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EXHIBIT 2.2
DATED 26TH JULY, 2000
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(1) YELLOWBUBBLE.COM INC
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(2) ZAREEBA LIMITED
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(3) ZIAUDDIN & OTHERS
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AGREEMENT
FOR THE SALE AND PURCHASE OF THE WHOLE
OF THE ISSUED SHARE CAPITAL OF
ZAREEBA LIMITED
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BIRD & BIRD
90 FETTER LANE
LONDON EC4A 1JP
TEL: 020 7415 6000
FAX: 020 7415 6111
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THIS AGREEMENT is made the 26th day of July 2000
BETWEEN
PARTIES:
(1) YELLOWBUBBLE.COM.INC a corporation incorporated under the laws of
Nevada whose principal place of business is at 104/106, The Chambers,
Chelsea Harbour, London SW10 0XF, England (the "PURCHASER").
(2) ZAREEBA LIMITED (Registered no. 3796629) whose registered office is
at 1 Northumberland Avenue, London, WC2N 5BW (the "COMPANY").
(3) THE PERSONS whose names and addresses are set out in column (1) of
Schedule 1 (the "VENDORS").
RECITALS
(A) The Vendors are the beneficial owners of, and have agreed to sell to
the Purchaser, the whole of the issued share capital of the Company,
which for the avoidance of doubt, operates the Business and whose
sole assets consist of the Business (as defined below).
(B) Particulars of the Company are set out in Schedule 2.
(C) The Company has no subsidiaries.
OPERATIVE PROVISIONS
1. 1. DEFINITIONS AND INTERPRETATION
1.1. Words and expressions in this Agreement have the following meanings
unless the context requires otherwise:
"ACT" means the Companies Act 1985;
"AGREED FORM" means in the form previously agreed by the parties to
this Agreement and signed for the purposes of identification by or on
their behalf;
"BUSINESS" means the business of the Company consisting of a
membership database including 131,428 members (as of July 3, 2000) on
a Microsoft SQL7 database, together with the name Zareeba Limited and
Sharkhunt.com Limited, the Zareeba Web site and the Sharkhunt Web
site designed by Formul8 and located respectively at
http://www.zareeba.com and http://www.sharkhunt.com including
Sharkhunt.com's back-end for member registration, the Adbar/zBar
designed by Dr. Matthias Mueller of MIT's Laboratory of Computer
Science, the back-end system for the Adbar/zBar which includes a
fixed-adverts-set, a non-personalised advert serving engine; a
fixed-news-set, a non-personalised (manually updated) ticker serving
engine; the source codes that implement an open XML-based
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communication protocol for request/response of adverts and news set,
together with all Sharkhunt/Zareeba brand/trademarks owned by the
Company, together with the Liabilities and the Fixed Assets;
"BUSINESS DAY" means a day on which clearing banks are generally open
for business in the City of London;
"COMPANY'S SOLICITORS" means Bird & Bird of 90 Fetter Lane, London
EC4A 1JP;
"COMPLETION" means the performance by the parties of the obligations
assumed by them respectively under clause 4;
"CONSIDERATION" means the purchase consideration payable for the
Shares as specified in clause 3;
"CONSIDERATION SHARES" means the 169,737 shares of Common Stock of
$0.001 each in the capital of the Purchaser which are to be allotted
to the Vendors as referred to in clause 4 and set out in column 3 of
Schedule 1;
"DISCLOSURE LETTER" means the letter of even date herewith from the
Warrantors to the Purchaser relating to the Warranties;
"FIXED ASSETS" means the fixed plant, machinery, equipment, apparatus
and fittings and which are listed in Schedule 4;
"INTELLECTUAL PROPERTY" means patents, trade marks, service marks,
registered designs, applications for any of the foregoing, copyright,
know-how, design rights, database rights, confidential information,
trade and business names and any other similar protected rights in
any country;
"LIABILITIES" means the liabilities of the Company in respect of
obligations falling due for performance or satisfaction up to
Completion which total Pound Sterling99,991 and which are specified
in the unaudited accounts of the Company dated 7 July 2000 in the
agreed form and which are attached in Schedule 5;
"REGISTRATION RIGHTS AGREEMENT" means the registration rights
agreement in the agreed form;
"SHARES" means the ordinary shares of Pound Sterling0.01 each in the
capital of the Company referred to in Recital (A);
"WARRANTIES" means the warranties and representations contained or
referred to in clause 5 and Schedule 3;
"WARRANTORS" means Ziauddin and Lik Mui.
1.2 references to statutes or statutory provisions include those statutes
or statutory provisions as amended, extended, consolidated,
re-enacted or replaced from time to
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time and any orders, regulations, instruments or other subordinate
legislation made thereunder;
1.3 subject as herein otherwise expressly defined, words and expressions
defined in Part XXVI of the Act and in the relevant legislation
relating to taxation bear the same respective meanings;
1.4 unless otherwise specified, words importing the singular include the
plural, words importing any gender include every gender and words
importing persons include bodies corporate and unincorporate, and (in
each case) vice versa;
1.5 references to clauses and other provisions are references to clauses
and other provisions of this Agreement;
1.6 the clause headings shall not affect interpretation.
2. SALE AND PURCHASE
2.1 Each of the Vendors hereby agrees to sell with full title guarantee
the number of Shares shown opposite his/her/its name in column (2) of
Schedule 1 and the Purchaser hereby agrees to purchase the same free
from all claims, liens, charges, equities, options and encumbrances
whatsoever and together with all rights now or hereafter attaching
thereto upon and subject to the terms and conditions of this
Agreement.
2.2 The Purchaser shall not be obliged to complete the purchase of any of
the Shares unless the purchase of at least 90% of the Shares is
completed simultaneously.
2.3 Each of the Vendors hereby waives and agrees to procure the waiver of
any restrictions on transfer (including pre-emption rights) which may
exist in relation to the Shares under the existing articles of
association of the Company or otherwise.
3. CONSIDERATION
3.1 The purchase consideration for the Shares shall be the sum of
$848,684 (being $1,000,000 less the value of the Liabilities
specified in Schedule 5) to be satisfied by the issue and allotment
by the Purchaser to the Vendors of the Consideration Shares ranking
pari passu with the existing issued Common Stock of $0.01 each in the
capital of the Purchaser.
3.2 The Consideration Shares shall be apportioned between each of the
Vendors as specified in Column (3) of Schedule 1.
4. COMPLETION
4.1 Completion shall take place at the offices of the Company's
Solicitors immediately after the execution of this Agreement.
4.2 On or prior to Completion:
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4.2.1 the Vendors shall in exchange for the Consideration Shares
deliver to the Purchaser:
(i) duly completed and signed transfers of the Shares in
favour of the Purchaser (or as it may direct) together
with the relative share certificates;
(ii) the resignations of the directors and the secretary from
their respective offices in the Company with a written
acknowledgement confirming that they have no claim against
the Company on any grounds whatsoever;
(iii) the common seal and certificate of incorporation of the
Company;
(iv) the statutory books, books of account and documents of
record of the Company;
(v) the appropriate forms to amend and the mandates given by
the Company to its bankers; and
(vi) the Registration Rights Agreement(s) duly executed by the
Vendors.
4.3 At or as soon practicable after Completion, the source codes that
implement the open XML-based communication protocol for
request/response of adverts and news set shall be delivered to the
Purchaser.
4.4 At or prior to Completion a Board Meeting of the Company shall be
held at which the following resolutions shall be passed:
4.4.1 such persons as the Purchaser may nominate shall be
appointed directors of the Company;
4.4.2 the transfers referred to in clause 4.2.1(i) shall be
approved (subject where necessary to stamping); and
4.4.3 the resignations referred to in clause 4.2.1(ii) and (iii)
shall be submitted and accepted.
4.5 At or prior to Completion, the Purchaser shall:
4.5.1 issue and allot to the Vendors the Consideration Shares in
the proportions set out in Schedule 1;
4.5.2 deliver to the Vendors the stock certificates relating to
the Consideration Shares (together with such other
documents as the Vendors may reasonably require at their
request);
4.5.3 deliver to the Vendors a counterpart of the Registration
Rights Agreement duly executed by the Purchaser; and
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4.5.4 in consideration for the sum of Pound Sterling1.00, the
Purchaser shall sell, assign, and otherwise transfer with
full title guarantee the Fixed Assets to Tenara Limited.
4.6 At or within 21 Business Days of Completion the Purchaser shall pay
and fully settle each of the Liabilities.
5. WARRANTIES
5.1 The Warrantors hereby severally warrant and represent to the
Purchaser in the terms of Schedule 3.
5.2 The Warranties are given subject to the matters fairly disclosed or
referred to in the Disclosure Letter but to no other qualification
whatsoever.
5.3 Each of the Warranties shall be construed as separate and independent
and shall not be limited by the terms of any of the other Warranties
or by any other term of this Agreement save for those contained in
this clause 5 and the matters fairly disclosed in the Disclosure
Letter.
5.4 The Warranties shall be deemed to be given immediately before
Completion and shall continue in full force and effect after
Completion.
5.5 The Purchaser may not assign the whole or any part of any of the
Warranties to a transferee.
5.6 Where the expression "SO FAR AS THE WARRANTORS ARE AWARE" (or like
expression) is used in Schedule 3, it shall mean to the best of the
knowledge, information and belief of the Warrantors.
5.7 The Purchaser acknowledges that it is entering into this Agreement in
good faith having made due and careful enquiry of the Company as at
the date of Completion.
5.8 The maximum aggregate liability of each of the Warrantors in respect
of all claims under the Warranties shall be the value of their
proportion of the Consideration Shares.
5.9 No liability shall attach to the Warrantors in respect of claims
under the Warranties unless the aggregate cumulative amount payable
by the Warrantors in respect of all such claims exceeds US$50,000
whereupon the Warrantors shall be liable for the whole of such
claims, except for the first $50,000.
5.10 No liability shall attach to the Warrantors in respect of any claim
under the Warranties unless the Purchaser shall have given notice in
writing to the Warrantors (specifying particulars of the claim in
reasonable detail based on the information in the possession of the
Purchaser) no later the first anniversary of the date of Completion
and legal proceedings in respect of such claim have been commenced
within 6 calendar months following the service of such notice by
being both issued and served.
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5.11 Where the Purchaser is entitled to recover from some other person
(whether by recovery from insurers, payment, discount, credit,
set-off or otherwise) any sum in respect of any matter or event which
could give rise to a warranty claim, the Purchaser will take all
reasonable steps to recover that sum before making the warranty claim
and any sum will reduce the amount of warranty claim.
5.12 In the event that the Purchaser becomes aware of any matter which
might constitute or give rise to a claim by any third party under the
Warranties, the Purchaser shall immediately notify the Warrantors in
writing giving reasonable details as far as practicable and shall not
settle or compromise any such claim or make any admission of
liability without the prior written consent of the Warrantors, such
consent not to be unreasonably withheld. The Purchaser will at all
time disclose in writing to the Warrantors all information and
documents relating to any warranty claim and if required by the
Warrantors, give the Warrantors and his professional advisers
reasonable access to the personnel, premises, records, documents or
chattels of the Purchaser to enable them to be interviewed or
examined. The Warrantors shall be entitled to require the Purchaser
to take such reasonable steps or proceedings as the Warrantors may
consider necessary in order to mitigate any claim under the
Warranties and the Purchaser shall act in accordance with any such
requirements of the Warrantors subject to the Purchaser being
indemnified by the Warrantors against all reasonable costs and
expenses incurred in connection therewith.
5.13 Nothing herein or in the Warranties shall be deemed to relieve the
Purchaser from any common law duty to mitigate any loss or damage
incurred by it.
5.14 The Purchaser shall not be entitled to recover damages or otherwise
obtain reimbursement under this Agreement more than once in respect
of the same loss.
- 5.15 If any claim under the Warranties shall arise by reason of some
liability which at the time that such claim shall be notified to the
Warrantors shall be contingent only then the Warrantors shall not be
under any obligation to make any payment to the Purchaser in respect
of such claim until such time as such contingent liability ceases to
be so contingent.
- 5.16 The Purchaser confirms to the Warrantors that in entering into
this Agreement it has not relied on any representation, warranty or
undertaking except as expressly set out in this Agreement. The
Purchaser irrevocably and unconditionally waives any right it may
have to claim damages for any misrepresentation not contained in this
Agreement or for breach of warranty not contained in this Agreement
unless such misrepresentation or warranty was made fraudulently.
- 5.17 Each of the parties irrevocably and unconditionally waives any
right it may have following Completion to rescind this Agreement
(other than for fraudulent misrepresentation) or to treat any other
party as having repudiated this Agreement.
5.18 The Purchaser represents and warrants to each of the Vendors that:
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(i) the Purchaser is a company duly incorporated, validly
existing and in good standing under the laws of the State
of Nevada, USA; the Purchaser has all material licences
and qualifications legally required to do business and is
in good standing. The Purchaser has full corporate power
and authority to conduct its business and own its
properties as now conducted and owned and to make,
execute, deliver and perform this Agreement, the
Registration Rights Agreement and the transactions
contemplated thereby; and has or will take such corporate
action as is necessary to enable it to perform its
obligations hereunder and under the agreements
contemplated hereby;
(ii) this Agreement has been duly executed and delivered by the
Purchaser and, if duly executed and delivered by all other
parties, constitutes legal, valid and binding obligations
of the Purchaser enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, reorganisation
and other laws affecting the enforcement of creditors'
rights generally from time to time in effect and to the
exercise of judicial discretion in accordance with general
equitable principles
(iii) the execution and delivery of this Agreement, together
with all documents and instruments contemplated herein,
the consummation of the transactions contemplated thereby
and the compliance with the terms, conditions and
provisions thereof by the Purchaser do not (i) contravene
any provision of the Purchaser's articles of incorporation
or by-laws; (ii) conflict with or result in a breach of or
constitute a default (or an event which would, with the
passage of time or the giving of notice or both,
constitute a default) under any of the terms, conditions
or provisions of any indenture, mortgage, loan or credit
agreement or any other agreement or instrument to which
the Purchaser is a party or by which it or its assets are
bound or affected and which is material to the Purchaser;
(iii) violate or constitutes a breach of any decision,
judgement or order of any court or arbitration board, or
of any governmental department, commission, board, agency
or instrumentality, domestic or foreign by which the
Purchaser is bound or to which it is subject where the
violation or breach is material to the Purchaser; or (iv)
violate any applicable law, rule or regulation by the
Purchaser where the violation is material to the
Purchaser;
(iv) save for the approval by the Securities and Exchange
Commission of the issue of the Consideration Shares, no
consent or approval of, or filing and expiration of a
period for disapproval by, any US federal or state
governmental authority is required for the Purchaser to
consummate the transactions contemplated by this
Agreement;
(v) to the knowledge of the Purchaser there are no actions,
suits, causes of action, claims litigation, arbitration,
administrative hearings or other form of proceedings or
disputes pending, threatened against, involving or
affecting the Purchaser, in any court, at law or in
equity, or before any arbitration board or any
governmental department, commission, board, bureau, agency
or instrumentality, which would have a material adverse
effect on the business of the Purchaser;
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(vi) the Purchaser's Form 10-Q for the quarter ending 31 March
2000, as filed with the United States Securities and
Exchange Commission shows a true and fair view of the
assets, liabilities, financial position and state of
affairs of the Purchaser on that date;
(vii) since 31 March 2000, the Purchaser has carried on its
business in the ordinary and usual course and there has
been no material adverse change in the financial prospects
of the Purchaser except as has been disclosed to the
Vendors;
(viii) the only issued and outstanding capital stock of the
Purchaser (as at immediately prior to the issue of the
Consideration Shares) is as disclosed to the Vendor;
(ix) save as disclosed to the Vendors and pursuant to clause 6
(SEC Requirements) and to public filings in the US, there
are no options, warrants, pre-emption rights, conversion
rights, agreements or other rights outstanding which could
require the issue by the Purchaser of shares of common
stock in the capital of the Purchaser or other ownership
interests in the Purchaser;
(x) the Consideration Shares will not be subject to any
restriction on transfer, other than those restrictions
required by the United States Securities Act of 1933, as
amended; and
(xi) upon compliance by the Purchaser of its obligations
pursuant to clause 4, each of the Vendors will receive
full title to the Consideration Shares allotted to him,
which Consideration Shares will be validly issued and
delivered fully paid and non-assessable, free and clear
from all claims, liens, charges, equities, options and
encumbrances whatsoever and together with all rights now
or hereafter attaching thereto.
5.19 The Purchaser shall not be liable in respect of any claim under the
warranties given by the Purchaser in clause 5.18 unless written
notice of such claim setting out reasonable details of the relevant
claim shall have been given to the Purchaser by any of the Vendors by
not later the first anniversary of Completion and the liability of
the Purchaser for any claim specified in such notice shall absolutely
determine and cease (unless the amount payable in respect of the
relevant claim has been agreed by the Purchaser within twelve months
of the date of such written notice) if legal proceedings have not
been instituted in respect of such claim by the due service of
process on the Purchaser within six months of the date of such
written notice.
6. SEC REQUIREMENTS
6.1 Each of the Vendors understands that at the date of this Agreement:
(i) the Consideration Shares have not been registered under the U.S.
Securities Act of 1933, as amended (the "SECURITIES ACT") or any
applicable state securities laws, or the laws of any foreign
jurisdiction; (ii) such Vendor cannot sell such Consideration Shares
unless they are registered under the Securities Act and any
applicable state securities laws or unless, in the opinion of counsel
to the Purchaser, exemptions from such registration requirements are
available; (iii) a legend will be placed on any certificate
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or certificates evidencing such Consideration Shares, stating that
such Consideration Shares have not been registered under the
Securities Act and setting forth or referring to the restrictions on
transferability and sales of the securities; and (iv) until such time
as such Consideration shares are registered or have obtained
exemption from registration, the Purchaser will place stop transfer
instructions against such Consideration Shares and the certificates
for such Consideration Shares to restrict the transfer thereof.
6.2 Each Vendor agrees not to resell or otherwise transfer such shares
without compliance with the terms of this Agreement, the Securities
Act and any applicable state or foreign securities laws.
6.3 Each Vendor represents that the Purchaser has made available all
information which such Vendor deemed material to making an informed
investment decision in connection with such Vendor's acquisition of
Consideration Shares, including, without limitation, all reports
filed by the Purchaser with the U.S. Securities and Exchange
Commission; that such Vendor is a sophisticated investor and is in a
position regarding the Purchaser, which, based upon economic
bargaining power or otherwise, enabled and enables such Vendor to
obtain information from the Purchaser in order to evaluate the merits
and risks of acquiring Consideration Shares; and that such Vendor has
been represented by counsel and been advised concerning the risks and
merits of acquiring Consideration Shares. Further, each Vendor
acknowledges that the Purchaser has made available to such Vendor the
opportunity to ask questions of, and receive answers from the
Purchaser, its officers, directors and other persons acting on its
behalf, concerning the Purchaser and to obtain any additional
information, to the extent the Purchaser possesses such information
or can acquire it without unreasonable effort or expense, necessary
to verify the accuracy of the information disclosed to such Vendor.
7. NOTICES
7.1 Any demand, notice or communication shall be deemed to have been duly
served:-
(i) if delivered by hand, when left at the address for service
provided for in this clause; or
(ii) if sent by prepaid first class post, 48 hours after being
posted (excluding Saturdays, Sundays and other days which
are not Business Days); or
(iii) if transmitted by facsimile at the time of transmission
following receipt of the appropriate facsimile
confirmation sheet
provided that where, in the case of delivery by hand or transmission
by facsimile such delivery or transmission occurs on a day which is
not a Business Day or after 4.00 p.m. on a Business Day, service will
be deemed to occur on the next following Business Day.
7.2 Any demand, notice or communication will be made in writing or by
facsimile addressed to the recipient at its registered office.
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8. GENERAL
8.1 This Agreement may not be assigned in whole or in part but is binding
upon and shall enure for the benefit of the parties' personal
representatives and successors.
8.2 Failure or delay by any party in exercising any right or remedy of
that party under this Agreement shall not in any circumstances
operate as a waiver of it, nor shall any single or partial exercise
of any right or remedy in any circumstances preclude any other or
further exercise of it or the exercise of any other right or remedy.
8.3 The failure by either party at any time to require performance by the
other party or to claim a breach of any term of this Agreement shall
not be deemed to be a waiver of any right under this Agreement.
8.4 The terms and conditions of this Agreement constitute the entire
understanding between the parties relating to the subject matter
hereof unless any representation or warranty made about this
Agreement was made fraudulently and, save as may be expressly
referred to or referenced herein, supersedes all prior
representations, writings, negotiations or understandings with
respect hereto.
8.5 It is not intended that any third party pay enforce the benefit
conferred on it under this Agreement or any of the documents referred
to in it. Accordingly, the terms of the Contract (Rights of Third
Parties) Act 1999 shall not apply to this Agreement.
8.6 This Agreement may be executed in any number of counterparts and by
the parties on separate counterparts each of which so executed and
delivered shall be an original, but all the counterparts shall
together constitute one and the same agreement.
8.7 Notwithstanding that the whole or any part of any provision of this
Agreement may prove to be illegal or unenforceable the other
provisions of this Agreement and the remainder of the provision in
question shall continue in full force and effect.
8.8 Except as may be required by law or the rules of any recognised
investment exchange, none of the parties hereto shall at any time
make any announcement of this transaction or disclose any term
thereof which is not in the public domain without the prior written
approval of the other parties and the parties shall each use their
best endeavours to keep the terms of this transaction which are not
already in the public domain from time to time strictly confidential.
8.9 The Purchaser shall pay all the costs (including the legal costs of
the Company's Solicitors), charges and expenses incurred in relation
to the negotiation, preparation and implementation of this Agreement
and the documents referred to herein and everything ancillary or
incidental thereto, including bearing all stamp duty payable on the
transfers of the Shares.
8.10 The parties shall execute and do all such further deeds, documents
and things as may be necessary to carry the provisions of this
Agreement into full force and effect.
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8.11 This Agreement shall be governed and construed in all respects in
accordance with English law and the parties agree to submit to the
non-exclusive jurisdiction of the English courts.
EXECUTED under hand the day and year first before written
Signed by Prashant Patel )
for and on behalf of ) /s/ Prashant Patel
YELLOWBUBBLE.COM.INC. )
in the presence of: )
Signed by Narinder Dhillon )
for and on behalf of ) /s/ Narinder Dhillon
YELLOWBUBBLE.COM.INC. )
in the presence of: )
Signed by David Scroggie )
for and on behalf of ) /s/ David Scroggie
YELLOWBUBBLE.COM.INC. )
in the presence of: )
Signed by Tony Pelz )
for and on behalf of ) /s/ Tony Pelz
WEBBIFY.CO.INC. )
in the presence of: )
Signed by Nigel Saperia )
for and on behalf of ) /s/ Nigel Saperia
THEN LIMITED )
in the presence of: )
Signed by Philip Ley )
for and on behalf of ) /s/ Philip Ley
BRANDED LIMITED )
in the presence of: )
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Signed by ZIAUDDIN ) /s/ Ziauddin
in the presence of: )
Signed by DEVENDRA MOOLJEE ) /s/ Devendra Mooljee
in the presence of: )
Signed by LIK MUI ) /s/ Lik Mui
in the presence of: )
Signed by DOUGLAS MCARTHUR ) /s/ Douglas McArthur
in the presence of: )
Signed by ZAIN NAQI ) /s/ Zain Naqi
in the presence of: )
Signed by REBECCA KERR ) /s/ Rebecca Kerr
in the presence of: )
Signed by MATTHIAS MULLER ) /s/ Matthias Muller
in the presence of: )
Signed by NICHOLAS WATKINS ) /s/ Nicholas Watkins
in the presence of: )
Signed by CLIVE HULSKRAMER ) /s/ Clive Hulskramer
in the presence of: )
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Signed by GEORGE HADJIYIANNIS ) /s/ George Hadjiyiannis
in the presence of: )
SIGNED by a duly authorised )
officer for and on behalf ) /s/ illegible
of ZAREEBA LIMITED )
in the )
presence of: )
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