EXHIBIT 10.19
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT, dated as of December 23, 2002 (this
"Agreement"), by and between VERTICALNET, INC., a Pennsylvania corporation (the
"Company"), and Xxxxxxxx X. X'Xxxxx (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
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.
"Closing Date" means 12:00 noon, New York City time, on December 31,
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
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or any warrant, option, subscription or purchase right with respect to any such
convertible, exchangeable or other security.
"Debentures" means $250,000.00 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.
"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.
"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.
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"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) The Purchase. 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 the payment by the Company to the
Holder of $16,000 in cash (the "Consideration"), and the Company agrees (A)
to pay the Consideration in cash for the Debentures.
(2) The Holder has instructed the Company to make payment of the
Consideration to the Holder's broker (the ":Broker"), and has agreed with
the Broker to deliver the Debentures to the Company.
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 offices of the Company. At the closing,
upon the terms and subject to the conditions of this Agreement, (1) the Company
shall pay the Consideration to the Broker, on behalf of the Holder, against
delivery by the Broker, on behalf of the Holder, to the Company of the
Debentures in the manner provided in Section 2(c), and (2) the Holder shall
direct the Broker to deliver to the Company the Debentures against payment and
delivery by the Company to the Broker, on behalf of the Holder.
(c) Payment. Payment by the Company to the Holder on the Closing Date
of the Consideration shall be made by wire transfer of immediately available
funds at the closing on the Closing Date to:
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Bank: Xxxxxxxx & Company
ABA No.
For credit to account No. 961-01845
For credit to the account of Xxxxxxxx X. X'Xxxxx.
(d) DTC Delivery. 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 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 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.
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.
(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.
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(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 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.
(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.
5. [this section intentionally left blank].
6. Conditions to the Company's Obligation to Close. The Holder
understands that the Company's obligation to issue and pay to the Holder the
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
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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 Close. The Company
understands that the Holder's obligation to exchange Debentures for the
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;
(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;
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.
(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 COMMONWEALTH OF PENNSYLVANIA.
(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.
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(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 General
Counsel of the Holder.
(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
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.
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(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.
(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;
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(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 December 31, 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 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: /s/ Xxxxxxxxx X. Xxxxx
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Name:
Title:
Address:
000 Xxxxxxx Xxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Date: December 23, 2002
By: /s/ Xxxxxxxx X. X'Xxxxx
------------------------------
Name: Xxxxxxxx X. X'Xxxxx
Title:
Address:
Facsimile No.:
Date: December 23, 2002
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