EXHIBIT 2.3
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GLORIA SPIRE SOLAR, LLC
LIQUIDATION AGREEMENT
This Liquidation Agreement (this "Agreement") is made this 29th day of May,
2009 (the "Effective Date"), by and among Gloria Solar (Delaware) Company, Ltd.,
a Delaware corporation with its principal office at No. 498, Sec. 2, Bentian
Road, Annan District, Taiwan City 709, Taiwan, Republic of China ("Gloria
(Delaware)"), Gloria Solar Co., Ltd., a corporation incorporated in the Republic
of China with its principal office at No. 498, Sec. 2, Bentian Road, Annan
District, Taiwan City 709, Taiwan, Republic of China ("Gloria (Taiwan)"), Gloria
Spire Solar, LLC, a limited liability company organized under the laws of the
State of Delaware in the United States of America with its principal office at
One Patriots Park, Bedford, Massachusetts 01730-2396, U.S.A. ("GSS"), and Spire
Corporation, a corporation organized under the laws of the Commonwealth of
Massachusetts in the United States of America with its principal office at One
Patriots Park, Bedford, Massachusetts 01730-2396, U.S.A. ("Spire"). Gloria
(Delaware), Gloria (Taiwan), GSS, and Spire, are collectively referred to as the
"Parties" in this Agreement and individually referred to as a "Party."
WHEREAS, the Parties entered into a series of agreements related to the
formation and governance of GSS, an entity jointly owned by Gloria (Delaware)
and Spire, on or about July 31, 2007;
WHEREAS, the Parties desire to liquidate and dissolve GSS;
WHEREAS, pursuant to Section 12.02 of the Operating Agreement, dated July
31, 2007 and as amended on December 28, 2007, by and among Spire, Gloria
(Delaware) and GSS (the "Operating Agreement"), Spire and Gloria (Delaware),
constituting the holders of at least eighty percent (80%) of the currently
outstanding membership units, have authorized the liquidation and dissolution of
GSS;
WHEREAS, pursuant to Section 4.06(k) of the Operating Agreement, the
Managing Board (as defined in the Operating Agreement), including one Spire
Manager and one Gloria (Delaware) Manager, have authorized the liquidation and
dissolution of GSS;
WHEREAS, following provision for existing and potential future liabilities,
the Parties shall cause the Managing Board to distribute GSS's assets in
liquidation to Gloria (Delaware) and Spire in accordance with Section 12.03 of
the Operating Agreement and as provided herein; and
WHEREAS, in connection with such liquidation and dissolution, each Party
desires to release the other Party from any claims related to the relationship
between the Parties from July 31, 2007 to the present, and to establish the
obligations which will govern the Parties hereafter.
NOW THEREFORE, in consideration of the obligations, covenants, and
conditions contained herein, the receipt and sufficiency of which is hereby
agreed and acknowledged, the Parties hereto agree to be bound by the terms and
conditions as set forth herein:
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1. DEFINITIONS. For purposes of this Agreement, the following words and
phrases shall have the respective meanings as follows:
1.1 "AFFILIATE" means a Person who, directly or indirectly through one
or more intermediaries, controls, is controlled by, or is under
common control with, the Person specified. For purposes of this
Agreement, "control" (including the terms "controlled by" and "under
common control with") means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting
securities, as trustee or executor, by contract or otherwise,
including, without limitation, the ownership, directly or
indirectly, of securities having the power to elect a majority of
the board of directors or similar body governing the affairs of such
Person.
1.2 "ASSET PURCHASE AGREEMENT" means the Asset Purchase Agreement, dated
as of July 31, 2007, entered into by and between Spire and Gloria
(Taiwan).
1.3 "CONTRIBUTION AGREEMENT" means the Contribution Agreement, dated as
of July 31, 2007, by and among Spire, Gloria (Taiwan), and Gloria
(Delaware).
1.4 "DAYS" OR "DAYS" means all calendar days, regardless of whether such
days are legal holidays under the laws of the United States or any
State or the laws of Taiwan, the Republic of China.
1.5 "INTELLECTUAL PROPERTY" means, for the purposes of this Agreement,
any and all patent rights, copyright rights, mask work rights, trade
secret rights, common law confidential information rights, SUI
GENERIS database rights, and all other intellectual and industrial
property rights of any sort throughout the world (including any
application therefor), as well as any idea, concept, discovery,
invention, development, technology, work of authorship, trade
secret, software, firmware, tool, process, technique, know-how,
data, plan, device, apparatus, architecture, specification, design,
circuit, layout, mask work, algorithm, program, code, documentation,
or other material or information, tangible or intangible, whether or
not it may be patented, copyrighted, or otherwise protected
(including all versions, modifications, enhancements, and derivative
works thereof existing at the time of the grant).
1.6 "MEMBER" or "MEMBERS" means either or both of Spire and Gloria
(Delaware), as the context may require, or a person or entity with
an ownership interest in GSS.
1.7 "MEMBERSHIP INTEREST" means a Member's entire equity interest in
GSS, including the Membership Units (as such are defined in the
Operating Agreement) owned by such Member and any right of such
Member to the return of Capital Contributions and any interest
thereon.
1.8 "SPIRE TRADEMARK LICENSES" means both the Trademark License
Agreement between Spire and GSS and the Trademark License Agreement
between Spire and Gloria (Taiwan), both dated as of July 31, 2007.
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1.9 "SUBLEASE" means the Sublease between Spire and GSS dated on or
about December 26, 2007.
1.10 "TECHNOLOGY" means the know-how and developed means for surveying,
designing, and implementing complete PV systems, for customers,
including, but not limited to, commercial, government, and utility
entities, that comprises protectable Intellectual Property. This
shall include all aspects of design of the system per the customer
request including, but not limited to: site survey; permit and
funding application support; module design and specification; BOS
specification; IPP financing arrangements; subcontractor selection
and contracting methods; and final inspection methods.
1.11 "TECHNOLOGY LICENSE AGREEMENT" means that certain Technology License
Agreement between Spire and GSS, dated as of July 31, 2007.
1.12 "TRANSACTION DOCUMENTS" means the Operating Agreement, the
Contribution Agreement, the Spire Trademark Licenses, and the
Technology License Agreement.
1.13 "TRANSITIONAL SERVICES AGREEMENT" means the Transitional Services
Agreement between Spire and GSS dated as of July 31, 2007.
2. OPTION TO ASSUME GSS PROJECTS; ASSUMPTION OF GSS'S WARRANTY OBLIGATIONS;
TERMINATION OF THE TRANSACTION DOCUMENTS
2.1 DISTRIBUTION OF THE CURRENT ASSETS AND LIABILITIES OF GSS. Pursuant
to Section 12.03 of the Operating Agreement, the Parties agree that
the current assets and the liabilities of GSS assumed herein shall
be distributed to Spire and Gloria (Delaware) as follows:
2.1.1 Assumption by each Party of GSS Projects and Prospective
Projects. Pursuant to the schedule at Schedule 2.1.1(a), the
Parties agree that the Party designated as indicated at
Schedule 2.1.1(a) shall be the sole Party herein to pursue
such solar power generating facility design, engineering, or
construction contracts (each, a "Project"). As consideration
for any such assumption, the Party assuming the Project will
pay the other Party a royalty fee based on the percentage
indicated at Schedule 2.1.1(a), pursuant to the conditions
stated at schedule 2.1.1(a), multiplied by the revenue
generated by the particular Project as received from the
customer or any third party on account of such Project,
multiplied by that Party's Membership Interest in GSS.
Pursuant to the schedule at Schedule 2.1.1(b), the Party
designated therein shall have the exclusive option, to the
exclusion of the other signatories to this Agreement (the
"Non-optionee Parties"), for the one hundred twenty (120) day
period after the Dissolution Date (as defined below), to
enter into negotiations with the customers indicated at
Schedule 2.1.1(b) for the prospective projects (the
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"Prospective Projects") listed therein. The Non-optionee
Parties shall not communicate with, or interfere in any way,
with the designated Party's ability to negotiate for the
Prospective Projects during the period of exclusivity
provided in the previous sentence. No royalties or other
consideration shall be paid for any income earned on
Prospective Projects. With respect to any projects or
prospects that are not Projects or Prospective Projects
and/or for any Prospective Project after the period of
exclusivity provided above (the "Other Projects"), any Party
shall be able to pursue such Other Projects with no liability
or obligation to the other Parties. Notwithstanding the
foregoing, the Party assuming any Project or Prospective
Project shall not be liable to any other Party for losses,
damages or claims arising from: (i) assumed Projects,
regardless of whether such Projects are completed, and
regardless of whether such Projects generate anticipated
revenue; and (ii) for any Projects or Prospective Projects,
or Other Projects that are not assumed. In the event that no
Party assumes any Project that is currently ongoing or
potential project that is in the bidding stage, the Parties
shall take reasonable steps to wind up such Project or
potential Project on behalf of GSS prior to the Dissolution
Date, including, but not limited to, formally withdrawing
bids or bid bonds.
2.1.2 Assumption of GSS's warranty obligations. For each of the
completed GSS projects itemized in Schedule 2.1.2, the Party
indicated therein shall assume all of GSS's warranty
obligations for such project in exchange for payment from GSS
of the agreed value of the respective warranty obligation
actually assumed by Spire as detailed in Schedule 2.1.2.
2.1.3 Termination of GSS Employees. All GSS employees (the
"Terminated Employees") shall be offered severance
compensation ("Severance Payments") in an amount equal to
four weeks of base pay, in consideration for signing
respective severance agreements in writing.
2.1.4 Distribution of remaining assets. After all matters regarding
the winding up of GSS pursuant to Sections 12.02 and 12.03 of
the Operating Agreement have been accomplished, and the
reserve amount provided in Section 2.2 below has been set
aside, all remaining assets of GSS shall be distributed to
the Members in accordance with Schedule 2.1.4 (Distribution
of Assets). All Technology owned by GSS at the Dissolution
Date shall be distributed to each Member, with each Member
taking an undivided, individual joint ownership interest in
all such Technology; the Parties are free to use such
Technology without accounting to the other Parties.
2.2 RESPONSIBILITY FOR REMAINING LIABILITIES. Each Member of GSS shall
be indemnified and held harmless (the "Indemnified Party") by the
other Member (the "Indemnifying Party") for and against any Losses
(as defined at Section 11.02.a. of the Operating Agreement) arising
out of or resulting from: (a) the
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breach of any representation or warranty made by the Indemnifying
Party in this Agreement; or (b) the breach of any covenant or
agreement made by the Indemnifying Party that, despite the
termination of the Operating Agreement and the liquidation of GSS,
survives (including such survival due to operation of law or any
other reason), in which case such obligation shall be indemnified
fully by the Party that was originally responsible for such covenant
or agreement (and if neither party was so responsible, then ratably
by Gloria (Delaware) in the amount of 55% and by Spire in the amount
of 45%). Nothing contained herein shall be construed to create any
third party beneficiaries or new obligations in favor of third
parties. As a measure of protection against any such future claims,
Spire and Gloria (Delaware) shall open a joint escrow account with
Silicon Valley Bank, in the amount of One Hundred Thousand U.S.
Dollars ($100,000.00) (the "Escrow Account"), funded from the GSS
remaining assets, which shall be available for the payment of
post-dissolution claims. The signature of both Spire and Gloria
(Delaware) shall be required for any disbursal from such account. On
the date that is ninety (90) days after the Dissolution Date, the
Parties shall take reasonable steps to distribute any amount
remaining in such account to Spire and Gloria (Delaware) in
proportion to each Party's Membership Interest.
2.3 TERMINATION OF THE TRANSACTION DOCUMENTS.
2.3.1 TERMINATION OF THE OPERATING AGREEMENT. As of the effective
date of GSS's dissolution (the "Dissolution Date"), the
Parties agree and acknowledge that the Operating Agreement
will be terminated, with no further obligations between the
Parties except as provided herein. The Parties agree and
acknowledge that the standstill provisions of Section 7.02 of
the Operating Agreement do not apply to this Agreement, and
are hereby mutually terminated, to the degree that they would
be applicable.
2.3.2 TERMINATION OF THE TRADEMARK LICENSES. As of the Dissolution
Date, the Parties agree and acknowledge that the Trademark
Licenses will be terminated, and that GSS, Gloria (Delaware)
and Gloria (Taiwan) will have no further ability to use the
Spire Licensed Marks and the Gloria Licensed Marks
thereafter, except that each of the Licensees may continue to
use the Licensed Marks pursuant to the provisions of Section
7.4 of the Trademark Agreement, for ninety (90) days after
the Dissolution Date. In furtherance of this Agreement, the
Parties agree and acknowledge that none of GSS, Gloria
(Taiwan) and Gloria (Delaware) shall exercise their
respective rights to continue the duration of the respective
Trademark Licenses pursuant to the provisions of Section 7.3
of the respective Trademark Licenses.
2.3.3 TERMINATION OF THE TECHNOLOGY LICENSE AGREEMENT. As of the
Dissolution Date, the Parties agree and acknowledge that the
Technology License Agreement shall be terminated pursuant to
Section 5.1(a).
2.3.4 TERMINATION OF THE CONTRIBUTION AGREEMENT. As of the
Dissolution
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Date, the Parties agree and acknowledge that the Contribution
Agreement shall be terminated pursuant to Section 7.01(E),
and that, based on the Release in Section 2.4 below, no
representations and warranties contained in the Contribution
Agreement, including, but not limited to, those listed at
Section 6.01, shall survive the termination of the
Contribution Agreement.
2.4 RELEASE. With the exception of those on-going obligations as set
forth herein, including Section 2.2 hereof, between the Parties in
relation to the Transaction Documents, in consideration of the
mutual promises contained herein, all of the Transaction Documents
shall be terminated as of the Dissolution Date, and each Party
hereby releases and forever discharges the other, and its respective
officers, directors, partners, managers, members, employees and
agents, successors and assigns (all in their official and individual
capacities), including, but not limited to, the Managers of GSS,
from any and all suits, claims, demands, debts, sums of money,
damages, interest, attorneys' fees, expenses, actions, causes of
action, judgments, accounts, promises, contracts, agreements (each,
a "Claim"), and any and all claims of law or in equity, whether now
known or unknown, which the releasing Party now has or ever has had
related to or arising out of the other Party's performance and
termination of the Transaction Documents, including, but not
limited, any such claims arising out of the Parties' obligations as
Members of GSS, and each Party shall indemnify the other Parties and
hold them harmless for any such claim. The release provided here,
effective as of the Effective Date, shall be extended through the
Dissolution Date by the Parties' signature of the Release Extension
in substantially the same form as attached hereto at Schedule 2.4,
contingent on, and in partial consideration for, the receipt of the
assets pursuant to Section 2.1.4, above.
2.5 DISSOLUTION SCHEDULE. The Parties shall use reasonable efforts to
carry out the orderly winding up of GSS according to the schedule
provided at Schedule 2.5. The Parties agree and acknowledge that the
items and dates stated therein are targets only, and as such do not
create any binding obligation on either Party other than as provided
affirmatively in the text of this Agreement (separate from Schedule
2.5).
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3. POST-TERMINATION RELATIONSHIP
3.1 TECHNOLOGY AND INTELLECTUAL PROPERTY. As of the Dissolution Date,
neither Spire nor Gloria (Delaware) will have the right to use the
other's Technology or Intellectual Property (as separate and
distinct from the joint ownership interest in the Technology
distributed above at Section 2.1.4) for any purpose; provided,
however, that Spire or Gloria (Delaware) shall have a royalty-free,
non-exclusive, limited-term license to use the other's Technology
for the express purpose of performing any assumed GSS warranty
obligations (either itself or through an Affiliate or agent). The
term of each Party's respective license shall expire concurrent with
the expiration of the last of the respective Party's assumed GSS
warranty obligations.
3.2 COMPETITION AND SOLICITATION. Notwithstanding any provision in any
of the Transaction Documents, including, but not limited to, Section
5.10 of the Contribution Agreement, Section 5.12 of the Asset
Purchase Agreement, and Article 9 of the Operating Agreement,
nothing shall prevent any Party from competing with any other, in
any lawful way,
3.3 SUBLEASE. The Parties agree and acknowledge that the term of the
Sublease has expired, such that the Sublease is currently on a
month-to-month basis. As of the Dissolution Date, the Sublease shall
expire, unless terminated earlier by a written agreement between
Spire and GSS. GSS covenants to quit and surrender to Spire the
Sublease Premises (as defined in the Sublease), broom clean, in such
order and condition as is required under the Sublease. If GSS or any
of its property remains on the Sublease Premises beyond ten (10)
working days of the expiration or earlier termination of the
Sublease, such holding over shall not be deemed to create any
tenancy at will, but GSS shall be a tenant at sufferance only and
shall pay rent at a daily rate equal to two and one-half times the
total of the Fixed Rent and Additional Rent (as both terms are
defined in the Sublease) due under the Sublease, and other charges
due thereunder and shall, in addition, perform and observe all other
obligations and conditions to be performed or observed by GSS under
the Sublease. In addition, GSS shall indemnify and hold Spire
harmless from and against any and all liability, loss, cost, damage,
and expenses suffered or incurred by Spire arising out of, or
resulting from, any failure on the part of GSS to yield up the
Sublease Premises when and as required under the Sublease. The
foregoing shall survive the expiration or early termination of this
Agreement.
3.4 TRANSITIONAL SERVICES AGREEMENT. Spire shall continue to provide the
Services, as defined in the Transitional Services Agreement, at the
current rate being paid pursuant to Section 2.1 of the Transitional
Services Agreement, but the Parties agree and acknowledge that,
pursuant to Section 1.3 of the Transitional Services Agreement, the
Transitional Services Agreement shall terminate, with no further
obligation by Spire to provide any such Services, as of the
Dissolution Date, unless agreed otherwise by Spire and GSS, in
writing, prior to such date.
3.5 PRESS RELEASES. Other than one (1) press release which each Party
may issue, at
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its discretion, within a reasonable time after the Dissolution Date,
but only after providing a copy of the text to the other Parties, in
writing, no fewer than three (3) business days prior to the release,
and which press release shall not make any negative or derogatory
statements about the other Party, and an 8-K filing which Spire is
obligated to make, which text will be provided, in writing, in
advance, to the other Parties, Spire shall not provide or release
any information about the other Parties, and the other Parties shall
not provide or release any information about Spire, except as
provided herein, after the Dissolution Date.
3.6 CONFIDENTIAL INFORMATION. All Confidential Information, as such is
defined in the Transaction Documents, that has been disclosed by one
Party to another (as listed at Schedule 3.6), shall be returned to
the disclosing Party within ten (10) days of the Effective Date of
this Agreement, and shall not be used by the Party to whom it was
disclosed thereafter except as provided herein.
3.7 INDEMNIFICATION. Other than as provided elsewhere herein, each Party
shall have the obligation to indemnify and hold the other Party
harmless in any circumstance where the indemnified Party is a
subject to any claim, controversy, assertion of damages, action, or
suit from any third party (the "Liability") which arises from the
negligent actions or misconduct of the indemnifying Party, and from
any such fines or penalties as may be levied against the indemnified
Party. Such obligation may be mitigated or void in instances where,
and to the extent that, the indemnified Party engaged in negligent
actions or misconduct of its own accord which has preponderantly
contributed to the Liability.
3.8 RESOLUTION OF DISPUTES. Any dispute between the Parties shall be
referred to the International Chamber of Commerce, and any hearing
shall be held in San Francisco, California. The proceedings will be
conducted by three (3) arbitrators, one appointed by each Party, and
the third appointed by those arbitrators. The dispute shall be
governed by the rules of arbitration of the International Chamber of
Commerce. All such judgments as shall be rendered by the arbitration
panel shall be final and binding on the Parties. Costs of the
arbitration shall be initially shared by the Parties, except that,
after an arbitration decision, the arbitrators shall award to the
Party which substantially prevails, attorneys' fees and arbitration
expenses. Judgment upon any award made in arbitration may be entered
and enforced in any court of competent jurisdiction. This
arbitration provision shall not prevent either Party from initiating
an action in any court of competent jurisdiction, in the event that
such Party is in need of injunctive relief related to irreparable
harm that otherwise might arise in connection with the subject
matter of this Agreement.
4. PAYMENT
4.1 If any payment payable hereunder by any Party to another Party is
not paid when due, the same shall also bear interest from the date
when the same was payable until the date paid at the lesser of: (a)
eighteen percent (18%) per annum; or (b) the highest lawful rate of
interest which the Party to whom payment is owed may
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charge without violating any applicable law. The Party who is
obligated to make payment shall also be liable for all costs of
collection, including attorneys' fees, in the event that the Party
to whom payment is owed seeks to enforce the provisions of this
Section 4.1.
5. GENERAL
5.1 ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the Parties relating to the subject matter involved. All
prior or contemporaneous written or oral communications, agreements,
or understandings between the Parties and relating to the subject
matter as contained in the Transaction Documents, are superseded by
this Agreement.
5.2 AMENDMENTS. No change, amendment, or modification of this Agreement
shall be binding upon the Parties unless made in writing, executed
by the Parties.
5.3 TITLES. The titles of each of the Articles and Sections of this
Agreement shall not be construed as limiting the intent of the
subject matter they introduce.
5.4 GOVERNING LAW. The interpretation, construction, and the remedies
for the enforcement or breach of this Agreement shall be controlled
by the laws of the State of Delaware, regardless of the applicable
provisions regarding the principles of the conflicts of laws.
5.5 SEVERABILITY. In the event that an arbitrator or court holds that a
provision of this Agreement is in violation of applicable law, such
provision shall be enforced only to the extent it is not in
violation of law. All other provisions of this Agreement shall
remain in full force and effect.
5.6 WAIVER. No waiver shall be valid against the other Party unless made
in writing and signed by the Party against whom enforcement of such
waiver is sought, and only to the extent expressly specified.
5.7 EXECUTION IN COUNTERPARTS AND BY FACSIMILE. This Agreement may be
executed in as many counterparts as may be required. The signature
on any counterpart which is transmitted by facsimile to the other
Party shall be deemed the same as an original signature.
5.8 NOTICE. Where this Agreement shall require that notice be given by
one Party to the other or for any other communication between the
Parties, such notice shall be in English and given by certified
mail, express delivery service, or via facsimile transmission, to
the address provided above, or as otherwise provided or changed
hereinafter, in writing.
5.9 ASSIGNMENT. This Agreement and all of its covenants, terms, and
conditions shall bind and inure to the benefit of the Parties hereto
and their respective heirs, devisees, and successors, however the
Parties agree that:
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5.9.1 No Party may assign this Agreement, nor any of its rights and
obligations hereunder, to any third party without the prior,
written permission of the other Party, which permission shall
not be unreasonably delayed, conditioned, or denied, except
for its sale of all, or substantially all, of its assets, or
the sale of all of the equity of either Party; and
5.9.2 Any Party may assign its obligations to perform any warranty
or any Project, Prospective Project, or Other Project,
pursuant to this Agreement, together with the rights,
obligations, and licenses hereunder, to any Affiliate, by
giving the other Parties thirty (30) days' prior, written
notice.
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IN WITNESS WHEREOF, the Parties hereto signify their acknowledgment,
endorsement, and agreement of and with every covenant above and cause this
Agreement to be executed by their respective authorized representatives as of
the date first stated above:
GLORIA SOLAR (DELAWARE) COMPANY, LTD. SPIRE CORPORATION
By: /s/ Sam Wu By: /s/ Rodger W. LaFavre
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Rodger W. LaFavre
Its: Its: Chief Operating Officer
Date: May 29, 2009 Date: May 29, 2009
GLORIA SOLAR CO., LTD. GLORIA SPIRE SOLAR, LLC
By: /s/ Sam Wu By: /s/ Sam Wu
--------------------- ------------------------
Its: CEO Its: CEO
Date: May 29, 2009 Date: May 29, 2009