Exhibit B
STOCK DISTRIBUTION AGREEMENT
THIS STOCK DISTRIBUTION AGREEMENT (the "Agreement"), dated effective as of
May 31, 2003, is made and entered into by and among ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, an
individual ("▇▇▇▇▇▇▇▇"), ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, an individual ("▇▇▇▇▇▇▇"), ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, an individual ("▇▇▇▇▇▇▇") and ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, an individual ("▇▇▇▇")
(individually, a "Party" and collectively, the "Parties").
W I T N E S S E T H
WHEREAS, the Parties plan to execute a Stock Purchase Agreement ("Stock
Purchase Agreement") between the Parties and Westar Industries, Inc. (fka Westar
Capital, Inc.), a Kansas corporation ("Westar"), for the purchase of 3,174,265
shares of Class A Common Stock (the "Common Stock") of Onsite Energy Corporation
("Onsite") and 649,120 shares of Onsite's Series C Convertible Preferred Stock
(the "Preferred Stock"). (The Common Stock and the Preferred Stock collectively
shall be referred to herein as the "Onsite Stock.")
WHEREAS, the Parties desire to the have the Onsite Stock distributed to
them individually.
WHEREAS, the Parties desire to agree to certain other matters related to
the purchase of the Onsite Stock.
NOW, THEREFORE, for and in consideration of the premises and of the mutual
representations, warranties, covenants, and agreements set forth in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. CONTEMPLATED TRANSACTIONS AND CLOSING.
1.1. Purchase of Onsite Stock. Concurrent with closing of the Stock
Purchase Agreement, the Parties will deliver to the Secretary of Onsite an
executed copy of the Stock Purchase Agreement, the Onsite Stock (together with
all applicable Stock Powers Separate From Certificate or other applicable
transfer documents) and a letter signed by the Parties and in a form acceptable
to the Secretary instructing that upon receipt of the Onsite Stock, the share
certificates representing the Onsite Stock should be immediately cancelled and
new certificates issued to the Parties representing the following shares of
Onsite Stock:
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Parties Shares of Common Stock Shares of Preferred Stock
------------- ---------------------------- ------------------------------
▇▇▇▇▇▇▇▇ 1,622,403 331,773
▇▇▇▇▇▇▇ 1,122,749 229,596
▇▇▇▇▇▇▇ 276,278 56,497
▇▇▇▇ 152,835 31,254
------------- ---------------------------- ------------------------------
Total Shares 3,174,265 649,120
------------- ---------------------------- ------------------------------
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1.2. Consideration for Onsite Common and Preferred Stock. In consideration
of the purchase in Section 1.1, prior to the Closing specified in Section 2 of
the Stock Purchase Agreement, the Parties shall pay to Westar in immediately
available funds as follows:
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Applicable Portion of
Parties Purchase Price Owed:
---------------------- -------------------------------------------
▇▇▇▇▇▇▇▇ $ 69,000
▇▇▇▇▇▇▇ $ 47,750
▇▇▇▇▇▇▇ $ 11,750
▇▇▇▇ $ 6,500
---------------------- ------------------------------------------
Purchase Price $ 135,000
---------------------- ------------------------------------------
1.3. The Closing; Closing Date. The transactions contemplated hereby shall
be consummated at a closing (the "Closing"), which shall be at the time and
place specified in the Stock Purchase Agreement.
2. REPRESENTATIONS AND WARRANTIES OF PARTIES.
Each Party individually represents and warrants that it is compliance with all
of the Buyers' representations and warranties as stated in the Stock Purchase
Agreement, and that it will fully comply with all of the terms and conditions of
that same agreement.
3. RIGHTS TRANSFERRED TO BUYERS RELATED TO REGISTRATION RIGHTS, PRE-EMPTIVE
RIGHTS AND RIGHTS OF SERIES C SHARES.
The Parties acknowledge that certain special rights (collectively, the "Special
Rights") will be assigned and transferred to the Parties in conjunction with
acquisition of the Onsite Stock from Westar by the Parties, including without
limitation certain registration rights and pre-emptive rights appurtenant to the
Common Stock (as identified and contained in that certain Registration Rights
Agreement dated as of October 28, 1997, between Onsite and Westar) and certain
rights appurtenant to the Preferred Stock (as identified and contained in that
certain Certificate of Designations of Series C Convertible Preferred Stock of
Onsite Energy Corporation dated October 23, 1997). Special Rights do not include
the right to vote or otherwise deal with the Onsite Stock as permitted by the
stock certificate, the bylaws of Onsite or elsewhere in this Agreement.
As part of the consideration between the parties for this Agreement, for the
additional consideration of $10, in hand paid from ▇▇▇▇▇▇▇▇ to each of the other
Parties to this Agreement, and for other valuable consideration, the receipt and
sufficiency of which is acknowledged and warranted by each Party, each of
Sperberg, Blevins, ▇▇▇▇ and ▇▇▇▇▇▇▇ agree as follows with respect to the Special
Rights:
3.1. Assignment of Special Rights. ▇▇▇▇▇▇▇, ▇▇▇▇ and ▇▇▇▇▇▇▇ irrevocably
assign and transfer to ▇▇▇▇▇▇▇▇, and irrevocably appoint ▇▇▇▇▇▇▇▇ as their agent
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and attorney-in-fact for, the Special Rights contained in the Onsite Stock being
purchased by each individual. The purpose and intent of this paragraph is that
▇▇▇▇▇▇▇▇ shall be the sole person with authority to exercise or otherwise
control and administer any of the Special Rights appurtenant to all of the
Onsite Stock being purchased from Westar pursuant to that certain Stock Purchase
Agreement dated as of May 31, 2003.
3.2. Exercise of Special Rights. The authority assigned and transferred in
subparagraph 3.1 above includes without limitation the authority of ▇▇▇▇▇▇▇▇ in
his sole discretion, on behalf of himself, ▇▇▇▇▇▇▇, ▇▇▇▇ and ▇▇▇▇▇▇▇, after
consultation among the Parties but not subject to such consultation or any
consensus among the Parties, to: (a) exercise any Special Rights; (b) eliminate
or give up any Special Rights; and/or (c) reduce, amend (including the amendment
of the Certificates of Designation), convert revise, or change any Special
Rights with Onsite.
3.3. Restrictive Legend. The assignment and transfer of the Special Rights
contained in subparagraph 3.1 above shall be binding upon the parties and each
of their respective heirs and personal representatives, as well as any and all
permitted successors, transferees and assigns of each Party's Onsite Stock. Each
Party acknowledges and agrees that each stock certificate received by such Party
pursuant to the Stock Purchase Agreement shall be stamped or otherwise imprinted
with the following legend:
THIS SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THAT CERTAIN
STOCK DISTRIBUTION AGREEMENT DATED AS OF MAY 31, 2003, AMONG ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ AND ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, AND
THE TERMS AND CONDITIONS CONTAINED IN SUCH AGREEMENT.
4. MISCELLANEOUS.
4.1. Entire Agreement. This Agreement and the schedules and other documents
referred to herein constitute the entire agreement among the parties and no
party shall be liable or bound to any other party in any manner by any
warranties, representations, or covenants except as specifically set forth
herein or therein.
4.2. Survival of Warranties. The warranties, representations and covenants
of the Parties, jointly and severally, contained in or made pursuant to this
Agreement shall survive the execution and delivery of this Agreement.
4.3. Successors and Assigns. Except as otherwise provided herein, 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. 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.
4.4. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
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4.5. Counterparts. This Agreement may be executed in one or more
counterparts, each of which may be deemed an original, but all of which together
shall constitute one and the same instrument. This Agreement may be executed by
a Party and sent to the other Parties via facsimile transmission and the
facsimile transmitted copy shall have the same integrity, force and effect as an
original document.
4.6. Title 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.
4.7. Notices. All notices or other communications required hereunder shall
be in writing and shall be sufficient in all respects and shall be deemed
delivered after 5 days if sent via registered or certified mail, postage
prepaid; the next day if sent by overnight courier service; or one business day
after transmission, if sent by facsimile, to the following:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
c/o Onsite Energy Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
c/o Onsite Energy Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
c/o Onsite Energy Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
c/o Onsite Energy Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Any Party hereto may change its address for purposes hereof by notice to all
other Parties hereto.
4.8. Dispute Resolution. No Party to this Agreement shall be entitled to
take legal action with respect to any dispute relating hereto until it has
complied in good faith with the following alternative dispute resolution
procedures. This Section shall not apply to the extent it is deemed necessary to
take legal action immediately to preserve a Party's adequate remedy.
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4.8.1. Negotiation. The Parties shall attempt promptly and in good faith to
resolve any dispute arising out of or relating to this Agreement, through
negotiations between representatives who have authority to settle the
controversy. Any Party may give the other party written notice of any such
dispute not resolved in the normal course of business. Within 20 days after
delivery of the notice, representatives of both Parties shall meet at a mutually
acceptable time and place, and therafter as often as they reasonably deem
necessary, to exchange information and to attempt to resolve the dispute, until
the parties conclude that the dispute cannot be resolved through unassisted
negotiation. Negotiations extending sixty days after notice shall be deemed at
an impasse, unless otherwise agreed by the Parties.
If a negotiator intends to be accompanied at a meeting by an attorney, the
other negotiator(s) shall be given at least three working days' notice of such
intention and may also be accompanied by an attorney. All negotiations pursuant
to this clause are confidential and shall be treated as compromise and
settlement negotiations for purpose of the Federal and state Rules of Evidence.
4.8.2. ADR Procedure. If a dispute with more than $20,000.00 at issue has
not been resolved within 60 days of the disputing Party's notice, a party
wishing resolution of the dispute ("Claimant") shall initiate assisted
Alternative Dispute Resolution ("ADR") proceedings as described in this Section.
Once the Claimant has notified the other ("Respondent") of a desire to initiate
ADR proceedings, the proceedings shall be governed as follows: By mutual
agreement, the Parties shall select the ADR method they wish to use. That ADR
method may include arbitration, mediation, mini-trial, or any other method which
best suits the circumstances of the dispute. The Parties shall agree in writing
to the chosen ADR method and the procedural rules to be followed within 30 days
after receipt of notice of intent to initiate ADR proceedings. To the extent the
Parties are unable to agree on procedural rules in whole or in part, the current
Center for Public Resources ("CPR") Model Procedure for Mediation of Business
Disputes, CPR Model Mini-trial Procedure, or CPR Commercial Arbitration
Rules--whichever applies to the chosen ADR method--shall control, to the extent
such rules are consistent with the provisions of this Section. If the Parties
are unable to agree on an ADR method, the method shall be arbitration.
The Parties shall select a single Neutral third party to preside over the
ADR proceedings, by the following procedure: Within 15 days after an ADR method
is established, the Claimant shall submit a list of five acceptable Neutrals to
the Respondent. Each Neutral listed shall be sufficiently qualified, including
demonstrated neutrality, experience and competence regarding the subject matter
of the dispute. A Neutral who is an attorney or former judge shall be deemed to
have adequate experience. None of the Neutrals may be present or former
employees, attorneys, or agents of either party. The list shall supply
information about each Neutral, including address, and relevant background and
experience (including education, employment history and prior ADR assignments).
Within 15 days after receiving the Claimant's list of Neutrals, the Respondent
shall select one Neutral from the list, if at least one individual on the list
is acceptable to the Respondent. If none on the list are acceptable to the
Respondent, the Respondent shall submit a list of five Neutrals, together with
the above background information, to the claimant. Each of the Neutrals shall
meet the conditions stated above regarding the Claimant's Neutrals. Within 15
days after receiving the Respondent's list of Neutrals, the Claimant shall
select one Neutral, if at least one individual on the list is acceptable to the
Respondent. If none on the list are acceptable to the Claimant, then the Parties
shall request assistance from the Center for Public Resources, Inc., to select a
Neutral.
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The ADR proceeding shall take place within 30 days after the Neutral has
been selected. The Neutral shall issue a written decision within 30 days after
the ADR proceeding is complete. Each Party shall be responsible for an equal
share of the costs of the ADR proceeding. The Parties agree that any applicable
statute of limitations shall be tolled during the pendency of the ADR
proceedings, and no legal action may be brought in connection with this
Agreement during the pendency of an ADR proceeding.
The Neutral's written decision shall become final and binding on the
Parties, unless a Party objects in writing within 30 days of receipt of the
decision. The objecting Party may then file a lawsuit in any court allowed by
this Agreement. The Neutral's written decision shall be admissible in the
objecting Party's lawsuit.
4.9. Amendments and Waivers. Any term of this Agreement may be amended and
the observance of any term of this Agreement may be waived (either generally or
in a particular instance and either retroactively or prospectively), only with
the written consent of the Parties. Any amendment or waiver effected in
accordance with this paragraph shall be binding upon the Parties, its successors
or assigns, and each future holder of such securities and the Party. A waiver by
any Party hereto of a default in the performance of this Agreement shall not
operate as a waiver of any future or other default, whether of a like or
different kind.
4.10. Severability. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, such provision shall be excluded from
this Agreement and the Parties shall use their efforts to substitute provisions
of substantially the same effect. The balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
4.11. Counterparts; Signatures. This Agreement may be executed in one or
more counterparts, each of which may be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement may be
executed by a Party and sent to the other Parties via facsimile transmission and
the facsimile transmitted copy shall have the same integrity, force and effect
as an original document.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first above written.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, an individual ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, an individual
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇, an individual ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, an individual
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