1
EXHIBIT 10.6
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STOCK PURCHASE AGREEMENT
among:
ENERGY AUCTION EXCHANGE, INC.,
a Delaware corporation;
and
XXXXXXX X. XXXXX, XX.
XXXXX X. XXXX
XXXXX X. XXXX
XXXXX X. XXXX
XXXXXXXXX XXXX XXXXXX
XXXXX X. XXXX
XXXXXX X. XXXXXXXXX, XX.
R.E. XXXXXXXXX
XXXXXXX X. X'XXXXXXXXXXX
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Dated as of December 30, 1999
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TABLE OF CONTENTS
PAGE
SECTION 1. SALE AND PURCHASE OF SHARES; RELATED TRANSACTIONS....................1
1.1 Sale and Purchase of Shares..........................................1
1.2 Purchase Price.......................................................1
1.3 Closing..............................................................2
1.4 Exchange of Certificates.............................................2
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDERS...........2
2.1 Execution, Delivery and Performance of Agreement; Authority..........3
2.2 Noncontravention.....................................................3
2.3 Brokers' Fees........................................................3
2.4 Company Shares.......................................................3
2.5 Investment Representations...........................................4
(a) Selling Shareholder Bears Economic Risk.....................4
(b) Acquisition for Own Account.................................4
(c) Selling Shareholder Can Protect Its Interest................4
(d) Accredited Investor.........................................4
(e) Rule 144....................................................4
(f) Residence...................................................5
2.6 Transfer Restrictions................................................5
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER......................5
3.1 Due Organization.....................................................5
3.2 Execution, Delivery and Performance of Agreement; Authority..........5
3.3 Capitalization.......................................................5
3.4 Purchaser's Series B Stock...........................................5
3.5 Noncontravention.....................................................6
SECTION 4. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASER.................6
4.1 Accuracy of Representations..........................................6
4.2 Performance of Covenants.............................................6
4.3 Consents.............................................................6
4.4 Agreements and Documents.............................................6
i.
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TABLE OF CONTENTS
(CONTINUED)
PAGE
4.5 Securities Law Compliance............................................6
4.6 No Restraints........................................................7
4.7 No Proceedings.......................................................7
4.8 Corporate Approvals..................................................7
SECTION 5. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLING SHAREHOLDERS......7
5.1 Accuracy of Representations..........................................7
5.2 Performance of Covenants.............................................7
5.3 Agreements and Documents.............................................7
5.4 No Restraints........................................................8
5.5 Corporate Approvals..................................................8
SECTION 6. INDEMNIFICATION, ETC.................................................8
6.1 Survival of Representations, Etc.....................................8
6.2 Indemnification by Selling Shareholders..............................8
6.3 Indemnification by the Purchaser.....................................9
SECTION 7. MISCELLANEOUS PROVISIONS.............................................9
7.1 Further Assurances...................................................9
7.2 Fees and Expenses....................................................9
7.3 Attorneys' Fees......................................................9
7.4 Notices.............................................................10
7.5 Confidentiality.....................................................10
7.6 Headings............................................................11
7.7 Counterparts........................................................11
7.8 Governing Law.......................................................11
7.9 Successors and Assigns..............................................11
7.10 Remedies Cumulative; Specific Performance...........................11
7.11 Amendments and Waiver...............................................11
7.12 Severability........................................................11
7.13 Parties in Interest.................................................12
7.14 Entire Agreement....................................................12
7.15 Construction........................................................12
ii.
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EXHIBITS
Exhibit A - Allocation of Purchase Price and Issuance Instructions
Exhibit B - Second Amended and Restated Investors Rights Agreement
Exhibit C - Amended and Restated Certificate of Incorporation of Purchaser
iii.
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("AGREEMENT") is made and entered into as
of December 30, 1999, by and among ENERGY AUCTION EXCHANGE, INC., a Delaware
corporation (the "PURCHASER"), and the following shareholders of The Petroleum
Clearinghouse, Inc. (the "COMPANY"): Xxxxxxx X. Xxxxx, Xx., Xxxxx X. Xxxx, Xxxxx
X. Xxxx, Xxxxx X. Xxxx, Xxxxxxxxx Xxxx Xxxxxx, Xxxxx X. Xxxx, Xxxxxx X.
Xxxxxxxxx, Xx., R.E. Xxxxxxxxx and Xxxxxxx X. X'Xxxxxxxxxxx (collectively the
"SELLING SHAREHOLDERS", and each a "SELLING SHAREHOLDER").
RECITALS
A. The Selling Shareholders own an aggregate of four thousand
(4,000) shares of Common Stock (collectively, the "SHARES") of the Company,
which constitute all of the issued and outstanding capital stock and options,
warrants or other rights to purchase capital stock of the Company other than the
shares of Common Stock acquired by the Purchaser pursuant to that certain Stock
Purchase Agreement, dated June 1, 1999, among the Purchaser, the Company and the
Selling Shareholders (the "PRIOR PURCHASE AGREEMENT").
B. On August 4, 1999, the Selling Shareholders and the Purchaser
reached an agreement regarding the number of shares of Series B Stock that would
be issued in exchange for the Shares.
C. The Selling Shareholders wish to sell the Shares to the Purchaser
on the terms set forth in this Agreement (the "ACQUISITION") and in accordance
with the terms of the agreement reached on August 4, 1999 and that certain
Shareholders Agreement, dated June 1, 1999, among the Purchaser, the Company and
the Selling Shareholders (the "SHAREHOLDERS AGREEMENT").
AGREEMENT
The parties to this Agreement agree as follows:
SECTION 1. SALE AND PURCHASE OF SHARES; RELATED TRANSACTIONS
1.1 SALE AND PURCHASE OF SHARES. At the Closing (as hereinafter
defined), the Selling Shareholders shall sell, assign, transfer and deliver the
Shares to the Purchaser, and the Purchaser shall purchase the Shares from the
Selling Shareholders on the terms and subject to the conditions set forth in
this Agreement.
1.2 PURCHASE PRICE. Subject to Section 1.4, at the Closing, by virtue
of the Acquisition and without any further action on the part of the Purchaser
or the Selling Shareholders, the Shares are converted into the right to receive
an aggregate of four hundred fifty-five thousand one hundred twenty (455,120)
shares of Series B Preferred Stock of Purchaser (the "SERIES B STOCK") which are
convertible into shares of the Purchaser's common stock (the "CONVERSION
SHARES"), in accordance with the amounts set forth on Exhibit A hereto. The
Series B Stock to be issued pursuant to this Section 1.2(a) shall be referred to
as the "PURCHASE PRICE."
1.
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1.3 CLOSING.
(a) The closing of the sale of the Shares to the Purchaser (the
"CLOSING") shall take place at the offices of Xxxxxx Godward LLP, 0000 Xxxxxx
Xxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000 on December 30, 1999 or at such
other place or time as the parties may agree (the "CLOSING DATE").
(b) At the Closing, the parties shall have executed and delivered
each of the agreements required to be executed and delivered pursuant to
Sections 4.4 and 5.3.
1.4 EXCHANGE OF CERTIFICATES.
(a) At the Closing, the Selling Shareholders will deliver to the
Purchaser stock certificates representing the Shares, endorsed in blank or
accompanied by duly executed assignment documents and the buyer will deliver
certificates representing shares of Series B Stock in the names and amounts set
forth on Exhibit A.
(b) The shares of Series B Stock to be issued in the Acquisition
shall be characterized as "restricted securities" for purposes of Rule 144 under
the Securities Act, and each certificate representing any of such shares shall
bear a legend identical or similar in effect to the following legend (together
with any other legend or legends required by applicable state securities laws or
otherwise):
First Legend:
"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") AND MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR UNLESS
THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO
THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT
REQUIRED."
Second Legend:
"THE SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED EXCEPT
IN COMPLIANCE WITH THE SECOND AMENDED AND RESTATED INVESTORS'
RIGHTS AGREEMENT, DATED DECEMBER 30, 1999, COPIES OF WHICH ARE ON
FILE AT THE OFFICE OF THE ISSUER."
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDERS
Each of the Selling Shareholders severally represents and warrants to
the Purchaser that the statements contained in this Section 2 are true and
correct as of the date of this Agreement with respect to himself or herself.
2.
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2.1 EXECUTION, DELIVERY AND PERFORMANCE OF AGREEMENT; AUTHORITY. The
Selling Shareholder has the full legal right, power and authority to enter into
this Agreement and the related agreements referred to herein to which it is a
party and to carry out the transactions contemplated hereby. All proceedings
required to be taken by the Selling Shareholder to authorize the execution,
delivery and performance of this Agreement and the Second Amended and Restated
Investors' Rights Agreement, of even date herewith (the "RIGHTS AGREEMENT") to
which it is a party have been properly taken. Each of this Agreement and the
Rights Agreement constitute valid and binding obligations of the Selling
Shareholder, enforceable against the Selling Shareholder in accordance with
their terms, subject to (i) laws of general application relating to bankruptcy,
insolvency and the relief of debtors and (ii) rules of law governing specific
performance, injunctive relief and other equitable remedies. The Selling
Shareholder need not give any notice to, make any filing with, or obtain any
authorization, consent or approval of any government or governmental agency,
including, without limitation, the SEC, in order to consummate the transactions
contemplated by this Agreement, except for any required filings with the NASD.
2.2 NONCONTRAVENTION. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(a) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge or other restriction of any government,
governmental agency or court to which the Selling Shareholder is subject, (b)
conflict with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify
or cancel, or require any notice under any agreement, contract, lease, license,
instrument or other arrangement to which the Selling Shareholder is a party or
by which he or she is bound or to which any of his or her assets is subject, or
(c) result in a breach of any confidentiality, non-competition or similar
agreement to which the Selling Shareholder is a party.
2.3 BROKERS' FEES. The Selling Shareholder has no liability or
obligation to pay any fees or commissions to any broker, finder or agent with
respect to the transactions contemplated by this Agreement for which the
Purchaser could become liable or obligated.
2.4 COMPANY SHARES. The Selling Shareholder holds of record and owns
beneficially the number of Shares set forth next to his or her name in Exhibit
A, free and clear of any restrictions on transfer (other than any restrictions
under the Shareholders Agreement, the Securities Act and state securities laws),
taxes, security interests, options, warrants, purchase rights, contracts,
commitments, equities, claims and demands. The Selling Shareholder is not a
party to any option, warrant, purchase right or other contract or commitment
that could require the Selling Shareholder to sell, transfer or otherwise
dispose of any capital stock of the Company (other than the Shareholders
Agreement). The Selling Shareholder is not a party to any voting trust, proxy or
other agreement or understanding with respect to the voting of any capital stock
of the Company (other than the Shareholders Agreement). The Shares constitute
all of the issued and outstanding shares of capital stock of the Company and all
rights to acquire shares other than the shares of capital stock and rights to
acquire capital stock held by the Purchaser pursuant to the Prior Purchase
Agreement and the Shareholders Agreement and other than any shares issued or
rights to acquire shares that have occurred on or after June 1, 1999 and have
been approved by the Purchaser.
3.
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2.5 INVESTMENT REPRESENTATIONS. The Selling Shareholder understands
that neither the Series B Stock nor the Conversion Shares have been registered
under the Securities Act of 1933, as amended (the "SECURITIES ACT"). The Selling
Shareholder also understands that the shares of Series B Stock are being offered
and sold pursuant to an exemption from registration contained in the Securities
Act based in part upon the Selling Shareholder's representations contained in
the Agreement. Each Selling Shareholder hereby represents and warrants as
follows:
(a) SELLING SHAREHOLDER BEARS ECONOMIC RISK. The Selling
Shareholder has substantial experience in evaluating and investing in private
placement transactions of securities in companies similar to the Purchaser so
that it is capable of evaluating the merits and risks of its investment in the
Purchaser and has the capacity to protect its own interests. Selling Shareholder
must bear the economic risk of this investment indefinitely unless the shares of
Series B Stock (or the Conversion Shares) are registered pursuant to the
Securities Act, or an exemption from registration is available. The Selling
Shareholder understands that the Purchaser has no present intention of
registering the Series B Stock, the Conversion Shares or any shares of its
Common Stock. The Selling Shareholder also understands that there is no
assurance that any exemption from registration under the Securities Act will be
available and that, even if available, such exemption may not allow Selling
Shareholder to transfer all or any portion of the Series B Stock (or the
Conversion Shares) under the circumstances, in the amounts or at the times
Selling Shareholder might propose.
(b) ACQUISITION FOR OWN ACCOUNT. The Selling Shareholder is
acquiring the Series B Stock (or the Conversion Shares) for Selling
Shareholder's own account for investment only, and not with a view towards their
distribution.
(c) SELLING SHAREHOLDER CAN PROTECT ITS INTEREST. The Selling
Shareholder represents that by reason of its, or of its management's, business
or financial experience, the Selling Shareholder has the capacity to protect its
own interests in connection with the transactions contemplated in this
Agreement. Further, the Selling Shareholder is aware of no publication of any
advertisement in connection with the transactions contemplated in the Agreement.
(d) ACCREDITED INVESTOR. The Selling Shareholder represents that
it is an accredited investor within the meaning of Regulation D under the
Securities Act.
(e) RULE 144. The Selling Shareholder acknowledges and agrees
that the Series B Stock, and, if issued, the Conversion Shares must be held
indefinitely unless they are subsequently registered under the Securities Act or
an exemption from such registration is available. The Selling Shareholder has
been advised or is aware of the provisions of Rule 144 promulgated under the
Securities Act, which permits limited resale of shares purchased in a private
placement subject to the satisfaction of certain conditions, including, among
other things, the availability of certain current public information about the
Purchaser, the resale occurring following the required holding period under Rule
144 and the number of shares being sold during any three-month period not
exceeding specified limitations.
4.
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(f) RESIDENCE. The Selling Shareholder resides in the state or
province identified in the address of the Selling Shareholder set forth on
Exhibit A.
2.6 TRANSFER RESTRICTIONS. The Selling Shareholder acknowledges and
agrees that the Series B Stock and, if issued, the Conversion Shares are subject
to restrictions on transfer as set forth in the Second Amended and Restated
Investors' Rights Agreement of even date herewith (the "RIGHTS AGREEMENT").
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Selling Shareholders as
follows:
3.1 DUE ORGANIZATION. The Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all necessary power and authority to conduct its business in the manner
in which its business is currently being conducted and to own and use its assets
in the manner in which its assets are currently owned and used.
3.2 EXECUTION, DELIVERY AND PERFORMANCE OF AGREEMENT; AUTHORITY. The
Purchaser has the full legal right, power and authority to enter into this
Agreement and the related agreements referred to herein to which it is a party
and to carry out the transactions contemplated hereby. All proceedings required
to be taken by the Purchaser to authorize the execution, delivery and
performance of this Agreement and the Rights Agreement to which it is a party
have been properly taken. Each of this Agreement and the Rights Agreement to
which the Purchaser is a party constitute valid and binding obligations of the
Purchaser, enforceable against the Purchaser in accordance with their terms,
subject to (i) laws of general application relating to bankruptcy, insolvency
and the relief of debtors and (ii) rules of law governing specific performance,
injunctive relief and other equitable remedies.
3.3 CAPITALIZATION. The authorized capital stock of the Purchaser,
immediately prior to the closing, will consist of (a) fifteen million
(15,000,000) shares of Common Stock, five hundred thousand (500,000) of which
are issued and outstanding, five hundred thousand (500,000) of which are
reserved for issuance pursuant to the Purchaser's 1999 Equity Incentive Plan and
ten thousand (10,000) of which are reserved for issuance pursuant to outstanding
warrants and (b) three million (3,000,000) shares of Preferred Stock, 2,000,000
of which are designated Series A Preferred Stock, 1,906,137 of which are issued
and outstanding; and 500,000 of which are designated Series B Preferred Stock,
none of which are issued and outstanding.
3.4 PURCHASER'S SERIES B STOCK. The Purchaser's Series B Stock will,
upon delivery to the Selling Shareholders, be duly authorized, validly issued,
fully paid and nonassessable, with no personal liability attaching to the
ownership thereof (except as otherwise set forth herein), other than liabilities
imposed upon stockholders generally by the provisions of the Delaware General
Corporation Law and will not be subject to any other restrictions, except as may
be imposed by applicable law or as set forth in this Agreement, the Investors'
Rights Agreement or the Purchaser's Restated Certificate of Incorporation.
5.
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3.5 NONCONTRAVENTION. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(a) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge or other restriction of any government,
governmental agency or court to which the Purchaser is subject, (b) conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify
or cancel, or require any notice under any agreement, contract, lease, license,
instrument or other arrangement to which the Purchaser is a party or by which he
or she is bound or to which any of his or her assets is subject, or (c) result
in a breach of any confidentiality, non-competition or similar agreement to
which the Purchaser is a party.
3.6 BROKERS FEES. The Purchaser has no liability or obligation to pay
any fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement for which the Purchaser could become
liable or obligated.
SECTION 4. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASER
The obligation of the Purchaser to effect the transactions contemplated
hereby are subject to the satisfaction, at or prior to the Closing, of each of
the following conditions (any of which may be waived by the Purchaser, in whole
or in part, in accordance with Section 7.12):
4.1 ACCURACY OF REPRESENTATIONS. Each of the representations and
warranties made by the Selling Shareholders in this Agreement shall have been
accurate in all material respects as of the Closing Date.
4.2 PERFORMANCE OF COVENANTS. Each covenant or obligation that any of
the Selling Shareholders is required to comply with or to perform at or prior to
the Closing shall have been complied with and performed in all material
respects.
4.3 CONSENTS. All consents required to be obtained in connection with
the this Agreement and the Rights Agreement shall have been obtained and shall
be in full force and effect.
4.4 AGREEMENTS AND DOCUMENTS. The Purchaser shall have received the
following agreements and documents, each of which shall be in full force and
effect:
(a) the Rights Agreement, substantially in the form of Exhibit B;
and
(b) such other documents as the Purchaser may reasonably request
in good faith for the purpose of (i) evidencing the accuracy of any
representation or warranty made by the Selling Shareholders, (ii) evidencing the
compliance by the Selling Shareholders with, or the performance by the Selling
Shareholders of, any covenant or obligation set forth in this Agreement, (iii)
evidencing the compliance with any applicable federal or state securities law,
(iv) evidencing the satisfaction of any condition set forth in this Section 4 or
(iv) otherwise facilitating the consummation or performance of any of the
transactions contemplated hereby.
4.5 SECURITIES LAW COMPLIANCE. All applicable requirements of the
Securities Act and any applicable state securities laws shall have been
satisfied.
6.
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4.6 NO RESTRAINTS. No temporary restraining order, preliminary or
permanent injunction or other order preventing the consummation of the
Acquisition shall have been issued by any court of competent jurisdiction and
remain in effect, and there shall not be any Legal Requirement enacted or deemed
applicable to the Acquisition that makes consummation of the Acquisition
illegal.
4.7 NO PROCEEDINGS. No person shall have commenced or threatened to
commence any proceeding challenging or seeking the recovery of a material amount
of damages in connection with the Acquisition or seeking to prohibit or limit
the exercise by the Purchaser of any material right pertaining to its ownership
of the Shares.
4.8 CORPORATE APPROVALS. This Agreement and the Rights Agreement
shall have been approved by all necessary corporate action on the part of the
Purchaser and the Selling Shareholders.
SECTION 5. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLING SHAREHOLDERS
The obligations of the Selling Shareholders to effect this Agreement
are subject to the satisfaction, at or prior to the Closing, of each of the
following conditions (any of which may be waived by the Agent (as defined in
Section 7.1), in whole or in part, in accordance with Section 7.13):
5.1 ACCURACY OF REPRESENTATIONS. Each of the representations and
warranties made by the Purchaser in this Agreement shall have been accurate in
all material respects as of the date of this Agreement, and shall be accurate in
all respects as of the Closing Date as if made at the Closing Date.
5.2 PERFORMANCE OF COVENANTS. All of the covenants and obligations
that the Purchaser is required to comply with or to perform at or prior to the
Closing shall have been complied with and performed in all material respects.
5.3 AGREEMENTS AND DOCUMENTS. The Selling Shareholders shall have
received the following agreements and documents:
(a) the Rights Agreement, substantially in the form of Exhibit B;
(b) an as filed copy of the Restated Certificate of Incorporation
of the Purchaser, substantially in the form of Exhibit C, executed by the
Purchaser; and
(c) such other documents as the Selling Shareholders may
reasonably request in good faith for the purpose of (i) evidencing the accuracy
of any representation or warranty made by the Purchaser, (ii) evidencing the
compliance by the Purchaser with, or the performance by the Purchaser of, any
covenant or obligation set forth in this Agreement, (iii) evidencing the
compliance with any applicable federal or state securities law, (iv) evidencing
the satisfaction of any condition set forth in this Section 5 or (iv) otherwise
facilitating the consummation or performance of any of the transactions
contemplated hereby.
7.
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5.4 NO RESTRAINTS. No temporary restraining order, preliminary or
permanent injunction or other order preventing the consummation of the
Acquisition shall have been issued by any court of competent jurisdiction and
remain in effect, and there shall not be any Legal Requirement enacted or deemed
applicable to the Acquisition that makes consummation of the Acquisition
illegal.
5.5 CORPORATE APPROVALS. This Agreement and the Rights Agreement
shall have been approved by all necessary corporate action on the part of the
Purchaser.
SECTION 6. INDEMNIFICATION, ETC.
6.1 SURVIVAL OF REPRESENTATIONS, ETC.
(a) The representations, warranties and covenants of each party
pursuant to this Agreement shall survive the Closing and shall expire on the
first anniversary of the Closing Date; provided, however, (i) that fraud claims
shall survive for the statute of limitations applicable to claims based on such
matters, (ii) claims under Sections 2.4 and 2.5 hereof shall survive
indefinitely and (iii) that if, at any time prior to the first anniversary of
the Closing Date, any party seeking indemnification under this Section 6 (an
"INDEMNIFIED PARTY") (acting in good faith) delivers to the party from whom such
indemnification is sought (an "INDEMNIFYING PARTY") a written notice alleging
the existence of a breach of any of the representations and warranties made by
the Indemnifying Party or a breach of any covenant contained herein (and setting
forth in reasonable detail the basis for such Indemnified Party's belief that
such a breach may exist) and asserting a claim for recovery under Section 6.2 or
Section 6.3, whichever is applicable, based on such alleged breach, then the
claim asserted in such notice shall survive the first anniversary of the Closing
until such time as such claim is fully and finally resolved.
(b) The representations, warranties, covenants and obligations of
each Indemnifying Party, and the rights and remedies that may be exercised by
each Indemnified Party, shall not be limited or otherwise affected by or as a
result of investigation made by any Indemnified Party or any of their
Representatives.
6.2 INDEMNIFICATION BY SELLING SHAREHOLDERS.
(a) Subject to the provisions of this Section 6, the Selling
Shareholders, severally and not jointly, shall indemnify and hold harmless each
of the Purchaser Indemnitees from and against the amount of any Damages incurred
by any of the Purchaser Indemnitees directly or indirectly as a result of (i)
any breach of a representation or warranty of any of the Selling Shareholders
contained in Section 2 hereof and (ii) any breach of any covenant or obligation
contained herein. "DAMAGES" shall include any loss, damage, injury, reduced
value, liability, claim, demand, settlement, judgment, award, fine, penalty,
tax, fee (including any legal fee, expert fee, accounting fee or advisory fee),
charge, cost (including any cost of investigation or enforcement costs) or
expense of any nature, net of insurance recoveries. Throughout this Agreement
the term "PURCHASER INDEMNITEES" shall mean the following persons: (a) the
Purchaser; (b) the Purchaser's current and future affiliates (including the
Company but excluding the Selling Shareholders); (c) the respective officers,
directors, employees, agents, attorneys, accountants, advisors and
representatives (the "REPRESENTATIVES") of the persons referred to in
8.
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clauses "(a)" and "(b)" above; and (d) the respective successors and assigns of
the persons referred to in clauses "(a)", "(b)" and "(c)" above.
(b) The Selling Shareholders acknowledge and agree that, if there
is any breach as provided in Section 6.2(a), then the Purchaser itself shall be
deemed, by virtue of its ownership of the capital stock of the Company, to have
incurred Damages as result of such breach or liability. Nothing contained in
this Section 6.2(b) shall have the effect of (i) limiting the circumstances
under which the Purchaser may otherwise be deemed to have incurred Damages for
purposes of this Agreement, (ii) limiting the other type of Damages that the
Purchaser may deemed to have incurred (whether in connection with any such
breach or liability or otherwise) or (iii) limiting the rights of the Company or
any of the other Purchaser Indemnitees under this Section 6.2.
6.3 INDEMNIFICATION BY THE PURCHASER. Subject to the provisions of
this Section 6, the Purchaser shall indemnify and hold harmless each of the
Selling Shareholder Indemnitees from and against the amount of any Damages
incurred by any of the Selling Shareholder Indemnitees directly or indirectly as
a result of (i) any breach of a representation or warranty of the Purchaser
contained in Section 3 hereof or in any instrument delivered pursuant to this
Agreement or (ii) any breach of any covenant or obligation contained herein.
Throughout this Agreement the term "SELLING SHAREHOLDER INDEMNITEES" shall mean
the following persons: (a) the Selling Shareholder; and (d) the respective
successors and assigns of the Selling Shareholder.
SECTION 7. MISCELLANEOUS PROVISIONS
7.1 FURTHER ASSURANCES. Each party hereto shall execute and cause to
be delivered to each other party hereto such instruments and other documents,
and shall take such other actions as such other party may reasonably request
(prior to, at or after the Closing) for the purpose of carrying out or
evidencing any of the transactions contemplated hereby.
7.2 FEES AND EXPENSES. Subject to Section 6, each party to this
Agreement shall bear and pay all fees, costs and expenses (including legal fees
and accounting fees) that have been incurred or that are incurred in the future
by such party in connection with the transactions contemplated hereby, including
all fees, costs and expenses incurred by such party in connection with or by
virtue of (a) the investigation and review conducted by the Purchaser and its
Representatives with respect to the Company's business (and the furnishing of
information to the Purchaser and its Representatives in connection with such
investigation and review), (b) the negotiation, preparation and review of this
Agreement and all agreements, certificates, opinions and other instruments and
documents delivered or to be delivered in connection with the transactions
contemplated hereby, (c) the preparation and submission of any filing or notice
required to be made or given in connection with any of the transactions
contemplated hereby and the obtaining of any consent required to be obtained in
connection with any of the transactions contemplated hereby and (d) the
consummation of the Acquisition.
7.3 ATTORNEYS' FEES. If any action or proceeding relating to this
Agreement or the enforcement of any provision of this Agreement is brought
against any party hereto, the prevailing party shall be entitled to recover
reasonable attorneys' fees, costs and disbursements (in addition to any other
relief to which the prevailing party may be entitled).
9.
14
7.4 NOTICES. Any notice or other communication required or permitted
to be delivered to any party under this Agreement shall be in writing and shall
be deemed properly delivered, given and received when delivered (by hand, by
registered mail, by courier or express delivery service or by facsimile) to the
address or facsimile telephone number set forth beneath the name of such party
below (or to such other address or facsimile telephone number as such party
shall have specified in a written notice given to the other parties hereto):
if to the Purchaser:
Energy Auction Exchange, Inc.
0000 X. Xxxxx Xxx., Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx Godward LLP
0000 Xxxxxx Xxxx., Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx C.T. Linfield, Esq.
Facsimile: (000) 000-0000
if to the Agent:
Xxxxxxx X. Xxxxx, Xx.
390 Benmar, Suite 100
P.O. Box 671787
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
if to any of the Individual Selling Shareholders:
to the appropriate address set forth on Exhibit A
with a copy to:
Xxxxx Xxxxxxx & Xxxx LLP
0000 Xxxxx Xxxxx
000 Xxxxxx
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxxx Xxxxx, Esq.
Facsimile: (000)000-0000
7.5 CONFIDENTIALITY. Without limiting the generality of anything
contained in this Agreement on and at all times after the Closing Date, each
party shall keep confidential, and shall not use or disclose to any other
person, any non-public document or other non-public
10.
15
information in such party's possession that relates to the business of the
Selling Shareholders, the Company or the Purchaser.
7.6 HEADINGS. The bold-faced section headings contained in this
Agreement are for convenience of reference only, shall not be deemed to be a
part of this Agreement and shall not be referred to in connection with the
construction or interpretation of this Agreement.
7.7 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall constitute an original and all of which, when
taken together, shall constitute one agreement.
7.8 GOVERNING LAW. This Agreement shall be construed in accordance
with, and governed in all respects by, the internal laws of the State of
Colorado (without giving effect to principles of conflicts of laws).
7.9 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon: the
Selling Shareholders and their respective personal representatives, executors,
administrators, estates, heirs, successors and assigns (if any); and the
Purchaser and its successors and assigns (if any). This Agreement shall inure to
the benefit of: the Selling Shareholders; the Purchaser; the Indemnitees; and
the respective successors and assigns (if any) of the foregoing. The Purchaser
may freely assign any or all of its rights under this Agreement (including its
indemnification rights under Section 6), in whole or in part, to any other
person without obtaining the consent or approval of any other party hereto or of
any other person.
7.10 REMEDIES CUMULATIVE; SPECIFIC PERFORMANCE. The rights and
remedies of the parties hereto shall be cumulative (and not alternative). The
parties to this Agreement agree that, in the event of any breach or threatened
breach by any party to this Agreement of any covenant, obligation or other
provision set forth in this Agreement for the benefit of any other party to this
Agreement, such other party shall be entitled (in addition to any other remedy
that may be available to it) to (a) a decree or order of specific performance or
mandamus to enforce the observance and performance of such covenant, obligation
or other provision, and (b) an injunction restraining such breach or threatened
breach.
7.11 AMENDMENTS AND WAIVER.
(a) This Agreement may be amended or modified only upon the
written consent of the Purchaser and the holders of a majority of the Series B
Stock (treated as if converted and including any Conversion Shares into which
the shares of Series B Stock have been converted that have not been sold to the
public).
(b) The obligations of the Purchaser and the rights of the
holders of the Series B Stock and the Conversion Shares under the Agreement may
be waived only with the written consent of the holders of a majority of the
Series B Stock (treated as if converted and including any Conversion Shares into
which the shares of Series B Stock have been converted that have not been sold
to the public).
7.12 SEVERABILITY. In the event that any provision of this Agreement,
or the application of any such provision to any person or set of circumstances,
shall be determined to be
11.
16
invalid, unlawful, void or unenforceable to any extent, the remainder of this
Agreement, and the application of such provision to persons or circumstances
other than those as to which it is determined to be invalid, unlawful, void or
unenforceable, shall not be impaired or otherwise affected and shall continue to
be valid and enforceable to the fullest extent permitted by law.
7.13 PARTIES IN INTEREST. Except for the provisions of Section 6, none
of the provisions of this Agreement is intended to provide any rights or
remedies to any person other than the parties hereto and their respective
successors and assigns (if any).
7.14 ENTIRE AGREEMENT. This Agreement and the other agreements
referred to herein set forth the entire understanding of the parties hereto
relating to the subject matter hereof and thereof and supersede all prior
agreements and understandings among or between any of the parties relating to
the subject matter hereof and thereof.
7.15 CONSTRUCTION.
(a) For purposes of this Agreement, whenever the context
requires: the singular number shall include the plural, and vice versa; the
masculine gender shall include the feminine and neuter genders; the feminine
gender shall include the masculine and neuter genders; and the neuter gender
shall include the masculine and feminine genders.
(b) The parties hereto agree that any rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall not
be applied in the construction or interpretation of this Agreement.
(c) As used in this Agreement, the words "include" and
"including," and variations thereof, shall not be deemed to be terms of
limitation, but rather shall be deemed to be followed by the words "without
limitation."
(d) Except as otherwise indicated, all references in this
Agreement to "Sections" and "Exhibits" are intended to refer to Sections of this
Agreement and Exhibits to this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
12.
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The parties hereto have caused this Agreement to be executed and
delivered as of the date first set forth above.
PURCHASER: ENERGY AUCTION EXCHANGE, INC.,
a Delaware corporation
By: /s/ Xxxx X. Xxxxxxx
-----------------------------------------
Xxxx X. Xxxxxxx
President and Chief Executive Officer
SELLING SHAREHOLDERS: /s/ Xxxxxxx X. Xxxxx, Xx.
--------------------------------------------
Xxxxxxx X. Xxxxx, Xx.
/s/ Xxxxx X. Xxxx
--------------------------------------------
Xxxxx X. Xxxx
/s/ Xxxxx X. Xxxx
--------------------------------------------
Xxxxx X. Xxxx
/s/ Xxxxx X. Xxxx
--------------------------------------------
Xxxxx X. Xxxx
/s/ Xxxxxxxxx Xxxx Xxxxxx
--------------------------------------------
Xxxxxxxxx Xxxx Xxxxxx
/s/ Xxxxx X. Xxxx
--------------------------------------------
Xxxxx X. Xxxx
/s/ Xxxxxx X. Xxxxxxxxx, Xx.
--------------------------------------------
Xxxxxx X. Xxxxxxxxx, Xx.
/s/ R.E. Xxxxxxxxx
--------------------------------------------
R.E. Xxxxxxxxx
/s/ Xxxxxxx X. X'Xxxxxxxxxxx
--------------------------------------------
Xxxxxxx X. X'Xxxxxxxxxxx
13.
18
EXHIBIT A
ALLOCATION OF PURCHASE PRICE
AGGREGATE SHARES OF
NAME OF SELLING SHAREHOLDER SERIES B STOCK
------------------------------------------ ---------------------------------
Xxxxxxx X. Xxxxx, Xx. 341,340
0000 Xxxxxxxx Xxxxx Xxxxx
Xxxxxxxx, XX 00000
Xxxxx X. Xxxx 12,743
000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Xxxxx X. Xxxx 17,522
000 Xxxxxxx Xxxx
Xxxxxxx, Xxxxx 00000
Xxxxx X. Xxxx 28,445
0000 Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Xxxxxxxxx Xxxx Xxxxxx 6,827
000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Xxxxx X. Xxxx 4,551
0000 Xxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Xxxxxx X. Xxxxxxxxx, Xx. 21,846
0000 X. Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
R.E. Xxxxxxxxx 10,923
0000 Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Xxxxxxx X. X'Xxxxxxxxxxx 10,923
X.X. Xxx 00
Xxxxxx, Xxxxxxxx 00000
19
EXHIBIT B
SECOND AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
