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Exhibit 99.3
VOTING AND STANDSTILL AGREEMENT
This Voting and
Standstill Agreement, dated November 17, 2005
("Agreement"), is entered into by and
between Peter Weigand (the "Stockholder")
and Commerce Energy Group, Inc., a Delaware
corporation ("Commerce").
RECITALS
WHEREAS, as of
the date hereof, the Stockholder and Commerce are entering
into a Settlement Agreement and General
Release (the "Settlement Agreement") in
connection with the Stockholder's
resignation as an employee and an officer of
Commerce and any of its parents, direct or
indirect subsidiaries, Affiliates,
divisions or related entities (collectively
referred to herein as "Commerce and
its Related Entities");
WHEREAS, the
execution and delivery of this Agreement in form and substance
satisfactory to Commerce, with respect to
certain voting, standstill and other
matters is a material inducement to
Commerce's willingness to enter into the
Settlement Agreement.
NOW THEREFORE,
in consideration of the premises and the mutual covenants
herein set forth, the parties agree as
follows:
ARTICLE 1
SHARES SUBJECT TO AGREEMENT
The shares of
common stock, par value $0.001 per share, of Commerce
("Common Stock") subject to this Agreement
are all shares of Common Stock
beneficially owned as of the date of this
Agreement, together with any other
shares of voting capital stock of Commerce
acquired by the Stockholder after the
date of this Agreement, whether pursuant to
the exercise of any convertible
security beneficially held by the
Stockholder or otherwise (collectively
referred to herein as the "Shares").
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER
The Stockholder
represents and warrants to Commerce as follows:
2.1
Authorization, etc. The Stockholder has the requisite power,
authority
and legal capacity to execute, deliver and
perform and to consummate the
transactions contemplated by this
Agreement. The Stockholder has duly executed
and delivered this Agreement. This
Agreement constitutes the legal, valid and
binding obligations of the Stockholder,
enforceable against the Stockholder in
accordance with its terms, except as such
enforcement may be limited by any
applicable bankruptcy, insolvency,
moratorium or similar law affecting
creditors' rights generally.
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2.2 No
Conflicts; Consents. The execution, delivery and performance by
the
Stockholder of this Agreement and the
consummation of the transactions
contemplated by this Agreement do not
conflict with, contravene, result in a
violation or breach of or default under
(with or without the giving of notice or
the lapse of time or both), or give rise to
a claim or right of termination,
amendment, modification, vesting,
acceleration or cancellation of any right or
obligation or loss of any material benefit
under any Law applicable to the
Stockholder or any material contract,
agreement, or instrument to which the
Stockholder is a party. No Consent of any
Governmental Authority or other person
is required to be obtained by the
Stockholder in connection with the execution
and delivery by the Stockholder of this
Agreement.
2.3 The Shares.
The Stockholder has the sole right to vote the Shares held
by him, and none of the Shares is subject
to any agreement, arrangement or
restriction with respect to the voting of
such Shares, except as contemplated by
this Agreement or by the Settlement
Agreement and the transactions contemplated
thereby. Commerce acknowledges and agrees
that certain of the Shares are held in
escrow by Paul, Hastings, Janofsky &
Walker LLP, which Shares are to be released
as of the date of this Agreement, and such
Shares are to be sold to Commerce or
certain of its directors as described in
the Settlement Agreement.
ARTICLE 3
COVENANTS OF THE
STOCKHOLDER
3.1 Voting for
Directors of Commerce. From the date of this Agreement and
continuing until October 9, 2007 (the
"Termination Date"), the Stockholder
hereby agrees that, at any meeting of the
stockholders of Commerce, however
called, or in connection with any written
consent of the stockholders of
Commerce, the Stockholder shall vote (or
cause to be voted) the Shares in favor
of the directors nominated by the Board of
Directors of Commerce (the "Board")
in any election of directors of Commerce.
On matters not involving the election
of directors of the Board, the Stockholder
agrees as follows: (a) subject to
this Agreement, to vote all shares of
voting capital stock of Commerce held by
him in the manner recommended by the Board
to the other stockholders of
Commerce; (b) not to call or support anyone
else in seeking to call, any special
meeting of stockholders of Commerce, or
encourage any other Person to do so; (c)
not to seek to remove or support anyone
else in seeking to remove, without
cause, any members of the Board, or
encourage any other Person to do so; (d) not
to submit or support anyone else in seeking
to submit any shareholder proposal
as defined under Regulation 14A promulgated
under the Securities Exchange Act of
1934, as amended; and (e) not to publicly
announce that the Stockholder is
seeking a waiver of any of the provisions
of this Section 3.1. The Stockholder
also agrees not to nominate or recommend a
candidate for election to the Board.
The Stockholder will cause its respective
Affiliates (excluding Commerce and its
Related Entities) to be bound by the
provisions of this Section 3.1.
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3.2 Standstill.
From the date of this Agreement and continuing until the
Termination Date, except pursuant to a
negotiated transaction approved by the
Board, the Stockholder and its Affiliates
will not, in any manner, directly or
indirectly:
(a) make, effect, initiate, cause or participate in (A) any
acquisition of beneficial ownership of any
securities of Commerce and its
Related Entities, (B) any acquisition of
any assets of Commerce and its Related
Entities, (C) any tender offer, exchange
offer, merger, business combination,
recapitalization, restructuring,
liquidation, dissolution or extraordinary
transaction involving Commerce and its
Related Entities, or involving any
securities or assets of Commerce and its
Related Entities or (D) any
"solicitation" of "proxies" (as those terms
are used in the proxy rules of the
Securities and Exchange Commission) or
consents with respect to any securities
of Commerce;
(b) form, join or participate in a "group" (as defined in the
Securities Exchange Act of 1934, as
amended, and the rules promulgated
thereunder), pooling agreement, syndicate
or voting trust with respect to the
beneficial ownership of any securities of
Commerce, or otherwise act in concert
with another stockholder of securities of
Commerce for the purpose of acquiring,
holding, voting or disposing of Commerce's
securities;
(c) act, alone or in concert with others, to seek to control or
influence the management, Board or policies
of Commerce;
(d) take any action which might force Commerce to make a public
announcement regarding any of the types of
matters set forth in clause "(a)" of
this sentence;
(e) request or propose that Commerce (or its directors,
officers,
employees or agents), directly or
indirectly, amend or waive any provision of
this Section 3.2, including this subsection
(e);
(f) agree or offer to take, or encourage or propose (publicly
or
otherwise) the taking of, any action
referred to in clauses "(a)", "(b)", "(c)",
"(d)" or "(e)" of this sentence;
(g) assist, induce or encourage any other Person to take any
action
referred to in clauses "(a)", "(b)", "(c)",
"(d)" or "(e)" of this sentence;
(h) enter into any discussions or arrangements with any third
party
with respect to the taking of any action
referred to in clauses "(a)", "(b)",
"(c)", "(d)" or "(e)" of this sentence;
or
(i) vote any capital stock of Commerce in favor of, or
initiate,
propose or otherwise solicit stockholders
of Commerce for the approval of one or
more stockholder proposals or induce or
attempt to induce any other individual,
firm, corporation, partnership, or other
entity to initiate any stockholder
proposal.
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3.3 Restrictions
on Resale; Lockup Agreements. From the date hereof and
continuing until the Termination Date,
except as provided in the Settlement
Agreement, Stockholder sha
