PURCHASEAGREEMENT concludedby and between MilanGottwald, Tax Id.No.: CZ ###-###-#### residingat: Nklo 334, Postal Code: 783 32 accountNo. 6319656084/2700, kept by UniCredit Bank Czech Republic, a.s. (hereinafterthe Seller) on theone part and SENDIOs.r.o. Id. No.:281 64440, Tax Id.No.: CZ28164440 with itsregistered office: Olomouc, Holick 156/49, Postal Code 77900, registeredin the Commercial Register kept by the Regional Court in Ostrava in Section C,Inset 43097, representedby Philip Glyn Styles and William Duncan Troy, Executives of thecompany (hereinafterthe Buyer) on theother part (theSeller and the Buyer are hereinafter jointly referred to as the Parties) Preamble

A.

On May 28, 2008, the Parties concluded a lease contract providing for step-by-step lease of the Premises (as defined in Art. I (1) of the Lease Contract) by the Seller to the Buyer (hereinafter the “Lease Contract”). On September 16, the Parties concluded Amendment No. 1 to the Purchase Agreement.

B.

The Lease Contract was concluded by the Parties with the intention to conclude, as soon as possible after the conclusion of the Lease Contract, a purchase agreement, whereby the Seller would transfer the ownership title to the Premises (as defined in Art. I (1) of the Lease Contract) and to other real estate to the Buyer.

C.

On April 18, 2003, the Seller and other co-debtors, on the one part, and Živnostenská banka, a.s., with its registered office at Na Příkopě 858/20, Prague 1, 113 80, Id. No.: 00001368 (currently, UniCredit Bank Czech Republic, a.s., with its registered office: Prague 1, Na Příkopě 858/20, Postal Code 111 21, Id. No.: 649 48 242) (hereinafter the “Bank“), on the other part, concluded Mortgage Loan Agreement No. HF 116/03, as amended by Amendment No. 1 to Mortgage Loan Agreement No. HF 116/03 of April 24, 2003, on the basis of which the Seller was provided with a loan in the amount of CZK 20,000,000.00 (in words: twenty million Czech crowns) (hereinafter the “Loan”).

D.

Simultaneously with this Agreement, the Buyer, the Seller and UniCredit Bank Czech Republic, a.s., with its registered office: Prague 1, Na Příkopě 858/20, Postal Code 111 21, Id. No.: 649 48 242, (hereinafter the “Escrow Agent”) conclude an escrow agreement (hereinafter the “Escrow Agreement”), providing, inter alia, for establishment of escrow account No. 2101989486/2700 (hereinafter the “Escrow Account”), which shall be used exclusively for the purposes described in the Escrow Agreement.

E.

The Buyer intends to establish his registered office and build manufacturing premises in the Real Estate (as defined in Art. I (1) hereof) and to operate its business there, and this prior to the legal effects of the transfer of the Real Estate to the Buyer.

F.

The Seller is the exclusive owner of the Real Estate (as defined in Art. I (1) hereof) and intends to sell the Real Estate to the Buyer for the agreed purchase price and under the terms and conditions stipulated hereafter in this Agreement. The Buyer intends to purchase the Real Estate from the Seller for the agreed purchase price and under the terms and conditions stipulated hereafter in this Agreement.

G.

The objective of this Agreement is to ensure that the Buyer becomes, with effect from July 1, 2009, the exclusive owner of the Real Estate (as defined in Art. I (1) hereof) free of any third-party rights, except for those on which the Parties have agreed, and also that the Seller is paid the agreed purchase price for sale of the Real Estate to the Buyer.

H.

The Parties agree that the ownership title to movable assets located in the Real Estate on the date of conclusion hereof, or on the date of effect of the transfer of the Real Estate to the Buyer, as appropriate, (e.g. apparatus, equipment of offices, etc.), in which the Buyer is interested and which the Seller intends to sell, shall be transferred from the Seller to the Buyer by virtue of a separate purchase contract concluded between the Parties.

 

all the above in the cadastral area of Hodolany, the municipality of Olomouc, registered in the Land Registry kept by the Cadastral Authority for the Olomouc Region, Olomouc cadastral workplace, on title sheet (LV) No. 2978 (hereinafter the “Premises”), from the ownership of the Seller to the ownership of the Buyer. An up-to-date extract from the Land Registry, in which the Real Estate is recorded, is attached to this Agreement as its Schedule No. 1. A ground plan of the Real Estate is attached to this Agreement as its Schedule No. 2.

2.

By virtue of this Agreement, the Seller sells, i.e. transfers for consideration, the Real Estate to the Buyer under the terms and conditions stipulated herein and for the agreed Purchase Price (as defined in Art. II (1) hereof) and, by virtue of this Agreement, the Buyer purchases, i.e. accepts the ownership title to, the Real Estate, tel quel, from the Seller under the terms and conditions stipulated herein, and agrees to pay the Seller the agreed Purchase Price. The effects of purchase and sale of the Real Estate hereunder are subject to the preconditions stipulated in Art. VII (1) hereof.

 

 

2.

The Buyer shall pay the Purchase Price to the Seller by means of the Escrow Account, with the collaboration of the Escrow Agent, under the payment terms and other terms and conditions, as specified in Art. III. and Art. IX. hereof.

1.

The Parties jointly represent and confirm that, prior to conclusion hereof, on May 29, 2008, the Buyer paid the Seller, and the Seller received from the Buyer, the amount of CZK 4,000,000.00 (in words: four million Czech crowns). The Parties acknowledge that, according to their joint will, as of May 29, 2008, the above was a payment effected on the basis of Art. IV (5) of the Lease Contract as an advance on future payments of the rent under the Lease Contract. Furthermore, the Parties acknowledge that, as a consequence of conclusion hereof, in accordance with Art. XV (4) of the Lease Contract, this payment shall further be considered to be an advance on the Purchase Price within the meaning of Section 498 of the Civil Code, or first installment on the Purchase Price hereunder.

2.

The Buyer agrees to deposit the balance of the Purchase Price for the Real Estate in the Escrow Account in individual installments as follows:

 

(i)

the amount of CZK 11,000,000.00 (in words: eleven million Czech crowns) shall be paid by the Buyer into the Escrow Account at the latest by February 28, 2009;

 

(ii)

the amount of CZK 2,500,000.00 (in words: two million five hundred thousand Czech crowns) shall be paid by the Buyer into the Escrow Account at the latest by April 30, 2009;

 

(iii)

the amount of CZK 3,000,000.00 (in words: three million Czech crowns) shall be paid by the Buyer into the Escrow Account at the latest by May 5, 2009;

 

(iv)

the amount of CZK 153,130,000.00 (in words: one hundred and fifty-three million one hundred and thirty thousand Czech crowns) shall be paid by the Buyer into the Escrow Account (subject to a possible change pursuant to Art. III (6) hereof) at the latest by June 30, 2009;

 

(v)

the amount of CZK 5,370,000.00 (in words: five million three hundred and seventy thousand Czech crowns) shall be paid by the Buyer into the Escrow Account (subject to a possible change pursuant to Art. III (6) hereof) at the latest by June 30, 2009.

3.

The obligation of the Buyer to deposit the individual installments in the relevant account pursuant to Art. III (2) hereof shall be considered to be duly fulfilled upon crediting the entire amount of the relevant individual installment to the Escrow Account.

4.

The Buyer shall also be entitled to pay the individual parts of, or installments on, the Purchase Price, as specified in Art. III (2) hereof prior to the individual dates stipulated in Art. III (2) hereof. In this case, the Buyer shall pay any contractual fine and other penalties required by the Bank in connection with early repayment of the Loan.

5.

The manner and terms of payment of part of the Purchase Price in the amount of CZK 175,000,000.00 by the Buyer into the Escrow Account, as well as the manner and terms of release of the money from the Escrow Account, are described in Art. IX. hereof and also in the Escrow Agreement, whose wording, approved by the Parties, without annexes, is attached to this Agreement as its Schedule No. 3.

6.

The manner of payment of the individual installments on the Purchase Price as specified in Art. III (2) (iv) and (v) hereof, as regards identification of the account into which the relevant amount is to be paid, may be changed after conclusion hereof. The conditions of the change, including the related changes in the manner of subsequent release of the Purchase Price, are specified in Art. XIV (8) hereof.

 

1.

The Seller represents and warrants to the Buyer that:

he has all the necessary authorizations and powers to conclude and perform this Agreement and to perform his obligations following from this Agreement; this Agreement gives rise to a legally binding and valid obligation of the Seller that can be enforced against him in accordance with its terms and deadlines;

he is the exclusive owner of the Real Estate and has been the exclusive owner thereof for a period exceeding 3 (three) years prior to conclusion hereof;

the Real Estate is neither divided nor combined and is free of any legal defects, particularly contractual pre-emption rights, contractual mortgage rights, except for the mortgage right established in favor or the Bank which secures the Seller’s debt in the amount of CZK 20,000,000.00, third-party rights corresponding to contractual easements, except for the easements set forth on Title Sheet (LV) No. 2978, which is attached to this Agreement as its Schedule No. 1, lease rights and other rights of use, except for the leases set forth in Schedule No. 5 hereof, other rights or limitations and encumbrances for the benefit of third parties, regardless of whether or not these rights are registered in the Land Registry, including, but not limited to, the fact that it is not the subject of any pending enforced restitution claims, it is not encumbered with any tax or other receivables or arrears, and no court, administrative, arbitration or other proceedings are pending with respect to the ownership title or right of use to the Real Estate, and the Seller and/or any person authorized by the Seller has not performed any act that could encumber or limit the Real Estate in any of the above-mentioned ways, except for the easements that have arisen by operation of law, without the prior consent of the Buyer; the Seller is not aware that the legal relationships to the Real Estate would be or could be affected by a change in the legal relationships (i.e. a “note”);

the Seller is not aware that the Real Estate would have other factual material defects having their origin in the period when the Seller was the owner of the Real Estate (i.e. 5 years – since May 2003) other than those of which the Seller has informed the Buyer prior to conclusion hereof and/or those that the Buyer has ascertained himself on the basis of his investigations prior to conclusion hereof and of which he has notified the Seller in accordance with Art. VI (1) (h) hereof;

no third person, including the tenants set forth in Schedule No. 5 hereof, is entitled, or has incurred within the last four (4) years prior to the effect of the transfer of the Real Estate hereunder, an unsettled entitlement to request that the Seller reduce the amount of the rent or provide a discount on the rent, indemnification or any other pecuniary amount (including claims on the grounds of unjust enrichment, etc.); no third person, including the aforementioned tenants, has provided, either in the past or at the present time, any advance payment in any form whatsoever on rent or fees for services, or has provided the Seller with any down payment or performance aimed at a future performance that is to be effected at any time after July 1, 2009, except for the usual security deposits or payments set out in the contracts with the tenants pursuant to Schedule No. 5 hereof; if the Seller has received any funds from the tenants of the Real Estate for the purpose of securing the rent and payments for the performances provided in connection with use of the real estate and for payment of any obligations related to the lease of the Real Estate (deposits, security, collateral) and these are related to the period when the right to manage the Real Estate was already borne by the Buyer as the owner of the Real Estate, the Seller agrees to transfer such funds within 14 (fourteen) days of acceptance of the Real Estate pursuant to Art. VIII (1) (iv) and Art. X. hereof to the Buyer’s bank account, which shall be communicated by the Buyer to the Seller to this end (this provision shall not apply to down payments, security deposits and other funds obtained by the Seller from the Buyer on the basis of the Lease Contract;

 

if the following was stored or maintained in the Real Estate:

 

hazardous waste, as defined in Section 4 (a) of Act No. 185/2001 Coll., on waste, as amended (hereinafter the “Waste Act”); and/or

 

dangerous substances, as defined in Section 2 (5) of Act No. 356/2003 Coll., on chemical substances and chemical preparations, as amended (hereinafter the “Chemical Substances Act”); and/or

 

dangerous preparations, as defined in Section 2 (5) of the Chemical Substances Act;

he is not aware that any hazardous waste as defined in subpar. (0) above would be stored or maintained in the Real Estate and/or part thereof prior to acquisition of the Real Estate by the Seller;

 

he is not aware that any unauthorized structures would be located in the Real Estate, regardless of whether or not these structures would be registered in the Land Registry or third-party structures;

 

direct access to the Real Estate is ensured for pedestrians and vehicles from a public road; the Seller is not aware that access by pedestrians and/or vehicles to the Real Estate would be restricted in any manner whatsoever (except for usual maintenance and repairs) and/or subject to payment;

 

the Seller represents that, as of the date of hereof, there is no pending court dispute with any supplier of electricity, water, gas and heat and the contracts with these suppliers are not being breached, as a consequence of which these contracts would be terminated; furthermore, the Seller represents that no fees are paid for use of the engineering networks to which the Real Estate is directly linked and that their use results in no additional costs or other obligations; the Seller is not aware of any disputes with the mentioned suppliers with respect to the prices of energies and/or outstanding payments for the provided services;

the Seller agrees to pay the installments on the Loan duly, in the full amount and in a timely manner, as agreed in the Mortgage Loan Agreement specified in Recital C. hereof.

2.

The Seller makes the representations and warranties set out in this Art. IV hereof as of the date of this Agreement and is aware that the Buyer relies on these representations and warranties in conclusion hereof and would never conclude this Agreement without them.

3.

The Seller agrees to reassure the Buyer of the continuing validity, accuracy and completeness of the representations and warranties set out in this Art. IV. hereof repeatedly, including prior to the actual transfer of the Real Estate in accordance with Art. VIII (1) (i) hereof. If the Seller is unable to provide this reassurance, because he is aware of any facts or matters that could cause this reassurance to be false, inaccurate, incomplete or misleading, he shall explicitly state these facts in the reassurance as exemptions.

4.

The Seller represents that, as of the date hereof, he is not aware of any breach of the representations and warranties of the Buyer set out in Art. VI. hereof.

1.

The Seller agrees that, at the latest by June 30, 2009, the Real Estate will be free of any legal defects, particularly contractual pre-emption rights, contractual mortgage rights, third-party rights corresponding to contractual easements, except for the easements set forth in Schedule No. 7 hereof and easements established on the basis of the legal regulations or decisions of public authorities without respect to the Seller’s will, lease rights and other rights of use, except for the leases set forth in Schedule No. 5 hereof, other rights or limitations and encumbrances for the benefit of third parties, regardless of whether or not these are rights registered in the Land Registry.

2.

The Seller’s obligation pursuant to Art. V (1) hereof also does not cover the mortgage right for the benefit of the Bank securing its receivables from the Loan. The effects of this obligation are conditional on due deposition of the individual installments on the Purchase Price in the Escrow Account pursuant to Art. III (2) (i) to (iii) hereof. Furthermore, the Parties represent and acknowledge that the time of deletion of this mortgage right from the Land Registry cannot be unambiguously specified and influenced on the date of conclusion hereof, as it depends on the procedure of the competent cadastral authority and due collaboration by the Bank. The Seller agrees that, without undue delay after the above-specified preconditions for effects of this obligation are fulfilled, he will take all steps that can be reasonably required from him to ensure that the mortgage right is deleted from the Land Registry at the latest by the date specified in Art. V (1) hereof or as soon as possible thereafter.

3.

The Seller’s obligation to maintain the Real Estate in a condition enabling the Buyer to use the Real Estate in accordance with the provisions of the Lease Contract is in no way prejudiced by this Agreement.

1.

The Buyer represents and warrants to the Seller that:

 

it is a limited liability company duly established and existing under the laws of the Czech Republic and has the capacity to conclude this Agreement and perform all the rights and obligations following for the Buyer from this Agreement, for which it also has all the necessary authorizations and powers, which condition also applies to the person who will execute and conclude this Agreement on behalf of or for the Buyer; this Agreement gives rise to a legally binding and valid obligation of the Buyer that can be enforced against it in accordance with its terms and deadlines; the details on the Buyer set out in the up-to-date extract from the Commercial Register, which is attached to this Agreement as its Schedule No. 6, correspond to the facts;

 

the Buyer (as a corporation) has a sole shareholder, namely VU1 Corporation, with its registered office in 557 Roy Street, Suite 125, WA 98109, U.S.A. (registered in California at San Mateo, Gateway Drive, Suite ###-###-####, 944 04, CA, U.S.A.) (hereinafter “VU1 Corporation”);

 

all consents of the General Meeting, any other body of the Buyer and/or VU1 Corporation, administrative bodies or other public authorities and/or the courts that are necessary for conclusion hereof, as well as for acquisition of the Real Estate by the Buyer and payment of the Purchase Price hereunder, have been granted;

 

conclusion of this Agreement and performance of the obligations arising out of this Agreement by the Buyer will not violate any legal regulation, contractual or statutory obligation or any court, administrative or other decision of public authorities concerning the Buyer;

 

the Buyer performs its obligations duly and in time, and

 

(i)

is not insolvent or in danger of insolvency;

 

(ii)

has not lodged an insolvency petition and/or proposal for a moratorium related to it and has not been informed that such a proposal would be lodged by any third party;

 

(iii)

is not negotiating with its creditors on conclusion of any agreement, on the basis of which the creditors would obtain and/or would be paid smaller amounts than those equal to the nominal value of their receivables;

 

(iv)

has no insolvency trustee, execution administrator, receiver or other administrator, liquidator, curator or guardian appointed by the court or some other public authority or appointed otherwise, who would limit the disposal of its assets; and

 

(v)

has no unperformed obligations imposed thereon by a court or other decision, order or arbitral award and no enforcement of a decision or execution is pending with respect to it or its assets;

 

the Buyer is fully capable of performing its obligations arising for the Buyer from this Agreement in a due and timely manner; furthermore, the Buyer represents that, at the latest within the deadlines stipulated in this Agreement or, as the case may be, in the Escrow Agreement, it will have available sufficient funds to pay the parts of the Purchase price stipulated by this Agreement or, as the case may be, the Escrow Agreement;

 

the guarantor’s declaration made by the Buyer’s parent company, i.e. VU1 Corporation, as set out in Art. VI (2) hereof, is valid, binding and fully enforceable by the Seller in accordance with its terms and deadlines;

 

prior to conclusion hereof and also as of the date of effects hereof, the Buyer was able to become thoroughly acquainted with the Real Estate and its condition, without any limitation,  and used this opportunity to the full extent, particularly by performing legal, environmental and construction-technical audit (due diligence) of the Real Estate (which it completed on March 18, 2008), including control of its actual state and visual control aimed at assessing the statics and dynamics of the Real Estate (performed on August 21, 2008), and, on the basis of this inspection, studies and assessment, it has found no defects in the Real Estate, other than those that the Buyer communicated to the Seller prior to conclusion hereof; simultaneously, the Buyer represents that it finds the condition of the Real Estate to be suitable and compatible with the subject and objective hereof, and that it has not required, either in writing or orally, any specific properties of the Real Estate, other than those that are expressly specified in this Agreement, and that it has not been assured by the Seller in any way whatsoever of any specific properties of the Real Estate, other than those that are expressly stipulated in this Agreement; furthermore, the Buyer represents that it is sufficiently acquainted with the legal and factual condition of the building without a Reg. No., technical infrastructure, located on property lot No. 1417 in the cadastral area of Hodolany, the municipality of Olomouc (the “water plant”).

3.

The Buyer makes the representations and warranties set out in this Art. VI hereof as of the date of this Agreement and is aware that the Seller relies on these representations and warranties in conclusion hereof and would never conclude this Agreement without them.

4.

The Buyer agrees to reassure the Seller of the continuing validity, accuracy and completeness of the representations and warranties set out in this Art. VI. hereof repeatedly, including prior to the actual transfer of the Real Estate in accordance with Art. VIII. (1) (i) hereof. If the Buyer is unable to provide this reassurance, because it is aware of any facts or matters that could cause such reassurance to be false, inaccurate, incomplete or misleading, it shall explicitly state these facts in the reassurance as exemptions.

5.

The Buyer represents that, as of the date hereof, it is not aware of any breach of the representations and warranties of the Seller set out in Art. IV. hereof.

1.

The effects of Art. I (2) hereof are subject to fulfillment of the following conditions precedent:

 

(i)

the Parties have concluded the Escrow Agreement with the Escrow Agent (this shall in no way prejudice Art. XIV (8) hereof);

 

(ii)

the individual installments on the Purchase Price pursuant to Art. III (2) hereof (i.e. the total amount of CZK 175,000,000.00; in words: one hundred and seventy-five million Czech crowns) have been deposited in the Escrow Account, which fact shall be proven by a declaration of the Escrow Agent in accordance with the Escrow Agreement.

2.

If the conditions precedent set out in Art. VII (1) hereof are not fulfilled by January 31, 2010 or on a later date agreed in writing by the Parties, this Agreement shall expire and the Purchase Price in the amount deposited in the Escrow Account, including accrued interest, shall be returned to the Buyer in accordance with the Escrow Agreement. All the rights and obligations of the Parties under this Agreement shall expire upon expiry of this Agreement, except for the rights and obligations of the Parties incurred as a consequence of breach of the obligations hereunder.

1.

Without undue delay after the Escrow Agent makes a declaration pursuant to Art. VII (1) (ii) hereof to the effect that the entire amount of the Purchase Price has been deposited in the Escrow Account, the Parties shall perform the following acts in the following order:

 

(i)

the Parties shall submit to each other an up-to-date written confirmation on the validity, accuracy and completeness of the representations and warranties pursuant to Art. IV (3) and Art. VI (4) hereof; and subsequently

 

(ii)

the Seller and the Buyer shall draw up a joint declaration and confirmation for the purposes of lodging an application for registration of the ownership title to the Real Estate in the Land Registry pursuant to paragraph (iii) hereof to the effect that all the preconditions for effectiveness of the purchase and sale of the Real Estate (transfer) pursuant to this Agreement have been fulfilled; the form of this declaration is attached to this Agreement as its Schedule No. 4; and subsequently

 

(iii)

the Buyer or a representative authorized by the Buyer shall lodge an application for registration of the ownership title to the Real Estate in the Land Registry, with all the requisites and annexes, with the competent cadastral authority; and subsequently

 

(iv)

the Seller shall deliver, and the Buyer shall accept from the Seller, the Real Estate in accordance with Art. X. hereof.

2.

The special provisions set out in Art. XI. hereof shall apply for the purposes of registration of the ownership title to the Real Estate in the Land Registry pursuant to Art. VIII (1) (iii) hereof.

3.

The Buyer shall acquire the ownership title to the Real Estate upon registration of the title in the Land Registry, with legal effects as of the date of delivery of the application for registration to the cadastral authority, in accordance with Section 133 (2) of the Civil Code and Section 2 (3) of Act No. 265/1992 Coll., on registration of ownership titles and other rights in rem to real estate, as amended.

1.

Without undue delay after registration of the ownership title of the Buyer to the Real Estate is permitted through a final decision issued on the basis of an application for registration lodged in accordance with Art. VIII (1) (iii), the following acts shall be performed, in the following order:

 

(i)

pursuant to the relevant provisions of the Escrow Agreement, the Escrow Agent shall pay to the Seller, from the Escrow Account, the amount of CZK 153,130,000.00 (in words: one hundred and fifty-three million one hundred and thirty thousand Czech crowns) into the Seller’s account specified in the header hereof and shall submit a written confirmation of this fact to each of the Parties; and subsequently

 

(ii)

the Seller shall pay, to the substantively and locally competent tax authority, real estate transfer tax on the grounds of transfer of the Real Estate hereunder and submit the relevant document to this effect to the Escrow Agent; and subsequently

 

(iii)

pursuant to the relevant provisions of the Escrow Agreement, the Escrow Agent shall pay to the Seller, from the Escrow Account, the amount of CZK 5,370,000.00 (in words: five million three hundred and seventy thousand Czech crowns) into the Seller’s account specified in the header hereof; and subsequently

2.

Further details on the required formalities and procedural aspects of the settlement are stipulated in the Escrow Agreement (or are stipulated in accordance with Art. XIV (8) hereof, as appropriate).

1.

The Parties represent and confirm that the Buyer already uses or will use a major part of the Real Estate for its needs on the basis of the Lease Contract and that this part of the Real Estate has been or will be duly delivered by the Seller to the Buyer in accordance with the Lease Contract. The subject of delivery and acceptance pursuant to this Agreement shall consist solely in the remaining part of the Real Estate that has not been delivered to the Buyer on some other grounds, particularly on the grounds of the Lease Contract (hereinafter the “Remaining Part of the Real Estate”).

2.

The Seller shall be obliged to deliver the Remaining Part of the Real Estate to the Buyer and the Buyer shall be obliged to accept the Remaining Part of the Real Estate from the Seller in accordance with Art. VIII (1) (iv) hereof, unless the Parties agree otherwise.

3.

The Buyer and the Seller shall execute a protocol on delivery and acceptance of the Remaining Part of the Real Estate. The time of completion of the process of delivery of the Remaining Part of the Real Estate, execution of the protocol on delivery and acceptance of the Remaining Part of the Real Estate by both Parties and the time when the Seller hands over all the keys/chip cards and documents (e.g. lease contracts, supplier contracts, plans, etc.) related to the Real Estate (including the Remaining Part of the Real Estate) shall be deemed to be the time of full and due delivery and acceptance of the Real Estate (as a whole) by the Seller to the Buyer hereunder, including those parts of the Real Estate that were delivered to the Buyer earlier on some other grounds, particularly on the basis of the Lease Contract. Both Parties shall also confirm this full and due delivery and acceptance of the Real Estate (as a whole) in the protocol mentioned in the first sentence of this provision.

1.

The Buyer or a representative authorized by the Buyer agrees to lodge an application for registration of the ownership title to the Real Estate together with all the requisites and annexes with the competent cadastral authority in accordance with Art. VIII (1) (iii) hereof. The Buyer agrees to submit a copy of the application for registration of the ownership title to the Real Estate in the Land Registry with the stamp of the filing department of the cadastral authority, date and file number to the Seller promptly after lodging of the application for registration of the Buyer’s ownership title to the Real Estate.

2.

If the competent cadastral authority requests that the Parties remedy any shortcomings or errors in the application for registration of the ownership title to the Real Estate, the Parties agree to deal with this request and supplement or explain any facts or submit any additional documents without undue delay, but in any case not later than within ten (10) business days of the date of delivery of the request to any of the Parties.

3.

If the competent cadastral authority discontinues the proceedings on permitting registration or rejects the application for registration of the Buyer's ownership title to the Real Estate, the Buyer agrees to lodge a new application for registration of the Buyer's ownership title to the Real Estate. The Parties agree to adopt any and all suitable measures to ensure due registration of the Buyer's ownership title to the Real Estate in the Land Registry as soon as possible. The Parties shall take any and all appropriate measures without undue delay after the competent cadastral authority discontinues the proceedings on permitting registration or rejects the application for registration of the Buyer's ownership title to the Real Estate, but not later than within ten (10) business days of the date of issuing of the decision by the competent cadastral authority notified to either of the Parties.

1.

If any of the representations or warranties made by the Seller in Art. IV (1) (a) to (c) and (e) to (k) hereof proves to be untrue or in case of their breach and/or in case of breach of the Seller’s obligation set forth in Art. V. and Art. XIV (4) hereof (except for breaches pursuant to Art. XII (2) hereof), the Buyer shall be entitled to:

 

(i)

withdraw from this Agreement, with effect as of the date of delivery of the Buyer’s notice of withdrawal from this Agreement to the Seller; and/or

2.

If the Seller’s representations or warranties made in Art. IV (1) (d) concerning the factual defects of the Real Estate are untrue, the Buyer shall be entitled to:

 

(i)

claim an appropriate discount on the Purchase Price in an amount corresponding to the nature and scope of the defect, which may not exceed in aggregate the amount of CZK 25,000,000.00 (in words: twenty-five million Czech crowns); and/or

 

(ii)

claim indemnification (including reimbursement of the necessary expenses) exceeding the claim for a discount pursuant to subparagraph (i) above, which may not exceed in aggregate the amount of CZK 40,000,000.00 (in words: forty million Czech crowns), less the actually paid discount pursuant to subparagraph (i) hereof; or

 

(iii)

withdraw from this Agreement provided that the aggregate amount of the claim for a discount pursuant to subparagraph (i) above has already exceeded the amount of CZK 40,000,000.00 (in words: forty million Czech crowns), with effect as of the date of delivery of the Buyer's notice of withdrawal from this Agreement to the Seller;

3.

If the Seller breaches the prohibition to sell, donate or exchange the Real Estate or part thereof, to encumber the Real Estate in any manner whatsoever, i.e. create mortgage rights, pre-emption rights, etc., as he agreed in the third sentence of Art. XIV (4) hereof, the Buyer shall be entitled to:

 

(i)

withdraw from this Agreement, with effect as of the date of delivery of the Buyer’s notice of withdrawal from this Agreement to the Seller; and/or

 

(ii)

claim a contractual fine in the amount of CZK 179,000,000.00 (in words: one hundred and seventy-nine million Czech crowns); and/or

 

(iii)

claim indemnification exceeding the amount of the contractual fine pursuant to subparagraph (ii) above for damage caused by breach of this obligation, whose amount may not exceed CZK 209,000,000.00 (in words: two hundred and nine million Czech crowns), reduced by the paid contractual fine pursuant subparagraph (ii) above.

4.

If the Seller fails to provide the Buyer with collaboration that can be reasonably requested pursuant to Art. XI (2) and (3) hereof, the Buyer shall be entitled to claim a contractual fine against the Seller in the amount of CZK 20,000.00 (in words: twenty thousand Czech crowns) for each day of delay following the date when the Seller received the Buyer’s request for the provision of this collaboration.

5.

The Parties have agreed that the contractual fines shall be payable at the latest within 10 (ten) calendar days of delivery of the Buyer’s request for payment of the contractual fine to the Seller. If the Seller demonstrably refuses to accept the request for payment of a contractual fine, it shall hold that the Buyer’s request for payment of the contractual fine was delivered to the Seller on the date of the refusal.

6.

The Buyer’s claims against the Seller pursuant to this Art. XII. hereof shall not arise if the Buyer ascertained the facts giving rise to these claims within and/or on the basis of the performed legal, environmental and construction-technical audit (due diligence) of the Real Estate and other assessments, as the Buyer made a representation and warranty to this effect in Art. VI (1) (h) hereof. However, the Buyer’s claims against the Seller pursuant to this Art. XII hereof that would be based on factual defects of the Real Estate shall arise only if the factual defects have their origin in the period when the Seller was the owner of the Real Estate (i.e. 5 years – since May 2003).

7.

The Buyer’s claims against the Seller pursuant to this Art. XII. hereof shall also not arise if the total amount of discount, damage or other harm incurred by the Buyer as a consequence of untruthfulness of the representations or warranties, or breach of the relevant obligation hereunder by the Seller, which has not been remedied in the manner stipulated in paragraph 1 above and which the Buyer would otherwise justifiably enforce against the Seller, does not exceed in aggregate CZK 5,000,000.00 (in words: five million Czech crowns). The Buyer's claims against the Seller arising as a consequence of untruthfulness of the representations or warranties, or breach of the relevant obligation hereunder by the Seller shall be limited only to the claims stipulated in this Art. XII. hereof.

8.

The Buyer shall be entitled to enforce the claims pursuant to this Art. XII (2) hereof, i.e. claims concerning factual defects of the Real Estate, against the Seller only if the costs justifiably incurred by the Buyer for removal of an individual claimed defect exceed the amount of CZK 100,000.00 (in words: one hundred thousand Czech crowns) excluding VAT.

9.

The Buyer’s right to withdraw from this Agreement pursuant to this Art. XII. hereof must be exercised at the latest within 9 (nine) months of the date of lodging the application for registration of the Buyer’s ownership title to the Real Estate pursuant to Art. VIII (1) (iii) hereof. After this date, the Buyer shall no longer be entitled to withdraw from this Agreement.

10.

The Buyer’s right to request any contractual fine from the Seller and the Buyer’s right to request a discount or indemnification from the Seller for breach of the Seller’s obligations stipulated by this Agreement and/or related to it shall expire upon lapse of 9 (nine) months of the date of lodging the application for registration of the Buyer’s ownership title to the Real Estate pursuant to Art. VIII (1) (iii) hereof. All claims of the Buyer following from the right to a contractual fine and/or the right to a discount or indemnification must be enforced against the Seller in writing, together with a definite and specific identification of the breached legal obligation, without undue delay after the Buyer learns of the facts that give rise to these claims or rights; otherwise, they shall expire.

1.

If the Buyer is in delay with any advance payment on the Purchase Price pursuant to Art. III. hereof for a period exceeding 5 (five) business days, the Seller, having requested the Buyer in writing that he pay the relevant advance payment on the Purchase Price at the latest within three (3) business days, which request has not been satisfied, shall be entitled to:

2.

If the Buyer fails to provide the Seller with collaboration that can be reasonably requested pursuant to Art. XI (2) and (3) hereof, the Seller shall be entitled to claim a contractual fine against the Buyer in the amount of CZK 20,000.00 (in words: twenty thousand Czech crowns) for each day of delay following the date when the Buyer received the Seller’s request for the provision of this collaboration.

3.

The Parties have agreed that the contractual fines shall be payable at the latest within 10 (ten) calendar days of delivery of the Seller’s request for payment of the contractual fine to the Buyer. If the Buyer demonstrably refuses to accept the request for payment of a contractual fine, it shall hold that the Seller’s request for payment of the contractual fine was delivered to the Buyer on the date of the refusal.

4.

The Seller’s claims for indemnification against the Buyer hereunder shall also not arise if the total amount of damage or other harm incurred by the Seller as a consequence of breach of the relevant obligation hereunder by the Buyer, which the Seller would otherwise justifiably enforce against the Buyer, does not exceed in aggregate CZK 5,000,000.00 (in words:  five million Czech crowns).

5.

The Seller’s right to request any contractual fine from the Buyer and the Seller’s right to request indemnification from the Buyer for breach of the Buyer’s obligations stipulated by this Agreement and/or related to it shall expire upon lapse of 9 (nine) months of the date of lodging the application for registration of the Buyer’s ownership title to the Real Estate pursuant to Art. VIII (1) (iii) hereof. All claims of the Seller following from the right to a contractual fine and/or the right to indemnification must be enforced against the Buyer in writing, together with a definite and specific identification of the breached legal obligation, without undue delay after the Seller learns of the facts that give rise to these claims or rights; otherwise, they shall expire.

1.

The Parties agree that any and all contractual fines and damages based on this Agreement may be mutually set-off, unless the Parties agree otherwise. Except for the above-mentioned permissible set-off, the Parties shall not be entitled to unilaterally set-off any receivable, or any monetary or non-monetary claim, against receivables, or any monetary or non-monetary claims, of the other Party arisen out of this Agreement (particularly the claim for payment of the Purchase Price) and/or from the Escrow Agreement, without prior written consent of the other Party, unless this Agreement and/or the Escrow Agreement expressly permits this.

2.

The Parties have agreed that, as of the date of effect of registration of the Buyer’s ownership title to the Real Estate in the Land Registry pursuant to Art. VIII (1) (iii) hereof, the Lease Contract shall be terminated unless it has been terminated or otherwise expired previously. The claims of the Parties arisen on the basis of the Lease Contract, namely the claims for payment of the contractual fines, indemnification and default interest, as well as their obligation to maintain confidentiality, shall not expire as a consequence of such termination of the Lease Contract in accordance with its Art. XVI (4) and shall not be otherwise prejudiced.

3.

Furthermore, the Parties have agreed that, in the period from July 1, 2009, inclusive (the latest day of termination of validity and effectiveness of the Lease Contract) to the date of effect of registration of the Buyer’s ownership title to the Real Estate in the Land Registry, the use of the Real Estate shall be governed by this Agreement. A precondition for such use pursuant to the previous sentence shall be

 

(i)

due deposition of an amount of CZK 175,000,000.00 (in words: one hundred and seventy five million Czech crowns) in the Escrow Account (Art. VII. (1) (ii) of this Agreement) and simultaneously also

 

(ii)

due lodging of an application for registration of the Buyer’s ownership title to the Real Estate in the Land Registry, with all the requisites, which the Buyer shall demonstrate by submitting the relevant copy of the application to the Seller (Art. XI (1) hereof).

4.

The Seller shall not be entitled to carry out any construction, i.e. construction of new buildings or extensions to the existing buildings, within the Real Estate. Furthermore, the Seller agrees not to carry out any construction modifications that would interfere with the current condition of the Real Estate. Furthermore, without the Buyer’s prior written consent, the Seller shall not be entitled to establish any new easements; to lease further premises, areas, properties and buildings within the Real Estate to third parties; to extend the term (duration) of a lease or modify the lease agreements in any manner whatsoever; to sell, donate or exchange the Real Estate or any part thereof; to encumber the Real Estate in any manner whatsoever, i.e. establish mortgage rights, pre-emption rights, etc.

5.

If the Seller withdraws from this Agreement pursuant to Art. XIII (1) hereof, the Parties explicitly agree that, furthermore, the Seller shall be entitled to retain the advance payment (or individual installment) paid by the Buyer on the Purchase Price pursuant to Art. III (2) (iii) hereof as a contractual penalty; this shall in no way prejudice Art. XIII (1) hereof. In order to avoid any potential doubts, the Parties also explicitly agree that, in such a case, the Seller shall be entitled to retain, in accordance with the Lease Agreement, all improvements and additions to the Real Estate (as described in Art. VII (8) of the Lease Agreement) that were performed by the Buyer; the grounds (legal title) for this claim consist in indemnification (compensation) for damage that would be incurred by the Seller if he were forced to settle such improvements or other additions to the Real Estate (as described in Art. VII (8) of the Lease Agreement) vis-à-vis the Buyer, even if this occurred as a consequence of breach of the Buyer’s contractual obligations (the Buyer’s claim for settlement shall thus be set-off against the Seller’s claim for indemnification).

6.

The Parties agree on the following addresses, which shall serve as mailing addresses for the purposes of any and all communications and notices delivered in relation to this Agreement:

7.

Any (i) right following from this Agreement, (ii) claim following from breach hereof, (iii) condition precedent or other condition stipulated herein for the benefit of one of the Parties, (iv) deadline for fulfillment of an obligation hereunder by other Party and/or (v) other right or claim relating to this Agreement may only be waived by a written declaration to the Party that is to benefit from such waiver. The waiver shall become effective upon delivery. A waiver shall apply exclusively to the rights, obligations or deadlines expressly specified in the declaration by virtue of which the waiver is effected. The waiver shall in no way prejudice other rights, obligations or deadlines. Non-exercise, failure to exercise or delay in exercising any right or claim hereunder shall not represent waiver of such right or claim. Granting any grace period for the performance of any other Party's obligation shall not represent extension of the deadline for fulfillment thereof.

8.

The Parties hereby agree on the possibility of changing the manner of payment of the individual installments on the Purchase Price as specified in Art. III (2) (iv) and (v) hereof, as regards identification of the account into which the relevant amount is to be paid. At the latest by June 15, 2009, the Parties may jointly determine, in the manner set out in Art. XV (7) hereof, that the Buyer shall not pay these individual installments on the Purchase Price into the Escrow Account kept by the Escrow Agent pursuant to the Escrow Agreement, but rather into some other account kept by some other third party. Such a change shall be valid and effective subject to an agreement concluded between the Parties and the relevant third party stipulating the obligation of the third party to accept the relevant amounts of the individual installments on the Purchase Price into escrow and to release them to the Seller and/or the Buyer under the same or similar terms and conditions as the Escrow Agent pursuant to the Escrow Agreement or pursuant to this Agreement, as appropriate. If such a change is valid and effective, it shall hold that the competence of the Escrow Agent agreed herein or in the Escrow Agreement, as appropriate (but only to the extent concerning acceptance of the relevant amounts of the individual installments on the Purchase Price into escrow and their subsequent release and to the extent of the acts of the Escrow Agent pursuant Art. VII and VIII hereof) shall be performed by the relevant third party (unless the agreement with the relevant third party stipulates otherwise); in that case, simultaneously, the account kept by the relevant third party for the purpose of payment of the relevant amounts of the individual installments on the Purchase Price into escrow and their subsequent release shall be considered to be the Escrow Account. If such a change is valid and effective, other provisions hereof shall be construed in accordance with this provision and also in accordance with the purpose of the change. Furthermore, the Parties have agreed that the relevant third party pursuant to this provision may consist only in a reliable financial institution with respect to which there are objective guarantees of due performance of payment obligations and other obligations decisive for fulfillment of the purpose of this provision; if the Parties fail to agree on the change within the above-specified deadline, but the Seller insists on the change, the Seller shall be entitled to select the relevant third party from the list that is attached to this Agreement as its Schedule No. 9, and the Buyer agrees to respect this selection and, to the extent that can be reasonably requested of the Buyer, allow the relevant change pursuant to this provision.

1.

This Agreement shall come into force upon its execution by both Parties and shall also enter into effect upon its execution by the Parties, except for purchase and sale of the Real Estate, which shall enter into effect after fulfillment of the preconditions stipulated in Art. VII (1) hereof. In accordance with Section 133 (2) of the Civil Code and Section 2 (3) of Act No. 265/1992 Coll., on registration of ownership titles and other rights in rem to real estate, as amended, the Buyer shall acquire the ownership title to the Real Estate upon registration of the title in the Land Registry, with legal effects as of the date of delivery of the application for registration to the cadastral authority.

2.

The real estate transfer tax for the transfer of the ownership title to the Real Estate in accordance with the provisions hereof shall be paid by the Seller. The administrative fees related to registration of the rights in the Land Registry shall be paid by the Buyer.

3.

Any and all costs and expenses incurred by any of the Parties in connection with this Agreement, including, but not limited to (i) the costs of the analysis (due diligence) and other expert assessments, (ii) the costs and fees of financial, accounting, legal and other counsels, (iii) the costs relating to negotiations prior to execution hereof, (iv) the costs incurred in relation to execution of rights or fulfillment of obligations hereunder and (v) any other costs and/or expenses, shall be borne by the Party that incurred them, unless expressly stipulated otherwise in this Agreement. The Escrow Agent’s remuneration for establishing and keeping the Escrow Account pursuant to the Escrow Agreement shall be paid by each of the Parties in a 1:1 ratio; if the remuneration is paid to the Escrow Agent in the full amount only by one of the Parties pursuant to the Escrow Agreement, the other Party agrees to reimburse the Party paying the remuneration, without undue delay, for the relevant part of the remuneration according to the mentioned ratio. The provisions of the preceding sentence shall apply analogously also in the case pursuant to Art. XIV (8) hereof. Furthermore, the Parties agree that the Buyer shall pay the Seller 50 % of the accrued interest, into an account communicated to the Buyer by the Seller to this end, without delay after the accrued interest that was credited monthly by the Escrow Agent to the escrow amount (as defined in Art. II (1) of the Escrow Agreement) is credited to the Buyer’s bank account pursuant to Art. II (5) of the Escrow Agreement, but no later than within five (5) business days from the date of crediting the relevant Buyer’s account with the accrued interest.

4.

Neither of the Parties shall be entitled to assign its rights and obligations following from this Agreement to any third party without the prior written consent of the other Party, unless such assignment is expressly permitted by this Agreement. This Agreement is and shall be binding also for the heirs and/or legal successors of the Parties, where each of the Parties agrees to perform any and all acts necessary to this end. In case of passage of the rights and obligations following from this Agreement on the basis of an act of any Party (including, but not limited to, a merger, transfer or contribution of a business or part thereof, transfer of assets or any other dispositions with assets), the Party, whose rights have thus been transferred, shall guarantee fulfillment of the devolved obligations. No provision hereof shall establish any rights of obligations of third parties that are not the Parties, unless expressly stipulated otherwise in this Agreement.

5.

This Agreement shall be governed by and interpreted in accordance with the laws of the Czech Republic, to the exclusion of conflict rules referring to the use of foreign laws. In order to avoid any doubts, the Parties state that this Agreement shall be governed by the Civil Code and, with respect to registration of the ownership title to the Real Estate, also by Act No. 265/1992 Coll., on registration of ownership titles and other rights in rem to real estate, as amended. This provision shall not apply to the guarantor’s declaration made by the Buyer’s parent company, as set out in Art. VI (2) hereof.

6.

The Seller hereby explicitly agrees that, as of the date of lodging the application for registration of the ownership title to the Real Estate in the Land Registry hereunder, the Buyer may, at his own expense, either himself or through a third party, commence construction, revitalization, reconstruction etc. of the Real Estate in accordance with the valid and final decisions of the administrative authorities and perform all the necessary and required acts in this relation. This consent shall apply only to those cases where the rights and justified interests of the Seller as the owner of the Real Estate are not and will not be endangered or infringed. Furthermore, the Seller agrees to provide the Buyer with all collaboration that can be reasonably required.

7.

This Agreement may be modified only in writing, by means of consecutively numbered amendments executed by both Parties.

8.

This Agreement contains the entire agreement of the Parties with respect to the purchase/sale of the Real Estate and no other contract, agreement, declaration or covenant made by any of the Parties that is not contained herein shall be binding on the Parties in relation to the subject of this Agreement. This Agreement cancels and replaces all previous contracts, agreements, declarations or covenants related to the purchase/sale of the Real Estate made by any of the Parties prior to the conclusion hereof. This shall not apply to the agreement on the manner and conditions of payment of the Purchase Price and settlement thereof through the Escrow Agent, as stipulated herein and in the Escrow Agreement. Article headings are included for convenience of reference only and shall in no respect whatsoever serve for interpretation of the terms and provisions hereof.

9.

The Parties shall be obliged to maintain confidentiality of the terms and conditions hereof and of information which they obtained during its negotiation, unless disclosure thereof is required by a law or some other generally binding regulation. The obligation to maintain confidentiality pursuant to this provision shall not apply to information disclosed:

 

to legal and other counsels of the Parties bound by similar obligations to maintain confidentiality; and/or

 

if the information has already been disclosed by the relevant Party or has become publicly known without breach of obligations by any Party, and/or

 

to entities that are entities related to the Party hereof within the meaning of Section 66a of the Commercial Code (hereinafter “related entities”) provided that such disclosure is necessary for the purposes of performance of the obligations of the relevant Party and/or the exercise of its rights following from this Agreement; and/or

 

to banks or other financial institutions financing the Seller and/or the Buyer, stock exchanges where shares of the related entities are listed and/or traded, and to governmental agencies (including, but not limited to, the U.S. Securities and Exchange Commission);

 

to the shareholders of VU1 Corporation and information that publicly listed companies are obliged to publish in accordance with the laws of the State of Washington.

10.

The claims of the Parties to payment of the contractual fine, damages and default interest, as well as their obligation to maintain confidentiality, shall not expire upon withdrawal from this Agreement, its termination, canceling or other expiry.

11.

This Agreement has been drawn up in six (6) counterparts, of which each of the Parties shall obtain one (1) counterpart immediately after conclusion hereof and four (4) counterparts hereof shall be attached to the relevant application for registration of the Buyer’s ownership title to the Real Estate in the relevant Land Registry. The Parties acknowledge that their signatures, or the signatures of the persons executing and concluding this Agreement for them or on their behalf, shall be notarized on the counterparts of this Agreement intended for the Parties and also on one (1) counterpart hereof that is intended for the Land Registry.

12.

The following schedules constitute an integral part of this Agreement:

 

Schedule No. 1 – Up-to-date extract from the Land Registry

 

Schedule No. 2 – Graphic delimitation of the Real Estate

 

Schedule No. 3 – Escrow Agreement

 

Schedule No. 4 – Declaration for the purposes of the Land Registry

 

Schedule No. 5 – List of leases

 

Schedule No. 6 – Up-to-date extract from the Commercial Register for the Buyer

 

Schedule No. 7 – List of easements agreed by the Parties

 

Schedule No. 8 - Specification of appurtenances

 

Schedule No. 9 – List of financial institutions pursuant to Art. XIV (8) hereof

 13.

The Parties declare that they have read the Agreement prior to its execution, that they conclude it seriously, definitely and comprehensibly, based on their free will and not under unfavorable terms and conditions. In witness thereof, they affix their signatures.