Document:

Exhibit 10.1

Exhibit 10.1

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement (this “Agreement”) is entered into as of October 31,
2011 by and between World Energy Solutions, Inc., a Delaware corporation (the “Buyer”), and
GSE Consulting, LP, a Texas limited partnership (the “Seller”).

This Agreement contemplates a transaction in which the Buyer will purchase substantially all
of the assets and assume none of the liabilities except as described below of the Seller.

Capitalized terms used in this Agreement shall have the meanings ascribed to them in
Article VII.

In consideration of the representations, warranties and covenants herein contained, the
Parties agree as follows.

ARTICLE I

THE ASSET PURCHASE

1.1 Purchase and Sale of Assets.

(a) Upon and subject to the terms and conditions of this Agreement, including, without
limitation, the payment obligations set forth in Section 1.4, the Buyer shall purchase from
the Seller, and the Seller shall sell, transfer, convey, assign and deliver to the Buyer, at the
Closing, for the consideration specified below in this Article I, all right, title and
interest in, to and under the Acquired Assets, including all right, title and interest in, to, and
under the Supplier Agreements.

(b) Notwithstanding the provisions of Section 1.1(a), the Acquired Assets shall not
include the Excluded Assets.

1.2 Assumption of Liabilities.

(a) Upon and subject to the terms and conditions of this Agreement, the Buyer shall assume and
become responsible for, from and after the Closing, only the Assumed Liabilities.

(b) Notwithstanding the terms of Section 1.2(a) or any other provision of this
Agreement to the contrary, the Buyer shall not assume or become responsible for, and the Seller
shall remain liable for, the Retained Liabilities.

1.3 Purchase Price. The Purchase Price to be paid in accordance with Section
1.4 by the Buyer for the Acquired Assets at the Closing will consist of:

(a) $5,400,000 in cash; and

(b) the issuance, within three (3) days following the Closing, of 1,000,000 Shares at the
NASDAQ Price.

 

 

 

Notwithstanding the foregoing, up to an additional $4,500,000 in cash will be paid to Seller
in accordance with the terms of Section 1.7 below.

1.4 Payment of Purchase Price. The Purchase Price to be paid by Buyer shall be
payable as set forth in this Section 1.4.

On the Closing Date, the Buyer shall pay the Purchase Price as follows:

(i) Buyer shall pay Three Million Eight Hundred Sixty-Nine Thousand Eight Hundred Seventy-One
Dollars and Thirty-Two Cents ($3,869,871.32) by wire transfer of immediately available funds to an
account designed in writing by the Seller;

(ii) Buyer shall pay One Million Five Hundred Thirty Thousand One Hundred Twenty-Eight Dollars
and Sixty-Eight Cents ($1,530,128.68) by wire transfer of immediately available funds to Encore
Bank for the purposes of paying Seller’s outstanding principal loan amount and interest; and

(iii) Buyer shall issue to Seller 1,000,000 Shares.

1.5 The Closing.

(a) The Closing shall take place remotely upon the execution and delivery of this Agreement by
all of the parties hereto. All transactions at the Closing shall be deemed to take place
simultaneously, and no transaction shall be deemed to have been completed and no documents or
certificates shall be deemed to have been delivered until all other transactions are completed and
all other documents and certificates are delivered.

(b) At the Closing:

(i) the Seller shall execute and deliver to the Buyer a bill of sale in substantially the form
attached hereto as Exhibit A (the “Bill of Sale”) in order to effect the sale,
transfer, conveyance and assignment to the Buyer of valid ownership of the Acquired Assets, save
and except for all right, title and interest in, to and under the Supplier Agreements;

(ii) each of Buyer and Seller shall execute and deliver to the other Party an instrument of
assignment and assumption agreement in substantially the form attached hereto as Exhibit B
with respect to all Assigned Contracts in order to effect the assumption by the Buyer of the
Assumed Liabilities arising out of any Assigned Contracts (the “Assignment and Assumption
Agreement”);

(iii) the Buyer shall pay to the Seller, payable by wire transfer or other delivery of
immediately available funds to an account designated by the Seller, the portion of the Purchase
Price set forth in Section 1.4(a)(i);

 

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(iv) the Buyer shall pay to Encore Bank, payable by wire transfer or other delivery of
immediately available funds to an account designated by Encore Bank, the portion of the Purchase
Price set forth in Section 1.4(a)(ii); and

(v) the Buyer and the Seller shall execute and deliver to each other a cross-receipt
evidencing the transactions referred to above.

1.6 Allocation. The Buyer and the Seller agree to allocate the Purchase Price (and
all other capitalizable costs) among the Acquired Assets and the non-solicitation and
non-competition covenants set forth in Sections 4.4 and 4.5 for all purposes
(including financial accounting and tax purposes) in accordance with the allocation schedule
attached hereto as Schedule 1.6. Buyer and Seller agree to use the allocations determined
pursuant to this Section 1.6 for all tax purposes, including without limitation, those
matters subject to Section 1060 of the Code, and the Treasury regulations promulgated thereunder.
Buyer and Seller shall prepare and submit to the other for review their IRS Forms 8594 within
ninety (90) days after the Closing. Each party shall have thirty (30) days to complete its review.

1.7 Earnout. For clarification, the Earnout Payments below are individual payments
for each period, one of which is based on Annualized New Bookings and the other of which is based
upon Renewal Rate. The Earnout Payment for each applicable period shall be the amount
corresponding to the Annualized New Bookings or Renewal Rate, as the case may be, as set forth in
the applicable tables below. For example, if the Annualized New Bookings were $400,000 and the
Renewal Rate was 84%, each for the period from November 1, 2011 and October 31, 2012 the 2012
Earnout Payment shall be $250,000, representing $0 attainment for Annualized New Bookings below
$500,000 and $250,000 attainment for Renewal rate percentage achievement.

(a) 2011 Earnout. The Seller will be paid for Buyer, Seller or any Affiliate of Buyer
achieving Annualized New Bookings and Renewal Rate milestones based on the following (the “2011
Earnout Payment”):

	 	 	 	 	 	 	 
	 	 	Earnout for	 	 	 	 
	Amount of Annualized	 	Annualized	 	 	 	Earnout for Renewal
	New Bookings	 	New Bookings	 	Renewal Rate	 	Rates
	$50,000+
	 	$1,500,000
	 	10%+
	 	$500,000

The measurement period for the 2011 Earnout Payment will be from October 1, 2011 through December
31, 2011. Payment of all undisputed portions of the 2011 Earnout Period achieved shall be made on
or before January 31, 2012 by wire transfer or other delivery of immediately available funds to an
account designated by the Seller. For the avoidance of doubt, the calculation of the 2011 Earnout
Payment shall include Annualized New Bookings and Renewal Rate realized by Seller, Buyer or any
Affiliate of Buyer starting on October 1, 2011 through the Closing Date.

 

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(b) 2012 Earnout. The Seller will be paid for Buyer or any Affiliate of Buyer
achieving Annualized New Bookings and Renewal Rate milestones based on the following (the “2012
Earnout Payment”):

	 	 	 	 	 	 	 
	 	 	Earnout for	 	 	 	 
	Amount of Annualized	 	Annualized	 	 	 	Earnout for Renewal
	New Bookings	 	New Bookings	 	Renewal Rate	 	Rates
	$0 – $499,999
	 	$0
	 	0% to 49.99%
	 	$0
	$500,000 – $999,999
	 	$500,000
	 	50%+
	 	$250,000
	$1,000,000
	 	$1,250,000	 	 	 	 

The measurement period for the 2012 Earnout Payment will be from November 1, 2011 through October
31, 2012. Payment of all undisputed portions of the 2012 Earnout Payment shall be made on or
before January 15, 2013 by wire transfer or other delivery of immediately available funds to an
account designated by the Seller.

(c) 2013 Earnout. The Seller will be paid for Buyer or any Affiliate of Buyer
achieving Annualized New Bookings and Renewal Rate milestones based on the following (the “2013
Earnout Payment,” and together with each of the 2011 Earnout Payments and the 2012 Earnout
Payments, each an “Earnout Payment,” and collectively, the “Earnout Payments”):

	 	 	 	 	 	 	 
	 	 	Earnout for	 	 	 	 
	Amount of Annualized	 	Annualized	 	 	 	Earnout for Renewal
	New Bookings	 	New Bookings	 	Renewal Rate	 	Rates
	$0 – $999,999
	 	$0
	 	0% to 49.99%
	 	$0
	$1,000,000+
	 	$750,000
	 	50%+
	 	$250,000

The measurement period for the 2013 Earnout Payment will be from November 1, 2012 through October
31, 2013. Payment of all undisputed portions of the 2013 Earnout Payment shall be made on or
before January 15, 2014 by wire transfer or other delivery of immediately available funds to an
account designated by the Seller.

The 2012 Earnout Payment and the 2013 Earnout Payment shall be paid on the applicable due dates
based on the earnout achieved plus accrued interest in the amount of four percent (4%) simple
annual interest calculated from the Closing Date only on the portion of the earnout achieved.

(d) For purposes of this Section 1.7:

(i) The calculation of Annualized New Bookings and Renewal Rate shall include all amounts due
and payable pursuant to the Supplier Agreements during the applicable measurement period, whether
or not such amounts are invoiced, and/or received by Buyer on or prior to the expiration of the
applicable measurement period;

(ii) At all times prior to the expiration of the measurement period for the 2013 Earnout
Payment, Buyer shall use Commercially Reasonable Efforts to (i) maintain the staffing levels,
marketing, billing, invoice, collection and relationship management procedures as conducted by
Seller in the Ordinary Course of Business immediately prior to the Closing Date, (ii) not
unreasonably delay any marketing initiatives, execution of new Supplier Agreements, or any response
to energy suppliers with respect to the Supplier Agreements, (iii) not modify, terminate, grant
concessions, or amend in any material way the payment terms of, or breach, any
Supplier Agreement, (iv) not divert any new or current customers or suppliers to any Affiliate
of Buyer or any third party to provide the services currently provided by Seller in the Ordinary
Course of Business, or (v) take any other act for the purposes, directly or indirectly, of
precluding Seller from receiving the full benefit of the Earnout Payments; and

 

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(iii) For purposes of calculating the applicable Earnout Payments, in the event of a breach by
Buyer of its obligations under Section 1.7(d)(ii), Seller shall be deemed to have achieved
the Annualized New Bookings and Renewal Rate necessary to achieve the Earnout Payments with respect
to the measurement period affected by the events set forth in (A).

(e) As promptly as possible, but in no event later than each applicable payment date of each
Earnout Payment, the Buyer shall deliver to Seller a written statement setting forth Buyer’s
calculation of the applicable Earnout Payment together with reasonable documentation supporting the
calculation thereof (the “Earnout Statement”). Within thirty (30) days after receipt of
such Earnout Statement (the “Earnout Objection Period”), Seller must notify Buyer of any
objections to Buyer’s determinations of the applicable Earnout Payment, providing in reasonable
detail the basis for such objections. In the event that Seller does not timely or properly notify
Buyer within the Earnout Objection Period that Seller has any objections to such statements or
Buyer’s calculation of the applicable Earnout Payment shall be final and binding hereunder. In the
event that Seller does notify Buyer, within the Earnout Objection Period, that Seller has any such
objection, then Buyer and Seller shall attempt to resolve such disputed items. In the event Seller
and Buyer are unable to resolve the disputed items within thirty (30) days after receipt by Buyer
of Seller’s notice of dispute, the Parties’ respectively engaged independent certified public
accountants shall attempt to resolve the disputed items. In the event that such accounting firms
are unable to resolve such disputed items within sixty (60) days of Seller’s notice of dispute,
such disputed items shall be referred to such independent accounting firm as mutually agreed upon
by Buyer and Seller or, in the absence of such agreement such independent accounting firm as Seller
and Buyer’s respective accounting firms jointly appoint to finally resolve such disputed items
(provided that such firm has not within the preceding thirty-six (36) months had a, and does not
have a current or prospective, business relationship with Buyer or Seller, or any of their
respective Affiliates). The determination of such accounting firm shall be made as promptly as
possible and shall be final and binding upon the parties absent demonstrable error acknowledged by
such accounting firm; provided, however, that in no event shall the determination
of such accounting firm be less than the initial determination of the applicable Earnout Payment
calculated by Buyer set forth in the Earnout Statement. Seller and Buyer each shall be permitted
to submit such data and information to such accounting firm as such party deems appropriate. The
parties shall share responsibility for the out-of-pocket expenses and fees incurred in connection
with resolving such disputed items as follows: (A) if the accounting firm’s determination results
in additional amounts payable to Seller as Earnout Payment, Buyer will be responsible for all of
the fees and expenses of the accounting firm; and (B) if the accounting firm’s determination does
not result in additional amounts payable to Seller as Earnout Payment, Seller will be responsible
for all of the fees and expenses of the accounting firm. Any additional amounts payable to Seller
as an Earnout Payment determined by this Section 1.7(e) shall be made within three (3)
business days after the applicable Earnout Payment has been finally determined in accordance with
this Section 1.7(e) by wire transfer or other delivery of immediately available funds to an
account designated by the Seller.

 

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1.8 Post Closing Adjustment.

(a) The calculation of the Purchase Price was based, in part, on the Expected Backlog in the
amount of $4,322, 812.00. “Expected Backlog” means the amounts expected to be received by
Buyer for the period (the “True Up Period”) commencing on November 1, 2011 and ending on
January 31, 2013 (the “True Up Date”) as commodity brokerage fees or otherwise pursuant to
the Supplier Agreements in force for completed procurements as of November 1, 2011 (the
“Backlog Contracts”) with respect to expected transactions between energy suppliers and end
users of energy (customers) assuming end users consume energy at projected levels. Within sixty
(60) days following the True Up Date, Buyer shall prepare and deliver to Seller a final
determination of the actual amounts payable to Buyer as commodity brokerage fees or otherwise
pursuant to the Backlog Contracts for the True Up Period (the “Final Backlog”) and, based
thereon, calculate the amount payable to Buyer or Seller, if any, pursuant to Section
1.8(c) (the “True Up Amount”). Seller shall deliver with the payment of the True Up
Amount such a written statement it has prepared to support each such determination and Seller shall
be entitled to review any working papers, trial balances and similar materials relating to such
statements prepared by or on behalf of Buyer (the “Backlog Statement”).

(b) For purposes of this Section 1.8:

(i) The Final Backlog shall include all amounts due and payable pursuant to the Backlog
Contracts during the True Up Period, whether or not such amounts are invoiced by Buyer on or prior
to the True Up Date;

(ii) At all times during the True Up Date Period, Buyer shall use Commercially Reasonable
Efforts to (i) maintain the billing, invoice, collection and relationship management procedures as
conducted by Seller in the Ordinary Course of Business immediately prior to the Closing Date, (ii)
shall not unreasonably delay of any collection activities, the submission of any invoice, or any
response to energy suppliers with respect to the Backlog Contracts, and (iii) shall not modify,
terminate, grant concessions, or amend in any material way the payment terms of any Backlog
Contract; and

(iii) For purposes of calculating the True Up Amount, in the event of a breach by Buyer of its
obligations under Section 1.8(b)(ii), Seller shall be deemed to have achieved the Expected
Backlog with respect to any Backlog Contract affected by the events set forth in (A).

(c) Within thirty (30) days after receipt of such statements and schedules (the “Backlog
Objection Period”), Seller must notify Buyer of any objections to Buyer’s determinations of the
Final Backlog and True Up Amount, providing in reasonable detail the basis for such objections. In
the event that Seller does not timely or properly notify Buyer within the Backlog Objection Period
that Seller has any objections to such statements or Buyer’s calculation of the final True Up
Amount, then the Final Backlog and True Up Amount shall be final and binding hereunder. In the
event that Seller does notify Buyer, within the Backlog Objection Period, that Seller has any such
objection, then Buyer and Seller shall attempt to resolve such disputed items. In the event Seller
and Buyer are

 

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unable to resolve the disputed items within thirty (30) days after receipt by Buyer
of Seller’s notice of dispute, the parties’ respectively engaged independent certified public accountants shall attempt to resolve the
disputed items. In the event that such accounting firms are unable to resolve such disputed items
within sixty (60) days of Seller’s notice of dispute, such disputed items shall be referred to such
independent accounting firm as mutually agreed upon by Buyer and Seller or, in the absence of such
agreement such independent accounting firm as Seller and Buyer’s respective accounting firms
jointly appoint to finally resolve such disputed items (provided that such firm has not within the
preceding thirty-six (36) months had a, and does not have a current or prospective, business
relationship with Buyer or Seller, or any of their respective Affiliates. The determination of
such accounting firm shall be made as promptly as possible and shall be final and binding upon the
parties absent demonstrable error acknowledged by such accounting firm. Seller and Buyer each shall
be permitted to submit such data and information to such accounting firm as such party deems
appropriate. The parties shall share responsibility for the out-of-pocket expenses and fees
incurred in connection with resolving such disputed items as follows: (A) if the accounting firm’s
determination results in additional amounts payable to Seller as True Up Amount, Buyer will be
responsible for all of the fees and expenses of the accounting firm; and (B) if the accounting
firm’s determination does not result in additional amounts payable to Seller as True Up Amount,
Seller will be responsible for all of the fees and expenses of the accounting firm.

(d) If the Final Backlog for the True Up Period is less than $4,106,671, representing 95% of
the Expected Backlog, then Buyer shall retain from the amounts payable to Seller as the 2013
Earnout Payment, an amount equal to the difference between (i) $4,106,671 of the Expected Backlog
and (ii) the Final Backlog. For illustrative purposes only, if the Expected Backlog is $4,322,812
and the Final Backlog is $4,020,215 then Buyer shall retain $86,456 [($4,322,812 * .93) -
$4,020,215] of the amounts to be paid as earned under the 2013 Earnout Payment. If the Final
Backlog received is greater than $4,538,953, representing 105% of Expected Backlog, then Buyer
would remit to Seller, within three (3) business days of Buyer’s determination of the Final
Backlog, by wire transfer or other delivery of immediately available funds to an account designated
by the Seller, an amount equal to the difference between (i) the Final Backlog and (ii) 105% of the
Expected Backlog on or prior to April 30, 2013, net of any commissions due to referral partners or
employees. For illustrative purposes only, if the Expected Backlog is $4,322,812 and the Final
Backlog is $4,625,409, representing 107% of the Expected Backlog, then Buyer shall remit to Seller
$86,456 [$4,625,409 — ($4,322,812 * 1.07)].

1.9 Further Assurances. At any time and from time to time after the Closing, at the
reasonable request of a Party and without further consideration, the other Party shall execute and
deliver such other instruments of sale, transfer, conveyance and assignment and take such actions
as the applicable Party may reasonably request to more effectively transfer, convey and assign to
the Buyer, to confirm the Buyer’s rights to, title in and ownership of, the Acquired Assets and to
place the Buyer in actual possession and operating control thereof, and to confirm Buyer’s
assumption of the Assumed Liabilities.

1.10 Withholding. Notwithstanding any other provision of this Agreement, the Buyer
shall be entitled to deduct and withhold from the payments to be made pursuant to this Agreement
such amounts as it reasonably determines after consultation with its Tax advisors that it is
required to deduct and withhold with respect to the making of such payments under the Code or any
other applicable provision of law and to collect Forms W-8 or W-9, as applicable, or similar
information from the Seller, the Partners and any other recipients of payments hereunder. To
the extent that amounts are so withheld by the Buyer, such withheld amounts shall be treated for
all purposes of this Agreement as having been paid to the recipient in respect of which such
deduction and withholding was made by the Buyer.

 

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ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE SELLER

The Seller represents and warrants to the Buyer that, except as set forth in the Disclosure
Schedule, the statements contained in this Article II are true and correct as of the
Closing, except to the extent such representations and warranties are specifically made as of a
particular date (in which case such representations and warranties were true and correct as of such
date). The Disclosure Schedule shall be arranged in sections and subsections corresponding to the
numbered and lettered sections and subsections contained in this Article II. With respect to each
such disclosure of the Disclosure Schedule, notwithstanding any reference to a specific section,
all such information shall be deemed to qualify all other sections, where applicable, and not just
such section.

2.1 Organization, Qualification and Corporate Power. The Seller is a limited
partnership duly organized, validly existing and in corporate and tax good standing under the laws
of the State of Texas. The Seller is duly qualified to conduct business and is in good standing
(including tax good standing) under the laws of each jurisdiction listed in Section 2.1 of
the Disclosure Schedule, which jurisdictions constitute the only jurisdictions in which the nature
of the Seller’s businesses or the ownership or leasing of its properties requires such
qualification, except where the failure to be so qualified, authorized or in good standing would
not reasonably be expected to have a Seller Material Adverse Effect. The Seller has all requisite
power and authority to carry on the businesses in which it is engaged and to own and use the
properties owned and used by it. The Seller has furnished to the Buyer complete and accurate
copies of its organizational and operating documents and agreements (including without limitation
its limited partnership agreement) and the Seller is not in default under or in violation of any
provision of such documents and agreements, except where such default or violation would not
reasonably be expected to have a Seller Material Adverse Effect.

2.2 Capitalization. GSE Consulting GP, LLC, Glenwood Energy Partners, Ltd., and Gulf
States Energy, Inc. (the “Partners”) constitute all of the partners of the Seller. There
are no options, warrants or other instruments giving any party the right to acquire any equity
interest in the Seller. There are no outstanding agreements or commitments to which the Seller is
a party or which are binding upon the Seller providing for the redemption of any of its partnership
interests.

2.3 Authorization of Transaction.

(a) The Seller has all requisite power and authority to execute and deliver this Agreement and
the Ancillary Agreements and to perform its obligations hereunder and thereunder. The execution
and delivery by the Seller of this Agreement and the Ancillary Agreements, the performance by the
Seller of this Agreement and the Ancillary Agreements and
the consummation by the Seller of the transactions contemplated hereby and thereby have been
duly and validly authorized by all necessary action on the part of the Seller and its Partners.

 

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(b) This Agreement has been duly and validly executed and delivered by the Seller and
constitutes, and each of the Ancillary Agreements, upon its execution and delivery by the Seller
who are party thereto, will constitute, a valid and binding obligation of the Seller who are party
thereto, enforceable against the Seller who is party thereto in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
creditors’ rights and remedies generally, and subject, as to enforceability, to general principles
of equity, including principles of commercial reasonableness, good faith and fair dealing
(regardless of whether enforcement is sought in a proceeding at law or in equity).

2.4 Noncontravention. Except as set forth on Schedule 2.4, neither the
execution and delivery by the Seller of this Agreement or the Ancillary Agreements to which they
are party, nor the consummation by the Seller of the transactions contemplated hereby or thereby,
will (a) conflict with or violate any provision of the organizational and operational documents and
agreement of the Seller (including without limitation its limited liability agreement), (b) require
on the part of the Seller any notice to or filing with, or any permit, authorization, consent or
approval of, any Governmental Entity, (c) conflict with, result in a breach of, constitute (with or
without due notice or lapse of time or both) a default under, result in the acceleration of
obligations under, create in any party the right to terminate, modify or cancel, or require any
notice, consent or waiver under, any contract or instrument to which the Seller is a party or by
which the Seller is bound or to which any of their respective assets is subject, (d) result in the
imposition of any Security Interest upon any assets of the Seller or (e) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to the Seller or any of its properties
or assets, except, in each case of (a) through (c), where such breach or violation would not
reasonably be expected to have a Seller Material Adverse Effect.

2.5 Subsidiaries. Seller has no Subsidiaries. The Seller does not control directly
or indirectly or have any direct or indirect equity participation or similar interest in any
corporation, partnership, limited liability company, joint venture, trust or other business
association or entity.

2.6 Financial Statements. The Financial Statements have been prepared in a consistent,
reasonable, complete and accurate manner throughout the periods covered and fairly present in all
material respects the financial condition of the Company for the periods covered thereby,
consistent with the books and records of the Seller, except that the unaudited interim financial
statements are subject to normal and recurring year-end adjustments which will not be material in
amount or effect and do not include footnotes. Except as set forth in the Financial Statements,
the Company has no material liabilities or obligations, contingent or otherwise, other than (i)
liabilities incurred in the ordinary course of business subsequent to September 30, 2011, (ii)
obligations under contracts and commitments incurred in the Ordinary Course of Business and (iii)
any other liabilities and obligations of a type or nature, which, in all such cases, individually
and in the aggregate would not have a Seller Material Adverse Effect.

2.7 Absence of Certain Changes. Since December 31, 2010, there has occurred no event
or development which, individually or in the aggregate, has had, or could reasonably be expected to
have in the future, a Seller Material Adverse Effect.

 

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2.8 Tax Matters.

(a) The Seller has properly filed on a timely basis all material Tax Returns that it is and
was required to file, and all such Tax Returns were true, correct and complete in all material
respects. All material Taxes that the Seller is or was required by law to withhold or collect have
been withheld or collected and, to the extent required, have been properly paid on a timely basis
to the appropriate Governmental Entity. The Seller has complied with all information reporting and
back-up withholding requirements in all material respects, including maintenance of the required
records with respect thereto, in connection with amounts paid to any employee, independent
contractor, creditor or other third party, except where such non-compliance would not reasonably be
expected to have a Seller Material Adverse Effect.

(b) No examination or audit of any Tax Return of the Seller by any Governmental Entity is
currently in progress or, to the Knowledge of the Seller, threatened or contemplated. Section
2.8(b) of the Disclosure Schedule sets forth each jurisdiction (other than United States
federal) in which the Seller files, or is required to file or has been required to file a material
Tax Return or is or has been liable for material Taxes on a “nexus” basis. The Seller has not been
informed by any jurisdiction that the jurisdiction believes that the Seller was required to file
any Tax Return that was not filed.

(c) The Seller is, and has been since its inception, a limited partnership validly classified
and treated as a partnership for federal income tax purposes and has been validly treated in a
similar manner for purposes of the income Tax laws of all states in which it has been subject to
taxation.

(d) Except as set forth in Section 2.8(d) of the Disclosure Schedules, the Seller has
delivered or made available to the Buyer (i) complete and correct copies of all Tax Returns of the
Seller relating to Taxes for all Taxable periods for which the applicable statute of limitations
has not yet expired and (ii) complete and correct copies of all private letter rulings, revenue
agent reports, information document requests, notices of assessment, notices of proposed
deficiencies, deficiency notices, protests, petitions, closing agreements, settlement agreements,
pending ruling requests and any similar documents submitted by, received by or agreed to by or on
behalf of the Seller relating to Taxes for all Taxable periods for which the applicable statute of
limitations has not yet expired.

(e) The Seller has not (i) waived any statute of limitations with respect to Taxes or agreed
to extend the period for assessment or collection of any Taxes, (ii) requested any extension of
time within which to file any Tax Return, which Tax Return has not yet been filed, or (iii)
executed or filed any power of attorney relating to Taxes with any Governmental Entity.

(f) The Seller is not a party to any litigation regarding Taxes.

(g) There are no Security Interests with respect to Taxes upon any of the Acquired Assets,
other than with respect to Taxes not yet due and payable. There is no basis for the assertion of
any claim relating or attributable to Taxes.

 

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(h) None of the Acquired Assets is “tax exempt use property” within the meaning of Section
168(h) of the Code.

(i) The Seller is not bound by any Tax indemnity, Tax sharing or Tax allocation agreement.

(j) The Seller is not a “foreign person” within the meaning of Section 1445 of the Code.

2.9 Ownership and Condition of Assets.

(a) The Seller is the true and lawful owner, and has good title to, all of the Acquired
Assets, free and clear of all Security Interests, except as set forth in Section 2.9(a) of
the Disclosure Schedule. Except as set forth on Schedule 2.9(a), upon the Closing, the
Buyer will become the true and lawful owner of, and will receive good title to, the Acquired
Assets, free and clear of all Security Interests.

(b) The Acquired Assets are sufficient for the conduct of the Seller’s businesses as presently
conducted and constitute all assets used by the Seller in such businesses. Each tangible Acquired
Asset is free from material defects, has been maintained in accordance with normal industry
practice, is in good operating condition and repair (subject to normal wear and tear) and is
suitable for the purposes for which it presently is used.

(c) Section 2.9(c) of the Disclosure Schedule lists individually all Acquired Assets
of a tangible nature (other than inventories) whose book value exceeds $5,000.

2.10 Owned Real Property. The Seller does not own and has never owned any real
property.

2.11 Real Property Leases. Section 2.11 of the Disclosure Schedule lists all
Leases. The Seller has delivered to the Buyer complete and accurate copies of the Leases. With
respect to each Lease:

(a) such Lease is legal, valid, binding, enforceable and in full force and effect, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors’
rights and remedies generally, and subject, as to enforceability, to general principles of equity,
including principles of commercial reasonableness, good faith and fair dealing (regardless of
whether enforcement is sought in a proceeding at law or in equity);

(b) such Lease is assignable by the Seller to the Buyer solely with the consent or approval of
the Landlord and upon such assignment such Lease will continue to be legal, valid, binding,
enforceable and in full force and effect immediately following the Closing in accordance with the
terms thereof as in effect immediately prior to the Closing, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting creditors’ rights and remedies
generally, and subject, as to enforceability, to general principles of equity, including principles
of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is
sought in a proceeding at law or in equity);

(c) neither the Seller nor, to the Knowledge of the Seller, any other party, is in breach or
violation of, or default under, any such Lease, and no event has occurred, is pending or, to the
Knowledge of the Seller, is threatened, which, after the giving of notice, with lapse of
time, or otherwise, would constitute a breach or default by the Seller or, to the Knowledge of
the Seller, any other party under such Lease;

 

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(d) there are no disputes, oral agreements or forbearance programs in effect as to such Lease;

(e) The Seller has not assigned, transferred, conveyed, mortgaged, deeded in trust or
encumbered any interest in the leasehold or subleasehold; and

(f) to the Knowledge of the Seller, all facilities leased or subleased thereunder are supplied
with utilities and other services adequate for the operation of said facilities.

2.12 Intellectual Property.

(a) There are no Seller Registrations.

(b) Seller has no Patent Rights.

(c) Protection Measures. Seller has complied with all applicable contractual and legal
requirements pertaining to information privacy and security. No complaint relating to an improper
use or disclosure of, or a breach in the security of, any such information has been made or, to the
knowledge of the Seller, threatened against the Seller. To the knowledge of the Seller, there has
been no: (i) unauthorized disclosure of any third party proprietary or confidential information in
the possession, custody or control of the Seller or (ii) breach of the Seller’s security procedures
wherein confidential information has been disclosed to a third person.

2.13 Contracts.

(a) Section 2.13 of the Disclosure Schedule lists the following agreements (written or
oral) to which the Seller is a party as of the date of this Agreement:

(i) any agreement (or group of related agreements) for the lease of personal property from or
to third parties providing for lease payments in excess of $5,000 per annum or having a remaining
term longer than three months;

(ii) any agreement (or group of related agreements) for the purchase or sale of products or
for the furnishing or receipt of services (A) which calls for performance over a period of more
than one year, (B) which involves more than the sum of $5,000, or (C) in which the Seller has
granted manufacturing rights, “most favored nation” pricing provisions or marketing or distribution
rights relating to any products or territory or has agreed to purchase a minimum quantity of goods
or services or has agreed to purchase goods or services exclusively from a certain party;

(iii) any agreement concerning the establishment or operation of a partnership, joint venture
or limited liability company;

 

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(iv) any agreement (or group of related agreements) under which it has created, incurred,
assumed or guaranteed (or may create, incur, assume or guarantee) indebtedness (including
capitalized lease obligations) involving more than $5,000 or under which it has imposed (or may
impose) a Security Interest on any of its assets, tangible or intangible;

(v) any agreement for the disposition of any significant portion of the assets or business of
the Seller (other than sales of products in the Ordinary Course of Business) or any agreement for
the acquisition of the assets or business of any other entity (other than purchases of inventory or
components in the Ordinary Course of Business);

(vi) any agreement concerning exclusivity or confidentiality;

(vii) any employment or consulting agreement;

(viii) any agreement involving any current or former officer or partner of the Seller;

(ix) any agreement which contains any provisions requiring the Seller to indemnify any other
party (excluding indemnities contained in agreements for the purchase, sale or license of products
entered into in the Ordinary Course of Business);

(x) any agreement under which the Seller is restricted from selling, licensing or otherwise
distributing any of its technology or products, or providing services to, customers or potential
customers or any class of customers, in any geographic area, during any period of time or any
segment of the market or line of business;

(xi) any agreement which would entitle any third party to receive a license or any other right
to intellectual property of the Buyer or any of the Buyer’s Affiliates following the Closing; and

(xii) any other agreement (or group of related agreements) either involving more than $5,000
or not entered into in the Ordinary Course of Business.

(b) The Seller has delivered to the Buyer a complete and accurate copy of each agreement
listed in Section 2.13 of the Disclosure Schedule. With respect to each agreement so
listed: (i) the agreement is legal, valid, binding and enforceable and in full force and effect,
subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
creditors’ rights and remedies generally, and subject, as to enforceability, to general principles
of equity, including principles of commercial reasonableness, good faith and fair dealing
(regardless of whether enforcement is sought in a proceeding at law or in equity); (ii) for those
agreements to which the Seller is a party, the agreement is assignable by the Seller to the Buyer
without the consent or approval of any party (except as set forth in Section 2.4 of the
Disclosure Schedule) and as of the Closing will continue to be legal, valid, binding and
enforceable and in full force and effect immediately following the Closing in accordance with the
terms thereof as in effect immediately prior to the Closing, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting creditors’ rights and remedies
generally, and subject, as to enforceability, to general principles of equity, including principles
of
commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is
sought in a proceeding at law or in equity); and (iii) neither the Seller nor, to the Knowledge of
the Seller, any other party, is in breach or violation of, or default under, any such agreement,
and no event has occurred, is pending or, to the Knowledge of the Seller, is threatened, which,
after the giving of notice, with lapse of time, or otherwise, would constitute a breach or default
by the Seller or, to the Knowledge of the Seller, any other party under such agreement.

 

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2.14 Insurance. Section 2.14 of the Disclosure Schedule lists each insurance
policy (including fire, theft, casualty, comprehensive general liability, workers compensation,
business interruption, environmental, product liability, errors and omissions, professional
liability and automobile insurance policies and bond and surety arrangements) to which the Seller
is a party, all of which are in full force and effect. There is no material claim pending under
any such policy as to which coverage has been questioned, denied or disputed by the underwriter of
such policy. All premiums due and payable under all such policies have been paid, neither the
Seller nor the Buyer will be liable for retroactive premiums or similar payments, and the Seller is
otherwise in compliance in all material respects with the terms of such policies. The Seller has
no Knowledge of any threatened termination of, or premium increase with respect to, any such
policy. Seller’s insurance is adequate in terms of scope and coverage to pay all claims arising or
made prior to the Closing.

2.15 Litigation. There is no Legal Proceeding that is pending or to the Knowledge of
Seller, has been threatened in writing against the Seller, which (a) seeks either damages or
equitable relief in any way relating to the Seller or its business or (b) in any manner challenges
or seeks to prevent, enjoin, alter or delay the transactions contemplated by this Agreement. There
are no judgments, orders or decrees outstanding against the Seller.

2.16 Warranties. No product or service manufactured, sold, leased, licensed or
delivered by the Seller is subject to any guaranty, warranty, right of return, right of credit or
other indemnity other than third-party manufacturers’ warranties for which the Seller has no
liability.

2.17 Employees.

(a) Section 2.17 of the Disclosure Schedule contains a list of all employees of the
Seller, along with the position and the annual rate of compensation of each such person.
Section 2.17 of the Disclosure Schedule contains a list of all employees of the Seller who
are a party to a non-competition agreement with the Seller; copies of such agreements have
previously been delivered to the Buyer. Section 2.17 of the Disclosure Schedule contains a
list of all employees of the Seller who are not citizens of the United States. To the knowledge of
the Seller, no key employee or group of employees has any plans to terminate employment with the
Seller (other than for the purpose of accepting employment with the Buyer following the Closing) or
not to accept employment with the Buyer. The Seller is in compliance with all applicable laws
relating to the hiring and employment of employees, except where such non-compliance would not
reasonably be expected to have a Seller Material Adverse Effect.

(b) The Seller is not a party to or bound by any collective bargaining agreement, nor has any
of them experienced any strikes, grievances, claims of unfair labor practices or other collective
bargaining disputes. The Seller has no Knowledge of any
organizational effort made or threatened, either currently or within the past two years, by or
on behalf of any labor union with respect to employees of the Seller.

 

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2.18 Employee Benefits.

(a) Section 2.18 of the Disclosure Schedule contains a complete and accurate list of
all Seller Plans.

(b) Each Seller Plan has been administered in all material respects in accordance with its
terms and each of the Seller and the ERISA Affiliates has in all material respects met its
obligations with respect to each Seller Plan and has made all required contributions thereto. To
the Knowledge of Seller, the Seller, each ERISA Affiliate and each Seller Plan are in compliance in
all material respects with the currently applicable provisions of ERISA and the Code and the
regulations thereunder (including Section 4980 B of the Code, Subtitle K, Chapter 100 of the Code
and Sections 601 through 608 and Section 701 et seq. of ERISA). All filings and reports as to each
Seller Plan required to have been submitted to the Internal Revenue Service or to the United States
Department of Labor have been duly submitted. No Seller Plan has assets that include securities
issued by the Seller or any ERISA Affiliate.

(c) There are no Legal Proceedings (except claims for benefits payable in the normal operation
of the Seller Plans and proceedings with respect to qualified domestic relations orders) against or
involving any Seller Plan or asserting any rights or claims to benefits under any Seller Plan that
could give rise to any material liability.

(d) All the Seller Plans that are intended to be qualified under Section 401(a) of the Code
have received determination letters from the Internal Revenue Service to the effect that such
Seller Plans are qualified and the plans and the trusts related thereto are exempt from federal
income taxes under Sections 401(a) and 501(a), respectively, of the Code, no such determination
letter has been revoked and revocation has not been threatened, and no such Seller Plan has been
amended since the date of its most recent determination letter or application therefor in any
respect, and no act or omission has occurred, that would adversely affect its qualification or
materially increase its cost. Each Seller Plan that is required to satisfy Section 401(k)(3) or
Section 401(m)(2) of the Code has been tested for compliance with, and satisfies the requirements
of Section 401(k)(3) and Section 401(m)(2) of the Code for each plan year ending prior to the
Closing Date.

(e) Neither the Seller nor any ERISA Affiliate has ever maintained an Employee Benefit Plan
subject to Section 412 of the Code or Title IV of ERISA.

(f) At no time has the Seller or any ERISA Affiliate been obligated to contribute to any
“multiemployer plan” (as defined in Section 4001(a)(3) of ERISA).

(g) There are no unfunded obligations under any Seller Plan providing benefits after
termination of employment to any employee of the Seller (or to any beneficiary of any such
employee), including but not limited to retiree health coverage and deferred compensation, but
excluding continuation of health coverage required to be continued under Section 4980B of the Code
or other applicable law and insurance conversion privileges under
state law. The assets of each Seller Plan which is funded are reported at their fair market
value on the books and records of such Seller Plan.

 

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(h) No act or omission has occurred and no condition exists with respect to any Seller Plan
that would subject the Seller or any ERISA Affiliate to (i) any material fine, penalty, tax or
liability of any kind imposed under ERISA or the Code or (ii) any contractual indemnification or
contribution obligation protecting any fiduciary, insurer or service provider with respect to any
Seller Plan.

(i) No Seller Plan is funded by, associated with or related to a “voluntary employee’s
beneficiary association” within the meaning of Section 501(c)(9) of the Code.

(j) Section 2.18(j) of the Disclosure Schedule discloses each: (i) agreement with any
stockholder, director, executive officer or other key employee of the Seller (A) the benefits of
which are contingent, or the terms of which are altered, upon the occurrence of a transaction
involving the Seller of the nature of any of the transactions contemplated by this Agreement, (B)
providing any term of employment or compensation guarantee or (C) providing severance benefits or
other benefits after the termination of employment of such director, executive officer or key
employee; (ii) agreement, plan or arrangement under which any person may receive payments from the
Seller that may be subject to the tax imposed by Section 4999 of the Code or included in the
determination of such person’s “parachute payment” under Section 280G of the Code; and (iii)
agreement or plan binding the Seller, including any stock option plan, stock appreciation right
plan, restricted stock plan, stock purchase plan, severance benefit plan or Seller Plan, any of the
benefits of which will be increased, or the vesting of the benefits of which will be accelerated,
by the occurrence of any of the transactions contemplated by this Agreement or the value of any of
the benefits of which will be calculated on the basis of any of the transactions contemplated by
this Agreement.

(k) Section 2.18(k) of the Disclosure Schedule sets forth the policy of the Seller
with respect to accrued vacation, accrued sick time and earned time off and the amount of such
liabilities as of the date hereof.

(l) Each Seller Plan that is a “nonqualified deferred compensation plan” (as defined in Code
Section 409A(d)(1)) has been operated since January 1, 2005 in good faith compliance with Code
Section 409A and IRS Notice 2005-1. No Seller Plan that is a “nonqualified deferred compensation
plan” has been materially modified (as determined under Notice 2005-1) after October 3, 2004. No
event has occurred that would be treated by Code Section 409A(b) as a transfer of property for
purposes of Code Section 83. No stock option or equity unit option granted under any Seller Plan
has an exercise price that has been or may be less than the fair market value of the underlying
stock or equity units (as the case may be) as of the date such option was granted or has any
feature for the deferral of compensation other than the deferral of recognition of income until the
later of exercise or disposition of such option.

 

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2.19 Environmental Matters.

(a) The Seller has complied with all applicable Environmental Laws, except where such
non-compliance would not reasonably be expected to have a Seller Material Adverse
Effect. There is no pending or, to the Knowledge of the Seller, threatened civil or criminal
litigation, written notice of violation, formal administrative proceeding, or investigation,
inquiry or information request by any Governmental Entity, relating to any Environmental Law
involving the Seller.

(b) The Seller is not a party to or bound by any court order, administrative order, consent
order or other agreement with any Governmental Entity entered into in connection with any legal
obligation or liability arising under any Environmental Law.

2.20 Legal Compliance. The Seller has, at all times, conducted its business in
compliance with each applicable law (including rules and regulations thereunder) of any federal,
state, local or foreign government, or any Governmental Entity, except where such non-compliance
would not reasonably be expected to have a Seller Material Adverse Effect. The Seller has not
received any notice or communication from any Governmental Entity alleging noncompliance with any
applicable law, rule or regulation.

2.21 Customers. Section 2.21 of the Disclosure Schedule sets forth a list of
each customer that accounted for more than 10% of the consolidated revenues of the Seller during
the last full fiscal year or the interim period through the September 30, 2011 and the amount of
revenues accounted for by such customer during each such period.

2.22 Permits. Section 2.22 of the Disclosure Schedule sets forth a list of
all Permits issued to or held by the Seller. Each such Permit is in full force and effect; the
Seller is in compliance with the terms of each such Permit, except where such non-compliance would
not reasonably be expected to have a Seller Material Adverse Effect; and, to the Knowledge of the
Seller, no suspension or cancellation of such Permit is threatened.

2.23 Certain Business Relationships With Affiliates. No Affiliate of the Seller (a)
owns any property or right, tangible or intangible, which is material to the operation of the
business of the Seller, (b) has any claim or cause of action against the Seller, or (c) owes any
money to, or is owed any money by, the Seller

2.24 Brokers’ Fees. The Seller has no liability or obligation to pay any fees or
commissions to any broker, finder or agent with respect to the transactions contemplated by this
Agreement.

2.25 Books and Records. The books and records of the Seller accurately reflect the
assets, liabilities, business, financial condition and results of operations of the Seller and have
been maintained in accordance with reasonable business and bookkeeping practices. Section
2.25 of the Disclosure Schedule contains a list of the transferred bank accounts of the Seller
and the names of persons having signature authority with respect thereto or access thereto.

 

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2.26 Government Contracts. The Seller has not been suspended or debarred from bidding
on contracts or subcontracts with any Governmental Entity; no such suspension or debarment has been
threatened or initiated; and the consummation of the transactions contemplated by this Agreement
will not result in any such suspension or debarment of the Seller or the Buyer (assuming that no
such suspension or debarment will result solely from the identity of the Buyer). The Seller has
not been or is now being audited or investigated by the United
States Government Accounting Office, the United States Department of Defense or any of its
agencies, the Defense Contract Audit Agency, the contracting or auditing function of any
Governmental Entity with which it is contracting, the United States Department of Justice, the
Inspector General of the United States Governmental Entity, or any prime contractor with a
Governmental Entity; nor, to the Knowledge of the Seller, has any such audit or investigation been
threatened. To the Knowledge of the Seller, there is no valid basis for (i) the suspension or
debarment of the Seller from bidding on contracts or subcontracts with any Governmental Entity or
(ii) any claim (including any claim for return of funds to the Government) pursuant to an audit or
investigation by any of the entities named in the foregoing sentence. The Seller has no
agreements, contracts or commitments which require it to obtain or maintain a security clearance
with any Governmental Entity.

2.27 Securities Laws.

(a) The Seller has been furnished all of the materials relating to the Buyer, and its payment
of the Purchase Price, that have been requested and each of them has been afforded an opportunity
to ask questions of, and receive answers from, management of the Buyer in connection with the
payment of the Purchase Price. The Seller and the Selling Parties have not been furnished with any
oral or written representation in connection with the payment of the Purchase Price by or on behalf
of the Buyer that each of them has relied on that is not contained in this Agreement.

(b) Each of the Seller and the Seller Parties: (i) is an “accredited investor” as defined in
Rule 501 of Regulation D under the Securities Act of 1933, as amended (the “Securities
Act”); (ii) has obtained, in its judgment, sufficient information to evaluate the merits and
risks of the payment of the Purchase Price with securities of the Buyer; (iii) has sufficient
knowledge and experience in financial and business matters to evaluate the merits and risks
associated with such payment of the Purchase Price with securities of the Buyer and to make an
informed investment decision with respect thereto, and (iv) has consulted with his or its own
advisors with respect to the receipt of securities as part of the Purchase Price.

(c) The securities being acquired hereunder are being acquired for each of the Seller and the
Seller Parties’ own account for investment and not for the benefit or account of any other person
and not with a view to, or in connection with, any unlawful resale or distribution thereof. Each
of the Seller and the Seller Parties fully understands and agrees that it must bear the economic
risk of the investment in securities received hereunder for an indefinite period of time because,
among other reasons, such securities received hereunder have not been registered under the
Securities Act or under the securities laws of any states, and, therefore, the securities are
“restricted securities” and cannot be resold, pledged, assigned or otherwise disposed of unless
they are subsequently registered under the Securities Act, amended and under the applicable
securities laws of such states or an exemption from such registration is otherwise available. Each
of the Seller and the Seller Parties understands that the Buyer is not under any obligation to
register such securities on the Seller and the Seller Parties’ behalf or to assist such Seller and
Seller Parties in complying with any exemption from registration under the Securities Act or
applicable state securities laws.

(d) Each of the Seller and the Seller Parties intends that the applicable state securities law
will apply to its receipt of the securities hereunder. Each of the Seller and the Seller Parties
meets all suitability standards imposed by the state securities laws relating to the receipt of the
securities as part of the Purchase Price hereunder without registering any of the Buyer’s
securities under the securities laws of such state.

 

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ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE BUYER

The Buyer represents and warrants to the Seller that the statements contained in this
Article III are true and correct as of the date of this Agreement.

3.1 Organization and Corporate Power. The Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware. The Buyer has all
requisite corporate power and authority to carry on the businesses in which it is engaged and to
own and use the properties owned and used by it.

3.2 Authorization of the Transaction. The Buyer has all requisite power and authority
to execute and deliver this Agreement and the Ancillary Agreements and to perform its obligations
hereunder and thereunder. The execution and delivery by the Buyer of this Agreement and the
Ancillary Agreements and the consummation by the Buyer of the transactions contemplated hereby and
thereby have been duly and validly authorized by all necessary corporate action on the part of the
Buyer. This Agreement has been duly and validly executed and delivered by the Buyer and
constitutes a valid and binding obligation of the Buyer, enforceable against it in accordance with
its terms.

3.3 Equity Consideration. The Shares to be issued to Buyer under this Agreement have
been duly and validly authorized by the Buyer. The shares have not been registered with the SEC
pursuant to the Securities Act, and the Buyer has no intention of effecting any such registration

3.4 Buyer SEC Documents; No Undisclosed Liabilities.

(a) Buyer has filed all reports, schedules, forms, statements and other documents (including
exhibits and other information incorporated therein) with the SEC required to be filed by Buyer
since January 1, 2010 (such documents, the “Buyer SEC Documents”). As of their respective
dates, the Buyer SEC Documents complied in all material respects with the requirements of the
Securities Act or the Securities and Exchange Act of 1934, as amended, as the case may be, and the
rules and regulations of the SEC promulgated thereunder applicable to such Buyer SEC Documents,
and, as of their respective dates, none of the Buyer SEC Documents 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. The financial statements of Buyer included in the Buyer 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 as of their respective dates, were prepared in accordance with GAAP (except,
in the case of unaudited statements, as permitted by Form 10-Q of the SEC) applied on a consistent
basis during the periods involved (except as may be indicated in the notes thereto) and fairly
presented in all material respects the financial position of Buyer 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).

 

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(b) Except as set forth in the most recent financial statements included in the Buyer SEC
Documents filed by Buyer and publicly available prior to the date of this Agreement or for
liabilities incurred in connection with this Agreement or in the ordinary course of business since
the date of the most recent financial statements included in the Buyer SEC Documents, Buyer has no
liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise) that
would be required by GAAP to be reflected in, or reserved against or otherwise described in the
consolidated balance sheet of Buyer (including the notes thereto) which, individually or in the
aggregate, have had or would reasonably be expected to have a Buyer Material Adverse Effect.

3.5 Noncontravention. Neither the execution and delivery by the Buyer of this
Agreement or the Ancillary Agreements, nor the consummation by the Buyer of the transactions
contemplated hereby or thereby, will (a) conflict with or violate any provision of the Certificate
of Incorporation or by-laws of the Buyer, (b) require on the part of the Buyer any filing with, or
permit, authorization, consent or approval of, any Governmental Entity, (c) conflict with, result
in breach of, constitute (with or without due notice or lapse of time or both) a default under,
result in the acceleration of obligations under, create in any party any right to terminate, modify
or cancel, or require any notice, consent or waiver under, any contract or instrument to which the
Buyer is a party or by which it is bound or to which any of its assets is subject, or (d) violate
any order, writ, injunction, decree, statute, rule or regulation applicable to the Buyer or any of
its properties or assets, except, in each case of (a) through (d), where such breach or violation
would not reasonably be expected to have a Buyer Material Adverse Effect.

ARTICLE IV

POST-CLOSING COVENANTS

4.1 Governmental and Third-Party Notices and Consents.

(a) Each Party shall use its Commercially Reasonable Efforts to obtain, at its expense, all
waivers, permits, consents, approvals or other authorizations from Governmental Entities, and to
effect all registrations, filings and notices with or to Governmental Entities, as may be required
for such Party to consummate the transactions contemplated by this Agreement and to otherwise
comply with all applicable laws and regulations in connection with the consummation of the
transactions contemplated by this Agreement.

(b) Each Party shall for a period of one hundred eighty (180) days use its Commercially
Reasonable Efforts to obtain all such waivers, consents or approvals from third
parties, and to give all such notices to third parties, as listed or are required to be listed
in the Disclosure Schedule.

 

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(c) If (i) any of the Assigned Contracts or other assets or rights constituting Acquired
Assets may not be assigned and transferred by the Seller to the Buyer (as a result of either the
provisions thereof or applicable law) without the consent or approval of a third party, (ii) the
Seller, after using its Commercially Reasonable Efforts, is unable to obtain such consent or
approval prior to the Closing and (iii) the Closing occurs nevertheless, then (A) such Assigned
Contracts and/or other assets or rights shall not be assigned and transferred by the Seller to the
Buyer at the Closing and the Buyer shall not assume the Seller’s liabilities or obligations with
respect thereto at the Closing, (B) the Seller shall continue to use its Commercially Reasonable
Efforts for one hundred and eighty (180) days to obtain the necessary consent or approval as soon
as practicable after the Closing, (C) upon the obtaining of such consent or approval, the Buyer and
the Seller shall execute such further instruments of conveyance (in substantially the form executed
at the Closing) as may be necessary to assign and transfer such Assigned Contracts and/or other
assets or rights (and the associated liabilities and obligations of the Seller) to the Buyer, and
(D) from and after the Closing until the assignment of each such Assigned Contract pursuant to
clause (C) above, the Buyer shall perform and fulfill, on a subcontractor basis, the obligations of
the Seller to be performed under such Assigned Contract, and the Seller shall promptly remit to the
Buyer all payments received by it under such Assigned Contract for services performed during such
period.

4.2 Collection of Supplier Agreement Revenues. Following the Closing, the Seller
will direct all suppliers making payments pursuant to the Supplier Agreements for which Seller has
not obtained consent to assignment to remit payment directly to a lockbox in the name of Buyer that
has been established with Silicon Valley Bank pursuant to a lockbox arrangement (the “Supplier
Agreement Lockbox”). The Seller agrees that it will forward promptly to the Supplier Agreement
Lockbox any monies, checks or instruments received by the Seller after the Closing Date (a)
pursuant to Supplier Agreements and (b) related to items earned, invoiced or to be invoiced after
November 1, 2011. The Seller shall grant to the Buyer a power of attorney to endorse and cash any
checks or instruments payable or endorsed to the Seller or its order which are received by the
Buyer pursuant to Supplier Agreements.

4.3 Proprietary Information. From and after the Closing Date, the Seller shall not
disclose or make use of (except to pursue and/or enforce its rights, under this Agreement or the
Ancillary Agreements), and shall use its best efforts to cause all of its Affiliates not to
disclose or make use of, any knowledge, information or documents of a confidential nature or not
generally known to the public with respect to Acquired Assets, the Seller’s business or the Buyer
or its business (including the financial information, technical information or data relating to the
Seller’s products and names of customers of the Seller), except to the extent (a) is known to the
public and did not become so known through any violation of a legal obligation on the part of the
Seller; (c) is required to be disclosed under the provisions of any applicable law, or by any
stock exchange or similar body; or (d) is required to be disclosed by a rule or order of any court
of competent jurisdiction. Notwithstanding the foregoing, Buyer acknowledges and agrees that the
Seller, and their owners, have developed relationships with the customers of the business of Seller
and each Seller Parties, and their owners may maintain such relationships for the purpose of
commercial activities that do not violate Sections 4.5.

 

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4.4 Solicitation and Hiring. For a period of five (5) years after the Closing Date,
none of the Seller or the Partners (collectively the “Seller Parties”) shall, either
directly or indirectly (including through an Affiliate), (a) solicit or attempt to induce any
Restricted Employee to terminate his employment with the Buyer or any subsidiary of the Buyer,
except for general solicitations not directed at such employee or (b) hire or attempt to hire any
Restricted Employee; provided, that this clause (b) shall not apply to any individual whose
employment with the Buyer or a subsidiary of the Buyer has been terminated for a period of six
months or longer. The Seller, at the expense of Buyer, shall enforce, for the benefit of the
Buyer, all confidentiality, non-solicitation and non-hiring assignments and similar agreements
between the Seller and any other party which are not Assigned Contracts.

4.5 Non-Competition.

(a) During the Restricted Period, and, except as provided in Section 4.5(b) below,
each of the Seller Parties and each Owner shall not, either directly or indirectly as a owner,
partner, officer, employee, director, investor, lender, consultant, independent contractor or
otherwise, shall not engage in the business of soliciting bids from multiple suppliers to obtain
natural gas and electricity contracts in for end users. Each Seller Party shall enforce, for the
benefit of the Buyer, all non-competition and similar agreements between the Seller and any other
party which are not Assigned Contracts. Notwithstanding anything contained in this Agreement to
the contrary, in no event shall any Seller Party or Owner (i) have any obligation to ensure
compliance by any other Seller Party or Owner with this Section 4.5 or (ii) have any
liability whatsoever for the breach of this Section 4.5 by any other Seller Party or Owner.

(b) It is understood by the parties that (i) Great Lakes Energy Company and its subsidiaries
and Affiliates (collectively, “GLC”) is in the business of acting as a sole source
representative for a single supplier at any point in time to obtain natural gas and electricity
contracts for commercial and residential customers in any states where the sale of natural gas or
electricity has been “deregulated” including, without limitation, Illinois, Ohio, Pennsylvania,
Maryland, New York, New Jersey, Massachusetts and Maine and (ii) Branded Retail Energy Company and
its subsidiaries and Affiliates (together, “BREC”) is in the business of acting as a sole
source representative for a single supplier at any point in time to obtain natural gas and
electricity contracts in connection with university affinity programs including, without
limitation, University of Texas, Texas A&M University, Southern Methodist University, Baylor
University and University of Illinois. Notwithstanding the foregoing, (i) the conduct of the
business of GLC and BREC by any of Seller Parties or Owner or (ii) the ownership or operation of a
retail electricity provider (“REP”) or energy services company (“ESCO”) by GLC,
BREC or any of the Seller Parties or Owner, will not be deemed to violate Section 4.5.
Furthermore, it is hereby agreed by the parties that, until such time as GLC or any of its
successors or assigns become a REP or an ESCO, Seller Parties shall cause GLC to pay to Buyer the
lesser of (i) 50% of the millage fee paid, net of any commissions due to referral partners, or (ii)
$0.002, for each and every kwh purchased by customers of GLC who purchase in excess of 500,000 kwh
per year/per customer. At such time as GLC or its successors or assigns becomes an REP or an ESCO,
such payment obligation shall cease as of the date of the beginning of operations of the REP or
ESCO.

 

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(c) Each Seller Party and Owner agrees that the duration and geographic scope of the
non-competition provision set forth in this Section 4.5 are reasonable. In the event
that any court determines that the duration or the geographic scope, or both, are unreasonable
and that such provision is to that extent unenforceable, the Parties agree that the provision shall
remain in full force and effect for the greatest time period and in the greatest area that would
not render it unenforceable. The Parties intend that this non-competition provision shall be
deemed to be a series of separate covenants, one for each and every county of each and every state
of the United States of America and each and every political subdivision of each and every country
outside the United States of America where this provision is intended to be effective.

(d) Except as related to GLC and BREC as provided above, the Seller Parties shall, and shall
use their best efforts to cause their Affiliates to, refer all inquiries regarding the business,
products and services of the Seller to the Buyer.

4.6 Tax Matters.

(a) All transfer taxes, deed excise stamps and similar charges related to the sale of the
Acquired Assets contemplated by this Agreement shall be paid by the Seller.

(b) Tax liabilities (other than Income Taxes) attributable to the business of Seller through
the Closing Date shall be borne by the Seller.

(c) All Taxes attributable to the conduct of the business of Seller subsequent to the Closing
shall be borne by the Buyer.

(d) All real property taxes, personal property taxes, and similar ad valorem obligations
levied with respect to the Acquired Assets, and all rents, utilities and other charges against the
Seller with respect to the Acquired Assets, for a taxable period that includes (but does not end
on) the Closing Date shall be apportioned between the Buyer and the Seller as of the Closing Date
based upon (i) the number of days of such taxable period included in any tax period (or portion
thereof) ending on or before the close of business on the Closing Date (the “Pre-Closing Tax
Period”) and (ii) the number of days of such taxable period included in any tax period (or
portion thereof) beginning after the Closing Date (the “Post-Closing Tax Period”). The
Seller shall be liable for all such Taxes relating to the Pre-Closing Tax Period, and the Buyer
shall be liable for all such Taxes relating to the Post-Closing Tax Period.

(e) If either party pays any Taxes to be borne by the other party under this Section
4.6, the other party shall promptly reimburse such paying party for the Taxes paid. If, in
preparing Tax returns or payments after the Closing, it appears to the Buyer that the Seller will
be asked to pay additional Taxes, the Buyer shall so notify the Seller, and provide the Seller a
reasonable opportunity to review and comment upon any related Tax Returns prior to filing them and
paying the Tax. If either party receives any refunds or credits which are the property of the
other party under this Section 4.6, such party shall promptly pay the amount of such
refunds or credits to the other party.

(f) The Buyer shall make available to the Seller and its representatives all records and
materials reasonably required by the Seller to prepare, pursue or contest any Tax matters related
to taxable periods (or portions thereof) ending on or before the Closing Date and shall provide
reasonable cooperation to the Seller in such case. The Seller shall make available to the Buyer
and its representatives all records and materials reasonably required by the Buyer to
prepare, pursue or contest any Tax matters arising after the Closing which have factual
reference to the Pre-Closing Tax Period and shall provide reasonable cooperation to the Buyer in
such case.

 

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4.7 Sharing of Data.

(a) The Seller shall have the right for a period of seven years following the Closing Date to
have reasonable access to such books, records and accounts, including financial and tax
information, correspondence, production records, employment records and other records that are
transferred to the Buyer pursuant to the terms of this Agreement for the limited purposes of
concluding its involvement in the business conducted by the Seller prior to the Closing Date and
for complying with its obligations under applicable securities, tax, environmental, employment or
other laws and regulations. The Buyer shall have the right for a period of seven years following
the Closing Date to have reasonable access to those books, records and accounts, including
financial and accounting records (including the work papers of the Seller’s independent
accountants), tax records, correspondence, production records, employment records and other records
that are retained by the Seller pursuant to the terms of this Agreement to the extent that any of
the foregoing is needed by the Buyer for the purpose of conducting the business of the Seller after
the Closing and complying with its obligations under applicable securities, tax, environmental,
employment or other laws and regulations. Neither the Buyer nor the Seller shall destroy any such
books, records or accounts retained by it without first providing the other Party with the
opportunity to obtain or copy such books, records, or accounts at such other Party’s expense.

(b) Seller will cooperate with the Buyer’s auditors and Seller’s auditors to produce the
financial information and statements necessary so that Buyer may comply with its federal, state and
regulatory reporting requirements. Seller will respond to any reasonable requests made by the
Buyer, the Buyer’s auditors or the Seller’s auditors promptly. Promptly upon request by the Buyer
made at any time following the Closing Date, the Seller shall authorize the release to the Buyer of
all files pertaining to the Seller, the Acquired Assets or the business or operations of the Seller
held by any federal, state, county or local authorities, agencies or instrumentalities. Seller
understands that Buyer will suffer harm if it does not meet regulatory requirements regarding
reporting of this transaction.

4.8 Use of Name. No Seller Party shall use, or permit any Affiliate to use, the name
GSE Consulting or any name reasonably similar thereto after the Closing Date, other than for the
purpose of Seller fulfilling its obligations under this Agreement.

4.9 Collection of Accounts Receivable. Following the Closing Seller agrees that it
shall forward promptly to the Buyer any monies, checks or instruments received by the Seller after
the Closing Date with respect to the accounts receivable purchased by the Buyer from the Seller
pursuant to this Agreement. The Seller shall provide to the Buyer such reasonable assistance as
the Buyer may request with respect to the collection of any such accounts receivable, provided the
Buyer pays the reasonable out-of-pocket expenses of the Seller and its officers, directors and
employees incurred in providing such assistance. The Seller hereby grants to the Buyer a power of
attorney to endorse and cash any checks or instruments payable or endorsed to
the Seller or its order which are received by the Buyer and which relate to accounts
receivable purchased by the Buyer from the Seller.

 

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4.10 Employees. Effective as of the Closing, the Seller shall terminate the
employment of each of its employees. The Buyer shall be permitted to offer employment to each such
employee, terminable at the will of the Buyer. The Seller hereby consents to the hiring of any
such employees by the Buyer and waives, with respect to the employment by the Buyer of such
employees, any claims or rights the Seller may have against the Buyer or any such employee under
any non-competition, confidentiality or employment agreement.

4.11 Conditional Registration. If, as of the date that is six (6) months after the
date of issuance of any of the Shares to the Share Recipients, Buyer’s counsel reasonably
determines that any of such Shares may not be resold by a Share Recipient without restriction by
the volume limitations under Rule 144 of the Securities Act, then with respect to such Shares held
by Share Recipients, Buyer shall, upon receipt of a written request from any Share Recipient (the
“Registration Request”) received no later than the date that is one (1) year after the date of
issuance of any of the Shares to the Share Recipients:

(a) subject to receipt of necessary information from the Share Recipients after prompt request
from the Buyer to the Share Recipients to provide required Share Recipient information, prepare and
file with the SEC, within 90 days after Buyer’s receipt of the Registration Request, a
registration statement (the “Registration Statement”) to enable the resale of the Shares by the
Share Recipients;

(b) subject to receipt of necessary information from the Share Recipients after prompt request
from the Buyer to the Share Recipients to provide required Share Recipients information, use its
commercially reasonable efforts to cause the Registration Statement to become effective within 90
days after the Settlement Date; provided, however, that if the Buyer has an outstanding
confidential treatment request (“CTR”) application on file with the SEC as of the date the SEC
provides notice that it has not further comments, then the Buyer shall use its commercially
reasonable efforts to clear the CTR with the SEC and shall submit a request for acceleration of
effectiveness of the Registration Statement within two business days following clearance of the CTR
by the SEC;

(c) use commercially reasonable efforts to prepare and file with the SEC such amendments and
supplements to the Registration Statement and the prospectus related thereto (the “Prospectus”)
used in connection therewith as may be necessary to keep the Registration Statement current,
effective and free from any material misstatement or omission to state a material fact for a period
not exceeding, with respect to each Share Recipient’s Shares, until the earlier of (i) the date on
which the Share Recipient may sell all Shares then held by the Share Recipient without restriction
by the volume limitations of Rule 144 of the Securities Act, or (ii) such time as all Shares
purchased by such Share Recipients pursuant to this Agreement have been sold pursuant to a
registration statement;

 

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(d) comply with any prospectus publication requirement then applicable to it and furnish to
each Share Recipient with respect to the Shares registered under the Registration Statement such
number of copies of the Registration Statement, Prospectuses (and preliminary
Prospectuses) in conformity with the requirements of the Securities Act and such other
documents as such Share Recipient may reasonably request, in order to facilitate the public sale or
other disposition of all or any of the Shares by such Share Recipient; provided, however, that the
obligation of the Buyer to deliver copies of Prospectuses (or preliminary Prospectuses) to the
Share Recipient shall be subject to the receipt by the Buyer of reasonable assurances from the
Share Recipient that the Share Recipient will comply with the applicable provisions of the
Securities Act and of such other securities or blue sky laws as may be applicable in connection
with any use of such Prospectuses (or preliminary Prospectuses);

(e) file documents required of the Buyer for normal blue sky clearance in states specified in
writing by the Share Recipient and use its commercially reasonable efforts to maintain such blue
sky qualifications during the period the Buyer is required to maintain the effectiveness of the
Registration Statement pursuant to Section 4.11(c); provided, however, that the Buyer shall
not be required to qualify to do business or consent to service of process in any jurisdiction in
which it is not now so qualified or has not so consented; and

(f) advise the Share Recipient, promptly after it shall receive notice or obtain knowledge of
the issuance of any stop order by the SEC delaying or suspending the effectiveness of the
Registration Statement or of the initiation or threat of any proceeding for that purpose; and it
will promptly use its commercially reasonable efforts to prevent the issuance of any stop order or
to obtain its withdrawal at the earliest possible moment if such stop order should be issued; and

If the Buyer receives notification from the SEC that a Share Recipient whose Shares are subject to
the Registration Statement is deemed an underwriter, then the period by which the Buyer is
obligated to submit an acceleration request to the SEC shall be extended to the earlier of (i) the
45th day after such SEC notification, or (ii) 120 days after the initial filing of the Registration
Statement with the SEC.

ARTICLE V

INDEMNIFICATION

5.1 Indemnification by the Seller. The Seller shall indemnify Buyer, and its
officers, directors and Affiliates (each an “Buyer Indemnified Party”) in respect of, and
hold each Buyer Indemnified Party harmless against, Damages incurred or suffered by such Buyer
Indemnified Party resulting from, relating to or constituting:

(a) any breach, as of the date of this Agreement, of any representation or warranty of the
Seller contained in this Agreement, any Ancillary Agreement or any other agreement or instrument
furnished by the Seller to the Buyer pursuant to this Agreement;

(b) any failure to perform any covenant or agreement of any Seller Party contained in this
Agreement, any Ancillary Agreement or any agreement or instrument furnished by any Seller Party to
the Buyer pursuant to this Agreement;

(c) any Retained Liabilities; or

(d) the failure of the Buyer and the Seller, in connection with the sale of the Acquired
Assets by the Seller to the Buyer pursuant to this Agreement, to comply with, and obtain for the
Buyer the benefits afforded by compliance with, any applicable bulk transfers laws.

 

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5.2 Indemnification by the Buyer. The Buyer shall indemnify the Seller and its
officers, directors and Affiliates (each an “Seller Indemnified Party”) in respect of, and
hold it harmless each Seller Indemnified Party harmless against, any and all Damages incurred or
suffered by such Seller Indemnified Party resulting from, relating to or constituting:

(a) any breach, as of the date of this Agreement, of any representation or warranty of the
Buyer contained in this Agreement, any Ancillary Agreement or any other agreement or instrument
furnished by the Buyer to the Seller pursuant to this Agreement;

(b) any failure to perform any covenant or agreement of the Buyer contained in this Agreement,
any Ancillary Agreement or any other agreement or instrument furnished by the Buyer to the Seller
pursuant to this Agreement;

(c) operation of the business and the Acquired Assets after the Closing Date; or

(d) any Assumed Liabilities.

5.3 Indemnification Procedure.

(a) In the event that any Legal Proceedings shall be instituted or that any claim or demand
(“Claim”) shall be asserted by any Person in respect of which payment may be sought under
Section 5.1 and 5.2 hereof (regardless of the limitations set forth in Section
5.5), the Indemnified Party shall reasonably and promptly cause written notice of the assertion
of any Claim of which it has knowledge which is covered by this indemnity to be forwarded to the
Indemnifying Party. The Indemnifying Party shall have the right, at its sole option and expense,
to be represented by counsel of its choice, which must be reasonably satisfactory to the
Indemnified Party, and to defend against, negotiate, settle or otherwise deal with any Claim which
relates to any Damages indemnified against hereunder. If the Indemnifying Party elects to defend
against, negotiate, settle or otherwise deal with any Claim which relates to any Damages
indemnified against hereunder, it shall within thirty (30) days (or sooner, if the nature of the
Claim so requires) notify the Indemnified Party of its intent to do so. If the Indemnifying Party
elects not to defend against, negotiate, settle or otherwise deal with any Claim which relates to
any Damages indemnified against hereunder, the Indemnified Party may defend against, negotiate,
settle or otherwise deal with such Claim. If the Indemnifying Party shall assume the defense of
any Claim, the Indemnified Party may participate, at his or its own expense, in the defense of such
Claim; provided, however, that such Indemnified Party shall be entitled to
participate in any such defense with separate counsel at the expense of the Indemnifying Party if
(i) so requested by the Indemnifying Party to participate or (ii) in the reasonable opinion of
counsel to the Indemnified Party a conflict or potential conflict exists between the Indemnified
Party and the Indemnifying Party that would make such separate representation advisable; and
provided, further, that

 

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the Indemnifying Party shall not be required to pay for
more than one such counsel for all indemnified parties in connection with any Claim. The parties hereto agree to
cooperate fully with each other in connection with the defense, negotiation or settlement of any
such Claim. Notwithstanding anything in this Section 5.3 to the contrary, neither the
Indemnifying Party nor the Indemnified Party shall, without the written consent of the other party,
settle or compromise any indemnifiable Claim or permit a default or consent to entry of any
judgment unless the claimant and such party provide to such other party an unqualified release from
all liability in respect of the indemnifiable Claim. Notwithstanding the foregoing, if a
settlement offer solely for money damages is made by the applicable third party claimant, and the
Indemnifying Party notifies the Indemnified Party in writing of the Indemnifying Party’s
willingness to accept the settlement offer and, subject to the applicable limitations of
Section 5.5, pay the amount called for by such offer, and the Indemnified Party declines to
accept such offer, the Indemnified Party may continue to contest such indemnifiable Claim, free of
any participation by the Indemnifying Party, and the amount of any ultimate liability with respect
to such indemnifiable Claim that the Indemnifying Party has an obligation to pay hereunder shall be
limited to the lesser of (A) the amount of the settlement offer that the Indemnified Party declined
to accept plus the Damages of the Indemnified Party relating to such indemnifiable Claim through
the date of its rejection of the settlement offer or (B) the aggregate Damages of the Indemnified
Party with respect to such indemnifiable Claim. If the Indemnifying Party makes any payment on any
indemnifiable Claim, the Indemnifying Party shall be subrogated, to the extent of such payment, to
all rights and remedies of the Indemnified Party to any insurance benefits or other Claims of the
Indemnified Party with respect to such indemnifiable Claim.

(a) After any final judgment or award shall have been rendered by a Governmental Body of
competent jurisdiction and the expiration of the time in which to appeal therefrom, or a settlement
shall have been consummated, or the Indemnified Party and the Indemnifying Party shall have arrived
at a mutually binding agreement with respect to a Claim hereunder, the Indemnified Party shall
forward to the Indemnifying Party notice of any sums due and owing by the Indemnifying Party
pursuant to this Agreement with respect to such matter.

5.4 Survival of Representations and Warranties. The representations and warranties of
the Parties shall survive the Closing of this Agreement for a period of eighteen (18) months except
that (i) the representations and warranties set forth in Sections 2.1, 2.3,
3.1 and 3.2 shall survive the closing without limitation and (ii) the
representations and warranties set forth in Sections 2.8, 2.12, 2.18, and
2.19 shall survive until 30 days following expiration of the statute of limitations
applicable to the matters referred to within each such section. The rights to indemnification set
forth in this Article V will not be affected by (i) any investigation conducted by or on behalf of
an Indemnified Party or any knowledge acquired (or capable of being acquired) by an Indemnified
Party, whether before or after the date of this Agreement or the Closing Date, with respect to the
inaccuracy or noncompliance with any representation, warranty, covenant or obligation which is the
subject of indemnification under this Agreement or (ii) any waiver by an Indemnified Party of any
closing condition relating to the accuracy of any representations and warranties or the performance
of or compliance with agreements and covenants.

 

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5.5 Any Claim not made by a Buyer Indemnified Party with regards to Section 5.1(a) or
a Seller Indemnified Party with regards to Section 5.2(a) on or prior to that date will be
irrevocably and unconditionally released and waived.

5.6 Certain Limitations on Indemnification.

(a) Notwithstanding the provisions of this Article V, neither Seller nor Buyer shall
have any indemnification obligations for Damages pursuant to Section 5.1(a) or
5.2(a), unless the aggregate amount of all such Damages finally determined for which such
party would be liable, but for this paragraph (a) exceeds $50,000 (the “Basket”), and in
such event, the Indemnifying Party shall then be required to pay the total amount of such Damages
in excess of the Basket, subject to the Cap and other limitations.

(b) None of the Seller or the Buyer shall be required to indemnify, any Person for Damages
pursuant to Section 5.1(a) or 5.2(a) for an aggregate amount of all such Damages
exceeding $2,500,000 (the “Cap”).

(c) Notwithstanding anything to the contrary elsewhere in this Agreement, no party shall, in
any event, be liable to any other Person for any consequential, incidental, indirect, special or
punitive damages of such other Person, including loss of future revenue, income or profits,
diminution of value or loss of business reputation or opportunity relating to the breach or alleged
breach hereof, except for Third Party Actions for consequential damages.

(d) No representation or warranty of Seller contained herein shall be deemed untrue or
incorrect, and Seller shall not be deemed to have breached a representation or warranty, as a
consequence of the existence of any fact, circumstance or event of which is disclosed in response
to another representation or warranty contained in this Agreement.

(e) Buyer shall not make any claim for indemnification under this Article V in respect
of any calculation of amounts that is taken into account in the calculation of any adjustment to
the Purchase Price pursuant to Section 1.8, and the payment of the True Up Amount shall be
the exclusive remedy of Buyer with respect to the Expected Backlog.

5.7 Exclusive Remedy.

(a) Except with respect to claims based on fraud, after the Closing, the rights of the
Indemnified Parties under this Article V shall be the exclusive remedy of the Indemnified
Parties with respect to claims resulting from or relating to any misrepresentation, breach of
warranty or failure to perform any covenant or agreement contained in this Agreement.

5.8 Treatment of Indemnity Payments. Any payments made to a Buyer Indemnified Party
or Seller Indemnified Party, as applicable, pursuant to this Article V shall be treated as
an adjustment to the Purchase Price for tax purposes.

ARTICLE VI

Intentionally Omitted.

 

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ARTICLE VII

DEFINITIONS

For purposes of this Agreement, each of the following terms shall have the meaning set forth
below.

“2011 Earnout Payment” has the meaning set forth in Section 1.7(a) of this
Agreement.

“2012 Earnout Payment” has the meaning set forth in Section 1.7(b) of this
Agreement.

“2013 Earnout Payment” has the meaning set forth in Section 1.7(c) of this
Agreement.

“Acquired Assets” shall mean all of the assets, properties and rights of the Seller
existing as of the Closing, except for the Excluded Assets, including (except to the extent
included in the definition of Excluded Assets):

(a) all trade and other accounts receivable and notes and loans receivable that are payable to
the Seller, and all rights to unbilled amounts for products delivered or services provided,
together with any security held by the Seller for the payment thereof;

(b) all computers, machinery, equipment, tools and tooling, furniture, fixtures, supplies,
leasehold improvements, motor vehicles and other tangible personal property;

(c) all leaseholds and subleaseholds in real property, and easements, rights-of-way and other
appurtenants thereto;

(d) all Intellectual Property;

(e) all rights under Assigned Contracts;

(f) all claims, prepayments, deposits, refunds, causes of action, chooses in action, rights of
recovery, rights of setoff and rights of recoupment;

(g) all books, records, accounts, ledgers, files, documents, correspondence, lists (including
customer and prospect lists), employment records, manufacturing and procedural manuals,
Intellectual Property records, sales and promotional materials, studies, reports and other printed
or written materials;

(h) all insurance policies of the Seller, as well as all proceeds which may be payable
thereunder; and

(i) all rights of the Seller in and with respect to the assets associated with its Employee
Benefit Plans.

“Affiliate” shall mean any affiliate, as defined in Rule 12b-2 under the Securities
Exchange Act of 1934. For purposes of the obligation, representations and warranties of Seller and
the Seller Parties shall not be considered an Affiliate.

“Agreement” shall have the meaning set forth in the first paragraph of this Agreement.

 

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“Ancillary Agreements” shall mean the Bill of Sale and the Assignment and Assumption
Agreement.

“Annualized New Bookings” shall mean the aggregate One Year Dollar Value of all New
Customer Supply Contracts.

“Assigned Contracts” shall mean the contracts listed on Section 2.13 of the
Disclosure Schedule (except for those vendor contracts that are specifically indicated as
excluded).

“Assignment and Assumption Agreement” has the meaning set forth in Section
1.5(b)(ii) of this Agreement.

“Assumed Liabilities” shall mean (a) all obligations of the Seller arising after the
Closing under the Assigned Contracts other than arising out of any breach, act or omission by the
Seller prior to the Closing under any Assigned Contract, and (b) any liability for Taxes in
accordance with Section 4.6(d).

“Backlog Contract” has the meaning set forth in Section 1.8(a) of this
Agreement.

“Backlog Objection Period” has the meaning set forth in Section 1.8(a) of this
Agreement.

“Backlog Statement” has the meaning set forth in Section 1.8(c) of this
Agreement.

“Basket” has the meaning set forth in Section 5.5(a) of this Agreement.

“Bill of Sale” has the meaning set forth in Section 1.5(b)(i) of this
Agreement.

“BREC” has the meaning set forth in Section 4.5(b) of this Agreement.

“Buyer” shall have the meaning set forth in the first paragraph of this Agreement.

“Buyer Indemnified Party” has the meaning set forth in Section 5.1 of this
Agreement.

“Buyer Materials Adverse Effect” shall mean a material adverse effect on any of the
Assets or on the business, operations, property, financial condition, results of operations or cash
flow of Buyer or the business of Buyer. For the avoidance of doubt, the parties agree that the
terms “material”, “materially” or “materiality” as used in this Agreement with an initial lower
case “m” shall have their respective customary and ordinary meanings, without regard to the meaning
ascribed to Buyer or Seller Material Adverse Effect.

“Buyer SEC Documents” has the meaning set forth in Section 3.4(a) of this
Agreement.

“Cap” has the meaning set forth in Section 5.5(b) of this Agreement.

“CERCLA” shall mean the federal Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended.

 

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“Change of Control Transaction” shall mean (A) the liquidation, dissolution or winding
up of the Buyer; (B) the acquisition of the Buyer by another entity by means of any transaction or
series of related transactions (including, without limitation, any reorganization, merger or
consolidation) that results in the transfer of fifty percent (50%) or more of the outstanding
voting power of the Buyer; (C) a sale of all or substantially all of the assets of the Buyer, (D)
any Person or group of related persons for purposes of Section 13(d) of the Exchange Act (a
“Group”) (other than any Person or Group who owns or has the right to acquire Buyer’s
common stock on the date hereof) shall become the beneficial owner (within the meaning of Section
13(d) of the Exchange Act), directly or indirectly, of common stock of the Buyer representing more
than 40% of the aggregate outstanding voting power of the Buyer and such Person or Group actually
has the power to vote such common stock in any election, or (E) a majority of the board of
directors of the Buyer shall consist of Persons who was not (i) a member of the board of directors
on the First Closing Date, or (ii) nominated for election or elected to the board of directors of
the Buyer with the affirmative vote of a majority of the members of the board of directors on the
First Closing Date; that occurs prior to the expiration of the measurement period for the 2013
Earnout Payment.

“Claim” has the meaning set forth in Section 5.3(a) of this Agreement.

“CLG” has the meaning set forth in Section 4.5(b) of this Agreement.

“Closing” or “Closing Date” shall mean the date of this Agreement.

“Commercially Reasonable Efforts” shall mean commercially reasonable efforts, but
shall not include Seller paying any amount, incurring or retaining any liability, giving any
concessions, or agreeing to remain secondarily liable, except as may be required under (i) the
Lease Agreement by and between 1225 North Loop Investments, Inc, and GSE Consulting, LP, dated as
of October 2006, and/or (ii) the Office Lease by and between GC Museum Partners, LP and GSE
Consulting, LP dates as of June 25, 2009.

“Customer Supply Contract” means a contract entered into between an end user of energy
(customer) and an energy supplier which provides for payment of fees to Buyer, Seller, and/or any
Affiliate of Buyer pursuant to a Supplier Agreement.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“CTR” has the meaning set forth in Section 4.11(b) of this Agreement.

“Damages” shall mean any and all debts, obligations and other liabilities (whether
absolute, accrued, contingent, fixed or otherwise, or whether known or unknown, or due or to become
due or otherwise), diminution in value, monetary damages, fines, fees, penalties, interest
obligations, deficiencies, losses and expenses (including amounts paid in settlement, interest,
court costs, costs of investigators, fees and expenses of attorneys, accountants, financial
advisors and other experts, and other expenses of litigation).

“Disclosure Schedule” shall mean the disclosure schedule provided by the Seller to the
Buyer on the date hereof and attached to this Agreement.

 

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“Documentation” shall mean printed, visual or electronic materials, reports, white
papers, documentation, specifications, designs, flow charts, code listings, instructions, user
manuals, frequently asked questions, release notes, recall notices, error logs, diagnostic reports,
marketing materials, packaging, labeling, service manuals and other information describing the use,
operation, installation, configuration, features, functionality, pricing, marketing or correction
of a product, whether or not provided to end user.

“Earnout Payment(s)” has the meaning set forth in Section 1.7(c) of this
Agreement.

“Earnout Objection Period” has the meaning set forth in Section 1.7(e) of this
Agreement.

“Earnout Statement” has the meaning set forth in Section 1.7(e) of this
Agreement.

“Employee Benefit Plan” shall mean any “employee pension benefit plan” (as defined in
Section 3(2) of ERISA), any “employee welfare benefit plan” (as defined in Section 3(1) of ERISA),
and any other written or oral plan, agreement or arrangement involving direct or indirect
compensation, including insurance coverage, severance benefits, disability benefits, deferred
compensation, bonuses, stock options, stock purchase, phantom stock, stock appreciation or other
forms of incentive compensation or post-retirement compensation.

“Encore Bank” shall mean Encore Bank, N.A.

“Environmental Law” shall mean any federal, state or local law, statute, rule, order,
directive, judgment, Permit or regulation or the common law relating to the environment,
occupational health and safety, or exposure of persons or property to Materials of Environmental
Concern, including any statute, regulation, administrative decision or order pertaining to: (i)
the presence of or the treatment, storage, disposal, generation, transportation, handling,
distribution, manufacture, processing, use, import, export, labeling, recycling, registration,
investigation or remediation of Materials of Environmental Concern or documentation related to the
foregoing; (ii) air, water and noise pollution; (iii) groundwater and soil contamination; (iv) the
release, threatened release, or accidental release into the environment, the workplace or other
areas of Materials of Environmental Concern, including emissions, discharges, injections, spills,
escapes or dumping of Materials of Environmental Concern; (v) transfer of interests in or control
of real property which may be contaminated; (vi) community or worker right-to-know disclosures with
respect to Materials of Environmental Concern; (vii) the protection of wild life, marine life and
wetlands, and endangered and threatened species; (viii) storage tanks, vessels, containers,
abandoned or discarded barrels and other closed receptacles; and (ix) health and safety of
employees and other persons. As used above, the term “release” shall have the meaning set forth in
CERCLA.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.

“ERISA Affiliate” shall mean any entity which is, or at any applicable time was, a
member of (1) a controlled group of corporations (as defined in Section 414(b) of the Code), (2) a
group of trades or businesses under common control (as defined in Section 414(c) of the Code),
or (3) an affiliated service group (as defined under Section 414(m) of the Code or the
regulations under Section 414(o) of the Code), any of which includes or included the Seller.

 

- 33 -

 

“ESCO” has the meaning set forth in Section 4.5(b) of this Agreement.

“Excluded Assets” shall mean the following assets of the Seller:

(a) all cash, short-term investments, deposits, bank accounts and other similar assets;

(b) the governing documents, qualifications to conduct business as a foreign limited liability
company, arrangements with registered agents relating to foreign qualifications, taxpayer and other
identification numbers, seals, minute books, membership or security transfer books and other
documents relating to the organization and existence of the Seller as a limited liability company;

(c) all rights relating to refunds, recovery or recoupment of Taxes;

(d) all Permits;

(e) any of the rights of the Seller under this Agreement or under the Ancillary Agreements;

(f) prepayments by Seller on insurance policies not assumed;

(g) those assets listed on Schedule 1.1(b) attached hereto.

“Expected Backlog” has the meaning set forth in Section 1.8(a) of this
Agreement.

“Final Backlog” has the meaning set forth in Section 1.8(a) of this Agreement.

“Financial Statements” shall mean:

(a) the balance sheets and statements of income, of the Seller as of the end of and for each
of the years ended December 31, 2009 and December 31, 2010; and

(b) the Most Recent Balance Sheet and the unaudited statements of income, for the nine (9)
months ended as of the Most Recent Balance Sheet Date.

“Force Majeure Event” shall mean a (i) fire, flood, earthquake, hurricane, elements of
nature or acts of God; (ii) wars (declared and undeclared), acts of terrorism, sabotage, riots,
civil disorders, rebellions or revolutions; or (iii) acts of any governmental authority with
respect to any of the foregoing, and provided that such default or delay cannot reasonably be
circumvented by the non-performing Party through the use of commercially reasonable alternate
sources, workaround plans or other commercially reasonable means

“GAAP” shall mean United States generally accepted accounting principles.

 

- 34 -

 

“Governmental Entity” shall mean any court, arbitrational tribunal, administrative
agency or commission or other governmental or regulatory authority or agency.

“Indemnified Party” shall mean the Buyer Indemnified Party or the Seller Indemnified
Party, as applicable.

“Indemnifying Party” shall mean the party from whom indemnification is sought by a
Buyer Indemnified Party or Seller Indemnified Party, as applicable.

“Intellectual Property” shall mean the following subsisting throughout the world:

(a) Patent Rights;

(b) Trademarks and all goodwill in the Trademarks;

(c) copyrights, designs, data and database rights and registrations and applications for
registration thereof, including moral rights of authors;

(d) mask works and registrations and applications for registration thereof and any other
rights in semiconductor topologies under the laws of any jurisdiction;

(e) inventions, invention disclosures, statutory invention registrations, trade secrets and
confidential business information, know-how, manufacturing and product processes and techniques,
research and development information, financial, marketing and business data, pricing and cost
information, business and marketing plans and customer and supplier lists and information, whether
patentable or nonpatentable, whether copyrightable or noncopyrightable and whether or not reduced
to practice; and

(f) other proprietary rights relating to any of the foregoing (including remedies against
infringement thereof and rights of protection of interest therein under the laws of all
jurisdictions).

“Intellectual Property Registrations” means Patent Rights, registered Trademarks,
registered copyrights and designs, mask work registrations and applications for each of the
foregoing.

“Knowledge of Seller” shall mean the (i) actual knowledge of Justin Helms, Jason
Helms, Jeremiah Collins, Byron Biggs, and Brian Dafferner, or (ii) if a reasonable prudent
individual similarly situated to the persons listed in clause (i) could reasonably be expected to
discover or otherwise become aware of that fact or matter in the course of conducting a reasonably
comprehensive investigation regarding the accuracy of any representation or warranty in this
Agreement.

“Lease” shall mean any lease or sublease pursuant to which the Seller leases or
subleases from another party any real property.

“Legal Proceeding” shall mean any action, suit, proceeding, claim, arbitration or
investigation before any Governmental Entity or before any arbitrator.

 

- 35 -

 

“Materials of Environmental Concern” shall mean any: pollutants, contaminants or
hazardous substances (as such terms are defined under CERCLA), pesticides (as such term is defined
under the Federal Insecticide, Fungicide and Rodenticide Act), solid wastes and hazardous wastes
(as such terms are defined under the Resource Conservation and Recovery Act), chemicals, other
hazardous, radioactive or toxic materials, oil, petroleum and petroleum products (and fractions
thereof), or any other material (or article containing such material) listed or subject to
regulation under any law, statute, rule, regulation, order, Permit, or directive due to its
potential, directly or indirectly, to harm the environment or the health of humans or other living
beings.

“Most Recent Balance Sheet” shall mean the unaudited consolidated balance sheet of the
Seller as of the Most Recent Balance Sheet Date.

“Most Recent Balance Sheet Date” shall mean September 30, 2011.

“NASDAQ Price” shall mean the consolidated closing bid price of XWES common stock at
the time this Agreement is executed. If this Agreement is executed before 4PM Eastern Standard
Time, the NASDAQ Price will be the consolidated closing bid price for the business day prior to the
date this Agreement is executed. If this Agreement is executed after 4PM Eastern Standard Time, the
NASDAQ Price will be the consolidated closing bid price on the date this Agreement is executed.

“New Customer Supply Contract” shall mean any new Customer Supply Contract entered
into by Seller, Buyer, or any Affiliate of Buyer during the applicable measurement period covering
a meter that was not the subject of a Customer Supply Contract that expired immediately prior to
the effective date of such new Customer Supply Contract (such Customer Supply Contract is not a
renewal of a Customer Supply Contract).

“One Year Dollar Value” shall mean the projected amount payable to Buyer, Seller, or
any Affiliate of Buyer, pursuant to the applicable Supplier Agreement based on one year of energy
usage of the customer at the time of execution of the applicable Customer Supply Contract, whether
by upfront fees, residual payments or otherwise, during the measurement period for the applicable
Earnout Payment. The projections for the One Year Dollar Value shall be based on the data in the
Customer Supply Contract and any applicable fee addendum, deal confirm or other document that
conveys the parameters of the specific customer-supplier relationship and Buyer’s, Seller’s, or any
Affiliate of Buyer’s, commission rate.

“Ordinary Course of Business” shall mean the ordinary course of business consistent
with past custom and practice (including with respect to frequency and amount).

“Owner” shall mean Justin Helms, Jason Helms, Jeremiah Collins, and Byron Biggs.

“Parties” shall mean the Buyer and the Seller.

“Partners” shall have the meaning set forth in Section 2.2 of this Agreement.

“Patent Rights” shall mean all patents, patent applications, utility models, design
registrations and certificates of invention and other governmental grants for the protection of
inventions or industrial designs (including all related continuations, continuations-in-part,
divisionals, reissues and reexaminations).

 

- 36 -

 

“Permits” shall mean all permits, licenses, registrations, certificates, orders,
approvals, franchises, variances and similar rights issued by or obtained from any Governmental
Entity (including those issued or required under Environmental Laws and those relating to the
occupancy or use of owned or leased real property).

“Person” shall mean any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust, unincorporated organization, or
other entity, or any governmental agency, and any officer, department, commission, board, bureau,
or instrumentality thereof.

“Post-Closing Tax Period” has the meaning set forth in Section 4.6(d) of this
Agreement.

“Pre-Closing Tax Period” has the meaning set forth in Section 4.6(d) of this
Agreement.

“Prospectus” has the meaning set forth in Section 4.11(c) of this
Agreement.

“Purchase Price” shall mean the purchase price to be paid by the Buyer for the
Acquired Assets.

“Registration Statement” has the meaning set forth in Section 4.11(a) of this
Agreement.

“Registration Request” has the meaning set forth in Section 4.11 of this
Agreement.

“Renewal Rate” shall mean as the percent of the One Year Dollar Value of Customer
Supply Contracts entered into by Buyer, Seller, and/or any Affiliate of Buyer, during the
applicable measurement period that are not New Customer Contracts (such Customer Supply Contracts
are a renewal of a prior Customer Supply Contract covering such meters) divided by the One Year Dollar
Value of all expiring Customer Supply Contracts during the applicable measurement period other than
those Customer Supply Contracts set forth on Schedule 1.7.

“REP” has the meaning set forth in Section 4.5(b) of this Agreement.

“Restricted Employee” shall mean any person who either (i) was an employee of the
Buyer on either the date of this Agreement or the Closing Date or (ii) was an employee of the
Seller on either the date of this Agreement or the Closing Date and received an employment offer
from the Buyer within five business days following the Closing Date.

“Restricted Period” shall mean the period commencing upon the Closing Date and ending
on the earlier to occur of (i) thirty (30) days following delivery of written notice to Buyer of
the failure of Buyer to make any payment when due in accordance with Sections 1.7 or
1.8, and failure to cure such non-payment within such thirty (30) day period, (ii) the
occurrence of Change of Control Transaction that results in Buyer’s inability to achieve the 2013
Earnout Payment due to successor party’s failure to comply with the provisions of Section
1.7(d)(ii), or (ii) the fifth (5th) anniversary of the Closing Date.

 

- 37 -

 

“Retained Liabilities” shall mean any and all liabilities or obligations (whether
known or unknown, absolute or contingent, liquidated or unliquidated, due or to become due and
accrued or unaccrued, and whether claims with respect thereto are asserted before or after the
Closing) of the Seller which are not Assumed Liabilities. The Retained Liabilities shall include,
without limitation, all liabilities and obligations of the Seller:

(a) for income, transfer, sales, use or other Taxes arising in connection with the
consummation of the transactions contemplated by this Agreement (including any income Taxes arising
as a result of (i) the transfer by the Seller to the Buyer of the Acquired Assets, (ii) any deemed
transfer by a subsidiary of the Seller of its assets pursuant to an election under Section
338(h)(10) of the Code, (iii) the Seller having an “excess loss account” (within the meaning of
Treasury Regulation §1.1502-19) in the stock of any Subsidiary of the Seller, or (iv) the Seller
having deferred gain on any “deferred intercompany transaction” (within the meaning of Treasury
Regulation §1.1502-13));

(b) for costs and expenses incurred in connection with this Agreement or the consummation of
the transactions contemplated by this Agreement;

(c) under this Agreement or the Ancillary Agreements;

(d) for any Taxes, including deferred taxes or taxes measured by income of the Seller earned
prior to the Closing, any liabilities for federal or state income tax and FICA taxes of employees
of the Seller which the Seller is legally obligated to withhold, any liabilities of the Seller for
employer FICA and unemployment taxes incurred, and any liabilities of the Seller for sales, use or
excise taxes or customs and duties;

(e) under any agreements, contracts, leases or licenses which are listed on Schedule
1.1(b);

(f) arising prior to the Closing under the Assigned Contracts, and all liabilities for any
breach, act or omission by the Seller prior to the Closing under any Assigned Contract;

(g) arising out of events, conduct or conditions existing or occurring prior to the Closing
that constitute a violation of or non-compliance with any law, rule or regulation (including
Environmental Laws), any judgment, decree or order of any Governmental Entity, or any Permit or
that give rise to liabilities or obligations with respect to Materials of Environmental Concern;

(h) to pay severance benefits (if any) to any employee of the Seller whose employment is
terminated (or treated as terminated) in connection with the consummation of the transactions
contemplated by this Agreement, all liabilities resulting from the termination of employment of
employees of the Seller prior to, the Closing that arose under any federal or state law or under
any Employee Benefit Plan established or maintained by the Seller;

(i) to indemnify any person or entity by reason of the fact that such person or entity was a
director, officer, employee, or agent of the Seller or was serving at the request of the Seller as
a partner, trustee, director, officer, employee, or agent of another entity (whether such
indemnification is for judgments, damages, penalties, fines, costs, amounts paid in settlement,
losses, expenses, or otherwise and whether such indemnification is pursuant to any statute,
charter document, bylaw, agreement, or otherwise);

 

- 38 -

 

(j) injury to or death of persons or damage to or destruction of property occurring prior to
the Closing (including any workers compensation claim);

(k) for medical, dental and disability (both long-term and short-term benefits), whether
insured or self-insured, owed to employees or former employees of the Seller based upon (A)
exposure to conditions in existence prior to the Closing or (B) disabilities existing prior to the
Closing (including any such disabilities which may have been aggravated following the Closing);

(l) for benefits under any Seller Plan;

(m) for any retrospective premium increases under any Seller Plan assumed by Buyer that
relates to periods before and including the Closing; and

(n) for the misclassification of employees as independent contractors.

“SEC” the Securities and Exchange Commission.

“Securities Act” has the meaning set forth in Section 2.26(b) of this
Agreement.

“Security Interest” shall mean any mortgage, pledge, security interest, encumbrance,
charge or other lien (whether arising by contract or by operation of law), other than (i)
mechanic’s, materialmen’s, and similar liens, (ii) liens arising under worker’s compensation,
unemployment insurance, social security, retirement, and similar legislation and (iii) liens on
goods in transit incurred pursuant to documentary letters of credit, in each case arising in the
Ordinary Course of Business of the Seller and not material to the Seller.

“Seller” shall have the meaning set forth in the first paragraph of this Agreement.

“Seller Indemnified Party” has the meaning set forth in Section 5.2 of this
Agreement.

“Seller Material Adverse Effect” shall mean a material adverse effect on any of the
Assets or on the business, operations, property, financial condition, results of operations or cash
flow of Seller or the business of Seller. For the avoidance of doubt, the parties agree that the
terms “material”, “materially” or “materiality” as used in this Agreement with an initial lower
case “m” shall have their respective customary and ordinary meanings, without regard to the meaning
ascribed to a Buyer or Seller Material Adverse Effect.

“Seller Parties” shall have the meaning set forth in Section 4.4 of this
Agreement.

“Seller Plan” shall mean any Employee Benefit Plan maintained, or contributed to, by
the Seller or any ERISA Affiliate.

“Seller Registrations” shall mean Intellectual Property Registrations that are
registered or filed in the name of the Seller, alone or jointly with others.

 

- 39 -

 

“Share Recipients” will mean those Persons issued Shares pursuant to the terms of the
Agreement

“Shares” will mean any shares of the Buyer’s common stock issued to the Seller or
Seller’s designees pursuant to the terms of this Agreement.

“Silicon Valley Bank” shall mean Silicon Valley Bank, National Association.

“Subsidiary” shall mean any corporation, partnership, trust, limited liability company
or other non-corporate business enterprise in which the Seller (or another Subsidiary) holds stock
or other ownership interests representing (a) more than 50% of the voting power of all outstanding
stock or ownership interests of such entity or (b) the right to receive more than 50% of the net
assets of such entity available for distribution to the holders of outstanding stock or ownership
interests upon a liquidation or dissolution of such entity.

“Supplier Agreement Lockbox” has the meaning set forth in Section 4.2of this
Agreement.

“Supplier Agreements” shall mean those agreements by and between Seller, Buyer, and/or
any Affiliate of Buyer, and energy suppliers pursuant to which Seller, Buyer, and/or any Affiliate
of Buyer, is to be paid commodity brokerage fees with respect to transactions between energy
suppliers and end users of energy (customers).

“Taxes” shall mean any and all taxes, charges, fees, duties, contributions, levies or
other similar assessments or liabilities in the nature of a tax, including, without limitation,
income, gross receipts, corporation, ad valorem, premium, value-added, net worth, capital stock,
capital gains, documentary, recapture, alternative or add-on minimum, disability, estimated,
registration, recording, excise, real property, personal property, sales, use, license, lease,
service, service use, transfer, withholding, employment, unemployment, insurance, social security,
national insurance, business license, business organization, environmental, workers compensation,
payroll, profits, severance, stamp, occupation, windfall profits, customs duties, franchise and
other taxes of any kind whatsoever imposed by the United States of America or any state, local or
foreign government, or any agency or political subdivision thereof, and any interest, fines,
penalties, assessments or additions to tax imposed with respect to such items or any contest or
dispute thereof.

“Tax Returns” shall mean any and all reports, returns, declarations, or statements
relating to Taxes, including any schedule or attachment thereto and any related or supporting work
papers or information with respect to any of the foregoing, including any amendment thereof.

“Trademarks” shall mean all registered trademarks and service marks, logos, Internet
domain names, corporate names and doing business designations and all registrations and
applications for registration of the foregoing, common law trademarks and service marks and trade
dress.

“True Up Amount” shall have the meaning set forth in Section 1.8(a) of this
Agreement.

“True Up Date” shall have the meaning set forth in Section 1.8(a) of this
Agreement.

“True Up Period” shall have the meaning set forth in Section 1.8(a) of this
Agreement.

 

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ARTICLE VIII

MISCELLANEOUS

8.1 Press Releases and Announcements. No Party shall issue any press release or
public announcement relating to the subject matter of this Agreement without the prior written
approval of the other Party; provided, however, that either Party may make any
public disclosure it believes in good faith is required by applicable law, regulation or stock
market rule, provided that the other Party the ability to review and give its reasonable approval.

8.2 No Third Party Beneficiaries. This Agreement shall not confer any rights or
remedies upon any person other than the Parties and their respective successors and permitted
assigns.

8.3 Entire Agreement. This Agreement (including the documents referred to herein)
constitutes the entire agreement between the Parties and supersedes any prior understandings,
agreements, or representations by or between the Parties, written or oral, with respect to the
subject matter hereof, including, without limitation, that certain letter of intent dated August
18, 2011; provided that the Confidentiality Agreement dated March 22, 2011 between the Buyer and
the Seller shall remain in effect in accordance with its terms.

8.4 Succession and Assignment. This Agreement shall be binding upon and inure to the
benefit of the Parties named herein and their respective successors and permitted assigns. The
Buyer may not assign either this Agreement or any of its rights, interests, or obligations
hereunder without the prior written approval of the Seller, provided that the Buyer may assign some
or all of its rights and interests, but not its obligations, hereunder to one or more Affiliates of
the Buyer. The Seller may not assign either this Agreement or any of its rights, interests, or
obligations hereunder without the prior written approval of the Seller, provided that the Seller
may assign some or all of its rights, interests, but not its obligations hereunder without the
prior written approval of the Buyer. Any attempted assignment in contravention of this provision
shall be void.

8.5 Counterparts and Facsimile Signature. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all of which together shall
constitute one and the same instrument. This Agreement may be executed by facsimile signature or
electronic signature.

8.6 Headings. The section headings contained in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

 

- 41 -

 

8.7 Notices. All notices, requests, demands, claims, and other communications
hereunder shall be in writing. Any notice, request, demand, claim, or other communication
hereunder shall be deemed duly delivered four business days after it is sent by registered or
certified mail, return receipt requested, postage prepaid, or one business day after it is sent for
next business day delivery via a reputable nationwide overnight courier service, in each case to
the intended recipient as set forth below:

	 	 	 
	If to any Seller Party:

	 	Copy to:
	 
	 	 
	GSE Consulting, LP

	 	Wick Phillips Gould & Martin, LLP
	1225 North Loop West, Suite 1100

	 	100 Throckmorton Street, Suite 550
	Houston, TX 77008

	 	Fort Worth, Texas 76102
	 

	 	Attn: David Drez
	 
	 	 
	If to the Buyer:

	 	Copy to:
	 
	 	 
	World Energy Solutions, Inc.

	 	Jeff Swaim, Esq.
	446 Main Street

	 	Mirick O’Connell
	Worcester, MA 01608

	 	100 Front Street
	Attn: General Counsel

	 	Worcester, MA 01608

Any Party may give any notice, request, demand, claim, or other communication hereunder using
any other means (including personal delivery, expedited courier, messenger service, telecopy,
telex, ordinary mail, or electronic mail), but no such notice, request, demand, claim, or other
communication shall be deemed to have been duly given unless and until it actually is received by
the party for whom it is intended. Each Party may change the address to which notices, requests,
demands, claims, and other communications hereunder are to be delivered by giving the other Parties
notice in the manner herein set forth.

8.8 Governing Law. This Agreement shall be governed by and construed in accordance
with the internal laws of the State of Delaware, without giving effect to any choice or conflict of
law provision or rule (whether of the State of Delaware or any other jurisdiction) that would
cause the application of laws of any jurisdictions other than those of the State of Delaware.

8.9 Amendments and Waivers. No amendment of any provision of this Agreement shall be
valid unless the same shall be in writing and signed by each of the Buyer and the Seller. No
waiver by any Party of any right or remedy hereunder shall be valid unless the same shall be in
writing and signed by the Party giving such waiver. No waiver by any Party with respect to any
default, misrepresentation, or breach of warranty or covenant hereunder shall be deemed to extend
to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder
or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.

8.10 Severability. Any term or provision of this Agreement that is invalid or
unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability
of the remaining terms and provisions hereof or the validity or enforceability of the offending
term or provision in any other situation or in any other jurisdiction. If the final judgment of a
court of competent jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the Parties agree that the court making the determination of invalidity or
unenforceability shall have the power to limit the term or provision, to delete specific words or
phrases, or to replace any invalid or unenforceable term or provision with a term or provision that
is valid and enforceable
and that comes closest to expressing the intention of the invalid or unenforceable term or
provision, and this Agreement shall be enforceable as so modified.

 

- 42 -

 

8.11 Expenses. Except as set forth in Article V, each Party shall bear its own costs
and expenses (including legal fees and expenses) incurred in connection with this Agreement and the
transactions contemplated hereby.

8.12 Proration. After Closing, Buyer shall be solely responsible for all amounts due
(i) as rent under the Leases, (ii) utility charges with respect to the business of Seller. Each
Seller shall use its commercially reasonable efforts to have meters for electricity, telephone, gas
and water read as of the close of business on the calendar day before the Closing Date or the
opening of business on the Closing Date and for bills to be rendered to such Seller based upon such
readings. To the extent such meter readings are not used as the basis for calculating all such
charges, the electricity, telephone, gas and water utility charges shall be pro-rated as of the
opening of business on the Closing Date between Sellers and Buyer.

8.13 Submission to Jurisdiction. Each Party (a) submits to the jurisdiction of any
state or federal court sitting in the State of Delaware in any action or proceeding arising out of
or relating to this Agreement or the Ancillary Agreements, (b) agrees that all claims in respect of
such action or proceeding may be heard and determined in any such court, (c) waives any claim of
inconvenient forum or other challenge to venue in such court, (d) agrees not to bring any action or
proceeding arising out of or relating to this Agreement or the Ancillary Agreements in any other
court and (e) waives any right it may have to a trial by jury with respect to any action or
proceeding arising out of or relating to this Agreement or the Ancillary Agreements. Each party
agrees to accept service of any summons, complaint or other initial pleading made in the manner
provided for the giving of notices in Section 8.7, provided that nothing in this
Section 8.13 shall affect the right of either Party to serve such summons, complaint or
other initial pleading in any other manner permitted by law.

8.14 Construction.

(a) The language used in this Agreement shall be deemed to be the language chosen by the
Parties to express their mutual intent, and no rule of strict construction shall be applied against
any Party.

(b) Any reference to any federal, state, local, or foreign statute or law shall be deemed also
to refer to all rules and regulations promulgated thereunder, unless the context requires
otherwise.

(c) Any reference herein to “including” shall be interpreted as “including without
limitation”.

(d) Any reference to any Article, Section or paragraph shall be deemed to refer to an Article,
Section or paragraph of this Agreement, unless the context clearly indicates otherwise.

 

- 43 -

 

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above
written.

	 	 	 	 	 
	 	Buyer:

World Energy Solutions, Inc.

 	 
	 	By:  	/s/
Philip V. Adams	 
	 	 	Philip V. Adams, President and COO 	 
	 
	 	Seller:

GSE Consulting, LP
 	 
	 	By:  	GSE Consulting GP, LLC, its General Partner
 	 
	 	 	By: Glenwood Energy Partners, Ltd. and 	 
	 	 	       Gulf States Energy, Inc., its Members 	 
	 
	 	Glenwood Energy Partners, Ltd.

By: Glenwood Energy Partners GP, LLC

 	 
	 	By:  	/s/
Byron G. Biggs	 
	 	 	Name:  	Byron G. Biggs 	 
	 	 	Title:  	President 	 
	 
	 	Gulf States Energy, Inc.

 	 
	 	By:  	/s/
Jason Helms	 
	 	 	Name: 	Jason Helms	 
	 	 	Title:  	President	 
	 
	 	Solely for purposes of Sections 4.4, 4.5 and 5.1:

Partner:

GSE Consulting GP, LLC
 	 
	 	By:  	Glenwood Energy Partners, Ltd. and
 	 
	 	 	Gulf States Energy, Inc., its Members 	 

 

 

 

	 	 	 	 	 
	 	Glenwood Energy Partners, Ltd.

By: Glenwood Energy Partners GP, LLC

 	 
	 	By:  	/s/
Byron G. Biggs	 
	 	 	Name:  	Byron G. Biggs	 
	 	 	Title:  	President 	 
	 
	 	Gulf States Energy, Inc.

 	 
	 	By:  	/s/
Jason Helms	 
	 	 	Name:  	Jason Helms	 
	 	 	Title:  	President	 

 

- 2 -

 

	 	 	 	 	 
	 

	 	Solely for purposes of Section 4.5:	 	 
	 
	 	 	 	 
	 

	 	/s/ Byron Biggs 

Byron Biggs
	 	 
	 
	 	 	 	 
	 

	 	/s/ Jeremiah Collins 

Jeremiah Collins
	 	 
	 
	 	 	 	 
	 

	 	/s/ Justin Helms 

Justin Helms
	 	 
	 
	 	 	 	 
	 

	 	/s/ Jason Helms 

Jason Helms
	 	 

 

- 3 -

 

Exhibits

	 	 	 
	Exhibit A -

	 	Bill of Sale
	Exhibit B -

	 	Assignment and Assumption Agreement
	 
	 	 
	Schedules
	 	 
	 
	 	 
	Schedule 1.1(b) -

	 	Excluded Asset
	Schedule 1.6 -

	 	Allocation of Purchase Price
	Schedule 1.7

	 	Renewal Rate
	Disclosure Schedule
	 	 

 

 

 

GENERAL BILL OF SALE

REFERENCE is made to the Asset Purchase Agreement dated of even date herewith (the
“Agreement”) by and among World Energy Solutions, Inc., a Delaware Corporation (the “Buyer”), and
GSE Consulting, L.P., a Texas limited partnership (the “Seller”). Capitalized terms not otherwise
defined herein shall have the meaning given to them in the Agreement.

FOR VALUE RECEIVED pursuant to the Agreement, Seller, for itself and its successors and
assigns, does hereby sell, convey, assign, transfer and deliver to and vest in Buyer and its
successors and assigns all right, title and interest in and to all of the Acquired Assets
(collectively, the “Assets”).

Nothing contained in this General Bill of Sale shall supersede, modify, limit, eliminate or
otherwise affect any of the representations and warranties, covenants, agreements or indemnities
set forth in the Agreement. This General Bill of Sale is executed and delivered pursuant to the
terms of the Agreement, and nothing herein shall be construed to modify, terminate or merge any
rights any party thereto may have pursuant to the terms thereof. In the event of any inconsistency
or conflict between the terms of the Agreement and the terms of this General Bill of Sale, the
terms of the Agreement shall prevail.

This General Bill of Sale shall be governed by and construed in accordance with the laws of
the State of Delaware without regard to its conflict of laws provisions.

IN WITNESS WHEREOF, Seller
has executed this General Bill of Sale as an instrument under seal as
of this 31st day of
October, 2011.

	 	 	 	 	 
	 	GSE Consulting, LP
 	 
	 	   By: GSE Consulting GP, LLC, its
General Partner	 
	 	 	By: Glenwood Energy Partners, Ltd. and 	 
	 	 	Gulf States Energy, Inc., its Members 	 
	 
	 	Glenwood Energy Partners, Ltd.

   By: Glenwood Energy Partners GP, LLC

 	 
	 	By:  	/s/
Byron G. Biggs	 
	 	 	Name:  	Byron G. Biggs 	 
	 	 	Title:  	President 	 
	 
	 	Gulf States Energy, Inc.

 	 
	 	By:  	/s/
Jason Helms	 
	 	 	Name: 	Jason Helms	 
	 	 	Title:  	President	 

 

 

ASSIGNMENT AND ASSUMPTION OF CONTRACTS

This Assignment and Assumption of Contracts (this “Assignment”) dated as of October 31, 2011
(the “Effective Date”) is by and between GSE Consulting, L.P. (“Assignor”) and World Energy
Solutions, Inc. (“Assignee”).

RECITALS

Assignor, as seller, and Assignee, as buyer, are parties to an Asset Purchase Agreement dated
as of October 31, 2011 (the “Purchase Agreement”). Capitalized terms used but not defined in this
Assignment have the meanings ascribed in the Purchase Agreement.

Assignor desires to assign all of its right, title and interest in and to all of the contracts
set forth on Schedule 1 attached to this Assignment (collectively, the “Contracts”) to
Assignee and Assignee desires to acquire all of Assignor’s right, title and interest in and to the
Contracts.

TERMS OF AGREEMENT

For and in consideration of the recitals set forth above, and the covenants and agreements set
forth below and other valuable consideration, the receipt of which is hereby acknowledged, Assignor
and Assignee agree as follows:

1. Assignment. Assignor hereby assigns, sets over and transfers to
Assignee all of Assignor’s right, title and interest in the Contracts. Assignor
hereby represents that the Contracts previously delivered to Assignee are complete,
accurate and true copies of the Contracts, including all amendments.

2. Acceptance and Assumption. In accordance with and subject to the
terms of the Purchase Agreement, Assignee hereby (a) purchases and accepts the
assignment, transfer and conveyance, to the extent that such are legally assignable
and necessary consents to assignment have been obtained, of each Seller’s right,
title and interests in, under and to the Contracts; (b) assumes, undertakes and
agrees, subject to valid claims and defenses, to pay, satisfy, perform or discharge
in accordance with the terms thereof all obligations and liabilities of any kind
arising out of, or required to be performed under, such Contracts from and after
the Closing; and (c) assumes, undertakes and agrees to pay, satisfy, perform or
discharge in accordance with the terms thereof all of the Assumed Liabilities.

3. Purchase Agreement. Nothing in this Agreement shall limit,
diminish, alter or impair the rights of the parties under the Purchase Agreement,
particularly with respect to Non-Assignable Assets.

 

1

 

4. Binding Effect. The provisions of this Assignment are binding on
and inure to the benefit of Assignor, its successors and assigns, and Assignee, its
successors and assigns.

5. Headings. The section headings used in this Assignment are for
reference and convenience only and shall not be used in the interpretation of this
Assignment.

6. Counterparts. This Assignment may be signed in several
counterparts, each of which is an original, but all of which constitute a single
instrument.

[signature page follows]

 

2

 

IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of
the date first written above.

	 	 	 	 	 
	 	Assignor:

 	 
	 	GSE Consulting, LP
 	 
	 	   By: GSE Consulting GP, LLC, its
General Partner	 
	 	 	By: Glenwood Energy Partners, Ltd. and 	 
	 	 	Gulf States Energy, Inc., its Members 	 
	 
	 	Glenwood Energy Partners, Ltd.

   By: Glenwood Energy Partners GP, LLC

 	 
	 	By:  	/s/
Byron G. Biggs	 
	 	 	Name:  	Byron G. Biggs 	 
	 	 	Title:  	President 	 
	 
	 	Gulf States Energy, Inc.

 	 
	 	By:  	/s/
Jason Helms	 
	 	 	Name: 	Jason Helms	 
	 	 	Title:  	President	 
	 	

Assignee:

	 	World Energy Solutions, Inc.

 	 
	 	By:  	/s/
Philip V. Adams	 
	 	 	Philip V. Adams,
President and COO	 

 

 

 

SCHEDULE I

CONTRACTS

	1.	 	All Assigned ContractsExhibit 10.1

EXHIBIT 10.1

CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES

AND EXCHANGE COMMISSION. BRACKETED ASTERISKS ([* *]) DENOTE OMISSIONS.

GLOBAL SUPPLY AGREEMENT

      This Global Supply Agreement is entered into as of this 29th day of August,
2005 (the “Effective Date”) by and between APPLIED MATERIALS, INC., a Delaware corporation, with
places of business in Santa Clara, California, and Austin, Texas, and Advanced Energy Industries, a
Delaware corporation, with its principal place of business in Fort Collins, Colorado.

      In consideration of the mutual promises and other valuable consideration set forth in this
Agreement the Parties agree as follows:

1. Definitions.

      In addition to those definitions set forth elsewhere in this Agreement, the following
capitalized terms shall have the meanings specified below:

(a) “Agreement” means (i) this Global Supply Agreement, (ii) Attachment 1 hereto, (iii)
Exhibit A hereto and (iv) all Authorized Demand Signals, as each may be amended from time to time.

(b) “Applied” means Applied Materials, Inc., including its subsidiaries existing on or
after the Effective Date.

(c) “Applied Web Site” means that portion of the password-protected Web Site, including the
supplier filing cabinet database maintained by Applied and located at http://gmox.amat.com,
Supplier Filing Cabinet. to which Supplier may be given access for the purpose of performing under
this Agreement.

(d) “Attachment” means any document that is referenced in this Global Supply Agreement and
either attached hereto or located on the Applied Web Site. All Attachments are deemed to be
incorporated into this Agreement by this reference.

(e) “Authorized Demand Signal” means an order for Item(s) communicated pursuant to this
Agreement by Applied to Supplier via (i) a purchase order (whether in hardcopy or electronic form),
(ii) EDI or other electronic transmission, or (iii) Applied’s designated on-line purchasing system.
All Authorized Demand Signals are deemed to be incorporated into this Agreement by this reference.

(f) “Business Processes” means those processes, requirements and forms applicable generally
to Applied’s supply chain, pertaining to ordering, payments, packaging, delivery, shipment, crating
and repair of Items, among other things. All Business Processes shall be communicated to Supplier
through posting on the Applied Web site. Certain Business Processes referred to in this Agreement
are identified by their title in italics.

(g) “Business day” and “business hour” shall mean those days and those hours on
which Supplier’s Ft. Collins, Colorado facility is normally open for business and between 8:00 am
and 5:00 pm local time for such facility.

(h) “Internal Applied Data” means planning data, product engineering or manufacturing data,
information, forecasts, Specifications or Confidential Information that is recorded, displayed,
maintained or accessed on the Applied Web Site or other Applied internal databases or intranets.

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Page 1

 

GLOBAL SUPPLY AGREEMENT

(i) “Item” means a component, equipment, material, subassembly or other good and related
software and services specified in (i) Attachment 1, (ii) an Authorized Demand Signal; or (iii) a
purchase order delivered by Applied to Supplier prior to the Effective Date and undelivered as of
such date.

(j) “Parties” means Applied and Supplier and “Party” shall mean either Applied or Supplier
as appropriate.

(k) “Services” means the repair, refurbishment, exchange or upgrade of Items and those
other services performed by Supplier under this Agreement.

(l) “Specifications” means such drawings, designs, instructions, technical or performance
requirements or other technical information relating to the design, development, manufacture,
installation, assembly, testing and/or use of one or more Items.

(m) “Sub-tier Supplier” means a member of Supplier’s direct or indirect sub-tier supply
base (including, without limitation, subcontractors and vendors of Supplier) that provides goods
and/or services in connection with an Item.

(n) “Supplier” means Advanced Energy Industries, Inc. and those of its subsidiaries and
affiliates authorized in writing by Applied to perform under this Agreement.

2. Scope of Agreement; Term.

(a) Scope of Agreement. This Agreement sets forth the terms and conditions governing the
purchase and sale of Items, the relationship between Applied and Supplier, and compliance with
Applied’s Business Processes. Applied Materials, Inc. and its subsidiaries shall be entitled to
purchase Items from Supplier under this Agreement, and shall have all of the rights of “Applied”
under this Agreement. As to any purchase of Items under this Agreement by Applied Materials, Inc.,
all obligations under this Agreement are the sole obligations of Applied Materials, Inc. As to any
purchase of Items under this Agreement by a subsidiary of Applied, all obligations under this
Agreement are the sole obligations of such subsidiary. Notwithstanding the foregoing, if an Applied
subsidiary [* *]; Supplier notifies Applied Materials, Inc. in writing of [* *], and Applied
Materials, Inc. [* *] submitted by Supplier, Applied Materials, Inc. will either [* *]. This
Agreement shall not apply to Applied’s purchase, and Supplier’s sale, of any goods or services
pursuant to (i) a purchase order or other agreement where the purchase order or other agreement is
expressly accepted in writing by Supplier which expressly identifies this Global Supply Agreement
and states that the terms and conditions of the purchase order or other agreement, rather than this
Agreement, shall govern the transaction; or (ii) a joint development or license agreement, except
to the extent expressly provided therein.

(b) Term. This Agreement shall commence on the Effective Date and, unless extended as set
forth in this Section 2 or terminated as set forth in Section 21, shall expire on August 28, 2008
(the “Term”). At any time prior to expiration of the Term, Applied may, at its sole option, extend
the Term for one (1) additional period not to exceed [* *] by delivering written notice to Supplier
of such extension no less than [* *] prior to the expiration of the Term of this Agreement. The
Parties acknowledge that after the Term they may desire to renew this Agreement or enter into a
similar volume supply agreement. If Supplier decides during the Term that it does not wish to
enter into such renewal or volume supply agreement, Supplier shall provide notice thereof to
Applied at least [* *] prior to the expiration of the Term.

(c) Compliance with Business Processes. Applied has implemented, and from time to time
updates and revises, Business Processes applicable generally to Applied’s supply chain.
Descriptions of all Business Processes shall be provided to Supplier through posting on the Applied
Web Site. Supplier agrees to comply with all Business Processes identified in this Agreement that
are in effect as of the Effective Date and as may be amended in accordance with this subsection.
If Applied desires to amend a Business

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Page 2

 

GLOBAL SUPPLY AGREEMENT

Process, it shall give notice thereof either by e-mail directed to either Supplier’s contacts noted
in this document or Supplier’s contacts designated on the Applied Web Site, or to their successors
or by referring Supplier to the Applied Web Site, to access such amended Business Process.
Supplier agrees to regularly access the Applied Web Site to review any amended Business Processes.
No amendment to a Business Process described in Sections 11(o) (Technology Escrow Agreement) or 14
(Supplier Performance Plan) shall become effective unless Supplier consents thereto in writing.
Amendments to all other Business Processes shall be deemed accepted by Supplier if Supplier fails
to object thereto in writing within [* *]  after the date on which the amended Business Process
is communicated to Supplier.

(d) Amendments to Attachment 1. The Contract Prices set forth in Attachment 1 represent
the Parties’ agreed upon pricing for those Items that have been awarded to Supplier through a
request for quotation or other business award process (‘Award Process’). Any conditions included
in the Award Process that are relevant to the Contract Price shall also be included in Attachment
1. Notwithstanding the order of precedence set forth in Section 26(s) Entire Agreement, the Parties
hereby agree that with respect to Contract Prices, if there is a conflict between the terms of
Attachment 1 and the GSA, the terms of Attachment 1 shall control. In addition, in the event of a
change in business conditions not contemplated by the Parties at the time of the execution of the
Agreement, either Party may request further amendments to Attachment 1. Upon such request the
Parties shall, in good faith, meet and discuss the proposed amendment and upon the Parties’ mutual
agreement to any change, amend Attachment 1 accordingly.

(e) [* *]. Subject to [* *]‘s compliance with the requirements of this Section 2(e)
Supplier may [* *] if an Item qualifies as an [* *] Item, [* *] Item or a [* *] Item.

(f) [* *] Item means an Item for which a [* *] is no longer available either because the [* *] is
no longer [* *] or the [* *].

(g) [* *] Item means an Item which has [* *] and consistently [* *] resulting in a significant [*
*].

(h) [* *] Item means an Item for which the [* *] have significantly [* *] resulting in a [* *] of
either (a) [* *] for an Item which has a Contract Price of [* *]; or (b) [* *] for an Item which
has a Contract Price of [* *].

(i) Once [* *] determines an Item to be [* *], [* *] or [* *], [* *] shall notify [* *] in writing
of such determination.

(j) For [* *] Items [* *]‘s notification to [* *] must be in the form of a completed [* *]. Upon
the expiration of [* *]  following the submission of a completed [* *], [* *] may pursue the
[* *]. Thereafter, unless otherwise agreed by the Parties, [* *] may continue to purchase [* *]
Items until such time as [* *] has qualified a [* *] and the [* *] Item is [* *]. If, after the
expiration of [* *] months following the [* *] submission, [* *] chooses not to pursue the [* *],
[* *] may within [* *] days after the expiration of the [* *] months following the [* *] submission
purchase a [* *]. Any [* *] will be subject to availability and unless otherwise agreed by the
Parties will not exceed an amount equivalent to [* *].

(k) For [* *] Items and [* *] Items, [* *]‘s written notification to [* *] of the classification of
these Items will include a request for [* *]. If following such [* *] the Parties are [* *] may
submit a [* *]. Upon expiration of [* *] months following the submission of a completed [* *], [*
*] may pursue the [* *]. Thereafter, unless otherwise agreed by the Parties, [* *] may continue to
purchase [* *] and/or [* *] Items until such time as [* *] has qualified a [* *] and the [* *] Item
is [* *]. If, after the expiration of [* *] months following the [* *] submission, [* *] chooses
not to pursue the [* *] may purchase a [* *]. Any [* *] will not exceed an amount equivalent to [*
*], unless otherwise agreed by the Parties. Alternatively, the Parties may agree to [* *].

3. Orders.

(a) Orders. All orders for Items shall be in the form of an Authorized Demand Signal. An
Authorized Demand Signal shall (i) identify the Item(s) requested; (ii) state the quantity, date,
time and place of delivery, and price of the Item(s) requested (unless previously specified in
Attachment 1, which shall

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Page 3

 

GLOBAL SUPPLY AGREEMENT

control); and (iii) specify if it is for a Spares Down Order (as defined in this Agreement).
Supplier shall accept communications of Authorized Demand Signals in the format designated by
Applied.

(b) Acceptance/Rejection of Orders. Supplier shall promptly communicate its acceptance or
rejection of an Authorized Demand Signal. Supplier shall not, however, reject an Authorized Demand
Signal for Items set forth on Attachment 1 so long as the Authorized Demand Signal conforms to the
terms and conditions of this Agreement. Any notice of rejection shall state the specific grounds
for such rejection. Certain Authorized Demand Signals shall be deemed to be accepted as follows:

      (i) An Authorized Demand Signal that is for a “Spares Down Order” will be [* *] accepted by
Supplier upon the [* *] after its receipt by Supplier unless Supplier objects by electronic or
telephonic notice within said [* *] period. Any telephonic notice of rejection shall be followed
by the delivery of written or electronic notice to Applied within [* *] of delivery of the rejected
Authorized Demand Signal.

      (ii) An Authorized Demand Signal for an Item identified as “[* *],” “[* *]” or similar
designation on Attachment 1 sent via EDI or other electronic transmission will be [* *] accepted by
Supplier upon the expiration of [* *] after its receipt by Supplier, unless Supplier objects by
electronic notice within said [* *].

      (iii) An Authorized Demand Signal for an Item set forth on Attachment 1 that is an Applied
purchase order (whether in hard copy or electronic form) shall be accepted upon the terms specified
within such order, provided that the Authorized Demand Signal conforms to the terms of this
Agreement and Attachment 1; or if the Authorized Demand Signal does not conform to the terms of
this Agreement and Attachment 1 such Authorized Demand Signal shall be accepted upon the terms
specified within such order provided that Supplier has [* *] the Authorized Demand Signal within [*
*]. For any other Authorized Demand Signal that is an Applied purchase order (whether in hard copy
or electronic form) such Authorized Demand Signal shall be accepted upon the terms specified within
such Authorized Demand Signal, provided that (a) the Authorized Demand Signal was submitted to [*
*] set forth in the Applied Web-Site database, (b) Supplier has failed to reject the Authorized
Demand Signal within [* *] and (c) the Item is a product that [* *] has, within the [* *] either to
[* *] or to any [* *] and the Item is not a product that [* *] has designated as [* *] or [* *].
For items that have not been sold and delivered within the preceding [* *], Supplier will make
commercially reasonable efforts to accept within the [* *] window, but failure to do so will not
cause [* *]. Nothing in this Section 3(b) shall require Supplier to provide to Applied products
that are subject to an exclusivity agreement between Supplier and a third party, and for which the
third party has not granted any consent to Supplier’s sale of such products to Applied for the
purpose of supporting an Applied customer service agreement.

In all events, any objection by Supplier to the terms of an Authorized Demand Signal shall be
deemed waived upon Supplier’s delivery of Items.

(c) Order Adjustments. Supplier acknowledges that, due to the highly cyclical nature of
the semiconductor equipment industry and other factors, Applied may be required to modify
Authorized Demand Signals from time to time. Applied may increase the quantity of Items in any
Authorized Demand Signal at any time prior to the scheduled delivery date and, provided such
increase falls within the Quantity Flexibility Matrix set forth below, (i) Supplier will deliver
such increased quantity with [* *] charges including [* *] or the like except as may be provided
for in Attachment 1, and (ii) such increase will not affect the delivery schedule of Items
previously ordered. This Section 3(c) shall not apply to orders for Items that are not set forth
on Attachment 1 unless the Authorized Demand Signal accepted by Supplier as set forth in this
Section 3 incorporates this Section 3 by reference.

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GLOBAL SUPPLY AGREEMENT

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Weeks until

Delivery Date

	 	 	[* *]

weeks
	 	 	[* *]

weeks
	 	 	[* *]

weeks
	 	 	[* *]

weeks
	 	 	[* *]

weeks	 
	 	Flexibility of Quantity
of Items in an
Authorized Demand
Signal

	 	 	[* *]
	 	 	[* *]
	 	 	[* *]
	 	 	[* *]
	 	 	[* *]	 
	 

If Applied requires an increase in the quantity of Items in any Authorized Demand Signal for Items
in Attachment 1 and such increase does not fall within the Quantity Flexibility Matrix set forth
above, then, if feasible and as mutually agreed upon by the Parties, Supplier will provide such
increased Items in accordance with the modified Authorized Demand Signal and Applied shall pay
costs resulting therefrom, provided such costs are (i) reasonable; (ii) authorized by Applied in
writing in advance of delivery; and (iii) identified separately from the unit price on Supplier’s
invoice to Applied.

(d) Reduction or Cancellation of an Authorized Demand Signal. If Applied requires a
reduction in the quantity of Items in any Authorized Demand Signal, or cancels any Authorized
Demand Signal, the Parties’ respective rights and obligations shall be as specified in Section 21.

(e) Purchases by Authorized Third Party. Certain Items may be incorporated into
subassemblies or other products made for Applied by a third party. In such event, Applied may
designate the third party as authorized to purchase such Item(s) from Supplier and, upon Supplier’s
receipt of notice thereof, Supplier shall enter into an agreement with such third party to sell
such Item(s) to such third party on terms (including [* *]) [* *] the terms set forth in this
Agreement specifically for use on subassemblies or other products that such third party will sell
directly to Applied.

(f) No Volume Commitment. Applied does not commit to purchase a specific volume of any
Item from Supplier except as specified in an Authorized Demand Signal and, subject to [* *] Rights
(as defined in Section 11(b)), or unless otherwise agreed in writing, Applied may manufacture or
buy goods and/or services from Third Parties that are identical or similar to the Items.

4. Pricing.

(a) Contract Price. “Contract Price” means the domestic and/or export price in U.S.
Dollars for an Item as set forth on Attachment 1; provided, that if a price for an Item is not
specified on Attachment 1, then the Contract Price shall be the price set forth in an Authorized
Demand Signal that is accepted by Supplier in accordance with this Agreement. The Contract Price
for each Item shall remain in effect throughout the Term, except for any price changes mutually
agreed to by the Parties from time to time in writing. In the event Applied desires to purchase an
Item not listed in Attachment 1, authorized representatives of Applied and Supplier will agree upon
the price and delivery date in writing as a separate transaction, but subject to the terms of this
Agreement.

(b) Pricing Components. The Contract Price, and any quotations for Items, shall include
all finishing, testing, inspecting and packaging fees, applicable royalties and all applicable
taxes (excluding sales, use and similar taxes). Any quotations for Items shall include all costs
relating to warranties. Under typical circumstances, quotations for Items shall not include any
amounts relating to (i) initial set-up charges; (ii) costs for special dies, tools, patterns or
test fixtures; and (iii) non-recurring engineering fees amortized into the per unit price, unless
separately identified and itemized. Quotations for prototypes shall reflect the total value of
Applied’s business with Supplier. In this regard, Supplier shall consider providing a specific
number of prototype Items [* *] and/or pricing prototypes [* *].

(c) Transportation Costs. For Items to be delivered to a destination within the country
from which the shipment originated, pricing in a quotation or as set forth in Attachment 1 shall
not include any transportation costs, other than insurance expense, which will be separately
identified and itemized,

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GLOBAL SUPPLY AGREEMENT

provided that Applied’s Transportation Routing Guide then in effect for such Items offers Supplier
a direct bill-to-Applied option for such transportation costs in accordance with Section 6(b)(i).
If Applied’s Transportation Routing Guide then in effect for such Items does not offer Supplier a
direct bill-to-Applied option for such transportation costs in accordance with Section 6(b)(i), all
transportation costs shall be separately identified and itemized in a quotation. For Items to be
delivered outside the country from which the shipment originated, all costs for shipping,
import/export fees, customs, insurance and other transportation expenses shall be separately
identified and itemized in a quotation, except in cases where Applied’s Transportation Routing
Guide then in effect for such Items offers Supplier a direct bill-to-Applied option for such
transportation costs in accordance with Section 6(b)(i).

(d) Price Adjustments. Supplier shall implement all committed price [* *] set forth in
this Agreement and on Attachment 1. All quantities of Items purchased by Applied and its
subsidiaries purchasing under this Agreement will be aggregated for purposes of calculating
applicable price adjustments. Any change in circumstances (such as a change in Applied’s [* *] or
a change in industry conditions), may result in a review of Agreement terms and/or negotiated
adjustment in the Contract Price. Subject to Section 11(f) and 11(g) of this Agreement regarding
prohibited activities and confidentiality, if [* *] any good which is [* *], at a [* *] price than
the Contract Price, then [* *] agrees to notify [* *] thereof and, if acceptable to [* *], to [*
*].

(e) Taxes. Applied will pay any applicable sales, use or similar tax imposed in connection
with the sale of Items to Applied; provided, that Supplier shall not charge or collect, and Applied
shall have no liability for, taxes on any sale of Items for which Applied has provided Supplier
with an appropriate resale certificate or other documentation evidencing an exemption from such
taxes. For all sales of Items upon which tax reimbursement to Supplier is applicable, Supplier
shall separately identify and itemize all applicable taxes on invoices submitted to Applied.

(f) [* *]. Subject to Section 11(f) and Section 11(g) of this Agreement, Supplier warrants
and agrees that, if such sales are permitted, it [* *] which offer the [* *] as any Items [* *].
When making the determination as to whether [* *], Supplier shall take into account the [* *]. If
Supplier enters into an agreement and [* *], then Supplier will provide prompt notice to Applied,
and if agreed upon by Applied, this Agreement [* *]. If, as a result of any such [* *], the [* *]
of an Item is [* *], Supplier will [* *]. Notwithstanding the foregoing, in no event shall Supplier
offer or sell Items to Applied at prices or on terms that would be unlawfully discriminatory under
applicable law.

5. Delivery of Items.

(a) Delivery Requirements.

Time is of the essence as to the delivery of all Items ordered under this Agreement. Supplier
shall meet the (i) negotiated lead time; (ii) order adjustment requirements as set forth in Section
3; and (iii) time, date, location and other delivery requirements for Items, as specified in
Attachment 1 or, if not set forth in Attachment 1, as set forth in the Authorized Demand Signal for
said Items, irrespective of which Applied organization or division has issued the Authorized Demand
Signal. Delivery will be considered timely only if Items are delivered in the correct quantity,
and at the time, date and location specified in the Authorized Demand Signal. If necessary for
Supplier to meet its delivery requirements, Supplier at its expense, will use expedited delivery
methods to complete and deliver the Items within the lead times specified in Attachment 1.
Supplier will also use expedited delivery methods to complete and deliver Items outside of the lead
times specified in Attachment 1 if such terms have been accepted by Supplier in accordance with
Section 3(b) of this Agreement and, in such instances, Supplier may, in addition to the price of
the Items, charge Applied and expedited delivery fee; provided that Applied has agreed to such fee
prior to Supplier’s acceptance of the Authorized Demand Signal. If Applied requests a change to
the delivery date set forth in an Authorized Demand Signal and Supplier agrees to such change
Supplier may use expedited delivery methods to complete and deliver the Items in accordance with
the revised delivery date, and may charge Applied an expedited delivery fee, provided that Applied
has agreed to such fee prior to Supplier’s acceptance of the revised delivery date.

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(b) Delivery Requirements for Spares Down Orders. Supplier acknowledges that it may be
necessary to provide expedited support and delivery Service for the division of Applied responsible
for furnishing spare parts and Service to Applied’s customers, referred to as Customer Productivity
Support (“CPS”) or its successor entity. As to any Authorized Demand Signal identified as a
“Spares Down Order,” Supplier shall

(i) respond (via telephonically or electronically) within [* *] to any Applied inquiry
relating to a Spares Down Order if such Order is submitted to [* *] for the Item in
question;

(ii) for any Authorized Demand Signal accepted by Supplier, ship the Items set forth in the
Spares Down Order within

i. [* *] following receipt of a Spares Down Order if such Order is submitted to [*
*] for the Item in question, and acknowledged by Supplier before [* *] Supplier
local time; or if the Spares Down Order is acknowledged by Supplier after [* *]
Supplier local time, then before [* *] Supplier local time the following [* *];

ii. [* *] following receipt of a Spares Down Order if such Order is submitted to [*
*] for the Item in question, and acknowledged by Supplier before [* *] Supplier
local time; or, if the Spares Down Order is acknowledged by Supplier after [* *]
Supplier local time, then before [* *] Supplier local time the following business
day; and

(iii) notify (via telephone or electronically) Applied when the Item set forth in the Spares
Down Order leaves the Supplier’s facility. If Supplier cannot meet all of Applied’s
delivery requirements for Items ordered, then Supplier shall (A) provide notice to Applied
of such event, and (B) prioritize Items set forth in a Spares Down Order over other Items
ordered via any other Authorized Demand Signal. Supplier shall comply with any special
packaging and labeling requirements as to any Spares Down Order, as set forth in the
Packaging Specification (0250 00098), Unit Packaging Label Specifications (0250-60124) and
Packaging (0250-00098 & 0251-05100) and Marking (0250-01033) located on the Applied Web
Site.

(c) Remedies. If Supplier fails to deliver any Item at the time and place as set forth
in an Authorized Demand Signal accepted by Supplier in accordance with this Agreement, Applied
shall have the right, at its sole option, to (i) require Supplier, at [* *]‘s expense, to [* *] to
complete and deliver the Items; (ii) allocate or redirect the Supplier’s deliveries of Items to
certain Applied facilities; or (iii) [* *] and charge Supplier with [* *], which cost may include
[* *]. If Applied elects to [* *] above, then Applied agrees that the [* *] for which the Supplier
will be liable, including the [* *].

6. Shipping and Risk of Loss.

(a) Shipping and Packaging Requirements.

      (i) Unless otherwise agreed in writing by the Parties, Supplier will ship all Items in
accordance with Transportation Routing Guide located on the Applied Web Site, including use of
approved carriers as may be applicable given the classification of the shipment (i.e., domestic or
international).

      (ii) Supplier shall comply with any special packaging and labeling requirements for Items as
set forth in Unit Packaging Label Specifications (0250-60124) and Packaging (0250-00098 &
0251-05100) and Marking (0250-01033) located on the Applied Web Site. In the event such Business
Processes are not applicable to an Item, the Item shall be packaged, marked and labeled in
accordance with best commercial practices. In all events, however, Supplier must include a valid
packing slip number or package ID on each package or shipment of Items.

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(b) Shipments and Insurance.

      (i) Shipping Costs. For all Items, [* *] shall be responsible for all costs and
expenses (other than insurance) to deliver the Items to the applicable destination point once such
Items have been tendered to the carrier, provided that [* *] complies with [* *] then in effect.
All delivery costs and expenses for such shipment shall be specified as “[* *]” on bills of lading
or shipping receipts, to be paid directly by [* *]. Unless specifically approved by [* *] in
advance, [* *] shall not be responsible for delivery costs and expenses (i) in excess of the costs
determined under [* *]; (ii) payable to carriers not approved under [* *], (iii) incurred as a
result of [* *]‘s need to [* *], or (iv) incurred in connection with the transportation of Items
between [* *] or any other supplier.

      (ii) Insurance and Risk of Loss. In all events, Supplier shall be responsible to
insure or self insure such Item during transport up to at least the Contract Price of such Item.
Supplier shall be responsible for the risk of loss to an Item until delivered to the applicable
destination point and accepted by Applied. In addition, Supplier’s responsibility for risk of loss
continues with respect to any Item rejected by Applied, or as to any Item for which acceptance is
revoked, except if such loss is caused by the gross negligence of Applied’s employees acting within
the scope of their employment.

7. Acceptance and Title Transfer.

(a) Acceptance and Title Transfer. Title to an Item will transfer to Applied upon
acceptance of an Item, which shall occur in the event that: i) Applied or its designee has received
the Item as the specified destination point; and ii) either 1) Applied or its designee has entered
the Item into Applied’s internal systems, or 2) a period of [* *] from the delivery of the Item has
elapsed, whichever period of time is [* *]. Applied may reject and return any Item that does not
conform to the applicable Specifications and incur no liability or obligation related to such Item.
As to Items that are rejected and returned, Applied may recover and offset or adjust payments in
respect of such Items, including any costs or fees related to shipping and insuring such Items.

(b) Payment Upon Consumption Model. “Payment Upon Consumption” means a payment process
by which Supplier would retain title to all Items until such time as Applied has fully integrated
such Items into the products manufactured by Applied. Upon Applied’s request to implement a
Payment Upon Consumption process, Supplier will not unreasonably refuse to do so, and the Parties
agree to negotiate in good faith to enter into an agreement setting forth the terms and conditions
of such process.

8. Payment.

(a) Payment Terms. Payment by Applied for an Item will be made [* *] from the later of
the date of (i) Applied’s receipt of an invoice for the Item consistent with the terms of this
Agreement and (ii) Applied’s acceptance of the Item. Applied is authorized by Supplier to make
payments under this Agreement by either check or electronic funds transfer, and Supplier shall
provide Applied with the information necessary for electronic funds transfer capability.

(b) Invoices. Upon Applied’s request, Supplier shall not unreasonably refuse to
participate in Applied’s Evaluated Receipts Settlement (“ERS”) Program, whereby Supplier is paid
based on the quantity of Items received and the Contract Price for such Items, without Supplier
providing an invoice. The terms and conditions of the ERS Program are as set forth in ERS Program
Requirements located on the Applied Web Site. If the Parties agree that Supplier will not
participate in the ERS Program, then Supplier will remit an Item invoice to Applied no earlier than
when the Item is shipped to Applied and adhere to the requirements for invoices section of
Invoicing Requirements for Non-ERS Suppliers located on the Applied Web Site.

(c) Effect of Payment and [* *]. Applied’s payment for an Item shall not affect the [* *]
nor shall it preclude [* *]. All payments shall be subject to adjustment for [* *]. Applied may
at any time [* *].

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(d) Reconciliation of Payment Discrepancies. As to any payment discrepancy, including any
claim by Supplier against Applied for payment, nonpayment, damages or other adjustments as to
delivered Items (a “Payment Discrepancy”), Supplier must, as a condition precedent to any such
claim, give notice of its Payment Discrepancy claim by properly completing and delivering to
Applied a Payment Discrepancy notification for all delivered Items within [* *] from the earliest
of any of the following which discloses a Payment Discrepancy: (i) the issuance of an ERS report
under the ERS Program; (ii) the date on which an invoice is returned to Supplier; (iii) the date of
partial payment or (iv) the date of delivery of notice to Supplier of a Payment Discrepancy. The
required Payment Discrepancy form, submission procedures and contact information are as set forth
in Supplier Payment Discrepancy Claims Process located on the Applied Web Site.

9. Confidentiality and Prohibited Activities.

(a) General. “Applied Confidential Information” means all information obtained by,
disclosed to, or developed by Supplier and that is based on, incorporates, constitutes or derived
from any of the following: (i) samples, schematics, drawings, designs, Specifications, manuals,
Applied Forecasts or other forecasts, Authorized Demand Signals, customer information and other
technical, business, financial or trade secret information obtained from or through Applied
including Internal Applied Data; and (ii) all other proprietary, technical, business, financial or
trade secret information obtained by Supplier from or through Applied during the term of Applied
and Supplier’s business relations, or in connection with the negotiation, performance or
enforcement of this Agreement; provided that the information disclosed to Supplier by Applied or
upon which Supplier based or derived such information was clearly marked as ‘Applied Materials
Confidential’ or with some similarly restrictive legend. Confidential Information does not include
information that (A) is or becomes a matter of public knowledge through no fault or act of
Supplier; (B) is rightfully received by Supplier from a third party not subject to restriction on
disclosure of such information; (C) is independently developed by Supplier without the use of any
Confidential Information of Applied’s; or (D) was rightfully in the possession of Applied prior to
its disclosure by or on behalf of Supplier; provided, however, that such information shall be
Confidential Information to the extent that (1) such information constitutes specific information,
even if it is embraced by more general information which is a matter of public knowledge or in the
possession of Supplier, or (2) such information is a combination of individual items of
information, even if that combination could be reconstructed from non-confidential sources if none
of the non-confidential sources shows the whole combination and its principle of operation; and,
provided further, that the sale or unrestricted disclosure of an Item or other article or product
made through a confidential manufacturing process of Supplier shall not be deemed to constitute a
public disclosure of the process. Supplier shall use reasonable care to protect the
confidentiality of Confidential Information of Applied and in any event, shall use at least that
degree of care that such Supplier uses to protect its own like information.

(b) Permitted and Prohibited Activities. Except as expressly set forth in this Section
9(b) or agreed to by Applied in writing, Supplier (i) may use Confidential Information solely for
the purpose of providing Items to Applied and may provide Confidential Information only to those
individuals who need to know such Confidential Information to provide Items to Applied, provided
that it is clearly marked as “Applied Materials Confidential Information;” and (ii)shall not use
or disclose any Applied Confidential Information for any purpose, including: (a) reverse
engineering the Items; (b) developing, designing, manufacturing, engineering, refurbishing, selling
or offering for sale, any good or service in violation of Subsections 11(g) and (h) of this
Agreement; or (c) assisting any third party in any manner to perform any such activities. Subject
to Section 11 below, in addition, Supplier shall not make or sell to any third party any good or
service that may be used or sold as a replacement for any Item or other good provided or sold by
Supplier for which Applied provided Supplier with Confidential Information at any time, including
modifications to Items. Supplier’s obligations under this Section 9 shall not apply to any
disclosure required by applicable law, court order or legal process, provided that (1) with respect
to any disclosure required under the securities laws, Supplier shall (a) promptly notify Applied of
its intent to make such disclosure, which notice shall be in writing and delivered at least [* *]‘
prior to the intended disclosure (or such shorter period as necessary to comply with applicable
law), (b) seek confidential treatment from the

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Securities and Exchange Commission (SEC) for any agreements or other documents filed with the SEC
by proposing redactions for all financial terms and such other terms as agreed by the Parties after
conferring in good faith and consistent with applicable law; (2) with respect to any disclosure
required pursuant to court order or legal process, Supplier shall provide Applied with at least [*
*] advance written notice to permit Applied to seek a protective order and shall reasonably
cooperate with the Applied in connection therewith; and (3) with respect to any other disclosure
required by applicable law, Supplier will use reasonable efforts to provide Applied with reasonable
advance written notice of such required disclosure, use reasonable efforts to secure confidential
treatment of the Confidential Information prior to its disclosure, reasonably cooperate with
Applied in connection therewith, and disclose only the minimum amount of information necessary to
comply with such requirements.

(c) Other NDA’s. During the business relationship between Supplier and Applied one or more
NDA’s may be, or may have been, entered into. In the event of an apparent conflict between or
among provision(s) of this Agreement and any NDA, such provisions shall be read in a mutually
consistent way, or if no such reading is reasonably possible, the provision(s) that are most
protective of the confidential information of either Party shall take precedence over conflicting
or less protective provision(s).

(d) Equitable Relief. Supplier agrees that Applied would suffer irreparable harm for which
monetary
damages are an inadequate remedy, and that equitable relief is appropriate, if Supplier
were to breach or threaten to breach any obligations in this Section 9.

(e) Press Releases/Publicity Not Authorized. Except as specified in Section 9(b) above,
Supplier will not issue any press release, advertising, publicity or public statement or in any way
engage in any other form of public disclosure that indicates Applied’s relationship with Supplier
or implies any endorsement by Applied of Supplier or Supplier’s products or Services, without the
prior written approval of Applied.

(f) Disposal of Confidential Information. Upon the termination or expiration of the
Agreement, and otherwise upon the request of Applied, Supplier will promptly return to Applied all
Applied Confidential Information and all documentation that reveal or are based in any way on
Applied Confidential Information, and permanently eliminate the same from all of its computer and
information storage systems. Thereafter, Supplier shall cease all use of Applied Confidential
Information. Supplier may, however, with Applied’s prior written approval, destroy any Applied
Confidential Information or documentation, provided that Supplier certifies to Applied the
destruction of such Confidential Information or documentation reflecting same. In addition,
Supplier agrees it will immediately return to Applied any materials provided to it to facilitate
electronic access to Internal Applied Data, including any SecureID® key, documents, software or
other items.

10. Electronic Access to Internal Applied Data.

(a) General. If Supplier is granted access to Internal Applied Data then, in addition
to Supplier’s obligations under Sections 9 and 11, the terms and conditions of this Section shall
apply. Supplier’s access to the Internal Applied Data is subject to compliance with (i) the terms
of use, if any, of the Applied Web Site or such other database or intranet, as applicable, and (ii)
any technical and security requirements of Applied, including the issuance of passwords and
requirements related to using Applied’s Virtual Private Network and [* *]. Applied may terminate
Supplier’s right of access or change the method of access to the Internal Applied Data at any time.
In no event shall Supplier facilitate or enable access to Internal Applied Data by any Sub-tier
Supplier or other third party.

(b) Use. If Applied grants Supplier access to the Internal Applied Data, then
Supplier shall have the limited right to download, store, display and use Applied Internal Data for
the sole purpose of performing its obligations under this Agreement in connection with the design,
manufacture and sale of Items to Applied. Supplier may not use the Applied Internal Data in any
other way, commercially or otherwise. Unless otherwise notified by Applied, Supplier may store
copies of Internal Applied Data on Supplier’s

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networks and information storage systems, provided, such Internal Applied Data is stored either on
hardware that is dedicated solely to Applied, or otherwise separated from other information of
Supplier, so that the Internal Applied Data is not accessible to individuals except as authorized
by this Agreement. If Applied provides Supplier with any recommendations for establishing an
interface or other methods of accessing the Internal Applied Data, Supplier assumes all risk in
implementing any such recommendation. Supplier acknowledges that the Internal Applied Data may be
made available via a software program which, for convenience, may identify Supplier as the “Design
Owner” or “Owner” in certain instances, or use other terms which may appear to be inconsistent with
the terms of Section 11 (Intellectual Property Rights). Such inconsistent terms will not apply to
nor affect the terms of Section 11 of this Agreement.

(c) Consent to Monitoring. Supplier agrees that its access to and use of Internal
Applied Data and all acts in connection with Applied’s internal systems are recorded and may be
monitored. Supplier expressly consents to such recording and monitoring. If such recording or
monitoring reveals possible evidence of criminal activities involving any individual, then Applied
may provide such evidence to the appropriate law enforcement organization and take any other
appropriate action.

11. Intellectual Property Rights.

(a) “[* *] Rights” means all rights, whether registered or unregistered, arising from or
relating to patents, copyrights, confidential information or trade secrets, trademarks, service
marks, trade names, mask works, moral rights and other proprietary rights in any jurisdiction in
and to all [* *] that are [* *],
whether prior to or after the [* *], or as to which [* *]; [* *]. [* *]
owns all right, title and interest in [* *] Rights.

(b) “[* *] Rights” means all rights, whether registered or unregistered, arising from or
relating to patents, copyrights, confidential information or trade secrets, trade marks, service
marks, trade names, mask works, moral rights and other proprietary rights in any jurisdiction in
and to all [* *] that [* *], whether prior to or after the [* *], or as to which [* *]. [* *] owns
all right, title and interest in [* *] Rights.

(c) Categorization of Items on Attachment 1[* *]. Applied and Supplier acknowledge that
Items provided by Supplier pursuant to this GSA may contain, to varying degrees, [* *]. Supplier
further acknowledges that [* *]. Applied and Supplier agree that [* *], each Item provided to
Applied by Supplier shall be designated as falling into one of the following categories, each of
which shall be exclusive of the others: (i) [* *] Items; (ii) [* *] Items; (iii) [* *] Items; and
(iv) [* *] Items. This categorization will be documented in a separate column on
Attachment 1 to this Agreement. Once the Parties have executed Attachment 1, neither Party may
change the categorization of any Item on Attachment 1 without the prior written agreement of the
other Party.

(d) Categorization of Items [* *]. If any [* *] Items are to be [* *] which of the four
categories shown in 11(c) above apply to the proposed additional Item (“IP Categorization”). The
Parties shall [* *]. If [* *] the IP Categorization of an Item, then Supplier shall not manufacture
such Item for Applied, and Applied shall not [* *] for such Item. If [* *], the Parties shall
document [* *] in writing in the form set forth on Exhibit A attached hereto and incorporated
herein (the ‘IP Categorization Agreement’). The Parties will execute the IP Categorization
Agreement prior to (A) Applied’s request that [* *] with respect to any Item and (B) Supplier’s
decision to [* *] any particular Item. Once the Parties have executed the IP Categorization
Agreement, neither Party may change the categorization of such Item without the prior written
agreement of the other Party. The Parties shall also document the IP Categorization in an amended
Attachment 1 to this Agreement.

(e) [* *] Items. Supplier will have the right to manufacture and sell [* *] Items to
Applied and/or [* *].

(f) [* *]Items. Subject to the payment of Royalties to Applied, pursuant to Section 11(j)
below, Supplier will have the right to manufacture and sell [* *] Items to [* *]. In the event that
[* *]. Supplier has no

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obligation to provide Applied with [* *] if Supplier developed the Modified Item for the exclusive
benefit of another customer of Supplier. If Applied elects to [* *] the Parties shall agree in
writing to the [* *] and shall categorize the [* *] Item in accordance with Section 11(d) above.
Supplier shall pay Applied Royalties for all Modified Items sold directly or indirectly to [* *],
after Applied notifies Supplier that it has [* *], [* *] the Modified Items were sold prior to
Applied’s [* *] of the Modified Item.

(g) [* *] Items. Supplier shall [* *] Item to [* *]. Supplier’s manufacture or sale of [*
*] Items to [* *] is subject to the [* *]. Supplier shall not make [* *] to any [* *] Items [* *].
If Supplier makes any [* *] to any [* *] Items without [* *], then Applied [* *] shall have a [*
*]. At Applied’s request, Supplier shall [* *] to Applied the [* *] Item with the [* *] and if
Suppler [* *] to make the [* *] Items with the [* *], then Applied shall have [* *]. In any event,
Supplier shall not [* *] Items with the [* *] and Supplier shall not [* *].

(h) [* *] Items. Supplier shall [* *] Item to [* *], except as authorized by Section 3(e)
of this Agreement, without [* *]. Supplier shall not make any [* *] to any [* *] Items [* *]. If
Supplier [* *] Items [* *], then Applied [* *] shall have a [* *]. At Applied’s request, Supplier
shall [* *] Items with the [* *] and if Suppler [* *] Items with the [* *], then Applied shall have
[* *]. In any event, [* *] Item with the [* *] and Supplier shall not [* *].

(i) Additional Terms. The Parties contemplate that terms and conditions in addition to the
terms set forth in this Agreement may apply to Items categorized as either [* *] or [* *] Items.
These additional terms and conditions may by way of example, include provisions regarding [* *] and
the [* *]. Any additional terms and conditions agreed upon in writing by the Parties will be
documented in either an amendment or addendum to this Agreement or in a separate written agreement.

          (j) Royalties for [* *] and [* *] Items.

               i) Payment Effective October 1st, 2005 and for the remainder of the Term,
Supplier shall pay a royalty to Applied for each [* *] Item, [* *] Items and [* *] Item sold by
Supplier directly or indirectly to [* *] in the amount of [* *], or as set forth in Attachment
1, at the time of the sale for such [* *] Item (the ‘Royalty’ or “Royalties’). Royalties shall
be paid within [* *] after the end of each [* *] and shall be computed on the basis of the
number of [* *] Items and [* *] Items sold within that [* *]. Supplier shall submit to Applied
with each Royalty payment a statement to Applied setting forth in reasonable detail the
calculation of the Royalties due, including such information as Applied may reasonably request
to permit the verification of the amounts due and payable. Supplier shall pay Royalties to
Applied in U.S. dollars by [* *] or other method as Applied specifies from time to time.
Supplier shall pay Royalties to the following bank account or other such bank account as Applied
specifies from time to time:

Applied Materials, Inc.

Bank Name: [* *]

Address: [* *]

ABA No: [* *] (for domestic wire transfers)

Bank Swift code [* *] (for international wire transfers)

Account No: [* *]

               Any amount that is not paid when due will accrue a late payment fee at an annual interest
rate equal to [* *] percent or the highest rate permitted by applicable usury law, whichever is
[* *], from the date due until the date paid.

(ii) Royalty Records and Accounting. Supplier shall keep and maintain current, complete, and
accurate books and records of each [* *] Item and [* *] Item manufactured or sold by Supplier.
At any time and from time to time during the term of this Agreement and for [* *] thereafter,
Applied may, at its own expense and upon reasonable advance notice, have its employees or
representatives

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audit and inspect the relevant books, records, inventory, agreements, documents, and facilities
of Supplier in order to determine whether all Royalties due under this Agreement have been paid,
and if not, the amount of the underpayment. Supplier shall not disclose to Applied any
documents or information about prices charged for [* *] Items and [* *] Items. Supplier shall
cooperate, at its own expense, with Applied and its representatives in connection with any such
audit. If any such audit discloses an understatement of Royalties due, Supplier shall pay to
Applied within [* *] of such disclosure the deficiency plus a late payment fee as provided in
this Section 11(i). If the audit reveals an underpayment of [* *] or more of Royalties payable
during the relevant reporting period, then Supplier will pay all expenses incurred by Applied in
connection with such audit, in addition to the payment of Royalties, late payment fees and any
other remedies Applied may have.

               (iii) Taxes. Supplier will be solely responsible for all taxes, excluding withholding
taxes and other taxes based on Applied’s income, imposed by any foreign government or other
jurisdictions outside of the United States on any payments to Applied under this Agreement.
With respect to withholding taxes, Supplier shall if applicable withhold the amount of tax
imposed by any foreign government or other jurisdiction outside of the United States on any
payments to Applied under this Agreement, and transmit such amount of withholding tax to the
appropriate authority. For any such withholding tax, Supplier shall provide Applied with
documentation sufficient to enable Applied to document the payment of such withholding tax for
the purpose of justifying a credit or deduction for tax purposes under the law of any nation or
tax treaty between nations that may affect Applied.

(k) License to Applied [* *]Marks. Applied does not grant to Supplier any express or
implied license or right to Applied IP for any [* *] or [* *] Items, however, Supplier may continue
to manufacture and sell to third parties [* *] or [* *] Items as contemplated by subsections (e)
and (f) of this Section 11. To the extent that a [* *] or [* *] Item contains [* *] of Applied,
then Applied hereby grants to Supplier a [* *] license under such [* *] to make and sell the Item
containing those [* *], if Item is an [* *] Item or to [* *], if Item is a [* *] Item. Applied does
not grant to Supplier any other license or other right to or under any Applied IP Right for
Supplier’s own benefit to use in any other way, commercially or otherwise, or to provide or offer
Items or other products or Services to [* *]. Any license provided by Applied in this Agreement may
be [* *] and shall expire in any event, [* *], on the expiration or termination of the Agreement.
Such license shall not be [* *].

(l) License to Marks. Applied grants to Supplier a non-exclusive, revocable, royalty-free,
limited and non-transferable license to affix or install on Items those trademarks, service marks
and trade names of Applied’s (collectively, “Marks”) that are specified to be installed or affixed
under Applied Specifications for the Items. Such license of Marks is limited, revocable by
Applied, shall not be assigned, sublicensed or transferred in any way and shall expire in any
event, if not sooner revoked, on the expiration or termination of the Agreement. Use by Supplier
of all Marks shall be solely for the benefit of Applied and as directed by Applied. Supplier shall
install and affix the Marks solely in accordance with Applied’s specifications, packaging and
labeling requirements and any quality requirements for the Marks or Items that Applied may
establish. Applied may inspect Supplier’s facilities and examine Items at any time during normal
business hours to monitor or evaluate the quality of the Marks affixed to the Item. Applied agrees
to use third party inspectors whenever appropriate, provide reasonable notice, and inspect only in
areas necessary to monitor or evaluate the quality of Marks affixed to the Items.

(m) Further Assurances. [* *], Supplier will take, and will cause its employees, agents,
and Sub-tier Suppliers to take, all actions reasonably requested by Applied, from time to time, to
fully vest or perfect [* *] Rights. Such actions shall include providing documents and information
useful or necessary to (i) register, apply for or maintain any of [* *] Rights; or (ii) pursue or
defend any administrative, court, or other legal proceeding involving
any of Applied’s IP Rights.
In addition, during the Term, Supplier shall promptly disclose to Applied any of [* *] Rights of
which it is aware.

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(n) Agreement with Employees or Others. As to any Supplier employee, agent, Sub-tier
Supplier or designated Applied Confidential (collectively, the “Recipients”), Supplier shall ensure
that the Recipients have entered into an agreement with Supplier, prior to the Recipient obtaining
any Confidential Information, which obligates the Recipient to (i) hold all Applied Confidential
Information in confidence and not to use the Applied Confidential Information in any way, except on
behalf of Supplier in performing its obligations hereunder for the benefit of Applied and otherwise
protect the Applied Confidential Information upon substantially similar terms to those set forth in
Section 9 and (ii) assign to Applied all right, title and interest in and to [* *] Rights and
provide for direct enforcement by Applied regarding Applied Confidential Information. Supplier will
provide Applied with copies of such agreements upon Applied’s request.

(o) [* *] Agreement for Vital Items. “Vital Item” means an Item that, at any time, Applied
is not able to replace with a reasonably practicable commercial alternative within [* *] of Applied
desiring to do so. Any Item identified as a Vital Item will be so designated on Attachment 1.
Upon the designation of a Vital Item Applied and Supplier agree to [* *], which may be in the form
set forth in [* *], covering a Vital Item.

12. Warranty.

(a) Supplier Warranty: Supplier represents and warrants that for the period of time [* *]
from the date of delivery to Applied, or as set forth in Attachment 1, or such other period of time
as may be mutually agreed upon in writing between Applied and Supplier, the Items (i) will be free
from defects in workmanship, material, and manufacture; (ii) will comply with the requirements of
this Agreement, including all Applied Specifications and manufacturing work instructions; and (iii)
will be of merchantable quality and fit and suitable for the purpose intended by Applied. Supplier
further represents and warrants that (A) the Items will consist of new (not used or recycled)
material, and (B) Applied shall acquire good and marketable title to the Items, free and clear of
all liens, claims and encumbrances. Further, to the extent that the design of an Item is
Supplier’s responsibility, Supplier represents and warrants that such design will be free from
defects. In determining whether an Item is [* *], an Item must be [* *]. In determining whether
an Item is [* *], such warranty shall extend to [* *], employed in processes (a) that are [* *], or
(b) that are [* *] as an intended use. Supplier’s warranties do not extend to defects, failure or
malfunction of an Item to the extent such failure, defect or malfunction (a) results from [* *] by
Supplier [* *], provided that this exclusion shall not alter or limit [* *]; (b) is caused by [* *]
of the Item that is not in accordance with any written instructions accompanying the Item.

(b) Services. Supplier represents and warrants that for the period of time as defined in
Attachment 1, or such other period of time as may be mutually agreed upon in writing between
Applied and Supplier, Services performed in connection with this Agreement will be performed in a
competent, professional and workmanlike manner, free from defects, and in accordance with the best
professional practices in the industry.

(c) Free from Infringement. Supplier represents and warrants that the manufacture, and
sale of the Items, shall not give rise to, nor be subject to, any claim or liability for
infringement of any intellectual property rights, including any patent, copyright, trademark, trade
secrets, moral rights, confidential information or any other proprietary or intellectual property
rights, of any third party.

(d) Miscellaneous Warranty Items. From time to time Applied may designate certain Third
Parties, including its customers, to directly avail itself of Applied’s rights under this Section.
Applied may assign and transfer, in whole or in part, the rights provided by Supplier to Applied
under this Section to any of Applied’s customers or any subsequent purchaser of the Items. The
warranties set forth in this Agreement will survive any delivery, inspection, acceptance or payment
by Applied. [* *].

(e) Remedies. If an Item does not meet the warranty requirements set forth in this
Agreement, Applied may (i) [* *] or (ii) [* *]; or (iii) [* *]. Except as otherwise agreed in
writing by the Parties, Applied will

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[* *] unless Supplier is unable to [* *]. If Applied elects to [* *], then Applied agrees that the
cost differential for which the Supplier will be liable, [* *]. In addition, Applied may cancel
the balance of the undelivered, defective or nonconforming Items [* *]. As to any Item that is
repaired, replaced or corrected under this Section, Supplier’s warranty shall continue to apply to
such Item for (A) the full remaining balance of the original term applicable to such Item or (B) [*
*] from the date such repaired, replaced or corrected Item is received and accepted by Applied,
whichever period of time is greater. Upon request from Applied, Supplier shall provide
pre-approved returned material authorization (“RMA(s)”) to facilitate return of Items. Applied may
notify Supplier of defects and nonconformances and communicate its elected remedy by delivery of
notice or in accordance with the Discrepant Material Report (“DMR”) and closed-loop corrective
action processes as set forth in Supplier Corrective Action Request located on the Applied Web
Site.

(f) Extended Warranty; Epidemic Failure. Without limiting Applied’s rights as specified
elsewhere in this Section 12, if a specific Item is discovered to be defective or nonconforming at
a rate of over [* *] in any period of [* *] (with the numerator being [* *], and the denominator
being [* *]), then, [* *], Supplier will extend the warranty period for all such Items still under
warranty for no less than an additional [* *] from the date on which the warranty for the Item
would otherwise expire.

(g) Timing. If Supplier receives notice that an Item is defective or non-confirming,
then Supplier will use the most expeditious manner possible to effect the action specified by
Applied, including the use of overnight delivery services for shipment of Items to and from
Applied. For any Item for which a repair or replacement timeline is identified in Attachment 1,
Supplier will repair or replace such Item within such timeline. In all events, however, as to any
Items that Applied identifies as “production” or that are delivered by Supplier for the purposes of
production, Supplier will [* *] the defective or non-conforming Item as [* *] with a [* *] turn
around of [* *] from receipt of Applied’s request.

(h) Costs. Applied shall be responsible for the cost of freight, customs and other fees
related to returning defective or non-conforming Items to Supplier’s field office or headquarters.
Supplier shall be solely responsible for their costs, fees and expenses in connection with
fulfilling its obligations under this Section, including labor for inspection, troubleshooting,
repair, testing, packaging, and freight, customs and other fees related to returning the Item to
its origin.

13. Supplier Refurbishment Services. “Refurbishment Services” means services (i) to
correct or repair any defect or non-conformance to an Item (that is not covered by Section 12); and
(ii) to retrofit an Item such that it complies with the most current released Specification for a
newly manufactured version of the Item, regardless of whether the Item is within its warranty
period. Upon Applied’s request for Refurbishment Services, Supplier and Applied shall negotiate in
good faith to enter into an arrangement governing the Refurbishment Services in the form of (A) an
Attachment or (B) a separate agreement on substantially similar terms and conditions as set forth
in the then current Supplemental Flat Rate Repair Agreement (“Refurbishment Agreement”) located on
the Applied Web Site. If no pricing for Refurbishment Services is established for an Item under a
Refurbishment Agreement or otherwise, Supplier agrees to [* *] charges by product for Refurbishment
Services for Items no longer under warranty.

14. Supplier Performance Plan. Supplier will continue to participate in and support
Applied’s Quality [* *] (“[* *]”) program, including any successor program. If for any reason,
Supplier is no longer participating in Applied’s [* *] or successor program, Applied and Supplier
will jointly develop a supplier performance plan in the form set forth in Supplier Performance Plan
located on the Applied Web Site. Supplier agrees to self monitor its performance, at both
corporate and operational site level, against the performance targets established in the Supplier
Performance Plan. At least once a month, Supplier will submit to Applied its actual performance
against performance targets in the Supplier Performance Plan.

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15. Manufacturing Requirements.

(a) First Article Inspections. Applied and Supplier shall perform inspections in
compliance with the requirements set forth in Supplier First Article Requirements located on the
Applied Web Site for those Items designated by Applied (“First Articles”). Supplier shall provide
all documentation necessary for Applied to inspect a First Article.

(b) Design and Process Change Communication. After Applied has approved the First
Article, Supplier shall not make any change to the design (firmware, hardware or software) of
the Item that may alter the Specifications or the form, fit, function [* *] of parts without
first submitting a Supplier Problem Sheet (SPS) in the form set forth on the Applied Web Site.
Supplier will not make changes to the manufacturing process of such Items without first
submitting a Supplier Notification Form (SNF) in the form set forth on the Applied Web Site.

(c) Other Changes and Equitable Adjustments. Applied may, upon notice to Supplier, submit
Engineering Change Orders (“ECOs”) or request other changes within the scope of the Agreement with
respect to any of the following: (i) Specifications; (ii) the place and date of delivery of Items;
or (iii) the place, date and manner of inspection or acceptance of Items. Supplier agrees that it
will use reasonable efforts to accommodate such requests in a timely and cost effective manner. If
any request for such changes causes an increase or decrease in the cost of or time required for
performance of the Agreement, Applied will consider an equitable adjustment in the Contract Price
or delivery schedule, or both, and the Agreement shall be modified in writing accordingly. If
Applied and Supplier are unable to agree upon an equitable adjustment, then Applied may [* *]. No
claim by Supplier for adjustment under this subsection shall be valid unless in writing and
received by Applied within [* *] from the date of Supplier’s receipt of the notice of such change;
provided, however, that such period may be extended upon the written approval of Applied.
Supplier’s expectations and responsibilities associated with the ECO Process Requirements are set
forth on the Applied Web Site.

(d) Quality Requirements. Supplier shall comply with Applied’s quality requirements set
forth in Supplier Quality Requirements located on the Applied Web Site.

(e) Ozone Depleting Chemical. Supplier will not deliver any Items manufactured with or
containing Class I ODCs, as defined under Section 602 of the Federal Clean Air Act (42 USC Section
7671a). Supplier will certify to Applied that each shipment of Items does not contain any Class I
ODCs.

(f) Safety Notices. In addition to any of Supplier’s obligations under this Agreement or
imposed by law, Supplier will immediately notify Applied of any known or suspected safety issues
related to an Item (including component or material issues). Such notification shall be provided
as follows: if the safety issue relates to the design of an Item, notification shall be provided by
submitting a completed Supplier Problem Sheet (SPS); for all other issues, notification shall be
provided by submitting a completed Supplier Notification Form (SNF).

     16. Management of Inventory.

(a) [* *] Inventory. “[* *] Inventory” or “[* *]” means a program whereby the Parties
agree that [* *] will stock and maintain certain Items at specified locations, [* *], the Items
until such Items are [* *] in accordance with the terms and conditions of such program. In the
event Applied designates certain Items to be included within the [* *] program and Supplier agrees
to such designation (“[* *] Items”) by reporting a [* *] “Target Inventory” quantity for that Item
in an authorized inventory planning and collaboration tool provided to Supplier by Applied (or
otherwise providing Supplier with written or electronic notice of such designation), Supplier
agrees to manufacture [* *] such [* *] Items in accordance with: (i) any authorized inventory
planning and collaboration tool provided to Supplier by

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Applied; and/or (ii) if requested by Applied a separate [* *] agreement between Applied and
Supplier in form [* *].

(b) Forecasts. Applied will periodically issue to Supplier rolling forecasts looking
forward nine (9) to twelve (12) months setting forth projected demand for Items, whether by
specific divisions or otherwise (“Applied Forecasts”) with routine updates, anticipated to be no
less than once per week. Applied Forecasts are intended for planning purposes only and shall not
constitute a binding purchase commitment of Applied.

(c) Inventory
Levels and Tracking Requirements.  Unless
otherwise designated in Attachment 1 [* *], Supplier will maintain the “Target Inventory” quantity, if any, of each [* *]
Item as specified in an authorized inventory planning and collaboration tool provided to Supplier by Applied from time to time.
All [* *] Items manufactured by Supplier to meet a current Target Inventory quantity shall be considered “[* *] Inventory”
under this Agreement.  When Supplier is creating inventory levels to satisfy a required Target Inventory level of [* *] Inventory, any
 reduction in quantity of Items that were ordered pursuant to an Authorized Demand Signal or any Authorized Demand Signal that is
later cancelled by Applied shall be returned to Supplier’s inventory and Supplier will adjust its inventory levels accordingly.
 Supplier shall monitor and report its work-in-process and [* *] Item count to Applied for all [* *] Inventory.

(d) Claim for [* *] Items. If Applied has not taken delivery of any unit of a [* *] Item
in [* *] Inventory within [* *] from the date of Applied’s last receipt of any such unit, Supplier
may then submit a claim for reimbursement for such [* *] Items to Applied within [* *] from the end
of such [* *] period. Supplier’s failure to submit such a claim within this [* *] period shall
constitute waiver of any claim for reimbursement for such [* *] Items and Applied shall be released
from all liability relating to such [* *] Item.

(e) Claim for [* *] Items. A [* *] Item in [* *] Inventory will be considered an “[* *]
Item” when Applied provides notice to Supplier that such [* *] Item is an “[* *] Item.” If
Supplier desires to submit a claim for costs associated with [* *] Items, then Supplier shall
submit a claim for such [* *] Item(s) within [* *] from the date on which Applied notifies Supplier
that the [* *] Item(s) are [* *] Items. Supplier’s failure to submit such a claim within this [*
*] period shall constitute a waiver of any claim for reimbursement for such [* *] Items and Applied
shall be released from all liability relating to such [* *] Items.

(f) 
Scope of Claim.  Applied will not be liable for [* *] Inventory other
than as described in this Section 16.  In addition, no claim for [* *] payment for [* *] Inventory shall be made in the following
situations: (i) any termination by Applied pursuant to Section 21(a) (Termination for Default); (ii) if Supplier has [* *]; (iii)
Supplier errors in production; (iv) if Supplier has been paid for such Items previously or has made a claim for reimbursement or
payment for such Items previously; or (v) if such Items are “Commercial Off-the-Shelf Items” meaning Items that are standard or stock
 items in the industry in contrast to Items that have been manufactured to build-to-print specifications of Applied or its customer,
except to the extent that Supplier [* *] such [* *] Items to [* *] and such Item is identified as such an “[* *] Item” on Attachment 1.

(g)
Claim Process.  Any claim made under this Section will be addressed
 based on [* *].  Supplier is responsible for [* *] Items [* *] Inventory [* *] and otherwise making all efforts to mitigate the
 cost to Applied in any such claim.  Any claim shall be supported by reasonable evidence including a detailed listing of the
relevant [* *] Item [* *], as well as a detailed description of Supplier’s efforts to mitigate the costs to Applied.
Supplier’s claim will be based solely on costs incurred as a result of Applied’s actions or obsolescence.  No [* *]
cost will be considered in calculating such claims.  Applied reserves the right to physically audit the inventory levels
identified in the claim.  Such audit shall be conducted in accordance with Section 19(e).

(h) Disposal of [* *]and [* *]Items. Supplier agrees to physically dispose of all [* *]
and [* *] Items as directed in writing by Applied. [* *] and [* *] Items that are to be delivered
to Applied’s facilities must be delivered in accordance with the requirements of this Agreement
and/or any supplemental instructions

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provided by Applied. In lieu of delivery to Applied, Applied may require that Supplier destroy or
otherwise scrap the [* *] and [* *] Items so that they are [* *], and Supplier shall comply with
this requirement in accordance with Applied’s instructions and provide Applied with an original
certification of [* *] in the form of
Certificate of Destruction located on the Applied Web Site.

17. Management of Sub-tier Suppliers.

(a) Sub-tier Suppliers. After Applied has approved of the First Article of an Item,
Supplier shall not subcontract with a new or different Sub-tier Supplier as to such Item, without
the prior written approval of Applied. Supplier agrees to use best efforts to inform Applied of
any process or Sub-tier Supplier changes related to Items (including, for example, obsolescence of
components or any changes in the manufacturing process of a Sub-tier Supplier) at least [* *] prior
to the date the Supplier is contemplating the implementation of the change, and further agrees that
any such notice will not be less than [* *] days. Supplier shall inform Applied by following the
notification processes set forth in the Supplier Notification Form (SNF) located on the Applied Web
Site.

(b) Sub-tier Supplier’s Obligations to Applied. Supplier will communicate to all Sub-tier
Suppliers their obligation to comply with all Specifications, quality and other technical
requirements that may be necessary in order for the Sub-tier Supplier to deliver conforming Items,
or any portion thereof, to the Supplier for the benefit of Applied. Supplier hereby assigns and
transfers to Applied all warranties provided to Supplier with respect to the Items, or any portion
thereof, and represents and warrants that such warranties are fully assignable to Applied and by
Applied to its customers or subsequent purchasers of the Items.

(c) Mandated Sub-tier Suppliers. “Special Process” means a process that includes, but is
not limited to, causing a metallurgical change to the base material such as heat treating, forging
or hardening processes; joining materials by welding, brazing, or other bonding process; or
providing a coating or surface treatment such as cleaning, electro-polishing, plating, painting, or
anodizing. As to any Item(s) which require a Special Process, Supplier must use one or more of the
suppliers and otherwise follow the requirements identified in the Applied Materials Special Process
Supplier Approval List located on the Applied Web Site.

18. Product and Training Support.

(a) Supplier Response. Supplier will provide technical [* *] support services to Applied,
seven (7) days a week, 24 hours a day, at no additional charge. Supplier agrees to provide an
initial response (via telephone or electronically) to any inquiry from Applied within [* *]. If
Supplier is requested by Applied to provide an in-depth failure analysis of Item failures occurring
at an Applied facility or customer location, Supplier agrees to provide timely analysis and
feedback to Applied.

(b) On-Site Support Requirements. As determined by Applied, Supplier may be asked to
provide appropriate or necessary personnel to support on-site operations at Applied’s facilities or
at the premises of a customer of Applied. [* *], such support will be provided [* *] for Items
within the Supplier’s warranty period as noted in Attachment 1. Upon Applied’s prior written
approval, Applied agrees to [* *], and for Supplier’s Items which are outside of their warranty
period [* *]. As to any of Supplier’s personnel who are assigned to Applied’s facilities, Supplier
shall require, to the extent legally allowable, such personnel to execute an On-site Representative
Agreement in substantially the form set forth on the Applied Web Site.

(c) Training Support. Upon Applied’s request, Supplier shall provide repair, maintenance
and trouble-shooting training and related documentation for the Items to Applied representatives.
The Parties will

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mutually agree on the Items to be included in the training and the specific content and level of
training to be provided. If no such training program exists, upon Applied’s request, Supplier
shall develop and provide a training program in conjunction with Applied’s Global Technical
Training Institute or its successor entity. Training provided to Applied’s Global Technical
Training Institute shall be conducted at Applied’s Santa Clara or Austin offices [* *]. If
training outside the U.S. is deemed necessary by Applied’s regional representatives, the Parties
agree to [* *].

19. Electronic Communication and Documentation.

(a) General. The Parties acknowledge that they are relying upon electronic means, in
addition to email and facsimile transmissions, to exchange Authorized Demand Signals and other
delivery and order information. Supplier agrees to communicate with Applied using the standards
designated by Applied. To the extent communication through electronic means is inaccessible or
made otherwise unavailable due to technical difficulties or due to the effect of any law or
regulation governing electronic transactions, the Parties agree (i) that any delivery or order
information received electronically prior to the date of such inaccessibility or unavailability
will remain valid; and (ii) to conduct, to the extent possible, their transactions by other than
electronic means.

(b) Documentation Format Requirements. With each First Article delivered hereunder,
Supplier shall provide to Applied one (1) set of electronic files of product maintenance and
support documentation for such Item in accordance with the Supplier First Article Requirements
located on the Applied Web Site. Electronic files shall be source files in either Adobe®
“Framemaker”, or Microsoft® “Word”, or other mutually agreed upon format. If such documentation is
not a part of [* *] Rights, then Applied shall have the right to use, copy, display, modify,
reproduce and distribute such documentation as Applied deems necessary to support the Items.
Applied may post, or require Supplier to post, such documentation on a Web-based tool accessible by
Applied and its customers.

(c) Field Support Requirements. Supplier agrees that Applied may provide technical
assistance, product maintenance and service to Applied’s customers relating to Items and that the
provision of any such services by Applied shall not invalidate or relieve Supplier of its
obligations, including warranty obligations, under this Agreement. However, in the event that
Applied [* *], and such [* *] cause [* *] to the Item, the remedy for [* *].

(d) Applied Unique Prototype Items or Subassemblies Documentation. Upon Applied’s request,
Supplier shall provide to Applied all [* *], which are manufactured, purchased, or produced for
Applied [* *].

(e) Financial Statements and Right to Audit. Upon Applied’s request, Supplier will provide
Applied with financial statements of Supplier prepared on the basis of U.S. generally accepted
accounting principles (“GAAP”), consistently applied, and other financial information relating to
Supplier’s business and operations as Applied may reasonably request but only to the extent that
Supplier, as a publicly held company, either has an obligation to make this information publicly
available or is legally permitted to make this information available on a selective disclosure
basis. At any time during the Term and for [* *] thereafter, an auditor designated by Applied and
reasonably acceptable to Supplier shall have the right, at Applied’s expense and upon reasonable
notice, to conduct audits of all of the relevant books, records, inventory, agreements, data
connections, and other documents of Supplier in order to verify and determine (i) the accuracy of
any financial statements delivered by Supplier to Applied pursuant to this Agreement; (ii) whether
all amounts charged by Supplier comply with this Agreement; and (iii) whether Supplier is otherwise
in compliance with its duties and obligations under this Agreement. Supplier shall provide, at its
expense, reasonable assistance necessary to enable the auditors to conduct such audit. All
information reviewed by such auditors and the work papers of such auditors shall be covered by a
mutually agreeable non-disclosure agreement and the auditors shall disclose to Applied only the
results of such audit. Any amounts charged by Supplier in excess of what is allowable under this
Agreement shall be adjusted and reimbursed to Applied within [* *] of discovery. If the required
adjustment exceeds [* *]

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of the amount originally charged, then Supplier will pay the [* *] expenses associated with such
audit in addition to the adjustments due.

20. Continuity of Supply.

(a) Supplier Manufacturing Flexibility Requirements. Supplier shall perform regular
capacity planning to demonstrate upside/downside manufacturing flexibility in accordance with
changes in demand volume from Applied. Supplier capacity planning must account for a minimum of
(i) human resources and associated training requirements; (ii) equipment; (iii) facilities; (iv)
special process supplier requirements; (v) supply chain management; and (vi) information technology
requirements. Supplier shall be capable of demonstrating capacity flexibility in accordance with
the table below, provided that the total increase over any [* *] period does not exceed [* *]% of
the lowest level during that period.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Manufacturing Run Rate

	 	 	<[* *] weeks
	 	 	<[* *] weeks
	 	 	<[* *] days
	 	 	< [* *] days
	 	 	<[* *] days	 
	 	Capacity +/-

	 	 	[* *]%
	 	 	[* *]%
	 	 	[* *]%
	 	 	[* *]%
	 	 	[* *]%	 
	 

(b) Performance Constraints. Supplier is responsible for anticipating and promptly
notifying Applied of (i) any inability on its part or its Sub-tier’s part to perform their
respective obligations under this Agreement; and (ii) any breach of a provision of this Agreement.

(c) Disaster Recovery Plan. Upon Applied’s request, Supplier shall provide to Applied
reasonable information describing its disaster recovery plan that includes (i) emergency back-up
capacity; (ii) escrow of information required in connection with Vital Items pursuant to Section
11(g); and (iii) appropriate record protection and recovery.

(d) Tooling. For [* *] after the Term, upon Applied’s request, Supplier agrees to itemize
and/or sell to Applied any tooling that is built or procured by Supplier that is unique to the
Items and/or relevant to the manufacture, testing or maintenance of Items. The purchase price of
such tooling shall be at the fair market value. If Applied provides notice of its election to
purchase such tooling, upon Applied’s payment, title shall transfer to Applied. If at any time
Supplier receives tooling furnished by or purchased from or by Applied, Supplier shall comply with
the Applied Tooling Requirements located on the Applied Web Site.

(e) Wind Down. In the event of, or in preparation for, the expiration or a termination of
the Agreement for any reason, Supplier shall use commercially reasonable efforts to transfer, or
cooperate fully with Applied to enable Applied to transfer, the performance of Supplier’s
obligations under the Agreement to Applied or a third party supplier designated by Applied, in a
manner that (i) minimizes the time to complete such transfer; (ii) maintains the highest quality
and performance to ensure the adequate supply of Items; and (iii) causes no disruption to Applied’s
customers’ requirements.

(f) Availability Assurance. Supplier agrees to maintain capabilities necessary to provide
technical and service support to Applied and/or its designated third party as to any Item for a
minimum of ten (10) years from the date of final shipment of an Item to Applied. Alternatively,
the Parties may agree to establish a product support period of [* *], provided Supplier agrees to
grant to Applied [* *] a [* *] license under [* *] Rights to make, have made, use, sell and support
the Items, [* *].

21. Termination.

(a) Termination for Default. Applied may terminate this Agreement, including any
Authorized Demand Signal, in whole or in part, effective upon delivery of notice to Supplier, if
(i) Supplier fails to deliver Items in accordance with the terms of this Agreement, including
specified delivery times, Item requirements or other

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Specifications; (ii) Supplier breaches any other provision of this Agreement; (iii) Supplier
anticipatorily repudiates any material provision of this Agreement; or (iv) Supplier becomes
insolvent, files a petition for relief under any bankruptcy, insolvency or similar law, makes an
assignment for the benefit of its creditors, or takes any action for (or in anticipation of) any of
the foregoing. Upon any termination pursuant to this Section, Supplier shall: (1) continue to
supply any portion of the Items for which this Agreement is not cancelled; (2) be liable for
additional costs, if any, incurred by Applied for the purchase of similar goods and Services to
cover such default; and (3) at Applied’s request, transfer title and deliver to Applied: (a) any
completed Items, (b) any partially completed Items, and (c) all unique materials and tooling
subject or relating to the termination, at which time Applied will be liable to Supplier for the
fair market value of all such Items, material and tooling so transferred (excluding such material
or tooling provided to Supplier by Applied). Termination of the Agreement under this Section 21(a)
shall constitute “cancellation” under the Uniform Commercial Code as adopted in California.

(b) Termination for Convenience.

      (i) Applied may terminate the Agreement, including any Authorized Demand Signal, in whole or
in part, at any time for Applied’s convenience by giving Supplier notice which shall state the
extent of the termination and the conduct required of Supplier in connection therewith. Such a
cancellation may be for reasons including a reduction in the quantity of an Item ordered under an
Authorized Demand Signal. Supplier will use commercially reasonable efforts to mitigate any
damages incurred in connection with such termination. Within [* *] from the date on which Supplier
receives such notice, Supplier shall [* *]. In no event will [* *] include any [* *]. 

      (ii) Failure by Supplier to
deliver such [* *] within this shall constitute a waiver by Supplier of [* *] and a release
of all Applied’s liability arising out of such termination.

      (iii)         If Applied does not agree with [* *],
Applied and Supplier will [* *].  If Applied and Supplier [* *] after receipt by Applied of the [* *] from Supplier, then the [* *]
will be conclusively presumed to be the [* *] (provided that [* *]): (i) the [* *] for all Items delivered to Applied pursuant to an
 Authorized Demand Signal prior to the date of Applied’s termination; (ii) the [* *] prior to the date of termination, provided such
Items are promptly [* *]; (iii) the [* *] relating to Items ordered pursuant to an Authorized Demand Signal, [* *] Commercial-Off-The-Shelf
 components either manufactured or procured by Supplier which Supplier can either [* *] or [* *] which are properly allocable or
apportionable under GAAP to the terminated portion of the Agreement, and an amount [* *]; and (iv) the [* *].  Applied’s obligation
to pay costs pursuant to clauses (iii) and (iv) above shall be subject to Supplier’s obligation to use commercially reasonable
efforts to mitigate any such costs.

      (iv) This Section 21(b) sets forth Supplier’s sole remedies, and Applied’s entire liability to
Supplier, in the event of a termination by Applied for convenience, excluding any termination or
cancellation of a [* *] Item, for which Supplier’s sole remedy and Applied’s entire liability is as
set forth in Section 16.

(c) Post Termination Consequences. On the date of termination or expiration of the
Agreement for any reason, Supplier shall (i) stop work being performed by Supplier pursuant to the
Agreement, (ii) cancel orders for parts and/or materials with Supplier’s Sub-tier Suppliers and
cease ordering any such parts and/or materials, (iii) cancel work being performed by Supplier’s
Sub-tier Suppliers, (iv) at Applied’s request, assign to Applied Supplier’s interests in contracts
with Supplier’s Sub-tier Suppliers, (v) furnish Applied with release of claims from Supplier’s
Sub-tier Supplier resulting from orders and/or work canceled by Supplier to the extent that such
release of claims forms can be secured by Supplier through the exercise of commercially reasonable
efforts, (vi) protect all property in which Applied has or may acquire an interest, (vii) fully
cooperate with Applied to minimize any adverse effect on Applied or its customers, and (viii)
perform those other obligations set forth in this Agreement upon the termination or expiration of
this Agreement.

22.   Disclaimer and Limitation of Liability.
NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER OR TO ANY OTHER
PERSON OR ENTITY WITH RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT, UNDER ANY EQUITY, COMMON LAW, TORT, CONTRACT, ESTOPPEL,
 NEGLIGENCE, STRICT LIABILITY OR OTHER THEORY, FOR ANY (A)  SPECIAL, CONSEQUENTIAL OR INDIRECT DAMAGES OR (B) DAMAGES RESULTING
FROM LOSS OF SALE, BUSINESS, PROFITS, DATA, OPPORTUNITY OR GOODWILL, EVEN IF THE REMEDIES PROVIDED FOR IN THIS AGREEMENT FAIL OF
THEIR ESSENTIAL PURPOSE AND EVEN IF THE PARTIES HAS BEEN ADVISED OF THE POSSIBILITY OF ANY OF THE FOREGOING DAMAGES.
NOTWITHSTANDING THE FOREGOING, THIS SECTION 22 SHALL NOT APPLY TO OR OTHERWISE LIMIT INCIDENTIAL DAMAGES CAUSED BY
SUPPLIER OR DAMAGES ARISING OUT OF OR RELATED TO (i) SUPPLIER’S BREACH OF SECTION 9 (CONFIDENTIALITY AND PROHIBITED
ACTIVITIES, (ii) A BREACH BY EITHER APPLIED OR SUPPLIER OF SECTION 11 (INTELLECTUAL PROPERTY RIGHTS), (iii) THE FRAUD
OR WILLFUL MISCONDUCT OF APPLIED OR SUPPLIER, (iv) SUPPLIER’S OBLIGATIONS UNDER SECTION 23 (INDEMNITY) TO THE EXTENT
THE INDEMNIFIED LIABILITIES (AS DEFINED THEREIN) ARISE FROM OR RELATE TO A CLAIM, DEMAND, SUIT, ACTION OR PROCEEDING
 BROUGHT OR THREATENED TO BE BROUGHT AGAINST APPLIED BY SUPPLIER OR A THIRD PARTY, OR (v) PERSONAL INJURY OR PROPERTY DAMAGE.

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GLOBAL SUPPLY AGREEMENT

23. Indemnity by Supplier.

(a) Supplier shall defend, indemnify and hold harmless Applied from and against any and all claims,
demands, suits, actions, losses, penalties, damages (whether actual, punitive, consequential or
otherwise), authorized settlements, and all other liabilities and associated costs and expenses,
including attorney’s fees, expert’s fees, costs of investigation and other costs of litigation (all
of the foregoing being collectively called “Indemnified Liabilities”), arising out of or relating
to (i) Supplier’s breach of any provision of the Agreement; (ii) any negligent, grossly negligent
or intentional acts, errors or omissions by Supplier, its employees, officers, agents or
representatives; or (iii) strict liability or products liability with respect to or in connection
with the Items; (iv) any claim by a Sub-tier Supplier against Applied; or (v) the actual or alleged
infringement or misappropriation of patent, copyright, trademark, trade secret rights, confidential
information, proprietary rights, or other rights of a third party, except to the extent that the
infringement or misappropriation was unavoidably caused by Supplier’s compliance with a detailed
design furnished and required by Applied. THE INDEMNITY BY SUPPLIER IN FAVOR OF APPLIED SHALL
EXTEND TO APPLIED, ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS AND REPRESENTATIVES AND SHALL
INCLUDE, AND IS INTENDED TO INCLUDE, INDEMNIFIED LIABILITIES WHICH ARE DETERMINED BY A COURT OF
COMPETENT JURISDICTION TO BE THE RESULT OF ACTS OR OMISSIONS OF SUPPLIER AS A JOINT TORTFEASOR. IF
SUPPLIER IS LIABLE ONLY AS A JOINT TORTFEASOR, THEN SUPPLIER’S LIABILITY SHALL NOT EXTEND TO THAT
PORTION OF LIABILITY DETERMINED BY THE COURT TO BE THE RESULT OF ACTS OR OMISSIONS OF APPLIED. The
indemnity of Supplier as to Indemnified Liabilities under clauses (ii) (iii) and (iv) above, shall
not extend to liabilities and damages that are caused by the sole negligence of Applied, and as to
Indemnified Liabilities under clause (v), shall not extend to liabilities and damages that are
caused as described in the “except to the extent” term of such clause (v). In addition to
Supplier’s obligations as to Indemnified Liabilities that arise under clause (v), Supplier shall,
at Applied’s option (1) procure for Applied and its customers the right to continue to use, sell
and resale any affected Item, (2) with respect to a claim for infringement, modify the affected
Item so that it is no longer infringing, or (3) replace any affected Item with a non-infringing
good or Service comparable to the affected Item. If none of these alternatives are possible,
Applied shall have the right to return or destroy, at Applied’s option, any affected Items for a
full refund of the purchase price, plus applicable transportation costs.

(b) In the event of any such Indemnified Liabilities, Applied shall (i) promptly notify Supplier;
(ii) at Supplier’s expense, reasonably cooperate with Supplier in the defense of such claim; and
(iii) not settle any such Indemnified Liabilities without Supplier’s written consent, which shall
not be unreasonably withheld or delayed. Supplier shall keep Applied informed at all times as to
the status of Supplier’s efforts and consult with Applied and/or its counsel regarding such
efforts. Supplier shall not settle any such claim without the prior written consent of Applied,
which shall not be unreasonably withheld or delayed.

24. Import and Export Requirements.

(a) General. Supplier shall comply with all applicable export control laws or regulations
promulgated and administered by the laws of the United States or the government of any other
country with jurisdiction over the Parties or the transactions contemplated by this Agreement
(“Export Laws”) including the obligation that Supplier shall not export, re-export or otherwise
disclose, directly or indirectly, Items or technical data received from Applied or the direct
product of such technical data or Items to any person or destination when such export, re-export or
disclosure is in violation of Export Laws. Supplier will provide Applied with any and all
information that may be required to comply with Export Laws, including applicable “Export Control
Classification Numbers,” documentation substantiating U.S. and foreign regulatory approvals for the
Items, and information required by Customs

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GLOBAL SUPPLY AGREEMENT

officials to substantiate the value of imported Items including any adjustments in valuation
attributable to “assists” as defined by U.S. Customs regulations. All required export and import
information shall be sent to the attention of: Manager, Customs Compliance, Applied Materials, 2881
Scott Blvd., M/S 2041, Santa Clara, CA 95050; or any agent so designated by Applied.

(b) Country of Manufacture. Items shall be marked with the country of origin as required
by Export Laws. Supplier shall provide Applied with a written statement identifying for each Item
delivered the (i) Applied part number and (ii) the country of manufacture. This data shall be
provided to Applied upon Applied’s request and in any event, within fifteen (15) days after each
month end. If Supplier is a U.S. manufacturer of any Item supplied to Applied, as defined by U.S.
Customs regulations, Supplier shall, on an annual basis and in accordance with Applied’s written
instructions, provide Applied with a signed manufacturer’s affidavit.

(c) Duty Drawback. Supplier will provide Applied or its agent with U.S. Customs entry data
and information that Applied determines is necessary for Applied to qualify for duty drawback.
Such data shall include information and receipts for duties paid, directly or indirectly, on all
Items which are either imported or contain imported parts or components. Information related to
serial numbers, unique part numbers, lot numbers and any other data which will assist Applied in
identifying imported Items sold to Applied shall also be provided. At the time of delivery of the
Items, but in no event later than thirty (30) days after each calendar quarter, Supplier will
provide said documents accompanied by a completed Certificate of Delivery of Imported Merchandise
or Certificate of Manufacture and Delivery of Imported Merchandise (Customs Form 331) as
promulgated pursuant to 19 CFR 191, or successor regulations.

25. Insurance.

Supplier shall maintain (i) comprehensive general liability insurance covering bodily injury,
property damage, contractual liability, products liability and completed operations; (ii) Worker’s
Compensation and employer’s liability insurance; and (iii) auto insurance, all in such amounts as
are necessary to insure against the risks to Supplier’s operations, but in no event less than the
following minimum amounts:

	 	 	 
	Insurance	 	Minimum Limits of Liability
	Worker’s Compensation
	 	Statutory
	Employer’s Liability
	 	$1,000,000
	Automobile Liability
	 	$1,000,000 per occurrence
	Comprehensive General Liability
	 	 
	(Including Products Liability)
	 	$1,000,000 per occurrence
	 
	 	 
	Umbrella/Excess Liability
	 	$1,000,000 per occurrence

All policies must be primary and non-contributing and shall include Applied as an additional
insured. Supplier also waives all rights of subrogation. Supplier will require and verify that
each of its Sub-tier Suppliers carries at least the same insurance coverage and minimum limits of
insurance, as Supplier is required to carry pursuant to the Agreement. Supplier shall notify
Applied at least thirty (30) days prior to the cancellation or implementation of any material
change in the foregoing policy coverage that would affect Applied’s interests. Upon request,
Supplier shall furnish to Applied as evidence of insurance a certificate of insurance stating that
the coverage will not be canceled or materially altered without thirty (30) days prior notice to
Applied.

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GLOBAL SUPPLY AGREEMENT

26. Miscellaneous.

(a) Assignment. This Agreement shall be binding on, and inure to the benefit of, the
Parties and their respective permitted assigns. Supplier shall not assign or otherwise transfer
this Agreement or any of Supplier’s rights or obligations hereunder, in any manner, including by
way of merger, exchange or combination, or sale of all or substantially all of its assets or the
assets of any line of business involved in Supplier’s performance of this Agreement (each a “Change
in Control”), or otherwise, without the prior written consent of Applied. Applied may assign or
otherwise transfer this Agreement or any of its rights or obligations hereunder, in whole or part,
at any time.

(b) Change of Control. Supplier will notify Applied immediately if they become aware of
the acquisition by any person of [* *].

(c) Waiver. If either Party fails to insist on performance of any term or condition, or
fails to exercise any right or privilege hereunder, such failure shall not constitute a waiver of
such term, condition, right or privilege.

(d) Survival of Obligations. Termination or expiration of this Agreement will not relieve
either Party of its obligations under Sections 8(c), 9, 11(a) — (i),(m — n), 12, 19, 20(d) — (f),
21 — 24, 26(c) — (e), (g), (i) — (k), (n), (o), (q), (r), (s) nor will termination or expiration
relieve the Parties from any liability arising prior to the date of termination or expiration.

(e) Severability. Any provision of this Agreement that is held unenforceable or invalid
for any reason by a court of competent jurisdiction shall be severed from this Agreement, and the
remainder of the Agreement shall continue in effect; provided, that such unenforceable or invalid
provision shall be given effect to the maximum extent then permitted by law.

(f) General Compliance with Laws and EEO Regulations. Supplier represents, warrants and
agrees that (i) Supplier’s execution, delivery and performance of this Agreement will not conflict
with or violate any applicable law, rule, regulation, order, decree, or ordinance; and (ii)
Supplier shall comply with the requirements of 41 CFR §§ 60-1.4(a) —250.5(a), and —741.5(a), if
applicable, relating to equal opportunity clauses pertaining to government contracts.

(g) Compliance with Securities Laws. The Parties agree that certain of the Confidential
Information, including new product plans and Internal Applied Data, as well as certain Supplier
confidential information which may be disclosed to Applied by Supplier pursuant to any separate non
disclosure Agreement (‘Supplier Confidential Information’) may be “material, nonpublic information”
for purposes of federal or state securities laws, the awareness of which prohibits either Party and
its employees, contractors, representatives and agents from (i) buying or selling the other Party’s
securities (stock, options, etc.) (i.e., “insider trading”) and (ii) passing Confidential
Information and/or Supplier Confidential Information on to anyone who may buy or sell the other
Party’s securities (i.e., “tipping”), until after the information has been disclosed to the public
and absorbed by the market. Without limiting any of either Party’s other obligations under this
Agreement, both Parties will comply with all federal and state securities laws prohibiting insider
trading and tipping, and shall immediately notify the other Party in the event of any insider
trading or tipping by such Party or its employees, contractors, representatives or agents of which
it becomes aware.

(h) No Gratuity; FCPA. Supplier and Applied mutually agree that they will not offer or
give any gratuity to induce any person or entity to enter into, execute or perform the Agreement or
any other agreement with the other Party. Supplier and Applied each further represent to the other
that it has knowledge and understanding of the Foreign Corrupt Practices Act of the United States
of America, and that no principal, partner, officer, director or employee of Supplier or Applied,
respectively, is or will become an official of any governmental body of any country (other than the
U.S.) in which it provides goods or services during the Term. Supplier and Applied each agrees
that it shall not, in the conduct of its performance under this

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GLOBAL SUPPLY AGREEMENT

Agreement, and with regard to any funds, assets, or records relating thereto, offer, pay, give, or
promise to pay or give, directly or indirectly, any payment or gift of any money or thing of value
to (i) any non-U.S. government official to influence any acts or decisions of such official or to
induce such official to use his influence with the local government to effect or influence the
decision of such government in order to assist such Party or the other Party in its performance of
its obligations under this Agreement or to benefit the other Party; (b) any political party or
candidate for public office for such purpose; or (ii) any person if such Party knows or has reason
to know that such money or thing of value will be offered, promised, paid, or given, directly or
indirectly, to any official, political party, or candidate for such purpose. In the event of any
breach by Supplier or Applied of this Section, (1) the aggrieved Party will have a lawful claim
against the other Party for any funds and/or the value of property paid by the other Party in
breach of this provision, (2) the Party which is in material breach of this Agreement will
automatically surrender any claim for fees and other payments due under this Agreement, and (3)
this Agreement will automatically be rendered void.

(i) Applicable Law, Jurisdiction, Venue. This Agreement shall be governed by and construed
under the laws of California, excluding its conflicts of law rules. Items shall be deemed and
shall qualify as goods under the Uniform Commercial Code as adopted in California. Any suit
arising out of this Agreement, at law or in equity, shall be brought in a state or federal court in
California, the jurisdiction of which state or federal court includes Santa Clara County,
California, provided that such court has jurisdiction over the subject matter of the suit. Each
Party consents to personal jurisdiction in the above courts. Supplier further consents to such
venue as Applied selects in any of such courts.

(j) CISG. With respect to transactions to which the 1980 United Nations Convention on
Contracts for the International Sale of Goods (“CISG”) would otherwise apply, the rights and
obligations of the Parties under the Agreement shall not be governed by the provisions of the CISG.

(k) General Representations. Supplier represents and warrants as follows: (i) Supplier is
duly organized, validly existing, and in good standing under the laws of the jurisdiction of its
organization; and (ii) Supplier’s execution and delivery of this Agreement and Supplier’s
performance of its obligations hereunder will not (1) violate any provision of the charter, bylaws
or other governing document of Supplier, or (2) conflict with, result in a breach of, or constitute
a default under, any other agreement or arrangement by which Supplier is bound.

(l) Force Majeure. If and to the extent that a Party’s performance of any of its
obligations pursuant to this Agreement is prevented, hindered or delayed by fire, flood,
earthquake, elements of nature or acts of God, acts of war, terrorism, riots, civil disorders,
rebellions, revolutions, strikes, labor disputes or any other similar cause beyond the reasonable
control of such Party (each, a “Force Majeure Event”), then the non-performing, hindered or delayed
Party shall be excused for such non-performance, hindrance or delay, as applicable, of those
obligations affected by the Force Majeure Event for as long as such Force Majeure Event continues;
provided, that such Party continues to use commercially reasonable efforts to recommence
performance whenever and to whatever extent possible without delay, including through the use of
alternate sources, workaround plans or other means. Notwithstanding the preceding sentence, if the
Force Majeure Event continues for a period of more than thirty (30) days, Applied may terminate
this Agreement effective upon delivery of notice to Supplier and such termination shall be deemed a
termination pursuant to Section 21(a). The Party whose performance is prevented, hindered or
delayed by a Force Majeure Event shall promptly notify the other Party in writing of the occurrence
of a Force Majeure Event and describe in reasonable detail the nature of the Force Majeure Event.

(m) No Agency. Each Party shall be deemed to be an independent contractor and not an
agent, joint venturer or representative of the other Party, and neither Party may create any
obligations or responsibilities on behalf of or in the name of the other Party. Each Party also
agrees not to make false or misleading statements, claims or representations about the other Party,
its products or the relationship of the Parties.

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GLOBAL SUPPLY AGREEMENT

(n) Cumulative Remedies. The rights and remedies of Applied provided under this Agreement
are not exclusive, and may be exercised, alternatively or cumulatively, with any other rights and
remedies available to Applied under this Agreement or in law or in equity.

(o) Amendments and Modifications; Captions and Construction. Except as provided in Section
2(c) (Updating Business Processes), amendments or revisions to this Agreement must be in writing,
signed by both Applied and Supplier duly authorized representatives, traced by revision numbers and
attached to the original of this Agreement. Captions in this Agreement are for the convenience of
the Parties only and shall not affect the interpretation or construction of this Agreement. As used
in this Agreement, “include” and “including” shall mean “without limitation.” Time is of the
essence with respect to Supplier’s performance under this Agreement.

(p) Counterparts and Facsimile. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an original, and such
counterparts together shall constitute the same instrument. For purposes hereof, a facsimile copy
of this Agreement, including the signature pages hereto, shall be deemed an original.

(q) Notices. Any notice, consent or approval required or permitted under this Agreement
shall be in writing (unless otherwise expressly stated) and shall be given (1) personally; (2) by
postage prepaid registered or certified airmail, return receipt requested; (3) by overnight express
courier; (4) by facsimile with confirmation of delivery; or (5) by email with confirmation of
delivery; to the Parties as follows:

Advanced Energy Industries, Inc.

Mark Blaze

VP — Manager AMAT Account Team

Fax: [* *]

Email: [* *]

Jim Guilmart

Senior Vice President — Global Customer Operations

Fax: [* *]

Email: [* *]

Kevin Thomas

Vice President — Customer Service

Email: [* *]

Applied:

Applied Materials, Inc.

Giovanni Ghisletti

SAT Lead

Phone: [* *]

Fax: [* *]

Email: [* *]

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GLOBAL SUPPLY AGREEMENT

In addition, any notice pursuant to Section 21 (Termination) or Section 23 (Indemnity) shall be
copied to the following:

Notices to Applied:

Vice President of Legal Affairs

2881 Scott Blvd., M/S 2062

Santa Clara, CA 95050

Fax: (408) 986-2836

Notices to Supplier:

__________________________

__________________________

__________________________

__________________________

Either Party may change the person(s) and/or address(es) designated above effective ten (10) days
following delivery of notice of such change(s). Notice shall be deemed given on the date
delivered, if delivered personally; three (3) days following the date deposited in the U.S. Mail
properly addressed, if by postage prepaid registered or certified airmail, return receipt
requested; on the date of delivery, if by overnight express courier; and on the date of confirmed
transmission, if by facsimile or email.

(r) Foreign Translation. This Agreement is written in the English language. The English
text of this Agreement shall prevail over any translation thereof.

(s) Entire Agreement. This Agreement, including its Attachments, together with a [* *]
(which agreement shall be deemed amended to refer to the date of this Agreement and the section
number of this Agreement) and a NDA executed concurrently with this GSA covering Supplier general
information (as set forth in Attachment A of such NDA) set forth the entire understanding and
agreement of the Parties as to the subject matter of this Agreement and supersedes all prior
agreements, understandings, proposals and representations, oral or written, between the Parties as
to the subject matter. In the event of any conflict between or among any documents which are part
of this Agreement, the following order of precedence shall apply: (i) Global Supply Agreement; (ii)
Attachment 1; (iii) Exhibit A; (iv) Specifications; and (v) Authorized Demand Signal.

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     By execution hereof, the person signing for Supplier below hereby certifies, represents and
warrants that he/she has read this Agreement and that he/she is duly authorized to execute this
Agreement on behalf of the Supplier.

	 	 	 	 	 	 	 
	Accepted:	 	 	 	 
	 
	 	 	 	 	 	 
	APPLIED MATERIALS, INC.	 	ADVANCED ENERGY INDUSTRIES, INC.
	 
	 	 	 	 	 	 
	BY:

	 	 	 	BY:	 	 
	

	 	 
	 	 	 	 
	

	 	Signature
	 	 	 	Signature
	 
	 	 	 	 	 	 
	 
Printed Name	 	 
Printed Name
	 
	 	 	 	 	 	 
	 
Title:	 	 
Title:
	 
	 	 	 	 	 	 
	 
Date:	 	 
Date:
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	

	 	 	 	BY:	 	 
	

	 	 	 	 	 	 
	

	 	 	 	 	 	Signature
	 
	 	 	 	 	 	 
	 	 	 	 	 
Printed Name
	 
	 	 	 	 	 	 
	 	 	 	 	 
Title:
	 
	 	 	 	 	 	 
	 	 	 	 	 
Date:

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ADDENDUM TO GLOBAL SUPPLY AGREEMENT

BETWEEN APPLIED MATERIALS AND

ADVANCED ENERGY INDUSTRIES

TO ADD CERTAIN ITEMS TO ATTACHMENT 1

This Addendum is made as of August 29, 2005 (the “Effective Date”) by Applied Materials, Inc.
(“APPLIED”), a Delaware Corporation having its principal place of business in Santa Clara,
California and between Advanced Energy Industries, Inc. (“SUPPLIER”), a Delaware Corporation, and
will remain in effect for a period of three (3) years except as otherwise noted below and is attached to and
incorporated into that certain Global Supply Agreement, (“GSA”), signed previously or
simultaneously by the Parties.

	1.1	 	SUPPLIER and APPLIED intend to add the [* *]  and [* *]  (collectively referred to as “Addendum
Items ”) as Items to Attachment 1 of the GSA subject to the supplemental provisions set forth
in this Addendum.
	 
	1.2	 	Capitalized terms used in this Addendum will, unless separately defined herein, have the same
meaning as in the GSA.

2.0 [* *]  System (the “[* *]  Item”):

	2.1	 	For as long as the [* *]  Item is listed on Attachment 1, APPLIED will [* *]  the [* *]  Item
(APPLIED part number [* *]; SUPPLIER part number [* *]) as [* *]  system (as compared to a [*
*]) for [* *]  and provided that APPLIED purchase of [* *]  and/or [* *]  that are not [* *]  as a
[* *]  system is not [* *]  by this clause.
	 
	2.2	 	The Contract Price for the [* *]  Item shall be $[* *]  per unit.
	 
	2.3	 	This Contract Price will apply to all SUPPLIER shipments of the [* *]  Item beginning on [*
*], 2005.
	 
	2.4	 	APPLIED will support SUPPLIER’s [* *]  Item [* *]  efforts by [* *]  models. SUPPLIER will
provide [* *]  units to APPLIED for [* *]  purposes. SUPPLIER shall limit the number of [* *]
to [* *]  per calendar year. [* *]  time frames shall be [* *]  those required for [* *]  product
and component [* *]. In the event that [* *]  products are [* *], this Addendum will be
terminated. Contract Prices for the [* *]  Item will then be subject to [* *].
	 
	2.5	 	Upon request by SUPPLIER, APPLIED will provide a copy of the applicable APPLIED [* *]  to show
that the [* *]  Item is [* *]  for the application specified[* *]  .

3.0 [* *]  and [* *]  (the “[* *]  Items”):

	3.1	 	For as long as the [* *]  Items are listed on Attachment 1 APPLIED will [* *]  the [* *]  Items
as the [* *]  for [* *]  (e.g. [* *]  and other [* *]), and for existing [* *]  for which it is [*
*] as of the Effective Date of this Addendum [* *].
	 
	3.2	 	APPLIED agrees with SUPPLIER to [* *]  on [* *]  for [* *]  for [* *]. Item Contract Prices for
[* *]  will be [* *]. If APPLIED and SUPPLIER [* *]  Contract Prices and/or other terms for any
[* *], APPLIED has the right to [* *]  power supplies to [* *], this Addendum [* *]  and
Contract Prices for the [* *]  Items will then be subject to [* *].
	 
	3.3	 	[* *]  options of the [* *]  model will be [* *]  by APPLIED to receive the following Contract
Price [* *]:

 

 

	 	a.	 	[* *]% Contract Price [* *]  — [* *]  units @ [* *]¢ / W (New Contract
Price = $[* *])
	 
	 	b.	 	[* *]% Contract Price [* *]  — [* *]  units @ [* *]¢ / W (New Contract
Price = $[* *])

	3.4	 	The [* *]  and any related [* *]  from all SUPPLIER Bills of Material for all [* *]  Item
options. (APPLIED assumes
[* *]  for this [* *].) APPLIED will implement this [* *]  by [* *]  or sooner.
SUPPLIER will [* *]  per unit for each unit supplied to APPLIED with the [* *]  after this
Addendum is executed.
	 
	3.5	 	APPLIED will [* *]  as many other [* *]  as practical [* *]. APPLIED will [* *]  options [* *]
through [* *]  for the [* *]  below. APPLIED will [* *]  make [* *]  to [* *]  the [* *]. Any
remaining [* *]  which cannot be [* *]  will be priced as follows:

	 	c.	 	Options [* *]-[* *]: $[* *]  (valid for [* *], then a price of $[* *])
	 
	 	d.	 	Options [* *]+: $[* *]

	3.6	 	APPLIED will support SUPPLIER’s [* *]  by promptly [* *]  and [* *]  to [* *]. [* *]  will
include, but may not be limited to:

	 	a.	 	[* *]  for [* *]:

	 	i.	 	SUPPLIER will [* *]  the following [* *]  for [* *];
APPLIED to [* *]  within [* *]  business days, and units to [* *]  within [*
*] business days of receipt:
	 
	 	ii.	 	[* *]
	 
	 	iii.	 	[* *]
	 
	 	iv.	 	[* *]

	 	b.	 	Migration to [* *]:

	 	v.	 	SUPPLIER will [* *]  Item [* *]  for the following
existing [* *]  for [* *]; APPLIED to [* *]  within [* *]  business days,
and units to [* *]  within [* *]  business days of receipt:
	 
	 	vi.	 	[* *]
	 
	 	vii.	 	[* *]
	 
	 	viii.	 	[* *]

c. In the event that [* *]  considered in 3.6.a., 3.6.b. and/or other later [* *]
products are [* *]  by APPLIED, this Addendum [* *]  and prices for the [* *]  Items will
then be subject to [* *].

d. Once 3.6.a. and 3.6.b. above are completed SUPPLIER shall limit the number of [* *]
to [* *]  per calendar year. In the event such [* *] require a new SUPPLIER [* *]  then
[* *]. Otherwise, if [* *]  do not require a new SUPPLIER [* *], Applied may [* *]  for
such [* *]  under terms similar to those noted in 3.6.a above including the [* *]
business day [* *], and provided these [* *]  successfully meet all of Applied’s [* *],
Applied will [* *]  as determined by SUPPLIER.

	3.7	 	The [* *]  Items will be [* *]  and [* *]  on the applicable APPLIED [* *]  as a [* *]  for all
[* *]  as of the Effective Date of this Addendum.
	 
	3.8	 	APPLIED will [* *], and SUPPLIER will [* *], a sufficient quantity of currently [* *]  by no
later than [* *], such that the total quantity of remaining [* *]  is no greater than a total
of [* *]. SUPPLIER will allow APPLIED to make a [* *]  of any such [* *]  that is [* *].

 

 

	3.9	 	Contract Prices noted in this section 3 will apply to all SUPPLIER shipments of [* *]  Items
beginning on [* *], 2005.
	 
	3.10	 	Upon request by SUPPLIER, APPLIED will provide a copy of the applicable APPLIED [* *]  to
show that the [* *]  Items are [* *]  for the [* *]  specified [* *]  above.

4.0 General:

	4.1	 	This Addendum shall be part of and subject to the GSA and all the terms in the GSA shall
remain unmodified and in full force and effect except to the limited extent expressly modified
by this Addendum. This Addendum shall only apply to Addendum Items.
	 
	4.2	 	Nothing herein shall preclude APPLIED from [* *]  due to (a) the Addendum Item’s [* *]
Specifications or (b) SUPPLIER’s [* *]  Addendum Items within the [* *]  requirements agreed
upon by the Parties. In the event such [* *]  occurs, this Addendum shall terminate and
Contract Prices for Addendum Items will then be subject to [* *]. Further, this section 4.2
does not negate, waive, replace or supercede any of the remedies available to APPLIED for
non-performance or breach as defined in the GSA.
	 
	4.3	 	This Addendum along with the GSA sets forth the entire understanding and agreement of the
Parties as to the subject matter of this Addendum and supercedes all prior agreements,
understandings, proposals and representations, oral or written, between the Parties as to such
subject matter.
	 
	4.4	 	If any provision of this Addendum is held to be invalid, illegal, void, voidable, unlawful
or otherwise unenforceable, the remaining portions of the Addendum shall remain in full force
and effect, and the validity, legality, and enforceability of the remaining provisions shall
not in any way be affected or impaired thereby.

IN WITNESS WHEREOF, the parties hereto have caused this Addendum to be executed by their fully
authorized representatives as of the date corresponding to their respective signature, but
effective as of Effective Date of this Addendum.

	 	 	 
	APPLIED MATERIALS, INC.

	 	ADVANCED ENERGY INDUSTRIES, INC.
	 
	 	 
	_______________________________

Authorized Signature

	 	_______________________________

Authorized Signature
	 
	 	 
	_______________________________

Name

	 	_______________________________

Name
	 
	 	 
	_______________________________

Title

	 	_______________________________

Title
	 
	 	 
	_______________________________

Date

	 	_______________________________

Date

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