AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into as of April
8, 2001, by and between RateXchange Corporation, a Delaware corporation ("RTX")
and BL Partners LLC, a California limited liability company ("BLP").
WHEREAS, RTX and BLP wish to enter into this Agreement for the purpose
of creating a broker-dealer entity and to combine each party's knowledge,
experience and business contacts; and
WHEREAS, to accomplish this purpose, RTX has formed RMG Partners
Corporation, a Delaware corporation ("RMGP"), as a wholly owned subsidiary and
has contributed to the capital thereof $300,000 cash and Two Million Two Hundred
Thousand (2,200,000) shares of RTX stock (the "RTX Capital Shares"); and
WHEREAS, Xxxxxx Xxxxxxxx ("Xxxxxxxx") and Xxxx Xxxxxx ("Burger") are
the sole members of BLP, and in consideration of the option herein granted to
BLP, and pursuant to the Bylaws of RMGP (the "Bylaws"), Xxxxxxxx is the Chairman
and Chief Executive Officer and a member of the Board of Directors of RMGP and
Burger is the President and a member of the Board of Directors of RMGP; and
WHEREAS, the parties now desire to enter into this Agreement to provide
for the management and control of RMGP and the RTX Capital Shares by Xxxxxxxx,
Burger and BLP all under the terms and conditions described below.
NOW, THEREFORE, in consideration of the premises and for good and other
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
Section 1. BLP Option to Purchase RMGP Interest. Upon BLP's written
notice to RTX at any time after the first anniversary of the date hereof, BLP
shall have the right to purchase all of RTX's interest in RMGP (the "RMGP
Interest"), except for the portion of the RTX Capital Shares which are not
"Controlled Shares", as defined in the Bylaws, and as more particularly
described on Schedule 1 attached hereto and made a part hereof, on payment to
RTX of the purchase price of $300,000. Upon the purchase of the RMGP Interest,
the Chairman of RMGP shall forfeit the right to attain any further Controlled
Shares. Should Xxx Xxxxxxxx no longer be Chairman or CEO of RTX , BLP may
exercise its option within the first year.
Section 2. Automatic BLP Purchase of RMGP Interest. Notwithstanding the
limitations in Section 1, above, upon the occurrence of a Change of Control as
defined in Section 9.12 of the Bylaws, and the payment to RTX of the purchase
price of $300,000, BLP shall automatically acquire all of the RMGP Interest,
including those RTX Capital Shares that are not Controlled Shares.
Section 3. Registration Rights. RTX shall seek "shelf registration" of
the RTX Capital Shares via piggyback registration upon the first public offering
of RTX shares following the date hereof.
Section 4. Representations and Warranties of BLP. BLP represents and
warrants to RTX that:
(a) BLP is a limited liability company duly organized, validly
existing and in good standing under the laws of the state of California, and has
the corporate power to own its properties and assets, and consummate the
transactions contemplated by this Agreement.
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(b) The execution and delivery of this Agreement, and the
performance of the transactions contemplated hereby and thereby, have been duly
authorized and approved by all necessary corporate action of BLP. BLP has full
corporate power to enter into and perform this Agreement, and the transactions
contemplated hereby and thereby. This Agreement constitutes the valid and
binding agreement of BLP enforceable in accordance with its terms.
Section 5. Representations and Warranties of RTX. RTX represents and
warrants to BLP that:
(a) RTX is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, and has the corporate
power to own its properties and assets, conduct its business as it is now being
conducted, and to perform all of its duties and obligations under this
Agreement.
(b) The execution and delivery of this Agreement, and the
performance of the transactions contemplated hereby and thereby, have been duly
authorized and approved by all necessary corporate action of RTX. RTX has full
corporate power to enter into and perform this Agreement and the transactions
contemplated hereby and thereby. This Agreement constitutes a valid and binding
agreement of RTX enforceable in accordance with its terms.
(c) RTX is the legal and beneficial owner of and has good
title to all of the issued and outstanding shares of RMGP (the "Shares"); the
Shares are validly issued, fully paid and non assessable and are registered in
the name of RTX; none of the Shares is subject to any claim, lien, charge,
security interest or other encumbrance of any kind whatsoever.
Section 6. Covenants and Further Agreements.
6.1 Brokers and Consultants. RTX and BLP represent and warrant to one
another that the execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby will not give rise to any valid claim
against either for a finder's fee, brokerage commission, or other like payment.
6.2 Reliance Upon and Survival of Representations and Warranties.
Notwithstanding any investigation at any time conducted by any of the parties
hereto, each of the parties hereto shall be entitled to rely on the
representations and warranties of the other party set forth herein or in any
schedule, exhibit, or other document delivered pursuant hereto.
6.3 Further Assurances. The parties hereto agree to execute and deliver
or cause to be executed and delivered at reasonable times and places such
additional instruments as the other party hereto may reasonably request for the
purpose of carrying out this Agreement.
6.4 Indemnification.
(a) BLP covenants and agrees to indemnify and hold harmless
RTX from and against any loss, claim, liability, obligation or expense
(including reasonable attorneys' fees) (i) incurred or sustained by RTX on
account of any misrepresentation or breach of any warranty, covenant, or
agreement of BLP contained in this Agreement or made in connection herewith, and
(ii) incurred or sustained on account of the non-fulfillment by BLP of any of
the conditions or covenants of this Agreement or contemplated hereby.
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(b) RTX covenants and agrees to indemnify and hold harmless
BLP from and against any loss, claim, liability, obligation or expense
(including reasonable attorneys' fees) (i) incurred or sustained by BLP on
account of any misrepresentation or breach of any warranty, covenant, or
agreement of RTX contained in this Agreement or made in connection herewith, and
(ii) incurred or sustained on account of the non-fulfillment by RTX of any of
the conditions or covenants of this Agreement or contemplated hereby.
(c) If any claim is asserted against either party for which
indemnification may be sought under the provisions of this Section, the party
claiming indemnification shall promptly notify the other party of such claim and
thereafter shall permit such other party at its expense to participate in the
negotiation and settlement of any such claim and to join in the defense of any
legal action arising therefrom.
6.5 Expenses. Each party shall pay its own expenses and costs,
including without limitation attorneys' fees , incurred in connection with the
consummation of this Agreement and the transactions contemplated hereby.
Section 7. Notices. Any notice or other communication required or
permitted hereunder shall be sufficiently given if sent by certified mail,
postage prepaid, addressed as follows:
(a) If to BLP, addressed to: BL Partners LLC
Attention: Xxxxxx Xxxxxxxx
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
(b) If to RTX, addressed to: RateXchange Corporation
Attention: Xxx Xxxxxxxx
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Any such notice or communication shall be deemed to have been given as of the
date so mailed.
Section 8. Entire Agreement. The schedules and exhibits hereto and the
certificates and other documents to be furnished in connection herewith are an
integral part of this Agreement. All understandings and agreements between the
parties are merged into this Agreement which fully and completely expresses
their agreements and supersedes any prior agreement or understanding relating to
the subject matter, and no party has made any representations or warranties,
express or implied, not herein expressly set forth. This Agreement shall not be
changed or terminated except by written amendment signed by the parties hereto.
Section 9. Attorneys' Fees. In the event of any controversy, claim or
dispute between the parties hereto arising out of or relating to this Agreement,
any of its Schedules or the breach thereof, the prevailing party shall be
entitled to recover from the losing party reasonable expenses, attorneys' fees
and costs.
Section 10. Specific Performance; Injunctive Relief. It is understood
and agreed that money damages would not be sufficient remedy for any breach of
this Agreement by either party, and that each party shall be entitled to
equitable relief, including injunction and specific performance, without the
necessity of proving damages, posting any bond or other security, as a remedy
for such breach. Such
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remedies shall not be deemed to be the exclusive remedies for a breach of this
Agreement, but shall be cumulative and in addition to all other remedies
available at law or in equity.
Section 11. Governing Law. This Agreement and the agreements
contemplated hereby shall be construed in accordance with and governed by the
laws of the State of California.
Section 12. Counterparts. This Agreement may be executed in several
counterparts, each of which may be delivered by facsimile, and all of which
taken together shall constitute one instrument.
Section 13. Severability. If any clause, provision or section of this
Agreement shall be held illegal or invalid by any court, the illegality or
invalidity of such clause, provision or section shall not affect the remainder
of this Agreement which shall be construed and enforced as if such illegal or
invalid clause, provision or section had not been contained in this Agreement.
If any agreement or obligation contained in this Agreement is held to be in
violation of law, then such agreement or obligation shall be deemed to be the
agreement or obligation of the respective party hereto only to the extent
permitted by law.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their representative duly authorized officers, all as of the day and
year first above written.
BL PARTNERS LLC,
a California limited liability company
By Asonje Management Corporation,
a California corporation
Its Manager
By: ___________________________________
Name: _____________________________
Title: ____________________________
Subject to RateXchange Corporation Board of Directors Approval:
RATEXCHANGE CORPORATION,
a Delaware corporation
By: ___________________________________
Name: _____________________________
Title: ____________________________
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Schedule 1
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