Document:

EXCLUSIVE
      PROJECT MANAGEMENT, DESIGN AND MARKETINGAGREEMENT

     

    This
      EXCLUSIVE PROJECT MANAGEMENT, DESIGN AND MARKETING AGREEMENT (this
      “Agreement”) is made as of this 11th day of February, 2008 (the “Effective
      Date”), by and between Solar Thin Films, Inc., a Delaware corporation, having
      its principal offices at 25 Highland Blvd., Dix Hills, New York 11746
 (“Solar
      Thin Films”), and Solar Thin Power, Inc., having its principal offices at 25
      Highland Blvd., Dix Hills, New York 11746 (“Solar Thin Power”).

    

    Recitals:

     

    A. Solar
      Thin Films is a manufacturing and engineering company specializing in: (i)
      the
      design and construction of turnkey production facilities for the manufacture
      of
      thin-film photovoltaic modules (the “Technology”), (ii) investment in
      photovoltaic module manufacturing systems, and (iii) participation in domestic
      and international solar energy power projects.

     

    B. Solar
      Thin Power is the majority-owned subsidiary of Solar Thin Films, which was
      formed to pursue international and domestic opportunities to participate in
      domestic and international solar energy power projects.

     

    C. Solar
      Thin Power has agreed to loan the sum of One Million Five Hundred Thousand
      ($1,500,000.00) to Solar Thin Films pursuant to the terms of a secured term
      note, a copy of which is annexed hereto as Exhibit A (the “Note”).

     

    D. In
      consideration for Solar Thin Power providing such funds to Solar Thin Films,
      Solar Thin Films has agreed to exclusively provide project management, design
      and marketing services (the “Services”) to Solar Thin Power with respect to any
      and all solar energy power projects (the “Solar Power Projects”) in the
      territories of Greece and Spain (the “Territories”). Solar Thin Films shall not
      participate in any Solar Power Projects in the Territories, in any way or
      manner, other than through its relationship with Solar Thin Power during the
      term of this Agreement. .

     

    Agreement:

     

    In
      consideration of the premises and in further consideration of the mutual
      promises and undertakings herein contained, and other good and valuable
      consideration, the receipt and adequacy of which hereby are acknowledged, the
      parties hereto hereby agree as follows:

     

    1. Obligations
      of the Parties. During
      the term of this Agreement, 

     

    
      	 	
              a.

            	
              Solar
                Thin Power shall:

            

    

     

    
      	 	
              i.

            	
              Use
                all commercially reasonable efforts to obtain, at its sole cost and
                expense, all governmental and other required approvals required to
                participate in Solar Power Projects in the Territories (the “Required
                Approvals”);

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              ii.

            	
              Upon
                the attainment of the Required Approvals, use its commercially reasonable
                best efforts to obtain new and existing licenses in the Territories;
                

            

    

     

    
      	 	
              iii.

            	
              Solar
                Thin Power agrees to seek new and existing licenses in a manner consistent
                with the high standards of quality used by Solar Thin Films. Solar
                Thin
                Power warrants that it possesses the expertise, facilities and ability
                to
                professionally and successfully seek licenses and to promote the
                goodwill
                associated with the Solar Thin
                Films.

            

    

     

    
      	 	
              b.

            	
              Solar
                Thin Films shall:

            

    

     

    
      	 	
              i.

            	
              Use
                all commercially reasonable efforts to support Solar Thin Power’s
                participation in Solar Power Projects in the Territories. Such support
                will include, but not be limited
                to:

            

    

     

    
      	 	
              1.

            	
              Solar
                Power Project management and
                design;

            

    

     

    
      	 	
              2.

            	
              Providing
                access and fostering relationships with manufacturers and providers
                of:

            

    

     

    
      	 	
              a.

            	
              Photovoltaic
                modules

            

    

     

    
      	 	
              b.

            	
              Electronics

            

    

     

    
      	 	
              c.

            	
              Balance
                of Systems

            

    

     

    2. Fee. Solar
      Thin Power agrees to pay Solar Thin Films a fee, which shall be determined
      on a
      project by project basis but shall be at the then existing normal and customary
      rate, for each and every project in the Territories 

     

    3. Term. The
      term
      of this Agreement shall be three (3) years effective from the date set forth
      above.

     

    4. Termination. This
      Agreement may be terminated:

     

    
      	 	
              a.

            	
              by
                the non-breaching party immediately if the other party shall fail
                to
                perform any obligation under this Agreement and such failure is incapable
                of remedy; 

            

    

     

    
      	 	
              b.

            	
              by
                the non-breaching party after thirty (30) days notice and opportunity
                to
                cure if the other party shall fail to perform any obligation under
                this
                Agreement, such failure is capable of remedy, and such failure continues
                unremedied after the expiration of such thirty (30) day period, provided
                that if Solar Thin Power is in breach of any term of this Agreement,
                Solar
                Thin Films shall be entitled to suspend the supply of the Product
                to Solar
                Thin Power until Solar Thin Power cures the breach;
                

            

    

     

    
      	 	
              c.

            	
              by
                a party immediately if the other party shall file any voluntary petition
                or similar proceeding under any bankruptcy act, institute any voluntary
                proceeding in any court to declare itself insolvent or unable to
                meet
                debts, make an assignment for the benefit of creditors, or consent
                to the
                appointment of a receiver for any of its property;
                

            

    

     

    
      
        
        

      

      
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              d.

            	
              by
                a party if the other party shall have filed against it any
                involuntary petition or similar proceeding under any bankruptcy act,
                have
                instituted against it any involuntary proceeding in any court to
                declare
                it insolvent or unable to meet debts, have all or substantially all
                of its
                property levied upon or attached by process of law, or have a receiver
                appointed for any of its property, and the same is not dismissed,
                vacated,
                set aside, or released within sixty (60) days thereafter;
                or

            

    

     

    
      	 	
              e.

            	
              by
                Solar Thin Films should Solar Thin Power (i) make any false
                misrepresentations regarding Solar Thin Films or its relationship
                with
                Solar Thin Films, or (ii) conduct its business in an immoral or
                unprofessional manner which could result in liability to Solar Thin
                Films.

            

    

     

    5. Effect
      of Termination.
      

     

    
      	 	
              a.

            	
              Termination
                by either party shall not prejudice any remedy that either party
                may have,
                at law, in equity, or under this Agreement.

            

    

     

    6. Representations
      and Warranties. Each
      party represents to the other that:

     

    a. 
      it has
      the power, right and authority to enter into this agreement;

     

    b. that
      this
      Agreement has been duly authorized by all requisite corporate and partnership
      actions; and

     

    c. that
      it
      shall comply with all applicable laws, rules and regulations in performing
      its
      obligations under this Agreement. 

     

    7. Indemnification/Limitation
      on Liability. 

     

    a. Solar
      Thin Films shall indemnify, defend and hold Solar Thin Power and its parents,
      subsidiaries, affiliates, officers, directors, employees, agents, and
      representatives (the “Solar Thin Power Indemnified Parties”) harmless from and
      against any and all claims, liabilities, demands, actions, causes of action,
      judgments, settlements, and expenses (including, but not limited to, reasonable
      attorneys’ fees, costs, and expenses) (“Damages”) arising out of or in
      connection with any (i) third-party claims based upon infringement of any United
      States patent, copyright, or other proprietary right by the Technology,
      excepting any Damages resulting from the intentionally wrongful or negligent
      acts of the Solar Thin Power Indemnified Parties or (ii) third-party
      product-liability claim in which the death, personal injury, illness, property
      damage or other loss is conclusively determined to have resulted from the proper
      use of the Product manufactured by Solar Thin Films and dispensed by a licensed
      veterinarian.

     

    b. Solar
      Thin Power shall indemnify, defend and hold Solar Thin Films and its parents,
      subsidiaries, affiliates, officers, directors, employees, agents, and
      representatives (the “Solar Thin Films Indemnified Parties”) harmless from and
      against any and all claims, liabilities, demands, actions, causes of action,
      judgments, settlements, and expenses (including, but not limited to, reasonable
      attorneys’ fees, costs, and expenses) (“Damages”) arising out of or in
      connection with Solar Thin Power’ breach of any representation, warranty,
      covenant, or agreement made by Solar Thin Power under or in connection with
      this
      Agreement or the failure of Solar Thin Power to perform any of its covenants
      or
      agreements contained in this Agreement. 

     

    
      
        
        

      

      
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    c. Upon
      obtaining knowledge thereof, the party to be indemnified (the “Indemnified
      Party”) shall promptly notify the party which is required to provide
      indemnification (the “Indemnifying Party”) in writing of any damage, claim,
      loss, liability or expense which the Indemnified Party has determined has given
      rise or could give rise to a claim under this Section
      7
      (such
      written notice being hereinafter referred to as a “Notice of Claim”). A Notice
      of Claim shall contain a brief description of the nature and estimated amount
      of
      any such claim giving rise to a right of indemnification. With respect to any
      claim or demand set forth in a Notice of Claim relating to a third-party claim,
      the Indemnifying Party shall have the power and right to defend, direct the
      defense, compromise and settle, in good faith and at its expense, any such
      claim
      or demand, and the Indemnified Party, at its sole expense, shall have the right
      to participate and shall cooperate in the defense of any such third-party claim.
      So long as the Indemnifying Party is defending in good faith any such third
      party claim, the Indemnified Party shall not settle or compromise such third
      party claim. 

     

    d. In
      no
      event shall either party be liable to the other or to any third party for any
      special, indirect, incidental, consequential, or punitive damages arising out
      of
      or in connection with this Agreement or the Technology,
      whether
      based on breach of contract, breach of warranty, tort (including negligence),
      or
      otherwise.

     

    8. Confidentiality.
      Each
      party agrees to hold in strict confidence, and not to disclose to any other
      person or to use in any manner, either before or after termination of this
      Agreement, any technical or business information, manufacturing technique,
      process, experimental work, trade secret, patent, or other confidential matter
      belonging to other party, including the Technology (“Confidential Property”),
      except as specifically permitted pursuant to the terms of this Agreement, and
      shall take all reasonable measures to maintain the confidentiality of such
      Confidential Information, which will in no event be less than the measures
      it
      uses to maintain the confidentiality of its own information of similar
      importance. Confidential Information shall include the terms of this
      Agreement.

     

    9. Injunctive
      Relief.
      Both
      parties agree that, in the event of a breach or alleged breach of Sections
      2 and 7,
      Solar
      Thin Films shall be irreparably harmed and shall not have an adequate remedy
      at
      law, including monetary damages, and that Solar Thin Films shall consequently
      be
      entitled to seek a temporary restraining order, injunction, or other form of
      equitable relief, without bond, against the continuance of such breach. Such
      relief shall be in addition to any other rights or remedies of Solar Thin Films
      under this Agreement, including, but not limited to, rights of termination
      under
Section
      4.

     

    10. Recitals. The
      parties agree that the recitals to this Agreement are true and accurate and
      hereby incorporate them into this Agreement. 

     

    
      
        
        

      

      
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    11. Force
      Majeure. For
      the
      period and to the extent that a party hereto is disabled from fulfilling in
      whole or in part its obligations hereunder, where such disability arises by
      reason of an event of force
      majeure
      (including, but not limited to, any law or government regulation, or any act
      of
      God, flood, war, terrorism, revolution, civil commotion, political disturbance,
      fire, explosion, or any other cause whatsoever over which such party has no
      control), such party shall be released from its obligations hereunder until
      the
      cessation of such disability. Notice of any such disability and cessation
      thereof shall forthwith be given by the party claiming the benefits thereof
      to
      the other. The provisions of this Article shall not be applicable to any
      obligation involving the payment of money.

     

    12. Assignment. Neither
      this Agreement, nor any of the rights or interests of Solar Thin Films or Solar
      Thin Power hereunder, may be assigned, transferred or conveyed by operation
      of
      law or otherwise without the prior written consent of the other party, which
      consent shall not be unreasonably withheld, provided, however, that either
      party
      (the “Selling Party”) may assign its rights and interest under this Agreement to
      any acquirer of such Selling Party in any transaction that constitutes a Change
      of Control for such Selling Party. A Change of Control shall mean the sale
      of
      substantially all of the assets of such Selling Party, the sale of substantially
      all of the stock of such Selling Party or the merger or consolidation of such
      Selling Party with a third party in which the Selling Party is not the surviving
      entity. 

     

    13. Independent
      Contractors. In
      performing their respective duties under this Agreement, each of the parties
      shall be operating as an independent contractor. Nothing contained herein shall
      in any way constitute any association, partnership, or joint venture between
      the
      parties hereto, or be construed to evidence the intention of the parties to
      establish any such relationship. Neither party shall have the power to bind
      the
      other party or incur obligations on the other part’s behalf without the other
      party’s prior written consent.

     

    14. Successors
      And Assigns. Subject
      to Section
      12
      above,
      this Agreement shall be binding upon, and shall inure to the benefit of, each
      of
      the parties hereto and their respective permitted successors and
      assigns.

     

    15. Survival
      of Rights of Parties. The
      termination of this Agreement shall not release either party from any liability,
      obligation, or agreement which, pursuant to any provision of this Agreement,
      is
      to survive or be performed after such expiration or termination.

     

    16. Notices. All
      notices or other communications pursuant to this Agreement shall be in writing
      and shall be deemed valid and sufficient if delivered by personal service or
      overnight courier or dispatched by registered mail, postage prepaid, in any
      post
      office, or if dispatched by telefax, promptly confirmed by letter dispatched
      as
      above provided, to the parties at the addresses as set forth above. A party
      hereto may change its address by notice to the other in the manner set forth
      above. Notices and other communications rendered as herein provided shall be
      deemed to have been given on the day on which personally served or sent by
      telefax or, if sent by overnight courier, on the second (2nd) day after being
      posted, or if sent by registered mail, on the fifth (5th) day after being
      posted, or in either case the date of actual receipt, whichever date is the
      earlier.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    17. Partial
      Invalidity. If
      any
      term, covenant or provision contained herein shall be invalid or illegal, such
      invalidity or illegality shall not impair, invalidate or nullify the other
      provisions of this Agreement.

     

    18. Applicable
      Law. All
      questions concerning the construction, validity, enforcement and interpretations
      of this agreement shall be governed and construed and enforced in accordance
      with the internal laws of the State of New York, without regard to the
      principles of conflict of law thereof. All proceedings concerning the
      interpretations, enforcement and defense of the transactions contemplated by
      this Agreement shall be commenced exclusively in the state and federal courts
      sitting in the City of New York, Borough of Manhattan. The parties hereby
      irrevocably submit to the exclusive jurisdiction of the state and federal courts
      sitting in the City of New York, Borough of Manhattan for the adjudication
      of
      any dispute hereunder or in connection herewith or with any transaction
      contemplated hereby or discussed herein, and hereby irrevocably waives, and
      agrees not to assert in any proceeding, any claim that it is not personally
      subject to the jurisdiction of any such court or that such proceeding is
      improper. Each party hereto hereby irrevocably waives personal service of
      process and consents to process being served in any such proceeding by mailing
      a
      copy thereof via registered or certified mail or overnight delivery (with
      evidence of delivery) to such party at the address in effect for notices to
      it
      under this Agreement and agrees that such service shall constitute good and
      sufficient service of process and notice thereof. Nothing contained herein
      shall
      be deemed to limit in any way any right to serve process in any manner permitted
      by law. Each party hereto hereby irrevocably waives, to the fullest extent
      permitted by applicable law, any and all right to trial by jury in any legal
      proceeding arising out of or relating to this Agreement or the transactions
      contemplated hereby. If any party shall commence a proceeding to enforce any
      provisions of this Agreement, then the prevailing party in such proceeding
      shall
      be reimbursed by the other party for its reasonable attorney’s fees and other
      reasonable costs and expenses incurred with the investigation, preparation
      and
      prosecution of such proceeding.

     

    19. Subject
      Headings. The
      subject headings on this Agreement have been placed thereon for the convenience
      of the parties and shall not be considered in any question of interpretation
      or
      construction of this Agreement.

    

    20. Complete
      Agreement, Waivers, And Amendments. This
      Agreement, in combination with the Secrecy Agreement previously signed by the
      parties and the purchase orders and invoices issued pursuant hereto, constitutes
      the entire agreement between the parties relative to the subject matter hereof,
      and supersedes and replaces all prior or contemporaneous agreements, written
      or
      oral, between the parties regarding such subject matter. The failure of either
      party to enforce at any time or for any period of time any provision of this
      Agreement shall not be construed as a waiver of such provision or of the right
      of such party thereafter to enforce such provision. In addition, no terms or
      provisions of this Agreement may be changed, waived, discharged, or terminated
      orally but only by an instrument in writing signed by the party against whom
      the
      enforcement of such change, waiver, discharge, or termination is sought. Solar
      Thin Power and Solar Thin Films agree to renegotiate in good faith any provision
      of, or addition to, this Agreement.

    

    
      
        
        

      

      
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    21. Counterparts. This
      Agreement may be executed in any number of counterparts, each of which when
      executed and delivered shall be deemed to be an original and all of which
      counterparts when taken together shall constitute but one and the same
      instrument.

     

    22. Rules
      of Construction. The
      rules
      of construction which require the terms of an agreement to be construed most
      strictly against the drafter of such and agreement are hereby waived and
      relinquished by each party.

     

    23. Further
      Assurances. From
      and
      after the date hereof the parties agree to take or cause to be taken such
      further action and executed, deliver and file such further documents and
      instruments as the other party may reasonably request from time to time to
      effectuate the intent and purposes of this Agreement.

     

    IN
      WITNESS WHEREOF,
      the
      parties hereto have duly executed this Agreement the day and year first above
      written.

     

    
      	Solar
              Thin Films, Inc.
	 	 	 	 
	By:	/s/
              Peter Lewis
	 	 	
              Name:

            	
              Peter
                Lewis

            
	 	 	
              Title:

            	
              Chief
                Executive Officer

            

    

     

    
      
        	Solar
                Thin Power, Inc.
	 	 	 	 
	By:	
                /s/
                  Robert Rubin

              
	 	 	
                Name:

              	
                Robert
                  Rubin

              
	 	 	
                Title:

              	
                Chief
                  Financial Officer

              

      

    

     

    
      
        
        

      

      
        7SECURITY
      AGREEMENT

    

    This
      SECURITY AGREEMENT, dated as of February 11, 2008 (this “Agreement”),
      is
      among
      Solar
      Thin Films, Inc., a Delaware corporation, having its principal offices located
      at 25 Highland Blvd., Dix Hills, New York 11746 (the
      “Debtor”), and
      Solar
      Thin Power, Inc., a Nevada corporation, having its principal offices located
      at
      25 Highland Blvd., Dix Hills, New York 11746 (together with its successors
      and
      assigns, the “Secured
      Party”),
      which
      Secured Party is the holder of the Debtor’s Secured Term Note, issued on
      February 11, 2008 in the aggregate original principal amount of $2,000,000
      (the
“Note”).

    

    W
      I T N E S S E T H:

    

    WHEREAS,
      pursuant to the Note, the Lender has agreed to extend the loan to the Debtor
      evidenced by the Note, a copy of which is annexed hereto as Exhibit
      A;

     

    WHEREAS,
      the Debtor intends to utilize the proceeds of the loan in order to fund the
      acquisition of up to a 15% interest in the Weihai Blue Star Terra Photovoltaic
      Co. Ltd. (the “Blue Star Joint Venture”). 

    

    WHEREAS,
      in order to induce the Secured Party to extend the loans evidenced by the Note,
      the Debtor has agreed to execute and deliver to the Secured Party this Agreement
      and to grant the Secured Party a security interest, in the proceeds of the
      Debtor’s equity interest in the Blue Star Joint Venture to secure the prompt
      payment, performance and discharge in full of all of the Debtor’s obligations
      under the Note.

    

    NOW,
      THEREFORE, in consideration of the agreements herein contained and for other
      good and valuable consideration, the receipt and sufficiency of which is hereby
      acknowledged, the parties hereto hereby agree as follows:

    

    1. Certain
      Definitions.
      As used
      in this Agreement, the following terms shall have the meanings set forth in
      this
      Section 1. 

    

    (a) “Collateral”
means
      the collateral in which the Secured Party is granted a security interest by
      this
      Agreement and which shall include the proceeds
      of any and all equity interests, whether now held or hereinafter acquired by
      the
      Debtor in the Blue Star Joint Venture, up to a maximum interest of 15%.

     

    2. Grant
      of Security Interest in Collateral.
      As an
      inducement for the Secured Party to extend the loan as evidenced by the Note
      and
      to secure the complete and timely payment, performance and discharge in full,
      as
      the case may be, of all obligations under the Note, the Debtor hereby
      unconditionally and irrevocably pledges, grants and hypothecates to the Secured
      Party a security interest in and to, a lien upon, and a right of set-off
      against, all of its respective right, title and interest of whatsoever kind
      and
      nature in and to the Collateral (a “Security
      Interest”).
      To
      the extent there is at any time more than one Secured Party hereunder, the
      Collateral will secure the obligations under the Note to the Secured Party
      on a
      pari passu basis, based on the then outstanding amount of such obligations
      under
      the Note.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3. Representations,
      Warranties, Covenants and Agreements of the Debtor.
      The
      Debtor represents and warrants to, and covenants and agrees with, the Secured
      Party as follows:

    

    (a)
      The
      Debtor has the requisite corporate, partnership, limited liability company
      or
      other power and authority to enter into this Agreement and otherwise to carry
      out its obligations hereunder. The execution, delivery and performance by each
      Debtor of this Agreement and the filings contemplated therein have been duly
      authorized by all necessary action on the part of such Debtor and no further
      action is required by such Debtor. This Agreement has been duly executed by
      each
      Debtor. This Agreement constitutes the legal, valid and binding obligation
      of
      each Debtor, enforceable against each Debtor in accordance with its terms except
      as such enforceability may be limited by applicable bankruptcy, insolvency,
      reorganization and similar laws of general application relating to or affecting
      the rights and remedies of creditors and by general principles of
      equity.

     

    (b)
      The
      Debtor is the sole owner of the equity interest underlying the Collateral,
      free
      and clear of any liens, security interests, encumbrances, rights or claims,
      and
      is fully authorized to grant the Security Interest. There is not on file in
      any
      governmental or regulatory authority, agency or recording office an effective
      financing statement, security agreement, license or transfer or any notice
      of
      any of the foregoing (other than those that will be filed in favor of the
      Secured Party pursuant to this Agreement) covering or affecting any of the
      Collateral. Except as pursuant to this Agreement, as long as this Agreement
      shall be in effect, the Debtor shall not execute and shall not knowingly permit
      to be on file in any such office or agency any other financing statement or
      other similar document or instrument (except to the extent filed or recorded
      in
      favor of the Secured Party pursuant to the terms of this
      Agreement).

    

    (c)
      No
      written claim has been received by the Debtor that the Collateral or Debtor's
      use of the Collateral violates the rights of any third party. There has been
      no
      adverse decision to the Debtor's claim of ownership rights in or exclusive
      rights to use the Collateral in any jurisdiction or to the Debtor's right to
      keep and maintain such Collateral in full force and effect, and there is no
      proceeding involving said rights pending or, to the best knowledge of the
      Debtor, threatened before any court, judicial body, administrative or regulatory
      agency, arbitrator or other governmental authority.

    

    (d)
      The
      Debtor shall at all times maintain its books of account and records relating
      to
      the equity interest underlying the Collateral at its principal place of business
      (except when temporarily kept at the offices of its attorneys or accountants)
      and may not relocate such books of account unless it delivers to the Secured
      Party at least 30 days prior to such relocation written notice of such
      relocation and the new location thereof (which must be within the United
      States).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (e)
      This
      Agreement creates in favor of the Secured Party a valid, security interest
      in
      the Collateral, securing the payment and performance of the obligations under
      the Note. All security interests created hereunder in any Collateral may be
      perfected by the shares underlying the Collateral being placed in escrow with
      the escrow agent pursuant to the terms of the Escrow Agreement, a copy of which
      is annexed hereto as Exhibit B. Except for the
      delivery of the certificates and other instruments provided in Section
      2,
      no
      action is necessary to create, perfect or protect the security interests created
      hereunder. Without limiting the generality of the foregoing, no consent of
      any
      third parties and no authorization, approval or other action by, and no notice
      to or filing with, any governmental authority or regulatory body is required
      for
      (i) the execution, delivery and performance of this Agreement, (ii) the creation
      or perfection of the Security Interests created hereunder in the Collateral
      or
      (iii) the enforcement of the rights of the Secured Party hereunder.

     

    (f)
      The
      execution, delivery and performance of this Agreement by the Debtors do not
      (i)
      violate any of the provisions of any Organizational Documents of the Debtor
      or
      any judgment, decree, order or award of any court, governmental body or
      arbitrator or any applicable law, rule or regulation applicable to the Debtor
      or
      (ii) conflict with, or constitute a default (or an event that with notice or
      lapse of time or both would become a default) under, or give to others any
      rights of termination, amendment, acceleration or cancellation (with or without
      notice, lapse of time or both) of, any agreement, credit facility, debt or
      other
      instrument (evidencing the Debtor's debt or otherwise) or other understanding
      to
      which the Debtor is a party or by which any property or asset of the Debtor
      is
      bound or affected. If any, all required consents (including, without limitation,
      from stockholders or creditors of the Debtor) necessary for the Debtor to enter
      into and perform its obligations hereunder have been obtained.

    

    (g)
      All of
      the shares underlying the Collateral are validly issued, fully paid and
      nonassessable, and the Debtor is the legal and beneficial owner of the shares
      underlying the Collateral, free and clear of any lien, security interest or
      other encumbrance except for the security interests created by this
      Agreement.
      The
      Debtor shall cause the security interest of the Secured Party to be duly noted
      in its corporate books and records. 

     

    (h)
      The
      Debtor shall at all times maintain the Security Interests provided for hereunder
      as valid and perfected first priority liens and security interests in the
      Collateral in favor of the Secured Party until this Agreement and the Security
      Interests hereunder shall be terminated pursuant to Section 8 hereof. Each
      Debtor hereby agrees to use commercially reasonable efforts to defend the same
      against the claims of any and all persons and entities and to safeguard and
      protect all Collateral for the account of the Secured Party. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (i)
      The
      Debtor will not transfer, pledge, hypothecate, encumber, license, sell or
      otherwise dispose of any of the Collateral without first
      providing written notice to the escrow agent pursuant to Section 1.4 of the
      Escrow Agreement.

    

    (j)
      The
      Debtor shall, within ten (10) days of obtaining knowledge thereof, advise the
      Secured Party promptly, in sufficient detail, of any material adverse change
      in
      the Collateral, and of the occurrence of any event which would have a material
      adverse effect on the value of the Collateral or on the Secured Party’s security
      interest therein. 

     

    (k)
      The
      Debtor shall take all steps reasonably necessary to diligently pursue and seek
      to preserve, enforce and collect any rights, claims, causes of action and
      accounts receivable in respect of the Collateral.

    

    (l)
      The
      Debtor shall promptly notify the Secured Party in sufficient detail upon
      becoming aware of any attachment, garnishment, execution or other legal process
      levied against any Collateral and of any other information received by such
      Debtor that would have a material adverse effect on the value of the Collateral,
      the Security Interest or the rights and remedies of the Secured Party
      hereunder.

    

    (m)
      All
      information heretofore, herein or hereafter supplied to the Secured Party by
      or
      on behalf of any Debtor with respect to the Collateral is accurate and complete
      in all material respects as of the date furnished.

    

    (n)
      Each
      Debtor was organized and remains organized solely under the laws of the state
      set forth next to such Debtor’s name in Schedule
      D
      attached
      hereto, which Schedule
      D
      sets
      forth each Debtor’s organizational identification number or, if any Debtor does
      not have one, states that one does not exist

     

    4. Defaults.
      The
      following events shall be “Events
      of Default”:

     

    (a)
      The
      occurrence of an Event of Default under the Note;
      or

    

    (b)
      Any
      representation or warranty of the Debtor in this Agreement shall prove to have
      been incorrect in any material respect when made.

    

    
      
        5.
          Rights
          and Remedies Upon Default.
          

      

    

    

    (a)
      Upon
      the
      occurrence of any Event of Default and at any time thereafter, the Secured
      Party
      shall have the right to exercise all of the remedies conferred under Section
      3.2
      of the Note.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b)
      The
      Debtor shall comply with any applicable law in connection with a disposition
      of
      Collateral and such compliance will not be considered adversely to affect the
      commercial reasonableness of any sale of the Collateral. The Debtor shall sell
      the shares underlying the Collateral in accordance with Section 1.4 of the
      Escrow Agreement.

    

    6. Applications
      of Proceeds.
      The
      proceeds of any sale of shares underlying the Collateral made in accordance
      with
      Section 1.4 of the Escrow Agreement, shall
      be
      first applied to any obligations then outstanding under the Note. Including
      accrued but unpaid interest. If,
      upon
      the sale of the Shares, the proceeds thereof are insufficient to pay all amounts
      to which the Debtor is obligated under the note, including accrued but unpaid
      interest, the Debtor will remain liable for the deficiency pursuant to the
      terms
      of the Note. If the sale of the Shares results in proceeds sufficient to satisfy
      the Debtor’s then outstanding obligations under the Note, the Debtor shall be
      entitled to any excess proceeds. 

     

    7. Security
      Interests Absolute.
      All
      rights and all obligations of the parties hereunder, shall be absolute and
      unconditional, irrespective of: (a) any lack of validity or enforceability
      of
      this Agreement, the Note, the Security Agreement, the Escrow Agreement or any
      agreement entered into in connection with the foregoing, or any portion hereof
      or thereof; (b) any change in the time, manner or place of payment or
      performance of, or in any other term of, all or any of the obligations under
      the
      Note, or any other amendment or waiver of or any consent to any departure from
      the Note or any other agreement entered into in connection with the foregoing;
      (c) any exchange, release or nonperfection of any of the Collateral, or any
      release or amendment or waiver of or consent to departure from any other
      collateral for, or any guarantee, or any other security, for all or any of
      the
      obligations under the Note; (d) any action by the Secured Party to obtain,
      adjust, settle and cancel in its reasonable discretion any insurance claims
      or
      matters made or arising in connection with the Collateral; or (e) any other
      circumstance which might otherwise constitute any legal or equitable defense
      available to the Debtor, or a discharge of all or any part of the Security
      Interests granted hereby. 

    

    8. Term
      of Agreement.
      This
      Agreement and the Security Interests shall terminate on the date on which all
      payments under the Note have been indefeasibly paid or otherwise satisfied
      in
      full.

    

    9. Notices.
      Any
      demand upon or notice to the Debtors hereunder shall be effective when delivered
      by hand or when properly deposited in the mails postage prepaid, or sent by
      telex, answerback received, or electronic facsimile transmission, receipt
      acknowledged, or delivered to a telegraph company or overnight courier, in
      each
      case addressed to the Debtor at the address shown below or such other address
      as
      the Debtors may advise the Secured Party in writing. Any notice by the Debtors
      to the Secured Party shall be given as aforesaid, addressed to the Secured
      Party
      at the address shown below or such other address as the Secured Party may advise
      the Debtors in writing.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              Secured Party:

            	
              Solar
                Thin Power, Inc.

            
	 	
              25
                Highland Blvd.

            
	 	
              Dix
                Hills, NY 11746

            
	 	 
	
              Debtor:

            	
              Solar
                Thin Films, Inc.

            
	 	
              25
                Highland Blvd.

            
	 	
              Dix
                Hills, NY 11746

            

    

    

    10. Miscellaneous.

    

    (a)
      No
      course
      of dealing between the Debtor and the Secured Party, nor any failure to
      exercise, nor any delay in exercising, on the part of the Secured Party, any
      right, power or privilege hereunder or under the Notes shall operate as a waiver
      thereof; nor shall any single or partial exercise of any right, power or
      privilege hereunder or thereunder preclude any other or further exercise thereof
      or the exercise of any other right, power or privilege.

    

    (b)
      All
      of
      the rights and remedies of the Secured Party with respect to the Collateral,
      whether established hereby or by the Note, the Security Agreement, the Escrow
      Agreement or by any other agreements, instruments or documents or by law shall
      be cumulative and may be exercised singly or concurrently.

    

    (c)
      This
      Agreement,
      together with the exhibits and schedules hereto, the Note, the Security
      Agreement, the Escrow Agreement and the related agreements contemplated hereby
      and thereby contain the entire understanding of the parties with respect to
      the
      subject matter hereof and supersede all prior agreements and understandings,
      oral or written, with respect to such matters, which the parties acknowledge
      have been merged into this Agreement and the exhibits and schedules
      hereto.
      No
      provision of this Agreement may be waived, modified, supplemented or amended
      except in a written instrument signed, in the case of an amendment, by the
      Debtor and the Secured Party or, in the case of a waiver, by the party against
      whom enforcement of any such waived provision is sought. 

    

    (d)
      If
      any
      term, provision, covenant or restriction of this Agreement is held by a court
      of
      competent jurisdiction to be invalid, illegal, void or unenforceable, the
      remainder of the terms, provisions, covenants and restrictions set forth herein
      shall remain in full force and effect and shall in no way be affected, impaired
      or invalidated, and the parties hereto shall use their commercially reasonable
      efforts to find and employ an alternative means to achieve the same or
      substantially the same result as that contemplated by such term, provision,
      covenant or restriction. It is hereby stipulated and declared to be the
      intention of the parties that they would have executed the remaining terms,
      provisions, covenants and restrictions without including any of such that may
      be
      hereafter declared invalid, illegal, void or unenforceable.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (e)
      No
      waiver
      of any default with respect to any provision, condition or requirement of this
      Agreement shall be deemed to be a continuing waiver in the future or a waiver
      of
      any subsequent default or a waiver of any other provision, condition or
      requirement hereof, nor shall any delay or omission of any party to exercise
      any
      right hereunder in any manner impair the exercise of any such
      right.

    

    (f) This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their successors and permitted assigns. The Debtor may not assign this Agreement
      or any rights or obligations hereunder without the prior written consent of
      the
      Secured Party (other than by merger). The Secured Party may assign any or all
      of
      its rights under this Agreement to any Person to whom the Secured Party assigns
      or transfers the Note, provided such transferee agrees in writing to be bound,
      with respect to the transferred Note, by the provisions of this Agreement that
      apply to the “Secured Party.”

    

    (g)
      Each
      party shall take such further action and execute and deliver such further
      documents as may be necessary or appropriate in order to carry out the
      provisions and purposes of this Agreement.

    

    (h)
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this Agreement shall be governed by and construed and enforced in accordance
      with the internal laws of the State of New York, without regard to the
      principles of conflicts of law thereof. The Debtor agrees that all proceedings
      concerning the interpretations, enforcement and defense of the transactions
      contemplated by this Agreement, the Security Agreement, the Escrow Agreement
      and
      the Note (whether brought against a party hereto or its respective affiliates,
      directors, officers, shareholders, partners, members, employees or agents)
      shall
      be commenced exclusively in the state and federal courts sitting in the City
      of
      New York, Borough of Manhattan. The Debtor hereby irrevocably submits to the
      exclusive jurisdiction of the state and federal courts sitting in the City
      of
      New York, Borough of Manhattan for the adjudication of any dispute hereunder
      or
      in connection herewith or with any transaction contemplated hereby or discussed
      herein, and hereby irrevocably waives, and agrees not to assert in any
      proceeding, any claim that it is not personally subject to the jurisdiction
      of
      any such court or that such proceeding is improper. Each party hereto hereby
      irrevocably waives personal service of process and consents to process being
      served in any such proceeding by mailing a copy thereof via registered or
      certified mail or overnight delivery (with evidence of delivery) to such party
      at the address in effect for notices to it under this Agreement and agrees
      that
      such service shall constitute good and sufficient service of process and notice
      thereof. Nothing contained herein shall be deemed to limit in any way any right
      to serve process in any manner permitted by law. Each party hereto hereby
      irrevocably waives, to the fullest extent permitted by applicable law, any
      and
      all right to trial by jury in any legal proceeding arising out of or relating
      to
      this Agreement or the transactions contemplated hereby. If any party shall
      commence a proceeding to enforce any provisions of this Agreement, then the
      prevailing party in such proceeding shall be reimbursed by the other party
      for
      its reasonable attorney’s fees and other reasonable costs and expenses incurred
      with the investigation, preparation and prosecution of such
      proceeding.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (i)
      This
      Agreement may be executed in any number of counterparts, each of which when
      so
      executed shall be deemed to be an original and all of which taken together
      shall
      constitute one and the same Agreement. In the event that any signature is
      delivered by facsimile transmission, such signature shall create a valid binding
      obligation of the party executing (or on whose behalf such signature is
      executed) the same with the same force and effect as if such facsimile signature
      were the original thereof.

    

    (j)
      The
      Debtor shall indemnify, reimburse and hold harmless the Secured Party, and
      each
      of their respective partners, members, shareholders, officers, directors,
      employees and agents (and any other persons with other titles that have similar
      functions) (collectively, “Indemnitees”) from and against any and all losses,
      claims, liabilities, damages, penalties, suits, costs and expenses, of any
      kind
      or nature, (including fees relating to the cost of investigating and defending
      any of the foregoing) imposed on, incurred by or asserted against such
      Indemnitee in any way related to or arising from or alleged to arise from this
      Agreement or the Collateral, except any such losses, claims, liabilities,
      damages, penalties, suits, costs and expenses which result from the gross
      negligence or willful misconduct of the Indemnitee as determined by a final,
      nonappealable decision of a court of competent jurisdiction. This
      indemnification provision is in addition to, and not in limitation of, any
      other
      indemnification provision in the Note, the Security Agreement, the Escrow
      Agreement or any other agreement, instrument or other document executed or
      delivered in connection herewith or therewith.

    

    [SIGNATURE
      PAGES FOLLOW]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the parties hereto have caused this Security
      Agreement to be duly executed on the day and year first above
      written.

    

    DEBTOR:

    

    SOLAR
      THIN FILMS, INC.

    

    
      	
              By:

            	
              /s/
                Peter Lewis

            
	 	
              Name:
                Peter Lewis

            
	 	
              Title:
                Chief Executive Officer

            
	 	 
	
              SECURED
                PARTY:

            
	 
	
              SOLAR
                THIN POWER, INC.

            
	 	 
	
              By:

            	
              /s/
                Robert Rubin

            
	 	
              Name:Robert
                Rubin

            
	 	
              Title:Chief
                Financial Officer

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