STOCK SALE & SETTLEMENT AGREEMENT
1. PARTIES.
A. Xxxx X. Xxxxxxxxx ("Plaintiff");
B. JMW Capital Partners, Inc., an Oregon corporation
(now known as Aequitas Capital Management, Inc.), Xxxxxxxxxxx Group LLC, an
Oregon limited liability company, and Microfield Group, Inc., an Oregon
corporation (collectively "JMW Defendants");
X. Xxxxxxxxxxx Electric, Inc., an Oregon corporation,
Destination Capital, LLC, an Oregon limited liability company, Xxxxxxxxxxx
Velagio, Inc., an Oregon corporation, Xxxxxx X. Jesenik, Xxxxxx X. Xxxxxx,
Xxxxxx X. Xxxxx, Xxxxxx X. Xxxxxx, R. Xxxxxxx Xxxxxx, Xxxxxxx Xxxxxxxx, Xxxxx X.
Xxxxxx, and Xxxxx X. Xxxxxxxxxxx (collectively "Xxxxxxxxxxx Defendants");
D. Collectively herein, the JMW Defendants and the
Xxxxxxxxxxx Defendants shall sometimes be referred as the "Defendants."
2. REPRESENTATION BY PLAINTIFF. Plaintiff represents and warrants
that he is the sole owner of (a) 119,050 shares of Series 2 preferred stock and
3,404,958 shares (203,008 of which are currently being held in escrow) of common
stock in Microfield Group, Inc. ("Microfield Stock"), and (b) a warrant to
purchase 16,667 shares of Microfield common stock ("Microfield Warrant").
Plaintiff further represents and warrants that the Microfield Stock and the
Microfield Warrant constitute all of Plaintiff's interests in Microfield Group,
Inc. Except for the 203,008 shares held in escrow, Plaintiff represents and
warrants that at Closing that he will be the sole owner of all such shares
(subject to any stock splits that may have occurred on or before Closing) and
that he is now, and then will be, free to transfer said Microfield Stock to the
JMW
1 - STOCK SALE AND SETTLEMENT AGREEMENT
PDX/112816/141153/DLH/1386462.1
Defendants and that there is not now, and then will not be, any liens, security
interests or other encumbrances on said Microfield Stock.
3. PURPOSE. The purpose of this Agreement is to provide for the
sale of all of Plaintiff's Microfield Stock to the JMW Defendants and dismiss
and release each party from any and all claims which Plaintiff and Defendants
may have against each other as of May 10, 2005. Many of these claims are
currently the subject of litigation pending in the Multnomah County Circuit
Court, Xxxxxxxxx v. Jesenik et al, Multnomah County Circuit Court Case No.
0403-02370.
4. PURCHASE OF STOCK BY JMW DEFENDANTS. The JMW Defendants
jointly and severally agree to purchase Plaintiff's Microfield Stock at Closing
for the aggregate purchase price of $362,500.00. The purchase price shall be
allocated as follows: $50,000 to the purchase of Plaintiff's preferred shares
and the balance to the purchase of Plaintiff's common shares.
5. TRANSFER OF STOCK; CANCELLATION OF WARRANT. Plaintiff agrees
to sell all of his Microfield Stock to the JMW Defendants and shall deliver all
such shares, endorsed in blank, to the JMW Defendants at Closing (according to
the share allocation instructions of the JMW Defendants), subject to the
representations and warranties set out in Section 2 hereto. If any of such
shares are still then in escrow, Plaintiff shall execute such documents provided
by the JMW Defendants as are necessary to transfer such shares to the JMW
Defendants. In addition, Plaintiff agrees to terminate and cancel the Microfield
Warrant as of Closing. Plaintiff agrees not to exercise the Microfield Warrant
prior to Closing.
6. RELEASE BY PLAINTIFF. Subject to the condition that all
Defendants have signed this Agreement by Closing and that the JMW Defendants pay
the $362,500 provided for in Section 4 herein as a condition precedent,
Plaintiff hereby releases and acquits the Defendants,
2 - STOCK SALE AND SETTLEMENT AGREEMENT
PDX/112816/141153/DLH/1386462.1
and each of them, and their respective officers, directors, shareholders,
agents, employees, successors, assigns, and attorneys from any and all claims,
demands, damages, costs, attorney fees, liability, claims for contribution,
claims for indemnity, and claims of any other kind or nature, whether known or
unknown, existing on this date, including by way of illustration only, any
claims for common law or securities fraud in connection with this Agreement,
fraud in the inducement of this Agreement, and the claims asserted in, or which
could have been asserted in, the lawsuit captioned Xxxxxxxxx v. Jesenik et al,
Multnomah County Circuit Court Case No. 0403-02370 in which the undersigned are
parties. This release does not include the joint and several obligation of the
JMW Defendants to pay Plaintiff the $362,500 required by this Agreement, but
otherwise, in construing this release, the parties agree that the release shall
have the broadest meaning possible and shall be construed to release all claims.
7. RELEASE BY DEFENDANTS. Subject to the condition that Plaintiff
has signed this Agreement by Closing and delivered his Microfield Stock at
Closing to the JMW Defendants as described in Section 5 hereto as a condition
precedent, the Defendants, and each of them, hereby release and acquit the
Plaintiff and his wife, children, agents, employees, successors, assigns, and
attorneys from any and all claims, demands, damages, costs, attorney fees,
liability, claims for contribution, claims for indemnity, and claims of any
other kind or nature, whether known or unknown, existing on this date, including
by way of illustration only, any claims for common law or securities fraud in
connection with this Agreement, fraud in the inducement of this Agreement, and
the claims asserted in, or which could have been asserted in, the lawsuit
captioned Xxxxxxxxx v. Jesenik et al, Multnomah County Circuit Court Case No.
0403-02370 in which the undersigned are parties. This release does not include
the representation of Plaintiff as to the ownership of the Microfield Stock and
the Microfield Warrant set out in Section 2 herein
3 - STOCK SALE AND SETTLEMENT AGREEMENT
PDX/112816/141153/DLH/1386462.1
nor Plaintiff's obligation to transfer all of the Microfield Stock and cancel
the Microfield Warrant, but otherwise, in construing this release, the parties
agree that the release shall have the broadest meaning possible and shall be
construed to release all claims.
8. DISMISSAL OF LITIGATION. The parties to this Agreement shall
suspend further proceedings in the case of Xxxxxxxxx v. Jesenik et al, Multnomah
County Circuit Court Case No. 0403-02370 until August 1, 2005 and until the
parties have delivered the funds and stock described herein. If such delivery
occurs, then on August 2, 2005, the parties agree to dismiss with prejudice the
parties' claims against each other in Xxxxxxxxx v. Jesenik et al, Multnomah
County Circuit Court Case No. 0403-02370. The parties will request that the
order of dismissal make no reference to the fact of this settlement and simply
state that the action is dismissed without costs or fees to any party.
9. CLOSING. Closing shall occur within 5 business days after
notice from the JMW Defendants to Plaintiff, but no later than August 1, 2005 at
1:00 pm, at the offices of Xxxxxxx, Xxxx & Xxxxxx LLP.
9.1 At Closing, the following shall be delivered to
Plaintiff:
(a) One or more insurance company, attorney
trust account and/or cashier checks in the aggregate sum of $362,500.00, made
payable to Xxxx X. Xxxxxxxxx.
(b) An executed assignment of the xxxx
"Broadband in Motion" to Plaintiff.
(c) An executed stipulated order of the
dismissal of the case and claims set forth in Section 8 herein.
4 - STOCK SALE AND SETTLEMENT AGREEMENT
PDX/112816/141153/DLH/1386462.1
9.2 At Closing, the following shall be delivered to the
JMW Defendants:
(a) All of Plaintiff's Microfield Stock,
executed in blank, as described in Sections 2 and 5 herein, except, to the
extent that any such shares continue to be held in escrow, Plaintiff shall
deliver an executed copy of such document prepared by the JMW Defendants
necessary to transfer such shares to the JMW Defendants.
(b) An executed cancellation document, in form
satisfactory to Microfield Group, Inc., which cancels and terminates the
Microfield Warrant.
(c) An executed stipulated order of the
dismissal of the case and claims set forth in Section 8 herein.
10. DUPLICATE ORIGINALS, FACSIMILE AND SIGNATURES. There shall be
three duplicate originals of this Agreement. The parties may submit counterpart
signature pages, incorporating such signature pages to form three, complete,
duplicate original documents. Facsimile transmission of any signed original
document, and the retransmission of any signed facsimile transmission, shall be
the same as delivery of the original signed document. At the request of any
party, a party shall confirm documents with a facsimile transmitted signature by
signing an original document.
11. INTERPRETATION AND ARBITRATION OF DISPUTES. In the event of
any dispute regarding any term or aspect of this Agreement, interpretation and
resolution of the dispute shall be determined in binding arbitration by an
arbitrator appointed by the Presiding Judge of Multnomah County Oregon Circuit
Court. Any arbitration shall be conducted pursuant to the Oregon Uniform Trial
Court Rules, with the exception that all witnesses must appear in person and the
arbitration shall be binding without right of appeal. The arbitration cost of
any dispute shall be paid by the non-prevailing party to the arbitration as
determined by the arbitrator.
5 - STOCK SALE AND SETTLEMENT AGREEMENT
PDX/112816/141153/DLH/1386462.1
12. CONSTRUCTION OF THE AGREEMENT. This Agreement is, by
agreement, drafted by all of the parties and the subject of bona fide
negotiations. No party shall be entitled to receive the benefits of any rule or
doctrine construing ambiguities against the drafter because this Agreement has
been drafted by each party. It is the specific intent of the parties to give the
releases set forth in this Agreement the broadest possible construction, and any
ambiguity shall be resolved in favor of a broad construction rather than a
narrow construction.
13. CONFIDENTIALITY.
A. The parties recognize the need to keep the terms of
this Agreement confidential and that serious, irrevocable harm could result if
the terms of this Agreement became known or were disclosed. Therefore, the
parties agree that, without the prior written consent of all the other parties
to this Agreement, no party shall disclose the terms of this Agreement to any
other person, except as specifically provided for in this Agreement. In the
event of such disclosure, or a threat of such disclosure, the parties agree that
the sole remedy shall be in a court of equity to obtain a decree of specific
performance or an injunction or temporary restraining order.
B. This confidentiality clause shall not prohibit the
parties from making disclosure as to the terms of this Agreement to their
attorneys, accountants, or employees if disclosure to those persons is
reasonably necessary for those persons to fulfill their duties to the parties.
In the event of such authorized disclosure, the parties shall inform such third
persons of the requirement of this confidentiality clause and shall take all
reasonable steps to insure that such third persons keep the terms of this
Agreement confidential. This confidentiality clause shall not prohibit the
parties from making any necessary disclosure to any government authority to
which the parties are required to report, including by way of illustration only,
the U. S.
6 - STOCK SALE AND SETTLEMENT AGREEMENT
PDX/112816/141153/DLH/1386462.1
Securities & Exchange Commission. In the event that any party receives a
subpoena or other instrument which purport to compel such party to reveal to a
third party information covered by this confidentiality agreement, such party
shall so notify the other parties in writing of such fact within a reasonable
time before delivery of the information to such third party. This provision is
intended to give the affected parties the opportunity to seek a prior
determination by a court of the need to deliver such information to the third
party.
14. CONTRACTUAL ACKNOWLEDGMENT. The parties declare and represent
they fully understand the terms of the settlement and voluntarily agree to the
aforesaid payment and settlement for the purpose of making a full compromise,
adjustment, and settlement of claims as more fully set forth herein.
It is further understood and agreed this settlement is in compromise of
doubtful and disputed claims and neither the stock purchase, the payment nor the
release is to be construed as an admission of liability on the part of any party
above-named by whom liability is expressly denied. This document contains the
entire agreement between the parties, and the terms of this Agreement are
contractual and not a mere recital.
The undersigned further states he or it has carefully read the
foregoing release and know the contents thereof, and he or it has signed the
same as his or its own free act.
If the undersigned is a corporation, it represents that it has full
power and authority to enter into
this Agreement.
15. MISCELLANEOUS PROVISIONS.
15.1 Each party to Sections 4 and 5 hereof agrees to treat
this transaction as a sale and purchase of the Microfield Stock for federal and
state income tax purposes.
7 - STOCK SALE AND SETTLEMENT AGREEMENT
PDX/112816/141153/DLH/1386462.1
15.2 All parties to this Agreement shall execute any
documentation reasonably necessary to effectuate the terms of this Agreement
within seven days of request by any party.
15.3 No amendment, change or modification of this
Agreement shall be valid, unless in writing and signed by all parties hereto.
15.4 This Agreement constitutes the entire agreement
between and among the parties, integrates all of the terms and conditions
mentioned herein or incidental hereto, and supersedes all negotiations or
previous agreements between the parties with respect to all or any part of the
subject matter hereof.
15.5 Each party to this Agreement has been advised of the
necessity of retaining counsel and has had opportunity to obtain counsel before
entering into this Agreement.
APPROVED AS TO FORM:
/s/ XXXXXX X. XXXXXXXXX 5-10-05
------------------------------------ ------------------------------------
Xxxxxx X. XxXxxxxxx Date
Attorney for Plaintiff
/s/ XXXXX XXXXXXXXX 5-10-05
------------------------------------ ------------------------------------
Xxxxx Xxxxxxxxx Date
Attorney for Plaintiff
/s/ XXXX X. XXXXXX 5-11-05
------------------------------------ ------------------------------------
Xxxx X. Xxxxxx Date
Attorney for defendants Xxxxxx X. Jesenik, JMW Capital Partners, Inc.,
Destination Capital, LLC, Xxxxxxxxxxx Electric, Inc., Xxxxxx X. Xxxxx, Xxxxxx X.
Xxxxxx, Xxxxx X. Xxxxxx, Xxxxx X. Xxxxxxxxxxx and Xxxxxxxxxxx Group LLC.
/s/ XXXX X. XXXXXXX 5-10-05
------------------------------------ ------------------------------------
Xxxx X. Xxxxxxx Date
Attorney for defendants Microfield Group, Inc., Xxxxxx X. Xxxxxx, Xxxxxxx
Xxxxxxxx and Xxxxxxxxxxx Velagio, Inc.
8 - STOCK SALE AND SETTLEMENT AGREEMENT
PDX/112816/141153/DLH/1386462.1
SIGNATURES:
/s/ XXXX X. XXXXXXXXX 5-10-05
------------------------------------ ------------------------------------
Xxxx X. Xxxxxxxxx Date
JMW CAPITAL PARTNERS, INC.
an Oregon corporation now known as Aequitas
Capital Management, Inc.
By: /s/ XXXXXX X. JESENIK 5-10-05
--------------------------------- ------------------------------------
Xxxxxx X. Jesenik, CEO Date
XXXXXXXXXXX GROUP LLC
an Oregon limited liability company
By: Aequitas Capital Management, Inc., its Manager
By: /s/ XXXXXX X. JESENIK 5-10-05
--------------------------------- ------------------------------------
Xxxxxx X. Jesenik, CEO Date
MICROFIELD GROUP, INC.
an Oregon corporation
By: 5-10-05
--------------------------------- ------------------------------------
Title: Date
------------------------------
XXXXXXXXXXX ELECTRIC, INC.
an Oregon corporation
By: /s/ XXXXXX X. JESENIK 5-10-05
--------------------------------- ------------------------------------
Xxxxxx X. Jesenik, CEO Date
9 - STOCK SALE AND SETTLEMENT AGREEMENT
PDX/112816/141153/DLH/1386462.1
DESTINATION CAPITAL, LLC
an Oregon limited liability company
By: Aequitas Capital Management, Inc., its Manager
By: /s/ XXXXXX X. JESENIK 5-10-05
--------------------------------- ------------------------------------
Xxxxxx X. Jesenik, CEO Date
XXXXXXXXXXX VELAGIO, INC.
an Oregon corporation
By: /s/ A. XXXX XXXXXX 5-10-05
--------------------------------- ------------------------------------
Title: President
------------------------------ ------------------------------------
Date
/s/ XXXXXX X. JESENIK 5-10-05
------------------------------------ ------------------------------------
Xxxxxx X. Jesenik Date
/s/ XXXXXX X. XXXXXX 5-10-05
------------------------------------ ------------------------------------
Xxxxxx X. Xxxxxx Date
/s/ XXXXXX X. XXXXX 5-10-05
------------------------------------ ------------------------------------
Xxxxxx X. Xxxxx Date
/s/ XXXXXX X. XXXXXX 5-10-05
------------------------------------ ------------------------------------
Xxxxxx X. Xxxxxx Date
/s/ R. XXXXXXX XXXXXX 5-18-05
------------------------------------ ------------------------------------
R. Xxxxxxx Xxxxxx Date
/s/ XXXXXXX XXXXXXX 5-10-05
------------------------------------ ------------------------------------
Xxxxxxx Xxxxxxx Date
/s/ XXXXX X. XXXXXX 5-10-05
------------------------------------ ------------------------------------
Xxxxx X. Xxxxxx Date
10 - STOCK SALE AND SETTLEMENT AGREEMENT
PDX/112816/141153/DLH/1386462.1
/s/ XXXXX X. XXXXXXXXXXX 5-11-05
------------------------------------ ------------------------------------
Xxxxx X. Xxxxxxxxxxx Date
11 - STOCK SALE AND SETTLEMENT AGREEMENT
PDX/112816/141153/DLH/1386462.1
