STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement"), is made as of April 9,
2002 between RATEXCHANGE CORPORATION, a Delaware corporation ("Seller"), BL
PARTNERS LLC, a California limited liability company ("Purchaser") and RMG
PARTNERS CORPORATION, a Delaware corporation ("RMGP"), under the following
circumstances:
A. Seller is the beneficial and record owner of One Hundred (100) shares of
Common Stock of RMGP (the "RMGP Shares").
B. Pursuant to that certain Agreement dated as of April 8, 2001 between Seller
and Purchaser (the "Option Agreement"), (1) RMGP was capitalized with $300,000
in cash and Two Million Two Hundred Thousand (2,200,000) shares of Common Stock
issued by Seller (the "RTX Capital Shares") and (2) Purchaser was granted an
option to purchase all of Seller's interest in RMGP, including the RMGP Shares
(the "RMGP Purchase Option").
C. Under Section 1 of the Option Agreement and Article IX of the RMGP bylaws,
the RMGP Purchase Option does not extend to the RTX Capital Shares which are not
"Controlled Shares", as defined in the RMGP bylaws.
D. Pursuant to a letter addressed to Seller dated February 19, 2002, Purchaser
has given notice of its intent to exercise the RMGP Purchase Option.
E. Schedule 1 attached hereto sets forth the determination of the Controlled
Shares as of the date of this Agreement in accordance with the Option Agreement
and the RMGP bylaws. The parties have agreed that in accordance with the Option
Agreement and Article IX of the RMGP bylaws, immediately before the transfer of
the RMGP Shares to Purchaser pursuant to the RMGP Purchase Option, RMGP shall
transfer to Seller 1,050,124 shares of Common Stock of Seller, constituting the
RTX Capital Shares which are not Controlled Shares (the "Unvested RTX Shares").
F. The parties wish to confirm their agreement with respect to the purchase and
sale of the RMGP Shares, the transfer of the Unvested RTX Shares, and certain
related matters.
NOW, THEREFORE, the parties hereto agree as follows:
1. Transfer of Unvested RTX Shares.
(a) Transfer of Shares. Upon the execution and delivery of this
Agreement, RMGP shall transfer the Unvested RTX Shares to Seller, by delivering
to Seller stock certificate(s) representing the Unvested RTX Shares, duly
endorsed for transfer to Seller or accompanied by an executed stock assignment
separate from certificate.
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(b) Certificate For Controlled Shares. To the extent that the stock
certificate(s) described in Section 1(a) immediately above represent RTX Capital
Shares in excess of the Unvested RTX Shares, Seller shall upon receipt of such
stock certificate(s) and the stock assignment described in Section 1(a) above
deliver to RMGP a stock certificate representing such RTX Capital Shares in
excess of the Unvested RTX Shares.
2. Section 83. The fair market value of the RMGP Shares is $472,481,
including the fair market value of the Controlled Shares, which is $172,481. For
purposes of Internal Revenue Code Section 83, the bargain element is $172,481,
which Seller shall claim as a deduction and Purchaser shall include as income.
Schedule 2 attached hereto sets forth true and correct copies of the balance
sheet of RMGP as of the date of this Agreement, and the income statement of RMGP
for the period from January 1, 2002 to April 8, 2002. Such financial statements
have been prepared in accordance with generally accepted accounting principles,
and fairly present the financial position of RMGP as of the date of this
Agreement, and the results of its operations for the period from January 1, 2002
to April 8, 2002.
3. Registration Rights.
(a) Registration. Seller shall register with the SEC the RTX Capital
Shares via piggyback registration upon the next registration of RateXchange
securities following the date hereof.
(b) Expenses. All expenses other than underwriting discounts and
commissions incurred in connection with registrations, filings or qualifications
pursuant to this Section 3, including without limitation, all registration,
filing and qualification fees, printers' and accounting fees, and fees and
disbursements of counsel for Seller shall be borne by Seller.
(c) Seller's Obligations. Whenever Seller is required under this
Section 3 to register any of the Controlled Shares, Seller shall, as
expeditiously as reasonably possible:
(i) prepare and file with the Securities and Exchange Commission
(the "SEC") a registration statement with respect to such Controlled Shares and
cause such registration statement to become effective, and, upon the request of
Purchaser, keep such registration statement effective for a period of up to one
hundred twenty (120) successive days or, if earlier, until the distribution
contemplated in such registration statement has been completed;
(ii) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act of 1933 (the "Act") with respect to the
disposition of all securities covered by such registration statement;
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(iii) furnish to Purchaser such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably request
in order to facilitate the disposition of the Controlled Shares;
(iv) register and qualify the Controlled Shares under such other
securities or Blue Sky laws of such jurisdictions as shall be requested by
Purchaser;
(v) in the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering;
(vi) notify Purchaser at any time when a prospectus relating
thereto is required to be delivered under the Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing;
(vii) cause all of the Controlled Shares registered pursuant to
this Section 3 to be listed on each securities exchange on which similar
securities issued by Seller are then listed; and
(viii) provide a transfer agent and registrar for all Controlled
Shares registered pursuant hereunder and a CUSIP number for all such Controlled
Shares, in each case not later than the effective date of such registration.
(d) Indemnification. If any Controlled Shares are included in a
registration statement pursuant to this Section 3, then to the extent permitted
by law, Seller will indemnify and hold harmless Purchaser, the officers,
directors and members of Purchaser, legal counsel and accountants for Purchaser,
any underwriter (as defined in the Act) for Purchaser, and each person, if any,
who controls Purchaser or underwriter within the meaning of the Act or the
Securities Exchange Act of 1934 (the "1934 Act"), against any losses, claims,
damages or liabilities (joint or several) to which they may become subject under
the Act, the 1934 Act or any state securities laws, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereof) arise out of or
are based upon any of the following statements, omissions or violations: (i) any
untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto, (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not misleading, or
(iii) any violation or alleged violation by Seller of the Act, the 1934 Act, any
state securities laws or any rule or regulation promulgated under the Act, the
1934 Act or any state securities laws; and Seller will reimburse Purchaser and
each such officer, director, member, underwriter or controlling person for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action.
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(e) Assignment. The rights to cause Seller to register the Controlled
Shares pursuant to this Section 3 may be assigned to one or more transferees or
assignees of the Controlled Shares.
4. Purchase and Sale of the RMGP Shares.
(a) Transfer. Upon the terms and subject to the conditions herein set
forth, Seller hereby sells and delivers the RMGP Shares to Purchaser, and
Purchaser hereby purchases the RMGP Shares from Seller, for a purchase price of
Three Thousand Dollars ($3,000.00) per share, or a total purchase price of Three
Hundred Thousand Dollars ($300,000.00) (the "Purchase Price"), free and clear of
all liens, claims, pledges, charges, restrictions and encumbrances of any nature
whatsoever. The closing of the sale and purchase of the RMGP Shares contemplated
hereby shall take place upon the execution and delivery of this Agreement.
(b) Stock Certificates. Upon the execution and delivery of this
Agreement, Seller shall deliver to Purchaser the certificate or certificates for
the RMGP Shares, duly endorsed for transfer to Purchaser or accompanied by an
executed Stock Assignment Separate From Certificate with respect to such
certificate(s).
(c) Purchase Price. Upon the execution and delivery of this Agreement,
Purchaser shall deliver to Seller a cashier's check payable to Seller in the
amount of the Purchase Price.
(d) Corporate Records. Upon the execution and delivery of this
Agreement, Seller shall deliver to Purchaser the minute book, stock book, stock
ledger, corporate seal, and other corporate books and records of RMGP.
(e) Resignation and Release. Upon the execution and delivery of this
Agreement, Seller shall deliver the written resignation of D. Xxxxxxxx Xxxxxxxx
as director of RMGP.
5. Representations and Warranties of Seller. Seller represents and warrants
to Purchaser as follows:
(a) Title to RMGP Shares. Seller is the owner, beneficially and of
record, of all of the RMGP Shares, which represent all of the outstanding shares
of capital stock of RMGP. Seller owns all of the RMGP Shares free and clear of
all liens, encumbrances, security agreements, options, claims, charges and
restrictions. Seller has full power and authority to transfer the RMGP Shares to
Purchaser without the consent of any other person. Upon delivery of the RMGP
shares to Purchaser pursuant to this Agreement, Purchaser will receive good and
marketable title thereto, free and clear of all liens, claims, encumbrances and
equities whatsoever. Following such transfer, Seller will not own any further
interest in or to the stock or other securities of RMGP.
(b) No Conflict. The execution of this Agreement and the consummation
of the transactions contemplated hereby will not result in the breach of any
term or
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provision of, or constitute a default under, any contract, agreement,
instrument, understanding, judgment or decree to which Seller is a party or by
which Seller is bound.
(c) No Undisclosed Liabilities. Seller has incurred no liabilities or
obligations for which RMGP may be obligated and which are attributable to acts
and/or actions by Seller except as disclosed to and approved by Purchaser.
(d) Status of RMGP Shares. The RMGP Shares are duly and validly issued
by RMGP, and are fully paid and non-assessable.
(e) No Other Interest. The RMGP Shares represent the entire interest
of Seller in RMGP, and RMGP does not owe any debt, liability or obligation to
Seller or any officer, director, subsidiary, or affiliate of Seller.
(f) No Misstatements. No representation or warrant by Seller contained
in this Agreement and no document or certificate furnished or to be furnished to
Purchaser by Seller in connection herewith, or with the transactions
contemplated hereby, contains an untrue statement of material fact, or omits to
state a material fact necessary to make the statements of fact contained herein
or therein not misleading.
6. Representations, Warranties and Agreements of Purchaser. Purchaser
represents and warrants to and agrees with Seller as follows:
(a) Authority. Purchaser has the full right, power and authority to
enter into and perform its obligations under this Agreement and to acquire the
RMGP Shares, and this Agreement has been duly authorized, executed and delivered
by Purchaser and constitutes the valid and binding obligation of Purchaser,
enforceable against it in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws affecting creditors' rights generally and by
general equitable principles.
(b) Restricted Securities. Purchaser understands and acknowledges that
(i) the RMGP Shares are restricted securities (as defined under Securities and
Exchange Commission Rule 144) and may not be offered, sold or otherwise
transferred unless and until registered under the Securities Act or pursuant to
an exemption from the registration requirements thereof and (ii) the
certificates representing the RMGP Shares will bear a legend substantially in
the following form:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR
APPLICABLE STATE SECURITIES LAWS AND MAY NOT
BE OFFERED FOR SALE, SOLD, PLEDGED, ASSIGNED
OR OTHERWISE DISPOSED OF, AND NO TRANSFER OF
THE SECURITIES MAY BE EFFECTED BY THE COMPANY
OR ITS TRANSFER AGENT, IN THE ABSENCE OF SUCH
REGISTRATION OR ANY EXEMPTION THEREFROM.
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7. Termination of Agreements. Effective as of the date of this Agreement,
all agreements and understandings between Seller, on the one hand, and Purchaser
and/or RMGP, on the other hand, whether oral or written (other than this
Agreement), are hereby terminated, including without limitation all revenue
sharing, expense sharing, and consulting agreements.
8. Indemnification.
(a) By Seller. Seller shall indemnify Purchaser and its affiliates and
subsidiaries, and each of their respective directors, officers, employees,
members and agents (each a "Purchaser Indemnified Person") and hold each of them
harmless from and in respect of any and all losses, damages, liabilities,
reasonable expenses (including, without limitation, expenses of investigation
and defense and fees and disbursements of counsel), claims, liens or other
obligations of any nature whatsoever, including the cost of enforcing this
provision (collectively, "Losses"), that may be incurred by any Purchaser
Indemnified Person directly or indirectly by virtue of or resulting from the
inaccuracy of any representation or the breach of any warranty, covenant or
agreement made by Seller in this Agreement or in any certificate, document or
instrument delivered by Seller to Purchaser in connection with this Agreement.
(b) By Purchaser. Purchaser shall indemnify Seller and each of its
agents (each a "Seller Indemnified Person") and hold each of them harmless from
and in respect of any and all Losses that may be incurred by any Seller
Indemnified Person directly or indirectly by virtue of or resulting from the
inaccuracy of any representation or the breach of any warranty, covenant or
agreement made by Purchaser in this Agreement or in any certificate, document or
instrument delivered by Purchaser to Seller (or to any agent or representative
of Seller) in connection with this Agreement.
9. Closing. The execution and delivery of this Agreement and the
consummation of the transactions contemplated by this Agreement shall occur at
the offices of Purchaser at 2 p.m. on the date of this Agreement.
10. Submission to Jurisdiction; Service of Process; Governing Law.
(a) Jurisdiction and Venue. The parties to this Agreement hereby
irrevocably submit to the jurisdiction of any Federal or State court located in
the City and County of San Francisco, California over any suit, action or
proceeding arising out of or relating to this Agreement. The parties hereby
irrevocably waive, to the fullest extent permitted by applicable law, any
objection which they may now or hereafter have to the laying of venue of any
such suit, action or proceeding brought in such court.
(b) Service of Process. Service of process may be made in any manner
permitted by law.
(c) Governing Law. This Agreement and the transactions described
herein shall be governed by and construed in accordance with the laws of the
State of California, without regard to choice-of-law provisions.
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11. Notices. All notices, requests, demands and other communications
required or permitted under this Agreement shall be in writing and shall be
deemed to have been duly given, made and received only when delivered
(personally, by facsimile, by courier service or by other messenger) or when
deposited in the United States mails, registered or certified, postage prepaid,
return receipt requested, addressed as set forth below:
If to Purchaser:
BL Partners, LLC
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxx, Ph.D., Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Seller:
RateXchange Corporation
000 Xxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxx Xxxxxxxx and Xxxxxxxxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
12. Miscellaneous.
(a) Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective heirs,
personal representatives, successors and assigns.
(b) Severability. If any part of this Agreement is held to be
unenforceable or invalid under, or in conflict with, the applicable law of any
jurisdiction, the unenforceable, invalid or conflicting part shall, to the
extent permitted by applicable law, be narrowed or replaced, to the extent
possible, with a judicial construction in such jurisdiction that effects the
intent of the parties regarding this Agreement and such unenforceable, invalid
or conflicting part. To the extent permitted by applicable law, notwithstanding
the unenforceability, invalidity or conflict with applicable law or any part of
this Agreement, the remaining parts shall be valid, enforceable and binding on
the parties.
(c) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which shall together
constitute one and the same instrument. This Agreement shall become binding when
one or more counterparts hereof,
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individually or taken together, shall bear the signatures of all of the parties
reflected hereon as the signatories.
(d) Entire Agreement. This Agreement contains the entire understanding
between the parties hereto with respect to the subject matter hereof, and
supersedes all prior and contemporaneous agreements and understandings,
inducements or conditions, express or implied, oral or written, except as herein
contained, except that the Option Agreement shall stand alone and not be
modified by this Agreement. This Agreement may not be modified or amended other
than by an agreement in writing.
(e) Further Assurances. If, at any time after the execution and
delivery of this Agreement, Purchaser shall consider or be advised that any
assignments, assurances or any other similar actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in Purchaser its
rights, title or interest in, to or under any of the Shares, Seller shall take
such actions as may be reasonably necessary or desirable to vest in Purchaser
and to perfect or confirm in respect of Purchaser any and all right, title and
interest in, to and under such Shares.
(f) Expenses. Seller and Purchaser shall pay their own expenses,
including the fees and expenses of their respective counsel (if any) incurred by
them in connection with the sale and delivery of the Shares and the execution,
delivery and performance of this Agreement.
(g) Reliance On and Survival of Representations and Warranties.
Notwithstanding any investigation at any time conducted by any of the parties
hereto, each of the parties hereto shall be entitled to rely on the
representation and warranties of the other party set forth herein. All
representations and warranties set forth in this Agreement shall survive the
execution and delivery of this Agreement.
(h) Headings. The headings of the paragraphs of this Agreement are
included for purposes of convenience only, and shall not affect the construction
or interpretation of any of its provisions.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
RATEXCHANGE CORPORATION BL PARTNERS LLC
a Delaware corporation a California limited liability company
By: __________________________ By: RMG Holdings Corporation
a California corporation
Its Manger
Title: _______________________
By: ____________________________
Xxxxxx Xxxxxxxx, President
RMG PARTNERS CORPORATION
a Delaware corporation
By: ____________________________
Xxxx Xxxxxx, Secretary
By: __________________________
Title: _______________________
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LIST OF SCHEDULES
Schedule Description
-------- -----------
1 Determination of Controlled Shares
2 Financial Statements of RMGP
TRANSFER OF
RMG PARTNERS CORPORATION
TO
BL PARTNERS, LLC
CLOSING LIST
No. Agreement Description
--- Section -----------
-------
1 1(a) Certificate for Unvested RTX Shares and Stock Assignment
2 1(b) Certificate for the Controlled Shares
3 4(b) Certificate for RMGP Shares and Stock Assignment
4 4(c) Cashier's check for $300,000
5 4(d) Minute book, stock book, stock ledger, corporate seal
and other corporate books and records of RMGP
6 4(e) Resignation of D. Xxxxxxxx Xxxxxxxx
