Document:

form8k-exhibit4_1.htm

Exhibit 4.1

 

 

PPL ELECTRIC UTILITIES CORPORATION

 

TO

 

THE BANK OF NEW YORK MELLON

 

 

Trustee

 

_____________________________

 

Supplemental Indenture No. 11

Dated as of  July 1, 2011

 

_____________________________

 

Supplemental to the Indenture

dated as of August 1, 2001

 

_____________________________

 

Providing for Certain Amendments to said Indenture

 

 

Supplemental Indenture No. 11

 

SUPPLEMENTAL INDENTURE No. 11, dated as of the 1st day of July, 2011, made and entered into by and between PPL ELECTRIC UTILITIES CORPORATION, a corporation of the Commonwealth of Pennsylvania, having its principal corporate offices at Two North Ninth Street, Allentown, Pennsylvania 18101 (hereinafter sometimes called the “Company”), and THE BANK OF NEW YORK MELLON, a New York banking corporation, having its corporate trust office at 101 Barclay Street, 4th Floor, New York, New York 10286 (hereinafter sometimes called the “Trustee”), as Trustee under the Indenture, dated as of August 1, 2001 (hereinafter called the “Original Indenture”), this Supplemental Indenture No. 11 being supplemental thereto.  The Original Indenture and any and all indentures and instruments supplemental thereto are hereinafter sometimes collectively called the “Indenture.”

 

RECITALS OF THE COMPANY

 

The Original Indenture was authorized, executed and delivered by the Company to provide for the issuance from time to time of its Securities (such term and all other capitalized terms used herein without definition having the meanings assigned to them in the Original Indenture), to be issued in one or more series as contemplated therein, and to provide security for the payment of the principal of and premium, if any, and interest, if any, on such Securities.

 

The Company has heretofore executed and delivered to the Trustee Supplemental Indentures for the purposes recited therein and for the purpose of creating series of securities as set forth in Schedule A hereto.

 

The Company desires to (a) change the bonding ratio contemplated in Section 1603 of the Original Indenture and to make corresponding changes, as contemplated in Section 101 of this Supplemental Indenture No. 11 and set forth in Schedule B hereto and (b) correct a defective cross reference in the Original Indenture as set forth in Section 102 hereof, all such changes to be made pursuant to clause (1) in Section 1301 of the Original Indenture.

 

NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE NO. 11 WITNESSETH, that, for and in consideration of the premises and of the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed as follows:

 

ARTICLE ONE

 

Amendments

 

SECTION 101. Amendments to Original Indenture to Change Bonding Ratio

 

The Original Indenture, as heretofore amended, is hereby further amended as set forth on Schedule B to this Supplemental Indenture; provided, however, that

 

(a)  the amendments set forth on Schedule B shall not become effective until there shall have been delivered to the Trustee, in connection with the authentication and delivery of Securities, the release of Funded Property, the withdrawal of cash or any other purpose, an Expert's Certificate under Section 1603(b)(ii) of the Original Indenture in clause (9) of which there shall be stated as an additional deduction to be made pursuant to such clause (9) an amount equal to or greater than $153,760,163.00;

 

(b)  clause (9) of the first such Expert's Certificate delivered after July 8, 2011 for any such purpose shall contain such additional deduction; and

 

(c)  such amendments shall become effective, without further act, simultaneously with the effectiveness of the delivery of such Expert's Certificate (so that such Expert's Certificate and any other documents delivered to the Trustee together therewith shall reflect such amendments).

 

SECTION 102. Corrective Amendment to Original Indenture

 

The reference to clause (I) contained in Section 1603(b)(ii)(11) of the Original Indenture, as heretofore amended, is hereby changed to clause (9).

 

ARTICLE TWO

 

Miscellaneous Provisions

 

SECTION 201. This Supplemental Indenture No. 11 is a supplement to the Original Indenture, as heretofore amended and supplemented.  As amended and supplemented by this Supplemental Indenture No 11, the Original Indenture, as heretofore amended and supplemented, is in all respects ratified, approved and confirmed, and the Original Indenture, as heretofore amended and supplemented, and this Supplemental Indenture No. 11 shall together constitute the Indenture.

 

SECTION 202. The recitals contained in this Supplemental Indenture No. 11 shall be taken as the statements of the Company, and the Trustee assumes no responsibility for their correctness and makes no representations as to the validity or sufficiency of this Supplemental Indenture No. 11.

 

This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture No. 11 to be duly executed as of the day and year first written above.

 

               

 

	 PPL ELECTRIC UTILITIES CORPORATION
	 	 
	 	 
	
By:

	
/s/ James E. Abel

	  	
Name:   James E. Abel

	  	
Title:     Treasurer

 

 

 

 

 

              

	 THE BANK OF NEW YORK MELLON, as Trustee
	 
	 	 
	
By:

	
/s/ Teisha Wright

	  	
Name:    Teisha Wright

	  	
Title:      Senior Associate

 

 

 

	
COMMONWEALTH OF PENNSYLVANIA

	
)

	  
	  	
)

	
SS.:

	
COUNTY OF LEHIGH

	
)

	  

 

On this 8th day of July, 2011, before me, a notary public, the undersigned, personally appeared James E. Abel, who acknowledged himself to be the Treasurer of PPL ELECTRIC UTILITIES CORPORATION, a corporation of the Commonwealth of Pennsylvania and that he, as such Treasurer, being authorized to do so, executed the foregoing instrument for the purposes therein contained, by signing the name of the corporation by himself as Treasurer.

 

In witness whereof, I hereunto set my hand and official seal.

 

	
/s/ Deborah A. Muhr

	
Notary Public

	  

 

 

	
STATE OF NEW YORK

	
)

	  
	  	
)

	
SS.:

	
COUNTY OF NEW YORK

	
)

	  

On this 8th day of July, 2011, before me, a notary public, the undersigned, personally appeared Teisha Wright, who acknowledged himself/herself to be a Senior Associate of THE BANK OF NEW YORK MELLON, a corporation and that he/she, as Senior Associate, being authorized to do so, executed the foregoing instrument for the purposes therein contained, by signing the name of the corporation by himself or herself as Senior Associate.

 

In witness whereof, I hereunto set my hand and official seal.

 

	
By:

	
/s/ Danny Lee

	  	
Notary Public

 

The Bank of New York Mellon hereby certifies that its precise name and address as Trustee hereunder are:

 

The Bank of New York Mellon

101 Barclay Street, 4th Floor

New York, New York 10286

Attn:  Global Structured Finance

 

 

	 THE BANK OF NEW YORK MELLON, as Trustee
	 
	 	 
	
By:

	
/s/ Teisha Wright

 

                  

 

 

 

 

 

SCHEDULE A

 

	
Supplemental Indenture No.

	
Dated as of

	
Series

	
Series Designation

	
Principal Amount Authorized

	
Principal Amount Issued

	
Principal Amount Outstanding1

	
1

	
August 1, 2001

	
First

	
Senior Secured Bonds,

5 7/8% Series due 2007

	
$300,000,000

	
$300,000,000

	
None

	
1

	
August 1, 2001

	
Second

	
Senior Secured bonds,

6 1⁄4% Series due 2009

	
$500,000,000

	
$500,000,000

	
None

	
2

	
February 1, 2003

	
Third

	
Senior Secured Bonds, 3.125% Pollution Control Series due 2008

	
$90,000,000

	
$90,000,000

	
None

	
3

	
May 1, 2003

	
Fourth

	
Senior Secured Bonds, 4.30% Series due 2013

	
$100,000,000

	
$100,000,000

	
None

	
4

	
February 1, 2005

	
Fifth

	
Senior Secured Bonds, 4.70% Pollution Control Series due 2029

	
$115,500,000

	
$115,500,000

	
$115,500,000

	
5

	
May 1, 2005

	
Sixth

	
Senior Secured Bonds, 4.75% Pollution Control Series due 2027

	
$108,250,000

	
$108,250,000

	
$108,250,000

	
6

	
December 1, 2005

	
Seventh

	
Senior Secured Bonds, 4.95% Series due 2015

	
$100,000,000

	
$100,000,000

	
$100,000,000

	
6

	
December 1, 2005

	
Eighth

	
Senior Secured Bonds, 5.15% Series due 2020

	
$100,000,000

	
$100,000,000

	
$100,000,000

	
7

	
August 1, 2007

	
Ninth

	
Senior Secured Bonds, 6.45% Series due 2037

	
$250,000,000

	
$250,000,000

	
$250,000,000

	
8

	
October 1, 2008

	
Tenth

	
Senior Secured Bonds, 7.125% Series due 2013

	
$400,000,000

	
$400,000,000

	
$400,000,000

	
9

	
October 1, 2008

	
Eleventh

	
Senior Secured Bonds, Variable Rate Pollution Control Series 2008

	
$90,000,000

	
$90,000,000

	
$90,000,000

	
10

	
May 1, 2009

	
Twelfth

	
First Mortgage Bonds, 6.25% Series due 2039

	
$300,000,000

	
$300,000,000

	
$300,000,000

 

 

  

1   As of July 1, 2011.  The Company has called the Securities of the Tenth Series for redemption on July 26, 2011.

 

 

 

 

SCHEDULE B

Amendments to Original Indenture

(as heretofore amended)

 

The Original Indenture, as heretofore amended, is hereby further amended to change the bonding ratio from one hundred percentum (100%) to sixty-six and two-thirds percentum (66-2/3%) and to make corresponding changes, as specifically set forth below:

 

1.           (a)  Section 1603(a) of the Original Indenture is hereby amended by inserting the phrase “sixty-six and two-thirds percentum (66-2/3%) of” immediately following the word “exceeding”; and

 

(b)           Section 1603(b)(ii)(12) of the Original Indenture is hereby amended by inserting the phrase “sixty-six and two-thirds percentum (66-2/3%) of” immediately following the word “exceed”.

 

2.           Section 104(b)(ii) of the Original Indenture is hereby amended by inserting at the beginning of each of clauses (2) and (3) thereof the phrase “one hundred fifty percentum (150%) of”.

 

3.           Section 1206 of the Original Indenture is hereby amended by inserting the phrase “an amount equal to one hundred fifty percentum (150%) of” immediately following the word “exceeds” in the first sentence thereof.

 

4.           Section 1706(a) of the Original Indenture is hereby amended by inserting the phrase “sixty-six and two-thirds percentum (66-2/3%) of”

 

(a)           immediately following the word “exceeding” in clause (ii)(C)(1) thereof;

 

(b)           immediately following the words “equal to” in clause (ii)(C)(2)(I)(y) thereof;

 

(c)           immediately following the word “exceeding” in clause (ii)(C)(2)(II) thereof; and

 

(d)           immediately following the word “exceeding” in clause (iii)(G)(1) thereof.

 

5.           Section 1707 of the Original Indenture is hereby amended by deleting from clause (c)(i) thereof the phrase “ten-sevenths (10/7)” and inserting in lieu thereof the phrase “one hundred fifty percentum (150%)”;

 

6.           Section 1803 of the Original Indenture is hereby amended by inserting the phrase “sixty-six and two-thirds percentum (66-2/3%) of”

 

(a)           immediately following the word “which” in the lead-in to clause (d) in the first paragraph of Section 1803;

 

(b)           immediately following the words “equal to” in each of subclauses (i), (ii) and (iv) of clause (d) in the first paragraph of Section 1803 thereof; and

 

(c)           immediately following the words “equal in principal amount to” in the first sentence of the second paragraph of Section 1803.

 

7.           Section 1806 of the Original Indenture is hereby amended by inserting the phrase “sixty-six and two-thirds percentum (66-2/3%) of” immediately following the words “equal to” in clause (a) in the first paragraph thereof.

 

8.           Section 1807 of the Original Indenture is hereby amended by inserting the phrase “sixty-six and two-thirds percentum (66-2/3%) of” immediately following the words “equal to” in clause (d) in the first sentence thereof.

 

9.           Section 1815(b) of the Original Indenture is hereby amended by inserting the phrase “sixty-six and two-thirds percentum (66-2/3%) of” immediately following the word “exceed” in the proviso contained in the second paragraph thereof.Exhibit 10.1

STOCK PURCHASE AGREEMENT

among

11 GOOD ENERGY SCIENCES, INC.
 (a Delaware corporation)

and

KAI BIOENERGY CORP.
 (a Hawaiian corporation)

and

MARIO LARACH AND FRANK INFELISE
THE STOCKHOLDERS OF KAI BIOENERGY CORP.

JULY 11, 2011

STOCK PURCHASE AGREEMENT

          This Stock
Purchase Agreement (this “Agreement”)
is entered into as of July 11, 2011, by and among 11 Good Energy, Inc., a
Delaware corporation (“Parent”), 11 Good Energy Sciences, Inc, a
Delaware corporation and a wholly-owned subsidiary of Parent (“Buyer”),
Kai BioEnergy Corp., a Hawaiian corporation (“Company”) and the Company’s
stockholders, namely, Mario Larach and Frank Infelise (such stockholders,
collectively, the “Sellers”).

STATEMENT OF PURPOSE

          The Sellers
collectively own all of the outstanding Common Stock of the Company. The Buyer
has agreed to purchase from the Sellers, and the Sellers have agreed to sell to
the Buyer, all of the outstanding Common Stock of the Company for the
consideration and on the terms and subject to the conditions set forth in this
Agreement.

ARTICLE I

DEFINITIONS

          “A/P
Amount” is defined in Section 2.2(b).

          “Accounts
Receivable” means all trade and other accounts
receivable and other Indebtedness owing to the Company.

          “Active
Employees” means all employees employed by the
Company, including employees on temporary leave of absence, including family
medical leave, military leave, disability leave or sick leave.

          “Acquisition
Proposal” is defined in Section 6.6.

          “Affiliate”
means, with respect to a specified Person, any other Person that directly or
indirectly controls, is controlled by, or is under common control with, the
specified Person. The term “control” means (a) the possession, directly or
indirectly, of the power to vote 10% or more of the securities or other equity
interests of a Person having ordinary voting power, (b) the possession,
directly or indirectly, of the power to direct or cause the direction of the
management policies of a Person, by contract or otherwise, or (c) being a
director, officer, executor, trustee or fiduciary (or their equivalents) of a
Person or a Person that controls such Person.

          “Agreement”
is defined in the opening paragraph.

          “Assets”
is defined in Section 4.8.

          “Balance
Sheet” means the unaudited balance sheet of the
Company as at December 31, 2010, and any applicable notes thereto, all of which
are attached to Schedule 4.5.

          “Balance
Sheet Date” means the date of the Balance Sheet.

          “Basket”
is defined in Section 10.4.

          “Business
Day” means any day that is not a Saturday, Sunday or
any other day on which banks are required or authorized by law to be closed in
the State of California.

          “Buyer”
is defined in the opening paragraph.

          “Closing”
is defined in Section 2.1(b).

          “Closing
Balance Sheet” means a balance sheet of the Company as
of the Closing Date and prepared in accordance with GAAP in a manner consistent
with the Interim Balance Sheet, except as disclosed on Schedule 6.8.

1

          “Closing
Date” is defined in Section 2.1(b).

          “COBRA”
means the requirements of Part 6 of Subtitle B of Title I of ERISA and Code
§ 4980B.

          “Code”
means the Internal Revenue Code of 1986.

          “Company”
means Kai BioEnergy Corp.

          “Confidential
Information” means the Intellectual Property and
Technology of the Company, including, without limitation the following: the
patent application covering the “Continuous cultivation, harvesting and oil
extraction of photosynthetic cultures,” the patent application covering
“Hydrodynamic extraction of oils from photosynthetic cultures” and all
technology and other information concerning the businesses or affairs of the
Company, including information relating to customers, clients, suppliers,
distributors, investors, lenders, consultants, independent contractors or
employees, price lists and pricing policies, financial statements and
information, budgets and projections, business plans, production costs, market
research, marketing, sales and distribution strategies, manufacturing
techniques, processes and business methods, technical information, pending
projects and proposals, new business plans and initiatives, research and
development projects, inventions, discoveries, ideas, technology, trade
secrets, know-how, formulae, designs, patterns, marks, names, improvements,
industrial designs, mask works, works of authorship and other intellectual
property, devices, samples, plans, drawings and specifications, photographs and
digital images, computer software and programming, all other confidential
information and materials relating to the businesses or affairs of such
Company, and all notes, analyses, compilations, studies, summaries, reports,
manuals, documents and other materials prepared by or for such Company
containing or based in whole or in part on any of the foregoing, whether in
verbal, written, graphic, electronic or any other form and whether or not
conceived, developed or prepared in whole or in part by such Company.

          “Consent”
means any consent, approval, authorization, permission or waiver.

          “Contract”
means any contract, obligation, understanding, commitment, lease, license,
purchase order, bid or other agreement, whether written or oral and whether
express or implied, together with all amendments and other modifications
thereto. 

          “Employee
Benefit Plan” means any (a) qualified or nonqualified
Employee Pension Benefit Plan (including any Multiemployer Plan) or deferred
compensation or retirement plan or arrangement, (b) Employee Welfare Benefit
Plan or (c) equity-based plan or arrangement (including any stock option, stock
purchase, stock ownership, stock appreciation or restricted stock plan) or
material fringe benefit or other retirement, severance, bonus, profit-sharing
or incentive plan or arrangement.

          “Employee
Pension Benefit Plan” has the meaning set forth in
ERISA § 3(2).

          “Employee
Welfare Benefit Plan” has the meaning set forth in
ERISA § 3(1).

          “Employment
Agreements” means the Employment Agreements with each
of Mario Larach and Frank Infelise in the form of Exhibit A.

          “Encumbrance”
means any lien, mortgage, pledge, encumbrance, charge, security interest,
adverse or other claim, community property interest, condition, equitable
interest, option, warrant, right of first refusal, easement, profit, license,
servitude, right of way, covenant, zoning or other restriction of any kind or
nature.

          “Environmental
Law” means any Law relating to the environment, health
or safety, including any Law relating to the presence, use, production,
generation, handling, management, transportation, treatment, storage, disposal,
distribution, labeling, testing, processing, discharge, release, threatened
release, control or cleanup of any material, substance or waste limited or
regulated by any Governmental Body.

          “ERISA”
means the Employee Retirement Income Security Act of 1974.

2

          “Financial
Statements” is defined in Section 4.5(a).

          “Funded
Debt” means all obligations of the Company for
borrowed money, all interest-bearing obligations of the Company, and all
obligations of the Company evidenced by bonds, notes, debentures or other
similar instruments, in each case as of the Closing Date.

          “GAAP”
means generally accepted accounting principles in the United States as set
forth in pronouncements of the Financial Accounting Standards Board (and its
predecessors) and the American Institute of Certified Public Accountants and,
unless otherwise specified, as in effect on the date hereof or, with respect to
any financial statements, the date such financial statements were prepared.

          “Governmental
Body” means any federal, state, local, foreign or
other government or quasi-governmental authority or any department, agency,
subdivision, court or other tribunal of any of the foregoing.

          “Hazardous
Substance” means any material, substance or waste that
is limited or regulated by any Governmental Body or, even if not so limited or
regulated, could pose a hazard to the health or safety of the occupants of the
Real Property or adjacent properties or any property or facility formerly
owned, leased or used by the Company. The term includes asbestos,
polychlorinated biphenyls, petroleum products and all materials, substances and
wastes regulated under any Environmental Law.

          “HSR
Act” means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976.

          “Indebtedness”
means as to any Person at any time: (a) obligations of such Person for borrowed
money; (b) obligations of such Person evidenced by bonds, notes, debentures or
other similar instruments; (c) obligations of such Person to pay the deferred
purchase price of property or services (including all obligations under
noncompete, consulting or similar arrangements), except trade accounts payable
of such Person arising in the ordinary course of business that are not past due
by more than 90 days or that are being contested in good faith by appropriate
proceedings diligently pursued and for which adequate reserves have been
established on the financial statements of such Person; (d) capitalized lease
obligations of such Person; (e) indebtedness or other obligations of others
guaranteed by such Person; (f) obligations secured by an Encumbrance existing
on any property or asset owned by such Person; (g) reimbursement obligations of
such Person relating to letters of credit, bankers’ acceptances, surety or other
bonds or similar instruments; (h) Liabilities of such Person relating to
unfunded, vested benefits under any Employee Benefit Plan (excluding
obligations to deliver stock pursuant to stock options or stock ownership
plans); and (i) net payment obligations incurred by such Person pursuant to any
hedging agreement.

          “Indemnified
Party” is defined in Section 10.6.

          “Indemnifying
Party” is defined in Section 10.6.

          “Intellectual
Property” means the Technology as herein defined and
(a) inventions (whether patentable or unpatentable and whether or not reduced
to practice), improvements thereto, and patents, patent applications and patent
disclosures, together with reissuances, continuations, continuations-in-part,
revisions, extensions and reexaminations thereof relating to the business of
the Company; (b) trademarks, service marks, trade dress, logos, trade names and
corporate names, together with translations, adaptations, derivations and
combinations thereof and including goodwill associated therewith, and
applications, registrations and renewals in connection therewith relating to
the business of the Company; (c) copyrightable works, copyrights, and
applications, registrations and renewals in connection therewith relating to
the business of the Company; (d) mask works and applications, registrations and
renewals in connection therewith relating to the business of the Company; (e)
trade secrets and confidential business information (including ideas, research
and development, know-how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information, and business and
marketing plans and proposals) relating to the business of the Company; (f)
computer software (including data and related documentation); (g) other
proprietary rights relating to the business of the Company; and (h) copies and
tangible embodiments (in whatever form or medium) of any of the foregoing (with
the Technology being included in the meaning of items (a) and (f).

3

          “Interim
Balance Sheet” is defined in Section 4.5(a).

          “Interim
Balance Sheet Date” means the date of the Interim
Balance Sheet as defined in Section 4.5(a).

          “Inventory”
means all inventories of the Company wherever located, including raw materials,
goods consigned to vendors or subcontractors, works in process, finished goods,
spare parts, goods in transit, products under research and development,
demonstration equipment and inventory on consignment.

          “IRS”
means the U.S. Internal Revenue Service.

          “Knowledge”
(i) as applied to the Company, means the actual knowledge of Mario Larach or
Frank Infelise and (ii) as applied to any Seller, the actual knowledge of such
Seller.

          “Law”
means any federal, state, local, foreign or other law, statute, ordinance,
regulation, rule, regulatory or administrative guidance, Order, constitution,
treaty, principle of common law or other restriction of any Governmental Body.

          “Lease”
is defined in Section 4.12(b).

          “Leased
Real Property” is defined in Section 4.12(b).

          “Liability”
means any liability, obligation, Indebtedness or commitment of any kind or
nature, whether known or unknown, asserted or unasserted, absolute or
contingent, accrued or unaccrued, liquidated or unliquidated, or due or to
become due.

          “License”
is defined in Section 4.14(d).

          “Loss”
means any loss, claim, demand, Order, damage, penalty, fine, cost (including
any opportunity cost), settlement payment, Liability, Tax, Encumbrance,
diminution of value, expense, fee, court costs or reasonable attorneys’ fees
and expenses.

          “Material
Adverse Effect” means any material adverse effect on
the businesses, operations, properties, assets, Liabilities, condition
(financial or otherwise) or prospects of the Company taken as a whole.

          “Material
Contracts” is defined in Section 4.13.

          “Multiemployer
Plan” has the meaning set forth in ERISA § 3(37).

          “Noncompete
Agreement” means the Non-Competition, Non-Disclosure
and Non-Solicitation Agreement executed by each Seller in the form of Exhibit
B.

           “Order”
means any order, award, decision, injunction, judgment, ruling, decree, charge,
writ, subpoena or verdict entered, issued, made or rendered by any Governmental
Body or arbitrator.

          “Organizational
Documents” means (a) any certificate or articles of
incorporation, bylaws and/or Operating Agreement, (b) any documents comparable
to those described in clause (a) as may be applicable pursuant to any Law and
(c) any amendment or modification to any of the foregoing.

          “Owned
Real Property” is defined in Section 4.12(a).

          “Parent”
or “Parent Corporation” means 11 Good Energy, Inc. (a Delaware corporation), the parent
corporation of Buyer.

          “Party”
means the Buyer, the Company or any Seller.

4

          “PBGC”
means the Pension Benefit Guaranty Corporation.

          “Permit”
means any permit, license or Consent issued by any Governmental Body or
pursuant to any Law.

          “Permitted
Encumbrance” means (a) any mechanic’s, materialmen’s
or similar statutory lien incurred in the ordinary course of business for
monies not yet due, (b) any lien for Taxes not yet due, (c) any purchase money
lien or lien securing rental payments under capital lease arrangements to the
extent related to the assets purchased or leased and (d) any recorded easement,
covenant, zoning or other restriction on the Real Property that, together with
all other Permitted Encumbrances, does not prohibit or impair the current use,
occupancy, value, or marketability of title of the property subject thereto.

          “Person”
means any individual, corporation, limited liability company, partnership,
company, sole proprietorship, joint venture, trust, estate, association,
organization, labor union, Governmental Body or other entity.

          “Proceeding”
means any proceeding, charge, complaint, claim, demand, notice, action, suit,
litigation, hearing, audit, investigation, arbitration or mediation (in each
case, whether civil, criminal, administrative, investigative or informal)
commenced, conducted, heard or pending by or before any Governmental Body,
arbitrator or mediator.

          “Purchase
Price” is defined in Section 2.2(a).

          “Real
Property” is defined in Section 4.12(c).

          “Related
Person” means (a) with respect to a specified
individual, any member of such individual’s Family and any Affiliate of any
member of such individual’s Family, and (b) with respect to a specified Person
other than an individual, any Affiliate of such Person and any member of the
Family of any such Affiliates that are individuals. The “Family” of a specified
individual means the individual, such individual’s spouse and former spouses,
any other individual who is related to the specified individual or such
individual’s spouse or former spouse within the third degree, and any other
individual who resides with the specified individual. No Company will be deemed
to be a Related Person of any Seller or of any other Company.

          “Representative”
means, with respect to a particular Person, any director, officer, employee,
agent, consultant, advisor or other representative of such Person, including
legal counsel, accountants and financial advisors.

          “Sale
of the Buyer” means the first to occur of (a) a transaction or series of related transactions
whereby any “person” or related “group” of “persons” (as such terms are used in
Sections 13(d) and 14(d)(2) of the Exchange Act) (other than the Parent or
its Affiliates) directly or indirectly acquires “beneficial ownership” (within
the meaning of Rule 13d-3 under the Exchange Act) of the voting securities of
the Buyer or Parent possessing more than seventy percent (70%) of the total
combined voting power of the Buyer’s or the Parent’s equity securities
outstanding immediately after such acquisition; (b) the consummation by the
Buyer or the Parent (whether directly involving the Buyer or the Parent or
indirectly involving the Buyer or the Parent through one or more
intermediaries) of a sale or other disposition of all or substantially all of
the assets of the Buyer (including the exclusive license or sale of the
proprietary technology acquired by the Buyer pursuant to this Agreement) to any
Person other than an Affiliate of the Parent, in each case other than the
transactions contemplated by this Agreement.

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

          “Sellers”
is defined in the opening paragraph.

          “Sellers’
Representative” is defined in Section 11.14(a).

          “Share”
means any issued and outstanding share of common stock, par value $.0001 per
share, of the Buyer.

5

          “Shares
of Parent” means any issued and outstanding shares of
Common Stock, par value $.0001 of Parent.

          “Subsidiary”
means any corporation or other entity with respect to which the Company and its
other Subsidiaries collectively own, directly or indirectly, at least 50% of
the common stock or other equity or profits interests or have the power,
directly or indirectly, to elect a majority of the members of the board of
directors or comparable governing body.

          “Tangible
Personal Property” is defined in Section 4.9.

          “Tax”
means any federal, state, local, foreign or other income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental (including taxes under Code § 59A),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property,
sales, use, transfer, registration, value added, general service, alternative
or add-on minimum, estimated or other tax of any kind whatsoever, however
denominated, and will include any interest, penalty, or addition thereto,
whether disputed or not.

          “Tax
Return” means any return, declaration, report, claim
for refund, or information return or statement relating to Taxes, including any
form, schedule or attachment thereto and any amendment or supplement thereof.

          “Technology”
means the Intellectual Property (as defined herein)
rights of the Company, it being understood that the Company is an early stage
research and development company developing technologies applicable to the
nascent microalgal biofuel industry. The Company holds patent applications and
proprietary technology related to the production of microalgae oil and more
specifically the patent applications “Continuous cultivation, harvesting and
oil extraction of photosynthetic cultures” and “Hydrodynamic extraction of oils
from photosynthetic cultures”

          “Third-Party
Claim” is defined in Section 10.6(a).

          “Transactions”
means the transactions contemplated by the Transaction Documents.

          “Transaction
Documents” means this Agreement, the Noncompete
Agreements, the Employment Agreements, and all other written agreements,
documents and certificates contemplated by any of the foregoing documents.

ARTICLE II

SALE AND PURCHASE OF SHARES

          2.1
Sale and Purchase of the Outstanding Capital Stock of the Company.

                    (a)
Subject to the terms and conditions of this Agreement, the Buyer will purchase
from each Seller, and each Seller will sell and deliver to the Buyer, all of
the outstanding capital stock of the Company owned by each Seller for the
consideration specified below.

                    (b)
The consummation of the Transactions to be performed on the Closing Date (the “Closing”) will take place at the offices of
Buyer, commencing at 10:00 a.m.
local time on or before the fifth Business Day following the satisfaction or
waiver of all conditions to the obligations of the Parties to consummate the
Transactions to be performed on the Closing Date (other than conditions with
respect to actions the Parties will take at the Closing) or such other date as
the Buyer and the Sellers’ Representative may mutually determine, but in no
event later than August 3, 2011 (the “Closing
Date”).

          2.2
Purchase Price.

6

                    (a)
The total amount paid to Sellers (collectively) for the outstanding capital
stock of the Company will be 36,000 shares of Buyer (equal to 36% of Buyer’s
outstanding Common Stock post closing) (i.e. the “Share Amount”) broken down in
accordance with Schedule 2.2(a)) and $300,000 in cash broken down in accordance
with Schedule 2.2(a) (the “Cash Amount”) (it being understood that the
total consideration shall collectively be referred to as the “Purchase Price.”)

                    (b)
Buyer shall also pay (on behalf of and as a capital contribution to the
Company), the amount necessary to satisfy all of the Liabilities of the
Company, excluding any amounts which may be due the Parent, listed on the
Closing Balance Sheet (the “A/P Amount”) up to a maximum of $180,000,
it being understood that any Liabilities above $180,000 is in the sole and
absolute discretion and written consent of Buyer. In addition to the A/P Amount,
Buyer shall also pre-pay three (3) months of each Seller’s monthly health
insurance premium under the Company’s current policy as a transition for
Sellers becoming parties to the Buyer’s health coverage plan.

                    (c) Parent shall issue to each Seller 100,000
options to purchase the Common Stock of the Parent at an exercise price equal
to the lower of either $5.00 per share or the lowest price paid by third party
investors for common stock of Parent in Parent’s ongoing equity financing. Such
options shall be exercisable for a term of seven (7) years. Sixty percent (60%)
of such options shall be fully-vested and exercisable as of the Closing Date
and the remaining forty percent (40%) shall fully vest and be exercisable upon
the Earn-Out Determination Date occurring by the Earn-Out End Date in
accordance with Section 2.4.

          2.3
Closing Conditions. The parties agree that Closing of
the Transactions will occur upon funding of Buyer with at least $1,100,000 in
additional paid in capital. At Closing, the Cash Amount will be paid to Sellers
(together with the Share Amount of the Purchase Price) and (i) $330,000 will be
paid by Buyer to Oracle Capital LLC (“Oracle”) plus 4,000 shares of Buyer
(equal to 4% of Buyer’s outstanding Common Stock post closing) as a placement
fee and (ii) $53,000 will be paid by Buyer to Morrison & Foerster LLP,
counsel to the Company. Such amounts set forth in this Section 2.3 shall be
paid by wire transfer of immediately available funds, unless otherwise mutually
agreed to by the parties, per the wire transfer instructions to be provided by
the parties prior to the Closing Date.

          2.4
Earn-out. At such time as the viability of the
Company, the Buyer, the Parent or any of the Parent’s Affiliates to produce the
aerial productivity equivalent of 3,000 gallons per acre per year of oil from
microalgae is determined in accordance with Schedule 2.4 (the “Earn-Out
Determination Date”), the Sellers shall receive within 45 days of
the Earn-Out Determination Date an aggregate earn-out (the “Earn-Out”)
of $3,300,000, paid in accordance with Schedule 2.4. Such Earn-Out shall
be paid at the sole election of Buyer in cash and/or in Common Stock of Parent
Corporation based upon the then average of the Closing Sales Prices of Parent’s
Common Stock for 20 trading days prior to the Earn-Out Determination Date.
Notwithstanding the foregoing, (i) the Earn-Out shall not be payable in the
event that the Earn-Out Determination Date occurs after November 11, 2013 (the
“Earn-Out
End Date”), (ii) Buyer shall have the option to pay the Earn-Out in
Common Stock of the Parent Corporation solely to the extent it delivers freely
tradable shares registered under an effective registration statement and such
Common Stock is trading on a national securities exchange or similar trading
market (the “Liquidity Condition”) and (iii) in the event of a Sale of the
Buyer on or before the Earn-Out End Date, the Earn-Out shall accelerate to the
extent unpaid and shall be payable to the Sellers in accordance with Schedule
2.4 within seven days of the consummation of such Sale of the Buyer.

          2.5
Buy-out Option. In the event it is determined that the
Earn-Out is payable and an Earn-Out Determination Date has been established in
accordance with Section 2.4 or (ii) the Buyer voluntarily elects to pay the
Earn-Out (described in Section 2.4) to Sellers in which case notice of said
election to Buyer (with a copy to Oracle) shall constitute the establishment of
an Earn-Out Determination Date, the Buyer shall have the option to buy-out the
Sellers’ and Oracle’s entire Common Stock position in the Buyer based upon a
valuation of Buyer of $33,000,000, payable in cash, or, solely if the Liquidity
Condition is satisfied, Parent Corporation’s Common Stock. Based upon Sellers
maintaining their Closing Date 40% ownership of Buyer, this means that Buyer
may repurchase the Sellers’ and Oracle’s collective 40% position at a cost of
$13,200,000. In such event, Buyer shall also have the option to purchase less
than the Sellers and Oracle’s collective 40% position at a proportionately
reduced purchase price. This buy-out option shall be for a period of 45 days
from the Earn-Out Determination Date and shall expire thereafter. In the event
Buyer elects to exercise its buy-out option in whole or in part, it shall give
written notice of said election to the Sellers and Oracle within 30 days of the
Earn-Out Determination Date. Such notice shall specify 

7

the date that the buy-out option shall be exercised, whether or not the
buy-out shall be in whole or in part and the form of payment for Sellers’
Common Stock. In the event Buyer elects to pay Common Stock, the valuation of
Parent Corporation Common Stock shall be based upon the average of the closing
sales prices of Parent’s Common Stock for the 20 trading days immediately
preceding a three business day period prior to the closing date of the buy-out.
Notwithstanding the foregoing, it is agreed to by the parties that the Sellers
and Oracle have the right to retain one-half of their Closing Date position in
Buyer, or collective 20% of Buyer’s Common Stock, irrespective of Buyer’s
exercise of its buy-out option. Accordingly, upon Sellers’ and Oracle’s receipt
of Buyer’s notice of its intent to exercise the buy-out option, the Sellers and
Oracle, at each of their option, shall have a period of seven business days to
notify Buyer in writing that Sellers and/or Oracle are refusing Buyer’s request
to sell Buyer’s Common Stock up to or equal to the maximum amount that each of
Sellers and/or Oracle may refuse pursuant to the provisions of this paragraph.
In such event, the buy-out option shall be exercised by the parties and closed
on the portion of the buy-out option that Sellers and Oracle have not refused
and may not refuse to sell to Buyer. 

          2.6
Sellers’ Transfer of Buyer’s Common Stock. The parties
agree that Sellers may not transfer their Buyer Common Stock unless the
purchaser, transferee, donee, pledgee, or assignee agrees to be bound by the
provisions of Section 2.5 of this Agreement.

          2.7
Company Shareholders. The Sellers agree to use their
commercially reasonable efforts to cooperate with the Company, the Donald
Danforth Plant Science Center, the National Alliance for Advanced Biofuels and
BioProducts executive leadership and the Department of Energy (the “DOE”)
in order to secure all benefits to the Company related to the Company’s
existing grant with the DOE, through the subaward agreement with the Donald
Danforth Plant Science Center. This may include, without limitation, providing
to the DOE, the Donald Danforth Plant Science Center and the NAABB executive
leadership all reasonably required documents and agreements requested by them.

          2.8
Tax Treatment. The parties hereto acknowledge and
agree that the exchange of Company stock by the Sellers for Buyer stock and
cash, together with the contributions of cash to Buyer and the Company
(including the payment of Company Liabilities), in each case as contemplated
hereunder, constitute an exchange of property for Buyer stock subject to
Section 351(a) of the Code coupled with the receipt of other property or money
subject to Section 351(b) of the Code. The Parties shall prepare all Tax
Returns, and take all Tax positions, in a manner consistent with the requirements
of the aforementioned provisions of the Code and any applicable Treasury
Regulations.

          2.9
Additional Paid-In Capital; Transactions with Affiliates.
In accordance with the payment schedule on Schedule 2.9, the Parent
shall provide additional funding of Buyer of at least $2,200,000 in additional
paid in capital. It is agreed by the parties that the Closing Date of this
Transaction shall trigger the first quarter payment referenced in Schedule 2.9
of $615,446 to be due and payable on or before the three-month calendar
anniversary of the Closing Date or within the grace period as defined below.
Thereafter, the second quarter payment of $257,323 shall be due and payable on
or before six months from the Closing Date (or within the grace period as defined
below); the third quarter payment of $257,323 shall be due and payable on or
before nine months from the Closing Date (or within the grace period as defined
below); the fourth quarter payment of $260,398 shall be due and payable on or
before 12 months from the Closing Date (or within the grace period as defined
below); the fifth quarter payment of $520,867 shall be due and payable on or
before 15 months from the Closing Date (or within the grace period as defined
below); and the sixth quarter payment of $288,642 shall be due and payable on
or before 18 months from the Closing Date (or within the grace period as
defined below). Such additional paid-in capital shall not dilute the collective
thirty-six (36%) ownership interest of the Sellers in the Buyer. The proceeds
of such additional funding shall be used for research and development efforts
to further develop the Company’s business in producing oil from microalgae. In
the event that the Parent does not provide such additional paid-in capital in
accordance with the aforementioned schedule or within a grace period of 45 days
following each deadline for payment of such additional paid-in capital as described
above, then, unless otherwise agreed to in writing by the Sellers, the Parent shall forfeit a pro-rata amount (based on the
amount of paid-in capital to be provided in such tranche divided by $2,200,000)
of Sixty-Six and Two-Thirds percent (66 2/3%) of the shares of Common Stock of
the Buyer held by Parent. In such event, the Parent agrees to take all actions and execute all
agreements reasonable or necessary to evidence the forfeiture of such shares of
Common Stock of the Buyer. Following the Closing and until the earlier of the
time the that the Earn-Out is paid or the Earn-Out End Date, all transactions between the Buyer or
the Company, on the one hand, and the Parent or any of its Affiliates, on the
other hand, shall be made on an arms-length basis on 

8

terms no less favorable than those that would be obtained with third
parties, and furthermore the Earn-Out End Date
described in Section 2.4 shall be extended one day for every additional day
that Parent fails to timely meet the requirements of Schedule 2.9.

ARTICLE III

REPRESENTATIONS AND WARRANTIES REGARDING THE SELLERS

          Each Seller
severally represents and warrants as follows:

          3.1
Organization and Authority. If such Seller is not an
individual, such Seller is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or formation.
Such Seller has full power, authority and legal capacity to execute and deliver
the Transaction Documents to which such Seller is a party and to perform such
Seller’s obligations thereunder. If such Seller is not an individual, the
execution and delivery by such Seller of each Transaction Document to which it
is a party and the performance by such Seller of the Transactions have been
duly approved by the board of directors or comparable governing body of such
Seller and, if required by Law, the equity holders of such Seller. This
Agreement constitutes the valid and legally binding obligation of such Seller,
enforceable against such Seller in accordance with the terms of this Agreement.
Upon the execution and delivery by such Seller of each Transaction Document to
which such Seller is a party, such Transaction Document will constitute the
valid and legally binding obligation of such Seller, enforceable against such
Seller in accordance with the terms of such Transaction Document.

          3.2
Share Ownership. Such Seller owns of record and
beneficially the number of shares of Common Stock of the Company set forth next
to such Seller’s name in Schedule 3.2, free and clear of any Encumbrance or
restriction on transfer (other than any restriction under any securities Law
and restrictions listed on Schedule 3.2 that will be terminated before the
Closing). Except as set forth on Schedule 3.2, such Seller is not a party to:
(a) any option, warrant, purchase right, right of first refusal, call, put or
other Contract (other than this Agreement) that could require such Seller to
sell, transfer or otherwise dispose of any shares of Common Stock of the
Company or (b) any voting trust, proxy or other Contract relating to the voting
of any shares of Common Stock of the Company. The Sellers represent that
together they own 100% of the outstanding Common Stock of the Company and that
there are no outstanding shares of Preferred Stock or any other class of stock
of the Company.

          3.3
No Conflicts. Neither the execution and delivery of
this Agreement nor the performance of the Transactions will, directly or
indirectly, with or without notice or lapse of time: (a) violate any Law to
which such Seller or any of such Seller’s shares of Common Stock of the Company
is subject; (b) if such Seller is not an individual, violate any Organizational
Document of such Seller; (c) violate, conflict with, result in a breach of,
constitute a default under, result in the acceleration of or give any Person
the right to accelerate the maturity or performance of, or to cancel,
terminate, modify or exercise any remedy under, any Contract to which such
Seller is a party or by which such Seller is bound or to which any of such
Seller’s shares of Common Stock of the Company are subject or the performance
of which is guaranteed by such Seller; or (d) result in the imposition of any
Encumbrance on any of such Seller’s shares of Common Stock of the Company.
Other than HSR Act filings (if applicable), such Seller need not notify, make
any filing with, or obtain any Consent of, any Person in order to perform the
Transactions.

          3.4
Litigation. There is no Proceeding pending or, to the
Knowledge of such Seller, threatened or anticipated against such Seller
relating to or affecting the Transactions.

          3.5
No Brokers’ Fees. Such Seller has no current
engagement with any broker, finder or agent with respect to the Transactions to
be performed on or before the Closing Date other than Oracle Capital LLC.

          3.6
Investment Intent. Each Seller is
an Accredited Investor as defined in Rule 501 of Regulation D of the Securities
Act and/or a sophisticated investor under Section 4(2) of the Securities Act.
Each Seller understands that the certificates representing Buyer’s Share Amount
will be legended with an appropriate restrictive legend. Further, each Seller
represents that the Seller is acquiring the Buyer’s Share Amount hereunder for
its own account and not with a view to distribution of such shares in violation
of the Securities Act.

9

ARTICLE IV

REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY

          Each
representation and warranty contained in this Article IV is qualified by
disclosures made in the Company Disclosure Schedule attached hereto as Exhibit
C that correspond or reasonably relate to the applicable section in this
Agreement. Except as set forth on the Company Disclosure Schedule, the Company
represents and warrants to the Buyer as follows:

          4.1 Organization, Qualification and Corporate Power.
Schedule 4.1 sets the Company’s jurisdiction of incorporation, the other
jurisdictions in which it is qualified to do business, and its directors and
officers. The Company is corporation duly organized, validly existing and in
good standing under the laws of Hawaii. The Company is duly qualified to do
business and is in good standing under the laws of each jurisdiction where such
qualification is required. The Company has corporate power and authority to
conduct the business in which it is engaged, to own and use the properties and
assets that it purports to own or use and to perform its obligations. The
Company has made available to the Buyer correct and complete copies of the
Organizational Documents of the Company. The Company is not in violation of any
of its Organizational Documents. The minute books, the stock certificate books
and the stock ledger of the Company, in each case as made available to the
Buyer, are correct and complete. The Company does not have any subsidiaries.

          4.2 Capitalization. Schedule 4.2 describes
the capital stock of the Company and the number of shares of Common Stock
issued and outstanding and owned by the Sellers. There are no outstanding
shares of Preferred Stock or any other class of stock other than Common Stock.
Except as set forth on Schedule 4.2, there are no outstanding
securities, options, warrants, purchase rights, subscription rights, preemptive
rights, conversion rights, exchange rights, calls, puts, rights of first
refusal or other Contracts that could require the Company to issue, sell or
otherwise cause to become outstanding or to acquire, repurchase or redeem the
equity of the Company. There is no outstanding stock appreciation, phantom
stock, profit participation or similar rights with respect to the Company. The
Company has not violated any securities Law in connection with the offer, sale
or issuance of any of its capital stock or other equity or debt securities.
There are no voting trusts, proxies or other Contracts relating to the voting
of the outstanding Common Stock of the Company.

          4.3 Authority. The Company has the
authority to execute and deliver this Agreement and to perform its obligations
hereunder. The execution, delivery and performance of this Agreement by the
Company has been duly authorized by all requisite corporate action on its part.
This Agreement constitutes the valid and legally binding obligation of the
Company, enforceable against the Company in accordance with the terms of this
Agreement.

          4.4 No Conflicts. Neither the execution and
delivery of this Agreement nor the performance of the Transactions will,
directly or indirectly, with or without notice or lapse of time: (a) violate
any Law to which the Company or any asset owned or used by the Company is
subject; (b) violate any Permit of the Company or give any Governmental Body
the right to terminate, revoke, suspend or modify any Permit of the Company;
(c) violate any Organizational Document of the Company; (d) violate, conflict
with, result in a breach of, constitute a default under, result in the
acceleration of or give any Person the right to accelerate the maturity or
performance of, or to cancel, terminate, modify or exercise any remedy under,
any Contract to which the Company is a party or by which the Company is bound
or to which any asset of the Company is subject or under which the Company has
any rights or the performance of which is guaranteed by the Company; (e) cause
the Buyer or the Company to have any Liability for any Tax; or (f) result in
the imposition of any Encumbrance upon any asset owned or used by the Company.
The Company does not need to notify, make any filing with, or obtain any
Consent of any Person in order to perform the Transactions.

          4.5 Financial Statements.

                    (a)
Attached to Schedule 4.5 are the following financial statements
(collectively, the “Financial Statements”):
(i) unaudited balance sheet of the Company as of December 31, 2010 and Income
Statement and Cash Flow Statements for the year ended December 31, 2010; and
(ii) an unaudited, consolidated balance sheet (the “Interim Balance Sheet”) of the Company as of June 5, 2011 (the
“Interim Balance Sheet Date”), and
statements of income, changes in stockholders’ equity, and cash flow for the
four-month period then ended. The Financial Statements in all material respects
present fairly the financial condition of the Company as of 

10

and for their respective dates; provided, however, that
the interim financial statements described in clause (ii) above are subject to
normal, recurring year-end adjustments (which are not expected to be,
individually or in the aggregate, materially adverse) and lack notes (which, if
presented, would not differ materially from the notes accompanying the December
31, 2010 Balance Sheet).

                    (b)
The Company’s books and records (including all financial records, business
records, customer lists, and records pertaining to products or services
delivered to customers) (i) are complete and correct in all material respects
and all transactions to which the Company is or has been a party are accurately
reflected therein in all material respects on an accrual basis, (ii) reflect
all discounts, returns and allowances granted by the Company with respect to
the periods covered thereby, (iii) have been maintained in accordance with
customary and sound business practices in the Company’s industry, (iv) form the
basis for the Financial Statements and (v) reflect in all material respects the
assets, liabilities, financial position, results of operations and cash flows
of the Company on an accrual basis. All computer-generated reports and other
computer output included in the Company’s books and records are complete and
correct in all material respects and were prepared in accordance with sound
business practices based upon authentic data. The Company’s management
information systems, or those of its accounting firm, are adequate for the
preservation of relevant information and the preparation of accurate reports.

                    (c)
The Company’s Closing Balance Sheet, to be delivered by the Company in
accordance with Section 6.8, in all material respects presents fairly
the financial condition of the Company as of the Closing.

                    (d)
The Company had a Note payable of $250,000 at December 31, 2010 and a Note
payable of $354,074 at the Interim Balance Sheet date of June 5, 2011. The
aforementioned Notes payable were in each case representing monies owed to 11
Good Energy, Inc.

          4.6 Absence of Certain Changes. Except as
set forth on Schedule 4.6, since the Balance Sheet Date:

                    (a)
the Company has not sold, leased, transferred or assigned any asset, other than
for fair consideration in the ordinary course of business; 

                    (b)
the Company has not experienced any damage, destruction or loss (whether or not
covered by insurance) to its property or assets in excess of $5,000; 

                    (c)
the Company has not entered into any Contract (or series of related Contracts)
involving the payment or receipt of more than $5,000 or that cannot be
terminated without penalty on less than six months notice and no Person has
accelerated, terminated, modified or canceled any Contract (or series of
related Contracts) involving more than $5,000 to which the Company is a party
or by which any of them or any of their assets is bound;

                    (d)
no Encumbrance (other than any Permitted Encumbrance) has been imposed upon any
asset of the Company;

                    (e)
the Company has not made any capital expenditure (or series of related capital
expenditures) involving more than $5,000 or made any capital investment in, any
loan to, or any acquisition of the securities or assets of, any other Person
(or series of related capital investments, loans or acquisitions) involving
more than $5,000;

                    (f)
the Company has not issued, created, incurred or assumed any Indebtedness (or
series of related Indebtedness) involving more than $5,000 in the aggregate or
delayed or postponed the payment of accounts payable or other Liabilities
beyond the original due date;

                    (g)
the Company has not canceled, compromised, waived or released any right or
claim (or series of related rights or claims) or any Indebtedness (or series of
related Indebtedness) owed to it, in any case involving more than $5,000;

11

                    (h)
the Company has not issued, sold or otherwise disposed of any of its Common
Stock or granted any options, warrants or other rights to acquire (including
upon conversion, exchange or exercise) any of its Common Stock or declared, set
aside, made or paid any dividend or distribution with respect to its Common
Stock (whether in cash or in kind) or redeemed, purchased or otherwise acquired
any Common Stock of the Company or amended any of its Organizational Documents;

                    (i)
the Company has not (i) conducted its businesses outside the ordinary course of
business consistent with past practices, (ii) made any loan to, or entered into
any other transaction with, any of its directors, officers or employees on
terms that would not have resulted from an arms-length transaction, (iii)
entered into any employment Contract or modified the terms of any existing
employment Contract, (iv) granted any increase in the base compensation of any
of its directors, officers or, except in the ordinary course of business,
employees or (v) adopted, amended, modified or terminated any Employee Benefit
Plan or other Contract for the benefit of any of its directors, officers or employees;

                    (j)
the Company has not (i) made or rescinded a material Tax election affecting the
Company, (ii) settled any Tax Liability affecting the Company, (iii) filed any
material Tax Return of the Company, or (iv) made a material change in any
fiscal or Tax method of accounting or accounting practice used by the Company
except as required by law (which change in method of accounting or accounting
practice is not disclosed in writing to the Buyer);

                    (k)
there has not been any Proceeding commenced nor, to the Knowledge of the
Company, threatened or anticipated relating to or affecting the Company or its
businesses or any asset owned or used by it; 

                    (l)
there has not been (i) any loss of any material customer, distribution channel,
sales location or source of supply of raw materials, Inventory, utilities or
contract services or the receipt of any notice that such a loss may be pending,
(ii) any occurrence, event or incident related to the Company outside of the
ordinary course of business or (iii) any material adverse change in the
businesses, operations, properties, prospects, assets, Liabilities or condition
(financial or otherwise) of the Company and no event has occurred or
circumstance exists that may result in any such material adverse change; and

                    (m)
the Company has not agreed or committed to any of the foregoing.

          4.7 No Undisclosed Liabilities. Except as
set forth on Schedule 4.7, the Company does not have any material
Liability, except for (a) Liabilities under executory Contracts that are either
listed on Schedule 4.13 or are not required to be listed thereon,
excluding Liabilities for any breach of any executory Contract, (b) Liabilities
to the extent reflected or reserved against on the Interim Balance Sheet and
(c) current Liabilities incurred in the ordinary course of business since the
Interim Balance Sheet Date (none of which results from, arises out of, relates
to, is in the nature of, or was caused by any breach of Contract, breach of
warranty, tort, infringement or violation of Law).

          4.8 Title to Assets. Except as set forth on
Schedule 4.8, the Company has good and marketable title to, or a valid
leasehold interest in, every property or asset used by it, located on its
premises, purported to be owned by it, or shown on the Interim Balance Sheet or
acquired by the Company after the Interim Balance Sheet Date (the “Assets”),
free and clear of any Encumbrances except Permitted Encumbrances, except for properties
and assets disposed of in the ordinary course of business consistent with past
practices since the Interim Balance Sheet Date. 

          4.9 Tangible Personal Property; Condition of Assets.
Schedule 4.9 lists all of the Company’s tangible personal property,
including, without limitation, plant property, machinery, equipment, parts,
tools, fixtures, furniture, office equipment, computer hardware, supplies,
motor vehicles, trucks and other items of tangible personal property (other
than Inventory) (the “Tangible Personal
Property”) that has a net book value in excess of $1,000. To the
Company’s Knowledge, the Tangible Personal Property are structurally sound,
free from material defects, in good operating condition and repair and adequate
for the uses to which they are being put, ordinary wear and tear excepted. To
the Company’s Knowledge, none of such Tangible Personal Property is in need of
maintenance or repairs, except for ordinary, routine maintenance and repairs
that are not material in nature or cost to such Tangible Personal Property. 

12

          4.10 Accounts Receivable. The Company has
no Accounts Receivable, except as set forth in Schedule 4.10.

          4.11 Inventory. The Company has no
inventory except as set forth in Schedule 4.11.

          4.12 Real Property. The Company has no real
property interests, except as follows:

                    (a)
Schedule 4.12(a) lists all of the real property and interests therein
owned by the Company (with all easements and other rights appurtenant to such
property, the “Owned Real Property”).
Except as set forth on Schedule 4.12(a), the Company has good and
marketable fee simple title to the Owned Real Property, free and clear of any
Encumbrances, except Permitted Encumbrances. The Company is not a lessor of any
parcel of Owned Real Property or any portion thereof or interest therein.

                    (b)
Schedule 4.12(b) lists all of the real property and interests therein
leased, subleased or otherwise occupied or used by the Company (with all easements
and other rights appurtenant to such property, the “Leased Real Property”). For each item of Leased Real Property,
Schedule 4.12(b) also lists the lessor, the lessee, the lease term, the
lease rate, and the lease, sublease, or other Contract pursuant to which the
Company holds a possessory interest in the Leased Real Property and all
amendments, renewals, or extensions thereto (each, a “Lease”). Except as set
forth on Schedule 4.12(b), the leasehold interest of the Company with
respect to each item of Leased Real Property is free and clear of any
Encumbrances, except Permitted Encumbrances. The Company is not a sublessor of,
or has assigned any lease covering, any item of Leased Real Property. Leasing
commissions or other brokerage fees due from or payable by the Company with
respect to any Lease have been paid in full.

                    (c)
The Owned Real Property and the Leased Real Property (collectively, the “Real Property”) constitute all interests in
real property currently used in connection with the business of the Company.
The Real Property is not subject to any rights of way, building use
restrictions, title exceptions, variances, reservations or limitations of any
kind or nature, except (i) those that in the aggregate do not impair the current
use, occupancy, value or marketability of title to the Real Property, (ii) as
set forth in Schedule 4.12(c) or (iii) with respect to each item of
Leased Real Property, as set forth in the Lease relating to such item. To the
Knowledge of the Company, all buildings, plants, structures and other
improvements owned or used by the Company lie wholly within the boundaries of
the Real Property and do not encroach upon the property, or otherwise conflict
with the property rights, of any other Person. Except as set forth in Schedule
4.12(c), to the Knoweledge of the Company, the Real Property complies with
all Laws, including zoning requirements, and the Company has not received any
notifications from any Governmental Body or insurance company recommending
improvements to the Real Property or any other actions relative to the Real
Property. The Company has made available to the Buyer a copy of each deed and
other instrument (as recorded) by which the Company acquired any Real Property
and a copy of each title insurance policy, opinion, abstract, survey and
appraisal relating to any Real Property. The Company is not a party to or bound
by any Contract (including any option) for the purchase or sale of any real
estate interest or any Contract for the lease to or from the Company of any
real estate interest not currently in possession of the Company.

          4.13 Contracts.

                    (a)
Schedule 4.13 lists the following Contracts to which the Company is a
party or by which the Company is bound or to which any asset of the Company is
subject or under which the Company has any rights or the performance of which
is guaranteed by the Company (collectively, with the Leases and Licenses, the “Material Contracts”): (i) each Contract (or
series of related Contracts) that involves delivery or receipt of products or
services of an amount or value in excess of $10,000 or that involves
expenditures or receipts in excess of $10,000; (ii) each lease, rental or
occupancy agreement, license, installment and conditional sale agreement, and
other Contract affecting the ownership of, leasing of, title to, use of, or any
leasehold or other interest in, any real or personal property (except personal
property leases and installment and conditional sales agreements having a value
per item or aggregate payments of less than $10,000 and with terms of less than
one year), including each Lease and License; (iii) each licensing agreement or
other Contract with respect to Intellectual Property, including any agreement
with any current or former employee, consultant or contractor regarding the
appropriation or non-disclosure of any Intellectual Property; (iv) each
collective bargaining agreement and other Contract to or with any labor union
or other employee representative of a group of employees; (v) each joint
venture, partnership or Contract involving a sharing of profits, losses, costs
or Liabilities with any other Person; (vi) each Contract 

13

containing any covenant that purports to restrict the business activity
of the Company or limit the freedom of the Company to engage in any line of
business or to compete with any Person; (vii) each Contract providing for
payments to or by any Person based on sales, purchases or profits, other than
direct payments for goods; (viii) each power of attorney; (ix) each Contract
entered into other than in the ordinary course of business that contains or
provides for an express undertaking by the Company to be responsible for
consequential, incidental or punitive damages; (x) each Contract (or series of
related Contracts) for capital expenditures in excess of $10,000; (xi) each
written warranty, guaranty or other similar undertaking with respect to
contractual performance other than in the ordinary course of business; (xii)
each Contract for Indebtedness; (xiii) each employment or consulting Contract;
(xiv) each Contract to which any Seller or any Related Person of any Seller or
of the Company is a party or otherwise has any rights, obligations or
interests; and (xv) each Contract not terminable without penalty on less than
one month notice.

                    (b)
The Company has made available to the Buyer a correct and complete copy of each
written Material Contract and a written summary setting forth the terms and
conditions of each other Material Contract. Each Material Contract, with
respect to the Company, is legal, valid, binding, enforceable, in full force
and effect and will continue to be so on identical terms following the Closing
Date. Each Material Contract, with respect to the other parties to such
Material Contract, to the Knowledge of the Company, is legal, valid, binding,
enforceable, in full force and effect and will continue to be so on identical
terms following the Closing Date. The Company is not in breach or default, and
no event has occurred that with notice or lapse of time would constitute a
breach or default, or permit termination, modification or acceleration, under
any Material Contract. To the Knowledge of the Company, no other party is in
breach or default, and no event has occurred that with notice or lapse of time
would constitute a breach or default, or permit termination, modification or
acceleration, under any Material Contract. No party to any Material Contract
has repudiated any provision of any Material Contract.

          4.14 Intellectual Property.

                    (a)
To the Knowledge of the Company, the Company owns or has the right to use all
Intellectual Property necessary for the operation of the business of such
Company as presently conducted. To the Knowledge of the Company, each item of
Intellectual Property owned, licensed or used by the Company immediately prior
to the Closing will be owned, licensed or available for use by such Company on
identical terms and conditions immediately following the Closing. The Company
has taken all commercially reasonable action to maintain and protect each item
of Intellectual Property that it owns, licenses or uses. To the Knowledge of
the Company, each item of Intellectual Property owned, licensed or used by the
Company is valid and enforceable and otherwise fully complies with all Laws
applicable to the enforceability thereof.

                    (b)
To the Knowledge of the Company, the Company has not violated or infringed upon
or otherwise come into conflict with any Intellectual Property of third
parties, and the Company has not received any notice alleging any such
violation, infringement or other conflict. To the Knowledge of the Company, no
third party has infringed upon any Intellectual Property of the Company.

                    (c)
Schedule 4.14(c) identifies each patent or registration (including
copyright, trademark and servicemark) that has been issued to the Company
(whether active and in force or abandoned, lapsed, canceled or expired) with
respect to any of its Intellectual Property, identifies each patent application
or application for registration (whether pending, abandoned, lapsed, canceled
or expired) that the Company has made with respect to any of its Intellectual
Property, and identifies each license, agreement or other permission that the
Company has granted to any third party (whether active and in force or
terminated, canceled or expired) with respect to any of its Intellectual
Property. The Company has made available to the Buyer correct and complete
copies of all such patents, registrations, applications, licenses, agreements
and permissions (or, if oral, written summaries thereof) and have made
available to the Buyer correct and complete copies of all other written
documentation evidencing ownership and prosecution (if applicable) of each such
item. Schedule 4.14(c) also identifies each trade name or unregistered
trademark or service mark owned by the Company and each proprietary
manufacturing process. With respect to each item of Intellectual Property
required to be identified in Schedule 4.14(c) and except as expressly
set forth on Schedule 4.14(c): (i) to the Knowledge of the Company, the
Company possess all right, title and interest in and to the item, free and
clear of any Encumbrance; (ii) the item is not subject to any Order; (iii) no
Proceeding is pending or, to the Knowledge of the Company, is threatened or
anticipated that challenges the legality, validity, 

14

enforceability, use or ownership of the item; and (iv) the Company has
not agreed to indemnify any Person for or against any interference,
infringement, misappropriation or other conflict with respect to the item.

                    (d)
Schedule 4.14(d) identifies each item of Intellectual Property that any
Person other than the Company owns and that the Company uses pursuant to
license, agreement or permission (excluding all commercial off-the-shelf,
clickwrap, shrinkwrap, or clickthrough software) (a “License”). With respect to
each item of Intellectual Property required to be identified in Schedule
4.14(d): (i) to the Knowledge of the Company, such item is not subject to
any Order; (ii) to the Knowledge of the Company, no Proceeding is pending or is
threatened or anticipated that challenges the legality, validity or
enforceability of such item; and (iii) the Company has not granted any
sublicense or similar right with respect to the License relating to such item.

          4.15 Tax.

                    (a)
The Company has timely filed with the appropriate Governmental Body all material
Tax Returns that such Company is required to have filed. All Tax Returns filed
by the Company are true, correct and complete in all material respects and
copies have been provided to Buyer. All Taxes owed (or to be remitted) by the
Company (whether or not shown on any Tax Return) have been paid to the proper
Governmental Body. No written claim has been made by any Governmental Body in a
jurisdiction where the Company does not file Tax Returns that such Company is
or may be subject to the payment, collection or remittance of any Tax of that
jurisdiction or is otherwise subject to taxation by that jurisdiction. There
are no Encumbrances on any of the assets of the Company that arose in
connection with, or otherwise relate to, any failure (or alleged failure) to
pay any Tax. The Company has made available to the Buyer true, correct and
complete copies of all income Tax Returns filed by, and all examination
reports, and statements of deficiencies assessed against or agreed to by, the
Company during the three-year period ending on the date hereof.

                    (b)
The Company has withheld or collected, and paid to the proper Governmental
Body, all Taxes required to have been withheld or collected and remitted, and
complied with all information reporting and back-up withholding requirements,
and has maintained all required records with respect thereto, in connection
with amounts paid or owing to any employee, customer, creditor, stockholder,
independent contractor, or other third party.

                    (c)
The Company does not expect any Governmental Body to assess any additional
Taxes for any period for which Tax Returns have been filed. There is no dispute
or claim concerning any Liability for Taxes paid, collected or remitted by the
Company either (i) claimed or raised by any Governmental Body in writing or
(ii) as to which the Company has Knowledge. 

                    (d)
The Company has not waived any statute or period of limitations with respect to
any Tax or agreed, or been requested by any Governmental Body to agree, to any
extension of time with respect to any Tax. No extension of time within which to
file any Tax Return of the Company has been requested, granted or currently is
in effect. 

                    (e)
The Company has not filed a consent under Code § 341(f), as in effect
prior to the Jobs and Growth Tax Reconciliation Act of 2003, concerning
collapsible corporations. The Company has not made any payments, is obligated
to make any payments, or is a party to any agreement that under certain
circumstances could obligate it to make any payments that will not be
deductible under Code § 280G or Code § 162(m). The Company has not
been a United States real property holding corporation within the meaning of
Code § 897(c)(2) during the applicable period specified in Code
§ 897(c)(1)(A)(ii). The Company has disclosed on its federal income Tax
Returns all positions taken therein that could give rise to a substantial
understatement of federal income Tax within the meaning of Code § 6662.
The Company is not a party to any Tax allocation, sharing, reimbursement or
similar agreement. The Company has not been a member of any “affiliated group”
as defined in Code § 1504(a) (or any similar group defined under a similar
provision of state, local or foreign Law) filing a consolidated federal, state,
local or foreign income Tax Return (other than a group the common parent of
which was the Company). The Company does not have any Liability for Taxes of
any Person (other than the Company) under Treasury Regulation § 1.1502-6
(or any similar provision of any other Law), as a transferee or successor, by
Contract, or otherwise. The Company has not participated in an international
boycott within the meaning of Code § 999. The Company has not agreed, or
is required to make, any adjustments under Code § 481(a) by reason of a
change in method of accounting 

15

or otherwise. No asset of the Company (i) is property required to be
treated as being owned by another Person pursuant to the provisions of
§ 168(f)(8) of the Internal Revenue Code of 1954, as amended and in effect
immediately prior to the enactment of the Tax Reform Act of 1986, or (ii)
constitutes “tax-exempt use property” or “tax-exempt bond financed property”
within the meaning of Code § 168. The Company has not been a “distributing
company” within the meaning of Code § 355(c)(2) with respect to a
transaction described in Code § 355 within the six-year period ending on
the date hereof. 

                    (f)
The unpaid Taxes of the Company (i) did not, as of the Interim Balance Sheet
Date, exceed the reserve for Liability for Taxes (rather than any reserve for
deferred Taxes established to reflect timing differences between book and Tax
income) set forth on the face of the Interim Balance Sheet (rather than in any
notes thereto) and (ii) will not exceed that reserve as adjusted for the
passage of time through the Closing Date in accordance with the past custom and
practice of the Company in filing its Tax Returns.

                    (g)
The Company has not, directly or indirectly, participated in any transaction
(including, the transactions contemplated by this Agreement) that would
constitute (i) a “reportable transaction” or “listed transaction” as defined in
Treasury Regulation § 1.6011-4 or (ii) a “tax shelter” as defined in Code §
6111 and the Treasury Regulations thereunder.

          4.16 Legal Compliance. Except as set forth
on Schedule 4.16(a), the Company is and, since formation, has been, in
compliance in all material respects with all applicable Laws and Permits.
Except as set forth on Schedule 4.16(a), no Proceeding is pending, nor
has been filed or commenced, against the Company alleging any failure to comply
with any applicable Law or Permit. The Company has not received any notice or
other communication from any Person regarding any actual, alleged or potential
violation by the Company of any Law or Permit or any cancellation, termination
or failure to renew any Permit held by the Company. Schedule 4.16(b)
contains a complete and accurate list of each Permit held by the Company or
that otherwise relates to the business of, or any asset owned or used by, the
Company. Each listed Permit is valid and in full force and effect. Each listed
Permit is renewable for no more than a nominal fee and, to the Knowledge of the
Company, there is no reason why such Permit will not be renewed. The Permits
listed on Schedule 4.16(b) constitute all of the Permits necessary to
allow the Company to lawfully conduct and operate its businesses as currently
conducted and operated and to own and use its assets as currently owned and
used.

          4.17 Litigation. There is no proceeding
pending or, to the Knowledge of the Company, threatened or anticipated relating
to or affecting (a) the Company or its businesses or any asset owned or used by
it or (b) the Transactions. To the Knowledge of the Company, no event has
occurred or circumstance exists that would reasonably be expected to give rise
to or serve as a basis for the commencement of any such Proceeding. Also, there
is no outstanding Order to which the Company or any asset owned or used by it
is subject. 

          4.18 Product and Service Warranties. The
Company has not manufactured or sold any products or services to any customer
of the Company.

          4.19 Environmental. Except as set forth on Schedule
4.19, to the Knowledge of the Company, the Company has complied and is in
material compliance with all Environmental Laws. To the Knowledge of the
Company, the Company has obtained and complied with, and is in compliance with,
all Permits that are required pursuant to any Environmental Law for the
occupation of its facilities and the operation of its businesses. All such
required Permits are set forth on Schedule 4.16(b). The Company has not
received any written or oral notice, report or other information regarding any
actual or alleged violation of any Environmental Law, or any Liabilities or
potential Liabilities, including any investigatory, remedial or corrective
obligations, relating to it or its facilities arising under any Environmental
Law. Except as set forth on Schedule 4.19, to the Knowledge of the
Company, none of the following exists at any property or facility currently
owned or operated by the Company and none of the following existed at any
property or facility previously owned or operated by the Company at or before
the time the Company ceased to own or operate such property or facility: (a)
underground storage tanks, (b) asbestos-containing material in any form or
condition, (c) materials or equipment containing polychlorinated biphenyls, or
(d) landfills, surface impoundments or disposal areas. The Company has not
treated, stored, disposed of, arranged for or permitted the disposal of,
transported, handled or released any substance, including any Hazardous
Substance, or owned or operated any property or facility (and no such property
or facility is contaminated by any Hazardous Substance) in a manner that has
given or would give rise to any Liability, including any Liability for response
costs, 

16

corrective action costs, personal injury, property damage, natural
resources damages or attorney fees, pursuant to any Environmental Law. Neither
this Agreement nor the Transactions will result in any Liability for site
investigation or cleanup, or notification to or Consent of any Person, pursuant
to any “transaction-triggered” or “responsible property transfer” Environmental
Laws. The Company has not, either expressly or by operation of law, assumed or
undertaken any Liability, including any obligation for corrective or remedial
action, of any other Person relating to any Environmental Law. 

          4.20 Employees. Schedule 4.20 sets
forth the name, job title, current rate of direct compensation, date of
commencement of employment, any change in compensation since January 1, 2011
and sick and vacation leave that is accrued and unused with respect to each
Active Employee whose rate of direct compensation (including wages, salaries
and actual or anticipated bonuses), plus the annual value of other benefits not
made available to the applicable Company’s other employees generally, either
exceeded $10,000 during the previous calendar year or is reasonably likely to
exceed $10,000 during the current calendar year (determined, for such purposes,
without regard to the Transactions). The Company is not and has not been a
party to or bound by any collective bargaining agreement. The Company has not
experienced any strike, slowdown, picketing, work stoppage, employee grievance
process, claim of unfair labor practice or other collective bargaining dispute.
There is no lockout of any employees by the Company, and no such action is
contemplated by the Company. The Company has not committed any unfair labor
practice. To the Knowledge of the Company, (a) no event has occurred or
circumstance exists that could provide the basis for any work stoppage or other
labor dispute and (b) there is no organizational effort presently being made or
threatened by or on behalf of any labor union with respect to employees of the
Company. To the Knowledge of the Company, no employee, officer or director of
the Company is a party to or bound by any agreement that (i) could adversely
affect the performance of his or her duties as an employee, officer or director
other than for the benefit of the Company, (ii) could adversely affect the
ability of the Company to conduct its businesses, (iii) restricts or limits in
any way the scope or type of work in which he or she may be engaged other than
for the benefit of the Company or (iv) requires him or her to transfer, assign
or disclose information concerning his or her work to anyone other than the
Company. To the Knowledge of the Company, no employee of the Company has any
plans to terminate employment with the Company.

          4.21 Employee Benefits.

                    (a)
Schedule 4.21 lists each Employee Benefit Plan that the Company
maintains or to which the Company contributes, has any obligation to contribute
or has any other Liability.

                    (i)
Each such Employee Benefit Plan (and each related trust, insurance contract, or
fund) materially complies in form and in operation in all respects with the
applicable requirements of ERISA, the Code and other applicable Laws.

                    (ii)
All required reports and descriptions (including Form 5500 Annual Reports,
summary annual reports, PBGC-1s and summary plan descriptions) have been timely
filed and distributed appropriately with respect to each such Employee Benefit
Plan. The requirements of COBRA have been met with respect to each such
Employee Benefit Plan that is an Employee Welfare Benefit Plan.

                    (iii)
All contributions (including all employer contributions and employee salary
reduction contributions) that are due have been paid to each such Employee
Benefit Plan that is an Employee Pension Benefit Plan and all contributions for
any period ending on or before the Closing Date that are not yet due have been
paid to each such Employee Pension Benefit Plan or accrued in accordance with
the past custom and practice of the Company. All premiums or other payments for
all periods ending on or before the Closing Date have been paid with respect to
each such Employee Benefit Plan that is an Employee Welfare Benefit Plan.

                    (iv)
Each such Employee Benefit Plan that is an Employee Pension Benefit Plan meets
the requirements of a “qualified plan” under Code § 401(a), has received a
favorable determination letter from the IRS that it is such a “qualified plan,”
and, to the Knowledge of the Company, there are no facts or circumstances that
could result in the revocation of such determination letter.

                    (v)
The market value of assets under each such Employee Benefit Plan that is an
Employee Pension Benefit Plan (other than any Multiemployer Plan) equals or
exceeds the present value of all vested and 

17

nonvested Liabilities thereunder determined in accordance with PBGC
methods, factors, and assumptions applicable to an Employee Pension Benefit
Plan terminating under the standard termination procedures of ERISA § 4041
on the date for determination.

                    (vi)
The Company has not any commitment, intention or understanding to modify or
terminate any such Employee Benefit Plan.

                    (vii)
The execution of the Transaction Documents and the performance of the
Transactions will not constitute a triggering event under any such Employee
Benefit Plan that (either alone or upon the occurrence of any additional or
subsequent event) will or may result in any payment, “parachute payment” (as
defined in Code § 280G), acceleration, vesting or increase in benefits to
any employee, former employee or director of the Company.

                    (viii)
The Company has made available to the Buyer correct and complete copies of the
plan documents and summary plan descriptions, the most recent determination
letter received from the IRS, the Form 5500 Annual Reports and
non-discrimination testing results for the two most recent plan years, and all
related trust agreements, insurance contracts and other funding agreements that
implement each such Employee Benefit Plan.

                    (b)
With respect to each Employee Benefit Plan that the Company (or any entity
treated as a single employer with the Company for purposes of Code § 414)
maintains or has maintained or to which any of them contributes, has
contributed, or has been required to contribute or had any Liability:

                    (i)
No such Employee Benefit Plan that is an Employee Pension Benefit Plan has been
completely or partially terminated or been the subject of a “reportable event”
(as defined in ERISA § 4043) as to which notices would be required to be
filed with the PBGC. No Proceeding by the PBGC to terminate any such Employee
Pension Benefit Plan has been commenced or, to the Knowledge of the Company, is
threatened or anticipated.

                    (ii)
There has been no “prohibited transaction” (as defined in ERISA § 406 or
Code § 4975) with respect to any such Employee Benefit Plan. No
“fiduciary” (as defined in ERISA § 3(21)) has any Liability for breach of
fiduciary duty or any other failure to act or comply in connection with the
administration or investment of the assets of any such Employee Benefit Plan.
No Proceeding with respect to the administration or the investment of the
assets of any such Employee Benefit Plan (other than routine claims for
benefits) is pending or, to the Knowledge of the Company, threatened or
anticipated. To the Knowledge of the Company, there is no basis for any such
Proceeding. There are no pending, or to the Knowledge of the Company,
threatened or anticipated claims with respect to any such Employee Benefit Plan
other than routine claims for benefits.

                    (iii)
The Company has not incurred and, to the Knowledge of the Company, the Company
is not reasonably likely to incur any Liability to the PBGC (other than PBGC
premium payments) or otherwise under Title IV of ERISA (including any
withdrawal liability as defined in ERISA § 4201) or under the Code with
respect to any such Employee Benefit Plan that is an Employee Pension Benefit
Plan.

	
  

 	
  

 
	
  

 	
                     (c)
 The Company nor any other member of the “controlled group” (as defined in
 Code § 1563) that includes the Company contributes, has contributed, has
 been required to contribute, or as a result of the Transactions will be
 required to contribute to any Multiemployer Plan or has any Liability
 (including withdrawal liability as defined in ERISA § 4201) under any
 Multiemployer Plan. The Company does not maintain, and has not maintained,
 and does not contribute, and has not contributed or been required to
 contribute, or as a result of the Transactions will be required to contribute
 to any Employee Welfare Benefit Plan providing medical, health, or life
 insurance or other welfare-type benefits for current or future retired or
 terminated employees, their spouses or their dependents (other than in
 accordance with COBRA).

 

          4.22 RESERVED.

          4.23 Transactions with Related Persons.
Except as set forth in Schedule 4.23, since inception of the Company, no
shareholder, officer, director or employee of the Company or any Related Person
of any the foregoing 

18

has (a) owned any interest in any asset used in the business of the
Company, (b) been involved in any business or transaction with the Company or
(c) engaged in competition with the Company. Except as set forth in Schedule
4.23, no shareholder, officer, director or employee of the Company nor any
Related Person of any of the foregoing (i) is a party to any Contract with, or
has any claim or right against, the Company or (ii) has any Indebtedness owing
to the Company. Except as set forth in Schedule 4.23, the Company does
not have any (A) claim or right against any shareholder, officer, director or
employee of the Company or any Related Person of any of the foregoing or (B)
Indebtedness owing to any shareholder, officer, director or employee of the
Company or any Related Person of any of the foregoing. 

          4.24 RESERVED

          4.25 RESERVED

          4.26 No Brokers’ Fees. The Company does not
have any Liability for any fee, commission or payment to any broker, finder or
agent with respect to the Transactions, except for Oracle Capital LLC, which is
the placement agent in the Transaction.

          4.27 RESERVED

ARTICLE V

REPRESENTATIONS AND WARRANTIES REGARDING THE BUYER

          The Buyer
and the Parent each represent and warrant to the Sellers as follows:

          5.1 Organization and Authority. The Buyer
is a recently formed corporation and is duly organized, validly existing and in
good standing under the laws of Delaware. The Buyer and the Parent each have
full corporate power and authority to execute and deliver the Transaction
Documents to which it is a party and to perform its respective obligations
thereunder. The execution and delivery by the Buyer and the Parent of each
Transaction Document to which the Buyer or the Parent is a party and the
performance by the Buyer of the Transactions have been duly approved by all
requisite corporate action of the Buyer and the Parent. This Agreement
constitutes the valid and legally binding obligation of the Buyer and the
Parent, enforceable against the Buyer and the Parent in accordance with the
terms of this Agreement. Upon the execution and delivery by the Buyer and the
Parent of each Transaction Document to which the Buyer or the Parent is a
party, such Transaction Document will constitute the valid and legally binding
obligation of the Buyer and the Parent, enforceable against the Buyer and the
Parent in accordance with the terms of such Transaction Document.

          5.2 No Conflicts; No Violation. Neither the
execution and delivery of this Agreement nor the performance of the
Transactions will, directly or indirectly, with or without notice or lapse of
time: (a) violate any Law to which the Buyer or the Parent is subject; (b)
violate any Organizational Document of the Buyer or the Parent; or (c) violate,
conflict with, result in a breach of, constitute a default under, result in the
acceleration of or give any Person the right to accelerate the maturity or
performance of, or to cancel, terminate, modify or exercise any remedy under,
any Contract to which the Buyer or the Parent is a party or by which the Buyer
or the Parent is bound or the performance of which is guaranteed by the Buyer
or the Parent. Other than HSR Act filings to the extent applicable, the Buyer
need not notify, make any filing with, or obtain any Consent of, any Person in
order to perform the Transactions. The Parent is not in breach of that certain
Confidential Disclosure Agreement, dated as of July 23, 2009, by and between
the Company and the Parent. 

          5.3 Litigation. There is no Proceeding
pending or, to the knowledge of the Buyer or the Parent, threatened or
anticipated against the Buyer or the Parent relating to or affecting the
Transactions.

          5.4 No Brokers’ Fees. The Buyer and the
Parent have no Liability for any fee, commission or payment to any broker,
finder or agent with respect to the Transactions for which any Seller could be
liable, except for the placement fees of Oracle Capital LLC.

19

          5.5 Investment Intent. The Buyer is
acquiring all of the Seller’s shares of Common Stock of the Company purchased
hereunder for its own account and not with a view to distribution of such
Shares in violation of the Securities Act. The Buyer is an Accredited Investor
as defined in Rule 501 of Regulation D of the Securities Act.

          5.6 Share
Ownership. Immediately prior to the Closing Date, all of the issued and
outstanding shares of the common stock of Buyer shall not exceed 100,000
shares. As a result of Sellers receiving an aggregate Share Amount of 36,000
shares and of Oracle receiving a Share Amount of 4,000 shares, Sellers shall
collectively own 36% of Buyer and Oracle shall own 4% of Buyer after the
closing of the Transaction.

          5.7 Independent Investigation. The Parent,
the Buyer and their Representatives have undertaken an independent
investigation and verification of the business, operations and financial
condition of the Company.

          5.8 No Knowledge of Company’s or Sellers’ Breach.
Neither the Parent, the Buyer nor any of their Affiliates has knowledge of any
breach or any representation, warranty, condition or agreement in this Agreement
by the Company or any of the Sellers.

          5.9 Limited Representations. The Buyer and
the Parent acknowledge that none of the Company, the Sellers or any other
Person acting on their behalf will have or be subject to any liability or
indemnification obligation to the Buyer or the Parent or any other Person
resulting from the distribution to the Buyer or the Parent, or the use by the
Buyer or the Parent of any information not expressly set forth in Article III
or Article IV, including any information, documents, projections, forecasts or
other material made available to the Buyer or the Parent, confidential
information memoranda, management presentations, meetings, information
requests, due diligence or in any other form in expectation of the transactions
contemplated by this Agreement. In connection with the investigation by the
Buyer and the Parent of the Company, the Buyer and the Parent have received or
may receive from the Company certain projections, forward-looking statements
and other forecasts and certain business plan information. The Buyer and the
Parent acknowledge that there are uncertainties inherent in attempting to make
such estimates, projections and other forecasts and plans, that the Buyer and
the Parent are familiar with such uncertainties, that the Buyer and the Parent
are taking full responsibility for making their own evaluation of the adequacy
an accuracy of all estimates, projections and other forecasts and plans so
furnished to it (including the reasonableness of the assumptions underlying
estimates, projections, forecasts or plans), and that the Buyer and the Parent
shall have no claim against anyone with respect thereto. Accordingly, the Buyer
and the Parent acknowledge that the Company makes no representation or warranty
with respect to such estimates, projects, forecasts or plans (including the
reasonableness of the assumptions underlying such estimates, projections,
forecasts or plans).

ARTICLE VI

PRE-CLOSING COVENANTS

          The Parties
agree as follows with respect to the period between the date hereof and the
Closing.

          6.1 Best Efforts. Each Party will use its
best efforts to take all actions necessary, proper or advisable in order to
perform the Transactions (including satisfaction, but not waiver, of the closing
conditions set forth in Article VII).

          6.2 Approvals and Consents. As promptly as
practicable after the date hereof, each Party will, and the Sellers and the
Company will cause the Company to, make all filings required by Law (if any) to
be made by them in order to perform the Transactions contemplated to be
performed on or before the Closing Date, including all applicable HSR Act
filings. Each Party will, and the Sellers and the Company will cause the
Company to, cooperate with the other Parties and their respective
Representatives with respect to all filings (if any) that such other Parties
make in connection with the Transactions. As promptly as practicable after the
date hereof, the Sellers and the Company will cause the Company to solicit the
Consents set forth with respect to such Company on Schedule 6.2, but not
prior to the Buyer’s approval of the form and substance of each such Consent,
which approval will not be unreasonably withheld or delayed. The Sellers and
the Company will cause each party to use its best efforts and the Buyer will
cooperate in all reasonable respects with the Sellers and the Company, to
obtain all such Consents.

20

          6.3
Operation of Business. The Sellers
and the Company will, and will cause the Company to: (a) conduct the business
of the Company only in the ordinary course of business; (b) use their best
efforts to maintain the businesses, properties, physical facilities and
operations of the Company, preserve intact the current business organization,
Intellectual Property and Technology of the Company, keep available the
services of the current officers, employees and agents of the Company, and
maintain the relations and goodwill with suppliers, customers, lessors,
licensors, lenders, creditors, employees, agents and others having business
relationships with the Company; (c) confer with the Buyer concerning matters of
a material nature to the Company; (d) confer with the Buyer with respect to,
and provide the Buyer with copies of, Tax Returns before filing and refrain
from making any material new election with respect to Taxes; and (e) deliver to
the Buyer monthly financial statements of the Company as they become available
to the Company and otherwise report periodically to the Buyer concerning the
status of the businesses, operations and finances of the Company. The Sellers
and the Company will not, and will cause the Company not to, engage in any
practice, take any action, fail to take any action, or enter into any
transaction as a result of which any change or event listed in Section 4.6 is
likely to or does occur.

          6.4
Full Access. The Sellers and the
Company will, and will cause the Company and its Representatives to, (a) permit
the Buyer and its Representatives to have full access to all premises,
properties, personnel (including the opportunity to discuss the affairs of the
Company with such personnel), books, records, Contracts, documents and data of
or pertaining to the Company, (b) furnish the Buyer and its Representatives
with copies of all such books, records, Tax Returns, Contracts, documents and
data as the Buyer may reasonably request, (c) furnish the Buyer and its
Representatives with such additional financial, operating, and other data and
information (including compilations and analyses thereof) as the Buyer may
reasonably request and (d) afford the Buyer and its Representatives full access
to perform appropriate environmental inspections on all Real Property.
Notwithstanding the foregoing, neither Sellers nor the Company shall be
obligated to provide to Buyer nor its Buyer’s Representatives nor shall Buyer
nor Buyer’s Representatives be entitle to receive any additional information
regarding the Technology prior to the conclusion of the Closing.

          6.5
Notice of Developments. The
Sellers and the Company will immediately notify the Buyer in writing of (a) any
fact or condition existing prior to or on the date hereof that constitutes a
breach of any representation or warranty of any Seller or the Company in this
Agreement and (b) any fact or condition developing after the date hereof that
would constitute a breach of any representation or warranty of any Seller or
the Company in this Agreement if such representation or warranty were made on
the date of the occurrence or discovery of such fact or condition.

          6.6
Exclusivity. Each Seller and the
Company agrees that it will not, and will cause its Representatives, the
Company, and the Company’s Representatives not to, directly or indirectly: (a)
solicit, initiate or encourage any inquiry, proposal, offer or contact from any
Person (other than the Buyer and its Affiliates and Representatives) relating
to any transaction involving the sale of any equity interest or assets (other
than the sale of Inventory in the ordinary course of business) of the Company
or any acquisition, divestiture, merger, share exchange, consolidation,
business combination, recapitalization, redemption, financing or similar
transaction involving the Company (in each case, an “Acquisition Proposal”); or (b) participate in any discussion
or negotiation regarding, furnish any information with respect to, assist or
participate in, or facilitate in any other manner any Acquisition Proposal. If
any Person makes an Acquisition Proposal, the Sellers and the Company will
immediately notify the Buyer of such Acquisition Proposal and all related
details. Each Seller agrees not to vote its Shares in favor of any transaction
associated with an Acquisition Proposal.

          6.7
Confidentiality, Press Releases and Public
Announcements. Each Party will, and will cause its respective
Representatives to, and the Sellers and the Company will cause the Company and
its Representatives to, maintain in confidence all information received from
another Party, the Company or a Representative of another Party or the Company
in connection with this Agreement or the Transactions (including the existence
and terms of this Agreement and the Transactions) and use such information
solely to evaluate the Transactions, unless (a) such information is already
known to the receiving Party or its Representatives, (b) such information is
subsequently disclosed to the receiving Party or its Representatives by a third
party that, to the knowledge of the receiving Party, is not bound by a duty of
confidentiality, (c) such information becomes publicly available through no
fault of the receiving Party, (d) the receiving Party in good faith believes
that the use of such information is necessary or appropriate in making any
filing or obtaining any Consent required for the performance of the
Transactions (in which case the receiving Party will use its best efforts to
advise the other Parties prior to making the disclosure) or

21

(e) the receiving Party in good faith believes that the furnishing or
use of such information is required by or necessary or appropriate in
connection with any Proceeding, Law or any listing or trading agreement
concerning its publicly-traded securities (in which case the receiving Party
will use its best efforts to advise the other Parties prior to making the
disclosure). No Party will issue any press release or make any public
announcement relating to the subject matter of this Agreement without the prior
written approval of the Buyer and the Sellers’ Representative; provided,
however, that any Party may make any public disclosure it believes in
good faith is required by Law or any listing or trading agreement concerning
its publicly-traded securities (in which case such Party will use its best
efforts to advise the other Parties prior to making the disclosure). The
Sellers and the Buyer will consult with each other concerning the means by
which any employee, customer or supplier of the Company or any other Person
having any business relationship with the Company will be informed of the
Transactions, and the Buyer will have the right to be present for any such
communication.

          6.8
Closing Balance Sheet. No later
than one Business Day prior to the Closing Date, the Company will deliver to
the Buyer a Closing Balance Sheet together
with supporting work papers, payoff letters and any other related documentation
requested by the Buyer. 

ARTICLE VII

CLOSING CONDITIONS

          7.1
Conditions to the Buyer’s Obligations.
The Buyer’s obligation to perform the Transactions contemplated to be performed
on or before the Closing Date is subject to satisfaction, or written waiver by
the Buyer, of each of the following conditions:

	
  

 	
  

 
	
  

 	
                     (a)
 (i) all of the representations and warranties of each Seller in Article III
 must have been accurate in all material respects as of the date hereof and
 must be accurate in all material respects as if made on the Closing Date,
 (ii) each Seller must have performed and complied with all of its covenants
 and agreements in this Agreement to be performed prior to or at the Closing
 and (iii) each Seller must deliver to the Buyer at the Closing a certificate,
 in form and substance reasonably satisfactory to the Buyer, confirming
 satisfaction, with respect to such Seller, of the conditions in clauses (i)
 and (ii) above; provided, however, that such certificate, for
 purposes of the obligations under Article X, will certify that all of the
 representations and warranties of such Seller in Article III are accurate in
 all respects as if made on the Closing Date;

 
	
  

 	
  

 
	
  

 	
                     (b)
 (i) all of the representations and warranties of the Company in this
 Agreement must have been accurate in all material respects as of the date
 hereof and must be accurate in all material respects as if made on the
 Closing Date, except in each case to the extent any such representation or
 warranty contains a materiality qualification, in which case such
 representation or warranty must have been and must be accurate in all
 respects, (ii) the Company must have performed and complied with all of its
 covenants and agreements in this Agreement to be performed prior to or at the
 Closing and (iii) the Company must deliver to the Buyer at the Closing a
 certificate, in form and substance reasonably satisfactory to the Buyer,
 confirming satisfaction of the conditions in clauses (i) and (ii) of Section
 7.1(b) and in Sections 7.1(e) and 7.1(i); provided, however, that such
 certificate, for purposes of the obligations under Article X, will certify
 that all of the representations and warranties of the Company in this
 Agreement are accurate in all respects as if made on the Closing Date;

 
	
  

 	
  

 
	
  

 	
                     (c)
 each of the following documents must have been delivered to the Buyer and
 dated as of the Closing Date (unless otherwise indicated):

 

                    (i)
An assignment of the certificates representing shares of Common Stock executed
by each Seller and dated as of the Closing Date evidencing the sale of the
Company shares being sold by each Seller to Buyer in form and substance
reasonably satisfactory to the Buyer, for transfer to the Buyer;

                    (ii)
the minute books and capital ledger of the Company;

                    (iii)
the Non-Compete Agreements, executed by each Seller;

22

                    (iv)
the Employment Agreements, executed by Frank Infelise and Mario Larach;

                    (v)
signed resignations of each officer and each director of the Company, in form
and substance reasonably satisfactory to the Buyer;

                    (vi)
executed releases from each Seller, officer and director of the Company, in
form and substance reasonably satisfactory to the Buyer;

                    (vii)
upon request of Buyer, payoff letters with respect to the Funded Debt, dated as
of the Closing Date or within a reasonable time prior to the Closing Date, and
all documentation necessary or desirable to obtain releases of all Encumbrances
related to the Funded Debt, including appropriate UCC termination statements,
in each case in form and substance reasonably satisfactory to the Buyer; 

                    (viii)
a certificate of the secretary of the Company, in form and substance reasonably
satisfactory to the Buyer, certifying that (A) attached thereto is a true,
correct and complete copy of (1) the articles or certificate of incorporation
of the Company certified as of a recent date by the Secretary of State of the
State of Hawaii and the bylaws of the Company, (2) resolutions duly adopted by
the board of directors and stockholders of the Company authorizing the
performance of the Transactions and the execution and delivery of the
Transaction Documents to which it is a party and (3) a certificate of existence
or good standing as of a recent date of the Company from the State of Hawaii
and a certificate of existence or good standing as of a recent date of such
Company from each state in which it is qualified to conduct business, (B) the
resolutions referenced in subsection (A)(2) are still in effect and (C) nothing
has occurred since the date of the issuance of the certificate(s) referenced in
subsection (A)(3) that would adversely affect the Company’s existence or good
standing in any such jurisdiction;

                    (ix)
all consents to the Transactions shall be obtained by the Sellers in form and
substance reasonably satisfactory to the Buyer;

                    (x)
a certification of each Seller’s non-foreign status as set forth in Treasury
Regulation § 1445-2(b);

                    (xi)
any documents required by Section 2.2; and

                    (xii)
such other documents as the Buyer may reasonably request for the purpose of (A)
evidencing the accuracy of the Sellers’ and the Company’s representations and
warranties, (B) evidencing the Sellers’ and the Company’s performance of, and
compliance with, any covenant or agreement required to be performed or complied
with by the Sellers and the Company, (C) evidencing the satisfaction of any
condition referred to in this Section 7.1 or (D) otherwise facilitating the
performance of the Transactions. 

	
  

 	
  

 
	
  

 	
                     (d)
 all applicable waiting periods (and any extensions thereof) under the HSR Act
 must have expired or otherwise been terminated and each other Consent listed
 in Schedule 6.2 must have been obtained, delivered to the Buyer, be in
 full force and effect and be in the form approved by the Buyer pursuant to
 Section 6.2;

 
	
  

 	
  

 
	
  

 	
                     (e)
 since the date hereof, there must not have been an event that has caused a
 Material Adverse Effect or could reasonably be expected to result in a
 Material Adverse Effect;

 
	
  

 	
  

 
	
  

 	
                     (f)
 there must not be any Proceeding pending or threatened against the Buyer or
 any of its Affiliates that (i) challenges or seeks damages or other relief in
 connection with any of the Transactions or (ii) may have the effect of
 preventing, delaying, making illegal or interfering with any of the
 Transactions; 

 
	
  

 	
  

 
	
  

 	
                     (g)
 the performance of the Transactions must not, directly or indirectly, with or
 without notice or lapse of time, violate any Law; and 

 

23

	
  

 	
  

 
	
  

 	
                     (h)
 the Buyer must have received the cash proceeds of the financing transactions
 necessary to perform the Transactions to be performed on the Closing Date and
 to fund the working capital requirements of the Company after the Closing, on
 terms and conditions satisfactory to the Buyer; and 

 
	
  

 	
  

 
	
  

 	
                     (i)
 all Indebtedness owed to the Company by any Seller or any Related Person of
 any Seller must have been paid in full by such Person.

 

          7.2
Conditions to the Sellers’ Obligations.
The Sellers’ obligations to perform the Transactions contemplated to be
performed on or before the Closing Date are subject to satisfaction, or written
waiver by the Sellers’ Representative, of the following conditions:

	
  

 	
  

 
	
  

 	
                     (a)
 (i) all of the representations and warranties of the Buyer in this Agreement
 must have been accurate in all material respects as of the date hereof and
 must be accurate in all material respects as if made on the Closing Date,
 (ii) the Buyer must have performed and complied with all of its covenants and
 agreements in this Agreement to be performed prior to or at the Closing, and
 (iii) the Buyer must deliver to the Sellers’ Representative at the Closing a
 certificate, in form and substance reasonably satisfactory to the Sellers’
 Representative, confirming satisfaction of the conditions in clauses (i) and
 (ii) above; provided, however, that such certificate, for
 purposes of the obligations under Article X, will certify that all of the
 representations and warranties of the Buyer in this Agreement are accurate in
 all respects as if made on the Closing Date;

 
	
  

 	
  

 
	
  

 	
                     (b)
 each of the following documents must have been delivered to the Sellers’
 Representative:

 

                              (i)
the Sellers’ Employment Agreements, executed by the Buyer or a Company, as
applicable;

                              (ii)
confirmation that the Cash Amount due to Sellers and the A/P Amount as required
in this Agreement shall be satisfied as part of the transactions that occur as
part of the Closing; 

                              (iii)
receipt of Buyer’s stock certificates in the name of each Seller representing
their respective portion of the Share Amount; and

                              (iv)
receipt of options to purchase common stock of the Parent, in the name of each
Seller, as set forth in Section 2.2(c).

	
  

 	
  

 
	
  

 	
                     (c)
 all applicable waiting periods (and any extensions thereof) under the HSR Act
 must have expired or otherwise been terminated.

 

ARTICLE VIII

TERMINATION

          8.1
Termination Events. This Agreement
may, by written notice given to the non-terminating Parties prior to the
Closing, be terminated:

                    (a)
by (i) the Buyer, if any representation or warranty made by any Seller or the
Company is inaccurate in any material respect or any Seller or the Company has
breached any covenant or agreement in this Agreement in any material respect or
(ii) the Sellers’ Representative as defined in Section 11.14, if any
representation or warranty made by the Buyer is inaccurate in any material
respect or the Buyer has breached any covenant or agreement in this Agreement
in any material respect;

                    (b)
by (i) the Buyer, if any condition in Section 7.1 has not been satisfied or
waived in writing by August 3, 2011 or if satisfaction of any such condition is
or becomes impossible (in either case, for

24

reasons other than the failure of the Seller or Company to comply with
its obligations under this Agreement) or (ii) the Sellers’ Representative, if
any condition in Section 7.2 has not been satisfied or waived in writing by
August 3, 2011 or if satisfaction of any such condition is or becomes
impossible (other than through the failure of Buyer to comply with such Party’s
obligations under this Agreement); or

                    (c)
by mutual consent in writing of the Buyer and the Sellers’ Representative.

          8.2
Effect of Termination. If this
Agreement is terminated pursuant to Section 8.1, all further obligations
of the Parties under this Agreement will terminate; provided, however,
that the obligations in Section 6.7 (confidentiality) and Article XI
(miscellaneous) will survive the termination. 

ARTICLE IX

POST-CLOSING COVENANTS

          The Parties
agree as follows with respect to the period following the Closing:

          9.1
Litigation Support. If any Party
is evaluating, pursuing, contesting or defending against any Proceeding in
connection with (a) any Transaction or (b) any fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction on or prior to the Closing Date
involving the Company, then upon the request of such party each other Party
will cooperate with the requesting Party and its counsel in the evaluation,
pursuit, contest or defense, make available its personnel, and provide such
testimony and access to its books and records as may be necessary in connection
therewith. The requesting Party will reimburse each other Party for its
out-of-pocket expenses related to such cooperation (unless the requesting Party
is entitled to indemnification therefor under Section 10.1 without regard to
Section 10.4).

          9.2
Transition. No Seller will take
any action that is designed or intended to have the effect of discouraging any
lessor, lessee, employee, Governmental Body, licensor, licensee, customer,
supplier or other business associate of the Company from maintaining the same
relationships with the Company after the Closing as it maintained with the
Company prior to the Closing. Each Seller will refer all inquiries relating to
the businesses of the Company to the Buyer from and after the Closing.

          9.3
Confidentiality. Each Seller will,
and will cause its Affiliates and Representatives to, maintain the
confidentiality of the Confidential Information at all times, and will not,
directly or indirectly, use any Confidential Information for its own benefit or
for the benefit of any other Person or reveal or disclose any Confidential
Information to any Person other than authorized Representatives of the Buyer,
except in connection with this Agreement or with the prior written consent of the
Buyer. The covenants in this Section 9.3 will not apply to Confidential
Information that (a) is or becomes available to the general public through no
breach of this Agreement by such Seller or any of its Affiliates or
Representatives or, to the Knowledge of such Seller, breach by any other Person
of a duty of confidentiality to the Buyer or (b) such Seller is required to
disclose by applicable Law; provided, however, that such Seller will notify the Buyer
in writing of such required disclosure as much in advance as practicable in the
circumstances and cooperate with the Buyer to limit the scope of such
disclosure. At any time that the Buyer may request, each Seller will, and will
cause its Affiliates and Representatives to, turn over or return to the Buyer
all Confidential Information in any form (including all copies and
reproductions thereof) in their possession or control.

          9.4
Payment of Expenses of the Company.
Promptly after the conclusion of the Closing, Buyer shall cause the Company to
satisfy all of the obligations of the Company that remain outstanding as of the
Closing Date.

          9.5
Indemnification of Company Directors and Officers.
From and after the Closing, the Buyer and the Company shall, jointly and
severally to the fullest extent permitted under applicable Law, indemnify and
hold harmless each present and former director and officer of the Company and
each such Person who served at the request of the Company as a director,
officer, trustee, partner, fiduciary, employee or agent (collectively the “Indemnified
Officers and Directors”) from and against all Liabilities paid or
incurred in connection with any claim or action (whether arising before or
after the Closing), whether civil, administrative, criminal or investigative,

25

arising out of or pertaining to any action or omission in their
capacities as directors, officers, trustees, partners, fiduciaries, employees
or agents, in each case occurring at or before the Closing (excluding the
transactions contemplated by this Agreement), in each case to the fullest
extent permitted by applicable Law or to the fullest extent permitted under the
governance documents of the applicable entities or any applicable contract or
agreement as in effect on the date hereof. Without limiting the foregoing, in
the event of any such claim or action, (i) the Parent Corporation, the Buyer or
the Company shall pay the reasonable fees and expenses of counsel selected by
any Indemnified Officer and Director, which counsel shall be reasonably
satisfactory to the Buyer or the Company, as the case may be, promptly after
statements are received and (ii) the Parent Corporation, the Buyer and the
Company shall cooperate in the defense of any such matter; provided, however,
that neither the Parent Corporation, the Buyer nor the Company shall be liable
for any settlement effected without its written consent (which consent shall
not be unreasonably withheld or delayed). For a period of six (6) years after
the Closing, the Buyer shall not, and shall not permit the Company to, amend,
alter, repeal or modify any provision in any of the Company’s articles of
incorporation or bylaws relating to the exculpation or indemnification of any
Indemnified Officers and Directors in any way that diminishes or adversely
effects the indemnification or exculpations provided therein (unless required
by Law), it being the intent of the Parties that the officers and directors of
the Company who are officers and directors prior to the Closing shall continue
to be entitled to such exculpation and indemnification to the full extent
provided for under applicable Law. In the event that any claim or claims for
indemnification are asserted or made within such six (6) year period, all
rights to indemnification in respect to any such claim or claims shall continue
until the disposition of any and all such claims. In the event that the Parent,
the Buyer, the Company or any of their respective successors or assigns
consolidates with or merges into any Person and shall not be the continuing or
surviving corporation or entity in such consolidation or merger or transfers
all or substantially all of its properties and assets to any Person, then, and
in each case, proper provisions shall be made so that the successors and
assigns or the surviving corporation honor the indemnification and other
obligations set forth in this Section 9.5. Each Indemnified Officer and
Director shall be a third party beneficiary under this Section 9.5 as
separate contractual rights for his or her benefit, and such rights shall be
enforceable by each such Indemnified Officer and Director, his or her heirs or
personal representatives and shall be binding upon the Buyer, the Company and
their respective successors and assigns.

ARTICLE X

INDEMNIFICATION

          10.1
Indemnification by the Sellers.
After the Closing and subject to the terms and conditions of this Article X:

                    (a)
Each Seller, severally and not jointly, will indemnify and hold harmless the
Buyer, the Company and their respective Affiliates (other than the Sellers) and
Representatives (other than the Sellers) from, and pay and reimburse the Buyer,
the Company and their respective Affiliates (other than the Sellers) and
Representatives (other than the Sellers) for, all Losses, directly or
indirectly, relating to or arising from: (i) any breach or inaccuracy of any
representation or warranty made by such Seller in Article III; (ii) any breach
or inaccuracy of the certificate delivered by such Seller pursuant to Section
7.1(a); or (iii) any breach of any covenant or agreement of such Seller in this
Agreement.

                    (b)
The Sellers, jointly and not severally, will indemnify and hold harmless the
Buyer, the Company and their respective Affiliates (other than the Sellers) and
Representatives (other than the Sellers) from, and pay and reimburse the Buyer,
the Company and their respective Affiliates (other than the Sellers) and
Representatives (other than the Sellers) for, all Losses, directly or
indirectly, relating to or arising from: (i) any breach or inaccuracy of any
representation or warranty made by the Company in this Agreement; (ii) any
breach or inaccuracy of any certificate delivered pursuant to Section 7.1
(other than Section 7.1(a)); (iii) any breach of any covenant or agreement of
the Company in this Agreement; (iv) any claim by any Seller or any Person
claiming through or on behalf of such Seller arising out of or relating to any
act or omission by the Buyer or any other Person in reliance upon written
instructions from or written notices given by the Sellers’ Representative; or
(v) any matter set forth on Schedule 10.1.

          10.2
Indemnification by the Buyer.
After the Closing, subject to the terms and conditions of this Article X, the
Buyer will indemnify and hold harmless the Sellers from, and pay and reimburse
the Sellers for, all Losses, directly or indirectly, relating to or arising
from: (a) any breach or inaccuracy of any representation or

26

warranty made by the Buyer in this Agreement or pursuant to the
certificate delivered by the Buyer pursuant to Section 7.2; or (b) any breach
of any covenant or agreement of the Buyer in this Agreement.

          10.3
Survival and Time Limitations. All
representations, warranties, covenants and agreements of the Buyer and the
Sellers in this Agreement or any other certificate or document delivered
pursuant to this Agreement will survive the Closing. If the Closing occurs, the
Sellers will have no Liability with respect to any claim for any breach or
inaccuracy of any representation or warranty in this Agreement or any other
certificate or document delivered pursuant to this Agreement, or any covenant
or agreement in this Agreement to be performed and complied with prior to the
Closing Date, unless the Buyer notifies the Sellers’ Representative of such a
claim on or before the date that is one year after the Closing Date; provided,
however, that any claim relating to Article III (the Sellers) or Section
4.1 (organization), 4.2 (capitalization), 4.3 (authority) or 4.8 (title to
assets), fraud, or any covenant or agreement to be performed or complied with
at or after the Closing may be made at any time without any time limitation. If
the Buyer or the Sellers’ Representative, as applicable, provides proper notice
of a claim within the applicable time period set forth above, liability for
such claim will continue until such claim is resolved. 

          10.4
Limitations on Indemnification by the Sellers.
The Sellers will have no Liability with respect to the matters described in
Section 10.1(b) until the total of all Losses with respect to such matters
exceeds $30,000 (the “Basket”), at
which point the Sellers will be obligated to indemnify for all Losses, to the
extent the Losses exceed the amount of the Basket; provided, however,
that any claim relating to Section 4.1 (organization), 4.2 (capitalization),
4.3 (authority), 4.4 (conflicts), 4.8 (title to assets), 4.15 (taxes), 4.19
(environmental), 4.21 (employee benefits) or 4.26 (brokers) will not be subject
to or counted towards the Basket. This Section 10.4 will not apply to any
fraudulent breach of any representation or warranty. For the purposes of this
Article X, in computing a “Loss”, the amount of each claim shall be deemed to
be an amount (i) net of any Tax benefit actually realized by the Buyer, the
Company or any Affiliate as a result of such Loss and (ii) net of any insurance
proceeds and any indemnity, contribution or other similar payment recoverable
by the Buyer, the Company or any Affiliate of either from any third Person with
respect thereto. To the extent that the Buyer, the Company or any Affiliate
subsequently realizes a Tax benefit for a Loss after the computation of a
claim, the Buyer shall pay the amount of such Tax benefit to the Sellers at the
time that the amount of such Tax benefit is known, pro rata in accordance with
the Sellers ownership interest in the Company as set forth on Schedule 3.2. In
no event shall the Sellers be liable for indirect, punitive, exemplary, special
or consequential Losses (including, but not limited to, lost profits) pursuant
to this Article X.

          10.5
Claims Against the Company.
Following the Closing, the Sellers may not assert, directly or indirectly, and
hereby waive, any claim, whether for indemnification, contribution, subrogation
or otherwise, against the Company with respect to any act, omission, condition
or event occurring or existing prior to or on the Closing Date or any
obligation of the Sellers under Section 10.1, other than for indemnification
obligations related to a Seller’s role as a director or officer of the Company
pursuant to the Company’s Organizational Documents. 

          10.6
Third-Party Claims.

                    (a)
If a third party commences a lawsuit or arbitration (a “Third-Party Claim”) against any Person (the
“Indemnified Party”) with respect
to any matter that the Indemnified Party might make a claim for indemnification
against any Party (the “Indemnifying Party”)
under this Article X, then the Indemnified Party must notify the Indemnifying
Party (or the Sellers’ Representative, in the case of the Sellers) thereof in
writing of the existence of such Third-Party Claim and must deliver copies of
any documents served on the Indemnified Party with respect to the Third-Party
Claim; provided, however, that any failure to notify the
Indemnifying Party or deliver copies will not relieve the Indemnifying Party
from any obligation hereunder unless (and then solely to the extent) the
Indemnifying Party is materially prejudiced by such failure.

                    (b)
Upon receipt of the notice described in Section (a), the Indemnifying Party
will have the right to defend the Indemnified Party against the Third-Party
Claim with counsel reasonably satisfactory to the Indemnified Party so long as
(i) within ten days after receipt of such notice, the Indemnifying Party
notifies the Indemnified Party in writing that the Indemnifying Party will,
subject to the limitations of Section 10.4, indemnify the Indemnified Party
from and against any Losses the Indemnified Party may incur relating to or
arising out of the Third-Party Claim, (ii) the Indemnifying Party provides the
Indemnified Party with evidence reasonably acceptable to the Indemnified Party
that the Indemnifying Party will have the financial resources to defend against
the Third-

27

Party Claim and fulfill its indemnification obligations hereunder,
(iii) the Indemnifying Party conducts the defense of the Third-Party Claim
actively and diligently and (iv) the Indemnifying Party keeps the Indemnified
Party apprised of all material developments, including settlement offers, with
respect to the Third-Party Claim and permits the Indemnified Party to
participate in the defense of the Third-Party Claim.

                    (c)
So long as the Indemnifying Party is conducting the defense of the Third-Party
Claim in accordance with Section 10.6(b), (i) the Indemnifying Party will not
be responsible for any attorneys’ fees incurred by the Indemnified Party
regarding the Third-Party Claim (other than attorneys’ fees incurred prior to the
Indemnifying Party’s assumption of the defense pursuant to Section 10.6(b)) and
(ii) neither the Indemnified Party nor the Indemnifying Party will consent to
the entry of any judgment or enter into any settlement with respect to the
Third-Party Claim without the prior written consent of the other party, which
consent will not be withheld unreasonably. If the Indemnified Party desires to
consent to the entry of judgment with respect to or to settle a Third-Party
Claim but the Indemnifying Party refuses, then the Indemnifying Party will be
responsible for all Losses with respect to such Third-Party Claim, without
giving effect to the Basket. 

                    (d)
If any condition in Section 10.6(b) is or becomes unsatisfied, (i) the
Indemnified Party may defend against, and consent to the entry of any judgment
or enter into any reasonable settlement with respect to, the Third-Party Claim,
(ii) the Indemnifying Party will reimburse the Indemnified Party promptly and
periodically (but no less often than monthly) for the costs of defending
against the Third-Party Claim, including attorneys’ fees and expenses, and
(iii) the Indemnifying Party will remain responsible for any Losses the
Indemnified Party may incur relating to or arising out of the Third-Party Claim
to the fullest extent provided in this Article X.

          10.7
Other Indemnification Matters. Any
claim for indemnification under this Article X must be asserted by providing
written notice to the Sellers’ Representative (or the Buyer, in the case of a
claim by any Seller) specifying the factual basis of the claim in reasonable
detail to the extent then known by the Person asserting the claim. All
indemnification payments under this Article X will be deemed adjustments to the
Purchase Price. THE INDEMNIFICATION
PROVISIONS IN THIS ARTICLE X WILL BE ENFORCEABLE REGARDLESS OF THE SOLE OR
CONCURRENT STRICT LIABILITY IMPOSED ON THE PERSON SEEKING INDEMNIFICATION OR
ITS AFFILIATES. THE WAIVER OF ANY CONDITION BASED ON THE ACCURACY OF ANY
REPRESENTATION OR WARRANTY, OR ON THE PERFORMANCE OF OR COMPLIANCE WITH ANY
COVENANT OR AGREEMENT, WILL NOT AFFECT THE RIGHT TO INDEMNIFICATION, PAYMENT OF
DAMAGES, OR OTHER REMEDY BASED ON ANY SUCH REPRESENTATION, WARRANTY, COVENANT
OR AGREEMENT. If any Seller liquidates or dissolves at any time when
any Liability of such Seller with respect to this Article X may thereafter
arise or be determined, then at the time of such liquidation or dissolution,
such Seller will cause its shareholders, members, partners or other equity holders
or distributees of such Seller’s assets, as the case may be, to take such
assets subject to such Liabilities ratably in proportion to the assets
received; provided, however, that the failure on behalf of any
Seller to comply with the covenant set forth in this sentence will in no way
reduce such Seller’s obligations in this Agreement.

          10.8 Subrogation.
If an Indemnified Party recovers damages from an Indemnifying Party, the
Indemnifying Party shall be subrogated, to the extent of such recovery, to the
Indemnified Party’s rights against any third party with respect to such
recovered damages subject to the subrogation rights of any insurer providing
coverage under one of the Indemnified Party’s policies and except to the extent
that the grant of subrogation rights to the Indemnifying Party is prohibited by
the terms of the applicable insurance policy.

          10.9
Other Limitations. Notwithstanding anything in this
Agreement to the contrary, the aggregate liability of each Seller for
indemnification under Article X shall in no event exceed such Seller’s
applicable portion of the Cash Amount provided to such Seller by the Buyer
pursuant to Section 2.1(a). In the event that an Indemnifying Party can
establish that an Indemnified Party has knowledge, on or before the Closing, of
a breach of a representation, warranty, covenant or agreement of the
Indemnifying Party upon which a claim for indemnification by the Indemnified
Party is based, then the Indemnifying Party shall have no liability for any damages
arising out of such claim. An Indemnified Party shall not be entitled to
multiple recoveries for the same damages. Each Indemnified Party shall seek to
mitigate the amount of damages for which the Indemnifying Party is responsible.
No Seller shall be liable under any provision of this Agreement for any Losses,
to the extent such Losses relate to actions taken and not taken by the Buyer,
the Company or any of their Affiliates after the Closing.

28

          10.10
Exclusive Remedy. After the Closing, this Article X
will provide the exclusive remedy for the matters contemplated by this
Agreement, except for claims based upon fraud. This Article X will not affect
any remedy any Party may have under this Agreement prior to the Closing or upon
termination of this Agreement. In furtherance of the foregoing, and except as
set forth in this Article X, the Buyer hereby waives, to the fullest extent
permitted under applicable Law, any and all rights, claims, causes of action it
may have against the Sellers arising under or based upon any federal, state or
local law (including, without limitation, any such rights, claims or causes of
action arising under or based upon common law or otherwise). 

ARTICLE XI

MISCELLANEOUS

          11.1
Further Assurances. Each Party
agrees to furnish upon request to any other Party such further information, to
execute and deliver to any other Party such other documents, and to do such
other acts and things, all as any other Party may reasonably request for the
purpose of carrying out the intent of the Transaction Documents.

          11.2
No Third-Party Beneficiaries. This
Agreement does not confer any rights or remedies upon any Person other than the
Parties and their respective successors and permitted assigns and, as expressly
set forth in this Agreement, any Indemnified Party.

          11.3
Entire Agreement. The Transaction
Documents constitute the entire agreement among the Parties with respect to the
subject matter of the Transaction Documents and supersede all prior agreements (whether
written or oral and whether express or implied) among any Parties to the extent
related to the subject matter of the Transaction Documents (including any
letter of intent or confidentiality agreement).

          11.4
Successors and Assigns. This Agreement
will be binding upon and inure to the benefit of the Parties and their
respective successors and permitted assigns. No party may assign, delegate or
otherwise transfer (whether by operation of law or otherwise) any of such
party’s rights, interests or obligations in this Agreement without the prior
written approval of the other parties to this Agreement. 

          11.5
Counterparts. This Agreement may
be executed by the Parties in multiple counterparts and shall be effective as
of the date set forth above when each Party shall have executed and delivered a
counterpart hereof, whether or not the same counterpart is executed and
delivered by each Party. When so executed and delivered, each such counterpart
shall be deemed an original and all such counterparts shall be deemed one and
the same document. Transmission of images of signed signature pages by
facsimile, e-mail or other electronic means shall have the same effect as the
delivery of manually signed documents in person.

          11.6
Notices. Any notice pursuant to
this Agreement must be in writing and will be deemed effectively given to
another Party on the earliest of the date (a) three Business Days after such
notice is sent by registered U.S. mail, return receipt requested, (b) one
Business Day after receipt of confirmation if such notice is sent by facsimile,
(c) one Business Day after delivery of such notice into the custody and control
of an overnight courier service for next day delivery, (d) one Business Day
after delivery of such notice in person and (e) such notice is received by that
Party; in each case to the appropriate address below (or to such other address
as a Party may designate by notice to the other Parties):

	
  

 	
  

 
	
  

 	
 If to the
 Sellers’ Representative or any Seller (or to the Company prior to the
 Closing):

 
	
  

 	
  

 
	
  

 	
 Mario
 Larach, as the Sellers’ Representative 

 
	
  

 	
 3525-723 Del
 Mar Heights Rd.

 
	
  

 	
 San Diego,
 CA 92130-2122

 
	
  

 	
 Fax: (248)
 692-5330

 
	
  

 	
 Phone: (858)
 945-5291

 
	
  

 	
  

 
	
  

 	
 with a copy
 to:

 
	
  

 	
 Morrison
 & Foerster LLP

 
	
  

 	
 12531 High
 Bluff Drive, Suite 100

 

29

	
  

 	
  

 
	
  

 	
 San Diego, CA 92130

 
	
  

 	
 Fax: (858) 523-2810

 
	
  

 	
 Phone: (858) 720-5198

 
	
  

 	
 Attn: Steven
 G. Rowles, Esq.

 
	
  

 	
  

 
	
  

 	
 If to the
 Buyer:

 
	
  

 	
 11 Good
 Energy Sciences, Inc.

 
	
  

 	
 4450 Belden
 village Street N.W., Suite 800

 
	
  

 	
 Canton, OH
 44718

 
	
  

 	
 Fax: 330-
 492-0901

 
	
  

 	
 Phone:
 330-685-4567

 
	
  

 	
 Attn:
 Frederick C. Berndt, CEO

 
	
  

 	
  

 
	
  

 	
 with a copy
 to:

 
	
  

 	
  

 
	
  

 	
 Morse &
 Morse, PLLC

 
	
  

 	
 1400 Old
 Country Road, Suite 302

 
	
  

 	
 Westbury, NY
 11590

 
	
  

 	
 Fax:
 516-487-1452

 
	
  

 	
 Phone:
 516-487-1446

 
	
  

 	
 Attn: Steven
 Morse, Esq.

 

          11.7
JURISDICTION; SERVICE OF PROCESS.
EACH PARTY (A) CONSENTS TO THE PERSONAL JURISDICTION OF ANY STATE OR FEDERAL
COURT LOCATED IN SAN DIEGO COUNTY, CALIFORNIA (AND ANY CORRESPONDING APPELLATE
COURT) IN ANY PROCEEDING ARISING OUT OF OR RELATING TO ANY TRANSACTION
DOCUMENT, (B) WAIVES ANY VENUE OR INCONVENIENT FORUM DEFENSE TO ANY PROCEEDING
MAINTAINED IN SUCH COURTS AND (C) EXCEPT AS OTHERWISE PROVIDED IN THIS
AGREEMENT, AGREES NOT TO INITIATE ANY PROCEEDING ARISING OUT OF OR RELATING TO
ANY TRANSACTION DOCUMENT IN ANY OTHER COURT OR FORUM. PROCESS IN ANY SUCH
PROCEEDING MAY BE SERVED ON ANY PARTY ANYWHERE IN THE WORLD. EACH SELLER
IRREVOCABLY APPOINTS SELLERS’ REPRESENTATIVE AS SUCH SELLER’S AGENT IN THE
STATE OF CALIFORNIA TO RECEIVE ON SUCH SELLER’S BEHALF SERVICE OF THE SUMMONS
AND COMPLAINT AND ANY OTHER PROCESS THAT MIGHT BE SERVED IN ANY SUCH
PROCEEDING.

          11.8
Governing Law. This Agreement will
be governed by the laws of the State of California without giving effect to any
choice or conflict of law principles of any jurisdiction.

          11.9
Amendments and Waivers. No
amendment of any provision of this Agreement will be valid unless the amendment
is in writing and signed by the Buyer and the Sellers’ Representative. No
waiver of any provision of this Agreement will be valid unless the waiver is in
writing and signed by the waiving Party (or the Sellers’ Representative, in the
case of a waiver by any or all Sellers). The failure of a Party at any time to
require performance of any provision of this Agreement will not affect such
Party’s rights at a later time to enforce such provision. No waiver by any
Party of any breach of this Agreement will be deemed to extend to any other
breach hereunder or affect in any way any rights arising by virtue of any other
breach.

          11.10
Severability. Any provision of
this Agreement that is determined by any court of competent jurisdiction to be
invalid or unenforceable will not affect the validity or enforceability of any
other provision hereof or the invalid or unenforceable provision in any other
situation or in any other jurisdiction. Any provision of this Agreement held
invalid or unenforceable only in part or degree will remain in full force and
effect to the extent not held invalid or unenforceable.

          11.11
Expenses. The Company will bear
all expenses incurred by the Company or any Representative of the Company in
connection with the Transactions contemplated to be performed before or on the
Closing Date and such expenses will have been paid or accrued by the Company
prior to the Closing Date. Each Seller will bear all

30

expenses incurred by such Seller or any of its Representatives in
connection with the Transactions contemplated to be performed before or on the
Closing Date. The Buyer will bear all expenses incurred by the Buyer or any of
its Representatives in connection with the Transactions contemplated to be
performed on or before the Closing Date. In the event of termination of this
Agreement, the obligation of each Party to pay its own expenses will be subject
to any rights of such Party arising from a breach of this Agreement by another
Party.

          11.12
Construction. The article and
section headings in this Agreement are inserted for convenience only and are
not intended to affect the interpretation of this Agreement. Any reference in
this Agreement to any Article or Section refers to the corresponding Article or
Section of this Agreement. Any reference in this Agreement to any Schedule or
Exhibit refers to the corresponding Schedule or Exhibit attached to this
Agreement and all such Schedules and Exhibits are incorporated herein by
reference. The word “including” in this Agreement means “including without
limitation.” This Agreement will be construed as if drafted jointly by the
Parties and no presumption or burden of proof will arise favoring or
disfavoring any Party by virtue of the authorship of any provision in this
Agreement. Unless the context requires otherwise, any reference to any Law will
be deemed also to refer to all amendments and successor provisions thereto and
all rules and regulations promulgated thereunder, in each case as in effect as
of the date hereof and the Closing Date. All accounting terms not specifically
defined in this Agreement will be construed in accordance with GAAP as in
effect on the date hereof (unless another effective date is specified herein).
The word “or” in this Agreement is disjunctive but not necessarily exclusive.
All words in this Agreement will be construed to be of such gender or number as
the circumstances require. References in this Agreement to time periods in terms
of a certain number of days mean calendar days unless expressly stated herein
to be Business Days. In interpreting and enforcing this Agreement, each
representation and warranty will be given independent significance of fact and
will not be deemed superseded or modified by any other such representation or
warranty.

          11.13
Specific Performance. Each Party
acknowledges that the other Parties would be damaged irreparably and would have
no adequate remedy of law if any provision of this Agreement is not performed
in accordance with its specific terms or otherwise is breached. Accordingly,
each Party agrees that the other Parties will be entitled to an injunction to
prevent any breach of any provision of this Agreement and to enforce
specifically any provision of this Agreement, in addition to any other remedy
to which they may be entitled and without having to prove the inadequacy of any
other remedy they may have at law or in equity and without being required to
post bond or other security.

          11.14
Sellers’ Representative.

          
(a) Each Seller, on behalf of such Seller and such Seller’s successors, heirs
and permitted assigns, hereby appoints Mario Larach as “Sellers’ Representative” as such Seller’s
agent and attorney-in-fact, with full power of substitution, for all purposes
set forth in this Agreement, including the full power and authority (i) to
perform the Transactions to be performed by the Sellers under this Agreement,
(ii) to disburse any funds received hereunder to the Sellers, (iii) to execute
and deliver on behalf of each Seller any amendment or waiver under this
Agreement and to agree to resolution of all claims hereunder, (iv) to retain
legal counsel and other professional services, at the expense of the Sellers,
in connection with the performance by the Sellers’ Representative of this
Agreement and (v) to do each and every act (including the execution and
delivery of the certificates required by Section 7.1) and exercise all rights
which such Seller is permitted or required to do or exercise under this
Agreement. If the Sellers’ Representative resigns or is otherwise unable or
unwilling to serve in such capacity, the Sellers that hold or held a majority
of all of the Shares sold or to be sold hereunder will appoint a new Person to
serve as the Sellers’ Representative and will provide prompt written notice
thereof to the Buyer. Until such notice is received, the Buyer shall be
entitled to rely on the actions and statements of the previous Sellers’
Representative. The power and authority granted hereunder will be exclusive and
no Seller shall be entitled to exercise any right under this Agreement except
through the Sellers’ Representative.

                    (b)
The appointment of the Sellers’ Representative as the attorney-in-fact for each
Seller as set forth in this Section 11.14 and all authority hereby conferred
are granted and conferred in consideration of the interest of the other
Sellers, is therefore coupled with an interest and is and will be irrevocable
and shall neither be terminated nor otherwise affected by any act of any Seller
or by operation of law, whether by the death, dissolution, liquidation,
incapacity or incompetence of such Seller or by the occurrence of any other
event. If, after the execution of this Agreement, any Seller dies, dissolves or
liquidates or becomes incapacitated or incompetent, the Sellers’ 

31

Representative is nevertheless authorized, empowered and directed to
act in accordance with this Section 11.14 as if that death, dissolution,
liquidation, incapacity or incompetency had not occurred and regardless of
notice thereof. Each Seller agrees to execute such wills and documents as may
be necessary and to give such instructions to his personal representatives as
may be necessary so that its successors will remain subject to this Agreement
and carry out the full intent and purposes hereof. Without limiting the
generality of the foregoing, this Section 11.14 will not be affected by the subsequent
incapacity or mental incompetency of any Seller, except as otherwise provided
by applicable California state law.

 [The remainder of
this page intentionally left blank. Signature page to follow.]

32

          The Parties
have executed and delivered this Stock Purchase Agreement as of the date first
written above.

	
 

	
 

	
 

	
 

	
 

	
Buyer:

	
 

	
 

	
 

	
 

	
11 GOOD ENERGY SCIENCES, INC.

	
 

	
 

	
 

	
 

	
By: 

	
 

	
 

	
 

	

	
 

	
 

	
Frederick C.
Berndt, President

	
 

	
 

	
 

	
 

	
Company:

	
 

	
 

	
 

	
 

	
KAI BIOENERGY CORP.

	
 

	

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	

	
 

	
 

	
Mario
Larach, President and CEO

	
 

	
 

	
 

	
 

	

	
 

	
Sellers:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

	
 

	
 

	
 

	
Frank Infelise

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

	
 

	
 

	
 

	
Mario Larach

	
 

	
 

	
 

	
 

	
Seller’s Representative

	
 

	
For purposes
of accepting the appointment as the Sellers’ Representative hereunder:

	
 

	
 

	
 

	
 

	
 

	
Mario
Larach, as Seller’s Representative

Oracle Capital LLC, by executing a copy of this Agreement solely with
respect to Section 2.5, agrees to the provisions contained in Section 2.5
herein.

	
 

	
 

	
 

	
ORACLE CAPITAL LLC

	
 

	
By:  

	
 

	
 

	
 

	

	
 

	
 

	
 (authorized officer)

	
 

11 Good Energy, Inc., by executing a copy of this Agreement, agrees to
provide Buyer with Parent Corporation Common Stock to the extent required under
Sections 2.4 and 2.5 herein, and to unconditionally guarantee all financial and
all performance obligations of the Buyer set forth in this Agreement.

	
 

	
 

	
 

	
Parent Corporation

	
 

	
 

	
 

	
11 GOOD ENERGY, INC.

	
 

	
 

	
 

	
By: 

	
 

	
 

	
 

	

	
 

	
 

	
Frederick C.
Berndt, President

	
 

	
 

	

	

33

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