Settlement Agreement and (b)
any other shares of Common Stock of the Company issued in respect of such shares
(because of stock splits, stock dividends, reclassifications, recapitalizations
or similar events); provided, however, that shares of Common Stock held by a
Stockholder which are Shares shall cease to be Shares upon any sale by such
Stockholders pursuant to the Resale Registration Statement or pursuant to the
provisions of Rule 144.
"Stockholder" means initially Ballinrobe, and any transferee of
Ballinrobe that receives shares in accordance with the terms of Section 8(b)
above.
11. No Assignment. The rights granted pursuant to this Agreement may
not be transferred or assigned by the Company or any Stockholder, except that
any Stockholder may assign its rights to any transferee that receives shares in
accordance with the terms of Section 8(b) above.
9
12. Amendments and Waivers. The provisions of this Agreement may be
modified or amended at any time and from time to time only by an agreement or
consent in writing executed by the Company and each Stockholder. No provision of
this Agreement may be waived except in a written instrument signed by the party
against whom enforcement of such waiver is sought. No waiver of any default with
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of
any party to exercise any right hereunder in any manner impair the exercise of
any such right accruing to it thereafter.
13. Notices. All notices, requests, consents and other communications
required to be given pursuant to this Agreement shall be in writing and shall be
given by personal delivery, facsimile with confirmation of receipt or by
certified or registered mail, postage prepaid, return receipt requested. Notices
shall be deemed effective when personally delivered or so received by facsimile
or three days after being so mailed, as the case may be, to the parties at the
following respective addresses or at such other address of which either party
shall notify the other in accordance with this Section 13:
The Company: Verticalnet, Inc.
000 Xxxxxxx Xxxxx Xxxxxxx
Xxxxxxx, XX 00000
Attention: General Counsel
(facsimile: 610.240.9470)
Any Stockholder: To the address set forth on the records
of the Company or such other address as
may be forwarded by a Stockholder in
writing
14. Entire Agreement; Governing Law. This Agreement shall be governed
by and construed, interpreted and enforced in accordance with the laws of the
State of New York, without giving effect to any of the conflicts of laws
provisions thereof that would require the application of the substantive laws of
any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS
OF SUCH PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT
HEREOF. This Agreement, together with the Termination and Settlement Agreement,
embodies the entire agreement and understanding between the parties, and
supersedes all prior agreements and understandings relating to the subject
matter hereof.
15. Remedies. In the event of a breach by the Company or by a
Stockholder, of any of their respective obligations under this Agreement, each
Stockholder or the Company, as the case may be, in addition to being entitled to
exercise all rights granted by law and under this Agreement, including recovery
of damages, will be entitled to specific performance of its rights under this
Agreement. The Company and each Stockholder agrees that monetary damages would
not provide adequate compensation for any losses incurred by reason of a breach
by it of any of the provisions of this Agreement and hereby further agrees that,
in the event of any action for specific performance in respect of such breach,
it shall waive the defense that a remedy at law would be adequate. Each of the
Parties shall be entitled to seek an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any court having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity. In any action at law or
suit in equity to enforce this Agreement or the rights of any of the parties
hereunder, the prevailing party in such action or suit shall be entitled to
receive a reasonable sum for its attorneys' fees and all other reasonable costs
and expenses incurred in such action or suit, if in
10
such action or suit the principal claim or defense of the non-prevailing party
is held to be without merit because it was not reasonably supported by Laws or
material and relevant facts.
16. Severability. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, the portion of such provision that is
found to be unenforceable shall be excluded from this Agreement and the balance
of the Agreement shall be interpreted as if such provision were so excluded and
shall be enforceable in accordance with its terms.
17. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
18. Interpretation. Unless the context of this Agreement clearly
requires otherwise, (a) references to the plural include the singular, the
singular the plural, the part the whole, (b) references to any gender include
all genders, (c) "including" has the inclusive meaning frequently identified
with the phrase "but not limited to" and (d) references to "hereunder" or
"herein" relate to this Agreement. The section and other headings contained in
this Agreement are for reference purposes only and shall not control or affect
the construction of this Agreement or the interpretation thereof in any respect.
Section references are to this Agreement unless otherwise specified.
11
IN WITNESS WHEREOF, this Agreement has been executed as of the date
first above written.
VERTICALNET, INC.
By: ____________________________________
Name: Xxxxx X. XxXxx
Title: President and Chief Executive
Officer
BALLINROBE LIMITED
By:_____________________________________
Name:
Title:
SCHEDULE A
OPTIONS AND WARRANTS OUTSTANDING
Rights to purchase preferred stock: none
Rights to purchase common stock:
Warrant to purchase 47,862 shares of common stock, with Internet
Capital Group, Inc., dated November 25, 1998.
$7.855 million principal amount of 5-1/4% Convertible Subordinated
Debentures due 2004, convertible into Common Stock at a conversion price of $200
per share.
Options (approximately 3.2 million) to purchase common stock, and right
to purchase 25,000 shares of restricted stock, under Verticalnet's equity
compensation plans (1996 Amended and Restated Equity Compensation Plan, Equity
Compensation Plan for Employees (1999), 1999 Long-Term Incentive Plan and 2000
Equity Compensation Plan) held by employees, former employees and non-employee
directors.
