Document:

exv4w6

Exhibit 4.6

NEWPARK RESOURCES, INC.

2006 EQUITY INCENTIVE PLAN

(As Amended and Restated Effective June 10, 2009)

1. Purpose.

The Newpark Resources, Inc. 2006 Equity Incentive Plan is intended to assist Newpark Resources,
Inc., a Delaware corporation (the “Company”), in attracting, retaining and motivating
designated Employees of the Company and its Subsidiaries and to increase their interest in the
success of the Company in order to promote the Company’s long-term interests. The Plan is designed
to meet this intent by providing eligible Employees with a proprietary interest in pursuing the
long-term growth, profitability and financial success of the Company.

2. Definitions.

In addition to the terms defined elsewhere in the Plan, Exhibit A, which is incorporated by
reference, defines terms used in the Plan and sets forth certain operational rules related to those
terms.

3. Administration of the Plan.

3.1 General. The Plan shall be administered by the Compensation Committee. Each member of
the Compensation Committee shall be a “non-employee director” as that term is defined in Rule
16b-3, an “outside director” within the meaning of Section 162(m) and an “independent director”
under the corporate governance rules of any stock exchange or similar regulatory authority on which
the Common Stock is then listed, but no action of the Committee shall be invalid if this
requirement is not met. The Compensation Committee shall select one of its members as Chairman and
shall act by vote of a majority of the members present at a meeting at which a quorum is present or
by unanimous written consent. A majority of the members of the Compensation Committee shall
constitute a quorum. The Compensation Committee shall be governed by the provisions of the
Company’s Bylaws and of Delaware law applicable to the Board of Directors, except as otherwise
provided herein or determined by the Board of Directors. The Committee’s decisions and
determinations under the Plan need not be uniform and may be made selectively among Participants,
whether or not the Participants are similarly situated.

3.2 Authority of the Compensation Committee. The Compensation Committee shall have full
discretionary power and authority, subject to the general purposes, terms and conditions of the
Plan, to implement, carry out and administer the Plan. Without limiting the generality of the
foregoing, the Compensation Committee shall have the authority to:

(a) interpret and administrator the Plan, any Award Agreement and any other agreement or document
executed pursuant to the Plan;

(b) adopt, amend, modify or rescind rules, procedures and forms relating to the Plan;

 

 

(c) select persons to receive Awards;

(d) determine the number of Shares subject to Awards, the Fair Market Value of the Common Stock
and the other terms and conditions of each Award (which need not be uniform), including, without
limitation, the type of Award to be granted, vesting schedules, forfeiture restrictions and other
terms and conditions relating to the exercisability of Awards, and all other provisions of each
Award Agreement;

(e) determine whether Awards will be granted singly, in combination, or in tandem with, in
replacement of, or as alternatives to, other Awards under the Plan or any other incentive or
compensation plan of the Company or any Subsidiary;

(f) grant waivers of Plan or Award conditions and remove or adjust any restrictions or conditions
upon Awards, including accelerating or otherwise modifying the date on which any Award becomes
vested, exercisable or transferable and extending the term of any Award (subject to the maximum
term limitations set forth in the Plan), including extending the period following the termination
of a Participant’s employment during which any Award may remain outstanding or be exercised;
provided, however, that the Compensation Committee shall not have discretion to accelerate or
waive any term or condition of an Award (i) if such discretion would cause the Award to have
adverse tax consequences to the Participant under Section 409A of the Code or (ii) if the Award
is intended to qualify as “performance-based compensation” for purposes of Section 162(m) of the
Code, and such discretion would cause the Award not to so qualify;

(g) with the consent of the Optionee, amend or terminate any outstanding Award Agreement;

(h) correct any defect, supply any omission or reconcile any inconsistency in the Plan, any Award
or any Award Agreement;

(i) determine whether an Award has been earned; and

(j) make any other determination and take any other action that the Compensation Committee deems
necessary or desirable for administration of the Plan.

All decisions, determinations and other actions of the Compensation Committee made or taken in
accordance with the terms of the Plan shall be final and conclusive and binding upon all parties
having an interest therein.

3.3 Delegation of Authority. Any of the powers and responsibilities of the Compensation
Committee may delegated to any subcommittee, in which case the acts of the subcommittee shall be
deemed to be acts of the Compensation Committee hereunder. In addition, the Compensation Committee
may delegate to one or more officers or Employees of the Company or any Subsidiary the authority,
subject to such terms as the Compensation Committee shall determine, to perform such functions,
including administrative functions, as the Compensation Committee may determine, provided that in
no case shall any such officer or Employee be authorized to take any action that would (a) result
in the loss of an exemption under Rule 16b-3 for Awards granted to Section 16 Insiders, (b) cause
Awards intended to qualify as “performance-based compensation” under Section 162(m) to fail to so
qualify, or (c) be inconsistent with Section 157 and other applicable provisions of the Delaware
General Corporation Law. Any action taken by any such officer or Employee within the scope of the
authority delegated by the Compensation Committee shall be deemed for all purposes to have been
taken by the Compensation Committee, and, except as otherwise specifically provided, references in
the Plan to the Compensation Committee shall

 

 

include any such officer or Employee. The Compensation Committee and, to the extent it so provides,
any subcommittee, shall have sole authority to determine whether to review any actions or
interpretations of any such officer or Employee, and if the Compensation Committee shall decide to
conduct such a review, any such actions or interpretations of any such officer or Employee shall be
subject to approval, disapproval or modification by the Compensation Committee.

3.4 Monitoring Awards. Notwithstanding any delegation of authority by the Compensation
Committee, it shall maintain control of the operation of the Plan. At least annually, the
Compensation Committee, in conjunction with the Audit Committee of the Board of Directors of the
Company, shall conduct or cause the conduct of an audit of the operation of the Plan to verify that
the Plan has been operated and Awards have been documented and maintained by the officers of the
Company in accordance with the directions of the Compensation Committee. Without limiting the
generality of the foregoing, one of the purposes of such an audit will be to determine that the
executed Award Agreements are consistent with the Awards made by the Committee and properly reflect
the names of the Participants to whom such Awards were granted, the applicable Dates of Grant,
vesting provisions and expiration dates, the type and quantity of Awards granted to each
Participant and, if applicable, the applicable exercise prices.  

3.5 Limitation on Liability.

3.5.1 The Compensation Committee may employ attorneys, consultants, accountants, agents and other
persons, and the Compensation Committee shall be entitled, in good faith, to rely and act upon the
advice, opinions and valuations of any such persons. In addition, the Compensation Committee shall
be entitled, in good faith, to rely and act upon any report or other information furnished to it by
any officer, director or Employee of the Company.

3.5.2 No member of the Compensation Committee, nor any person acting pursuant to authority
delegated by the Compensation Committee, nor any officer, director or Employee of the Company
acting at the direction or on behalf of the Compensation Committee, shall be liable for any action,
omission or determination relating to the Plan, and the Company shall, to the fullest extent
permitted by law, indemnify and hold harmless each member of the Compensation Committee, each
person acting pursuant to authority delegated by the Compensation Committee, and each other
officer, director or Employee of the Company to whom any duty or power relating to the
administration or interpretation of the Plan has been delegated against any cost, expense
(including counsel fees), liability or other pecuniary loss (including any sum paid in settlement
of a claim with the approval of the Compensation Committee) arising out of any action, omission or
determination relating to the Plan, unless, in either case, such action, omission or determination
was taken or made by such member, director, Employee or other person in bad faith and without
reasonable belief that it was in the best interests of the Company.

4. Number of Shares Issuable in Connection with Awards.

4.1 Shares Subject to the Plan. The maximum number of Shares that may be issued in
connection with Awards granted under the Plan is 5,000,000, and the number of Shares that
are subject to Awards outstanding at any one time under the Plan may not exceed the number of
Shares that then remain available for issuance under the Plan. The maximum number of Shares that
may be issued in connection with Incentive Stock Options granted under the Plan is
5,000,000. The Company at all times shall reserve and keep available sufficient Shares to
satisfy the requirements of the Plan. Shares issued under the Plan may be either authorized and
unissued shares or treasury shares.

 

 

4.2 Share Counting Rules. For purposes of Section 4.1, the following Shares shall not be
considered to have been issued under the Plan: (a) Shares remaining under an Award that terminates
without having been exercised in full; (b) Shares that have been forfeited in accordance with the
terms of the applicable Award; and (c) Shares withheld, in satisfaction of the grant or exercise
price or tax withholding requirements, from Shares that would otherwise have been delivered
pursuant to an Award. In addition, to the extent permitted by Applicable Laws, Shares subject to
Awards issued in assumption of, or in substitution for, any outstanding awards of any entity
acquired in any form of business combination by the Company or any of its Subsidiaries shall not be
counted against the Shares available for issuance pursuant to the Plan.

4.3 Individual Award Limits. The maximum number of Shares that may be covered by Options
and Stock Appreciation Rights (in the aggregate) granted under the Plan to any single Participant
in any calendar year shall not exceed 200,000, and the maximum number of Shares that may be covered
by all other Awards (in the aggregate) granted under the Plan to any single Participant in any
calendar year shall not exceed 100,000. This limitation shall be applied and construed consistently
with Section 162(m).

4.4 Adjustments. The limits provided for in this Section 4 shall be subject to adjustment
as provided in Section 15.

5. Eligibility and Participation.

The Compensation Committee will select Participants from among those Employees who, in the opinion
of the Compensation Committee, are in a position to make significant contributions to the long-term
performance and growth of the Company and its Subsidiaries. In addition, the Compensation Committee
may grant Awards in connection with the engagement of an Employee who is expected to make
significant contributions to the long-term performance and growth of the Company, provided that a
prospective Employee may not receive any payment or exercise any right relating to an Award until
such person’s employment with the Company has commenced. An Employee on leave of absence may be
considered as still in the employ of the Company for purposes of eligibility for participation in
the Plan, if so determined by the Compensation Committee. Directors of the Company and its
Subsidiaries who are not also employees of the Company or a Subsidiary shall not be eligible to
receive Awards under the Plan.

6. Award Agreements.

Each Award granted under the Plan shall be evidenced by an Award Agreement in a form approved by
the Compensation Committee. Each Award Agreement shall be subject to all applicable terms and
conditions of the Plan, shall include such terms and conditions as the Compensation Committee deems
appropriate, consistent with the provisions of the Plan, and shall be executed by the Participant
and a person designated by the Compensation Committee.

7. Options.

7.1 Grant of Options. The Compensation Committee may grant Options in such amounts, at
such times and to such Employees as the Compensation Committee, in its discretion, may determine in
accordance with the eligibility criteria set forth in Section 5. The Compensation Committee shall
designate at the time of grant whether the Option is intended to constitute an Incentive Stock
Option or a Nonstatutory Option.

 

 

7.2 Option Price. The Option Price of the Shares subject to each Option shall be
determined by the Compensation Committee, but shall not be less than the Fair Market Value of the
Common Stock on the Date of Grant, except in the case of replacement or substitute Options issued
by the Company in connection with an acquisition or other corporate transaction.

7.3 Option Period. The Award Agreement shall specify the term of each Option. The term
shall commence on the Date of Grant and shall be 10 years or such shorter period as is determined
by the Compensation Committee. Each Option shall provide that it is exercisable over its term from
the Date of Grant or over time in such periodic installments, or based on the satisfaction of such
criteria (including, without limitation, upon the satisfaction of Performance Criteria), as the
Committee in its discretion may determine. The vesting provisions for Options granted under the
Plan need not be uniform. Unless the Committee otherwise determines at the time of grant, if an
Option is subject to vesting in periodic installments and a Participant shall not in any period
purchase all of the Shares that the Participant is entitled to purchase in such period, the
Participant may purchase all or any part of such Shares at any time prior to the expiration of the
Option.

7.4 Exercise of Options. Each Option may be exercised in whole or in part (but not as to
fractional shares) by the delivery of an executed Notice of Exercise in the form prescribed from
time to time by the Compensation Committee, accompanied by payment of the Option Price and any
amounts required to be withheld for tax purposes under Section 14. If an Option is exercised by any
person other than the Participant, the Compensation Committee may require satisfactory evidence
that the person exercising the Option has the right to do so. The Compensation Committee may
require any partial exercise of an Option to equal or exceed a specified minimum number of Shares.

7.5 Payment of Exercise Price. The Option Price shall be paid in full in cash or by check
acceptable to the Compensation Committee or, if and to the extent permitted by the Compensation
Committee, (a) through the delivery of Shares which have been outstanding for at least six months
or such other minimum period as may be required by applicable accounting rules to avoid a charge to
the Company’s earnings for financial reporting purposes (unless the Compensation Committee approves
a shorter period) and which have a Fair Market Value on the date the Option is exercised equal to
the Option Price, (b) to the extent permitted by Applicable Laws, by a Cashless Exercise, or (c) by
any combination of the foregoing permissible forms of payment.

7.6 Employment Requirements. Unless otherwise provided by the Compensation Committee and
except as otherwise provided in Section 7.7, an Option may not be exercised unless from the Date of
Grant to the date of exercise the Participant remains continuously in the employ of the Company.
The Compensation Committee shall determine, in its discretion in the particular case and subject to
any requirements of Applicable Laws, whether and to what the extent the period of continuous
employment shall be deemed to include any period in which the Participant is on leave of absence
with the consent of the Company. Unless the Compensation Committee expressly provides otherwise, a
Participant’s service as an Employee with the Company will be deemed to have ceased upon
termination of the Participant’s employment with the Company and its Subsidiaries (whether or not
the Participant continues in the service of the Company or its Subsidiaries in some capacity other
than that of an Employee). Notwithstanding the foregoing, solely with respect to any Award that is
subject to Section 409A of the Code, a Participant shall be considered to have terminated
employment with the Company and its Subsidiaries only when the Participant incurs a “separation
from service” with respect to the Company and its
Subsidiaries within the meaning of Section 409A(a)(2)(A)(i) of the Code and applicable
administrative guidance issued thereunder.

 

 

7.7 Exercise of Options on Termination of Employment.

7.7.1 Unless otherwise provided by the Compensation Committee, upon the termination of a
Participant’s employment with the Company and its Subsidiaries by reason of death or Disability,
(a) all Options then held by the Participant, to the extent exercisable on the date of termination
of employment, shall remain in full force and effect and may be exercised pursuant to the
provisions thereof at any time until the earlier of the end of the fixed term thereof and the
expiration of 12 months following termination of the Participant’s employment, and (b) all Options
then held by the Participant, to the extent not then presently exercisable, shall terminate as of
the date of such termination of employment and shall not be exercisable thereafter.

7.7.2 Unless otherwise provided by the Compensation Committee, upon the termination of the
Participant’s employment with the Company and its Subsidiaries for any reason other than the
reasons set forth in Section 7.7.1 or a termination for Cause, (a) all Options then held by the
Participant, to the extent exercisable on the date of termination of employment, shall remain in
full force and effect and may be exercised pursuant to the provisions thereof at any time until the
earlier of the end of the fixed term thereof and the expiration of 90 days following termination of
the Participant’s employment (except that the 90-day period shall be extended to 12 months from the
date of termination if the Participant shall die during such 90-day period), and (b) all Options
then held by the Participant, to the extent not then presently exercisable, shall terminate as of
the date of such termination of employment and shall not be exercisable thereafter.

7.7.3 Unless otherwise provided by the Compensation Committee, in the event of a
Participant’s termination for Cause, all Options held by the Participant, whether vested or not,
shall terminate concurrently with the first discovery by the Company of any reason for the
Participant’s termination for Cause and shall not be exercisable thereafter. If an Participant’s
employment with the Company or any Subsidiary is suspended pending an investigation of whether
there shall be a termination for Cause, all of the Participant’s rights under any Options then held
by the Participant, including, without limitation, the right to exercise such Options, shall
likewise be suspended during such period of investigation.

7.8 Incentive Stock Options. Incentive Stock Options shall be subject to the following
additional provisions:

7.8.1 The aggregate Fair Market Value (determined as of the Date of Grant) of the Common Stock with
respect to which Incentive Stock Options are exercisable for the first time by any individual
Participant during any one calendar year (under all plans of the Company and any parent or
Subsidiary) may not exceed the maximum amount permitted under Section 422 of the Code (currently
$100,000). To the extent any Incentive Stock Option would exceed this limit, the portion of the
Option in excess of such limit shall be treated as a Non-Qualified Stock Option for all purposes.
The provisions of this Section 7.8.1 shall be construed and applied in accordance with Section
422(d) of the Code and the regulations promulgated thereunder.

7.8.2 No Incentive Stock Option may be granted to a Participant if, at the time of the proposed
grant, the Participant owns stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company or of any parent or Subsidiary of the Company, unless (a) the
Option Price is at least 110% of the Fair Market Value of a share of Common Stock on the
Date of Grant, and (b) the Incentive Stock Option is not exercisable after the expiration of five
years from the Date of Grant.

 

 

7.8.3 If a Participant sells or otherwise disposes of any Shares acquired pursuant to the exercise
of an Incentive Stock Option on or before the later of (a) the date two years after the Date of
Grant of the Incentive Stock Option, and (b) the date one year after the exercise of the Incentive
Stock Option (in either case, a “Disqualifying Disposition”), the Participant shall notify
the Company in writing of the Disqualifying Disposition within 10 days of the date thereof. In the
event of a Disqualifying Disposition, the Option will not qualify for incentive stock option
treatment.

7.8.4 If the Compensation Committee exercises its discretion to permit an Incentive Stock Option to
be exercised by a Participant more than three months after the termination of a Participant’s
employment for any reason other than death or Disability, the Incentive Stock Option will
thereafter be treated as a Non-Qualified Stock Option for all purposes. For purposes of this
Section 7.8.4, a Participant’s employment will be treated as continuing uninterrupted during any
period that the Participant is on military leave, sick leave or another approved leave of absence
if the period of leave does not exceed 90 consecutive days, unless reemployment on the expiration
of such leave is guaranteed by statute or by contract.

7.8.5 Any Option which is designated by the Compensation Committee as an Incentive Stock Option but
fails, for any reason, to meet the requirements for Incentive Stock Option treatment shall be
treated for tax purposes as a Non-Qualified Stock Option.

7.9 Additional Terms and Conditions. Each Option, and any shares of Common Stock issued
in connection with an Option, shall be subject to such additional terms and conditions not
inconsistent with the Plan as are determined by the Compensation Committee and set forth in the
applicable Award Agreement.

8. Restricted Stock.

8.1 Grant of Restricted Stock. The Compensation Committee may offer Awards of Restricted
Stock in such amounts, at such times and to such Employees as the Compensation Committee, in its
discretion, may determine in accordance with the eligibility criteria set forth in Section 5.

8.2 Purchase Price. The purchase price of the Shares subject to a Restricted Stock Award
shall be determined by the Compensation Committee and may be less than the Fair Market Value (but
not less than the par value) of the Shares on the Date of Grant. Without limiting the generality of
the foregoing, the Compensation Committee may determine that eligible Employees may be issued
Restricted Stock in consideration for past services actually rendered to the Company and its
Subsidiaries having a value of not less than the par value of the Shares subject to the Award. The
Committee shall determine the methods by which the purchase price may be paid or deemed paid and
the form of payment.

8.3 Award Agreement; Acceptance by Participant. Promptly following the grant of each
Restricted Stock Award, the Compensation Committee shall cause to be delivered to the applicable
Participant an Award Agreement that evidences the Award. The Participant shall accept the Award by
signing and delivering to the Company his or her Award Agreement, accompanied by full payment of
the purchase price, within 30 days from the date the Award Agreement was delivered to the
Participant. If the Participant does not so accept the Restricted Stock Award within such 30-day
period, then the offer of the Award shall terminate unless the Compensation Committee otherwise
determines.

 

 

8.4 Restrictions. At the time of grant of each Restricted Stock Award, the Compensation
Committee shall determine the Restriction Period that will apply to the Award and the forfeiture
and vesting restrictions, restrictions on transferability and other restrictions (including,
without limitation, limitations on the right to vote Restricted Stock or the right to receive
dividends on Restricted Stock) that will apply to the Award during the Restriction Period. These
restrictions may lapse separately or in combination at such times, under such circumstances
(including based on achievement of Performance Criteria or future service requirements or both), in
such installments or otherwise, as the Compensation Committee may determine in its discretion.

8.5 Forfeiture. Except as otherwise determined by the Compensation Committee, upon
termination of the Participant’s employment during the applicable Restriction Period, Restricted
Stock that is at that time subject to restrictions shall be forfeited and reacquired by the Company
or shall be subject to a repurchase option in favor of the Company, as may be specified in the
Award Agreement; provided, however, that, the Compensation Committee, in its discretion, may (a)
provide in any Award Agreement that restrictions or forfeiture conditions relating to Restricted
Stock will be waived in whole or in part in the event of terminations resulting from specified
causes, and (b) in other cases waive in whole or in part restrictions or forfeiture conditions
relating to Restricted Stock.

8.6 Stock Certificates. Restricted Stock granted under the Plan may be evidenced in such
manner as the Compensation Committee shall determine. If certificates representing Restricted Stock
are registered in the name of the Participant, the Compensation Committee may require that such
certificates bear an appropriate legend referring to the terms, conditions and restrictions
applicable to such Restricted Stock, that the Company retain physical possession of the
certificates, and that the Participant deliver a stock power to the Company, endorsed in blank,
relating to the Restricted Stock.

8.7 Dividend Rights. Unless otherwise set forth in the Award Agreement, (a) any regular
cash dividends declared and paid with respect to Shares subject to a Restricted Stock Award shall
be paid to the Participant at the same time they are paid to all other stockholders of the Company,
and (b) Shares distributed in connection with a stock split or stock dividend, and any other cash
or property (including securities of the Company or other issuers) distributed as a dividend (other
than regular cash dividends), shall be subject to restrictions and forfeiture conditions to the
same extent as the Restricted Stock with respect to which such Shares, cash or other property have
been distributed, and all references to Restricted Stock in the Plan or the applicable Award
Agreement shall be deemed to include such Shares, cash or other property.

8.8 Voting Rights. Unless otherwise set forth in the Award Agreement, all voting rights
appurtenant to the Shares subject to a Restricted Stock Award shall be exercised by the
Participant.

8.9 Termination of the Restriction Period. Upon satisfaction of the terms and conditions
specified in the Award Agreement that apply to a Restriction Period, (a) the Participant shall be
entitled to have the legend referred to in Section 8.6 removed from his or her shares of Restricted
Stock after the last day of the Restriction Period, and (b) if the Company has retained possession
of the certificates representing the shares of Restricted Stock, the Company shall promptly deliver
such certificates to the Participant. If the terms and conditions specified in the Award Agreement
that apply to a Restriction Period have not been satisfied, the Restricted Stock subject to the
Award shall be forfeited and reacquired by the Company or shall be subject to a repurchase option
in favor of the Company, as may be specified in the Award Agreement

 

 

8.10 Additional Terms and Conditions. Each Award of Restricted Stock, and all Shares of
Restricted Stock granted or offered for sale hereunder, shall be subject to such additional terms
and conditions not inconsistent with the Plan as are prescribed by the Compensation Committee and
set forth in the applicable Award Agreement.

9. Restricted Stock Units.

9.1 Grant of Restricted Stock Units. The Compensation Committee may make Awards of
Restricted Stock Units in such amounts, at such times and to such Employees as the Compensation
Committee, in its discretion, may determine in accordance with the eligibility criteria set forth
in Section 5. A Participant granted Restricted Stock Units shall not have any of the rights of a
stockholder with respect to the Shares subject to an Award of Restricted Stock Units, including any
right to vote or to receive other distributions on the Shares, until certificates for the Shares
subject to the Award shall have been issued in the Participant’s name in accordance with the terms
of the applicable Award Agreement.

9.2 Vesting and Other Terms. At the time of grant of each Award of Restricted Stock
Units, the Compensation Committee shall determine the Restriction Period that will apply to the
Award. During the Restriction Period, Restricted Stock Units shall be subject to such restrictions
on transferability, risk of forfeiture and other restrictions as the Compensation Committee may
impose, which restrictions may lapse separately or in combination at such times, under such
circumstances (including based on achievement of Performance Criteria or future service
requirements or both), in such installments or otherwise as the Committee may determine in its
discretion. If the terms and conditions specified in the Award Agreement have not been satisfied by
the end of the Restriction Period, the Restricted Stock Units subject to the Restriction Period
shall become null and void, and the Participant shall forfeit all rights with respect to such
Award.

9.3 Termination of Employment. Except as otherwise determined by the Compensation
Committee, upon termination of the Participant’s employment during the applicable Restriction
Period, Restricted Stock Units that are at that time subject to restrictions shall be null and
void, and the Participant shall forfeit all rights with respect to such Awards.

9.4 Settlement. On the vesting date or dates of the Award, the Company shall, subject to
the terms of the Plan and the Award Agreement, transfer to the Participant one Share for each
Restricted Stock Unit scheduled to be paid out on such date and not previously forfeited. The
Compensation Committee shall specify in the Award the purchase price, if any, to be paid by the
Participant to the Company for such Shares and shall determine the methods by which the purchase
price may be paid or deemed paid and the form of payment.

9.5 Additional Terms and Conditions. Each Award of Restricted Stock Units, and all Shares
issued in settlement of Restricted Stock Units, shall be subject to such additional terms and
conditions not inconsistent with the Plan as are prescribed by the Compensation Committee and set
forth in the applicable Award Agreement.

10. Stock Appreciation Rights.

10.1 Grant of Stock Appreciation Rights. The Compensation Committee may make Awards of
Stock Appreciation Rights in such amounts, at such times and to such Employees as the Compensation
Committee, in its discretion, may determine in accordance with the eligibility criteria set forth
in Section 5. If a Stock Appreciation Right is granted to a Section 16(b) Insider, the Award
Agreement shall incorporate all the terms and conditions at the time necessary to
assure that the subsequent exercise of the Stock Appreciation Right shall qualify for the
safe-harbor exemption from short-swing profit liability provided by Rule 16b-3.

 

 

10.2 General Terms. A Stock Appreciation Right shall confer on the Participant the right
to receive in Shares, cash or a combination thereof (as may be determined by the Compensation
Committee in its discretion) the value equal to the excess of the Fair Market Value of one Share on
the date of exercise over the exercise price for the Stock Appreciation Right, with respect to
every Share for which the Stock Appreciation Right is granted (the “SAR Settlement Value”).
At the time of grant, the Stock Appreciation Right must be designated by the Compensation Committee
as either a tandem Stock Appreciation Right or a stand-alone Stock Appreciation Right and, if not
so designated, shall be deemed to be a stand-alone Stock Appreciation Right. A tandem Stock
Appreciation Right is a Stock Appreciation Right that is granted in tandem with an Option and only
may be granted at the same time as the Option to which it relates. The exercise of a tandem Stock
Appreciation Right shall cancel the related Option for a like number of Shares, and the exercise of
the related Option similarly shall cancel the tandem Stock Appreciation Right for a like number of
Shares. Tandem Stock Appreciation Rights shall, except as specifically set forth in this Section 10
or in the applicable Award Agreement, be subject to the same terms and conditions as apply to the
related Option. Stand-alone Stock Appreciation Rights shall, except as specifically set forth in
this Section 10 or in the applicable Award Agreement, be subject to the same terms and conditions
generally applicable to Nonstatutory Stock Options as set forth in Section 7.

10.3 Exercise Price. The exercise price of each Stock Appreciation Right shall be
determined by the Compensation Committee, but shall not be less than the Fair Market Value of the
Common Stock on the Date of Grant.

10.4 Other Terms. The Compensation Committee shall determine the term of each Stock
Appreciation Right. The term shall commence on the Date of Grant and shall be 10 years or such
shorter period as is determined by the Compensation Committee. The Compensation Committee also
shall determine the time or times at which and the circumstances under which a Stock Appreciation
Right may be exercised in whole or in part, the method of exercise, the method of settlement and
the form of consideration payable in settlement. The Compensation Committee may provide for Stock
Appreciation Rights to become exercisable at one time or from time to time, periodically or
otherwise (including, without limitation, upon the satisfaction of Performance Criteria), as to
such number of Shares or percentage of the Shares subject to the Stock Appreciation Right as the
Compensation Committee determines.

10.5 Exercise. Each Stock Appreciation Right may be exercised in whole or in part (but
not as to fractional shares) by the delivery of an executed Notice of Exercise in the form
prescribed from time to time by the Compensation Committee, accompanied by payment of any amounts
required to be withheld for tax purposes under Section 14. If a Stock Appreciation Right is
exercised by any person other than the Participant, the Compensation Committee may require
satisfactory evidence that the person exercising the Option has the right to do so. Upon the
exercise of a Stock Appreciation Right, the Participant shall be entitled to receive the SAR
Settlement Value from the Company for each Share as to which the Stock Appreciation Right has been
exercised. The Company shall pay the SAR Settlement Value in Shares valued at Fair Market Value on
the exercise date, in cash or any combination thereof, as determined by the Compensation Committee.
The Compensation Committee may permit a Participant to elect to defer receipt of payment of all or
part of the SAR Settlement Value pursuant to such rules and regulations as may be adopted by the
Compensation Committee or as may be specified in the applicable Award
Agreement, provided any such deferral shall satisfy the requirements of Section 409A of the Code
and any regulations or rulings promulgated by the Internal Revenue Service thereunder.

 

 

10.6 Additional Terms and Conditions. Each Award of Stock Appreciation Rights, and all
Shares issued in settlement of Stock Appreciation Rights, shall be subject to such additional terms
and conditions not inconsistent with the Plan as are prescribed by the Compensation Committee and
set forth in the applicable Award Agreement.

11. Other Stock-Based Awards.

The Compensation Committee may grant to Employees equity-based or equity-related Awards not
otherwise described herein, alone or in tandem with other Awards, in such amounts and subject to
such terms and conditions as the Compensation Committee shall determine from time to time in its
sole discretion (“Other Stock-Based Awards”). Without limiting the generality of the
foregoing, Other Stock-Based Awards may (a) involve the transfer of restricted or unrestricted
shares of Common Stock to Participants, either at the time of grant or thereafter, or payment in
cash or otherwise of amounts based on the value of shares of Common Stock, (b) be subject to
performance-based or service-based conditions, (c) be granted as, or in payment of, a bonus, or to
provide incentives or recognize special achievements or contributions, (d) be designed to comply
with Applicable Laws of jurisdictions other than the United States, and (e) be designed to qualify
for the performance-based compensation exception under Section 162(m); provided, that each Other
Stock-Based Award shall be denominated in, or shall have a value determined by reference to, a
number of shares of Common Stock that is specified at the time of the grant of the Award. Cash
awards, as an element of or supplement to any other Award under the Plan, also may be granted
pursuant to this Section 11.

12. Performance Based Awards.

12.1 Performance Criteria. Awards made pursuant to the Plan may be made subject to the
attainment of performance goals relating to one or more business criteria (“Performance
Criteria”). For purposes of Awards that are intended to qualify for the performance-based
compensation exception under Section 162(m), the Performance Criteria shall (a) be objective
business criteria and otherwise meet the requirements of Section 162(m), including the requirement
that the level or levels of performance targeted by the Compensation Committee result in the
achievement of performance goals being “substantially uncertain,” and (b) relate to one or more of
the following performance measures: (i) revenues or net sales; (ii) earnings before or after
deduction for all or any portion of interest, taxes, depreciation, amortization or other items,
whether or not on a continuing operations or an aggregate or per share basis; (iii) return on
equity, investment, capital or assets; (iv) margins; (v) one or more operating ratios; (vi)
borrowing levels, leverage ratios or credit ratings; (vii) market share; (viii) capital
expenditures; (ix) cash flow; (x) stock price, growth in stockholder value relative to one or more
stock indices or total stockholder return; (xi) budget and expense management; (xii) working
capital turnover and targets; (xiii) sales of particular products or services, market penetration,
geographic expansion or new concept development; (xiv) customer acquisition, expansion and
retention; (xv) acquisitions and divestitures (in whole or in part), joint ventures, strategic
alliances, spin-offs, split-ups and the like; (xvi) reorganizations, recapitalizations,
restructurings and financings (debt or equity); (xvii) transactions that would constitute a Change
in Control; or (xviii) any combination of the foregoing. Performance Criteria measures, and targets
with respect thereto, determined by the Compensation Committee need not be based upon an increase,
a positive or improved result or avoidance of loss.

 

 

12.2 Additional Provisions Applicable to Performance Criteria. Any Performance Criteria
may be used to measure the performance of the Company as a whole or with respect to any business
unit, Subsidiary or business segment of the Company, either individually, alternatively or in any
combination, and may be measured either annually or cumulatively over a period of years, on an
absolute basis or relative to a pre-established target, to previous period results or to a
designated comparison group, in each case as specified by the Compensation Committee in the Award.
To the extent required by Section 162(m), prior to the payment of any compensation under an Award
intended to qualify as performance-based compensation under Section 162(m), the Compensation
Committee shall certify the extent to which any such Performance Criteria and any other material
terms under such Award have been satisfied (other than in cases where such Performance Criteria
relate solely to the increase in the value of the Common Stock). To the extent Section 162(m) is
applicable, the Compensation Committee may not in any event increase the amount of compensation
payable to a Participant subject to Section 162(m) upon the satisfaction of any Performance
Criteria.

12.3 Adjustments to Performance Criteria. The Compensation Committee may, with respect to
any Performance Period, make such adjustments to Performance Criteria as it may deem appropriate to
compensate for, or reflect, (a) asset write-downs or write-ups; (b) litigation, claims, judgments
or settlements; (c) the effect of changes in tax law, accounting principles or other laws or
provisions affecting reported results; (d) discontinued operations and divestitures; (e) mergers,
acquisitions and accruals for reorganization and restructuring programs; and (f) extraordinary or
other unusual or non-recurring item; provided, however, with respect to Awards intended to qualify
as performance-based compensation under Section 162(m), such adjustments shall be made only to the
extent that the Compensation Committee determines that such adjustments may be made without a loss
of deductibility of the compensation includible with respect to the Awards under Section 162(m).

12.4 Performance Periods. The attainment of Performance Criteria shall be measured over
performance periods of one year or more (“Performance Periods”), as may be established by
the Compensation Committee. Performance Criteria for any Performance Period shall be established
not later than the earlier of (a) 90 days after the beginning of the Performance Period, or (b) the
time 25% of the Performance Period has elapsed.

12.5 Right of Recapture. If, at any time after the date on which a Participant has been
granted or becomes vested in or paid an Award pursuant to the achievement of Performance Criteria,
the Compensation Committee determines that the earlier determination as to the achievement of the
Performance Criteria was based on incorrect data and that in fact the Performance Criteria had not
been achieved or had been achieved to a lesser extent than originally determined and a portion of
the Award would not have been granted, vested or paid given the correct data, then (a) any portion
of the Award that was so granted shall be forfeited and any related Shares (or, if such Shares were
disposed of, the cash equivalent) shall be returned to the Company, (b) any portion of the Award
that became so vested shall be deemed to be not vested and any related Shares (or, if such Shares
were disposed of, the cash equivalent) shall be returned to the Company, and (c) any portion of the
Award so paid to the Participant shall be repaid by the Participant to the Company upon notice from
the Company, in each case as and to the extent provided by the Compensation Committee.

12.6 Section 162(m). In the case of an Award intended to be eligible for the
performance-based compensation exception under Section 162(m), the Plan and such Award shall be
construed to the maximum extent permitted by law in a manner consistent with qualifying the Award
for such exception.

 

 

13. Restrictions on Transfer.

13.1 Restrictions on Transfer. Subject to the further provisions of this Section 13.1,
Awards may not be transferred other than by will or by the laws of descent and distribution, and
during a Participant’s lifetime an Award requiring exercise may be exercised only by the
Participant (or in the event of the Participant’s incapacity, the person or persons legally
appointed to act on the Participant’s behalf). No Award or any interest therein shall be subject to
attachment, execution, garnishment, sequestration, the laws of bankruptcy or any other legal or
equitable process. The foregoing notwithstanding, Awards (other than Incentive Stock Options and
Stock Appreciation Rights granted in tandem therewith) may be transferred to one or more
transferees during the lifetime of the Participant, and may be exercised by such transferees in
accordance with the terms of such Award, but only if and to the extent such transfers are permitted
by the Compensation Committee in its discretion, subject to any terms and conditions which the
Committee may impose thereon. If a transfer is approved by the Compensation Committee, the transfer
shall only be effective upon written notice to the Company given in such form and manner as may be
prescribed by the Compensation Committee. Anything herein to the contrary notwithstanding,
transfers of an Award by a Participant for consideration are prohibited.

13.2 Designation and Change of Beneficiary. Each Participant may file with the
Compensation Committee a written designation of one or more persons as the beneficiary who shall be
entitled to receive the rights or amounts payable with respect to an Award due under the Plan upon
the Participant’s death. A Participant may, from time to time, revoke or change his or her
beneficiary designation without the consent of any prior beneficiary by filing a new designation
with the Compensation Committee. The last such designation received by the Compensation Committee
shall be controlling; provided, however, that no designation, or change or revocation thereof,
shall be effective unless received by the Compensation Committee prior to the Participant’s death,
and in no event shall it be effective as of a date prior to such receipt. If no beneficiary
designation is filed by the Participant, the beneficiary shall be deemed to be the Participant’s
estate.

13.3 Provisions Applicable to Transferees. A beneficiary, transferee or other person
claiming any rights under the Plan from or through any Participant shall be subject to all terms
and conditions of the Plan and any Award Agreement or other document applicable to the Participant,
except as otherwise determined by the Compensation Committee, and to any additional terms and
conditions deemed necessary or appropriate by the Compensation Committee. The Compensation
Committee shall have full and exclusive authority to interpret and apply the provisions of the Plan
to transferees to the extent not specifically addressed herein.

14. Withholding and Other Tax Provisions.

14.1 Withholding. The Company may require the Participant to pay to the Company the
amount of any taxes that the Company is required by applicable federal, state, foreign, local or
other law to withhold with respect to the grant, vesting, exercise or settlement of an Award. The
Company shall not be required to issue any Shares under the Plan until such obligations are
satisfied in full. The Compensation Committee may, in its sole and absolute discretion in the
particular case, permit or require a Participant to satisfy his or her tax withholding obligations
by any of the following means (or a combination of any of the following means): (a) by paying cash
to the Company, (b) by having the Company withhold a number of Shares that would otherwise be
issued to the Participant (or become vested in the case of Restricted Shares) having a Fair Market
Value equal to the tax withholding obligations, (c) surrendering a number of Shares the Participant
already owns having a Fair Market Value equal to the tax withholding obligations, or

 

 

(d) entering into such other arrangement as is acceptable to the Compensation Committee in its sole
discretion. The value of any Shares withheld or surrendered may not exceed the employer’s minimum
tax withholding obligation and, to the extent such Shares were acquired by the Participant from the
Company as compensation, the Shares must have been held for the minimum period required by
applicable accounting rules to avoid a charge to the Company’s earnings for financial reporting
purposes. The Company shall also have the right to deduct from any and all cash payments otherwise
owed to a Participant any federal, state, foreign, local or other taxes required to be withheld
with respect to the Participant’s participation in the Plan.

14.2 Required Consent to and Notification of Section 83(b) Election. No election under
Section 83(b) of the Code (to include in gross income in the year of transfer the amounts specified
in Section 83(b) of the Code) or under a similar provision of the laws of a jurisdiction outside
the United States may be made in connection with an Award unless expressly permitted by the terms
of the Award Agreement or by action of the Committee in writing prior to the making of such
election. In any case in which a Participant is so permitted to make such an election, the
Participant shall notify the Company of such election within 10 days of filing notice of the
election with the Internal Revenue Service or other governmental authority, in addition to any
filing and notification required pursuant to regulations issued under Section 83(b) of the Code or
other applicable provisions of any tax law.

15. Effect of Certain Corporate Changes and Changes in Control.

15.1 Basic Adjustment Provisions. In the event the Compensation Committee determines that
any stock dividend, stock split, combination of shares, extraordinary dividend of cash or assets,
merger, consolidation, spin-off, recapitalization (other than the conversion of convertible
securities according to their terms), reorganization, liquidation, dissolution or other similar
corporate change, or any other increase, decrease or change in the Common Stock without receipt or
payment of consideration by the Company, in the Compensation Committee’s sole discretion, affects
the Common Stock such that an adjustment to the Awards or the Plan is determined by the
Compensation Committee to be appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan or with respect to an
Award, then the Compensation Committee shall, in such manner as it may deem equitable, adjust any
or all of:

(a) The number and kind of shares of Common Stock (or other securities or property) with respect
to which an Award may be granted under the Plan (including, but not limited to, adjustments of
the limitations in Section 4.1 on the maximum number and kind of Shares which may be issued under
the Plan and the limitations in Section 4.3 on the maximum number of Shares that may be covered
by Awards granted under the Plan to any single Participant in any calendar year);

(b) The number and kind of shares of Common Stock (or other securities or property) subject to
outstanding Awards;

(c) The grant, exercise or other purchase price per Share under any outstanding Awards; and

(d) The terms and conditions of any outstanding Awards (including, without limitation, any
applicable Performance Criteria specified in an Award Agreement).

 

 

Notwithstanding the foregoing, (x) with respect to Incentive Stock Options, any such adjustments
shall be made in accordance with Section 424(h) of the Code, (b) the Committee shall consider
the impact of Section 409A of the Code on any such adjustments, and (z) no such adjustments may
materially change the value of benefits available to a Participant under a previously granted
Award.

15.2 Change in Control. The Compensation Committee may provide with respect to any
transaction that results in a Change in Control, either at the time an Award is granted or by
action taken prior to the occurrence of the Change in Control, that a Change in Control shall have
such effect as is specified by the Compensation Committee, or no effect, as the Compensation
Committee in its sole discretion may provide. Without limiting the foregoing, the Compensation
Committee may provide, either at the time an Award is granted or by action taken prior to the
occurrence of the Change in Control, and without the consent or approval of any Participant, for
one or more of the following actions or combination of actions with respect to some or all
outstanding Awards (which actions may vary among individual Participants and may be subject to such
terms and conditions as the Compensation Committee deems appropriate):

(a) Acceleration of the time at which Awards then outstanding vest and (as applicable) may be
exercised in full for a limited period of time on or before a specified date fixed by the
Compensation Committee (which will permit the Participant to participate with the Common Stock
received upon exercise of an Award in the Change in Control transaction), after which specified
date all unexercised Awards and all rights of Participants thereunder shall terminate;

(b) Acceleration of the time at which Awards then outstanding vest (and, in the case of Options,
Stock Appreciation Rights and other applicable Awards, may be exercised so that such Options,
Stock Appreciation Rights and other applicable Awards may be exercised in full for their then
remaining term);

(c) The assumption of Awards (or any portion thereof) by the successor or survivor corporation,
or a parent or Subsidiary thereof, or the substitution of awards covering the stock of the
successor or survivor corporation, or a parent or Subsidiary thereof, for then outstanding Awards
that have been issued under the Plan, with appropriate adjustments as to the number and kind of
shares and grant, exercise or other purchase prices;

(d) The mandatory surrender to the Company for cancellation of any outstanding Awards and the
purchase of the surrendered Awards for an amount of cash, securities or other property equal to
the excess of the Fair Market Value of the vested shares of Common Stock subject to any such
Award immediately prior to the occurrence of the Change in Control (and such additional portion
of the Award as the Compensation Committee may determine) over the aggregate exercise or other
purchase price (if any) of such shares; and

(e) The termination of any Award (or any portion thereof) concurrently with the closing or other
consummation of the Change in Control transaction. If the Compensation Committee provides that an
Award shall terminate concurrently with the closing or other consummation of the Change in
Control transaction, each Participant shall have the right up to the closing or other
consummation of the transaction to exercise all or any part of the Participant’s vested Awards.

15.3 Determination of Adjustments. All determination of the Compensation Committee
pursuant to this Section 15 shall be conclusive and binding on all persons for all purposes of the
Plan.

 

 

15.4 No Restriction on Right of Company to Effect Corporate Changes. The Plan shall not
affect in any way the right or power of the Company to make or authorize any adjustments,
recapitalizations, reorganizations or other changes in the Company’s capital structure or its
business, any merger or consolidation, any issue of stock or of options, warrants or rights to
purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights are
superior to or affect the Common Stock or the rights thereof or that are convertible into or
exchangeable for Common Stock, the dissolution or liquidation of the Company, any sale or transfer
of all or any part of the assets or business of the Company or any of its Subsidiaries, or any
other corporate act or proceeding, whether of a similar character or otherwise. Except as
specifically provided in this Section 15 and authorized by the Compensation Committee, a
Participant shall have no rights by reason of any such corporate act or proceeding, and no
adjustment by reason thereof shall be made with respect to any outstanding Award or the Plan.

16. Regulatory Compliance.

16.1 Conditions to Obligations of the Company. The Company may, to the extent deemed
necessary or advisable by the Compensation Committee, postpone the issuance or delivery of Shares
or the payment of other benefits under any Award until:

(a) The completion of any registration or other qualification of such Shares under any state or
federal securities law or under the rules and regulations of the Securities and Exchange
Commission or any other governmental regulatory body, which the Compensation Committee shall, in
its sole discretion, deem necessary or advisable;

(b) The admission to listing of, or other required action with respect to, such Shares on any and
all stock exchanges or automated quotation systems upon which the Common Stock or other
securities of the Company are then listed or quoted; and

(c) The compliance with all other requirements of Applicable Laws, as the Compensation Committee
shall, in its sole discretion, deem necessary or advisable;

The Compensation Committee also may require any Participant to make such representations, furnish
such information and comply with or be subject to such other conditions as the Compensation
Committee shall, in its sole discretion, deem necessary or advisable to comply with any
requirements of Applicable Laws in connection with the grant of any Award or the issuance or
delivery of Shares or the payment of other benefits under any Award. Without limiting the
generality of the foregoing, if the Shares offered for sale or sold under the Plan are offered or
sold pursuant to an exemption from registration under federal, state or foreign securities laws,
(x) the Company may require the Participant to represent and agree at the time of grant or
exercise, as the case may be, that such Shares are being acquired for investment, and not with a
view to the sale or distribution thereof, and to make such other representations as are deemed
necessary or appropriate by the Company and its counsel, and (y) the Company may restrict the
transfer of such Shares, issue stop-transfer instructions and legend the certificates representing
such Shares, in each case in such manner as it deems advisable to ensure the availability of any
such exemption.

16.2 Limitation on Company Obligations. The inability of the Company (after reasonable
efforts) to obtain authority from any regulatory body having jurisdiction, which authority is
deemed by the Company’s counsel to be necessary to the lawful issuance or sale of any Awards or
Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or
sell such Awards or Shares as to which such requisite authority shall not have been obtained.
Nothing contained herein shall be construed to impose on the Company any obligation to register for
offering or resale under the Securities Act, or to register or qualify under any other state,

 

 

federal or foreign securities laws, any Shares, securities or interests in a security paid or
issued under, or created by, the Plan, or to continue in effect any such registrations or
qualifications if made, and the Company shall have no liability for any inability or failure to do
so.

16.3 Provisions Applicable to a Change in Control. Anything in this Section 16 to the
contrary notwithstanding, in connection with a Change in Control, the Company shall not take or
cause to be taken any action, and shall not undertake or permit to arise any legal or contractual
obligation, that results or would result in any postponement of the issuance or delivery of Shares
or the payment of benefits under any Award or the imposition of any other conditions on such
issuance, delivery or payment, to the extent that such postponement or other condition would
represent a greater burden on a Participant than existed on the 90th day preceding the effective
date of the Change in Control.

16.4 Exchange Act. Notwithstanding anything contained in the Plan or any Award Agreement
to the contrary, if the consummation of any transaction under the Plan would result in the possible
imposition of liability on a Participant pursuant to Section 16(b) of the Exchange Act, the
Compensation Committee shall have the right, in its sole discretion, but shall not be obligated, to
defer such transaction to the extent necessary to avoid such liability.

17. Amendment or Termination of the Plan.

The Board of Directors may at any time and from time to time amend, suspend or terminate the Plan
in whole or in part; provided that no such amendment may, without the approval of the stockholders
of the Company, increase the number of shares of Common Stock that may be issued under the Plan
(except for adjustments pursuant to Section 15) or effectuate a change for which stockholder
approval is required: (a) in order for the Plan to continue to qualify under Section 422 of the
Code; (b) under the corporate governance standards of any national securities exchange or automated
quotation system applicable to the Company; or (c) for Awards to be eligible for the
performance-based compensation exception under Section 162(m). In addition, no termination or
amendment of the Plan shall materially alter or adversely affect the rights of any Participant in
any outstanding Awards, without the consent of the Participant to whom the Awards have been
granted.

18. Term of the Plan.

The Plan shall continue until terminated by the Board of Directors pursuant to Section 17 or as
otherwise set forth in the Plan, and no further Awards shall be made hereunder after the date of
such termination. Unless earlier terminated, the Plan shall terminate 10 years after its initial
approval by the Board of Directors (provided that Awards granted before termination shall continue
in accordance with their terms).

19. No Right to Awards or Continued Employment.

No person shall have any claim or right to receive grants of Awards under the Plan, and neither the
Plan nor any action taken or omitted to be taken hereunder shall create or confer on any
Participant the right to continued employment with the Company or its Subsidiaries or interfere
with or to limit in any way the right of the Company or its Subsidiaries to terminate the
employment of any Participant at any time or for any reason. The loss of any existing or potential
profit in Awards shall not constitute an element of damages in the event of the termination of the
employment of any Participant for any reason, even if the termination is in violation of an
obligation of the Company or its Subsidiaries to the Participant. No Participant shall have any
rights as a stockholder with respect to any Shares covered by or relating to any Award until the
date of the issuance of a stock certificate with respect to such Shares.

 

 

20. Effect of Plan Upon Other Awards and Compensation Plans.

Nothing in the Plan shall be construed to limit the right of the Company or any of its Subsidiaries
(a) to establish any other forms of incentives or compensation for Employees, or (b) to grant or
assume options, restricted stock or other equity-based awards otherwise than under the Plan in
connection with any proper corporate purpose, including, but not by way of limitation, the grant or
assumption of options, restricted stock or other awards in connection with the acquisition of the
business, securities or assets of any corporation, firm or business. The adoption of the Plan shall
not affect any other compensation or incentive plans in effect for the Company or any of its
Subsidiaries, and no payment under the Plan shall be taken into account in determining any benefits
under any pension, retirement, profit sharing, group insurance or other benefit plan of the Company
except as otherwise specifically provided in such other plan.

21. General Provisions.

21.1 Other Documents. All documents prepared, executed or delivered in connection with
the Plan shall be, in substance and form, as established and modified by the Compensation Committee
or by persons under its direction and supervision; provided, however, that all such documents shall
be subject in every respect to the provisions of the Plan, and in the event of any conflict between
the terms of any such document and the Plan, the provisions of the Plan shall prevail.

21.2 No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to
the Plan or any Award. The Compensation Committee shall determine whether cash or other property
shall be issued or paid in lieu of fractional shares of Common Stock or whether such fractional
shares of Common Stock and any rights thereto shall be forfeited or otherwise eliminated (including
by rounding to the nearest whole Share).

21.3 Payments in the Event of Forfeitures. Unless otherwise determined by the
Compensation Committee or otherwise specified in the applicable Award Agreement, in the event of
the forfeiture of an Award with respect to which a Participant paid cash consideration, the
Participant shall be repaid the amount of such cash consideration within 10 days of the date of
forfeiture or as soon thereafter as practicable.

21.4 Limitation on Repricing. The Compensation Committee shall not, without the approval
of the stockholders of the Company, amend or replace previously granted Options or Stock
Appreciation Rights in a transaction that constitutes a “repricing,” as such term is used in
Section 303A.08 of the Listed Company Manual of the New York Stock Exchange or the rules and
regulations of the Securities and Exchange Commission.

21.5 Misconduct of a Participant. Notwithstanding any other provision of the Plan or an
Award Agreement, if a Participant commits fraud or dishonesty toward the Company or wrongfully uses
or discloses any trade secret, confidential data or other information proprietary to the Company,
or intentionally takes any other action materially inimical to the best interests of the Company,
as determined by the Compensation Committee, in its sole and absolute discretion, such Participant
shall forfeit all rights and benefits under the Plan and any outstanding Awards.

 

 

21.6 Restrictive Legends. The certificates for Shares delivered under the Plan shall
include such legends, and shall be subject to such stop-transfer instructions, as the Compensation
Committee deems appropriate to reflect any restrictions on the Shares.

21.7 Successors in Interest. The provisions of the Plan, the terms and conditions of any
Award and the actions of the Compensation Committee shall be binding upon the successors and
assigns of the Company and permitted successors and assigns, heirs, executors, administrators and
other legal representatives of Participants.

21.8 Severability. If any provision of the Plan or any Award is determined to be invalid,
illegal or unenforceable in any jurisdiction, or as to any person, or would disqualify the Plan or
any Award under any law deemed applicable by the Compensation Committee, such provision shall be
construed or deemed amended to conform to Applicable Laws, or, if it cannot be so construed or
deemed amended without, in the Compensation Committee’s determination, materially altering the
intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, person
or Award, and the remainder of the Plan and any such Award shall remain in full force and effect.

21.9 Headings. The headings of sections and subsections herein are included solely for
convenience of reference and shall not affect the meaning of any of the provisions of the Plan.

21.10 Governing Law. To the extent not preempted by federal law, the Plan and all rights
hereunder shall be governed by and construed in accordance with the laws of the State of Delaware,
without reference to rules relating to conflicts of law.

21.11 Compliance With Section 162(m). If any provision of the Plan or any Award Agreement
relating to an Award that is designated as intended to comply with Section 162(m) does not comply
or is inconsistent with the requirements of Section 162(m), such provision shall be construed or
deemed amended to the extent necessary to conform to such requirements.

21.12 Compliance With Section 409A. Awards under the Plan are intended either to (a)
qualify as compensatory arrangements that do not constitute “deferred compensation” subject to
Section 409A of the Code, or (b) satisfy the requirements of Section 409A of the Code so that
Participants will not be liable for the payment of interest or additional tax thereunder, and the
Plan and all Awards shall be construed accordingly. Any provision of the Plan or an Award Agreement
that would cause the grant of an Award, or the payment, settlement or deferral thereof, to fail to
satisfy Section 409A of the Code shall be amended to comply with Section 409A of the Code on a
timely basis, which may be made on a retroactive basis, in accordance with regulations and other
guidance issued under Section 409A of the Code. To the extent necessary to comply with Section 409A
of the Code, if a Participant is a specified employee, as defined in Treas. Reg. 1.409A-1(i), and
any stock of the Company or of any affiliate is publicly traded on an established securities market
or otherwise, no payment or benefit that is subject to Section 409A of the Code shall be made under
this Plan on account of the Participant’s separation from service with the Company or its
Subsidiaries within the meaning of Section 409A(a)(2)(A)(i) of the Code before the date that is the
first day of the seventh month beginning after the date the Participant’s separation from service
(or, if earlier, the date of death of the Participant or any other date permitted under Section
409A of the Code). To the extent necessary to comply with Section 409A Code, no Award that is a
Nonstatutory Option or a Stock Appreciation Right shall contain or be amended to contain a
“deferral feature” or an “additional deferral feature” within the meaning and usage of those terms
under Section 409A of the Code and the administrative guidance thereunder.

 

 

21.13 Administration of the Plan in Foreign Countries. The Compensation Committee may
take any action consistent with the terms of the Plan, either before or after an Award has been
granted, which the Compensation Committee deems necessary or advisable in order for the
administration of the Plan and the grant of Awards thereunder to comply with the Applicable Laws of
any foreign country, including but not limited to, modifying or amending the terms and conditions
governing any Awards, modifying exercise procedures and other terms and procedures and establishing
local country plans as sub-plans to the Plan.

21.14 Effective Date. The Plan shall become effective upon adoption by the Board of
Directors, subject to approval by the stockholders of the Company. The Plan will be submitted for
the approval of the Company’s stockholders within 12 months of the date of the Board of Director’s
initial adoption of the Plan. No Award may be exercised to any extent unless and until the Plan is
so approved by the stockholders, and if such approval has not been obtained by the end of said
12-month period, the Plan and all Awards theretofore granted shall thereupon be canceled and become
null and void.

 

 

Exhibit A

DEFINITIONS

The following terms, when used in the Plan, shall have the meanings, and shall be subject to the
provisions, set forth below:

“Award” means an Option, Restricted Stock award, Restricted Stock Unit award, Stock
Appreciation Right or Other Stock-Based Award granted to a Participant pursuant to the Plan.

“Award Agreement” means any written agreement, contract or other instrument or document
evidencing an Award.

“Applicable Laws” means the requirements relating to the administration of stock option and
restricted stock plans under U.S. state corporate laws, U.S. federal and state securities laws, the
Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the
applicable laws of any other country or jurisdiction where Awards are granted under the Plan.

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

“Cashless Exercise” means the exercise of an Option through (a) the delivery of irrevocable
instructions to a broker (i) to make a sale of a number of Shares issuable upon the exercise of the
Option that results in proceeds in the amount required to pay the aggregate Option Price for all
the shares as to which the Option is being exercised (and any required withholding tax, if
authorized by the Compensation Committee) and (ii) to deliver such proceeds to the Company in
satisfaction of such aggregate Option Price (and withholding tax obligation, if applicable), or (b)
any other surrender to the Company of Shares issuable upon the exercise of the Option or vested
Options in satisfaction of such aggregate Option Price (and withholding tax obligation, if
applicable).

“Cause” means, with respect to any Participant, (a) ”cause” as defined in an employment or
consulting agreement applicable to the Participant, or (b) in the case of a Participant who does
not have an employment or consulting agreement that defines “cause”: (i) any act or omission that
constitutes a material breach by the Participant of any of his or her obligations under any
agreement with the Company or any of its Subsidiaries; (ii) the willful and continued failure or
refusal of the Participant substantially to perform the duties required of him or her as an
Employee, or performance significantly below the level required or expected of the Participant, as
determined by the Compensation Committee; (iii) the Participant’s willful misconduct, gross
negligence or breach of fiduciary duty that, in each case or in the aggregate, results in material
harm to the Company or any of its Subsidiaries; (iv) any willful violation by the Participant of
any federal, state or foreign law or regulation applicable to the business of the Company or any of
its Subsidiaries, or the Participant’s commission of any felony or other crime involving moral
turpitude, or the Participant’s commission of an act of fraud, embezzlement or misappropriation; or
(iv) any other misconduct by the Participant that is materially injurious to the financial
condition or business reputation of, or is otherwise materially injurious to, the Company or any of
its Subsidiaries. The Compensation Committee shall determine whether there has been a termination
of employment for Cause, and each Participant shall agree, by acceptance of the grant of an Award
and the execution of an Award Agreement, that the Compensation Committee’s determination is
conclusive and binding on all persons for all purposes of the Plan.

 

 

“Change in Control” means the occurrence of any one of the following:

(a) Any election of directors of the Company takes place (whether by the directors then in office
or by the stockholders at a meeting or by written consent) and a majority of the directors in
office following such election are individuals who were not nominated by a vote of two-thirds of
the members of the Board of Directors immediately preceding such election;

(b) One or more occurrences or events as a result of which any “person” (as such term is used in
Sections 13(d) and 14(d)(2) of the Exchange Act) becomes the “beneficial owner” (as such term is
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 30% or more of the
combined voting power of the Company’s then outstanding securities;

(c) A merger or consolidation of the Company with, or an acquisition of the Company or all or
substantially all of its assets by, any other entity, other than a merger, consolidation or
acquisition in which the individuals who were members of the Board of Directors of the Company
immediately prior to such transaction continue to constitute a majority of the Board of Directors
of the surviving corporation (or, in the case of an acquisition involving a holding company,
constitute a majority of the Board of Directors of the holding company) for a period of not less
than 12 months following the closing of such transaction; or

(d) The stockholders of the Company approve a plan of complete liquidation or dissolution of the
Company.

Notwithstanding the foregoing, solely with respect to any Award that is subject to Section 409A of
the Code and payable upon a Change in Control, the term “Change in Control” shall mean an event
described in one or more of the foregoing provisions of this definition, but only if it also
constitutes a “change in control event” within the meaning of Treas. Reg. 1.409A-3(i)(5).

“Code” means the Internal Revenue Code of 1986, as amended, including the rules and
regulations promulgated thereunder.

“Common Stock” means shares of Common Stock, par value $0.01 per share, of the Company and
any other equity securities of the Company that may be substituted or resubstituted for such Common
Stock pursuant to Section 15.

“Company” means Newpark Resources, Inc., a Delaware corporation, and any successor.

“Compensation Committee” means the Compensation Committee of the Board of Directors.

“Date of Grant” means the date of grant of an Award as set forth in the applicable Award
Agreement.

“Disqualifying Disposition” has the meaning set forth in Section 7.8.3.

“Disability” means, with respect to any Participant who has an employment or consulting
agreement that defines such term or a similar term, “disability” as defined in such agreement or,
in the case of a Participant who does not have an employment or consulting agreement that defines
such term or a similar term, the inability of the Participant to perform substantially all his
duties as an Employee by reason of illness or incapacity for a period of more than six months, or
six months in the aggregate during any 12-month period, established by medical evidence reasonably
satisfactory to the Compensation Committee.

 

 

“Employee” means any person who is employed by the Company or one of its Subsidiaries,
provided, however, that the term “Employee” does not include a non-employee Director or an
individual performing services for the Company or a Subsidiary who is treated for tax purposes as
an independent contractor at the time of performance of the services, whether such person is so
employed at the time this Plan is adopted or becomes so employed subsequent to the adoption of this
Plan. For purposes of awards of Incentive Stock Options, “Employee” means any person, including an
officer, who is so employed by the Company or any “parent corporation” or “subsidiary corporation”
of the Company as defined in Sections 424(e) and 424(f) of the Code, respectively. An Employee
shall not cease to be an Employee in the case of (a) any leave of absence approved by the Company,
or (b) transfers between locations of the Company or between the Company, any of its Subsidiaries
or any successor.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.

“Fair Market Value” means, as of any given date, the value of a share of Common Stock
determined as follows:

(a) If the Common Stock is listed on an established stock exchange or a national market system,
the Fair Market Value of a share of Common Stock shall be the closing sales price for such stock
(or the closing bid, if no sales were reported), as quoted on the principal exchange or system on
which the Common Stock is then traded and as reported in The Wall Street Journal or such other
source as the Compensation Committee deems reliable, on such date or, if such date is not a
trading day, on the trading day immediately preceding such date;

(b) If the Common Stock is regularly quoted by a recognized securities dealer but selling prices
are not reported, the Fair Market Value of a share of Common Stock shall be the mean between the
high bid and low asked prices for the Common Stock, as reported in The Wall Street Journal or
such other source as the Compensation Committee deems reliable, on such date or, if such date is
not a trading day, on the trading day immediately preceding such date; or

(c) In all other cases, the “fair market value” as determined by the Compensation Committee in
good faith and using such financial sources as it deems relevant and reliable (but in any event
not less than fair market value within the meaning of Section 409A of the Code).

“Incentive Stock Option” means an Option which qualifies as an “incentive stock option”
under Section 422 of the Code and is designated as an Incentive Stock Option by the Compensation
Committee. For avoidance of doubt, no Option awarded under the Plan will be an Incentive Stock
Option unless the Compensation Committee expressly provides for Incentive Stock Option treatment in
the applicable Award Agreement.

“Non-Qualified Stock Option” means an Option which is not an “incentive stock option” under
Section 422 of the Code and includes any Option which is designated as a Non-Qualified Stock Option
by the Compensation Committee.

“Option” means a right to purchase Shares upon payment of the Option Price.

“Option Price” means the purchase price per Share deliverable upon the exercise of an
Option in order for the Option (or applicable portion thereof) to be exchanged for Shares.

“Other Stock-Based Awards” has the meaning set forth in Section 11.

 

 

“Participant” means any Employee who has been granted an Award.

“Performance Criteria” has the meaning set forth in Section 12.1 of the Plan.

“Performance Period” has the meaning set forth in Section 12.4 of the Plan.

“Plan” means the Newpark Resources, Inc. 2006 Equity Incentive Plan.

“Restricted Stock” means Shares awarded to a Participant under Section 8, the rights of
ownership of which are subject to restrictions prescribed by the Compensation Committee.

“Restricted Stock Unit” means a right granted to a Participant under Section 9 to receive
Shares upon the satisfaction of Performance Criteria or other criteria specified by the
Compensation Committee, such as continuous service, at the end of a specified Restriction Period.

“Restriction Period” means the period or periods during which any forfeiture or vesting
restrictions, restrictions on transferability or other restrictions shall apply to any Award, as
determined by the Compensation Committee in its discretion, consistent with the provisions of the
Plan.

“Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in
effect when discretion is being exercised with respect to the Plan.

“SAR Settlement Value” has the meaning set forth in Section 10.2.

“Section 16(b) Insider” means an officer or director of the Company or any other person
whose transactions in the Company’s Common Stock are subject to Section 16 of the Exchange Act.

“Section 162(m)” means Section 162(m) of the Code and the regulations promulgated
thereunder.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

“Shares” means shares of the Company’s Common Stock reserved for issuance under the Plan,
as adjusted pursuant to Sections 15, and any successor security.

“Stock Appreciation Right” means a right granted to a Participant under Section 10 that
entitles the Participant to receive a payment in Shares, cash or a combination thereof measured by
the increase in the Fair Market Value of a Share over the exercise price of the Stock Appreciation
Right, as established by the Compensation Committee on the Date of Grant.

“Subsidiary” means any “subsidiary” within the meaning of Rule 405 under the Securities
Act; provided, however, for purposes of Awards of Incentive Stock Options, “Subsidiary” means any
entity that is a subsidiary of the Company within the meaning of Section 424(f) of the Code”, and
for purposes of Awards of Nonstatutory Options, “Subsidiary” means a corporation or other entity in
an chain of corporations and/or other entities in which the Company has a “controlling interest”
within the meaning of Treas. Reg. 1.414(c)-2(b)(2)(i), but using the threshold of 50% ownership
wherever 80% appears.cogenco63009exh101.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

	Exhibit 10.1

	Stock Purchase Agreement

     This Stock Purchase Agreement (“Agreement”) is made as of July 24, 2009, by and between COGENCO INTERNATIONAL, INC., a Colorado corporation ("Buyer"), and GENESIS ENERGY INVESTMENTS PLC, an Hungarian entity operating as a public company whose common stock is traded on the Budapest Stock Exchange ("Seller").

	RECITALS

     Seller desires to sell, and Buyer desires to purchase, all of the issued and outstanding shares (the "Shares") of capital stock of

	Genesis Solar España, S.L. (“GSE,” the “GSE Shares”), a Spanish entity that is in the process of planning, financing and building a plant in Spain to manufacture hi- tech solar panels using thin film technology which has acquired real estate and is substantially advanced in the permitting process for the manufacturing plant to be located near Cádiz, Spain.

 

	Genesis Solar Singapore Pte. Ltd. (“GSS,” the “GSS Shares”), a corporation formed under the laws of Singapore that is also in the process of planning, financing and building a plant to manufacture high-tech solar panels using thin film technology in Singapore; and 

	Genesis Solar Hungary Kft (“GSH,” the “GSH Shares) an entity formed under the laws of Hungary. 

     The Seller owns or will own at the Closing Date as defined below, more than 98% of the GSE Shares that are currently outstanding, 100% of the GSS Shares that are currently outstanding, and 100% of the GSH Shares that are currently outstanding and (in each case) of the GSE Shares, the GSS Shares, and the GSH Shares that will be outstanding at the Closing Date. GSE, GSS, and GSH are each referred to as an Acquired Company and collectively as the Acquired Companies.

	AGREEMENT

The parties, intending to be legally bound, agree as follows:

ARTICLE 1.      DEFINITIONS. For purposes of this Agreement, the following terms have the meanings specified or referred to in this Article 1:

1.1      "Acquired Companies" -- GSE, GSS, and GSH, collectively.

1.2      "Applicable Contract" -- any Contract (a) under which any Acquired Company has or may acquire any rights, (b) under which any Acquired Company has or may become subject to any obligation or liability, or (c) by which any Acquired Company or any of the assets owned or used by it is or may become bound.subject to any obligation or liability, or (c) by which any Acquired Company or any of the assets owned or used by it is or may become bound.

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1.3      "Balance Sheet" -- as defined in Section 3.4.

1.4      "Best Efforts" -- the efforts that a prudent Person desirous of achieving a result would use in similar circumstances to ensure that such result is achieved as expeditiously as possible; provided, however, that an obligation to use Best Efforts under this Agreement does not require the Person subject to that obligation to take actions that would result in a materially adverse change in the benefits to such Person of this Agreement and the Contemplated Transactions.

1.5      "Breach" -- a "Breach" of a representation, warranty, covenant, obligation, or other provision of this Agreement or any instrument delivered pursuant to this Agreement will be deemed to have occurred if there is or has been (a) any inaccuracy in or breach of, or any failure to perform or comply with, such representation, warranty, covenant, obligation, or other provision, or (b) any claim (by any Person) or other occurrence or circumstance that is or was inconsistent with such representation, warranty, covenant, obligation, or other provision, and the term "Breach" means any such inaccuracy, breach, failure, claim, occurrence, or circumstance.

1.6      "Buyer" -- as defined in the first paragraph of this Agreement.

1.7      "Closing" -- as defined in Section 2.3.

1.8      "Closing Date" -- the date and time as of which the Closing actually takes place.

1.9      “Cogenco Series A Preferred Stock” – a series of preferred stock consisting of a single share to be created by the Buyer with only the following rights and preferences:

     a.      A right to elect one person to the Board of Directors of the Buyer provided such person has experience as a director of public companies with common stock or American depository receipts trading in the United States, has no family relationship with any other officer or director of the Buyer, has not been involved in any legal proceedings of the type required for disclosure under Item 401(f) of SEC Regulation S-K (whether under U.S. law or comparable actions under the law of any other jurisdiction, even though Item 401(f) refers to U.S. law and the Securities and Exchange Commission), is “independent” as that term is defined under the rules of the stock exchange on which the Buyer intends to list its shares, and is otherwise reasonably acceptable to the Buyer. Such person will be appointed to the Buyer’s Board of Directors immediately following the Closing.

     b.      A right for the Buyer to redeem the Cogenco Series A Preferred Stock when the Seller owns directly fewer than 6,000,000 Cogenco Shares in its own name for a redemption price of $1.00, such redemption being effective immediately upon notice from the Buyer.

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     c.      The holder of Cogenco Series A Preferred Stock will not be transferable, will not be entitled to vote at any meeting of the Buyer’s shareholders except to elect the director as described above, and will have no economic or other rights except as specifically set forth in this Section.

1.10      "Consent" -- any approval, consent, ratification, waiver, or other authorization (including any Governmental Authorization).

      1.11      "Contemplated Transactions" -- all of the transactions contemplated by this Agreement, including:

     a.      the sale of the Shares of the Acquired Companies by Seller to Buyer;

     b.      the execution, delivery, and performance of other documents necessary or appropriate for the completion of the Transaction;

     c.      the performance by Buyer and Seller of their respective covenants and obligations under this Agreement; and

     d.      Buyer's acquisition and ownership of the Shares and exercise of control over the Acquired Companies.

1.12      "Contract" -- any agreement, contract, obligation, promise, or undertaking (whether written or oral and whether express or implied) that is legally binding.

1.13      "Damages" -- as defined in Section 10.2.

      1.14      "Disclosure Letter" -- the disclosure letter delivered by Seller to Buyer concurrently with the execution and delivery of this Agreement or, if not delivered concurrently with the execution and deliver of this Agreement, by not later than the Disclosure Letter Delivery Deadline as defined in Section 11.9(c) and which must then be in form reasonably satisfactory to Buyer.

1.15      "Employment Agreements" -- as defined in Section 2.4(a)(iii) .

      1.16      "Encumbrance" -- any charge, claim, community property interest, condition, equitable interest, lien, option, pledge, security interest, right of first refusal, or restriction of any kind, including any restriction on use, voting, transfer, receipt of income, or exercise of any other attribute of ownership.

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

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1.18      "Environmental, Health, and Safety Liabilities" -- any cost, damages, expense, liability, obligation, or other responsibility arising from or under Environmental Law or Occupational Safety and Health Law and consisting of or relating to:

     a.      any environmental, health, or safety matters or conditions (including on-site or off-site contamination, occupational safety and health, and regulation of chemical substances or products);

     b.      fines, penalties, judgments, awards, settlements, legal or administrative proceedings, damages, losses, claims, demands and response, investigative, remedial, or inspection costs and expenses arising under Environmental Law or Occupational Safety and Health Law;

     c.      financial responsibility under Environmental Law or Occupational Safety and Health Law for cleanup costs or corrective action, including any investigation, cleanup, removal, containment, or other remediation or response actions ("Cleanup") required by applicable Environmental Law or Occupational Safety and Health Law (whether or not such Cleanup has been required or requested by any Governmental Body or any other Person) and for any natural resource damages; or

     d.      any other compliance, corrective, investigative, or remedial measures required under Environmental Law or Occupational Safety and Health Law.

The terms "removal," "remedial," and "response action," include the types of activities covered by the United States Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9601 et seq., as amended ("CERCLA") or any similar act under the laws of any other jurisdiction in which any of the Acquired Companies operate or which may be applicable to any of the Acquired Companies.

1.19      "Environmental Law" -- any Legal Requirement of the United States, any other country or Governmental Body that is applicable to any of the Acquired Companies that requires or relates to:

     a.      advising appropriate authorities, employees, and the public of intended or actual releases of pollutants or hazardous substances or materials, violations of discharge limits, or other prohibitions and of the commencements of activities, such as resource extraction or construction, that could have significant impact on the Environment;

     b.      preventing or reducing to acceptable levels the release of pollutants or hazardous substances or materials into the Environment;

     c.      reducing the quantities, preventing the release, or minimizing the hazardous characteristics of wastes that are generated;

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d.      assuring that products are designed, formulated, packaged, and used so that they do not present unreasonable risks to human health or the Environment when used or disposed of;

e.      protecting resources, species, or ecological amenities;

f.      reducing to acceptable levels the risks inherent in the transportation of hazardous substances, pollutants, oil, or other potentially harmful substances;

g.      cleaning up pollutants that have been released, preventing the Threat of Release, or paying the costs of such clean up or prevention; or

h.      making responsible parties pay private parties, or groups of them, for damages done to their health or the Environment, or permitting self-appointed representatives of the public interest to recover for injuries done to public assets.

1.20      "Escrow Agreement" – means the agreement to be entered into at the Closing with a financial institution or a law firm reasonable acceptable to the Buyer and the Seller for the retention of a portion of the Purchase Price (being 2,600,000 Cogenco Shares) pursuant to the terms and conditions set forth in Section 10.8(b), together with such other terms and conditions as are typically found in escrow agreements. The Parties agree to use their best efforts to name the escrow agent and to negotiate an appropriate escrow agreement prior to October 31, 2009. The Parties understand that the escrow agreement may different materially from that attached hereto as Exhibit 2.4, but Exhibit 2.4 is provided for information purposes.

1.21      "Facilities" -- any real property, leaseholds, or other interests currently or formerly owned or operated by any Acquired Company and any buildings, plants, structures, or equipment (including motor vehicles, tank cars, and rolling stock) currently or formerly owned or operated by any Acquired Company.

1.22      "GAAP" -- generally accepted United States accounting principles, applied on a basis consistent with the basis on which the Balance Sheet and the other financial statements referred to in Section 3.4(b) were prepared.

1.23      "Governmental Authorization" -- any approval, consent, license, permit, waiver, or other authorization issued, granted, given, or otherwise made available by or under the authority of any Governmental Body or pursuant to any Legal Requirement.

1.24      "Governmental Body" — whether existing under the laws of the United States or any other country, any:

     a.      nation, state, county, city, town, village, district, or other jurisdiction of any nature;

     b.      federal, state, local, municipal, foreign, or other government;

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     c.      governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal);

    d.      multi-national organization or body; or

     e.      body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature.

1.25      "Hazardous Activity" -- the distribution, generation, handling, importing, management, manufacturing, processing, production, refinement, Release, storage, transfer, transportation, treatment, or use (including any withdrawal or other use of groundwater) of Hazardous Materials in, on, under, about, or from the Facilities or any part thereof into the Environment, and any other act, business, operation, or thing that increases the danger, or risk of danger, or poses an unreasonable risk of harm to persons or property on or off the Facilities, or that may affect the value of the Facilities or the Acquired Companies.

1.26      "Hazardous Materials" -- any waste or other substance that is listed, defined, designated, or classified as, or otherwise determined to be, hazardous, radioactive, or toxic or a pollutant or a contaminant under or pursuant to any Environmental Law, including any admixture or solution thereof, and specifically including petroleum and all derivatives thereof or synthetic substitutes therefor and asbestos or asbestos-containing materials.

1.27     "Indemnified Persons" -- as defined in Section 10.2.

1.28      "Intellectual Property Assets" -- as defined in Section 3.22.

1.29      "Interim Balance Sheet" -- as defined in Section 3.4.

1.30      "IRC" -- the Internal Revenue Code of 1986 or any successor law, and regulations issued by the IRS pursuant to the Internal Revenue Code or any successor law.

1.31      "IRS" -- the United States Internal Revenue Service or any successor agency, and, to the extent relevant, the United States Department of the Treasury.

1.32      "Knowledge" -- an individual will be deemed to have "Knowledge" of a particular fact or other matter if:

a.      such individual is actually aware of such fact or other matter; or

b.      a prudent individual could be expected to discover or otherwise become aware of such fact or other matter in the course of conducting a reasonably comprehensive investigation concerning the existence of such fact or other matter.

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A Person (other than an individual) will be deemed to have "Knowledge" of a particular fact or other matter if any individual who is serving, or who has at any time served, as a director, officer, partner, executor, or trustee of such Person (or in any similar capacity) has, or at any time had, Knowledge of such fact or other matter.

      1.33      "Legal Requirement" -- any federal, state, local, municipal, foreign, international, multinational, or other administrative order, constitution, law, ordinance, principle of common law, regulation, statute, or treaty, whether of the United States or of any other jurisdiction.

1.34      "Noncompetition Agreements" -- as defined in Section 2.4(a)(iv) .

      1.35      "Occupational Safety and Health Law" -- any Legal Requirement designed to provide safe and healthful working conditions and to reduce occupational safety and health hazards, and any program, whether governmental or private (including those promulgated or sponsored by industry associations and insurance companies), designed to provide safe and healthful working conditions.

      1.36      "Order" -- any award, decision, injunction, judgment, order, ruling, subpoena, or verdict entered, issued, made, or rendered by any court, administrative agency, or other Governmental Body or by any arbitrator.

      1.37      "Ordinary Course of Business" -- an action taken by a Person will be deemed to have been taken in the "Ordinary Course of Business" only if:

     a.      such action is consistent with the past practices of such Person and is taken in the ordinary course of the normal day-to-day operations of such Person;

     b.      such action is not required to be authorized by the board of directors of such Person (or by any Person or group of Persons exercising similar authority) [and is not required to be specifically authorized by the parent company (if any) of such Person]; and

     c.      such action is similar in nature and magnitude to actions customarily taken, without any authorization by the board of directors (or by any Person or group of Persons exercising similar authority), in the ordinary course of the normal day-to-day operations of other Persons that are in the same line of business as such Person.

1.38      "Organizational Documents" -- (a) the articles or certificate of incorporation and the bylaws of a corporation; (b) the partnership agreement and any statement of partnership of a general partnership; (c) the limited partnership agreement and the certificate of limited partnership of a limited partnership; (d) any charter or similar document adopted or filed in connection with the creation, formation, or organization of a Person; and (e) any amendment to any of the foregoing.

1.39      "Person" -- any individual, corporation (including any non-profit corporation), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, labor union, or other entity or Governmental Body.

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1.40      "Proceeding" -- any action, arbitration, audit, hearing, investigation, litigation, or suit (whether civil, criminal, administrative, investigative, or informal) commenced, brought, conducted, or heard by or before, or otherwise involving, any Governmental Body or arbitrator.

1.41      "Related Person" -- with respect to a particular individual:

a.      each other member of such individual's Family;

b.      any Person that is directly or indirectly controlled by such individual or one or more members of such individual's Family;

c.      any Person in which such individual or members of such individual's Family hold (individually or in the aggregate) a Material Interest; and

d.      any Person with respect to which such individual or one or more members of such individual's Family serves as a director, officer, partner, executor, or trustee (or in a similar capacity).

e.      With respect to a specified Person other than an individual;

  (i)      any Person that directly or indirectly controls, is directly or indirectly controlled by, or is directly or indirectly under common control with such specified Person;

 (ii)      any Person that holds a Material Interest in such specified Person;

(iii)      each Person that serves as a director, officer, partner, executor, or trustee of such specified Person (or in a similar capacity);

(iv)      any Person in which such specified Person holds a Material Interest;

(v)      any Person with respect to which such specified Person serves as a general partner or a trustee (or in a similar capacity); and

           (vi)      any Related Person of any individual described in clause (b) or (c).

f.      For purposes of this definition, (a) the "Family" of an individual includes (i) the individual, (ii) the individual's spouse [and former spouses], (iii) any other natural person who is related to the individual or the individual's spouse within the second degree, and (iv) any other natural person who resides with such individual, and (b) "Material Interest" means direct or indirect beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act of voting securities or other voting interests representing at least 25% of the outstanding voting power of a Person or equity securities or other equity interests representing at least 25% of the outstanding equity securities or equity interests in a Person.

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      1.42      "Release" -- any spilling, leaking, emitting, discharging, depositing, escaping, leaching, dumping, or other releasing into the Environment, whether intentional or unintentional.

      1.43      "Representative" -- with respect to a particular Person, any director, officer, employee, agent, consultant, advisor, or other representative of such Person, including legal counsel, accountants, and financial advisors.

      1.44      "Securities Act" -- the Securities Act of 1933 as adopted in the United States, or any successor law, and regulations and rules issued pursuant to that act or any successor law.

      1.45      “Securities Exchange Act” – the Securities Exchange Act of 1934 as amended, as adopted in the United States, or any successor law and regulations and rules issued pursuant to that act or any successor law.

1.46      "Seller" -- as defined in the first paragraph of this Agreement.

1.47      "Seller’s Releases" -- as defined in Section 2.4.

1.48      "Shares" – as defined in the Recitals of this Agreement, including the GSE Shares, the GSS Shares, and the GSH Share, also as defined in the Recitals of this Agreement.

1.49      “Spanish Subsidies Commitment” – as defined in Section 7.2(c) .

1.50      "Subsidiary" – with respect to any Person (the "Owner"), any corporation or other Person of which securities or other interests having the power to elect a majority of that corporation's or other Person's board of directors or similar governing body, or otherwise having the power to direct the business and policies of that corporation or other Person (other than securities or other interests having such power only upon the happening of a contingency that has not occurred) are held by the Owner or one or more of its Subsidiaries; when used without reference to a particular Person, "Subsidiary" means a Subsidiary of the Company.

1.51      "Tax" – any tax (including any income tax, capital gains tax, value-added tax, sales tax, property tax, gift tax, or estate tax), levy, assessment, tariff, duty (including any customs duty), deficiency, or other fee, and any related charge or amount (including any fine, penalty, interest, or addition to tax), imposed, assessed, or collected by or under the authority of any Governmental Body or payable pursuant to any tax-sharing agreement or any other Contract relating to the sharing or payment of any such tax, levy, assessment, tariff, duty, deficiency, or fee.

1.52      "Tax Return" – any return (including any information return), report, statement, schedule, notice, form, or other document or information filed with or submitted to, or required to be filed with or submitted to, any Governmental Body in connection with the determination, assessment, collection, or payment of any Tax or in connection with the administration, implementation, or enforcement of or compliance with any Legal Requirement relating to any Tax.

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1.53      "Threat of Release" – a substantial likelihood of a Release that may require action in order to prevent or mitigate damage to the Environment that may result from such Release.

1.54      "Threatened" – a claim, Proceeding, dispute, action, or other matter will be deemed to have been "Threatened" if any demand or statement has been made (orally or in writing) or any notice has been given (orally or in writing), or if any other event has occurred or any other circumstances exist, that would lead a prudent Person to conclude that such a claim, Proceeding, dispute, action, or other matter is likely to be asserted, commenced, taken, or otherwise pursued in the future.

ARTICLE 2      SALE AND TRANSFER OF SHARES; CLOSING

2.1      SHARES.

     a.      Subject to the terms and conditions of this Agreement, at the Closing, Seller will sell and transfer the Shares to Buyer, and Buyer will purchase the Shares from Seller as follows:

     (i)      a 241,110 business quotas (in Spanish: participationes sociales) representing a primary stake (in Spanish: capital social) of € 7,247,766.60 constituting the GSE Shares, amounting to no less than 98% of the outstanding GSE Shares, with a book value as reflected on the Balance Sheets and Interim Balance Sheets and at the Closing Date of not less than € 7,300,000;

     (ii)      10,000 GSS Shares, amounting to no less than 100% of the outstanding GSS Shares, with a book value as reflected on the Balance Sheets and Interim Balance Sheets and at the Closing Date of not less than € 3,000,000; and

     (iii)      a single business quota (in Hungarian: üzletrész) representing a primary stake (in Hungarian: törzsbetét) of HUF 273,000,000, constituting the GSH Share, amounting to no less than 100% of the outstanding share capital of GSH, with a book value as reflected on the Balance Sheets and Interim Balance Sheets and at the Closing Date of not less than HUF 55,000,000.

     b.      Subject to the terms and conditions of this Agreement, at and prior to the Closing, the Seller will use its best efforts to obtain all GSH Shares, and GSS Shares not owned by Seller plus assist the Buyer in negotiating for and obtaining all GSE Shares not owned by Seller,so that, at the Closing Date, Buyer will obtain and own 100% of the Shares.

     2.2      PURCHASE PRICE. Subject to the terms and conditions of this Agreement, the purchase price (the "Purchase Price") for the Shares will be 8,700,000 shares of the Buyer’s common stock (the “Cogenco Shares”), and one share of Cogenco Series A Preferred Stock.

     2.3      CLOSING. The purchase and sale (the "Closing") provided for in this Agreement will take place at the offices of Buyer’s counsel at 10:00 a.m. (local time) on the later of (i) December 15, 2009 or (ii) the date that is two business days following the termination of the

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applicable waiting period under the HSR Act (if applicable), or at such other time and place as the parties may agree. Subject to the provisions of Article 9, failure to consummate the purchase and sale provided for in this Agreement on the date and time and at the place determined pursuant to this Section 2.3 will not result in the termination of this Agreement and will not relieve any party of any obligation under this Agreement.

2.4      CLOSING OBLIGATIONS. At the Closing:

a.      Seller will deliver to Buyer:

     (i)      certificates representing the Shares, duly endorsed (or accompanied by duly executed stock powers), with signatures guaranteed by a commercial bank or by a member firm of the New York Stock Exchange, for transfer to Buyer or if Seller represents and warrants to Buyer that there are no certificates representing certain of the Shares, an assignment of all of the Seller’s interest in the Acquired Companies, which assignment shall be guaranteed as set forth above;

     (ii)      releases in the form of Exhibit 2.4(a)(ii) executed by Seller ("Seller’s Releases");

    (iii)      employment agreements in the form reasonably acceptable to the Buyer, executed by persons designated by the Buyer to be material employees of any of the Acquired Companies (collectively, "Employment Agreements");

    (iv)      noncompetition agreement reasonably acceptable to the Buyer, executed by certain persons to be designated by the Buyer (the "Noncompetition Agreement"); and

    (v)      a certificate executed by Seller representing and warranting to Buyer that each of Seller’s representations and warranties in this Agreement was accurate in all respects as of the date of this Agreement and is accurate in all respects as of the Closing Date as if made on the Closing Date (giving full effect to any supplements to the Disclosure Letter that were delivered by Seller to Buyer prior to the Closing Date in accordance with Section 5.5) .

b.      Buyer will deliver to Seller:

     (i)      6,100,000 of the Cogenco Shares and the remaining 2,600,000 Cogenco Shares pursuant to the Escrow Agreement, all of which will be shares of common stock of the Buyer bearing an appropriate legend under SEC Rule 144 and other appropriate law;

    (ii)      One share of Cogenco Series A Preferred Stock; and

   (iii)      a certificate executed by Buyer to the effect that, except as otherwise stated in such certificate, each of Buyer's representations and warranties in this Agreement was accurate inall respects as of the date of this Agreement and is accurate in all respects as of the Closing Date as if made on the Closing Date.

   
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c.      Buyer and Seller will enter into an escrow agreement in the form of Exhibit 2.4 (the "Escrow Agreement") with a third party reasonably acceptable to Buyer and Seller.

ARTICLE 3   REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and warrants to Buyer as follows:

3.1      ORGANIZATION AND GOOD STANDING

a.      Part 3.1 of the Disclosure Letter contains a complete and accurate list for each Acquired Company of its name, its jurisdiction of incorporation, other jurisdictions in which it is authorized to do business, and its capitalization (including the identity of each stockholder and the number of shares held by each). Each Acquired Company is a corporation duly organized, validly existing, and in good standing under the laws of its jurisdiction of incorporation, with full corporate power and authority to conduct its business as it is now being conducted, to own or use the properties and assets that it purports to own or use, and to perform all its obligations under Applicable Contracts. Each Acquired Company is duly qualified to do business as a foreign corporation and is in good standing under the laws of each state or other jurisdiction in which either the ownership or use of the properties owned or used by it, or the nature of the activities conducted by it, requires such qualification.

b.      Seller will deliver to Buyer not later than the time that Seller executes this Agreement copies of the Organizational Documents of each Acquired Company, as currently in effect.

3.2     AUTHORITY; NO CONFLICT

     a.      This Agreement constitutes the legal, valid, and binding obligation of Seller, enforceable against Seller in accordance with its terms. Upon the execution and delivery by Seller of the Seller’s Releases and the other agreements to be delivered by the Seller in connection with the completion of the Contemplated Transaction (collectively, the "Seller’s Closing Documents"), the Seller’s Closing Documents will each constitute the legal, valid, and binding obligations of Seller, enforceable against Seller in accordance with their respective terms. Seller has the absolute and unrestricted right, power, authority, and capacity to execute and deliver this Agreement and the Seller’s Closing Documents and to perform their obligations under this Agreement and the Seller’s Closing Documents.

     b.      Except as set forth in Part 3.2 of the Disclosure Letter, neither the execution and delivery of this Agreement nor the consummation or performance of any of the Contemplated Transactions will, directly or indirectly (with or without notice or lapse of time):

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     (i)      contravene, conflict with, or result in a violation of (A) any provision of the Organizational Documents of the Acquired Companies, or (B) any resolution adopted by the board of directors or other governing body, or by the stockholders, members or owners of any Acquired Company;

     (ii)      contravene, conflict with, or result in a violation of, or give any Governmental Body or other Person the right to challenge any of the Contemplated Transactions or to exercise any remedy or obtain any relief under, any Legal Requirement or any Order to which any Acquired Company or either Seller, or any of the assets owned or used by any Acquired Company, may be subject;

     (iii)      contravene, conflict with, or result in a violation of any of the terms or requirements of, or give any Governmental Body the right to revoke, withdraw, suspend, cancel, terminate, or modify, any Governmental Authorization that is held by any Acquired Company or that otherwise relates to the business of, or any of the assets owned or used by, any Acquired Company;

     (iv)      cause Buyer or any Acquired Company to become subject to, or to become liable for the payment of, any Tax;

     (v)      cause any of the assets owned by any Acquired Company to be reassessed or revalued by any taxing authority or other Governmental Body;

     (vi)      contravene, conflict with, or result in a violation or breach of any provision of, or give any Person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate, or modify, any Applicable Contract; or

     (vii)      result in the imposition or creation of any Encumbrance upon or with respect to any of the assets owned or used by any Acquired Company.

Except as set forth in Part 3.2 of the Disclosure Letter, neither the Seller nor any Acquired Company is or will be required to give any notice to or obtain any Consent from any Person in connection with the execution and delivery of this Agreement or the consummation or performance of any of the Contemplated Transactions.

     c.      Seller is acquiring the Cogenco Shares for its own account and not with a view to their distribution within the meaning of § 2(a)(11) of the Securities Act. The Seller is an “accredited investor” as such term is defined in Rule 501(a) under the Securities Act and a “non-U.S. Person” as such term is defined in Regulation S under the Securities Act. Seller has completed such investigation and due diligence with respect to its acquisition of the Cogenco Shares as Seller and its legal, financial, tax, investment, and other advisors have deemed appropriate or necessary in the circumstances.

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3.3      CAPITALIZATION.

a.      The authorized equity securities of

     (i)      GSE consists of a 241,110 business quota (in Spanish: participationes sociales) representing a primary stake (in Spanish: capital social) of € 7,247,766.60; issued and outstanding and constituting the Shares of which not less than 98% is owned by Seller.

     (ii)      GSH consists of a single business quota (in Hungarian: üzletrész) representing a primary stake (in Hungarian: törzsbetét) of HUF 273,000,000; issued and outstanding and constituting the Shares of which not less than 100% is owned by Seller.

     (iii)      GSS consists of 10,000 shares of common stock, par value SGD 1 per share, of which 10,000 shares are issued and outstanding and constitute the Shares of which not less than 75% is presently owned by Seller.

b.      Part 3.3(b) of the Disclosure Letter sets forth the name, address, contact information, and number of Shares held by each person who owns any Shares in any of the Acquired Companies other than Seller.

c.      With the exception of the Shares owned by the persons who are identified on Part 3.3(b) of the Disclosure Letter, Seller is and will be on the Closing Date the record and beneficial owners and holders of the Shares, free and clear of all Encumbrances.

d.      No legend or other reference to any purported Encumbrance appears upon any certificate representing equity securities of any Acquired Company. All of the outstanding equity securities of each Acquired Company have been duly authorized and validly issued and are fully paid and nonassessable. There are no Contracts relating to the issuance, sale, or transfer of any equity securities or other securities of any Acquired Company. None of the outstanding equity securities or other securities of any Acquired Company was issued in violation of the Securities Act or any other Legal Requirement. No Acquired Company owns, or has any Contract to acquire, any equity securities or other securities of any Person or any direct or indirect equity or ownership interest in any other business. The Seller is not aware of any restrictions, Encumbrances or required approvals with respect to any Shares not owned by the Seller.

3.4      FINANCIAL STATEMENTS. Not later than the Disclosure Letter Delivery Deadline, Seller will deliver to Buyer: (a) audited consolidated balance sheets of each of the Acquired Companies as at December 31, 2008, in each of the years 2006 through 2008 including notes thereto (the “Balance Sheets”), and the related audited consolidated statements of income, changes in stockholders' equity, and cash flow for each of the fiscal years then ended, together with the report thereon of independent certified public accountants reasonably acceptable to Buyer, and (b) consolidated unaudited balance sheets of the Acquired Companies as at June 30, 2009 and the related consolidated statements of income, changes in stockholders' equity, and cash flow for the fiscal periods then ended (the “Interim Balance Sheet”) and the related

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unaudited consolidated statements of income, changes in stockholders' equity, and cash flow for the fiscal periods then ended, including in each case the notes thereto. Such financial statements and notes fairly present the financial condition and the results of operations, changes in stockholders' equity, and cash flow of the Acquired Companies as at the respective dates of and for the periods referred to in such financial statements, all in accordance with GAAP and all prepared in US dollars, subject, in the case of interim financial statements, to normal recurring year-end adjustments (the effect of which will not, individually or in the aggregate, be materially adverse) and the absence of notes (that, if presented, would not differ materially from those included in the Balance Sheet); the financial statements referred to in this Section 3.4 reflect the consistent application of such accounting principles throughout the periods involved, except as disclosed in the notes to such financial statements. No financial statements of any Person other than the Acquired Companies are required by GAAP to be included in the consolidated financial statements of the Company.

3.5      BOOKS AND RECORDS.

a.      The books of account, minute books, stock record books, and other records of the Acquired Companies, all of which have been made available to Buyer, are complete and correct and have been maintained in accordance with sound business practices and the requirements of § 13(b)(2) of the Securities Exchange Act (regardless of whether or not the Acquired Companies are subject to that Section), including the maintenance of an adequate system of internal controls in a form pursuant to which the Buyer will not have to report any material weaknesses pursuant to Rules 13a-14 and 13a-15 under the Securities Exchange Act.

b.      The minute books of the Acquired Companies contain accurate and complete records of all meetings held of, and corporate action taken by, the stockholders, the Boards of Directors, and committees of the Boards of Directors of the Acquired Companies, and no meeting of any such stockholders, Board of Directors, or committee has been held for which minutes have not been prepared and are not contained in such minute books.

c.      At the Closing, all of those books and records will be in the possession of the Acquired Companies and delivered to the Buyer.

3.6      TITLE TO PROPERTIES; ENCUMBRANCES. Part 3.6 of the Disclosure Letter contains a complete and accurate list of all real property, leaseholds, or other interests therein owned by any Acquired Company.

a.      Seller has delivered or made available to Buyer copies of the deeds and other instruments (as recorded) by which the Acquired Companies acquired such real property and interests, and copies of all title insurance policies, opinions, abstracts, and surveys in the possession of Seller or the Acquired Companies and relating to such property or interests.

b.      The Acquired Companies own (with good and marketable title in the case of real property, subject only to the matters permitted by the following sentence) all the properties and assets (whether real, personal, or mixed and whether tangible or intangible) that they purport to own located in the facilities owned or operated by the Acquired Companies or

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reflected as owned in the books and records of the Acquired Companies, including all of the properties and assets reflected in the Balance Sheet and the Interim Balance Sheet (except for assets held under capitalized leases disclosed or not required to be disclosed in Part 3.6 of the Disclosure Letter and personal property sold since the date of the Balance Sheet and the Interim Balance Sheet, as the case may be, in the Ordinary Course of Business), and all of the properties and assets purchased or otherwise acquired by the Acquired Companies since the date of the Balance Sheet (except for personal property acquired and sold since the date of the Balance Sheet in the Ordinary Course of Business and consistent with past practice), which subsequently purchased or acquired properties and assets (other than inventory and short-term investments) are listed in Part 3.6 of the Disclosure Letter.

c.      All material properties and assets reflected in the Balance Sheet and the Interim Balance Sheet are free and clear of all Encumbrances and are not, in the case of real property, subject to any rights of way, building use restrictions, exceptions, variances, reservations, or limitations of any nature except, with respect to all such properties and assets,

(i)      mortgages or security interests shown on the Balance Sheet or the Interim Balance Sheet as securing specified liabilities or obligations, with respect to which no default (or event that, with notice or lapse of time or both, would constitute a default) exists,

(ii)      mortgages or security interests incurred in connection with the purchase of property or assets after the date of the Interim Balance Sheet (such mortgages and security interests being limited to the property or assets so acquired), with respect to which no default (or event that, with notice or lapse of time or both, would constitute a default) exists,

(iii)      liens for current taxes not yet due, and

(iv)      with respect to real property, (A) minor imperfections of title, if any, none of which is substantial in amount, materially detracts from the value or impairs the use of the property subject thereto, or impairs the operations of any Acquired Company, and (B) zoning laws and other land use restrictions that do not impair the present or anticipated use of the property subject thereto.

(v)      All buildings, plants, and structures owned by the Acquired Companies lie wholly within the boundaries of the real property owned by the Acquired Companies and do not encroach upon the property of, or otherwise conflict with the property rights of, any other Person.

     3.7      CONDITION AND SUFFICIENCY OF ASSETS. The buildings, plants, structures, and equipment of the Acquired Companies are structurally sound, are in good operating condition and repair, and are adequate for the uses to which they are being put, and none of such buildings, plants, structures, or equipment is in need of maintenance or repairs except for ordinary, routine maintenance and repairs that are not material in nature or cost. The building, plants, structures, and equipment of the Acquired Companies are sufficient for the continued conduct of the Acquired Companies’ businesses after the Closing in substantially the same manner as conducted prior to the Closing. 
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3.8      ACCOUNTS RECEIVABLE. All accounts receivable of the Acquired Companies that are reflected on the Balance Sheet or the Interim Balance Sheet or on the accounting records of the Acquired Companies as of the Closing Date (collectively, the “Accounts Receivable”) represent or will represent valid obligations arising from sales actually made or services actually performed in the Ordinary Course of Business.

a.      Unless paid prior to the Closing Date, the Accounts Receivable are or will be as of the Closing Date current and collectible net of the respective reserves shown on the Balance Sheet or the Interim Balance Sheet or on the accounting records of the Acquired Companies as of the Closing Date (which reserves are adequate and calculated consistent with past practice and, in the case of the reserve as of the Closing Date, will not represent a greater percentage of the Accounts Receivable as of the Closing Date than the reserve reflected in the Interim Balance Sheet represented of the Accounts Receivable reflected therein and will not represent a material adverse change in the composition of such Accounts Receivable in terms of aging).

b.      Subject to such reserves, each of the Accounts Receivable either has been or will be collected in full, without any set-off, within ninety days after the day on which it first becomes due and payable. There is no contest, claim, or right of set-off, other than returns in the Ordinary Course of Business, under any Contract with any obligor of an Accounts Receivable relating to the amount or validity of such Accounts Receivable.

c.      Part 3.8 of the Disclosure Letter contains a complete and accurate list of all Accounts Receivable as of the date of the Interim Balance Sheet, which list sets forth the aging of such Accounts Receivable.

3.9      INVENTORY. All inventory of the Acquired Companies, whether or not reflected in the Balance Sheet or the Interim Balance Sheet, consists of a quality and quantity usable and salable in the Ordinary Course of Business, except for obsolete items and items of below-standard quality, all of which have been written off or written down to net realizable value in the Balance Sheet or the Interim Balance Sheet or on the accounting records of the Acquired Companies as of the Closing Date, as the case may be. All inventories not written off have been priced at the lower of cost or net realizable value on a first in, first out basis. The quantities of each item of inventory (whether raw materials, work-in-process, or finished goods) are not excessive, but are reasonable in the present circumstances of the Acquired Companies.

     3.10      NO UNDISCLOSED LIABILITIES. Except as set forth in Part 3.10 of the Disclosure Letter, the Acquired Companies have no liabilities or obligations of any nature (whether known or unknown and whether absolute, accrued, contingent, or otherwise) except for liabilities or obligations reflected or reserved against in the Balance Sheet or the Interim Balance Sheet and current liabilities incurred in the Ordinary Course of Business since the respective dates thereof.

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3.11      TAXES

a.      The Acquired Companies have filed or caused to be filed (on a timely basis since formation) all Tax Returns that are or were required to be filed by or with respect to any of them, either separately or as a member of a group of corporations, pursuant to applicable Legal Requirements. Seller will, not later than the date that it executes this Agreement to Buyer copies of, and Part 3.11 of the Disclosure Letter contains a complete and accurate list of, all such Tax Returns relating to income or franchise taxes filed since formation.

b.      The Acquired Companies have each paid, or made provision for the payment of, all Taxes that have or may have become due pursuant to those Tax Returns or otherwise, or pursuant to any assessment received by Seller or any Acquired Company, except such Taxes, if any, as are listed in Part 3.11 of the Disclosure Letter and are being contested in good faith and as to which adequate reserves (determined in accordance with GAAP) have been provided in the Balance Sheet and the Interim Balance Sheet.

c.      The income Tax Returns of each Acquired Company (whether filed in the United States or any subdivision thereof, or in any other jurisdiction) subject to such Taxes have been audited by the relevant tax authorities or are closed by the applicable statute of limitations for all taxable years.

(i)      Part 3.11 of the Disclosure Letter contains a complete and accurate list of all audits of all such Tax Returns, including a reasonably detailed description of the nature and outcome of each audit.

(ii)      All deficiencies proposed as a result of such audits have been paid, reserved against, settled, or, as described in Part 3.11 of the Disclosure Letter, are being contested in good faith by appropriate proceedings. Part 3.11 of the Disclosure Letter describes all adjustments to the United States federal income Tax Returns filed by any Acquired Company or any group of corporations including any Acquired Company for all taxable years, and the resulting deficiencies proposed by the applicable Tax authority.

(iii)      Except as described in Part 3.11 of the Disclosure Letter, neither Seller nor any Acquired Company has given or been requested to give waivers or extensions (or is or would be subject to a waiver or extension given by any other Person) of any statute of limitations relating to the payment of Taxes of any Acquired Company or for which any Acquired Company may be liable.

d.      The charges, accruals, and reserves with respect to Taxes on the respective books of each Acquired Company are adequate (determined in accordance with GAAP) and are at least equal to that Acquired Company’s liability for Taxes. There exists no proposed tax assessment against any Acquired Company except as disclosed in the Balance Sheet or in Part 3.11 of the Disclosure Letter. No consent to the application of § 341(f)(2) of the IRC (or any comparable section of any Law of any other jurisdiction in the world) has been filed with respect to any property or assets held, acquired, or to be acquired by any Acquired Company. All Taxes that any Acquired Company is or was required by Legal Requirements to withhold or collect have been duly withheld or collected and, to the extent required, have been paid to the proper Governmental Body or other Person. 
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e.      All Tax Returns filed by (or that include on a consolidated basis) any Acquired Company are true, correct, and complete. There is no tax sharing agreement that will require any payment by any Acquired Company after the date of this Agreement.

3.12      NO MATERIAL ADVERSE CHANGE. Since the date of the Balance Sheet, there has not been any material adverse change in the business, operations, properties, prospects, assets, or condition of any Acquired Company, and no event has occurred or circumstance exists that may result in such a material adverse change.

3.13      EMPLOYEE BENEFITS

a.      The persons who are employed by and who are retained as contractors by each Acquired Company are set forth in Part 3.13(a) of the Disclosure Letter, together with the other information required by Section 3.20 of this Agreement. In each case, each Acquired Company is in full compliance with any Laws and regulations issued by any Governmental Body governing such employment relationship, or any relationship as an independent contractor or other similar relationship including (without limitation) the withholding and proper payment of any Tax obligations and the provision of Benefit Obligations adopted by, or to which any Acquired Company is subject. "Other Benefit Obligations" means all obligations, arrangements, or customary practices, whether or not legally enforceable, to provide benefits, other than salary, as compensation for services rendered, to present or former directors, employees, or agents, other than obligations, arrangements, and practices that are Plans. Other Benefit Obligations include consulting agreements under which the compensation paid does not depend upon the amount of service rendered, sabbatical policies, severance payment policies, employment manuals, collective bargaining agreements, all contracts with third party administrators, actuaries, investment managers, consultants, and other independent contractors, payroll manuals, and fringe benefits within the meaning of IRC § 132 or the comparable section of any other Law applicable to an Acquired Company.

b.      Part 3.13(b) of the Disclosure Letter sets forth all employee benefit plans (including, but not limited to Other Benefit Obligations) to which an Acquired Company is subject (directly or indirectly, whether written, statutory, regulatory, or unwritten), and the Acquired Companies have each delivered (or will within ten days of the date of this Agreement) deliver copies of all such plans to the Buyer.

c.      Part 3.13(c) of the Disclosure Letter sets forth all reports filed by any of the Acquired Companies, or by any person with respect to any employee of or contractor to an Acquired Company with any Governmental Body.

d.      Except as set forth in Part 3.13(d) of the Disclosure Letter, the Acquired Companies have each performed all of their respective obligations under all employee benefit plans and Other Benefit Obligations. The Acquired Companies have made appropriate entries in their financial records and statements for all obligations and liabilities under such plans and

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Obligations that have accrued but are not due. Neither the Seller nor any Acquired Company has Knowledge of any facts or circumstances that may give rise to any liability of any Seller, any Acquired Company, or Buyer under the Law applicable to any employee benefit plan or Other Benefit Obligation, whether described in Part 3.13 of the Disclosure Letter or not so described.

e.      No payment that is owed or may become due to any director, officer, employee, or agent of any Acquired Company will be non-deductible to the Acquired Companies or subject to tax under IRC § 280G or § 4999 (or the comparable section of any other Law applicable to an Acquired Company); nor will any Acquired Company be required to "gross up" or otherwise compensate any such person because of the imposition of any excise tax on a payment to such person.

f.      The consummation of the Contemplated Transactions will not result in the payment, vesting, or acceleration of any benefit or Company Other Benefit Obligation.

3.14      COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL AUTHORIZATIONS

a.      Except as set forth in Part 3.14 of the Disclosure Letter:

(i)      each Acquired Company is, and at all times since formation has been, in full compliance with each Legal Requirement that is or was applicable to it or to the conduct or operation of its business or the ownership or use of any of its assets;

(ii)      no event has occurred or circumstance exists that (with or without notice or lapse of time) (A) may constitute or result in a violation by any Acquired Company of, or a failure on the part of any Acquired Company to comply with, any Legal Requirement, or (B) may give rise to any obligation on the part of any Acquired Company to undertake, or to bear all or any portion of the cost of, any remedial action of any nature; and

(iii)      no Acquired Company has received, at any time since formation, any notice or other communication (whether oral or written) from any Governmental Body or any other Person regarding (A) any actual, alleged, possible, or potential violation of, or failure to comply with, any Legal Requirement, or (B) any actual, alleged, possible, or potential obligation on the part of any Acquired Company to undertake, or to bear all or any portion of the cost of, any remedial action of any nature.

b.      Part 3.14 of the Disclosure Letter contains a complete and accurate list of each Governmental Authorization that is held by any Acquired Company or that otherwise relates to the business of, or to any of the assets owned or used by, any Acquired Company. Each Governmental Authorization listed or required to be listed in Part 3.14 of the Disclosure Letter is valid and in full force and effect. Except as set forth in Part 3.14 of the Disclosure Letter:

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(i)      each Acquired Company is, and at all times since formation has been, in full compliance with all of the terms and requirements of each Governmental Authorization identified or required to be identified in Part 3.14 of the Disclosure Letter;

(ii)      no event has occurred or circumstance exists that may (with or without notice or lapse of time) (A) constitute or result directly or indirectly in a violation of or a failure to comply with any term or requirement of any Governmental Authorization listed or required to be listed in Part 3.14 of the Disclosure Letter, or (B) result directly or indirectly in the revocation, withdrawal, suspension, cancellation, or termination of, or any modification to, any Governmental Authorization listed or required to be listed in Part 3.14 of the Disclosure Letter;

(iii)      no Acquired Company has received, at any time since formation, any notice or other communication (whether oral or written) from any Governmental Body or any other Person regarding (A) any actual, alleged, possible, or potential violation of or failure to comply with any term or requirement of any Governmental Authorization, or (B) any actual, proposed, possible, or potential revocation, withdrawal, suspension, cancellation, termination of, or modification to any Governmental Authorization; and

(iv)      all applications required to have been filed for the renewal of the Governmental Authorizations listed or required to be listed in Part 3.14 of the Disclosure Letter have been duly filed on a timely basis with the appropriate Governmental Bodies, and all other filings required to have been made with respect to such Governmental Authorizations have been duly made on a timely basis with the appropriate Governmental Bodies.

The Governmental Authorizations listed in Part 3.14 of the Disclosure Letter collectively constitute all of the Governmental Authorizations necessary to permit the Acquired Companies to lawfully conduct and operate their businesses in the manner they currently conduct and operate such businesses and to permit the Acquired Companies to own and use their assets in the manner in which they currently own and use such assets.

3.15      LEGAL PROCEEDINGS; ORDERS

     a.      Except as set forth in Part 3.15 of the Disclosure Letter, there is no pending Proceeding:

     (i)      that has been commenced by or against any Acquired Company or that otherwise relates to or may affect the business of, or any of the assets owned or used by, any Acquired Company; or

     (ii) that challenges, or that may have the effect of preventing, delaying, making illegal, or otherwise interfering with, any of the Contemplated Transactions.

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To the Knowledge of Seller and the Acquired Companies, (1) no such Proceeding has been Threatened, and (2) no event has occurred or circumstance exists that may give rise to or serve as a basis for the commencement of any such Proceeding. Seller has delivered to Buyer copies of all pleadings, correspondence, and other documents relating to each Proceeding listed in Part 3.15 of the Disclosure Letter. The Proceedings listed in Part 3.15 of the Disclosure Letter will not have a material adverse effect on the business, operations, assets, condition, or prospects of any Acquired Company.

b.      Except as set forth in Part 3.15 of the Disclosure Letter:

(i)      there is no Order to which any of the Acquired Companies, or any of the assets owned or used by any Acquired Company, is subject;

(ii)      neither Seller is subject to any Order that relates to the business of, or any of the assets owned or used by, any Acquired Company; and

(iii)      to the Knowledge of Seller and the Acquired Companies, no officer, director, agent, or employee of any Acquired Company is subject to any Order that prohibits such officer, director, agent, or employee from engaging in or continuing any conduct, activity, or practice relating to the business of any Acquired Company.

c.      Except as set forth in Part 3.15 of the Disclosure Letter:

(i)      each Acquired Company is, and at all times since formation has been, in full compliance with all of the terms and requirements of each Order to which it, or any of the assets owned or used by it, is or has been subject;

(ii)      no event has occurred or circumstance exists that may constitute or result in (with or without notice or lapse of time) a violation of or failure to comply with any term or requirement of any Order to which any Acquired Company, or any of the assets owned or used by any Acquired Company, is subject; and

(iii)      no Acquired Company has received, at any time since formation, any notice or other communication (whether oral or written) from any Governmental Body or any other Person regarding any actual, alleged, possible, or potential violation of, or failure to comply with, any term or requirement of any Order to which any Acquired Company, or any of the assets owned or used by any Acquired Company, is or has been subject.

3.16      ABSENCE OF CERTAIN CHANGES AND EVENTS. Except as set forth in Part 3.16 of the Disclosure Letter, since the date of the Balance Sheet, the Acquired Companies have conducted their businesses only in the Ordinary Course of Business and there has not been any:

a.      change in any Acquired Company’s authorized or issued capital stock; grant of any stock option or right to purchase shares of capital stock of any Acquired Company;

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issuance of any security convertible into such capital stock; grant of any registration rights; purchase, redemption, retirement, or other acquisition by any Acquired Company of any shares of any such capital stock; or declaration or payment of any dividend or other distribution or payment in respect of shares of capital stock;

b.      amendment to the Organizational Documents of any Acquired Company;

c.      payment or increase by any Acquired Company of any bonuses, salaries, or other compensation to any stockholder, director, officer, or (except in the Ordinary Course of Business) employee or entry into any employment, severance, or similar Contract with any director, officer, or employee;

d.      adoption of, or increase in the payments to or benefits under, any profit sharing, bonus, deferred compensation, savings, insurance, pension, retirement, or other employee benefit plan for or with any employees of any Acquired Company;

e.      damage to or destruction or loss of any asset or property of any Acquired Company, whether or not covered by insurance, materially and adversely affecting the properties, assets, business, financial condition, or prospects of the Acquired Companies, taken as a whole;

f.      entry into, termination of, or receipt of notice of termination of (i) any license, distributorship, dealer, sales representative, joint venture, credit, or similar agreement, or (ii) any Contract or transaction involving a total remaining commitment by or to any Acquired Company of at least $10,000;

g.      sale (other than sales of inventory in the Ordinary Course of Business), lease, or other disposition of any asset or property of any Acquired Company or mortgage, pledge, or imposition of any lien or other encumbrance on any material asset or property of any Acquired Company, including the sale, lease, or other disposition of any of the Intellectual Property Assets;

h.      cancellation or waiver of any claims or rights with a value to any Acquired Company in excess of $10,000;

i.      material change in the accounting methods used by any Acquired Company; or

j.      agreement, whether oral or written, by any Acquired Company to do any of the foregoing.

3.17      CONTRACTS; NO DEFAULTS

     a.      Part 3.17(a) of the Disclosure Letter contains a complete and accurate list, and Seller has delivered to Buyer true and complete copies, of:

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(i)      each Applicable Contract that involves performance of services or delivery of goods or materials by one or more Acquired Companies of an amount or value in excess of $10,000;

(ii)      each Applicable Contract that involves performance of services or delivery of goods or materials to one or more Acquired Companies of an amount or value in excess of $10,000;

(iii)      each Applicable Contract that was not entered into in the Ordinary Course of Business and that involves expenditures or receipts of one or more Acquired Companies in excess of $10,000;

(iv)      each lease, rental or occupancy agreement, license, installment and conditional sale agreement, and other Applicable Contract affecting the ownership of, leasing of, title to, use of, or any leasehold or other interest in, any real or personal property (except personal property leases and installment and conditional sales agreements having a value per item or aggregate payments of less than $10,000 and with terms of less than one year);

(v)      each licensing agreement or other Applicable Contract with respect to patents, trademarks, copyrights, or other intellectual property, including agreements with current or former employees, consultants, or contractors regarding the appropriation or the non-disclosure of any of the Intellectual Property Assets;

(vi)      each collective bargaining agreement and other Applicable Contract to or with any labor union or other employee representative of a group of employees;

(vii)      each joint venture, partnership, and other Applicable Contract (however named) involving a sharing of profits, losses, costs, or liabilities by any Acquired Company with any other Person;

(viii)      each Applicable Contract containing covenants that in any way purport to restrict the business activity of any Acquired Company or any Affiliate of an Acquired Company or limit the freedom of any Acquired Company or any Affiliate of an Acquired Company to engage in any line of business or to compete with any Person;

(ix)      each Applicable Contract providing for payments to or by any Person based on sales, purchases, or profits, other than direct payments for goods;

(x)      each power of attorney that is currently effective and outstanding;

(xi)      each Applicable Contract entered into other than in the Ordinary Course of Business that contains or provides for an express undertaking by any Acquired Company to be responsible for consequential damages;

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(xii)      each Applicable Contract for capital expenditures in excess of $10,000;

(xiii)      each written warranty, guaranty, and or other similar undertaking with respect to contractual performance extended by any Acquired Company other than in the Ordinary Course of Business; and

(xiv)      each amendment, supplement, and modification (whether oral or written) in respect of any of the foregoing.

Part 3.17(a) of the Disclosure Letter sets forth reasonably complete details concerning such Contracts, including the parties to the Contracts, the amount of the remaining commitment of the Acquired Companies under the Contracts, and the Acquired Companies' office where details relating to the Contracts are located.

b.      Except as set forth in Part 3.17(b) of the Disclosure Letter:

(i)      neither Seller (and no Related Person of either Seller) has or may acquire any rights under, and neither Seller has or may become subject to any obligation or liability under, any Contract that relates to the business of, or any of the assets owned or used by, any Acquired Company; and

(ii)      to the Knowledge of Seller and the Acquired Companies, no officer, director, agent, employee, consultant, or contractor of any Acquired Company is bound by any Contract that purports to limit the ability of such officer, director, agent, employee, consultant, or contractor to (A) engage in or continue any conduct, activity, or practice relating to the business of any Acquired Company, or (B) assign to any Acquired Company or to any other Person any rights to any invention, improvement, or discovery.

c.      Except as set forth in Part 3.17(c) of the Disclosure Letter, each Contract identified or required to be identified in Part 3.17(a) of the Disclosure Letter is in full force and effect and is valid and enforceable in accordance with its terms.

d.      Except as set forth in Part 3.17(d) of the Disclosure Letter:

(i)      each Acquired Company is, and at all times since formation has been, in full compliance with all applicable terms and requirements of each Contract under which such Acquired Company has or had any obligation or liability or by which such Acquired Company or any of the assets owned or used by such Acquired Company is or was bound;

(ii)      each other Person that has or had any obligation or liability under any Contract under which an Acquired Company has or had any rights is, and at all times since formation has been, in full compliance with all applicable terms and requirements of such Contract;

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(iii)      no event has occurred or circumstance exists that (with or without notice or lapse of time) may contravene, conflict with, or result in a violation or breach of, or give any Acquired Company or other Person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate, or modify, any Applicable Contract; and

(iv)      no Acquired Company has given to or received from any other Person, at any time since formation, any notice or other communication (whether oral or written) regarding any actual, alleged, possible, or potential violation or breach of, or default under, any Contract.

e.      There are no renegotiations of, attempts to renegotiate, or outstanding rights to renegotiate any material amounts paid or payable to any Acquired Company under current or completed Contracts with any Person and, to the Knowledge of Seller and the Acquired Companies, no such Person has made written demand for such renegotiation.

f.      The Contracts relating to the sale, design, manufacture, or provision of products or services by the Acquired Companies have been entered into in the Ordinary Course of Business and have been entered into without the commission of any act alone or in concert with any other Person, or any consideration having been paid or promised, that is or would be in violation of any Legal Requirement.

3.18    INSURANCE

a.      Seller has delivered to Buyer:

(i) true and complete copies of all policies of insurance to which any Acquired Company is a party or under which any Acquired Company, or any director of any Acquired Company, is or has been covered at any time within the three years preceding the date of this Agreement;

(ii) true and complete copies of all pending applications for policies of insurance; and

(iii) any statement by the auditor of any Acquired Company's financial statements with regard to the adequacy of such entity's coverage or of the reserves for claims.

b.      Part 3.18(b) of the Disclosure Letter describes:

(i)      any self-insurance arrangement by or affecting any Acquired Company, including any reserves established thereunder;

(ii)      any contract or arrangement, other than a policy of insurance, for the transfer or sharing of any risk by any Acquired Company; and

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(iii)      all obligations of the Acquired Companies to third parties with respect to insurance (including such obligations under leases and service agreements) and identifies the policy under which such coverage is provided.

c.      Part 3.18(c) of the Disclosure Letter sets forth, by year, for the current policy year and each of the three preceding policy years:

(i)      a summary of the loss experience under each policy;

(ii)      a statement describing each claim under an insurance policy for an amount in excess of $5,000, which sets forth:

(A)      the name of the claimant;

(B)      a description of the policy by insurer, type of insurance, and period of coverage; and

(C)      the amount and a brief description of the claim; and

(iii)      a statement describing the loss experience for all claims that were self-insured, including the number and aggregate cost of such claims.

d.      Except as set forth on Part 3.18(d) of the Disclosure Letter:

(i)      All policies to which any Acquired Company is a party or that provide coverage to either Seller, any Acquired Company, or any director or officer of an Acquired Company:

(A)      are valid, outstanding, and enforceable;

(B)      are issued by an insurer that is financially sound and reputable;

(C)      taken together, provide adequate insurance coverage for the assets and the operations of the Acquired Companies for all risks normally insured against by a Person carrying on (or proposing to carry-on) the same business or businesses as the Acquired Companies;

(D)      are sufficient for compliance with all Legal Requirements and Contracts to which any Acquired Company is a party or by which any of them is bound;

(E)      will continue in full force and effect following the consummation of the Contemplated Transactions; and

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(F)      do not provide for any retrospective premium adjustment or other experienced-based liability on the part of any Acquired Company.

(ii)      No Seller or Acquired Company has received (A) any refusal of coverage or any notice that a defense will be afforded with reservation of rights, or (B) any notice of cancellation or any other indication that any insurance policy is no longer in full force or effect or will not be renewed or that the issuer of any policy is not willing or able to perform its obligations thereunder.

(iii)      The Acquired Companies have paid all premiums due, and have otherwise performed all of their respective obligations, under each policy to which any Acquired Company is a party or that provides coverage to any Acquired Company or director thereof.

(iv)      The Acquired Companies have given notice to the insurer of all claims that may be insured thereby.

3.19      ENVIRONMENTAL MATTERS. Except as set forth in part 3.19 of the Disclosure Letter:

a.      Each Acquired Company is, and at all times has been, in full compliance with, and has not been and is not in violation of or liable under, any Environmental Law. No Seller or Acquired Company has any basis to expect, nor has any of them or any other Person for whose conduct they are or may be held to be responsible received, any actual or Threatened order, notice, or other communication from (i) any Governmental Body or private citizen acting in the public interest, or (ii) the current or prior owner or operator of any Facilities, of any actual or potential violation or failure to comply with any Environmental Law, or of any actual or Threatened obligation to undertake or bear the cost of any Environmental, Health, and Safety Liabilities with respect to any of the Facilities or any other properties or assets (whether real, personal, or mixed) in which Seller or any Acquired Company has had an interest, or with respect to any property or Facility at or to which Hazardous Materials were generated, manufactured, refined, transferred, imported, used, or processed by Seller, any Acquired Company, or any other Person for whose conduct they are or may be held responsible, or from which Hazardous Materials have been transported, treated, stored, handled, transferred, disposed, recycled, or received.

b.      There are no pending or, to the Knowledge of Seller and the Acquired Companies, Threatened claims, Encumbrances, or other restrictions of any nature, resulting from any Environmental, Health, and Safety Liabilities or arising under or pursuant to any Environmental Law, with respect to or affecting any of the Facilities or any other properties and assets (whether real, personal, or mixed) in which Seller or any Acquired Company has or had an interest.

c.      No Seller or Acquired Company has any basis to expect, nor has any of them or any other Person for whose conduct they are or may be held responsible, received, any citation, directive, inquiry, notice, Order, summons, warning, or other communication that relates

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to Hazardous Activity, Hazardous Materials, or any alleged, actual, or potential violation or failure to comply with any Environmental Law, or of any alleged, actual, or potential obligation to undertake or bear the cost of any Environmental, Health, and Safety Liabilities with respect to any of the Facilities or any other properties or assets (whether real, personal, or mixed) in which Seller or any Acquired Company had an interest, or with respect to any property or facility to which Hazardous Materials generated, manufactured, refined, transferred, imported, used, or processed by Seller, any Acquired Company, or any other Person for whose conduct they are or may be held responsible, have been transported, treated, stored, handled, transferred, disposed, recycled, or received.

d.      No Seller or Acquired Company, or any other Person for whose conduct they are or may be held responsible, has any Environmental, Health, and Safety Liabilities with respect to the Facilities or with respect to any other properties and assets (whether real, personal, or mixed) in which Seller or any Acquired Company (or any predecessor), has or had an interest, or at any property geologically or hydrologically adjoining the Facilities or any such other property or assets.

e.      There are no Hazardous Materials present on or in the Environment at the Facilities or at any geologically or hydrologically adjoining property, including any Hazardous Materials contained in barrels, above or underground storage tanks, landfills, land deposits, dumps, equipment (whether moveable or fixed) or other containers, either temporary or permanent, and deposited or located in land, water, sumps, or any other part of the Facilities or such adjoining property, or incorporated into any structure therein or thereon. No Seller, Acquired Company, any other Person for whose conduct they are or may be held responsible, or any other Person, has permitted or conducted, or is aware of, any Hazardous Activity conducted with respect to the Facilities or any other properties or assets (whether real, personal, or mixed) in which Seller or any Acquired Company has or had an interest.

f.      There has been no Release or, to the Knowledge of Seller and the Acquired Companies, Threat of Release, of any Hazardous Materials at or from the Facilities or at any other locations where any Hazardous Materials were generated, manufactured, refined, transferred, produced, imported, used, or processed from or by the Facilities, or from or by any other properties and assets (whether real, personal, or mixed) in which Seller or any Acquired Company has or had an interest, or any geologically or hydrologically adjoining property, whether by Seller, any Acquired Company, or any other Person.

g.      Seller has delivered to Buyer true and complete copies and results of any reports, studies, analyses, tests, or monitoring possessed or initiated by Seller or any Acquired Company pertaining to Hazardous Materials or Hazardous Activities in, on, or under the Facilities, or concerning compliance by Seller, any Acquired Company, or any other Person for whose conduct they are or may be held responsible, with Environmental Laws.

3.20      EMPLOYEES

a.      Part 3.13(a) of the Disclosure Letter contains a complete and accurate list of the following information for each employee or director of the Acquired Companies,

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including each employee on leave of absence or layoff status: employer; name; job title; current compensation paid or payable and any change in compensation since formation; vacation accrued; and service credited for purposes of vesting and eligibility to participate under any Acquired Company's pension, retirement, profit-sharing, thrift-savings, deferred compensation, stock bonus, stock option, cash bonus, employee stock ownership (including investment credit or payroll stock ownership), severance pay, insurance, medical, welfare, or vacation plan, other Employee Pension Benefit Plan or Employee Welfare Benefit Plan, or any other employee benefit plan or any Director Plan.

b.      No employee or director of any Acquired Company is a party to, or is otherwise bound by, any agreement or arrangement, including any confidentiality, noncompetition, or proprietary rights agreement, between such employee or director and any other Person ("Proprietary Rights Agreement") that in any way adversely affects or will affect (i) the performance of his duties as an employee or director of the Acquired Companies, or (ii) the ability of any Acquired Company to conduct its business, including any Proprietary Rights Agreement with Seller or the Acquired Companies by any such employee or director. To Seller’s Knowledge, no director, officer, or other key employee of any Acquired Company intends to terminate his employment with such Acquired Company.

c.      Part 3.13(a) of the Disclosure Letter also contains a complete and accurate list of the following information for each retired employee or director of the Acquired Companies, or their dependents, receiving benefits or scheduled to receive benefits in the future: name, pension benefit, pension option election, retiree medical insurance coverage, retiree life insurance coverage, and other benefits.

3.21      LABOR RELATIONS; COMPLIANCE.

a.      Since formation, no Acquired Company has been or is a party to any collective bargaining or other labor Contract. Since formation, there has not been, there is not presently pending or existing, and there is not Threatened,

              (i)      any strike, slowdown, picketing, work stoppage, or employee grievance process,

(ii)      any Proceeding against or affecting any Acquired Company relating to the alleged violation of any Legal Requirement pertaining to labor relations or employment matters, including any charge or complaint filed by an employee or union with the National Labor Relations Board, the Equal Employment Opportunity Commission, or any comparable Governmental Body, organizational activity, or other labor or employment dispute against or affecting any of the Acquired Companies or their premises, or

(iii)      any application for certification of a collective bargaining agent. No event has occurred or circumstance exists that could provide the basis for any work stoppage or other labor dispute.

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b.      There is no lockout of any employees by any Acquired Company, and no such action is contemplated by any Acquired Company.

c.      Each Acquired Company has complied in all respects with all Legal Requirements relating to employment, equal employment opportunity, nondiscrimination, immigration, wages, hours, benefits, collective bargaining, the payment of social security and similar taxes, occupational safety and health, and plant closing. No Acquired Company is liable for the payment of any compensation, damages, taxes, fines, penalties, or other amounts, however designated, for failure to comply with any of the foregoing Legal Requirements.

3.22      INTELLECTUAL PROPERTY

a.      Intellectual Property Assets -- The term "Intellectual Property Assets" includes:

(i)      the names used by any Acquired Company, all fictional business names, trading names, registered and unregistered trademarks, service marks, and applications (collectively, "Marks");

(ii)      all patents, patent applications, and inventions and discoveries that may be patentable (collectively, "Patents");

(iii)      all copyrights in both published works and unpublished works (collectively, "Copyrights");

(iv)      all rights in mask works (collectively, "Rights in Mask Works"); and

(v)      all know-how, trade secrets, confidential information, customer lists, software, technical information, data, process technology, plans, drawings, and blue prints (collectively, "Trade Secrets"); owned, used, or licensed by any Acquired Company as licensee or licensor.

b.      Agreements -- Part 3.22(b) of the Disclosure Letter contains a complete and accurate list and summary description, including any royalties paid or received by the Acquired Companies, of all Contracts relating to the Intellectual Property Assets to which any Acquired Company is a party or by which any Acquired Company is bound, except for any license implied by the sale of a product and perpetual, paid-up licenses for commonly available software programs with a value of less than $5,000 under which an Acquired Company is the licensee. There are no outstanding and, to Seller’s Knowledge, no Threatened disputes or disagreements with respect to any such agreement.

c.      Know-How Necessary for the Business

(i)      The Intellectual Property Assets are all those necessary for the operation of the Acquired Companies’ businesses as they are currently conducted or as

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reflected in the business plan given to Buyer. One or more of the Acquired Companies is the owner of all right, title, and interest in and to each of the Intellectual Property Assets, free and clear of all liens, security interests, charges, encumbrances, equities, and other adverse claims, and has the right to use without payment to a third party all of the Intellectual Property Assets.

(ii)       Except as set forth in Part 3.22(c) of the Disclosure Letter, all former and current employees of each Acquired Company have executed written Contracts with one or more of the Acquired Companies that assign to one or more of the Acquired Companies all rights to any inventions, improvements, discoveries, or information relating to the business of any Acquired Company. No employee of any Acquired Company has entered into any Contract that restricts or limits in any way the scope or type of work in which the employee may be engaged or requires the employee to transfer, assign, or disclose information concerning his work to anyone other than one or more of the Acquired Companies.

d.      Patents

(i)      Part 3.22(d) of the Disclosure Letter contains a complete and accurate list and summary description of all Patents. One or more of the Acquired Companies is the owner of all right, title, and interest in and to each of the Patents, free and clear of all liens, security interests, charges, encumbrances, entities, and other adverse claims.

(ii)      All of the issued Patents are currently in compliance with formal legal requirements (including payment of filing, examination, and maintenance fees and proofs of working or use), are valid and enforceable, and are not subject to any maintenance fees or taxes or actions falling due within ninety days after the Closing Date.

(iii)      No Patent has been or is now involved in any interference, reissue, reexamination, or opposition proceeding. To Seller’s Knowledge, there is no potentially interfering patent or patent application of any third party.

(iv)      No Patent is infringed or, to Seller’s Knowledge, has been challenged or Threatened in any way. None of the products manufactured and sold, nor any process or know-how used, by any Acquired Company infringes or is alleged to infringe any patent or other proprietary right of any other Person.

(v)      All products made, used, or sold under the Patents have been marked with the proper patent notice.

e.      Trademarks

(i)      Part 3.22(e) of Disclosure Letter contains a complete and accurate list and summary description of all Marks. One or more of the Acquired Companies is the

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owner of all right, title, and interest in and to each of the Marks, free and clear of all liens, security interests, charges, encumbrances, equities, and other adverse claims.

(ii)      All Marks that have been registered with the United States Patent and Trademark Office or in the comparable Governmental Body of any other country are currently in compliance with all formal legal requirements (including the timely post-registration filing of affidavits of use and incontestability and renewal applications), are valid and enforceable, and are not subject to any maintenance fees or taxes or actions falling due within ninety days after the Closing Date.

(iii)      No Mark has been or is now involved in any opposition, invalidation, or cancellation and, to Seller’s Knowledge, no such action is Threatened with the respect to any of the Marks.

(iv)      To Seller’s Knowledge, there is no potentially interfering trademark or trademark application of any third party.

(v)      No Mark is infringed or, to Seller’s Knowledge, has been challenged or Threatened in any way. None of the Marks used by any Acquired Company infringes or is alleged to infringe any trade name, trademark, or service mark of any third party.

(vi)      All products and materials containing a Mark bear the proper federal registration notice where permitted by law.

f.      Copyrights

(i)      Part 3.22(f) of the Disclosure Letter contains a complete and accurate list and summary description of all Copyrights. One or more of the Acquired Companies is the owner of all right, title, and interest in and to each of the Copyrights, free and clear of all liens, security interests, charges, encumbrances, equities, and other adverse claims.

(ii)      All the Copyrights have been registered and are currently in compliance with formal legal requirements, are valid and enforceable, and are not subject to any maintenance fees or taxes or actions falling due within ninety days after the date of Closing.

(iii)      No Copyright is infringed or, to Seller’s Knowledge, has been challenged or Threatened in any way. None of the subject matter of any of the Copyrights infringes or is alleged to infringe any copyright of any third party or is a derivative work based on the work of a third party.

(iv)      All works encompassed by the Copyrights have been marked with the proper copyright notice.

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g.      Trade Secrets

(i)      With respect to each Trade Secret, the documentation relating to such Trade Secret is current, accurate, and sufficient in detail and content to identify and explain it and to allow its full and proper use without reliance on the knowledge or memory of any individual.

(ii)      Seller and the Acquired Companies have taken all reasonable precautions to protect the secrecy, confidentiality, and value of their Trade Secrets.

(iii)      One or more of the Acquired Companies has good title and an absolute (but not necessarily exclusive) right to use the Trade Secrets. The Trade Secrets are not part of the public knowledge or literature, and, to Seller’s Knowledge, have not been used, divulged, or appropriated either for the benefit of any Person (other than one or more of the Acquired Companies) or to the detriment of the Acquired Companies. No Trade Secret is subject to any adverse claim or has been challenged or Threatened in any way.

3.23      CERTAIN PAYMENTS. Since formation, no Acquired Company or director, officer, agent, or employee of any Acquired Company, or any other Person associated with or acting for or on behalf of any Acquired Company, has directly or indirectly

a.      made any contribution, gift, bribe, rebate, payoff, influence payment, kickback, or other payment to any Person, private or public, regardless of form, whether in money, property, or services

(i)      to obtain favorable treatment in securing business,

(ii)      to pay for favorable treatment for business secured,

(iii)      to obtain special concessions or for special concessions already obtained, for or in respect of any Acquired Company or any Affiliate of an Acquired Company, or

(iv)      in violation of any Legal Requirement,

b.      established or maintained any fund or asset that has not been recorded in the books and records of the Acquired Companies.

3.24      DISCLOSURE

a.      No representation or warranty of Seller in this Agreement and no statement in the Disclosure Letter omits to state a material fact necessary to make the statements herein or therein, in light of the circumstances in which they were made, not misleading.

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b.      No notice given pursuant to Section 5.5 will contain any untrue statement or omit to state a material fact necessary to make the statements therein or in this Agreement, in light of the circumstances in which they were made, not misleading.

c.      There is no fact known to either Seller that has specific application to either Seller or any Acquired Company (other than general economic or industry conditions) and that materially adversely affects or, as far as the Seller can reasonably foresee, materially Threatens, the assets, business, prospects, financial condition, or results of operations of the Acquired Companies (each on an unconsolidated basis) that has not been set forth in this Agreement or the Disclosure Letter.

3.25      RELATIONSHIPS WITH RELATED PERSONS. Except as set forth in Part 3.25 of the Disclosure Letter,

a.      No Seller or any Related Person of Seller or of any Acquired Company has, or since the first day of the next to last completed fiscal year of the Acquired Companies has had, any interest in any property (whether real, personal, or mixed and whether tangible or intangible), used in or pertaining to the Acquired Companies' businesses.

b.      No Seller or any Related Person of Seller or of any Acquired Company is, or since the first day of the next to last completed fiscal year of the Acquired Companies has owned (of record or as a beneficial owner) an equity interest or any other financial or profit interest in, a Person that has (i) had business dealings or a material financial interest in any transaction with any Acquired Company other than business dealings or transactions conducted in the Ordinary Course of Business with the Acquired Companies at substantially prevailing market prices and on substantially prevailing market terms, or (ii) engaged in competition with any Acquired Company with respect to any line of the products or services of such Acquired Company (a "Competing Business") in any market presently served by such Acquired Company.

c.      No Seller or any Related Person of Seller or of any Acquired Company is a party to any Contract with, or has any claim or right against, any Acquired Compan

3.26      BROKERS OR FINDERS. Seller and its agents have incurred an obligation to an affiliate of David W. Brenman, President of Buyer (“Brenman”) in accordance with a previous agreement pursuant to the terms of which Seller is required to deliver to Brenman up to 277,879 shares of Buyer’s common stock upon or immediately after the Closing of the Contemplated Transactions. The total amount of shares to be delivered to Brenman by Seller shall be based on the actual amount of capitalization of Buyer on the date of Closing, and shall be reduced pro-rata to the extent that the book value of Buyer at the Closing Date is less than $50 million. Other than the obligation to Brenman, Seller and their agents have incurred no obligation or liability, contingent or otherwise, for brokerage or finders' fees or agents' commissions or other similar payment in connection with this Agreement.

ARTICLE 4      REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and warrants to Seller as follows:

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4.1      ORGANIZATION AND GOOD STANDING. Buyer is a corporation duly organized, validly existing, and in good standing under the laws of the State of Colorado.

4.2      CAPITALIZATION OF BUYER.

a.      At the Closing Date and immediately before the Closing, the Buyer will have a book value of not less than $50,000,000 and will have a capitalization as follows, both as reflected on pro forma financial statements based on the Buyer’s most recently-published audited or unaudited financial statements, as prepared by Buyer’s independent registered public accountants:

(i)      Current capitalization as of March 31, 2009: 500,000,000 shares of common stock authorized, 1,233,000 shares of common stock outstanding; 100,000,000 shares of preferred stock authorized, no shares outstanding;

(ii)      540,000 shares of common stock to be issued at $5.00 per share pursuant to an agreement announced by current report on Form 8-K dated June 24, 2009;

(iii)      1,000,000 shares of common stock which Buyer may elect to issue from time-to-time in its sole discretion at not less than $5.00 per share; and

(iv)      Up to or more than 5,000,000 shares of common stock which Buyer will issue at not less than $10.00 per share to obtain financing necessary to meet the book value requirements set forth above.

(v)      8,700,000 shares of common stock (the “Cogenco Shares”) and one share of Cogenco Series A Preferred Stock as a result of the completion of the Contemplated Transaction.

b.      Following the Closing Date, the Buyer will not issue any shares for a price less than $10.00 per share unless: (i) the Buyer offers the Seller a 30-day right of first refusal to purchase such shares, or (ii) the Buyer’s shares are traded on a stock exchange registered under the Securities Exchange Act and the average closing price on the stock exchange for more than thirty trading days has been less than $10.00 per share and more than six months has passed since the Closing Date. In the case of clause (ii) of this Section, the Buyer may issue shares of its common stock for a price not less than 90% of the average closing price for the thirty day period. This provision Section 4.2(b) shall survive the Closing of the Contemplated Transactions until the Seller owns directly fewer than 5,000,000 Cogenco Shares in its own name at which time this provision expires.

4.3      AUTHORITY; NO CONFLICT

a.      This Agreement constitutes the legal, valid, and binding obligation of Buyer, enforceable against Buyer in accordance with its terms. Upon the execution and delivery by Buyer of the agreements to be delivered by the Seller in connection with the completion of the Contemplated Transaction (collectively, the "Buyer's Closing Documents"), the Buyer's

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Closing Documents will each constitute the legal, valid, and binding obligations of Buyer, enforceable against Buyer in accordance with their respective terms. Buyer has the absolute and unrestricted right, power, and authority to execute and deliver this Agreement and the Buyer's Closing Documents and to perform its obligations under this Agreement and the Buyer's Closing Documents.

b.      Except as set forth in Schedule 4.2, neither the execution and delivery of this Agreement by Buyer nor the consummation or performance of any of the Contemplated Transactions by Buyer will give any Person the right to prevent, delay, or otherwise interfere with any of the Contemplated Transactions pursuant to:

(i)      any provision of Buyer's Organizational Documents;

(ii)      any resolution adopted by the board of directors or the stockholders of Buyer;

(iii)      any Legal Requirement or Order to which Buyer may be subject; or

(iv)      any Contract to which Buyer is a party or by which Buyer may be bound.

Except as set forth in Schedule 4.2, Buyer is not and will not be required to obtain any Consent from any Person in connection with the execution and delivery of this Agreement or the consummation or performance of any of the Contemplated Transactions.

4.4      INVESTMENT INTENT. Buyer is acquiring the Shares for its own account and not with a view to their distribution within the meaning of § 2(a)(11) of the Securities Act.

4.5      CERTAIN PROCEEDINGS. There is no pending Proceeding that has been commenced against Buyer and that challenges, or may have the effect of preventing, delaying, making illegal, or otherwise interfering with, any of the Contemplated Transactions. To Buyer's Knowledge, no such Proceeding has been Threatened.

4.6      REGISTRATION AND STOCK EXCHANGE LISTING. Following the Closing Date, the Buyer will use its best efforts to:

     a.      File a Form 8-K with the Securities and Exchange Commission reporting the completion of the Contemplated Transactions meeting the requirements of the applicable items of Form 8-K (which Form 8-K will be approved by the parties at or before the Closing) as required by Form 8-K and other rules and regulations of the Securities and Exchange Commission;

     b.      File a Form 10 or Form 8-A registration statement with the Securities and Exchange Commission to register the Buyer’s common stock pursuant to Sections 12(b) or 12(g) of the Securities Exchange Act, as appropriate and seek effectiveness thereof;

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c.      File a registration statement on Form S-4 (or other appropriate form) by which the Seller will be entitled to distribute the Cogenco Shares to its shareholders unless the Buyer is able to complete the distribution without registration under the Securities Act in accordance with SEC Staff Legal Bulletin 4 (September 16, 1997, available at http://www.sec.gov/interps/legal/slbcf4.txt), as such Staff Legal Bulletin may be modified or amended, or in accordance with a no action letter obtained from the Securities and Exchange Commission, compliance with which must be established to the reasonable satisfaction of the Buyer.

d.      Within 18 months following the Closing Date, apply for listing of the Buyer’s common stock on one of the following stock exchanges registered under Section 17 of the Securities Exchange Act: New York Stock Exchange, the NYSE Amex Stock Exchange, Nasdaq Global Select Market, Nasdaq Global Market, Nasdaq Capital Market, or other stock exchange reasonably acceptable to the Seller.

e.     Following or concurrent with the completion of the foregoing items 4.6(a) through (d), retaining an experienced investor relations consultant and engage in an investor relations program reasonably designed to encourage interest in the market for the Buyer’s common stock, based on accurate disclosure and the Buyer’s performance.

f.      This provision shall survive the Closing of the Contemplated Transactions.

4.7      BUYER’S PUBLIC REPORTS. The reports that the Buyer has filed with the U.S. Securities and Exchange Commission (which reports since 1996 are publicly available at www.sec.gov) are accurate and complete in all material respects as of the date such reports were filed, and no event has occurred since the filing of the most recent report has occurred which would require the disclosure in such report to be modified in any material respect except as reflected in this Agreement, which Agreement the Buyer will file with the Securities and Exchange Commission within four business days following the execution of this Agreement on Form 8-K. Buyer will undertake to file this Agreement and the related Form 8-K as soon as possible following the execution of this Agreement by both parties in advance of the four business day requirement if reasonably possible.

4.8      BROKERS OR FINDERS. Buyer and its officers and agents have incurred no obligation or liability, contingent or otherwise, for brokerage or finders' fees or agents' commissions or other similar payment in connection with this Agreement and will indemnify and hold Seller harmless from any such payment alleged to be due by or through Buyer as a result of the action of Buyer or its officers or agents.

ARTICLE 5      COVENANTS OF SELLER PRIOR TO CLOSING DATE

5.1      ACCESS AND INVESTIGATION. Between the date of this Agreement and the Closing Date, Seller will, and will cause each Acquired Company and its Representatives to, (a) afford Buyer and its Representatives and prospective lenders and their Representatives (collectively, "Buyer's Advisors") full and free access to each Acquired Company's personnel,

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properties (including subsurface testing), contracts, books and records, and other documents and data, (b) furnish Buyer and Buyer's Advisors with copies of all such contracts, books and records, and other existing documents and data as Buyer may reasonably request, and (c) furnish Buyer and Buyer's Advisors with such additional financial, operating, and other data and information as Buyer may reasonably request.

     5.2      OPERATION OF THE BUSINESSES OF THE ACQUIRED COMPANIES. Between the date of this Agreement and the Closing Date, Seller will, and will cause each Acquired Company to:

a.      conduct the business of such Acquired Company only in the Ordinary Course of Business;

b.      use their Best Efforts to preserve intact the current business organization of such Acquired Company, keep available the services of the current officers, employees, and agents of such Acquired Company, and maintain the relations and good will with suppliers, customers, landlords, creditors, employees, agents, and others having business relationships with such Acquired Company;

c.      confer with Buyer concerning operational matters of a material nature; and

d.      otherwise report periodically to Buyer concerning the status of the business, operations, and finances of such Acquired Company.

     5.3      NEGATIVE COVENANT. Except as otherwise expressly permitted by this Agreement, between the date of this Agreement and the Closing Date, Seller will not, and will cause each Acquired Company not to, without the prior consent of Buyer, take any affirmative action, or fail to take any reasonable action within their or its control, as a result of which any of the changes or events listed in Section 3.16 is likely to occur.

     5.4      REQUIRED APPROVALS. As promptly as practicable after the date of this Agreement, Seller will, and will cause each Acquired Company to, make all filings required by Legal Requirements to be made by them in order to consummate the Contemplated Transactions (including all filings to the extent required under the HSR Act). Between the date of this Agreement and the Closing Date, Seller will, and will cause each Acquired Company to, (a) cooperate with Buyer with respect to all filings that Buyer elects to make or is required by Legal Requirements to make in connection with the Contemplated Transactions, and (b) cooperate with Buyer in obtaining all consents identified in Schedule 4.2 (including taking all actions requested by Buyer to cause early termination of any applicable waiting period under the HSR Act, if any).

     5.5      NOTIFICATION. Between the date of this Agreement and the Closing Date, Seller will promptly notify Buyer in writing if Seller or any Acquired Company becomes aware of any fact or condition that causes or constitutes a Breach of any of Seller’s representations and warranties as of the date of this Agreement, or if Seller or any Acquired Company becomes aware of the occurrence after the date of this Agreement of any fact or condition that would (except as expressly contemplated by this Agreement) cause or constitute a Breach of any such

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representation or warranty had such representation or warranty been made as of the time of occurrence or discovery of such fact or condition. Should any such fact or condition require any change in the Disclosure Letter if the Disclosure Letter were dated the date of the occurrence or discovery of any such fact or condition, Seller will promptly deliver to Buyer a supplement to the Disclosure Letter specifying such change. During the same period, Seller will promptly notify Buyer of the occurrence of any Breach of any covenant of Seller in this Article 5 or of the occurrence of any event that may make the satisfaction of the conditions in Article 7 impossible or unlikely.

     5.6      PAYMENT OF INDEBTEDNESS BY RELATED PERSONS. Except as expressly provided in this Agreement, Seller will cause all indebtedness owed to an Acquired Company by either Seller or any Related Person of either Seller to be paid in full prior to Closing except as are set forth in the Disclosure Letter (which Disclosure Letter will also set forth the terms for payment to the Related Person).

     5.7      NO NEGOTIATION. Until such time, if any, as this Agreement is terminated pursuant to Article 9, Seller will not, and will cause each Acquired Company and each of their Representatives not to, directly or indirectly solicit, initiate, or encourage any inquiries or proposals from, discuss or negotiate with, provide any non-public information to, or consider the merits of any unsolicited inquiries or proposals from, any Person (other than Buyer) relating to any transaction involving the sale of the business or assets (other than in the Ordinary Course of Business) of any Acquired Company, or any of the capital stock of any Acquired Company, or any merger, consolidation, business combination, or similar transaction involving any Acquired Company.

     5.8      BEST EFFORTS. Between the date of this Agreement and the Closing Date, Seller will use their Best Efforts to cause the conditions in Articles 7 and 8 to be satisfied.

ARTICLE 6      COVENANTS OF BUYER PRIOR TO CLOSING DATE

     6.1      APPROVALS OF GOVERNMENTAL BODIES. As promptly as practicable after the date of this Agreement, Buyer will, and will cause each of its Related Persons to, make all filings required by Legal Requirements to be made by them to consummate the Contemplated Transactions (including all filings under the HSR Act). Between the date of this Agreement and the Closing Date, Buyer will, and will cause each Related Person to, cooperate with Seller with respect to all filings that Seller is required by Legal Requirements to make in connection with the Contemplated Transactions, and (ii) cooperate with Seller in obtaining all consents identified in Part 3.2 of the Disclosure Letter; provided that this Agreement will not require Buyer to dispose of or make any change in any portion of its business or to incur any other burden to obtain a Governmental Authorization.

     6.2      BEST EFFORTS. Except as set forth in the proviso to Section 6.1, between the date of this Agreement and the Closing Date, Buyer will use its Best Efforts to cause the conditions in Articles 7 and 8 to be satisfied.

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ARTICLE 7      CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE. Buyer's obligation to purchase the Shares and to take the other actions required to be taken by Buyer at the Closing is subject to the satisfaction, at or prior to the Closing, of each of the following conditions (any of which may be waived by Buyer, in whole or in part):

7.1      ACCURACY OF REPRESENTATIONS

     a.      All of Seller’s representations and warranties in this Agreement (considered collectively), and each of these representations and warranties (considered individually), must have been accurate in all material respects as of the date of this Agreement, and must be accurate in all material respects as of the Closing Date as if made on the Closing Date, without giving effect to any supplement to the Disclosure Letter.

     b.      Each of Seller’s representations and warranties must have been accurate in all respects as of the date of this Agreement, and must be accurate in all respects as of the Closing Date as if made on the Closing Date, without giving effect to any supplement to the Disclosure Letter.

7.2      SELLER’S PERFORMANCE

     a.      All of the covenants and obligations that Seller is required to perform or to comply with pursuant to this Agreement at or prior to the Closing (considered collectively), and each of these covenants and obligations (considered individually), must have been duly performed and complied with in all material respects.

     b.      Each document required to be delivered pursuant to Section 2.4 must have been delivered, and each of the other covenants and obligations in Sections 5.4 and 5.8 must have been performed and complied with in all respects.

     c.      GSE shall have received commitments from the Spanish federal government or any local government to support the contemplated construction of a plant to manufacture hi-tech solar panels using thin film technology based on current plans, which commitment (the “Spanish Subsidies Commitment”) must be on terms and conditions and with security reasonably acceptable to the Buyer and provide for subsidies of at least €20,000,000.

     7.3      CONSENTS. Each of the Consents identified in Part 3.2 of the Disclosure Letter, and each Consent identified in Schedule 4.2, must have been obtained and must be in full force and effect.

     7.4      ADDITIONAL DOCUMENTS. Each of the following documents must have been delivered to Buyer:

     a.      an opinion of counsel to Seller (which must be reasonably acceptable to the Buyer), dated the Closing Date as to the enforceability of this Agreement against the Seller and each Acquired Company in accordance with its terms, and such other matters as the Buyer may reasonably request;

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b.      estoppel certificates by which persons with significant contracts or other documentary relationships with any of the Acquired Companies acknowledge that such contracts or documentary relationships are in full force and effect, and no basis for declaration of default exists, in form reasonably acceptable to the Buyer and executed by persons required by Buyer, dated as of a date not more than 30 days prior to the Closing Date; and

c.      such other documents as Buyer may reasonably request for the purpose of (i) enabling its counsel to provide the opinion referred to in Section 8.4(a), (ii) evidencing the accuracy of any of Seller’s representations and warranties, (iii) evidencing the performance by either Seller of, or the compliance by the Seller with, any covenant or obligation required to be performed or complied with by the Seller, (iv) evidencing the satisfaction of any condition referred to in this Article 7, or (v) otherwise facilitating the consummation or performance of any of the Contemplated Transactions.

     7.5      NO PROCEEDINGS. Since the date of this Agreement, there must not have been commenced or Threatened against Buyer, or against any Person affiliated with Buyer, any Proceeding (a) involving any challenge to, or seeking damages or other relief in connection with, any of the Contemplated Transactions, or (b) that may have the effect of preventing, delaying, making illegal, or otherwise interfering with any of the Contemplated Transactions.

     7.6      NO CLAIM REGARDING STOCK OWNERSHIP OR SALE PROCEEDS. There must not have been made or Threatened by any Person any claim asserting that such Person

a.      is the holder or the beneficial owner of, or has the right to acquire or to obtain beneficial ownership of, any stock of, or any other voting, equity, or ownership interest in, any of the Acquired Companies, or

b.      is entitled to all or any portion of the Purchase Price payable for the Shares.

     7.7      NO PROHIBITION. Neither the consummation nor the performance of any of the Contemplated Transactions will, directly or indirectly (with or without notice or lapse of time), materially contravene, or conflict with, or result in a material violation of, or cause Buyer or any Person affiliated with Buyer to suffer any material adverse consequence under, (a) any applicable Legal Requirement or Order, or (b) any Legal Requirement or Order that has been published, introduced, or otherwise proposed by or before any Governmental Body.

ARTICLE 8      CONDITIONS PRECEDENT TO SELLER’S OBLIGATION TO CLOSE. Seller’s obligation to sell the Shares and to take the other actions required to be taken by Seller at the Closing is subject to the satisfaction, at or prior to the Closing, of each of the following conditions (any of which may be waived by Seller, in whole or in part):

     8.1      ACCURACY OF REPRESENTATIONS. All of Buyer's representations and warranties in this Agreement (considered collectively), and each of these representations and

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warranties (considered individually), must have been accurate in all material respects as of the date of this Agreement and must be accurate in all material respects as of the Closing Date as if made on the Closing Date.

     8.2      CAPITALIZATION, BOOK VALUE AND AVAILABLE WORKING CAPITAL. As of the close of the last fiscal period prior to the Closing Date (as adjusted for any issuance of stock subsequent thereto, including any issuance to occur at the Closing):

a.      The Purchase Price will represent not less than 40% of the outstanding capital stock and voting stock of the Buyer;

b.      The Buyer will have a book value calculated in accordance with GAAP of at least $50,000,000.

8.3      BUYER'S PERFORMANCE

a.      All of the covenants and obligations that Buyer is required to perform or to comply with pursuant to this Agreement at or prior to the Closing (considered collectively), and each of these covenants and obligations (considered individually), must have been performed and complied with in all material respects.

b.      Buyer must have delivered each of the documents required to be delivered by Buyer pursuant to Section 2.4 and must have made the payments required to be made by Buyer pursuant to Sections 2.4(b)(i) and 2.4(b)(ii) .

     8.4      CONSENTS. Each of the Consents identified in Part 3.2 of the Disclosure Letter must have been obtained and must be in full force and effect.

     8.5      ADDITIONAL DOCUMENTS. Buyer must have caused the following documents to be delivered to Seller:

a.      an opinion of Burns, Figa & Will, P.C. or other counsel to Buyer, dated the Closing Date as to the enforceability of this Agreement against the Buyer in accordance with its terms, and such other matters as the Seller may reasonably request; and

b.      such other documents as Seller may reasonably request for the purpose of (i) enabling their counsel to provide the opinion referred to in Section 7.4(a), (ii) evidencing the accuracy of any representation or warranty of Buyer, (iii) evidencing the performance by Buyer of, or the compliance by Buyer with, any covenant or obligation required to be performed or complied with by Buyer, (ii) evidencing the satisfaction of any condition referred to in this Article 8, or (v) otherwise facilitating the consummation of any of the Contemplated Transactions.

     8.6      NO INJUNCTION. There must not be in effect any Legal Requirement or any injunction or other Order that (a) prohibits the sale of the Shares by Seller to Buyer, and (b) has been adopted or issued, or has otherwise become effective, since the date of this Agreement.

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ARTICLE 9      TERMINATION

     9.1      TERMINATION EVENTS. This Agreement may, by notice given prior to or at the Closing, be terminated:

a.      by either Buyer or Seller if a material Breach of any provision of this Agreement has been committed by the other party and such Breach has not been waived;

b.      (i) by Buyer if any of the conditions in Article 7 has not been satisfied as of the Closing Date or if satisfaction of such a condition is or becomes impossible (other than through the failure of Buyer to comply with its obligations under this Agreement) and Buyer has not waived such condition on or before the Closing Date; or (ii) by Seller, if any of the conditions in Article 8 has not been satisfied of the Closing Date or if satisfaction of such a condition is or becomes impossible (other than through the failure of Seller to comply with their obligations under this Agreement) and Seller has not waived such condition on or before the Closing Date;

c.      by mutual consent of Buyer and Seller; or

d.      by either Buyer or Seller if the Closing has not occurred (other than through the failure of any party seeking to terminate this Agreement to comply fully with its obligations under this Agreement) on or before March 31, 2010, or such later date as the parties may agree upon.

     9.2      EFFECT OF TERMINATION. Each party's right of termination under Section 9.1 is in addition to any other rights it may have under this Agreement or otherwise, and the exercise of a right of termination will not be an election of remedies. If this Agreement is terminated pursuant to Section 9.1, all further obligations of the parties under this Agreement will terminate, except that the obligations in Sections 11.1 and 11.3 will survive; provided, however, that if this Agreement is terminated by a party because of the Breach of the Agreement by the other party or because one or more of the conditions to the terminating party's obligations under this Agreement is not satisfied as a result of the other party's failure to comply with its obligations under this Agreement, the terminating party's right to pursue all legal remedies will survive such termination unimpaired.

ARTICLE 10      INDEMNIFICATION; REMEDIES

     10.1      SURVIVAL; RIGHT TO INDEMNIFICATION NOT AFFECTED BY KNOWLEDGE. All representations, warranties, covenants, and obligations in this Agreement, the Disclosure Letter, the supplements to the Disclosure Letter, the certificate delivered pursuant to Section 2.4(a)(v), and any other certificate or document delivered pursuant to this Agreement will survive the Closing. The right to indemnification, payment of Damages or other remedy based on such representations, warranties, covenants, and obligations will not be affected by any investigation conducted with respect to, or any Knowledge acquired (or capable of being acquired) at any time, whether before or after the execution and delivery of this Agreement or

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the Closing Date, with respect to the accuracy or inaccuracy of or compliance with, any such representation, warranty, covenant, or obligation. The waiver of any condition based on the accuracy of any representation or warranty, or on the performance of or compliance with any covenant or obligation, will not affect the right to indemnification, payment of Damages, or other remedy based on such representations, warranties, covenants, and obligations.

     10.2      INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLER. Seller will indemnify and hold harmless Buyer, the Acquired Companies, and their respective Representatives, stockholders, controlling persons, and affiliates (collectively, the "Indemnified Persons") for, and will pay to the Indemnified Persons the amount of, any loss, liability, claim, damage (including incidental and consequential damages), expense (including costs of investigation and defense and reasonable attorneys' fees) or diminution of value, whether or not involving a third-party claim (collectively, "Damages"), arising, directly or indirectly, from or in connection with:

a.      any Breach of any representation or warranty made by Seller in this Agreement (without giving effect to any supplement to the Disclosure Letter), the Disclosure Letter, the supplements to the Disclosure Letter, or any other certificate or document delivered by Seller pursuant to this Agreement;

b.      any Breach of any representation or warranty made by Seller in this Agreement as if such representation or warranty were made on and as of the Closing Date without giving effect to any supplement to the Disclosure Letter, other than any such Breach that is disclosed in a supplement to the Disclosure Letter and is expressly identified in the certificate delivered pursuant to Section 2.4(a)(v) as having caused the condition specified in Section 7.1 not to be satisfied;

c.      any Breach by either Seller of any covenant or obligation of such Seller in this Agreement;

d.      any product shipped or manufactured by, or any services provided by, any Acquired Company prior to the Closing Date;

e.      any matter disclosed in the Disclosure Letter; or

f.      any claim by any Person for brokerage or finder's fees or commissions or similar payments based upon any agreement or understanding alleged to have been made by any such Person with either Seller or any Acquired Company (or any Person acting on their behalf) in connection with any of the Contemplated Transactions.

The remedies provided in this Section 10.2 will not be exclusive of or limit any other remedies that may be available to Buyer or the other Indemnified Persons.

     10.3      INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLER --ENVIRONMENTAL MATTERS. In addition to the provisions of Section 10.2, Seller will indemnify and hold harmless Buyer, the Acquired Companies, and the other Indemnified Persons

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for, and will pay to Buyer, the Acquired Companies, and the other Indemnified Persons the amount of, any Damages (including costs of cleanup, containment, or other remediation) arising, directly or indirectly, from or in connection with:

a.      any Environmental, Health, and Safety Liabilities arising out of or relating to:

(i)      (A) the ownership, operation, or condition at any time on or prior to the Closing Date of the Facilities or any other properties and assets (whether real, personal, or mixed and whether tangible or intangible) in which Seller or any Acquired Company has or had an interest, or (B) any Hazardous Materials or other contaminants that were present on the Facilities or such other properties and assets at any time on or prior to the Closing Date; or

(ii)      (A) any Hazardous Materials or other contaminants, wherever located, that were, or were allegedly, generated, transported, stored, treated, Released, or otherwise handled by Seller or any Acquired Company or by any other Person for whose conduct they are or may be held responsible at any time on or prior to the Closing Date, or (B) any Hazardous Activities that were, or were allegedly, conducted by Seller or any Acquired Company or by any other Person for whose conduct they are or may be held responsible; or

b.      any bodily injury (including illness, disability, and death, and regardless of when any such bodily injury occurred, was incurred, or manifested itself), personal injury, property damage (including trespass, nuisance, wrongful eviction, and deprivation of the use of real property), or other damage of or to any Person, including any employee or former employee of Seller or any Acquired Company or any other Person for whose conduct they are or may be held responsible, in any way arising from or allegedly arising from any Hazardous Activity conducted or allegedly conducted with respect to the Facilities or the operation of the Acquired Companies prior to the Closing Date, or from Hazardous Material that was

(i)      present or suspected to be present on or before the Closing Date on or at the Facilities (or present or suspected to be present on any other property, if such Hazardous Material emanated or allegedly emanated from any of the Facilities and was present or suspected to be present on any of the Facilities on or prior to the Closing Date) or

(ii)      Released or allegedly Released by Seller or any Acquired Company or any other Person for whose conduct they are or may be held responsible, at any time on or prior to the Closing Date.

Buyer will be entitled to control any Cleanup, any related Proceeding, and, except as provided in the following sentence, any other Proceeding with respect to which indemnity may be sought under this Section 10.3. The procedure described in Section 10.9 will apply to any claim solely for monetary damages relating to a matter covered by this Section 10.3.

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     10.4      INDEMNIFICATION AND PAYMENT OF DAMAGES BY BUYER. Buyer will indemnify and hold harmless Seller, and will pay to Seller the amount of any Damages arising, directly or indirectly, from or in connection with

a.      any Breach of any representation or warranty made by Buyer in this Agreement or in any certificate delivered by Buyer pursuant to this Agreement,

b.      any Breach by Buyer of any covenant or obligation of Buyer in this Agreement, or

c.      any claim by any Person for brokerage or finder's fees or commissions or similar payments based upon any agreement or understanding alleged to have been made by such Person with Buyer (or any Person acting on its behalf) in connection with any of the Contemplated Transactions.

10.5      TIME LIMITATIONS.

a.      If the Closing occurs, Seller will have no liability (for indemnification or otherwise) with respect to:

(i)      any representation or warranty, or covenant or obligation to be performed and complied with prior to the Closing Date, other than those in Sections 3.3, 3.11, 3.13, and 3.19, unless on or before one year following the Closing Date Buyer notifies Seller of a claim specifying the factual basis of that claim in reasonable detail to the extent then known by Buyer;

(ii)      a claim with respect to Section 3.3, 3.11, 3.13, or 3.19, or a claim for indemnification or reimbursement not based upon any representation or warranty or any covenant or obligation to be performed and complied with prior to the Closing Date, may be made at any time.

b.      If the Closing occurs, Buyer will have no liability (for indemnification or otherwise) with respect to any representation or warranty, or covenant or obligation to be performed and complied with prior to the Closing Date, unless on or before one year following the Closing Date Seller notifies Buyer of a claim specifying the factual basis of that claim in reasonable detail to the extent then known by Seller.

10.6      LIMITATIONS ON AMOUNT—SELLER.

a.      Seller will have no liability (for indemnification or otherwise) with respect to the matters described in clause (a), clause (b) or, to the extent relating to any failure to perform or comply prior to the Closing Date, clause (c) of Section 10.2 until the total of all Damages with respect to such matters exceeds $50,000, and then only for the amount by which such Damages exceed $50,000.

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     b.      Seller will have no liability (for indemnification or otherwise) with respect to the matters described in clause (d) of Section 10.2 until the total of all Damages with respect to such matters exceeds $10,000, and then only for the amount by which such Damages exceed $10,000.

However, this Section 10.6 will not apply to any Breach of any of Seller’s representations and warranties of which the Seller had Knowledge at any time prior to the date on which such representation and warranty is made or any intentional Breach by either Seller of any covenant or obligation, and Seller will be jointly and severally liable for all Damages with respect to such Breaches.

     10.7      LIMITATIONS ON AMOUNT—BUYER. Buyer will have no liability (for indemnification or otherwise) with respect to the matters described in clause (a) or (b) of Section 10.4 until the total of all Damages with respect to such matters exceeds $50,000, and then only for the amount by which such Damages exceed $50,000. However, this Section 10.7 will not apply to any Breach of any of Buyer's representations and warranties of which Buyer had Knowledge at any time prior to the date on which such representation and warranty is made or any intentional Breach by Buyer of any covenant or obligation, and Buyer will be liable for all Damages with respect to such Breaches.

10.8      ESCROW AGREEMENT; RIGHT OF SET-OFF.

     a.      Upon notice to Seller specifying in reasonable detail the basis for such set-off, Buyer may make a claim for damages against the Seller for breach of any representations, warranties, or covenants of the Seller set forth herein. Upon notice to Buyer specifying in reasonable detail the basis for such set-off, Seller may make a claim for damages against the Buyer for breach of any representations, warranties, or covenants of the Buyer set forth herein. In neither case may the Buyer or the Seller make any claim against the Cogenco Shares held pursuant to the Escrow Agreement for any resulting damages except as set forth in Section 10.8(b), below.

     b.      (i) (A) To the extent the Spanish Subsidies Commitment is any amount less than €20,000,000 as of the Closing Date, the Buyer may terminate this agreement or (in its discretion) waive the condition precedent set forth in Section 7.2(c) and reduce the purchase price by the Proportional Amount as set forth below. (B) If within twelve months following the Closing Date the amount of Spanish Subsidies Commitment becomes, for whatever reason, less than €20,000,000, the Buyer may remove the Proportional Amount of Cogenco Shares from the Escrow.

     (ii)      For the purposes of Section 10.8(b)(i), the term “Proportional Amount” means the number of Cogenco Shares calculated as follows:

(A) If the Spanish Subsidies Commitment is equal to or less than €15,000,000, the Proportional Amount is 2,600,000 Cogenco Shares.

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(B)      If the Spanish Subsidies Commitment is greater than €18,000,000, the Proportional Amount is zero Cogenco Shares.

(C)      If the Spanish Subsidies Commitment is equal to or less than €18,000,000 but greater than €15,000,000, the proportional amount will be calculated as follows:

Proportional Amount = X/Y*Z

Where:

X = €20,000,000 minus the actual Spanish Subsidies Commitment 

                         Y = €5,000,000 

                         Z = 2,600,000 Cogenco Shares,

So that if the actual Spanish Subsidies Commitment is €17,000,000, the Proportional Amount that the Buyer will reduce the Purchase Price or remove from Escrow is 1,560,000 Cogenco Shares (€3,000,000/€5,000,000*2,600,000 Cogenco Shares).

10.9      PROCEDURE FOR INDEMNIFICATION -- THIRD PARTY CLAIMS

a.      Promptly after receipt by an indemnified party under Section 10.2, 10.4, or (to the extent provided in the last sentence of Section 10.3) Section 10.3 of notice of the commencement of any Proceeding against it, such indemnified party will, if a claim is to be made against an indemnifying party under such Section, give notice to the indemnifying party of the commencement of such claim, but the failure to notify the indemnifying party will not relieve the indemnifying party of any liability that it may have to any indemnified party, except to the extent that the indemnifying party demonstrates that the defense of such action is prejudiced by the indemnifying party's failure to give such notice.

b.

     (i)      If any Proceeding referred to in Section 10.9(a) is brought against an indemnified party and it gives notice to the indemnifying party of the commencement of such Proceeding, the indemnifying party will, unless the claim involves Taxes, be entitled to participate in such Proceeding and, to the extent that it wishes (unless (A) the indemnifying party is also a party to such Proceeding and the indemnified party determines in good faith that joint representation would be inappropriate, or (B) the indemnifying party fails to provide reasonable assurance to the indemnified party of its financial capacity to defend such Proceeding and provide indemnification with respect to such Proceeding), to assume the defense of such Proceeding with counsel satisfactory to the indemnified party and, after notice from the indemnifying party to the indemnified party of its election to assume the defense of such Proceeding. The indemnifying party will not, as long as it diligently conducts such defense, be liable to the indemnified party under this Article 10 for any fees of other counsel or any other expenses with respect to the defense of such Proceeding, in each case subsequently incurred by the indemnified

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party in connection with the defense of such Proceeding, other than reasonable costs of investigation.

(ii)      If the indemnifying party assumes the defense of a Proceeding,

(A)      it will be conclusively established for purposes of this Agreement that the claims made in that Proceeding are within the scope of and subject to indemnification;

(B)      no compromise or settlement of such claims may be effected by the indemnifying party without the indemnified party's consent unless (I) there is no finding or admission of any violation of Legal Requirements or any violation of the rights of any Person and no effect on any other claims that may be made against the indemnified party, and (II) the sole relief provided is monetary damages that are paid in full by the indemnifying party; and

(C)      the indemnified party will have no liability with respect to any compromise or settlement of such claims effected without its consent. If notice is given to an indemnifying party of the commencement of any Proceeding and the indemnifying party does not, within ten days after the indemnified party's notice is given, give notice to the indemnified party of its election to assume the defense of such Proceeding, the indemnifying party will be bound by any determination made in such Proceeding or any compromise or settlement effected by the indemnified party.

c.      Notwithstanding the foregoing, if an indemnified party determines in good faith that there is a reasonable probability that a Proceeding may adversely affect it or its affiliates other than as a result of monetary damages for which it would be entitled to indemnification under this Agreement, the indemnified party may, by notice to the indemnifying party, assume the exclusive right to defend, compromise, or settle such Proceeding, but the indemnifying party will not be bound by any determination of a Proceeding so defended or any compromise or settlement effected without its consent (which may not be unreasonably withheld).

d.      Seller hereby consents to the non-exclusive jurisdiction of any court in which a Proceeding is brought against any Indemnified Person for purposes of any claim that an Indemnified Person may have under this Agreement with respect to such Proceeding or the matters alleged therein, and agree that process may be served on Seller with respect to such a claim anywhere in the world.

     10.10      PROCEDURE FOR INDEMNIFICATION -- OTHER CLAIMS. A claim for indemnification for any matter not involving a third-party claim may be asserted by notice to the party from whom indemnification is sought.

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ARTICLE 11      GENERAL PROVISIONS

     11.1      EXPENSES. Except as otherwise expressly provided in this Agreement, each party to this Agreement will bear its respective expenses incurred in connection with the preparation, execution, and performance of this Agreement and the Contemplated Transactions, including all fees and expenses of agents, representatives, counsel, and accountants. Buyer will pay one-half and Seller will pay one-half of the HSR Act filing fee, if any is required. Seller will cause the Acquired Companies not to incur any out-of-pocket expenses in connection with this Agreement except for professional fees not in excess of $100,000 in the aggregate for all of the Acquired Companies. In the event of termination of this Agreement, the obligation of each party to pay its own expenses will be subject to any rights of such party arising from a breach of this Agreement by another party.

     11.2      PUBLIC ANNOUNCEMENTS. Any public announcement or similar publicity with respect to this Agreement or the Contemplated Transactions will be issued, if at all, at such time and in such manner as Buyer determines. Unless consented to by Buyer in advance or required by Legal Requirements, prior to the Closing Seller shall, and shall cause the Acquired Companies to, keep this Agreement strictly confidential and may not make any disclosure of this Agreement to any Person. Seller and Buyer will consult with each other concerning the means by which the Acquired Companies' employees, customers, and suppliers and others having dealings with the Acquired Companies will be informed of the Contemplated Transactions, and Buyer will have the right to be present for any such communication.

11.3      CONFIDENTIALITY.

a.      Between the date of this Agreement and the Closing Date, Buyer and Seller will maintain in confidence, and will cause the directors, officers, employees, agents, and advisors of Buyer and the Acquired Companies to maintain in confidence, and not use to the detriment of another party or an Acquired Company any written, oral, or other information obtained in confidence from another party or an Acquired Company in connection with this Agreement or the Contemplated Transactions, unless

(i)      such information is already known to such party or to others not bound by a duty of confidentiality or such information becomes publicly available through no fault of such party,

(ii)      the use of such information is necessary or appropriate in making any filing or obtaining any consent or approval required for the consummation of the Contemplated Transactions, or

(iii)      the furnishing or use of such information is required by or necessary or appropriate in connection with legal proceedings.

b.      If the Contemplated Transactions are not consummated, each party will return or destroy as much of such written information as the other party may reasonably request. Whether or not the Closing takes place, Seller waives, and will upon Buyer's request cause the

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Acquired Companies to waive, any cause of action, right, or claim arising out of the access of Buyer or its representatives to any trade secrets or other confidential information of the Acquired Companies except for the intentional competitive misuse by Buyer of such trade secrets or confidential information.

     11.4      NOTICES. All notices, consents, waivers, and other communications under this Agreement must be in writing and will be deemed to have been duly given when (a) delivered by hand (with written confirmation of receipt), (b) sent by telecopier (with written confirmation of receipt), provided that a copy is mailed by registered mail, return receipt requested, or (c) when received by the addressee, if sent by a nationally recognized overnight delivery service (receipt requested), in each case to the appropriate addresses and telecopier numbers set forth below (or to such other addresses and telecopier numbers as a party may designate by notice to the other parties):

	Seller:

GENESIS ENERGY INVESTMENTS, PLC

Szent Istvan Krt. 18

H-1137 Budapest, Hungary

Attention: Dr. Gabor Renyi, President

Facsimile No.: 00-36-1-452-1701

Buyer:

COGENCO INTERNATIONAL, INC.

Suite 1840, 6400 South Fiddler’s Green Circle

Greenwood Village, CO 80112

Attention: David W. Brenman, President

Facsimile No.: 303-221-8686

with a copy to:

Burns, Figa & Will, P.C.

Suite 1000, 6400 South Fiddler’s Green Circle

Greenwood Village, CO 80112

Attention: Herrick K. Lidstone, Jr., Esq.

Facsimile No.: 303-796-2777

     11.5      JURISDICTION; SERVICE OF PROCESS. Any action or proceeding seeking to enforce any provision of, or based on any right arising out of, this Agreement may be brought against any of the parties in the courts of the State of Colorado, County of Arapahoe, or, if it has or can acquire jurisdiction, in the United States District Court for the District of Colorado, and each of the parties consents to the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid therein. Process in any action or proceeding referred to in the preceding sentence may be served on any party anywhere in the world.

     11.6      FURTHER ASSURANCES. The parties agree (a) to furnish upon request to each other such further information, (b) to execute and deliver to each other such other documents,

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and (c) to do such other acts and things, all as the other party may reasonably request for the purpose of carrying out the intent of this Agreement and the documents referred to in this Agreement.

     11.7      WAIVER. The rights and remedies of the parties to this Agreement are cumulative and not alternative. Neither the failure nor any delay by any party in exercising any right, power, or privilege under this Agreement or the documents referred to in this Agreement will operate as a waiver of such right, power, or privilege, and no single or partial exercise of any such right, power, or privilege will preclude any other or further exercise of such right, power, or privilege or the exercise of any other right, power, or privilege. To the maximum extent permitted by applicable law,

a.      no claim or right arising out of this Agreement or the documents referred to in this Agreement can be discharged by one party, in whole or in part, by a waiver or renunciation of the claim or right unless in writing signed by the other party;

b.      no waiver that may be given by a party will be applicable except in the specific instance for which it is given; and

c.      no notice to or demand on one party will be deemed to be a waiver of any obligation of such party or of the right of the party giving such notice or demand to take further action without notice or demand as provided in this Agreement or the documents referred to in this Agreement.

     11.8      ENTIRE AGREEMENT AND MODIFICATION. This Agreement supersedes all prior agreements between the parties with respect to its subject matter and constitutes (along with the documents referred to in this Agreement) a complete and exclusive statement of the terms of the agreement between the parties with respect to its subject matter. This Agreement may not be amended except by a written agreement executed by the party to be charged with the amendment.

11.9      DISCLOSURE LETTER

a.      The disclosures in the Disclosure Letter, and those in any Supplement thereto, must relate only to the representations and warranties in the Section of the Agreement to which they expressly relate and not to any other representation or warranty in this Agreement.

b.      In the event of any inconsistency between the statements in the body of this Agreement and those in the Disclosure Letter (other than an exception expressly set forth as such in the Disclosure Letter with respect to a specifically identified representation or warranty), the statements in the body of this Agreement will control.

c.      To the extent that the Seller does not deliver the Disclosure Letter to the Buyer concurrently with the execution of this Agreement (or to the extent that the Disclosure Letter delivered concurrently with the execution of this Agreement is incomplete), the Seller must deliver the complete Disclosure Letter to the Buyer, with all attachments, schedules,

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exhibits and supplemental information within 90 days after the Seller and the Buyer have executed and delivered this Agreement (the “Disclosure Letter Delivery Deadline”). Any changes made to the Disclosure Letter, and any additions to or modifications thereof, must be acceptable to the Buyer in its reasonable discretion. If the Buyer does not object in writing to any changes or additions to or modifications of the Disclosure Letter within 30 days after having received the Disclosure Letter, the Buyer shall be deemed to have accepted the Disclosure Letter.

     11.10      ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS. Neither party may assign any of its rights under this Agreement without the prior consent of the other parties except that Buyer may assign any of its rights under this Agreement to any Subsidiary of Buyer. Subject to the preceding sentence, this Agreement will apply to, be binding in all respects upon, and inure to the benefit of the successors and permitted assigns of the parties. Nothing expressed or referred to in this Agreement will be construed to give any Person other than the parties to this Agreement any legal or equitable right, remedy, or claim under or with respect to this Agreement or any provision of this Agreement. This Agreement and all of its provisions and conditions are for the sole and exclusive benefit of the parties to this Agreement and their successors and assigns.

     11.11      SEVERABILITY. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

     11.12      ARTICLE AND SECTION HEADINGS, CONSTRUCTION. The headings of Articles and Sections in this Agreement are provided for convenience only and will not affect its construction or interpretation. All references to “Article” or “Articles,” "Section" or "Sections" refer to the corresponding Article, Articles, Section or Sections of this Agreement. All words used in this Agreement will be construed to be of such gender or number as the circumstances require. Unless otherwise expressly provided, the word "including" does not limit the preceding words or terms. All references to “$” or dollars shall be to the currency of the United States; references to € in Sections 7.2(c) and 10.8 hereof shall be to Euros. The official language for the Contemplated Transactions shall be English and the English translation of any documents shall be the governing document.

     11.13      TIME OF ESSENCE. With regard to all dates and time periods set forth or referred to in this Agreement, time is of the essence.

     11.14      GOVERNING LAW. This Agreement will be governed by the laws of the State of Colorado without regard to conflicts of laws principles.

     11.15      COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement.

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

					
	Buyer:  	  	Seller:  	  	  
	COGENCO  	  	GENESIS ENERGY INVESTMENTS, PLC  
	INTERNATIONAL, INC.  	  	  	  	  
	  
	  
	By: _/s/    David W. Brenman  	  	/s/    Gabor Rényi  	  	/s/    Edward Mier-Jedrzejowicz  
	David W. Brenman, President  	  	Gabor Rényi,  	  	Edward Mier-Jedrzejowicz  
	  	  	Chief Executive Officer  	  	Chairman of the Board  
	  	  	August 11, 2009  	  	August 11, 2009  

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