Document:

BLUE SPHERE CORPORATION 8-K 

 

Exhibit 10.1

 

Execution Copy

 

LONG
TERM MEZZANINE LOAN AGREEMENT

 

This
Long Term Mezzanine Loan Agreement (“Agreement”) is entered into on this 30th day of August
2017 by and between:

 

		1.	Bluesphere
                                         Italy S.R.L, a private limited liability company organized and existing under the
                                         laws of Italy under registration no. MI-2124774, having its registered office at Milan,
                                         Corso G. Matteotti 1, 20121 (MI) and established and owned by BSC (“Borrower”);

 

		2.	Blue
                                         Sphere Corporation, a publicly traded company incorporated under the laws of Nevada,
                                         USA (“BSC”);

 

		3.	Helios
                                         3 Italy Bio-Gas 2 L.P, a limited partnership under formation to be organized under
                                         the laws of the State of Israel partnership number [●] of Hakfar Hayarok Street,
                                         Ramat Hasharon, Israel (“Lender”) by its General Partner, Helios
                                         General 3, LTD (515257749).

 

The
Borrower and the Lender may be referred to as a “Party” separately and the “Parties” jointly.

 

	WHEREAS	The
    Borrower is a special purpose company fully owned (100%) by BSC; and
	 	 
	WHEREAS	The
    Borrower entered into a share purchase agreement with the Seller (as hereinafter defined) dated June 29, 2017, as subsequently
    amended (the “SPA”) for the purchase of 100% of the issued and outstanding share capital (on a fully diluted
    basis) of the SPV (as hereinafter defined), which owns and operates the Plant (as hereinafter defined); and
	 	 
	WHEREAS

         
	The
    Lender is limited partnership whose initial Limited Partner is Helios Energy Investments 3 LP (550262539) (“Helios”)
    and both the Lender’s and Helios’ General Partner is Helios General 3, LTD (Israeli corporation number 515257749);
    and
	 	 
	WHEREAS	As
    of the date hereof, and pursuant to the SPA, the Borrower has paid the Seller an amount of 1,200,000 Euro as first instalment
    of the purchase price (“Partial Consideration Amount”); and
	 	 
	WHEREAS	In
    order to finance the remaining portion of the consideration amount for the transaction contemplated by the SPA, Lender will
    make available the Loan to the Borrower, all in accordance with the terms of this Agreement.

 

    	 

     

    

 

2

 

NOW
THEREFORE, the Parties agree as follows:

 

		1.	DEFINITIONS

 

		1.1.	Capitalised
                                         terms shall have the meanings ascribed to such terms throughout this Agreement and in
                                         addition, the following terms shall have the following meanings:

 

	 	
        Affiliate

         
	(a) In respect of a natural person, the immediate family of such person; and (b) in respect to a legal person other than a natural person, an entity with Control, under the Control of by or under common Control with such person.
	 	 	 
	 	Applicable Law	Any law, treaty, statute, regulation, ordinance, rule, judgement, decision, official order, judicial order, court decision, writ, decree, approval, binding directive, requirement or other governmental restriction whether in effect as of the date hereof or thereafter and in each case as amended, re-enacted or replaced.
	 	 	 
	 	Arbitrator	Adam Eitan or as otherwise agreed between the Parties.
	 	 	 
	 	
        Bank Account

         
	The Borrower’s bank account with Bank Crédit Agricole Cariparma S.p.A. at Milan, account no. [      ].
	 	Bank Account Pledge 	A first-degree fixed pledge over the Bank Account and over the SPV’s Bank Accounts in the standard form provided by the Bank.
	 	 	 
	 	
        Business Day

         
	Any day other than: (a) Friday; (b) Saturday; (c) Sunday; (d) a day on which banking institutions licensed in the State of Israel or in the State of Italy are required or authorised to be closed, nor any day which is recognised by the Bank of Israel as not being a business day.

 

    	 

     

    

 

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	 	Business Plan	
        means:

         

        (a)            on
        or before the effective date of this Agreement, the Financial Model; and

         

        (b)            at
        any time thereafter, the Financial Model as updated, revised, amended or replaced from time to time, and as approved by the Lender
        in writing, all as further detailed under Section ‎10.14 below.

         

	 	Budget Versus Actual Report	A report in a form as shall be agreed mutually upon between the Parties within 90 days of the Loan Closing, for the 12 months period until the date of issuance of the Budget Versus Actual Report setting forth all actual revenues, expenses and cash flow of the SPV and the Borrower versus the budget for the respective period.
	 	 	 
	 	BSC’s Transaction Fee	A fee payable to BSC in accordance with the provisions of Section ‎2.6 herein.
	 	 	 
	 	CANTU Transaction	Acquisition of the holdings of Eneryeco S.r.l. (“Cantu SPV”) which owns and operates a vegetable oil, 990 KWe plant located in Cantù, Lombardia region, Italy of which Borrower has already paid as of the date hereof a sum of 150,000 Euro as a deposit to secure the transaction (“Cantu Deposit”).
	 	 	 
	 	Control	The power, direct or indirect, to direct or cause the direction of the management and policies of an entity whether by voting power, contract or otherwise.

 

    	 

     

    

 

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	 	Distributions 	
        Any payment by the Borrower to any shareholder
        of the Borrower, or any Related Party thereof and including, without limitation:

         

        (a)       any
        dividend or other distribution (in cash or in kind) on or in respect of any of the shareholdings in the Borrower;

         

        (b)       any
        payment or repayment in connection with any loans provided to the Borrower or redemption of any capital notes issued by the Borrower;

         

        (c)        any
        other payment of monies or in respect of any liability under any agreement with the Borrower for any sums owing to a shareholder
        of the Borrower or any Related Party thereof.

         

	 	SPV’s Bank Accounts	
        (i)        Bank:
        Crédit Agricole Cariparma S.p.A.

         

        Account no. [ ]

         

        (ii)       Bank:
        Crédit Agricole Cariparma S.p.A.

         

        Account no. [ ]

	 	 	 
	 	Equity Pledge	The
    pledge over BSC shareholdings in the Borrower (constituting the entire share capital of the Borrower), which shall be registered
    in Italy, in the form attached hereto as Schedule A.
	 	 	 
	 	Event of Default	Any of the events set out in Section ‎12 below.
	 	 	 
	 	Field of Operation	Acting exclusively in the capacity of holding company of SPV and of Eneryeco S.Rr.l. in the event the CANTU Transaction will be completed, including providing of finance for the acquisition of the holding in SPV and the CANTU Transaction, and maintaining the SPV and the CANTU Transaction SPV as sole purpose entities for operating and maintaining the contemplated power plants.
	 	 	 
	 	
        Final Repayment Date

         
	The date falling no later than the earlier of the following: (a) 7 (seven) years from the date of making the Loan available to the Borrower; and (b) the date of expiration of the Feed in Tariff license granted to the Plant.

 

    	 

     

    

 

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	 	First Repayment Date	As defined in Section 4.1 below.
	 	 	 
	 	Government Authority	Any government and/or governmental department, ministry, cabinet, commission, board, bureau, agency, court, tribunal, regulatory authority, instrumentality, judicial, legislative or administrative body or entity, domestic or foreign, federal, national, state, regional, provincial or local, having or exercising jurisdiction over the matter or matters in question.
	 	 	 
	 	Guaranteed Plant Operation Management Agreement	An operation and management agreement duly signed and shall be executed by and between the SPV and the Seller at the SPA Closing, pursuant to which Seller shall grant the SPV operation and management services in connection with the Plant, and guarantee the Plant EBITDA.
	 	 	 
	 	Financial Model	The Financial Model in relation to the Borrower and including the business plan of the Borrower as of the date of the Loan Closing as shall be approved by the Lender.
	 	 	 
	 	SPA Consideration	The consideration to be paid by the Borrower to the Seller pursuant to the SPA upon SPA Closing date in the amount of 2,408,000 Euro (of which Borrower has already paid as of the date hereof a sum of 1,200,000 Euro).
	 	 	 
	 	Interest Rate	As defined in Section 6.1
	 	 	 
	 	Interest Period	As defined in Section ‎6.5.1.

 

    	 

     

    

 

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	 	Loan or Mezzanine Loan	The long term mezzanine loan in the principal amount of 1,600,000 Euro made available to the Borrower from the Lender under this Agreement or (if the context so requires) the principal amount outstanding for the time being of that loan, including the Transaction Fee and BSC’s Transaction Fee (if payable in accordance with the provisions of this Agreement).
	 	 	 
	 	Loan Closing	The closing of the transaction subject matter and utilization of the Loan, according to the procedure set forth in Section ‎3.2 below.
	 	 	 
	 	Loan Closing Date	As defined in Section ‎3.2 ‎3.1.9 below.
	 	 	 
	 	Material Adverse Change	
        Any event, occurrence, change or effect
        of any nature that, individually or in the aggregate, has a material adverse effect on:

         

        (a)     a
        deviation (i.e., decrease) of 10% from the annual free cash flow under the Financial Model on a three-years average basis;

         

        (b)     the ability of the Borrower to perform its material obligations under any Loan Document;

         

        (c)      the
        validity or enforceability of any Loan Document;

         

        (d)      the
        validity, enforceability or priority of any security under the Loan Securities.

         

	 	 	 
	 	Loan Documents 	
        Each of:

         

        (a)      this
        Agreement;

         

        (b)      the
        Loan Securities and the forms for registration thereof;

         

        (c)      the
        Subordination Agreement, attached hereto as Schedule B;

 

    	 

     

    

 

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        (d)     any
        agreement or instrument entered into or executed pursuant to and as expressly contemplated by any of the above agreements; and

         

        (e)     any
        other document designated as such by the written agreement of the Lender and the Borrower.

         

	 	Loan Securities	
        Each of:

         

        (a)     the
        Bank Account Pledge;

         

        (b)     the
        Equity Pledge;

         

        (c)     the
        irrevocable notice regarding Distributions;

         

        (d)     appointment
        of the Participator (pursuant to Section ‎3.2.3 below);

         

        (e)     The
        nomination of the authorized signatories in the Bank Account and the SPV’s Bank Accounts pursuant to Section ‎3.2.2 below.

         

        (f)      Any
        other document designated as such by the written agreement of the Lender and the Borrower.

         

	 	Operation Fee	As defined in Section ‎6.2.
	 	 	 
	 	
        Organisational Documents

         
	Organisational
    documents including without limitation, the memorandum of association, articles of association and shareholders’ agreement,
    joint venture agreement, partnership agreement and general partner governing documents, of such entity, as applicable, attached
    hereto as Schedule C.
	 	 	 
	 	Mandate to Sell	Mandate
    to Sell Agreement attached hereto as Schedule D.	 
	 	 	 
	 	Plant 	A 0.995 Kw plant for the production of electricity from vegetal oil located in Italy, Pavia di Udine (UD), Via Crimea no. 57.

 

    	 

     

    

 

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	 	Prepayment Fee 	As such terms is defined in section ‎5.4.3.
	 	 	 
	 	Project Authorisations	Any authorisations, permits, licences, consents or approvals required to be held in connection with the ownership, operation and maintenance of the Plants.
	 	 	 
	 	Related Party	With respect to any entity, its shareholders, partners, or other owners and any Affiliates thereof;
	 	 	 
	 	Repayment Date	Each quarterly date for the payment of outstanding principal amounts hereunder (together with accrued interest thereon) as set out in Section ‎4.1 below.
	 	 	
	 	Repayment Instalments 	As defined in Section ‎4.1 below.
	 	 	 
	 	Repayment Schedule 	As defined in Section ‎4.1 below.
	 	 	 
	 	
        Security Interests

         
	Any interest or equity of any person (including any right to acquire, option, or right of pre-emption) or any mortgage, charge, pledge, lien, attachment, assignment or any other encumbrance, security interest, arrangement or similar third party right of any nature over or in the property to which such interest relates.
	 	 	 
	 	Seller	Pronto Verde A.G, a company organized under the laws of Switzerland, company identification no. CHE-101.957.390.
	 	 	 
	 	SPV	Futuris Papia S.p.A, a joint stock company organized under the laws of Italy, Tax No. 02593530302.
	 	 	 
	 	SPV Distributions 	
        Any payment by the SPV to any shareholder
        of the SPV, or any Related Party thereof and including, without limitation:

         

        (a)     any
        dividend or other distribution (in cash or in kind) on or in respect of any of the shares held by the Borrower in the SPV;

         

 

    	 

     

    

 

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        (b)     any
        payment or repayment in connection with any loans provided to the Borrower by the SPV or redemption of any capital notes issued
        by the a SPV;

         

        (c)     any
        other payment of monies or in respect of any liability under any agreement with the SPV, for the avoidance of doubt, any sums owing
        to a shareholder of the SPV or any Related Party thereof in its capacity as the provider of general and administrative management
        services.

         

	 	Suggested Business Plan	As defined in Section ‎10.14 below.
	 	 	 
	 	Tax	Any present and future income, value added and other taxes, levies, imposts, deductions, charges and withholdings in the nature of taxes whatsoever (including, without limitation, taxes concerning income, capital gains, sales, value added, franchise, withholding, payroll, employment, national insurance and health, social security, severance, stamp or property tax) together with linkage differentials, interest thereon and penalties with respect thereto, if any, and any payments made on or in respect thereof.
	 	 	 
	 	Tax Deduction	A deduction or withholding for or on account of Tax from a payment hereunder.
	 	 	 
	 	Transaction Fee	A fee payable to the Lender in accordance with the provisions of Section 2.5 herein.
	 	 	 
	 	Transfer	Any transfer, assignment, sale, creation of a Security Interest or other disposition of similar nature.

 

    	 

     

    

 

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	 	Trustee	Fischer Behar Chen Trustees Ltd.

 

		1.2.	Words
                                         and defined terms denoting the singular number include the plural and vice versa
                                         and the use of any gender shall be applicable to all genders.
	 	 	 

		1.3.	The
                                         paragraph headings are for the sake of convenience only and shall not affect the interpretation
                                         of this Agreement.

 

		1.4.	The
                                         recitals and Schedules hereto form an integral part of this Agreement. The following
                                         table sets forth the Schedules to this Agreement:

 

	 	Schedule
    A	Equity
    Pledge 
	 	Schedule
    B	Form
    of Subordination Agreement 
	 	Schedule
    C	Organizational
    Documents of SPV 
	 	Schedule
    D	Mandate
    to Sell
	 	Schedule
    E	Form
    of Borrower’s Officer’s Certificate 
	 	Schedule
    F	Irrevocable
    Instructions Regarding SPV’s Distributions 
	 	Schedule
    G	Financial
    Model 
	 	Schedule
    H	Signatories
    
	 	Schedule
    I	Loan
    and Operation Fee Repayment Schedule

 

		2.	LONG
                                         TERM MEZZANINE LOAN

 

		2.1.	Subject
                                         to the terms of this Agreement, the Lender, by itself or through entities managed by
                                         Helios General 3, ltd, its general partner, shall make available to the Borrower the
                                         Loan in accordance with the terms of this Agreement, and subject to the satisfaction,
                                         or waiver by Lender, of the conditions precedent set out in Section ‎3.1 below.

 

    	 

     

    

 

11 

 

		2.2.	Lender
                                         shall remit the Loan, after withholding the Transaction Fee and the BCS’s Transaction
                                         Fee (as defined below), to the Borrower by wire transfer to the Bank Account not later
                                         than the 1st of September. The Transaction Fee shall be remitted to the Borrower
                                         within 30 days following the closing and the BSC’s Transaction Fee shall be remitted
                                         to the Borrower on 31st December 2017.

 

		2.3.	The
                                         Borrower shall use the Loan solely to finance the remaining portion of the SPA Consideration
                                         payable by Borrower to the Seller pursuant to the SPA and for paying the Transaction
                                         Fee to Lender and the BSC’s Transaction Fee to BSC.

 

		2.4.	Any
                                         additional payments due to the Seller pursuant to the SPA and any other additional cash
                                         investments in the SPV or in the Borrower shall be provided solely by the Borrower and/or
                                         BSC and/or by a third party financing entity and in accordance with the terms of this
                                         Agreement and the Lender shall have no responsibility and/or liability in connection
                                         therewith. The Borrower and BSC hereby undertake and warrant to make all such additional
                                         payments and investment required consummating the transaction with the Seller.

 

		2.5.	Out
                                         of the Loan, the Lender shall be entitled to a Transaction Fee in the amount of 200,000
                                         Euro, which shall be payable (or deductible by the Lender) to the Lender in accordance
                                         with clause 2.2 above; the payment of the Transaction Fee shall be invoiced in several
                                         amounts and by several entities in accordance with Lender’s instructions.

 

		2.6.	Out
                                         of the Mezzanine Loan, 192,000 Euro shall be payable to BSC (“BSC’s Transaction
                                         Fee”), following the elapse of 6 months from the Loan Closing Date, subject
                                         to the fulfilment of the following conditions: (i) the SPV’s semi-annual EBITDA
                                         is at least 95% of 542,000 Euro (“Minimum semi-annual EBITDA”), (ii)
                                         all payments due the Lender have been paid in full on time and (iii) the CANTU Transaction
                                         have been consummated and all condition to closing have been fulfilled. In the event
                                         the SPV’s semi-annual EBITDA will be lower than the Minimum semi-annual EBITDA,
                                         the transaction Fee shall deferred until such time as the trailing 6 months EBITDA is
                                         equal or greater than the Minimum semi-annual EBITDA, subject to all payments due the
                                         Lender have been paid on time and subject to the closing of the CANTU Transaction. Should
                                         the CANTU Transaction was not closed but the Borrower met the Minimum semi-annual EBITDA,
                                         the parties will negotiate in good faith the mechanism to pay BSC the BSC’s Transaction
                                         Fee.

 

    	 

     

    

 

12 

 

		2.7.	Other
                                         than payment of the SPA Consideration and the Transaction Fee and the BSC’s Transaction
                                         Fee and as permitted in this Agreement, the Borrower shall not be entitled to use the
                                         Mezzanine Loan for any other purpose.

 

		3.	CLOSING

 

		3.1.	The
                                         obligations of Lender to consummate the transaction contemplated hereby in relation to
                                         the Mezzanine Loan, are subject to the fulfilment, prior to or at the Closing Date, of
                                         each of the following conditions (any or all of which may be waived in writing by Lender
                                         at its sole discretion):

 

		3.1.1.	The
                                         Lender has reviewed and approved with respect to the SPV: the terms of the investment,
                                         the Financial Model, the due diligence (including conducting its own due diligence if
                                         so desired by the Lender);

 

		3.1.2.	the
                                         representations and warranties of the Borrower were true and correct when made and shall
                                         be true and correct at the Loan Closing as though made again at the Loan Closing Date;

 

		3.1.3.	the
                                         Borrower shall have performed and complied with all obligations and covenants required
                                         by this Agreement to be performed or complied with by it prior to or at the Loan Closing;

 

		3.1.4.	the
                                         Borrower is not in breach of the SPA;

 

		3.1.5.	all
                                         Loan Documents (other than this Agreement, and Loan Securities which shall be completed
                                         no later than 14 Business Days following the Loan Closing Date) have been duly executed
                                         by all parties thereto and shall be delivered simultaneously to the delivery of an executed
                                         copy of this Agreement;

 

		3.1.6.	no
                                         action, proceeding, investigation, regulation or legislation shall have been instituted
                                         or threatened before any Government Authority which to enjoin, restrain, prohibit or
                                         obtain substantial damages in respect of, or which is related to, or arises out of, this
                                         Agreement, or consummation of the transactions contemplated hereby;

 

		3.1.7.	no
                                         Material Adverse Change has occurred between the date of execution of this Agreement
                                         and the Loan Closing Date;

 

    	 

     

    

 

13 

 

		3.1.8.	the
                                         Loan Securities, other than the nomination of the authorized signatories in SPV’s
                                         Bank Accounts have been duly signed and ready to be filed with all relevant Government
                                         Authorities required in order to perfect such Security in accordance with Applicable
                                         Law. Borrower shall deliver to Lender certificates of registration and perfection thereof
                                         no later than 14 Business Days of the Closing Date.

 

		3.1.9.	The
                                         Mandate to Sell and all signed consents and deeds required for the transfer of the shares
                                         of the Borrower, which are subject to the Equity Pledge will be executed within 14 Business
                                         Days from the Loan Closing Date.

 

		3.2.	Closing
                                         Procedure

 

Subject
to Borrower providing Lender with prior written notice of at least 2 days, the closing of the transaction in relation to the Loan
(the “Loan Closing”) shall occur no later than or on August 31st, 2017, following satisfaction or
waiver of all the conditions precedent to the Loan Closing, or at such other time, date and place as may be agreed by the Parties
in writing (the time and date of the Loan Closing being herein referred to as the “Loan Closing Date”).

 

Immediately
prior to the Loan Closing, the Borrower shall deliver to the Lender a certificate signed by an officer of the Borrower, in the
form attached as Schedule E, confirming that all conditions precedent
to the Loan Closing as set out in Section ‎3.1 above have been met and complied with.

 

At
the Loan Closing (or at the dated specified below), the following actions and occurrences will take place, all of which shall
be deemed to have occurred simultaneously and no action shall be deemed to have been completed and no document or certificate
shall be deemed to have been delivered, until all actions are completed and all documents and certificates delivered:

 

		3.2.1.	The
                                         Borrower shall deliver to Lender original certificates evidencing registration and perfection
                                         of the Loan Securities - except for the Equity Pledge and the Mandate to Sell - no later
                                         than 14 Business Days following the Loan Closing Date. The Lender may, at its option,
                                         put in place all the formalities necessary to have the Equity Pledge agreement formalized
                                         and registered with the competent Companies’ Business Register;

 

    	 

     

    

 

14

 

		3.2.2.	The
                                         Borrower shall deliver to Lender approvals of the Board of Directors of the Borrower
                                         no later than 14 Business Days following the Loan Closing Date, evidencing the nomination
                                         of the authorized signatories on behalf of the Lender and the SPV in the Bank Account,
                                         and the SPV’s Bank Accounts; and shall deliver to Lender approvals of the relevant
                                         banks to the Lender’s satisfaction, evidencing receipt of documents nominating
                                         the authorized signatories on behalf of the Lender and the SPV in the Bank Account, and
                                         the SPV’s Bank Accountsno later than 30 Business Days following the Loan Closing
                                         Date as set forth in Section 10.9.2.

 

		3.2.3.	The
                                         Borrower shall deliver to Lender an executed irrevocable instruction notice to the SPV
                                         in the from attached hereto as Schedule F, that: (a) all Distributions
                                         to the Borrower shall be payable solely to the Bank Account; and (b) the Participator,
                                         as an observer to the Board of Directors of the SPV and of the Borrower, on behalf of
                                         the Lender, shall be invited to any such meeting and shall have the information rights
                                         as set forth in Schedule F. The irrevocable instructions notice shall be
                                         submitted to the SPV within 14 Business Days following the Loan Closing Date.

 

		3.2.4.	The
                                         Borrower shall deliver to Lender the Subordination Agreement in the form attached hereto
                                         as Schedule B, duly signed by the Borrower and BSC.

 

		3.2.5.	The
                                         Borrower shall deliver to Lender certified copies of the resolutions of BSC and Borrower’s
                                         relevant corporate bodies required for approving the execution, delivery and performance
                                         of the Loan Documents and all other documents and actions contemplated thereby;

 

		3.2.6.	The
                                         Lender shall make the Loan, less the Transaction Fee and less the BSC’s Transaction
                                         Fee, available to the Borrower as set forth in Section 2.2 above;

 

		3.2.7.	The
                                         Borrower shall use the Loan solely as stipulated in this Agreement;

 

		3.2.8.	Within
                                         7 Business Days following the Loan Closing the Borrower shall provide the Lender with
                                         a resolution of the SPV’s board of directors pursuant to which the Participator
                                         on behalf of the Lender shall be invited to participate as an observer in any board of
                                         directors meetings of the SPV and shall receive all correspondence accordingly and have
                                         the information rights specified under Schedule F. The Borrower shall provide
                                         the Participator with all resolutions of the shareholder meetings (written resolution
                                         and protocol of shareholder meetings) within 7 Business Days of such meeting.

 

    	

     

    

 

15

 

		3.3.	CANTU
                                         Transaction 

 

			In
                                         the event the CANTU Transaction was closed the Lender shall be provided with the following
                                         securities:

 

		3.3.1.	Equity
                                         Pledge on Borrower holdings in CANTU SPV within 14 Business Days of CANTU Transaction
                                         closing. Evidencing the nomination of the authorized signatories on behalf of the Lender
                                         in CANTU SPV’s bank accounts within 14 Business Days of Cantu Closing;

 

		3.3.2.	Distribution
                                         from CANTU SPV shall be transferred to Borrower’s bank account which shall be open
                                         for the sole purpose of depositing distributions from Cantu [“Borrower’s
                                         Designated Cantu Bank Account”]. Lender will have signatory rights in this
                                         Bank Account. Such signature rights shall be granted to the Lender within 14 days of
                                         Cantu Closing. However, Distribution to shareholders from Borrower’s Designated
                                         Cantu Bank Account shall not be limited as long as payments due the Lender have been
                                         paid in full on time; and (ii) contribution of the required monthly funds to the Cash
                                         Reserve Account have been made, and (iii) there is no default under this Agreement with
                                         respect to the Udine Project.

 

		3.3.3.	In
                                         the event the CANTU Transaction will be terminated, any amount to be paid back to BSC
                                         out of the Cantu Deposit shall be transferred to the Cash Reserve Amount and shall be
                                         credited to the total sum of the Repayment Instalments for the 12 months as detailed
                                         in clause 10.15 (i) here below.

 

		4.	REPAYMENT

 

		4.1.	Commencing
                                         on the last day of the first 6 months following the Loan Closing (“First Repayment
                                         Date”), the Borrower shall commence repaying the Loan (together with any accrued
                                         Interest Rate on the outstanding balance of the Loan during each Interest Period) in
                                         quarterly instalments on each Repayment Date in accordance with the repayment schedule
                                         attached hereto as Schedule I [Loan and Operation Fee Repayment Schedule]
                                         (“Repayment Instalments” and the “Repayment Schedule”,
                                         respectively).

 

    	

     

    

 

16

 

		4.2.	Notwithstanding
                                         anything to the contrary set out herein, all amounts outstanding hereunder shall be repaid
                                         by and on the Final Repayment Date.

 

		5.	PREPAYMENT

 

		5.1.	Except
                                         as set forth in Section 5.3, Section 12.5.2 and Section 16.2 below, the Borrower shall
                                         not be entitled to prepay any or all of the amounts outstanding hereunder.

 

		5.2.	At
                                         any time following full payment of the first eight Repayment Instalments as provided
                                         in Schedule I [Loan and Operation Fee Repayment Schedule] Lender
                                         shall be entitled to prepayment from the Borrower of any amount outstanding hereunder
                                         or portions thereof (“Prepaid Amount”), which Prepaid Amount shall
                                         be determined by the Lender, provided however that such Prepaid Amount shall not exceed
                                         the maximum distributable proceeds of the SPV. The Lender shall notify the Borrower in
                                         a prior written notice, delivered at least 21 Business Days in advance of any such demand
                                         for payment of a Prepaid Amount.

 

		5.3.	Subject
                                         to the fulfilment of the conditions precedent set forth in Section 5.4 herein, and to
                                         the Right of First Refusal of the Lender as set forth in Section 5.5 below, the Borrower
                                         may refinance the Plant and prepay the entire outstanding amount of the Loan in cash
                                         (“Prepayment Transaction” and “Prepayment”, respectively).

 

		5.4.	Prepayment
                                         of the Loan pursuant to the provisions of Section 5.3 is subject to the cumulative fulfilment
                                         of each of the following conditions:

 

		5.4.1.	Refinance
                                         Notice (as defined in Section 5.5.1 below) was delivered to the Lender;

 

		5.4.2.	No
                                         Notice of Execution of Right of First Refusal (as defined in Section 5.5.2 below) has
                                         been delivered to the Borrower;

 

		5.4.3.	The
                                         net consideration due to Lender for the Prepayment by Borrower shall be: the unpaid principal
                                         amount of the Loan, plus the expected Interest Rate and Operation Fee for the remaining
                                         period of the Loan, minus 15% of such aggregate sum (“Prepayment Fee”).

 

    	

     

    

 

17

 

		5.5.	Lender
                                         shall be entitled to a Right of First Refusal with respect to Prepayment of the Loan,
                                         in accordance with the following procedure:

 

		5.5.1.	The
                                         Borrower shall deliver the Lender a written notice of its intent to enter into the Prepayment
                                         Transaction, which shall detail the following information: (a) the vending (i.e. shares
                                         or assets); (b) the consideration and payment terms of consideration; (c) the terms and
                                         conditions of refinance to be provided with respect to the Prepayment Transaction; and
                                         (d) any other material term or condition with respect to Prepayment (“Refinance
                                         Notice”).

 

		5.5.2.	the
                                         Lender shall be entitled (at its sole discretion) to notify the Borrower that it wishes,
                                         to amend the terms in which the Loan has been provided by the Lender such that it shall
                                         be provided upon the same terms and conditions set forth in the Refinance Notice, by
                                         delivery to the Borrower of a written notice within 21 (twenty one) days as of the receipt
                                         of a Refinance Notice (“Notice of Execution of Right of First Refusal”).

 

		5.5.3.	Should
                                         the Lender deliver to the Borrower a Notice of Execution of Right of First Refusal, then
                                         the Parties shall make the necessary amendments to this Agreement within fourteen (14)
                                         days as of the delivery of the Notice of Execution of Right of First Refusal.

 

		5.5.4.	In
                                         the event that Lender failed to deliver Borrower a Notice of Execution of Right of First
                                         Refusal within the period of time set forth in section 5.5.2 above or has sent written
                                         notice waiving its right of first refusal, The Borrower shall be free to prepay the Loan
                                         only in accordance with the terms specified in the Refinance Notice and Section 5.4 and
                                         by paying the Prepayment Fee. In the event that a Prepayment Transaction has not been
                                         closed within ninety (90) days as of the lapse of the period of time set forth in subsection
                                         5.5.2 above, any Prepayment shall be subject to Lender’s Right of First Refusal
                                         according to the procedure set forth in this Section 5.5.1.

 

		5.5.5.	In
                                         the event that the Lender does not exercise its Right of First Refusal, it shall be entitled
                                         to the Prepayment Fee.

 

    	

     

    

 

18

 

		6.	INTEREST
                                         AND OPERATION FEE 

 

		6.1.	Interest
                                         Rate

 

			The
                                         rate of interest on the Loan shall be 14.5% per annum, calculated on a quarterly basis
                                         (“Interest Rate”).

 

		6.2.	In
                                         addition to the Interest Rate, the Lender shall be entitled to an annual operation fee
                                         as specified in Schedule I (the “Operation Fee”). The
                                         Operation Fee shall be paid quarterly at the same time as each interest repayment is
                                         due.

 

		6.3.	It
                                         is hereby clarified that the principal payments of the Loan, interest payments and the
                                         Operation Fee as mentioned in sections 5, 6.1 and 6.2 shall not exceed jointly a repayment
                                         of the principal of the Loan with a daily interest rate of 0.041%.

 

		6.4.	In
                                         the event that any of the provisions of this section 6 shall be deemed illegal or unenforceable,
                                         in whole or in part, due to a change in Italian regulations, than this section shall
                                         be given the broadest interpretation permissible in order for it to have the fullest
                                         effect possible as intended by the Parties, and the Borrower shall be obligated to pay
                                         Lender the balance created due to the change of the Italian regulations, and if it is
                                         unwilling or unable to pay such balance it shall Prepay the Loan and Pay the Prepayment
                                         Fee, within 90 days of Lender’s written instruction.

 

		6.5.	Interest
                                         Periods 

 

		6.5.1.	The
                                         Interest Period for the Loan shall commence on the day of transferring each amount out
                                         of the Loan by the Lender in accordance of this Agreement, shall be on a quarterly basis
                                         and shall end on the last Final Repayment Date (“Interest Period”).

 

		6.5.2.	If
                                         the Interest Period would otherwise end on a day which is not a Business Day, that Interest
                                         Period will instead end on the next Business Day in that calendar month (if there is
                                         one) or the preceding Business Day (if there is not).

 

		6.5.3.	If
                                         the Interest Period would otherwise overrun the Final Maturity Date, it will be shortened
                                         so that it ends on that Final Maturity Date.

 

		6.5.4.	The
                                         Borrower shall pay accrued interest on the Loan on the last day of the Interest Period.

 

		6.6.	Interest
                                         on Overdue Amounts

 

			As
                                         of the third instance of delayed payment, interest on any overdue amounts (if any), shall
                                         be payable at a rate of 4% per annum above the rate of interest payable on the Loan prior
                                         to such increase.

 

    	

     

    

 

19

 

		7.	TAXES
                                         

 

		7.1.	Tax
                                         Deductions

 

		7.1.1.	The
                                         Borrower shall make all payments to be made by it to Lender without any Tax Deduction,
                                         unless a Tax Deduction is required by Applicable Law.

 

		7.1.2.	If
                                         the Borrower is aware that if it must make a Tax Deduction (or that there is a change
                                         in the rate or the basis of a Tax Deduction), it must promptly notify Lender.

 

		7.1.3.	If
                                         a Tax Deduction is required by Applicable Law to be made by the Borrower in respect of
                                         amounts payable hereunder, then the Borrower will: make the minimum Tax Deduction allowed
                                         by Applicable Law and must make any payment required in connection with that Tax Deduction
                                         within the time allowed by Applicable Law.

 

		7.1.4.	Within
                                         30 days of making either a Tax Deduction or a payment required in connection with a Tax
                                         Deduction, the Borrower must deliver to Lender evidence satisfactory to Lender that the
                                         Tax Deduction has been made or (as applicable) the appropriate payment has been paid
                                         to the relevant Tax Authority.

 

		7.2.	Value
                                         Added Taxes

 

		Any
                            amount payable hereunder by the Borrower is exclusive of any value added tax. If any value added tax
                            is chargeable, the Borrower shall add such value added tax amount to payments due to Lender, as appropriate,
                            against receipt of a duly issued VAT invoice.

 

		8.	REPRESENTATION
                                         AND WARRANTIES

 

			The
                                         Borrower hereby represents and warrants to the Lender, as of the date hereof, as follows:

 

		8.1.	Corporate
                                         Matters

 

		8.1.1.	Each
                                         of the Borrower and BSC is duly incorporated and organized and is validly existing and
                                         in good standing under the laws of the jurisdiction of its incorporation, with power
                                         and authority to carry on its business as now being conducted and as contemplated to
                                         be conducted.

 

    	

     

    

 

20

 

		8.1.2.	Each
                                         of the Borrower and BSC has all necessary corporate power and authority to enter into
                                         this Agreement and other Loan Documents and to perform its obligations hereunder and
                                         to consummate the transactions contemplated thereunder.

 

		8.1.3.	All
                                         corporate action on the part of each of the Borrower, its directors or shareholders necessary
                                         for the authorisation and execution of each Loan Document and the performance of all
                                         of its obligations thereunder have been taken. Each Loan Document constitutes valid and
                                         legally binding obligations of the Borrower, enforceable in accordance with its terms.

 

		8.1.4.	The
                                         execution and delivery of each Loan Document by the Borrower and BSC does not, and the
                                         consummation of the transactions contemplated thereby will not, violate any provisions
                                         of the Organisational Documents of the Borrower or BSC or any undertaking of any nature
                                         that is binding on it.

 

		8.1.5.	The
                                         execution and delivery of each Loan Document by the Borrower and BSC and the consummation
                                         by the Borrower and BSC of the transactions contemplated thereby does not require the
                                         consent or agreement of any Government Authority or any other third party under Applicable
                                         Law, which have not been received.

 

		8.2.	The
                                         Guaranteed Plant Operation Management Agreement will be signed on the SPA Closing.

 

		8.3.	Capitalization
                                         / Ownership

 

		8.3.1.	The
                                         authorized share capital of the Borrower is 10,000 Euro.

 

		8.3.2.	One
                                         hundred per cent (100%) of the issued and outstanding share capital of the Borrower,
                                         on a fully diluted basis taking into account all issued and outstanding shares of the
                                         Borrower of any class, after giving effect to the conversion or exercise (as the case
                                         may be) of all convertible securities, options and warrants as well as all other rights
                                         of any kind to acquire shares or exchangeable for shares of the Borrower), is held by
                                         BSC, and all such shares are, and except as permitted pursuant to this Agreement, will
                                         continue to be, held by BSC, free and clear of any Security Interests.

 

    	

     

    

 

21

 

		8.3.3.	There
                                         are no outstanding or authorised subscriptions, options, warrants, calls, rights, commitments,
                                         or any other agreements of any character directly or indirectly obligating the Borrower
                                         to issue any securities, whether convertible or not, or any rights to the foregoing,
                                         whether for consideration or otherwise.

 

		8.4.	Business
                                         to Date 

 

			The
                                         Borrower’s sole purpose is to operate in the Field of Operation. Since its incorporation,
                                         the Borrower has not engaged in any other business activity.

 

		8.5.	Financial
                                         Status 

 

			The
                                         Borrower does not have any liabilities, claims, or obligations of any nature, whether
                                         accrued, absolute, contingent, anticipated, or otherwise, whether due or to become due,
                                         other than pursuant to this Agreement, and the SPAs.

 

		8.6.	No
                                         Default

 

		8.6.1.	No
                                         breach or default by the Borrower is outstanding or will result from the execution of
                                         the Loan Documents or the performance of any transaction contemplated hereby and thereby.

 

		8.6.2.	No
                                         other event is outstanding which constitutes (or, with the expiry of a grace period,
                                         the giving of notice, the making of any determination or any combination of the foregoing,
                                         would constitute) a default or termination event (however described) under any document
                                         which is binding on the Borrower or any of its assets to an extent or in a manner which
                                         has or would give rise to a Material Adverse Change.

 

		8.7.	Insolvency

 

			No
                                         action, legal proceeding or other procedure or step described in Section 12.4 (Insolvency
                                         / Liquidation) has been taken in relation to the Borrower nor has been taken or is
                                         threatened in writing in relation to the Borrower and to the best knowledge of the Borrower
                                         the SPV.

 

		8.8.	Business
                                         Plan/Financial Model

 

			The
                                         Financial Model shall be attached hereto as Schedule G.

 

    	

     

    

 

22

 

		8.9.	Litigation

 

			No
                                         litigation, arbitration or administrative proceedings or injunction, writ, restricting
                                         order or order of any nature are (i) current or have been issued or, are pending before
                                         a court or other authorised authority or, are threatened in writing against the Borrower;
                                         nor (ii) current or have been issued or, are pending before a court or other authorised
                                         authority or, to the Borrower’s knowledge, threatened in writing against the SPV,
                                         which have or, if adversely determined, would give rise to a Material Adverse Change.

 

		9.	LENDER
                                         REPRESENTATIONS

 

			The
                                         Lender hereby represents and warrants as follows:

 

		9.1.	(i)
                                         it has the knowledge and experience in business and financial matters similar to the
                                         subject matter of this Agreement; (ii) it has been allowed to review the SPA including
                                         the terms of the investment, the financial model and the due diligence reports, and has
                                         further conducted its own due diligence, and has been provided with all material documents
                                         it has requested ; and (iii) it has been given reasonable opportunity to meet with representative(s)
                                         of BSC/ the Borrower for the purpose of receiving information concerning the investment
                                         in the SPV.

 

		9.2.	It
                                         has and shall have the financial capability to carry out its obligations under this Agreement
                                         in full, when and as set forth herein.

 

		9.3.	Corporate
                                         Matters

 

		9.3.1.	The
                                         Lender is duly incorporated and organized and is validly existing and in good standing
                                         under the laws of the jurisdiction of its incorporation, with power and authority to
                                         carry on its business as now being conducted and as contemplated to be conducted.

 

		9.3.2.	The
                                         Lender has all necessary corporate power and authority to enter into this Agreement and
                                         other Loan Documents and to perform its obligations hereunder and to consummate the transactions
                                         contemplated thereunder.

 

		9.3.3.	All
                                         corporate action on the part of each of the Lender, its investment committees, directors
                                         or shareholders necessary for the authorisation and execution of each Loan Document and
                                         the performance of all of its obligations thereunder have been taken. Each Loan Document
                                         constitutes valid and legally binding obligations of the Lender, enforceable in accordance
                                         with its terms.

 

    	

     

    

 

23

 

		9.3.4.	The
                                         execution and delivery of each Loan Document by the Lender does not, and the consummation
                                         of the transactions contemplated thereby will not, violate any provisions of the Organisational
                                         Documents of the Lender or any undertaking of any nature that is binding on it.

 

		9.3.5.	The
                                         Lender shall deliver upon Loan Closing Date to Borrower certified copies of the resolutions
                                         of Lender’s relevant corporate bodies required for approving the execution, delivery
                                         and performance of the Loan Documents and all other documents and actions contemplated
                                         thereby.

 

		10.	COVENANTS

 

As
long as the Loan is not fully and definitively paid to the Lender, the Borrower undertakes and covenants towards the Lender as
follows: (the following undertakings and covenants will apply mutatis mutandis to the SPV, as applicable):

 

		10.1.	Existence

 

		10.1.1.	The
                                         Borrower shall, unless otherwise consented to by the Lender at its sole discretion, at
                                         all times preserve and maintain in full force and effect: (a) its existence as a limited
                                         company under the Applicable Laws of the State of Italy; and (b) good title to its properties
                                         and assets.

 

		10.1.2.	The
                                         Borrower must not, without the consent of the Lender acting in their sole and exclusive
                                         discretion, enter into any amalgamation, demerger, merger or reconstruction or create
                                         or register a Security Interest over its shares or other securities.

 

		10.1.3.	The
                                         Borrower shall not make any changes, which adversely affect the Lender or its rights
                                         under the Loan Documents, to its Organisational Documents or capital structure without
                                         the prior consent of the Lender.

 

		10.2.	Compliance
                                         with laws

 

			The
                                         Borrower shall comply with all Applicable Laws, including in relation to any Tax.

 

		10.3.	Ranking

 

			The
                                         Borrower must ensure that its payment obligations under the Loan Documents rank in priority
                                         to all its other present and future unsecured payment obligations, except for obligations
                                         mandatorily preferred by Applicable Law.

 

    	

     

    

 

24

 

		10.4.	Negative
                                         pledge

 

		10.4.1.	The
                                         Borrower shall not create any Security Interest on any of the respective assets of the
                                         SPV other than in relation to any of the Loan Documents or SPV facility agreement in
                                         the event of refinancing.

 

		10.4.2.	The
                                         Borrower shall not:

 

		(a)	sell,
                                         transfer or otherwise dispose of any of the respective assets of the SPV to any third
                                         party prior to repayment in full of amounts owing to the Lender pursuant to this Agreement;

 

		(b)	sell,
                                         transfer or otherwise dispose of any of their respective receivables on recourse terms;

 

		(c)	enter
                                         into any arrangement under which money or the benefit of a bank or other account may
                                         be applied, set-off or made subject to a combination of accounts.

 

		10.5.	Disposals

 

			The
                                         Borrower must not either in a single transaction or in a series of transactions and whether
                                         related or not, dispose of all or any material part of its assets.

 

		10.6.	Financial
                                         Indebtedness

 

			The
                                         Borrower:

 

		10.6.1.	must
                                         not incur, other than under the Loan Documents and any facility agreement in the event
                                         of refinancing any financial indebtedness of any nature (other than indebtedness incurred
                                         during the regular course of business pursuit of its Field of Operation and within the
                                         framework of the Business Plan) during the Term of this Agreement, it being clarified
                                         that any indebtedness owing to the Seller under the SPA shall be permitted to remain
                                         in place without breach hereof;

 

		10.6.2.	shall
                                         not issue, provide or otherwise, other than facility agreement in the event of refinancing,
                                         incur any guarantee, counter indemnity or similar obligation; and

 

		10.6.3.	must
                                         not be the creditor in respect of any financial indebtedness other than in the pursuit
                                         of its Field of Operation and within the framework of the Business Plan.

 

		10.7.	Change
                                         of business

 

			The
                                         Borrower must not carry on any business other than the Field of Operation.

 

    	

     

    

 

25

 

		10.8.	Loan
                                         Securities

 

		10.8.1.	The
                                         Borrower will maintain all Security Interests created under the Loan Securities for the
                                         benefit of the Lender and will affect all registrations relating thereto. 

 

		10.8.2.	As
                                         of the Loan Closing, the signatory rights in the Bank Account will be as set forth in
                                         Schedule H. 

 

		10.9.	Bank
                                         Accounts of the SPV 

 

		10.9.1.	The
                                         Borrower shall procure that the SPV shall hold only the SPV’s Bank Accounts, and
                                         shall not open any additional bank accounts without the prior written consent of the
                                         Lender.

 

		10.9.2.	No
                                         later than 30 Business Days following the Loan Closing Date, the signatory rights in
                                         the SPV’s Bank Accounts will be as set forth in Schedule H.

 

		10.10.	Material
                                         Contracts

 

		10.10.1.	Without
                                         the written consent of the Lender, the Borrower shall not enter into any material contract
                                         other than the Loan Documents or as may be required pursuant to a facility agreement
                                         in the event of refinancing.

 

		10.11.	Shareholder
                                         Interests 

 

		10.11.1.	The
                                         Borrower must not without the written consent of the Lender which consent shall not be
                                         unreasonably withheld:

 

		(a)	issue
                                         any shares, options, warrants or other rights to subscribe, purchase or acquire any shares
                                         or other securities convertible into or exchangeable for its shares;

 

		(b)	alter
                                         any rights attaching to its shares as at the date of this Agreement;

 

		(c)	grant
                                         or create any new rights or options to participate directly or indirectly in its revenues
                                         or profits ;

 

		(d)	purchase,
                                         cancel, redeem or take steps to reduce any of its shares.

 

		Without derogating
                                from the above, the Borrower shall not issue, purchase, cancel, redeem or repay any capital notes
                                prior to repayment of due and payable amounts owing to the Lender pursuant to this Agreement.

 

    	

     

    

 

26

 

		10.12.	Guaranteed
                                         Plant Operation Management Agreement

 

		10.12.1.	Any
                                         amendment to the Guaranteed Plant Operation Management Agreement shall be subject to
                                         the prior written consent of the Lender and any breach thereof shall be considered an
                                         Event of Default under Section 12 hereunder.

 

		10.13.	Arrangements
                                         with Related Parties

 

		10.13.1.	Without
                                         the written consent of the Lender at the Lender’s sole discretion, the Borrower
                                         and the SPV must not enter into any transaction, agreement or arrangement with a Related
                                         Party, with the exception of an agreement for the withdrawal of management fees deferred
                                         to the Loans hereunder, and subject to limitation on Distribution under this Agreement.

 

		10.14.	Business
                                         Plan

 

		10.14.1.	The
                                         Borrower shall provide the Lender with respect to the Borrower, by September 30 of each
                                         calendar year a business plan including cash budget detailed on a monthly basis, which
                                         shall be based on the Financial Model as updated on a yearly basis (“Suggested
                                         Business Plan”) as well as an annual budget for the next 5 years.

 

		10.14.2.	Any
                                         deviation exceeding 10% of the free cash flow in any year under the Financial Model requires
                                         the Lender’s written preapproval.

 

		10.14.3.	The
                                         Borrower shall make any amendment in the Suggested Business Plan agreed between the Lender
                                         and the Borrower.

 

		10.14.4.	The
                                         Borrower shall exercise its best efforts to ensure that the Borrower’s and SPV’s
                                         expenses shall be in accordance with the approved Business Plan.

 

		10.15.	Distributions

 

			The
                                         Borrower shall not make any Distribution until the earlier of: (a) closing of CANTU Transaction;
                                         or (b) the elapse of two (2) years following the Loan Closing Date; following which,
                                         Borrower may make Distributions subject to all of the following conditions being satisfied:

 

		(i)	50%
                                         of each Distribution shall be accumulated and reserved in a debt service fund in the
                                         Bank Account in the aggregate amount of 12 months of Repayment Instalments and Operation
                                         Fee (“Cash Reserve Amount”);

 

		(ii)	Any
                                         amounts, including the Repayment Installments due and payable, up to such time, pursuant
                                         to any Loan Document have been paid to the Lender;

 

		(iii)	The
                                         Budget versus Actual Report has been provided to the Lender;

 

		(iv)	No
                                         Event of Default is outstanding (or would result from the payment or transfer);

 

    	

     

    

 

27

 

		(v)	Such
                                         Distribution is permitted by Applicable Law;

 

		(vi)	With
                                         respect to Material Adverse Change as set forth under Section 10.16 hereunder.

 

		10.16.	Notwithstanding
                                         the foregoing, in the event of any evidence of any Material Adverse Change, including
                                         inter alia, future substantial decline in the financial performance of the Plant
                                         (such as material tariff changes, pending cancelation of raw material supply agreement
                                         without any parallel alternative agreement) resulting in a decline in any of the years
                                         of the repayment of the Loan in the cash flow available for Distribution of the SPV or
                                         the Borrower by more than 10% compared to the Financial Model the Borrower shall not
                                         be allowed to make any further Distributions until the Lender is reasonably satisfied
                                         that the Borrower can meet its commitment to repay the Loans in full. Notwithstanding
                                         the above, the Borrower shall be entitled to make Distributions, subject to accumulating
                                         an amount equal to eight Repayment Instalments, in a reserve fund, which is pledged in
                                         favour of the Lender, prior to such Distribution.

 

		10.17.	Subject
                                         to limitation set forth in Section 10.15 above and after Lender has received each of
                                         the respective Repayment Installments, the Borrower shall be entitled to transfer any
                                         remaining amounts in the Bank Account, other than the Cash Reserve Amount (“Remaining
                                         Amounts”) to any bank account, and shall be entitled to use such Remaining
                                         Amounts in accordance with its sole discretion, including without limitation, transfer
                                         such Remaining Amounts or any part thereof to its shareholders as distributable proceeds,
                                         dividends or otherwise.

 

		10.18.	Without
                                         derogating from the terms of Section 10.1610.15, the Borrower shall notify the Lender
                                         in writing of any Distribution, at least 10 (ten) days prior to the proposed Distribution
                                         date.

 

		10.19.	SPV’s
                                         Distributions

 

		10.19.1.	The
                                         Borrower will cause the SPV to make Distributions of the maximum amount that may be so
                                         distributed by it under applicable law and after taking into consideration pending and
                                         expected expenses and costs.

 

		10.19.2.	The
                                         Borrower will not, without the prior written approval of Lender, agree to any additional
                                         restrictions being imposed on the making of such Distributions other than those under
                                         Applicable Law, the Guaranteed Plant Operation Management Agreement and the facility
                                         agreement in the event of refinancing or if such Distributions cannot be distributed
                                         due to pending and expected expenses and costs of the SPV, and will not permit any change
                                         or amendment to the Guaranteed Plant Operation Management Agreement which could result
                                         in such additional restrictions being imposed.

 

    	

     

    

 

28

 

		10.20.	Information
                                         Rights 

 

			The
                                         Borrower undertakes to provide Lender with the following:

 

		10.20.1.	Within
                                         Ninety (90) days of the end of each fiscal year, the audited annual financial statements
                                         of the Borrower and the SPV audited by an accounting firm approved by the Lender in writing;

 

		10.20.2.	within
                                         sixty (60) days of the end of each quarter, the reviewed financial statements of the
                                         Borrower and the SPV reviewed by an accounting firm approved by the Lender in writing;

 

		10.20.3.	Within
                                         fifteen (15) days of the end of each calendar month a Budget versus Actual Report for
                                         the SPV and for the Borrower;

 

		10.20.4.	immediately
                                         upon being aware thereof, notice of any breach or potential breach by the Borrower of
                                         the Loan Documents;

 

		10.20.5.	promptly
                                         following issuance or receipt of same and no later than 7 (seven) days of the receipt
                                         thereof, copies of all reports and material documents relating to the SPV, the Plant
                                         or the Borrower such as management reports, O&M reports, financial reports, etc.
                                         and any other information or data reasonably requested by the Lender from time to time,
                                         provided that such information is held by the Borrower.

 

		10.20.6.	The
                                         Participator, on behalf of the Lender, shall be invited to participate as an observer
                                         in any board of directors meetings of the SPV and shall receive all correspondence accordingly
                                         and have the information rights specified under Schedule F.

 

		11.	UNDERTAKING
                                         OF THE LENDER

 

		11.1.	If
                                         the signature of the Lender, as a signatory of the Bank Account was requested with respect
                                         to a payment: (i) included in the most recent Financial Model or budget approved in writing
                                         by the Lender and (ii) included in an agreement approved in writing by the Lender or
                                         payment due by any authority by regulation, and was not approved within 7 Business Days
                                         of providing the Lender with all required detail concerning such expenditure, the Board
                                         of Directors of the SPV shall be entitled to adopt a new signature rights resolution
                                         to allow such payment with the sole signature of the Company’s director. It is
                                         hereby clarified, that said new signature rights resolution shall be valid only in relation
                                         to such payment not approved by the Lender as specified above, and that following such
                                         payment, the Board of Directors of the Borrower shall immediately reinstate the signature
                                         rights set forth in Schedule H and deliver such resolution to the Bank.

 

    	

     

    

 

29

 

		12.	EVENTS
                                         OF DEFAULT

 

		12.1.	The
                                         occurrence of any of the events or circumstances set forth in Sections 12.2- 12.5 shall
                                         constitute an Event of Default hereunder. The Borrower undertakes to notify the Lender
                                         promptly upon the occurrence of an Event of Default or of any circumstances which come
                                         to the Borrower’s attention which would give rise to an Event of Default.

 

		12.2.	Non-Payment

 

			The
                                         Borrower fails to pay two consecutive Repayment Instalments or Operation Fee.

 

		12.3.	Other
                                         Breaches

 

			The
                                         Borrower breaches any material obligation, covenant or undertaking under any Loan Document
                                         (including, without limitation failure to register, provide and/or carry out any of the
                                         Loan Securities) which is not referred to in this Section 12, and such breach has not
                                         been cured within 21 (twenty-one) days, or such other written notice period which may
                                         be stated in the respective Loan Document, from receipt of notice from any of the Borrower’s
                                         counterparties to such Loan Document that a breach has occurred, or any longer period
                                         permitted for cure pursuant to the relevant Loan Document, or any representation or warranty
                                         made by the Borrower hereunder was, when made, untrue or misleading in any material way.
                                         It is hereby clarified that a strike of the Bank or any act or omission by the Lender
                                         which delays the compliance with Section 3.2.2 shall not constitute a material breach
                                         under this Section.

 

		12.4.	Insolvency
                                         / Liquidation

 

		12.4.1.	The
                                         Borrower or the SPV (whether simultaneously or not) is unable to pay its debts or becomes
                                         unable to pay its debts as they fall due or suspends making payments (whether of principal
                                         or interest) with respect to all or any class of its debts.

 

    	

     

    

 

 30

 

		12.4.2.	A
                                         trustee, liquidator, receiver or similar officer is appointed in respect of the Borrower
                                         or the SPV (or any material asset thereof and whether simultaneously or not) or distress
                                         or any form of execution is levied or enforced upon or claimed against any such assets,
                                         which proceedings are not dismissed, denied, stayed, discharged or struck out within
                                         90 (ninety) days.

 

		12.4.3.	The
                                         Borrower, or the SPV, convenes a meeting of its creditors or proposes to make any arrangement
                                         or composition with, or any assignment for the benefit of, its creditors or a petition
                                         is filed or a meeting is convened for the purpose of considering a resolution or other
                                         steps are taken for the making of an administration order in relation to such entity
                                         or for its winding up, bankruptcy or dissolution.

 

		12.4.4.	Any
                                         person presents a petition, or files documents with a court or any registrar for its
                                         winding-up, administration or dissolution (including on a temporary basis) of the Borrower
                                         or the SPV (whether simultaneously or not) or an order for their winding-up, administration
                                         or dissolution is made, including on a temporary basis, (unless any such proceedings
                                         or acts are dismissed, denied, stayed, discharged or struck out within 90 (ninety) days).

 

		12.4.5.	Sections
                                         12.4.1-12.4.2 above shall apply with relation to BSC in the event that such occurrence
                                         has an actual effect on the repayment of the Loan under the terms of this Agreement.

 

		12.5.	Remedies

 

		12.5.1.	Lender
                                         shall deliver a written notice to the Borrower informing it of the occurrence of an Event
                                         of Default (“Notice of Default”).

 

		12.5.2.	Borrower
                                         shall have 7 (seven) days following the receipt of a Notice of Default (the “Cure
                                         Period”) to either (i) Cure such Event of Default; or (ii) Prepay the Prepayment
                                         Fee.

 

		12.5.3.	In
                                         the event that the Borrower does not cure such Event of Default or doesn’t Prepay
                                         the Prepayment Fee as aforementioned within the Cure Period, the Lender shall be entitled
                                         to take all steps required to enforce any of the Loan Securities and the Security Interests
                                         thereunder (including through use of the Mandate to Sell attached hereto as Schedule
                                         D) and the Prepayment Fee shall be immediately due and payable without any further
                                         action by the Lender. It is hereby clarified, that parallel to realization of the Loan
                                         Securities and until final repayment of all sums under this Agreement to the Lender,
                                         in the event of such an uncured Event of Default, the Lender will be entitled to exercise
                                         all voting rights in the Borrower and, therefore, to immediately convene a shareholder
                                         meeting for the purpose of revoking/appointing the Board of Directors of the Borrower,
                                         all according to the Equity Pledge Agreement.

 

    

     

    

 

 31

 

BSC
hereby unconditionally and irrevocably guarantees to the Lender the fulfillment of Borrower’s obligations and undertakings
under this Agreement, including without limitation, all monetary obligations of the Borrower, provided that: (i) Lender shall
first enforce the Loan Securities in accordance with the provision of this Agreement and (ii) the Loan Securities are insufficient
for full repayment of the Loan, any interest accrued thereon and the outstanding Operational Fee, to the Lender (“BSC
Guarantee”). The enforcement of BSC Guarantee shall be solely for the remaining portion of the Loan, any interest accrued
thereon and the outstanding Operational Fee, which remains unpaid following a period of 90 days of such enforcement of the Loan
Securities.

 

		12.5.4.	In
                                         the event that it is judicially determined that the Lender has (a) exercised the Equity
                                         Pledge and transferred the shares of the Borrower via the Mandate to Sell, not in accordance
                                         with the terms of this Agreement; and/or (b) has exercised the Bank Account Pledge and
                                         frozen or withdrawn funds from the Bank Account (pursuant to the Pledge Agreement and/or
                                         the Irrevocable Letter of Instructions to the Bank attached as an appendix to the Pledge
                                         Agreement Over Bank Account) not in accordance with the terms of this Agreement, then:
                                         (i) if the Equity Pledge has been exercised, the shares shall be returned to BSC; (ii)
                                         if the Bank Account Pledge has been exercised, the Lender shall immediately repay any
                                         funds withdrawn from the Bank Account; and (iii) in either event, the Borrower shall
                                         be entitled to a payment of 1,000,000 Euro from the Lender or to retain
                                         the remaining amount of the Loan, whichever is higher.

 

    

     

    

 

32 

 

		13.	PRIORITY
                                         OF MEZZANINE LOANS

 

		13.1.	Insufficient
                                         Funds

 

In
the event that the Borrower has insufficient funds to discharge all the amounts then due hereunder, such payment shall be applied
towards the obligations of the Borrower hereunder in the following order:

 

		13.1.1.	first,
                                         in or towards payment of due and payable fees as set out in Section 15 (expenses),
                                         if any;

 

		13.1.2.	second,
                                         in or towards payment of due and payable late interest and default interest; if any; 

 

		13.1.3.	third,
                                         in or towards payment of due and payable interest and Operation Fee, if any; 

 

		13.1.4.	fourth,
                                         in or towards repayment of overdue amounts of principal of the Loan, if any;

 

		13.1.5.	fifth,
                                         in or towards repayment of due and payable amounts of principal (including any interest
                                         thereon), if any; and 

 

		13.1.6.	sixth,
                                         in or towards payment of any other sum due but unpaid hereunder.

 

The
Lender may vary the order set out above.

 

		14.	CALCULATIONS

 

		14.1.	Accounts

 

As
between the Borrower and the Lender, entries made into the accounts maintained by the Lender in connection with this Agreement
are prima facie evidence of the matters to which they relate for the purpose of any litigation or arbitration proceedings.

 

		14.2.	Certificates
                                         and determinations

 

Any
certification or determination by the Lender of a rate or amount hereunder shall set out the calculation in reasonable detail
and will be prima facie evidence of the matters to which it relates.

 

		14.3.	Calculations

 

Any
interest or fee accruing hereunder accrues from day to day and is calculated on the basis of the actual number of days elapsed
and a 365 day year.

 

    

     

    

 

33 

 

		15.	FEES
                                         AND EXPENSES

 

		15.1.	Each
                                         party shall bear all costs and expenses (including legal fees) incurred by it in connection
                                         with this Agreement including the enforcement of any of its rights hereunder. All fees
                                         required to arrange for the securities shall be paid by the Borrower.

 

		16.	ASSIGNMENTS
                                         AND TRANSFERS

 

		16.1.	Transfers
                                         by the Borrower

 

		16.1.1.	The
                                         Borrower must not permit or consent to any Transfer or disbursement of shares of the
                                         Borrower unless permitted under this Agreement or in respect of any change in the shareholder
                                         register of the Borrower by virtue of the perfection and enforcement of any Security
                                         Interest in the Borrower’s shares.

 

		16.1.2.	The
                                         Borrower and/or BSC may not Transfer any of their rights or obligations hereunder without
                                         the prior consent of the Lender.

 

		16.2.	Transfers
                                         by Lender

 

Subject
to obtaining any approvals required under Applicable Law (if any) and subject to the Borrower’s right to Prepay the Loan
under this Section 16.2, the Lender shall be entitled to Transfer any of its rights or obligations hereunder (including any charge
or pledge issued as a security for the repayment of the Loan) without the prior consent of the Borrower, provided that the Lender
shall notify the Borrower in a written notice of any such intent of Transfer no fewer than thirty (30) days prior to such Transfer.
The notice shall include information regarding the identity of the transferee and its signed written commitment to take on itself
all rights and obligations under this Agreement (“Notification of Transfer”). In the event of a Transfer by
the Lender, the Borrower shall have the right to notify the Lender that it wishes to Prepay the Prepayment Fee, within 30 days
of receiving the Notification of Transfer (“Prepayment Notification”). Should the Borrower deliver to the Lender
a Prepayment Notification and subject to the execution of such Prepayment including the Prepayment Fee in full within 30 days,
no Transfer shall occur.

 

		17.	CONFIDENTIALITY

 

		17.1.	No
                                         public announcement or other disclosure concerning the transactions contemplated hereunder
                                         shall be made by the Parties save in a form agreed between the Parties or otherwise as
                                         required by Applicable Law. To the extent an announcement is required under Applicable
                                         Law, the parties shall use their best efforts to agree the form of such announcement
                                         in due time and shall otherwise fulfil its obligations as required by Applicable Law
                                         by providing the minimum information required pursuant to such Applicable Law, at the
                                         discretion of the disclosing party, acting reasonably.

 

    

     

    

 

34 

 

		17.2.	The
                                         Parties shall not disclose any information concerning the transactions contemplated hereunder
                                         or the Plants and shall keep all such information confidential.

 

The
foregoing shall not apply with respect to:

 

		17.2.1.	information
                                         which is or becomes part of the public domain, other than as a result of any breach of
                                         the obligations of the recipient Party under this Agreement;

 

		17.2.2.	information
                                         explicitly approved for release by prior written authorization of the Parties;

 

		17.2.3.	information
                                         which is required to be disclosed by Applicable Law, provided that the relevant Party
                                         shall provide the other parties with prior written notice of the required disclosure
                                         and the disclosure shall be limited to the extent expressly required;

 

		17.2.4.	disclosure
                                         of any information to the employees, agents, representatives, advisors, current or potential
                                         investors of such party, provided that they are subject to obligations to keep such information
                                         confidential.

 

		18.	WAIVER
                                         OF CLAIMS 

 

		18.1.	The
                                         Borrower shall protect, defend, indemnify, and hold the Lender and its directors, employees
                                         and advisors harmless against and in respect of any and all loss, liability, deficiency,
                                         damage, cost, or expense, or actions (including reasonable legal fees and expenses) in
                                         respect of third party claims arising solely from actions or omissions of the Borrower
                                         in relation to the Loan Documents

 

    

     

    

 

35 

 

		19.	MISCELLANEOUS

 

		19.1.	Communications

 

All
notices or other communications hereunder shall be in writing and shall be given in person, by registered mail (registered international
air mail if mailed internationally), by an overnight courier service which obtains a receipt to evidence delivery, or by facsimile
transmission (provided that written confirmation of receipt is provided) with a copy by mail, addressed as set forth below:

 

	 	[
    ]	 
	 	 

                                                         If
                                         to the Borrower:

         

        [
        ]

         

        If
        to BSC:

         
	 
	 	[
    ]	 

 

or
such other address as any party may designate to the other in accordance with the aforesaid procedure. All communications delivered
in person or by courier service shall be deemed to have been given upon delivery, those given by facsimile transmission shall
be deemed given on the business day following transmission with confirmed answer back, and all notices and other communications
sent by registered mail (or registered air mail if the posting is international) shall be deemed given ten (10) days after posting.

 

All
communications between the parties with respect to this Agreement shall be in the English language.

 

		19.2.	Successors
                                         and Assignees 

 

This
Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties and their respective successors
and assigns.

 

		19.3.	Delays
                                         or Omissions; Waiver 

 

The
rights of a Party under this Agreement may be waived by such party only in writing and specifically; the conduct of any one of
the Parties shall not be deemed a waiver of any of its rights pursuant to this Agreement and/or as a waiver or consent on its
part as to any breach or failure to meet any of the terms of this Agreement or as an amendment hereto. A waiver by a Party in
respect of a breach by the other party of its obligations shall not be construed as a justification or excuse for a further breach
of its obligations.

 

No
delay or omission to exercise any right, power, or remedy accruing to any party hereto upon any breach or default by the other
under this Agreement shall impair any such right or remedy nor shall it be construed to be a waiver of any such breach or default,
or any acquiescence therein or in any similar breach or default thereafter occurring.

 

    

     

    

 

36 

 

		19.4.	Amendment
                                         

 

This
Agreement may be amended or modified only by a written document signed by all the Parties hereto.

 

		19.5.	Entire
                                         Agreement 

 

This
Agreement (together with the other documents contemplated hereby) contains the entire understanding of the Parties with respect
to its subject matter and all prior and contemporaneous negotiations, discussions, agreements, representations, commitments and
understandings between them with respect thereto not expressly contained herein shall be null and void in their entirety, effective
immediately with no further action required.

 

		19.6.	Severability

 

If
a provision of this Agreement is or becomes illegal, invalid or unenforceable in any jurisdiction, that shall not affect the validity
or enforceability in that jurisdiction of any other provision hereof or the validity or enforceability in other jurisdictions
of that or any other provision hereof.

 

Where
provisions of any Applicable Law resulting in such illegality, invalidity or unenforceability may be waived, they are hereby waived
by each party to the full extent permitted so that this Agreement shall be deemed valid and binding agreements, in each case enforceable
in accordance with its terms.

 

		19.7.	Counterparts,
                                         Facsimile Signatures 

 

This
Agreement may be executed in any number of counterparts, each of which shall be deemed an original but all of which together shall
constitute one and the same instrument. A signed Agreement received by a party hereto via facsimile will be deemed an original,
and binding upon the party who signed it.

 

		19.8.	Agent
                                         for Service of Process

 

BSC
and the Borrower hereby appoint Eastern Sphere, with an office as at 35 Assuta St. Even Yehuda Israel, 40500, Israel as its agent
to receive on behalf of BSC and/or the Borrower and/or Eastern Sphere, service of copies of the summons and complaint and any
other process which may be served in any action or proceeding in Israel in connection with this Agreement. Such service may be
made by post or personal delivery, care of Eastern Sphere at the above address, and BSC and the Borrower hereby authorizes and
directs Eastern Sphere to accept such service on its behalf and agrees that failure by such agent to notify either BSC, Eastern
Sphere or the Borrower of the process will not invalidate the proceedings concerned.

 

    

     

    

 

37 

 

		19.9.	Governing
                                         Law, Disputes and Venue

 

		19.9.1.	This
                                         Agreement shall be governed by and construed in accordance with the laws of the State
                                         of Israel without regard to conflicts of laws or the choice of law principles of any
                                         jurisdiction and without the need of any party to establish the reasonableness of the
                                         relationship between such laws and the subject matter of this Agreement.

 

		19.9.2.	All
                                         disputes, controversies, claims or differences between the Parties arising out of, in
                                         relation to or in connection with the Agreement, shall be referred to the arbitration
                                         upon the request of either Party, before the Arbitrator.

 

		19.9.3.	The
                                         arbitration shall be conducted in accordance with the Arbitration Law, 5728-1968 of Israel
                                         and shall be held as promptly as possible in Tel Aviv and at such time as the Arbitrator
                                         may determine. This Clause constitutes an arbitration agreement of the Parties as defined
                                         in the aforesaid Arbitration Law.

 

		19.9.4.	The
                                         Arbitrator shall resolve the dispute within 90 days. All arbitration proceedings shall
                                         be conducted in the Hebrew language (unless agreed otherwise by the Parties). The Arbitrator
                                         shall not be bound by the rules of evidence nor shall he/she be bound by procedure laws,
                                         but he/she shall be bound by substantive law and he/she will give reasons for his/her
                                         decision. The Arbitrator shall be entitled to make interim or temporary awards whether
                                         mandatory or prohibitive. The decision of the Arbitrator shall constitute an award but
                                         shall be subject to appeal in accordance with Section 29B of the Arbitration Law. The
                                         costs of the arbitral process, including fees and expenses of the Arbitrator, shall be
                                         borne as shall be decided by the Arbitrator.

 

		19.10.	Further
                                         Actions

 

At
any time and from time to time, each party agrees, without further consideration, to take such actions and to execute and deliver
such documents as may be reasonably necessary to effectuate the purposes of this Agreement.

 

    

     

    

 

38 

 

		19.11.	No
                                         Third-Party Beneficiaries

 

Nothing
in this Agreement shall create or confer upon any person or entity, other than the parties hereto or their respective successors
and permitted assigns, any rights, remedies, obligations or liabilities.

 

***

 

[Remainder
of this page intentionally left blank]

 

    

     

    

 

39

 

[Signature
Page of Long Term Mezzanine Loan Agreement]

 

IN
WITNESS WHEREOF, this Agreement has been duly executed on the date herein above set forth.

 

	/s/ Blue Sphere Corporation	 	 	/s/ Helios E.M. Investments
    L.P
	Blue Sphere Corporation	 	 	Helios E.M. Investments L.P
	 	 	 	 
	/s/ Bluesphere Italy SRL	 	 	 
	Bluesphere Italy SRLBLUE SPHERE CORPORATION 8-K 

 

Exhibit
10.2 

 

EQUITY
PLEDGE AGREEMENT

 

This
EQUITY PLEDGE AGREEMENT (this “Pledge Agreement”), is entered into

 

by
and between

 

BLUE
SPHERE Corp., incorporated and existing under the laws of Nevada, having its registered office at 301 McCullough Drive 4th.
Floor, Charlotte, NC 28262, represented by Mr. Shlomo Palas, [ ], acting in his capacity of CEO and legal representative of the
company, duly empowered for the purposes hereof (“Pledgor”),

 

and

 

Helios
3 Italy Bio-Gas 2 L.P, a limited partnership organized under the laws of the State of Israel, partnership number [●]
of Hakfar Hayarok Street, Ramat Hasharon, Israel, herein represented by its legal representative, Mr. Nimrod Goor, [ ] (“Secured
Party” or “Lender”),

 

(hereinafter
the Secured Party and the Pledgor are referred to individually as “Party” and collectively as “Parties”)

 

RECITALS

 

		1)	the
                                         Pledgor is the Sole Quotaholder of Bluesphere Italy S.r.l., a private limited liability
                                         company organized and existing under the laws of the State of Italy (Tax Code and VAT
                                         No. 09967150963) enrolled in the Companies’ Register of Milan No. 2124774, having
                                         its registered office at Corso Giacomo Matteotti, 1, Milan, (the “Company”
                                         or the “Borrower”), being the owner of the entire quota holding of
                                         the Company having a nominal value equal to Euro 10,000.00 (hereinafter the “Quota”);

 

		2)	on
                                         August 30th, 2017 the Company as “Borrower”, the Pledgor and the
                                         Lender entered into the Long Term Mezzanine Loan Agreement (hereinafter the “Loan
                                         Agreement”);

 

		3)	pursuant
                                         to the Loan Agreement, the Company is borrowing money (1,600,000.00 EUR) from Lender
                                         (the “Loan”);

 

		4)	pursuant
                                         to Section 4 of the Loan Agreement, the amount under Recital No. 3) above shall be re-paid
                                         to the Secured Party, increased with the interest on the Loan and the Operation Fee calculated
                                         pursuant to Section 6 of the Loan Agreement;

 

		5)	Section
                                         10.8 of the Loan Agreement provides that the [Pledgor and] Borrower shall maintain all
                                         Security Interests created under the Loan Securities as defined in the Loan Agreement
                                         for the benefit of the Secured Party;

 

		6)	among
                                         the Loan Securities provided by the Loan Agreement, the Pledgor undertook to enter into
                                         and maintain an Equity Pledge as defined in the Loan Agreement.

 

NOW,
THEREFORE, in consideration of the foregoing premises, the Parties hereto agree as follows:

 

		1.	Definitions
                                         and Interpretation

 

The
Recitals to this Pledge Agreement constitute an integral and substantive part of this Pledge Agreement and are binding between
the Parties.

 

     1

     

    

 

Terms
defined in the Loan Agreement shall have the same meaning where used capitalized in this Pledge Agreement, except where the context
otherwise requires.

 

In
this Pledge Agreement the following expressions shall have the following meanings:

 

	ICC	means
    Italian Civil Code.
	Pledge	has
    the meaning given to such term in Clause 2 below.
	Secured
    Obligations	means
        all liabilities and obligations of the Borrower under the Loan Agreement, including the following:

         

        (a)       any
        and all present and future monetary obligations of the Borrower and the Pledgor towards the Secured Party under the Loan
        Agreement including, without limitation:

        

-
     the obligation to repay or prepay (Sections 4 and 5 of the Loan Agreement) to the Secured Party the Loan; the obligation
to pay to the Secured Party interest (including, without limitation, default interest) accrued on any borrowing made or other
amount outstanding under the Loan Agreement (Sections 6 Loan Agreement);

        

-
    the obligation to pay to the Secured Party commissions, expenses, cost, fees, Operation Fee, charges, compensation, indemnity,
taxes or other liabilities due, owing or incurred to the Secured Party, all under the Loan Agreement;

        

-     
the obligation to pay any expenses or costs incurred by the Secured Party in respect of any recovery or collection of the amounts
due to it under the Loan Agreement, including any cost and expenses incurred in connection with the enforcement of this Pledge
Agreement and the security interest created hereunder;

        

        (b)       all
        present and future monetary obligations of the Borrower and the Pledgor towards the Secured Party resulting from the invalidity,
        ineffectiveness or unenforceability of any of the obligations referred to in paragraph (a) above;

        

        (c)       all
        present and future monetary obligations of the Borrower towards the Secured Party, which arise or might arise –
        also after the date of full and unconditional discharge of each of the obligations referred to in paragraphs (a) and (b)
        above – in case of claw-back or ineffectiveness, pursuant to the applicable law, of any payment made by the Borrower
        or any other person to discharge, in full or in part, any of the obligations referred to under letters (a) and (b) above.

         

		2.	Pledge
                                         

		2.1	Creation
                                         of the Pledge. As collateral security for the timely and full payment and discharge
                                         of any and all the Secured Obligations, and as provided in the Loan Agreement, the Pledgor
                                         hereby irrevocably grants in favor of the Secured Party a first ranking pledge over the
                                         Quota (the “Pledge”).

		2.2	Secured
                                         Obligations. The Pledge created hereunder secures, collectively and for the entire
                                         value, all the Secured Obligations and any of them individually, without the Secured
                                         Party being obliged to take further action against the Pledgor or enforce any other security
                                         interest which may have been granted by the Pledgor.

 

     2

     

    

 

		2.3	Formalities
                                         for the perfection of the Pledge. Within 10 Business Days from the signing of this
                                         Pledge Agreement, the Pledgor shall register it in the Companies’ Register, indicating
                                         the Secured Party as beneficiary of such a guarantee.

 

		3.	Validity
                                         of the Pledge

		3.1	Continuation
                                         of the Security. The Pledge creates a continuing security interest, in addition and
                                         without prejudice to any other security interest, guarantee or Loan Securities, as provided
                                         in the Loan Agreement.

		3.2	Modification
                                         and novation.

		3.2.1	Any
                                         modification whatsoever to the Loan Agreement or any part and/or provision thereof or
                                         one or more Secured Obligations will not affect or procure a novation of the Pledge,
                                         so that the Pledge shall be effective also on the said modifications from the date of
                                         execution of this Pledge Agreement.

		3.2.2	The
                                         Parties hereby expressly acknowledge and agree that, in accordance with article 1232
                                         ICC, the Pledge, all rights of the Secured Party under this Pledge Agreement and all
                                         obligations of the Pledgor hereunder shall maintain their full and unfettered validity
                                         and effectiveness also in case of novation of one or more Secured Obligations until this
                                         Pledge Agreement will be terminated according to Clause 8 below or unless it is agreed
                                         in writing between the Parties.

		3.2.3	Without
                                         prejudice to the provision of Clause 3.2.2 above, in case of one or more changes whatsoever
                                         of the Loan Agreement or any part and/or provision thereof, the Pledgor hereby irrevocably
                                         and unconditionally undertakes to promptly execute, at its expenses, any deed, agreement,
                                         document, act, certificate or instrument whatsoever, and shall take all the steps and
                                         actions, as the Secured Party might deem necessary or appropriate, or in any case request,
                                         in order to preserve the rights of the Secured Party under this Pledge Agreement and/or
                                         confirm the existence and continuation of the security rights and the Pledge under this
                                         Pledge Agreement in favor of the Secured Party.

 

		4.	Enforcement
                                         of the Pledge

		4.1	Pursuant
                                         to Section 12.5.3 of the Loan Agreement, at the time of occurrence of an Event of Default
                                         (as defined in the Loan Agreement) and if it is not cured by the Company within the Cure
                                         Period (as defined in the Loan Agreement), the Secured Party is entitled to take all
                                         steps required to enforce any of the Loan Securities provided and the relevant Security
                                         Interests thereunder.

		4.2	Any
                                         and all amounts due under the Loan Agreement shall be immediately due and payable without
                                         any further action to be carried out by the Lender.

		4.3	With
                                         specific regard to this Pledge Agreement, upon the occurrence of an Event of Default,
                                         the Secured Party is entitled to cause the sale of the Quota pursuant to the procedure
                                         provided for by articles 2796 and 2797 ICC.

 

     3

     

    

 

		5.	Voting
                                         right

		5.1	By
                                         way of derogation from article 2352 ICC, the Pledgor shall be entitled to exercise all
                                         voting rights attached to the Quota and exercise all other rights and powers in respect
                                         of the Quota in a manner which does not adversely affect the validity or enforceability
                                         of this Pledge (therefore until any amounts due under the Loan Agreement are not repaid
                                         to the Secured Party the Pledgor shall not pass any decisions which may cause the Company
                                         to sale or transfer assets and/or participations) or cause an Event of Default to occur
                                         with the exception of the voting rights concerning the adoption of the resolutions provided
                                         for by article 2479, II par., numbers 4 and 5 of the ICC and including any and all resolutions
                                         concerning any direct or indirect sale or the transfer of company assets and participations,
                                         that shall be exercised by the Pledgor having previously received the Secured Party’s
                                         consent, to be expressed in the shareholders’ meeting duly conveyed, to adopt such
                                         resolution. Following the occurrence of an Event of Default and provided that such Event
                                         of Default is not cured by the Company within the Cure Period (as defined in the Loan
                                         Agreement), the Secured Party shall be immediately vested with all voting and economical
                                         rights regarding the Quota and the Pledgor shall not, be able to exercise any voting
                                         rights or otherwise in relation to the Quota.

 

		6.	Pledgor’s
                                         Representations and Undertakings

		6.1	Representations

The
Pledgor hereby represents and warrants to Secured Party as follows:

		–	the
                                         Quota represents the entire issued corporate capital of the Company;

		–	it
                                         has not sold or disposed of all or any of its rights, title and interest on the Quota;

		–	except
                                         for this Pledge, the Quota is not encumbered, pledged or charged in any manner whatsoever;

		–	it
                                         has full power, authority, right and capacity to pledge, assign and deliver the Quota,
                                         as herein provided;

		–	the
                                         execution and delivery of this Pledge Agreement by the Pledgor and the fulfillment of
                                         or compliance with the terms and conditions of this Pledge Agreement by the Pledgor will
                                         not violate, contravene, breach or offend against or result in any default under any
                                         indenture, mortgage, lease, agreement, instrument, statute, regulation, order, judgment,
                                         decree or law to which the Pledgor is party or by which the Pledgor is bound or affected;

		–	it
                                         will not grant, bargain, sell, convey, assign, mortgage or grant a security interest
                                         in or otherwise deal with the Quota and will not make, create or give any charge, mortgage,
                                         pledge, lien, assignment or security interest upon any or all of the Quota until the
                                         indebtedness towards the Secured Party is repaid in full or fully settled;

		–	the
                                         Company will consent to and will record and implement any sale, transfer or retention
                                         of the Quota completed pursuant to the terms of this Pledge Agreement and in accordance
                                         with Clause 5 above.

		6.2	Undertakings

The
Pledgor hereby undertakes that during the subsistence of this Pledge Agreement, as Sole Quotaholder of the Company, it shall act
in good faith, and in particular shall not knowingly take any steps nor do anything which would adversely affect the existence
of the security interest created hereunder.

 

		7.	Termination

		7.1	When
                                         the Loan amount as well as any other amount due under the Loan Agreement have been unconditionally
                                         and irrevocable paid in full and (i) confirmed in writing by the Secured Party or (ii),
                                         lacking such confirmation, delivery by the Pledgor of evidence of the full payment of
                                         all amounts due under the Loan Agreement, this Pledge Agreement shall terminate and Pledgor
                                         shall be entitled to request discharge of the Pledge from the Quota by providing evidence
                                         of such payment in full

 

     4

     

    

 

		8.	Notices

		8.1	Any
                                         notice or demand to be served by one person on another pursuant to this Pledge Agreement
                                         shall be served in accordance with the provisions of the Loan Agreement.

If
to the Secured Party:

[
]

 

If
to the Pledgor:

[
]

 

		9.	Necessary
                                         Acts

		9.1	Each
                                         party hereto shall perform any further acts and execute and deliver any additional agreements,
                                         assignments or documents that may be reasonably necessary to carry out the provisions
                                         or to effectuate the purposes of this Pledge Agreement.

 

		10.	Entire
                                         Agreement

		10.1	This
                                         Pledge Agreement, together with the documents referenced herein, contains all of the
                                         agreements of the Parties hereto with respect to the matters contained herein and no
                                         prior or contemporaneous agreement or understanding, oral or written, pertaining to any
                                         such matters shall be effective for any purpose. No provision of this Pledge Agreement
                                         may be amended or added to except by an agreement in writing signed by the Parties hereto
                                         or their respective successors in interest and expressly stating that it is an amendment
                                         of this Pledge Agreement.

 

		11.	Governing
                                         Law and Jurisdiction

		11.1	This
                                         Pledge Agreement shall be governed by, interpreted under, and construed and enforced
                                         in accordance with Italian law and the Court of Milan shall have exclusive jurisdiction
                                         to settle any dispute which may arise from or in connection with it.

 

Date:
August 30th, 2017

 

	/s/
    Blue Sphere Corporation	 	/s/
    Helios 3 Italy Bio-Gas 2 L.P	 
	Blue Sphere Corporation	 	Helios 3 Italy Bio-Gas
    2 L.P	 

 

 

     5

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