Document:

remotemdx10q123108ex10-34.htm

    
      

      

    

    ASSET
PURCHASE AGREEMENT

    

    THIS
ASSET PURCHASE AGREEMENT (this "Agreement") is made this 14th day of January,
2009 by and between RemoteMDx, Inc., a Utah corporation having an office at 150
West Civic Center Drive, Suite 400, Sandy, Utah 84070 ("Parent"), SecureAlert
Enterprise Solutions, Inc., a Utah corporation having an office at 150 West
Civic Center Drive, Suite 400, Sandy, Utah 84070 (“Buyer”), Bishop Rock
Software, Inc., a California corporation having an office at 22222 Eucalyptus
Lane, Lake Forest, California 92630 ("Seller"), and Peter C. Sarna, II, Sol
Lizarbram, Steven Florek, Clydesdale Partners I, LLC, a Delaware limited
liability company, and Clydesdale Partners II, LLC, a Delaware limited liability
company (each a “Stockholder” and collectively “Stockholders”), with reference
to the following:

    

    A.         Seller
desires to sell and Buyer desires to purchase substantially all of the assets of
Seller used in the operation of Seller’s software subscription business (the
“Business”), on the terms and conditions hereinafter set forth.

    

    NOW,
THEREFORE, in consideration of the foregoing and the mutual representations,
warranties, covenants and agreements herein contained, and intending to be
legally bound hereby, the parties hereby agree as follows:

    

    1.         SALE OF ASSETS; ASSUMPTION
OF LIABILITIES

    

    1.1       Sale of
Assets.  (a)  Purchased
Assets.  At the Closing (as defined in Section 1.3 below),
Seller shall sell, assign, transfer, convey and deliver to Buyer, and Buyer
shall accept and purchase, all of Seller's right, title and interest in and to
all the tangible and intangible assets of Seller as of the Closing (the
“Purchased Assets”), insofar as they relate to, are used in or are necessary for
the operation of the Business as it is presently conducted and as reflected in
Seller’s balance sheet as of September 30, 2008 attached hereto as Exhibit A (the
"Balance Sheet") and/or the List of Purchased Assets attached hereto as Exhibit B, including,
without limitation, the Assumed Contracts (as defined in Section 2.1(f) below),
all furniture, fixtures and equipment, all work in process, inventory and stock
in trade, all computer hardware, peripherals and software, all service parts,
vehicles and machinery, all accounts receivable, goodwill, customer order
backlog, purchase orders, sales leads, customer lists and customer agreements,
all engineering files, specifications and drawings, technology, trademarks,
trade names, trade secrets, formulae, know-how, processes, patents, patent
licenses and techniques, all of Seller's operating permits, licenses
and  governmental authorizations necessary to conduct the Business as
presently conducted, all of Seller's prepaid expenses and deposits with respect
to the Purchased Assets (the "Prepaid Amounts"), and copies of all of Seller's
books and records that relate to the Purchased Assets.

    

    (b)        Excluded
Assets.  Notwithstanding the foregoing, Buyer shall not
purchase, and Seller shall not be deemed to sell, Seller’s cash or cash
equivalents (the “Excluded Assets”).

    

    1.2       Assumption of
Liabilities.  At the Closing, Buyer shall not assume, nor does
Buyer agree to pay, any debts, liabilities or obligations of Seller of any kind
whatsoever, except for Seller’s accounts payable as of the Closing Date as set
forth on Exhibit
C attached hereto in an amount not to exceed $80,798, that certain lease
for Dell computer equipment requiring monthly payments after the Closing of
approximately $200, and the liabilities arising from and after the Closing under
the Assumed Contracts (the “Included Liabilities”).  In particular,
and without limiting the generality of the foregoing, Buyer shall not assume,
and the Included Liabilities shall not include, any liability for any accounts
payable as of the Closing Date in excess of $80,798, any other liabilities
reflected on the Balance Sheet, any obligations to pay or contribute any sums to
any pension or retirement or similar plan, any compensation or severance or
other benefits of any kind due to employees of Seller through the Closing Date
(except as set forth on Exhibit C) or as the
result of the Closing, or any tax liabilities.  All of the foregoing,
and any other liabilities of Seller, known or unknown, that are not identified
herein as Included Liabilities, shall be the responsibility of Seller, and
Seller and Stockholders agree to indemnify and hold Buyer harmless against any
and all such liabilities, as provided in Section 5 below.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    1.3       Closing.  The
closing of the purchase and sale of the Purchased Assets (the "Closing") will
take place on January 14, 2009 (the "Closing Date") at the offices of Parent,
unless another date or place is agreed to in writing by the parties
hereto.

    

    (a)        Seller
Deliveries.  Seller shall deliver to Buyer at the Closing: (i)
a properly executed Bill of Sale in the form attached hereto as Exhibit D; (ii) such
other documents and instruments of conveyance of title, in form reasonably
acceptable to Buyer, sufficient to pass good and marketable title to the
Purchased Assets to Buyer, free and clear of all liens or encumbrances of any
type or nature other than the lien for personal property taxes not yet due and
payable; and (iii) consents executed by all necessary parties to permit Buyer to
assume the Licenses and Seller's interest in the Assumed Contracts.

     

    
      (b)       
Buyer Deliveries. Buyer shall
deliver the Parent Shares (as defined in Section 1.4
below) to Seller immediately upon Parent’s obtaining stockholder authorization
and regulatory approval to increase its authorized capital stock in an amount
necessary to issue the Parent Shares but in no event later than March 31,
2009.

      

      1.4      
The Purchase Price. The purchase price for the Purchased Assets (the "Purchase
Price") shall equal the sum of (a) 2,857,286 shares of Parent’s Common Stock
(the “Parent Shares”), plus (b) assumption of the Included Liabilities. All
property taxes and prepaid rent, license and registration fees with respect to
the Purchased Assets, insurance premiums and similar items, other than the
Prepaid Amounts, will be prorated as of the Closing. The Purchase Price shall be
paid as follows: the Included Liabilities shall be assumed at the Closing and
paid in accordance with the terms of the Assumed Contracts, and the Parent
Shares shall be issued and delivered by March 31, 2009 in accordance with
Section 1.3(b) above. None of the Parent Shares will be registered with the
Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933,
as amended (the Act”), or any state securities agency. Subject to Section 5.4
below, Seller will distribute the Parent Shares to Stockholders in accordance
with Section 368(a)(2)(G) of the Internal Revenue Code of 1986, as amended (the
“Code”).

    

    

    1.5       Tax
Treatment.  It is the intention of the parties that the
transactions contemplated herein shall constitute for tax purposes a tax
deferred "reorganization" within the meaning of Section 368(a)(1)(C) of the
Code.  The parties agree to take no position at any time which is
inconsistent with such intention, except as otherwise required by
law.  It is understood that none of the parties warrants to any of the
others that the intended treatment will be obtained.

    

    1.6       Further
Cooperation.  From time to time after the Closing, Seller and
Stockholders at Buyer's request and without further consideration, agree to
execute and deliver or to cause to be executed and delivered such other
instruments of transfer as Buyer may reasonably request to transfer to Buyer
more effectively the right, title and interest in or to the Purchased Assets and
to take or cause to be taken such further or other action as may reasonably be
necessary or appropriate in order to effectuate the transactions contemplated by
this Agreement.

    

    2.         REPRESENTATIONS AND
WARRANTIES

    

    2.1       Representations and
Warranties of Seller.  Seller and Stockholders represent and
warrant to, and agree with, Parent and Buyer as follows:

    

    
      
        
           

        

        
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      (a)        Organization.  Seller
is a corporation duly organized, validly existing and in good standing under the
laws of the State of California.

    

     

    (b)        Authority To Do
Business.  Seller has the requisite corporate power and
authority and is in possession of all licenses, permits, consents and approvals
necessary to own, lease and operate the Purchased Assets and to carry on the
Business as it is now being conducted.  Seller is duly qualified or
licensed to do business, and is in good standing, in each jurisdiction where the
failure to do so would be materially adverse to Seller or the
Business.

    

    (c)        Binding
Obligation.  Seller and each Stockholder have all requisite
corporate and other power and authority to enter into and perform its
obligations under this Agreement, and to carry out the transactions contemplated
hereby and thereby.  The Board of Directors of Seller has duly
authorized the execution and delivery of this Agreement and the transactions
contemplated hereby, and no other proceedings on the part of Seller or any
Stockholder are necessary to authorize this Agreement and the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Seller and Stockholders and constitutes a valid and binding obligation of Seller
and each Stockholder enforceable in accordance with its terms.  The
execution, delivery and performance by Seller and each Stockholder of this
Agreement do not and will not conflict with, or result in any violation of or
default under (i) any provision of the Articles of Incorporation or Bylaws of
Seller, (ii) any provision of any ordinance, rule, regulation, judgment, order,
decree, agreement, instrument or license applicable to Seller or any Stockholder
or to any of its properties or assets, or (iii) any contract, agreement or
instrument to which Seller or any Stockholder is a party.  No consent,
approval, order or authorization of, or registration, declaration or filing
with, any court, administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign, is required by or with
respect to Seller or any Stockholder in connection with its execution, delivery
or performance of this Agreement.

    

    (d)        Inventories.  All
inventories included in the Purchased Assets have been or will be valued at the
lower of cost or market in accordance with generally accepted accounting
principles consistently applied (“GAAP”), and consist of items of a quantity and
quality that are usable or salable in the ordinary course of the
Business.

    

    (e)        Title to
Property.  Except for the lien for personal property taxes not
yet due, Seller has good and marketable title to all of the Purchased Assets, in
each case free and clear of all mortgages, liens, security interests, pledges,
charges or encumbrances of any nature whatsoever.

    

    (f)    
    Contracts.  Except
for the contracts described on Schedule 2.1(f)
(collectively, the "Contracts"), Seller is not a party to or bound by any lease,
agreement, contract or other commitment which relates in any way to the Business
or the Purchased Assets.  Each Contract is a valid and binding
obligation of Seller and is in full force and effect.  Seller has
performed all material obligations required to be performed by it to date under
the Contracts, is not (with or without the lapse of time or the giving of
notice, or both) in breach or default in any material respect thereunder and is
not alleged to be in breach or default in any material respect
thereunder.  All Contracts are in the name of Seller, and all
Contracts that are to be assumed by Buyer as of the Closing as set forth under
the heading “Assumed Contracts” on Schedule 2.1(f) (the
“Assumed Contracts”) will be effectively transferred to and assumed by Buyer at
the time of the Closing.

    

    (g)        Litigation.  There
are no lawsuits, claims, proceedings or investigations pending or threatened by
or against or affecting Seller, Stockholder or any of their properties, assets,
operations or business that could in any way affect the transactions
contemplated by this Agreement or the value to Buyer of the Purchased Assets or
Buyer's right to utilize the Purchased Assets.

    

    
      
        
           

        

        
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      (h)        Licenses.  Schedule 2.1(h)
contains a true and correct listing of each license, permit or other
governmental authorization (collectively hereinafter referred to as the
"Licenses") held by Seller that in any way affects the Purchased
Assets.  The Licenses constitute all licenses, permits and other
governmental authorizations that are required for the conduct of the Business
and the operation of the Purchased Assets, and all such Licenses are in full
force and effect and will be effectively transferred to Buyer at the
Closing.

    

     

    (i)         Employee and Related
Matters.  There are no employment-related claims, actions,
proceedings or investigations pending or threatened against or relating to
Seller before any court, governmental, regulatory or administrative authority or
body, or arbitrator or arbitration panel.  Seller is not subject to
any outstanding order, writ, judgment, injunction, decision, award, compliance
order, consent decree, conciliation agreement, settlement agreement, affirmative
action plan, determination letter or advisory of any court, governmental,
regulatory or administrative authority or body, or arbitrator or arbitration
panel.  No collective bargaining agreement is binding on Seller.
Seller has not experienced any material work stoppage or other material labor
difficulty.

    

    (j)         Absence of Changes or
Events.  Since September 30, 2008, the Business has been
conducted in the ordinary course and there has not been any material adverse
change in the financial condition, results of operations, business or assets of
the Business or the value or condition of the Purchased
Assets.  Without limiting the generality of the foregoing, since
September 30, 2008 Seller has not, insofar as the Business or the Purchased
Assets are concerned, acquired or agreed to acquire any assets which are
material, individually or in the aggregate, to Seller, except in the ordinary
course of business consistent with prior practice; sold, leased or otherwise
disposed of any of its assets which are material, individually or in the
aggregate, to Seller, except in the ordinary course of business consistent with
prior practice; or sustained any material loss or damage to its properties,
whether or not insured.

    

    (k)        Compliance with
Laws.  Seller is not in violation with respect to its conduct
of the Business or its operation of the Purchased Assets of any law, order,
ordinance, rule or regulation of any governmental authority applicable to
Seller.

    

    (l)         No Broker's or Finder's
Fees.  No agent, broker, investment banker, person or firm
acting on behalf of Seller or any Stockholder is or will be entitled to any
broker's or finder's fee or any other commission or similar fee in connection
with any of the transactions contemplated hereby.

    

    (m)       Employee Benefit
Plans.  There are no plans of Seller in effect for pension,
profit sharing, deferred compensation, severance pay, pay for vacation, sick
time or other time off, bonuses, stock options, stock purchases, or any other
form of retirement or deferred benefit, or for any health, accident or other
welfare plan, as to which Buyer will become liable as a result of the
transactions contemplated hereby.

    

    (n)        Customers.  Schedule 2.1(n)
contains a true and correct list of Seller's largest twenty (20) customers in
the Business for 2008.  Seller has no information which would cause it
to believe that any such customer will not continue to do business with Buyer
after the Closing upon substantially the same terms and at such volumes as such
customer did business with Seller prior to the Closing.

    

    (o)       Condition of
Equipment.  The furniture, fixtures, vehicles, machinery, tools
and equipment included in the Purchased Assets are being sold AS
IS.

    

    (p)        Trademarks and Other
Intellectual Property.  Except as set forth in Schedule 2.1(p),
there are no patents, trademarks, service marks, trade names, copyrights, or
applications therefor or registrations thereof ("Intellectual Property"), which
have been used or owned within the last three years by Seller with respect to
the Business.  Schedule 2.1(p)
contains a true and complete description of the rights of Seller with respect to
each of such items of Intellectual Property.  Except as set forth in
Schedule
2.1(p), Seller has sole, full and clear title to all of such items of
Intellectual Property, without any liens, encumbrances or restrictions
whatsoever, and upon closing of the transactions contemplated hereby, Buyer will
possess sole, full and clear title to all of such items of Intellectual
Property, without any liens, encumbrances or restrictions
whatsoever.  To the best of its knowledge, Seller is not and, during
the last two years, has not, with respect to the Business or the Purchased
Assets (i) infringed or violated any trademark, service mark, trade name, patent
or copyright or other Intellectual Property right; or (ii) unlawfully or
improperly used any trade secrets belonging to any third party.

    

    
      
        
           

        

        
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    (q)        Software and Information
Systems.  For purposes of this Section 2.1(q), the term
“Software” means all computer software programs, program specifications, charts,
procedures, source codes (including annotations), object codes, input data,
diagnostic and other routines, data bases and report layouts and formats, record
file layouts, diagrams, functional specifications and narrative descriptions and
flow charts owned or used by Seller or employed in the Business.  For
the purposes of this Section 2.1(q), the term “computer software programs”
includes any set of arithmetic and/or logical instructions meant to run on, or
to control the operation of any computer (i) whether those instructions are a
complete program, a collection of programs making up a subsystem or system, or
are merely subroutines or meant to operate in conjunction with other software,
and (ii) whether such instructions must be run throughout another computer
program before being useable on a computer, whether such instructions can be
used at execution time only in conjunction with another computer program (i.e.,
an “interpreter”) or whether such instructions are in a form that can be run on
a computer “as is”, except for any necessary interfaces with the computer’s
microcode, operating system or reference-resolving routines.

    

    Schedule 2.1(q) sets
forth an accurate, correct and complete list and summary description of all
Software and identifies specifically (A) Software as to which the source code is
owned by Seller (“Owned Software”); (B) software which is licensed to Seller by
third parties and as to which Seller is in possession of the source code; (C)
Software which is licensed to Seller by third parties but as to which Seller
does not have possession of the source code; (D) Software purchased by or
licensed to Seller solely for resale or sublicense to its customers or which a
third party licenses or sells directly to such customers; (E) Software in which
Seller has any use, possessory or proprietary rights other than as set forth in
(A) through (D) above (Software described in the foregoing subsections (B)
through (E) being referred to collectively as the “Third Party Software”); (F)
any other Software employed in the Business which is not Owned Software or Third
Party Software, other than so called “shrink wrap” Software which in any event
is not a component of the Software license or sold to Seller’s customers; (G) in
each case whether the particular component of Software is employed in the
Software licensed or sold by Seller to its customers; and (H) all Software
development projects undertaken within the past two years with persons other
than employees, together with an identification of the persons undertaking such
projects.  Schedule 2.1(q) also
identifies all licenses, contracts and other arrangements with respect to the
Third Party Software (collectively the “Third Party Licenses”).

    

    (r)         Environmental
Matters.  (i) There have been no private or governmental
claims, citations, complaints, notices of violation or letters made, issued to
or threatened against Seller by any governmental entity or private or other
party for the impairment or diminution of, or damage, injury or other adverse
effects to, the environment or public health resulting, in whole or in part,
from the ownership, use or operation of the Business.

    

    (ii)        Seller
has duly complied with, and the Property is in compliance with, the provisions
of all material federal, state and local environmental, health and safety laws,
codes and ordinances and all rules and regulations promulgated thereunder
applicable to Seller.  Seller agrees to provide Buyer with the most
recent Fire Marshal’s report and to identify the licensed hazardous waste hauler
used to dispose of any hazardous materials.

     

    
      
        
           

        

        
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    (iii)        Seller
has been issued all required federal, state and local permits, licenses,
certificates and approvals with respect to the Property relating to (A) air
emissions, (B) discharges to surface water or groundwater, (C) noise
emissions, (D) solid or liquid waste disposal, (E) the use,
generation, storage, transportation or disposal of hazardous materials or
hazardous wastes, or (F) other environmental, health or safety
matters.

    

    (iv)        Seller
has not received any notice of, and neither knows of nor suspects, any fact(s)
which might constitute violation(s) of any federal, state or local
environmental, health or safety laws, codes or ordinances, and any rules or
regulations promulgated thereunder, which relate to the use, ownership or
occupancy of the Property, and Seller is not in violation of any covenants,
conditions, easements, rights of way or restrictions affecting the Property or
any rights appurtenant thereto.

    

    (v)        Seller
has provided Buyer with true, accurate and complete copies of any written
information in the possession of Seller that pertains to the environmental
history of the Property. Seller shall also promptly furnish to Buyer true,
accurate and complete copies of any sampling and test results which may be
obtained by Seller prior to the Closing from all environmental and/or health
samples and tests taken at and around the Property.

    

    (s)        Financial
Information.  Attached as Schedule 2.1(s) are
the Balance Sheet and Seller’s balance sheets as of December 31, 2006 and 2007
and September 30, 2008, and income statements for the periods then ended
(collectively, the “Financial Statements”).  The Financial Statements
have been prepared in accordance with GAAP, present fairly the financial
condition of Seller as of the respective dates thereof and the performance of
Seller for the respective periods therein, are correct and complete, and are
consistent with the books and records of Seller (which books and records are
correct and complete).

    

    (t)       
 Absence of
Undisclosed Liabilities.  Neither Seller nor any Stockholder
has any liabilities or obligations in connection with the Business or the
Purchased Assets, either direct or indirect, matured or unmatured, or absolute,
contingent or otherwise, except: (i) those liabilities or obligations set
forth in the Balance Sheet, and (ii) liabilities and obligations of a
similar nature arising in the ordinary course of the Business since the date of
the Balance Sheet.  For purposes of this Agreement, the term
"liabilities" shall include, without limitation, any direct or indirect
indebtedness, guaranty, endorsement, claim, loss, damage, deficiency, cost,
expense, obligation or responsibility, fixed or unfixed, known or unknown,
asserted or unasserted, liquidated or unliquidated, secured or
unsecured.

    

    (u)        Taxes.  There
are no taxes on or measured by income or gross receipts or franchise, real and
personal property, employment, excise, sales and use or other taxes of any kind
properly attributable to periods up to and including the Closing for which Buyer
could be held liable which have not been or will not (prior to the Closing) be
paid by Seller.  Seller will pay all said taxes attributable to
periods up to and including the Closing whenever assessed and Seller and each
Stockholder will indemnify Buyer for any costs, expenses, fees or charges
whatsoever incurred by Buyer in connection therewith, all as more fully provided
in Section 5 below.

    

    (v)        Insurance.  Schedule 2.1(v)
contains an accurate and complete description of all policies of fire,
liability, worker's compensation and other forms of insurance owned or held by
Seller in connection with the Business or the Purchased Assets.  All
such policies are in full force and effect; are sufficient for compliance with
all requirements of law and of all agreements to which Seller is a party; are
valid, outstanding and enforceable policies; provide full insurance coverage for
the assets and operations of Seller; will remain in full force and effect
through the respective dates set forth in Schedule 2.1(v); and
will not in any way be affected by, or terminate or lapse by reason of, the
transactions contemplated by this Agreement.

    

    
      
        
           

        

        
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    2.2       Representations and
Warranties of Buyer.  Buyer represents and warrants to, and
agrees with, Seller and Stockholders as follows:

    

    (a)        Organization.  Buyer
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Utah.

    

    (b)        Authority To Do
Business.  Buyer has all requisite power and authority to own
or lease and operate its properties and to carry on its business as now
conducted.

    

    (c)        Binding
Obligation.  Buyer has all requisite corporate and other power
and authority to enter into and perform its obligations under this
Agreement.  All corporate acts and other proceedings required to be
taken by Buyer to authorize the execution, delivery and performance by Buyer of
this Agreement, and the transactions contemplated hereby, have been duly and
properly taken.  This Agreement has been duly executed and delivered
by Buyer and constitutes the legal, valid and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms.  The
execution, delivery and performance by Buyer of this Agreement do not and will
not conflict with, or result in any violation of or default under any provision
of the Articles of Incorporation or Bylaws of Buyer, any provision of any law,
ordinance, rule, regulation, judgment, order, decree, agreement, instrument or
license applicable to Buyer or to its property or assets, or any contract,
agreement or instrument to which Buyer is a party.  No consent,
approval, order or authorization of, or registration, declaration or filing
with, any court, administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign, is required by or with
respect to Buyer in connection with its execution, delivery or performance of
this Agreement.

    

    (d)        Litigation.  There
are no lawsuits, claims, proceedings or investigations pending or, to the best
knowledge of Buyer, threatened by or against or affecting Buyer or any of its
properties, assets, operations or business which could in any way affect the
transactions contemplated by this Agreement.

    

    (e)        Compliance with
Laws.  Buyer is not in violation with respect to the conduct of
its business of any law, order, ordinance, rule or regulation of any
governmental authority applicable to Buyer.

    

    (f)         No Broker's or Finder's
Fees.  No agent, broker, investment banker, person or firm
acting on behalf of Buyer is or will be entitled to any broker's or finder's fee
or any other commission or similar fee in connection with any of the
transactions contemplated hereby.

    

    2.3       Representations and
Warranties of Parent.  Parent represents and warrants to, and
agrees with, Seller and Stockholders as follows:

    

    (a)        Organization.  Parent
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Utah.

    

    (b)        Authority To Do
Business.  Parent has all requisite power and authority to own
or lease and operate its properties and to carry on its business as now
conducted.

    

    
      
        
           

        

        
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      (c)        Binding
Obligation.  Parent has all requisite corporate and other power
and authority to enter into and perform its obligations under this
Agreement.  All corporate acts and other proceedings required to be
taken by Parent to authorize the execution, delivery and performance by Parent
of this Agreement, and the transactions contemplated hereby, have been duly and
properly taken.  This Agreement has been duly executed and delivered
by Parent and constitutes the legal, valid and binding obligation of Parent,
enforceable against Parent in accordance with its terms.  The
execution, delivery and performance by Parent of this Agreement do not and will
not conflict with, or result in any violation of or default under any provision
of the Articles of Incorporation or Bylaws of Parent, any provision of any law,
ordinance, rule, regulation, judgment, order, decree, agreement, instrument or
license applicable to Parent or to its property or assets, or any contract,
agreement or instrument to which Parent is a party.  No consent,
approval, order or authorization of, or registration, declaration or filing
with, any court, administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign, is required by or with
respect to Parent in connection with its execution, delivery or performance of
this Agreement.

       

    

    (d)        Litigation.  There
are no lawsuits, claims, proceedings or investigations pending or, to the best
knowledge of Parent, threatened by or against or affecting Parent or any of its
properties, assets, operations or business which could in any way affect the
transactions contemplated by this Agreement.

    

    (e)        Compliance with
Laws.  Parent is not in violation with respect to the conduct
of its business of any law, order, ordinance, rule or regulation of any
governmental authority applicable to Parent.

    

    (f)       
 No Broker's or
Finder's Fees.  No agent, broker, investment banker, person or
firm acting on behalf of Parent is or will be entitled to any broker's or
finder's fee or any other commission or similar fee in connection with any of
the transactions contemplated hereby.

    

    3.         COVENANTS

    

    3.1       Ordinary
Course.  Seller hereby agrees that, pending the Closing Date,
and except as otherwise consented to or approved by Buyer in writing, Seller
shall carry on the Business in the ordinary course in substantially the same
manner as heretofore conducted and, to the extent consistent with such Business,
use all reasonable efforts consistent with past practice and policies to
preserve intact the present organization of the Business, keep available the
services of the present officers and key employees of the Business, and preserve
the relationships with customers, suppliers and others having business dealings
with the Business to the end that the goodwill and ongoing business of the
Business shall be materially unimpaired as a result of the transactions
contemplated hereby.

    

    3.2       Access to
Information.  Seller shall provide Buyer and Buyer’s attorneys,
accountants and other representatives access at all reasonable times during
business hours upon reasonable notice to all facilities, corporate, financial,
tax and business records, contracts and other related business information of
Seller, including financial statements, which may be necessary or appropriate to
permit Buyer and its representatives to conduct a due diligence review of
Seller, the Business and the Purchased Assets.  Any investigation
shall be conducted by Buyer in a manner so as not to interfere unreasonably with
the business or operations of Seller.  Buyer and its agents, attorneys
and accountants shall hold, and cause its officers and representatives to hold,
all documents and information furnished to it by Seller, including all notes and
analyses thereof made by Buyer and its representatives (the "Evaluation
Materials"), in confidence, unless disclosure is compelled by judicial or
administrative process, in which case Buyer shall promptly notify Seller in
order that Seller may seek a protective order or similar relief; provided,
however, that information Buyer demonstrates was in the public domain or
otherwise independently known by it or its representatives without breach of
Seller's rights of confidentiality on the date hereof shall not be subject to
this covenant.  If the transactions contemplated hereby are not
consummated, Buyer shall promptly return to Seller any and all Evaluation
Materials and shall destroy all copies thereof made by Buyer or any of its
representatives.

     

    
      
        
           

        

        
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      3.3      
Legal Conditions. Each party
will take all reasonable actions necessary to comply promptly with all legal
requirements that may be imposed on such party with respect to the transactions
contemplated hereby and will promptly cooperate with and furnish information to
the other parties in connection with any such requirements imposed upon Buyer in
connection with the transactions contemplated hereby. Each party will take all
reasonable actions to obtain (and to cooperate with the other parties in
obtaining) any consent, authorization, order or approval of, or any exemption
by, any governmental agency, commission, board, authority, court or other entity
(a "Governmental Entity"), or other third party, required to be obtained or made
by such party in connection with the transactions contemplated hereby or the
taking of any action contemplated thereby or by this
Agreement.

    

     

    3.4       Taxes and
Expenses.  All applicable taxes with respect to the
transactions contemplated hereby shall be borne by the party upon which such
taxes are incident.  Whether or not the transactions contemplated
hereby are consummated, each party shall bear all legal, accounting and other
costs, fees and expenses incurred by such party in connection with such
transactions and this Agreement.

    

    3.5       Cooperation.  Subject
to the terms and conditions of this Agreement, each of the parties hereto agrees
to use all reasonable efforts to take, or cause to be taken, all reasonable
actions and to do, or cause to be done, all things reasonably necessary, proper
or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement.

    

    3.6        Non-Competition.  For
a period of five (5) years after the Closing, neither Seller nor any Stockholder
shall, directly or indirectly, carry on or participate or engage in any business
that is competitive with or similar to the Business as conducted by Seller as of
the Closing anywhere in the world where Seller conducts the Business; provided,
however, that this Section shall not prevent (a) Mr. Florek from fulfilling the
terms of his Employment Agreement (as defined in Section 4.3(c) below), (b)
Seller or any Stockholder from owning up to two percent (2%) of the total shares
of all classes of stock outstanding of any corporation the stock of which is
publicly traded, or (c) Clydesdale Partners I, LLC or Clydesdale Partners II,
LLC from investing in any business of any type.  It is the desire and
intent of the parties that this Section 3.6 shall be enforced to the fullest
extent permissible under applicable law.  If any particular provision
or portion of such Section shall be adjudicated to be invalid or unenforceable,
the court having jurisdiction shall be entitled to amend such Section to delete
therefrom such invalid or unenforceable provision or portion and to enforce the
balance of said Section.  If there is a breach or threatened breach of
such Section, Buyer shall be entitled to an injunction restraining the party
breaching or threatening breach, as the case may be, from such breach, without
the posting of any bond or other security, provided that nothing herein shall be
construed as prohibiting Buyer from pursuing any other remedies for such breach
or threatened breach.  The undertakings and covenants of Seller and
each Stockholder contained in this Section 3.6 are an integral part of the
transactions contemplated by this Agreement and the consideration paid by Buyer
pursuant to this Agreement shall be consideration not only for such transactions
but also for such undertakings and covenants.

    

    3.7     
  Labor and
Employment Matters.  At or prior to Closing, Seller shall give
appropriate and sufficient notification, as may be required by both law and
contract, to all of its employees of the transactions contemplated hereby and of
the termination of their employment.  Seller shall make no promises,
representations or guarantees to its employees about the possibility of their
being hired or employed by Buyer or Buyer's agents or subcontractors, except as
set forth below in this Section 3.7.  At Closing, Buyer will offer to
hire those of Seller’s employees selected by Buyer on the terms and conditions
agreeable to Buyer and the relevant employees.  Buyer shall not assume
any employment contracts or any obligations arising out of any employment
contracts, express or implied, oral or written, individual or collective,
between Seller and any of Seller's employees.  Nor shall Buyer assume
any obligations arising out of any pension benefit, employee welfare benefit,
bonus, deferred compensation, severance pay, pay for vacation, sick time or
other time off, stock purchase, stock option, severance, fringe benefit, medical
insurance, life insurance or similar plan, policy or program of Seller, whether
or not covered or excluded from coverage under the Employee Retirement Income
Security Act of 1974, as amended (ERISA).  Seller shall be solely
responsible for complying with all of its obligations, if any, to its employees,
including the payment of accrued wages, vacation pay, severance and other
benefits and compliance with the provisions of ERISA, the Multi-Employer Pension
Plan Amendments Act of 1980 (MPPAA), the Consolidated Omnibus Budget
Reconciliation Act (COBRA), and the Worker Adjustment and Retraining
Notification Act (WARN).

    

    
      
        
           

        

        
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    3.8       Use of Names, Trade Names
and Trademarks.  As of the Closing, Seller shall discontinue
all use of the “Bishop Rock Software” and related names, and shall change its
corporate name to one that is not similar to “Bishop Rock
Software.”

    

    3.9       No
Transactions.  Neither Seller nor any of its principals,
agents, affiliates or representatives (including any Stockholder), shall
advertise, seek, solicit, discuss, entertain, approve or undertake, directly or
indirectly, with any party other than Buyer any proposals for the transfer or
sale of the Business or the Purchased Assets, or any other transaction which is
inconsistent with the transactions contemplated hereby.

    

    3.10     Confidentiality; Press
Releases.  Each of the parties shall maintain the
confidentiality of the existence and terms of this Agreement, and no party shall
issue a press release or other publicity announcing the sale of the Purchased
Assets or any other aspect of the transactions contemplated hereby, prior to the
Closing without the prior written approval of the other party or parties, unless
such disclosure is required by applicable law, to such party’s attorneys and
other advisors, and except as provided in Section 3.7 above.

    

    3.11     Access to
Information.  From and after the Closing, each of Seller and
Buyer shall allow the other reasonable access on advance notice to the tax,
accounting and other records relating to its conduct of the Business and its
operation of the Purchased Assets for use in connection with tax audits and the
like.

     

    
      3.12     Operation of Buyer. From and after the
Closing, and for a reasonable period in Parent’s discretion, Parent will
capitalize Buyer with $15,000 in cash per month to fund the operations of Buyer
under the direction of Mr. Florek in accordance with the terms of his Employment
Agreement (as defined in Section 4.3(c)
below).

       

    

    4.         CONDITIONS PRECEDENT AND
SUBSEQUENT

    

    4.1       Conditions to Each Party's
Obligations.  The respective obligations of each party
hereunder shall be subject to the satisfaction prior to the Closing Date of the
following conditions:

    

    (a)        Approvals.  All
authorizations, consents, orders or approvals of, or declarations or filings
with, or expiration of waiting periods imposed by, any Governmental Entity, and
all consents of any third parties necessary for the consummation of the
transactions contemplated by this Agreement, shall have been filed, occurred or
been obtained.

    

    (b)        Legal
Action.  No action, suit or proceeding shall have been
instituted or threatened before any court or governmental body seeking to
challenge or restrain the transactions contemplated hereby.

    

    (c)        Statutes.  No
statute, rule or regulation shall have been enacted by the government of the
United States or any state or agency thereof which would make the consummation
of the transactions contemplated hereby illegal.

    

    
      
        
           

        

        
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    4.2       Additional Conditions to
Parent and Buyer's Obligations.  The obligations of Parent and
Buyer to effect the transactions contemplated hereby are also subject to the
satisfaction of the following conditions:

    

    (a)        Representations and
Warranties.  The representations and warranties of Seller and
each Stockholder set forth in this Agreement shall be true and correct in all
material respects as of the date of this Agreement and as of the Closing Date as
though made on and as of the Closing Date, and Buyer shall have received a
certificate signed by the President of Seller and by each Stockholder to such
effect.

    

    (b)        Agreements and
Covenants.  Seller and each Stockholder shall have performed or
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by them on or prior to the
Closing Date, and Buyer shall have received a certificate signed by the
President of Seller and by each Stockholder to such effect.

    

    (c)        Key
Employees.  All such employees of Seller as Buyer shall
consider key employees of the Business shall have agreed to become employees of
Buyer on the Closing Date on terms satisfactory to Buyer and such
employees.

    

    (d)        Due
Diligence.  Buyer shall be satisfied with the results of its
due diligence conducted pursuant to Section 3.2 above.

    

    (e)        No Material Adverse
Change.  Since September 30, 2008, there shall have been no
material adverse change in the financial condition, results of operations,
business, assets or prospects of Seller insofar as they relate to the Business
or the Purchased Assets.

    

    4.3        Additional Conditions to
Obligations of Seller and Stockholders.  The obligations of
Seller and each Stockholder to effect the transactions contemplated hereby are
also subject to the satisfaction of the following conditions:

    

    (a)        Representations and
Warranties.  The representations and warranties of Buyer and
Parent set forth in this Agreement shall be true and correct in all material
respects as of the date of this Agreement and as of the Closing Date as though
made on and as of the Closing Date, and Seller shall have received a certificate
signed by the President of Buyer and the President of Parent to such
effect.

    

    (b)        Agreements and
Covenants.  Buyer and Parent shall each have performed or
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it on or prior to the Closing
Date, and Seller shall have received a certificate signed by the President of
Buyer and the President of Parent to such effect.

    

      (c)       
Key Employee. Buyer shall have
entered into an employment agreement with Steven Florek in the form of Exhibit E
attached hereto (the “Employment Agreement”). Parent shall have granted Mr.
Florek a fully-vested stock option under Parent’s employee stock option plan to
purchase up to 642,714 shares of Parent’s Common Stock at an aggregate exercise
price of $60,000 and having a twoyear term in substitution of Mr. Florek’s
existing option to purchase 2,000,000 shares of Seller’s Common Stock. Such
option shall constitute an incentive stock option under Section 422 of the Code
and is referred to hereinafter as the “Option.”

       

    

    
      
        
           

        

        
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      4.4      
Condition Subsequent.
Notwithstanding any provision herein to the contrary, in the event that Parent
shall not have issued and delivered the Parent Shares to Seller by March 31,
2009, Seller shall have the right to terminate and rescind this Agreement and
all of the actions contemplated or taken hereunder by written notice to Parent
given by April 15, 2009, in which case neither this Agreement nor any of such
actions shall have any legal effect.

      
 

    

    5.         INDEMNIFICATION

    

    5.1       Indemnification by Seller
and Stockholders.  Except as hereinafter set forth, Seller and
each Stockholder shall indemnify and hold harmless on an after-tax basis Buyer
and Parent and each of its successors, assigns, officers, directors,
shareholders, employees and agents, against, and in respect of, any and all
damages, claims, losses, liabilities and expenses, including, without
limitation, reasonable legal, accounting and other expenses, which may arise out
of: (a) any breach or violation of this Agreement by Seller or any
Stockholder; (b) any breach of any of the representations, warranties or
covenants made in this Agreement by Seller or any Stockholder; or
(c) Seller's conduct of the Business or use or operation of the Purchased
Assets prior to the Closing; provided however, that Seller and Stockholders
shall be liable for indemnification hereunder only when, and only with respect
to amounts by which, the aggregate of all claims exceeds $20,000 (other than
liabilities that are not Included Liabilities, which are not subject to this
threshold), and shall not be liable for an aggregate amount of all claims in
excess of the Parent Shares and the Option (valued at the per share closing
price of Parent’s Common Stock on the Closing Date).  The amount of
any claim subject to Indemnification under this Section 5.1 may be referred to
as a “Seller Indemnification Amount.”  Subject to Section 5.3(c)
below, (A) Indemnification under this Section 5.1 shall be (i) joint and several
as between Seller and all Stockholders, but (ii) strictly several, and not
joint, as between Stockholders based on Stockholders’ respective numbers of
shares and options in Seller’s capital stock immediately prior to Closing, and
(B) all Seller Indemnification Amounts shall be recovered exclusively from the
Parent Shares and the Option in accordance with Section 5.4 below.

    

    5.2       Indemnification by Buyer and
Parent.  Except as hereinafter set forth, Buyer and Parent
shall jointly and severally indemnify and hold harmless on an after-tax basis
Seller and each Stockholder, and each if their respective successors, assigns,
officers, directors, shareholders, employees and agents, against, and in respect
of, any and all damages, claims, losses, liabilities and expenses, including,
without limitation, reasonable legal, accounting and other expenses, which may
arise out of: (a) any breach or violation of this Agreement by Buyer or
Parent; (b) any breach of any of the representations, warranties or
covenants made in this Agreement by Buyer or Parent; or (c) Buyer or
Parent's use or operation of the Purchased Assets after the Closing (including
the Included Liabilities); provided however, that Buyer shall be liable for
indemnification hereunder only when, and only with respect to amounts by which,
the aggregate of all claims exceeds $20,000 (other than payment of the Purchase
Price, including assumption of the Included Liabilities, which are not subject
to this threshold), and shall not be liable for an aggregate amount of such
claims in excess of the Parent Shares and the Option (valued at the per share
closing price of Parent’s Common Stock on the Closing Date).

    

    5.3       Procedure.  (a)  In
the event that at any time or from time to time after the Closing, any  person or
persons entitled to indemnification under Section 5.1 or 5.2 above
(collectively, the "Indemnitee") shall sustain a loss which constitutes a claim
subject to indemnification under either of such Sections (a "Claim"), such
Indemnitee shall notify the party required to provide indemnity (the
"Indemnitor") of such loss so sustained, and the Indemnitor shall within ten
(10) days after transmittal of such notice pay to such Indemnitee the amount of
such loss so sustained, subject to the Indemnitor's right to contest any Claim
which has not yet resulted in a loss, as hereinafter provided.  Each
Indemnitee shall promptly notify the Indemnitor of the existence of any claim,
demand, or other matter constituting a Claim involving liabilities to third
parties (but the omission to so notify the Indemnitor shall not relieve the
Indemnitor from any liability except to the extent that the Indemnitor shall
have been prejudiced as a result of the failure or delay), and
shall give the Indemnitor a reasonable opportunity to defend the same or
prosecute such action to conclusion or settlement satisfactory to the Indemnitor
at its own expense; provided that the Indemnitee shall at all times also have
the right to fully participate in the defense at its own expense.  If
legal proceedings shall have been commenced or a tax assessment made against the
Indemnitee on a Claim and the Indemnitor shall, within a reasonable time after
said notice, fail to defend, the Indemnitee shall have the right, but not the
obligation, to undertake the defense of, and to compromise or settle (exercising
reasonable business judgment) the Claim or other matter on behalf, for the
account, and at the risk and expense, of the Indemnitor.  Except as
provided in the preceding sentence, the Indemnitee shall not compromise or
settle the claim or other matter without the prior written consent of the
Indemnitor. If the claim is one that cannot by its nature be defended solely by
the Indemnitor, the Indemnitee shall make available all information and
assistance that the Indemnitor may reasonably request; provided that any
associated expenses shall be paid by the Indemnitor.

    

    
      
        
           

        

        
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    (b)        If
the Indemnitor shall contest or challenge any Claim asserted against an
Indemnitee referred to in this Section 5, the Indemnitor shall do so at its own
cost and expense, holding the Indemnitee harmless from all costs, fees,
expenses, debts, liabilities and charges in connection with such contest; shall
diligently defend against any such claim; and shall hold Indemnitee's business
and assets free and harmless from any attachment, execution, judgment, lien or
other legal process.

    

    (c)        The
provisions of this Section 5 shall be exclusive of any other rights or remedies
at law or in equity that may accrue to an Indemnitee, except in the event of
fraud.  In the event of any Seller Indemnification Amount resulting
from fraud by Seller or any Stockholder, those Stockholders that committed the
fraud or who had actual knowledge of the fraud prior to Closing shall be jointly
and severally liable for such Seller Indemnification Amount without regard to
Section 5.4 below.

    

    5.4       Recovery.  (a)
The Parent Shares will be held by Seller for six (6) months after the Closing
Date (and Seller will not liquidate until such period has expired) to be
surrendered to Parent (valued at the per share closing price of Parent’s Common
Stock on the Closing Date) in satisfaction of any Seller Indemnification Amount
due within six (6) months following the Closing Date.  For six (6)
months after the Closing Date, Parent shall be entitled to cancel the Option or,
to the extent Mr. Florek shall have exercised the Option, recover the Parent
shares so issued (valued in either case at the per share closing price of
Parent’s Common Stock on the Closing Date) in satisfaction of any Seller
Indemnification Amount due within six (6) months following the Closing
Date.  Notwithstanding any other provision in this Agreement other
than Section 5.3(c) above, any Seller Indemnification Amount shall be satisfied
by means of the simultaneous surrender of Parent Shares and cancellation of the
Option (and/or recovery of Parent shares issued upon exercise of the Option) on
a pro rata basis based on the number of Parent Shares issued at the Closing and
the number of shares initially subject to the Option.  If there is a
dispute regarding any Seller Indemnification Amount alleged to be due or if the
dispute out of which such Amount arises (the “Indemnified Dispute”) has not been
resolved, in no event shall any Parent Shares be surrendered to Parent (nor
shall the Option be cancelled or any shares issued on exercise thereof be
recovered) in settlement of such disputed Parent Indemnification Amount unless
and until such dispute is settled by written agreement of Seller and Parent or
final court judgment not subject to appeal.

    

    (b) 
      If there is no dispute pending regarding a
claimed Seller Indemnification Amount and the Indemnified Dispute has been
resolved and satisfied as of the day that is six (6) months after the Closing
Date (the “Deadline”), any remaining Parent Shares may be distributed thereafter
by Seller to Stockholders.  If there is a dispute pending regarding a
claimed Seller Indemnification Amount or the Indemnified Dispute has not been
resolved and satisfied by Seller prior to the Deadline, an amount of Parent
Shares (valued at the per share closing price of Parent’s Common Stock on the
Closing Date) and a portion of the Option (or a portion of the Parent shares
issued on exercise of the Option) sufficient to satisfy such claimed Seller
Indemnification Amount ("Special Holdback") shall continue to be held by Seller
subject to surrender to Parent or shall continue to be subject to cancellation
(or recovery) by Parent for such claimed Seller Indemnification Amount incurred
with respect to the Indemnified Dispute, until such time as such Indemnified
Dispute has been settled by written agreement of the parties thereto or final
court judgment not subject to appeal, but any additional Parent Shares which do
not relate to the disputed Seller Indemnification Amount may be distributed by
Seller to Stockholders and any portion of the Option (or of the Parent shares
issued on exercise of the Option) shall cease being subject to cancellation (or
recovery) on the date of the Deadline.  Parent shall permit Seller, in
the event of a Special Holdback, to sell the Parent Shares into the market and
the proceeds of such sale shall continue to be held under this Agreement as if
such proceeds were "Parent Shares," except that such proceeds shall be
segregated and deposited in a separate account of Seller appropriately
identified over which Seller shall retain control pursuant to the terms of this
Agreement.

    

    
      
        
           

        

        
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    (c)        The
Parent Shares shall, until surrendered to Parent or distributed by Seller to
Stockholders pursuant to the terms hereof, remain registered in the name of
Seller, and Seller shall be entitled to vote the same and Parent will take all
reasonable steps to allow and facilitate the exercise of such
rights.  Except for tax-free dividends paid in stock declared with
respect to the Parent Shares pursuant to Section 305(a) of the Code, Seller
shall be entitled to receive any cash dividends, dividends payable in securities
or distributions of any kind made in respect of the Parent
Shares.  Any shares issued pursuant to a stock dividend or stock split
with respect to the Parent Shares shall continue to be held during the period
the Parent Shares are held by Seller pursuant hereto.  Any
certificates received by Seller on account of stock dividends or stock splits
with respect to the Parent Shares shall be held by Seller pursuant
hereto.  In the event of any meeting of stockholders of Parent during
the period for which the Parent Shares are held by Seller pursuant hereto,
Parent shall send to Seller promptly copies of any notices, proxies and proxy
material in connection with such meeting.

    

    6.         SECURITIES LAW
MATTERS

    

    6.1       Disposition of
Shares.  Seller and each Stockholder agrees that they will not
sell, transfer or otherwise dispose of any Parent Shares distributed to them,
except from Seller to Stockholders in accordance with Sections 1.4 and 5.4 above
or pursuant to (a) an exemption from the registration requirements under the Act
which does not require the filing by Parent with the SEC of any registration
statement, offering circular or other document, in which case, each such
transferor shall first supply to Parent an opinion of counsel (which counsel and
opinions shall be reasonably satisfactory to Parent) that such exemption is
available, or (b) an effective registration statement filed by Parent with the
SEC under the Act.

    

    6.2       Legends.  The
certificates representing Parent Shares shall bear the following
legend:

    
      “THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR ANY STATE SECURITIES
LAW, AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED
OF BY THE HOLDER EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT FILED UNDER THE ACT, AND IN COMPLIANCE WITH APPLICABLE
SECURITIES LAWS OF ANY STATE WITH RESPECT THERETO, OR IN ACCORDANCE
WITH AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY
TO THE ISSUER THAT AN EXEMPTION FROM SUCH REGISTRATION
IS AVAILABLE.

       

    

    
      
        
           

        

        
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      Parent
may, unless a registration statement is in effect covering such shares, place
stop transfer orders with its transfer agents with respect to such certificates
in accordance with federal securities laws.

      

      6.3       Obtaining of Governmental
Approvals and Stock Exchange Listings.  Parent will (a) make
available adequate current public information with respect to Parent as is
required pursuant to Rule 144(c) in connection with the sale and transfer by
Seller or Stockholders under Rule 144 promulgated under the Act ("Rule 144")
during the one year period after the Closing, (b) direct the transfer agent of
Parent's Common Stock to remove the restrictive legend provided for in Section
6.2 and to deliver such certificates to a purchaser of Parent Shares from Seller
or any Stockholder in connection with a sale under Rule 144, and (c) cause such
shares of Parent Common Stock to be received by such purchaser to be listed on
the market where such Common Stock is then listed.

    

     

    7.         AMENDMENT AND
WAIVER

    

    7.1        Amendment.  This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties hereto.

    

    7.2        Waivers.  Except
as expressly provided herein, no delay or omission to exercise any right, power
or remedy accruing to any party upon any breach or default of another party
under this Agreement shall impair any such right, power or remedy nor shall it
be construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring.  Any waiver,
permit, consent or approval of any kind or character on the part of any party of
any breach or default under this Agreement, or any waiver on the part of any
party of any provisions or conditions of this Agreement, must be in writing and
shall be effective only to the extent specifically set forth in such
writing.

    

    8.         GENERAL
PROVISIONS

    

    8.1        Survival of Representations,
Warranties and Agreements.  All representations, warranties and
agreements in this Agreement or in any instrument delivered pursuant to this
Agreement shall survive the Closing for a period of six (6) months, except as to
tax and product liability matters, the representations, warranties and
agreements as to which shall survive for the applicable statute(s) of
limitations plus ninety (90) days.

    

    8.2        Notices.  All
notices and other communications given or made pursuant hereto shall be in
writing and shall be deemed to have been duly given or made as of the date
delivered if delivered personally, one (1) day after being sent by recognized
overnight courier (such as Federal express) for next day delivery, three (3)
days after being mailed by registered or certified mail (postage prepaid, return
receipt requested), or sent by email or facsimile transmission (with written
confirmation received) to the parties at the addresses set forth above (or at
such other address or number for a party as shall be specified by like notice),
except that notices after the giving of which there is a designated period
within which to perform an act and notices of changes of address or number shall
be effective only upon receipt.

    

    8.3        Exhibits and
Schedules.  Each of the Exhibits and Schedules to this
Agreement is hereby incorporated in this Agreement by this
reference.

    

    8.4        Interpretation.  When
a reference is made in this Agreement to Sections or Exhibits, such reference
shall be to a Section or Exhibit to this Agreement unless otherwise
indicated.  The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.

    

    
      
        
           

        

        
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      8.5        Severability.  If
any term or other provision of this Agreement is invalid, illegal or incapable
of being enforced by any rule of law, or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner adverse to either party.  Upon
such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner to the end that transactions
contemplated hereby are fulfilled to the extent possible.

       

    

    8.6        Entire
Agreement.  This Agreement (including the Exhibits and
Schedules hereto) constitutes the entire agreement and supersedes all prior
agreements and undertakings, both written and oral, between the parties, or any
of them, with respect to the subject matter hereof.

    

    8.7        Assignment.  This
Agreement shall not be assigned by operation of law or
otherwise.  Subject to the preceding sentence, this Agreement shall be
binding upon, and shall inure to the benefit of, the respective successors,
assigns, heirs and legal representatives of each of the parties
hereto.

    

    8.8        Parties in
Interest.  This Agreement shall be binding upon and inure
solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other person any
right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement, other than Section 5 (which is intended to be for the benefit of the
Indemnitees and may be enforced by such Indemnitees).

     

    
      8.9      
 Governing Law; Forum. This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of Utah, regardless of the laws that might otherwise govern under
applicable principles of conflicts of laws thereof. Any action arising under or
in connection with this Agreement may be brought in any federal or state court
having jurisdiction.

       

      8.10      Counterparts.  This
Agreement may be executed in one or more counterparts, all of which shall be
considered one and the same agreement and shall become effective when one or
more counterparts have been signed by each of the parties and delivered to the
other party, it being understood that all parties need not sign the same
counterpart.

    

    
      8.11    
 Attorneys' Fees. In the
event of any dispute arising in connection with this Agreement, the prevailing
party shall be entitled to recover its reasonable attorney’s fees and costs from
the nonprevailing party or parties.

       

    

    IN
WITNESS WHEREOF, Buyer, Seller and Stockholders have executed this Agreement as
of the date first written above.

     

    

     

    
      
        
          
            
              
                	
                        SELLER

                        Bishop
      Rock Software, Inc.

                        

                        

                        By:
      _____________________

                        

                        Title:
      ____________________

                      	 

              

            

          

        

      

    

     

     

    

    
      
        
           

        

        
          16

          
            

          

        

        
           

        

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  	
                                          BUYER

                                          SecureAlert
      Enterprise Solutions, Inc.

                                          

                                          

                                          By:
      _____________________

                                          

                                          Title:
      ____________________

                                           

                                        	 
	
                                          PARENT

                                          RemoteMDx,
      Inc.

                                          

                                          

                                          By:
      _____________________

                                          

                                          Title:
      ____________________

                                           

                                        	 
	
                                          

                                          STOCKHOLDERS

                                          Peter
      C. Sarna, II

                                          

                                          

                                          ____________________

                                           

                                        	 
	
                                           

                                          Sol Lizarbram

                                           

                                           

                                          ____________________

                                           

                                           

                                        	 
	
                                           

                                          Steven Florek

                                           

                                           

                                          ____________________

                                          

                                           

                                        	 
	
                                           

                                          Clydesdale
      Partners I, LLC,

                                          By
      Clydesdale Ventures, its Manager

                                          By:
      ____________________

                                                 Manager

                                          
                                             

                                             

                                            Clydesdale
      Partners II, LLC

                                            By
      Clydesdale Ventures II, its Manager

                                            

                                            

                                            By:
      ____________________

                                                   Manager

                                          

                                        	 

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
       

    

    
      
        
           

        

        
          17

          
            

          

        

        
           

        

      

    

    

    EXHIBIT
A

    BALANCE
SHEET

     

    
      Bishop
Rock Software Inc

      December
30, 2008

      
      

       

      
        
          
            
              	ASSETS	 	 	 	 	LIABILITIES	 	 	 
	Current Assets
      	 	 	 	 	 Current
      Liabilities	 	 	 
	Cash
      	 	$	3,342	 	 	Accounts payable	 	$	80,798	 
	Accounts receivable	 	 	 7,500	 	 	 Short-term notes	 	 	 	 
	
                      (less
      doubtful accounts)

                    	 	 	0	 	 	Current portion of long-term notes	 	 	 	 
	Inventory	 	 	 0	 	 	Interest payable	 	 	 	 
	Temporary investment	 	 	0	 	 	 Taxes payable	 	 	 	 
	Prepaid
      expenses	 	 	0	 	 	 Accrued payroll	 	 	 	 
	
                      Total Current
      Assets 

                    	 	$	10,842	 	 	
                      Total Current
      Liabilities

                    	 	$	80,798	 
	 	 	 	 	 	 	 	 	 	 	 
	Fixed
      Assets	 	 	 	 	 	Long-term
      Liabilities	 	 	 	 
	Long-term investments	 	$	0	 	 	Mortgage	 	$	0	 
	Land
      	 	 	0	 	 	Other
      long-term liabilities	 	 	 	 
	Buildings	 	 	0	 	 	  

                      Total
      Long-Term Liabilities

                    	 	$	0	 
	
                      (less
      accumulated depreciation)

                    	 	 	 0	 	 	 	 	 	 	 
	 Plant and equipment 	 	 	6,800	 	 	 	 	 	 	 
	
                      (less
      accumulated depreciation)
      

                    	 	 	0	 	 	Shareholders'
      Equity	 	 	 	 
	Furniture and fixtures 	 	 	0	 	 	Capital
      stock 	 	$	500,000	 
	
                      (less
      accumulated depreciation)

                    	 	 	 0	 	 	 Retained earnings 	 	 	(563,156	)
	Total Net Fixed
      Assets	 	$	6,800	 	 	  

                      Total
      Shareholders' Equity
      

                    	 	$	(63,156	)
	 	 	 	 	 	 	 	 	 	 	 
	TOTAL
      ASSETS	 	$	17,642	 	 	TOTAL LIABILITIES
      & EQUITY	 	$	17,642	 

            

          

        

      

    

     

    
 

    
      
        
           

        

        
          18

          
            

          

        

        
           

        

      

    

    

    EXHIBIT
B

    LIST OF
PURCHASED ASSETS

     

    
      1 Dell
XPS Workstation

      1 Dell
2400 Projector

      1 Dell
Latitude Laptop

      1 Dell
Inspiron Workstation

      1
Rackmount 2-Processor Server

      2
DoubleSight 24” Monitors

      1 Dell
20” Monitor

    

     

     

    

    
      
        
           

        

        
          19

          
            

          

        

        
           

        

      

    

    

    EXHIBIT
C

    ACCOUNTS
PAYABLE

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        	
                                                                Steven
      Florek -

                                                              	 	$	56,000	 
	
                                                                QlikTech
      -

                                                              	 	$	20,000	 
	Geographic
      Enterprises - 	 	$	 3,198	 
	Dove
      Financial Services -	 	$	 1,500	 
	Total:	 	$	 80,798	 

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
 

    
      
        
           

        

        
          20

          
            

          

        

        
           

        

      

    

    

    EXHIBIT
D

    BILL OF
SALE

    

    KNOW ALL
MEN BY THESE PRESENTS that, pursuant to that certain Asset Purchase Agreement
dated December 31, 2008 (the "Agreement") between RemoteMDx, Inc., a Utah
corporation, Bishop Rock Acquisition Company, Inc., a Utah corporation
(“Buyer”), Bishop Rock Software, Inc., a California corporation ("Seller"), and
Peter C. Sarna, II, Sol Lizarbram, Steven Florek, Clydesdale Partners I, LLC,
and Clydesdale Partners II, LLC, Seller, for and in consideration of the payment
of the Purchase Price (as defined in the Agreement) paid by Buyer, does hereby
sell, convey, transfer, assign and deliver unto Buyer all of Seller's right,
title and interest in and to all of the Purchased Assets (as defined in the
Agreement), TO HAVE AND TO HOLD the same unto Buyer, its successors and assigns,
forever.

    

    Seller
will from time to time, if so requested by Buyer, execute and deliver such other
instruments and take such other steps as may be reasonably necessary to
effectuate the sale and conveyance evidenced hereby.

    

    IN
WITNESS WHEREOF, Seller has executed this Bill of Sale as of December 31,
2008.

    

    
      
        
          
            	 
      	
                    SELLER

                  	 
	 
      	 
      	 
	 
      	 
      	 
	 
      	 
      	 
	 
      	
                    (Authorized
      Signature)

                  	 

          

        

      

    

    

     

     

    
      
        
           

        

        
          21

          
            

          

        

        
           

        

      

    

    

    EXHIBIT
E

    EMPLOYMENT
AGREEMENT

     

    
      See
attachment titled “Employment Agreement (Florek) v2.

       

    

    

    

    
      
        
           

        

        
          22

          
            

          

        

        
           

        

      

    

    

    SCHEDULE
2.1(f)

    CONTRACTS

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      	 
      	
                                              Description of
      Contract

                                            	 
      	
                                            	 
      
	 	 	 	 	 
	The
      following Contracts are to be assumed:
	 	 	 	 	 
	 	
                                              1)
      Seller is leasing Dell computer equipment for approximately $200 per
      month.

                                            
	 	
                                              2)
      Seller has a contract to deliver ForceSIGHT services to the City of East
      Palo Alto for $7500 in revenue.

                                            

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
 

    
      
        
           

        

        
          23

          
            

          

        

        
           

        

      

    

    

    SCHEDULE
2.1(g)

    LITIGATION

     

    None.

     

    
 

    
      
        
           

        

        
          24

          
            

          

        

        
           

        

      

    

    

    SCHEDULE
2.1(h)

    LICENSES

     

    None.

     

     

    

    
      
        
           

        

        
          25

          
            

          

        

        
           

        

      

    

    

    SCHEDULE
2.1(i)

    EMPLOYEE
AND RELATED MATTERS

     

    None.

     

     

    

    
      
        
           

        

        
          26

          
            

          

        

        
           

        

      

    

    

    SCHEDULE
2.1(j)

    ABSENCE
OF CHANGES OR EVENTS

    

    None.

     

    
 

    
      
        
           

        

        
          27

          
            

          

        

        
           

        

      

    

    

    SCHEDULE
2.1(k)

    COMPLIANCE
WITH LAWS

     

    None.

    
 

    

    
      
        
           

        

        
          28

          
            

          

        

        
           

        

      

    

    

    SCHEDULE
2.1(n)

    CUSTOMERS

    

    Seller’s
largest 20 customers in 2008 are as follows:

     

    City of
Oakland, California

    City of
East Palo Alto, California

    

    

    

    
      
        
           

        

        
          29

          
            

          

        

        
           

        

      

    

    

    SCHEDULE
2.1(p)

    INTELLECTUAL
PROPERTY

     

    

      The
“Bishop Rock Software” and “ForceSIGHT” tradenames have been registered with the
United States Patent
and Trademark Office’s Principal Register by Bishop Rock Software.

       

      See
Attachment P for Bishop Rock Software and ForceSIGHT logos.

       

       

      The above
items are owned exclusively by Seller.

    

     

     

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    
      Attachment
P: Bishop Rock Software and ForceSIGHT logos:

       

      Exhibit
A) ForceSIGHT logo

     

    

    Exhibit
B) Bishop Rock Software logo

     

    

    

 

    
      
        
           

        

        
          31

          
            

          

        

        
           

        

      

    

    

    SCHEDULE
2.1(q)

    SOFTWARE

     

    
      A) 
ForceSIGHT – Application source code written in Javascript and TransactSQL –
Source code owned by Bishop Rock Software.

      B)
 QlikView Server – OEM license to embed within ForceSIGHT – Licensed from
QlikTech Inc. – QlikTech owns its source code.

      C) 
MapInfo Mapmarker – OEM license to embed within ForceSIGHT – Licensed from
MapInfo Inc – MapInfo owns its source code.

    

     

     

    

    
      
        
           

        

        
          32

          
            

          

        

        
           

        

      

    

    

    SCHEDULE
2.1(r)

    ENVIRONMENTAL
MATTERS

    

    
      None.

    

     

    
 

    
      
        
           

        

        
          33

          
            

          

        

        
           

        

      

    

    

    SCHEDULE
2.1(s)

    FINANCIAL
STATEMENTS

     

    Income
Statement

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            	
                                                                    Revenue

                                                                  	 	
                                                                    Year
      to Date

                                                                  	 
	 
      	 	
                                                                    Amount

                                                                  	 
	
                                                                    Gross
      sales

                                                                  	 	$	7,500	 
	
                                                                    Less sales returns and allowances

                                                                  	 	 	 	 
	
                                                                    Net
      sales

                                                                  	 	$	7,500	 
	 
      	 	 	 	 
	
                                                                    Cost
      of Sales

                                                                  	 	
                                                                    Year
      to Date

                                                                  	 
	 
      	 	
                                                                    Amount

                                                                  	 
	
                                                                    Beginning
      inventory

                                                                  	 	$	0	 
	
                                                                    Plus
      goods purchased/manufactured

                                                                  	 	 	0	 
	
                                                                    Total
      goods available

                                                                  	 	$	0	 
	
                                                                    Less
      ending inventory

                                                                  	 	 	0	 
	
                                                                    Total
      cost of goods sold

                                                                  	 	$	0	 
	
                                                                    Gross
      profit (loss)

                                                                  	 	$	7,500	 
	 
      	 	 	 	 
	
                                                                    Operating
      Expenses

                                                                  	 	
                                                                    Year
      to Date

                                                                  	 
	 
      	 	
                                                                    Amount

                                                                  	 
	
                                                                    Selling

                                                                  	 	 	 	 
	
                                                                    Salaries
      and wages

                                                                  	 	$	0	 
	
                                                                    Commissions

                                                                  	 	$	0	 
	
                                                                    Advertising

                                                                  	 	$	0	 
	
                                                                    Depreciation

                                                                  	 	$	0	 
	
                                                                    Total
      selling expenses

                                                                  	 	$	0	 
	
                                                                    General/Administrative

                                                                  	 	 	 	 
	
                                                                    Salaries
      and wages

                                                                  	 	$	0	 
	
                                                                    Employee
      benefits

                                                                  	 	$	0	 
	
                                                                    Payroll
      taxes

                                                                  	 	$	0	 
	
                                                                    Insurance

                                                                  	 	$	0	 
	
                                                                    Consulting

                                                                  	 	$	96,000	 
	
                                                                    Rent

                                                                  	 	$	4,000	 
	
                                                                    Utilities

                                                                  	 	$	2,645	 
	
                                                                    Depreciation
      and amortization

                                                                  	 	$	0	 
	
                                                                    Office
      supplies

                                                                  	 	$	136	 
	
                                                                    Software

                                                                  	 	$	8,198	 
	
                                                                    Travel
      and entertainment

                                                                  	 	$	12,355	 
	
                                                                    Legal

                                                                  	 	$	3,766	 
	
                                                                    Postage

                                                                  	 	$	220	 
	
                                                                    Accounting

                                                                  	 	$	3,550	 
	
                                                                    Server
      Hosting

                                                                  	 	$	26,646	 
	
                                                                    Equipment
      maintenance and rental

                                                                  	 	$	2,650	 
	
                                                                    Interest

                                                                  	 	$	0	 
	
                                                                    Furniture
      and equipment

                                                                  	 	$	548	 
	
                                                                    Total
      General/Administrative expenses

                                                                  	 	$	160,714	 
	
                                                                    Total
      operating expenses

                                                                  	 	$	160,714	 
	
                                                                    Net
      income before taxes

                                                                  	 	$	(153,214	)
	
                                                                    Taxes
      on income

                                                                  	 	$	0	 
	
                                                                    Net
      income after taxes

                                                                  	 	$	(153,214	)
	
                                                                    Extraordinary
      gain or loss

                                                                  	 	$	0	 
	
                                                                    Income
      tax on extraordinary gain

                                                                  	 	$	0	 
	
                                                                    Net
      Income (Loss)

                                                                  	 	$	(153,214	)

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    Statement of Cash
Flows

    
      December
30, 2008

    

    Bishop Rock
Software

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            
                                                                              
                                                                                
                                                                                  
                                                                                    
                                                                                      
                                                                                        
                                                                                          
                                                                                            
                                                                                              
                                                                                                
                                                                                                  
                                                                                                    
                                                                                                      
                                                                                                        
                                                                                                          
                                                                                                            
                                                                                                              
                                                                                                                
                                                                                                                  
                                                                                                                    
                                                                                                                      
                                                                                                                        
                                                                                                                          
                                                                                                                            
                                                                                                                              
                                                                                                                                
                                                                                                                                  
                                                                                                                                    
                                                                                                                                      
                                                                                                                                        
                                                                                                                                          
                                                                                                                                            
                                                                                                                                              
                                                                                                                                                
                                                                                                                                                  
                                                                                                                                                    
                                                                                                                                                      
                                                                                                                                                        
                                                                                                                                                          
                                                                                                                                                            
                                                                                                                                                              
                                                                                                                                                                
                                                                                                                                                                  
                                                                                                                                                                    
                                                                                                                                                                      
                                                                                                                                                                        
                                                                                                                                                                          
                                                                                                                                                                            
                                                                                                                                                                              
                                                                                                                                                                                
                                                                                                                                                                                  
                                                                                                                                                                                    
                                                                                                                                                                                      
                                                                                                                                                                                        
                                                                                                                                                                                          
                                                                                                                                                                                            
                                                                                                                                                                                              
                                                                                                                                                                                                
                                                                                                                                                                                                  
                                                                                                                                                                                                    
                                                                                                                                                                                                      
                                                                                                                                                                                                        
                                                                                                                                                                                                          
                                                                                                                                                                                                            
                                                                                                                                                                                                              
                                                                                                                                                                                                                
                                                                                                                                                                                                                  
                                                                                                                                                                                                                    
                                                                                                                                                                                                                      
                                                                                                                                                                                                                        
                                                                                                                                                                                                                          
                                                                                                                                                                                                                            
                                                                                                                                                                                                                              
                                                                                                                                                                                                                                
                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                  	
                                                                                                                                                                                                                                                                           

                                                                                                                                                                                                                                                                        	 	
                                                                                                                                                                                                                                                                          2008
      Full Year

                                                                                                                                                                                                                                                                        	 
	Cash
      flows from operating activities  	 	
                                                                                                                                                                                                                                                                           

                                                                                                                                                                                                                                                                        	 
	Cash
      received from customers	 	$	0	 
	Cash
      paid for merchandise	 	 	0	 
	Cash
      paid for wages and other operating expenses	 	 	(79,816	)
	Cash
      paid for interest	 	 	0	 
	Cash
      paid for taxes	 	 	(1,042	) 
	Other	 	 	0	 
	Net
      cash provided (used) by operating activities	 	$	(80,858	)
	 	 	 	 	 
	Cash
      flows from investing activities 	 	 	 	 
	Cash
      received from sale of capital assets (plant and equipment, etc.)	 	$	0	 
	Cash
      received from disposition of business segments	 	 	0	 
	Cash
      received from collection of notes receivable	 	 	 0	 
	Cash
      paid for purchase of capital assets	 	 	 0	 
	Cash
      paid to acquire businesses	 	 	 0	 
	Other	 	 	 0	 
	Net
      cash provided (used) by investing activities	 	$	0	 
	 	 	 	 	 
	Cash
      flows from financing activities 	 	 	 	 
	Cash
      received from issuing stock	 	$	0	 
	Cash
      received from long-term borrowings	 	 	 0	 
	Cash
      paid to repurchase stock	 	 	 0	 
	Cash
      paid to retire long-term debt	 	 	 0	 
	Cash
      paid for dividends	 	 	 0	 
	Other	 	 	 0	 
	Net
      cash provided (used) in financing activities	 	$	0	 
	 	 	 	 	 
	Increase
      (decrease) in cash during the period	 	$	(80,858	) 
	Cash
      balance at the beginning of the period	 	 	 84,200	 
	Cash
      balance at the end of the period	 	$	 3,342	 

                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                

                                                                                                                                                                                                                              

                                                                                                                                                                                                                            

                                                                                                                                                                                                                          

                                                                                                                                                                                                                        

                                                                                                                                                                                                                      

                                                                                                                                                                                                                    

                                                                                                                                                                                                                  

                                                                                                                                                                                                                

                                                                                                                                                                                                              

                                                                                                                                                                                                            

                                                                                                                                                                                                          

                                                                                                                                                                                                        

                                                                                                                                                                                                      

                                                                                                                                                                                                    

                                                                                                                                                                                                  

                                                                                                                                                                                                

                                                                                                                                                                                              

                                                                                                                                                                                            

                                                                                                                                                                                          

                                                                                                                                                                                        

                                                                                                                                                                                      

                                                                                                                                                                                    

                                                                                                                                                                                  

                                                                                                                                                                                

                                                                                                                                                                              

                                                                                                                                                                            

                                                                                                                                                                          

                                                                                                                                                                        

                                                                                                                                                                      

                                                                                                                                                                    

                                                                                                                                                                  

                                                                                                                                                                

                                                                                                                                                              

                                                                                                                                                            

                                                                                                                                                          

                                                                                                                                                        

                                                                                                                                                      

                                                                                                                                                    

                                                                                                                                                  

                                                                                                                                                

                                                                                                                                              

                                                                                                                                            

                                                                                                                                          

                                                                                                                                        

                                                                                                                                      

                                                                                                                                    

                                                                                                                                  

                                                                                                                                

                                                                                                                              

                                                                                                                            

                                                                                                                          

                                                                                                                        

                                                                                                                      

                                                                                                                    

                                                                                                                  

                                                                                                                

                                                                                                              

                                                                                                            

                                                                                                          

                                                                                                        

                                                                                                      

                                                                                                    

                                                                                                  

                                                                                                

                                                                                              

                                                                                            

                                                                                          

                                                                                        

                                                                                      

                                                                                    

                                                                                  

                                                                                

                                                                              

                                                                            

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
2.1(t)

    INSURANCE

    

    None.

     

    
 

    
      36Exhibit 4.1

 

 

SUPPLEMENTAL

WARRANT AGREEMENT

 

between

 

Foster Wheeler AG 

(the new holding company of Foster Wheeler Ltd.),

 

Foster Wheeler Ltd.

 

and

 

Mellon Investor Services LLC, as Warrant
Agent

 

Dated as of February 9, 2009

 

 

 

SUPPLEMENTAL

WARRANT AGREEMENT

 

This
Supplemental Warrant Agreement, dated as of February 9, 2009 (this “Agreement”), is between Foster
Wheeler AG, a Swiss Company (the “Company”)
(the new holding company of Foster Wheeler Ltd., a Bermuda company (“FWL”)), FWL and Mellon Investor
Services LLC, a New Jersey limited liability company (the “Warrant
Agent”).

 

FWL entered
into a Warrant Agreement dated as of September 24, 2004 (the “Original Agreement”) with the
Warrant Agent at the time it issued to the holders of its outstanding 9.00%
Preferred Securities, Series I (liquidation amount $25 per trust security)
issued by FW Preferred Capital Trust I (“Trust Preferred Securities”)
that tendered in the exchange offer described in FWL’s registration statement
on Form S-4 (File No. 107054) last declared effective by the
Securities and Exchange Commission on August 16, 2004 (the “Form S-4”), warrants (the “Class A Warrants” or the “Warrants”) to purchase FWL’s common
shares par value $0.01 per share (the “FWL  Common Shares”).  On February 9, 2009, FWL became a
wholly-owned subsidiary of the Company by Scheme of Arrangement under Bermuda
Law.  As a consequence, as required under
Section 6(d) of the Original Agreement, the Company is hereby
entering into this Agreement in order to assume the obligation to deliver upon
exercise of the Warrants outstanding as of 2:00 a.m., Eastern time, on February 9,
2009 that number of the Company’s shares of common registered stock, par value
3.00 Swiss Francs per share (the “Common Shares”)
described in the Warrant Certificates issued under this Agreement.  Each Class A Warrant is exercisable to
purchase Common Shares, in the circumstances, upon the terms and conditions and
subject to adjustment in certain circumstances, all as set forth in this
Agreement.

 

The Company
wishes to retain the Warrant Agent to act on behalf of the Company, and the
Warrant Agent is willing so to act, in connection with the issuance, transfer,
exchange and replacement of the certificates evidencing the Warrants to be
issued under this Agreement (the “Warrant Certificates”)
and the exercise of the Warrants.  In
connection with the execution of this Agreement, the warrant certificate(s) issued
under the Original Agreement are being cancelled and new Warrant Certificate(s) are
being issued in accordance with this Agreement.

 

The Company
and the Warrant Agent wish to enter into this Agreement to set forth the terms
and conditions of the Warrants and the rights of the registered holders thereof
(“Warrantholders”) and to set forth
the respective rights and obligations of the Company and the Warrant
Agent.  Each Warrantholder is an intended
beneficiary of this Agreement with respect to the rights of Warrantholders
herein.

 

NOW,
THEREFORE, in consideration of the premises and the mutual agreements herein
set forth, the parties hereto agree as follows:

 

1.                                       Appointment of Warrant Agent and Transition.

 

(a)                                  The
Company appoints the Warrant Agent to act as agent for the Company in
accordance with the instructions in this Agreement and the Warrant Agent
accepts such appointment.

 

 

(b)                                 Nothing
in this Agreement shall be deemed to extinguish any of the rights, duties or
immunities of the Warrant Agent under the Original Agreement.  The Company hereby certifies that this
Agreement is being entered into under Section 6(d) of the Original
Agreement, and that the Warrant Agent shall be entitled to, and fully protected
in, taking any action that may be relevant under the Original Agreement.

 

2.                                       Date,
Denomination and Execution of Warrant Certificates.

 

(a)                                  The
warrant certificates (and the Form of Election to Purchase and the Form of
Assignment to be printed on the reverse thereof) shall be in registered form
only and shall be substantially of the tenor and purport recited in Exhibit A
hereto (the “Class A Warrant Certificate”
or the “Warrant Certificates”) and
may have such letters, numbers or other marks of identification or designation
and such legends, summaries or endorsements printed, lithographed or engraved
thereon as the Company may deem appropriate and as are not inconsistent with
the provisions of this Agreement, or as may be required to comply with any law,
or with any rule or regulation made pursuant thereto, or with any rule or
regulation of any stock exchange on which the Common Shares or the Warrants may
be listed or any automated quotation system, or to conform to usage.  Each Class A Warrant shall entitle the
registered holder thereof, subject to the conditions and other provisions of
this Agreement and of the Class A Warrant Certificate, to purchase that
number of fully paid and non-assessable Common Shares described in such holder’s
Warrant Certificate on or after the date hereof and on or before the close of
business on September 24, 2009, subject to extension, in certain
circumstances, as provided in Section 9(d) hereof (the “Expiration Date”) for each Class A
Warrant evidenced by such Class A Warrant Certificate for $4.689 per
Common Share to be received (the “Exercise Price”).  The Exercise Price is subject to adjustment
as provided in Section 6 hereof, provided that  the Exercise Price shall in no case be less than the par
value of the underlying Common Shares. 
The Company will not take any action to increase such par value above
the Exercise Price.  Each Warrant
Certificate shall be dated the date on which the Warrant Agent receives written
issuance instructions from the Company (under the hand of an Authorized
Officer) or a transferring holder of a Warrant Certificate or, if such
instructions specify another date, such other date.

 

(b)                                 For
purposes of this Agreement, the term “close of business” on any given date
shall mean 5:00 p.m., Eastern time, on such date; provided, however, that
if such date is not a business day, it shall mean 5:00 p.m., Eastern time,
on the next succeeding business day.  For
purposes of this Agreement, the term “business day” shall mean any day other
than a Saturday, Sunday, a federal holiday, any day that shall be in the City
of New York or Zurich, Switzerland a legal holiday or a day on which banking
institutions in New York, New York, Jersey City, New Jersey, Zurich,
Switzerland or in the State or jurisdiction, as the case may be, in which the
Warrant Agent maintains the principal office in which it conducts business
related to the Warrants are authorized or obligated by law to be closed.

 

2

 

(c)                                  Each
Warrant Certificate shall be executed on behalf of the Company by the chairman
of the Board of Directors of the Company (the “Board”),
the president or chief executive officer, any vice president, the chief
financial officer, the treasurer or any assistant treasurer, or the secretary
or any assistant secretary, (each an “Authorized Officer”)
either manually or by facsimile signature printed thereon.  Each Warrant Certificate shall be
countersigned by the Warrant Agent upon receipt by the Warrant Agent of written
instructions from the Company to such effect (which the Company covenants to
give) and shall not be valid for any purpose unless so countersigned.  In case any Authorized Officer of the Company
who shall have signed any Warrant Certificate shall cease to be an Authorized
Officer of the Company before countersignature by the Warrant Agent and issue
and delivery thereof by the Company, such Warrant Certificate, nevertheless,
may be countersigned by the Warrant Agent, issued and delivered with the same
force and effect as though the person who signed such Warrant Certificate had
not ceased to be such Authorized Officer of the Company.

 

3.                                       Subsequent Issue of Warrant Certificates.  All outstanding warrant certificates under
the Original Agreement shall be cancelled by the Warrant Agent on or before the
date hereof at the direction of the Company and no new warrant certificates
shall be issued under the Original Agreement after the execution of this
Agreement.  Subsequent to their original
issuance, no Warrant Certificates shall be reissued except (if applicable, upon
written notice thereof from the Company (under the hand of an Authorized
Officer) to the Warrant Agent) (i) Warrant Certificates issued upon
transfer thereof in accordance with Section 4 hereof, (ii) Warrant
Certificates issued upon any combination, split-up or exchange of Warrant
Certificates pursuant to Section 4 hereof, (iii) Warrant Certificates
issued in replacement of mutilated, destroyed, lost or stolen Warrant
Certificates pursuant to Section 5 hereof, (iv) Warrant Certificates
issued upon the partial exercise of Warrant Certificates pursuant to Section 7
hereof, and (v) Warrant Certificates issued to reflect any adjustment or
change in the Exercise Price or the number or kind of shares purchasable
thereunder pursuant to Section 22 hereof. 
Warrant Certificate(s) shall be issued on the date hereof to
replace warrant certificate(s) issued under the Original Agreement in
connection with the Company’s assumption of obligations under this
Agreement.  The Warrant Agent is hereby
irrevocably authorized to countersign and deliver, in accordance with the
provisions of said Sections 4, 5, 7 and 22, the new Warrant Certificates
required for purposes thereof, and the Company, whenever required by the
Warrant Agent, will supply the Warrant Agent with (i) Warrant Certificates
duly executed on behalf of the Company (under the hand of an Authorized
Officer) for such purposes and (ii) all other information pertaining
thereto which the Warrant Agent shall reasonably request.

 

4.                                       Transfers and Exchanges of Warrant Certificates.

 

(a)                                  The
Warrant Agent will keep or cause to be kept books for registration of ownership
and transfer of the Warrant Certificates issued hereunder.  Such registers shall show the names and
addresses of the respective Warrantholders and the kind and number of Warrants
evidenced by each such Warrant Certificate.

 

3

 

(b)                                 The
Warrant Agent shall, from time to time, register the transfer of any
outstanding Warrants upon the books to be maintained by the Warrant Agent for
that purpose, upon surrender of the Warrant Certificate evidencing such
Warrants, with the Form of Assignment duly filled in and executed with
such signature guaranteed by an eligible institution and such supporting
documentation as the Warrant Agent or the Company may reasonably require, to
the Warrant Agent at its stock transfer office in Jersey City, New Jersey at
any time on or before the Expiration Date of such Warrant, and upon payment to
the Warrant Agent for the account of the Company of an amount equal to any
applicable transfer tax.  Payment of the
amount of such tax may be made in cash, or by certified or official bank check,
payable in lawful money of the United States of America to the order of the
Company.

 

(c)                                  Upon
receipt of a Warrant Certificate, with the Form of Assignment duly filled
in and executed by a Warrantholder, accompanied by payment of an amount equal
to any applicable transfer tax, the Warrant Agent shall promptly cancel the
surrendered Warrant Certificate and countersign and deliver to the transferee a
new Warrant Certificate for the number of full Warrants transferred to such
transferee; provided, however, that in case a Warrantholder shall elect to
transfer fewer than all of the Warrants evidenced by such Warrant Certificate,
the Warrant Agent in addition shall promptly countersign and deliver to such
Warrantholder a new Warrant Certificate or Certificates for the number of full
Warrants not so transferred.

 

(d)                                 Any
Warrant Certificate or Certificates may be exchanged at the option of a
Warrantholder for another Warrant Certificate or Certificates of different
denominations, of like tenor and representing in the aggregate the same kind
and number of Warrants, upon surrender of such Warrant Certificate or
Certificates, with the Form of Assignment duly filled in and executed, to
the Warrant Agent, at any time or from time to time after the close of business
on the date hereof and prior to the close of business on the Expiration Date
relating to such Warrant.  The Warrant
Agent shall promptly cancel the surrendered Warrant Certificate and deliver the
new Warrant Certificate pursuant to the provisions of this Section.

 

5.                                       Mutilated, Destroyed, Lost or Stolen Warrant Certificates.  Upon receipt by the Company and the Warrant
Agent of evidence from a Warrantholder reasonably satisfactory to them of the
loss, theft, destruction or mutilation of any Warrant Certificate, and in the
case of loss, theft or destruction, of indemnity or security from a
Warrantholder reasonably satisfactory to them, and reimbursement to them by
such Warrantholder of all reasonable expenses incidental thereto, and, in the
case of mutilation, upon surrender by the relevant Warrantholder and
cancellation of the Warrant Certificate, the Warrant Agent shall countersign
and deliver a new Warrant Certificate of like tenor for the same kind and
number of Warrants.  In the case of an
institutional Warrantholder, the written assurance of such Warrantholder of
such loss, theft or destruction shall be considered a satisfactory indemnity
for the purposes of this Section 5.

 

4

 

6.                                       Adjustments of Number and Kind of Shares Purchasable and Exercise Price.  Upon written notice thereof from the Company
(under the hand of an Authorized Officer) to the Warrant Agent (which the
Company covenants to give promptly following any of the events described in
this Section), the number and kind of securities or other property purchasable
upon exercise of a Warrant shall be subject to adjustment from time to time
upon the occurrence, after the date hereof, of any of the following events:

 

(a)                                  In
case the Company shall (1) declare and pay a dividend in, or make a
distribution of, shares of its capital on its outstanding Common Shares, (2) subdivide
its outstanding Common Shares into a greater number of such shares or (3) consolidate
its outstanding Common Shares into a smaller number of such shares, the total
number of Common Shares purchasable upon the exercise of each Warrant
outstanding immediately prior thereto shall be adjusted so that the
Warrantholder, on exercise of a Warrant, shall be entitled to receive at the
same aggregate Exercise Price the number of shares of the applicable classes
which such Warrantholder would have owned or have been entitled to receive
immediately following the happening of any of the events described above had
such Warrant been exercised in full immediately prior to the record date with
respect to such event (on the effective date of such event, if there is no such
record date).  Any adjustment made
pursuant to this Subsection shall, in the case of a share dividend or
distribution, declared and paid in shares of the Company become effective as of
the record date therefore and, in the case of a subdivision or consolidation,
be made as of the effective date thereof. 
If, as a result of an adjustment made pursuant to this Subsection, the
Warrantholder of any Warrant Certificate thereafter surrendered for exercise
shall become entitled to receive shares of two or more classes of share capital
of the Company, the Board (whose determination shall be conclusive and shall be
evidenced by a Board resolution filed with the Warrant Agent) shall determine
the allocation of the adjusted Exercise Price between or among shares of such
classes.

 

(b)                                 In
the event of a capital reorganization or a reclassification of the Common Shares
(except as provided in Subsection (a) above or Subsection (d) below),
any Warrantholder, upon exercise of Warrants, shall be entitled to receive, in
substitution for the Common Shares to which he would have become entitled upon
exercise immediately prior to such reorganization or reclassification, the
shares (of any class or classes) or other securities or property of the Company
(or cash) that he would have been entitled to receive at the same aggregate
Exercise Price upon such reorganization or reclassification if such Warrants
had been exercised immediately prior to the record date with respect to such
event (on the effective date of such event, if there is no such record date);
and in any such case, appropriate provision (as reasonably determined by the
Board, whose determination shall be evidenced by a certified Board resolution
filed with the Warrant Agent) shall be made for the application of this Section 6
with respect to the rights and interests thereafter of the Warrantholders
(including but not limited to the allocation of the Exercise Price between or
among shares of classes of capital), to the end that this Section 6
(including the adjustments of the number of Common Shares or other securities
purchasable and the Exercise Price thereof) 

 

5

 

shall
thereafter be reflected, as nearly as reasonably practicable, in all subsequent
exercises of the Warrants for any shares or securities or other property (or
cash) thereafter deliverable upon the exercise of the Warrants.

 

(c)                                  Whenever
the number of Common Shares or other securities purchasable upon exercise of a
Warrant is adjusted as provided in this Section 6, the Company will file
promptly following such adjustment with the Warrant Agent a certificate signed
by an Authorized Officer of the Company setting forth the number and kind of
securities or other property purchasable upon exercise of a Warrant, as so
adjusted, stating that such adjustments in the number or kind of shares or
other securities or property conform to the requirements of this Section 6,
and setting forth a brief statement of the facts accounting for such
adjustments.  Promptly after receipt of
such certificate, the Company, or the Warrant Agent at the Company’s
instruction (which the Company covenants to give under the hand of an
Authorized Officer), will deliver, by first-class, postage prepaid mail, a
brief summary thereof (to be supplied by the Company) to the Warrantholders;
provided, however, that failure to file or to give any notice required under
this Subsection, or any defect therein, shall not affect the legality or
validity of any such adjustments under this Section 6; and provided,
further, that, where appropriate, such notice may be given in advance and
included as part of the notice required to be given pursuant to Section 12
hereof.

 

(d)                                 In
case of any consolidation of the Company with, or merger of the Company into,
another company or corporation (other than a consolidation, amalgamation or
merger which does not result in any reclassification or change of the
outstanding Common Shares), or in case of any sale or conveyance to another
company or corporation of the property of the Company as an entirety or
substantially as an entirety, the company or corporation formed by such
consolidation, amalgamation or merger or the company or corporation which shall
have acquired such assets, as the case may be, shall execute and deliver to the
Warrant Agent a supplemental warrant agreement providing that each
Warrantholder then outstanding shall have the right thereafter (until the
expiration of such Warrant) to receive, upon exercise of such Warrant, solely
the kind and amount of share capital, shares and other securities and property
(or cash) receivable upon such consolidation, amalgamation, merger, sale or
transfer by a holder of the number of Common Shares of the Company for which
such Warrant might have been exercised immediately prior to such consolidation,
amalgamation, merger, sale or transfer, provided that (i) if
the holders of Common Shares were entitled to exercise a right of election as
to the kind or amount of securities, cash or other assets receivable upon such
consolidation, amalgamation or merger, then the kind and amount of securities,
cash or other assets for which each Warrant shall become exercisable shall be
deemed to be the kind and amount so receivable per share by a plurality of the
holders of Common Shares in such consolidation, amalgamation or merger, and (ii) if
a tender or exchange offer shall have been made to and accepted by the holders
of Common Shares under circumstances in which, upon completion of such tender
or exchange offer, the maker thereof, together with members of any group
(within 

 

6

 

the meaning of
Rule 13d-5(b)(1) under the Securities Exchange Act of 1934 (the “Exchange
Act”) of which such maker is a part, and together with any affiliate or
associate of such maker (within the meaning of Rule 12b-2 under the
Exchange Act) and any members of any such group of which any such affiliate or
associate is a part, own beneficially (within the meaning of Rule 13d-3
under the Exchange Act) more than 50% of the outstanding Common Shares, each
Warrant shall become exercisable for the highest amount of cash, securities or
other property to which such Warrantholder would actually have been entitled as
a shareholder if such Warrantholder had exercised the Warrant prior to the
expiration of such tender or exchange offer, accepted such offer and all of the
Common Shares held by such Warrantholder had been purchased pursuant to such
tender or exchange offer, subject to adjustments (from and after the
consummation of such tender or exchange offer). 
Such supplemental warrant agreement shall provide for adjustments which shall
be as nearly equivalent as may be practicable to the adjustments provided in
this Section.  The above provision of
this Subsection shall similarly apply to successive consolidations,
amalgamation, mergers, sales or transfers. 
The Warrant Agent shall not be under any responsibility to determine the
correctness of any provision contained in any such supplemental warrant
agreement relating to either the kind or amount of share capital, shares or
securities or property (or cash) purchasable by Warrantholders upon the
exercise of their Warrants after any such consolidation, merger, sale or
transfer or of any adjustment to be made with respect thereto, but subject to
the provisions of Section 20 hereof, may accept as conclusive evidence of
the correctness of any such provisions, and shall be protected in relying upon,
a certificate of a firm of independent certified public accountants (who may be
the accountants regularly employed by the Company) with respect thereto.

 

(e)                                  If
the Company distributes to all holders of its Common Shares any of its assets
(excluding ordinary cash dividends) or debt securities or any rights or
warrants to purchase debt securities, assets or other securities of the
Company, the Exercise Price of the Warrants shall be adjusted in accordance
with the following formula:

 

E’  =  E    x    M   –   F

M

 

where:

 

E’ =         the adjusted
exercise price.

 

E =          the current
exercise price.

 

M =         the current
market price per Common Share on the record date mentioned below.

 

F =          the fair market
value on the record date of the assets, securities, rights, options or warrants
applicable to one Common Share. Fair market value shall be reasonably
determined by the Board, provided that
the Company shall obtain an appraisal or other valuation opinion in support 

 

7

 

of the Board’s
determination from an investment bank or accounting firm of recognized national
standing if the aggregate fair market value exceeds $10 million.

 

The adjustment contemplated by
this paragraph shall be made successively whenever any such distributions are
made and shall become effective immediately after the record date for the
determination of shareholders entitled to receive the distribution.  This paragraph does not apply to rights, options
or warrants referred to in paragraph (f).

 

(f)                                    If
the Company issues any Common Shares or securities convertible into or
exchangeable for Common Shares or any rights, options or warrants to acquire
Common Shares or securities convertible into or exchangeable for Common Shares
(other than securities issued in transactions described in subsections (a), (b) or
(e) of this Section 6) for a consideration per Common Share issued or
initially deliverable upon conversion or exchange of such securities less than
the current market price per share on the date of issuance of such securities,
the Exercise Price of the Warrants shall be adjusted in accordance with this
formula:

 

	
   

  	
   

  	
  P 

  	
   

  
	
   

  	
  E’ = E  x

  	
  O     +     M

  	
   

  
	
   

  	
   

  	
  O     +      D

  	
   

  

 

where:

 

E’ =         the adjusted
Exercise Price.

 

E =          the then current
Exercise Price.

 

O =          the number of
Common Shares outstanding immediately prior to the issuance of such securities.

 

P =          the aggregate
consideration received for the issuance of such securities.

 

M =         the current
market price per Common Share on the date of issuance of such securities.

 

D =          the number of
Common Shares so issued or the maximum number of Common Shares deliverable upon
exercise or conversion or in exchange for such securities at the initial
conversion or exchange rate.

 

The adjustment shall be made
successively whenever any such issuance is made, and shall become effective
immediate after such issuance.  If all of
the Common Shares deliverable upon conversion or exchange of such securities
have not been issued when such securities are no longer outstanding, or there
is a change in the terms of such securities, then the Exercise Price shall
promptly be readjusted to the Exercise Price which would then be in effect had
the adjustment upon the issuance of such securities been made on the basis of
the actual number of Common Shares issued upon conversion or exchange of such
securities (in case

 

8

 

the securities are no longer
outstanding) or on the basis of such new terms. 
This paragraph does not apply to: (1) the exercise of Warrants, or
the exercise, conversion or exchange of other securities convertible into or
exchangeable for Common Shares, or (2) Common Shares issued to the Company’s
employees, officers, directors and consultants under bona fide employee benefit
plans or stock options plans adopted by the Board and approved by the holders
of Common Shares when required by law, if such Common Shares would otherwise be
covered by this paragraph.

 

(g)                                 For
purposes of this Section 6, the current market price per share of Common
Shares on any date is the average of the Quoted Prices of the Common Shares for
30 consecutive trading days commencing 45 trading days before the date in
question.  The “Quoted
Price” of the Common Shares is the last reported sales price of
the Common Shares as reported by Nasdaq, National Market System, or if the
Common Shares are listed on a securities exchange, the last reported sales
price of the Common Shares on such exchange which shall be for consolidated
trading if applicable to such exchange, or if neither so reported or listed,
the last reported bid price of the Common Shares; provided that with respect to
the sale of Common Shares in an underwritten public offering, the current
market price per share shall be equal to the offering price.  In the absence of one or more such
quotations, the current market price shall be the fair market value, as
reasonably determined by the Board.

 

(h)                                 For
purposes of any computation respecting consideration received pursuant to
paragraph (f) of this Section 6, the following shall apply:  (1) in the case of the issuance of
Common Shares for cash, the consideration shall be the amount of such cash,
provided that in no case shall any deduction be made for reasonable
commissions, discounts or other expenses incurred by the Company for any
underwriting of the issue or otherwise in connection therewith; (2) in the
case of the issuance of Common Shares for a consideration in whole or in part
other than cash, the consideration other than cash shall be deemed to be the
fair market value thereof; and (3) in the case of the issuance of
securities convertible into or exchangeable for shares, the aggregate
consideration received therefor shall be deemed to be the consideration
received by the Company for the issuance of such securities plus the additional
minimum consideration, if any, to be received by the Company upon the
conversion or exchange thereof (the consideration in each case to be determined
in the same manner as provided in clauses (1) and (2) of this
paragraph).

 

(i)                                     Whenever
the Exercise Price is adjusted, the Company shall promptly provide to the
Warrantholders notice of adjustment stating the facts requiring the adjustment
and the manner of computing it.

 

(j)                                     Upon
each event that provides for an adjustment of the Exercise Price pursuant to
paragraph (e) or (f) of this Section 6, each Warrant outstanding
prior to the making of the adjustment shall thereafter evidence the right to
receive upon 

 

9

 

payment of the adjusted Exercise Price that number of Common Shares
obtained from the following formula:

 

	
  N’     =      N          x          

  	
  E  

  	
   

  
	
   

  	
  E’ 

  	
   

  

 

where

 

N’ =                         the
adjusted number of Common Shares issuable upon exercise of a Warrant by payment
of the adjusted Exercise Price.

 

N =                             the
number of Common Shares previously issuable upon exercise of a Warrant by
payment of the Exercise Price prior to adjustment.

 

E’ =                           the
adjusted Exercise Price.

 

E =                               the
Exercise Price prior to adjustment.

 

(k)           In case any event shall
occur affecting the Company, or any entity in which the Company has a direct or
indirect investment, as to which the provisions of this Section 6 are not
strictly applicable, but the failure to make any adjustment would not fairly
protect the purchase rights represented by the Warrants in accordance with the
essential intent and principles of this Section, then in each such case the
Company shall make the adjustment on a basis reasonably determined by the Board
to be consistent with the essential intent and principles established in this Section 6,
necessary to preserve, without dilution, the purchase rights represented by the
Warrants. In no case may such adjustment increase the Exercise Price or reduce
the number of shares issuable on exercise of a Warrant.

 

(l)            Irrespective of any
adjustments in the number or kind of shares issuable upon exercise of Warrants,
Warrant Certificates theretofore or thereafter issued may continue to express
the same price and number and kind of shares as are stated in the similar
Warrant Certificates initially issuable pursuant to this Agreement.

 

(m)          The Company may retain a
firm of independent public accountants of recognized standing, which may be the
firm regularly retained by the Company, selected by the Board or any executive
committee of the Board, to make any computation required under this Section,
and a certificate signed by such firm shall, if reasonable, be conclusive
evidence of the correctness of any computation made under this Section.

 

(n)           For the purpose of this
Section, the term “Common Shares” shall mean (i) the Common Shares or (ii) any
other class of share capital or shares resulting from successive changes or
reclassifications of such Common Shares consisting solely of changes in par
value.  In the event that at any time as
a result of an adjustment made pursuant to this Section, the holder of any
Warrant thereafter surrendered for exercise shall become entitled to receive
any share capital or shares of the Company other than Common Shares, thereafter
the number of such other shares 

 

10

 

so receivable
upon exercise of any Warrant shall be subject to adjustment from time to time
in a manner and on terms as nearly equivalent as practicable to the provisions
with respect to the Common Shares contained in this Section, and all other
provisions of this Agreement, with respect to the Common Shares, shall apply on
like terms to any such other shares.

 

(o)                                 The
Company covenants not to take any action that would cause the Exercise Price of
the Warrants to be adjusted to an amount less than the par value in effect from
time to time of any shares issuable on exercise.

 

7.                                       Exercise of Warrants. 
A Warrantholder may exercise the Warrants registered in its name, in
whole at any time or in part from time to time on or after the date hereof and
on or before the close of business on the Expiration Date, subject to the
provisions of Section 8, at which time the Warrants as represented by the
Warrant Certificates shall be and become wholly void and of no value.  Warrants may be exercised by Warrantholders
or redeemed by the Company as follows:

 

(a)                                  Exercise
of Warrants shall be accomplished upon surrender of the Warrant Certificate
evidencing such Warrants, with the Form of Election to Purchase on the
reverse side thereof duly filled in and executed by the Warrantholder, to the
Warrant Agent at its stock transfer office in New York, New York, together with
payment to the Warrant Agent on behalf of the Company by the Warrantholder of
the Exercise Price (as of the date of such surrender) of the Warrants then
being exercised and an amount equal to any applicable transfer tax and, if
requested by the Company, any other taxes or governmental charges which the
Company may be required by law to collect in respect of such exercise.  Payment of the Exercise Price and other
amounts may be made by wire transfer of good funds, or by certified or bank
cashier’s check, payable in lawful money of the United States of America to the
order of the Company.  No adjustment
shall be made for any cash dividends, whether paid or declared, on any
securities issuable upon exercise of a Warrant.

 

(b)                                 Upon
receipt of a Warrant Certificate, with the Form of Election to Purchase
duly and properly filled in and executed by the Warrantholder (or the
electronic equivalent, in the case of DTC), accompanied by payment of the
Exercise Price of the Warrants being exercised by the Warrantholder (and of an
amount equal to any applicable taxes or government charges as aforesaid), the
Warrant Agent shall promptly (i) inform (y) the Company by emailing
(to the email addresses of persons so requested in writing by the Company from
time to time) a duly executed copy of an exercise notice, the form of which is
attached hereto as Exhibit B relating to such exercise (the “Exercise Notice”) and (z) Bank
Vontobel, its Swiss agent with respect to the Warrants (the “Swiss Agent”), by delivering to the
address stated in the Exercise Notice a duly executed copy of such Exercise
Notice; (ii) transfer the funds representing the aggregate Purchase Price
to the Swiss bank account held by the Company at the Swiss Agent for this
purpose; and (iii) upon (a) receipt of written confirmation from the
Swiss Agent that the funds were received and (b) receipt of written
instructions from the Company to so 

 

11

 

request,
request from the Warrant transfer agent with respect to the securities to be
issued and delivered to or upon the order of the Warrantholder, in such name or
names as such Warrantholder may designate, a certificate or certificates for
the number of full shares of the securities to be purchased, together with
cash, if any, made available by the Company pursuant to Section 8 hereof
in respect of any fraction of a share of such securities otherwise issuable
upon such exercise, and the Company shall cause the Transfer Agent to prepare
and deliver such certificate or certificates within ten business days.  If the Warrant is then exercisable to
purchase property other than securities, the Company shall take appropriate
steps to cause such property to be delivered to or upon the order of the
Warrantholder.  In addition, if it is
required by law and upon written instruction by the Company, the Warrant Agent
will deliver to each Warrantholder a prospectus which complies with the
provisions of Section 9 of the Securities Act of 1933 and/or the Swiss law
and the Company agrees to supply the Warrant Agent with sufficient number of
prospectuses to effectuate that purpose.

 

(c)                                  In
case a Warrantholder shall exercise fewer than all of the Warrants registered
in such Warrantholder’s name, the Warrant Agent shall promptly countersign and
deliver to the registered Warrantholder or to his duly authorized assigns, a
new Warrant Certificate or Certificates evidencing the number of Warrants that
were not so exercised.

 

(d)                                 Each
person in whose name any certificate for securities is issued upon the exercise
of Warrants shall, subject to the Company’s registration rules according
to article 8 of the Company’s articles of association, first be registered as
the holder of such securities in the share register of the Company on, and
thereupon shall, for all purposes, be deemed to have become the holder of the
securities represented thereby as of, and such registration shall be made and
such certificate shall be dated the date upon which the Warrant Agent (i) duly
informed the Company and the Swiss Agent in proper form about the surrender by
the Warrantholder and (ii) payment of the Exercise Price (and of any
applicable taxes or other governmental charges) was made by the Warrant Agent
to the Swiss Agent (all in accordance with Section 7(b) above);
provided, however, that (i) if such date of information and payment by the
Warrant Agent is a date on which said share register of the Company is closed,
such person shall be deemed to have become the record holder of such shares as
of, and the registration in the said share register and the certificate for
such securities shall be dated, the next succeeding business day on which the
said share register is open (whether before, on or after the Expiration Date relating
to such Warrant) and the Warrant Agent shall be under no duty to deliver the
certificates for such securities until such date and (ii) voting rights
may not be exercised until the time such shares are registered with voting
rights in the share register of the Company. 
The Company covenants and agrees that it shall not cause its share
register of members to be closed for a period of more than 20 consecutive
business days except upon consolidation, amalgation, merger, sale of all or
substantially all of its assets, dissolution or liquidation or as otherwise
provided by law.

 

12

 

8.                                       Fractional Interests. 
The Company shall not be required to issue any Warrant Certificate
evidencing a Warrant that is exercisable for a fraction of a Common Share or to
issue fractions of Common Shares on the exercise of the Warrants.  If any fraction (calculated to the nearest
one-hundredth) of a Common Share would, except for the provisions of this
Section, be issuable on the exercise of any Warrant, the Company shall,
(subject to applicable law), purchase such fraction for an amount in cash equal
to the current value of such fraction computed on the basis of the closing
market price (as quoted on the OTC Bulletin Board or other principal quotation
system or exchange on which the Common Shares are quoted or traded) on the
trading day immediately preceding the day upon which such Warrant Certificate
was surrendered for exercise in accordance with Section 7 hereof.  If more than one Warrant held by a single
Warrantholder evidences a fraction of a share upon its exercise, then for the
purposes of this Section 8, the shares issuable upon the exercise of all
such Warrants held by such Warrantholder at a given time shall be aggregated for
the purposes of this Section 8.  By
accepting a Warrant Certificate, the Warrantholder in whose name it is
registered expressly waives any right to receive a Warrant Certificate
evidencing any Warrant that is exercisable for a fraction of a Common Share or
to receive any fractional Common Share upon exercise of a Warrant.

 

9.                                       Reservation and Registration of Equity Securities.

 

(a)                                  The
Company covenants that it will at all times reserve and keep available, free
from any preemptive rights, out of its conditional capital, solely for the
purpose of issuance upon exercise of the Warrants, such number of Common
Shares, of the Company as shall then be issuable upon the exercise of all
outstanding Warrants (“Equity Securities”).  The Company covenants that all Equity
Securities which shall be so issuable shall, upon such issue, be duly
authorized, validly issued, fully paid and non-assessable.

 

(b)                                 The
Company covenants that if any Equity Securities, required to be reserved for
the purpose of issue upon exercise of the Warrants hereunder, require
registration with or approval of any governmental authority under any federal,
state or other law before such shares may be issued upon exercise of Warrants,
the Company will use its best efforts to cause such securities to be duly
registered, or approved, as the case may be, and, to the extent practicable,
take all such action in anticipation of and prior to the exercise of the
Warrants, including, without limitation, filing or maintaining an appropriate
registration statement (the “Shelf Registration
Statement”) or prospectus, necessary to permit a public offering
of the securities underlying the Warrants at any and all times during which the
Warrants are exercisable.

 

(c)                                  Upon
(i) the issuance by the Securities and Exchange Commission of a stop order
suspending the effectiveness of the Shelf Registration Statement or the
initiation of proceedings with respect to the Shelf Registration Statement
under Section 10(d) or 8(e) of the Securities Act of 1933, as
amended (the “Securities Act”), (ii) the
occurrence of any event or the existence of any fact (a “Material
Event”) as a result of which the Shelf Registration Statement
shall contain any 

 

13

 

untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, or
any prospectus contained therein shall contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or (iii) the occurrence or
existence of any pending corporate development with respect to the Company that,
in the discretion of the Company, makes it appropriate to suspend the
availability of the Shelf Registration Statement and the related prospectus,
then (A) in the case of clause (ii) above, subject to the next
sentence, the Company shall, as promptly as practicable, use its best efforts
to prepare and file a post effective amendment to such Shelf Registration
Statement or a supplement to the related prospectus or any document
incorporated therein by reference or file any other required document that would
be incorporated by reference into such Shelf Registration Statement and
prospectus so that such Shelf Registration Statement does not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading, and such prospectus does not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, as thereafter delivered to the
Warrantholders whose Warrants are being exercised thereunder, and, in the case
of a post effective amendment to the Shelf Registration Statement, subject to
the next sentence, use its best efforts to cause it to be declared effective as
promptly as is reasonably practicable, and (B) the Company shall give
notice to the Warrantholders that the availability of the Shelf Registration
Statement is suspended (a “Deferral Notice”)
and, upon receipt of any Deferral Notice, each Warrantholder agrees not to
exercise any Warrants pursuant to the Shelf Registration Statement until such
holder’s receipt of copies of the supplemented or amended prospectus provided
for in clause (A) above, or until it is advised in writing by the
Company that the prospectus may be used, and has received copies of any
additional or supplemental filings that are incorporated or deemed incorporated
by reference in such prospectus.  The
Company shall use its best efforts to ensure that the use of the prospectus may
be resumed (x) in the case of clause (i) above, as promptly as
is practicable, (y) in the case of clause (ii) above, as soon
as, in the good faith judgment of the Company, public disclosure of such
Material Event would not be materially prejudicial to or contrary to the
interests of the Company or, if necessary to avoid unreasonable burden or
expense, as soon as reasonably practicable thereafter and (z) in the case
of clause (iii) above, as soon as, in the discretion of the Company,
such suspension is no longer appropriate. 
The period during which the availability of the Shelf Registration
Statement and any prospectus is suspended or for any other reason the Warrants
are not exercisable (the “Deferral Period”)
shall not exceed 30 days, and there shall not occur more than one such
Deferral Period in any consecutive 90-day period.

 

(d)                                 The
parties hereto agree that the Expiration Dates shall be extended as provided
herein if a Deferral Period occurs.  The
Expiration Dates shall be extended for a 

 

14

 

period having
a duration equal to each Deferral Period (each, an “Extension
Period”).  The Expiration
Dates shall be extended from time to time for every Extension Period.  In addition, if a Deferral Period occurs at
any time during the 30 business days preceding what would otherwise have been
the Expiration Dates, then the Expiration Dates shall be extended so that no
Deferral Period exists during the 30 consecutive business days preceding the
Expiration Dates, as so extended.  The
Company shall promptly give notice to each Warrantholder of Warrants of each
extension of the Expiration Dates.

 

10.                                 Reduction of Conversion Price Below Par Value.  Before taking any action that would cause an
adjustment pursuant to Section 6 hereof reducing the portion of the
Exercise Price required to purchase one share of its share capital below the
then par value (if any) of a share of such share capital, the Company will take
any corporate action which, in the opinion of its counsel, may be necessary in
order that the Company may validly and legally issue fully paid and
non-assessable shares of such share capital.

 

11.                                 Payment of Taxes.  The
Company covenants and agrees that it will pay when due and payable any and all
federal, state or local documentary stamp and other original issue taxes which
may be payable in respect of the original issuance of the Warrant Certificates,
or any Common Shares or other securities upon the exercise of Warrants.  The Company shall not, however, be required (a) to
pay any tax which may be payable in respect of any transfer involved in the
transfer and delivery of Warrant Certificates or the issuance or delivery of
certificates for Common Shares or other securities in a name other than that of
the registered holder of the Warrant Certificate surrendered for purchase or (b) to
issue or deliver any certificate for Common Shares or other securities upon the
exercise of any Warrant Certificate until any such tax shall have been paid,
all such tax being payable by the holder of such Warrant Certificate at the
time of surrender.

 

12.                                 Notice of Certain Corporate Action.  In case the Company after the date hereof
shall propose (a) to offer or distribute to the holders of Common Shares,
generally, rights to subscribe to or purchase any additional shares of any
class of its share capital, any evidences of its indebtedness or assets, or any
other rights or options, (b) to effect any reclassification of Common
Shares (other than a reclassification involving merely the subdivision or
combination of outstanding Common Shares) or any capital reorganization, tender
or exchange offer, or any consolidation, amalgamation or merger to which the
Company is a party and for which approval of any members of the Company is
required, or any sale, transfer or other disposition of its property and assets
substantially as an entirety, or the liquidation, voluntary or involuntary
dissolution or winding-up of the Company, or (c) take any action that,
under Section 9(c) of the COD as that term is defined in the Original
Agreement, requires delivery of a notice of such event, then, in each such
case, the Company shall file with the Warrant Agent (which the Company
covenants to so instruct), and the Company or the Warrant Agent on its behalf,
if so instructed in writing by the Company, shall mail (by first-class, postage
prepaid mail) to all registered Warrantholders notice of such proposed action,
which notice shall specify the date on which the books of the Company shall
close or a record be taken for such offer of rights or options, or the date on
which such reclassification, reorganization, consolidation, amalgamation,
merger, sale, transfer, other disposition, liquidation, 

 

15

 

voluntary or
involuntary dissolution or winding-up shall take place or commence, as the case
may be, and which shall also specify any record date for determination of
holders of Common Shares entitled to vote thereon or participate therein and
shall set forth such facts with respect thereto as shall be reasonably
necessary to indicate any adjustments in the Exercise Price and the number or
kind of shares or other securities purchasable upon exercise of Warrants which
will be required as a result of such action. 
Such notice shall be filed and mailed in the case of any action covered
by clause (a) above, at least 15 days prior to the record date for
determining holders of the Common Shares for purposes of such action or, if a
record is not to be taken, the date as of which the holders of Common Shares of
record are to be entitled to such offering; and, in the case of any action
covered by clause (b) above, at least 20 days, or such longer period as
may be required by law, prior to the earlier of the date on which such
reclassification, reorganization, consolidation, amalgamation, merger, sale,
transfer, other disposition, liquidation, voluntary or involuntary dissolution
or winding-up is expected to become effective and the date on which it is
expected that holders of Common Shares of record on such date shall be entitled
to exchange their shares for securities or other property deliverable upon such
reclassification, reorganization, consolidation, amalgamation, merger, sale,
transfer, other disposition, liquidation, voluntary or involuntary dissolution
or winding-up.  Failure to give any such
notice or any defect therein shall not affect the legality or validity of any
transaction listed in this Section 12.

 

13.                                 Disposition of Proceeds on Exercise of Warrant Certificate, etc.
The Warrant Agent shall account promptly to the Company with respect to
Warrants exercised by delivery to the Company of a duly executed Exercise
Notice and concurrently pay to the Company’s Swiss bank account held at its
Swiss Agent all moneys received by the Warrant Agent for the purchase of
securities or other property through the exercise of such Warrants.

 

14.                                 Warrantholder Not Deemed a Member.  No Warrantholder, as such, shall be entitled
to vote, receive dividends or be deemed the holder of Common Shares or any
other securities of the Company which may at any time be issuable on the
exercise of the Warrants represented thereby for any purpose whatever, nor
shall anything contained herein or in any Warrant Certificate be construed to
confer upon any Warrantholder, as such, any of the rights of a member of the
Company or any right to vote for the election of directors or upon any matter
submitted to members at any meeting thereto, or to give or withhold consent to
any corporate action (whether upon any recapitalization, issuance of shares,
reclassification of shares, change of par value, consolidation, merger,
amalgamation, conveyance or otherwise), or to receive notice of meetings or
other actions affecting members (except as provided in Section 12 hereof),
or to receive dividend or subscription rights, or otherwise, until such Warrant
Certificate shall have been exercised by such Warrantholder in accordance with
the provisions hereof and the underlying securities shall have been registered
in the name of such holder and the receipt of the Exercise Price and any other
amounts payable upon such exercise by the Warrant Agent.  Voting rights may only be exercised once a
shareholder is registered in the Company’s share register as a shareholder with
voting rights.

 

15.                                 Right of Action.  All
rights of action in respect to this Agreement are vested in the respective
Warrantholders; and any Warrantholder, without the written consent of the 

 

16

 

Warrant Agent
or of any other Warrantholder, may, in his own behalf for his own benefit,
enforce, and may institute and maintain any suit, action or proceeding against
the Company suitable to enforce, or otherwise in respect of, his right to
exercise the Warrants evidenced by his Warrant Certificate, for the purchase of
the Common Shares in the manner provided in the Warrant Certificate and in this
Agreement.

 

16.                                 Agreement with Holders of Warrant Certificates.  Every Warrantholder by accepting the same
consents and agrees with the Company, the Warrant Agent and with every other
Warrantholder that:

 

(a)                                  the
Warrant Certificates are transferable on the registry books of the Warrant
Agent only upon the terms and conditions set forth in this Agreement; and

 

(b)                                 the
Company and the Warrant Agent may deem and treat the person in whose name the
Warrant Certificate is registered as the absolute owner of the Warrant
(notwithstanding any notation of ownership or other writing thereon made by
anyone other than the Company or the Warrant Agent) for all purposes whatever
and neither the Company nor the Warrant Agent shall be affected by any notice
to the contrary.

 

17.                                 Cancellation of Warrant Certificates.  In the event that the Company shall purchase
or otherwise acquire any Warrant Certificate or Certificates after the issuance
thereof, such Warrant Certificate or Certificates shall thereupon be delivered
to the Warrant Agent and be canceled by it and retired.  The Warrant Agent shall also cancel any
Warrant Certificate delivered to it for exercise, in whole or in part, or
delivered to it for transfer, split-up, combination or exchange.  Warrant Certificates so canceled shall be
maintained in accordance with the regulations of the Securities and Exchange
Commission.

 

18.                                 Concerning the Warrant Agent.  The Company agrees to pay to the Warrant
Agent compensation for all services rendered by it hereunder as set forth in
Annex A to this Agreement, including its reasonable expenses, including counsel
fees, and other disbursements incurred in the administration and execution of
this Agreement and the exercise and performance of its duties hereunder.  The Company also agrees to indemnify the
Warrant Agent for, and to hold it harmless against, any loss, judgment, fine,
cost, damage, penalty, demand, claim, liability or expense (including the
reasonable fees and expenses of a single counsel to the Warrant Agent),
incurred without gross negligence, bad faith or willful misconduct (which gross
negligence, bad faith or willful misconduct must be determined by a final,
nonappealable order, judgment, decree or ruling of a court of competent
jurisdiction) on the part of the Warrant Agent, arising out of or in connection
with the acceptance and administration of this Agreement.

 

19.                                 Merger or Consolidation or Change of Name of Warrant Agent.  Any corporation, company or other entity into
which the Warrant Agent may be merged or amalgamated or with which it may be
consolidated, or any corporation resulting from any merger, amalgamation, or
consolidation to which the Warrant Agent shall be a party, or any corporation,
company or other entity succeeding to the corporate trust business of the
Warrant Agent, shall be the successor to the Warrant Agent hereunder without
the 

 

17

 

execution or
filing of any paper or any further act on the part of any of the parties
hereto, provided that such corporation, company
or other entity would be eligible for appointment as a successor warrant agent
under the provisions of Section 21 hereof. 
In case at the time such successor to the Warrant Agent shall succeed to
the agency created by this Agreement, any of the Warrant Certificates shall
have been countersigned but not delivered, any such successor to the Warrant
Agent may adopt the countersignature of the original Warrant Agent and deliver
such Warrant Certificates so countersigned; and in case at that time any of the
Warrant Certificates shall not have been countersigned, any successor to the
Warrant Agent may countersign such Warrant Certificates either in the name of
the predecessor Warrant Agent or in the name of the successor Warrant Agent;
and in all such cases such Warrant Certificates shall have the full force provided
in the Warrant Certificates and in this Agreement.  In case at any time the name of the Warrant
Agent shall be changed and at such time any of the Warrant Certificates shall
have been countersigned but not delivered, the Warrant Agent may adopt the countersignature
under its prior name and deliver Warrant Certificates so countersigned; and in
case at that time any of the Warrant Certificates shall not have been
countersigned, the Warrant Agent may countersign such Warrant Certificates
either in its prior name or in its changed name; and in all such cases such
Warrant Certificates shall have the full force provided in the Warrant
Certificates and in this Agreement.

 

20.                                 Duties of Warrant Agent. 
The Warrant Agent undertakes the duties and obligations expressly
imposed by this Agreement upon the following terms and conditions, by all of
which the Company and the holders of Warrant Certificates, by their acceptance
thereof, shall be bound:

 

(a)                                  The
Warrant Agent may consult with counsel satisfactory to it (who may be counsel
for the Company), and the advice or opinion of such counsel shall be full and
complete authorization and protection to the Warrant Agent as to any action
taken, suffered or omitted by it in good faith and in accordance with such
opinion.

 

(b)                                 Whenever
in the performance of its duties under this Agreement, the Warrant Agent shall
deem it necessary or desirable that any fact or matter be proved or established
by the Company prior to taking, suffering or omitting to take any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established prior to taking, suffering or omitting to take any action
hereunder, by a certificate signed by an Authorized Officer of the Company and
delivered to the Warrant Agent; and such certificate shall be full
authorization and protection to the Warrant Agent for any action taken,
suffered or omitted to be taken in good faith by it under the provisions of
this Agreement in reliance upon such certificate.

 

(c)                                  The
Warrant Agent shall be liable hereunder only for its own gross negligence, bad
faith or willful misconduct (which gross negligence, bad faith or willful
misconduct must be determined by a final, nonappealable order, judgment, decree
or ruling of a court of competent jurisdiction).  Anything to the contrary notwithstanding, in
no event shall the Warrant Agent be liable for special,

 

18

 

punitive,
indirect, consequential or incidental loss or damage of any kind whatsoever
(including, but not limited to, lost profits), even if the Warrant Agent has
been advised of the likelihood of such loss or damage.  The liability of the Warrant Agent hereunder
is limited to the amount of annual fees paid to the Warrant Agent by the
Company pursuant to this Agreement.

 

(d)                                 The
Warrant Agent shall not be liable for or by reason of any of the statements of
fact or recitals contained in this Agreement or in the Warrant Certificates
(except its countersignature on the Warrant Certificates and such statements or
recitals as describe the Warrant Agent or action taken or to be taken by it) or
be required to verify the same, but all such statements and recitals are and
shall be deemed to have been made by the Company only.

 

(e)                                  The
Warrant Agent shall not be under any responsibility in respect of the validity
of this Agreement or the execution and delivery hereof (except the due
execution hereof by the Warrant Agent) or in respect of the validity or
execution of any Warrant Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Warrant Certificate; nor shall
it be responsible for the making of any change in the number of Common Shares
for which a Warrant is exercisable required under the provisions of Section 6
or responsible for the manner, method or amount of any such change or the
ascertaining of the existence of facts that would require any such adjustment
or change (except with respect to the exercise of Warrant Certificates after
actual notice of any adjustment of the Exercise Price); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Common Shares to be issued pursuant to this
Agreement or any Warrant Certificate or as to whether any Common Shares will,
when issued, be validly issued, fully paid and non-assessable.

 

(f)                                    The
Warrant Agent shall be under no obligation to institute any action, suit or
legal proceeding or take any other action likely to involve expense unless the
Company or one or more registered holders of Warrant Certificates shall furnish
the Warrant Agent with reasonable security and indemnity for any costs and
expenses which may be incurred.  All
rights of action under this Agreement or under any of the Warrants may be
enforced by the Warrant Agent without the possession of any of the Warrants or
the production thereof at any trial or other proceeding relative thereto, and
any such action, suit or proceeding instituted by the Warrant Agent shall be
brought in its name as Warrant Agent, and any recovery of judgment shall be for
the ratable benefit of the Warrantholders, as their respective rights or
interests may appear.

 

(g)                                 The
Warrant Agent and any stockholder, director, officer or employee of the Warrant
Agent may buy, sell or deal in any of the Warrants or other securities of the
Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to or otherwise act
as fully and freely as though it were not Warrant Agent under this
Agreement.  

 

19

 

Nothing herein
shall preclude the Warrant Agent from acting in any other capacity for the
Company or for any other legal entity.

 

(h)           The Warrant Agent is
hereby authorized and directed to accept instructions with respect to the
performance of its duties hereunder from an Authorized Officer of the Company,
and to apply to such officers for advice or instructions in connection with the
Warrant Agent’s duties, and it shall not be liable for any action taken or
suffered or omitted by it in good faith in accordance with instructions of any
such officer.

 

(i)            The Warrant Agent will
not be responsible for any failure of the Company to comply with any of the
covenants contained in this Agreement or in the Warrant Certificates to be
complied with by the Company.

 

(j)            The Warrant Agent may
execute and exercise any of the rights or powers hereby vested in it or perform
any duty hereunder either itself or by or through its attorneys, agents or
employees and the Warrant Agent shall not be answerable or accountable for any
act, default, neglect or misconduct of any such attorneys, agents or employees
or for any loss to the Company resulting from such neglect or misconduct;
provided, however, that reasonable care shall have been exercised in the
selection and continued employment of such attorneys, agents and employees.

 

(k)           Subject to Sections 18,
20(c) and 20(m) of this Agreement, the Warrant Agent, in carrying out
its duties and exercising its powers pursuant to this Agreement, shall at all
times act in accordance with such standards of conduct as are customary in the
industry for agencies of this kind.

 

(l)            The Warrant Agent will
not incur any liability or responsibility to the Company or to any
Warrantholder for any action taken, or any failure to take action, in reliance
on any notice, resolution, waiver, consent, order, certificate or other paper,
document or instrument reasonably believed by the Warrant Agent to be genuine
and to have been signed, sent or presented by the proper party or parties.

 

(m)          The Warrant Agent will
act hereunder solely as agent of the Company in a ministerial capacity, and its
duties will be determined solely by the provisions hereof.  The Warrant Agent will not be liable for
anything which it may do or refrain from doing in connection with this
Agreement except for its own gross negligence, bad faith or willful misconduct
(which gross negligence, bad faith or willful misconduct must be determined by
a final, nonappealable order, judgment, decree or ruling of a court of
competent jurisdiction).

 

21.                                 Change of Warrant Agent. 
The Warrant Agent may resign and be discharged from its duties under
this Agreement upon 30 days’ prior notice in writing mailed, by registered or
certified mail, to the Company.  The
Company may remove the Warrant Agent or any successor warrant agent upon 30
days’ prior notice in writing, mailed to the Warrant Agent or successor warrant
agent, as the case may be, by registered or certified mail.  If 

 

20

 

the Warrant
Agent shall resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor to the Warrant Agent and shall, within 15
days following such appointment, give notice thereof in writing to each
registered holder of the Warrant Certificates. 
After such removal or resignation or incapacity by the resigning or
incapacitated Warrant Agent, the Company agrees to perform the duties of the
Warrant Agent hereunder until a successor Warrant Agent is appointed.  After appointment and execution of a copy of
this Agreement in effect at that time, the successor Warrant Agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Warrant Agent without further act or deed; but the
former Warrant Agent shall deliver and transfer to the successor Warrant Agent,
within a reasonable time, any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary
for the purpose.  Failure to give any
notice provided for in this Section, however, or any defect therein shall not
affect the legality or validity of the resignation or removal of the Warrant
Agent or the appointment of the successor warrant agent, as the case may be.

 

22.                                 Issuance of New Warrant Certificates.  Notwithstanding any of the provisions of this
Agreement or the several Warrant Certificates to the contrary, the Company may,
at its option, issue new Warrant Certificates in such form as may be approved
by the Board to reflect any adjustment or change in the Exercise Price or the
number or kind of shares purchasable under the several Warrant Certificates
made in accordance with the provisions of this Agreement.

 

23.                                 Notices.  Notice or
demand pursuant to this Agreement to be given or made on the Company by the
Warrant Agent or by the registered holder of any Warrant Certificate shall be
sufficiently given or made if sent by first-class or registered mail, postage
prepaid, addressed (until another address is filed in writing by the Company
with the Warrant Agent) as follows:

 

Foster Wheeler
AG
 c/o Foster
Wheeler Inc.

Perryville Corporate Park

Clinton, NJ  08809-4000

Telecopier No.: 908-730-5300

Attention: Peter Ganz

 

Subject to the
provisions of Section 21, any notice pursuant to this Agreement to be
given or made by the company or by the holder of any Warrant Certificate to or
on the Warrant Agent shall be sufficiently given or made if sent by first-class
or registered mail, postage prepaid, addressed (until another address is filed
in writing by the Warrant Agent with the Company) as follows:

 

Mellon Investor Services LLC

Newport Office Center VII

480 Washington Blvd.

Jersey City, New Jersey 07310

Facsimile No.:
201-680-4665

Attention: Relationship
Manager

 

21

 

Mellon
Investor Services LLC

Newport Office Center VII

480 Washington Blvd.

Jersey City, New Jersey 07310

Facsimile No.: 201-680-4610

Attention:  General Counsel

 

Any notice or
demand authorized to be given or made to the registered holder of any Warrant
Certificate under this Agreement shall be sufficiently given or made if sent by
first-class or registered mail, postage prepaid, to the last address of such
holder as it shall appear on the registers maintained by the Warrant Agent.

 

24.                                 Modification of Agreement. 
Any term, covenant, agreement or condition in this Agreement may be
amended, or compliance therewith may be waived (either generally or in a
particular instance and either retroactively or prospectively), by a written
instrument or written instruments executed by the Company and the Warrant Agent
with the consent of a holders of a majority of the Warrants then outstanding
(excluding the Company and its affiliates); provided, that,
without the consent of each Warrantholder affected, no such amendment or waiver
shall (i) reduce the number of Common Shares ,or other property or
securities that can be issued pursuant to a Warrant, (ii) increase the
Exercise Price, (iii) bring forward the Expiration Date, (iv) change
any provision of Section 6 hereof in a manner adverse to any Warrantholder
or (v) modify any provision of this Section 24.  Each amendment, modification, termination or
waiver shall be effective only in the specific instance and for the specific
purpose for which it was given.  No
notice to or demand on the Company, the Warrant Agent or any Warrantholder in
any case shall entitle the Company, the Warrant Agent or the Warrantholder to
any other or further notice or demand in similar or other circumstances.  Any amendment, modification, termination,
waiver or consent effected in accordance with this Section 24 shall be
binding upon Warrantholders, Warrant Agent and the Company.

 

25.                                 Successors.  All the
covenants and provisions of this Agreement by or for the benefit of the Company
or the Warrant Agent shall bind and inure to the benefit of their respective
successors and assigns hereunder.

 

26.                                 New York Contract. 
This Agreement and each Warrant Certificate issued hereunder shall be
deemed to be a contract made under the laws of the State of New York and for
all purposes shall be construed in accordance with the laws of said State.  To the fullest extent permitted by applicable
law, the parties hereby irrevocably and unconditionally submit to the jurisdiction
of any New York State or United States Federal court sitting in New York City
over any suit, action or proceeding arising out of or relating to this
Agreement or any Warrant.  Each party
irrevocably and unconditionally waives, to the fullest extent permitted by
applicable law, any objection which it may now or hereafter have to the laying
of the venue of any such suit, action or proceeding brought in such a court and
any claim that any such suit, action or proceeding brought in such a court has 

 

22

 

been brought
in an inconvenient forum. To the extent that a party has or hereafter may
acquire any immunity from jurisdiction of any court or from any legal process
with respect to itself or its property, such party irrevocably waives, to the
fullest extent permitted by applicable law, such immunity in respect of its
obligations hereunder or under any Warrant Certificate.  Each party agrees that final judgment in any
such suit, action or proceeding brought in such a court shall be conclusive and
binding upon such party and, to the extent permitted by applicable law, may be
enforced in any court to the jurisdiction of which such party is subject by a
suit upon such judgment or in any manner provided by applicable law; provided
that service of process is effected upon such party in the manner specified in
the following subsection or as otherwise permitted by applicable law.

 

27.                                 Termination.  This
Agreement shall terminate as of the close of business on the Expiration Date,
or such earlier date upon which all Warrants shall have been exercised or
redeemed, except that the Warrant Agent shall account to the Company as to all
Warrants outstanding and all cash held by it as of the close of business on the
Expiration Date.  The provisions of
Sections 18 and 20 of this Agreement shall survive the termination of this
Agreement.

 

28.                                 Benefits of this Agreement. 
Nothing in this Agreement or in the Warrant Certificates shall be
construed to give to any person or corporation other than the Company, the
Warrant Agent, and their respective successors and assigns hereunder and the
Warrantholders any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, the Warrant Agent, their respective successors and assigns hereunder
and the Warrantholders.

 

29.                                 Descriptive Headings. 
The descriptive headings of the several Sections of this Agreement are
inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.

 

30.                                 Counterparts.  This
Agreement may be executed in any number of counterparts, each of which shall be
an original, but such counterparts shall together constitute one and the same
instrument.

 

(Remainder of page intentionally
left blank; signature page follows)

 

23

 

IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be duly executed as
of the day and year first above written.

 

	
   

  	
  FOSTER WHEELER AG

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter J. Ganz

  
	
   

  	
   

  	
  Name: Peter J. Ganz

  
	
   

  	
   

  	
  Title: Executive Vice President, General

  Counsel and Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FOSTER WHEELER LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter J. Ganz

  
	
   

  	
   

  	
  Name: Peter J. Ganz

  
	
   

  	
   

  	
  Title: Executive Vice President, General

  Counsel and Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MELLON INVESTOR SERVICES LLC

  
	
   

  	
  as Warrant Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael Battista

  
	
   

  	
   

  	
  Name: Michael Battista

  
	
   

  	
   

  	
  Title: Event Manager

  
	
   

  	
   

  	
  Tel: 201-680-3285

  

 

24

 

Exhibit A

 

Form of Class A
Warrant

 

[DTC LEGEND

 

UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.][to be
included in global Warrant Certificates held through DTC]

 

VOID AFTER 5 P.M. EASTERN TIME
ON          , 2009

(EXCEPT AS PROVIDED IN THE WARRANT AGREEMENT)

 

WARRANTS TO PURCHASE
[                 ](1) COMMON
SHARES

 

Warrants

 

Foster Wheeler
AG

 

CUSIP:

 

THIS CERTIFIES
THAT
                                     
or registered assigns, is the registered holder of the number of Warrants (“Warrants”) set forth above.  Each Warrant is issued by Foster Wheeler AG,
a Swiss Company, (the “Company”),
the new holding company of Foster Wheeler Ltd., a Bermuda company, as provided in
the Supplemental Warrant Agreement, dated as of February 9, 2009 between
the Company, Foster Wheeler Ltd. and the Warrant Agent (the “Warrant Agreement”), and will
entitle the holder thereof to purchase from the Company, subject to the terms
and conditions set forth hereinafter and in the Warrant Agreement, at any time
on or after February 9, 2009 and before the close of business on September 24,
2009, subject to extension, in certain circumstances, as described in the
Warrant Agreement (the “Expiration Date”),
that number of fully paid and non-assessable common registered shares of the
Company (the “Common Shares”) set forth
above in this Warrant Certificate, subject to adjustments as provided in the
Warrant Agreement, upon presentation and surrender of this Warrant Certificate,
with the instructions for the registration and delivery of Common Shares filled
in, at the stock transfer office in Jersey City, New Jersey, of Mellon Investor
Services LLC, Warrant Agent of the Company (“Warrant
Agent”) or of its successor warrant agent or, if there be no
successor warrant agent, at the corporate offices of the Company, and upon
payment of the Exercise Price (as defined in the Warrant Agreement) and any
applicable taxes paid either in 

 

(1) Fill in number of shares for which such Warrant may be
exercised

 

A-1

 

cash, or by certified or official bank check, payable in lawful money
of the United States of America to the order of the Company.  Each Warrant will entitle the holder to
purchase Common Shares for $4.689 per Common Share (subject to adjustments as
provided in the Warrant Agreement).  The
number and kind of securities or other property for which the Warrants are
exercisable are subject to adjustment to prevent dilution.  All Warrants not theretofore exercised will
expire on the Expiration Date.

 

This Warrant
Certificate is subject to all of the terms, provisions and conditions of the
Warrant Agreement, to all of which terms, provisions and conditions the registered
holder of this Warrant Certificate consents by acceptance hereof.  The Warrant Agreement is incorporated herein
by reference and made a part hereof and reference is made to the Warrant
Agreement for a full description of the rights, limitations of rights,
obligations, duties and immunities of the Warrant Agent, the Company and the
holders of the Warrant Certificates. 
Copies of the Warrant Agreement are available for inspection at the
stock transfer office of the Warrant Agent or may be obtained upon written
request addressed to the Company at Foster Wheeler AG c/o Foster Wheeler Inc. Perryville
Corporate Park Clinton, NJ  08809-4000
Telecopier No.: 908-730-5315 Attention: John Doyle.

 

The Company
shall not be required upon the exercise of the Warrants evidenced by this
Warrant Certificate to issue fractions of, Common Shares, but may make
adjustment therefore in cash on the basis of the current market value of any
fractional interest as provided in the Warrant Agreement.

 

In certain
cases, the sale of securities by the Company upon exercise of Warrants would
violate the securities laws of the United States, certain states thereof or
other jurisdictions.  The Company has
agreed to use its best efforts to cause a registration statement to continue to
be effective during the term of the Warrants with respect to such sales under
the Securities Act of 1933, and to take such action under the laws of various
states as may be required to cause the sale of securities upon exercise to be
lawful.

 

This Warrant
Certificate, with or without other Certificates, upon surrender to the Warrant
Agent, any successor warrant agent or, in the absence of any successor warrant
agent, at the corporate offices of the Company, may be exchanged for another
Warrant Certificate or Certificates evidencing in the aggregate the same number
of Warrants as the Warrant Certificate or Certificates so surrendered.  If the Warrants evidenced by this Warrant
Certificate shall be exercised in part, the holder hereof shall be entitled to
receive upon surrender hereof another Warrant Certificate or Certificates
evidencing the number of Warrants not so exercised.

 

No holder of
this Warrant Certificate, as such, shall be entitled to vote, receive dividends
or be deemed the holder of Common Shares or any other securities of the Company
which may at any time be issuable on the exercise hereof for any purpose
whatever, nor shall anything contained in the Warrant Agreement or herein be
construed to confer upon the holder of this Warrant Certificate, as such, any
of the rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof or give or withhold consent to any corporate action (whether
upon any matter submitted to shareholders at any meeting thereof, or give or
withhold consent to any merger, recapitalization, issuance of shares,
reclassification of shares, change of par value or change of 

 

A-2

 

shares to no par value, consolidation, conveyance or otherwise) or to
receive notice of meetings or other actions affecting shareholders (except as
provided in the Warrant Agreement) or to receive dividends or subscription
rights or otherwise until the Warrants evidenced by this Warrant Certificate
shall have been exercised and the Common Shares purchasable upon the exercise
thereof are delivered as provided in the Warrant Agreement.  Voting rights may only be exercised once a
shareholder is registered in the Company’s share register as a shareholder with
voting rights.

 

If this
Warrant Certificate shall be surrendered for exercise within any period during
which the register of members for the Company’s Common Shares or other class of
shares purchasable upon the exercise of the Warrants evidenced by this Warrant
Certificate are closed for any purpose, the Company shall not be required to
make delivery of certificates for shares purchasable upon such transfer until
the date of the reopening of said register of members.

 

Every holder
of this Warrant Certificate by accepting the same consents and agrees with the
Company, the Warrant Agent, and with every other holder of a Warrant
Certificate that:

 

(a)           this Warrant Certificate is
transferable on the registry books of the Warrant Agent only upon the terms and
conditions set forth in the Warrant Agreement, and

 

(b)           the Company and the Warrant Agent may
deem and treat the person in whose name this Warrant Certificate is registered
as the absolute owner hereof (notwithstanding any notation of ownership or
other writing thereon made by anyone other than the Company or the Warrant
Agent) for all purposes whatever and neither the Company nor the Warrant Agent
shall be affected by any notice to the contrary.  The Company shall not be required to issue or
deliver any certificate for Common Shares or other securities upon the exercise
of Warrants evidenced by this Warrant Certificate until any tax which may be
payable in respect thereof by the holder of this Warrant Certificate pursuant to
the Warrant Agreement shall have been paid, such tax being payable the holder
of this Warrant Certificate at the time of surrender.

 

This Warrant
Certificate shall not be valid or obligatory for any purpose until it shall
have been countersigned by the Warrant Agent.

 

(Remainder of page intentionally left
blank; signature page follows)

 

A-3

 

WITNESS the
facsimile signatures of the proper officer of the Company.

 

	
  Dated:

  	
   

  
	
   

  	
  FOSTER WHEELER AG

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Countersigned:

  
	
   

  	
   

  
	
   

  	
  MELLON INVESTOR SERVICES LLC

  
	
   

  	
  as Warrant Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

A-4

 

[TO BE PRINTED ON BACK OF CERTIFICATE]

 

FORM OF ELECTION TO PURCHASE

 

The undersigned
holder hereby exercises the right to purchase registered shares, nominal value
of CHF 3 per share (the “Warrant Shares”), of FOSTER WHEELER AG, a Swiss
company (the “Company”), evidenced by the attached Warrant (the “Warrant”).  Capitalized terms used herein and not
otherwise defined have the respective meanings set forth in the Warrant.

 

1.             Number of Warrants Exercised.  The holder is exercising [•] Warrants,
for [•] Warrant Shares* to be issued out of the Company’s
conditional share capital according to article 5 of the Company’s articles of
association at an exercise price per Warrant Share of USD 4.69.

 

2.             Payment of Warrant Exercise
Price.  The holder has paid in connection
with this exercise the sum of $
             
to the Company in accordance with the terms of the Warrant.

 

3.             Delivery of Warrant Shares.  The Company shall deliver out of its
conditional share capital as set forth in article 5 of its Articles of
Association the Warrant Shares specified above in accordance with the terms of
the Warrant.

 

	
   

  	
  Dated:

  
	
   

  	
   

  
	
   

  	
  (Name of Registered Holder)

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

* Fractional shares will be settled in cash in accordance with the
Supplemental Warrant Agreement and Swiss law.

 

A-5

 

FORM OF
ASSIGNMENT

 

FOR VALUE
RECEIVED, the undersigned does hereby assign and transfer
to                      ,
Federal Identification No.            
, a warrant to
             the
common shares of FOSTER WHEELER AG, a Swiss company, represented by warrant
certificate no.                    ,
standing in the name of the undersigned on the books of said company.  The undersigned does hereby irrevocably
constitute and appoint
                 ,
attorney to transfer the warrants of said company, with full power of
substitution in the premises.

 

	
   

  	
  Dated:

  
	
   

  	
   

  
	
   

  	
  (Name of Registered Holder)

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

A-6

 

Exhibit B

 

Form of Exercise Notice

 

To:                              Foster
Wheeler AG

formerly registered under the name “Foster Wheeler Holdings AG”

c/o Foster Wheeler Inc.

Perryville Corporate Park

Clinton, New Jersey 08809-4000

(the “Company”)

 

and

 

[Swiss Bank]

[·]

(the “Swiss Agent”)

 

From:      Warrant Agent

Mellon Investor Services LLC

Newport Office Center VII

480 Washington Blvd.

Jersey City, New Jersey 07310

(the “Warrant Agent”)

 

The Warrant Agent in relation to the Warrants
under the Supplemental Warrant Agreement, dated as of February 9, 2009,
between Foster Wheeler AG, Foster Wheeler Ltd. and Mellon Investor Services
LLC, as Warrant Agent (the “Supplemental Warrant
Agreement”)

 

1.                                       herewith
informs the Company that on [•] [specify date(s)] it has received Forms
of Election to Purchase in relation to the Warrants exercisable into registered
shares, nominal value CHF 3.00 per share, of Foster Wheeler AG (“Shares”), such number of Forms of
Election to Purchase relating to the exercise of an aggregate number of
[•] Warrants (which corresponds to an aggregate number of [•]
Shares*) and presents this Exercise Notice to the Company for the issuance out
of the Company’s conditional share capital as set forth in Article 5 of
its Articles of Association of [•]* Shares at the exercise price of
$[•] per Share; and

 

* In
accordance with the Supplemental Warrant Agreement and Swiss law, only whole
Shares shall be issued.  Any fractional
amounts here indicated shall be settled in cash by the Company and disregarded
by the Swiss Agent.

 

B-1

 

2.                                       confirms
that it has paid by wire transfer the aggregate amount of USD [•] to the
following account of the Swiss Agent:

 

[banking details [BANK], [Address] (SIC [•]; A/C [•])

 

	
  Warrant Agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  by:

  	
   

  	
  by:

  

 

B-2

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