ACQUISITION AGREEMENT
by
and between
CEI
ACQUISITION, LLC
and
MICROFIELD
GROUP, INC.
relating
to the purchase and sale of
all
of the capital stock of
XXXXXXXXXXX
ELECTRIC, INC.
Dated
as of November 27, 2007
This
ACQUISITION AGREEMENT, dated November 27, 2007
(“Agreement”), is by and between CEI
Acquisition, LLC, an Oregon limited liability company
(“Purchaser”), and Microfield Group, Inc., an
Oregon corporation (“Seller”).
WHEREAS,
Seller is the record and beneficial owner of all of the issued and outstanding
shares of Common Stock and any other equity interest whatsoever (collectively,
the “Shares”) in the Xxxxxxxxxxx Electric,
Inc., an Oregon corporation (“Company”) as more
particularly set forth on Schedule 1 hereto;
WHEREAS,
Seller desires to sell, and Purchaser desires to purchase, the Shares on the
terms and subject to the conditions set forth in this Agreement;
WHEREAS,
certain capitalized terms used in this Agreement are defined in Section
8.16.
NOW,
THEREFORE, in consideration of the foregoing premises and the respective
representations and warranties, covenants and agreements contained herein,
the
parties hereto agree as follows:
ARTICLE
I
SALE
OF SHARES AND CLOSING
Section
1.1 Purchase
and Sale. Seller agrees to sell to Purchaser, and
Purchaser agrees to purchase from Seller, all of the right, title and interest
of Seller in and to the Shares at the Closing on the terms and subject to the
conditions set forth in this Agreement. The purchase and sale of the
Shares is referred to in this Agreement as the
“Acquisition.”
Section
1.2
Purchase Price. The aggregate purchase price
for all of Seller’s Shares (the “Purchase
Price”) shall be the sum of One Million Six Hundred Fifty
Thousand Dollars ($1,650,000); plus or minus the following:
(a) Net
Intercompany Payables. Minus any increase in the net
Intercompany Payables balance owed by Seller and its Affiliates to Purchaser
from September 29, 2007 to Closing, or plus
any decrease in the net Intercompany Payables balance owed by Seller and its
Affiliates to Purchaser from September 29, 2007 to Closing (“Intercompany
Payables”).
(b) Office
Equipment. Minus the fair value of any office equipment,
as set forth on Schedule 2, transferred from the Company to Seller or its
Affiliates from September 29, 2007 to Closing.
Section
1.3 Manner
of Payment of Purchase Price.
(a) Closing
Payment. At the Closing, Purchaser shall pay the
Purchase Price in readily available funds by wire transfer or otherwise, plus
or
minus any adjustments to the Purchase Price pursuant to Section
1.2(a)and Section
1.2(b)(the “Closing
Payment”).
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ACQUISTION AGREEMENT
(b) Manner
of Delivery of Shares. At the Closing, Seller shall
deliver to Purchaser certificates evidencing the Shares duly endorsed or
accompanied by valid stock powers duly executed in proper form for
transfer.
Section
1.4 Time
and Place of Closing. The closing of the Acquisition
(the “Closing”) shall take place at the offices
of White & Xxx, LLP, 000 X.X. Xxxxxxxx, Xxxxx 0000, Xxxxxxxx, XX 00000, as
soon as reasonably practicable following satisfaction of the conditions set
forth in Article
V of this Agreement. The date the Closing occurs is herein
referred to as the “Closing Date.”
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF SELLER
Seller
represents and warrants to Purchaser that the statements contained in this
Article
IIare true and correct, except as set forth in the disclosure
schedule attached hereto (the “Disclosure
Schedule”), each of which disclosures, in order to be
effective, shall clearly reference the appropriate section and, if applicable,
subsection of this Article
II to which it relates and each of which disclosures shall be deemed
to be incorporated by reference into the representations and warranties made
in
the appropriate section or subsection of this Article
II; provided, however, given that the primary principal of Purchaser, A.
Xxxx Xxxxxx (“Xxxxxx”), has been the president of the
Company since July of 2005, Seller shall not be in breach of any representation
or warranty in this Agreement for any provision that Xxxxxx, or any of the
managers of the Company, knows or reasonably should know is inaccurate or
incomplete.
Section
2.1
Organization of Company. The Company is
a corporation duly organized, validly existing and in good standing, under
the
laws of the State of Oregon and has full corporate power and authority to own
or
lease all of its respective properties and assets and to carry on the Business
as it is now being conducted. Seller has delivered to Purchaser a
complete and correct copy of its articles of incorporation, bylaws and any
other
of its organizational documents. Such organizational documents are in
full force and effect and the Company is not in violation of any provision
thereof.
Section
2.2 Authorization
of Transaction. Seller and the Company have full power
and authority to perform their or its respective obligations
hereunder. This Agreement and the agreement, instruments and
certificates executed pursuant thereto constitute valid and legally binding
obligations of Seller, enforceable in accordance with its respective terms
and
conditions. The Disclosure Schedule sets forth all known notices,
filings, authorizations, consents, or approvals needed from any government
or
governmental agency or “Third Party” to
consummate the transactions contemplated by this Agreement
(“Third Party Consents”).
Section
2.3 Noncontravention. To
Seller’s knowledge, neither the execution and the delivery of this Agreement,
nor the consummation of the transactions contemplated hereby, will:
(i) violate or conflict with any constitution, statute, regulation, rule,
injunction, judgment, Order, decree, ruling, charge, or other restriction of
any
government, governmental agency, or court, (ii) violate any provision of
the articles of incorporation or bylaws of the Seller or of the Company,
(iii) constitute a material violation or breach of, or conflict with, or
constitute or create a default under (with or without notice or the lapse of
time or both), or result in or give to any Person any right of termination,
cancellation, acceleration or modification in or with respect to, any agreement
or instrument to which Seller or the Company are a party, by which any of the
Shares or any property of the Company is bound, or to which Seller or the
Company or any of the Shares or such property is subject, or (iv) result in
the creation or imposition of any Encumbrance upon the Shares or any property
of
the Company. No Action, suit, or Proceeding is pending before any
court or quasi-judicial or administrative agency of any federal, state,
provincial, local, or foreign jurisdiction or before any arbitrator wherein
an
unfavorable injunction, judgment, Order, decree, ruling, or charge would
(i) prevent consummation of any of the transactions contemplated by this
Agreement, (ii) cause any of the transactions contemplated by this
Agreement to be rescinded following consummation, (iii) affect adversely
the right of Purchaser to own the Shares and to control the Company, or
(iv) have a Material Adverse Effect on the Company.
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ACQUISTION AGREEMENT
Section
2.4 Broker’s
Fees. Neither the Company nor Purchaser will have any
liability or obligation to pay any fees or commissions to any broker, finder,
or
agent engaged by Seller or its Affiliates (excluding the Company and Purchaser)
with respect to the transactions contemplated by this Agreement.
Section
2.5
Capitalization. The authorized capital
stock of the Company consists of 500 shares of Common Stock, of which 100 shares
of Common Stock are issued and outstanding and held by Seller. All of
the issued and outstanding Shares have been duly authorized, are validly issued,
fully paid, and non-assessable. There are no outstanding or
authorized options, warrants, purchase rights, subscription rights, preemptive
rights, conversion rights, exchange rights, or other Contracts or commitments
that could require the Company to issue, sell, or otherwise cause to become
outstanding any of its capital stock. There are no outstanding or
authorized stock appreciation, phantom stock, profit participation, or similar
rights with respect to the Company. There are no voting trusts,
proxies, or other agreements or understandings with respect to the voting of
the
capital stock of the Company.
Section
2.6
Shares. Seller holds of record and owns
beneficially the Shares free and clear of any restrictions on transfer, Taxes,
Encumbrances, options, warrants, purchase rights, Contracts, commitments,
equities, claims, and demands. Seller is not a party to any option,
warrant, purchase right, or other Contract or commitment that could require
Seller to sell, transfer, or otherwise dispose of any capital stock of the
Company (other than this Agreement). Seller is not a party to any
voting trust, proxy, or other agreement or understanding with respect to the
voting of any capital stock of the Company. At Closing, the Shares
shall constitute all of the issued and outstanding capital stock of the Company,
and as a result of this Agreement, Purchaser shall be the record and beneficial
owner of all capital stock of the Company, free of all
Encumbrances.
Section
2.7
Subsidiaries. The Company does not control
directly or indirectly or have any direct or indirect equity participation
in
any corporation, partnership, trust, or other business
association. The Company does not have any obligation or contractual
right to acquire any equity participation in any corporation, partnership,
trust, or other business association. The Company is not party to any
voting trusts, proxies, or other agreements or understandings with respect
to
the voting of any capital stock of any other corporation, partnership, trust,
or
other business association.
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ACQUISTION AGREEMENT
Section
2.8
Financial Statements. Attached hereto
as Exhibit A is a compiled balance sheet, profit and loss statement,
and statement of changes in equity dated as of September 29, 2007 and for the
nine-month period immediately preceding such date
(the “Interim Financial
Statements”). The Interim Financial Statements have
been prepared in accordance with GAAP applied on a basis consistent with
financial statements of previous years and present fairly the assets,
liabilities (whether accrued, absolute, contingent or otherwise) and financial
condition of the Company as of the date thereof and for the respective period
covered thereby. The financial position of the Company at Closing
shall not be materially different from what is shown in the Interim Financial
Statements.
Section
2.9
Events Subsequent to Interim Financial
Statements. To Seller’s knowledge, since the Interim
Financial Statements, there has not been any event that has had a Material
Adverse Effect on the Company. Without limiting the generality of the
foregoing, since that date, and except as set forth in the attached Disclosure
Schedule:
(a) the
Company has not accelerated, terminated, made material modifications to, or
canceled any material agreement, Contract, lease, or license to which the
Company is a party or by which it is bound;
(b) the
Company has not created any Encumbrance upon any of its assets, tangible or
intangible;
(c) the
Company has not created, incurred, assumed, or guaranteed any indebtedness
for
borrowed money and capitalized lease obligations;
(d) there
has been no change made or authorized in the articles of incorporation or bylaws
of the Company;
(e) the
Company has not issued, sold, or otherwise disposed of any of its capital stock,
or granted any options, warrants, or other rights to purchase or obtain
(including upon conversion, exchange, or exercise) any of its capital stock;
(f) there
has been no change in the method of accounting or keeping of books of account
or
accounting practices with respect to the Company; and
(g) the
Company has not committed to do any of the foregoing.
Section
2.10 Undisclosed
Liabilities. To Seller’s knowledge, the Company has no
material liability (whether known or unknown, whether asserted or unasserted,
whether absolute or contingent, whether accrued or unaccrued, whether liquidated
or unliquidated, and whether due or to become due, including any liability
for
taxes), except for liabilities set forth in the Interim Financial
Statements.
Section
2.11 Tax
Matters. The Company is not an “S” corporation within
the meaning of Section 1361(a) of the Internal Revenue Code (the “Code”), nor
has it been since Seller acquired all of its capital stock. Except as
set forth on the Disclosure Schedule, the Company has filed all federal and
state income tax returns when due, and there are no unpaid liabilities or
obligations (including penalties) for any income tax returns that are due but
have not been filed. The Company is not a party to and is not bound
by any tax sharing, tax indemnity or similar agreement. There are no
liens or encumbrances for any income tax that is due and payable prior to the
Closing Date upon any asset of the Company or the Company’s capital
stock. There are no claims or investigations by the Internal Revenue
Service or any other tax authority pending or, to the knowledge of Seller,
threatened against the Company for any past due income taxes. To
Seller’s knowledge, the Company has not participated in any tax shelter
described in Section 6111 of the Code and the Treasury Regulations thereunder
or
any transaction that is or was required to be registered or disclosed under
Sections 6111 and/or 6011 of the Code and Treasury Regulations
thereunder.
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ACQUISTION AGREEMENT
Section
2.12 Corporate
Records. The corporate records and minute books of the
Company, all of which have been provided to Purchaser, contain complete and
accurate minutes of all meetings of and corporate actions or written resolutions
of the directors, committees of directors and shareholders of the Company,
including all by-laws and resolutions passed by the directors, committees of
directors and shareholders of the Company for the period of time that Seller
owned the Company’s capital stock. All such meetings were duly called
and held, all such corporate actions and written resolutions were duly taken
or
validly signed and all such by-laws and resolutions were duly
passed. The share certificate books, register of shareholders,
register of transfers, register of directors and similar corporate records
of
the Company are complete, accurate and current.
Section
2.13 Litigation. The
Company is not (i) subject to any outstanding injunction, judgment, Order,
decree, ruling, or charge or (ii) a party, or to Seller’s knowledge,
threatened to be made a party to any Action, suit, Proceeding, hearing, or
investigation of, in, or before any court or quasi-judicial or administrative
agency of any federal, state, provincial, local, or foreign jurisdiction or
before any arbitrator.
Section
2.14
Real Property; Tangible Property.
(a) The
Company owns no real property.
(b) The
Disclosure Schedule describes all leases or agreements to lease under which
the
Company leases any real or immovable property (collectively, the
“Leases”). The names of the other
parties to the Leases, the description of the Leased Premises, the term, rent
and other amounts payable under the Leases and all renewal options available
under the Leases are accurately set out in the Disclosure
Schedule. Complete and correct copies of the Leases have been
provided to Purchaser.
Section
2.15 Guarantees. The
Company is not a guarantor or otherwise responsible for any liability or
obligation (including Indebtedness) of any other Person or entity.
Section
2.16
Certain Business Relationships with the
Company. Seller does not own any material asset,
tangible or intangible, which is used in the Business. All
Intercompany Payables are accurately reflected on the Disclosure
Schedule.
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ACQUISTION AGREEMENT
Section
2.17
Employment Matters.
(a) There
are no existing or, to Seller’s knowledge, threatened, labor strikes or labor
disputes, grievances, controversies or other labor troubles affecting the
Company or the Business.
(b) The
Company has complied with all applicable laws, rules, regulations and Orders
applicable to it relating to employment, including those relating to wages,
hours, collective bargaining, occupational health and safety, workers’ hazardous
materials, employment standards, pay equity and workers’ compensation, except
where the failure to comply would not have a Material Adverse Effect on the
Company. There are no outstanding charges or complaints against the
Company relating to unfair labor practices or discrimination or under any
legislation relating to employees.
Section
2.18 Employee
Benefit and Pension Plans.
(a) Except
as listed in the Disclosure Schedule, the Company does not have, and is not
subject to any present or future obligation or liability under, any pension
plan, deferred compensation plan, retirement income plan, stock option or stock
purchase plan, profit sharing plan, bonus plan or policy, employee group
insurance plan, hospitalization plan, disability plan or other employee benefit
plan, program, policy or practice, formal or informal, with respect to any
of
its employees.
(b) The
Disclosure Schedule also lists the general policies, procedures and work-related
rules in effect with respect to employees of the Company, whether written or
oral, including but not limited to policies regarding holiday, sick leave,
vacation, disability and death benefits, termination and severance pay,
automobile allowances and rights to company-provided automobiles and expense
reimbursements. (The plans, programs, policies, practices and
procedures listed in the Disclosure Schedule are collectively called the
“Benefit Plans”). Complete and
correct copies of all documentation establishing or relating to the Benefit
Plans listed in the Disclosure Schedule or, where such Benefit Plans are oral
commitments, written summaries of the terms thereof, and the most recent
financial statements and actuarial reports related thereto and all reports
and
returns in respect thereof filed with any regulatory agency within
three (3) years prior to the date hereof have been provided to
Purchaser.
(c) The
pension plans included in the Benefit Plans are registered under and are in
compliance with all applicable federal and state legislation, and all reports,
returns and filings required to be made thereunder have been
made. Such pension plans have been administered in accordance with
their terms and the provisions of applicable law. Each pension plan
has been funded in accordance with the requirements of such plans based on
actuarial assumptions which are appropriate to the employees of the Company
and
the Business. Based on such assumptions, there is no unfunded
liability under any such pension plan. No changes have occurred since
the date of the most recent actuarial report provided to Purchaser in respect
of
such pension plans which makes such report misleading in any material respect
and, since the date of such report, the Company has not made or granted or
committed to make or grant any benefit improvements to which members of the
pension plans are or may become entitled which are not reflected in such
actuarial report. No funds have been withdrawn by the Company from
any such pension plan or other Benefit Plans.
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ACQUISTION AGREEMENT
(d) There
are no pending claims by any employee covered under the Benefit Plans or by
any
other Person or entity which allege a breach of fiduciary duties or violation
of
applicable law or which may result in liability to the Company and, to the
best
of the knowledge of Seller, there is no basis for such a claim. There
are no employees or former employees of the Company who are receiving from
the
Company any pension or retirement payments, or who are entitled to receive
any
such payments, not covered by a pension plan to which the Company is a
party.
Section
2.19
Shareholders’ Agreements, etc. There
are no shareholders’ agreements, pooling agreements, voting trusts or other
similar agreements with respect to the ownership or voting of any of the shares
of the Company.
Section
2.20
Bank Accounts and Authorizations. The
Disclosure Schedule contains a list of all safe deposit boxes and bank accounts
of the Company and the names of all Persons or entities having access or signing
authority and of all powers of attorney given by the Company.
Section
2.21
Insurance. The Disclosure
Schedule contains a list of all insurance policies (including the name of the
insurer, policy number, amount of coverage, type of insurance, expiry date
and
details of pending claims) maintained by the Company in respect of its assets,
business operations, directors, officers and employees. True and
correct copies of all such insurance policies have been delivered to
Purchaser. All such insurance policies are valid and enforceable and
in full force and effect. The Company is not in default with respect
to the payment of any premium or compliance with any of the provisions contained
in any such insurance policy or has failed to give any notice or present any
claim within the appropriate time therefor. There are no
circumstances under which the Company would be required to or, to maintain
its
coverage, should give any notice to the insurers under any such insurance policy
which has not been given. The Company has not received notice from
any of the insurers regarding cancellation of such insurance
policy. The Company has not received notice from any of its insurers
denying any outstanding claims that could have a Material Adverse Effect on
the
Company during the six (6) month period prior to the Closing of this
Agreement.
Section
2.22
Disclosure. No representation or
warranty made by Seller or the Company in this Agreement or the exhibits or
schedules hereto or certificates delivered hereunder, contains or will contain
any untrue statement of a material fact, or omits or will omit to state a
material fact necessary to make the statements or facts contained herein or
therein not misleading in light of the circumstances under which they were
furnished.
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ACQUISTION AGREEMENT
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF PURCHASER
Purchaser
represents and warrants to Seller that each statement contained in this Article
III is true and correct as of the date hereof:
Section
3.1 Corporate
Existence of Purchaser. Purchaser is a limited liability
company duly organized, validly existing and in good standing under the laws
of
the State of Delaware. Purchaser has all requisite power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby.
Section
3.2 Authority. The
execution and delivery by Purchaser of this Agreement and the performance by
Purchaser of its obligations hereunder have been duly and validly authorized
by
the members of Purchaser. This Agreement has been duly and validly
executed and delivered by Purchaser and upon the execution and delivery by
the
Company and Seller, constitutes, legal, valid and binding obligations of
Purchaser enforceable against Purchaser in accordance with their
terms.
Section
3.3 No
Conflicts. The execution and delivery by Purchaser of
this Agreement do not, and the performance by Purchaser of its obligations
under
this Agreement and the consummation of the transactions contemplated hereby
will
not: (a) conflict with or result in a violation or breach of any
of the terms, conditions or provisions of the charter documents of Purchaser;
(b) conflict with or result in a violation or breach of any law or Order
applicable to Purchaser or any of its assets and properties; except as could
not
reasonably be expected to have a material adverse effect on the validity or
enforceability of this Agreement or on the ability of Purchaser to consummate
the transactions contemplated hereby or to perform any of its obligations
hereunder; or (c) constitute a material violation or breach of, or conflict
with, or constitute or create a default under (with or without notice or the
lapse of time or both), or result in or give to any Person any right of
termination, cancellation, acceleration or modification in or with respect
to,
any agreement or instrument to which Seller or the Company are a party, by
which
any of the Shares or any property of the Company is bound, or to which Seller
or
the Company or any of the Shares or such property is subject.
Section
3.4 Governmental
Approvals and Filings. No consent, approval or action
of, filing with or notice to any governmental or regulatory authority on the
part of Purchaser is required in connection with the due execution, delivery
or
performance of this Agreement or the consummation of the transactions
contemplated hereby.
Section
3.5 Legal
Proceedings. There are no Orders outstanding and no
Actions or Proceedings pending or, to the knowledge of Purchaser, threatened
against, relating to or affecting Purchaser which could reasonably be expected
to delay or to result in the issuance of an Order restraining, enjoining or
otherwise prohibiting or making illegal the consummation of any of the
transactions contemplated by this Agreement or otherwise to impair the ability
of Purchaser to perform its obligations under this Agreement and to consummate
the transactions contemplated hereby.
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ACQUISTION AGREEMENT
Section
3.6 Purchase
Entirely for Own Account. This Agreement is made with
Purchaser in reliance upon Purchaser’s representation to the Company, which, by
Purchaser’s execution of this Agreement, Purchaser hereby confirms, that the
Shares will be acquired for investment for Purchaser’s own account and not with
a view to the distribution of any part thereof, and that Purchaser has no
present intention of selling, granting any participation in, or otherwise
distributing the same in a manner contrary to the Securities Act of 1933, as
amended (the “Act”), or applicable state
securities laws.
Section
3.7 Disclosure
of Information; Due Diligence. Purchaser represents and
acknowledges that it has been solely responsible for its own “due diligence”
investigation of the Company and its management and business, for its own
analysis of the merits and risks of this investment, and for its own analysis
of
the fairness and desirability of the terms of the
investment. Purchaser represents that it has had an opportunity to
ask questions of and receive answers from Seller regarding the Company and
the
terms and conditions of the offering of the Shares and to obtain additional
information necessary to verify the accuracy of the information supplied or
to
which it had access.
Section
3.8 Investment
Experience; Accredited Investor Status. Purchaser is
able to fend for itself in the transactions contemplated by this Agreement,
can
bear the economic risk of its investment (including possible complete loss
of
such investment) for an indefinite period of time and has such knowledge and
experience in financial or business matters that it is capable of evaluating
the
merits and risks of the investment in the Securities. Purchaser
represents it has not been organized for the purpose of acquiring the
Shares. Purchaser understands that the Securities have not been
registered under the Act, or under the securities laws of any jurisdiction,
by
reason of reliance upon certain exemptions, and that the reliance of the Company
on such exemptions is predicated upon the accuracy of Purchaser’s
representations and warranties in this Article III. Purchaser
is familiar with Regulation D promulgated under the Act and is an
“accredited investor” as defined in Rule 501(a) of Regulation D.
Section
3.9 As-Is
Where-Is. Purchaser has had the opportunity to review
and inspect the business of the Company. Other than the
representations and warranties provided by Seller, Purchaser is purchasing
the
stock of the Company and the Company on an “As-Is Where-Is” basis with all
faults.
Section
3.10 U.S.
Bank Obligation. Purchaser represents that the entire
obligation owed to U.S. Bank by the Company, which is guaranteed by Seller,
will
be paid off at, or prior to the Closing, by Purchaser.
Section
3.11 Leases. Purchaser
will comply with the terms and conditions of the Company’s lease obligations and
assumes all obligations pursuant to said leases.
ARTICLE
IV
COVENANTS
OF SELLER AND PURCHASER
Section
4.1 Resignations. On
the Closing Date, Seller shall cause to be delivered to Purchaser, except with
respect to Xxxxxx, duly signed resignations, effective as of the Closing, of
all
members of the boards of directors of their positions as directors and of all
officers of their positions as officers of the Company.
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ACQUISTION AGREEMENT
Section
4.2 Mutual
Nondisparagement. Seller and Purchaser hereby covenant
and agree that, from and after the date of this Agreement, Seller and their
Affiliates and Purchaser and their Affiliates shall not make or cause to be
made
any oral or written statement, or take any other action, which disparages,
criticizes, damages the reputation of, or is inimical to, the other party or
any
of its Affiliates, including without limitation any statements or actions with
the Company’s employees and contractors.
Section
4.3 Mutual
Confidentiality. Seller and Purchaser hereby covenant
and agree that, from and after the date of this Agreement, Seller and their
Affiliates and Purchaser and its Affiliates shall keep confidential and not
disclose to any other Person or use for their own benefit or the benefit of
any
other Person any information regarding the Company or the terms of this
Agreement. The obligation of the parties under this Section
4.2shall not apply to information which: (a) is or becomes
generally available to the public without breach of the commitment provided
for
in this Section
4.3; or (b) is required to be disclosed by law, order or
regulation of a court or tribunal or government authority; provided, however,
that in any such case, the party seeking to disclose information shall notify
the other as early as reasonably practicable prior to disclosure to allow the
other party to take appropriate measures to preserve the confidentiality of
such
information. Notwithstanding the forgoing, each party and their
respective employees, representatives and agents may disclose to any and all
Persons, without limitation of any kind, the tax treatment and tax structure
of
the transactions contemplated herein and all materials of any kind (including
opinions and other tax analyses) that are provided to such party or such Person
relating to such tax treatment and tax structure. The authorization
to disclose set forth in this Section does not apply to the extent
non-disclosure is necessary to comply with securities laws, and does not extend
to disclosure of any other information, including: (i) any portion of any
materials to the extent not related to the tax treatment or tax structure of
the
transactions contemplated herein, (ii) the identities of participants or
potential participants in the transactions contemplated herein, (iii) the
existence or status of any negotiations, (iv) any pricing or financial
information (except to the extent such pricing or financial information is
related to the tax treatment or tax structure of the transactions contemplated
herein), or (v) any other term or detail not relevant to the tax treatment
or tax structure of the transactions contemplated herein.
Section
4.4 Public
Announcements. Seller and Purchaser shall not
disseminate any non-public information in any press release or other
announcement concerning the transactions contemplated by this Agreement except
as otherwise required by any applicable law, including without limitation
filings required by the federal securities laws, or court order, provided,
however, that Seller and Purchaser shall be permitted to make public
announcements if the parties consult and agree in good faith with the other
concerning the contents of any public announcements made prior to making such
disclosure.
Section
4.5
Third Party Consents. Seller shall
cause the Company, and Purchaser shall cooperate and assist, to obtain Third
Party Consents prior to Closing.
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ACQUISTION AGREEMENT
Section
4.6
Employee Matters.
(a) Without
affecting Purchaser’s rights to terminate an employee of the Company following
the Closing Date, it is Purchaser's current intention to cause the Company
to
retain substantially all of the current employees of the Company following
the
Closing.
(b) Nothing
contained herein, express or implied, is intended to: (i) create any third
party beneficiaries hereto or in any other way confer on any Person other than
the parties hereto or their respective successors and assigns, any rights
remedies obligations or liabilities under this Agreement, or (ii) limit the
discretion of Purchaser and the Company to amend or terminate any plan, policy
or employment practice of the Company any time following the
Closing.
Section
4.7
Tax Matters.
(a) Preparation
and Filing of Returns. Prior to Closing, Seller shall
use commercially reasonable efforts to prepare or cause to be prepared and
file
or cause to be filed all state and federal income tax returns of the Company
for
all taxable periods ending before Closing, except such returns which are not
due
(the
“Returns”). If
the Returns are not filed before the Closing, Seller shall continue to use
commercially reasonable efforts to cause the Returns to be filed in a timely
manner. Purchaser shall be afforded the opportunity to review such
Returns prior to filing. To the extent Purchaser reasonably believes
there is a material misstatement in any such Return, and Purchaser can provide
definitive proof of the misstatement, Seller shall not file such Return until
the material misstatement is corrected. Seller’s obligation to file
the Returns is suspended during the time in which the parties are attempting
to
resolve in good faith any disagreement about the contents of the
Returns.
(b) 338(h)(10)
Election. Purchaser may request that the Company and
Seller make elections under Section 338(h)(10) of the Internal Revenue Code,
or
other, similar sections of the Internal Revenue Code (and regulations
promulgated thereunder) if it is determined by the parties that such election
will not have any adverse impact on Seller.
(c) Cooperation. Purchaser
and Seller shall cooperate fully, as and to the extent reasonably requested
by
the other party, in connection with the preparation and filing of any Return
or
claim for refund and any audit, litigation or other proceeding with respect
to
the Company’s Taxes. Purchaser and Seller shall provide each other
with the information that either party is required to report pursuant to
Section 6043 of the Code.
(d) Payment
of Transfer Taxes and Fees. Seller shall pay Transfer
Taxes arising out of or in connection with the transactions effected pursuant
to
this Agreement, and shall indemnify, defend, and hold harmless Purchaser and
Purchaser’s Affiliates including, following the Closing, the Company with
respect to such Transfer Taxes. Seller and Purchaser shall cooperate
to ensure that all necessary documentation and Returns are filed with respect
to
any such Transfer Taxes.
(e) Termination
of Tax Sharing Agreements. Any and all Tax allocation or
sharing agreements or other agreements or arrangements binding the Company
shall
be terminated with respect to the Company as of the day before the Closing
Date
and, from and after the Closing Date the Company shall not be obligated to
make
any payment to Seller, Affiliate of Seller, Taxing Authority or other Person
pursuant to any such agreement or arrangement for any past or future
period.
11
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ACQUISTION AGREEMENT
Section
4.8 Cooperation. Purchaser
and Seller shall cooperate fully , and to the extent reasonably requested by
the
other party, in connection with any securities filings or other public company
compliance issues that may arise after consummation of the transactions
contemplated by this Agreement. Operating personnel costs above and
beyond normal operating costs determined to be needed by Purchaser at the time
of the cooperation, shall be borne by Seller as determined by a Shared Services
Agreement, which the parties agree to negotiate and execute in good faith as
soon as practical. The Shared Services Agreement shall also cover,
among other things, allocation of rent and office expenses incurred during
the
time in which the Seller utilizes Purchaser’s office space and resources and
shall be in a form that is substantially similar to past practices and will
have
a term of no longer than three (3) months from the Closing.
Section
4.9 Shareholder
Meeting. Seller shall hold a shareholder meeting for the
approval of the Acquisition (the “Shareholder
Meeting”) as soon as possible following the execution of this
Agreement. Seller’s Board of Directors shall recommend to
shareholders to vote “for” the Acquisition. Seller shall use its
reasonable best efforts to cause the holders of a majority of the outstanding
shares of Seller’s capital stock to enter into a Voting Agreement attached
hereto as Exhibit C (the “Voting Agreement”)
and to cause a quorum to be present at the Shareholder Meeting.
Section
4.10 Employee
Stock Options. At or prior to Closing, Seller shall take
all action so that all outstanding stock options issued by Seller to the
Company’s employees and contractors shall be, effective upon Closing, fully
exercisable and not subject to any further vesting or other contingencies (other
than payment of the purchase price for such option), and such options shall
remain exercisable for a period of not more than sixty (60) days following
the
Closing Date; however, this section does not apply to any of Seller’s Board
members as of the Closing.
Section
4.11 No
Shop. Commencing on November 27, 2007, and ending upon
termination of this Agreement, Seller and the Company, through Seller’s
investment banker or otherwise, shall not solicit offers or proposals to
purchase substantially all of the assets of the Company, a controlling interest
in the capital stock of the Company or any other transaction concerning the
voting control or ownership of the Company (an
“Offer”). If Seller or its agents
receive any communication concerning an Offer, Seller shall immediately transmit
such communication to Purchaser.
Section
4.12 Seller’s
Assignment of Rights and Purchaser’s Assumption of
Obligations. Effective as of Closing, Seller assigns and
transfers to Purchaser, and Purchaser assumes, all its obligations, right,
title
and interest in and to and arising from that certain Agreement and Plan of
Merger by and among Microfield Group, Inc., CPS Acquisition Co., Xxxxxxxxxxx
Electric, Inc. and CEAC, Inc. dated as of July 20, 2005. The parties
acknowledge that the consent of the other parties to such agreement may be
required to effectuate such assignment, and to the extent any other party
endeavors to provide such consent, Seller shall cooperate to provide the
assignment contemplated by this Section
4.12.
12
-
ACQUISTION AGREEMENT
Section
4.13 Conduct
of Business. During the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
or the Closing, except as expressly contemplated by this Agreement, Seller
shall
cause the Company to (i) conduct its business in the ordinary course consistent
with past practice, and shall use its best efforts to preserve intact its
business organization, financial condition, and relationships with third
parties, and to keep available the services of its employees, and (ii) manage
and maintain its working capital and financial condition at levels reasonably
consistent with its historic seasonally adjusted working capital and financial
condition.
ARTICLE
V
CONDITIONS
TO OBLIGATIONS OF THE PARTIES
Section
5.1 Obligations
of Both Parties. The obligations of both parties to
consummate the Acquisition are subject to the satisfaction on or prior to the
Closing Date of each of the following conditions:
(a) Orders
and Laws. There shall not be in effect on the Closing
Date any Order or law restraining, enjoining or otherwise prohibiting or making
illegal the consummation of any of the transactions contemplated by this
Agreement.
(b) Regulatory
Consents and Approvals. All consents, approvals and
actions of, filings with and notices to any governmental or regulatory authority
necessary to permit Seller and Purchaser to perform their obligations under
this
Agreement and to consummate the transactions contemplated hereby shall have
been
duly obtained, made or given and shall be in full force and effect, and all
waiting periods imposed by any governmental or regulatory authority necessary
for the consummation of the transactions contemplated by this Agreement, shall
have expired or been terminated.
Section
5.2 Obligations
of Purchaser. The obligations of Purchaser to purchase
the Shares pursuant to Article
I are subject to the fulfillment on or prior to the Closing Date
of
each of the following conditions (all or any of which may be waived in whole
or
in part by Purchaser in its sole discretion):
(a) Representations
and Warranties. The representations and warranties made
by Seller in this Agreement shall be true and correct on and as of the Closing
Date or, in the case of representations and warranties made as of a specified
date earlier than the Closing Date, on and as of such earlier date.
(b) Performance. Seller
and the Company in all material respects shall have performed and complied
with,
the agreements, covenants and obligations required by this Agreement to be
so
performed or complied with by such parties at or before the
Closing.
(c) Third
Party Consents and Releases. The Third Party Consents to
the transactions contemplated by this Agreement (or in lieu thereof waivers
of
any rights triggered by consummation of the transactions contemplated by this
Agreement), shall have been obtained and shall be in full force and
effect. There shall be no pending or threatened lawsuit challenging
the transaction by any body or agency of the federal, state or local government
or by any Third Party, and the consummation of the transaction shall not have
been enjoined by a court of competent jurisdiction as of the Closing and any
applicable waiting period under any applicable federal law shall have
expired.
13
-
ACQUISTION AGREEMENT
(d) Officer’s
Certificate. Seller shall have delivered to Purchaser a
certificate, dated the Closing Date and executed by an executive officer of
the
Company other than Xxxxxx, certifying to the satisfaction of the conditions
set
forth in Section
5.2(a) and Section
5.2(b)(the “Officer’s
Certificate”).
(e) Secretary’s
Certificate. Seller shall have delivered to Purchaser a
certificate, dated the Closing Date and executed by the Secretary of the
Company, certifying as to the truth and accuracy of, and attaching copies of
the
(i) the Company’s articles of incorporation as in effect at the time of the
Closing, (ii) the Company’s Bylaws as in effect at the time of the Closing,
(iii) resolutions approved by the Company’s Board of Directors authorizing the
transactions contemplated hereby, and (iv) resolutions approved by the Seller,
as the Company’s sole shareholder, authorizing the transactions contemplated
hereby.
(f) Bank
Accounts. Seller shall have caused each of the bank
accounts set forth on the Disclosure Schedule to have been duly assigned and
transferred to Purchaser as of the Closing.
(g) Seller’s
Assets. All assets and equipment personally owned by
Seller which are used by the Company or necessary for the conduct of the
Business shall have been transferred to the Company pursuant to a xxxx of sale
in substantially the form attached hereto as Exhibit B (the
“Xxxx of Sale”).
(h) Absence
of Litigation or Threat of Litigation. There shall be no
pending or threatened claim, investigation, Action, suit or Proceeding of any
kind against the Company as of the Closing that could have a Material Adverse
Effect on the Company.
Section
5.3 Obligations
of Seller. The obligations of Seller to sell the Shares
pursuant to Article
Iare subject to the fulfillment on or prior to the Closing Date of
each of the following conditions (all or any of which may be waived in whole
or
in part by Seller in their sole discretion):
(a) Representations
and Warranties. The representations and warranties made
by Purchaser in this Agreement shall be true and correct on and as of the
Closing Date or, in the case of representations and warranties made as of a
specified date earlier than the Closing Date, on and as of such earlier
date.
(b) Performance. Purchaser
in all material respects shall have performed and complied with, the agreements,
covenants and obligations required by this Agreement to be so performed or
complied with by Purchaser at or before the Closing.
14
-
ACQUISTION AGREEMENT
ARTICLE
VI
CLOSING
DELIVERIES
Section
6.1 Form
of Documents. At the Closing, the parties shall deliver
the documents, and shall perform the acts, which are set forth in this Article
VI. All documents which Seller deliver shall be in form
and substance reasonably satisfactory to Purchaser and Purchaser’s
counsel. All documents which Purchaser delivers shall be in form and
substance reasonably satisfactory to Seller and Seller’s counsel.
Section
6.2 Purchaser’s
Deliveries. Subject to the fulfillment or waiver of the
conditions set forth in Section
5.1and Section
5.2,Purchaser shall execute and/or deliver the following to
Seller:
(a) the
Closing Payment;
(b) Purchaser’s
Certificate. Purchaser shall have delivered to Seller a
certificate dated the Closing Date and executed by a manager or authorized
member of Purchaser, certifying to the satisfaction of the conditions set forth
in Section
5.3(a) and Section
5.3(b).
(c) Without
limitation by specific enumeration of the foregoing, all other documents
reasonably required from Seller to consummate the transactions contemplated
hereby.
Section
6.3
Seller’s Deliveries. Subject to the
fulfillment or waiver of the conditions set forth in Section
5.1 and Section 5.3, Seller shall execute or deliver to
Purchaser all of the following:
(a) certificates
representing all outstanding Shares, duly endorsed or with duly executed stock
powers attached;
(b) physical
possession of all records, tangible assets, licenses, policies, contracts,
plans, leases or other instruments owned by or pertaining to the Company which
are in the possession of Seller;
(c) the
minute books and stock records of the Company;
(d) the
written resignations effective as of the Closing Date of such directors and
officers of the Company as requested by Purchaser to resign;
(e) the
consents of third parties to the transactions contemplated by this Agreement
(or
in lieu thereof waivers of any rights triggered by consummation of the
transactions contemplated by this Agreement);
(f) Officer’s
Certificate;
(g) Secretary’s
Certificate;
(h) Interim
Financial Statements; and
15
-
ACQUISTION AGREEMENT
(i) without
limitation by specific enumeration of the foregoing, all other documents
reasonably required from Seller to consummate the transactions contemplated
hereby.
Section
6.4 Joint
Deliveries. At the Closing, Seller and Purchaser shall
execute and deliver the following:
(a) Mutual
Release of Intercompany Claims; and
(b) Voting
Agreement.
ARTICLE
VII
INDEMNIFICATION
The
rights and obligations of the parties under this Agreement shall be subject
to
the following terms and conditions:
Section
7.1 Survival
of Representations and Warranties. All representations
and warranties made in this Agreement will survive the Closing of this
Agreement, except that any Party to whom a representation or warranty has been
made in this Agreement will be deemed to have waived any misrepresentation
or
breach of the representation or warranty if the Party had knowledge of such
breach before the Closing. The representations and warranties in this
Agreement will terminate one (1) year after the Closing Date, and such
representations or warranties will thereafter be without force or effect, except
for any claim with respect to which notice has been given to the potential
indemnifying party before such expiration date.
Section
7.2 Indemnification
by Seller.
(a) Extent
of Indemnification. Seller hereby agrees to indemnify
and to hold the Purchaser and its Affiliates, successors and assigns
(“Purchaser’s Indemnified Persons”) harmless
from and against any and all claims, liabilities, obligations, costs, and
expenses, including reasonable attorney fees (collectively,
“Damages”) arising out of or related
to:
(i) Any
breach or inaccuracy of any representation or warranty of the Seller made in
this Agreement or any Related Document; or
(ii) Any
failure by the Seller to perform any covenant required to be performed by it
pursuant to this Agreement or any Related Document; or
(b) Notice
of Claim. If any claim is asserted against the Purchaser
that would give rise to a claim by the Purchaser against the Seller for
indemnification under the provisions of this Section, then the Purchaser will
promptly give written notice to the Seller concerning such claim and the Seller
will, at no expense to the Purchaser, defend the claim.
(c) Limit
on Indemnification. The Seller will not be required to
indemnify the Purchaser for an amount that exceeds
$2,300,000.
16
-
ACQUISTION AGREEMENT
Section
7.3 Indemnification
by Purchaser. The Purchaser agrees to defend, indemnify,
and hold harmless the Seller, its Affiliates, successors and assigns
(“Seller’s Indemnified Persons”) from and
against all Damages arising out of or related to:
(a) Any
breach or inaccuracy of any representation or warranty of the Purchaser made
in
this Agreement or any Related Document;
(b) Any
failure by the Purchaser to perform any covenant required to be performed by
the
Purchaser pursuant to this Agreement or any Related Document; or
(c) Any
claim against a guarantee made by Seller that was made for the benefit of the
Company unless the Seller has not otherwise agreed in writing to continue as
guarantor after the Closing.
Section
7.4 Defense
of Claim by Purchaser. If any claim is asserted against
the Seller that would give rise to a claim by the
Seller against the Purchaser for indemnification under the
provisions of this Article VII, then the Seller will promptly
give written notice to the Purchaser concerning such claim and the Purchaser
will, at no expense to the Seller or the Company, defend the claim.
Section
7.5 Limits
on Indemnification. Notwithstanding the foregoing, the
liability of the Seller or the Purchaser under Section
7.2 and Section 7.3will be subject to the following
limitations:
(a) Seller’s
Liability. The liability of the Seller pursuant to Section
7.2 is limited as follows:
(i) No
claim for indemnity will be effective if not made within one (1) year after
the
Closing Date.
(ii) The
maximum aggregate amount of the Seller’s liability is the amount set forth in
Section
7.2(c).
(iii) The
Seller will not have any indemnification obligation with respect to the first
$25,000 of Damages of the Purchaser’s Indemnified Persons as a group unless
Damages of the Purchaser’s Indemnified Persons as a group equal or exceed such
amount, in which case the Seller’s obligations under Section
7.2 will include the amount of Damages in excess of such
amount.
(b) Purchaser’s
Liability. The Purchaser’s obligations pursuant to Section
7.3 are limited as follows:
(i) No
claim for indemnity will be effective if not made within one
(1) year after the Closing Date;
(ii) The
maximum aggregate amount of the Purchaser’s liability is $2,300,000;
and
17
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ACQUISTION AGREEMENT
(iii) The
Purchaser will not have any indemnification obligation with respect to the
first
$25,000 of Damages of the Seller’s Indemnified Persons as a group unless Damages
of the Seller’s Indemnified Persons as a group equal or exceed such amount, in
which case the Purchaser’s obligations under Section
7.3 shall include the amount of Damages in excess of such
amount.
Section
7.6
Indemnification Procedure.
(a) Third-Party
Claims.
(i) Each
indemnified party will, with reasonable promptness after obtaining knowledge
thereof, provide the indemnifying party with written notice of all third-party
actions, suits, proceedings, claims, demands, or assessments that may be subject
to the indemnification provisions of Section 7.6(a)(collectively,
“Third-Party Claims”), including, in reasonable
detail, the basis for the claim, the nature of Damages, and a good-faith
estimate of the amount of Damages.
(ii) The
indemnifying party will have fifteen (15) days after its receipt of the claim
notice to notify the indemnified party in writing whether the indemnifying
party
agrees that the claim is subject to Section
7.6(a)and, if so, whether the indemnifying party elects to undertake,
conduct, and control, through counsel of its choosing (subject to the consent
of
the indemnified party, such consent not to be withheld unreasonably), and at
its
sole risk and expense, the good-faith settlement or defense of the Third-Party
Claim.
(iii) If,
within fifteen (15) days after its receipt of the claim
notice, the indemnifying party notifies the indemnified party that it elects
to
undertake the good-faith settlement or defense of the Third-Party Claim, the
indemnified party will reasonably cooperate with the indemnifying party in
connection therewith including, without limitation, by making available to
the
indemnifying party all relevant information material to the defense of the
Third-Party Claim. The indemnified party will be entitled to
participate in the settlement or defense of the Third-Party Claim through
counsel chosen by the indemnified party, at its expense. If the
proposed settlement would impose an obligation or duty on the indemnified party,
the indemnified party will have the right to approve the settlement, and, in
that case the settlement may not be undertaken without such
approval. As long as the indemnifying party is contesting the
Third-Party Claim in good faith and with reasonable diligence, the indemnified
party will not pay or settle the Third-Party Claim. Notwithstanding
the foregoing, the indemnified party will have the right to pay or settle any
Third-Party Claim at any time, provided that in such event it waives any right
to indemnification therefor by the indemnifying party.
(iv) If
the indemnifying party does not provide notice that it elects to undertake
the
good-faith settlement or defense of the Third-Party Claim, or if the
indemnifying party fails to contest the Third-Party Claim or to undertake or
approve settlement, in good faith and with reasonable diligence, the indemnified
party will thereafter have the right to contest, settle, or compromise the
Third-Party Claim at its exclusive discretion, at the risk and expense of the
indemnifying party, and the indemnifying party will thereby waive any claim,
defense, or argument that the indemnified party’s defense or settlement of such
Third-Party Claim is in any respect inadequate or unreasonable.
18
-
ACQUISTION AGREEMENT
(v) A
party’s failure to give timely notice will not constitute a defense (in part or
in whole) to any claim for indemnification by such party, except if, and only
to
the extent that, such failure results in any material prejudice to the
indemnifying party.
(b) Claims
Other than Third-Party Claims.
(i) Each
indemnified party will, with reasonable promptness, deliver to the indemnifying
party written notice of all claims for indemnification under Section
7.6, other than Third-Party Claims, including, in reasonable detail,
the basis for the claim, the nature of Damages, and a good-faith estimate of
the
amount of Damages.
(ii) The
indemnifying party will have thirty (30) days after its receipt of the claim
notice to notify the indemnified party in writing whether or not the
indemnifying party accepts liability for all or any part of the Damages
described in the claim notice. If the indemnifying party does not so
notify the indemnified party, the indemnifying party will be deemed to accept
liability for all the Damages described in the claim notice.
(iii) A
party’s failure to give timely notice will not constitute a defense (in part or
in whole) to any claim for indemnification by such party, except if, and only
to
the extent that, such failure results in any material prejudice to the
indemnifying party.
ARTICLE
VIII
MISCELLANEOUS
Section
8.1 Termination. At
any time prior to Closing, this Agreement may be terminated as
follows:
(a) By
Purchaser. This Agreement may be terminated by Purchaser
if (i) Seller breaches any of its representations, warranties, covenants or
obligations hereunder and such breach shall not have been cured within ten
(10)
business days of receipt by Purchaser of written notice of such breach, (ii)
if
the Board of Directors of Seller withdraws, modifies or changes its
recommendation that its shareholders approve the Acquisition, or if the approval
of the shareholders is not obtained at the Shareholder Meeting, or (iii) the
Board of Directors of Seller does not approve this Agreement by November 30,
2007.
(b) By
Seller. This Agreement may be terminated by Seller’s
written notice to Purchaser if (i) Purchaser breaches any of its
representations, warranties, covenants or other obligations hereunder and such
breach shall not have been cured within ten (10) business days following receipt
by Purchaser of written notice of such breach.
(c) Mutual
Consent. This Agreement may be terminated by the mutual
consent of Seller and Purchaser.
19
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ACQUISTION AGREEMENT
Section
8.2
Notices. Any notice, request, demand,
waiver, consent, approval or other communication that is required or permitted
hereunder shall be in writing and shall be deemed given (a) on the date
established by the sender as having been delivered personally, (b) on the
date delivered by a private courier as established by the sender by evidence
obtained from the courier, (c) on the date sent by facsimile, with
confirmation of transmission, if sent during normal business hours of the
recipient, if not, then on the next Business Day, or (d) on the fifth day
after the date mailed, by certified or registered mail, return receipt
requested, postage prepaid. Such communications, to be valid, must be
addressed as follows:
If
to Purchaser, to:
|
||
CEI
Acquisition, LLC
|
||
000
XX Xxxxxxxx Xxx., Xxxxx 000
|
||
Xxxxxxxx,
Xxxxxx 00000
|
||
Attention:
A. Xxxx Xxxxxx
|
||
Facsimile:
(000) 000-0000
|
||
with
required copies to:
|
||
Xxx
X. Xxxxxxx
|
||
White
& Xxx LLP
|
||
000
XX Xxxxxxxx, Xxxxx 0000
|
||
Xxxxxxxx,
Xxxxxx 00000
|
||
Facsimile:
(000) 000-0000
|
||
If
to Seller, to:
|
||
Microfield
Group, Inc.
|
||
000
XX Xxxxxxxx Xxx., Xxxxx 000
|
||
Xxxxxxxx,
Xxxxxx 00000
|
||
Attention:
Xxxxx Xxxx
|
||
Facsimile:
(000) 000-0000
|
||
With
a required copy to:
|
||
Xxxxxxxx
X. Xxxxxxx
|
||
Xxxx
Xxxxxx Xxxxx Xxxxxxx & Tongue LLP
|
||
000
XX Xxxxx Xxxxxx, Xxxxx 0000
|
||
Xxxxxxxx,
Xxxxxx 00000
|
||
Facsimile:
(000) 000-0000
|
or
to
such other address or to the attention of such Person or Persons as the
recipient party has specified by prior written notice to the sending party
(or
in the case of counsel, to such other readily ascertainable business address
as
such counsel may hereafter maintain). If more than one method for
sending notice as set forth above is used, the earliest notice date established
as set forth above shall control.
Section
8.3 Amendments
and Waivers. Any provision of this Agreement may be
amended or waived if, and only if, such amendment or waiver is in writing and
is
signed, in the case of an amendment, by Purchaser and Seller, or in the case
of
a waiver, by the party against whom the waiver is to be effective. No
failure or delay by any party in exercising any right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. To the maximum extent permitted by
Law, (i) no waiver that may be given by a party shall be applicable except
in the specific instance for which it was given and (ii) no notice to or
demand on one party shall be deemed to be a waiver of any obligation of such
party or the right of the party giving such notice or demand to take further
action without notice or demand.
20
-
ACQUISTION AGREEMENT
Section
8.4 Expenses. Except
as otherwise expressly provided in this Agreement whether or not the
transactions contemplated hereby are consummated, Purchaser will pay its own
costs and expenses (including all legal and accounting fees and expenses),
and
Seller will pay their and the Company’s costs and expenses (including all legal
and accounting fees and expenses), incurred in connection with the negotiation,
execution and closing of this Agreement and the transactions contemplated hereby
and thereby. If the Company is sold to a third party and not to
Purchaser or if Seller’s Board of Directors does not approve this Agreement by
November 30, 2007, Seller shall promptly pay all costs, fees and other expenses,
including attorney fees, of Purchaser.
Section
8.5
Successors and Assigns. This
Agreement may not be assigned by either party hereto without the prior written
consent of the other party; provided, however, that
without such consent, Purchaser may transfer or assign, in whole or in part
or
from time to time, to one or more of its Affiliates, the right to purchase
all
or a portion of the Shares, but no such transfer or assignment will relieve
Purchaser of its obligations hereunder. Subject to the foregoing, all
of the terms and provisions of this Agreement shall inure to the benefit of
and
be binding upon the parties hereto and their respective successors and
assigns.
Section
8.6 Governing
Law. This Agreement and the exhibits and schedules
hereto shall be governed by and interpreted and enforced in accordance with
the
Laws of the State of Oregon, without giving effect to any choice of Law or
conflict of Laws rules or provisions (whether of the State of Oregon or any
other jurisdiction) that would cause the application of the Laws of any
jurisdiction other than the State of Oregon.
Section
8.7
Attorneys’ Fees. In the event of any
controversy or claim arising under this Agreement, the prevailing party in
such
controversy or claim shall be entitled to reimbursement from the non-prevailing
party of attorneys’ fees and costs reasonably incurred by such prevailing party
in the resolution of such controversy or claim.
Section
8.8
Counterparts. This Agreement may
be executed in counterparts, and either party hereto may execute any such
counterpart, each of which when executed and delivered shall be deemed to be
an
original and both of which counterparts taken together shall constitute but
one
and the same instrument. This Agreement shall become effective when
each party hereto shall have received a counterpart hereof signed by the other
party hereto. The parties agree that the delivery of this Agreement
may be effected by means of an exchange of signatures by facsimile or other
electronic methods.
Section
8.9 No
Third-Party Beneficiary. The terms and provisions of
this Agreement are intended solely for the benefit of each party hereto and
their respective successors or permitted assigns, and it is not the intention
of
the parties to confer third-party beneficiary rights upon any other Person
other
than any Person entitled to indemnity under Article
VII.
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ACQUISTION AGREEMENT
Section
8.10 Entire
Agreement. This Agreement and the documents, instruments
and other agreements specifically referred to herein or delivered pursuant
hereto set forth the entire understanding of the parties hereto with respect
to
the Acquisition. All exhibits and schedules referred to herein are
intended to be and hereby are specifically made a part of this
Agreement. Any and all previous agreements and understandings between
or among the parties regarding the subject matter hereof, whether written or
oral, are superseded by this Agreement.
Section
8.11
Captions. All captions contained in this
Agreement are for convenience of reference only, do not form a part of this
Agreement and shall not affect in any way the meaning or interpretation of
this
Agreement.
Section
8.12 Severability. Any
provision of this Agreement that is invalid or unenforceable in any jurisdiction
shall be ineffective to the extent of such invalidity or unenforceability
without invalidating or rendering unenforceable the remaining provisions hereof,
and any such invalidity or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
Section
8.13 Specific
Performance. Purchaser and Seller agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed by them in accordance with the terms hereof and that each
party shall be entitled to specific performance of the terms hereof, in addition
to any other remedy at Law or equity.
Section
8.14 Board
Approval. Seller’s obligations under this Agreement are
subject to final approval by the Board of Directors of Seller.
Section
8.15 Disclosure
Schedules. Seller will prepare the Disclosure Schedules
by December 10, 2007.
Section
8.16 Certain
Definitions. When used in this Agreement, the following
terms shall have the meanings assigned to them in this Section
8.16.
“Act”
has the meaning assigned in Section
3.6.
“Acquisition”
has the meaning assigned in Section
1.1.
“Actions”
or “Proceedings” means any action, suit,
proceeding, arbitration or governmental or regulatory authority
investigation.
“Affiliate”
means any Person that directly, or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with
the
Person specified.
“Benefit
Plans” has the meaning assigned in Section
2.18.
“Xxxx
of Sale” has the meaning assigned in Section
5.2(g).
22
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ACQUISTION AGREEMENT
“Business”
means the Company’s business of electrical contracting services and the sale of
related electrical and technology products.
“Business
Day” means a day that is not a Saturday, a Sunday or a
statutory or civic holiday in the State of Oregon, or any other day on which
the
principal offices of either Seller or Purchaser are closed or become closed
prior to 2:00 p.m. local time whether in accordance with established
company policy or as a result of unanticipated events, including adverse weather
conditions.
“CERCLA”
means Comprehensive Environmental Response, Compensation and Liability Act
of
1980, as amended.
“Closing”
has the meaning assigned in Section 1.4.
“Closing
Date” has the meaning assigned in Section
1.4.
“Closing
Payment” has the meaning assigned in Section
1.3(a).
“Code”
means the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder.
“Company”
has the meaning assigned in the recitals of this Agreement.
“Contract”
or “Contracts” means any written or oral
contract, agreement or understanding between two or more parties.
“Damages”
has the meaning assigned in Section 7.2(a).
“Disclosure
Schedule” has the meaning assigned in the forepart of
Article II.
“Encumbrances”
means any mortgage, pledge, assessment, security interest, lease, lien, adverse
claim, levy, charge, option, right of first refusal, restriction of any kind,
or
any conditional sale Contract, title retention Contract or other Contract to
give any of the foregoing.
“Environmental
Claim” means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, directives, claims, liens,
investigations, proceedings or notices of noncompliance or violation (written
or
oral) by any Person alleging potential liability (including potential liability
for enforcement, investigation costs, cleanup costs, governmental response
costs, removal costs, remedial costs, natural resources damages, property
damages, personal injuries or penalties) arising out of, based on or resulting
from: (i) the presence or Release into the environment of any Hazardous
Substance at any location, whether or not owned by Seller; or
(ii) circumstances forming the basis of any violation or alleged violation
of any Environmental Law; or (iii) any and all claims by any Person seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from the presence or Release of any Hazardous
Substances.
23
-
ACQUISTION AGREEMENT
“Environmental
Laws” means all federal, state or local statutes, laws, rules,
ordinances, codes, rule of common law, regulations, judgments and orders in
effect on the Closing Date and relating to protection of human health or the
environment (including ambient air, surface water, ground water, drinking water,
wildlife, plants, land surface or subsurface strata), including laws and
regulations relating to Releases or threatened Releases of Hazardous Substances,
or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous
Substances.
“Environmental
Permits” means all environmental, health and safety permits,
licenses, registrations, and governmental approvals and
authorizations.
“GAAP”
means United States generally accepted accounting principles, consistently
applied throughout the specified period and in the immediately prior comparable
period.
“Hazardous
Substances” means: (i) any petroleum or petroleum
products, radioactive materials, asbestos in any form, mold, mildew, urea
formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing regulated levels of polychlorinated biphenyls (PCBs)
and radon gas; and (ii) any chemicals, materials or substances which are
now or ever have been defined as or included in the definition of “hazardous
substances,” “hazardous wastes,” “hazardous materials,” “extremely hazardous
wastes,” “restricted hazardous wastes,” “toxic substances,” “toxic pollutants,”
or other words of similar import, under any Environmental Law.
“Indebtedness”
of any Person means all obligations of such Person (i) for borrowed money,
(ii) evidenced by notes, bonds, debentures or similar instruments,
(iii) for the deferred purchase price of goods or services (other than
trade payables or accruals incurred in the ordinary course of business),
(iv) under capital leases and (v) in the nature of guarantees of the
obligations described in clauses (i) through (iv) above of any other
Person.
“Intellectual
Property Rights” means all rights, if any, existing now or in
the future under patent law, copyright law, industrial design rights law,
semiconductor chip and mask work protection law, moral rights law, trade secret
law, trademark law, domain name law, unfair competition law, publicity rights
law, privacy rights law, and any and all similar proprietary rights, and any
and
all applications for registration, registrations, letters patent, renewals,
extensions, divisions, continuations, reissues, and restorations thereof, now
or
hereafter in force and effect anywhere in the world.
“Intercompany
Payables” has the meaning assigned in Section
2.16.
“Interim
Financial Statements” has the meaning assigned in Section
2.8.
“Leases”
has the meaning assigned in Section 2.14(b).
“Liabilities”
means all Indebtedness, obligations and other liabilities of a Person (whether
absolute, accrued, contingent, asserted, unasserted, fixed or otherwise, or
whether due or to become due).
24
-
ACQUISTION AGREEMENT
“Loss”
or “Losses” means any and all damages, fines,
penalties, deficiencies, losses, judgments, costs and expenses (including
interest, court costs, reasonable fees of attorneys, accountants and other
experts) and other reasonable expenses of litigation or other proceedings with
respect to any claim, default or assessment.
“Material
Adverse Effect” shall mean a material adverse effect on the
Business, operations, results of operations, financial condition, assets,
liabilities and sales of the Company; provided, however, that a Material Adverse
Effect shall not include (i) any effect or change, including changes in
national, international, or regional conditions, relating to or affecting the
industries in which the Company, its customers or suppliers do business,
(ii) changes or possible changes in foreign, federal, state or local laws,
statutes or regulations, or (iii) the loss of any customers or suppliers
solely as a result of any announcement relating to the transactions contemplated
under this Agreement..
“Officer’s
Certificate” has the meaning assigned in Section
5.2(d).
“Order”
means any writ, judgment, decree, injunction or similar order of any
governmental or regulatory authority (in each such case whether preliminary
or
final).
“Party”
or “Parties” means an individual, a
corporation, a partnership, a limited liability company, a trust, an
unincorporated association, a governmental entity, or any other entity or
body.
“Permits”
means all permits, licenses, certificates of authority, authorizations,
approvals, registrations, franchises and similar consents granted or issued
by
any governmental or regulatory authority.
“Person”
or “Persons” means an individual, a
corporation, a partnership, a limited liability company, a trust, an
unincorporated association, a governmental entity, or any other entity or
body.
“Purchaser’s
Indemnified Persons” has the meaning assigned in Section
7.2(a).
“Purchase
Price” has the meaning assigned in Section
1.2.
“Purchaser”
has the meaning assigned in the forepart of this Agreement.
“Release”
means any release, spill, emission, emptying, leaking, injection, deposit,
disposal, discharge, dispersal, leaching, pumping, pouring, or migration into
the atmosphere, soil, surface water, groundwater or property.
“Returns”
has the meaning assigned in Section 4.7(a).
“Seller”
has the meaning assigned in the forepart of this Agreement.
“Seller’s
Indemnified Persons” has the meaning assigned in Section
7.3.
“Shareholder
Meeting” has the meaning assigned in Section
4.9.
25
-
ACQUISTION AGREEMENT
“Shares”
has the meaning assigned in the recitals of this Agreement.
“Tax”
or Taxes” means any and all federal, state and
local taxes of any country, assessments and other governmental charges, duties,
impositions and liabilities, including taxes based upon or measured by gross
receipts, income, profits, sales, use and occupation, and value added, ad
valorem, stamp transfer, franchise, withholding, payroll, recapture, employment,
excise and property taxes, together with all interest, penalties and additions
imposed with respect to such amounts and any monetary obligations under any
agreements or arrangements with any other Person with respect to such amounts
and including any liability for taxes of a predecessor entity.
“Third
Party” means any Person (including, but not limited to, a
governmental or regulatory authority) not an Affiliate of the other referenced
Person or Persons.
“Third-Party
Claims” has the meaning assigned in Section
7.6(a).
“Transfer
Taxes” means sales, use, transfer, real property transfer,
recording, documentary, stamp, registration and stock transfer taxes and
fees.
“Voting
Agreement” has the meaning assigned in Section
4.9.
(remainder
of page blank)
26
-
ACQUISTION AGREEMENT
IN
WITNESS WHEREOF, this Stock Purchase Agreement has been duly executed and
delivered by the duly authorized officer of each party hereto as of the date
first above written.
PURCHASER:
|
||
CEI
Acquisition, LLC
|
||
Signature:
|
|
|
A. Xxxx
Xxxxxx
|
||
Managing
Member
|
||
SELLER:
|
||
Microfield
Group, Inc.
|
||
Signature:
|
|
|
Xxxxxx
X. Xxxxxxx
|
||
Chief
Executive Officer
|
27
-
ACQUISTION AGREEMENT
Schedule
1
Shares
Shareholder
|
Certificate
No.
|
No.
of Shares
|
Microfield
Group, Inc.
|
25
|
100
|
1
-
SCHEDULE 1
Disclosure
Schedule
1
-
DISCLOSURE SCHEDULE
Exhibit
A
Interim
Financial Statements
1
-
EXHIBIT A
Exhibit
B
Xxxx
of
Sale
1
-
EXHIBIT B
Exhibit
C
Voting
Agreement
1
-
EXHIBIT C