Attached files
| file | filename |
|---|---|
| 10-Q - Solar Thin Films, Inc. | v186349_10q.htm |
| EX-31.1 - Solar Thin Films, Inc. | v186349_ex31-1.htm |
| EX-32.2 - Solar Thin Films, Inc. | v186349_ex32-2.htm |
| EX-31.2 - Solar Thin Films, Inc. | v186349_ex31-2.htm |
| EX-32.1 - Solar Thin Films, Inc. | v186349_ex32-1.htm |
Exhibit
10.1
STOCK
EXCHANGE AGREEMENT
Between
SOLAR
THIN FILMS, INC.
And
ISTVAN
KRAFCSIK,
ATTILA
HORVATH AND
NEW
PALACE INVESTMENT LTD.
as
of May 5, 2010
THIS STOCK EXCHANGE AGREEMENT
(this “Agreement”) is made
and entered into as of 5th day of
May 2010 (the “Effective Date”), by
and among SOLAR THIN FILMS,
INC., a Delaware corporation; ISTVAN KRAFCSIK, an individual
(“Krafcsik”);
ATTILA HORVATH, an
individual (“Horvath”); and NEW PALACE INVESTMENT LTD., a
corporation incorporated under the laws of Cyprus (“New Palace” or “Company
Stockholder”). STF, New Palace, Attila Horváth and István Krafcsik are
hereinafter sometimes individually referred to as a “Party” and
collectively referred to as the “Parties.”
Recitals
A. The
Company Stockholder currently own of record and beneficially 100% of the
outstanding registered capital of BUDASOLAR TECHNOLOGIES CO.
LTD., a Hungarian corporation (the “Company” and it’s quotas are the
“Subject Company
Quotas”) as hereinafter defined.
B. STF is
a publicly traded company whose shares are listed both in the United States (on
the FINRA OTC Bulletin Board) and in Germany (on the Frankfurt
Exchange).
C. Upon
the terms and subject to the conditions set forth in this Agreement, STF desires
to acquire from the Company Stockholder the Subject Company Quotas. Company
Stockholder desires to hand over the Subject Company Quotas in consideration for
receiving shares of Series B-5 convertible voting Preferred Stock of STF (the
“Consideration Preferred
Shares”).
1
Agreement
NOW, THEREFORE, in
consideration of the mutual promises and covenants contained herein, the Parties
agree as follows:
ARTICLE I. –
TRANSFER OF SUBJECT COMPANY QUOTAS;
REPAYMENT
OF LOANS
1.1 Transfer of Subject Company
Quotas.
(a) On the terms and
subject to the conditions of this Agreement, at the Closing referred to in §6.1
the Company Stockholder shall convey, assign, transfer, and deliver to STF, and
STF shall acquire and accept delivery of the Subject Company Quotas that is the
number of quotas of registered capital of the Company as shall represent one
hundred percent (100%) of the issued and outstanding registered capital of the
Company, on a fully-diluted basis, after giving effect to the exercise of all
options, warrants, or other rights to acquire Company registered capital, and
all securities convertible into Company registered capital that is outstanding
as of the Closing Date. The Subject Company Quotas shall be delivered to STF by
the Company Stockholder, free and clear of any and all liens, mortgages, adverse
claims, charges, security interests, encumbrances, other restrictions or
limitations, or rights of any third persons whatsoever (collectively, “Liens”).
(b) To effect the transfers
contemplated by §1.1(a), at the Closing, the Company Stockholder shall deliver
or cause to be delivered to STF, against consideration therefor in accordance
with §2.1, evidence in a form acceptable to STF of the transfer from Company
Stockholder to STF of the Subject Company Quotas, on the books of the
Company.
1.2 Company Stockholder
Loans. On or before the Closing Date, STF shall takeover and assume the
obligation of the repayment of all outstanding loans made by either the Company
Stockholder or it’s owners, István Krafcsik and Attila Horváth or their
Affiliates to the Company prior to the date of this Agreement (the “Stockholder Loans”)
in the aggregate amount of HUF 223,176,999 ((USD)$1,174,616). The Stockholder
Loans shall be evidenced by a five year note of STF (the “Note”); which Note
shall be elibigble for full or partial prepayment to the Company Stockholders on
the earliest to occur of: (i) receipt of a Euro Thirty Million (€30.0 million)
down payment by the Company under its Thin film Silicon Photovoltaic Solar
Module Process Line sale and purchase agreement, dated January 7, 2010, with
China City Investments Limited (the “China City
Contract”), provided sufficient funds remain from said down payment to
fully meet all obligations under the China City Contract, (ii) receipt of net
proceeds, if any, in excess of $3,500,000, raised by STF in the “STF Financing”
referred to in Section 3.9 below; or (iii) out of “excess cash flow of the
Corporations” (as defined in the Note). Such Note shall be in the form of
annexed hereto as Exhibit A and made a
part hereof. In addition, the Company is indebted to Istvan Krafcsik in the
amount of €50,000 ((USD) $64,593) for a loan recently made. STF agrees to use
its best efforts to repay or cause the Corporations to repay this latest advance
by Istvan Krafcsik by July 31, 2010.
|
ARTICLE
II. - CONSIDERATION
PREFERRED SHARES
|
2.1 Consideration Preferred
Shares. On the Closing Date, against delivery of evidence in a form
acceptable to STF of the transfer from the Company Stockholder to STF of the
Subject Company Quotas on the books of the Company, STF shall deliver, transfer,
and assign to the Company Stockholder an aggregate of seventy thousand (70,000)
shares of Series B-5 convertible voting preferred stock of STF having an agreed
upon value of not less than (USD) $7,000,000 (the “Consideration Preferred
Shares”).
2
(a) Rights and Designations. The
rights, privileges and designations of the Consideration Preferred Shares shall
be set forth in a certificate of designations of STF Series B-5 Preferred Stock
to be filed with the Secretary of State of the State of Delaware, USA, and
delivered on the Closing Date in the form of Exhibit B annexed hereto and made a
part hereof (the “Certificate of Designations”). Such Certificate of
Designations shall, inter
alia, provide that the Consideration Preferred Stock:
(i)
shall have a minimum stated or liquidation value of one hundred dollars (USD
$100) per share, or (USD) $7,000,000 as to all Consideration Preferred
Shares;
(ii) during
the five (5) year Measuring Period set forth below, shall not be sold,
transferred, assigned, hypothecated or otherwise transferred by the Company
Stockholder to any third party other than Krafcsik, Hovath or members of their
families, without the prior written consent of STF;
(iii) subject to the provisions of
Section 3.6 of this Agreement, at each annual or special meeting of shareholders
of STF, shall vote, together with the Common Stock of STF on an “as converted
basis” (based on the Audited Pre-Tax Income of the Corporations for the fiscal
year ended immediately preceding such meeting, all in accordance with the
schedule set forth below), for the purpose of granting to the holders of the
Consideration Preferred Shares two (2) seats on the board of directors of STF –
for the avoidance of doubt, if the Corporations shall have less than
$(USD)$3,000,000 of Audited Pre-Tax Income in the year ended prior to such
shareholders meeting, the Consideration Preferred Stock shall have 7,000,000
votes and if the Audited Pre-Tax Income was $3.5 million, the Consideration
Preferred Stock would have 9,333,333 votes – in each case, solely to cast votes
to elect two representatives to the Board of Directors of STF;
and
(iv) at the option of the Company
Stockholder, may be converted into a minimum of 7,000,000 shares and a maximum
of 49,000,000 shares of STF common stock, $0.01 par value per share (the “STF
Common Stock”) at any time during (30) day period (each a “Conversion Period”)
immediately following delivery to STF of the audited consolidated or combined
financial statements of the Company and Kraft Elektronika ZRT, a Hungarian
corporation and a wholly-owned subsidiary of STF (“Kraft” and together with the
Company, the “Corporations”) for each of the five fiscal years (each a “Fiscal
Year”) commencing with the Fiscal Year ending December 31, 2010 and ending with
the Fiscal Year ending December 31, 2014 (such five (5) consecutive Fiscal
Years, the “Measuring Period”). The actual number of shares of
STF Common Stock issuable upon each annual conversion during any Conversion
Period of any or all of the Consideration Preferred Shares (the “Conversion
Shares”) shall be set forth in the written notice (the “Conversion Notice”)
given by the Company Stockholder to STF; provided,
however, that the
maximum number of Conversion Shares issuable pursuant to such Conversion Notice
shall be determined based upon the Audited Pre-Tax Income of the Corporations
for that Fiscal Year during the Measuring Period that ended immediately prior to
the Conversion Period in which a Conversion Notice was sent, all as set forth
the following table:
|
Audited Pre-Tax Income for Applicable Fiscal
Year
|
Maximum Number of Conversion
Shares
|
|
|
(USD) up to $3,000,000
|
7,000,000
|
|
|
3,500,000
|
9,333,333
|
|
|
5,000,000
|
11,666,667
|
|
|
6,000,000
|
14,000,000
|
|
|
7,000,000
|
16,333,333
|
|
|
8,000,000
|
18,666,667
|
|
|
10,000,000
|
21,000,000
|
3
|
Audited Pre-Tax Income for Applicable Fiscal
Year
|
Maximum Number of Conversion
Shares
|
|
12,000,000
|
22,166,667
|
|
|
15,000,000
|
23,333,333
|
|
|
18,000,000
|
24,500,000
|
|
|
21,000,000
|
25,633,333
|
|
|
24,000,000
|
26,866,667
|
|
|
27,000,000
|
28,000,000
|
|
|
31,000,000
|
29,166,667
|
|
|
34,000,000
|
30,333.333
|
|
|
37,000,000
|
31,500,000
|
|
|
40,000,000
|
32,666,667
|
|
|
43,000,000
|
33,833,333
|
|
|
46,000,000
|
35,000,000
|
|
|
49,000,000
|
44,333,333
|
|
|
52,000,000
|
46,666,667
|
|
|
55,000,000
|
49,000,000
|
(iv) In
the event, and on each occasion, that a partial conversion of the Consideration
Preferred Shares shall be made, a cumulative
pro-rata portion of the applicable Conversion Shares shall be issued. For the
avoidance of doubt, if the Audited Pre-Tax Income of the Corporations in a
Measuring Year was $10,000,000, and the Company Stockholder elected to convert
fifty percent (50%) of the Consideration Preferred Shares, the Company
Stockholder would be entitled to receive 10,500,000 Conversion Shares (instead
of 21,000,000 Conversion Shares) and retain thirty-five thousand (35,000)
Consideration Preferred Shares. However, if in a subsequent Measuring Year, the
Audited Pre-Tax Income of the Corporations was (USD)$27,000,000, and the Company
Stockholder then elected to convert the 35,000 remaining Consideration Preferred
Shares, it would be entitled to receive (in lieu of 28,000,000 Conversion
Shares) a total of 17,500,000 additional shares of Common Stock, representing
(A) the 28,000,000 shares of Common Stock set forth in the above chart, less (B)
the 10,500,000 Conversion Shares previously received.
(b) Definition. As used in this Agreement, the
term “Audited Pre-Tax Income of the Corporations” shall mean, for each Fiscal
Year in question during the Measuring Period, the amount of the operating net
income, plus the interest income, minus the interest expense of the Company and
Kraft, on a combined or consolidated basis, as audited by the independent
accountants engaged by STF; which audit shall be conducted in accordance with
United States generally accepted accounting principles (“USGAAP”) or
International Financial Reporting Authority Standards (“IFRAS”) that are
accepted by the U.S. Securities and Exchange Commission for United States
publicly traded corporations.
(c) Pro-Ration of Conversion
Shares. In the event that the Audited
Pre-Tax Income of the Corporations in any of the five (5) Fiscal Years during
the Measuring Period shall be other than the figures set forth in the above
table, the number of Conversion Shares shall be appropriately
pro-rated. Accordingly, and for the
avoidance of doubt, if the actual Pre-Tax Income of the Corporations for the
fiscal year ending December 31, 2014 is (USD)$44,600,000, such amount is
$1,600,000 in excess of $43.0 million or 53.33% of the amount needed to increase
the number of Conversion Shares from 33,833,333 to 35,000,000. Accordingly, the number of
Conversion Shares in such example would be 33,833,333 + 622,222 or 34,455,555
shares of STF Common Stock.
(d) Maximum Number of Conversion
Shares. Notwithstanding anything to the
contrary, express or implied, contained in clause (iv) of Section 2.1(a), or
elsewhere in this Agreement, the Parties hereto expressly understand and agree
that irrespective of the actual Audited Pre-Tax Income of the Corporations over
the five (5) fiscal years ending December 31, 2014, not more than an aggregate
of Forty-Nine Million (49,000,000) shares of STF Common Stock shall be subject
to issuance as Conversion Shares to be received on the basis of the Audited
Pre-Tax Income pursuant to this Agreement upon conversion of all of the
Consideration Preferred Shares during the Measuring Period or
otherwise.
4
(e) Automatic Conversion of Consideration
Preferred Shares. In the event and to the extent
that the Company Stockholder shall not have elected to convert all of the
Consideration Preferred Shares into STF Common Stock prior thereto, as at March
31, 2015, all of the remaining Consideration Preferred Shares not previously
converted into Conversion Shares shall automatically convert into shares of STF
Common Stock based solely upon the Audited Pre-Tax Income of the Corporations
for the fiscal year ending December 31, 2014.
|
ARTICLE
III. - COVENANTS AND AGREEMENTS OF THE
PARTIES
|
3.1 Reciprocal Access to
Information and Properties. The parties shall permit each other and each
other’s authorized employees, agents, accountants, legal counsel, and other
representatives access to the books of the Company and STF, as well as the
records, employees, counsel, accountants, engineers, and other representatives
at all times reasonably requested for the purpose of conducting an investigation
of the financial condition, corporate status, operations, prospects, business,
and properties of the Company and STF. The parties shall make available to each
other for examination and reproduction all documents and data of every kind and
character relating to STF, Buda Solar, Kraft and New Palace in their possession
or control of, or subject to reasonable access by, themselves and/or their
lawyers and accountants.
3.2 General Covenants.
Except as otherwise expressly permitted in this Agreement, between the date of
this Agreement and the Closing Date, without the prior written consent of the
other Party, which consent shall not be unreasonably withheld, the Parties shall
not do, and the Company Stockholder shall not permit the Company to do, any of
the following:
(i) declare, set aside, or
pay any dividends, or make any distributions or other payments in respect of its
equity securities, or repurchase, redeem, or otherwise acquire any such
securities;
(ii) merge into or with or
consolidate with, any other corporation, or acquire the business or assets of
any person;
(iii) amend its charter or
bylaws (unless required to implement the present agreement);
(iv) issue any capital
stock or other securities, or grant, or enter into any agreement to grant, any
options, convertibility rights, other rights, warrants, calls, or agreements
relating to its securities;
(v) create, incur, assume,
guarantee, or otherwise become liable or obligated with respect to any
indebtedness, or make any loan or advance to, or any investment in, any entity
or person, except in each case in the ordinary course of business;
or
(vi) enter into any
transaction or make any commitment that could result in any of the
representations, warranties, or covenants contained in this Agreement not being
true and correct after the occurrence of such transaction or event.
5
3.3 Notice Regarding
Changes. The Parties shall promptly inform the other Party in writing of
any change in facts and circumstances that could render any material
representations or warranty made herein inaccurate or misleading.
3.4 STF Advance. On
the date that all parties shall execute this Agreement, STF shall provide the
Company with (USD) $75,000 (the “Initial Advance”).
Thereafter, and as provided in Section 3.9 below, STF shall use its best efforts
to raise additional capital by selling STF securities and use a portion of the
net proceeds of such sales to provide ongoing working capital installment
financing for the Corporations in accordance with a 2010 operating budget
provide by Krafcsik and Horvath and deemed reasonably acceptable to STF (the
“2010
Budget”).
3.5 Employment
Agreements. On the Closing Date, the Corporations shall enter into
five-year employment agreements with Istvan Krafcsik and Attila Horvath,
substantially in the form annexed hereto as Exhibit C-1 and Exhibit C-2. STF
shall guaranty the obligations of the Corporations under such employment
agreements. In addition, STF shall enter into a five-year employment agreement
with Robert M. Rubin, as President and Chief Executive Officer, and a three-year
employment agreement with Gary Maitland, as Senior Vice-President and General
Counsel. STF has been interviewing and negotiating with candidates for the
following positions: President, Chief Financial Officer, Vice-President for
Business Development, Vice-President for Manufacturing and Product Development,
Vice-President for Sales & Marketing and Comptroller. Krafcsik, Horvath or
any replacement director on the STF Board of Directors shall not unreasonably
deny or withhold approval of STF’s nominees for these positions and some or all
of these positions may be filled prior to the Closing Date. Further, STF is in
the process of negotiating an engagement with Droege and Company, Inc., who has
already commenced work, and intends to enter into a formal agreement prior to
the Closing Date.
3.6 Board of Directors and
Executive Officers.
(a) On
the Closing Date, the following persons shall be appointed as members of the
Board of Directors of STF: Robert M. Rubin (Board Chairman), Istvan Krafcsik,
Attila Horvath, Gary Maitland, and a fifth (5th)
director who shall be designated by STF.
(b) Subject at all times of the
provisions of Section 3.15 of this Agreement, for so long as they shall own any
Consideration Preferred Shares, the Company Stockholder shall be entitled to
designate two (2) members on the STF Board of Directors. In addition, for so long as the
Audited Pre-Tax Income of the Corporations shall equal or exceed (USD)
$5,000,000, the Parties agree that during the five (5) year Measuring Period
they shall vote all of their shares of STF Common Stock and Consideration
Preferred Shares so as to insure that two (2) members on the STF Board of
Directors shall include Istvan Krafscik, Attila Horvath or another person(s)
designated by the Company Stockholder. In case any STF securities are
owned by Messrs. Krafcsik and Horváth or any Affiliate or family member of such
Persons, such securities shall be deemed as owned by New Palace. Each of the current STF Board
Members and each of Krafcsik, Horvath and New Palace, all hereby covenant and
agree to vote all of their voting shares of STF capital stock to achieve the
election to the Board of Directors of STF of the persons indicated above and
otherwise in accordance with the provisions of this Section
3.6
(c) The
total number of members of the Board of Directors of STF shall be determined by
STF and its shareholders.
6
(d) All members of
the Board of Directors ofSTF shall continue to serve in such capacities until
the earlier of their resignation or removal or until their respective successors
are duly elected and qualified, as the case may be. In the event of the death or
inability of either Krafcsik or Horvath to serve as members of the Board of
Directors of STF, the remaining member of them may designate the second director
who shall serve for the period as set forth above.
(e) For so long as it
shall own a majority of the issued and outstanding Share Quotas of the Company,
STF shall be entitled to designate a majority of the managing directors of the
Company and Kraft. Each of István Krafcsik and Attila Horváth shall also serve
as managing directors of the Company and Kraft.
(f) Istvan Krafcsik shall serve as Chief Technology Officer of the
Corporations and Attila Horvath shall serve as Chief Operating Officer of the
Corporations. Subject to the provisions of
Section 3.7 below, Messrs. Krafcsik and Hovath shall be responsible to
manage the business and affairs of each of the Company and Kraft and shall have
total management authority and control of the business activities of the
Corporations; provided,
however, that notwithstanding anything to the contrary, express or
implied contained in this Agreement, all “Major
Decisions” (as defined below) that affect the Company and/or Kraft shall
require the prior consent or approval of STF or the STF designees on the board
of directors of the Company and Kraft. Krafcsik and Horvath may jointly
designate a new Chief Executive Officer for the Corporations subject to the
consent of the STF Board of Directors, which consent shall not be unreasonably
withheld.
3.7 Executive Officers of the
Corporations; Authority and Goals of Executive Officers.
(a) Krafcsik
shall be appointed as Chief Executive Officer and Chief Technology Officer of
the Company and Kraft and Horvath shall be appointed as Chief Operating Officer
of the Company and Kraft, until the earlier of their resignation or removal or
until their respective successors are duly elected and qualified, as the case
may be. The Parties expressly set forth that Krafcsik and Horvath shall be
removed only for good cause, such as their non-performance. STF shall appoint a
qualified accountant reasonably acceptable to Krafcsik and Horvath, to serve as
Chief Financial Officer of the Company and Kraft.
(b) In
the event that the Audited Pre-Tax Income of the Corporations as at the end of
each Fiscal Year during the Measuring Period, commencing with the Fiscal Year
ending December 31, 2010, are at least 75% of the projected annual Pre-Tax
Income of the Corporations set forth on the annual “Operating Budget”
referred to in Section
3.10 below), except for Major Decisions, the Board of Directors of the
Company and Kraft shall expressly delegate and grant to each of Krafcsik and
Horvath (the “Executive Officers”)
the absolute right and authority to manage the day-to-day operations of the
Corporations, and make all decisions binding upon the Corporations, other than
Major Decisions.
(c) The
Board of Directors may, by majority vote, elect to remove any Executive Officer
for good reasons such as non-satisfactory performance, and may appoint any
successor to such Executive Officer who has been removed from office; provided,
however, that in no event shall any successor to the Chief Executive
Officer of the Company or Kraft be a then existing officer or an otherwise
related person of STF, unless such person is approved as a Major
Decision.
(d) Notwithstanding
Section 3.7(c)
above, in the event that either (i) STF seeks to remove an Executive Officer for
good reasons, including non-satisfactory performance, and the representatives of
New Palace on the Board of Directors refuse to agree to remove such Executive
Officer, or (ii) the Company Stockholder or Board of Directors fail to appoint
as a Major Decision a new Executive Officer to fill such vacancy with within
sixty (60) calendar days following the removal of the former Executive Officer,
then a “Deadlock” shall be
deemed to exist. In such event, either STF or New Palace may issue a
notification of a Deadlock, and within fourteen (14) calendar days following
such notice, STF and the Company Stockholders shall request that the Independent
Directors on the STF Board of Directors use all reasonable endeavours to resolve
the matter.
7
3.8 Ensure Conditions
Met. Each of the Parties shall use all reasonable commercial efforts to
take or cause to be taken all actions and do or cause to be done all things
required under applicable Legal Requirements in order to consummate the
transactions contemplated hereby, including, without limitation: (i) obtaining
all permits, authorizations, consents, and approvals of any Governmental
Authority or Securities Exchange or other person which are required for or in
connection with the consummation of the transactions contemplated hereby, (ii)
taking any and all reasonable actions necessary to satisfy all of the conditions
to each Party’s obligations hereunder, and (iii) executing and delivering all
agreements and documents required by the terms hereof to be executed and
delivered by such Party on or prior to the Closing.
3.9 Financing for the
Corporations.
(a) STF
shall use its commercially best efforts to obtain debt or equity financing of
(USD) $3,500,000 (the “STF Financing”) Up to
(USD) $3,500,000 of the net proceeds of such STF Financing and/or excess cash
proceeds shall be contributed or made available to the Corporations to provide
additional working capital to the Corporations. In such connection, the Company
and the Company Stockholder acknowledge that STF has recently made a partial
(USD)$300,000 Working Capital Contribution to the Company which shall be
credited to the (USD)$3,500,000 Working Capital Contribution. Upon funding of
the STF Advance contemplated by Section 3.4 above, the balance of the STF
Financing and the Working Capital Contribution shall be $3,125,000 (the “Required STF Financing
Balance”).
(b) The
parties hereto agree that the Working Capital Contribution to be made by STF to
the Corporations shall be in the same form as contain the same terms as the
securities sold by STF to third parties in order to obtain the STF Financing.
Accordingly, in the event and to the extent that any STF Financing is in the
form of debt, the Working Capital Contribution of such net proceeds by STF shall
be subject to repayment by the Corporations on the same terms and conditions as
STF is required to pay such debt to the providers of such STF Financing and (if
required) the Corporations shall guaranty STF’s repayment obligations in
connection with such STF Financing; provided, however, that the final terms and
conditions of such debt STF Financing shall be reasonably acceptable to the
Company Stockholder.
(c) The parties hereto do hereby
expressly understand and agree that consummation of the above Required STF
Financing Balance shall not be a condition to the closing of the transactions
contemplated by this Agreement on the Closing Date.
(d) In
the event that STF is unable to complete (i) not less than (USD)$500,000 of the
Required STF Financing Balance by June 30, 2010, and (ii) the $2,625,000 balance
of the Required STF Financing Balance by September 30, 2010, then and in such
event, upon the written request of the Company Stockholder STF and Messrs.
Krafcsik and Horvath shall undertake in good faith to effect a “spin off” of the
Corporations to the shareholders of STF, in which event the Corporations shall
be consolidated into a single corporation (the “Successor
Corporation”) and the shares of such Successor Corporation shall be
distributed to the stockholders of STF; provided,
that the Company Stockholder shall be permitted to immediately convert
all of the Consideration Preferred Shares into a number of shares of common
stock of the Successor Corporation that shall guaranty that the Company
Stockholder or Messrs. Krafcsik and Horvath shall own in the aggregate not less
than a majority of the outstanding common stock of the Successor
Corporation.
8
3.10 Operating
Budget. By not later than June 1, 2010, Krafcsik and Horvath shall
furnish to the Board of Directors of STF a written operating budget and forecast
(the “Operating
Budget”) which sets forth the projected consolidated (i) sales revenues,
(ii) Pre-Tax Profits, (iii) capital expenditures, and (iv) cash working capital
requirements of the Company and Kraft for the financial year ending December 31,
2010. Such 2010 Operating Budget shall be updated to reflect operations through
and including the 15th day
immediately preceding the Closing Date. In addition, not later than November
30th
of each financial year, commencing with the financial year ending December 31,
2010, such Executive Officers shall furnish to STF an Operating Budget for the
next immediately succeeding financial year (each, a “Budget Year”), which
shall contain the same information set forth in the 2010 Operating Budget. The
2010 Operating Budget and the Operating Budget for each succeeding Fiscal Year
shall be subject to the approval of STF, which approval shall not be
unreasonably withheld or delayed. The Operating Budget shall also contain a
summary rolling forecast of estimated sales and capital expenditures for the
next financial year following each relevant Budget Year. In the event that the
Board of Directors is unable to agree upon the Operating Budget for any
financial year, then the Company shall conduct its business on the basis of the
Operating Budget for the previous financial year.
3.11 Major
Decisions.
Notwithstanding
anything to the contrary, express or implied, contained in this Agreement, for a
period equal to the greater of (A) the duration of their employment as senior
executive officers of the Company or Kraft, or (B) their direct or indirect
ownership (through New Palace or otherwise) of not less than 25% of the
Consideration Preferred Shares or the Conversion Shares applicable thereto, any
of the following actions by the Company or Kraft shall require the prior consent
and approval of both (i)
STF (or the STF designees on the board of directors of the Corporations) and
(ii) New Palace or Messrs. Krafcsik and Horvath:
(a) Any
amendment to this Agreement;
(b) Any
amendment to the Articles of Incorporation or bylaws of the Company or
Kraft;
(c) The
acquisition of any corporation or entity;
(d) Any
change the fundamental nature of the Corporations’ Business;
(e) The
admission of new Shareholders in the Corporations or the issuance of any capital
stock or other equity securities of the Corporations, or the execution of any
agreement to grant, any options, convertibility rights, other rights, warrants,
calls or agreements relating to equity securities of the
Corporations;
(f) The
appointment of any Executive Officer;
(g) The
creation, incurrence, assumption, guarantee or otherwise becoming liable or
obligated with respect to any indebtedness in excess of Euro Two Hundred and
Fifty Thousand (€100,000);
(h) The
making of any loan or advance to, or any investment in, any Person, except in
each case in the ordinary course of business;
(i) Any
agreement to consummate the sale, transfer, lease, mortgage, encumber or other
dispose of any of the assets of the Company or Kraft having a value in excess of
Euro Two Hundred and Fifty Thousand (€250,000);
9
(j) If
it involves the issuance of any debt securities by the Corporations or any
guarantees by the Corporations of any STF debt, the final terms and conditions
of any STF Financing contemplated by Section 3.8 of this
Agreement;
(k) Except
as contemplated by this Agreement, entering into any agreement commercial or
financial with any Affiliate or Connected Person (including STF or its
Affiliates) which involves an amount in excess of Euro One Hundred Thousand
(€100,000);
(l) Except
as contemplated by this Agreement, entering into any service agreement with any
Affiliate which involves an amount in excess of Euro Two Hundred and Fifty
Thousand (€250,000);
(m) Any
change of the statutory auditors;
(n) The
approval, adoption or change of annual Operating Budgets and approval of
unbudgeted capital or other expenditures in excess of Euro One Hundred Thousand
(€100,000);
(o) The
acquisition by the Company or Kraft of the business, or a majority of the
securities or assets of any person, firm or corporation;
(p) The
purchase by the Company or Kraft of any securities of any person, firm or
corporation in excess of Euro Fifty Thousand (€50,000), except of EURO
denominated money market instruments issued by single A or higher rated
issuers;
(q) Any
borrowing of any sum exceeding Euro One Hundred Thousand
(€100,000);
(r) The
acceptance of a single purchase order for PV Equipment, PV Facilities or PV
Modules (or in a series of related purchase orders) involving in excess of Euros
One Million ((€1,000,000);
(s) Any
single commercial agreement or commitment (or in a series of related
transactions) in excess of Euro Two Hundred and Fifty Thousand
(€250,000);
(t) Initiating
or settlement out of court of any litigation involving an amount in excess of
Euro Fifty Thousand (€50,000);
(u) Declaring
a dividend, paying any interest and making any other distribution of cash,
except in the ordinary course of business;
(v) Any
decision with respect to the liquidation or winding up of the Company or Kraft;
or
(w) Entering
into any agreement other than on an arm’s length basis.
3.12 Financial Information and
Inspection. Throughout the Measuring Period and thereafter, each of the
Corporations shall provide STF with monthly, quarterly and annual financial
information in such form and content as shall be reasonably required by STF. All
monthly information shall be provided within 15 days after the end of each
month, all quarterly information shall be provided within 30 days after the end
of each calendar quarter and all annual financial information shall be furnished
within 60 days after the end of each Fiscal Year. Representatives of STF,
including its independent auditors shall have the right to inspect the books and
records of each of the Corporations at any time upon five (5) business days
prior written notice to the Corporations.
3.13 Management
Agreement. Following the Closing Date, STF and the Corporations will
enter into a five year management agreement under which STF shall provide
financial, accounting, SEC compliance and other corporate infrastructure and
overhead services to the Corporations. In consideration for such services the
Corporations shall pay to STF an annual management fee (the “Management Fee”),
payable quarterly, equal to ten (10%) percent of the “free cash flow” of the
Corporations; provided, however, in no event shall such Management Fee exceed
the sum of Five Hundred Thousand Dollars ((USD) $500,000) in any one Fiscal
Year. The term “free cash flow” shall mean the cash amounts then available to
the Corporations after payment and allocation of amounts in the Operating Budget
for all expenses of the Corporations, including working capital, capital
expenditures, payment of salaries and costs of personnel, the purchase of
inventory, and other operating expenses of the Corporations.
10
3.14 Algatec
Acquisition. In the event that STF shall acquire a majority of the
outstanding shares of capital stock of Algatec Solar AG, a German
corporation (“Algatec"), whether by
share exchange, merger or like consolidation (the “Algatec
Acquisition”), at the request of either STF or Messrs. Krafcsik and
Horvath, STF shall effect a “spin off” of the Corporations to the shareholders
of STF immediately prior to consummation of the Algatec Acquisition, in which
event the Corporations shall be consolidated into a single Successor Corporation
and the shares of such Successor Corporation shall be distributed to the
stockholders of STF; provided,
that the Company Stockholder shall be permitted to immediately convert
all of the Consideration Preferred Shares into a number of shares of common
stock of the Successor Corporation that shall guaranty that the Company
Stockholder or Messrs. Krafcsik and Horvath shall own in the aggregate not less
than a majority of the outstanding common stock of the Successor
Corporation.
3.15 Voting Agreement and Voting
Trust.
(a) By
their execution of this Agreement, each of New Palace, Krafcsik and Horvath do
hereby acknowledge and agree that the Consideration Preferred Stock shall vote
on an “as converted” basis, solely for
the purpose of electing two (2) persons to serve on the Board of Directors of
STF, and except for such limited right, the Consideration Preferred Stock shall
not be entitled to vote on any other matters that may be submitted to the
stockholders of STF for a vote or consent.
(b) In
addition to the foregoing, by their execution of this Agreement, each of New
Palace, Krafcsik and Horvath do hereby grant to Robert M. Rubin or any other
person designated by Robert M. Rubin, an irrevocable and unconditional proxy
coupled with an interest (the “Proxy”), and do
hereby appoint to Robert M. Rubin or any other person designated by Robert M.
Rubin as their agent and attorney in fact (with power of substitution), to vote
all Conversion Shares that may be owned of record by any of New Palace,
Krafcsik, Horvath, any member of the families of such persons or their
affiliates, with respect to all matters to be voted on or consented to by
holders of Common Stock of STF at any regular, annual or special meeting of
stockholders or otherwise, with the sole exception that New Palace, Krafcsik,
Horvath, any member of the families of such persons or their affiliates shall be
entitled to vote any such Conversion Shares for the election of two (2) persons
to serve on the Board of Directors of STF. The aforesaid irrevocable Proxy shall
terminate and expire on a date which shall be the earlier to occur of (i) any
Fiscal Year during the five (5) year Measuring Period in which the Corporations’
Audited Pre-Tax Income shall exceed $5,000,000, or (ii) the expiration of the
five (5) year Measuring Period.
|
ARTICLE
IV. - REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE COMPANY
STOCKHOLDERS
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Each of
the Company; Krafcsik, Horvath, and New Palace do hereby jointly and severally
represent and warrant to STF that:
4.1 Corporate Existence and
Qualification. The Company is a corporation duly organized, validly
existing, and in good standing under the laws of Hungary. The Company has the
corporate power to own, manage, lease, and hold its properties and to carry on
its business as and where such properties are presently located and such
business is presently conducted; and the Company is qualified to do business as
a foreign corporation and in good standing in each jurisdiction in which it is
required by law to be so qualified.
11
4.2 The Subject Company Quotas
and Corporate Records. The Company’s registered capital is HUF 1.000.000,
representing 100% of the Quota owned by the Company Stockholders by name and in
amounts to be set forth prior to Closing. The Subject Company Quotas are owned
by the Company Stockholders free and clear of all Liens. Except for the Subject
Company Quotas, there are no quotas or shares of capital stock or other equity
securities of the Company authorized, issued, or outstanding.
4.3 No Company Stockholder
Defaults or Consents. The execution and delivery of this Agreement and
the Exhibits by Company Stockholders and the Company and the performance by
Company Stockholders and the Company of their obligations hereunder and
thereunder will not violate any provision of law or any judgment, award, or
decree or any indenture, agreement, or other instrument to which the Company
Stockholders and/or the Company is a Party, or by which the properties or assets
of the Company Stockholders or the Company is bound or affected, or conflict
with, result in a breach of or constitute (with due notice or lapse of time or
both) a default under, any such indenture, agreement or other instrument, in
each case except to the extent that such violation, default, or breach could not
reasonably be expected to delay or otherwise significantly impair the ability of
the Parties to consummate the transactions contemplated hereby.
4.4 No Company Defaults or
Consents. Neither the execution and delivery of this Agreement nor the
carrying out of any of the transactions contemplated hereby will:
(i) violate or conflict
with any of the terms, conditions, or provisions of the charter or bylaws of the
Company;
(ii) violate any Legal
Requirements applicable to the Company;
(iii) result in the
creation of any Lien, charge, or other encumbrance on the Company or any of its
property;
The
Company Stockholders or the Company will obtain any waiver, consent, action,
approval or authorization of, or make any required registration, declaration,
notice, or filing with any Governmental Authority.
4.5 Notice of Certain
Changes.
(a) Between the execution
of this Agreement and the time of closing, the Company shall promptly disclose
by formal notice:
(i) any event, circumstance
or change that had or might have a material adverse effect on the business,
operations, prospects, properties, financial condition, or working capital of
the Company;
(ii) any damage,
destruction, or loss (whether or not covered by insurance) that had or might
have a material adverse effect on the business, operations, prospects,
properties or financial condition of the Company; or
(iii) any adoption of any
Plan or Benefit Program or Agreement, or granting any increase in compensation
or benefits to directors, officers, or employees, other than merit increases to
non-officer employees in the ordinary course of business and consistent with
past practice;
12
4.6 Compliance with Laws.
To the best knowledge of the Company Stockholders, the Company is and has been
in compliance in all respects with any and all Legal Requirements applicable to
the Company, other than failures to so comply that would not have an adverse
effect on the business, operations, prospects, properties, or financial
condition of the Company
4.7 Litigation. There are
no claims, actions, suits, investigations, or proceedings against the Company
pending or, to the Knowledge of the Company Stockholders, threatened in any
court or before or by any Governmental Authority, or before any arbitrator, that
might have an adverse effect (whether covered by insurance or not) on the
business, operations, prospects, properties, or financial condition of the
Company.
4.8 Permits; Licenses;
Intellectual Property and Environmental Matters.
(a) The
Company owns or possesses (i) all permits and authorizations from any
Governmental Authority or agency (“Permits”), (ii) all
licenses and rights from all third persons, firms or corporations (“Licenses”), and (iii)
all patent applications, letters patent, trademarks, copyrights and other
intellectual property rights (collectively, “Intellectual
Property”) that is necessary for the Company to own, operate, use, and/or
maintain its properties and to conduct its business and operations as presently
conducted and as expected to be conducted in the future. The Company has
furnished to STF, or prior to the Closing Date will furnish to STF, true and
complete copies of all of such Permits, Licenses and Intellectual
Property.
(b) All
Permits, Licenses and Intellectual Property are in effect, no legal actions or
proceeding is pending or, to the Knowledge of the Company Stockholders,
threatened to modify, suspend or revoke, withdraw, terminate, or otherwise limit
any such Permits, Licenses or Intellectual Property, and no administrative or
governmental actions have been taken or, to the knowledge of the Company,
threatened in connection with the expiration or renewal of such Permits that
could adversely affect the ability of the Company to own, operate, use, or
maintain any of its properties or to conduct its business and operations as
presently conducted and as expected to be conducted in the future.
(c) There
are no claims, liabilities, investigations, litigation, administrative
proceedings, whether pending or, to the knowledge of the Company, threatened, or
judgments or orders relating to any Hazardous Materials (collectively called
“Environmental
Claims”) asserted or threatened against the Company or relating to any
real property currently or formerly owned, leased or otherwise used by the
Company.
ARTICLE
V. - REPRESENTATIONS AND WARRANTIES OF STF
STF
hereby represents and warrants to the Company and the Company Stockholders
that:
5.1 Corporate Existence and
Qualification. STF is a corporation duly organized, validly existing, and
in good standing under the laws of Delaware. STF has the corporate power to own,
manage, lease, and hold its properties and to carry on its business as and where
such properties are presently located and such business is presently conducted;
and is qualified to do business as a foreign corporation and in good standing in
each jurisdiction in which it is required by law to be so qualified. STF shall
be deemed to have made disclosure to the Company and the Company Stockholders of
all information contained in STF’s Public Filings, both in Germany and in the
United States.
13
5.2 STF Shares and Corporate
Records. As at March 22, 2010, the capital structure of STF is as
follows:
(a) Outstanding
notes payable – $1,837,167;
(b) Authorized
Common Stock – 150,000,000 shares;
(c) Outstanding
Common Stock – 18,988,893 shares;
(d) Authorized
Preferred Shares - 2,700,000 shares;
(i) Series
A Preferred - 1,200,000 designated, none outstanding;
(ii)
Series B
Preferred - 1,500,000 designated, Series B-1, 228,652 shares outstanding; Series
B-2, none outstanding, Series B-3, 47,502 shares outstanding, and Series B-4 no
shares outstanding.
In addition, STF intends to issue an
additional 5,000,000 shares of its Common Stock to compensate certain
consultants, officers and directors for services rendered and to be rendered to
STF.
5.3 STF Disclosures and
Financial Statements.
(a) STF
has supplied to the Company Stockholder and its counsel, the Form 10K Annual
Report of STF for the fiscal year ended December 31, 2009 as filed with the
United States Securities and Exchange Commission (the “STF 2009 Form 10-K”). Such STF
2009 Form 10-K includes the audited balance sheet, statement of operations and
statement of cash flows of STF as at December 31, 2009 and for the fiscal year
then ended (the “STF 2009
Audited Financial Statements”). Except as set forth on the STF Balance
Sheet as at December 31, 2009 or otherwise disclosed in the STF 2009 Form 10-K
or on Schedule
5.3, as at December 31, 2009 and for all periods subsequent thereto, STF
has no other material assets and has incurred no other material liabilities,
debts or obligations, whether fixed, contingent or otherwise required to be set
forth on a balance sheet prepared in accordance with GAAP. The books of account
and other financial records of STF are in all respects complete and correct in
all material respects and are maintained in accordance with good business and
accounting practices.
(b) Since December 31,
2009:
(i) except
for indebtedness and other liabilities not to exceed $100,000 in the aggregate
that will be outstanding as at the Closing Date, there have not been any
liabilities or other indebtedness incurred by STF;
(ii) there
has not been any material adverse changes in the financial position of STF
except changes arising in the ordinary course of business, which changes will in
no event materially and adversely affect the financial position of STF, and will
be consistent with the representations made by STF hereunder.
(iii) there
has not been any damage, destruction or loss materially affecting the assets,
prospective business, operations or condition (financial or otherwise) of STF
whether or not covered by insurance;
(iv) there
has not been any declaration setting aside or payment of any dividend or
distribution with respect to any redemption or repurchase of STF capital
stock;
(v) there
has not been any sale of an asset (other than in the ordinary course of
business) or any mortgage pledge by STF of any properties or assets;
or
(vi) there
has not been adoption or modification of any pension, profit sharing,
retirement, stock bonus, stock option or similar plan or
arrangement.
(vii) there
has not been any loan or advance to any shareholder, officer, director,
employee, consultant, agent or other representative or made any other loan or
advance otherwise than in the ordinary course of business;
(viii) there
has not been any increase in the annual level of compensation of any executive
employee of STF;
(ix) except
in the ordinary course of business, STF has not entered into or modified any
contract, agreement or transaction; and
(x) STF
has not issued any equity securities or rights to acquire equity
securities.
14
ARTICLE
VI. – CLOSING AND CLOSING CONDITIONS
6.1 Closing. The
consummation of the transfer of the Subject Company Quotas, delivery of the
Consideration
Preferred Shares, and consummation all other transactions contemplated by
this Agreement (the “Closing”) will take place at 10:00 a.m. (local time) on a
date to be specified by STF, which shall be no later than the fifth business day
after satisfaction or waiver of the conditions set forth in this Agreement (the
"Closing Date"), at the offices of counsel to STF, unless another date, time or
place is agreed to in writing by the Parties hereto. In no event, however, shall
the Closing Date occur after June 30, 2010 (the “Outside Closing
Date”), unless otherwise mutually agreed upon by the Company Stockholders
and by STF.
6.2 Closing
Conditions.
(a) By STF: The
obligations of STF to consummate the Closing shall be subject to satisfaction of
all of the following conditions, any one or more of which may be waived at the
sole election of STF:
(i) All
of the representations and warranties of the Company Stockholder, Krafcsik and
Horvath made in this Agreement shall be true and accurate as at the Closing
Date;
(ii) All
of the covenants and agreements on the part of the Company Stockholder, Krafcsik
and Horvath to be performed shall have been duly performed;
(iii) The
Company shall furnish STF with true and complete copies of its audited balance
sheet, statement of operations, and statement of cash flows for the fiscal years
ended December 31, 2008 and December 31, 2009, and copies of its unaudited
balance sheet, statement of operations, and statement of cash flows of the
Company as of March 31, 2010 and for the three months then ended;
and
(b) By the Company Stockholder,
Krafcsik and Horvath: The obligations of the Company Stockholder,
Krafcsik and Horvath to consummate the Closing shall be subject to satisfaction
of all of the following conditions, any one or more of which may be waived at
the sole election of the Company Stockholder, Krafcsik and Horvath:
(i) All
of the representations and warranties of STF made in this Agreement shall be
true and accurate as at the Closing Date;
(ii) All
of the covenants and agreements on the part of STF to be performed shall have
been duly performed;
15
(iii) STF
shall make payments on a timely basis of the (USD)$75,000 Initial Installment to
be funded under the STF Advance contemplated by Section 3.4 of this
Agreement;
(iv) STF
shall furnish the Company Stockholder, Krafcsik and Horvath with true and
complete copies of its audited balance sheet, statement of operations, and
statement of cash flows for the fiscal years ended December 31, 2008 and
December 31, 2009, and copies of its unaudited balance sheet, statement of
operations, and statement of cash flows of STF as of March 31, 2010 and for the
three months then ended.
6.3
Closing
Deliveries. At or
prior to the Closing:
(i) The
Company shall furnish STF with certificates evidencing and documents sufficient
to effectuate the transfer of the Company’s Quotas to STF;
(ii) The
Company shall furnish STF with evidence satisfactory to STF that STF’s designees and
the Company Stockholders shall be the only authorized signatories with respect
to the Company’s various accounts, credit lines, safe deposit boxes or vaults;
and
(iii) STF
shall furnish the Company Stockholder with certificates evidencing the Consideration Preferred
Shares representing all of the Consideration Preferred
Shares.
6.4 Termination in Absence of
Closing.
6.4.1 This
Agreement and the transactions contemplated herein may be terminated and
abandoned at any time on or prior to the Outside Closing Date:
(i) By
the Party for whose benefit such representation and warranty is given, if any
material representation or warranty made herein by the other Party or in any
certificate, schedule or document furnished by either party pursuant to this
Agreement is materially untrue;
(ii) By
the Party for whose benefit such conditions are provided, if any of the
conditions precedent to closing set forth in Section 6.2 above are not satisfied
or capable of being satisfied by the Outside Closing Date; or
(ii) By
mutual consent of the Parties.
ARTICLE
VII. - POST-CLOSING AGREEMENTS AND OBLIGATIONS
7.1 Further Assurances.
Following the Closing, the Company, the Company Stockholder, and STF shall
execute and deliver such documents, and take such other action, as shall be
reasonably requested by any other Party hereto to carry out the transactions
contemplated by this Agreement. All obligations created herein shall survive the
Closing.
7.2 Publicity. None of
the Parties shall issue or make, or cause to have issued or made, any public
release or announcement concerning this Agreement or the transactions
contemplated hereby, without the advance approval in writing of the form and
substance thereof by each of the other Parties, except as and to the extent
required by law (in which case, so far as possible, there shall be consultation
among the Parties prior to such announcement), and the Parties shall endeavor
jointly to agree on the text of any announcement or circular
required.
16
ARTICLE
VIII. - TAX MATTERS
8.1 Mutual Assurance of Tax
Compliance. The parties mutually represent and warrant that they have to
the best of their knowledge complied with all Tax Requirements in any
jurisdiction in which they do or are registered to do business.
ARTICLE
IX - RESOLUTION OF DISPUTES
9.1 Resolution of
Disputes.
(a) All
disputes, claims, or controversies arising out of or relating to this Agreement,
or any agreement executed and delivered pursuant hereto, or the negotiation,
breach, validity or performance hereof, or the transactions contemplated hereby
which cannot be resolved by good faith negotiations, shall be exclusively
submitted to final and binding arbitration in London, England before a panel of
three arbitrators appointed by the International Chamber of Commerce; provided, that if any Party
has no adequate remedy at law he or it may seek emergency injunctive relief or
specific performance before any court of competent jurisdiction in Hungary or
the United States. The decision and award of the arbitrators shall be
enforceable in any court of competent jurisdiction in the United States and
Hungary.
(b) Subject
to the availability of the arbitration panel and unless otherwise mutually
agreed, the arbitration shall commence within ninety (90) days of the date on
which a written demand for arbitration is filed by any Party hereto. In
connection with the arbitration proceeding, the arbitrators shall have the power
to order the production of documents by each Party and any third-Party
witnesses; and the parties shall exchange production of documents no later than
thirty (30) days before the date of the arbitration and shall exchange witness
lists no later than fourteen (14) days before the date of the arbitration. The
arbitrators’ decision and award shall be made and delivered within ninety (90)
days of the conclusion of the arbitration. The arbitrators’ decision shall set
forth a reasoned basis for any award of damages, finding of liability, or other
relief. The arbitrators shall not have power to award damages in excess of
actual compensatory damages and shall not multiply actual damages or award
punitive damages or any other damages that are specifically excluded under this
Agreement, and each Party hereby irrevocably waives any claim to such
damages.
(c) The
Parties covenant and agree that they will participate in the arbitration in good
faith and that they will, except as provided below, (i) bear their own
attorneys’ fees, costs, and expenses in connection with the arbitration, and
(ii) share equally in the fees and expenses of the arbitration, including forum
fees, the fees of the arbitrators, and the cost of the official transcript of
the proceedings. The arbitrators may in their discretion assess costs and
expenses (including the reasonable legal fees and expenses of the prevailing
Party) against any Party to the proceeding. Any Party unsuccessfully refusing to
comply with an order of the arbitrators shall be liable for costs and expenses,
including attorneys’ fees, incurred by the other Party in enforcing the
award.
9.2.
Confidentiality.
(a) Prior
to the Closing, the parties shall, and shall cause their Affiliates and its and
their employees, agents, accountants, legal counsel and other representatives
and advisers to, hold in strict confidence all, and not divulge or disclose any,
information of any kind concerning each other and their business; provided,
however, that the foregoing obligation of confidence shall not apply to (i)
information that is or becomes generally available to the public other than as a
result of a disclosure by the parties or their Affiliates or any of its or their
employees, agents, accountants, legal counsel or other representatives or
advisers, (ii) information that is or becomes available to the parties or their
Affiliates or any of its or their employees, agents, accountants, legal counsel
or other representatives or advisers on a non-confidential basis prior to its
disclosure by the parties or their Affiliates or any of its or their employees,
agents, accountants, legal counsel or other representatives or advisers and
(iii) information that is required to be disclosed by the parties or their
Affiliates or any of its or their employees, agents, accountants, legal counsel
or other representatives or advisers as a result of any applicable law, rule or
regulation of any Governmental Authority; and provided further that the parties
promptly shall notify each other of any disclosure pursuant to clause (iii) of
this Section; and, provided, further, that the foregoing obligation of
confidence shall not apply to the furnishing of information by the parties in
bona fide discussions or negotiations with prospective lenders and
investors.
17
9.3 Notices. Any notice,
request, instruction, correspondence or other document to be given hereunder by
any Party hereto to another shall be in writing and mailed by registered or
certified mail, postage prepaid and return receipt requested, or by facsimile
and email as follows:
IF TO STF:
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To
|
With
copies to
|
|
Solar
Thin Films, Inc.
116
John Street, Suite 1120
New York,
New York 10038
Attn:
Gary Maitland, Vice President and General Counsel
email:
gary.maitland@solarthinfilms.com
|
Hodgson
Russ, LLP
1540
Broadway, 24th
Floor
New
York, New York 10036
Attention:
Stephen A. Weiss, Esq.
Fax
No. 212-751-0928
email:
sweiss@hodgsonruss.com
|
IF TO THE COMPANY, AND/OR
THE COMPANY
STOCKHOLDER:
|
To
|
With
a copy to
|
|
Dr.
Istvan Krafcsik & Attila Horvath
Konkoly-T.
ut 29-33
H-1121
Budapest, Hungary
Fax
No. +361 392 2617
email:
istvan.kfrafcsik@budasolar.hu
email:
attila.horvath@budasolar.hu
|
Dessewffy
David
H-1061
Budapest,
Andrassy ut.43
Hungary
Attn:
Dr. David Aliz
Fax
No. +36 1-413-3340
email:
david@dessewffy.com
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9.4 Governing Law. The
provisions of this agreement and the documents delivered pursuant hereto shall
be governed by and construed in accordance with the laws of the State of New
York (excluding any conflict of law rule or principle that would refer to the
laws of another jurisdiction). Notwithstanding the foregoing, the laws of
Hungary shall govern the transfer of Quotas and the Krafcsik and Horvath
Employment Agreements.
9.5.
Entire Agreement;
Amendments and Waivers. This Agreement constitutes the entire agreement
between and among the Parties hereto pertaining to the subject
matter.
9.6 Multiple Counterparts and
Facsimile Signatures. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Facsimile signatures of
the Parties to this Agreement shall be deemed to be as valid and binding upon
such Parties as though they were ribbon original signatures.
[balance
of this page intentionally left blank – signature page follows]
18
IN WITNESS WHEREOF, the
Parties hereto have executed this Stock Exchange Agreement as of the date first
written above.
PARENT:
SOLAR
THIN FILMS, INC.
By:
Name:
Robert M. Rubin,
Chief Executive
Officer
and Chairman of the
Board
COMPANY:
BUDASOLAR
TECHNOLOGIES CO., LTD.
By:
Istvan
Krafcsik,
President
& Chief Technical Officer
NEW
PALACE INVESTMENTS LTD.
By:
Istvan
Krafcsik,
President
COMPANY
STOCKHOLDERS:
ISTVAN
KRAFCSIK
ATTILA
HORVATH
19