Document:

Untitled Document

  

  

Exhibit 10.35

 

ACQUISITION AGREEMENT

by and among

GARY GIORDANO and THOMAS GIORDANO, as the Sellers,

25 VAN KEUREN LLC, as the Applicant,

and

CLEANTECH BIOFUELS, INC.,

as Parent,

and

A WHOLLY OWNED SUBSIDIARY OF THE PARENT,

as the Buyer

 

 

As of June 23, 2016

 

 

 

TABLE OF CONTENTS

 

 

 

	
  
	
  
	Page
	
  
	
  
	
  

	
ARTICLE I
	
DEFINITIONS
	
2

	
Section 1.1
	
Definitions
	
2

	
Section 1.2
	
List of Defined Terms
	
5

	
Section 1.3
	
References and Titles
	
6

	
ARTICLE II
	
SALE OF INTERESTS
	
6

	
Section 2.1
	
Purchase and Sale of the Ownership Interests
	
6

	
Section 2.2
	
Closing
	
6

	
ARTICLE III
	
REPRESENTATIONS AND WARRANTIES OF SELLERS RELATING TO THE GIORDANO PARTIES
	
7

	
Section 3.1
	
Organization, Standing and Power
	
7

	
Section 3.2
	
Capitalization
	7
	
Section 3.3
	
Financial Statements
	
8

	
Section 3.4
	
Properties of Van Keuren
	
8

	
Section 3.5
	
Books and Records
	
8

	
Section 3.6
	
No Conflict or Violation; Consents and Approvals
	8
	
Section 3.7
	
Absence of Certain Changes
	
9

	
Section 3.8
	
Compliance with Law
	
9

	
Section 3.9
	
Permits
	
9

	
Section 3.10
	
Contracts
	
9

	
Section 3.11
	
Litigation
	9
	
Section 3.12
	
Insurance
	9
	
Section 3.13
	
Environmental Matters
	
10

	
Section 3.14
	
Labor and ERISA Matters
	
10

	
Section 3.15
	
Taxes
	20
	
Section 3.16
	
Transactions with Affiliates
	
11

	
Section 3.17
	
Fees and Commissions
	
11

	
ARTICLE IV
	
Representations and warranties of Sellers
	
11

	
Section 4.1
	
Organization, Standing and Power
	
11

	
Section 4.2
	
Authority Relative to the Transaction Documents
	
11

	
Section 4.3
	
No Conflict or Violation; Consents and Approvals
	
12

	
Section 4.4
	
Ownership of Ownership Interests
	
12

	
ARTICLE V
	
REPRESENTATIONS AND WARRANTIES OF BUYER
	
12

	
Section 5.1
	
Organization, Standing and Power
	
12

	
Section 5.2
	
Authority Relative to the Transaction Documents
	
12

	
Section 5.3
	
No Conflict or Violation; Consents and Approvals
	
13

	
Section 5.4
	
Legal Proceedings
	
13

	
Section 5.5
	
Investment Intent
	
13

 

 

 

 

	
Section 5.6
	
Investment Company Act
	
13

	
Section 5.7
	
Fees and Commissions
	
13

	
ARTICLE VI
	
TAX MATTERS
	
13

	
Section 6.1
	
Tax Matters
	
13

	
ARTICLE VII
	
COVENANTS
	
15

	
Section 7.1
	
Conduct of the Business Pending the Closing
	
15

	
Section 7.2
	
Access and Investigation
	
15

	
Section 7.3
	
Consents and Approvals
	
16

	
Section 7.4
	
Filings
	16
	
Section 7.5
	
Notification
	16
	
Section 7.6
	
Further Assurances
	
17

	
Section 7.7
	
Resignation of Managers and Officers
	17
	
ARTICLE VIII
	
CONDITIONS TO EACH PARTY’S OBLIGATIONS
	17
	
Section 8.1
	
Regulatory Approvals
	17
	
Section 8.2
	
Third Party Consents
	17
	
Section 8.3
	
No Injunction or Proceeding
	
18

	
Section 8.4
	
Closing Deliveries
	
18

	
ARTICLE IX
	
CONDITIONS TO SELLERS’ OBLIGATIONS
	
18

	
Section 9.1
	
Representations and Warranties of Buyer are True
	
18

	
Section 9.2
	
Performance of Buyer
	18
	
Section 9.3
	
Certificate
	18
	
Section 9.4
	
Closing Deliveries
	18
	
ARTICLE X
	
CONDITIONS TO BUYER’S OBLIGATIONS
	18
	
Section 10.1
	
Representations and Warranties of Sellers are True
	18
	
Section 10.2
	
Performance of Sellers
	18
	
Section 10.3
	
Certificate
	
19

	
Section 10.4
	
Closing Deliveries
	
19

	
ARTICLE XI
	
TERMINATION; INDEMNIFICATION
	
19

	
Section 11.1
	
Termination
	
19

	
Section 11.2
	
Procedure and Effect of Termination
	19
	
Section 11.3
	
Survival of Representations, Warranties and Covenants
	
20

	
Section 11.4
	
Indemnification
	20
	
ARTICLE XII
	
MISCELLANEOUS
	21
	
Section 12.1
	
Waivers and Amendments
	21
	
Section 12.2
	
Entire Agreement; Assignment
	21
	
Section 12.3
	
Severability
	
22

	
Section 12.4
	
Notices
	22

 

 

 

 

	
Section 12.5
	
Governing Law
	
23

	
Section 12.6
	
Publicity
	23
	
Section 12.7
	
Counterparts
	23
	
Section 12.8
	
Expenses
	23
	
Section 12.9
	
Affiliate Liability
	23
	
Section 12.10
	
Parties in Interest
	
24

	
Section 12.11
	
Interpretation
	
24

	
 
	
 
	
 

	
EXHIBITS
	
 
	
 

	
Exhibits A
	
  Form of Lease Agreement

	
Exhibit B
	

  Form of Ownership Escrow Agreement

	
Exhibit C
	

  Form of Preferential Tipping Fee Agreement

	
Exhibit D
	

  Form of Lease Option Agreement

	
 
	
 
	
 

	
SELLERS’ DISCLOSURE SCHEDULE
	
 

	
Section 3.2(b)
	

  Subsidiaries

	
Section 3.3
	

  Liabilities

	
Section 3.7
	

  Absence of Certain Changes

	
Section 3.10
	

  Contracts

	
Section 3.11
	

  Litigation

	
Section 3.12
	

  Insurance

	
Section 3.13
	

  Environmental Matters

	
Section 3.15
	

  Taxes

	
Section 3.16
	

  Transactions with Affiliates

	
Section 7.1
	

  Conduct of Business

	
Section 8.2
	

  Third Party Consents

 

 

 

ACQUISITION AGREEMENT

This ACQUISITION AGREEMENT (this “Agreement”), dated as of this 23rd day of June, 2016, is made by and among Gary Giordano, residing 215 Squan Beach Drive, Mantoloking, NJ 08738 and Thomas Giordano, residing at 31 8th Street,
North Arlington, NJ 07031 (including any of their respective Affiliates, the “Sellers”) and 25 Van Keuren LLC, a New Jersey limited liability company (“Van Keuren” or the “Applicant”, and collectively with the Sellers, the “Giordano Parties”), and CleanTech Biofuels, Inc.,
a Missouri corporation (the “Parent”), and a to be formed wholly-owned subsidiary of the Parent (the “Buyer”).

RECITALS:

WHEREAS, Sellers owns all of the outstanding membership interests in Van Keuren;

WHEREAS, an affiliate of the Giordano Parties owns a parcel of real property located at 160 James Avenue in the City of Jersey City, in the State of New Jersey (the “Site”);

WHEREAS, the Site is currently leased to Joseph Smentkowski, Inc., a New Jersey corporation (“Smentkowski”), which is owned and controlled by the Sellers;

WHEREAS, Van Keuren has received a solid waste facility waste district plan inclusion from the New Jersey Meadowlands Commission (the “NJMC”) to operate a transfer station and material recovery facility on the Site (the “TS/MRF”);

WHEREAS, Van Keuren intends to seek the necessary approvals from the New Jersey Department of Environmental Protection (the “NJ DEP”) to operate the TS/MRF;

WHEREAS, CleanTech owns and licenses technology related to a biomass recovery process that can process municipal solid waste into high quality biomass that can be used for commercial purposes (the “Biomass Recovery Process”);

WHEREAS, CleanTech desires to (1) install its Biomass Recovery Process on the Site and (2) operate the TS/MRF;

WHEREAS, CleanTech, through the Buyer or an affiliate, intends to lease the Site from 160 James Avenue, LLC, a New Jersey limited liability company that is owned and controlled by Giordano (“James Avenue”), following receipt of certain permits and approvals from the NJ DEP and NJMC;

WHEREAS, CleanTech has agreed to grant to Sellers a preferential tipping fee at the TS/MRF;

WHEREAS, to protect the Sellers’ interest in the permit to operate the TS/MRF in the event the Buyer defaults under such lease, the Sellers wishes to retain a one percent (1%) ownership interest, and a right of reversion in the remaining ninety-nine percent (99%) interest in Van Keuren, and to accommodate such concern, the parties will enter into the Ownership Escrow
Agreement; and

WHEREAS, Buyer desires to purchase from Sellers ninety-nine percent (99%) of the ownership interests in Van Keuren.

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

ARTICLE I

DEFINITIONS

Section 1.1                                Definitions. The terms defined in this Section
1.1, whenever used herein, shall have the following meanings for all purposes of this Agreement:

 

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“Affiliate” shall mean, with respect to any Person, any other Person controlling, controlled by or under common control with such Person. For purposes of this definition and this Agreement, the term “control” (and correlative terms) means the power, whether
by contract, equity ownership or otherwise, to direct the policies or management of a Person.

“Business Day” means any day other than a Saturday, a Sunday or a day on which banks in the city of Newark, New Jersey are authorized or required to close.

“Closing Date Payment” shall mean an amount equal to one million (1,000,000) shares of common stock of CleanTech Biofuels, Inc., par value $0.001 per share.

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

“Contract” shall mean any agreement, contract, obligation, promise or undertaking that is legally binding.

“Damages” shall mean any cash, out-of-pocket liabilities, costs or expenses (including reasonable attorneys’ fees), judgments, fines, losses, claims, damages and amounts paid in settlement, except to the extent caused by the gross negligence, bad faith, willful misconduct or fraud of an Indemnified Party.

“Encumbrance” shall mean any lien, encumbrance, security interest, charge, mortgage, option, pledge or restriction on use or transfer of any nature whatsoever (except for encumbrances pursuant to any Permits).

“Environment” shall mean soil, land surface or subsurface strata, surface waters (including navigable waters, ocean waters, streams, ponds, drainage basins, and wetlands), ground waters, drinking water supply, stream sediments, ambient air (including indoor air), plant and animal life and any other environmental
medium or natural resource.

“Environmental Claim” shall mean any pending claim, action, demand, order or written notice by or on behalf of, any Governmental Entity or other Person alleging potential liability based on any Environmental Law or environmental Permit.

“Environmental Law” shall mean all applicable Legal Requirements and rules of common law pertaining to the Environment and public or employee health and safety of the federal government of the United States of America and the State of New Jersey, or any political subdivision thereof, and any similar or analogous
statutes, regulations and decisional law of any Governmental Entity, as each of the foregoing may be amended and in effect on or prior to the Closing.

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

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.“GAAP” shall mean United States generally accepted accounting principles as in effect on the date or for the period with respect to which such principles are applied.

“Giordano Parties” shall mean, collectively, the Sellers and Van Keuren. Each such entity may individually be referred to as a “Giordano Party.”

“Hazardous Materials” shall mean any waste, wastewater, air emission or other substance that is regulated, listed, defined, designated or classified as, or otherwise determined to be, hazardous, radioactive or toxic under or pursuant to any applicable Environmental Law, including any admixture or solution thereof,
and specifically including petroleum and all derivatives thereof and asbestos or asbestos-containing materials.

“Knowledge” shall mean, with respect to any Person, the actual knowledge of an officer, director, manager, member or partner of such Person, without further inquiry or investigation.

“Lease Agreement” shall mean the Lease Agreement between James Avenue and the Buyer in substantially the same form attached hereto as Exhibit A.

 

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“Lease Option Agreement” shall mean the Lease Option Agreement between James Avenue and the Buyer in the substantially the form attached hereto as Exhibit D.

“Legal Requirement” shall mean any Federal, state, local, municipal or other administrative order, constitution, law, ordinance, principle of common law, regulation, statute or treaty.

“Material Adverse Effect” shall mean a material adverse effect on the (i) financial condition or operations of the Giordano Parties, taken as a whole or (ii) the ability of Sellers to perform its obligations under this Agreement, excluding any effect related to or resulting from (a) any event affecting the United
States or global economy or capital or financial markets generally, (b) any change in conditions in the industries in which the Giordano Parties or their customers conduct business, (c) any change in any Legal Requirement or in the authoritative interpretations thereof or in regulatory guidance related thereto, (d) any earthquake or similar catastrophe, or acts of war, sabotage, terrorism, military action or any escalation or worsening thereof or (e) this Agreement, the announcement thereof and/or the transactions
contemplated hereby.

“Order” shall mean any award, decision, injunction, judgment, order, ruling, subpoena or verdict entered, issued, made or rendered by any Governmental Entity or by any arbitrator.

“Ownership Escrow Agreement” shall mean the Ownership Escrow Agreement by and among the Sellers, the Buyer and the Escrow Agent, in substantially the same form attached hereto as Exhibit B.

“Person” shall mean any individual, partnership, joint-stock company, joint venture, corporation, limited liability company, trust, unincorporated organization or other entity or a Governmental Entity or political subdivision thereof.

“Preferential Tipping Fee Agreement” shall mean the Preferential Tipping Fee Agreement between the Buyer and the Sellers in substantially the same form attached hereto as Exhibit C.

 “Securities Act” shall mean the Securities Act of 1933, as amended.

“Sellers’ Disclosure Schedule” shall mean the disclosure schedule delivered by Sellers to Buyer concurrently with the execution and delivery of this Agreement. Disclosure of any fact or item in the Sellers’ Disclosure Schedule referenced by a particular paragraph or section in this Agreement shall,
should the existence of the fact or item or its contents be relevant to any other paragraph or section in this Agreement, be deemed to be disclosed with respect to such other paragraph or section whether or not a specific cross-reference appears.

“Subsidiary” shall mean, with respect to any Person:

(a)           any corporation, association or other business entity of which more than 50% of the total voting power of shares of capital stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned, directly or indirectly, by such Person; and

(b)           any other entity (other than a corporation), including a partnership, joint venture or limited liability company, in which the specified Person, one or more Subsidiaries thereof or the specified Person and one or more Subsidiaries thereof, directly
or indirectly, at the date of determination thereof, has or have at least a majority of the voting stock or other ownership interests of such entity.

“Tax Claims” shall mean any claims, actions, causes of action, liabilities, losses, damages, deficiencies, judgments, settlements, costs and expenses whatsoever (including reasonable out-of-pocket expenses and reasonable attorneys’ fees), whether or not resulting from third party claims, relating to Taxes.

 

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“Taxes” shall mean all income, gross receipts, profits, franchise, single business, sales, use, occupation, property (including in lieu-of-taxes), capital, environmental, employment, severance, excise, workers’ compensation, social security, withholding or similar taxes or other governmental fees or charges
of a similar nature, however denominated, imposed by any Federal, state, local or other political subdivision taxing authority, together with any interest, additions or penalties with respect thereto.

“Tax Return” shall mean any return, report, statement, information or other document including any amendment thereto filed or to be filed or required to be filed or supplied to any Federal, state, or local Tax authority or any other Government Entity with respect to Taxes, including, where permitted or required,
combined or consolidated returns for any group of entities.

“Transaction Documents” shall mean collectively this Agreement, the Lease Agreement, the Preferential Tipping Fee Agreement, the Ownership Escrow Agreement, and all other documents, instruments and certificates executed in connection with the transactions contemplated by this Agreement.

“Transaction Regulatory Approvals” shall mean all permits and approvals by the NJMC, the NJ DEP and the City of Jersey City and any other Government Entity necessary to operate the TS/MRF, including pursuant to N.J.A.C. 7:26-1 et seq. and any applicable federal laws
or regulations.

Section 1.2                                List of Defined Terms. 

	
Terms
	
Defined in Section

 

	
Agreement                                                                                                                       
	
Preamble

	
Balance Sheet                                                                                                                       
	
3.3(a)

	
Buyer                                                                                                                       
	
Preamble

	
Buyer’s Advisors                                                                                                                       
	
7.2

	
Buyer’s Surviving Representations                                                                                                                       
	
11.3(a)

	
Closing                                                                                                                       
	
2.2(a)

	
Closing Date                                                                                                                       
	
2.2(a)

	
Cure Period                                                                                                                       
	
11.1(d)

	
Examination Notice                                                                                                                       
	
6.1(d)

	
Governmental Entity                                                                                                                       
	
3.7

	
Indemnified Party                                                                                                                       
	
11.4(d)

	
Indemnifying Party                                                                                                                       
	
11.4(d)

	
Investment Company                                                                                                                       
	
Recitals

	
NJ DEP                                                                                                                       
	
Recitals

	
NJMC                                                                                                                       
	
Recitals

	
Overlap Period Taxes                                                                                                                       
	
6.1(b)

	
Ownership Interests                                                                                                                       
	
2.1

	
Parent                                                                                                                       
	
Recitals

	
Permits                                                                                                                       
	
3.10

	
Post-Closing Taxes                                                                                                                       
	
6.1(b)

	
Pre-Closing Taxes                                                                                                                       
	
6.1(b)

	
Smentkowski                                                                                                                       
	
Recitals

	
Site                                                                                                                       
	
Recitals

	
Purchase Price                                                                                                                       
	
2.1

 

5

 

 

 

	
Referee                                                                                                                       
	
2.4(b)

	
Sellers                                                                                                                       
	
Preamble

	
Sellers’ Surviving Representations                                                                                                                       
	
11.3(a)

	
Selling Group                                                                                                                       
	
12.2(b)

	
Transfer Taxes                                                                                                                       
	
6.1(a)

	
Van Keuren                                                                                                                       
	
Recitals

 

Section 1.3                                References and Titles. All references in this Agreement to exhibits,
schedules, articles, sections, subsections and other subdivisions refer to the corresponding exhibits, schedules, articles, sections, subsections and other subdivisions of this Agreement unless expressly provided otherwise. Titles appearing at the beginning of any article, section, subsection or other subdivision of this Agreement are for convenience only, do not constitute any part of such article, section, subsection or other subdivision, and shall be disregarded in construing the language contained therein.
The words “this Agreement”, “herein”, “hereby”, “hereunder”, and “hereof” and words of similar import refer to this Agreement as a whole and not to any particular subdivision unless expressly so limited. The words “this Section”, “this subsection” and words of similar import refer only to the sections or subsections hereof in which such words occur. The word “including” (in its various forms) means “including
without limitation.” Pronouns in masculine, feminine or neuter genders shall be construed to state and include any other gender, and words, terms and titles (including terms defined herein) in the singular form shall be construed to include the plural and vice versa, unless the context otherwise expressly requires. Unless the context otherwise requires, all defined terms contained herein shall include the singular and plural and the conjunctive and disjunctive forms of such defined terms.

ARTICLE II

SALE OF INTERESTS

Section 2.1                                Purchase and Sale of the Ownership Interests. Buyer and Sellers
hereby agree that upon the terms and subject to the satisfaction or waiver, if permissible, of the conditions set forth herein, Sellers shall sell, transfer and deliver to Buyer, and Buyer shall purchase from Sellers, free and clear of all Encumbrances, ninety-nine percent (99%) of the membership interests in Van Keuren (the “Ownership Interest”) for a purchase price equal to one million (1,000,000) shares of common stock of the Parent, par value $0.001
per share (the “Purchase Price”).

Section 2.2                                Closing.

(a)           The closing of the transactions contemplated by this Agreement (the “Closing”) shall occur on or before June 24, 2016 at the offices of Chiaia & Associates, LLC in Fairfield, New
Jersey, or at such other time, date or place as the parties may mutually agree (hereinafter referred to as the “Closing Date”).

(b)           At the Closing, Sellers shall deliver, or cause to be delivered, the following to Buyer:

(i) the certificate contemplated by Section 10.3 hereof;

(ii) the resignations described in Section 7.7;

 

6

 

 

 

(iii) the Ownership Escrow Agreement;

(iv) the Lease Option Agreement;

(v)  the Preferential Tipping Fee Agreement; and

(vi) all other documents required to be delivered by Sellers on or prior to the Closing Date pursuant to this Agreement.

(c)           At the Closing, the Parent and Buyer shall deliver, or cause to be delivered, to Sellers:

(i) the Purchase Price;

(ii) the certificate contemplated by Section 9.3 hereof;

(iii) the Ownership Escrow Agreement;

(iv) the Lease Option Agreement;

(v)  the Preferential Tipping Fee Agreement; and

(vi) all other documents required to be delivered by Buyer on or prior to the Closing Date pursuant to this Agreement.

 

(d)           Any payments to be made to Sellers pursuant to this Section 2.2 shall be made by wire transfer of immediately available funds to such bank account or bank accounts designated by Sellers at least
one Business Day prior to the Closing Date.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLERS

RELATING TO THE GIORDANO PARTIES

Sellers hereby represents and warrants to Buyer as follows:

Section 3.1                                Organization, Standing and Power. Each of the Giordano Parties
is either an individual or a company duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has all requisite organizational power and authority to conduct its business as it is now being conducted and to own, lease and operate its property and assets. Each of the Giordano Parties is qualified or licensed to do business as a foreign corporation or company and is in good standing in each jurisdiction in which ownership of property or the conduct of its
business requires such qualification or license, except where the failure to be so qualified or licensed will not have a Material Adverse Effect.

Section 3.2                                Capitalization.

(a)           All of the Ownership Interests are duly authorized, validly issued, fully paid and non-assessable, and are owned by the Sellers, free and clear of all Encumbrances and any preemptive rights in respect thereto.

(b)           Section 3.2(b) of the Sellers’ Disclosure Schedule sets forth (i) a true and complete list of all Subsidiaries of Van Keuren, including the name and jurisdiction of organization of each such
Subsidiary, (ii) the number of issued and outstanding equity interests of each such Subsidiary and (iii) the names of the record and beneficial holders of such equity interests. All of the equity interests of each such Subsidiary are free and clean of all Encumbrances and any preemptive rights in respect thereto.

 

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(c)           There are and shall be no outstanding (i) securities convertible into or exchangeable for the equity interests of any of the Van Keuren, (ii) options, warrants or other rights to purchase or subscribe for equity interests of any of the Van Keuren,
(iii) contracts, commitments, agreements, understandings or arrangements of any kind relating to the issuance of any equity interests of Van Keuren or any such convertible or exchangeable securities or any such options, warrants or rights, pursuant to which, in any of the foregoing cases, Van Keuren or their respective property is subject to or bound or (iv) interests of any Person which would dilute Sellers’ interest in Van Keuren.

Section 3.3                                Financial Statements.

(a)           Sellers has delivered to Buyer the unaudited, consolidated balance sheet of Van Keuren as of September 30, 2015 (the “Balance Sheet”). The Balance Sheet fairly presents in all materials
respects the financial condition of Van Keuren as of September 30, 2015. The Balance Sheet was prepared from, and is in accordance and consistent with, the accounting records of Van Keuren.

(b)           Except as set forth on Section 3.3 of the Sellers’ Disclosure Schedule, Van Keuren has no any liabilities of the type required to be reflected as a liability in a balance sheet prepared in
accordance with GAAP except for liabilities reflected in the Balance Sheet and liabilities incurred in the ordinary course of business since April 30, 2016.

Section 3.4                                Properties of Van Keuren. Van Keuren does not own, and has never
owned, any property or assets. Since its formation, the sole business of Van Keuren has been to obtain the Transaction Regulatory Approvals necessary to operate the TS/MRF.

Section 3.5                                Books and Records. Since the date of its formation, the books
of account, minute books, stock record books and other records of Van Keuren, all of which have been made available to Buyer, are complete and correct and have been maintained in accordance with sound business practices. The minute books of Van Keuren contain accurate and complete records of all meetings held of, and organizational action taken by, the members, managers and/or partners of Van Keuren

Section 3.6                                No Conflict or Violation; Consents and Approvals. Neither the
execution and delivery of any Transaction Document by the Sellers nor the consummation of the transactions contemplated thereby by Sellers will (a) violate any provision of the organizational documents of any of Van Keuren, (b) require the consent, waiver or approval of any Federal, state, local or foreign government, or regulatory authority, agency or commission, including courts of competent jurisdiction, domestic or foreign, and administrative agencies (each a “Governmental
Entity”), except for consents and approvals to be made and obtained before the Closing, including the Transaction Regulatory Approvals, and those which have been made and obtained, (c) result in a violation or breach of, or constitute (with or without notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration or any obligation to repay) under, any of the terms, conditions or provisions of any Encumbrance, license, Contract, lease, franchise,
Permit or other instrument or obligation to which Van Keuren is a party or by which Van Keuren or any of its respective properties or assets may be bound or (d) violate any statute, ordinance, rule or regulation of any Governmental Entity or any Order applicable to Van Keuren or by which any of their respective properties or assets may be bound.

 

8

 

 

Section 3.7                                Absence of Certain Changes. Since September 30, 2015, except
as set forth on Section 3.8 of the Sellers’ Disclosure Schedule, Van Keuren has not has (a) suffered any change in its business, operations or financial position, except such changes which, in the aggregate, would not have a Material Adverse Effect or (b) conducted its business in any material respect not in the ordinary course of business.

Section 3.8                                Compliance with Law. The business of Van Keuren is not being
conducted in material violation of any applicable statute, ordinance, rule or regulation of any Governmental Entity or any Order. Van Keuren is not in default or violation (and no event has occurred which with notice or the lapse of time or both would constitute a default or violation) of any term, condition or provision of its certificate of limited partnership or certificate of formation, as the casemay be, or partnership agreement or limited liability company agreement, as the case may be (or other comparable
governing documents). Van Keuren is not in material default or material violation (and no event has occurred which with notice or the lapse of time or both would constitute a material default or material violation) of any term, condition or provision of any Order or statute, ordinance, rule or regulation of any Governmental Entity applicable to it.

Section 3.9                                Permits. To the Knowledge of Sellers, Van Keuren has obtained
or will obtain all material governmental permits, emission allowances, licenses and authorizations necessary for the conduct of its businesses as presently conducted and for the operation of the TS/MRF (the “Permits”) and is in compliance with the terms of the Permits, except where such non-compliance would not result in a termination or revocation of such Permit.

Section 3.10                                Contracts.

(a)           Section 3.11 of the Sellers’ Disclosure Schedule contains a complete and accurate list as of the date hereof, and Sellers has made available to Buyer true and complete copies, of all contracts
and agreements to which Van Keuren is a party or otherwise bound, including any amendment, supplement and modification in respect of any of the foregoing.

(b)           To the Knowledge of Sellers, (i) each of Van Keuren’s contracts is valid and binding and in full force and effect and no default (or event which with the giving of notice or passage of time or both would constitute a default) exists thereunder
and (ii) Van Keuren has all contracts necessary to conduct its business as presently conducted.

(c)           There are no renegotiations of any material amounts paid or payable to Van Keuren under any contracts with any Person and Van Keuren has not received written demand for such renegotiation.

Section 3.11                                Litigation. Except as set forth in Section
3.12 of the Sellers’ Disclosure Schedule, there is no action, suit or proceeding pending, or, to the Knowledge of Sellers, threatened, against (i) Van Keuren or (ii) any properties or rights of Van Keuren, before any Governmental Entity.

Section 3.12                                Insurance.

 

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(a)           Sellers has made available to Buyer (i) true and complete copies of all policies of insurance to which Van Keuren is a party or under which Van Keuren, or any member, manager, partner or officer of Van Keuren, is or has been covered at any time
within the two years preceding the date of this Agreement.

(b)           Section 3.13 of the Sellers’ Disclosure Schedule lists as of the date hereof:

(i) current policies of insurance in effect maintained by Van Keuren;

(ii) all obligations of Van Keuren to third parties with respect to insurance (including such obligations under leases and service agreements) and identifies the policy under which such coverage is provided; and

(iii) a summary of the loss experience under each policy.

Section 3.13                                Environmental Matters. Except as set forth in Section
3.14 of the Sellers’ Disclosure Schedule, (a) to the Knowledge of Sellers, Van Keuren’s operations at the Site are in compliance with all applicable Environmental Laws, (b) there are no Environmental Claims against Van Keuren pending or, to the Knowledge of Sellers, threatened in writing, and (c) the Sellers have not received any notice that Van Keuren is liable or responsible, or potentially liable or responsible, for any costs of any removal, remedial action or other response under any Environmental
Law as the result of the presence, release or potential release of any hazardous substance, medical waste, toxic waste, or controlled substance. 

Section 3.14                                Labor and ERISA Matters. Van Keuren is not (i) a party to or
bound by any collective bargaining agreement with a labor union or labor organization, (ii) a party to or bound by any Contract for the employment of any employee or (iii) the subject of any proceeding asserting that Van Keuren has committed an unfair labor practice or is seeking to compel it to bargain with any labor organization as to wages or conditions of employment. Van Keuren does not have any employees or any plans under ERISA or any similar Federal or state laws.

Section 3.15                                Taxes.  Except as
set forth in Section 3.16 of the Sellers’ Disclosure Schedule or as would not have a Material Adverse Effect:

(a)           (i) all Tax Returns which were required to be filed by or with respect to any of the Giordano Parties have been duly and timely filed, (ii) all items of income, gain, loss, deduction and credit or other items (“Tax Items”)
required to be included in each such Tax Return have been so included and all such Tax Items and any other information provided in each such Tax Return is true, correct and complete, (iii) all Taxes shown on each such Tax Return have been timely paid in full, (iv) no penalty, interest or other charge is or will become due with respect to the late filing of any such Tax Return or late payment of any such Tax, and (v) all Tax withholding and deposit requirements imposed on or with respect to Van Keuren
have been satisfied in full in all respects.

 

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(b)           Van Keuren does not have in force any waiver of any statute of limitations in respect of Taxes or any extension of time with respect to a Tax assessment or deficiency.

(c)           To the Knowledge of Sellers, there are no pending written proposed deficiencies or other written claims for unpaid Taxes of Van Keuren.

Section 3.16                                Transactions with Affiliates. Except as disclosed in Section
3.17 of the Sellers’ Disclosure Schedule, neither Sellers nor any Affiliate of Sellers or any other partner or member of Van Keuren:

(a)           has any cause of action or other claim whatsoever against or owes any amount to, or is owed any amount by Van Keuren; or

(b)           has any other Contract with Van Keuren.

Section 3.17                                Fees and Commissions. No Person is entitled to a fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Sellers or any of its Affiliates.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF SELLERS

Sellers hereby represents and warrants to Buyer as follows:

Section 4.1                                Organization, Standing and Power. The Sellers has the full power,
right, capacity and authority to enter into and perform this Agreement, and the consummation of the transactions contemplated by this Agreement will not result in the breach or termination of any provision of or constitute a default under any lease, indenture, mortgage, deed of trust or other agreement or instrument or any order, decree, statute or restriction to which Sellers or Van Keuren is a party or by which Sellers or Van Keuren is bound or to which the Ownership Interests or any of the properties of Sellers
or Van Keuren is subject.

Section 4.2                                Authority Relative to the Transaction Documents. Sellers has
all requisite authority and power to execute and deliver each Transaction Document to which it is a party and to consummate the transactions contemplated thereby. The execution and delivery of the Transaction Documents by Sellers and the consummation of the transactions contemplated thereby have beenduly and validly authorized by all required action on the part of Sellers and no other proceedings on the part of Sellers, including all required approvals of Sellers, are necessary to authorize each of the Transaction
Documents to which it is a party or to consummate the transactions contemplated thereby. Each of the Transaction Documents to which Sellers is a party has been duly and validly executed and delivered by Sellers and, assuming each such Transaction Document has been duly authorized, executed and delivered by each other party thereto, each such Transaction Document will constitute a valid and binding agreement of Sellers, enforceable against it in accordance with its terms, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to or affecting creditors’ rights generally, including the effect of statutory and other laws regarding fraudulent conveyances and preferential transfers, and subject to the limitations imposed by general equitable principles (regardless of whether such enforceability is considered in a proceeding at law or in equity).

 

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Section 4.3                                No Conflict or Violation; Consents and Approvals. Neither the
execution and delivery of any Transaction Document by Sellers nor the consummation of the transactions contemplated hereby by Sellers will (a) violate any provision of the certificate of formation or limited liability company agreement of Sellers, (b) require the consent, waiver or approval of any Governmental Entity except for consents and approvals to be made and obtained before the Closing, including the Transaction Regulatory Approvals, and those which have been made and obtained, (c) result in a violation
or breach of, or constitute (with or without notice orlapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration or any obligation to repay) under, any of the terms, conditions or provisions of any Encumbrance, Contract, franchise, Permit or other instrument or obligation to which Sellers is a party or by which Sellers or any of its properties or assets may be bound or (d) violate any statute, ordinance, rule or regulation of any Governmental Entity or any Order applicable
to Sellers or by which any of its properties or assets may be bound.

Section 4.4                                Ownership of Ownership Interests. Sellers is the holder of record
and owns beneficially all of the Ownership Interests, free and clear of all Encumbrances.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer hereby represents and warrants to Sellers as follows:

Section 5.1                                Organization, Standing and Power. Buyer is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its organization and has all requisite power and authority to conduct its business as it is now being conducted and to own, lease and operate its property and assets.

Section 5.2                                Authority Relative to the Transaction Documents. Buyer has all
requisite authority and power to execute and deliver each Transaction Document to which it is a party and to consummate the transactions contemplated thereby. The execution and delivery of the Transaction Documents by Sellers and the consummation of the transactions contemplated thereby have been duly and validly authorized by all required action on the part of Buyer and no other proceedings on the part of Buyer are necessary to authorize the Transaction Document to which it is a party or to consummate the transactions
contemplated thereby. Each of the Transaction Documents to which Buyer is a party has been duly and validly executed and delivered by Buyer and, assuming each such Transaction Document has been duly authorized, executed and delivered by each other party thereto, each such Transaction Document will constitute a valid and binding agreement of Buyer, enforceable against Buyer in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to or affecting creditors’ rights generally, including the effect of statutory and other laws regarding fraudulent conveyances and preferential transfers, and subject to the limitations imposed by general equitable principles (regardless of whether such enforceability is considered in a proceeding at law or in equity).

 

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Section 5.3                                No Conflict or Violation; Consents and Approvals. Neither the
execution and delivery of any Transaction Document by Buyer nor the consummation of the transactions contemplated hereby by Buyer will (a) violate any provision of the constating documents of Buyer, (b) require the consent, waiver or approval of any Governmental Entity, except for consents and approvals to be made and obtained before the Closing, including the Transaction Regulatory Approvals, and those which have been made and obtained, (c) result in a violation or breach of, or constitute (with or without notice
or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration or any obligation to repay) under, any of the terms, conditions or provisions of any Encumbrance, license, Contract, permit or other instrument or obligation to which Buyer is a party or by which Buyer or any of its properties or assets may be bound or (d) violate any statute, ordinance, rule or regulation of any Governmental Entity or Order applicable to Buyer or by which any of its properties or assets
may be bound.

Section 5.4                                Legal Proceedings. There are no actions, suits or proceedings
pending or, to the Knowledge of Buyer, threatened against Buyer before any court, arbitrator or governmental or regulatory body or authority which would prevent or delay the consummation of the transactions contemplated by this Agreement.

Section 5.5                                Investment Intent. Buyer is acquiring the Ownership Interests
for its own account, for investment and not with a view towards the resale, transfer or distribution thereof, nor with any present intention of distributing the Ownership Interests in violation of the Securities Act, other applicable Federal or state securities laws, and the rules and regulations promulgated thereunder. Buyer understands that the Ownership Interests have not been registered under the Securities Act or other applicable Federal or state securities laws, and the rules and regulations promulgated
thereunder, by reason of the contemplated sale of the Ownership Interests in a transaction exempt from the registration requirements of the Securities Act and state securities laws, and the rules and regulations promulgated thereunder. Buyer is fully informed as to the applicable limitations upon any distribution or resale of the Ownership Interests under the Securities Act and other applicable Federal and state securities laws, and the rules and regulations promulgated thereunder. Buyer is an “accredited
investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.

Section 5.6                                Investment Company Act. Buyer is not an “investment company”
or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940 of the United States, as amended, or an “investment advisor” within the meaning of the Investment Company Act of 1940 of the United States, as amended.

Section 5.7                                Fees and Commissions. No Person is entitled to a fee or commission
in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Buyer or its Affiliates.

ARTICLE VI

TAX MATTERS

Section 6.1                                Tax Matters.

 

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(a)           Transfer Taxes. Buyer shall pay all sales, use, transfer, real property transfer, recording, stock transfer and other similar taxes and fees (“Transfer
Taxes”), if any, arising out of or in connection with the purchase and sale of the Ownership Interests pursuant to this Agreement, and shall indemnify, defend and hold harmless Sellers with respect to any Transfer Taxes. Buyer shall file all necessary documentation and Tax Returns with respect to such Transfer Taxes. It is expressly acknowledged by the parties hereto that this Section 6.1(a) does not relate to any Federal, state or local income taxes
of any party.

(b)           Indemnification. Sellers shall indemnify and hold harmless Buyer from and against any and all Tax Claims relating to Van Keuren, resulting from, arising out of or relating to: (i) any and all Taxes
imposed on or incurred by Buyer relating to any taxable period ending on or prior to the Closing Date (“Pre-Closing Taxes”) and (ii) with respect to any taxable period ending on or after the Closing Date that includes the Closing Date (the “Overlap Period”), any and all Taxes imposed on or incurred by Buyer at any time attributable to the period ending on or prior to the Closing Date (“Overlap
Period Taxes”). For purposes of the Overlap Period, Taxes shall be attributable to the period ending on or prior to the Closing Date: (x) in the case of any real or personal property Tax imposed on or incurred by Van Keuren, in an amount equal to the real or personal property Tax for the entire period multiplied by a fraction the numerator of which is the number of days in the period for which such real or personal property Tax is paid ending on the Closing Date and the denominator of which is the
number of days in the entire period and (y) in the case of any other Taxes imposed on or incurred Van Keuren, to the extent of any Taxes imposed on or incurred by Van Keuren that would be payable if the taxable year ended on the Closing Date. Buyer shall indemnify and hold harmless Sellers from and against any and all Tax Claims relating to Van Keuren resulting from, arising out of or relating to: (i) any and all Taxes imposed on or incurred by Sellers relating to any taxable period beginning after the Closing
Date (“Post-Closing Taxes”) and (ii) with respect to the Overlap Period, any and all Taxes imposed on or incurred by Sellers at any time attributable to the period following the Closing Date. Each party’s obligation to indemnify and hold harmless the other party for Taxes pursuant to this Section 6.1(b) shall exclude any penalties, fines, interest or additional charges attributable to the indemnitee’s
failure to promptly notify the indemnifying party in accordance with Sections 6.1(d) and (e) hereof.

(c)           Refunds. Any refund or credit of Van Keuren for Pre-Closing Taxes or Overlap Period Taxes shall be for the benefit of Sellers, and Buyer shall pay any such refund to Sellers within thirty (30) days
after Van Keuren receives such refund or actually realizes the benefit of such refund or credit.

(d)           Contests. Sellers and Buyer agree that, in the event Van Keuren receives notice (an “Examination Notice”) in writing of any examination,
claim, settlement, proposed adjustment, administrative or judicial proceeding or other matter related to any Pre-Closing Taxes or Overlap Period Taxes, Sellers or Buyer, as the case may be, shall notify the other party in writing as soon as reasonably practical (but in no event not more than ten (10) Business Days) after receipt of such notice and Buyer shall use its best efforts to allow Sellers to control, at its own expense, all such matters;provided, Sellers
notify Buyer in writing within thirty (30) Business Days following receipt or issuance by Sellers of such written notice that Sellers intends to exercise its rights pursuant to this Section 6.1(d). Buyer shall cooperate with Sellers by giving Sellers and its representatives, on prior reasonable notice, access and cooperation during normal business hours to all information, books and records pertaining to Van Keuren’s Pre-Closing Taxes and Overlap Period Taxes.

 

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(e)           Information. Sellers and Buyer will make available to each other and to any taxing authority, and will cause to be made available (if necessary), all information, records or documents relating to
the liability or potential liability for Pre-Closing Taxes, Overlap Period Taxes and Post-Closing Taxes during normal business hours as reasonably requested. Sellers and Buyer will preserve such information, records or documents until the expiration of any applicable statute of limitations or extensions thereof.

(f)           Proration of Income and Loss. Notwithstanding any other provisions of this Article VI, the income or loss of Van Keuren for the Tax year ending on
the Closing Date shall be based upon a closing of the books as of the date immediately preceding the Closing Date, provided that if the Closing Date is other than the first day of a calendar month, then the income or loss for such month shall be prorated based upon the number of days Sellers and Buyer own the Ownership Interests during such month. For this purpose, Sellers’ period of ownership shall include the Closing Date.

(g)           Tax Returns. Buyer shall be responsible for preparing and filing all Tax Returns of Van Keuren relating to Tax periods ending after the Closing Date. Sellers shall cooperate with Buyer with respect
to preparing and filing such Tax Returns and shall use its commercially reasonable efforts to promptly provide all information reasonably requested by Buyer necessary to prepare and file the Tax Returns.

(h)           Survival of Obligations. The obligations of the parties set forth in this Article VI shall be unconditional and absolute and shall remain in effect
until the expiration of the applicable statutes of limitation.

ARTICLE VII

COVENANTS

Section 7.1                                Conduct of the Business Pending the Closing. Except as contemplated
by this Agreement, as set forth in Section 7.1 of Sellers’ Disclosure Schedule or with the prior written consent of Buyer, during the period from the date of this Agreement to the Closing, Sellers shall use commercially reasonable efforts to cause Van Keuren to: (i) conduct its businesses and operations in the ordinary course of business; (ii) use commercially reasonable efforts consistent therewith to preserve intact its properties, assets and business organizations
and (iii) use commercially reasonable efforts to maintain satisfactory relationships with customers, suppliers, distributors and others having commercially beneficial business relationships with it in each case in the ordinary course of business. 

Section 7.2                                Access and Investigation. Between the date of this Agreement
and the Closing Date, Sellers will, and will cause Van Keuren and their respective advisors, during normal business hours upon reasonable advance notice to (a) afford Buyer and its advisors and prospective investors and lenders (collectively, “Buyer’s Advisors”) reasonable access to Van Keuren’s personnel, properties, contracts, books and records and other documents and data, (b) furnish Buyer and Buyer’s Advisors with copies of
all such contracts, books, records and other existing documents and data relating to the Giordano Parties as Buyer may reasonably request and (c) furnish Buyer and Buyer’s Advisors with such additional financial, operating, and other data and information relating to Van Keuren as Buyer may reasonably request.

 

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Section 7.3                                Consents and Approvals.

(a)           Each of the parties hereto shall use commercially reasonable efforts to (i) obtain as promptly as practicable all consents, authorizations, approvals and waivers required in connection with the consummation of the transactions contemplated by
this Agreement under any Federal, state, local or foreign law or regulation (including, without limitation, all of the Transaction Regulatory Approvals), (ii) prevent the entry, enactment or promulgation of any injunction or restraining Order or other Order adversely affecting the ability of the parties hereto to consummate the transactions contemplated hereby and (iii) effect all necessary registrations and filings (including, without limitation, filings with Governmental Entities necessary to obtain all of
the Transaction Regulatory Approvals) and submissions of information requested by any Governmental Entity.

(b)           Each party hereto shall promptly inform the other of any communication from the or any other Governmental Entity regarding any of the transactions contemplated hereby. If any party hereto or any Affiliate thereof receives a request for additional
information or documentary material from any such Governmental Entity with respect to the transactions contemplated hereby, then such party shall use commercially reasonable efforts to make, or cause to be made, as soon as reasonably practicable and after consultation with the other party, an appropriate response in compliance with such request. Buyer shall advise Sellers promptly in respect of any understandings, undertakings or agreements (oral or written) that Buyer proposes to make or enter into with the
or any other Governmental Entity in connection with the transactions contemplated hereby.

Section 7.4                                Filings. Promptly after the execution of this Agreement, each
of the parties hereto shall prepare and make or cause to be made any required filings, submissions and notifications under any applicable Legal Requirement to the extent that such filings are necessary to consummate the transactions contemplated hereby (including, without limitation, to obtain the consents and approvals, contemplated by Section 7.3 hereof) and shall use commercially reasonable efforts to take all other actions necessary to consummate the transactions
contemplated hereby in a manner consistent with applicable Legal Requirements;provided, however that the parties agree that Sellers shall prepare and file, with Buyer’s reasonable input and cooperation, each of the filings, submissions and notifications required to obtain the Transaction Regulatory Approvals. Each of the parties hereto will furnish to the other party such necessary information and reasonable
assistance as such other party may reasonably request in connection with the foregoing.

Section 7.5                                Notification. Between the date of this Agreement and the Closing
Date, each of Sellers and Buyer will promptly notify the other party in writing, and, the other party will promptly acknowledge receipt of such notice in writing if: (a) either party becomes aware of any fact or condition that causes or constitutes a breach of the other party’s representations and warranties in any material respect as of the date of this Agreement, or (b) if Sellers or any Giordano Party becomes aware of the occurrence of any fact or condition that would (except as expressly contemplated
by this Agreement) cause or constitute a breach of any representation or warranty in any material respect had such representation or warranty been made as of the time of occurrence or discovery of such fact or condition. Should any such fact or condition require any change in the Sellers’ Disclosure Schedule if the Sellers’ Disclosure Schedule were dated the date of the occurrence or discovery of any such fact or condition, Sellers will promptly deliver to Buyer a supplement to the Sellers’
Disclosure Schedule specifying such change. During the same period, each Sellers and Buyer, as the case may be, will promptly notify the other party of the occurrence of any material breach of any covenant of Sellers or Buyer in this Agreement or of the occurrence of any event that may make the satisfaction of the conditions in Article VIII, IX or X, impossible to fulfill.
Buyer or Sellers, as the case may be, will have a period of no more than five (5) Business Days from receipt of any notice of change in the Sellers’ Disclosure Schedule pursuant to this Section 7.5 to notify the other party that it will not accept such change to the Sellers’ Disclosure Schedule or will not waive any breach of Sellers’ or Buyer’s, as the case may be, representation and warranty;provided,
that in the event Buyer or Sellers, as the case may be, fails to respond, on or before the fifth (5th) Business Day since the date such notice was received then Buyer or Sellers, as the case may be, shall be deemed to have accepted such change to the Sellers’ Disclosure Schedule or waived any such breach by Sellers or Buyer, as the case may be, with respect to such representation and warranty.

 

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Section 7.6                                Further Assurances. Upon the terms and subject to the conditions
herein provided, each of the parties hereto shall use commercially reasonable efforts to take or cause to be taken all action, to do or cause to be done, and to assist and cooperate with the other party hereto in doing, all things reasonably necessary, proper or advisable under applicable Legal Requirements to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated by this Agreement, including, but not limited to (a) the satisfaction of the conditions precedent
to the obligations of any of the parties hereto and (b) the taking of such other actions as the other party hereto may reasonably require in order to carry out the intent of this Agreement.

Section 7.7                                Resignation of Managers and Officers. On or before the Closing,
Sellers shall cause all managers and officers of Van Keuren to deliver their written resignations to Buyer, which resignations shall be effective at the Closing. Buyer agrees that all rights to indemnification and all limitations on liability existing in favor Van Keuren’s partners, members, managers and officers as provided in such entities’ organizational documents and under applicable Legal Requirements, shall survive the Closing and continue in full force and effect.

ARTICLE VIII

CONDITIONS TO EACH PARTY’S OBLIGATIONS

The obligation of each party to effect the transactions contemplated hereby shall be subject to the fulfillment, or written waiver by each of the parties, at or prior to the Closing of each of the following conditions:

Section 8.1                                Regulatory Approvals. Any necessary regulatory approvals shall
have been obtained.

Section 8.2                                Third Party Consents. Sellers shall have obtained, at Sellers’
expense, all consents, authorizations, approvals and waivers, including those set forth on Section 8.2 of the Sellers’ Disclosure Schedule, necessary to consummation of the transactions contemplated by this Agreement except such consents which, if not obtained, would not have a Material Adverse Effect.

 

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Section 8.3                                No Injunction or Proceeding. No statute, rule, regulation, executive
order, decree, or Order shall have been enacted, entered, promulgated or enforced by any Governmental Entity which prohibits or restricts the consummation of the transactions contemplated hereby.

Section 8.4                                Closing Deliveries. All documents, instruments, certificates
or other items required to be delivered by Buyer pursuant to Section 2.2(c) shall have been delivered.

ARTICLE IX

CONDITIONS TO SELLERS’ OBLIGATIONS

The obligations of Sellers to effect the transactions contemplated hereby shall be subject to the fulfillment, or written waiver by Sellers, at or prior to the Closing, of each of the following conditions:

Section 9.1                                Representations and Warranties of Buyer are True. The representations
and warranties of Buyer contained herein qualified as to materiality or with a Material Adverse Effect qualifier shall be true and correct and those not so qualified shall be true and correct in all material respects as of the date hereof and at and as of the Closing Date as though such representations and warranties were made at and as of such date unless limited by their terms to a prior date.

Section 9.2                                Performance of Buyer. Buyer shall have performed and complied
in all material respects (provided that any covenant or agreement that is qualified by a materiality standard shall not be further qualified hereby) with all agreements, obligations and covenants required by this Agreement to be performed or complied with by Buyer on or prior to the Closing.

Section 9.3                                Certificate. Buyer shall have furnished Sellers with such certificate
to evidence its compliance with the conditions set forth in Sections 9.1 and 9.2 hereof as Sellers may reasonably request.

Section 9.4                                Closing Deliveries. All documents, instruments, certificates
or other items required to be delivered by Buyer pursuant to Section 2.2(c) shall have been delivered.

ARTICLE X

CONDITIONS TO BUYER’S OBLIGATIONS

The obligation of Buyer to effect the transactions contemplated hereby shall be subject to the fulfillment, or written waiver by Buyer, at or prior to the Closing, of each of the following conditions:

Section 10.1                                Representations and Warranties of Sellers are True. The representations
and warranties of Sellers contained herein qualified as to materiality shall be true and correct and those not so qualified shall be true and correct in all material respects as of the date hereof and at and as of the Closing Date as though such representations and warranties were made at and as of such date unless limited by their terms to a prior date.

 

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Section 10.2                                Performance of Sellers. Sellers shall have performed and complied
in all material respects (provided that any covenant or agreement that is qualified by a materiality standard shall not be further qualified hereby) with all agreements, obligations and covenants required by this Agreement to be performed or complied with by Sellers on or prior to the Closing.

Section 10.3                                Certificate. Sellers shall have furnished Buyer with a certificate
to evidence its compliance with the conditions set forth in Sections 10.1 and 10.2 hereof as Buyer may reasonably request.

Section 10.4                                Closing Deliveries. All documents, instruments, certificates
or other items required to be delivered by Sellers pursuant to Section 2.2(b) shall have been delivered.

ARTICLE XI

TERMINATION; INDEMNIFICATION

Section 11.1                                Termination. This Agreement may be terminated at any time prior
to the Closing:

(a)           by mutual consent of Buyer and Sellers;

(b)           by either Buyer or Sellers if the Closing shall not have occurred on or before the 30th day following the date of this Agreement; or

(c)           by either Buyer or Sellers, if any Governmental Entity shall have issued an Order or taken any other action permanently restraining, enjoining or otherwise prohibiting any of the transactions contemplated hereby, and such Order or action shall
have become final and non-appealable;

(d)           by either Buyer or Sellers in the event of a breach by the other party of any representation, warranty, covenant or agreement contained in this Agreement which (i) would give rise to the failure of a condition to the Closing hereunder and (ii)
cannot be or has not been cured within thirty (30) days (the “Cure Period”) following receipt by the breaching party of written notice of such breach.

Notwithstanding anything in the foregoing to the contrary, a party that is in breach of this Agreement shall not be entitled to terminate this Agreement.

Section 11.2                                Procedure and Effect of Termination. In the event of a termination
of this Agreement pursuant to Section 11.1 hereof by one party, written notice thereof shall forthwith be given to the other party, and, except as set forth below, this Agreement shall terminate and be void and have no effect and the transactions contemplated hereby shall be abandoned. If this Agreement is terminated as provided herein:

(a)           Buyer shall redeliver, and shall cause its agents (including, without limitation, attorneys and accountants) to redeliver, all documents, work papers and other materials of Sellers relating to the transactions contemplated hereby, whether obtained
before or after the execution hereof or certify the destruction thereof;

 

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(b)           all information received by Buyer with respect to the business, operations, assets or financial condition of Sellers and the Giordano Parties shall remain confidential;

(c)           except as otherwise expressly set forth herein, no party to this Agreement shall have any liability hereunder to any other party, except (i) for any breach by such party of the terms and provisions of this Agreement and (ii) as stated in paragraphs
(a) and (b) of this Section 11.2; and

(d)           Article I, Article XII and this Section 10.2 shall survive such termination.

Section 11.3                                Survival of Representations, Warranties and Covenants.

(a)           Representations and warranties contained in Sections 3.1, 3.2, 4.1, 4.2 and 4.4 (such
representations and warranties collectively the “Sellers’ Surviving Representations”) and Sections 5.1, 5.2, and 5.5 (such representations and warranties collectively the “Buyer’s Surviving Representations”) shall survive the Closing and
remain in full force and effect indefinitely. Except as otherwise provided, all other representations and warranties contained herein shall terminate at the Closing.

(b)           To the extent that such are performable after the Closing, each of the covenants and agreements contained in this Agreement shall survive the Closing indefinitely.

(c)           The sole and exclusive remedy for any post-Closing breach of any representation, warranty, covenant or agreement in this Agreement shall be pursuant to Section 11.4 hereof.  UNDER
NO CIRCUMSTANCES SHALL ANY PARTY BE LIABLE TO ANY OTHER PARTY FOR CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGES.

Section 11.4                                Indemnification.

(a)           From and after the Closing, Sellers shall indemnify and hold harmless, subject to the limitation set forth in this Section 11.4, Buyer from and against any Damages arising from or in connection with
(i) any inaccuracy in or breach of any Sellers’ Surviving Representation, (ii) the failure of Sellers to duly perform or observe any term, provision, covenant or agreement to be performed or observed by it pursuant to this Agreement or (iii) any liabilities arising from matters identified in the Environmental Report.

(b)           From and after the Closing, Buyer shall indemnify and hold harmless Sellers from and against any Damages to the extent they are the result of (i) any inaccuracy in or breach of any Buyer’s Surviving Representation or (ii) the failure of
Buyer to duly perform or observe any term, provision, covenant or agreement to be performed or observed by Buyer pursuant to this Agreement.

(c)           Notwithstanding anything herein to the contrary, the maximum aggregate liability of Sellers to Buyer under this Agreement shall not exceed the Purchase Price.

(d)           A party seeking indemnification hereunder (an “Indemnified Party”) shall give notice to the party from which indemnification is sought (an “Indemnifying
Party”) promptly after such Indemnified Party has actual knowledge of any claim which might give rise to a claim for Damages, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom;provided that the Indemnified Party may participate in such defense at its own expense (unless the Indemnified Party shall have reasonably concluded, based upon a written opinion of outside counsel, that there
is a reasonable likelihood of a conflict of interest between the Indemnifying Party and the Indemnified Party in such action, in which case the fees and expenses of one separate firm of counsel shall be at the expense of the Indemnifying Party); and provided further, that the failure of the Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations hereunder unless
the Indemnifying Party is actually and materially prejudiced thereby. An Indemnifying Party, in the defense of any such claim or litigation, shall not, except with the consent of the Indemnified Party (which consent shall not unreasonably be withheld or delayed), consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a full and unconditional release from all liability in respect
of such claim or litigation. An Indemnified Party shall furnish such information regarding itself or the claim in question as such Indemnifying Party may reasonably request in writing and as shall be reasonably required in connection with defense of such claim and litigation resulting therefrom.

 

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(e)           Any calculation of Damages for purposes of this Section 11.4 shall be net of any insurance recovery made by the Indemnifying Party (whether paid directly to such Indemnified Party or assigned by
the Indemnified Party to such Indemnified Party);provided, however, insurance proceeds will not reduce the Damages if the Indemnified Party is self-insured and to the extent of any deductible amount. Any indemnity payment under this Agreement shall be treated as an adjustment to the Purchase Price for Tax purposes, unless a final determination (which shall include the execution of Form 870-AD or successor form) with
respect to the Indemnified Party or any of its Affiliates causes any such payment not to be treated as an adjustment to the Purchase Price for U.S. Federal income Tax purposes.

(f)           Any claim for Taxes shall be provided for exclusively in Article VI, subject to Sections 11.4(c) and (e).

ARTICLE XII

MISCELLANEOUS

Section 12.1                                Waivers and Amendments. This Agreement may be amended, and the
terms hereof may be waived, only by a written instrument signed by each of the parties or, in the case of a waiver, by the party or parties waiving compliance. No delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any party of any right, power or privilege, nor any single or partial exercise of any such right, power or privilege preclude any further exercise thereof or the exercise of any other such right,
power or privilege.

Section 12.2                                Entire Agreement; Assignment. This Agreement (which term shall
be deemed to include the exhibits and schedules hereto) constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all other prior agreements and understandings, both written and oral, among the parties or any of them with respect to the subject matter hereof. This Agreement may not be assigned by any party hereto without the consent of every other party.

 

21

 

 

Section 12.3                                Severability. If any term or other provision of this Agreement
is determined by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced under any rule of applicable law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated herein are not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced,
the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated herein are consummated as originally contemplated to the fullest extent possible.

Section 12.4                                Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including facsimile or similar writing) and shall be given:

(a)           If to Buyer, to:

CleanTech Biofuels, Inc.

7386 Pershing Avenue

St. Louis, MO 63130

Attention: Edward P. Hennessey, Chairman and CEO

Fax: (314) 802-8675

Email: ed.hennessey@cleantechbiofuels.net

 

(b)           if to Sellers, to:

c/o Joseph Smentkowski, Inc.

160 James Avenue

Jersey City, NJ 07306

Attention: Gary Giordano

Fax: (201) 420-9215

Email: ggiordano@galaxyrecycling.com

 

with a copy to (which shall not constitute notice):

Chiaia & Associates LLC

277 Fairfield Road, Suite 120

Fairfield, NJ 07004

Attention: John F. Chiaia

Fax: (201) 299-2540

Email: chiaialaw@gmail.com

 

(c)           to such other address or facsimile number as a party may hereafter specify by like notice to the other party.

 

22

 

 

(d)           all notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the
addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a document in .pdf or similar format (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid.

Section 12.5                               Governing Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of New Jersey, without regard to principles of conflicts of laws.

Section 12.6                              Publicity. Sellers acknowledges that the Parent and the Buyer will make one or more public announcements
relating to the transactions contemplated by this Agreement. Except as otherwise may be required by applicable law, for so long as this Agreement is in effect, Sellers shall not issue or cause the publication of any press release or other public announcement with respect to the transactions contemplated by this Agreement without the express prior written approval of the Buyer, which consent shall not be unreasonably withheld or delayed.

Section 12.7                                Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement. A facsimile, telecopy, PDF format or other reproduction of this Agreement may be executed by one or more parties hereto and delivered by such party by facsimile or any similar electronic transmission device or technology pursuant to which the signature of or on behalf of such party can be seen. Such execution and delivery shall be considered valid, binding and effective for all purposes of this Agreement.
At the request of any party, all parties hereto agree to execute and deliver an original of this Agreement as well as any facsimile, telecopy or other electronic reproduction hereof.

Section 12.8                                Expenses. Whether or not the transactions contemplated by this
Agreement are consummated, and except as otherwise expressly set forth herein, all legal and other costs and expenses incurred in connection with the transactions contemplated by this Agreement shall be paid by the party incurring such expenses;provided, however, that in the event of a dispute between the parties in connection with this Agreement and the transactions contemplated hereby, each of the parties hereto
hereby agrees that the prevailing party shall be entitled to reimbursement by the other party of reasonable legal fees and expenses incurred in connection with any action or proceeding.

Section 12.9                                Affiliate Liability. Neither any
direct or indirect holder of equity interests in Sellers, nor any present, past or future director, officer, employee, agent, manager, member, partner or Affiliate of Sellers or of any such holder, shall have any liability or obligation of any nature whatsoever under or in connection with this Agreement or the transaction contemplated by this Agreement, and Buyer hereby waives and releases all claims of such liability and/or obligation.

 

23

 

 

Section 12.10                                Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto and nothing in this Agreement, express or implied, is intended by or shall confer upon any other Person any rights, benefits or remedies of any nature whatsoever under or by reason of this Agreement.

Section 12.11                                Interpretation.

(a)           No reference in this Agreement to “commercially reasonable efforts” shall require a Person obligated to use such efforts to incur out-of-pocket expenses or indebtedness.

(b)           Each of the parties acknowledges that it has been represented by independent counsel of its choice throughout all negotiations that have preceded the execution of this Agreement and that it has executed the same with consent and upon the advice
of said independent counsel. Each party and its counsel cooperated in the drafting and preparation of this Agreement, and any and all drafts relating thereto shall be deemed the work product of the parties and may not be construed against any party by reason of its preparation. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against any party that drafted the Agreement is of no application and is hereby expressly waived.

 

[Signature Page Follows]

 

 

 

 

 

 

 

24

 

 

 

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

SELLERS:

GARY GIORDANO

 

By:__________________________________________________

 

 

THOMAS GIORDANO

 

By:_________________________________________________

 

 

 

25 VAN KEUREN LLC

 

By:_________________________________________________

Name:

Title:

 

CLEANTECH BIOFUELS, INC.

 

By:_________________________________________________

       Name: Edward P. Hennessey

       Title: Chairman and Chief Executive Officer

 

25

 

 

SELLERS’ DISCLOSURE SCHEDULE WITH RESPECT TO VAN KEUREN

 

Section 3.2(b)                                            List of All Subsidiaries:                                      
None.

 

 

26

 

 

SELLERS’ DISCLOSURE SCHEDULE WITH RESPECT TO VAN KEUREN

 

Section 3.3                                            Liabilities:                                 See
attached Balance Sheet as of April 30, 2016. 

 

 

 

 

27

 

 

 

SELLERS’ DISCLOSURE SCHEDULE WITH RESPECT TO VAN KEUREN

 

 

Section 3.7                                              Absence of Certain Changes:                                  
None.

 

 

Section 3.10                                            Contracts:                                                                 None.

 

 

Section 3.11                                            Litigation:                                                                 None.

 

 

Section 3.12                                            Insurance:                                                                 None.

 

 

Section 3.13                                            Environmental Matters:                                          
None.

 

 

Section 3.15                                            Taxes:                                                           
          None.

 

 

Section 3.16                                            Transactions with Affiliates:                                  
None.

 

 

Section 7.1                                             Conduct of Business:                                              
None.

 

 

Section 8.2                                             Third Party Consents:                                             
None.

 

 

28

 

 

EXHIBIT A

FORM OF LEASE AGREEMENT

LEASE AGREEMENT

 

THIS LEASE AGREEMENT (the “Lease”) is entered into and effective as of _________ __, 2016 between 160 James Avenue, LLC, a New Jersey limited liability company (the “Landlord”), and [VK Acquisition [LLC][Corp.]],
a [Delaware] [limited liability company][corporation], or any subsidiary or affiliate thereof (the “Tenant”).

Landlord and Tenant agree as follows:

1. LEASE SUMMARY.

(a) Leased Premises. The leased commercial real estate consists of the real property and all improvements thereon, and commonly described as the commercial property located at 25 James Avenue, Jersey City, New Jersey 07003, on the corner of Van Keuren Avenue, also known as Block 681, Lot 7C on the tax
map of the City of Jersey City in the State of New Jersey (the “Premises”).

(b) Lease Commencement Date. The term of this Lease shall be for a period of one hundred and twenty (120) months, and shall commence on [______ __, 2016], or such earlier date as provided in Section 3 (the “Commencement Date”).

(c) Lease Termination Date. The term of this Lease shall terminate at midnight on [_____ __, 2026] or such earlier or later date as provided in Section 3 (the “Termination Date”). Tenant shall have
the right and option to extend this Lease as set forth in Section 3(c).

(d) Base Rent. The base monthly rent shall be $35,000 per month (“Base Rent”). Rent shall be payable at Landlord's address shown in Section 1(h) below, or such other place designated in writing by Landlord.

(e) Prepaid Rent. On or before the date that is thirty (30) days prior to the Commencement Date, Tenant shall deliver to Landlord the sum of $35,000 as prepaid rent, to be applied to the Rent due for the first month of the Lease.

(f) Security Deposit. [Upon execution of this Lease], Tenant shall deliver to Landlord the sum of $35,000 in cash to be held as a security deposit pursuant to Section 5 below.

(g) Permitted Use. The Premises shall be used for the development, construction and operation of (1) a solid waste transfer station and material recovery facility, (2) a biomass recovery process and facility, and (3) a back-end conversion process that utilizes such biomass (the “Permitted
Use”). The Premises may not be used for any other purpose without the prior written consent of Landlord.

 

 

 

(h) Notice and Payment Addresses. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a
nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a document in a .pdf or similar format (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the following
addresses:

Landlord:              160 James Avenue, LLC

3 New York Avenue

Jersey City, NJ 07307

Attn: Gary Giordano

Tel No.:     201-866-7510

Fax No.:    201-420-9215

Email:       ggiordano@galaxyrecycling.com

 

with a copy to (which shall not constitute notice):

John Chiaia & Associates, LLC

277 Fairfield Road, Suite 120

Fairfield, NJ 07004

Attn: John F. Chiaia

Tel No.:        201-292-4616

Fax No.:       201-299-2540

Email:          chiaialaw@gmail.com

Tenant:                 [VK Acquisition [LLC][Corp.]]

7385 Pershing Avenue

St. Louis, MO 63130

Attn: Edward P. Hennessey

 

 

 

Tel No.:           314-802-8671

Fax No.:          314-802-8675

Email:              ed.hennessey@cleantechbiofuels.net

 
with a copy to (which shall not constitute notice):

CleanTech Biofuels, Inc.

7385 Pershing Avenue

St. Louis, MO 63130

Attn: Edward P. Hennessey

Tel No.:          314-802-8671

Fax No.:         314-802-8675

Email:            ed.hennessey@cleantechbiofuels.net

2. PREMISES.

(a) Lease of Premises. Landlord leases to Tenant, and Tenant leases from Landlord the Premises upon the terms specified in this Lease.

(b) Acceptance of Premises. Except as specified elsewhere in this Lease, Landlord makes no representations or warranties to Tenant regarding the Premises, including the structural condition of the Premises or the condition of all mechanical, electrical, and other systems on the Premises. Tenant shall
be responsible for performing any work necessary to bring the Premises into a condition satisfactory to Tenant. By signing this Lease, Tenant acknowledges (i) that it has had an adequate opportunity to investigate the Premises;(ii) acknowledges responsibility for making any corrections, alterations and repairs to the Premises (other than the Landlord's Work); and (iii) acknowledges that the time needed to complete any such items shall not delay the Commencement Date.

Tenant shall be deemed to have accepted the Premises in their then condition upon execution of this Lease.

(c) Tenant Improvements. Attached Exhibit A sets forth all Tenant's Work, if any, and all tenant improvements to be completed by Tenant (the “Tenant's Work”), if any, that will be performed on the
Premises. Tenant shall be responsible for the design, payment and performance of all such work.

3. TERM. The term of this Lease shall commence on the Commencement Date specified in Section 1.

 

 

 

(a) Early Possession. If Landlord permits Tenant to possess or occupy the Premises prior to the Commencement Date specified in Section 1, then such early occupancy shall not advance the Commencement Date or the Termination Date set forth in Section 1, but otherwise all terms and conditions of this Lease
shall nevertheless apply during the period of early occupancy before the Commencement Date.

(b) Delayed Possession. Landlord shall act diligently to make the Premises available to Tenant; provided, however, neither Landlord nor any agent or employee of Landlord shall be liable for any damage or loss due to Landlord's inability or failure to deliver possession of the Premises to Tenant as provided
in this Lease. If possession is delayed, the Commencement Date set forth in Section 1 shall also be delayed. In addition, the Termination Date set forth in Section 1 shall be modified so that the length of the Lease term remains the same. If Landlord does not deliver possession of the Premises to Tenant within sixty (60) days after the Commencement Date specified in Section 1, Tenant may elect to cancel this Lease by giving written notice to Landlord within ten (10) days after such time period ends. If Tenant
gives such notice of cancellation, the Lease shall be cancelled, all prepaid rent and security deposits shall be refunded to Tenant, and neither Landlord nor Tenant shall have any further obligations to the other.

The first “lease year” shall commence on the Commencement Date and shall end on the date which is twelve (12) months from the end of the month in which the Commencement Date occurs. Each successive lease year during the initial term and any extension terms shall be twelve (12) months, commencing on the first day following the end of the
preceding Lease Year. To the extent that the tenant improvements are not completed in time for the Tenant to occupy or take possession of the Premises on the Commencement Date due to the failure of Tenant to fulfill any of its obligations under this Lease, the Lease shall nevertheless commence on the Commencement Date set forth in Section 1.

(c) Option to Extend. Tenant shall have the right and option to extend the Lease for two (2) successive five (5) year terms at the rent specified in Section 1(d) and Section 4. Tenant must provide written notice to Landlord in any manner set forth in Section 1(i) at least sixty (60) days prior to the
expiration of the initial term or any subsequent option period. The Base Rent for the first option period shall be $38,500 per month, and the Base Rent for the second option period shall be $42,350 per month.

4. RENT.

(a) Payment of Rent. Tenant shall pay Landlord without notice, demand, deduction, or offset, in lawful money of the United States, the monthly Base Rent stated in Section 1 in advance on or before the first day of each month during the Lease term beginning the Commencement Date, and shall also pay any
other additional payments due to Landlord (“Additional Rent”), including Operating Costs (collectively the “Rent”) when required under this Lease. Payments for any partial month at the beginning or end of the Lease shall be prorated. All payments due to Landlord under this Lease, including late fees, interest and reasonable attorneys’ fees, shall also constitute Additional Rent, and upon
failure of Tenant to pay any such costs, charges or expenses, Landlord shall have the same rights and remedies as otherwise provided in this Lease for the failure of Tenant to pay rent.

 

 

 

(b) Triple Net Lease. This Lease is what is commonly called a “Net, Net, Net” or “triple-net” Lease, which means that, except as otherwise expressly provided herein, Landlord shall receive all Base Rent free and clear of any and all other impositions, taxes, liens, charges or expenses
of any nature whatsoever in connection with the ownership and operation of the Premises. In addition to Base Rent, Tenant shall pay to the parties respectively entitled thereto, or satisfy directly, all Additional Rent and other impositions, insurance premiums (including insurance for environmental liabilities), repair and maintenance charges, and any other charges, costs, obligations, liabilities and expenses, which arise with regard to the Premises or may be contemplated under anyother provision of the Lease
during its term, except for costs and expenses expressly made the obligation of Landlord in this Lease.

(c) Late Charges; Default Interest. If any sums payable by Tenant to Landlord under this Lease are not received within ten (10) days after their due date, Tenant shall pay Landlord an amount equal to the greater of $100 or five percent (5%) of the delinquent amount for the cost of collecting and handling
such late payment in addition to the amount due and as Additional Rent. All delinquent sums payable by Tenant to Landlord and not paid within ten (10) days after their due date shall, at Landlord's option, bear interest at the rate of ten percent (10%) per annum or the highest rate of interest allowable by law, whichever rate is less (the “Default Rate”). Interest on all delinquent amounts shall be calculated from the original due date to the date of
payment.

(d) Less Than Full Payment. Landlord's acceptance of less than the full amount of any payment due from Tenant shall not be deemed an accord and satisfaction or compromise of such payment unless Landlord specifically consents in writing to payment of such lesser sum as an accord and satisfaction or compromise
of the amount which Landlord claims. Any portion that remains to be paid by Tenant shall be subject to the late charges and default interest provisions of this Section 4.

5. SECURITY DEPOSIT. Upon execution of this Lease, Tenant shall deliver to Landlord the security deposit specified in Section 1 above. Landlord's obligations with respect to the security deposit are those
of a debtor and not of a trustee, and Landlord may commingle the security deposit with its other funds. If Tenant breaches any covenant or condition of this Lease, including but not limited to the payment of Rent, Landlord may apply all or any part of the security deposit to the payment of any sum in default and any damage suffered by Landlord as a result of Tenant's breach. Tenant acknowledges, however, that the security deposit shall not be considered as a measure of Tenant's damages in case of default by Tenant,
and any payment to Landlord from the security deposit shall not be construed as a payment of liquidated damages for Tenant's default. If Landlord applies the security deposit as contemplated by this Section, Tenant shall, within ten (10) days after written demand therefore by Landlord, deposit with Landlord the amount so applied. If Tenant complies with all of the covenants and conditions of this Lease throughout the Lease term, the security deposit shall be repaid to Tenant without interest within thirty (30)
days after the surrender of the Premises by Tenant in the condition required hereunder by Section 11 of this Lease.

 

 

 

6. USES. The Premises shall be used only for the Permitted Use specified in Section 1 above, and for no other business or purpose without the prior written consent of Landlord. No act shall be done on or around
the Premises that is unlawful or that will increase the existing rate of insurance on the Premises, or cause the cancellation of any insurance on the Premises. Tenant shall not commit or allow to be committed any waste upon the Premises, or any public or private nuisance. Tenant shall not do or permit anything to be done on the Premises which will obstruct or interfere with the rights of other tenants or occupants of the Premises, or their employees, officers, agents, servants, contractors, customers, clients,
visitors, guests, or other licensees or invitees or to injure or annoy such persons.

7. COMPLIANCE WITH LAWS. Tenant shall not cause or permit the Premises to be used in any way that violates any law, ordinance, or governmental regulation or order. Landlord represents to Tenant that, as of
the Commencement Date, to Landlord's knowledge, but without duty of investigation, and with the exception of any Tenant's Work, the Premises comply with all applicable laws, rules, regulations, or orders, including without limitation, the Americans With Disabilities Act, if applicable, and Landlord shall be responsible to promptly cure at its sole cost any noncompliance which existed on the Commencement Date. Tenant shall be responsible for complying with all laws applicable to the Premises as a result of the
Permitted Use, and Tenant shall be responsible for making any changes or alterations as may be required by law, rule, regulation or order for Tenant's Permitted Use at its sole cost and expense. Otherwise, if changes or alterations are required by rule, law, regulation, or order unrelated to the Permitted Use, Landlord shall make changes and alterations at its own expense.

8. UTILITIES. Landlord shall not be responsible for providing any utilities to the Premises and shall not be liable for any loss, injury or damage to person or property caused by or resulting from any variation,
interruption, or failure of utilities due to any cause whatsoever, and rent shall not abate as a result thereof, except to the extent due to the intentional misconduct or gross negligence of Landlord. Tenant shall be responsible for determining whether available utilities and their capacities will meet Tenant's needs. Tenant shall install and connect, if necessary, and directly pay for all water, sewer, gas, janitorial, electricity, garbage removal, heat, telephone, and other utilities and services used by Tenant
on the Premises during the term, whether or not such services are billed directly to Tenant. Tenant will also procure, or cause to be procured, without cost to Landlord, all necessary permits, licenses or other authorizations required for the lawful and proper installation, maintenance, replacement, and removal on or from the Premises of wires, pipes, conduits, tubes, and other equipment and appliances for use in supplying all utilities or services to the Premises. Landlord, upon request of Tenant, and at the
sole expense and liability of Tenant, shall join with Tenant in any reasonable applications required for obtaining or continuing such utilities or services.

9. TAXES. Tenant shall pay all Taxes (defined below) applicable to the Premises during the Lease term. All payments for Taxes shall be made at least five (5) days prior to their due date. Tenant shall promptly
furnish Landlord with satisfactory evidence that Taxes have been paid. If any Taxes paid by Tenant cover any period of time before or after the expiration of the term, Tenant's share of those Taxes paid will be prorated to cover only the period of time within the tax fiscal year during which this Lease was in effect, and promptly reimburse or credit Tenant to the extent required. If Tenant fails to timely pay any Taxes, Landlord may pay them, and Tenant shall repay such amount to Landlord upon demand. Landlord
may also elect to pay all such Taxes directly to the appropriate taxing authorities and receive reimbursement thereof from Tenant within ten (10) days after invoice, either of the full amount paid or at Landlord's election in equal monthly installments.

 

 

 

The term “Taxes” shall mean: (i) any form of tax or assessment imposed on the Premises by any authority, including any city, county, state or federal government, or any improvement district, as against any legal or equitable interest of Landlord or Tenant in the Premises or in the real property
of which the Premises are a part, or against rent paid for leasing the Premises; and (ii) any form of personal property tax or assessment imposed on any personal property, fixtures, furniture, tenant improvements, equipment, inventory, or other items, and all replacements, improvements, and additions to them, located on the Premises, whether owned by Landlord or Tenant. “Taxes” shall exclude any net income tax imposed on Landlord for income that Landlord
receives under this Lease.

Tenant may, upon reasonable prior notice to Landlord, contest the amount or validity, in whole or in part, of any Taxes at its sole expense, only after paying such Taxes or posting such security as Landlord may reasonably require in order to protect the Premises against loss or forfeiture. Upon the termination of any such proceedings, Tenant shall
pay the amount of such Taxes or part of such Taxes as finally determined, together with any costs, fees, interest penalties, or other related liabilities. Landlord shall reasonably cooperate with Tenant in contesting any Taxes, provided Landlord incurs no expense or liability in doing so.

10. ALTERATIONS. Tenant may make alterations, additions or improvements to the Premises, including any Tenant Work identified on attached Exhibit B (the “Alterations”),
only with the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned, or delayed. Landlord shall have ten (10) days in which to respond to Tenant's request for any Alterations so long as such request includes the name of Tenant's contractors and reasonably detailed plans and specifications therefore. The term “Alterations” shall not include the installation of shelves, movable partitions, Tenant's equipment,
and trade fixtures that may be performed without damaging existing improvements or the structural integrity of the Premises, and Landlord's consent shall not be required for Tenant's installation or removal of those items. Tenant shall perform all work at Tenant's expense and in compliance with all applicable laws. Tenant shall pay, when due, or furnish a bond for payment (as set forth in Section 18) all claims for labor or materials furnished to or for Tenant at or for use in the Premises, which claims are or
may be secured by any mechanics' or materialmen’s' liens against the Premises or any interest therein. Tenant shall remove allAlterations at the end of the Lease term unless otherwise agreed to in writing by the Tenant and Landlord. Tenant shall repair any damage to the Premises caused by removal of Alterations.

11. REPAIRS AND MAINTENANCE; SURRENDER. Tenant shall, at its sole expense, maintain the entire Premises in good condition and promptly make all repairs and replacements, whether structural or non-structural,
necessary to keep the Premises in safe operating condition, including all utilities and other systems serving the Premises. Notwithstanding anything in this Section to the contrary, Tenant shall not be responsible for any repairs to the Premises made necessary by the negligence or willful misconduct of Landlord or its employees, officers, agents, servants, contractors, customers, clients, visitors, guests, or other licensees or invitees therein. If Tenant fails to perform Tenant's obligations under this Section,
Landlord may at Landlord's option enter upon the Premises after thirty (30) days' prior notice to Tenant and put the same in good order, condition and repair and the cost thereof together with interest thereon at the default rate set forth in Section 4 shall be due and payable as Additional Rent to Landlord together with Tenant's next installment of Base Rent. Upon expiration of the Lease term, whether by lapse of time or otherwise, Tenant shall promptly and peacefully surrender the Premises, together with all
keys, to Landlord in as good condition as when received by Tenant from Landlord or as thereafter improved, reasonable wear and tear and insured casualty excepted.

 

 

 

12. ACCESS AND RIGHT OF ENTRY. After forty-eight (48) hours' notice from Landlord (except in cases of emergency, when no notice shall be required), Tenant shall permit Landlord and its agents, employees and
contractors to enter the Premises at all reasonable times to make repairs, inspections, alterations or improvements, provided that Landlord shall use reasonable efforts to minimize interference with Tenant's use and enjoyment of the Premises. This Section shall not impose any repair or other obligation upon Landlord not expressly stated elsewhere in this Lease. After reasonable notice to Tenant, Landlord shall have the right to enter the Premises for the purpose of (a) showing the Premises to prospective purchasers
or lenders at any time, and to prospective tenants within one hundred eighty (180) days prior to the expiration or sooner termination of the Lease term; and (b) for posting “for lease” signs within one hundred eighty (180) days prior to the expiration or sooner termination of the Lease term.

13. SIGNAGE. Tenant shall obtain Landlord's written consent, which consent shall not be unreasonably withheld, as to the size, location, materials, method of attachment, and appearance, before installing any
signs upon the Premises. Tenant shall install any approved signage at Tenant's sole expense and in compliance with all applicable laws. Tenant shall not damage or deface the Premises in installing or removing signage and shall repair any injury or damage to the Premises caused by such installation or removal.

14. DESTRUCTION OR CONDEMNATION.

(a) Damage and Repair. If the Premises are partially damaged but not rendered untenantable, by fire or other insured casualty, then Landlord shall diligently restore the Premises to the extent required below and this Lease shall not terminate. The Premises shall not be deemed untenantable if twenty-five
percent (25%) or less of the Premises are damaged. If insurance proceeds are available to Landlord but are not sufficient to pay the entire cost of restoring the Premises, or if Landlord's lender shall not permit all or any part of the insurance proceeds to be applied toward restoration, then Landlord may elect to terminate this Lease and keep the insurance proceeds, by notifying Tenant within sixty (60) days of the date of such casualty.

 

 

 

If the Premises are entirely destroyed, or partially damaged and rendered untenantable, by fire or other casualty, Landlord may, at its option (a) terminate this Lease as provided herein, or (b) restore the Premises to their previous condition to the extent required below; provided, however, if such casualty event occurs during the last six (6) months
of the Lease term (after considering any option to extend the term timely exercised by Tenant) then either Tenant or Landlord may elect to terminate the Lease. If, within sixty (60) days after receipt by Landlord from Tenant of written notice that Tenant deems the Premises untenantable, Landlord fails to notify Tenant of its election to restore the Premises, or if Landlord is unable to restore the Premises within six (6) months of the date of the casualty event, then Tenant may elect to terminate the Lease upon
twenty (20) days' written notice to Landlord unless Landlord, within such twenty (20) day period, notifies Tenant that it will in fact restore the Premises or actually completes such restoration work. If Landlord restores the Premises under this Section 14, Landlord shall proceed with reasonable diligence to complete the work, and the base monthly rent shall be abated in the same proportion as the untenantable portion of the Premises bears to the whole Premises, provided that there shall be a rent abatement only
if the damage or destruction of the Premises did not result from, or was not contributed to directly or indirectly by the act, fault or gross negligence of Tenant, or Tenant's employees, officers, agents, servants, contractors, customers, clients, visitors, guests, or other licensees or invitees. No damages, compensation or claim shall be payable by Landlord for inconvenience, loss of business or annoyance directly, incidentally or consequentially arising from any repair or restoration of any portion of the Premises.
Landlord shall have no obligation to carry insurance of any kind for the protection of Tenant or any alterations or improvements paid for by Tenant; any Tenant Improvements identified in Exhibit C (regardless of who may have completed them); Tenant's furniture; or on any fixtures, equipment, improvements or appurtenances of Tenant under this Lease, and Landlord's restoration obligations hereunder shall not include any obligation to repair any damage thereto or replace the same.

(b) Condemnation. If the Premises are made untenantable by eminent domain, or conveyed under a threat of condemnation, this Lease shall automatically terminate as of the earlier of the date title vests in the condemning authority or the condemning authority first has possession of the Premises and all
Rents and other payments shall be paid to that date. If the condemning authority takes a portion of the Premises that does not render the Premises untenantable, then this Lease shall continue in full force and effect and the base monthly rent shall be equitably reduced based on the proportion by which the floor area of any structures is reduced The reduction in Rent shall be effective on the earlier of the date the condemning authority first has possession of such portion or title vests in the condemning authority.
Landlord shall be entitled to the entire award from the condemning authority attributable to the value of the Premises and Tenant shall make no claim for the value of its leasehold. Tenant shall be permitted to make a separate claim against the condemning authority for moving expenses, provided that in no event shall Tenant's claim reduce Landlord's award.

15. INSURANCE.

(a) Tenant's Liability Insurance. During the Lease term, Tenant shall pay for and maintain commercial general liability insurance with broad form property damage and contractual liability endorsements. This policy shall name Landlord, its property manager (if any), and other parties designated by Landlord
as additional insureds using an endorsement form acceptable to Landlord, and shall insure Tenant's activities and those of Tenant's employees, officers, agents, servants, contractors, customers, clients, visitors, guests or other licensees or invitees with respect to the Premises against loss, damage or liability for personal injury or bodily injury (including death) or loss or damage to property with a combined single limit of not less than $2,000,000, and a deductible of not more than $10,000. Tenant's insurance
will be primary and noncontributory with any liability insurance carried by Landlord.

 

 

 

(b) Tenant's Property Insurance. During the Lease term, Tenant shall pay for and maintain special form clauses of loss coverage property insurance (with coverage for earthquake if required by Landlord's lender and, if the Premises are situated in a flood plain, flood damage) for all of Tenant's personal
property, fixtures and equipment in the amount of their full replacement value, with a deductible of not more than $10,000.

(c) Miscellaneous. Tenant's insurance required under this Section shall be with companies rated A-/VII or better in Best's Insurance Guide, and which are admitted in the state in which the Premises are located. No insurance policy shall be cancelled or reduced in coverage and each such policy shall provide
that it is not subject to cancellation or a reduction in coverage except after thirty (30) days prior written notice to Landlord. Tenant shall deliver to Landlord upon commencement of the Lease and from time to time thereafter, copies of the insurance policies or evidence of insurance and copies of endorsements required by this Section. In no event shall the limits of such policies be considered as limiting the liability of Tenant under this Lease. If Tenant fails to acquire or maintain any insurance or provide
any policy or evidence of insurance required by this Section, and such failure continues for three (3) days after notice from Landlord, Landlord may, but shall not be required to, obtain such insurance for Landlord's benefit and Tenant shall reimburse Landlord for the costs of such insurance upon demand. Such amounts shall be Additional Rent payable by Tenant hereunder and in the event of non-payment thereof, Landlord shall have the same rights and remedies with respect to such non-payment as it has with respect
to any other non-payment of rent hereunder.

(d) Waiver of Subrogation. Landlord and Tenant hereby release each other and any other tenant, their agents or employees, from responsibility for, and waive their entire claim of recovery for any loss or damage arising from any cause covered by property insurance required to be carried or otherwise carried
by each of them. Each party shall provide notice to the property insurance carrier or carriers of this mutual waiver of subrogation, and shall cause its respective property insurance carriers to waive all rights of subrogation against the other. This waiver shall not apply to the extent of the deductible amounts to any such property policies or to the extent of liabilities exceeding the limits of such policies.

(e) Tenant’s Additional Insurance. In addition to the insurance described above, throughout the Term and any and all renewal terms, Tenant shall obtain the following insurance:

(i)           property insurance insuring the buildings and improvements located on the Premises at the commencement of the Term and thereafter erected thereon or therein, including all alterations, additions and improvements thereto, against loss or damage by fire with standard “all risk”
special form (or its equivalent) coverage for the repair/replacement of the improvements consistent with standard commercial practices, including ordinance or law changes, and increased cost of construction, and for an amount based upon the replacement value of the existing buildings (exclusive of footings and foundations) as reasonably determined by Landlord's insurance agent or carrier;

 

 

 

(ii)           environmental insurance insuring against Landlord’s risk and property damage due to discharges by Tenant on and off-site; and

(iii)           a policy of commercial general liability insurance in limits not less than One Million Dollars ($1,000,000) for death of or injury to any one person, One Million Dollars ($1,000,000) for injury to property, and Five Million Dollars ($5,000,000) for any one occurrence. Landlord
shall be named as an additional insured on Tenant's commercial general liability policy. The limits of such coverage may include umbrella coverage maintained by Tenant. Landlord shall have the right to require that the limits as provided in this clause (iii) be increased no more often than once every ten years (or prior to any renewal term) to reflect the limits then maintained by Tenant under similar commercial leases in the geographical area.

(f) Additional Insurance Requirements. The insurance to be maintained by Tenant and pursuant to this Article Fifteenth shall:

(i)           be issued by such insurance companies duly licensed and authorized to do business in the State of New Jersey;

(ii)           comply with any changes in requirements applicable to the Leased Premises or the Improvements by the applicable Fire Insurance Rating Organization, or any similar body, or by statute;

(iii)           with respect to the insurance maintained pursuant to subparagraph (a) above, provide that the respective interests of Landlord and the holder of any Leasehold Mortgagee(s) shall not be subject to cancellation by reason of any act or omission of Tenant without the insurer giving
Landlord prior written notice;

(iv)           also name Landlord, any fee mortgagee(s), if any, and any leasehold mortgagee(s), as their interests may appear; and

(v)           provide that, subject to the right of any first leasehold mortgagee whose interest may be covered by said policy or policies, that the loss, if any, under any such policies shall be adjusted and paid by the insurance company or companies as provided in Section 15.6.

15.2                       Evidence of Insurance. No later than the Commencement Date, Tenant shall deliver to Landlord certificates of the insurance required under Sections 15.1(a) and
15.1(b). All premiums and charges for all of said policies shall be paid by Tenant. Tenant shall provide Landlord with a certificate evidencing Tenant maintenance of the insurance required pursuant to Sections 15.1(a) and 15.1(b) not less than two (2) days prior to the expiration dates of such insurance.

 

 

 

15.3                       Payment of Premiums. All premiums and charges for all of said policies shall be paid by Tenant, and if Tenant shall fail to make any such payment when due, or
shall fail to carry any such policy, and such failure shall not be rectified within thirty (30) days after Tenant receives Notice of same from Landlord, then Landlord may, but shall not be obligated to, make such payment or carry such policy, and the amount paid by Landlord, with interest thereon at the Default Rate, shall be repaid to Landlord by Tenant as additional rent on demand and all such amounts so repayable, together with such interest, shall be considered as additional rent payable hereunder, for the
collectionof which Landlord shall have all of the remedies herein or by law provided for the collection of rent. Payment by Landlord of any such premium or the carrying by Landlord of any such policy shall not be deemed to waive or release the default of Tenant with respect thereto.

15.4                       Renewals. Prior to the expiration of each such policy, Tenant shall pay the premiums for renewal insurance and prior to said expiration shall deliver to Landlord
a certificate of such insurance; and if such certificate shall not be so delivered, Landlord may (after first having given Tenant Notice of Landlord's intention to do so) procure and/or pay therefor, and the amounts so paid by Landlord with interest thereon at the Prime Rate from the date of payment shall become due and payable by Tenant as additional rent with the next installment of Rent which shall become due after such payment by Landlord; and payment by Landlord of any such premium shall not be deemed to
waive or release the default in payment thereof by Tenant, or the right of Landlord to take such action as may be permissible hereunder, as in the case of default in the payment of Rent.

15.5                       Compliance with Insurance Policies. Tenant shall not violate or permit to be violated any of the conditions or provision of any such policy, and Tenant shall so
perform and satisfy the commercially reasonable requirements of the companies writing such policies.

15.6 Application of Insurance Proceeds. The proceeds of the property insurance to be maintained pursuant to Sections 15.1(b) and 15.1(e)(i) shall be disbursed as follows:

(a)           the first One Million Dollars ($1,000,000) (from each policy if more than one) shall be paid to Tenant and used, applied and paid solely for the repair and restoration of the damage to the improvements on the Leased Premises; or

(b)           amounts in excess of said One Million Dollars ($1,000,000) shall be paid to and deposited with a bank or trust company in the State of New Jersey, of Tenant's selection, having assets in excess of $1,000,000,000.00 as insurance trustee (hereinafter referred to as the "Depositary")
which shall hold, apply, and make available the proceeds of such insurance, subject to the rights of any leasehold mortgagee(s), to the cost of repair of the damage and replacement or rebuilding of the Improvements as more particularly hereafter provided in Subsections 15.11 through 15.14 of this Lease.

 

 

 

15.7                       Subrogation. All insurance policies carried by either party covering the Premises, including, but not limited to property insurance, to the extent obtainable without
extra cost, shall expressly waive any right of subrogation on the part of the insurer against the other party. The parties hereto agree that their policies will include such waiver clause or endorsement so long as the same shall be obtainable without extra cost, or if extra cost shall be charged therefor, so long as the other party pays such extra cost, and the other party, at its election, may pay the same, but shall not be obligated to do so. Both Landlord and Tenant waive any and all rights of recovery, claim,
action or cause of action, against the other, their agents, officers, directors and employees for any loss or damage that may occur to the Leased Premises, the contents thereof, or any improvements thereto, by reason offire, the elements or any other cause which could be insured against under the terms of a standard fire and extended coverage insurance policy or policies, regardless of cause or origin, including the negligence of Tenant or Landlord as the case may be, their agents, officers and employees. Nothing
in this Section 15.8 shall be construed, however, to obligate Landlord to carry any such policy of insurance.

15.8                       Credit for Landlord Proceeds. In the event Landlord receives any rent insurance proceeds under a policy, Tenant shall be credited therefor as payments made to
Landlord on account of Fixed Net Rent and additional rent payable by Tenant.

15.9                       Landlord’s Cooperation. Landlord shall cooperate with Tenant in Tenant’s obtaining a policy of leasehold title insurance, at Tenant’s option.

15.10 Fire or other Casualty. If the Improvements now or hereafter erected upon the Premises during the Term shall be destroyed or damaged in whole or in part by fire, or as a result directly or indirectly of war, or by act of God, or occurring by reason of any causes whatsoever, Tenant covenants that
Tenant shall give prompt Notice thereof to Landlord, and Tenant at its own cost and expense, shall promptly repair, replace and rebuild the same, at least to the extent of the value and as nearly as practicable to the character of the Improvements existing immediately prior to such occurrence, with such changes as may be proposed and approved by Landlord, which approval will not be unreasonably withheld. Such repairs, replacements or rebuilding shall be made by Tenant, as aforesaid, and in accordance with the
following terms and conditions:

(a)           the same shall be made in accordance with plans and specifications therefor if required by law, subject, however to preparation by a licensed architect retained at the expense of Tenant;

(b)           before commencing any such work, said plans and specifications and application for all permits shall be filed and approved by all municipal or other governmental departments or authorities having jurisdiction thereof and a firm estimate for the cost of such repairs or restoration
shall be obtained;

(c)           before commencing any such work, Tenant shall, at its own cost and expense, deliver to Landlord appropriate endorsements to be attached to and made part of the fire and liability policies more particularly described in this Article Fifteen. Said endorsements shall cover all of the
risks concerned during the course of such work and shall be in form and content reasonably satisfactory to Landlord.

 

 

 

(d)           such work shall be commenced within one hundred twenty (120) days after settlement shall have been made with the insurance companies and the insurance monies shall have been turned over to Tenant or Depositary as provided in this Article Fifteen and the necessary governmental approvals,
as herein provided for, shall have been obtained, and such work shall be completed within a reasonable time, due regard being given to conditions, free and clear of all liens and encumbrances and in accordance with said plans and specifications;

(e)           at least ten (10) days before commencing such work Tenant shall notify Landlord of Tenant's intention to commence the same, and Tenant shall pay the increased premiums, if any, charged by the insurance companies carrying insurance on said building, to cover the additional risk during
the course of such work.

15.11                       Depositary. The Depositary shall, provided this Lease shall then be in full force and effect,
apply the net proceeds of any insurance deposited with it to the payment of the cost of such repairing or rebuilding as the same progresses, payments to be made promptly against properly certified vouchers of a competent architect in charge of the work selected by Tenant. The Depositary shall promptly advance out of such insurance proceeds toward each payment to be made by or on behalf of Tenant, an amount which shall bear the same proportion to such payment as the whole amount received by the Depositary shall
bear to the total estimated cost of the repairing or rebuilding except, however, that the Depositary shall withhold from each amount so to be paid by it ten (10%) percent thereof until the work of repairing or rebuilding shall have been completed with a Certificate of Occupancy issued, and proof furnished that no lien or liability has attached or will attach to the Leased Premises, the Improvements, or to Landlord in connection with such repairing or rebuilding. Provided that Tenant is not the First Leasehold
Mortgagee or another Institutional Lender, or a "related company" (as hereafter defined) with respect to the First Leasehold Mortgagee or another Institutional Lender, then if the total estimated cost of the repairs or rebuilding shall exceed the amount of the net proceeds of such insurance received by the Depositary, the Depositary shall require of Tenant that, before such repairing or rebuilding be commenced, the Depositary be secured by a surety bond or cash equal to the amount of the excess of such estimated
cost over the net insurance proceeds as security for the due completion, within a reasonable time, of such repairs or rebuilding. The total cost of all such rebuilding shall, at all events, be borne by Tenant without any contribution thereto by Landlord, but nothing herein contained shall be deemed to obligate any first leasehold mortgagee or any lender or any related company to advance monies in excess of the insurance proceeds for the purpose of repairs or rebuilding. If the insurance proceeds shall exceed
the cost of such repairs or rebuilding, the balance remaining after payment to the cost of such repairs or rebuilding shall be paid over and belong to Tenant.

15.12                       Commencement of Repairs. If the work of repairing, replacing or rebuilding said damaged or destroyed Improvements shall not have been commenced within the one
hundred twenty (120) day period provided for in subsection (d) of Section 15.11 hereof, or if such work, after commencement shall not diligently proceed, unless such work is delayed by strikes, lockouts, labor disputes or other causes unavoidable or reasonably beyond the control of Tenant, Landlord shall have the right to terminate this Lease and the term thereof by giving Tenant not less than thirty (30) days' written Notice of its intention so to do, and upon the expiration of the date fixed in such Notice,
if such work shall not have been commenced and the other conditions hereof complied with, or if after commencement such work shall not diligently proceed, this Lease, and the Term hereby granted, shall wholly cease and expire and the insurance proceeds received and receivable under any and all policies of insurance shall be retained by Landlord without claim thereon by Tenant, but subject to the right of any Leasehold Mortgagee to obtain and use such proceeds to perform such work either on behalf of Tenant or
as the Tenant of a new lease entered into pursuant to Section 17 herein but Tenant shall continue to be liable.

 

 

 

15.13                       No Termination. Except as provided in Section 15.11 or 15.13 hereof, this Lease shall not terminate or be affected in any manner by reason of the destruction
or damage in whole or in part of the Improvements, now or hereafter standing or erected on the Premises, or by reason of the untenantability of the Improvements or the Premises and the Rent reserved in this Lease as well as all other charges payable hereunder, to the extent that the same are not covered by and paid pursuant to rent insurance, the premiums for which policy are paid for by anyone other than Landlord, shall be paid by Tenant in accordance with the terms, covenants and conditions of this Lease, without
abatement, diminution or reduction.

16. INDEMNIFICATION.

(a) Indemnification by Tenant. Tenant shall defend, indemnify, and hold Landlord and its property manager, if any, harmless against all liabilities, damages, costs, and expenses, including attorneys' fees, for personal injury, bodily injury (including death) or property damage arising from any negligence
or wrongful act or omission of Tenant or Tenant's employees, officers, agents, servants, contractors, customers, clients, visitors, guests, or other.

(b) Indemnification by Landlord. Landlord shall defend, indemnify and hold Tenant harmless against all liabilities, damages, costs, and expenses, including attorneys' fees, for personal injury, bodily injury (including death) or property damage arising from any negligent or wrongful act or omission of
Landlord or Landlord's employees, officers, agents, servants, contractors, customers, clients, visitors, guests, or other licensees or invitees on or around the Premises, or arising from any breach of this Lease by Landlord. Landlord shall use legal counsel reasonably acceptable to Tenant in defense of any action within Landlord's defense obligation.

(c) Waiver of Immunity. Landlord and Tenant each specifically and expressly waive any immunity that each may be granted under the laws of the State of New Jersey. Neither party's indemnity obligations under this Lease shall be limited by any limitation on the amount or type of damages, compensation, or
benefits payable to or for any third party under any other New Jersey law.

 

 

 

(d) Exemption of Landlord from Liability. Except to the extent of claims arising out of Landlord's gross negligence or intentional misconduct, Landlord shall not be liable for injury to Tenant's business or assets or any loss of income therefrom or for damage to any property of Tenant or of its employees,
officers, agents, servants, contractors, customers, clients, visitors, guests, or other licensees or invitees, or any other person in or about the Premises.

(e) Survival. The provisions of this Section 16 shall survive expiration or termination of this Lease.

17. ASSIGNMENT AND SUBLETTING. (a) Tenant shall not assign, sublet, mortgage, encumber or otherwise transfer any interest in this Lease (collectively referred to as a “Transfer”)
or any part of the Premises, without first obtaining Landlord's written consent which shall not be unreasonably withheld, conditioned, or delayed. No Transfer shall relieve Tenant of any liability under this Lease notwithstanding Landlord's consent to such Transfer, unless such relief is consented to by the Landlord.

(b) As a condition to Landlord's approval, if given, any potential assignee or sublessee otherwise approved by Landlord shall assume all obligations of Tenant under this Lease and shall be jointly and severally liable with Tenant and any guarantor, if required, for the payment of Rent and performance of all terms of this Lease. In connection with any
Transfer, Tenant shall provide Landlord with copies of all assignments, subleases and assumption agreement or documents.

(c) If Landlord does not consent to a Transfer, then Tenant may terminate this Lease upon thirty (30) days written notice to Landlord. If Tenant terminates this Lease pursuant to this Section 17, Tenant shall have no further obligations under this Lease as of such termination date.

18. LIENS. Tenant is not authorized to subject the Landlord's assets to any liens or claims of lien. Tenant shall keep the Premises free from any liens created by or through Tenant. Tenant shall indemnify
and hold Landlord harmless from liability for any such liens including, without limitation, liens arising from any Alterations. If a lien is filed against the Premises by any person claiming by, through or under Tenant, Tenant shall, within 10 days after Landlord's demand, at Tenant's expense, either remove the lien or furnish to Landlord a bond in form and amount and issued by a surety satisfactory to Landlord, indemnifying Landlord and the Premises against all liabilities, costs and expenses, including attorneys'
fees, which Landlord could reasonably incur as a result of such lien.

19. DEFAULT. The following occurrences shall each constitute a default by Tenant (an “Event of Default”):

(a) Failure To Pay. Failure by Tenant to pay any sum, including Rent, due under this Lease following ten (10) days' notice from Landlord of the failure to pay.

(b) Insolvency. Tenant's insolvency or bankruptcy (whether voluntary or involuntary), or appointment of a receiver, assignee or other liquidating officer for Tenant's business; provided, however, that in the event of any involuntary bankruptcy or other insolvency proceeding, the existence of such proceeding
shall constitute an Event of Default only if such proceeding is not dismissed or vacated within sixty (60) days after its institution or commencement.

 

 

 

(c) Levy or Execution. The taking of Tenant's interest in this Lease or the Premises, or any part thereof, by execution or other process of law directed against Tenant, or attachment of Tenant's interest in this Lease by any creditor of Tenant, if such attachment
is not discharged within fifteen (15) days after being levied.

(d) Other Non-Monetary Defaults. The breach by Tenant of any agreement, term or covenant of this Lease other than one requiring the payment of money and not otherwise enumerated in this Section or elsewhere in this Lease, which breach continues for a period of thirty (30) days after notice by Landlord
to Tenant of such breach.

(e) Failure to Take Possession. Failure by Tenant to take possession of the Premises on the Commencement Date or failure by Tenant to commence any Tenant's Work in a timely fashion. Landlord shall not be in default unless Landlord fails to perform obligations required of Landlord within a reasonable time,
but in no event less than fifteen (15) days after notice by Tenant to Landlord. If Landlord fails to cure any such default within the allotted time, Tenant's sole remedy shall be to seek actual money damages (but not consequential or punitive damages) for loss arising from Landlord's failure to discharge its obligations under this Lease. Nothing herein contained shall relieve Landlord from its duty to perform of any of its obligations to the standard prescribed in this Lease. Any notice periods granted herein
shall be deemed to run concurrently with and not in addition to any default notice periods required by law.

20. REMEDIES. Landlord shall have the following remedies upon an Event of Default. Landlord's rights and remedies under this Lease shall be cumulative, and none shall exclude any other right or remedy allowed
by law:

(a) Termination of Lease. Landlord may terminate Tenant's interest under the Lease, but no act by Landlord other than notice of termination from Landlord to Tenant shall terminate this Lease. The Lease shall terminate on the date specified in the notice of termination. Upon termination of this Lease,
Tenant will remain liable to Landlord for damages in an amount equal to the Rent and other sums that would have been owing by Tenant under this Lease for the balance of the Lease term, less the net proceeds, if any, of any reletting of the Premises by Landlord subsequent to the termination, after deducting all of Landlord's Reletting Expenses (as defined below). Landlord shall be entitled to either collect damages from Tenant monthly on the days on which rent or other amounts would have been payable under the
Lease, or alternatively, Landlord may accelerate Tenant's obligations under the Lease and recover from Tenant: (i) unpaid rent which had been earned at the time of termination; (ii) the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of rent loss that Tenant proves could reasonably have been avoided; (iii) the amount by which the unpaid rent for the balance of the term of the Lease after the time of award exceeds the amount of rent loss
that Tenant proves could reasonably be avoided (discounting such amount by the discount rate of the Federal Reserve Bank of San Francisco at the time of the award, plus 1%); and (iv) any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant's failure to perform its obligations under the Lease, or which in the ordinary course would be likely to result from the Event of Default, including without limitation Reletting Expenses described in Section 20(b) below.

 

 

 

(b) Re-Entry and Reletting. Landlord may continue this Lease in full force and effect, and without demand or notice, re-enter and take possession of the Premises or any part thereof, expel the Tenant from the Premises and anyone claiming through or under the Tenant, and remove the personal property of
either. Landlord may relet the Premises, or any part of them, in Landlord's or Tenant's name for the account of Tenant, for such period of time and at such other terms and conditions as Landlord, in its discretion, may determine. Landlord may collect and receive the rents for the Premises. To the fullest extent permitted by law, the proceeds of any reletting shall be applied: first, to pay Landlord all Reletting Expenses (defined below); second, to pay any indebtedness of Tenant to Landlord other than rent; third,
to the rent due and unpaid hereunder; and fourth, the residue, if any, shall be held by Landlord and applied in payment of other or future obligations of Tenant to Landlord as the same may become due and payable, and Tenant shall not be entitled to receive any portion of such revenue. Re-entry or taking possession of the Premises by Landlord under this Section shall not be construed as an election on Landlord's part to terminate this Lease, unless a notice of termination is given to Tenant. Landlord reserves
the right following any re-entry or reletting, or both, under this Section to exercise its right to terminate the Lease. Tenant will pay Landlord the Rent and other sums which would be payable under this Lease if repossession had not occurred, less the net proceeds, if any, after reletting the Premises and after deducting Landlord's Reletting Expenses. “Reletting Expenses” is defined to include all expenses incurred by Landlord in connection with reletting the Premises, including without limitation,
all repossession costs, brokerage commissions and costs for securing new tenants, attorneys' fees, remodeling and repair costs, costs for removing persons or property, costs for storing Tenant's property and equipment, and costs of tenant improvements and rent concessions granted by Landlord to any new Tenant, prorated over the life of the new lease.

(c) Waiver of Redemption Rights. Tenant, for itself, and on behalf of any and all persons claiming through or under Tenant, including creditors of all kinds, hereby waives and surrenders all rights and privileges which they may have under any present or future law, to redeem the Premises or to have a
continuance of this Lease for the Lease term, or any extension thereof.

(d) Nonpayment of Additional Rent. All costs which Tenant is obligated to pay to Landlord pursuant to this Lease shall in the event of nonpayment be treated as if they were payments of Rent, and Landlord shall have the same rights it has with respect to nonpayment of Rent.

(e) Failure to Remove Property. If Tenant fails to remove any of its property (other than any buildings) from the Premises at Landlord's request following an uncured Event of Default, Landlord may, at its option, remove and store the property at Tenant's expense and risk. If Tenant does not pay the storage
cost within ten (10) days of Landlord's request, Landlord may, at its option, have any or all of such property sold at public or private sale (and Landlord may become a purchaser at such sale), in such manner as Landlord deems proper, without notice to Tenant. Landlord shall apply the proceeds of such sale: (i) to the expense of such sale, including reasonable attorneys' fees actually incurred; (ii) to the payment of the costs or charges for storing such property; (iii) to the payment of any other sums of money
which may then be or thereafter become due Landlord from Tenant under any of the terms hereof; and (iv) the balance, if any, to Tenant. Nothing in this Section shall limit Landlord's right to sell Tenant's personal property as permitted by law or to foreclose Landlord's lien for unpaid rent.

 

 

 

21. MORTGAGE SUBORDINATION AND ATTORNMENT. This Lease shall automatically be subordinate to any mortgage or deed of trust created by Landlord which is now existing or hereafter placed upon the Premises including any advances, interest, modifications,
renewals, replacements or extensions (“Landlord's Mortgage”). Tenant shall attorn to the holder of any Landlord's Mortgage or any party acquiring the Premises at any sale or other proceeding under any Landlord's Mortgage provided the acquiring party assumes the obligations of Landlord under this Lease. Tenant shall promptly and in no event later than thirty (30) days after request execute, acknowledge and deliver documents which the holder of any Landlord's
Mortgage may reasonably require as further evidence of this subordination and attornment. Notwithstanding the foregoing, Tenant's obligations under this Section to subordinate in the future are conditioned on the holder of each Landlord's Mortgage and each party acquiring the Premises at any sale or other proceeding under any such Landlord's Mortgage not disturbing Tenant's occupancy and other rights under this Lease, so long as no uncured Event of Default by Tenant exists.

22. NON-WAIVER. Landlord's waiver of any breach of any provision contained in this Lease shall not be deemed to be a waiver of the same provision for subsequent acts of Tenant. The acceptance by Landlord of Rent or other amounts due by Tenant hereunder
shall not be deemed to be a waiver of any previous breach by Tenant.

23. HOLDOVER. If Tenant shall, without the written consent of Landlord, remain in possession of the Premises and fail to return them to Landlord after the expiration or termination of the term, the tenancy
shall be a holdover tenancy and shall be on a month-to-month basis, which may be terminated according to the laws of the State of New Jersey. During such tenancy, Tenant agrees to pay to Landlord 125% of the rate of rental last payable under this Lease, unless a different rate is agreed upon by Landlord. All other terms of the Lease shall remain in effect. Tenant acknowledges and agrees that this Section does not grant any right to Tenant to holdover, and that Tenant may also be liable to Landlord for any and
all damages or expenses which Landlord may have to incur as a result of Tenant's holdover.

24. NOTICES. All notices under this Lease shall be in writing and effective (i) when delivered in person or via overnight courier to the other party, (ii) three (3) days after being sent by registered or certified
mail to the other party at the address set forth in Section 1; or (iii) upon confirmed transmission by facsimile to the other party at the facsimile numbers set forth in Section 1. The addresses for notices and payment of rent set forth in Section 1 may be modified by either party only by written notice delivered in conformance with this Section.

25. ESTOPPEL CERTIFICATES. Tenant shall, from time to time, upon written request of Landlord, execute, acknowledge and deliver to Landlord or its designee a written statement specifying the following, subject
to any modifications necessary to make such statements true and complete: (i) the total rentable square footage of the Premises; (ii) the date the Lease term commenced and the date it expires; (iii) the amount of minimum monthly Rent and the date to which such Rent has been paid; (iv) that this Lease is in full force and effect and has not been assigned, modified, supplemented or amended in any way; (v) that this Lease represents the entire agreement between the parties; (vi) that all obligations under this Lease
to be performed by either party have been satisfied; (vii) that there are no existing claims, defenses or offsets which the Tenant has against the enforcement of this Lease by Landlord; (viii) the amount of Rent, if any, that Tenant paid in advance; (ix) the amount of security that Tenant deposited with Landlord; (x) if Tenant has sublet all or a portion of the Premises or assigned its interest in the Lease and to whom; (xi) if Tenant has any option to extend the Lease or option to purchase the Premises; and
(xii) such other factual matters concerning the Lease or the Premises as Landlord may reasonably request. Tenant acknowledges and agrees that any statement delivered pursuant to this Section may be relied upon by a prospective purchaser of Landlord's interest or assignee of any mortgage or new mortgagee of Landlord's interest in the Premises. If Tenant shall fail to respond within ten (10) days to Landlord's request for the statement required by this Section, Landlord may provide the statement and Tenant shall
be deemed to have admitted the accuracy of the information provided by Landlord.

 

 

 

26. TRANSFER OF LANDLORD'S INTEREST. This Lease shall be assignable by Landlord without the consent of Tenant. In the event of any transfer or transfers of Landlord's interest in the Premises, other than a
transfer for collateral purposes only, upon the assumption of this Lease by the transferee, Landlord shall be automatically relieved of obligations and liabilities accruing from and after the date of such transfer, including any liability for any retained security deposit or prepaid rent, for which the transferee shall be liable, and Tenant shall attorn to the transferee.

27. RIGHT TO PERFORM. If Tenant shall fail to timely pay any sum or perform any other act on its part to be performed hereunder, Landlord may make any such payment or perform any such other act on Tenant's
behalf. Tenant shall, within ten (10) days of demand, reimburse Landlord for its expenses incurred in making such payment or performance. Landlord shall (in addition to any other right or remedy of Landlord provided by law) have the same rights and remedies in the event of the nonpayment of sums due under this Section as in the case of default by Tenant in the payment of Rent.

28. QUIET ENJOYMENT. So long as Tenant pays the Rent and performs all of its obligations in this Lease, Tenant's possession of the Premises will not be disturbed by Landlord or anyone claiming by, through
or under Landlord.

29. MERGER. The voluntary or other surrender of this Lease by Tenant, or a mutual cancellation thereof, shall not work a merger and shall, at the option of Landlord, terminate all or any existing subtenancies
or may, at the option of Landlord, operate as an assignment to Landlord of any or all of such subtenancies.

30. GENERAL.

 

 

 

(a) Heirs and Assigns. This Lease shall apply to and be binding upon Landlord and Tenant and their respective heirs, executors, administrators, successors and assigns.

(b) Brokers' Fees. Tenant represents and warrants to Landlord that it has not engaged any broker, finder or other person who would be entitled to any commission or fees for the negotiation, execution or delivery of this Lease and shall indemnify and hold harmless Landlord against any loss, cost, liability
or expense incurred by Landlord as a result of any claim asserted by any such broker, finder or other person on the basis of any arrangements or agreements made or alleged to have been made by or on behalf of Tenant.

Landlord represents and warrants to Tenant that it has not engaged any broker, finder or other person who would be entitled to any commission or fees for the negotiation, execution or delivery of this Lease and shall indemnify and hold harmless Tenant against any loss, cost, liability or expense incurred by Tenant as a result of any claim asserted
by any such broker, finder or other person on the basis of any arrangements or agreements made or alleged to have been made by or on behalf of Landlord.

(c) Entire Agreement. This Lease contains all of the covenants and agreements between Landlord and Tenant relating to the Premises. No prior or contemporaneous agreements or understandings pertaining to the Lease shall be valid or of any force or effect and the covenants and agreements of this Lease shall
not be altered, modified or amended to except in writing signed by Landlord and Tenant.

(d) Severability. Any provision of this Lease which shall prove to be invalid, void or illegal shall in no way affect, impair or invalidate any other provision of this Lease.

(e) Force Majeure. Time periods for either party's performance under any provisions of this Lease (excluding payment of Rent) shall be extended for periods of time during which the party’s performance is prevented due acts of force majeure, including acts
of God (such as fire, flood, earthquake, storm, hurricane or other natural disaster),war, invasion, act of foreign enemies, hostilities (regardless of whether war is declared), civil war, rebellion, insurrection, military or usurped power or confiscation, terrorist activities, nationalization, government sanction, blockage, embargo, labor dispute, strike, lockout or interruption or failure of electricity or telephone service. If a party asserts force majeure as an excuse
for failure to perform the party’s obligation, then the nonperforming party must prove that it took reasonable steps to minimize the delay or damages caused by foreseeable events, that the party substantially fulfilled all non-excused obligations, and that the other party was timely notified of the likelihood or actual occurrence of an event described above in this clause (e).

(g) Memorandum of Lease. Neither this Lease nor any memorandum or “short form” thereof shall be recorded without Landlord’s prior consent.

(h) Submission of Lease Form Not an Offer. One party's submission of this Lease to the other for review shall not constitute an offer to lease the Premises. This Lease shall not become effective and binding upon Landlord and Tenant until it has been fully signed by both of them.

 

 

 

(i) No Light, Air or View Easement. Tenant has not been granted an easement or other right for light, air or view to or from the Premises. Any diminution or shutting off of light, air or view by any structure which may be erected on or adjacent to the Premises shall in no way effect this Lease or the
obligations of Tenant hereunder or impose any liability on Landlord.

(j) Authority of Parties. Each party signing this Lease represents and warrants to the other that it has the authority to enter into this Lease, that the execution and delivery of this Lease has been duly authorized, and that upon such execution and delivery, this Lease shall be binding upon and enforceable
against the party on signing.

(k) Time. “Day” as used herein means a calendar day and “business day” means any day on which commercial banks are generally open for business in the state where the Premises are situated. Any period of time which would otherwise end on a non-business day shall be extended to the
next following business day. Time is of the essence of this Lease.

31. EXHIBITS AND RIDERS. The following exhibits and riders are made a part of this Lease, and the terms thereof shall control over any inconsistent provision in the sections of this Lease:

Exhibit A:                       Tenant’s Work

32. AGENCY DISCLOSURE. At the signing of this Lease, neither the Landlord nor the Tenant is represented by any broker or agent.

 

[SIGNATURE PAGE FOLLOWS]

 

 

 

 

IN WITNESS WHEREOF, this Lease has been executed the date and year first above written.

 

25 James Avenue LLC, as LANDLORD

 

By________________________________________

   Name:

   Title:

 

[VK Acquisition[LLC][Corp.]], as TENANT

 

 

By________________________________________

   Name:                       Edward P. Hennessey

   Title:                         Chairman and Chief Executive Officer

 

 

 

EXHIBIT A

 

 

Tenant’s Work:

 

 

 

EXHIBIT B

FORM OF OWNERSHIP ESCROW AGREEMENT

OWNERSHIP ESCROW AGREEMENT

THIS OWNERSHIP ESCROW AGREEMENT (the “Agreement”) is made this 23rd day of June 2016, pursuant to the requirements of a certain Acquisition Agreement dated as of June 15, 2016 (the “Acquisition Agreement”
) by and among Gary Giordano, residing at 215 Squan Beach Drive, Mantoloking, New Jersey 08738 and Thomas Giordano, residing at 31 8th Street, North Arlington, New Jersey 07031 (including any of their respective Affiliates, the “Sellers”) and 25 Van Keuren LLC, a New Jersey limited liability company (“Van Keuren” or the “Applicant”,
and collectively with the Sellers, the “Giordano Parties”), and CleanTech Biofuels, Inc., a Missouri corporation (the “Parent”) and a to be formed wholly-owned subsidiary of the Parent (the “Buyer”). Collectively the above parties are sometimes referred to herein individually as a “Party”
and collectively as the “Parties”.

 

AND

 

CHIAIA & ASSOCIATES, LLC

whose current address is 277 Fairfield Avenue, Suite 120, Fairfield, NJ 07004

("the Firm" or the “Escrow Agent”).

Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Acquisition Agreement.

Background

WHEREAS, pursuant to the Acquisition Agreement, Buyer has acquired ninety-nine percent (99%) of the ownership interests of Van Keuren from the Sellers, and Sellers have retained a one percent (1%) ownership interest in Van Keuren;

WHEREAS, the Parties desire for the Permits (as defined in the Acquisition Agreement) to run with the land; and

WHEREAS, pursuant to the Acquisition Agreement, Buyer and the Sellers have agreed to deposit their respective ownership interests of Van Keuren into an escrow.

 NOW, THEREFORE, in consideration of the premises and payments set forth herein, the parties hereto, each intending to be legally bound hereby, agree as follows:

1.            Appointment of the Escrow Agent. The Parties hereby appoint the Escrow Agent to serve as escrow agent
under the terms of this Agreement, and the Escrow Agent hereby accepts such appointment. Wherever this Agreement provides for a notice or instructions to be given by the Parties, such notice shall be accepted by Escrow Agent if signed by an officer of each Party (i.e., such notice shall be accepted by Escrow Agent if signed by the Sellers and an officer of each of the Applicant and the Parent or the Buyer). Escrow Agent’s duties hereto are limited to those set forth in this Escrow Agreement. This Agreement
is the sole instrument setting forth the duties and responsibilities of the Escrow Agent.

 

 

 

2.            Escrow.

2.1 Escrow. Contemporaneously herewith, each of the Buyer and the Sellers have deposited and transferred their ownership interests, together with a proxy and share transfer certificate for Buyer’s 99% interest in Van Keuren to the “Chiaia & Associates, LLC, Attorney Trust Account. The
Escrow Agent hereby acknowledges receipt thereof. In addition, the Buyer shall deposit with the Escrow Agent a voting proxy for Buyer’s Ownership Interest. All such ownership interests and the Buyer’s voting proxy shall constitute the “Escrow Property”.

2.2 Non-Interest-Bearing Account. The Escrow Agent shall hold the Escrow Property to “John F. Chiaia, Esq., Attorney Trust Account”, a federally insured, non-interest-bearing IOLTA account until disbursed as provided herein.

3.            Disposition of Escrow Property. The Escrow Agent shall hold and disburse the Escrow Property as follows:

3.1 Mutual Instructions. At any time hereafter, the Parties may give Escrow Agent joint written instructions (signed by each Party or an authorized officer thereof) for disposition of the Escrow Property or any portions thereof. An Authorization Form is attached hereto.

3.2 Event of Default Under the Lease Agreement. Upon presentation of proof satisfactory to the Escrow Agent that a final, non-appealable judgement by a court of competent jurisdiction has been rendered against Buyer or Parent for defaulting under the Lease Agreement pursuant to its terms,
the Escrow Agent shall release the Escrow Property to the Sellers;provided, however, that the Sellers shall have the option, in their sole discretion, to request the release of only the voting proxy relating to the Buyer’s Ownership Interest, and the Sellers may thereafter exercise their rights with respect to the remaining Escrow Property.

3.3 No Effect on the Acquisition Agreement or the Lease Agreement. As between the Parties only, nothing in this Section 3 shall be deemed to modify the rights and obligations of the Parties under the Acquisition Agreement or the Lease Agreement. The Parties agree as between themselves
to follow the Acquisition Agreement and the Lease Agreement, as applicable, and valuations set forth therein, with respect to determination of the making of any claim herein, or any request for disbursement of the Escrow Property, and further agree that although the Escrow Agent shall have no responsibility for determining whether or not they have done so, any disagreement between the Parties as to whether such proper valuations have been followed shall be treated as a dispute for purposes of this Section 3 and
shall be subject to resolution in accordance with the terms of this Agreement. In addition, the Parties shall not encumber the Escrow Property or allow any lien to suffer to exist with respect thereto.

 

 

 

3.4 Agreement for Sole Benefit of Escrow Agent and the Parties. This Agreement and the rights and benefits created by it are for the sole and exclusive benefit of the Escrow Agent and the Parties and, without limiting the generality of the foregoing, this Agreement shall not be deemed
to be for the direct or indirect benefit of any third party.

3.5 No Liens. The Buyer and the Sellers shall not create, incur, assume or suffer to exist any lien or encumbrances upon any of the Escrow Property.

4.            Right to Interplead. The Escrow Agent shall provide written Claim Notice to all Parties forty-eight
(48) hours prior to the release of any Escrow Property. If, after delivery of such Claim Notice, the Escrow Agent receives a Disputed Claim Notice from the disputing Party, Escrow Agent may either (a) continue to hold the Escrow Property in accordance with Section 2 above, or (b) file an action or bill in interpleader, or similar action for such purpose, the cost thereof to be borne by the moving party and reimbursed, if applicable by whichever of the Parties is the losing Party, in a court of competent jurisdiction
as set forth herein, and pay the Escrow Property into said court, less escrow fees and costs, in which event, Escrow Agent’s duties, responsibilities and liabilities with respect to the Escrow Property and the proceeds therefrom and this Agreement shall terminate, without liability to Escrow Agent.

5.            Duties of the Escrow Agent.

5.1 Generally. The Escrow Agent is acting hereunder as escrow agent only and shall not be responsible or liable in any manner for the sufficiency, correctness, genuineness or validity of any document provided to the Escrow Agent except and only to the extent expressly provided in this
Agreement. The Escrow Agent shall have no responsibility to act except to dispose of the Escrow Property as provided in this Agreement. The Escrow Agent is authorized to act upon any document believed by it to be genuine and to be signed by the person purported to have signed it, and will incur no liability in so acting. Upon delivery or deposit of the Escrow Property in accordance with the terms of this Agreement (including a deposit of the Escrow Property in a court of competent jurisdiction), the Escrow Agent
shall be discharged from any liability or responsibility therefor and shall have no further obligations hereunder. The Escrow Agent may cease to serve at any time without incurring any liability hereunder.

5.2 Exculpation of Escrow Agent. The Parties, for themselves and any of their assigns or successors in interest, hereby waive any suit, claim, demand and cause of action of any kind which any or all of them may have or hereafter assert against
the Escrow Agent with respect to the execution or performance by the Escrow Agent of its duties under this Agreement, unless such suit, claim, demand or cause of action is based upon the willful misconduct of the Escrow Agent. If any Party asserts a claim against the Escrow Agent concerning the Escrow Property, then the Party asserting such claim shall indemnify and hold harmless the Escrow Agent for its costs (including attorneys’ fees and costs of suit) in connection therewith if the Escrow Agent successfully
defends such claim. The Parties agree that the Escrow Agent shall not be liable for any error of judgment or for any act done or omitted by it in good faith, or for anything which it may, in good faith, do or refrain from doing in connection with this Agreement.

 

 

5.3 Written Instructions. The Parties agree to sign and deliver such written instructions to the Escrow Agent as may be necessary to cause release of the Escrow Property pursuant to the terms of this Agreement or that the Escrow Agent may request to clarify or confirm the terms under
which the Escrow Agent is to hold and/or disburse the Escrow Property (or any portion thereof).

5.4 Accounting. The Escrow Agent shall under no circumstances be compelled to furnish a formal accounting for the Escrow Property;provided that the Escrow Agent shall be required to notify the Parties as to the distribution amounts or disbursement
details of the Escrow Property.

5.5 Inability of Designated Escrow Agent to Serve. In the event that the Escrow Agent designated herein is for any reason unable or unwilling to serve or to continue to serve as escrow agent, the parties shall choose a mutually agreeable new escrow agent. The new escrow agent shall have
all of the rights and perform all of the duties and obligations of the Escrow Agent set forth in this Agreement, provided that no person or entity shall serve as escrow agent unless he has executed a consent to abide by the terms of this Agreement applicable to the Escrow Agent and the Escrow Property. If the Parties fail to designate a new escrow agent within ten (10) business days after notice by the Escrow Agent of its resignation, the Escrow Agent shall be free to resign and to pick a substitute escrow agent
of its choice (in its sole discretion); provided, however, such substitute escrow agent shall be a commercial bank or trust company organized under the laws of the United States of America or any state thereof, or an attorney or law firm or a certified public accountant or public accounting firm, licensed to practice in the State of New Jersey.

5.6 Costs and Expenses. Escrow Agent shall act in such capacity without charging a fee. However, the Parent and the Buyer shall be responsible for all reasonable expenses, disbursements and advances incurred or made by Escrow Agent in connection with the performance of its duties under
this Agreement, except as expressly provided to the contrary in Sections 4 and 5.2 above.

5.7 Continued Representation. The Parties agree that neither the designation of Chiaia & Associates, LLC, as Escrow Agent nor its performance of its duties hereunder shall disqualify any attorney or the Firm, or any of its attorneys from representing the Parties, or any of its affiliates,
in connection with this Agreement, or any other matter. The Parties hereby waive any conflict of interest arising from such continued legal representation and acknowledge that they have been advised to consult with independent legal counsel in connection with this waiver.

 

 

 

6.            Miscellaneous.

6.1 Notices, Etc. All notices, requests, demands and other communication hereunder shall be in writing, shall be given simultaneously to all Parties hereunder and the Escrow Agent and shall be deemed to be given when given by any of the means provided in the Acquisition Agreement, the
terms of which are hereby incorporated herein by this reference. Notices to the Escrow Agent shall be delivered to the attention of John F. Chiaia, Esq., at Chiaia & Associates, LLC at the address stated above, email: chiaialaw@gmail.com.

6.2 Construction, Entire Agreement. The interpretation and construction of this Agreement and the conduct of the parties hereunder shall be governed by the laws of the State of New Jersey, without giving effect to principles of conflicts of law thereof. As between the Escrow Agent on
the one hand and the Parties on the other, this Escrow Agreement contains all the agreements between the parties hereto with respect to the matters referred to herein.

6.3 Amendment. Any modification or amendment of this Agreement shall be in writing and signed by each of the Parties and the Escrow Agent. Without limiting the generality of the foregoing, no modification or rescission of the terms of this Agreement and/or Escrow Agent’s responsibilities
hereunder shall be effective or binding upon the Escrow Agent unless and until consented to by Escrow Agent in writing.

6.4 Counterparts; Electronic Transmission. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument. An original signature transmitted by facsimile or other form
of electronic transmission, including but not limited to a .pdf file, shall be deemed an original for all purposes of this Agreement.

6.5 Parties Bound; No Third-Party Rights. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their successors and permitted assigns. The terms and provisions of this Agreement relating to the Escrow Property shall create no right in any person, firm
or corporation other than the Parties and the Escrow Agent, and their respective successors and permitted assigns, and no third party shall have the right to enforce or benefit from the terms hereof.

6.6 Counting Time. Should any date, on or before which the performance of any act (including the making of any payment) is required under the terms hereof, fall on a Saturday, Sunday, or a federal holiday, the date for performance shall be extended to and shall occur on the next succeeding
business day.

 

 

6.7 Severability of Clauses. Each clause or term of this Agreement is severable from the entire agreement, and if any clause or term is declared invalid, the remaining clauses or terms shall remain in effect.

6.8 No Advice from the Escrow Agent. The Escrow Agent shall not be called upon to advise any party on the benefit or detriment in taking or refraining from any action with respect to any funds escrowed under this Agreement.

6.9 No Waiver of Noncompliance. No failure of any party to this agreement to exercise any power or right granted under this agreement, or to insist upon strict compliance by any other party of any obligation under this agreement, and no custom or practice of any party with regard to the
terms of performance hereof, shall constitute a waiver of the rights of such party to demand full and exact compliance with the terms of this Agreement.

6.10 Titles to Paragraphs for Convenience Only. The titles to the paragraphs in this agreement are used solely for the convenience of the parties to this agreement and do not constitute part of this Agreement.

 

[Signature Page Follows]

 

 

 

IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and seals or caused these presents to be signed by their proper officers and caused their proper corporate seal to be hereto affixed, the day and year first above written.

 

GARY GIORDANO,

As Seller

By:__________________________________

 

THOMAS GIORDANO,

As Seller

By:__________________________________

 

25 VAN KEUREN, LLC

By:__________________________________

     Name: Gary Giordano

     Title:

CLEANTECH BIOFUELS, INC.

 

By:__________________________________

     Name:                    Edward P. Hennessey

     Title:                      Chief Executive Officer

ESCROW AGENT:

CHIAIA & Associates, LLC

By:__________________________________

     Name:                    John F. Chiaia, Esq.

     Title:                      Escrow Agent

 

 

 

OWNERSHIP ESCROW AUTHORIZATION FORM

DATE: ___________________

 

OWNER(S):         __________________________                                                                             
OWNERSHIP INTEREST: __________

ADDRESS:          __________________________

 

__________________________

__________________________

CONTACT:          __________________________                                                            
                  PHONE #:   ________________________

 

REASON FOR TRANSFER:

______________________________________________________________________________

______________________________________________________

 

 

SPECIAL INSTRUCTIONS: _____________________________________________________

 

______________________________________________________________________________

 

[Approvals and Signature Page follows]

 

 

OWNERSHIP ESCROW AUTHORIZATION FORM

DATE: ___________________

 

APPROVALS:                                                 SELLERS

 

 

_____________________________________

Gary Giordano

 

 

_____________________________________

Thomas Giordano

 

 

VAN KEUREN, LLC

 

 

By:__________________________________

     Name

     Title:

CLEANTECH BIOFUELS, INC.

 

 

By:__________________________________

     Name:

     Title:

 

 

 

 

 

 

EXHIBIT C

FORM OF PREFERENTIAL TIPPING FEE AGREEMENT

Preferential Tipping Fee Agreement

This Preferential Tipping Fee Agreement, dated as of June 23, 2016 (this “Preferential Tipping Fee Agreement”), is made by and among Gary Giordano, residing at 215 Squan Beach Drive, Mantoloking, NJ 08738 and Thomas Giordano, residing at 31 8th Street,
North Arlington, NJ 07031 (including any Affiliates, together the “Seller”), 25 Van Keuren LLC, a New Jersey limited liability corporation (“Van Keuren” or the “Applicant”), CleanTech Biofuels, Inc., a Delaware corporation (the “Parent”), and a wholl-owned subsidiary of the
Parent (the “Buyer”), pursuant to Section 2.2(b)(v) of the Acquisition Agreement dated as of June 15, 2016 by and among the Seller, Van Keuren, the Buyer and the Parent (the “Acquisition Agreement”). All capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the Acquisition Agreement.

The Buyer intends to develop, construct and operate a solid waste transfer station and material recovery facility on the Site. The Buyer will lease the Site from the Site Owner pursuant to the Lease Agreement. As part of the consideration for the transactions contemplated by the Acquisition Agreement, and of other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

Section 12.1                                DEFINITIONS.
THE FOLLOWING TERMS USED IN THIS AGREEMENT SHALL HAVE THE FOLLOWING MEANINGS FOR ALL PURPOSES OF THIS PREFERENTIAL TIPPING FEE AGREEMENT:

“Preferential Tipping Fee” shall mean the Weighted Average Tipping Fee minus $5.00.

 

“Weighted Average Tipping Fee” shall mean, for any calendar year, the result of the sum of TF multiplied by W for each price charged by the Buyer at the TS/MRF, where:

TF = the tipping fee charged to a customer.

W = with respect to the TF charged to any such customer, the amount in tons of garbage dumped at the TS/MRF expressed as a percentage of the total amount of garbage dumped at the TS/MRF in any particular calendar year.

 

For purposes of this calculation, the Buyer may aggregate the total amount of garbage tonnage accepted at any particular price point.

 

Section 12.2                                Timing. The Weighted Average Tipping Fee and the Preferential
Tipping Fee shall be calculated once annually using data from the prior calendar year. The Buyer shall complete such calculations on or before March 1st of each year.

 

 

 

Section 12.3                                Agreement. (a) Once the TS/MRF is fully operational, the Buyer
will accept up to two hundred fifty (250) tons per day of municipal solid waste from one or more entities controlled by the Seller. The Buyer will charge the Seller (or the entity owned or controlled by the Seller), and the Seller shall pay, the Preferential Tipping Fee for the right to dump such waste. If the Buyer is not operating the TS/MRF for any reason, this Agreement shall be null and void, and have no force or effect.

Section 12.4                                Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New Jersey, without regard to principles of conflicts of laws.

 

[Signature Page Follows]

 

 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Preferential Tipping Fee Agreement as of the date first above written.

 

SELLERS:

GARY GIORDANO

 

____________________________________________

 

 

 

 

THOMAS GIORDANO

 

____________________________________________  

 

 

 

 

APPLICANT:

25 VAN KEUREN LLC

 

By: ________________________________________

Name:

Title:

 

 

BUYER:

CLEANTECH BIOFUELS, INC.

 

By:________________________________ 

Name: Edward P. Hennessey

Title: Chairman and Chief Executive

                 Officer

 

 

 

 

 

 

 

 

EXHIBIT D

FORM OF LEASE OPTION AGREEMENT

LEASE OPTION AGREEMENT

 

This LEASE OPTION AGREEMENT (this “Agreement”), dated as of this 23rd day of June, 2016, is made by and among 160 James Avenue, LLC, a New Jersey limited liability company (the “Landlord”),
CleanTech Biofuels, Inc., a Delaware corporation (the “Parent”), and a wholly-owned subsidiary of the Parent (the “Buyer”, and together with the Parent, “CleanTech”). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Acquisition Agreement defined below.

RECITALS:

WHEREAS, pursuant to the Acquisition Agreement, CleanTech acquired ninety-nine percent (99%) of the ownership interests of Van Keuren;

WHEREAS, the Landlord owns a parcel of real property located at 25 James Avenue in the City of Jersey City, in the State of New Jersey (the “Site”);

WHEREAS, Van Keuren has received a solid waste facility plan inclusion from the New Jersey Meadowlands Commission (the “NJMC”) to operate a transfer station and material recovery facility on the Site (the “TS/MRF”);

WHEREAS, Van Keuren intends to seek the necessary approvals from the New Jersey Department of Environmental Protection (the “NJ DEP”) to operate the TS/MRF; and

WHEREAS, the CleanTech, through Van Keuren or another entity of its choosing as sub-lessor, intends to lease the Site from the following receipt of the Threshold Permit and Approval (as defined below) from the NJ DEP.

NOW THEREFORE, in consideration of the mutual covenants contained herein and of other good and valuable consideration pursuant to this Agreement and the Acquisition Agreement, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:

DEFINITIONS

Definitions. The terms defined in this Section 1.1, whenever used herein, shall have the following meanings for all purposes of this Agreement:

“Acquisition Agreement” shall mean the Acquisition Agreement, dated the date hereof, by and among Gary Giordano, residing 215 Squan Beach Drive, Mantoloking, NJ 08738 and Thomas Giordano, residing at 31 8th Street, North Arlington, NJ 07031, including any of their respective affiliates,
as the Sellers, 25 Van Keuren LLC, a New Jersey limited liability company, and CleanTech Biofuels, Inc., a Missouri corporation, as the Parent, and the Buyer.

 

 

 

“Environmental Report” shall mean a report prepared for, and at the sole expense of, CleanTech by a firm qualified to assess the environmental condition of the Site.

“Lease Option” shall have the meaning set forth in Section 2.1.

“Option Date” shall have the meaning set forth in Section 2.1.

“Threshold Permit and Approval” shall mean a New Jersey Solid Waste Facility Permit for the Site issued by the NJ DEP.

All other capitalized terms used but not otherwise defined in this Agreement shall have the meanings ascribed to such terms in the Acquisition Agreement.

OPTION TO LEASE

Option to Lease. The Landlord hereby grants CleanTech (including any affiliate of CleanTech) the right, but not the obligation (the “Lease Option”), to enter into the Lease Agreement on or before the date that is the 30th day
following the date that the Threshold Permit and Approval is issued by the NJ DEP (the “Option Date”).

Environmental Report. Landlord hereby consents to allow CleanTech to conduct an environmental review of the Site. Landlord shall provide access to the Site to CleanTech and any firm or firms engaged by CleanTech, at reasonable times and upon reasonable notice, so that such firms can prepare an Environmental
Report for CleanTech. Such access shall be allowed from the date hereof and shall terminate on the Option Date.

Exercise of the Lease Option. To validly exercise the Lease Option, CleanTech shall give written notice to the Landlord on or before 5:00 p.m. (Eastern Time) on the Option stating that CleanTech is exercising the Lease Option. Such written notice shall be sent to the Landlord in the manner and form
provided in Section 3.4.

MISCELLANEOUS

Waivers and Amendments. This Agreement may be amended, and the terms hereof may be waived, only by a written instrument signed by each of the parties or, in the case of a waiver, by the party or parties waiving compliance. No delay on the part of any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any party of any right, power or privilege, nor any single or partial exercise of any such right, power or privilege preclude any further exercise thereof or the exercise of any other such right, power or privilege.

Entire Agreement; Assignment. This Agreement (which term shall be deemed to include the exhibits and schedules hereto) constitute the entire agreement among the parties with respect to the subject matter hereof and supersedes all other prior agreements and understandings, both written and oral, among
the parties or any of them with respect to the subject matter hereof. This Agreement may not be assigned by any party hereto without the consent of every other party.

 

 

 

Severability. If any term or other provision of this Agreement is determined by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced under any rule of applicable law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the transactions contemplated herein are not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated herein are consummated
as originally contemplated to the fullest extent possible.

Notices.

All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given: (1) when delivered by hand (with written confirmation of receipt); (2) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (3) on the date sent
by facsimile or e-mail of a document in .pdf or similar format (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the recipient; or (4) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid.

All notices, requests and other communications to any party hereunder shall be in writing (including facsimile or similar writing) and shall be given:

if to CleanTech, to:

CleanTech Biofuels, Inc.

7386 Pershing Avenue

St. Louis, MO 63130

Attention: Edward P. Hennessey, Chairman and CEO

Fax: (314) 802-8675

E-mail: ed.hennessey@cleantechbiofuels.net

 

if to Sellers, to:

160 James Avenue LLC

3 New York Avenue

Jersey City, NJ 02307

Attention: Gary Giordano

Fax: (201) 420-9215

E-mail: ggiordano@galaxyrecycling.com

 

 

 

with a copy to (which shall not constitute notice):

Chiaia & Associates, LLC

277 Fairfield Avenue, Suite 120

Fairfield, NJ 07004

Attention: John F. Chiaia

Fax: 

 (201) 299-2540

E-mail: chiaialaw@gmail.com

 

Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey, without regard to principles of conflicts of laws.

Publicity. The Landlord acknowledges that CleanTech will make one or more public announcements relating to the transactions contemplated by this Agreement. Except as otherwise may be required by applicable law, for so long as this Agreement is in effect, Landlord shall not issue or cause the publication
of any press release or other public announcement with respect to the transactions contemplated by this Agreement without the express prior written approval of CleanTech, which consent shall not be unreasonably withheld or delayed.

Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement. A facsimile, telecopy, .pdf or similar format or other reproduction of this Agreement may be executed by one or more
parties hereto and delivered by such party by facsimile or any similar electronic transmission device or technology pursuant to which the signature of or on behalf of such party can be seen. Such execution and delivery shall be considered valid, binding and effective for all purposes of this Agreement. At the request of any party, all parties hereto agree to execute and deliver an original of this Agreement as well as any facsimile, telecopy or other electronic reproduction hereof.

Expenses. Whether or not the transactions contemplated by this Agreement are consummated, and except as otherwise expressly set forth herein, all legal and other costs and expenses incurred in connection with the transactions contemplated by this Agreement shall be paid by the party incurring such expenses;provided, however,
that in the event of a dispute between the parties in connection with this Agreement and the transactions contemplated hereby, each of the parties hereto hereby agrees that the prevailing party shall be entitled to reimbursement by the other party of reasonable legal fees and expenses incurred in connection with any action or proceeding.

Affiliate Liability. Neither any direct or indirect holder of equity interests in Sellers, nor any present, past or future director, officer, employee, agent, manager, member, partner or Affiliate of Sellers or of any such holder, shall have any liability or obligation of any nature whatsoever under
or in connection with this Agreement or the transaction contemplated by this Agreement, and CleanTech hereby waives and releases all claims of such liability and/or obligation.

 

 

 

Parties in Interest. This Agreement shall be binding upon and inure solely to the benefit of each party hereto and nothing in this Agreement, express or implied, is intended by or shall confer upon any other Person any rights, benefits or remedies of any nature whatsoever under or by reason of this
Agreement.

Interpretation.

No reference in this Agreement to “commercially reasonable efforts” shall require a Person obligated to use such efforts to incur out-of-pocket expenses or indebtedness.

Each of the parties acknowledges that it has been represented by independent counsel of its choice throughout all negotiations that have preceded the execution of this Agreement and that it has executed the same with consent and upon the advice of said independent counsel. Each party and its counsel cooperated in the drafting and preparation of this
Agreement, and any and all drafts relating thereto shall be deemed the work product of the parties and may not be construed against any party by reason of its preparation. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against any party that drafted the Agreement is of no application and is hereby expressly waived.

 

 

[Signature Page Follows]

 

 

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

SELLERS:

GARY GIORDANO

 

By:_________________________________________

 

 

THOMAS GIORDANO

 

By:_________________________________________

 

 

LANDLORD:

160 JAMES AVENUE, LLC

 

By:_________________________________________

      Name:

      Title:

 

 

PARENT AND BUYER:

CLEANTECH BIOFUELS, INC.

 

By:_________________________________________

      Name: Edward P. Hennessey

      Title: Chairman and Chief Executive Officeruqm_Ex10_1

		
			Exhibit 10.1
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			STOCK ISSUANCE AND PURCHASE AGREEMENT
		

		
			between
		

		
			UQM TECHNOLOGIES, INC.
		

		
			and
		

		
			AMERICAN COMPASS, INC.
		

		
			dated as of
		

		
			June 28, 2016
		

		
			

		 

 

TABLE OF CONTENTS
		

			
					
						 

					
					
						 

				
	
					
						Article I          DEFINITIONS

					
2 
				
	
					
						Article II         PURCHASE AND SALE

					
10 
				
	
					
						Section 2.01.   Purchase and Sale

					
10 
				
	
					
						Section 2.02.   Purchase Price

					
10 
				
	
					
						Section 2.03.   Transactions to be Effected at the Closing

					
10 
				
	
					
						Section 2.04.   Closing

					
11 
				
	
					
						Article III        REPRESENTATIONS AND WARRANTIES OF THE COMPANY

					
11 
				
	
					
						Section 3.01.   Organization and Authority of the Company

					
11 
				
	
					
						Section 3.02.   Capitalization

					
12 
				
	
					
						Section 3.03.   Subsidiaries

					
13 
				
	
					
						Section 3.04.   No Conflicts; Consents

					
14 
				
	
					
						Section 3.05.   SEC Filings; Financial Statements; No Undisclosed Liabilities

					
14 
				
	
					
						Section 3.06.   Absence of Certain Changes or Events

					
15 
				
	
					
						Section 3.07.   Intellectual Property

					
17 
				
	
					
						Section 3.08.   Real Estate and Personal Property

					
18 
				
	
					
						Section 3.09.   Legal Proceedings; Governmental Orders

					
19 
				
	
					
						Section 3.10.   Compliance With Laws; Permits

					
19 
				
	
					
						Section 3.11.   Environmental Matters

					
19 
				
	
					
						Section 3.12.   Employee Benefit Matters

					
12 
				
	
					
						Section 3.13.   Employment Matters

					
22 
				
	
					
						Section 3.14.   Taxes

					
22 
				
	
					
						Section 3.15.   Material Contracts

					
24 
				
	
					
						Section 3.16.   Insurance

					
24 
				
	
					
						Section 3.17.   Proxy Statement

					
25 
				
	
					
						Section 3.18.   Fairness Opinion

					
25 
				
	
					
						Section 3.19.   Brokers

					
25 
				
	
					
						Section 3.20.   Trade Law Compliance

					
25 
				
	
					
						Article IV        REPRESENTATIONS AND WARRANTIES OF BUYER

					
26 
				
	
					
						Section 4.01.   Organization and Authority of Buyer 

					
26 
				
	
					
						Section 4.02.   No Conflicts; Consents

					
27 
				
	
					
						Section 4.03.   Sufficiency of Funds

					
27 
				

		
			
		

		

		 

		

			ii

		

 

	
					
						Section 4.04.   Legal Proceedings

					
27 
				
	
					
						Section 4.05.   Investment Purpose

					
28 
				
	
					
						Section 4.06.   Independent Investigation

					
28 
				
	
					
						Section 4.07.   Brokers

					
28 
				
	
					
						Article V         COVENANTS

					
28 
				
	
					
						Section 5.01.   Conduct of Business Prior to the Closing

					
28 
				
	
					
						Section 5.02.   No Solicitation

					
29 
				
	
					
						Section 5.03.   Company Shareholder Meeting; Preparation of Proxy Materials

					
31 
				
	
					
						Section 5.04.   Deposit

					
32 
				
	
					
						Section 5.05.   Access to Information

					
32 
				
	
					
						Section 5.06.   Confidentiality

					
33 
				
	
					
						Section 5.07.   Post-Closing Board Composition Matters

					
33 
				
	
					
						Section 5.08.   Post-Closing Board Corporate Governance Matters

					
33 
				
	
					
						Section 5.09.   [Intentionally Omitted]

					
34 
				
	
					
						Section 5.10.   Management

					
34 
				
	
					
						Section 5.11.   Director and Officer Indemnification and Insurance

					
34 
				
	
					
						Section 5.12.   Operations Following Closing

					
35 
				
	
					
						Section 5.13.   Governmental Approvals and Other Third-party Consents

					
35 
				
	
					
						Section 5.14.   Reasonable Efforts to Satisfy Closing Conditions

					
36 
				
	
					
						Section 5.15.   Supplement to Disclosure Schedule

					
37 
				
	
					
						Section 5.16.   Public Announcements

					
37 
				
	
					
						Section 5.17.   Further Assurances

					
37 
				
	
					
						Article VI        CONDITIONS TO CLOSING

					
37 
				
	
					
						Section 6.01.   Conditions to Obligations of All Parties

					
37 
				
	
					
						Section 6.02.   Conditions to Obligations of Buyer

					
38 
				
	
					
						Section 6.03.   Conditions to Obligations of the Company

					
39 
				
	
					
						Article VII       TERMINATION

					
40 
				
	
					
						Section 7.01.   Termination By Mutual Consent

					
40 
				
	
					
						Section 7.02.   Termination By Either Buyer or the Company

					
40 
				
	
					
						Section 7.03.   Termination By Buyer

					
41 
				
	
					
						Section 7.04.   Termination by the Company

					
42 
				
	
					
						Section 7.05.   Notice of Termination; Effect of Termination

					
42 
				
	
					
						Section 7.06.   Treatment of Deposit Following Termination

					
43 
				

		
			
		

		

		 

		

			iii

		

 

	
					
						Article VIII     MISCELLANEOUS

					
45 
				
	
					
						Section 8.01.    Expenses

					
45 
				
	
					
						Section 8.02.    Notices

					
45 
				
	
					
						Section 8.03.    Interpretation

					
45 
				
	
					
						Section 8.04.    Headings

					
45 
				
	
					
						Section 8.05.    Severability

					
45 
				
	
					
						Section 8.06.    Entire Agreement

					
46 
				
	
					
						Section 8.07.    Successors and Assigns

					
46 
				
	
					
						Section 8.08.    No Third-party Beneficiaries

					
46 
				
	
					
						Section 8.09.    Amendment

					
46 
				
	
					
						Section 8.10.    Extension; Waiver

					
46 
				
	
					
						Section 8.11.    Governing Law; Submission to Jurisdiction; Waiver of Jury Trial

					
47 
				
	
					
						Section 8.12.    Specific Performance

					
47 
				
	
					
						Section 8.13.    Counterparts

					
47 
				

		
			 
		

		
			 
		

		
			

		 

		

			iv

		

 

STOCK ISSUANCE AND PURCHASE AGREEMENT
		

		
			This Stock Issuance and Purchase Agreement (this “Agreement”), dated as of June 28, 2016, is entered into between UQM Technologies, Inc., a Colorado corporation (the “Company”), and American Compass, Inc., a California corporation (“Buyer”).
		

		
			RECITALS
		

			
	
			
				 A.
			The Company develops, manufactures and sells electric motors and power electronic controllers for the bus and automobile markets;

			
	
			
				 B.
			Buyer is in the business of manufacturing and selling electric buses to the Chinese domestic market and desires to purchase electric motors and controllers and related systems from the Company for use in its buses, and is a 100% owned subsidiary of Hybrid Kinetic Group, Limited, a Bermuda company (“Parent”);

			
	
			
				 C.
			Buyer desires to purchase 66,500,000 newly issued shares (the “Shares”) of the Company’s common stock, par value $0.01 per share (“Common Stock”). Upon issuance of the Shares, Buyer will own approximately 54%, on a fully diluted basis, of the total outstanding shares of Common Stock of the Company;

			
	
			
				 D.
			The Company wishes to issue and sell to Buyer, and Buyer wishes to purchase from the Company, the Shares, subject to the terms and conditions set forth herein;

			
	
			
				 E.
			The Company is subject to the public reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), with the shares of Common Stock listed for trading on the NYSE MKT LLC (“NYSE MKT”);

			
	
			
				 F.
			In order for the Shares to be issued, (i) the Company’s shareholders holding two thirds of the outstanding shares of Common Stock must approve pursuant to the Colorado Business Corporation Act, as amended (“CBCA”), an amendment to the Company’s articles of incorporation in the form attached hereto as Exhibit C (the “Amended and Restated Articles of Incorporation”) to increase the authorized number of shares of Common Stock by 100,000,000 shares which will be an amount sufficient to permit the issuance of the Shares and amend other provisions thereof, and (ii) pursuant to the rules of NYSE MKT, the change of control of the Company that will result from Buyer’s purchase of the Shares must be approved by holders of a majority of the shares of Common Stock represented at the Company Shareholder Meeting (collectively, the “Company Shareholder Approval”).

			
	
			
				 G.
			In order to induce Buyer to enter into this Agreement, concurrently with the execution of this Agreement, the Company, Buyer and the Escrow Agent (as hereinafter defined) have entered into that certain Escrow Agreement dated June 17, 2016 (the “Escrow Agreement”) attached hereto as Exhibit B, whereby Buyer has deposited in escrow an earnest money deposit toward purchase of the Shares pursuant to this Agreement.

		 

		

			1

		

 

			
	
			
				 H.
			Pursuant to the terms of this Agreement and the Escrow Agreement, Buyer has deposited an amount equal to $3,000,000 (the “Deposit”) to an account to be maintained pursuant to the Escrow Agreement (the “Escrow Account”), which amount will be either applied to the purchase price of the Shares at the Closing or, upon certain conditions, returned to Buyer or converted into Common Stock, in either case pursuant to the terms and conditions of the Escrow Agreement and this Agreement.

			
	
			
				 A.
			The Board of Directors of the Company (the “Company Board”) has determined (1) that it is in the best interest of the Company and its shareholders to issue and sell the Shares to Buyer pursuant to the terms and conditions of this Agreement (collectively, the “Transaction”) and (2) subject to the terms and conditions of this Agreement, to recommend the Transaction to the Company’s shareholders for the Company Shareholder Approval.

		
			NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
		

			
	
			
				Article I
			

DEFINITIONS

		
			The following terms have the meanings specified or referred to in this Article I:
		

		
			“Affiliate” of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. The term “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
		

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

		
			“Amended and Restated Articles of Incorporation” has the meaning set forth in the recitals.
		

		
			“Benefit Plan” has the meaning set forth in Section 3.12(a).
		

		
			“Business Day” means any day except Saturday, Sunday or any other day on which commercial banks located in New York City or Hong Kong are authorized or required by Law to be closed for business.
		

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

		
			“Buyer Confidentiality Agreement” has the meaning set forth in Section 5.06.
		

		
			“Buyer Nominees” has the meaning set forth in the definition of Post-Closing Board Composition.
		

		
			

		 

		

			2

		

 

“Buyer Approval” means all consents, permissions, authorizations and approval (including the approval from the shareholders of Parent at its general meeting (the “Parent Shareholder Approval”), the Hong Kong Stock Exchange and/or under the SEHK Listing Rules necessary for the compliance with the applicable laws, rules and regulations and giving effect to the transactions and arrangements contemplated under the Agreement.
		

		
			“Bylaw Amendment” has the meaning set forth in Section 6.02(i).  
		

		
			“CBCA” has the meaning set forth in the recitals.
		

		
			“CFIUS” means the Committee on Foreign Investment in the United States.
		

		
			“Closing” has the meaning set forth in Section 2.04.
		

		
			“Closing Date” has the meaning set forth in Section 2.04.
		

		
			“Closing Payment” has the meaning set forth in Section 2.03(a)(i).
		

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

		
			“Common Stock” has the meaning set forth in the recitals.
		

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

		
			“Company Acquisition Agreement” has the meaning set forth in Section 5.02(a).
		

		
			“Company Adverse Recommendation Change” has the meaning set forth in Section 5.02(a).
		

		
			“Company Balance Sheet” has the meaning set forth in Section 3.05(c).
		

		
			“Company Board” has the meaning set forth in the recitals.
		

		
			“Company Board Recommendation” has the meaning set forth in Section 3.01(b).
		

		
			“Company Intellectual Property” has the meaning set forth in Section 3.07(a).
		

		
			“Company Material Contract” means any “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K of the Securities Act) to which the Company is a party and which is currently in effect, whether or not filed by the Company with the SEC.
		

		
			“Company Proxy Statement” has the meaning set forth in Section 3.17.
		

		
			“Company SEC Documents” has the meaning set forth in Section 3.05(a).
		

		
			“Company Shareholder Approval” has the meaning set forth in the recitals.
		

		
			

		 

		

			3

		

 

 
		

		
			“Company Shareholder Meeting” means the meeting of the shareholders of the Company to be held to consider the adoption of this Agreement and the transactions contemplated hereunder, to amend the Company’s Articles of Incorporation (including, among other things, to increase the number of authorized shares of Common Stock) and to approve the issuance of the Shares pursuant to the rules of the NYSE MKT.
		

		
			“Company Subsidiary” means UQM Properties, Inc., a Colorado corporation.
		

		
			“Contract” means any contract, agreement, lease, loan, obligation, commitment, arrangement, understanding, instrument, whether oral or written.
		

		
			“Conversion Shares” has the meaning set forth in Section 7.06(a).
		

		
			“Customs” is defined in the definition of “Customs & International Trade Laws”. 
		

		
			“Customs & International Trade Laws” means any U.S. Law concerning the importation of merchandise, the export or re-export of products (including goods, software, technology and services), the terms and conduct of international transactions, and making or receiving international payments, including but not limited to the Tariff Act of 1930 as amended and other laws and programs administered or enforced by the U.S. Customs and Border Protection (“Customs”), the U.S. Immigration and Customs Enforcement, and their predecessor agencies, the Export Administration Act of 1979 as amended, the Export Administration Regulations, the International Emergency Economic Powers Act as amended, the Arms Export Control Act, the International Traffic in Arms Regulations, any other export controls administered by an agency of the United States Government,  Executive Orders of the President of the United States regarding embargoes and restrictions on transactions with designated entities (including countries, terrorists, organizations and individuals), the embargoes and restrictions administered by the United States Office of Foreign Assets Control, the Money Laundering Control Act of 1986 as amended, requirements for the marking of imported merchandise, prohibitions or restrictions on the importation of merchandise made with the use of slave or child labor, the Foreign Corrupt Practices Act of 1977 as amended (“FCPA”) and other applicable anticorruption Laws, the anti-boycott regulations administered by the United States Department of Commerce, the anti-boycott regulations administered by the United States Department of the Treasury, legislation and regulations of the United States and other countries implementing the North American Free Trade Agreement (“NAFTA”) and other free trade agreements to which the United States is a party, antidumping and countervailing duty laws and regulations, and laws and regulations adopted by the governments or agencies of other countries concerning the ability of U.S. Persons to conduct business in those countries, restrictions by other countries on holding foreign currency or repatriating funds, or otherwise relating to the same subject matter as the United States statutes and regulations described above.
		

		
			“Deposit” has the meaning set forth in the recitals.
		

		
			

		 

		

			4

		

 

 
		

		
			“Disclosure Schedule” means the Disclosure Schedule delivered by the Company and Buyer concurrently with the execution and delivery of this Agreement.
		

		
			“Dollars or $” means the lawful currency of the United States.
		

		
			“Employees” means those Persons employed by the Company immediately prior to the Closing.
		

		
			“Employee Ageements” means an agreement to be executed by Employees covering restrictive covenants (in some cases), trade secrets, confidential information of the Company, work for hire and other matters, in form and substance acceptable to the Company and Buyer.
		

		
			“Encumbrance” means any lien, pledge, mortgage, deed of trust, security interest, charge, claim, easement, encroachment, hypothecation, assignment, preference or other similar encumbrance.
		

		
			“End Date” has the meaning set forth in Section 7.02(a).
		

		
			“Environmental Law” means any applicable Law, and any Governmental Order, Environmental Permit or binding agreement with any Governmental Authority: (a) relating to pollution (or the cleanup thereof) or the protection of human health, safety, welfare, or the environment (including ambient air, soil, surface water or groundwater, or subsurface strata); or (b) concerning the presence of, exposure to, or the management, manufacture, use, containment, storage, recycling, reclamation, reuse, treatment, generation, discharge, transportation, processing, production, disposal or remediation of any Hazardous Materials. The term “Environmental Law” includes, without limitation, the following (including their implementing regulations and any state analogues): the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §§ 9601 et seq. (“CERCLA”); the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976, as amended by the Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §§ 6901 et seq.; the Federal Water Pollution Control Act of 1972, as amended by the Clean Water Act of 1977, 33 U.S.C. §§ 1251 et seq.; the Toxic Substances Control Act of 1976, as amended, 15 U.S.C. §§ 2601 et seq.; the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. §§ 11001 et seq.; the Clean Air Act of 1966, as amended by the Clean Air Act Amendments of 1990, 42 U.S.C. §§ 7401 et seq.; and the Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. §§ 651 et seq.
		

		
			“Environmental Permit” means any Permit, letter, clearance, consent, waiver, closure, exemption, decision or other action required under or issued, granted, given, authorized by or made pursuant to Environmental Law.
		

		
			“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder.
		

		
			

		 

		

			5

		

 

 
		

		
			“ERISA Affiliate” means any corporation or trade or business (whether or not incorporated) under common control or treated as a single employer with Seller within the meaning of Section 414(b), 414(c), 414(m) or 414(o) of the Code.
		

		
			“Escrow Account” has the meaning set forth in the Recitals hereto.
		

		
			“Escrow Agent” means U.S. Bank National Association, or any Person who becomes successor thereto in accordance with the Escrow Agreement.
		

		
			“Escrow Agreement” has the meaning set forth in the Recitals hereto.
		

		
			“Exchange Act” has the meaning set forth in the recitals.
		

		
			“FCPA” is defined in the definition of “Customs & International Trade Laws”. 
		

		
			“Financial Statements” has the meaning set forth in Section 3.05(e).
		

		
			“GAAP” means United States generally accepted accounting principles in effect from time to time.
		

		
			“Governmental Authority” means any federal, state, local or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authority have the force of Law), or any arbitrator, court or tribunal of competent jurisdiction.
		

		
			“Governmental Order” means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority.
		

		
			“Hazardous Materials” means any materials, chemical, compound, mixture, hazardous substance, hazardous waste, pollutant or contaminant defined, listed, classified or regulated under any Environmental Law.
		

		
			“Hong Kong Stock Exchange” means The Stock Exchange of Hong Kong Limited.
		

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

		
			“Intellectual Property” means any and all of the following in any jurisdiction throughout the world: all patents, industrial design rights, trademarks, service marks, trade names, trade dress, copyrights, mask works, inventions, technology, know-how, formulae, trade secrets, confidential and proprietary information, computer software programs, domain names, and other intellectual property, and all registrations and applications for registration of any of the foregoing.
		

		
			

		 

		

			6

		

 

“Intellectual Property Rights” has the meaning set forth in Section 3.07(c).
		

		
			“Knowledge of the Company” or “the Company’s Knowledge” or any other similar knowledge qualification, means the actual knowledge of Joseph Mitchell, David Rosenthal, Josh Ley or Adrian Schaffer after reasonable inquiry.
		

		
			“Law” means any statute, law, ordinance, regulation, rule, code, order, constitution, treaty, common law, judgment, decree, other requirement or rule of law of any Governmental Authority.
		

		
			“Material Adverse Effect” means any event, occurrence, fact, condition or change (other than as contemplated by Section 3.06(b) of the Disclosure Schedule) that is materially adverse to (a) the business, results of operations, financial condition, assets and liabilities, or prospects of the Company, or (b) the ability of the Company to consummate the transactions contemplated hereby; provided, however, that “Material Adverse Effect” shall not include any event, occurrence, fact, condition or change, directly or indirectly, arising out of or attributable to: (i) general economic or political conditions; (ii) conditions generally affecting the industries in which the Company operates (provided that such conditions do not affect the Company to a materially greater extent than other Persons in such industry); (iii) any changes in financial, banking or securities markets in general, including any disruption thereof and any decline in the price of any security or any market index or any change in prevailing interest rates; (iv) acts of war (whether or not declared), armed hostilities or terrorism, or the escalation or worsening thereof; (v) any action required or permitted by this Agreement or any action taken (or omitted to be taken) with the written consent of or at the written request of Buyer; (vi) any changes in applicable Laws or accounting rules (including GAAP); (vii) the announcement, pendency or completion of the transactions contemplated by this Agreement, including losses or threatened losses of employees, customers, suppliers, distributors or others having relationships with the Company; (viii) any natural or man-made disaster or acts of God; or (ix) any failure by the Company to meet any internal or published projections, forecasts or revenue or earnings predictions (provided that the underlying causes of such failures (subject to the other provisions of this definition) shall not be excluded).
		

		
			“NAFTA” is defined in the definition of “Customs & International Trade Laws”. 
		

		
			“Notice Period” has the meaning set forth in Section 5.02(d).
		

		
			“NYSE MKT” has the meaning set forth in the recitals.
		

		
			“Parent” has the meaning set forth in the recitals. 
		

		
			“Permits” means all permits, licenses, franchises, approvals, authorizations, and consents required to be obtained from Governmental Authorities.
		

		
			
		

		
			

		 

		

			7

		

 

“Person” means an individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated organization, trust, association or other entity.
		

		
			“Post-Closing Board” means the board of directors of the Company immediately after the Closing.
		

		
			“Post-Closing Board Composition” means the following, which shall become effective only upon the Closing, (i) acceptance of the resignation of one of the non-employee directors on the Company Board, (ii) a resolution to increase the size of the Post-Closing Board to nine members, (iii) the election of five members (the “Buyer Nominees”) to the Post-Closing Board designated by Buyer in writing to the Company at least 10 Business Days prior to the date the Company has notified Buyer that it intends to file with the SEC the Company Proxy Statement in definitive form, (iv) the qualification of the remaining members of the Post-Closing Board and the composition of applicable committees thereof shall satisfy the requirements of Rule 10A-3 under the Exchange Act and the applicable rules of NYSE MKT for a “controlled company” as defined therein, (v) the appointment as chairman of the Post-Closing Board of the Buyer Nominee designated by Buyer in the same written designation supplied pursuant to clause (iii) above, and (vi) the chief executive officer of the Company is a member of the Post-Closing Board. The intent of the parties is that the Post-Closing Board shall be comprised of five members designated by the Buyer, three independent members in accordance with the NYSE MKT standards and one insider of the Company.
		

		
			“Proceeding” means any action, arbitration, mediation, audit, hearing, investigation (for which the Seller has received written notice), litigation or suit (whether civil, criminal, administrative or judicial, whether formal or informal) commenced, brought, conducted or heard by or before, or otherwise involving, any Governmental Authority or arbitrator. 
		

		
			“Purchase Price” has the meaning set forth in Section 2.02.
		

		
			“Qualified Benefit Plan” has the meaning set forth in Section 3.12(c).
		

		
			“Real Property” means the real property owned by Company Subsidiary, together with all buildings, structures and facilities located thereon.
		

		
			“Registration Rights Agreement” means the Registration Rights Agreement between the Company and Buyer, substantially in the form attached hereto as Exhibit A, as such agreement may be amended, supplemented, or otherwise modified from time to time in accordance with the terms thereof.
		

		
			“Representative” means, with respect to any Person, any and all directors, officers, employees, consultants, financial advisors, counsel, accountants and other agents of such Person.
		

		
			“Representatives” has the meaning set forth in Section 5.02(a).
		

		
			

		 

		

			8

		

 

 
		

		
			“Schedule Supplement” has the meaning set forth in Section 5.15.
		

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

		
			“Securities Act” has the meaning set forth in Section 3.05(a).
		

		
			“SEHK Listing Rules” means, The Rules Governing the Listing of Securities on the Hong Kong Stock Exchange.
		

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

		
			“Share Purchase Price” has the meaning set forth in Section 2.02.
		

		
			“Superior Proposal” means a bona fide written Takeover Proposal involving the direct or indirect acquisition pursuant to a tender offer, exchange offer, merger, consolidation or other business combination, of all or substantially all of the Company’s consolidated assets or a majority of the outstanding Company Common Stock, that the Company Board determines in good faith (after consultation with outside legal counsel and the Company’s financial advisor) is more favorable from a financial point of view to the Company’s shareholders than the Transaction, taking into account (a) all financial considerations, (b) the identity of the third party making such Takeover Proposal, (c) the anticipated timing, conditions (including any financing condition or the reliability of any debt or equity funding commitments) and prospects for completion of such Takeover Proposal, (d) the other terms and conditions of such Takeover Proposal and the implications thereof on the Company, including relevant legal, regulatory and other aspects of such Takeover Proposal deemed relevant by the Company Board and (e) any revisions to the terms of this Agreement and the Transaction proposed by the Buyer during the Notice Period set forth in Section 5.02(d).
		

		
			“Takeover Proposal” means a proposal or offer from, or indication of interest in making a proposal or offer by, any Person (other than Buyer and its Affiliated) relating to any (a) direct or indirect acquisition of assets of the Company (including any voting equity interests of Subsidiaries, but excluding sales of assets in the ordinary course of business) equal to 25% or more of the fair market value of the Company’s consolidated assets or to which 25% or more of the Company’s net revenues on a consolidated basis are attributable, (b) direct or indirect acquisition of 25% or more of the voting equity interests of the Company, (c) tender offer or exchange offer that if consummated would result in any Person beneficially owning (within the meaning of Section 13(d) of the Exchange Act) 25% or more of the voting equity interests of the Company, (d) merger, consolidation, other business combination or similar transaction involving the Company, pursuant to which such Person would own 25% or more of the consolidated assets or net revenues of the Company, or (e) liquidation or dissolution (or the adoption of a plan of liquidation or dissolution) of the Company or the declaration or payment of an extraordinary dividend (whether in cash or other property) by the Company.
		

		
			
		

		
			

		 

		

			9

		

 

“Taxes” means all federal, state, local, foreign and other income, gross receipts, sales, use, production, ad valorem, transfer, franchise, registration, profits, license, lease, service, service use, withholding, payroll, employment, unemployment, estimated, excise, severance, environmental, stamp, occupation, premium, property (real or personal), real property gains, windfall profits, customs, duties or other taxes, fees, assessments or charges of any kind whatsoever, together with any interest, additions or penalties with respect thereto and any interest in respect of such additions or penalties.
		

		
			“Tax Return” means any return, declaration, report, claim for refund, information return or statement or other document required to be filed with respect to Taxes, including any schedule or attachment thereto, and including any amendment thereof.
		

		
			“Termination Fee” has the meaning set forth in Section 7.05(b).
		

		
			“Transaction” has the meaning set forth in the recitals.
		

		
			“Transaction Consideration” means the Purchase Price together with the benefits inuring to the Company as a result of the executionexecution.
		

			
	
			
				Article II
			

PURCHASE AND SALE

			
	
			
				 Section 2.01.
			Purchase and Sale.  Subject to the terms and conditions set forth herein, at the Closing, the Company shall issue and sell to Buyer, and Buyer shall purchase from the Company the Shares for the consideration specified in Section 2.02.

			
	
			
				 Section 2.02.
			Purchase Price. The aggregate purchase price for the Shares shall be $47,880,000 (the “Share Purchase Price”), which equals $0.72 per Share.

			
	
			
				 Section 2.03.
			Transactions to be Effected at the Closing.

			
	
			
				 (a)
			At the Closing, Buyer shall deliver to the Company:

			
	
			
				 (i)
			an amount equal to the Purchase Price less the amount of the Deposit (the “Closing Payment”) by wire transfer of immediately available funds to an account of the Company designated in writing by the Company to Buyer no later than two Business Days prior to the Closing Date; 

			
	
			
				 (ii)
			the Registration Rights Agreement duly executed by Buyer; and

			
	
			
				 (iii)
			all other agreements, documents, instruments or certificates required to be delivered by Buyer at or prior to the Closing pursuant to Section 6.03 of this Agreement.

			
	
			
				 (b)
			At the Closing, the Company shall deliver to Buyer:

		
			
		

		
			

		 

		

			10

		

 

 
		

			
	
			
				 (i)
			stock certificates evidencing the Shares, free and clear of all Encumbrances;

			
	
			
				 (ii)
			the Registration Rights Agreement duly executed by the Company;

			
	
			
				 (iii)
			evidence that the Amended and Restated Articles of Incorporation approved pursuant to the Shareholders Approval have been duly filed with the Secretary of State of Colorado; and

			
	
			
				 (iv)
			all other agreements, documents, instruments or certificates required to be delivered by the Company at or prior to the Closing pursuant to Section 6.02 of this Agreement.

			
	
			
				 (c)
			At the Closing, the Escrow Agent shall transfer the Deposit from the Escrow Account into the general account of the Company as payment of a portion of the Purchase Price.

			
	
			
				 (d)
			By its terms, the Post Closing Board Composition shall become effective as of the Closing.

			
	
			
				 Section 2.04.
			Closing. Subject to the terms and conditions of this Agreement, the issuance, purchase and sale of the Shares contemplated hereby shall take place at a closing (the “Closing”) to be held at 1:00 p.m., Denver time, on the date that is no later than two Business Days after the last of the conditions to the Closing set forth in Article VI have been satisfied or waived (other than conditions which, by their nature, are to be satisfied on the Closing Date), at the offices of Sherman & Howard L.L.C., 633 17th Street, Suite 3000, Denver, Colorado 80202, or at such other time or on such other date or at such other place as the Company and Buyer may mutually agree upon in writing (the day on which the Closing takes place being the “Closing Date”)..

		
			 
		

			
	
			
				Article III
			

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

		
			Except as set forth in the Disclosure Schedule, the Company represents and warrants to Buyer that the statements contained in this Article III are true and correct.
		

			
	
			
				 Section 3.01.
			Organization and Authority of the Company.

			
	
			
				 (a)
			The Company is a corporation duly organized, validly existing and in good standing under the Laws of the state of Colorado, and has all requisite corporate power and authority to own or lease all of its properties and assets and to carry on its business as it is now being conducted. The Company is duly licensed or qualified to do business, and is in good standing in each jurisdiction in which the nature of the business conducted by it makes such licensing or qualification necessary, except where the failure to be so licensed, qualified or in good standing, individually or in the aggregate, has not 

		 

		

			11

		

 

	had and would not reasonably be expected to have a Material Adverse Effect. The Company has all necessary corporate power and authority to enter into this Agreement, to carry out its obligations hereunder and, subject to, in the case of the consummation of the Transaction, receipt of the Company Shareholder Approval as contemplated by Section 5.03, to consummate the transactions contemplated by this Agreement. The execution and delivery by the Company of this Agreement, the performance by the Company of its obligations hereunder and the consummation by the Company of the transactions contemplated hereby have been duly authorized by all requisite corporate action on the part of the Company, subject only, in the case of consummation of the Transaction, to the receipt of the Company Shareholder Approval as contemplated by Section 5.03. The Company Shareholder Approval is the only vote or consent of the holders of the Company’s capital stock necessary to approve and consummate the Transaction. This Agreement has been duly executed and delivered by the Company, and (assuming due authorization, execution and delivery by Buyer) this Agreement constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

		
			 
		

			
	
			
				 (b)
			The Company Board, by resolutions duly adopted and, as of the date hereof, not subsequently rescinded or modified in any way, has, as of the date hereof (i) determined that this Agreement and the transactions contemplated hereby, including the Transaction, are fair to, and in the best interests of, the Company’s shareholders, (ii) directed that the Transaction contemplated by this Agreement be submitted to Company’s shareholders for their approval pursuant to the rules of the NYSE MKT, (iii) approved and adopted the Amended and Restated Articles of Incorporation, subject to the approval of holders of two thirds of the Company’s outstanding shares of Common Stock, and (iv) resolved to recommend that Company shareholder approve the Transaction as set forth in this Agreement and approved such amendment to the Company’s articles of incorporation (collectively, the “Company Board Recommendation”) and directed that such matter be submitted for consideration of the shareholders of the Company at the Company Shareholder Meeting.

			
	
			
				 Section 3.02.
			Capitalization.

			
	
			
				 (a)
			The authorized capital stock of the Company consists of 75,000,000 shares of Common Stock, of which 48,333,180 shares are issued and outstanding, no shares were held in treasury or owned by the Company Subsidiary, 5,489,733 shares are reserved under  the Company’s outstanding warrants, 2,530,837 shares are reserved for issuance upon exercise of the Company’s outstanding stock options granted to Company employees and directors under the Company’s Benefit Plans, and a total of 1,458,741 shares are reserved for future grants under the Company’s Benefit Plans (571,848 shares under the UQM 2012 Equity Incentive Plan, 435,935 shares under theUQM Stock Plan for Non-Employee Directors,  236,389 shares under the UQM Stock Bonus Plan and 214,569 shares under the UQM Employee Stock Pruchase Plan), in each case at the close 

		 

		

			12

		

 

	of business on the date of this Agreement.  As of the close of business on the date of this Agreement, there are no other shares of Common Stock issued and outsanding or reserved for issuance and there are no other securities convertible into shares of Common Stock.  Assuming receipt of the Company Shareholder Approval as contemplated by Section 5.03 and filing of Articles of Amendment to the Company’s Articles of Incorporation to implement the increase of capital stock authorized by the Company Shareholder Approval, the authorized capital stock of the Company consists of 175,000,000 shares of Common Stock.  The issued and outstanding shares have been, and all shares which may be issued will be, duly authorized, are validly issued, fully paid and non-assessable. At the Closing, Buyer will receive good and marketable title to the Shares, free and clear of all Encumbrances. Section 3.02 of the Disclosure Schedule sets forth a true and complete list of all Stock Options, Warrants or other rights to purchase or receive shares of Common Stock outstanding as of the date of this Agreement, including the number of shares of Common Stock subject thereto, expiration dates and exercise prices thereof and the names of the holders thereof. The Company has not issued any capital stock since March 31, 2016, other than (i) pursuant to the exercise of employee stock options under the Company’s stock option plans, (ii) the issuance of shares of Common Stock to employees pursuant to the Company’s employee stock purchase plans, (iii) the issuance of shares of Common Stock upon the exercise of warrants outstanding on March 31, 2016 and (iv) equity awards made to the officers and key employees of the Company as part of their annual compensation, as described in Section 3.02(a) of the Disclosure Schedule.  No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by this Agreement.

			
	
			
				 (b)
			Except as disclosed in the Company SEC Documents, there are no bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into, or exchangeable or exercisable for, securities having the right to vote) on any matters on which stockholders of the Company may vote.  Except as set forth above in Section 3.02(a), (i) there are not issued, reserved for issuance or outstanding (A) any securities convertible into to exchangeable or exercisable for shares of capital stock of the Company or (B) any warrants, subscriptions, calls, options or other rights to acquire from the Company, or any obligation of the Company to issue, any capital stock, voting securities or securities convertible into or exchangeable or exercisable for capital stock or voting securities of the Company, and (ii) there are not any outstanding obligations of the Company to repurchase, redeem or otherwise acquire any such securities or to issue, deliver or sell, or cause to be issued, delivered or sold, any such securities. The Company is not a party to any voting agreement with respect to the voting of any such securities.

			
	
			
				 Section 3.03.
			Subsidiaries. Other than the Company Subsidiary, the Company has no direct or indirect subsidiaries.  The Company owns, directly or indirectly, all of the capital stock or other equity interests of the Company Subsidiary, and such capital stock or other equity interests are free and clear of any liens, and all of the issued and outstanding shares of capital stock of the Company Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.

		 

		

			13

		

 

			
	
			
				 Section 3.04.
			No Conflicts; Consents. The execution, delivery and performance by the Company of this Agreement, and (assuming receipt of the Company Shareholder Approval) the consummation of the Transaction, do not and will not: (a) result in a violation or breach of any provision of the articles of incorporation or by-laws of the Company; (b) result in a violation or breach of any provision of any Law or Governmental Order applicable to the Company or any of its assets; or (c) require the consent, notice or other action by any Person under, conflict with, result in a violation or breach of, constitute a default under or result in the acceleration of any Company Material Contract, except in the cases of clauses (b) and (c), where the violation, breach, conflict, default, acceleration or failure to give notice would not have a Material Adverse Effect. No consent, approval, Permit, Governmental Order, declaration or filing with, or notice to, any Governmental Authority is required by or with respect to the Company in connection with the execution and delivery of this Agreement and the consummation of the Transaction, except for such filings as may be required to be made to CFIUS or the NYSE MKT.

		
			 
		

			
	
			
				 Section 3.05.
			SEC Filings; Financial Statements; No Undisclosed Liabilities.

			
	
			
				 (a)
			The Company has timely filed with or furnished to, as applicable, the SEC all registration statements, prospectuses, reports, schedules, forms, statements and other documents (including exhibits and all other information incorporated by reference) required to be filed or furnished by it with the SEC since March 31, 2011 (the “Company SEC Documents”). The Company has made available to Buyer all such Company SEC Documents that it has so filed or furnished prior to the date hereof. As of their respective filing dates (or, if amended or superseded by a subsequent filing, as of the date of the last such amendment or superseding filing prior to the date hereof), each of the Company SEC Documents complied as to form in all material respects with the applicable requirements of the Securities Act of 1933, as amended (the “Securities Act”), and the Exchange Act, and the rules and regulations of the SEC thereunder applicable to such Company SEC Documents. None of the Company SEC Documents, including any financial statements, schedules or exhibits included or incorporated by reference therein at the time they were filed (or, if amended or superseded by a subsequent filing, as of the date of the last such amendment or superseding filing prior to the date hereof), contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

			
	
			
				 (b)
			Each of the consolidated financial statements (including, in each case, any related notes thereto) contained in the Company SEC Documents: (i) complied as to form in all material respects with the published rules and regulations of the SEC with respect thereto as of their respective dates; (ii) was prepared in accordance with United States generally accepted accounting principles (“GAAP”) applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto and, in the case of unaudited interim financial statements, as may be permitted by the SEC for Quarterly Reports on Form 10-Q); and (iii) fairly presented in all material respects the consolidated financial position of the Company and its consolidated subsidiaries at the 

		 

		

			14

		

 

	respective dates thereof and the consolidated results of the Company’s operations and cash flows for the periods indicated therein, subject, in the case of unaudited interim financial statements, to normal and year-end audit adjustments as permitted by GAAP and the applicable rules and regulations of the SEC.

			
	
			
				 (c)
			The audited balance sheet of the Company for the fiscal year ended March 31, 2016 contained in the Company SEC Documents filed prior to the date hereof is hereinafter referred to as the “Company Balance Sheet”.  The Company does not have any liabilities (whether known or unknown, accrued, absolute, contingent or otherwise and whether due or to become due) other than liabilities that (i) are reflected or recorded on the Financial Statements (including in the notes thereto), (ii) were incurred since the date of the Financial Statements in the ordinary course of business, or (iii) would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

			
	
			
				 (d)
			The Company is not a party to, or has any commitment to become a party to, any off-balance sheet arrangement as such term is defined in Item 303 of Regulation S-K of the SEC.

			
	
			
				 (e)
			The books and records of the Company are consistent in all material respects with the Company Balance Sheet and the related consolidated statements of cash flow and operations for the fiscal years ended March 31, 2016 which have been audited (collectively, the “Financial Statements”).  Except as required by GAAP, the Company has not, between the last day of its most recently ended fiscal year and the date of this Agreement, made or adopted any material change in its accounting methods, practices or policies in effect on such last day of its most recently ended fiscal year.  Since March 31, 2011, the Company has not had any material dispute with any of its auditors regarding accounting matters or policies that is currently outstanding or that resulted (or would reasonably be expected to result) in an adjustment to, or any restatement of, the Financial Statements.  No current or former independent auditor for the Company has resigned or been dismissed from such capacity as a result of or in connection with any disagreement with the Company on a matter of accounting practices.

			
	
			
				 Section 3.06.
			Absence of Certain Changes or Events. Since the date of the Company Balance Sheet, except in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, the business of the Company has been conducted in the ordinary course of business and there has not been or occurred:

			
	
			
				 (a)
			any Material Adverse Effect or any event, condition, change or effect that could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;

			
	
			
				 (b)
			except as set forth in Section 3.06(b) of the Disclosure Schedule, any sale, lease, license or other disposition of any of the assets shown or reflected on the Company Balance Sheet (or any creation, assumption or incurrence of any Encumbrances upon 

		 

		

			15

		

 

	such assets), except in the ordinary course of business and except for any assets having an aggregate value of less than $50,000;

			
	
			
				 (c)
			incurrence of any indebtedness for borrowed money in excess of an aggregate amount of $50,000;

			
	
			
				 (d)
			any entry into an employment agreement (or any amendment or modification of an employment agreement) providing for compensation in excess of $100,000, or any entry into any severance agreement or any labor, or union agreement or plan (or amendments of any such existing agreements or plan);

			
	
			
				 (e)
			any hiring or termination of the employment of any executive of the Company with annual aggregate non-equity compensation, including target bonuses, in excess of $100,000;

			
	
			
				 (f)
			except in the ordinary course of business, any (i) increase in the compensation or benefits payable to any Employee, (ii) modification of any severance policy applicable to any Employee resulting in any increase in the amount of severance payable to any such Employee (or expanding of the circumstances in which such severance is payable) or (iii) crediting of service in connection with any Benefit Plan to any Employee such that the total service credited to any such Employee exceeds the actual services of such Employee to the Company;

			
	
			
				 (g)
			granting Employees and non-employee directors equity compensation awards under Benefit Plans greater than 818,000 shares of Common Stock in the aggregate;

			
	
			
				 (h)
			acquisition of the assets, except in the ordinary course of business and except for any assets having an aggregate value of less than $50,000;

			
	
			
				 (i)
			adoption of any plan of merger, consolidation, reorganization, liquidation or dissolution or filing of a petition in bankruptcy under any provisions of federal or state bankruptcy Law or consent to the filing of any bankruptcy petition against it under any similar Law;

			
	
			
				 (j)
			any liabilities required to be reflected in the Company Balance Sheet, disclosed in accordance with GAAP or disclosed in filings made with the SEC;

			
	
			
				 (k)
			any alteration in the Company’s method of accounting or change of its auditors;

			
	
			
				 (l)
			any dividend or distribution of cash or other property to the shareholders of the Company or purchase, redemption or any agreement to purchase or redeem any shares of the Common Stock or the declaration of any dividend or distribution of cash or other property;

		
			 
		

		 

		

			16

		

 

			
	
			
				 (m)
			issuance of any equity securities to any officer, director of Affiliate of the Company, except pursuant to the existing Company equity plans;

			
	
			
				 (n)
			make or change any election with respect to Taxes, amend any Tax Return, or agree to settle any claim or assessment in respect of Taxes for an amount materially in excess of the amount accrued or reserved with respect thereto on the Company Balance Sheet;

			
	
			
				 (o)
			any (i) entering into any Contract other than any Contract that (1) was entered into in the ordinary course of business and (2) does not involve future payments by the Company of greater than $50,000 during any twelve (12) month period, (ii) material amendment to any Contract other than any amendment that (1) was effected in the ordinary course of business and (2) does not involve future payments by the Company of greater than $50,000 during any twelve (12) month period or (iii) any termination or waiver of any material right under any Contract other than in the ordinary course of business (excluding the expiration of any Contract in accordance with its terms); or

			
	
			
				 (p)
			any agreement to do any of the foregoing, or any action or omission that would result in any of the foregoing.

		
			 
		

			
	
			
				 Section 3.07.
			Intellectual Property. 

			
	
			
				 (a)
			Section 3.07(a) of the Disclosure Schedule lists all patents, industrial design rights, trademarks, service marks, trade names, trade dress, copyrights, mask works, inventions, technology, confidential know-how, formulae, trade secrets, confidential and proprietary information, computer software programs, domain names, and other intellectual property, and all registrations and applications for registration of any of the foregoing owned by the Company. Except as would not have a Material Adverse Effect, the Company owns, has a license to use, or has the right to use all Intellectual Property necessary to conduct the business as currently conducted (the “Company Intellectual Property”). 

			
	
			
				 (b)
			Except as set forth in Section 3.07(b) of the Disclosure Schedule: (i) to the Company’s Knowledge, the Company Intellectual Property as currently licensed or used by the Company, and the Company’s conduct of its business as currently conducted, do not infringe, misappropriate or otherwise violate the Intellectual Property Rights of any Person; and (ii) to the Company’s Knowledge no Person is infringing, misappropriating or otherwise violating any Company Intellectual Property.

			
	
			
				 (c)
			The Company owns, or has rights to use, all patents, patent applications, industrial design rights, trademarks, trademark applications, service marks, service mark applications, mask works, trade names, trade secrets, inventions, technology, copyrights, licenses, confidential know-how, computer software programs, domain names, and other intellectual property rights and similar rights necessary or required for use in connection with its business as described in the SEC Reports and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”).  The 

		 

		

			17

		

 

	Company has not received a notice (written or otherwise) that any of the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two years from the date of this Agreement, except for those Intellectual Property Rights which expire on their own terms and not as a result of any action or inaction by Company.  Except as set forth in Section 3.07(c) of the Disclosure Schedule, the Company Intellectual Property Rights have been properly maintained and all applicable maintenance fees and renewal fees have been paid.  The Company has not received, since the date of the latest audited financial statements included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as could not have or reasonably be expected to not have a Material Adverse Effect.  All such Intellectual Property Rights are enforceable.  Except as set forth Section 3.07(c) of the Disclosure Schedule, the Company has taken reasonable security measures to protect the secrecy, confidentiality and value of all of its intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

			
	
			
				 Section 3.08.
			Real Estate and Personal Property.

			
	
			
				 (a)
			Schedule 3.08 of the Disclosure Schedule contains a complete and accurate list of all real property, leaseholds or other interests therein owned by the Company or Company Subsidiary. Company Subsidiary has good and marketable title in fee simple to the Real Property owned by it and the Company has good and marketable title in all personal property owned by the Company that is material to its business, in each case free and clear of all Encumbrances, except as disclosed on Section 3.08(a) of the Disclosure Schedule for Encumbrances as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company. The Company does not lease any real property.

			
	
			
				 (b)
			The buildings, material improvements, installations and facilities included in the Real Property are free of any material physical or mechanical defects with respect to their intended uses, and all building systems (including heating, ventilation, air-conditioning, elevator, other mechanical, electrical, sprinkler, life safety and plumbing systems) are in normal operating condition, ordinary wear and tear excepted.  All water, sewer, gas electric, telephone, drainage facilities and all other utilities required by law or by normal operation of the Real Property are paid for and adequate to service the Real Property in its present use and to permit compliance in all material respects with all requirements of law and normal usage of the Real Property as currently used by the Company.

			
	
			
				 (c)
			The Company has not received written notice of any existing plan or study by any public authority or by any other person or entity that challenges or otherwise adversely affects the continuation of the use or operation of any Real Property and has no Knowledge of any such plan or study with respect to which it has not received written notice. To the Company’s Knowledge, there is no person or entity in possession of any Real Property other than the Company.  No third party has any right to acquire any of the 

		 

		

			18

		

 

	Real Property or any interest therein, except as set forth on Section 3.08(a) of the Disclosure Schedule.

			
	
			
				 Section 3.09.
			Legal Proceedings; Governmental Orders.

			
	
			
				 (a)
			Except as set forth in Section 3.09 of the Disclosure Schedule, there are no actions, suits, claims, investigations or other legal proceedings pending or, to the Company’s Knowledge, threatened against or by the Company affecting any of its properties or assets which, individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect, or which, individually or in the aggregate, would reasonably be expected to affect the Company’s ability to perform its obligations under this Agreement or otherwise impede, prevent or materially delay the consummation of the transactions contemplated by this Agreement.

			
	
			
				 (b)
			Except as set forth in Section 3.09 of the Disclosure Schedule, there are no outstanding Governmental Orders and no unsatisfied judgments, penalties or awards against or affecting (or, to the Company’s Knowledge, investigations involving) the Company or any of its properties or assets which, individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect.

			
	
			
				 Section 3.10.
			Compliance With Laws; Permits.

			
	
			
				 (a)
			Except as set forth in Section 3.10 of the Disclosure Schedule, the Company is in compliance with all Laws applicable to it or its business, operations, properties or assets, except where the failure to be in compliance, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect. Since March 31, 2011, the Company has not received any written notice to the effect that a Governmental Authority claimed or alleged that the Company was not in compliance with all Laws applicable to it, any of its properties or assets or any of its businesses or operations, except for instances of noncompliance that, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect.

			
	
			
				 (b)
			All Permits required for the Company to conduct its business have been obtained by it and are valid and in full force and effect, except where the failure to obtain such Permits, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect. There has occurred no violation of, default (with or without notice or lapse of time or both) under, or event giving to others any right of termination, amendment or cancellation of (with or without notice or lapse of time or both), any Permit, except for violations, defaults or events that, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect.

			
	
			
				 Section 3.11.
			Environmental Matters. Except for such matters as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect:

		 

		

			19

		

 

			
	
			
				 (a)
			Each of the Company and the Company Subsidiary is, and has been, in compliance with all Environmental Laws, including by obtaining and complying with all Environmental Permits required under applicable Environmental Laws for the operation of the business of the Company as currently conducted.

			
	
			
				 (b)
			The Company has not (i) generated, treated, handled, used, stored, caused or allowed the release or disposal of, arranged for the disposal of, or transported any Hazardous Materials, at, on, to or from (A) any Real Property, or (B) any property or facility which has been named, listed or nominated for potential listing, on any list of contaminated sites promulgated pursuant to CERCLA or any other Environmental Law; or (ii) to its Knowledge caused or allowed the exposure of any employee or any third party to any Hazardous Materials.

			
	
			
				 (c)
			Neither the Company nor the Company Subsidiary has received written notice of and there is no Legal Action pending, or to the Knowledge of the Company, threatened against the Company or the Company Subsidiary, alleging any liability (including without limitation STRICT LIABILITY) under or non-compliance with any Environmental Law or seeking to impose any financial responsibility for any investigation, cleanup, removal, containment or any other remediation or compliance under any Environmental Law. Neither the Company nor the Company Subsidiary is subject to any Governmental Order from, or written agreement by or with, any Governmental Entity or third party imposing any liability or obligation with respect to any of the foregoing.

		
			 
		

			
	
			
				 Section 3.12.
			Employee Benefit Matters.

			
	
			
				 (a)
			Section 3.12(a) of the Disclosure Schedule contains a true and complete list of each material pension, benefit, retirement, compensation, employment, consulting, profit-sharing, deferred compensation, incentive, bonus, performance award, phantom equity, membership interest or membership interest-based, stock or stock-based, change in control, retention, severance, vacation, paid time off, welfare, fringe-benefit and other similar agreement, plan, policy, program or arrangement (and any amendments thereto), in each case whether or not reduced to writing and whether funded or unfunded, including each “employee benefit plan” within the meaning of Section 3(3) of ERISA, whether or not tax-qualified and whether or not subject to ERISA, (i) which is maintained, sponsored, contributed to, or required to be contributed to by Company or any ERISA Affiliate, or (ii) under which Company or any ERISA Affiliate has any Liability, whether maintained, sponsored, or contributed to by the Company or ERISA Affiliate (each, a “Benefit Plan”). The Company has separately identified in Section 3.12(a) of the Disclosure Schedule each Benefit Plan that is maintained, sponsored, contributed to, or required to be contributed to by Company or any ERISA Affiliate primarily for the benefit of employees outside of the United States (a “Non-U.S. Benefit Plan”).

			
	
			
				 (b)
			With respect to each material Benefit Plan, the Company has made available accurate, current and complete copies of each of the following: (i) the plan 

		 

		

			20

		

 

	document together with all amendments; (ii) where applicable, copies of any trust agreements or other funding arrangements, custodial agreements, insurance policies and contracts, administration agreements and similar agreements; (iii) copies of any summary plan descriptions, summaries of material modifications, employee handbooks and any other material written communications (or a description of any material oral communications) relating to any Benefit Plan; (iv) in the case of any Benefit Plan that is intended to be qualified under Section 401(a) of the Code, a copy of the most recent determination, opinion or advisory letter from the Internal Revenue Service; (v) in the case of any Benefit Plan for which a Form 5500 is required to be filed, a copy of the two most recently filed Form 5500, with schedules and financial statements attached; (vi) actuarial valuations and reports related to any Benefit Plans with respect to the two most recently completed plan years; (vii) the most recent nondiscrimination tests performed under the Code; and (viii) copies of material notices, letters or other correspondence from the Internal Revenue Service, Department of Labor, Pension Benefit Guaranty Corporation or other Governmental Authority relating to the Benefit Plan.

			
	
			
				 (c)
			Each Benefit Plan and related trust complies with all applicable Laws and the terms of the Benefit Plan.  Each Benefit Plan that is intended to be qualified under Section 401(a) of the Code (a “Qualified Benefit Plan”) has received a favorable determination letter or, with respect to a prototype or volume submitter plan, an opinion letter from the Internal Revenue Service to the effect that such Qualified Benefit Plan is so qualified and that the plan and the trust related thereto are exempt from federal income taxation under Sections 401(a) and 501(a) of the Code, and, to the Company’s Knowledge, nothing has occurred that could reasonably be expected to adversely affect the qualified status of any Qualified Benefit Plan.  All benefits, contributions and premiums required by and due under the terms of each Benefit Plan or applicable Law have been timely paid in accordance with the terms of such Benefit Plan, the terms of all applicable Laws and GAAP.

			
	
			
				 (d)
			No Benefit Plan: (i) is subject to the minimum funding standards of Section 302 of ERISA or Section 412 of the Code; or (ii) is a “multi-employer plan” (as defined in Section 3(37) of ERISA).  Neither the Company nor any ERISA Affiliate: (i) has withdrawn from any pension plan under circumstances resulting (or expected to result) in a liability to the Pension Benefit Guaranty Corporation; or (ii) has engaged in any transaction which would give rise to a liability of the Company or Buyer under Section 4069 or Section 4212(c) of ERISA.  Nothing has occurred with respect to any Benefit Plan that has subjected or could reasonably be expected to subject Company or any ERISA Affiliate to a material penalty under Section 502 of ERISA or to material tax or penalty under Section 4975 of the Code.

			
	
			
				 (e)
			Other than as required under Section 4980B of the Code or other applicable Law, no Benefit Plan provides benefits or coverage in the nature of health, life or disability insurance following retirement or other termination of employment.

		
			 
		

			
	
			
				 (f)
			Except as set forth in Section 3.12(e) of the Disclosure Schedule, there is no pending or, to Company Knowledge, threatened action relating to a Benefit Plan 

		 

		

			21

		

 

	(other than routine claims for benefits), and no Benefit Plan has within the three years prior to the date hereof been the subject of an examination or audit by a Governmental Authority or the subject of an application or filing under or is a participant in, an amnesty, voluntary compliance, self-correction or similar program sponsored by any Governmental Authority.

			
	
			
				 (g)
			Except as set forth in Section 3.12(f) of the Disclosure Schedule, neither the execution of this Agreement nor any of the transactions contemplated by this Agreement will: (i) result in the payment to any Employee, director or consultant of any money or other property; or (ii) accelerate the vesting of or provide any additional rights or benefits (including funding of compensation or benefits through a trust or otherwise) to any Employee, director or consultant, except as a result of any partial plan termination resulting from this Agreement.  Neither the execution of this Agreement nor the consummation of the transactions contemplated hereby will result in “excess parachute payments” within the meaning of Section 280G(b) of the Code.

			
	
			
				 Section 3.13.
			Employment Matters.

			
	
			
				 (a)
			The Company is not a party to, or bound by, any collective bargaining or other agreement with a labor organization representing any of its Employees. Since March 31, 2011, there has not been, nor, to the Company’s Knowledge, has there been any threat of, any strike, slowdown, work stoppage, lockout, concerted refusal to work overtime or other similar labor activity or dispute affecting the Company.

			
	
			
				 (b)
			The Company is in compliance with all applicable Laws pertaining to employment and employment practices to the extent they relate to employees of the Company, except to the extent non-compliance would not result in a Material Adverse Effect. There are no actions, suits, claims, investigations or other legal proceedings against the Company pending, or to the Company’s Knowledge, threatened to be brought or filed, by or with any Governmental Authority or arbitrator in connection with the employment of any current or former employee of the Company, including, without limitation, any claim relating to unfair labor practices, employment discrimination, harassment, retaliation, equal pay or any other employment related matter arising under applicable Laws.

		
			 
		

			
	
			
				 Section 3.14.
			Taxes. 

			
	
			
				 (a)
			Except as set forth in Section 3.14 of the Disclosure Schedule:

			
	
			
				 (i)
			The Company has filed (taking into account any valid extensions) all Tax Returns required to be filed by the Company. Such Tax Returns are true, complete and correct in all material respects. The Company is not currently the beneficiary of any extension of time within which to file any Tax Return other than extensions of time to file Tax Returns obtained in the ordinary course of business. All material Taxes due and owing by the Company have been paid or accrued. No claim has ever been made by a Governmental Authority in a jurisdiction where the Company does 

		 

		

			22

		

 

	not file Tax Returns that the Company is or may be subject to taxation by that jurisdiction.  There are no Encumbrances for Taxes (other than Taxes not yet due and payable) upon any of the assets of the Company.

			
	
			
				 (ii)
			No extensions or waivers of statutes of limitations have been given or requested with respect to any Taxes of the Company.

			
	
			
				 (iii)
			There are no ongoing or pending audits, actions, suits, claims, investigations or other legal proceedings by any taxing authority against the Company.

			
	
			
				 (iv)
			The Company is not a party to any Tax-sharing agreement.

			
	
			
				 (v)
			All Taxes which the Company is obligated to withhold from amounts owing to any employee, creditor or third party have been withheld and paid.

			
	
			
				 (vi)
			The Company is not obligated to make any payments and is not a party to any agreement, contract, arrangement or plan that could result, separately or in the aggregate, in the payment of any amount that will not be fully deductible as a result of Code Section 162(m) (or any corresponding provision of state, local, or non U.S. Tax law).

			
	
			
				 (vii)
			The Company has not been a United States real property holding corporation within the meaning of Code Section 897(c)(1)(A)(ii).

			
	
			
				 (viii)
			The Company has not been a member of an affiliated group filing a consolidated federal income Tax Return (other than a group the common parent of which was the Company) and has no liability for the Taxes of any person (other than the Company) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or no-U.S. law), as a transferee or successor, by contract or otherwise.

			
	
			
				 (ix)
			The Company is not and has not been a party to any “reportable transaction,” as defined in Code Section 6707A(c)(1) and Treasury Regulation Section 1.601-4(b).

			
	
			
				 (x)
			The Company has not been a distributing corporation or a controlled corporation in a transaction intended to be governed by Section 355 of the Code.

			
	
			
				 (xi)
			The Company has (i) complied with the requirements of Section 482 of the Code and the Treasury Regulations thereunder (and all comparable provisions of state, local or foreign law), and (ii) prepared and maintained adequate documentation in respect of transactions with related parties governed by Section 482 of the Code and the Treasury Regulations thereunder (and all comparable provisions of state, local or foreign Law).

			
	
			
				 (xii)
			The Company has not undergone an “ownership change” within the meaning of Section 382(g) of the Code.

		 

		

			23

		

 

			
	
			
				 (xiii)
			There is currently no limitation on the utilization of net operating losses, capital losses, built-in losses, credits or similar items of the Company under Section 269, 382, 383, 384 or 1502 of the Code and Treasury Regulations promulgated thereunder (and any comparable provisions of state, local and foreign Tax Law).

			
	
			
				 (xiv)
			The Company is not a party to any agreement, contract, arrangement or plan that has resulted or could result, separately or in the aggregate, in the payment of an amount that will not be fully deductible as a result of Section 162(m) of the Code (or any corresponding provision of state, local or foreign Tax Law).

			
	
			
				 (xv)
			The Company has not agreed to or would reasonably be expected to be required to include any item of income in, or exclude any item of deduction from, taxable income for any Tax period (or portion thereof) ending after the Closing Date as a result of any:  (i) change in method of accounting pursuant to Section 481(a) of the Code or any similar provision of state, local or foreign Tax Law by reason of a change in accounting method initiated by the Company for a Tax period ending on or prior to the Closing Date; (ii) closing agreement described in Section 7121 of the Code (or any corresponding or similar provision of federal, state, local, or foreign Tax Law) executed on or prior to the Closing Date; (iii) installment sale or open transaction disposition made on or prior to the Closing Date; (iv) deferred intercompany gain or any excess loss account described in Treasury Regulations under Section 1502 of the Code (or any corresponding or similar provision of federal, state, local or foreign Tax Law); or (v) election under Section 108(i) of the Code (or comparable provisions of state, local or foreign Tax Law).

			
	
			
				 Section 3.15.
			Material Contracts. The Company is not a party to, and none of its properties or assets is subject to, any Contract that is of a nature required to be filed as an exhibit to a report or filing under the Securities Act or the Exchange Act, other than any Contract that is filed as an exhibit to Company SEC Documents. All the Company Material Contracts are valid and binding on the Company, enforceable against it in accordance with its terms, and are in full force and effect. Neither the Company nor, to the Knowledge of the Company, any third party has violated any provision of, or failed to perform any obligation required under the provisions of any Company Material Contract.  Neither the Company nor, to the Knowledge of the Company, any third party is in breach of or default (with or without notice or lapse of time or both) under, or has received written notice of breach, of any Company Material Contract, or has waived or failed to enforce any rights or benefits thereunder.

			
	
			
				 Section 3.16.
			Insurance. The Company is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company is engaged.  To the Company’s Knowledge, it will be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.

		
			 
		

		 

		

			24

		

 

			
	
			
				 Section 3.17.
			Proxy Statement. None of the information included or incorporated by reference in the letter to the shareholders, notice of Company Shareholder Meeting, proxy statement and forms of proxy (collectively, the “Company Proxy Statement”), to be filed with the SEC in connection with the Company Shareholder Meeting, will, at the date it is first mailed to the Company’s shareholders or at the time of the Company Shareholder Meeting or at the time of any amendment or supplement thereof, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. Notwithstanding the foregoing, no representation or warranty is made by the Company with respect to any information supplied by Buyer expressly for inclusion or incorporation by reference in the Company Proxy Statement. The Company Proxy Statement will comply as to form in all material respects with the requirements of the Exchange Act.

			
	
			
				 Section 3.18.
			Fairness Opinion. The Company has received the written opinion of the Duff & Phelps, LLC and has provided a copy of such opinion to Buyer to the effect that, as of the date of this Agreement and based upon and subject to the qualifications and assumptions set forth therein, the Transaction Consideration is fair, from a financial point of view, to the holders of shares of Company Common Stock, and, as of the date of this Agreement, such opinion has not been withdrawn, revoked or modified.

			
	
			
				 Section 3.19.
			Brokers. Except for BDA Advisors, Inc., no broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company.

		
			 
		

			
	
			
				 Section 3.20.
			Trade Law Compliance.

			
	
			
				 (a)
			Company is in compliance with all applicable Customs & International Trade Laws, and  at no time in the past five (5) years has the Company committed any material violation of the applicable Customs & International Trade Laws, and there are no material unresolved disputes or Proceedings concerning any liability of the Company with respect to any such Customs & International Trade Laws. 

			
	
			
				 (b)
			The Company has not received written notice that it is currently subject to any civil or criminal investigation, litigation, audit, compliance assessment, Customs-focused assessment, penalty proceeding or assessment, liquidated damages proceeding or claim, forfeiture or forfeiture action, record-keeping inquiry, assessment of additional duty for failure to properly mark imported merchandise, notice to properly mark merchandise or return merchandise to Customs custody, claim for additional Customs duties or fees, denial order, suspension of export privileges, U.S. Government sanction, or any other action, proceeding or claim by a government agency (domestic or foreign) involving or otherwise relating to any alleged or actual violation of the Customs & International Trade Laws or relating to any alleged or actual non-payment of Customs duties, fees, taxes or other amounts owed pursuant to the applicable Customs & International Trade Laws, and in the past five (5) years, all Customs duties and fees, all 

		 

		

			25

		

 

	other import duties and fees owed for merchandise imported by it or imported on its behalf into the United States, other than those disclosed in Section 3.20 of the Disclosure Schedule, have been paid by or on behalf of the Company

			
	
			
				 (c)
			To the Company’s knowledge, the Company has not made or provided any material false statement or omission to any government agency (domestic or foreign) or to any purchaser of products, in connection with the exportation of commodities, software, or technical data ("items") or the importation of merchandise, the valuation or classification of imported merchandise or exported items, the duty treatment of imported merchandise, the eligibility of imported merchandise for favorable duty rates or other special treatment, country-of-origin marking, NAFTA Certificates, marking and labeling requirements for textiles and apparel, other statements or certificates concerning origin, quota or visa rights, export licenses or other export authorizations, Electronic Export Information (formerly referred to as Shippers Export Declaration Forms), U.S.-content requirements, licenses or other approvals required by any government or agency, or any other requirement relating to the applicable Customs & International Trade Laws.

			
	
			
				 (d)
			The Company has not, and, no director, officer, employee, agent, representative or other Person acting for or on behalf of the Company has directly or indirectly made, any contribution, gift, bribe, kickback or other payment, whether in the form of money, property or services, to a foreign official for an improper purpose, including (i) to obtain favorable treatment in securing business, (ii) to pay for favorable treatment for business secured, (iii) to obtain special concessions or for special concessions already obtained for or in respect of the Company or the Company, or (iv) or in any other manner or for any other purpose that violates the FCPA or other applicable anticorruption Laws.

		
			Except for those records listed on Section 3.20 of the Disclosure Schedule, Company’s records, assets, products, software, and technology (i) are not defense articles or defense services subject to the International Traffic in Arms Regulations, (ii) have an Export Control Classification Number of EAR99, (iii) do not require a license to be exported to any countries with which it has previously conducted business, including without limitation the Peoples Republic of China, or to be disclosed to such countries’ nationals, including without limitation Chinese nationals, and (iv) do not require a license to be disclosed to Buyer, its parent company, or their Chinese national employees.
		

		
			 
		

			
	
			
				Article IV
			

REPRESENTATIONS AND WARRANTIES OF BUYER

		
			Buyer represents and warrants to the Company that the statements contained in this Article IV are true and correct.
		

			
	
			
				 Section 4.01.
			Organization and Authority of Buyer. Buyer is a corporation duly organized, validly existing and in good standing under the Laws of California. All the issued and outstanding capital stock of Buyer is owned by Parent. Buyer has all necessary corporate power and authority to enter into this Agreement, to carry out its 

		 

		

			26

		

 

	obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery by Buyer of this Agreement, the performance by Buyer of its obligations hereunder and the consummation by Buyer of the transactions contemplated hereby have been duly authorized by all requisite corporate action on the part of Buyer. This Agreement has been duly executed and delivered by Buyer, and (assuming due authorization, execution and delivery by the Company) this Agreement constitutes a legal, valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

			
	
			
				 Section 4.02.
			No Conflicts; Consents. The execution, delivery and performance by Buyer of this Agreement, and the consummation of the transactions contemplated hereby, do not and will not: (a) result in a violation or breach of any provision of the charter and other organizational documents of Buyer or Parent; (b) result in a violation or breach of any provision of any Law or Governmental Order applicable to Buyer or Parent; or (c) require the consent, notice or other action by any Person under, conflict with, result in a violation or breach of, constitute a default under or result in the acceleration of any agreement to which Buyer or Parent is a party, except in the cases of clauses (b) and (c), where the violation, breach, conflict, default, acceleration or failure to give notice would not have a material adverse effect on Buyer’s ability to consummate the transactions contemplated hereby. No consent, approval, Permit, Governmental Order, declaration or filing with, or notice to, any Governmental Authority is required by or with respect to Buyer or Parent in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, except for such consent, approval and/or filings as may be required by CFIUS, under the HSR Act, by the Hong Kong Stock Exchange or under the SEHK Listing Rules and such consents, approvals, Permits, Governmental Orders, declarations, filings or notices which would not have a material adverse effect on Buyer’s ability to consummate the transactions contemplated hereby.

			
	
			
				 Section 4.03.
			Sufficiency of Funds. Buyer has sufficient cash on hand or other sources of immediately available funds to enable it to make payment of the Purchase Price and consummate the transactions contemplated by this Agreement.

		
			 
		

			
	
			
				 Section 4.04.
			Legal Proceedings.

			
	
			
				 (a)
			There are no actions, suits, claims, investigations or other legal proceedings pending or, to Buyer’s knowledge, threatened against or by Buyer or any Affiliate of Buyer which, individually or in the aggregate, would reasonably be expected to have a material adverse effect on Buyer’s ability to consummate the transactions contemplated hereby or otherwise impede, prevent or materially delay the consummation of the transactions contemplated by this Agreement.

		 

		

			27

		

 

			
	
			
				 (b)
			There are no outstanding Governmental Orders and no unsatisfied judgments, penalties or awards against or affecting (or, to Buyer’s Knowledge, investigations involving) Buyer or any Affiliate of Buyer which, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on Buyer’s ability to consummate the transactions contemplated hereby.

			
	
			
				 Section 4.05.
			Investment Purpose. Buyer is acquiring the Shares solely for its own account for investment purposes and not with a view to, or for offer or sale in connection with, any distribution thereof. Buyer acknowledges that the Shares are not registered under the Securities Act, or any state securities laws, and that the Shares may not be transferred or sold except pursuant to the registration provisions of the Securities Act or pursuant to an applicable exemption therefrom and subject to state securities laws and regulations, as applicable. Buyer is able to bear the economic risk of holding the Shares for an indefinite period (including total loss of its investment), and has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risk of its investment.

			
	
			
				 Section 4.06.
			Independent Investigation. Buyer has conducted its own independent investigation, review and analysis of the business, results of operations, prospects, condition (financial or otherwise) or assets of the Company, and acknowledges that it has been provided adequate access to the personnel, properties, assets, premises, books and records, and other documents and data of the Company and the Company for such purpose. Buyer acknowledges and agrees that: (a) in making its decision to enter into this Agreement and to consummate the transactions contemplated hereby, Buyer has relied solely upon its own investigation and the express representations and warranties of the Company set forth in Article III of this Agreement (including the related portions of the Disclosure Schedule); and (b) none of the Company, the Company or any other Person has made any representation or warranty as to the Company, the Company or this Agreement, except as expressly set forth in Article III of this Agreement (including the related portions of the Disclosure Schedule).

			
	
			
				 Section 4.07.
			Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Buyer. 

		
			 
		

			
	
			
				Article V
			

COVENANTS

			
	
			
				 Section 5.01.
			Conduct of Business Prior to the Closing. From the date hereof until the Closing, except as otherwise provided in this Agreement or consented to in writing by Buyer, the Company shall: (a) conduct the business of the Company in the ordinary course of business; and (b) use commercially reasonable efforts to maintain and preserve intact the current organization, business and reputation of the Company and to preserve the rights, goodwill and relationships of its Employees, customers, suppliers, regulators and others having business relationships with the Company. From the date 

		 

		

			28

		

 

	hereof until the Closing Date, except as consented to in writing by Buyer, the Company shall not cause or permit the Company to take any action that would cause any of the changes, events or conditions described in Section 3.06 to occur.  Without limiting the generality of the foregoing, from the date hereof until the Closing, except as consented to in writing by Buyer, the Company shall not (i) enter into or amend any employment, consulting, indemnification, severance or termination agreement with any Person, or any entry into any severance agreement or any labor, or union agreement or plan (or amendments of any such existing agreements or plan, (ii) establish, adopt, enter into or amend in any material respect any Benefit Plan except as required by applicable law, (iii) take any action to accelerate any rights or benefits, or make any material determinations not in the ordinary and usual course of business, under any Benefit Plan, (iv) hire as an employee, consultant or independent contractor any Person, or (v) make any change to the 2017 Fiscal Year Budget of the Company, a copy of which had been provided to Buyer.

		
			 
		

			
	
			
				 Section 5.02.
			No Solicitation.

			
	
			
				 (a)
			The Company shall not and shall not authorize or permit its directors, officers, employees, agents, advisors and investment bankers (with respect to any Person, the foregoing Persons are referred to herein as such Person’s “Representatives”) to, directly or indirectly, solicit, initiate or knowingly take any action to facilitate or encourage the submission of any Takeover Proposal or the making of any proposal that could reasonably be expected to lead to any Takeover Proposal, or, subject to (b), (i) conduct or engage in any discussions or negotiations with, disclose any non-public information relating to the Company to,  afford access to the business, properties, assets, books or records of the Company to, or knowingly assist, participate in, facilitate or encourage any effort by, any third party that is seeking to make, or has made, any Takeover Proposal, or (ii) enter into any agreement in principle, letter of intent, term sheet, acquisition agreement, merger agreement, option agreement, joint venture agreement, partnership agreement or other Contract relating to any Takeover Proposal (each, a “Company Acquisition Agreement”). Subject to (b) neither the Company Board nor any committee thereof shall fail to make, withdraw, amend, modify or materially qualify, in a manner adverse to Buyer, the Company Board Recommendation, or recommend a Takeover Proposal, fail to recommend against acceptance of any tender offer or exchange offer for the shares of Company Common Stock within ten Business Days after the commencement of such offer, or make any public statement inconsistent with the Company Board Recommendation, or resolve or agree to take any of the foregoing actions (any of the foregoing, a “Company Adverse Recommendation Change”).

			
	
			
				 (b)
			Notwithstanding Section 5.02(a), prior to the receipt of the Company Shareholder Approval, the Company Board, directly or indirectly through any Representative, may, subject to Section 5.02(c), (i) participate in negotiations or discussions with any third party that has made (and not withdrawn) a bona fide, unsolicited Takeover Proposal in writing that the Company Board believes in good faith, after consultation with outside legal counsel and its other advisors, constitutes or would 

		 

		

			29

		

 

	reasonably be expected to result in a Superior Proposal, (ii) thereafter furnish to such third party non-public information relating to the Company or any of its Subsidiaries pursuant to an executed confidentiality agreement on terms no less favorable to the Company than the Buyer Confidentiality Agreement (a copy of which confidentiality agreement shall be promptly (in all events within 24 hours) provided for informational purposes only to Buyer), (iii) following receipt of and on account of a Superior Proposal, make a Company Adverse Recommendation Change, and/or (iv) take any action that any court of competent jurisdiction orders the Company to take (which order remains unstayed), but in each case referred to in the foregoing clauses (i) through (iv), only if the Company Board determines in good faith, after consultation with outside legal counsel, that the failure to take such action would reasonably be expected to cause the Company Board to be in breach of its fiduciary duties under applicable Law. Nothing contained herein shall prevent the Company Board from disclosing to the Company’s shareholders a position contemplated by Rule 14d-9 and Rule 14e-2(a) promulgated under the Exchange Act with regard to a Takeover Proposal, if the Company determines, after consultation with outside legal counsel, that failure to disclose such position would constitute a violation of applicable Law.

			
	
			
				 (c)
			The Company Board shall not take any of the actions referred to in clauses (i) through (iv) of Section 5.02(b) unless the Company shall have delivered to Buyer a prior written notice advising Buyer that it intends to take such action. The Company shall notify Buyer promptly (but in no event later than 48 hours) after it obtains knowledge of the receipt by the Company (or any of its Representatives) of any Takeover Proposal, any inquiry that would reasonably be expected to lead to a Takeover Proposal, any request for non-public information relating to the Company or for access to the business, properties, assets, books or records of the Company by any third party. In such notice, the Company shall identify the third party making, and details of the material terms and conditions of, any such Takeover Proposal, indication or request. The Company shall keep Buyer fully informed, on a current basis, of the status and material terms of any such Takeover Proposal, indication or request, including any material amendments or proposed amendments as to price and other material terms thereof. The Company shall provide Buyer with at least 48 hours prior notice of any meeting of the Company Board (or such lesser notice as is provided to the members of the Company Board) at which the Company Board is reasonably expected to consider any Takeover Proposal. The Company shall promptly provide Buyer with a list of any non-public information concerning the Company’s business, present or future performance, financial condition or results of operations, provided to any third party, and, to the extent such information has not been previously provided to Buyer, copies of such information.

		
			 
		

			
	
			
				 (d)
			Except as set forth in this Section 5.02(d) the Company Board shall not make any Company Adverse Recommendation Change or enter into a Company Acquisition Agreement. Notwithstanding the foregoing, at any time prior to the receipt of the Company Shareholder Approval, the Company Board may make a Company Adverse Recommendation Change or enter into a Company Acquisition Agreement (provided that the Company shall concurrently pay to Buyer the Termination Fee as provided in Section 7.05(b)), if: (i) the Company promptly notifies Buyer, in writing, at least three 

		 

		

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	Business Days (the “Notice Period”) before making a Company Adverse Recommendation Change or entering into a Company Acquisition Agreement, of its intention to take such action with respect to a Superior Proposal, which notice shall state expressly that the Company has received a Takeover Proposal that the Company Board intends to declare a Superior Proposal and that the Company Board intends to make a Company Adverse Recommendation Change and/or the Company intends to enter into a Company Acquisition Agreement; (ii) the Company attaches to such notice the most current version of the proposed agreement (which version shall be updated on a prompt basis) and the identity of the third party making such Superior Proposal; (iii) the Company shall, and shall use its reasonable best efforts to cause its Representatives to, during the Notice Period, negotiate with Buyer in good faith to make such adjustments in the terms and conditions of this Agreement so that such Takeover Proposal ceases to constitute a Superior Proposal, if Buyer, in its discretion, proposes to make such adjustments (it being agreed that in the event that, after commencement of the Notice Period, there is any material revision to the terms of a Superior Proposal, including, any revision in price, the Notice Period shall be extended, if applicable, to ensure that at least three Business Days remains in the Notice Period subsequent to the time the Company notifies Buyer of any such material revision (it being understood that there may be multiple extensions)); and (iv) the Company Board determines in good faith, after consulting with outside legal counsel and its other advisors, that such Takeover Proposal continues to constitute a Superior Proposal after taking into account any adjustments made by Buyer during the Notice Period in the terms and conditions of this Agreement.

			
	
			
				 Section 5.03.
			Company Shareholder Meeting; Preparation of Proxy Materials.

			
	
			
				 (a)
			Subject to the terms set forth in this Agreement, the Company shall take all actions necessary to duly call, give notice of, convene and hold the Company Shareholder Meeting as soon as reasonably practicable after the date of this Agreement but no later than 150 days after the date hereof, and, in connection therewith, the Company shall mail the Company Proxy Statement to the holders of Company Common Stock in advance of such meeting. Except to the extent that the Company Board shall have effected a Company Adverse Recommendation Change as permitted by Section 5.02(b) hereof, the Company Proxy Statement shall include the Company Board Recommendation. Subject to Section 5.02 hereof, the Company shall use reasonable best efforts to (i) solicit from the holders of Common Stock proxies in favor of the approval of the Transaction and (ii) take all other actions necessary or advisable to secure the Company Shareholder Approval. The Company shall keep Buyer updated with respect to proxy solicitation results as requested by the Buyer. Once the Company Shareholder Meeting has been called and noticed, the Company shall not postpone or adjourn the Company Shareholder Meeting without the consent of Buyer (other than (i) in order to obtain a quorum of its shareholders or (ii) as reasonably determined by the Company to comply with applicable Law). Notwithstanding anything contained herein to the contrary, the Company shall not be required to hold the Company Shareholder Meeting if this Agreement is terminated before the meeting is held.

		 

		

			31

		

 

			
	
			
				 (b)
			In connection with the Company Shareholder Meeting, as soon as reasonably practicable following the date of this Agreement the Company shall prepare and file the Company Proxy Statement with the SEC. Buyer and the Company will cooperate and consult with each other in the preparation of the Company Proxy Statement. Without limiting the generality of the foregoing, Buyer will furnish the Company the information relating to it required by the Exchange Act and the rules and regulations promulgated thereunder to be set forth in the Company Proxy Statement. The Company shall not file the Company Proxy Statement, or any amendment or supplement thereto, without providing Buyer a reasonable opportunity to review and comment thereon (which comments shall be reasonably considered by the Company). The Company shall use its reasonable best efforts to resolve, and each party agrees to consult and cooperate with the other party in resolving, all SEC comments with respect to the Company Proxy Statement as promptly as practicable after receipt thereof and to cause the Company Proxy Statement in definitive form to be cleared by the SEC and mailed to the Company’s shareholders as promptly as reasonably practicable following filing with the SEC.  The Company agrees to consult with Buyer prior to responding to SEC comments with respect to the preliminary Company Proxy Statement.  Each of Buyer and the Company agree to correct any information provided by it for use in the Company Proxy Statement which shall have become false or misleading and the Company shall promptly prepare and mail to its shareholders an amendment or supplement setting forth such correction. The Company shall as soon as reasonably practicable (i) notify Buyer of the receipt of any comments from the SEC with respect to the Company Proxy Statement and any request by the SEC for any amendment to the Company Proxy Statement or for additional information and (ii) provide Buyer with copies of all written correspondence between the Company and its Representatives, on the one hand, and the SEC, on the other hand, with respect to the Company Proxy Statement.

		
			 
		

			
	
			
				 Section 5.04.
			Deposit.  Prior to the execution of this Agreement, Buyer has paid, the Deposit in cash to the Escrow Agent to be held in the Escrow Account until such time as it is applied to the Purchase Price at the Closing or returned to Buyer or exchanged for Common Stock in accordance with Section 7.06. Any interest earned on the Deposit shall be the property of Buyer and shall be returned to Buyer at the Closing or any termination of this Agreement pursuant to Article 7.

			
	
			
				 Section 5.05.
			Access to Information.  Upon reasonable notice, and except as may otherwise be prohibited by applicable Law, the Company shall afford to Buyer and its Representatives, reasonable access during normal business hours during the period prior to the Closing to all their respective properties, books, contracts, commitments, personnel and records and, during such period, the Company shall furnish promptly to Buyer (a) a copy of each report, schedule, registration statement and other document filed by it during such period pursuant to the requirements of federal or state securities Laws and (b) all other information concerning its business, properties and personnel as Buyer may reasonably request; provided, however, that the foregoing shall not require the Company to permit any inspection, or to disclose any information, that in the reasonable judgment of the Company would result in the disclosure of any trade secrets of third parties or violate any of its obligations with respect to confidentiality. Without limiting 

		 

		

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	the generality of the foregoing, as soon as practicable after the date hereof the Company shall provide reasonable access to the outside auditors of the Buyer for a site visit of the Company and provide any and all information and assistance reasonably requested by the Buyer in order for such auditors to complete the financial audit of the Company as required by the Hong Kong Stock Exchange and the SEHK Listing Rules.

			
	
			
				 Section 5.06.
			Confidentiality. Buyer and the Company shall comply with, and shall cause their respective Representatives to comply with, all of their respective obligations under the Mutual Nondisclosure Agreement, dated October 7, 2013 between Buyer and the Company (the “Buyer Confidentiality Agreement”), which shall survive the termination of this Agreement in accordance with the terms set forth therein.

			
	
			
				 Section 5.07.
			Post-Closing Board Composition Matters. At least two Business Days prior to the Closing, the Company shall deliver to Buyer (a) the written resignation, effective as of the Closing Date, of the current director of the Company who will not be on the Post-Closing Board, (b) resolutions of the Company Board reflecting any actions taken by the Company Board in connection with the Post-Closing Board Composition, which shall include increasing the size of the Company Board to nine members and electing the five Buyer Nominees to the Post-Closing Board, and (c) resolutions of the Company Board adopting the Bylaw Amendment.

		
			 
		

			
	
			
				 Section 5.08.
			Post-Closing Board Corporate Governance Matters.

			
	
			
				 (a)
			Following the Closing, the Post-Closing Board shall adopt such policies and procedures as necessary to ensure that any transactions between Buyer or its Affiliates, on the one hand, and the Company and its subsidiaries, on the other hand, will be approved by the Post-Closing Board consistent with their fiduciary duty to all of the Company’s shareholders and in compliance with requirements of the CBCA.  The Post-Closing Board shall ensure that the Company following the Closing properly discloses, pursuant to the rules and regulations of the SEC, any related party transactions.

			
	
			
				 (b)
			Following the Closing, the Post-Closing Board shall adopt such policies and procedures as necessary to ensure that (i) the members of the audit committee of the Post-Closing Board satisfy the requirements of Rule 10A-3 under the Exchange Act and the applicable independence and audit committee composition rules of NYSE MKT, and (ii) the Company’s independent public auditors will continue to be appointed by the audit committee of the Post-Closing Board in compliance with the requirements of the NYSE MKT and SEC, including Rule 10A-3 under the Exchange Act.

			
	
			
				 (c)
			Following the Closing, the Post-Closing Board shall adopt such policies and procedures as necessary to ensure that the appointment or removal of the principal accounting officer (as such term is defined by the SEC) of the Company is approved by a majority of members of the Post-Closing Board, which majority shall include a majority of the members of the audit committee that meets the requirements of Rule 10A-3 under the Exchange Act in furtherance of their responsibilities in oversight of the Company’s 

		 

		

			33

		

 

	financial reporting.  The Parties agree that the principal accounting officer does not need to also be the Company’s principal financial officer.

			
	
			
				 Section 5.09.
			[Intentionally Omitted.]

			
	
			
				 Section 5.10.
			Management.  The management of the Company on the Closing Date shall continue as the management of the Company following the Closing Date, subject to such subsequent election or removal of such members of management as are approved by the Post-Closing Board or as otherwise provided pursuant to Section 5.08(c).  Following the Closing Date, the Company shall continue to honor the terms and agreements in its employment agreements with management.  The Company will use its reasonable efforts to maintain the continuity of its management as of the Closing Date through June 30, 2017.

		
			 
		

			
	
			
				 Section 5.11.
			Director and Officer Indemnification and Insurance.

			
	
			
				 (a)
			Buyer agrees that all rights to indemnification, advancement of expenses and exculpation by the Company now existing in favor of each Person who is now, or has been at any time prior to the date hereof or who becomes prior to the Closing Date, an officer or director of the Company, as provided in the articles of incorporation or by-laws of the Company, in each case as in effect on the date of this Agreement, shall survive the Closing Date and shall continue in full force and effect in accordance with their respective terms.

			
	
			
				 (b)
			The Company shall, and Buyer shall cause the Company to (i) maintain in effect for a period of three years after the Closing Date, if available, the current policies of directors’ and officers’ liability insurance maintained by the Company immediately prior to the Closing Date (provided that the Company may substitute therefor policies, of at least the same coverage and amounts and containing terms and conditions that are not less advantageous to the directors and officers of the Company when compared to the insurance maintained by the Company as of the date hereof), or (ii) obtain as of the Closing Date “tail” insurance policies with a claims period of six years from the Closing Date with at least the same coverage and amounts, and containing terms and conditions that are not less advantageous to the directors and officers of the Company, in each case with respect to claims arising out of or relating to events which occurred on or prior to the Closing Date (including in connection with the transactions contemplated by this Agreement).

			
	
			
				 (c)
			The obligations of Buyer and the Company under this Section 5.11(c) shall not be terminated or modified in such a manner as to adversely affect any director or officer to whom this Section 5.11(c) applies without the consent of such affected director or officer (it being expressly agreed that the directors and officers to whom this Section 5.11(c) applies shall be third-party beneficiaries of this Section 5.11(c), each of whom may enforce the provisions of this Section 5.11(c)).

		 

		

			34

		

 

			
	
			
				 (d)
			In the event that following the Closing the Company or any of its successors or assigns (i) consolidates with or merges into any other Person and shall not be the continuing or surviving corporation or entity in such consolidation or merger or (ii) transfers all or substantially all of its properties and assets to any Person, then, and in either such case, proper provision shall be made so that the successors and assigns of the Company shall assume all of the obligations set forth in this Section 5.11(d).

			
	
			
				 Section 5.12.
			Operations Following Closing.

			
	
			
				 (a)
			The headquarters of the Company shall remain in Colorado following the Closing for at least three years.  The Post-Closing Board shall take such efforts as are necessary to ensure that absent any material change, the Company’s core technology will remain in the United States and the Company’s primary research and development efforts continuing to be conducted at the Company’s Colorado facility, in each case for at least three years.

			
	
			
				 (b)
			Following the Closing, the Company shall continue to support its current customers and to seek new customers on a world-wide basis for its products, under the oversight of the Post-Closing Board.

			
	
			
				 (c)
			During the period commencing at the Closing and ending on the date which is 36 months from the Closing (or if earlier, the date of the employee’s termination of employment with the Company), the Company shall provide each Employee (other than those Employees with employment agreements with the Company) who remains employed immediately after the Closing and who signs an Employee Agreement (“Company Continuing Employee”) with: (i) base salary or hourly wages which are no less than the base salary or hourly wages provided by the Company immediately prior to the Closing; (ii) target bonus opportunities, if any, which are no less than the target bonus opportunities provided by the Company immediately prior to the Closing, provided that, at the discretion of Buyer, the Company may provide cash compensation in lieu of equity-based compensation; and (iii) retirement and welfare benefits that are no less favorable in the aggregate than those provided by the Company immediately prior to the Closing; provided, however, that nothing herein shall confer or be construed to confer on any such employee any right to continue in the employment of the Company or interfere in any way with the right of the Company to terminate the employment of such Company Continuing Employee at any time (with or without cause) or to modify such employee’s compensation or benefits at any time, subject to the terms of any applicable Benefits Plans or existing employment contracts. This Section 5.12(c) shall operate exclusively for the benefit of the parties to this Agreement and not for the benefit of any other Person, including, without limitation, any current, former or retired employee of the Company.

			
	
			
				 (d)
			From the date hereof until the Closing, the Company shall use commercially reasonable efforts to have each Employee sign an Employee Agreement, in form agreed to by the Company and Buyer.

			
	
			
				 Section 5.13.
			Governmental Approvals and Other Third-party Consents.

		 

		

			35

		

 

			
	
			
				 (a)
			Each party hereto shall, as promptly as possible, use its reasonable best efforts to obtain, or cause to be obtained, all consents, authorizations, orders and approvals from all Governmental Authorities that may be or become necessary for its execution and delivery of this Agreement and the performance of its obligations pursuant to this Agreement including approval by CFIUS. Each party shall cooperate fully with the other party in promptly seeking to obtain all such consents, authorizations, orders and approvals. The parties hereto shall not willfully take any action that will have the effect of delaying, impairing or impeding the receipt of any required consents, authorizations, orders and approvals. Notwithstanding the foregoing, neither party hereto shall be required to agree to any divestitures, licenses, hold separate arrangements, mitigation agreements or similar matters, including covenants affecting business operating practices, if such divestitures, licenses, arrangements, agreements or similar matters, individually or in the aggregate, would reasonably be expected to have a material adverse effect on the business, assets and liabilities (contingent or otherwise), taken together, or financial condition of either the Company or Buyer.

			
	
			
				 (b)
			At the date that the parties determine is 45 days prior to the estimated Closing Date, the parties shall determine pursuant to the rules under the HSR Act the value of Common Stock to be held by Buyer as a result of the Transaction.  If required by the HSR Act based on the value of such Common Stock, each party hereto agrees to make as promptly as practicable an appropriate filing pursuant to the HSR Act with respect to the transactions contemplated by this Agreement and to supply as promptly as practicable to the appropriate Governmental Authority any additional information and documentary material that may be requested pursuant to the HSR Act.  If filings are required to be made pursuant to the HSR Act, each party shall be responsible for one half of the HSR Act filing fee pursuant to Section 8.01 of this Agreement.

			
	
			
				 (c)
			The Company and Buyer shall use commercially reasonable efforts to give all notices to, and obtain all consents from, all third parties that are described in Section 3.04 of the Disclosure Schedule;  provided, however, that the Company shall not be obligated to pay any consideration therefor to any third party from whom consent or approval is requested.

		
			 
		

			
	
			
				 Section 5.14.
			Reasonable Efforts to Satisfy Closing Conditions. From the date hereof until the Closing, each party hereto shall use commercially reasonable efforts to take such actions as are necessary to expeditiously satisfy the closing conditions set forth in Article VI hereof.  In connection with the foregong under this Section 5.14,  subject to the terms set forth in this Agreement, Buyer shall, and shall cause Parent to, take all actions necessary to duly call, give notice of, convene and hold a general meeting of Parent’s shareholders for the purpose of obtaining the Parent Shareholder Approval as soon as reasonably practicable after the date of this Agreement but no later than 150 days after the date hereof, and, in connection therewith, Parent shall take such actions as are required by applicable law and the rules of the Hong Kong Stock Exchange to secure the Parent Shareholder Approval.

		 

		

			36

		

 

			
	
			
				 Section 5.15.
			Supplement to Disclosure Schedule. From time to time prior to the Closing, the Company shall have the right (but not the obligation) to supplement or amend the Disclosure Schedule hereto with respect to any matter hereafter arising or of which it becomes aware after the date hereof (each a “Schedule Supplement”). Any disclosure in any such Schedule Supplement shall not be deemed to have cured any inaccuracy in or breach of any representation or warranty contained in this Agreement, including for purposes of the termination rights contained in this Agreement or of determining whether or not the conditions set forth in Section 6.02 have been satisfied.

			
	
			
				 Section 5.16.
			Public Announcements. The initial press releases by the Company and Buyer respectively with respect to this Agreement and the transactions contemplated hereby shall be mutually agreed to by the Company and Buyer and shall be issued as soon as practical following the execution of this Agreement and outside of NYSE MKT and Hong Kong Stock Exchange trading hours. Thereafter, unless otherwise required by applicable Law or NYSE MKT and Hong Kong Stock Exchange requirements (based upon the reasonable advice of counsel), no party to this Agreement shall make any public announcements in respect of this Agreement or the transactions contemplated hereby or otherwise communicate with any news media without the prior written consent of the other party (which consent shall not be unreasonably withheld or delayed), and the parties shall cooperate as to the timing and contents of any such announcement.  Buyer and Company acknowledge (i) that a copy of this Agreement will be included, together with the initial press release of the Company, on a report on Form 8-K filed by the Company with the SEC no later than four Business Days following execution of this Agreement, (ii) that the Buyer will make a short announcement as soon as practical following the execution of this Agreement in connection with the suspension of trading of Buyer’s stock on the Hong Kong Stock Exchange, and (iii) that as soon as practical after the announcement described in clause (ii) above, Buyer will issue a press release filed with and approved by the Hong Kong Stock Exchange.

			
	
			
				 Section 5.17.
			Further Assurances. Following the Closing, each of the parties hereto shall, and shall cause their respective Affiliates to, execute and deliver such additional documents, instruments, conveyances and assurances, and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement. 

		
			 
		

			
	
			
				Article VI
			

CONDITIONS TO CLOSING

			
	
			
				 Section 6.01.
			Conditions to Obligations of All Parties. The obligations of each party to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment, at or prior to the Closing, of each of the following conditions:

			
	
			
				 (a)
			Each of the Company Shareholder Approval and the Buyer Approval shall have been obtained and notice of such approval provided to the other party.

		 

		

			37

		

 

			
	
			
				 (b)
			The Company shall have received all consents, authorizations, orders and approvals from the Governmental Authorities referred to in Section 3.04 and Buyer shall have received all consents, authorizations, orders and approvals from the Governmental Authorities referred to in Section 4.02 in each case, in form and substance reasonably satisfactory to Buyer and the Company, and no such consent, authorization, order and approval shall have been revoked.

			
	
			
				 (c)
			No suit, action or other proceeding shall be pending before any Government Authority in which it sought to restrain or prohibit the transactions contemplated hereby or that could reasonably be expected to have a Material Adverse Effect. No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Governmental Order which is in effect and has the effect of making the transactions contemplated by this Agreement illegal, otherwise restraining or prohibiting consummation of such transactions or causing any of the transactions contemplated hereunder to be rescinded following completion thereof.

		
			 
		

			
	
			
				 Section 6.02.
			Conditions to Obligations of Buyer. The obligations of Buyer to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or Buyer’s waiver, at or prior to the Closing, of each of the following conditions:

			
	
			
				 (a)
			The representations and warranties of the Company contained in Article III, disregarding all qualifications and exceptions contained therein relating to materiality or Material Adverse Effect or words of similar import, shall be true and correct in all respects as of the Closing Date with the same effect as though made at and as of such date (except those representations and warranties that address matters only as of a specified date, which shall be true and correct in all respects as of that specified date), except where the failure of such representations and warranties to be true and correct would not, individually or in the aggregate, have or reasonably be expected to have a Material Adverse Effect.

			
	
			
				 (b)
			the Company shall have duly performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement to be performed or complied with by it prior to or on the Closing Date.

			
	
			
				 (c)
			Buyer shall have received a certificate, dated the Closing Date and signed by a duly authorized officer of the Company, that each of the conditions set forth in (a) and (b) have been satisfied.

			
	
			
				 (d)
			Buyer shall have received a certificate of the Secretary or an Assistant Secretary (or equivalent officer) of the Company certifying (i) that attached thereto are true and complete copies of all resolutions adopted by the Company Board authorizing the execution, delivery and performance of this Agreement and the consummation of the transactions set forth herein, including, but not limited to, election of the Buyer Nominees, and that all such resolutions are in full force and effect and are all the 

		 

		

			38

		

 

	resolutions adopted in connection with the transactions contemplated hereby, and (ii) receipt of the Company Shareholder Approval.

			
	
			
				 (e)
			The Company shall have delivered, or caused to be delivered, to Buyer stock certificates evidencing the Shares, free and clear of Encumbrances.

			
	
			
				 (f)
			The Company shall have delivered to Buyer an executed Registration Rights Agreement, substantially in the form attached hereto as Exhibit A.

			
	
			
				 (g)
			The Company shall have taken such actions so that the Buyer Nominees shall have been appointed to the Post-Closing Board, all in accordance with the organizational documents of the Company and in compliance with all applicable Laws, including the Securities Act and the Exchange Act.

			
	
			
				 (h)
			Buyer shall have received from Sherman & Howard L.L.C., counsel to the Company, an opinion dated as of the Closing Date substantially in the form attached hereto as Exhibit D.

			
	
			
				 (i)
			The Company Board shall have adopted the Amendment to Bylaws of the Company substantially in the form attached hereto as Exhibit E to be effective at Closing (the “Bylaw Amendment”). 

			
	
			
				 (j)
			The issued shares of Common Stock remaining listed for trading on the NYSE MKT at all times from the date of this Agreement and up to the date of fulfillment or waiver (the “Fulfillment Date”) of the last in time to be fulfilled of the Closing Conditions in this Article VI (other than this condition), save for:

			
	
			
				 A.
			any suspension or suspensions not exceeding 15 trading days of the NYSE MKT in aggregate in the preceding 12 months for whatever cause; or

			
	
			
				 B.
			any suspension in connection with the clearance of any public announcements or circulars in connection with this Agreement or the transactions contemplated hereunder; and

			
	
			
				 C.
			no written notification being received on or before the Fulfilment Date from NYSE MKT to the effect that the trading of the Common Stock will or may be withdrawn or objected to as a result of Closing or in connection with the terms of this Agreement.

		
			 
		

			
	
			
				 Section 6.03.
			Conditions to Obligations of the Company. The obligations of the Company to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or the Company’s waiver, at or prior to the Closing, of each of the following conditions:

			
	
			
				 (a)
			The representations and warranties of Buyer contained in Article IV, disregarding all qualifications and exceptions contained therein relating to materiality or Material Adverse Effect or words of similar import, shall be true and correct in all 

		 

		

			39

		

 

	respects as of the Closing Date with the same effect as though made at and as of such date (except those representations and warranties that address matters only as of a specified date, which shall be true and correct in all respects as of that specified date), except where the failure of such representations and warranties to be true and correct would not, individually or in the aggregate, have or reasonably be expected to have a material adverse effect on Buyer’s ability to consummate the transactions contemplated hereby.

			
	
			
				 (b)
			Buyer shall have duly performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement to be performed or complied with by it prior to or on the Closing Date.

			
	
			
				 (c)
			the Company shall have received a certificate, dated the Closing Date and signed by a duly authorized officer of Buyer, that each of the conditions set forth in (a) and (b) have been satisfied.

			
	
			
				 (d)
			the Company shall have received a certificate of the Secretary or an Assistant Secretary (or equivalent officer) of Buyer certifying that attached thereto are true and complete copies of all resolutions adopted by the board of directors of Buyer authorizing the execution, delivery and performance of this Agreement and the consummation of the Transaction and that all such resolutions are in full force and effect and are all the resolutions adopted in connection with the transactions contemplated hereby.

			
	
			
				 (e)
			Buyer shall have delivered to the Company cash in an amount equal to the Closing Payment by wire transfer in immediately available funds, to an account or accounts designated at least two Business Days prior to the Closing Date by the Company in a written notice to Buyer.

		
			 
		

			
	
			
				Article VII
			

TERMINATION

			
	
			
				 Section 7.01.
			Termination By Mutual Consent. This Agreement may be terminated at any time prior to the Closing Date (notwithstanding any receipt of Company Shareholder Approval) by mutual written consent of Buyer and the Company.

			
	
			
				 Section 7.02.
			Termination By Either Buyer or the Company. This Agreement may be terminated by either Buyer or the Company at any time prior to the Closing Date (notwithstanding receipt of the Company Shareholder Approval):

			
	
			
				 (a)
			if the Company Shareholder Approval has not been received on or prior to 180 days after the date hereof, which may be extended by mutual consent of the parties hereto (the “End Date”); provided, however, that the right to terminate this Agreement pursuant to this Section 7.02(a) shall not be available to any party whose breach of any representation, warranty, covenant or agreement set forth in this Agreement has been the 

		 

		

			40

		

 

	cause of, or resulted in, the failure of the Company Shareholder Approval to be received on or before the End Date;

			
	
			
				 (b)
			if the Buyer Approval has not been received on or prior to the End Date; provided, however, that the right to terminate this Agreement pursuant to this Section 7.02(b) shall not be available to any party whose breach of any representation, warranty, covenant or agreement set forth in this Agreement has been the cause of, or resulted in, the failure of the Buyer Approval to be received on or before the End Date;

			
	
			
				 (c)
			if any Governmental Authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any Law or Governmental Order making illegal, permanently enjoining or otherwise permanently prohibiting the consummation of the Transaction or the other transactions contemplated by this Agreement, and such Law or Order shall have become final and nonappealable; provided, however, that the right to terminate this Agreement pursuant to this Section 7.02(c) shall not be available to any party whose breach of any representation, warranty, covenant or agreement set forth in this Agreement has been the cause of, or resulted in, the issuance, promulgation, enforcement or entry of any such Law or Governmental Order;

			
	
			
				 (d)
			if approval from CFIUS for this Transaction has not been received on or prior to the End Date; or

			
	
			
				 (e)
			if notification is required to be filed pursuant to the HSR Act and the waiting period with respect to such notification has not expired or early termination for such waiting period has not been received by the End Date.

			
	
			
				 (f)
			if the condition to Closing set forth in Section 6.01(c) is not reasonably capable of being satisfied or on or prior to the End Date; provided, however, that the right to terminate this Agreement pursuant to this Section 7.02(f) shall not be available to any party whose breach of any representation, warranty, covenant or agreement set forth in this Agreement has been the cause of, or resulted in, such failure. 

		
			 
		

			
	
			
				 Section 7.03.
			Termination By Buyer. This Agreement may be terminated by Buyer at any time prior to the Closing Date (notwithstanding receipt of the Company Shareholder Approval):

			
	
			
				 (a)
			if (i) a Company Adverse Recommendation Change shall have occurred, (ii) the Company shall have entered into, or publicly announced its intention to enter into, a Company Acquisition Agreement (other than an Acceptable Confidentiality Agreement), (iii) the Company shall have breached or failed to perform in any material respect any of the covenants and agreements set forth in Section 5.02 or failed to call or hold the Company Shareholder Meeting by the End Date, (iv) a tender offer or exchange offer relating to Company Common Stock shall have been commenced by a Person unaffiliated with Buyer and the Company shall not have sent to its shareholders pursuant to Rule 14e-2 under the Securities Act, within ten Business Days after such tender offer or exchange offer is first published, sent or given, a statement reaffirming the Company 

		 

		

			41

		

 

	Board Recommendation and recommending that shareholders reject such tender offer or exchange offer, or (v) the Company or the Company Board (or any committee thereof) shall publicly announce its intentions to do any of actions specified in this Section 7.03(a); or

			
	
			
				 (b)
			if there shall have been a breach of any representation, warranty, covenant or agreement on the part of the Company set forth in this Agreement, which breach would give rise to the failure of a condition to the Closing set forth in Section 6.02(a) or Section 6.02(b), as applicable, and such breach is not cured by the Company within 20 days following receipt of written notice of such breach from Buyer, or if a condition to Closing set forth in Section 6.02(a) and Section 6.02(b) is not reasonably capable of being satisfied or on or prior to the End Date.

			
	
			
				 Section 7.04.
			Termination by the Company. This Agreement may be terminated by the Company at any time prior to the Closing Date (notwithstanding, in the case of (b) immediately below, receipt of the Company Shareholder Approval):

			
	
			
				 (a)
			if prior to the receipt of the Company Shareholder Approval, the Company Board authorizes the Company, in full compliance with the terms of this Agreement, including Section 5.02 hereof, to enter into a Company Acquisition Agreement (other than an Acceptable Confidentiality Agreement) in respect of a Superior Proposal; provided that in the event of such termination, the Company substantially concurrently enters into such Company Acquisition Agreement;

			
	
			
				 (b)
			if there shall have been a breach of any representation, warranty, covenant or agreement on the part of Buyer set forth in this Agreement, which breach would give rise to the failure of a condition to the Closing set forth in Section 6.03(a) or Section 6.03(b), as applicable, and such breach is not cured by the Buyer within 20 days following receipt of written notice of such breach from the Company, or if a condition to Closing set forth in Section 6.03(a) or Section 6.03(b), is not reasonably capable of being satisfied or on or prior to the End Date.

		
			 
		

			
	
			
				 Section 7.05.
			Notice of Termination; Effect of Termination.

			
	
			
				 (a)
			The party desiring to terminate this Agreement pursuant to Section 7.02, Section 7.03 or Section 7.04 shall deliver written notice of such termination to the other party hereto specifying with particularity the reason for such termination, and any such termination shall be effective immediately upon delivery of such written notice to the other party. If this Agreement is terminated pursuant to Article VII, it will become void and of no further force and effect, with no liability on the part of any party to this Agreement (or any shareholder, director, officer, employee, agent or Representative of such party) to any other party hereto, except (i) with respect to Section 5.06, this Section 7.05, Section 7.06 and Article VIII (and any related definitions contained in any such Sections or Article), which shall remain in full force and effect and (ii) with respect to any liabilities or damages incurred or suffered by a party, to the extent such liabilities or 

		 

		

			42

		

 

	damages were the result of fraud or the breach by another party of any of its representations, warranties, covenants or other agreements set forth in this Agreement.

			
	
			
				 (b)
			In the event that this Agreement is terminated:

			
	
			
				 (i)
			by Buyer pursuant to Section 7.03(a), or

			
	
			
				 (ii)
			by Buyer pursuant to Section 7.03(b) and all conditions to Closing set forth in Sections 6.01 and 6.03 have been satisfied or duly waived, other than conditions which, by their nature, are to be satisfied on the Closing Date and other than Sections 6.01 (a) and (b) to the extent such actions have not yet been completed or occurred, or

			
	
			
				 (iii)
			by the Company pursuant to Section 7.04(a), or

			
	
			
				 (iv)
			by Buyer or the Company pursuant to Section 7.02(a) and (A) prior to the time of such termination a Takeover Proposal had been publicly announced or otherwise communicated to the Company and (B) within six (6) months of such termination, the Company enters into a binding agreement with respect to, or consummates, the transaction contemplated by such Takeover Proposal

		
			then the Company shall pay to Buyer an amount in cash equal to $3,000,000 (the “Termination Fee”), which shall be payable within five Business Days after such termination (except that in the case of clause (iv) above, the payment of the Termination Fee shall be made upon the earlier of the consummation of such transaction and the 90th day following the entering into by the Company of the binding agreement described therein) by wire transfer of immediately available funds.
		

		
			 
		

			
	
			
				 Section 7.06.
			Treatment of Deposit Following Termination.  

			
	
			
				 (a)
			If this Agreement is terminated by either Buyer or the Company pursuant to Section 7.01, as a condition to such termination the parties shall have determined whether the Deposit is to be returned by the Company to Buyer or whether the Deposit shall be retained by the Company in exchange for the Company’s issuance of a shares of Common Stock equal to the amount of the Deposit divided by the Exchange Price (the “Conversion Shares”), and delivery by the Company to the Buyer of an executed Registration Rights Agreement substantially in the form attached hereto as Exhibit A with respect to the Conversion Shares, which issuance of Conversion Shares and delivery of the Registration Rights Agreement shall be effected  no later than five Business Days following the date of termination of the Agreement.  As used in this Section 7.06, the “Exchange Price” shall mean (i) $0.60 per share of Common Stock if the VWAP Price is equal to or less than $0.60 per share, (ii) the VWAP Price per share of Common Stock if the VWAP Price is greater than $0.60 per share and less than $0.72 per share, or (iii) $0.72 per share of Common Stock if the VWAP Price is equal to or greater than $0.72, in each case as adjusted for any stock split, stock reverse split, stock dividend, or similar transactions that took place between the date hereof and the date of such termination.  As 

		 

		

			43

		

 

	used herein, “VWAP Price” shall mean the volume weighed average of the closing per share market price of Common Stock, as reported on the NYSE MKT, for the 90-day period immediately preceding the date of the termination of the Agreement.

			
	
			
				 (b)
			If this Agreement is terminated:

			
	
			
				 (i)
			by the Company or Buyer pursuant to Section 7.02(a),  Section 7.02(b),  Section 7.02(c) or Section 7.02(f), or 

			
	
			
				 (ii)
			by Buyer pursuant to Section 7.03, or 

			
	
			
				 (iii)
			by the Company pursuant to Section 7.04 (unless subject to clause (d) below), 

		
			then the Escrow Agent shall return the Deposit plus interest to Buyer (by wire transfer of immediately available funds) within five Business Days following the date of such termination.
		

		
			 
		

			
	
			
				 (c)
			If this Agreement is terminated by the Company pursuant to Section 7.02(d) or Section 7.02(e) and all conditions to Closing set forth in Sections 6.01 and 6.02 have been satisfied or duly waived, other than conditions which, by their nature, are to be satisfied on the Closing Date and other than Sections 6.01 (a) and (b) to the extent such actions have not yet been completed or occurred, the Escrow Agent shall pay the Deposit to the Company (by wire transfer of immediately available funds) in exchange for the Company’s issuance of Conversion Shares and delivery to Buyer of an executed Registration Rights Agreement substantially in the form attached hereto as Exhibit A with respect to the Conversion Shares, which issuance of Conversion Shares and delivery of the Registration Rights Agreement shall be effected no later than five Business Days following the date of termination of the Agreement. Except as set forth in Section 7.06(e), the exchange of the Deposit for Conversion Shares under this Section 7.06(c) shall be the exclusive remedy for the Company under this Agreement in the event this Agreement is terminated by the Company pursuant to Section 7.02(d) or Section 7.02(e).

			
	
			
				 (d)
			If this Agreement is terminated by the Company pursuant to Section 7.04(b) and all conditions to Closing set forth in Sections 6.01 and 6.02 have been satisfied or duly waived, other than conditions which, by their nature, are to be satisfied on the Closing Date and other than Sections 6.01 (a) and (b) to the extent such actions have not yet been completed or occurred, the Escrow Agent shall pay the Deposit to the Company (by wire transfer of immediately available funds) within five Business Days following the date of termination of the Agreement. Except as set forth in Section 7.06(e), the payment of the Deposit to the Company under this Section 7.06(d) shall be the exclusive remedy for the Company under this Agreement in the event this Agreement is terminated by the Company pursuant to Section 7.04(b).  

			
	
			
				 (e)
			The Company hereby agrees that any and all liability of Buyer (other than fraud and willful misconduct on the part of Buyer or any of its Representatives) in 

		 

		

			44

		

 

	connection with any breach (actual or alleged) of any representation, warranty, covenant or agreement hereunder shall terminate upon the return, exchange or payment of the Deposit pursuant to this Section 7.06, and the Company hereby waives any claim it may have against Buyer in connection with such breach.

			
	
			
				Article VIII
			

MISCELLANEOUS

			
	
			
				 Section 8.01.
			Expenses. Except as otherwise expressly provided in Section 5.13(b), all costs and expenses, including, without limitation, fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses, whether or not the Closing shall have occurred; provided, however, that (a) Buyer and the Company shall each be responsible for one-half of all filing and other similar fees payable in connection with any filings or submissions under the HSR Act, (b) Buyer shall be responsible for the entire amount of any cost of counsel selected by Buyer to advise with respect to the CFIUS application and approval process in connection with the Transaction, but each party shall be responsible for its own costs in preparing necessary material for the CFIUS submission; (c) the Company shall be responsible for the fee associated with the fairness opinion delivered to the board of directors of the Company related to the transactions contemplated by this Agreement, (d) the Company shall pay all amounts payable to BDA Advisors, Inc., and (e) the Company shall pay all amounts payable to the NYSE MKT or any other out-of-pocket expenses incurred by the Company.

			
	
			
				 Section 8.02.
			Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by an internationally recognized overnight courier (receipt requested); or (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient. Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 8.02):

		
			 
		

		
			If to the Company:UQM Technologies, Inc.
4120 Specialty Place
Longmont, CO 80504
(303) 682-4933
Facsimile:  303-682-4933
jmitchell@uqm.com
Attn:  Chief Executive Officer
		

		
			with a copy to:Sherman & Howard L.L.C.
633 Seventeenth Street, Suite 3000
Denver, CO  80202
Facsimile:  (303) 298-0940: gjensen@shermanhoward.com 
Attn:  Garth B. Jensen
		

		
			If to Buyer:American Compass, Inc.
800 E. Colorado Blvd.
Suite 888
Pasadena, CA 91101
Telephone:  626-683-9210
Facsimile:   626-683-0693
E-mail:       jimmy_wang_la@yahoo.com
		

		
			with a copy to:Locke Lord LLP
Terminus 200
3333 Piedmont Road NE, Suite 1200
Atlanta, GA 30305
Facsimile: (404) 872-5547
tim.xia@lockelord.com
Attn:  Tim Xia, Esq.
		

			
	
			
				 Section 8.03.
			Interpretation. For purposes of this Agreement: (a) the words “include,” “includes” and “including” shall be deemed to be followed by the words “without limitation”; (b) the word “or” is not exclusive; and (c) the words “herein,” “hereof,” “hereby,” “hereto” and “hereunder” refer to this Agreement as a whole. Unless the context otherwise requires, references herein: (x) to Articles, Sections, Disclosure Schedule and Exhibits mean the Articles and Sections of, and Disclosure Schedule and Exhibits attached to, this Agreement; (y) to an agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof; and (z) to a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations promulgated thereunder. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted. The Disclosure Schedule and Exhibits referred to herein shall be construed with, and as an integral part of, this Agreement to the same extent as if they were set forth verbatim herein.

			
	
			
				 Section 8.04.
			Headings. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.

		
			 
		

			
	
			
				 Section 8.05.
			Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto 

		 

		

			45

		

 

	shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

			
	
			
				 Section 8.06.
			Entire Agreement. This Agreement constitutes the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein, and supersede all prior and contemporaneous representations, warranties, understandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Agreement, the Exhibits and Disclosure Schedule (other than an exception expressly set forth as such in the Disclosure Schedule), the statements in the body of this Agreement will control.

			
	
			
				 Section 8.07.
			Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Neither party may assign its rights or obligations hereunder without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed. No assignment shall relieve the assigning party of any of its obligations hereunder.

			
	
			
				 Section 8.08.
			No Third-party Beneficiaries. Except as provided in Section 5.11, this Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

			
	
			
				 Section 8.09.
			Amendment. At any time prior to the Closing Date, this Agreement may be amended or supplemented in any and all respects, whether before or after receipt of the Company Shareholder Approval, by written agreement signed by each of the parties hereto; provided, however, that following the receipt of the Company Shareholder Approval, there shall be no amendment or supplement to the provisions of this Agreement which by Law or in accordance with the rules of any relevant self- regulatory organization would require further approval by the holders of Common Stock without such approval.

			
	
			
				 Section 8.10.
			Extension; Waiver. At any time prior to the Closing Date, Buyer or the Company may (a) extend the time for the performance of any of the obligations of the other party(ies), (b) waive any inaccuracies in the representations and warranties of the other party(ies) contained in this Agreement or in any document delivered under this Agreement, or (c) unless prohibited by applicable Law, waive compliance with any of the covenants, agreements or conditions contained in this Agreement. Any agreement on the part of a party to any extension or waiver will be valid only if set forth in an instrument in writing signed by such party. The failure of any party to assert any of its rights under this Agreement or otherwise will not constitute a waiver of such rights.

		 

		

			46

		

 

			
	
			
				 Section 8.11.
			Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.

			
	
			
				 (a)
			This Agreement shall be governed by and construed in accordance with the internal laws of the State of Colorado without giving effect to any choice or conflict of law provision or rule (whether of the State of Colorado or any other jurisdiction).

			
	
			
				 (b)
			ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY MAY BE INSTITUTED IN THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA OR THE COURTS OF THE STATE OF CALIFORNIA IN EACH CASE LOCATED IN THE CITY AND COUNTY OF LOS ANGELES, AND EACH PARTY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING. SERVICE OF PROCESS, SUMMONS, NOTICE OR OTHER DOCUMENT BY MAIL TO SUCH PARTY’S ADDRESS SET FORTH HEREIN SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY SUIT, ACTION OR OTHER PROCEEDING BROUGHT IN ANY SUCH COURT. THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR ANY PROCEEDING IN SUCH COURTS AND IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

			
	
			
				 (c)
			EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.11(c).

		
			 
		

			
	
			
				 Section 8.12.
			Specific Performance.  The Company hereby acknowledges and agrees that Buyer would be irreparably damaged if any of the provisions of this Agreement are not performed in accordance with their specific terms or are otherwise breached and that any non-performance or breach of this Agreement by the Company 

		 

		

			47

		

 

	could not be adequately compensated by monetary damages alone and that the parties hereto would not have any adequate remedy at law. Accordingly, in addition to any other right or remedy to which Buyer may be entitled, at law or in equity (including monetary damages), Buyer shall be entitled to enforce any provision of this Agreement by a decree of specific performance and to temporary, preliminary and permanent injunctive relief, to prevent breaches or threatened breaches of any of the provisions of this Agreement without posting any bond or other undertaking. The Company agrees that it will not contest the appropriateness of specific performance as a remedy.

			
	
			
				 Section 8.13.
			Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

		
			[SIGNATURE PAGE FOLLOWS]
		

		
			
		

		
			

		 

		

			48

		

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.
		

		
			UQM Technologies, Inc.
		

		
			 
		

		
			 
		

		
			By /s/JOSEPH R. MITCHELL
		

		
			Name:  Joseph Mitchell
		

		
			Title:  President and Chief Executive Office
		

		
			 
		

		
			American Compass, Inc.
		

		
			 
		

		
			 
		

		
			By /s/CHUNHUA HUANG
		

		
			Name: Chunhua Huang
		

		
			Title:  Director
		

		
			
		

		
			

		 

		

			49

		

 

EXHIBIT A
		

		
			FORM OF REGISTRATION RIGHTS AGREEMENT
		

		
			 
		

		
			 
		

		
			

		 

		

			50

		

 

REGISTRATION RIGHTS AGREEMENT
		

		
			 
		

		
			among
		

		
			UQM TECHNOLOGIES, INC,
		

		
			 
		

		
			 
		

		
			and
		

		
			AMERICAN COMPASS, INC.
		

		
			 
		

		
			 
		

		
			dated as of
		

		
			[], 2016
		

		
			 
		

		
			

		 

		

			 

		

 

TABLE OF CONTENTS
		

		

			
					
						 

					
					
						 

				
	
					
						 

					
					
						PAGE

				
	
					
						Article I          DEFINITIONS

					
1 
				
	
					
						Section 1.01.   Definitions

					
1 
				
	
					
						Section 1.02.   Other Definitional and Interpretative Provisions

					
4 
				
	
					
						Article II        Registration Rights

					
5 
				
	
					
						Section 2.01.   Demand Registration

					
5 
				
	
					
						Section 2.02.   Piggyback Registration

					
6 
				
	
					
						Section 2.03.   Lock-Up Agreements

					
7 
				
	
					
						Section 2.04.   Registration Procedures

					
7 
				
	
					
						Section 2.05.   Indemnification by the Company

					
10 
				
	
					
						Section 2.06.   Indemnification by the Stockholder

					
11 
				
	
					
						Section 2.07.   Conduct of Indemnification Proceedings

					
11 
				
	
					
						Section 2.08.   Participation in Public Offering

					
12 
				
	
					
						Section 2.09.   Other Indemnification

					
12 
				
	
					
						Section 2.10.   Rule 144 Reporting

					
12 
				
	
					
						Section 2.11.   No Transfer of Registration Rights

					
13 
				
	
					
						Article III       Miscellaneous

					
13 
				
	
					
						Section 3.01.   Term

					
13 
				
	
					
						Section 3.02.   Binding Effect; Assignability; Benefit

					
13 
				
	
					
						Section 3.03.   Notices

					
13 
				
	
					
						Section 3.04.   Waiver; Amendment

					
14 
				
	
					
						Section 3.05.   Governing Law

					
14 
				
	
					
						Section 3.06.   Jurisdiction

					
15 
				
	
					
						Section 3.07.   WAIVER OF JURY TRIAL

					
15 
				
	
					
						Section 3.08.   Specific Performance

					
15 
				
	
					
						Section 3.09.   Counterparts; Effectiveness

					
15 
				
	
					
						Section 3.10.   Entire Agreement

					
15 
				
	
					
						Section 3.11.   Severability

					
15 
				

		
			 
		

		
			 
		

		
			

		 

		

			i

		

 

REGISTRATION RIGHTS AGREEMENT
		

		
			THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of [], 2016, is made by and among UQM Technologies, Inc., a Colorado corporation (the “Company”), and American Compass, Inc., a California company (the “Stockholder”). The Company and the Stockholder are sometimes referred to herein individually as a “Party” and together as the “Parties”.
		

		
			RECITALS
		

		
			A.        This Agreement is entered into in connection with that certain Stock Issuance and Purchase Agreement between and among the Company and the Stockholder, dated of even date herewith (the “Purchase Agreement”), which provides for, among other things, the issuance and sale by the Company to the Stockholder of the Company’s common stock, par value $.01 per share, which upon issuance will represent a majority of the total issued and outstanding shares of common stock of the Company, on a fully diluted basis;
		

		
			B.       Subject to the terms and conditions herein, the Stockholder and the Company desire to enter into this Agreement to provide for certain rights and obligations of the Stockholder and the Company.
		

		
			NOW, THEREFORE, in consideration of the foregoing and the mutual promises, covenants and agreements of the Parties, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:
		

		
			ARTICLE I
		

		
			DEFINITIONS
		

		
			Section 1.01.  Definitions.  (a) As used in this Agreement, the following terms have the following meanings:
		

		
			“Affiliate” means with respect to any Party, any Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person.  It being understood and agreed that, for purposes hereof, neither the Company nor any subsidiary of the Company shall be deemed to be an Affiliate of the Stockholder.
		

		
			“Board of Directors” means the Board of Directors of the Company.
		

		
			“Business Day” means any day other than a Saturday, Sunday or day on which banking institutions in New York City or Hong Kong are authorized or obligated by law or executive order to close.
		

		
			“Common Stock” means common stock of the Company, par value $0.01 per share, and any and all securities of any kind whatsoever of the Company that may be issued by the Company after the date hereof in respect of, in exchange for, or in substitution of, Common Stock, pursuant
		

		
			
		

		
			

		 

		

			1

		

 

to any stock dividends, splits, reverse splits, combinations, reclassifications, recapitalizations, reorganizations and the like occurring after the date hereof.
		

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

		
			“Company Securities” means (i) the Common Stock, (ii) securities convertible into or exchangeable for Common Stock and (iii) any options, warrants or other rights to acquire Common Stock.
		

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

		
			“FINRA” means the Financial Industry Regulatory Authority.
		

		
			“Person” means an individual, partnership, limited liability company, corporation, trust, other entity, association, estate, unincorporated organization or a government or any agency or political subdivision thereof.
		

		
			“Public Offering” means an underwritten public offering of Registrable Securities pursuant to an effective registration statement under the Securities Act, other than pursuant to a registration statement on Form S-4 or Form S-8 or any similar or successor form.
		

		
			“Registrable Securities” means, at any time, any Shares until (i) a registration statement covering such Shares has been declared effective by the SEC and such Shares have been disposed of pursuant to such effective registration statement, (ii) such Shares are sold under circumstances in which all of the applicable conditions of Rule 144 (or any similar provisions then in force) under the Securities Act are met or (iii) such Shares are otherwise Transferred, the Company has delivered a new certificate or other evidence of ownership for such Shares not bearing a restricted legend and such Shares may be resold without subsequent registration under the Securities Act.  For the avoidance of doubt, the Stockholder’s Registrable Securities shall include the Conversion Shares as such term is defined in the Purchase Agreement.
		

		
			“Registration Expenses” means any and all expenses incident to the performance of or compliance with any registration or marketing of Company Securities, including all (i) registration and filing fees, and all other fees and expenses payable in connection with the listing of securities on any securities exchange or automated interdealer quotation system, (ii) fees and expenses of compliance with any securities or “blue sky” laws (including reasonable fees and disbursements of counsel in connection with “blue sky” qualifications of the securities registered), (iii) expenses in connection with the preparation, printing, mailing and delivery of any registration statements, prospectuses and other documents in connection therewith and any amendments or supplements thereto, (iv) security engraving and printing expenses, (v) internal expenses of the Company (including all salaries and expenses of its officers and employees performing legal or accounting duties), (vi) reasonable fees and disbursements of counsel for the Company and customary fees and expenses for independent certified public accountants retained by the Company (including the expenses relating to any comfort letters or costs associated with the delivery by independent certified public accountants of any comfort letters requested pursuant to Section 2.04(i)),
		

		
			
		

		
			

		 

		

			2

		

 

(vii) reasonable fees and expenses of any special experts retained by the Company (including independent international consultants) in connection with such registration, (viii) reasonable fees, out-of-pocket costs and expenses of the Stockholder, including its counsel, (ix) fees and expenses in connection with any review by FINRA of the underwriting arrangements or other terms of the offering, and all fees and expenses of any “qualified independent underwriter,” including the fees and expenses of any counsel thereto, (x) fees and disbursements of underwriters customarily paid by issuers or sellers of securities, but excluding any underwriting fees, discounts and commissions attributable to the sale of Registrable Securities, (xi) costs of printing and producing any agreements among underwriters, underwriting agreements, any “blue sky” or legal investment memoranda and any selling agreements and other documents in connection with the offering, sale or delivery of the Registrable Securities, (xii) transfer agents’ and registrars’ fees and expenses and the fees and expenses of any other agent or trustee appointed in connection with such offering, (xiii) expenses relating to any analyst or investor presentations or any “road shows” undertaken in connection with the registration, marketing or selling of the Registrable Securities, (xiv) fees and expenses payable in connection with any ratings of the Registrable Securities, including expenses relating to any presentations to rating agencies and (xv) transfer taxes and costs of insurance, if any.
		

		
			“Registration Statement” means a registration statement in the form required to register the resale of Registrable Shares under the Securities Act and other applicable law, and including any Prospectus, amendments and supplements to each such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in such registration statement.
		

		
			“Rule 144”  means Rule 144 (or any successor provisions) promulgated under the Securities Act.
		

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

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

		
			“Shares” means shares of Common Stock.
		

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

		
			“Transfer” means (a) a direct or indirect transfer, sale, exchange, assignment, pledge, hypothecation or other encumbrance or other disposition of Common Stock, or any legal or beneficial interest therein, including the grant of an option or other right or the grant of any interest that would result in the Stockholder no longer having the power to vote, or cause to be voted, the Stockholder Common Stock, whether directly or indirectly, whether voluntarily, involuntarily or by operation of law or (b) any agreement to take or commit to any of the foregoing actions; and “Transferred,” “Transferee,” “Transferor,” and “Transferability” shall each have a correlative meaning. For the avoidance of doubt, a transfer, sale, exchange, assignment, pledge, hypothecation or other encumbrance or other disposition of an interest held by the Stockholder or 
		

		
			
		

		
			

		 

		

			3

		

 

its Affiliate, of all or substantially all of whose assets are, directly or indirectly, Company Shares shall constitute a “Transfer” of Common Stock for purposes of this Agreement.
		

		
			“WKSI” means a “well known seasoned issuer” as defined under Rule 405.
		

		
			(b)       Each of the following terms is defined in the Section set forth opposite such term:
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						Term

					
					
						    

					
					
						Section

				
	
					
						Company

					
					
						 

					
					
						Preamble

				
	
					
						Damages

					
					
						 

					
					
						2.05

				
	
					
						Demand Registration

					
					
						 

					
					
						2.01(a)

				
	
					
						Indemnified Party

					
					
						 

					
					
						2.07

				
	
					
						Indemnifying Party

					
					
						 

					
					
						2.07

				
	
					
						Inspectors

					
					
						 

					
					
						2.04(h)

				
	
					
						Maximum Offering Size

					
					
						 

					
					
						2.01(b)

				
	
					
						Piggyback Registration

					
					
						 

					
					
						2.02(a)

				
	
					
						Records

					
					
						 

					
					
						2.04(h)

				
	
					
						Registering Stockholders

					
					
						 

					
					
						2.01(a)

				
	
					
						Requesting Stockholder

					
					
						 

					
					
						2.01(a)

				

		
			Section 1.02.  Other Definitional and Interpretative Provisions.
		

		
			(a)       The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.
		

		
			(b)       The words “hereof,” “herein,” “hereunder” and similar words refer to this Agreement as a whole and not to any particular provision of this Agreement; and any subsection and Section references are to this Agreement unless otherwise specified.
		

		
			(c)       The term “including” is not limiting and means “including without limitation.”
		

		
			(d)       The captions and headings of this Agreement are for convenience of reference only and shall not affect the interpretation of this Agreement.
		

		
			(e)       Whenever the context requires, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms.
		

		
			
		

		 

		

			4

		

 

		
			ARTICLE II
		

		
			REGISTRATION RIGHTS
		

		
			Section 2.01.  Demand Registration. (a) If at any time following the Closing of the Purchase Agreement, the Company shall receive a request (a “Demand Notice”) from the Stockholder (referred to herein as the “Requesting Stockholder”) that the Company effect the registration under the Securities Act of all or any portion of such Requesting Stockholder’s Registrable Securities, and specifying the intended method of disposition thereof, then the Company shall promptly give notice of such requested registration (each such request shall be referred to herein as a “Demand Registration”) at least 2 Business Days prior to the anticipated pricing date of the offering relating to such Demand Registration to any other stockholders having similar rights and thereupon shall use its best efforts to effect, as expeditiously as possible, the registration under the Securities Act of:
		

		
			(i)        all Registrable Securities for which the Requesting Stockholder has requested registration under this Section 2.01; and
		

		
			(ii)       subject to the restrictions set forth in Sections 2.01(d) and 2.02, all other Registrable Securities of the same class as those requested to be registered by the Requesting Stockholder that any stockholders with rights to request registration (all such stockholders, together with the Requesting Stockholder, and any stockholders participating in a Piggyback Registration pursuant to Section 2.02, the “Registering Stockholders”) have requested the Company to register by request received by the Company within one (1) Business Day after such Registering Stockholders receive the Company’s notice of the Demand Registration;
		

		
			all to the extent necessary to permit the disposition (in accordance with the intended methods thereof as aforesaid) of the Registrable Securities so to be registered; provided, however, that, subject to Section 2.01(c), the Company shall not be obligated to effect more than one Demand Registration within a 12 month period requested by the Stockholder; and further provided, that a Demand Notice may only be made if the sale of the Registrable Securities requested to be registered in the aggregate is reasonably expected to result in gross cash proceeds in excess of $10,000,000.  The Company shall be liable for and pay all Registration Expenses in connection with any Demand Registration, regardless of whether such Registration is effectuated.
		

		
			(b)        A Demand Registration shall not be deemed to have occurred:
		

		
			(i)        unless the registration statement relating thereto (A) has become effective under the Securities Act and (B) has remained effective for a period of at least 180 days (or such shorter period in which all Registrable Securities of the Registering Shareholders included in such registration have actually been sold thereunder); or
		

		
			(ii)       if the Maximum Offering Size is reduced in accordance with Section 2.01(e) such that less than 50% of the Registrable Securities of the Requesting Shareholders sought to be included in such registration are included.
		

		
			
		

		 

		

			5

		

 

		
			(c)       If a Demand Registration involves an underwritten Public Offering and the managing underwriter advises the Company and the Registering Stockholders that, in its view, the number of shares of Registrable Securities requested to be included in such registration (including any securities that the Company proposes to be included that are not Registrable Securities) exceeds the largest number of shares that can be sold without having an adverse effect on such offering, including the price at which such shares can be sold (the “Maximum Offering Size”), the Company shall include in such registration, in the priority listed below, up to the Maximum Offering Size:
		

		
			(i)        first, all Registrable Securities of the Stockholder; and
		

		
			(ii)       second, all Registrable Securities requested to be included in such registration by any other Registering Stockholder or Person, including the Company (allocated, if necessary for the offering not to exceed the Maximum Offering Size, pro rata among such other Registering Stockholders on the basis of the relative number of Registrable Securities so requested to be included in such registration by each such Registering Stockholder).
		

		
			(d)       Upon notice to each Registering Stockholder, the Company may postpone effecting a registration pursuant to this Section 2.01 on one occasion during any period of six consecutive months for a reasonable time specified in the notice but not exceeding 90 days (which period may not be extended or renewed), if i) an investment banking firm of recognized national standing shall advise the Company and the Registering Stockholders in writing that effecting the registration would materially and adversely affect an offering of securities of such Company, the preparation of which had then been commenced or ii) the Company is in possession of material non-public information, and the Company reasonably believes that the disclosure of such information during the period specified in such notice would not be in the best interests of the Company.
		

		
			Section 2.02.  Piggyback Registration. (a) If the Company proposes to register any Company Securities under the Securities Act (other than a registration on Form S-8, S-4 or F-4, or any successor forms, relating to Shares issuable upon exercise of employee stock options or in connection with any employee benefit or similar plan of the Company or in connection with a direct or indirect acquisition by the Company of another Person), whether or not for sale for its own account, the Company shall promptly notify the Stockholder in writing of its intention to do so, which notice shall set forth such Stockholder’s rights under this Section 2.02 and shall offer the Stockholder the opportunity to include in such registration statement the number of Registrable Securities of the same class or series as those proposed to be registered as the Stockholder may request (a “Piggyback Registration”), subject to the provisions of Section 2.02(b).  Upon the request of the Stockholder made within ten (10) Business Day after the receipt of notice from the Company (which request shall specify the number of Registrable Securities intended to be registered by the Stockholder), the Company shall use its best efforts to effect the registration under the Securities Act of all Registrable Securities that the Company has been so requested to register by the Stockholder, to the extent requisite to permit the disposition of the Registrable Securities so to be registered; provided that (1) if such registration involves an underwritten Public Offering, the Stockholder must sell its requested Registrable Securities to the underwriters
		

		
			
		

		 

		

			6

		

 

		
			selected as provided in Section 2.04(f)(i) on the same terms and conditions as apply to the Company, and (2) if, at any time after giving notice of its intention to register any Company Securities pursuant to this Section 2.2(a) and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register such securities, the Company shall promptly give notice to the Stockholder and, thereupon, shall be relieved of its obligation to register any Registrable Securities in connection with such registration.  No registration effected under this Section 2.02 shall relieve the Company of its obligations to effect a Demand Registration to the extent required by Section 2.01.  The Company shall pay all Registration Expenses in connection with each Piggyback Registration.
		

		
			(b)       If a Piggyback Registration involves an underwritten Public Offering (other than any Demand Registration, in which case the provisions with respect to priority of inclusion in such offering set forth in Section 2.01(c) shall apply) and the managing underwriter advises the Company that, in its view, the number of Registrable Securities that the Company and such stockholders who intend to be included in such registration exceeds the Maximum Offering Size, the Company shall include in such registration, in the following priority, up to the Maximum Offering Size:
		

		
			(i)        first, so much of the Registrable Securities proposed to be registered for the account of the Company as would not cause the offering to exceed the Maximum Offering Size;
		

		
			(ii)       second, all Registrable Securities of the Stockholder and other stockholders who have demand registration rights (allocated, if necessary for the offering not to exceed the Maximum Offering Size, pro rata among the Stockholder and any other stockholders on the basis of the relative number of shares of Registrable Securities so requested to be included in such registration by each); and
		

		
			(iii)      third, all Registrable Securities requested to be included in such registration by any stockholders, who do not have demand registration rights (allocated, if necessary for the offering not to exceed the Maximum Offering Size).
		

		
			Section 2.03.  Lock-Up Agreements.  If any registration of Registrable Securities shall be effected in connection with a Public Offering, neither the Company nor any Stockholder representative who is a director or executive officer of the Company shall effect any public sale or distribution, including any sale pursuant to Rule 144, of Registrable Securities during the period beginning 14 days prior to the anticipated pricing of the offering until 180 days following the pricing of the offering (subject to customary “booster-shot” extensions and exceptions to be agreed upon with the lead-managing underwriter for the Public Offering).
		

		
			Section 2.04.  Registration Procedures. Whenever the Stockholder requests that any Registrable Securities be registered pursuant to Section 2.01 or 2.02, subject to the provisions of such Sections, the following procedures shall apply:
		

		
			(a)        The Company shall use all commercially reasonable efforts to cause such registration to become effective under the Securities Act and remain continuously effective
		

		
			
		

		 

		

			7

		

 

		
			(including by supplementing and amending such Registration Statement to be current and in conformity with the Securities Act and the policies, rules and regulations of the SEC to the extent necessary to ensure that it is available for resales of the Registrable Securities) until the earlier of (x) the date on which all Registrable Securities have been sold pursuant to such Registration Statement and (y) the date on which all Registrable Securities are eligible for resale under Rule 144 promulgated under the Securities Act (without regard to the volume limitations contained in Rule 144(e))(the “Effectiveness Period”); and
		

		
			(b)        The Company shall effect any Demand Registration on Form S-3 (except if the Company is not then eligible to register for resale the Common Stock on Form S-3, in which case such Demand Registration Statement shall be effected on Form S-1 or another appropriate form for such purpose pursuant to the Securities Act) and if the Company becomes, and is at the time of its receipt of a Demand Notice, a WKSI, the Demand Registration shall be effected pursuant to an Automatic Shelf Registration Statement, which shall be on Form S-3A or any equivalent or successor form under the Securities Act (if available to the Company).
		

		
			(c)        Prior to filing a registration statement or prospectus or any amendment or supplement thereto, the Company shall, if requested, furnish to each participating stockholder and each underwriter, if any, of the Registrable Securities covered by such registration statement copies of such registration statement as proposed to be filed, and thereafter the Company shall furnish to such stockholder and underwriter, if any, such number of copies of such registration statement, each amendment and supplement thereto (in each case including all exhibits thereto and documents incorporated by reference therein), the prospectus included in such registration statement (including each preliminary prospectus and any summary prospectus) and any other prospectus filed under Rule 424, Rule 430A, Rule 430B or Rule 430C under the Securities Act and such other documents as such stockholder or underwriter may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such stockholder.  The Stockholder shall have the right to request that the Company modify any information contained in such registration statement, amendment and supplement thereto pertaining to the Stockholder and the Company shall use its reasonable best efforts to comply with such request; provided, however, that the Company shall not have any obligation so to modify any information if the Company reasonably expects that so doing would cause the prospectus to contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading.
		

		
			(d)        After the filing of the registration statement, the Company shall (i) cause the related prospectus to be supplemented by any required prospectus supplement, and, as so supplemented, to be filed pursuant to Rule 424 under the Securities Act, (ii) comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by such registration statement during the applicable period in accordance with the intended methods of disposition by the stockholders thereof set forth in such registration statement or supplement to such prospectus and (iii) promptly notify each stockholder holding Registrable Securities covered by such registration statement of any stop order issued or threatened by the SEC or any state
		

		
			
		

		 

		

			8

		

 

		
			securities commission and take all reasonable actions required to prevent the entry of such stop order or to remove it if entered.
		

		
			(e)        The Company shall use its reasonable best efforts to (i) register or qualify the Registrable Securities covered by such registration statement under such other securities or “blue sky” laws of such jurisdictions in the United States as any Registering Stockholder holding such Registrable Securities reasonably (in light of such Registering Stockholder’s intended plan of distribution) requests and (ii) cause such Registrable Securities to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business and operations of the Company and do any and all other acts and things that may be reasonably necessary or advisable to enable such stockholder to consummate the disposition of the Registrable Securities owned by such stockholder; provided that the Company shall not be required to (A) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 2.04(e), (B) subject itself to taxation in any such jurisdiction or (C) consent to general service of process in any such jurisdiction.
		

		
			(f)        The Company shall immediately notify each Registering Stockholder holding such Registrable Securities covered by such registration statement, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the occurrence of an event requiring the preparation of a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and promptly prepare and make available to each such Stockholder and file with the SEC any such supplement or amendment.
		

		
			(g)       The Stockholder shall have the right, in its sole discretion, to select an underwriter or underwriters in connection with any Public Offering resulting from the exercise of a Demand Registration.  In connection with any Public Offering, the Company shall enter into customary agreements (including an underwriting agreement in customary form) and take such all other actions as are reasonably required in order to expedite or facilitate the disposition of such Registrable Securities in any such Public Offering, including the engagement of a “qualified independent underwriter” in connection with the qualification of the underwriting arrangements with FINRA.
		

		
			(h)       Upon execution of confidentiality agreements in form and substance reasonably satisfactory to the Company, the Company shall make available for inspection by the Stockholder and any underwriter participating in any disposition pursuant to a registration statement being filed by the Company pursuant to this Section 2.04 and any attorney, accountant or other professional retained by any such Stockholder or underwriter (collectively, the “Inspectors”), all financial and other records (including technical information), pertinent corporate documents and properties of the Company (collectively, the “Records”) as shall be reasonably necessary or desirable to enable them to exercise their due diligence responsibility, and cause the Company’s officers, directors and employees to supply all information reasonably requested by any Inspectors in connection with such registration statement.  Records that the Company determines, in good faith, to be
		

		
			
		

		 

		

			9

		

 

		
			confidential and that it notifies the Inspectors are confidential shall not be disclosed by the Inspectors unless (i) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in such registration statement or (ii) the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction.  The Stockholder agrees that information obtained by it as a result of such inspections shall be deemed confidential and shall not be used by it or its Affiliates as the basis for any market transactions in the Registrable Securities unless and until such information is made generally available to the public.  The Stockholder further agrees that, upon learning that disclosure of such Records is sought in a court of competent jurisdiction, it shall give notice to the Company and allow the Company, at its expense, to undertake appropriate action to prevent disclosure of the Records deemed confidential.
		

		
			(i)         The Company shall furnish to each Registering Stockholder and to each such underwriter, if any, a signed counterpart, addressed to such Registering Stockholder or underwriter, of (i) an opinion or opinions of counsel to the Company and (ii) a comfort letter or comfort letters from the Company’s independent public accountants, each in customary form and covering such matters of the kind customarily covered by opinions or comfort letters, as the case may be, as the Stockholder or the managing underwriter therefor reasonably requests.
		

		
			(j)         The Stockholder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 2.04(f), the Stockholder shall forthwith discontinue disposition of Registrable Securities pursuant to the registration statement covering such Registrable Securities until the Stockholder’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 2.04(f), and, if so directed by the Company, the Stockholder shall deliver to the Company all copies, other than any permanent file copies then in the Stockholder’s possession, of the most recent prospectus covering such Registrable Securities at the time of receipt of such notice.  If the Company shall give such notice, the Company shall extend the period during which such registration statement shall be maintained effective (including the period referred to in Section 2.04(a)) by the number of days during the period from and including the date of the giving of notice pursuant to Section 2.04(f) to the date when the Company shall make available to such Stockholder a prospectus supplemented or amended to conform with the requirements of Section 2.04(f).
		

		
			(k)       The Company shall use its reasonable best efforts to list all Registrable Securities covered by such registration statement on any securities exchange or quotation system on which any of the Registrable Securities are then listed or traded.
		

		
			Section 2.05.  Indemnification by the Company.  The Company agrees to indemnify and hold harmless the Stockholder, its officers, directors, employees, partners and agents, and each Person, if any, who controls such Stockholder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any and all losses, claims, damages, liabilities and expenses (including reasonable expenses of investigation and reasonable attorneys’ fees and expenses) (“Damages”) caused by or relating to any untrue statement or alleged untrue statement of a material fact contained in any registration statement or prospectus relating to the Registrable Securities (as amended or supplemented if the Company shall have furnished any 
		

		
			
		

		 

		

			10

		

 

		
			amendments or supplements thereto) or any preliminary prospectus or free writing prospectus (as defined in Rule 405 under the Securities Act), or caused by or relating to any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such Damages are caused by or related to any such untrue statement or omission or alleged untrue statement or omission so made based upon information furnished in writing to the Company by such Stockholder or on such Stockholder’s behalf expressly for use therein.  The Company also agrees to indemnify any underwriters of the Registrable Securities, their officers and directors and each Person who controls such underwriters within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act on substantially the same basis as that of the indemnification of the Stockholder provided in this Section 2.05.
		

		
			Section 2.06.  Indemnification by the Stockholder.  The Stockholder hereby agrees to indemnify and hold harmless the Company, its officers, directors and agents and each Person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Company to the Stockholder, but only with respect to information furnished in writing by or on behalf of the Stockholder expressly for use in any registration statement or prospectus relating to the Registrable Securities, or any amendment or supplement thereto, or any preliminary prospectus.  The Stockholder also agrees to indemnify and hold harmless underwriters of the Registrable Securities, their officers and directors and each Person who controls such underwriters within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act on substantially the same basis as that of the indemnification of the Company provided in this Section 2.06.  As a condition to including Registrable Securities in any registration statement filed in accordance with Article 2, the Company may require that it shall have received an undertaking reasonably satisfactory to it from any underwriter to indemnify and hold it harmless to the extent customarily provided by underwriters with respect to similar securities.  The Stockholder shall not be liable under this Section 2.06 for any Damages in excess of the net proceeds realized by the Stockholder in the sale of Registrable Securities of the Stockholder to which such Damages relate.
		

		
			Section 2.07.  Conduct of Indemnification Proceedings.  If any proceeding (including any governmental investigation) shall be instituted involving any Person in respect of which indemnity may be sought pursuant to this Article 2, such Person (an “Indemnified Party”) shall promptly notify the Person against whom such indemnity may be sought (the “Indemnifying Party”) in writing and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Party, and shall assume the payment of all fees and expenses; provided that the failure of any Indemnified Party so to notify the Indemnifying Party shall not relieve the Indemnifying Party of its obligations hereunder except to the extent that the Indemnifying Party is materially prejudiced by such failure to notify.  In any such proceeding, any Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (i) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such counsel or (ii) in the reasonable judgment of such Indemnified Party representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between
		

		
			
		

		 

		

			11

		

 

		
			them.  It is understood that, in connection with any proceeding or related proceedings in the same jurisdiction, the Indemnifying Party shall not be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for all such Indemnified Parties, and that all such fees and expenses shall be reimbursed as they are incurred.  In the case of any such separate firm for the Indemnified Parties, such firm shall be designated in writing by the Indemnified Parties.  The Indemnifying Party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent, or if there be a final judgment for the plaintiff, the Indemnifying Party shall indemnify and hold harmless such Indemnified Parties from and against any loss or liability (to the extent stated above) by reason of such settlement or judgment.  Without the prior written consent of the Indemnified Party, no Indemnifying Party shall effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Party from all liability arising out of such proceeding.
		

		
			Section 2.08.  Participation in Public Offering.  The Stockholder shall not participate in any Public Offering hereunder unless such Stockholder (a) agrees to sell its Registrable Securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements and the provisions of this Agreement in respect of registration rights.
		

		
			Section 2.09.  Other Indemnification.  Indemnification similar to that specified herein (with appropriate modifications) shall be given by the Company and the Stockholder with respect to any required registration or other qualification of securities under any federal or state law or regulation or governmental authority other than the Securities Act.
		

		
			Section 2.10.  Rule 144 Reporting. With a view to making available the benefits of certain rules and regulations of the SEC which may at any time permit the sale of the Registrable Securities to the public without registration, at all times after the date hereof, the Company agrees to:
		

		
			(a)       make and keep public information available, as those terms are understood and defined in Rule 144;
		

		
			(b)       use its reasonable efforts to file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act, for so long as the Company is subject to the Exchange Act; and
		

		
			(c)       furnish to the Stockholder forthwith upon request a written statement by the Company as to its compliance with the reporting requirements of such Rule 144 and of the Securities Act and the Exchange Act, a copy of the most recent annual or quarterly report of the Company, and such other reports and documents so filed by the Company as the Stockholder may
		

		
			
		

		 

		

			12

		

 

		
			reasonably request in availing itself of any rule or regulation of the SEC allowing the Stockholder to sell any Registrable Securities without registration.
		

		
			Section 2.11.  No Transfer of Registration Rights. None of the rights of the Stockholder under this Article 2 shall be assignable by the Stockholder to any Person acquiring Securities in any Public Offering or pursuant to Rule 144, except a transfer to an Affiliate of the Stockholder or in connection with the transfer of all Common Stock held by the Stockholder to a third party.
		

		
			ARTICLE III
		

		
			MISCELLANEOUS
		

		
			Section 3.01.  Term.  This Agreement shall terminate upon the earlier of (a) twenty (20) years after the closing date of the Purchase Agreement, (b) the time at which all Company Securities are held by Persons other than the Stockholder, including, without limitation, such Transfer permitted by Section 2.11, and (c) the time at which all Registrable Securities have been sold in accordance with one or more Registration Statements; provided that the following provisions shall survive any such termination: (3) the provisions of Sections 2.04, 2.05, 2.06, 2.07 and 2.09 with respect to any offering of Registrable Securities completed before the date the Stockholder ceased to own any Company Securities, and Article 3. 
		

		
			Section 3.02.  Binding Effect; Assignability; Benefit.  (a)  This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, successors, legal representatives and permitted assigns.
		

		
			(b)       Nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the parties hereto, and their respective heirs, successors, legal representatives and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.
		

		
			Section 3.03.  Notices.  Unless otherwise specified herein, all notices, consents, approvals, reports, designations, requests, waivers, elections and other communications authorized or required to be given pursuant to this Agreement shall be in writing and shall be given, made or delivered (and shall be deemed to have been duly given, made or delivered upon receipt) by personal hand-delivery, by facsimile transmission, by electronic mail, by mailing the same in a sealed envelope, registered first-class mail, postage prepaid, return receipt requested, or by air courier guaranteeing overnight delivery, addressed to the Company or the Stockholder at the address set forth below:
		

		
			
		

		

		 

		

			13

		

 

	
					
						 

					
					
						 

				
	
					
						If to the Company:

					
					
						UQM Technologies, Inc.

				
	
					
						 

					
					
						4120 Specially Place

				
	
					
						 

					
					
						Longmont, CO 80504

				
	
					
						 

					
					
						Facsimile:  303-682-4933

				
	
					
						 

					
					
						jmitchell@uqm.com

				
	
					
						 

					
					
						Attn:  Chief Executive Officer

				
	
					
						 

					
					
						 

				
	
					
						with a copy to:

					
					
						Sherman & Howard L.L.C.

				
	
					
						 

					
					
						633 Seventeenth Street, Suite 3000

				
	
					
						 

					
					
						Denver, CO  80202

				
	
					
						 

					
					
						Facsimile:  (303) 298-0940

				
	
					
						 

					
					
						gjensen@shermanhoward.com

				
	
					
						 

					
					
						Attn:  Garth B. Jensen

				
	
					
						 

					
					
						 

				
	
					
						If to Buyer:

					
					
						American Compass, Inc.

				
	
					
						 

					
					
						800 E. Colorado Blvd.

				
	
					
						 

					
					
						Suite 888

				
	
					
						 

					
					
						Pasadena, CA 91101

				
	
					
						 

					
					
						Telephone:  626-683-9210

				
	
					
						 

					
					
						Facsimile:   626-683-0693

				
	
					
						 

					
					
						E-mail: jimmy_wang_la@yahoo.com

				
	
					
						 

					
					
						Attn: Jimmy Wang

				
	
					
						 

					
					
						 

				
	
					
						with a copy to:

					
					
						Locke Lord LLP

				
	
					
						 

					
					
						Terminus 200

				
	
					
						 

					
					
						3333 Piedmont Road NE, Suite 1200

				
	
					
						 

					
					
						Atlanta, GA 30305

				
	
					
						 

					
					
						Facsimile: (404) 872-5547

				
	
					
						 

					
					
						tim.xia@lockelord.com

				
	
					
						 

					
					
						Attn:  Tim Xia, Esq.

				

		
			 
		

		
			Section 3.04.  Waiver; Amendment. No provision of this Agreement may be amended, waived or otherwise modified except by an instrument in writing executed by the Company with approval of the Board of Directors (including a majority of directors who are not Buyer Nominees (as such term is defined in the Purchase Agreement)) and the Stockholder.  In addition, any party may waive any provision of this Agreement with respect to itself by an instrument in writing executed by the party against whom the waiver is to be effective.
		

		
			Section 3.05.  Governing Law.  This Agreement is governed by and will be construed in accordance with the laws of the State of Colorado, excluding any conflict-of-laws rule or principle (whether of Colorado or any other jurisdiction) that might refer the governance or the construction of this Agreement to the law of another jurisdiction.
		

		
			
		

		 

		

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			Section 3.06.  Jurisdiction.  Each of the parties (a) consents to submit itself to the personal jurisdiction of the District Court in the State of Colorado in the event any dispute arises out of this Agreement, (b) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from such court and (c) agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated by this Agreement in any court other than such Court. Each Party hereby agrees that, to the fullest extent permitted by law, service of any process, summons, notice or document by U.S. registered mail to the respective addresses set forth in Section 3.03 shall be effective service of process for any suit or proceeding in connection with this Agreement.
		

		
			Section 3.07.  WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF THE PARTIES IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF. The Company or the Stockholder may file an original counterpart or a copy of this Section 3.07 with any court as written evidence of the consent of any of the Parties to the waiver of their rights to trial by jury.
		

		
			Section 3.08.  Specific Performance.  It is hereby agreed and acknowledged that it will be impossible to measure the money damages that would be suffered if the parties fail to comply with any of the obligations imposed on them by this Agreement and that, in the event of any such failure, an aggrieved party will be irreparably damaged and will not have an adequate remedy at law. Each party shall, therefore, be entitled (in addition to any other remedy to which such party may be entitled at law or in equity) to seek injunctive relief, including specific performance, to enforce such obligations, without the posting of any bond.
		

		
			Section 3.09.  Counterparts; Effectiveness.  This Agreement may be executed in any number of separate counterparts each of which when so executed shall be deemed to be an original.
		

		
			Section 3.10.  Entire Agreement.  This Agreement and the Purchase Agreement constitute the entire agreement among the parties hereto and supersede all prior and contemporaneous agreements and understandings, both oral and written, among the parties hereto with respect to the subject matter hereof and thereof.
		

		
			Section 3.11.  Severability.  In the event that any provision of this Agreement shall be invalid, illegal or unenforceable, such provision shall be construed by limiting it so as to be valid, legal and enforceable to the maximum extent provided by law and the validity, legality and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby.
		

		
			
		

		 

		

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			Section 3.12.  [Future Grants. The Company shall not grant to any third party any registration rights without the prior written consent of the Stockholder, so long as any of the registration rights under this Agreement remains in effect.]3
		

		
			[SIGNATURE PAGE FOLLOWS]
		

		

		
			3 Section 3.12 shall only apply only in the event of a Closing under the Purchase Agreement and shall not apply to Conversion Shares as such term is defined in the Purchase Agreement.
		

		
			 
		

		
			 
		

		
			

		 

		

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the date first above written.
		

			
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						THE COMPANY:

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						 

				
	
					
						 

					
					
						 

					
					
						Name:

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						Title:

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						THE STOCKHOLDER:

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						American Compass, Inc.

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						 

				
	
					
						 

					
					
						 

					
					
						Name:

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						Title:

					
					
						 

				

		
			 
		

		
			
		

		
			

		 

		

			1

		

 

EXHIBIT B
		

		
			FORM OF ESCROW AGREEMENT
		

		
			
		

		
			

		 

		

			2

		

 

ESCROW AGREEMENT
		

		
			THIS ESCROW AGREEMENT, dated as of June 17, 2016 ("Escrow Agreement"), is by and among UQM Technologies, Inc., a Colorado corporation ("Seller");  American Compass, Inc., a California corporation (“Purchaser”); and U.S. BANK NATIONAL ASSOCIATION, a national banking association, as escrow agent hereunder ("Escrow Agent"). 
		

		
			BACKGROUND
		

		
			A.         Purchaser and Seller have entered into confidential negotiations relating to potentially entering into a Stock Issuance and Purchase Agreement (the "Underlying Agreement"), pursuant to which Purchaser is purchasing shares of Seller.    Pursuant to a Letter Agreement between Seller and Purchaser of even date (the “Letter Agreement”) Purchaser has agreed to deposit the Escrow Funds (defined below) in a segregated escrow account to be held by Escrow Agent pursuant to the Letter Agreement and if the Seller and Purchaser enter into the Underlying Agreement, the Escrow Funds shall serve as earnest money thereunder.
		

		
			B.         Escrow Agent has agreed to accept, hold, and disburse the funds deposited with it and the earnings thereon in accordance with the terms of this Escrow Agreement.
		

		
			C.         Purchaser and Seller have appointed the Representatives (as defined below) to represent them for all purposes in connection with the funds to be deposited with Escrow Agent and this Escrow Agreement.
		

		
			NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, for themselves, their successors and assigns, hereby agree as follows:
		

		
			1.          Definitions.  The following terms shall have the following meanings when used herein:
		

		
			"Escrow Funds" shall mean the funds deposited with Escrow Agent pursuant to Section 3 of this Agreement, together with any interest and other income thereon.
		

		
			"Joint Written Direction" shall mean a written direction executed by the Representatives and directing Escrow Agent to disburse all or a portion of the Escrow Funds or to take or refrain from taking any other action pursuant to this Escrow Agreement.
		

		
			"Purchaser Representative" shall mean the person(s) so designated on Schedule C hereto or any other person designated, in a writing signed by Purchaser and delivered to Escrow Agent and the Seller Representative in accordance with the notice provisions of this Escrow Agreement, to act as its representative under this Escrow Agreement.
		

		
			
		

		
			

		 

		

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"Purchaser Written Direction” shall mean a written direction executed by the Purchaser Representative and directing Escrow Agent to disburse all of the Escrow Funds to Purchaser.  
		

		
			"Representatives" shall mean the Seller Representative and the Purchaser Representative.  
		

		
			"Seller Representative" shall mean the person(s) so designated on Schedule C hereto or any other person designated in a writing signed by Seller and delivered to Escrow Agent and the Purchaser Representative in accordance with the notice provisions of this Escrow Agreement, to act as its representative under this Escrow Agreement.
		

		
			2.         Appointment of and Acceptance by Escrow Agent.  Purchaser and Seller hereby appoint Escrow Agent to serve as escrow agent hereunder.  Escrow Agent hereby accepts such appointment and, upon receipt by wire transfer of the Escrow Funds in accordance with Section 3 below, agrees to hold, invest and disburse the Escrow Funds in accordance with this Escrow Agreement.  Upon execution of the Underlying Agreement, if ever, Seller and Purchaser shall jointly notify Escrow Agent, who shall continue to hold the Escrow Funds as earnest money under the Underlying Agreement.
		

		
			3.        Deposit of Escrow Funds.  Simultaneously with the execution and delivery of this Escrow Agreement, Purchaser will transfer the Escrow Funds in the amount of USD Three Million Dollars (USD $3,000,000.00) by wire transfer of immediately available funds, to an account designated by Escrow Agent.  
		

		
			4.         Disbursements of Escrow Funds.  
		

		
			a.         If the Underlying Agreement is not fully executed, Escrow Agent shall disburse Escrow Funds at any time and from time to time upon receipt of, and in accordance with, a Purchaser Written Direction.  Such Purchaser Written Direction shall contain complete payment instructions, including wiring instructions or an address to which checks shall be sent.  If Purchaser sends Escrow Agent a Purchaser Written Direction, i shall also send such to Seller simultaneously. 
		

		
			b.         After execution of the Underlying Agreement, Escrow Agent shall disburse Escrow Funds at any time and from time to time, upon receipt of, and in accordance with, a Joint Written Direction.  Such Joint Written Direction shall contain complete payment instructions, including wiring instructions or an address to which a check shall be sent. 
		

		
			c.         Prior to any disbursement, Escrow Agent shall have received reasonable identifying information regarding the recipient such that Escrow Agent may comply with its regulatory obligations and reasonable business practices, including without limitation a completed United States Internal Revenue Service (“IRS”) Form W-9 or original IRS Form W-8, as applicable.  All disbursements of funds from the Escrow Funds shall be subject to the fees and claims of Escrow Agent and the Indemnified Parties pursuant to Section 11 and Section 12 below. 
		

		
			5.         Suspension of Performance; Disbursement into Court.  If, at any time, (i) there shall exist any dispute between Purchaser, Seller or the Representatives with respect to the holding or disposition of all or any portion of the Escrow Funds or any other obligations of Escrow Agent hereunder, (ii) Escrow Agent is unable to determine, to Escrow Agent's sole satisfaction, the 
		

		
			

		 

		

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proper disposition of all or any portion of the Escrow Funds or Escrow Agent's proper actions with respect to its obligations hereunder, or (iii) Purchaser and Seller have not, within 10 calendar days of the furnishing by Escrow Agent of a notice of resignation pursuant to Section 8 hereof, appointed a successor Escrow Agent to act hereunder, then Escrow Agent may, in its sole discretion, take either or both of the following actions:
		

		
			a.         suspend the performance of any of its obligations (including without limitation any disbursement obligations) under this Escrow Agreement until such dispute or uncertainty shall be resolved to the sole satisfaction of Escrow Agent or until a successor Escrow Agent shall have been appointed.
		

		
			b.         petition (by means of an interpleader action or any other appropriate method) any court of competent jurisdiction, in any venue convenient to Escrow Agent, for instructions with respect to such dispute or uncertainty, and to the extent required or permitted by law, pay into such court, for holding and disposition in accordance with the instructions of such court, all Escrow Funds, after deduction and payment to Escrow Agent of all fees and expenses (including court costs and attorneys' fees) payable to, incurred by, or expected to be incurred by Escrow Agent in connection with the performance of its duties and the exercise of its rights hereunder.  
		

		
			Escrow Agent shall have no liability to Purchaser, Seller or the Representatives, their respective owners, shareholders or members or any other person with respect to any such suspension of performance or disbursement into court, specifically including any liability or claimed liability that may arise, or be alleged to have arisen, out of or as a result of any delay in the disbursement of the Escrow Funds or any delay in or with respect to any other action required or requested of Escrow Agent. 
		

		
			6.         [reserved]  
		

		
			7.         Investment of Funds.  Based upon Purchaser’s and Seller’s prior review of investment alternatives, in the absence of further specific written direction to the contrary, the Escrow Agent is directed to initially invest and reinvest the Escrow Funds in the investment vehicle indicated on Schedule B hereto.  The Representatives may provide written instructions changing the investment of the Escrow Funds to the Escrow Agent; provided, however, that no investment or reinvestment may be made except in the following:  (a) direct obligations of the United States of America or obligations the principal of and the interest on which are unconditionally guaranteed by the United State of America; (b) U.S. dollar denominated deposit accounts and certificates of deposits issued by any bank, bank and trust company, or national banking association (including Escrow Agent and its affiliates), which such deposits are either (i) insured by the Federal Deposit Insurance Corporation or a similar governmental agency, or (ii) with domestic commercial banks which have a rating on their short- term certificates of deposit on the date of purchase of “A-1” or “A-l+” by S&P or “P-1” by Moody's and maturing no more than 360 days after the date of purchase (ratings on holding companies are not considered as the rating of the bank); (c) repurchase agreements with any bank, trust company, or national banking association (including Escrow Agent and its affiliates); or (d) institutional money market funds, including funds managed by Escrow Agent or any of its affiliates; provided that the Escrow Agent will not be directed to invest in investments that the Escrow Agent in its sole discretion determines are not consistent with the Escrow Agent’s policy or practices.  Purchaser and Seller acknowledge
		

		
			

		 

		

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that the Escrow Agent does not have a duty nor will it undertake any duty to provide investment advice.
		

		
			If Escrow Agent has not received a written instruction from the Representatives at any time that an investment decision must be made, Escrow Agent is directed to invest the Escrow Funds, or such portion thereof as to which no written investment instruction has been received, in the investment indicated on Schedule B hereto.  All investments shall be made in the name of Escrow Agent. Notwithstanding anything to the contrary contained herein, Escrow Agent may, without notice to Purchaser and Seller, sell or liquidate any of the foregoing investments at any time for any disbursement of Escrow Funds permitted or required hereunder.  All investment earnings shall become part of the Escrow Funds and investment losses shall be charged against the Escrow Funds.  Escrow Agent shall not be liable or responsible for loss in the value of any investment made pursuant to this Escrow Agreement, or for any loss, cost or penalty resulting from any sale or liquidation of the Escrow Funds.  With respect to any Escrow Funds received by Escrow Agent after twelve o’clock, p.m., Central Standard Time, Escrow Agent shall not be required to invest such funds or to effect any investment instruction until the next day upon which banks in St. Paul, Minnesota and the New York Stock Exchange are open for business. 
		

		
			8.         Resignation of Escrow Agent.  Escrow Agent may resign and be discharged from the performance of its duties hereunder at any time by giving ten (10) days prior written notice to the Purchaser and Seller specifying a date when such resignation shall take effect.  Upon any such notice of resignation, Purchaser and Seller jointly shall appoint a successor Escrow Agent hereunder prior to the effective date of such resignation.  If the Purchaser and Seller fail to appoint a successor Escrow Agent within such time, the Escrow Agent shall have the right to petition a court of competent jurisdiction to appoint a successor Escrow Agent, and all costs and expenses (including without limitation attorneys’ fees) related to such petition shall be paid jointly and severally by Purchaser and Seller.  The retiring Escrow Agent shall transmit all records pertaining to the Escrow Funds and shall pay all Escrow Funds to the successor Escrow Agent, after making copies of such records as the retiring Escrow Agent deems advisable and after deduction and payment to the retiring Escrow Agent of all fees and expenses (including court costs and attorneys' fees) payable to, incurred by, or expected to be incurred by the retiring Escrow Agent in connection with the performance of its duties and the exercise of its rights hereunder.  After any retiring Escrow Agent's resignation, the provisions of this Escrow Agreement shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Escrow Agent under this Escrow Agreement.
		

		
			9.         Binding Effect; Successors.  This Escrow Agreement shall be binding upon the parties hereto and their respective heirs, executors, successors or assigns.  If the Escrow Agent consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business (including the escrow contemplated by this Escrow Agreement) to another corporation, Escrow Agent shall so notify the Purchaser and Seller and the successor or transferee corporation without any further act shall be the successor Escrow Agent for all purposes.
		

		
			10.       Liability of Escrow Agent.  The Escrow Agent undertakes to perform only such duties as are expressly set forth herein and no duties shall be implied.  The Escrow Agent has no fiduciary or discretionary duties of any kind. The Escrow Agent shall have no liability under and no duty to inquire as to the provisions of any agreement other than this Escrow Agreement, including without limitation any other agreement between any or all of the parties hereto or any 
		

		
			

		 

		

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other persons even though reference thereto may be made herein.  The Escrow Agent shall not be liable for any action taken or omitted by it in good faith except to the extent that a court of competent jurisdiction determines that the Escrow Agent’s gross negligence or willful misconduct was the sole cause of any loss to the Purchaser or  Seller.  Escrow Agent's sole responsibility shall be for the safekeeping and disbursement of the Escrow Funds in accordance with the terms of this Escrow Agreement.  Escrow Agent shall not be charged with knowledge or notice of any fact or circumstance not specifically set forth herein.  Escrow Agent may rely upon any notice, instruction, request or other instrument, not only as to its due execution, validity and effectiveness, but also as to the truth and accuracy of any information contained therein, which Escrow Agent shall believe to be genuine and to have been signed or presented by the person or parties purporting to sign the same.  In no event shall Escrow Agent be liable for incidental, indirect, special, consequential or punitive damages or penalties (including, but not limited to lost profits), even if the Escrow Agent has been advised of the likelihood of such damages or penalty and regardless of the form of action.  Escrow Agent shall not be responsible for delays or failures in performance resulting from acts beyond its control, including without limitation acts of God, strikes, lockouts, riots, acts of war or terror, epidemics, governmental regulations, fire, communication line failures, computer viruses, power failures, earthquakes or other disasters.  Escrow Agent shall not be obligated to take any legal action or commence any proceeding in connection with the Escrow Funds, any account in which Escrow Funds are deposited, this Escrow Agreement or the Underlying Agreement, or to appear in, prosecute or defend any such legal action or proceeding.  Escrow Agent may consult legal counsel selected by it in the event of any dispute or question as to the construction of any of the provisions hereof or of any other agreement or of its duties hereunder, or relating to any dispute involving any party hereto, and shall incur no liability and shall be fully indemnified from any liability whatsoever in acting in accordance with the advice of such counsel.  Purchaser and Seller, jointly and severally, shall promptly pay, upon demand, the reasonable fees and expenses of any such counsel.  Purchaser and Seller agree to perform or procure the performance of all further acts and things, and execute and deliver such further documents, as may be required by law or as Escrow Agent may reasonably request in connection with its duties hereunder.
		

		
			The Escrow Agent is authorized, in its sole discretion, to comply with final orders issued or process entered by any court with respect to the Escrow Funds, without determination by the Escrow Agent of such court's jurisdiction in the matter.  If any portion of the Escrow Funds is at any time attached, garnished or levied upon under any court order, or in case the payment, assignment, transfer, conveyance or delivery of any such property shall be stayed or enjoined by any court order, or in case any order, judgment or decree shall be made or entered by any court affecting such property or any part thereof, then and in any such event, the Escrow Agent is authorized, in its sole discretion, to rely upon and comply with any such order, writ, judgment or decree which it is advised by legal counsel selected by it is binding upon it without the need for appeal or other action; and if the Escrow Agent complies with any such order, writ, judgment or decree, it shall not be liable to any of the parties hereto or to any other person or entity by reason of such compliance even though such order, writ, judgment or decree may be subsequently reversed, modified, annulled, set aside or vacated. 
		

		
			11.       Indemnification of Escrow Agent.  From and at all times after the date of this Escrow Agreement, Purchaser and Seller, jointly and severally, shall, to the fullest extent permitted by law, indemnify and hold harmless Escrow Agent and each director, officer, employee, attorney, agent and affiliate of Escrow Agent (collectively, the "Indemnified Parties") 
		

		
			

		 

		

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against any and all actions, claims (whether or not valid), losses, damages, liabilities, penalties, costs and expenses of any kind or nature (including without limitation reasonable attorneys' fees, costs and expenses) incurred by or asserted against any of the Indemnified Parties, whether direct, indirect or consequential, as a result of or arising from or in any way relating to any claim, demand, suit, action or proceeding (including any inquiry or investigation) by any person, including without limitation Purchaser, Seller and the Representatives, whether threatened or initiated, asserting a claim for any legal or equitable remedy against any person under any statute or regulation, including, but not limited to, any federal or state securities laws, or under any common law or equitable cause or otherwise, arising from or in connection with the negotiation, preparation, execution, performance or failure of performance in connection with this Escrow Agreement or any transactions contemplated herein, whether or not any such Indemnified Party is a party to any such action, proceeding, suit or the target of any such inquiry or investigation; provided, however, that no Indemnified Party shall have the right to be indemnified hereunder for any liability finally determined by a court of competent jurisdiction, subject to no further appeal, to have resulted solely from the gross negligence or willful misconduct of an Indemnified Party. Purchaser and Seller further agree, jointly and severally, to indemnify each Indemnified Party for all costs, including without limitation reasonable attorney’s fees, incurred by such Indemnified Party in connection with the enforcement of Purchaser’s and Seller’s indemnification obligations hereunder. Each Indemnified Party shall, in its sole discretion, have the right to select and employ separate counsel with respect to any action or claim brought or asserted against it, and the reasonable fees of such counsel shall be paid upon demand by the Purchaser and Seller jointly and severally.   The obligations of Purchaser and Seller under this Section 11 shall survive any termination of this Escrow Agreement and the resignation or removal of Escrow Agent.  
		

		
			The parties agree that neither the payment by Purchaser or Seller of any claim by Escrow Agent for indemnification hereunder nor the disbursement of any amounts to Escrow Agent from the Escrow Funds in respect of a claim by Escrow Agent for indemnification shall impair, limit, modify, or affect, as between Purchaser and Seller, the respective rights and obligations of Purchaser and Seller under the Underlying Agreement.  
		

		
			12.       Compensation of Escrow Agent
		

		
			(a)       Fees and Expenses.  Purchaser shall be responsible for compensating Escrow Agent on demand for its services hereunder in accordance with Schedule A attached hereto.  The obligations of Purchaser and Seller under this Section 12 shall survive any termination of this Escrow Agreement and the resignation or removal of Escrow Agent. 
		

		
			(b)       Disbursements from Escrow Funds to Pay Escrow Agent.  Escrow Agent is authorized to, and may disburse to itself from the Escrow Funds, from time to time, the amount of any compensation and reimbursement of out-of-pocket expenses due and payable hereunder (including any amount to which Escrow Agent or any Indemnified Party is entitled to seek indemnification hereunder).  Escrow Agent shall notify Purchaser and Seller of any disbursement from the Escrow Funds to itself or any Indemnified Party in respect of any compensation or reimbursement hereunder and shall furnish Purchaser and Seller copies of related invoices and other statements. 
		

		
			 
		

		
			

		 

		

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 (c)        Security and Offset.  Purchaser, Seller and the Representatives hereby grant to Escrow Agent and the Indemnified Parties a security interest in, lien upon and right of offset against the Escrow Funds with respect to any compensation or reimbursement due any of them hereunder (including any claim for indemnification hereunder).  If for any reason the Escrow Funds are insufficient to cover such compensation and reimbursement, Purchaser and Seller shall promptly pay such amounts to Escrow Agent or any Indemnified Party upon receipt of an itemized invoice.  
		

		
			13.        Representations and Warranties.  Purchaser and Seller each respectively make the following representations and warranties to Escrow Agent:
		

		
			(a)        it has full power and authority to execute and deliver this Escrow Agreement and to perform its obligations hereunder; and this Escrow Agreement has been duly approved by all necessary action and constitutes its valid and binding agreement enforceable in accordance with its terms; and
		

		
			(b)        each of the applicable persons designated on Schedule C attached hereto have been duly appointed to act as authorized representatives hereunder and individually have full power and authority to execute and deliver any Joint Written Direction or Purchaser Written Direction, to amend, modify or waive any provision of this Escrow Agreement and to take any and all other actions as authorized representatives under this Escrow Agreement, all without further consent or direction from, or notice to, it or any other party, provided that any change in designation of such authorized representatives shall be provided by written notice delivered to each party to this Escrow Agreement. 
		

		
			14.        Identifying Information.  To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. For a non-individual person such as a business entity, a charity, a trust, or other legal entity, the Escrow Agent requires documentation to verify its formation and existence as a legal entity. The Escrow Agent may ask to see financial statements, licenses, identification and authorization documents from individuals claiming authority to represent the entity or other relevant documentation.  The parties acknowledge that a portion of the identifying information set forth herein is being requested by the Escrow Agent in connection with the USA Patriot Act, Pub.L.107-56 (the “Act”), and each agrees to provide any additional information requested by the Escrow Agent in connection with the Act or any other legislation or regulation to which Escrow Agent is subject, in a timely manner.
		

		
			15.        Consent to Jurisdiction and Venue.  In the event that any party hereto commences a lawsuit or other proceeding relating to or arising from this Escrow Agreement, the parties hereto agree to the personal jurisdiction by and venue in the state and federal courts in the State of New York and waive any objection to such jurisdiction or venue. The parties hereto consent to and agree to submit to the jurisdiction of any of the courts specified herein and agree to accept service of process to vest personal jurisdiction over them in any of these courts.
		

		
			16.        Notices.  All notices, approvals, consents, requests, and other communications hereunder shall be in writing and shall be delivered (i) by personal delivery, or (ii) by national overnight courier service, or (iii) by certified or registered mail, return receipt requested, or (iv) via facsimile transmission, with confirmed receipt or (v) via email by way of a PDF attachment thereto of a manually executed document.  Notice shall be effective upon receipt except for notice via 
		

		
			

		 

		

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email, which shall be effective only when the recipient, by return email or notice delivered by other method provided for in this Section 16, acknowledges having received that email (with an automatic “read receipt” or similar notice not constituting an acknowledgement of an email receipt for purposes of this Section 16.) Such notices shall be sent to the applicable party or parties at the address specified below:
		

		
			If to Purchaser or Purchaser Representative at:
		

		
			American Compass, Inc.
		

		
			800 E. Colorado Blvd.
		

		
			Suite 888
		

		
			Pasadena, CA 91101
		

		
			Telephone:  626-683-9210
		

		
			Facsimile:   626-683-0693
		

		
			E-mail:        jimmy_wang_la@yahoo.com
		

		
			 
		

		
			with copy to:
		

		
			 
		

		
			Tim Xia, Esq.
		

		
			 
		

		
			Locke Lord LLP 
		

		
			3333 Piedmont Road NE
		

		
			Suite 1200, Terminus 200
		

		
			Atlanta, GA  30305
		

		
			Telephone:  404-870-4698
		

		
			Facsimile:   404-872-5547
		

		
			E-mail:        tim.xia@lockelord.com
		

		
			 
		

		
			If to Seller or Seller Representative at:
		

		
			 
		

		
			UQM Technologies, Inc.
		

		
			4120 Specialty Place
		

		
			Longmont, CO 80504
		

		
			Telephone:  303-682-4933
		

		
			Facsimile:   303-682-4933
		

		
			E-mail:        jmitchell@uqm.com
		

		
			ATTN:        Chief Executive Officer
		

		
			
		

		
			

		 

		

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with a copy to:
		

		
			 
		

		
			Sherman & Howard L.L.C.
		

		
			633 Seventeenth Street
		

		
			Suite 3000
		

		
			Denver, CO 80202
		

		
			Facsimile:   303-298-0940
		

		
			E-mail:        gjensen@shermanhoward.com
		

		
			ATTN:        Garth B. Jensen
		

		
			 
		

		
			If to the Escrow Agent at:
		

		
			 
		

		
			U.S. Bank National Association, as Escrow Agent
		

		
			ATTN:  Paul L. Henderson
		

		
			1349 W. Peachtree Street, NW 
		

		
			Suite 1050
		

		
			Two Midtown Plaza
		

		
			Atlanta, GA  30309
		

		
			Telephone:  404-965-7218
		

		
			Facsimile:   404-365-7946
		

		
			E-mail:        Paul.Henderson1@usbank.com
		

		
			 
		

		
			or to such other address as each party may designate for itself by like notice and unless otherwise provided herein shall be deemed to have been given on the date received.  
		

		
			17.        Optional Security Procedures.  In the event funds transfer instructions, address changes or change in contact information are given (other than in writing at the time of execution of this Escrow Agreement), whether in writing, by facsimile or otherwise, the Escrow Agent is authorized but shall be under no duty to seek confirmation of such instructions by telephone call-back to the person or persons designated on Schedule C hereto, and the Escrow Agent may rely upon the confirmation of anyone purporting to be the person or persons so designated.  The persons and telephone numbers for call-backs may be changed only in writing actually received and acknowledged by Escrow Agent and shall be effective only after Escrow Agent has a reasonable opportunity to act on such changes. If the Escrow Agent is unable to contact any of the designated representatives identified in Schedule C, the Escrow Agent is hereby authorized but shall be under no duty to seek confirmation of such instructions by telephone call-back to any one or more of Purchaser’s or Seller’s executive officers (“Executive Officers”), as the case may be, which shall include the titles of Chief Executive Officer, President and Vice President, as the Escrow Agent may select. Such Executive Officer shall deliver to the Escrow Agent a fully executed incumbency certificate, and the Escrow Agent may rely upon the confirmation of anyone purporting to be any such officer. Purchaser and Seller agree that the Escrow Agent may at its 
		

		
			
		

		
			

		 

		

			11

		

 

option record any telephone calls made pursuant to this Section. The Escrow Agent in any funds transfer may rely solely upon any account numbers or similar identifying numbers provided by Purchaser or Seller to identify (a) the beneficiary, (b) the beneficiary's bank, or (c) an intermediary bank.  The Escrow Agent may apply any of the Escrow Funds for any payment order it executes using any such identifying number, even when its use may result in a person other than the beneficiary being paid, or the transfer of funds to a bank other than the beneficiary's bank or an intermediary bank designated. Purchaser and Seller acknowledge that these optional security procedures are commercially reasonable.
		

		
			18.        Amendment, Waiver and Assignment.  None of the terms or conditions of this Escrow Agreement may be changed, waived, modified, discharged, terminated or varied in any manner whatsoever unless in writing duly signed by each party to this Escrow Agreement. No course of conduct shall constitute a waiver of any of the terms and conditions of this Escrow Agreement, unless such waiver is specified in writing, and then only to the extent so specified.  A waiver of any of the terms and conditions of this Escrow Agreement on one occasion shall not constitute a waiver of the other terms of this Escrow Agreement, or of such terms and conditions on any other occasion. Except as provided in Section 9 hereof, this Escrow Agreement may not be assigned by any party without the written consent of the other parties.  
		

		
			19.        Severability.  To the extent any provision of this Escrow Agreement is prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Escrow Agreement.
		

		
			20.        Governing Law.  This Escrow Agreement shall be construed and interpreted in accordance with the internal laws of the State of Delaware without giving effect to the conflict of laws principles thereof.
		

		
			21.        Entire Agreement,  No Third Party Beneficiaries.  This Escrow Agreement constitutes the entire agreement between the parties relating to the holding, investment and disbursement of the Escrow Funds and sets forth in their entirety the obligations and duties of Escrow Agent with respect to the Escrow Funds. Nothing in this Escrow Agreement, express or implied, is intended to or shall confer upon any other person any right, benefit or remedy of any nature whatsoever under or by reason of this Escrow Agreement.
		

		
			22.        Execution in Counterparts, Facsimiles.  This Escrow Agreement and any Joint Written Direction may be executed in two or more counterparts, which when so executed shall constitute one and the same agreement or direction. The delivery of copies of this Escrow Agreement and any Joint Written Instruction and their respective signature pages by PDF or facsimile transmission shall constitute effective execution and delivery as to the parties and may be used in lieu of originals for all purposes. 
		

		
			23.        Termination.    This Escrow Agreement shall terminate upon the distribution of all the Escrow Funds pursuant to any applicable provision of this Escrow Agreement, and Escrow Agent shall thereafter have no further obligation or liability whatsoever with respect to this Escrow Agreement or the Escrow Funds.
		

		
			
		

		
			

		 

		

			12

		

 

24.        Dealings.  The Escrow Agent and any stockholder, director, officer or employee of the Escrow Agent may buy, sell, and deal in any of the securities of the Purchaser or Seller and become pecuniarily interested in any transaction in which the Purchaser or Seller may be interested, and contract and lend money to the Purchaser or Seller and otherwise act as fully and freely as though it were not Escrow Agent under this Agreement.  Nothing herein shall preclude the Escrow Agent from acting in any other capacity for the Purchaser or Seller or for any other entity.
		

		
			25.        Brokerage Confirmation Waiver.  Purchaser and Seller acknowledge that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant either the right to receive brokerage confirmations for certain security transactions as they occur, Purchaser and Seller specifically waive receipt of such confirmations to the extent permitted by law.  The Escrow Agent will furnish the Purchaser and Seller periodic cash transaction statements that include detail for all investment transactions made by the Escrow Agent.
		

		
			26.        Tax Reporting.  Escrow Agent shall have no responsibility for the tax consequences of this Agreement and Purchaser and Seller shall consult with independent counsel concerning any and all tax matters.  Purchaser and Seller shall provide Escrow Agent Form W-9 and an original Form W-8, as applicable, for each payee, together with any other documentation and information requested by Escrow Agent in connection with Escrow Agent’s reporting obligations under applicable IRS regulations. If such tax documentation is not so provided, Escrow Agent shall withhold taxes as required by the IRS. Purchaser and Seller have determined that any interest or income on Escrow Funds shall be reported on an accrual basis and deemed to be for the account of Purchaser.  Purchaser and Seller shall prepare and file all required tax filings with the IRS and any other applicable taxing authority; provided that the parties further agree that:
		

		
			(a)        Escrow Agent IRS Reporting.  Purchaser shall accurately provide the Escrow Agent with all information requested by the Escrow Agent in connection with the preparation of all applicable Form 1099 and Form 1042-S documents with respect to all distributions as well as in the performance of Escrow Agent’s reporting obligations under the Foreign Account Tax Compliance Act and Foreign Investment in Real Property Tax Act or other applicable law or regulation. 
		

		
			(b)        Withholding Requests and Indemnification.  Purchaser and Seller jointly and severally agree to (i) assume all obligations imposed now or hereafter by any applicable tax law or regulation with respect to payments or performance under this Agreement, (ii) request the Escrow Agent in writing with respect to withholding and other taxes, assessments or other governmental charges, and advise Escrow Agent in writing with respect to any certifications and governmental reporting that may be required under any applicable laws or regulations, and (iii) indemnify and hold the Escrow Agent harmless pursuant to Section 11 hereof from any liability or obligation on account of taxes, assessments, additions for late payment, interest, penalties, expenses and other governmental charges that may be assessed or asserted against Escrow Agent.
		

		
			(c)        Imputed Interest.  To the extent that IRS imputed interest regulations apply, Purchaser and Seller shall so inform Escrow Agent, provide Escrow Agent with all imputed interest calculations and direct Escrow Agent to disburse imputed interest amounts as Purchaser and Seller deem appropriate. Escrow Agent shall rely solely on such provided calculations and information and shall have no responsibility for the accuracy or completeness of any such calculations or information.
		

		
			

		 

		

			13

		

 

27.        WAIVER OF TRIAL BY JURY.  EACH PARTY TO THIS AGREEMENT HEREBY WAIVES ANY RIGHT THAT IT MAY HAVE TO A TRIAL BY JURY ON ANY CLAIM, COUNTERCLAIM, SETOFF, DEMAND, ACTION OR CAUSE OF ACTION (1) ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR (2) IN ANY WAY IN CONNECTION WITH OR PERTAINING OR RELATED TO OR INCIDENTAL TO ANY DEALINGS OF THE PARTIES TO THIS AGREEMENT OR IN CONNECTION WITH THIS AGREEMENT OR THE EXERCISE OF ANY SUCH PARTY’S RIGHTS AND REMEDIES UNDER THIS AGREEMENT OR THE CONDUCT OR THE RELATIONSHIP OF THE PARTIES TO THIS AGREEMENT, IN ALL OF THE FOREGOING CASES WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER IN CONTRACT, TORT OR OTHERWISE. EACH OF THE PARTIES HERETO HEREBY FURTHER ACKNOWLEDGES AND AGREES THAT EACH HAS REVIEWED OR HAD THE OPPORTUNITY TO REVIEW THIS WAIVER WITH ITS RESPECTIVE LEGAL COUNSEL, AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH SUCH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A CONSENT BY ALL PARTIES TO A TRIAL BY THE COURT.
		

		
			28.        Publicity.  No party will (a) use any other party’s proprietary indicia, trademarks, service marks, trade names, logos, symbols, or brand names, or (b) otherwise refer to or identify any other party in advertising, publicity releases, or promotional or marketing publications, or correspondence to third parties without, in each case, securing the prior written consent of such other party.
		

		
			[SIGNATURES ON FOLLOWING PAGE] 
		

		
			
		

		
			

		 

		

			14

		

 

IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to be executed under seal as of the date first above written.
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						Seller:

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						UQM Technologies, Inc.

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						 

				
	
					
						 

					
					
						Name:

					
					
						 

				
	
					
						 

					
					
						Title:

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						Purchaser:

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						American Compass, Inc.

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						 

				
	
					
						 

					
					
						Name:

					
					
						 

				
	
					
						 

					
					
						Title:

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						U.S. BANK NATIONAL ASSOCIATION

				
	
					
						 

					
					
						as Escrow Agent

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						 

				
	
					
						 

					
					
						Name:

					
					
						 

				
	
					
						 

					
					
						Title:

					
					
						 

				

		
			 
		

		
			 
		

		
			

		 

		

			15

		

 

SCHEDULE A
		

		
			To Escrow Agreement
		

		
			 
		

		
			 
		

		
			For
		

		
			Escrow Agreement by and among UQM Technologies, Inc. and American Compass, Inc.
		

		
			Administrative Fees Bill Annually
		

			
					
						 

					
					
						 

				
	
					
						Acceptance Fee

					
					
						Waived

				
	
					
						The acceptance fee includes the administrative review of documents, initial set-up of the account, and other reasonably required services up to and including the closing. This is a one-time fee, payable at closing.

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						One-Time Escrow Agent fee

					$
1,000.00 
				
	
					
						Account administration fee covers the routine duties of escrow agent associated with the administration of the account.  Administration fees are payable in advance.

					
					
						 

				
	
					
						Direct Out of Pocket Expenses

					
					
						 

				
	
					
						Reimbursement of expenses associated with the performance of our duties, including but not limited to publications, legal counsel after the initial close, travel expenses and filing fees.

					
					
						At Cost

				
	
					
						Extraordinary Services

					
					
						 

				
	
					
						Extraordinary services are duties or responsibilities of an unusual nature, including termination, but not provided for in the governing documents or otherwise set forth in this schedule.  A reasonable charge will be assessed based on the nature of the service and the responsibility involved.  At our option, these charges will be billed at a flat fee or at our hourly rate then in effect.

					
					
						 

				

		
			 
		

		
			
		

		
			

		 

		

			 

		

 

Account approval is subject to review and qualification.  Fees are subject to change at our discretion and upon written notice.  Fees paid in advance will not be prorated.  The fees set forth above and any subsequent modifications thereof are part of your agreement.  Finalization of the transaction constitutes agreement to the above fee schedule, including agreement to any subsequent changes upon proper written notice.  In the event your transaction is not finalized, any related out-of-pocket expenses will be billed to you directly.  Absent your written instructions to sweep or otherwise invest, all sums in your account will remain uninvested and no accrued interest or other compensation will be credited to the account.
		

		
			IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT:
		

		
			To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account.  For a non-individual person such as a business entity, a charity, a Trust or other legal entity we will ask for documentation to verify its formation and existence as a legal entity.  We may also ask to see financial statements, licenses, identification and authorization documents from individuals claiming authority to represent the entity or other relevant documentation.
		

		
			
		

		
			

		 

		

			17

		

 

SCHEDULE B
		

		
			to Escrow Agreement
		

		
			 
		

		
			U.S. BANK NATIONAL ASSOCIATION
		

		
			MONEY MARKET ACCOUNT AUTHORIZATION FORM 
DESCRIPTION AND TERMS
		

		
			The U.S. Bank Money Market account is a U.S. Bank National Association (“U.S. Bank”) interest-bearing money market deposit account designed to meet the needs of U.S. Bank’s Corporate Trust Services Escrow Group and other Corporate Trust customers of U.S. Bank. Selection of this investment includes authorization to place funds on deposit and invest with U.S. Bank.
		

		
			U.S. Bank uses the daily balance method to calculate interest on this account (actual/365 or 366). This method applies a daily periodic rate to the principal balance in the account each day. Interest is accrued daily and credited monthly to the account. Interest rates are determined at U.S. Bank’s discretion, and may be tiered by customer deposit amount.
		

		
			The owner of the account is U.S. Bank as Agent for its trust customers. U.S. Bank’s trust department performs all account deposits and withdrawals. Deposit accounts are FDIC Insured per depositor, as determined under FDIC Regulations, up to applicable FDIC limits.
		

		
			U.S. BANK, WHEN ACTING AS AN INDENTURE TRUSTEE OR IN A SIMILAR CAPACITY, IS NOT REQUIRED TO REGISTER AS A MUNICIPAL ADVISOR WITH THE SECURITIES AND EXCHANGE COMMISSION FOR PURPOSES OF COMPLYING WITH THE DODD-FRANK WALL STREET REFORM & CONSUMER PROTECTION ACT. INVESTMENT ADVICE, IF NEEDED, SHOULD BE OBTAINED FROM YOUR FINANCIAL ADVISOR.
		

		
			AUTOMATIC AUTHORIZATION
		

		
			In the absence of specific written direction to the contrary, U.S. Bank is hereby directed to invest and reinvest proceeds and other available moneys in the U.S. Bank Money Market Account. The U.S. Bank Money Market Account is a permitted investment under the operative documents and this authorization is the permanent direction for investment of the moneys until notified in writing of alternate instructions.
		

		
			
		

		
			

		 

		

			18

		

 

SCHEDULE C
		

		
			To Escrow Agreement
		

		
			 
		

		
			Each of the following person(s) is a Seller Representative authorized to execute documents and direct Escrow Agent as to all matters, including fund transfers, address changes and contact information changes, on Purchaser’s behalf (only one signature required):
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						    

					
					
						 

					
					
						    

					
					
						 

				
	
					
						Name

					
					
						 

					
					
						Specimen signature

					
					
						 

					
					
						Telephone No

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Name

					
					
						 

					
					
						Specimen signature

					
					
						 

					
					
						Telephone No

				

		
			 
		

		
			(Note: if only one person is identified above, please add the following language:)
		

		
			The following person not listed above is authorized for call-back confirmations:
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						    

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Name

					
					
						 

					
					
						Telephone Number

				

		
			 
		

		
			Each of the following person(s) is a Purchaser Representative authorized to execute documents and direct Escrow Agent as to all matters, including fund transfers, address changes and contact information changes, on Seller’s behalf (only one signature required):
		

		
			
		

		

		 

		

			19

		

 

	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Jimmy Wang

					
					
						    

					
					
						 

					
					
						    

					
					
						626-375-8636

				
	
					
						Name

					
					
						 

					
					
						Specimen signature

					
					
						 

					
					
						Telephone No

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Jason Xu

					
					
						 

					
					
						 

					
					
						 

					
					
						626-759-8865

				
	
					
						Name

					
					
						 

					
					
						Specimen signature

					
					
						 

					
					
						Telephone No

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Name

					
					
						 

					
					
						Specimen signature

					
					
						 

					
					
						Telephone No

				

		
			 
		

		
			(Note: if only one person is identified above, please add the following language:)
		

		
			The following person not listed above is authorized for call-back confirmations
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						    

					
					
						 

				
	
					
						Neil Dickson

					
					
						 

					
					
						404-870-4617

				
	
					
						Name

					
					
						 

					
					
						Telephone No

				

		
			 
		

		
			
		

		
			

		 

		

			20

		

 

EXHIBIT C
		

		
			FORM OF AMENDED AND RESTATED ARTICLES OF INCORPORATION
		

		
			
		

		
			

		 

		

			21

		

 

FORM OF AMENDED AND RESTATED
		

		
			ARTICLES OF INCORPORATION
		

		
			OF
		

		
			UQM TECHNOLOGIES, INC.
		

		
			 
		

		
			The undersigned corporation, incorporated December 7, 1967 under the laws of Colorado, hereby adopts the following amended and restated articles of incorporation:
		

		
			ARTICLE IX
		

		
			The name of the corporation is UQM Technologies, Inc.
		

		
			ARTICLE X
		

		
			The corporation shall have perpetual existence.
		

		
			ARTICLE XI
		

		
			The purposes of the corporation is to engage in any lawful act or activity for which a corporation may be organized under the laws of Colorado.
		

		
			ARTICLE XII
		

		
			The authorized capital stock of the corporation is 150,000,000 shares of common stock with a par value of $.01 per share.  The capital stock, after the amount of the subscription price has been paid in, shall not be subject to assessment to pay the debts of the corporation.
		

		
			ARTICLE XIII
		

		
			Cumulative voting in the election of directors shall not be permitted.
		

		
			ARTICLE XIV
		

		
			The governing board of this corporation shall be known as directors, and the number of directors may from time to time be increased or decreased in such manner as shall be provided by the bylaws of this corporation, provided that the number of directors shall not be reduced to less than three.
		

		
			
		

		
			

		 

		

			22

		

 

ARTICLE XV
		

		
			Meetings of shareholders may be held at such time and place as the bylaws shall provide.  At all meetings of shareholders, one-third of all shares entitled to vote shall constitute a quorum.  
		

		
			ARTICLE XVI
		

		
			The vote to approve (i) an amendment to the articles of incorporation of the corporation, (ii) a plan or merger or a plan of share exchange, (iii) the sale, lease, exchange  or other disposition of substantially all of the corporation’s property other than in the usual and regular course of business, or (iv) a proposal to dissolve the corporation as contemplated by Colorado Revised Statutes Section 7-114-102, shall require the approval of a majority of the votes entitles to be cast on the matter in the case of a single voting group or, if required by Colorado law, by the approval of each voting group entitled to vote separately on the matter by a majority of the votes entitles to be cast on the matter for that voting group.
		

		
			ARTICLE XVII
		

		
			Any action required or permitted to be taken at a meeting of the shareholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by shareholders holding a majority of the then outstanding shares entitled to vote with respect to the subject matter thereof, subject to the provisions of the Colorado Business Corporation Act.  
		

		
			ARTICLE XVIII
		

		
			No shareholder in the corporation shall have the preemptive right to subscribe to any or all additional issues of stock and/or other securities of any or all classes of this corporation or securities convertible into stock or carrying stock purchase warrants, options or privileges.
		

		
			ARTICLE XIX
		

		
			The corporation shall indemnify and advance expenses to any person who is or was a director of the corporation to the maximum extent now or hereafter permitted by the Colorado Business Corporation Act or any successor law.  The corporation shall indemnify and advance expenses to any person who is or was an officer of the corporation to the same extent as if such person were a director.  The corporation may, in its discretion, but shall not be obligated to, indemnify any person who is or was an officer, agent or employee of the corporation to a greater extent than a director.  No amendment to or repeal of this Article shall adversely affect the rights of any person who is or was a director or officer of
		

		
			
		

		
			

		 

		

			23

		

 

the corporation in respect of acts or omissions occurring prior to the effective date of the amendment or repeal
		

		
			ARTICLE XX
		

		
			No director of this corporation shall have any personal liability for monetary damages to the corporation or its shareholders for breach of his fiduciary duty as a director, except that this provision shall not eliminate or limit the personal liability of a director to the corporation or its shareholders for monetary damages for: (i) any breach of the director's duty of loyalty to the corporation or its shareholders; (ii) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (iii) voting for or assenting to a distribution in violation of Colorado Revised Statutes Section 7-106-401 or the amended and restated articles of incorporation if it is established that the director did not perform his duties in compliance with Colorado Revised Statutes Section 7-108-401, provided that the personal liability of a director in this circumstance shall be limited to the amount of the distribution which exceeds what could have been distributed without violation of Colorado Revised Statutes Section 7-106-401 or the restated and amended articles of incorporation; or (iv) any transaction from which the director directly or indirectly derives an improper personal benefit.  Nothing contained in these amended and restated articles of incorporation will be construed to deprive any director of his right to all defenses ordinarily available to a director nor will anything in these articles of incorporation be construed to deprive any director of any right he may have for contribution from any other directors or other person.
		

		
			
		

		
			

		 

		

			24

		

 

EXHIBIT D
		

		
			FORM OF LEGAL OPINION
		

		
			
		

		
			

		 

		

			25

		

 

_______, 2016 
		

		
			 
		

		
			[Buyer]
		

		
			____________
		

		
			____________
		

		
			 
		

		
			 
		

		
			Re:       UQM Technologies, Inc.
		

		
			Ladies and Gentlemen:
		

		
			We have acted as counsel to UQM Technologies, Inc., a Colorado corporation (the “Company”), in connection with the Stock Issuance and Purchase Agreement (the “Agreement”), dated as of __________, 2016, among the Company, [Hybrid Kinetic Group, Limited] and _______________.  This opinion is being delivered pursuant to Section 6.02(h) of the Agreement.  All capitalized terms which are defined in the Agreement shall have the same meanings when used herein, unless otherwise specified.
		

		
			In connection with this opinion, we have examined the Agreement.  We have also examined originals or copies, certified or otherwise identified to our satisfaction, of the Amended and Restated Articles of Incorporation of the Company as filed with the Office of the Secretary of State of the State of Colorado [on the date hereof]  and the Bylaws of the Company and such other corporate records, agreements and instruments of the Company, certificates of public officials and officers of the Company, and such other documents, records and instruments, and we have made such legal and factual inquiries, as we have deemed necessary or appropriate as a basis for us to render the opinions hereinafter expressed.  In our examination of the foregoing, we have assumed the genuineness of all signatures, the legal competence and capacity of natural persons, the authenticity of documents submitted to us as originals and the conformity with authentic original documents of all documents submitted to us as copies or by facsimile or other means of electronic transmission, or which we obtained from the Commission’s Electronic Data Gathering, Analysis and Retrieval system (“Edgar”).  If any document we examined in
		

		
			
		

		
			

		 

		

			26

		

 

printed, word processed or similar form has been filed with the Commission on Edgar, we have assumed that the document so filed is identical to the document we examined except for formatting changes.
		

		
			The opinions expressed herein are limited solely to the federal law of the United States, and the law of the State of Colorado.  Our opinions herein reflect only the application of applicable Colorado State law (excluding (A) all laws, rules and regulations of cities, counties and other political subdivisions of each such State and (B) the securities, blue sky, environmental, employee benefit, pension, antitrust and tax laws of such State, as to which we express no opinion) and the Federal laws of the United States of America (excluding the federal securities,  environmental, employee benefit, pension, tax and antitrust laws, as to which we express no opinion).  The opinions set forth herein are made as of the date hereof and are subject to, and may be limited by, future changes in the factual matters set forth herein, and we undertake no duty to advise you of the same.  The opinions expressed herein are based upon the law in effect (and published or otherwise generally available) on the date hereof, and we assume no obligation to revise or supplement these opinions should such law be changed by legislative action, judicial decision or otherwise.  In rendering our opinions, we have not considered, and hereby disclaim any opinion as to, the application or impact of any laws, cases, decisions, rules or regulations of any other jurisdiction, court or administrative agency.  
		

		
			Based upon the foregoing and in reliance thereon, and subject to the assumptions, comments, qualifications, limitations and exceptions set forth herein, we are of the opinion that:
		

		
			
		

		 

		

			27

		

 

		
			Article XXIThe Shares which are being issued on the date hereof pursuant to the Agreement have been duly authorized when issued and delivered by the Company pursuant to the Agreement against payment of the consideration set forth in the Agreement, will be validly issued, fully paid and nonassessable.  
		

		
			Article XXIIThe authorized capital stock of the Company consists of 150,000,000 shares of Common Stock, with a par value of $.01 per share.
		

		
			Article XXIIIThe execution and delivery by the Company of the Agreement, the performance by the Company of its obligations thereunder and the consummation by the Company of the transactions contemplated thereby have been duly authorized by all requisite corporate action on the part of the Company.
		

		
			Article XXIVThe execution, delivery and performance by the Company of the Agreement and the consummation of the Transaction, do not and will not: (a) result in a violation or breach of any provision of the Amended and Restated Articles of Incorporation or Bylaws of the Company; (b) result in a violation or breach of any provision of applicable Federal or Colorado State law, rule or regulation that we, based on our experience, recognize as being applicable to the Company in a transaction of this type; or (c) require the consent, notice or other action by any Person under, conflict with, result in a violation or breach of, constitute a default under or result in the acceleration of any material agreement of the Company. For purposes of the foregoing, we have assumed that the only material agreements of the Company are those listed as exhibits to the Company’s annual report on Form 10-K for the fiscal year ended March 31, 2016.
		

		
			We do not render any opinions except as set forth above. This opinion letter is being delivered by us solely for your benefit pursuant to the provisions of Section 6.02(h) of the Agreement.  By your acceptance of this opinion letter, you agree that it may not be relied upon, circulated, quoted or otherwise referred to by any other person or for any other purpose, including by you, without our prior written consent in each instance.
		

		
			Very truly yours,
		

		
			
		

		
			

		 

		

			28

		

 

EXHIBIT E
		

		
			FORM OF BYLAW AMENDMENT
		

		
			
		

		
			

		 

		

			29

		

 

AMENDMENT NUMBER 1
		

		
			TO THE BYLAWS OF
		

		
			UQM TECHNOLOGIES, INC.
		

		
			This Amendment Number 1 (the “Amendment”) to the Bylaws (the “Bylaws”) of UQM Technologies, Inc. (the “Corporation”) is dated as of ____, 2016.
		

		
			WHEREAS, Section 2.13 of the Bylaws requires unanimous written consent of the shareholders to take action without a meeting; and
		

		
			WHEREAS, the board of directors of the Corporation (the “Board of Directors”) deems it to be in the best interst of the Corporation that shareholders be permitted to take action without a meeting upon the written consent of a majority of the shareholders.
		

		
			NOW, THEREFORE, BE IT RESOLVED, in consideration of the above premises, each of the parties hereto agrees as follows:
		

		
			1.   Section 2.13 of the Bylaws shall be amended and restated in its entirety as follows:
		

		
			“Action Without a Meeting.  (a) Any action required or permitted to be taken at a meeting of the shareholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by  shareholders holding a majority of the then outstanding shares entitled to vote with respect to the subject matter thereof.  Such consent (which may be signed in counterparts) shall have the same force and effect as a vote of holders of a majority of the then outstanding shares entitled to vote thereon and may be stated as such in any document.  Unless the consent specifies a different effective date, action taken without a meeting pursuant to a consent in writing as provided herein shall be effective when holders of a majority of the shares entitled to vote theron have signed the consent.  The record date for determining shareholders entitled to take action without a meeting is the date the first shareholder signs the consent.  All consents signed pursuant to this Section 2.13 shall be delivered to the secretary of the corporation for inclusion in the minutes or for filing with the corporate records. (b) If action is taken under subsection (a) of this section with less than unanimous consent of all shareholders entitled to vote upon the action, the corporation or shareholders taking the action shall, upon receipt by the corporation of all writings necessary to effect the action, give notice of the action to all shareholders who were entitled to vote upon the action but who have not consented to the action in the manner provided in subsection (a) of this section. The notice shall contain or be accompanied by the same material, if any, that would have been required
		

		
			 
		

		
			

		 

		

			30

		

 

to be given to shareholders in or with a notice of the meeting at which the action would have been submitted to the shareholders.” 
		

		
			2.   That on an after the date of this Amendment, except as otherwise specifically amended herein, the Bylaws remain in full force and effect, and this Amendment and the Bylaws shall be read, taken, and construed as one and the same instrument.
		

		
			3.   This Amendment shall be governed by and construed in accordance with the laws of the State of Colorado.
		

		
			4.   This Amendment may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.
		

		
			5.   The parties hereby incorporate the recitals herein and make them a part hereof.
		

		
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This Amendment is adopted by the undersigned as of the date first written above.
		

		
			 
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				

		
			 
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						Being all of the directors of

				
	
					
						 

					
					
						 

					
					
						UQM Technologies, Inc.

				

		
			 
		

		 

		

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