EQUITY PURCHASE AND RETIREMENT AGREEMENT

 

THIS EQUITY PURCHASE AND RETIREMENT AGREEMENT (this “Agreement”) is made
effective as of March 31, 2017 (“Effective Date”), by and among Timothy S.
Krieger, an individual and resident of the state of Minnesota (the “Seller”),
and Aspirity Holdings LLC, a Minnesota limited liability company (the
“Company”). Collectively, the Seller and the Company shall be referred to as the
“Parties” and each individually as a “Party”.

 

BACKGROUND:

 

The Seller is the owner of Four Hundred and Ninety-Six (496) Series A Preferred
Units (the “Series A Units”) in the Company and desires to sell, and the Company
desires to purchase and retire, all of the Series A Units in exchange for the
consideration and on the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the above, and the terms and covenants set
forth below, the Parties agree as follows:

 

AGREEMENT:

 

1. Re-Purchase and Retirement of the Series A Units; Purchase Price and Payment
Terms. At the Closing, the Seller shall sell to the Company, and the Company
shall purchase from the Seller and promptly retire, all of the Series A Units.
The purchase price for the purchase of the Series A Units shall be an amount
equal to Two Million, Seven Hundred Forty Five Thousand Dollars and No Cents
($2,745,000.00) (the “Purchase Price”). The Purchase Price shall paid by the
Company to the Seller pursuant to a Subordinated Promissory Note in the form
attached hereto as Exhibit A (the “Note”), bearing simple interest at the annual
rate of twenty and 00/100 percent (20.00%).  

 

2. Closing.The closing of the transactions contemplated by this Agreement (the
“Closing”) will take place as of the close of business on the Effective Date. If
the effective date falls on a weekend or holiday, then the Closing shall take
place as of the open of business on the next business day following the
Effective Date. 

 

3. Seller’s Representations and Warranties.The Seller represents and warrants to
the Company that as of the Closing: 

 

(a) Title & Authority. The Seller has the full power and authority to enter
into, execute and deliver this Agreement and to consummate the transactions
contemplated hereby and any instruments or agreements required herein. This
Agreement has been duly and validly executed and delivered by the Seller and
constitutes a valid and binding obligation of the Seller, enforceable against
the Seller in accordance with its terms. The Seller has the absolute and
unrestricted right, power and authority to sell to the Company all right, title
and interest in and to the Series A Units and no consent or approval of any
other party is required as a condition to the effective transfer of the Series A
Units to the Company. The Seller is the record holder of the Series A Units and
has good and marketable legal and beneficial title to the Series A Units and
such Series A Units are owned by the Seller free and clear of all liens,
encumbrances, restrictions and claims of every kind (collectively,
“Encumbrances”) and will be transferred to the Company free and clear of all
Encumbrances.

 

(b) Sufficiency of Purchase Price. The Seller hereby warrants that the Purchase
Price was negotiated by the Parties in a fair and prudent manner and hereby
waives any claim that any alternate valuation methodology for determining the
Purchase Price should have been applied. The Seller represents and warrants that
the Purchase Price is a fair, equitable, and just valuation for the Series A
Units and the Seller is accepting the Note as full payment for any and all
amounts due to the Seller and for the purchase of the Series A Units. The Seller
has access to all of the records, financial information and other related
agreements and documents of the Company and its business and has engaged in such
examination of said records, information, agreements and documents as the Seller
has deemed necessary and appropriate under the circumstances. In conjunction
therewith, the Seller represents that it does not require or desire any
additional information or data pertaining to the Company and its business and/or
the Series A Units. The Seller represents that the Purchase Price is a fair
reflection of the financial condition of the Company.

 

 

 

 

(c) Subordinated Promissory Note. The Seller has not sold, assigned or otherwise
transferred the Note and the Note, when issued, will be free and clear of all
Encumbrances that could otherwise be imposed by the Seller, except as otherwise
set forth in the Company’s Senior Debt (as such term is defined in the Note).

 

(d) Legal and Financial Representation. The Seller has sought or obtained
separate legal and financial representation with respect to the transaction
contemplated in this Agreement and expressly disclaims the representation of the
Company’s outside legal counsel with respect to the transaction contemplated in
this Agreement.

 

4. Company’s Representations and Warranties.The Company represents and warrants
to the Seller that as of the date hereof and as of the Closing: (a) the Company
is duly organized, validly existing and in good standing under the laws of the
State of Minnesota and has all requisite limited liability company power and
authority to own, lease and operate its properties and assets and to carry on
its business as is now being conducted; (b) the Company has the full power and
authority to enter into, execute and deliver this Agreement and to consummate
the transactions contemplated hereby and any instruments or agreements required
herein; and (c) this Agreement has been duly and validly executed and delivered
by the Company and constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms. 

 

5. Survival of Representations and Warranties. All representations and
warranties of the Parties shall survive the Closing. 

 

6. Delivery of Documents Notices. At the Closing, the Seller and the Company
shall execute and/or deliver to the other Party, as applicable, the following
documents, instruments and agreements, together with such other documents,
instruments and agreements as the other Party may reasonably request to
consummate the purchase and sale contemplated hereby: (a) The Company shall
issue and deliver to the Seller a duly executed copy of the Note, (b) the Seller
shall deliver to the Company a duly executed Assignment Separate from
Certificate in the form attached hereto as Exhibit B and any original
certificate representing the Series A Units; (c) each Party shall deliver to the
other Party a duly executed copy of this Agreement. All notices and other
communications pursuant to this Agreement shall be governed in all respects by
the notice provisions set forth in the Note.  

 

7. Indemnification. The Seller, as one Party, and the Company, as the other
Party, do hereby agree to, and shall immediately upon demand, defend, indemnify
and hold harmless each other from, against and in respect of: (a) any
liabilities, penalties, interest, costs, expenses or other damages or
deficiencies resulting from any misrepresentation, breach of warranty or
non-fulfillment of any agreement or covenant on the part of such Party under
this Agreement; and (b) all actions, suits, proceedings, demands, assessments,
judgments, costs and expenses (including, without limitation, reasonable
attorneys’ fees) incident to any of the foregoing. The indemnifying party shall
reimburse the indemnified party, on demand, for any payment made by the
indemnified party at any time with respect to any liability, obligation or a
claim to which the foregoing indemnity relates.

 

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8. Waiver, Modification or Amendment. No waiver, modification or amendment of
any term, condition or provision of this Agreement shall be valid or of any
effect unless made in writing, signed by the Party to be bound or its duly
authorized representative and specifying with particularity the nature and
extent of such waiver, modification or amendment. Any waiver by any Party of any
default of the other shall not effect, or impair any right arising from, any
subsequent default. Nothing herein shall limit the rights and remedies of the
Parties under and pursuant to this Agreement, except as hereinbefore set forth. 

 

9. Successors and Assigns This Agreement is binding upon and shall inure to the
benefit of the Parties hereto and their respective heirs, personal
representatives, successors, transferees and assigns. The Seller shall not be
entitled to assign his rights and obligations under this Agreement to any person
or entity unless the Company’s prior written consent has been obtained. The
Company may freely assign this Agreement to an affiliate of the Company. 

 

10. Applicable Law, Forum and Venue This Agreement will be interpreted and
governed under the laws of the State of Minnesota, without regard to conflict of
laws principles. Any action or proceeding against any of the Parties relating in
any way to this Agreement or the subject matter of this Agreement will be
brought and enforced exclusively in the competent state or federal courts of
Minnesota, and the Parties to this Agreement consent to the exclusive
jurisdiction of such courts in respect of such action or proceeding. The Parties
waive their right to a trial by jury for any action or proceeding seeking to
enforce any provision of, or based on any right arising out of, this Agreement,
whether grounded in tort, contract or otherwise. 

 

11. Entire Agreement; Counterparts. This Agreement contains the entire agreement
among the Parties with respect to its subject matter and incorporates any and
all prior oral or written agreements, representations, discussions or
understandings relating thereto. All prior agreements with respect to the
subject matter hereof and/or the transactions contemplated hereby are hereby
terminated and superseded. This Agreement may be amended, supplemented or
modified only by written instrument signed by all Parties hereto. This Agreement
may be executed in several counterparts, each of which shall be deemed to be an
original, but all of which shall constitute one and the same instrument. 

 

12. Construction. The Parties have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the Parties and no presumption or burden of proof shall arise favoring or
disfavoring any Party by virtue of the authorship of any of the provisions of
this Agreement.

 

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and
year first above written.

 

COMPANY:   SELLER:       ASPIRITY HOLDINGS LLC,     a Minnesota limited
liability company    

 

Signed: /s/ Wiley H. Sharp III   /s/ Timothy S. Krieger Name: Wiley H. Sharp III
  Timothy S. Krieger Title: Chief Financial Officer    

 

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EXHIBIT A

 

Form of Subordinated Promissory Note

 

(See Attached)

 

A-1

 

 

EXHIBIT B

 

Assignment Separate from Certificate

 

For value received, the undersigned, Timothy S. Krieger, hereby assigns and
transfers to Aspirity Holdings, LLC, a Minnesota limited liability company (the
“Company”), for good and valuable consideration, receipt of which is hereby
acknowledged, Four Hundred and Ninety-Six (496) Series A Preferred Series A
Units (the “Series A Units”) in the Company, effective as of the date written
below, standing in his name on the books of the Company, and does hereby
irrevocably constitute and appoint Winthrop & Weinstine, P.A., as attorney to
transfer such Series A Units on the books of the Company with full power of
substitution in the premises.

 

The undersigned has signed this document, effective the day and year written
below and executed on the date set forth below.

 

  /s/ Timothy S. Krieger   Name: Timothy S. Krieger   Date: March 31, 2017

 

B-1