Document:

Radnóczy
      & Mészáros • NÖRR STIEFENHOFER LUTZ

     

    Cooperation
      Agreement

     

    (hereinafter
      the “Agreement”)

     

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

     

    Kraft
      Elektronikai
      Zártkörűen Működő Részvénytársaság

     

    Headquartered
      in Budapest 1112, Kőérberki
      út 36

     

    -
      hereinafter referred to as “Kraft”–

     

    BudaSolar
      Technológiai
      Korlátolt Felelősségű Társaság.

     

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

     

    -
      hereinafter referred to as “BudaSolar”
      -

     

    Istvan
      Krafcsik,
      an
      individual (“Krafcsik”)
      

     

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

     

    Solar
      Thin Films, Inc.

     

    Headquartered
      in Haddonfield, New Jersey

     

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

     

    Preamble

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Radnóczy
      & Mészáros • NÖRR STIEFENHOFER LUTZ

     

    §
      1 Subject Matter of the Agreement

     

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

     

    §
      2 The Services

     

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

     

    
      	 	
              (a)

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

            

    

     

    
      	 	
              (b)

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

            

    

     

    
      	 	
              (c)

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

            

    

     

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

     

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

     

    
      	 	
              (a)

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

            

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    Radnóczy
      & Mészáros • NÖRR STIEFENHOFER LUTZ

     

    
      	 	
              (b)

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

            

    

     

    
      	 	
              (c)

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

            

    

     

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

     

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

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    Radnóczy
      & Mészáros • NÖRR STIEFENHOFER LUTZ

     

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

     

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

     

    §
      3 Confidentiality

     

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

     

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

     

    §
      4 Remuneration

     

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

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    Radnóczy
      & Mészáros • NÖRR STIEFENHOFER LUTZ

     

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

     

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

     

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

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    Radnóczy
      & Mészáros • NÖRR STIEFENHOFER LUTZ

     

    §
      5 Intellectual Property Rights

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    Radnóczy
      & Mészáros • NÖRR STIEFENHOFER LUTZ

     

    §
      6 Non-solicitation, non-circumvention

     

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

     

    
      	 	
              (a)

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

            

    

     

    
      	 	
              (b)

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

            

    

     

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

     

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

     

    §
      7 Duration of the Agreement

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    Radnóczy
      & Mészáros • NÖRR STIEFENHOFER LUTZ

     

    §
      8 Changes of the Agreement

     

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

     

    §
      9 Severability

     

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

     

    §
      10 Governing law and jurisdiction

     

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

     

    (2) This
      Agreement is subject to Hungarian law. 

     

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

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    Radnóczy
      & Mészáros • NÖRR STIEFENHOFER LUTZ

     

    Date:
      September 29, 2008

     

    KRAFT
      ELEKTRONIKAI ZÁRTKÖRŰEN MŰKÖDŐ RÉSZVÉNYTÁRSASÁG

     

    
      	
              By: 

            	
              /s/
                Peter C. Lewis

            
	 	
              Peter
                C. Lewis, President

            

    

    

    
      	
              BUDASOLAR
                TECHNOLÓGIAI
                KORLÁTOLT FELELŐSSÉGŰ
TÁRSASÁG

            

    

     

    
      
        
          	
                  By: 

                	
                  /s/
                    Istvan Krafcsik

                
	 	
                  Istvan
                    Krafcsik, Managing
                    Director

                

        

        

        
          	
                  /s/
                    Istvan Krafcsik

                
	
                  Istvan
                    Krafcsik

                
	 
	
                  /s/
                    Attila Horvath

                
	
                  Attila
                    Horvath

                
	 
	
                  SOLAR
                    THIN FILMS, INC.

                

        

        

        
          	
                  By: 

                	
                  /s/
                    Peter C. Lewis

                
	
                  
                     

                  

                	
                  Peter
                    Lewis, Chief Executive
                    Officer

                

        

      

    

     

    
      
        
        

      

      
        9FORM
      OF SHAREHOLDERS’ AGREEMENT

    

    THIS
      SHAREHOLDERS’ AGREEMENT
      (the
“Agreement”)
      is
      made and entered into on _______ __, 2008 by and among STF
      TECHNOLOGIES LTD. (f/k/a Kraft Elektronikai Zrt),
      a
      Hungarian corporation (the “Company”),
      and
      the shareholders of the Company (each a “Shareholder”
and
      collectively the “Shareholders”)
      who
      are listed (together with their Affiliates) on Schedule
      A
      attached
      hereto, and any other person(s) or entity(ies) who may hereafter become a party
      to this Agreement.

    

    RECITALS:

    

    WHEREAS,
      the
      Shareholders are the owners of 100% of the common shares and equity of the
      Company (the “Share
      Capital”),
      as
      set forth on Schedule
      A;
      and

    

    WHEREAS,
      the
      Company and the Shareholders wish to enter into this Agreement to document
      their
      agreement and understanding regarding certain restrictions and controls on
      the
      Company and the Share Capital; and

    

    WHEREAS,
      except
      with respect to the Stock Exchange Agreement and any document executed pursuant
      thereto, this Agreement and the terms and covenants contained herein shall
      supersede and take precedence to similar terms and covenants set forth in any
      other agreement between the Company and its Shareholders, including, without
      limitation, any stock purchase agreement or founders stock purchase agreement
      (collectively, the “Prior
      Agreements”).

    

    NOW
      THEREFORE,
      in
      consideration of the foregoing recitals and the mutual covenants and agreements
      contained herein, and for other good and valuable consideration, the receipt
      and
      adequacy of which are hereby acknowledged, the parties hereto, intending to
      be
      legally bound, hereby agree as follows:

     

    ARTICLE
      1 -  CERTAIN
      DEFINITIONS

     

    Section
      1.1 Capitalized
      terms not otherwise defined in this Section 1.1 or elsewhere in this Agreement
      shall have such definition as set forth in the Stock Exchange Agreement. In
      addition, as used in this Agreement the following terms shall have the following
      respective meanings:

     

    (a) “Affiliate”
means,
      with respect to any Person, any other Person directly or indirectly controlling
      (including, but not limited to, all directors and officers of such Person),
      controlled by, or under direct or indirect common control with, such Person.
      A
      Person shall be deemed to control another Person if such Person possesses,
      directly or indirectly, the power to direct or cause the direction of the
      management and policies of such other Person, whether through the ownership
      of
      voting securities, by contract or otherwise. For purposes of Section 2.10
      (Drag-Along
      Rights)
      each
      director, shareholder, general partner, member, officer and employee (to the
      extent applicable) of a Person or the spouse or children of any such director,
      shareholder, general partners, member, officer or employee or a trust of trusts
      solely for the benefit of such director, shareholder, general partner, member,
      officer or employee and/or the spouse or children of such director, shareholder,
      general partner, member, officer or employee shall, in each case, be deemed
      to
      be an Affiliate. 

     

    (b) "Connected
      Person"
      means
      any company controlled by or affiliated with Solar Thin Films, Inc. ("STF")
      the
      parent of the Company and any Person employed by STF or any company controlled
      by or affiliated with STF.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c) “Articles
      of Incorporation”
      means
      the articles of incorporation or memorandum of association representing the
      formation documents of the Company.

     

    (d) "Excess
      Cash"
      means,
      at the end of any financial year of the Company and its Subsidiaries, the
      aggregate amount of cash and marketable securities that are retained by the
      Company and its Subsidiaries which is in
      excess
      of the
      aggregate amount of funds required for the working capital needs of the Company
      and its Subsidiaries, the purchase or lease of capital equipment and other
      related expenditures that are anticipated in good faith by the Board of
      Directors of the Company to be required by the Company and its Subsidiaries
      for
      the next succeeding financial year.

     

    (e) “Gross
      Profit Margin”
means
      the net selling price of the applicable PV Equipment, less“cost
      of
      good sold,” as that term is defined under United States generally accepted
      accounting principles (“US
      GAAP”).

     

    (f) "Liquidity
      Event"
      means an
      initial public offering of the Shares (IPO)

     

    (g) “Offerees”
means
      (i) the Company, and (ii) each of the Shareholders, excluding any Shareholder
      who has caused or initiated the event that results in the offer of the Shares
      to
      the Offerees hereunder. Offerees who are Shareholders are sometimes referred
      to
      herein as “Shareholder
      Offerees.”

     

    (h) “Permitted
      Transfer”
shall
      have the meaning set forth in Section 2.1(c) of this Agreement..

     

    (i) PV
      Equipment”
means
      the machinery, equipment, software and computer hardware required to be
      installed at a PV Facility to enable a Person to manufacture and produce PV
      Modules.

     

    (j) “PV
      Facility”
means
      a
      turn-key manufacturing facility including PV Equipment, converters, land and
      building to enable a Person to produce PV Modules.

     

    (k) “PV
      Modules”
means
      amorphous silicon (“aSi”)
      photovoltaic solar panels or modules capable of producing solar power.

     

    (l) “Qualified
      Appraisers”
means
      any recognized investment bank or business appraisal company selected by the
      Board of Directors of the Company who has not previously rendered financial
      or
      business appraisal services to Solar Thin or who is otherwise acceptable to
      Istvan Krafcsik.

     

    (m) “Shares”
means
      and includes all shares of Share Capital now owned or hereafter acquired by
      any
      Shareholder. For purposes of this Agreement, all of the Shares of Share Capital
      that a Shareholder has a right to acquire from the Company upon conversion,
      exercise or exchange of any of the securities of the Company then owned by
      such
      Shareholder shall be deemed Shares then owned by such Shareholder; provided,
      however,
      that
      for purposes of this Agreement any “Buyer Preference Shares” that may be issued
      pursuant to Section
      2.2
      of the
      Stock Exchange Agreement shall not be deemed to be Shares of Share
      Capital.

     

    (n) “Share
      Capital”
means
      and includes all issued and outstanding common shares and equity of the Company
      and all other securities of the Company which may be issued in exchange for
      or
      in respect of shares of Share Capital (whether by way of stock split, stock
      dividend, combination, reclassification, reorganization, or otherwise) ;
provided,
      however,
      that
      for purposes of this Agreement any “Buyer Preference Shares” that may be issued
      pursuant to Section
      2.2
      of the
      Stock Exchange Agreement shall not be deemed to be Shares of Share
      Capital..

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (o) “Solar
      Thin”
means
      Solar Thin Films, Inc., a Delaware corporation and one of the
      Shareholders.

     

    (p) “Stock
      Exchange Agreement”
means
      that certain stock exchange agreement, dated as of September 29, 2008, by and
      among the Company, Solar Thin Films, Inc., BudaSolar Technologies Co., Ltd.,
      Krafcsik Horvath Holding Ltd., Istvan Krafcsik and Attila Horvath.

     

    (q) "Triggering
      Date”
shall
      mean (i) for Section 2.2(a), the date of the selling Shareholder’s death; (ii)
      for Section 2.3, the date of the occurrence of an event of insolvency; and
      (iii)
      for Section 2.4, the date that the Offer (as defined in Section 2.4(a)) is
      delivered to the Offerees.

     

    ARTICLE
      2 - TRANSFERS

     

    Section
      2.1  General
      Restriction Against Transfer; Permitted Transfers.

     

    (a) Each
      Shareholder covenants and agrees that, except as specifically set forth in
      this
      Article 2 and subject to Section 2.1(b), neither such Shareholder nor such
      Shareholder’s legal representatives or successors shall sell, donate, assign as
      collateral, pledge, hypothecate, mortgage, encumber, allow to be encumbered,
      transfer or otherwise dispose of in any manner whatsoever (each, a “Transfer”)
      any
      Shares.

     

    (b) Any
      attempt to Transfer or to agree to Transfer any Shares in contravention of
      the
      provisions of this Agreement shall be void and shall have no effect. Compliance
      with the provisions of this Agreement shall be a condition precedent to the
      recording or documentation of any Transfer of any Shares in the books and
      records of the Company.

     

    (c) Notwithstanding
      any of the restrictions on Transfer of the Shares contained in this Agreement,
      Transfers of any Shares of the Shareholders to any Affiliate or member of the
      family of any Shareholder, including, without limitation, a Transfer of Shares
      to a trust for the benefit of any of them, shall be permitted (each a
“Permitted
      Transfer”);
      provided,
      however,
      that
      (i) any Shares so Transferred shall continue to be subject to the restrictions
      of this Agreement, (ii) such Transfer does not violate any of the provisions
      of
      this Agreement, and (iii) such Transfer shall not be effective until the
      transferee executes and delivers an agreement in the form supplied by the
      Company whereby such transferee agrees to become a party to this Agreement
      and
      to be bound by each of the terms and conditions of this Agreement. As used
      herein, the word “family”
shall
      mean any spouse, lineal ancestor or descendant, adoptee, brother or
      sister.

     

    (d) Each
      Shareholder hereby agrees that, during the period of duration specified by
      the
      Company and any underwriter, investment banker or nominated advisor of Share
      Capital or other securities of the Company following the effective date of
      a
      registration statement of the Company filed under the United Securities Act
      of
      1933, as amended, or the listing of any Share Capital of the Company on any
      European Union securities exchange, if any, such Shareholder shall not, to
      the
      extent requested by the Company and such underwriter, investment banker or
      nominated advisor, Transfer any securities of the Company held by it at any
      time
      during a period of up to twelve (12) months following the effective date of
      such
      registration statement or listing of Share Capital on any European Union
      securities exchange (as the case may be). In order to enforce the foregoing
      covenant, the Company may impose stop-transfer instructions with respect to
      the
      Shares of each such Shareholder until the end of such period. 

     

    Section
      2.2 Effect
      of Death.
      

     

    (a) Upon
      the
      death of a Shareholder, that Shareholder’s legal inheritor may, but shall not be
      required to, within forty-five (45) days after its legal appointment, offer
      to
      sell to the Offerees, and the Offerees may, but shall not be required to,
      purchase all, but not less than all, of such Shares. 

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (b) Any
      proposed sale or sale under this Section 2.2 shall be made in accordance with
      Section 2.5, Section 2.6, Section 2.7 and Section 2.8.

     

    Section
      2.3 Sale
      Upon Insolvency.
      Each
      Shareholder agrees that upon the occurrence of any of the following events,
      unless excluded by law: (i) a Shareholder’s adjudication as a bankrupt; (ii)
      institution by or against a Shareholder of a petition for arrangement or any
      other type of insolvency proceeding under any bankruptcy law or otherwise;
      (iii)
      a Shareholder’s making of a general assignment for the benefit of such
      Shareholder’s creditors, (iv) the appointment of a receiver or trustee in
      bankruptcy of such Shareholder for any of a Shareholder’s assets; or (v) the
      taking, making or institution of any like or similar act or proceeding involving
      a Shareholder, provided that such event, adjudication, institution, making,
      appointment or similar act or proceeding is not cured or rescinded within ninety
      (90) days (the “Cure
      Period”),
      then,
      at the end of the Cure Period, such Shareholder or such Shareholder’s successor
      or successors in interest shall offer to sell to the Offerees, and the Offerees
      may, but shall not be required to, purchase all, but not less than all, of
      such
      Shareholder’s Shares and such sale shall be made in accordance with Section 2.5,
      Section 2.6, Section 2.7 and Section 2.8.

     

    Section
      2.4 Right
      of First Refusal.
      

     

    (a) Notwithstanding
      any other provision of this Agreement, if at any time any Shareholder desires
      to
      sell for cash or cash equivalents all or any portion of its Shares pursuant
      to a
      bona fide offer from a third party who is not an Affiliate (for the purposes
      of
      this Section 2.4, the “Proposed
      Transferee”),
      such
      selling Shareholder shall submit a written offer (the “Offer”)
      to
      sell such Shares (the “Offered
      Shares”)
      to the
      Offerees on terms and conditions, including price, not less favorable to the
      Offerees than those on which the selling Shareholder proposes to sell such
      Offered Shares to the Proposed Transferee. The Offer shall disclose the identity
      of the Proposed Transferee, the Offered Shares proposed to be sold, the total
      number of Shares owned by the selling Shareholder, the terms and conditions,
      including price, of the proposed sale, and any other material facts relating
      to
      the proposed sale. The Company may appoint a third party or a Shareholder to
      exercise the right to purchase the Offered Shares by delivering written notice
      to the selling Shareholder. Any sale proposed or made under this Section 2.4
      shall be made in accordance with Section 2.5, Section 2.6 and Section
      2.8.

     

    (b) The
      Shareholders’ right of refusal provided in this Section 2.4 shall not apply with
      respect to: 

     

    (i) the
      occurrence of any Liquidity Event, or 

     

    (ii) any
      redemption of Shares or sales of Shares by a Shareholder to the Company in
      a
      transaction approved by the Board of Directors of the Company; 

     

    (iii) any
      Permitted Transfer.

     

    Section
      2.5 Option
      Period; Effecting Election.

     

    (a) Option
      Period.
      For each
      proposed purchase of Shares by the Offerees made pursuant to Section 2.2,
      Section 2.3 or Section 2.4, the Company shall have the first option to purchase
      all or any portion of such Shares. The Company shall have thirty (30) days
      (the
“Company
      Option Period”)
      from
      the effective Triggering Date to consummate such a sale. If the Company does
      not
      consummate any such sale within the Company Option Period, the Shareholder
      Offerees shall then have an additional thirty (30) day period (the “Shareholder
      Offerees’ Option Period”)
      (beginning on the day following the expiration of the Company Option Period)
      during which they may consummate the purchase of the applicable Shares. The
      Company Option Period and the Shareholder Offerees’ Option Period are
      collectively referred to herein as the “Option
      Periods.”
If
      any
      such Share purchase is not consummated by either the Company or the Shareholder
      Offerees within the applicable Option Period, the Shares may be sold to a third
      party or otherwise transferred, as applicable, by the Shareholder or his legal
      representative, as applicable. Any purchase made by the Company and the
      Shareholder Offerees under this Agreement shall result in all of the applicable
      Shares being purchased, but the Company and the Shareholder Offerees may divide
      the Shares purchased between themselves in any proportions that they desire
      in
      their sole discretion; provided,
      however,
      that
      each Shareholder Offeree shall have the right to purchase at least that
      Shareholder Offeree’s pro rata share of the Shares available for purchase by all
      of the Shareholder Offerees. This pro rata share shall be calculated for each
      Shareholder Offeree based on each Shareholder Offeree’s ownership of Shares (as
      a percentage of all of the Shares owned by all of the Shareholder Offerees).
      If
      a Shareholder Offeree declines to purchase his pro rata share, the other
      Shareholder Offerees may purchase any such remaining Shares based on their
      pro
      rata share of these remaining Shares (excluding any shares owned by the
      Shareholder Offeree who declined to purchase his pro rata share in the initial
      Shareholder Offeree purchase).

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (b) Effecting
      Election.
      Election
      by the Company or the Shareholder Offerees to purchase Shares offered for sale
      pursuant to this Agreement shall be effected by sending written notice of such
      election to such offering Shareholder or such offering Shareholder’s
      representative (as applicable) prior to the expiration of the applicable Option
      Period.

     

    Section
      2.6 Effect
      of Failure to Elect to Purchase All Shares. 

     

    (a) If
      the
      Offerees do not elect to purchase all of the Shares offered for sale by an
      offering Shareholder (or its legal inheritor or representative) pursuant to
      Section 2.2 or Section 2.3, all of the offering Shareholder’s Shares shall
      continue to be owned by such Shareholder (or his legal representative, as
      applicable). Such Shares may be transferred as contemplated by the Shareholder
      (or legal representative), but such Shares will at all times continue to be
      subject to the restrictions of this Agreement and no such Transfer will be
      effective until each proposed transferee executes and delivers a counterpart
      of
      this Agreement. 

     

    (b) If
      the
      Offerees do not elect to purchase all of the Shares offered for sale by an
      offering Shareholder pursuant to Section 2.4, all, but not less than all, of
      the
      offering Shareholder’s Shares may be transferred to the bona fide offeror
      pursuant to the terms of the bona fide offer within sixty (60) days following
      the expiration of the Shareholder Offerees’ Option Period; provided,
      however,
      that
      any Shares so transferred shall continue to be subject to the restrictions
      of
      this Agreement and such Transfer shall not be effective until the transferee
      executes and delivers a counterpart of this Agreement. If all of the offering
      Shareholder’s Shares are not transferred within such 60-day period, such Shares
      shall again become subject to the restrictions contained in this Agreement
      and
      shall not be transferred except in accordance with the terms and conditions
      of
      this Agreement.

     

    Section
      2.7  Purchase
      Price.
      Except
      as
      provided in Section 2.4 of this Agreement, the “Purchase
      Price”
per
      share of the Shares proposed for Transfer or Transferred shall be determined
      as
      of the last equity offering of the Company and being equal to the price per
      share pursuant to the last equity offering, provided such equity offering of
      the
      Company was consummated within a six (6) month period of the proposed Transfer
      and with parties who are not Affiliates of the Company or any Shareholder,
      or in
      absence of an equity offering within the said six (6) month period, by the
      written concurrence of a Qualified Appraiser. The Qualified Appraiser shall
      be
      chosen within five (5) business days after the Triggering Date. The Company
      shall pay the costs and expenses of the Qualified Appraiser. The Qualified
      Appraiser shall develop a fair market value determination of the Company’s
      value, and this shall become the final and binding Purchase Price. The Qualified
      Appraiser must be firm or individual with previous background and experience
      in
      the valuation and appraisal of corporations, which are similar in size, industry
      and financial condition to the Company. The Qualified Appraiser shall deliver
      a
      written report to all parties (which documents it’s determination of the
      Purchase Price, along with a sufficiently detailed description of the
      methodologies, assumptions and procedures used) within thirty (30) days after
      the designation of the Qualified Appraiser. However, the Purchase Price to
      be
      determined under this Section 2.7 shall not be less than the price offered
      on a
      firm basis for all and not less than all of the Shares by a bona fide third
      party buyer who is not an Affiliate of the Company or of any
      Shareholder.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    Section
      2.8 Closing;
      Payment.

     

    (a) The
      closing ("Closing")
      of any
      sale of a Shareholder’s Shares to an Offeree pursuant to Section 2.2 or Section
      2.3 shall take place at the office of the Company at any point prior to the
      expiration of the applicable Option Period or in the event of a sale under
      Section 2.4, on the sixtieth (60th)
      business day following the date the Offer was made. The certificate or
      certificates representing the Shares to be purchased by the Offerees, properly
      endorsed for transfer or with an executed stock power attached, shall be
      delivered at the Closing free and clear of all liens, security interests,
      pledges, charges or other encumbrances of any nature whatsoever, except for
      the
      rights of the Offerees set forth in this Agreement, against the payment of
      the
      purchase price therefore, unless otherwise agreed by the Parties of the Purchase
      and accepted by the other Shareholders and the company in written form.
      .

     

    (b) The
      Purchase Price for any purchase of Shares by the Company under this Agreement
      shall be made exclusively in cash. 

     

    (c) Notwithstanding
      any other provision of this Section 2.8, if an Offeree is purchasing the Shares
      pursuant to Section 2.4 and is paying the purchase price set forth in the bona
      fide offer, the purchase price shall be paid in accordance with the terms and
      conditions contained in the bona fide offer. 

     

    Section
      2.9 Failure
      to Deliver Shares.
      If a
      Shareholder (for the purposes of this Section 2.9, an “Obligated
      Shareholder”)
      becomes obligated to sell any Shares to any Offeree hereunder, as determined
      by
      a final nonappealable order from a court of competent jurisdiction, and fails
      to
      deliver such Shares in accordance with the terms of this Agreement, the Offeree
      may, at its option, in addition to all other remedies it may have, send to
      the
      Obligated Shareholder the Purchase Price for such Shares. Upon receipt of a
      final nonappealable order from a court of competent jurisdiction, the Company,
      upon written notice to the Obligated Shareholder shall (i) cancel on its books
      the certificate or certificates representing the Shares to be sold and (ii)
      shall issue, in lieu thereof; in the name of the Offeree, a new certificate
      or
      certificates representing such Shares, and all of the Obligated Shareholder’s
      rights in and to such Shares shall immediately terminate.

     

    Section
      2.10 Tag-Along
      Rights. 

     

    (a) If
      at any
      time any of the Shareholders, whether alone or together by agreement, contract
      or understanding (for the purposes of this Section 2.10, each a “Selling
      Party”)
      wishes
      to sell any Shares owned by it in a single transaction or series of related
      transactions equaling forty percent (40%) or more of all of the Share Capital
      of
      the Company then issued and outstanding (on a fully-diluted basis counting
      all
      issued options, warrants and convertible securities) to any third party (other
      than to a permitted transferee of such Selling Party in connection with a
      Permitted Transfer or any other Shareholder (see Section 2.12)) (for the
      purposes of this Section 2.10, the “Purchaser”),
      and
      the Selling Party has complied with all of the other requirements of this
      Agreement, the Selling Party shall cause a written notice of the offer by the
      Purchaser to purchase such Shares (a “Tag-Along
      Notice”)
      to be
      delivered to each of the other Shareholders (each a “Tag-Along
      Shareholder”),
      setting forth the price per Share to be paid by the Purchaser, the identity
      of
      the Purchaser and the other principal terms and conditions of the Purchaser’s
      offer to purchase such Shares, and each Shareholder shall have the right to
      offer for sale to the Purchaser, as a condition of such sale by the Selling
      Party, the same proportion of the Shares then held by such Shareholder as the
      proposed sale represents with respect to the total number of Shares that the
      Selling Party owns or has the right to acquire pursuant to outstanding options,
      warrants or convertible securities, at the same price per Share and on the
      same
      terms and conditions as involved in such sale by the Selling Party. Each
      Shareholder shall notify the Selling Party of its intention to sell its Shares
      pursuant to this Section 2.10 as soon as practicable after receipt of the
      Tag-Along Notice, but in no event later than thirty (30) days after receipt
      thereof. 

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (b) In
      the
      event that any Shareholder elects to sell its pro rata portion to the Purchaser,
      the Tag-Along Shareholders shall not be obligated to execute and deliver any
      document which (A) requires such Tag-Along Shareholder to make representations
      or warrants regarding any aspect whatsoever of the business or prospects of
      the
      Company and/or its Subsidiaries, (B) would subject such Tag-Along Shareholder
      to
      restrictive covenants, or (C) requires such Tag-Along Shareholder to be
      obligated for any indemnification or other obligations other than (so long
      as
      the Selling Party(s) do at least the same) (1) the obligation to join on a
      pro-rata basis (but not on a joint and several basis), based on its respective
      share of the aggregate proceeds paid by the Purchaser (but only up to the amount
      of net proceeds actually received by such Tag-Along Shareholder in the sale),
      in
      any indemnification that the Selling Party(s) have agreed to, and (2) any such
      obligations that relate specifically to a particular Shareholder such as
      indemnification with respect to representations and warranties given by a
      Shareholder regarding such Shareholder’s title to and ownership of Shares.

     

    (c) The
      Selling Party and each other Shareholder intending to sell Shares hereunder
      shall sell to the Purchaser all, or at the option of the Purchaser, any part
      of
      the Shares proposed to be sold by them at not less than the price per Share
      and
      upon other terms and conditions, if any, not more favorable to the Purchaser
      than those set forth in the Tag-Along Notice; provided,
      however,
      that
      any purchase of less than all of such Shares by the Purchaser shall be made
      from
      the Selling Party and each other Shareholder intending to sell Shares hereunder
      pro rata based upon the number of Shares then held by the Selling Party and
      each
      such other Shareholder electing to sell to the Purchaser (calculated on a fully
      diluted basis).

     

    (d)
      Tag-along rights under this section 2.10 shall not be applied in the event
      of
      the Buy-out Rights under Section 8.5 or the call Option Right under Section
      8.6
      of the Share Purchase Agreement are exercised.

     

    Section
      2.11 Drag-Along
      Rights.

     

    (a) At
      any
      time commencing on or after May 1, 2014, if one or more Shareholders (for the
      purposes of this Section 2.11, the “Initiating
      Shareholders”)
      owning
      at least a majority of the issued and outstanding Share Capital of the Company
      (on a fully-diluted basis counting all issued options, warrants and convertible
      securities) may, in connection with a bona fide cash offer (a “Drag-Along
      Offer”)
      by a
      third party who is not an Affiliate of the Company or any Shareholders (for
      the
      purposes of this Section 2.11, a “Third
      Party”)
      to
      acquire all of the then outstanding Shares or all or substantially all of the
      assets or businesses of the Company (no matter how the transaction may be
      structured), require each other Shareholder (each a “Drag-Along
      Shareholder”)
      to
      sell to such Third Party all of the Shares then held by such Shareholder or
      to
      vote their Shares in favor of such transaction if other than a sale of Shares
      as
      provided below;
      provided, however, that: (i) the Drag-Along Shareholders shall not be obligated
      to execute and deliver any document which (A) requires such to make
      representations or warrants regarding any aspect whatsoever of the business
      or
      prospects of the Company and/or its Subsidiaries, provided that such Drag-Along
      Shareholders (so long as the Initiating Shareholders do at least the same),
      shall make representations and warranties to the effect that (x) such Drag-Along
      Shareholder is the legal and beneficial owner(s) of the securities being sold
      in
      the sale, free and clear of all liens, claims, security interests, restrictions,
      agreements of sale or other encumbrances (other than any imposed by this
      Agreement, as amended and restated, and (y) such Drag-Along Shareholder has
      the
      capacity or power and authority to effect such sale), (B) would subject
      such to
      restrictive covenants, or (C) requires such Drag-Along Shareholder to be
      obligated for any indemnification or other obligations other than (so long
      as
      the Initiating Shareholders do at least the same) (1) the obligation to join
      on
      a pro-rata basis (but not on a joint and several basis), based on its respective
      share of the aggregate proceeds paid by the purchaser in such sale (but only
      up
      to the amount of net proceeds actually received by such Drag-Along Shareholder
      in the sale), in any indemnification that the Initiating Shareholders have
      agreed to, and (2) any such obligations that relate specifically to a particular
      Shareholder such as indemnification with respect to representations and
      warranties given by a Shareholder regarding such Shareholder’s title to and
      ownership; (ii) if the Initiating Shareholders elect to exercise their rights
      under this Section 2.11(a), such Drag-Along Shareholder receives cash in such
      sale. If the Initiating Shareholders elect to exercise their right to compel
      a
      sale pursuant to this Section 2.11, the Initiating Shareholders will cause
      a
      written notice of the Drag-Along Offer (the “Drag-Along
      Notice”)
      to be
      delivered to each of the other Shareholders, setting forth the aggregate
      consideration, the identity of the Third Party and the other principal terms
      and
      conditions thereof. 

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (b) The
      Initiating Shareholders will have one hundred twenty (120) days from the date
      the Drag-Along Notice is given to the other Shareholders to consummate the
      sale
      to the Third Party, at the price and on the terms substantially similar to
      those
      set forth in such Drag-Along Notice, of all of the Shares subject to the
      Drag-Along Offer pursuant to Section 2.11(a). If the sale to the Third Party
      is
      not completed during such one hundred twenty (120) day period, then the other
      Shareholders will be released from their obligations with respect to such
      Drag-Along Notice (but not future Drag-Along transactions).

     

    (c) Subject
      to Section 2.11(b), each Shareholder agrees to cast all votes to which such
      Shareholder is entitled in respect of its Shares, whether at any annual or
      special meeting, by written consent or otherwise, in the same proportion as
      Shares are voted by the Initiating Shareholders to approve any transaction
      or
      series of transactions in connection with which the Initiating Shareholders
      exercise their rights in this Section 2.11 (including, without limitation,
      any
      recapitalization, merger, consolidation, reorganization or sale of all or
      substantially all of the assets of the Company).

     

    Section
      2.12 Buy-out
      Right. 
      Notwithstanding anything to the contrary, express or implied, contained in
      this
      Agreement, NPI, Istvan Krafcsik and Attila Horvath or their Permitted
      Transferees (collectively, the “Minority
      Shareholders”)
      shall
      have the right to sell their Minority Interest to STF (the “Buy-out
      Right”),
      all
      upon the terms and conditions set forth in Section
      8.5
      of the
      Stock Exchange Agreement.

     

    Section
      2.13 Call
      Option Right. Notwithstanding
      anything to the contrary, express or implied, contained in this Agreement,
      STF
      shall have the right, but not the obligation, to acquire 100% of the Minority
      Interest from the Minority Stockholders (the “Call
      Option”),
      under
      the terms and conditions set forth in Section
      8.6
      of the
      Stock Exchange Agreement.

     

    ARTICLE
      3 -  CORPORATE
      GOVERNANCE AND AGREEMENTS

     

    Section
      3.1 Major
      Decisions, Competing Business Ventures and Affiliated
      Sales.

     

    (a) Major
      Decisions. The
      events listed on Exhibit
      A
      hereto
      are deemed to be “Major
      Decisions”
for
      the
      Company. Notwithstanding any other provision of this Agreement, the Company’s
      Articles of Incorporation, and except as otherwise prohibited by applicable
      law,
      for so long as the Buy-out Right referred to in Section
      2.12
      of this
      Agreement and provided for in Section
      8.5
      of the
      Stock Exchange Agreement shall remain in force and effect, the approval of
      any
      Major Decision shall require the affirmative vote of each of those Shareholders
      listed on Schedule
      A
      who hold
      at least twenty (20%) percent of
      the
      total issued and outstanding Share Capital of the Company. The only Shareholders
      empowered to vote on Major Decisions are those persons or entity listed in
      Schedule
      A.
      In the
      event a decision from a Shareholder is not forthcoming within a period of ten
      (10) business days (as recognized in Hungary) then such Shareholder shall be
      deemed to have accepted the Major Decision approved or ratified by the Board
      of
      Directors or other Shareholders. Each Shareholder has the right at any time
      to
      remove and to replace its representative to vote on Major Decisions pursuant
      to
      prior written notification to the Company and to the Shareholders. 

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (b) Competing
      Business Ventures. Notwithstanding
      anything to the contrary contained in this Agreement, the Stock Exchange
      Agreement or in the respective employment agreements dated of even date herewith
      between the Company and István Krafcsik and Attila Horváth (the “Executive
      Employment Agreements”),
      in
      the event that Solar Thin shall, at any time or from time to time, seek to
      acquire or establish, directly, through any Subsidiary (other than the Company)
      or in connection with joint ventures with Persons who are not Affiliates of
      Solar Thin, one or more PV Facilities to manufacture PV Equipment that produce
      PV Modules (a “Competing
      Business Venture”),
      Solar
      Thin shall first comply with the following procedures:

     

    (i) Solar
      Thin shall present full details of the business opportunity relating to the
      Competing Business Venture to the board of directors of the
      Company;

     

    (ii) if
      and to
      the extent that capital or other funding for the business opportunity relating
      to the Competing Business Venture shall be required, if available in the
      Company, the Company shall provide such capital or funding; and

     

    (iii) if
      the
      Company is unable provide such capital or funding, the same shall be provided
      by
      the Shareholders in proportion to their individual ownership of the
      Shares.

     

    Subject
      to the foregoing procedures, if New Palace Investments Ltd., a Cyprus
      corporation 100% owned by István Krafcsik and Attila Horváth (“NPI”),
      acting through Istvan Krafcsik in accordance with Schedule
      A hereto,
      pursuant to a Major Decision shall determine that the Company shall not proceed
      with or invest in such Competing Business Venture, in and in such event, Solar
      Thin may engage in such Competing Business Venture directly itself, through
      any
      Subsidiary (other than the Company) or in connection with joint ventures with
      Persons who are not Affiliates of Solar Thin; provided,
      that:

     

    (A) the
      Company and the Person established to engage in such Competing Business Venture
      shall enter into a non-exclusive technology transfer and license agreement
      with
      the Company pursuant to which the Company will provide certain mutually agreed
      upon technology, personnel expertise, know-how, installation, start-up services
      and other intellectual property to such Person, all upon such arms length terms
      and conditions as shall be comparable to any similar arrangement entered into
      with any Person who is not Affiliated with Solar Thin; and

     

    (B) if
      such
      Competing Business Venture shall consist of a joint venture or similar
      arrangement with any Person who is not an Affiliate of Solar Thin or its
      Subsidiaries: 

     

    (1) at
      or
      immediately following the closing of such Competing Business Venture, Solar
      Thin
      shall assign directly to István Krafcsik and Attila Horváth or NPI, a percentage
      of the 100% of the equity or earnings and profits of the joint venture or other
      entity established to engage in such Competing Business Venture that is owned
      or
      made available to Solar Thin (the “Available
      Solar Thin Equity”)
      which
      shall be equal to the same percentage by which the Share Capital of István
      Krafcsik and Attila Horváth or NPI then owned in the Company bears to 100% of
      the outstanding Share Capital of the Company (the “Minority
      Shareholders’ Equity”);
      and

     

    (2) The
      Minority Shareholders Equity in any Competing Business Venture shall be
      convertible at any time, at the option of István Krafcsik and Attila Horváth or
      NPI (as applicable) shares of common stock of Solar Thin at a conversion price
      equal to 100% of the average of the closing prices of Solar Thin’s common stock
      for the 10 trading days immediately prior to the date notice of conversion
      is
      given. 

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    For
      the
      avoidance of doubt, if (i) the Available Solar Thin Equity in such Competing
      Business Venture shall be 40% of 100% of the equity or earnings and profits
      of
      the joint venture or other entity established to engage in such Competing
      Business Venture, and (ii) István Krafcsik and Attila Horváth or NPI then own
      40% of the Share Capital of the Company, then and in such event, the Minority
      Shareholders’ Equity in such Competing Business Venture shall be 16% of 100% of
      the equity or earnings and profits of the joint venture or other entity
      established to engage in such Competing Business Venture.

     

    (c) Affiliated
      Equipment Purchasers. In
      the
      event that Solar Thin or any Subsidiary or Affiliate of Solar Thin (other than
      the Company or its Subsidiaries) in which Solar Thin or such Subsidiary or
      Affiliate shall own not less than thirty-three and one-third percent (33-1/3%)
      of the equity or earnings and profits, shall engage in the sale of PV Modules,
      such Person(s) (an “Affiliated
      Equipment Purchaser”)
      shall
      have the right to purchase PV Equipment from the Company at a price equal to
      80%
      of the Gross Profit Margin that is then being received by the Company for sales
      of similar quantities of PV Equipment to Persons who are not Affiliates
      (“Comparable
      Sales”);
      provided, that such Gross Profit Margin shall not be less than the sum of (i)
      cost of goods sold (as determined in accordance with US GAAP), plus 25%. In
      addition, unless otherwise agreed as a Major Decision, not more than thirty
      percent (30%) of the Company’s annual production of PV Equipment will be
      delivered to such Affiliated Equipment Purchasers at the prices and terms and
      conditions set forth herein. In such connection, Solar Thin has advised István
      Krafcsik and Attila Horváth that it intends to establish a PV Facility to
      manufacture PV Modules in Ulster County, New York and in connection therewith
      intends to purchase PV Equipment from the Company.

     

    (d) Other
      Solar Thin Activities. Notwithstanding
      anything to the contrary contained in this Agreement, the Stock Exchange
      Agreement or in the Executive Employment Agreements, except for a Competing
      Business Venture (which shall be subject to the provisions of Section
      3.1(b)
      above),
      Solar Thin shall have the absolute right at any time, or from time to time,
      to
      engage, either directly or through any Subsidiary or Affiliate other than the
      Company or its Subsidiaries) or in connection with any acquisition, joint
      venture or related arrangement with any other Person in any business activity,
      including, without limitation, (i) the manufacture and production of PV Modules
      or other photovoltaic modules using crystalline technologies, copper indium
      gallium diselenide (“CIGS”)
      technologies, or any other production methods, (ii) other than PV Equipment
      to
      produce PV Modules, the manufacture and production of equipment to manufacture
      and produce photovoltaic modules using crystalline technologies, CIGS
      technologies, or any other production methods, (iii) the establishment of power
      plants or related power facilities; in each case, without being obligated to
      first offer such business opportunity to the Company or to any other
      Shareholder.

     

    Section
      3.2 Board
      Seat and Voting. The
      number of members of the Board of Directors of the Company shall be not less
      than five (5) persons. For a period equal to the greater of (a) the duration
      of
      their employment as senior executive officers of the Company, or (b) their
      direct or indirect ownership of not less than 20% of the share capital of the
      Company (in case any shares owned by any affiliate or family member such shares
      shall be deemed as owned by István Krafcsik and Attila Horváth), Istvan Krafcsik
      and Attila Horvath shall be entitled to serve as directors of the Company and
      its Subsidiaries (as defined in the Stock Exchange Agreement) following the
      Closing Date of the transactions under the Stock Exchange Agreement. STF shall
      designate a majority of the members of the Board of Directors of the Company
      and
      its Subsidiaries following the Closing Date of the transactions under the Stock
      Exchange Agreement. The initial directors designated by STF shall be Robert
      M.
      Rubin (who shall serve as Chairman of the Board), Peter Lewis and Dr. Miles
      Galin. All members of the Board of Directors of the Company and its Subsidiaries
      shall continue to serve in such capacities until the earlier of their
      resignation or removal or until their respective successors are duly elected
      and
      qualified, as the case may be. In the event of the death or inability of either
      Krafcsik or Horvath to serve as members of the Board of Directors of the Company
      and Subsidiaries, the remaining member of them may designate the second director
      who shall serve for the period as set forth above. 

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    Section
      3.3 Officers. Istvan
      Krafcsik shall be appointed as President and Attila Horvath shall be appointed
      as Chief Operating Officer of the Company and as Managing Director and Chief
      Operating Officer, respectively, of the Company’s Subsidiary until the earlier
      of their resignation or removal or until their respective successors are duly
      elected and qualified, as the case may be.

     

    Section
      3.4 Related
      Party Transactions. The
      Company shall not enter into, amend, modify or supplement, or permit any
      Subsidiary to enter into, amend, modify or supplement, any agreement,
      transaction, commitment or arrangement with any of the Shareholders, or other
      Affiliate of a Shareholder or with
      any
      individual related by blood, marriage or adoption to any such Person, except
      on
      terms that are fair and reasonable to the Company and its Subsidiaries and
      at
      prevailing market rates.

     

    Section
      3.5 Dividend
      Policy.
      Unless
      otherwise agreed by the Shareholders as a Major Decision, the Company shall
      distribute to Shareholders not later than 90 days after the end of each
      financial year any Excess Cash. 

     

    Section
      3.6 Working
      Capital Funding Policy. 

     

    (a) In
      the
      event and to the extent that the Company and/or its wholly owned subsidiary
      BudaSolar Technologies Kft. requires working capital in addition to the
      $3,000,000 provided by Solar Thin under the Stock Exchange Agreement, Solar
      Thin
      shall undertake in good faith (but shall not be legally obligated) to furnish
      such additional working capital, either directly as a loan from Solar Thin
      to
      the Company or through a financing arranged by Solar Thin directly for the
      Company. In such case, the terms and conditions of such additional funding
      made
      or arranged by Solar Thin, shall be deemed to be a loan with interest calculated
      at a rate per annum equal to the greater of (a) 8% or (b) the actual annual
      interest rate being charged to Solar Thin or its Affiliate by any unaffiliated
      Person lending such amount of money to Solar Thin or its Affiliate (other than
      the Company) that Solar Thin or such Affiliate then lends to the Company or
      its
      Subsidiaries. All other terms and conditions of such working capital loan
      (including repayment terms) shall be approved as a Major Decision by the
      Shareholders and shall be subject to the provisions of Section
      3.1
      of this
      Agreement.

     

    (b) The
      provisions of Section
      3.6(a) shall
      not
      be applicable to a Competing Business Venture which shall be governed by the
      provisions of Section
      3.1(b)
      of this
      Agreement.

     

    ARTICLE
      4 - GENERAL
      PROVISIONS

     

    Section
      4.1 Notices.
      Except
      as expressly set forth to the contrary in this Agreement, all notices, requests,
      or consents provided for or permitted to be given under this Agreement must
      be
      in writing and delivered by (a) personal delivery, or (b) a nationally
      recognized overnight courier delivery service (such as Federal Express, UPS,
      DHL, or USPS Express Mail) and a notice, request, or consent given under this
      Agreement is effective on receipt by the Person to receive it. All notices,
      requests, and consents to be sent to the Company or a Shareholder must be sent
      to or made at the appropriate address as held by the Company, or to such other
      address as is specified by written notice to all parties hereto. Whenever any
      notice is required to be given by law or this Agreement, a written waiver
      thereof, signed by the person entitled to notice, whether before or after the
      time stated therein, will be deemed equivalent to the giving of such
      notice.

     

    Section
      4.2 Entire
      Agreement.
      This
      Agreement constitutes the entire agreement among the Company and the
      Shareholders relating to the matters contained herein and supersedes all prior
      similar contracts or agreements with respect to the Company or the Shares,
      whether oral or written, other than the provisions of the Securities Exchange
      Agreement, the Company’s Restated Articles of Incorporation or any documents
      executed pursuant thereto.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    Section
      4.3 Effect
      of Waiver or Consent.
      A waiver
      or consent, express or implied, of any breach or default by any person in the
      performance of its obligations with respect to the Company is not a consent
      or
      waiver of any other breach or default in the performance by that person of
      the
      same or any other obligations of that person with respect to the Company.
      Failure on the part of a person to complain of any act or omission of any person
      or to declare any person in breach or default with respect to the Company,
      irrespective of how long that failure continues, does not constitute a waiver
      by
      that person of its rights with respect to that default.

     

    Section
      4.4 Amendment
      or Modification.
      This
      Agreement may be amended or modified from time to time only by the written
      consent of the Company and by a writing signed by the Company and all of the
      Shareholders. 

     

    Section
      4.5 Binding
      Effect.
      Subject
      to the restrictions on Transfer set forth Article 2, this Agreement is binding
      on and inures to the benefit of the Shareholders and their respective heirs,
      legal representatives, successors, and assigns.

     

    Section
      4.6 Governing
      Law. Arbitration; Jurisdiction. 
      This
      Agreement and the legal relations among the parties hereto shall be governed
      by
      and construed in accordance with the laws of the State of New York, without
      giving effect to any principles of conflicts of laws. Any provision of this
      Agreement prohibited by the laws of the State of New York shall be ineffective
      to the extent of such prohibition without invalidating the remaining provisions
      of this Agreement.

     

    (b) All
      disputes, claims or controversies arising out of or relating to this Agreement,
      or any agreement executed and delivered pursuant hereto, or the negotiation,
      breach, validity or performance hereof, or the transactions contemplated hereby
      which cannot be resolved by good faith negotiations, shall be exclusively
      submitted to final and binding arbitration in London England before a panel
      of
      three arbitrators appointed by the International Chamber of Commerce;
provided,
      that
      if any
      party has no adequate remedy at law he or it may seek emergency injunctive
      relief or specific performance before any court of competent jurisdiction in
      Hungary or the United States. The decision and award of the arbitrators shall
      be
      enforceable in any court of competent jurisdiction in the United States and
      Hungary. 

     

    (c) The
      parties covenant and agree that the arbitration shall commence within ninety
      (90) days of the date on which a written demand for arbitration is filed by
      any
      party hereto. In connection with the arbitration proceeding, the arbitrators
      shall have the power to order the production of documents by each party and
      any
      third-party witnesses. In connection with any arbitration, each party shall
      provide to the other, no later than seven (7) business days before the date
      of
      the arbitration, the identity of all persons that may testify at the arbitration
      and a copy of all documents that may be introduced at the arbitration or
      considered or used by a party’s witness or expert. The arbitrators’ decision and
      award shall be made and delivered within six (6) months of the selection of
      the
      arbitrators. The arbitrators’ decision shall set forth a reasoned basis for any
      award of damages or finding of liability. The arbitrators shall not have power
      to award damages in excess of actual compensatory damages and shall not multiply
      actual damages or award punitive damages or any other damages that are
      specifically excluded under this Agreement, and each party hereby irrevocably
      waives any claim to such damages.

     

    (d) The
      parties covenant and agree that they will participate in the arbitration in
      good
      faith and that they will, except as provided below, (A) bear their own
      attorneys’ fees, costs and expenses in connection with the arbitration, and
      (B) share equally in the fees and expenses charged by the arbitrators. The
      arbitrators may in their discretion assess costs and expenses (including the
      reasonable legal fees and expenses of the prevailing party) against any party
      to
      the proceeding. Any party unsuccessfully refusing to comply with an order of
      the
      arbitrators shall be liable for costs and expenses, including attorneys’ fees,
      incurred by the other party in enforcing the award. This Section 4.10 applies
      equally to requests for temporary, preliminary or permanent injunctive relief,
      except that in the case of temporary or preliminary injunctive relief any party
      may proceed in court without prior arbitration for the purpose of avoiding
      immediate and irreparable harm or to enforce its rights under any
      non-competition covenants.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    Section
      4.7 Further
      Assurances.
      In
      connection with this Agreement and the transactions contemplated hereby, each
      Shareholder will execute and deliver any additional documents and instruments
      and perform any additional acts necessary or appropriate to effectuate and
      perform the provisions of this Agreement and those transactions.

     

    Section
      4.8 Offset.
      Whenever
      the Company is to pay any sum to any Shareholder, any amounts that that
      Shareholder owes to the Company may be offset against and deducted from that
      sum
      before payment.

     

    Section
      4.9 Severability.
       Should
      any part of this Agreement be rendered or declared invalid, illegal or
      unenforceable in part of in whole, such invalidation of such part or portion
      of
      this Agreement should not invalidate the remaining provisions thereof, and
      they
      shall remain in full force and effect. This regulation is respectively
      applicable to any gap in the regulation of this Agreement arising during the
      interpretation or fulfilment thereof. It is further agreed that if part of
      the
      Agreement is determined invalid, either party may open negotiations solely
      with
      respect to a substitute for such Article, Section, or portion.

     

    Section
      4.10 Counterparts.
      This
      Agreement may be executed in multiple counterparts with the same effect as
      if
      all signing parties had signed the same document. All counterparts when signed
      and assembled together will constitute a single, fully-executed
      instrument.

     

    Section
      4.11 Incorporation
      of Recitals, Schedules and Exhibits.
      All of
      the Recitals stated at the beginning of this Agreement and all of the Schedules
      and Exhibits attached hereto are hereby incorporated by reference into and
      made
      a part of this Agreement.

     

    Section
      4.12 Acknowledgments
      By Shareholders and the Company.
      By
      executing this Agreement, each Shareholder and the Company acknowledges and
      agrees that it (i) has actual notice of all of the provisions of this Agreement,
      including, without limitation, the restrictions on the transfer of Shares,
      (ii)
      has received copies of and has read and reviewed the Company’s Articles of
      Incorporation and Bylaws, and (iii) was strongly encouraged by the Company
      to
      obtain individual legal counsel before signing this Agreement. Each Shareholder
      hereby agrees that this Agreement constitutes adequate notice of all such
      provisions, and each Shareholder hereby waives any requirement that any further
      notice as required by any provision of Hungarian law or otherwise should be
      given.

     

    [Balance
      of this page intentionally left blank - signature page
      follows]

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      the
      undersigned parties have executed this Shareholders’ Agreement effective as of
      the date first set forth above.

    

    
      	
              STF
                TECHNOLOGIES
                LTD.

	 
	 
	
              By:

            	 
	
              Name:

            	 
	
              Title:

            	 
	 
	
              SHAREHOLDERS:

            
	 
	
              SOLAR
                THIN FILMS, INC.

            
	 
	 
	
              By:

            	 
	
              Name:
                

            	
              Peter
                C. Lewis

            
	
              Title:
                

            	
              President

            
	 
	
              NEW
                PALACE INVESTMENTS LTD.

            
	 
	 
	
              By:

            	 
	
              Name:
                

            	
              Istvan
                Krafcsik

            
	
              Title:
                

            	
              President
                and Managing Director

            
	 
	 
	
               

            
	
              ISTVAN
                KRAFCSIK

            
	 
	 
	
               

            
	
              ATTILA
                HORVATH

            

    

    

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    MAJOR
      DECISIONS PERTAINING TO THE COMPANY AND ITS SUBSIDIARIES

    

    
      	1.	
              The
                amendment of the Company’s Articles of Incorporation or
                bylaws;

            

    

     

    
      	2.	
              The
                merger of the Company with or into or consolidate with any other
                corporation;

            

    

     

    
      	3.	
              Any
                change the fundamental nature of the Company’s
                Business;

            

    

     

    
      	4.	
              The
                admission of new Shareholders in the Company or the issuance of any
                capital stock or other equity securities of the Company, or the execution
                of any agreement to grant, any options, convertibility rights, other
                rights, warrants, calls or agreements relating to Company equity
                securities;

            

    

     

    
      	5.	
              The
                creation, incurrence, assumption, guarantee or otherwise becoming
                liable
                or obligated with respect to any indebtedness in excess of USD Two
                Million
                ($2,000,000), or the making of any loan or advance to, or any investment
                in, any Person, except in each case in the ordinary course of
                business;

            

    

     

    
      	6.	
              Any
                agreement to consummate the sale, transfer, lease, mortgage, encumber
                or
                other dispose of any of the assets of the Company or its Buda Solar
                subsidiary having a value in excess of USD Two Million
                ($2,000,000);

            

    

     

    
      	7.	
              The
                final terms and conditions of any additional funding contemplated
                by
                Section
                3.6
                of
                this Agreement.

            

    

     

    
      	8.	
              Except
                as contemplated by Article 3, entering into any agreement commercial
                or
                financial with any Affiliate or Connected Person which involves an
                amount
                in excess of USD Two Million
                ($2,000,000).

            

    

     

    
      	9.	
              Except
                as contemplated by Article 3, entering into any service agreement
                with any
                Affiliate or Connected Person which involves an amount in excess
                of USD
                Two Million ($2,000,000).

            

    

     

    
      	10.	
              Appointment
                of the President, the Chief Operating Officer, the Chief Financial
                Officer
                and the Chief Technology Officer of the Company its
                subsidiaries.

            

    

     

    
      	11.	
              Change
                of the statutory auditors.

            

    

     

    
      	12.	
              Approval,
                adoption or change of annual budgets and approval of unbudgeted capital
                expenditure over USD One Million ($
                1,000,000).

            

    

     

    
      	13.	
              The
                acquisition by the Company of the business, or a majority of the
                securities or assets of any Person;

            

    

     

    
      	14.	
              The
                purchase any securities of any Person in excess of US$
                2,000,000.

            

    

     

    
      	15.	
              Borrowing
                any sum exceeding USD Two Million
                ($2,000,000).

            

    

     

    
      	16.	
              Any
                single commercial agreement or commitment (or in a series of related
                transactions) in excess of USD Ten Million
                ($10,000,000).

            

    

     

    
      	17.	
              Initiating
                or settlement out of court of any litigation involving an amount
                in excess
                of USD One Million ($ 1,000,000).

            

    

     

    
      	18.	
              Any
                decision with respect to the winding up of the Company or any Subsidiary
                of the Company;

            

    

     

    
      	19.	
              Entering
                into any agreement other than on an arm’s length basis.
                

            

    

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    SCHEDULE
      A

    

    LIST
      OF SHAREHOLDERS AND AFFILIATES

    

    
      	
              Name
                of Shareholder

            	 	
              Address

            
	
              Solar
                Thin Films, Inc.

            	 	 
	
              New
                Palace Investments Ltd.

            	 	
              Crystal
                Offices

              Kranbis
                Building

              20B
                Stasikratous Street

              1065
                Nicosia, Cyprus

            

    

    

    
      	
              Name
                of Shareholder

            	 	
              Number
                of Shares of 

              Share
                Capital

            	 	
              Percentage

            
	
              Solar
                Thin Films, Inc.

            	 	 	 	
              60%

            
	
              New
                Palace Investments Ltd.

            	 	 	 	
              40%

            
	 	 	 	 	 
	
              Total

            	 	 	 	
              100%

            

    

    

    
      	
              Name
                of Shareholders of 

              New
                Palace Investments Ltd.

            	 	
              Number
                of Shares of 

              Share
                Capital

            	 	
              Percentage

            
	
              Istvan
                Krafcsik

            	 	 	 	
              75%

            
	
              Attila
                Horvath

            	 	 	 	
              25%

            
	 	 	 	 	 

    

    

    
      	
              Name
                of Representatives to vote on 

              Major
                Decisions pursuant to Section 3.1

            	 	 	 	 
	
              Solar
                Thin Films, Inc.

            	 	
              The
                Chief Executive Officer or 

              President
                of Solar Thin Films, Inc.

            	 	 
	
              New
                Palace Investments Ltd

            	 	
              Istvan
                Krafcsik

            	 	 

    

     

    
      
        
        

      

      
        16

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00148-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00148-of-00352.parquet"}]]