STOCK EXCHANGE AGREEMENT AND PLAN OF REORGANIZATION

STOCK EXCHANGE AGREEMENT AND PLAN OF REORGANIZATION

AMONG

ZULU ENERGY CORP.

NYATI MAURITIUS LIMITED

AND LMA HUGHES LLLP

STOCK EXCHANGE AGREEMENT AND PLAN OF REORGANIZATION

      STOCK EXCHANGE AGREEMENT AND PLAN OF REORGANIZATION, dated as of December 19, 2007 (the “Agreement”), among Zulu Energy Corp., a corporation existing under the laws of Colorado (the “Purchaser”), Nyati Mauritius Limited, a private company limited by shares organized under the laws of the Republic of Mauritius (the “Company”), and LMA Hughes LLLP, the sole shareholder of the Company (the “Seller”).

      WHEREAS, the Seller owns 100 shares of common stock, $1.00 par value of the Company (the “Shares”), which Shares constitute all of the issued and outstanding shares of capital stock of the Company; and

      WHEREAS, the Company is a holding company that owns all of the issued and outstanding shares of capital stock of Nyati Resources Limited, a company organized under the laws of the Republic of Mauritius (“Nyati Resources”), which owns 50 shares of common stock, BPULA 1.00 par value of Nyati Resources Botswana (Proprietary) Limited, a company limited by shares organized under the laws of the Republic of Botswana (“Nyati Botswana”), which represents 50% of Nyati Botswana’s outstanding shares. Nyati Resources and Nyati Botswana are collectively referred to as the “Subsidiaries” and each a “Subsidiary”). The Company through its Subsidiaries is engaged in the business of prospecting for and the exploration of coal bed methane and related activities in the Republic of Botswana including related activities (the “Business”).

      WHEREAS, the Seller desires to transfer to the Purchaser, and the Purchaser desires to acquire from the Seller, the Shares for the consideration and upon the terms and conditions hereinafter set forth in a transaction intended to qualify as a tax-deferred reorganization under Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended (the “Code,” and the transaction contemplated by this Agreement, the “Exchange”);

      NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements hereinafter contained, the parties hereby agree as follows:

      Upon the terms and subject to the conditions contained herein, on the Closing Date the Seller shall transfer and deliver the Shares as set forth opposite the Seller's name on Annex A hereto to the Purchaser in exchange for 30,000,000 shares of the Purchaser’s common stock to be issued at the Closing to the Seller (the “Exchange Consideration”).

      The transfer of the Shares shall be effected by the delivery to the Purchaser at the Closing of certificates representing the Shares duly endorsed in blank or accompanied by stock transfer powers and with all requisite stock transfer tax stamps attached.

      Subject to the satisfaction of the conditions set forth in Sections 7.1 and 7.2 hereof (or the waiver thereof by the party entitled to waive that condition), the closing of the sale and purchase of the Shares provided for in Section 1.1 hereof (the "Closing") shall take place at the offices of Sichenzia Ross Friedman Ference LLP located at 61 Broadway, New York, New York 10006 (or at such other place as the parties may designate in writing) on such date as the Seller and the Purchaser may designate. The date on which the Closing shall be held is referred to in this Agreement as the "Closing Date".

This Agreement may be terminated prior to the Closing as follows:

      (a) At the election of the Seller or the Purchaser on or after December 31, 2007, if the Closing shall not have occurred by the close of business on such date, provided that the terminating party is not in default of any of its obligations hereunder;

nonappealable order of a Governmental Body (as defined below) of competent jurisdiction restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated hereby; it being agreed that the parties hereto shall promptly appeal any adverse determination which is not nonappealable (and pursue such appeal with reasonable diligence).

      (i) For purposes of this Agreement, “Governmental Body” shall mean any agency, public or regulatory authority, department, commission, court, ministry, or board of government, whether foreign or domestic and whether national, federal, provincial, state, regional, local or municipal.

      In the event of termination and abandonment by the Purchaser or the Seller, or both, pursuant to Section 3.2 hereof, written notice thereof shall forthwith be given to the other party, and this Agreement shall terminate, and the purchase of the Shares hereunder shall be abandoned, without further action by the Purchaser or the Seller. If this Agreement is terminated as provided herein, each party shall redeliver all documents, work papers and other material of any other party relating to the transactions contemplated hereby, whether so obtained before or after the execution hereof, to the party furnishing the same.

      In the event that this Agreement is validly terminated as provided herein, then each of the parties shall be relieved of their duties and obligations arising under this Agreement after the date of such termination and such termination shall be without liability to the Purchaser, the Company or the Seller; provided, however, that nothing in this Section 3.4 shall relieve the Purchaser or the Seller of any liability for a breach of this Agreement.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE SELLER

The Seller hereby represents and warrants to the Purchaser that:

      4.1 Organization and Good Standing of the Company . The Company is a private company limited by shares duly organized, validly existing and in good standing under the laws of the Republic of Mauritius. Each Subsidiary is a company or a company limited by shares duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation set forth above. Neither the Company nor either Subsidiary is required to be qualified to transact business in any other jurisdiction where the failure to so qualify would have an adverse effect on the business of the Company or any Subsidiary.

      (a) The Company has full power and authority (corporate and otherwise) to carry on its business and has all permits and licenses that are necessary to the conduct of its business or to the ownership, lease or operation of its properties and assets.

      (b) The execution of this Agreement and the delivery hereof to the Purchaser and the sale and the transactions contemplated herein have been, or will be prior to Closing, duly authorized by the Company’s Board of Directors and by the Company’s stockholder having full power and authority to authorize such actions.

      (c) Subject to any consents required under Section 4.7 below, the Seller and the Company have the full legal right, power and authority to execute, deliver and carry out the terms and provisions of this Agreement. Seller has duly approved and authorized the execution and delivery of this Agreement and documents and instruments contemplated hereby and the consummation of the transactions contemplated hereby, and has duly authorized Brian Hughes to sign on its behalf, and no other proceedings, approvals or other action on the part of the Seller, the Company or any Subsidiary is necessary to approve and authorize the execution, delivery and performance by the Seller of this Agreement and the documents and instruments contemplated

hereby or the consummation of the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered on behalf of Seller and the Company and constitutes a valid and binding obligation of the Seller and the Company enforceable in accordance with its terms.

      (d) Neither the execution and delivery of this Agreement, the consummation of the transactions herein contemplated, nor compliance with the terms of this Agreement will violate, conflict with, result in a breach of, or constitute a default under (i) any Law (as defined below), indenture, mortgage, loan agreement, or other agreement or instrument to which the Company, the Subsidiaries or the Seller is a party or by which it or any of them is bound, (ii) any charter, regulation, bylaw, constitutional provision of the Company, or (iii) any decree, order, or rule of any court or Governmental Body or arbitrator that is binding on the Company or the Seller in any way.

      (i) For purposes of this Agreement, a “Law” or “Laws” shall mean, including those applicable of the United States of America, the Republic of Mauritius and the Republic of Botswana, any statute, common law, rule, ordinance, regulation, code, licensing requirement, order, judgment, injunction, decree, license, permit and bylaw of a Governmental Body.

      (a) The Company’s authorized capital stock consists of 50,000 shares of common stock, of which 100 shares have been issued to Seller, which constitutes the Shares as defined above. No other shares of capital stock have been issued by the Company. All of the Shares are duly authorized, validly issued, fully paid and non-assessable.

      (b) The Seller is the lawful record and beneficial owner of all the Shares, free and clear of any liens, pledges, encumbrances, charges, claims or restrictions of any kind, and has, or will have on the Closing Date, the absolute, unilateral right, power, authority and capacity to enter into and perform this Agreement, including the exchange of the Shares, without any other or further authorization, action or proceeding, except as specified herein.

      (c) There are no authorized or outstanding subscriptions, options, rights, warrants, calls, contracts, demands, commitments, shareholder agreements, convertible securities or other agreements or arrangements of any character or nature whatever under which the Seller or the Company are or may become obligated to issue, assign or transfer any shares of capital stock of the Company or any Subsidiary. Upon the delivery to Purchaser on the Closing Date of the certificate(s) representing the Shares, Purchaser will have good, legal, valid, marketable and indefeasible title to all the then issued and outstanding shares of capital stock of the Company, free and clear of any liens, pledges, encumbrances, charges, agreements, options, claims or other arrangements or restrictions of any kind.

      4.4 Basic Corporate Records . The copies of the Constitution of the Company and Nyati Resources (each certified as of the date of this Agreement as true, correct and complete by the Company’s secretary or assistant secretary) , have been delivered to the Purchaser, are true, correct and complete as of the date of this Agreement. The copy of the Memorandum and

Articles of Association of Nyati Botswana (certified as of the date of this Agreement as true, correct and complete by the Nyati Botswana’s secretary or assistant secretary), which has been delivered to the Purchaser, are true, correct and complete as of the date of this Agreement.

      4.5 Minute Books . The minute books of the Company and each Subsidiary, which shall be exhibited to the Purchaser between the date hereof and the Closing Date, each contain true, correct and complete minutes and records of all meetings, proceedings and other actions of the shareholders, Boards of Directors and committees of such Boards of Directors of each such corporation, if any, and, on the Closing Date, will contain true, correct and complete minutes and records of any meetings, proceedings and other actions of the shareholders, respective Boards of Directors and committees of such Boards of Directors of each such corporation.

      4.6 Subsidiaries and Affiliates . Except for its interests in Nyati Resources and as disclosed on Schedule 4.6, the Company has no ownership, voting or profit and loss sharing percentage interest in any businesses, entities, enterprises and organizations. Except for its interests in Nyati Botswana and as disclosed on Schedule 4.6, Nyati Resources has no ownership, voting or profit and loss sharing percentage interest in any businesses, entities, enterprises and organizations. Unless the context requires otherwise or specifically designated to the contrary on Section 4.6 hereto, “Company” as used in this Agreement shall include all such Subsidiaries. Except as set forth in Schedule 4.6 or 4.31, (i) neither the Company nor any Subsidiary has made any advances to, or investments in, nor owns beneficially or of record, any securities of or other interest in, any business, entity, enterprise or organization, (ii) there are no arrangements through which the Company or any Subsidiary has acquired from, or provided to, the Seller or its affiliates any goods, properties or services, (iii) there are no rights, privileges or advantages now enjoyed by the Company or any Subsidiary as a result of the ownership of the Company by the Seller which, to the knowledge of the Seller or the Company, might be lost as a result of the consummation of the transactions contemplated by this Agreement. Each entity shown on Schedule 4.6 is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, and has full corporate power to own all of its property and to carry on its business as it is now being conducted. Also set forth on Schedule 4.6 is a list of jurisdictions in which each Subsidiary is qualified as a foreign company. Such jurisdictions are the only jurisdictions in which the ownership or leasing of property by each Subsidiary or the conduct of its business requires it to be so qualified. All of the outstanding shares of capital stock of each Subsidiary have been duly authorized and validly issued, are fully paid and nonassessable, and, except as set forth on Schedule 4.6, are owned, of record and beneficially, by the Company, and on the Closing Date will be owned by the Company, free and clear of all liens, encumbrances, equities, options or claims whatsoever. No Subsidiary has outstanding any other equity securities or securities options, warrants or rights of any kind that are convertible into equity securities of such Subsidiary, except as set forth on Schedule 4.6.

      4.7 Consents . Except as set forth in Schedule 4.7, no consents or approvals of any public body or authority and no consents or waivers from other parties to leases, licenses, franchises, permits, indentures, agreements or other instruments are (i) required for the lawful consummation of the transactions contemplated hereby, or (ii) necessary in order that the Business can be conducted by the Purchaser in the same manner after the Closing as heretofore

conducted by the Company, nor will the consummation of the transactions contemplated hereby result in creating, accelerating or increasing any liability of the Company.

      4.8 Financial Statements . The Seller has delivered, or will deliver prior to Closing, to the Purchaser copies of the following financial statements (which include all notes and schedules attached thereto), all of which are true, complete and correct, have been prepared from the books and records of the Company in accordance with United States generally accepted accounting principles (“GAAP”) consistently applied with past practice and fairly present the financial condition, assets, liabilities and results of operations of the Company as of the dates thereof and for the periods covered thereby:

the audited balance sheet of the Company as at December 31, 2005 and 2006, and the related audited statements of operations, and of cash flows of the Company for the period then ended and (ii) the unaudited balance sheet of the Company as of September 30, 2007 and the related compiled statement of operations of the Company for the nine month period then ended (such statements, including the related notes and schedules thereto, are referred to herein as the “Financial Statements”).

      In such Financial Statements, the Statements of Operations do not contain any items of special or nonrecurring income or any other income not earned in the ordinary course of business except as set forth in Schedule 4.8, and the financial statements for the interim periods indicated include all adjustments, which consist of only normal recurring accruals, necessary for such fair presentation. There are no facts known to the Seller or the Company that, under GAAP consistently applied, would alter the information contained in the foregoing Financial Statements in any material way. Neither the Company nor any Subsidiary, or any director, officer, employee or agent of the Company or the Subsidiaries has received any written or oral complaint, allegation or claim that the Company or such Subsidiary has engage in questionable accounting or business practices.

      For the purposes hereof, the balance sheet of the Company as of September 30, 2007 is referred to as the “Balance Sheet” and September 30, 2007 is referred to as the “Balance Sheet Date”.

      4.9 Records and Books of Account . The records and books of account of the Company and of each Subsidiary reflect all material items of income and expense and all material assets, liabilities and accruals, and have been, and to the Closing Date will be, regularly kept and maintained in conformity with GAAP applied on a consistent basis with preceding years.

      4.10 Absence of Undisclosed Liabilities . Except as and to the extent reflected or reserved against in the Company’s Financial Statements or disclosed in Schedule 4.10, there are no liabilities or obligations of the Company of any kind whatsoever, whether accrued, fixed, absolute, contingent, determined or determinable, and including without limitation (i) liabilities to former, retired or active employees of the Company under any pension, health and welfare benefit plan, vacation plan or other plan of the Company, (ii) tax liabilities incurred in respect of or measured by income for any period prior to the close of business on the Balance Sheet Date,

or arising out of transactions entered into, or any state of facts existing, on or prior to said date, and (iii) contingent liabilities in the nature of an endorsement, guarantee, indemnity or warranty, and there is no condition, situation or circumstance existing or which has existed that could reasonably be expected to result in any liability of the Company, other than liabilities and contingent liabilities incurred in the ordinary course of business since the Balance Sheet Date consistent with the Company’s recent customary business practice, none of which is materially adverse to the Company.

      (a) For purposes of this Agreement, “Tax” or “Taxes” refers to: (i) any and all federal, state, local and foreign (including the Republic of Botswana and the Republic of Mauritius) taxes, assessments and other governmental charges, duties, impositions and liabilities relating to taxes, including taxes based upon or measured by gross receipts, income, profits, sales, use and occupation, and value added, ad valorem, transfer, franchise, withholding, payroll, recapture, employment, excise and property taxes and escheatment payments, together with all interest, penalties and additions imposed with respect to such amounts and any obligations under any agreements or arrangements with any other person with respect to such amounts and including any liability for taxes of a predecessor entity; (ii) any liability for the payment of any amounts of the type described in clause (i) as a result of being or ceasing to be a member of an affiliated, consolidated, combined or unitary group for any period (including, without limitation, any liability under Treas. Reg. Section 1.1502 -6 or any comparable provision of foreign, state or local law); and (iii) any liability for the payment of any amounts of the type described in clause (i) or (ii) as a result of any express or implied obligation to indemnify any other person or as a result of any obligations under any agreements or arrangements with any other person with respect to such amounts and including any liability for taxes of a predecessor entity.

      (b) (i) The Company has timely filed all federal, state, local and foreign returns, estimates, information statements and reports (“Returns”) relating to Taxes required to be filed by the Company with any Tax authority. All such Returns are true, correct and complete in all material respects. The Company has paid all Taxes shown to be due on such Returns. Except as listed on Schedule 4.11 hereto, the Company is not currently the beneficiary of any extensions of time within which to file any Returns. The Seller and the Company have furnished and made available to the Purchaser complete and accurate copies of all income and other Tax Returns and any amendments thereto filed by the Company in the last three (3) years.

      (ii) The Company, as of the Closing Date, will have withheld and accrued or paid to the proper authority all Taxes required to have been withheld and accrued or paid.

      (iii) The Company has not been delinquent in the payment of any Tax nor is there any Tax deficiency outstanding or assessed against the Company. The Company has not executed any unexpired waiver of any statute of limitations on or extending the period for the assessment or collection of any Tax.

      (iv) There is no dispute, claim, or proposed adjustment concerning any Tax liability of the Company either (A) claimed or raised by any Tax authority in

writing or (B) based upon personal contact with any agent of such Tax authority, and there is no claim for assessment, deficiency, or collection of Taxes, or proposed assessment, deficiency or collection from the Internal Revenue Service or any other Governmental Body against the Company which has not been satisfied. The Company is not a party to nor has it been notified in writing or otherwise that it is the subject of any pending, proposed, or threatened action, investigation, proceeding, audit, claim or assessment by or before the Internal Revenue Service or any other Governmental Body, nor does the Company have any reason to believe that any such notice will be received in the future. Neither the Internal Revenue Service nor any other Governmental Body, nor any state or local taxation authority has ever audited any income tax return of the Company. The Company has not filed any requests for rulings with the Internal Revenue Service nor any other Governmental Body. No power of attorney has been granted by the Company or its Affiliates with respect to any matter relating to Taxes of the Company. There are no Tax liens of any kind upon any property or assets of the Company, except for inchoate liens for Taxes not yet due and payable.

      (v) The Company has no liability for any unpaid Taxes which has not been paid or accrued for, or otherwise, or reserved on the Financial Statements in accordance with GAAP, as adjusted for the passage of time through the Closing Date in accordance with the Company’s past custom and practice, whether asserted or unasserted, contingent or otherwise.

      (vi) There is no contract, agreement, plan or arrangement to which the Company is a party as of the date of this Agreement, including but not limited to the provisions of this Agreement, covering any employee or former employee of the Company that, individually or collectively, would reasonably be expected to give rise to the payment of any amount that would not be deductible pursuant to Sections 280G, 404 or 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”) or any applicable provision under any Law. There is no contract, agreement, plan or arrangement to which the Company is a party or by which it is bound to compensate any individual for excise taxes paid pursuant to Section 4999 of the Code or any applicable provision under any Law.

      (vii) The Company has not filed any consent agreement under Section 341(f) of the Code or agreed to have Section 341(f)(2) of the Code apply to any disposition of a subsection (f) asset (as defined in Section 341(f)(4) of the Code) owned by the Company.

      (viii) The Company is not a party to, and has no obligation under, any tax-sharing, tax-indemnity or tax-allocation agreement or arrangement.

      (ix) None of the Company’s assets are tax-exempt-use property within the meaning of Section 168(h) of the Code.

      4.12 Accounts Receivable . Neither the Company nor any Subsidiary has any accounts receivable.

4.13 Inventory . Neither the Company nor any Subsidiary has any inventory.

      4.14 Machinery and Equipment . Except for items disposed of in the ordinary course of business, all machinery, tools, furniture, fixtures, equipment, vehicles, leasehold improvements and all other tangible personal property (hereinafter “Fixed Assets”) of the Company and the Subsidiaries currently being used in the conduct of the Business, or included in determining the net book value of the Company on the Balance Sheet Date, together with any machinery or equipment that is leased or operated by the Company or the Subsidiaries, are in fully serviceable working condition and repair. Said Fixed Assets shall be maintained in such condition from the date hereof through the Closing Date. Except as described on Schedule 4.14 hereto, all Fixed Assets owned, used or held by the Company are situated at its business premises and are currently used in its business. Schedule 4.14 describes all Fixed Assets owned by or an interest in which is claimed by any other person (whether a customer, supplier or other person) for which the Company is responsible (copies of all agreements relating thereto being attached to said Schedule 4.14), and all such property is in the Company’s actual possession and is in such condition that upon the return of such property in its present condition to its owner, the Company will not be liable in any amount to such owner. There are no outstanding requirements or recommendations by any insurance company that has issued a policy covering either (i) such Fixed Assets or (ii) any liabilities of the Company relating to operation of the Business, or by any board of fire underwriters or other body exercising similar functions, requiring or recommending any repairs or work to be done on any Fixed Assets or any changes in the operations of the Business, any equipment or machinery used therein, or any procedures relating to such operations, equipment or machinery. All Fixed Assets of the Company are set forth on Schedule 4.14 hereto.

      (a) Schedule 4.15(a) sets forth a complete list of (i) all real property and interests in real property owned in fee by the Company or any Subsidiary (individually, an "Owned Property" and collectively, the "Owned Properties"), and (ii) all real property and interests in real property leased by the Company or any Subsidiary (individually, a "Real Property Lease" and the real properties specified in such leases, together with the Owned Properties, being referred to herein individually as a "Company Property" and collectively as the "Company Properties") as lessee or lessor. The Company and the Subsidiaries, as the case may be, have good and marketable fee title to all Owned Properties, free and clear of all Liens of any nature whatsoever except (A) Liens set forth on Schedule 4.15(a) and (B) Permitted Exceptions. The Company Properties constitute all interests in real property currently used or currently held for use in connection with the Business and which are necessary for the continued operation of the Business as the Business is currently conducted. The Company has a valid and enforceable leasehold interest under each of the Real Property Leases, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors' rights and remedies generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity), and the Company has not received any written notice of any default or event that with notice or lapse of time, or both, would constitute a default by the Company under any of the Real Property Leases. All of the Company Property, buildings, fixtures and improvements thereon owned or leased by the Company are in good operating condition and repair (subject to normal wear and tear).

      (i) For purposes of this Agreement, “Lien” shall mean debts, liabilities, commitments, obligations, duties and responsibilities of any kind and description, whether absolute or contingent, monetary or non-monetary, direct or indirect, known or unknown or matured or unmatured, or of any other nature.

      (b) The Company and the Subsidiaries have all material certificates of occupancy and Permits of any Governmental Body necessary or useful for the current use and operation of each Company Property, and the Company has fully complied with all material conditions of the Permits applicable to it. No default or violation, or event that with the lapse of time or giving of notice or both would become a default or violation, has occurred in the due observance of any Permit.

      (c) There does not exist any actual or, to the best knowledge of the Company, the Subsidiaries or the Seller, threatened or contemplated condemnation or eminent domain proceedings that affect any Company Property or any part thereof, and the Company has not received any notice, oral or written, of the intention of any Governmental Body or other Person to take or use all or any part thereof.

      (d) Neither the Company nor the Seller has received any written notice from any insurance company that has issued a policy with respect to any Company Property requiring performance of any structural or other repairs or alterations to such Company Property.

      (e) The Company does not own or hold, and is not obligated under or a party to, any option, right of first refusal or other contractual right to purchase, acquire, sell, assign or dispose of any real estate or any portion thereof or interest therein.

      4.16 Leases . All leases of real and personal property of the Company and the Subsidiaries are described in Schedule 4.16, are in full force and effect and constitute legal, valid and binding obligations of the respective parties thereto enforceable in accordance with their terms, except as limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting generally the enforcement of creditor’s rights, and have not been assigned or encumbered. The Company has performed in all material respects the obligations required to be performed by it under all such leases to date and it is not in default in any material respect under any of said leases, except as set forth in Schedule 4.16, nor has it made any leasehold improvements required to be removed at the termination of any lease, except signs. No other party to any such lease is in material default thereunder. Except as noted on Schedule 4.16, none of the leases listed thereon require the consent of a third party in connection with the transfer of the Shares.

      4.17 Patents, Software, Trademarks, Etc . The Company owns, or possesses adequate licenses or other rights to use, all patents, software, trademarks, service marks, trade names, copyrights, proprietary information and trade secrets, if any, necessary to conduct the Business as now operated by it. The patents, software, trademarks, service marks, copyrights, trade names and trade secrets, if any, registered in the name of or owned or used by or licensed to the Company and applications for any thereof (hereinafter the “Intangibles”) are described or referenced in Schedule 4.17. The Seller hereby specifically acknowledges that all right, title and interest in and to all patents, software and proprietary information listed on Schedule 4.17 are owned by the Company or its Subsidiaries and that the ownership of such patents, software or proprietary information will be transferred as part of the Company to Purchaser as part of the transaction contemplated hereby. No officer, director, shareholder or employee of the Company or any relative or spouse of any such person owns any patents or patent applications or any inventions, software, secret formulae or processes, trade secrets or other similar rights, nor is any of them a party to any license agreement, used by or useful to the Company or related to the Business except as listed in Schedule 4.17. All of said Intangibles are valid and in good standing, are free and clear of all liens, security interests, charges, restrictions and encumbrances of any kind whatsoever, and have not been licensed to any third party except as described in Schedule 4.17. The Company has not been charged with, nor has it infringed, nor to the Seller’s knowledge is it threatened to be charged with infringement of, any patent, proprietary rights or trade secrets of others in the conduct of its business, and, to the date hereof, neither the Seller nor the Company has received any notice of conflict with or violation of the asserted rights in intangibles or trade secrets of others. The Company is not now manufacturing any goods under a present permit, franchise or license, except as set forth in said Schedule 4.17. The consummation of the transactions contemplated hereby will not alter or impair any rights of the Company in any such Intangibles or in any such permit, franchise or license, except as described in Schedule 4.17. The Intangibles and the Company’s tooling, manufacturing and engineering drawings, process sheets, specifications, bills of material and other like information and data are in such form and of such quality and will be maintained in such a manner that the Company can, following the Closing, design, produce, manufacture, assemble and sell the products and provide the services heretofore provided by it so that such products and services meet applicable

specifications and conform with the standards of quality and cost of production standards heretofore met by it. The Company has the sole and exclusive right to use its corporate and trade names in the jurisdictions where it transacts business.

      4.18 Insurance Policies . There is set forth in Schedule 4.18 a list and brief description of all insurance policies on the date hereof held by the Company or on which it pays premiums, including, without limitation, life insurance and title insurance policies, which description includes the premiums payable by it thereunder. Schedule 4.18 also sets forth, in the case of any life insurance policy held by the Company, the name of the insured under such policy, the cash surrender value thereof and any loans thereunder. All such insurance premiums in respect of such coverage have been, and to the Closing Date will be, paid in full, or if not due, properly accrued on the Balance Sheet. All claims, if any, made against the Company which are covered by such policies have been, or are being, settled or defended by the insurance companies that have issued such policies. Up to the Closing Date, such insurance coverage will be maintained in full force and effect and will not be cancelled, modified or changed without the express written consent of the Purchaser, except to the extent the maturity dates of any such insurance policies expiring prior to the Closing Date. No such policy has been, or to the Closing Date will be, cancelled by the issuer thereof, and, to the knowledge of the Seller and the Company, between the date hereof and the Closing Date, there shall be no increase in the premiums with respect to any such insurance policy caused by any action or omission of the Seller or of the Company.

      4.19 Banking and Personnel Lists . The Seller and the Company will deliver to the Purchaser prior to the Closing Date the following accurate lists and summary descriptions relating to the Company:

(i) The name of each bank in which the Company has an account or safe deposit box and the names of all persons authorized to draw thereon or have access thereto.

(ii) The names, current annual salary rates and total compensation for the preceding fiscal year of all of the present directors and officers of the Company, and any other employees whose current base accrual salary or annualized hourly rate equivalent is $20,000 or more, together with a summary of the bonuses, percentage compensation and other like benefits, if any, paid or payable to such persons for the last full fiscal year completed, together with a schedule of changes since that date, if any.

(iii) A schedule of workers’ compensation payments of the Company over the past five full fiscal years and the fiscal year to date, a schedule of claims by employees of the Company against the workers’ compensation fund for any reason over such period, identification of all compensation and medical benefits paid to date on each such claim and the estimated amount of compensation and medical benefits to be paid in the future on each such claim.

(iv) The name of all pensioned employees of the Company whose pensions are unfunded and are not paid or payable pursuant to any formalized pension arrangements, their agent and annual unfunded pension rates.

      4.20 Lists of Contracts, Etc . There is included in Schedule 4.20 a list of the following items (whether written or oral) relating to the Company and the Subsidiaries, which list identifies and fairly summarizes each item:

(i) All collective bargaining and other labor union agreements (if any); all employment agreements with any officer, director, employee or consultant; and all employee pension, health and welfare benefit plans, group insurance, bonus, profit sharing, severance, vacation, hospitalization, and retirement plans, post-retirement medical benefit plans, and any other plans, arrangements or custom requiring payments or benefits to current or retiring employees.

(ii) All joint venture contracts and joint operating agreements of the Company or the Subsidiaries or affiliates relating to the Business;

(iii) All contracts of the Company and the Subsidiaries relating to (a) obligations for borrowed money, (b) obligations evidenced by bonds, debentures, notes or other similar instruments, (c) obligations to pay the deferred purchase price of property or services, except trade accounts payable arising in the ordinary course of business, (d) obligations under capital leases, (e) debt of others secured by a lien on any asset of the Company of a Subsidiary, and (f) debts of others guaranteed by the Company or any Subsidiary.

(iv) All agreements of the Company or any Subsidiary relating to the supply of raw materials for and the distribution of the products of the Business, including without limitation all sales agreements, manufacturer’s representative agreements and distribution agreements of whatever magnitude and nature, and any commitments therefor;

(v) All contracts that individually provide for aggregate future payments to or from the Company or any Subsidiary of $25,000 or more, to the extent not included in (i) through (iv) above;

(vi) All contracts of the Company or any Subsidiary that have a term exceeding one year and that may not be cancelled without any liability, penalty or premium, to the extent not included in (i) through (v) above;

(vii) A complete list of all outstanding powers of attorney granted by the Company or any Subsidiary; and

(viii) All other contracts of the Company or any Subsidiary material to the business, assets, liabilities, financial condition, results of operations or prospects of the Business taken as a whole to the extent not included above, including but not limited to contracts for the licensing and ownership of geological and geophysical data (raw data and interpretations thereon).

Except as set forth in Schedule 4.20, (i) all contracts, agreements and commitments of the Company or any Subsidiary set forth in Schedule 4.20 are valid, binding and

in full force and effect, and (ii) neither the Company nor any Subsidiary nor any other party to any such contract, agreement, or commitment has materially breached any provision thereof or is in default thereunder. Except as set forth in Schedule 4.20, the sale of the Shares by the Seller in accordance with this Agreement will not result in the termination or provide any party to such contract the opportunity to terminate of any contract, agreement or commitment of the Company or any Subsidiary set forth in Schedule 4.20, and immediately after the Closing, each such contract, agreement or commitment will continue in full force and effect without the imposition or acceleration of any burdensome condition or other obligation on the Company resulting from the sale of the Shares by the Seller. True and complete copies of the contracts, leases, licenses and other documents referred to in this Section 4.20 will be delivered to the Purchaser, certified by the Secretary or Assistant Secretary of the Company as true, correct and complete copies, not later than four weeks from the date hereof or ten business days before the Closing Date, whichever is sooner.

There are no pending disputes with customers or vendors of the Company regarding quality or return of goods involving amounts in dispute with any one customer or vendor, whether for related or unrelated claims, in excess of $5,000 except as described on Schedule 4.20 hereto, all of which will be resolved to the reasonable satisfaction of Purchaser prior to the Closing Date. To the knowledge of Seller and the Company, there has not been any event, happening, threat or fact that would lead them to believe that any of said customers or vendors will terminate or materially alter their business relationship with the Company after completion of the transactions contemplated by this Agreement.

      4.21 Compliance With the Law . Neither the Company nor any Subsidiary is in violation of any applicable federal, state, local or foreign Law, regulation or order or any other, decree or requirement of any governmental, regulatory or administrative agency or authority or court or other tribunal (including, but not limited to, any law, regulation order or requirement relating to securities, properties, business, products, manufacturing processes, advertising, sales or employment practices, terms and conditions of employment, occupational safety, health and welfare, conditions of occupied premises, product safety and liability, civil rights, or environmental protection, including, but not limited to, those related to waste management, air pollution control, waste water treatment or noise abatement). Except as set forth in Schedule 4.21, neither the Company nor any Subsidiary has been and is now charged with, or to the knowledge of the Seller or the Company or any Subsidiary under investigation with respect to, any violation of any applicable law, regulation, order or requirement relating to any of the foregoing, nor, to the knowledge of the Seller or the Company or any Subsidiary after due inquiry, are there any circumstances that would or might give rise to any such violation. The Company and any applicable Subsidiary has filed all reports required to be filed with any governmental, regulatory or administrative agency or authority.

      4.22 Litigation; Pending Labor Disputes . Except as specifically identified on the Balance Sheet or footnotes thereto or set forth in Schedule 4.22:

(i) There are no Legal Proceedings (as defined below) or other proceedings or governmental investigations pending or, to the knowledge of the Seller or the Company or any Subsidiary, threatened, against the Seller or the Company or any Subsidiary, relating to the Business or the Company or the Subsidiaries or their properties (including leased

property), or the transactions contemplated by this Agreement, nor is there any basis known to the Company or the Subsidiaries or the Seller for any such action.

(ii) There are no judgments, decrees or orders of any court, or any governmental department, commission, board, agency or instrumentality binding upon the Seller or the Company or any Subsidiary relating to the Business or the Company or any Subsidiary the effect of which is to prohibit any business practice or the acquisition of any property or the conduct of any business by the Company or any Subsidiary or which limit or control or otherwise adversely affect its method or manner of doing business.

(iii) No work stoppage has occurred and is continuing or, to the knowledge of the Seller or the Company or the Subsidiaries, is threatened affecting the Business, and no representation question involving recognition of a collective bargaining agent exists in respect of any employees of the Company.

(iv) There are no pending labor negotiations or union organization e