Document:

Exhibit
10.2

 

NOTE

	$700,000.00	October 4, 2012

 

FOR VALUE RECEIVED, the undersigned, THERMOENERGY
CORPORATION, a Delaware corporation (“ThermoEnergy”), THERMOENERGY POWER SYSTEMS, LLC, a Delaware limited
liability company (“ThermoEnergy Power Systems”) and CASTION CORPORATION, a Massachusetts corporation
(“CASTion”, and together with ThermoEnergy and ThermoEnergy Power Systems, the “Borrowers”),
HEREBY UNCONDITIONALLY PROMISE TO PAY TO THE ORDER OF C13 THERMO LLC, a Delaware limited liability company (the “Lender”),
in lawful money of the United States of America and in immediately available funds on the Maturity Date, or such earlier date as
may be provided in that certain Loan Agreement, dated of even date herewith (as the same may be amended, modified, supplemented,
extended or restated from time to time, the “Loan Agreement”), by and among the Borrowers and the Lender,
the lesser of either: (a) the principal amount of Seven Hundred Thousand and 00/100 Dollars ($700,000.00), or (b) the aggregate
unpaid principal amount of all Loans advanced by the Lender to the Borrowers pursuant to the terms of the Loan Agreement. Subject
to the provisions of Section 2.5(a) of the Loan Agreement, the principal amount of the Note shall not accrue interest.

 

This Note is issued pursuant and subject
to the terms and conditions of the Loan Agreement, and the holder hereof is entitled to, and shall have, all of the benefits of
the Loan Agreement, and all other agreements, instruments, guarantees and other documents executed and delivered in connection
therewith and herewith. All capitalized terms not defined herein but defined in the Loan Agreement shall have the meanings given
to such terms in the Loan Agreement.

 

This Note is secured as provided in the
Security Documents. Reference is hereby made to the Security Documents for a description of the properties and assets in which
a security interest has been granted, the nature and extent of the security, the terms and conditions upon which the security interests
were granted and the rights of the holder of this Note in respect thereof.

 

Upon the occurrence and during the continuance
of any one or more Events of Default, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately
due and payable, all as provided in the Loan Agreement.

 

All parties now and hereafter liable with
respect to this Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive presentment, demand, protest
and all other notices of any kind.

 

The Lender and/or its assigns is hereby
authorized to record all amounts owing by the Borrowers, all of which shall be evidence by this Note, and all repayments thereof,
in its books and records in accordance with its usual practice, such books and records constituting prima facie evidence of the
accuracy of the information contained therein; provided, however, that the failure of the Lender and/or its assigns
to record such information shall not affect any Borrower’s obligations.

 

This Note shall be binding upon the Borrowers
and their respective successors and assigns, and shall inure to the benefit of the Lender and its successors, assigns, endorsees
and transferees.

 

    	- 1 -

    	 

    

 

THE BORROWERS AND THE LENDER HEREBY WAIVE
THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS NOTE, ANY OF THE OTHER
LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN OR THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.

 

This Note and the other Loan Documents
shall be construed in accordance with and governed by, the laws of The Commonwealth of Massachusetts, without giving effect to
the conflict of laws principles thereof.

 

[THE REMAINDER OF THIS PAGE IS
LEFT BLANK INTENTIONALLY]

 

    	- 2 -

    	 

    

 

IN WITNESS WHEREOF, the undersigned has
executed this Note under its seal as of the date first written above.

 

	 	THERMOENERGY CORPORATION
	 	THERMOENERGY POWER SYSTEMS, LLC
	 	CASTION CORPORATION
	 	 	 
	 	By:	/s/ Teodor Klowan, Jr.
	 	 	Name: Teodor Klowan, Jr.
	 	 	Title: CFO / Treasurer

 

    	- 3 -Exhibit
10.3

 

PLEDGE AND SECURITY AGREEMENT

 

This PLEDGE AND SECURITY AGREEMENT (this
“Agreement”) is made as of October 4, 2012, by and among: (a) THERMOENERGY CORPORATION, a Delaware corporation
(“ThermoEnergy”), (b) THERMOENERGY POWER SYSTEMS, LLC, a Delaware limited liability company (“ThermoEnergy
Power Systems”), (c) CASTION CORPORATION, a Massachusetts corporation (“CASTion”, and together
with ThermoEnergy and ThermoEnergy Power Systems, the “Borrowers”) and (d) C13 THERMO LLC, a Delaware
limited liability company (the “Lender”).

 

All capitalized terms not defined herein
but defined in that certain Loan Agreement, dated of even date herewith (as the same may be amended, modified, supplemented, extended
or restated, from time to time, the “Loan Agreement”) by and among the Borrowers
and the Lender, shall have the meanings given to such terms in the Loan Agreement.

 

Preliminary Statements:

 

WHEREAS, the Borrowers
have requested that the Lender enter into the Loan Agreement and to make certain Loans to the
Borrowers, all as more particularly described in the Loan Agreement; and

 

WHEREAS, it is a condition precedent to
the effectiveness of the Loan Agreement and to the obligation of the Lender to make such Loans that the Borrowers
enter into this Agreement;

 

NOW, THEREFORE, in order to induce the Lender
to enter into the Loan Agreement and to make such Loans to the Borrowers, and in consideration
thereof and in consideration of the mutual covenants herein contained, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Borrowers hereby agree
with the Lender, as follows:

 

SECTION
1.          DEFINITIONS; USE OF TERMS.

 

1.1           Definitions.
As used in this Agreement, the following terms shall have the meanings given to such terms in the Uniform Commercial Code in effect
in The Commonwealth of Massachusetts on the date hereof: “Commercial Tort Claims,” “Deposit
Accounts,” “Documents,”“Farm Products,” “Fixtures,”
“Goods,” “Health-Care-Insurance Receivables,” “Instruments,” “Letters
of Credit,” “Letter of Credit Rights,” “Money,” “Payment Intangibles,”
“Records,” “Securities Intermediary,” “Software,” “State”
and “Supporting Obligations.” The following terms shall have the meanings given to such terms as
set forth below:

 

“Accounts”:
 all “accounts” as that term is defined in the UCC, and to the extent not included in such definition, shall
also mean and include any right to payment of a monetary obligation, whether or not earned by performance, (a) for property that
has been or is to be sold, leased, licensed, assigned, or otherwise disposed of, (b) for services rendered or to be rendered, (c)
for a policy of insurance issued or to be issued, (d) for a secondary obligation incurred or to be incurred, (e) for energy provided
or to be provided, (f) for the use or hire of a vessel under a charter or other contract, (g) arising out of the use of a credit
or charge card or information contained on or for use with the card, or (h) as winnings in a lottery or other game of change operated
or sponsored by a State, governmental unit of a State, or person licensed or authorized to operate the game by a State or governmental
unit of a State (including without limitation, (i) all Health-Care-Insurance Receivables and other accounts receivable, and (ii)
all debts, and other forms of obligations or indebtedness whether now owned or hereafter acquired).

 

    	 

    	 

    

 

“Capital Stock”:
any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership or membership interests in a Person (other than a corporation) and any and all warrants or options
to purchase any of the foregoing.

 

“Chattel Paper”:
all “chattel paper” as that term is defined in the UCC, and to the extent not included in such definition, shall
also mean and include any record that evidences both a monetary obligation and a security interest in specific Goods, any security
interest in specific Goods and Software used in the Goods, any security interest in specific Goods and license of Software used
in the Goods, any lease of specific Goods, or any lease of specific Goods and license of Software used in the Goods (including
without limitation, all electronic chattel paper (as defined in the UCC) and all tangible chattel paper (as defined in the UCC)).

 

“Contract”:
 with respect to an Account, any agreement relating to the terms of payment or the terms of performance thereof, including,
without limitation, (a) all rights of a Borrower to receive moneys due and to become due to it thereunder or in connection therewith,
(b) all rights of a Borrower to damages arising out of, or for, breach or default in respect thereof and (c) all rights of a Borrower
to perform and to exercise all remedies thereunder.

 

“Copyright Licenses”:
 any written agreement naming a Borrower as licensor or licensee, granting any right under any Copyright (including, without
limitation, the grant of rights to manufacture, distribute, exploit and sell materials derived from any Copyright).

 

“Copyrights”:
(a) all copyrights arising under the laws of the United States, any other country or any political subdivision thereof, whether
registered or unregistered and whether published or unpublished, all registrations and recordings thereof, and all applications
in connection therewith, including, without limitation, all registrations, recordings and applications in the Copyright Office,
and (ii) the right to obtain all renewals thereof.

 

“Copyright Office”:
the United States Copyright Office or any other federal governmental agency which may hereafter perform its functions.

 

“Equipment”:
all “equipment” as that term is defined in the UCC, and to the extent not included in such definition, shall also
mean and include all machinery, furniture and motor vehicles.

 

“Foreign Subsidiary”:
any Subsidiary that is organized under the laws of any jurisdiction outside the United States.

 

“General Intangibles”:
 all “general intangibles” as that term is defined in the UCC, and to the extent not included in such definition,
shall also mean and include any Payment Intangibles, Software, franchise agreements or rights to know-how, any trade secrets, product
or service development ideas and designs, advertising commercials, renderings, strategies and plans, blueprints, architectural
drawings, site location, personnel and franchisee information, proprietary information, contracts with distributors, and any similar
items, all interest rate, foreign currency or similar agreements and general intangibles attributable to the Capital Stock of each
Subsidiary.

 

“Intellectual Property”:
 all rights, title, interests, priorities and privileges relating to any and all intellectual property, whether arising under
federal, state or foreign laws or otherwise (including, without limitation, the Copyrights, the Copyright Licenses, the Patents,
the Patent Licenses, the Trademarks and the Trademark Licenses, and all rights to sue at law or in equity for any infringement
or other impairment thereof, including the right to receive all proceeds and damages therefrom).

 

    	-2-

    	 

    

 

“Inventory”:
all “inventory” as that term is defined in the UCC, and to the extent not included in such definition, shall also mean
and include all raw materials and other materials and supplies, work-in-process and finished goods and any products made or processed
therefrom and all substances, if any, commingled therewith or added thereto.

 

“Investment Property”:
all “investment property” as that term is defined in the UCC, and to the extent not included in such definition,
shall also mean and include all stock (including, without limitation, all Pledged Stock), bonds, debentures, securities, treasury
bills, certificates of deposit, mutual or money market fund shares, bills, notes (including, without limitation, all Pledged Notes),
evidences of indebtedness or other obligations issued by any Person (including, without limitation, federal government of the United
States or any agency thereof), whether in registered, bearer or other form, and whether certificated or uncertificated, in book-entry
or other form.

 

“Issuers”:
(a) the Persons identified in Section 3 of the Master Disclosure Schedule attached hereto as the issuers of the
Pledged Notes; (b) the Persons identified in Section 4 of the Master Disclosure Schedule attached hereto as the issuers
of the Pledged Stock; and (c) any other Subsidiaries of a Borrower created or acquired after
the date hereof the equity of which is required to be pledged by Section 2 of this Agreement and/or Section 6.10
of the Loan Agreement.

 

“License”:
any Copyright License, Patent License or Trademark License.

 

“Master Disclosure
Schedule”: the Master Disclosure Schedule attached hereto and incorporated herein by reference.         

 

“Patent License”:
all agreements, whether written or oral, providing for the grant by a Borrower of any right to manufacture, use or sell any
invention covered by a Patent.

 

“Patents”:
(a) all letters patent of the United States or any other country and all reissues and extensions thereof and (b) all applications
for letters patent of the United States or any other country and all divisions, continuations and continuations-in-part thereof.

 

“Pledged Notes”:
 all promissory notes listed in Section 3 of the Master Disclosure Schedule attached hereto, and, if requested
by the Lender, any other promissory note issued to or held by a Borrower (other than promissory
notes issued in connection with extensions of trade credit by a Borrower in the ordinary course
of business).

 

“Pledged Stock”:
 the shares of Capital Stock listed in Section 4 of the Master Disclosure Schedule attached hereto, together
with all stock certificates, options or rights of any nature whatsoever that may be issued or granted by any Issuer to a
Borrower and that are required by this Agreement or the Loan Agreement to be pledged hereunder while this Agreement is in effect.

 

    	-3-

    	 

    

 

“Proceeds”:
 all “proceeds” as that term is defined in the UCC, and to the extent not included in such definition, shall also
mean and include (a) any and all proceeds of any insurance, indemnity, warranty, guaranty or
letter of credit payable to a Borrower, from time to time with respect to any of the Collateral,
(b) all payments (in any form whatsoever) paid or payable to a
Borrower from time to time in connection with any taking of all or any part of the Collateral by any Governmental Authority or
any Person acting under color of Governmental Authority, (c) all judgments in favor of a
Borrower in respect of the Collateral, (d) all dividends or other income from the Investment
Property, collections thereon or distributions or payments with respect thereto and (e) all other
amounts from time to time paid or payable or received or receivable under or in connection with any of the Collateral.

 

“PTO”:
the United States Patent and Trademark Office or any other federal governmental agency which may hereafter perform its functions.

 

“Securities Act”:
 the Securities Act of 1933, as amended from time to time.

 

“Trademark License”:
 any agreement, written or oral, providing for the grant by or to a Borrower of any right to use any Trademark.

 

“Trademarks”:
 (a) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade dress, trade
styles, service marks, designs, logos and other source or business identifiers, and the goodwill of the business associated therewith,
including customer lists, license rights, advertising materials and all other business assets which uniquely reflect the goodwill
of the business, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications
in connection therewith, whether in the PTO or in any similar office or agency of the United States, or any State thereof, or any
other country, and (b) all renewals thereof.

 

“UCC”: 
the Uniform Commercial Code as from time to time in effect in The Commonwealth of Massachusetts; provided, however, that
if by reason of mandatory provisions of law, the perfection or the effect of perfection or non-perfection of the security interest
in any Collateral or the availability of any remedy hereunder is governed by the Uniform Commercial Code as in effect on or after
the date hereof in any other jurisdiction, then the term “UCC” shall mean the Uniform Commercial Code as in effect
in such other jurisdiction for purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection
or availability of such remedy.

 

1.2           Use
of Terms; Exhibits. The use of the singular of terms which are defined in the plural shall mean and refer to any one of them;
and pronouns used herein shall be deemed to include the singular and the plural and all genders. The use of the connective “or”
is not intended to be exclusive; the term “may not” is intended to be prohibitive and not permissive; use of “includes”
and “including” is intended to be interpreted as expansive and amplifying and not as limiting in any way. All exhibits
to this Agreement are incorporated herein.

 

SECTION
2.          PLEDGE; GRANT OF
SECURITY INTEREST.

 

As security for the prompt and complete
payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations, each
Borrower hereby pledges and grants to the Lender a continuing first priority security interest in all of the present and future
rights, title and interests of such Borrower in and to the following property, and each item
thereof, all whether now or hereafter existing, or owned or acquired by such Borrower, or now
or hereafter arising or due or to become due, wherever such property may be located, together with all substitutions for, replacements
of, additions to, accessions to, and products, Proceeds and records of any and all of the following (collectively, the “Collateral”):

 

    	-4-

    	 

    

 

(a)          all
Accounts;

 

(b)          all
Inventory;

 

(c)          all
Equipment;

 

(d)          all
Fixtures;

 

(e)          all
Contracts;

 

(f)          all
Chattel Paper;

 

(g)          all
Documents;

 

(h)          all
Instruments;

 

(i)          all
Investment Property (including all Pledged Stock and Pledged Notes);

 

(j)          all
Money and all Deposit Accounts;

 

(k)         all
General Intangibles;

 

(l)          all
Letters of Credit;

 

(m)         all
Supporting Obligations (including all Letters of Credit Rights);

 

(n)          all
Commercial Tort Claims;

 

(o)          all
Intellectual Property and Software;

 

(p)          all
Proceeds, products, rents, issues, profits and returns of and from any of the foregoing; and

 

(q)          all
other items of tangible and intangible personal property of any and every kind and description which are not otherwise described
herein.

 

SECTION
3.          GENERAL REPRESENTATIONS AND WARRANTIES.

 

Each Borrower
hereby represents and warrants as follows:

 

3.1           Power
and Authority. Such Borrower has the power and authority and the legal right to execute and
deliver, to perform its obligations under, and to grant the Lien on the Collateral pursuant to, this Agreement and has taken all
necessary actions to authorize its execution, delivery and performance of, and grant of the Lien on the Collateral pursuant to,
this Agreement.

 

3.2           Master
Disclosure Schedule. All of the information contained in the Master Disclosure Schedule attached hereto is true, correct
and complete in all material respects.

 

3.3           Name;
Chief Executive Office.

 

(a)          The
name of such Borrower set forth in the first paragraph of this Agreement is the true, correct
and complete legal name of such Borrower, and such Borrower
has not done business under, or used, any other name during the past five (5) years, except as otherwise described in Section
1.2 of the Master Disclosure Schedule attached hereto.

 

    	-5-

    	 

    

 

(b)          The
chief executive office and principal place of business of such Borrower is located at the address
listed in Section 2.1 of the Master Disclosure Schedule attached hereto.

 

(c)          All
of the Inventory and Equipment of such Borrower (other than mobile vehicles) is kept at the locations
listed in Section 2.2 of the Master Disclosure Schedule attached hereto.

 

3.4           Title;
No Other Liens. Except for Permitted Liens, such Borrower owns each item of Collateral free
and clear of any and all Liens or claims of others. No security agreement, financing statement or other public notice with respect
to all or any part of the Collateral is on file or of record in any public office, except such as may have been filed in favor
of the Lender, pursuant to this Agreement or as may be permitted pursuant to the Loan Agreement.

 

3.5           First
Priority of Security Interest. The Lien on the Collateral granted to Lender hereunder constitutes (a) a legal and valid Lien
on all the Collateral securing the payment and performance of the Obligations, and (b) subject to (i) the filings of UCC-1 financing
statements with respect to each Borrower using the name and address and filed in the jurisdiction set forth in Sections 1.2
and 2.1, respectively, of the Master Disclosure Schedule naming the Lender as the
secured party, (ii) solely with respect to the Deposit Accounts, entry into the Control Agreements, and (iii) the filings of the
Patent Security Agreements and the Trademark Security Agreements with the PTO, a perfected first priority Lien on all the Collateral
(to the extent such Lien can be perfected by such filings and other actions). The Lien granted to the Lender pursuant to this Agreement
in and on the Collateral will at all times constitute a perfected, first priority continuing security interest therein, prior to
all other Liens on the Collateral except for Permitted Liens.

 

3.6           Farm
Products. None of the Collateral constitutes, or is the Proceeds of, Farm Products.

 

3.7           Investment
Property.

 

(a)          The
shares of Pledged Stock listed on Section 4 of the Master Disclosure Schedule attached hereto constitute all of the
issued and outstanding shares or interests of all classes of the Capital Stock of each Subsidiary and all of the classes of Capital
Stock of ThermoEnergy Power Systems and CASTion. All of the shares of the Pledged Stock have been duly and validly issued and are
fully paid and nonassessable.

 

(b)          To
the best knowledge of such Borrower, each of the Pledged Notes pledged by such
Borrower hereunder constitutes a valid and legally enforceable obligation of the other obligor in respect thereof or parties thereto,
enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditors’ rights generally.

 

(c)          Such
Borrower is the record and beneficial owner of, and has good and marketable title to, the Investment Property pledged by it hereunder,
free of any and all Liens or options in favor of, or claims of, any other Person, except for Permitted Liens.

 

    	-6-

    	 

    

 

3.8           Intellectual
Property.

 

(a)          Set
forth in Section 5 of the Master Disclosure Schedule attached hereto is a true, correct and complete list of all
registered Copyrights and Copyright Licenses owned by such Borrower in its own name as of the
date hereof. Set forth in Section 6 of the Master Disclosure Schedule attached hereto is a true, correct and complete list
of all Patents and Patent Licenses owned by such Borrower in its own name as of the date hereof.
Set forth in Section 7 of the Master Disclosure Schedule attached hereto is a true, correct and complete list of
all registered Trademarks and Trademark Licenses owned by such Borrower in its own name as of
the date hereof. Set forth in Section 8 of the Master Disclosure Schedule attached hereto is a true, correct and
complete list of all Software owned by such Borrower in its own name as of the date hereof. Except
as set forth in the Master Disclosure Schedule attached hereto, none of the Intellectual Property or Software is the subject
of any licensing or franchise agreement pursuant to which such Borrower is the licensor or franchisor.

 

(b)          Such
Borrower owns, or is licensed to use, all Intellectual Property and Software necessary for the conduct of its business as currently
conducted. No material claim has been asserted and is pending by any Person challenging or questioning the use by such
Borrower of any of its Intellectual Property or Software or the validity or effectiveness of any of its Intellectual Property or
Software, nor does such Borrower know of any valid basis for any such claim. The use by such
Borrower of the Intellectual Property and Software does not infringe the rights of any Person in any material respect. No holding,
decision or judgment has been rendered by any Governmental Authority which would limit, cancel or question the validity of, or
such Borrower's rights in, any Intellectual Property or Software in any respect that could reasonably
be expected to have a Material Adverse Effect.

 

SECTION
4.          GENERAL COVENANTS.

 

Each Borrower
hereby covenants and agrees as follows:

 

4.1           Changes
in Name and Locations. Such Borrower will not (a) change its name, identity, organizational structure, jurisdiction of organization,
chief executive office or place where its business records are kept, (b) move any tangible Collateral to a location other than
those set forth in the Master Disclosure Schedule attached hereto, or (c) merge into or consolidate with any other entity,
unless in each case it shall have given the Lender at least thirty (30) days prior written notice thereof and all filings and other
actions to maintain the perfection of the security interest granted hereby shall have been made.

 

4.2           Maintenance
of Records. Such Borrower will keep and maintain at its own cost and expense satisfactory
and complete records of the Collateral, including, without limitation, a record of all payments received and all credits granted
with respect to the Accounts, Contracts and Licenses. Such Borrower will, upon request of the
Lender, mark its books and records pertaining to the Collateral to evidence this Agreement and the security interests granted hereby.

 

4.3           Right
of Inspection. Except as otherwise provided in the Loan Agreement, the Lender shall at all reasonable times have full and free
access during normal business hours and upon reasonable prior notice to all the books, correspondence and records of such
Borrower, and the Lender and their respective representatives may, at such times, examine the same, take extracts therefrom and
make photocopies thereof, and such Borrower agrees to render to the Lender, at such Borrower’s
cost and expense, such clerical and other assistance as may be reasonably requested with regard thereto. Except as otherwise provided
in the Loan Agreement, and upon reasonable prior notice to such Borrower, the Lender and its
representatives shall have the right, during normal business hours to enter into and upon any premises where any of the Inventory
or Equipment is located for the purpose of inspecting the same, observing its use or otherwise protecting its interests therein.

 

    	-7-

    	 

    

 

4.4           Payment
of Taxes and Other Amounts. Such Borrower will pay promptly when due all taxes, assessments
and governmental charges or levies imposed upon the Collateral or in respect of its income or profits therefrom, as well as all
claims of any kind (including, without limitation, claims for labor, materials and supplies) against or with respect to the Collateral
which have a reasonable likelihood of adverse determination, except that no such tax, assessment, levy or charge need be paid if
the validity or amount thereof is being contested in good faith by appropriate proceedings.

 

4.5           Maintenance
and Use of Properties. Such Borrower will safeguard, protect and preserve the Collateral
for the benefit of the Lender, will keep the Collateral free from any Lien (other than the Permitted Liens), will keep all tangible
property constituting part of the Collateral in good working order and repair, will preserve all beneficial contract rights, will
take commercially reasonable steps to collect all Accounts, and will not waste or destroy the Collateral or any part thereof; and
such Borrower will otherwise preserve, maintain and protect its rights and keep its properties
and assets in good repair, working order and condition, and capable of identification, and make (or cause to be made) all needful
and proper repairs or renewals, additions and improvements thereto and replacements thereof, and shall use its assets only in the
ordinary course of business and in compliance with all applicable law.

 

4.6           Notices
Pertaining to Collateral. Such Borrower will notify the Lender of the occurrence of any event
which could reasonably be expected to have a material adverse effect on the aggregate value of the Collateral or, with respect
to any material portion of the Collateral, on the Liens created hereunder. Such Borrower will notify the Lender within five (5)
Business Days of any material change to the information set forth on the Master Disclosure Schedule and shall supplement the Master
Disclosure Schedule from time to time as shall be necessary for the representations and warranties contained in Section 3
of this Agreement to be true and correct in all material respects as of the date made or deemed made, including pursuant to the
Loan Agreement and the Master Disclosure Schedule shall be deemed modified by such supplement upon delivery thereof to the Lender.

 

4.7           Liens
on Collateral. Such Borrower will defend the Collateral against, and will take such
other commercially reasonable action as is necessary to remove, any Lien or claim on or to the Collateral (other than Permitted
Liens) and will use commercially reasonable efforts to defend the right, title and interest of the Lender in and to any of the
Collateral against the claims and demands of all Persons whomsoever.

 

4.8           Maintenance
of Insurance.

 

(a)          Such
Borrower will maintain insurance, at all times, with financially sound and reputable companies as are reasonably satisfactory to
the Lender, in such amounts and against such risks as are customarily insured against by businesses of similar size operating in
a similar line of business in a similar area, and consistent with sound business practice (including casualty insurance covering
the Collateral and other property of such Borrower against the hazards of fire, flood, sprinkler
leakage, burglary, theft, pilferage, loss in transit, those hazards covered by extended coverage, and such other coverages as the
Lender may reasonably require), all such insurance to be in such form, for such periods and with such companies as shall be reasonably
acceptable to the Lender. All premiums thereon shall be paid by such Borrower and if such Borrower
fails to do so, the Lender may at its option (but without obligation) procure such insurance and charge the cost to such Borrower’s
account, provided, however, that any such payment by the Lender shall not constitute satisfaction of such
Borrower’s obligations with respect to payment hereunder, or a waiver by the Lender of any Event of Default with respect
to such non-payment.

 

    	-8-

    	 

    

 

(b)          All
such insurance policies shall provide, in form and substance reasonably satisfactory to the Lender, that: (i) any loss thereunder
shall be payable to the Lender as lender’s loss payee (first to the Lender and then to such Borrower,
as their interests may appear); (ii) any such payment to the Lender shall be made by an instrument to the Lender alone and not
to such Borrower and the Lender jointly; and (iii) no cancellation or modification of such policy
shall be effective without at least thirty (30) days prior written notice to the Lender. If any insurance losses are paid by check,
draft or other instrument payable to such Borrower and the Lender jointly, the Lender may endorse
such Borrower’s name thereon and do such other things as the Lender may deem advisable
to reduce the same to cash. All loss recoveries received by the Lender upon any such insurance shall be applied to the Obligations,
whether or not matured, in such order as the Lender in its sole discretion may determine. Any surplus shall be paid by the Lender
to such Borrower or applied as may be otherwise required by law.

 

(c)          Certificates
of insurance of, and upon request of the Lender, the original policies of, all such casualty insurance policies and endorsements
thereto, shall be delivered to the Lender; and, upon request, satisfactory evidence of general liability, products liability, workers’
compensation and other insurance coverage, in form and substance satisfactory to the Lender, shall be furnished to the Lender,
in each case within three (3) Business Days of the Lender’s written request therefor. Such
Borrower shall advise the Lender of each claim made by such Borrower under any policy of insurance
which covers the Collateral and will permit the Lender, to the exclusion of such Borrower, at
the Lender’s option in each instance, to conduct the adjustment of each such claim.

 

4.9           Maintenance
of Perfected Liens; Further Documentation. At any time and from time to time, upon the written request of the Lender, and at
the sole expense of such Borrower, such Borrower will promptly
and duly execute and deliver such further instruments and documents and take such further action as the Lender may reasonably request
for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted (including,
without limitation, (a) filing any financing or continuation statements under the Uniform Commercial Code in effect in any jurisdiction
with respect to the Liens created hereby; (b) obtaining governmental and other third party consents and approvals; (c) obtaining
waivers from mortgagees and landlords; (d) in the case of Intellectual Property, executing and filing with the PTO, the Copyright
Office or any similar office or agency in any other country or any political subdivision thereof, such short forms of Security
Agreements, each in form and substance reasonably satisfactory to the Lender, as the Lender may reasonably request; (e) entering
into control agreements granting Lender control over the deposit accounts, securities accounts and commodities accounts, if any,
of the Borrowers and any Subsidiary in form and substance reasonably satisfactory to the Lender; and (f) in the case of Investment
Property, and any other relevant Collateral, taken action necessary to enable the Lender to obtain “control” (within
the meaning of the UCC). Such Borrower also hereby authorizes the Lender to file (after written
notice to such Borrower) any such financing or continuation statement without the signature of
such Borrower to the extent permitted by applicable law; provided, however, that any failure
to give any such notice shall not affect the validity or effectiveness of any such filing. A carbon, photographic or other reproduction
of this Agreement shall be sufficient as a financing statement for filing in any jurisdiction.

 

4.10         Costs
and Expenses. The Borrowers jointly and severally agree to pay all reasonable out-of-pocket
expenses (including without limitation reasonable attorneys’ fees and costs, and reasonable consulting, accounting, appraisal,
investment banking and similar professional fees and charges) incurred by the Lender in connection with the enforcement of rights
under any of the Loan Documents against the Borrowers. The covenants contained in this Section
4.10 shall survive payment or satisfaction in full of all other Obligations.

 

    	-9-

    	 

    

 

4.11         Certificates.
Concurrently with the execution and delivery of this Agreement, the Borrowers shall deliver to Lender each original certificate
evidencing the Pledged Stock (which certificates shall constitute “security certificates” (as defined in the UCC)),
together with an undated stock, limited liability company membership or partnership interest power, as applicable, covering each
such certificate, duly executed in blank.

 

SECTION
5.          SPECIFIC COVENANTS REGARDING CERTAIN COLLATERAL.

 

Each Borrower
hereby covenants and agrees as follows:

 

5.1           Inventory.
If any Inventory is in the possession or control of any landlords, warehousemen or agents, such Borrower
shall notify them of the Lender’s security interest therein, and upon the occurrence and during the continuance of any Event
of Default, such Borrower shall, at the Lender’s reasonable request, instruct them to hold the same for the Lender’s
account and subject to the Lender’s instructions. The Lender shall enjoy all of the rights and remedies of a secured party
in the Inventory and shall be subrogated to all guaranties and security now or which may in the future be held by such
Borrower. The Lender shall not be liable in any manner for exercising or refusing or failing to exercise any such rights.

 

5.2           Investment
Property.

 

(a)          If
such Borrower shall become entitled to receive or shall receive any stock certificate (including,
without limitation, any certificate representing a stock dividend or a distribution in connection with any reclassification, increase
or reduction of capital or any certificate issued in connection with any reorganization), option or rights in respect of the Capital
Stock of any Issuer or any other Investment Property, whether in addition to, in substitution of, as a conversion of, or in exchange
for, any shares of the Pledged Stock, or otherwise in respect thereof, such Borrower shall accept
the same as the agent of the Lender, hold the same in trust for the Lender and promptly deliver (or cause to be delivered) the
same to the Lender in the exact form received, duly indorsed by such Borrower to the Lender,
if required, together with an undated stock power covering such certificate duly executed in blank by such
Borrower and with, if the Lender so requests, signature guaranteed, to be held by the Lender, subject to the terms hereof,
as additional collateral security for the Obligations.

 

(b)          Without
the prior written consent of the Lender, such Borrower will not (i) sell, assign, transfer, exchange,
or otherwise dispose of, or grant any option with respect to, the Investment Property or Proceeds thereof (except pursuant to a
transaction not prohibited by the Loan Agreement) or (ii) create, incur or permit to exist any Lien or option in favor of, or any
claim of any Person with respect to, any of the Investment Property or Proceeds thereof, or any interest therein, except for Permitted
Liens.

 

(c)          So
long as no Event of Default has occurred and is continuing, such Borrower shall be permitted
to receive all cash dividends paid by the relevant Issuer to the extent permitted in the Loan Agreement in respect of the Pledged
Stock, and all payments made in respect of the Pledged Notes, and to exercise all voting and corporate rights with respect to the
Investment Property; provided, however, that such Borrower agrees that it shall
not vote in any way that would result in any violation of any provision of the Loan Documents.

 

    	-10-

    	 

    

 

(d)          Upon
the occurrence and during the continuance of any Event of Default, (i) the Lender shall have the right to receive any and all cash
dividends, payments or other Proceeds paid in respect of the Investment Property and make application thereof to the Obligations
in such order as the Lender may determine, and (ii) any or all of the Investment Property may be registered in the name of the
Lender or its nominee, and, subject to the terms of this Agreement, the Lender or its nominee may thereafter exercise (A) all voting,
corporate and other rights pertaining to such Investment Property at any meeting of shareholders of the relevant Issuer or Issuers
or otherwise and (B) any and all rights of conversion, exchange and subscription and any other rights, privileges or options pertaining
to such Investment Property as if it were the absolute owner thereof (including, without limitation, the right to exchange at its
discretion any and all of the Investment Property upon the merger, consolidation, reorganization, recapitalization or other fundamental
change in the corporate structure of any Issuer, or upon the exercise by such Borrower or the
Lender of any right, privilege or option pertaining to such Investment Property, and in connection therewith, the right to deposit
and deliver any and all of the Investment Property with any committee, depositary, transfer agent, registrar or other designated
agency upon such terms and conditions as the Lender may determine), all without liability except to account for property actually
received by it, and except for its gross negligence or willful misconduct, but the Lender shall have no duty to such
Borrower to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay
in so doing.

 

(e)          Such
Borrower hereby authorizes and instructs each Issuer of any Investment Property pledged by such Borrower
hereunder to comply with any instruction received by it from the Lender upon the occurrence and during any Event of Default, without
any other or further instructions from such Borrower, and such Borrower
agrees that each Issuer shall be fully protected in so complying, to the extent such instruction is in compliance with applicable
law.

 

(f)          The
rights of the Lender hereunder shall not be conditioned or contingent upon the pursuit by the Lender of any right or remedy against
any other Person which may be or become liable in respect of all or any part of the Obligations or against any collateral security
thereof, guarantee therefore or right of offset with respect thereto. The Lender shall not be liable for any failure to demand,
collect or realize upon all or any part of the Collateral or for any delay in doing so, nor shall the Lender be under any obligation
to sell or otherwise dispose of any Collateral upon the request of such Borrower or any other
Person or to take any other action whatsoever with regard to the Collateral or any part thereof. The Lender agrees to release promptly
to such Borrower any dividends, cash, securities, instruments and other property paid, payable or otherwise distributed in respect
of the Collateral which it may receive under Section 5.2(d) hereof if, prior to the occurrence of an acceleration of any
of the Obligations, all Defaults and Events of Default have been waived or are no longer continuing.

 

5.3           Patents
and Trademarks.

 

(a)          Each
Borrower (either itself or through licensees) will, except with respect to any Trademark that such Borrower
shall reasonably determine is of immaterial economic value to it, (i) continue to use each Trademark on each and every trademark
class of goods applicable to its current line as reflected in its current catalogs, brochures and price lists in order to maintain
such Trademark in full force free from any claim of abandonment for non-use, (ii) maintain as in the past the quality of products
and services offered under such Trademark, (iii) use reasonable efforts to employ such Trademark with the appropriate notice of
registration, (iv) not adopt or use any mark which is confusingly similar or a colorable imitation of such Trademark unless within
thirty (30) days after such use or adoption, the Lender shall obtain a perfected security interest in such mark pursuant to this
Agreement and (v) not (and not permit any licensee or sublicensee thereof to) do any act or knowingly omit to do any act whereby
any Trademark may become invalidated.

 

    	-11-

    	 

    

 

(b)          No
Borrower will, except with respect to any Patent that such Borrower shall reasonably determine
is of immaterial economic value to it, do any act, or omit to do any act, whereby any Patent may become abandoned or dedicated.

 

(c)          Each
Borrower will notify the Lender promptly if it knows that any material registered application relating to any Patent, or any application
or registration relating to any Trademark, may become abandoned or dedicated, or of any adverse determination or material development
(including, without limitation, the institution of, or any such determination or development in, any proceeding in the PTO or any
court or tribunal in any country) regarding such Borrower’s ownership of any Patent or
Trademark or its right to register the same or to keep and maintain the same.

 

(d)          Whenever
such Borrower, either by itself or through any agent, employee, licensee or designee, shall file
an application for any Patent or for the registration of any Trademark with the PTO or any similar office or agency in any other
country or any political subdivision thereof, such Borrower shall report any such filing to the
Lender concurrently with the delivery of a Loan Request, pursuant to Section 4.3 of the Loan Agreement. Upon reasonable
request of the Lender, such Borrower shall execute and deliver any and all agreements, instruments,
documents, and papers as the Lender may request to evidence the Lender’s security interest in any Patent or Trademark and
the goodwill and general intangibles of such Borrower relating thereto or represented thereby,
and such Borrower hereby appoints and constitutes the Lender its attorney-in-fact to execute
and file all such writings for the foregoing purposes, all acts of such attorney being hereby ratified and confirmed, such power
being coupled with an interest and irrevocable until the Obligations are paid in full.

 

(e)          Each
Borrower, except with respect to any Patent or Trademark that such Borrower shall reasonably
determine is of immaterial economic value to it and except with respect to any Trademark that is not registrable, will take all
reasonable and necessary steps, including, without limitation, in any proceeding before the PTO, or any similar office or agency
in any other country or any political subdivision thereof, to maintain and pursue each application (and to obtain the relevant
registration or Patent) and to maintain each Patent and each registration of Trademarks, including, without limitation, filing
of applications for renewal, affidavits of use and affidavits of incontestability when appropriate and paying necessary and appropriate
maintenance fees.

 

(f)          In
the event that any Patent or material registered Trademark included in the Collateral is infringed, misappropriated or diluted
by a third party in a manner which could reasonably be expected to have a material adverse effect on the business, assets or financial
condition of such Borrower, such Borrower shall promptly notify the Lender after it learns thereof
and shall, unless such Borrower shall reasonably determine that such Patent or Trademark is of immaterial economic value to such
Borrower, take such actions as such Borrower shall reasonably deem appropriate under the circumstances to protect such Patent or
Trademark (including but not limited to taking action to promptly sue for infringement, misappropriation or dilution, to seek injunctive
relief where appropriate and to recover any and all damages for such infringement, misappropriation or dilution).

 

5.4           Letter-of-Credit
Rights. With respect to the Letter of Credit referenced and defined in the Loan Agreement, and any other Letter of Credit that
any Borrower or Subsidiary is at any time a beneficiary under now existing or hereafter issued the Borrower shall promptly notify
the Lender thereof and the Borrower shall, at the request of the Lender, either (i) arrange for the issuer and any confirmer nominee
of such Letter of Credit to consent to an assignment to the Lender of the proceeds of any drawing under the Letter of Credit or
(ii) arrange for the Lender to become the transferee beneficiary of such Letter of Credit.

 

    	-12-

    	 

    

 

5.5           Copyrights.
Each Borrower (a) will employ the Copyright for each material published work with such notice
of copyright as may be required by law to secure copyright protection and (b) will not do any act or knowingly omit to do any act
whereby any material Copyright may become invalidated and

 

(i)          will
not do any act, or omit to do any act, whereby any material Copyright may become injected into the public domain;

 

(ii)         shall
notify the Lender immediately if it knows, or has reason to know, that any material Copyright may become injected into the public
domain or of any adverse determination or development (including, without limitation, the institution of, or any such determination
or development in, any court or tribunal in the United States or any other country) regarding such Borrower’s ownership of
any such Copyright or its validity;

 

(iii)        will
take all necessary steps as it shall deem appropriate under the circumstances in its reasonable discretion, to maintain and pursue
each application (and to obtain the relevant registration) and to maintain each registration of each material Copyright owned by
such Borrower (including, without limitation, filing of applications for renewal, where necessary); and

 

(iv)        will
promptly notify the Lender of any material infringement of any material Copyright of such Borrower of which it becomes aware and
will take such actions as it shall reasonably deem appropriate under the circumstances to protect such Copyright, including, where
appropriate, the bringing of suit for infringement, seeking injunctive relief and seeking to recover any and all damages for such
infringement.

 

Whenever such
Borrower, either by itself or through any agent, employee, licensee or designee, shall file an application for any Copyright
or for the registration of any Copyright with the Copyright Office or any similar office or agency in any other country or any
political subdivision thereof, such Borrower shall report such filing to the Lender concurrently
with the delivery of a Loan Request, pursuant to Section 4.3 of the Loan Agreement. Upon request of the Lender, such
Borrower shall execute and deliver any and all agreements, instruments, documents, and papers as the Lender may request
to evidence the Lender’s security interest in any Copyright, and such Borrower hereby appoints
and constitutes the Lender its attorney-in-fact to execute and file all such writings for the foregoing purposes, all acts of such
attorney being hereby ratified and confirmed. Such power being coupled with an interest and is irrevocable until all of the Obligations
are paid and performed in full.

 

SECTION
6.          POWER OF ATTORNEY.

 

6.1           Appointment
and Powers. Each Borrower hereby irrevocably constitutes and appoints the Lender and any
officer or agent thereof, with full power of substitution, as such Borrower’s true and
lawful attorney-in-fact, coupled with an interest, with full power and authority to act in place and stead of each Borrower and
in the name of such Borrower or it Lender’s own name, from time to time in Lender’s discretion, for the purpose of
carrying out the terms of this Agreement, to take any and all appropriate actions and to execute any and all documents and instruments
which may be necessary or desirable to the foregoing, each Borrower hereby gives the Lender the power and right, on behalf of each
Borrower, without notice or assent (in each case at the sole risk, cost and expense of such Borrower but for the benefit of the
Lender) to do the following:

 

    	-13-

    	 

    

 

(a)          at
any time or times (whether or not an Event of Default has occurred), (i) to supplement and amend from time to time Sections
5, 6, 7 and 8 of the Master Disclosure Schedule attached hereto to include any new or additional
registered Trademarks, Patents, registered Copyrights, Software and Licenses of such Borrower,
(ii) to file and record without such Borrower’s signature, or to sign such
Borrower’s name to and file and record, financing statements, security agreements with the PTO and Copyright Office,
and any other instruments (including applications to name the Lender as lienholder on any motor vehicle or other certificates of
title) in order to perfect or maintain the perfection and priority of the security interest granted to the Lender hereunder, (iii)
to pay or discharge any taxes or Liens levied or placed on or threatened against the Collateral, to effect any repairs or any insurance
called for by the terms of the Loan Documents and to pay all or any part of the premiums thereof and the costs thereof, and (iv)
to take such other reasonable actions as the Lender may deem necessary in order to perfect or maintain the perfection or priority
of the Lender’s security interest in the Collateral or any portion thereof; and

 

(b)          in
addition to the actions described above, at any time or times after the occurrence and during the continuance of any Event of Default,
(i) to protect the Lender’s security interest in the Collateral or any portion thereof; (ii) to receive and open such
Borrower’s mail, remove therefrom and hold or apply any Collateral and dispose of such mail or turn over such mail
(other than such Collateral) to such Borrower or any trustee in bankruptcy, receiver, assignee
for benefit of creditors or other legal representatives to whom the Lender determines to be the appropriate recipient thereof;
(iii) to endorse the name of such Borrower in favor of the Lender upon any and all checks, drafts,
notes, money orders, acceptances and other items, Instruments and forms of payment, and to sign and endorse the name of such
Borrower on, and receive as secured party, any of the Collateral; (iv) to ask or demand for, collect, receive payment of
and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of
any Collateral; (v) to sign such Borrower’s name to any invoices, schedules, freight or
express receipts, bills of lading, and other Documents or writings of a similar or different nature, relating to the Collateral;
(vi) to sign the name of such Borrower on any schedules and assignments of Accounts, and on notices
of assignment, financing statements and other public records relating to the Collateral, and on any notice to such
Borrower’s account debtors for verification of the Accounts; (vii) to prosecute, defend, compromise or release any
action relating to the Collateral; (viii) to notify the post office authorities to change the address for delivery of such
Borrower’s mail to an address designated by the Lender, and to sign change of address forms therefore; (ix) to sign
such Borrower’s name in proofs of claim in bankruptcies of account debtors, notices of
lien, claims of mechanics liens, or assignments or releases of any Liens securing the Accounts; (x) to take any such actions as
may be necessary to obtain payment of any letter of credit of which such Borrower is a beneficiary;
(xi) to repair, manufacture, assemble, complete, package, deliver, alter or supply goods, if any, necessary to fulfill in whole
or in part the purchase order of any customer of such Borrower; (xii) to notify any Persons of
the rights and interests of the Lender, of the applicable Events of Default and of any matter relating to Collateral; (xiii) to
execute, in connection with any sale provided for in the UCC or otherwise, any endorsements, assignments, bills of sale, or other
instruments of conveyance or transfer or other agreements with respect to the Collateral; (xiv) to take any and all other actions
(including, without limitation, the right to sue in the name of such Borrower or the Lender to
collect upon any and all Collateral and to settle, adjust or compromise any and all claims with respect to Collateral including
insurance claims) as the Lender shall deem necessary or expedient to convert the Collateral into cash; and (xv) otherwise to exercise
any rights or remedies of the Lender hereunder or under any of the Loan Documents, or otherwise under agreement or applicable law,
including the UCC.

 

    	-14-

    	 

    

 

6.2           Ratification
and Indemnification Under Power of Attorney. In connection with all powers of attorney set forth in this Agreement, the Lender
shall have full power to exercise such powers as fully and effectually as such Borrower might
or could do; such Borrower agrees that the Lender shall not be obligated to exercise any of the
powers authorized herein, and shall be free to exercise or refrain from exercising any of such powers at any time or times in its
absolute discretion, and, if the Lender elects to exercise any of such powers, it shall not be accountable for more than it actually
receives as a result of such exercise of power, and shall not be responsible to such Borrower
except for the Lender’s gross negligence, actual bad faith or willful misconduct; and all powers conferred upon the Lender
by this Agreement, being coupled with an interest, shall be irrevocable until such time as all Obligations have been paid or performed
and the Lender’s agreement, if any, to make advances has terminated.

 

6.3           Performance
By Lender of Borrower’s Obligations. If such Borrower fails to perform or comply with
any of its agreements contained herein and the Lender, as provided for by the terms of this Agreement, shall itself perform or
comply, or otherwise cause performance or compliance, with any agreement, the expense of the Lender incurred in connection with
such performance or compliance, together with interest thereon at the Default Rate, shall be payable by such
Borrower to the Lender on demand and shall constitute Obligations secured hereby.

 

SECTION
7.          EVENTS OF DEFAULT.

 

Upon the occurrence and during the continuance
of one or more Events of Default, any and all Obligations shall become, or may be declared to be, immediately due and payable,
all as provided in the Loan Agreement.

 

SECTION
8.          RIGHTS AND REMEDIES.

 

8.1           General
Remedies. In addition to and without in any way limiting any other rights and remedies available to the Lender under this Agreement
prior to an Event of Default, or any other rights and remedies available to the Lender (whether prior to or after an Event of Default)
under any of the other Loan Documents or under applicable law or in equity, upon and at any time or times after the occurrence
and during the continuance of any Event of Default:

 

(a)          the
Lender may declare and cause all or any portion of the Obligations to be immediately due and payable;

 

(b)          the
Lender shall be entitled to immediate possession of the Collateral or any portion or portions thereof and may enter upon any
Borrower’s premises to take possession thereof; may, without demand of performance or other demand, presentment or notice,
transfer all or any part of the Collateral into the Lender’s name or the name of its nominee or nominees and/or may collect,
receive, appropriate and realize upon the Collateral or any part thereof, and/or may sell, lease, assign, give options to purchase
or otherwise dispose of any of the Collateral in one or more parcels at public or private sales upon such terms and conditions
(including by lease or deferred payment) as it may deem advisable and at such prices as it may deem appropriate, for cash or credit
or for future delivery without assumption of any credit risk and/or may take any other actions as may be available under applicable
law; may require any Borrower to assemble the Collateral and make it available to the Lender
at a place to be reasonably designated by the Lender; or may require any Borrower to deliver
all Records relating to the Collateral to the Lender;

 

    	-15-

    	 

    

 

(c)          the
Lender may enter upon, occupy, and use any premises owned or occupied by any Borrower (or by
any agent of any Borrower at which Collateral is located), and may exclude such
Borrower from such premises or portion thereof as may have been so entered upon, occupied, or used by the Lender; the Lender shall
not be required to remove any of the Collateral from any such premises upon the Lender’s taking possession thereof, and may
render any Collateral unusable to any Borrower; and in no event shall the Lender be liable to
any Borrower for use or occupancy by the Lender of any premises pursuant to this Agreement except
for claims arising out of the Lender’s gross negligence, actual bad faith or willful misconduct, nor for any charge (such
as wages for any Borrower’s employees and utilities) incurred in connection with the Lender’s
exercise of the Lender’s rights and remedies;

 

(d)          the
Lender may take such steps as it deems necessary to protect the Lender’s interest in, and to preserve the Collateral, and
each Borrower agrees to cooperate fully with all of the Lender’s efforts and to take such
actions as the Lender shall direct, all to preserve the Collateral;

 

(e)          the
Lender shall have the rights and remedies of a secured party under the UCC and other applicable laws, the choice and manner of
exercise of any right or remedy being in the Lender’s sole discretion; and, pursuant thereto, the Lender shall have the right
to foreclose the security interest granted in any Collateral by any available judicial procedure and to take possession of and
sell any or all of the Collateral with or without judicial process; the Lender may lease or otherwise dispose of the Collateral,
or may sell the Collateral, or any part thereof, at public or private sales, at any time or place (including any
Borrower’s premises), in one or more sales, at such price or prices, and upon such terms, either for cash, credit or future
delivery, as the Lender may elect, and, except as to that part of the Collateral which is perishable or threatens to decline speedily
in value, or is of the type customarily sold on a recognized market, the Lender shall give the applicable Borrower
reasonable notification of such sale or sales, it being agreed that, in all events, reasonable notification means written notice
mailed to the applicable Borrower at least ten (10) days prior to each such public sale or at
least ten (10) days prior to the date after which any such private sales or other intended dispositions may be made; at any public
sale, and at any private sale to the extent permitted by law, the Lender may (but shall have no obligation to) bid for and become
the purchaser of any Collateral; each Borrower hereby waives any and all rights it may have to
judicial hearing in advance of the enforcement of any of the Lender’s rights hereunder, including the Lender’s right
to take immediate possession of the Collateral; and the Lender may do any of the foregoing or otherwise deal with the Collateral
in its then condition, or following such preparation as the Lender deems advisable, with or without taking possession thereof;
and

 

(f)          the
Lender may treat any or all of the Loan Documents as being in default and may exercise any rights and remedies thereunder as it
shall deem appropriate.

 

8.2           Pledged
Stock. Each Borrower recognizes that the Lender may be unable to effect a public sale of
the Pledged Stock by reason of certain prohibitions contained in the federal and state securities laws, and other applicable laws,
but may be compelled to resort to one or more private sales thereof to a restricted group of purchasers. Each
Borrower agrees that any such private sales may be at prices and other terms less favorable to the seller than if sold at public
sales and that such private sales shall not by reason thereof be deemed to have been made in a commercially unreasonable manner.
The Lender shall be under no obligation to delay a sale of any of the Pledged Stock for the period of time necessary to permit
the Issuer of such securities to register such securities for public sale under the Securities Act, or such other applicable laws,
even if the Issuer would agree to do so. Subject to the foregoing, the Lender agrees that any sale of the Pledged Stock shall be
made in a commercially reasonable manner, and each Borrower agrees to use such
Borrower’s best efforts to cause the Issuer or Issuers of the Pledged Stock contemplated to be sold, to execute and deliver,
and cause the directors and officers of such Issuer to execute and deliver, all such instruments and documents, and to do or cause
to be done all such other acts and things as may be necessary or, in the reasonable opinion of the Lender, advisable to exempt
such Pledged Stock from registration under the provisions of the Securities Act, and to make all amendments to such instruments
and documents which, in the opinion of the Lender, are necessary or advisable, all in conformity with the requirements of the Securities
Act and the rules and regulations of the Securities and Exchange Commission applicable thereto. Each
Borrower further agrees to use such Borrower’s best efforts to cause such Issuer or Issuers
to comply with the provisions of the securities or “Blue Sky” laws of any jurisdiction which the Lender shall designate.

 

    	-16-

    	 

    

 

Each Borrower
further agrees to do or cause to be done all such other acts and things as may be reasonably necessary to make any sales of any
portion or all of the Pledged Stock pursuant to this Section 8.2 valid and binding and in compliance with all Requirements
of Law.

 

8.3           License.
With respect to the Lender’s exercise of rights and remedies hereunder including in connection with any completion of the
sale or other disposition of any of the Collateral, each Borrower hereby grants to the Lender
a nonexclusive irrevocable license (exercisable without payment of royalty or other compensation to any Borrower) to use, license
or sublicense any Copyrights, Patents or Trademarks now owned or hereafter acquired by any Borrower, for any purpose including
the right to apply and affix any trademark, trade name, logo, or the like in which such Borrower
now or hereafter has rights, and any such license, sublicense or other transaction shall be binding upon the Borrowers notwithstanding
any subsequent cure of an Event of Default.

 

8.4           No
Duty of Preservation; Joint Property. The Lender may at all times proceed directly against any
Borrower, or against any other Person responsible for any Obligations, to enforce the payment of the Obligations, and the Lender
shall not be required to take any action of any kind to preserve, collect upon or protect the rights of the Lender or of any other
Person in any Collateral, except as specifically required by the UCC. Without limiting the generality of the foregoing, the Lender
shall not be required to take any action to preserve rights against prior parties in the cases of Instruments or Chattel Paper,
and the Lender may co-mingle any items of Collateral with other property and shall not be required to keep any Collateral identifiable.
In the event any Collateral, including any Deposit Account, is held in joint or common names, the Lender may deal with such Collateral
or any Deposit Account, for all purposes hereunder and under any or all of the Loan Documents, as if belonging to any one, and
no more than one, of such joint or common owners.

 

8.5           Remedies
Not Exclusive. The enumeration of rights and remedies in the Loan Documents is not intended to be exclusive, and they shall
be in addition to and not by way of limitation of such others as the Lender may have under the UCC, other applicable law, and any
and all other Documents, Instruments, agreements or other writings between or among any Borrower,
the Lender or other Persons. The Lender shall, in its sole discretion, determine its choice of rights and remedies and the order
in which they shall be exercised, and which Collateral, if any, is to be proceeded against and in which order. The exercise of
any right or remedy against any Borrower, any other Person or any or all Collateral shall not
preclude the exercise of others or the exercise thereof against such Borrower, any other Persons
or any other Collateral, all of which shall be cumulative. No act, failure or delay by the Lender shall constitute a waiver of
any of its rights and remedies. No single or partial waiver by the Lender or the Lender of any provision of the Loan Documents,
or of any breach or default thereunder, or of any right or remedy which the Lender may have shall operate as a waiver of any other
provision, breach, default, right or remedy or of the same one on a future occasion.

 

8.6           Deficiency.
Each Borrower shall remain liable for any deficiency if the proceeds of any sale or other disposition
of the Collateral are insufficient to pay the Obligations and the reasonable fees and disbursements of any attorneys retained by
the Lender to collect such deficiency and any other expenses incurred in the disposal of the Collateral or incidental to the care
or safekeeping of the Collateral or in any way relating to the Collateral or the rights of the Lender exercised under the Loan
Documents.

 

    	-17-

    	 

    

 

8.7           Requirement
of Law. Notwithstanding any provision contained in this Agreement to the contrary, the exercise of remedies or any power of
attorney granted hereunder with respect to Collateral is subject to any applicable Requirement of Law of any Governmental Authority.
No action will be taken by the Lender hereunder if such action will result in a violation of any applicable Requirement of Law
of any Governmental Authority by any Borrower.

 

SECTION
9.          MISCELLANEOUS.

 

9.1           Survival
of Covenants; Binding Effect. All agreements, representations, covenants and warranties made by the
Borrowers in this Agreement, the other Loan Documents, or in any certificate or other document delivered to the Lender in connection
herewith shall survive the termination of this Agreement and survive the execution and delivery of this Agreement, and shall remain
in full force and effect until all Obligations have been paid in full and satisfied, and the security interest, Lien and rights
granted to the Lender in any Collateral and its rights and remedies hereunder and under the other Loan Documents shall continue
in full force and effect, notwithstanding the fact that Debentures may, from time to time, be in a zero or credit position, until
all Obligations have been satisfied. All the terms and provisions of this Agreement and the other Loan Documents shall be binding
upon, inure to the benefit of and be enforceable by and against the parties hereto and their respective successors and assigns.

 

9.2           Prior
Discussions; Amendments in Writing; Counterparts. This Agreement and all other Loan Documents incorporate all discussions and
negotiations among the Borrowers and the Lender, either express or implied, concerning the matters
included herein and therein, any custom, usage or other writing to the contrary notwithstanding. No such discussions or negotiations
shall limit, modify, or otherwise affect the provisions of the Loan Documents. This Agreement may be amended or modified only in
writing signed by the parties hereto, and in the case of the Lender signed by a duly authorized officer thereof. This Agreement
may be executed in two or more counterparts, each of which shall constitute an original, but such counterparts together shall constitute
one and the same instrument. Any proof of this Agreement shall require production of only one such counterpart.

 

9.3           General
Indemnification. The Borrowers shall, and do hereby, jointly and severally indemnify and
save the Lender harmless from (and agrees to defend the Lender from) any and all liabilities, damages, costs, losses and expenses
(including court costs and attorney’s reasonable fees and expenses) that the Lender may sustain or incur by reason of, relating
to or arising out of the preparation of this Agreement, the defending or protecting of any Collateral or the priority of the Lender’s
interest therein, or in collecting or enforcing the Obligations, or in enforcing any of the Lender’s rights or remedies,
or in the prosecution or defense of any action or proceeding concerning any matter growing out of or connected with this Agreement,
any of the other Loan Documents, the Obligations, the Collateral, or on account of the Lender’s relationship with the
Borrowers, or any other Person responsible for any of the Obligations (each of which may be defended, compromised, settled or pursued
by the Lender with counsel of the Lender’s selection, at the expense of the Borrowers)
except for such claims which have been determined by a court of competent jurisdiction to have arisen out of the Lender’s
actual bad faith, willful misconduct or gross negligence. The within indemnification shall survive termination of this Agreement.
The Borrowers’ obligations under this Section 9.3 constitute part of the Obligations
secured by the security interest created by this Agreement.

 

9.4           Joint
and Several Liability. All of the obligations and liabilities of the Borrowers under this Agreement are joint and several.

 

    	-18-

    	 

    

 

9.5           Notices.
All notices required or permitted hereunder shall be in writing and delivered in accordance with the provisions of the Loan Agreement.

 

9.6           Application
of Proceeds. Subject to the provisions of the Loan Agreement, the Lender shall apply (or change any application previously
made of) the proceeds of any collection, sale or other disposition of the Collateral, or of any other payments received hereunder,
toward the Obligations in such order and manner as the Lender, in its sole discretion, shall determine, any statute (the application
of which may be waived or modified by agreement), customs or practices to the contrary notwithstanding. The
Borrowers shall remain jointly and severally liable to the Lender for any deficiency remaining following such application.

 

9.7           Security
Interest Absolute. All rights of the Lender hereunder, the pledge and grant of a security interest in the Collateral and all
obligations of the Borrowers, shall be absolute and unconditional irrespective of (i) any lack of validity or enforceability of
the Loan Agreement, any agreement with respect to any of the Obligations or any other agreement or instrument relating to any of
the foregoing, (ii) any change in time, manner or place for payment of, or in any other term of, all or any of the Obligations,
or any other amendment or waiver of or any consent to any departure from the Loan Agreement or any other agreement or instrument,
(iii) any exchange, release or non-perfection of any other collateral, or any release or amendment or waiver of or consent to or
departure from any guarantee, for all or any of the Obligations, or (iv) any other circumstances which might otherwise constitute
a defense available to (other than the defense of indefeasible payment), or a discharge of, the Borrowers in respect of the Obligations
or in respect of this Agreement.

 

9.8           Severability.
If any provision of this Agreement or any of the other Loan Documents, or any portion of such provision, or the application thereof
to any Person or circumstance, shall to any extent be prohibited or held invalid or unenforceable, the remainder of this Agreement
and the other Loan Documents or the remainder of such provision and the application thereof to other Persons or circumstances (other
than those as to which it is prohibited or held invalid or unenforceable) shall not be affected thereby, and each term and provision
hereof and of the other Loan Documents shall be valid and enforced to the fullest extent permitted by law. To the extent permitted
by law, the parties hereto waive any provision of law which renders any such provision or the application thereof to any Person
or circumstance prohibited, invalid or unenforceable in any respect.

 

9.9           Headings.
Headings appearing in this Agreement are intended for convenience only and do not constitute, and shall not be interpreted to be,
a part of this Agreement.

 

9.10        Waiver
of Jury Trial. THE COMPANY AND THE LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL
BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE OTHER FINANCING DOCUMENTS OR ANY
OF THE TRANSACTIONS CONTEMPLATED HEREIN OR THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER
COMMON LAW OR STATUTORY CLAIMS.

 

9.11        Governing
Law; Consent to Jurisdiction. This Agreement and the other Loan Documents shall be construed in accordance with and governed
by, the laws of The Commonwealth of Massachusetts, without giving effect to the conflict of laws principles thereof. The Borrowers
and the Lender agree that any suit, action or proceeding against the other arising out of or based upon this Agreement may be instituted
in or removed to a United States Federal or Massachusetts state court located in the city of Boston, and any appellate court from
any thereof, and the Borrowers and the Lender irrevocably submit to the non-exclusive jurisdiction of such courts in any suit,
action or proceeding. The Borrowers and the Lender irrevocably waive, to the fullest extent permitted by law, any objection to
any suit, action or proceeding that may be brought in connection with this Agreement in such courts whether on the grounds of venue,
residence or domicile or on the ground that any such suit, action or proceeding has been brought in an inconvenient forum. The
Borrowers and the Lender agree that final judgment in any such suit, action or proceeding brought in such court shall be conclusive
and binding upon the Borrowers and the Lender and may be enforced in any court to the jurisdiction of which they are subject, by
a suit upon judgment.

 

[THE REMAINDER OF THIS PAGE IS LEFT INTENTIONALLY
BLANK]

 

    	-19-

    	 

    

 

IN WITNESS WHEREOF, the undersigned have
caused this Agreement to be duly executed and delivered under their seals as of the date first above written.

 

	 	BORROWERS:
	 	 
	 	THERMOENERGY CORPORATION
	 	THERMOENERGY POWER SYSTEMS, LLC
	 	CASTION CORPORATION
	 	 	 
	 	By:	/s/ Teodor Klowan, Jr.
	 	 	Name: Teodor Klowan, Jr.
	 	 	Title: CFO / Treasurer

 

	 	LENDER:
	 	 
	 	C13 THERMO LLC
	 	 	 
	 	By:	/s/ Carmen Rosario
	 	 	Name: Carmen Rosario
	 	 	Title: Authorized Person

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00208-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00208-of-00352.parquet"}]]