Exhibit 2.3
GUARANTY AGREEMENT
The undersigned (the "Guarantors"), being all of the members of Houston
Energy Services Company, L.L.C., a Texas limited liability company (the
"Seller"), expect to benefit from the consummation of the transactions
contemplated by that certain Asset Purchase Agreement, of even date herewith,
between Commerce Energy, Inc., a California corporation (the "Buyer"), and the
Seller (the "Asset Purchase Agreement") and the Ancillary Agreements.
Accordingly, in order to induce the Buyer to enter into the Asset Purchase
Agreement and the Ancillary Agreements and perform its obligations thereunder,
the Guarantors hereby jointly, severally and irrevocably guarantee to the Buyer,
its successors and assigns, the prompt and full discharge of all indemnity
obligations of the Seller under Section 6.1(a) of the Asset Purchase Agreement
(the "Obligations), when and as the same shall become due and payable or
performable, in accordance with the respective terms and provisions thereof,
subject to the limitations hereinafter set forth. To the extent that the Seller
shall fail to timely make any indemnification payment required to be paid by the
Seller under Section 6.1(a) of the Asset Purchase Agreement, the Guarantors
hereby jointly, severally and irrevocably agree to pay the full unpaid amount
due to the applicable indemnified parties. The Guarantors shall also be liable
for the reasonable attorneys' fees and expenses of any indemnified party's
external counsel incurred in any effort to collect or enforce any of the
obligations of the Guarantors under this Guaranty Agreement; provided, however,
that such fees and expenses shall be payable by the Guarantors only to the
extent the applicable indemnified party is successful in enforcing payment of
the obligations under this Guaranty Agreement.
The parties hereto acknowledge and agree that the obligations of the
Guarantors hereunder shall be unconditional and absolute, shall be a guaranty of
payment and performance and not of collection, and shall not be released,
discharged or otherwise affected by any circumstances whatsoever which might,
but for these provisions, constitute a legal or equitable discharge of the
Guarantors' obligations hereunder. The Guarantors hereby waive any circumstance
which might constitute a legal or equitable discharge of a surety or guarantor,
including but not limited to (a) notice of acceptance of this Guaranty
Agreement; (b) presentment and demand concerning the liabilities of the
Guarantors; (c) notice of any dishonor or default by, or disputes with, the
Seller; and (d) any right to require that any action or proceeding be brought
against the Seller or any other Person, or to require that the Buyer seek
enforcement of any performance against the Seller or any other Person, prior to
any action against the Guarantors under the terms hereof. The Guarantors consent
to the renewal, compromise, extension, acceleration, or other modification of
the terms of the Obligations, and to any change, modification or waiver of the
terms of the Asset Purchase Agreement and the Ancillary Agreements, without in
any way releasing or discharging the Guarantors from their respective
obligations hereunder. Except as to applicable statutes of limitation, no delay
of the Buyer in the exercise of, or failure to exercise, any rights hereunder
shall operate as a waiver of such rights, a waiver of any other rights, or a
release of Guarantor from any obligations hereunder.
Guarantors' obligations hereunder shall remain in force and effect until
the expiration of eighteen (18) months following the Closing Date (the
"Termination Date"), at which time the Guarantors shall be deemed automatically
released from all obligations and liabilities under and
pursuant to this Guaranty Agreement, SAVE AND EXCEPT with respect to the Claimed
Amount(s) pursuant to any Claim Notice(s) or Expected Claim Notice(s) delivered
to the Seller by any party entitled to indemnification under Section 6.1 of the
Asset Purchase Agreement pursuant to Section 6.3 of the Asset Purchase Agreement
prior to the earlier of (i) the Termination Date or (ii) the applicable date
required for its delivery pursuant to the Asset Purchase Agreement, which
guaranty obligations of the Guarantors hereunder shall continue in effect with
respect to such Claimed Amount(s) pursuant to such Claim Notice(s) or Expected
Claim Notice(s), subject to the limitations hereinafter set forth.
Guarantors reserve the right to assert rights, setoffs, counterclaims and
other defenses that Seller may have to the Obligations, other than defenses
arising from the bankruptcy, insolvency, dissolution or liquidation of Seller
and other defenses expressly waived herein.
The Guarantors hereby waive their rights to be subrogated to the rights of
the Buyer with respect to any Obligations paid or performed by the Guarantors
until all Obligations have been fully and indefeasibly paid to the Buyer,
subject to no rescission or right of return, and the Guarantors have fully and
indefeasibly satisfied all of the Guarantors' obligations under this Guaranty
Agreement.
The obligations of the Guarantors set forth herein shall be subject to the
limitations set forth in Sections 6.4 and 6.5 of the Asset Purchase Agreement.
Capitalized words or terms utilized herein shall have the same meanings
given in the Asset Purchase Agreement.
The provisions of Sections 7.1 (Press Releases and Announcements), 7.2 (No
Third Party Beneficiaries), 7.3 (Entire Agreement), 7.4 (Succession and
Assignment), 7.5 (Counterparts and Facsimile Signature), 7.7 (Notices), 7.8
(Governing Law), 7.9 (Amendments and Waivers), 7.10 (Severability), 7.11
(Expenses), 7.12 (Submission to Jurisdiction), 7.13 (Specific Performance) and
7.14 (Construction) of the Asset Purchase Agreement shall be incorporated into
this Guaranty Agreement, mutatis mutandis, as if references to "this Agreement"
and "the Seller" in the Asset Purchase Agreement were references to "this
Guaranty Agreement" and "the Guarantors", respectively, in this Guaranty
Agreement.
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page(s)]
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IN WITNESS WHEREOF, the undersigned have executed this Guaranty Agreement
as of the 20th day of September, 2006.
/S/ XXXXXX X. XXXXXX
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Xxxxxx X. Xxxxxx
/S/ XXXXX XXXXXXX, XX.
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Xxxxx Xxxxxxx, Xx.
/S/ XXXX XXXXXXXXX
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Xxxx Xxxxxxxxx
/S/ XXXXXX XXXXX
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Xxxxxx Xxxxx
/S/ XXXXX XXX
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Xxxxx Xxx
/S/ XXXXXX XXXXX
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Xxxxxx Xxxxx
ACCEPTED AND AGREED:
COMMERCE ENERGY, INC.
By: /S/ XXXXXX X. BOSS
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Xxxxxx X. Boss, President
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SCHEDULES AND EXHIBITS OMITTED FROM GUARANTY AGREEMENT
Exhibits:
None
Schedules:
None
