SECURITIES PURCHASE AND FACILITIES AGREEMENT
by and between
CSP INC.
and
VERTICALBUYER, INC.
AGREEMENT
AGREEMENT (this "Agreement" is dated as of March 2, 2000 by and between CSP
Inc., a Massachusetts corporation ("CSPI", and VerticalBuyer, Inc., a Delaware
corporation ("VerticalBuyer").
WHEREAS, CSPI is a publicly-traded company the common stock of which is
traded on the National Market System of the National Association of Securities
Dealers Automatic Quotation Market ("NASDAQNM") and
WHEREAS, business and financial information concerning CSPI is available on
the Electronic Data Gathering, Analysis and Retrieval System (known as "XXXXX")
maintained by the United States Securities and Exchange Commission ("SEC") on
its World Wide Web site, xxx.xxx.xxx; and
WHEREAS, VerticalBuyer is a private Delaware corporation which is the
holding company and parent of its wholly-owned subsidiary, a United Kingdom
company, Lightseek, Limited ("Lightseek"); and
WHEREAS, CSPI desires to purchase an aggregate of 5,000,000 shares of the
common stock, $.001 par value each) of VerticalBuyer ("VerticalBuyer Common
Stock"), at $1.00 per share, representing, after the purchase, 25% of the issued
and outstanding shares of VerticalBuyer Common Stock and VerticalBuyer desires
to sell to CSPI 5,000,000 shares of VerticalBuyer Common Stock, ("Shares")
subject to the terms and conditions hereinafter set forth; and
WHEREAS, CSPI desires to assist in the establishment of VerticalBuyer's
United States office through provision of office space, computer facilities and
related personnel and services and by the provision of members of its board of
directors on the board of directors and committees of the of VerticalBuyer and
VerticalBuyer desire the assistance of CSPI pursuant to the terms and conditions
hereafter set forth; and
WHEREAS, CSPI and VerticalBuyer are executing and delivering this Agreement
in reliance upon the exemption from securities registration afforded by the
provisions of Regulation D ("Regulation D"), as promulgated by the SEC under the
1933 act of 1933, as amended (the "1933 Act"); and
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the Parties are executing and delivering a registration rights
agreement pursuant to which VerticalBuyer has agreed to provide certain
registration rights under the 1933 act and the rules and regulations promulgated
thereunder, a voting agreement among the majority stockholders of VerticalBuyer
and CSPI and three warrants, all in the forms attached hereto as Exhibit 2.02.
NOW THEREFORE, in consideration of the premises and the covenants set forth
herein, the parties hereto (the "Parties" and, individually, a "Party") hereby
agree as follows:
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ARTICLE 1
PURCHASE AND SALE OF SECURITIES - FACILITIES PROVIDED
1.01 Purchase and Sale.
(a) Subject to the terms and conditions of this Agreement, CSPI hereby
purchases and VerticalBuyer hereby sells to CSPI 2,000,000 Shares and
three redeemable common stock purchase warrants (the "Warrants") each
warrant containing the right to purchase 1,000,000 Shares at $1.00 for
a period of two years from the date of an effective registration
statement relating to the underlying Shares. The three classes of
Warrant are redeemable upon thirty days' written notice as follows:
Class "A", upon the effectiveness of a registration statement relating
to the underlying shares of VerticalBuyer Common Stock; Class "B", in
the event the closing price of the Shares on VerticalBuyer's public
trading market exceeds $2.00 for a period of twenty (20) continuous
trading days; and Class "C", in the event the closing price of the
Shares on VerticalBuyer's trading market exceeds $3.00 for a period of
twenty (20) continuous trading days. In the event the closing price of
the Shares on VerticalBuyer's public trading market exceeds $3.00, the
time period for redemption of the Class "B" and Class "C" Warrants
will run concurrently.
(b) In addition, VerticalBuyer agrees to issue and sell 75,000 additional
Class "B" Warrants to holders of existing CSPI options whose names and
addresses are listed on Schedule 1.01 at a price of $.01 per Class "B"
Warrant. These Warrants will be included in the same registration
statement to be filed with the SEC relating to the Shares purchased by
CSPI and the Shares underlying the Warrants purchased by CSPI.
(c) The number and exercise price of the Warrants shall be adjusted
appropriately in the event of an acquisition, stock split, sale of
stock at prices less than the market price of the Shares or similar
transaction pursuant to paragraph 7 of the Warrant to be entered into
simultaneously with this Agreement.
1.02 Purchase Price. The purchase price of the 2,000,000 Shares and the
3,000,000 Warrants pursuant to paragraph 1.01 above is $2,000,000.
1.03 Exemption from Registration. Certificates representing the shares of
VerticalBuyer Common Stock issued to CSPI shall bear a restrictive legend
setting forth that the shares were issued in a transaction exempt from
registration under the Securities Act of 1933, as amended (the "1933 Act")
and may not be transferred unless pursuant to an effectiveness registration
statement filed with the SEC or an exemption therefrom.
1.04 Registration Statement. VerticalBuyer will file a registration statement
relating to the Shares issued to CSPI, the Warrants issued to CSPI and to
stockholders of CSPI and the Shares underlying the Warrants pursuant to a
registration rights agreement (the "Registration Rights Agreement") to be
signed by the Parties at or prior to the Closing.
1.05 Facilities Provision. CSPI shall provide from the date of the Closing use
of office space in its headquarters office, consultation and other
facilities as set forth in a memorandum of understanding attached hereto as
Exhibit 1.05.
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ARTICLE 2
CLOSING
2.01 The Closing. The transactions contemplated by this Agreement shall be
completed simultaneously or prior to the execution of this Agreement. The
Closing shall take place at the offices of CSPI or at another place
mutually agreed upon by the Parties. The "Closing" shall mean the
deliveries to be made by the Parties at the Closing in accordance with this
Agreement.
2.02 Deliveries by VerticalBuyer. At the Closing, VerticalBuyer shall deliver to
CSPI Share certificates, and the Warrants all duly and properly executed,
representing the Shares and Warrants purchased by CSPI pursuant to
paragraph 1.01(a). If not previously delivered, VerticalBuyer shall also
deliver to CSPI at the Closing the documents specified in Exhibit 2.02.
2.03 Deliveries by CSPI. At the Closing, CSPI shall deliver a certified or bank
check in the amount of $2,000,000 to the order of "VerticalBuyer, Inc."
2.04 Further Assurances. At or after the Closing, each Party shall prepare,
execute, and deliver, such further instruments of conveyance, sale,
assignment, or transfer, and shall take or cause to be taken such other or
further action, as any Party shall reasonably request of any other Party at
any time or from time to time in order to consummate, in any other manner,
the terms and provisions of this Agreement, including opinions of counsel
for each Party relating to the representations and warranties set forth in
this Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF VERTICALBUYER
In this Agreement, any reference to any event, change, condition or effect
being "material" with respect to any entity or group of entities means any
material event, change, condition or effect related to the financial condition,
properties, assets (including intangible assets), liabilities, business,
operations or results of operations of such entity or group of entities. In this
Agreement, any reference to a "Material Adverse Effect" with respect to any
entity or group of entities means any event, change or effect that is materially
adverse to the financial condition, properties, assets, liabilities, business,
operations or results of operations of such entity. In this Agreement, any
reference to a Party's "knowledge" means such Party's actual knowledge after
reasonable inquiry of officers, directors and other employees of such Party
reasonably believed to have knowledge of such matters. VerticalBuyer represents
and warrants to CSPI as follows:
3.01 Organization, Standing and Power. VerticalBuyer and Lightseek are
corporations duly organized, validly existing and in good standing under
the laws of Delaware and the United Kingdom, respectively. VerticalBuyer
and Lightseek have the corporate power to own their properties and to carry
on their business as now being conducted and as proposed to be conducted
and are duly qualified to do business and are in good standing in each
jurisdiction in which the failure to be so qualified and in good standing
would have a Material Adverse Effect on VerticalBuyer or Lightseek as the
case may be. VerticalBuyer has delivered a true and correct copy of its
certificate of incorporation, certificate of amendment, certificate of good
standing and by-laws or other charter documents, as applicable, to CSPI.
Neither VerticalBuyer nor Lightseek is in violation of any of the
provisions of its respective certificate of incorporation or bylaws or
equivalent organizational documents. VerticalBuyer has no direct or
indirect majority-owned subsidiaries other than Lightseek.
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3.02 Authority. VerticalBuyer has all requisite corporate power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of VerticalBuyer. This Agreement has
been duly executed and delivered by VerticalBuyer and constitutes the valid
and binding obligation of VerticalBuyer enforceable against VerticalBuyer
in accordance with its terms, except that such enforceability may be
limited by bankruptcy, insolvency, moratorium or other similar laws
affecting or relating to creditors' rights generally, and is subject to
general principles of equity. The execution and delivery of this Agreement
by VerticalBuyer does not, and the consummation of the transactions
contemplated hereby will not, conflict with, or result in any violation of,
or default under (with or without notice or lapse of time, or both), or
give rise to a right of termination, cancellation or acceleration of any
material obligation or loss of any material benefit under (i) any provision
of the certificate of incorporation or bylaws of VerticalBuyer, or (ii) any
mortgage, indenture, lease, contract or other agreement or instrument,
permit, concession, franchise, license, judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to VerticalBuyer or any of
its properties or assets. No consent, approval, order or authorization of,
or registration, declaration or filing with, any court, administrative
agency or commission or other governmental authority or instrumentality
("Governmental Entity") is required by or with respect to VerticalBuyer or
Lightseek in connection with the execution and delivery of this Agreement
or the consummation of the transactions contemplated hereby, except for (i)
such consents, approvals, orders, authorizations, registrations,
declarations and filings as may be required under applicable state
securities laws and the securities laws of any foreign country, and (ii)
such other consents, authorizations, filings, approvals and registrations
which, if not obtained or made, would not have a Material Adverse Effect on
VerticalBuyer and/or and would not prevent, or materially alter or delay
any of the transactions contemplated by this Agreement.
3.03 Financial Statements. VerticalBuyer has delivered to CSPI the financial
statements for the fiscal period ended November 30, 1999 (the "Financial
Statements") of Lightseek. The Financial Statements are complete and
correct in all material respects and were prepared in accordance with
generally accepted accounting principles applicable to United Kingdom
corporations, applied on a consistent basis throughout the periods
indicated and with each other. The Financial Statements accurately set out
and describe in all material respects the financial condition and operating
results as of the dates, and for the periods, indicated therein, subject to
normal year-end adjustments. VerticalBuyer will maintain and Lightseek will
continue to maintain a standard system of accounting established and
administered in accordance with generally accepted accounting principles.
3.04 Absence of Certain Changes. Since November 30, 1999, the date of the
Financial Statements, except as otherwise disclosed in writing,
VerticalBuyer represents that Lightseek has conducted its business in the
ordinary course consistent with past practice and that VerticalBuyer has
been an inactive company except for the issuance of Shares to the owners of
Lightseek and Shares and common stock purchase warrants certain consultants
and that, as to VerticalBuyer and Lightseek, there has not occurred: (i)
any change, event or condition that has resulted in, or might reasonably be
expected to result in, a Material Adverse Effect; (ii) any acquisition,
sale or transfer of any material asset other than in the ordinary course of
business and consistent with past practice; (iii) any material change in
accounting methods or practices (including any change in depreciation or
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amortization policies or rates); (iv) any declaration, setting aside, or
payment of a dividend or other distribution, or any direct or indirect
redemption, purchase or other acquisition of any shares of capital stock
except as disclosed to CSPI; (v) any material contract entered into other
than in the ordinary course of business, and or any material amendment or
termination of, or default under, any material contract; (vi) any
undisclosed material amendment or change to the incorporation documents or
bylaws; (vii) any increase in or modification of the compensation or
benefits payable or to become payable to any directors or employees other
than in the ordinary course of business and consistent with past practice
or (viii) any negotiation or agreement to do any of the things described in
the preceding clauses (i) through (vii) (other than negotiations with CSPI
and its representatives regarding the transactions contemplated by this
Agreement or as otherwise disclosed to CSPI).
3.05 Absence of Undisclosed Liabilities. Neither VerticalBuyer nor Lightseek has
any material obligations or liabilities of any nature (matured or
unmatured, fixed or contingent) other than (i) those set forth or
adequately provided for in the Financial Statements; (ii) those incurred in
the ordinary course of business and not required to be set forth in the
Financial Statements under generally accepted accounting principles; (iii)
those incurred in the ordinary course of business since the Financial
Statements and consistent with past practice; and (iv) those incurred in
connection with the execution of this Agreement.
3.06 Litigation. There is no private or governmental action, suit, proceeding,
claim, arbitration or investigation pending before any agency, court or
tribunal, foreign or domestic, or, to the knowledge of VerticalBuyer,
threatened against either VerticalBuyer or Lightseek or any of their
properties or any of their respective officers or directors (in their
capacities as such) that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect on VerticalBuyer
or Lightseek except as has been previously disclosed to CSPI. There is no
judgment, decree or order against VerticalBuyer or Lightseek, or, to the
knowledge of VerticalBuyer, any of its directors or officers (in their
capacities as such), that could prevent, enjoin, or materially alter or
delay any of the transactions contemplated by this Agreement, or that could
reasonably be expected to have a Material Adverse Effect on VerticalBuyer.
3.07 Restrictions on Business Activities. There is no agreement, judgment,
injunction, order or decree against either VerticalBuyer or Lightseek which
has or could reasonably be expected to have the effect of prohibiting or
materially impairing any current or future business practice, any
acquisition of property or the conduct of business as currently conducted
or as proposed to be conducted.
3.08 Governmental Authorization. VerticalBuyer and Lightseek have obtained each
federal, state, county, local or foreign governmental consent, license,
permit, grant, or other authorization of a Governmental Entity (i) pursuant
to which either of them currently operates or holds any interest in any of
its properties or (ii) that is required for their operation, and all of
such authorizations are in full force and effect, except where the failure
to obtain or have any such authorizations could not reasonably be expected
to have a Material Adverse Effect on either VerticalBuyer or Lightseek.
3.09 Title to Property. Lightseek has good and marketable title to all of its
respective properties, interests in properties and assets, real and
personal, reflected in the Financial Statements or acquired after the
Financial Statements. The property and equipment of Lightseek that are used
in the operations of its businesses are in all material respects in good
operating condition and repair, ordinary wear and tear excepted.
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3.10 Intellectual Property.
(a) Lightseek owns or is licensed or otherwise possesses legally
enforceable rights to use all trademarks, trade names, service marks,
copyrights, domain registrations and any applications therefor, and
tangible or intangible proprietary information or material
("Intellectual Property") that are used in the business of Lightseek
as currently conducted, except to the extent that the failure to have
such rights has not had and would not reasonably be expected to have a
Material Adverse Effect on Lightseek.
(b) Lightseek has not been sued in any suit, action or proceeding and has
not brought any action, suit or proceeding for infringement of
Intellectual Property or breach of any license or agreement involving
Intellectual Property against any third party. The conduct of its
business does not infringe any trademark, service xxxx, copyright,
trade secret or other proprietary right of any third party, where such
infringement would have a Material Adverse Effect on Lightseek.
3.11 Interested Party Transactions. Neither VerticalBuyer nor Lightseek is
indebted to any director, officer, employee or agent (except for amounts
due as normal salaries and bonuses and in reimbursement of ordinary
expenses), and no such person is indebted to either VerticalBuyer or
Lightseek except as disclosed in the Financial Statements.
3.12 Insurance. Neither VerticalBuyer nor Lightseek currently has insurance.
3.13 Compliance With Laws. To its knowledge, VerticalBuyer and Lightseek have
complied with, are not in violation of, and have not received any notices
of violation with respect to, any federal, state, local or foreign statute,
law or regulation with respect to the conduct of their business, or the
ownership or operation of their respective business, except for such
violations or failures to comply as could not be reasonably expected to
have a Material Adverse Effect.
3.14 Minute Books. VerticalBuyer will make available to CSPI a complete and
accurate summary of all meetings of directors and shareholders or actions
by written consent since the time of incorporation of VerticalBuyer, and
reflect all transactions referred to in such minutes accurately in all
material respects.
3.15 Complete Copies of Materials. VerticalBuyer has delivered or made available
true and complete copies of each agreement not in the ordinary course of
business to which VerticalBuyer or Lightseek is a party.
3.16 Brokers' and Finders' Fees. VerticalBuyer has not incurred, nor will it
incur, directly or indirectly, any liability for brokerage or finders' fees
or agents' commissions or investment bankers' fees or any similar charges
in connection with this Agreement or any transaction contemplated hereby
except as set forth in Exhibit 3.16.
3.17 Board Approval. This Agreement has been adopted by the Board of Directors
of VerticalBuyer in resolutions which are in full force and effect.
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3.18 Representations Complete. None of the representations or warranties made by
VerticalBuyer, or documents furnished by VerticalBuyer or Lightseek
pursuant to this Agreement or any written statement furnished to CSPI
pursuant hereto or in connection with the transactions contemplated hereby,
when all such documents are read together in their entirety, contains or
will contain at the Closing any untrue statement of a material fact, or
omits or will omit at the Closing to state any material fact necessary in
order to make the statements contained herein or therein, in the light of
the circumstances under which made, not misleading; provided, however, that
for purposes of this representation, any document attached hereto as a
"Superseding Document" (even if not actually physically attached hereto)
that provides information inconsistent with or in addition to any other
written statement furnished to CSPI in connection with the transaction
contemplated hereby, shall be deemed to supersede any other prior document
or written statement furnished to CSPI with respect to such inconsistent or
additional information.
3.19 Authorization. All acts and conditions required by law on the part of
VerticalBuyer to authorize the execution and delivery of this Agreement by
VerticalBuyer and the transactions contemplated herein and the performance
of all obligations of VerticalBuyer hereunder have been duly performed and
obtained, and this Agreement constitutes a valid and legally binding
obligation of VerticalBuyer, enforceable in accordance with its terms,
subject, as to the enforcement of remedies, to applicable bankruptcy,
insolvency, moratorium, reorganization or similar laws affecting creditors'
rights generally, to general equitable principles and to limitations on the
enforceability of indemnification provisions as applied to certain types of
claims arising hereafter, if any, under the federal securities laws.
3.20 Compliance With Other Instruments. The execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated
hereby will not result in any violation or default of any provision of any
instrument, judgment, order, writ, decree or contract to which
VerticalBuyer or Lightseek is a party or by which it is bound, or require
any consent under or be in conflict with or constitute, with or without the
passage of time and giving of notice, either a violation or default under
any such provision.
3.21 Governmental Consents. No consent, approval, order or authorization of, or
registration, qualification, designation, declaration or filing with, any
federal, regional, state or local governmental authority of the United
States on the part of VerticalBuyer or Lightseek is required in connection
with the consummation of the transactions contemplated by this Agreement,
except for filings, if any, required pursuant to applicable federal and
state securities laws, which filings will be made within the required
statutory period.
3.22 Litigation. There is no action, suit, proceeding, or investigation pending
or, to its knowledge, currently threatened against VerticalBuyer or
Lightseek which questions the validity of this Agreement or the right of
VerticalBuyer to enter into this Agreement or to consummate the
transactions contemplated hereby.
3.23 Authorized Shares of Common Stock and Warrants. The Shares and Warrants to
be transferred to CSPI under this Agreement will be free and clear of any
lien, pledge, security interest or other encumbrance and, upon delivery of
the securities at the Closing as provided for in this Agreement, and
assuming CSPI is acquiring the Shares and Warrants in good faith and
without notice of any adverse claim, CSPI will acquire good title thereto,
free and clear of any lien, pledge, security interest or encumbrance (other
than restrictions on transfer arising under applicable securities laws).
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3.24 Disclosure. VerticalBuyer has fully provided CSPI with all the information
in its possession that CSPI has requested in determining whether to
purchase the securities offered by VerticalBuyer. Neither Article 3 of this
Agreement nor any document attached to this Agreement nor any certificate
delivered pursuant hereto that, in any such case, has been or will be
provided by or on behalf of VerticalBuyer contains any untrue statement of
a material fact or omits to state a material fact necessary to make the
statements made herein or therein not misleading in light of the
circumstances under which they were made.
3.25 Capital Structure. The capitalization of VerticalBuyer consists of
50,000,000 shares of common stock, par value $.001 each, of which
15,000,000 shares are issued and outstanding as of the date of closing and
5,000,000 shares of "blank check" preferred stock, $.001 par value each of
which none are issued. There are no other outstanding securities of
VerticalBuyer and no outstanding commitments to issue any securities,
except WE MUST FILL THIS NUMBER IN options and warrants issued to
employees, directors and consultants the terms and conditions of which are
set forth in Exhibit 3.25.
3.26 Taxes. VerticalBuyer and Lightseek have timely filed all tax returns
required to be filed and has paid all taxes shown thereon to be due. The
Financial Statements (i) fully accrue all actual and contingent liabilities
for taxes with respect to all periods through December 31, 1999 and neither
VerticalBuyer nor its subsidiary has or will incur any tax liability in
excess of the amount reflected on the Financial Statements with respect to
such periods, and (ii) properly accrue in accordance with generally
accepted accounting principles all liabilities for taxes payable after
December 31, 1999 with respect to all transactions and events occurring on
or prior to such date. No material tax liability since December 31, 1999
has been incurred by VerticalBuyer or its subsidiary other than in the
ordinary course of business and adequate provision has been made in the
Financial Statements for all taxes since that date in accordance with
generally accepted accounting principles.
3.27 Employee Matters. To its best knowledge, VerticalBuyer and its subsidiary
are in compliance in all material respects with all currently applicable
laws and regulations respecting employment, discrimination in employment,
terms and conditions of employment, wages, hours and occupational safety
and health and employment9 practices, and is not engaged in any unfair
labor practice. To its best knowledge, there are no pending claims against
VerticalBuyer under any workers compensation plan or policy or for long
term disability. All employee benefit plans, stock option plans (including
the terms and conditions of any issued and outstanding options) or other
employee stock issuance plans or rights and all employment agreements are
listed on Exhibit 3.27.
3.28 Delivery of Documents. VerticalBuyer has delivered or will deliver to CSPI
at or prior to the Closing all documents required to be delivered under
this Agreement.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF CSPI
CSPI represents and warrants to VerticalBuyer as follows:
4.01 Organization, Standing and Power. CSPI is a corporation duly organized,
validly existing and in good standing under the laws of Massachusetts. CSPI
has the corporate power to own its properties and to carry on its business
as now being conducted and as proposed to be conducted and is duly
qualified to do business and is in good standing in each jurisdiction in
which the failure to be so qualified and in good standing would have a
Material Adverse Effect on CSPI.
4.02 Authority. CSPI has all requisite corporate power and authority to enter
into this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of CSPI. This Agreement has been duly executed
and delivered by CSPI and constitutes the valid and binding obligation of
CSPI enforceable against CSPI in accordance with its terms, except that
such enforceability may be limited by bankruptcy, insolvency, moratorium or
other similar laws affecting or relating to creditors' rights generally,
and is subject to general principles of equity. The execution and delivery
of this Agreement by CSPI does not, and the consummation of the
transactions contemplated hereby will not, conflict with, or result in any
violation of, or default under (with or without notice or lapse of time, or
both), or give rise to a right of termination, cancellation or acceleration
of any material obligation or loss of any material benefit under (i) any
provision of the articles of organization or bylaws of CSPI as amended, or
(ii) any material mortgage, indenture, lease, contract or other agreement
or instrument, permit, concession, franchise, license, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to CSPI or
any of its properties or assets. No consent, approval, order or
authorization of, or registration, declaration or filing with, any court,
administrative agency or commission or other governmental authority or
instrumentality ("Governmental Entity") is required by or with respect to
CSPI or CSPI in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby,
except for (i) such consents, approvals, orders, authorizations,
registrations, declarations and filings as may be required under applicable
state securities laws and the securities laws of any foreign country, (ii)
such other consents, authorizations, filings, approvals and registrations
which, if not obtained or made, would not have a Material Adverse Effect on
CSPI and/or and would not prevent, or materially alter or delay any of the
transactions contemplated by this Agreement and (iii) subject, as to the
enforcement of remedies, to applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws affecting creditors' rights generally, to
general equitable principles and to limitations on the enforceability of
indemnification provisions as applied to certain types of claims arising
hereafter, if any, under the federal securities laws.
4.03 Litigation. There is no action, suit, proceeding, or investigation pending
or, to its knowledge, currently threatened against CSPI or CSPI which
questions the validity of this Agreement or the right of CSPI to enter into
this Agreement or to consummate the transactions contemplated hereby.
4.04 Delivery of Documents. CSPI has delivered or will deliver to VerticalBuyer
at or prior to the Closing all documents required to be delivered under
this Agreement.
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ARTICLE 5
LEGEND REMOVAL, TRANSFER, CERTAIN SALES, ADDITIONAL SHARES
5.01 Removal of Legend. The Legend shall be removed and VerticalBuyer shall
issue, or shall cause to be issued, a certificate without such legend to
the holder of any security upon which it is stamped, and a certificate for
a security shall be originally issued without the Legend, if, (a) the
resale of such Security is registered under the 1933 act, (b) such holder
provides VerticalBuyer with an opinion of counsel, in form, substance and
scope customary for opinions of counsel in comparable transactions and
reasonably satisfactory to VerticalBuyer and its counsel (the reasonable
cost of which shall be borne by VerticalBuyer if neither an effective
registration statement under the 1933 act or Rule 144 is available in
connection with such sale) to the effect that a public sale or transfer of
such security may be made without registration under the 1933 act pursuant
to an exemption from such registration requirements.
5.02 Transfer Agent Instructions. VerticalBuyer shall instruct its transfer
agent to issue certificates, registered in the name of CSPI or its
transferees, for the Shares in such amounts specified from time to time by
CSPI or its transferees to exercise of the Warrants.
ARTICLE 6
ELECTION OF DIRECTOR
6.01 VerticalBuyer has taken all corporate and other action necessary to
establish the size of its Board of Directors and to elect, effective upon
the Closing, Xxxxxxxxx Xxxxxxxxx to be one of the four directors. Vertical
Buyer agrees not to change the number of directors constituting the full
Board of Directors except in accordance with the Voting Agreement by and
between the Parties of even date herewith.
ARTICLE 7
CONDITIONS TO OBLIGATIONS OF THE PARTIES
The obligations of CSPI on the one hand, and VerticalBuyer, on the other
hand, to the following conditions on or prior to the Closing:
7.01 Consents and Approvals. The Parties shall have obtained all consents and
approvals of third parties and governmental authorities, if any, required
to consummate the transactions contemplated by this Agreement.
7.02 Representations, Warranties and Agreements. All representations and
warranties made herein by CSPI and VerticalBuyer, shall be true, accurate
and correct in all respects as of the date made and as of the Closing. CSPI
and VerticalBuyer, shall have performed all obligations and agreements
undertaken by each of them herein to be performed at or prior to the
Closing.
7.03 Certificate. CSPI shall have received from VerticalBuyer and VerticalBuyer
shall have received from CSPI, a certificate, dated as of the Closing and
executed by the President or Chief Executive Office and Secretary of
VerticalBuyer and CSPI, respectively to the effect that the conditions set
forth in Article 3 or Article 4 respectively shall have been satisfied.
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7.04 No Material Adverse Changes. There shall not have occurred any material
adverse change in the financial condition, properties, assets (including
intangible assets), liabilities, business, operations or results of
operations of VerticalBuyer or Lightseek.
7.05 No Actions. Consummation of the transactions contemplated by this Agreement
shall not violate any order, decree or judgment of any court or
governmental body having jurisdiction.
7.06 Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated hereby and all documents and
instruments incident to such transactions shall be in form and substance
reasonably satisfactory to counsel for each of the Parties, and each such
Party (or its counsel) shall have received all such counterpart originals
or certified or other copies of such documents as it may reasonably
request.
7.07 Accuracy of Documents and Information. The copies of all material
instruments, agreements, other documents and written information delivered
to any Party by any other Party or its representatives shall be complete
and correct in all material respects as of the Closing.
7.08 Execution of Agreements. The Parties will have executed the Registration
Rights Agreement and Voting Agreement in the form attached hereto as
Exhibit 2.02.
ARTICLE 8
INDEMNIFICATION
8.01 Indemnification. Each Party will indemnify and hold harmless the other
Party and its respective officers, directors, agents and employees, and
each person, if any, who controls or may control a Party within the meaning
of the 1933 act from and against any and all losses, costs, damages,
liabilities and expenses arising from claims, demands, actions, causes of
action, including, without limitation, reasonable legal fees, except for
the net of any recoveries under existing insurance policies, tax benefits
received by any Party or its affiliates as a result of such damages,
indemnities from third parties or in the case of third party claims, by any
amount actually recovered by a Party or its affiliates pursuant to
counterclaims made by any of them directly relating to the facts giving
rise to such third party claims (collectively, "Damages") arising out of
any misrepresentation or breach of or default in connection with any of the
representations, warranties, covenants and agreements given or made by
VerticalBuyer or CSPI in this Agreement, or any exhibit or schedule to this
Agreement. Each Party and its affiliates shall act in good faith and in a
commercially reasonable manner to mitigate any damages they may suffer.
ARTICLE 9
MISCELLANEOUS
9.01 Notices. Any notice given hereunder shall be in writing and shall be deemed
effective upon the earlier of personal delivery (including personal
delivery by facsimile) or the third day after mailing by certified or
registered mail, postage prepaid, as follows:
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(a) If to CSPI:
Xxxxxxxxx Xxxxxxxxx
Chief Executive Officer
00 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
with a copy to Xxxx X. Xxxxxx, Esquire
Xxxxx, Xxxx & Xxxxx LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Phone: 000-000-0000
Facsimile: 000-000-0000
(b) If to VerticalBuyer:
Xxx Xxxxx
President
c/o Donahue & Associates
00 Xxxxxx Xxxx Xxxx.
Xxxxxxxx, Xxxxxxxxxxx 00000
or to such other address as any Party may have furnished in writing to the
other Party in the manner provided above.
9.02 Entire Agreement; Modifications; Waiver. This Agreement and the documents
and instruments and other agreements specifically referred to herein
constitute the final, exclusive and complete understanding of the Parties
with respect to the subject matter hereof and supersedes any and all prior
agreements, understandings and discussions with respect thereto. No
variation or modification of this Agreement and no waiver of any provision
or condition hereof, or granting of any consent contemplated hereby, shall
be valid unless in writing and signed by the Party against whom enforcement
of any such variation, modification, waiver or consent is sought. The
rights and remedies available to each Party pursuant to this Agreement and
all exhibits hereunder shall be cumulative.
9.03 Captions. The captions in this Agreement are for convenience only and shall
not be considered a part of or affect the construction or interpretation of
any provision of this Agreement.
9.04 Counterparts. This Agreement may be executed in any number of counterparts,
each of which when so executed shall constitute an original copy hereof,
but all of which together shall constitute one agreement.
9.05 Publicity. Except for disclosure required by any law to which either Party
is subject, the timing and content of any announcements, press releases and
public statements to be made prior to the Closing concerning the
transactions contemplated hereby shall be determined solely by CSPI in
consultation with VerticalBuyer.
9.06 Successors and Assigns. No Party may, without the prior express written
consent of each other Party, assign this Agreement in whole or in part.
This Agreement shall be binding upon and inure to the benefit of the
respective successors and permitted assigns of the Parties.
9.07 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the substantive laws of The Commonwealth of
Massachusetts without regard to its principles of conflicts of laws.
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9.08 Further Assurances. At the request of any of the Parties, and without
further consideration, the other Parties agree to execute such documents
and instruments and to do such further acts as may be necessary or
desirable to effectuate the transactions contemplated hereby, required by
law, statute, rule or regulation.
9.09 Confidentiality and Nondisclosure Agreements. All information which shall
have been furnished or disclosed by one Party to the other pursuant to this
Agreement, including without limitation, business, financial and customer
development plans, forecasts, strategies and information, shall be held in
confidence pursuant hereto and shall not be disclosed to any person other
than their respective employees, directors, legal counsel, accountants or
financial advisors, with a need to have access to such information, and
shall not make any use whatsoever of such information except to evaluate
such information internally. The confidentiality provisions set forth
herein shall survive until two years from the date hereof, unless the Party
desiring to disclose the information can document that (i) such information
is (through no improper action or inaction by such Party or any affiliate,
agent, consultant or employee) generally available to the public, or (ii)
was in its possession or known by it prior to receipt from the other Party,
or (iii) was rightfully disclosed to it by a third party, or (iv) was
independently developed by employees of such Party who have had no access
to such information.
9.10 Severability. The invalidity or unenforceability of any one or more
phrases, sentences, clauses or provisions of this Agreement shall not
affect the validity or enforceability of the remaining portions of this
Agreement or any part thereof.
IN WITNESS WHEREOF, each Party has executed this Agreement as of the date
first above written.
CSP INC.
By: /s/ Xxxxxxxxx X. Xxxxxxxxx
----------------------------
Xxxxxxxxx X. Xxxxxxxxx,
Chief Executive Officer
VERTICALBUYER, INC.
By: /s/ Xxx Xxxxx
----------------------
Xxx Xxxxx,
President
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