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EXHIBIT 10.7
THE PETROLEUM PLACE, INC.
SERIES C PREFERRED STOCK
PURCHASE AGREEMENT
MARCH 2, 2000
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TABLE OF CONTENTS
PAGE
1. AGREEMENT TO SELL AND PURCHASE...............................................1
1.1 Authorization of Series C Stock.....................................1
1.2 Sale and Purchase...................................................1
2. CLOSING, DELIVERY AND PAYMENT................................................1
2.1 Closing.............................................................1
2.2 Delivery............................................................2
2.3 Subsequent Sale of Shares...........................................2
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY................................2
3.1 Organization, Good Standing and Qualification.......................2
3.2 Subsidiaries........................................................3
3.3 Capitalization; Voting Rights.......................................3
3.4 Authorization; Binding Obligations..................................3
3.5 Financial Statements................................................4
3.6 Liabilities.........................................................4
3.7 Agreements; Action..................................................4
3.8 Obligations to Related Parties......................................5
3.9 Changes.............................................................5
3.10 Title to Properties and Assets; Liens, Etc..........................6
3.11 Intellectual Property...............................................7
3.12 Compliance with Other Instruments...................................7
3.13 Litigation..........................................................7
3.14 Tax Returns and Payments............................................8
3.15 Employees...........................................................8
3.16 Proprietary Information and Inventions Agreement....................8
3.17 Obligations of Management...........................................8
3.18 Registration Rights.................................................9
3.19 Compliance with Laws; Permits.......................................9
3.20 Environmental and Safety Laws.......................................9
3.21 Offering Valid......................................................9
3.22 Disclosure..........................................................9
3.23 Small Business Concern.............................................10
3.24 Investment Company.................................................10
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TABLE OF CONTENTS
(CONTINUED)
PAGE
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS.............................10
4.1 Requisite Power and Authority.......................................10
4.2 Investment Representations..........................................10
4.3 Transfer Restrictions...............................................11
5. CONDITIONS TO CLOSING........................................................11
5.1 Conditions to Purchasers' Obligations at Each Closing...............11
5.2 Conditions to Obligations of the Company............................13
6. MISCELLANEOUS................................................................13
6.1 Governing Law.......................................................13
6.2 Survival............................................................14
6.3 Successors and Assigns..............................................14
6.4 Entire Agreement....................................................14
6.5 Severability........................................................14
6.6 Amendment and Waiver................................................14
6.7 Notices.............................................................14
6.8 Expenses............................................................14
6.9 Attorneys' Fees.....................................................15
6.10 Titles and Subtitles................................................15
6.11 Counterparts........................................................15
6.12 Broker's Fees.......................................................15
6.13 Exculpation Among Purchasers........................................15
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XXXXXXXXX XXXXX, INC.
SERIES C PREFERRED STOCK PURCHASE AGREEMENT
THIS SERIES C PREFERRED STOCK PURCHASE AGREEMENT (the "AGREEMENT") is
entered into as of this 2nd day of March, 2000, by and among PETROLEUM PLACE,
INC., a Delaware corporation (the "COMPANY"), and each of those persons and
entities, severally and not jointly, whose names are set forth on the Schedule
of Purchasers attached hereto as Exhibit A (which persons and entities are
hereinafter collectively referred to as "PURCHASERS" and each individually as a
"PURCHASER").
RECITALS
WHEREAS, the Company has authorized the sale and issuance of an
aggregate of one million one hundred eighty-four thousand thirty-two (1,184,032)
shares of its Series C Preferred Stock (the "SERIES C STOCK");
WHEREAS, the Purchasers desire to purchase an aggregate of seven
hundred sixty-one thousand one hundred sixty seven (761,167) shares of Series C
Stock (the "SHARES") on the terms and conditions set forth herein;
WHEREAS, the Company desires to issue and sell the Shares to Purchasers
on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises hereinafter set forth, the parties hereto agree as follows:
1. AGREEMENT TO SELL AND PURCHASE
1.1 AUTHORIZATION OF SERIES C STOCK. On or prior to the First Closing
(as defined in Section 2 below), the Company shall have authorized (i) the sale
and issuance to Purchasers of the Series C Stock and (ii) the issuance of such
shares of Common Stock to be issued upon conversion of the Series C Stock (the
"CONVERSION SHARES"). The Series C Stock and the Conversion Shares shall have
the rights, preferences, privileges and restrictions set forth in the Restated
Certificate of Incorporation of the Company, in the form attached hereto as
Exhibit B (the "RESTATED CERTIFICATE").
1.2 SALE AND PURCHASE. Subject to the terms and conditions hereof, at
the First Closing (as hereinafter defined), the Company hereby agrees to issue
and sell to each Purchaser, severally and not jointly, and each Purchaser agrees
to purchase from the Company, severally and not jointly, the number of Shares
set forth opposite such Purchaser's name on Exhibit A at a purchase price of
Fifty-Nine Dollars and Twelve Cents ($59.12) per share.
2. CLOSING, DELIVERY AND PAYMENT
2.1 CLOSING. The initial closing of the sale and purchase of the Shares
under this Agreement (the "FIRST CLOSING") shall take place within five (5)
business days of the date hereof
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after all the closing conditions under Section 5 hereof have been satisfied or
waived or as otherwise agreed to by the parties, at the offices of Xxxxxx
Godward LLP, 0000 Xxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000, or at
such other place as the Company and Purchasers may mutually agree. The
closing(s) of the sale and purchase of the shares of Series C Stock under
Section 2.3 below shall take place at such time(s) and place(s) as the Company
and Purchasers participating therein shall mutually agree (each, a "SUBSEQUENT
CLOSING") (the First Closing and any Subsequent Closing are collectively
referred to herein as a "CLOSING" and each such date is referred to as a
"CLOSING Date").
2.2 DELIVERY. At each Closing, subject to the terms and conditions
hereof, the Company will deliver to the Purchasers certificates representing the
number of Shares to be purchased at each Closing by each Purchaser, against
payment of the purchase price therefor by check or wire transfer made payable to
the order of the Company.
2.3 SUBSEQUENT SALE OF SHARES. At any time on or before the 60th day
following the First Closing, the Company may sell up to the balance of the
authorized shares of Series C Stock not sold at the First Closing. Except as
otherwise set forth herein, all such sales shall be made on the terms and
conditions set forth in this Agreement by execution of counterpart signature
pages to this Agreement and the Investors' Rights Agreement (as defined in
Section 3.1 below). The rights of the Purchasers in the First Closing as set
forth herein shall not be modified by any Subsequent Closing. Any shares of
Series C Stock sold pursuant to this Section 2.3 shall be deemed to be "Shares"
for all purposes under this Agreement and any purchasers thereof shall be deemed
to be "Purchasers" for all purposes under this Agreement.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth on the Schedule of Exceptions delivered by the
Company to the Purchasers at the First Closing, or at any Subsequent Closing, as
the case may be, the Company hereby represents and warrants to each Purchaser as
follows (except with respect to Section 3.3, throughout this Section 3 the
"Company" refers to The Petroleum Place, Inc. and each of its Subsidiaries (as
defined in the Schedule of Exceptions)):
3.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, and each Subsidiary of the Company is a corporation
duly organized, validly existing and in good standing under the laws of its
respective state of incorporation. The Company has all requisite corporate power
and authority to own and operate its properties and assets, to execute and
deliver this Agreement and the Investors' Rights Agreement, in the form attached
hereto as Exhibit C (the "INVESTORS' RIGHTS AGREEMENT"), to issue and sell the
Shares and the Conversion Shares and to carry out the provisions of this
Agreement, the Investors' Rights Agreement, and the Restated Certificate and to
carry on its business as presently conducted and as presently proposed to be
conducted. The Company is duly qualified and is authorized to do business and is
in good standing as a foreign corporation in all jurisdictions in which the
nature of its activities and of its properties (both owned and leased) make such
qualifications necessary, except for those jurisdictions in which failure to do
so would not have a material adverse effect on the Company or its business.
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3.2 SUBSIDIARIES. Except as set forth in the Schedule of Exceptions,
the Company owns no equity securities of any other corporation, limited
partnership or similar entity. The Company is not a participant in any joint
venture, partnership or similar arrangement. The Company is the owner of all of
the issued and outstanding capital stock of each of the subsidiaries.
3.3 CAPITALIZATION; VOTING RIGHTS. The authorized capital stock of the
Company, immediately prior to the Closing, will consist of (a) fifteen million
(15,000,000) shares of Common Stock, five hundred thousand (500,000) shares of
which are issued and outstanding, and eight hundred thirty-three thousand
(833,000) shares of which are reserved or will be reserved in the future for
issuance to key employees, consultants and others affiliated with the Company or
a subsidiary thereof pursuant to stock grant, stock purchase and/or option plans
or any other stock incentive program, arrangement or agreement approved by the
Company's Board of Directors and (b) six million five hundred thousand
(6,500,000) shares of Preferred Stock, two million (2,000,000) of which are
designated Series A Preferred Stock, one million nine hundred six thousand one
hundred thirty-seven (1,906,137) of which are issued and outstanding, five
hundred thousand (500,000) of which are designated Series B Preferred Stock,
four hundred fifty-five thousand one hundred twenty (455,120) of which are
issued and outstanding, and one million five hundred thousand (1,500,000) of
which are designated Series C Preferred Stock, none of which are issued and
outstanding. All issued and outstanding shares of the Company's Common Stock and
Preferred Stock (i) have been duly authorized and validly issued, (ii) are fully
paid and nonassessable and (iii) were issued in compliance with all applicable
state and federal laws concerning the issuance of securities. The rights,
preferences, privileges and restrictions of the Shares are as stated in the
Restated Certificate. The Conversion Shares have been duly and validly reserved
for issuance. Except as may be granted pursuant to this Agreement, there are no
outstanding options, warrants, rights (including conversion or preemptive rights
and rights of first refusal), proxy or stockholder agreements, or agreements of
any kind for the purchase or acquisition from the Company of any of its
securities. The Shares and the Conversion Shares have been duly authorized and,
when issued in compliance with the provisions of this Agreement and the Restated
Certificate will be validly issued, fully paid and nonassessable and will be
free of any liens or encumbrances; provided, however, that the Shares and the
Conversion Shares may be subject to restrictions on transfer under state and/or
federal securities laws as set forth herein or as otherwise required by such
laws at the time the transfer is proposed.
3.4 AUTHORIZATION; BINDING OBLIGATIONS. All corporate action on the
part of the Company, its officers, directors and stockholders necessary for the
authorization of this Agreement and the Investors' Rights Agreement, the
performance of all obligations of the Company hereunder and thereunder at the
Closing and the authorization, sale, issuance and delivery of the Shares
pursuant hereto and the Conversion Shares pursuant to the Restated Certificate
has been taken or will be taken prior to the Closing. The Agreement and the
Investors' Rights Agreement, when executed and delivered, will be valid and
binding obligations of the Company enforceable in accordance with their terms,
except (i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application affecting enforcement of
creditors' rights; (ii) general principles of equity that restrict the
availability of equitable remedies; and (iii) to the extent that the
enforceability of the indemnification provisions in the Investors' Rights
Agreement may be limited by applicable
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federal securities laws. The sale of the Shares and the subsequent conversion of
the Shares into Conversion Shares are not and will not be subject to any
preemptive rights or rights of first refusal that have not been properly waived
or complied with.
3.5 FINANCIAL STATEMENTS. The Company has delivered to each Purchaser
(i) its audited balance sheet as at September 30, 1999 and audited statement of
income and cash flows for the twelve months ending September 30, 1999 and (ii)
its unaudited balance sheet as of January 31, 2000 (the "STATEMENT DATE") and
unaudited statement of income for the four month period ending on the Statement
Date (collectively, the "FINANCIAL STATEMENTS"). The Financial Statements,
together with the notes thereto, are complete and correct in all material
respects, have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods indicated,
except as disclosed therein, and present fairly the financial condition and
position and operating results of the Company as of September 30, 1999 and the
Statement Date; provided, however, that the unaudited financial statements are
subject to normal recurring year-end audit adjustments (which are not expected
to be material), and do not contain all footnotes required under generally
accepted accounting principles.
3.6 LIABILITIES. The Company has no material liabilities and, to its
knowledge, knows of no material contingent liabilities not disclosed to the
Purchasers in writing, except current liabilities incurred in the ordinary
course which have not been, either in any individual case or in the aggregate,
materially adverse to the financial condition or operating results of the
Company.
3.7 AGREEMENTS; ACTION.
(a) Except for agreements explicitly contemplated hereby and
agreements between the Company and its employees with respect to the sale of the
Company's Common Stock, there are no agreements, understandings or proposed
transactions between the Company and any of its officers, directors, affiliates,
stockholders or their respective affiliates.
(b) There are no agreements, understandings, instruments,
contracts, proposed transactions, judgments, orders, writs or decrees to which
the Company is a party or to its knowledge by which it is bound which may
involve (i) obligations (contingent or otherwise) of, or payments to, the
Company in excess of $100,000, or (ii) the license of any patent, copyright,
trade secret or other proprietary right to or from the Company (other than
licenses arising from the purchase of "off the shelf" or other standard
products), or (iii) provisions restricting or affecting the development,
manufacture or distribution of the Company's products or services, or (iv)
indemnification by the Company with respect to infringements of proprietary
rights.
(c) The Company has not (i) declared or paid any dividends, or
authorized or made any distribution upon or with respect to any class or series
of its capital stock, (ii) incurred any indebtedness for money borrowed or any
other liabilities (other than with respect to dividend obligations,
distributions, indebtedness and other obligations incurred in the ordinary
course of business or as disclosed in the Financial Statements) individually in
excess of $100,000 or, in the case of indebtedness and/or liabilities
individually less than $100,000, in excess of $150,000 in the aggregate, (iii)
made any loans or advances to any person, other than ordinary advances for
travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its
assets or rights, other than the sale of its inventory in the ordinary course of
business.
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(d) For the purposes of subsections (b) and (c) above, all
indebtedness, liabilities, agreements, understandings, instruments, contracts
and proposed transactions involving the same person or entity (including persons
or entities the Company has reason to believe are affiliated therewith) shall be
aggregated for the purpose of meeting the individual minimum dollar amounts of
such subsections.
(e) The Company has not engaged in the past six (6) months in
any discussion with any representative of any corporation or corporations or
other entity regarding the liquidation, dissolution or winding up of the Company
or regarding any Acquisition or Asset Transfer, as those terms are defined in
the Restated Certificate.
3.8 OBLIGATIONS TO RELATED PARTIES. There are no obligations of the
Company to officers, directors, stockholders, or employees of the Company or any
of their respective affiliates other than (a) for payment of salary for services
rendered, (b) reimbursement for reasonable expenses incurred on behalf of the
Company and (c) for other standard employee benefits made generally available to
all employees (including stock option agreements outstanding under any stock
option plan approved by the Board of Directors of the Company). No officer,
director or, to the Company's knowledge, stockholder, or any member of their
immediate families or any of their respective affiliates, are indebted to the
Company or have any direct or indirect ownership interest in any firm or
corporation with which the Company is affiliated or with which the Company has a
business relationship, or any firm or corporation which competes with the
Company, except that officers, directors and/or stockholders of the Company may
own stock in publicly traded companies which may compete with the Company. No
such officer, director or stockholder, or any member of their immediate families
is, directly or indirectly, interested in any material contract with the Company
(other than such contracts as relate to any such person's ownership of capital
stock or other securities of the Company). The Company is not a guarantor or
indemnitor of any indebtedness of any other person, firm or corporation.
3.9 CHANGES. Since September 30, 1999, there has not been:
(a) Any change in the assets, liabilities, financial condition
or operations of the Company from that reflected in the Financial Statements,
other than changes in the ordinary course of business, none of which
individually or in the aggregate has had or is expected to have a material
adverse effect on such assets, liabilities, financial condition or operations of
the Company;
(b) Any resignation or termination of any key officers of the
Company; and the Company, to the best of its knowledge, does not know of the
impending resignation or termination of employment of any such officer;
(c) Any material change, except in the ordinary course of
business, in the contingent obligations of the Company by way of guaranty,
endorsement, indemnity, warranty or otherwise;
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(d) Any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the properties, business or
prospects or financial condition of the Company;
(e) Any waiver by the Company of a valuable right or of a
material debt owed to it;
(f) Any direct or indirect loans made by the Company to any
stockholder, employee, officer or director of the Company, other than advances
made in the ordinary course of business;
(g) Any material change in any compensation arrangement or
agreement with any employee, officer, director or stockholder;
(h) Any declaration or payment of any dividend or other
distribution of the assets of the Company;
(i) Any labor organization activity;
(j) Any debt, obligation or liability incurred, assumed or
guaranteed by the Company, except those for immaterial amounts and for current
liabilities incurred in the ordinary course of business;
(k) Any sale, assignment or transfer of any patents,
trademarks, copyrights, trade secrets or other intangible assets;
(l) Any change in any material agreement to which the Company
is a party or by which it is bound which materially and adversely affects the
business, assets, liabilities, financial condition, operations or prospects of
the Company, including compensation agreements with the Company's employees; or
(m) Any other event or condition of any character that, either
individually or cumulatively, has materially and adversely affected the
business, assets, liabilities, financial condition, operations or prospects of
the Company. For purposes of this subsection (m), a material and adverse effect
shall only be deemed to occur if its monetary impact exceeds, or with the
passage of time, will exceed $100,000.
3.10 TITLE TO PROPERTIES AND ASSETS; LIENS, ETC. The Company has good
and marketable title to its properties and assets, and good title to its
leasehold estates, in each case subject to no mortgage, pledge, lien, lease,
encumbrance or charge, other than (i) those resulting from taxes which have not
yet become delinquent, (ii) minor liens and encumbrances which do not materially
detract from the value of the property subject thereto or materially impair the
operations of the Company and (iii) those that have otherwise arisen in the
ordinary course of business. All facilities, machinery, equipment, fixtures,
vehicles and other properties owned, leased or used by the Company are in good
operating condition and repair and are reasonably fit and usable for the
purposes for which they are being used. The Company is in compliance with all
material terms of each lease to which it is a party or is otherwise bound.
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3.11 INTELLECTUAL PROPERTY. The Company owns or possesses sufficient
legal rights to all trademarks, service marks, trade names, copyrights, trade
secrets and licenses, and to the knowledge of the Company, to all patents,
information and other proprietary rights and processes necessary for or used in
its business as now conducted and as proposed to be conducted, without any known
infringement of the rights of others. There are no outstanding options, licenses
or agreements of any kind relating to the foregoing, nor is the Company bound by
or a party to any options, licenses or agreements of any kind with respect to
the patents, trademarks, service marks, trade names, copyrights, trade secrets,
licenses, information and other proprietary rights and processes of any other
person or entity other than such licenses or agreements arising from the
purchase of "off the shelf" or standard products. To the Company's knowledge,
the Company has not violated or, by conducting its business as proposed, would
not violate any of the patents, trademarks, service marks, trade names,
copyrights or trade secrets or other proprietary rights of any other person or
entity. The Company is not aware that any of its employees is obligated under
any contract (including licenses, covenants or commitments or any nature) or
other agreement, or subject to any judgment, decree or order of any court or
administrative agency, that would interfere with their duties to the Company's
business by the employees of the Company, nor the conduct of the Company's
business as proposed, will, to the Company's knowledge, conflict with or result
in a breach of the terms, conditions or provisions of, or constitute a default
under, any contract, covenant or instrument under which any employee is now
obligated. The Company does not believe it is or will be necessary to utilize
any inventions, trade secrets or proprietary information of any of its employees
made prior to their employment by the Company, except for inventions, trade
secrets or proprietary information that have been assigned to the Company.
3.12 COMPLIANCE WITH OTHER INSTRUMENTS. The Company is not in violation
or default of any term of its Restated Certificate or Bylaws, or of any
provision of any mortgage, indenture, contract, agreement, instrument or
contract to which it is party or by which it is bound or of any judgment,
decree, order, writ, statute, rule or regulation applicable to the Company which
would materially and adversely affect the business, assets, liabilities,
financial condition, operations or prospects of the Company. The execution,
delivery, and performance of and compliance with this Agreement and the
Investors' Rights Agreement, and the issuance and sale of the Shares pursuant
hereto and of the Conversion Shares pursuant to the Restated Certificate, will
not, with or without the passage of time or giving of notice, result in any such
material violation, or be in conflict with or constitute a default under any
such term, or result in the creation of any mortgage, pledge, lien, encumbrance
or charge upon any of the properties or assets of the Company or the suspension,
revocation, impairment, forfeiture or nonrenewal of any permit, license,
authorization or approval applicable to the Company, its business or operations
or any of its assets or properties.
3.13 LITIGATION. There is no action, suit, proceeding or investigation
pending or to the Company's knowledge currently threatened against the Company
that questions the validity of this Agreement and the Investors' Rights
Agreement or the right of the Company to enter into any of such agreements, or
to consummate the transactions contemplated hereby or thereby, or which might
result, either individually or in the aggregate, in any material adverse change
in the assets, condition, affairs or prospects of the Company, financially or
otherwise, or any change in the current equity ownership of the Company, nor is
the Company aware that there is any basis for the foregoing. The foregoing
includes, without limitation, actions pending or threatened (or
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any basis therefor known to the Company) involving the prior employment of any
of the Company's employees, their use in connection with the Company's business
of any information or techniques allegedly proprietary to any of their former
employers, or their obligations under any agreements with prior employers. The
Company is not a party or subject to the provisions of any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality. There is no action, suit, proceeding or investigation by the
Company currently pending or which the Company intends to initiate.
3.14 TAX RETURNS AND PAYMENTS. The Company has timely filed all tax
returns (federal, state and local) required to be filed by it. All taxes shown
to be due and payable on such returns, any assessments imposed, and all other
taxes due and payable by the Company on or before the Closing have been paid or
will be paid prior to the time they become delinquent. The Company has not been
advised (i) that any of its returns, federal, state or other, have been or are
being audited as of the date hereof, or (ii) of any deficiency in assessment or
proposed judgment to its federal, state or other taxes. The Company has no
knowledge of any liability of any tax to be imposed upon its properties or
assets as of the date of this Agreement that is not adequately provided for in
the Financial Statements.
3.15 EMPLOYEES. The Company has no collective bargaining agreements
with any of its employees. There is no labor union organizing activity pending
or, to the Company's knowledge, threatened with respect to the Company. No
employee has any agreement or contract, written or verbal, regarding his
employment. To the Company's knowledge, no employee of the Company, nor any
consultant with whom the Company has contracted, is in violation of any term of
any employment contract, proprietary information agreement or any other
agreement relating to the right of any such individual to be employed by, or to
contract with, the Company because of the nature of the business to be conducted
by the Company; and to the Company's knowledge the continued employment by the
Company of its present employees, and the performance of the Company's contracts
with its independent contractors, will not result in any such violation. The
Company has not received any notice alleging that any such violation has
occurred. No employee of the Company has been granted the right to continued
employment by the Company or to any material compensation following termination
of employment with the Company. The Company is not aware that any officer or key
employee, or that any group of key employees, intends to terminate their
employment with the Company, nor does the Company have a present intention to
terminate the employment of any officer, key employee or group of key employees.
3.16 PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT. Each current
employee, officer and consultant of the Company has executed a Proprietary
Information and Inventions Agreement. To the knowledge of the Company, no
employee is in material violation of his or her Proprietary Information and
Inventions Agreement.
3.17 OBLIGATIONS OF MANAGEMENT. Each officer of the Company is
currently devoting one hundred percent (100%) of his business time to the
conduct of the business of the Company. The Company is not aware that any
officer or key employee of the Company is planning to work less than full time
at the Company in the future.
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3.18 REGISTRATION RIGHTS. Except as required pursuant to the Investors'
Rights Agreement, the Company is presently not under any obligation, and has not
granted any rights, to register (as defined in Section 1 of the Investors'
Rights Agreement) any of the Company's presently outstanding securities or any
of its securities that may hereafter be issued.
3.19 COMPLIANCE WITH LAWS; PERMITS. The Company is not in violation of
any applicable statute, rule, regulation, order or restriction of any domestic
or foreign government or any instrumentality or agency thereof in respect of the
conduct of its business or the ownership of its properties which violation would
materially and adversely affect the business, assets, liabilities, financial
condition, operations or prospects of the Company. No governmental orders,
permissions, consents, approvals or authorizations are required to be obtained
and no registrations or declarations are required to be filed in connection with
the execution and delivery of this Agreement and the issuance of the Shares or
the Conversion Shares, except such as has been duly and validly obtained or
filed, or with respect to any filings that must be made after the Closing, as
will be filed in a timely manner. The Company has all franchises, permits,
licenses and any similar authority necessary for the conduct of its business as
now being conducted by it, the lack of which could materially and adversely
affect the business, properties, prospects or financial condition of the Company
and believes it can obtain, without undue burden or expense, any similar
authority for the conduct of its business as planned to be conducted.
3.20 ENVIRONMENTAL AND SAFETY LAWS. The Company is not in violation of
any applicable statute, law or regulation relating to the environment or
occupational health and safety, and to its knowledge, no material expenditures
are or will be required in order to comply with any such existing statute, law
or regulation.
3.21 OFFERING VALID. Assuming the accuracy of the representations and
warranties of the Purchasers contained in Section 4.2 hereof, the offer, sale
and issuance of the Shares and the Conversion Shares will be exempt from the
registration requirements of the Securities Act of 1933, as amended (the
"SECURITIES ACT"), and will have been registered or qualified (or are exempt
from registration and qualification) under the registration, permit or
qualification requirements of all applicable state securities laws. Neither the
Company nor any agent on its behalf has solicited or will solicit any offers to
sell or has offered to sell or will offer to sell all or any part of the Shares
to any person or persons so as to bring the sale of such Shares by the Company
within the registration provisions of the Securities Act or any state securities
laws.
3.22 DISCLOSURE. Neither this Agreement nor any schedule hereto, nor
any written disclosure document furnished by or on behalf of the Company to the
Purchasers or counsel to the Purchasers (including all documents, agreements,
certificates and instruments delivered in accordance with the terms of this
Agreement) in connection with the transactions contemplated by this Agreement,
when read together, contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained herein
or therein, in light of the circumstances under which they were made, not
misleading; provided, however, that this representation and warranty shall not
apply to any information contained within any of the foregoing relating to
future events or the projected future financial performance of the Company,
including any financial projections or descriptions of potential strategic or
business relationships between the Company and third parties. Any such financial
projections or descriptions of potential strategic or business relationships
which have been provided to the Purchasers were prepared in good faith by the
Company.
9.
13
3.23 SMALL BUSINESS CONCERN. The Company is a "small business" within
the meaning of the Small Business Investment Act of 1958, as amended (the "Small
Business Act"). The information delivered by the Company on Small Business
Administration Forms 480, 652 and 1031 in connection herewith is accurate and
complete. The Company is not ineligible for financing by any Federal licensee
(under the Small Business Act) pursuant to Section 107.720 of Title 13 of the
Federal Regulation. The Company acknowledges that Xxxxxxxxxxx Xxxxxxx Ventures,
L.P. is a Federal licensee under the Small Business Act.
3.24 INVESTMENT COMPANY. The Company is not an "investment company" or
a company "controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended (the "1940 Act").
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each Purchaser hereby represents and warrants to the Company as follows
(such representations and warranties do not lessen or obviate the
representations and warranties of the Company set forth in this Agreement):
4.1 REQUISITE POWER AND AUTHORITY. Purchaser has all necessary power
and authority under all applicable provisions of law to execute and deliver this
Agreement and the Investors' Rights Agreement and to carry out their provisions.
All action on Purchaser's part required for the lawful execution and delivery of
this Agreement and the Investors' Rights Agreement have been or will be
effectively taken prior to the Closing. Upon their execution and delivery, this
Agreement and the Investors' Rights Agreement will be valid and binding
obligations of Purchaser, enforceable in accordance with their terms, except (i)
as limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application affecting enforcement of creditors' rights,
(ii) general principles of equity that restrict the availability of equitable
remedies and (iii) to the extent that the enforceability of the indemnification
provisions of the Investors' Rights Agreement may be limited by applicable laws.
4.2 INVESTMENT REPRESENTATIONS. Purchaser understands that neither the
Shares nor the Conversion Shares have been registered under the Securities Act.
Purchaser also understands that the Shares are being offered and sold pursuant
to an exemption from registration contained in the Securities Act based in part
upon Purchaser's representations contained in the Agreement. Purchaser hereby
represents and warrants as follows:
(a) PURCHASER BEARS ECONOMIC RISK. Purchaser has substantial
experience in evaluating and investing in private placement transactions of
securities in companies similar to the Company so that it is capable of
evaluating the merits and risks of its investment in the Company and has the
capacity to protect its own interests. Purchaser must bear the economic risk of
this investment indefinitely unless the Shares (or the Conversion Shares) are
registered pursuant to the Securities Act, or an exemption from registration is
available. Purchaser understands that the Company has no present intention of
registering the Shares (except as
10.
14
provided for in the Investors' Rights Agreement), the Conversion Shares or any
shares of its Common Stock. Purchaser 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 Purchaser to
transfer all or any portion of the Shares or the Conversion Shares under the
circumstances, in the amounts or at the times Purchaser might propose.
(b) ACQUISITION FOR OWN ACCOUNT. Purchaser is acquiring the
Shares and the Conversion Shares for Purchaser's own account for investment
only, and not with a view towards their distribution.
(c) PURCHASER CAN PROTECT ITS INTEREST. Purchaser represents
that by reason of its, or of its management's, business or financial experience,
Purchaser has the capacity to evaluate the risks and merits of the transactions
contemplated in this Agreement. Further, Purchaser is aware of no publication of
any advertisement in connection with the transactions contemplated in the
Agreement.
(d) ACCREDITED INVESTOR. Purchaser represents that it is an
accredited investor within the meaning of Regulation D under the Securities Act.
(e) RULE 144. Purchaser acknowledges and agrees that the
Shares, 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. Purchaser 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 Company, 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.
(f) RESIDENCE. If the Purchaser is an individual, then the
Purchaser resides in the state or province identified in the address of the
Purchaser set forth on Exhibit A; if the Purchaser is a partnership,
corporation, limited liability company or other entity, then the office or
offices of the Purchaser in which its investment decision was made is located at
the address or addresses of the Purchaser set forth on Exhibit A.
4.3 TRANSFER RESTRICTIONS. Each Purchaser acknowledges and agrees that
the Shares and, if issued, the Conversion Shares are subject to restrictions on
transfer as set forth in the Investors' Rights Agreement and the Company's
Bylaws.
5. CONDITIONS TO CLOSING
5.1 CONDITIONS TO PURCHASERS' OBLIGATIONS AT EACH CLOSING. Purchasers'
obligations to purchase the Shares at each Closing are subject to the
satisfaction, at or prior to each such Closing, of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES TRUE; PERFORMANCE OF
OBLIGATIONS. With respect to the First Closing, the representations and
warranties made by the Company in Section 3 hereof shall be true and correct in
all material respects as of such Closing Date with the
11.
15
same force and effect as if they had been made as of such Closing Date, and the
Company shall have performed all obligations and conditions herein required to
be performed or observed by it on or prior to such Closing. With respect to any
Subsequent Closing, the Company shall have delivered an updated Schedule of
Exceptions, and the representation and warranties made by the Company in Section
3 hereof, as modified by such revised Schedule of Exceptions, shall be true and
correct in all material respects as of such Closing Date, and the Company shall
have performed all obligations and conditions herein required to be performed or
observed by it on or prior to such Closing.
(b) LEGAL INVESTMENT. On the Closing Date, the sale and
issuance of the Shares and the proposed issuance of the Conversion Shares shall
be legally permitted by all laws and regulations to which Purchasers and the
Company are subject.
(c) CONSENTS, PERMITS, AND WAIVERS. The Company shall have
obtained any and all consents, permits and waivers necessary or appropriate for
consummation of the transactions contemplated by the Agreement and the
Investors' Rights Agreement (except for such as may be properly obtained
subsequent to the Closing).
(d) FILING OF RESTATED CERTIFICATE. The Restated Certificate
shall have been filed with the Secretary of State of the State of Delaware.
(e) INVESTORS' RIGHTS AGREEMENT. An Investors' Rights
Agreement, substantially in the form attached hereto as Exhibit C, shall have
been executed and delivered by the parties thereto.
(f) LEGAL OPINION. The Purchasers shall have received from
legal counsel to the Company an opinion addressed to them, dated as of the
Closing Date, in a form reasonably acceptable to the Purchasers.
(g) PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings in connection with the transactions contemplated at the Closing
hereby and all documents and instruments incident to such transactions shall be
reasonably satisfactory in substance and form to the Purchasers and their
special counsel, and the Purchasers and their special counsel shall have
received all such counterpart originals or certified or other copies of such
documents as they may reasonably request.
(h) COMPLIANCE WITH SECURITIES LAWS. All federal and state
securities filings required in connection with the transactions contemplated by
this Agreement shall have been made or obtained except those filings which may
properly be made or obtained after Closing.
(i) NO MATERIAL ADVERSE CHANGE. There shall not have been any
material adverse change in the business, financial condition or prospects of the
Company.
(j) RESERVATION OF CONVERSION SHARES. The Conversion Shares
shall be duly authorized and reserved for issuance upon the conversion of the
Series C Stock.
12.
16
(k) MANAGEMENT RIGHTS LETTER. A Management Rights Letter,
substantially in the form attached hereto as Exhibit D, shall have been executed
and delivered by the parties thereto.
(l) OFFICER'S CERTIFICATE. The Purchasers shall have received
a certificate of the President of the Company certifying that the conditions in
this Section 5.1(a), (c) and (d) have been satisfied as of the date of the First
Closing and any Subsequent Closing.
(m) SBA FORMS. The Company shall have completed, executed, and
delivered to each Investor a Size Status Declaration on SBA Form 480, an
Assurance of Compliance on SBA Form 652 and an SBA Sideletter, and shall have
completed and delivered to each Investor Parts A and B of a Portfolio Financing
Report on SBA Form 1031.
(n) DIRECTOR AND OFFICER INSURANCE. The Company shall obtain
Director and Officer Insurance in an amount not less than $3,000,000 within 60
days of the Closing Date.
5.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The Company's obligation
to issue and sell the Shares at each Closing is subject to the satisfaction, on
or prior to such Closing, of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES TRUE. The representations
and warranties made by the Purchasers in Section 4 hereof shall be true and
correct in all material respects at the date of each Closing, with the same
force and effect as if they had been made on and as of said date.
(b) PERFORMANCE OF OBLIGATIONS. Purchasers shall have
performed and complied with all agreements and conditions herein required to be
performed or complied with by Purchasers on or before each Closing.
(c) FILING OF RESTATED CERTIFICATE. The Restated Certificate
shall have been filed with the Secretary of State of the State of Delaware.
(d) INVESTORS' RIGHTS AGREEMENT. An Investors' Rights
Agreement, substantially in the form attached hereto as Exhibit C, shall have
been executed and delivered by the Purchasers.
(e) CONSENTS, PERMITS, AND WAIVERS. The Company shall have
obtained any and all consents, permits and waivers necessary or appropriate for
consummation of the transactions contemplated by the Agreement and the
Investors' Rights Agreement (except for such as may be properly obtained
subsequent to the Closing).
6. MISCELLANEOUS
6.1 GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of Colorado without regard to its
conflict-of-laws rules; provided, however, that all matters of corporate law
shall be governed by Delaware General Corporation Law.
13.
17
6.2 SURVIVAL. The representations, warranties, covenants and agreements
made herein shall survive any investigation made by any Purchaser and the
closing of the transactions contemplated hereby. All statements as to factual
matters contained in any certificate or other instrument delivered by or on
behalf of the Company pursuant hereto in connection with the transactions
contemplated hereby shall be deemed to be representations and warranties by the
Company hereunder solely as of the date of such certificate or instrument.
6.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto and shall inure to the benefit of and be enforceable by each
person who shall be a holder of the Shares from time to time.
6.4 ENTIRE AGREEMENT. This Agreement, the Exhibits and Schedules
hereto, including the Investors' Rights Agreement, and the other documents
delivered pursuant hereto constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof and no party
shall be liable or bound to any other in any manner by any representations,
warranties, covenants and agreements except as specifically set forth herein and
therein.
6.5 SEVERABILITY. In case any provision of the Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
6.6 AMENDMENT AND WAIVER.
(a) This Agreement may be amended or modified only upon the
written consent of the Company and holders of a majority of the Shares (treated
as if converted and including any Conversion Shares into which the Shares have
been converted that have not been sold to the public).
(b) The obligations of the Company and the rights of the
holders of the Shares and the Conversion Shares under the Agreement may be
waived only with the written consent of the holders of a majority of the Shares
(treated as if converted and including any Conversion Shares into which the
Shares have been converted that have not been sold to the public).
6.7 NOTICES. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (i) upon personal delivery to the
party to be notified; (ii) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next business
day; (iii) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid; or (iv) one (1) business 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 Company at the address as set forth on the signature page hereof and to
Purchaser at the address as set forth on Exhibit A hereto or at such other
address as the Company or Purchaser may designate by ten (10) days advance
written notice to the other parties hereto.
6.8 EXPENSES. The Company shall pay all costs and expenses that it
incurs with respect to the negotiation, execution, delivery and performance of
the Agreement. The Company
14.
18
shall reimburse the reasonable fees and expenses of one special counsel to the
Purchasers and one special counsel to the holders of the Company's Series A
Preferred Stock (the "Series A Special Counsel") incurred in connection with the
negotiation, execution, delivery and performance of this Agreement and the
transactions contemplated thereby, provided that the amount to be reimbursed to
the Series A Special Counsel shall not exceed $3,500.
6.9 ATTORNEYS' FEES. In the event that any dispute among the parties to
this Agreement should result in litigation, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.
6.10 TITLES AND SUBTITLES. The titles of the sections and subsections
of the Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
6.11 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
6.12 BROKER'S FEES. Each party hereto represents and warrants that no
agent, broker, investment banker, person or firm acting on behalf of or under
the authority of such party hereto is or will be entitled to any broker's or
finder's fee or any other commission directly or indirectly in connection with
the transactions contemplated herein. Each party hereto further agrees to
indemnify each other party for any claims, losses or expenses incurred by such
other party as a result of the representation in this Section 6.12 being untrue.
6.13 EXCULPATION AMONG PURCHASERS. Each Purchaser acknowledges that it
is not relying upon any person, firm, or corporation, other than the Company and
its officers and directors, in making its investment or decision to invest in
the Company. Each Purchaser agrees that no other Purchaser nor the respective
controlling persons, officers, directors, partners, agents, or employees of any
such Purchaser shall be liable for any action heretofore or hereafter taken or
omitted to be taken by any of them in connection with the Shares and Conversion
Shares.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
15.
19
IN WITNESS WHEREOF, the parties hereto have executed the SERIES C
PREFERRED STOCK PURCHASE AGREEMENT as of the date set forth in the first
paragraph hereof.
COMPANY: PURCHASERS:
PETROLEUM PLACE, INC. /s/
----------------------------------
By: /s/ Xxxx X. Xxxxxxx By:
----------------------------- -------------------------------
Xxxx X. Xxxxxxx
President and Chief Executive Officer Name:
-----------------------------
Title:
----------------------------
0000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000 Address:
Xxxxxx, XX 00000 --------------------------
----------------------------------
SERIES C PREFERRED STOCK PURCHASE AGREEMENT
20
EXHIBIT A
SCHEDULE OF PURCHASERS
FIRST CLOSING
NAME AND ADDRESS SHARES AGGREGATE PURCHASE PRICE
---------------- -------- ------------------------
Anschutz Family Investment 15,879 $ 938,766.48
Company LLC
A.C.E. Investment Partnership 1,036 61,248.32
Channel P2, LLC 138,363 8,180,000.00
Channel P2 Group, LLC 13,870 820,000.00
PCG Ventures LLC 33,830 2,000,029.60
Cornerstone Ventures, LP 16,915 1,000,014.80
BV Ventures, Ltd. 16,915 1,000,014.80
Damac Technology Partners, LP 50,744 2,999,985.28
Damac Investors (XV) Inc. 16,915 1,000,014.80
Damac Investors (XVI) Inc. 15,225 900,102.00
W. Xxxx Xxxxxx 169 9,991.28
Xxxxxx X. Xxxxxxx 845 49,956.40
J. Xxxxxx Xxxxxxx 676 39,965.12
Founders III, LLC 33,830 2,000,029.60
The Xxxxxxx Sachs Group, Inc. 33,830 2,000,029.60
Xxxxxxxx Communications and 16,915 1,000,014.80
Information Fund, Inc.
Xxxxxxxx New Technologies Fund, 68,505 4,050,015.60
Inc.
Xxxxxxxx Investment Opportunities 16,069 949,999.28
(Master) Fund NTV Portfolio
NIG-Petro, Ltd. 16,914 999,955.68
NeoCarta Ventures, L.P. 60,893 3,599,994.16
NeoCarta Scout Fund, L.L.C 6,766 400,005.92
Partech U.S. Partners IV LLC 16,915 1,000,014.80
Axa U.S. Growth Fund LLC 11,840 699,980.80
Parallel Capital I LLC 25,372 1,499,992.64
Parallel Capital II LLC 25,372 1,499,992.64
21
NAME AND ADDRESS SHARES AGGREGATE PURCHASE PRICE
---------------- -------- ------------------------
Double Black Diamond II LLC 3,383 200,002.96
45th Parallel LLC 1,692 100,031.04
Sequel Limited Partnership II 16,365 967,498.80
Sequel Entrepreneurs Fund II, LP 550 32,516.00
Xxxxxxxxxxx Xxxxxxx Ventures 33,830 2,000,029.60
Xxxxxx Xxxxxxx 2,960 174,995.20
Xxxxxxx X. Xxxxxxx 1,268 74,964.16
WB Internet Fund 2000, LLC 5,767 340,945.04
WB Internet Fund 2000 QP, LLC 6,920 409,110.40
Winfield Capital Corp. 25,372 1,499,992.64
Xxxxx Xxxxx 3,384 200,062.08
Xxxx X. Xxxxxxx 1,691 99,971.92
Xxxxx X. Xxxxxxxx 1,691 99,971.92
Xxxxxx Xxxxxxx 846 50,015.52
Xxxx XxxXxxxxx 845 49,956.40
Total 761,167 $45,000,178.08
A-2
22
SUBSEQUENT CLOSINGS
NAME AND ADDRESS SHARES AGGREGATE PURCHASE PRICE
---------------- -------- ------------------------
Chesapeake Energy Corporation 33,830 $2,000,029.60
Hydrocarbon Investors, LLC 2,706 159,978.72
Oxy Energy Services, Inc. 33,829 1,999,970.48
Ocean Energy Inc. 17,000 1,005,040.00
Xxxxxxx Xxxxxxxx 425 25,126.00
Xxxx X. Xxxxxxxx 425 25,126.00
Unocal Capital, Inc. 50,744 2,999,985.28
El Paso Field Services Company 42,286 2,499,948.32
Online Energy Solutions, Inc. 33,829 1,999,970.48
Forest Oil Corporation 16,238 19,982.56
Xxxxx X. Xxxxx 338 19,982.56
Xxxxxx X. Xxxxxxx 338 19,982.56
Xxx Xxxxx, Inc. 16,915 1,000,014.80
Total
A-3
23
EXHIBIT B
RESTATED CERTIFICATE OF INCORPORATION
24
EXHIBIT C
INVESTORS' RIGHTS AGREEMENT
