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Exhibit 10.33
EXECUTION COPY
HOUSTON STREET EXCHANGE, INC.
RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT
This Agreement dated as of February 2, 2000 is entered into by and among
Houston Street Exchange, Inc., a Delaware corporation (the "Company"), BayCorp
Holdings, Ltd., a Delaware corporation ("BayCorp"), Equiva Trading Company, a
Delaware general partnership ("Equiva"), and the persons and entities listed on
EXHIBIT A hereto (each person or entity listed on EXHIBIT A, a "Purchaser" and
all such persons and entities listed on EXHIBIT A, the "Purchasers").
RECITALS
1. The Purchasers are purchasing, concurrently herewith, certain shares
of Series A Convertible Preferred Stock of the Company pursuant to the Series A
Convertible Preferred Stock Purchase Agreement of even date herewith (the
"Series A Preferred Stock Purchase Agreement").
2. Immediately prior to the first closing under the Series A Preferred
Stock Purchase Agreement, Equiva purchased 4,814,815 shares of Common Stock of
the Company ("Common Stock") pursuant to the Common Stock Purchase Agreement of
even date herewith (the "Common Stock Purchase Agreement"). Equiva is also a
Purchaser hereunder and under the Series A Preferred Stock Purchase Agreement.
3. BayCorp owns of record 10,000,000 shares of Common Stock.
4. Collectively, the Purchasers, Equiva (which is also a Purchaser) and
BayCorp are referred to herein as the "Stockholders."
5. The Company and the Stockholders desire to protect the management and
control of the Company from influence by any person not acceptable to the
Stockholders and to assist the Purchasers in selling their Co-Sale Shares (as
defined below) if they so desire.
As used in this Agreement, the term "Shares" shall include all shares of
capital stock of the Company held by the Stockholders, whether now owned or
hereafter acquired. For purposes of calculating any Stockholder's "pro rata"
ownership of Shares, (i) all shares of Preferred Stock of the Company shall be
deemed to have been converted into Common Stock and (ii) a Stockholder's "pro
rata ownership interest" shall equal a fraction, (A) the numerator of which
equals the number of Shares then owned by that Stockholder and (B) the
denominator of which equals the aggregate number of Shares then owned by all
Stockholders.
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As used in this Agreement, the term "Co-Sale Shares" means shares of the
Preferred Stock of the Company and shares of the Common Stock issued or issuable
upon conversion of the Preferred Stock of the Company. Without limiting the
preceding sentence, neither the shares of the Common Stock owned by Equiva
identified in Recital 2 above nor the shares of Common Stock owned by BayCorp
identified in Recital 3 above are Co-Sale Shares.
NOW, THEREFORE, for valuable consideration, it is agreed as follows.
1. RESTRICTIONS ON TRANSFER.
1.1. Any sale, transfer or other disposition, including without
limitation, any pledge or hypothecation, whether voluntarily or by operation of
law ("Transfer") of any of the Shares by any of the Stockholders, other than
according to the terms of this Agreement, shall be void and transfer no right,
title, or interest in or to any of such Shares to the purported transferee.
1.2. An original copy of this Agreement, duly executed by each of the
parties hereto, shall be delivered to the Secretary of the Company and
maintained at the principal executive office of the Company and made available
for inspection by any person requesting it.
1.3. Each of the Stockholders agrees to present the certificates
representing the Shares presently owned or hereafter acquired by it to the
Secretary of the Company and cause the Secretary to stamp on the certificate in
a prominent manner the following legend:
"The sale or other disposition of any of the shares represented
by this certificate is restricted by a Right of First Refusal and
Co-Sale Agreement, dated as of February 2, 2000, as amended from
time to time, among certain of the stockholders of this Company
and this Company (the "Agreement"). A copy of the Agreement is
available for inspection during normal business hours at the
principal executive office of this Company."
2. TRANSFERS NOT SUBJECT TO RESTRICTIONS.
2.1. The rights of the Company and the Stockholders under Sections 4
and 5 hereof shall not apply to any bona fide pledge of Shares by a Stockholder
that creates a mere security interest, provided the pledgee provides the Company
with a written agreement to be bound hereby to the same extent as the
Stockholders.
2.2. The rights of the Company and the Stockholders under Sections 4
and 5 hereof shall not apply to any Transfer of Shares by a Stockholder to any
person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, that Stockholder
(the "Affiliate"), provided the Affiliate
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provides the Company and the Stockholders with a written agreement to be bound
hereby to the same extent as the Stockholders.
2.3. The rights of the Company and the Stockholders under Section 4
and 5 hereof shall not apply to any Transfer of Shares by BayCorp that involves
the spinoff of Shares offered to substantially all stockholders of BayCorp or
any similar transaction that results in stockholders of BayCorp acquiring Shares
or the right to acquire Shares from BayCorp, such Shares or right to acquire
Shares in an amount that is pro rata to each such stockholder's holdings of
BayCorp capital stock.
2.4. The rights of the Company and the Stockholders under Section 4
and 5 hereof shall not apply to (a) the first 1,000,000 shares of Common Stock
that BayCorp Transfers (in addition to any exempted Transfers pursuant to
Section 2.3) and (b) the first 481,500 shares of Common Stock that Equiva
Transfers, in each case such number of shares to be adjusted for stock splits,
stock dividends, recapitalizations and other similar events.
3. OFFER OF SALE; NOTICE OF PROPOSED SALE.
3.1. If a Stockholder desires to Transfer any of its Shares, or any
interest in such Shares, in any transaction other than a Transfer specified in
Section 2 of this Agreement, that Stockholder (the "Initial Selling
Stockholder") shall first deliver written notice of its desire to do so (the
"Notice") to the Company and each of the Stockholders, in the manner prescribed
in Section 10.4 of this Agreement.
3.2. The Notice must specify: (i) the name and address of the party to
which the Initial Selling Stockholder proposes to Transfer the Shares or an
interest in the Shares (the "Offeror"), (ii) the number of Shares the Initial
Selling Stockholder proposes to Transfer (the "Offered Shares"), (iii) the
consideration per Share to be delivered to the Initial Selling Stockholder for
the proposed Transfer, (iv) all other material terms and conditions of the
proposed transaction and (v) that the Offeror has agreed to purchase all of the
Offered Shares on the terms and conditions set forth in the Notice. The giving
of the Notice shall constitute an irrevocable offer by the Initial Selling
Stockholder to sell the Offered Shares to the Company and the Stockholders on
the terms and conditions contained in the Offer.
3.3. If a majority of the members of the Company's Board of Directors
(excluding members employed by the Initial Selling Stockholder) determine that
the proposed transferee is a competitor of the Company, then (i) the Company
shall so inform the Initial Selling Stockholder within 10 days after the Notice
is deemed to have been delivered to the Company and (ii) the Initial Selling
Stockholder shall not Transfer any of its Shares to the proposed transferee.
4. COMPANY'S OPTION TO PURCHASE.
4.1. Subject to Sections 4.5 and 6.1, the Company shall have the first
option to purchase all or any part of the Offered Shares for the consideration
per share and on the same terms and conditions specified in the Notice. The
Company may only
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exercise such option, if at all, by written notice to the Stockholders no later
than 15 days after the Notice is deemed to have been delivered to the Company.
4.2. In the event the Company does not exercise its option within such
15-day period with respect to all of the Offered Shares, the Company shall, by
the last day of such period, give written notice of that fact to the
Stockholders (the "Stockholder Notice"). The Stockholder Notice shall specify
the number of Offered Shares not purchased by the Company (the "Remaining
Shares").
4.3. In the event the Company duly exercises its option to purchase
all or part of the Offered Shares, the closing of such purchase shall take place
at the offices of the Company on the later of (i) the date five days after the
expiration of such 15-day period or (ii) the date that the Stockholders
consummate their purchase of Remaining Shares under Section 5.3 hereof.
4.4. To the extent that the consideration proposed to be paid by the
Offeror for the Offered Shares consists of property other than cash or a
promissory note, the consideration required to be paid by the Company and/or the
Stockholders exercising their options under Sections 4 and 5 hereof may consist
of cash equal to the value of such property, as determined in good faith by
agreement of the Initial Selling Stockholder and the Company and/or the
Stockholders acquiring such Offered Shares.
4.5. Notwithstanding anything to the contrary herein, neither the
Company nor any of the Stockholders shall have any right to purchase any of the
Offered Shares hereunder unless the Company and/or the Stockholders exercise
their option or options to purchase all of the Offered Shares.
5. STOCKHOLDERS' OPTION TO PURCHASE.
5.1. Subject to Sections 4.5 and 6.1, each Stockholder shall have an
option, exercisable for a period of 15 days from the date of delivery of the
Stockholder Notice, to purchase, on a pro rata basis according to the number of
Shares owned by such Stockholder, the Remaining Shares for the consideration per
share and on the same terms and conditions set forth in the Notice. Such options
shall be exercised, if at all, by delivery by such Stockholder of written notice
to the Secretary of the Company. Alternatively, each Stockholder that is a
Purchaser shall have the option, within the same 15-day period, to notify the
Secretary of the Company of its desire to participate in the sale of the Offered
Shares on the same terms set forth in the Notice, and the number of Shares it
wishes to sell; provided however, that no Stockholder may exercise both of the
foregoing options.
5.2. In the event options to purchase have been exercised by the
Stockholders with respect to some but not all of the Remaining Shares, those
Stockholders who have exercised their options within the 15-day period specified
in Section 5.1 shall have an additional option, for a period of five days next
succeeding the expiration of such 15-day period, to purchase all or any part of
the balance of such Remaining Shares on the same terms and conditions set forth
in the Notice, which option
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shall be exercised by the delivery of written notice to the Secretary of the
Company. In the event there are two or more such Stockholders that choose to
exercise the last-mentioned option for a total number of Remaining Shares in
excess of the number available, the Remaining Shares available for each such
Stockholder's option shall be allocated to such Stockholder pro rata based on
the number of Shares owned by the Stockholders so electing.
5.3. If the options to purchase the Remaining Shares are exercised in
full by the Stockholders, the Company shall immediately notify all of the
exercising Stockholders of that fact. The closing of the purchase of the
Remaining Shares shall take place at the offices of the Company no later than
seven days after the date of such notice to the Stockholders.
6. FAILURE TO FULLY EXERCISE OPTIONS; CO-SALE.
6.1. If the Company and the Stockholders do not exercise their options
to purchase all of the Offered Shares within the periods described in this
Agreement (the "Option Period"), then all options of the Company and the
Stockholders to purchase the Offered Shares, whether exercised or not, shall
terminate, but each Purchaser which has, pursuant to Section 5, expressed a
desire to sell Co-Sale Shares in the transaction (a "Participating Purchaser"),
shall be entitled to do so pursuant to this Section. The Company shall promptly,
on expiration of the Option Period, notify the Purchasers of the aggregate
number of Co-Sale Shares the Participating Purchasers wish to sell. The Initial
Selling Stockholder shall use its best efforts to interest the Offeror in
purchasing, in addition to the Offered Shares, the Co-Sale Shares the
Participating Purchasers wish to sell. If the Offeror does not wish to purchase
all of the Co-Sale Shares made available by the Initial Selling Stockholder and
the Participating Purchasers, then each Participating Purchaser and the Initial
Selling Stockholder shall be entitled to sell, at the same price and on the same
terms and conditions set forth in the Notice (or in the case of a Purchaser
offering Co-Sale Shares that are shares of Preferred Stock of the Company when
the Initiating Selling Stockholder offers shares of Common Stock, then such
terms and conditions as would result if such offered Co-Sale Shares were deemed
to have been converted into Common Stock), a portion of the Shares being sold to
the Offeror, in the same proportion as the Initial Selling Stockholder's or
Participating Purchaser's ownership of Co-Sale Shares (or if either BayCorp or
Equiva is the Initiating Selling Stockholder, ownership of Shares owned by such
party and Co-Sale Shares owned by Participating Purchasers) bears to the
aggregate number of Co-Sale Shares owned by the Initial Selling Stockholder and
the Participating Purchasers (or if either BayCorp or Equiva is the Initiating
Selling Stockholder, the aggregate number of Shares owned by such party and
Co-Sale Shares owned by the Participating Purchasers). The transaction
contemplated by the Notice shall be consummated not later than 60 days after the
expiration of the Option Period.
6.2. If the Participating Purchasers do not elect to sell the full
number of Co-Sale Shares which they are entitled to sell pursuant to Section
6.1, the Initial Selling Stockholder shall be entitled to sell to the Offeror,
according to the terms set forth in the Notice, that number of its own Co-Sale
Shares (or Shares, if the Initiating Selling
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Stockholder is BayCorp or Equiva) which equals the difference between the number
of Shares desired to be purchased by the Offeror and the number of Co-Sale
Shares the Participating Purchasers are entitled to sell pursuant to Section
6.1. If the Initial Selling Stockholder wishes to Transfer any such Shares at a
price per share which differs from that set forth in the Notice, upon terms
different from those previously offered to the Company and the Stockholders, to
a transferee other than the Offeror, or more than 60 days after the expiration
of the Option Period, then, as a condition precedent to such transaction, such
Shares shall again be subject to the restrictions set forth in this Agreement.
6.3. Without implying that unauthorized Transfers are permissible
hereunder, the proceeds of any Transfers made by the Initial Selling Stockholder
without compliance with the provisions of this Section 6 shall be deemed to be
held in constructive trust in such amount as would have been due the
Participating Purchasers if the Initial Selling Stockholder had complied with
this Agreement.
7. ADDITIONAL TRANSFER RESTRICTIONS.
7.1. Notwithstanding any provision in this Agreement to the contrary,
no Transfer of any Shares other than pursuant to Section 2.3 may be made (i)
unless the transferor provides, if required by the Company, evidence and
assurances satisfactory to the Company in its reasonable discretion (which may
include an opinion of counsel and/or appropriate representations and warranties
from the transferor and transferee), that such Transfer is made in compliance
with all applicable securities laws and regulations promulgated thereunder and
(ii) unless the transferee executes and delivers a written instrument
acknowledging the receipt of a copy of the provisions and restrictions contained
in this Agreement agreeing to comply herewith and be bound hereby.
7.2. Any transferee of Shares, by reason of such transfer, shall
become a party to and be bound by this Agreement, as the same may be amended
form time to time, and if and when a transferee becomes the owner of any Shares,
this Agreement shall be amended by the Stockholders in any reasonable manner
required to continue to provide the rights and protections contemplated herein
in substantially the same manner in which such rights and protections were
provided prior to such transferee becoming an owner of Shares. Any transferee of
Shares shall have all of the rights and obligations under this Agreement of the
Stockholder that transferred Shares to that transferee.
8. TERMINATION OF AGREEMENT.
8.1. This Agreement shall terminate upon the earliest of the following
events:
(a) The sale of all or substantially all of the assets or
business of the Company, by merger, sale of assets or otherwise (except a merger
or consolidation in which the holders of capital stock of the Company
immediately prior to such merger or consolidation continue to hold immediately
following such merger or consolidation at least a majority of the voting power
of the capital stock of the surviving corporation);
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(b) The closing of the Company's initial firm commitment
underwritten public offering of shares of Common Stock pursuant to an effective
registration statement under the Securities Act of 1933, as amended, resulting
in at least $25,000,000 of gross proceeds to the Company at a price to the
public of at least $9.50 per share (subject to appropriate adjustment for stock
splits, stock dividends, recapitalizations and other similar events); or
(c) such time as less than 25% of the aggregate of all
originally issued shares of Series A Preferred Stock are outstanding (such
number to be proportionately adjusted in the event of any stock splits, stock
dividends, recapitalizations or similar events occurring on or after February 1,
2000).
8.2. The provisions of Sections 3, 4, 5, 6 and 7 hereof shall not
apply to any sale of Shares pursuant to a transaction referred to in Sections
8.1(a) or 8.1(b) above.
9. TRANSFERS OF RIGHTS. Subject to Section 8 hereof, this Agreement, and
the rights and obligations of each Stockholder hereunder, may be assigned by
such Stockholder to any person or entity to which Shares are transferred by such
Stockholder, and such transferee shall be deemed a "Stockholder" for purposes of
this Agreement.
10. GENERAL.
10.1. SEVERABILITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
10.2. SPECIFIC PERFORMANCE. In addition to any and all other remedies
that may be available at law in the event of any breach of this Agreement, each
Stockholder shall be entitled to specific performance of the agreements and
obligations of the Company and each other Stockholder hereunder and to such
other injunctive or other equitable relief as may be granted by a court of
competent jurisdiction.
10.3. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Delaware (without reference
to the conflicts of law provisions thereof).
10.4. NOTICES. All notices, requests, consents and other
communications under this Agreement shall be in writing and shall be deemed
delivered (i) three business days after being sent by certified mail, return
receipt requested, postage prepaid or (ii) one business day after being sent via
a reputable nationwide overnight courier service guaranteeing next business day
delivery, in each case to the intended recipient at his or its address as set
forth in the Series A Preferred Stock Purchase Agreement.
Any party may give any notice, request, consent or other communication
under this Agreement using any other means (including, without limitation,
personal delivery, messenger service, telecopy, first class mail or electronic
mail), but no such notice, request, consent or other communication shall be
deemed to have been duly given unless and until it is actually received by the
party for whom it is intended. Any party may
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change the address to which notices, requests, consents or other communications
hereunder are to be delivered by giving the other parties notice in the manner
set forth in this Section.
10.5. COMPLETE AGREEMENT. This Agreement, the Series A Purchase
Agreement, the Common Stock Purchase Agreement (with respect to Equiva and the
Company), the Investor Rights Agreement and the Stockholders' Voting Agreement,
each of even date herewith, constitute the entire agreement and understanding of
the parties hereto with respect to the subject matter hereof, and supersedes all
prior agreements and understandings relating to such subject matter.
10.6. AMENDMENTS. No amendment, modification or termination of, or
waiver (other than a waiver as to only the rights of the particular party
granting the waiver) under, any provision of this Agreement shall be valid
unless in writing and signed by Purchasers holding 75% of the voting power of
the Co-Sale Shares then held by all of the Purchasers (assuming the conversion
into Common Stock of all securities convertible thereinto); provided that:
(a) the consent of the Company or BayCorp, as applicable, shall
be required to effect any amendment, modification or termination of, or waiver
under, any provision of this Agreement that adversely affects such party's
rights or obligations set forth in this Agreement (it being agreed that adding
Purchasers pursuant to Section 10.6(b) does not adversely affect such party's
rights or obligations set forth in this Agreement);
(b) any amendment, modification or termination, or waiver under,
this Agreement that grants to subsequent purchasers of the Company's capital
stock, or options to purchase such capital stock or securities convertible into
such capital stock, rights under this Agreement (subject to obligations that are
substantially equivalent to those of the Purchasers under this Agreement) on a
pro rata basis with the Purchasers only shall require the written consent of
Purchasers holding a majority of the voting power of the Co-Sale Shares then
held by all of the Purchasers (assuming the conversion into Common Stock of all
securities convertible thereinto);
(c) any amendment, modification or waiver (other than a waiver
as to only the rights of the particular party granting the waiver) under this
Agreement that is not executed by all Purchasers shall affect all Purchasers in
the same fashion;
(d) subsequent purchasers of the Company's capital stock, or
options to purchase such capital stock or securities convertible into such
capital stock, specified in Section 10.6(b) shall constitute "Purchasers" for
purposes of this Agreement and the securities of the Company owned by such
purchasers shall constitute "Shares" and "Co-Sale Shares" for purposes of this
Agreement; and
(e) any amendment, modification or termination effected in
accordance with this Section 10.6 shall be binding upon all parties hereto.
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10.7. PRONOUNS. Whenever the context may require, any pronouns used in
this Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular form of nouns and pronouns shall include the plural, and
vice versa.
10.8. COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original, and all of which together shall constitute one and the same document.
This Agreement may be executed by facsimile signatures.
10.9. SECTION HEADINGS. The section headings are for the convenience
of the parties and in no way alter, modify, amend, limit or restrict the
contractual obligations of the parties.
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IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto
as of the day and year first above written.
[Use common/shared signature block file]
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EXHIBIT A
PURCHASERS
1. Omega Advisors, Inc.
2. Xxxxxxx Associates, L.P.
3. Equiva Trading Company
4. Xxxxxxxxx.xxx, Inc.
5. Xxxxxxx X. Xxxxxxxxxx
6. Xxxxxxx XxXxxxxx
7. Xxxxx X. Xxxxxx
8. Sapient Corporation
9. Xxxxxxxx Energy Marketing & Trading Company
10. Xxxxx X. Xxxxxx
A-1
