Exhibit 10.2

 

 

 

LOAN AND SECURITY AGREEMENT

 

dated as of December 2, 2014

 

among

 

TITAN ENERGY WORLWIDE, INC.,

as Borrower,

 

CERTAIN SUBSIDIARIES OF TITAN ENERGY WORLDWIDE, INC.,

as Guarantors,

 

and

 

PTES ACQUISITION CORP.,
as Lender

 

 

 

 

 

 

TABLE OF CONTENTS

 

      Page         Article I. DEFINITIONS AND ACCOUNTING TERMS 1         Section
1.01   Certain Defined Terms 1 Section 1.02   Times of Day 6 Section 1.03  
Principles of Construction 6         Article II. AMOUNTS AND TERMS OF THE
ADVANCES 7         Section 2.01   The Loan 7 Section 2.02   Repayment of Loan. 7
Section 2.03   Interest. 7 Section 2.04   Reserved. 7 Section 2.05   Maximum
Interest. 7 Section 2.06   Prepayments of Loan. 7 Section 2.07   Reserved 8
Section 2.08   Increased Costs. 8 Section 2.09   Taxes. 8 Section 2.10  
Illegality 8 Section 2.11   Compensation for Losses 8 Section 2.12   Evidence of
Debt. 9 Section 2.13   Payments and Computations. 9         Article III.
CONDITIONS OF LENDING 9         Section 3.01   Conditions Precedent 9        
Article IV. REPRESENTATIONS AND WARRANTIES 10         Section 4.01  
Representations and Warranties 10         Article V. COVENANTS OF BORROWER 11  
      Section 5.01   Affirmative Covenants 11 Section 5.02   Negative Covenants
13         Article VI. SECURITY INTEREST AND CONTROL 14         Section 6.01  
Granting of Security Interest 14 Section 6.02   Proceeds 14 Section 6.03  
Authorization to File Financing Statements. 15         Article VII. EVENTS OF
DEFAULT 15         Section 7.01   Events of Default 15 Section 7.02   Voting;
Power of Attorney. 17 Section 7.03   Rights and Remedies; Blocker Sale. 17

 

 

 

 

Article VIII. CONTINUING GUARANTY 19         Section 8.01   Guaranty 19 Section
8.02   Rights of Lenders 19 Section 8.03   Certain Waivers 19 Section 8.04  
Obligations Independent 19 Section 8.05   Subrogation 20 Section 8.06  
Termination; Reinstatement 20 Section 8.07   Subordination 20 Section 8.08  
Stay of Acceleration 20         Article IX. MISCELLANEOUS 20         Section
9.01   Amendments, Etc. 20 Section 9.02   Notices; Effectiveness; Electronic
Communications. 20 Section 9.03   Reserved 21 Section 9.04   No Waiver. 21
Section 9.05   Costs and Expenses; Indemnification; Damage Waiver. 21 Section
9.06   Payments Set Aside 22 Section 9.07   Assignments and Participations. 22
Section 9.08   Governing Law; Submission to Jurisdiction. 23 Section 9.09  
Severability 24 Section 9.10   Counterparts; Integration; Effectiveness;
Electronic Execution. 24 Section 9.11   Confidentiality 24 Section 9.12   No
Advisory or Fiduciary Relationship 24 Section 9.13   Right of Setoff. 25 Section
9.14   Judgment Currency 25 Section 9.15   USA PATRIOT Act Notice 25 Section
9.16   Entire Agreement 25

 

 

 

 

LOAN AND SECURITY AGREEMENT

 

This LOAN AND SECURITY AGREEMENT dated as of December 2, 2014, among TITAN
ENERGY WORLDWIDE, INC., a Nevada corporation (“Borrower”), Guarantors (as
defined below), and PTES ACQUISITION CORP., a Delaware corporation (“Lender”).

 

RECITALS

 

A.           Borrower has requested Lender to make available to Borrower term
loans in an aggregate principal amount of at least Two Million Nine Hundred
Thousand Dollars ($2,900,000); and

 

B.           Lender is willing to make these term loans on the terms and
conditions set forth in this Agreement.

 

Article I.
DEFINITIONS AND ACCOUNTING TERMS

 

Section 1.01         Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:

 

“Act” has the meaning specified in Section 9.15.

 

“Additional Term Loan” means any additional term loans made pursuant to Section
2.01 after the Closing Date.

 

“Affiliate” means, with respect to any Person, any other Person that directly,
or indirectly through one or more intermediaries, “controls” or is “controlled
by” or is “under common control with” the Person specified.

 

“Agreement” means this Loan and Security Agreement.

 

“Applicable Rate” means the rate equal to ten percent (10%) per annum.

 

“Bankruptcy Code” means the Federal Bankruptcy Code of 1978, Title 11 of the
United States Code, as amended from time to time.

 

“Benefit Plan” means (a) an “employee benefit plan” within the meaning of
Section 3(3) of ERISA, (b) a “Plan” within the meaning of Section 4975(e)(1) of
the Code, or (c) an entity the underlying assets of which include assets of
employee benefit plans or plans as a result of investments by such plans in the
entity pursuant to Department of Labor Regulation Section 2510.3-101.

 

“Borrower” has the meaning specified in the preamble hereto.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in New York City, New York.

 

“Cash” means all cash in Dollars at any time and from time to time deposited in
the Collateral Account to the extent that is not subject to any Liens other than
Liens permitted in Section 5.02(b).

 

 

 

 

“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any Law, rule, regulation
or treaty; (b) any change in any Law, rule, regulation or treaty or in the
administration, interpretation, implementation or application thereof by any
Governmental Authority; or (c) the making or issuance of any request, rule,
guideline or directive (whether or not having the force of law) by any
Governmental Authority; provided that notwithstanding anything herein to the
contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and
all requests, rules, guidelines or directives thereunder or issued in connection
therewith shall be deemed to be a “Change in Law”, regardless of the date
enacted, adopted or issued, and (ii) all requests, rules, guidelines or
directives promulgated by the Bank of International Settlements, the Basel
Committee on Banking Supervision (or any successor or similar authority) or the
United States regulatory authorities, in each case pursuant to Basel III, shall
in each case be deemed to be a “Change in Law”, regardless of the date enacted,
adopted or issued.

 

“Change of Control” means any reorganization, recapitalization, consolidation or
merger (or similar transaction or series of related transactions) of Borrower or
any Subsidiary, sale or exchange of outstanding shares (or similar transaction
or series of related transactions) of Borrower or any Subsidiary in which the
holders of Borrower or Subsidiary’s outstanding shares immediately before
consummation of such transaction or series of related transactions do not,
immediately after consummation of such transaction or series of related
transactions, retain shares representing more than fifty percent (50%) of the
voting power of the surviving entity of such transaction or series of related
transactions (or the parent of such surviving entity if such surviving entity is
wholly owned by such parent), in each case without regard to whether Borrower or
Subsidiary is the surviving entity.

 

“Closing Date” means the earliest date on which the conditions precedent set
forth in Section 3.01 shall have been satisfied or waived in accordance with
Section 9.01 of this Agreement.

 

“Code” means the U.S. Internal Revenue Code of 1986.

 

“Collateral” has the meaning specified in Section 6.01.

 

“Collateral Account” means that certain deposit account of Borrower established
and maintained by Wells Fargo Bank, N.A., including any subaccount, substitute,
successor or replacement account.

 

“Debt” means, as to any Person at a particular time, without duplication, all of
the following, whether or not included as indebtedness or liabilities in
accordance with GAAP, (a) all obligations of such Person for borrowed money;
(b) all direct or contingent obligations of such Person arising under letters of
credit, bankers’ acceptances, bank guaranties, surety bonds and similar
instruments; (c) net obligations of such Person under any Swap Contract; (d) all
obligations of such Person to pay the deferred purchase price of property or
services (other than trade accounts payable in the ordinary course of business
and not past due); (e) indebtedness secured by a Lien on property owned by such
Person (including conditional sales or other title retention agreements),
whether or not such indebtedness shall have been assumed by such Person or is
limited in recourse; (f) capital leases and synthetic lease obligations; (g) all
obligations of such Person to purchase, redeem, retire, defease or otherwise
make any payment in respect of any equity interest in such Person or any other
Person; and (h) all Guarantees of such Person in respect of any of the
foregoing.

 

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all
other liquidation, bankruptcy, moratorium, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions.

 

“Default” means any event or condition that, with the giving of any notice, the
passage of time, or both, would be an Event of Default.

 

2

 

 

“Designated Jurisdiction” means any country or territory to the extent that such
country or territory itself is the subject of any Sanction.

 

“Dollars” and “$” mean the lawful money of the United States.

 

“ERISA” means the Employee Retirement Income Security Act of 1974.

 

“Events of Default” has the meaning specified in Section 7.01.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Facility Documents” means, collectively, this Agreement and each other
agreement or instrument executed or delivered in connection herewith or
therewith.

 

“FRB” means the Board of Governors of the Federal Reserve System of the United
States.

 

“Governmental Authority” means the government of the United States of America or
any other nation, or of any political subdivision thereof, including any
supra-national bodies such as the European Union or the European Central Bank.

 

“Grove” means Grove Power, Inc., a Florida corporation.

 

“Guarantee” means, as to any Person, (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Debt or other obligation payable or performable by another
Person (the “primary obligor”) in any manner, whether directly or indirectly, or
(b) any Lien on any assets of such Person securing any Debt or other obligation
of any other Person, whether or not such Debt or other obligation is assumed by
such Person (or any right, contingent or otherwise, of any holder of such Debt
to obtain any such Lien).

 

“Guarantors” means, collectively, TESN, Stellar and Grove; and “Guarantor”
means, any one of them.

 

“Guaranty” means, collectively, the Guaranty made by Guarantors under Article
VIII in favor of the Lender.

 

“Indemnitee” has the meaning specified in Section 9.05(b).

 

“Information” has the meaning specified in Section 9.11.

 

“Interest Payment Date” means the first Business Day of each calendar quarter,
commencing on the first such date to occur after the Closing Date, and the
Maturity Date.

 

“Investment” means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of equity interests of another Person, (b) a loan, advance or
capital contribution to, guarantee or assumption of debt of, or purchase or
other acquisition of any other debt or interest in, another Person, or (c) the
purchase or other acquisition (in one transaction or a series of transactions)
of assets of another Person that constitute a business unit or all or a
substantial part of the business of, such Person. For purposes of covenant
compliance, the amount of any Investment shall be the amount actually invested,
without adjustment for subsequent increases or decreases in the value of such
Investment.

 

“Judgment Currency” has the meaning specified in Section 9.14.

 

3

 

 

“Law” means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.

 

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).

 

“Loans” has the meaning specified in Section 2.01; and “Loan” means, any one of
the Loans.

 

“Loan Parties” means, collectively, Borrower and each Guarantor; and “Loan
Party” means any one of them.

 

“Margin Stock” means margin stock within the meaning of Regulation U.

 

“Material Adverse Effect” means (a) a material impairment of the ability of any
Loan Party to perform any of its obligations under any of the Facility
Documents, (b) a material adverse effect upon the legality, validity, binding
effect or enforceability of any provision of any Facility Document, (c) a
material adverse change in, or a material adverse effect upon, the business,
properties, liabilities (actual or contingent), or condition (financial or
otherwise) of any Loan Party or (d) a material adverse change in, a material
adverse effect upon, or a material impairment of, (i) the priority of Lender’s
security interest in the Collateral or (ii) the rights, remedies and benefits
available to, or conferred upon, Lender under any Facility Document or Lender’s
ability to foreclose on the Collateral at the times and in the manner
contemplated herein, in each case with respect to the foregoing clauses (a) to
(d), as determined by Lender in its sole discretion.

 

“Maturity Date” means, the earlier of: (a) the Stated Maturity Date; and (b) the
date on which the Loan is accelerated pursuant to Section 7.01.

 

“Maximum Lawful Rate” has the meaning specified in Section 2.05.

 

“Obligations” means the Loan to, and all debts, liabilities, obligations,
covenants, indemnifications, and duties of, Borrower and each Loan Party arising
at any time and from time to time, whether matured or unmatured, fixed or
contingent, liquidated or unliquidated, under any Facility Document, in each
case whether direct or indirect (including those acquired by assumption),
absolute or contingent, due or to become due, now existing or hereafter arising
and including interest and fees that accrue after the commencement by or against
Borrower or any Loan Party of any proceeding under any Debtor Relief Laws naming
Borrower or any Loan Party as the debtor in such proceeding, regardless of
whether such interest and fees are allowed claims in such proceeding.

 

“Organization Documents” means, as applicable, for any Person, such Person’s
articles or certificate of incorporation, by-laws, memorandum and articles of
association, partnership agreement, trust agreement, certificate of limited
partnership, articles of organization, certificate of formation, shareholder
agreement, voting trust agreement, operating agreement, subscription agreement,
side letters, if any, limited liability company agreement and/or analogous
documents.

 

4

 

 

“Permitted Liens” means Liens permitted under Section 5.02(b).

 

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

 

“Regulation T” means Regulation T issued by the FRB.

 

“Regulation U” means Regulation U issued by the FRB.

 

“Regulation X” means Regulation X issued by the FRB.

 

“Regulatory Event” means (a) any investigation made by any Governmental
Authority for violation or breach of Law by any Loan Party, provided that such
investigation is both (i) specific to such Loan Party, and (ii) for the material
violation or breach of any Law relating to any anti-fraud provisions or any
fiduciary duty provisions of any state or Federal securities laws in the United
States by such Loan Party, or (b) the revocation, suspension or termination of
any license, permit or approval held by any Loan Party that, in the reasonable
judgment of Lender, is necessary for the conduct of any such Person’s business.

 

“Related Parties” means, with respect to any Person, such Person’s Affiliates
and the partners, directors, officers, employees, agents, trustees and advisors
of such Person and of such Person’s Affiliates.

 

“Responsible Officer” of a Person means its chief executive officer or its chief
financial officer (whether or not the Person performing such duties is so
designated) or any authorized designee thereof.

 

“Sanction(s)” means any international economic sanction administered or enforced
by the United States government (including OFAC), the United Nations Security
Council, the European Union, Her Majesty’s Treasury or other relevant sanctions
authority.

 

“Securities Act” means the United States Securities Act of 1933, as amended.

 

“Set-off Party” has the meaning specified in Section 9.13.

 

“Stated Maturity Date” means December 2, 2019.

 

“Stellar” means Stellar Energy Services, Inc., a Minnesota corporation.

 

“Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
“Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of
Borrower.

 

5

 

 

“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, total return swaps, forward rate transactions,
commodity swaps, commodity options, forward commodity contracts, equity or
equity index swaps or options, bond or bond price or bond index swaps or options
or forward bond or forward bond price or forward bond index transactions,
interest rate options, forward foreign exchange transactions, cap transactions,
floor transactions, collar transactions, currency swap transactions,
cross-currency rate swap transactions, currency options, spot contracts, or any
other similar transactions or any combination of any of the foregoing (including
any options to enter into any of the foregoing), whether or not any such
transaction is governed by or subject to any master agreement, and (b) any and
all transactions of any kind, and the related confirmations, which are subject
to the terms and conditions of, or governed by, any form of master agreement
published by the International Swaps and Derivatives Association, Inc., any
International Foreign Exchange Master Agreement, or any other master agreement
(any such master agreement, together with any related schedules, a “Master
Agreement”), including any such obligations or liabilities under any Master
Agreement.

 

“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges
imposed by any Governmental Authority, including any interest, additions to tax
or penalties applicable thereto.

 

“TESN” means Titan Energy Systems Northeast, Inc., a Minnesota corporation.

 

“UCC” means Uniform Commercial Code in effect in the State of New York and any
other applicable jurisdiction.

 

Section 1.02         Times of Day. Unless otherwise specified, all references
herein to times of day shall be references to New York time (daylight or
standard, as applicable).

 

Section 1.03         Principles of Construction.

 

(a)          The definitions of terms herein shall apply equally to the singular
and plural forms of the terms defined. The words “include,” “includes” and
“including” shall be deemed to be followed by the phrase “without limitation.”
Unless the context requires otherwise, (i) any definition of or reference to any
agreement, instrument or other document (including any Organization Document)
shall be construed as referring to such agreement, instrument or other document
as from time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein
or in any other Facility Document), (ii) except to the extent Lender’s consent
is required as provided herein, any reference herein to any Person shall be
construed to include such Person’s successors and assigns, (iii) the words
“herein,” “hereof” and “hereunder,” and words of similar import when used in any
Facility Document, shall be construed to refer to such Facility Document in its
entirety and not to any particular provision thereof, (iv) all references in a
Facility Document to Articles, Sections, Preliminary Statements, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and
Preliminary Statements, Exhibits and Schedules to, the Facility Document in
which such references appear, and (v) any reference to any law shall include all
statutory and regulatory provisions consolidating, amending, replacing or
interpreting such law and any reference to any law or regulation shall, unless
otherwise specified, refer to such law or regulation as amended, modified or
supplemented from time to time.

 

(b)          In the computation of periods of time from a specified date to a
later specified date, the word “from” means “from and including;” the words “to”
and “until” each mean “to but excluding;” and the word “through” means “to and
including.”

 

(c)          Section headings herein and in the other Facility Documents are
included for convenience of reference only and shall not affect the
interpretation of this Agreement or any other Facility Document.

 

6

 

 

(d)          When used herein the terms Accessions, Account, Certificated
Securities, Chattel Paper, Commercial Tort Claim, Commodity Account, Commodity
Contract, Deposit Account, Document, Electronic Chattel Paper, Equipment, Goods,
Instrument, Inventory, Investment Property, Letter-of-Credit Rights, Payment
Intangible, Proceeds, Promissory Notes, Securities Account, Security
Entitlement, Supporting Obligations and Uncertificated Securities have the
meaning provided in Article 8 or Article 9, as applicable, of the UCC. Letter of
Credit has the meaning provided in Section 5-102 of the UCC.

 

Article II.
AMOUNTS AND TERMS OF THE ADVANCES

 

Section 2.01         The Loan. Subject to the terms and conditions set forth
herein, Lender agrees to make a single loan in Dollars to Borrower on the
Closing Date in an amount not to exceed $2,900,000 (the “Closing Date Loan”).
After the Closing Date, Lender may, in its sole and absolute discretion, make
additional term loans to Borrower (each, an “Additional Term Loan” and, together
with the Closing Date Loan, the “Loans”). Amounts borrowed hereunder and repaid
or prepaid may not be reborrowed.

 

Section 2.02         Repayment of Loan. Borrower shall repay to Lender on the
Maturity Date the principal amount of the Loans outstanding on such date.

 

Section 2.03         Interest.

 

(a)          Ordinary Interest. Borrower shall pay interest on the unpaid
principal amount of each Loan, from the date of such Loan until such principal
amount shall be paid in full, at a rate per annum equal to the Applicable Rate,
payable quarterly in arrears on each Interest Payment Date. Interest shall be
computed on a year of 360 days and actual days elapsed in the period for which
interest is payable. Interest (including the default interest set forth below)
shall be due and payable before and after judgment or the commencement of any
proceeding under any Debtor Relief Law.

 

(b)          Default Interest. If any Event of Default shall have occurred,
Borrower shall pay interest on the Loan at a rate per annum equal at all times
to sixteen percent (16%), payable on demand (and in any event in arrears on the
date such amount shall be paid in full).

 

Section 2.04         Reserved.

 

Section 2.05         Maximum Interest. In no event shall the interest charged
with respect to the Loan or any other obligations of Borrower hereunder exceed
the maximum amount permitted under the Laws of the State of New York or of any
other applicable jurisdiction. In no event shall the total interest received by
Lender exceed the amount which Lender could lawfully have received had the
interest been calculated for the full term hereof at the highest rate of
interest permitted under any applicable Law to be charged by Lender (the
“Maximum Lawful Rate”). If Lender has received interest hereunder in excess of
the Maximum Lawful Rate, such excess amount shall be applied to the reduction of
the principal balance of the Loan or to other amounts (other than interest)
payable hereunder, and if no such principal or other amounts are then
outstanding, such excess or part thereof remaining shall be paid to Borrower.

 

Section 2.06         Prepayments of Loan. Borrower may, upon two (2) Business
Days’ notice to Lender, which shall be irrevocable, at any time prepay the
outstanding principal amounts of the Loans, in whole or in part.

 

7

 

 

Section 2.07         Reserved.

 

Section 2.08         Increased Costs.

 

(a)          Increased Costs Generally. If any Change in Law shall have the
effect to increase the cost of the Loan to Lender, or to reduce the amount of
any sum received or receivable by Lender hereunder (whether of principal,
interest or any other amount), or to reduce the rate of return on Lender’s
capital or on the capital of Lender’s holding company, if any, as a consequence
of this Agreement, then upon request of Lender, Borrower will pay, within 10
days of such request, to Lender such additional amount or amounts as will
compensate Lender for such additional costs incurred or reduction suffered.

 

(b)          Survival. All of Borrower’s obligations under this Section 2.08
shall survive termination of this Agreement and repayment of all other
Obligations hereunder.

 

Section 2.09         Taxes.

 

(a)          Payments Free of Taxes. Any and all payments by or on account of
any obligation of any Loan Party under any Facility Document shall be made
without deduction or withholding for any Taxes, except as required by applicable
Law. If any applicable Law (as determined in the good faith discretion of
Lender) requires the deduction or withholding of any Tax from any such payment
by Lender or any Loan Party, the sum payable by the applicable Loan Party shall
be increased as necessary so that after any required withholding or the making
of all required deductions (including withholdings or deductions applicable to
additional sums payable under this Section 2.09) Lender receives an amount equal
to the sum it would have received had no such withholding or deduction been
made.

 

(b)          Survival. Borrower’s obligations under this Section 2.09 shall
survive any assignment of rights by Lender and the repayment of all other
Obligations.

 

Section 2.10         Illegality. Notwithstanding any other provision herein, if
Lender shall notify Borrower that any Law makes it unlawful for Lender to
perform its obligations to make or maintain the Loans hereunder, then the
obligation of Lender to make or maintain the Loan shall be terminated
immediately and the Loans, all interest thereon and all other amounts payable
hereunder shall become immediately due and payable.

 

Section 2.11         Compensation for Losses. Upon demand of Lender from time to
time, Borrower shall promptly compensate Lender for and hold Lender harmless
from any loss, cost or expense incurred by it as a result of any failure by
Borrower to prepay or borrow the Loan on the date or in the amount notified by
Borrower (for a reason other than the failure of Lender to make the Loan in
breach of its obligation hereunder), including any loss of anticipated profits
and any loss or expense arising from the liquidation or reemployment of funds
obtained by it to maintain the Loans or from fees payable to terminate the
deposits from which such funds were obtained. All of Borrower’s obligations
under this Section 2.11 shall survive termination of this Agreement and
repayment of all other Obligations hereunder. For purposes of calculating
amounts payable by Borrower to Lender under this Section 2.11, Lender shall be
deemed to have funded the Loan by a matching deposit or other borrowing in the
London interbank eurodollar market for a comparable amount and for a comparable
period, whether or not the Loan were in fact so funded.

 

8

 

 

Section 2.12         Evidence of Debt.

 

(a)          The Lender is authorized to record on the grid attached hereto as
Exhibit A each Loan made to the Borrower and each payment or prepayment thereof.
The entries made by Lender shall be prima facie evidence of the existence and
amounts of the obligations of the Borrower therein recorded; provided, however,
that the failure of Lender to record such payments or prepayments, or any
inaccuracy therein, shall not in any manner affect the obligation of Borrower to
repay (with applicable interest) the Loans in accordance with their terms.

 

(b)          No promissory note shall be required to evidence the Loans. Upon
the request of Lender, Borrower shall execute and deliver to Lender a promissory
note, which shall evidence the Loan in addition to such records.

 

Section 2.13         Payments and Computations.

 

(a)          All payments to be made by Borrower shall be made without condition
or deduction for any counterclaim, defense, recoupment or setoff. Borrower shall
make each payment hereunder not later than 12:00 noon on the day when due in
Dollars to Lender in immediately available funds. All payments received by
Lender after 12:00 noon shall be deemed received on the next succeeding Business
Day and any applicable interest or fee shall continue to accrue.

 

(b)          Whenever any payment hereunder would be due on a day other than a
Business Day, such payment shall be extended to the next succeeding Business
Day, and such extension of time shall in such case be included in the
computation of payment of interest or any fees, as the case may be.

 

(c)          All payments (including prepayments and any other amounts received
hereunder and payments and amounts received in connection with the exercise of
Lender’s rights after an Event of Default) made by or on behalf of Borrower
under any Facility Document shall be applied in the following order: (i) to any
expenses and indemnities payable by Borrower to Lender; (ii) to any accrued and
unpaid interest and fees due; (iii) to principal payments on the outstanding
Loan; and (iv) to the extent of any excess, to the payment of all other
Obligations.

 

Article III.
CONDITIONS OF LENDING

 

Section 3.01         Conditions Precedent. The obligation of Lender to make the
Closing Date Loan is subject to satisfaction of the following conditions
precedent:

 

(a)          Lender shall have received each of the following documents, duly
executed, each (unless otherwise specified below) dated the Closing Date and in
form and substance satisfactory to Lender:

 

(i)          duly executed counterparts of this Agreement;

 

(ii)         certified copies of (A) the Organization Documents of each Loan
Party, (B) the resolutions of each Loan Party authorizing the Facility Documents
and (C) documents evidencing all other necessary company action, governmental
approvals and third-party consents, if any, with respect to the Facility
Documents;

 

(iii)        an incumbency certificate of each Loan Party;

 

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(iv)        certificates evidencing the good standing of each Loan Party; and

 

(v)         such other assurances, certificates, documents, consents, or
opinions as Lender reasonably may require.

 

The acceptance of the Closing Date Loan shall be deemed to be a representation
and warranty by Borrower that the conditions specified in Section 3.01 have been
satisfied on and as of the Closing Date.

 

Article IV.
REPRESENTATIONS AND WARRANTIES

 

Section 4.01         Representations and Warranties. Each Loan Party represents
and warrants to Lender that:

 

(a)          Such Loan Party (i) is duly organized, validly existing and in good
standing under the Laws of the jurisdiction of its organization, (ii) is duly
qualified and in good standing in each other jurisdiction in which the conduct
of its business requires it to so qualify or be licensed and where, in each
case, failure so to qualify and be in good standing could have a Material
Adverse Effect, and (iii) has all requisite company power and authority to own
or lease and operate its properties and to carry on its business as now
conducted and as proposed to be conducted.

 

(b)          The execution, delivery and performance by each Loan Party of this
Agreement and the other Facility Documents to which such Loan Party is a party
(when delivered) and the consummation of the transactions contemplated under the
Facility Documents are within its company powers, have been duly authorized by
all necessary company action, and do not and will not (i) contravene such Loan
Party’s Organization Documents, (ii) contravene any contractual restriction
binding on it or require any consent under any agreement or instrument to which
it is a party or by which any of its properties or assets is bound, (iii) result
in or require the creation or imposition of any Liens upon any property or
assets of such Loan Party other than Permitted Liens, or (iv) violate any Law
(including, but not limited to, the Securities Act and the Exchange Act and the
regulations thereunder) or writ, judgment, injunction, determination or award.

 

(c)          Except for any filings to perfect Lender’s security interest in the
Collateral, no order, consent, approval, license, authorization or validation
of, or filing, recording or registration with, or exemption or waiver by, any
Governmental Authority or any other third party (except as have been obtained or
made and are in full force and effect), is required to authorize, or is required
in connection with, (i) the execution, delivery and performance by any Loan
Party of any Facility Document, (ii) the granting of the security interest in
the Collateral to Lender or (iii) the legality, validity, binding effect or
enforceability of any Facility Document.

 

(d)          Each Loan Party is in compliance with the requirements of all Laws
and all orders, writs, injunctions and decrees applicable to it or to its
properties, except in such instances in which (i) such requirement of Law or
order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted or (ii) the failure to comply
therewith, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.

 

10

 

 

(e)          This Agreement and the other Facility Documents that any Loan Party
is party to are and will be legal, valid and binding obligations of such Loan
Party enforceable against such Loan Party in accordance with their respective
terms in all respects. The security interest in the Collateral granted herein is
a valid and binding security interest in the Collateral subject to no other
liens or security interests other than Permitted Liens.

 

(f)          No Default or Event of Default has occurred.

 

(g)          Borrower is not, and after giving effect to the transactions
contemplated under the Facility Documents will not be, required to register as
an “investment company” as such term is defined in the Investment Company Act of
1940.

 

(h)          No part of the proceeds of Loan will be used, whether directly or
indirectly, and whether immediately, incidentally or ultimately, for any purpose
that entails a violation of Regulation T, Regulation U, or Regulation X, as
applicable.

 

(i)          Borrower owns all of the Collateral free and clear of Liens, other
than Permitted Liens.

 

(j)          The Loan is made with full recourse to Borrower and constitutes
direct, general, unconditional and unsubordinated Debt of Borrower.

 

(k)          All information provided or to be provided with respect to Borrower
and its Affiliates by or on behalf of Borrower to Lender in connection with the
negotiation, execution and delivery of this Agreement and the other Facility
Documents or the transactions contemplated hereby and thereby including, but not
limited to, any financial statements of Borrower provided to Lender was or will
be, on or as of the applicable date of provision thereof, complete and correct
in all material respects and did not (or will not) contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements contained therein not misleading in light of the time and
circumstances under which such statements were made.

 

(l)          Borrower has no Subsidiaries except for TESN, Stellar and Grove.

 

(m)          Borrower is not a Benefit Plan.

 

(n)          No Loan Party, nor, to the knowledge of such Loan Party, any
director, officer, employee, agent, Affiliate or representative thereof, is an
individual or entity currently the subject to any Sanctions, nor is any Loan
Party located, organized or resident in a Designated Jurisdiction.

 

Article V.
COVENANTS OF BORROWER

 

Section 5.01         Affirmative Covenants. On and after the Closing Date and so
long as any Obligations have not been indefeasibly paid in full:

 

(a)          Existence. Each Loan Party shall preserve renew and maintain in
full force and effect its legal existence and good standing under the Laws of
the jurisdiction of its organization.

 

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(b)          Reporting Requirements. Borrower will furnish to Lender or cause to
be furnished to Lender:

 

(i)          as soon as possible and in any event within two (2) Business Days
after Borrower obtains actual knowledge of the occurrence of (A) any Event of
Default or Default, or (B) any actual or threatened litigation or other event
which, if adversely determined to Borrower, could reasonably be likely to result
in a Material Adverse Effect, a statement of a Responsible Officer of Borrower
setting forth the details thereof and the action which Borrower has taken and
proposes to take with respect thereto; and

 

(ii)         promptly after request therefor, such other business and financial
information respecting the condition or operations, financial or otherwise, of
Borrower as Lender may from time to time reasonably request.

 

(c)          Use of Proceeds. Borrower will use the proceeds of the Closing Date
Loan for (i) the full satisfaction of all obligations under that certain
Factoring and Security Agreement, dated June 15, 2011, between Borrower and
Harborcove Fund I, LP., as amended to date, (ii) the repayment of up to
$2,500,000 of Company trade payables, and (iii) working capital and general
corporate purposes in the ordinary course of business.

 

(d)          Payment of Obligations. Each Loan Party shall pay and discharge as
the same shall become due and payable, all its obligations and liabilities,
including: (i) all taxes, assessments, claims and governmental charges or levies
imposed upon it or upon its property; provided, however, that no Loan Party
shall be required to pay or discharge any such tax, assessment, claim or charge
that is being diligently contested in good faith and by proper proceedings and
as to which appropriate reserves are being maintained; (ii) all lawful claims
which, if unpaid, would become a Lien on its property; and (iii) all Debt, as
and when due and payable.

 

(e)          Inspection Rights. Each Loan Party shall, at any reasonable time
during normal business hours and upon reasonable prior notice, from time to time
permit Lender (in each case, subject to Section 9.11) to (i)  discuss the
affairs, finances, assets and accounts of such Loan Party with any of such Loan
Party’s officers, directors or other representatives and independent certified
public accountants and (ii) examine and make copies of and abstracts from their
records and books of account, all at the expense of Borrower; provided, however,
that after the occurrence of an Event of Default, Lender may do any of the
foregoing at the expense of Borrower at any time during normal business hours
and without advance notice.

 

(f)          Compliance with Laws. Each Loan Party shall comply with the
requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except in such instances in
which (i) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted; or
(ii) the failure to comply therewith could not reasonably be expected to result
in a Material Adverse Effect.

 

(g)          Further Assurances. Each Loan Party agrees to execute and/or
deliver any additional agreements, documents and instruments, and take such
further actions as may be reasonably requested by Lender from time to time to
carry out the intent of the Facility Documents.

 

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Section 5.02         Negative Covenants. So long as any Obligations have not
been indefeasibly paid in full:

 

(a)          Additional Debt. No Loan Party shall, directly or indirectly,
create, incur, assume or suffer to exist any Debt, other than Debt created under
the Facility Documents.

 

(b)          Liens. Each Loan Party shall defend the Collateral against all
claims and demands of all persons at any time claiming any interest therein
adverse to Lender. No Loan Party shall, directly or indirectly, create, incur,
assume or suffer to exist any Lien upon any Collateral, whether now owned or
hereafter acquired, except Liens created under the Facility Documents.

 

(c)          Mergers, Etc. Without the prior consent of Lender, no Loan Party
shall, directly or indirectly, merge or consolidate with or into, or convey,
transfer, lease or otherwise dispose of, whether in one transaction or in a
series of transactions, all or substantially all of the property and assets
(whether now owned or hereafter acquired) of any Loan Party to any Person.

 

(d)           Formation of Subsidiaries. No Loan Party shall, directly or
indirectly, form, create, organize, incorporate or acquire any Subsidiaries.

 

(e)          Investments. No Loan Party shall hold any Investments except
Investments by Borrower and its Subsidiaries in their respective Subsidiaries
outstanding on the date hereof.

 

(f)          Dispositions. No Loan Party shall make any disposition or enter
into any agreement to make any Disposition, except: (i) dispositions of obsolete
or worn out property, whether now owned or hereafter acquired, in the ordinary
course of business; (ii) dispositions of inventory in the ordinary course of
business; (iii) dispositions of equipment or real property to the extent that
the proceeds of such disposition are reasonably promptly applied to the purchase
price of such replacement property; and (iv) dispositions of property by any
Subsidiary to Borrower or to a wholly-owned Subsidiary of Borrower.

 

(g)          Transaction with Affiliates. No Loan Party shall enter into any
transaction of any kind with any Affiliate of Borrower, whether or not in the
ordinary course of business, other than on fair and reasonable terms
substantially as favorable to Borrower or such Subsidiary as would be obtainable
by Borrower or such Subsidiary at the time in a comparable arm’s length
transaction with a Person other than an Affiliate.

 

(h)          Prepay Debt. No Loan Party shall prepay, redeem, purchase, defease
or otherwise satisfy prior to the scheduled maturity thereof in any manner, or
make any payment in violation of any subordination terms of, any indebtedness of
such Loan Party.

 

(i)          Status as a Benefit Plan. No Loan Party shall, directly or
indirectly, be or become a Benefit Plan.

 

(j)          Change Name, Status, Tradename. No Loan Party shall, without prior
written notice to Lender, change its name, change its corporate status, or use
any trade name.

 

(k)          Sanctions. The proceeds of the Loans shall not be used, directly or
indirectly, and Borrower shall not lend, contribute or otherwise make available
such proceeds to any Affiliate, joint venture partner or other individual or
entity, to fund any activities of or business with any individual or entity, or
in any Designated Jurisdiction that at the time of such funding, is the subject
of any Sanctions; or in any other manner that will result in a violation by any
individual or entity (including any individual or entity participating in the
transaction, whether as a Lender or agent or otherwise) of any Sanctions.

 

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Article VI.
SECURITY INTEREST AND CONTROL

 

Section 6.01         Granting of Security Interest. Each Loan Party hereby
pledges, assigns and grants to Lender, on its behalf and for the benefit of
Lender, a first priority security interest in and lien on, and a right of
set-off against, the following property and assets, whether now or hereafter
existing, owned or acquired by such Loan Party (collectively, the “Collateral”),
to secure the payment and the performance of all the Obligations:

 

(a)          Accounts;

 

(b)          Chattel Paper;

 

(c)          Commercial Tort Claims listed on Schedule 6.01 (as such schedule
may be amended or supplemented from time to time);

 

(d)          Deposit Accounts (including, without limitation, each Collateral
Account);

 

(e)          Documents;

 

(f)          General Intangibles;

 

(g)          Goods;

 

(h)          Inventory;

 

(i)          Equipment;

 

(j)          Instruments;

 

(k)          Investment Property;

 

(l)          Letter-of-Credit Rights and Letters of Credit;

 

(m)          Supporting Obligations;

 

(n)          all books, records, writings, databases, information and other
property relating to, used or useful in connection with, evidencing, embodying,
incorporating or referring to, any of the foregoing in this Section;

 

(o)          all Accessions to and Proceeds of the foregoing and, to the extent
not otherwise included, (i) all payments under insurance (whether or not Lender
is the loss payee thereof) and (ii) all tort claims; and

 

(p)          all other property and rights of every kind and description and
interests therein.

 

Section 6.02         Proceeds. Except as permitted to be distributed to or
withdrawn by Borrower pursuant to the terms herein, (a) any property received by
Borrower, which shall comprise of such additions, substitutes and replacements
for, or proceeds of, the Collateral, shall be held in trust for Lender and shall
be delivered immediately to Lender, and (y) any cash proceeds of the Collateral
shall be held in trust for Lender and shall be delivered immediately to Lender.

 

14

 

 

Section 6.03         Authorization to File Financing Statements. Each Loan Party
hereby authorizes Lender to file financing statements or take any other action
required to perfect Lender’s security interests in the Collateral, without
notice to any Loan Party, with all appropriate jurisdictions to perfect or
protect Lender’s interest or rights under the Facility Documents, including a
notice that any disposition of the Collateral, except to the extent permitted by
the terms of this Agreement, by Borrower, or any other Person, shall be deemed
to violate the rights of Lender under the UCC.

 

Article VII.
EVENTS OF DEFAULT

 

Section 7.01         Events of Default. If any of the following events (“Events
of Default”) shall occur:

 

(a)          Any Loan Party shall fail to pay when due (i) any of the
outstanding principal of Loan, or (ii) accrued interest on the Loan or other
amounts or fees owing pursuant to any of the Facility Documents and with respect
to clause (ii) only, such failure remains unremedied for three (3) days; or

 

(b)          Any Loan Party shall fail to provide Lender with the reports
required to be delivered under Section 5.01(b) on the date required for such
delivery, and such failure shall not be cured within five (5) Business Days; or

 

(c)          Any Loan Party shall fail to perform or observe any term, covenant,
or agreement contained in Section 5.01(a), (c) or (e) or Section 5.02; or

 

(d)          Any Loan Party shall fail to perform or observe any other term,
covenant or agreement in this Agreement or any other Facility Document to which
it is a party (not specified in clause (a), (b) or (c) above or any other clause
of this Section 7.01) and such failure shall continue for 15 days; or

 

(e)          any representation, warranty, certification or statement of fact
made or deemed made by or on behalf of any Loan Party herein, in any other
Facility Document, or in any document delivered in connection herewith or
therewith shall be incorrect or misleading when made or deemed made; or

 

(f)          (i) any Facility Document, at any time after its execution and
delivery and for any reason other than as expressly permitted hereunder or
thereunder, ceases to be in full force and effect; (ii) any Loan Party or any
other Person contests in any manner the validity or enforceability of any
Facility Document; or (iii) any Loan Party denies that it has any or further
liability or obligation under any Facility Document; or

 

15

 

 

(g)          (i) Any Loan Party (A) fails to make any payment when due (whether
by scheduled maturity, required prepayment, acceleration, demand, or otherwise)
in respect of any Debt (other than Debt hereunder and Debt under Swap
Contracts), or (B) fails to observe or perform any other agreement or condition
relating to any such Debt or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event occurs, the effect
of which default or other event is to cause, or to permit the holder or holders
of such Debt or the beneficiary or beneficiaries of such Guarantee (or a trustee
or agent on behalf of such holder or holders or beneficiary or beneficiaries) to
cause, with the giving of notice if required, such Debt to be demanded or to
become due or to be repurchased, prepaid, defeased or redeemed (automatically or
otherwise), or an offer to repurchase, prepay, defease or redeem such Debt to be
made, prior to its stated maturity, or such Guarantee to become payable or cash
collateral in respect thereof to be demanded; or (ii) there occurs under any
Swap Contract an Early Termination Date (as defined in such Swap Contract)
resulting from (A) any event of default under such Swap Contract as to which
Loan Party, as applicable, is the Defaulting Party (as defined in such Swap
Contract) or (B) any Termination Event (as so defined) under such Swap Contract
as to which such Loan Party is an Affected Party (as so defined); or

 

(h)          (i) Any Loan Party becomes unable or admits in writing its
inability or fails generally to pay its debts as they become due; (ii) any writ
or warrant of attachment or execution or similar process is issued or levied
against all or any material part of the property of any Loan Party and is not
released, vacated or fully bonded within 30 days after its issue or levy; (iii)
any Loan Party institutes or consents to the institution of any proceeding under
any Debtor Relief Law, or makes an assignment for the benefit of creditors, or
applies for or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for all or
any material part of its property; (iv) any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer is appointed without
the application or consent of any Loan Party and the appointment continues
undischarged or unstayed for thirty (30) calendar days; (v) any proceeding under
any Debtor Relief Law relating to any Loan Party or to all or any material part
of its property is instituted without the consent of such Loan Party and
continues undismissed or unstayed for thirty (30) calendar days, or an order for
relief is entered in any such proceeding; or (vi) any Loan Party shall take any
action to authorize any of the actions set forth above in this Section 7.01(h);
or

 

(i)          there is entered against any Loan Party (i) one or more final
judgments or orders for the payment of money in an aggregate amount (as to all
such judgments or orders) that have, or could reasonably be expected to have a
Material Adverse Effect, and (A) enforcement proceedings are commenced by any
creditor upon such judgment or order, or (B) there is a period of ten (10)
consecutive days during which a stay of enforcement of such judgment, by reason
of a pending appeal or otherwise, is not in effect; or (ii) any one or more
non-monetary final judgments that have, or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect; or

 

(j)          a Change of Control shall occur; or

 

(k)          a Regulatory Event shall occur; or

 

(l)          Lender ceases to have a first priority perfected Lien in the
Collateral.

 

then, and in any such event, Lender may declare the Loan, all accrued interest
thereon, all fees and all other accrued amounts payable under this Agreement and
the other Facility Documents to be forthwith due and payable, whereupon the
Loan, all such interest and fees and all such other amounts hereunder and under
the Facility Documents shall become and be forthwith due and payable, without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived by Borrower; provided, however, that upon the occurrence of any
event in Section 7.01(h),  the Loan, all accrued interest and all accrued other
amounts payable, including fees, under this Agreement and under the other
Facility Documents shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by Borrower.

 

16

 

 

Section 7.02         Voting; Power of Attorney.

 

(a)          At all times prior to the occurrence of an Event of Default,
Borrower shall have the right to exercise all voting rights pertaining to any
equity interests held by Borrower; provided that Borrower will not vote such
equity interests in any manner that is inconsistent with the terms of any
Facility Document or would reasonably be expected to have a material adverse
effect on the value thereof or Lender’s interest therein. After the occurrence
of an Event of Default, if Lender elects to exercise such right and provides
notice of its election to exercise such vote to Borrower, the right to vote any
Collateral shall be vested exclusively in Lender. To this end, Borrower hereby
irrevocably constitutes and appoints Lender the proxy and attorney-in-fact of
Borrower, with full power of substitution, to vote, and to act with respect to,
any and all Collateral standing in the name of Borrower or with respect to which
Borrower is entitled to vote and act, subject to the understanding that such
proxy may not be exercised until after an Event of Default occurs. The proxy
herein granted is coupled with an interest, is irrevocable, and shall continue
until the Obligations have been paid and performed in full.

 

(b)          Borrower hereby irrevocably constitutes and appoints Lender and any
officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the name of
Borrower or in its own name, to take after the occurrence an Event of Default
that has not been waived, any and all action and to execute any and all
documents and instruments which Lender at any time and from time to time deems
necessary or desirable to accomplish the purposes hereof, including, without
limitation, selling any of the Collateral on behalf of Borrower as agent or
attorney in fact for Borrower and applying the proceeds received therefrom in
accordance with this Agreement; however, nothing in this paragraph shall be
construed to obligate Lender to take any action hereunder nor shall Lender be
liable to Borrower for failure to take any action hereunder. This appointment
shall be deemed a power coupled with an interest, is irrevocable, and shall
continue until the Obligations have been paid and performed in full.

 

Section 7.03         Rights and Remedies; Blocker Sale.

 

(a)          In the case of an Event of Default other than one referred to in
Section 7.01(h), Lender may by notice to Borrower, declare the principal amount
then outstanding of, and the accrued interest on, the Loans and all other
obligations (including any amounts payable hereunder) to be forthwith due and
payable, whereupon such amounts shall be immediately due and payable without
presentment, demand, protest or other formalities of any kind, all of which are
hereby expressly waived by Borrower; and (2) in the case of the occurrence of an
Event of Default referred to in Section 7.01(h), the principal amount then
outstanding of, and the accrued interest on, the Loans and all other obligations
(including any amounts payable hereunder) shall automatically become immediately
due and payable without presentment, demand, protest or other formalities of any
kind, all of which are hereby expressly waived by Borrower.

 

(b)          Lender may exercise in respect of the Collateral, in addition to
other rights and remedies provided for herein or otherwise available to it, all
the rights and remedies of a secured party on default under the UCC (whether or
not the UCC applies to the affected Collateral) and also may:

 

(i)          take possession of any Collateral not already in its possession
without demand and without legal process;

 

17

 

 

(ii)         require each Loan Party to, and each Loan Party hereby agrees that
it will, at its expense and upon request of Lender forthwith, assemble all or
part of the Collateral as directed by Lender and make it available to Lender at
a place to be designated by Lender that is reasonably convenient to both
parties;

 

(iii)        enter onto the property where any Collateral is located and take
possession thereof without demand and without legal process;

 

(iv)        without notice except as specified below, lease, license, sell or
otherwise dispose of the Collateral or any part thereof in one or more parcels
at public or private sale, at any of Lender’s offices or elsewhere, for cash, on
credit or for future delivery, and upon such other terms as Lender may deem
commercially reasonable. Each Loan Party agrees that, to the extent notice of
sale shall be required by law, at least ten days’ prior notice to such Loan
Party of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification. Lender
shall not be obligated to make any sale of Collateral regardless of notice of
sale having been given. Lender may adjourn any public or private sale from time
to time by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned.

 

(c)          All cash proceeds received by Lender in respect of any sale of,
collection from, or other realization upon, all or any part of the Collateral
shall be applied by Lender in its sole discretion.

 

(d)          Lender may:

 

(i)          transfer all or any part of the Collateral into the name of Lender
or its nominee, with or without disclosing that such Collateral is subject to
the Lien hereunder;

 

(ii)         notify the parties obligated on any of the Collateral to make
payment to Lender of any amount due or to become due thereunder;

 

(iii)        withdraw, or cause or direct the withdrawal, of all funds with
respect to the Collateral Account;

 

(iv)        enforce collection of any of the Collateral by suit or otherwise,
and surrender, release or exchange all or any part thereof, or compromise or
extend or renew for any period (whether or not longer than the original period)
any obligations of any nature of any party with respect thereto;

 

(v)         endorse any checks, drafts, or other writings in any Loan Party’s
name to allow collection of the Collateral;

 

(vi)        take control of any proceeds of the Collateral; and

 

(vii)       execute (in the name, place and stead of any Loan Party)
endorsements, assignments, stock powers and other instruments of conveyance or
transfer with respect to all or any of the Collateral.

 

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Article VIII.
CONTINUING GUARANTY

 

Section 8.01         Guaranty. Each Guarantor hereby absolutely and
unconditionally guarantees, as a guaranty of payment and performance and not
merely as a guaranty of collection, prompt payment when due, whether at stated
maturity, by required prepayment, upon acceleration, demand or otherwise, and at
all times thereafter, of any and all of the Obligations, whether for principal,
interest, premiums, fees, indemnities, damages, costs, expenses or otherwise,
and whether arising hereunder or under any other Facility Documents (including
all renewals, extensions, amendments, refinancings, increases and other
modifications thereof and all costs, attorneys’ fees and expenses incurred by
Lender in connection with the collection or enforcement thereof). The Lender’s
books and records showing the amount of the Obligations shall be admissible in
evidence in any action or proceeding, and shall be binding upon Guarantors, and
conclusive for the purpose of establishing the amount of the Obligations. This
Guaranty shall not be affected by the genuineness, validity, regularity or
enforceability of the Obligations or any instrument or agreement evidencing any
Obligations, or by the existence, validity, enforceability, perfection,
non-perfection or extent of any collateral therefor, or by any fact or
circumstance relating to the Obligations which might otherwise constitute a
defense to the obligations of Guarantors under this Guaranty, and each Guarantor
hereby irrevocably waives any defenses it may now have or hereafter acquire in
any way relating to any or all of the foregoing (other than the defense of
payment in full).

 

Section 8.02         Rights of Lenders. Each Guarantor consents and agrees that
Lender may, at any time and from time to time, without notice or demand, and
without affecting the enforceability or continuing effectiveness hereof:
(a) amend, extend, renew, compromise, discharge, accelerate, increase or
otherwise change the time for payment or the terms of the Obligations or any
part thereof; (b) take, hold, exchange, enforce, waive, release, fail to
perfect, sell, or otherwise dispose of any security for the payment of this
Guaranty or any Obligations; (c) apply such security and direct the order or
manner of sale thereof as the Lender in its sole discretion may determine; and
(d) release or substitute one or more of any endorsers or other guarantors of
any of the Obligations. Without limiting the generality of the foregoing,
Guarantors consent to the taking of, or failure to take, any action which might
in any manner or to any extent vary the risks of Guarantors under this Guaranty
or which, but for this provision, might operate as a discharge of Guarantors.

 

Section 8.03         Certain Waivers. Guarantors waive (a) any defense arising
by reason of any disability or other defense of Borrower or any other guarantor
(other than the defense of payment in full), or the cessation from any cause
whatsoever (including any act or omission of Lender) of the liability of
Borrower; (b) any defense based on any claim that Guarantors’ obligations exceed
or are more burdensome than those of Borrower; (c) the benefit of any statute of
limitations affecting Guarantors’ liability hereunder; (d) any right to proceed
against Borrower, proceed against or exhaust any security for the Obligations,
or pursue any other remedy in the power of Lender whatsoever; (e) any benefit of
and any right to participate in any security now or hereafter held by Lender;
and (f) to the fullest extent permitted by law, any and all other defenses or
benefits that may be derived from or afforded by applicable law limiting the
liability of or exonerating guarantors or sureties. Each Guarantor expressly
waives all setoffs and counterclaims and all presentments, demands for payment
or performance, notices of nonpayment or nonperformance, protests, notices of
protest, notices of dishonor and all other notices or demands of any kind or
nature whatsoever with respect to the Obligations, and all notices of acceptance
of this Guaranty or of the existence, creation or incurrence of new or
additional Obligations.

 

Section 8.04         Obligations Independent. The obligations of each Guarantor
hereunder are those of primary obligor, and not merely as surety, and are
independent of the Obligations and the obligations of any other guarantor, and a
separate action may be brought against each Guarantor to enforce this Guaranty
whether or not Borrower or any other person or entity is joined as a party.

 

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Section 8.05         Subrogation. No Guarantor shall exercise any right of
subrogation, contribution, indemnity, reimbursement or similar rights with
respect to any payments each of them makes under this Guaranty until all of the
Obligations and any amounts payable under this Guaranty have been paid and
performed in full and the Loans are terminated. If any amounts are paid to
Guarantors in violation of the foregoing limitation, then such amounts shall be
held in trust for the benefit of Lender and shall forthwith be paid to Lender to
reduce the amount of the Obligations, whether matured or unmatured.

 

Section 8.06         Termination; Reinstatement. This Guaranty is a continuing
and irrevocable guaranty of all Obligations now or hereafter existing and shall
remain in full force and effect until all Obligations and any other amounts
payable hereunder are paid in full in cash and the Loans are terminated.
Notwithstanding the foregoing, this Guaranty shall continue in full force and
effect or be revived, as the case may be, if any payment by or on behalf of
Borrower or any Guarantor is made, or Lender exercises its right of setoff, in
respect of the Obligations and such payment or the proceeds of such setoff or
any part thereof is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by Lender in its discretion) to be repaid to a trustee, receiver or
any other party, in connection with any proceeding under any Debtor Relief Laws
or otherwise, all as if such payment had not been made or such setoff had not
occurred and whether or not Lender is in possession of or have released this
Guaranty and regardless of any prior revocation, rescission, termination or
reduction. The obligations of each Guarantor under this paragraph shall survive
termination of this Agreement.

 

Section 8.07         Subordination. Each Guarantor hereby subordinates the
payment of all obligations and indebtedness of Borrower or any other Guarantor
owing to such Guarantor, whether now existing or hereafter arising, including
but not limited to any obligation of Borrower to any Guarantor as subrogee of
Lender or resulting from any Guarantor’s performance under this Guaranty, to the
payment in full in cash of all Obligations. If Lender so requests, any such
obligation or indebtedness of Borrower to any Guarantor shall be enforced and
performance received by such Guarantor as trustee for Lender and the proceeds
thereof shall be paid over to Lender on account of the Obligations, but without
reducing or affecting in any manner the liability of any Guarantor under this
Guaranty.

 

Section 8.08         Stay of Acceleration. If acceleration of the time for
payment of any of the Obligations is stayed, in connection with any case
commenced by or against any Guarantors or Borrower under any Debtor Relief Laws,
or otherwise, all such amounts shall nonetheless be payable by Guarantors
immediately upon demand by Lender.

 

Article IX.
MISCELLANEOUS

 

Section 9.01         Amendments, Etc. No amendment or waiver of any provision of
this Agreement or any other Facility Document, and no consent to any departure
by Borrower or any other Loan Party therefrom, shall be effective unless in
writing signed by Lender and Borrower or the applicable Loan Party, as the case
may be, and each such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.

 

Section 9.02         Notices; Effectiveness; Electronic Communications.

 

(a)          Notices Generally. All notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopier as
follows, and all notices and other communications expressly permitted hereunder
to be given by telephone shall be made to the applicable telephone number, as
follows:

 

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(i)          if to Borrower or any Loan Party, to it at 6321 Bury Drive, Suite
8, Eden Prairie, MN 55346, Attention: Jeffrey Flannery (Facsimile No. (952)
938-3290; Telephone No. (952) 960-2371; E-Mail: jflannery@titanenergy.com), with
a copy to Kathy Scherer (kscherer@titanenergy.com).

 

(ii)         if to Lender, to it at 400 Kelby Street, 9th Floor, Fort Lee, NJ
07024, Attention of Andrew Minkow (Facsimile No. (212) 867-1325; Telephone No.
(212) 588-1070; E-Mail: Andrew@pioneerpowersolutions.com), with a copy to Rick
Werner, Haynes and Boone, LLP, 30 Rockefeller Plaza, 26th Floor, New York, NY
10112 (Facsimile No. (212) 884-8233; Telephone No. (212) 867-0700); and.

 

Notices and other communications sent by hand or overnight courier service, or
mailed by certified or registered mail, shall be deemed to have been given when
received; notices and other communications sent by facsimile or e-mail shall be
deemed to have been given when sent (except that, if not given during normal
business hours for the recipient, shall be deemed to have been given at the
opening of business on the next Business Day for the recipient).

 

(b)          Telephonic Communications. All telephonic notices to and other
telephonic communications with Lender may be recorded by Lender, and each of the
parties hereto hereby consents to such recording.

 

Section 9.03         Reserved.

 

Section 9.04         No Waiver.

 

(a)          No failure on the part of Lender to exercise, and no delay in
exercising, any right hereunder or under any other Facility Document shall
operate as a waiver thereof nor shall the single or partial exercise of any such
right preclude any other or further exercise thereof or the exercise of any
other right. The remedies herein provided are cumulative and not exclusive of
any remedies provided by Law. No notice to or demand on any Loan Party in any
case shall entitle such Loan Party to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of Lender to
any other or further action in any circumstances without notice or demand.

 

Section 9.05         Costs and Expenses; Indemnification; Damage Waiver.

 

(a)          Costs and Expenses. The Loan Parties shall, jointly and severally,
pay (i) all reasonable out-of-pocket expenses incurred by Lender and its
Affiliates (including the reasonable fees, charges and disbursements of counsel
for Lender) in connection with the credit facilities provided for herein, the
preparation, negotiation, execution, delivery and administration of the Facility
Documents or any amendments, modifications or waivers of the provisions hereof
or thereof (whether or not the transactions contemplated hereby or thereby shall
be consummated), and (ii) all out-of-pocket expenses incurred by Lender
(including the fees, charges and disbursements of any counsel for Lender), in
connection with the enforcement or protection of its rights in connection with
this Agreement and the other Facility Documents, including its rights under this
Section, including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of the Loan.

 

21

 

 

(b)          Indemnification by Borrower. The Loan Parties shall, jointly and
severally, indemnify Lender and each Related Party of Lender (each such Person
being called an “Indemnitee”) against, and hold each Indemnitee harmless from,
any and all losses, claims, damages, liabilities and related expenses (including
the fees, charges and disbursements of any counsel for any Indemnitee) incurred
by any Indemnitee or asserted against any Indemnitee by any third party or by
any Loan Party or any Related Party of a Loan Party arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Facility Document or any agreement or instrument
contemplated hereby or thereby, the performance by the parties hereto of their
respective obligations hereunder or thereunder or the consummation of the
transactions contemplated hereby or thereby, (ii) the Loan or the use or
proposed use of the proceeds therefrom, any Indemnitee acting in reliance on any
instruction given by Borrower or any Indemnitee failing to follow the unlawful
or unreasonable instructions of Borrower, or (iii) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory, whether brought by a third
party or by a Loan Party or any other Related Party of a Loan Party, and
regardless of whether any Indemnitee is a party thereto, provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses (x) are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee or
(y) result from a claim brought by a Loan Party or any Related Party of a Loan
Party against an Indemnitee for breach in bad faith of such Indemnitee’s
obligations hereunder or under any other Facility Document, if such Loan Party
or such Related Party has obtained a final and nonappealable judgment in its
favor on such claim as determined by a court of competent jurisdiction.

 

(c)          Waiver of Consequential Damages, Etc. To the fullest extent
permitted by applicable Law, no Loan Party shall assert, and each Loan Party
hereby waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Agreement, any other Facility Document or any agreement or instrument
contemplated hereby, the transactions contemplated hereby or thereby, the Loan
or the use of the proceeds thereof. No Indemnitee referred to in clause (b)
above shall be liable for any damages arising from the use by unintended
recipients of any information or other materials distributed by it through
telecommunications, electronic or other information transmission systems.

 

(d)          Payments. All amounts due under this Section shall be payable not
later than ten Business Days after demand therefor.

 

(e)          Survival. The agreements in this Section shall survive the
termination of this Agreement and the repayment, satisfaction or discharge of
all the other Obligations.

 

Section 9.06         Payments Set Aside. To the extent that any payment by or on
behalf of a Loan Party is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid under any Debtor Relief Law or
otherwise, then to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied shall be revived and continued in full force
and effect as if such payment had not been made or such setoff had not occurred.

 

Section 9.07         Assignments and Participations.

 

(a)          Assignments. The provisions of this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns permitted hereby, except that neither Borrower nor any other Loan
Party may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of Lender. Lender may, with prior
written consent of Borrower, assign to any person all or a portion of its rights
and obligations under this Agreement; provided, however, that no such prior
written consent of Borrower shall be required if (i) the assignment is to any
Affiliate of Lender or (ii) an Event of Default shall have occurred.

 

22

 

 

(b)          Participations. Lender may at any time, without the consent of, or
notice to, Borrower, sell participations to any Person (other than a natural
Person, Borrower or any of Borrower’s Affiliates) (each, a “Participant”) in all
or a portion of Lender’s rights and/or obligations under this Agreement
(including all or a portion of the Loan). Borrower agrees that each Participant
shall be entitled to the benefits of Sections 2.08, 2.09, and 2.11 to the same
extent as if it were Lender.

 

(c)          Certain Pledges. Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under its note, if any) to secure obligations of Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank.

 

Section 9.08         Governing Law; Submission to Jurisdiction.

 

(a)          Governing Law. This Agreement shall be governed by, and construed
in accordance with, the law of the State of New York, without giving effect to
its conflict of laws provisions.

 

(b)          Submission to Jurisdiction. Each Loan Party irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the United States District Court of the Southern District of the
State of New York, and all appropriate appellate courts or, if jurisdiction in
such court is lacking, any New York State court of competent jurisdiction
sitting in New York (and all appropriate appellate courts), in any action or
proceeding arising out of or relating to this Agreement or any other Facility
Document.

 

(c)          Waiver of Venue. Each Loan Party irrevocably and unconditionally
waives, to the fullest extent permitted by applicable Law, any objection that it
may now or hereafter have to the laying of venue of any action or proceeding
arising out of or relating to this Agreement or any other Facility Document in
any court referred to in clause (b) of this Section. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by applicable Law,
the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

 

(d)          WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER FACILITY DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER FACILITY DOCUMENTS BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 9.08(d).

 

23

 

 

Section 9.09         Severability. In case any provision in this Agreement or
any other Facility Document shall be held to be invalid, illegal or
unenforceable, such provision shall be severable from the rest of this Agreement
or such other Facility Document, as the case may be, and the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.

 

Section 9.10         Counterparts; Integration; Effectiveness; Electronic
Execution. This Agreement may be executed in counterparts (and by different
parties hereto in different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. This Agreement and the other Facility Documents constitute the entire
contract among the parties relating to the subject matter hereof and supersede
any and all previous agreements and understandings, oral or written, relating to
the subject matter hereof. Delivery of an executed counterpart of a signature
page of this Agreement by telecopier shall be effective as delivery of a
manually executed counterpart of this Agreement.

 

Section 9.11         Confidentiality. Lender agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to Lender’s Affiliates and to its and its Affiliates’
respective partners, directors, officers, employees, agents, trustees, advisors
and representatives (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority purporting to have jurisdiction
over it (including any self-regulatory authority), (c) to the extent required by
applicable Laws or regulations or by any subpoena or similar legal process,
(d) to any other party hereto, (e) in connection with the exercise of any
remedies under any Facility Document or any action or proceeding relating to any
Facility Document or the enforcement of rights hereunder or thereunder,
(f) subject to an agreement containing provisions substantially the same as
those of this Section, to (i) any assignee of or participant in, or any
prospective assignee of or participant in, any of its rights or obligations
under this Agreement or (ii) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to Borrower or the
Obligations, (g) with the consent of Borrower or (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section or (ii) becomes available to Lender, or any of its Affiliates on a
nonconfidential basis from a source other than Borrower.

 

For purposes of this Section, “Information” means all information received from
a Loan Party hereof relating to such Loan Party or its business, other than any
such information that is available to Lender on a nonconfidential basis prior to
disclosure by such Loan Party, provided that, in the case of information
received from Loan Party after the date hereof, such information is clearly
identified at the time of delivery as confidential. Any Person required to
maintain the confidentiality of Information as provided in this Section 9.11
shall be considered to have complied with its obligation to do so if such Person
has exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.

 

Section 9.12         No Advisory or Fiduciary Relationship. Each Loan Party
acknowledges and agrees that: (a)(i) the arranging and other services regarding
this Agreement provided by Lender are arm’s-length commercial transactions
between such Loan Party and its Affiliates, on the one hand, and Lender and its
Affiliates, on the other hand, (ii) each Loan Party has consulted its own legal,
accounting, regulatory and tax advisors to the extent it has deemed appropriate,
and (iii) each Loan Party is capable of evaluating, and understands and accepts,
the terms, risks and conditions of the transactions contemplated hereby and by
the other Facility Documents; and (b) Lender and its Affiliates may be engaged
in a broad range of transactions that involve interests that differ from those
of the Loan Parties and their Affiliates, and Lender has no obligations to
disclose any of such interests to any Loan Party or any of its Affiliates. To
the fullest extent permitted by law, each Loan Party hereby waives and releases
any claims that it may have against Lender or its Affiliates with respect to any
breach or alleged breach of agency or fiduciary duty in connection with any
aspect of any transaction contemplated hereby.

 

24

 

 

Section 9.13         Right of Setoff. Upon the occurrence of an Event of
Default, Lender and its Affiliates (each, a “Set-off Party”) are hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to any Loan Party or to any other Person,
any such notice being hereby expressly waived, to set off and to appropriate and
apply any and all deposits (general or special, time or demand, provisional or
final, in whatever currency) and any other indebtedness at any time held or
owing by a Set-off Party to or for the credit or the account of to such Loan
Party against and on account of the obligations and liabilities of to such Loan
Party to the Set-off Party under this Agreement or under any of the other
Facility Documents, including, but not limited to, all claims of any nature or
description arising out of or connected with this Agreement or any other
Facility Document, irrespective of whether or not the relevant Set-off Party
shall have made any demand hereunder and although said obligations, liabilities
or claims, or any of them, shall be contingent or unmatured. The parties agree
that each of the Collateral Account is a general and not special account. The
rights of each Set-off Party under this Section 9.13 are in addition to other
rights and remedies (including other rights of setoff) that Lender or its
Affiliates may have. Lender agrees to notify to the applicable Loan Party
promptly after any such setoff and application, provided that the failure to
give such notice shall not affect the validity of such setoff and application.

 

Section 9.14         Judgment Currency. If a judgment, order or award is
rendered by any court or tribunal for the payment of any amounts owing to Lender
under any Facility Document, such judgment, order or award being expressed in a
currency (the “Judgment Currency”) other than Dollars, each Loan Party agrees
(a) that its obligations in respect of any such amounts owing shall be
discharged only to the extent that on the Business Day following Lender’s
receipt of any sum adjudged in the Judgment Currency, Lender may purchase
Dollars with the Judgment Currency, and (b) to indemnify and hold harmless
Lender against any deficiency in terms of Dollars in the amounts actually
received by Lender following any such purchase (after deduction of any premiums
and costs of exchange payable in connection with the purchase of, or conversion
into, Dollars). The indemnity set forth in the preceding sentence shall survive
the termination of this Agreement.

 

Section 9.15         USA PATRIOT Act Notice. Lender notifies to each Loan Party
that pursuant to the requirements of the USA PATRIOT Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required
to obtain, verify and record information that identifies to each Loan Party,
which information includes the name and address of such Loan Party and other
information that will allow Lender to identify such Loan Party in accordance
with the Act. Each Loan Party agrees to promptly provide Lender with all of the
information requested by such Person to the extent such Person deems such
information reasonably necessary to identify such Loan Party in accordance with
the Act.

 

Section 9.16         Entire Agreement. THIS AGREEMENT AND THE OTHER FACILITY
DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES.

 

[END OF TEXT]

 

25

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their respective officers or representatives thereunto
duly authorized, as of the date first above written.

 

  BORROWER:         TITAN ENERGY WORLDWIDE, INC.,   as Borrower         By: /s/
Jeffrey Flannery         Name: Jeffrey Flannery         Title: CEO        
GUARANTORS:         TITAN ENERGY SYSTEMS NORTHEAST, INC.         By: /s/ Jeffrey
Flannery         Name: Jeffrey Flannery         Title: CEO/ President        
STELLAR ENERGY SERVICES, INC.         By: /s/ Jeffrey Flannery         Name:
Jeffrey Flannery         Title: President         GROVE POWER, INC.         By:
/s/ Jeffrey Flannery         Name: Jeffrey Flannery         Title: President

 

[Additional signature pages follow]

 

 

 

 

  PTES ACQUISITION CORP.,   as Lender         By /s/ Andrew Minkow         Name:
Andrew Minkow         Title: Chief Financial Officer

 

 

 

 

Exhibit A

 

Loans and Payments Schedule

 

Date of Loan   Amount of Loan   Amount of Principal
Paid   Unpaid
Principal
Amount of
Loan   Name of Person Making
the Notation    December 2, 2014   $2,900,000.00