Document:

exv10w1

 

Exhibit 10.1

TTM Technologies, Inc.

2006 Incentive Compensation Plan

     1. Purpose. The purpose of this Plan is to assist the Company and its Related
Entities in attracting, motivating, retaining and rewarding high-quality Employees, officers,
Directors and Consultants by enabling such persons to acquire or increase a proprietary interest in
the Company in order to strengthen the mutuality of interests between such persons and the
Company’s shareholders, and providing such persons with annual and long-term performance incentives
to expend their maximum efforts in the creation of shareholder value. The Plan is intended to
qualify certain compensation awarded under the Plan for tax deductibility under Section 162(m) of
the Code (as hereafter defined) to the extent deemed appropriate by the Plan Administrator.

     2. Definitions. For purposes of the Plan, the following terms shall be defined as set
forth below.

          (a) “2000 Plan Award” means a stock award granted under the 2000 Equity Compensation
Plan.

          (b) “Applicable Laws” means the requirements relating to the administration of equity
compensation plans under U.S. state corporate laws, U.S. federal and state securities laws, the
Code, the rules and regulations of any stock exchange upon which the Common Stock is listed and the
applicable laws of any foreign country or jurisdiction where Awards are granted under the Plan.

          (c) “Award” means any award granted pursuant to the terms of this Plan, including an
Option, Stock Appreciation Right, Restricted Stock, Stock Unit, Stock granted as a bonus or in lieu
of another award, Dividend Equivalent, Other Stock-Based Award or Performance Award, together with
any other right or interest, granted to a Participant under the Plan.

          (d) “Award Agreement” means the written agreement evidencing an Award granted under
the Plan.

          (e) “Beneficiary” means the person, persons, trust or trusts which have been
designated by a Participant in his or her most recent written beneficiary designation filed with
the Plan Administrator to receive the benefits specified under the Plan upon such Participant’s
death or to which Awards or other rights are transferred if and to the extent permitted under
Section 10(b) hereof. If, upon a Participant’s death, there is no designated Beneficiary or
surviving designated Beneficiary, then the term Beneficiary means the person, persons, trust or
trusts entitled by will or the laws of descent and distribution to receive such benefits.

          (f) “Beneficial Owner”, “Beneficially Owning” and “Beneficial
Ownership” shall have the meanings ascribed to such terms in Rule 13d-3 under the Exchange Act
and any successor to such Rule.

          (g) “Board” means the Company’s Board of Directors.

          (h) “Cause” shall, with respect to any Participant, have the meaning specified in the
Award Agreement. In the absence of any definition in the Award Agreement, “Cause” shall have the
equivalent meaning or the same meaning as “cause” or “for cause” set forth in any employment,
consulting, change in control or other agreement for the performance of services between the
Participant and the Company or a Related Entity or, in the absence of any such definition in such
agreement, such term shall mean (i) the failure by the Participant to perform his or her duties as
assigned by the Company (or a Related Entity) in a reasonable manner, (ii) any violation or breach
by the Participant of his or her employment, consulting or other similar agreement with the Company
(or a Related Entity), if any, (iii) any violation or breach by the Participant of his or her
confidential information and invention assignment, non-competition, non-solicitation,
non-disclosure and/or other similar agreement with the Company or a Related Entity, if any, (iv)
any act by the Participant of dishonesty or bad faith with respect to the Company (or a Related
Entity), (v) any material violation or breach by the Participant of the Company’s or a Related
Entity’s policy for employee conduct, if any, (vi) use of alcohol, drugs or other similar
substances in a manner that adversely affects the Participant’s work performance, or (vii) the
commission by the Participant of any act, misdemeanor, or crime reflecting unfavorably upon the
Participant or the Company or any Related Entity. The

 

 

good faith determination by the Plan Administrator of whether the Participant’s Continuous Service
was terminated by the Company for “Cause” shall be final and binding for all purposes hereunder.

          (i) “Change in Control” means and shall be deemed to have occurred on the earliest of
the following dates:

               (i) the date on which any “person” (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) obtains “beneficial ownership” (as defined in Rule 13d 3 of the Exchange Act) or a
pecuniary interest in thirty-five percent (35%) or more of the Voting Stock;

               (ii) the consummation of a merger, consolidation, reorganization or similar transaction other
than a transaction: (1) (a) in which substantially all of the holders of Company’s Voting Stock
hold or receive directly or indirectly fifty percent (50%) or more of the voting stock of the
resulting entity or a parent company thereof, in substantially the same proportions as their
ownership of the Company immediately prior to the transaction; or (2) in which the holders of
Company’s capital stock immediately before such transaction will, immediately after such
transaction, hold as a group on a fully diluted basis the ability to elect at least a majority of
the directors of the surviving corporation (or a parent company);

               (iii) there is consummated a sale, lease, exclusive license or other disposition of all or
substantially all of the consolidated assets of the Company and its Subsidiaries, other than a
sale, lease, license or other disposition of all or substantially all of the consolidated assets of
the Company and its Subsidiaries to an entity, fifty percent (50%) or more of the combined voting
power of the voting securities of which are owned by shareholders of the Company in substantially
the same proportions as their ownership of the Company immediately prior to such sale, lease,
license or other disposition; or

               (iv) individuals who, on the date this Plan is adopted by the Board, are Directors (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the Directors;
provided, however, that if the appointment or election (or nomination for election) of any new
Director was approved or recommended by a majority vote of the members of the Incumbent Board then
still in office, such new member shall, for purposes of this Plan, be considered as a member of the
Incumbent Board.

     For purposes of determining whether a Change in Control has occurred, a transaction includes
all transactions in a series of related transactions, and terms used in this definition but not
defined are used as defined in the Plan. The term Change in Control shall not include a sale of
assets, merger or other transaction effected exclusively for the purpose of changing the domicile
of the Company.

     Notwithstanding the foregoing or any other provision of this Plan, the definition of Change in
Control (or any analogous term) in an individual written agreement between the Company and the
Participant shall supersede the foregoing definition with respect to Awards subject to such
agreement (it being understood, however, that if no definition of Change in Control or any
analogous term is set forth in such an individual written agreement, the foregoing definition shall
apply).

          (j) “Code” means the Internal Revenue Code of 1986, as amended from time to time,
including regulations thereunder and successor provisions and regulations thereto.

          (k) “Committee” means a committee designated by the Board to administer the Plan with
respect to at least a group of Employees, Directors or Consultants.

          (l) “Company” means TTM Technologies, Inc., a Delaware corporation.

          (m) “Consultant” means any person (other than an Employee or a Director, solely with
respect to rendering services in such person’s capacity as a director) who is engaged by the
Company or any Related Entity to render consulting or advisory services to the Company or such
Related Entity.

          (n) “Continuous Service” means uninterrupted provision of services to the Company or
any Related Entity in the capacity as either an officer, Employee, Director or Consultant.
Continuous Service shall not

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be considered to be interrupted in the case of (i) any approved leave of absence, (ii) transfers
among the Company, any Related Entities, or any successor entities, in the capacity as either an
officer, Employee, Director or Consultant or (iii) any change in status as long as the individual
remains in the service of the Company or a Related Entity in the capacity as either an officer,
Employee, Director, Consultant (except as otherwise provided in the Award Agreement). An approved
leave of absence shall include sick leave, military leave, or any other authorized personal leave.

          (o) “Corporate Transaction” means the occurrence, in a single transaction or in a
series of related transactions, of any one or more of the following events:

               (i) a sale, lease, exclusive license or other disposition of a substantial portion of the
consolidated assets of the Company and its Subsidiaries, as determined by the Plan Administrator,
in its discretion;

               (ii) a sale or other disposition of more than twenty percent (20%) of the outstanding
securities of the Company; or

               (iii) a merger, consolidation, reorganization or similar transaction, whether or not the
Company is the surviving corporation.

          (p) “Covered Employee” means an Eligible Person who is a Covered Employee as specified
in Section 7(d) of the Plan.

          (q) “Director” means a member of the Board or the board of directors of any Related
Entity.

          (r) “Disability” means a permanent and total disability (within the meaning of Section
22(e) of the Code), as determined by a medical doctor satisfactory to the Plan Administrator.

          (s) “Dividend Equivalent” means a right, granted to a Participant under Section 6(g)
hereof, to receive cash, Shares, other Awards or other property equal in value to dividends paid
with respect to a specified number of Shares or other periodic payments.

          (t) “Effective Date” means the effective date of this Plan, which shall be the date
this Plan is adopted by the Board, subject to the approval of the shareholders of the Company.

          (u) “Eligible Person” means each officer, Director, Employee or Consultant. The
foregoing notwithstanding, only employees of the Company, any Parent or any Subsidiary shall be
Eligible Persons for purposes of receiving Incentive Stock Options. An Employee on leave of
absence may be considered as still in the employ of the Company or a Related Entity for purposes of
eligibility for participation in the Plan.

          (v) “Employee” means any person, including an officer or Director, who is an employee
of the Company or any Related Entity. The payment of a director’s fee by the Company or a Related
Entity shall not be sufficient to constitute “employment” by the Company.

          (w) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to
time, including rules thereunder and successor provisions and rules thereto.

          (x) “Executive Officer” means an executive officer of the Company as defined under the
Exchange Act.

          (y) “Fair Market Value” means the fair market value of Shares, Awards or other
property as determined by the Plan Administrator, or under procedures established by the Plan
Administrator. Unless otherwise determined by the Plan Administrator, the Fair Market Value of
Shares as of any given date, after which the Shares are publicly traded on a stock exchange or
market, shall be the closing sale price per share reported on a consolidated basis for stock listed
on the principal stock exchange or market on which Shares is traded on the date as of which such
value is being determined or, if there is no sale on that date, then on the last previous day on
which a sale was reported.

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          (z) “Good Reason” shall, with respect to any Participant, have the meaning specified
in the Award Agreement. In the absence of any definition in the Award Agreement, “Good Reason”
shall have the equivalent meaning (or the same meaning as “good reason” or “for good reason”) set
forth in any employment, consulting, change in control or other agreement for the performance of
services between the Participant and the Company or a Related Entity or, in the absence of any such
definition in such agreement(s), such term shall mean (i) the assignment to the Participant of any
duties inconsistent in any material respect with the Participant’s position (including status,
offices, titles and reporting requirements), authority, duties or responsibilities as assigned by
the Company (or a Related Entity) or any other action by the Company (or a Related Entity) which
results in a material diminution in such position, authority, duties or responsibilities, excluding
for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which
is remedied by the Company (or a Related Entity) promptly after receipt of notice thereof given by
the Participant; (ii) any failure by the Company (or a Related Entity) to comply with its
obligations to the Participant as agreed upon, other than an isolated, insubstantial and
inadvertent failure not occurring in bad faith and which is remedied by the Company (or a Related
Entity) promptly after receipt of notice thereof given by the Participant; (iii) the Company’s (or
Related Entity’s) requiring the Participant to be based at any office or location more than fifty
(50) miles from the location of employment as of the date of Award, except for travel reasonably
required in the performance of the Participant’s responsibilities; (iv) any purported termination
by the Company (or a Related Entity) of the Participant’s Continuous Service otherwise than for
Cause, as defined in Section 2(f), death, or by reason of the Participant’s Disability as defined
in Section 2(o); or (v) any reduction in the Participant’s base salary (unless such reduction is
part of Company-wide reduction that affects a majority of the persons of comparable level to the
Participant).

          (aa) “Incentive Stock Option” means any Option intended to be designated as an
incentive stock option within the meaning of Section 422 of the Code or any successor provision
thereto.

          (bb) “Management Plan Award” means a stock award granted under the Management Stock
Option Plan.

          (cc) “Non-Employee Director” means a Director of the Company who is not an Employee.

          (dd) “Non-Qualified Stock Option” means any Option that is not intended to be
designated as an incentive stock option within the meaning of Section 422 of the Code or any
successor provision thereto.

          (ee) “Option” means a right, granted to a Participant under Section 6(b) hereof, to
purchase Shares or other Awards at a specified price during specified time periods.

          (ff) “Other Stock-Based Awards” means Awards granted to a Participant pursuant to
Section 6(h) hereof.

          (gg) “Parent” means any corporation (other than the Company), whether now or hereafter
existing, in an unbroken chain of corporations ending with the Company, if each of the corporations
in the chain (other than the Company) owns stock possessing fifty percent (50%) or more of the
combined voting power of all classes of stock in one of the other corporations in the chain.

          (hh) “Participant” means a person who has been granted an Award under the Plan which
remains outstanding, including a person who is no longer an Eligible Person.

          (ii) “Performance Award” means a right, granted to an Eligible Person under Sections
6(h) or 7 hereof, to receive Awards based upon performance criteria specified by the Plan
Administrator.

          (jj) “Performance Period” means that period established by the Plan Administrator at
the time any Performance Award is granted or at any time thereafter during which any performance
goals specified by the Plan Administrator with respect to such Award are to be measured.

          (kk) “Person” has the meaning ascribed to such term in Section 3(a)(9) of the Exchange
Act and used in Sections 13(d) and 14(d) thereof, and shall include a “group” as defined in Section
12(d) thereof.

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          (ll) “Plan” means this TTM Technologies, Inc. 2006 Incentive Compensation Plan.

          (mm) “Plan Administrator” means the Board or any Committee delegated by the Board to
administer the Plan. There may be different Plan Administrators with respect to different groups
of Eligible Persons.

          (nn) “Related Entity” means any Parent, Subsidiary and any business, corporation,
partnership, limited liability company or other entity designated by the Plan Administrator in
which the Company, a Parent or a Subsidiary, directly or indirectly, holds a substantial ownership
interest.

          (oo) “Restricted Stock” means Stock granted to a Participant under Section 6(d)
hereof, that is subject to certain restrictions, including a risk of forfeiture.

          (pp) “Rule 16b 3” and “Rule 16a 1(c)(3)” means Rule 16b 3 and Rule 16a
1(c)(3), as from time to time in effect and applicable to the Plan and Participants, promulgated by
the Securities and Exchange Commission under Section 16 of the Exchange Act.

          (qq) “Share” means a share of the Company’s Common Stock, and the share of such other
securities as may be substituted (or resubstituted) for Stock pursuant to Section 10(c) hereof.

          (rr) “Stock” means the Company’s Common Stock, and such other securities as may be
substituted (or resubstituted) for the Company’s Common Stock pursuant to Section 10(c) hereof.

          (ss) “Stock Appreciation Right” means a right granted to a Participant pursuant to
Section 6(c) hereof.

          (tt) “Stock Unit” means a right, granted to a Participant pursuant to Section 6(e)
hereof, to receive Shares, cash or a combination thereof at the end of a specified period of time.

          (uu) “Subsidiary” means any corporation (other than the Company), whether now or
hereafter existing, in an unbroken chain of corporations beginning with the Company, if each of the
corporations other than the last corporation in the unbroken chain owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.

          (vv) “Voting Stock” means the stock of the Company with a right to vote for the
election of Directors.

     3. Administration.

          (a) Administration by Board. The Board shall administer the Plan unless and until the
Board delegates administration to a Committee, as provided in Section 3(c). The Board and/or
Committee(s) administering the Plan shall be the Plan Administrator.

          (b) Powers of the Plan Administrator. The Plan Administrator shall have the power,
subject to, and within the limitations of, the express provisions of the Plan:

               (i) To determine from time to time which of the persons eligible under the Plan shall be
granted Awards; when and how each Award shall be granted; what type or combination of types of
Award shall be granted; the provisions of each Award granted (which need not be identical),
including the time or times when a person shall be permitted to receive Shares or cash pursuant to
an Award; and the number of Shares or amount of cash with respect to which an Award shall be
granted to each such person.

               (ii) To construe and interpret the Plan and Awards granted under it, and to establish, amend
and revoke rules and regulations for its administration. The Plan Administrator, in the exercise
of this power,

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may correct any defect, omission or inconsistency in the Plan or in any Award Agreement, in a
manner and to the extent it shall deem necessary or expedient to make the Plan fully effective.

               (iii) To amend the Plan or an Award as provided in Section 10(e).

               (iv) To terminate or suspend the Plan as provided in Section 10(e).

               (v) To adopt such modifications, procedures, and subplans as may be necessary or desirable to
comply with provisions of the laws of foreign countries in which the Company or Related Entities
may operate to assure the viability of the benefits from Awards granted to Participants performing
services in such countries and to meet the objectives of the Plan.

               (vi) Generally, to exercise such powers and to perform such acts as the Plan Administrator
deems necessary or appropriate to promote the best interests of the Company and that are not in
conflict with the provisions of the Plan.

          (c) Delegation to Committee.

               (i) General. The Board may delegate administration of the Plan to a Committee or
Committees of more members of the Board, and the term “Committee” shall apply to any person or
persons to whom such authority has been delegated. If administration is delegated to a Committee,
the Committee shall have, in connection with the administration of the Plan, the powers theretofore
possessed by the Board, to the extent delegated by the Board, including the power to delegate to a
subcommittee any of the administrative powers the Committee is authorized to exercise, subject,
however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted
from time to time by the Board. The Board may abolish the Committee at any time and revest in the
Board the administration of the Plan.

               (ii) Section 162(m) and Rule 16b-3 Compliance. In the discretion of the Board, the
Committee may consist solely of two or more “Outside Directors”, in accordance with Section 162(m)
of the Code, and/or solely of two or more “Non-Employee Directors”, in accordance with Rule 16b 3.
In addition, the Plan Administrator may delegate to a committee of two or more members of the Board
the authority to grant Awards to Eligible Persons who are either (a) not then Covered Employees and
are not expected to be Covered Employees at the time of recognition of income resulting from such
Award, (b) not persons with respect to whom the Company wishes to comply with Section 162(m) of the
Code or (c) not then subject to Section 16 of the Exchange Act.

          (d) Effect of Plan Administrator’s Decision. All determinations, interpretations and
constructions made by the Plan Administrator shall be made in good faith and shall not be subject
to review by any person and shall be final, binding and conclusive on all persons.

          (e) Arbitration. Any dispute or claim concerning any Award granted (or not granted)
pursuant to the Plan or any disputes or claims relating to or arising out of the Plan shall be
fully, finally and exclusively resolved by binding and confidential arbitration conducted pursuant
to the rules of Judicial Arbitration and Mediation Services, Inc. (“JAMS”) in the nearest city in
which JAMS conducts business to the city in which the Participant is employed by the Company. The
Company shall pay all arbitration fees. In addition to any other relief, the arbitrator may award
to the prevailing party recovery of its attorneys’ fees and costs. By accepting an Award, the
Participant and the Company waive their respective rights to have any such disputes or claims tried
by a judge or jury.

          (f) Limitation of Liability. The Board and any Committee(s), and each member thereof,
who act as the Plan Administrator, shall be entitled to, in good faith, rely or act upon any report
or other information furnished to him or her by any officer or Employee, the Company’s independent
auditors, Consultants or any other agents assisting in the administration of the Plan. Members of
the Board and any Committee(s), and any officer or Employee acting at the direction or on behalf of
the Board and any Committee(s), shall not be personally liable for any action or determination
taken or made in good faith with respect to the Plan, and shall, to the extent permitted by law, be
fully indemnified and protected by the Company with respect to any such action or determination.

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     4. Shares Issuable Under the Plan.

          (a) Number of Shares Available for Issuance Under Plan. Subject to adjustment as
provided in Section 10(c) hereof, the total number of Shares reserved and available for issuance in
connection with Awards shall be 3,000,000 Shares. In addition, any shares available for issuance
under the 2000 Equity Compensation Plan and the Management Stock Option Plan that are not subject
to an outstanding award under the 2000 Equity Compensation Plan and the Management Stock Option
Plan as of the date of shareholder approval of this Plan shall become available for issuance under
this Plan, and shall no longer be available for issuance under the 2000 Equity Compensation Plan
and the Management Stock Option Plan, as applicable. Any Shares issued under the Plan may consist,
in whole or in part, of authorized and unissued shares or treasury shares.

          (b) Availability of Shares Not Issued pursuant to Awards.

               (i) If any Shares subject to an Award or to a 2000 Plan Award or Management Plan Award are
forfeited, expire or otherwise terminate without issuance of such Shares or any Award, 2000 Plan
Award or Management Plan Award is settled for cash or otherwise does not result in the issuance of
all or a portion of the Shares subject to such Award, 2000 Plan Award or Management Plan Award, the
Shares shall, to the extent of such forfeiture, expiration, termination, cash settlement or
non-issuance, be available for Awards under the Plan, subject to Section 4(b)(iv) below.

               (ii) If any Shares issued pursuant to an Award, 2000 Plan Award or Management Plan Award are
forfeited back to or repurchased by the Company, including, but not limited to, any repurchase or
forfeiture caused by the failure to meet a contingency or condition required for the vesting of
such shares, then the Shares forfeited or repurchased shall revert to and become available for
issuance under the Plan, subject to Section 4(b)(iv) below.

               (iii) In the event that any Option or other Award granted hereunder is exercised through the
withholding of Shares from the Award by the Company or withholding tax liabilities arising from
such Option or other Award are satisfied by the withholding of Shares from the Award by the
Company, then only the number of Shares issued net of the Shares withheld shall be counted as
issued for purposes of determining the maximum number of Shares available for grant under the Plan,
subject to Section 4(b)(iv) below. In the event that any 2000 Plan Award or Management Plan Award
is exercised through the withholding of Shares by the Company from the 2000 Plan Award or the
Management Plan Award or withholding tax liabilities arising from such 2000 Plan Award or
Management Plan Award are satisfied by the withholding of Shares from the 2000 Plan Award or
Management Plan Award by the Company, then Shares withheld shall become available for issuance
under the Plan, subject to Section 4(b)(iv) below.

               (iv) Notwithstanding anything in this Section 4(b) to the contrary, solely for purposes of
determining whether Shares are available for the grant of Incentive Stock Options, the maximum
aggregate number of Shares that may be granted under this Plan through Incentive Stock Options
shall be determined without regard to any Shares restored pursuant to this Section 4(b) that, if
taken into account, would cause the Plan, for purposes of the grant of Incentive Stock Options, to
fail the requirement under Code Section 422 that the Plan designate a maximum aggregate number of
shares that may be issued.

          (c) Application of Limitations. The limitation contained in this Section 4 shall
apply not only to Awards that are settled by the delivery of Shares but also to Awards relating to
Shares but settled only in cash (such as cash-only Stock Appreciation Rights). The Plan
Administrator may adopt reasonable counting procedures to ensure appropriate counting, avoid double
counting (as, for example, in the case of tandem or substitute awards) and may make adjustments if
the number of Shares actually delivered differs from the number of shares previously counted in
connection with an Award.

     5. Eligibility; Per-Person Award Limitations. Awards may be granted under the Plan
only to Eligible Persons.

     In any one calendar year, an Eligible Person may not be granted Options or Stock Appreciation
Rights under which more than 1,000,000 Shares could be received by the Participant, subject to
adjustment as provided in

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Section 10(c). In any one calendar year, an Eligible Person may not be granted Awards (other than
an Option or Stock Appreciation Right) under which more than 1,000,000 Shares could be received by
the Participant in any one calendar year, subject to adjustment as provided in Section 10(c). In
addition, the maximum dollar value payable in cash to any one Participant with respect to
Performance Awards is $5,000,000 per calendar year.

     6. Terms of Awards.

          (a) General. Awards may be granted on the terms and conditions set forth in this
Section 6. In addition, the Plan Administrator may impose on any Award or the exercise thereof, at
the date of grant or thereafter (subject to Section 10(e)), such additional terms and conditions,
not inconsistent with the provisions of the Plan, as the Plan Administrator shall determine,
including terms requiring forfeiture of Awards in the event of termination of the Participant’s
Continuous Service and terms permitting a Participant to make elections relating to his or her
Award. The Plan Administrator shall retain full power and discretion to accelerate, waive or
modify, at any time, any term or condition of an Award that is not mandatory under the Plan.

          (b) Options. The Plan Administrator is authorized to grant Options to any Eligible
Person on the following terms and conditions:

               (i) Stock Option Agreement. Each grant of an Option shall be evidenced by an Award
Agreement. Such Award Agreement shall be subject to all applicable terms and conditions of the
Plan and may be subject to any other terms and conditions which are not inconsistent with the Plan
and which the Plan Administrator deems appropriate for inclusion in the Award Agreement. The
provisions of the various Award Agreements entered into under the Plan need not be identical.

               (ii) Number of Shares. Each Award Agreement shall specify the number of Shares that
are subject to the Option and shall provide for the adjustment of such number in accordance with
Section 10(c) hereof. The Award Agreement shall also specify whether the Stock Option is an
Incentive Stock Option or a Non-Qualified Stock Option.

               (iii) Exercise Price.

                    (A) In General. Each Award Agreement shall state the price at which Shares subject to
the Option may be purchased (the “Exercise Price”), which shall be, with respect to Incentive Stock
Options, not less than 100% of the Fair Market Value of the Stock on the date of grant. In the
case of Non-Qualified Stock Options, the Exercise Price shall be determined in the sole discretion
of the Plan Administrator; provided, however, that notwithstanding any other provision of the Plan,
any Non-Qualified Stock Option granted with a per Share exercise price less than the per Share Fair
Market Value on the date of grant shall be structured to avoid the imposition of any excise tax
under Code Section 409A, unless otherwise specifically determined by the Plan Administrator.

                    (B) Ten Percent Shareholder. If a Participant owns or is deemed to own (by reason of
the attribution rules applicable under Section 424(d) of the Code) more than 10% of the combined
voting power of all classes of stock of the Company or any Parent or Subsidiary, any Incentive
Stock Option granted to such Employee must have an exercise price per Share of at least 110% of the
Fair Market Value of a Share on the date of grant.

               (iv) Time and Method of Exercise. The Plan Administrator shall determine the time or
times at which or the circumstances under which an Option may be exercised in whole or in part
(including based on achievement of performance goals and/or future service requirements), the time
or times at which Options shall cease to be or become exercisable following termination of
Continuous Service or upon other conditions, the methods by which the exercise price may be paid or
deemed to be paid (including, in the discretion of the Plan Administrator, a cashless exercise
procedure), the form of such payment, including, without limitation, cash, Stock, net exercise,
other Awards or awards granted under other plans of the Company or a Related Entity, other property
(including notes or other contractual obligations of Participants to make payment on a deferred
basis) or any other form of consideration legally permissible, and the methods by or forms in which
Stock will be delivered or deemed to be delivered to Participants.

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               (v) Termination of Service. Subject to earlier termination of the Option as otherwise
provided in the Plan and unless otherwise provided by the Plan Administrator with respect to an
Option and set forth in the Award Agreement, an Option shall be exercisable after a Participant’s
termination of Continuous Service only during the applicable time period determined in accordance
with this Section and thereafter shall terminate and no longer be exercisable:

                    (A) Death or Disability. If the Participant’s Continuous Service terminates because
of the death or Disability of the Participant, the Option, to the extent unexercised and
exercisable on the date on which the Participant’s Continuous Service terminated, may be exercised
by the Participant (or the Participant’s legal representative or estate) at any time prior to the
expiration of twelve (12) months (or such other period of time as determined by the Plan
Administrator, in its discretion) after the date on which the Participant’s Continuous Service
terminated, but in any event only with respect to the vested portion of the Option and no later
than the date of expiration of the Option’s term as set forth in the Award Agreement evidencing
such Option (the “Option Expiration Date”).

                    (B) Termination for Cause. Notwithstanding any other provision of the Plan to the
contrary, if the Participant’s Continuous Service is terminated for Cause, the Option shall
terminate and cease to be exercisable immediately upon such termination of Continuous Service.

                    (C) Other Termination of Service. If the Participant’s Continuous Service terminates
for any reason, except Disability, death or Cause, the Option, to the extent unexercised and
exercisable by the Participant on the date on which the Participant’s Continuous Service
terminated, may be exercised by the Participant at any time prior to the expiration of three (3)
months (or such longer period of time as determined by the Plan Administrator, in its discretion)
after the date on which the Participant’s Continuous Service terminated, but in any event only with
respect to the vested portion of the Option and no later than the Option Expiration Date.

               (vi) Incentive Stock Options. The terms of any Incentive Stock Option granted under
the Plan shall comply in all respects with the provisions of Section 422 of the Code. If and to
the extent required to comply with Section 422 of the Code, Options granted as Incentive Stock
Options shall be subject to the following special terms and conditions:

                    (1) The Option shall not be exercisable more than ten years after the date such Incentive
Stock Option is granted; provided, however, that if a Participant owns or is deemed to own (by
reason of the attribution rules of Section 424(d) of the Code) more than 10% of the combined voting
power of all classes of stock of the Company or any Parent or Subsidiary and the Incentive Stock
Option is granted to such Participant, the Incentive Stock Option shall not be exercisable (to the
extent required by the Code at the time of the grant) for no more than five years from the date of
grant; and

                    (2) If the aggregate Fair Market Value (determined as of the date the Incentive Stock Option
is granted) of the Shares with respect to which Incentive Stock Options granted under the Plan and
all other option plans of the Company, its Parent or any Subsidiary are exercisable for the first
time by a Participant during any calendar year in excess of $100,000, then such Participant’s
Incentive Stock Option(s) or portions thereof that exceed such $100,000 limit shall be treated as
Non-Qualified Stock Options (in the reverse order in which they were granted, so that the last
Incentive Stock Option will be the first treated as a Non-Qualified Stock Option). This paragraph
shall only apply to the extent such limitation is applicable under the Code at the time of the
grant.

          (c) Stock Appreciation Rights. The Plan Administrator is authorized to grant Stock
Appreciation Rights to Participants on the following terms and conditions:

               (i) Agreement. Each grant of a Stock Appreciation Right shall be evidenced by an
Award Agreement. Such Award Agreement shall be subject to all applicable terms and conditions of
the Plan and may be subject to any other terms and conditions which are not inconsistent with the
Plan and which the Plan Administrator deems appropriate for inclusion in the Award Agreement. The
provisions of the various Award Agreements entered into under the Plan need not be identical.

9

 

               (ii) Right to Payment. A Stock Appreciation Right shall confer on the Participant to
whom it is granted a right to receive, upon exercise thereof, the excess of (A) the Fair Market
Value of one share of stock on the date of exercise over (B) the grant price of the Stock
Appreciation Right as determined by the Plan Administrator.

               (iii) Other Terms. The Plan Administrator shall determine at the date of grant or
thereafter, the time or times at which and the circumstances under which a Stock Appreciation Right
may be exercised in whole or in part (including based on achievement of performance goals and/or
future service requirements), the time or times at which Stock Appreciation Rights shall cease to
be or become exercisable following termination of Continuous Service or upon other conditions, the
form of payment upon exercise of Shares, cash or other property, the method of exercise, method of
settlement, form of consideration payable in settlement (either cash, Shares or other property),
method by or forms in which Stock will be delivered or deemed to be delivered to Participants,
whether or not a Stock Appreciation Right shall be in tandem or in combination with any other
Award, and any other terms and conditions of any Stock Appreciation Right. Stock Appreciation
Rights may be either freestanding or in tandem with other Awards. Notwithstanding any other
provision of the Plan, unless otherwise exempt from Section 409A of the Code or otherwise
specifically determined by the Plan Administrator, each Stock Appreciation Right shall be
structured to avoid the imposition of any excise tax under Section 409A of the Code.

          (d) Restricted Stock. The Plan Administrator is authorized to grant Restricted Stock
to any Eligible Person on the following terms and conditions:

               (i) Grant and Restrictions. Restricted Stock shall be subject to such restrictions on
transferability, risk of forfeiture and other restrictions, if any, as the Plan Administrator may
impose, or as otherwise provided in this Plan. The terms of any Restricted Stock granted under the
Plan shall be set forth in a written Award Agreement which shall contain provisions determined by
the Plan Administrator and not inconsistent with the Plan. The restrictions may lapse separately
or in combination at such times, under such circumstances (including based on achievement of
performance goals and/or future service requirements), in such installments or otherwise, as the
Plan Administrator may determine at the date of grant or thereafter. Except to the extent
restricted under the terms of the Plan and any Award Agreement relating to the Restricted Stock, a
Participant granted Restricted Stock shall have all of the rights of a shareholder, including the
right to vote the Restricted Stock and the right to receive dividends thereon (subject to any
mandatory reinvestment or other requirement imposed by the Plan Administrator). During the
restricted period applicable to the Restricted Stock, subject to Section 10(b) below, the
Restricted Stock may not be sold, transferred, pledged, hypothecated, margined or otherwise
encumbered by the Participant.

               (ii) Forfeiture. Except as otherwise determined by the Plan Administrator, upon
termination of a Participant’s Continuous Service during the applicable restriction period, the
Participant’s Restricted Stock that is at that time subject to a risk of forfeiture that has not
lapsed or otherwise been satisfied shall be forfeited to or reacquired by the Company; provided
that the Plan Administrator may provide, by rule or regulation or in any Award Agreement or may
determine in any individual case, that restrictions or forfeiture conditions relating to Restricted
Stock shall be waived in whole or in part in the event of terminations resulting from specified
causes, and the Plan Administrator may in other cases waive in whole or in part the forfeiture of
Restricted Stock.

               (iii) Certificates for Shares. Restricted Stock granted under the Plan may be
evidenced in such manner as the Plan Administrator shall determine. If certificates representing
Restricted Stock are registered in the name of the Participant, the Plan Administrator may require
that such certificates bear an appropriate legend referring to the terms, conditions and
restrictions applicable to such Restricted Stock, that the Company retain physical possession of
the certificates, that the certificates be kept with an escrow agent and that the Participant
deliver a stock power to the Company, endorsed in blank, relating to the Restricted Stock.

               (iv) Dividends and Splits. As a condition to the grant of an Award of Restricted
Stock, the Plan Administrator may require that any cash dividends paid on a share of Restricted
Stock be automatically reinvested in additional shares of Restricted Stock or applied to the
purchase of additional Awards under the Plan. Unless otherwise determined by the Plan
Administrator, Shares distributed in connection with a

10

 

stock split or stock dividend, and other property distributed as a dividend, shall be subject to
restrictions and a risk of forfeiture to the same extent as the Restricted Stock with respect to
which such Shares or other property has been distributed.

          (e) Stock Units. The Plan Administrator is authorized to grant Stock Units to
Participants, which are rights to receive Shares, cash or other property, or a combination thereof
at the end of a specified time period, subject to the following terms and conditions:

               (i) Award and Restrictions. Satisfaction of an Award of Stock Units shall occur upon
expiration of the time period specified for such Stock Units by the Plan Administrator (or, if
permitted by the Plan Administrator, as elected by the Participant). In addition, Stock Units
shall be subject to such restrictions (which may include a risk of forfeiture) as the Plan
Administrator may impose, if any, which restrictions may lapse at the expiration of the time period
or at earlier specified times (including based on achievement of performance goals and/or future
service requirements), separately or in combination, in installments or otherwise, as the Plan
Administrator may determine. The terms of an Award of Stock Units shall be set forth in a written
Award Agreement which shall contain provisions determined by the Plan Administrator and not
inconsistent with the Plan. Stock Units may be satisfied by delivery of Stock, cash equal to the
Fair Market Value of the specified number of Shares covered by the Stock Units, or a combination
thereof, as determined by the Plan Administrator at the date of grant or thereafter. Prior to
satisfaction of an Award of Stock Units, an Award of Stock Units carries no voting or dividend or
other rights associated with share ownership. Notwithstanding any other provision of the Plan,
unless otherwise exempt from Section 409A of the Code or otherwise specifically determined by the
Plan Administrator, each Stock Unit shall be structured to avoid the imposition of any excise tax
under Section 409A of the Code.

               (ii) Forfeiture. Except as otherwise determined by the Plan Administrator, upon
termination of a Participant’s Continuous Service during the applicable time period thereof to
which forfeiture conditions apply (as provided in the Award Agreement evidencing the Stock Units),
the Participant’s Stock Units (other than those Stock Units subject to deferral at the election of
the Participant) shall be forfeited; provided that the Plan Administrator may provide, by rule or
regulation or in any Award Agreement or may determine in any individual case, that restrictions or
forfeiture conditions relating to Stock Units shall be waived in whole or in part in the event of
terminations resulting from specified causes, and the Plan Administrator may in other cases waive
in whole or in part the forfeiture of Stock Units.

               (iii) Dividend Equivalents. Unless otherwise determined by the Plan Administrator at
date of grant, any Dividend Equivalents that are granted with respect to any Award of Stock Units
shall be either (A) paid with respect to such Stock Units at the dividend payment date in cash or
in Shares of unrestricted Stock having a Fair Market Value equal to the amount of such dividends or
(B) deferred with respect to such Stock Units and the amount or value thereof automatically deemed
reinvested in additional Stock Units, other Awards or other investment vehicles, as the Plan
Administrator shall determine or permit the Participant to elect.

          (f) Bonus Stock and Awards in Lieu of Obligations. The Plan Administrator is
authorized to grant Shares as a bonus or to grant Shares or other Awards in lieu of Company
obligations to pay cash or deliver other property under the Plan or under other plans or
compensatory arrangements, provided that, in the case of Participants subject to Section 16 of the
Exchange Act, the amount of such grants remains within the discretion of the Plan Administrator to
the extent necessary to ensure that acquisitions of Shares or other Awards are exempt from
liability under Section 16(b) of the Exchange Act. Shares or Awards granted hereunder shall be
subject to such other terms as shall be determined by the Plan Administrator.

          (g) Dividend Equivalents. The Plan Administrator is authorized to grant Dividend
Equivalents to any Eligible Person entitling the Eligible Person to receive cash, Shares, other
Awards, or other property equal in value to dividends paid with respect to a specified number of
Shares, or other periodic payments. Dividend Equivalents may be awarded on a free-standing basis
or in connection with another Award. The terms of an Award of Dividend Equivalents shall be set
forth in a written Award Agreement which shall contain provisions determined by the Plan
Administrator and not inconsistent with the Plan. The Plan Administrator may provide that Dividend
Equivalents shall be paid or distributed when accrued or shall be deemed to have been reinvested in
additional Stock, Awards, or other investment vehicles, and subject to such restrictions on
transferability and risks of forfeiture, as the Plan Administrator may specify. Notwithstanding
any other provision of the Plan, unless otherwise

11

 

exempt from Section 409A of the Code or otherwise specifically determined by the Plan
Administrator, each Dividend Equivalent shall be structured to avoid the imposition of any excise
tax under Section 409A of the Code.

          (h) Performance Awards. The Plan Administrator is authorized to grant Performance
Awards to any Eligible Person payable in cash, Shares, other property, or other Awards, on terms
and conditions established by the Plan Administrator, subject to the provisions of Section 7 if and
to the extent that the Plan Administrator shall, in its sole discretion, determine that an Award
shall be subject to those provisions. The performance criteria to be achieved during any
Performance Period and the length of the Performance Period shall be determined by the Plan
Administrator upon the grant of each Performance Award. Except as provided in this Plan or as may
be provided in an Award Agreement, Performance Awards will be distributed only after the end of the
relevant Performance Period. The performance goals to be achieved for each Performance Period
shall be conclusively determined by the Plan Administrator and may be based upon the criteria set
forth in Section 7(b), or in the case of an Award that the Plan Administrator determines shall not
be subject to Section 7 hereof, any other criteria that the Plan Administrator, in its sole
discretion, shall determine should be used for that purpose. The amount of the Award to be
distributed shall be conclusively determined by the Plan Administrator. Performance Awards may be
paid in a lump sum or in installments following the close of the Performance Period or, in
accordance with procedures established by the Plan Administrator, on a deferred basis.

          (i) Other Stock-Based Awards. The Plan Administrator is authorized, subject to
limitations under applicable law, to grant to any Eligible Person such other Awards that may be
denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or
related to, Shares, as deemed by the Plan Administrator to be consistent with the purposes of the
Plan, including, without limitation, convertible or exchangeable debt securities, other rights
convertible or exchangeable into Stock, purchase rights for Stock, Awards with value and payment
contingent upon performance of the Company or any other factors designated by the Plan
Administrator, and Awards valued by reference to the book value of Stock or the value of securities
of or the performance of specified Related Entities or business units. The Plan Administrator
shall determine the terms and conditions of such Awards. The terms of any Award pursuant to this
Section shall be set forth in a written Award Agreement which shall contain provisions determined
by the Plan Administrator and not inconsistent with the Plan. Stock delivered pursuant to an Award
in the nature of a purchase right granted under this Section 6(h) shall be purchased for such
consideration (including without limitation loans from the Company or a Related Entity), paid for
at such times, by such methods, and in such forms, including, without limitation, cash, Stock,
other Awards or other property, as the Plan Administrator shall determine. Cash awards, as an
element of or supplement to any other Award under the Plan, may also be granted pursuant to this
Section 6(h). Notwithstanding any other provision of the Plan, unless otherwise exempt from
Section 409A of the Code or otherwise specifically determined by the Plan Administrator, each such
Award shall be structured to avoid the imposition of any excise tax under Section 409A of the Code.

     7. Tax Qualified Performance Awards.

          (a) Covered Employees. A Committee, composed in compliance with the requirements of
Section 162(m) of the Code, in its discretion, may determine at the time an Award is granted to an
Eligible Person who is, or is likely to be, as of the end of the tax year in which the Company
would claim a tax deduction in connection with such Award, a Covered Employee, that the provisions
of this Section 7 shall be applicable to such Award.

          (b) Performance Criteria. If an Award is subject to this Section 7, then the lapsing
of restrictions thereon and the distribution of cash, Shares or other property pursuant thereto, as
applicable, shall be contingent upon achievement of one or more objective performance goals.
Performance goals shall be objective and shall otherwise meet the requirements of Section 162(m) of
the Code and regulations thereunder including the requirement that the level or levels of
performance targeted by the Committee result in the achievement of performance goals being
“substantially uncertain.” One or more of the following business criteria for the Company, on a
consolidated basis, and/or for Related Entities, or for business or geographical units of the
Company and/or a Related Entity (except with respect to the total stockholder return and earnings
per share criteria), shall be used by the Committee in establishing performance goals for such
Awards: (1) earnings per share; (2) revenues or gross margins; (3) cash flow; (4) operating margin;
(5) return on net assets, investment, capital, or equity; (6) economic value added; (7) direct
contribution; (8) net income; pretax earnings; earnings before interest and taxes; earnings

12

 

before interest, taxes, depreciation and amortization; earnings after interest expense and before
extraordinary or special items; operating income; income before interest income or expense, unusual
items and income taxes, local, state or federal and excluding budgeted and actual bonuses which
might be paid under any ongoing bonus plans of the Company; (9) working capital; (10) management of
fixed costs or variable costs; (11) identification or consummation of investment opportunities or
completion of specified projects in accordance with corporate business plans, including strategic
mergers, acquisitions or divestitures; (12) total stockholder return; and (13) debt reduction. Any
of the above goals may be determined on an absolute or relative basis or as compared to the
performance of a published or special index deemed applicable by the Committee including, but not
limited to, the Standard & Poor’s 500 Stock Index or a group of companies that are comparable to
the Company. The Committee shall exclude the impact of an event or occurrence which the Committee
determines should appropriately be excluded, including without limitation (i) restructurings,
discontinued operations, extraordinary items, and other unusual or non-recurring charges, (ii) an
event either not directly related to the operations of the Company or not within the reasonable
control of the Company’s management, or (iii) a change in accounting standards required by
generally accepted accounting principles.

          (c) Performance Period; Timing For Establishing Performance Goals. Achievement of
performance goals in respect of such Performance Awards shall be measured over a Performance
Period, as specified by the Committee. Performance goals shall be established not later than
ninety (90) days after the beginning of any Performance Period applicable to such Performance
Awards, or at such other date as may be required or permitted for “performance-based compensation”
under Section 162(m) of the Code.

          (d) Adjustments. The Committee may, in its discretion, reduce the amount of a
settlement otherwise to be made in connection with Awards subject to this Section 7, but may not
exercise discretion to increase any such amount payable to a Covered Employee in respect of an
Award subject to this Section 7. The Committee shall specify the circumstances in which such
Awards shall be paid or forfeited in the event of termination of Continuous Service by the
Participant prior to the end of a Performance Period or settlement of Awards.

          (e) Committee Certification. Within a reasonable period of time after the performance
criteria have been satisfied (but no later than three (3) months after the satisfaction of the
performance criteria), in order to meet the requirements of Section 162(m) of the Code, the
Committee shall certify, by resolution or other appropriate action in writing, that the performance
criteria and any other material terms previously established by the Committee or set forth in the
Plan, have been satisfied to the extent necessary to qualify as “performance based compensation”
under Section 162(m) of the Code. To the extent that the performance criteria have been satisfied,
but the Committee has not certified such result within three (3) months after such satisfaction,
then the Participant shall receive the payment provided for under the Participant’s Award.

     8. Certain Provisions Applicable to Awards or Sales.

          (a) Stand-Alone, Additional, Tandem and Substitute Awards. Awards granted under the
Plan may, in the discretion of the Plan Administrator, be granted either alone or in addition to,
in tandem with or in substitution or exchange for, any other Award or any award granted under
another plan of the Company, any Related Entity or any business entity to be acquired by the
Company or a Related Entity or any other right of a Participant to receive payment from the Company
or any Related Entity. Such additional, tandem, and substitute or exchange Awards may be granted
at any time. If an Award is granted in substitution or exchange for another Award or award, the
Plan Administrator shall require the surrender of such other Award or award in consideration for
the grant of the new Award. In addition, Awards may be granted in lieu of cash compensation,
including in lieu of cash amounts payable under other plans of the Company or any Related Entity.

          (b) Form and Timing of Payment Under Awards; Deferrals. Subject to the terms of the
Plan and any applicable Award Agreement, payments to be made by the Company or a Related Entity
upon the exercise of an Option or other Award or settlement of an Award may be made in such forms
as the Plan Administrator shall determine, including, without limitation, cash, other Awards or
other property, and may be made in a single payment or transfer, in installments or on a deferred
basis. The settlement of any Award may be accelerated, and cash paid in lieu of Shares in
connection with such settlement, in the discretion of the Plan Administrator or upon occurrence of
one or more specified events (in addition to a Change in Control). Installment or deferred
payments may be

13

 

required by the Plan Administrator (subject to Section 10(g) of the Plan) or permitted at the
election of the Participant on terms and conditions established by the Plan Administrator.
Payments may include, without limitation, provisions for the payment or crediting of a reasonable
interest rate on installment or deferred payments or the grant or crediting of Dividend Equivalents
or other amounts in respect of installment or deferred payments denominated in Shares.

          (c) Exemptions from Section 16(b) Liability. It is the intent of the Company that
this Plan comply in all respects with applicable provisions of Rule 16b 3 or Rule 16a 1(c)(3) to
the extent necessary to ensure that neither the grant of any Awards to nor other transaction by a
Participant who is subject to Section 16 of the Exchange Act is subject to liability under Section
16(b) thereof (except for transactions acknowledged in writing to be non-exempt by such
Participant). Accordingly, if any provision of this Plan or any Award Agreement does not comply
with the requirements of Rule 16b 3 or Rule 16a 1(c)(3) as then applicable to any such transaction,
such provision will be construed or deemed amended to the extent necessary to conform to the
applicable requirements of Rule 16b 3 or Rule 16a 1(c)(3) so that such Participant shall avoid
liability under Section 16(b).

          (d) Code Section 409A. If and to the extent that the Plan Administrator believes that
any Awards may constitute a “nonqualified deferred compensation plan” under Section 409A of the
Code, the terms and conditions set forth in the Award Agreement for that Award shall be drafted in
a manner that is intended to comply with, and shall be interpreted in a manner consistent with, the
applicable requirements of Section 409A of the Code, unless otherwise agreed to in writing by the
Participant and the Company.

          (e) No Option Repricing. Other than pursuant to Section 10(c), without approval of
the Company’s shareholders, the Plan Administrator shall not be permitted to (A) lower the exercise
price per Share of an Option after it is granted, (B) cancel an Option when the exercise price per
Share exceeds the Fair Market Value of the underlying Shares in exchange for another Award or cash,
or (C) take any other action with respect to an Option that may be treated as a repricing.

     9. Change in Control; Corporate Transaction.

          (a) Change in Control.

               (i) The Plan Administrator may, in its discretion, accelerate the vesting, exercisability,
lapsing of restrictions or expiration of deferral of any Award, including upon a Change in Control.
In addition, the Plan Administrator may provide in an Award Agreement that the performance goals
relating to any Award will be deemed to have been met upon the occurrence of any Change in Control.

               (ii) In addition to the terms of Sections 9(a)(i) above, the effect of a “change in control,”
may be provided (1) in an employment, compensation or severance agreement, if any, between the
Company or any Related Entity and the Participant, relating to the Participant’s employment,
compensation or severance with or from the Company or such Related Entity or (2) in the Award
Agreement.

          (b) Corporate Transactions. In the event of a Corporate Transaction, any surviving
corporation or acquiring corporation (together, the “Successor Corporation”) may either (i) assume
any or all Awards outstanding under the Plan; (ii) continue any or all Awards outstanding under the
Plan; or (iii) substitute similar stock awards for outstanding Awards (it being understood that
similar awards include, but are not limited to, awards to acquire the same consideration paid to
the shareholders or the Company, as the case may be, pursuant to the Corporate Transaction). In
the event that the Successor Corporation does not assume or continue any or all such outstanding
Awards or substitute similar stock awards for such outstanding Awards, then with respect to Awards
that have been not assumed, continued or substituted, such Awards shall terminate if not exercised
(if applicable) at or prior to such effective time (contingent upon the effectiveness of the
Corporate Transaction).

          The Administrator, in its sole discretion, shall determine whether each Award is assumed,
continued, substituted or terminated. Notwithstanding the foregoing, to the extent that
substantially all of the holders of the Company’s Voting Stock hold or receive directly or
indirectly ninety percent (90%) or more of the Voting Stock of the resulting entity or a parent
company thereof, in substantially the same proportions as their

14

 

ownership of the Company immediately prior to the transaction, the Awards shall be either assumed
or substituted by the successor corporation or its parent or continued by the Company.

          The Plan Administrator, in its discretion and without the consent of any Participant, may (but
is not obligated to) either (i) accelerate the vesting of any Awards (determined on an Award by
Award basis), including permitting the lapse of any repurchase rights held by the Company (and, if
applicable, the time at which such Awards may be exercised), in full or as to some percentage of
the Award, to a date prior to the effective time of such Corporate Transaction as the Plan
Administrator shall determine (contingent upon the effectiveness of the Corporate Transaction) or
(ii) provide for a cash payment in exchange for the termination of an Award or any portion thereof
where such cash payment is equal to the Fair Market Value of the Shares that the Participant would
receive if the Award were fully vested and exercised (if applicable) as of such date (less any
applicable exercise price).

          Notwithstanding any other provision in this Plan to the contrary, with respect to Restricted
Stock and any other Award granted under the Plan with respect to which the Company has any
reacquisition or repurchase rights, the reacquisition or repurchase rights for such Awards may be
assigned by the Company to the successor of the Company (or the successor’s parent company) in
connection with such Corporate Transaction. In the event any such rights are not continued or
assigned to the Successor Corporation, then such rights shall lapse and the Award shall be fully
vested as of the effective time of the Corporate Transaction. In addition, the Plan Administrator,
in its discretion, may (but is not obligated to) provide that any reacquisition or repurchase
rights held by the Company with respect to any such Awards (determined on an Award by Award basis)
shall lapse in whole or in part (contingent upon the effectiveness of the Corporate Transaction).

          (c) Dissolution or Liquidation. In the event of a dissolution or liquidation of the
Company, then all outstanding Awards shall terminate immediately prior to the completion of such
dissolution or liquidation, and Shares subject to the Company’s repurchase option may be
repurchased by the Company notwithstanding the fact that the holder of such stock is still in
Continuous Service.

     10. General Provisions.

          (a) Compliance With Legal and Other Requirements. The Company may, to the extent
deemed necessary or advisable by the Plan Administrator, postpone the issuance or delivery of
Shares or payment of other benefits under any Award until completion of such registration or
qualification of such Shares or other required action under any federal or state law, rule or
regulation, listing or other required action with respect to any stock exchange or automated
quotation system upon which the Shares or other Company securities are listed or quoted or
compliance with any other obligation of the Company, as the Plan Administrator may consider
appropriate, and may require any Participant to make such representations, furnish such information
and comply with or be subject to such other conditions as it may consider appropriate in connection
with the issuance or delivery of Shares or payment of other benefits in compliance with applicable
laws, rules, and regulations, listing requirements or other obligations. The foregoing
notwithstanding, in connection with a Change in Control, the Company shall take or cause to be
taken no action, and shall undertake or permit to arise no legal or contractual obligation, that
results or would result in any postponement of the issuance or delivery of Shares or payment of
benefits under any Award or the imposition of any other conditions on such issuance, delivery or
payment, to the extent that such postponement or other condition would represent a greater burden
on a Participant than existed on the ninetieth (90th) day preceding the Change in Control.

          (b) Limits on Transferability; Beneficiaries.

               (i) General. Except as provided in the Award Agreement, a Participant may not assign,
sell, transfer or otherwise encumber or subject to any lien any Award or other right or interest
granted under this Plan, in whole or in part, other than by will or by operation of the laws of
descent and distribution, and such Awards or rights that may be exercisable shall be exercised
during the lifetime of the Participant only by the Participant or his or her guardian or legal
representative.

               (ii) Permitted Transfer of Option. The Plan Administrator, in its sole discretion,
may permit the transfer of an Option (but not an Incentive Stock Option or any other right to
purchase Shares other

15

 

than an Option) as follows: (A) by gift to a member of the Participant’s Immediate Family or (B)
by transfer by instrument to a trust providing that the Option is to be passed to beneficiaries
upon death of the Participant. For purposes of this Section 10(b)(ii), “Immediate Family” shall
mean the Participant’s spouse (including a former spouse subject to terms of a domestic relations
order); child, stepchild, grandchild, child-in-law; parent, stepparent, grandparent, parent-in-law;
sibling and sibling-in-law, and shall include adoptive relationships. If a determination is made
by counsel for the Company that the restrictions contained in this Section 10(b)(ii) are not
required by applicable federal or state securities laws under the circumstances, then the Plan
Administrator, in its sole discretion, may permit the transfer of Awards (other than Incentive
Stock Options and Stock Appreciation Rights in tandem therewith) to one or more Beneficiaries or
other transferees during the lifetime of the Participant, which may be exercised by such
transferees in accordance with the terms of such Award, but only if and to the extent permitted by
the Plan Administrator pursuant to the express terms of an Award Agreement (subject to any terms
and conditions which the Plan Administrator may impose thereon, and further subject to any
prohibitions and restrictions on such transfers pursuant to Rule 16b 3). A Beneficiary, transferee
or other person claiming any rights under the Plan from or through any Participant shall be subject
to all terms and conditions of the Plan and any Award Agreement applicable to such Participant,
except as otherwise determined by the Plan Administrator, and to any additional terms and
conditions deemed necessary or appropriate by the Plan Administrator.

          (c) Adjustments.

               (i) Adjustments to Awards. In the event that any dividend or other distribution
(whether in the form of cash, Shares or other property), recapitalization, forward or reverse
split, reorganization, merger, consolidation, spin-off, combination, repurchase, share exchange,
liquidation, dissolution or other similar corporate transaction or event affects the Shares and/or
such other securities of the Company or any other issuer such that a substitution, exchange or
adjustment is determined by the Plan Administrator to be appropriate, then the Plan Administrator
shall, in such manner as it may deem equitable, substitute, exchange or adjust any or all of (A)
the number and kind of Shares which may be delivered in connection with Awards granted thereafter,
(B) the number and kind of Shares by which annual per-person Award limitations are measured under
Section 5 hereof, (C) the number and kind of Shares subject to or deliverable in respect of
outstanding Awards, (D) the exercise price, grant price or purchase price relating to any Award
and/or make provision for payment of cash or other property in respect of any outstanding Award,
and (E) any other aspect of any Award that the Plan Administrator determines to be appropriate.

               (ii) Other Adjustments. The Plan Administrator (which shall be a Committee to the
extent such authority is required to be exercised by a Committee to comply with Code Section
162(m)) is authorized to make adjustments in the terms and conditions of, and the criteria included
in, Awards (including Awards subject to performance goals) in recognition of unusual or
nonrecurring events (including, without limitation, acquisitions and dispositions of businesses and
assets) affecting the Company, any Related Entity or any business unit, or the financial statements
of the Company or any Related Entity, or in response to changes in applicable laws, regulations,
accounting principles, tax rates and regulations or business conditions or in view of the Plan
Administrator’s assessment of the business strategy of the Company, any Related Entity or business
unit thereof, performance of comparable organizations, economic and business conditions, personal
performance of a Participant, and any other circumstances deemed relevant; provided that no such
adjustment shall be authorized or made if and to the extent that such authority or the making of
such adjustment would cause Options, Stock Appreciation Rights or Performance Awards granted to
Participants designated by the Plan Administrator as Covered Employees and intended to qualify as
“performance-based compensation” under Code Section 162(m) and the regulations thereunder to
otherwise fail to qualify as “performance-based compensation” under Code Section 162(m) and
regulations thereunder.

          (d) Taxes. The Company and any Related Entity are authorized to withhold from any
Award granted, any payment relating to an Award under the Plan, including from a distribution of
Shares or any payroll or other payment to a Participant, amounts of withholding and other taxes due
or potentially payable in connection with any transaction involving an Award, and to take such
other action as the Plan Administrator may deem advisable to enable the Company and Participants to
satisfy obligations for the payment of withholding taxes and other tax obligations relating to any
Award. This authority shall include authority to withhold or receive Shares or other property and
to make cash payments in respect thereof in satisfaction of a Participant’s tax obligations, either
on a mandatory or elective basis in the discretion of the Plan Administrator.

16

 

          (e) Changes to the Plan and Awards. The Board may amend, alter, suspend, discontinue
or terminate the Plan or the Committee’s authority to grant Awards under the Plan, without the
consent of shareholders or Participants. Any amendment or alteration to the Plan shall be subject
to the approval of the Company’s shareholders if such shareholder approval is deemed necessary and
advisable by the Board. However, without the consent of an affected Participant, no such amendment,
alteration, suspension, discontinuance or termination of the Plan may materially and adversely
affect the rights of such Participant under any previously granted and outstanding Award. The Plan
Administrator may waive any conditions or rights under or amend, alter, suspend, discontinue or
terminate any Award theretofore granted and any Award Agreement relating thereto, except as
otherwise provided in the Plan; provided that, without the consent of an affected Participant, no
such action may materially and adversely affect the rights of such Participant under such Award.

          (f) Limitation on Rights Conferred Under Plan. Neither the Plan nor any action taken
hereunder shall be construed as (i) giving any Eligible Person or Participant the right to continue
as an Eligible Person or Participant or in the employ of the Company or a Related Entity; (ii)
interfering in any way with the right of the Company or a Related Entity to terminate any Eligible
Person’s or Participant’s Continuous Service at any time, (iii) giving an Eligible Person or
Participant any claim to be granted any Award under the Plan or to be treated uniformly with other
Participants and Employees or (iv) conferring on a Participant any of the rights of a shareholder
of the Company unless and until the Participant is duly issued or transferred Shares in accordance
with the terms of an Award.

          (g) Unfunded Status of Awards; Creation of Trusts. The Plan is intended to constitute
an “unfunded” plan for incentive and deferred compensation. With respect to any payments not yet
made to a Participant or obligations to deliver Shares pursuant to an Award, nothing contained in
the Plan or any Award shall give any such Participant any rights that are greater than those of a
general creditor of the Company; provided that the Plan Administrator may authorize the creation of
trusts and deposit therein cash, Shares, other Awards or other property or make other arrangements
to meet the Company’s obligations under the Plan. Such trusts or other arrangements shall be
consistent with the “unfunded” status of the Plan unless the Plan Administrator otherwise
determines with the consent of each affected Participant. The trustee of such trusts may be
authorized to dispose of trust assets and reinvest the proceeds in alternative investments, subject
to such terms and conditions as the Plan Administrator may specify and in accordance with
applicable law.

          (h) Nonexclusivity of the Plan. Neither the adoption of the Plan by the Board nor its
submission to the shareholders of the Company for approval shall be construed as creating any
limitations on the power of the Plan Administrator to adopt such other incentive arrangements as it
may deem desirable including incentive arrangements and awards which do not qualify under Code
Section 162(m).

          (i) Fractional Shares. No fractional Shares shall be issued or delivered pursuant to
the Plan or any Award. The Plan Administrator shall determine whether cash, other Awards or other
property shall be issued or paid in lieu of such fractional shares or whether such fractional
shares or any rights thereto shall be forfeited or otherwise eliminated.

          (j) Governing Law. The validity, construction and effect of the Plan, any rules and
regulations under the Plan, and any Award Agreement shall be determined in accordance with the laws
of the State of Delaware without giving effect to principles of conflicts of laws, and applicable
federal law.

          (k) Plan Effective Date and Shareholder Approval; Termination of Plan. The Plan shall
become effective on the Effective Date, subject to subsequent approval within twelve (12) months of
its adoption by the Board by shareholders of the Company eligible to vote in the election of
directors, by a vote sufficient to meet the requirements of Code Sections 162(m) (if applicable)
and 422, Rule 16b 3 under the Exchange Act (if applicable), applicable Nasdaq requirements, and
other laws, regulations, and obligations of the Company applicable to the Plan. Awards may be
granted subject to shareholder approval, but may not be exercised or otherwise settled in the event
shareholder approval is not obtained. The Plan shall terminate no later than ten (10) years from
the date of the later of (x) the Effective Date and (y) the date an increase in the number of
shares reserved for issuance under he Plan is approved by the Board (so long as such increase is
also approved by the shareholders).

17Unassociated Document

    
 

    

    

    

    

    

    

    

    

    ASSET
      PURCHASE AGREEMENT

    

    

     

    

    

    

    Between:

    

    

    AERODYNE
      LLC

    

    

    

    And:

    

    

    EAGLE
      AERO HOLDINGS CORP.

    

    

    

    

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    

    

    ASSET
      PURCHASE AGREEMENT

    

    

    

    THIS
      ASSET PURCHASE AGREEMENT
      is dated
      and made for reference as fully executed on this 29th day of September, 2006
      (the “Effective
      Date”).

    

    

    BETWEEN:

    

    AERODYNE
      LLC,
      a
      company duly incorporated under the laws of the State of Delaware

    

    (the
      “Transferor”);

    OF
      THE FIRST PART

    

    AND:

    

    EAGLE
      AERO HOLDINGS CORP.,
      a
      company duly incorporated under the laws of the state of Delaware.

    

    (the
      “Transferee”);

    OF
      THE SECOND PART

    

    (the
      Transferor and the Transferee being hereinafter singularly also referred to
      as a
“Party”
and
      collectively referred to as the “Parties”
as
      the
      context so requires).

    

    

    WHEREAS:

    

    A. The
      Transferor is the owner of certain assets (the “Assets”),
      a
      complete listing of such Assets of the Transferor being set forth in Schedule
      “A” which is attached to this Agreement and which forms a material part
      hereof;

    

    B. The
      Transferee is desirous of acquiring the Assets of the Transferor.

    

    

    NOW
      THEREFORE THIS AGREEMENT WITNESSETH that,
      in
      consideration of the mutual covenants and provisos herein contained, THE
      PARTIES HERETO AGREE AS FOLLOWS:

    

    

    

    Article
      I

    DEFINITIONS,
      SCHEDULES AND INTERPRETATION

    

    1.1  Definitions.
      For all
      purposes of this Agreement, except as otherwise expressly provided or unless
      the
      context otherwise requires, the following words and phrases shall have the
      following meanings:

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    	(a)  	
            “Agreement”
              means this Asset Purchase Agreement as entered into between the Transferor
              and the Transferee herein, together with any amendments and any
              Schedules;

          

    

    	(b)  	
            “Assets”
              has the meaning ascribed to it in recital “A” hereinabove, and which
              Assets are particularly described in Schedule “A” which is attached
              hereto;

          

    

    	(c)  	
            “Board
              of Directors”
              means the respective Board of Directors of each of the Parties hereto,
              where applicable;

          

    

    	(d)  	
            “Confidential
              Information”
              has the meaning ascribed to it in section “9.1”
              hereinbelow;

          

    

    	(e)  	
            “Defaulting
              Party”
              and “Non-Defaulting
              Party”
              have the meanings ascribed to them in section “12.1”
              hereinbelow;

          

    

    	(f)  	
            “Effective
              Date”
              means the date first herein appearing;

          

    

    	(g)  	
            “Execution
              Date”
              means the actual date of the complete execution of this Agreement and
              any
              amendment thereto as set forth on the front page
              hereof;

          

    

    	(h)  	
            “Indemnified
              Party”
              has the meaning ascribed to it in section “13.1”
              hereinbelow;

          

    

    

    	(i)  	
            “Parties”
              or “Party”
              means, respectively, the Transferor and/or the Transferee hereto, as
              the
              case may be, together with their respective successors and permitted
              assigns as the context so requires;

          

    

    	(j)  	
            “person”
              or “persons”
              means an individual, corporation, partnership, party, trust, fund,
              association and any other organized group of persons and the personal
              or
              other legal representative of a person to whom the context can apply
              according to law;

          

    

    	(k)  	
            “Product”
              has the meaning set forth in recital “A”
herein;

          

    

    	(l)  	
            “Regulatory
              Authorities”
              and “Regulatory
              Authority”
              means a governmental or securities exchange and/or such other regulatory
              bodies and agencies who have jurisdiction over the affairs of any of
              the
              Parties hereto and including, without limitation, all Regulatory
              Authorities from whom any such authorization, approval or other action
              is
              required to be obtained or to be made in connection with the transactions
              contemplated by this Agreement;

          

    

    

    1.2  Schedules. For
      the
      purposes of this Agreement, except as otherwise expressly provided or unless
      the
      context otherwise requires, the following shall represent the Schedules which
      are attached to this Agreement and which form a material part
      hereof:

     

    
 

    
      	 	Schedule      	Description
	 	 	 
	 	Schedule “A”:     	List
              of Assets being sold to the Transferee

    

    

    

    

    1.3  Interpretation. For
      the
      purposes of this Agreement, except as otherwise expressly provided or unless
      the
      context otherwise requires,:

    

    
      	 	
              (a)

            	
              the
                words “herein”, “hereof” and “hereunder” and other words of similar import
                refer to this Agreement as a whole and not to any particular Article,
                section or other subdivision of this
                Agreement;

            

    

     

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    
 

    
      	 	
              (b)

            	
              the
                headings are for convenience only and do not form a part of this
                Agreement
                nor are they intended to interpret, define or limit the scope or
                extent of
                this or any provision of this
                Agreement;

            

    

    

    
      	 	
              (c)

            	
              any
                reference to an entity shall include and shall be deemed to be a
                reference
                to any entity that is a permitted successor to such entity;
                and

            

    

    

    
      	 	
              (d)

            	
              words
                in the singular include the plural and words in the masculine gender
                include the feminine and neuter genders, and vice
                versa.

            

    

    

    

    Article
      2

    PURCHASE
      AND SALE OF ASSETS

    

    

    2.1  Purchase
      and Sale.
      The
      Transferee hereby purchases, without condition, and the Transferor hereby sells,
      without condition, the Assets in exchange for 1,600,000 shares of common stock
      of the Transferee (having a deemed value of $800,000 US) (the “Purchase Price”)
      to be paid upon closing. 

    

    

    Article
      3

    INSPECTION

    

    

    3.1  Inspection.
      The
      Transferor shall have, on at least five business days’ notice, unimpeded right
      and authority to enter on the premises of the Transferee, its representatives,
      its agents, its counsel or any other party having control or possession of
      records or premises of the Transferee or in relation to its production or sales
      or distribution of the Products, for the purpose of all such investigations
      as
      the Transferor may require to assure themselves as to the compliance by the
      Transferee with appropriate accounting provisions of this Agreement. In this
      regard the Transferee covenants to allow and assist the Transferor, and the
      Transferor’s duly authorized representatives, access to all the aforesaid
      premises and locations and access to all such personnel and other persons as
      the
      Transferor may require, and the Transferee shall make such premises, records
      and
      persons available within five business days of notice by the Transferor. In
      the
      event that any aforesaid party refuses or delays or omits to give the Transferor
      entry and access to premises or records, the Transferee warrants to give the
      Transferor all reasonable assistance to effect such end (including any written
      permissions or filings or affidavits for applications to Courts) and the
      Transferee attorns to the jurisdiction of Delaware the
      Court
      selected by the Transferor and waives any and all defenses to any applications
      for relief from the Transferor’ selected Court jurisdiction, including for
      injunctions, mareva
      orders,
      freeze orders or any other relief that the Transferor may think good and
      appropriate.

    

    

    Article
      4

    REPRESENTATIONS,
      WARRANTIES AND COVENANTS BY THE TRANSFEROR

    

    4.1  Representations,
      Warranties and Covenants by the Transferor.
      In
      order to induce the Transferee to enter into and consummate this Agreement,
      the
      Transferor represents to and warrants to the Transferee that, to the best of
      the
      informed knowledge, information and belief of the Transferor, after having
      made
      due inquiry:

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    (a) the
      Transferor is duly incorporated under the laws of its jurisdiction of
      incorporation and is validly existing and in good standing with respect to
      all
      statutory filings required by the applicable corporate laws;

    

    (b) the
      Transferor is qualified to do business in those jurisdictions where it is
      necessary to fulfill its obligations under this Agreement and the Transferor
      has
      the full power and authority to enter into this Agreement and any agreement
      or
      instrument referred to or contemplated by this Agreement;

    

    
      	 	
              (c)

            	
              the
                Transferor is the registered and beneficial owner of all interests
                in the
                Assets and has the requisite power, authority and capacity to own
                and use
                the Assets and the Transferor owns the right to develop and maintain
                the
                Assets;

            

    

    

    (d) the
      Transferor owns and possesses and has good and marketable title to and
      possession of all of the Assets free and clear of all actual or threatened
      liens, charges, options, encumbrances, voting agreements, voting trusts,
      demands, limitations and restrictions of any nature whatsoever;

    

    
      	 	
              (e)

            	
              no
                person, firm or corporation has any written or oral agreement, option,
                understanding or commitment, or any right or privilege capable of
                becoming
                an agreement, for the purchase from the Transferor of any of the
                Assets;

            

    

    

    
      	 	
              (f)

            	
              there
                are no outstanding orders or directions relating to any matters requiring
                any work, repairs, construction or capital expenditures with respect
                to
                any of the Assets and the conduct of the operations related thereto,
                nor
                has the Transferor received any notice of
                same;

            

    

    

    
      	 	
              (g)

            	
              there
                is no adverse claim or challenge against or to the ownership of or
                title
                to any of the Assets or which may impede the development of any of
                the
                Assets, nor, to the best of the knowledge, information and belief
                of the
                Transferor, after having made due inquiry, is there any basis for
                any
                potential claim or challenge, and, to the best of the knowledge,
                information and belief of the Transferor, after having made due inquiry,
                and other than as provided for herein, no persons have any royalty,
                net
                profits or other interests whatsoever in revenues or sales from any
                of the
                Assets;

            

    

    

    
      	
            	(h)	
              there
                are no actions, suits, proceedings or investigations (whether or
                not
                purportedly against or on behalf of the Transferor or the Assets),
                pending
                or threatened, which may affect, without limitation, the rights of
                the
                Transferor to transfer any of the Assets to the Transferee at law
                or in
                equity, or before or by any federal, state, provincial, municipal
                or other
                governmental department, commission, board, bureau, agency or
                instrumentality, domestic or foreign, and, without limiting the generality
                of the foregoing, there are no claims or potential claims under any
                relevant family relations legislation or other equivalent legislation
                affecting the Assets. In addition, the Transferor is not now aware
                of any
                existing ground on which any such action, suit or proceeding might
                be
                commenced with any reasonable likelihood of
                success;

            

    

    

    
      	
            	(i)	
              the
                Transferor has not experienced, nor is the Transferor aware of, any
                occurrence or event which has had, or might reasonably be expected
                to
                have, a materially adverse affect on the
                Assets;

            

    

    

    
      	
            	(j)	
              there
                is not any proceeding, claim or, to the best of the knowledge, information
                and belief of the Transferor, after having made due inquiry, any
                investigation by any federal, state or municipal taxation authority,
                or
                any matters under discussion or dispute with such taxation authorities,
                in
                respect of taxes, governmental charges, assessments or reassessments
                in
                connection with the Transferor or the Assets, and the Transferor
                is not
                aware of any contingent tax liabilities or any grounds that could
                result
                in an assessment, reassessment, charge or potentially adverse
                determination by any federal, state or municipal taxation authority
                as
                against the Transferor or the
                Assets;

            

    

     

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    
 

    
      	
            	(k)	
              the
                Transferor is not in breach of any provision or condition of, nor
                has the
                Transferor done or omitted to do anything that, with or without the
                giving
                of notice or lapse or both, would constitute a breach of any provision
                or
                condition of, or give rise to any right to terminate or cancel or
                accelerate the maturity of any payment under, any deed of trust,
                contract,
                certificate, consent, permit, license or other instrument to which
                the
                Transferor is a party, by which the Transferor is bound or from which
                the
                Transferor derives benefit, or any judgment, decree, order, rule
                or
                regulation of any Court or governmental authority to which the Transferor
                is subject, or any statute or regulation applicable to the Transferor,
                to
                an extent that, in the aggregate, has a material adverse affect on
                the
                Transferor or the Assets;

            

    

    

    
      	 	
              (l)

            	
              the
                Transferor is not required to obtain any authorizations, approvals,
                or
                waivers that may be necessary or desirable in connection with the
                transactions contemplated in this
                Agreement;

            

    

    

    
      	 	
              (m)

            	
              the
                Transferor has not committed to sell, license, distribute, option,
                or
                otherwise dispose of or grant any interest in all or any part of
                the
                Assets or agree to do or perform any act or enter into any transaction
                or
                negotiation which could reasonably be expected to interfere with
                this
                Agreement or which would render inaccurate any of the representations,
                warranties or covenants set forth in this
                Agreement;

            

    

    

    
      	 	
              (n)

            	
              the
                execution and delivery of this Agreement and the agreements contemplated
                hereby have been duly authorized by all necessary action, corporate
                or
                otherwise, or will have been so authorized at the relevant
                time;

            

    

    

    
      	
            	(o)	
              this
                Agreement constitutes a legal, valid and binding obligation of the
                Transferor enforceable against it in accordance with its terms, except
                as
                enforcement may be limited by laws of general application affecting
                the
                rights of creditors;

            

    

    

    
      	
            	(p)	
              no
                proceedings are pending for, and the Transferor is unaware of, any
                basis
                for the institution of any proceedings leading to its respective
                dissolution or winding up, or the placing of it in bankruptcy or
                subject
                to any other laws governing the affairs of insolvent
                companies;

            

    

    

    
      	
            	(q)	
              the
                making of this Agreement and the completion of the transactions
                contemplated hereby and the performance of and compliance with the
                terms
                hereof does not and will not:

            

    

    

    
      	
            	(i)	
              conflict
                with or result in a breach of or violate any of the terms, conditions
                or
                provisions of the Transferor’s constating
                documents;

            

    

    

    
      	
            	(ii)	
              conflict
                with or result in a breach of or violate any of the terms, conditions
                or
                provisions of any law, judgment, order, injunction, decree, regulation
                or
                ruling of any court or governmental authority, domestic or foreign,
                to
                which the Transferor is subject, or constitute or result in a default
                under any agreement, contract or commitment to which the Transferor
                is a
                party;

            

    

    

    
      	
            	(iii)	
              give
                to any party the right of termination, cancellation or acceleration
                in or
                with respect to any agreement, contract or commitment to which the
                Transferor is a party;

            

    

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    
 

    
      	
            	(iv)	
              give
                to any government or governmental authority, or any municipality
                or any
                subdivision thereof, including any governmental department, commission,
                bureau, board or administration agency, any right of termination,
                cancellation or suspension of, or constitute a breach of or result
                in a
                default under, any permit, license, control or authority issued to
                the
                Transferor which is necessary or desirable in connection with the
                conduct
                and operations of its respective Business and the ownership or leasing
                of
                its respective Assets or other assets;
                or

            

    

    

    
      	
            	(v)	
              constitute
                a default by, or any event which, with the giving of notice or lapse
                of
                time or both, might constitute an event of default, under any agreement,
                contract, indenture or other instrument of the Transferor which would
                give
                any party to that agreement, contract, indenture or other instrument
                the
                right to terminate, accelerate, modify, or effect any act which would
                materially negatively affect the
                Assets;

            

    

    

    
      	
            	(r)	
              the
                Transferor is not aware of any fact or circumstance which has not
                been
                disclosed to the Transferee which should be disclosed in order to
                prevent
                the representations, warranties and covenants contained in this section
                from being misleading or which would likely affect the decision of
                the
                Transferee to enter into this Agreement;

            

    

    

    
      	
            	(s)	
              neither
                this Agreement nor any other document, certificate or statement furnished
                to the Transferee by or on behalf of the Transferor in connection
                with the
                transactions contemplated hereby knowingly or negligently contains
                any
                untrue or incomplete statement of material fact or omits to state
                a
                material fact necessary in order to make the statements therein not
                misleading which would likely affect the decision of the Transferee
                to
                enter into this Agreement; and

            

    

    

    
      	
            	(t)	
              the
                Transferor will employ good faith, due diligence, and best efforts
                to
                perform its obligations of this Agreement and will enter into such
                additional or collateral agreements as may be reasonably required
                by the
                Transferee to effect and complete the objects and intent of this
                Agreement.

            

    

    

    4.2  Continuity
      of the Representations, Warranties and Covenants by the
      Transferor.
      The
      representations, warranties and covenants by the Transferor contained in this
      Article, or in any certificates or documents delivered pursuant to the
      provisions of this Agreement or in connection with the transactions contemplated
      hereby, will be true at and as of the Effective Date. Notwithstanding any
      investigations or inquiries made by the Transferee or by the Transferee’s
      professional advisors, or the waiver of any condition by the Transferee, the
      representations, warranties and covenants of the Transferor contained in this
      Article shall continue in full force and effect for a period of twelve (12)
      months from the Effective Date; provided, however, that the Transferor shall
      not
      be responsible for the breach of any representation, warranty or covenant of
      the
      Transferor contained herein caused by any act or omission of the Transferee.
      In
      the event that any of the representations, warranties or covenants of the
      Transferor are found by a Court of competent jurisdiction to be incorrect and
      such incorrectness results in any loss or damage sustained, directly or
      indirectly, by the Transferee, then the Transferor will pay the amount of such
      loss or damage to the Transferee within 30 calendar days of receiving notice
      of
      judgment therefor; provided that the Transferee will not be entitled to make
      any
      claim unless the loss or damage suffered may exceed the amount of
      $10,000.

    

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    

    Article
      5

    WARRANTIES,
      REPRESENTATIONS AND COVENANTS BY THE TRANSFEREE

    

    5.1  Warranties,
      Representations and Covenants by the Transferee.
      In
      order to induce the Transferor to enter into and consummate this Agreement,
      the
      Transferee hereby warrants to and represents to the Transferor that, to the
      best
      of the informed knowledge, information and belief of the Transferee, after
      having made due inquiry:

    

    
      	
            	(a)	
              the
                Transferee is duly incorporated under the laws of its jurisdiction
                of
                incorporation and is validly existing and in good standing with respect
                to
                all statutory filings required by the applicable corporate
                laws;

            

    

    

    
      	 	
              (b)

            	
              the
                execution and delivery of this Agreement and the agreements contemplated
                hereby has been duly authorized by all necessary corporate action
                on its
                part;

            

    

    

    
      	 	
              (c)

            	
              there
                are no consents, approvals or conditions precedent to the performance
                of
                this Agreement;

            

    

    

    
      	 	
              (d)

            	
              this
                Agreement constitutes a legal, valid and binding obligation of the
                Transferee enforceable against the Transferee in accordance with
                its
                terms, except as enforcement may be limited by laws of general application
                affecting the rights of creditors;

            

    

    

    
      	 	
              (e)

            	
              no
                proceedings are pending for, and the Transferee is unaware of, any
                basis
                for the institution of any proceedings leading to the dissolution
                or
                winding up of the Transferee or the placing of the Transferee in
                bankruptcy or subject to any other laws governing the affairs of
                insolvent
                companies;

            

    

    

    
      	 	
              (f)

            	
              the
                Transferee is not in breach of any laws, ordinances, statutes,
                regulations, by-laws, orders or decrees to which it is subject or
                which
                apply to it;

            

    

    

    
      	 	
              (g)

            	
              there
                has been and there will be prepared and filed on a timely basis all
                federal and state income tax returns, elections and designations,
                and all
                other governmental returns, notices and reports of which the Transferee
                had, or ought reasonably to have had, knowledge required to be or
                reasonably capable of being filed with respect to the operations
                of the
                Transferee, and no such returns, elections, designations, notices
                or
                reports contain or will contain any material misstatement or omit
                any
                material statement that should have been included, and each such
                return,
                election, designation, notice or report, including accompanying schedules
                and statements, is and will be true, correct and complete in all
                material
                respects;

            

    

    

    

    

    
      	 	
              (h)

            	
              the
                making of this Agreement and the completion of the transactions
                contemplated hereby and the performance of and compliance with the
                terms
                hereof does not and will not:

            

    

    

    
      	 	 	
              (i)

            	
              conflict
                with or result in a breach of or violate any of the terms, conditions
                or
                provisions of the constating documents of the
                Transferee;

            

    

    

    
      	 	 	
              (ii)

            	
              conflict
                with or result in a breach of or violate any of the terms, conditions
                or
                provisions of any law, judgment, order, injunction, decree, regulation
                or
                ruling of any Court or governmental authority, domestic or foreign,
                to
                which the Transferee is subject, or constitute or result in a default
                under any agreement, contract or commitment to which the Transferee
                is a
                party;

            

    

    

    
      	 	 	
              (iii)

            	
              give
                to any party the right of termination, cancellation or acceleration
                in or
                with respect to any agreement, contract or commitment to which the
                Transferee is a party;

            

    

     

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    
 

    
      	 	 	
              (iv)

            	
              give
                to any government or governmental authority, or any municipality
                or any
                subdivision thereof, including any governmental department, commission,
                bureau, board or administration agency, any right of termination,
                cancellation or suspension of, or constitute a breach of or result
                in a
                default under, any permit, license, control or authority issued to
                the
                Transferee which is necessary or desirable in connection with the
                conduct
                and operations of its business and the ownership or leasing of its
                business assets; or

            

    

    

    
      	 	 	
              (v)

            	
              constitute
                a default by the Transferee, or any event which, with the giving
                of notice
                or lapse of time or both, might constitute an event of default, under
                any
                agreement, contract, indenture or other instrument relating to any
                indebtedness of the Transferee which would give any party to that
                agreement, contract, indenture or other instrument the right to accelerate
                the maturity for the payment of any amount payable under that agreement,
                contract, indenture or other
                instrument;

            

    

    

    
      	 	
              (i)

            	
              neither
                this Agreement nor any other document, certificate or statement furnished
                to the Transferor by or on behalf of the Transferee in connection
                with the
                transactions contemplated hereby knowingly or negligently contains
                any
                untrue or incomplete statement of material fact or omits to state
                a
                material fact necessary in order to make the statements therein not
                misleading; 

            

    

    

    
      	
            	(j)	
              the
                Transferee is not aware of any fact or circumstance which has not
                been
                disclosed to the Transferor which should be disclosed in order to
                prevent
                the representations, warranties and covenants contained in this section
                from being misleading or which would likely affect the decision of
                the
                Transferor to enter into this Agreement;
                and

            

    

    

    
      	
            	(k)	
              the
                Transferee will employ good faith, due diligence, and best efforts
                to
                perform its obligations of this Agreement and will enter into such
                additional or collateral agreements as may be reasonably required
                to
                effect and complete the objects and intent of this
                Agreement.

            

    

    

    

    5.2  Continuity
      of the Representations, Warranties and Covenants by the
      Transferee.
      The
      representations, warranties and covenants of the Transferee contained in this
      Article, or in any certificates or documents delivered pursuant to the
      provisions of this Agreement or in connection with the transactions contemplated
      hereby, will be true at and as of the Effective Date. Notwithstanding any
      investigations or inquiries made by the Transferor or by the Transferor’s
      respective professional advisors prior to the Effective Date, or the waiver
      of
      any condition by the Transferor, the representations, warranties and covenants
      of the Transferee contained in this Article shall survive the Effective Date
      and
      shall continue in full force and effect for a period of twelve (12) months
      from
      the Effective Date; provided, however, that the Transferee shall not be
      responsible for the breach of any representation, warranty or covenant of the
      Transferee contained herein caused by any act or omission of the Transferor.
      In
      the event that any of the said representations, warranties or covenants are
      found by a Court of competent jurisdiction to be incorrect and such
      incorrectness results in any loss or damage sustained, directly or indirectly,
      by the Transferor, then the Transferee will pay the amount of such loss or
      damage to the Transferor within 30 calendar days of receiving notice of judgment
      therefor; provided that the Transferor will not be entitled to make any claim
      unless the loss or damage suffered may exceed the amount of
      $10,000.

    

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    

    

    Article
      6

    N/A

    

     

    Article
      7

    ADDITIONAL
      TERMS

    

    

    7.1  Due
      Diligence.
      Each of
      the Parties hereto may conduct such further due diligence examination of the
      other Parties hereto as it deems appropriate. In that regard the Parties agree
      that each shall have full and complete access to the other Parties’ books,
      records, financial statements and other documents, articles of incorporation,
      by-laws, minutes of Board of Directors’ meetings and its committees, investment
      agreements, material contracts and as well such other documents and materials
as
      the Parties hereto, or their respective counsel, may deem reasonable and
      necessary to conduct an adequate due diligence investigation of each Party,
      its
      respective operations and financial condition prior to the Closing.

    

    7.2  No
      Conflict, No Competition and Non-Circumvention.
      The
      Transferor hereby warrants and agrees with the Transferee that the Transferor
      shall not engage in any business or activity whatsoever which reasonably may
      be
      determined by the Transferee, in its sole and absolute discretion, to compete
      with any portion of the Business or Asset interests as contemplated hereby
      without the prior written consent of the Board of Directors of the Transferee.
      For the purposes of the foregoing the Transferor hereby recognizes and agrees
      that a breach of any of the covenants herein contained would result in
      irreparable harm and significant damage to the Transferee that would not be
      adequately compensated for by monetary award. Accordingly, the Transferor agrees
      that in the event of any such breach, in addition to being entitled as a matter
      of right to apply to a Court of competent equitable jurisdiction for relief
      by
      way of restraining order, injunction, decree or otherwise as may be appropriate
      to ensure compliance with the provisions hereof, the Transferor will also be
      liable to the Transferee, as liquidated damages, for an amount equal to the
      amount received and earned by the Transferor as a result of and with respect
      to
      any such breach. The Parties hereto hereby acknowledge and agree that if any
      of
      the aforesaid restrictions, activities, obligations or periods are considered
      by
      a Court of competent jurisdiction as being unreasonable, the Parties hereto
      agree that said Court shall have authority to limit such restrictions,
      activities or periods as the Court deems proper in the circumstances. In
      addition, the Parties hereto further acknowledge and agree that all restrictions
      or obligations in this Agreement are necessary and fundamental to the protection
      of the proposed Business of the Transferee and are reasonable and valid, and
      all
      defenses to the strict enforcement thereof by the Transferor are hereby
      waived.

    

    7.3  Opinions,
      Reports and Advice of the Transferor.
      The
      Transferor hereby acknowledges and agrees that all written and oral opinions,
      reports, advice and materials provided by the Transferor to the Transferee
      in
      connection with the Assets hereunder are intended solely for the Transferee’s
      benefit and for the Transferee’s use only, and that any such written and oral
      opinions, reports, advice and information are the exclusive property of the
      Transferee. In this regard the Transferor hereby covenants and agrees that
      the
      Transferee may utilize any such opinion, report, advice and materials for any
      other purpose whatsoever and, furthermore, may reproduce, disseminate, quote
      from and refer to, in whole or in part, at any time and in any manner, any
      such
      opinion, report, advice and materials in its sole and absolute
      discretion.

    

    7.4  Additional
      Documents and Acts by Transferor.
      The
      Transferor will also cause or deliver, or cause to be delivered, to the
      Transferee, at the times stipulated, the following:

    

    
      	 	
              (a)

            	
              upon
                the request of the Transferee, all documentation as may be necessary
                and
                as may be required by counsel for the Transferee, acting reasonably,
                to
                ensure that all of the Assets have been duly transferred, assigned
                and are
                registerable in the name of and for the benefit of the Transferee
                under
                applicable corporate laws and including, without limitation, all
                necessary
                deeds, conveyances, bills of sale, assurances, transfers, contract
                assignments, sales agreement assignments, development agreement
                assignments, royalty assignments, license assignments, manufacturing
                agreement assignments, supply agreement assignments, consents and
                any
                other documents necessary or reasonably required effectively to transfer
                all of the Assets and the business of the Assets to the Transferee
                with a
                good and marketable title, free and clear of all mortgages, liens,
                charges, pledges, claims, security interests or encumbrances
                whatsoever;

            

    

    

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    
      	 	
              (b)

            	
              within
                10 days of the Effective Date, a certified copy of the resolutions
                of the
                directors and shareholders of the Transferor authorizing the transfer
                by
                the Transferor to the Transferee of all of the Assets in accordance
                with
                the terms of this Agreement;

            

    

    

    
      	 	
              (c)

            	
              within
                30 days of the Effective Date, all necessary consents and approvals
                in
                writing to the completion of the transactions contemplated herein
                and
                including, without limitation, approval from all Regulatory Authorities
                having jurisdiction over the Transferor and the Assets or a certificate
                of
                counsel of the Transferor that no such consents are required;
                

            

    

    

     

    

    

    Article
      8

    NON-DISCLOSURE

    

    8.1  Non-disclosure.
      The
      Parties hereto, for themselves, their officers, directors, shareholders,
      consultants, employees and agents, agree that they each will not disseminate
      or
      disclose, or knowingly allow, permit or cause others to disseminate or disclose
      to third parties who are not subject to express or implied covenants of
      confidentiality, without the other Parties’ express written consent, either: (i)
      the fact or existence of this Agreement or discussions and/or negotiations
      between them involving, inter
      alia,
      possible business transactions; (ii) the possible substance or content of those
      discussions; (iii) the possible terms and conditions of any proposed
      transaction; (iv) any statements or representations (whether verbal or written)
      made by either Party in the course of or in connection with those discussions;
      or (v) any written material generated by or on behalf of any Party and such
      contacts, other than such disclosure as may be required under applicable
      securities legislation or regulations, pursuant to any order of a Court or
      on a
“need to know” basis to each of the Parties’ respective professional
      advisors.

    

    

    Article
      9

    PROPRIETARY
      INFORMATION

    

    9.1  Confidential
      Information.
      Each
      Party hereto acknowledges that any and all information which a Party may obtain
      from, or have disclosed to it, about the other Parties constitutes valuable
      trade secrets and proprietary confidential information of the other Parties
      (collectively, the “Confidential
      Information”).
      No
      such Confidential Information shall be published by any Party without the prior
      written consent of the other Parties hereto, however, such consent in respect
      of
      the reporting of factual data shall not be unreasonably withheld, and shall
      not
      be withheld in respect of information required to be publicly disclosed pursuant
      to applicable securities or corporation laws. Furthermore, each Party hereto
      undertakes not to disclose the Confidential Information to any third party
      without the prior written approval of the other Parties and to ensure that
      any
      third party to which the Confidential Information is disclosed shall execute
      an
      agreement and undertaking on the same terms as contained herein.

    

    9.2  Impact
      of Breach of Confidentiality.
      The
      Parties hereto acknowledge that the Confidential Information is important to
      the
      respective businesses of each of the Parties and that, in the event of
      disclosure of the Confidential Information, except as authorized hereunder,
      the
      damage to each of the Parties hereto, or to either of them, may be irreparable.
      For the purposes of the foregoing sections the Parties recognize and hereby
      agree that a breach by any of the Parties of any of the covenants therein
      contained would result in irreparable harm and significant damage to each of
      the
      other Parties that would not be adequately compensated for by monetary award.
      Accordingly, the Parties agree that in the event of any such breach, in addition
      to being entitled as a matter of right to apply to a Court of competent
      equitable jurisdiction for relief by way of restraining order, injunction,
      decree or otherwise as may be appropriate to ensure compliance with the
      provisions hereof, any such Party will also be liable to the other Parties,
      as
      liquidated damages, for an amount equal to the amount received and earned by
      such Party as a result of and with respect to any such breach. The Parties
      also
      acknowledge and agree that if any of the aforesaid restrictions, activities,
      obligations or periods are considered by a Court of competent jurisdiction
      as
      being unreasonable, the Parties agree that said Court shall have authority
      to
      limit such restrictions, activities or periods as the court deems proper in
      the
      circumstances. In addition, the Parties further acknowledge and agree that
      all
      restrictions or obligations in this Agreement are necessary and fundamental
      to
      the protection of the respective businesses of each of the Parties and are
      reasonable and valid, and all defenses to the strict enforcement thereof by
      either of the Parties are hereby waived by the other Parties.

    

    

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    Article
      10

    N/A

    

    

    Article
      11

    FORCE
      MAJEURE

    

    11.1  Events.
      If any
      Party hereto is at any time prevented or delayed in complying with any
      provisions of this Agreement by reason of strikes, walk-outs, labour shortages,
      power shortages, fires, wars, acts of God, earthquakes, storms, floods,
      explosions, accidents, protests or demonstrations by environmental lobbyists
      or
      native rights groups, delays in transportation, breakdown of machinery,
      inability to obtain necessary materials in the open market, unavailability
      of
      equipment, governmental regulations restricting normal operations, shipping
      delays or any other reason or reasons beyond the control of that Party, then
      the
      time limited for the performance by that Party of its respective obligations
      hereunder shall be extended by a period of time equal in length to the period
      of
      each such prevention or delay.

    

    11.2  Notice.
      A Party
      shall, within seven calendar days, give notice to the other Party of each event
      of force
      majeure
      under
      section “14.1” hereinabove, and upon cessation of such event shall furnish the
      other Party with notice of that event together with particulars of the number
      of
      days by which the obligations of that Party hereunder have been extended by
      virtue of such event of force
      majeure
      and all
      preceding events of force
      majeure.

    

    

    Article
      12

    DEFAULT
      AND TERMINATION

    

    12.1  Default.
      The
      Parties hereto agree that if any Party hereto is in default with respect to
      any
      of the provisions of this Agreement (herein called the “Defaulting
      Party”),
      the
      non-defaulting Party (herein called the “Non-Defaulting
      Party”)
      shall
      give notice to the Defaulting Party designating such default, and within 10
      calendar days after its receipt of such notice, the Defaulting Party shall
      cure
      such default, or commence proceedings to cure such default and prosecute the
      same to completion without undue delay.

    

    

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    

    

    Article
      13

    INDEMNIFICATION
      AND LEGAL PROCEEDINGS

    

    13.1  Indemnification.
      The
      Parties hereto agree to indemnify and save harmless the other Party hereto,
      including its respective affiliates and their respective directors, officers,
      employees and agents (each such party being an “Indemnified
      Party”)
      from
      and against any and all losses, claims, actions, suits, proceedings, damages,
      liabilities or expenses of whatever nature or kind, including any investigation
      expenses incurred by any Indemnified Party, to which an Indemnified Party may
      become subject by reason of an act or inaction of the other Party.

    

    13.2  Claim
      of Indemnification.
      The
      Parties hereto agree to waive any right they might have of first requiring
      the
      Indemnified Party to proceed against or enforce any other right, power, remedy,
      security or claim payment from any other person before claiming this
      indemnity.

    

    13.3  Notice
      of Claim.
      In case
      any action is brought against an Indemnified Party in respect of which indemnity
      may be sought against any of the Parties hereto, the Indemnified Party will
      give
      the relevant Party hereto prompt written notice of any such action of which
      the
      Indemnified Party has knowledge and such Party will undertake the investigation
      and defense thereof on behalf of the Indemnified Party, including the prompt
      retaining of counsel acceptable to the Indemnified Party affected and the
      payment of all expenses. Failure by the Indemnified Party to so notify shall
      not
      relieve any Party hereto of such Party’s obligation of indemnification hereunder
      unless (and only to the extent that) such failure results in a forfeiture by
      any
      Party hereto of substantive rights or defenses.

    

    13.4  Settlement.
      No
      admission of liability and no settlement of any action shall be made without
      the
      consent of the Indemnified Party affected, such consent not to be unreasonably
      withheld.

    

    13.5  Legal
      Proceedings.
      Notwithstanding that the relevant Party hereto will undertake the investigation
      and defense of any action, an Indemnified Party will have the right to employ
      separate counsel in any such action and participate in the defense thereof,
      but
      the fees and expenses of such counsel will be at the expense of the Indemnified
      Party unless:

    

    
      	 	
              (a)

            	
              such
                counsel has been authorized by the relevant Party
                hereto;

            

    

    

    
      	 	
              (b)

            	
              the
                relevant Party hereto has not assumed the defense of the action within
                a
                reasonable period of time after receiving notice of the
                action;

            

    

    

    
      	 	
              (c)

            	
              the
                named parties to any such action include that any Party hereto and
                the
                Indemnified Party shall have been advised by counsel that there may
                be a
                conflict of interest between any Party hereto and the Indemnified
                Party;
                or

            

    

    

    
      	 	
              (d)

            	
              there
                are one or more legal defenses available to the Indemnified Party
                which
                are different from or in addition to those available to any Party
                hereto.

            

    

    

    

    

    Article
      14

    NOTICE

    

    14.1  Notice.
      Each
      notice, demand or other communication required or permitted to be given under
      this Agreement shall be in writing and shall be sent by prepaid registered
      mail
      addressed to the Party entitled to receive the same, or delivered to such Party,
      at the address for such Party specified above. The date of receipt of such
      notice, demand or other communication shall be the date of delivery thereof
      if
      delivered, or, if given by registered mail as aforesaid, shall be deemed
      conclusively to be the third calendar day after the same shall have been so
      mailed, except in the case of interruption of postal services for any reason
      whatsoever, in which case the date of receipt shall be the date on which the
      notice, demand or other communication is actually received by the
      addressee.

    

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    14.2  Change
      of Address.
      Either
      Party may at any time and from time to time notify the other Party in writing
      of
      a change of address and the new address to which notice shall be given to it
      thereafter until further change.

    

    

    Article
      15

    GENERAL
      PROVISIONS

    

    15.1  Entire
      Agreement.
      This
      Agreement constitutes the entire agreement to date between the Parties hereto
      and supersedes every previous agreement, communication, expectation,
      negotiation, representation or understanding, whether oral or written, express
      or implied, statutory or otherwise, between the Parties hereto with respect
      to
      the subject matter of this Agreement.

    

    15.2  Enurement.
      This
      Agreement will enure to the benefit of and will be binding upon the Parties
      hereto, their respective heirs, executors, administrators and
      assigns.

    

    15.3  Schedules.
      The
      Schedules to this Agreement are hereby incorporated by reference into this
      Agreement in its entirety.

    

    15.4  Time
      of the Essence.
      Time
      will be of the essence of this Agreement.

    

    15.5  Applicable
      Law.
      The
      situs of this Agreement is Vancouver, British Columbia, and for all purposes
      this Agreement will be governed exclusively by and construed and enforced in
      accordance with the laws and Courts prevailing in the Province of British
      Columbia.

    

    15.6  Further
      Assurances.
      The
      Parties hereto hereby, jointly and severally, covenant and agree to forthwith,
      upon request, execute and deliver, or cause to be executed and delivered, such
      further and other deeds, documents, assurances and instructions as may be
      required by the Parties hereto or their respective counsel in order to carry
      out
      the true nature and intent of this Agreement.

    

    15.7  Currency.
      Unless
      otherwise stipulated, all payments required to be made pursuant to the
      provisions of this Agreement and all money amount references contained herein
      are in lawful currency of the U.S.A.

    

    15.8  Severability
      and Construction.
      Each
      Article, section, paragraph, term and provision of this Agreement, and any
      portion thereof, shall be considered severable, and if, for any reason, any
      portion of this Agreement is determined to be invalid, contrary to or in
      conflict with any applicable present or future law, rule or regulation in a
      final unappealable ruling issued by any court, agency or tribunal with valid
      jurisdiction in a proceeding to any of the Parties hereto is a party, that
      ruling shall not impair the operation of, or have any other effect upon, such
      other portions of this Agreement as may remain otherwise intelligible (all
      of
      which shall remain binding on the Parties and continue to be given full force
      and agreement as of the date upon which the ruling becomes final).

    

    15.9  Captions.
      The
      captions, section numbers and Article numbers appearing in this Agreement are
      inserted for convenience of reference only and shall in no way define, limit,
      construe or describe the scope or intent of this Agreement nor in any way affect
      this Agreement.

    

    15.10  Counterparts.
      This
      Agreement may be signed by the Parties hereto in as many counterparts as may
      be
      necessary and, if required, by facsimile, each of which so signed being deemed
      to be an original, and such counterparts together shall constitute one and
      the
      same instrument and notwithstanding the date of execution will be deemed to
      bear
      the Execution Date as set forth on the front page of this Agreement.

    

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    15.11  Consents
      and Waivers.
      No
      consent or waiver expressed or implied by either Party hereto in respect of
      any
      breach or default by any other Party in the performance by such other of its
      obligations hereunder shall:

    

    
      	 	
              (a)

            	
              be
                valid unless it is in writing and stated to be a consent or waiver
                pursuant to this section;

            

    

    

    
      	 	
              (b)

            	
              be
                relied upon as a consent to or waiver of any other breach or default
                of
                the same or any other obligation;

            

    

    

    
      	 	
              (c)

            	
              constitute
                a general waiver under this Agreement;
                or

            

    

    

    
      	 	
              (d)

            	
              eliminate
                or modify the need for a specific consent or waiver pursuant to this
                section in any other or subsequent
                instance.

            

    

    

    

    IN
      WITNESS WHEREOF
      each of
      the Parties hereto has set their respective hands and seals in the presence
      of
      their duly authorized signatories as of the Execution Date determined
      hereinabove.

     

     

    
      	
              The
                COMMON SEAL of

               AERODYNE
                LLC,   

              the
                Transferor herein,

              was
                hereunto affixed in the presence of:

            	
              )

              
                )

                )

                )    

              

            	(C/S)
	 	 	 
	Authorized Signatory     	)	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	The
              COMMON SEAL of   
              EAGLE
                AERO HOLDINGS CORP.

               the
                Transferee herein,    

              was
                hereunto affixed in the presence of:

            	
              )

              )

              )

              )

              ) 

            	(C/S)
	 	 	 
	Authorized Signatory     	)	 

    

    

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    

    SCHEDULE
      “A”

    

    

    THIS
      IS SCHEDULE “A”
      to the
      Asset Purchase Agreement dated the ___ day of _____________, 2006.

    

    

    The
      Assets

    
 

     

     

     

     

     

     

    16

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