WEBSITE PURCHASE AGREEMENT by and among NP CAPITAL CORP ("NPCC") SEI ACQUISITION, INC. ("Buyer") SOLAR ENERGY, INC. ("Company") DAVID IL SMITH REVOCABLE TRUST DATED JUNE 16, 1993 And DAVID SMITH Dated as of August , 2008
by and among
NP CAPITAL CORP
("NPCC")
SEI
ACQUISITION, INC.
("Buyer")
SOLAR
ENERGY, INC.
("Company")
▇▇▇▇▇ IL
▇▇▇▇▇ REVOCABLE TRUST DATED JUNE 16, 1993
And
▇▇▇▇▇
▇▇▇▇▇
Dated as
of August , 2008
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Disclosure
Schedule
Schedule
3.3 Schedule 4.1(c) Schedule 4.3 Schedule 4.5 Schedule 4.7 Schedule 4.8(b)
Schedule 4.8(c) Schedule 4.10(b) Schedule 4.11 Schedule 4.12(a) Schedule 4.12(b)
Schedule 4.13 Schedule 4.14(a) Schedule 4.14(c) Schedule 4.15
Purchase
Price Allocation
Foreign
Corporation Qualification
Violation,
Conflict, Default
Certain
Changes
Litigation
Matters
Licenses
and Permits
Environmental
Matters
Material
Contracts
Trade
Rights
Major
Customers
Major
Suppliers
Product
Warranty, Warranty Expense and Liability Claims Contracts with
Affiliates
Obligations
of and to Affiliates
Shareholders
List
2
WEBSITE
PURCHASE AGREEMENT (this "Agreement") dated as of August 2008, by and among
SEI
ACQUISITION, INC., a Florida corporation ("Buyer"), NP
CAPITAL CORP, a Delaware corporation ("NPCC") and sole Shareholder of
Buyer, SOLAR
ENERGY, INC.,
a Florida corporation ("Company"), ▇▇▇▇▇
▇. ▇▇▇▇▇ REVOCABLE TRUST DATED
June 16, 1993 ("▇▇▇▇▇ Trust"), and ▇▇▇▇▇
▇▇▇▇▇ ("▇▇▇▇▇").
RECITALS
A. Company
has and owns the domain name www.solarener'▇.▇▇▇
(the "Domain Name") and the property rights associated with the Domain
Name. Company has developed a website that uses the Domain Name (the "Solar
Energy Website"). ▇▇▇▇▇ Trust owns the majority of the issued and outstanding
capital stock of Company.
B. Buyer
desires to purchase from Company, and Company desires to sell to Buyer the
Domain Name, the Solar Energy Website and substantially all of the assets
related thereto.
NOW
THEREFORE, in consideration of the foregoing and the respective representations,
warranties, covenants, agreements and conditions hereinafter set forth, and
intending to be legally bound hereby, the parties hereto agree as
follows.
1. PURCHASE
AND SALE OF ASSETS
1.1. Assets to be
Transferred.
Subject
to the terms and conditions of this Agreement, on the Closing Date (as
hereinafter defined) Company shall, and ▇▇▇▇▇ Trust shall cause Company to,
sell, transfer, convey, assign, and deliver to Buyer, and Buyer shall purchase
and accept all of the rights, claims and assets listed herein of Company,
together with all rights and privileges associated with such assets of the
Company, other than the Excluded Assets (as hereinafter defined) (collectively
the "Purchased Assets"). The Purchased Assets shall include, but not be limited
to, the following:
(a) Domain Name.
Company's entire right, title and interest in and to the Domain Name
▇▇▇.▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, trademark rights
and all internet traffic to the Domain Name.
(b) Website. The website
that uses the Domain Name and all rights and benefits associated with or
affiliated with Solar Energy Website, including but not limited to the content
of the Solar Energy Website, copyrights to the webpages and content on the Solar
Energy Website, page layouts for the Solar Energy Website, all graphics used at
the Solar Energy Website, all databases used or generated for the Solar Energy
Website, all online forms and search engines created or used for the Solar
Energy Website, all advertisements for the Solar Energy Website, and all
marketing materials used for the Solar Energy Website including contracts
related to search engines and Internet search directories.
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(c) Trade Rights. All the
Company's interest in any Trade Rights other than Trade Rights associated with
the name "Sunworks." As used herein, the term "Trade Rights" shall mean and
include: (i) all trademark rights, business identifiers, trade dress, service
marks, trade names, and brand names related to the Purchased Assets; (ii) all
copyrights and all other rights associated therewith and the underlying works of
authorship related to the Purchased Assets; (iii) all patents and all
proprietary rights associated therewith; (iv) all contracts or agreements
granting any right, title, license or privilege under the intellectual property
rights of any third party related to the Purchased Assets; (v) all inventions,
mask works and mask work registrations, know-how, discoveries, improvements,
designs, trade secrets, shop and royalty rights, employee covenants and
agreements respecting intellectual property and non-competition and all other
types of intellectual property related to the Purchased Assets; (vi) all
registrations of any of the foregoing, all applications therefor, all goodwill
associated with any of the foregoing, and all claims for infringement or breach
thereof that are related to the Purchased Assets and (vii) all of the trade
rights listed on Schedule 4.11. Trade
Rights that are part of the Purchased Assets shall not be limited to the Trade
Rights listed on Schedule 4.11, such listing shall not be considered a
definitive list of such Trade Rights.
(d) Literature. All sales
literature, promotional literature, catalogs and similar materials used in
connection with the Solar Energy Website.
(e) Records and Files.
All records and files of Company of every kind including, without
limitation, invoices, customer and vendor lists, blueprints, specifications,
designs, drawings, and operating and marketing plans, and all other documents,
tapes, discs, programs or other embodiments of information related to the Solar
Energy Website.
(f) Licenses; Permits.
All licenses, permits, approvals, certifications and
listings
related to the Domain Name or the Solar Energy Website.
(g) Corporate Name. The
name "Solar Energy, Inc.," and all rights to use or allow others to use such
name and any other name currently or formerly used in connection with the Solar
Energy Website.
(h) Internet. All Company
websites, domain names, URLs and email
addresses.
L2.Excluded
Assets.
The
provisions of Section 1.1 notwithstanding, Company shall not sell, transfer,
assign, convey or deliver to Buyer, and Buyer will not purchase or accept the
following assets of Company (collectively the "Excluded Assets"):
(a) Cash and Accounts
Receivable. All cash, cash equivalents and accounts
receivable.
(b) Real Estate. All of
the real property, including fixtures, buildings, improvements and all
appurtenant rights owned or leased by the Company.
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(c) Tax Credits and Records.
Federal, state and local income and franchise tax credits and tax refund
claims and associated returns and records. Buyer shall have reasonable access to
such returns and records and may make excerpts therefrom and copies
thereof.
(d) Corporate Franchise.
Company's franchise to be a corporation, its certificate of
incorporation, corporate seal, stock books, minute books and other corporate
records having exclusively to do with the corporate organization and
capitalization of Company. Buyer shall have reasonable access to such books and
records and may make excerpts therefrom and copies thereof
(e) Obligations of Affiliates.
Notes, drafts, accounts receivable or other obligations for the payment
of money, made or owed by any Affiliate of Company. For purposes of this
Agreement, the term "Affiliate" shall mean and include all shareholders,
directors and officers of Company; the spouse of any such person; any person who
would be the heir or descendant of any such person if he or she were not living;
and any entity in which any of the foregoing has a direct or indirect interest
(except through ownership of less than 5% of the outstanding shares of any
entity whose securities are listed on a national securities exchange or traded
in the national over-the-counter market). Notwithstanding the foregoing, the
term "Affiliate" shall not include Dell ▇▇▇▇▇, Energy Laboratories, Inc. and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
Manufacturing Equipment.
All equipment used in the manufacture, production or assembly of solar
hot water heaters and its components such as thermal collectors, tanks, heat
exchangers and mounted systems, including without limitation, component
manufacturing equipment, manufacturing licenses, manufacturing certifications,
manufacturing drawings, equipment dies and molds and related inventory. In
addition, other Excluded Assets include all agreements or licenses from Energy
Laboratories, Inc. and any agreements for services to be provided by Energy
Laboratories, Inc.; none of such agreements or licenses or services from Energy
Laboratories, Inc. pertain to the operation of the Solar Energy Website nor the
training and consulting services to be provided by ▇▇▇▇▇ pursuant to the
agreement described in Section 6.1. Notwithstanding the Trade Rights granted in
Section LI, Buyer expressly acknowledges that it is not acquiring hereunder, and
both Buyer and Company acknowledge that they have, and shall have, no rights in,
the ▇▇▇▇ and names "U.S. Solar Energy" and "United States Solar Energy", with or
without corporate identifiers, for use with any goods or services, nor the domain names ▇▇▇.▇.▇.▇▇▇▇▇▇▇▇▇▇▇.▇▇▇,▇▇▇.▇.▇.▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, www.u.s s olarenergy. org, ▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, ▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, ▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, ▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, ▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ and ▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, and NPCC, Buyer and
Company acknowledge that they shall not be entitled to and hereby grant that
they shall not, and they forever waive any rights to, pursue infringement,
unfair competition, or any claims based on ownership or use thereof by Energy
Laboratories, Inc., ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, their designees, or any of their
successors and assigns, and NPCC, Buyer and Company agree to provide such
consents as may be hereinafter required to perfect Energy Laboratories, Inc. and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇'▇ rights therein.
(g)Other Assets. All
other assets of the Company other than the Purchased Assets.
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2. ASSUMPTION OF
LIABILITIES
2.1. Liabilities to be
Assumed.
As used
in this Agreement, the term "Liability" shall mean and include any direct or
indirect indebtedness, guaranty, endorsement, claim, loss, damage, deficiency,
cost, expense, obligation or responsibility, fixed or unfixed, known or unknown,
asserted or unasserted, liquidated or unliquidated, secured or unsecured.
Subject to the terms and conditions of this Agreement, on the Closing Date,
Buyer shall assume and agree to perform and discharge the following, and only
the following Liabilities of Company (collectively the "Assumed
Liabilities"):
(a) Contractual Liabilities.
Only those Liabilities arising from and after the Closing Date under and
pursuant to the Contracts described in any of Schedules 2.1(a) that relates to
the maintenance or operation of the Domain Name or the Solar Energy Website(the
"Assumed Contracts.")
(b) Liabilities Under Permits
and Licenses. Company's Liabilities arising from and after the
Closing Date under any permits or licenses listed in Schedule 2.1(b) and
assigned to Buyer at the Closing.
2.2.Liabilities Not to be
Assumed.
Except as
and to the extent specifically set forth in Section 2.1, Buyer is not assuming
any Liabilities of Company and all such Liabilities shall be and remain the
responsibility of Company. Notwithstanding the provisions of Section 2.1, Buyer
is not assuming and Company shall not be deemed to have transferred to Buyer the
following Liabilities of Company:
(a) Taxes Arising from
Transaction. Any taxes applicable to, imposed upon or arising out of the
sale or transfer of the Purchased Assets to Buyer and the other transactions
contemplated by this Agreement, including but not limited to any income,
transfer, sales, use, gross receipts or documentary stamp taxes.
(b) Income and Franchise Taxes.
Any Liability of Company for Federal income taxes and any state or local
income, profit or franchise taxes (and any penalties or interest due on account
thereof).
(c) Product Liability.
Any Liability of Company arising out of or in any way relating to or
resulting from any product manufactured, assembled or sold prior to the Closing
Date (including any Liability of Company for claims made for injury to person,
damage to property or other damage, whether made in product liability, tort,
breach of warranty or otherwise).
(d) Litigation Matters.
Any Liability with respect to any action, suit, proceeding, arbitration,
investigation or inquiry, whether civil, criminal or administrative
("Litigation"), whether or not described in Schedule 4.7.
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(e) Infringements. Any
Liability to a third party for infringement of such
third
party's Trade Rights.
(0 Transaction Expenses.
All Liabilities incurred by Company in connection
with this
Agreement and the transactions contemplated herein.
(g) Liability For Breach.
Liabilities of Company for any breach or failure to perform any of
Company's covenants and agreements contained in, or made pursuant to, this
Agreement, or, prior to the Closing, any other contract, whether or not assumed
hereunder, including breach arising from assignment of contracts hereunder
without consent of third parties.
(h) Liabilities to Affiliates.
Liabilities of Company to its present or former Affiliates.
(i) Violation of Laws or Orders.
Liabilities of Company for any violation of or failure to comply with any
statute, law, ordinance, rule or regulation (collectively, "Laws") or any order,
writ, injunction, judgment, plan or decree (collectively, "Orders") of any
court, arbitrator, department, commission, board, bureau, agency, authority,
instrumentality or other body, whether federal, state, municipal, foreign or
other (collectively, "Government Entities").
3. PURCHASE
PRICE - PAYMENT
3.1. Purchase
Price.
The
purchase price (the "Purchase Price") for the Purchased Assets shall be One
Million and No/100 dollars (51,000,000.00) payable in cash and One Million
shares of NPCC common stock as described in Section 3.2.
3.2.Payment of Purchase
Price.
The
Purchase Price shall be paid by Buyer as follows:
(a) Upfront Payment.
Buyer paid the Company Twenty-Five Thousand and No/100 Dollars
(525,000.00) on July 8, 2008, in advance of the Closing which shall be applied
toward the Purchase Price.
(b) Cash to Company. At
the Closing, Buyer shall deliver to Company One Hundred Twelve Thousand Five
Hundred and Seventy Nine and No/100 Dollars ($112,579.00) and to Lexpark
Advisors, LLC ("Lexpark") Twenty-Two Thousand Four Hundred and Twenty One and
No/I00 Dollars (522,421.00).
(c) Note. At the Closing,
Buyer shall deliver to the Company a note for Eight Hundred Forty Thousand and
No/100 Dollars ($840,000.00). The note will bear interest at a rate of seven and
one-half (7.5%) percent per annum and shall require principal payments of Forty
Thousand Dollars ($40,000) per month for the 21 months immediately following the
Closing. The note will be secured by the Purchased Assets.
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(d) Stock. At the
Closing, Buyer shall deliver to the Company a stock certificate for 1,000,000
shares of NPCC's common stock, par value $0.001 (the "Stock Payment"). Company
shall then work with Buyer's transfer agent to have 175,000 shares of NPCC
common stock of the Stock Payment transferred to Lexpark and 25,000 shares of
NPCC common stock transferred to Sunworks Solar Systems, Inc. ("Sunworks") as
part of the distribution to Sunworks employees pursuant to the Consulting and
Management Agreement between ▇▇▇▇▇, SEI and NPCC of even date
herewith.
(e) Method of Payment.
All cash payments under this Section 3.2 shall be made by check payable
to the order of the recipient.
3.3.Allocation of Purchase
Price.
The
aggregate Purchase Price (including the assumption by Buyer of the Assumed
Liabilities, if any) shall be allocated among the Purchased Assets for tax
purposes in accordance with Schedule 3.3. Company and Buyer will follow and use
such allocation in all tax returns, filings or other related reports made by
them to any governmental agencies. To the extent that disclosures of this
allocation are required to be made by the parties to the Internal Revenue
Service ("IRS") under the provisions of Section 1060 of the Internal Revenue
Code of 1986, as amended (the "Code") or any regulations thereunder, Buyer and
Company will disclose such reports to the other prior to filing with the
IRS.
4.
REPRESENTATIONS AND WARRANTIES OF COMPANY AND ▇▇▇▇▇
Except as
otherwise set forth in the disclosure schedules attached to this Agreement
(collectively, the "Disclosure Schedules"), Company and ▇▇▇▇▇ represent and
warrant to the Buyer as follows:
4.1.Corporate.
(a) Organization. Company
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Florida.
(b) Corporate Power.
Company has all requisite corporate power and authority to own, operate
and lease its properties, to carry on its business as and where such is now
being conducted, to enter into this Agreement and the other documents and
instruments to be executed and delivered by Company pursuant hereto and to carry
out the transactions contemplated hereby and thereby.
(c) Qualification.
Company is duly licensed or qualified to do business as a foreign
corporation, and is in good standing, in each jurisdiction wherein the character
of the properties owned or leased by it, or the nature of its business, makes
such licensing or qualification necessary. The states in which Company is
licensed or qualified to do business are listed in Schedule 4.1(c).
(d) No Subsidiaries.
Company does not own any interest in any corporation, partnership or
other entity.
8
The
execution and delivery of this Agreement and the other documents and instruments
to be executed and delivered by Company pursuant hereto and the consummation of
the transactions contemplated hereby and thereby have been duly authorized by
the Board of Directors and shareholders of Company. No other or further
corporate act or proceeding on the part of Company is necessary to authorize
this Agreement or the other documents and instruments to be executed and
delivered by Company pursuant hereto or the consummation of the transactions
contemplated hereby and thereby. This Agreement constitutes, and when executed
and delivered, the other documents and instruments to be executed and delivered
by Company pursuant hereto will constitute, valid binding agreements of Company,
enforceable in accordance with their respective terms.
▇.▇.▇▇
Violation.
Except as
set forth on Schedule 4.3, neither the execution and delivery of this Agreement
or the other documents and instruments to be executed and delivered by Company
pursuant hereto, nor the consummation by Company of the transactions
contemplated hereby and thereby (a) will violate any applicable Law or Order,
(b) will require any authorization, consent, approval, exemption or other action
by or notice to any Government Entity (including, without limitation, under any
"plant-closing" or similar law), or (c) subject to obtaining the consents
referred to in Schedule 4.3, will violate or conflict with, or constitute a
default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, or will result in the termination of, or accelerate
the performance required by, or result in the creation of any Lien (as defined
in Section 4.9(a)) upon any of the assets of Company under, any term or
provision of the Articles of Incorporation or Bylaws of Company or of any
contract, commitment, understanding, arrangement, agreement or restriction of
any kind or character to which Company is a party or by which Company or any of
its assets or properties may be bound or affected.
▇.▇.▇▇▇
Matters.
(a) Tax Returns Filed.
All federal, state, foreign, county, local and other tax returns required
to be filed by or on behalf of Company have been timely filed and when filed
were true and correct in all material respects, and the taxes shown as due
thereon were paid or adequately accrued. Company has duly withheld and paid all
taxes which it is required to withhold and pay relating to salaries and other
compensation heretofore paid to the employees of Company.
(b) Tax Audits. Company
has not received from the Internal Revenue Service or from the tax authorities
of any state, county, local or other jurisdiction any notice of underpayment of
taxes or other deficiency which has not been paid nor any objection to any
return or report filed by Company. There are outstanding no agreements or
waivers extending the statutory period of limitations applicable to any tax
return or report.
4.5.Absence of Certain Changes.
Except as
and to the extent set forth in Schedule 4.5, since January 1, 2008 there
has not
been:
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4.2.Authority.
(a) No
Adverse Change. Any adverse change in or related to the Purchased
Assets;
(b) No
Damage. Any loss, damage or destruction, whether covered by insurance or
not, affecting the Purchased Assets;
(c) No
Commitments. Any commitment or transaction by Company (including, without
limitation, any borrowing or capital expenditure) other than in the ordinary
course of business consistent with past practice related to the Purchased
Assets;
(d) No
Disposition of Property. Any sale, lease or other transfer or disposition
of any properties or assets of Company related to the Purchased
Assets;
(e) No
Liens. Any Lien made on any of the Purchased Assets;
(f) No
Amendment of Contracts. Any entering into, amendment or termination by
Company of any contract related to the Purchased Assets, or any waiver of
material rights thereunder, other than in the ordinary course of
business;
(g) No
Unusual Events. Any other event or condition not in the
ordinary
course of
business related to the Purchased Assets.
4.6.Absence of Undisclosed
Liabilities.
Neither
Company nor ▇▇▇▇▇ has knowledge of any basis for the assertion against the
Purchased Assets of any Liability and there are no circumstances, conditions,
happenings, events or arrangements, contractual or otherwise, which may give
rise to Liabilities, except commercial liabilities and obligations incurred in
the ordinary course of Company's business and consistent with past
practice.
▇.▇.▇▇
Litigation.
There is
no Litigation related to the Purchased Assets pending or threatened against
Company, its directors (in such capacity), its business or any of the Purchased
Assets, nor does Company or ▇▇▇▇▇ know, or have grounds to know, of any basis
for any Litigation related to the Purchased Assets. Schedule 4.7 also identifies
all Litigation related to the Purchased Assets to which Company or ▇▇▇▇▇ have
been parties since January 1, 2003.
4.8.Compliance With Laws and
Orders.
(a) Compliance.
Company (including each and all of its operations, practices, properties
and assets) is in compliance with all applicable Laws and Orders, including,
without limitation, those applicable to discrimination in employment,
occupational safety and health, trade practices, competition and pricing,
product warranties, business opportunities, employment, retirement and labor
relations, product advertising and the Environmental Laws as hereinafter
defined. Company has not received notice of any violation or alleged violation
of, and is subject to no Liability for past or continuing violation of, any Laws
or Orders. All reports and returns required to be filed by Company with any
Government Entity have been filed, and were accurate
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and
complete when filed. Without limiting the generality of the foregoing, Company
has made all required payments to its unemployment compensation reserve accounts
with the appropriate governmental departments of the states where it is required
to maintain such accounts, and each of such accounts has a positive
balance.
(b) Licenses and Permits.
Company has all licenses, permits, approvals, authorizations and consents
of all Government Entities and all certification organizations required for the
conduct of the business (as presently conducted and as proposed to be conducted)
and operation of the Facilities. All such licenses, permits, approvals,
authorizations and consents are described in Schedule 4.8(b), are in full force
and effect and are assignable to Buyer in accordance with the terms hereof.
Except as set forth in Schedule 4.8(b), Company (including its operations,
properties and assets) is and has been in compliance with all such permits and
licenses, approvals, authorizations and consents.
(c) Environmental Matters.
The applicable Laws relating to pollution or protection of the
environment, including Laws relating to emissions, discharges, generation,
storage, releases or threatened releases of pollutants, contaminants, chemicals
or industrial, toxic, hazardous or petroleum or petroleum-based substances or
wastes ("Waste") into the environment (including, without limitation, ambient
air, surface water, ground water, land surface or subsurface strata) or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Waste including, without limitation,
the Clean Water Act, the Clean Air Act, the Resource Conservation and Recovery
Act, the Toxic Substances Control Act and the Comprehensive Environmental
Response Compensation Liability Act ("CERCLA"), as amended, and their state and
local counterparts are herein collectively referred to as the "Environmental
Laws". Without limiting the generality of the foregoing provisions of this
Section 4.8, Company is in full compliance with all limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations, schedules and
timetables contained in the Environmental Laws or contained in any regulations,
code, plan, order, decree, judgment, injunction, notice or demand letter issued,
entered, promulgated or approved thereunder. There is no Litigation nor any
demand, claim, hearing or notice of violation pending or threatened against
Company relating in any way to the Environmental Laws or any Order issued,
entered, promulgated or approved thereunder. Except as set forth in Schedule
4.8(c), there are no past or present (or, to the best of Company's and the
▇▇▇▇▇'▇ knowledge, future) events, conditions, circumstances, activities,
practices, incidents, actions, omissions or plans which may interfere with or
prevent compliance or continued compliance with the Environmental Laws or with
any Order issued, entered, promulgated or approved thereunder, or which may give
rise to any Liability, including, without limitation, Liability under CERCLA or
similar state or local Laws, or otherwise form the basis of any Litigation,
hearing, notice of violation, study or investigation, based on or related to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling, or the emission, discharge, release or threatened release
into the environment, of any Waste.
4.9.Title to and Condition of
Properties.
(a) Marketable Title.
Company has good and marketable title to all of the Purchased Assets,
free and clear of all mortgages, liens (statutory or otherwise), security
interests, claims, pledges, licenses, equities, options, conditional sales
contracts, assessments, levies, easements, covenants, reservations,
restrictions, rights-of-way, exceptions, limitations, charges or encumbrances of
any nature whatsoever (collectively, "Liens"). None of the Purchased Assets are
subject to any restrictions with respect to the transferability thereof. Company
has complete and unrestricted power and right to sell, assign, convey and
deliver the Purchased Assets to Buyer as contemplated hereby. At Closing, Buyer
will receive good and marketable title to all the Purchased Assets, free and
clear of all Liens of any nature whatsoever.
11
(b) Condition, All
tangible assets (real and personal) constituting Purchased Assets hereunder are
in good operating condition and repair, free from any defects (except such minor
defects as do not interfere with the use thereof in the conduct of the normal
operations of Company), have been maintained consistent with the standards
generally followed in the industry and are sufficient to carry on the business
of Company as conducted during the preceding 12 months.
4.10.
Contracts and
Commitments,
(a) Burdensome or Restrictive
Agreements. Company is not a party to nor is it bound by any agreement,
deed, lease or other instrument which is so burdensome as to materially affect
or impair the Purchased Assets. Without limiting the generality of the
foregoing, Company is not a party to nor is it bound by any agreement requiring
Company to assign any interest in any trade secret or proprietary information,
or prohibiting or restricting Company from competing in any business or
geographical area or soliciting customers or otherwise restricting it from
carrying on its business anywhere in the world.
(b) List of Contracts.
Company has no lease, license, contract or commitment
of any
nature involving the Purchased Assets except as explicitly described in Schedule
4.10(b).
(c) No Default. Company
is not in default under any lease, contract or commitment, nor has any event or
omission occurred which through the passage of time or the giving of notice, or
both, would constitute a default thereunder or cause the acceleration of any of
Company's obligations or result in the creation of any Lien on any of the
Purchased Assets owned, used or occupied by Company. With regard to the
Purchased Assets, no third party is in default under any lease, contract or
commitment to which Company is a party, nor has any event or omission occurred
which, through the passage of time or the giving of notice, or both, would
constitute a default thereunder or give rise to an automatic termination, or the
right of discretionary termination, thereof.
4.11.
Trade
Rights.
Schedule
4.11 lists all Trade Rights related to the Purchased Assets of the type
described in clauses (i), (ii), (iii), (iv) or (v) of Section 1.1(c) in which
Company now has any interest, specifying whether such Trade Rights are owned,
controlled, used or held (under license or otherwise) by Company, and also
indicating which of such Trade Rights are registered. All Trade Rights related
to the Purchased Assets shown as registered in Schedule 4.11 have been properly
registered, all pending registrations and applications have been properly made
and filed and all annuity, maintenance, renewal and other fees relating to
registrations or applications are current. In order to conduct the business of
Company, as such is currently being conducted or proposed
to be conducted, Company does not require any Trade Rights related to the
Purchased Assets that it does not already have. Company is not infringing and
has not infringed any Trade Rights related to the Purchased Assets of another in
the operation of the business of Company, nor is any other person infringing the
Trade Rights of Company. Company has not granted any license or made any
assignment of any Trade Right related to the Purchased Assets listed on Schedule
4.11, and no other person has any right to use any Trade Right owned or held by
Company. Company does not pay any royalties or other consideration for the right
to use any Trade Rights related to the Purchased Assets of others. There is no
Litigation pending or threatened to challenge Company's right, title and
interest with respect to its continued use and right to preclude others from
using any Trade Rights of Company related to the Purchased Assets. All Trade
Rights related to the Purchased Assets of Company are valid, enforceable and in
good standing, and there are no equitable defenses to enforcement based on any
act or omission of Company.
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4.12.
Major Customers and
Suppliers.
(a) Major Customers.
Schedule 4.12(a) contains a list of all major customers of the Solar
Energy Website, for each of the two (2) most recent fiscal years (determined on
the basis of the total dollar amount of net sales) showing the total dollar
amount of net sales to each such customer during each such year. Neither Company
nor ▇▇▇▇▇ has any knowledge or information of any facts indicating, nor any
other reason to believe, that any of the major customers listed on Schedule
4.12(a) will not continue to be customers of the Solar Energy Website at
substantially the same level of purchases as heretofore.
(b) Major Suppliers.
Schedule 4.12(b) contains a list of all major suppliers to the Solar
Energy Website for each of the two (2) most recent fiscal years (determined on
the basis of the total dollar amount of purchases) showing the total dollar
amount of purchases from each such supplier during each such year. Neither
Company nor ▇▇▇▇▇ has any knowledge or information of any facts indicating, nor
any other reason to believe, that any of the major suppliers listed on Schedule
4.12(b) will not continue to be suppliers to the Solar Energy Website after the
Closing and will not continue to supply the Solar Energy Website with
substantially the same quantity and quality of goods at competitive
prices.
4.13.
Product Warranty and
Product Liability.
Company
and ▇▇▇▇▇ have no knowledge of any defects in design, construction or
manufacture of Products that are sold through the Purchased Assets which would
adversely affect performance or create an unusual risk of injury to persons or
property. None of the Products has been the subject of any replacement, field
fix, retrofit, modification or recall campaign and, to Company's or ▇▇▇▇▇'▇
knowledge, no facts or conditions exist which could reasonably be expected to
result in such a recall campaign. The Products have been designed and
manufactured so as to meet and comply with all governmental standards and
specifications currently in effect, and have received all governmental approvals
necessary to allow their sale and use. As used in this Section 4.13, the term
"Products" means any and all products currently or at any time previously
manufactured, distributed or sold by Company, or by any predecessor of Company
under any brand name or ▇▇▇▇ under which products are or have been manufactured,
distributed or sold by Company.
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4.14.
Affiliates'
Relationships to Company.
(a) Contracts With Affiliates.
All leases, contracts, agreements or other arrangements between Company
and any Affiliate related to the Purchased Assets are described on Schedule
4.14(a).
(b) No Adverse Interests.
No Affiliate has any direct or indirect interest in (i) any entity which
does business with the Solar Energy Website or is competitive with the Solar
Energy Website, or (ii) any property, asset or right which is used by the Solar
Energy Website.
(c) Obligations. In
connection with the Purchased Assets, all obligations of any Affiliate to
Company, and all obligations of Company to any Affiliate, are listed on Schedule
4.14(c).
4.15.
Shareholders
List.
Schedule
4.15 sets forth a complete list of all the holders of capital stock of Company
issued and outstanding on the date hereof, together with the number of shares
held by each shareholders. Except as set forth in Schedule 4.15, each person so
listed is a competent adult and is the record and the beneficial owner of all
shares so listed in his or her name, with the sole right to vote, dispose of,
and receive dividends or distributions with respect to such shares.
4.16.
No Brokers or
Finders.
Except as
set forth on Schedule 4.16, neither Company nor any of its directors, officers,
employees, shareholders or agents have retained, employed or used any broker or
finder in connection with the transactions provided for herein or the
negotiation thereof
4.17.
OFAC.
Company
and ▇▇▇▇▇ and, to ▇▇▇▇▇'▇ knowledge, no person or entity who owns a direct
interest in Company nor any customer of Company is not now nor has been during
the term of this Agreement a person or entity with whom a United States citizen
or any entity organized under the laws of the United States or its constituent
states, including a financial institution (as defined under applicable federal
codes), is prohibited from transacting business, whether such prohibition arises
under U.S. law, regulation, executive orders and lists published by the Office
of Foreign Assets Control, Department of the Treasury ("OFAC") (including those
executive orders and lists published by OFAC with respect to Specially
Designated Nationals and Blocked Persons) or otherwise. Company is in compliance
with any and all applicable provisions of The United and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act
of 2001, Pub. L. No. 107-56 (2001) (the "Patriot Act").
4.18.
Anti-Money
Laundering.
Company
nor ▇▇▇▇▇, to ▇▇▇▇▇'▇ knowledge, (a) is under investigation by any governmental
authority for, or has been charged with, or convicted of, money laundering, drug
trafficking, terrorist related activities, any crimes which in the United States
would be predicate crimes to money laundering, or any violation of any Anti
Money Laundering Laws; (b) has been assessed civil or criminal penalties under
any Anti Money Laundering Laws; (c) has been convicted of any crimes involving
moral turpitude or tax fraud; and (d) has had any of its funds seized or
forfeited in any action under any Anti Money Laundering Laws. As used herein,
"Anti Money Laundering Laws" means those laws, regulations and sanctions, state
and federal, criminal and civil, that (a) limit the use of and/or seek the
forfeiture of proceeds from illegal transactions; (b) limit commercial
transactions with designated countries or individuals believed to be terrorists,
narcotics dealers or otherwise engaged in activities contrary to the interest of
the United States; (c) require identification and documentation of the parties
with whom a Financial Institution conducts business; or (d) are designated to
disrupt the flow of funds to terrorist organizations. Such laws, regulations and
sanctions shall be deemed to include the Patriot Act, the Bank Secrecy Act, the
Trading with the Enemy Act, 50 U.S.C. App. Section 1 et seq., the International
Emergency Economic Powers Act, 50 U.S.C. Section 1701 et seq., and the sanction
regulations promulgated pursuant thereto by the OFAC, as well as laws relating
to prevention and detection of money laundering in 18 U.S.C. Sections 1956 and
1957.
14
4.19.
Internet
Security/Privacy.
Company
has, in accordance with good industry practice, taken measures to protect the
internal and external security and integrity of the Solar Energy Website and the
data of the Solar Energy Website and its customers. Company has followed
procedures preventing unauthorized access, the introduction of a virus and the
taking and storing on-site and off-site of back-up copies of critical data.
Company has not received notice of and is not aware of any circumstances with
respect to (i) unauthorized access to, or use or disclosure of, data or
information of Solar Energy Website or any of its customers, (ii) a violation of
any Laws or Orders relating to privacy of information of Solar Energy Website,
its customers or any third party, or (iii) a violation or breach of any privacy
policy of Solar Energy Website or its customers.
4.20.
Securities
Laws.
(a) Company
understands that (i) neither the Buyer nor NPCC have registered any of the
shares of NPCC common stock to be delivered under this Agreement under the
Securities Laws in reliance on exemptions from registration under various
provisions of applicable statutes, rules and regulations, and (ii) such shares
may not be resold unless registered or unless an exemption from registration is
available.
(b) Company
acknowledges that no trading market for the shares does or will exist at any
time.
(c) Company
has had the opportunity to consult with Company's own legal, tax and other
advisors to determine whether the receipt of such shares is consistent with
Company's objectives, and has had access to any and all information concerning
NPCC which Company and Company's legal, tax and other advisors have requested
and consider necessary to make appropriate evaluation of this
investment.
15
(d) Neither
Company, nor any of its Affiliates, directors, managers, officers, general
partners, predecessors or beneficial owners of ten percent or more of any class
of its equity
securities: (i) has been convicted of a misdemeanor or felony involving
racketeering or a transaction in securities or of which fraud is an essential
element; (ii) has been convicted within the last 10 years of a misdemeanor
involving racketeering or a transaction in securities or of which fraud or
dishonesty is an essential element; (iii) is subject to an order, judgment or
decree of a court of competent jurisdiction entered within the last 10 years
enjoining or restraining it from engaging in or continuing any conduct or
practice in connection with the sale or purchase of securities or involving
fraud, deceit, racketeering or consumer protection laws; (iv) has been subject
to any state or federal administrative order or judgment in connection with the
purchase or sale of securities entered within last five years; or (v) is subject
to an order of an administrative tribunal, self-regulatory organization, or the
Securities and Exchange commission denying, suspending, or revoking membership
or registration as a broker or dealer in securities or as an investment adviser
or investment adviser representative for a period of six months or
more.
(e) Company's
management has such knowledge of business and financial affairs as is necessary
to enable Company to understand the risks associated with NPCC's business and an
investment in NPCC's securities and to understand the particular financial,
legal and tax implications of NPCC's business and ownership of its
securities.
(f) Company
represents that the shares are being acquired for the investment for the
Company's own account with no present intention of the Company reselling or
otherwise disposing of the same and understands that the reliance of the Buyer
and NPCC upon such exemptions is predicated upon the lack of such
intention.
5.
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer
represents and warrants to Company as follows:
5.1. Corporate.
(a) Organization. Buyer
is a corporation duly organized, validly existing and
in good
standing under the laws of the State of Florida.
(b) Corporate Power.
Buyer has all requisite corporate power to enter into this Agreement and
the other documents and instruments to be executed and delivered by Buyer and to
carry out the transactions contemplated hereby and thereby.
5.2.Authority.
The
execution and delivery of this Agreement and the other documents and instruments
to be executed and delivered by Buyer pursuant hereto and the consummation of
the transactions contemplated hereby and thereby have been duly authorized by
the Board of Directors of Buyer. No other corporate act or proceeding on the
part of Buyer or its shareholder is necessary to authorize this Agreement or the
other documents and instruments to be executed and delivered by Buyer pursuant
hereto or the consummation of the transactions contemplated hereby and thereby.
This Agreement constitutes, and when executed and delivered, the other documents
and instruments to be executed and delivered by Buyer pursuant hereto will
constitute, valid and binding agreements of Buyer, enforceable in accordance
with their respective
terms, except as such may be limited by bankruptcy, insolvency, reorganization
or other laws affecting creditors' rights generally, and by general equitable
principles.
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▇.▇.▇▇ Brokers or
Finders.
Neither
Buyer nor any of its directors, officers, employees or agents have retained,
employed or used any broker or finder in connection with the transactions
provided for herein or the negotiation thereof
5.4.Availability of
Funds.
Buyer has
cash available or has existing borrowing facilities that together are sufficient
to enable it to consummate the transactions contemplated by this
Agreement.
6.
OTHER MATTERS
▇.▇.▇▇▇▇▇▇▇▇▇▇ Agreement,
Non-Solicitation and Non-Circumvention Agreement.
At the
Closing, Buyer and NPCC shall enter into an agreement with Company and ▇▇▇▇▇
that will prohibit the solicitation or employment of Buyer and NPCC's employees
and will further prohibit the circumvention of any matter covered by this
Agreement or the agreements described herein by Company or ▇▇▇▇▇. The agreement
will also provide that for six months ▇▇▇▇▇ will provide Buyer and NPCC
dealership classroom training, continuing dealer support and assisting with all
sales activities.
6.2.Noncompetition.
Subject
to the Closing, and as an inducement to Buyer and NPCC to execute this Agreement
and complete the transactions contemplated hereby, and in order to preserve the
goodwill associated with the Purchased Assets being acquired pursuant to this
Agreement, and in addition to and not in limitation of any covenants contained
in any agreement executed and delivered pursuant to Section 6.1 hereof, Company
and ▇▇▇▇▇ hereby covenant and agree that for a period of five (5) years from the
Closing Date, they will not, directly or indirectly:
(i) engage
in, continue in or carry on any Competing Business (as defined below) or is
substantially similar to Buyer's business, including owning or controlling any
financial interest in any corporation, partnership, firm or other form of
business organization which is so engaged;
(ii) consult
with, advise or assist in any way, whether or not for consideration, any
corporation, partnership, firm or other business organization which is now or
becomes a competitor of Buyer or NPCC in any aspect with respect to the
Purchased Assets including, but not limited to, advertising or otherwise
endorsing the products of any such Competing Business; soliciting customers or
otherwise serving as an intermediary for any such Competing Business; loaning
money or rendering any other form of financial assistance to or engaging in any
form of business transaction on other than an arm's length basis with any such
Competing Business;
17
(iii) hire,
offer to hire, or solicit for employment any employee of Buyer or NPCC, without
the prior consent of Buyer, until such person has been separated from employment
by the Buyer or NPCC for at least 180 days and in the case of ▇▇▇▇ ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇ ▇▇▇▇▇▇ such persons must be separated from employment by the Buyer or
NPCC for at least 1 year; or
(iv) engage in
any practice the purpose of which is to evade the provisions of this covenant
not to compete or to commit any act which adversely affects the Purchased Assets
or Assumed Liabilities;
provided,
however, that the foregoing shall not: (a) prohibit the ownership of securities
of corporations which are listed on a national securities exchange or traded in
the national over-the-counter market in an amount which shall not exceed 1% of
the outstanding shares of any such corporation; (b) apply to the Sunworks
contract with PureNERGY Renewables, Ltd., a subsidiary of BELCO Holdings, LTD
that is located in Bermuda; (c) prohibit follow-up training and support for the
Dealers listed on Exhibit A of the Consulting and Management Agreement dated
August 1, 2008 between Buyer, Company and ▇▇▇▇▇ that is performed at no
additional cost to such Dealers; or (d) prohibit Company from selling its
inventory in existence as of the date of this Agreement or any additional
inventory Solar may need to purchase or manufacture to fulfill customer orders
placed before the date of this Agreement. The parties agree that the geographic
scope of this covenant not to compete shall extend throughout the United States.
The parties agree that Buyer may sell, assign or otherwise transfer this
covenant not to compete, in whole or in part, to any person, corporation, firm
or entity that purchases all or part of Buyer or NPCC. In the event a court of
competent jurisdiction determines that the provisions of this covenant not to
compete are excessively broad as to duration, geographical scope or activity, it
is expressly agreed that this covenant not to compete shall be construed so that
the remaining provisions shall not be affected, but shall remain in full force
and effect, and any such over broad provisions shall be deemed, without further
action on the part of any person, to be modified, amended and/or limited, but
only to the extent necessary to render the same valid and enforceable in such
jurisdiction.
"Competing
Business" means any business that engages in the sales, marketing, training or
distribution (on a wholesale basis) of solar thermal or solar electric products.
Notwithstanding the foregoing, Company and ▇▇▇▇▇ may engage in sales and
marketing on a retail basis of solar thermal or solar electric products and the
installation of solar thermal or solar electric products, but in no
circumstances shall Company or ▇▇▇▇▇ engage in training, regardless of the
format or setting, relating to alternative energy; which includes, but not
limited to, solar thermal and solar electric products.
6.3.Confidential
Information.
Neither
Company nor ▇▇▇▇▇ shall at any time subsequent to the Closing, except as
explicitly requested by Buyer or NPCC, use for any purpose, disclose to any
person, or keep or make copies of documents, tapes, discs, programs or other
information storage media ("records") containing, any confidential information
concerning the Purchased Assets, or the Assumed Liabilities, all such
information being deemed to be transferred to Buyer hereunder. For purposes
of this Section 6.3, "confidential information" shall mean and include, without
limitation, all Trade Rights in which Company has an interest, all customer and
vendor lists and related information, all information concerning Company's
processes, products, costs, prices, sales, marketing and distribution methods,
properties and assets, liabilities, finances, employees, all privileged
communications and work product, and any other information not previously
disclosed to the public directly by Company. The foregoing provisions shall not
apply to any information which is an "Excluded Asset" as defined in Section 1.2,
or which relates solely to one or more Excluded Assets. If at any time after
Closing Company or ▇▇▇▇▇ should discover that it is in possession of any records
containing the confidential information of Buyer, then the party making such
discovery shall immediately turn such records over to Buyer, which shall upon
request make available to the surrendering party any information contained
therein which is not confidential information.
18
6.4.Use of Company's
Name.
Following
the Closing, neither Company nor any Affiliate shall, without the prior written
consent of Buyer, make any use of the name "Solar Energy, Inc." or any other
name confusingly similar thereto, except as may be necessary for Company to pay
its liabilities, prepare tax returns and other reports, and to otherwise wind up
and conclude its business. Notwithstanding the foregoing, Buyer and NPCC consent
to Energy Laboratories, lnc. and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ using the name "U.S. Solar
Energy, Inc." and "United States Solar Energy, Inc."
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|
7.
FURTHER COVENANTS OF
COMPANY AND ▇▇▇▇▇ Company and ▇▇▇▇▇ covenant and agree as
follows:
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7.1.
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Access to Information
and Records.
|
Company
shall, and shall cause its officers, employees, agents, independent accountants
and advisors to, furnish to Buyer, its officers, employees, agents, independent
accountants and advisors, at reasonable times and places, all information in
their possession concerning Company as may be requested, and give such persons
access to all of the properties, books, records, contracts and other documents
of or pertaining to Company that Company or its officers, employees, agents,
independent accountants or advisors shall have in their custody.
7.2.Change of Corporate
Name.
Concurrently
with the Closing, Company shall change its corporate name to a new name bearing
no resemblance to its present name so as to permit the use of its present name
by Buyer or NPCC.
7.3.Consents.
Prior to
Closing, Company and ▇▇▇▇▇ will obtain all consents necessary for the
consummation of the transactions contemplated hereby. Company
and ▇▇▇▇▇ will use their best efforts to encourage key employees associated with
the Solar Energy Website to accept employment with Buyer or NPCC.
19
▇.▇.▇▇▇▇▇.
Company
shall allow Buyer and NPCC to use the Company's current real property, whether
owned or leased, for continuation of the Solar Energy Website for the 90 days
immediately following the Closing. Buyer and NPCC shall not be charged any rent
for use of Company's space during such 90 days. If Company needs Buyer or NPCC
to enter a lease or sublease agreement that reflects these terms, then Buyer or
NPCC will reasonably cooperate.
8. INDEMNIFICATION
8.1. By Company and ▇▇▇▇▇ and
▇▇▇▇▇ Trust.
Subject
to the terms and conditions of this Article 8, Company, ▇▇▇▇▇ and ▇▇▇▇▇ Trust,
jointly and severally, hereby agree to compensate, indemnify, defend and hold
harmless Buyer, and its directors, officers, employees and controlled and
controlling persons (hereinafter "Buyer Indemnified Parties"), from and against
all Claims asserted against, resulting to, imposed upon, or incurred by Buyer,
affiliates of Buyer or the business and assets transferred to Buyer pursuant to
this Agreement, directly or indirectly, by reason of, arising out of or
resulting from
(a) the
inaccuracy or breach of any representation or warranty of Company or ▇▇▇▇▇
contained in or made pursuant to this Agreement;
(b) the
breach of any covenant of Company or ▇▇▇▇▇ contained in this
Agreement;
(c) any Claim
brought by or on behalf of any broker or finder retained, employed or used by
Company or any of its directors, officers, employees, shareholders or agents in
connection with the transactions provided for herein or the negotiation thereof,
whether or not disclosed herein; or
(d) any Claim
of or against Company, the Purchased Assets or the business of Company not
specifically assumed by Buyer pursuant hereto.
As used
in this Article 8, the term "Claim" shall include (i) all Liabilities; (ii) all
losses, deficiencies, damages (including, without limitation, consequential
damages), judgments, awards, penalties and settlements; (iii) all demands,
claims, suits, actions, causes of action, proceedings and assessments, whether
or not ultimately determined to be valid; and (iv) all costs and expenses
(including, without limitation, interest (including prejudgment interest in any
litigated or arbitrated matter), court costs and fees and expenses of attorneys
and expert witnesses) of investigating, defending or asserting any of the
foregoing or of enforcing this Agreement.
20
▇.▇.▇▇
Buyer.
Subject
to the terms and conditions of this Article 8, Buyer hereby agrees to indemnify,
defend and hold harmless Company, its directors, officers, employees,
shareholders and controlling persons (the "Company Indemnified Parties") from
and against all Claims asserted against, resulting to, imposed upon or incurred
by any such person, directly or indirectly, by reason of or resulting from (a)
the inaccuracy or breach of any representation or warranty of Buyer contained in
or made pursuant to this Agreement; (b) the breach of any covenant of Buyer
contained in this Agreement; or (c) all Claims of or against Company
specifically assumed by Buyer pursuant hereto.
▇.▇.▇▇ NPCC.
Subject
to the terms and conditions of this Article 8, NPCC hereby agrees to indemnify,
defend, and hold harmless the Company Indemnified Parties from and against all
claims asserted against, resulting to, imposed upon or incurred by any such
person, directly or indirectly, by reason of or resulting from: (a) the Buyer's
failure to deliver the Purchase Price as described in this Agreement; or (b) the
Buyer's failure to indemnify any party as described in this
Agreement.
8.4.Indemnification of
Third-Party Claims.
The
following provisions shall apply to any Claim subject to indemnification which
is (i) a suit, action or arbitration proceeding filed or instituted by any third
party, or (ii) any other form of proceeding or assessment instituted by any
Government Entity:
(a) Notice and Defense.
The party or parties to be indemnified (whether one or more, the
"Indemnified Party") will give the party from whom indemnification is sought
(the "Indemnifying Party") prompt written notice of any such Claim, and the
Indemnifying Party will undertake the defense thereof by representatives chosen
by it. The assumption of defense shall constitute an admission by the
Indemnifying Party of its indemnification obligation hereunder with respect to
such Claim, and its undertaking to pay directly all costs, expenses, damages,
judgments, awards, penalties and assessments incurred in connection therewith.
Failure to give such notice shall not affect the Indemnifying Party's duty or
obligations under this Article 8, except to the extent the Indemnifying Party is
prejudiced thereby. So long as the Indemnifying Party is defending any such
Claim actively and in good faith, the Indemnified Party shall not settle such
Claim. The Indemnified Party shall make available to the Indemnifying Party or
its representatives all records and other materials required by them and in the
possession or under the control of the Indemnified Party, for the use of the
Indemnifying Party and its representatives in defending any such Claim, and
shall in other respects give reasonable cooperation in such
defense.
(b) Failure to Defend. If
the Indemnifying Party, within a reasonable time after notice of any such Claim,
fails to defend such Claim actively and in good faith, the Indemnified Party
will (upon further notice) have the right to undertake the defense, compromise
or settlement of such Claim or consent to the entry of a judgment with respect
to such Claim, on behalf of and for the account and risk of the Indemnifying
Party, and the Indemnifying Party shall thereafter have no right to challenge
the Indemnified Party's defense, compromise, settlement or consent to
judgment.
21
(c) Indemnified Party's Rights.
Anything in this Article 8 to the contrary notwithstanding, (i) if there
is a reasonable probability that a Claim may materially and adversely affect the
Indemnified Party other than as a result of money damages or other money
payments, the Indemnified Party shall have the right to defend, compromise or
settle such Claim, and (ii) the Indemnifying Party shall not, without the
written consent of the Indemnified Party, settle or compromise any Claim or
consent to the entry of any judgment which does not include as an unconditional
term thereof the giving by the claimant or the plaintiff to the Indemnified
Party of a release from all Liability in respect of such Claim.
8.5.Limitations on
Indemnification.
Except
for any willful or knowing breach or misrepresentation, as to which claims may
be brought without limitation as to time or amount:
(a) Time Limitation. No
claim or action shall be brought under this Article 8 for breach of a
representation or warranty after the lapse of twenty-one (21) months following
the Closing, except for claims brought by a third party, in which case such
claim or action shall be brought within three (3) years following the Closing.
Regardless of the foregoing, however, or any other provision of this
Agreement:
(i) There
shall be no time limitation on claims on actions brought for breach of any
representation or warranty made in or pursuant to Sections 4.8(c), 4.13, 4.1.8,
4.19 and 4.20, and Company and Shareholders hereby waive all applicable
statutory limitation periods with respect thereto.
(ii) Any claim
or action brought for breach of any representation or warranty made in or
pursuant to Section 4.4 may be brought at any time until the underlying tax
obligation is barred by the applicable period of limitation under federal and
state laws relating thereto (as such period may be extended by
waiver).
(iii) Any claim made by a party hereunder by filing a suit or action in a court
of competent jurisdiction or a court reasonably believed to be of competent
jurisdiction or by a demand for arbitration in accordance with Article 10 hereof
for breach of a representation or warranty prior to the termination of the
survival period for such claim shall be preserved despite the subsequent
termination of such survival period.
(b) General. The
limitations set forth in this Section 8.5 do not in any way limit the obligation
of any party to indemnify the other party from and against any Claim arising
from any breach of a covenant made herein, even if such breach also constitutes
a breach of a
representation
or warranty. Without limiting the generality of the foregoing, the obligations
of Company, ▇▇▇▇▇ and ▇▇▇▇▇ Trust to indemnify the Buyer Indemnified Parties
from and against any Liability of Company that is not an Assumed Liability shall
be unaffected by the limitations set forth in this Section 8.5.
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(c) Monetary Cap. The
aggregate Liability at any particular time of Company, ▇▇▇▇▇ and ▇▇▇▇▇ Trust for
claims under this Article 8, other than for damages related to a third party
claim, shall be limited to an amount equal to the amount then remaining owed to
the Company under the Note. The aggregate Liability at any particular time of
Buyer and NPCC for claims under this Article 8, other than for damages related
to a third party claim, shall be limited to an amount equal to the amount then
remaining owed to the Company under the Note. If the Company is required to
indemnify the Buyer Indemnified Parties for a third party claim, the Company
must pay such indemnification obligation in cash. If the Company is required to
indemnify the Buyer Indemnified Parties for a claim not related to a third
party's claim, then the Company may pay such indemnification obligation by first
delivering shares of NPCC common stock to the Buyer Indemnified Parties. For
purposes of this Article 8, each share of NPCC common stock shall be deemed to
be valued at One Dollar ($1.00) per share. Company may not deliver more than One
Million (1,000,000) shares of NPCC common stock to satisfy its aggregate
indemnification obligations.
(d) Basket.
Notwithstanding anything to the contrary in this Article 8, no party
shall be liable under this Article 8 until the aggregate amount otherwise due to
the Company Indemnified Parties or the Buyer Indemnified Parties, as the case
may be, equals or exceeds an accumulated total of $20,000. Once such claims
equal or exceed the $20,000 threshold, the Company Indemnified Parties or the
Buyer Indemnified Parties, as the case may be, will be entitled to the full
amount of all indemnified claims beginning with the first dollar of such
claims.
8.6.
No Waiver. The
closing of the transactions contemplated by this Agreement shall not constitute
a waiver by any party of its rights to indemnification hereunder, regardless of
whether the party seeking indemnification has knowledge of the breach, violation
or failure of condition constituting the basis of the Claim at or before the
Closing, and regardless of whether such breach, violation or failure is deemed
to be "material."
9.CLOSING
The
closing of this transaction ("▇▇▇ ▇▇▇▇▇▇▇") shall take place at the offices of
▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, Jacksonville, Florida, aton August , 2008, except
for delivery of the note
which
shall occur in ▇▇. ▇▇▇▇'▇, ▇▇ at approximately the same time and date, or at
such other time and place as the parties hereto shall agree upon. Such date is
referred to in this Agreement as the "Closing Date".
9.1.
Documents to be
Delivered by Company and ▇▇▇▇▇.
At the
Closing, Company and ▇▇▇▇▇ shall deliver to Buyer the following documents, in
each case duly executed or otherwise in proper form:
(a) ▇▇▇▇ of Sale. ▇▇▇▇ of
sale and such other instruments of assignment, transfer, conveyance and
endorsement as will be sufficient in the opinion of Buyer and its counsel to
transfer, assign, convey and deliver to Buyer the Purchased Assets as
contemplated hereby.
23
(b) Compliance Certificate.
A certificate signed by the chief executive officer of Company that each
of the representations and warranties made by Company and ▇▇▇▇▇ in this
Agreement is true and correct in all material respects on and as of the Closing
Date with the same effect as though such representations and warranties had been
made or given on and as of the Closing Date (except for any changes permitted by
the terms of this Agreement or consented to in writing by Buyer), and that
Company and ▇▇▇▇▇ have performed and complied with all of Company's and ▇▇▇▇▇'▇
obligations under this Agreement which are to be performed or complied with on
or prior to the Closing Date.
(c) Agreements. The
agreement referred to in Section 6.1 duly executed by the persons referred to in
such Section.
(d) Certified Resolutions.
A certified copy of the resolutions of the Board of Directors and the
shareholders of Company authorizing and approving this Agreement and the
consummation of the transactions contemplated by this Agreement.
(e) Articles, Bylaws and Good
Standing Certificates. A copy of the Bylaws of Company certified by the
secretary of Company, and a copy of the Articles of Incorporation of Company
certified by the Secretary of State of the state of incorporation of Company and
good standing certificates from the state of incorporation of Company and from
the State of Florida.
(f) Incumbency Certificate.
Incumbency certificates relating to each person executing any document
executed and delivered to Buyer pursuant to the terms hereof.
(g) Other Documents. All
other documents, instruments or writings required to be delivered to Buyer at or
prior to the Closing pursuant to this Agreement and such other certificates of
authority and documents as Buyer may reasonably request.
9.2.Documents to be Delivered by
Buyer.
At the
Closing, Buyer shall deliver to Company the following documents, in each case
duly executed or otherwise in proper form:
(a) Purchase Price. To
Company a check as required by Section 3.2(b), the note described in Section
3.2(c) and the stock certificate described in Section 3.2(d).
(b) Assumption of Liabilities.
Such undertakings and instruments of assumption as will be reasonably
sufficient in the opinion of Company and its counsel to evidence the assumption
of Company Liabilities as provided for in Article 2.
(c) Compliance Certificate.
A certificate signed by the chief executive officer of Buyer that the
representations and warranties made by Buyer in this Agreement are true and
correct on and as of the Closing Date with the same effect as though such
representations and warranties had been made or given on and as of the Closing
Date (except for any changes permitted by the terms of this Agreement or
consented to in
writing by Company), and that Buyer has performed and complied with all
of Buyer's obligations under this Agreement which are to be performed or
complied with on or prior to the Closing Date.
(d) Certified Resolutions.
A certified copy of the resolutions of the Board of Directors of Buyer
authorizing and approving this Agreement and the consummation of the
transactions contemplated by this Agreement.
(e) Articles, Bylaws and Good
Standing Certificates. A copy of the Bylaws of Buyer certified by the
secretary of Buyer, and a copy of the Articles of Incorporation of Buyer
certified by the Florida Secretary of State and good standing certificate from
the State of Florida.
(f) Incumbency Certificate.
Incumbency certificates relating to each person executing any document
executed and delivered to Company by Buyer pursuant to the terms
hereof.
(g) Agreements. The
agreement referred to in Section 6.1 duly executed by the persons referred to in
such section.
(h) Other Documents. All
other documents, instruments or writings required to be delivered to Company at
or prior to the Closing pursuant to this Agreement and such other certificates
of authority and documents as Company may reasonably request.
10.
RESOLUTION OF DISPUTES
10.1.
Arbitration.
After the
Closing, any dispute, controversy or claim arising out of or relating to this
Agreement or the negotiation hereof or entry hereunto or any contract or
agreement entered into pursuant hereto or the performance by the parties of its
or their terms shall be settled by binding arbitration held in Jacksonville,
Florida in accordance with the Commercial Arbitration Rules of the American
Arbitration Association then in effect, except as specifically otherwise
provided in this Article 10. This Article 10 shall be construed and enforced in
accordance with the Federal Arbitration Act, notwithstanding any other choice of
law provision in this Agreement. Notwithstanding the foregoing:
(a) Buyer
may, in its discretion, apply to a court of competent jurisdiction for equitable
relief as provided in Section 11.4. Such an application shall not be deemed a
waiver of the right to compel arbitration pursuant to this Article.
(b) No party
shall be required to submit to arbitration hereunder unless all persons who are
not parties to this Agreement, but who are necessary parties to a complete
resolution of the controversy, submit to the arbitration process on the same
terms as the parties hereto. Without limiting the generality of the foregoing,
no claim under Article 8 for the indemnification of a third-party claim shall be
subject to arbitration under this Article 10 unless the third party bringing
such claim against the indemnitee shall agree in writing to the application of
this Article 10 of the resolution of such claim.
24
10.2.
Arbitrators.
If the
matter in controversy (exclusive of attorney fees and expenses) shall appear, as
at the time of the demand for arbitration, to exceed $500,000, then the panel to
be appointed shall consist of three neutral arbitrators; otherwise, one neutral
arbitrator.
10.3.
Procedures: No
Appeal.
The
arbitrator(s) shall allow such discovery as the arbitrator(s) determine
appropriate under the circumstances and shall resolve the dispute as
expeditiously as practicable, and if reasonably practicable, within 120 days
after the selection of the arbitrator(s). The arbitrator(s) shall give the
parties written notice of the decision, with the reasons therefor set out, and
shall have 30 days thereafter to reconsider and modify such decision if any
party so requests within 10 days after the decision. Thereafter, the decision of
the arbitrator(s) shall be final, binding, and nonappealable with respect to all
persons, including (without limitation) persons who have failed or refused to
participate in the arbitration process.
10.4.
Authority.
The
arbitrator(s) shall have authority to award relief under legal or equitable
principles, including interim or preliminary relief, and to allocate
responsibility for the costs of the arbitration and to award recovery of
attorneys fees and expenses in such manner as is determined to be appropriate by
the arbitrator(s).
10.5.
Entry of
Judgment.
Judgment
upon the award rendered by the arbitrator(s) may be entered in any court having
in personam and subject matter jurisdiction. Company, Buyer, ▇▇▇▇▇ and ▇▇▇▇▇
Trust hereby submit to the in personam jurisdiction of the Federal and State
courts in ▇▇▇▇▇ County, Florida, for the purpose of confirming any such award
and entering judgment thereon.
10.6.
Confidentiality.
All
proceedings under this Article 10, and all evidence given or discovered pursuant
hereto, shall be maintained in confidence by all parties and by the
arbitrators.
10.7.
Continued
Performance.
The fact
that the dispute resolution procedures specified in this Article 10 shall have
been or may be invoked shall not excuse any party from performing its
obligations under this Agreement and during the pendency of any such procedure
all parties shall continue to perform their respective obligations in good
faith, subject to any rights to terminate this Agreement that may be available
to any party.
25
10.8.
Tolling.
All
applicable statutes of limitation shall be tolled while the procedures specified
in this Article 10 are pending. The parties will take such action, if any,
required to effectuate such tolling.
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11. MISCELLANEOUS 11.1.
Further
Assurance.
|
From time
to time, at Buyer's request and without further consideration, Company and ▇▇▇▇▇
will execute and deliver to Buyer such documents, instruments and consents and
take such other action as Buyer may reasonably request in order to consummate
more effectively the transactions contemplated hereby, to discharge the
covenants of Company and ▇▇▇▇▇ and to vest in Buyer good, valid and marketable
title to the business and assets being transferred hereunder.
11.2.
Disclosures and
Announcements.
Both the
timing and the content of all disclosure to third parties and public
announcements concerning the transactions provided for in this Agreement by
either Company or Buyer shall be subject to the approval of the other in all
essential respects, except that Company's approval shall not be required as to
any statements and other information which Buyer may submit to the Securities
and Exchange Commission, or be required to make pursuant to any rule or
regulation of the Securities and Exchange Commission, or otherwise required by
law.
11.3.
Assignment Parties in
Interest.
(a) Assignment. Except as
expressly provided herein, the rights and obligations of a party hereunder may
not be assigned, transferred or encumbered without the prior written consent of
the other parties. Notwithstanding the foregoing, Buyer may, without consent of
any other party, cause one or more subsidiaries of Buyer to carry out all or
part of the transactions contemplated hereby; provided, however, that Buyer
shall, nevertheless, remain liable for all of its obligations, and those of any
such subsidiary, to Company hereunder.
(b) Parties in Interest.
This Agreement shall be binding upon, inure to the benefit of, and be
enforceable by the respective successors and permitted assigns of the parties
hereto. Nothing contained herein shall be deemed to confer upon any other person
any right or remedy under or by reason of this Agreement.
11.4.
Equitable
Relief.
Company
and ▇▇▇▇▇ agree that any breach of the Company's obligation to consummate the
sale of the Purchased Assets on the Closing Date, any breach of any
noncompetition obligation imposed by Section 6.2 hereof or by any agreement
delivered to Buyer pursuant to Section 6.1 hereof, or any breach by Company or
▇▇▇▇▇ of their obligations imposed
by Section 6.3 hereof, will result in irreparable injury to Buyer for which a
remedy at law would be inadequate; and that, in addition to any relief at law
which may be available to Buyer for such breach and regardless of any other
provision contained in this Agreement, Buyer shall be entitled to injunctive and
other equitable relief as a court may grant. This Section 11.4 shall not be
construed to limit Buyer's right to obtain equitable relief for other breaches
of this Agreement under general equitable standards.
26
11.5.
Law Governing
Agreement.
This
Agreement shall be construed and interpreted according to the internal laws of
the State of Florida, excluding any choice of law rules that may direct the
application of the laws of another jurisdiction. Subject to the provisions of
Article 10, the parties hereby stipulate that any action or other legal
proceeding arising under or in connection with this Agreement may be commenced
and prosecuted in its entirety in the federal or state courts having
jurisdiction over ▇▇▇▇▇ County, Florida, each party hereby submitting to the
personal jurisdiction thereof, and the parties agree not to raise the objection
that such courts are not a convenient forum. Process and pleadings mailed to a
party at the address provided in Section 11.7 shall be deemed properly served
and accepted for all purposes.
11.6.
Amendment and
Modification.
Buyer,
Company and ▇▇▇▇▇ may amend, modify and supplement this Agreement in such manner
as may be agreed upon by them in writing.
11.7.
Notice.
All
notices, requests, demands and other communications hereunder shall be given in
writing and shall be: (a) personally delivered; (b) sent by telecopier,
facsimile transmission or other electronic means of transmitting written
documents; or (c) sent to the parties at their respective addresses indicated
herein by registered or certified U.S. mail, return receipt requested and
postage prepaid, or by private overnight mail courier service. The respective
addresses to be used for all such notices, demands or requests are as
follows:
(a)If to
Buyer, to:
SE1
ACQUISITION, INC. ▇▇▇ ▇▇▇, ▇▇▇▇▇ #▇▇▇
▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
27
With a
copy to:
▇▇▇▇▇
& Lardner LLP
▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to
NPCC, to:
▇▇▇ ▇▇ ▇,
▇▇▇▇▇ #▇▇▇
▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
With a
copy to:
▇▇▇▇▇
& ▇▇▇▇▇▇▇ LLP
▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to
such other person or address as Buyer shall furnish to Company in
writing.
(b) If
to Company or ▇▇▇▇▇ or ▇▇▇▇▇ Trust, to:
Solar
Energy, Inc.
▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇ Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a
copy to:
▇▇▇▇▇▇▇
▇▇▇▇▇ LLP
▇▇ ▇.
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq. Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to
such other person or address as Company shall furnish to Buyer in
writing.
If
personally delivered, such communication shall be deemed delivered upon actual
receipt; if electronically transmitted pursuant to this paragraph, such
communication shall be deemed delivered the next business day after transmission
(and sender shall bear the burden of proof of
delivery); if sent by overnight courier pursuant to this paragraph, such
communication shall be deemed delivered upon receipt; and if sent by U.S. mail
pursuant to this paragraph, such communication shall be deemed delivered as of
the date of delivery indicated on the receipt issued by the relevant postal
service, or, if the addressee fails or refuses to accept delivery, as of the
date of such failure or refusal. Any party to this Agreement may change its
address for the purposes of this Agreement by giving notice thereof in
accordance with this Section.
28
11.8.
Expenses.
Regardless
of whether or not the transactions contemplated hereby are
consummated:
(a) Expenses to be Paid by
Company. Company shall pay, and shall
indemnify,
defend and hold Buyer harmless from and against, each of the
following:
(i) Transfer Taxes. Any
sales, use, excise, transfer or other similar tax imposed with respect to the
transactions provided for in this Agreement, and any interest or penalties
related thereto.
(ii) Professional Fees.
All fees and expenses of Company's legal, accounting, investment banking
and other professional counsel in connection with the transactions contemplated
hereby.
(b) Other. Except as
otherwise provided herein, each of the parties shall bear its own expenses and
the expenses of its counsel and other agents in connection with the transactions
contemplated hereby.
(c) Costs of Litigation or
Arbitration. The parties agree that (subject to the discretion, in an
arbitration proceeding, of the arbitrator as set forth in Section 104) the
prevailing party in any action brought with respect to or to enforce any right
or remedy under this Agreement shall be entitled to recover from the other party
or parties all reasonable costs and expenses of any nature whatsoever incurred
by the prevailing party in connection with such action, including without
limitation attorneys' fees and prejudgment interest.
11.9.
Entire
Agreement.
This
instrument embodies the entire agreement between the parties hereto with respect
to the transactions contemplated herein, and there have been and are no
agreements, representations or warranties between the parties other than those
set forth or provided for herein.
11.10.
Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
29
11.11,
Headings.
The
headings in this Agreement are inserted for convenience only and shall not
constitute a part hereof
11.12.
Glossary of
Terms.
The
following sets forth the location of definitions of capitalized terms defined in
the body of this Agreement:
"Affiliate"
- Section 12(e)
"Assumed
Contracts" - Section 2.1(a) "Assumed Liabilities" - Section 2.1 "Buyer's
Affiliates" - Section 8.1 "CERCLA" - Section 4.8(c)
"Claim" -
Section 8.1
"Closing"
- Preamble to Article 9 "Closing Date" - Section 9
"Code"
Section 3.3
"Environmental
Laws" - Section 4.8(c) "Excluded Assets" - Section 1.2 "Government Entities" -
Section 2.2(i) IRS" - Section 33
"indemnified
Party" - Section 8.4(a) "Indemnifying Party" - Section 8,4(a) "Laws" - Section
2.2(i)
"Liability"
- Section 2.1
"Lien" -
Section 4.9(a)
"Litigation"
- Section 2.2(d)
"Orders"
- Section 2.2(i)
"Permitted
Real Property Liens" - Section 4.9(a)
"Products"
- Section 4.13
"Purchased
Assets" - Section 1.1 "Purchase Price" - Section 3.1
"Trade
Rights" - Section 1.1(c)
"Waste" -
Section 4.8(c)
Where any
group or category of items or matters is defined collectively in the plural
number, any item or matter within such definition may be referred to using such
defined term in the singular number.
30
IN WITNESS WHEREOF, the
parties have executed this Agreement as of the date and year first above
written.
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"BUYER"
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"COMPANY"
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| SEI ACQUISITION, INC. | SOLAR ENERGY, INC. | |||
|
/s/
|
/s/
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|
Name
|
Name
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|||
|
Title
|
Title
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| "NPCC" | ▇▇▇▇▇ ▇. ▇▇▇▇▇ REVOCABLE TRUST | |||
| NP CAPITAL CORP | dated June 16, 1993 | |||
|
/s/
|
/s/
▇▇▇▇▇
▇. ▇▇▇▇▇
|
|||
|
Name
|
▇▇▇▇▇
▇. ▇▇▇▇▇
|
|||
|
Title
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Trustee
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31