Document:

Unassociated Document

    Exhibit
      10.1

     

    FORM
      OF SUBSCRIBER CONSENT

    

    Reference
      is made to the current offering (the “Offering”) by Zion Oil & Gas, Inc.
      (“Zion”) of “Units” of Zion’s securities, at $10.00 per Unit. Each Unit consists
      of (i) one share of common stock, par value $.01 per share and (ii) one warrant
      to purchase one share of common stock at a per share exercise price equal to
      $7.00. The undersigned has subscribed for Units pursuant to the Offering and,
      in
      accordance with the signed Subscription Agreement relating to such subscription,
      remitted the subscription amount into an escrow account (the “Escrow Account”)
      maintained at Sterling Trust Company.

    

    The
      Undersigned understands that under the terms of the Offering, Zion cannot issue
      any of the Units until it has received and accepted subscriptions and payment
      for a minimum of 325,000 Units ($3,250,000)
      by October
      11, 2008 (the
      “Minimum Offering Date”). Unless Zion receives the minimum amounts by such date,
      then Zion will be required to refund to the Undersigned the subscription amounts
      with interest.

    

    In
      order
      to assist Zion is raising the minimum amount under the Offering, the Subscriber
      consents to the extension of the Offering dates as described below.

     

    

        By
          its
          signature below, the Undersigned hereby agrees that the amounts it remitted
          to
          the Escrow Account for the purchase of the Units may be maintained in such
          account beyond October 11, 2008 to an extended Minimum Offering Date which
          will
          be the 90 th
          day
          after the effectiveness of the post-effective amendment to the current
          registration statement relating to the Offering that Zion will be required
          to
          file in order to seek an extension of the Offering Period (which may, in
          Zion’s
          discretion, be extended by it for up to an additional 60
          days).

      

        By
          its
          signature below, the Undersigned also agrees that the final date of termination
          of the Offering shall be extended beyond the current termination date of
          January
          9, 2009 to a date which is the earlier
          of (i)
          180 days following the day on which Zion holds its initial closing on the
          amounts in the Escrow Account (which may, in Zion’s sole discretion, be extended
          by it for up to 60 days), (ii) the date on which a total 2,500,000 Units
          have
          been subscribed and accepted, and (iii) such date as announced by Zion
          on no
          less than two trading days prior notice.

       

    

    

    IN
      WITNESS WHEREOF, the Undersigned has executed this representation as of the
      date
      set forth below.

    

    Signature
      of Subscriber ____________________  Signature
      of Co-Subscriber ____________________ 

    

    Printed
      Name ____________________________ Printed
      Name _______________________________

    

    Date
      ___________    Date
      ___________ 

    

    

    If
      the
      undersigned is not a natural person then the person executing this letter on
      behalf of the Undersigned has been duly authorized to execute and deliver
      such.

    

    Signature
      of Authorized Signatory of Subscribing Entity
      ______________________

    

    Printed
      Name of Authorized Signatory ______________________

    

    Title
      of
      Authorized Signatory __________________________

    

    THE
      COMPLETED AND SIGNED FORM SHOULD BE SENT TO ZION:

    

    BY
      FAX TO: 214-221-6510 OR

    

    BY
      EMAIL TO: dallas@zionoil.com 

    

    THE
      COMPLETED AND SIGNED FORM SHOULD THEN BE PUT INTO THE ENCLOSED ENVELOPE AND
      RETURNED TO ZION OIL & GAS, INC.

    

    AS
      SOON AS POSSIBLE, PLEASESTOCK
      EXCHANGE AGREEMENT

     

    THIS
      STOCK EXCHANGE AGREEMENT (this
      “Agreement”)
      is
      made and entered into as of September 29th
      2008, by
      and among SOLAR
      THIN FILMS, INC.,
      a
      Delaware corporation (the “Parent”);
      KRAFT
      ELEKTRONIKAI ZRT,
      a
      Hungarian corporation, to be renamed STF
      TECHNOLOGIES, LTD.
      (the
“Buyer”);
      BUDASOLAR
      TECHNOLOGIES CO. LTD.,
      a
      Hungarian corporation (the “Company”);
      NEW
      PALACE INVESTMENTS LTD.,
      a
      Cyprus corporation (“NPI”);
      ISTVAN
      KRAFCSIK,
      an
      individual (“I.
      Krafcsik”);
      and
ATTILA
      HORVATH,
      an
      individual (“A.
      Horvath”).
      NPI,
      I. Krafcsik and A. Horvath are sometimes individually referred to as a
“Company
      Stockholder”
and
      collectively, as the “Company
      Stockholders.”
The
      Parent, the Buyer, the Company, and the Company Stockholders are hereinafter
      sometimes individually referred to as a “Party”
and
      collectively referred to as the “Parties.”

     

    Recitals

     

    A. The
      Company Stockholders currently own of record and beneficially 100% of the
      outstanding registered capital of the Company (the “Subject
      Company Quotas”)
      as
      hereinafter defined.

     

    B. The
      Parent currently owns of record and beneficially 100% of the outstanding capital
      stock or share capital of the Buyer (the “Buyer
      Shares”).

     

    C. Upon
      the
      terms and subject to the conditions set forth in this Agreement, the Buyer
      desires to acquire from the Company Stockholders the Subject Company Quotas.
      Company Stockholders desire to hand over the Subject Company Quotas for a
      consideration of receiving 40% of the Buyers Shares on a fully diluted basis
      (the “Minority
      Buyer Equity”).
      

     

    D. Buyer
      desires to acquire the Subject Company Quotas, and the Company desires to hand
      over such Subject Company Quotas, upon the terms and subject to the conditions
      set forth herein. 

     

    Agreement

     

    NOW,
      THEREFORE, in consideration of the premises and of the mutual covenants
      contained herein, the Parties agree as follows:

     

    ARTICLE
      I. –
      TRANSFER OF SUBJECT COMPANY QUOTAS

     

    1.1 Transfer
      of Subject Company Quotas.

     

    (a) On
      the
      terms and subject to the conditions of this Agreement, at the Closing referred
      to in Section 3.1 hereof, the Company Stockholders shall convey, assign,
      transfer and deliver to Buyer, and Buyer shall acquire and accept delivery
      of
      the Subject Company Quotas that is the number of quotas of registered capital
      of
      the Company as shall represent one hundred percent (100%) of the issued and
      outstanding registered capital of the Company, on a fully-diluted basis, after
      giving effect to the exercise of all options, warrants or other rights to
      acquire Company registered capital, and all securities convertible into Company
      registered capital that is outstanding as of the Closing Date. The Subject
      Company Quotas shall be delivered to Buyer by the Company Stockholders, free
      and
      clear of any and all liens, mortgages, adverse claims, charges, security
      interests, encumbrances, other restrictions or limitations, or rights of any
      third persons whatsoever (collectively, “Liens”).

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b) To
      effect
      the transfers contemplated by Section 1.1(a), at the Closing, the Company
      Stockholders shall deliver or cause to be delivered to Buyer, against
      consideration therefor in accordance with Section 2.2 hereof, evidence in a
      form
      acceptable to Buyer of the transfer from Company Stockholders to Buyer of the
      Subject Company Quotas, on the books of the Company.

     

    ARTICLE
      II. EXCHANGE
      SHARES AND CAPITALIZATION OF BUYER 

     

    2.1 Exchange
      Shares.
      On the
      Closing Date, against delivery of evidence in a form acceptable to Buyer of
      the
      transfer from the Company Stockholders to the Buyer of the Subject Company
      Quotas on the books of the Company the Parent shall deliver, transfer and assign
      to the Company Stockholders (pro-rata as among each of the Company Stockholders
      as their respective interests in the Subject Company Quotas bear to each other,
      all set forth on Schedule 2.1 annexed hereto and made a part hereof), that
      number of fully paid up shares of capital stock or share capital of the Buyer
      (the “Minority
      Buyer Equity”)
      as
      shall represent forty percent (40%) of the issued and outstanding Buyer’s Shares
      owned by the Parent, on a fully-diluted basis, after giving effect to the share
      capital increase as set forth here below and the exercise of all options,
      warrants or other rights to acquire Buyer capital stock or share capital, and
      all securities convertible into Buyer capital stock or share capital that is
      outstanding as of the Closing Date (the “Minority
      Interest).

     

    2.2 Capitalization
      of Parent Loans and Company Stockholder Loans; Repayment.

     

    (a) Parent
      Loans. If
      permitted under Hungarian law, on or before the Closing Date, the Parent shall
      eliminate the stockholder deficit in the Buyer by exchanging the total
      outstanding amount of all loans and advances made by the Parent to the Buyer
      prior to the date of this Agreement (the “Parent
      Loans”)
      for an
      amount of preferred or preference shares of the Buyer (the “Buyer
      Preference Shares”)
      set
      forth below, so that as at the Closing Date, the Buyer shall have either a
      positive stockholders equity or capital of not less than United States One
      Thousand Dollars (USD $1,000.00). If the issuance of Buyer Preference Shares
      is
      not permitted under Hungarian law, on the Closing Date, the Parent shall
      eliminate the stockholder deficit in the Buyer by cancelling all Parent Loans,
      so that as at the Closing Date, the Buyer shall have either a positive
      stockholders equity or capital of not less than United States One Thousand
      Dollars (USD $1,000.00).

     

    (b) Buyer
      Preference Shares to Parent. If
      and to
      the extent issued, the Buyer Preference Shares to be issued to the
      Parent:

     

    (i)
      shall
      pay an annual dividend at a rate calculated at the rate of LIBOR for twelve
      month United States dollars interbank deposits as fixed by BBA plus a margin
      of
      three (3) percent; such annual dividend shall be accrued and paid annually
      in
      arrears only out of Excess Cash (as that term is defined in Section
      11.8
      of this
      Agreement); and

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    (ii)
      shall be in such stated amount or value as shall equal the amount of the Parent
      Loans plus all accrued interest thereon as at the Closing Date; 

     

    (iii)
      shall not be convertible into or exchangeable for Buyer Shares or other equity
      capital of the Buyer or the Company, and 

     

    (iv)
      shall be subject and subordinated to all creditors of Buyer and its consolidated
      Subsidiaries, including the Company.

     

    (c) Company
      Stockholder Loans.If
      permitted under Hungarian law, on or before the Closing Date, the Company
      Stockholders shall eliminate the stockholder deficit in the Company by
      exchanging the total outstanding amount of all loans and advances made by any
      or
      all of the Company Stockholders or their Affiliates to the Company prior to
      the
      date of this Agreement (the “Company
      Stockholder Loans”)
      for an
      amount of Buyer Preference Shares set forth below, so that as at the Closing
      Date, the Company shall have either a positive stockholders equity or capital
      of
      not less than United States One Thousand Dollars (USD $1,000.00). In either
      event, the Buyer Preference Shares issued in exchange for Company Stockholder
      Loans, or (if such exchange is not permitted under Hungarian law), the notes
      or
      other instruments evidencing the Company Stockholder Loans shall contain the
      terms and conditions set forth in Section
      2.2(d)
      below.

     

    (d) Terms
      of Company Stockholder Loans or Buyer Preference Shares Issued to Company
      Stockholders. The
      Company Stockholder Loans or the Buyer Preference Shares to be issued to the
      Company Stockholders or their Affiliates, as applicable:

     

    (i) shall
      pay
      an annual interest or dividends at a rate calculated at the rate of LIBOR for
      twelve month United States dollars interbank deposits as fixed by BBA plus
      a
      margin of three (3%) percent; such annual interest or dividends shall be accrued
      and paid annually in arrears only out of Excess Cash (as that term is defined
      in
Section
      11.8
      of this
      Agreement); and

     

    (ii) shall
      be
      in such principal amount or stated amount or value as shall equal the amount
      of
      the Company Stockholder Loans funded to the Company in cash, plus all accrued
      interest thereon, as at the Closing Date; 

     

    (iii) shall
      not
      be convertible into or exchangeable for Buyer Shares or other equity capital
      of
      the Buyer or the Company (other than Buyer Preference Shares), and 

     

    (iv) shall
      be
      subject and subordinated to all creditors of Buyer and its consolidated
      Subsidiaries, including the Company.

     

    (e) Purchase
      of Company Stockholder Loans or Buyer Preference Shares to Company
      Stockholders.
      On a
      date which shall be the earliest
      to occur
      of (i) the Call Option Payment Date upon the exercise by the Parent of the
      Call
      Option (as contemplated by Section
      8.6
      of this
      Agreement; or (ii) the payment by the Parent of the 2014 Buy-out Price, as
      contemplated by Section
      8.5(e)
      of this
      Agreement; or (iii) five (5) years from the Closing Date, the Parent shall
      purchase from the Company Stockholders or their Affiliates all of the Company
      Stockholder Loans or the Buyer Preference Shares issued pursuant to Section
      2.2(d)
      above,
      as applicable, in each case, for a cash payment as shall equal 100% of the
      total
      principal amount of the Company Stockholder Loans or the stated amount or value
      of such Buyer Preference Shares issued in exchange therefore, in each case,
      calculated in accordance with Section
      2.2(d)(ii)
      above,
      plus all accrued and unpaid interest or dividends payable thereon from the
      Closing Date to the date of purchase.

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    2.3 Increase
      of Share Capital of Buyer.

     

    (a) In
      addition to the transactions contemplated by Section
      2.2
      above,
      for no additional consideration, the Parent shall irrevocably increase the
      shareholders’ equity and capital of the Buyer (the "Share
      Capital Increase")
      by
      investing in the Buyer the sum of United States Three Million (USD $3,000,000)
      Dollars equivalent in Hungarian Forints calculated at the then current exchange
      rate. The Share Capital Increase shall be paid as set forth below in this
      Section 2.3(a). 

     

    (i) On
      the
      date of execution of this Agreement; the Parent shall provide the Company with
      the sum of United States Two Hundred and Fifty Thousand Dollars (USD $250,000);
      and (ii) commencing October 31, 2008 and on or before the last business day
      of
      each succeeding month and until the Closing Date, the Parent shall provide
      an
      additional Two Hundred and Fifty Thousand Dollars (USD $250,000) to the Company
      in such month (clause (i) and (ii) hereinafter collectively, the “Deposit”).
      The
      Deposit to the Company is being paid in consideration of services to be rendered
      to the Buyer pursuant to the terms of a cooperation agreement, dated of even
      date among the Company, the Parent and the Buyer (the “Interim
      Agreement”).

     

    (ii) On
      the
      Closing Date, the Parent shall provide the Buyer with (A) United States Three
      Million (USD $3,000,000) Dollars in cash, less
      (B) the
      aggregate amount of the Deposit paid in cash prior to the Closing Date (the
      “Closing
      Payment”).
      

     

    (iii) In
      addition on the Closing Date, any debts or other obligations of the Company
      that
      are then owed to the Buyer or the Parent shall terminate. 

     

    (b) Notwithstanding
      anything to the contrary contained herein, in the event that this Agreement
      shall terminate or the Closing shall not have occurred by the close of business
      (New York, New York USA time) on February 15, 2009, then and in such event
      the
      Company shall thereafter continue to render services to the Buyer under the
      Interim Agreement until such time as the aggregate value of the services to
      be
      rendered by the Company to the Buyer (at the rates set forth in the Interim
      Agreement) shall equal (i) the aggregate amount of the Deposit paid less
      (ii) the
      invoiced value of the services provided by the Company to the Buyer prior to
      the
      termination of this Agreement. 

     

    2.4
       Change
      of Corporate Name of Buyer .

     

    Prior
      to
      the Closing Date, the Buyer shall amend its articles of organization under
      applicable Hungarian law so as to change the corporate name of the Buyer from
      “Kraft
      Elektronikai Zrt”
to
      “STF
      Technologies, Ltd.”
or
      such other corporate name as the Parties hereto shall mutually agree
      upon.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    
      

        ARTICLE
          III. CLOSING

      

    

     

    3.1 Closing.
      The
      consummation of the transfer of the Subject Company Quotas, transfer of the
      Minority Buyer Equity, consummation of the Investment and the other transactions
      contemplated by this Agreement (the “Closing”)
      will
      take place at 10:00 a.m. (local time) on a date to be specified by Buyer, which
      shall be no later than the fifth business day after satisfaction or waiver
      of
      the conditions set forth in Article VII of this Agreement (the "Closing
      Date"),
      at
      the offices of Norr Stiefenhofer Lutz, Budapest, Hungary, counsel to the Buyer,
      unless another date, time or place is agreed to in writing by the Parties
      hereto. In no event, however, shall the Closing Date occur after February 15,
      2009, unless otherwise mutually agreed upon by the Company Stockholders and
      the
      Buyer or the Parent.

     

    3.2 Deliveries
      by the Company Stockholders.
      At or
      prior to the Closing, the Company Stockholders shall deliver to
      Buyer:

     

    (i) Member’s
      list of the Company representing all, and not less than all, of the Subject
      Company Quotas, with powers, Member’s meeting decisions and modified Articles of
      Association appropriate for the transfer of the Subject Company Quotas
      attached;

     

    (ii) the
      minute books of the Company;

     

    (iii) a
      certificate executed by the Company and the Company Stockholders to the effect
      that the conditions set forth in Section 7.1 have been satisfied;

     

    (iv) possession
      of all originals and copies of agreements, instruments, documents, deeds, books,
      records, files and other data and information within the possession of the
      Company and the Company Stockholders or any Affiliate of the Company
      Stockholders pertaining to the Company (collectively, the “Records”);
      provided,
      however,
      that
      the Company Stockholders may retain (1) copies of any tax returns and copies
      of
      Records relating thereto; (2) copies of any Records that the Company
      Stockholders is reasonably likely to need for complying with requirements of
      law; and (3) copies of any Records that in the reasonable opinion of the Company
      Stockholders will be required in connection with the performance of their
      obligations under Article VIII hereof; and

     

    (v) evidence
      satisfactory to Buyer that Buyer’s designees and the Company Stockholders shall
      be the only authorized signatories with respect to the Company’s various
      accounts, credit lines, safe deposit boxes or vaults set forth or required
      to be
      set forth in Schedule
      5.17.

     

    3.3   Deliveries
      by Buyer and Parent.
      At or
      prior to the Closing, the Buyer and/or the Parent shall deliver to the Company
      Stockholders:

     

    (i) certificates
      evidencing the Minority Buyer Equity representing all of the Minority Interest
      in the Buyer pursuant to Section 2.1 hereof,

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    (ii) evidence
      satisfactory to the Company Stockholders of completion of the transactions
      contemplated pursuant to Section 2.2 and 2.3 hereof; 

     

    (iii) a
      certificate executed by an authorized officer of the Buyer or the Parent, on
      behalf of the Buyer and the Parent, to the effect that the conditions set forth
      in Section 7.2 have been satisfied; and

     

    (iv) modified
      articles of incorporation of the Buyer in form and content acceptable to the
      Parties.

     

    3.4 Termination
      in Absence of Closing.

     

    (a) Subject
      to the provisions of Section 3.4(b) and (c), if the Closing has not occurred
      by
      the close of business on February 15, 2009, then any Party hereto may thereafter
      terminate this Agreement by written notice to such effect, to the other Parties
      hereto, without liability of or to any Party to this Agreement or any
      shareholder, director, officer, employee or representative of such Party unless
      the reason for Closing having not occurred is (i) such Party’s willful breach of
      the provisions of this Agreement, or (ii) if all of the conditions to such
      Party’s obligations set forth in Article VII have been satisfied or waived in
      writing by the date scheduled for the Closing pursuant to Section 4.1, the
      failure of such Party to perform its obligations under this Article III on
      such
      date; provided,
      however,
      that
      any termination pursuant to this Section 3.4 shall not relieve any Party hereto
      who was responsible for Closing having not occurred as described in clauses
      (i)
      or (ii) above of any liability for (x) such Party’s willful breach of the
      provisions of this Agreement, or (y) if all of the conditions to such Party’s
      obligations set forth in Article VII have been satisfied or waived in writing
      by
      the date scheduled for the Closing pursuant to Section 3.1, the failure of
      such
      Party to perform its obligations under this Article III on such
      date.

     

    (b) Notwithstanding
      the approval of the Board of Directors of Buyer, this Agreement and the
      transactions contemplated herein may be terminated and abandoned at any time
      on
      or prior to the Closing Date by the Buyer, if:

     

    (i) any
      representation or warranty made herein for the benefit of Buyer, or any
      certificate, schedule or document furnished to Buyer pursuant to this Agreement
      is untrue in any material respect; or

     

    (ii) The
      Company, the Company Stockholders or any of their Affiliates shall have
      defaulted in any material respect in the performance of any material obligation
      under this Agreement on their part to be performed.

     

    (c) This
      Agreement and the transactions contemplated herein may be terminated and
      abandoned at any time on or prior to the Closing Date by the Company
      Stockholders, if:

     

    (i) any
      representation or warranty made herein for the benefit of the Company
      Stockholders, or any certificate, schedule or document furnished to the Company
      Stockholders pursuant to this Agreement is untrue in any material respect;
      or

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    (ii) The
      Buyer, the Parent or any of their Affiliates shall have defaulted in any
      material respect in the performance of any material obligation under this
      Agreement on their part to be performed.

     

    ARTICLE
      IV. REPRESENTATIONS
      AND WARRANTIES OF THE COMPANY AND THE COMPANY STOCKHOLDERS

     

    Each
      of
      (A) the Company; and (B) the Company Stockholders do hereby jointly and
      severally represent and warrant to the Buyer that:

     

    4.1 Corporate
      Existence and Qualification.
      The
      Company is a corporation duly organized, validly existing and in good standing
      under the laws of Hungary. The Company has the corporate power to own, manage,
      lease and hold its Properties and to carry on its business as and where such
      Properties are presently located and such business is presently conducted;
      and
      the Company is qualified to do business as a foreign corporation and in good
      standing in each jurisdiction in which it is required by law to be so
      qualified.

     

    4.2 Authority,
      Approval and Enforceability.
      This
      Agreement has been duly executed and delivered by the Company and the Company
      Stockholders, and each of the Company and the Company Stockholders have all
      requisite power and legal capacity to execute and deliver this Agreement and
      all
      Exhibits executed and delivered or to be executed and delivered in connection
      with the transactions provided for hereby, to consummate the transactions
      contemplated hereby and by the Exhibits, and to perform its obligations
      hereunder and under the Exhibits. This Agreement and each Exhibit to which
      any
      of the Company and/or the Company Stockholders is a Party constitutes, or upon
      execution and delivery will constitute, the legal, valid and binding obligation
      of such Party, enforceable in accordance with its terms, except as such
      enforcement may be limited by general equitable principles or by applicable
      bankruptcy, insolvency, moratorium, or similar laws and judicial decisions
      from
      time to time in effect which affect creditors’ rights generally. 

     

    4.3 The
      Subject Company Quotas and Corporate Records.

     

    (a) The
      Company’s registered capital is HUF 1.000.000 representing 100% of the Quota
      owned by the Company Stockholders in the amounts set forth on Schedule
      2.1
      annexed
      hereto and made a part hereof. The Subject Company Quotas are owned by the
      Company Stockholders free and clear of all Liens. Except for the Subject Company
      Quotas, there are no quotas or shares of capital stock or other equity
      securities of the Company authorized, issued or outstanding. 

     

    (b) All
      of
      the outstanding Subject Company Quotas of the Company are duly authorized,
      validly issued, fully paid and non-assessable and were not issued in violation
      of any: (i) preemptive or other rights of any Person to acquire securities
      of
      the Company, or (ii) applicable securities laws of Hungary, and the rules and
      regulations promulgated thereunder (collectively, the “Hungarian
      Securities Laws”).
      There
      are no outstanding subscriptions, options, convertible securities, rights
      (preemptive or otherwise), warrants, calls or agreements relating to any of
      the
      Subject Company Quotas or other quotas of capital stock or other securities
      of
      the Company. Upon delivery to Buyer at the Closing of documents set out in
      Section
      3.2.
      (i)
      appropriate to transfer the ownership of the Subject Company Quotas,, indicating
      good and valid title to the Subject Company Quotas will pass to Buyer, free
      and
      clear of all Liens of any kind, other than those arising from acts of
      Buyer.

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    (c) The
      copies of the Articles of Incorporation and Bylaws of the Company provided
      to
      Buyer are true, accurate, and complete and reflect all amendments made through
      the date of this Agreement. The Company’s minute books and member’s lists made
      available to Buyer for review were correct and complete as of the date of such
      review, no further entries have been made through the date of this Agreement,
      and such minute books contain an accurate record of all quotaholder and
      corporate actions of the shareholders and directors (and any committees thereof)
      of the Company taken by written consent or at a meeting since inception. All
      corporate actions taken by the Company have been duly authorized or ratified.
      All accounts, books, ledgers and official and other records of the Company
      fairly and accurately reflect all of the Company’s transactions, properties,
      assets and liabilities.

     

    (d) The
      Company does not own, directly or indirectly, any outstanding voting securities
      of or other interests in any other corporation, partnership, joint venture
      or
      other business entity.

     

    4.4 No
      Defaults or Consents.
      Except
      as otherwise set forth in Schedule
      4.4
      hereto,
      the execution and delivery of this Agreement and the Exhibits by Company
      Stockholders and the Company and the performance by Company Stockholders and
      the
      Company of their obligations hereunder and thereunder will not violate any
      provision of law or any judgment, award or decree or any indenture, agreement
      or
      other instrument to which the Company Stockholders and/or the Company is a
      Party, or by which the properties or assets of the Company Stockholders or
      the
      Company is bound or affected, or conflict with, result in a breach of or
      constitute (with due notice or lapse of time or both) a default under, any
      such
      indenture, agreement or other instrument, in each case except to the extent
      that
      such violation, default or breach could not reasonably be expected to delay
      or
      otherwise significantly impair the ability of the Parties to consummate the
      transactions contemplated hereby.

     

    4.5 No
      Company Defaults or Consents.
      Except
      as otherwise set forth in Schedule
      4.5
      attached
      hereto, neither the execution and delivery of this Agreement nor the carrying
      out of any of the transactions contemplated hereby will:

     

    (i) violate
      or conflict with any of the terms, conditions or provisions of the charter
      or
      bylaws of the Company;

     

    (ii) violate
      any Legal Requirements applicable to the Company; 

     

    (iii) violate,
      conflict with, result in a breach of, constitute a default under (whether with
      or without notice or the lapse of time or both), or accelerate or permit the
      acceleration of the performance required by, or give any other Party the right
      to terminate, any Contract or Permit binding upon or applicable to the
      Company;

     

    (iv) result
      in
      the creation of any Lien, charge or other encumbrance on any Properties of
      the
      Company; or

     

    
      
        
        

      

      
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    (v) require
      either of the Company Stockholders or the Company to obtain or make any waiver,
      consent, action, approval or authorization of, or registration, declaration,
      notice or filing with, any private non-governmental third Party or any
      Governmental Authority.

     

    4.6 No
      Proceedings.
      No
      suit, action or other proceeding is pending or, to the Knowledge of the Company
      and the Company Stockholders, threatened before any Governmental Authority
      seeking to restrain the Company or the Company Stockholders or prohibit their
      entry into this Agreement or prohibit the Closing, or seeking damages against
      the Company or its Properties as a result of the consummation of this Agreement.

     

    4.7 Financial
      Statements; Liabilities; Accounts Receivable; Inventories.

     

    (a) The
      Company has delivered to Buyer true and complete copies of the unaudited balance
      sheet, statement of operations and statement of cash flows with respect to
      the
      Company and its business from December 2007 (the date of inception of the
      Company) through June 30, 2008 (the “Financial
      Statements”).
      The
      said Financial Statements are attached hereto as Schedule
      4.7(a).
      All of
      such Financial Statements present fairly the financial condition and results
      of
      operations of the Company for the dates or periods indicated thereon. All of
      such Financial Statements have been prepared in accordance with GAAP applied
      on
      a consistent basis throughout the periods indicated. 

     

    (b) Except
      for (i) trade payables and accrued expenses incurred since inception in the
      ordinary course of business, none of which are material, (ii) executory contract
      obligations under (x) Contracts listed on Schedule
      4.12,
      and/or
      (y) Contracts not required to be listed on Schedule
      4.12,
      and
      (iii) the liabilities set forth in Schedule
      4.7(b)
      attached
      hereto, the Company does not have any liabilities or obligations (whether
      accrued, absolute, contingent, known, or otherwise, and whether or not of a
      nature required to be reflected or reserved against in a balance sheet in
      accordance with GAAP).

     

    (c) Except
      as
      otherwise set forth in Schedule
      4.7(c),
      the
      accounts receivable reflected on the June 30, 2008 balance sheet included in
      the
      Financial Statements referenced in Section
      5.8(a)
      and all
      of the Company’s accounts receivable arising since June 30, 2008 (the
“Balance
      Sheet Date”)
      arose
      from bona fide transactions in the ordinary course of business, and the goods
      and services involved have been sold, delivered and performed to the account
      obligors, and no further filings (with governmental agencies, insurers or
      others) are required to be made, no further goods are required to be provided
      and no further services are required to be rendered in order to complete the
      sales and fully render the services and to entitle the Company to collect the
      accounts receivable in full. Except as set forth in Schedule
      4.7(c),
      no such
      account has been assigned or pledged to any other person, firm or corporation,
      and no defense or set-off to any such account has been asserted by the account
      obligor or exists.

     

    (d) Except
      as
      otherwise set forth in Schedule
      4.7(d),
      the
      Inventory of the Company as of the Closing Date shall consist of items of a
      quality, condition and quantity consistent with normal seasonally-adjusted
      Inventory levels of the Company and be usable and saleable in the ordinary
      and
      usual course of business for the purposes for which intended, except to the
      extent written down or reserved against on the Closing Date Balance Sheet.
      Except as otherwise set forth in Schedule
      4.7(d),
      the
      Company’s Inventory is valued on the Company’s books of account in accordance
      with GAAP (on an average cost basis) at the lower of cost or market, and the
      value of obsolete materials, materials below standard quality and slow-moving
      materials have been written down in accordance with GAAP.

    
      
        
        

      

      
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    (e) Except
      as
      provided under the provisions of the agreements described in Schedule
      4.7(e),
      the
      Company has and will have as of the Closing Date legal and beneficial ownership
      of its Properties, free and clear of any and all Liens.

     

    (f) By
      not
      later than November 30, 2008, the Company Stockholders shall have caused the
      Company to obtain, from the independent certified public accountant currently
      engaged by the Buyer, an audit of the balance sheet, statement of income (loss)
      and statement of cash flows of the Company as at September 30, 2008 and for
      the
      period of the date of inception of the Company through and including September
      30, 2008 (the “Audited
      Financial Statements”).
      Such
      Audited Financial Statements shall (i) have been prepared in accordance with
      GAAP, (ii) include all footnotes and schedules required under GAAP, and (ii)
      be
      prepared in the same manner as the financial statements of the Buyer are
      prepared so as to comply with Regulation S-X, as promulgated under the United
      States Securities Act of 1933, as amended. Unless otherwise agreed to by the
      Parties, the auditors regularly engaged to audit the financial statements of
      the
      Buyer shall also prepare and audit the aforesaid Audited Financial Statements
      of
      the Company.

     

    4.8 Absence
      of Certain Changes.

     

    (a) Except
      as
      otherwise set forth in Schedule
      4.8(a)
      attached
      hereto, since the Balance Sheet Date, there has not been:

     

    (i) any
      event, circumstance or change that had or might have a material adverse effect
      on the business, operations, prospects, Properties, financial condition or
      working capital of the Company;

     

    (ii) any
      damage, destruction or loss (whether or not covered by insurance) that had
      or
      might have a material adverse effect on the business, operations, prospects,
      Properties or financial condition of the Company; or

     

    (iii) any
      material adverse change in the Company’s sales patterns, pricing policies,
      accounts receivable or accounts payable.

     

    (b) Except
      as
      otherwise set forth in Schedule
      4.8(b)
      attached
      hereto, since the Balance Sheet Date, the Company has not done any of the
      following:

     

    (i) merged
      into or with or consolidated with, any other corporation or acquired the
      business or assets of any Person;

     

    (ii) purchased
      any securities of any Person;

    
      
        
        

      

      
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    (iii) created,
      incurred, assumed, guaranteed or otherwise become liable or obligated with
      respect to any indebtedness, or made any loan or advance to, or any investment
      in, any person, except in each case in the ordinary course of
      business;

     

    (iv) made
      any
      change in any existing election, or made any new election, with respect to
      any
      tax law in any jurisdiction which election could have an effect on the tax
      treatment of the Company or the Company’s business operations; 

     

    (v) entered
      into, amended or terminated any material agreement;

     

    (vi) sold,
      transferred, leased, mortgaged, encumbered or otherwise disposed of, or agreed
      to sell, transfer, lease, mortgage, encumber or otherwise dispose of, any
      Properties except (i) in the ordinary course of business, or (ii) pursuant
      to
      any agreement specified in Schedule
      4.12;

     

    (vii) settled
      any claim or litigation, or filed any motions, orders, briefs or settlement
      agreements in any proceeding before any Governmental Authority or any
      arbitrator; 

     

    (viii) incurred
      or approved, or entered into any agreement or commitment to make, any
      expenditures in excess of USD $25,000 (other than those arising in the ordinary
      course of business or those required pursuant to any agreement specified in
      Schedule
      4.12);

     

    (ix) maintained
      its books of account other than in the usual, regular and ordinary manner in
      accordance with generally accepted accounting principles and on a basis
      consistent with prior periods or made any change in any of its accounting
      methods or practices that would be required to be disclosed under generally
      accepted accounting principles;

     

    (x) adopted
      any Plan or Benefit Program or Agreement, or granted any increase in the
      compensation payable or to become payable to directors, officers or employees
      (including, without limitation, any such increase pursuant to any bonus,
      profit-sharing or other plan or commitment), other than merit increases to
      non-officer employees in the ordinary course of business and consistent with
      past practice;

     

    (xi) suffered
      any extraordinary losses or waived any rights of material value;

     

    (xii) made
      any
      payment to any Affiliate or forgiven any indebtedness due or owing from any
      Affiliate to the Company;

     

    (xiii) (A)
      liquidated Inventory or accepted product returns other than in the ordinary
      course, (B) accelerated receivables, (C) delayed payables, or (D) changed in
      any
      material respect the Company’s practices in connection with the payment of
      payables and/or the collection of receivables;

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    (xiv) engaged
      in any one or more activities or transactions with an Affiliate or outside
      the
      ordinary course of business;

     

    (xv) declared,
      set aside or paid any dividends, or made any distributions or other payments
      in
      respect of its equity securities, or repurchased, redeemed or otherwise acquired
      any such securities;

     

    (xvi) amended
      its charter or bylaws;

     

    (xvii) issued
      any capital stock or other securities, or granted, or entered into any agreement
      to grant, any options, convertible rights, other rights, warrants, calls or
      agreements relating to its capital stock; or

     

    (xviii) committed
      to do any of the foregoing.

     

    4.9 Compliance
      with Laws.
      Except
      as otherwise set forth in Schedule
      4.9,
      to the
      best knowledge of the Company the Company is and has been in compliance in
      all
      respects with any and all Legal Requirements applicable to the Company, other
      than failures to so comply that would not have an adverse effect on the
      business, operations, prospects, Properties or financial condition of the
      Company. Except as otherwise set forth in Schedule
      4.9,
      the
      Company (x) has not received or entered into any citations, complaints, consent
      orders, compliance schedules, or other similar enforcement orders or received
      any written notice from any Governmental Authority or any other written notice
      that would indicate that there is not currently compliance with all such Legal
      Requirements, except for failures to so comply that would not have an adverse
      effect on the business, operations, prospects, Properties or financial condition
      of the Company, and (y) to the best knowledge of the Company the Company is
      not
      in default under, and no condition exists (whether covered by insurance or
      not)
      that with or without notice or lapse of time or both would constitute a default
      under, or breach or violation of, any Legal Requirement or Permit applicable
      to
      the Company. Without limiting the generality of the foregoing, the Company
      has
      not received notice of and) to the best knowledge of the Company there is no
      basis for, any claim, action, suit, investigation or proceeding that might
      result in a finding that the Company is not or has not been in compliance with
      Legal Requirements relating to (a) the development, testing, manufacture,
      packaging, distribution and marketing of products, (b) employment, safety and
      health, (c) environmental protection, building, zoning and land use and/or
      (d)
      the Foreign Corrupt Practices Act and the rules and regulations promulgated
      thereunder.

     

    4.10 Litigation.
      Except
      as otherwise set forth in Schedule
      4.10,
      there
      are no claims, actions, suits, investigations or proceedings against the Company
      pending or, to the Knowledge of the Company, threatened in any court or before
      or by any Governmental Authority, or before any arbitrator, that might have
      an
      adverse effect (whether covered by insurance or not) on the business,
      operations, prospects, Properties or financial condition of the Company and
      there is no basis for any such claim, action, suit, investigation or proceeding.
      Schedule
      4.10
      also
      includes a true and correct listing of all material actions, suits,
      investigations, claims or proceedings that were pending, settled or adjudicated
      since inception.

    
      
        
        

      

      
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    4.11 Real
      Property.

     

    (a) Schedule
      4.11(a)
      sets
      forth a list of all real property or any interest therein (including without
      limitation any option or other right or obligation to purchase any real property
      or any interest therein) currently owned, or ever owned, by the Company, in
      each
      case setting forth the street address and legal description of each property
      covered thereby (the “Owned
      Premises”).

     

    (b) Schedule
      4.11(b)
      sets
      forth a list of all leases, licenses or similar agreements relating to the
      Company’s use or occupancy of real estate owned by a third Party (“Leases”),
      true
      and correct copies of which have previously been furnished to Buyer, in each
      case setting forth (i) the lessor and lessee thereof and the commencement date,
      term and renewal rights under each of the Leases, and (ii) the street address
      and legal description of each property covered thereby (the “Leased
      Premises”).
      The
      Leases and all guaranties with respect thereto, are in full force and effect
      and
      have not been amended in writing or otherwise, and no Party thereto is in
      default or breach under any such Lease. No event has occurred which, with the
      passage of time or the giving of notice or both, would cause a material breach
      of or default under any of such Leases. Neither the Company nor its agents
      or
      employees have received written notice of any claimed abatements, offsets,
      defenses or other bases for relief or adjustment.

     

    (c) With
      respect to each Owned Premises and Leased Premises, as applicable: (i) the
      Company has good, marketable and insurable fee simple interest in the Owned
      Premises and a valid leasehold interest in the Leased Premises, free and clear
      of any Liens, encumbrances, covenants and easements or title defects that have
      had or could have an adverse effect on the Company’s use and occupancy of the
      Owned Premises and the Leased Premises; (ii) the portions of the buildings
      located on the Owned Premises and the Leased Premises that are used in the
      business of the Company are each in good repair and condition, normal wear
      and
      tear excepted, and are in the aggregate sufficient to satisfy the Company’s
      current and reasonably anticipated normal business activities as conducted
      thereon and, to the Knowledge of the Company, there is no latent material defect
      in the improvements on any Owned Premises, structural elements thereof, the
      mechanical systems (including, without limitation, all heating, ventilating,
      air
      conditioning, plumbing, electrical, utility and sprinkler systems) therein,
      the
      utility system servicing each Owned Premises and the roofs which have not been
      disclosed to Buyer in writing prior to the date of this Agreement; (iii) each
      of
      the Owned Premises and the Leased Premises (a) has direct access to public
      roads
      or access to public roads by means of a perpetual access easement, such access
      being sufficient to satisfy the current transportation requirements of the
      business presently conducted at such parcel; and (b) is served by all utilities
      in such quantity and quality as are necessary and sufficient to satisfy the
      current normal business activities conducted at such parcel; and (iv) the
      Company has not received notice of (a) any condemnation, eminent domain or
      similar proceeding affecting any portion of the Owned Premises or the Leased
      Premises or any access thereto, and, to the Knowledge of the Company, no such
      proceedings are contemplated, (b) any special assessment or pending improvement
      liens to be made by any governmental authority which may affect any of the
      Owned
      Premises or the Leased Premises, or (c) any violations of building codes and/or
      zoning ordinances or other governmental regulations with respect to the Owned
      Premises or the Leased Premises.

    
      
        
        

      

      
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    4.12 Contracts.

     

    (a) Except
      as
      otherwise set forth in Schedule
      4.12,
      the
      Company is not a Party to or bound by any of the following, whether written
      or
      oral:

     

    (i) any
      Contract that cannot by its terms be terminated by the Company with 30 days’ or
      less notice without penalty or whose term continues beyond one year after the
      date of this Agreement;

     

    (ii) Contract
      or commitment for capital expenditures by the Company in excess of $25,000
      per
      calendar quarter in the aggregate;

     

    (iii) lease
      or
      license with respect to any Properties, real or personal, whether as landlord,
      tenant, licensor or licensee;

     

    (iv) agreement,
      Contract, indenture or other instrument relating to the borrowing of money
      or
      the guarantee of any obligation or the deferred payment of the purchase price
      of
      any Properties;

     

    (v) partnership
      or joint venture agreement;

     

    (vi) Contract
      or agreement with any Affiliate of the Company (including the Company
      Stockholders);

     

    (vii) agreement
      for the sale of any assets that in the aggregate have a net book value on the
      Company’s books of greater than $25,000;

     

    (viii) agreement
      that purports to limit the Company’s freedom to compete freely in any line of
      business or in any geographic area;

     

    (ix) preferential
      purchase right, right of first refusal, or similar agreement; or

     

    (x) other
      Contract that is material to the business of the Company.

     

    (b) All
      of
      the Contracts listed or required to be listed in Schedule
      4.12
      are
      valid, binding and in full force and effect, and the Company has not been
      notified or advised by any Party thereto of such Party’s intention or desire to
      terminate or modify any such Contract in any respect, except as disclosed in
      Schedule
      4.12.
      Neither
      the Company nor, to the Knowledge of the Company, any other Party is in breach
      of any of the terms or covenants of any Contract listed or required to be listed
      in Schedule
      4.12.
      Following the Closing, the Company will continue to be entitled to all of the
      benefits currently held by the Company under each Contract listed or required
      to
      be listed in Schedule
      4.12.

     

    (c) Except
      as
      otherwise set forth in Schedule
      4.12(c),
      the
      Company is not a Party to or bound by any Contract or Contracts the terms of
      which were arrived at by or otherwise reflect less-than-arm’s-length
      negotiations or bargaining.

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    4.13 Insurance.
      Schedule
      4.13
      hereto
      is a complete and correct list of all insurance policies (including, without
      limitation, fire, liability, product liability, workers’ compensation and
      vehicular) presently in effect that relate to the Company or its Properties,
      including the amounts of such insurance and annual premiums with respect
      thereto, all of which have been in full force and effect from and after the
      date(s) set forth on Schedule
      4.13.
      To the
      Knowledge of the Company such policies are sufficient for compliance by the
      Company with all applicable Legal Requirements and all material Contracts.
      None
      of the insurance carriers has indicated to the Company an intention to cancel
      any such policy or to materially increase any insurance premiums (including,
      without limitation, workers’ compensation premiums), or that any insurance
      required to be listed on Schedule
      4.13
      will not
      be available in the future on substantially the same terms as currently in
      effect. The Company has no claim pending or anticipated against any of its
      insurance carriers under any of such policies and, to the Knowledge of the
      Company, there has been no actual or alleged occurrence of any kind which could
      reasonably be expected to give rise to any such claim. During the prior three
      years, all notices required to have been given by the Company or the Company
      Stockholders to any insurance company have been timely and duly given, and
      no
      insurance company has asserted that any claim is not covered by the applicable
      policy relating to such claim.

     

    4.14 Intangible
      Rights.
      Set
      forth on Schedule
      4.14
      is a
      list and description of all material foreign and domestic patents, patent
      rights, trademarks, service marks, trade names, brands and copyrights (whether
      or not registered and, if applicable, including pending applications for
      registration) owned, Used, licensed or controlled by the Company and all
      goodwill associated therewith. The Company owns or has the right to use and
      shall as of the Closing Date own or have the right to use any and all
      information, know-how, trade secrets, patents, copyrights, trademarks, trade
      names, software, formulae, methods, processes and other intangible properties
      that are necessary or customarily Used by the Company for the ownership,
      management or operation of its Properties (“Intangible
      Rights”)
      including, but not limited to, the Intangible Rights listed on Schedule
      4.14.
      Except
      as set forth on Schedule
      4.14,
      (i) the
      Company is the sole and exclusive owner of all right, title and interest in
      and
      to all of the Intangible Rights, and has the exclusive right to use and license
      the same, free and clear of any claim or conflict with the Intangible Rights
      of
      others; (ii) no royalties, honorariums or fees are payable by the Company to
      any
      person by reason of the ownership or use of any of the Intangible Rights; (iii)
      there have been no claims made against the Company asserting the invalidity,
      abuse, misuse, or unenforceability of any of the Intangible Rights and to the
      Knowledge of the Company no grounds for any such claims exist; (iv) the Company
      has not made any claim of any violation or infringement by others of any of
      its
      Intangible Rights or interests therein and, to the Knowledge of the Company,
      no
      grounds for any such claims exist; (v) the Company has not received any notice
      that it is in conflict with or infringing upon the asserted intellectual
      property rights of others in connection with the Intangible Rights, and neither
      the use of the Intangible Rights nor the operation of the Company’s businesses
      is infringing or has infringed upon any intellectual property rights of others;
      (vi) the Intangible Rights are sufficient and include all intellectual property
      rights necessary for the Company to lawfully conduct its business as presently
      being conducted; (vii) no interest in any of the Company’s Intangible Rights has
      been assigned, transferred, licensed or sublicensed by the Company to any person
      other than the Buyer pursuant to this Agreement; (viii) to the extent that
      any
      item constituting part of the Intangible Rights has been registered with, filed
      in or issued by, any Governmental Authority, such registrations, filings or
      issuances are listed on Schedule 4.14 and were duly made and remain in full
      force and effect; (ix) to the Knowledge of the Company, there has not been
      any
      act or failure to act by the Company or any of its directors, officers,
      employees, attorneys or agents during the prosecution or registration of, or
      any
      other proceeding relating to, any of the Intangible Rights or of any other
      fact
      which could render invalid or unenforceable, or negate the right to issuance
      of
      any of the Intangible Rights; (x) to the extent any of the Intangible Rights
      constitutes proprietary or confidential information, the Company has adequately
      safeguarded such information from disclosure; and (xi) all of the Company’s
      current Intangible Rights will remain in full force and effect following the
      Closing without alteration or impairment.

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    4.15 Equipment
      and Other Tangible Property.
      Except
      as otherwise set forth on Schedule
      4.15,
      the
      Company’s equipment, furniture, machinery, vehicles, structures, fixtures and
      other tangible property included in the Properties (the “Tangible
      Company Properties”),
      other
      than Inventory, is suitable for the purposes for which intended and in good
      operating condition and repair consistent with normal industry standards, except
      for ordinary wear and tear, and except for such Tangible Company Properties
      as
      shall have been taken out of service on a temporary basis for repairs or
      replacement consistent with the Company’s prior practices and normal industry
      standards. To the Knowledge of the Company, the Tangible Company Properties
      are
      free of any structural or engineering defects, and during the past five years
      there has not been any significant interruption of the Company’s business due to
      inadequate maintenance or obsolescence of the Tangible Company
      Properties.

     

    4.16 Permits;
      Environmental Matters.

     

    (a) Except
      as
      otherwise set forth in Schedule
      4.16(a),
      the
      Company has all Permits necessary for the Company to own, operate, use and/or
      maintain its Properties and to conduct its business and operations as presently
      conducted and as expected to be conducted in the future. Except as otherwise
      set
      forth in Schedule
      4.16(a),
      all
      such Permits are in effect, no proceeding is pending or, to the Knowledge of
      the
      Company, threatened to modify, suspend or revoke, withdraw, terminate, or
      otherwise limit any such Permits, and no administrative or governmental actions
      have been taken or, to the Knowledge of the Company, threatened in connection
      with the expiration or renewal of such Permits which could adversely affect
      the
      ability of the Company to own, operate, use or maintain any of its Properties
      or
      to conduct its business and operations as presently conducted and as expected
      to
      be conducted in the future. Except as otherwise set forth in Schedule
      4.16(a),to
      the
      Knowledge of the Company (i) no violations have occurred that remain uncured,
      un-waived, or otherwise unresolved, or are occurring in respect of any such
      Permits, other than inconsequential violations, and (ii) no circumstances exist
      that would prevent or delay the obtaining of any requisite consent, approval,
      waiver or other authorization of the transactions contemplated hereby with
      respect to such Permits that by their terms or under applicable law may be
      obtained only after Closing.

     

    (b) Except
      as
      set forth on Schedule
      4.16(b),
      there
      are no claims, liabilities, investigations, litigation, administrative
      proceedings, whether pending or, to the Knowledge of the Company, threatened,
      or
      judgments or orders relating to any Hazardous Materials (collectively called
      “Environmental
      Claims”)
      asserted or threatened against the Company or relating to any real property
      currently or formerly owned, leased or otherwise Used by the Company. Neither
      the Company nor, to the Knowledge of the Company, any prior owner, lessee or
      operator of said real property, has caused or permitted any Hazardous Material
      to be used, generated, reclaimed, transported, released, treated, stored or
      disposed of in a manner which could form the basis for an Environmental Claim
      against the Company or the Buyer. Except as set forth on Schedule
      4.16(b),
      the
      Company has not assumed any liability of any Person for cleanup, compliance
      or
      required capital expenditures in connection with any Environmental
      Claim.

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    (c) Except
      as
      set forth on Schedule
      4.16(c),
      to the
      Knowledge of the Company no Hazardous Materials are or were stored or otherwise
      located, and no underground storage tanks or surface impoundments are or were
      located, on real property currently or formerly owned, leased or Used by the
      Company or, to the Knowledge of the Company, on adjacent parcels of real
      property, and no part of such real property or, to the Knowledge of the Company,
      any part of such adjacent parcels of real property, including the groundwater
      located thereon, is presently contaminated by Hazardous Materials.

     

    (d) Except
      as
      set forth on Schedule
      4.16(d),
      to the
      Knowledge of the Company the Company has been and is currently in compliance
      with all applicable Environmental Laws, including obtaining and maintaining
      in
      effect all Permits required by applicable Environmental Laws.

     

    4.17 Banks.
      Schedule
      4.17
      sets
      forth (i) the name of each bank, trust company or other financial institution
      and stock or other broker with which the Company has an account, credit line
      or
      safe deposit box or vault, (ii) the names of all persons authorized to draw
      thereon or to have access to any safe deposit box or vault, (iii) the purpose
      of
      each such account, safe deposit box or vault, and (iv) the names of all persons
      authorized by proxies, powers of attorney or other like instrument to act on
      behalf of the Company in matters concerning any of its business or affairs.
      Except as otherwise set forth in Schedule
      4.17,
      no such
      proxies, powers of attorney or other like instruments are
      irrevocable.

     

    4.18 Suppliers
      and Customers.
      Schedule
      4.18
      sets
      forth (i) the ten principal suppliers of the Company from the date of its
      inception through June 30, 2008, together with the dollar amount of goods
      purchased by the Company from each such supplier during each such period, and
      (ii) the ten principal customers of the Company from the date of its inception
      through June 30, 2008, together with the dollar amount of goods and/or services
      sold by the Company to each such customer during each such period. Except as
      otherwise set forth in Schedule
      4.18,
      the
      Company maintains good relations with all suppliers and customers listed or
      required to be listed in Schedule
      4.18
      as well
      as with governments, partners, financing sources and other Parties with whom
      the
      Company has significant relations, and no such Party has canceled, terminated
      or
      made any threat to the Company to cancel or otherwise terminate its relationship
      with the Company or to materially decrease its services or supplies to the
      Company or its direct or indirect purchase or usage of the products or services
      of the Company.

    
      
        
        

      

      
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    4.19 Absence
      of Certain Business Practices.
      Neither
      the Company, the Company Stockholders nor any other Affiliate or to the
      Knowledge of the Company any agent of the Company, or any other person acting
      on
      behalf of or associated with the Company, acting alone or together, has (a)
      received, directly or indirectly, any rebates, payments, commissions,
      promotional allowances or any other economic benefits from any customer,
      supplier, employee or agent of any customer or supplier which may reasonably
      effect business decisions; or (b) given or agreed to give any money, gift or
      similar benefit to any customer, supplier, employee or agent of any customer
      or
      supplier, any official or employee of any government (domestic or foreign),
      or
      any political Party or candidate for office (domestic or foreign), or other
      person who was, is or may be in a position to help or hinder the business of
      the
      Company (or assist the Company in connection with any actual or proposed
      transaction), in each case which (i) may subject the Company to any damage
      or
      penalty in any civil, criminal or governmental litigation or proceeding or
      (ii)
      if not continued in the future, may reasonably adversely affect the assets,
      business, operations or prospects of the Company.

     

    4.20 Products,
      Services and Authorizations.

     

    (a) Each
      Product designed, manufactured, repaired or serviced by the Company has been
      designed, manufactured, repaired or serviced in accordance with (i) the
      specifications under which the Product is normally and has normally been
      manufactured, and (ii) to the best Knowledge of the Company the provisions
      of
      all applicable laws, policies, guidelines and any other governmental
      requirements.

     

    (b) Schedule
      4.20(b)
      sets
      forth (i) a list of all Products which at any time have been recalled, withdrawn
      or suspended by the Company, whether voluntarily or otherwise, including the
      date recalled, withdrawn or suspended and a brief description of all completed
      or pending proceedings seeking the recall, withdrawal, suspension or seizure
      of
      any Product, (ii) a brief description of all completed or pending proceedings
      seeking the recall, withdrawal, suspension or seizure of any Product, and (iii)
      a list of all regulatory letters received by the Company or the Company
      Stockholders or any of its agents relating to the Company or any of the Products
      or the Company’s establishments.

     

    (c) There
      exists no set of facts which could reasonably be expected to furnish a basis
      for
      the recall, withdrawal or suspension of any product registration, product
      license, repair or overhaul license, manufacturing license, wholesale dealers
      license, export license or other license, approval or consent of any
      governmental or regulatory authority with respect to the Company or any of
      the
      Products.

     

    (d) There
      are
      no claims existing or to the Knowledge of the Company threatened under or
      pursuant to any warranty, whether express or implied, on products or services
      sold by the Company. There are no claims existing and to the Knowledge of the
      Company there is no basis for any claim against the Company for injury to
      persons, animals or property as a result of the sale, distribution or
      manufacture of any product or performance of any service by the Company,
      including, but not limited to, claims arising out of the defective or unsafe
      nature of its products or services. The Company has full and adequate insurance
      coverage for products liability claims against it.

    
      
        
        

      

      
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    4.21 Transactions
      With Affiliates.
      Except
      as set forth on Schedule 4.21 and except for normal advances to employees
      consistent with past practices, payment of compensation for employment to
      employees consistent with past practices, and participation in scheduled Plans
      or Benefit Programs and Agreements by employees, the Company has not purchased,
      acquired or leased any property or services from, or sold, transferred or leased
      any property or services to, or loaned or advanced any money to, or borrowed
      any
      money from, or entered into or been subject to any management, consulting or
      similar agreement with, or engaged in any other significant transaction with
      the
      Company Stockholders or any other officer, director or shareholder of the
      Company or any of their respective Affiliates. Except as set forth on Schedule
      4.21, neither the Company Stockholders, nor any other Affiliate of the Company
      is indebted to the Company for money borrowed or other loans or advances, and
      the Company is not indebted to any such Affiliate.

     

    4.22 Other
      Information.
      The
      information furnished by the Company Stockholders and the Company to Buyer
      pursuant to this Agreement (including, without limitation, information contained
      in the exhibits hereto, the Schedules identified herein, the instruments
      referred to in such Schedules and the certificates and other documents to be
      executed or delivered pursuant hereto by the Company Stockholders and/or the
      Company at or prior to the Closing) is not, nor at the Closing will be, false
      or
      misleading in any material respect, or contains, or at the Closing will contain,
      any misstatement of material fact, or omits, or at the Closing will omit, to
      state any material fact required to be stated in order to make the statements
      therein not misleading.

     

    ARTICLE
      V. REPRESENTATIONS
      AND WARRANTIES OF THE PARENT AND THE BUYER

     

    The
      Parent and the Buyer hereby jointly and severally represents and warrants to
      the
      Company and the Company Stockholders that: 

     

    5.1 Corporate
      Existence and Qualification.
      The
      Buyer is a corporation duly organized, validly existing and in good standing
      under the laws of Hungary. The Buyer has the corporate power to own, manage,
      lease and hold its Properties and to carry on its business as and where such
      Properties are presently located and such business is presently conducted;
      and
      the Buyer is qualified to do business as a foreign corporation and in good
      standing in each jurisdiction in which it is required by law to be so
      qualified.

     

    5.2 Authority,
      Approval and Enforceability.
      This
      Agreement has been duly executed and delivered by the Parent and the Buyer,
      and
      each of the Parent and the Buyer have all requisite power and legal capacity
      to
      execute and deliver this Agreement and all Exhibits executed and delivered
      or to
      be executed and delivered in connection with the transactions provided for
      hereby, to consummate the transactions contemplated hereby and by the Exhibits,
      and to perform its obligations hereunder and under the Exhibits. This Agreement
      and each Exhibit to which any of the Parent and/or the Buyer is a Party
      constitutes, or upon execution and delivery will constitute, the legal, valid
      and binding obligation of such Party, enforceable in accordance with its terms,
      except as such enforcement may be limited by general equitable principles or
      by
      applicable bankruptcy, insolvency, moratorium, or similar laws and judicial
      decisions from time to time in effect which affect creditors’ rights generally.

    
      
        
        

      

      
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    5.3 The
      Buyer Shares and Corporate Records.

     

    (a) The
      authorized, issued and outstanding shares of capital stock of the Buyer is
      set
      forth on Schedule
      5.3
      annexed
      hereto ("the Buyer
      Shares").
      The
      Parent is the record and beneficial owner of one hundred (100%) percent of
      the
      issued and outstanding of the Buyer Shares. The Buyer Shares are owned by the
      Parent free and clear of all Liens. Except for the Buyer Shares, there are
      no
      shares of capital stock or other equity securities of the Buyer authorized,
      issued or outstanding. No ordinary shares of common stock or other capital
      shares are held in the Buyer’s treasury. 

     

    (b) All
      of
      the outstanding Buyer Shares are duly authorized, validly issued, fully paid
      and
      non-assessable and were not issued in violation of any: (i) preemptive or other
      rights of any Person to acquire securities of the Buyer, or (ii) applicable
      Hungarian Securities Laws. There are no outstanding subscriptions, options,
      convertible securities, rights (preemptive or otherwise), warrants, calls or
      agreements relating to any of the Buyer Shares or other shares of capital stock
      or other securities of the Buyer. Upon delivery to the Company Stockholders
      at
      Closing of certificates of Minority Buyer Equity representing the Minority
      Interest, accompanied by stock powers duly endorsed in blank, good and valid
      title to the Minority Buyer Equity will pass to the Company Stockholders free
      and clear of all Liens of any kind, other than those arising from acts of the
      Parent or the Buyer.

     

    (c) The
      copies of the Articles of Incorporation and Bylaws of the Buyer provided to
      the
      Company Stockholders are true, accurate, and complete and reflect all amendments
      made through the date of this Agreement. The Buyer’s stock and minute books made
      available to the Company Stockholders for review were correct and complete
      as of
      the date of such review, no further entries have been made through the date
      of
      this Agreement, and such minute books contain an accurate record of all
      shareholder and corporate actions of the shareholders and directors (and any
      committees thereof) of the Buyer taken by written consent or at a meeting since
      inception. All corporate actions taken by the Buyer have been duly authorized
      or
      ratified. All accounts, books, ledgers and official and other records of the
      Buyer fairly and accurately reflect all of the Buyer’s transactions, properties,
      assets and liabilities.

     

    (d) The
      Buyer
      does not own, directly or indirectly, any outstanding voting securities of
      or
      other interests in any other corporation, partnership, joint venture or other
      business entity.

     

    5.4 No
      Defaults or Consents.
      Except
      as otherwise set forth in Schedule
      5.4
      hereto,
      the execution and delivery of this Agreement and the Exhibits by the Parent
      and
      the Buyer and the performance by the Parent and the Buyer of their obligations
      hereunder and there under will not violate any provision of law or any judgment,
      award or decree or any indenture, agreement or other instrument to which the
      Parent and/or the Buyer is a Party, or by which the properties or assets of
      the
      Parent or the Buyer is bound or affected, or conflict with, result in a breach
      of or constitute (with due notice or lapse of time or both) a default under,
      any
      such indenture, agreement or other instrument, in each case except to the extent
      that such violation, default or breach could not reasonably be expected to
      delay
      or otherwise significantly impair the ability of the Parties to consummate
      the
      transactions contemplated hereby.

    
      
        
        

      

      
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    5.5 No
      Buyer Defaults or Consents.
      Except
      as otherwise set forth in Schedule
      5.5
      attached
      hereto, neither the execution and delivery of this Agreement nor the carrying
      out of any of the transactions contemplated hereby will:

     

    (i) violate
      or conflict with any of the terms, conditions or provisions of the charter
      or
      bylaws of the Buyer;

     

    (ii) violate
      any Legal Requirements applicable to the Buyer; 

     

    (iii) violate,
      conflict with, result in a breach of, constitute a default under (whether with
      or without notice or the lapse of time or both), or accelerate or permit the
      acceleration of the performance required by, or give any other Party the right
      to terminate, any Contract or Permit binding upon or applicable to the
      Buyer;

     

    (iv) result
      in
      the creation of any Lien, charge or other encumbrance on any Properties of
      the
      Buyer; or

     

    (v) require
      either of the Parent or the Buyer to obtain or make any waiver, consent, action,
      approval or authorization of, or registration, declaration, notice or filing
      with, any private non-governmental third Party or any Governmental
      Authority.

     

    5.6 No
      Proceedings.
      Except
      as set forth in the Parent’s Public Filings, no suit, action or other proceeding
      is pending or, to the Knowledge of the Buyer and the Parent, threatened before
      any Governmental Authority seeking to restrain the Buyer or the Parent or
      prohibit their entry into this Agreement or prohibit the Closing, or seeking
      damages against the Buyer or its Properties as a result of the consummation
      of
      this Agreement. 

     

    5.7 Financial
      Statements; Liabilities; Accounts Receivable; Inventories.

     

    (a) Parent
      has delivered to Company Stockholders (i) the consolidated audited accounts
      of
      the Parent for the fiscal years ended December 31, 2006 and 2007 true and
      complete copies of the audited balance sheet, statement of operations and
      statement of cash flows and (ii) copies of the unaudited balance sheet,
      statement of operations and statement of cash flows of the Parent as at June
      30,
      2008 and for the six month period then ended (the “Parent
      Financial Statements”).
      

     

    (b) Buyer
      has
      delivered to Company Stockholders (i) audited accounts of Buyer for the fiscal
      years ended December 31, 2006 and 2007 true and complete copies of the audited
      balance sheet, statement of operations and statement of cash flows and (ii)
      copies of the unaudited balance sheet, statement of operations and statement
      of
      cash flows of Buyer as at June 30, 2008 and for the six month period then ended
      (the “Buyer’s Financial
      Statements”)
      and
      are attached hereto as Schedule
      5.7(a).
      Buyer’s
      Fiancial Statements have been prepared as per U.S. GAAP (as the Parent) and
      Hungarian accounting standards and translated to US GAAP applied on a consistent
      basis throughout the periods indicated. All of such Buyers Financial Statements
      present fairly the financial condition and results of operations of the Buyer
      for the dates or periods indicated thereon.

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    (c) Except
      for (i) security interests and liens on the assets of the Buyer to secure
      indebtedness of the Parent and/or the Buyer not to exceed $250,000 in the
      aggregate; (ii) trade payables and accrued expenses incurred in the ordinary
      course of business, none of which are material, (iii) executory contract
      obligations under (x) Contracts listed on Schedule
      5.12,
      and/or
      (y) Contracts not required to be listed on Schedule
      5.12,
      (iv)
      the liabilities set forth in Schedule
      5.7(c)
      and the
      (v) the Parent Loan Balance set forth in Schedule
      2.2
      attached
      hereto, the Buyer does not have any liabilities or obligations (whether accrued,
      absolute, contingent, known or otherwise, and whether or not of a nature
      required to be reflected or reserved against in a balance sheet in accordance
      with GAAP). The Parent shall be solely responsible to retire the aforesaid
      indebtedness secured by the liens on the assets of the Buyer.

     

    (d) Except
      as
      otherwise set forth in Schedule
      5.7(d),
      the
      accounts receivable reflected on the June 30, 2008 balance sheet included in
      the
      Buyers Financial Statements referenced in this Section 5.7(a) and all of the
      Buyer’s accounts receivable arising since June 30, 2008 (the “Balance
      Sheet Date”)
      arose
      from bona fide transactions in the ordinary course of business, and the goods
      and services involved have been sold, delivered and performed to the account
      obligors, and no further filings (with governmental agencies, insurers or
      others) are required to be made, no further goods are required to be provided
      and no further services are required to be rendered in order to complete the
      sales and fully render the services and to entitle the Buyer to collect the
      accounts receivable in full. Except as set forth in Schedule
      5.7(d),
      no such
      account has been assigned or pledged to any other person, firm or corporation,
      and no defense or set-off to any such account has been asserted by the account
      obligor or exists. 

     

    (e) As
      of the
      date of Closing the Buyer has either a positive stockholders equity or capital
      of not less than United States One Thousand Dollars (USD $1,000.00) equivalent
      in Hungarian Forinth calculated at the then current rate of exchange.

     

    (f) 
      As of
      the date of Closing the Parent Loan Balance shall (i) bear interest calculated
      at the rate of LIBOR for twelve month United States dollars interbank deposits
      as fixed by the BBA plus a margin of 3%, such interest to be paid annually
      in
      arrears (ii) be due and payable as to principal and any interest accrued on
      the
      fifth anniversary of the Closing Date, (iii) not be convertible into or
      exchangeable for capital shares of the Buyer, and (iv) be subject and
      subordinated to all creditors of the Buyer and its consolidated Subsidiaries,
      including the Company.

     

    (g) Except
      as
      otherwise set forth in Schedule
      5,7(g),
      the
      Inventory of the Buyer as of the Closing Date shall consist of items of a
      quality, condition and quantity consistent with normal seasonally-adjusted
      Inventory levels of the Buyer and be usable and saleable in the ordinary and
      usual course of business for the purposes for which intended, except to the
      extent written down or reserved against on the Closing Date Balance Sheet.
      Except as otherwise set forth in Schedule
      5.7(g),
      the
      Buyer’s Inventory is valued on the Buyer’s books of account in accordance with
      GAAP (on an average cost basis) at the lower of cost or market, and the value
      of
      obsolete materials, materials below standard quality and slow-moving materials
      have been written down in accordance with GAAP.

    
      
        
        

      

      
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    (h) Except
      as
      provided under the provisions of the agreements described in Schedule
      5.7(h),
      the
      Buyer has and will have as of the Closing Date legal and beneficial ownership
      of
      its Properties, free and clear of any and all Liens.

     

    5.8 Absence
      of Certain Changes.

     

    (a) Except
      as
      otherwise set forth in Schedule
      5.8(a)
      attached
      hereto, since the Balance Sheet Date, there has not been:

     

    (i) any
      event, circumstance or change that had or might have a material adverse effect
      on the business, operations, prospects, Properties, financial condition or
      working capital of the Buyer;

     

    (ii) any
      damage, destruction or loss (whether or not covered by insurance) that had
      or
      might have a material adverse effect on the business, operations, prospects,
      Properties or financial condition of the Buyer; or

     

    (iii) any
      material adverse change in the Buyer’s sales patterns, pricing policies,
      accounts receivable or accounts payable.

     

    (b) Except
      as
      otherwise set forth in Schedule
      5.8(b)
      attached
      hereto, since the Balance Sheet Date, the Buyer has not done any of the
      following:

     

    (i) merged
      into or with or consolidated with, any other corporation or acquired the
      business or assets of any Person;

     

    (ii) purchased
      any securities of any Person;

     

    (iii) created,
      incurred, assumed, guaranteed or otherwise become liable or obligated with
      respect to any indebtedness, or made any loan or advance to, or any investment
      in, any person, except in each case in the ordinary course of
      business;

     

    (iv) made
      any
      change in any existing election, or made any new election, with respect to
      any
      tax law in any jurisdiction which election could have an effect on the tax
      treatment of the Buyer or the Buyer’s business operations; 

     

    (v) entered
      into, amended or terminated any material agreement;

     

    (vi) sold,
      transferred, leased, mortgaged, encumbered or otherwise disposed of, or agreed
      to sell, transfer, lease, mortgage, encumber or otherwise dispose of, any
      Properties except (i) in the ordinary course of business, or (ii) pursuant
      to
      any agreement specified in Schedule
      5.8(b)(vi);

     

    (vii) settled
      any claim or litigation, or filed any motions, orders, briefs or settlement
      agreements in any proceeding before any court, any Governmental Authority or
      any
      arbitrator; 

    
      
        
        

      

      
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    (viii) incurred
      or approved, or entered into any agreement or commitment to make, any
      expenditures in excess of $5,000 (other than those arising in the ordinary
      course of business or those required pursuant to any agreement specified in
      Schedule
      5.8(b)(viii);

     

    (ix) maintained
      its books of account other than in the usual, regular and ordinary manner in
      accordance with generally accepted accounting principles and on a basis
      consistent with prior periods or made any change in any of its accounting
      methods or practices that would be required to be disclosed under generally
      accepted accounting principles;

     

    (x) adopted
      any Plan or Benefit Program or Agreement, or granted any increase in the
      compensation payable or to become payable to directors, officers or employees
      (including, without limitation, any such increase pursuant to any bonus,
      profit-sharing or other plan or commitment), other than merit increases to
      non-officer employees in the ordinary course of business and consistent with
      past practice;

     

    (xi) suffered
      any extraordinary losses or waived any rights of material value;

     

    (xii) made
      any
      payment to any Affiliate or forgiven any indebtedness due or owing from any
      Affiliate to the Buyer;

     

    (xiii) (A)
      liquidated Inventory or accepted product returns other than in the ordinary
      course, (B) accelerated receivables, (C) delayed payables, or (D) changed in
      any
      material respect the Buyer’s practices in connection with the payment of
      payables and/or the collection of receivables;

     

    (xiv) engaged
      in any one or more activities or transactions with an Affiliate or outside
      the
      ordinary course of business;

     

    (xv) declared,
      set aside or paid any dividends, or made any distributions or other payments
      in
      respect of its equity securities, or repurchased, redeemed or otherwise acquired
      any such securities;

     

    (xvi) amended
      its charter or bylaws;

     

    (xvii) issued
      any capital stock or other securities, or granted, or entered into any agreement
      to grant, any options, convertible rights, other rights, warrants, calls or
      agreements relating to its capital stock; or

     

    (xviii) committed
      to do any of the foregoing.

    
      
        
        

      

      
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    5.9 Compliance
      with Laws.
      Except
      as otherwise set forth in Schedule
      5.9,
      the
      Parent and the Buyer is and has been in compliance in all respects with any
      and
      all Legal Requirements applicable to the Buyer, other than failures to so comply
      that would not have an adverse effect on the business, operations, prospects,
      Properties or financial condition of the Buyer. Except as otherwise set forth
      in
Schedule
      5.9,
      the
      Buyer (x) has not received or entered into any citations, complaints, consent
      orders, compliance schedules, or other similar enforcement orders or received
      any written notice from any Governmental Authority or any other written notice
      that would indicate that there is not currently compliance with all such Legal
      Requirements, except for failures to so comply that would not have an adverse
      effect on the business, operations, prospects, Properties or financial condition
      of the Buyer, and (y) is not in default under, and no condition exists (whether
      covered by insurance or not) that with or without notice or lapse of time or
      both would constitute a default under, or breach or violation of, any Legal
      Requirement or Permit applicable to the Buyer. Without limiting the generality
      of the foregoing, the Buyer has not received notice of and there is no basis
      for, any claim, action, suit, investigation or proceeding that might result
      in a
      finding that the Buyer is not or has not been in compliance with Legal
      Requirements relating to (a) the development, testing, manufacture, packaging,
      distribution and marketing of products, (b) employment, safety and health,
      (c)
      environmental protection, building, zoning and land use and/or (d) the Foreign
      Corrupt Practices Act and the rules and regulations promulgated there
      under.

     

    5.10 Litigation.
      Except
      as otherwise set forth in Schedule
      5.10,
      there
      are no claims, actions, suits, investigations or proceedings against the Buyer
      pending or, to the Knowledge of the Parent and the Buyer, threatened in any
      court or before or by any Governmental Authority, or before any arbitrator,
      that
      might have an adverse effect (whether covered by insurance or not) on the
      business, operations, prospects, Properties or financial condition of the Parent
      and / or the Buyer and there is no basis for any such claim, action, suit,
      investigation or proceeding. Schedule
      5.10
      also
      includes a true and correct listing of all material actions, suits,
      investigations, claims or proceedings that were pending, settled or adjudicated
      during the past three financial years and up to the date of
      Closing.

     

    5.11 Real
      Property.

     

    (a) Schedule
      5.11(a)
      sets
      forth a list of all real property or any interest therein (including without
      limitation any option or other right or obligation to purchase any real property
      or any interest therein) currently owned, or ever owned, by the Buyer, in each
      case setting forth the street address and legal description of each property
      covered thereby (the “Owned
      Premises”).

     

    (b) Schedule
      5.11(b)
      sets
      forth a list of all leases, licenses or similar agreements relating to the
      Buyer’s use or occupancy of real estate owned by a third Party (“Leases”),
      true
      and correct copies of which have previously been furnished to Buyer, in each
      case setting forth (i) the lessor and lessee thereof and the commencement date,
      term and renewal rights under each of the Leases, and (ii) the street address
      and legal description of each property covered thereby (the “Leased
      Premises”).
      The
      Leases and all guaranties with respect thereto, are in full force and effect
      and
      have not been amended in writing or otherwise, and no Party thereto is in
      default or breach under any such Lease. No event has occurred which, with the
      passage of time or the giving of notice or both, would cause a material breach
      of or default under any of such Leases. Neither the Buyer nor its agents or
      employees have received written notice of any claimed abatements, offsets,
      defenses or other bases for relief or adjustment.

    
      
        
        

      

      
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    (c) With
      respect to each Owned Premises and Leased Premises, as applicable: (i) the
      Buyer
      has good, marketable and insurable free simple interest in the Owned Premises
      and a valid leasehold interest in the Leased Premises, free and clear of any
      Liens, encumbrances, covenants and easements or title defects that have had
      or
      could have an adverse effect on the Buyer’s use and occupancy of the Owned
      Premises and the Leased Premises; (ii) the portions of the buildings located
      on
      the Owned Premises and the Leased Premises that are used in the business of
      the
      Buyer are each in good repair and condition, normal wear and tear excepted,
      and
      are in the aggregate sufficient to satisfy the Buyer’s current and reasonably
      anticipated normal business activities as conducted thereon and, to the
      Knowledge of the Buyer, there is no latent material defect in the improvements
      on any Owned Premises, structural elements thereof, the mechanical systems
      (including, without limitation, all heating, ventilating, air conditioning,
      plumbing, electrical, utility and sprinkler systems) therein, the utility system
      servicing each Owned Premises and the roofs which have not been disclosed to
      Buyer in writing prior to the date of this Agreement; (iii) each of the Owned
      Premises and the Leased Premises (a) has direct access to public roads or access
      to public roads by means of a perpetual access easement, such access being
      sufficient to satisfy the current transportation requirements of the business
      presently conducted at such parcel; and (b) is served by all utilities in such
      quantity and quality as are necessary and sufficient to satisfy the current
      normal business activities conducted at such parcel; and (iv) the Buyer has
      not
      received notice of (a) any condemnation, eminent domain or similar proceeding
      affecting any portion of the Owned Premises or the Leased Premises or any access
      thereto, and, to the Knowledge of the Buyer, no such proceedings are
      contemplated, (b) any special assessment or pending improvement liens to be
      made
      by any governmental authority which may affect any of the Owned Premises or
      the
      Leased Premises, or (c) any violations of building codes and/or zoning
      ordinances or other governmental regulations with respect to the Owned Premises
      or the Leased Premises.

     

    5.12 Contracts.

     

    (a) Except
      as
      otherwise set forth in Schedule
      5.12,
      the
      Buyer is not a Party to or bound by any of the following, whether written or
      oral:

     

    (i) any
      Contract that cannot by its terms be terminated by the Buyer with 30 days’ or
      less notice without penalty or whose term continues beyond one year after the
      date of this Agreement;

     

    (ii) Contract
      or commitment for capital expenditures by the Buyer in excess of $25,000 per
      calendar quarter in the aggregate;

     

    (iii) lease
      or
      license with respect to any Properties, real or personal, whether as landlord,
      tenant, licensor or licensee;

     

    (iv) agreement,
      contract, indenture or other instrument relating to the borrowing of money
      or
      the guarantee of any obligation or the deferred payment of the purchase price
      of
      any Properties;

     

    (v) partnership
      agreement;

     

    (vi) contract
      with any Affiliate of the Buyer (including the Parent);

     

    (vii) agreement
      for the sale of any assets that in the aggregate have a net book value on the
      Buyer’s books of greater than $25,000;

    
      
        
        

      

      
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    (viii) agreement
      that purports to limit the Buyer’s freedom to compete freely in any line of
      business or in any geographic area;

     

    (ix) preferential
      purchase right, right of first refusal, or similar agreement; or

     

    (x) other
      Contract that is material to the business of the Buyer.

     

    (b) All
      of
      the Contracts listed or required to be listed in Schedule
      5.12
      are
      valid, binding and in full force and effect, and the Buyer has not been notified
      or advised by any Party thereto of such Party’s intention or desire to terminate
      or modify any such Contract in any respect, except as disclosed in Schedule
      5.12.
      Neither
      the Buyer nor, to the Knowledge of the Buyer, any other Party is in breach
      of
      any of the terms or covenants of any Contract listed or required to be listed
      in
Schedule
      5.12.
      Following the Closing, the Buyer will continue to be entitled to all of the
      benefits currently held by the Buyer under each Contract listed or required
      to
      be listed in Schedule
      5.12.

     

    (c) Except
      as
      otherwise set forth in Schedule
      5.12(c),
      the
      Buyer is not a Party to or bound by any Contract or Contracts the terms of
      which
      were arrived at by or otherwise reflect less-than-arm’s-length negotiations or
      bargaining.

     

    5.13 Insurance.
      Schedule
      5.13
      hereto
      is a complete and correct list of all insurance policies (including, without
      limitation, fire, liability, product liability, workers’ compensation and
      vehicular) presently in effect that relate to the Buyer or its Properties,
      including the amounts of such insurance and annual premiums with respect
      thereto, all of which have been in full force and effect from and after the
      date(s) set forth on Schedule
      5.13.
      Such
      policies are sufficient for compliance by the Buyer with all applicable Legal
      Requirements and all material Contracts. None of the insurance carriers has
      indicated to the Buyer an intention to cancel any such policy or to materially
      increase any insurance premiums (including, without limitation, workers’
compensation premiums), or that any insurance required to be listed on
Schedule
      5.13
      will not
      be available in the future on substantially the same terms as currently in
      effect. The Buyer has no claim pending or anticipated against any of its
      insurance carriers under any of such policies and, to the Knowledge of the
      Buyer, there has been no actual or alleged occurrence of any kind which could
      reasonably be expected to give rise to any such claim. During the prior three
      years, all notices required to have been given by the Buyer or the Parent to
      any
      insurance Buyer have been timely and duly given, and no insurance Buyer has
      asserted that any claim is not covered by the applicable policy relating to
      such
      claim.

    
      
        
        

      

      
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    5.14 Intangible
      Rights.
      Set
      forth on Schedule
      5.14
      is a
      list and description of all material foreign and domestic patents, patent
      rights, trademarks, service marks, trade names, brands and copyrights (whether
      or not registered and, if applicable, including pending applications for
      registration) owned, Used, licensed or controlled by the Buyer and all goodwill
      associated therewith. The Buyer owns or has the right to use and shall as of
      the
      Closing Date own or have the right to use any and all information, know-how,
      trade secrets, patents, copyrights, trademarks, trade names, software, formulae,
      methods, processes and other intangible properties that are necessary or
      customarily Used by the Buyer for the ownership, management or operation of
      its
      Properties (“Intangible
      Rights”)
      including, but not limited to, the Intangible Rights listed on Schedule
      5.14.
      Except
      as set forth on Schedule
      5.14(i)
      the
      Buyer is the sole and exclusive owner of all right, title and interest in and
      to
      all of the Intangible Rights, and has the exclusive right to use and license
      the
      same, free and clear of any claim or conflict with the Intangible Rights of
      others; (ii) no royalties, honorariums or fees are payable by the Buyer to
      any
      person by reason of the ownership or use of any of the Intangible Rights; (iii)
      there have been no claims made against the Buyer asserting the invalidity,
      abuse, misuse, or unenforceability of any of the Intangible Rights and no
      grounds for any such claims exist; (iv) the Buyer has not made any claim of
      any
      violation or infringement by others of any of its Intangible Rights or interests
      therein and, to the Knowledge of the Buyer, no grounds for any such claims
      exist; (v) the Buyer has not received any notice that it is in conflict with
      or
      infringing upon the asserted intellectual property rights of others in
      connection with the Intangible Rights, and neither the use of the Intangible
      Rights nor the operation of the Buyer’s businesses is infringing or has
      infringed upon any intellectual property rights of others; (vi) the Intangible
      Rights are sufficient and include all intellectual property rights necessary
      for
      the Buyer to lawfully conduct its business as presently being conducted; (vii)
      no interest in any of the Buyer’s Intangible Rights has been assigned,
      transferred, licensed or sublicensed by the Buyer to any person other than
      the
      Buyer pursuant to this Agreement; (viii) to the extent that any item
      constituting part of the Intangible Rights has been registered with, filed
      in or
      issued by, any Governmental Authority, such registrations, filings or issuances
      are listed on Schedule 5.14 and were duly made and remain in full force and
      effect; (ix) to the Knowledge of the Buyer, there has not been any act or
      failure to act by the Buyer or any of its directors, officers, employees,
      attorneys or agents during the prosecution or registration of, or any other
      proceeding relating to, any of the Intangible Rights or of any other fact which
      could render invalid or unenforceable, or negate the right to issuance of any
      of
      the Intangible Rights; (x) to the extent any of the Intangible Rights
      constitutes proprietary or confidential information, the Buyer has adequately
      safeguarded such information from disclosure; and (xi) all of the Buyer’s
      current Intangible Rights will remain in full force and effect following the
      Closing without alteration or impairment.

     

    5.15 Equipment
      and Other Tangible Property.
      Except
      as otherwise set forth on Schedule
      5.15,
      the
      Buyer’s equipment, furniture, machinery, vehicles, structures, fixtures and
      other tangible property included in the Properties (the “Tangible
      Buyer Properties”),
      other
      than Inventory, is suitable for the purposes for which intended and in good
      operating condition and repair consistent with normal industry standards, except
      for ordinary wear and tear, and except for such Tangible Buyer Properties as
      shall have been taken out of service on a temporary basis for repairs or
      replacement consistent with the Buyer’s prior practices and normal industry
      standards. To the Knowledge of the Buyer, the Tangible Buyer Properties are
      free
      of any structural or engineering defects, and during the past five years there
      has not been any significant interruption of the Buyer’s business due to
      inadequate maintenance or obsolescence of the Tangible Buyer
      Properties.

    
      
        
        

      

      
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    5.16 Permits;
      Environmental Matters.

     

    (a) Except
      as
      otherwise set forth in Schedule
      5.16(a),
      the
      Buyer has all Permits necessary for the Buyer to own, operate, use and/or
      maintain its Properties and to conduct its business and operations as presently
      conducted and as expected to be conducted in the future. Except as otherwise
      set
      forth in Schedule
      5.16(a) ,
      all
      such Permits are in effect, no proceeding is pending or, to the Knowledge of
      the
      Buyer, threatened to modify, suspend or revoke, withdraw, terminate, or
      otherwise limit any such Permits, and no administrative or governmental actions
      have been taken or, to the Knowledge of the Buyer, threatened in connection
      with
      the expiration or renewal of such Permits which could adversely affect the
      ability of the Buyer to own, operate, use or maintain any of its Properties
      or
      to conduct its business and operations as presently conducted and as expected
      to
      be conducted in the future. Except as otherwise set forth in Schedule
      5.16(a)(i)
      no
      violations have occurred that remain uncured, un-waived, or otherwise
      unresolved, or are occurring in respect of any such Permits, other than
      inconsequential violations, and (ii) no circumstances exist that would prevent
      or delay the obtaining of any requisite consent, approval, waiver or other
      authorization of the transactions contemplated hereby with respect to such
      Permits that by their terms or under applicable law may be obtained only after
      Closing.

     

    (b) Except
      as
      set forth on Schedule
      5.16(b),
      there
      are no claims, liabilities, investigations, litigation, administrative
      proceedings, whether pending or, to the Knowledge of the Buyer, threatened,
      or
      judgments or orders relating to any Hazardous Materials (collectively called
      “Environmental
      Claims”)
      asserted or threatened against the Buyer or relating to any real property
      currently or formerly owned, leased or otherwise Used by the Buyer. Neither
      the
      Buyer nor, to the Knowledge of the Buyer, any prior owner, lessee or operator
      of
      said real property, has caused or permitted any Hazardous Material to be used,
      generated, reclaimed, transported, released, treated, stored or disposed of
      in a
      manner which could form the basis for an Environmental Claim against the Buyer
      or the Buyer. Except as set forth on Schedule
      5.16(b),
      the
      Buyer has not assumed any liability of any Person for cleanup, compliance or
      required capital expenditures in connection with any Environmental
      Claim.

     

    (c) Except
      as
      set forth on Schedule
      5.16(c),
      no
      Hazardous Materials are or were stored or otherwise located, and no underground
      storage tanks or surface impoundments are or were located, on real property
      currently or formerly owned, leased or used by the Buyer or, to the Knowledge
      of
      the Buyer, on adjacent parcels of real property, and no part of such real
      property or, to the Knowledge of the Buyer, any part of such adjacent parcels
      of
      real property, including the groundwater located thereon, is presently
      contaminated by Hazardous Materials.

     

    (d) Except
      as
      set forth on Schedule
      5.16(d),
      the
      Buyer has been and is currently in compliance with all applicable Environmental
      Laws, including obtaining and maintaining in effect all Permits required by
      applicable Environmental Laws.

     

    5.17 Banks.
      Schedule
      5.17 sets
      forth (i) the name of each bank, trust Buyer or other financial institution
      and
      stock or other broker with which the Buyer has an account, credit line or safe
      deposit box or vault, (ii) the names of all persons authorized to draw thereon
      or to have access to any safe deposit box or vault, (iii) the purpose of each
      such account, safe deposit box or vault, and (iv) the names of all persons
      authorized by proxies, powers of attorney or other like instrument to act on
      behalf of the Buyer in matters concerning any of its business or affairs. Except
      as otherwise set forth in Schedule
      5.17,
      no such
      proxies, powers of attorney or other like instruments are
      irrevocable.

    
      
        
        

      

      
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    5.18 Suppliers
      and Customers.
      Schedule
      5.18
      sets
      forth (i) the ten principal suppliers of the Buyer from in the year 2007 and
      2008 through June 30, 2008, together with the dollar amount of goods purchased
      by the Buyer from each such supplier during each such period, and (ii) the
      ten
      principal customers of the Buyer in the year 2007 and 2008 through June 30,
      2008, together with the dollar amount of goods and/or services sold by the
      Buyer
      to each such customer during each such period. Except as otherwise set forth
      in
Schedule
      5.18,
      the
      Buyer maintains good relations with all suppliers and customers listed or
      required to be listed in Schedule
      5.18
      as
      well as with governments, partners, financing sources and other Parties with
      whom the Buyer has significant relations, and no such Party has canceled,
      terminated or made any threat to the Buyer to cancel or otherwise terminate
      its
      relationship with the Buyer or to materially decrease its services or supplies
      to the Buyer or its direct or indirect purchase or usage of the products or
      services of the Buyer.

     

    5.19 Absence
      of Certain Business Practices.
      Neither
      the Buyer, the Parent nor any other Affiliate or agent of the Buyer, or any
      other person acting on behalf of or associated with the Buyer, acting alone
      or
      together, has (a) received, directly or indirectly, any rebates, payments,
      commissions, promotional allowances or any other economic benefits, regardless
      of their nature or type, from any customer, supplier, employee or agent of
      any
      customer or supplier; or (b) directly or indirectly given or agreed to give
      any
      money, gift or similar benefit to any customer, supplier, employee or agent
      of
      any customer or supplier, any official or employee of any government (domestic
      or foreign), or any political Party or candidate for office (domestic or
      foreign), or other person who was, is or may be in a position to help or hinder
      the business of the Buyer (or assist the Buyer in connection with any actual
      or
      proposed transaction), in each case which (i) may expose the Buyer to any damage
      or penalty in any civil, criminal or governmental litigation or proceeding,
      (ii)
      if not given in the past, may have had an adverse effect on the assets,
      business, operations or prospects of the Buyer, or (iii) if not continued in
      the
      future, may adversely affect the assets, business, operations or prospects
      of
      the Buyer.

     

    5.20 Products,
      Services and Authorizations.

     

    (a) Each
      Product designed, manufactured, repaired or serviced by the Buyer has been
      designed, manufactured, repaired or serviced in accordance with (i) the
      specifications under which the Product is normally and has normally been
      manufactured, and (ii) the provisions of all applicable laws, policies,
      guidelines and any other governmental requirements.

     

    (b) Schedule
      5.20(b)
      sets
      forth (i) a list of all Products which at any time have been recalled, withdrawn
      or suspended by the Buyer, whether voluntarily or otherwise, including the
      date
      recalled, withdrawn or suspended and a brief description of all completed or
      pending proceedings seeking the recall, withdrawal, suspension or seizure of
      any
      Product, (ii) a brief description of all completed or pending proceedings
      seeking the recall, withdrawal, suspension or seizure of any Product, and (iii)
      a list of all regulatory letters received by the Buyer or the Parent or any
      of
      its agents relating to the Buyer or any of the Products or the Buyer’s
      establishments.

     

    (c) There
      exists no set of facts which could reasonably be expected to furnish a basis
      for
      the recall, withdrawal or suspension of any product registration, product
      license, repair or overhaul license, manufacturing license, wholesale dealers
      license, export license or other license, approval or consent of any
      governmental or regulatory authority with respect to the Buyer or any of the
      Products.

    
      
        
        

      

      
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    (d) There
      are
      no claims existing or threatened under or pursuant to any warranty, whether
      express or implied, on products or services sold by the Buyer. There are no
      claims existing and there is no basis for any claim against the Buyer for injury
      to persons, animals or property as a result of the sale, distribution or
      manufacture of any product or performance of any service by the Buyer,
      including, but not limited to, claims arising out of the defective or unsafe
      nature of its products or services. The Buyer has full and adequate insurance
      coverage for products liability claims against it.

     

    5.21 Transactions
      With Affiliates.
      Except
      as set forth on Schedule 5.21 and except for normal advances to employees
      consistent with past practices, payment of compensation for employment to
      employees consistent with past practices, and participation in scheduled Plans
      or Benefit Programs and Agreements by employees, the Buyer has not purchased,
      acquired or leased any property or services from, or sold, transferred or leased
      any property or services to, or loaned or advanced any money to, or borrowed
      any
      money from, or entered into or been party to any management, consulting or
      similar agreement with, or engaged in any other significant transaction with
      the
      Parent or any other officer, director of the Buyer or any of their respective
      Affiliates. Except as set forth on Schedule 5.21, neither the Parent, nor any
      other Affiliate of the Buyer is indebted to the Buyer for money borrowed or
      other loans or advances, and the Buyer is not indebted to any such
      Affiliate.

     

    5.22 Other
      Information.
      The
      information furnished by the Parent and the Buyer to the Company and the Company
      Stockholders pursuant to this Agreement (including, without limitation,
      information contained in the exhibits hereto, the Schedules identified herein,
      the instruments referred to in such Schedules and the certificates and other
      documents to be executed or delivered pursuant hereto by the Parent and/or
      the
      Buyer at or prior to the Closing) is not, nor at the Closing will be, false
      or
      misleading in any material respect, or contains, or at the Closing will contain,
      any misstatement of material fact, or omits, or at the Closing will omit, to
      state any material fact required to be stated in order to make the statements
      therein not misleading.

     

    Notwithstanding
      anything to the contrary contained in this Article V, the Parent and the Buyer
      shall be deemed to have made adequate disclosure to the Company and the Company
      Stockholders with respect to any item required to be listed on a Schedule set
      forth in this Article V, if such information is contained in the Parent Public
      Filings which have been furnished to the Company Stockholders and their legal
      representatives.

     

    ARTICLE
      VI. COVENANTS
      AND AGREEMENTS OF THE PARTIES 

     

    A.) With
      regard to the Company and the Company Stockholders the Company and the Company
      Stockholders hereto do hereby covenant and agree, as
      follows:

     

    6.1 Buyer’s
      Access to Information and Properties.
      The
      Company Stockholders and the Company shall permit Buyer and its authorized
      employees, agents, accountants, legal counsel and other representatives to
      have
      access to the books, records, employees, counsel, accountants, engineers and
      other representatives of the Company at all times reasonably requested by Buyer
      for the purpose of conducting an investigation of the Company’s financial
      condition, corporate status, operations, prospects, business and Properties.
      The
      Company shall make available to Buyer for examination and reproduction all
      documents and data of every kind and character relating to the Company in
      possession or control of, or subject to reasonable access by, the Company and/or
      the Company Stockholders, including, without limitation, all files, records,
      data and information relating to the Properties (whether stored in paper,
      magnetic or other storage media) and all agreements, instruments, contracts,
      assignments, certificates, orders, and amendments thereto. Also, the Company
      shall allow Buyer access to, and the right to inspect, the Properties, except
      to
      the extent that such Properties are operated by a third-Party operator, in
      which
      case the Company shall use its best efforts to cause the operator of such
      Properties to allow Buyer access to, and the right to inspect, such
      Properties.

    
      
        
        

      

      
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    6.2 Company’s
      Conduct of Business and Operations.
      The
      Company Stockholders shall keep Buyer advised as to all material operations
      and
      proposed material operations relating to the Company. The Company shall (a)
      conduct its business in the ordinary course, (b) keep available the services
      of
      present employees, (c) maintain and operate its Properties in a good and
      workmanlike manner, (d) pay or cause to be paid all costs and expenses
      (including but not limited to insurance premiums) incurred in connection
      therewith in a timely manner, (e) use reasonable efforts to keep all Contracts
      listed or required to be listed on Schedule
      4.13
      in full
      force and effect, (f) comply with all of the covenants contained in all such
      material Contracts, (g) maintain in force until the Closing Date insurance
      policies equivalent to those in effect on the date hereof, and (h) comply in
      all
      material respects with all applicable Legal Requirements. Except as otherwise
      contemplated in this Agreement, the Company will use its best efforts to
      preserve the present relationships of the Company with persons having
      significant business relations therewith. 

     

    6.3 General
      Restrictions.
      Except
      as otherwise expressly permitted in this Agreement, between the date of this
      Agreement and the Closing Date, without the prior written consent of Buyer,
      which consent shall not be unreasonably withheld, the Company shall not do
      any
      of the following, and the Company Stockholders shall not permit the Company
      to
      do any of the following:

     

    (i) declare,
      set aside or pay any dividends, or make any distributions or other payments
      in
      respect of its equity securities, or repurchase, redeem or otherwise acquire
      any
      such securities; 

     

    (ii) merge
      into or with or consolidate with, any other corporation or acquire the business
      or assets of any person;

     

    (iii) purchase
      any securities of any person;

     

    (iv) amend
      its
      charter or bylaws (unless otherwise required by the present
      agreement);

     

    (v) issue
      any
      capital stock or other securities, or grant, or enter into any agreement to
      grant, any options, convertibility rights, other rights, warrants, calls or
      agreements relating to its securities;

    
      
        
        

      

      
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    (vi) create,
      incur, assume, guarantee or otherwise become liable or obligated with respect
      to
      any indebtedness, or make any loan or advance to, or any investment in, any
      person, except in each case in the ordinary course of business;

     

    (vii) make
      any
      change in any existing election, or make any new election, with respect to
      any
      tax law in any jurisdiction which election could have an effect on the tax
      treatment of the Company or the Company’s business operations;

     

    (viii) enter
      into, amend or terminate any material agreement except in the ordinary course
      of
      business consistent with past business practices;

     

    (ix) sell,
      transfer, lease, mortgage, encumber or otherwise dispose of, or agree to sell,
      transfer, lease, mortgage, encumber or otherwise dispose of, any Properties
      except (i) in the ordinary course of business, or (ii) pursuant to any agreement
      specified in Schedule 4.13;

     

    (x) settle
      any material claim or litigation, or file any material motions, orders, briefs
      or settlement agreements in any proceeding before any Governmental Authority
      or
      any arbitrator; 

     

    (xi) other
      than in the ordinary course of business consistent with past practices, incur
      or
      approve, or enter into any agreement or commitment to make, any expenditures
      in
      excess of $50,000 (other than those required pursuant to any agreement specified
      in Schedule 4.13);

     

    (xii) maintain
      its books of account other than in the usual, regular and ordinary manner in
      accordance with generally accepted accounting principles and on a basis
      consistent with prior periods or make any change in any of its accounting
      methods or practices;

     

    (xiii) make
      any
      change, whether written or oral, to any agreement or understanding with any
      of
      the suppliers or customers listed except in the ordinary course of business
      consistent with past business practices; or required to be listed on Schedule
      4.19;

     

    (xiv) accelerate
      or delay collection of any notes or accounts receivable in advance of or beyond
      their regular due dates or the dates when they would have been collected in
      the
      ordinary course of business consistent with past practices;

     

    (xv) delay
      or
      accelerate payment of any accrued expense, trade payable or other liability
      beyond or in advance of its due date or the date when such liability would
      have
      been paid in the ordinary course of business consistent with past
      practices;

     

    (xvi) allow
      its
      levels of inventory to vary in any material respect from the levels customarily
      maintained;

     

    (xvii) adopt
      any
      Plan or Benefit Program or Agreement or increase the compensation payable to
      any
      employee (including, without limitation, any increase pursuant to any bonus,
      profit-sharing or other incentive plan or commitment);

    
      
        
        

      

      
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    (xviii) become
      a
      Party to or bound by any of the arrangements described in Section 4.13(a),
      whether written or oral;

     

    (xix) engage
      in
      any one or more activities or transactions outside the ordinary course of
      business; 

     

    (xx) enter
      into any transaction or make any commitment which could result in any of the
      representations, warranties or covenants of the Company and/or Company
      Stockholders contained in this Agreement not being true and correct after the
      occurrence of such transaction or event; or

     

    (xxi) commit
      to
      do any of the foregoing.

     

    6.4 Notice
      Regarding Changes.
      The
      Company Stockholders shall promptly inform Buyer in writing of any change in
      facts and circumstances that could render any of the representations and
      warranties made herein by the Company and/or the Company Stockholders inaccurate
      or misleading if such representations and warranties had been made upon the
      occurrence of the fact or circumstance in question. The Buyer shall promptly
      inform the Company Stockholders in writing of any change in facts and
      circumstances that could render any of the representations and warranties made
      herein by it inaccurate or misleading if such representations and warranties
      had
      been made upon the occurrence of the fact or circumstance in
      question.

     

    6.5 Maintenance
      of Insurance Policies.
      The
      Company shall take all actions necessary or appropriate to cause any and all
      insurance coverage currently carried by or for the benefit of the Company to
      remain in full force and effect.

     

    6.6 Casualty
      Loss.
      If,
      between the date of this Agreement and the Closing, any of the Properties of
      the
      Company shall be destroyed or damaged in whole or in part by fire, earthquake,
      flood, other casualty or any other cause, then the Company shall, at Buyer’s
      election, (i) cause such Properties to be repaired or replaced prior to the
      Closing with Properties of substantially the same condition and function, ,
      or
      (ii) enter into contractual arrangements satisfactory to Buyer so that the
      Company will have at the Closing the same economic value as if such casualty
      had
      not occurred.

     

    6.7 Employee
      Matters.

     

    (a) The
      Company shall permit Buyer to contact and make arrangements with the Company’s
      employees for the purpose of assuring their continued employment by the Company
      after the Closing and for the purpose of ensuring the continuity of the
      Company’s business, and the Company agrees not to discourage any such employees
      from consulting with Buyer.

     

    (b) The
      Company shall use its best efforts to keep available the services of its present
      employees through the Closing Date.

     

    (c) On
      or
      before the Closing Date, the Company Stockholders, the Buyer and the Company
      shall have established an employee bonus and/or equity incentive program for
      key
      employees of the Company (other than the Company Stockholders) that shall be
      acceptable to the Parties hereto.

    
      
        
        

      

      
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    6.8 No
      Shop.
      From
      the date of this Agreement until the earlier of (i) the Closing Date, or (ii)
      the termination of this Agreement, the Company shall not, and the Company
      Stockholders shall not cause the Company’s officers, directors, employees and
      other agents to, directly or indirectly, take any action to solicit, initiate
      or
      encourage any offer or proposal or indication of interest in a merger,
      consolidation or other business combination involving any equity interest in,
      or
      a substantial portion of the assets of the Company, other than in connection
      with the transactions contemplated by this Agreement. The Company shall
      immediately advise the Buyer of the terms of any offer, proposal or indication
      of interest that it receives or otherwise becomes aware of.

     

    6.9 Employment
      Agreements. On
      the
      Closing Date (a) the Buyer shall enter into a five (5) year employment agreement
      with I. Krafcsik, substantially in the form of Exhibit
      A-1
      annexed
      hereto and made a part hereof, and (b) the Buyer shall enter into a five (5)
      year employment agreement with A. Horvath, substantially in the form of
Exhibit
      A-2
      annexed
      hereto and made a part hereof (the “Employment
      Agreements”).

     

    6.10 Legal
      Opinions. On
      the
      Closing Date, the Company shall furnish to the Buyer, in form and content
      satisfactory to Buyer and its counsel, the favorable legal opinion of Dr. David
      Aliz, Dessewffy David, Esqs., legal counsel to the Company and the Company
      Stockholders, with respect to the matters set forth in Section 4.1 through
      Section 4.4 of this Agreement. In rendering such opinions, such counsel may
      rely
      as to factual matters on certificates of officers and directors of the Company
      and on certificates of governmental officials. 

     

    6.11 Audited
      Financial Statements and Company Backlog Requirement. 

     

    (a) On
      or
      before November 30, 2008, the Company shall deliver to the Buyer and the Parent
      the Audited Financial Statements of the Company contemplated by Section
      4.7(f)
      of this
      Agreement.

     

    (b) On
      the
      Closing Date, the Company shall have a backlog of firm equipment orders
      reasonably acceptable to the Buyer of a minimum of 6 Megawatts, the delivery
      and
      installation of which will generate a turnover of US$ 12,000,000 and an
      anticipated profit contribution of USD $3,000,000 during the twelve month period
      following the Closing Date.

     

    B.)
       With
      regard to the Parent and the Buyer the Parent and the Buyer do hereto do hereby
      covenant and agree, as follows:

     

    6.12 Company
      Stockholders' Access to Information and Properties.
      The
      Parent and the Buyer shall permit the Company Stockholders and its authorized
      employees, agents, accountants, legal counsel and other representatives to
      have
      access to the books, records, employees, counsel, accountants, engineers and
      other representatives of the Buyer at all times reasonably requested by the
      Company Stockholders for the purpose of conducting an investigation of the
      Buyers' financial condition, corporate status, operations, prospects, business
      and Properties. The Buyer shall make available to the Company Stockholders
      for
      examination and reproduction all documents and data of every kind and character
      relating to the Buyer in possession or control of, or subject to reasonable
      access by, the Parent and/or the Buyer, including, without limitation, all
      files, records, data and information relating to the Properties (whether stored
      in paper, magnetic or other storage media) and all agreements, instruments,
      contracts, assignments, certificates, orders, and amendments thereto. Also,
      the
      Buyer shall allow the Company Stockholders access to, and the right to inspect,
      the Properties, except to the extent that such Properties are operated by a
      third-Party operator, in which case the Buyer shall use its best efforts to
      cause the operator of such Properties to allow the Company Stockholders access
      to, and the right to inspect, such Properties.

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

    6.13 Buyers’s
      Conduct of Business and Operations.
      The
      Parent and the Buyer shall keep the Company Stockholders advised as to all
      material operations and proposed material operations relating to the Buyer
      and
      shall conduct its business in the ordinary course consistent with past business
      practices

     

    6.14 General
      Restrictions.
      Except
      as otherwise expressly permitted in this Agreement, between the date of this
      Agreement and the Closing Date, without the prior written consent of Buyer,
      which consent shall not be unreasonably withheld, the Buyer shall not do any
      of
      the following, and the Parent shall not permit the Buyer to do any of the
      following:

     

    (i) declare,
      set aside or pay any dividends, or make any distributions or other payments
      in
      respect of its equity securities, or repurchase, redeem or otherwise acquire
      any
      such securities; 

     

    (ii) merge
      into or with or consolidate with, any other corporation or acquire the business
      or assets of any person;

     

    (iii) purchase
      any securities of any person;

     

    (iv) amend
      its
      charter or bylaws;

     

    (v) issue
      any
      capital stock or other securities, or grant, or enter into any agreement to
      grant, any options, convertibility rights, other rights, warrants, calls or
      agreements relating to its securities;

     

    (vi) create,
      incur, assume, guarantee or otherwise become liable or obligated with respect
      to
      any indebtedness, or make any loan or advance to, or any investment in, any
      person, except in each case in the ordinary course of business;

     

    (vii) enter
      into, amend or terminate any material agreement;

     

    (viii) sell,
      transfer, lease, mortgage, encumber or otherwise dispose of, or agree to sell,
      transfer, lease, mortgage, encumber or otherwise dispose of, any Properties
      except (i) in the ordinary course of business, or (ii) pursuant to any agreement
      specified in Schedule 5.13(viii);

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

    (ix) settle
      any material claim or litigation, or file any material motions, orders, briefs
      or settlement agreements in any proceeding before any Governmental Authority
      or
      any arbitrator; 

     

    (x) other
      than in the ordinary course of business consistent with past practices, incur
      or
      approve, or enter into any agreement or commitment to make, any expenditures
      in
      excess of $50,000 (other than those required pursuant to any agreement specified
      in Schedule 5.13(x);

     

    (xi) maintain
      its books of account other than in the usual, regular and ordinary manner in
      accordance with generally accepted accounting principles and on a basis
      consistent with prior periods or make any change in any of its accounting
      methods or practices;

     

    (xii) make
      any
      change, whether written or oral, to any agreement or understanding with any
      of
      the suppliers or customers listed or required to be listed on Schedule
      5.19;

     

    (xiii) accelerate
      or delay collection of any notes or accounts receivable in advance of or beyond
      their regular due dates or the dates when they would have been collected in
      the
      ordinary course of business consistent with past practices;

     

    (xiv) delay
      or
      accelerate payment of any accrued expense, trade payable or other liability
      beyond or in advance of its due date or the date when such liability would
      have
      been paid in the ordinary course of business consistent with past
      practices;

     

    (xv) allow
      its
      levels of inventory to vary in any material respect from the levels customarily
      maintained;

     

    (xvi) adopt
      any
      Plan or Benefit Program or Agreement or increase the compensation payable to
      any
      employee (including, without limitation, any increase pursuant to any bonus,
      profit-sharing or other incentive plan or commitment);

     

    (xvii) become
      a
      Party to or bound by any of the arrangements described in Section 5.13(a) ,
      whether written or oral;

     

    (xviii) engage
      in
      any one or more activities or transactions outside the ordinary course of
      business; 

     

    (xix) enter
      into any transaction or make any commitment which could result in any of the
      representations, warranties or covenants of the Company and/or Company
      Stockholders contained in this Agreement not being true and correct after the
      occurrence of such transaction or event; or

     

    (xx) commit
      to
      do any of the foregoing.

     

    
      
        
        

      

      
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    6.15 Notice
      Regarding Changes.
      The
      Buyer shall promptly inform the Company Stockholders in writing of any change
      in
      facts and circumstances that could render any of the representations and
      warranties made herein by the Parent and/or the Buyer inaccurate or misleading
      if such representations and warranties had been made upon the occurrence of
      the
      fact or circumstance in question. The Buyer shall promptly inform the Company
      Stockholders in writing of any change in facts and circumstances that could
      render any of the representations and warranties made herein by it inaccurate
      or
      misleading if such representations and warranties had been made upon the
      occurrence of the fact or circumstance in question.

     

    6.16 Maintenance
      of Insurance Policies.
      The
      Buyer shall take all actions necessary or appropriate to cause any and all
      insurance coverage currently carried by or for the benefit of the Buyer to
      remain in full force and effect.

     

    6.17 Casualty
      Loss.
      If,
      between the date of this Agreement and the Closing, any of the Properties of
      the
      Buyer shall be destroyed or damaged in whole or in part by fire, earthquake,
      flood, other casualty or any other cause, then the Buyer shall, at Company
      Stockholders’ election, (i) cause such Properties to be repaired or replaced
      prior to the Closing with Properties of substantially the same condition and
      function, (ii) deposit in a separate account an amount sufficient to cause
      such
      Properties to be so repaired or replaced, or (iii) enter into contractual
      arrangements satisfactory to Company Stockholders so that the Buyer will have
      at
      the Closing the same economic value as if such casualty had not
      occurred.

     

    6.18 No
      Shop.
      From
      the date of this Agreement until the earlier of (i) the Closing Date, or (ii)
      the termination of this Agreement, the Parent shall not, and the Parent shall
      not cause the Buyer and the Buyer shall not and its officers, directors,
      employees and other agents to, directly or indirectly, shall not take any action
      to solicit, initiate or encourage any offer or proposal or indication of
      interest in a merger, consolidation or other business combination involving
      any
      equity interest in, or a substantial portion of the assets of the Buyer, other
      than in connection with the transactions contemplated by this Agreement. The
      Parent and the Buyer shall immediately advise the Company Stockholders of the
      terms of any offer, proposal or indication of interest that it receives or
      otherwise becomes aware of.

     

    6.19
       Legal
      Opinions. On
      the
      Closing Date, the Buyer shall furnish to the Company Stockholders, in form
      and
      content satisfactory to the Company Stockholders and its counsel, the favorable
      legal opinion of Hodgson Russ LLP and Norr Stiefenhofer Lutz, legal counsel
      to
      the Parent and the Parent and the Buyer, respectively, with respect to the
      matters contemplated by Section
      7.1(g)
      of this
      Agreement. 

     

    C.)
       All
      the Parties hereto do hereby covenant and agree, as
      follows:

     

    6.20 Settlement
      of EPV Solar Agreements. On
      or
      before the Closing Date, the Parent or the Buyer shall have terminated the
      provisions of Article 6 of agreements between the Buyer and Energy
      Photovoltaics, Inc. (“EPV
      Solar”)
      dated
      September 23, 2002 and December 29, 2005 (collectively the “EPV
      Solar Agreements”)
      or
      shall have entered into such settlement agreement or other business arrangement
      with EPV Solar as shall be reasonably acceptable to the Parties
      hereto.

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

     

    6.21 Ensure
      Conditions Met.
      Subject
      to the terms and conditions of this Agreement, each of the Parties hereto shall
      use all reasonable commercial efforts to take or cause to be taken all actions
      and do or cause to be done all things required under applicable Legal
      Requirements in order to consummate the transactions contemplated hereby,
      including, without limitation, (i) obtaining all Permits, authorizations,
      consents and approvals of any Governmental Authority or other person which
      are
      required for or in connection with the consummation of the transactions
      contemplated hereby and by the Exhibits, (ii) taking any and all reasonable
      actions necessary to satisfy all of the conditions to each Party’s obligations
      hereunder as set forth in Article VI, and (iii) executing and delivering all
      agreements and documents required by the terms hereof to be executed and
      delivered by such Party on or prior to the Closing. 

     

    6.22
       Payment
      of Transaction Expenses and Bonuses. The
      Company Stockholders and the Company, the Parent and the Buyer hereby agree
      that: (a) all legal, accounting and other transaction expenses incurred by
      the
      Company Stockholders and/or the Company in connection with the transactions
      contemplated by this Agreement, including the audit of the Audited Financial
      Statements of the Company (collectively, “Transaction
      Expenses”)
      shall
      be borne by the Buyer and (b) all Taxes to be incurred by the Company or the
      Company Stockholders in connection with the transactions contemplated by this
      Agreement, and all bonuses, incentive payments and other remuneration (in excess
      of current salaries) payable to the principal executive and any other member
      of
      the management of the Company (the “Bonus
      Compensation”),
      paid
      or payable by the Company shall be borne solely by the Company
      Stockholders.

     

    ARTICLE
      VII. CONDITIONS
      TO PARTIES’ OBLIGATIONS

     

    7.1 Conditions
      to Obligations of the Company and the Company Stockholders.
      The
      obligations of the Company Stockholders and the Company to carry out the
      transactions contemplated by this Agreement are subject, at the option of the
      Company Stockholders and the Company, to the satisfaction or waiver of the
      following conditions:

     

    (a) Buyer
      shall have furnished Company Stockholders with a certified copy of all necessary
      board of directors and corporate action on its behalf approving its execution,
      delivery and performance of this Agreement.

     

    (b) All
      representations and warranties of Buyer contained in this Agreement shall be
      true and correct in all material respects at and as of the Closing, and Parent
      and Buyer shall have performed and satisfied in all material respects all
      covenants and agreements required by this Agreement to be performed and
      satisfied by Buyer at or prior to the Closing.

     

    (c) Except
      for matters disclosed in Schedule
      5.9(a)
      or
Schedule
      5.9(b)
      attached
      hereto, since the June 30, 2008 Balance Sheet Date and up to and including
      the
      Closing, there shall not have been any event, circumstance, change or effect
      that, individually or in the aggregate, had or might have a material adverse
      effect on the Buyer’s business, operations, prospects, Properties or financial
      condition.

     

    (d) The
      Company Stockholders shall have completed its due diligence investigation,
      and
      the results thereof shall not have revealed that any of the representations
      of
      the Buyer or the Parent set forth herein are untrue or incorrect in any respect
      or otherwise be unsatisfactory to the Company Stockholders

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

     

    (e) All
      proceedings to be taken by the Buyer in connection with the transactions
      contemplated hereby and all documents incident thereto shall be satisfactory
      in
      form and substance to the Company Stockholders and its counsel, and the Company
      Stockholders and said counsel shall have received all such counterpart originals
      or certified or other copies of such documents as it or they may reasonably
      request.

     

    (f) As
      of the
      Closing Date, no suit, action or other proceeding (excluding any such matter
      initiated by or on behalf of the Company, or Company Stockholders) shall be
      pending or threatened before any Governmental Authority seeking to restrain
      the
      Company or prohibit the Closing or seeking Damages against the Company as a
      result of the consummation of this Agreement. 

     

    (g) The
      Company Stockholders and the Company shall have received the opinion(s) of
      Norr
      Stiefenhofer Lutz and Hodgson Russ, LLP, counsel to Buyer, dated as of the
      Closing Date, in form and substance reasonably satisfactory to the Company,
      with
      respect to the matters set forth in Sections 5.1, 5.2 and 5.3(i). In rendering
      such opinion, such legal counsel may rely as to factual matters on certificates
      of officers and directors of Buyer and on certificates of governmental
      officials, and (i) as to matters of Hungarian law, on the legal opinion of
      Norr
      Stiefenhofer Lutz, and (ii) as to matters of United States law, on the legal
      opinion of Hodgson Russ LLP. 

     

    (h) The
      Buyer
      shall have made the deliveries set forth in Section 3.3 above.

     

    (i)
       A
      condition precedent to Closing will be:

     

    (A)
       The
      transactions contemplated by Section
      2.2
      and by
      Section 2.3. of this Agreement shall have been completed; and 

     

    (B) Buyer
      shall have executed and delivered the Employment Agreements of Istvan Krafcsik
      and Attila Horvath in the form attached hereto as Exhibit
      A-1
      and
Exhibit
      A-2,
      respectively.

     

    (j) The
      Parent, the Buyer shall have executed and delivered to the Company Stockholders
      a shareholders agreement between the Parent, the Buyer and the Company
      Stockholders, to be executed and delivered on the Closing Date. and in
      substantially the form annexed hereto as Exhibit
      B
      and made
      a part hereof (the “Shareholders
      Agreement”).

     

    (k)
       The
      Parent and the Buyer shall have made the deliveries contemplated by Section
      3.3
      of this Agreement.

     

    7.2 Conditions
      to Obligations of the Parent and the Buyer.
      The
      obligations of the Parent and the Buyer to carry out the transactions
      contemplated by this Agreement are subject, at the option of the Parent and
      the
      Buyer, to the satisfaction, or waiver by the Parent and the Buyer, of the
      following conditions:

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

     

    (a) All
      representations and warranties of the Company and the Company Stockholders
      contained in this Agreement shall be true and correct in all material respects
      at and as of the Closing, and the Company and the Company Stockholders shall
      have performed and satisfied in all material respects all agreements and
      covenants required by this Agreement to be performed and satisfied by them
      at or
      prior to the Closing.

     

    (b) As
      of the
      Closing Date, no suit, action or other proceeding (excluding any such matter
      initiated by or on behalf of the Parent or the Buyer) shall be pending or
      threatened before any court or governmental agency seeking to restrain the
      Parent or the Buyer or prohibit the Closing or seeking Damages against the
      Parent or the Buyer or the Company or its Properties as a result of the
      consummation of this Agreement. 

     

    (c) Except
      for matters disclosed in Schedule
      4.9(a)
      or
Schedule
      4.9(b)
      attached
      hereto, since the Balance Sheet Date and up to and including the Closing, there
      shall not have been any event, circumstance, change or effect that, individually
      or in the aggregate, had or might have a material adverse effect on the
      Company’s business, operations, prospects, Properties or financial
      condition.

     

    (d) The
      Buyer
      shall have received the opinion of legal counsel to the Company and the Company
      Stockholders referred to in Section 6.11 above, dated as of the Closing Date,
      addressed to the Buyer and the Parent and in form and substance reasonably
      satisfactory to the Buyer and the Parent.

     

    (e) Each
      of
      the Company Stockholders and the Company shall have furnished Buyer with a
      certified copy of all necessary corporate or other action on its behalf
      approving the Company’s execution, delivery and performance of this
      Agreement.

     

    (f) All
      agreements, commitments and understandings between the Company and any Affiliate
      thereof shall have been terminated in all respects on terms satisfactory to
      Buyer, and all obligations, claims or entitlements thereunder shall be
      unconditionally waived and released by such Affiliates and written evidence
      thereof satisfactory in form and substance to Buyer shall have been delivered
      to
      Buyer. 

     

    (g) The
      Buyer
      shall have completed its due diligence investigation, and the results thereof
      shall not have revealed that any of the representations of the Company or the
      Company Stockholders set forth herein are untrue or incorrect in any respect
      or
      otherwise be unsatisfactory to Buyer.

     

    (h) The
      Parent shall have received not less than (U.S.)$3,000,000 in net proceeds from
      any public or private financing, which proceeds, together with other capital
      available to the Parent or the Buyer, shall be used to provide the Share Capital
      Increase contemplated by Section
      2.3
      of this
      Agreement.

     

    (i) All
      proceedings to be taken by the Company in connection with the transactions
      contemplated hereby and all documents incident thereto shall be satisfactory
      in
      form and substance to Buyer and its counsel, and Buyer and said counsel shall
      have received all such counterpart originals or certified or other copies of
      such documents as it or they may reasonably request.

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

     

    (j) No
      proceeding in which the Buyer, the Company Stockholders or the Company shall
      be
      a debtor, defendant or Party seeking an order for its own relief or
      reorganization shall have been brought or be pending by or against such person
      under any United States or state bankruptcy or insolvency law.

     

    (k) The
      Company shall be free and clear of all debt and liabilities (other than such
      debts and liabilities and Funded Indebtedness incurred in the ordinary course
      of
      its business as are acceptable to Buyer based on its due diligence) and that
      no
      dividends or other distributions to NPI or other Company Stockholders will
      have
      been made prior to the Closing Date.

     

    (l) On
      the
      Closing Date, I. Krafcsik and A. Horvath shall have each executed and delivered
      the Employment Agreements.

     

    (m) On
      the
      Closing Date, the Company Stockholders (including I. Krafcsik and A. Horvath)
      shall have executed and delivered to the Parent and the Buyer the Shareholders
      Agreement .

     

    (n) The
      Company Stockholders shall have made the deliveries contemplated by Section
      3.2
      of this
      Agreement.

     

    (o) The
      Company shall have delivered to the Buyer and the Parent the Audited Financial
      Statements as contemplated by Section
      4.7(f)
      and
Section
      6.11(a)
      of this
      Agreement.

     

    ARTICLE
      VIII. POST-CLOSING
      AGREEMENTS AND OBLIGATIONS

     

    8.1 Further
      Assurances.
      Following the Closing, the Company, the Company Stockholders, the Buyer and
      the
      Parent shall execute and deliver such documents, and take such other action,
      as
      shall be reasonably requested by any other Party hereto to carry out the
      transactions contemplated by this Agreement.

     

    8.2 Publicity.
      None of
      the Parties hereto shall issue or make, or cause to have issued or made, any
      public release or announcement concerning this Agreement or the transactions
      contemplated hereby, without the advance approval in writing of the form and
      substance thereof by each of the other Parties, except as and to the extent
      required by law (in which case, so far as possible, there shall be consultation
      among the Parties prior to such announcement), and the Parties shall endeavor
      jointly to agree on the text of any announcement or circular so approved or
      required.

     

    8.3 Post-Closing
      Indemnity

     

    8.3.1 From
      and
      after the Closing, the Company Stockholders shall indemnify and hold harmless
      the Company, the Parent, the Buyer and their Affiliates, directors, officers
      and
      employees from and against any and all Damages in accordance with and subject
      to
      the limitations set forth in Section
      10.1
      of this
      Agreement. 

     

    8.3.2  From
      and
      after the Closing, the Parent shall indemnify and hold harmless the Company
      Stockholders, Buyer, the Company and their Affiliates, directors, officers
      and
      employees from and against any and all Damages in accordance with and subject
      to
      the limitations set forth in Section
      10.2
      of this
      Agreement. 

     

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

     

    8.4 Non-Competition,
      Non-Solicitation and Non-Disclosure.

     

    (a) General.
      In
      order to induce the Buyer to enter into this Agreement and to consummate the
      transactions contemplated hereby, the Company Stockholders do each hereby
      covenant and agree as follows:

     

    (i) Without
      the prior written consent of the Buyer, none of the Company Stockholders or
      any
      of their Affiliates shall, for a period of five (5) years from and after the
      Closing Date: 

     

    (A)
      directly or indirectly acquire or own in any manner any interest in any person,
      firm, partnership, corporation, association or other entity which engages or
      plans to engage in any facet of the business of the Company or which competes
      or
      plans to compete in any way with the “Business” (as hereinafter defined) of the
      Buyer, the Company, the Parent or any of the direct or indirect subsidiaries
      or
      joint venture partners of the Buyer, the Company or the Parent (collectively,
      the “STF
      Companies”),
      anywhere in the world (the “Territory”);
      

     

    (B)
      be
      employed by or serve as an employee, agent, officer, director of, or as a
      consultant to, any person, firm, partnership, corporation, association or other
      entity which engages or plans to engage in any facet of the Business of the
      STF
      Companies or which competes or plans to compete in any way with Business of
      the
      STF Companies within the Territory, or 

     

    (C)
      utilize his special knowledge of the business of the Company and his or its
      relationships with customers, suppliers and others to compete with STF Companies
      in the Business; 

     

    provided,
      however,
      that
      nothing herein shall be deemed to prevent the Company Stockholders from
      acquiring through market purchases and owning, solely as an investment, less
      than three percent (3%) in the aggregate of the equity securities of any class
      of any issuer whose shares are registered under §12(b) or 12(g) of the
      Securities Exchange Act of 1934, as amended, and are listed or admitted for
      trading on any United States national securities exchange or are quoted on
      the
      National Association of Securities Dealers Automated Quotation System, or any
      similar system of automated dissemination of quotations of securities prices
      in
      common use, so long as Company Stockholders is not a member of any “control
      group” (within the meaning of the rules and regulations of the United States
      Securities and Exchange Commission) of any such issuer.

     

    As
      used
      herein the term “Business”
shall
      mean the manufacture, assembly, sale or distribution, individually and/or with
      third Persons, of equipment to manufacture solar panels or modules of all kinds,
      (b) the manufacture, assembly sale or distribution, individually and/or with
      third Persons, of solar panels or modules, and (c) the manufacture, assembly,
      installation and/or operation, individually and/or with third Persons, of
      turn-key solar panel manufacturing facilities.

     

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

     

    The
      Company Stockholders acknowledge and agree that the covenants provided for
      in
      this Section
      8.4(a)
      are
      reasonable and necessary in terms of time, area and line of business to protect
      the Company’s Trade Secrets. The Company Stockholders further acknowledge and
      agree that such covenants are reasonable and necessary in terms of time, area
      and line of business to protect the Company’s legitimate business interests,
      which include its interests in protecting the Company’s (i) valuable
      confidential business information, (ii) substantial relationships with customers
      throughout the United States, Europe, Asia and the world, and (iii) customer
      goodwill associated with the ongoing business of the Company. Company
      Stockholders expressly authorizes the enforcement of the covenants provided
      for
      in this Section
      8.4(a)
      by (A)
      the Company and its subsidiaries, (B) the Company’s permitted assigns, and (C)
      any successors to the Company’s business. To the extent that the covenants
      provided for in this Section
      8.4(a)
      may
      later be deemed by a court to be too broad to be enforced with respect to its
      duration or with respect to any particular activity or geographic area, the
      court making such determination shall have the power to reduce the duration
      or
      scope of the provision, and to add or delete specific words or phrases to or
      from the provision. The provision as modified shall then be
      enforced.

     

    (ii) Without
      the prior consent of Buyer, for a period of five (5) years from the Closing
      Date, the Company Stockholders shall not directly or indirectly, for himself
      or
      for any other person, firm, corporation, partnership, association or other
      entity: (i) attempt to employ or enter into any contractual arrangement with
      any
      employee or former employee of any of the STF Companies, unless such employee
      or
      former employee has not been employed by one or more of the STF Companies for
      a
      period in excess of nine months, and/or (ii) call on or solicit any of the
      actual or targeted prospective customers or clients of any of the STF Companies,
      nor shall the Company Stockholders make known the names and addresses of such
      customers or any information relating in any manner to the STF Companies
      business relationships with such customers.

     

    (iii) The
      Company Stockholders shall not at any time divulge, communicate, use to the
      detriment of the Company or for the benefit of any other person or persons,
      or
      misuse in any way, any Confidential Information pertaining to the STF Companies.
      Any confidential information or data now known or hereafter acquired by any
      of
      the Company Stockholders with respect to any of the STF Companies shall be
      deemed a valuable, special and unique asset of such STF Companies that is
      received by the Company Stockholders in confidence and as a fiduciary, and
      the
      Company Stockholders shall remain a fiduciary to each of the STF Companies
      with
      respect to all of such information.

     

    (b) Injunction. It
      is
      recognized and hereby acknowledged by the Parties hereto that a breach or
      violation by either the Company Stockholders of any or all of the covenants
      and
      agreements contained in this Section
      8.4
      may
      cause irreparable harm and damage to Buyer in a monetary amount which may be
      virtually impossible to ascertain. As a result, each of the Company Stockholders
      recognizes and hereby acknowledges that Buyer or any one or more of the other
      STF Companies shall be entitled to an injunction from any court of competent
      jurisdiction enjoining and restraining any breach or violation of any or all
      of
      the covenants and agreements contained in this Section 8.4 by either the Company
      Stockholders, and/or its or his associates, Affiliates, partners or agents,
      either directly or indirectly, and that such right to injunction shall be
      cumulative and in addition to whatever other rights or remedies the Buyer or
      such STF Companies may possess hereunder, at law or in equity. Nothing contained
      in this Section
      8.4 shall
      be
      construed to prevent Buyer of any of the STF Companies from seeking and
      recovering from the Company Stockholders damages sustained by it as a result
      of
      any breach or violation by the Company Stockholders of any of the covenants
      or
      agreements contained herein.

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

     

    (c) Termination
      of Covenants. Notwithstanding
      the provisions of this Section
      8.4,
      the
      covenants and obligations of the Company Stockholders set forth in this
Section
      8.4
      shall
      terminate in the event, and only in the event, that:

     

    (i) the
      Call
      Option or the Buy-Out Option (as those terms are defined in Section
      8.5
      and
Section
      8.6
      of this
      Agreement) are exercised and paid in full and
      the
      Company thereafter elects to terminate the employment of the applicable Company
      Stockholder(s) pursuant to clause 12.2(a) of the Employment Agreement with
      such
      Company Stockholder annexed hereto as Exhibit
      A-1
      and
Exhibit
      A-2
      for
      reasons other than an extraordinary termination (as defined in such Employment
      Agreement); or 

     

    (ii) a
      court
      of competent jurisdiction from which no appeal can or shall be taken shall
      determine that the Parent or the Buyer has committed (and shall have failed
      to
      cure within 30 days of written notice of such breach) a breach or violation
      of
      one or more of the employer’s covenants and agreements set forth in the five (5)
      year Employment Agreements, that involves (i) a material change without just
      cause in the nature of such Company Stockholder’s duties under his Employment
      Agreement, (ii) the failure by the Company to timely pay the compensation to
      which the Company Stockholders is entitled to receive under his Employment
      Agreement, or (iii) another act or omission by the Company that is sufficiently
      material to have justified the Company Stockholders to unilaterally terminate
      such Employment Agreement.

     

    8.5 Buy-Out
      Right. The
      “Minority” (as that term is defined in Section
      11.16
      of this
      Agreement) shall have the right, but not the obligation, to cause the Parent
      to
      buy the Minority Buyer Equity and their Minority Interest in the Buyer (the
      “Buy-out
      Transaction”),
      all
      upon the following terms and conditions:

     

    (a) 2012
      Buy-out Price. Beginning
      on January 2, 2012, the Minority shall have the right, but not the obligation,
      to cause the Parent to purchase one-half of the Minority Interest (the
“2012
      Buy-out Right”)
      at a
      purchase price (the “2012
      Buy-out Price”)
      that
      shall be equal to (i) the product of
      multiplying (A) the percentage by which the amount that one-half of the equity
      then owned by the Minority bears to 100% of the fully-diluted equity or share
      capital of the Buyer, by (B) eight (8) times the average of the Pre-Tax Profits
      (as that term is defined in Section
      11.21
      of this
      Agreement) for the two (2) financial years ended December 31, 2010 and December
      31, 2011 (the “2012
      Multiple”);
      provided,
      however,
      that if
      the Pre-Tax Profits for the financial year ending December 31, 2011 shall be
      ten
      percent (10%) lower or more than the Pre-Tax Profits for the financial year
      ending December 31, 2010, then the 2012 Multiple shall be equal to six (6)
      times
      the average of the Pre-Tax Profits for the two (2) financial years ended
      December 31, 2010 and December 31, 2011.

     

    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    

     

    (b) 2014
      Buy-out Price. In
      the
      event that the Parent has not previously exercised its Call Option as provided
      in Section 8.6 below, beginning on January 2, 2014, the Minority shall have
      the
      right, but not the obligation to cause the Parent Buyer to purchase the
      remaining one-half of the Minority Interest (the “2014
      Buy-out Right”)
      at a
      purchase price (the “2014
      Buy-out Price”)
      that
      shall be equal to: (i) the product of
      multiplying (A) the percentage by which the amount that the remaining one-half
      of the equity then owned by the Minority bears to 100% of the fully-diluted
      equity or share capital of the Buyer, by (B) eight (8) times the average of
      the
      Pre-Tax Profits (as that term is defined in Section
      11.20
      of this
      Agreement) for the two (2) financial years ended December 31, 2012 and December
      31, 2013 (the “2014
      Multiple”).

     

    (c) Cumulative
      Buy-out Right. In
      the
      event the Minority does not exercise the 2012 Buy-out Right then the Minority
      may increase their 2014 Buy-Out Right to cause the Parent to purchase 100%
      of
      the entire Minority Interest at the 2014 Buy-out Price. In the event that the
      Minority exercise the 2012 Buy-out Right and the Parent commit a default in
      payment thereof resulting in a Change of Control (as defined in Article IX
      below), the 2012 Buy-Out Price shall be applicable to 100% of the Minority
      Interest.

     

    (d) Minority
      Notification and Buy-out Payment Date. The
      Minority shall notify the Parent and the Buyer in writing during the month
      of
      April 2012 and/or during the month of April 2014, as applicable, of its
      intention to exercise the 2012 Buy-out Right and/or the 2014 Buy-out Right
      pursuant to the terms and conditions as set out in this Section 8.6 (the
“Minority
      Notification”).
      Pursuant to such the Minority Notification, the applicable Buy-out transaction
      shall be completed by not later than December 31, 2012 and December 31, 2014,
      as
      applicable (each a “Buy-out
      Payment Date”).
      The
      Parent shall provide the Minority with not less than ten (10) days prior written
      notice of the applicable Buy-out Payment Date. 

    

    (e) Payment
      of Applicable Buy-Out Price. On
      the
      applicable Buy-out Payment Date, the Parent or the Buyer shall pay to the
      Minority, the 2012 Buy-out Price and/or the 2014 Buy-out Price, as applicable,
      at the option of the Parent and the Buyer, either:

    

    (i) in
      full,
      in cash in immediately available funds plus interest on such Buy-out Price,
      at
      the rate of LIBOR for twelve month United States dollars interbank deposits
      as
      fixed by BBA plus a margin of three (3%) percent (the “Stated
      Interest Rate”),
      calculated from the date of the Minority Notification to the Buy-out Payment
      Date; or, 

    

    (ii) not
      less
      than fifty percent (50%) of the 2012 Buy-out Price and/or the 2014 Buy-out
      Price, as applicable, in full, in cash in immediately available funds plus
      interest on such Buy-out Price, at the Stated Interest Rate, calculated from
      the
      date of the Minority Notification to the Buy-out Payment Date, with the balance
      of such 2012 Buy-out Price and/or 2014 Buy-out Price to be evidenced by a
      promissory note of the Buyer (the “Buyer
      Note”);
      which
      Buyer Note shall:

    

    (A) bear
      interest, payable quarterly, at the rate of 8% per annum (the “Buyer
      Note Interest Rate”);

    

    (B) be
      due
      and payable, as to principal and all accrued interest, on a date which shall
      be
      not more than two (2) years from the Buy-out Payment Date (the “Maturity
      Date”);

     

    
      
        
        

      

      
        46

        
          

        

      

      
        
        

      

    

     

    (C) be
      unconditionally guaranteed as to payment by the Parent;

    

    (D) be
      secured by a pledge to the Minority of 50% of the appropriate percentage
      Minority Interest subject to the 2012 Buy-out Price and/or the 2014 Buy-out
      Price, as applicable;

    

    (E) at
      the
      option of the holder(s) of such Buyer Note, be convertible at any time on or
      before the Maturity Date (by written notice from the holder of such Buyer Note
      to the Parent) into shares of common stock of the Parent at a conversion price
      equal to 100% of the average of the closing prices of the Parent’s common stock
      for the 10 trading days immediately prior to the date notice of conversion
      is
      given; and .

    

    (F) be
      subject to equitable pro-rata increase as to the outstanding principal amount
      due and payable on the Maturity Date in the event and to the extent that eight
      (8) times the average of the Pre-Tax Profits (as that term is defined in
Section
      11.20
      of this
      Agreement) for the financial years ending in 2012 and 2013 (if such Note was
      based on the 2012 Buy-out Price) or for the financial years ending in 2014
      and
      2015 (if such Note was based on the 2014 Buy-out Price) shall be greater
      than
      eight (8) times the average of the Pre-Tax Profits for the two (2) financial
      years ending 2011 on which the 2012 Buy-out Price or the two (2) financial
      years
      ending 2013 on which the 2014 Buy-out Price, as applicable, was
      calculated.

    

    For
      the
      avoidance of doubt, as an example of the application of the foregoing, if the
      2014 Buy-out Price was $24.0 million (based on 40% of eight (8) times the
      average Pre-Tax Profits of $7.5 million in financial years 2012 and 2013) and
      $12.0 million of such 2014 Buy-out Price was evidenced by the Buyer’s Note, if
      the average Pre-Tax Profits in financial years 2014 and 2015 increases to $10.0
      million, 40% of eight (8) times $10.0 million is $32.0 million. Accordingly,
      50%
      of such amount would be $16.0 million so that the principal amount of the
      Buyer’s Note due and payable in 2016 would be increased by $4.0 million from
      $12.0 million to $16.0 million.

    

    In
      the
      event of a default, the Minority shall be paid interest (“Penalty
      Interest”)
      at the
      Buyer Note Interest Rate plus a margin of two (2%) percent (“Stated
      Penalty Interest Rate”)
      from
      the date of the default to the date of settlement of the applicable Buy-out
      Price. For avoidance of doubt, the Minority shall have the right to receive
      any
      dividend declared but not paid prior to the Minority Notification.

    

    (f) Extension
      of Employment Agreement Term. 
      In the
      event and to the extent that the Maturity Date of the Buyer Note shall be
      subsequent to the expiration date of the five (5) year Employment Agreements
      with the Company Stockholders, such expiration date shall be extended to a
      date
      which shall be the later to occur of (i) the payment in full of Buyer’s Note on
      or before its Maturity Date, or (ii) the consummation of a Change of Control
      (as
      applicable) set forth in Section
      8.5(g)
      below.

     

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

     

    (g) Change
      of Control following Default.
       In
      the
      event the Parent and the Buyer shall fail to meet its obligations to timely
      settle by the expiration of the applicable Buy-out Payment Period, the payment
      of the applicable 2012 Buy-out Price or the 2014 Buy-out Price, plus accrued
      interest at the Buyer Note Interest Rate, as aforesaid, unless the Parent shall
      effect payment of the applicable Buy-out Price, plus accrued interest at the
      Buyer Note Interest Rate and/or the Stated Penalty Interest Rate, as applicable,
      as set forth in Section
      8.5(e)
      above
      within forty-five (45) days following the Maturity Date of the Buyer Note (the
      “Grace
      Period”),
      then
      the Parent shall be deemed to be in default. In the event that a default shall
      occur, the Minority (i) shall have the right, but not the obligation, to cause
      the Parent and the board of directors of the Buyer to effect a “Change of
      Control” (as hereinafter defined in Article XI), and (ii) shall have the
      authority to mandate without any further delay and at its sole discretion a
      reputed investment banker to realize the Change of Control. The proceeds of
      the
      Change of Control shall be attributed in the following preference ranking order:
      

    

    (i) first,
      to
      pay for transaction costs pertaining to the Change of Control; 

    

    (ii) second,
      to pay in full to the Minority the Buy-out Purchase Price obligation for 100%
      of
      the Minority Interest; 

    

    (iii) third,
      to
      pay accrued interest on the Buy-out Purchase Price at the Buyer Note Interest
      Rate and to pay the Penalty Interest at the Stated Penalty Interest Rate;
      and

     

    (iv) the
      balance to the Parent.

    

    Notwithstanding
      the foregoing, if the Parent shall to pay the applicable Buy-out Price plus
      accrued interest at the Buyer Note Interest Rate, as provided in Section
      8.5(e)
      above
      prior to the date that a Change of Control shall be consummated, the Parent
      shall be deemed to have cured such default and such forced Change of Control
      shall terminate; provided,
      however,
      that if
      Parent or the Buyer shall subsequently default in payment of the Buyer Note
      and
      shall fail to cure such default, in additional to any other remedies against
      the
      Parent, the holder(s) of such Buyer Note may once again elect force a Change
      of
      Control under this Section
      8.5(g).

    

    8.6 Call
      Option and Call Option Price.

     

    (a)  The
      Parent and the Buyer are each hereby granted, effective as of the Closing Date,
      the irrevocable and unconditional right and option (the “Call
      Option”),
      but
      not the obligation, to acquire from the Minority 100% of the Minority Buyer
      Equity and the Minority Interest in the Buyer, all upon the terms and conditions
      set forth below in this Section
      8.6.

     

    (b) The
      Call
      Option may be exercised at any time beginning on January 2, 2012 and shall
      continue until June 30, 2012, as provided in Section
      8.6(c)
      below.
      If the Call Option is timely exercised, the Parent shall purchase all, and
      not
      less than all, of the Minority Interest or such other share capital or equity
      of
      the Buyer that is then owned of record or beneficially by Minority (the
“Call
      Option Shares”).
      Such
      Call Option Shares shall be acquired by the Parent at a purchase price equal
      to:
      (i) the product
      of
      multiplying (A) the percentage by which the amount that the Call Option Shares
      bears to 100% of the fully-diluted equity or share capital of the Buyer, by
      (B)
      the multiple of eight (8) times the higher of
      the
      Pre-Tax Profits for the two (2) financial years ended December 31, 2010 and
      December 31, 2011 (the “Call
      Option Price”).
      Notwithstanding the foregoing, if the audited consolidated Pre-Tax Profits
      for
      the financial year ending December 31, 2011 shall be ten percent (10%) lower
      or
      more than the Pre-Tax Profits for the financial year ending December 31, 2010,
      then the Call Option Price shall be equal to eight (8) times the average
      of the
      Pre-Tax Profits for the two (2) financial years ended December 31, 2010 and
      December 31, 2011.

     

    
      
        
        

      

      
        48

        
          

        

      

      
        
        

      

    

     

    (c) The
      Parent shall notify in writing the Minority on or before June 30, 2012, of
      its
      or their intention to exercise the Call Option pursuant to the terms and
      conditions set forth herein (the “Call
      Notification”).
      Pursuant to such Call Notification, the Call Option and the payment of the
      Call
      Option Price shall be completed by not later than December 31, 2012 (the
Call
      Option Payment Date”).
      The
      Parent shall provide the Minority with not less than ten (10) days prior written
      notice of the actual Call Option Payment Date. On such Call Option Payment
      Date,
      against delivery of share certificates evidencing all of the Call Option Shares,
      the Parent shall pay to the Minority in full, in cash in immediately available
      funds (i) the Call Option Price, plus (ii) interest on such Call Option Price,
      at the annual interest rate equal to (A) the LIBOR rate for twelve month United
      States dollar deposits as fixed by the BBA, plus (B) a margin of three percent
      (3%), calculated from the date of the Call Notification to the Call Option
      Payment Date. For
      avoidance of doubt, the Minority shall have the right to receive any dividend
      declared but not paid prior to the Call Notification.

    

    (d)  In
      the
      event that the Parent shall fail or refuse by 5:00 p.m. (Hungary time) on June
      30, 2012 to issue the Call Notification to notify the Minority of its to
      exercise the Call Option, such Call Option shall expire and may not thereafter
      be exercised without the prior written consent of the Minority.

    

    (e)  Certificates
      evidencing the Call Option Shares issued to the Company Stockholders on the
      Closing Date shall include legends legally required including the legend in
      substantially the following form:

    

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A CALL OPTION AND
      RESTRICTIONS ON TRANSFER, AS SET FORTH IN A STOCK EXCHANGE AGREEMENT, DATED
      AS
      OF SEPTEMBER 29, 2008, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY UPON
      REQUEST.

    

    (f) In
      addition to their other agreements and covenants contained in this Agreement,
      each of the Company Stockholders agree on behalf of themselves and their
      respective Affiliates, that 

    

    (i)
       they
      will
      not sell, assign or transfer any of the Option transfer or enter into any
      agreement or other commitment to effect any sale, assignment or transfer of
      the
      Call Option Shares;

    

    (ii) they
      will
      not grant to any Person (other than the Parent and the Buyer) any right, option
      or other ability to acquire any interest in the Call Option Shares,

    

    (iii)
       they
      will
      not pledge, encumber or impose any other Lien on any of the Call Option Shares;
      and

     

    
      
        
        

      

      
        49

        
          

        

      

      
        
        

      

    

     

    (iv)
      they
      will not engage in any transaction or any other voluntary act to avoid or seek
      to avoid the observance or performance of any of the covenants, stipulations
      or
      conditions to be observed or performed hereunder by them under this Section
      8.6.

     

    ARTICLE
      IX. TAX
      MATTERS

     

    9.1 Company
      Representations and Obligations Regarding Taxes.
      The
      Company represents and warrants to and agree with the Buyer as
      follows:

     

    (a) The
      Company has filed all Tax Returns that it was required to file. All such Tax
      Returns were, to the Knowledge of the Company Stockholders, correct and complete
      in all respects. All Taxes owed by the Company (whether or not shown on any
      Tax
      Return and whether or not any Tax Return was required) have been paid. The
      Company is not currently the beneficiary of any extension of time within which
      to file any Tax Return. No claim has ever been made by a taxing authority in
      a
      jurisdiction where the Company does not file Tax Returns that it is or may
      be
      subject to taxation by that jurisdiction. There are no liens on any of the
      assets of the Company that arose in connection with any failure (or alleged
      failure) to pay any Tax, except for liens for Taxes not yet due.

     

    (b) To
      the
      Knowledge of the Company Stockholders, the Company has withheld and paid all
      Taxes required to have been withheld and paid in connection with amounts paid
      or
      owing to any employee, independent contractor, creditor, stockholder or other
      third Party.

     

    (c) Schedule
      9.1(c)
      sets
      forth the following information with respect to the Company as of the most
      recent practicable date (as well as on an estimated pro forma basis as of the
      Closing giving effect to the consummation of the transactions contemplated
      hereby): (i) the basis of the Company in its assets; and (ii) the amount of
      any
      net operating loss, net operating loss carryover, net capital loss, net capital
      loss carryover, Tax credit, Tax credit carryover or excess charitable
      contribution of the Company.

     

    (d) The
      Company shall grant to Buyer or its designees access at all reasonable times
      to
      all of the Company’s books and records (including tax work papers and returns
      and correspondence with tax authorities), including the right to take extracts
      therefrom and make copies thereof, to the extent such books and records relate
      to taxable periods ending on or prior to or that include the Closing Date.
      Buyer
      shall (i) grant to Company Stockholders access at all reasonable times to all
      of
      the Company’s books and records (including tax work papers and returns and
      correspondence with tax authorities), including the right to take extracts
      therefrom and make copies thereof, to the extent that such books and records
      relate to the operations of the Company during taxable periods ending on or
      prior to or that include the Closing Date, and (ii) otherwise cooperate with
      Company Stockholders in connection with any audit of Taxes that relate to the
      business of the Company prior to Closing.

     

    (e) The
      transfer of the Subject Shares to Buyer pursuant to the terms of this Agreement
      will not result in any Tax liability to the Company or result in a reduction
      of
      the amount of any net operating loss, net operating loss carryover, net capital
      loss, net capital loss carryover, Tax credit, Tax credit carryover, excess
      charitable contribution or basis of property that otherwise would be available
      to the Company by reason or as a result of deferred intercompany transactions,
      excess loss accounts, or otherwise.

     

    
      
        
        

      

      
        50

        
          

        

      

      
        
        

      

    

     

    (f) Buyer
      shall be responsible for preparing and filing, or causing the Company to prepare
      and file, all Tax Returns of the Company required to be filed after the Closing
      Date. Company Stockholders shall pay to Buyer within five (5) days after the
      date on which Taxes are paid with respect to periods beginning before the
      Closing Date and ending on or after the Closing Date an amount equal to the
      portion of those Taxes that relates to the portion of the taxable period ending
      on the Closing Date. For purposes of this Agreement, in the case of any period
      that begins before the Closing Date and ends after the Closing Date, any tax
      based directly or indirectly on gross or net income or receipts or imposed
      in
      respect of specific transactions, and any credits available with respect to
      any
      Tax, shall be allocated by assuming that the taxable period ended on the Closing
      Date, and any other tax shall be allocated based on the number of days in the
      taxable period ending on the Closing Date divided by the total number of days
      in
      the taxable period.

     

    9.2 Company
      Stockholders Indemnification for Taxes.

     

    (a) The
      Company Stockholders hereby agrees to indemnify, jointly and severally, Buyer
      and each of its Subsidiaries, including, after the Closing, the Company (each
      herein sometimes referred to as an “Indemnified
      Taxpayer”)
      against, and agrees to protect, save and hold harmless each Indemnified Taxpayer
      from, any and all claims, damages, deficiencies and losses and all expenses,
      including, without limitation, attorneys’, accountants’ and experts’ fees and
      disbursements (all herein referred to as “Losses”)
      resulting from:

     

    (i) A
      claim
      by any taxing authority for (A) any Taxes of the Company allocable to any period
      ending on or prior to the Closing Date or allocable to any period that begins
      before and ends after the Closing Date, and (B) any Taxes of the Company or
      any
      corporation that is or was a member of an Affiliated Group of which the Company
      was or is a member;

     

    (ii) Any
      misrepresentation or breach of any representation, warranty or obligation set
      forth in this Article IX.

     

    (b) Subject
      to the resolution of any Tax contest pursuant to Section 9.2(c), upon notice
      from Buyer to the Company Stockholders that an Indemnified Taxpayer is entitled
      to an indemnification payment for a Loss pursuant to Section 9.2(a), the Company
      Stockholders shall thereupon pay to the Indemnified Taxpayer an amount that,
      net
      of any Taxes imposed on the Indemnified Taxpayer with respect to such payment,
      will indemnify and hold the Indemnified Taxpayer harmless from such
      Loss.

     

    (c)  If
      a
      claim shall be made by any taxing authority that, if successful, would result
      in
      the indemnification of an Indemnified Taxpayer, the Indemnified Taxpayer shall
      promptly notify the Company Stockholders in writing of such fact; provided,
      however, that any failure to give such notice will not waive any rights of
      the
      Indemnified Taxpayer except to the extent the rights of the indemnifying Party
      are actually materially prejudiced.

     

    
      
        
        

      

      
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    (i) The
      Company Stockholders shall have the right to defend the Indemnified Taxpayer
      against such claim with counsel of its choice satisfactory to the Indemnified
      Taxpayer so long as (A) the Company Stockholders notifies the Indemnified
      Taxpayer in writing within 15 days after the Indemnified Taxpayer has given
      notice of such claim that the Company Stockholders will indemnify the
      Indemnified Taxpayer from and against the entirety of any Losses the Indemnified
      Taxpayer may suffer resulting from, arising out of, relating to, in the nature
      of, or caused by the claim, (B) the Company Stockholders provides the
      Indemnified Taxpayer with evidence acceptable to the Indemnified Taxpayer that
      the Company Stockholders will have the financial resources to defend against
      the
      claim and fulfill his indemnification obligations hereunder, (C) if requested
      by
      the Indemnified Taxpayer, the Company Stockholders provides to the Indemnified
      Taxpayer an opinion, in form and substance reasonably satisfactory to the
      Indemnified Taxpayer, of counsel satisfactory to the Indemnified Taxpayer,
      that
      there exists a reasonable basis for the Company to prevail in that contest,
      (D)
      if the Indemnified Taxpayer is requested to pay the Tax claimed and sue for
      a
      refund, the Company Stockholders shall have advanced to the Indemnified
      Taxpayer, on an interest free basis, the full amount the Indemnified Taxpayer
      is
      required to pay, and (E) the Company Stockholders conducts the defense of the
      claim actively and diligently.

     

    (ii) Subject
      to the provisions of paragraph (ii) above, Company Stockholders shall be
      entitled to prosecute such contest to a determination in a court of initial
      jurisdiction, and if Company Stockholders shall reasonably request, to a
      determination in an appellate court provided that, if requested by the
      Indemnified Taxpayer, Company Stockholders shall provide to the Indemnified
      Taxpayer an opinion, in form and substance satisfactory to the Indemnified
      Taxpayer, of counsel satisfactory to the Indemnified Taxpayer, that there exists
      a reasonable basis for the Company to prevail on that appeal.

     

    (iii) Company
      Stockholders shall not be entitled to settle or to contest any claim relating
      to
      Taxes if the settlement of, or an adverse judgment with respect to, the claim
      would be likely, in the good faith judgment of the Indemnified Taxpayer, to
      cause the liability for any Tax of the Indemnified Taxpayer or of any Affiliate
      of the Indemnified Taxpayer for any taxable period ending after the Closing
      Date
      to increase (including, without limitation, by making any election or taking
      any
      action having the effect of making any election, by deferring the inclusion
      of
      any amount in income or by accelerating the deduction of any amount or the
      claiming of any credit) or to take a position that, if applied to any taxable
      period ending after the Closing Date, would be adverse to the interest of the
      Indemnified Taxpayer or any Affiliate of the Indemnified Taxpayer.

     

    (iv) If,
      after
      actual receipt by the Indemnified Taxpayer of an amount advanced by Company
      Stockholders pursuant to paragraph (ii)(D) above, the extent of the liability
      of
      the Indemnified Taxpayer with respect to the indemnified matter shall be
      established by the judgment or decree of a court that has become final or a
      binding settlement with an administrative agency having jurisdiction thereof
      that has become final, the Indemnified Taxpayer shall promptly pay to Company
      Stockholders any refund received by or credited to the Indemnified Taxpayer
      with
      respect to the indemnified matter (together with any interest paid or credited
      thereon by the taxing authority and any recovery of legal fees from such taxing
      authority); provided,
      however,
      that
      the Indemnified Taxpayer shall have been indemnified and held harmless from
      all
      Losses by reason of any indemnification payments retained by the Indemnified
      Taxpayer net of any Taxes imposed on the Indemnified Taxpayers with respect
      to
      indemnification payments received by the Indemnified Taxpayer or with respect
      to
      the receipt of any payment from the taxing authority. Notwithstanding the
      foregoing, the Indemnified Taxpayer shall not be required to make any payment
      hereunder before such time as Company Stockholders shall have made all payments
      or indemnities then due with respect to Indemnified Taxpayer pursuant to this
      Article IX.

     

    
      
        
        

      

      
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    (v) If
      any of
      the conditions in Section 9.2(c)(ii) above are or become unsatisfied, (A) the
      Indemnified Taxpayer may defend against, and consent to the entry of any
      judgment or enter into any settlement with respect to, the claim in any manner
      it may deem appropriate (and the Indemnified Taxpayer need not consult with,
      or
      obtain any consent from, Company Stockholders in connection therewith), (B)
      Company Stockholders will reimburse the Indemnified Taxpayer promptly and
      periodically for the costs of defending against the claim (including, without
      limitation, attorneys’, accountants’ and experts’ fees and disbursements) and
      (C) Company Stockholders will remain responsible for any Losses the Indemnified
      Taxpayer may suffer to the fullest extent provided in this Section
      9.2.

     

    (d) Anything
      to the contrary in this Agreement notwithstanding, the indemnification
      obligations of the Company Stockholders under this Article IX shall survive
      the
      Closing until the end of the applicable statutes of limitations. With respect
      to
      any indemnification obligation for any Tax for which a taxing authority asserts
      a claim within 90 days before the end of the applicable statute of limitations,
      an Indemnified Taxpayer shall be treated as having provided timely notice to
      Company Stockholders by providing written notice to Company Stockholders on
      or
      before the 90th day after the Indemnified Taxpayer’s receipt of a written
      assertion of the claim by the taxing authority.

     

    9.3 Buyer
      Representations and Obligations Regarding Taxes.
      The
      Parent and the Buyer represent and warrant to and agree with the Company
      Stockholders as follows:

     

    (a) The
      Buyer
      has filed all Tax Returns that it was required to file. All such Tax Returns
      were correct and complete in all respects. All Taxes owed by the Buyer (whether
      or not shown on any Tax Return and whether or not any Tax Return was required)
      have been paid. The Buyer is not currently the beneficiary of any extension
      of
      time within which to file any Tax Return. No claim has ever been made by a
      taxing authority in a jurisdiction where the Buyer does not file Tax Returns
      that it is or may be subject to taxation by that jurisdiction. There are no
      liens on any of the assets of the Buyer that arose in connection with any
      failure (or alleged failure) to pay any Tax, except for liens for Taxes not
      yet
      due.

     

    (b) The
      Buyer
      has withheld and paid all Taxes required to have been withheld and paid in
      connection with amounts paid or owing to any employee, independent contractor,
      creditor, stockholder or other third Party.

     

    (c) Schedule
      9.3(c)
      sets
      forth the following information with respect to the Buyer as of the most recent
      practicable date (as well as on an estimated pro forma basis as of the Closing
      giving effect to the consummation of the transactions contemplated hereby):
      (i)
      the basis of the Buyer in its assets; and (ii) the amount of any net operating
      loss, net operating loss carryover, net capital loss, net capital loss
      carryover, Tax credit, Tax credit carryover or excess charitable contribution
      of
      the Buyer.

     

    
      
        
        

      

      
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    (d) The
      Buyer
      shall grant to the Company Stockholders or its designees access at all
      reasonable times to all of the Buyer’s books and records (including tax work
      papers and returns and correspondence with tax authorities), including the
      right
      to take extracts there from and make copies thereof, to the extent such books
      and records relate to taxable periods ending on or prior to or that include
      the
      Closing Date. Buyer shall (i) grant to Company Stockholders access at all
      reasonable times to all of the Buyer’s books and records (including tax work
      papers and returns and correspondence with tax authorities), including the
      right
      to take extracts there from and make copies thereof, to the extent that such
      books and records relate to the operations of the Buyer during taxable periods
      ending on or prior to or that include the Closing Date. The transfer of the
      Minority Buyer Equity to the Company Stockholders pursuant to the terms of
      this
      Agreement will not result in any Tax liability to the Buyer or result in a
      reduction of the amount of any net operating loss, net operating loss carryover,
      net capital loss, net capital loss carryover, Tax credit, Tax credit carryover,
      excess charitable contribution or basis of property that otherwise would be
      available to the Buyer by reason or as a result of deferred inter-company
      transactions, excess loss accounts, or otherwise.

     

    (e) Parent
      shall be responsible for preparing and filing, or causing the Buyer to prepare
      and file, all Tax Returns of the Buyer required to be filed after the Closing
      Date. The Parent shall pay to Buyer within five (5) days after the date on
      which
      Taxes are paid with respect to periods beginning before the Closing Date and
      ending on or after the Closing Date an amount equal to the portion of those
      Taxes that relates to the portion of the taxable period ending on the Closing
      Date. For purposes of this Agreement, in the case of any period that begins
      before the Closing Date and ends after the Closing Date, any tax based directly
      or indirectly on gross or net income or receipts or imposed in respect of
      specific transactions, and any credits available with respect to any Tax, shall
      be allocated by assuming that the taxable period ended on the Closing Date,
      and
      any other tax shall be allocated based on the number of days in the taxable
      period ending on the Closing Date divided by the total number of days in the
      taxable period.

     

    9.4 Parent
      and Buyer Indemnification for Taxes.

     

    (a) The
      Parent hereby agree to indemnify the Company Stockholders and the Buyer (herein
      collectively or individually referred to as an “Indemnified
      Taxpayer”)
      against, and agrees to protect, save and hold harmless each Indemnified Taxpayer
      from, any and all claims, damages, deficiencies and losses and all expenses,
      including, without limitation, attorneys’, accountants’ and experts’ fees and
      disbursements (all herein referred to as “Losses”)
      resulting from:

     

    (i) A
      claim
      by any taxing authority for (A) any Taxes of the Buyer allocable to any period
      ending on or prior to the Closing Date or allocable to any period that begins
      before and ends after the Closing Date, and (B) any Taxes of the Buyer or any
      corporation that is or was a member of an Affiliated Group of which the Buyer
      was or is a member;

     

    (ii) Any
      misrepresentation or breach of any representation, warranty or obligation set
      forth in this Article IX.

     

    
      
        
        

      

      
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    (b) Subject
      to the resolution of any Tax contest pursuant to Section 9.4(c), upon notice
      from Buyer to the Company Stockholders that an Indemnified Taxpayer is entitled
      to an indemnification payment for a Loss pursuant to Section 9.4(a), the Parent
      shall thereupon pay to the Indemnified Taxpayer an amount that, net of any
      Taxes
      imposed on the Indemnified Taxpayer with respect to such payment, will indemnify
      and hold the Indemnified Taxpayer harmless from such Loss.

     

    (c)  If
      a
      claim shall be made by any taxing authority that, if successful, would result
      in
      the indemnification of an Indemnified Taxpayer, the Indemnified Taxpayer shall
      promptly notify the Buyer and the Parent in writing of such fact; provided,
      however, that any failure to give such notice will not waive any rights of
      the
      Indemnified Taxpayer except to the extent the rights of the indemnifying Party
      are actually materially prejudiced.

     

    (i) The
      Buyer
– upon the decision of the Parent - shall have the right to defend the
      Indemnified Taxpayer against such claim with counsel of its choice satisfactory
      to the Indemnified Taxpayer so long as (A) the Buyer notifies the Indemnified
      Taxpayer in writing within 15 days after the Indemnified Taxpayer has given
      notice of such claim that the Parent will indemnify the Indemnified Taxpayer
      from and against the entirety of any Losses the Indemnified Taxpayer may suffer
      resulting from, arising out of, relating to, in the nature of, or caused by
      the
      claim, (B) the Parent provides the Indemnified Taxpayer with evidence acceptable
      to the Indemnified Taxpayer that the Buyer – on the cost of the Parent - will
      have the financial resources to defend against the claim and fulfill his
      indemnification obligations hereunder, (C) if requested by the Indemnified
      Taxpayer, the Parent provides to the Indemnified Taxpayer an opinion, in form
      and substance satisfactory to the Indemnified Taxpayer, of counsel satisfactory
      to the Indemnified Taxpayer, that there exists a reasonable basis for the Buyer
      to prevail in that contest, (D) if the Indemnified Taxpayer is requested to
      pay
      the Tax claimed and sue for a refund, the Buyer shall have advanced to the
      Indemnified Taxpayer, on an interest free basis, the full amount the Indemnified
      Taxpayer is required to pay, and (E) the Buyer and the Parent conducts the
      defense of the claim actively and diligently.

     

    (ii) Subject
      to the provisions of paragraph (ii) above, the Buyer shall be entitled to
      prosecute such contest to a determination in a court of initial jurisdiction,
      and if Buyer shall reasonably request, to a determination in an appellate court
      provided that, if requested by the Indemnified Taxpayer, Parent shall provide
      to
      the Indemnified Taxpayer an opinion, in form and substance satisfactory to
      the
      Indemnified Taxpayer, of counsel satisfactory to the Indemnified Taxpayer,
      that
      there exists a reasonable basis for the Buyer to prevail on that
      appeal.

     

    (iii) Buyer
      shall not be entitled to settle or to contest any claim relating to Taxes if
      the
      settlement of, or an adverse judgment with respect to, the claim would be
      likely, in the good faith judgment of the Indemnified Taxpayer, to cause the
      liability for any Tax of the Indemnified Taxpayer or of any Affiliate of the
      Indemnified Taxpayer for any taxable period ending after the Closing Date to
      increase (including, without limitation, by making any election or taking any
      action having the effect of making any election, by deferring the inclusion
      of
      any amount in income or by accelerating the deduction of any amount or the
      claiming of any credit) or to take a position that, if applied to any taxable
      period ending after the Closing Date, would be adverse to the interest of the
      Indemnified Taxpayer or any Affiliate of the Indemnified Taxpayer.

     

    
      
        
        

      

      
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    (iv) If,
      after
      actual receipt by the Indemnified Taxpayer of an amount advanced by Parent
      pursuant to paragraph (ii)(D) above, the extent of the liability of the
      Indemnified Taxpayer with respect to the indemnified matter shall be established
      by the judgment or decree of a court that has become final or a binding
      settlement with an administrative agency having jurisdiction thereof that has
      become final, the Indemnified Taxpayer shall promptly pay to Parent any refund
      received by or credited to the Indemnified Taxpayer with respect to the
      indemnified matter (together with any interest paid or credited thereon by
      the
      taxing authority and any recovery of legal fees from such taxing authority);
      provided,
      however,
      that
      the Indemnified Taxpayer shall have been indemnified and held harmless from
      all
      Losses by reason of any indemnification payments retained by the Indemnified
      Taxpayer net of any Taxes imposed on the Indemnified Taxpayers with respect
      to
      indemnification payments received by the Indemnified Taxpayer or with respect
      to
      the receipt of any payment from the taxing authority. Notwithstanding the
      foregoing, the Indemnified Taxpayer shall not be required to make any payment
      hereunder before such time as Buyer shall have made all payments or indemnities
      then due with respect to Indemnified Taxpayer pursuant to this Article
      IX.

     

    (v) If
      any of
      the conditions in Section 9.4(c)(ii) above are or become unsatisfied, (A) the
      Indemnified Taxpayer may defend against, and consent to the entry of any
      judgment or enter into any settlement with respect to, the claim in any manner
      it may deem appropriate (and the Indemnified Taxpayer need not consult with,
      or
      obtain any consent from, Buyer in connection therewith), (B) Parent will
      reimburse the Indemnified Taxpayer promptly and periodically for the costs
      of
      defending against the claim (including, without limitation, attorneys’,
      accountants’ and experts’ fees and disbursements) and (C) Parent will remain
      responsible for any Losses the Indemnified Taxpayer may suffer to the fullest
      extent provided in this Section 9.4.

     

    (d) Anything
      to the contrary in this Agreement notwithstanding, the indemnification
      obligations of the Buyer and the Parent under this Article IX shall survive
      the
      Closing until the end of the applicable statutes of limitations. With respect
      to
      any indemnification obligation for any Tax for which a taxing authority asserts
      a claim within 90 days before the end of the applicable statute of limitations,
      an Indemnified Taxpayer shall be treated as having provided timely notice to
      Buyer by providing written notice to Buyer on or before the 90th day after
      the
      Indemnified Taxpayer’s receipt of a written assertion of the claim by the taxing
      authority.

     

    (e) All
      transfer, documentary, sales, use, stamp, registration and other such Taxes
      and
      fees (including any penalties and interest) incurred in connection with this
      Agreement shall be paid by the Party the Tax was imposed on by the relevant
      laws
      and Authorities, and such Party shall, at its own expense, file all necessary
      Tax Returns and other documentation with respect to all such transfer,
      documentary, sales, use, stamp, registration and other Taxes and fees, and,
      if
      required by applicable law, any other Party will, and will cause its Affiliates
      to, join in the execution of any such Tax Returns and other
      documentation.

     

    
      
        
        

      

      
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    ARTICLE
      X. MISCELLANEOUS

     

    10.1 Indemnification
      of Parent and/or Buyer .

     

    (a) Survival The
      representations, warranties, agreements, and indemnities of the Company and
      the
      Company Stockholders set forth in this Agreement or in connection with the
      transactions contemplated hereby shall survive the Closing except as expressly
      provided in Section 10.1(b). The Post-Closing Agreements and Covenants of the
      Parties set forth in Article VIII, including those set forth in Sections 8.4,
      8.5 and 8.6 of this Agreement, shall survive the Closing Date and the Closing
      indefinitely.

     

    (b) Indemnification
      and Business Indemnity Period. In
      addition to the Tax indemnification provisions set forth in Article IX of this
      Agreement but subject at all times to the limitations set forth in this
Section
      10.1,
      the
      Company Stockholders shall jointly and severally indemnify, defend and hold
      harmless the Company, the Buyer and the Parent from any and all Damages incurred
      by the Company, the Buyer or the Parent that arise from 

     

    (i) the
      breach of any of the representations and warranties of the Company Stockholders
      set forth in this Agreement, 

     

    (ii) the
      failure by the Company Stockholders to perform or satisfy in any material
      respect their covenants and agreements set forth in this Agreement or in any
      Exhibit hereto or document or certificate delivered by the Company Stockholders
      or the Company on the Closing Date, or 

     

    (iii) any
      claims asserted against any of the Parties to this Agreement by Energo Equipment
      Manufacturing Kft, or any of its Affiliates, including Perola Ltd.

     

    Notwithstanding
      the foregoing, the Company Stockholders shall have any liability under this
      Agreement to indemnify under either (A) clause (iii) of Section
      8.3.1,
      or (B)
      clause (i) of Section
      8.3.1
      against
      breaches of the provisions of Sections
      4.5
      (clauses
      (ii), (iii), (iv) and (v)), Section
      4.6,
      and
Section
      4.7
      through
Section
      4.23
      (collectively the “Business
      Indemnities”),
      in
      each case unless the indemnifying Party receives notice in writing from Buyer
      of
      Buyer’s claim under said indemnity on or before that date which shall be
      eighteen (18) months following the Closing Date (the “Business
      Indemnity Period”).
      Said
      limitations shall not apply to any breaches of or obligations to comply with
      any
      of the other provisions of this Agreement, regardless of whether such breach
      or
      obligation also constitutes a breach or obligation under any of the provisions
      specifically listed in this Section
      10.1(b).

     

    (c) Limitations
      on Liability. The
      Company Stockholders shall be obligated to indemnify as and to the extent set
      forth in this Section
      10.1
      only if
      the aggregate of all of their liability under such indemnity obligations exceeds
      $50,000, it being understood that such $50,000 figure is to serve as a “trigger”
for the indemnification and not as a “deductible” (for example, if the indemnity
      claims for which the Company Stockholders would, but for the provisions of
      this
      paragraph (c), be liable aggregate $51,000, the Company Stockholders would
      then
      be liable for the full $51,000, and not just $1,000). The maximum amount for
      which the Company Stockholders shall be liable to indemnify the Buyer and the
      Parent pursuant to this Section 10.1 shall be the product of multiplying the
      Minority Buyer Equity and Minority Interest in the Buyer by 50% of the Call
      Option Price set forth in Section
      8.6(b)
      above.

     

    
      
        
        

      

      
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    (d) Payment
      of Damages. In
      the
      event that the Company Stockholders shall become liable under this Agreement
      to
      indemnify the Buyer or the Parent for any Damages, the Company Stockholders
      shall pay such Damages to the Parent or the Buyer, at the option of the Company
      Stockholders, either (i) in cash, or (ii) by returning to the Buyer an
      applicable portion of the Minority Buyer Equity and the Minority Interest in
      the
      Buyer, valued at the Call Option Price set forth in Section
      8.6(b)
      above.

     

    10.2 Indemnification
      of Company Stockholders .

     

    (a) Survival The
      representations, warranties, agreements, and indemnities of the Parent and
      the
      Buyer set forth in this Agreement or in connection with the transactions
      contemplated hereby shall survive the Closing except as expressly provided
      in
Section
      10.2(b).
      The
      Post-Closing Agreements and Covenants of the Parties set forth in Article VIII,
      of this Agreement, shall survive the Closing Date and the Closing
      indefinitely.

     

    (b) Indemnification
      and Business Indemnity Period. In
      addition to the Tax indemnification provisions set forth in Article IX of this
      Agreement but subject at all times to the limitations set forth in this
Section
      10.2,
      the
      Parent shall indemnify, defend and hold harmless the Company Stockholders,
      the
      Buyer and the Company from any and all Damages incurred by the Company
      Stockholders, the Buyer or the Company that arise from 

     

    (i) the
      breach of any of the representations and warranties of the Parent or the Buyer
      forth in this Agreement, 

     

    (ii) the
      failure by the Parent or the Buyer to perform or satisfy in any material respect
      their covenants and agreements set forth in this Agreement or in any Exhibit
      hereto or document or certificate delivered by the Parent or the Buyer on the
      Closing Date, or

     

    (iii) any
      claims asserted against any of the Parties to this Agreement by EPV Solar,
      Ltd.
      or any of its Affiliates.

     

    Notwithstanding
      the foregoing, neither the Parent nor the Buyer shall have any liability under
      this Agreement to indemnify under either (A) clause (iii) of Section
      8.3.2,
      or (B)
      clause (i) of Section
      8.3.2
      against
      breaches of the provisions of Section
      5.5
      (clauses
      (ii), (iii), (iv) and (v)), of Section
      5.6,
      and
Section
      5.7
      through
Section
      5.23
      (collectively the “Business
      Indemnities”),
      in
      each case unless the indemnifying Party receives notice in writing from Company
      Stockholders of Company Stockholders' claim under said indemnity on or before
      that date which shall be eighteen (18) months following the Closing Date (the
      “Business
      Indemnity Period”).
      Said
      limitations shall not apply to any breaches of or obligations to comply with
      any
      of the other provisions of this Agreement, regardless of whether such breach
      or
      obligation also constitutes a breach or obligation under any of the provisions
      specifically listed in this Section
      10.2(b).

     

    
      
        
        

      

      
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    (c) Limitations
      on Liability. The
      Parent and the Buyer shall be obligated to indemnify as and to the extent set
      forth in Section 10.3 of this Agreement only if the aggregate of all of their
      liability under such indemnity obligations exceeds $50,000, it being understood
      that such $50,000 figure is to serve as a “trigger” for the indemnification and
      not as a “deductible” (for example, if the indemnity claims for which the Parent
      and the Buyer would, but for the provisions of this paragraph (c), be liable
      aggregate $51,000, the Parent and the Buyer would then be liable for the full
      $51,000, and not just $1,000). 

     

    (d) Payment
      of Damages.
      In the
      event that the Parent and/ or Buyer shall become liable under this Agreement
      to
      indemnify the Company Stockholders or the Buyer, as applicable, for any Damages,
      the Parent shall pay such Damages to the Company Stockholders or the Buyer,
      as
      applicable, in cash.

     

    10.3
       Indemnified
      Party and Indemnifying Party. For
      purposes of this Section
      10.3,
      a Party
      making a claim for indemnity under Section
      10.1
      or
Section
      10.2
      is
      hereinafter referred to as an “Indemnified
      Party”
and
      the
      Party against whom such claim is asserted is hereinafter referred to as the
      “Indemnifying
      Party.”
All
      claims by any Indemnified Party shall be asserted and resolved in accordance
      with the following provisions. If any claim or demand for which an Indemnifying
      Party would be liable to an Indemnified Party is asserted against or sought
      to
      be collected from such Indemnified Party by such third Party, said Indemnified
      Party shall with reasonable promptness notify in writing the Indemnifying Party
      of such claim or demand stating with reasonable specificity the circumstances
      of
      the Indemnified Party’s claim for indemnification; provided, however, that any
      failure to give such notice will not waive any rights of the Indemnified Party
      except to the extent the rights of the Indemnifying Party are actually
      prejudiced or to the extent that any applicable period set forth in Section
      10.1
      and
Section
      10.2(b)
      has
      expired without such notice being given. After receipt by the Indemnifying
      Party
      of such notice, then upon reasonable notice from the Indemnifying Party to
      the
      Indemnified Party, or upon the request of the Indemnified Party, the
      Indemnifying Party shall defend, manage and conduct any proceedings,
      negotiations or communications involving any claimant whose claim is the subject
      of the Indemnified Party’s notice to the Indemnifying Party as set forth above,
      and shall take all actions necessary, including but not limited to the posting
      of such bond or other security as may be required by any Governmental Authority,
      so as to enable the claim to be defended against or resolved without expense
      or
      other action by the Indemnified Party. Upon request of the Indemnifying Party,
      the Indemnified Party shall, to the extent it may legally do so and to the
      extent that it is compensated in advance by the Indemnifying Party for any
      costs
      and expenses thereby incurred,

     

    (i) take
      such
      action as the Indemnifying Party may reasonably request in connection with
      such
      action,

     

    (ii) allow
      the
      Indemnifying Party to dispute such action in the name of the Indemnified Party
      and to conduct a defense to such action on behalf of the Indemnified Party,
      and

     

    (iii) render
      to
      the Indemnifying Party all such assistance as the Indemnifying Party may
      reasonably request in connection with such dispute and defense.

     

    
      
        
        

      

      
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    10.4 Resolution
      of Disputes.

     

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

     

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

     

    (c) The
      Parties covenant and agree that they will participate in the arbitration in
      good
      faith and that they will, except as provided below, (A) bear their own
      attorneys’ fees, costs and expenses in connection with the arbitration, and
      (B) share equally in the fees and expenses charged by the arbitrators. The
      arbitrators may in their discretion assess costs and expenses (including the
      reasonable legal fees and expenses of the prevailing Party) against any Party
      to
      the proceeding. Any Party unsuccessfully refusing to comply with an order of
      the
      arbitrators shall be liable for costs and expenses, including attorneys’ fees,
      incurred by the other Party in enforcing the award. This Section 10.4. applies
      equally to requests for temporary, preliminary or permanent injunctive relief,
      except that in the case of temporary or preliminary injunctive relief any Party
      may proceed in court without prior arbitration for the purpose of avoiding
      immediate and irreparable harm or to enforce its rights under any
      non-competition covenants.

     

    10.5.
      Confidentiality.

     

    (a)  Prior
      to
      the Closing, Buyer shall, and shall cause its Affiliates and its and their
      employees, agents, accountants, legal counsel and other representatives and
      advisers to, hold in strict confidence all, and not divulge or disclose any,
      information of any kind concerning the Company and its business; provided,
      however, that the foregoing obligation of confidence shall not apply to (i)
      information that is or becomes generally available to the public other than
      as a
      result of a disclosure by Buyer or its Affiliates or any of its or their
      employees, agents, accountants, legal counsel or other representatives or
      advisers, (ii) information that is or becomes available to Buyer or its
      Affiliates or any of its or their employees, agents, accountants, legal counsel
      or other representatives or advisers on a non-confidential basis prior to its
      disclosure by Buyer or its Affiliates or any of its or their employees, agents,
      accountants, legal counsel or other representatives or advisers and (iii)
      information that is required to be disclosed by Buyer or its Affiliates or
      any
      of its or their employees, agents, accountants, legal counsel or other
      representatives or advisers as a result of any applicable law, rule or
      regulation of any Governmental Authority; and provided further that Buyer
      promptly shall notify the Company of any disclosure pursuant to clause (iii)
      of
      this Section 10.5.(a); and, provided, further, that the foregoing obligation
      of
      confidence shall not apply to the furnishing of information by Buyer in bona
      fide discussions or negotiations with prospective lenders.

     

    
      
        
        

      

      
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    (b) The
      Company and the Company Stockholders shall, and shall cause its or his
      Affiliates and their respective employees, agents, accountants, legal counsel
      and other representatives and advisers to, hold in strict confidence all, and
      not divulge or disclose any, information of any kind concerning the transactions
      contemplated by this Agreement, the Company, the Company Stockholders or their
      respective businesses; provided, however, that the foregoing obligation of
      confidence shall not apply to (i) information that is or becomes generally
      available to the public other than as a result of a disclosure by the Company,
      the Company Stockholders or its or his Affiliates or any of their respective
      employees, agents, accountants, legal counsel or other representatives or
      advisers, (ii) information that is or becomes available to the Company, the
      Company Stockholders or its or his Affiliates or any of their respective
      employees, agents, accountants, legal counsel or other representatives or
      advisers after the Closing on a non-confidential basis prior to its disclosure
      by the Company, the Company Stockholders or its or his Affiliates or any of
      their respective employees, agents, accountants, legal counsel or other
      representatives or advisers and (iii) information that is required to be
      disclosed by the Company, the Company Stockholders or its or his Affiliates
      or
      any of their respective employees, agents, accountants, legal counsel or other
      representatives or advisers as a result of any applicable law, rule or
      regulation of any Governmental Authority; and provided further that the Company
      shall promptly shall notify Buyer of any disclosure pursuant to clause (iii)
      of
      this Section 10.3(b).

     

    10.6.
      Brokers.
      Regardless of whether the Closing shall occur, (i) the Company Stockholders
      and
      the Company shall indemnify and hold harmless Buyer from and against any and
      all
      liability for any brokers or finders’ fees arising with respect to brokers or
      finders retained or engaged by the Company or the Company Stockholders in
      respect of the transactions contemplated by this Agreement, and (ii) Buyer
      shall
      indemnify and hold harmless the Company Stockholders from and against any and
      all liability for any brokers’ or finders’ fees arising with respect to brokers
      or finders retained or engaged by Buyer in respect of the transactions
      contemplated by this Agreement. 

     

    10.7 Costs
      and Expenses.
      Each of
      the Parties to this Agreement shall bear his or its own expenses incurred in
      connection with the negotiation, preparation, execution and closing of this
      Agreement, however, Buyer shall be responsible for and shall discharge all
      Transaction Expenses by and on behalf of the Company Stockholders and or/the
      Company pursuant to Section 6.20. 

     

    
      
        
        

      

      
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    10.8 Notices.
      Any
      notice, request, instruction, correspondence or other document to be given
      hereunder by any Party hereto to another (herein collectively called
“Notice”)
      shall
      be in writing and delivered personally or mailed by registered or certified
      mail, postage prepaid and return receipt requested, or by facsimile, as
      follows:

    

      
        	
                IF
                  TO BUYER:

              	
                Solar
                  Thin Films, Inc.

              
	 	
                505
                  Grove Street

              
	 	
                Haddonfield,
                  New Jersey 08033

              
	 	
                Attn:
                  Peter C. Lewis, President

              
	 	
                Fax
                  No.

              
	 	
                email:
                  peter.lewis@solarthinfilms.com

              

      

       

      
        	
                With
                  copies to:

              	 
	 	 
	
                Hodgson
                  Russ, LLP

              	
                Norr
                  Stiefenhofer Lutz

              
	
                1540
                  Broadway, 24th
                  Floor

              	
                F.ou.u
                  14-18

              
	
                New
                  York, New York 10036

              	
                H-1011
                  Budapest, Hungary

              
	
                Attention:
                  Stephen A. Weiss, Esq.

              	
                Attention:
                  Dr. Jeno Kimmel 

              
	
                Fax
                  No. 212-751-0928

              	
                Fax
                  No. ++36-1-224-0495

              
	
                email:
                  sweiss@hodgsonruss.com

              	
                email:
                  jenoe.kimmel@noerr.com

              

      

    

     

    IF
      TO THE COMPANY, AND/OR

    THE
      COMPANY STOCKHOLDERS:

    

    Istvan
      Krafcsik

    H-1021
      Budapest, Kuruclesiu 40. Hungary

    Fax
      No.
      +361 392 2617

    

    With
      a
      copy to:

    

    Dessewffy
      David

    H-1061

    Budapest,
      Andrassy ut.43

    Hungary

    Attn:
      Dr.
      David Aliz

    Fax
      No.
      +36 1-413-3340

    email:
      david@dessewffy.com

     

    Each
      of
      the above addresses for notice purposes may be changed by providing appropriate
      notice hereunder. Notice given by personal delivery or registered mail shall
      be
      effective upon actual receipt. Notice given by telecopier shall be effective
      upon actual receipt if received during the recipient’s normal business hours, or
      at the beginning of the recipient’s next normal business day after receipt if
      not received during the recipient’s normal business hours. All Notices by
      telecopier shall be confirmed by the sender thereof promptly after transmission
      in writing by registered mail or personal delivery. Anything to the contrary
      contained herein notwithstanding, notices to any Party hereto shall not be
      deemed effective with respect to such Party until such Notice would, but for
      this sentence, be effective both as to such Party and as to all other persons
      to
      whom copies are provided above to be given.

     

    
      
        
        

      

      
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    10.9 Governing
      Law.
      The
      provisions of this agreement and the documents delivered pursuant hereto shall
      be governed by and construed in accordance with the laws of the State of New
      York (excluding any conflict of law rule or principle that would refer to the
      laws of another jurisdiction). Notwithstanding the foregoing, the laws of
      Hungary shall govern the Share Capital Increase and the Employment
      Agreements.

     

    10.10.  Entire
      Agreement; Amendments and Waivers.
      This
      Agreement, together with all exhibits and schedules attached hereto, constitutes
      the entire agreement between and among the Parties hereto pertaining to the
      subject matter hereof and supersedes all prior agreements, understandings,
      negotiations and discussions, whether oral or written, of the Parties, and
      there
      are no warranties, representations or other agreements between the Parties
      in
      connection with the subject matter hereof except as set forth specifically
      herein or contemplated hereby. No supplement, modification or waiver of this
      Agreement shall be binding unless executed in writing by the Party to be bound
      thereby. No waiver of any of the provisions of this Agreement shall be deemed
      or
      shall constitute a waiver of any other provision hereof (regardless of whether
      similar), nor shall any such waiver constitute a continuing waiver unless
      otherwise expressly provided.

     

    10.11.  Binding
      Effect and Assignment.
      This
      Agreement shall be binding upon and inure to the benefit of the Parties hereto
      and their respective permitted successors and assigns; but neither this
      Agreement nor any of the rights, benefits or obligations hereunder shall be
      assigned, by operation of law or otherwise, by any Party hereto without the
      prior written consent of the other Party; provided, however, that the Buyer
      may
      assign its rights hereunder to any lender to the Buyer or the Parent. Nothing
      in
      this Agreement, express or implied, is intended to confer upon any person or
      entity other than the Parties hereto and their respective permitted successors
      and assigns, any rights, benefits or obligations hereunder.

     

    10.12 Remedies.
      The
      rights and remedies provided by this Agreement are cumulative, and the use
      of
      any one right or remedy by any Party hereto shall not preclude or constitute
      a
      waiver of its right to use any or all other remedies. Such rights and remedies
      are given in addition to any other rights and remedies a Party may have by
      law,
      statute or otherwise.

     

    10.13 Exhibits
      and Schedules.
      The
      exhibits and Schedules referred to herein are attached hereto and incorporated
      herein by this reference. Disclosure of a specific item in any one Schedule
      shall be deemed restricted only to the Section to which such disclosure
      specifically relates except where (i) there is an explicit cross-reference
      to
      another Schedule, and (ii) Buyer could reasonably be expected to ascertain
      the
      scope of the modification to a representation intended by such
      cross-reference.

     

    10.14 Multiple
      Counterparts.
      This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed an original, but all of which together shall constitute one and the
      same
      instrument.

     

    
      
        
        

      

      
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    10.15 References
      and Construction.

     

    (a) Whenever
      required by the context, and is used in this Agreement, the singular number
      shall include the plural and pronouns and any variations thereof shall be deemed
      to refer to the masculine, feminine, neuter, singular or plural, as the
      identification the person may require. References to monetary amounts, specific
      named statutes and generally accepted accounting principles are intended to
      be
      and shall be construed as references to United States dollars, statutes of
      the
      United States of the stated name and United States generally accepted accounting
      principles, respectively, unless the context otherwise requires.

     

    (b) The
      provisions of this Agreement shall be construed according to their fair meaning
      and neither for nor against any Party hereto irrespective of which Party caused
      such provisions to be drafted. Each of the Parties acknowledge that it has
      been
      represented by an attorney in connection with the preparation and execution
      of
      this Agreement.

     

    10.16 Survival.
      Any
      provision of this Agreement which contemplates performance or the existence
      of
      obligations after the Closing Date, and any and all representations and
      warranties set forth in this Agreement, shall not be deemed to be merged into
      or
      waived by the execution and delivery of the instruments executed at the Closing,
      but shall expressly survive Closing and shall be binding upon the Party or
      Parties obligated thereby in accordance with the terms of this Agreement,
      subject to any limitations expressly set forth in this Agreement.

     

    10.17 Attorneys’
      Fees.
      In the
      event any suit or other legal proceeding is brought for the enforcement of
      any
      of the provisions of this Agreement, the Parties hereto agree that the
      prevailing Party or Parties shall be entitled to recover from the other Party
      or
      Parties upon final judgment on the merits reasonable attorneys’ fees (and sales
      taxes thereon, if any), including attorneys’ fees for any appeal, and costs
      incurred in bringing such suit or proceeding.

     

    10.18 Risk
      of Loss.
      Prior
      to the Closing, the risk of loss of damage to, or destruction of, any and all
      of
      a Party’s assets, including without limitation the Properties, shall remain with
      such party, and the legal doctrine known as the “Doctrine of Equitable
      Conversion” shall not be applicable to this Agreement or to any of the
      transactions contemplated hereby.

     

    ARTICLE
      XI. DEFINITIONS

     

    Capitalized
      terms used in this Agreement are used as defined in this Article XI or elsewhere
      in this Agreement.

     

    11.1 Affiliate.
      means with
      respect to any Person, any other Person directly or indirectly controlling
      (including, but not limited to, all directors and officers of such Person),
      controlled by, or under direct or indirect common control with, such Person.
      A
      Person shall be deemed to control another Person if such Person possesses,
      directly or indirectly, the power to direct or cause the direction of the
      management and policies of such other Person, whether through the ownership
      of
      voting securities, by contract or otherwise. 

     

    11.2 Exhibits.
      The
      term “Exhibits” shall mean any or all of the exhibits to this Agreement and any
      and all other agreements, instruments or documents required or expressly
      provided under this Agreement to be executed and delivered in connection with
      the transactions contemplated by this Agreement.
      

     

    
      
        
        

      

      
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    11.3 Subject
      Company Quotas.
      The term
      "Subject Company Quotas" shall have the meaning of hundred percent of the quota
      in the capital stock of the Company

     

    11.4 Confidential
      Information.
      The
      term “Confidential Information” shall mean confidential data and confidential
      information relating to the business of the Company (which does not rise to
      the
      status of a Trade Secret under applicable law) which is or has been disclosed
      to
      Company Stockholders or of which Company Stockholders became aware as a
      consequence of or through his employment with the Company and which has value
      to
      the Company and is not generally known to the competitors of the Company.
      Confidential Information shall not include any data or information that (i)
      has
      been voluntarily disclosed to the general public by the Company or its
      Affiliates, (ii) has been independently developed and disclosed to the general
      public by others, or (iii) otherwise enters the public domain through lawful
      means.

     

    11.5 Change
      of Control. The
      term
“Change of Control” shall mean the sale of Buyer and its consolidated
      Subsidiaries (including the Company), pursuant to a sale of the Buyer Shares
      or
      the assets and properties of Buyer and its consolidated Subsidiaries (including
      the Company) to any Person who is not an Affiliate of the Parent or its
      Affiliates (each an “Unaffiliated
      Third Party”). 

     

    11.6 Contracts.
      The
      term
“Contracts,” when described as being those of or applicable to any person, shall
      mean any and all contracts, agreements, franchises, understandings,
      arrangements, leases, licenses, registrations, authorizations, easements,
      servitudes, rights of way, mortgages, bonds, notes, guaranties,
      liens, indebtedness, approvals
      or other instruments or undertakings
      to
      which
      such person is a Party or to which or by which such person or the property
      of
      such person is subject or bound, excluding any Permits.

     

    11.7 Damages.
      The
      term “Damages” shall mean any and all damages, liabilities, obligations,
      penalties, fines, judgments, claims, deficiencies, losses, costs, expenses
      and
      assessments (including without limitation income and other taxes, interest,
      penalties and attorneys’ and accountants’ fees and disbursements).

     

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

     

    11.9 Financial
      Statements.
      The
      term “Financial Statements” shall mean any or all of the financial statements,
      including balance sheets and related statements of income and statements of
      changes in financial position and the accompanying notes thereto, of the
      Company’s business prepared in accordance with generally accepted accounting
      principles consistently applied, except as may be otherwise provided
      herein.

     

    
      
        
        

      

      
        65

        
          

        

      

      
        
        

      

    

     

    11.10 “Funded
      Indebtedness.
“Funded
      Indebtedness” shall mean the aggregate amount (including the current portions
      thereof) of all (i) indebtedness of the Company for money borrowed from others,
      capital lease obligations, dividends payable to the Company Stockholders, bonus
      payables to employees, and purchase money indebtedness of the Company, (ii)
      indebtedness of the type described in clause (i) above guaranteed, directly
      or
      indirectly, in any manner by the Company, or in effect guaranteed, directly
      or
      indirectly, in any manner by the Company, through an agreement, contingent
      or
      otherwise, to supply funds to, or in any other manner invest in, the debtor,
      or
      to purchase indebtedness, or to purchase and pay for property if not delivered
      or to pay for services if not performed, primarily for the purpose of enabling
      the Company to make payment of the indebtedness or to assure the owners of
      the
      indebtedness against loss, but excluding endorsements of checks and other
      instruments in the ordinary course, (iii) indebtedness of the type described
      in
      clause (i) above secured by any Lien upon property owned by the Company, even
      though the Company has not in any manner become liable for the payment of such
      indebtedness and (iv) interest expense accrued but unpaid, and all prepayment
      premiums, on or relating to any of such indebtedness. . Contracts evidencing
      its
      Funded Indebtedness are set forth on Schedule
      11.7
      hereto

     

    11.11 GAAP 
      The term
“GAAP” means U.S. generally accepted accounting principles.

     

    11.12 Governmental
      Authorities.
      The
      term “Governmental Authorities” shall mean any nation or country (including but
      not limited to the United States) and any commonwealth, territory or possession
      thereof and any political subdivision of any of the foregoing, including but
      not
      limited to courts, departments, commissions, boards, bureaus, agencies,
      ministries or other instrumentalities.

     

    11.13 Hazardous
      Material.
      The
      term “Hazardous Material” shall mean all or any of the following: (a) substances
      that are defined or listed in, or otherwise classified pursuant to, any
      applicable laws or regulations as “hazardous substances,” “hazardous materials,”
“Hazardous wastes,” “toxic substances” or any other formulation intended to
      define, list or classify substances by reason of deleterious properties such
      as
      ignitability, corrosivity, reactivity, carcinogenicity, reproductive toxicity
      or
“EP toxicity”; (b) oil, petroleum or petroleum derived substances, natural gas,
      natural gas liquids or synthetic gas and drilling fluids, produced waters and
      other wastes associated with the exploration, development or production of
      crude
      oil, natural gas or geothermal resources; (c) any flammable substances or
      explosives or any radioactive materials; and (d) asbestos in any form or
      electrical equipment which contains any oil or dielectric fluid containing
      levels of polychlorinated biphenyls in excess of fifty parts per
      million.

     

    11.14 Inventory.
      The
      term “Inventory” shall mean all goods, merchandise and other personal property
      owned and held for sale, and all raw materials, works-in-process, materials
      and
      supplies of every nature which contribute to the finished products of the
      Company in the ordinary course of its business, specifically excluding, however,
      damaged, defective or otherwise unsaleable items.

     

    11.15 Knowledge
      of the Company.
      The
      term “Knowledge of the Company” shall mean the actual knowledge of any of the
      directors, officers or managerial personnel of the Company with respect to
      the
      matter in question, and such knowledge of the directors, officers or managerial
      personnel of the Company reasonably should have obtained upon diligent
      investigation and inquiry into the matter in question.

     

    
      
        
        

      

      
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    11.16 Legal
      Requirements.
      The
      term “Legal Requirements,” when described as being applicable to any person,
      shall mean any and all laws (statutory, judicial or otherwise), ordinances,
      regulations, judgments, orders, directives, injunctions, writs, decrees or
      awards of, and any Contracts with, any Governmental Authority, in each case
      as
      and to the extent applicable to such person or such person’s business,
      operations or properties.

     

    11.17 Minority
      The term
“Minority” means and includes all of the Company Stockholders and their
      Permitted Transferees (as that term is defined in the Shareholders
      Agreement).

     

    11.18 Parent
      Public Filings The
      term
“Parent Public Filings” means and includes all of the filings by the Parent with
      the United States Securities and Exchange Commission under the United States
      Securities Act of 1933, as amended (the “33
      Act”),
      and
      the United States Securities Exchange Act of 1934, as amended (the “34
      Act”),
      for
      all periods from and after January 1, 2005, including, without limitation,
      all
      (a) registration statements on Form S-1 or other forms for registering
      securities under the 33 Act, (b) all Form 10KSB Annual Reports, Form 8-K Interim
      Report, Form 10-Q Quarterly Report, and all proxy statements on Form 14A and
      other filings under the 34 Act.

     

    11.19 Permits.
      The
      term “Permits” shall mean any and all permits, rights, approvals, licenses,
      authorizations, legal status, orders or Contracts under any Legal Requirement
      or
      otherwise granted by any Governmental Authority.

     

    11.20 Person.
      The
      term “Person” shall mean any individual, partnership, joint venture, firm,
      corporation, association, limited liability company, trust or other enterprise
      or any governmental or political subdivision or any agency, department or
      instrumentality thereof.

     

    11.21 Pre-Tax
      Profits.
      The
      term Pre-Tax Profits shall mean, for the financial year in question, the audited
      consolidated profits or net income of the Buyer and its consolidated
      Subsidiaries (including the Company) before payment or accrual of any Taxes
      on
      such profits or net income; provided,
      however,
      that in
      calculating such Pre-Tax Profits, the following accounting principles shall
      be
      applicable:

     

    (a) the
      Buyer
      and its consolidated Subsidiaries (including the Company) shall be charged
      with
      an allocated percentage amount of the actual corporate overhead expenses of
      the
      Parent related to its executive officers and other administrative personnel,
      office, legal, accounting and other expenses associated with being a publicly
      traded company (such actual corporate overhead expenses estimated to be less
      than $1.0 million for the financial year ending December 31, 2009); which
      allocated percentage amount to be charged to the Buyer and its consolidated
      Subsidiaries shall be based upon the amount by which the consolidated selling,
      general and administrative expenses of the Buyer and its consolidated
      Subsidiaries (including the Company) for the financial year in question bears
      to
      the aggregate consolidated selling, general and administrative expenses the
      Parent and all of its consolidated Subsidiaries, including, without limitation,
      the Buyer and its consolidated Subsidiaries (including the Company) in such
      financial year; provided,
      however,
      that
      the allocated charge to be borne by the Buyer and its consolidated Subsidiaries
      (including the Company) in any financial year applicable to salaries and other
      compensation of executive officers of the Parent shall not exceed USD Two
      Hundred and Fifty Thousand Dollars (USD $250,000);

     

    
      
        
        

      

      
        67

        
          

        

      

      
        
        

      

    

     

    (b) to
      the
      extent that the Parent provides additional funds to the Buyer and its
      consolidated Subsidiaries (including the Company), in excess of the USD Three
      Million Dollars ($3,000,000) contemplated by this Agreement, such additional
      funds shall be treated as an intercompany loan by the Parent to Buyer and its
      consolidated Subsidiaries (including the Company), which intercompany loan
      shall
      bear interest (to be deducted as an expense in calculating Pre-Tax Profits
      in
      any financial year in question, at an annual rate equal to the greater of 8%
      per
      annum or the actual annual cost of any funds borrowed by the Parent that are
      provided by the Parent to the Buyer or its consolidated Subsidiaries (including
      the Company);

     

    (c) any
      royalty payments made directly to Krafcsik and Horvath (as contemplated by
      the
      Shareholders Agreement) shall not be included in revenues or as an expense
      of
      the Buyer or its consolidated Subsidiaries (including the Company).

     

    11.22 Product.
      The
      term “Product” shall mean each product, repair process or service under
      development, developed, manufactured, licensed, distributed or sold by the
      Party
      and any other products in which the Party has any proprietary rights or
      beneficial interest. 

     

    11.23 Properties.
      The
      term “Properties” shall mean any and all properties and assets (real, personal
      or mixed, tangible or intangible) owned or Used by the Party.

     

    11.24 Real
      Property.
      The
      term “Real Property” shall mean the real property Used by the Party in the
      conduct of its business.

     

    11.25 Regulations.
      The
      term “Regulations” shall mean any and all regulations promulgated by the
      Department of the Treasury pursuant to the Internal Revenue Code.

     

    11.26 Subsidiary.
      The
      term “Subsidiary” shall mean any Person of which a majority of the outstanding
      voting securities or other voting equity interests are owned, directly or
      indirectly, by the Company.

     

    11.27 Trade
      Secrets.
      The
      term “Trade Secrets” shall mean information of the Company including, but not
      limited to, technical or nontechnical data, formulas, patterns, compilations,
      programs, financial data, financial plans, product or service plans or lists
      of
      actual or potential customers or suppliers which (i) derives economic value,
      actual or potential, from not being generally known to, and not being readily
      ascertainable by proper means by, other persons who can obtain economic value
      from its disclosure or use, and (ii) is the subject of efforts that are
      reasonable under the circumstances to maintain its secrecy. 

     

    11.28 Used.
      The
      term “Used” shall mean, with respect to the Properties, Contracts or Permits of
      the Company, those owned, leased, licensed or otherwise held by the Company
      which were acquired for use or held for use by the Company in connection with
      the Company’s business and operations, whether or not reflected on the Company’s
      books of account.

     

    balance
      of this page intentionally left blank - signature page
      follows

     

    
      
        
        

      

      
        68

        
          

        

      

      
        
        

      

    

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

     

    PARENT:

     

    SOLAR
      THIN FILMS, INC.

    

     

    By:
      /s/
      Peter C. Lewis___________________

    Name:
      Peter C. Lewis, President

     

    BUYER:

     

    KRAFT
      ELEKTRONIKAI ZRT

    

    By:
      /s/ Peter C. Lewis___________________

    Name:
      Peter C. Lewis, President 

     

    COMPANY:

     

    BUDASOLAR
      TECHNOLOGIES CO. LTD.

    

    

    By:
       /s/
      Istvan Krafcsik_________________

      
      Istvan Krafcsik, President

     

    COMPANY
      STOCKHOLDERS:
      

     

    NEW
      PALACE INVESTMENTS LTD.

    

    

    By:
       /s/
      Istvan Krafcsik_________________

      
      Istvan Krafcsik, President

    

    

    /s/
      Istvan Krafcsik______________________

    ISTVAN
      KRAFCSIK

    

    

    /s/
      Attila Horvath ______________________

    ATTILA
      HORVATH

    

    
      
        
        

      

      
        69

        
          

        

      

      
        
        

      

    

    
      
        

      

    

    STOCK
      EXCHANGE AGREEMENT 

    
      
 

    Among

     

    SOLAR
      THIN FILMS, INC.

     

    BUDASOLAR
      TECHNOLOGIES CO. LTD.

     

    KRAFT
      ELEKTRONIKAI ZRT

     

    NEW
      PALACE INVESTMENTS LTD.

     

    ISTVAN
      KRAFCSIK

     

    and

     

    ATTILA
      HORVATH

     

    September
      29, 2008

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      

      TABLE
        OF CONTENTS

      

      
        	 	 	
                Page
                  No.

              
	 	 	 
	
                ARTICLE
                  I.

              	
                TRANSFER
                  OF SUBJECT COMPANY QUOTAS

              	
                1

              
	
                1.1

              	
                Transfer
                  of Subject Company Quotas

              	
                1

              
	 	 	 
	
                ARTICLE
                  II.

              	
                EXCHANGE
                  SHARES AND CAPITALIZATION OF BUYER

              	
                2

              
	
                2.1

              	
                Exchange
                  Shares

              	
                 2

              
	
                2.2

              	
                Capitalization
                  of Parent Loans, Repayment

              	
                 2

              
	
                2.3

              	
                Increase
                  of Share Capital of Buyer

              	
                 4

              
	
                2.4

              	
                Change
                  of name of Buyer

              	
                 4

              
	 	 	 
	
                ARTICLE
                  III.

              	
                CLOSING

              	
                 5

              
	
                3.1

              	
                Closing

              	
                 5

              
	
                3.2

              	
                Deliveries
                  by Company Stockholders

              	
                 5

              
	
                3.3

              	
                Deliveries
                  by Parent and Buyer

              	
                 5

              
	
                3.4

              	
                Termination
                  in Absence of Closing

              	
                 6

              
	 	 	 
	
                ARTICLE
                  IV.

              	
                REPRESENTATIONS
                  AND WARRANTIES OF THE COMPANY, THE COMPANY AND THE COMPANY
                  STOCKHOLDERS

              	
                 7

              
	
                4.1

              	
                Corporate
                  Existence and Qualification

              	
                 7

              
	
                4.2

              	
                Authority,
                  Approval and Enforceability

              	
                 7

              
	
                4.3

              	
                The
                  Subject Compaqny Shares and Corporate Records

              	
                 7

              
	
                4.4

              	
                No
                  Defaults or Consents

              	
                 8

              
	
                4.5

              	
                No
                  Company Defaults or Consents

              	
                 8

              
	
                4.6

              	
                No
                  Proceedings

              	
                 9

              
	
                4.7

              	
                Financial
                  Statements; Liabilities; Accounts Receivable; Inventories

              	
                 9

              
	
                4.8

              	
                Absence
                  of Certain Changes

              	
                 10

              
	
                4.9

              	
                Compliance
                  with Laws

              	
                 12

              
	
                4.10

              	
                Litigation

              	
                 12

              
	
                4.11

              	
                Real
                  Property

              	
                 13

              
	
                4.12

              	
                Commitments

              	
                 14

              
	
                4.13

              	
                Insurance

              	
                 15

              
	
                4.14

              	
                Intangible
                  Rights

              	
                 15

              
	
                4.15

              	
                Equipment
                  and Other Tangible Property

              	
                 16

              
	
                4.16

              	
                Permits;
                  Environmental Matters

              	
                 16

              
	
                4.17

              	
                Banks

              	
                 17

              
	
                4.18

              	
                Suppliers
                  and Customers

              	
                 17

              
	
                4.19

              	
                Absence
                  of Certain Business Practices

              	
                 18

              
	
                4.20

              	
                Products,
                  Services and Authorizations

              	
                 18

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      
        	
                4.21

              	
                Transactions
                  with Affiliates

              	
                 19

              
	
                4.22

              	
                Other
                  Information

              	
                 19

              
	 	 	
                 

              
	
                ARTICLE
                  V.

              	
                REPRESENTATIONS
                  AND WARRANTIES OF BUYER

              	
                 19

              
	
                5.1

              	
                Corporate
                  Existence and Qualification

              	
                 19

              
	
                5.2

              	
                Authority,
                  Approval and Enforceability

              	
                 19

              
	
                5.3

              	
                The
                  Buyer Shares and Corporate Records

              	
                 20

              
	
                5.4

              	
                No
                  Defaults or Consents

              	
                 20

              
	
                5.5

              	
                No
                  Buyer Defaults or Consents

              	
                 21

              
	
                5.6

              	
                No
                  Proceedings

              	
                 21

              
	
                5.7

              	
                Financial
                  Statements; Liabilities; Accounts Receivable; Inventories

              	
                 21

              
	
                5.8

              	
                Absence
                  of Certain Changes

              	
                 23

              
	
                5.9

              	
                Compliance
                  with Laws

              	
                 25

              
	
                5.10

              	
                Litigation

              	
                 25

              
	
                5.11

              	
                Real
                  Property

              	
                 25

              
	
                5.12

              	
                Commitments

              	
                 26

              
	
                5.13

              	
                Insurance

              	
                 27

              
	
                5.14

              	
                Intangible
                  Rights

              	
                 28

              
	
                5.15

              	
                Equipment
                  and Other Tangible Property

              	
                 28

              
	
                5.16

              	
                Permits;
                  Environmental Matters

              	
                 29

              
	
                5.17

              	
                Banks

              	
                 29

              
	
                5.18

              	
                Suppliers
                  and Customers

              	
                 30

              
	
                5.19

              	
                Absence
                  of Certain Business Practices

              	
                 30

              
	
                5.20

              	
                Products,
                  Services and Authorizations

              	
                 30

              
	
                5.21

              	
                Transactions
                  with Affiliates

              	
                 31

              
	
                5.22

              	
                Other
                  Information

              	
                 31

              
	 	 	 
	
                ARTICLE
                  VI.

              	
                COVENANTS
                  AND AGREEMENTS OF THE PARTIES

              	
                 31

              
	 	 	 
	
                A.)

              	
                With
                  regard to Company and Company Stockholder

              	
                 31

              
	
                6.1

              	
                Buyer’s
                  Access to Information and Properties

              	
                 31

              
	
                6.2

              	
                Company’s
                  Conduct of Business and Operations

              	
                 32

              
	
                6.3

              	
                General
                  Restrictions

              	
                 32

              
	
                6.4

              	
                Notice
                  Regarding Changes

              	
                 34

              
	
                6.5

              	
                Maintenance
                  of Insurance Policies

              	
                 34

              
	
                6.6

              	
                Casualty
                  Loss

              	
                 34

              
	
                6.7

              	
                Employee
                  Matters

              	
                 34

              
	
                6.8

              	
                No
                  Shop

              	
                 35

              
	
                6.9

              	
                Employment
                  Agreements

              	
                 35

              
	
                6.10

              	
                Legal
                  Opinions

              	
                 35

              
	
                6.11

              	
                Company
                  Backlog

              	
                 35

              
	 	 	 
	
                B.)

              	
                With
                  regard to Parent and Buyer

              	
                 35

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      
        	
                6.12

              	
                Buyer’s
                  Access to Information and Properties

              	
                 35

              
	
                6.13

              	
                Buyer’s
                  Conduct of Business and Operations

              	
                 36

              
	
                6.14

              	
                General
                  Restrictions

              	
                 36

              
	
                6.15

              	
                Notice
                  Regarding Changes

              	
                 38

              
	
                6.16

              	
                Maintenance
                  of Insurance Policies

              	
                 38

              
	
                6.17

              	
                Casualty
                  Loss

              	
                 38

              
	
                6.18

              	
                No
                  Shop

              	
                 38

              
	 	 	 
	
                C.)

              	
                With
                  regard to the Parties

              	
                 38

              
	
                6.19

              	
                Legal
                  Opinions

              	
                 38

              
	
                6.20

              	
                Ensure
                  Conditions Met

              	
                 38

              
	 	 	 
	
                ARTICLE
                  VII.

              	
                CONDITIONS
                  TO PARTIES’ OBLIGATIONS

              	
                 39

              
	
                7.1

              	
                Conditions
                  to Obligations of the Company and the Company Stockholders

              	
                 39

              
	
                7.2

              	
                Conditions
                  to Obligations of Parent and Buyer

              	
                 40

              
	 	 	 
	
                ARTICLE
                  VIII.

              	
                POST-CLOSING
                  OBLIGATIONS

              	
                 42

              
	
                8.1

              	
                Further
                  Assurances

              	
                 42

              
	
                8.2

              	
                Publicity

              	
                 42

              
	
                8.3

              	
                Post-Closing
                  Indemnity

              	
                 42

              
	
                8.4

              	
                Non-Competition,
                  Non-Solicitation and Non-Disclosure

              	
                 43

              
	
                8.5

              	
                Buy-Out
                  Right

              	
                 45

              
	
                8.6

              	
                Call
                  Option and Call Option Price

              	
                 48

              
	 	 	 
	
                ARTICLE
                  IX.

              	
                TAX
                  MATTERS

              	
                 50

              
	 	
                COMPANY
                  AND COMPANY STOCKHOLDERS

              	 
	
                9.1

              	
                Company
                  Stockholders' Representation and Obligations Regarding
                  Taxes

              	
                 50

              
	
                9.2

              	
                Buyer's
                  Indemnification for Taxes

              	
                 51

              
	
                9.3

              	
                Buyer's
                  Representation and Obligations Regarding Taxes

              	
                 53

              
	
                9.4

              	
                Company
                  Stockholders' Indemnification for Taxes

              	
                 54

              
	 	 	
                 

              
	
                ARTICLE
                  X.

              	
                MISCELLANEOUS

              	
                 57

              
	
                10.1

              	
                Indemnification
                  of Parent and/or Buyer

              	
                 57

              
	
                10.2

              	
                Indemnification
                  of Company Stockholders

              	
                 58

              
	
                10.3

              	
                Resolution
                  of Disputes

              	
                 59

              
	
                10.4

              	
                Confidentiality

              	
                 60

              
	
                10.5

              	
                Brokers

              	
                 60

              
	
                10.6

              	
                Costs
                  and Expenses

              	
                 61

              
	
                10.7

              	
                Notices

              	
                 61

              
	
                10.8

              	
                Governing
                  Law

              	
                 62

              
	
                10.9

              	
                Entire
                  Agreement; Amendments and Waivers

              	
                 63

              
	
                10.10

              	
                Binding
                  Effect and Assignment

              	
                 63

              
	
                10.11

              	
                Remedies

              	
                 63

              
	
                10.12

              	
                Exhibits
                  and Schedules

              	
                 63

              
	
                10.13

              	
                Multiple
                  Counterparts

              	
                 63

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      
        	
                10.14

              	
                References
                  and Construction

              	
                 63

              
	
                10.15

              	
                Survival

              	
                 64

              
	
                10.16

              	
                Attorneys’
                  Fees

              	
                 64

              
	
                10.17

              	
                Risk
                  of Loss

              	
                 64

              
	 	 	 
	
                ARTICLE
                  XI

              	
                DEFINITIONS

              	
                 64

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      LIST
        OF EXHIBITS

       

      
        	 	
                Krafcsik
                  Employment Agreement

              	
                A-1

              
	 	 	 
	
                -

              	
                Horvath
                  Employment Agreement

              	
                A-2

              
	 	 	 
	 	
                Shareholders
                  Agreement

              	
                B

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