MASTER VEHICLE LEASE TERMINATION AGREEMENT
THIS MASTER VEHICLE LEASE TERMINATION AGREEMENT (this "AGREEMENT") is
made effective as of September 10, 2004, by and between XXXXXXXXXXX VELAGIO,
INC. ("LESSEE"), and XXXXXXXXXXX LEASING COMPANY, LLC ("LESSOR").
RECITALS
A. Lessor and Lessee have previously entered into that certain
Master Vehicle Lease Agreement dated September 1, 2003 and amended January 1,
2004 (the "LEASE") whereby Lessee leases certain vehicles from Lessor (the
"VEHICLES").
B. Destination Microfield, LLC has offered to purchase the
Vehicles from Lessor in order to enter into a new lease of the Vehicles to
Lessee.
X. Xxxxxx and Lessee mutually desire to cancel and terminate the
Lease prior to the scheduled expiration date of August 31, 2006 (the "SCHEDULED
EXPIRATION DATE"), all upon and subject to the terms and conditions herein
provided.
NOW THEREFORE, in consideration of the mutual promises and covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. LEASE TERMINATION
Subject to the terms and conditions set forth in this Agreement, Lessor
and Lessee hereby agree that the Lease shall be terminated effective as of 12:01
a.m. on September 10, 2004 (the "TERMINATION DATE"). Upon termination of the
Lease and satisfaction of the Termination Conditions (as hereafter defined),
Lessor and Lessee shall have no further rights, obligations or claims with
respect to each other arising under the Lease.
2. TERMINATION CONDITIONS
The following conditions shall be conditions precedent to the
effectiveness of this Agreement and the termination of the Lease on the
Termination Date (collectively, the "TERMINATION CONDITIONS"):
a. PURCHASE OF VEHICLES. On or before the Termination
Date, Destination Microfield, LLC shall have completed the purchase of the
Vehicles from Lessor.
b. ISSUANCE OF WARRANTS. On or before the Termination
Date, Microfield Group, Inc. ("Microfield") shall have issued and delivered to
Lessor (or its Board of Directors shall have committed to issue and deliver to
Lessor promptly following the closing) a warrant or warrants to purchase
1,000,000 common shares of Microfield. The exercise price will be the lesser of
$0.38 per share or the price applicable to any shares, warrants or options
(excluding options granted to employees or directors) issued by Microfield on or
before the Scheduled Expiration Date. The warrants will be assignable by Lessor,
will permit a cashless exercise by the holder, and will provide for the most
favorable registration rights for the shares subject to the
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warrants as have been granted to any current shareholder of Microfield. A
cashless exercise means (1) payment through a "same day sale" commitment from
the holder and an NASD broker-dealer, or (2) a "net exercise" where the holder
may elect to receive shares equal to the value of the warrant by surrendering
warrant shares according to a formula based on the average closing ask price for
the shares for the 10 preceding trading days. If requested by Lessor, Lessee
shall provide a written agreement by Microfield shareholders holding a majority
of voting shares to approve the issuance of such warrants and to increase
authorized shares of Microfield as necessary to accommodate the exercise of the
warrants.
c. VEHICLE MAINTENANCE. Lessee shall have made new
arrangements for the maintenance of the Vehicles which does not involve Lessor
including, if appropriate, entering into a new maintenance agreement with a
third party.
d. TRANSFER FEES, ETC. Lessee shall have reimbursed
Lessor for all vehicle title transfer fees and similar expenses (including
applicable license fees or excise taxes to be collected) incurred by Lessor in
connection with the termination of the Lease and the transfer of the Vehicles to
Destination Microfield, LLC.
3. MUTUAL RELEASE
Effective upon the Termination Date, and provided the Termination
Conditions have been satisfied, Lessor and Lessee, on behalf of themselves and
their respective successors, officers, shareholders, assigns, partners, members,
trustees, beneficiaries and persons and entities holding beneficial interests,
do each hereby release and absolutely and forever discharge the other from any
and all claims, losses, liabilities, judgments, costs, demands, causes of action
and expenses (including, without limitation, attorneys' fees and consultants'
fees), of which such releasing party is either currently aware or reasonably
should have been aware and of which such releasing party ever had, now has,
claims to have had, or may have had, against the other party arising from,
and/or connected with the Vehicles or such other party's obligations under the
Lease, but excluding claims for indemnification by Lessor arising out of
Lessee's use and operation of the Vehicles (collectively referred to herein as
"CLAIMS"). This Agreement and release has no effect upon other unrelated
obligations of Lessee to Lessor, including (a) rental payments due under that
certain Equipment Lease Agreement dated September 1, 2003 as amended effective
December 1, 2003, and (b) past due accounts payable in the approximate amount of
$76,752.01 which are to be paid at the rate of $5,000 per week. Lessee's
obligation to pay amounts due under such unrelated obligations is not subject to
any right of setoff or defense based on any other obligation of Lessee.
4. LESSEE'S REPRESENTATIONS AND WARRANTIES
Lessee hereby represents and warrants to Lessor the following,
each of which shall survive the termination of the Lease:
a. Lessee has not made any assignment, sublease,
transfer, conveyance or other disposition of the Lease, the Vehicles or any
other right, title or interest under or arising by virtue of the Lease, or of
any claim, demand, obligation, liability, action or cause of action
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arising from or pursuant to the Lease or arising from any rights of possession
arising under or by virtue of the Lease or the Vehicles.
b. Lessee has the full power, capacity, authority and
legal right to execute and deliver this Agreement.
c. The person executing this Agreement on behalf of
Lessee has the full right and authority to execute this Agreement on behalf of
Lessee and to bind Lessee without the consent or approval of any other person or
entity.
d. This Agreement is a legal, valid and binding
obligation of Lessee, enforceable against Lessee in accordance with its terms.
e. Lessee has not (i) made a general assignment for the
benefit of creditors, (ii) filed any voluntary petition in bankruptcy or
suffered the filing of an involuntary petition by its creditors, (iii) suffered
the appointment of a receiver to take possession of all or substantially all of
its assets, or (iv) suffered the attachment or other judicial seizure of all or
substantially all of its assets.
f. Lessee has not incurred any unpaid obligations with
respect to the Vehicles for which Lessor or any other person having an interest
in the Vehicles is, or may hereafter be claimed to be, responsible to pay or
perform.
5. GENERAL PROVISIONS
a. INSURANCE. Lessee hereby agrees that Lessee will
continue to maintain insurance as required under the Lease unless modified by
the terms of a new lease with Destination Microfield, LLC.
b. TIME OF ESSENCE. Time is of the essence in the
performance of the parties' respective obligations set forth in this Agreement.
c. ENTIRE AGREEMENT. This Agreement constitutes the
entire understanding of the parties with respect to the subject matter hereof
and all prior agreements, representations, and understandings between the
parties, whether oral or written, are deemed null, all of the foregoing having
been merged into this Agreement. The parties acknowledge that each party and/or
its counsel have reviewed and revised this Agreement and that no rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall be employed in the interpretation of this Agreement or any
amendments or exhibits to this Agreement or any document executed and delivered
by either party in connection with this Agreement.
d. ASSIGNABILITY; SUCCESSORS BOUND. Lessee may not
assign its rights, obligations or interest in this Agreement to any other person
or entity without Lessor's written consent thereto, which consent may be given
or withheld in Lessor's sole and absolute discretion. Any attempted assignment
without the consent of Lessor shall be null and void. No assignment shall
release the Lessee herein named from any obligation or liability under this
Agreement. Any permitted assignee shall be deemed to have made any and all
representations and warranties made by Lessee hereunder, as if the assignee were
the original signatory hereto.
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This Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and permitted assigns.
e. SEVERABILITY. If any provision of this Agreement or
application to any party or circumstances shall be determined by any court of
competent jurisdiction to be invalid or unenforceable to any extent, the
remainder of this Agreement or the application of such provision to such person
or circumstances, other than those as to which it is so determined invalid or
unenforceable, shall not be affected thereby, and each provision hereof shall be
valid and shall be enforced to the fullest extent permitted by law.
f. APPLICABLE LAW. This Agreement shall be governed by
and construed under the laws of the State of Oregon.
g. AMENDMENTS. This Agreement may be amended or modified
only by an instrument in writing signed by each of the parties hereto.
h. ATTORNEYS' FEES. If either party hereto fails to
perform any of its obligations under this Agreement or if any dispute arises
between the parties hereto concerning the meaning or interpretation of any
provision of this Agreement, then the defaulting party or the party not
prevailing in such dispute, as the case may be, shall pay any and all costs and
expenses incurred by the other party on account of such default and/or in
enforcing or establishing its rights hereunder, including, without limitation,
court costs and reasonable attorneys' fees and disbursements (including any fees
incurred in an appellate or bankruptcy proceeding). Any such attorneys' fees and
other expenses incurred by either party in enforcing a judgment in its favor
under this Agreement shall be recoverable separately from and in addition to any
other amount included in such judgment, and such attorneys' fees obligation is
intended to be severable from the other provisions of this Agreement and to
survive and not be merged into any such judgment. The parties hereto expressly
agree that any party hereto may seek equitable relief in any court of competent
jurisdiction to enjoin breaches of this Agreement and/or specifically enforce
the rights enumerated in this Agreement, including, without limitation, issuance
of the Microfield warrant(s).
i. COUNTERPARTS. This Agreement may be executed in
counterparts each of which shall be deemed an original but all of which taken
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
LESSOR:
XXXXXXXXXXX LEASING COMPANY, LLC
By: JMW Capital Partners, Inc., its Manager
By: /s/ XXXXXX XXXXXXX
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Name: Xxxxxx Xxxxxxx
Its: CEO
LESSEE:
XXXXXXXXXXX VELAGIO, INC.
By: /s/ XXXX XXXXXX
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Name: Xxxx Xxxxxx
Its: CFO
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