Radnóczy
      & Mészáros • NÖRR STIEFENHOFER LUTZ

     

    Cooperation
      Agreement

     

    (hereinafter
      the “Agreement”)

     

    is
      made and entered into this 29th day of September 2008, by and among


     

    Kraft
      Elektronikai
      Zártkörűen Működő Részvénytársaság

     

    Headquartered
      in Budapest 1112, Kőérberki
      út 36

     

    -
      hereinafter referred to as “Kraft”–

     

    BudaSolar
      Technológiai
      Korlátolt Felelősségű Társaság.

     

    Headquartered
      in Budapest 1121, Konkoly-Thege Miklós út 29-33

     

    -
      hereinafter referred to as “BudaSolar”
      -

     

    Istvan
      Krafcsik,
      an
      individual (“Krafcsik”)
      

     

    Attila
      Horvath,
      an
      individual (“Horvath”).-
      and


     

    Solar
      Thin Films, Inc.

     

    Headquartered
      in Haddonfield, New Jersey

     

    -
      each of
      the above individually referred to as a “Party”
and
      collectively referred to as “Parties”
      -

     

    Preamble

     

    A. The
      Parties have entered into a share exchange agreement, dated September 29, 2008
      regarding the contemplated acquisition of 100% of the share capital and quotas
      of BudaSolar by Kraft and the transfer by Solar Thin Films, Inc. (the owner
      of
      100% of the share capital of Kraft) of 40% of the shares in Kraft to the
      stockholders of BudaSolar (the “Stock
      Exchange Agreement”).
      

     

    B. This
      Agreement shall regulate the relationship and cooperation between the Parties
      during the interim period until the closing of the transaction described in
      the
      Stock Exchange Agreement. If for any reason the transactions contemplated by
      the
      Stock Exchange Agreement shall not be consummated, this Agreement shall continue
      in force and effect until terminated by either Kraft or BudaSolar, subject
      at
      all times to the provisions of Section 7 of this Agreement.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Radnóczy
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    §
      1 Subject Matter of the Agreement

     

    BudaSolar
      agrees to provide Kraft with technical and consultancy services and
      cooperate
      in
      the area of improvements to the Kraft single product line consisting of
      equipment and components that are used to manufacture amorphous silicon solar
      panels or modules (the “Products”).
      

     

    §
      2 The Services

     

    (1) In
      addition to the specific services contemplated by Section 1 above,
      BudaSolar
      shall provide the following specific services to Kraft that are set forth in
      this Section 2 (collectively, with Section 1, the “Services”):

     

    
      	 	
              (a)

            	
              BudaSolar
                will provide intellectual property, technology and personnel to complete
                all Products of Kraft which are not equipped with operative software,
                hardware, or otherwise
                completed; .

            


    

     

    
      	 	
              (b)

            	
              BudaSolar
                shall provide intellectual property, technology and personnel to
                improve
                all of the Products, including providing the missing equipment to
                meet the
                requirements of 6MWp/year factory throughput;
                and

            


    

     

    
      	 	
              (c)

            	
              BudaSolar
                shall adjust the photo voltaic process recipes for 6% PV
                efficiency.

            


    

     

    Kraft
      shall make the Products and its technical description available to
      BudaSolar.

     

     (2) The
      Parties may send out proposals to potential customers regarding the sale of
      the
      Products on the letterhead of Kraft (to the extent deemed solely a Kraft Product
      as described below) and on the letterhead of both Kraft and BudaSolar (to the
      extent deemed a joint Product, as described below). That means in particular
      that

     

    
      	 	
              (a)

            	
              Kraft
                will offer and sell the 6MW line of Products solely as a Kraft
                product
                and under the Kraft name (which name shall be changed from Kraft
                to STF
                Technologies Ltd., as provided in the Stock Purchase Agreement);
                

            


    


    
      
        
        

      

      
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              (b)

            	
              For
                so long as the Stock Exchange Agreement shall remain in force, prior
                to
                the closing under the Stock Exchange Agreement, BudaSolar will offer
                and
                sell the 6MW line of Products solely as a Kraft Product and under
                the
                Kraft name with a clear declaration
                that it is produced by Kraft with Kraft’s know how (which name shall be
                changed from Kraft to STF Technologies Ltd., as provided in the Stock
                Exchange Agreement). In the event that the Stock Exchange Agreement
                shall
                terminate and the transactions contemplated thereby shall not be
                completed, BudaSolar may offer and sell the 6MW line of Products
                as a Buda
                Solar Product, under the BudaSolar name and produced with BudaSolar
                knowhow; 

            


    

     

    
      	 	
              (c)

            	
              Kraft
                will offer and sell the 36MW line of Products as a BudaSolar Product
                with
                a clear declaration that it was produced using BudaSolar’s know how. In
                such connection, except for selling agents currently existing on
                the date
                of this Agreement, Kraft will act as exclusive selling agent regarding
                the
                36 MW line of Products of BudaSolar and shall entitled to receive
                a 5%
                agent’s commissions of the gross sales price of each sale 36 MW line of
                Products. Prior to the sale of any 36MW line of Products, Kraft and
                Buda
                Solar shall enter into a sales agency agreement that shall be mutually
                acceptable to the Parties. In the event that the Stock Exchange Agreement
                shall terminate and the transactions contemplated thereby shall not
                be
                completed, such selling agency relationship shall thereafter automatically
                become non-exclusive.

            


    

     

    (3) BudaSolar
      shall be obliged to inform Kraft without delay of the details of any order
      received by it from third parties regarding all Products. Kraft shall promptly
      inform BudaSolar of any order received by it that requires the application
      of
      this Agreement.

     

    (4) BudaSolar
      shall provide technical support during the installation and training and
      start-up function for all Products sold in accordance with the terms of the
      purchase
      agreement with the customer and the agreement of the Parties regarding each
      particular order. If any of the Parties receives an order from a customer,
      both
      Parties will work together in good faith on a deal by deal basis to perform
      such
      orders. The Parties agree to provide each other with their own relevant
      scientific, technical and commercial information, as far as this is necessary
      for the proper fulfilment of the orders. Both Parties will use their best
      efforts and apply their own knowledge and experience in order to achieve the
      best possible result.


    
      
        
        

      

      
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    (5) It
      is
      expressly understood by and between the Parties that a material
      inducement
      for
      Kraft to pay the Royalties contemplated by Section 4(2) of this Agreement is
      that the aggregate of the total Services to be provided by BudaSolar to Kraft
      under this Agreement shall include the transfer to Kraft of all knowledge,
      intellectual property and proprietary or confidential software, data and other
      information as shall be sufficient to enable Kraft to provide Products to its
      customers following the termination of this Agreement without the assistance
      of
      BudaSolar or its personnel.

     

    (6) BudaSolar
      shall be entitled to the unlimited usage right of the know-how handed over
      to it
      by Kraft on the basis of the present agreement (e.g. 2§ (1)(d)). The Parties
      agree and declare that the remuneration payable to BudaSolar as set out in
      the
      present agreement was agreed considering the handing over of the right to use
      such know-how. 

     

    §
      3 Confidentiality

     

    (1) The
      Parties mutually undertake to treat as confidential both the information
      received
      from the other Party and the know-how and other knowledge developed during
      the
      operation of this contract. 

     

    (2) Such
      information shall serve exclusively for the Parties’ own use within this
      Agreement. The Parties shall subject their employees and subcontractors to
      corresponding obligations; the provision of such information shall in each
      case
      require the prior written approval by the other Party. 

     

    §
      4 Remuneration

     

    (1)
       Services
      Fee.  For
      its
      Services under this Agreement, BudaSolar shall be entitled charge Kraft a fee
      for its know-how and the expertise of BudaSolar personnel (the “Service
      Fees”).
      Such
      Service Fee shall be shall equal the sum of (a) the actual costs and expenses
      incurred by BudaSolar (including personnel and materials), plus (b) forty
      percent (40%) of the net earnings and profits before taxes that are derived
      by
      Kraft under (i) the existing contracts as at the date of this Agreement that
      are
      set forth on Attachment
      A
      to this
      Agreement. The amount of the Service Fees payable in connection with any
      additional contracts entered into by Kraft shall be as the Parties hereto may
      mutually agree upon.


    
      
        
        

      

      
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    Under
      the
      terms of the Stock Exchange Agreement and this Agreement, BudaSolar shall
      utilize all or an appropriate portion of the “Deposit”
(as
      that term is defined in the Stock Exchange Agreement) as payment and prepayment
      of such Service Fees. In the event that for any reason, the transactions
      contemplated by the Stock Exchange Agreement shall not be consummated, to the
      extent that the total Deposit paid by Solar Thin Films, Inc. to BudaSolar under
      the Stock Exchange Agreement shall exceed
      the
      aggregate amount of the Services performed prior to the date of such
      termination, based on the Service Fees set forth herein or as the Parties may
      otherwise agree. Following the termination of the Stock Exchange Agreement,
      this
      Agreement shall nonetheless continue and Buda Solar shall continue to perform
      the Services for Kraft until such time as the US dollar value all Services
      performed from the date of this Agreement (based on the Service Fees set forth
      herein or as the Parties may otherwise agree) shall equal the total amount
      of
      the Deposit paid under the Stock Exchange Agreement.

     

    (2) Royalty. Subject
      at all times to BudaSolar having provided all of the Services in compliance
      with
      the provisions of Section 2 of this Agreement, including Section 2(5) above,
      in
      addition to its Service Fees, BudaSolar shall be entitled to receive a royalty
      equal to three percent (3%) of the net sales price received in cash by Kraft,
      as
      and when received by Kraft, as a royalty with respect to each order for the
      6MW
      line of Products sold by Kraft. Such royalties shall be evidenced by copies
      of
      the invoice provided to the customer. Notwithstanding the foregoing, the
      aggregate amount of the royalties payable by Kraft under this Agreement to
      BudaSolar shall not exceed USD $4,000,000.00 (in words USD four million). The
      payment of the royalties is due within 30 days from the receipt by Kraft of
      each
      payment from the customer for the 6MW line of Products, as, when and if received
      by Kraft (ie. 3% of each such payment). BudaSolar shall have the right to an
      annual audit (at the expense of BudaSolar) of Kraft’sales and payment receipts
      for the 6MW line of Products for so long as royalties shall be payable
      hereunder.

     

    (3) No
      Other Payments.
      BudaSolar shall not be entitled to the reimbursement of any further amounts,
      any
      fees of and costs or expenses incurred by BudaSolar, its employees or
      subcontractors in course of performing this Agreement other than the Service
      Fees and the 3% royalty described above.


    
      
        
        

      

      
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    §
      5 Intellectual Property Rights

     

    (1) This
      Agreement leaves unchanged the legal situation with respect to the
      patents,
      patent applications, copyrights, trademarks, drawings, technology, know-how,
      or
      other intellectual property rights (collectively, “Intellectual
      Property”)
      of
      each Party as may exist at the time of signing this Agreement. Any and all
      know-how, design, data, information of the Parties – including the design
      and features of 6 MW/annum standard amorphous silicon (“a-Si”)
      line
      of Product owned by Kraft and the design and features of automated 36 MW/annum
      production line or Product owned by BudaSolar – shall stay in the ownership
      of the relevant Party and shall be deemed confidential and all other Parties
      shall avoid their infringements. Any unauthorized disclosure or usage of
      Intellectual Property owned by the other Party by any Party shall be deemed
      as
      breach of this Agreement unless expressly set forth in the present
      Agreement.

     

    (2) Each
      of
      Kraft and BudaSolar reserve the right of disposal of its Intellectual Property
      provided to the other Party during for the purposes of this Agreement, and
      therefore each of Kraft and BudaSolar shall be entitled to use such Intellectual
      Property only for the performance of the services under this Agreement unless
      otherwise set forth in the present Agreement; and shall not be entitled to
      make
      them public or disclose them to third persons.

     

    (3) The
      Parties shall claim employees’ inventions for themselves in accordance with
      statutory provisions and file patent applications for such inventions within
      a
      reasonable time, as far as they relate to the subject of the Agreement and
      have
      been made during the term of the Agreement. 

     

    (4) The
      invention and the corresponding patent shall belong to that Party whose
      employees – obliged by their employment agreement to work on solutions in
      the area of the invention - are the inventors. If employees of both Parties
      are
      involved in an invention, the invention and the corresponding patent shall
      belong to the Parties jointly, the mutual share being agreed upon by the
      Parties. 

     

    (5) Each
      Party shall bear the costs of the patents filed in its own name. In all other
      cases the costs between the Parties shall be divided in accordance with their
      shares in the respective invention. 

     

    (7) The
      grant
      of a license to third parties shall in any case require the prior written
      approval of the other Party to the extent that patents owned by both Parties
      are
      involved. 

     

    (8) Each
      Party undertakes to defend its Intellectual Property rights at its own costs
      against attacks by third parties. 


    
      
        
        

      

      
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    §
      6 Non-solicitation, non-circumvention

     

    (1) During
      the term of this Agreement the Parties will not either directly or
      indirectly
      

     

    
      	 	
              (a)

            	
              recruit
                or hire or attempt to recruit or hire any employee, consultant, or
                independent contractor of the other Party, or


            


    

     

    
      	 	
              (b)

            	
              solicit
                or endeavor to entice away from the other Party any person or entity
                with
                which the other Party has a business or contractual relationship,
                or
                attempt to reduce or alter any business arrangements between the
                other
                Party and any such person or
                entity.

            


    

     

    (2) The
      Parties will not in any way whatsoever, directly or indirectly, circumvent
      or
      attempt to circumvent each other or any of the parties involved in any of the
      transactions the Parties are desirous of entering into. 

     

    (3) Any
      violation of this Section of the Agreement is enforceable by a penalty of USD
      $50,000.00 per incident. Compensatory damages in excess to such penalty amount
      may be claimed by the non-breaching Party.

     

    §
      7 Duration of the Agreement

     

    (1) This
      Agreement shall enter into force on the date of its execution by the
      Parties.

     

    (2) This
      Agreement shall terminate and expire with Closing as defined in the Stock
      Exchange Agreement. This Agreement shall also terminate and expire upon thirty
      (30) days prior written notice by either Kraft or BudaSolar in case the Closing
      as defined in the Stock Exchange Agreement is not realized by February 15,
      2009.


     

    (3) During
      the duration of this Agreement termination by either Party shall be only
      possible if expressly provided for under the Stock Exchange
      Agreement.

     

    (4) All
      of
      the Parties may mutually agree in writing at any time to terminate this
      Agreement. 

     

    (5) Notwithstanding
      the foregoing provisions of this Section 7, unless otherwise agreed in writing
      by all of the Parties, this Agreement shall automatically be extended for such
      additional period as BudaSolar shall be performing Services as provided in
      Section 4(1) above. In addition, Kraft’s obligation to pay the royalty payments
      contemplated by Section 4(2) above shall survive termination of this
      Agreement.


    
      
        
        

      

      
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    §
      8 Changes of the Agreement

     

    Changes
      of this Agreement shall be made in writing and signed by both Parties to be
      valid. 

     

    §
      9 Severability

     

    If
      any
      provision of this Agreement is or becomes partially or wholly invalid or
      unenforceable,
      the validity of the remaining provisions of this Agreement shall not thereby
      be
      affected. In the place of the invalid or unenforceable provision, such a legally
      admissible provision shall be deemed to have been agreed as corresponds to
      what
      the Parties would have intended or which would have been agreed by the Parties
      according to the meaning and purpose of this Agreement, if they had been aware
      of the invalidity or unenforceability of the relevant provision. 

     

    §
      10 Governing law and jurisdiction

     

    (1) The
      Parties shall make a diligent effort to settle amicably all disagreements in
      conjunction with this Agreement. If an amicable agreement is not reached, all
      disputes
      arising in connection with this Agreement shall be finally settled by the
      Permanent Court of Arbitration in Budapest established next to the Hungarian
      Chamber of Commerce and Industry. The Court of Arbitration may also decide
      with
      binding effect on the validity of this arbitration clause. The Arbitration
      Court
      proceeds according to its own Rules. Three arbitrators shall be appointed.
      The
      language of arbitration shall be English. 

     

    (2) This
      Agreement is subject to Hungarian law. 

     

    The
      balance of this page intentionally left blank - signature page
      follows


    
      
        
        

      

      
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    Radnóczy
      & Mészáros • NÖRR STIEFENHOFER LUTZ

     

    Date:
      September 29, 2008

     

    KRAFT
      ELEKTRONIKAI ZÁRTKÖRŰEN MŰKÖDŐ RÉSZVÉNYTÁRSASÁG

     

    
      	
              By: 

            	
              /s/
                Peter C. Lewis

            
	 	
              Peter
                C. Lewis, President

            


    

    


    
      	
              BUDASOLAR
                TECHNOLÓGIAI
                KORLÁTOLT FELELŐSSÉGŰ
TÁRSASÁG

            


    

     

    
      
        
          	
                  By: 

                	
                  /s/
                    Istvan Krafcsik

                
	 	
                  Istvan
                    Krafcsik, Managing
                    Director

                


        

        


        
          	
                  /s/
                    Istvan Krafcsik

                
	
                  Istvan
                    Krafcsik

                
	 
	
                  /s/
                    Attila Horvath

                
	
                  Attila
                    Horvath

                
	 
	
                  SOLAR
                    THIN FILMS, INC.

                


        

        


        
          	
                  By: 

                	
                  /s/
                    Peter C. Lewis

                
	
                  
                     

                  

                	
                  Peter
                    Lewis, Chief Executive
                    Officer

                


        

      

    

     

    
      
        
        

      

      
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