SECOND LIEN LOAN AGREEMENT

Exhibit 10.1

SECOND LIEN LOAN AGREEMENT

This agreement (“ Agreement ”) is made and entered into as of August 20, 2009, by and among NORTH AMERICAN TECHNOLOGIES GROUP, INC. (“ NATK ”), a Delaware corporation, TIETEK TECHNOLOGIES, INC. (“ TTT ”), a Texas corporation, and TIETEK LLC (“ TieTek ” and together with NATK and TTT, the “ Borrowers ” and each individually a “ Borrower ”), a Delaware limited liability company, and OPUS 5949 LLC(f/k/a Tie Investors, LLC) (“ OPUS ” or “ Lender ”), a Texas limited liability company.

W I T N E S S E T H:

WHEREAS, Borrowers and Lender wish to enter into this Agreement in order to set forth the terms and conditions of the disbursement of the Loan.

NOW, THEREFORE, in consideration of the mutual promises hereinafter contained and of other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Borrowers and Lender hereby agree as follows:

ARTICLE I.

DEFINITIONS

1.1 Defined Terms . As used in this Agreement, the following terms shall have the meanings shown:

(a) “Advance” has the meaning assigned to such term in Section 2.1 .

(b) “Assets” Any rights or interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible of any Borrower, including, without limitation, any such rights or interests acquired by Borrowers after the date hereof and each of the following: (i) accounts; (ii) chattel paper (whether tangible or electronic); (iii) commercial tort claims; (iv) deposit accounts; (v) documents; (vi) equipment; (vii) financial assets; (viii) fixtures; (ix) general intangibles (including without limitation, all patents (issued and applied for), copyrights, trademarks, trade names, licenses, trade secrets and processes, and all other intellectual property of Borrowers); (x) goods; (xi) instruments; (xii) insurance claims and proceeds; (xiii) inventory; (xiv) investment property; (xv) letter of credit rights; (xvi) payment intangibles; (xvii) promissory notes; and (xviii) intellectual property; and all proceeds of the foregoing (as each such term used in clauses (i) through (xviii) above is defined in the Uniform Commercial Code as adopted and currently in force in the state of Texas (the “ UCC ”)).

(c) “Assignment of Leases and Rents” That certain Assignment of Leases and Rents executed by TieTek LLC as Assignor in favor of Lender as Assignee in form and substance acceptable to Lender.

(d) “Bankruptcy Code” has the meaning assigned to such term in Section 6.1(h) .

(e) “Business” The manufacture and production of composite railroad ties (and other such products manufactured by using the same or related technology) using licensed trade secrets, processes, and other intellectual property of Borrowers.

(f) “Business Day” means any day excluding Saturday, Sunday and any other day on which banks are permitted to be closed under the laws of the states of Texas.

(g) “Closing Date” shall mean the date upon which Borrowers and Lender have executed and delivered this Agreement.

(h) “Debentures” means the 8% Convertible Debentures of NATK in the original principal amount of up to $3,000,000 issued pursuant to that certain Securities Purchase Agreement dated July 25, 2007.

(i) “Debt” means as applied to any Person, without duplication, (a) all indebtedness for borrowed money, (b) all obligations evidenced by notes, bonds, debentures, credit documents or similar instruments, (c) all capital leases, (d) all obligations to pay the deferred purchase price of property or services, other than trade payables incurred and being paid in the ordinary course of business, (e) all obligations of a Person arising from a guaranty, indemnity or other assurance of payment or performance of any indebtness, lease, dividend or other obligation of another obligor in any manner, whether directly or indirectly, (f) all reimbursement obligations in connection with (x) letters of credit, bank guarantees or bankers’ acceptances issued for the account of such Person or (y) surety, customs, reclamation or performance bonds (in each case not related to judgments or litigation), (g) indebtedness secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse and (h) in the case of Borrowers, the Loans. The Debt of a Person shall include any recourse Debt of any partnership in which such Person is a general partner or joint venturer.

(j) “Deed of Trust” A Deed of Trust, Security Agreement, Assignment of Rents and Fixture Filing, conveying the Premises to the Trustee named therein and granting a security interest in certain property and rights for the benefit of Lender to secure payment of the Loans.

(k) “Default” means any event that, with the passage of time or notice or both, would, unless cured or waived become an Event of Default.

(l) “Deposit Account” has the meaning assigned to such term in the UCC.

2

(m) “Deposit Account Control Agreements” means a Deposit Account control agreement to be executed by each institution maintaining a Deposit Account for a Borrower, in favor of Lender, as security for the Loans.

(n) “Financing Statement” One or more Financing Statements executed by Borrowers in favor of Lender, perfecting the security interest in the Assets created by the Security Agreement and the Intellectual Property Security Agreement.

(o) “Event of Default” has the meaning assigned to such term in Section 6.1 .

(p) “Governmental Authority” The United States, the state, the county, and the city, or any other political subdivision in which the Premises is located, and any other political subdivision, agency or instrumentality exercising jurisdiction over the Borrowers, the Business, or the Premises.

(q) “Governmental Requirements” All laws, ordinances, statutes, codes, rules, regulations, orders and decrees of any Governmental Authority applicable to the Borrowers, the Business, or the Premises.

(r) “Improvements” An industrial complex comprised of six (6) buildings of approximately 189,449 square feet and appurtenant improvements located on the Land.

(s) “Insolvency Proceeding” means any case or proceeding commenced by or against a Person under any state, federal or foreign law for, or any agreement of such Person to, (a) the entry of an order for relief under the Bankruptcy Code, or any other insolvency, debtor relief or debt adjustment law; (b) the appointment of a receiver, trustee, liquidator, administrator, conservator or other custodian for such Person or any part of its Property; or (c) an assignment or trust mortgage for the benefit of creditors.

(t) “Intellectual Property Security Agreement” One or more agreements granting to Lender a lien on all of Borrowers’ intellectual property, including, but not limited to, all trademarks, copyrights, licenses, and patents (issued and applied for), in each case, in form and substance acceptable to Lender.

(u) “Land” The real property described in Exhibit A attached hereto and made a part hereof.

(v) “Lien” shall mean any interest in Property securing an obligation owed to, or a claim by, a Person other than the owner of the Property, whether such interest is based on contract, constitutional, common, or statutory law, and including, but not limited to, the lien or security interest arising from a mortgage, encumbrance, pledge, security agreement, conditional sale, or trust receipt, or a lease, consignment or bailment for security purposes. The term “Lien” shall include reservations, exceptions, encroachments, easements, rights of way,

3

covenants, conditions, restrictions, liens and other statutory, constitution, or common law rights of landlords, leases and other title exceptions and encumbrances affecting Property. For the purposes of this Agreement, any Borrowers shall be deemed to be the owner of any Property which it has acquired or holds subject to a conditional sale agreement, financing lease, or other arrangement pursuant to which title to the Property has been retained by or vested in some other Person for security purposes.

(w) “Loan” Any and all of (i) the loans made by Lender to Borrowers hereunder as evidenced by the Note, (ii) interest thereon, whether paid in cash or otherwise (including all interest that accrues after the commencement of any case or proceeding by or against any Borrower in a bankruptcy, whether or not allowed in such case or proceeding), and (iii) any other fees (including, without limitation, reasonable attorneys’ fees), expenses, loans, advances, debts, liabilities and obligations, for the performance of covenants, tasks or duties or for payment of monetary amounts (whether or not such performance is then required or contingent, or such amounts are liquidated or determinable) owing by any Borrower to Lender, and all covenants and duties regarding such amounts, of any kind or nature, present or future, whether incurred under this Agreement or any other Loan Document and whether or not evidenced by any note, agreement or other instrument.

(x) “Loan Documents” This Agreement, the Note, the Deed of Trust, the Security Agreement, the Intellectual Property Security Agreement, the Membership Interest Pledge Agreements and any other documents to be executed by Borrowers or any of their respective shareholders pertaining to the Loan, as the same may be amended, amended and restated or modified from time to time.

(y) “NATK” has the meaning assigned to such term in the preamble.

(z) “Note” A promissory note of even date herewith in substantially the form of Exhibit B attached hereto payable to the order of Lender and any promissory notes or other agreements evidencing any renewals, extensions, increases, amendments, modifications or restatements of the foregoing.

(aa) “OPUS” has the meaning assigned to such term in the preamble hereto.

(bb) “Organizational Documents” means, with respect to any Person, its charter, certificate or articles of incorporation, bylaws, articles of organization, limited liability agreement, operating agreement, members agreement, shareholders agreement, partnership agreement, certificate of partnership, certificate of formation, voting trust agreement, or similar agreement or instrument governing the formation or operation of such Person.

(cc) “Permitted Liens” means (i) Liens in favor of Lender securing the Loans and (ii) existing Liens shown on Schedule 3.1(g) and any renewals or

4

extensions thereof, provided that the Assets covered thereby are not increased and any renewal or extension of the obligations secured or benefited thereby do not increase the maximum outstanding principal amount of such obligations.

(dd) “Person” shall mean any individual, partnership, firm, corporation (including, but not limited to, Borrowers), association, joint venture, trust or other entity, or any government or political subdivision or agency, department or instrumentality thereof.

(ee) “Premises” The Land and the Improvements.

(ff) “Property” shall mean any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible, including, without limitation, the Assets and the Premises.

(gg) “Security Agreement” An agreement granting to Lender a lien on all of the Assets in form and substance acceptable to Lender.

(hh) “Solvent” shall mean with respect to any Person on a particular date, the condition that, on such date, (i) the fair value of the property of such Person is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such Person; (ii) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liabilities of such Person on its debts as they become absolute and matured; (iii) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature; and (iv) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute an unreasonably small amount of capital.

(ii) “TieTek” has the meaning assigned to such term in the preamble hereto.

(jj) “TTT” has the meaning assigned to such term in the preamble hereto.

(kk) “Title Company” Republic Title of Texas Inc. located at 6348 Gaston Avenue, Dallas, Texas 75214 or such other title company acceptable to Lender.

(ll) “UCC” has the meaning assigned to such term in the definition of “Assets”.

1.2 Rules of Construction . Unless otherwise specified, references in this Agreement or any of the appendices to a Section, subsection or clause refer to such Section, subsection or clause as contained in this Agreement. The words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole, including all annexes, exhibits and schedules, as the same may from time to time be amended, restated,

5

modified or supplemented, and not to any particular section, subsection or clause contained in this Agreement or any such annex, exhibit or schedule. Wherever from the context it appears appropriate, each term stated in either the singular or plural shall include the singular and the plural, and pronouns stated in the masculine, feminine or neuter gender shall include the masculine, feminine and neuter genders. The words “including”, “includes” and “include” shall be deemed to be followed by the words “without limitation”; the word “or” is not exclusive; references to Persons include their respective successors and assigns (to the extent and only to the extent permitted by the Loan Documents) or, in the case of governmental Persons, Persons succeeding to the relevant functions of such Persons; and all references to statutes and related regulations shall include any amendments of the same and any successor statutes and regulations. Whenever any provision in any Loan Document refers to the knowledge (or an analogous phrase) of any Borrower, such words are intended to signify that such Borrower has actual knowledge or awareness of a particular fact or circumstance or that such Borrower, if it had exercised reasonable diligence, would have known or been aware of such fact or circumstance. Unless otherwise specifically indicated, definitions of agreements and instruments in Section 1.1 shall mean and refer to such agreements and instruments as amended, modified, supplemented, restated, substituted or replaced from time to time in accordance with their respective terms and the terms of this Agreement and the other Loan Documents.

ARTICLE II.

THE LOAN

2.1 The Loan . Subject to and upon the terms, conditions and limitations contained in this Agreement and relying on the representations and warranties contained in this Agreement and the other Loan Documents, Lender agrees to lend to Borrowers in one draw, on the Closing Date, the principal sum of $100,000 (the “ Advance ”), the proceeds of which shall be used in strict compliance with the terms of Section 5.1 and shall constitute a Loan hereunder evidenced by the Note. The Borrowers authorize Lender to make the Advance directly to TieTek. Lender shall not have any further obligation to fund any further Advances or to lend any other amounts. The Loan shall bear interest as set forth in the Note. Principal and interest shall be due and payable as set forth in the Note. Amounts borrowed and repaid hereunder shall not be reborrowed.

2.2 Security for the Loan . The Loans shall be secured by (i) the Deed of Trust; (ii) the Security Agreement; (iii) the Intellectual Property Security Agreement; and (iv) the Membership Interest Pledge Agreements.

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

3.1 Representations and Warranties of Borrowers . Borrowers hereby represent and warrant to Lender that:

(a) Status and Authority of North American Technologies Group, Inc . NATK is a Delaware corporation duly organized and existing under the laws

6

of the state of Delaware and has the power, authority and legal right to carry on the business now being conducted by it and to enter into, and to engage in the transactions contemplated by, the Loan Documents. The execution and delivery of the Loan Documents and the performance and observance of the provisions thereof have been authorized in accordance with the certificate of incorporation and bylaws of NATK and will have been duly authorized by all necessary actions of the board of directors and shareholders of NATK.

(b) Status and Authority of TieTek Technologies, Inc . TTT is a Texas corporation duly organized and existing under the laws of the state of Texas and has the power, authority and legal right to carry on the business now being conducted by it and to enter into, and to engage in the transactions contemplated by, the Loan Documents. The execution and delivery of the Loan Documents and the performance and observance of the provisions thereof have been authorized in accordance with the articles of incorporation and bylaws of TTT and have been duly authorized by all necessary actions of the board of directors and shareholders of TTT.

(c) Status and Authority of TieTek LLC . TieTek is a limited liability company duly organized and existing under the laws of the state of Delaware and has the power, authority and legal right to own the Premises, to carry on the business now being conducted by it and to enter into, and to engage in the transactions contemplated by, the Loan Documents. The execution and delivery of the Loan Documents and the performance and observance of the provisions thereof have been authorized in accordance with all applicable laws and in accordance with the Regulations of TieTek and have been duly authorized by all necessary actions of the governing board and members of TieTek.

(d) Validity of Loan Documents . The Loan Documents are in all respects legal, valid and binding according to their terms, and the Deed of Trust, upon execution and delivery thereof, will grant to Lender a valid and enforceable lien upon and security interest in the Premises and fixtures of Borrowers located on or to be located thereon, and the Security Agreement and the Intellectual Property Security Agreement, collectively, grant to Lender a valid and enforceable lien upon, and security interest in, the Assets.

(e) Ownership of Assets . The Assets constitute all the assets necessary for or used in the operation of the Business. Borrowers has good, indefeasible title to the Assets, free and clear of all liens and encumbrances, except those listed on Schedule 3 . 1(g) .

(f) [ Intentionally Omitted ].

(g) Priority of Lien on Personalty . Except as set forth on Schedule 3 . 1(g) attached hereto, no security interest (except in favor of Lender) exists with respect to any Assets of Borrowers.

7

(h) Conflicting Transactions of Borrowers . The consummation of the transactions hereby contemplated and the performance of the obligations of Borrowers under and by virtue of the Loan Documents will not result in any breach of, or constitute a default under, any mortgage, deed of trust, lease, loan or credit agreement, corporate charter, bylaws, or other instrument to which Borrowers is a party or by which it or the Property may be bound or affected.

(i) Pending Litigation . Other than as set forth in Schedule 3.1(i), there are no material actions, suits or proceedings pending, or to the knowledge of Borrowers threatened, against or affecting Borrowers, the Property, or involving the validity or enforceability of any of the Loan Documents or the priority of the Liens thereof, at law or in equity, or before or by any Governmental Authority; and to Borrowers’ knowledge, it is not in default with respect to any order, writ, injunction, decree or demand of any court or any Governmental Authority.

(j) Violations of Governmental Requirements . Borrowers have no knowledge of any violations or notices of violations of any Governmental Requirements.

(k) No Consents Necessary . No consent of any other person, entity, or party, and no consent, license, approval or authorization of, or registration or declaration with, any Governmental Authority is required in connection with the execution, delivery, performance, validity or enforceability of the transactions contemplated by this Agreement or the Loan Documents.

(l) Condition of Premises . The Premises is not now damaged or injured as a result of any fire, explosion, accident, flood or other casualty.

(m) Financial Statements . The financial statements and the information regarding Borrowers heretofore delivered to Lender are true and correct in all material respects, having been prepared in accordance with generally accepted accounting principles applied on a consistent basis throughout the period covered thereby, and fairly present the financial condition of Borrowers as of the date thereof. No material adverse change has occurred in the financial condition of Borrowers reflected therein since the date thereof.

(n) Commissions . There are no brokerage commissions, finder’s fees or similar payments due third parties in connection with the transaction contemplated hereby

(o) No Homestead . The Land and Improvements thereon do not and will not constitute the residential or business homestead of Borrowers.

(p) Subsidiaries . Except for Borrowers, no subsidiary of NATK conducts any business or activity other than those incidental to its corporate existence or owns any material assets.

8

(q) Taxes; Governmental Charges . Borrowers have filed all tax returns and reports required to be filed and has paid all taxes, assessments, fees and other governmental charges levied upon any of them or upon any of their respective Properties or income which are due and payable, including interest and penalties, except (i) to the extent the same are being contested in good faith by appropriate actions or proceedings and for which adequate reserves for the payment thereof as required by generally accepted accounting principles have been provided, or (ii) to the extent the failure to file such returns or pay such taxes could not reasonably be expected to have a material adverse effect.

(r) Capital Structure . Schedule 3.1(r) hereto accurately reflects, as of the date hereof, the authorized, issued and outstanding equity of each Borrower and each of their subsidiaries, including the names of (and number and class of units or other equity securities held by) the record and beneficial owners of such securities. Except as set forth in Schedule 3.1(r) hereto, as of the date hereof, there are no outstanding shareholders or members agreements, voting agreements or other agreements of any nature which in any way restrict or effect the transfer, pledge or voting of any of the equity securities of any subsidiary of NATK or subject any of such securities to any put, call, redemption obligation or similar right or obligation of any nature.

(s) No Legal Bar or Resultant Lien . The execution, delivery and performance of the Loan Documents do not and will not violate or create a default under any provisions of the articles or certificate of incorporation, certificate of limited partnership, articles or certificate of organization, bylaws, partnership agreement, regulations or other organizational documents of NATK, TTT or TieTek or any contract, agreement, instrument or governmental requirement to which any of them is subject, or (except as contemplated in the Loan Documents) result in the creation or imposition of any Lien upon any Properties of any of them.

ARTICLE IV.

COVENANTS OF BORROWERS

4.1 Covenants of Borrowers . Borrowers hereby covenant and agree with Lender as follows:

(a) Loan Documents . No Borrower shall permit any default under the terms of the Loan Documents beyond the expiration of any applicable grace, notice, or cure period.

(b) Insurance . Borrowers shall obtain and maintain such insurance or evidence of insurance as Lender may reasonably require, together with endorsements to the policies naming Lender as a loss payee or an additional insured, as applicable, and containing provisions that such policies will not be canceled without thirty (30) days’ prior written notice having been given by the insurance company to Lender (unless a shorter time is prescribed by applicable insurance regulations), including, but not limited to, the following:

9

(c) Collection of Insurance Proceeds . Borrowers shall cooperate with Lender in obtaining for Lender the benefits of any insurance or other proceeds lawfully or equitably payable to it in connection with the transactions contemplated hereby and the collection of any indebtedness or obligation of Borrowers to Lender incurred hereunder (including the payment by Borrowers of the expense of an independent appraisal on behalf of Lender in case of a fire or other casualty affecting the Premises).

(d) Vouchers . Borrowers shall deliver to Lender, upon written demand, true copies of any contracts, bills of sale, statements, receipted vouchers or agreements under which any Borrower claims title to any materials, fixtures or articles incorporated in the Improvements or otherwise subject to the lien of the Deed of Trust.

(e) Prohibitions on Certain Actions . No Borrower shall without the written consent of Lender (which consent shall be given in Lender’s sole discretion) (a) create, incur, guarantee or suffer to exist any Debt (except any Debt existing on the date hereof pursuant to the agreements evidencing such Debt as in effect on the date hereof); (b) create or suffer to exist any Lien upon any Assets (except for Permitted Liens) or install or otherwise incorporate in the Improvements any materials, equipment or fixtures under any conditional sales agreements or security agreement whereby the right is reserved or accrued to anyone to remove or repossess any such items; (c) declare or make any declaration or payment of a distribution, interest or dividend on any equity interest (other than to another Borrower or a payment-in-kind) or any purchase, redemption, or other acquisition or retirement for value of any equity interest (other than to another Borrower) (collectively, “ Distributions ”); (d) make any acquisition of any assets or any acquisition of record or beneficial ownership of

10

any equity interests of a Person; or any advance or capital contribution to or other investment in a Person; (e) make any sale, lease, license, consignment, transfer or other disposition of any Assets (other than sales of inventory in the ordinary course of business); (f) make any loans or other advances of money to any Person; (g) make any payments (whether voluntary or mandatory, or a prepayment, redemption, retirement, defeasance or acquisition) with respect to any Debt (other than the Loans) prior to its due date under the agreements evidencing such Debt as in effect on the Closing Date, other than payments permitted to be paid under this Agreement; (h) merge, combine or consolidate with any Person, or liquidate, wind up its affairs or dissolve itself, in each case whether in a single transaction or in a series of related transactions; (i) change its name or conduct business under any fictitious name; change its tax or other organizational identification number; or change its form or state of organization; (j) form or acquire any subsidiary after the Closing Date; (k) amend, modify or otherwise change any of its Organizational Documents as in effect on the Closing Date except for any amendment, modification or other change that does not adversely affect Lender or any duty to pay the Loans; (l) become a party to or permit any subsidiary to become a party to any agreement (other than a Loan Document) that conditions or restricts the right of any Borrower to incur or repay the Loans, to grant Liens on the collateral securing the Loans, to declare or make Distributions to a Borrower, to modify, extend or renew the Loans, or to repay any intercompany Debt owed to Borrower; (m) engage in any business, other than its business as conducted on the Closing Date and any activities incidental thereto; or (n) amend or modify any material agreements or other material contracts or documents.

(f) Estoppel Certificate . Borrowers shall deliver to Lender, promptly after a written request therefor by Lender an estoppel certificate, duly acknowledged, stating the amount advanced to Borrowers under this Agreement and the amounts due on the Note and whether any offsets or defenses exist under or against the Note.

(g) Cooperation Regarding Financial Condition . Borrowers shall cooperate with Lender and its representatives to the end that Lender shall be fully apprised regarding Borrowers’ continuing financial condition and, upon written request of Lender or any of its representatives after execution and delivery of the Deed of Trust, will furnish Lender or such representatives such documents, instruments, financial statements or other information as are required to be furnished pursuant to the terms of the Deed of Trust. Borrowers shall maintain such documents, instruments and financial statements which relate to its financial condition.

(h) Indemnity of Lender . Borrowers shall indemnify and hold harmless Lender (for purposes of this subsection, the term “Lender” shall include the directors, officers, employees, attorneys and agents of Lender and any persons or entities owned or controlled by, owning or controlling, or under common control or affiliated with Lender) from and against, and reimburse them for, any

11

and all claims, demands, liabilities, losses, damages, causes of action, suits, obligations, judgments, penalties, costs and expenses (including, without limitation, reasonable attorney’s fees) of any kind whatsoever that may be imposed on, incurred by, or asserted against the Lender or any other indemnified party as a result of such Lender or any other indemnified party being a party to the Agreement or the transactions consummated pursuant to or arising out of this Agreement or otherwise relating to any of the Loan Documents, including, without limitation, on account of or in connection with any bodily injury or death or property damage occurring in or upon or in the vicinity of the Premises through any cause whatsoever or asserted against them on account of any act performed or omitted to be performed hereunder or on account of any transaction arising out of or in any way connected with the Premises. WITHOUT LIMITATION, IT IS THE INTENTION OF BORROWERS AND BORROWERS AGREE THAT THE FOREGOING INDEMNITIES SHALL APPLY TO EACH INDEMNIFIED PARTY WITH RESPECT TO CLAIMS, DEMANDS, LIABILITIES, LOSSES, DAMAGES, CAUSES OF ACTION, JUDGMENTS, SUITS, OBLIGATIONS, PENALTIES, COSTS AND EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEY’S FEES) WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE OF SUCH (AND/OR ANY OTHER) INDEMNIFIED PARTY OR ANY STRICT LIABILITY . HOWEVER, SUCH INDEMNITIES SHALL NOT APPLY TO ANY INDEMNIFIED PARTY TO THE EXTENT THE SUBJECT OF THE INDEMNIFICATION IS CAUSED BY OR ARISES OUT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNIFIED PARTY . The foregoing indemnities shall survive the termination of this Agreement, the foreclosure of the Security Agreement or the Intellectual Property Security Agreement or the Membership Interest Pledge Agreements or conveyance in lieu of foreclosure and the repayment of the Loans and the discharge and release of the Loan Documents. Any amount to be paid hereunder shall be subject to and governed by the provisions of Section 7.2 hereof.

(i) Protection of Intellectual Property . Borrowers shall take all steps required to preserve and protect all of its patents, patent applications, licenses, trademarks, trade names, and all other intellectual or other similar property, including, but not limited to, timely paying all royalties, license fees, filing fees or registration fees, and diligently defending all threats of infringement thereon and challenges to the validity thereof.

(j) Insurance Coverage . Borrowers will furnish to Lender, upon request, a summary of the insurance coverages of Borrowers in form and substance reasonably satisfactory to Lender; upon renewal of any such insurance policy, a copy of an insurance certificate summarizing the terms of such policy; and upon request of Lender, copies of the applicable policies.

(k) Other Information . Borrowers will furnish to Lender, with reasonable promptness, such other information about the business and affairs and

12

financial condition of Borrowers as Lender may reasonably request from time to time, including, without limitation, monthly accounts receivable aging and reconciliation, accounts payable aging and reconciliation, sales reports and inventory designations.

(l) Expenses and Approval of Documents . Borrowers shall pay all costs of closing the transactions contemplated by this Agreement (unless expressly waived in writing by Lender), including the Loan, and all fees and expenses of Lender with respect thereto, including, but not limited to, reasonable legal fees (including reasonable legal fees incurred by Lender subsequent to the closing of the Loan but incurred in connection with the disbursement, administration, collection or transfer of the Loan), title insurance premiums and other charges of the Title Company issuing the Mortgagee Title Policy, all environmental consulting fees and all other fees and expenses related to the environmental due diligence performed by Lender with respect to the Premises (including reasonable attorneys’ fees), appraisal fees, consulting architect fees, consulting inspection fees, advances, recording expenses, surveys, intangible taxes, all fees, costs and expenses (including reasonable attorneys’ fees) incurred in connection with the continued administration of the Loan Documents including any amendments, modifications, consents and waivers, expenses of foreclosure (including reasonable attorneys’ fees) and similar items, and shall allow all closing papers, Loan Documents and other legal matters to be subject to the approval of Lender’s attorneys. Borrowers agree to promptly pay all fees, costs and expenses (including reasonable fees, costs and expenses of attorneys, auditors, appraisers, consultants and advisors) incurred by Lender in connection with any amendment, waiver, consent with respect to the Loan Documents, Event of Default, work-out or action to enforce any Loan Document or to collect any payments due from Borrowers. All fees, costs and expenses for which Borrower is responsible under this Section shall be deemed part of the Loans when incurred, payable in accordance with the terms hereof and of the Note and secured by the collateral.

(m) Additional Documents . Borrowers shall:

13

(n) Audits and Field Exams . Lender, and its agents, appraisers, and advisors shall have the right of full access to, and may visit, the Borrowers’ business, upon reasonable notice, to (i) inspect the collateral of the Lender; (ii) conduct field exams of the Borrowers’ business, (iii) take copies and extracts from the Borrowers’ books and records and inspect the Borrowers’ facility, (iv) conduct on-site monitoring thereof, and (v) obtain information requested by the Lender as to such matters relating to the Borrowers’ business operations