Document:

Exhibit 10.1

 

POWER-ONE, INC.

2004 STOCK INCENTIVE PLAN

 

1.     PURPOSE OF PLAN

 

The purpose of the Power-One, Inc. 2004 Stock
Incentive Plan (this “Plan”) of
Power-One, Inc., a Delaware corporation (the “Corporation”),
is to promote the success of the Corporation and to increase stockholder value
by providing an additional means through the grant of awards to attract,
motivate, retain and reward selected employees and other eligible persons.

 

2.     ELIGIBILITY

 

The
Administrator (as such term is defined in Section 3.1) may grant awards
under this Plan only to those persons that the Administrator determines to be
Eligible Persons.  An “Eligible Person” is any person who is
either: (a) an officer (whether or not a director) or employee of the
Corporation or one of its Subsidiaries; (b) a director of the Corporation
or one of its Subsidiaries; or (c) an individual consultant or advisor who
renders or has rendered bona fide services (other than services in connection
with the offering or sale of securities of the Corporation or one of its
Subsidiaries in a capital-raising transaction or as a market maker or promoter
of the Corporation’s or one of its Subsidiary’s securities) to the Corporation
or one of its Subsidiaries and who is selected to participate in this Plan by
the Administrator; provided, however, that a person who is otherwise an
Eligible Person under clause (c) above may participate in this Plan only
if such participation would not adversely affect either the Corporation’s
eligibility to use Form S-8 to register under the Securities Act of 1933,
as amended (the “Securities Act”),
the offering and sale of shares issuable under this Plan by the Corporation or
the Corporation’s compliance with any other applicable laws.  An Eligible Person who has been granted an
award (a “participant”) may, if otherwise eligible, be granted additional
awards if the Administrator shall so determine. 
As used herein, “Subsidiary”
means any corporation or other entity a majority of whose outstanding voting
stock or voting power is beneficially owned directly or indirectly by the
Corporation; and “Board” means
the Board of Directors of the Corporation.

 

3.     PLAN ADMINISTRATION

 

3.1                               The Administrator.  This Plan shall be administered by and all
awards under this Plan shall be authorized by the Administrator.  The “Administrator”
means the Board or one or more committees appointed by the Board or another
committee (within its delegated authority) to administer all or certain aspects
of this Plan.  Any such committee shall
be comprised solely of one or more directors or such number of directors as may
be required under applicable law.  A
committee may delegate some or all of its authority to another committee so
constituted.  The Board or a committee
comprised solely of directors may also delegate, to the extent permitted by Section 157(c) of
the Delaware General Corporation Law and any other applicable law, to one or
more officers of the Corporation, its powers under this Plan (a) to
designate the officers and employees of the Corporation and its Subsidiaries
who will receive grants of awards under this Plan, and (b) to determine
the number of shares subject to, and the other terms and conditions of, 

 

 

such awards. 
The Board may delegate different levels of authority to different
committees with administrative and grant authority under this Plan.  Unless otherwise provided in the Bylaws of
the Corporation or the applicable charter of any Administrator: (a) a
majority of the members of the acting Administrator shall constitute a quorum,
and (b) the vote of a majority of the members present assuming the
presence of a quorum or the unanimous written consent of the members of the
Administrator shall constitute action by the acting Administrator.

 

With respect to
awards intended to satisfy the requirements for performance-based compensation
under Section 162(m) of the Internal Revenue Code of 1986, as amended
(the “Code”), this Plan shall be
administered by a committee consisting solely of two or more outside directors
(as this requirement is applied under Section 162(m) of the Code);
provided, however, that the failure to satisfy such requirement shall not
affect the validity of the action of any committee otherwise duly authorized
and acting in the matter.  Award grants,
and transactions in or involving awards, intended to be exempt under Rule 16b-3
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), must be duly and timely
authorized by the Board or a committee consisting solely of two or more
non-employee directors (as this requirement is applied under Rule 16b-3
promulgated under the Exchange Act).  To
the extent required by any applicable listing agency, this Plan shall be
administered by a committee composed entirely of independent directors (within
the meaning of the applicable listing agency).

 

3.2                               Powers of the Administrator.  Subject to the express provisions of this
Plan, the Administrator is authorized and empowered to do all things necessary
or desirable in connection with the authorization of awards and the administration
of this Plan (in the case of a committee or delegation to one or more officers,
within the authority delegated to that committee or person(s)), including,
without limitation, the authority to:

 

(a)                                  determine
eligibility and, from among those persons determined to be eligible, the
particular Eligible Persons who will receive an award under this Plan;

 

(b)                                 grant
awards to Eligible Persons, determine the price at which securities will be
offered or awarded and the number of securities to be offered or awarded to any
of such persons, determine the other specific terms and conditions of such
awards consistent with the express limits of this Plan, establish the
installments (if any) in which such awards shall become exercisable or shall
vest (which may include, without limitation, performance and/or time-based
schedules), or determine that no delayed exercisability or vesting is required,
establish any applicable performance targets, and establish the events of
termination or reversion of such awards;

 

(c)                                  approve
the forms of award agreements (which need not be identical either as to type of
award or among participants);

 

 

(d)                                 construe
and interpret this Plan and any agreements defining the rights and obligations
of the Corporation, it Subsidiaries, and participants under this Plan, further
define the terms used in this Plan, and prescribe, amend and rescind rules and
regulations relating to the administration of this Plan or the awards granted
under this Plan;

 

(e)                                  cancel,
modify, or waive the Corporation’s rights with respect to, or modify,
discontinue, suspend, or terminate any or all outstanding awards, subject to
any required consent under Section 8.6.5;

 

(f)                                    accelerate
or extend the vesting or exercisability or extend the term of any or all such outstanding
awards (in the case of options or stock appreciation rights, within the maximum
ten-year term of such awards) in such circumstances as the Administrator may
deem appropriate (including, without limitation, in connection with a
termination of employment or services or other events of a personal nature)
subject to any required consent under Section 8.6.5;

 

(g)                                 adjust
the number of shares of Common Stock subject to any award, adjust the price of
any or all outstanding awards or otherwise change previously imposed terms and
conditions, in such circumstances as the Administrator may deem appropriate, in
each case subject to Sections 4 and 8.6, and provided that in no case (except
due to an adjustment contemplated by Section 7 or any repricing that may be
approved by stockholders) shall such an adjustment constitute a repricing (by
amendment, cancellation and regrant, exchange or other means) of the per share
exercise or base price of any option or stock appreciation right;

 

(h)                                 determine
the date of grant of an award, which may be a designated date after but not
before the date of the Administrator’s action (unless otherwise designated by
the Administrator, the date of grant of an award shall be the date upon which
the Administrator took the action granting an award;

 

(i)                                     determine
whether, and the extent to which, adjustments are required pursuant to Section 7
hereof and authorize the termination, conversion, substitution or succession of
awards upon the occurrence of an event of the type described in Section 7;

 

(j)                                     acquire
or settle (subject to Sections 7 and 8.6) rights under awards in cash, stock of
equivalent value, or other consideration; and

 

(k)                                  determine
the fair market value of the Common Stock or awards under this Plan from time
to time and/or the manner in which such value will be determined.

 

3.3                               Binding Determinations.  Any action taken by, or inaction of, the
Corporation, any Subsidiary, or the Administrator relating or pursuant to this
Plan and within its authority hereunder or under applicable law shall be within
the absolute discretion of that entity or body and shall be conclusive and
binding upon all 

 

 

persons. 
Neither the Board nor any Board committee, nor any member thereof or
person acting at the direction thereof, shall be liable for any act, omission,
interpretation, construction or determination made in good faith in connection
with this Plan (or any award made under this Plan), and all such persons shall
be entitled to indemnification and reimbursement by the Corporation in respect
of any claim, loss, damage or expense (including, without limitation, attorneys’
fees) arising or resulting therefrom to the fullest extent permitted by law
and/or under any directors and officers liability insurance coverage that may
be in effect from time to time.

 

3.4                               Reliance on Experts.  In making any determination or in taking or
not taking any action under this Plan, the Board or a committee, as the case
may be, may obtain and may rely upon the advice of experts, including employees
and professional advisors to the Corporation. 
No director, officer or agent of the Corporation or any of its
Subsidiaries shall be liable for any such action or determination taken or made
or omitted in good faith.

 

3.5                               Delegation.  The Administrator may delegate ministerial,
non-discretionary functions to individuals who are officers or employees of the
Corporation or any of its Subsidiaries or to third parties.

 

4.     SHARES OF COMMON
STOCK SUBJECT TO THE PLAN; SHARE LIMITS

 

4.1                               Shares Available.  Subject to the provisions of Section 7.1,
the capital stock that may be delivered under this Plan shall be shares of the
Corporation’s authorized but unissued Common Stock and any shares of its Common
Stock held as treasury shares.  For
purposes of this Plan, “Common Stock”
shall mean the common stock of the Corporation and such other securities or
property as may become the subject of awards under this Plan, or may become
subject to such awards, pursuant to an adjustment made under Section 7.1.

 

4.2                               Share Limits.  The maximum number of shares of Common Stock
that may be delivered pursuant to awards granted to Eligible Persons under this
Plan (the “Share Limit”) is
4,750,000 shares.  The following limits
also apply with respect to awards granted under this Plan:

 

(a)                                  The
maximum number of shares of Common Stock that may be delivered pursuant to
options qualified as incentive stock options granted under this Plan is
1,000,000  shares.

 

(b)                                 The
maximum number of shares of Common Stock subject to those options and stock
appreciation rights that are granted during any calendar year to any individual
under this Plan is 1,500,000 shares.

 

(c)                                  The
maximum number of shares of Common Stock subject to all awards that are granted
during any calendar year to any individual under this Plan is 1,500,000  shares. 
This limit does not apply, however, to shares delivered in respect of
compensation earned but deferred.

 

 

(d)                                 The
maximum number of shares of Common Stock that may be delivered pursuant to
awards granted under this Plan, other than those described in the next
sentence, is 2,500,000 shares.  This
limit does not apply, however, to (1) shares delivered in respect of
compensation earned but deferred, (2) except as expressly provided in Section 5.1.1
(which generally requires that shares delivered in respect of “discounted”
stock options be charged against this limit), shares delivered in respect of
stock option grants, and (3) except as expressly provided in Section 5.1.2
(which generally requires that shares delivered in respect of “discounted”
stock appreciation right grants be charged against this limit), shares
delivered in respect of stock appreciation right grants.

 

(e)                                  The
maximum number of shares of Common Stock that may be delivered pursuant to
awards granted to non-employee directors under this Plan is 500,000
shares.  This limit does not apply,
however, to shares delivered in respect of compensation earned but
deferred.  For this purpose, a “non-employee
director” is a member of the Board who is not an officer or employee of the
Corporation or one of its Subsidiaries.

 

(f)                                    Additional
limits with respect to Performance-Based Awards are set forth in Section 5.2.3.

 

Each of the foregoing numerical limits is subject to
adjustment as contemplated by Section 4.3, Section 7.1, and Section 8.10.

 

4.3                               Awards Settled in Cash, Reissue of Awards and Shares.  To the extent that an award granted under
this Plan is settled in cash or a form other than shares of Common Stock, the
shares that would have been delivered had there been no such cash or other
settlement shall not be counted against the shares available for issuance under
this Plan.  In the event that shares of
Common Stock are delivered in respect of a dividend equivalent right granted
under this Plan, only the actual number of shares delivered with respect to the
award shall be counted against the share limits of this Plan.  To the extent that shares of Common Stock are
delivered pursuant to the exercise of a stock appreciation right or stock
option granted under this Plan, the number of underlying shares as to which the
exercise related shall be counted against the applicable share limits under Section 4.2,
as opposed to only counting the shares actually issued.  (For purposes of clarity, if a stock
appreciation right relates to 100,000 shares and is exercised at a time when
the payment due to the participant is 15,000 shares, 100,000 shares shall be
charged against the applicable share limits under Section 4.2 with respect
to such exercise.)  Shares that are
subject to or underlie awards granted under this Plan which expire or for any
reason are cancelled or terminated, are forfeited, fail to vest, or for any
other reason are not paid or delivered under this Plan shall again be available
for subsequent awards under this Plan. 
Shares that are exchanged by a participant or withheld by the
Corporation as full or partial payment in connection with any award under this
Plan, as well as any shares exchanged by a participant or withheld by the
Corporation or one of its Subsidiaries to satisfy the tax withholding
obligations related to any award, shall not be available for subsequent awards
under this Plan.  Refer to Section 8.10
for application of the 

 

 

foregoing share limits with respect to assumed
awards.  The foregoing adjustments to the
share limits of this Plan are subject to any applicable limitations under Section 162(m) of
the Code with respect to awards intended as performance-based compensation
thereunder.

 

4.4                               Reservation of Shares; No
Fractional Shares; Minimum Issue.  The
Corporation shall at all times reserve a number of shares of Common Stock
sufficient to cover the Corporation’s obligations and contingent obligations to
deliver shares with respect to awards then outstanding under this Plan
(exclusive of any dividend equivalent obligations to the extent the Corporation
has the right to settle such rights in cash). 
No fractional shares shall be delivered under this Plan.  The Administrator may pay cash in lieu of any
fractional shares in settlements of awards under this Plan.  No fewer than 100 shares may be purchased on
exercise of any award (or, in the case of stock appreciation or purchase
rights, no fewer than 100 rights may be exercised at any one time) unless the
total number purchased or exercised is the total number at the time available
for purchase or exercise under the award.

 

5.     AWARDS

 

5.1                               Type and Form of
Awards.  The Administrator
shall determine the type or types of award(s) to be made to each selected
Eligible Person.  Awards may be granted
singly, in combination or in tandem. 
Awards also may be made in combination or in tandem with, in replacement
of, as alternatives to, or as the payment form for grants or rights under any
other employee or compensation plan of the Corporation or one of its
Subsidiaries.  The types of awards that
may be granted under this Plan are:

 

5.1.1       Stock Options.  A stock option is the grant of a right to
purchase a specified number of shares of Common Stock during a specified period
as determined by the Administrator.  An
option may be intended as an incentive stock option within the meaning of Section 422
of the Code (an “ISO”) or a
nonqualified stock option (an option not intended to be an ISO).  The award agreement for an option will
indicate if the option is intended as an ISO, otherwise it will be deemed to be
a nonqualified stock option.  The maximum
term of each option (ISO or nonqualified) shall be ten (10) years.  The per share exercise price for each option
shall be not less than 100% of the fair market value of a share of Common Stock
on the date of grant of the option, except as follows: (a) in the case of
a stock option granted retroactively in tandem with or as a substitution for
another award, the per share exercise price may be no lower than the fair
market value of a share of Common Stock on the date such other award was
granted (to the extent consistent with Sections 422 and 424 of the Code in the
case of options intended as incentive stock options); and (b) in any other
circumstances, a nonqualified stock option may be granted with a per share
exercise price that is less than the fair market value of a share of Common
Stock on the date of grant, provided that any shares delivered in respect of
such option shall be charged against the limit of Section 4.2(d) (the
limit on full-value awards) as well as any other applicable limit under Section 4.2.  When an option is exercised, the exercise
price for the shares to be purchased shall be paid in full in 

 

 

cash or such other method permitted by the
Administrator consistent with Section 5.5.

 

5.1.2       Additional Rules Applicable
to ISOs.  To the
extent that the aggregate fair market value (determined at the time of grant of
the applicable option) of stock with respect to which ISOs first become
exercisable by a participant in any calendar year exceeds $100,000, taking into
account both Common Stock subject to ISOs under this Plan and stock subject to
ISOs under all other plans of the Corporation or one of its Subsidiaries (or
any parent or predecessor corporation to the extent required by and within the
meaning of Section 422 of the Code and the regulations promulgated
thereunder), such options shall be treated as nonqualified stock options.  In reducing the number of options treated as
ISOs to meet the $100,000 limit, the most recently granted options shall be
reduced first.  To the extent a reduction
of simultaneously granted options is necessary to meet the $100,000 limit, the
Administrator may, in the manner and to the extent permitted by law, designate
which shares of Common Stock are to be treated as shares acquired pursuant to
the exercise of an ISO.  ISOs may only be
granted to employees of the Corporation or one of its subsidiaries (for this
purpose, the term “subsidiary” is used as defined in Section 424(f) of
the Code, which generally requires an unbroken chain of ownership of at least
50% of the total combined voting power of all classes of stock of each
subsidiary in the chain beginning with the Corporation and ending with the
subsidiary in question).  There shall be
imposed in any award agreement relating to ISOs such other terms and conditions
as from time to time are required in order that the option be an “incentive
stock option” as that term is defined in Section 422 of the Code.  No ISO may be granted to any person who, at
the time the option is granted, owns (or is deemed to own under Section 424(d) of
the Code) shares of outstanding Common Stock possessing more than 10% of the
total combined voting power of all classes of stock of the Corporation, unless
the exercise price of such option is at least 110% of the fair market value of
the stock subject to the option and such option by its terms is not exercisable
after the expiration of five years from the date such option is granted.

 

5.1.3       Stock Appreciation Rights.  A stock appreciation right or “SAR” is a right to receive a payment, in
cash and/or Common Stock, equal to the excess of the fair market value of a
specified number of shares of Common Stock on the date the SAR is exercised
over the fair market value of a share of Common Stock on the date the SAR was
granted (the “base price”) as set forth in the applicable award agreement,
except as follows: (a) in the case of a SAR granted retroactively in
tandem with or as a substitution for another award, the base price may be no lower
than the fair market value of a share of Common Stock on the date such other
award was granted; and (b) in any other circumstances, a SAR may be
granted with a base price that is less than the fair market value of a share of
Common Stock on the date of grant, provided that any shares actually delivered
in respect of such award shall be charged against the limit of Section 4.2(d) (the
limit on full-value awards) as well as any other applicable limit under Section 4.2.  The maximum term of an SAR shall be ten (10) years.  The Administrator may grant limited SARs
which are exercisable only upon a change in control or other specified event
and may be payable based on the spread between the base price of 

 

 

the SAR and the fair market value of a share of Common
Stock during a specified period or at a specified time within a specified
period before, after or including the date of such event.

 

5.1.4       Other Awards.  The other types of awards that may be granted
under this Plan include: (a) stock bonuses, restricted stock, performance
stock, stock units, phantom stock, dividend equivalents, or similar rights to
purchase or acquire shares, whether at a fixed or variable price or ratio
related to the Common Stock, upon the passage of time, the occurrence of one or
more events, or the satisfaction of performance criteria or other conditions,
or any combination thereof; (b) any similar securities with a value
derived from the value of or related to the Common Stock and/or returns
thereon; or (c) cash awards granted consistent with Section 5.2
below.

 

5.2                               Section 162(m) Performance-Based Awards.  Without limiting the generality of the
foregoing, any of the types of awards listed in Section 5.1.4 above may
be, and options and SARs granted with an exercise or base price not less than
the fair market value of a share of Common Stock at the date of grant (“Qualifying Options” and “Qualifying SARS,” respectively)
typically will be, granted as awards intended to satisfy the requirements for “performance-based
compensation” within the meaning of Section 162(m) of the Code (“Performance-Based Awards”).  The grant, vesting, exercisability or payment
of Performance-Based Awards may depend (or, in the case of Qualifying Options
or Qualifying SARs, may also depend) on the degree of achievement of one or
more performance goals relative to a pre-established targeted level or level
using one or more of the Business Criteria set forth below (on an absolute or
relative basis) for the Corporation on a consolidated basis or for one or more of
the Corporation’s subsidiaries, segments, divisions or business units, or any
combination of the foregoing.  Any
Qualifying Option or Qualifying SAR shall be subject only to the requirements
of Section 5.2.1 and 5.2.3 in order for such award to satisfy the
requirements for “performance-based compensation” under Section 162(m) of
the Award.  Any other Performance-Based
Award shall be subject to all of the following provisions of this Section 5.2.

 

5.2.1       Class; Administrator. 
The eligible class of persons for Performance-Based
Awards under this Section 5.2 shall be officers and employees of the
Corporation or one of its Subsidiaries.  The Administrator approving Performance-Based
Awards or making any certification required pursuant to Section 5.2.4 must
be constituted as provided in Section 3.1 for awards that are intended as
performance-based compensation under Section 162(m) of the Code.

 

5.2.2       Performance Goals.  The
specific performance goals for Performance-Based Awards (other than Qualifying
Options and Qualifying SARs) shall be, on an absolute or relative basis,
established based on one or more of the following business criteria (“Business Criteria”)
as selected by the Administrator in its sole discretion:  earnings per share, cash flow (which means cash
and cash equivalents derived from either net cash flow from operations or net
cash flow from operations, financing and investing activities), total
stockholder return, gross revenue, revenue growth, operating income (before or
after taxes), net earnings 

 

 

(before or after interest,
taxes, depreciation and/or amortization), return on equity or on assets or on
net investment, cost containment or reduction, or any combination thereof.  These terms are used as applied under
generally accepted accounting principles or in the Corporation or one of its
Subsidiaries’s financial reporting.  To
qualify awards as performance-based under Section 162(m), the applicable
Business Criterion (or Business Criteria, as the case may be) and specific
performance goal or goals (“targets”) must be established and approved by the
Administrator during the first 90 days of the performance period (and, in the
case of performance periods of less than one year, in no event more than 25% of
the performance period has elapsed) and while performance relating to such
target(s) remains substantially uncertain within the meaning of Section 162(m) of
the Code.  Performance targets
shall be adjusted to mitigate the unbudgeted impact of material, unusual or
nonrecurring gains and losses, accounting changes or other extraordinary events
not foreseen at the time the targets were set unless the Administrator provides
otherwise at the time of establishing the targets.  The
applicable performance measurement period may not be less than three months nor
more than 10 years.

 

5.2.3       Form of Payment; Maximum Performance-Based Award.  Grants or awards under this Section 5.2
may be paid in cash or shares of Common Stock or any combination thereof.  Grants of Qualifying Options and Qualifying
SARs to any one participant in any one calendar year shall be subject to the
limit set forth in Section 4.2(b). 
The maximum number of shares of Common Stock which may be delivered
pursuant to Performance-Based Awards (other than Qualifying Options and
Qualifying SARs, and other than cash awards covered by the following sentence)
that are granted to any one participant in any one calendar year shall not
exceed 1,500,000  shares, either
individually or in the aggregate, subject to adjustment as provided in Section 7.1.  In addition, the aggregate amount of
compensation to be paid to any one participant in respect of all
Performance-Based Awards payable only in cash and not related to shares of
Common Stock and granted to that participant in any one calendar year shall not
exceed $1,000,000.00.  Awards that are
cancelled during the year shall be counted against these limits to the extent
permitted by Section 162(m) of the Code.

 

5.2.4       Certification of Payment. 
Before any
Performance-Based Award under this Section 5.2 (other than Qualifying
Options and Qualifying SARs) is paid and to the extent required to qualify the
award as performance-based compensation within the meaning of Section 162(m) of
the Code, the Administrator must certify in writing that the performance target(s) and
any other material terms of the Performance-Based Award were in fact timely
satisfied.

 

5.2.5       Reservation of Discretion.  The
Administrator will have the discretion to determine the restrictions or other
limitations of the individual awards granted under this Section 5.2
including the authority to reduce awards, payouts or vesting or to pay no
awards, in its sole discretion, if the Administrator preserves such authority
at the time of grant by language to this effect in its authorizing resolutions
or otherwise.

 

 

5.2.6       Expiration of Grant Authority.  As required pursuant to Section 162(m) of the Code and the
regulations promulgated thereunder, the Administrator’s authority to grant new
awards that are intended to qualify as performance-based compensation within
the meaning of Section 162(m) of the Code (other than Qualifying
Options and Qualifying SARs) shall terminate upon the first meeting of the
Corporation’s stockholders that occurs in the fifth year following the year in
which the Corporation’s stockholders first approve this Plan (subject to any
extension that may be subsequently approved by the Corporation’s stockholders).

 

5.3                               Award Agreements.  Each award shall be evidenced by a written
award agreement in the form approved by the Administrator and executed on
behalf of the Corporation and, if required by the Administrator, executed by
the recipient of the award.  The
Administrator may authorize any officer of the Corporation (other than the
particular award recipient) to execute any or all award agreements on behalf of
the Corporation.  The award agreement
shall set forth the material terms and conditions of the award as established
by the Administrator consistent with the express limitations of this Plan.

 

5.4                               Deferrals and Settlements.  Payment of awards may be in the form of cash,
Common Stock, other awards or combinations thereof as the Administrator shall
determine, and with such restrictions as it may impose.  The Administrator may also require or permit
participants to elect to defer the issuance of shares or the settlement of
awards in cash under such rules and procedures as it may establish under
this Plan.  The Administrator may also
provide that deferred settlements include the payment or crediting of interest
or other earnings on the deferral amounts, or the payment or crediting of
dividend equivalents where the deferred amounts are denominated in shares.

 

5.5                               Consideration for Common
Stock or Awards.  The
purchase price for any award granted under this Plan or the Common Stock to be delivered
pursuant to an award, as applicable, may be paid by means of any lawful
consideration as determined by the Administrator, including, without
limitation, one or a combination of the following methods:

 

·                  services
rendered by the recipient of such award;

 

·                  cash, check
payable to the order of the Corporation, or electronic funds transfer;

 

·                  notice and third
party payment in such manner as may be authorized by the Administrator;

 

·                  the delivery of
previously owned shares of Common Stock;

 

·                  by a reduction
in the number of shares otherwise deliverable pursuant to the award; or

 

 

·                  subject to such
procedures as the Administrator may adopt, pursuant to a “cashless exercise”
with a third party who provides financing for the purposes of (or who otherwise
facilitates) the purchase or exercise of awards.

 

In no event shall any shares newly-issued by the
Corporation be issued for less than the minimum lawful consideration for such
shares or for consideration other than consideration permitted by applicable
state law.  In the event that the
Administrator allows a participant to exercise an award by delivering shares of
Common Stock previously owned by such participant and unless otherwise
expressly provided by the Administrator, any shares delivered which were
initially acquired by the participant from the Corporation (upon exercise of a
stock option or otherwise) must have been owned by the participant at least six
months as of the date of delivery. 
Shares of Common Stock used to satisfy the exercise price of an option
shall be valued at their fair market value on the date of exercise.  The Corporation will not be obligated to
deliver any shares unless and until it receives full payment of the exercise or
purchase price therefor and any related withholding obligations under Section 8.5
and any other conditions to exercise or purchase have been satisfied.  Unless otherwise expressly provided in the
applicable award agreement, the Administrator may at any time eliminate or
limit a participant’s ability to pay the purchase or exercise price of any
award or shares by any method other than cash payment to the Corporation.

 

5.6                               Definition of Fair Market
Value.  For purposes of
this Plan, “fair market value” shall mean, unless otherwise determined or
provided by the Administrator in the circumstances, the last price (in regular
trading) for a share of Common Stock as furnished by the National Association
of Securities Dealers, Inc. (the “NASD”) through
the NASDAQ Global Market Reporting System (the “Global
Market”) for the date in question or, if no sales of Common Stock
were reported by the NASD on the Global Market on that date, the last price (in
regular trading) for a share of Common Stock as furnished by the NASD through
the Global Market for the next preceding day on which sales of Common Stock
were reported by the NASD.  The
Administrator may, however, provide with respect to one or more awards that the
fair market value shall equal the last price (in regular trading) for a share
of Common Stock as furnished by the NASD through the Global Market on the last
trading day preceding the date in question or the average of the high and low
trading prices of a share of Common Stock as furnished by the NASD through the
Global Market for the date in question or the most recent trading day.  If the Common Stock is no longer listed or is
no longer actively traded on the Global Market as of the applicable date, the
fair market value of the Common Stock shall be the value as reasonably
determined by the Administrator for purposes of the award in the
circumstances.  The Administrator also
may adopt a different methodology for determining fair market value with
respect to one or more awards if a different methodology is necessary or advisable
to secure any intended favorable tax, legal or other treatment for the
particular award(s) (for example, and without limitation, the
Administrator may provide that fair market value for purposes of one or more
awards will be based on an average of closing prices (or the average of high
and low daily trading prices) for a specified period preceding the relevant
date).

 

 

5.7          Transfer Restrictions.

 

5.7.1       Limitations on Exercise and
Transfer.  Unless
otherwise expressly provided in (or pursuant to) this Section 5.7, by
applicable law and by the award agreement, as the same may be amended, (a) all
awards are non-transferable and shall not be subject in any manner to sale,
transfer, anticipation, alienation, assignment, pledge, encumbrance or charge; (b) awards
shall be exercised only by the participant; and (c) amounts payable or
shares issuable pursuant to any award shall be delivered only to (or for the
account of) the participant.

 

5.7.2       Exceptions. 
The Administrator may permit awards to be exercised by and paid to
certain persons or entities related to the participant, including but not
limited to members of the participant’s immediate family, trusts or other
entities controlled by or whose beneficiaries or beneficial owners are the
participant and/or members of the participant’s immediate family, pursuant to such conditions and
procedures, including limitations on subsequent transfers, as the Administrator
may establish.  Consistent with Section 8.1,
any permitted transfer shall be subject to the condition that the Administrator
receive evidence satisfactory to it that the transfer (a) is being made
for essentially donative, estate and/or tax planning purposes on a gratuitous
or donative basis and without consideration (other than nominal consideration
or in exchange for an interest in a qualified transferee), and (b) will
not compromise the Corporation’s ability to register shares issuable under this
Plan on Form S-8 under the Securities Act. 
Notwithstanding the foregoing or anything in Section 5.7.3, ISOs
and restricted stock awards  shall be
subject to any and all additional transfer restrictions under the Code to the
extent necessary to maintain the intended tax consequences of such awards.

 

5.7.3       Further Exceptions to Limits on Transfer.  The exercise and transfer restrictions in Section 5.7.1
shall not apply to:

 

(a)           transfers to the Corporation,

 

(b)                                 the
designation of a beneficiary to receive benefits in the event of the
participant’s death or, if the participant has died, transfers to or exercise
by the participant’s beneficiary, or, in the absence of a validly designated
beneficiary, transfers by will or the laws of descent and distribution,

 

(c)                                  subject
to any applicable limitations on ISOs, transfers to a family member (or former
family member) pursuant to a domestic relations order if approved or ratified
by the Administrator,

 

(d)                                 if
the participant has suffered a disability, permitted transfers or exercises on
behalf of the participant by his or her legal representative, or

 

(e)                                  the
authorization by the Administrator of “cashless exercise” procedures with third
parties who provide financing for the purpose of (or who otherwise facilitate)
the exercise of awards consistent with applicable laws and the express
authorization of the Administrator.

 

 

5.8                               International Awards.
One or more awards may be granted to Eligible Persons who provide services to
the Corporation or one of its Subsidiaries outside of the United States. Any
awards granted to such persons may be granted pursuant to the terms and conditions
of any applicable sub-plans, if any, appended to this Plan and approved by the
Administrator.

 

6.              EFFECT
OF TERMINATION OF SERVICE ON AWARDS

 

6.1                               General. The
Administrator shall establish the effect of a termination of employment or
service on the rights and benefits under each award under this Plan and in so
doing may make distinctions based upon, inter alia, the cause of termination
and type of award. If the participant is not an employee of the Corporation or
one of its Subsidiaries and provides other services to the Corporation or one
of its Subsidiaries, the Administrator shall be the sole judge for purposes of
this Plan (unless a contract or the award otherwise provides) of whether the
participant continues to render services to the Corporation or one of its
Subsidiaries and the date, if any, upon which such services shall be deemed to
have terminated.

 

6.2                               Events Not Deemed
Terminations of Service. Unless the express policy of the
Corporation or one of its Subsidiaries, or the Administrator, otherwise
provides, the employment relationship shall not be considered terminated in the
case of (a) sick leave, (b) military leave, or (c) any other
leave of absence authorized by the Corporation or one of its Subsidiaries, or
the Administrator; provided that unless reemployment upon the expiration of
such leave is guaranteed by contract or law, such leave is for a period of not
more than 90 days. In the case of any employee of the Corporation or one of its
Subsidiaries on an approved leave of absence, continued vesting of the award
while on leave from the employ of the Corporation or one of its Subsidiaries
may be suspended until the employee returns to service, unless the
Administrator otherwise provides or applicable law otherwise requires. In no
event shall an award be exercised after the expiration of the term set forth in
the award agreement.

 

6.3                               Effect of Change of
Subsidiary Status. For purposes of this Plan and any award, if
an entity ceases to be a Subsidiary of the Corporation a termination of employment
or service shall be deemed to have occurred with respect to each Eligible
Person in respect of such Subsidiary who does not continue as an Eligible
Person in respect of another entity within the Corporation or another
Subsidiary that continues as such after giving effect to the transaction or
other event giving rise to the change in status.

 

7.              ADJUSTMENTS;
ACCELERATION

 

7.1                                 Adjustments.
Subject to Section 7.2, upon (or, as may be necessary to effect the
adjustment, immediately prior to): any reclassification, recapitalization,
stock split (including a stock split in the form of a stock dividend) or
reverse stock split; any merger, combination, consolidation, or other
reorganization; any spin-off, split-up, or similar extraordinary dividend distribution
in respect of the Common Stock; or any exchange of Common Stock or other
securities of the Corporation, 

 

 

or any similar, unusual or extraordinary corporate
transaction in respect of the Common Stock; then the Administrator shall
equitably and proportionately adjust (1) the number and type of shares of
Common Stock (or other securities) that thereafter may be made the subject of
awards (including the specific share limits, maximums and numbers of shares set
forth elsewhere in this Plan), (2) the number, amount and type of shares
of Common Stock (or other securities or property) subject to any outstanding
awards, (3) the grant, purchase, or exercise price (which term includes
the base price of any SAR or similar right) of any outstanding awards, and/or (4) the
securities, cash or other property deliverable upon exercise or payment of any
outstanding awards, in each case to the extent necessary to preserve (but not
increase) the level of incentives intended by this Plan and the
then-outstanding awards.

 

Unless otherwise expressly provided in the applicable
award agreement, upon (or, as may be necessary to effect the adjustment,
immediately prior to) any event or transaction described in the preceding
paragraph or a sale of all or substantially all of the business or assets of
the Corporation as an entirety, the Administrator shall equitably and
proportionately adjust the performance standards applicable to any
then-outstanding performance-based awards to the extent necessary to preserve
(but not increase) the level of incentives intended by this Plan and the
then-outstanding performance-based awards.

 

It is intended that, if possible, any adjustments
contemplated by the preceding two paragraphs be made in a manner that satisfies
applicable U.S. legal, tax (including, without limitation and as applicable in
the circumstances, Section 424 of the Code, Section 409A of the Code
and Section 162(m) of the Code) and accounting (so as to not trigger
any charge to earnings with respect to such adjustment) requirements.

 

Without limiting the generality of Section 3.3,
any good faith determination by the Administrator as to whether an adjustment
is required in the circumstances pursuant to this Section 7.1, and the
extent and nature of any such adjustment, shall be conclusive and binding on
all persons.

 

7.2                               Corporate Transactions -
Assumption and Termination of Awards. Upon the occurrence of any
of the following: any merger, combination, consolidation, or other
reorganization; any exchange of Common Stock or other securities of the
Corporation; a sale of all or substantially all the business, stock or assets
of the Corporation; a dissolution of the Corporation; or any other event in
which the Corporation does not survive (or does not survive as a public company
in respect of its Common Stock); then the Administrator may make provision for
a cash payment in settlement of, or for the assumption, substitution or
exchange of any or all outstanding share-based awards or the cash, securities
or property deliverable to the holder of any or all outstanding share-based
awards, based upon, to the extent relevant under the circumstances, the
distribution or consideration payable to holders of the Common Stock upon or in
respect of such event. Upon the occurrence of any event described in the
preceding sentence, then, unless the Administrator has made a provision for the
substitution, assumption, exchange or other continuation or settlement of the
award or the 

 

 

award would otherwise continue in accordance with its
terms in the circumstances: (1) subject to Section 7.4 and unless
otherwise provided in the applicable award agreement, each then-outstanding
option and SAR shall become fully vested,  all shares of restricted stock then outstanding shall
fully vest free of restrictions, and each other award granted under this Plan
that is then outstanding shall become payable to the holder of such award; and (2) each
award shall terminate upon the related event; provided that the holder of an
option or SAR shall be given reasonable advance notice of the impending
termination and a reasonable opportunity to exercise his or her outstanding
vested options and SARs (after giving effect to any accelerated vesting
required in the circumstances) in accordance with their terms before the termination
of such awards (except that in no case shall more than ten days’ notice of the
impending termination be required and any acceleration of vesting and any
exercise of any portion of an award that is so accelerated may be made
contingent upon the actual occurrence of the event).

 

Without limiting the preceding paragraph, in
connection with any event referred to in the preceding paragraph or any change
in control event defined in any applicable award agreement, the Administrator
may, in its discretion, provide for the accelerated vesting of any award or
awards as and to the extent determined by the Administrator in the
circumstances.

 

The Administrator may adopt such valuation
methodologies for outstanding awards as it deems reasonable in the event of a
cash or property settlement and, in the case of options, SARs or similar
rights, but without limitation on other methodologies, may base such settlement
solely upon the excess if any of the per share amount payable upon or in
respect of such event over the exercise or base price of the award.

 

In any
of the events referred to in this Section 7.2, the Administrator may take
such action contemplated by this Section 7.2 prior to such event (as
opposed to on the occurrence of such event) to the extent that the Administrator
deems the action necessary to permit the participant to realize the benefits
intended to be conveyed with respect to the underlying shares. Without limiting
the generality of the foregoing, the Administrator may deem an acceleration to
occur immediately prior to the applicable event and/or reinstate the original
terms of the award if an event giving rise to an acceleration does not occur.

 

Without
limiting the generality of Section 3.3, any good faith determination by
the Administrator pursuant to its authority under this Section 7.2 shall
be conclusive and binding on all persons.

 

7.3                               Other Acceleration Rules.
The Administrator may override the provisions of Section 7.2 and/or 7.4 by
express provision in the award agreement and may accord any Eligible Person a
right to refuse any acceleration, whether pursuant to the award agreement or
otherwise, in such circumstances as the Administrator may approve. The portion
of any ISO accelerated in connection with an event referred to in Section 7.2
(or such other circumstances as may trigger accelerated vesting of the award)
shall remain exercisable as an ISO only to the extent the applicable $100,000
limitation on ISOs is not exceeded. To the extent exceeded, 

 

 

the accelerated portion of the option shall be
exercisable as a nonqualified stock option under the Code.

 

7.4                               Golden Parachute Limitation.
Notwithstanding anything else contained in this Section 7 to the contrary,
in no event shall any award or payment be accelerated under this Plan to an
extent or in a manner so that such award or payment, together with any other
compensation and benefits provided to, or for the benefit of, the participant
under any other plan or agreement of the Corporation or any of its
Subsidiaries, would not be fully deductible by the Corporation or one of its
Subsidiaries for federal income tax purposes because of Section 280G of
the Code. If a participant would be entitled to benefits or payments hereunder
and under any other plan or program that would constitute “parachute payments”
as defined in Section 280G of the Code, then the participant may by
written notice to the Corporation designate the order in which such parachute
payments will be reduced or modified so that the Corporation or one of its
Subsidiaries is not denied federal income tax deductions for any “parachute
payments” because of Section 280G of the Code. Notwithstanding the
foregoing, if a participant is a party to an employment or other agreement with
the Corporation or one of its Subsidiaries, or is a participant in a severance
program sponsored by the Corporation or one of its Subsidiaries, that contains
express provisions regarding Section 280G and/or Section 4999 of the
Code (or any similar successor provision), or the applicable award agreement
includes such provisions, the Section 280G and/or Section 4999
provisions of such employment or other agreement or plan, as applicable, shall
control as to the awards held by that participant (for example, and without
limitation, a participant may be a party to an employment agreement with the
Corporation or one of its Subsidiaries that provides for a “gross-up” as
opposed to a “cut-back” in the event that the Section 280G thresholds are
reached or exceeded in connection with a change in control and, in such event,
the Section 280G and/or Section 4999 provisions of such employment
agreement shall control as to any awards held by that participant).

 

8.              OTHER
PROVISIONS

 

8.1                              Compliance with Laws.
This Plan, the granting and vesting of awards under this Plan, the offer, issuance
and delivery of shares of Common Stock, the acceptance of promissory notes
and/or the payment of money under this Plan or under awards are subject to
compliance with all applicable federal and state laws, rules and
regulations (including but not limited to state and federal securities law,
federal margin requirements) and to such approvals by any listing, regulatory
or governmental authority as may, in the opinion of counsel for the
Corporation, be necessary or advisable in connection therewith. The person
acquiring any securities under this Plan will, if requested by the Corporation
or one of its Subsidiaries, provide such assurances and representations to the
Corporation or one of its Subsidiaries as the Administrator may deem necessary
or desirable to assure compliance with all applicable legal and accounting
requirements.

 

8.2                              Employment Status.
No person shall have any claim or rights to be granted an award (or additional
awards, as the case may be) under this Plan, subject to any 

 

 

express contractual rights (set forth in a document
other than this Plan) to the contrary.

 

8.3                              No Employment/Service
Contract. Nothing contained in this Plan (or in any other
documents under this Plan or in any award) shall confer upon any Eligible
Person or other participant any right to continue in the employ or other
service of the Corporation or one of its Subsidiaries, constitute any contract
or agreement of employment or other service or affect an employee’s status as
an employee at will, nor shall interfere in any way with the right of the
Corporation or one of its Subsidiaries to change a person’s compensation or
other benefits, or to terminate his or her employment or other service, with or
without cause. Nothing in this Section 8.3, however, is intended to adversely
affect any express independent right of such person under a separate employment
or service contract other than an award agreement.

 

8.4                              Plan Not Funded.
Awards payable under this Plan shall be payable in shares or from the general
assets of the Corporation, and no special or separate reserve, fund or deposit
shall be made to assure payment of such awards. No participant, beneficiary or
other person shall have any right, title or interest in any fund or in any
specific asset (including shares of Common Stock, except as expressly otherwise
provided) of the Corporation or one of its Subsidiaries by reason of any award
hereunder. Neither the provisions of this Plan (or of any related documents),
nor the creation or adoption of this Plan, nor any action taken pursuant to the
provisions of this Plan shall create, or be construed to create, a trust of any
kind or a fiduciary relationship between the Corporation or one of its
Subsidiaries and any participant, beneficiary or other person. To the extent
that a participant, beneficiary or other person acquires a right to receive
payment pursuant to any award hereunder, such right shall be no greater than
the right of any unsecured general creditor of the Corporation.

 

8.5                              Tax Withholding.
Upon any exercise, vesting, or payment of any award or upon the disposition of
shares of Common Stock acquired pursuant to the exercise
of an ISO prior to satisfaction of the holding period requirements of Section 422
of the Code, the Corporation or one of its Subsidiaries shall have the right at
its option to:

 

(a)                                   require the participant (or the
participant’s personal representative or beneficiary, as the case may be) to
pay or provide for payment of at least the minimum amount of any taxes which
the Corporation or one of its Subsidiaries may be required to withhold with
respect to such award event or payment; or

 

(b)                                  deduct from any amount otherwise
payable in cash to the participant (or the participant’s personal
representative or beneficiary, as the case may be) the minimum amount of any
taxes which the Corporation or one of its Subsidiaries may be required to
withhold with respect to such cash payment.

 

 

In any case where a tax is required to be withheld in
connection with the delivery of shares of Common Stock under this Plan, the
Administrator may in its sole discretion (subject to Section 8.1) grant
(either at the time of the award or thereafter) to the participant the right to
elect, pursuant to such rules and subject to such conditions as the
Administrator may establish, to have the Corporation reduce the number of
shares to be delivered by (or otherwise reacquire) the appropriate number of
shares, valued in a consistent manner at their fair market value or at the
sales price in accordance with authorized procedures for cashless exercises,
necessary to satisfy the minimum applicable withholding obligation on exercise,
vesting or payment. In no event shall the shares withheld exceed the minimum
whole number of shares required for tax withholding under applicable law. The
Corporation may, with the Administrator’s approval, accept one or more
promissory notes from any Eligible Person in connection with taxes required to
be withheld upon the exercise, vesting or payment of any award under this Plan;
provided that any such note shall be subject to terms and conditions
established by the Administrator and the requirements of applicable law.

 

8.6                              Effective Date, Termination and Suspension, Amendments.

 

8.6.1         Effective Date.
This Plan is effective as of January 27, 2004, the date of its approval by
the Board (the “Effective Date”). This
Plan shall be submitted for and subject to stockholder approval no later than
twelve months after the Effective Date. Unless earlier terminated by the Board,
this Plan shall terminate at the close of business on the day before the tenth
anniversary of the Effective Date. After the termination of this Plan either
upon such stated expiration date or its earlier termination by the Board, no
additional awards may be granted under this Plan, but previously granted awards
(and the authority of the Administrator with respect thereto, including the
authority to amend such awards) shall remain outstanding in accordance with
their applicable terms and conditions and the terms and conditions of this
Plan.

 

8.6.2                     Board Authorization.
The Board may, at any time, terminate or, from time to time, amend, modify or
suspend this Plan, in whole or in part. No awards may be granted during any
period that the Board suspends this Plan.

 

8.6.3                     Stockholder Approval.
To the extent then required by applicable law or any applicable listing agency
or required under Sections 162, 422 or 424 of the Code to preserve the intended
tax consequences of this Plan, or deemed necessary or advisable by the Board,
any amendment to this Plan shall be subject to stockholder approval.

 

8.6.4                     Amendments to Awards.
Without limiting any other express authority of the Administrator under (but
subject to) the express limits of this Plan, the Administrator by agreement or
resolution may waive conditions of or limitations on awards to participants
that the Administrator in the prior exercise of its discretion has imposed,
without the consent of a participant, and (subject to the requirements of
Sections 3.2 and 8.6.5) may make other changes to the terms and conditions of
awards. Any amendment or other action that would constitute a repricing of an
award is subject to the limitations set forth in Section 3.2(g).

 

 

8.6.5  Limitations on Amendments to Plan and Awards.
No amendment, suspension or termination of this Plan or change of or affecting
any outstanding award shall, without written consent of the participant, affect
in any manner materially adverse to the participant any rights or benefits of
the participant or obligations of the Corporation under any award granted under
this Plan prior to the effective date of such change. Changes, settlements and
other actions contemplated by Section 7 shall not be deemed to constitute
changes or amendments for purposes of this Section 8.6.

 

8.7                               Privileges of Stock
Ownership. Except as otherwise expressly authorized by the
Administrator or this Plan, a participant shall not be entitled to any
privilege of stock ownership as to any shares of Common Stock not actually
delivered to and held of record by the participant. No adjustment will be made
for dividends or other rights as a stockholder for which a record date is prior
to such date of delivery.

 

8.8                              Governing
Law; Construction; Severability.

 

8.8.1  Choice of Law. This Plan, the awards,
all documents evidencing awards and all other related documents shall be
governed by, and construed in accordance with the laws of the State of
Delaware.

 

8.8.2  Severability. If a court
of competent jurisdiction holds any provision invalid and unenforceable, the
remaining provisions of this Plan shall continue in effect.

 

8.8.3                    Plan Construction.

 

(a)                                    Rule 16b-3. It is
the intent of the Corporation that the awards and transactions permitted by
awards be interpreted in a manner that, in the case of participants who are or
may be subject to Section 16 of the Exchange Act, qualify, to the maximum
extent compatible with the express terms of the award, for exemption from
matching liability under Rule 16b-3 promulgated under the Exchange Act. Notwithstanding
the foregoing, the Corporation shall have no liability to any participant for Section 16
consequences of awards or events under awards if an award or event does not so
qualify.

 

(b)                                   Section 162(m). Awards
under Section 5.1.4 to persons described in Section 5.2 that are
either granted or become vested, exercisable or payable based on attainment of
one or more performance goals related to the Business Criteria, as well as
Qualifying Options and Qualifying SARs granted to persons described in Section 5.2,
that are approved by a committee composed solely of two or more outside
directors (as this requirement is applied under Section 162(m) of the
Code) shall be deemed to be intended as performance-based compensation within
the meaning of Section 162(m) of the Code unless such committee provides
otherwise at the time of grant of the award. It is the further intent of the 

 

 

Corporation that (to the extent the Corporation or one
of its Subsidiaries or awards under this Plan may be or become subject to
limitations on deductibility under Section 162(m) of the Code) any
such awards and any other Performance-Based Awards under Section 5.2 that
are granted to or held by a person subject to Section 162(m) will
qualify as performance-based compensation or otherwise be exempt from
deductibility limitations under Section 162(m).

 

8.9                               Captions. Captions
and headings are given to the sections and subsections of this Plan solely as a
convenience to facilitate reference. Such headings shall not be deemed in any
way material or relevant to the construction or interpretation of this Plan or
any provision thereof.

 

8.10                        Stock-Based Awards in
Substitution for Stock Options or Awards Granted by Other Corporation.
Awards may be granted to Eligible Persons in substitution for or in connection
with an assumption of employee stock options, SARs, restricted stock or other
stock-based awards granted by other entities to persons who are or who will
become Eligible Persons in respect of the Corporation or one of its
Subsidiaries, in connection with a distribution, merger or other reorganization
by or with the granting entity or an affiliated entity, or the acquisition by
the Corporation or one of its Subsidiaries, directly or indirectly, of all or a
substantial part of the stock or assets of the employing entity. The awards so
granted need not comply with other specific terms of this Plan, provided the
awards reflect only adjustments giving effect to the assumption or substitution
consistent with the conversion applicable to the Common Stock in the
transaction and any change in the issuer of the security. Any shares that are
delivered and any awards that are granted by, or become obligations of, the
Corporation, as a result of the assumption by the Corporation of, or in
substitution for, outstanding awards previously granted by an acquired company
(or previously granted by a predecessor employer (or direct or indirect parent
thereof) in the case of persons that become employed by the Corporation or one
of its Subsidiaries in connection with a business or asset acquisition or similar
transaction) shall not be counted against the Share Limit or other limits on
the number of shares available for issuance under this Plan.

 

8.11                        Non-Exclusivity
of Plan. Nothing in this Plan shall limit or be deemed to limit
the authority of the Board or the Administrator to grant awards or authorize
any other compensation, with or without reference to the Common Stock, under
any other plan or authority.

 

8.12                        No Corporate Action
Restriction. The existence of this Plan, the award agreements
and the awards granted hereunder shall not limit, affect or restrict in any way
the right or power of the Board or the stockholders of the Corporation to make
or authorize: (a) any adjustment, recapitalization, reorganization or
other change in the capital structure or business of the Corporation or any
subsidiary, (b) any merger, amalgamation, consolidation or change in the
ownership of the Corporation or any subsidiary, (c) any issue of bonds,
debentures, capital, preferred or prior preference stock ahead of or affecting
the capital stock (or the 

 

 

rights thereof) of the Corporation or any subsidiary, (d) any
dissolution or liquidation of the Corporation or any subsidiary, (e) any
sale or transfer of all or any part of the assets or business of the
Corporation or any subsidiary, or (f) any other corporate act or
proceeding by the Corporation or any subsidiary. No participant, beneficiary or
any other person shall have any claim under any award or award agreement
against any member of the Board or the Administrator, or the Corporation or any
employees, officers or agents of the Corporation or any subsidiary, as a result
of any such action.

 

8.13                        Other Company Benefit and
Compensation Programs. Payments and other benefits received by a
participant under an award made pursuant to this Plan shall not be deemed a
part of a participant’s compensation for purposes of the determination of
benefits under any other employee welfare or benefit plans or arrangements, if
any, provided by the Corporation or any subsidiary, except where the
Administrator expressly otherwise provides or authorizes in writing. Awards
under this Plan may be made in addition to, in combination with, as
alternatives to or in payment of grants, awards or commitments under any other
plans or arrangements of the Corporation or its subsidiaries.Exhibit 10.1

 

SECURITIES PURCHASE
AGREEMENT

 

BY AND AMONG

 

TONTINE CAPITAL PARTNERS,
L.P.,

 

TONTINE PARTNERS, L.P.,

 

TONTINE OVERSEAS FUND,
LTD.,

 

TONTINE 25 OVERSEAS MASTER
FUND, L.P.

 

AND

 

BROADWIND ENERGY, INC.

 

 

APRIL 22, 2008

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE 1    Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2    Purchase
  and Sale of Shares

  	
  4

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Purchase of Shares

  	
  4

  
	
  2.2

  	
  Conversion of Notes

  	
  4

  
	
  2.3

  	
  Initial Closing

  	
  4

  
	
  2.4

  	
  Second Closing

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3    Buyers’
  Representations and Warranties

  	
  5

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Organization and Qualification

  	
  5

  
	
  3.2

  	
  Authorization; Enforcement

  	
  5

  
	
  3.3

  	
  Securities Matters

  	
  5

  
	
  3.4

  	
  Information

  	
  6

  
	
  3.5

  	
  Restrictions on Transfer

  	
  6

  
	
  3.6

  	
  Consents

  	
  7

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4    Representations
  and Warranties of the Company

  	
  7

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Organization and Qualification

  	
  7

  
	
  4.2

  	
  Authorization; Enforcement

  	
  7

  
	
  4.3

  	
  Capitalization; Valid Issuance of Shares and Conversion
  Shares

  	
  7

  
	
  4.4

  	
  No Conflicts

  	
  8

  
	
  4.5

  	
  SEC Documents; Financial Statements.

  	
  8

  
	
  4.6

  	
  Absence of Certain Changes

  	
  9

  
	
  4.7

  	
  Absence of Litigation

  	
  10

  
	
  4.8

  	
  Intellectual Property

  	
  10

  
	
  4.9

  	
  Tax Status

  	
  10

  
	
  4.10

  	
  Permits; Compliance.

  	
  10

  
	
  4.11

  	
  Environmental Matters

  	
  11

  
	
  4.12

  	
  Title to Property

  	
  12

  
	
  4.13

  	
  No Investment Company or Real Property Holding Company

  	
  12

  
	
  4.14

  	
  No Brokers

  	
  12

  
	
  4.15

  	
  Registration Rights

  	
  12

  
	
  4.16

  	
  Exchange Act Registration

  	
  12

  
	
  4.17

  	
  Labor Relations

  	
  12

  
	
  4.18

  	
  Transactions with Affiliates and Employees

  	
  12

  
	
  4.19

  	
  Insurance

  	
  13

  
	
  4.20

  	
  Approved Acquisitions of Shares and Conversion Shares; No
  Anti-Takeover Provisions

  	
  13

  
	
  4.21

  	
  ERISA

  	
  13

  
	
  4.22

  	
  Disclosure

  	
  13

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5    Covenants

  	
  14

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Form D; Blue Sky Laws

  	
  14

  
	
  5.2

  	
  Use of Proceeds

  	
  14

  
	
  5.3

  	
  Expenses

  	
  14

  

 

i

 

	
  5.4

  	
  No Integration

  	
  14

  
	
  5.5

  	
  Board Designee(s)

  	
  14

  
	
  5.6

  	
  Observation Rights

  	
  14

  
	
  5.7

  	
  Future Acquisitions

  	
  14

  
	
  5.8

  	
  Participation in Future Issuances

  	
  14

  
	
  5.9

  	
  HSR Act Filing

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6    Conditions
  To The Company’s Obligation

  	
  15

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Delivery of Transaction Documents

  	
  15

  
	
  6.2

  	
  Payment of Purchase Price

  	
  15

  
	
  6.3

  	
  Representations and Warranties

  	
  15

  
	
  6.4

  	
  Litigation

  	
  15

  
	
  6.5

  	
  Surrender of Notes

  	
  15

  
	
  6.6

  	
  HSR Notifications

  	
  15

  
	
  6.7

  	
  Authorized Shares

  	
  15

  
	
  6.8

  	
  No Prohibition

  	
  16

  
	
  6.9

  	
  Fairness Opinion

  	
  16

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7    Conditions
  to the Buyers’ Obligation

  	
  16

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  Delivery of Transaction Documents; Issuance of Shares and
  Conversion Shares; Payment of Note Interest

  	
  16

  
	
  7.2

  	
  Representations and Warranties

  	
  16

  
	
  7.3

  	
  Consents

  	
  16

  
	
  7.4

  	
  Litigation

  	
  16

  
	
  7.5

  	
  Opinion

  	
  17

  
	
  7.6

  	
  No Material Adverse Change

  	
  17

  
	
  7.7

  	
  HSR Notification

  	
  17

  
	
  7.8

  	
  Authorized Shares

  	
  17

  
	
  7.9

  	
  No Prohibition

  	
  17

  
	
  7.10

  	
  Fairness Opinion

  	
  17

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8    Termination

  	
  17

  
	
   

  	
   

  	
   

  
	
  8.1

  	
  Termination Provisions

  	
  17

  
	
  8.2

  	
  Effect of Termination

  	
  18

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9    Indemnification

  	
  18

  
	
   

  	
   

  	
   

  
	
  9.1

  	
  Indemnification by the Company

  	
  18

  
	
  9.2

  	
  Notification

  	
  18

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10   Governing
  Law; Miscellaneous

  	
  19

  
	
   

  	
   

  	
   

  
	
  10.1

  	
  Governing Law

  	
  19

  
	
  10.2

  	
  Counterparts; Electronic Signatures

  	
  19

  
	
  10.3

  	
  Headings

  	
  19

  
	
  10.4

  	
  Severability

  	
  19

  
	
  10.5

  	
  Entire Agreement; Amendments

  	
  19

  
	
  10.6

  	
  Notices

  	
  19

  
	
  10.7

  	
  Successors and Assigns

  	
  20

  
	
  10.8

  	
  Third Party Beneficiaries

  	
  20

  
	
  10.9

  	
  Publicity

  	
  20

  
	
  10.10

  	
  Further Assurances

  	
  21

  
	
  10.11

  	
  No Strict Construction

  	
  21

  
	
  10.12

  	
  Rights Cumulative

  	
  21

  

 

ii

 

	
  10.13

  	
  Survival

  	
  21

  
	
  10.14

  	
  Knowledge

  	
  21

  

 

iii

 

SECURITIES PURCHASE
AGREEMENT

 

This
SECURITIES PURCHASE AGREEMENT, dated as of April 22, 2008, is entered into
by and among BROADWIND ENERGY, INC., a Nevada corporation formerly known as
Tower Tech Holdings Inc. (the “Company”),
and the investors identified on the signature page hereto (each a “Buyer” and collectively, the “Buyers”).

 

RECITALS:

 

A.            The
Buyers desire to provide financing to the Company and the Company desires to
obtain financing from the Buyers, upon the terms and conditions set forth in this
Agreement;

 

B.            The
total financing being provided by the Buyers to the Company hereunder shall
consist of the purchase by the Buyers of an aggregate of 12,562,814 shares (the “Shares”) of common stock, $0.001 par
value per share at $7.96  per
share, for a total purchase price of approximately $100,000,000;

 

C             The
Company and the Buyers are executing and delivering this Agreement in reliance
upon the exemptions from securities registration afforded by Section 4(2) of
the 1933 Act and Rule 506; and

 

D.            At
the Initial Closing, the original principal amount of the Notes will be
converted into the Conversion Shares (as each of such defined terms is defined
in Article 1).

 

AGREEMENT

 

NOW
THEREFORE, the Company and the Buyers hereby agree as follows:

 

ARTICLE 1

DEFINITIONS

 

“1933 Act”  means the Securities Act of
1933, as amended.

 

“1934 Act”  means the Securities
Exchange Act of 1934, as amended.

 

“2006-2008 SEC Documents” has the
meaning set forth in Section 3.4.

 

“Action”  means any action, suit
claim, inquiry, notice of violation, proceeding (including any partial
proceeding such as a deposition) or investigation against or affecting the
Company, any of its Subsidiaries or any of their respective properties before
or by any court, arbitrator, governmental or administrative agency, regulatory
authority (federal, state, county, local or foreign), public board, stock
market, stock exchange or trading facility.

 

“Agreement”  means this Securities
Purchase Agreement.

 

 “August 2007
Securities Purchase Agreement” means that certain Securities
Purchase Agreement dated August 22, 2007, by and among the Company, TCP,
TCOMF, T25, TOF and TP.

 

“Beynon Registration Rights Agreement” means that certain
Registration Rights Agreement the Company anticipates entering into with Charles
H. Beynon at or around the Initial closing.

 

1

 

“BF Registration Rights Agreement”
means that certain Registration Rights Agreement by and among the Company and
certain shareholders of Brad Foote Gear Works, Inc.

 

“Buyer”
and “Buyers” have the
meaning set forth in the preamble.

 

“Claim”
has the meaning set forth in Section 9.2.

 

“Code” has the meaning set forth in Section 4.13.

 

“Common
Stock”  means the
Company’s common stock, $0.001 par value per share.

 

“Company”
has the meaning set forth in the preamble.

 

“Consent”
means any approval, consent, ratification, waiver, or other authorization
(including any Governmental Authorization).

 

“Conversion
Shares” means the shares of Common Stock of the Company into which
the original principal amount of a Note is convertible pursuant to the terms of
such Note.

 

“EMS Registration Rights Agreement”
means that certain Registration Rights Agreement by and among the Company and
the members of Energy Maintenance Service LLC.

 

“Environmental
Laws” has the meaning set forth in Section 4.11.

 

“ERISA” has the meaning set forth in Section 4.21.

 

“GAAP” has the
meaning set forth in Section 4.4.

 

“Governmental Authorization” means any approval, consent,
license, permit, waiver, or other authorization issued, granted, given, or
otherwise made available by or under the authority of any Governmental Body or
pursuant to any Legal Requirement.

 

“Governmental Body” means any: (a) nation, state,
province, county, city, town, village, district, or other jurisdiction of any
nature; (b) federal, state, provincial, local, municipal, foreign, or
other government; (c) governmental or quasi-governmental authority of any
nature (including any governmental agency, branch, department, official, or entity
and any court or other tribunal); (d) multi-national organization or body;
or (e) body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory, or taxing authority or
power of any nature.

 

“Hazardous
Materials” has the meaning set forth in Section 4.11.

 

“HSR Act” has the meaning set forth
in Section 5.9.

 

“HSR Notification” and “HSR Notifications” have the meanings
set forth in Section 5.9.

 

“Indemnified Party” has the meaning set forth in Section 9.2.

 

“Initial
Closing” has the meaning set forth in Section 2.1.

 

“Initial
Closing Date” has the meaning set forth in Section 2.1.

 

“Initial
Purchase Price” has the meaning set forth in Section 2.1.

 

2

 

“Initial
Securities Purchase Agreement” means that certain Securities
Purchase Agreement dated March 1, 2007 by and among the Company, TCP and
TCOMF.

 

“Intellectual
Property”  has the meaning
set forth in Section 4.8.

 

“Investment
Company”  has the meaning
set forth in Section 4.13.

 

“January 2008
Securities Purchase Agreement” means that certain Amended and
Restated Securities Purchase Agreement, dated January 3, 2008, by and
among TCP, TP, T25 and the Company.

 

“Legal
Requirement” means any federal, state, local, municipal,
foreign, international, multinational or other law, rule, regulation, order,
judgment, decree, ordinance, policy or directive, including those entered,
issued, made, rendered or required by any court, administrative or other
governmental body, agency or authority, or any arbitrator that has jurisdiction
over the Company or the Buyers.

 

“Material
Adverse Effect” means any material adverse
effect on the business, operations, assets, financial condition or prospects of
the Company.

 

 “Note” means any
of the Senior Subordinated Convertible Promissory Notes issued by the Company
on October 19, 2007 pursuant to the August 2007 Securities Purchase
Agreement, as each was amended by an Amendment to Senior Subordinated
Convertible Promissory Note between the Company and the applicable Note Holder
dated of even date herewith.

 

“Note
Holder” means any holder of a Note on the Closing Date.  As of the date of this Agreement, the holders
of the Notes are TCOMF, TP and TOF.

 

“NRS” has the meaning set forth in Section 4.20.

 

“Per Share Price”
means $7.96 per Share.

 

“Permits” has the
meaning set forth in Section 4.10.

 

“Registration
Rights Agreement”  means the
Registration Rights Agreement dated March 1, 2007, by and among the
Company, TCP and TCOMF, T25, TOF and TP, as amended on October 19, 2007,
pursuant to which the Company has agreed under certain circumstances to
register the resale of the Shares and the Conversion Shares under the 1933 Act
and the rules and regulations promulgated thereunder, and applicable state
securities laws.

 

“Rule 506” means Rule 506
of Regulation D promulgated under the 1933 Act.

 

“SEC” means the
United States Securities and Exchange Commission.

 

“SEC
Documents”  has the meaning
set forth in Section 4.4.

 

“Second Closing” has the meaning set
forth in Section 2.4.

 

“Second Closing Date” has the meaning
set forth in Section 2.4.

 

“Second Purchase Price” has the
meaning set forth in Section 2.4.

 

“Shares” has the
meaning set forth in the Recitals.

 

3

 

“Subsidiaries”
means with respect to the Company, Tower Tech Systems, Inc, a
Wisconsin corporation, Brad Foote Gear Works, Inc., an Illinois
corporation, R.B.A. Inc., a Wisconsin corporation, and Energy Maintenance
Service, LLC, a Delaware limited liability company.

 

“T25” means Tontine 25 Overseas
Master Fund, L.P.

 

“TCOMF” means Tontine Capital
Overseas Master Fund, L.P.

 

“TCP” means Tontine Capital Partners,
L.P.

 

“TOF” means Tontine Overseas Fund,
Ltd.

 

“TP” means Tontine Partners, L.P.

 

“Transaction
Documents” means this Agreement and any other documents
contemplated by this Agreement.

 

ARTICLE 2

PURCHASE AND SALE OF SHARES

 

2.1           Purchase of Shares.  Subject to the terms and conditions of this
Agreement, the Company shall issue and sell to each of the Buyers, and each of
the Buyers shall purchase, at the Initial Closing and the Second Closing the
number of Shares set forth opposite such Buyer’s name on Schedule 1 for
the Per Share Price and for an aggregate purchase price to be paid by each Buyer
set forth opposite such Buyer’s name on Schedule 1.

 

2.2           Conversion of Notes.  Contemporaneously with, and as a condition
to, the Initial Closing (i) the original principal amount of the Notes
shall be converted into the Conversion Shares at the conversion price set forth
in the Notes without any further notice or action by the Note Holders, and (ii) all
accrued and unpaid interest on the Notes shall be paid in cash by the Company
to the applicable Note Holders.

 

2.3           Initial Closing.  Subject to the conditions
set forth in Article 6 and Article 7 hereto, the
closing of the initial purchase of 9,025,126 Shares and the conversion of the
Notes (the “Initial
Closing”) shall take place at the offices of Barack
Ferrazzano Kirschbaum & Nagelberg LLP, 200 West Madison Street, Suite 3900,
Chicago, Illinois 60606, on April 24, 2008, or at such other date and
place as are mutually agreeable to the Company and the Buyers purchasing Shares
in the Initial Closing.  The date of the
Initial Closing is hereafter referred to as the “Initial Closing Date.”  On the Initial Closing Date,
the Buyers purchasing Shares in the Initial Closing shall pay the Per Share
Price for such Shares, for a total price of approximately $40,000,000 (the “Initial Purchase Price”),
by wire transfer of immediately available funds in accordance with the Company’s
written instructions.  Also on the
Initial Closing Date, the Note Holders shall surrender to the Company the
original Notes in order to effect the conversion.  At the Initial Closing, upon payment of the
Initial Purchase Price and the surrender of the original Notes, the Company
will deliver written instructions from the Company to the
transfer agent for the Company’s Common Stock to issue (i) certificates
representing the Shares purchased at the Initial Closing registered in the name
of each Buyer purchasing such Shares and to deliver such certificates to or at
the direction of each such Buyer, and (ii) certificates representing the
Conversion Shares registered in the name of each Note Holder and to deliver
such certificates to or at the direction of each Note Holder.  The Company shall not have
the power to revoke or amend such transfer instructions without the written
consent of such Buyers.

 

4

 

2.4           Second Closing.  Subject to the conditions set forth in Article 6
and Article 7 hereto, the closing of the second purchase of 7,537,688
Shares (the “Second
Closing”) shall take place at the offices of Barack
Ferrazzano Kirschbaum & Nagelberg LLP on the date that is three (3) business
days after the date that the conditions set forth in Section 6.6
and Section 7.7 have been satisfied, or at such other date and
place as are mutually agreeable to the Company and the Buyers purchasing Shares
in the Second Closing.  The date of the
Second Closing is hereafter referred to as the “Second Closing Date.”  On the Second Closing Date,
the Buyers purchasing Shares in the Second Closing shall pay the Per Share
Price for such Shares, for a total price of approximately $60,000,000 (the “Second Purchase Price”),
by wire transfer of immediately available funds in accordance with the Company’s
written instructions.  At the Second
Closing, upon payment of the Second Purchase Price, the Company will deliver written
instructions from the Company to the transfer agent for the Company’s Common
Stock to issue certificates representing the Shares purchased at the Second
Closing registered in the name of each Buyer purchasing such Shares and to
deliver such certificates to or at the direction of each such Buyer.  The Company shall not have
the power to revoke or amend such transfer instructions without the written
consent of such Buyers.

 

ARTICLE 3

BUYERS’ REPRESENTATIONS AND WARRANTIES

 

Each
Buyer represents and warrants to the Company that:

 

3.1           Organization
and Qualification.  Each of the
Buyers is an entity of the type identified on Schedule 1 attached
hereto, duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization, with full power and authority to purchase
the Shares and otherwise perform its obligations under this Agreement and the
other Transaction Documents.

 

3.2           Authorization; Enforcement.  Each Buyer has the requisite power and
authority to enter into this Agreement and consummate the transactions
contemplated hereby.  This Agreement and
each of the other Transaction Documents to be executed by the Buyers and the
consummation of the transactions contemplated hereby and thereby have been duly
and validly authorized by, and duly executed and delivered on behalf of, such
Buyer.  This Agreement and each of the
other Transaction Documents to be executed by the Buyers constitutes the valid
and binding agreement of such Buyer enforceable in accordance with its terms,
except as such enforceability may be limited by:  (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws in effect that limit creditors’
rights generally; (ii) equitable limitations on the availability of
specific remedies; and (iii) principles of equity.

 

3.3           Securities
Matters.  In connection with the Company’s
compliance with applicable securities laws:

 

a.             Such Buyer understands that the Shares are being offered
and sold to it in reliance upon specific exemptions from the registration
requirements of United States and state securities laws and that the Company is
relying upon the truth and accuracy of, and such Buyer’s compliance with, the
representations, warranties, agreements, acknowledgments and understandings of
such Buyer set forth herein in order to determine the availability of such
exemption and the eligibility of such Buyer to acquire the Shares.

 

b.             Such Buyer is purchasing the Shares for its own account,
not as a nominee or agent, for investment purposes and not with a present view
towards resale, except pursuant to sales exempted from registration under the
1933 Act, or registered under the 1933 Act as contemplated by the Registration
Rights Agreement.

 

5

 

c.             Such Buyer is an “accredited investor” as that term is
defined in Rule 501(a) of Regulation D under the 1933 Act, and has
such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of an investment in the Shares.  Such Buyer understands that its investment in
the Shares involves a significant degree of risk and that, except as set forth
in this Agreement, the Company has made no representations or assurances
concerning the present or prospective value of the Shares being purchased
hereunder.  Such Buyer understands that
no United States federal or state agency or any other government or
governmental agency has passed upon or made any recommendation or endorsement
of the Shares.

 

3.4           Information.  Such Buyer has conducted its
own due diligence examination of the Company’s business, financial condition,
results of operations, and prospects.  In
connection with such investigation, such Buyer and its representatives (i) have
reviewed the Company’s Form 10-KSB for the fiscal years ended December 31,
2006 and December 31, 2007 and the Company’s Current Reports on Form 8-K
or Form 8-K/A filed in 2006, 2007 and 2008 (and all exhibits included
therein and financial statements and schedules thereto and documents (other
than exhibits to such documents) incorporated by reference therein, being
hereinafter referred to herein as the “2006-2008 SEC Documents”), (ii) have
been given an opportunity to ask questions, to the extent such Buyer considered
necessary, and have received answers from, officers of the Company concerning
the business, finances and operations of the Company and information relating
to the offer and sale of the Shares, and (iii) have
received or had an opportunity to obtain such additional information as they
deem necessary to make an informed investment decision with respect to the
purchase of the Shares. 
Representatives of such Buyer (i) have participated in Board of
Director meetings of the Company pursuant to (A) its Observation Rights
(as defined in the Initial Purchase Agreement) and (B) through its
nominees to the Company’s Board of Directors appointed pursuant to the terms of
the August 2007 Securities Purchase Agreement.

 

3.5           Restrictions on Transfer.  Such Buyer understands that except as
provided in the Registration Rights Agreement, the issuance of the Shares has
not been and is not being registered under the 1933 Act or any applicable state
securities laws. Such Buyer may be required to hold the Shares indefinitely and
the Shares may not be transferred unless (i) the Shares are sold pursuant
to an effective registration statement under the 1933 Act, or (ii) such
Buyer shall have delivered to the Company an opinion of counsel to the effect
that the Shares to be sold or transferred may be sold or transferred pursuant
to an exemption from such registration, which opinion shall be reasonably
acceptable to the Company. Such Buyer understands that until such time as the
resale of the Shares has been registered under the 1933 Act as contemplated by
the Registration Rights Agreement, or otherwise may be sold pursuant to an
exemption from registration, certificates evidencing the Shares may bear a
restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of the certificates evidencing such
Shares):

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”).  THE SHARES MAY NOT BE OFFERED FOR SALE,
SOLD, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF
THE CORPORATION.”

 

3.6           Consents.  Except as set forth in this Agreement, no
Buyer will be required to obtain any Consent from any person or entity in
connection with the execution and delivery of this Agreement or the
consummation or performance of any of the transactions contemplated hereby.

 

6

 

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF THE
COMPANY

 

Except
as set forth in the Company’s Disclosure Schedule attached hereto, the Company
represents and warrants to the Buyers that:

 

4.1           Organization and Qualification.  The Company has no subsidiaries other than
the Subsidiaries.  The Company and each
of its Subsidiaries is a corporation, limited partnership, limited liability
company, or joint venture as applicable, duly organized, validly existing and
in good standing under the laws of the jurisdiction in which it is incorporated
or organized, with corporate, limited liability or limited partnership power
and authority to own, lease, use and operate its properties and to carry on its
business as now operated and conducted.  Expect
as set forth on Schedule 4.1, the Company and each of its Subsidiaries
is duly qualified as a foreign corporation, limited liability company or
limited partnership to do business and is in good standing in each jurisdiction
in which its ownership or use of property or the nature of the business
conducted by it makes such qualification necessary, except where the failure to
be so qualified or in good standing would not have a Material Adverse
Effect.  Neither the Company nor any
Subsidiary is in violation of any provision of its respective certificate or
articles of incorporation, partnership agreement, bylaws or other
organizational or charter documents, as the same may have been amended.

 

4.2           Authorization;
Enforcement.  The Company
has all requisite corporate power and authority to enter into and perform this
Agreement and each of the other Transaction Documents and to consummate the
transactions contemplated hereby and thereby and to issue the Shares, in
accordance with the terms hereof and thereof. 
The execution and delivery of this Agreement and each of the other
Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby (including without limitation, the
issuance of the Shares) have been duly authorized by the Company’s Board of
Directors and no further consent or authorization of the Company, its Board of
Directors, or its stockholders is required. 
This Agreement and each of the other Transaction Documents have been
duly executed and delivered by the Company. 
This Agreement and each of the other Transaction Documents will
constitute upon execution and delivery by the Company, a legal, valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms, except as such enforceability may be limited by:  (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws in effect that limit creditors’
rights generally; (ii) equitable limitations on the availability of
specific remedies; (iii) principles of equity (regardless of whether such
enforcement is considered in a proceeding in law or in equity); and (iv) to
the extent rights to indemnification and contribution may be limited by federal
securities laws or the public policy underlying such laws.

 

4.3           Capitalization;
Valid Issuance of Shares and Conversion Shares.  As of the date hereof, the authorized capital
stock of the Company consists of 100,000,000 shares of Common Stock, of which 79,936,996
shares are issued and outstanding, and no shares are held by the Company as
treasury shares, and 10,000,000 shares of preferred stock, of which no shares
are issued and outstanding.  All of such
outstanding shares of Common Stock are duly authorized, validly issued, fully
paid and nonassessable.  The Shares and
the Conversion Shares have been duly authorized and when issued pursuant to the
terms hereof will be validly issued, fully paid and nonassessable and will not
be subject to any encumbrances, preemptive rights or any other similar
contractual rights of the stockholders of the Company or any other person.  No shares of capital stock of the Company are
subject to preemptive rights of the stockholders of the Company or any liens or
encumbrances imposed through the actions or failure to act of the Company.  As of the date of this Agreement, as described
in Schedule 4.3 attached hereto, (i) there are no outstanding
options, warrants, scrip, rights to subscribe for, puts, calls, rights of first
refusal, agreements, understandings, claims or other commitments or rights of
any character whatsoever relating to, or securities or rights convertible into
or exchangeable for any shares of capital stock of the Company or any of its
Subsidiaries, or arrangements by which the Company or any of its 

 

7

 

Subsidiaries is or may
become bound to issue additional shares of capital stock, (ii) there are
no agreements or arrangements under which the Company or any of its
Subsidiaries is obligated to register the sale of any of its or their securities
under the 1933 Act (except the Registration Rights Agreement, the BF
Registration Rights Agreement, the EMS Registration Rights Agreement and the
Beynon Registration Rights Agreement) and (iii) there are no anti-dilution
or price adjustment provisions contained in any security issued by the Company
(or in any agreement providing rights to security holders other than the
Initial Securities Purchase Agreement, the August 2007 Securities Purchase
Agreement and the January 2008 Securities Purchase Agreement) that will be
triggered by the issuance of the Shares or the Conversion Shares.  Except as may be described in any documents
which have been publicly filed by any of the Company’s stockholders, to the
Company’s knowledge, there are no agreements between the Company’s stockholders
with respect to the voting or transfer of the Company’s capital stock or with
respect to any other aspect of the Company’s affairs.

 

4.4           No Conflicts.  The execution, delivery and performance of
this Agreement and each of the other Transaction Documents by the Company and
the consummation by the Company of the transactions contemplated hereby and
thereby (including, without limitation, the issuance of Shares) will not (i) conflict
with or result in a violation of any provision of the Articles of
Incorporation, as amended, of the Company or the Bylaws, as amended, of the
Company, (ii) violate or conflict with, or result in a breach of any
provision of, or constitute a default (or an event which with notice or lapse
of time or both could become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any material
agreement, indenture, patent, patent license or instrument to which the Company
or any of its Subsidiaries is a party, or (iii) result in a violation of
any Legal Requirement (including federal and state securities laws and
regulations and regulations of any self-regulatory organizations to which the
Company or its securities are subject) applicable to the Company or any of its
Subsidiaries or by which any property or asset of the Company or any of its
Subsidiaries is bound or affected (except for such conflicts, defaults,
terminations, amendments, accelerations, cancellations and violations as would
not, individually or in the aggregate, have a Material Adverse Effect).  Except as set forth in Schedule 4.4,
neither the Company nor any of its Subsidiaries is in violation of its
certificate or articles of incorporation, bylaws or other organizational
documents and neither the Company nor any of its Subsidiaries is in default
(and no event has occurred which with notice or lapse of time would result in a
default) under, and neither the Company nor any of its Subsidiaries has taken
any action or failed to take any action that would give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement or
instrument to which the Company or any of its Subsidiaries is a party or by
which any property or assets of the Company or any of its Subsidiaries is bound
or affected, except for possible defaults as would not, individually or in the
aggregate, have a Material Adverse Effect. 
Except with respect to any filings or notices related to the issuance of
the Shares or the Conversion Shares to be filed with the OTC Bulletin Board, if
any, and as required under the 1933 Act and any applicable state securities
laws, the Company is not required to obtain any consent, authorization or order
of, or make any filing or registration with, any court, governmental agency,
regulatory agency, self regulatory organization or stock market or any third
party in order for it to execute, deliver or perform any of its obligations
under the Transaction Documents.  All
consents, authorizations, orders, filings and registrations that the Company is
required to effect or obtain pursuant to the preceding sentence have been
obtained or effected on or prior to the date hereof.

 

4.5           SEC Documents; Financial
Statements.

 

a.     Except as set forth on Schedule 4.4,
since December 31, 2006, the Company has timely filed all reports,
schedules, forms, statements and other documents required to be filed by it
with the SEC pursuant to the reporting requirements of the 1933 Act and the
1934 Act (all of the foregoing filed prior to the date hereof and all exhibits
included therein and financial statements and schedules thereto and documents
(other than exhibits to such documents) incorporated by reference therein,
being 

 

8

 

hereinafter referred to
herein as the “SEC Documents”),
or has timely filed for a valid extension of such time of filing and has filed
any such SEC Documents prior to the expiration of any such extension.  As of their respective dates, the SEC
Documents complied in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and regulations of the
SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading, except as
subsequently disclosed in later-filed SEC Documents.

 

b.     As of their respective dates, the financial
statements of the Company included in the SEC Documents complied as to form in
all material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto.  Such financial statements have been prepared
in accordance with United States generally accepted accounting principles (“GAAP”), consistently
applied, during the periods involved (except (i) as may be otherwise indicated
in such financial statements or the notes thereto, or (ii) in the case of
unaudited interim statements, to the extent they may not include footnotes,
year end adjustments or may be condensed or summary statements) and fairly
present in all material respects the consolidated financial position of the
Company and its consolidated Subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal year-end audit
adjustments).  Except as set forth in the
financial statements of the Company included in the SEC Documents, the Company
has no liabilities, contingent or otherwise, other than (i) liabilities
incurred in the ordinary course of business subsequent to December 31,
2007, and (ii) obligations under contracts and commitments incurred in the
ordinary course of business and not required under generally accepted
accounting principles to be reflected in such financial statements, which,
individually or taken in the aggregate would not reasonably be expected to have
a Material Adverse Effect.

 

c.     The Company has
established and maintains disclosure controls and procedures (as such term is
defined in Rule 13a-15(e) under the 1934 Act).  Such disclosure controls and procedures:  (A) are designed to ensure that material
information relating to the Company and its Subsidiaries is made known to the
Company’s chief executive officer, president, chief operating officer and its
chief financial officer by others within those entities, particularly during
the periods in which the Company’s reports and filings under the 1934 Act are
being prepared, (B) have been evaluated for effectiveness as of the end of
the most recent annual period reported to the SEC, and (C) are effective
to perform the functions for which they were established.  Except as set forth on Schedule 4.5,
neither the auditors of the Company nor the Board of Directors of the Company
has been advised of: (x) any significant deficiencies or material
weaknesses in the design or operation of the internal controls over financial
reporting (as such term is defined in Rule 13a-15(f) under the 1934
Act) of the Company that have materially affected the Company’s internal
control over financial reporting; or (y) any fraud, whether or not
material, that involves management or other employees who have a role in the
internal controls over financial reporting of the Company.

 

4.6           Absence of Certain Changes.  Except with respect to transactions disclosed
in the SEC Documents, and the transactions contemplated hereby and by each of
the other Transaction Documents, since December 31, 2007, (i) the
Company and each of its Subsidiaries has conducted its business only in the
ordinary course, consistent with past practice, and since that date, no changes
have occurred which would reasonably be expected to have a Material Adverse
Effect; and (ii) the Company has not incurred any liabilities (contingent
or otherwise) other than (A) trade payables, accrued expenses and other
liabilities incurred in the ordinary course of business consistent with past
practice and (B) liabilities not required to be reflected on the Company’s
financial statements pursuant to GAAP or required to be disclosed in filings
made with the SEC.

 

9

 

4.7           Absence of Litigation.  Except as set forth in Schedule 4.7,
there is no Action pending or, to the knowledge of the Company or any of its
Subsidiaries, threatened against or affecting the Company or any of its
Subsidiaries that (i) adversely affects or challenges the legality,
validity or enforceability of this Agreement, or (ii) would, if there were
an unfavorable decision, have or reasonably be expected to have a Material
Adverse Effect.  Neither the Company nor
any of its Subsidiaries, nor any director or officer thereof (in his or her
capacity as such), is or has been the subject of any Action involving a claim
of violation of or liability under federal or state securities laws or a claim
of breach of fiduciary duty.  There has
not been, and to the knowledge of the Company, there is not pending any
investigation by the SEC involving the Company or any current or former
director or officer of the Company (in his or her capacity as such).  The SEC has not issued any stop order or
other order suspending the effectiveness of any registration statement filed by
the Company under the 1934 Act or the 1933 Act.

 

4.8           Intellectual Property.  The Company and each of its Subsidiaries owns
or possesses the requisite licenses or rights to use all patents, patent applications,
patent rights, inventions, know-how, trade secrets, copyrights, trademarks,
trademark applications, service marks, service names, trade names and
copyrights (“Intellectual
Property”) necessary to enable it to conduct its business as now
operated (and, to the Company’s knowledge, as presently contemplated to be
operated in the future); there is no claim or Action by any person pertaining
to, or proceeding pending, or to the Company’s knowledge threatened, which
challenges the right of the Company or of a Subsidiary with respect to any
Intellectual Property necessary to enable it to conduct its business as now
operated and to the Company’s knowledge, the Company’s or its Subsidiaries’
current products and processes do not infringe on any Intellectual Property or
other rights held by any person, except where any such infringement would not
reasonably be expected to have a Material Adverse Effect.

 

4.9           Tax Status.  The Company and each of its Subsidiaries has
made or filed all federal, state and foreign income and all other material tax
returns, reports and declarations required by any jurisdiction to which it is
subject (unless and only to the extent that the Company and each of its
Subsidiaries has set aside on its books provisions reasonably adequate for the
payment of all unpaid and unreported taxes) and has paid all taxes and other
governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and has set aside on its books provisions
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply.  There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction, and the
officers of the Company know of no basis for any such claim.  The Company has not executed a waiver with
respect to the statute of limitations relating to the assessment or collection
of any foreign, federal, state or local tax.

 

4.10         Permits; Compliance.

 

a.     The
Company and each of its Subsidiaries is in possession of all franchises,
grants, authorizations, licenses, permits, easements, variances, exemptions,
consents, certificates, approvals and orders necessary to own, lease and
operate its properties and to carry on its business as it is now being
conducted (collectively, “Permits”),
and there is no Action pending or, to the knowledge of the Company, threatened
regarding suspension or cancellation of any of the Permits.  Neither the Company nor any of its
Subsidiaries is in conflict with, or in default or violation of, any of the
Permits, except for any such conflicts, defaults or violations which, individually
or in the aggregate, would not reasonably be expected to have a Material
Adverse Effect.

 

b.     Since
December 31, 2007, no event has occurred or, to the knowledge of the
Company, circumstance exists that (with or without notice or lapse of time): (a) would
reasonably be expected to constitute or result in a violation by the Company or
any of its Subsidiaries, or a failure on the 

 

10

 

part of the Company or its Subsidiaries to comply with, any Legal
Requirement; or (b) would reasonably be expected to give rise to any
obligation on the part of the Company or any of its Subsidiaries to undertake,
or to bear all or any portion of the cost of, any remedial action of any nature
in connection with a failure to comply with any Legal Requirement, except in
either case that would not reasonably be expected to have a Material Adverse
Effect.  Neither the Company nor any of
its Subsidiaries has received any notice or other communication from any
regulatory authority or any other person, nor does the Company have any
knowledge regarding: (x) any actual, alleged, possible or potential
violation of, or failure to comply with, any Legal Requirement, or (y) any
actual, alleged, possible or potential obligation on the part of the Company or
any of its Subsidiaries to undertake, or to bear all or any portion of the cost
of, any remedial action of any nature in connection with a failure to comply
with any Legal Requirement, except in either case that would not reasonably be
expected to have a Material Adverse Effect.

 

c.     Intentionally
omitted.

 

d.     The
Company is, and has reason to believe that for the foreseeable future it will
continue to be, in compliance with all applicable rules of the OTC
Bulletin Board.  The Company has not
received notice from the OTC Bulletin Board that the Company is not in
compliance with the rules or requirements thereof.  Neither the issuance and sale of the Shares
under this Agreement nor the issuance of the Conversion Shares contravenes the rules and
regulations of the OTC Bulletin Board, and no approval of the stockholders of
the Company is required for the Company to issue the Shares or the Conversion
Shares as contemplated by this Agreement.

 

4.11         Environmental
Matters.  “Environmental Laws” shall mean,
collectively, all Legal Requirements, including any federal, state, local or
foreign statute, laws, rule, regulation, ordinance, code, policy or rule of
common law or any judicial or administrative interpretation thereof, including
any judicial or administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or subsurface
strata) or wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants, contaminants,
wastes, toxic substances, hazardous substances, petroleum or petroleum products
(collectively, “Hazardous
Materials”) or to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous
Materials.  Except for such matters as
could not, singly or in the aggregate, reasonably be expected to result in a
Material Adverse Effect or as set forth on Schedule 4.11: (i) the
Company and its Subsidiaries have complied and are in compliance with all
applicable Environmental Laws; (ii) without limiting the generality of the
foregoing, the Company and its Subsidiaries have obtained, have complied, and
are in compliance with all Permits that are required pursuant to Environmental
Laws for the occupation of their respective facilities and the operation of
their respective businesses; (iii) none of the Company or its Subsidiaries
has received any written notice, report or other information regarding any
actual or alleged violation of Environmental Laws, or any liabilities or
potential liabilities (including fines, penalties, costs and expenses),
including any investigatory, remedial or corrective obligations, relating to
any of them or their respective facilities arising under Environmental Laws,
nor, to the knowledge of the Company is there any factual basis therefore; (iv) there
are no underground storage tanks, polychlorinated biphenyls, urea formaldehyde
or other hazardous substances (other than small quantities of hazardous
substances for use in the ordinary course of the operation of the Company’s and
its Subsidiaries’ respective businesses, which are stored and maintained in
accordance and in compliance with all applicable Environmental Laws), in, on,
over, under or at any real property owned or operated by the Company and/or its
Subsidiaries; (v) there are no conditions existing at any real property or
with respect to the Company or any of its Subsidiaries that require remedial or
corrective action, removal, monitoring or closure pursuant to the Environmental
Laws and (vi) to the knowledge of the Company, neither the Company nor any
of its Subsidiaries has contractually, by operation of law, or otherwise 

 

11

 

amended or succeeded to any liabilities arising under any Environmental
Laws of any predecessors or any other Person.

 

4.12         Title to Property.  Except for any lien for current taxes not yet
delinquent or which are being contested in good faith and by appropriate
proceedings, the Company and its Subsidiaries have good and marketable title to
all real property and all personal property owned by them which is material to
the business of the Company and its Subsidiaries.  Any leases of real property and facilities of
the Company and its Subsidiaries are valid and effective in accordance with
their respective terms, except as would not have a Material Adverse Effect.

 

4.13         No
Investment Company or Real Property Holding Company.  The Company is not, and upon the issuance and
sale of the Shares and the issuance of the Conversion Shares as contemplated by
this Agreement will not be, an “investment company” as defined under the
Investment Company Act of 1940 (“Investment Company”).  The Company is not controlled by an
Investment Company.  The Company is not a
United States real property holding company, as defined under the Internal
Revenue Code of 1986, as amended (the “Code”).

 

4.14         No
Brokers.  The Company has taken no
action which would give rise to any claim by any person for brokerage
commissions, transaction fees or similar payments relating to this Agreement or
the transactions contemplated hereby.

 

4.15         Registration
Rights.  Except pursuant to the
Registration Rights Agreement, the BF Registration Rights Agreement, the EMS
Registration Rights Agreement and the Beynon Registration Rights Agreement,
neither the Company nor any Subsidiary is currently subject to any agreement
providing any person or entity any rights (including piggyback registration
rights) to have any securities of the Company or any Subsidiary registered with
the SEC or registered or qualified with any other governmental authority.

 

4.16         Exchange
Act Registration.  The Common Stock
is registered pursuant to Section 12(b) of the 1934 Act, and the
Company has taken no action designed to, or which, to the knowledge of the
Company, is likely to have the effect of, delisting the registration of the
Common Stock under the 1934 Act.

 

4.17         Labor
Relations.  No labor or employment
dispute exists or, to the knowledge of the Company, is imminent or threatened,
with respect to any of the employees of the Company that has, or could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.

 

4.18         Transactions
with Affiliates and Employees. 
Except as set forth in the SEC Documents, and Schedule 4.18, none
of the officers or directors of the Company, and to the knowledge of the
Company, none of the employees of the Company, is presently a party to any
transaction or agreement with the Company (other than for services as
employees, officers and directors) exceeding $60,000, including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Company, any entity in which any officer, director, or any
such employee has a substantial interest or is an officer, director, trustee or
partner.

 

4.19         Insurance.  The Company and its Subsidiaries have
insurance policies in full force and effect of a type, covering such risks and
in such amounts, and having such deductibles and exclusions as are customary
for conducting businesses and owning assets similar in nature and scope to
those of the Company and its Subsidiaries. 
The amounts of all such insurance policies and the risks covered thereby

 

12

 

are in accordance in all material respects with all material contracts
and agreements to which the Company and/or its Subsidiaries is a party and with
all applicable Legal Requirements.  With
respect to each such insurance policy:  (i) the
policy is valid, outstanding and enforceable in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws in effect that
limit creditors’ rights generally, equitable limitations on the availability of
specific remedies and principles of equity (regardless of whether such
enforcement is considered in a proceeding in law or in equity); (ii) neither
the Company nor any of its Subsidiaries is in breach or default with respect to
its obligations thereunder in any material respect; and (iii) no party to
the policy has repudiated, or given notice of an intent to repudiate, any
provision thereof.

 

4.20         Approved
Acquisitions of Shares and Conversion Shares; No Anti-Takeover Provisions.  Except as otherwise set forth in Schedule
4.2, the Company has taken all necessary action, if any, required under the
laws of the State of Nevada or otherwise to allow the Buyers to acquire the Shares pursuant to
this Agreement and to allow each Note Holder to acquire the Conversion
Shares.  The Company has no control share
acquisition, business combination, poison pill (including any distribution
under a rights agreement) or other similar anti-takeover provision under the
Company’s Articles of Incorporation or Bylaws, each as amended (or similar
charter documents), that is or could become applicable to the Buyers or the
Note Holders as a result of the Buyers, the Note Holders and the Company
fulfilling their obligations or exercising their rights under this Agreement,
including without limitation the Company’s issuance of the Shares to the
Buyers and the Conversion Shares to the Note Holders and the
Buyers’ and the Note Holders’ respective ownership of the Shares and the
Conversion Shares.  In
addition, the Company has opted out of the provisions of the Nevada Revised
Statutes (“NRS”)
pertaining to the acquisition of a controlling interest (NRS 78.378 through
78.3793).  As of the date hereof, the
Company had less than 200 “stockholders of record” and is not considered a “resident
domestic corporation” for purposes of §78.411 through §78.444 of the NRS.

 

4.21         ERISA.  Based upon the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”), and the regulations and published
interpretations thereunder: (i) neither the Company nor any of its
Subsidiaries has engaged in any Prohibited Transactions (as defined in Section 406
of ERISA and Section 4975 of the Code); (ii) the Company and each of
its Subsidiaries has met all applicable minimum funding requirements under Section 302
of ERISA in respect to its plans; (iii) neither the Company nor any of its
Subsidiaries has any knowledge of any event or occurrence which would cause the
Pension Benefit Guaranty Corporation to institute proceedings under Title IV of
ERISA to terminate any employee benefit plan(s); neither the Company nor any of
its Subsidiaries has any fiduciary responsibility for investments with respect
to any plan existing for the benefit of persons other than its or such
Subsidiary’s employees; and (v) neither the Company nor any of its
Subsidiaries has withdrawn, completely or partially, from any multi-employer
pension plan so as to incur liability under the Multiemployer Pension Plan
Amendments Act of 1980.

 

4.22         Disclosure.  The Company understands and confirms that the
Buyers will rely on the representations and covenants contained herein in
effecting the transactions contemplated by this Agreement and the other
Transaction Documents.  All
representations and warranties provided to the Buyers including the disclosures
in the Company’s disclosure schedules attached hereto furnished by or on behalf
of the Company, taken as a whole are true and correct and do not contain any
untrue statement of material fact or omit to state any material fact necessary
in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading. 
No event or circumstance has occurred or information exists with respect
to the Company or its Subsidiaries or its or their businesses, properties,
prospects, operations or financial conditions, which, under applicable law, rule or
regulation, requires public disclosure or announcement by the Company but which
has not been so publicly announced or disclosed.

 

13

 

ARTICLE 5

COVENANTS

 

5.1           Form D;
Blue Sky Laws.  Upon completion of
the Initial Closing and the Second Closing, respectively, the Company shall
file with the SEC a Form D with respect to the Shares as required under
Regulation D and each applicable state securities commission and will provide a
copy thereof to the Buyers promptly after such filing.

 

5.2           Use
of Proceeds.  The Company shall use
the proceeds from the sale of the Shares for general working capital
requirements, capital expansion projects and to finance potential acquisitions
by the Company.

 

5.3           Expenses.  The Company shall reimburse the Buyers for
all reasonable expenses including, without limitation, reasonable attorneys’
fees and expenses, and out-of-pocket travel costs and expenses, incurred by
them in connection with (a) their due diligence review of the Company and
any target of any acquisition that the Company may make, which acquisition is
at least partially financed by the sale of the Shares, and (b) the
negotiation, preparation, execution, delivery and performance of this Agreement
and the other Transaction Documents and the transactions hereunder and
thereunder.

 

5.4           No
Integration.  The Company shall not
make any offers or sales of any security (other than the Shares) under
circumstances that would require registration of the Shares being offered or
sold hereunder under the 1933 Act or cause the offering of the Shares to be
integrated with any other offering of securities by the Company in such a
manner as would require the Company to seek the approval of its stockholders
for the issuance of the Shares under any stockholder approval provision
applicable to the Company or its securities.

 

5.5           Board
Designee(s).  The parties hereto
acknowledge and affirm that the Buyers shall have  the right to appoint members of the Company’s
Board of Directors as set forth in Section 5.5 of the August 2007
Securities Purchase Agreement.

 

5.6           Observation
Rights.  The parties hereto
acknowledge and affirm that the Buyers shall have Observation Rights (as
defined in the Initial Securities Purchase Agreement) as set forth in Section 5.6
of the Initial Securities Purchase Agreement.

 

5.7           Future
Acquisitions.  The Company shall not
revoke its approval of the acquisition of the Shares by the Buyers or the
Conversion Shares by the Note Holders. 
The Company shall use its best efforts to ensure that the acquisition of
the Shares by the Buyers and the Conversion Shares by the Note Holders shall
not be made subject to the provisions of any anti-takeover laws and regulations
of any governmental authority, including without limitation, the applicable
provisions of the Nevada Revised Statutes, and any provisions of an
anti-takeover nature adopted by the Company or any of its Subsidiaries or
contained in the Company’s Articles of Incorporation, Bylaws, or the
organizational documents of any of its Subsidiaries, each as amended.

 

5.8           Participation
in Future Issuances.  The parties
hereto acknowledge and affirm that the Buyers shall continue to have the right
to participate in Future Issuances (as defined in the Initial Securities
Purchase Agreement) set forth in Section 5.7 of the Initial Securities
Purchase Agreement.

 

5.9           HSR
Act Filing.  TCP shall file or cause
to be filed with the United States Federal Trade Commission and the Antitrust
Division of the United States Department of Justice, promptly after the date
hereof, a notification (an “HSR Notification”) under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the “HSR Act”),
and the rules and regulations promulgated thereunder with 

 

14

 

respect to the
purchase by TCP of Shares at the Second Closing.  The Company shall also file or caused to be
filed an HSR Notification (collectively with the HSR Notification filed by TCP,
the “HSR Notifications”), on the same
date or promptly following the filing by TCP. 
Each of the Company and TCP shall cooperate with the other in all
reasonable respects in connection with the preparation and filing of the HSR
Notifications.

 

ARTICLE 6

CONDITIONS TO THE COMPANY’S OBLIGATION

 

The
obligation of the Company hereunder to issue and sell the Shares to the Buyers
at the Initial Closing and the Second Closing, and to issue the Conversion
Shares, is subject to the satisfaction, at or before the Initial Closing Date
and the Second Closing Date, as applicable, of each of the following conditions
thereto (except as otherwise noted therein), provided that these conditions are
for the Company’s sole benefit and may be waived by the Company at any time in
its sole discretion:

 

6.1           Delivery of Transaction
Documents.  The Buyers
shall have executed and delivered the Transaction Documents to which they are a
party to the Company.

 

6.2           Payment of Purchase Price.  The Buyers shall have delivered the Initial
Purchase Price in accordance with Section 2.1 or the Second
Purchase Price in accordance with Section 2.4, as applicable.

 

6.3           Representations and
Warranties.  The
representations and warranties of the Buyers shall be true and correct in all
material respects (provided, however, that such qualification shall only apply
to representations or warranties not otherwise qualified by materiality) as of
the date when made and as of the Initial Closing Date and the Second Closing
Date, as applicable, as though made at that time (except for representations
and warranties that speak as of a specific date), and the applicable Buyer
shall have performed, satisfied and complied in all material respects with the
covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by the applicable Buyer at or prior to
the Initial Closing Date and the Second Closing Date, as applicable.

 

6.4           Litigation.  No litigation, statute, rule, regulation,
executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by or in any court or governmental authority of
competent jurisdiction or any self-regulatory organization having authority
over the matters contemplated hereby which prohibits the consummation of any of
the transactions contemplated by this Agreement.

 

6.5           Surrender of Notes.  As a condition to the Initial Closing, the
Note Holders shall have surrendered the original Notes to the Company for
conversion into Conversion Shares in accordance with Section 2.3.

 

6.6           HSR Notifications.  As a
condition to the Second Closing, the waiting period under the HSR Act shall
have expired or early termination shall have been granted with respect to the
HSR Notifications.

 

6.7           Authorized Shares.  As a condition to the Second Closing, the
Company’s Stockholders shall have approved an increase in the Company’s
authorized Common Stock
or the Company shall otherwise have a sufficient number of Shares of authorized
but unissued Shares of Common Stock so that the Company is able to consummate
the Second Closing in full.

 

6.8           No Prohibition.  Neither the consummation nor
the performance of the acquisition of the Shares by the Buyers or the
Conversion Shares by the Note Holders will materially contravene, or conflict
with, or result in a material violation of (a) any applicable Legal
Requirement, or (b) any Legal Requirement that has been published,
introduced, or otherwise proposed by or before any Governmental Body.

 

15

 

6.9           Fairness Opinion.  The Company shall have received a written
opinion from a reputable third party financial advisor reasonably satisfactory
to the Company and the Buyers with respect to the fairness from a financial
point of view to the Company’s shareholders of the Per Share Price.

 

ARTICLE 7

CONDITIONS TO THE BUYERS’ OBLIGATION

 

The
obligation of the Buyers hereunder to purchase the Shares at the Initial
Closing and the Second Closing is subject to the satisfaction, at or before the
Initial Closing Date and the Second Closing Date, as applicable, of each of the
following conditions (except as otherwise noted therein), provided that these
conditions are for the Buyers’ sole benefit and may be waived by the Buyers at
any time in their sole discretion:

 

7.1           Delivery
of Transaction Documents; Issuance of Shares and Conversion Shares; Payment of
Note Interest.  The Company shall
have executed and delivered the Transaction Documents to the Buyers and shall
deliver the transfer instructions to the transfer agent for the Company’s
Common Stock to issue (i) certificates in the name of each Buyer
representing the Shares being purchased by such Buyer, and (ii) certificates
in the name of each Note Holder representing the Conversion Shares being issued
to such Note Holder.  The Company shall
deliver a copy of the transfer instructions to the Buyers and the Note Holders
at the Initial Closing and the Second Closing, as applicable.  At or prior to the Initial Closing, the
Company shall have delivered cash payments to the applicable Note Holders for
all accrued and unpaid interest on the Notes.

 

7.2           Representations and
Warranties.  The
representations and warranties of the Company shall be true and correct in all
material respects (provided, however, that such qualification shall only apply
to representations or warranties not otherwise qualified by materiality) as of
the date when made and as of the Initial Closing Date and the Second Closing
Date, as applicable, as though made at such time (except for representations
and warranties that speak as of a specific date) and the Company shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Company at or prior to the Initial Closing Date and the
Second Closing Date, as applicable.

 

7.3           Consents.  Any consents or
approvals required to be secured by the Company for the consummation of the
transactions contemplated by the Transaction Documents shall have been obtained
and shall be reasonably satisfactory to the Buyers.

 

7.4           Litigation.  No Action shall have been enacted, entered,
promulgated or endorsed by or in any court or governmental authority of
competent jurisdiction or any self-regulatory organization having authority
over the matters contemplated hereby which prohibits the consummation of any of
the transactions contemplated by this Agreement.

 

7.5           Opinion.  The Buyers purchasing shares in the Initial
Closing and the Note Holders shall have received an opinion of the Company’s
counsel, dated as of the Initial Closing Date with respect to the issuance and
sale of the Shares at the Initial Closing and the issuance of the Conversion
Shares, in form, scope and substance reasonably satisfactory to the Buyers and
the Note Holders with respect to the matters set forth in Exhibit A
attached hereto.  The Buyers purchasing
shares in the Second Closing shall have received an opinion of the Company’s
counsel, dated as of the Second Closing Date with respect to the issuance and
sale of the Shares at the Second Closing, in form, scope and substance
reasonably satisfactory to the Buyers with respect to the matters set forth in Exhibit A
attached here (other than the matters relating to the issuance of the
Conversion Shares).

 

16

 

7.6           No Material
Adverse Change.  There shall
have been no material adverse change in the assets, liabilities (contingent or
otherwise), affairs, business, operations, prospects or condition (financial or
otherwise) of the Company prior to the Initial Closing Date and the Second
Closing Date, as applicable.

 

7.7           HSR Notification. 
With respect to the Second Closing, the waiting period under the HSR Act
shall have expired or early termination shall have been granted with respect to
the HSR Notifications.

 

7.8           Authorized Shares.  As a condition to the Second Closing, the
Company’s Stockholders shall have approved an increase in the Company’s
authorized Common Stock
or the Company shall otherwise have a sufficient number of Shares of authorized
but unissued Shares of Common Stock so that the Company is able to consummate
the Second Closing in full.

 

7.9           No Prohibition.  Neither the consummation nor
the performance of the acquisition of the Shares by the Buyers and the
Conversion Shares by the Note Holders hereunder will materially contravene, or
conflict with, or result in a material violation of (a) any applicable
Legal Requirement, or (b) any Legal Requirement that has been published,
introduced, or otherwise proposed by or before any Governmental Body.

 

7.10         Fairness Opinion.  The Company shall have received a written
opinion from a reputable third party financial advisor reasonably satisfactory
to the Company and the Buyers with respect to the fairness from a financial
point of view to the Company’s shareholders of the Per Share Price.

 

ARTICLE 8

TERMINATION

 

8.1           Termination Provisions.  This Agreement may be terminated at any time
before the Initial Closing Date or the Second Closing Date:

 

a.     By mutual consent of the Company and the Buyers;

 

b.     By either the Company or the Buyers, as applicable,
in the event that any of the conditions precedent to their respective
obligations to consummate the transactions contemplated hereby as set forth in Article 6
or Article 7, through no fault of the terminating party, have not
been met and satisfied and have become impossible of fulfillment;

 

c.     By either the Company or the Buyers if either the
Initial Closing Date or the Second Closing Date does not occur by May 31,
2008  or such later date as the
Company and the Buyers may mutually agree upon (provided that the terminating
party is not then in material breach of any representation, warranty, covenant
or other agreement contained herein);

 

d.     By the Buyers if there has been any material breach
of any representation, warranty, agreement or covenant in this Agreement by the
Company, which breach cannot be or has not been cured within thirty (30) days
after giving written notice thereof to the Company; and

 

e.     By the Company if there has been any material breach
of any representation, warranty, agreement or covenant in this Agreement by any
of the Buyers, which breach cannot be or has not been cured within thirty (30)
days after giving written notice thereof to the Buyers.

 

8.2           Effect of Termination.  Upon the termination of this Agreement
pursuant to the terms hereof, this Agreement will be void and neither party
will have any further liability obligations with respect hereof, except as
otherwise provided in this Agreement or except and to the extent termination
results from the intentional breach by a party of any of its representations,
warranties or covenants hereunder.

 

17

 

ARTICLE 9

INDEMNIFICATION

 

9.1           Indemnification
by the Company.   The Company agrees
to indemnify each Buyer and its affiliates and hold each Buyer and its
affiliates harmless from and against any and all liabilities, losses, damages,
costs and expenses of any kind (including, without limitation, the reasonable
fees and disbursements of such Buyer’s counsel in connection with any
investigative, administrative or judicial proceeding), which may be incurred by
such Buyer or such affiliates as a result of any claims made against such Buyer
or such affiliates by any person that relate to or arise out of (i) any
breach by the Company of any of its representations, warranties or covenants
contained in this Agreement or in the Transaction Documents (other than the
Registration Rights Agreement, which contains separate indemnification
provisions), or (ii) any litigation, investigation or proceeding
instituted by any person with respect to this Agreement or the Shares
(excluding, however, any such litigation, investigation or proceeding which
arises solely from the acts or omissions of such Buyer or its affiliates).

 

9.2           Notification.  Any person entitled to
indemnification hereunder (“Indemnified Party”) will (i) give prompt notice to
the Company, of any third party claim, action or suit with respect to which it
seeks indemnification (the “Claim”) (but omission of such notice shall not relieve
the Company from liability hereunder except to the extent it is actually
prejudiced by such failure to give notice), specifying in reasonable detail the
factual basis for the Claim, the amount thereof, estimated in good faith, and
the method of computation of the Claim, all with reasonable particularity and
containing a reference to the provisions of this Agreement in respect of which such
indemnification is sought with respect to the Claim, and (ii) unless in
such Indemnified Party’s reasonable judgment a conflict of interest may exist
between such Indemnified Party and the Company with respect to such claim,
permit the Company to assume the defense of the Claim with counsel reasonably
satisfactory to the Indemnified Party. 
The Indemnified Party shall cooperate fully with the Company with
respect to the defense of the Claim and, if the Company elects to assume
control of the defense of the Claim, the Indemnified Party shall have the right
to participate in the defense of the Claim at its own expense.  If the Company does not elect to assume
control or otherwise participate in the defense of the Claim, then the
Indemnified Party may defend through counsel of its own choosing.  If such defense is not assumed by the
Company, the Company will not be subject to any liability under this Agreement
or otherwise for any settlement made without its consent (but such consent will
not be unreasonably withheld or delayed). If the Company elects not to or is
not entitled to assume the defense of a Claim, it will not be obligated to pay
the fees and expenses of more than one counsel for all Indemnified Parties with
respect to the Claim, unless an actual conflict of interest exists between such
Indemnified Party and any other of such Indemnified Parties with respect to the
Claim, in which event the Company will be obligated to pay the fees and
expenses of such additional counsel or counsels.

 

ARTICLE 10

GOVERNING LAW; MISCELLANEOUS

 

10.1         Governing
Law.  This Agreement shall be
enforced, governed by and construed in accordance with the laws of the State of
Illinois applicable to agreements made and to be performed entirely within such
state, without regard to the principles of conflict of laws.  The parties hereto hereby submit to the
exclusive jurisdiction of the United States Federal Courts located in the State
of Illinois  with respect to any
dispute arising under this Agreement, the agreements entered into in connection
herewith or the transactions contemplated hereby or thereby.  All parties irrevocably waive the defense of
an inconvenient forum to the maintenance of such suit or proceeding.  All parties further agree that service of
process upon a party mailed by first class mail shall be deemed in every
respect effective service of process upon the party in any such suit or
proceeding.  Nothing herein shall affect
any party’s right to 

 

18

 

serve process in any other manner permitted by law. All parties agree
that a final non-appealable judgment in any such suit or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on such judgment
or in any other lawful manner.  The party
which does not prevail in any dispute arising under this Agreement shall be
responsible for all reasonable fees and expenses, including reasonable
attorneys’ fees, incurred by the prevailing party in connection with such
dispute.

 

10.2         Counterparts; Electronic
Signatures.  This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original but all of which shall constitute one and the same agreement
and shall become effective when counterparts have been signed by each party and
delivered to the other party.  This
Agreement, once executed by a party, may be delivered to the other party hereto
by electronic transmission of a copy of this Agreement bearing the signature of
the party so delivering this Agreement.

 

10.3         Headings.  The headings of this Agreement are for
convenience of reference only and shall not form part of, or affect the
interpretation of, this Agreement.

 

10.4         Severability.  In the event that any provision of this
Agreement is invalid or unenforceable under any applicable statute or rule of
law, then such provision shall be deemed inoperative to the extent that it may
conflict therewith and shall be deemed modified to conform to such statute or rule of
law.  Any provision hereof which may
prove invalid or unenforceable under any law shall not affect the validity or
enforceability of any other provision hereof.

 

10.5         Entire Agreement; Amendments.  This Agreement and the instruments referenced
herein contain the entire understanding of the parties with respect to the matters
covered herein and therein and supersede all previous understandings or
agreements between the parties with respect to such matters.  No provision of this Agreement may be waived
other than by an instrument in writing signed by the party to be charged with
enforcement.  The provisions of this
Agreement may be amended only by a written instrument signed by the Company and
the Buyers.

 

10.6         Notices.  Any notices required or permitted to be given
under the terms of this Agreement shall be sent by certified or registered mail
(return receipt requested) or delivered personally or by courier (including a
recognized overnight delivery service) or by facsimile and shall be effective
five days after being placed in the mail, if mailed by regular United States mail,
or upon receipt, if delivered personally or by courier (including a recognized
overnight delivery service) or by facsimile, in each case addressed to a
party.  The addresses for such
communications shall be:

 

If to the Company:

 

Broadwind Energy, Inc.

47 E. Chicago Avenue, Suite 332

Naperville, IL 60540

Telephone: (630) 637-0315

Facsimile: 
(630) 637-8472

Attention: 
Mr. J. Cameron Drecoll

 

19

 

With copy to:

 

Fredrikson & Byron, P.A.

4000 U.S. Bank Plaza

200 South Sixth Street

Minneapolis, MN  55402-1425

Telephone: (612) 492-7000

Facsimile:  (612) 492-7077

Attention:  Daniel A. Yarano

 

If to the Buyers or a Note
Holder:

 

Tontine Capital Partners, L.P.

55 Railroad Avenue, 1st
Floor

Greenwich, Connecticut 06830

Attention: Mr. Jeffrey L. Gendell

Telephone: (203) 769-2000

Facsimile: (203) 769-2010

 

With copy to:

 

Barack Ferrazzano Kirschbaum & Nagelberg
LLP

200 W. Madison Street, Suite 3900

Chicago, Illinois  60606

Attention: Sarah M. Bernstein, Esq.

Telephone:        (312) 984-3100

Facsimile:         (312) 984-3150

 

Each party shall provide
notice to the other party of any change in address.

 

10.7         Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and assigns.  The Company shall not assign this Agreement
or any rights or obligations hereunder without the prior written consent of the
Buyers.

 

10.8         Third Party Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and
is not for the benefit of, nor may any provision hereof be enforced by, any
other person.

 

10.9         Publicity.  The Company and the Buyers shall have the
right to review for a reasonable period of time before issuing any press
releases or any other public statements with respect to the transactions
contemplated hereby; provided, however, that the Company shall be entitled,
without the prior approval of the Buyers, to make any press release with
respect to such transactions as is required by applicable law and regulations
(although the Buyers shall be consulted by the Company in connection with any
such press release prior to its release and shall be provided with a copy
thereof and be given an opportunity to comment thereon).  Notwithstanding the foregoing, the Company
shall file with the SEC a Form 8-K disclosing the transactions herein
within four (4) business days of each of the Initial Closing Date and the
Second Closing Date and attach the relevant agreements and instruments thereto,
and the Buyers and the Note Holders may make such filings as may be required
under Section 13 and Section 16 of the 1934 Act.

 

20

 

10.10       Further
Assurances.  Each party shall do and
perform, or cause to be done and performed, all such further acts and things,
and shall execute and deliver all such other agreements, certificates,
instruments and documents, as the other party may reasonably request in order
to carry out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.

 

10.11       No
Strict Construction.  The language
used in this Agreement will be deemed to be the language chosen by the parties
to express their mutual intent, and no rules of strict construction will
be applied against any party.

 

10.12       Rights
Cumulative.  Each and all of the
various rights, powers and remedies of the parties shall be considered
cumulative with and in addition to any other rights, powers and remedies which
or the Transaction Documents such parties may have at law or in equity in the
event of the breach of any of the terms of this Agreement.  The exercise or partial exercise of any
right, power or remedy shall neither constitute the exclusive election thereof
nor the waiver of any other right, power or remedy available to such party.

 

10.13       Survival.  Any covenant or agreement in this Agreement
required to be performed following the closing of the transactions contemplated
herein shall survive the Initial Closing Date and the Second Closing Date, as
applicable. Without limitation of the foregoing, the respective representations
and warranties given by the parties hereto shall survive the consummation of
the transactions contemplated herein, but only for a period of the earlier of (i) three
(3) years following the Second Closing Date (or if the Second Closing does
not occur, following the Initial Closing Date) and (ii) the applicable
statute of limitations with respect to each representation and warranty, and
thereafter shall expire and have no further force and effect.

 

10.14       Knowledge.  The term “knowledge of the Company” or any
similar formulation of knowledge shall mean, the actual knowledge after due
inquiry of an executive officer of the Company.

 

21

 

IN
WITNESS WHEREOF, the undersigned have caused this Agreement to be duly executed
as of the date first above written.

 

	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  BROADWIND ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /s/
  J. Cameron Drecoll

  
	
   

  	
   

  	
  J. Cameron Drecoll, Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BUYERS:

  
	
   

  	
   

  
	
   

  	
  TONTINE CAPITAL PARTNERS,
  L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Tontine Capital
  Management, L.L.C., its general

  partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
       /s/
  Jeffrey L. Gendell

  
	
   

  	
   

  	
  Jeffrey L. Gendell, as
  managing member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TONTINE PARTNERS, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Tontine Management L.L.C.,
  its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
       /s/
  Jeffrey L. Gendell

  
	
   

  	
   

  	
  Jeffrey L. Gendell, as
  managing member

  
					

 

 

	
   

  	
  TONTINE OVERSEAS FUND, LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Tontine Overseas Associates, L.L.C., its

  
	
   

  	
   

  	
  investment advisor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
       /s/
  Jeffrey L. Gendell

  
	
   

  	
   

  	
   

  	
  Jeffrey L. Gendell, as managing member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TONTINE 25 OVERSEAS MASTER FUND, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Tontine Capital Management, L.L.C., its general

  partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
       /s/
  Jeffrey L. Gendell

  
	
   

  	
   

  	
   

  	
  Jeffrey L. Gendell, as managing member

  

 

A-22

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