COALOGIX INC. COMMON STOCK PURCHASE AGREEMENT
COALOGIX
INC.
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Page
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1.
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PURCHASE
AND SALE OF COMMON STOCK
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1
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1.1.
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Sale
and Issuance of Common Stock
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1
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1.2.
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Closing;
Delivery
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1
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1.3.
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Defined
Terms Used in this Agreement
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1
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2.
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REPRESENTATIONS AND WARRANTIES OF THE COMPANY |
2
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2.1.
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Organization,
Good Standing, Corporate Power and Qualification
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3
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2.2.
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Capitalization
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3
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2.3.
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Subsidiaries
and Affiliates
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4
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2.4.
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Authorization
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4
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2.5.
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Valid
Issuance of Shares
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4
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2.6.
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Governmental
Consents and Filings
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4
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2.7.
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Litigation
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4
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2.8.
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Compliance
with Other Instruments
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5
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2.9.
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Rights
of Registration and Voting Rights
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5
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2.10.
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No
Company Operations or Material Liabilities
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5
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2.11.
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Changes
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5
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2.12.
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Corporate
Documents
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6
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2.13.
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Offering
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6
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2.14.
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Preemptive
Rights
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6
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2.15.
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Consents
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6
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2.16.
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Employment
and Non-Competition Agreements
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6
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3.
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REPRESENTATIONS AND WARRANTIES OF THE PURCHASER |
7
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3.1.
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Authorization
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7
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3.2.
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Compliance
with Other Instruments
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7
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3.3.
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Purchase
Entirely for Own Account
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7
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3.4.
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Disclosure
of Information
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7
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3.5.
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Restricted
Securities
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8
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3.6.
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No
Public Market
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8
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3.7.
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Suitability
of Investment
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8
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3.8.
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Legends
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8
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-i-
TABLE
OF CONTENTS
(continued)
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3.9.
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Accredited
Investor
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9
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3.10.
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Foreign
Investors
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9
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3.11.
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Residence
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9
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4.
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CONDITIONS TO THE PURCHASER’S OBLIGATIONS AT CLOSING |
9
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4.1.
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Qualifications
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9
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4.2.
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Representations
and Warranties of Company
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9
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4.3.
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Opinion
of Company Counsel
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9
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4.4.
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Covenants
of the Company
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9
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4.5.
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Stockholders’
Agreement
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9
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4.6.
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Secretary’s
Certificate
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9
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4.7.
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Management
Rights
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10
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4.8.
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Board
of Directors
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10
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5.
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CONDITIONS TO THE COMPANY’S OBLIGATIONS AT CLOSING |
10
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5.1.
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Qualifications
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10
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5.2.
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Representations
and Warranties of the Purchaser
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10
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6.
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COVENANTS OF THE COMPANY |
10
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6.1.
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Proceedings
and Documents
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10
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6.2.
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Securities
Laws Compliance
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10
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6.3.
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Use
of Proceeds
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10
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6.4.
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Pre-Closing
Access and Information
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10
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6.5.
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Conduct
of the Company's Business.
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11
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6.6.
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Notices
to Purchaser
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11
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6.7.
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Exclusivity
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11
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7.
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SURVIVAL PERIOD; INDEMNIFICATION |
11
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7.1.
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Survival
of Representations, Warranties and Covenants
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11
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7.2.
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Indemnification
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12
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7.3.
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Limitations
on Indemnification
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12
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8.
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MISCELLANEOUS |
12
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8.1.
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Transfer;
Successors and Assigns
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12
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8.2.
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Governing
Law
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12
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TABLE
OF CONTENTS
(continued)
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Page
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8.3.
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Counterparts
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12
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8.4.
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Titles
and Subtitles
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13
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8.5.
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Notices
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13
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8.6.
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No
Finder’s Fees
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14
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8.7.
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Fees
and Expenses
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14
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8.8.
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Amendments
and Waivers
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14
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8.9.
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Severability
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14
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8.10.
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Delays
or Omissions
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14
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8.11.
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Entire
Agreement
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14
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8.12.
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Publicity
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15
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8.13.
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Right
to Conduct Activities
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15
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8.14.
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Termination
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16
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-iii-
TABLE
OF CONTENTS
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Page
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Exhibit
A
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Schedule
of Purchaser
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Exhibit
B
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Disclosure
Schedule
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Exhibit
C
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Form
of Stockholders’ Agreement
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Exhibit
D
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Form
of Management Rights Letter
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Exhibit
E
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Form
of Legal Opinion of Company Counsel
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-i-
This
Common Stock Purchase Agreement (the “Agreement”)
is
made as of February 29, 2008 by and among CoaLogix Inc., a Delaware corporation
(the “Company”),
Acorn
Energy, Inc., a Delaware corporation (the “Parent”),
and
the investor listed on Exhibit
A
attached
to this Agreement (the “Purchaser”).
The
parties hereby agree as follows:
1. Purchase
and Sale of Common Stock.
1.1. Sale
and Issuance of Common Stock.
Subject
to the terms and conditions of this Agreement, the Purchaser agrees to purchase
at the Closing and the Company agrees to sell and issue to the Purchaser at
the
Closing that number of shares of the Company’s Common Stock, $0.001
par value per share
(the
“Common
Stock”)
set
forth opposite the Purchaser's name on Exhibit
A,
at a
purchase price of $126.1566 per share, payable as set forth on Exhibit
A.
The
shares of Common Stock issued to the Purchaser pursuant to this Agreement shall
be referred to in this Agreement as the “Shares.”
1.2. Closing;
Delivery.
(a) The purchase
and sale of the Shares shall take place at 10:00 a.m., on the date on the
business day on which the last of the conditions set forth in Sections
4
and
5
of this
Agreement that are capable of being satisfied before the Closing are fulfilled
or waived in accordance with this Agreement, at the offices of Dechert LLP,
counsel to EnerTech Capital Partners III L.P., 0000 Xxxx Xxxxxx, Xxxxxxxxxxxx,
XX 00000-0000 or at such other time and place as the Company and the Purchaser
mutually agree upon, orally or in writing (which time and place are designated
as the “Closing”).
(b) At
the
Closing, the Company shall deliver to the Purchaser a certificate representing
the Shares being purchased by the Purchaser at such Closing against payment
of
the purchase price therefor by wire transfer to a bank account designated by
the
Company.
1.3. Defined
Terms Used in this Agreement.
In
addition to the terms defined above, the following terms used in this Agreement
shall be construed to have the meanings set forth or referenced
below.
“Affiliate”
means
with respect to any person or entity (a “Person”)
any
Person which, directly or indirectly, controls, is controlled by, or is under
common control with such Person, including, without limitation, any partner,
officer, director, or member of such Person and any venture capital fund now
or
hereafter existing which is controlled by or under common control with one
or
more general partners or shares the same management company with such
Person.
“Code”
means
the Internal Revenue Code of 1986, as amended.
“Company
Intellectual Property”
means
all trademarks, service marks, tradenames, copyrights, trade secrets, licenses,
information and proprietary rights and processes and all patents and patent
rights owned or possessed by the Company.
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
“Key
Employee”
means
any executive-level employee (including Vice President level positions) as
well
as any employee who either alone or in concert with others develops, invents,
programs or designs any Company Intellectual Property.
“Management
Rights Letter”
means
the agreement between the Company and EnerTech Capital Partners III L.P., in
the
form of Exhibit
D
attached
to this Agreement.
“Material
Adverse Effect”
means
a
material adverse effect on the business, assets (including intangible assets),
liabilities, financial condition, property, prospects or
results of operations of the Company or any of the SCR-Tech
Entities.
“Purchaser”
means
the Purchaser who is a party to this Agreement.
“SCR-Tech
Entities”
means
CESI-TECH Technologies, CESI-SCR, Inc. and SCR Tech LLC.
“Securities
Act”
means
the Securities Act of 1933, as amended.
“Shares”
means
the shares of Common Stock of the Company issued at the Closing.
“Stockholders’
Agreement”
means
the agreement between the Company, Parent and the Purchaser, dated as of the
date hereof, in the form of Exhibit
C
attached
to this Agreement.
“Transaction
Agreements”
means
this Agreement, the Stockholders’ Agreement, the Management Rights Letter, and
any other agreements, instruments or documents entered into in connection with
this Agreement.
2. Representations
and Warranties of the Company.
The
Company hereby represents and warrants to the Purchaser that, except as set
forth on the Disclosure
Schedule
attached
to this Agreement which exceptions shall be deemed to be part of the
representations and warranties made hereunder, the following representations
are
true and complete as of the date hereof and will be true and correct as of
the
Closing, except as otherwise indicated. The Disclosure
Schedule
shall be
arranged in sections corresponding to the numbered and lettered sections and
subsections contained in this Section
2,
and the
disclosures in any section or subsection of the Disclosure
Schedule
shall
qualify other sections and subsections in this Section
2
only to
the extent it is readily apparent from a reading of the disclosure that such
disclosure is applicable to such other sections and subsections.
2
For
purposes of these representations and warranties, the phrase “to the Company’s
knowledge” shall mean the knowledge after reasonable investigation of the Key
Employees of the Company.
2.1. Organization,
Good Standing, Corporate Power and Qualification.
The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all requisite corporate power
and authority to carry on its business as presently conducted and as proposed
to
be conducted. The Company is duly qualified to transact business and is in
good
standing in each jurisdiction in which the failure to so qualify would have
a
Material Adverse Effect.
2.2. Capitalization.
The
authorized capital of the Company consists, immediately prior to the Closing
(unless otherwise noted), of:
(a) 150,000 shares
of
Common Stock, 87,500 shares of which are issued and outstanding immediately
prior to the Closing. All of the outstanding shares of Common Stock have been
duly authorized, are fully paid and nonassessable and were issued in compliance
with all applicable federal and state securities laws. The Company holds no
treasury stock.
(b) Section
2.2(c) of the Disclosure Schedule
sets
forth the options that the Company is committed to granting following the
Closing.
(c) Section
2.2(c)
of the Disclosure Schedule
sets
forth the capitalization of the Company immediately following the Closing
including the number of shares of the following: (i) issued and outstanding
Common Stock; (ii) the name of each holder of options for Common Stock,
together with the number of shares for which such options are exercisable with
respect to each holder, the applicable vesting schedule, if any, and the
applicable exercise price; (iii) stock options not yet issued but reserved
for issuance; and (iv) warrants or stock purchase rights, if any. Except
for (A) the rights provided in Sections
4
and
5
of the
Stockholders’ Agreement, and (B) the securities and rights described in
Section
2.2(b)
of this
Agreement and Section
2.2(c)
of the Disclosure Schedule,
there
are no outstanding options, warrants, rights (including conversion or preemptive
rights and rights of first refusal or similar rights) or agreements, orally
or
in writing, to purchase or acquire from the Company, or sell to the Company,
any
shares of Common Stock, or contracts, commitments, understandings, or
arrangements by which the Company is or may become bound to issue Common Stock
or any securities convertible into or exchangeable for shares of Common Stock.
Except as set forth on Section
2.2(c)
of the Disclosure Schedule,
no
current or former shareholder of the Company's capital stock has, or with the
giving of notice or any other actions may have, any appraisal rights or the
right to obtain payment of the fair value of that shareholder's shares of Common
Stock. Except for as provided in the Stockholders’ Agreement, no shareholder of
the Company or other person has any right to designate members to serve on
the
Company's board of directors or any committee thereof.
3
(d) Except
as
set forth on Section
2.2(d)
of the Disclosure Schedule,
all
outstanding shares of the Company’s Common Stock and all shares of the Company’s
Common Stock underlying outstanding options are subject to a right of first
refusal in favor of the Company upon any proposed transfer (other than transfers
for estate planning purposes). Except as set forth on Section
2.2(d)
of the Disclosure Schedule,
none of
the Company’s stock purchase agreements or stock option documents contains a
provision for acceleration of vesting (or lapse of a repurchase right) upon
the
occurrence of any event or combination of events. Except as set forth on
Section
2.2(d)
of the Disclosure Schedule,
the
Company has never adjusted or amended the exercise price of any stock options
previously awarded, whether through amendment, cancellation, replacement grant,
repricing, or any other means.
2.3. Subsidiaries
and Affiliates.
Except
as set forth on Section
2.3 of the Disclosure Schedule,
the
Company does not own, directly or indirectly, any capital stock or other equity
securities of any corporation or have any direct or indirect equity ownership
in
any business.
2.4. Authorization.
All
corporate action required to be taken by the Company’s Board of Directors and
stockholders in order to authorize the Company to enter into the Transaction
Agreements, and to issue the Shares at the Closing, has been taken or, in the
case of the stockholders, will be taken prior to the Closing. All action on
the
part of the officers of the Company necessary for the execution and delivery
of
the Transaction Agreements, the performance of all obligations of the Company
under the Transaction Agreements to be performed as of the Closing, and the
issuance and delivery of the Shares has been taken or will be taken prior to
the
Closing. The Transaction Agreements, when executed and delivered by the Company,
shall constitute valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their respective terms except
(i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance, or other laws of general application relating
to or affecting the enforcement of creditors’ rights generally, (ii) as limited
by laws relating to the availability of specific performance, injunctive relief,
or other equitable remedies, or (iii) to the extent the indemnification
provisions contained in the Stockholders’ Agreement may be limited by applicable
federal or state securities laws.
2.5. Valid
Issuance of Shares.
The
Shares, when issued, sold and delivered in accordance with the terms and for
the
consideration set forth in this Agreement, will be validly issued, fully paid
and nonassessable and free of restrictions on transfer other than restrictions
on transfer under this Agreement, the Stockholders’ Agreement, applicable state
and federal securities laws and liens or encumbrances created by or imposed
by
the Purchaser. Assuming the accuracy of the representations of the Purchaser
in
Section
3
of this
Agreement, the Shares will be issued in compliance with all applicable federal
and state securities laws.
2.6. Governmental
Consents and Filings.
Assuming the accuracy of the representations made by the Purchaser in
Section
4
of this
Agreement, no consent, approval, order or authorization of, or registration,
qualification, designation, declaration or filing with, any federal, state
or
local governmental authority is required on the part of the Company in
connection with the consummation of the transactions contemplated by this
Agreement, except for filings, if any, pursuant to Regulation D of the
Securities Act, and applicable state securities laws, which have been made
or
will be made in a timely manner.
2.7. Litigation.
There
is no claim, action, suit, proceeding, arbitration, complaint, charge or
investigation pending or, to the Company’s knowledge, currently threatened that
questions the validity of the Transaction Agreements or the right of the Company
to enter into them, or to consummate the transactions contemplated by the
Transaction Agreements.
4
2.8. Compliance
with Other Instruments.
The
execution, delivery and performance of the Transaction Agreements and the
consummation of the transactions contemplated by the Transaction Agreements
will
not result in any violation or be in conflict with or constitute, with or
without the passage of time and giving of notice, either (i) a default under
any
instrument, judgment, order, writ, decree, contract or agreement to which the
Company is a party or by which it is bound or (ii) an event which results in
the
creation of any lien, charge or encumbrance upon any property or assets of
the
Company or the suspension, revocation, forfeiture, or nonrenewal of any permit
or license applicable to the Company.
2.9. Rights
of Registration and Voting Rights.
Except
as provided in the Stockholders’ Agreement, the Company is not under any
obligation to register under the Securities Act any of its currently outstanding
securities or any securities issuable upon exercise or conversion of its
currently outstanding securities. Except as contemplated in the Stockholders’
Agreement, no stockholder of the Company has entered into any agreements with
respect to the voting of capital shares of the Company.
2.10. No
Company Operations or Material Liabilities.
The
Company is a holding company without operations other than the ownership of
stock of its subsidiaries. The Company, excluding its subsidiaries, has no
material liabilities or obligations, contingent or otherwise, other than
liabilities (i) under that certain Stock Purchase Agreement, dated November
7,
2007, by and among the Company, Parent, Catalytica Energy Systems, Inc. and
with
respect to Article 11 thereof only, Renegy Holdings, Inc., (ii) under this
Agreement, or (iii) as
set
forth on Section
2.10
of the Disclosure Schedule.
2.11. Changes.
To the
Company’s knowledge, since November 7, 2007, there has not been:
(a) any
change in the assets, liabilities, financial condition or operating results
of
the SCR-Tech Entities, except changes in the ordinary course of business that
have not caused, in the aggregate, a Material Adverse Effect on the SCR-Tech
Entities;
(b) any
damage, destruction or loss, whether or not covered by insurance, that would
have a Material Adverse Effect on the SCR-Tech Entities;
(c) any
waiver or compromise by the Company of a valuable right or of a material debt
owed to any of the SCR-Tech Entities;
(d) any
satisfaction or discharge of any lien, claim, or encumbrance or payment of
any
obligation by the Company, except in the ordinary course of business and the
satisfaction or discharge of which would not have a Material Adverse Effect
on
the SCR-Tech Entities;
(e) any
material change to a material contract or agreement by which the SCR-Tech
Entities or any of their assets is bound or subject;
5
(f) any
mortgage, pledge, transfer of a security interest in, or lien, created by the
Company, with respect to any of the material properties or assets of the
SCR-Tech Entities, except liens for taxes not yet due or payable and liens
that
arise in the ordinary course of business and do not materially impair the
Company’s or the SCR-Tech Entities’ ownership or use of such property or
assets;
(g) any
sale,
assignment or transfer of any Company Intellectual Property that
could reasonably be expected to result in a Material Adverse Effect to the
SCR-Tech Entities;
(h) receipt
of notice that there has been a loss of, or material order cancellation by,
any
major customer of any of the SCR-Tech Entities; or
(i) any
other
event or condition of any character, other than events affecting the economy
or
the Company’s industry generally, that could reasonably be expected to result in
a Material Adverse Effect to the SCR-Tech Entities.
To
the
Company’s knowledge, since November 7, 2007 (x) the SCR-Tech Entities have
carried on and operated their business in the ordinary course of business and
(y) the SCR-Tech Entities have not suffered a Material Adverse
Effect.
2.12. Corporate
Documents.
The
Certificate of Incorporation and Bylaws of the Company are in the form provided
to the Purchaser. The copy of the minute books of the Company provided to the
Purchaser contains minutes of all meetings of directors and stockholders and
all
actions by written consent without a meeting by the directors and stockholders
since November 7, 2007 and accurately reflects in all material respects all
actions by the directors (and any committee of directors) and stockholders
with
respect to all transactions referred to in such minutes.
2.13. Offering.
Subject
in part to the truth and accuracy of the Purchaser’s representations set forth
in Article III of this Agreement, the offer, sale and issuance of the Shares
as
contemplated by this Agreement are exempt from the registration requirements
of
the Securities Act of 1933, as amended, and neither the Company nor any
authorized agent acting on its behalf will take any action hereafter that would
cause the loss of such exemption.
2.14. Preemptive
Rights.
The
Company has fully satisfied (including with respect to rights of timely
notification) or obtained enforceable waivers in respect of any preemptive
or
similar rights directly or indirectly affecting any of its
securities.
2.15. Consents.
All
consents, approvals, releases, filings, terminations and waivers by third
parties necessary to complete the transactions contemplated hereby that are
set
forth in Section
2.15
of the Disclosure Schedule
have
been obtained and delivered to the Purchaser and such consents, approvals,
releases, filings, terminations and waivers have not expired or been
withdrawn.
2.16. Employment
and Non-Competition Agreements.
Xxxxxxx
XxXxxxx, Xxxxxxx Xxxxxx, Xxxxx Xxxx and Xxxxxxx Xxxxxx are bound by and have
executed employment agreements with the Company and the SCR-Tech Entities.
All
other employees of the SCR-Tech Entities have entered into non-competition
agreements with the SCR-Tech Entities.
6
3. Representations
and Warranties of the Purchaser.
The
Purchaser hereby represents and warrants to the Company that:
3.1. Authorization.
The
Purchaser has full power and authority to enter into the Transaction Agreements.
The Transaction Agreements to which the Purchaser is a party, when executed
and
delivered by the Purchaser, will constitute valid and legally binding
obligations of the Purchaser, enforceable in accordance with their terms, except
(a) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance, and any other laws of general application
affecting enforcement of creditors’ rights generally, and as limited by laws
relating to the availability of a specific performance, injunctive relief,
or
other equitable remedies, or (b) to the extent the indemnification
provisions contained in the Stockholders’ Agreement may be limited by applicable
federal or state securities laws.
3.2. Compliance
with Other Instruments.
The
execution and delivery of this Agreement by the Purchaser, and the performance
by the Purchaser of its obligations hereunder, will not conflict, or result
in
any violation of, or default under, any provision of any charter, bylaws, trust
agreement, partnership agreement or other governing instrument applicable to
the
Purchaser, or any agreement or other instrument to which the Purchaser is a
party or by which the Purchaser or any of its properties are bound, or any
permit, franchise, judgment, decree, order, rule or regulation applicable to
the
Purchaser or the Purchaser’s business or properties.
3.3. Purchase
Entirely for Own Account.
This
Agreement is made with the Purchaser in reliance upon the Purchaser’s
representation to the Company, which by the Purchaser’s execution of this
Agreement, the Purchaser hereby confirms, that the Shares to be acquired by
the
Purchaser will be acquired for investment for the Purchaser’s own account, not
as a nominee or agent, and not with a view to the resale or distribution of
any
part thereof, and that the Purchaser has no present intention of selling,
granting any participation in, or otherwise distributing the same. By executing
this Agreement, the Purchaser further represents that the Purchaser does not
presently have any contract, undertaking, agreement or arrangement with any
person to sell, transfer or grant participations to such person or to any third
person, with respect to any of the Shares. The Purchaser has not been formed
for
the specific purpose of acquiring the Shares.
3.4. Disclosure
of Information.
The
Purchaser has had an opportunity to discuss the Company’s business, management,
financial affairs and the terms and conditions of the offering of the Shares
with the Company’s management. Except as set forth in the Transaction
Agreements, no representations or warranties, whether written or oral, have
been
made to the Purchaser by the Company or any officer, employee, affiliate or
agent of the Company. The foregoing, however, does not limit or modify the
representations and warranties of the Company in Section
2
of this
Agreement or the right of the Purchaser to rely thereon.
7
3.5. Restricted
Securities.
The
Purchaser understands that the Shares have not been, and will not be, registered
under the Securities Act, by reason of a specific exemption from the
registration provisions of the Securities Act which depends upon, among other
things, the bona fide nature of the investment intent and the accuracy of the
Purchaser’s representations as expressed herein. The Purchaser understands that
the Shares are “restricted securities” under applicable U.S. federal and state
securities laws and that, pursuant to these laws, the Purchaser must hold
the Shares
indefinitely unless they are registered with the Securities and Exchange
Commission and qualified by state authorities, or an exemption from such
registration and qualification requirements is available. The Purchaser
acknowledges that the Company has no obligation to register or qualify the
Shares for resale except as set forth in the Stockholders’ Agreement. The
Purchaser further acknowledges that if an exemption from registration or
qualification is available, it may be conditioned on various requirements
including, but not limited to, the time and manner of sale, the holding period
for the Shares, and on requirements relating to the Company which are outside
of
the Purchaser’s control, and which the Company is under no
obligation and
may
not be able to satisfy.
3.6. No
Public Market.
The
Purchaser understands that no public market now exists for the Shares, and
that
the Company has made no assurances that a public market will ever exist for
the
Shares.
3.7. Suitability
of Investment.
The
Purchaser has such knowledge and experience in financial, business and tax
matters that the Purchaser is capable of evaluating the merits and risks
relating to the Purchaser’s investment in the Shares and making an investment
decision with respect to the Company. The Purchaser acknowledges that it has
had
the opportunity to review this Agreement and the transactions contemplated
by
this Agreement with its own legal counsel. The Purchaser is not relying on
any
statements or representations of the Company or any of its agents for legal
advice with respect to this investment or the transactions contemplated by
this
Agreement other than as set forth in the Transaction Agreements.
3.8. Legends.
The
Purchaser understands that the Shares and any securities issued in respect
of or
exchange for the Shares, may bear one or all of the following
legends:
(a) “THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE “ACT”), AND HAVE BEEN ACQUIRED FOR INVESTMENT AND
NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.
NO
SUCH TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT, UNLESS SUCH TRANSFER
SHALL
(I) CONSTITUTE A ROUTINE SALE UNDER RULE 144 OF THE ACT OR (II) BE OF SHARES
THAT ARE ELIGIBLE FOR RESALE UNDER RULE 144(B)(1) OF THE ACT.”
(b) Any
legend set forth in, or required by, the other Transaction
Agreements.
(c) Any
legend required by the securities laws of any state to the extent such laws
are
applicable to the Shares represented by the certificate so
legended.
8
3.9. Accredited
Investor.
The
Purchaser is an accredited investor as defined in Rule 501(a) of Regulation
D
promulgated under the Securities Act.
3.10. Foreign
Investors.
If the
Purchaser is not a United States person (as defined by Section 7701(a)(30)
of the Code), such Purchaser hereby represents that it has satisfied itself
as
to the full observance of the laws of its jurisdiction in connection with any
invitation to subscribe for the Shares or any use of this Agreement, including
(i) the legal requirements within its jurisdiction for the purchase of the
Shares, (ii) any foreign exchange restrictions applicable to such purchase,
(iii) any governmental or other consents that may need to be obtained, and
(iv) the income tax and other tax consequences, if any, that may be
relevant to the purchase, holding, redemption, sale, or transfer of the Shares.
Such Purchaser’s subscription and payment for and continued beneficial ownership
of the Shares, will not violate any applicable securities or other laws of
the
Purchaser’s jurisdiction.
3.11. Residence.
The
office or offices of the Purchaser in which its principal place of business
is
located at the address or addresses of the Purchaser set forth on Exhibit
A.
4. Conditions
to the Purchaser’s Obligations at Closing.
The
obligations of the Purchaser to purchase Shares at the Closing are subject
to
the fulfillment, on or before Closing, of each of the following conditions,
unless otherwise waived:
4.1. Qualifications.
All
authorizations, approvals or permits, if any, of any governmental authority
or
regulatory body of the United States or of any state that are required in
connection with the lawful issuance and sale of the Shares pursuant to this
Agreement shall be obtained and effective as of such Closing.
4.2. Representations
and Warranties of Company.
The
representations and warranties of the Company contained in Section 2 shall
be
true and correct in all material respects as of Closing, except that any such
representation and warranties shall be true and correct in all respects where
such representation and warranty is qualified with respect to materiality in
Section 2, and the Company shall have performed and complied with all covenants,
agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before
Closing.
4.3. Opinion
of Company Counsel.
The
Purchaser shall have received from Xxxxxxxxx Xxxxxx & Xxxx LLP, counsel for
the Company, an opinion, dated as of the Closing, in substantially the form
of
Exhibit E (but without assumptions related to issuance of the
Shares).
4.4. Covenants
of the Company.
The
Company shall have in all material respects performed the obligations and
complied with the covenants required by this Agreement to be performed or
complied with by it at or prior to the Closing.
4.5. Stockholders’
Agreement.
The
Company and the Purchaser and the other stockholders of the Company named as
parties thereto have executed and delivered the Stockholders’
Agreement.
4.6. Secretary’s
Certificate.
The
Secretary of the Company has delivered to the Purchaser at the Closing a
certificate certifying (i) the Certificate of Incorporation and Bylaws of the
Company and (ii) resolutions of the Board of Directors of the Company approving
the Transaction Agreements and the transactions contemplated under the
Transaction Agreements.
9
4.7. Management
Rights.
A
Management Rights Letter has been executed by the Company and delivered to
EnerTech Capital Partners III L.P.
4.8. Board
of Directors.
The
Company’s Board of Directors shall be comprised of Xxxx X. Xxxxx, Xxxxx Xxxxxxx
and Xxxxxxx XxXxxxx.
5. Conditions
to the Company’s Obligations at Closing.
The
obligations of the Company to sell Shares to the Purchaser at the Closing are
subject to the fulfillment, on or before the Closing, of each of the following
conditions, unless otherwise waived:
5.1. Qualifications.
All
authorizations, approvals or permits, if any, of any governmental authority
or
regulatory body of the United States or of any state that are required in
connection with the lawful issuance and sale of the Stock pursuant to this
Agreement shall be obtained and effective as of the Closing.
5.2. Representations
and Warranties of the Purchaser.
The
representations and warranties of the Purchaser contained in Section
3
shall be
true and correct in all material respects as of Closing, except that any such
representation and warranties shall be true and correct in all respects where
such representation and warranty is qualified with respect to materiality in
Section
3,
and the
Company shall have performed and complied with all covenants, agreements,
obligations and conditions contained in this Agreement that are required to
be
performed or complied with by it on or before Closing.
6. Covenants
of the Company.
6.1. Proceedings
and Documents.
The
Purchaser shall receive all such counterpart original and certified or other
copies of such documents as reasonably requested. Such documents may include
good standing certificates.
6.2. Securities
Laws Compliance.
The
Company shall make in a timely manner any filings required by applicable federal
or state securities or Blue Sky laws, or those of any other applicable
jurisdiction.
6.3. Use
of
Proceeds.
As set
forth on Section
6.3
of the Disclosure Schedule,
the
Company agrees that the purchase price paid by the Purchaser shall be used
by it
for working capital expenses only, and shall not be used to reduce any
outstanding indebtedness of the Company or to make payments to any stockholder
or affiliate of the Company.
6.4. Pre-Closing
Access and Information.
From
the date hereof to the Closing, the Company will give the Purchaser and their
authorized representatives (including accountants, legal counsel and
environmental consultants) full access at all reasonable times, upon reasonable
notice, to all of the offices and other facilities of the Company, to all
contracts, agreements, commitments, books and records of the Company, to the
personnel (including auditors) of the Company and to the customers and suppliers
of the Company.
10
6.5. Conduct
of the Company's Business.
(a) Except
as
contemplated by this Agreement, during the period from the date of this
Agreement to the Closing Date, the Company shall conduct the operations of
the
Company according to its ordinary course of business and consistent with past
practice, and shall use commercially reasonable efforts to preserve intact
its
business organization, keep available the services of its officers and
employees, and maintain satisfactory relationships with suppliers, contractors,
distributors, customers and others having business relationships with the
Company. During the period from the date of this Agreement to the Closing Date,
the Company agrees that it will not take any action reasonably within its
control, or omit to take any action reasonably within its control, which would
cause any of the representations and warranties of the Company in this Agreement
to become untrue.
(b) Without
limiting the foregoing, during the period from the date of this Agreement to
the
Closing Date, the Company shall not take any of the actions specified in
Section
2.11
without
the prior written consent the Purchaser.
6.6. Notices
to Purchaser.
Prior
to the Closing, the Company shall give prompt written notice to the Purchaser
of: (a) any breach or default by the Company of the representations, warranties,
covenants or agreements hereunder or under any document or instrument
contemplated hereby; (b) any notice or other communication from any third party
alleging that the consent of such third party is or may be required in
connection with the transactions contemplated by this Agreement; (c) any notice
or other communication from any governmental authority in connection with the
transactions contemplated by this Agreement; (d) any Material Adverse Effect;
and (e) any claim, action, or proceeding against the Company which could
reasonably be expected to have a Material Adverse Effect.
6.7. Exclusivity.
From
the date hereof to the Closing, the Company shall not, nor shall it authorize
or
permit any officer, director or employee of or any investment banker, broker,
attorney, accountant, or other representative retained by the Company to,
solicit, initiate or encourage (including by way of furnishing information)
submission of any proposal or offer from any person which constitutes, or may
reasonably be expected to lead to, a Financing Proposal. As used herein, a
“Financing
Proposal”
shall
mean any proposal for a merger or other business combination involving the
Company, or any proposal or offer to acquire in any manner an equity interest
in
or a material portion of the assets of the Company (other than sales in the
ordinary course of business consistent with past practice) or to extend
indebtedness to the Company. If the Company receives a Financing Proposal prior
to the Closing, the Company shall notify the Purchaser immediately and shall
provide to the Purchaser a copy of any written documentation of such Financing
Proposal.
7. Survival
Period; Indemnification.
7.1. Survival
of Representations, Warranties and Covenants.
Unless
otherwise set forth in this Agreement, the representations and warranties of
the
Company and the Purchaser contained in or made pursuant to this Agreement (x)
shall survive the execution and delivery of this Agreement and the Closing
until
the date that is one year after the Closing Date, except that the
representations and warranties in Sections
2.1, 2.2, 2.3, 2.4
and
2.5
shall
survive the Closing indefinitely, and (y) shall in no way be affected by any
investigation of the subject matter thereof made by or on behalf of the
Purchaser or the Company and shall bind the parties’ successors and assigns
(including, without limitation, any successor to the Company by way of
acquisition, merger or otherwise), whether so expressed or not. This Section
7
shall survive the Closing and the covenants contained in this Agreement shall
survive the Closing for the periods contemplated by their terms.
11
7.2. Indemnification.
The
Company and the Purchaser shall, with respect to the representations, warranties
and agreements made by them herein, indemnify, pay, defend and hold the Company
or the Purchaser, as the case may be, and each of the Company or the Purchaser’s
officers, directors, partners, employees and agents and their respective
Affiliates, as the case may be, (the “Indemnitees”)
harmless against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, expenses and disbursements
of counsel for such Indemnitees in connection with any investigative,
administrative or judicial proceeding (collectively, “Losses”),
whether or not such Indemnitees shall be designated a party thereto, which
may
be (a) imposed on such Indemnitee, or (b) incurred by such Indemnitee, as a
result of (i) the violation or breach of any representation, warranty or
covenant of the Company or the Parent or the Purchaser, as the case may be,
under this Agreement or the Stockholders’ Agreement; (ii) the Purchaser’s
investment in or ownership of the Shares; or (iii) actions or omissions by
any
agent, representative or employee of the Company or the Parent or the Purchaser,
as the case may be.
7.3. Limitations
on Indemnification.
The
Company or the Purchaser, as the case may be, shall not have liability under
Section 7.2 until the aggregate amount of Losses of the Indemnitees exceeds
$50,000, in which case the Indemnitees shall be entitled to Losses in an amount
up to the purchase price of $1,947,983.55 in the aggregate.
8. Miscellaneous.
8.1. Transfer;
Successors and Assigns.
The
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties. The Company
may not assign this Agreement or any rights or obligations hereunder without
the
prior written consent of a majority of the Shares. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
8.2. Governing
Law.
This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of Delaware, without regard to its principles of conflicts
of
laws.
8.3. Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument. This Agreement may also be executed and delivered by facsimile
signature and in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
12
8.4. Titles
and Subtitles.
The
titles and subtitles used in this Agreement are used for convenience only and
are not to be considered in construing or interpreting this
Agreement.
8.5. Notices.
All
notices and other communications given or made pursuant to this Agreement shall
be in writing and shall be deemed effectively given: (a) upon personal delivery
to the party to be notified, (b) when sent by confirmed electronic mail or
facsimile if sent during normal business hours of the recipient, and if not
so
confirmed, then on the next business day, (c) five (5) days after having been
sent by registered or certified mail, return receipt requested, postage prepaid,
or (d) one (1) day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt. All
communications shall be sent to the respective parties at their address as
set
forth on the signature page or Exhibit A,
or to
such e-mail address, facsimile number or address as subsequently modified by
written notice given in accordance with this Section
8.5.
If
notice
is given to the Company or Parent, it shall be sent to:
CoaLogix
00000
Xx.
Xxxxx Xxxx
Xxxxxxxxx,
XX 00000
0
X.
Xxxxxxxx Xxxx
X.X.
Xxx
0
Xxxxxxxxxx,
Xxxxxxxx 00000
A
copy
shall also be sent to:
Xxxxxxxxx
Xxxxxx & Xxxx LLP
00
Xxxx
00xx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Fax
No.
(000) 000-0000
Attention:
Xxxxxxx Xxxxxx, Esq.
Xxxxxx
Xxxxxxx Xxxxxxxxx & Xxxx, PLLC
One
Wachovia Center, Suite 3500
000
Xxxxx
Xxxxxxx Xxxxxx
Xxxxxxxxx,
XX 00000-0000
Fax
No.
(000) 000-0000
Attention:
Xxx X. Xxxxxxx
If
notice
is given to the Purchaser, it shall be sent to the address sent forth on Exhibit
A. A copy shall also be sent to:
Dechert
LLP
Xxxx
Centre
0000
Xxxx
Xx.
Xxxxxxxxxxxx,
XX 00000-0000
Fax
No.
(000) 000-0000
Attention:
Xxx X. Xxxxxxx, Esq.
13
8.6. No
Finder’s Fees.
Except
as set forth in Section
8.6
of the Disclosure Schedule,
each
party represents that it neither is nor will be obligated for any finder’s fee,
commission or other compensation in connection with this transaction. The
Purchaser agrees to indemnify and to hold harmless the Company from any
liability for any commission or compensation in the nature of a finder’s fee
arising out of this transaction (and the costs and expenses of defending
against such liability or asserted liability) for which the Purchaser or any
of
its officers, employees, or representatives is responsible. The Company agrees
to indemnify and hold harmless the Purchaser from any liability for any
commission or compensation in the nature of a finder’s or broker’s fee
arising out of this transaction (and the costs and expenses of defending against
such liability or asserted liability) for which the Company or any of its
officers, employees or representatives is responsible.
8.7. Fees
and Expenses.
At
Closing, the Company shall pay the reasonable fees and expenses of Dechert
LLP,
special counsel to EnerTech Capital Partners III L.P., as well as other costs
and expenses incurred by EnerTech Capital Partners III L.P., in connection
with
the financing.
8.8. Amendments
and Waivers.
Any
term of this Agreement may be amended, terminated or waived only with the
written consent of the Company and the Purchaser. Any amendment or waiver
effected in accordance with this Section 8.8
shall be
binding upon the Company, the Purchaser, and each transferee of the Shares,
each
future holder of all such securities and the Company. In the event a nonmaterial
provision of this Agreement is required to be amended by the Purchaser after
the
Closing, the Company will not unreasonably withhold its consent to such
amendment.
8.9. Severability.
The
invalidity of unenforceability of any provision hereof shall in no way affect
the validity or enforceability of any other provision.
8.10. Delays
or Omissions.
No
delay or omission to exercise any right, power or remedy accruing to any party
under this Agreement, upon any breach or default of any other party under this
Agreement, shall impair any such right, power or remedy of such non-breaching
or
non-defaulting party nor shall it be construed to be a waiver of any such breach
or default, or an acquiescence therein, or of or in any similar breach or
default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any party of any breach or default under this
Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement, must be in writing and shall be effective only
to
the extent specifically set forth in such writing. All remedies, either under
this Agreement or by law or otherwise afforded to any party, shall be cumulative
and not alternative.
8.11. Entire
Agreement.
This
Agreement (including the Exhibits hereto, if any), and the other Transaction
Agreements constitute the full and entire understanding and agreement between
the parties with respect to the subject matter hereof, and any other written
or
oral agreement relating to the subject matter hereof existing between the
parties are expressly canceled.
14
8.12. Publicity.
The
Company may disclose the existence of the financing, as well as the investment
in the Company by the Purchaser, solely to the Company’s investors, investment
bankers, lenders, accountants, legal counsel, bona fide prospective investors
and employees, in each case only where such persons or entities were under
appropriate nondisclosure obligations. In addition, the Company may disclose
to
third parties that the Purchaser is an investor in the Company without the
requirement for nondisclosure agreements. The Company is permitted to issue
a
press release within 60 days of the Closing disclosing that the Purchaser has
invested in the Company; provided that the release does not disclose the amount
or other specific terms of the investment and the final form of the press
release is approved in advance in writing by the Purchaser. The Company may
not
use the name of the Purchaser, or any of its Affiliates in any trade
publication, in any marketing materials or otherwise to the general public
without the prior written consent of the Purchaser, which consent may be
withheld in the sole discretion of the Purchaser. Notwithstanding the foregoing,
nothing in this Section
8.12
shall
prevent the Company from taking any action required to assist Parent in
complying with its obligations under the Exchange Act or under the rules or
regulations of any stock exchange or other market on which the Parent’s
securities are listed for trading.
8.13. Right
to Conduct Activities.
The
Company acknowledges and agrees that (i) the Purchaser and its respective
partners, affiliates and affiliates of its partners engage in a wide variety
of
activities and have investments in many other companies, some of which may
be
competitive with the business of the Company; (ii) subject to any fiduciary
obligations of the Purchaser’s designees to the Company’s Board of Directors,
except as waived by the Company pursuant to this Section, it is critical that
the Purchaser be permitted to continue to develop its current and future
business and investment activities without any restriction arising from an
investment by the Purchaser in the Company, the right of the Purchaser to
designate directors of the Company or any other relationship, contractual or
otherwise, between the Purchaser, on the one hand, and the Company or any of
its
affiliates, on the other hand; and (iii) from time to time, in connection with
the foregoing activities of the Purchaser (collectively, the “Activities”), the
Purchaser may have information that may be useful to the Company or its other
stockholders (which information may or may not be known by the member of the
Company’s Board of Directors designated by the Purchaser), and neither the
Purchaser nor any director so designated shall have any duty to disclose any
information known to such person or entity to the Company or any of its other
stockholders. In addition, the Purchaser shall not be liable for any claim
arising out of, or based upon, (i) the investment by the Purchaser in any entity
competitive to the Company, (ii) actions taken by any partner, officer or other
representative of the Purchaser to assist any such competitive company, whether
or not such action was taken as a board member of such competitive company,
or
otherwise, and whether or not such action has a detrimental effect on the
Company, unless such claim arises directly from the Purchaser’s misuse of
confidential information in material breach of Section
3.4
of the
Stockholders’ Agreement.
15
8.14. Termination.
Except
with respect to provisions that expressly survive the termination of this
Agreement, this Agreement may be terminated at any time prior to Closing: (a)
by
the Purchaser if a court of competent jurisdiction or governmental or regulatory
body shall have issued an order, decree or ruling, or taken any other action,
restraining, enjoining or otherwise prohibiting the Closing of the transactions
contemplated hereby and such order, decree, ruling or other action shall have
become final and non-appealable; or (b) by either the Purchaser or the Company
if the Closing shall not have occurred by 8:00 p.m., New York City Time, on
March 3, 2008 and the terminating parties are not in material breach of this
Agreement.
[Remainder
of Page Intentionally Left Blank]
16
The
parties have executed this Common Stock Purchase Agreement as of the date first
written above.
|
COALOGIX
INC.
|
||
|
|
By:
|
/s/Xxxxxxx
X. XxXxxxx
|
|
Name: Xxxxxxx
X. XxXxxxx
|
||
|
Title: President
& CEO
|
||
|
By:
|
/s/Xxxx
X. Xxxxx
|
|
|
Name: Xxxx
X. Xxxxx
|
||
|
Title: CEO
|
||
|
PURCHASER:
|
||
|
ENERTECH
CAPITAL PARTNERS III L.P.
|
||
|
By:
|
ECP
III Management L.P.,
|
|
|
Its
general partner
|
||
|
By:
|
ECP
III Management LLC,
|
|
|
Its
general partner
|
||
|
By:
|
/s/
Xxxxx Xxxxxxx
|
|
|
Name: Xxxxx
Xxxxxxx
|
||
|
Title: CEO
|
||
