S-1

As filed with the Securities and Exchange Commission on October 7, 2021.

Registration No. 333-    ​

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM S-1

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

FLEXENERGY GREEN SOLUTIONS, INC.

(Exact name of registrant as specified in its charter)

Delaware	3629	86-1384045
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)

112 Corporate Drive
Portsmouth, NH 03801
(603) 430-7000

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Mark Schnepel
Chief Executive Officer
FlexEnergy Green Solutions, Inc.
112 Corporate Drive
Portsmouth, NH 03801
(603) 430-7000
(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Garett Sleichter, Esq.
Rutan & Tucker, LLP
18575 Jamboree Road
Suite 900
Irvine, CA 92612
Phone (714) 641-5100
Fax (714) 546-9035 Michael A. Hedge, Esq.
K&L Gates LLP
1 Park Plaza
Twelfth Floor
Irvine, CA 92614
Phone (949) 253-0900
Fax (949) 253-0902

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box: ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒
Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Proposed Maximum Aggregate Offering Price(1)(2)			Amount of Registration Fee
Common Stock	​	$	40,250,000	​	$	3,731.17
Underwriters’ Warrants	​	$	1,207,500	​	$	111.94
Total	​	$	41,457,500	​	$	3,843.11

(1)

Includes the aggregate offering price of common stock that may be sold if the option to purchase additional shares of our common stock granted by the registrant to the underwriters is exercised. See “Underwriting.”

(2)

Estimated solely for the purpose of calculating the amount of the registration fee in accordance with Rule 457(o) of the Securities Act of 1933, as amended.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. We and the selling stockholder may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and is not the solicitation of an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to completion, dated October 7, 2021

PRELIMINARY PROSPECTUS

            Shares of Common Stock

FlexEnergy Green Solutions, Inc.

We are offering        shares of our common stock, par value $0.0001 per share in this offering. Prior to this offering, there has been no public market for our securities. We estimate that the initial public offering price per share will be between $       and $      . We have applied to list our common stock on The Nasdaq Capital Market (“Nasdaq”) under the symbol “FLXE”.

The offering is being underwritten on a firm commitment basis. The selling stockholder named herein has granted the underwriters an option to buy up to an additional        shares of common stock from them to cover over-allotments. The underwriters may exercise this option at any time and from time to time during the 30-day period from the date of this prospectus. We will not receive any proceeds from the sale of shares of our common stock by the selling stockholder.

​	No Exercise of Over- Allotment					Full Exercise of Over- Allotment
​	Per Share			Total		Per Share			Total
Initial public offering price	​	$		​	$	​	$		​	$
Underwriting discounts and commissions(1)	​	$		​	$	​	$		​	$
Proceeds to us, before expenses	​	$		​	$	​	$		​	$
Proceeds to the selling stockholder, before expenses	​	$		​	$	​	$		​	$

(1)

In addition, we have agreed to reimburse the underwriters for certain expenses. See “Underwriting” on page        of this prospectus for additional information.

We have agreed to issue warrants exercisable within three years after the effective date of this prospectus representing 2.5% of the securities issued in this offering to Roth Capital Partners. The warrants will be exercisable at a per share exercise price equal to 120% of the initial public offering price. See “Underwriting — Underwriters’ Warrants.”

We are an “emerging growth company” and a “smaller reporting company” as defined under federal securities laws and, as such, have elected to comply with certain reduced public company reporting requirements. See “Prospectus Summary — Implications of Being an Emerging Growth Company and a Smaller Reporting Company.”

After the completion of this offering, we will be a “controlled company” within the meaning of Nasdaq corporate governance standards. See “Prospectus Summary — Implications of Being a Controlled Company.”

Investing in our common stock involves a high degree of risk. See the section captioned “Risk Factors” beginning on page 13 of this prospectus for a discussion of information that should be considered in connection with an investment in our common stock.

Neither the Securities and Exchange Commission nor any other state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the shares of common stock to the purchasers on or about            , 2021.

Roth Capital Partners

The date of this prospectus is            , 2021

TABLE OF CONTENTS

​	Page
Prospectus Summary	​	1
The Offering	​	8
Summary Historical Combined Consolidated Financial Data	​	10
Risk Factors	​	13
Special Note Regarding Forward-Looking Statements	​	35
Use of Proceeds	​	37
Dividend Policy	​	38
Capitalization	​	39
Dilution	​	40
Management’s Discussion and Analysis of Financial Condition and Results of Operations	​	42
Business	​	58
Management	​	67
Executive and Director Compensation	​	71
Certain Relationships and Related Party Transactions	​	76
Principal and Selling Stockholders	​	79
Description of Capital Stock	​	80
Shares Eligible for Future Sale	​	83
Material U.S. Federal Income Tax Consequences to Non-U.S. Holders of Our Common Stock	​	85
Underwriting	​	89
Legal Matters	​	98
Experts	​	98
Where You Can Find Additional Information	​	98
Index to Combined Consolidated Financial Statements	​	F-1

Until            , 2021, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

We have not, and the underwriters have not, authorized anyone to provide you with different information, and we and the underwriters take no responsibility for any other information others may give you. We are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than its date.

For Investors Outside of the United States

We have not, and the underwriters have not, done anything that would permit this offering or possession of distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the U.S. Persons who come into possession of this prospectus and any free writing prospectus we may authorize for use in connection with this offering in jurisdictions outside the U.S. are required to inform themselves about and to observe any restrictions as to this offering and the distribution of this prospectus and any such free writing prospectus applicable to that jurisdiction.

Basis of Presentation

The financial information provided in this prospectus consists of the consolidated and combined financial information of FlexEnergy, Inc. (“FEI”), and Flex Leasing Power & Service LLC (“FLPS”).

i

FlexEnergy Green Solutions, Inc. (“FGS”) was formed on December 31, 2020 as a Delaware corporation, and will become a wholly-owned subsidiary of FlexEnergy Power Solutions, LLC (“FPS”) upon completion of the Contribution Transaction described below, FGS has not, to date, conducted any activities other than those incident to its formation and the preparation of the registration statement of which this prospectus is a part. At or prior to the closing of this offering, FPS will contribute its equity interests in FEI and FLPS to FGS, and FEI and FLPS will become wholly owned subsidiaries of FGS. We refer to these contributions collectively as the “Contribution Transaction.” In addition, on August 16, 2021, FPS entered into a Simple Agreement for Future Equity (“SAFE”) with RNS Flex, LLC (RNS”) and TRF Platform Holdings, LLC (“TRF”) whereby, for an aggregate investment of $2,000,000 (but with a call right in favor of FPS for up to an additional $1,000,000) (the aggregate amount so invested being referred to as the “Invested Amount”), RNS and TRF received the right to receive from FPS (i) if the underwriters’ over-allotment exercise is exercised, a cash payment from the net proceeds received by FPS equal to 125% of the Invested Amount (the “Cash Payment”) or (ii) if the net proceeds received by FPS as a result of an over-allotment exercise are insufficient to pay the full Cash Payment to RNS and TRF, a number of the shares of FGS common stock issued to FPS in the Contribution Transaction equal to the Invested Amount minus 80% of the Cash Payment, divided by 80% of the issuance price per share in this offering (the “SAFE Transaction”). See “Certain Relationships and Related Party Transactions  —  SAFE Transaction.”

FGS will be the financial reporting entity following this offering. Other than the balance sheets as of December 31, 2020 and June 30, 2021, financial information of FGS has not been included in this prospectus as since its formation on December 31, 2020 it has not entered into any business transactions or activities, has no capitalization, and had no assets or liabilities during the periods presented in this prospectus.

Trademarks, Trade Names and Service Marks

“FlexEnergy Green Solutions, Inc.” and other registered or common law trademarks, service marks or trade names appearing in this prospectus are the property of FGS or one of its subsidiaries (after completion of the Contribution Transaction). Other trademarks, service marks or trade names appearing in this prospectus are the property of their owners. We do not intend our use or display of other companies’ trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies. We have omitted the ® and ™ designations, as applicable, for the trademarks used in this prospectus.

Market, Industry and Other Data

Unless otherwise indicated, information contained in this prospectus concerning our industry and the markets in which we operate, including our general expectations and market position, market opportunity and market size, is based on reports from various sources. Because this information involves a number of assumptions and limitations, you are cautioned not to give undue weight to such information. Information based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties, and actual events or circumstances may differ materially from events and circumstances that are assumed in this information. The information in any such publication, report, survey or article is not incorporated by reference in this prospectus. In addition, projections, assumptions and estimates of our future performance and the future performance of the industry in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section captioned “Risk Factors” and elsewhere in this prospectus. See “Special Note Regarding Forward-Looking Statements.”

ii

PROSPECTUS SUMMARY

This summary highlights selected information that is presented in greater detail elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our common stock. You should read this entire prospectus carefully, including the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our combined consolidated financial statements and the related notes included elsewhere in this prospectus before making an investment decision. Unless the context otherwise requires, the terms “FlexEnergy,” “the Company,” “we,” “us” and “our” refer to (i) upon completion of this offering, FGS and, unless otherwise stated, all of its subsidiaries, and (ii) prior to the completion of this offering, FEI and FLPS and, unless otherwise stated, all of their consolidated subsidiaries.

Our Company

We are an energy focused technology company that designs, manufactures, sells and leases cost-effective energy solutions that lower our customers’ environmental footprint, often by making useable energy from sources of fuel or heat otherwise overlooked or wasted. We do this through two different types of highly engineered products. First, our Flex Turbines offer a reliable source for distributed or grid connected electrical power, capable of being fired by a wide variety of gaseous fuels from waste gas from landfills and natural gas flaring to higher BTU fuels such as propane and synthetic gas. Leasing and sales of Flex Turbines presently represent the bulk of our operations and revenues. Flex Turbines provide our customers with solutions to gain independence over their electricity generation and minimize overall reliance on the grid. Second, we offer heat recovery products that are integral to promising emerging power technologies, such as high efficiency fuel cells for power generation that can be fueled by hydrogen or natural gas. These Flex Heat Recovery products are in the early stages of commercialization, and presently constitute a small but increasingly growing and important portion of our operations and revenues as the future of energy generation emerges.

We focus on providing proven technology and support that enables reliable, efficient and economic green energy solutions. Our business consists of leasing and service of our Flex Turbines supported by a vertically integrated OEM, together with direct sales of our Flex Turbine and Flex Heat Recovery systems. As of June 30, 2021, we have amassed over 8.4 million hours of field runtime on our turbine fleet with over 120 megawatts (“MW”) shipped, of which 49 MW make up our lease fleet. This balance of core competencies in turbine power and heat recovery with current cash flow generation helps fund growth of our technology suite and expansion of applications into new and existing markets. The primary applications of our technology include: converting waste gas to useful energy, improving traditional processes and enabling emerging clean technology. We are actively expanding into other key markets for which our products are well suited, and we are confident in generating opportunities in additional geographic markets and product extensions into different applications.

Our combined consolidated financial statements have been prepared as though we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. We have incurred operating losses and negative cash flows from operations since inception. As of June 30, 2021, we had an accumulated deficit of approximately $136.15 million. Management expects to continue to incur operating losses and negative cash flows from operations through the remainder of 2021. We are dependent upon the receipt of additional capital investments and other financings to fund our ongoing operations and may need to raise additional capital in order to continue to fund operations. We believe we will be able to obtain additional capital through equity financings or other arrangements to fund operations; however, there can be no assurance that such additional financing, if available, can be obtained on acceptable terms. If we are unable to obtain such additional financing, future operations would need to be scaled back or discontinued. Accordingly, these factors raise substantial doubt about our ability to continue as a going concern within one year after the date the combined consolidated financial statements are issued. See “Risk Factors — Risk Factors Relating to our Business and Industry — Our management has expressed substantial doubt about our ability to continue as a going concern without additional capital investment.”

1

Primary Applications

The primary applications of our technology include:

•

Converting Waste Gas to Useful Energy:   The Flex Turbine can run on waste fuels such as methane from landfills and carbon dioxide (“CO2”) heavy field gas from oil producing wells down to 350 BTUs, as well as synthetic gasses such as ethane produced in the refining process with up to 2,500 BTUs to produce reliable, distributed electricity.

•

Improving Traditional Processes:   Flex Heat Recovery systems utilize our proprietary highly efficient, high temperature, high pressure heat exchanger technology. These products have a smaller footprint than competing systems due to their design efficiency, making them ideal for space constrained applications. They are currently being evaluated by potential customers for the next generation of carbon capture technology, multiple fuel cell applications, and emissions reduction projects. The Flex Turbine can be installed in Commercial and Industrial (“C&I”) applications to generate power and heat and/or cooling to reduce facility operating costs. Flex Turbines can simultaneously provide backup power capability to improve resiliency and keep operations running through utility power outages. Moreover, Flex Turbines are capable of generating power on industrial fuels that might otherwise be wasted, further improving C&I operating margins.

•

Enabling Emerging Clean Technology:   Efficient use of thermal energy is the key to energy efficiency in many of today’s most promising alternative fuel technologies, such as solid oxide fuel cells for power generation technologies, for green hydrogen production, and for certain heat as energy storage applications. We believe our Flex Heat Recovery products enable these green technologies to be more cost competitive with conventional forms of energy production.

Products

•

Turbine Solutions:   Flex Turbines provide scalable, modular on-site power to both off-grid and grid dependent environments.

•

Heat Recovery Solutions:   Flex Heat Recovery systems have been used in a broad array of applications, from the extension of the range of turbine powered destroyers in the British Navy, to large scale fuel cell applications for power generation, to being prototyped into key components in the oncoming hydrogen economy, such as solid oxide fuel cells.

Our Market Opportunity

We believe that the world is looking for cleaner, reliable electrical power alternatives both to replace existing sources and to provide electrical power where electricity is not available or reliable. Additionally, we believe the adoption of new emerging technologies and fuels will expand our opportunities to grow.

In 2020, approximately 4.0 trillion kilowatt-hours (“kwh”) were generated from utility-scale facilities, of which 40% comprised natural gas, 19% coal, 20% nuclear, 20% renewables and 1% petroleum and others. Natural gas is one of the most abundant and available sources of clean energy as market trends such as the electrification of vehicles and the phasing out of coal-fired plants becomes more commonplace.

Power generation from fossil fuels and the associated release of CO2 as a byproduct has been shown to be a contributing factor to global climate change. The world continues to rely on technology advances combined with best practices to reduce greenhouse gas emissions.

The following trends have increased onsite, lesser emissions power demand from customers in a growing number of markets, and we expect them to continue to do so:

•

Continued growth in electricity demand, including for transportation

•

Decarbonization efforts to mitigate climate change peril, including carbon taxes

2

•

Natural gas as replacement for coal and oil-fired equipment and processes

•

Secular shift to distributed generation to assure power quality and avoid the cost of expanding aging and inefficient transmission infrastructure

•

Emergence of zero or low pollution alternative sources of power in the hydrogen economy, including fuel cells, solar and wind power

•

A drive for energy efficiency causing many industries to look for ways to eliminate wasted energy consumption

We believe that these trends will expand the market opportunity for Flex Turbine solutions and Flex Heat Recovery systems.

Our Growth Strategy

Our chief objective is to be a primary provider of clean, affordable and reliable energy. In order to accomplish this, we intend to:

•

Accelerate growth in underpenetrated markets and expand our geographic footprint.   We believe the total market opportunity for modular, onsite power remains significantly under-penetrated in the U.S. The flexibility and reach of our leasing model, coupled with our scalable turbine packages, allow us to increase market penetration and enter new markets quickly and efficiently. We plan to strengthen our existing relationships and identify new sub-sectors to accelerate our growth. We will seek to enter new markets and geographies over time, both in the U.S. and internationally, where climate, demand for clean energy and regulatory policies position turbine power generation as an economically compelling alternative to centralized electric utilities.

•

Continued deployment of our turbine fleet and heat recovery solutions to our customers.   We believe that integrated energy systems enhance the reliability, resiliency and predictability of turbine-generated electricity in certain markets, increasing the overall value proposition to customers. We expect demand for the Flex Turbine with on-board hot water heat exchanger, our combined heat and power (“CHP”) solution, to increase over time. We also expect continued requests by our customers to integrate our energy systems with existing energy storage (e.g. photovoltaic battery cells) to provide additional resiliency.

•

Broaden and enhance service offerings.   We provide ongoing monitoring and service as a standard component of our leasing agreements. We believe there is significant market demand for long-term protection plans for customers who have chosen to finance or purchase systems rather than lease them, and we will strive to capture a significant share of this market. We plan to expand our green energy product and service offerings to provide further cost savings to our customers and optimize the performance of existing traditional processes.

•

Increase Inventory to Shorten Delivery Times.   Flex Turbines currently are built upon order with a six or more month lead time from order to completion. By investing in additional inventory levels and building certain sub-assemblies in advance, we believe we can substantially shorten the time to delivery and thereby improve our appeal to customers searching for prompt energy solutions.

Summary Risk Factors

Our business is subject to numerous risks and uncertainties, including those in the section captioned “Risk Factors” and elsewhere in this prospectus. These risks include, but are not limited to, the following:

•

If we fail to retain existing customers, derive revenue from existing customers consistent with historical performance or acquire new customers cost-effectively, our business could be adversely affected. We are subject to substantial customer concentration. In times of market surplus, our rental prices are subject to enhanced market pressure.

3

•

The volatility in the price of oil affects the growth rate of new oil wells coming online. This commodity price volatility may adversely affect the demand for our products and services and negatively impact our results of operations.

•

Our products involve a lengthy sales cycle, and we may not anticipate sales levels appropriately, which could adversely affect our results of operations.

•

We have limited operating history with our line of heat recovery products and, as a result, if our estimates of product efficacy, maintenance and repair costs or useful life are inaccurate our business and financial results could be harmed.

•

The majority of turbines we sell or lease currently run with natural gas as the primary input fuel. As a fossil-fuel based solution, natural gas power generation products are subject to a heightened risk of regulation and to changes in our customers’ energy procurement policies.

•

We currently rely on a limited number of suppliers for certain parts and equipment to build our products, and we may not be able to find replacements or immediately transition to alternative suppliers, which could adversely affect our business, financial condition and results of operation.

•

Our credit facility subjects FLPS and its subsidiaries to financial and other restrictive covenants. These restrictions may limit our operational or financial flexibility and could subject us to potential defaults under the credit facility. In addition, any default could result in foreclosure.

•

Our substantial indebtedness could limit our opportunities for growth.

•

The distributed generation market is highly competitive. Competing solutions for distributed energy include renewables such as solar, wind and storage, gas-fired reciprocating engines, fuel cells and other gas turbines, any or all which might be perceived as superior to our technology, for economic, ecological or other reasons.

•

We anticipate that some portion of our future products and performance will rely on the adoption and availability of hydrogen gas as a fuel source and an insufficient supply of hydrogen could negatively affect our sales growth.

•

We anticipate engineering our products to run on fuel blends with a greater percentage of hydrogen. However, if we are unsuccessful or if there is an insufficient supply of hydrogen, our sales growth could be adversely affected.

•

If we are unable to attract and retain key employees and hire qualified management, technical, engineering, and sales personnel, our ability to compete and successfully grow our business could be harmed.

•

Our management has expressed substantial doubt about our ability to continue as a going concern without additional capital investment.

•

We have identified material weaknesses in our internal control over financial reporting and our information technology environment. We may identify additional material weaknesses in the future that may cause us to fail to meet our reporting obligations or result in material misstatements of our combined consolidated financial statements. If we fail to remediate any material weaknesses or if we fail to establish and maintain effective control over financial reporting, investors may lose confidence in our ability to provide reliable and timely financial reports and the value of our common stock may decline.

•

At many of our customers’ oil production sites, we utilize the abundant associated gas that is otherwise flared as our primary input fuel. Should midstream infrastructure be put into place that allows the associated gas to be processed and transported to end markets, it would curtail our volume of input fuel for onsite power generation and adversely affect our costs or ability to meet the customer’s power generation demand.

•

Our largest stockholder, FPS, has a series of senior secured notes that are currently due in full at October 31, 2022, that if not extended or renegotiated, could cause FPS to sell shares of our common stock, which could adversely affect our stock price.

4

•

FPS’ Series B and Series B-1 Units have redemption rights that, if exercised, could cause FPS to sell shares of our common stock to pay for the redemption, which could adversely affect our stock price.

Corporate History, Contribution Transaction and SAFE Transaction

On April 2, 2008, FlexEnergy, LLC was initially formed in Delaware in connection with a contribution of certain thermal oxidizer technology assets. Assets related to the thermal oxidizer technology were later contributed to a wholly owned subsidiary, Flex Power Generation, Inc., and all of the outstanding shares of Flex Power Generation, Inc. were distributed to the stockholders of FEI as a special dividend on November 13, 2012.

On December 31, 2010, (i) FEI was converted from FlexEnergy, LLC, (ii) FlexEnergy Energy Systems, Inc. (“FEES”) was incorporated as a wholly owned subsidiary of FEI, and (iii) FEES purchased from Ingersoll Rand Energy Systems Corporation certain assets relating to the development, manufacture, sale and service of turbines.

On January 8, 2014, FEI, FlexEnergy Holdings, LLC and FlexEnergy Merger Sub, Inc. entered into an Agreement and Plan of Merger whereby (i) each then outstanding share of stock and stock option of FEI was converted into a corresponding ownership unit and ownership unit option of FlexEnergy Holdings, LLC, and (ii) FlexEnergy Holdings, LLC became the sole stockholder of FEI at that time.

On December 31, 2015, FPS was formed in Delaware in connection with the contributions of all of the outstanding shares of stock of FEI and all of the outstanding membership interests of FLPS. As a result of the associated transactions, FEI and FLPS became wholly owned subsidiaries of FPS.

On December 31, 2020, FGS was formed in Delaware. On or prior to the closing of this offering FPS intends to contribute all of its assets, which consist solely of 100% equity interests in FEI and FLPS, to FGS, which will result in FEI and FLPS becoming wholly owned subsidiaries of FGS. The diagram below shows our corporate structure after completion of the Contribution Transaction and the SAFE Transaction.

Following the completion of the Contribution Transaction and the SAFE Transaction, and assuming no exercise of the underwriters’ over-allotment exercise, the number of shares of common stock of FGS owned by FPS, RNS and TRF and thus outstanding prior to this offering will be        shares of common stock, assuming an offering price of $       per share of common stock, which is the midpoint of the range on the front cover of this prospectus. However, the precise number of shares of common stock owned by FPS, RNS and TRF as a result of the Contribution Transaction and the SAFE Transaction will differ if the actual initial offering price per share differs from this assumed price in order to preserve the value due to each holder. For example, if the initial offering price of common stock in this offering is (i) $       per share, which is the low point of the price range indicated on the front cover of this prospectus, we would issue        shares of common stock to FPS, and (ii) $       per share, which is the high point of the price range indicated on the front cover of this prospectus, we would issue        shares of common stock to FPS,      of which would be transferred to RNS and TRF in the SAFE Transaction. The following diagram assumes no exercise of the underwriters’ over-allotment option.

5

Corporate Information

Our principal executive offices are located at 112 Corporate Drive, Portsmouth, NH 03801. Our telephone number is (603) 430-7000. The address of our website is www.flexenergy.com. The information on or that can be accessed through our website is not incorporated by reference into this prospectus, and you should not consider any such information as part of this prospectus or in deciding whether to purchase our common stock.

6

Implications of Being an Emerging Growth Company and a Smaller Reporting Company

We are an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. We will remain an emerging growth company until the earlier of (1) the last day of the year following the fifth anniversary of the consummation of this offering, (2) the last day of the year in which we have total annual gross revenue of at least $1.07 billion, (3) the last day of the year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which would occur if the market value of our common stock held by non-affiliates exceeded $700,000,000 as of the last business day of the second fiscal quarter of such year or (4) the date on which we have issued more than $1 billion in non-convertible debt securities during the prior three-year period. An emerging growth company may take advantage of specified reduced reporting requirements and is relieved of certain other significant requirements that are otherwise generally applicable to public companies. As an emerging growth company:

•

we are presenting herein only two years of audited combined consolidated financial statements and related management’s discussion and analysis of financial condition and results of operations;

•

we will avail ourselves of the exemption from the requirement to obtain an attestation report from our auditors on the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002 (“Sarbanes Oxley”);

•

we will provide less extensive disclosure about our executive compensation arrangements; and

•

we will not be required to hold stockholder non-binding advisory votes on executive compensation or golden parachute arrangements.

In addition, under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until those standards apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act.

We are also a smaller reporting company as defined under federal securities laws. We may continue to be a smaller reporting company so long as either (i) the market value of our stock held by non-affiliates is less than $250,000,000 or (ii) our annual revenue was less than $100,000,000 during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700,000,000. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. For so long as we remain a smaller reporting company, we are permitted to rely on exemptions from certain disclosure and other requirements that are applicable to other public companies that are not smaller reporting companies.

As a result, the information that we provide to our stockholders may be different than the information you might receive from other public reporting companies in which you hold equity interests.

Implications of Being a Controlled Company

After the Contribution Transaction and prior to the completion of this offering, FPS will own 100% of our common stock and, after completion of this offering, FPS will own approximately       % of our common stock (or       % if the underwriter exercises in full its option to purchase additional shares of our common stock from FPS). As a result, we will be a “controlled company” within the meaning of Nasdaq corporate governance standards because more than 50% of our voting common stock is owned by FPS. For further information on the implications of this distinction, see “Risk Factors – Risk Factors Relating to Ownership of Our Common Stock – We are a “controlled company” within the meaning of the rules of Nasdaq and, as a result, will qualify for, and may rely on, exemptions from certain corporate governance requirements.”

7

THE OFFERING

Common stock we are offering

       shares

Common stock to be outstanding immediately after this offering

       shares

Underwriters’ over-allotment option

The selling stockholder has granted the representative of the underwriters a 30 day option to purchase up to            additional shares of our common stock at a public offering price of $       per share.

Use of proceeds

We estimate that the net proceeds from the sale of the common stock in this offering will be approximately $      , based upon the initial public offering price of $       per share (which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus), after deducting the underwriting discount and estimated offering expenses payable by us. We will not receive any proceeds from the sale of shares of common stock by the selling stockholder.

The principal purposes of this offering are to increase our financial flexibility, create a public market for our common stock and to facilitate future access to the public equity markets for us and our stockholders. We currently intend to use the net proceeds from this offering for next generation product development, to expand our fleet to support our Energy-as-a-Service (“EaaS”) model, to expand our sales force, to pay down outstanding borrowings under our credit facility, for working capital and other general corporate purposes. We may use a portion of the net proceeds to acquire complementary businesses or technologies. However, we do not have agreements or commitments for any acquisitions at this time. See “Use of Proceeds” for additional information.

Dividend policy

We currently do not intend to declare or pay any cash dividends in the foreseeable future. Any determination to pay dividends on our capital stock will be at the discretion of our board of directors, subject to applicable laws, and will depend on the terms of our financing arrangements, our financial condition, results of operations, capital requirements, general business conditions, contractual restrictions and other factors that our board of directors considers relevant. See “Dividend Policy” for additional information.

Risk factors

See “Risk Factors” beginning on page 13 and the other information included in this prospectus for a discussion of factors you should carefully consider before deciding to invest in our common stock.

Proposed trading symbol

We have applied to Nasdaq to list our common stock under the symbol “FLXE”.

Lock-up

We and our directors, officers and principal stockholder have agreed with the underwriters not to offer for sale, issue, sell, contract to sell, pledge or otherwise dispose of any of our common stock or securities convertible into common stock for a period of 180 days after the date of this prospectus. See “Underwriting” for additional information.

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The total number of shares of our common stock that will be outstanding after this offering excludes        shares of common stock reserved for future grant or issuance under our proposed 2021 Incentive Award Plan (“2021 Plan”), which will become effective in connection with the completion of this offering.

Except as otherwise indicated, all information in this prospectus assumes:

•

the completion of the Contribution Transaction;

•

no exercise by the underwriters of their over-allotment option to purchase additional shares; and

We estimate that we will issue             shares of our common stock in the Contribution Transaction based upon an initial public offering price of $       per share (which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus). A $1.00 increase (decrease) in the assumed initial public offering price of $       per share would increase (decrease) the number of shares of our common stock we estimate that we will issue in the Contribution Transaction by            . Assuming that the initial public offering price remains the same, an increase (or decrease) in the number of shares offered by us in this offering would not increase (or decrease) the number of shares we will issue in the Contribution Transaction.

9

SUMMARY HISTORICAL COMBINED CONSOLIDATED FINANCIAL DATA

FGS was formed in December 2020 and does not have historical financial data. The historical financial data presented in this prospectus is the historical combined consolidated financial data of FEI and FLPS, our wholly-owned subsidiaries upon completion of the Contribution Transaction. The summary historical financial data for the years ended December 31, 2020 and 2019 are derived from the audited combined consolidated financial statements of FEI and FLPS for those periods, which are included elsewhere in this prospectus. The summary historical financial data as of June 30, 2021 and for the six months ended June 30, 2021 and 2020 are derived from the unaudited condensed combined financial statements of FEI and FLPS for those periods, which are included elsewhere in this prospectus.

You should read this data together with the combined consolidated financial statements of FEI and FLPS and related notes, as well as the information under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included elsewhere in this prospectus. Our historical results are not necessarily indicative of our future results.

​	Years Ended December 31,						Six Months Ended June 30,
(in thousands)	2020			2019			2021			2020
​	​	​	​	​	​	​	(unaudited)
Statement of Operations and Comprehensive Loss Data:	​	​	​	​	​	​	​	​	​	​	​	​
Revenue	​	​	​	​	​	​	​	​	​	​	​	​
Turbine leasing fleet	​	$	17,838	​	$	16,833	​	$	7,272	​	$	10,024
Turbine service on sold product	​	​	2,213	​	​	2,824	​	​	1,601	​	​	1,120
Manufactured product	​	​	3,276	​	​	5,716	​	​	1,276	​	​	1,658
Total revenue	​	$	23,327	​	$	25,373	​	$	10,149	​	$	12,802
Cost of revenue	​	​	​	​	​	​	​	​	​	​	​	​
Turbine leasing fleet (excluding depreciation of fleet turbines)	​	$	4,884	​	$	5,442	​	$	2,967	​	$	2,562
Turbine service on sold product	​	​	1,691	​	​	2,797	​	​	1,107	​	​	961
Manufactured product	​	​	5,789	​	​	9,531	​	​	2,530	​	​	3,458
Depreciation of fleet turbines	​	​	5,007	​	​	4,713	​	​	2,167	​	​	2,766
Total cost of revenue	​	$	17,371	​	$	22,483	​	$	8,771	​	$	9,747
Operating expenses	​	​	​	​	​	​	​	​	​	​	​	​
Selling, general and administrative	​	$	11,826	​	$	12,400	​	$	6,759	​	$	5,957
Research and development	​	​	120	​	​	237	​	​	67	​	​	75
Total operating expenses	​	$	11,946	​	$	12,637	​	$	6,826	​	$	6,032
Operating loss	​	$	(5,990)	​	$	(9,747)	​	$	(5,448)	​	$	(2,977)
Other income (expense)	​	​	​	​	​	​	​	​	​	​	​	​
Interest expense	​	$	(1,114)	​	$	(992)	​	$	(539)	​	$	(665)
Other income (expense), net	​	​	31	​	​	(159)	​	​	2,534	​	​	52
Total other income (expense), net	​	$	(1,083)	​	$	(1,151)	​	$	1,995	​	$	(613)
Loss before income taxes	​	$	(7,073)	​	$	(10,898)	​	$	(3,453)	​	$	(3,590)
Income tax expense	​	​	(31)	​	​	(7)	​	​	(178)	​	​	(4)
Net loss	​	$	(7,104)	​	$	(10,905)	​	$	(3,631)	​	$	(3,594)
Other comprehensive gain (loss), net of tax	​	​	​	​	​	​	​	​	​	​	​	​
Foreign currency translation adjustments	​	$	443	​	$	185	​	$	209	​	$	(213)
Total other comprehensive gain (loss), net of tax	​	$	443	​	$	185	​	$	209	​	$	(213)
Comprehensive loss	​	$	(6,661)	​	$	(10,720)	​	$	(3,422)	​	$	(3,807)
EBITDA	​	$	1,114	​	$	(3,712)	​	$	751	​	$	511
Adjusted EBITDA	​	$	1,209	​	$	(3,457)	​	$	(1,189)	​	$	546

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​	As of June 30, 2021 (unaudited)
(in thousands)	Actual			As Adjusted(1)
Balance Sheet Data	​	​	​	​	​
Cash	​	$	667	​	$
Working capital(2)	​	$	6,711	​	$
Total assets	​	$	50,207	​	$
Line of credit	​	$	22,963	​	$
Total liabilities	​	$	31,825	​	$
Total stockholder’s equity	​	$	18,382	​	$

(1)

On an as adjusted basis to give effect to the issuance and sale of        shares of our common stock in this offering at an assumed initial public offering price of $       per share (which is the midpoint of the price range set forth on the cover page of this prospectus after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us and assuming no exercise of the underwriters’ over-allotment option.

(2)

Working capital is defined as total current assets minus total current liabilities.

Non-GAAP Financial Measures

In addition to our financial results determined in accordance with generally accepted accounting principles (“GAAP”), we believe “EBITDA” and “Adjusted EBITDA”, non-GAAP measures, are useful in evaluating our operating performance. We use these financial measures to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding our performance by excluding facility relocation expenses, equity-based compensation, restructuring costs and forgiveness of the PPP loans, which are unusual or non-cash charges and thus not indicative of our historical business and results of operations or of our outlook. In particular, we believe that the use of Adjusted EBITDA is helpful to our investors as it is a metric used by management in assessing the health of our business and our operating performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate similarly titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as a tool for comparison. A reconciliation is provided below for our non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review the related GAAP financial measure and the reconciliation of this non-GAAP financial measure to its most directly comparable GAAP financial measure, and not to rely on any single financial measure to evaluate our business.

EBITDA and Adjusted EBITDA

We believe EBITDA and Adjusted EBITDA are key performance measures used by our management to assess our operating performance. Because Adjusted EBITDA facilitates internal comparisons of our historical operating performance on a more consistent basis, we use this measure for business planning purposes and in evaluating acquisition opportunities.

We calculate EBITDA as net income (loss), plus (i) depreciation and amortization expense, (ii) interest expense and (iii) income tax expense. We define Adjusted EBITDA as EBITDA plus or minus (i) equity-based compensation expense and (ii) certain non-cash charges and unusual or non-recurring charges or income that we do not view as representative of our ongoing operations.

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The following table presents a reconciliation of EBITDA and Adjusted EBITDA from the most comparable GAAP measure, net income (loss), for each of the years ended December 31, 2020 and 2019 and for the six months ended June 30, 2021 and 2020:

​	Year Ended December 31,						Six Months Ended June 30, (unaudited)
(in thousands)	2020			2019			2021			2020
Net Loss	​	$	(7,104)	​	$	(10,905)	​	$	(3,631)	​	$	(3,594)
Depreciation and amortization	​	​	7,073	​	​	6,194	​	​	3,665	​	​	3,436
Interest expense, net	​	​	1,114	​	​	992	​	​	539	​	​	665
Provision for income taxes	​	​	31	​	​	7	​	​	178	​	​	4
EBITDA	​	$	1,114	​	$	(3,712)	​	$	751	​	$	511
One-time non-operating facility relocation expenses(1)	​	​	25	​	​	185	​	​	301	​	​	—
Restructuring charges	​	​	—	​	​	—	​	​	101	​	​	—
PPP loan forgiveness	​	​	—	​	​	—	​	​	(2,378)	​	​	—
Equity-based compensation	​	​	70	​	​	70	​	​	36	​	​	35
Adjusted EBITDA	​	$	1,209	​	$	(3,457)	​	$	(1,189)	​	$	546

(1)

Represents non-recurring out of pocket expenses incurred in moving our heat recovery-focused facility.

Some of the limitations of EBITDA and Adjusted EBITDA include (i) these non-GAAP measures do not properly reflect capital commitments to be paid in the future, and (ii) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and EBITDA and Adjusted EBITDA do not reflect these capital expenditures. Our non-GAAP measures may not be comparable to similarly titled measures of other companies because they may not calculate them in the same manner as we calculate, the measure, limiting its usefulness as a comparative measure. In evaluating EBITDA and Adjusted EBITDA, you should be aware that in the future we will incur expenses similar to the adjustments in this presentation. Our presentation of EBITDA and Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these expenses or any unusual or non-recurring items. EBITDA and Adjusted EBITDA should not be considered as an alternative to loss before benefit from income taxes, net loss, earnings per share, or any other performance measures derived in accordance with U.S. GAAP. When evaluating our performance, you should consider adjusted our non-GAAP measures alongside other financial performance measures, including our net loss and other GAAP results.

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RISK FACTORS

The following section discusses material risks and uncertainties that could adversely affect our business and financial condition. Investing in our common stock involves substantial risks. You should carefully consider the following risk factors, as well as all of the other information contained in this prospectus, including “Management’s Discussion and Analysis of the Financial Condition and Results of Operations” and the combined consolidated financial statements and related notes thereto included elsewhere in this prospectus, before deciding to invest in our common stock. Additional risks and uncertainties that we are unaware of may also become important factors that adversely affect our business. The occurrence of any of the following risks, or additional risks that we are unaware of, could adversely affect our business, strategies, prospects, financial condition, results of operations and cash flows. In that case, the market price of our common stock could decline, and you could lose all or part of your investment.

Risk Factors Relating to our Business and Industry

If we fail to retain existing customers, derive revenue from existing customers consistent with historical performance or acquire new customers cost-effectively, our business could be adversely affected. We are subject to substantial customer concentration.

Our success, and our ability to increase revenues and operate profitably, depends in part on our ability to retain and keep existing customers engaged so that they continue to purchase or lease equipment from us, and to acquire new customers cost-effectively. We intend to continue to expand our customer base as part of our growth strategy. If we fail to retain existing customers and to attract and retain new customers, our business, financial condition and results of operations could be adversely affected. Our two largest customers accounted for approximately 18% and 17% of total revenue for the six months ended June 30, 2021. Our two largest customers accounted for approximately 24% and 13% of total revenue for the six months ended June 30, 2020. In 2020, our three largest customers generated 23%, 14% and 10%, respectively, of our total revenue, and in 2019, our largest customer generated approximately 28% of our total revenue. Two customers accounted for 33% and 15%, respectively of our accounts receivable balance as of June 30, 2021. Two customers accounted for 15% and 14%, respectively, of our accounts receivable balance as of December 31, 2020. One customer accounted for 32% of our accounts receivable balance as of December 31, 2019. Accordingly, we are subject to customer concentration risk in the form of non-renewal of terminating lease contracts, which can be brought on by financial distress, aggressive pricing offers from our competitors, or merger and acquisition activity that is beyond our control. If one of our largest customers elects not to renew or extend existing lease contracts or insists upon price concessions, we could realize a substantial loss of lease revenue from a single customer until the point where we can identify new opportunities to redeploy these available turbine units elsewhere, which could adversely affect our business, financial condition and results of operations. In certain instances we face the financial burden of de-installation, transportation and cost of redeployment.

The volatility in the price of oil affects the growth rate of new oil wells coming online. This commodity price volatility may adversely affect the demand for our products and services and negatively impact our results of operations.

The majority of our turbines since inception have been deployed in the oil and gas (“O&G”) sector to oil production sites requiring onsite power generation. Our addressable market in this sector is largely defined by the existing oil wells in production, along with new oil wells coming online. During the prolonged low price environment in 2016-2017, and more recently the sharp price decline beginning in a second low price environment between March 2020 and January 2021, we experienced reduced demand from our customer base for power generation equipment, resulting in a reduction in sales of new turbine units, and a decrease in our total lease deployment count. Significant decreases in the price of oil typically result in a reduction of the number of new wells coming online in a given time period, which in turn decreases and/or defers the need for incremental power generation equipment over that time.

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Our products involve a lengthy sales cycle, and we may not anticipate sales levels appropriately, which could adversely affect our results of operations.

A portion of our revenue and associated production volume in a given quarter and year comes from turbines we sell outright to our customers as a capital purchase. The sale of our turbine products typically involves a significant commitment of capital by customers, which can result in typical delays associated with large capital expenditures. Delays for placing purchase orders can come from a number of sources, including an extensive review of all competing sources of self-generation, the need to procure outside financing, and delays and uncertainties imposed from the local utilities regarding interconnect permitting requirements. For these and other reasons, the sales cycle associated with our products can be lengthy and subject to a number of significant risks over which we have little or no control. We plan our production and inventory levels based on internal forecasts of customer demand, which is highly unpredictable and can fluctuate substantially. If sales in any period fall significantly below anticipated levels, our financial condition, results of operations and cash flow would suffer.

We have limited operating history with our line of heat recovery products and, as a result, if our estimates of product efficacy, maintenance and repair costs or useful life are inaccurate our business and financial results could be harmed.

Although our heat recovery technology has historically been an important element of our turbines, the external sale of our heat recovery products independently from our turbines began in 2017 and therefore we do not have a long operating history with these products. As a result, we do not have sufficient historical data to prove efficacy and maintenance and repair costs over a long period of use and any estimates regarding long-term product life or repair and replacement costs may prove to be incorrect. If incorrect, we may incur additional design and product development costs to achieve desired product performance.

Additionally, we have sold heat exchangers to only a limited number of customers. In order for our heat recovery products to achieve broader market acceptance, we will need to further develop these products, produce them in large quantities cost effectively, and market and sell them in greater quantities. If we are unsuccessful, our profitability will be adversely affected.

The majority of turbines we sell or lease currently run with natural gas as the primary input fuel. As a fossil-fuel based solution, natural gas power generation products are subject to a heightened risk of regulation and to changes in our customers’ energy procurement policies.

The production of CO2 has been shown to be a contributing factor to global climate change. Our turbines running on natural gas do produce CO2. As such, we may be negatively impacted by CO2 related changes in applicable laws, regulations, ordinances, rules, or the requirements of the incentive programs on which we and our customers currently rely. Changes (or a failure to recognize the benefit of our technology as one means to maintain reliable and resilient electric service with a lower greenhouse gas emission profile) in any of the laws, regulations, ordinances, or rules that apply to our installations and new technology could make it illegal or more costly for us or our customers to install and operate our gas turbines on particular sites, thereby negatively affecting our ability to deliver cost savings to customers, or we could be prohibited from completing new installations or continuing to operate existing projects. Certain municipalities in California have already banned the use of distributed generation products that utilize fossil fuel. Additionally, our customers’ and potential customers’ energy procurement policies may prohibit or limit their willingness to procure gas turbines. Our business prospects may be negatively impacted if we are prevented from completing new installations or our installations become more costly as a result of laws, regulations, ordinances, or rules applicable to our gas turbines, or by our customers’ and potential customers’ energy procurement policies.

We currently rely on a limited number of suppliers for certain parts and equipment to build our products and we may not be able to find replacements or immediately transition to alternative suppliers, which could adversely affect our business, financial condition and results of operation.

We currently rely on a limited number of suppliers, and in some instances, a single supplier, for certain equipment and components to build our products. If demand for the equipment or components necessary

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to build our products increases or our suppliers face financial distress or bankruptcy, they may not be able to provide the equipment or components on schedule or at current prices. For example, steel is the principal raw material used in manufacturing our systems. The price of steel has historically fluctuated on a cyclical basis and has often depended on a variety of factors which we have no control over. If our suppliers are unable to provide the raw materials and components needed to build our products on schedule or at current prices, we may need to seek other suppliers, which may adversely affect our revenues or increase our costs.

In order to reduce manufacturing lead times and ensure adequate component supply, we enter into agreements with certain suppliers that allow them to procure inventories based upon certain criteria. Due to the complexity of some of our components, we may not timely find alternate suppliers, if at all. If we fail to accurately anticipate customer demand, an oversupply of parts could result in excess or obsolete inventories, which could adversely affect our business. Additionally, if we fail to correctly anticipate our internal supply requirements, an undersupply of parts could limit our production capacity. Our inability to meet volume commitments with suppliers could affect the availability or pricing of our parts and components. A reduction or interruption in supply, a significant increase in price of one or more components or a decrease in demand of products could adversely affect our business and operations and could adversely affect our customer relationships. Financial problems of suppliers on whom we rely could limit our supply of components or increase our costs.

In addition, suppliers may de-prioritize our orders if another larger customer places orders with them. Due to our volume of purchases, we typically are unable to take advantage of any bulk volume pricing. Also, we cannot guarantee that any of the parts or components that we purchase will be of adequate quality or that the prices we pay for the parts or components will not increase. Inadequate quality of products from suppliers could interrupt our ability to supply quality products to our customers in a timely manner. Additionally, defects in materials or products supplied by our suppliers that are not identified before our products are placed in service by our customers could result in higher warranty costs and damage to our reputation. We also outsource certain of our components internationally, which may subject us to delays in delivery because of regulations associated with the import/export process, delays in transportation or regional instability.

We have cash payments due under FEI incentive plans on January 1, 2023 and January 1, 2026, which might require us to use funds that we would otherwise use for other purposes, such as operations, growth or distribution.

Our subsidiary, FEI, has a 2013 Equity Incentive Plan (the “2013 Plan”) that provides cash payment awards. The payments under the 2013 Plan have been frozen and there will be no further grants made under the 2013 Plan. Under the 2013 Plan, an aggregate payout of $0.6 million is due to the participants on the earlier of January 1, 2023 or a Change of Control (as defined in the 2013 Plan). FEI also has a 2016 Target Incentive Plan (the “2016 Plan”) that provides for fixed potential cash payouts totaling $3.2 million. The payments under the 2016 Plan are only due to the participants if a Change in Control (as defined in the 2016 Plan) that constitutes a Qualifying Sale (as defined in the 2016 Plan) occurs on or before the earlier of January 1, 2026 or a Termination Transaction (as defined in the 2016 Plan). If payments are due under the 2016 Plan, they must be paid within 60 days after the Change in Control (as defined in the 2016 Plan) that constitutes a Qualifying Sale (as defined in the 2016 Plan). At the time these payments come due, we may have more pressing needs for this cash, such as working capital, debt reduction or investment in growth and expansion. Use of this cash to make these payouts at inopportune times could impede our growth and stress our cash position, adversely affecting our results of operations. Our obligations to pay the amounts may also reduce the proceeds otherwise payable to our stockholders in the event of or following a Change of Control (as defined in the 2013 Plan) or a Change in Control (as defined in the 2016 Plan).

We are exposed to the credit risk of our customers, and any material nonpayment or nonperformance by our customers could adversely affect our financial results.

During times of significant oil price shocks or sustainably low oil prices, some of our leasing customers face significant financial hardship whereby it becomes increasingly difficult to stay current with the monthly operating payments for the provision of our services. Likewise, our C&I customers have varying levels of financial strength. In cases where C&I customers opt to make the capital invested into a self-generation

15

project, the required investment can be substantial relative to the business’ operations and revenue base, and in many cases it requires outside financing to be secured. This can result in delays and nonperformance in our customers’ ability to make the agreed scheduled progress payment against the executed purchase order, production build and delivery of our gas turbines going towards the self-generation project.

Further, our heat recovery modules are custom designed to meet the specific operating requirements and specific performance goals of our customers. With this customization comes inherent risk of designing a solution specific to a given customer since there is very little secondhand value in the finished product should the customer be unable to pay on time or in full. The typical production cycle between purchase and completion and delivery of a module can be six to eighteen months, with defined payment milestones. Should a customer face financial hardship over the course of this long build cycle, we may incur financial losses should milestone payments not be made on time or loss of revenue should the customer not be able to make full payment and take delivery of the finished heat exchanger module.

Our credit procedures and policies may not be adequate to fully reduce customer credit risk. If we are unable to adequately assess the creditworthiness of existing or future customers or unanticipated deterioration in their creditworthiness, any resulting increase in nonpayment or nonperformance by them and our inability to re-market or otherwise use our equipment could adversely affect our financial results.

Variations in the spread between available fuel for self-power generation and otherwise available electricity prices, may adversely affect our revenue, profitability, cash flows and growth.

Our economic value proposition to our C&I customers is premised on the financial savings they would achieve by self-generating a portion of the electricity and heat that they would otherwise receive from their utilities. This value proposition is subject to risk in at least three ways:

First, our turbine products typically run on natural gas as the input fuel. Unless our units are run on available, waste gas or some alternative fuel source (e.g. propane or hydrogen), an increase in the price of natural gas will produce less cost savings for our customers. Therefore, the economic value of our power generation products depends largely on the spread between natural gas fuel and electricity prices or other alternative distributed generation solutions. While electricity rates have historically increased steadily every year in most states in the U.S., declining electric utility rates would adversely affect the savings produced by self-generation by increasing the payback period for customers who invest the upfront capital in their onsite generation plant. Similarly, increased prices or greater variability in the price of natural gas could adversely affect the predicted cost savings of a self-generation project and, due in part to the unpredictable nature of the cost savings, could cause our customers to forego the investment into producing their own onsite energy.

Second, electric utilities could offer rate reductions to its C&I customers, in response to the competition from distributed energy solutions, including from us. If electric utilities offer price concessions that result in lower or more predictable utility bills over time, C&I customers may find that the cost savings generated by our products may be less than the cost savings generated by these price concessions.

Third, we compete with alternative distributed generation solutions, including gas-fueled engines, gas-fueled fuel cells and renewable sources of energy such as wind and solar power. If the cost of alternative distributed generation solutions decline in the future, particularly for baseload distributed energy solutions such as the pairing of intermittent solar power and battery storage solutions, then the potential cost savings produced by these alternative distributed generation solutions could be greater than the potential cost savings products by our products.

Utility companies may resist the adoption of distributed generation and could impose customer fees or interconnection requirements on our customers that could make our products less desirable.

Electric utilities may impose measures that make it more difficult for its customers to decrease their reliance on the utility by self-generating a portion of its energy. The vast majority of our customers who utilize our gas turbines for self-generation for a portion of their baseload power still rely on the utility for

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additional power supply in a given month. The local electric utility may impose “departing load,” “standby,” or other charges, including power factor charges, on our customers in connection with their acquisition of our gas turbines, the amounts of which are outside of our control and which may have a material impact on the economic benefit of our gas turbines to our customers.

In some instances, an interconnect permit is required at the outset of the project installation. Based on the varying requirements of the local utilities around interconnection, the associated cost and timing can be unpredictable and in some cases unviable for the self-generation project to move forward into operation.

The distributed generation market is highly competitive. Competing solutions for distributed energy include renewables such as solar, wind and storage, gas-fired reciprocating engines, fuel cells and other gas turbines, any or all which might be perceived as superior to our technology, for economic, ecological or other reasons.

Within our O&G addressable market, we face competition from other technologies that can provide remote, onsite power in what is typically an off-grid application. The most direct competition to our oilfield leasing solution are regional rental businesses that own and operate a fleet of diesel and gas reciprocating engines. Competing rental companies include Gravity, Baseline, Mesa, Moser and Aggreko. The OEM equipment providers of these engines are large, well established companies such as Caterpillar, Cummins, MAN and Doosan. While we believe we have a differentiating and superior technology in our proprietary turbine technology for various remote oilfield power applications, competing rental companies in partnership with their large engine OEM providers have extensive manufacturing, field service and financial resources that creates intense competition in the form of large available supply capacity and highly competitive pricing to our customer base.

Within our CHP addressable market for the C&I sector, we face intense competition from a wide variety of distributed generation sources that can allow businesses to self-generate a portion of their energy demand. These competing solutions include diesel and gas-fueled reciprocating engines, fuel cells and other small-scale gas turbines. They also include intermittent renewable energy such as solar and wind power, which traditionally cannot provide 24/7 baseload power to commercial and industrial customers. However, the adoption of battery storage technology paired with intermittent renewables could emerge as a viable and proven baseload self-generation solution in the future and could thus become direct competition to our baseload energy solution. Our competitors include several well-known companies that have substantially greater resources than we do and have established manufacturing and global field service organizations.

Our failure to adequately protect our intellectual property rights could impair our ability to compete effectively or defend ourselves from litigation, which could harm our business, financial condition, and results of operations.

Our success depends, in part, on our ability to protect our intellectual property. We rely primarily on patent, trademark, and trade secret laws, as well as confidentiality and non-disclosure agreements, and other contractual protections, to protect our technologies and proprietary know-how, all of which offer only limited protection. The steps we have taken to protect our intellectual property rights may not be adequate to prevent the misappropriation, infringement, or other violation of our proprietary information or intellectual property rights, and our ability to prevent misappropriation, infringement, or other violation is uncertain, particularly in countries outside of the U.S.

We have nine issued U.S. patents (expiring generally between 2021 and 2037), 15 patents issued in foreign countries (expiring generally between 2024 and 2037), and one patent application pending internationally. There can be no assurance that the patent application will issue as a granted patent, and even if it does issue, the patent claims may be insufficient to prevent third parties from utilizing our technologies. We cannot assure you that the scope of the rights granted to us will be meaningful or provide us with any commercial advantage. The failure of our patents to adequately protect our technology might make it easier for our competitors to offer similar products or technologies. Further, our foreign patent protection is less comprehensive than our U.S. patent protection and may not protect our intellectual property rights in some countries where our products are sold or may be sold in the future. Many U.S.-based companies have encountered substantial third-party intellectual property infringement in foreign countries.

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Even if foreign patents are granted, effective enforcement in foreign countries may not be available. We have ceased using certain of our patents that we no longer view as being useful.

We believe that the success of our business depends more on proprietary technology, information and processes, and know-how than on our patents or trademarks. Much of our proprietary information and technology related to manufacturing processes is not patented and may not be patentable. As such, we generally rely on trade secret protection with respect to our processes and software. While we believe our technology is difficult to reverse engineer, we cannot assure you that our competitors will not be able to do so.

In addition, we also rely on contractual protections with our customers, suppliers, distributors, employees, and consultants, and we implement security measures designed to protect our trade secrets and know-how. However, we cannot assure you that we have entered into these agreements with every such party, that these contractual protections and security measures will not be breached, that we will have adequate remedies for a breach, or that our customers, suppliers, distributors, employees, or consultants will not assert rights to intellectual property or damages arising out of these contracts.

We may in the future need to initiate infringement claims or litigation in order to try to protect or enforce our intellectual property rights. Litigation, whether we are a plaintiff or a defendant, can be expensive and time-consuming and may divert the efforts of our management and other personnel, which could harm our business, whether or not the litigation results in a determination favorable to us. Litigation also puts our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing. Further, any enforcement of our patents or other intellectual property may provoke third parties to assert counterclaims against us. If we are unable to meaningfully protect our proprietary rights or if third parties independently develop or gain access to our or similar technologies, our business, financial condition, results of operations, reputation, and competitive position could be harmed.

Our products are exposed to operating conditions that may require us to repair and replace critical components ahead of their scheduled replacement cycle, which adds cost that we must cover under the terms of our purchase warranties, service care contracts and leasing contracts.

As our fleet of rental equipment ages, the cost of maintaining that equipment, if not replaced within a certain period of time, generally increases. Determining the optimal age for our rental fleet equipment is subjective and requires considerable estimates by management. We have made estimates regarding the relationship between the age of our rental fleet equipment, and the maintenance and repair costs, and the market value of used equipment. Our future operating results could be adversely affected because our maintenance and repair costs may be higher than estimated and market values of used equipment may fluctuate.

In addition, our products are exposed to operating conditions that may require us to repair and replace critical components ahead of scheduled replacement times, which increases our operating costs. We are required by our service care contracts, leasing contracts, and product warranty to repair and replace these components if they are covered by the terms of the applicable contract or warranty and we incur the full costs of repair or replacement. While we have improved our products with each successive generation and while our service care and leasing contracts have restrictions on misuse of our products, there is no guarantee that these maintenance and repair costs will consistently be at or below budgeted amounts.

Our turbine products use inherently dangerous, flammable fuels, and operate at high temperatures and speeds, each of which could subject our business to product liability claims.

Our business exposes us to potential product liability claims that are inherent in products that operate at high temperatures and/or speeds or use hydrogen. Our products utilize fuels such as natural gas. The fuels we use are combustible and may be toxic. In addition, our turbine products operate at high voltage, temperatures, speeds, and pressure and also use corrosive material, which could expose us to potential liability claims. Although we have incorporated a robust design and redundant safety features in our turbine products, we cannot guarantee that there will not be accidents. Any accidents involving our products or other hydrogen-using products could materially impede widespread market acceptance and demand for our

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products. In addition, we might be held responsible for damages beyond the scope of our insurance coverage. We also cannot ensure you that we will be able to maintain adequate insurance coverage on acceptable terms.

We anticipate engineering our products to run on fuel blends with a greater percentage of hydrogen. However, if we are unsuccessful or if there is an insufficient supply of hydrogen, our sales growth could be adversely affected.

We believe our turbines can currently run on a fuel blend comprising up to 30% hydrogen, and we plan to engineer our turbines to accept fuel blends containing higher percentages of hydrogen, including accepting only hydrogen. As such, we are currently dependent upon, and in the future expect to be more dependent upon, the availability of cost-effective hydrogen fuel blends for the profitable commercialization of our products and services. If these fuels are not readily available or if their prices are such that energy produced by our products costs more than energy provided by other sources, then our products could be less attractive to potential users and our products’ value proposition could be negatively affected. There may be an insufficient supply of hydrogen for this market that could negatively affect our sales and deployment of our products and services. In addition, while we believe we have the engineering capabilities to succeed in developing and manufacturing turbines that can accept only hydrogen as a fuel source, we are unable to adequately forecast the timing and cost requirements in order to sell these products to our customers. We may also ultimately be unable to develop and manufacture products that are suitable for customers. There can be no assurances that we achieve market acceptance of these products, or that products and technologies developed by others will not render our products or technologies obsolete or uncompetitive.

Our field service operations are subject to environmental and occupational health and safety laws and regulations, as well as safety requirements outlined in customer MSAs, that may expose us to material costs and liabilities.

Many of our oilfield customers require us to execute their Master Service Agreement (“MSA”) before entering into any leasing or service care contracts. These MSAs and other agreements typically require that we follow strict safety protocol while conducting onsite operations, maintain sufficient insurance levels, and in some cases agree to a maximum amount of liquidated damages. In addition to the environmental and safety requirements of our customers, we must also adhere to federal, state and local environmental and safety measures across our field service operations. Environmental laws impose obligations and liability for the cleanup of properties affected by hazardous substance spills or releases. These liabilities can be imposed on the parties generating or disposing of such substances or the operator of the affected property, often without regard to whether the owner or operator knew of, or was responsible for, the presence of hazardous substances. Accordingly, we may become liable, either contractually or by operation of law, for remediation costs even if a contaminated property is not currently owned or operated by us, or if the contamination was caused by third parties during or prior to our ownership or operation of the property.

We may not be in strict compliance with all federal, state and local environmental and occupational health and safety laws and regulations at all times. We are subject to potentially material civil or criminal fines or penalties if we fail to comply with any of these requirements. We have made and will continue to make capital and other expenditures in order to comply with these laws and regulations. However, the requirements of these laws and regulations are complex, change frequently, and could become more stringent in the future. It is possible that these requirements will change or that liabilities will arise in the future in a manner that could adversely affect our business, financial condition and results of operations.

If we are unable to attract and retain key employees and hire qualified management, technical, engineering, and sales personnel, our ability to compete and successfully grow our business could be harmed.

We believe that our success and our ability to reach our strategic objectives are highly dependent on the contributions of our key management, technical, engineering, and sales personnel, including Mark Schnepel, our President and Chief Executive Officer, Wes Kimmel, our Chief Financial Officer, and Doug Baltzer, our Chief Commercial Officer. This executive management team has been primarily responsible for determining the strategic direction of our business and for executing its growth strategy and is integral to our brand, culture, product development and the reputation it enjoys with suppliers, distributors, customers

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and business partners. In particular, Mr. Schnepel’s involvement in the development and redesign of the turbine is a key component of our technological durability. In addition, Mr. Schnepel and Mr. Baltzer are the primary sales and marketing contacts for our customers.

We cannot assure you that we will be able to successfully attract and retain senior leadership necessary to grow our business. Furthermore, there is increasing competition for talented individuals in our field. Any such departure could be viewed in a negative light by investors and analysts, which may cause the price of our common stock to decline. The loss of the services of any of our key employees could disrupt our operations, delay the development and introduction of our products and services and negatively impact our business, relationship with key customers and suppliers, branding, creative strategies, prospects, and operating results, as we may not be able to find suitable individuals to replace them on a timely basis, if at all. We do not currently carry key-person life insurance for any of our management team.

Our management has expressed substantial doubt about our ability to continue as a going concern without additional capital investment.

The combined consolidated financial statements have been prepared as though we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. We have incurred operating losses and negative cash flows from operations since inception. As of June 30, 2021, we had an accumulated deficit of approximately $136.1 million. Management expects to continue to incur operating losses and negative cash flows from operations for the remainder of 2021. We have financed our operations to date with proceeds from equity infusions from FPS and drawing down on our credit facility.

If we are unable to successfully complete this offering, we will need to create alternate financing or operational plans to continue as a going concern. There can be no assurance that such alternate financing, if available, can be obtained on acceptable terms. If we are unable to obtain such alternate financing, future operations would need to be scaled back or discontinued.

Accordingly, these factors raise substantial doubt about our ability to continue as a going concern within one year after the date the combined consolidated financial statements are issued. The combined consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

We might not be able to utilize a significant portion of our net operating loss carryforwards and research and development tax credit carryforwards.

As of June 30, 2021, we had significant U.S. federal and state net operating loss (“NOL”) carryforwards and U.S. federal and state research and development tax credit carryforwards. These net operating loss and U.S. federal tax credit carryforwards could expire unused and/or be unavailable to offset future income tax liabilities. In addition, under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50% change, by value, in its equity ownership over a three-year period, the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change income may be limited. We performed a Section 382 analysis as of December 31, 2020 to determine if an ownership change has occurred. It has been preliminarily determined that ownership changes occurred under these rules, and an annual limitation on the use of pre-ownership change NOL carryforwards and certain other losses and/or credits has been applied. The preliminary analysis indicates $48.4 million of federal net operating loss carryforwards as of December 31, 2020 will expire unutilized. In addition, we may experience ownership changes in the future as a result of subsequent shifts in our stock ownership, some of which may be outside of our control and which could further limit our ability to utilize NOL carryforwards.

On March 27, 2020, the CARES Act was signed into law as a result of the COVID-19 pandemic. The new legislation includes a number of income tax provisions applicable to individuals and businesses. In addition, governments around the world have enacted or implemented various forms of tax relief measures

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in response to the economic conditions in the wake of the COVID-19 pandemic. Although, due to our historical net operating losses incurred in the U.S., the CARES Act did not have a material impact on our combined consolidated financial statements as of December 31, 2020 and June 30, 2021, we continue to examine the elements of the CARES Act and other changes in tax laws and regulations and the impact they may have on us in the future.

Our operating history is characterized by net losses. We anticipate further losses and we may never become profitable.

Since inception, we have incurred annual operating losses. We expect this trend to continue until we can sell a sufficient number of units and achieve a cost structure to become profitable. We have made, and expect to continue making, significant investments to further develop and expand our technology suite and broaden our product base. These investments may not result in increased revenue or growth on a timely basis or at all. Even if we do achieve profitability, we may be unable to increase our sales and sustain or increase our profitability in the future.

Our rental fleet is subject to residual value risk upon disposition.

The market value of any given piece of rental equipment could be less than its depreciated value at the time it is sold. The market value of used rental equipment depends on several factors, including:

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the market price for new equipment of a like kind;

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wear and tear on the equipment relative to its age;

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the time of year that it is sold (prices are generally higher during the construction season);

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worldwide and domestic demands for used equipment;

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the supply of used equipment on the market; and

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general economic conditions.

We include in operating income the difference between the sales price and the depreciated value of an item of equipment sold. We cannot assure you that used equipment selling prices will not decline. Any significant decline in the selling prices for used equipment could adversely affect our business, financial condition, results of operations or cash flows.

We have identified material weaknesses in our internal control over financial reporting and our information technology environment. We may identify additional material weaknesses in the future that may cause us to fail to meet our reporting obligations or result in material misstatements of our combined consolidated financial statements. If we fail to remediate any material weaknesses or if we fail to establish and maintain effective control over financial reporting, investors may lose confidence in our ability to provide reliable and timely financial reports and the value of our common stock may decline.

Pursuant to Section 404 of Sarbanes Oxley, we will in the future be required to include in our annual reports on Form 10-K our assessment of the effectiveness of our internal controls over financial reporting. This assessment will include disclosure of any material weaknesses identified by our management in our internal controls over financial reporting. We may in the future identify material weaknesses in our internal controls over financial reporting that we have not discovered to date. If we cannot adequately maintain the effectiveness of our internal controls over financial reporting, we might be subject to sanctions or investigation by regulatory authorities, such as the SEC. Any such action could adversely affect our financial results and the market price of our securities.

As a private emerging growth company, we have not been required to document and test our internal controls over financial reporting nor was our management required to certify the effectiveness of internal controls and our auditors were not required to opine on the effectiveness of their internal control over financial reporting. Ensuring that we have adequate internal financial and accounting controls and procedures

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in place to produce accurate financial statements on a timely basis is a costly and time-consuming effort. Our accounting and finance department is small, with limited expertise in the areas of financial reporting and SEC requirements. Thus, we have a need for additional resources within the accounting and finance functions due to the requirement to produce timely financial information and to ensure the level of segregation of duties customary for a U.S. public company. We have identified material weaknesses in our internal financial and accounting controls and procedures, including an insufficient complement of resources with an appropriate level of accounting knowledge, experience and training commensurate with our structure and financial reporting requirements and ineffective information technology controls related to access security, segregation of duties and governance of financial systems. Furthermore, we do not have a formal risk assessment or fraud risk assessment and therefore, have not designed controls to mitigate risks to the business. We have assessed the deficiencies in controls and have concluded that we need to implement an enterprise resource planning information management system to provide for greater depth and breadth of functionality and effectively manage our business data, communications, supply chain, order entry and fulfillment, inventory and warehouse management, financial reporting and other business processes. Further, we have identified the need to implement additional information technology systems to ensure that an authorized user can only access privileges necessary to perform his or her assigned duties and prevent improper segregation of duties. The actions we have taken and plans we expect to pursue are subject to continued implementation, subject to the availability of qualified professionals. While we have plans to remediate these weaknesses, we cannot assure you that we will be able to do so.

Even after establishing internal controls, our management does not expect that our internal controls ever will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. No evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within our company will have been detected. Our failure to remediate the material weaknesses identified above or the identification of additional material weaknesses in the future, could adversely affect our ability to report financial information, including our filing of quarterly or annual reports with the SEC on a timely and accurate basis. Moreover, our failure to remediate the material weakness identified above or the identification of additional material weaknesses could prohibit us from producing timely and accurate financial statements, which may adversely affect our the market price of shares of our common stock and we may be unable to maintain compliance with Nasdaq listing requirements.

We need to implement an Enterprise Resource Planning (“ERP”) system. Significant additional costs, cost overruns and delays in connection with the implementation of an ERP system may adversely affect results of operations.

We do not have a current ERP system and we are in the process of implementing one company-wide. This is a lengthy and expensive process that will result in a diversion of resources from other operations. Any disruptions, delays or deficiencies in the design and/or implementation of the new ERP system, particularly any disruptions, delays or deficiencies that impact operations, could adversely affect our ability to run and manage our business effectively.

The implementation of an ERP system has involved and will continue to involve substantial expenditures on system hardware and software, as well as design, development and implementation activities. There can be no assurance that other cost overruns relating to the ERP system will not occur. Our business and results of operations may be adversely affected if we experience operating problems, additional costs, or cost overruns during the ERP implementation process.

At many of our customers’ oil production sites, we utilize the abundant associated gas that is otherwise flared as our primary input fuel. Should midstream infrastructure be put into place that allows the associated gas to be processed and transported to end markets, it would curtail our volume of input fuel for onsite power generation and adversely affect our costs or ability to meet the customer’s power generation demand.

The increased annual volumes of flaring recorded in the upstream O&G industry in recent years is in large part due to oil production – and the byproduct associated petroleum gas that comes from oil

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production – outpacing the ability to build the appropriate amount of midstream gas infrastructure required to gather, process and transport the associated petroleum gas to commercial markets. Should the substantial upfront investment be made to expand midstream gas infrastructure and in effect provide a greater outlet for the associated petroleum gas, it could curtail the supply of onsite fuel we use to power our customers’ operations and adversely affect our operating costs.

We focus geographically in areas of oil producing regions where grid power is unreliable, insufficient or absent altogether. The buildout and expansion of utility power over time may lead to certain customers opting to connect their production sites to utility power should it becomes available and sufficient to meet the onsite demand.

The demand for onsite power generation for oil production wells can be both temporary and long-term in nature. While often times we can provide power generation to a new wellsite more quickly than power can be made available to the wellsite from the local electricity grid, we face the threat of the utility grid expanding geographically over time to reach the wellsite power demand. Given the long-term nature of multi-well oil pads that can expect to produce oil for well over a decade, regional utilities may be incentivized to invest in transmission and distribution upgrades to their system in order to compete for the supply of power to these well sites.

Risk Factors Relating to Financing Matters

Our credit facility subjects FLPS and its subsidiaries to financial and other restrictive covenants. These restrictions may limit our operational or financial flexibility and could subject us to potential defaults under the credit facility. In addition, any default could result in foreclosure.

On February 8, 2019, FLPS entered into a senior secured revolving credit facility with Texas Capital Bank, National Association (“TCB”). We subsequently amended and restated our original revolving credit facility by entering into a Third Amendment to Credit Agreement, dated December 22, 2020 (“Credit Facility”) to add Flex Leasing Power and Service ULC, a Canadian unlimited liability company, an indirect wholly-owned subsidiary of FLPS (“FLPS Canada” and together with FLPS, the “Borrowers”) as an additional borrower. The commitment amount is for $30.0 million and borrowing availability is based on a borrowing base calculation of eligible assets and other conditions. Interest is defined based on a tiered leverage ratio and an applicable margin of (i) 1.50% to 2.00% above the base rate for base rate loans, or (ii) 2.50% to 3.00% above the adjusted Eurodollar rate for Eurodollar rate loans. See “Management’s Discussion and Analysis of Financial Condition and Results of Operation – Liquidity and Capital Resources – Senior Secured Credit Facility.” As of June 30, 2021, borrowings outstanding under the Credit Facility amounted to $23.0 million.

The Credit Facility requires the Borrowers to make monthly interest payments. Should the Borrowers’ cash flow from operations be negatively impacted in a significant manner, they may not have sufficient cash available to cover interest payments, which would trigger an event of default unless otherwise cured. The Credit Facility matures on February 8, 2024 at which point the amount outstanding is due in full, unless the Borrowers refinance the Credit Facility prior to this date, which they may not be successful in executing. The Credit Facility is secured by a first priority lien on substantially all of the assets of the Borrowers, and guaranteed by FPS and Flex Power Co., a wholly-owned subsidiary of FLPS. If the Borrowers are unable to repay amounts outstanding under the Credit Facility, TCB could foreclose on the collateral granted thereunder to secure the indebtedness.

The Borrowers are subject to financial covenants of a maximum leverage ratio and minimum fixed charge coverage ratio to be tested quarterly. As of December 31, 2020 and as of March 31, 2021, the Borrowers’ leverage ratio was in excess of the maximum leverage ratio permitted under the Credit Facility. In connection with an exercise of the Borrowers’ equity cure right under the Credit Facility, TCB has waived any event of default with respect to this noncompliance. Should they fail to comply with the quarterly maintenance covenants, remedies would need to be implemented in order to avoid an event of default, including equity cure rights or a waiver by TCB, which we cannot guarantee will be granted. As of June 30, 2021, the Borrowers were in compliance with financial covenants. The Borrowers are also subject to certain negative covenants, including restrictions on their ability to incur additional indebtedness, create

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liens, pay dividends, make certain investments or material changes in their business, engage in transactions with affiliates, conduct asset sales or otherwise dispose of the Borrowers’ assets. These restrictions may limit their operational or financial flexibility and could lead to potential defaults under the Credit Facility, which could result in foreclosure. In anticipation of the Contribution Transaction and this offering, we are in the process of negotiating a modification to the Credit Facility. As part of this modification, we expect that FGS will become an additional guarantor with respect to the Credit Facility subject to the same obligations and restrictions applicable to FPS thereunder, but that FGS will not otherwise be subject to the covenants and restrictions applicable to the Borrowers.

The Borrowers are also subject to routine asset appraisal that factors into the borrowing base calculation of the Credit Facility. Should the Borrowers’ outstanding indebtedness exceed the borrowing base at any point in time, the amount of indebtedness in excess of the borrowing base will become due immediately, and the Borrowers may not have sufficient liquidity to make required repayment at that time.

Our substantial indebtedness could limit our opportunities for growth.

We have a significant amount of indebtedness outstanding. As of June 30, 2021, we had total outstanding indebtedness of approximately $23.2 million, consisting of $23.0 million outstanding under the Credit Facility with TCB and $0.2 million in capital lease obligations. As of June 30, 2021, there was borrowing availability under the Credit Facility of approximately $2.9 million.

Our substantial indebtedness could have important consequences. For example, it could:

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increase our vulnerability to general adverse economic, industry and competitive conditions;

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require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions and other general corporate purposes;

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limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

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place us at a competitive disadvantage compared to our competitors that have less debt; and

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limit our ability to obtain additional financing for working capital, capital expenditures, acquisitions or general corporate purposes.

We expect to use cash flow from operations and borrowings under the Credit Facility to meet our current and future financial obligations, including funding our operations, debt service and capital expenditures. Our ability to make these payments depends on our future performance, which will be affected by financial, business, economic and other factors, many of which we cannot control. Our business may not generate sufficient cash flow from operations in the future, which could result in our inability to repay indebtedness, or to fund other liquidity needs. If we do not have enough capital, we may be forced to reduce or delay our business activities and capital expenditures, sell assets, obtain additional debt or equity capital or restructure or refinance all or a portion of our debt, including the Credit Facility, on or before maturity. We cannot make any assurances that we will be able to accomplish any of these alternatives on terms acceptable to us, or at all. In addition, the terms of existing or future indebtedness, including the Credit Facility, may limit our ability to pursue any of these alternatives.

Variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.

Borrowings under the Credit Facility are at variable rates of interest and expose us to interest rate risk. As such, our results of operations are sensitive to movements in interest rates. There are many economic factors outside our control that have in the past and may, in the future, impact rates of interest including publicly announced indices that underlie the interest obligations related to a certain portion of our debt. Currently, a portion of our outstanding borrowings under the Credit Facility are borrowed at LIBOR plus an applicable margin and it is unclear how increased regulatory oversight and changes in the method for

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determining LIBOR may affect our results of operations or financial conditions. LIBOR is an interest rate benchmark used as a reference rate for a wide range of financial transactions, including derivatives and loans. In July 2017, the United Kingdom’s Financial Conduct Authority, which regulates LIBOR, announced that it intends to stop compelling banks to submit LIBOR rates after 2021. On November 30, 2020, ICE Benchmark Administration (“IBA”), the administrator of LIBOR, with the support of the United States Federal Reserve and the United Kingdom Financial Conduct Authority, announced plans to consult on ceasing publication of USD LIBOR on December 31, 2021 for only the one week and two month USD LIBOR tenors, and on June 30, 2023 for all other USD LIBOR tenors. While this announcement extends the transition period to June 2023, the United States Federal Reserve concurrently issued a statement advising banks to stop new USD LIBOR issuances by the end of 2021. At this time, no consensus exists as to what rate or rates may become accepted alternatives to LIBOR, and it is impossible to predict whether and to what extent banks will continue to provide LIBOR submissions to the administrator of LIBOR, whether LIBOR rates will cease to be published or supported before or after 2021 or whether any additional reforms to LIBOR may be enacted. At this time, we cannot predict the future impact of a departure from LIBOR as a reference rate. The expected discontinuation of LIBOR may require us to amend the Credit Facility. Also, factors that impact interest rates include governmental monetary policies, inflation, recession, changes in unemployment, the money supply, international disorder and instability in domestic and foreign financial markets. If interest rates increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our results of operations would be adversely impacted.

The agreement governing FPS’ Series B Preferred Units restricts our business and our ability to engage in certain corporate and financial transactions or in other businesses.

Under the terms of FPS’ Series B Preferred Unit issuance, FPS has agreed to certain covenants that our board believes restricts our ability to do business and enter into certain financial transactions, including restricting FPS’ and our ability to incur, guarantee or otherwise permit to exist any indebtedness for borrowed money that is senior in right of payment to the Series B Preferred Units other than senior indebtedness in an amount not to exceed $50.0 million. As of June 30, 2021, the amount of senior indebtedness (as defined therein) totaled approximately $48.5 million, thus limiting the amount of availability to approximately $1.5 million of additional senior indebtedness. See “Management’s Discussion and Analysis of Financial Condition and Results of Operation – Liquidity and Capital Resources – Series B and B-1 Preferred Equity at FlexEnergy Power Solutions, LLC.”

Risk Factors Relating to Ownership of Our Common Stock

Our largest stockholder, FPS, has a series of senior secured notes that are currently due in full at October 31, 2022, that if not extended or renegotiated, could cause FPS to sell shares of our common stock, which could adversely affect our stock price.

Since December 2015, FPS has entered into multiple funding rounds with the holders (the “FPS Noteholders”) of senior secured promissory notes issued by FPS (the “Notes”). As part of the Contribution Transaction, FPS will pledge its shares of FGS in favor of the FPS Noteholders and we will agree not to grant any further security interests in our or our subsidiaries’ assets so long as the Notes are outstanding, except for certain permitted encumbrances similar in nature to those permitted under the Credit Facility, without the prior written consent of FPS.

As of June 30, 2021, the total amount outstanding under the Notes was $25.5 million. All Notes are due and payable in full on October 31, 2022, unless extended or refinanced prior to this date, which FPS may not be successful in executing. If the Notes are not extended, refinanced or repaid prior to October 31, 2022, FPS may be forced to sell sufficient shares of our common stock to pay the amount outstanding under the Notes, which could cause the trading price of our common stock to decline significantly and possibly below the offering price. Similarly, if FPS is unable to repay the amount outstanding under the Notes, the FPS Noteholders could foreclose on and sell sufficient shares of our common stock to pay the amount outstanding under the Notes, which could cause the trading price of our common stock to decline significantly and possibly below the offering price.

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FPS’ Series B and Series B-1 Units have redemption rights that, if exercised, could cause FPS to sell shares of our common stock to pay for the redemption, which could adversely affect our stock price.

FPS’ Series B Units may be called for redemption by the holders at any time by delivering written notice to FPS. The aggregate redemption price for FPS’ Series B Units is $37.2 million as of June 30, 2021. FPS’ Series B-1 Units may be called for redemption by the holders at any time by delivering written notice to FPS. The aggregate redemption price for FPS’ Series B-1 Units is $18.0 million as of June 30, 2021. Following a redemption notice, FPS must use commercially reasonable efforts, as soon as is reasonably possible, to redeem the Series B or Series B-1 Units, as applicable. If the holders of FPS’ Series B or Series B-1 Units exercise their redemption rights, FPS may be required to sell sufficient shares of our common stock (after the expiration of the lock-up period described in “Shares Eligible for Future Sale” and subject to Rule 144) to pay the redemption price. If not redeemed within 180 days, the Series B accrual rate of 12% and Series B-1 accrual rate of 8%, as applicable, incrementally increase by up to an additional 3%. If FPS sells substantial amounts of our common stock (for example, if all or large numbers of the Series B and Series B-1 Units are called for redemption) the trading price of our common stock could decline significantly and could decline below the offering price.

After this offering, voting control with respect to our company will remain concentrated in the hands of FPS. FPS will continue to be able to exercise significant influence on us.

Following the completion of the offering, FPS is expected to hold       % of our total outstanding common stock, or       % if the over-allotment option is exercised in full. As such, FPS will have significant control over the election of the members of our board of directors and thereby may significantly influence our policies and operations, including the appointment of management, future issuances of our common stock or other securities, the payment of dividends, if any, the incurrence or modification of debt, amendments to our amended and restated certificate of incorporation (“Certificate of Incorporation”) and our amended and restated bylaws (“Bylaws”), and the entering into of extraordinary transactions, and FPS’s interests may not in all cases be aligned with those of other stockholders.

In the event of a conflict between our interests and the interests of FPS, we have adopted policies and procedures, specifically a Code of Ethics and Business Conduct and, included in our Audit Committee Charter, a Related Party Transactions Policy, to identify, review, consider and approve these conflicts of interest. In general, if an affiliate of a director, executive officer or significant stockholder, including FPS, intends to engage in a transaction involving our company, that director, executive officer or significant stockholder must report the transaction for consideration and approval by our audit committee. However, there are no assurances that our efforts and policies to eliminate the potential impacts of conflicts of interest will be effective.

This concentrated control will limit your ability to influence corporate matters for the foreseeable future and potentially in perpetuity. This concentrated control could also discourage a potential investor from acquiring our common stock and might harm the market price of our common stock. We cannot predict whether this concentrated control will result in a lower or more volatile market price of our common stock or in adverse publicity or other adverse consequences.

We are a “controlled company” within the meaning of the rules of Nasdaq and, as a result, will qualify for, and may rely on, exemptions from certain corporate governance requirements.

Following the completion of this offering, FPS will continue to own in excess of 50% of the voting power of our outstanding share capital. As a result, we are a “controlled company” within the meaning of the corporate governance standards of Nasdaq. Under the rules of Nasdaq, a company of which more than 50% of the outstanding voting power is held by an individual, group or another company is a “controlled company” and is exempt from certain stock exchange corporate governance requirements, including:

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the requirement that a majority of the board of directors consists of independent directors;

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the requirement that a listed company have a nominating and governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities;

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•

the requirement that a listed company have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and

•

the requirement for an annual performance evaluation of the nominating and governance committee and compensation committee.

We currently have a board composed entirely of independent directors (for all purposes other than audit committee independence requirements) and thus our nominating and corporate governance and compensation committees are composed entirely of independent directors. If we decide to avail ourselves of any of the controlled company exemptions, you would not have the same protections afforded to stockholders of companies that are subject to all of the stock exchange corporate governance requirements.

Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us more difficult, limit attempts by our stockholders to replace or remove our current management, and limit the market price of our common stock.

Provisions in our Certificate of Incorporation and Bylaws, as well as provision of the DGCL, may have the effect of delaying or preventing a change of control or changes in our management. Our Certificate of Incorporation and Bylaws include provisions that:

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authorize our board of directors to issue, without further action by the stockholders, shares of undesignated preferred stock with terms, rights, and preferences determined by our board of directors that may be senior to our common stock;

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once FPS no longer holds at least 50% of the voting power of the Company, require that any action to be taken by our stockholders be effectuated at a duly called annual or special meeting and not by written consent;

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specify that special meetings of our stockholders can be called only by our board of directors, the Chairman of our board of directors, or our Chief Executive Officer;

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establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors;

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prohibit cumulative voting in the election of directors;

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provide that vacancies on our board of directors may be filled by a majority of directors then in office, even if less than a quorum; and

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once FPS no longer holds at least 50% of the voting power of the Company, require the approval of our board of directors or the holders of at least 66 2/3% of our outstanding shares of capital stock to amend our Bylaws and certain provisions of our Certificate of Incorporation.

These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management. Any delay or prevention of a change of control transaction or changes in our management could cause our stock price to decline.

For as long as we are an emerging growth company, we will not be required to comply with certain reporting requirements, including those relating to accounting standards and disclosure about our executive compensation, that apply to other public companies.

We are classified as an “emerging growth company” under the JOBS Act. For as long as we are an emerging growth company, which may be up to five full fiscal years, unlike other public companies, we will not be required to, among other things: (i) provide an auditor’s attestation report on management’s assessment of the effectiveness of our system of internal control over financial reporting pursuant to Section 404(b) of Sarbanes Oxley; (ii) comply with any new requirements if adopted by the PCAOB requiring mandatory audit

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firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer; (iii) provide certain disclosures regarding executive compensation required of larger public companies; or (iv) hold nonbinding advisory votes on executive compensation. In addition, since we are an emerging growth company that is a newly public company, we will not be required to provide management’s assessment of the effectiveness of our system of internal control over financial reporting until we are required to file our Form 10-K.

We may remain an emerging growth company until December 31, 2026, although we will lose that status sooner if we have more than $1.07 billion of revenues in a fiscal year, have more than $700.0 million in market value of our common stock held by non-affiliates, or issue more than $1.0 billion of non-convertible debt over a three-year period. To the extent that we rely on any of the exemptions available to emerging growth companies, you will receive less information about our executive compensation and internal control over financial reporting than issuers that are not emerging growth companies. If some investors find our common stock to be less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

As a “smaller reporting company,” certain reduced disclosure and other requirements will be available to us after we are no longer an emerging growth company.

We are also a “smaller reporting company” pursuant to the Exchange Act. Some of the reduced disclosure and other requirements available to us as a result of the JOBS Act may continue to be available to us after we are no longer an emerging growth company pursuant to the JOBS Act but remain a “smaller reporting company” pursuant to the Exchange Act. As a “smaller reporting company” we are not required to: (i) have an auditor report regarding our internal controls of financial reporting pursuant to Section 404(b) of Sarbanes Oxley; (ii) present more than two years audited financial statements in our registration statement and annual reports on Form 10-K and present selected financial data in such registration statements and annual reports; (iii) make risk factor disclosures in our annual reports of Form 10-K; and (iv) make certain otherwise required disclosures in our annual reports on Form 10-K and quarterly reports on Form 10-Q.

We have not been managed as a public company, and our current resources may not be sufficient to fulfill our public company obligations.

As a privately held company, we had not been required to comply with a number of corporate governance and financial reporting practices and policies required for a public company listed on a national stock exchange. As a public, listed company, we will incur significant legal, accounting and other expenses that we were not required to incur in the recent past, particularly after we are no longer an “emerging growth company,” as defined under the JOBS Act. In addition, new and changing laws, regulations and standards relating to corporate governance and public disclosure, including the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”) and the rules and regulations promulgated and to be promulgated thereunder, as well as under Sarbanes Oxley, the JOBS Act, and the rules and regulations of the SEC and Nasdaq have created uncertainty for public companies and increased the costs and the time that our board of directors and management will need to devote to complying with these rules and regulations. We expect these rules and regulations to increase our legal and financial compliance costs and lead to a diversion of management time and attention from revenue-generating activities.

Furthermore, the need to establish the corporate infrastructure necessary for a public, listed company may divert management’s attention from implementing our growth strategy, which could prevent us from improving our business, results of operations and financial condition. We have made, and will continue to make, changes to our internal control over financial reporting, accounting systems disclosure controls and procedures, auditing functions and other procedures related to public reporting in order to meet our reporting obligations as a public company.

Nasdaq may delist our common stock from trading on its exchange, which could adversely affect the market liquidity of our common stock, limit investors’ ability to make transactions in our common stock and adversely affect our ability to raise additional funds.

We cannot assure you that our common stock will continue to be listed on Nasdaq after this offering. In order to continue listing our common stock on Nasdaq, we must maintain certain financial, distribution

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and share price levels. Generally, following our initial public offering, we must maintain a minimum amount in stockholders’ equity (generally $2.5 million) and a minimum number of holders of our common stock (generally 300 public holders).

If Nasdaq delists our common stock from trading on its exchange and we are not able to list our securities on another national securities exchange, we and our stockholders could face significant material adverse consequences, including:

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a limited availability of market quotations for our securities;

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reduced liquidity for our securities;

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a determination that our common stock is “penny stock” which will require brokers trading in our common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our common stock;

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a limited amount of news and analyst coverage; and

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a decreased ability to issue additional securities or obtain additional financing in the future.

We have no present intention to pay dividends on our common stock in the foreseeable future and, consequently, your only opportunity to achieve a return on your investment during that time is if the price of our common stock, as applicable, appreciates.

We have never declared or paid any cash dividends on our common stock and we have no present intention to pay dividends in the foreseeable future. Any recommendation by our board of directors to pay dividends will depend on many factors, including our financial condition (including losses carried forward), results of operations, legal requirements and other factors. If the price of our common stock declines before we pay dividends, you will incur a loss on your investment, without the likelihood that this loss will be offset in part or at all by potential future cash dividends.

Further, although the Credit Facility does not prohibit us from declaring or paying dividends, the Credit Facility does prohibit FLPS from making further distributions to us unless certain conditions are met (see Note 11 to our Notes to Combined Consolidated Financial Statements included elsewhere in this prospectus). FLPS is currently our primary source of positive operating cash flow. As such, if the conditions are not met and FLPS is prohibited from making further distributions to us, then any cash available at FLPS cannot be passed along to you in the form of dividends.

Future sales of common stock by us, FPS, RNS or TRF could depress the market price of our common stock.

If we, FPS, RNS or TRF issues, sells, or indicates an intent to issue or sell, substantial amounts of common stock in the public market after the 180-day contractual lock-up and other legal restrictions on resale discussed in this prospectus lapse, the trading price of our common stock could decline significantly and could decline below the offering price. Upon completion of this offering, all of the outstanding shares of common stock other than those sold in this offering are subject to the 180-day contractual lock-up referred to above. The representatives of the underwriters may permit us, FPS, RNS or TRF to issue or sell shares prior to the expiration of the lock-up agreements. See “Underwriting.”

After the lock-up agreements pertaining to this offering expire,             additional shares will be eligible for sale in the public market, all of which shares are or will be held by FPS, RNS or TRF and will be subject to volume limitations under Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”). In addition, shares reserved for future issuance under our equity incentive plan will become eligible for sale in the public market in the future, subject to certain legal and contractual limitations.

After expiration of the 180-day lock-up period and upon our eligibility to use Form S-3 for secondary offerings, FPS, RNS or TRF may request that shares of our common stock issued to them in the Contribution Agreement or transferred to them in the SAFE Transaction be registered for public resale. If FPS, RNS or

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TRF sells a significant number of shares of our common stock through such a resale registration, the price of our common stock could be adversely affected.

Following this offering, we intend to file one or more registration statements with the SEC covering shares available for future issuance under our equity incentive plan. Upon effectiveness of those registration statements, any shares subsequently issued under the plan will be eligible for sale in the public market, except to the extent that they are restricted by the lock-up agreements referred to above and subject to compliance with Rule 144 in the case of our affiliates. Sales of a large number of the shares issued under the plan in the public market could adversely affect the market price of our common stock.

See “Shares Eligible for Future Sale” for a more detailed description of sales that may occur in the future. If these additional shares are sold, or if it is perceived that they will be sold, in the public market, the trading price of our common stock could decline substantially.

Our Certificate of Incorporation includes a forum selection clause, which could discourage claims or limit stockholders’ ability to make a claim against us, our directors, officers, other employees or stockholders.

Our Certificate of Incorporation includes a forum selection clause. Our Certificate of Incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for any stockholder (including a beneficial owner) to bring any: (i) derivative action or proceeding brought on our behalf; (ii) action asserting a claim of breach of fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders; (iii) action asserting a claim against us, our directors, officers or employees arising pursuant to any provision of the Delaware General Corporation Law (“DGCL”) or our Certificate of Incorporation or Bylaws; or (iv) action asserting a claim against us, our directors, officers or employees governed by the internal affairs doctrine, except for, as to each of (i) through (iv) above, any claim (A) as to which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following the determination), (B) that is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or (C) for which the Court of Chancery does not have subject matter jurisdiction. Unless we consent in writing to the selection of an alternative forum, the federal district courts of the U.S. shall be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under federal securities laws, including the Securities Act. We note however, that there is uncertainty as to whether a court would enforce this provision and that investors cannot waive compliance with federal securities laws and the rules and regulations thereunder. Section 22 of the Securities Act creates concurrent jurisdiction for state and federal courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. This forum selection clause may discourage claims or limit stockholders’ ability to submit claims in a judicial forum that they find favorable and may result in additional costs for a stockholder seeking to bring a claim. While we believe the risk of a court declining to enforce this forum selection clause is low, if a court were to determine the forum selection clause to be inapplicable or unenforceable in an action, we may incur additional costs in conjunction with our efforts to resolve the dispute in an alternative jurisdiction, which could have a negative impact on our results of operations and financial condition. Notwithstanding the foregoing, the forum selection clause will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the U.S. shall be the sole and exclusive forum.

As a new investor, you will experience immediate and substantial dilution in the book value of the shares that you purchase in this offering.

The public offering price is substantially higher than the as adjusted net tangible book value per share of our common stock immediately following this offering based on the total value of our tangible assets less our total liabilities. Therefore, if you purchased our common stock in this offering at the public offering price of $       per share, you would experience an immediate dilution of $       per share, the difference between the price per share you pay for our common stock and our as adjusted net tangible book value per share as of June 30, 2021, after giving effect to the issuance by us of             shares of our common stock

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in this offering, which does not include the underwriters’ option to purchase additional shares from us. This dilution is due in large part to the fact that our earlier investors paid substantially less than the offering price when they purchased their shares. You will experience additional dilution if we issue additional shares below the public offering price. For a further description of the dilution that you will experience immediately after this offering, see “Dilution.”

We will incur significantly increased costs as a result of operating as a public company, and our management will be required to devote substantial time to compliance efforts.

We will incur significant legal, accounting, insurance and other expenses as a result of being a public company. Dodd-Frank and Sarbanes Oxley, as well as related rules implemented by the SEC, have required changes in corporate governance practices of public companies. In addition, rules that the SEC is implementing or is required to implement pursuant to Dodd-Frank are expected to require additional change. We expect that compliance with these and other similar laws, rules and regulations, including compliance with Section 404 of Sarbanes Oxley, will substantially increase our expenses, including legal and accounting costs, and make some activities more time-consuming and costly. We also expect these laws, rules and regulations to make it more expensive for us to obtain director and officer liability insurance, and it may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage, which may make it more difficult for us to attract and retain qualified persons to serve on the board of directors or as officers. Although the JOBS Act may, for a limited period of time, somewhat lessen the cost of complying with these additional regulatory and other requirements, we nonetheless expect a substantial increase in legal, accounting, insurance and certain other expenses in the future, which will negatively impact our results of operations and financial condition.

General Risk Factors

The ongoing effects of the COVID-19 pandemic could adversely affect our business, financial condition, results of operations, or cash flows.

In March 2020, we began to monitor the global effects of “COVID-19,” an infectious disease caused by Severe Acute Respiratory Syndrome Coronavirus 2 (“SARS CoV-2”) that was first detected in December 2019. The World Health Organization characterized COVID-19 as a pandemic on March 11, 2020. Thereafter, most U.S. states imposed “stay-at-home” orders on their populations to slow the spread of COVID-19. Governments, public institutions, and other organizations in countries and localities throughout the world have taken and are continuing to take certain emergency measures to combat the spread of COVID-19, including implementation of restrictions on travel and orders that restrict the operations of institutions such as schools and businesses.

In addition, due to domestic and international governmental orders restricting certain activities in response to COVID-19, we have experienced, and may in the future experience, COVID-19 related delays from certain vendors and suppliers, which, in turn, has caused delays in the build out of our leasing fleet and could cause delays in the manufacturing and installation of our products and adversely impact our cash flows and results of operations including revenue. To date, we have been able to offset any delays, but in the future, it may not be possible to find replacement products or supplies, and ongoing delays could affect our business and growth. The ultimate impact of the COVID-19 pandemic is highly uncertain and subject to change. We do not yet know the full extent of potential impacts on our business, the alternative energy industry or the global economy as a whole. However, these effects could adversely impact our business, financial condition, results of operations, or cash flows.

Expanding operations internationally could expose us to risks.

Although we currently operate primarily in the U.S., we will seek to expand our business internationally. Our primary focus around international expansion involves identifying key oil producing regions where we can scale an installed base of turbine fleet, either in the form of leasing units or selling and servicing an installed base in collaboration with a local channel partner. Managing any international expansion will

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require additional resources. Any expansion internationally could subject our business to risks associated with international operations, including:

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conformity with applicable business customs, including translation into foreign languages and associated expenses;

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lack of availability of government incentives and subsidies;

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challenges in arranging, and availability of, financing for our customers;

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difficulties in staffing and managing foreign operations in an environment of diverse culture, laws, and customers, and the increased travel, infrastructure, and legal and compliance costs associated with international operations;

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installation challenges that we have not encountered before, which may require the development of a unique model for each country;

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compliance with multiple, potentially conflicting and changing governmental laws, regulations, and permitting processes including environmental, banking, employment, tax, privacy, and data protection laws and regulations such as the EU Data Privacy Directive;

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compliance with U.S. and foreign anti-bribery laws including the Foreign Corrupt Practices Act;

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difficulties in collecting payments in foreign currencies and associated foreign currency exposure; restrictions on repatriation of earnings;

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compliance with potentially conflicting and changing laws of taxing jurisdictions where we conduct business and compliance with applicable U.S. tax laws as they relate to international operations, the complexity and adverse consequences of these tax laws, and potentially adverse tax consequences due to changes in these tax laws; and

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regional economic and political conditions.

As a result of these risks, any potential future international expansion efforts that we may undertake may not be successful.

We are subject to cyber security risks. If a cyber security incident occurs, we could suffer information theft, data corruption, operational disruption and our business and results of operations could be harmed.

Our customers, and our industry generally, have become more dependent on digital and connected technologies to conduct business. We depend on digital and connected technologies to monitor our turbines, perform many of our services and to process and record financial and operating data, among other things. We also expect to increase our dependence on these technologies as we expand our EaaS offerings. Ensuring the secure and reliable processing, maintenance and transmission of this data is important to our operations and our customers. As cyber security incidents (including deliberate attacks) have increased in number, scope, and sophistication, energy assets (and related networks) may become the targets of more incidents. Our technologies, systems and networks, and those of our customers, vendors, suppliers and other business partners, may become the target of cyberattacks or information security breaches that could result in the loss or destruction of proprietary and other information, or other disruption of business operations. In addition, while we depend on certain business partners to store certain information regarding our customers and employees, these third parties may be a target of cyberattacks or information security breaches that could result in the unauthorized release, gathering, monitoring, or misuse of sensitive information. Our recourse against these business partners, if any, may be limited. In addition, we, our customers, vendors, and/or business partners may be unable to detect certain breaches (such as unauthorized surveillance) for an extended period of time. Our systems and controls for protecting against cyber security risks, and those used by our business partners, may be insufficient. The loss, misuse, destruction, unauthorized release, gathering, or monitoring of sensitive information result in significant financial losses, loss of customers and business opportunities, reputation damage, litigation (including any damages awarded), regulatory fines, penalties or intervention, reimbursement or other compensatory costs, or otherwise adversely affect our

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business, financial condition or results of operations. We will likely be required to expend additional resources to continue to modify or enhance our protective measures or to investigate and remediate any vulnerability to cyber security incidents. The reliability and capacity of our systems is critical to our operations. Any difficulties in implementing or integrating new systems or enhancing current systems, or any material disruption in our information technology systems or systems could have an adverse effect on our business and results of operations.

There has been no prior active market for our common stock and an active and liquid market for our common stock may fail to develop, which could harm the market price of our common stock.

Prior to this offering, there has been no active public market for our common stock. Although we have applied to list our common stock on Nasdaq, an active trading market for our common stock may never develop or be sustained following this offering. The initial public offering price of our common stock will be based and determined through negotiations between us and the underwriters. This initial public offering price may not be indicative of the market price of our common stock after this offering. In the absence of an active trading market for our common stock, investors may not be able to sell their common stock at or above the initial public offering price or at the time that they would like to sell.

The market price of our equity securities may be volatile, and purchasers of our common stock could incur substantial losses.

The market price for our common stock may be volatile. The stock market in general and the market for green energy in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, investors may not be able to sell their common stock at or above the price originally paid for the security. The market price for our common stock may be influenced by many factors, including:

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actual or anticipated fluctuations in our financial condition and operating results;

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actual or anticipated changes in our growth rate relative to our competitors;

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competition from existing products or new products that may emerge;

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announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations, or capital commitments;

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failure to meet or exceed financial estimates and projections of the investment community or that we provide to the public;

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issuance of new or updated research or reports by securities analysts;

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fluctuations in the valuation of companies perceived by investors to be comparable to us;

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share price and volume fluctuations attributable to inconsistent trading volume levels of our shares;

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additions or departures of key management or scientific personnel;

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disputes or other developments related to proprietary rights, including patents, litigation matters, and our ability to obtain patent protection for our technologies;

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changes in laws or regulations applicable to our products;

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changes to electric utility policies;

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announcement or expectation of additional debt or equity financing efforts;

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sales of our common stock by us, our insiders or our other stockholders; and

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general economic and market conditions.

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These and other market and industry factors may cause the market price and demand for our common stock to fluctuate substantially, regardless of our actual operating performance, which may limit or prevent investors from readily selling their common stock and may otherwise negatively affect the liquidity of our common stock.

If securities or industry analysts do not publish research or publish inaccurate research or unfavorable research about our business, the price of our common stock and trading volume could decline.

The trading market for our common stock depends in part on the research and reports that securities or industry analysts publish about us or our business. If no or few securities or industry analysts cover our company, the trading price for our common stock would be negatively impacted. If one or more of the analysts who covers us downgrades our common stock or publishes incorrect or unfavorable research about our business, the price of our common stock would likely decline. If one or more of these analysts ceases coverage of our company or fails to publish reports on us regularly, or downgrades our common stock, demand for our common stock could decrease, which could cause the price of our common stock or trading volume to decline.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance and expectations. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “may”, “will”, “should”, “expects”, “plans”, “anticipates”, “could”, “intends”, “target”, “projects”, “contemplates”, “believes”, “estimates”, “predicts”, “potential”, “opportunity”, “confident” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this prospectus include, but are not limited to, statements about:

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our future financial performance and results of operations;

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our growth plans;

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our business plan and our ability to manage our growth effectively;

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the effects of competition in our market and our ability to compete effectively;

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our plans to use the proceeds from this offering;

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estimates of our expenses, future revenues, capital requirements, our needs for additional capital and our ability to obtain additional capital;

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our ability to attract and retain qualified directors, employees and key personnel;

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future acquisitions of or investments in complementary companies;

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the effects of trends on, and fluctuations in, our results of operations;

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research and development activities;

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sales expectations;

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sources for components and parts;

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federal, state and local government regulations;

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industry and economic conditions applicable to us;

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the efficiency, reliability and environmental advantages of our products and their need for maintenance;

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market advantage;

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customer satisfaction;

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the value of using our products;

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our ability to achieve economies of scale;

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anticipation of product supply requirements;

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listing requirements;

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our turbine and heat exchanger technologies;

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the utilization of our products;

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the introduction of new technology;

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our production capacity;

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international markets;

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•

protection of intellectual property;

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cybersecurity threats;

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the adequacy of our facilities;

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dividends;

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business strategy;

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capital expenditures;

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liquidity;

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amortization expense of intangibles;

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cost of warranties;

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equity-based compensation;

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recently issued accounting standards;

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market risk;

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interest rate sensitivity;

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the Jobs Act; and

•

the effects of the COVID-19 pandemic.

We have based the forward-looking statements contained in this prospectus primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, prospects, business strategy and financial needs. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, assumptions and other factors described in the section captioned “Risk Factors” and elsewhere in this prospectus. These risks are not exhaustive. Other sections of this prospectus include additional factors that could adversely impact our business and financial performance. Furthermore, new risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this prospectus. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this prospectus, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

You should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement of which this prospectus forms a part with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

The forward-looking statements made in this prospectus relate only to events as of the date on which such statements are made. We undertake no obligation to update any forward-looking statements after the date of this prospectus or to conform such statements to actual results or revised expectations, except as required by law.

36

USE OF PROCEEDS

We estimate that our net proceeds from the sale of our common stock in this offering will be approximately $       million, assuming an initial public offering price of $       per share, which is the midpoint of the range set forth on the cover page of this prospectus, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. We will not receive any of the proceeds of the sale of shares of common stock by the selling stockholder if the underwriters exercise their option to purchase additional shares.

A $1.00 increase (decrease) in the assumed initial public offering price of $       per share would increase (decrease) the net proceeds to us from this offering by approximately $      , assuming that the number of shares offered, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions. Each increase (decrease) of 1.0 million shares in the number of shares of common stock offered by us in this offering, as set forth on the cover page of this prospectus, would increase (decrease) the net proceeds to us from this offering by approximately $      , assuming the assumed initial public offering price per share remains the same and after deducting estimated underwriting discounts and commission.

The principal purposes of this offering are to increase our financial flexibility, create a public market for our common stock, and facilitate future access to the public equity markets. We intend to use approximately $      million of the net proceeds from this offering to expand our fleet of equipment for lease, approximately $      million to expand into new C&I markets and for product improvements, approximately $      million for heat exchanger product development and to expand our sales force, approximately $      million for hydrogen development, and approximatively $      to pay down outstanding borrowings under our Credit Facility. We intend to use the remainder of the net proceeds from this offering, if any, for working capital and general corporate purposes. We may also use a portion of the net proceeds from this offering to acquire, license, or invest in products, technologies or businesses that are complementary to our business. However, we currently have no agreements or commitments to complete any such transaction.

Our expected use of net proceeds from this offering represents our current intentions based upon our present plans and business condition. As of the date of this prospectus, we cannot predict with complete certainty all of the particular uses for the net proceeds to be received upon the closing of this offering or the actual amounts that we will spend on the uses set forth above.

Our management will have broad discretion in the application of the net proceeds from this offering, and investors will be relying on the judgment of our management regarding the application of those net proceeds. The timing and amount of our actual expenditures will be based on many factors, including cash flows from operations and the anticipated growth of our business. Pending the uses described above, we plan to invest the net proceeds from this offering in short-term, interest-bearing obligations, investment-grade instruments, certificates of deposit, or direct or guaranteed obligations of the U.S. government.

37

DIVIDEND POLICY

We do not anticipate declaring or paying any cash dividends on our capital stock in the foreseeable future. Any future determination to declare and pay cash dividends, if any, will be made at the discretion of our board of directors and will depend on a variety of factors, including applicable laws, our financial condition, results of operations, contractual restrictions, capital requirements, business prospects, general business or financial market conditions, and other factors our board of directors may deem relevant. In addition, our ability to pay cash dividends is indirectly restricted by the terms of the agreements governing the Credit Facility, which prohibits our subsidiary, FLPS, from making distributions to us. See “Risk Factors –  Risk Factors Relating to our Business and Industry – We have no present intention to pay dividends on our common stock in the foreseeable future and, consequently, your only opportunity to achieve a return on your investment during that time is if the price of our common stock, as applicable, appreciates.” Our ability to pay cash dividends on our capital stock in the future may also be limited by the terms of any preferred securities we may issue or agreements governing any additional indebtedness we may incur.

38

CAPITALIZATION

The following table sets forth our cash and capitalization as of June 30, 2021:

•

on an actual basis; and

•

on an as adjusted basis to give effect to the issuance and sale of             shares of common stock in this offering at an assumed initial public offering price of $      per share (which is the midpoint of the range set forth on the cover page of this prospectus), after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, and assuming no exercise of the underwriters’ over-allotment option.

The as adjusted information below is illustrative only, and our capitalization following the completion of this offering will be adjusted based on the actual initial public offering price and other terms of this offering determined at pricing. You should read this information in conjunction with our combined consolidated financial statements and the related notes included elsewhere in this prospectus and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section and other financial information contained in this prospectus.

​	As of June 30, 2021
​	Actual			As Adjusted
Cash	​	$	667	​	$
Line of credit	​	​	22,963	​	​	​
Notes payable, net of current portion	​	​	—	​	​	​
Capital leases, net of current portion	​	​	126	​	​	​
Preferred stock, par value $0.001 per share; no shares authorized, issued and outstanding, actual; 5,000,000 shares authorized, no shares issued or outstanding, as adjusted	​	​	—	​	​	​
Common stock, par value $0.001 per share 100,000,000 shares authorized,          shares issued and outstanding, actual; 100,000,000 shares authorized,          shares issued and outstanding, as adjusted	​	​	—	​	​	​
Net parent investment	​	​	153,776	​	​	​
Additional paid-in capital	​	​	—	​	​	​
Accumulated deficit	​	​	(136,146)	​	​	​
Accumulated other comprehensive income	​	​	752	​	​	​
Total stockholder’s equity	​	$	18,382	​	$
Total capitalization	​	$	41,471	​	$	​

Each $1.00 increase or decrease in the assumed initial public offering price of $      per share (which is the midpoint of the price range set forth on the cover page of this prospectus) would increase or decrease each of cash, total stockholder’s equity and total capitalization on an as adjusted basis by approximately $      , assuming the number of shares offered, as set forth on the cover page of this prospectus, remains the same, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

Each 1,000,000 share increase or decrease in the number of shares offered in this offering would increase or decrease each of cash, total stockholder’s equity and total capitalization on an as adjusted basis by approximately $      , assuming that the price per share for the offering remains at $      (which is the midpoint of the price range set forth on the cover page of this prospectus), and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

The information in the table above excludes shares of our common stock that will become available for future issuance under our 2021 Incentive Award Plan, which will become effective in connection with the completion of this offering.

39

DILUTION

If you invest in our common stock in this offering, your interest will be immediately diluted to the extent of the difference between the initial public offering price per share of our common stock in this offering and the net tangible book value per share of our common stock after this offering.

Our historical net tangible book value as of June 30, 2021 was $0.00, or $0.00 per share of our common stock. Historical net tangible book value represents the amount of total tangible assets less total liabilities, and historical net tangible book value per share represents net tangible book value divided by the number of shares of our common stock outstanding as of June 30, 2021, after giving effect to the Contribution Transaction.

Our pro forma net tangible book value as of June 30, 2021 was $18.13 million, or $       per share of our common stock. Pro forma net tangible book value represents the amount of our total tangible assets less our total liabilities, after giving effect to the Contribution Transaction. Pro forma net tangible book value per share represents pro forma net tangible book value divided by the total number of shares of our common stock outstanding as of June 30, 2021, after giving effect to the Contribution Transaction.

After giving further effect to the sale of             shares of common stock in this offering at an assumed initial public offering price of $       per share, the midpoint of the price range set forth on the cover page of this prospectus, and after deducting the underwriting discount and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of June 30, 2021 would have been approximately $      , or $       per share. This represents an immediate increase in pro forma as adjusted net tangible book value of $       per share to the existing stockholder and an immediate dilution of $       per share to new investors. The following table illustrates this per share dilution:

Assumed initial public offering price per share	​	​	$
Historical net tangible book value per share as of June 30, 2021	$	0.00	​
Pro forma increase in net tangible book value per share as of June 30, 2021	$		​
Pro forma net tangible book value per share as of June 30, 2021	$		​
Increase in pro forma net tangible book value per share attributable to investors purchasing shares in this offering	$		​
Pro forma as adjusted net tangible book value per share after this offering	$		​
Dilution per share to investors in this offering	​	​	$

A $1.00 increase (decrease) in the assumed initial public offering price of common stock of $       per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease), our as adjusted net tangible book value per share after this offering by $      , and would increase (decrease) dilution per share to new investors in this offering by $      , assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the underwriting discount and estimated offering expenses payable by us. Similarly, each increase (decrease) of 1.0 million shares in the number of shares offered by us would increase (decrease) our as adjusted net tangible book value per share after this offering by approximately $       per share and decrease (increase) the dilution to new investors by approximately $       per share, assuming that the assumed initial public offering price remains the same, and after deducting the underwriting discount and estimated offering expenses payable by us.

The following table shows, as of June 30, 2021, after giving effect to the Contribution Transaction, the number of shares of common stock purchased from us, the total consideration paid to us and the price paid per share by the existing stockholder and by new investors purchasing common stock in this offering at an assumed initial public offering price of $       per share, before deducting the underwriting discount and estimated offering expenses payable by us, and assuming no exercise of the underwriters’ over-allotment option (in thousands, except per share amounts and percentages):

40

​

Shares Purchased

Total Consideration

Average Price Per Share

​

Number

Percent

Amount

Percent

Existing stockholder

​

​

​

%

​

$

​

%

​

$

New investors

​

​

​

%

​

​

​

​

%

​

​

​

Total

​

​

100%

​

$

​

100%

​

$

​

A $1.00 increase (decrease) in the assumed initial public offering price of $       per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, would increase (decrease) the total consideration paid by new investors and total consideration paid by all stockholders by approximately $      , assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the underwriting discount and estimated offering expenses payable by us. Similarly, each increase (decrease) of 1.0 million shares in the number of shares offered by us would increase (decrease) the total consideration paid by new investors and total consideration paid by all stockholders by approximately $      , assuming that the assumed initial public offering price remains the same, and after deducting the underwriting discount and estimated offering expenses payable by us.

A $1.00 increase (decrease) in the assumed initial public offering price of $       per share would (decrease) increase the number of shares of our common stock issued to FPS but would not increase the total consideration paid by it in the Contribution Transaction. Assuming that the initial public offering price remains the same, an increase (or decrease) in the number of shares offered by us in this offering would not increase (or decrease) the number of shares we will issue to FPS in the Contribution Transaction.

The above table and discussion includes             shares of common stock outstanding as of June 30, 2021, after giving effect to the Contribution Transaction, and excludes, as of June 30, 2021,             shares of common stock reserved for future grant or issuance under our 2021 Plan, which will become effective in connection with the completion of this offering.

41

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our combined consolidated financial statements and related notes included elsewhere in this prospectus. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed below and elsewhere in this prospectus, particularly under the headings “Special Note Regarding Forward-Looking Statements” and “Risk Factors.”

Our Predecessors and FlexEnergy Green Solutions Inc.

FGS was formed in December 2020 and does not have historical financial data. The historical financial data discussed in this Management’s Discussion and Analysis of Financial Condition and Results of Operations are those of FEI and FLPS and their consolidated subsidiaries. After the completion of the Contribution Transaction, FEI and FLPS will be wholly-owned subsidiaries of FGS.

Basis of Presentation

The combined consolidated financial statements include the consolidated accounts of FEI, the accounts of its wholly-owned subsidiaries FEES and FlexEnergy Support Services, Inc., the consolidated accounts of FLPS, and the accounts of its wholly-owned subsidiary Flex Power Co. Flex Power Co. includes the accounts of its wholly-owned subsidiary FLPS Canada. Our combined consolidated financial statements have been prepared in accordance with U.S. GAAP.

Overview

We provide turbine power generation and heat recovery products to C&I customers focused on improving their performance, increasing energy efficiency, and reducing their carbon footprint. We believe we are the premier manufacturer and project operator of 300 kW to 1.3 MW, ultra-clean, highly reliable gas turbines and custom-fit heat recovery products. We were founded in December of 2010 upon the acquisition of our small gas turbine product from Ingersoll Rand Energy Systems, which was developed beginning in 1996 and commercialized in the 2000’s. Key personnel including a leading team of turbine engineers joined our business, along with the acquisition of manufacturing operations and intellectual property. Beginning in 2012, we launched our lease offering and began building out our field service operations, focusing on offering our turbine product for power generation in the North American oilfield market. Beginning in 2017, we began selling our industrial heat recovery products. With our established leasing and field service infrastructure paired with original equipment manufacturing, engineering expertise and proprietary technology, we believe we have a differentiated, vertically integrated business model that is unique to the distributed power industry.

Our product offering includes 333 kW and 1.3MW gas turbine units and customized heat recovery products. Our clean, reliable gas turbines convert waste gas into useful energy and reduce CO2 and NOx emissions. As of June 30, 2021, our turbine products have approximately 8.4 million run hours of operations including 4.8 million run hours within our lease fleet, and have demonstrated a 99% uptime performance. Our heat recovery products enable improved heat transfer to minimize energy waste and consumption.

We have delivered approximately 120 MW of installed capacity of our Flex Turbine product into the market through both direct sales and leasing our turbine fleet which we own and operate for the life of the asset. Our lease fleet currently comprises approximately 49 MW of installed capacity, which has accumulated since inception in 2012 at a compounded annualized growth rate of 37%.

Our Primary Applications

We believe we are in a strong position to grow our business amid the transition towards more sustainable, lower carbon sources of energy. We believe this energy transition will include:

•

Long-term, sustainable growth in electric demand

•

Efforts for industries and individual companies to reduce carbon emissions and air pollution

42

•

Energy efficiency playing a major role in decarbonization efforts

•

Ongoing secular shift to distributed power generation

We have proven solutions that are well supported by the above trends. Primary applications of our proven solutions include:

Converting Waste Gas to Useful Energy:

•

The Flex Turbine can run on waste fuels such as methane from landfills and CO2 heavy field gas from oil producing wells down to 350 BTUs, as well as synthetic gasses such as ethane produced in the refining process with up to 2,500 BTUs to produce reliable, distributed electricity.

•

Our current and future customer base under this vertical are predominantly represented by North American independent oil producers, global supermajors and midstream gas companies who desire our turbine products.

Improving Traditional Processes:

•

Flex Heat Recovery products incorporate the most effective high temperature, high pressure heat exchanger technology. They have a smaller footprint than competing systems due to their design efficiency, making them ideal for space constrained applications. They are currently being evaluated for the next generation of carbon capture technology, multiple fuel cell applications, and emissions reduction projects.

•

Our current and future customer base under this vertical are predominantly represented by the companies in U.S. C&I sector who desire our turbine products as well as original manufacturers who produce fuel cells, internal combustion engines, and gas turbines and who desire our heat recovery products.

Enabling Emerging Clean Technology:

•

Efficient use of thermal energy is the key to energy efficiency in many of today’s most promising alternative fuel technologies, such as solid oxide fuel cells for power generation, traditional fuel cell technology for power, green hydrogen production, and certain heat as energy storage applications, like molten salt. We believe our Flex Heat Recovery products enable these green technologies to be more cost competitive with conventional forms of energy production.

•

Our current and future customer base under this vertical are predominantly represented by manufacturers of fuel cells, internal combustion engines and gas turbines who desire our heat recovery products.

Our Customer Base and Demand for our Products

We believe the current and future demand for our products will be underpinned by sustainable, growing demand from our Converting Waste Gas to Useful Energy vertical and augmented by emerging demand for our heat recovery products to improve industrial processes and enable new clean technologies.

The majority of demand for our product to date has come from oil producers who require highly reliable onsite power solutions at their well sites that often do not have reliable access to utility power. Our Flex Turbine’s unique ability to run on a wide range of unprocessed field gas that is often otherwise burned off by flaring - along with very low maintenance, high up-time performance and cyclic load handling - has driven customers to our power generation solution. As further described below, our zero capex leasing solution and direct field service support are paramount to our success of winning and retaining new business. We expect our growth in this market vertical will be driven primarily by the following:

•

Sustained drilling of new oil wells in our core North American market

•

Expansion of our proven solution to very large international flare gas to power project opportunities

43

•

Heightened efforts for oil producers to seek solutions to reduce carbon emissions across their operations, including a concerted focus on significantly reducing levels of upstream flaring.

In addition, we serve and expect additional demand from the C&I sector for our Flex Turbines. While overall revenue from our Flex Heat Recovery products comprised less than 10% of total revenue for the year-ended December 31, 2020 and for the six months ended June 30, 2021, we expect to grow revenue from these products as we believe customers will demand heat recovery products that improve traditional processes and help enable emerging clean technology.

Revenue Generation under our EaaS Business Model

Under our EaaS business model, we have accumulated an asset base that represents a modern fleet of long-lived power generation assets. Since 2012, we have offered customers the option of purchasing our manufactured product or entering into an equipment leasing contract. We have experienced strong annualized growth of our turbine leasing fleet, predominantly to North American oil producers who largely prefer to lease or rent power generation equipment for wellsite power as opposed to purchasing generation equipment within their annual capital budgets. We believe this zero-capex solution for our customer base extends beyond our O&G vertical and into the C&I sector where customers are not only increasingly self-generating their own power but, we believe, also want a power solution that replicates a consistent monthly utility bill. At the same time, we also believe our EaaS leasing solution is beneficial to our stakeholders because we own and operate our bespoke generation asset in a manner that generates attractive life cycle returns on our underlying capital investment. Because we own, operate and directly maintain our asset at customer sites, we have gained a tremendous amount of field learning knowledge. In coordination between our field service, manufacturing and engineering teams, this field learning and operating data retention has translated into both exceptional uptime to our customers as well as solutions that can significantly extend the life of our turbine asset base. Included in a customer’s monthly lease rate is also the service of the unit from our trained service technicians.

In addition to our EaaS offering, we have customers who prefer to make a capital investment in their power generation asset through direct purchases of our manufactured products. This includes both our gas turbine products and our heat recovery products. Many of our customers, particularly those in the U.S., enter into a long-term service agreement in addition to purchasing equipment, while other customers instead prefer to have their purchased equipment serviced on a time-and-materials basis. Together the long-term service agreements, the time and materials that we charge our third-party customers and commissioning services make up our service revenue.

Costs of Conducting Our Business

The principal costs associated with operating our business are:

•

Cost of revenues (excluding turbine fleet depreciation)

•

Depreciation associated with our rental fleet

•

Selling, general and administrative expenses

•

Interest expense

Cost of revenues (excluding turbine fleet depreciation) include:

•

Cost of Turbine Leasing Fleet, which includes the direct cost of field service personnel and consumable spare parts allocated to maintaining our leasing turbines

•

Cost of Turbine Service on Sold Product, which includes the direct cost of field service personnel and consumable spare parts allocated to maintaining our aftermarket service arrangements of customer purchased turbines; and

•

Cost of Manufactured Product, which includes the cost of manufacturing the equipment sold, including material and manufacturing labor and overhead. Since acquiring the manufacturing

44

operations in 2010, our available throughput volume has exceeded our actual volume of turbine production on an annual basis. In recent years we have taken measures to reduce our production and associated costs down to a more suitable level that we believe fulfills the measured demand coming from our turbine leasing fleet and third-party customers. We have begun to realize further cost reductions in the first half of 2021 by consolidating our two production facilities to a single facility. This facility will be the single point of production for both the continued growth of our turbine installed base as well as what we believe will be emerging demand for our heat recovery products in future years.

Our depreciation expense consists of the depreciation expense related to our own turbine assets. These assets are depreciated over a 10 year period.

Our selling, general and administrative expenses primarily consist of salaries expense, marketing expense and professional services, including legal expenses.

Interest expense primarily represents monthly interest paid under our asset-back financing arrangement as further described below in “Liquidity and Capital Resources.”

How We Evaluate our Operations

We use a variety of qualitative, operational and financial metrics to assess our performance. Among other measures, management considers (i) the size of our turbine leasing fleet (ii) revenue, (iii) EBITDA and (iv) Adjusted EBITDA.

Size of our lease fleet

We believe the continued growth of our turbine leasing fleet is an important indicator of current and future financial performance, given the proven and sustainable revenue stream as well as the opportunity to realize cost efficiencies within our cost of turbine leasing with additional growth of the underlying asset base. We measure the size of our lease fleet in the form of total megawatts based on the combined installed capacity our turbine units as well as the number of turbine units in the fleet.

Revenue

We analyze our revenue by comparing actual quarterly and annual revenue to our internal projections for a given period and to prior periods to assess our performance.

EBITDA and Adjusted EBITDA

We view EBITDA and Adjusted EBITDA as important indicators of performance. We define EBITDA as net income (loss), plus (i) depreciation and amortization expense, (ii) interest expense and (iii) income tax expense. We define Adjusted EBITDA as EBITDA plus or minus (i) equity-based compensation expense and (ii) certain non-cash charges and unusual or non-recurring charges or income that we do not view as representative of our ongoing operations.

Factors Impacting Comparability of Our Financial Results

Public Company Expenses

Upon completion of this offering, we expect to incur direct, incremental general and administrative (“G&A”) expenses as a result of being a publicly traded company, including, but not limited to, costs associated with hiring new personnel, implementation of compensation programs that are competitive with our public company peer group, annual and quarterly reports to stockholders, tax return preparation, independent auditor fees, investor relations activities, registrar and transfer agent fees, additional legal fees, incremental director and officer liability insurance costs and incremental independent director compensation. These direct, incremental G&A expenses are not included in our historical results of operations.

45

We Will Incur Additional Taxes as a Result of being “C” Corporation

Prior to the completion of the Contribution Transaction, the results of operations of the business (comprised of the businesses of FEI and FLPS) were consolidated into the financial statements of FPS, a limited liability company taxed as a partnership. Upon completion of the Contribution Transaction, the operations of the business will be conducted under FGS, a “C” corporation for tax purposes. Thus, once we have become profitable and have fully utilized all net operating loss carry forwards available to us, we anticipate significant increases in income tax expenses for periods after the completion of the Contribution Transaction. See “Management’s Discussion and Analysis of Financial Condition and Results of Operation – Income Taxes.”

Effect of COVID-19

Demand and pricing in the oil and gas markets fell significantly due to the COVID-19 pandemic and an increase in global oil supply driven by disagreements with respect to oil pricing between Russia and members of OPEC. The effects of the COVID-19 pandemic continued to drive reduced demand leading to volatility in prices during 2020 and the first six months of 2021. This commodity price volatility adversely affected demand for our products and services and negatively impacted our results of operations during 2020 and the first six months of 2021.

Going Concern

The combined consolidated financial statements have been prepared as though we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. We have incurred operating losses and negative cash flows from operations since inception. As of June 30, 2021, we have an accumulated deficit of approximately $136.15 million. Management expects to continue to incur operating losses and negative cash flows. We have financed our operations to date with proceeds from equity infusions from FPS and from debt financings.

We will need to raise additional capital in order to continue to fund operations. We believe we will be able to obtain additional capital through equity financings or other arrangements to fund operations; however, there can be no assurance that such additional financing, if available, can be obtained on acceptable terms. If we are unable to obtain such additional financing, future operations would need to be scaled back or discontinued.

Accordingly, these factors raise substantial doubt about our ability to continue as a going concern within one year after the date the combined consolidated financial statements are issued. The combined consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

Results of Operations

Comparison of the Years Ended December 31, 2020 and 2019

The following table sets forth our results of operations for the years ended December 31, 2020 and 2019.

46

​	Years Ended December 31,
(in thousands)	2020			2019
​	(FEI and FLPS)
Statement of Operations and Comprehensive Loss Data:	​	​	​	​	​	​
Revenue	​	​	​	​	​	​
Turbine leasing fleet	​	$	17,838	​	$	16,833
Turbine service on sold product	​	​	2,213	​	​	2,824
Manufactured product	​	​	3,276	​	​	5,716
Total revenue	​	$	23,327	​	$	25,373
Cost of revenue	​	​	​	​	​	​
Turbine leasing fleet (excluding depreciation of fleet turbines)	​	$	4,884	​	$	5,442
Turbine service on sold product	​	​	1,691	​	​	2,797
Manufactured product	​	​	5,789	​	​	9,531
Depreciation of fleet turbines	​	​	5,007	​	​	4,713
Total cost of revenue	​	$	17,371	​	$	22,483
Operating expenses	​	​	​	​	​	​
Selling, general and administrative	​	$	11,826	​	$	12,400
Research and development	​	​	120	​	​	237
Total operating expenses	​	$	11,946	​	$	12,637
Operating loss	​	$	(5,990)	​	$	(9,747)
Other income (expense)	​	​	​	​	​	​
Interest expense	​	$	(1,114)	​	$	(992)
Other (expense) income, net	​	​	31	​	​	(159)
Total other income (expense), net	​	$	(1,083)	​	$	(1,151)
Loss before income taxes	​	$	(7,073)	​	$	(10,898)
Income tax provision	​	​	(31)	​	​	(7)
Net loss	​	$	(7,104)	​	$	(10,905)
Other comprehensive gain, net of tax	​	​	​	​	​	​
Foreign currency translation adjustments	​	$	443	​	$	185
Total other comprehensive gain, net of tax	​	$	443	​	$	185
Comprehensive loss	​	$	(6,661)	​	$	(10,720)
EBITDA	​	$	1,114	​	$	(3,712)
Adjusted EBITDA	​	$	1,209	​	$	(3,457)

Size of our lease fleet

Our lease fleet has increased by 4 MW of installed capacity, or 9%, to 49 MW at December 31, 2020 compared to 45 MW of installed capacity at December 31, 2019. This increase was due to the additions of newbuild turbine assets that were manufactured and made field-ready during 2020.

Revenue

Turbine Leasing Fleet.   Our turbine leasing fleet revenue increased $1.01 million, or 6%, to $17.84 million for the year ended December 31, 2020 compared to $16.83 million for the year ended December 31, 2019. This increase was primarily due to strong demand and a 12% increase in average annual deployments for turbines under leasing contracts across our customer base.

Turbine Service on Sold Product.   Our turbine service on sold product revenue decreased $0.61 million, or 22%, to $2.21 million for the year ended December 31, 2020 compared to $2.82 million for the

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year ended December 31, 2019. This decrease was primarily due to customers of sold manufactured product deferring or cancelling anticipated major component overhauls performed on a time and materials basis amid economic uncertainty and travel restrictions throughout the majority of 2020. Such time and materials revenue decreased $0.68 million, or 47%, to $0.75 million for the year ended December 31, 2020 compared to $1.43 million for the year ended December 31, 2019.

Manufactured Product.   Our manufactured product revenue decreased $2.44 million, or 43%, to $3.28 million for the year ended December 31, 2020 compared to $5.72 million for the year ended December 31, 2019. This decrease was primarily due to the fact that we de-expedited the production of new turbines under executed purchase orders, both to address the needs of our customers and to decrease our production levels given disruptions within our supply chain amid larger economic uncertainty.

Cost of Revenues

Turbine Leasing Fleet.   Our cost of turbine leasing fleet decreased $0.56 million, or 10%, to $4.88 million for the year ended December 31, 2020 compared to $5.44 million for the year ended December 31, 2019. This decrease was primarily due to proactive measures across our field operations to reduce cost such as travel, overtime and spare parts purchases.

Turbine Service on Sold Product.   Our cost of turbine service on sold product decreased $1.11 million, or 40%, to $1.69 million for the year ended December 31, 2020 compared to $2.80 million for the year ended December 31, 2019. This decrease was primarily due to customers of sold manufactured product deferring or cancelling anticipated major component overhauls performed on a time and materials basis amid economic uncertainty and travel restrictions throughout the majority of 2020.

Manufactured Product.   Our cost of manufactured product decreased $3.74 million, or 39%, to $5.79 million for the year ended December 31, 2020 compared to $9.53 million for the year ended December 31, 2019. This decrease was primarily due to the corresponding reduction in product sales caused by the fact that we de-expedited the production of new turbine under executed purchase orders, both to address the needs of our customers and also decrease our production levels given disruptions within our supply chain amid larger economic uncertainty. The annual cost of our direct manufacturing labor and overhead decreased $1.50 million, or 26%, to $4.23 million for the year ended December 31, 2020 compared to $5.73 million for the year ended December 31, 2019.

Depreciation of Fleet Turbines.   Our cost of depreciation of fleet turbines increased $0.29 million, or 6%, to $5.00 million for the year ended December 31, 2020 compared to $4.71 million for the year ended December 31, 2019. This increase was primarily due to the increase in the size of our fleet.

Operating Expenses

Selling, General and Administrative Expenses.   Selling, general and administrative expenses (“SG&A”) decreased $0.57 million, or 5%, to $11.83 million for the year ended December 31, 2020 compared to $12.40 million for the year ended December 31, 2019. This decrease was primarily due to a series of cost reduction measures implemented beginning in the second quarter of 2020 in response the economic uncertainty caused by the COVID-19 pandemic.

We expect SG&A expenses to increase considerably in future periods as a result of being a public company. Please see “Risk Factors – Risk Factors Relating to Ownership of Our Common Stock – We will incur significantly increased costs as a result of operating as a public company, and our management will be required to devote substantial time to compliance efforts.”

Research and Development.   Research and development expenses decreased $0.12 million, or 49%, to $0.12 million for the year ended December 31, 2020 compared to $0.24 million for the year ended December 31, 2019. This decrease was primarily due to the suspension of research and development spending beginning in the second quarter of 2020 in response the economic uncertainty caused by the COVID-19 pandemic.

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Other income (expense)

Interest Expense.   Interest expense increased $0.12 million, or 12%, to $1.11 million for the year ended December 31, 2020 compared to $0.99 million for the year ended December 31, 2019. This increase was primarily due to higher average balances on our line of credit during the year ended December 31, 2020.

Other Income (Expense).   Other income increased $0.19 million to $0.03 million for the year ended December 31, 2020 compared to $(0.16) million for the year ended December 31, 2019. This increase was primarily due to expenses incurred for facility relocation in 2019 that were not incurred in 2020.

Income Tax Provision

Prior to the closing of this offering, the results of operations of the business (comprised of the businesses of FEI and FLPS) were consolidated into the financial statements of FPS, a limited liability company taxed as a partnership. After the closing of this offering, the operations of the business will be conducted under FGS, a “C” corporation for tax purposes. Thus, once we have become profitable and have fully utilized all NOL carryforwards available to us, we anticipate significant increases in income tax expenses for periods after the closing of this offering.

At December 31, 2020, we had federal, state and foreign NOL carryforwards of $106.85 million, $78.22 million and $0.22 million, respectively, which will expire, if unused, beginning in 2031, 2026 and 2035, respectively; provided that federal NOLs generated post-Tax Cuts and Jobs Act (“the Tax Act”) for the tax years ended December 31, 2018 and thereafter ($29.48 million at December 31, 2020) do not expire.

Our NOL utilization could be limited under Internal Revenue Code Section 382 due to certain ownership changes that have occurred and that may occur in the future. Our preliminary analysis indicates that $48.40 million of our NOLs will expire unutilized. See “Risk Factors – Risk Factors Relating to our Business and Industry – We might not be able to utilize a significant portion of our net operating loss carryforwards and research and development tax credit carryforwards.” and Note 10 to our Notes to Combined Consolidated Financial Statements included elsewhere in this prospectus.

Net Loss

Net loss decreased $3.81 million, or 35%, to $7.10 million for the year ended December 31, 2020 compared to $10.91 million for the year ended December 31, 2019, primarily due to the decreases in cost of revenue discussed above.

Foreign Currency Translation Adjustments

Foreign currency translation adjustments increased $0.26 million, or 139%, to $0.44 million for the year ended December 31, 2020 compared to $0.19 million for the year ended December 31, 2019.

Comprehensive Loss

Comprehensive loss decreased $4.06 million, or 38%, to $6.66 million for the year ended December 31, 2020 compared to $10.72 million for the year ended December 31, 2019, primarily due to the decreases in cost of revenue discussed above.

Adjusted EBITDA

Adjusted EBITDA increased $4.67 million to $1.21 million for the year ended December 31, 2020 compared to $(3.46) million for the year ended December 31, 2019. The increase was primarily due to an increase in Flex Turbine lease fleet revenue coupled with decreases in cost of revenue and operating expenses resulting from a series of cost reduction measures implemented to preserve our liquidity amid the greater economic uncertainty resulting from the COVID-19 pandemic.

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Comparison of the Six Months Ended June 30, 2021 and 2020

​	Six Months Ended June 30,
(in thousands)	2021			2020
​	(unaudited)
Statement of Operations and Comprehensive Loss Data:	​			​
Revenue	​	​	​	​	​	​
Turbine leasing fleet	​	$	7,272	​	$	10,024
Turbine service on sold product	​	​	1,601	​	​	1,120
Manufactured product	​	​	1,276	​	​	1,658
Total revenue	​	$	10,149	​	$	12,802
Cost of revenue	​	​	​	​	​	​
Turbine leasing fleet (excluding depreciation of fleet turbines)	​	$	2,967	​	$	2,562
Turbine service on sold product	​	​	1,107	​	​	961
Manufactured product	​	​	2,530	​	​	3,458
Depreciation of fleet turbines	​	​	2,167	​	​	2,766
Total cost of revenue	​	$	8,771	​	$	9,747
Operating expenses	​	​	​	​	​	​
Selling, general and administrative	​	$	6,759	​	$	5,957
Research and development	​	​	67	​	​	75
Total operating expenses	​	$	6,826	​	$	6,032
Operating loss	​	$	(5,448)	​	$	(2,977)
Other income (expense)	​	​	​	​	​	​
Interest expense	​	$	(539)	​	$	(665)
Other (expense) income, net	​	​	2,534	​	​	52
Total other income (expense), net	​	$	1,995	​	$	(613)
Loss before income taxes	​	$	(3,453)	​	$	(3,590)
Income tax provision	​	​	(178)	​	​	(4)
Net loss	​	$	(3,631)	​	$	(3,594)
Other comprehensive gain (loss), net of tax	​	​	​	​	​	​
Foreign currency translation adjustments	​	$	209	​	$	(213)
Total other comprehensive gain (loss), net of tax	​	$	209	​	$	(213)
Comprehensive loss	​	$	(3,422)	​	$	(3,807)
EBITDA	​	$	751	​	$	511
Adjusted EBITDA .	​	$	(1,189)	​	$	546

Size of our lease fleet

Our lease fleet has increased by 2 MW of installed capacity, or 4%, to 49 MW at June 30, 2021 compared to 47 MW of installed capacity at June 30, 2020. This increase was due to the additions of newbuild turbine assets that were manufactured and made field-ready during the second half of 2020 and the first half of 2021.

Revenue

Turbine Leasing Fleet.   Our turbine leasing fleet revenue decreased $2.75 million, or 27%, to $7.27 million for the six months ended June 30, 2021 compared to $10.02 million for the six months ended

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June 30, 2020. This decrease was primarily due to a 23% decrease in average monthly deployments for turbines under leasing contracts across our customer base, following a record high level of average monthly deployments set in the first half of 2020.

Turbine Service on Sold Product.   Our turbine service on sold product revenue increased $0.48 million, or 43%, to $1.60 million for the six months ended June 30, 2021 compared to $1.12 million for the six months ended June 30, 2020. This increase was primarily due to customers of sold manufactured product resuming anticipated major component overhauls performed on a time and materials basis amid increased economic certainty and an ease on travel restrictions. Such time and materials revenue increased $0.38 million, or 87%, to $0.83 million for the six months ended June 30, 2021 compared to $0.45 million for the six months ended June 30, 2020.

Manufactured Product.   Our manufactured product revenue decreased $0.38 million, or 23%, to $1.28 million for the six months ended June 30, 2021 compared to $1.66 million for the six months ended June 30, 2020. This decrease was primarily due to moving production facilities during the first three months of 2021, during which time the manufacture of turbines was significantly curtailed.

Cost of Revenues

Turbine Leasing Fleet.   Our cost of turbine leasing fleet increased $0.41 million, or 16%, to $2.97 million for the six months ended June 30, 2021 compared to $2.56 million for the six months ended June 30, 2020. This increase was primarily due to an increased level of travel, overtime and spare parts purchasing resulting from resuming more normalized field operations versus the restrictions put into place during the first half of 2020 amid the COVID-19 outbreak.

Turbine Service on Sold Product.   Our cost of turbine service on sold product increased $0.15 million, or 15%, to $1.11 million for the six months ended June 30, 2021 compared to $0.96 million for the six months ended June 30, 2020. This increase was primarily due to customers of sold manufactured product resuming anticipated major component overhauls performed on a time and materials basis amid increased economic uncertainty and an ease on travel restrictions.

Manufactured Product.   Our cost of manufactured product decreased $0.93 million, or 27%, to $2.53 million for the six months ended June 30, 2021 compared to $3.46 million for the six months ended June 30, 2020. This decrease was primarily due to the realization of lower operating cost in the form of rent, utilities and other expenses associated with the consolidation of our operating facilities into one central location and where all turbines, heat recovery products and aftermarket refurbishment takes place. The cost of our direct manufacturing labor and overhead decreased $0.70 million, or 30%, to $1.66 million for the six months ended June 30, 2021 compared to $2.36 million for the six months ended June 30, 2020.

Depreciation of Fleet Turbines.   Our cost of depreciation of fleet turbines decreased $0.60 million, or 22%, to $2.17 million for the six months ended June 30, 2021 compared to $2.77 million for the six months ended June 30, 2020. This decrease was primarily due to a 23% decrease in average monthly deployments for turbines under leasing contracts across our customer base, following a record high level of average monthly deployments set in the first half of 2020.

Operating Expenses

Selling, General and Administrative Expenses.   SG&A expenses increased $0.80 million, or 13%, to $6.76 million for the six months ended June 30, 2021 compared to $5.96 million for the six months ended June 30, 2020. This increase was primarily due to increased depreciation recorded as operating expenses for units not currently deployed and a series of cost reduction measures implemented beginning in the second quarter of 2020 in response the economic uncertainty caused by the COVID-19 pandemic. During 2021, these cost reduction measures were lifted.

We expect SG&A expenses to increase considerably in future periods as a result of being a public company. Please see “Risk Factors — Risk Factors Relating to Ownership of Our Common Stock — We will

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incur significantly increased costs as a result of operating as a public company, and our management will be required to devote substantial time to compliance efforts.”

Research and Development.   Research and development expenses decreased $0.01 million, or 11%, to $0.07 million for the six months ended June 30, 2021 compared to $0.08 million for the six months ended June 30, 2020.

Other income (expense)

Interest Expense.   Interest expense decreased $0.13 million, or 19%, to $0.54 million for the six months ended June 30, 2021 compared to $0.67 million for the six months ended June 30, 2020. This decrease was primarily due to lower average balances on our line of credit during the six months ended June 30, 2021.

Other Income (Expense).   Other income increased $2.48 million to $2.53 million for the six months ended June 30, 2021 compared to $0.05 million for the six months ended June 30, 2020. This increase was primarily due to the forgiveness of the PPP loans during the second quarter of 2021, which resulted in a gain on forgiveness of debt of $2.38 million.

Net Loss

Net loss increased $0.04 million, or 1%, to $3.63 million for the six months ended June 30, 2021 compared to $3.59 million for the six months ended June 30, 2020, primarily due to a series of cost reduction measures implemented beginning in the second quarter of 2020 in response the economic uncertainty caused by the COVID-19 pandemic, and a decline in turbine leasing revenue, partially offset by $2.38 million of other income related to forgiveness of the PPP loan described above. During 2021, these cost reduction measures were lifted.

Foreign Currency Translation Adjustments

Foreign currency translation gain (loss) adjustments increased $0.42 million, or 198%, to $0.21 million for the six months ended June 30, 2021 compared to $(0.21) million for the six months ended June 30, 2020.

Comprehensive Loss

Comprehensive loss decreased $0.39 million, or 10%, to $3.42 million for the six months ended June 30, 2021 compared to $3.81 million for the six months ended June 30, 2020, for the reasons set forth in “Net Loss” above, partially offset by positive foreign currency translation adjustments.

Adjusted EBITDA

Adjusted EBITDA decreased $1.74 million to $(1.19) million for the six months ended June 30, 2021 compared to $0.55 million for the six months ended June 30, 2020. The decrease was primarily due to the forgiveness of the PPP loans during the second quarter of 2021, which had reduced our net loss, a decline in turbine leasing revenue, and an increase in costs due to the restoration of cost reduction measures that were implemented as a result of the COVID-19 pandemic.

Comparison of Non-GAAP Financial Measures

We view EBITDA and Adjusted EBITDA as important indicators of performance. We define EBITDA as net income (loss), plus (i) depreciation and amortization expense, (ii) interest expense and (iii) income tax expense. We define Adjusted EBITDA as EBITDA plus or minus (i) equity-based compensation expense and (ii) certain non-cash charges and unusual or non-recurring charges or income that we do not view as representative of our ongoing operations.

We believe that our presentation of EBITDA and Adjusted EBITDA will provide useful information to investors in assessing our financial condition and results of operations. Net income is the GAAP measure

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most directly comparable to EBITDA and Adjusted EBITDA. EBITDA and Adjusted EBITDA should not be considered alternatives to net income or loss presented in accordance with GAAP. Because EBITDA and Adjusted EBITDA may be defined differently by other companies in our industry, our definitions of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures of other companies, thereby diminishing their utility. The following table presents a reconciliation of EBITDA and Adjusted EBITDA to net loss for each of the periods indicated.

​	Year Ended December 31,						Six Months Ended June 30,
(in thousands)	2020			2019			2021			2020
Net Loss	​	$	(7,104)	​	$	(10,905)	​	$	(3,631)	​	$	(3,594)
Depreciation and amortization	​	​	7,073	​	​	6,194	​	​	3,665	​	​	3,436
Interest expense, net	​	​	1,114	​	​	992	​	​	539	​	​	665
Income tax provision	​	​	31	​	​	7	​	​	178	​	​	4
EBITDA	​	$	1,114	​	$	(3,712)	​	$	751	​	$	511
One-time facility relocation expenses(1)	​	​	25	​	​	185	​	​	301	​	​	0
Equity-based compensation	​	​	70	​	​	70	​	​	36	​	​	35
PPP loan forgiveness	​	​	0	​	​	0	​	​	(2,378)	​	​	0
Restructuring charge	​	​	0	​	​	0	​	​	101	​	​	0
Adjusted EBITDA	​	$	1,209	​	$	(3,457)	​	$	(1,189)	​	$	546

(1)

Represents non-recurring out of pocket expenses incurred in moving our heat recovery-focused facility.

Some of the limitations of EBITDA and Adjusted EBITDA include (i) these non-GAAP measures do not properly reflect capital commitments to be paid in the future, and (ii) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and EBITDA and Adjusted EBITDA do not reflect these capital expenditures. Our non-GAAP measures may not be comparable to similarly titled measures of other companies because they may not calculate them in the same manner as we calculate, the measure, limiting its usefulness as a comparative measure. In evaluating EBITDA and Adjusted EBITDA, you should be aware that in the future we will incur expenses similar to the adjustments in this presentation. Our presentation of EBITDA and Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these expenses or any unusual or non-recurring items. EBITDA and Adjusted EBITDA should not be considered as an alternative to loss before benefit from income taxes, net loss, earnings per share, or any other performance measures derived in accordance with U.S. GAAP. When evaluating our performance, you should consider adjusted our non-GAAP measures alongside other financial performance measures, including our net loss and other GAAP results.

Liquidity and Capital Resources

Overview

Since the acquisition of the turbine product and manufacturing operations from Ingersoll Rand in December of 2010 and the subsequent inception of the leasing operations in 2012, our business has been funded by a combination of cash from the FPS Noteholders via the Notes (whereby FPS contributed the cash received from the Notes to FEI and FLPS as capital), the Credit Facility, the PPP loans and, effective August 16, 2021, proceeds from the SAFE Transaction (which were also contributed by FPS to FEI and FLPS as capital). The primary uses of this capital have been to invest in the growth of our turbine leasing fleet, support manufacturing operations and engineering efforts including turbine and heat exchanger product development.

As further described below, since the equity contribution of FLPS and FEI to the newly formed parent FPS on January 1, 2016, the Notes were funded over the years 2016, 2017 and 2018 to support the expansion of the leasing business into new geographies and manufacturing operations. As of June 30, 2021, the

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amount outstanding under the Notes payable by FPS totaled approximately $25.51 million, including $19.79 million of principal and $5.72 million of accrued interest. In 2019, with what we believed to be an appropriate level of scale of our turbine lease fleet, we closed on the Credit Facility to support the continued growth of the fleet. As of June 30, 2021, total borrowings under the Credit Facility totaled approximately $22.96 million. See “Risk Factors – Risk Factors Relating to our Business and Industry – Our substantial indebtedness could limit our opportunities for growth.”

A key underpinning of our business plan has been to scale the fleet of our long-lived turbine assets to the level where the associated revenue streams of leasing and service fully cover our operating activities. Furthermore, depending on market conditions we can flexibly scale up or down our manufacturing operations, including newbuild leasing turbines, and not have any direct impact to our ability to generate revenue off our existing installed base. We successfully executed this strategy during the year ended December 31, 2020, realizing an increase year-over-year in revenue attributed to our installed base – namely the combination of revenue from turbine leasing fleet and turbine service on sold product – while significantly reducing operating costs, primarily in our production operations, and significantly reducing outgoing cash flow expenditures on new turbine inventory amid the challenging macroeconomic environment. We have maintained this modest level of turbine production in 2021, and for the remainder of fiscal year 2021, our production plans are set at a fixed level of fulfilling executed orders for third party customers in our target C&I markets of New York City, Southern California and South Korea. Absent a surge in top-line leasing demand or new sources of funding, we currently anticipate returning to a moderately increased level of newbuild turbine production for the full fiscal year 2022 representing a combination of (i) additional third party orders from C&I customers and (ii) additional turbines into our own lease fleet, which we expect to execute with our current sources of liquidity.

As described in “Use of Proceeds”, we intend to invest newly raised equity capital into the further growth of our turbine leasing fleet, development new turbine products that enlarges our applicable market reach and expand our heat exchanger offering.

As of June 30, 2021, total available liquidity was $4.06 million, including $0.67 million of balance sheet cash and $3.39 million of available commitments under the Credit Facility and the Notes.

Cash Flows

The following table sets forth a summary of our cash flows for the years ended December 31, 2020 and 2019 and the six months ended June 30, 2021 and 2020:

​	Year Ended December 31,						Six Months Ended June 30,
(in thousands)	2020			2019			2021			2020
Net cash provided by (used in) operating activities	​	$	(6,275)	​	$	(14,848)	​	$	2,318	​	$	(5,547)
Net cash (used in) investing activities	​	​	(1,077)	​	​	(3,231)	​	​	(501)	​	​	(411)
Net cash provided by (used in) financing activities	​	​	6,889	​	​	18,823	​	​	(2,805)	​	​	7,390
Foreign currency translation adjustments	​	​	165	​	​	81	​	​	(47)	​	​	2
Net increase (decrease) in cash	​	$	(298)	​	$	825	​	$	(1,035)	​	$	1,434

Operating Activities

For the year ended December 31, 2020, $6.28 million of cash was used in operating activities, compared to $14.85 million for the year ended December 31, 2019, a net cash flow increase of $8.57 million. The increase in operating cash flow was primarily attributable to the 35% decrease in net loss to $(7.10) million for the year ended December 31, 2020 compared to $(10.91) million for the year ended December 31, 2019, along with a reduction in inventory spending for newbuild leasing fleet turbines during the year ended December 31, 2020 based on uncertain demand for additional turbine fleet capacity as well as the de-expedition of our production operations.

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For the six months ended June 30, 2021, net cash provided by (used in) operating activities was $2.32 million, compared to $(5.55) million for the six months ended June 30, 2020, a net cash flow increase of $7.87 million. The increase in operating cash flow was primarily attributable to favorable changes in deferred revenue and inventories in addition to a significantly lower volume of inventory purchases as a result of our plant relocation project during the first half of 2021.

Investing Activities

For the year ended December 31, 2020, $1.08 million of cash was used in investing activities, compared to $3.23 million for the year ended December 31, 2019, a net cash flow increase of $2.15 million. The increase in investing cash flow was primarily attributable to a reduction in discretionary purchases of new property and equipment.

For the six months ended June 30, 2021, $0.50 million of cash was used in investing activities, compared to $0.41 million for the six months ended June 30, 2020, a net cash flow decrease of $0.09 million. The decrease in investing cash flow was primarily attributable to a slight increase in discretionary purchases of new property and equipment.

Financing Activities

For the year ended December 31, 2020, cash provided by financing activities was $6.89 million, compared to $18.82 million for the year ended December 31, 2019, a net cash flow decrease of $11.93 million. The decrease in financing cash flow was primarily attributable to a significant reduction in credit line advances in fiscal year 2020 in response to the greater economic uncertainty brought on by the COVID-19 pandemic.

For the six months ended June 30, 2021, cash provided by (used in) financing activities was $(2.81) million, compared to $7.40 million for the six months ended June 30, 2020, a net cash flow decrease of $10.20 million. The decrease in financing cash flow was primarily attributable to $2.35 million in proceeds from the PPP loans received in the first half of 2020 and to paydowns made in the first half of 2021 on our Credit Facility.

Foreign Currency Translation Adjustments

For the year ended December 31, 2020, the effects of foreign currency translation adjustments to cash totaled $0.17 million, compared to $0.08 million for the year ended December 31, 2019, a net cash flow increase of $0.09 million.

For the six months ended June 30, 2021, the effects of foreign currency translation adjustments to cash totaled $(0.05) million, compared to $0.00 million for the six months ended June 30, 2020, a net cash flow decrease of $0.05 million.

Senior Secured Credit Facility

On February 8, 2019, FLPS entered into the Credit Facility with TCB, which was subsequently amended and restated on December 22, 2020 to add FLPS Canada as a borrower. The initial commitment amount is for $30.00 million and availability under the Credit Facility is based on a borrowing base calculation of eligible assets and other conditions. The Credit Facility is backed by a first priority lien of substantially all of the assets of FLPS, and the maturity date of the Credit Facility is February 8, 2024. Interest is defined based on a tiered leverage ratio and an applicable margin of (i) 1.50% to 2.00% above the base rate for base rate loans, or (ii) 2.50% to 3.00% above the adjusted Eurodollar rate for Eurodollar rate loans.

The Borrowers are subject to financial covenants of a maximum leverage ratio and minimum fixed charge coverage ratio to be tested quarterly. The Borrowers are in compliance with the Credit Facility’s financial covenants as of June 30, 2021.

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The Borrowers are also subject to certain negative covenants, including restrictions on their ability to incur additional indebtedness, create liens, pay dividends, make certain investments or material changes in their business, engage in transactions with affiliates, conduct asset sales or otherwise dispose of the Borrowers’ assets. In anticipation of the Contribution Transaction and this offering, we are in the process of negotiating a modification to the Credit Facility. As part of this modification, we expect that FGS will become an additional guarantor with respect to the Credit Facility subject to the same obligations and restrictions applicable to FPS thereunder, but that FGS will not otherwise be subject to the covenants and restrictions applicable to the Borrowers.

Between January 2020 and June 2021, FLPS entered into a series of amendments to the Credit Facility whereby (i) the borrowing base was amended to include certain non-turbine field equipment, (ii) certain terms within the borrowing base definition of accounts receivables relating to investment grade and non-investment grade customers were modified, (iii) FLPS ULC was added as an additional borrower under the Credit Facility, (iv) annualized EBITDA used to calculate the quarterly financial covenants was increased, (v) the availability under the revolving credit facility was reduced by $3.50 million, and (vi) the due date of the FLPS financial statements to be delivered to TCB was modified.

As of June 30, 2021, borrowings outstanding under the Credit Facility totaled approximately $22.96  million and availability based on the borrowing base totaled approximately $2.94 million. This amount includes $10.00 million of permitted distributions funded in 2019 that was used to redeem a portion of the outstanding Notes. Additional uses of capital for borrowings under the Credit Facility have been for working capital purposes, including the investment into the production of new-build turbine leasing units.

Paycheck Protection Program Loans

On April 14, 2020, FLPS entered into a Promissory Note with TCB pursuant to which TCB made a loan to FLPS under the PPP offered by the SBA in a principal amount of approximately $0.99 million pursuant to the CARES Act. On May 7, 2021, this loan was forgiven by the SBA. On May 6, 2020, FEES entered into a Promissory Note with BofA as the lender pursuant to which BofA made a loan to FEES under the PPP offered by the SBA in a principal amount of approximately $1.36 million pursuant to the CARES Act. On June 17, 2021, this loan was forgiven by the SBA.

The proceeds from the PPP loans were to be used to pay for payroll costs, including salaries, commissions, and similar compensation, group health care benefits and paid leaves, rent, utilities and interest on certain other outstanding debt.

Notes at FlexEnergy Power Solutions, LLC

Between December 2015 and July 2021, FPS issued the Notes to the FPS Noteholders who together, along with their affiliates, account for a majority of FPS’ voting securities and representation of its board of directors. The cash received from the Notes was contributed as capital to FEI and FLPS. The Notes have a maturity date of October 31, 2022.

Under the terms of the Credit Facility, FPS funded permitted payments in fiscal year 2019 of $10.00 million with all proceeds used to redeem a portion of the Notes totaling approximately $7.76 million of principal and $2.24 million of accrued interest. A portion of this $10.00 million was re-contributed when FPS issued an additional $7.80 million and $0.80 million in Notes in years 2019 and 2020, respectively for working capital purposes. FPS issued an additional $1.50 million in Notes during the six months ended 2021 for working capital purposes.

SAFE Transaction

On August 16, 2021, FPS entered into the SAFE Transaction with RNS and TRF whereby each of RNS and TRF paid $1.00 million to FPS (with the option for FPS to call an additional $0.50 million from each) in exchange for the right to receive from FPS (i) if the underwriters’ over-allotment exercise is exercised, the Cash Payment, or (ii) if there is no over-allotment exercise or if the net proceeds received by FPS as a

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result of an over-allotment exercise are insufficient to pay the full Cash Payment to RNS and TRF, a number of the shares of FGS common stock issued to FPS in the Contribution Transaction equal to the amount invested minus 80% of the Cash Payment, divided by 80% of the issuance price per share in this offering. The proceeds of the SAFE Transaction were contributed by FPS to FEI and FLPS as capital.

Series B and B-1 Preferred Equity at FlexEnergy Power Solutions, LLC

Under the terms of FPS’ Series B Preferred Unit issuance, FPS has agreed to certain covenants that restrict FPS’ and our ability to materially change our business and enter into certain enumerated financial transactions. Under the terms governing the Series B Units, FPS shall not permit to exist any indebtedness for borrowed money that is senior in right of payment to the Series B Preferred Units other than senior indebtedness (as defined therein) in an amount not to exceed $50.00 million. As defined therein, senior indebtedness does not include any amounts outstanding under our PPP loans, but does include the aggregate amount outstanding under the Notes. As of June 30, 2021, the amount of senior indebtedness as defined therein totaled $48.50 million, thus limiting the amount of availability to $1.50 million of additional senior indebtedness. The boards of FPS and FGS view this covenant as limiting our ability to raise additional indebtedness that is senior in priority to the Series B Preferred Units.

Critical Accounting Estimates

While our significant accounting policies are described in more detail in the notes to our combined consolidated financial statements appearing elsewhere in this prospectus, we believe the following accounting policies used in the preparation of our combined consolidated financial statements require the most significant judgments and estimates.

Revenue Recognition

Our revenue consists of lease revenue and the sales of products, parts, accessories and service. Lease revenue consists mainly of lease agreements which provide for monthly lease payments. These lease agreements are classified as operating-type leases and the revenue generated from the monthly lease payments is recognized over the rental term.

All our revenue relates to contracts with customers. Our accounting contracts are from purchase orders or purchase orders combined with purchase agreements. Our revenue is recognized on a point-in-time basis and over time. For the sale of new turbines and heat exchanger products, we satisfy our performance obligations based on the contractual terms with our customers. For our leasing, commissioning and maintenance services, we have performance obligations that are satisfied over time. See Note 4 to our Notes to Combined Consolidated Financial Statements included elsewhere in this prospectus for additional information related to revenue policies.

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BUSINESS

Our Company

We are an energy focused technology company that designs, manufactures, sells and leases cost-effective energy solutions that lower our customers’ environmental footprint, often by making useable energy from sources of fuel or heat otherwise overlooked or wasted. We do this through two different types of highly engineered products. First, our Flex Turbines offer a reliable source for distributed or grid connected electrical power, capable of being fired by a wide variety of gaseous fuels from waste gas from landfills and natural gas flaring to higher BTU fuels such as propane and synthetic gas. Leasing and sales of Flex Turbines presently represent the majority of our operations and revenues. Flex Turbines provide our customers with solutions to gain independence over their electricity generation and minimize overall reliance on the grid. Second, we offer heat recovery products that are integral to promising emerging power technologies, such as high efficiency fuel cells for power generation that can be fueled by hydrogen or natural gas. Our Flex Heat Recovery products are in the early stages of commercialization, and presently constitute a small but increasingly growing and important portion of our operations and revenues as the future of energy generation emerges.

Our focus is on providing proven technology and support that enables reliable, efficient and economic green energy solutions. Our business consists of leasing and service of our Flex Turbines supported by a vertically integrated OEM with some direct-sales of manufactured products. As of June 30, 2021, we have amassed over 8.4 million hours of field runtime on our turbine fleet with over 120 MW shipped, of which 49 MW make up our lease fleet. This balance of core competencies in turbine power and heat recovery with current cash flow generation helps fund growth of our technology suite and expansion of applications into new and existing markets. The primary applications of our technology include: converting waste gas to useful energy, improving traditional processes and enabling emerging clean technology. We are actively expanding into other key markets for which our products are well suited, and we are confident in generating opportunities in additional geographic markets and product extensions into different applications.

We serve a diverse range of customers in the global O&G, transportation, power, and C&I end markets. Our primary focus is on base load, distributed, electric generation using Flex Turbines, with the technology base to expand in additional untapped end-markets.

On December 31, 2010, as part of a spin-out transaction, we purchased from Dresser-Rand (now Ingersoll Rand) certain assets in order to finish the development of a 4th generation 333 kW turbine and to commercialize the turbine offering. From 1996 through 2010, Ingersoll Rand invested over $250 million to develop a downsized replica of its 2 MW KG2 turbine (first launched as a 250 kW model) as a way to penetrate the small-scale industrial remote power market.

In 2013, we initiated a business transformation in response to the O&G industry’s downturn by creating FLPS, and transitioned from an original equipment manufacturer (“OEM”) sales model to an EaaS model. O&G production requires substantial amounts of electrical power to run subsurface pumps and other equipment. Much of the recent development of O&G in the U.S. is remote and not served by the country’s electrical grid. Flex Turbines are a well-suited source of the needed power for O&G production because they operate more than 99% of the time in extreme conditions, require little maintenance and can run on untreated field gas, which is otherwise typically flared as waste. While customers valued the enhanced uptime and environmental benefits of using waste gas instead of flaring it, the consequences of the O&G industry downturn made companies more hesitant to use scarce capital resources to purchase electrical generating equipment like Flex Turbines. Instead, energy companies were resorting to renting diesel generators for power production despite the resulting added pollution and lower operating time.

This led us to determine that our customers would more easily enjoy the benefits of our product offering if they could access clean electricity-on-demand as a service. With FLPS’ leasing options, customers can lease capacity or purchase the amount of power they actually used, with no up-front capital expenditure. Through this EaaS program, we deploy Flex Turbines for electricity-on-demand, which in the case of our O&G customers is powered exclusively by the available on-site field gas, which would otherwise be flared. The

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cost of our lease service option remains less than most customers typically pay for diesel fuel alone (not to mention the cost of renting the generators).

For the six months ended June 30, 2021, our two largest customers generated 18% and 17%, respectively of total revenue. In 2020, our three largest customers generated 23%, 14% and 10%, respectively, of our total revenue, and in 2019, our largest customer generated approximately 28% of our total revenue. Two customers accounted for 33% and 15%, respectively, of our accounts receivable balance as June 30, 2021. Two customers accounted for 15% and 14%, respectively, of our accounts receivable balance as of December 31, 2020. One customer accounted for 32% of our accounts receivable balance as of December 31, 2019. Accordingly, we are subject to customer concentration risk in the form of non-renewal or termination of lease contracts. For additional information, see “Risk Factors – Risk Factors Relating to our Business and Industry – If we fail to retain existing customers, derive revenue from existing customers consistent with historical performance or acquire new customers cost-effectively, our business could be adversely affected. We are subject to substantial customer concentration.”

Since the inception of FLPS, leasing has provided customers with higher uptimes in production and eliminated more than 1,000,000 tons of CO2. This turnkey, clean power solution makes it easier for customers to adopt our clean energy solution. We are adaptive to individual site issues and differences, supplying modular accessories such as fuel skids, switchgears, filters and other non-turbine apparatuses to projects based on their needs. The EaaS solution allows for broader exposure to markets that need to lower electricity costs, increase efficiency, decrease pollution and access on-demand, 24/7 base load power generation.

Each of our gas turbines consists primarily of a turbine engine, gear box, combustor and recuperator (collectively, a “Flex Turbine”). We refer to all of our deployable Flex Turbines together as our “turbine fleet.” Our 162 unit, 49 MW turbine fleet accelerates an independence from the energy grid in 10 MW and under applications including the following selling points:

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Flexible:   Wide fuel tolerance using natural gases, oilfield flare gases, biogas, etc.

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Rugged and Resilient:   Generally runs 24/7 in harsh environments and weather

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Sustainable:   California Air Resources Board certified clean emission standards

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Scalable:   Modularity and mobility to match changing power needs

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Adaptable:   Standalone microgrids and integration with storage and renewables

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Reliable:   Proven performance of high up-time, low maintenance long-lived assets (high uptime, 99%+)

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Cogeneration:   CHP increases efficiency and savings, meeting California’s strict Air Quality Management District standards

Competitive Environmental Advantages vs. Industry Standard/Alternatives.   Flex Turbine power generation provides scalable, modular, on-site power to both off-grid environments and grid dependent environments. Diesel generators remain the industry standard in most remote, off-grid applications that are often home to extreme conditions (weather, temperature, etc.). Diesel, however, is more carbon intensive relative to natural gas, emitting on average 161 pounds of CO2 per million BTU (“mmbtu”) in comparison to 117 pounds of CO2 per mmbtu, respectively. Not only can natural gas turbines reduce emissions because of its fuel flexibility, many times the Flex Turbine eliminates 100% of the diesel pollution by converting the gas that would otherwise have been flared into power that would have otherwise been produced by a diesel generator.

Customer Service and Customization.   As an organization we are highly customer-centric. We have a service organization in place that responds 24/7 to support our customers. Our engineers act as consultants to our customers to meet their needs. We size our solution to each job by linking our Flex Turbines together in custom site configurations for each customer application. Our sense of urgency, especially in the leasing business, enables us to maintain very high uptimes. Our Flex Heat Recovery solutions do not try to force a

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customer’s application to conform to our design. Rather, our design is easily fitted to a customer’s specific application. We are a well-equipped manufacturing organization. Because we do not out-source manufacturing, we can make modifications to meet customer needs and produce service parts more quickly.

Flex Heat Recovery Solutions.   The technologies developed in our Flex Heat Recovery business supply critical components to the Flex Turbine. Namely, the Flex Recuperator is a proprietary high temperature and high-pressure heat exchanger that recovers waste heat in industrial processes into the energy cycle, thus significantly improving operating efficiency and reducing carbon emissions. Because our heat recovery technology was so effective in the Flex Turbine, we began investigating other markets in which the technology could be used to harvest wasted heat energy in high pressure and high temperature applications. Flex Heat Recovery products have been used in a broad array of applications, from the extension of the range of turbine powered destroyers in the British Navy, and in large scale fuel cell applications for power generation, to being prototyped into key components in the oncoming hydrogen economy, such as solid oxide fuel cells. Flex Heat Recovery products that we have developed include:

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Plate-Fin: Modular, counter flow (high efficiency), low pressure drop, high flow, high temperature designs;

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Fin-Tube: High efficiency counter flow, compact (1/4 size of a typical Shell & Tube), high pressure, 100% welded construction, high temperature, low pressure drop designs; and

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Chevron: Highly configurable and scalable, low pressure drop, high temperature, primary surface design is material efficient (no expensive fin) designs.

Competitive Advantage of Flex Heat Recovery Solutions Technology

Power Generation – Improve efficiency and reduce CO2 emissions

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Various gas turbines – Up to 28-50% increase in fuel efficiency and lower emissions

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Nuclear power – Air to air heat exchangers to enhance reactor safety

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Biogas to energy projects – Enables thermal storage and power generation from low grade biogases

Fuel Cells – Improve efficiency and reduce CO2 emissions

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Molten carbonate fuel cells – Up to 30% increase in fuel efficiency and reduced emissions

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Solid oxide fuel cells – Up to 30% increase in fuel efficiency and reduced emissions

Energy Efficiency Projects

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Air preheating from waste heat energy for industrial processes – Reduces fuel and energy costs by recycling waste heat

Emissions Reduction Projects

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Exhaust heat reduction for treatment – Reduces cost of emissions control

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Carbon capture – Enables emissions reduction technologies that generate a return on investment

Automotive

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Combustion-based range extender for electric vehicles – Up to 28-50% increase in fuel efficiency and lower emissions

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Split cycle reciprocating engines – Up to 20% increase in fuel efficiency of diesel engines and corresponding emissions reduction

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Our Industry

Natural gas is a compelling fuel for power production, as global economies seek cleaner alternatives to coal-fired and oil-fired power plants to fill the gap in demand not currently met by renewable energy sources. In 2020, approximately 4.0 trillion kwh were generated from utility-scale facilities, of which 40% comprised natural gas, 19% coal, 20% nuclear, 20% renewables and 1% petroleum and others.

The production of CO2 has been shown to be a contributing factor to global climate change. However, while the current generation of our gas turbines running on natural gas does produce some CO2, the amount produced by Flex Turbines is only a fraction of that produced by other forms of U.S. combustion power generation. Regardless, we may occasionally be negatively impacted by CO2-related changes in applicable laws, regulations, ordinances, rules, or the requirements of the incentive programs on which we and our customers currently rely.

Today approximately 70% of the world’s electricity is consumed by 10 countries and 850 million people. Approximately 11% of the world’s population currently lack access to electricity, according to the International Energy Agency’s 2019 World Energy Outlook. According to the IEA, as economic development worldwide spurs demand for electricity, approximately 10.0 million MWh of incremental power is expected to be needed by 2040. Further, we believe that many countries around the world, keenly focused on economics as well as the environment, will increasingly look to natural gas to displace environmentally dirtier fuels such as heavy fuel oil (HFO), automotive diesel oil (ADO), and coal that are used to generate power, particularly if natural gas is cheaper than these fuels.

The same can be said for the U.S. as its consumers continue to rely heavily on the grid for access to electricity, with the assumption that a given demand region is within close proximity to utility facilities. Furthermore, the reliability of electric utilities according to EIA’s System Average Interruption Duration Index (SAIDI), or the total time an average customer experiences non-momentary interruptions lasting longer than five minutes, has ranged between 3 and 8 hours per customer since 2013. In 2018, U.S. electricity customers averaged power outages of 5.8 hours per customer.

We believe the power industry’s future will be shaped by the mega-trends that favor the development of highly reliable, low pollution, distributed power systems and alternative energy sources that should drive demand for highly efficient Flex Turbines, Flex Heat Recovery solutions and other components of our technology suite. We believe our product offerings will be further instrumental in mega-trends such as:

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Continued growth in electricity demand, including for transportation

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Decarbonization efforts to mitigate climate change peril, including carbon taxes

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Natural gas as replacement for coal and oil-fired equipment and processes

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Secular shift to distributed generation to assure power quality and avoid the cost of expanding aging and inefficient transmission infrastructure

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Emergence of zero or low pollution alternative sources of power in the hydrogen economy, including fuel cells, solar and wind power

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A drive for energy efficiency causing every industry to look for ways to eliminate wasted energy consumption

Primary Applications

Converting Waste Gas to Useful Energy

The Flex Turbine can produce reliable, distributed electricity by running on waste fuels such as methane from landfills and CO2 heavy field gas from oil producing wells down to 350 BTUs, as well as synthetic gasses such as ethane produced in the refining process with up to 2,500 BTUs.

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Improving Traditional Processes

Flex Heat Recovery solutions are most effective in high temperature, high pressure environments. These systems have a smaller footprint due to their design efficiency, making them ideal for retrofitting existing facilities. They are currently being evaluated by potential customers for the next generation of carbon capture technology, multiple fuel cell applications, and emissions reduction projects.

Enabling Clean Technology

We see efficient use of thermal energy as the key to energy efficiency in many of today’s most promising alternative fuel technologies, such as solid oxide fuel cells for power generation, traditional fuel cell technology for power, green hydrogen production, and certain heat as energy storage applications, like molten salt. We have sold Flex Heat Recovery production or prototype systems for each of these energy alternatives. In addition, components of the Flex Turbine have been integrated with renewable energy projects that provide heat from external sources to power the turbine and produce energy.

Our Market Opportunity

We believe that the world is looking for cleaner, reliable electrical power alternatives both to replace existing sources and to provide electrical power where electricity is not available or reliable. Additionally, we believe the adoption of new emerging technologies and fuels will expand our opportunities to grow.

In 2020, approximately 4.0 trillion kwh were generated from utility-scale facilities, of which 40% comprised natural gas, 19% coal, 20% nuclear, 20% renewables and 1% petroleum and others. Natural gas is one of the most abundant and available sources of clean energy as market trends such as the electrification of vehicles and the phasing out of coal-fired plants becomes more commonplace.

Power generation from fossil fuels and the associated release of CO2 as a byproduct has been shown to be a contributing factor to global climate change. The world continues to rely on technology advances combined with best practices to reduce greenhouse gas emissions.

The following trends have increased onsite, lesser emissions power demand from customers in a growing number of markets, and we expect them to continue to do so:

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Continued growth in electricity demand, including for transportation

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Decarbonization efforts to mitigate climate change peril, including carbon taxes

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Natural gas as replacement for coal and oil-fired equipment and processes

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Secular shift to distributed generation to assure power quality and avoid the cost of expanding aging and inefficient transmission infrastructure

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Emergence of zero or low pollution alternative sources of power in the hydrogen economy, including fuel cells, solar and wind power

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A drive for energy efficiency causing many industries to look for ways to eliminate wasted energy consumption

We believe that these trends will expand the market opportunity for Flex Turbine solutions and Flex Heat Recovery systems.

Our Growth Strategy

Our chief objective is to be a primary provider of clean, affordable and reliable energy. In order to accomplish this, we intend to:

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Accelerate growth in underpenetrated markets and expand our geographic footprint.   We believe the total market opportunity for modular, onsite power remains significantly under-penetrated in

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the U.S. The flexibility and reach of our leasing model, coupled with our scalable turbine packages, allow us to increase market penetration and enter new markets quickly and efficiently. We plan to strengthen our existing relationships and identify new sub-sectors to accelerate our growth. We will seek to enter new markets and geographies over time, both in the U.S. and internationally, where climate, demand for clean energy and regulatory policies position turbine power generation as an economically compelling alternative to centralized electric utilities.

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Continued deployment of our turbine fleet and heat recovery solutions to our customers.    We believe that integrated energy systems enhance the reliability, resiliency and predictability of turbine-generated electricity in certain markets, increasing the overall value proposition to customers. We expect demand for the Flex Turbine with on-board hot water heat exchanger, our combined heat and power (“CHP”) solution, to increase over time. We also expect continued requests by our customers to integrate our energy systems with existing energy storage (e.g. photovoltaic battery cells) to provide additional resiliency.

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Broaden and enhance service offerings.   We provide ongoing monitoring and service as a standard component of our leasing agreements. We believe there is significant market demand for long-term protection plans for customers who have chosen to finance or purchase systems rather than lease them, and we will strive to capture a significant share of this market. We plan to expand our green energy product and service offerings to provide further cost savings to our customers and optimize the performance of existing traditional processes.

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Increase Inventory to Shorten Delivery Times.   Flex Turbines currently are built upon order with a six or more month lead time from order to completion. By investing in additional inventory levels and building certain sub-assemblies in advance, we believe we can substantially shorten the time to delivery and thereby improve our appeal to customers searching for prompt energy solutions.

Competition

Our Flex Turbines broadly compete with existing technologies, including diesel generators, used in the generation of distributed power. Some of our competitors who produce distributed generation technology and products are large, well-capitalized companies with a global presence, significant brand recognition, economies of scale, and substantial product development, distribution, and marketing resources.

In remote locations, our Flex Turbines compete primarily with traditional internal combustion engine generators, such as those manufactured by Caterpillar, GE-Jenbacher, and Cummins, and provided by these companies as well as others such as Gravity, Moser, United Rentals, Aggreko and Baseline. These engine generators are a well-established technology and are often used as a lower-cost remote power or co-generation solution. These engines, however, have disadvantages that may outweigh the benefits, including relatively high emissions, high maintenance costs, higher levels of low frequency noise emissions, and require significant downtime for routine maintenance. In contrast, the Flex Turbine operating on natural gas, either pipeline or well gas, produces low levels of emissions, requires very limited routine maintenance, is sound-attenuated to 62 dba and has demonstrated a 99% uptime.

Where available, the cost of purchasing electricity from the electric utility grid is usually lower than acquiring the same amount of energy through a distributed generation technology. Utilities may charge customers using a distributed generation technology additional fees to connect to their grids, which distributed generation customers typically do when grid access is available. That said, where grid electricity is very expensive or where the utility grid is occasionally unreliable (particularly in remote or extreme environments), a distributed generation solution may be a viable and economic solution for many customers. In addition to the engine generator providers above, other turbine providers such as Capstone, OPRA and Siemens also provide solutions. Reasons why our Flex Turbine may be chosen include low emissions, a wide range of fuel acceptance, high reliability, low maintenance, and owned service response infrastructure. Additionally, we can provide additional economic value to our customers who repurpose or reuse wasted gas or heat for heating, cooling, dehumidification, and other uses with a heat recovery solution added to the Flex Turbine.

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In the future, our Flex Turbines will likely compete with other distributed generation technologies, including solar-powered and wind powered microgrids, as well as emerging technologies like fuel cells. Solar and wind generation face the challenge of unreliable weather conditions and may require the use of storage technologies in order to mitigate the intermittent power generation. However, storage technology may not be sufficient to completely supplement the inconsistent power generated. Fuels cells and other emerging energy alternatives face the challenges of cost, performance and durability. Our Flex Turbine produces constant low emission electricity that is available 24/7 and has demonstrated 99% uptime performance.

We believe Flex Turbine competitive advantages include:

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Clean – low emissions, CARB approved

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Reliable – low maintenance (one 8-hour scheduled maintenance per year)

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Wide Fuel Tolerance – pipeline to well gas, propane, high H2S gas

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High Uptime – 99% uptime proven over 8 million operating hours

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Scalable – can operate individually or in parallel

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Valuable – high uptime maximizes customer revenue

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Zero Capex Leasing Solution – leasing model allows customers to limit capital expenditures

Flex Heat Recovery products compete against the products of other companies providing heat exchangers to the high temperature, high pressure heat transfer industry, including Alfa Laval, Mezzo Technologies, Munters and Sumitomo. Traditional heat exchanger companies fall into two broad categories: those that supply standard products and designs whereby customers fit a standard exchanger to their application and those that engineer specific one-off exchangers for specific customer applications. The standard product approach provides low costs with design inefficiencies such as size, shape and the custom approach provides optimal design at high cost. We have developed proprietary Flex Heat Recovery products that address both cost and configuration. Our solution provides a proprietary standard and scalable approach that also provides a customized solution for each customer’s application. This approach is especially important for developing technologies in the emerging hydrogen economy. These technologies include solid oxide fuel cells (SOFC) and molten carbonate fuel cells (MCFC). Existing and alternative energy technologies also benefit from custom heat exchanger solutions to drive peak efficiency. These applications include: internal combustion engines, large and small gas turbine recuperation, combine heat and power projects, and emissions reduction equipment. In each application, customers typically value compactness, thermal efficiency, and custom designs over price and lead-time.

Flex Heat Recovery solutions competitive advantages include:

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Very high temperature, high pressure capability

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Low pressure drop

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Highly efficient design

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Customizable to meet customer needs

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Scalable

Employees

As of July 31, 2021, we had 99 full-time employees. Of those, 8 employees are engaged in commercial functions (including sales and marketing), 60 employees are engaged in customer service, and 14 employees are engaged in engineering functions (including field support, production support and research and development). None of our employees are represented by labor unions or covered by collective bargaining agreements. We consider our relationship with our employees to be good.

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Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and additional employees. The principal purposes of our equity incentive plans are to attract, retain and motivate selected employees, consultants and directors through the granting of equity-based compensation awards. For more information regarding our equity incentive plans, see “Executive Compensation – Equity Compensation.”

Intellectual Property

We believe that neither we nor our competitors can achieve a significant proprietary position on the basic technologies currently used in turbine systems. As such, we generally rely on trade secret protection with respect to our processes or software, such as our manufacturing processes, specific software applications related to our O&G customers, and with respect to core technology in our heat exchanger business. We also believe, however, that our technology, components and manufacturing processes are difficult to reverse engineer. We have nine issued U.S. patents (expiring generally between 2021 and 2037), 15 patents issued in other countries (expiring generally between 2024 and 2037), and one patent application pending internationally. As discussed above, Ingersoll Rand invested over $250 million from 1996 through 2010 on certain technology development and this investment has contributed to developing our intellectual property portfolio and trade secrets, in particular regarding our software applications related to our O&G customers, among other things. Our issued patents and pending patent applications generally relate to combustor, recuperator, core engine, heat exchanger, and gearbox technologies.

In general, our employees are party to agreements providing that all inventions, whether patented or not, made or conceived while being our employee, which are related to or result from work or research that we perform, will remain our sole and exclusive property. In addition, we also rely on contractual protections with our customers, suppliers, and distributors, in addition to our security measures, to protect our trade secrets and know-how.

We made the strategic decision to focus our patent portfolio on those patents that we believe will be beneficial to our business and, as a result, have ceased using certain patents that we believe will have no or limited use. Please see section captioned “Risk Factors – Risk Factors Relating to our Business and Industry – Our failure to adequately protect our intellectual property rights could impair our ability to compete effectively or defend ourselves from litigation, which could harm our business, financial condition, and results of operations” for further discussion regarding our intellectual property.

Engineering

Because the clean energy technology industry is characterized by its early state of adoption, our ability to compete successfully is heavily dependent upon our ability to ensure a continual and timely flow of competitive products, services, and technologies to the marketplace. We continue to engineer and develop new products and technologies and to enhance existing products in the areas of cost, size, weight, and in supporting service solutions in order to drive commercialization.

Facilities

We recently completed the relocation of our manufacturing and office space from a single facility in Portsmouth, New Hampshire where approximately 42 of our employees were located. We relocated our office space to our new corporate headquarters at 112 Corporate Drive, Portsmouth, New Hampshire, and our manufacturing capabilities have been relocated to our facility located in Dover, New Hampshire.

We also lease office space and service facilities in various locations described below. These facilities together comprise approximately 96,010 square feet of space. On December 23, 2020, we signed a new lease for 5,800 square feet of space for our new Portsmouth, New Hampshire corporate headquarters. The lease term begins in February 2021 and expires in June 2024. Our current lease for our Dover facility was entered into in January 2019 and expires in June 2027. In addition to our corporate headquarters, we lease office space located in Greenwood Village, Colorado. Our current lease for our Greenwood Village facility was entered into in May 2018 and expires in September 2023. We also have service facilities located in

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(i) Odessa, Texas; (ii) Alexander, North Dakota; and (iii) Grand Prairie, Alberta, Canada. Our current lease for our Odessa facility was entered into in August 2019 and expires in August 2024. Our current lease for our Alexander facility was entered into in May 2016 and is currently on a month to month basis. Our current lease for our Grand Prairie facility was entered into in January 2016 and expires in December 2021. We believe our facilities are adequate to support our business for at least the next twelve months.

Legal Proceedings

From time to time, we are involved in legal proceedings or subject to claims arising in the ordinary course of our business. Although the results of legal proceedings and claims cannot be predicted with certainty, we are not currently party to any legal proceedings the outcome of which, in the opinion of our management, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, financial condition or cash flows. In a situation where the outcome of a legal proceeding would be adverse to our interests, we anticipate that most payments we may be required to make in connection therewith would be adequately covered by our existing insurance policies.

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MANAGEMENT

Executive Officers and Directors

The following table sets forth information about our executive officers and directors, as of October   , 2021:

Name	Age	Position(s)
Executive Officers	​	​
Mark Schnepel	46	Chief Executive Officer
Wes Kimmel	38	Chief Financial Officer
Doug Baltzer	52	Chief Commercial Officer
Non-Employee Directors	​	​
Thomas Denison	60	Director
Patrick Connelly	45	Director
George Walker	64	Director

Executive Officers

Mark Schnepel has been the President of FEES since 2013. Concurrently with the completion of the Contribution Transaction, Mr. Schnepel will assume the role of President and Chief Executive Officer of FGS. He brings more than 20 years of manufacturing and development experience in the turbo machinery industry. He first joined the Ingersoll Rand Energy Systems turbine business in 2000 and transitioned with us when we purchased that business in 2011. His responsibilities have included: product engineering, test engineering, lab operations, manufacturing operations, procurement, business development, and field service. Prior to Ingersoll-Rand and our company, Mr. Schnepel worked as a production engineer for the Tech-Ceram Corporation, a high-volume electronics package manufacturer. He is based in Portsmouth NH. Mr. Schnepel received a B.S. in Mechanical Engineering from Union College.

Doug Baltzer has been the President of FLPS since 2013. Concurrently with the completion of the Contribution Transaction, Mr. Baltzer will assume the role of President and Chief Commercial Officer of FGS. He is responsible for our growth initiatives, business development and overall commercial management. Mr. Baltzer has over 27 years of experience in senior management positions. His roles have ranged from Regional Manager, National Director and President at companies including Northland Power Service, Aggreko, FEI and FLPS. Over the past 15 years, he has been involved in five start-up companies and has helped raise more than $75 million in venture capital to support each company’s growth goals. Mr. Baltzer received a B.S. in Business and Finance from Tabor College and an Executive M.B.A. from the University of Denver.

Wes Kimmel has been the Chief Financial Officer and Secretary of FEES since 2013. Concurrently with the completion of the Contribution Transaction, Mr. Kimmel will assume the role of Chief Financial Officer, Treasurer and Secretary of FGS. Prior to joining us, he was Vice President of RNS Capital Partners, a private equity firm with a significant indirect equity stake in our company. While at RNS Capital Partners, Mr. Kimmel worked closely with our management on internal finance, fundraising, sales and marketing plans, and strategic initiatives. Prior to RNS Capital Partners, he was an associate at First Reserve Corporation, an energy-focused private equity firm, where he helped manage the firm’s investments in power generation and oilfield services. Prior to First Reserve Corporation, Mr. Kimmel worked in both the Mergers & Acquisitions group and Leveraged Finance group at Morgan Stanley. He graduated Phi Beta Kappa from Washington and Lee University with majors in Economics and American History.

Non-Employee Directors

George Walker is the Chairman of our board of directors and our lead independent director. From July 2014 until April 2020 he was the Chief Executive Officer of Cahill Services, LLC, a Houston-based

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provider of specialty rental services to customers in the O&G, refining, industrial, petrochemicals, utilities and related industries. Since March 2020, Mr. Walker has also served as the Chairman of the board of directors of Cahill Services, LLC. With more than 35 years of domestic and international expertise in the industrial service sector Mr. Walker is practiced in dealing with all aspects of commercial business development in both mature and developing markets. Mr. Walker retired from Aggreko LLC in July 2014 after 27 years, where he served as President of the North American region and Executive Director on the Main Board of Aggreko PLC. He had been a part of or led the acquisition of more than ten companies during his years at Aggreko. Mr. Walker received a Bachelor of Business Administration degree in Finance from the University of Texas.

Thomas Denison is a 30-year participant in the private equity energy business. He is currently and since 2010 has been the managing partner of RNS Capital Partners, a closely held, private equity firm with portfolio companies in technology, energy and service businesses. Prior to co-founding RNS Capital Partners, Mr. Denison served ten years as managing director and general counsel for First Reserve Corporation, an energy-focused private equity firm. Mr. Denison joined First Reserve Corporation after an 11-year career with Gibson, Dunn & Crutcher, LLP. He was a partner in the firm at the time of his departure. Mr. Denison holds a Bachelor of Science degree from the University of Denver in Business, and a Juris Doctorate from the University of Virginia School of Law.

Patrick Connelly is a Co-Managing Partner of Amberjack Capital Partners, a Houston based private equity firm that provides growth equity capital and strategic support to innovative companies serving the infrastructure, industrial and energy industries. Before joining Amberjack Capital Partners, Mr. Connelly invested in numerous oilfield service companies in the U.S. and Canada through his work as a Managing Director at SCF Partners, an energy focused private equity fund. Mr. Connelly’s career began as active duty infantry officer in the US Army, serving in leadership roles during multiple overseas assignments. Mr. Connelly received a Bachelor of Science degree from the U.S. Military Academy at West Point, a Master of Public Administration from Harvard’s Kennedy School of Government, and a Master of Business Administration from Harvard Business School.

Board Composition and Leadership Structure

Our board of directors is composed of three directors, all of whom are independent directors (other than for purposes of audit committee independence requirements). All of our independent directors are highly accomplished and experienced business leaders in their respective fields, who have demonstrated leadership in significant enterprises and are familiar with board processes. Each of our directors holds a one-year term of office until our next annual meeting of stockholders and serves until his or her successor is duly elected and qualified or until his or her earlier death, resignation, retirement, disqualification or removal.

George Walker serves as our lead independent director. As lead independent director, George Walker presides over executive sessions of our independent directors, and perform such additional duties as our board of directors may otherwise determine and delegate. As a result, we believe that the lead independent director can help ensure the effective independent functioning of our board of directors in its oversight responsibilities.

Board Oversight of Risk

Our board of directors has an active role, as a whole and also at the committee level, in overseeing the management of our risks. Our board of directors is responsible for general oversight of risks and regular review of information regarding our risks, including credit risks, liquidity risks and operational risks. The compensation committee is responsible for overseeing the management of risks relating to our executive compensation plans and arrangements. The audit committee is responsible for overseeing the management of risks relating to accounting matters and financial reporting. The nominating and corporate governance committee is responsible for overseeing the management of risks associated with the independence of our board of directors and potential conflicts of interest. Although each committee is responsible for evaluating certain risks and overseeing the management of such risks, our entire board of directors is regularly

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informed through discussions from committee members about such risks. Our board of directors believes its administration of its risk oversight function has not negatively affected the board of directors’ leadership structure.

Code of Ethics

We have adopted a Code of Ethics applicable to our directors, executive officers and employees that complies with the rules and regulations of Nasdaq. Upon the completion of this offering, a copy of the Code of Ethics will be available on our website at www.flexenergy.com and will be provided without charge upon request to us in writing at 112 Corporate Drive, Portsmouth, NH 03801. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K.

Board Committees

The standing committees of our board of directors currently include an audit committee, a compensation committee, and a nominating and corporate governance committee. Each of the committees report to the board of directors as they deem appropriate and as the board of directors may request. The composition, duties and responsibilities of these committees are set forth below.

Audit Committee

Our audit committee consists of Messrs. Walker, Denison and Connelly. The board of directors has determined that Mr. Walker is independent under Nasdaq listing standards and Rule 10A-3(b)(1) under the Exchange Act. The chairperson of our audit committee is George Walker. The board of directors has determined that Patrick Connelly is an “audit committee financial expert” within the meaning of SEC regulations. Our board of directors has also determined that each member of the audit committee has the requisite financial expertise required under the applicable requirements of Nasdaq. In arriving at this determination, the board of directors has examined each audit committee member’s scope of experience and the nature of their employment in the corporate finance sector.

In accordance with Rule 10A-3(b)(1)(iv) under the Exchange Act, within 90 days from the effectiveness of the registration statement of which this prospectus is a part, the audit committee will consist of a majority of independent directors (for purposes of Rule 10A-3(b)(1)), and within one year from the effectiveness of the registration statement of which this prospectus is a part, the audit committee will consist solely of independent directors.

The primary purpose of the audit committee is to discharge the responsibilities of the board of directors with respect to our accounting, financial, and other reporting and internal control practices and to oversee our independent registered accounting firm. Specific responsibilities of our audit committee include:

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selecting a qualified firm to serve as the independent registered public accounting firm to audit our financial statements;

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helping to ensure the independence and performance of the independent registered public accounting firm;

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discussing the scope and results of the audit with the independent registered public accounting firm, and reviewing, with management and the independent accountants, our interim and year-end operating results;

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developing procedures for employees to submit concerns anonymously about questionable accounting or audit matters;

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reviewing policies on risk assessment and risk management;

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reviewing related party transactions;

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obtaining and reviewing a report by the independent registered public accounting firm at least annually, that describes our internal quality-control procedures, any material issues with such procedures, and any steps taken to deal with such issues when required by applicable law; and

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approving (or, as permitted, pre-approving) all audit and all permissible non-audit service to be performed by the independent registered public accounting firm.

Compensation Committee

The compensation committee consists of Messrs. Walker, Denison and Connelly. Our Board has determined each member is a “non-employee director” as defined in Rule 16b-3 promulgated under the Exchange Act. The chairperson of the compensation committee is George Walker. The primary purpose of the compensation committee is to discharge the responsibilities of the board of directors to oversee our compensation policies, plans and programs and to review and determine the compensation to be paid to our executive officers, directors and other senior management, as appropriate. Specific responsibilities of the compensation committee will include:

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reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, if any is paid by us, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation;

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reviewing and approving on an annual basis the compensation, if any is paid by us, of all of our other officers;

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reviewing on an annual basis our executive compensation policies and plans;

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implementing and administering our incentive compensation equity-based remuneration plans;

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assisting management in complying with our proxy statement and annual report disclosure requirements;

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approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our officers and employees;

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if required, producing a report on executive compensation to be included in our annual proxy statement; and

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reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.

Nominating and Corporate Governance Committee

Our nominating and corporate governance committee consists of Messrs. Walker, Denison and Connelly. Our board of directors has determined each member is independent under Nasdaq listing standards. The chairperson of our nominating and corporate governance committee is George Walker. Specific responsibilities of the compensation committee will include:

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making recommendations to our board of directors regarding candidates for directorships;

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making recommendations to our board of directors regarding the size and composition of our board of directors;

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overseeing our corporate governance policies and reporting; and

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making recommendations to our board of directors concerning governance matters.

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EXECUTIVE COMPENSATION

Summary Compensation Table

The following table presents summary information regarding the total compensation awarded to, earned by, and paid to our principal executive officer and each of our named executive officers during fiscal years 2019 and 2020. These individuals are our named executive officers for 2019 and 2020:

Name and Principal Position	Fiscal Year		Salary(1) ($)		Bonus(2) ($)		Equity Awards ($)		Non-Equity Incentive Plan Compensation ($)		All Other Compensation ($)		Total ($)
Mark Schnepel Chief Executive Officer	​	2020	​	253,005	​	55,000	​	—	​	—	​	—	​	308,005
	​	2019	​	262,948	​	30,000	​	—	​	—	​	—	​	292,948
Wes Kimmel Chief Financial Officer	​	2020	​	236,512	​	65,000	​	—	​	—	​	—	​	301,512
	​	2019	​	245,077	​	60,000	​	—	​	—	​	—	​	305,077
Doug Baltzer Chief Commercial Officer	​	2020	​	246,672	​	70,000	​	—	​	—	​	—	​	316,672
	​	2019	​	232,848	​	105,899	​	—	​	—	​	—	​	338,747

(1)

The amounts report for fiscal year 2020 represent salary actually paid during 2020. In direct response to the uncertainties arising from the COVID-19 pandemic on the Company’s operations, the base salaries for Mark Schnepel and Wes Kimmel were subject to temporary salary reductions during 2020. The base salaries that otherwise would have been payable to Mark Schnepel and Wes Kimmel were $262,141 and $245,082 respectively.

(2)

The amounts reported for fiscal year 2020 represent the discretionary bonus amounts earned and awarded to our named executive officers in 2020. Mark Schnepel received payment of $28,417 in 2020, while $26,583 was deferred and will be paid during 2021. Wes Kimmel received payment of $33,583 in 2020, while $31,417 was deferred and will be paid in 2021.

Equity Compensation

FlexEnergy Green Solutions, Inc. 2021 Incentive Award Plan

Our 2021 Incentive Award Plan (the “2021 Plan”) was adopted by our board of directors in                   2021 and approved by our stockholders in                   2021. The 2021 Plan allows the compensation committee to make equity-based incentive awards to our officers, employees, directors, and other key persons, including consultants.

Authorized Shares.   We have initially reserved             shares of our common stock for the issuance of awards under the 2021 Plan. This number will be subject to adjustment in the event of a stock split, stock dividend, or other change in our capitalization. The shares we issue under the 2021 Plan will be authorized but unissued shares or shares that we reacquire. The shares of common stock underlying any awards that are forfeited, cancelled, held back upon exercise or settlement of an award to satisfy the exercise price or tax withholding, reacquired by us prior to vesting, satisfied without the issuance of stock, expire, or are otherwise terminated, other than by exercise, under the 2021 Plan will be added back to the shares of common stock available for issuance under the 2021 Plan.

Non-Employee Director Limit.   Our 2021 Plan contains a limitation whereby the value of all awards under our 2021 Plan and all other cash compensation paid by us to (i) any non-employee director in any fiscal year may not exceed $350,000, and (ii) any non-employee chair of the board of directors, the Audit Committee, the Compensation Committee or the Nominating and Governance Committee in any fiscal year may not exceed $500,000.

Administration.   The 2021 Plan will be administered by our compensation committee. Our compensation committee will have full power to select, from among the individuals eligible for awards, the

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individuals to whom awards will be granted, to make any combination of awards to participants, and to determine the specific terms and conditions of each award, subject to the provisions of the 2021 Plan.

Eligibility.   Persons eligible to participate in the 2021 Plan will be those employees, non-employee directors and consultants, as selected from time to time by our compensation committee at its discretion.

Options.   The 2021 Plan permits the granting of both options to purchase common stock intended to qualify as incentive stock options under Section 422 of the Code and options that do not so qualify. The option exercise price of each option will be determined by our compensation committee but may not be less than 100% of the fair market value of our common stock on the date of grant unless the option is granted as a substitute award in assumption of, or in substitution for, outstanding awards previously granted by an entity that we acquire. The term of each option will be fixed by our compensation committee and may not exceed ten years from the date of grant. Our compensation committee will determine at what time or times each option may be exercised.

Stock Appreciation Rights.   Our compensation committee may award stock appreciation rights subject to conditions and restrictions it determines. Stock appreciation rights entitle the recipient to shares of common stock, or cash, equal to the value of the appreciation in our stock price over the exercise price. The exercise price may not be less than 100% of the fair market value of our common stock on the date of grant. The term of each stock appreciation right will be fixed by our compensation committee and may not exceed ten years from the date of grant. Our compensation committee will determine at what time or times each stock appreciation right may be exercised.

Restricted Stock and Restricted Stock Units.   Our compensation committee may award restricted shares of common stock and restricted stock units to participants subject to conditions and restrictions it determines. These conditions and restrictions may include the achievement of certain performance goals and/or continued employment with us through a specified vesting period.

Other Equity-Based Awards.   Our compensation committee may make other equity-based or equity-related awards not otherwise described by the terms of the 2021 Plan.

Dividend Equivalents.   A dividend equivalent is the right to receive payments in cash or in stock, based on dividends with respect to shares of stock. Dividend equivalents may be granted to participants in tandem with another award or as freestanding awards.

Change in Control.   The 2021 Plan provides that upon the effectiveness of a transaction that affects our common stock (including a “Change in Control,” as defined in the 2021 Plan, a recapitalization, stock split, reverse stock split, spin-off, reorganization, or similar transaction) or any unusual or infrequent event that affects us, an affiliate, or our financial statements or the financial statements of an affiliate, our compensation committee may, without limitation, provide (i) for the substitution or assumption of awards under the 2021 Plan, (ii) that options or stock appreciation rights that would not otherwise become exercisable prior to the Change in Control will be exercisable as to all common shares subject thereto and that any options or stock appreciation rights not exercised prior to the consummation of the Change in Control will terminate and be of no further force and effect as of the consummation of the Change in Control, and/or (iii) for the canceling any one or more outstanding awards and causing to be paid to the holders thereof, in cash, common stock, other securities or other property, or any combination thereof, the value of the awards, if any, as determined by our compensation committee, among other things.

Amendment.   Our board of directors may amend or discontinue the 2021 Plan and our compensation committee can amend or cancel outstanding awards for purposes of satisfying changes in law or any other lawful purpose, but no such action may adversely affect rights under an award without the holder’s consent. Certain amendments to the 2021 Plan will require the approval of our stockholders.

No awards may be granted under the 2021 Plan after the date that is ten years from the date of stockholder approval of the 2021 Plan. No awards under the 2021 Plan have been made as of the filing date of this registration statement.

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FlexEnergy, Inc. 2016 Target Incentive Plan

FEI adopted the 2016 Plan in October 2016. The 2016 Plan provides for the grant of cash payment awards, payable upon satisfaction of a performance condition (i.e. the occurrence of a Qualifying Sale constituting a Change in Control of FEI (as these terms are defined in the 2016 Plan)) and a service vesting condition (i.e. the vesting of an award based on continuous service). Under the 2016 Plan, cash payment awards of $3,248,821 in aggregate have been granted, and we do not expect there will be any further awards under the 2016 Plan. There is no settlement payment of an award under the 2016 Plan unless and until there is a Qualifying Sale which also constitutes a Change in Control of FEI (as these terms are defined in the 2016 Plan) prior to the earlier of a Termination Transaction (as defined in the 2016 Plan) or the termination of the 2016 Plan or January 1, 2026. To constitute a Qualifying Sale, a sale or series of sales of assets or ownership must result in the holders of Series A Units of FPS receiving more than $64.00 per Series A Unit. A total of 1,000,000 Series A Units are currently issued and outstanding.

FlexEnergy, Inc. 2013 Equity Incentive Plan

FEI adopted the 2013 Plan in January 2013. Payments under the 2013 Plan have been frozen and there will be no further grants made under the 2013 Plan. Under the 2013 Plan, an aggregate payment of $633,040 is due to the participants on the earlier of January 1, 2023 or a Change of Control of FEI (as defined in the 2013 Plan).

Other Elements of Compensation

401(k) Plan

We maintain a tax-qualified 401(k) retirement plan for all employees who satisfy certain eligibility requirements, including requirements relating to age. We match any contributions made by our employees (up to 6% of an employee’s wages), including executives. We temporarily suspended our matching contribution from June 2020 through December 2020, but have resumed this matching contribution as of January 1, 2021. We intend for our 401(k) plan to qualify under Section 401(a) and 501(a) of the Code so that contributions by employees to our 401(k) plan, and income earned on those contributions, are not taxable to employees until withdrawn from our 401(k) plan.

Executive Compensation Arrangements

In connection with the Contribution Transaction, we will enter into an executive employment agreement with Mark Schnepel under which Mr. Schnepel (i) serves as President and Chief Executive Officer of FGS, (ii) serves as President and Chief Executive Officer of FEES, (iii) receives a base salary of $295,500, (iv) is eligible for an annual target bonus equal to 50% of base salary, (v) will receive 12,000 shares of common stock of FGS after the one year anniversary of the consummation of this offering, provided certain conditions are met; and (vi) after the consummation of this offering, will receive a recommendation by FEES to the board of directors of FGS that he receive a stock option award to purchase 100,000 shares of common stock of FGS. Mr. Schnepel was originally promoted to President and Chief Executive Officer of FEES in 2013.

In connection with the Contribution Transaction, we will enter into an executive employment agreement with Wes Kimmel under which Mr. Kimmel (i) serves as Chief Financial Officer, Treasurer and Secretary of FGS, (ii) serves as Chief Financial Officer and Secretary of FEES, (iii) receives a base salary of $295,500, (iv) is eligible for an annual target bonus equal to 50% of base salary, (v) will receive 25,000 shares of common stock of FGS after the one year anniversary of the consummation of this offering, provided certain conditions are met; and (vi) after the consummation of this offering, will receive a recommendation by FEES to the board of directors of FGS that he receive a stock option award to purchase 115,000 shares of common stock of FGS. Mr. Kimmel was originally promoted to Chief Financial Officer and Secretary of FEES in 2013.

In connection with the Contribution Transaction, we will enter into an executive employment agreement with Doug Baltzer under which Mr. Baltzer (i) serves as President and Chief Commercial Officer of FGS,

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(ii) serves as President of FLPS, (iii) receives an annual base salary of $295,500, (iv) is eligible for an annual target bonus equal to 50% of base salary, (v) will receive 12,000 shares of common stock of FGS after the one year anniversary of the consummation of this offering, provided certain conditions are met; and (vi) after the consummation of this offering, will receive a recommendation by FEES to the board of directors of FGS that he receive a stock option award to purchase 100,000 shares of common stock of FGS. Mr. Baltzer was originally employed as President of FLPS in 2013.

Each named executive is also eligible to participate in, and receive one or more grants under, the 2021 Plan. Additionally, from time to time, our board of directors may approve annual bonuses for our named executives based on individual performance, company performance, or as otherwise determined to be appropriate.

Under the terms of each named executive’s employment agreement, the term of the executive’s employment continues until terminated by the executive or by us. Upon termination, each named executive will be entitled to accrued base salary and any unpaid expense reimbursements.

Potential Payments upon Termination

If we terminate a named executive’s employment without Cause outside of the six-month period immediately before or after a Change of Control or the executive terminates his employment for Good Reason (as the terms are defined in the executive’s employment agreement), then the executive will be entitled to accrued base salary and any unpaid expense reimbursements, plus (i) cash severance equal to six months of the executive’s base salary paid over a six-month period or, (ii) if we elect to extend the executive’s post-employment non-competition obligations from six months to 12 months, then cash severance equal to 12 months of the executive’s base salary paid over a 12-month period.

Alternatively, a named executive will be entitled to accrued base salary and any unpaid expense reimbursements, plus cash severance equal to 12 months of the executive’s base salary paid over a 12-month period if we terminate the executive’s employment without Cause during the six-month period immediately before or after a Change of Control.

Each named executive’s employment agreement conditions any payment of severance upon execution, effectiveness and irrevocability of a General Release (as defined in the executive’s employment agreement).

Outstanding Cash Awards at Fiscal Year-End

The following table summarizes the amounts under the 2016 Plan and 2013 Plan for each named executive officer as of December 31, 2020 that will payable on the terms of the respective plan:

Name	Award Date	Plan	Cash Award(1)
Mark Schnepel	February 6, 2013	2013 Plan	​	$	108,542
​	October 27, 2016	2016 Plan	​	$	958,310
Wes Kimmel	June 30, 2014	2013 Plan	​	$	35,442
​	October 27, 2016	2016 Plan	​	$	764,558
Doug Baltzer	—	2013 Plan	​	$	0
​	—	2016 Plan	​	$	0

(1)

As discussed above, under the 2013 Plan, an aggregate payout of $633,040 will be due to the participants upon the earlier of January 1, 2023 or a Change of Control (as defined in the 2013 Plan). Also, under the 2016 Plan an aggregate payout of $3,248,821 will become due to the participants if (and only if) a Change in Control (as defined in the 2016 Plan) that constitutes a Qualifying Sale (as defined in the 2016 Plan) occurs on or prior to on January 1, 2026.

Director Compensation

We do not currently have a formal policy with respect to compensating our non-employee directors for service as directors, except that our 2021 Plan contains a limitation whereby the value of all awards under our 2021 Plan and all other cash compensation paid by us to (i) any non-employee director in any fiscal year may not exceed $350,000, and (ii) any non-employee chair of the board of directors, the Audit Committee,

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the Compensation Committee or the Nominating and Governance Committee in any fiscal year may not exceed $500,000. We have entered into a board chairperson compensation agreement with Mr. Walker, pursuant to which he will receive an initial retainer fee of $93,750 on November 15, 2021, will receive quarterly retainer fees of $31,250 at the end of each calendar quarter commencing on December 31, 2021, and will be reimbursed for expenses incurred in connection with his service. Mr. Walker is also eligible to participate in, and receive one or more grants under, our 2021 Plan. Following the consummation of this offering, we anticipate that directors who are not also officers or employees of FGS will receive compensation for their service on our board of directors and committees thereof. The amount and form of this compensation has not yet been determined. Each non-employee director will be reimbursed for out-of-pocket expenses incurred in connection with attending board and committee meetings.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Related Party Transactions

Thomas Denison and Patrick Connelly are each affiliated with entities (including RNS and TRF) that have invested in FPS, our sole stockholder prior to this offering as a result of the Contribution Transaction. These affiliated entities of Messrs. Denison and Connelly together hold a controlling interest in FPS and also hold some of the Notes that are currently due in full as of October 31, 2022. See “Risk Factors – Risk Factors Relating to Ownership of Our Common Stock – Our largest stockholder, FPS, has a series of senior secured notes that are currently due in full at October 31, 2022, that if not extended or renegotiated, could cause FPS to sell shares of our common stock, which could adversely affect our stock price.”

George Walker holds preferred units of FPS representing less than 1% of the fully diluted equity capital of FPS.

Debt

As discussed more fully in “Risk Factors – Risk Factors Relating to Ownership of Our Common Stock – Our largest stockholder, FPS, has a series of senior secured notes that are currently due in full at October 31, 2022, that if not extended or renegotiated, could cause FPS to sell shares of our common stock, which could adversely affect our stock price,” since December 2015, FPS has entered into the Notes (whereby FPS contributed the cash received from the Notes to FEI and FLPS as capital) that, as of June 30, 2021, have an aggregate amount outstanding of $25.51 million. The Notes accrue interest in amounts ranging from 8% to 12% per annum and are due and payable in full on October 31, 2022. Further, in connection with the Contribution Transaction, FPS will pledge its shares of FGS in favor of the FPS Noteholders.

FPS’ Series B Preferred Units

As discussed more fully in “Risk Factors – Risk Factors Relating to Ownership of Our Common Stock – The agreement governing FPS’ Series B Preferred Units restricts our business and our ability to engage in certain corporate and financial transactions or in other businesses” and “Risk Factors – Risk Factors Relating to Ownership of Our Common Stock– FPS’ Series B and Series B-1 Units have redemption rights that, if exercised, could cause FPS to sell shares of our common stock to pay for the redemption, which could adversely affect our stock price”, FPS’ Series B Units may be called for redemption by a holder at any time by delivering written notice to FPS. The aggregate redemption price for FPS’ Series B Units is $37.22 million as of June 30, 2021. FPS’ Series B-1 Units may be called for redemption by a holder at any time by delivering written notice to FPS. The aggregate redemption price for FPS’ Series B-1 Units is $17.98 million as of June 30, 2021. In addition, under the terms of FPS’ Series B Preferred Units, FPS has agreed to certain covenants that our board believes restrict our ability to do business and enter into certain financial transactions.

SAFE Transaction

On August 16, 2021, FPS entered into the SAFE Transaction with RNS and TRF whereby each of RNS and TRF paid $1.00 million to FPS (with the option for FPS to call an additional $0.50 million from each) in exchange for the right to receive right to receive from FPS (i) if the underwriters’ over-allotment exercise is exercised, the Cash Payment or (ii) if there is no over-allotment exercise or if the net proceeds received by FPS as a result of an over-allotment exercise are insufficient to pay the full Cash Payment to RNS and TRF, a number of the shares of FGS common stock issued to FPS in the Contribution Transaction equal to the amount invested minus 80% of the Cash Payment, divided by 80% of the issuance price per share in this offering. The proceeds from the SAFE Transaction were contributed by FPS to FEI and FLPS as capital.

Registration Rights Agreement

In connection with the Contribution Transaction, we will enter into a Registration Rights Agreement (the “Registration Rights Agreement”) with FPS, RNS and TRF which provides certain registration rights

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to FPS, RNS and TRF and pursuant to which we are obligated, upon request from FPS, RNS or TRF (but subject to customary limitations provide for in the Registration Rights Agreement) to register for resale under the Securities Act the shares of our common stock issued to FPS in the Contribution Transaction. Subject to certain exceptions, we will bear all expenses of each registration pursuant to the Registration Rights Agreement, other than Selling Expenses (as defined in the Registration Rights Agreement).

Our Relationship with FPS

As a result of the Contribution Transaction, FGS will become a wholly owned subsidiary of FPS. Following this offering, we expect that FPS will continue to hold at least      % of our outstanding common stock for the foreseeable future, and as a result FPS will continue to have significant influence over our business. For additional information regarding our relationship with FPS, see “Risk Factors – Risk Factors Relating to Ownership of Our Common Stock – After this offering, voting control with respect to our company will remain concentrated in the hands of FPS. FPS will continue to be able to exercise significant influence on us” and “Risk Factors – Risk Factors Relating to Ownership of Our Common Stock – We are a “controlled company” within the meaning of the rules of Nasdaq and, as a result, will qualify for, and may rely on, exemptions from certain corporate governance requirements.”

Indemnification Agreements and Directors’ and Officers’ Liability Insurance

Section 145 of the Delaware General Corporation Law authorizes the board of directors of a corporation to grant, and authorizes a court to award, indemnity to officers, directors and other corporate agents.

Our Certificate of Incorporation contains provisions that limit the liability of our directors for monetary damages to the fullest extent permitted by Delaware law. Consequently, our directors will not be personally liable to us or our stockholders for monetary damages for breach of the fiduciary duty of care, but will be liable for monetary damages for the following:

•

any breach of their duty of loyalty to our company or our stockholders;

•

any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;

•

unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the Delaware General Corporation Law; or

•

any transaction from which they derived an improper personal benefit.

Any amendment to, or repeal of, these provisions will not eliminate or reduce the effect of these provisions in respect of any act, omission or claim that occurred or arose prior to that amendment or repeal. If the Delaware General Corporation Law is amended to provide for further limitations on the personal liability of directors of corporations, then the personal liability of our directors will be further limited to the greatest extent permitted by the Delaware General Corporation Law.

In addition, our Certificate of Incorporation and Bylaws provide that we will indemnify and hold harmless, to the fullest extent permitted by the Delaware General Corporation Law, any director or officer who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”), by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or officer of the corporation or, while a director or officer of the corporation, is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys’ fees and other amounts) reasonably incurred. The foregoing rights to indemnification generally do not apply to a proceeding initiated by a director or officer unless the proceedings were approved by our board of directors, the indemnification is required by law or the director or officer is seeking enforcement of the indemnification and advancement

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rights. Our Certificate of Incorporation and our Bylaws will also provide that we must pay the expenses (including attorneys’ fees) incurred by a director or officer in defending any proceeding in advance of its final disposition, provided that such payment of expenses in advance of the final disposition of the proceeding will be made only upon receipt of an undertaking by such director or officer to repay all amounts advanced if it is ultimately determined that the director or officer is not entitled to be indemnified.

Further, we have entered into or will enter into indemnification agreements with each of our directors and executive officers that may be broader than the specific indemnification provisions contained in the Delaware General Corporation Law. These indemnification agreements require us, among other things, to indemnify our directors and executive officers against liabilities that may arise by reason of their status or service. These indemnification agreements also require us to advance all expenses incurred by the directors and executive officers prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in any such action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding. We believe that these agreements are necessary to attract and retain qualified individuals to serve as directors and executive officers.

The limitation of liability and indemnification provisions that are expected to be included in our Certificate of Incorporation, Bylaws and in indemnification agreements that we have entered into or will enter into with our directors and executive officers may discourage stockholders from bringing a lawsuit against our directors and executive officers for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against our directors and executive officers, even though an action, if successful, might benefit us and other stockholders. Further, a stockholder’s investment may be adversely affected to the extent that we pay the costs of settlement and damage awards against directors and executive officers as required by these indemnification provisions. At present, we are not aware of any pending litigation or proceeding involving any person who is or was one of our directors, officers, employees or other agents or is or was serving at our request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, for which indemnification is sought, and we are not aware of any threatened litigation that may result in claims for indemnification.

We plan to obtain insurance policies under which, subject to the limitations of the policies, coverage is provided to our directors and executive officers against loss arising from claims made by reason of breach of fiduciary duty or other wrongful acts as a director or executive officer, including claims relating to public securities matters, and to us with respect to payments that may be made by us to these directors and executive officers pursuant to our indemnification obligations or otherwise as a matter of law.

Certain of our non-employee directors may, through their relationships with their employers, be insured and/or indemnified against certain liabilities incurred in their capacity as members of our board of directors.

The underwriting agreement filed as Exhibit 1.1 to the registration statement of which this prospectus is a part will provide for indemnification by the underwriters of us and our officers and directors for certain liabilities arising under the Securities Act or otherwise.

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PRINCIPAL AND SELLING STOCKHOLDERS

The following table and footnotes below sets forth information regarding the beneficial ownership of shares of our common stock as of October   , 2021 for:

•

the selling stockholder;

•

each person known by us to beneficially own more than 5% of our common stock;

•

each of the directors and named executive officers individually; and

•

all of our directors and executive officers as a group.

The number of shares beneficially owned by each stockholder is determined under rules of the SEC and includes voting or investment power with respect to securities. Under these rules, beneficial ownership includes any shares as to which the individual or entity has sole or shared voting power or investment power. In computing the number of shares beneficially owned by an individual or entity and the percentage ownership of that person, shares of common stock subject to options, warrants or other rights held by that person that are currently exercisable or will become exercisable within 60 days after October   , 2021 are considered outstanding, although these shares are not considered outstanding for purposes of computing the percentage ownership of any other person.

We have based our calculation of the percentage of beneficial ownership prior to this offering on                   shares of common stock presumed to be outstanding as of October   , 2021 after giving effect to the Contribution Transaction. For more information about estimated number of shares outstanding, see “Dilution.” We have based our calculation of the percentage of beneficial ownership after this offering on the sale of                   shares of common stock in this offering excluding any potential purchases in this offering by the persons and entities named in the table below.

Except as otherwise indicated in the footnotes below, the address of each beneficial owner is c/o FlexEnergy Green Solutions, Inc, 112 Corporate Drive, Portsmouth, NH 03801.

​

​

​

​

Beneficial Ownership After the Offering

​

Beneficial Ownership Before this Offering

Number of Shares Being Offered

Assuming No Exercise of the Underwriters’ Option

Assuming the Underwriters’ Option is Exercised in Full

Name of beneficial owner

Shares

%

Shares

%

Shares

%

5% and Selling Stockholder

​

​

​

​

​

​

​

​

​

​

​

​

​

​

FlexEnergy Power Solutions, LLC(1)

​

​

​

100%

​

​

​

​

​

%

​

​

​

%

Named Executive Officers

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Mark Schnepel

​

—

​

—

​

—

​

—

​

—

​

—

​

—

Wes Kimmel

​

—

​

—

​

—

​

—

​

—

​

—

​

—

Doug Baltzer

​

—

​

—

​

—

​

—

​

—

​

—

​

—

George Walker

​

—

​

—

​

—

​

—

​

—

​

—

​

—

Thomas Denison

​

—

​

—

​

—

​

—

​

—

​

—

​

—

Patrick Connelly

​

—

​

—

​

—

​

—

​

—

​

—

​

—

All executive officers and directors together as a group (6 persons)(1)

​

—

​

—

​

—

​

—

​

—

​

—

​

—

(1)

The Managers of FPS are Thomas Denison and Patrick Connelly, each of whom may be deemed to have shared voting and investment power over the shares of our common stock owned by FPS.

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DESCRIPTION OF CAPITAL STOCK

General

Our authorized capital stock consists of 100,000,000 shares of common stock, par value $0.0001 per share, and 5,000,000 shares of preferred stock, par value $0.0001 per share.

The following description of our capital stock and provisions of our Certificate of Incorporation and Bylaws are summaries and are qualified by reference to our Certificate of Incorporation and Bylaws. Copies of these documents will be filed with the Securities and Exchange Commission as exhibits to our registration statement, of which this prospectus forms a part.

Common Stock

Immediately prior to the closing of this offering, there will be             shares of our common stock outstanding and held of record by one stockholder, assuming the completion of the Contribution Transaction immediately prior to the completion of this offering.

Voting Rights

Holders of our common stock are entitled to one vote per share of common stock. Holders of shares of common stock will vote together as a single class on all matters (including the election of directors) submitted to a vote of stockholders. We do not provide for cumulative voting for the election of directors in our Certificate of Incorporation.

Economic Rights

Dividends.   Subject to preferences that may apply to shares of preferred stock outstanding at the time, if any, the holders of outstanding shares of our common stock are entitled to receive dividends out of funds legally available if our board of directors, in its discretion, determines to issue dividends and only then at the times and in the amounts that our board of directors may determine. See “Dividend Policy” for more information. Any dividend or distributions paid or payable to the holders of shares of common stock will be paid pro rata, on an equal priority, pari passu basis.

Right to Receive Liquidation Distributions.   Upon our dissolution, liquidation or winding-up, the assets legally available for distribution to our stockholders will be distributable ratably among the holders of our common stock, subject to prior satisfaction of all outstanding debt and liabilities and the preferential rights and payment of liquidation preferences, if any, on any outstanding shares of preferred stock.

Preferred Stock

Under the terms of our Certificate of Incorporation, our board of directors is authorized to direct us to issue shares of preferred stock in one or more series without stockholder approval. Our board of directors has the discretion to determine the rights, preferences, designations, powers and restrictions, including voting powers, dividend rights, conversion and redemption rights and liquidation preferences, of each series of preferred stock.

The purpose of authorizing our board of directors to issue preferred stock and determine its rights and preferences is to eliminate delays associated with a stockholder vote on specific issuances. The issuance of preferred stock could adversely affect the voting power of holders of our common stock and the likelihood that such holders will receive dividend payments and payments upon liquidation. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions, future financings and other corporate purposes, could have the effect of making it more difficult for a third party to acquire, or could discourage a third party from seeking to acquire, a majority of our outstanding voting stock. Upon the closing of this offering, there will be no shares of preferred stock outstanding, and we have no present plans to issue any shares of preferred stock.

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Choice of Forum

Our Certificate of Incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for: (1) any derivative action or proceeding brought on our behalf; (2) any action asserting a claim of breach of a fiduciary duty by any of our directors, officers, or stockholders owed to us or our stockholders; (3) any action arising pursuant to any provision of the Delaware General Corporation Law, our Certificate of Incorporation or our Bylaws; or (4) any action asserting a claim against us governed by the internal affairs doctrine, except for, as to each of (1) through (4) above, any claim (A) as to which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or (C) for which the Court of Chancery does not have subject matter jurisdiction. If an action is brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel. Although we believe this provision benefits us by providing increased consistency in the application of law in the types of lawsuits to which it applies, a court may determine that this provision is unenforceable, and to the extent it is enforceable, the provision may have the effect of discouraging lawsuits against our directors and officers.

Unless we consent in writing to the selection of an alternative forum, the federal district courts of the U.S. shall be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. Under Section 22 of the Securities Act, federal and state courts have concurrent jurisdiction over all suits brought to enforce any duty or liability created by the Securities Act, and stockholders cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Accordingly, there is uncertainty as to whether a court would enforce such a forum selection provision as written in connection with claims arising under the Securities Act. Notwithstanding the foregoing, the forum selection clause will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the U.S. shall be the sole and exclusive forum. This choice of forum provision has important consequences for our stockholders. See “Risk Factors –Risk Factors Relating to Ownership of Our Common Stock– Our Certificate of Incorporation includes a forum selection clause, which could discourage claims or limit stockholders’ ability to make a claim against us, our directors, officers, other employees or stockholders.”

Anti-takeover Provisions

Stockholder Action; Special Meeting of Stockholders

So long as FPS holds stock representing at least 50% of the voting power in our company, stockholder action may be taken by written or electronic consent to action at a meeting, and stockholders holding a majority in voting power of all then-outstanding shares of capital stock of FGS entitled to vote generally in the election of directors may request that a special meeting of stockholders be called.

Our Certificate of Incorporation provides that, at any time after FPS ceases to hold at least 50% of the voting power in our company, (i) any action required or permitted to be taken by our stockholders must be effected at a duly called annual or special meeting of our stockholders and may not be effected by any consent in writing by our stockholders, and (ii) except as otherwise required by law, special meetings of our stockholders can only be called by the chair of our board of directors or by the secretary upon the direction of our board of directors.

Amendment of Charter and Bylaws

Certain provisions of our Certificate of Incorporation and our Bylaws require the approval of a majority of the then authorized directors in order for our board of directors to amend or repeal certain provisions of our Certificate of Incorporation or our Bylaws or, at any time after FPS ceases to hold at least 50% of the voting power in our company, the approval of the holders of at least 66 2/3% of the voting power of all outstanding shares of voting stock is required in order for our stockholders to amend certain

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provisions of our Certificate of Incorporation or our Bylaws. Prior to the time that FPS ceases to hold at least 50% of the voting power in our company, the Certificate of Incorporation and Bylaws may be amended with the consent of the holders of at least 50% of the voting power of all then outstanding stock of FGS entitled to vote generally in the election of directors. This provision will have the effect of making it more difficult to amend certain provisions of our Certificate of Incorporation or our Bylaws.

Authorized but Unissued Shares

The authorized but unissued shares of our common stock and preferred stock are available for future issuance without stockholder approval, subject to any limitations imposed by the listing standards of Nasdaq. These additional shares may be used for a variety of corporate finance transactions, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved common stock and preferred stock could make more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.

The foregoing provisions of our Certificate of Incorporation and Bylaws could discourage potential acquisition proposals and could delay or prevent a change in control. These provisions are intended to enhance the likelihood of continuity and stability in the composition of our board of directors and in the policies formulated by our board of directors and to discourage certain types of transactions that may involve an actual or threatened change of control. These provisions are designed to reduce our vulnerability to an unsolicited acquisition proposal. However, these provisions could have the effect of discouraging others from making tender offers for our shares and, as a consequence, they also may inhibit fluctuations in the market price of our common stock that could result from actual or rumored takeover attempts. These provisions also may have the effect of preventing changes in our management or delaying or preventing a transaction that might benefit you or other minority stockholders.

Transfer Agent and Registrar

Upon completion of this offering, the transfer agent and registrar for our common stock will be American Stock Transfer & Trust Company, LLC. The address of the transfer agent and registrar is 6201 15th Avenue, Brooklyn, NY 11219.

Limitations of Liability and Indemnification

See the section captioned “Certain Relationships and Related Party Transactions – Indemnification Agreements and Directors’ and Officers’ Liability Insurance.”

Listing

We have applied to list our common stock on Nasdaq under the symbol “FLXE.”

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SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no public market for our common stock, and we cannot predict the effect, if any, that market sales of shares of our common stock or the availability of shares of our common stock for sale will have on the market price of our common stock prevailing from time to time. Future sales of our common stock in the public market, or the availability of such shares for sale in the public market, could adversely affect market prices prevailing from time to time. As described below, only a limited number of shares of our common stock will be available for sale shortly after this offering due to contractual and legal restrictions on resale. Nevertheless, sales of our common stock in the public market after such restrictions lapse, or the perception that those sales may occur, could adversely affect the prevailing market price at that time and our ability to raise equity capital in the future.

Following the completion of this offering,                   shares of common stock will be outstanding. Of these outstanding shares, all of the shares of our common stock sold in this offering will be freely tradable, except that any shares purchased in this offering by our affiliates, as that term is defined in Rule 144 under the Securities Act, would only be able to be sold in compliance with the Rule 144 limitations described below.

The remaining outstanding shares of our common stock not sold in this offering will be deemed “restricted securities” as defined in Rule 144 under the Securities Act. Restricted securities may be sold in the public market only if they are registered or if they qualify for an exemption from registration under Rule 144 under the Securities Act, which rule is summarized below. All of our executive officers, directors and holders of substantially all of our capital stock and securities exercisable or convertible into our capital stock have entered into lock-up agreements with the underwriters under which they have agreed, subject to specific exceptions, not to sell any of our stock for 180 days following the date of this prospectus. As a result of these agreements and subject to the provisions of Rule 144, shares of our common stock will be available for sale in the public market as follows:

•

beginning on the date of this prospectus, all             shares of our common stock sold in this offering will be immediately available for sale in the public market; and

•

beginning 181 days after the date of this prospectus, the remaining             shares of our common stock will be eligible for sale in the public market from time to time thereafter, subject in some cases to the volume and other restrictions of Rule 144, as described below, but subject to the rights of FPS, RNS and TRF to have some or all of their shares registered for resale – see “Registration Rights Agreement” below.

Lock-Up Agreements

We, all of our directors and officers, FPS, RNS and TRF have agreed or will agree that, without the prior written consent of Roth Capital Partners, during the period from the date of this prospectus and ending on the date 180 days after the date of this prospectus, we and they will not, among other things:

•

offer, pledge, sell, contract to sell, grant any option to purchase, make any short sale or otherwise dispose of any shares of common stock, options or warrants to purchase shares of our common stock or any securities convertible into or exercisable or exchangeable for shares of our common stock; or

•

in our case, file any registration statement with the SEC relating to the offering of any shares of common stock or any securities convertible into or exercisable or exchangeable for common stock; or

•

in the case of our directors, officers and other holders of our securities, make any demand for exercise of any rights with respect to the registration of any securities.

This agreement is subject to certain exceptions. See “Underwriting” below for additional discussion.

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Rule 144

In general, under Rule 144 as currently in effect, once we have been subject to the public company reporting requirements of Section 13 or Section 15(d) of the Exchange Act for at least 90 days, a person who is not deemed to have been one of our affiliates for purposes of the Securities Act at any time during the 90 days preceding a sale and who has beneficially owned the shares of our common stock proposed to be sold for at least six months is entitled to sell those shares without complying with the manner of sale, volume limitation or notice provisions of Rule 144, subject to compliance with the public information requirements of Rule 144. If such a person has beneficially owned the shares proposed to be sold for at least one year, including the holding period of any prior owner other than our affiliates, then that person would be entitled to sell those shares without complying with any of the requirements of Rule 144.

In general, under Rule 144, as currently in effect, our affiliates or persons selling shares of our common stock on behalf of our affiliates are entitled to sell upon expiration of the lock-up agreements described above, within any three-month period, a number of shares that does not exceed the greater of:

•

1% of the number of shares of our capital stock then outstanding, which will equal             shares immediately after this offering; or

•

the average weekly trading volume of our common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to that sale.

Sales under Rule 144 by our affiliates or persons selling shares of our common stock on behalf of our affiliates are also subject to manner of sale provisions and notice requirements and to the availability of current public information about us.

Registration Rights Agreement

In connection with the Contribution Transaction and the SAFE Transaction, we entered into the Registration Rights Agreement with FPS, RNS and TRF, which provides certain registration rights to FPS , RNS and TRF and pursuant to which we are obligated, upon request from FPS, RNS or TRF (but subject to customary limitations provide for in the Registration Rights Agreement) to register for resale under the Securities Act the shares of our common stock issued to FPS in the Contribution Transaction or transferred to RNS and TRF pursuant in the SAFE Transaction. Subject to certain exceptions, we will bear all expenses of each registration pursuant to the Registration Rights Agreement, other than Selling Expenses (as defined in the Registration Rights Agreement).

Registration Statement with Respect to our 2021 Plan

We intend to file a registration statement on Form S-8 under the Securities Act promptly after the completion of this offering to register shares of our common stock reserved for future issuance under our 2021 Plan. The registration statement on Form S-8 is expected to become effective immediately upon filing, and shares of our common stock covered by the registration statement will then become eligible for sale in the public market, subject to the Rule 144 limitations applicable to affiliates, vesting restrictions and any applicable lock-up agreements. See “Executive Compensation – Equity Compensation” for a description of our equity incentive plans.

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MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES
TO NON-U.S. HOLDERS OF OUR COMMON STOCK

The following discussion is a summary of the material U.S. federal income tax consequences to Non-U.S. Holders (as defined below) of the purchase, ownership and disposition of our common stock issued pursuant to this offering, but does not purport to be a complete analysis of all potential tax effects. The effects of other U.S. federal tax laws, such as estate and gift tax laws, and any applicable state, local or non-U.S. tax laws are not discussed. This discussion is based on the U.S. Internal Revenue Code of 1986, as amended (the “Code”), Treasury Regulations promulgated thereunder, judicial decisions, and published rulings and administrative pronouncements of the U.S. Internal Revenue Service (the “IRS”), in each case in effect as of the date hereof. These authorities may change or be subject to differing interpretations. Any such change or differing interpretation may be applied retroactively in a manner that could adversely affect a Non-U.S. Holder of our common stock. We have not sought and will not seek any rulings from the IRS regarding the matters discussed below. There can be no assurance the IRS or a court will not take a contrary position to that discussed below regarding the tax consequences of the purchase, ownership and disposition of our common stock.

This discussion is limited to Non-U.S. Holders that hold our common stock as a “capital asset” within the meaning of Section 1221 of the Code (generally, property held for investment). This discussion does not address all U.S. federal income tax consequences relevant to a Non-U.S. Holder’s particular circumstances, including the impact of the Medicare contribution tax on net investment income. In addition, it does not address consequences relevant to Non-U.S. Holders subject to special rules, including, without limitation:

•

U.S. expatriates and former citizens or long-term residents of the U.S.;

•

persons subject to the alternative minimum tax;

•

persons holding our common stock as part of a hedge, straddle or other risk reduction strategy or as part of a conversion transaction or other integrated investment;

•

banks, insurance companies, and other financial institutions;

•

brokers, dealers or traders in securities;

•

“controlled foreign corporations,” “passive foreign investment companies,” and corporations that accumulate earnings to avoid U.S. federal income tax;

•

partnerships or other entities or arrangements treated as partnerships for U.S. federal income tax purposes (and investors therein);

•

tax-exempt organizations or governmental organizations;

•

persons deemed to sell our common stock under the constructive sale provisions of the Code;

•

persons who hold or receive our common stock pursuant to the exercise of any employee stock option or otherwise as compensation;

•

tax-qualified retirement plans;

•

“qualified foreign pension funds” as defined in Section 897(l)(2) of the Code and entities all of the interests of which are held by qualified foreign pension funds; and

•

persons subject to special tax accounting rules as a result of any item of gross income with respect to the stock being taken into account in an applicable financial statement.

If an entity treated as a partnership for U.S. federal income tax purposes holds our common stock, the tax treatment of a partner in the partnership will depend on the status of the partner, the activities of the partnership and certain determinations made at the partner level. Accordingly, partnerships holding our common stock and the partners in such partnerships should consult their tax advisors regarding the U.S. federal income tax consequences to them.

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THIS DISCUSSION IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT TAX ADVICE. INVESTORS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF OUR COMMON STOCK ARISING UNDER THE U.S. FEDERAL ESTATE OR GIFT TAX LAWS OR UNDER THE LAWS OF ANY STATE, LOCAL OR NON-U.S. TAXING JURISDICTION OR UNDER ANY APPLICABLE INCOME TAX TREATY.

Definition of a Non-U.S. Holder

For purposes of this discussion, a “Non-U.S. Holder” is any beneficial owner of our common stock that is neither a “U.S. person” nor an entity treated as a partnership for U.S. federal income tax purposes. A U.S. person is any person that, for U.S. federal income tax purposes, is or is treated as any of the following:

•

an individual who is a citizen or resident of the U.S.;

•

a corporation created or organized under the laws of the U.S., any state thereof, or the District of Columbia;

•

an estate, the income of which is subject to U.S. federal income tax regardless of its source; or

•

a trust that (1) is subject to the primary supervision of a U.S. court and the control of one or more “United States persons” ​(within the meaning of Section 7701(a)(30) of the Code), or (2) has a valid election in effect to be treated as a United States person for U.S. federal income tax purposes.

Distributions

As described in the section captioned “Dividend Policy,” we do not anticipate declaring or paying dividends to holders of our common stock in the foreseeable future. However, if we do make distributions of cash or property on our common stock, such distributions will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Amounts not treated as dividends for U.S. federal income tax purposes will constitute a return of capital and first be applied against and reduce a Non-U.S. Holder’s adjusted tax basis in its common stock, but not below zero. Any excess will be treated as capital gain and will be treated as described below under “– Sale or Other Taxable Disposition.”

Subject to the discussion below on effectively connected income, dividends paid to a Non-U.S. Holder of our common stock will be subject to U.S. federal withholding tax at a rate of 30% of the gross amount of the dividends (or such lower rate specified by an applicable income tax treaty, provided the Non-U.S. Holder furnishes a valid IRS Form W-8BEN or W-8BEN-E (or other applicable documentation) certifying qualification for the lower treaty rate). A Non-U.S. Holder that does not timely furnish the required documentation, but that qualifies for a reduced treaty rate, may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS. Non-U.S. Holders should consult their tax advisors regarding their entitlement to benefits under any applicable income tax treaty.

If dividends paid to a Non-U.S. Holder are effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, the Non-U.S. Holder maintains a permanent establishment in the United States to which the dividends are attributable), the Non-U.S. Holder will be exempt from the U.S. federal withholding tax described above. To claim the exemption, the Non-U.S. Holder must furnish to the applicable withholding agent a valid IRS Form W-8ECI, certifying that the dividends are effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States.

Any such effectively connected dividends will be subject to U.S. federal income tax on a net income basis at the regular graduated rates. A Non-U.S. Holder that is a corporation also may be subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on the

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effectively connected dividends, as adjusted for certain items. Non-U.S. Holders should consult their tax advisors regarding any applicable tax treaties that may provide for different rules.

Sale or Other Taxable Disposition

A Non-U.S. Holder will not be subject to U.S. federal income tax on any gain realized upon the sale or other taxable disposition of our common stock unless:

•

the gain is effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, the Non-U.S. Holder maintains a permanent establishment in the United States to which such gain is attributable);

•

the Non-U.S. Holder is a nonresident alien individual present in the United States for 183 days or more during the taxable year of the disposition and certain other requirements are met; or

•

our common stock constitutes a U.S. real property interest (“USRPI”) by reason of our status as a U.S. real property holding corporation (“USRPHC”) for U.S. federal income tax purposes.

Gain described in the first bullet point above generally will be subject to U.S. federal income tax on a net income basis at the regular graduated rates. A Non-U.S. Holder that is a corporation also may be subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on the effectively connected gain, as adjusted for certain items.

Gain described in the second bullet point above will be subject to U.S. federal income tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty), which may be offset by U.S. source capital losses of the Non-U.S. Holder (even though the individual is not considered a resident of the United States), provided the Non-U.S. Holder has timely filed U.S. federal income tax returns with respect to the losses.

With respect to the third bullet point above, we believe we currently are not, and do not anticipate becoming, a USRPHC. Because the determination of whether we are a USRPHC depends, however, on the fair market value of our USRPIs relative to the fair market value of our non-U.S. real property interests and our other business assets, there can be no assurance we currently are not a USRPHC or will not become one in the future. Even if we are or were to become a USRPHC, gain arising from the sale or other taxable disposition by a Non-U.S. Holder of our common stock will not be subject to U.S. federal income tax if our common stock is “regularly traded,” as defined by applicable Treasury Regulations, on an established securities market, and the Non-U.S. Holder owned, actually and constructively, 5% or less of our common stock throughout the shorter of the five-year period ending on the date of the sale or other taxable disposition or the Non-U.S. Holder’s holding period.

Non-U.S. Holders should consult their tax advisors regarding potentially applicable income tax treaties that may provide for different rules.

Information Reporting and Backup Withholding

Payments of dividends on our common stock will not be subject to backup withholding, provided the applicable withholding agent does not have actual knowledge or reason to know the holder is a United States person and the holder either certifies its non-U.S. status, such as by furnishing a valid IRS Form W-8BEN, W-8BEN-E or W-8ECI, or otherwise establishes an exemption. However, information returns are required to be filed with the IRS in connection with any dividends on our common stock paid to the Non-U.S. Holder, regardless of whether any tax was actually withheld. In addition, proceeds of the sale or other taxable disposition of our common stock within the United States or conducted through certain U.S.-related brokers generally will not be subject to backup withholding or information reporting, if the applicable withholding agent receives the certification described above and does not have actual knowledge or reason to know that such holder is a United States person, or the holder otherwise establishes an exemption. Proceeds of a disposition of our common stock conducted through a non-U.S. office of a non-U.S. broker generally will not be subject to backup withholding or information reporting.

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Copies of information returns that are filed with the IRS may also be made available under the provisions of an applicable treaty or agreement to the tax authorities of the country in which the Non-U.S. Holder resides or is established.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against a Non-U.S. Holder’s U.S. federal income tax liability, provided the required information is timely furnished to the IRS.

Additional Withholding Tax on Payments Made to Foreign Accounts

Withholding taxes may be imposed under Sections 1471 to 1474 of the Code (such Sections commonly referred to as the Foreign Account Tax Compliance Act, or “FATCA”) on certain types of payments made to non-U.S. financial institutions and certain other non-U.S. entities. Specifically, a 30% withholding tax may be imposed on dividends on, or gross proceeds from the sale or other disposition of, our common stock paid to a “foreign financial institution” or a “non-financial foreign entity” ​(each as defined in the Code), unless (1) the foreign financial institution undertakes certain diligence and reporting obligations, (2) the non-financial foreign entity either certifies it does not have any “substantial United States owners” ​(as defined in the Code) or furnishes identifying information regarding each substantial United States owner, or (3) the foreign financial institution or non-financial foreign entity otherwise qualifies for an exemption from these rules. If the payee is a foreign financial institution and is subject to the diligence and reporting requirements in (1) above, it must enter into an agreement with the U.S. Department of the Treasury requiring, among other things, that it undertake to identify accounts held by certain “specified United States persons” or “United States-owned foreign entities” ​(each as defined in the Code), annually report certain information about such accounts, and withhold 30% on certain payments to non-compliant foreign financial institutions and certain other account holders. Foreign financial institutions located in jurisdictions that have an intergovernmental agreement with the United States governing FATCA may be subject to different rules.

Under the applicable Treasury Regulations and administrative guidance, withholding under FATCA generally applies to payments of dividends on our common stock, and will apply to payments of gross proceeds from the sale or other disposition of such stock on or after January 1, 2020.

Prospective investors should consult their tax advisors regarding the potential application of withholding under FATCA to their investment in our common stock.

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UNDERWRITING

We have entered into an underwriting agreement with the underwriters listed in the table below. Roth Capital Partners, LLC is the representative of the underwriters. We refer to the several underwriters listed in the table below as the “underwriters.” Subject to the terms and conditions of the underwriting agreement, we have agreed to sell to the underwriters, and the underwriters have agreed to purchase from us, shares of our common stock. Our common stock will trade on the Nasdaq Stock Market under the symbol “FLXE.”

Pursuant to the terms and subject to the conditions contained in the underwriting agreement, we have agreed to sell to the underwriters named below, and each underwriter severally has agreed to purchase from us, the respective number of shares of common stock set forth opposite its name below:

Underwriter	Number of Shares
Roth Capital Partners, LLC	​
Total	​

The underwriting agreement provides that the obligation of the underwriters to purchase the shares of common stock offered by this prospectus is subject to certain conditions. The underwriters are obligated to purchase all of the shares of common stock offered hereby if any of the shares are purchased.

The selling stockholder has granted the underwriters an option to buy up to an additional             shares of common stock from us at the public offering price, less the underwriting discounts and commissions, to cover over-allotments, if any. The underwriters may exercise this option at any time, in whole or in part, during the 30-day period after the date of this prospectus; however, the underwriters may only exercise the option once.

Discount, Commissions and Expenses

The underwriters propose to offer to the shares of common stock purchased pursuant to the underwriting agreement to the public at the public offering price set forth on the cover page of this prospectus and to certain dealers at that price less a concession not in excess of $       per share. After this offering, the public offering price and concession may be changed by the underwriters. No such change shall change the amount of proceeds to be received by us as set forth on the cover page of this prospectus.

In connection with the sale of the common stock to be purchased by the underwriters, the underwriters will be deemed to have received compensation in the form of underwriting commissions and discounts. The underwriters’ commissions and discounts will be            % of the gross proceeds of this offering, or $       per share of common stock, based on the public offering price per share set forth on the cover page of this prospectus.

We have also agreed to reimburse Roth Capital Partners at closing for legal expenses incurred by it in connection with the offering up to a maximum of $      .

The following table shows the underwriting discounts and commissions payable to the underwriters by us in connection with this offering (assuming both the exercise and non-exercise of the over-allotment option to purchase additional shares of common stock we have granted to the underwriters):

​	Per Share(1)				Total
​	Without Over- allotment		With Over- allotment		Without Over- allotment		With Over- allotment
Public offering price	​	$	​	$	​	$	​	$
Underwriting discount	​	$	​	$	​	$	​	$

(1)

Does not include the underwriters’ warrants or the rights granted to the representative, each as described below.

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Underwriters’ Warrants

We have also agreed to issue to the underwriters’ warrants to purchase a number of our shares of common stock equal to an aggregate of 2.5% of the shares of common stock sold in this offering. The underwriters’ warrants will have an exercise price equal to 120% of the initial public offering price of the shares of common stock sold in this offering and may be exercised on a cashless basis. The underwriters’ warrants are not redeemable by us, become exercisable 180 days from the effective date of the registration statement of which this prospectus forms a part and will expire on the third anniversary of the effective date. The underwriters’ warrants will provide for adjustment in the number and price of the underwriters’ warrants (and the shares of common stock underlying the underwriters’ warrants) in the event of recapitalization, merger or other fundamental transaction. The underwriters’ warrants and the underlying shares of common stock have been deemed compensation by FINRA and are therefore subject to FINRA Rule 5110(g)(1). In accordance with FINRA Rule 5110(g)(1), neither the underwriters’ warrants nor any shares of our common stock issued upon exercise of the underwriter warrants may be sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the securities by any person for a period of 180 days immediately following the date of effectiveness or commencement of sales of the offering pursuant to which the underwriters’ warrants are being issued, except the transfer of any security:

•

by operation of law or by reason of reorganization of the Company;

•

to any FINRA member firm participating in this offering and the officers or partners thereof, if all securities so transferred remain subject to the lock-up restriction described above for the remainder of the time period;

•

if the aggregate amount of securities of FGS held by either an underwriter or a related person do not exceed 1% of the securities being offered;

•

that is beneficially owned on a pro-rata basis by all equity owners of an investment fund, provided that no participating member manages or otherwise directs investments by the fund, and participating members in the aggregate do not own more than 10% of the equity in the fund; or

•

the exercise or conversion of any security, if all securities received remain subject to the lock-up restriction set forth above for the remainder of the time period.

In addition, in accordance with FINRA Rule 5110(f)(2)(G), the underwriters’ warrants may not contain certain terms.

No Public Market

Prior to this offering, there has not been a public market for our common stock and the public offering price for our common stock will be determined through negotiations between us and the representative. Among the factors to be considered in these negotiations will be prevailing market conditions, our financial information, market valuations of other companies that we and the representative believe to be comparable to us, estimates of our business potential, the present state of our development and other factors deemed relevant.

No assurance can be given that the initial public offering price will correspond to the price at which our common stock will trade in the public market subsequent to this offering or that an active trading market for our common stock will develop and continue after this offering.

Indemnification

Pursuant to the underwriting agreement, we have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, or to contribute to payments that the underwriters or such other indemnified parties may be required to make in respect of those liabilities.

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Lock-up Agreements

We have agreed not to (i) offer, pledge, issue, sell, contract to sell, purchase, contract to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any shares of our common stock or any securities convertible into or exercisable or exchangeable for our common stock; (ii) enter into any swap or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of shares of common stock; or (iii) file any registration statement with the SEC relating to the offering of any shares of our common stock or any securities convertible into or exercisable or exchangeable for shares of our common stock, without the prior written consent of Roth Capital Partners for a period of 180 days following the date of this prospectus (the “Lock-up Period”). This consent may be given at any time without public notice. These restrictions on future issuances are subject to exceptions for (i) the issuance of shares of our common stock sold in this offering, (ii) the issuance of shares of our common stock upon the exercise of outstanding options or warrants and the vesting of restricted stock awards or units, (iii) the issuance of employee stock options not exercisable during the Lock-up Period and the grant, redemption or forfeiture of restricted stock awards or restricted stock units pursuant to our equity incentive plans or as new employee inducement grants and (iv) the issuance of common stock or warrants to purchase common stock in connection with mergers or acquisitions of securities, businesses, property or other assets, joint ventures, strategic alliances, equipment leasing arrangements or debt financing.

In addition, FPS, RNS, TRF and each of our directors and executive officers has entered into a lock-up agreement with the underwriters. Under the lock-up agreements, the directors and executive officers may not, directly or indirectly, sell, offer to sell, contract to sell, or grant any option for the sale (including any short sale), grant any security interest in, pledge, hypothecate, hedge, establish an open “put equivalent position” ​(within the meaning of Rule 16a-1(h) under the Securities Exchange Act of 1934, as amended, or the Exchange Act), or otherwise dispose of, or enter into any transaction which is designed to or could be expected to result in the disposition of, any shares of our common stock or securities convertible into or exchangeable for shares of our common stock, or publicly announce any intention to do any of the foregoing, without the prior written consent of Roth Capital Partners, for a period of 180 days from the closing date of this offering. This consent may be given at any time without public notice. These restrictions on future dispositions by our directors and executive officers are subject to exceptions for (i) one or more bona fide gift transfers of securities to immediate family members who agree to be bound by these restrictions and (ii) transfers of securities to one or more trusts for bona fide estate planning purposes. Each officer and director shall be immediately and automatically released from all restrictions and obligations under the lock up agreement in the event that he or she ceases to be a director or officer of our company and has no further reporting obligations under Section 16 of the Exchange Act.

Electronic Distribution

This prospectus may be made available in electronic format on websites or through other online services maintained by the underwriters or by their affiliates. In those cases, prospective investors may view offering terms online and prospective investors may be allowed to place orders online. Other than this prospectus in electronic format, the information on the underwriters’ websites or our website and any information contained in any other websites maintained by the underwriters or by us is not part of this prospectus or the registration statement of which this prospectus forms a part, has not been approved and/or endorsed by us or the underwriter in its capacity as underwriter, and should not be relied upon by investors.

Price Stabilization, Short Positions and Penalty Bids

In connection with the offering the underwriters may engage in stabilizing transactions, over-allotment transactions, syndicate covering transactions and penalty bids in accordance with Regulation M under the Exchange Act:

•

Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum.

•

Over-allotment involves sales by the underwriters of shares in excess of the number of shares the underwriters are obligated to purchase, which creates a syndicate short position. The short

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position may be either a covered short position or a naked short position. In a covered short position, the number of shares over-allotted by the underwriters is not greater than the number of shares that they may purchase in the over-allotment option. In a naked short position, the number of shares involved is greater than the number of shares in the over-allotment option. The underwriters may close out any covered short position by either exercising their over-allotment option and/or purchasing shares in the open market.

•

Syndicate covering transactions involve purchases of the common stock in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of shares to close out the short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the over-allotment option. A naked short position occurs if the underwriters sell more shares than could be covered by the over-allotment option. This position can only be closed out by buying shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there could be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase in the offering.

•

Penalty bids permit the underwriters to reclaim a selling concession from a syndicate member when the common stock originally sold by the syndicate member is purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions.

These stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of our common stock or preventing or retarding a decline in the market price of the common stock. As a result, the price of our common stock may be higher than the price that might otherwise exist in the open market. These transactions may be discontinued at any time.

Neither we nor the underwriters make any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of our shares of common stock. In addition, neither we nor the underwriters make any representation that the underwriter will engage in these transactions or that any transaction, if commenced, will not be discontinued without notice.

Offer restrictions outside the U.S.

Other than in the United States, no action has been taken by us or the underwriter that would permit a public offering of the securities offered by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised to inform themselves about and to observe any restrictions relating to this offering and the distribution of this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.

Australia

This prospectus is not a disclosure document under Chapter 6D of the Australian Corporations Act, has not been lodged with the Australian Securities and Investments Commission and does not purport to include the information required of a disclosure document under Chapter 6D of the Australian Corporations Act. Accordingly, (i) the offer of the securities under this prospectus is only made to persons to whom it is lawful to offer the securities without disclosure under Chapter 6D of the Australian Corporations Act under one or more exemptions set out in section 708 of the Australian Corporations Act, (ii) this prospectus is made available in Australia only to those persons as set forth in clause (i) above, and (iii) the offeree must be sent a notice stating in substance that by accepting this offer, the offeree represents that the offeree is such a person as set forth in clause (i) above, and, unless permitted under the Australian Corporations Act, agrees

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not to sell or offer for sale within Australia any of the securities sold to the offeree within 12 months after its transfer to the offeree under this prospectus.

Canada

The securities may be sold in Canada only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the securities must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws. Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor. Pursuant to section 3A.3 of National Instrument 33-105 Underwriting Conflicts (NI 33-105), the underwriter is not required to comply with the disclosure requirements of NI33-105 regarding underwriter conflicts of interest in connection with this offering.

China

The information in this document does not constitute a public offer of the securities, whether by way of sale or subscription, in the People’s Republic of China (excluding, for purposes of this paragraph, Hong Kong Special Administrative Region, Macau Special Administrative Region and Taiwan). The securities may not be offered or sold directly or indirectly in the PRC to legal or natural persons other than directly to “qualified domestic institutional investors.”

European Economic Area – Belgium, Germany, Luxembourg and Netherlands

The information in this document has been prepared on the basis that all offers of securities will be made pursuant to an exemption under the Directive 2003/71/EC (“Prospectus Directive”), as implemented in Member States of the European Economic Area (each, a “Relevant Member State”), from the requirement to produce a prospectus for offers of securities.

An offer to the public of securities has not been made, and may not be made, in a Relevant Member State except pursuant to one of the following exemptions under the Prospectus Directive as implemented in that Relevant Member State:

•

to legal entities that are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities;

•

to any legal entity that has two or more of (i) an average of at least 250 employees during its last fiscal year; (ii) a total balance sheet of more than €43,000,000 (as shown on its last annual unconsolidated or consolidated financial statements) and (iii) an annual net turnover of more than €50,000,000 (as shown on its last annual unconsolidated or consolidated financial statements);

•

to fewer than 100 natural or legal persons (other than qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive) subject to obtaining our prior consent or any underwriter for any such offer; or

•

in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of securities shall require us to publish a prospectus pursuant to Article 3 of the Prospectus Directive.

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France

This document is not being distributed in the context of a public offering of financial securities (offre au public de titres financiers) in France within the meaning of Article L.411-1 of the French Monetary and Financial Code (Code monétaire et financier) and Articles 211-1 et seq. of the General Regulation of the French Autorité des marchés financiers (“AMF”). The securities have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in France.

This document and any other offering material relating to the securities have not been, and will not be, submitted to the AMF for approval in France and, accordingly, may not be distributed or caused to distributed, directly or indirectly, to the public in France.

Such offers, sales and distributions have been and shall only be made in France to (i) qualified investors (investisseurs qualifiés) acting for their own account, as defined in and in accordance with Articles L.411-2-II-2 and D.411-1 to D.411-3, D. 744-1, D.754-1 and D.764-1 of the French Monetary and Financial Code and any implementing regulation and/or (ii) a restricted number of non-qualified investors (cercle restreint d’investisseurs) acting for their own account, as defined in and in accordance with Articles L.411-2-II-2° and D.411-4, D.744-1, D.754-1 and D.764-1 of the French Monetary and Financial Code and any implementing regulation.

Pursuant to Article 211-3 of the General Regulation of the AMF, investors in France are informed that the securities cannot be distributed (directly or indirectly) to the public by the investors otherwise than in accordance with Articles L.411-1, L.411-2, L.412-1 and L.621-8 to L.621-8-3 of the French Monetary and Financial Code.

Ireland

The information in this document does not constitute a prospectus under any Irish laws or regulations and this document has not been filed with or approved by any Irish regulatory authority as the information has not been prepared in the context of a public offering of securities in Ireland within the meaning of the Irish Prospectus (Directive 2003/71/EC) Regulations 2005 (the “Prospectus Regulations”). The securities have not been offered or sold, and will not be offered, sold or delivered directly or indirectly in Ireland by way of a public offering, except to (i) qualified investors as defined in Regulation 2(l) of the Prospectus Regulations and (ii) fewer than 100 natural or legal persons who are not qualified investors.

Israel

The securities offered by this prospectus have not been approved or disapproved by the Israeli Securities Authority (the ISA), or ISA, nor have such securities been registered for sale in Israel. The shares may not be offered or sold, directly or indirectly, to the public in Israel, absent the publication of a prospectus. The ISA has not issued permits, approvals or licenses in connection with this offering or publishing the prospectus; nor has it authenticated the details included herein, confirmed their reliability or completeness, or rendered an opinion as to the quality of the securities being offered. Any resale in Israel, directly or indirectly, to the public of the securities offered by this prospectus is subject to restrictions on transferability and must be effected only in compliance with the Israeli securities laws and regulations.

Italy

The offering of the securities in the Republic of Italy has not been authorized by the Italian Securities and Exchange Commission (Commissione Nazionale per le Società e la Borsa, “CONSOB” pursuant to the Italian securities legislation and, accordingly, no offering material relating to the securities may be distributed in Italy and such securities may not be offered or sold in Italy in a public offer within the meaning of Article 1.1(t) of Legislative Decree No. 58 of 24 February 1998 (“Decree No. 58”), other than:

•

to Italian qualified investors, as defined in Article 100 of Decree no. 58 by reference to Article 34-ter of CONSOB Regulation no. 11971 of 14 May 1999 (“Regulation no. 1197l”) as amended (“Qualified Investors”); and

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•

in other circumstances that are exempt from the rules on public offer pursuant to Article 100 of Decree No. 58 and Article 34-ter of Regulation No. 11971 as amended.

Any offer, sale or delivery of the securities or distribution of any offer document relating to the securities in Italy (excluding placements where a Qualified Investor solicits an offer from the issuer) under the paragraphs above must be:

•

made by investment firms, banks or financial intermediaries permitted to conduct such activities in Italy in accordance with Legislative Decree No. 385 of 1 September 1993 (as amended), Decree No. 58, CONSOB Regulation No. 16190 of 29 October 2007 and any other applicable laws; and

•

in compliance with all relevant Italian securities, tax and exchange controls and any other applicable laws.

Any subsequent distribution of the securities in Italy must be made in compliance with the public offer and prospectus requirement rules provided under Decree No. 58 and the Regulation No. 11971 as amended, unless an exception from those rules applies. Failure to comply with such rules may result in the sale of such securities being declared null and void and in the liability of the entity transferring the securities for any damages suffered by the investors.

Japan

The securities have not been and will not be registered under Article 4, paragraph 1 of the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948), as amended (the “FIEL”) pursuant to an exemption from the registration requirements applicable to a private placement of securities to Qualified Institutional Investors (as defined in and in accordance with Article 2, paragraph 3 of the FIEL and the regulations promulgated thereunder). Accordingly, the securities may not be offered or sold, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan other than Qualified Institutional Investors. Any Qualified Institutional Investor who acquires securities may not resell them to any person in Japan that is not a Qualified Institutional Investor, and acquisition by any such person of securities is conditional upon the execution of an agreement to that effect.

New Zealand

The shares of common stock offered hereby have not been offered or sold, and will not be offered or sold, directly or indirectly in New Zealand and no offering materials or advertisements have been or will be distributed in relation to any offer of shares in New Zealand, in each case other than:

•

to persons whose principal business is the investment of money or who, in the course of and for the purposes of their business, habitually invest money;

•

to persons who in all the circumstances can properly be regarded as having been selected otherwise than as members of the public;

•

to persons who are each required to pay a minimum subscription price of at least NZ$500,000 for the shares before the allotment of those shares (disregarding any amounts payable, or paid, out of money lent by the issuer or any associated person of the issuer); or

•

in other circumstances where there is no contravention of the Securities Act 1978 of New Zealand (or any statutory modification or reenactment of, or statutory substitution for, the Securities Act 1978 of New Zealand).

Portugal

This document is not being distributed in the context of a public offer of financial securities (oferta pública de valores mobiliários) in Portugal, within the meaning of Article 109 of the Portuguese Securities Code (Código dos Valores Mobiliários). The securities have not been offered or sold and will not be offered

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or sold, directly or indirectly, to the public in Portugal. This document and any other offering material relating to the securities have not been, and will not be, submitted to the Portuguese Securities Market Commission (Comissăo do Mercado de Valores Mobiliários) for approval in Portugal and, accordingly, may not be distributed or caused to distributed, directly or indirectly, to the public in Portugal, other than under circumstances that are deemed not to qualify as a public offer under the Portuguese Securities Code. Such offers, sales and distributions of securities in Portugal are limited to persons who are “qualified investors” (as defined in the Portuguese Securities Code). Only such investors may receive this document and they may not distribute it or the information contained in it to any other person.

Sweden

This document has not been, and will not be, registered with or approved by Finansinspektionen (the Swedish Financial Supervisory Authority). Accordingly, this document may not be made available, nor may the securities be offered for sale in Sweden, other than under circumstances that are deemed not to require a prospectus under the Swedish Financial Instruments Trading Act (1991:980) (Sw. lag (1991:980) om handel med finansiella instrument). Any offering of securities in Sweden is limited to persons who are “qualified investors” ​(as defined in the Financial Instruments Trading Act). Only such investors may receive this document and they may not distribute it or the information contained in it to any other person.

Switzerland

The securities may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange (“SIX”) or on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any other offering material relating to the securities may be publicly distributed or otherwise made publicly available in Switzerland.

Neither this document nor any other offering material relating to the securities have been or will be filed with or approved by any Swiss regulatory authority. In particular, this document will not be filed with, and the offer of securities will not be supervised by, the Swiss Financial Market Supervisory Authority (FINMA).

This document is personal to the recipient only and not for general circulation in Switzerland.

United Arab Emirates

Neither this document nor the securities have been approved, disapproved or passed on in any way by the Central Bank of the United Arab Emirates or any other governmental authority in the United Arab Emirates, nor have we received authorization or licensing from the Central Bank of the United Arab Emirates or any other governmental authority in the United Arab Emirates to market or sell the securities within the United Arab Emirates. This document does not constitute and may not be used for the purpose of an offer or invitation. We may not render services relating to the securities within the United Arab Emirates, including the receipt of applications and/or the allotment or redemption of such shares.

No offer or invitation to subscribe for securities is valid or permitted in the Dubai International Financial Centre.

United Kingdom

Neither the information in this document nor any other document relating to the offer has been delivered for approval to the Financial Services Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services and Markets Act 2000, as amended (“FSMA”)) has been published or is intended to be published in respect of the securities. This document is issued on a confidential basis to “qualified investors” ​(within the meaning of section 86(7) of FSMA) in the United

96

Kingdom, and the securities may not be offered or sold in the United Kingdom by means of this document, any accompanying letter or any other document, except in circumstances which do not require the publication of a prospectus pursuant to section 86(1) FSMA. This document should not be distributed, published or reproduced, in whole or in part, nor may its contents be disclosed by recipients to any other person in the United Kingdom.

Any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) received in connection with the issue or sale of the securities has only been communicated or caused to be communicated and will only be communicated or caused to be communicated in the United Kingdom in circumstances in which section 21(1) of FSMA does not apply us.

In the United Kingdom, this document is being distributed only to, and is directed at, persons (i) who have professional experience in matters relating to investments falling within Article 19(5) (investment professionals) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 (“FPO”), (ii) who fall within the categories of persons referred to in Article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc.) of the FPO or (iii) to whom it may otherwise be lawfully communicated (together “relevant persons”). The investments to which this document relates are available only to, and any invitation, offer or agreement to purchase will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

97

LEGAL MATTERS

Rutan & Tucker, LLP, Irvine, California will pass upon the validity of the shares of our common stock being offered by this prospectus. K&L Gates LLP, Irvine, California is acting as counsel to the underwriters.

EXPERTS

The combined consolidated financial statements of FlexEnergy Inc. and Flex Leasing Power & Services, LLC as of December 31, 2020 and 2019 and for each of the years in the two-year period ended December 31, 2020 included in this prospectus have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing herein (which report expresses an unqualified opinion on the financial statements and includes an explanatory paragraph referring to the Company’s ability to continue as a going concern). Such financial statements have been so included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

The balance sheet of FlexEnergy Green Solutions, Inc. as of December 31, 2020 included in this prospectus has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing herein. Such balance sheet has been included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the shares of our common stock offered by this prospectus. This prospectus, which constitutes a part of the registration statement, does not contain all of the information set forth in the registration statement, some of which is contained in exhibits to the registration statement as permitted by the rules and regulations of the SEC. For further information with respect to us and our common stock, we refer you to the registration statement, including the exhibits filed as a part of the registration statement. Statements contained in this prospectus concerning the contents of any contract or any other document are not necessarily complete. If a contract or document has been filed as an exhibit to the registration statement, please see the copy of the contract or document that has been filed. Each statement in this prospectus relating to a contract or document filed as an exhibit is qualified in all respects by the filed exhibit. You may obtain copies of this information by mail from the Public Reference Section of the SEC, 100 F Street, N.E., Room 1580, Washington, D.C. 20549, at prescribed rates. You may obtain information on the operation of the public reference rooms by calling the SEC at 1-800-SEC-0330. The SEC also maintains a website that contains reports, proxy statements and other information about issuers, like us, that file electronically with the SEC. The address of that website is www.sec.gov.

As a result of this offering, we will become subject to the information and reporting requirements of the Exchange Act and, in accordance with this law, will file periodic reports, proxy statements and other information with the SEC. These periodic reports, proxy statements and other information will be available for inspection and copying at the public reference facilities and website of the SEC referred to above. We also maintain a website at www.flexenergy.com where, upon completion of this offering, you may access these materials free of charge as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. The information on or that can be accessed through our website is not a part of this prospectus and the inclusion of our website address in this prospectus is an inactive textual reference only.

98

INDEX TO FINANCIAL STATEMENTS

Audited Combined Consolidated Financial Statements
Fiscal Years Ended December 31, 2020 and 2019

Balance Sheets of FlexEnergy Green Solutions, Inc.	​
Report of Independent Registered Public Accounting Firm	F-2
Balance Sheets	F-3
Notes to Balance Sheets	F-4
Combined Consolidated Financial Statements of FlexEnergy, Inc. And Flex Leasing Power & Services, LLC	​
Report of Independent Registered Public Accounting Firm	F-5
Combined Consolidated Balance Sheets	F-6
Combined Consolidated Statements of Operations and Comprehensive Loss	F-7
Combined Consolidated Statements of Stockholder’s Equity	F-8
Combined Consolidated Statements of Cash Flows	F-9
Notes to Combined Consolidated Financial Statements	F-10

Unaudited Condensed Combined Consolidated Financial Statements
Six Months Ended June 30, 2021 and June 30, 2020

Condensed Combined Consolidated Financial Statements of FlexEnergy, Inc. And Flex Leasing Power & Services, LLC	​
Condensed Combined Consolidated Balance Sheets (unaudited)	F-27
Condensed Combined Consolidated Statements of Operations and Comprehensive Loss (unaudited)	F-28
Condensed Combined Consolidated Statements of Stockholder’s Equity (unaudited)	F-29
Condensed Combined Consolidated Statements of Cash Flows (unaudited)	F-30
Notes to Condensed Combined Consolidated Financial Statements (unaudited)	F-31

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the stockholder and the Board of Directors of FlexEnergy Green Solutions, Inc.

Opinion on the Financial Statements

We have audited the accompanying combined consolidated balance sheet of FlexEnergy Green Solutions, Inc. (the “Company”) as of December 31, 2020, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Deloitte & Touche LLP

Hartford, CT
June 4, 2021

We have served as the Company’s auditor since 2020.

F-2

FLEXENERGY GREEN SOLUTIONS, INC.

CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)

​	June 30, 2021			December 31, 2020
​	(unaudited)			​	​	​
ASSETS	​	​	​	​	​	​
CURRENT ASSETS	​	​	​	​	​	​
Cash	​	$	0	​	$	0
TOTAL CURRENT ASSETS	​	​	0	​	​	0
TOTAL ASSETS	​	$	0	​	$	0
LIABILITIES AND STOCKHOLDER’S EQUITY	​	​	​	​	​	​
TOTAL LIABILITIES	​	$	0	​	$	0
STOCKHOLDER’S EQUITY	​	​	​	​	​	​
Retained earnings	​	$	0	​	$	0
TOTAL STOCKHOLDER’S EQUITY	​	​	0	​	​	0
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY	​	$	0	​	$	0

See accompanying notes to the Consolidated Balance Sheet.

F-3

FLEXENERGY GREEN SOLUTIONS, INC

NOTES TO CONSOLIDATED BALANCE SHEETS

1.   Organization and Summary of Significant Accounting Policies

Organization

FlexEnergy Green Solutions, Inc. (the “Company”) is a Delaware corporation formed on December 31, 2020 that will not have any operating activity until the contribution of equity interests from FlexEnergy Power Solutions, LLC (“FPS”) of FlexEnergy, Inc and Flex Leasing Power & Service, LLC, known collectively as the Contribution Transaction. Accordingly, we believe that a discussion of the results of FlexEnergy Green Solutions, Inc would not be meaningful for the periods covered by these financial statements prior to the Contribution Transaction.

The Company and its subsidiaries are an energy focused technology company that designs, manufactures, sells and leases cost-effective energy solutions that lower its customers’ environmental footprint, often by making useable energy from sources of fuel or heat otherwise overlooked or wasted. The Company’s business consists of leasing and service of the Company’s gas-powered Flex Turbines supported by a vertically integrated original equipment manufacturing (“OEM”) with some direct sales of manufactured products. Leasing and service allows the Company to monetize emerging clean technologies via its Flex Turbine and Flex Heat Recovery products, with consistent revenues and cash flow.

The Company intends to file a Registration Statement on Form S-1 with the Securities and Exchange Commission with respect to an initial public offering of its stock.

2.   Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts have been eliminated upon consolidation. Subsequent events have been evaluated through the date the financial statements were issued.

The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) as contained within the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC).

F-4

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the stockholder and the Board of Directors of FlexEnergy Green Solutions, Inc., FlexEnergy, Inc. and the Board of Managers of Flex Leasing Power & Service, LLC

Opinion on the Financial Statements

We have audited the accompanying combined consolidated balance sheets of FlexEnergy, Inc. and Flex Leasing Power & Service, LLC (the “Company”) as of December 31, 2020 and 2019, the related combined consolidated statements of operations and comprehensive loss, stockholder’s equity and cash flows, for each of the two years in the period ended December 31, 2020, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has suffered recurring losses and sustained negative cash flows from operations that raise substantial doubt about its ability to continue as a going concern. Management’s plan in regard to these matters is also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Deloitte & Touche LLP

Hartford, CT
June 4, 2021

We have served as the Company’s auditor since 2020.

F-5

FLEXENERGY, INC. AND FLEX LEASING POWER & SERVICES, LLC AND SUBSIDIARIES

COMBINED CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2020 AND 2019
(DOLLARS IN THOUSANDS)

​	December 31, 2020			December 31, 2019
Assets	​	​	​	​	​	​
Current assets	​	​	​	​	​	​
Cash	​	$	1,702	​	$	2,000
Accounts receivable, net of allowance of $45 and $60, respectively	​	​	2,416	​	​	2,940
Inventories, net	​	​	13,659	​	​	13,571
Prepaid expenses and other current assets	​	​	497	​	​	475
Total current assets	​	​	18,274	​	​	18,986
Long-term assets	​	​	​	​	​	​
Property and equipment, net	​	​	36,506	​	​	37,105
Deferred financing costs, net of amortization	​	​	630	​	​	792
Other non-current assets	​	​	166	​	​	98
Intangible assets, net	​	​	336	​	​	504
Total long-term assets	​	$	37,638	​	$	38,499
Total assets	​	$	55,912	​	$	57,485
Liabilities and stockholder’s equity	​	​	​	​	​	​
Current liabilities	​	​	​	​	​	​
Accounts payable	​	$	1,328	​	$	2,775
Accrued expenses	​	​	2,003	​	​	2,336
Deferred revenues	​	​	1,849	​	​	1,794
Current portion of notes payable	​	​	1,300	​	​	—
Current portion of capital lease obligations	​	​	148	​	​	174
Other current liabilities	​	​	214	​	​	403
Total current liabilities	​	​	6,842	​	​	7,482
Long-term liabilities	​	​	​	​	​	​
Capital leases, net of current portion	​	​	173	​	​	301
Line of credit	​	​	26,658	​	​	22,274
Notes payable, net of current portion	​	​	1,052	​	​	—
Other non-current liabilities	​	​	492	​	​	422
Total long-term liabilities	​	$	28,375	​	$	22,997
Total liabilities	​	$	35,217	​	$	30,479
Commitments and contingencies (see note 13)	​	​	​	​	​	​
Stockholder’s equity	​	​	​	​	​	​
Net parent investment	​	$	152,273	​	$	151,473
Accumulated other comprehensive income	​	​	543	​	​	100
Accumulated deficit	​	​	(132,121)	​	​	(124,567)
Total stockholder’s equity	​	$	20,695	​	$	27,006
Total liabilities and stockholder’s equity	​	$	55,912	​	$	57,485

The accompanying notes are an integral part of these Combined Consolidated Financial Statements.

F-6

FLEXENERGY, INC. AND FLEX LEASING POWER & SERVICES, LLC AND SUBSIDIARIES

COMBINED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019
(DOLLARS IN THOUSANDS)

​	Year Ended December 31,
​	2020			2019
Revenue	​	​	​	​	​	​
Turbine leasing fleet	​	$	17,838	​	$	16,833
Turbine service on sold product	​	​	2,213	​	​	2,824
Manufactured product	​	​	3,276	​	​	5,716
Total revenue	​	​	23,327	​	​	25,373
Cost of revenue	​	​	​	​	​	​
Turbine leasing fleet (excluding depreciation of fleet turbines)	​	​	4,884	​	​	5,442
Turbine service on sold product	​	​	1,691	​	​	2,797
Manufactured product	​	​	5,789	​	​	9,531
Depreciation of fleet turbines	​	​	5,007	​	​	4,713
Total cost of revenue	​	​	17,371	​	​	22,483
Operating expenses	​	​	​	​	​	​
Selling, general and administrative	​	​	11,826	​	​	12,400
Research and development	​	​	120	​	​	237
Total operating expenses	​	​	11,946	​	​	12,637
Operating loss	​	​	(5,990)	​	​	(9,747)
Other income (expense)	​	​	​	​	​	​
Interest expense	​	​	(1,114)	​	​	(992)
Other income (expense), net	​	​	31	​	​	(159)
Total other income (expense), net	​	​	(1,083)	​	​	(1,151)
Loss before income taxes	​	​	(7,073)	​	​	(10,898)
Income tax expense	​	​	(31)	​	​	(7)
Net loss	​	$	(7,104)	​	$	(10,905)
Other comprehensive loss	​	​	​	​	​	​
Foreign currency translation adjustments	​	​	443	​	​	185
Total other comprehensive loss	​	​	443	​	​	185
Comprehensive loss	​	$	(6,661)	​	$	(10,720)

The accompanying notes are an integral part of these Combined Consolidated Financial Statements.

F-7

FLEXENERGY, INC. AND FLEX LEASING POWER & SERVICES, LLC AND SUBSIDIARIES

COMBINED CONSOLIDATED STATEMENTS OF STOCKHOLDER’S EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019
(DOLLARS IN THOUSANDS)

​

Net Parent Investment

Accumulated Other Comprehensive Income (Loss)

Accumulated Deficit

Total Stockholder’s Equity

Balance at January 1, 2019

​

$

143,673

​

$

(85)

​

$

(103,662)

​

$

39,926

Contributions

​

​

7,800

​

​

—

​

​

—

​

​

7,800

Distributions

​

​

—

​

​

—

​

​

(10,000)

​

​

(10,000)

Foreign currency translation adjustments

​

​

—

​

​

185

​

​

—

​

​

185

Net loss

​

​

—

​

​

—

​

​

(10,905)

​

​

(10,905)

Balance at December 31, 2019

​

$

151,473

​

$

100

​

$

(124,567)

​

$

27,006

Contributions

​

​

800

​

​

—

​

​

—

​

​

800

Distributions

​

​

—

​

​

—

​

​

(450)

​

​

(450)

Foreign currency translation adjustments

​

​

—

​

​

443

​

​

—

​

​

443

Net loss

​

​

—

​

​

—

​

​

(7,104)

​

​

(7,104)

Balance at December 31, 2020

​

$

152,273

​

$

543

​

$

(132,121)

​

$

20,695

The accompanying notes are an integral part of these Combined Consolidated Financial Statements.

F-8

FLEXENERGY, INC. AND FLEX LEASING POWER & SERVICES, LLC AND SUBSIDIARIES

COMBINED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019
(DOLLARS IN THOUSANDS)

​	Year Ended December 31,
​	2020			2019
Cash Flows from Operating Activities	​	​	​	​	​	​
Net income (loss)	​	$	(7,104)	​	$	(10,905)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:	​	​	​	​	​	​
Depreciation and amortization of property and equipment	​	​	6,716	​	​	5,892
Amortization of deferred financing costs	​	​	189	​	​	134
Amortization of intangible assets	​	​	168	​	​	168
Bad debt expense	​	​	300	​	​	36
Loss / (gain) on disposal of property and equipment	​	​	(58)	​	​	21
Changes in operating assets and liabilities:	​	​	​	​	​	​
Accounts receivable	​	​	224	​	​	(670)
Inventories	​	​	(4,804)	​	​	(9,952)
Prepaid expenses and other current assets	​	​	(53)	​	​	(1,668)
Other non-current assets	​	​	(68)	​	​	(36)
Accounts payable	​	​	(1,447)	​	​	(359)
Accrued expenses	​	​	(306)	​	​	113
Deferred revenues	​	​	55	​	​	2,007
Other current liabilities	​	​	(157)	​	​	301
Other non-current liabilities	​	​	70	​	​	70
Net Cash Used in Operating Activities	​	$	(6,275)	​	$	(14,848)
Cash Flows from Investing Activities	​	​	​	​	​	​
Purchases of property and equipment	​	​	(1,120)	​	$	(3,269)
Proceeds from disposal of property and equipment	​	​	43	​	​	38
Net Cash Used in Investing Activities	​	$	(1,077)	​	$	(3,231)
Cash Flows from Financing Activities	​	​	​	​	​	​
Distribution to parent	​	$	(450)	​	$	(10,000)
Contribution from parent	​	​	800	​	​	7,800
Proceeds from notes payable	​	​	2,352	​	​	—
Advances on line of credit	​	​	4,330	​	​	22,274
Deferred financing costs	​	​	—	​	​	(926)
Payments on capital leases	​	​	(143)	​	​	(325)
Net Cash (Used in) Provided by Financing Activities	​	$	6,889	​	$	18,823
Effects of Exchange Rate Changes on Cash	​	$	165	​	$	81
Net Increase / (Decrease) in Cash	​	$	(298)	​	$	825
Cash – Beginning	​	$	2,000	​	$	1,175
Cash – Ending	​	$	1,702	​	$	2,000
Supplemental Disclosure	​	​	​	​	​	​
Interest paid in cash	​	$	997	​	$	852
Taxes paid in cash	​	​	12	​	​	9
Non-Cash Investing Activities	​	​	​	​	​	​
Net transfers from inventory to property and equipment	​	$	4,717	​	$	8,231
Property and equipment acquired through capital leases	​	​	—	​	​	489

The accompanying notes are an integral part of these Combined Consolidated Financial Statements.

F-9

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLARS IN THOUSANDS)

NOTE 1 — NATURE OF OPERATIONS

The combined consolidated financial statements include the combined accounts of FlexEnergy, Inc. (“FEI”) and Flex Leasing Power & Service LLC (“FLPS”), collectively referred to as “the Company”. The Company is headquartered in Portsmouth, New Hampshire with field offices in Colorado, North Dakota, Texas and Canada.

On January 1, 2016, FlexEnergy Power Solutions, LLC (“FPS”) was formed to hold FEI and FLPS. FEI manufactures the GT333 kilowatt turbine, the larger GT1300 kilowatt turbine (“Flex Turbine”) and stand-alone heat recovery products (“Flex Heat Recovery products”). FLPS provides a rental and leasing offering of the turbine generator, particularly in the North America oilfield market. Flex Leasing Power and Services, ULC (“FLPS ULC”), which is wholly-owned by Flex Power Co., is a Canadian entity that supports expansion into the Canadian market. Flex Power Co. is a wholly-owned subsidiary of FLPS.

On December 31, 2020, FPS formed FlexEnergy Green Solutions, Inc. (“FGS”) to be its wholly-owned subsidiary. FPS intends to contribute all of its assets, which consist solely of 100% equity interests in FEI and FLPS, to FGS in exchange for 100% of the equity interests in FGS, which will result in FGS becoming a wholly-owned subsidiary of FPS, and FEI and FLPS becoming wholly-owned subsidiaries of FGS.

The Company is an energy focused technology company that designs, manufactures, sells and leases cost-effective energy solutions that lower its customers’ environmental footprint, often by making useable energy from sources of fuel or heat otherwise overlooked or wasted. The Company’s business consists of leasing and service of the Company’s gas-powered Flex Turbines supported by a vertically integrated original equipment manufacturing (“OEM”) with some direct sales of manufactured products. Leasing and service allows the Company to monetize emerging clean technologies via its Flex Turbine and Flex Heat Recovery products, with consistent revenues and cash flow.

The Company’s Flex Turbines offer a reliable source for distributed or grid connected electrical power, capable of being fired by a wide variety of gaseous fuels from waste gas from landfills and natural gas flaring to higher BTU fuels such as propane and synthetic gas. Leasing and sales of Flex Turbines presently represent the bulk of the Company’s operations and revenues. Flex Turbines provide the Company’s customers with solutions to gain independence over their electricity generation and minimize overall reliance on the grid. In addition, the Company’s Flex Heat Recovery products are integral to promising emerging power sources, such as fuel cells for electrical power.

The Company serves a diverse range of customers in the global oil and gas (“O&G”),transportation, power, and commercial and industrial (“C&I”) end markets. The Company’s primary focus is on base load, distributed, electric generation using Flex Turbines, with the technology base to expand in additional untapped end-markets.

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accompanying combined consolidated financial statements include the accounts of FEI and its wholly owned subsidiaries and FLPS and its wholly owned subsidiaries. All intercompany transactions and accounts have been eliminated in consolidation. The Company’s combined consolidated financial statements were prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and include the assets, liabilities, revenues and expenses of all controlled subsidiaries.

F-10

USE OF ESTIMATES

The preparation of the Company’s combined consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the combined consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

Significant items subject to such estimates and assumptions include accounting for the accounts receivable allowance, the valuation of long-lived assets including intangible assets with finite lives, useful lives of long-lived assets such as property, equipment and intangible assets, valuation allowances for deferred income tax assets, inventory obsolescence, and exposure related to warranty and other contingent liabilities. Actual results could differ from those estimates.

SEGMENT INFORMATION

The Company is considered to be a single reporting segment. The Company’s chief operating decision makers (“CODM”), the Chief Executive Officer, the Chief Financial Officer and the Chief Commercial Officer, review financial information presented on a combined consolidated basis for purposes of allocating resources and evaluating financial performance. The business activities of this reporting segment are the engineering, production, sales and leasing of its proprietary energy efficient Flex Turbines and Flex Heat Recovery products, and related parts and service.

The Company conducts its business through various offices and facilities located throughout the U.S. and Canada. All the Company’s revenues were to external customers in 2020 and 2019. Of the sales in 2020, $19,960 were sales to the U.S., $2,874 to Canada, and $493 to non-North America countries. Long-lived assets held in the U.S. and Canada at December 31, 2020 were $28,203 and $9,435 respectively. Of the sales in 2019, $23,822 were sales to the U.S., $1,466 to Canada, and $85 to non-North America countries. Long-lived assets held in the U.S. and Canada at December 31, 2019 were $33,435 and $5,064, respectively.

ACCOUNTS RECEIVABLE

Accounts receivable are recorded at the invoiced amount and do not bear interest. Accounts receivable are stated at the amount the Company expects to collect from balances outstanding at year end and represent amounts billed to customers and not yet collected, and are recorded when the right to consideration becomes unconditional. Based on the Company’s evaluation of uncollected accounts receivable at the end of each year, bad debts are provided for using an allowance for doubtful accounts method. The evaluation considers historical trends to identify receivables that the Company believes may be uncollectible. The allowance for bad debt was $45 and $60 as of December 31, 2020 and 2019, respectively.

INVENTORY

Inventory at FEI consists primarily of parts, components, and work in progress for the manufacture and repair of the Flex Turbine and Flex Heat Recovery products. Inventory at FLPS consists primarily of parts, components and turbines that are currently ready for or are being prepared for first time use. Once a turbine has been placed into service, the inventory is transferred to property and equipment. Inventoried parts and components are mainly used for commissioning and/or repairing the turbines. Inventory is valued at the lower of cost or net realizable value and is determined on a the first in, first out (“FIFO”) cost method.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets ranging from three to ten years. Expenditures for repairs and maintenance are charged to expense as incurred, whereas major betterments are capitalized as additions to property and equipment.

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The estimated useful lives used in computing depreciation of property and equipment are as follows:

Asset	Life
Turbines and other equipment	10 years
Leasehold improvements	Shorter of lease term or 10 years
Machinery and equipment	3-7 years
Furniture and fixtures	7 years
Fieldwork equipment	5 years
Computer equipment and software	3-5 years
Vehicles	4-5 years

Leasehold improvements are amortized using the straight-line method over the lesser of the term of the lease or the estimated useful life of the asset. Depreciation of assets leased to customers in the amount of $5,007 and $4,713, for the years ended December 31, 2020 and 2019, respectively is recorded to cost of revenue. All other depreciation, amounting to $1,709 and $1,179, for the years ended December 31, 2020 and 2019, respectively, is recorded to operating expenses within the accompanying combined consolidated statements of operations and comprehensive loss. The Company’s depreciation and amortization expense of property and equipment were $6,716 and $5,892 for the years ended December 31, 2020 and 2019, respectively.

INTANGIBLE ASSETS

Intangible assets, consisting of acquired patents, are presented at cost, net of accumulated amortization. Intangible assets are amortized over their estimated useful life of ten years on a straight-line basis. The Company continues to invest in its intellectual property portfolio and is actively filing for patent protection for its technology in both the U.S. and abroad. The costs, including legal, associated with compiling and filing patent applications are charged to selling, general, and administrative expenses as incurred.

IMPAIRMENT OF LONG-LIVED ASSETS

Long-lived assets such as property and equipment and intangible assets with finite lives are tested for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models and third-party independent appraisals, as considered necessary. The Company believes that there were no events or changes in circumstances that would trigger an impairment analysis for the years ended December 31, 2020 and 2019.

REVENUE RECOGNITION

The Company’s revenue consists of turbine leasing fleet revenue, the sales of manufactured Flex Turbine and Flex Heat Recovery products, and service revenues on sold product. Revenue is recognized upon transfer of control of the promised goods or the Company’s performance of the services to its customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services.

The Company excludes sales tax collected from customers from revenue in its combined consolidated statements of operations and comprehensive loss.

Significant Judgments — Contracts with Multiple Performance Obligations

A performance obligation is a promise in a contract with a customer to transfer products or services that are distinct. Determining whether products and services are distinct performance obligations that

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should be accounted for separately or combined as one unit of accounting may require significant judgment. The Company enters into contracts with its customers to manufacture Flex Turbines and Flex Heat Recovery products and provides certain products, parts, and accessories, collectively referred to as “products.” The Company will also provide services associated with these products and parts including commissioning and maintenance services, collectively referred to as “services.” These services are distinct and separate contractual arrangements.

Contracts may contain multiple products within the same agreement. However, each product is distinct as they are sold separately and revenue is only recorded when the individual product is completed and control of the product is transferred. Service contracts, and services noted within such contracts, are similar in that each service is distinct. Each service is explicitly stated in the contracts where the Company provides maintenance repairs and labor services in exchange for a fixed-rate per month per turbine. Revenue from maintenance service contracts is recognized over the term of the contract at the agreed upon monthly service fee as defined in the contract, while commissioning revenue is recognized at the agreed upon commissioning fee amount as defined within the contract once the Flex Turbine is installed and begins generating energy for the customer. The maintenance service contracts and commissioning revenue are each considered distinct and separated from other obligations in the contract since (i) the customer is able to benefit from the good or service separately or together with other resources made available through the arrangement and (ii) the services are each separately identifiable from the others provided in the contract.

Once distinct performance obligations are identified within a contract, the Company allocates the transaction price to each performance obligation on a relative standalone selling price (“SSP”) basis. The SSP is the price at which the Company would sell a promised product or service separately to a customer.

Turbine Leasing Fleet

Turbine leasing fleet revenue consists of revenue generated on the Company’s owned fleet of Flex Turbines and owned ancillary field equipment that supports the turbines fleet’s generation in the field. It primarily consists of recurring monthly revenue associated with executed rental agreements (“Generator Rental Agreements”) where the Company is the lessor to the third-party customers. Leases can cover multiple Flex Turbine units and explicitly assert the monthly lease payment due over the length of the agreement (typically 12-36 months). Revenue is recognized over time over the duration of the lease, which represents the Company’s obligation to the customer. All current leases are classified as operating leases. Additionally, there are no “rent increases” contained within any of the Company’s current leasing agreements and lease payments are due to the Company in exchange for the use of the Flex Turbine generator and coverage for routine maintenance and monitoring. These agreements typically include preventative and regular maintenance costs embedded within the lease payment (“executory costs”) over the term of the agreement. Such executory costs are considered non-lease components with revenue recognized on a straight-line basis. Lease and non-lease revenue is distinct between the fee to use Flex Turbine and the amount that covers continuous remote monitoring and maintenance. Turbine leasing fleet revenue also includes (i) commissioning of leased units (ii) one-off billings to customers for repairs of leased Flex Turbine units outside the scope of the rental agreement and (iii) the rental of owned ancillary field assets such as standby diesel generators and automatic transfer switches.

Manufactured Product Sales

The Company’s standard terms of sales of new Flex Turbines and Flex Heat Recovery products to channel partners and direct end-users include transfer of title, care, custody and control of the goods at the point of shipment, payment terms ranging from full payment in advance of shipment to payment in 90 days, no right of return or exchange, and no post-shipment performance obligations except for standard warranties provided on the products and parts sold. The Company offers standard assurance type warranty that its products and parts sold will operate free of material defects and function for a period of the greater of 18 months from delivery or 12 months from commissioning of the unit. Once the standard warranty expires, customers have the option to purchase service/maintenance coverage at a fixed rate. Revenue is recognized upon transfer of control of the promised goods to the Company’s customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods. Title and risk of loss or

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damage to products passes to the purchaser of newly manufactured Flex Turbines and Flex Heat Recovery products upon production test completion and tender of delivery to the carrier at the Company’s U.S. manufacturing facility. The Company recognizes revenue in certain circumstances before product delivery occurs (commonly referred to as bill-and-hold transactions). Revenue from bill-and-hold transactions is recognized when all specific requirements for transfer of control under a bill-and-hold arrangement have been met which include, among other things, a request from the customer that the product be held for future delivery. For these bill-and-hold arrangements, the associated product inventory is identified separately as belonging to the customer and is ready for physical transfer.

Service on Sold Product

Service performed by the Company consists primarily of commissioning and maintenance services on units sold to third-party customers. Customers with purchased units in operation that are out of warranty will contact the Company for replacement parts on their turbine generators such as a replacement engine. Once the customer agrees to the pricing and terms for the service order and places a purchase order, the Company will deliver the parts to the customer, recognizing revenue once the performance obligation is met.

Contracts for services are initiated through Service Request Orders (“SROs”), related to a combination of parts and labor. Like parts only, the Company will provide the customer with a quote for the service work and once accepted, will work to satisfy the transaction’s performance obligations and recognized revenue once parts are shipped and/or services have been rendered.

Service revenue also relates to commissioning Flex Turbines sold to third-party customers at the customers’ sites. This is a separate performance obligation from the purchase order to manufacture Flex Turbines. Typically, commissioning of manufactured units takes place within two months of tender for shipment, but can be delayed for up to several months based on when the customer submits its request for commissioning of the units and the commissioning takes place.

Lastly, the Company also provides maintenance service contracts on the existing installed base of Flex Turbines sold to its third-party customers. The maintenance service contracts are agreements to perform certain services to maintain a product for a specified period of time. Service revenue derived from maintenance service contracts is explicitly for the months covered and recognized over time on a straight-line basis over the length of the contract period, which represents the Company’s obligation to the customer.

Practical Expedient

The Company applies a practical expedient to expense costs as incurred for costs to obtain a contract when the amortization period would have been one year or less. These costs are recorded within selling, general and administrative expenses.

INCOME TAXES

FLPS is taxed as a disregarded entity for U.S. federal tax purposes, and the operations are not subject to U.S. federal income tax other than the operations that are conducted through taxable subsidiaries. FLPS may incur income taxes that are subject to withholding requirements related to certain of operations within Canada and other foreign countries in which the Company operates. FEI and Flex Power Co. income taxes are accounted for utilizing the asset and liability approach. Under this method, deferred tax assets and liabilities are recognized for the anticipated future tax consequences attributable to differences between the combined consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred amounts are measured using enacted tax rates expected to apply to taxable income in the year those temporary differences are expected to be recovered or settled.

In assessing the realizability of the deferred income tax assets, including net operating loss and state tax credit carryforwards, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon evaluating both positive and negative evidence in making this assessment, of which

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management determined the need for a valuation allowance on all net deferred tax assets. Further, the Company recognizes interest expense (income) and penalties on uncertain tax positions and income tax deficiencies (refunds) in income tax expense in the accompanying combined consolidated statements of operations and comprehensive loss.

In January 2018, the FASB released guidance on the accounting for tax on the global intangible low-taxed income (“GILTI”) provisions of the Act. The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. The guidance indicates that either accounting for deferred taxes related to GILTI inclusions or to treat any taxes on GILTI inclusions as period costs are both acceptable methods subject to an accounting policy election. As of December 31, 2018, the Company elected to account for GILTI as a period cost in the year the tax is incurred.

FOREIGN CURRENCY TRANSACTIONS

The financial statements of an international subsidiary, FLPS ULC, are translated into the functional reporting currency of the Company (USD) using the exchange rate in effect at each balance sheet date for assets and liabilities. Revenues and expenses were translated to USD at the average exchange rate for the period. Resulting currency translation adjustments are recorded as a component of accumulated other comprehensive loss through the cumulative translation adjustment (“CTA”) account. Foreign exchange transaction gains and losses are recorded in the combined consolidated statements of operations and comprehensive loss in other income (expense), net.

The Company cannot guarantee that the current exchange rate will remain steady; therefore, there is a possibility that the Company could post the same amount of profit for comparable periods and because of the fluctuating exchange rate, actually post higher or lower profit depending on the exchange rate of Canadian Dollar (“CAD”) converted to USD on that date. The exchange rate could fluctuate depending on changes in political and economic environments without notice.

PRODUCT WARRANTY

The Company provides for the estimated cost of product warranties at the time revenue is recognized. Warranty terms are for the greater of 18 months from delivery or 12 months from commissioning of the unit, to repair or replace any defective component in equipment supplied by the Company. The provision for product warranty is based primarily on historical rates, sales history and other considerations. The provision for product warranty was $90 and $276 for 2020 and 2019, respectively, and is reported within the classification of manufactured product cost of revenue in the accompanying combined consolidated statements of operations and comprehensive loss. Accrued product warranties were $526 and $644 for the years ended December 31, 2020 and 2019, respectively, and are reported within accrued expenses in the accompanying combined consolidated balance sheet.

RESEARCH AND DEVELOPMENT

Research and development costs are expensed as incurred and reported in research and development costs in the accompanying combined consolidated statements of operations and comprehensive loss. Costs were $120 and $237 for the years ended December 31, 2020 and 2019, respectively.

RECENT ACCOUNTING PRONOUNCEMENTS

Emerging growth company

The Company is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies.

Effective January 1, 2019, the Company adopted Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”). The standard applies to all contracts with customers,

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except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. The Company adopted the new revenue standard using the modified retrospective method in accordance with ASC 606 on January 1, 2019.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02” or “Topic 842”). The purpose of ASU 2016-02 is to provide financial statement users a better understanding of the amount, timing, and uncertainty of cash flows arising from leases. The adoption of ASU 2016-02 will result in the recognition of a right-of-use asset and a lease liability for all leases. New disclosure requirements include qualitative and quantitative information about the amounts recorded in the financial statements. In September 2017, the FASB issued ASU 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842), which provides additional implementation guidance on the previously issued ASU 2016-02 Leases (Topic 842). ASU 2016-02 requires a lessee to recognize assets and liabilities on the balance sheet for all leases with lease terms greater than 12 months. ASU 2016-02 requires a modified retrospective transition by means of a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year in which the guidance is effective with the option to elect certain practical expedients and accounting policy elections. ASU 2016-02 will be effective for the Company for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. ASU 2020-05 extended the adoption to fiscal years beginning after December 15, 2021, with interim periods within fiscal years beginning after December 15, 2022. The Company is currently evaluating the impact of the adoption of this update on its combined consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) (“ASU 2016-13” or “Topic 326”), which requires that all financial assets measured at amortized cost to be evaluated for current expected credit losses. Under the new guidance, immediate recognition of credit losses expected over the life of a financial instrument is required. The pronouncement eliminates the incurred credit loss impairment methodology and replaces it with an expected credit loss concept based on historical experience, current conditions, and reasonable and supportable forecasts. Early adoption is permitted. Topic 326 requires a modified retrospective approach by recording a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. ASU 2016-13 will be effective for the Company for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of this update on its combined consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” ASU 2019-12 simplifies the accounting for income taxes by eliminating certain exceptions related to intraperiod tax allocation, interim period income tax calculation methodology, and the recognition of deferred tax liabilities for outside basis differences. It also simplifies certain aspects of accounting for franchise taxes and clarifies the accounting for transactions that results in a step-up in the tax basis of goodwill. ASU 2019-12 is effective for us the first quarter of fiscal 2021. There were no significant income tax implications to the Company’s tax provision as a result of the change in guidance.

In March of 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASC 848, Reference Rate Reform) (“ASU 2020-04” or “Topic 848”) which provides guidance for contract modifications and certain hedging relationships associated with the transition from reference rates that are expected to be discontinued. The guidance provides optional expedients and exceptions for applying GAAP to contracts or other transactions affected by reference rate reform if certain criteria are met. The guidance was issued on March 12, 2020 and may be applied prospectively through December 31, 2022. The Company is evaluating applicable contracts and transactions to determine whether to elect the optional guidance. The adoption of this standard is not expected to have a material impact on the Company’s combined consolidated financial statements.

NOTE 3  — GOING CONCERN

The accompanying combined consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company’s financial position and operating results raise substantial doubt about its ability to continue as a going concern within one year after the date of the

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combined consolidated financial statements are issued. The Company has sustained net losses of $7,104 and $10,905 for the years ended December 31, 2020 and 2019, respectively, has sustained negative cash flow from operations of $6,275 and $14,848 for the years ended December 31, 2020 and 2019, respectively and has an accumulated deficit of $132,121 as of December 31, 2020. The ability of the Company to continue as a going concern is dependent upon (i) expanding operations, (ii) obtaining additional capital and (iii) reducing operating expenses and/or selling existing turbine assets should this be required to preserve liquidity. Management’s plan in this regard is to implement the Company’s business plan and to secure additional funds through equity or debt financing. There can be no assurance that such alternate financing, if available, can be obtained on acceptable terms. The combined consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 4 — REVENUE RECOGNITION

Disaggregation of Revenue

The Company disaggregates revenue from contracts with customers by product type. The Company believes that this aggregates the payor types by nature, amount, timing, and uncertainty of its revenue streams. The following table summarizes the Company’s disaggregated revenues for the years ended December 31, 2020 and 2019:

​	2020			2019
Manufactured product	​	$	3,276	​	$	5,716
Turbine service on sold product	​	​	2,213	​	​	2,824
Total non-lease revenue	​	$	5,489	​	$	8,540
Turbine leasing fleet revenue	​	​	17,838	​	​	16,833
Total revenue	​	$	23,327	​	$	25,373

Contract Balances

Contract liabilities consist of advance payments for goods as well as deferred revenue on service obligations and extended warranties. All of the Company’s deferred revenue is included in current liabilities under deferred revenue.

The following is a summary of the Company’s contract balances as of December 31, 2020 and 2019:

​	2020			2019
Turbine leasing fleet	​	$	1,548	​	$	2,318
Turbine service on sold product	​	​	318	​	​	376
Manufactured product	​	​	442	​	​	—
Other	​	​	153	​	​	306
Total trade accounts receivable	​	$	2,461	​	$	3,000
Contract assets	​	$	2,461	​	$	3,000
Allowance for doubtful accounts	​	​	(45)	​	​	(60)
Total trade accounts receivable, net	​	$	2,416	​	$	2,940

The amount of revenue recognized that was included in the deferred revenue on service obligations and extended warranty balance at the beginning of 2020 and 2019 was $193 and $58, respectively.

At December 31, 2020 and 2019, the Company had $1,849 and $1,794, respectively, of remaining performance obligations, which are included in deferred revenue. The Company expects to recognize approximately 100% of its remaining performance obligations as of December 31, 2020 as revenue during 2021. The Company recognized 100% of its remaining performance obligations as of 2019 as revenue during 2020.

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Bill-and-Hold Revenue

Certain customer arrangements consist of bill-and-hold characteristics under which the criteria for transfer of control is met, including the passing of title and significant risk and reward of ownership to the customers. Therefore, the customers are able to direct the use of the bill-and-hold inventory while the Company retains physical possession of the product until it is installed at a customer site at a point in time in the future. Revenue recognized in a bill-and-hold arrangement for the years ended December 31, 2020 and 2019 was $3,235 and $0, respectively.

Lessor Revenue

The Company’s lessor portfolio includes only operating leases. The following table presents future operating lease payments under non-cancellable lease arrangements to be received as of December 31, 2020:

Years ended December 31,	​	​
2021	$	7,912
2022	​	491
Total	$	8,403

NOTE 5 — INVENTORY

Inventory is stated at the lower of cost or net realizable value and consisted of the following as of December 31, 2020 and 2019:

​	2020			2019
Raw materials	​	$	9,367	​	$	9,804
Work in process	​	​	935	​	​	1,315
Finished goods	​	​	3,357	​	​	2,452
Total inventories, net	​	$	13,659	​	$	13,571

NOTE 6 — PROPERTY AND EQUIPMENT

Property and equipment consisted of the following as of December 31, 2020 and 2019:

​	2020			2019
Turbines and other equipment	​	$	61,973	​	$	57,416
Machinery and equipment	​	​	5,146	​	​	5,432
Leasehold improvements	​	​	782	​	​	2,447
Fieldwork equipment	​	​	4,032	​	​	4,339
Computer equipment and software	​	​	1,074	​	​	855
Vehicles	​	​	274	​	​	308
Furniture and fixtures	​	​	540	​	​	603
Property, plant and equipment, gross	​	$	73,821	​	$	71,400
Accumulated depreciation	​	​	(38,432)	​	​	(34,295)
Construction in progress	​	​	1,117	​	​	—
Property, plant and equipment, net	​	$	36,506	​	$	37,105

The Company has equipment that is used by customers under lease arrangements. The remaining property and equipment are used by the Company for the manufacture of machines and related assets. Depreciation expense for equipment used by customers under lease arrangements was $5,007 and $4,713 for

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the years ended December 31, 2020 and 2019, respectively. The gross asset cost and accumulated depreciation for equipment used by customers under lease arrangements as of December 31, 2020 were $36,518 and $15,117, respectively. As of December 31, 2019, the gross asset cost and accumulated depreciation for equipment used by customers under lease arrangements were $52,942 and $22,117, respectively. The Company recognized a gain on disposal of property and equipment of $58 for the year ended December 31, 2020 and a loss on disposal of property and equipment of $21 for the year ended December 31, 2019.

NOTE 7 — INTANGIBLE ASSETS

Intangible assets consisted of the following as of December 31, 2020 and 2019:

​	2020			2019
Patents	​	$	1,680	​	$	1,680
Accumulated amortization	​	​	(1,344)	​	​	(1,176)
Intangible assets, net	​	$	336	​	$	504

Definite-lived intangible assets had a weighted-average remaining useful life of 2.0 years and 3.0 years as of December 31, 2020 and 2019, respectively.

The amortization of intangible assets was $168 for each of the years ended December 31, 2020 and 2019. The estimated annual amortization expense based on the intangible asset balance for the next two years as of December 31, 2020:

Year ending December 31,	​	​
2021	$	168
2022	​	168
Total	$	336

NOTE 8 — DEFERRED REVENUE

Deferred revenue consists of billed amounts collected in advance from various customers for service obligations and deposits on future orders. The durations of the service agreements range between 12 and 120 months. Customer deposits on future orders are non-interest bearing and non-refundable. Deferred revenue was $1,849 and $1,794 at December 31, 2020 and 2019 respectively.

NOTE 9 — LEASES

The Company is obligated under operating leases for locations and apartments in New Hampshire, Colorado, North Dakota, Texas and Canada. Minimum rent payments under operating leases are recognized on a straight-line basis over the term of the related leases. In December 2020, the Company entered into a lessee sublease agreement with Pioneer New Hampshire LLC for approximately 5,800 rentable square feet of office space in Portsmouth, New Hampshire. This lease, which was entered into when the Company vacated its previous Portsmouth office space, expires in June 2024 with options to renew for up to an additional six years. In January 2019, the Company entered into a lease agreement for warehouse and manufacturing space in Dover, New Hampshire, with approximate monthly payments of $19 which expires in May 2024. There are no future minimum lease payment obligations after May 2024. The Company is also obligated under capital lease obligations related to vehicles and forklifts. Depreciation on these assets is recorded on a straight-line basis over the term of the lease and is included within depreciation expense. Minimum rent payments under operating leases are recognized on a straight-line basis over the term of the lease. The Company recorded rental expense of $2,117 and $2,038 related to the leases for the years ended December 31, 2020 and 2019, respectively.

In January 2020, FLPS entered into the First Amendment to Office Lease (the “First Amendment”) with GPI Plaza Tower, LP to acquire approximately 1,978 of additional rentable square feet for the Colorado

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office space as provided in the original Office Lease dated February 19, 2018. The lease term is approximately 5.5 years and is approximately $301 per year.

The future minimum lease payments under the Company’s capital and operating leases were as follows as of December 31, 2020:

Year ended December 31,	Capital Leases			Operating Leases
2021	​	$	153	​	$	1,363
2022	​	​	136	​	​	1,063
2023	​	​	58	​	​	866
2024	​	​	—	​	​	398
Total future minimum lease obligation	​	$	347	​	$	3,690
Less interest on capital leases	​	​	(26)	​	​	​
Net present value of capital lease obligations	​	$	321	​	​	​
Less current portion	​	​	(148)	​	​	​
Capital lease obligations, long term	​	$	173	​	​	​

NOTE 10 — INCOME TAXES

The income tax expense is composed of the following for the years ended December 31, 2020 and 2019:

​	2020			2019
Current	​	​	​	​	​	​
Federal	​	$	—	​	$	—
State	​	​	31	​	​	7
Foreign	​	​	—	​	​	—
Total current	​	$	31	​	$	7
Deferred	​	​	​	​	​	​
Federal	​	$	—	​	$	—
State	​	​	—	​	​	—
Foreign	​	​	—	​	​	—
Total deferred	​	​	​	​	​	​
Total income tax expense	​	$	31	​	$	7

The reconciliation of the Company’s effective taxes to the statutory federal income taxes is as follows for the years ended December 31, 2020 and 2019:

​	2020				2019
Income tax at statutory rate	​	$	(1,485)	21.0%	​	$	(2,289)	21.0%
State income taxes net of federal benefit	​	​	(435)	6.1%	​	​	(729)	6.7%
Income taxed at partnership level	​	​	207	(2.9)%	​	​	297	(2.7)%
Foreign rate differential	​	​	(57)	0.8%	​	​	13	(0.1)%
Permanent differences	​	​	29	(0.4)%	​	​	33	(0.3)%
State rate change	​	​	692	(9.8)%	​	​	228	(2.1)%
Valuation allowance	​	​	962	(13.6)%	​	​	2,132	(19.6)%
Other	​	​	118	(1.6)%	​	​	322	(2.9)%
Provision for income taxes	​	$	31	(0.4)%	​	$	7	0.0%

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The effective tax rate for the years ended December 31, 2020 and 2019 differs from the statutory federal tax rate primarily due to state income taxes, and the valuation allowance being applied to the federal and state deferred tax assets.

Significant components of the Company’s deferred tax assets consist of the following as of December 31, 2020 and 2019:

​	2020			2019
Net operating loss carryforwards	​	$	17,095	​	$	16,201
Interest limitation carryforward	​	​	8	​	​	4
Reserves and accrued expenses	​	​	641	​	​	633
Intangibles	​	​	102	​	​	89
Inventory	​	​	627	​	​	635
Gross deferred tax assets	​	$	18,473	​	$	17,562
Valuation allowance	​	​	(17,857)	​	​	(16,896)
Net deferred tax assets	​	$	616	​	$	666
Fixed assets	​	$	(616)	​	$	(666)
Gross deferred tax liabilities	​	$	(616)	​	$	(666)
Net deferred tax asset	​	$	—	​	$	—

Management believes that it is more likely than not the Company will not realize all the tax benefits of the deferred tax assets within the allowable carryforward period. Therefore, an appropriate valuation allowance has been provided. The valuation allowance as of December 31, 2019 primarily relates to U.S. federal and state deferred tax assets. The increase in the valuation allowance during the year ended December 31, 2020 was $961.

At December 31, 2020, the Company had federal, state and foreign net operating loss carryforwards of $106,855, $78,223 and $219, respectively, which will expire, if unused, beginning in 2031, 2026, and 2035 respectively. The federal net operating losses of $29,481 generated post-Tax Cuts and Jobs Act (“the Tax Act”) for the tax years ended December 31, 2018 and thereafter have an indefinite carryforward period and do not expire.

The Company’s ability to utilize net operating loss (“NOL”) carryforwards and other tax attributes to reduce future federal taxable income is subject to potential limitations under Internal Revenue Code Section 382 (“Section 382”) and its related tax regulations. The utilization of these attributes may be limited if certain ownership changes by 5% stockholders (as defined in Treasury regulations pursuant to Section 382) and the effects of stock issuances by the Company during any three-year period result in a cumulative change or more than 50% in the beneficial ownership of the Company.

The Company performed a Section 382 analysis to determine if an ownership change has occurred. It has been preliminarily determined that ownership changes occurred under these rules, and an annual limitation on the use of pre-ownership change NOL carryforwards and certain other losses and/or credits has been applied. The preliminary analysis indicates $48,398 of federal net operating loss carryforwards will expire unutilized. The Company has adjusted deferred tax asset accordingly.

In addition, certain future transactions regarding the Company’s equity, including the cumulative effects of small transactions as well as transactions beyond the Company’s control, could cause an ownership change and therefore a potential limitation on the annual utilization of their deferred tax assets.

For the year ended December 31, 2020, the Company has reflected an uncertain tax liability of $3 associated with tax positions taken on the Company’s historic tax returns. Interest and penalties, to the extent there are any, are included in income tax expense. As a result of historic losses, there was no interest or penalties accrued during or for the year ended December 31, 2020.

F-21

A reconciliation of the beginning and ending amounts of unrecognized tax benefits were as follows:

Unrecognized tax benefits January 1, 2020	$	3
Gross decrease for tax positions of prior year	​	—
Gross increase for tax positions of current year	​	—
Unrecognized tax benefits December 31, 2020	$	3

The Company is subject to taxation in the United States and various state and foreign jurisdictions. The Company currently does not have any tax examinations in progress nor has it had any tax examinations since its inception. All of the Company’s tax years will remain open for examination by federal and state authorities for three and four years, respectively, from the date of utilization of any net operating losses and tax credits.

On December 22, 2017, the 2017 U.S. Tax Act was signed into law. The Tax Act reduced tax rates and modified certain policies, credits, and deductions and modified certain international tax provisions. The Tax Act reduced the federal corporate tax rate from a maximum of 35 percent to a flat 21 percent rate for tax years beginning after December 31, 2017. As such, the federal statutory rate was 21 percent for the year ended December 31, 2020.

The Tax Act also includes provisions for certain foreign-sourced earnings referred to as Global Intangible Low-Taxed Income (“GILTI”), Foreign Derived Intangible Income (“FDII”) and Base Erosion and Anti-abuse Tax (“BEAT”). None of which had an impact on the Company for the current period.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was enacted into law. The CARES Act is aimed at providing emergency relief and health care for individuals and businesses affected by the COVID-19 pandemic. The CARES Act, among other things, includes provisions related to refundable payroll tax credits, deferral of the employer portion of social security payments, expanded net operating loss application, modifications to the net interest deduction limitations, and technical corrections to tax depreciation methods for qualified improvement property. The Company has completed its assessment of the impact of the legislation, and there is no significant impact to the combined consolidated financial statements due to the valuation allowance in the US.

As of December 31, 2020, the Company had no accumulated undistributed foreign earnings as Canada has historical losses. No additional income taxes have been provided for any remaining undistributed foreign earnings not subject to the transition tax, or any additional outside basis difference inherent in these entities, as these amounts continue to be indefinitely reinvested in foreign operations.

NOTE 11 — INDEBTEDNESS

Debt consisted of the following as of December 31, 2020 and 2019:

​	2020			2019
Line of credit	​	$	26,658	​	$	22,274
Note payable	​	​	2,352	​	​	—
Total debt	​	$	29,010	​	$	22,274
Less current debt	​	​	(1,300)	​	​	—
Total long-term debt	​	$	27,710	​	$	22,274

Line of Credit

On February 8, 2019, FLPS entered into a senior secured revolving credit facility (“the Credit Agreement”) with Texas Capital Bank, National Association (“TCB”). The initial commitment amount is for $30,000 and availability under the Credit Agreement is based on a borrowing base calculation of eligible

F-22

assets and other conditions. The facility is backed by a first priority lien on substantially all of the assets of FLPS, and the maturity date of the facility is February 8, 2024. The facility contains various covenants that limits the Company’s ability to, among other things, make restricted payments. Interest is defined based on a tiered leverage ratio and an applicable margin of (i) 1.50% to 2.00% above the base rate for base rate loans, or (ii) 2.50% to 3.00% above the adjusted Eurodollar rate for Eurodollar rate loans. Leverage ratio means as of the last day of the last fiscal month of each fiscal quarter, the ratio of (i) all debt and (ii) annualized EBITDA. Base Rate means, for any day, the highest of (a) Prime Rate; (b) the sum of the Federal Funds Rate for the day plus half of one percent (0.50%); and (c) the adjusted Eurodollar Rate for the day plus one percent (1.00%). FLPS is charged a commitment fee based on the daily average unused portion of the revolving credit facility, and that fee ranges from 0.225% to 0.475% per daily average. Additionally, FLPS is charged a letter of credit fee of between 2.50% and 3.00% per quarter with respect to the amount of letters of credit issued under the revolving credit facility. The applicable margin for loans, the commitment fee and the letter of credit fee set forth above will vary quarterly based on the Company’s leverage ratio. Based on the leverage ratio applicable at December 31, 2020, the margin and base rate were 3.00% and 1.44%, respectively; the commitment fee for the unused portion of the revolving credit facility was 0.225%; and the letter of credit fee was 3.00%. FLPS is subject to financial covenants of a maximum leverage ratio and minimum fixed charge coverage ratio to be tested quarterly. The maximum permitted leverage ratio is 3.50 to 1.00. The minimum fixed charge coverage ratio is 1.25 to 1.00. For the quarter ended December 31, 2020, the Company had an event of non-compliance with respect to the leverage ratio.

On February 12, 2021, the Company entered into a Limited Waiver of Leverage Ratio (the “Waiver”) with TCB pursuant to which the foregoing default event under the Credit Agreement was waived. In consideration of the waiver, (i) the Company agreed to pay TCB a fee of $22 upon execution of the Waiver, (ii) the Company made a $1,500 EBITDA equity contribution to FLPS (the “Waiver Contribution”), and (iii) FLPS made a $1,500 prepayment of its obligations to TCB under the Credit Agreement (the “Prepayment”). The Waiver also amended the Credit Agreement to increase the annualized EBITDA used to calculate the quarterly financial covenants, as well as decrease the availability under the revolving credit facility, by the amount of the Waiver Contribution. FPS contributed $1,500 to the Company to fund the Waiver Contribution and Prepayment made to TCB.

Gross borrowings outstanding under this revolving credit facility amounted to $26,658 and $22,274 as of December 31, 2020 and 2019, respectively. This amount includes $10,000 of permitted distributions taken in 2019 as further described in Note 14. The Company incurred $27 in financing costs related to amendments to its existing revolving credit facility in 2020. In addition, financing costs were incurred in 2019 in relation to securing the revolving credit facility, which amounted to $926. These financing costs were capitalized under deferred financing costs on the combined consolidated balance sheet. Deferred financing costs are amortized to interest expense over the term of the agreement using the effective interest method. Amortization expense was $189 and $134 for the years ended December 31, 2020 and 2019, respectively.

On January 27, 2020, FLPS entered into an amendment to the Credit Agreement (“First Amendment”) and First Amendment to Pledge and Security Agreement with TCB. Under the terms of the amendment, the borrowing base was amended to include certain non-turbine field equipment which was previously not included.

On August 28, 2020, FLPS entered into the Second Amendment to Credit Agreement with TCB. Under the terms of the amendment, certain terms within the borrowing base definition of accounts receivables relating to investment grade and non-investment grade customers were modified.

On December 21, 2020, FLPS entered into the Third Amendment to Credit Agreement with TCB. Under the terms of the amendment, FLPS ULC was added as an additional loan party to the Credit Agreement. As of December 31, 2020 and 2019, the amounts available for drawdown were $1,429 and $7,726, respectively.

PPP Loans

In 2020, the Company entered into loan agreements under the Small Business Administration (the “SBA”) Paycheck Protection Program (“PPP”) enabled by the CARES Act. On April 14, 2020, TCB

F-23

entered into a note with FLPS and agreed to make available to FLPS a loan in the amount of $991. On May 6, 2020, Bank of America, N.A. (“Bank of America”) entered into a note with FEI and agreed to make available to FEI a loan in the amount of $1,361 (together, the “PPP Loans”). The PPP Loans bear interest at a rate per annum of 1.00%. The term of the PPP Loans are two years, ending April 14, 2022 and May 6, 2022, respectively.

The PPP Loans may be forgiven partially or in full if the funding received is used for payroll costs, interest on mortgages, rent, and utilities, provided that at least 60% of the forgiven amount has been used for payroll costs. Forgiveness is based on the Company maintaining, or quickly rehiring employees and maintaining applicable salary levels and is subject to the approval of the SBA. The PPP Loans are recorded as current portion of notes payable and notes payable, net of current portion on the accompanying combined consolidated balance sheets at December 31, 2020.

The Company used the proceeds to support qualifying expenses such as payroll costs, rent and utilities in accordance with the relevant terms and conditions of the CARES Act.

In 2021, the Company applied for forgiveness on its PPP Loans. The Company will account for forgiveness on the PPP Loans in accordance with ASC 470 – Debt (“ASC 470”) and record a gain on extinguishment of debt on its combined consolidated financial statements and related footnote disclosures, provided the forgiveness is approved by the SBA.

Future minimum principal payments due on the line of credit and PPP Loans are as follows as of December 31, 2020:

For the year ending December 31,	​	​
2021	$	1,300
2022	​	1,052
2023	​	—
2024	​	26,658
Total future principal payments	$	29,010

NOTE 12 — CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS

The Company’s three largest customers accounted for approximately 23%, 14%, and 10% of total revenue for the year ended December 31, 2020. In 2019, sales to the Company’s largest customer amounted to 28% of its total revenue. As of December 31, 2020, two customers accounted for 15% and 14% of the accounts receivable balance. As of December 31, 2019, one customer accounted for 32% of the accounts receivable balance. No single supplier accounted for more than 10% of the total cost of revenue for the years ended December 31, 2020 and 2019.

Cash could potentially subject the Company to concentrations of credit risk. However, because the Company maintains its cash with high-quality, accredited financial institutions, such funds are subject to minimal credit risk. The Company may maintain balances with financial institutions in excess of federally insured limits. The Company has not experienced any losses historically in these accounts and believes it is not exposed to significant credit risk in its cash.

NOTE 13 — COMMITMENTS AND CONTINGENCIES

Litigation and Legal Proceedings

Any material legal, tax or regulatory proceedings regarding matters arising in the ordinary course of business, which involve the Company’s assessment to determine the probability of whether a loss will occur and, if probable, its best estimate of probable loss. The Company records and discloses losses when these losses are probable and reasonably estimable, and discloses matters when losses are probable but not estimable

F-24

or when losses are reasonably possible. Legal costs related to the defense of loss contingencies are expensed as incurred. The Company is not currently involved in legal proceedings that could reasonably be expected to have a material adverse effect on our business, prospects, financial condition or results of operations.

Guarantees and Indemnifications

Between December 2015 and December 31, 2019, FPS issued a series of promissory notes with various investors that together, along with FPS’ affiliates, account for a majority of FPS’ voting equity and representation of its board of directors (the “Investor Notes”). The Investor Notes bear interest at an annualized rate ranging between 8.0% and 12.0% and are pre-payable without penalty at any time. The Investor Notes have a maturity date of June 30, 2022. FPS has the option to receive monthly interest in cash or to accrue monthly interest.

Prior to the closing of the Credit Agreement in February 2019, the Investor Notes were secured by a first priority lien of all assets of the Company and its subsidiaries. In connection with closing of the Credit Agreement, all noteholders of the Investor Notes entered into a Subordination and Intercreditor Agreement with TCB whereby all Investor Notes currently in place, and all future Investor Notes in substantially the same form, were from thereon secured by a second priority lien of all assets of FLPS and its subsidiaries, while the Investor Notes retained their first priority lien in all assets of all other existing and future subsidiaries of FPS.

NOTE 14 — RELATED PARTY TRANSACTIONS

The Company distributed $450 and $10,000, respectively, to FPS during the years ended December 31, 2020 and 2019. In addition, during the years ended December 31, 2020 and 2019, $800 and $7,800, respectively, were re-contributed to the Company for working capital purposes. There are no terms and conditions associated with the repayment of either of these amounts. The contributions were recorded within the Company’s net parent investment at December 31, 2020 and 2019.

NOTE 15 — EMPLOYEE BENEFIT PLAN

The Company sponsors defined contribution 401(k) plans covering substantially all of its employees. The plans entitle employees, almost immediately after their start date, to make voluntary contributions to the plans. Contributions cannot exceed the maximum amount allowed under applicable provisions of the Internal Revenue Code (the “Code”). The Company provided a matching contribution of 100% up to 6% of base salary. Employees are vested in the matching contributions immediately. The Company’s contributions to the plans amounted to approximately $342 and $609 for the years ended December 31, 2020 and 2019, respectively.

NOTE 16 — INCENTIVE PLANS

FlexEnergy, Inc. 2013 Equity Incentive Plan

On January 1, 2013, FEI implemented a long-term compensation incentive plan under which employees, officers, directors and other individuals providing services to FEI are eligible to receive cash payment awards (the “2013 Plan”). The values of each eligible payment under the 2013 Plan has been fixed through the amendment made on October 27, 2016 and there will be no further grants made. No forfeitures have been recognized under the 2013 Plan. An aggregate payout of $633 is due to the participants on the earlier of January 1, 2023 or when certain change in control terms (as provided below) are met. Under the 2013 Plan, a “Change in Control” will have occurred if a single shareholder or shareholder group obtains effective control of FEI, or upon a liquidation or dissolution. The weighted average contractual life remaining is 1.94 years for options outstanding and exercisable. The liability of $492 and $422 are recorded within Other non-current liabilities on the accompanying combined consolidated balance sheets as of December 31, 2020 and 2019, respectively. Share-based compensation expense was $70 and $71 for the 2013 Incentive Plan during the years ended December 31, 2020 and 2019, respectively, and was recorded in selling, general and administrative operating expenses on the accompanying combined consolidated statements of operations and comprehensive loss.

F-25

FlexEnergy, Inc. 2016 Target Incentive Plan (Participation Plan)

On October 27, 2016, FEI adopted the 2016 Target Incentive Plan (the “2016 Plan”), which provides for the grant of cash payment awards totaling $3,249 to certain officers and employees, payable upon satisfaction of a performance condition (i.e. the occurrence of a Change in Control, as defined) and a service vesting condition (i.e. the vesting of an award based on continuous service) . Any payments due under the 2016 Plan are required to be paid within 60 days following a Change in Control (as defined) that constitutes a Qualifying Sale. Under the 2016 Plan, a “Change in Control” will have occurred if a single shareholder or shareholder group obtains effective control of FPS or acquires 50% or more than the fair market value of its assets.

Under the 2016 Plan, cash payment awards of $3,249 in aggregate were granted in October 2016, and the Company does not expect there will be any further awards. There is no settlement payment of an award under the 2016 Plan unless and until there is a Qualifying Sale which also constitutes a Change in Control of FEI prior to the earlier of a Termination Transaction or the termination of the 2016 Plan on January 1, 2026. The payments under the 2016 Plan are only due to the participants if certain change in control terms are met on or before the earlier of January 1, 2026. To constitute a Qualifying Sale, a sale or series of sales of assets or ownership must result in the holders of Series A Units of FPS receiving more than $64.00 per Series A Unit. A total of 1,000,000 Series A Units are currently issued and outstanding. The change in control term is a performance condition and therefore the Company does not accrue or recognize any compensation cost until such event is considered probable. No compensation cost has been recognized on these awards to date as the event is not considered probable.

NOTE 17 — SUBSEQUENT EVENTS

The Company has evaluated subsequent events through June 4, 2021, the date these combined consolidated financial statements were available to be issued, to ensure that this filing includes all appropriate footnote disclosure of events both recognized in the combined consolidated financial statements as of December 31, 2020, and events which occurred subsequently but were not recognized in the combined consolidated financial statements. The Company has concluded that other than as disclosed in Note 11 and noted below, there were no subsequent events requiring adjustment to or disclosure in these combined consolidated financial statements.

On December 29, 2020, the Company entered into a sublease with Pioneer New Hampshire LLC to relocate its corporate headquarters to 112 Corporate Drive, Portsmouth, New Hampshire, thereby leasing office space of approximately 5,800 square feet of rentable space. The lease for the premises is effective at February 2021 and has a term of approximately 3.5 years, with two optional renewal options of three years each. The minimum monthly rent under the terms of the lease is $7.

F-26

FLEXENERGY, INC. AND FLEX LEASING POWER & SERVICES, LLC AND SUBSIDIARIES

CONDENSED COMBINED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(DOLLARS IN THOUSANDS)

​	June 30, 2021			December 31, 2020
Assets	​	​	​	​	​	​
Current assets	​	​	​	​	​	​
Cash	​	$	667	​	$	1,702
Accounts receivable, net of allowance of $11 and $45, respectively	​	​	1,443	​	​	2,416
Inventories, net	​	​	12,329	​	​	13,659
Prepaid expenses and other current assets	​	​	480	​	​	497
Total current assets	​	​	14,919	​	​	18,274
Long-term assets	​	​	​	​	​	​
Property and equipment, net	​	​	34,295	​	​	36,506
Deferred financing costs, net of amortization	​	​	679	​	​	630
Other non-current assets	​	​	62	​	​	166
Intangible assets, net	​	​	252	​	​	336
Total long-term assets	​	$	35,288	​	$	37,638
Total assets	​	$	50,207	​	$	55,912
Liabilities and stockholder’s equity	​	​	​	​	​	​
Current liabilities	​	​	​	​	​	​
Accounts payable	​	$	1,038	​	$	1,328
Accrued expenses	​	​	2,809	​	​	2,003
Deferred revenues	​	​	3,810	​	​	1,849
Current portion of notes payable	​	​	—	​	​	1,300
Current portion of capital lease obligations	​	​	130	​	​	214
Other current liabilities	​	​	421	​	​	148
Total current liabilities	​	​	8,208	​	​	6,842
Long-term liabilities	​	​	​	​	​	​
Capital leases, net of current portion	​	​	126	​	​	173
Line of credit	​	​	22,963	​	​	26,658
Notes payable, net of current portion	​	​	—	​	​	1,052
Other non-current liabilities	​	​	528	​	​	492
Total long-term liabilities	​	$	23,617	​	$	28,375
Total liabilities	​	$	31,825	​	$	35,217
Commitments and contingencies (see note 13)	​	​	​	​	​	​
Stockholder’s equity	​	​	​	​	​	​
Net parent investment	​	$	153,776	​	$	152,273
Accumulated other comprehensive income	​	​	752	​	​	543
Accumulated deficit	​	​	(136,146)	​	​	(132,121)
Total stockholder’s equity	​	$	18,382	​	$	20,695
Total liabilities and stockholder’s equity	​	$	50,207	​	$	55,912

The accompanying notes are an integral part of these Condensed Combined Consolidated Financial Statements.

F-27

FLEXENERGY, INC. AND FLEX LEASING POWER & SERVICES, LLC AND SUBSIDIARIES

CONDENSED COMBINED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS
(UNAUDITED)
(DOLLARS IN THOUSANDS)

​	Six Months Ended June 30,
​	2021			2020
Revenue	​	​	​	​	​	​
Turbine leasing fleet	​	$	7,272	​	$	10,024
Turbine service on sold product	​	​	1,601	​	​	1,120
Manufactured product	​	​	1,276	​	​	1,658
Total revenue	​	​	10,149	​	​	12,802
Cost of revenue	​	​	​	​	​	​
Turbine leasing fleet (excluding depreciation of fleet turbines)	​	​	2,967	​	​	2,562
Turbine service on sold product	​	​	1,107	​	​	961
Manufactured product	​	​	2,530	​	​	3,458
Depreciation of fleet turbines	​	​	2,167	​	​	2,766
Total cost of revenue	​	​	8,771	​	​	9,747
Operating expenses	​	​	​	​	​	​
Selling, general and administrative	​	​	6,759	​	​	5,957
Research and development	​	​	67	​	​	75
Total operating expenses:	​	​	6,826	​	​	6,032
Operating loss	​	​	(5,448)	​	​	(2,977)
Other income (expense)	​	​	​	​	​	​
Interest expense	​	​	(539)	​	​	(665)
Other income (expense), net	​	​	2,534	​	​	52
Total other income (expense), net	​	​	1,995	​	​	(613)
Loss before income taxes	​	​	(3,453)	​	​	(3,590)
Income tax expense	​	​	(178)	​	​	(4)
Net loss	​	$	(3,631)	​	$	(3,594)
Other comprehensive gain (loss)	​	​	​	​	​	​
Foreign currency translation adjustments	​	​	209	​	​	(213)
Total other comprehensive gain (loss)	​	​	209	​	​	(213)
Comprehensive loss	​	$	(3,422)	​	$	(3,807)

The accompanying notes are an integral part of these Condensed Combined Consolidated Financial Statements.

F-28

FLEXENERGY, INC. AND FLEX LEASING POWER & SERVICES, LLC AND SUBSIDIARIES

CONDENSED COMBINED CONSOLIDATED STATEMENTS OF STOCKHOLDER’S EQUITY (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND 2020
(DOLLARS IN THOUSANDS)

​

Net Parent Investment

Accumulated Other Comprehensive Income (Loss)

Accumulated Deficit

Total Stockholder’s Equity

Balance at January 1, 2020

​

$

151,473

​

$

100

​

$

(124,567)

​

$

27,006

Contributions

​

​

800

​

​

—

​

​

—

​

​

800

Distributions

​

​

(4)

​

​

—

​

​

(6)

​

​

(10)

Foreign currency translation adjustments

​

​

—

​

​

(213)

​

​

—

​

​

(213)

Net loss

​

​

—

​

​

—

​

​

(3,594)

​

​

(3,594)

Balance at June 30, 2020

​

$

152,269

​

$

(113)

​

$

(128,167)

​

$

23,989

​

Net Parent Investment

Accumulated Other Comprehensive Income (Loss)

Accumulated Deficit

Total Stockholder’s Equity

Balance at January 1, 2021

​

$

152,273

​

$

543

​

$

(132,121)

​

$

20,695

Contributions

​

​

1,503

​

​

—

​

​

—

​

​

1,503

Distributions

​

​

—

​

​

—

​

​

(394)

​

​

(394)

Foreign currency translation adjustments

​

​

—

​

​

209

​

​

—

​

​

209

Net loss

​

​

—

​

​

—

​

​

(3,631)

​

​

(3,631)

Balance at June 30, 2021

​

$

153,776

​

$

752

​

$

(136,146)

​

$

18,382

The accompanying notes are an integral part of these Condensed Combined Consolidated Financial Statements.

F-29

FLEXENERGY, INC. AND FLEX LEASING POWER & SERVICES, LLC AND SUBSIDIARIES

CONDENSED COMBINED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(DOLLARS IN THOUSANDS)

​	Six Months Ended June 30,
​	2021			2020
Cash Flows from Operating Activities	​	​	​	​	​	​
Net loss	​	$	(3,631)	​	$	(3,594)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:	​	​	​	​	​	​
Depreciation and amortization of property and equipment	​	​	3,474	​	​	3,258
Amortization of deferred financing costs	​	​	107	​	​	94
Amortization of intangible assets	​	​	84	​	​	84
Bad debt expense	​	​	—	​	​	9
Forgiveness of debt – PPP loan	​	​	(2,378)	​	​	—
Gain on disposal of property and equipment	​	​	(32)	​	​	(57)
Changes in operating assets and liabilities:	​	​	​	​	​	​
Accounts receivable	​	​	973	​	​	(296)
Inventories, net	​	​	860	​	​	(4,188)
Prepaid expenses and other current assets	​	​	17	​	​	(219)
Other non-current assets	​	​	104	​	​	35
Accounts payable	​	​	(295)	​	​	(314)
Accrued expenses	​	​	831	​	​	357
Deferred revenues	​	​	1,961	​	​	(521)
Other current liabilities	​	​	208	​	​	(195)
Other non-current liabilities	​	​	35	​	​	—
Net Cash Provided by (Used in) Operating Activities	​	$	2,318	​	$	(5,547)
Cash Flows from Investing Activities	​	​	​	​	​	​
Purchases of property and equipment	​	​	(525)	​	​	(604)
Proceeds from disposal of property and equipment	​	​	24	​	​	193
Net Cash Used in Investing Activities	​	$	(501)	​	$	(411)
Cash Flows from Financing Activities	​	​	​	​	​	​
Distribution to parent	​	$	(394)	​	$	(10)
Contribution from parent	​	​	1,503	​	​	800
Proceeds from notes payable	​	​	—	​	​	2,352
Payments on line of credit	​	​	(8,528)	​	​	—
Advances from line of credit	​	​	4,678	​	​	4,330
Payments on capital leases	​	​	(64)	​	​	(82)
Net Cash (Used in) Provided by Financing Activities	​	$	(2,805)	​	$	7,390
Effects of Exchange Rate Changes on Cash	​	$	(47)	​	$	2
Net Increase / (Decrease) in Cash	​	$	(1,035)	​	$	1,434
Cash – Beginning	​	$	1,702	​	$	2,000
Cash – Ending	​	$	667	​	​	3,434
Supplemental Disclosure	​	​	​	​	​	​
Interest paid in cash	​	$	425	​	$	402
Taxes paid in cash	​	​	28	​	​	​
Non-Cash Investing and Financing Activities	​	​	​	​	​	​
Net transfers from inventory to property and equipment	​	$	1,447	​	$	3,115
Accrued but not paid deferred financing costs	​	​	156	​	​	27
Transfer from construction in process (CIP) to work in progress (WIP)	​	​	882	​	​	​
Forgiveness of debt – PPP loan	​	​	2,378	​	​	​

The accompanying notes are an integral part of these Condensed Combined Consolidated Financial Statements.

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NOTES TO UNAUDITED CONDENSED COMBINED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLARS IN THOUSANDS)

NOTE 1 — NATURE OF OPERATIONS

The condensed combined consolidated financial statements include the combined accounts of FlexEnergy, Inc. (“FEI”) and Flex Leasing Power & Service LLC (“FLPS”), collectively referred to as “the Company”. The Company is headquartered in Portsmouth, New Hampshire with field offices in Colorado, North Dakota, Texas and Canada.

On January 1, 2016, FlexEnergy Power Solutions, LLC (“FPS”) was formed to hold FEI and FLPS. FEI manufactures the GT333 kilowatt turbine, the larger GT1300 kilowatt turbine (“Flex Turbine”) and stand- alone heat recovery products (“Flex Heat Recovery products”). FLPS provides a rental and leasing offering of the turbine generator, particularly in the North America oilfield market. Flex Leasing Power and Services, ULC (“FLPS ULC”), which is wholly-owned by Flex Power Co., is a Canadian entity that supports expansion into the Canadian market. Flex Power Co. is a wholly-owned subsidiary of FLPS.

On December 31, 2020, FPS formed FlexEnergy Green Solutions, Inc. (“FGS”) to be its wholly-owned subsidiary. FPS intends to contribute all of its assets, which consist solely of 100% equity interests in FEI and FLPS, to FGS in exchange for 100% of the equity interests in FGS, which will result in FGS becoming a wholly-owned subsidiary of FPS, and FEI and FLPS becoming wholly-owned subsidiaries of FGS.

The Company is an energy focused technology company that designs, manufactures, sells and leases cost-effective energy solutions that lower its customers’ environmental footprint, often by making useable energy from sources of fuel or heat otherwise overlooked or wasted. The Company’s business consists of leasing and service of the Company’s gas-powered Flex Turbines supported by a vertically integrated original equipment manufacturing (“OEM”) with some direct sales of manufactured products. Leasing and service allows the Company to monetize emerging clean technologies via its Flex Turbine and Flex Heat Recovery products, with consistent revenues and cash flow.

The Company’s Flex Turbines offer a reliable source for distributed or grid connected electrical power, capable of being fired by a wide variety of gaseous fuels from waste gas from landfills and natural gas flaring to higher BTU fuels such as propane and synthetic gas. Leasing and sales of Flex Turbines presently represent the bulk of the Company’s operations and revenues. Flex Turbines provide the Company’s customers with solutions to gain independence over their electricity generation and minimize overall reliance on the grid. In addition, the Company’s Flex Heat Recovery products are integral to promising emerging power sources, such as fuel cells for electrical power.

The Company serves a diverse range of customers in the global oil and gas (“O&G”), transportation, power, and commercial and industrial (“C&I”) end markets. The Company’s primary focus is on base load, distributed, electric generation using Flex Turbines, with the technology base to expand in additional untapped end-markets.

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accompanying condensed combined consolidated financial statements include the accounts of FEI and its wholly owned subsidiaries and FLPS and its wholly owned subsidiaries. All intercompany transactions and accounts have been eliminated in consolidation. The Company’s condensed combined consolidated financial statements were prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and include the assets, liabilities, revenues and expenses of all controlled subsidiaries. In the opinion of management, the accompanying unaudited condensed combined consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

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The interim results for the six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future interim periods.

USE OF ESTIMATES

The preparation of the Company’s condensed combined consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed combined consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

Significant items subject to such estimates and assumptions include accounting for the accounts receivable allowance, the valuation of long-lived assets including intangible assets with finite lives, useful lives of long- lived assets such as property, equipment and intangible assets, valuation allowances for deferred income tax assets, inventory obsolescence, and exposure related to warranty and other contingent liabilities. Actual results could differ from those estimates.

SEGMENT INFORMATION

The Company is considered to be a single reporting segment. The Company’s chief operating decision makers (“CODM”), the Chief Executive Officer, the Chief Financial Officer and the Chief Commercial Officer, review financial information presented on a condensed combined consolidated basis for purposes of allocating resources and evaluating financial performance. The business activities of this reporting segment are the engineering, production, sales and leasing of its proprietary energy efficient Flex Turbines and Flex Heat Recovery products, and related parts and service.

The Company conducts its business through various offices and facilities located throughout the U.S. and Canada. All the Company’s revenues were to external customers for the six months ended June 30, 2021 and 2020. Of the sales during the six months ended June 30, 2021, $6,267 were sales to the US, $3,218 to Canada and $664 to non-North America countries, respectively. Of the sales during the six months ended June 30, 2020, $11,269 were sales to the US, $1,292 to Canada and $241 to non-North America countries, respectively. Long-lived assets held in the U.S. and Canada as of June 30, 2021 were $26,150 and $9,138, respectively. Long-lived assets held in the U.S. and Canada at December 31, 2020 were $28,203 and $9,435, respectively.

ACCOUNTS RECEIVABLE

Accounts receivable are recorded at the invoiced amount and do not bear interest. Accounts receivable are stated at the amount the Company expects to collect from balances outstanding at year end and represent amounts billed to customers and not yet collected, and are recorded when the right to consideration becomes unconditional. Based on the Company’s evaluation of uncollected accounts receivable at the end of each year, bad debts are provided for using an allowance for doubtful accounts method. The evaluation considers historical trends to identify receivables that the Company believes may be uncollectible. The allowance for bad debt was $11 and $45 as of June 30, 2021 and December 31, 2020, respectively.

INVENTORY

Inventory at FEI consists primarily of parts, components, and work in progress for the manufacture and repair of the Flex Turbine and Flex Heat Recovery products. Inventory at FLPS consists primarily of parts, components and turbines that are currently ready for or are being prepared for first time use. Once a turbine has been placed into service, the inventory is transferred to property and equipment. Inventoried parts and components are mainly used for commissioning and/or repairing the turbines. Inventory is valued at the lower of cost or net realizable value and is determined on a the first in, first out (“FIFO”) cost method.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets ranging from three to ten years. Expenditures for repairs and

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maintenance are charged to expense as incurred, whereas major betterments are capitalized as additions to property and equipment.

The estimated useful lives used in computing depreciation of property and equipment are as follows:

Asset	Life
Turbines and other equipment	10 years
Leasehold improvements	Shorter of lease term or 10 years
Machinery and equipment	3 – 7 years
Furniture and fixtures	5 – 7 years
Fieldwork equipment	5 years
Computer equipment and software	3 – 5 years
Vehicles	4 – 5 years

Leasehold improvements are amortized using the straight-line method over the lesser of the term of the lease or the estimated useful life of the asset. Depreciation of assets leased to customers was of $2,167 and $2,766 for the six months ended June 30, 2021 and 2020, respectively. Depreciation of assets leased to customers is recorded to cost of revenue. Depreciation of other assets was $1,307 and $492 for the six months ended June 30, 2021 and 2020, respectively. Depreciation of other assets is recorded to operating expenses within the accompanying condensed combined consolidated statements of operations and comprehensive loss. The Company’s depreciation and amortization expense of property and equipment was $3,474 and $3,258 for the six months ended June 30, 2021 and 2020, respectively.

INTANGIBLE ASSETS

Intangible assets, consisting of acquired patents, are presented at cost, net of accumulated amortization. Intangible assets are amortized over their estimated useful life of ten years on a straight-line basis. The Company continues to invest in its intellectual property portfolio and is actively filing for patent protection for its technology in both the U.S. and abroad. The costs, including legal, associated with compiling and filing patent applications are charged to selling, general, and administrative expenses as incurred.

IMPAIRMENT OF LONG-LIVED ASSETS

Long-lived assets such as property and equipment and intangible assets with finite lives are tested for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models and third-party independent appraisals, as considered necessary.

The Company did not record any impairment losses during the six months ended June 30, 2021 and 2020, and there have been no events that triggered an impairment analysis as of June 30, 2021 and December 31, 2020.

REVENUE RECOGNITION

The Company’s revenue consists of turbine leasing fleet revenue, the sales of manufactured Flex Turbine and Flex Heat Recovery products, and service revenues on sold product. Revenue is recognized upon transfer of control of the promised goods or the Company’s performance of the services to its customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services.

The Company excludes sales tax collected from customers from revenue in its condensed combined consolidated statements of operations and comprehensive loss.

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Significant Judgments — Contracts with Multiple Performance Obligations

A performance obligation is a promise in a contract with a customer to transfer products or services that are distinct. Determining whether products and services are distinct performance obligations that should be accounted for separately or combined as one unit of accounting may require significant judgment. The Company enters into contracts with its customers to manufacture Flex Turbines and Flex Heat Recovery products and provides certain products, parts, and accessories, collectively referred to as “products.” The Company will also provide services associated with these products and parts including commissioning and maintenance services, collectively referred to as “services.” These services are distinct and separate contractual arrangements.

Contracts may contain multiple products within the same agreement. However, each product is distinct as they are sold separately and revenue is only recorded when the individual product is completed and control of the product is transferred. Service contracts, and services noted within such contracts, are similar in that each service is distinct. Each service is explicitly stated in the contracts where the Company provides maintenance repairs and labor services in exchange for a fixed-rate per month per turbine. Revenue from maintenance service contracts is recognized over the term of the contract at the agreed upon monthly service fee as defined in the contract, while commissioning revenue is recognized at the agreed upon commissioning fee amount as defined within the contract once the Flex Turbine is installed and begins generating energy for the customer. The maintenance service contracts and commissioning revenue are each considered distinct and separated from other obligations in the contract since (i) the customer is able to benefit from the good or service separately or together with other resources made available through the arrangement and (ii) the services are each separately identifiable from the others provided in the contract.

Once distinct performance obligations are identified within a contract, the Company allocates the transaction price to each performance obligation on a relative standalone selling price (“SSP”) basis. The SSP is the price at which the Company would sell a promised product or service separately to a customer.

Turbine Leasing Fleet

Turbine leasing fleet revenue consists of revenue generated on the Company’s owned fleet of Flex Turbines and owned ancillary field equipment that supports the turbines fleet’s generation in the field. It primarily consists of recurring monthly revenue associated with executed rental agreements (“Generator Rental Agreements”) where the Company is the lessor to the third-party customers. Leases can cover multiple Flex Turbine units and explicitly assert the monthly lease payment due over the length of the agreement (typically 12-36 months). Revenue is recognized over time over the duration of the lease, which represents the Company’s obligation to the customer. All current leases are classified as operating leases. Additionally, there are no “rent increases” contained within any of the Company’s current leasing agreements and lease payments are due to the Company in exchange for the use of the Flex Turbine generator and coverage for routine maintenance and monitoring. These agreements typically include preventative and regular maintenance costs embedded within the lease payment (“executory costs”) over the term of the agreement. Such executory costs are considered non-lease components with revenue recognized on a straight-line basis. Lease and non-lease revenue is distinct between the fee to use Flex Turbine and the amount that covers continuous remote monitoring and maintenance. Turbine leasing fleet revenue also includes (i) commissioning of leased units (ii) one-off billings to customers for repairs of leased Flex Turbine units outside the scope of the rental agreement and (iii) the rental of owned ancillary field assets such as standby diesel generators and automatic transfer switches.

Manufactured Product Sales

The Company’s standard terms of sales of new Flex Turbines and Flex Heat Recovery products to channel partners and direct end-users include transfer of title, care, custody and control of the goods at the point of shipment, payment terms ranging from full payment in advance of shipment to payment in 90 days, no right of return or exchange, and no post-shipment performance obligations except for standard warranties provided on the products and parts sold. The Company offers standard assurance type warranty that its products and parts sold will operate free of material defects and function for a period of the greater

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of 18 months from delivery or 12 months from commissioning of the unit. Once the standard warranty expires, customers have the option to purchase service/maintenance coverage at a fixed rate. Revenue is recognized upon transfer of control of the promised goods to the Company’s customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods. Title and risk of loss or damage to products passes to the purchaser of newly manufactured Flex Turbines and Flex Heat Recovery products upon production test completion and tender of delivery to the carrier at the Company’s U.S. manufacturing facility. The Company recognizes revenue in certain circumstances before product delivery occurs (commonly referred to as bill-and-hold transactions). Revenue from bill-and-hold transactions is recognized when all specific requirements for transfer of control under a bill-and-hold arrangement have been met which include, among other things, a request from the customer that the product be held for future delivery. For these bill-and-hold arrangements, the associated product inventory is identified separately as belonging to the customer and is ready for physical transfer.

Service on Sold Product

Service performed by the Company consists primarily of commissioning and maintenance services on units sold to third-party customers. Customers with purchased units in operation that are out of warranty will contact the Company for replacement parts on their turbine generators such as a replacement engine.

Once the customer agrees to the pricing and terms for the service order and places a purchase order, the Company will deliver the parts to the customer, recognizing revenue once the performance obligation is met.

Contracts for services are initiated through Service Request Orders (“SROs”), related to a combination of parts and labor. Like parts only, the Company will provide the customer with a quote for the service work and once accepted, will work to satisfy the transaction’s performance obligations and recognized revenue once parts are shipped and/or services have been rendered.

Service revenue also relates to commissioning Flex Turbines sold to third-party customers at the customers’ sites. This is a separate performance obligation from the purchase order to manufacture Flex Turbines. Typically, commissioning of manufactured units takes place within two months of tender for shipment, but can be delayed for up to several months based on when the customer submits its request for commissioning of the units and the commissioning takes place.

Lastly, the Company also provides maintenance service contracts on the existing installed base of Flex Turbines sold to its third-party customers. The maintenance service contracts are agreements to perform certain services to maintain a product for a specified period of time. Service revenue derived from maintenance service contracts is explicitly for the months covered and recognized over time on a straight-line basis over the length of the contract period, which represents the Company’s obligation to the customer.

Practical Expedient

The Company applies a practical expedient to expense costs as incurred for costs to obtain a contract when the amortization period would have been one year or less. These costs are recorded within selling, general and administrative expenses.

INCOME TAXES

FLPS is taxed as a disregarded entity for U.S. federal tax purposes, and the operations are not subject to U.S. federal income tax other than the operations that are conducted through taxable subsidiaries. FLPS may incur income taxes that are subject to withholding requirements related to certain of operations within Canada and other foreign countries in which the Company operates. FEI and Flex Power Co. income taxes are accounted for utilizing the asset and liability approach. Under this method, deferred tax assets and liabilities are recognized for the anticipated future tax consequences attributable to differences between the condensed combined consolidated financial statement carrying amounts of existing assets and liabilities

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and their respective tax basis. Deferred amounts are measured using enacted tax rates expected to apply to taxable income in the year those temporary differences are expected to be recovered or settled.

In assessing the realizability of the deferred income tax assets, including net operating loss and state tax credit carryforwards, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon evaluating both positive and negative evidence in making this assessment, of which management determined the need for a valuation allowance on all net deferred tax assets. Further, the Company recognizes interest expense (income) and penalties on uncertain tax positions and income tax deficiencies (refunds) in income tax expense in the accompanying condensed combined consolidated statements of operations and comprehensive loss.

FOREIGN CURRENCY TRANSACTIONS

The financial statements of an international subsidiary, FLPS ULC, are translated into the functional reporting currency of the Company (USD) using the exchange rate in effect at each balance sheet date for assets and liabilities. Revenues and expenses were translated to USD at the average exchange rate for the period. Resulting currency translation adjustments are recorded as a component of accumulated other comprehensive loss through the cumulative translation adjustment (“CTA”) account. Foreign exchange transaction gains and losses are recorded in the condensed combined consolidated statements of operations and comprehensive loss in other income (expense), net.

The Company cannot guarantee that the current exchange rate will remain steady; therefore, there is a possibility that the Company could post the same amount of profit for comparable periods and because of the fluctuating exchange rate, actually post higher or lower profit depending on the exchange rate of Canadian Dollar (“CAD”) converted to USD on that date. The exchange rate could fluctuate depending on changes in political and economic environments without notice.

PRODUCT WARRANTY

The Company provides for the estimated cost of product warranties at the time revenue is recognized. Warranty terms are for the greater of 18 months from delivery or 12 months from commissioning of the unit, to repair or replace any defective component in equipment supplied by the Company. The provision for product warranty is based primarily on historical rates, sales history and other considerations. The provision for product warranty is reported within the classification of manufactured product cost of revenue in the accompanying condensed combined consolidated statements of operations and comprehensive loss. Accrued product warranties were $302 and $526 as of June 30, 2021 and December 31, 2020, respectively and are reported within accrued expenses in the accompanying condensed combined consolidated balance sheet.

RESEARCH AND DEVELOPMENT

Research and development costs are expensed as incurred and reported in research and development costs in the accompanying condensed combined consolidated statements of operations and comprehensive loss. Costs were $67 and $75 for the six months ended June 30, 2021 and 2020, respectively.

RECENT ACCOUNTING PRONOUNCEMENTS

Emerging growth company

The Company is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02” or “Topic 842”). The purpose of ASU 2016-02 is to provide financial statement users a better understanding of the amount, timing, and uncertainty of cash flows arising from leases. The adoption of ASU 2016-02 will result in the

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recognition of a right-of-use asset and a lease liability for all leases. New disclosure requirements include qualitative and quantitative information about the amounts recorded in the financial statements. In September 2017, the FASB issued ASU 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842), which provides additional implementation guidance on the previously issued ASU 2016-02 Leases (Topic 842). ASU 2016-02 requires a lessee to recognize assets and liabilities on the balance sheet for all leases with lease terms greater than 12 months. ASU 2016-02 requires a modified retrospective transition by means of a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year in which the guidance is effective with the option to elect certain practical expedients and accounting policy elections. Topic 842 will be effective for the Company for fiscal years beginning after December 15, 2021, with interim periods within fiscal years beginning after December 15, 2022. The Company is currently evaluating the impact of the adoption of this update on its condensed combined consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326) (“ASU 2016-13” or “Topic 326”), which requires that all financial assets measured at amortized cost to be evaluated for current expected credit losses. Under the new guidance, immediate recognition of credit losses expected over the life of a financial instrument is required. The pronouncement eliminates the incurred credit loss impairment methodology and replaces it with an expected credit loss concept based on historical experience, current conditions, and reasonable and supportable forecasts. Early adoption is permitted. Topic 326 requires a modified retrospective approach by recording a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. ASU 2016-13 will be effective for the Company for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The adoption of this standard is not expected to have a material impact on the Company’s condensed combined consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” ASU 2019-12 simplifies the accounting for income taxes by eliminating certain exceptions related to intraperiod tax allocation, interim period income tax calculation methodology, and the recognition of deferred tax liabilities for outside basis differences. It also simplifies certain aspects of accounting for franchise taxes and clarifies the accounting for transactions that results in a step-up in the tax basis of goodwill. The Company adopted ASU 2019-12 on January 1, 2021. There were no significant income tax implications to the Company’s tax provision as a result of the change in guidance.

In March of 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASC 848, Reference Rate Reform) (“ASU 2020-04” or “Topic 848”) which provides guidance for contract modifications and certain hedging relationships associated with the transition from reference rates that are expected to be discontinued. The guidance provides optional expedients and exceptions for applying GAAP to contracts or other transactions affected by reference rate reform if certain criteria are met. The guidance was issued on March 12, 2020 and may be applied prospectively through December 31, 2022. The Company is evaluating applicable contracts and transactions to determine whether to elect the optional guidance. The adoption of this standard is not expected to have a material impact on the Company’s condensed combined consolidated financial statements.

NOTE 3 — GOING CONCERN

The accompanying condensed combined consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company’s financial position and operating results raise substantial doubt about its ability to continue as a going concern within one year after the date the condensed combined consolidated financial statements are issued. The Company has sustained net losses of $3,631 and $3,594 for the six months ended June 30, 2021 and 2020, respectively and has an accumulated deficit of $136,146 as of June 30, 2021. The ability of the Company to continue as a going concern is dependent upon (i) expanding operations, (ii) obtaining additional capital and (iii) reducing operating expenses and/or selling existing turbine assets should this be required to preserve liquidity. Management’s plan in this regard is to implement the Company’s business plan and to secure additional funds through equity or debt financing. There can be no assurance that such alternate financing, if available,

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can be obtained on acceptable terms. The condensed combined consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 4 — REVENUE RECOGNITION

Disaggregation of Revenue

The Company disaggregates revenue from contracts with customers by product type. The Company believes that this aggregates the payor types by nature, amount, timing, and uncertainty of its revenue streams. The following table summarizes the Company’s disaggregated revenues for the six months ended June 30, 2021 and 2020:

​	2021			2020
Manufactured product	​	$	1,276	​	$	1,658
Turbine service on sold product	​	​	1,601	​	​	1,120
Total non-lease revenue	​	$	2,877	​	$	2,778
Turbine leasing fleet revenue	​	​	7,272	​	​	10,024
Total revenue	​	$	10,149	​	$	12,802

Contract Balances

Contract liabilities consist of advance payments for goods as well as deferred revenue on service obligations and extended warranties. All of the Company’s deferred revenue is included in current liabilities under deferred revenue.

The following is a summary of the Company’s contract balances as of June 30, 2021 and December 31, 2020:

​	June 30, 2021			December 31, 2020
Turbine leasing fleet	​	$	1,088	​	$	1,548
Turbine service on sold product	​	​	194	​	​	318
Manufactured product	​	​	62	​	​	442
Other	​	​	110	​	​	153
Total trade accounts receivable	​	$	1,454	​	$	2,461
Contract assets	​	$	1,454	​	$	2,461
Allowance for doubtful accounts	​	​	(11)	​	​	(45)
Total trade accounts receivable, net	​	$	1,443	​	$	2,416

The amount of revenue recognized during the six months ended June 30, 2021 that was included in the deferred revenue on service obligations and extended warranty balance at December 31, 2020 was $126.

At June 30, 2021, the Company had $3,810 of remaining performance obligations, which are included in deferred revenue. The Company expects to recognize approximately 100% of its remaining performance obligations as revenue during the subsequent 12-month period. At December 31, 2020, the Company had $1,849 of remaining performance obligations, which are included in deferred revenue. The Company recognized $1,732 of the performance obligations as revenue during the six months ended June 30, 2021. The Company expects to recognize 100% of its remaining performance obligations that existed as of December 31, 2020 by the end of fiscal year 2021.

Bill-and-Hold Revenue

Certain customer arrangements consist of bill-and-hold characteristics under which the criteria for transfer of control is met, including the passing of title and significant risk and reward of ownership to the

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customers. Therefore, the customers are able to direct the use of the bill-and-hold inventory while the Company retains physical possession of the product until it is installed at a customer site at a point in time in the future. Revenue recognized in a bill-and-hold arrangement for the six months ended June 30, 2021 and 2020 was $0 and $1,618, respectively.

Lessor Revenue

The Company’s lessor portfolio includes only operating leases. The following table presents future operating lease payments under non-cancellable lease arrangements to be received as of June 30, 2021:

Six months ended December 31, 2021	$	4,921
2022	​	1,078
2023	​	60
Total	$	6,059

NOTE 5 — INVENTORY

Inventory is stated at the lower of cost or net realizable value and consisted of the following as of June 30, 2021 and December 31, 2020:

​	June 30, 2021			December 31, 2020
Raw materials	​	$	6,621	​	$	9,367
Work in process	​	​	3,284	​	​	935
Finished goods	​	​	2,424	​	​	3,357
Total inventories, net	​	$	12,329	​	$	13,659

NOTE 6 — PROPERTY AND EQUIPMENT

Property and equipment consisted of the following as of June 30, 2021 and December 31, 2020:

​	2021			2021
Turbines and other equipment	​	$	64,096	​	$	61,973
Machinery and equipment	​	​	5,167	​	​	5,146
Leasehold improvements	​	​	796	​	​	782
Fieldwork equipment	​	​	4,235	​	​	4,032
Computer equipment and software	​	​	654	​	​	1,074
Vehicles	​	​	305	​	​	274
Furniture and fixtures	​	​	540	​	​	540
Property, plant and equipment, gross	​	$	75,793	​	$	73,821
Accumulated depreciation	​	​	(41,651)	​	​	(38,432)
Construction in progress	​	​	153	​	​	1,117
Property, plant and equipment, net	​	$	34,295	​	$	36,506

The Company has equipment that is used by customers under lease arrangements. The remaining property and equipment are used by the Company for the manufacture of machines and related assets. Depreciation expense for equipment used by customers under lease arrangements was $2,167 and $2,766 for the six months ended June 30, 2021 and 2020, respectively. The gross asset cost and accumulated depreciation for equipment used by customers under lease arrangements as of June 30, 2021 were $45,574 and $21,279, respectively. The gross asset cost and accumulated depreciation for equipment used by customers under lease arrangements as of December 31, 2020 were $36,518 and $15,117, respectively. The Company

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recognized a gain on disposal of property and equipment of $32 for the six months ended June 30, 2021 and a gain on disposal of property and equipment of $57 for the six months ended June 30, 2020.

NOTE 7 — INTANGIBLE ASSETS

Intangible assets consisted of the following as of June 30, 2021 and December 31, 2020:

​	June 30, 2021			December 31, 2020
Patents	​	$	1,680	​	$	1,680
Accumulated amortization	​	​	(1,428)	​	​	(1,344)
Intangible assets, net	​	$	252	​	$	336

Definite-lived intangible assets had a weighted-average remaining useful life of 1.5 years and 2.0 years as of June 30, 2021 and December 31, 2020, respectively.

The amortization of intangible assets was $84 for each of the six months ended June 30, 2021 and 2020. The estimated annual amortization expense based on the intangible asset balance for the next two years as of June 30, 2021:

Six months ended December 31, 2021	$	84
2022	​	168
Total	$	252

NOTE 8 — DEFERRED REVENUE

Deferred revenue consists of billed amounts collected in advance from various customers for service obligations and deposits on future orders. The durations of the service agreements range between 12 and 120 months. Customer deposits on future orders are non-interest bearing and non-refundable. Deferred revenue was $3,810 and $1,849 as of June 30, 2021 and December 31, 2020, respectively.

NOTE 9 — LEASES

The Company is obligated under operating leases for locations and apartments in New Hampshire, Colorado, North Dakota, Texas and Canada. Minimum rent payments under operating leases are recognized on a straight-line basis over the term of the related leases. In December 2020, the Company entered into a lessee sublease agreement with Pioneer New Hampshire LLC for approximately 5,800 rentable square feet of office space in Portsmouth, New Hampshire. This lease, which was entered into when the Company vacated its previous Portsmouth office space, expires in June 2024 with options to renew for up to an additional six years. In January 2019, the Company entered into a lease agreement for warehouse and manufacturing space in Dover, New Hampshire, which was later amended on February 22, 2021, with approximate monthly payments of $22 which expires in May 2027. There are no future minimum lease payment obligations after June 2027. In January 2020, FLPS entered into the First Amendment to Office Lease (the “First Amendment”) with GPI Plaza Tower, LP to acquire approximately 1,978 of additional rentable square feet for the Colorado office space as provided in the original Office Lease dated February 19, 2018. The lease term is approximately 5.5 years and is approximately $301 per year.

The Company is also obligated under capital lease obligations related to vehicles and forklifts. Depreciation on these assets is recorded on a straight-line basis over the term of the lease and is included within depreciation expense. Minimum rent payments under operating leases are recognized on a straight-line basis over the term of the lease. The Company recorded rental expense of $964 and $1,096 related to the leases for the six months ended June 30, 2021 and 2020, respectively.

On December 29, 2020, the Company entered into a sublease with Pioneer New Hampshire LLC to relocate its corporate headquarters to 112 Corporate Drive, Portsmouth, New Hampshire, thereby leasing

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office space of approximately 5,800 square feet of rentable space. The lease for the premises is effective at February 2021 and has a term of approximately 3.5 years, with two optional renewal options of three years each. The minimum monthly rent under the terms of the lease is $7.

The future minimum lease payments under the Company’s capital and operating leases were as follows as of June 30, 2021:

​	Capital Leases			Operating Leases
Six months ended December 31, 2021	​	$	74	​	$	661
2022	​	​	140	​	​	1,097
2023	​	​	60	​	​	898
2024	​	​	—	​	​	550
2025	​	​	—	​	​	288
Thereafter	​	​	—	​	​	433
Total future minimum lease obligation	​	$	274	​	$	3,927
Less interest on capital leases	​	​	(18)	​	​	​
Net present value of capital lease obligations	​	$	256	​	​	​
Less current portion	​	​	(130)	​	​	​
Capital lease obligations, long term	​	$	126	​	​	​

NOTE 10 — INCOME TAXES

The income tax expense is composed of the following for the six months ended June 30, 2021 and 2020:

​	Six Months Ended June 30,
​	2021		2020
Loss before income taxes	​	(3,453)	​	(3,590)
Income tax expense	​	(178)	​	(4)
Net loss	​	(3,631)	​	(3,594)
Income tax as a percentage of loss before income taxes	​	(5.15)%	​	(0.11)%

The calculation of the overall income tax provision for the six months ended June 30, 2021 primarily consists of state and foreign income taxes. During the six-month period ended June 30, 2021, the Company recorded an income tax provision of $178 on loss before income taxes of $3,453. For the six months ended June 30, 2020, the Company recorded an income tax provision of $4 on loss before income taxes of $3,590. The effective tax rate for the six months ended June 30, 2021 differs from the U.S. statutory rate of 21% primarily due to full valuation allowance on the Company’s US and foreign deferred tax assets.

As of December 31, 2020, the Company’s net deferred tax assets are fully offset by a valuation allowance. The valuation allowance is determined in accordance with the provisions of ASC 740, Income Taxes, which require an assessment of both negative and positive evidence when measuring the need for a valuation allowance. The Company reassesses the need for a valuation allowance on a quarterly basis. Based off the evidence currently available and the Company’s history of losses, the Company is maintaining a full valuation as of June 30, 2021.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was enacted into law. The CARES Act is aimed at providing emergency relief and health care for individuals and businesses affected by the COVID-19 pandemic. The CARES Act, among other things, includes provisions related to refundable payroll tax credits, deferral of the employer portion of social security payments, expanded net operating loss application, modifications to the net interest deduction limitations,

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and technical corrections to tax depreciation methods for qualified improvement property. The Company has completed its assessment of the impact of the legislation, and there is no significant impact to the condensed consolidated financial statements due to the valuation allowance in the US.

NOTE 11 — INDEBTEDNESS

Debt consisted of the following as of June 30, 2021 and December 31, 2020:

​	June 30 2021			December 31, 2020
Line of credit	​	$	22,963	​	$	26,658
Note payable	​	​	—	​	​	2,352
Total debt	​	$	22,963	​	$	29,010
Less current debt	​	​	—	​	​	(1,300)
Total long-term debt	​	$	22,963	​	$	27,710

Line of Credit

On February 8, 2019, FLPS entered into a senior secured revolving credit facility (“the Credit Agreement”) with Texas Capital Bank, National Association (“TCB”). The initial commitment amount is for $30,000 and availability under the Credit Agreement is based on a borrowing base calculation of eligible assets and other conditions. The facility is backed by a first priority lien on substantially all of the assets of FLPS, and the maturity date of the facility is February 8, 2024. The facility contains various covenants that limits the Company’s ability to, among other things, make restricted payments. Interest is defined based on a tiered leverage ratio and an applicable margin of (i) 1.50% to 2.00% above the base rate for base rate loans, or (ii) 2.50% to 3.00% above the adjusted Eurodollar rate for Eurodollar rate loans. Leverage ratio means as of the last day of the last fiscal month of each fiscal quarter, the ratio of (i) all debt and (ii) annualized EBITDA. Base Rate means, for any day, the highest of (a) Prime Rate; (b) the sum of the Federal Funds Rate for the day plus half of one percent (0.50%); and (c) the adjusted Eurodollar Rate for the day plus one percent (1.00%). FLPS is charged a commitment fee based on the daily average unused portion of the revolving credit facility, and that fee ranges from 0.225% to 0.475% per daily average. Additionally, FLPS is charged a letter of credit fee of between 2.50% and 3.00% per quarter with respect to the amount of letters of credit issued under the revolving credit facility. The applicable margin for loans, the commitment fee and the letter of credit fee set forth above will vary quarterly based on the Company’s leverage ratio. Based on the leverage ratio applicable at June 30, 2021, the margin and base rate were 2.00% and 3.25%, respectively for base rate loans; the margin and Eurodollar rate loan were 3.00% and .09%, respectively for Eurodollar rate loans; the commitment fee for the unused portion of the revolving credit facility was 0.225%; and the letter of credit fee was 3.00%. As of June 30, 2021, $963 and $22,000 of the outstanding line of credit balance was subject to base rate loan interest and a Eurodollar rate loan interest, respectively. FLPS is subject to financial covenants of a maximum leverage ratio and minimum fixed charge coverage ratio to be tested quarterly. The maximum permitted leverage ratio is 3.50 to 1.00. The minimum fixed charge coverage ratio is 1.25 to 1.00.

On February 12, 2021, the Company entered into a Limited Waiver of Leverage Ratio (the “Waiver”) with TCB pursuant to which the foregoing default event under the Credit Agreement was waived. In consideration of the waiver, (i) the Company agreed to pay TCB a fee of $22 upon execution of the Waiver, (ii) the Company made a $1,500 EBITDA equity contribution to FLPS (the “Waiver Contribution”), and (iii) FLPS made a $1,500 prepayment of its obligations to TCB under the Credit Agreement (the “Prepayment”). The Waiver also amended the Credit Agreement to increase the annualized EBITDA used to calculate the quarterly financial covenants, as well as decrease the availability under the revolving credit facility, by the amount of the Waiver Contribution. FPS contributed $1,500 to the Company to fund the Waiver Contribution and Prepayment made to TCB.

Gross borrowings outstanding under this revolving credit facility amounted to $22,963 and $26,658 as of June 30, 2021 and December 31, 2020, respectively. This amount includes $10,000 of permitted distributions

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taken in 2019 as further described in Note 14. The Company incurred $156 and $27 in financing costs related to amendments to its existing revolving credit facility during the six months ended June 30, 2021 and 2020, respectively. Gross debt issuance cost was $1,108 and $953 as of June 30, 2021 and December 31, 2020, respectively. Related accumulated amortization was $430 and $323 as of June 30, 2021 and December 31, 2020, respectively. These financing costs were capitalized under deferred financing costs on the condensed combined consolidated balance sheet. Deferred financing costs are amortized to interest expense over the term of the agreement using the effective interest method. Amortization expense was $107 and $94 for the six months ended June 30, 2021 and 2020, respectively.

On January 27, 2020, FLPS entered into an amendment to the Credit Agreement (“First Amendment”) and First Amendment to Pledge and Security Agreement with TCB. Under the terms of the amendment, the borrowing base was amended to include certain non-turbine field equipment which was previously not included.

On August 28, 2020, FLPS entered into the Second Amendment to Credit Agreement with TCB. Under the terms of the amendment, certain terms within the borrowing base definition of accounts receivables relating to investment grade and non-investment grade customers were modified.

On December 21, 2020, FLPS entered into the Third Amendment to Credit Agreement with TCB. Under the terms of the amendment, FLPS ULC was added as an additional loan party to the Credit Agreement.

On February 12, 2021, FLPS amended the Credit Agreement to increase the annualized EBITDA used to calculate the quarterly financial covenants, as well as decrease the availability under the revolving credit facility by $1,500.

On June 29, 2021, FLPS entered into the Fourth Amendment to Credit Agreement with TCB. Under the terms of the amendment, there was a modification of the due date of the FLPS financial statements to be delivered to TCB and decrease the availability under the revolving credit facility by an additional $2,000, resulting in a total decrease of availability of $3,500 when combined with the aforementioned amendment on February 12, 2021. As of June 30, 2021 and December 31, 2020, the amount available for drawdown were $2,942 and $1,429, respectively.

PPP Loans

In 2020, the Company entered into loan agreements under the Small Business Administration (the “SBA”) Paycheck Protection Program (“PPP”) enabled by the Coronavirus Aid, Relief and Economic Security Act of 2020 (the “CARES Act”). On April 14, 2020, TCB entered into a note with FLPS and agreed to make available to FLPS a loan in the amount of $991. On May 6, 2020, Bank of America, N.A. (“Bank of America”) entered into a note with FEI and agreed to make available to FEI a loan in the amount of $1,361 (together, the “PPP Loans”). The PPP Loans bear interest at a rate per annum of 1.00%. The term of the PPP Loans are two years, ending April 14, 2022 and May 6, 2022, respectively.

On May 5, 2021, the Company received notice that the SBA had reviewed the forgiveness application of the FLPS PPP loan and provided forgiveness of the entire principal of $991 plus accrued interest of $10. On June 17, 2021, the Company received notice that the SBA had reviewed the forgiveness application of the FEI PPP loan and provided forgiveness of the entire principal of $1,361 plus accrued interest of $16. The Company accounted for the forgiveness on the PPP Loans in accordance with ASC 470 — Debt (“ASC 470”) and recorded a gain on extinguishment of debt on its condensed combined consolidated financial statements and related footnote disclosures. The Company recognized a gain on extinguishment of the PPP loans of $2,378 during the six months ended June 30, 2021 and is recorded to other income, net within the accompanying condensed combined consolidated statements of operations and comprehensive loss.

Future minimum principal payments due on the line of credit are as follows as of June 30, 2021:

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Six months ended December 31, 2021	$	—
2022	​	—
2023	​	—
2024	​	22,963
Total future principal payments	$	22,963

NOTE 12 — CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS

The Company’s two largest customers accounted for approximately 18% and 17% of total revenue for the six months ended June 30, 2021. The Company’s two largest customers accounted for approximately 24% and 13% of total revenue for the six months ended June 30, 2020. As of June 30, 2021, two customers accounted for 33% and 15% of the accounts receivable balance. As of December 31, 2020, two customers accounted for 15% and 14% of the accounts receivable balance. No single supplier accounted for more than 10% of the total cost of revenue for the six months ended June 30, 2021 and 2020.

Cash could potentially subject the Company to concentrations of credit risk. However, because the Company maintains its cash with high-quality, accredited financial institutions, such funds are subject to minimal credit risk. The Company may maintain balances with financial institutions in excess of federally insured limits. The Company has not experienced any losses historically in these accounts and believes it is not exposed to significant credit risk in its cash.

NOTE 13 — COMMITMENTS AND CONTINGENCIES

Litigation and Legal Proceedings

Any material legal, tax or regulatory proceedings regarding matters arising in the ordinary course of business, which involve the Company’s assessment to determine the probability of whether a loss will occur and, if probable, its best estimate of probable loss. The Company records and discloses losses when these losses are probable and reasonably estimable, and discloses matters when losses are probable but not estimable or when losses are reasonably possible. Legal costs related to the defense of loss contingencies are expensed as incurred. The Company is not currently involved in legal proceedings that could reasonably be expected to have a material adverse effect on our business, prospects, financial condition or results of operations.

Guarantees and Indemnifications

Between December 2015 and July 2021, FPS issued a series of promissory notes with various investors that together, along with FPS’ affiliates, account for a majority of FPS’ voting equity and representation of its board of directors (the “Investor Notes”). The Investor Notes bear interest at an annualized rate ranging between 8.0% and 12.0% and are pre-payable without penalty at any time. The Investor Notes have a maturity date of October 31, 2022. FPS has the option to receive monthly interest in cash or to accrue monthly interest.

Prior to the closing of the Credit Agreement in February 2019, the Investor Notes were secured by a first priority lien of all assets of the Company and its subsidiaries. In connection with closing of the Credit Agreement, all noteholders of the Investor Notes entered into a Subordination and Intercreditor Agreement with TCB whereby all Investor Notes currently in place, and all future Investor Notes in substantially the same form, were from thereon secured by a second priority lien of all assets of FLPS and its subsidiaries, while the Investor Notes retained their first priority lien in all assets of all other existing and future subsidiaries of FPS.

NOTE 14 — RELATED PARTY TRANSACTIONS

The Company distributed $394 and $10, respectively, to FPS during the six months ended June 30, 2021 and 2020. In addition, during the six months ended June 30, 2021 and 2020, $1,503 and $800, respectively, were re-contributed to the Company for working capital purposes. There are no terms and

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conditions associated with the repayment of either of these amounts. The contributions were recorded within the Company’s net parent investment at June 30, 2021 and 2020.

NOTE 15 — EMPLOYEE BENEFIT PLAN

The Company sponsors defined contribution 401(k) plans covering substantially all of its employees. The plans entitle employees, almost immediately after their start date, to make voluntary contributions to the plans. Contributions cannot exceed the maximum amount allowed under applicable provisions of the Internal Revenue Code (the “Code”). The Company provided a matching contribution of 100% up to 6% of base salary. Employees are vested in the matching contributions immediately. The Company’s contributions to the plans amounted to approximately $210 and $236 for six months ended June 30, 2021 and 2020, respectively.

NOTE 16 — INCENTIVE PLANS

FlexEnergy, Inc. 2013 Equity Incentive Plan

On January 1, 2013, FEI implemented a long-term compensation incentive plan under which employees, officers, directors and other individuals providing services to FEI are eligible to receive cash payment awards (the “2013 Plan”). The values of each eligible payment under the 2013 Plan has been fixed through the amendment made on October 27, 2016 and there will be no further grants made. No forfeitures have been recognized under the 2013 Plan. An aggregate payout of $633 is due to the participants on the earlier of January 1, 2023 or when certain change in control terms (as provided below) are met. Under the 2013 Plan, a “Change in Control” will have occurred if a single shareholder or shareholder group obtains effective control of FEI, or upon a liquidation or dissolution. The weighted average contractual life remaining is 1.44 years for options outstanding and exercisable. The liability of $528 and $492 is recorded within Other non-current liabilities on the accompanying condensed combined consolidated balance sheets as of June 30, 2021 and December 31, 2020, respectively. Share-based compensation expense was $36 for the 2013 Incentive Plan during the six months ended June 30, 2021 and 2020, respectively and was recorded in selling, general and administrative operating expenses on the accompanying condensed combined consolidated statements of operations and comprehensive loss.

FlexEnergy, Inc. 2016 Target Incentive Plan (Participation Plan)

On October 27, 2016, FEI adopted the 2016 Target Incentive Plan (the “2016 Plan”), which provides for the grant of cash payment awards totaling $3,249 to certain officers and employees, payable upon satisfaction of a performance condition (i.e. the occurrence of a Change in Control, as defined) and a service vesting condition (i.e. the vesting of an award based on continuous service) . Any payments due under the 2016 Plan are required to be paid within 60 days following a Change in Control (as defined) that constitutes a Qualifying Sale. Under the 2016 Plan, a “Change in Control” will have occurred if a single shareholder or shareholder group obtains effective control of FPS or acquires 50% or more than the fair market value of its assets.

Under the 2016 Plan, cash payment awards of $3,249 in aggregate were granted in October 2016, and the Company does not expect there will be any further awards. There is no settlement payment of an award under the 2016 Plan unless and until there is a Qualifying Sale which also constitutes a Change in Control of FEI prior to the earlier of a Termination Transaction or the termination of the 2016 Plan on January 1, 2026. The payments under the 2016 Plan are only due to the participants if certain change in control terms are met on or before the earlier of January 1, 2026. To constitute a Qualifying Sale, a sale or series of sales of assets or ownership must result in the holders of Series A Units of FPS receiving more than $64.00 per Series A Unit. A total of 1,000,000 Series A Units are currently issued and outstanding. The change in control term is a performance condition and therefore the Company does not accrue or recognize any compensation cost until such event is considered probable. No compensation cost has been recognized on these awards to date as the event is not considered probable.

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NOTE 17 — SUBSEQUENT EVENTS

The Company has evaluated subsequent events through June 4, 2021, the date these condensed combined consolidated financial statements were available to be issued, to ensure that this filing includes all appropriate footnote disclosure of events both recognized in the condensed combined consolidated financial statements as of June 30, 2021, and events which occurred subsequently but were not recognized in the condensed combined consolidated financial statements. The Company has concluded that other than as noted below, there were no subsequent events requiring adjustment to or disclosure in these condensed combined consolidated financial statements.

On August 16, 2021, FPS entered into the SAFE Transaction with RNS and TRF whereby each of RNS and TRF paid $1.00 million to FPS (with the option for FPS to call an additional $0.50 million from each) in exchange for the right to receive from FPS (i) if the underwriters’ over-allotment exercise is exercised, the Cash Payment, or (ii) if there is no over-allotment exercise or if the net proceeds received by FPS as a result of an over-allotment exercise are insufficient to pay the full Cash Payment to RNS and TRF, a number of the shares of FGS common stock issued to FPS in the Contribution Transaction equal to the amount invested minus 80% of the Cash Payment, divided by 80% of the issuance price per share in this offering. The proceeds of the SAFE Transaction were contributed by FPS to FEI and FLPS as capital.

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FLEXENERGY GREEN SOLUTIONS, INC.

Common Stock

Through and including                  , 2021 (the 25th day after the date of this prospectus), all dealers effecting transactions in our common stock, whether or not participating in our initial public offering, may be required to deliver a prospectus. This delivery requirement is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13.   OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth all expenses to be paid by us, other than underwriting discounts and commissions, upon completion of this offering. All amounts shown are estimates except for the SEC registration fee and the FINRA filing fee.

SEC registration fee	$	3,843
FINRA filing fee	$	9,500
Exchange listing fee	​	*
Printing and engraving expenses	​	*
Legal fees and expenses	​	*
Accounting fees and expenses	​	*
Transfer agent and registrar fees	​	*
Miscellaneous expenses	​	*
Total	$	*

*

To be provided by amendment.

ITEM 14.   INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 145 of the Delaware General Corporation Law authorizes the board of directors of a corporation to grant, and authorizes a court to award, indemnity to officers, directors and other corporate agents.

Our Certificate of Incorporation contains provisions that limit the liability of our directors for monetary damages to the fullest extent permitted by Delaware law. Consequently, our directors will not be personally liable to us or our stockholders for monetary damages for breach of the fiduciary duty of care, but will be liable for monetary damages for the following:

•

any breach of their duty of loyalty to our company or our stockholders;

•

any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;

•

unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the Delaware General Corporation Law; or

•

any transaction from which they derived an improper personal benefit.

Any amendment to, or repeal of, these provisions will not eliminate or reduce the effect of these provisions in respect of any act, omission or claim that occurred or arose prior to that amendment or repeal. If the Delaware General Corporation Law is amended to provide for further limitations on the personal liability of directors of corporations, then the personal liability of our directors will be further limited to the greatest extent permitted by the Delaware General Corporation Law.

In addition, our Certificate of Incorporation and Bylaws provide that we will indemnify and hold harmless, to the fullest extent permitted by the Delaware General Corporation Law, any director or officer who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”), by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or officer of the corporation or, while a director or officer of the corporation, is or was serving at the request of the

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corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys’ fees and other amounts) reasonably incurred. The foregoing rights to indemnification generally do not apply to a proceeding initiated by a director or officer unless the proceedings were approved by our board of directors, the indemnification is required by law or the director or officer is seeking enforcement of the indemnification and advancement rights. Our Certificate of Incorporation and our Bylaws will also provide that we must pay the expenses (including attorneys’ fees) incurred by a director or officer in defending any proceeding in advance of its final disposition, provided that such payment of expenses in advance of the final disposition of the proceeding will be made only upon receipt of an undertaking by such director or officer to repay all amounts advanced if it is ultimately determined that the director or officer is not entitled to be indemnified.

Further, we have entered into or will enter into indemnification agreements with each of our directors and executive officers that may be broader than the specific indemnification provisions contained in the Delaware General Corporation Law. These indemnification agreements require us, among other things, to indemnify our directors and executive officers against liabilities that may arise by reason of their status or service. These indemnification agreements also require us to advance all expenses incurred by the directors and executive officers prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in any such action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding. We believe that these agreements are necessary to attract and retain qualified individuals to serve as directors and executive officers.

The limitation of liability and indemnification provisions that are expected to be included in our Certificate of Incorporation, Bylaws and in indemnification agreements that we have entered into or will enter into with our directors and executive officers may discourage stockholders from bringing a lawsuit against our directors and executive officers for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against our directors and executive officers, even though an action, if successful, might benefit us and other stockholders. Further, a stockholder’s investment may be adversely affected to the extent that we pay the costs of settlement and damage awards against directors and executive officers as required by these indemnification provisions. At present, we are not aware of any pending litigation or proceeding involving any person who is or was one of our directors, officers, employees or other agents or is or was serving at our request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, for which indemnification is sought, and we are not aware of any threatened litigation that may result in claims for indemnification.

We have obtained insurance policies under which, subject to the limitations of the policies, coverage is provided to our directors and executive officers against loss arising from claims made by reason of breach of fiduciary duty or other wrongful acts as a director or executive officer, including claims relating to public securities matters, and to us with respect to payments that may be made by us to these directors and executive officers pursuant to our indemnification obligations or otherwise as a matter of law.

Certain of our non-employee directors may, through their relationships with their employers, be insured and/or indemnified against certain liabilities incurred in their capacity as members of our board of directors.

The underwriting agreement to be filed as Exhibit 1.1 to this registration statement will provide for indemnification by the underwriters of us and our officers and directors for certain liabilities arising under the Securities Act or otherwise.

ITEM 15.   RECENT SALES OF UNREGISTERED SECURITIES

In connection with the Contribution Transaction,          shares of common stock will be issued to FlexEnergy Power Solutions, LLC. The common stock will be issued in reliance on the exemption contained in Section 4(a)(2) of the Securities Act, as a transaction by an issuer not involving any public offering.

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ITEM 16.   EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)

Exhibits.   See the Exhibit Index attached to this registration statement, which is incorporated by reference herein.

(b)

Financial Statement Schedules.   All financial statement schedules are omitted because the information called for is not required or is shown either in the combined consolidated financial statements or in the notes thereto.

ITEM 17.   UNDERTAKINGS

The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act, may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes:

(1)   For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(2)   For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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EXHIBIT INDEX

Exhibit Number	Exhibit Description
1.1	Form of Underwriting Agreement.
2.1	Form of Contribution Agreement, to be in effect at the consummation of this offering.
3.1	Form of Second Amended and Restated Certificate of Incorporation, to be in effect at the consummation of this offering.
3.2	Form of Amended and Restated Bylaws, to be in effect at the consummation of this offering.
4.1*	Form of Warrant to be issued to Roth Capital Partners, LLC in connection with this offering.
5.1*	Opinion of Rutan & Tucker, LLP.
10.1+	Form of 2021 Incentive Award Plan and forms of award agreements thereunder, to be in effect at the consummation of this offering.
10.2+	Form of Indemnity Agreement between FlexEnergy Green Solutions, Inc. and each of its directors and executive officers, to be in effect at the consummation of this offering.
10.3	Form of Registration Rights Agreement among FlexEnergy Green Solutions, Inc., FlexEnergy Power Solutions, LLC, RNS Flex, LLC and TRF Platform Holdings, LLC to be in effect at the consummation of this offering.
10.4+	Form of Board Chairperson Compensation Agreement between FlexEnergy Green Solutions, Inc. and George Walker, to be in effect at the consummation of this offering.
10.5+	Form of Executive Employment Agreement between FlexEnergy Energy Systems, Inc. and Mark Schnepel, to be in effect at the consummation of this offering.
10.6+	Form of Executive Employment Agreement between FlexEnergy Energy Systems, Inc. and Wes Kimmel, to be in effect at the consummation of this offering.
10.7+	Form of Executive Employment Agreement between Flex Leasing Power & Service LLC and Doug Baltzer, to be in effect at the consummation of this offering.
10.8	Sublease between Pioneer New Hampshire LLC and FlexEnergy Systems, Inc. dated December 23, 2020.
10.9	Office Lease between Flex Leasing Power & Service LLC and GPI Plaza Tower, LP, dated February 19, 2018.
10.10	First Amendment to Office Lease between Flex Leasing Power & Service LLC and GPI Plaza Tower, LP, dated August 29, 2019.
10.11	Sublease between Flex Leasing Power & Service LLC and Energes, LLC, dated April 12, 2016.
10.12	Lease Agreement between Flex Leasing Power Service ULC and Bennett Financial Corp, dated December 1, 2015.
10.13	Lease Renewal Agreement between Flex Leasing Power Service ULC and Bennett Financial Corp, dated July 1, 2020.
10.14	Commercial Lease between Flex Leasing Power & Service LLC and West Epley LLC dated August 15, 2019.
10.15	Commercial Lease Amendment between Flex Leasing Power & Service LLC and West Epley LLC dated June 1, 2020.
10.16	Lease Agreement between FlexEnergy Energy Systems, Inc. and 1 Progress LLC, dated January 2019.
10.17	First Lease Amendment between FlexEnergy Energy Systems, Inc. and 1 Progress LLC, dated February 22, 2021.
10.18	Credit Agreement among Flex Leasing & Power Service LLC, as borrower, each of the other loan parties from time to time party thereto, the lenders from time to time party thereto and Texas Capital Bank, National Association, as administrative agent, swing line lender and L/C issuer, dated February 8, 2019.

II-4

Exhibit Number	Exhibit Description
10.19	Pledge and Security Agreement among Flex Leasing Power & Service LLC, Flex Power Co. and Texas Capital Bank, National Association dated February 8, 2019.
10.20	Parent Pledge and Limited Guaranty Agreement among FlexEnergy Power Solutions, LLC and Texas Capital Bank, National Association dated February 8, 2019.
10.21	Subordination and Intercreditor Agreement among RNS Flex, LLC, Energy Special Situations Fund II, L.P., ESS Participation Fund II, L.P., TRF Platform Holdings, LLC, FlexEnergy Power Solutions, LLC, Flex Leasing Power & Service LLC and Texas Capital Bank, National Association dated February 8, 2019.
10.22	First Amendment to Credit Agreement and First Amendment to Pledge and Security Agreement among Flex Leasing & Power Service LLC, as borrower, each of the other borrowers and loan parties party thereto, the lenders party thereto and Texas Capital Bank, National Association, as administrative agent, dated January 27, 2020.
10.23	Second Amendment to Credit Agreement among Flex Leasing & Power Service LLC, as borrower, each of the other borrowers and loan parties party thereto, the lenders party thereto and Texas Capital Bank, National Association, as administrative agent, dated August 28, 2020.
10.24	Third Amendment to Credit Agreement among Flex Leasing & Power Service LLC, as borrower, each of the other borrowers and loan parties party thereto, the lenders party thereto and Texas Capital Bank, National Association, as administrative agent, dated December 22, 2020.
10.25	Letter Agreement Regarding Limited Waiver of Leverage Ration Financial Covenant among Flex Leasing Power & Service LLC, each of the other borrowers and loan parties party thereto and Texas Capital Bank, National Association, as administrative agent, dated February 12, 2021.
10.26	Fourth Amendment to Credit Agreement among Flex Leasing Power & Service LLC, each of the other borrowers and loan parties party thereto, the lenders party thereto and Texas Capital Bank, National Association, as administrative agent, dated June 29, 2021.
10.27	Joinder Agreement by Flex Leasing and Power Service ULC, in favor of Texas Capital Bank, National Association, as administrative agent, dated December 22, 2020.
10.28	Joinder Agreement and Amendment to Subordination and Intercreditor Agreement by Flex Leasing and Power Service ULC, in favor of Texas Capital Bank, National Association, as administrative agent, and acknowledged by the existing loan parties and subordinated lenders thereto dated December 22, 2020.
10.29	Amendment to Security Agreement by Flex Power Co. dated December 22, 2020.
10.30	Canadian Pledge and Security Agreement between Flex Leasing and Power Service ULC and Texas Capital Bank, National Association, as administrative agent, dated December 22, 2020.
10.31	Stock Pledge Agreement among FlexEnergy Power Solutions, LLC, RNS Flex, LLC, Energy Special Situations Fund II, L.P., ESS Participation Fund II, L.P. and TRF Platform Holdings, LLC, to be in effect at the consummation of this offering.
21.1	List of Subsidiaries of the Registrant.
23.1	Consent of Deloitte & Touche LLP, independent registered public accounting firm.
23.2*	Consent of Rutan & Tucker, LLP (included in Exhibit 5.1).
24.1	Power of Attorney (see page II-6).

*

To be filed by amendment.

+

Management contract or compensatory plan or arrangement.

II-5

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this registration statement on Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in Portsmouth, New Hampshire, on the 7th day of October, 2021.

FLEXENERGY GREEN SOLUTIONS, INC.

By:

/s/ Mark Schnepel

Name:

Mark Schnepel

Title:

Chief Executive Officer   

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Mark Schnepel and Wes Kimmel, jointly and severally, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign the Registration Statement on Form S-1 of FlexEnergy Green Solutions, Inc. and any or all amendments (including post-effective amendments) thereto and any new registration statement with respect to the offering contemplated thereby filed pursuant to Rule 462(b) of the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises hereby ratifying and confirming all that said attorneys-in-fact and agents, or his or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement on Form S-1 has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Mark Schnepel Mark Schnepel	Chief Executive Officer (Principal Executive Officer)	October 7, 2021
/s/ Wes Kimmel Wes Kimmel	Chief Financial Officer (Principal Financial and Accounting Officer)	October 7, 2021
/s/ Thomas Denison Thomas Denison	Director	October 7, 2021
/s/ Patrick Connelly Patrick Connelly	Director	October 7, 2021
/s/ George Walker George Walker	Director	October 7, 2021

II-6

EX-1.1

Exhibit 1.1

FLEXENERGY GREEN SOLUTIONS, INC.

UNDERWRITING AGREEMENT

________, 2021

Roth Capital Partners, LLC

888 San Clemente Drive, Suite 400

Newport Beach, CA 92660

Ladies and Gentlemen:

FlexEnergy Green Solutions, Inc., a Delaware corporation (the “Company”), proposes, subject to the terms and conditions stated herein, to issue and sell to Roth Capital Partners, LLC (the “Underwriter”) an aggregate of [●] authorized but unissued shares (the “Firm Shares”) of common stock, par value $0.0001 per share (the “Common Stock”), of the Company. FlexEnergy Power Solutions, LLC, the stockholder of the Company (the “Selling Stockholder”), proposes to sell to the Underwriter, upon the terms and conditions set forth in Section 4 hereof, up to an additional [●] shares of Common Stock (the “Option Shares”). The Firm Shares and the Option Shares are hereinafter collectively referred to as the “Shares”. The Shares, the Underwriter Warrants (as defined below) and the Underwriter Warrant Shares (as defined below) are collectively referred to as the “Securities.”

The Company, the Selling Stockholder and the Underwriter hereby confirm their agreement as follows:

1.Registration Statement and Prospectus.

The Company has prepared and filed with the Securities and Exchange Commission (the “Commission”) a registration statement covering the Shares on Form S-1 (File No. 333-___________) under the Securities Act of 1933, as amended (the “Securities Act”), and the rules and regulations (the “Rules and Regulations”) of the Commission thereunder, and such amendments to such registration statement (including post effective amendments) as may have been required to the date of this Agreement. Such registration statement, as amended (including any post effective amendments), has been declared effective by the Commission. Such registration statement, including amendments thereto (including post effective amendments thereto) and all documents and information deemed to be a part of the Registration Statement through incorporation by reference or otherwise at the time of effectiveness thereof (the “Effective Time”), the exhibits and any schedules thereto at the Effective Time or thereafter during the period of effectiveness and the documents and information otherwise deemed to be a part thereof or included therein by the Securities Act or otherwise pursuant to the Rules and Regulations at the Effective Time or thereafter during the period of effectiveness, is herein called the “Registration Statement.” If the Company has filed or files an abbreviated registration statement pursuant to Rule 462(b) under the Securities Act (the “Rule 462 Registration Statement”), then any reference herein to the term Registration Statement shall include such Rule 462 Registration Statement. Any preliminary prospectus included in the Registration Statement or filed with the Commission pursuant to Rule 424(a) under the Securities Act is hereinafter called a “Preliminary Prospectus.” The Preliminary Prospectus relating to the Shares that was included in the Registration Statement at the time the Registration Statement was declared effective by the Commission is hereinafter called the “Pricing Prospectus.”

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The Company is filing with the Commission pursuant to Rule 424 under the Securities Act a final prospectus covering the Shares, which includes the information permitted to be omitted therefrom at the Effective Time by Rule 430A under the Securities Act. Such final prospectus, as so filed, is hereinafter called the “Final Prospectus.” The Final Prospectus, the Pricing Prospectus and any preliminary prospectus in the form in which they were included in the Registration Statement or filed with the Commission pursuant to Rule 424 under the Securities Act is hereinafter called a “Prospectus.” Reference made herein to any Preliminary Prospectus, the Pricing Prospectus or to the Prospectus shall be deemed to refer to and include any documents incorporated by reference therein and any reference to any amendment or supplement to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any document filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations of the Commission thereunder, incorporated by reference in such Preliminary Prospectus or the Prospectus, as the case may be.

2.Representations and Warranties of the Company Regarding the Offering.

(a)The Company represents and warrants to, and agrees with, the Underwriter, as of the date hereof, and as of the Closing Date (as defined in Section 4(c) below) and as of each Option Closing Date (as defined in Section 4(d) below), as follows:

(i)No Material Misstatements or Omissions. At each time of effectiveness, at the date hereof, at the Closing Date, and at each Option Closing Date, if any, the Registration Statement and any post-effective amendment thereto complied or will comply in all material respects with the requirements of the Securities Act and the Rules and Regulations and did not, does not, and will not, as the case may be, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Time of Sale Disclosure Package (as defined in Section 2(a)(v)(A)(1) below) as of [●] (Eastern time) (the “Applicable Time”) on the date hereof, and at the Closing Date and on each Option Closing Date, if any, and the Final Prospectus, as amended or supplemented, as of its date, at the time of filing pursuant to Rule 424(b) under the Securities Act, and at the Closing Date and at each Option Closing Date, if any, and any individual Written Testing-the-Waters Communication, when considered together with the Time of Sale Disclosure Package, did not, does not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. The representations and warranties set forth in the two immediately preceding sentences shall not apply to statements in or omissions from the Registration Statement, the Time of Sale Disclosure Package or any Prospectus in reliance upon, and in conformity with, written information furnished to the Company by the Underwriter specifically for use in the preparation thereof, which written information is described in Section 7(g). The Registration Statement contains all exhibits and schedules required to be filed by the Securities Act or the Rules and Regulations. No order preventing or suspending the effectiveness or use of the Registration Statement or any Prospectus is in effect and no proceedings for such purpose have been instituted or are pending, or, to the knowledge of the Company, are contemplated or threatened by the Commission.

(ii)Marketing Materials. The Company has not distributed any prospectus or other offering material in connection with the offering and sale of the Shares other than the Time of Sale Disclosure Package and the roadshow or investor presentations delivered to and approved by the Underwriter for use in connection with the marketing of the offering of the Shares (the “Marketing Materials”).

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(iii)Emerging Growth Company. The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act (an “Emerging Growth Company”).

(iv)Testing-the-Waters Communications. The Company (i) has not alone engaged in any Testing-the-Waters Communication and (ii) has not authorized anyone to engage in Testing-the-Waters Communications. The Company has not distributed any Testing-the-Waters Communication that is a written communication within the meaning of Rule 405 under the Securities Act (“Written Testing-the-Waters Communications”), other than those previously provided to the Underwriter and listed on Schedule II hereto. “Testing-the-Waters Communication” means any oral or written communication with potential investors undertaken in reliance on Section 5(d) of the Securities Act. The Company has filed publicly on the Electronic Data Gathering, Analysis, and Retrieval system (“EDGAR”) at least 15 calendar days prior to any “road show” (as defined in Rule 433 und the Securities Act), any confidentially submitted registration statement and registration statement amendments relating to the offer and sale of Securities. Each Written Testing-the-Waters Communications, did not, as of the Applicable Time, and at all times through the completion of the public offer and sale of Shares will not, include any information that conflicted, conflicts or will conflict with the information contained in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus.

(v)Accurate Disclosure. (A) The Company has provided a copy to the Underwriter of each Issuer Free Writing Prospectus (as defined below) used in the sale of Shares. The Company has filed all Issuer Free Writing Prospectuses required to be so filed with the Commission, and no order preventing or suspending the effectiveness or use of any Issuer Free Writing Prospectus is in effect and no proceedings for such purpose have been instituted or are pending, or, to the knowledge of the Company, are contemplated or threatened by the Commission. When taken together with the rest of the Time of Sale Disclosure Package or the Final Prospectus, no Issuer Free Writing Prospectus, as of its issue date and at all subsequent times through the completion of the public offer and sale of Shares, has, does or will include (1) any untrue statement of a material fact or omission to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (2) information that conflicted, conflicts or will conflict with the information contained in the Registration Statement or the Final Prospectus. The representations and warranties set forth in the immediately preceding sentence shall not apply to statements in or omissions from the Time of Sale Disclosure Package, the Final Prospectus or any Issuer Free Writing Prospectus in reliance upon, and in conformity with, written information furnished to the Company by the Underwriter specifically for use in the preparation thereof, which written information is described in Section 7(g). As used in this paragraph and elsewhere in this Agreement:

(1)       “Time of Sale Disclosure Package” means the Prospectus most recently filed with the Commission before the time of this Agreement, each Issuer Free Writing Prospectus, and the description of the transaction provided by the Underwriter included on Schedule IV.

(2)       “Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433 under the Securities Act, relating to the Shares that (A) is required to be filed with the Commission by the Company, or (B) is exempt from filing pursuant to Rule 433(d)(5)(i) or (d)(8) under the Securities Act, in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g) under the Securities Act.

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(B)           At the time of filing of the Registration Statement and at the date hereof, the Company was not and is not an “ineligible issuer,” as defined in Rule 405 under the Securities Act or an “excluded issuer” as defined in Rule 164 under the Securities Act.

(C)           Each Issuer Free Writing Prospectus listed on Schedule I satisfied, as of its issue date and at all subsequent times through the Prospectus Delivery Period, all other conditions as may be applicable to its use as set forth in Rules 164 and 433 under the Securities Act, including any legend, record-keeping or other requirements.

(vi)Financial Statements. The consolidated financial statements of the Company, together with the related notes and schedules, included in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus comply in all material respects with the applicable requirements of the Securities Act and the Exchange Act, and the rules and regulations of the Commission thereunder, and fairly present, in all material respects, the consolidated financial condition of the Company as of the dates indicated and the consolidated results of operations and changes in cash flows for the periods therein specified in conformity with U.S. generally accepted accounting principles (“GAAP”) consistently applied throughout the periods involved, except as may be expressly stated in the notes thereto. Except as have been included in the Registration Statement, the Time of Sale Disclosure Package or the Final Prospectus, no other financial statements or schedules are required under the Securities Act, the Exchange Act, or the Rules and Regulations to be included in the Registration Statement, the Time of Sale Disclosure Package or the Final Prospectus.

(vii)Pro Forma Financial Information. The pro forma financial statements included or incorporated by reference in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus include assumptions that provide a reasonable basis for presenting the significant effects directly attributable to the transactions and events described therein, the related pro forma adjustments give appropriate effect to those assumptions, and the pro forma adjustments reflect the proper application of those adjustments to the historical financial statements amounts in the pro forma financial statements included or incorporated by reference in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus. The pro forma financial statements included or incorporated by reference in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus comply as to form in all material respects with the application requirements of Regulation S-X under the Exchange Act. No other pro forma financial information or schedules are required under the Securities Act, the Exchange Act, or the rules and regulations thereunder to be included in the Registration Statement, the Time of Sale Disclosure Package or the Final Prospectus.

(viii)Independent Accountants. To the Company’s knowledge, Deloitte & Touche LLP, which has expressed its opinion with respect to the financial statements and schedules included in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus, is an independent public accounting firm with respect to the Company within the meaning of the Securities Act and the Rules and Regulations.

4 

(ix)Accounting and Disclosure Controls. Except as disclosed in the Registration Statement, the Time of Sale Disclosure Package or the Final Prospectus, the Company and its subsidiaries maintain systems of “internal control over financial reporting” (as defined under Rules 13a-15 and 15d-15 under the Exchange Act) that comply with the requirements of the Exchange Act and have been designed by, or under the supervision of, their respective principal executive and principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including, but not limited to, internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences; and (v) the interactive data in eXtensible Business Reporting Language included in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus fairly present the information called for in all material respects and are prepared in accordance with the Commission’s rules and guidelines applicable thereto. Since the date of the latest audited financial statements included in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus, there has been no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

The Company maintains disclosure controls and procedures that have been designed to ensure that material information relating to the Company and its subsidiaries is made known to the Company’s principal executive officer and principal financial officer by others within those entities; and, except as disclosed in the Registration Statement, the Time of Sale Disclosure Package or the Final Prospectus, such disclosure controls and procedures are effective.

(x)Forward-Looking Statements. The Company has a reasonable basis for, and made in good faith, each “forward-looking statement” (within the meaning of Section 27A of the Securities Act or Section 21E of the Exchange Act) contained in the Registration Statement, the Time of Sale Disclosure Package or the Final Prospectus.

(xi)Statistical and Market-Related Data. Nothing has come to the attention of the Company that has caused it to believe that the statistical and market-related data included in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus are not based on or derived from sources that are accurate and reliable in all material respects.

(xii)Trading Market. The Common Stock is registered pursuant to Section 12(b) of the Exchange Act and is approved for listing on Nasdaq Capital Market (“Nasdaq”). There is no action pending by the Company or, to the Company’s knowledge, by Nasdaq to delist the Common Stock from Nasdaq, nor has the Company received any notification that Nasdaq is contemplating terminating such listing. When issued, the Shares will be listed on Nasdaq. The Company has taken all actions it deems reasonably necessary or advisable to take on or prior to the date of this Agreement to ensure that it will be in compliance in all material respects with all applicable corporate governance requirements set forth in the rules of Nasdaq that are then in effect and applicable to the Company, and will take all action it deems reasonably necessary or advisable to ensure that it will be in compliance in all material respects with other applicable corporate governance requirements set forth in Nasdaq rules not currently in effect upon and all times after the effectiveness of such requirements, to the extent applicable to the Company.

(xiii)Absence of Manipulation. Other than excepted activity pursuant to Regulation M under the Exchange Act, the Company has not taken, directly or indirectly, any action that is designed to or that has constituted or that would reasonably be expected to cause or result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares. For the sake of clarity, actions by the Underwriter or persons acting on its behalf will not constitute direct or indirect action by the Company for purposes of this Section.

5 

(xiv)Investment Company Act. The Company is not and, after giving effect to the offering and sale of the Shares and the application of the net proceeds thereof will not be an “investment company,” as such term is defined in the Investment Company Act of 1940, as amended.

3.             Representations and Warranties Regarding the Company.

(a)The Company represents and warrants to the Underwriter, as of the date hereof and as of the Closing Date and as of each Option Closing Date (if any), as follows:

(i)Good Standing. Each of the Company and its subsidiaries has been duly organized and is validly existing as a corporation or other entity in good standing under the laws of its jurisdiction of incorporation or organization. Each of the Company and its subsidiaries has the power and authority (corporate or otherwise) to own its properties and conduct its business as currently being carried on and as described in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus, and is duly qualified to do business as a foreign corporation or other entity in good standing in each jurisdiction where the nature of its properties or the conduct of its business makes such qualification necessary, except where the failure to so qualify has not had or would not be reasonably likely to result in a material adverse effect upon the business, properties, operations, condition (financial or otherwise) or results of operations of the Company and its subsidiaries, taken as a whole, or in its ability to perform its obligations under this Agreement (“Material Adverse Effect”).

(ii)Authorization. The Company has the power and authority to enter into this Agreement and the Underwriter Warrants and to authorize, issue and sell the Shares and the Underwriter Warrant Shares as contemplated by this Agreement and the Underwriter Warrants. This Agreement and the Underwriter Warrants have been duly authorized by the Company, and when executed and delivered by the Company, and will constitute the valid, legal and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as rights to indemnity hereunder may be limited by federal or state securities laws or public policy and except as enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting the rights of creditors generally and subject to general principles of equity.

(iii)Contracts. The execution, delivery and performance of this Agreement and the Underwriter Warrants and the consummation of the transactions herein and therein contemplated will not (A) result in a breach or violation of any of the terms and provisions of, or constitute a default under, any law, order, rule or regulation to which the Company or any subsidiary is subject, or by which any property or asset of the Company or any subsidiary is bound or affected, except to the extent that the breach or violation is not reasonably likely to result in a Material Adverse Effect, (B) conflict with, result in any violation or breach of, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any right of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) (a “Default Acceleration Event”) of, any agreement, lease, credit facility, debt, note, bond, mortgage, indenture or other instrument (the “Contracts”) or obligation or other understanding to which the Company or any subsidiary is a party or by which any property or asset of the Company or any subsidiary is bound or affected, except to the extent that such conflict, violation, breach, default, or Default Acceleration Event is not reasonably likely to result in a Material Adverse Effect, or (C) result in a breach or violation of any of the terms and provisions of, or constitute a default under, the Company’s Certificate of Incorporation or by-laws.

6 

(iv)No Violations of Governing Documents. Neither the Company nor any of its subsidiaries is in violation, breach or default under its certificate of incorporation, by-laws or other equivalent organizational or governing documents.

(v)Consents. No consents, approvals, orders, authorizations or filings are required on the part of the Company in connection with the execution, delivery or performance of this Agreement and the Underwriter Warrants and the issue and sale of the Shares, except (A) the registration under the Securities Act of the Shares, which has been effected, (B) the necessary filings and approvals from Nasdaq to list the Shares, (C) such consents, approvals, authorizations, registrations or qualifications as may be required under state or foreign securities or Blue Sky laws and the rules of the Financial Industry Regulatory Authority, Inc. (“FINRA”) in connection with the purchase and distribution of the Shares by the Underwriter, (D) such consents and approvals as have been obtained and are in full force and effect, and (E) such consents, approvals, orders, authorizations and filings the failure of which to make or obtain is not reasonably likely to result in a Material Adverse Effect.

(vi)Capitalization. The Company has an authorized capitalization as set forth in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus. All of the issued and outstanding shares of capital stock of the Company are duly authorized and validly issued, fully paid and nonassessable, and have been issued in compliance with all applicable securities laws, and conform in all material respects to the description thereof in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus. All of the issued shares of capital stock of or other equity interests in each subsidiary of the Company have been duly and validly authorized and issued, are fully paid and non-assessable (except as nonassessability may be affected by Sections 18-303, 18-607 and 18-803 of the Delaware Limited Liability Company Act) and, except as set forth in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus, are owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims. Except for the issuances of options or restricted stock in the ordinary course of business, since the respective dates as of which information is provided in the Registration Statement, the Time of Sale Disclosure Package or the Final Prospectus, the Company has not entered into or granted any convertible or exchangeable securities, options, warrants, agreements, contracts or other rights in existence to purchase or acquire from the Company any shares of the capital stock of the Company. The Shares, when issued and paid for as provided herein, will be duly authorized and validly issued, fully paid and nonassessable, will be issued in compliance with all applicable securities laws, and will be free of preemptive, registration or similar rights and will conform to the description of the capital stock of the Company contained in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus. The shares of Common Stock issuable upon the exercise of the Underwriter Warrants (the “Underwriter Warrant Shares”), when issued, paid for and delivered upon due exercise of the Underwriter Warrants will be duly authorized and validly issued, fully paid and nonassessable, will be issued in compliance with all applicable securities laws, and will be free of preemptive, registration or similar rights. The Underwriter Warrant Shares have been reserved for issuance. The Underwriter Warrants, when issued, will conform in all material respects to the descriptions thereof set forth in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus.

7 

(vii)Taxes. Each of the Company and its subsidiaries has (a) filed all foreign, federal, state and local tax returns (as hereinafter defined) required to be filed with taxing authorities prior to the date hereof or has duly obtained extensions of time for the filing thereof and (b) paid all taxes (as hereinafter defined) shown as due and payable on such returns that were filed and has paid all taxes imposed on or assessed against the Company or such respective subsidiary that are due and payable, except for any taxes that are currently being contested in good faith or that, if not paid, are not reasonably likely to result in a Material Adverse Effect. The provisions for taxes payable, if any, shown on the financial statements included in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus are adequate, in accordance with GAAP, for all accrued and unpaid taxes, whether or not disputed, and for all periods to and including the dates of such consolidated financial statements. To the Company’s knowledge, no issues have been raised (and are currently pending) by any taxing authority in connection with any of the returns or taxes asserted as due from the Company or its subsidiaries, and no waivers of statutes of limitation with respect to the returns or collection of taxes have been given by or requested from the Company or its subsidiaries. The term “taxes” mean all federal, state, local, foreign, and other net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, windfall profits, customs, duties or other taxes, fees, assessments, or charges of any kind whatever, together with any interest and any penalties, additions to tax, or additional amounts with respect thereto. The term “returns” means all returns, declarations, reports, statements, and other documents required to be filed in respect to taxes.

(viii)Material Change. Except as disclosed in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus, since the date of the most recent financial statements included in the Registration Statement, Time of Sale Disclosure Package or Final Prospectus, (a) neither the Company nor any of its subsidiaries has incurred any material liabilities or obligations, direct or contingent, or entered into any material transactions other than in the ordinary course of business, (b) the Company has not declared or paid any dividends or made any distribution of any kind with respect to its capital stock; (c) there has not been any change in the capital stock of the Company or any of its subsidiaries (other than a change in the number of outstanding shares of Common Stock due to the issuance of shares upon the exercise of outstanding options or warrants, upon the conversion of outstanding shares of preferred stock or other convertible securities or the issuance of restricted stock awards or restricted stock units under the Company’s existing stock awards plan, or any new grants thereof in the ordinary course of business), (d) there has not been any material change in the Company’s long-term or short-term debt, and (e) there has not been the occurrence of any Material Adverse Effect.

(ix)Absence of Proceedings. Except to the extent disclosed in the Registration Statement, the Time of Sale Disclosure Package or the Final Prospectus, there is no pending or, to the knowledge of the Company, threatened, action, suit or proceeding to which the Company or any of its subsidiaries is a party or of which any property or assets of the Company or any of its subsidiaries is the subject before or by any court or governmental agency, authority or body, or any arbitrator or mediator, that is reasonably likely to result in a Material Adverse Effect

(x)Permits. The Company and each of its subsidiaries holds, and is in compliance with, all franchises, grants, authorizations, licenses, permits, easements, consents, certificates and orders (“Permits”) of any governmental or self-regulatory agency, authority or body required for the conduct of its business, and all such Permits are in full force and effect, in each case except where the failure to hold, or comply with, any of them is not reasonably likely to result in a Material Adverse Effect or adversely affect the consummation of the transactions contemplated by this Agreement.

(xi)Good Title. The Company and each of its subsidiaries have good and valid title to all property (whether real or personal) described in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus as being owned by them that are material to the business of the Company, in each case free and clear of all liens, claims, security interests, other encumbrances or defects, except those that are disclosed in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus and those that are not reasonably likely to result in a Material Adverse Effect. The property held under lease by the Company and its subsidiaries is held by them under valid, subsisting and enforceable leases with only such exceptions with respect to any particular lease as do not interfere in any material respect with the conduct of the business of the Company and its subsidiaries.

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(xii)Intellectual Property. The Company and each of its subsidiaries owns or possesses or has valid right to use all patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses, inventions, trade secrets and similar rights (“Intellectual Property”) necessary for the conduct of the business of the Company and its subsidiaries as currently carried on and as described in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus. To the knowledge of the Company, no action or use by the Company or any of its subsidiaries involve or give rise to any infringement of, or license or similar fees for, any Intellectual Property of others, except where such action, use, license or fee is not reasonably likely to result in a Material Adverse Effect. Neither the Company nor any of its subsidiaries has received any notice alleging any such infringement or fee. To the Company’s knowledge, none of the technology employed by the Company or any subsidiary has been obtained or is being used by the Company or such subsidiary in violation of any contractual obligation binding on the Company or such subsidiary or, to the Company’s knowledge, any of the officers, directors or employees of the Company or any subsidiary, or, to the Company’s knowledge, otherwise in violation of the rights of any persons, except in the case of violations that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(xiii)Employment Matters. There is (A) no unfair labor practice complaint pending against the Company, or any of its subsidiaries, nor to the Company’s knowledge, threatened against it or any of its subsidiaries before the National Labor Relations Board, any state or local labor relation board or any foreign labor relations board, and no grievance or arbitration proceeding arising out of or under any collective bargaining agreement is so pending against the Company or any of its subsidiaries, or, to the Company’s knowledge, threatened against it and (B) no labor disturbance by the employees of the Company or any of its subsidiaries exists or, to the Company’s knowledge, is imminent, and the Company is not aware of any existing or imminent labor disturbance by the employees of any of its or its subsidiaries, principal suppliers, manufacturers, customers or contractors, that could reasonably be expected, singularly or in the aggregate, to have a Material Adverse Effect. The Company is not aware that any key employee or significant group of employees of the Company or any subsidiary plans to terminate employment with the Company or any such subsidiary.

(xiv)ERISA Compliance. No “prohibited transaction” (as defined in Section 406 of the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder (“ERISA”), or Section 4975 of the Internal Revenue Code of 1986, as amended from time to time (the “Code”)) or “accumulated funding deficiency” (as defined in Section 302 of ERISA) or any of the events set forth in Section 4043(b) of ERISA (other than events with respect to which the thirty (30)-day notice requirement under Section 4043 of ERISA has been waived) has occurred or could reasonably be expected to occur with respect to any employee benefit plan of the Company or any of its subsidiaries which would reasonably be expected to, singularly or in the aggregate, have a Material Adverse Effect. Each employee benefit plan of the Company or any of its subsidiaries is in compliance in all material respects with applicable law, including ERISA and the Code. The Company and its subsidiaries have not incurred and could not reasonably be expected to incur any material liability under Title IV of ERISA with respect to the termination of, or withdrawal from, any pension plan (as defined in ERISA). Each pension plan for which the Company or any of its subsidiaries would have any liability that is intended to be qualified under Section 401(a) of the Code is so qualified, and to the Company’s knowledge nothing has occurred, whether by action or by failure to act, that could, singularly or in the aggregate, cause the loss of such qualification.

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(xv)Environmental Matters. The Company and its subsidiaries are in compliance with all foreign, federal, state and local rules, laws and regulations relating to the use, treatment, storage and disposal of hazardous or toxic substances or waste and protection of health and safety or the environment which are applicable to their businesses, except where the failure to comply has not had and would not reasonably be expected to have, singularly or in the aggregate, a Material Adverse Effect. There has been no storage, generation, transportation, handling, treatment, disposal, discharge, emission, or other release of any kind of toxic or other wastes or other hazardous substances by, due to, or caused by the Company or any of its subsidiaries (or, to the Company’s knowledge, any other entity for whose acts or omissions the Company or any of its subsidiaries is or may otherwise be liable) upon any of the property now or previously owned or leased by the Company or any of its subsidiaries, or upon any other property, in violation of any law, statute, ordinance, rule, regulation, order, judgment, decree or permit or which would, under any law, statute, ordinance, rule (including rule of common law), regulation, order, judgment, decree or permit, give rise to any liability, except for any violation or liability which has not had and would not reasonably be expected to have, singularly or in the aggregate, a Material Adverse Effect; and there has been no disposal, discharge, emission or other release of any kind onto such property or into the environment surrounding such property of any toxic or other wastes or other hazardous substances with respect to which the Company or any of its subsidiaries has knowledge.

(xvi)SOX Compliance. The Company has taken all actions it deems reasonably necessary or advisable to take on or prior to the date of this Agreement to assure that, upon and at all times after the effectiveness of the Registration Statement, it will be in compliance in all material respects with all applicable provisions of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and all rules and regulations promulgated thereunder or implementing the provisions thereof that are then in effect and will take all action it deems reasonably necessary or advisable to assure that it will be in compliance in all material respects with other applicable provisions of the Sarbanes-Oxley Act not currently in effect upon it and at all times after the effectiveness of such provisions.

(xvii)Money Laundering Laws. The operations of the Company and its subsidiaries are and have been conducted at all times in compliance in all material respects with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Entity (collectively, the “Money Laundering Laws”); and no action, suit or proceeding by or before any Governmental Entity involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened. “Governmental Entity” shall be defined as any arbitrator, court, governmental body, regulatory body, administrative agency or other authority, body or agency (whether foreign or domestic) having jurisdiction over the Company or any of its subsidiaries or any of their respective properties, assets or operations.

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(xviii)Foreign Corrupt Practices Act. Neither the Company nor, any of its subsidiaries, or any director or officer of the Company or any subsidiary, nor, to the knowledge of the Company, any employee, representative, agent, affiliate of the Company or any of its subsidiaries or any other person acting on behalf of the Company or any of its subsidiaries, is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”), including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA in any material respect and the Company and, to the knowledge of the Company, its affiliates have conducted their businesses in compliance with the FCPA and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.

(xix)OFAC. Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any director, officer, employee, representative, agent or affiliate of the Company or any of its subsidiaries or any other person acting on behalf of the Company or any of its subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly use the proceeds of the offering of the Shares contemplated hereby, or lend, contribute or otherwise make available such proceeds to any person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.

(xx)Insurance. The Company and each of its subsidiaries carries, or is covered by, insurance in such amounts and covering such risks as is commercially reasonable for the conduct of its business and the value of its properties.

(xxi)Books and Records. The minute books of the Company and each of its subsidiaries have been made available to the Underwriter and counsel for the Underwriter, and such books (i) contain a complete summary of all meetings and actions of the board of directors (including each board committee) and stockholders of the Company (or analogous governing bodies and interest holders, as applicable), and each of its subsidiaries since the time of its respective incorporation or organization through the date of the latest meeting and action, and (ii) accurately in all material respects reflect all transactions referred to in such minutes.

(xxii)No Undisclosed Contracts. There is no Contract or document required by the Securities Act or by the Rules and Regulations to be described in the Registration Statement, the Time of Sale Disclosure Package or in the Final Prospectus or to be filed as an exhibit to the Registration Statement (“Material Contracts”) that is not so described or filed therein as required; and all descriptions of any Material Contracts contained in the Registration Statement, the Time of Sale Disclosure Package and in the Final Prospectus are accurate and complete descriptions of the Material Contracts in all material respects. Other than as described in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus, no Material Contract has been suspended or terminated for convenience or default by the Company or any subsidiary party thereto or any of the other parties thereto, and neither the Company nor any of its subsidiaries has received notice, and the Company has no knowledge, of any such pending or threatened suspension or termination.

(xxiii)No Undisclosed Relationships. No relationship, direct or indirect, exists between or among the Company or any of its subsidiaries on the one hand, and the directors, officers, stockholders (or analogous interest holders), customers or suppliers of the Company or any of its subsidiaries on the other hand, that is required to be described in the Registration Statement, the Time of Sale Disclosure Package or the Final Prospectus and that is not so described.

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(xxiv)Insider Transactions. There are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees of indebtedness by the Company or any of its subsidiaries to or for the benefit of any of the officers or directors of the Company, any of its subsidiaries or any of their respective family members, except as disclosed in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus. All transactions between the Company and its directors, officers or other control persons of the Company have been duly approved by the board of directors of the Company, or duly appointed committees or officers thereof, if and to the extent required under applicable law.

(xxv)No Registration Rights. No person or entity has the right to require registration of shares of Common Stock or other securities of the Company or any of its subsidiaries within 180 days of the date hereof because of the filing or effectiveness of the Registration Statement or otherwise, except for persons and entities who have expressly waived such right in writing, or who have been given timely and proper written notice and have failed to exercise such right within the time or times required under the terms and conditions of such right, or who have acknowledged in writing that such right has been satisfied by the inclusion of securities in the Registration Statement. Except as described in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus, there are no persons with registration rights or similar rights to have any securities registered by the Company or any of its subsidiaries under the Securities Act.

(xxvi)Continued Business. No supplier, customer, distributor or sales agent of the Company or any subsidiary has notified the Company or any subsidiary that it intends to discontinue or decrease the rate of business done with the Company or any subsidiary, except where such discontinuation or decrease has not resulted in and would not reasonably be likely to result in a Material Adverse Effect.

(xxvii)No Finder’s Fee. There are no claims, payments, issuances, arrangements or understandings for services in the nature of a finder’s, consulting or origination fee with respect to the introduction of the Company to the Underwriter or the sale of the Shares hereunder or any other arrangements, agreements, understandings, payments or issuances with respect to the Company that may affect the Underwriter’s compensation, as determined by FINRA.

(xxviii)No Fees. Except as disclosed to the Underwriter in writing, the Company has not made any direct or indirect payments (in cash, securities or otherwise) to (i) any person, as a finder’s fee, investing fee or otherwise, in consideration of such person raising capital for the Company or introducing to the Company persons who provided capital to the Company, (ii) any FINRA member, or (iii) any person or entity that has any direct or indirect affiliation or association with any FINRA member within the 12-month period prior to the date on which the Registration Statement was filed with the Commission (“Filing Date”) or thereafter.

(xxix)Proceeds. None of the net proceeds of the offering of the Shares will be paid by the Company to any participating FINRA member or any affiliate or associate of any participating FINRA member, except as specifically authorized herein.

(xxx)No FINRA Affiliations. To the Company’s knowledge, no (i) officer or director of the Company or its subsidiaries, (ii) owner of 5% or more of any class of the Company’s securities or (iii) owner of any amount of the Company’s unregistered securities acquired within the 180-day period prior to the Filing Date, has any direct or indirect affiliation or association with any FINRA member. The Company will advise the Underwriter and counsel to the Underwriter if it becomes aware that any officer, director of the Company or its subsidiaries or any owner of 5% or more of any class of the Company’s securities is or becomes an affiliate or associated person of a FINRA member participating in the offering of the Shares.

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(xxxi)No Financial Advisor. Other than the Underwriter, no person has the right to act as an underwriter or as a financial advisor to the Company in connection with the transactions contemplated hereby.

(xxxii)Certain Statements. The statements set forth in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus under the captions “Description of Capital Stock”, “Material U.S. Federal Income Tax Consequences to Non-U.S. Holders” and “Shares Eligible for Future Sale” insofar as they purport to describe the provisions of the laws and documents referred to therein, are accurate, complete and fair in material respects.

(xxxiii) Prior Sales of Securities. Except as set forth in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus, the Company has not sold or issued any shares of Common Stock during the six-month period preceding the date hereof, including any sales pursuant to Rule 144A under, or Regulations D or S of, the Securities Act, other than shares issued pursuant to employee benefit plans, stock option plans or other employee compensation plans or pursuant to outstanding preferred stock, options, rights or warrants or other outstanding convertible securities.

(b)Any certificate signed by any officer of the Company in connection with this Agreement and delivered to the Underwriter or to counsel for the Underwriter shall be deemed a representation and warranty by the Company to the Underwriter as to the matters covered thereby.

4.Purchase, Sale and Delivery of Shares.

(a)On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth, the Company agrees to issue and sell the Firm Shares, and the Underwriter agrees to purchase the Firm Shares. The purchase price to be paid by the Underwriter to the Company for each Firm Share shall be $[●] per share (the “Purchase Price”).

(b)The Selling Stockholder hereby grants to the Underwriter the option to purchase some or all of the Option Shares and, upon the basis of the warranties and representations and subject to the terms and conditions herein set forth, the Underwriter shall have the right to purchase at the Purchase Price all or any portion of the Option Shares as may be necessary to cover over-allotments made in connection with the transactions contemplated hereby. This option may be exercised by the Underwriter at any time and from time to time on or before the thirtieth (30^th) day following the date hereof, by written notice to the Selling Stockholder (the “Option Notice”). The Option Notice shall set forth the aggregate number of Option Shares as to which the option is being exercised, and the date and time when the Option Shares are to be delivered (such date and time being herein referred to as the “Option Closing Date”); provided, however, that the Option Closing Date shall not be earlier than the Closing Date (as defined below) nor earlier than the first business day after the date on which the option shall have been exercised nor later than the fifth business day after the date on which the Option Notice has been delivered to the Selling Stockholder unless the Selling Stockholder and the Underwriter otherwise agree. If the Underwriter elects to purchase less than all of the Option Shares, the Selling Stockholder agrees to sell to the Underwriter the number of Option Shares specified in the Option Notice.

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(c) Payment of the Purchase Price for and delivery of the Option Shares shall be made on an Option Closing Date in the same manner and at the same office as the payment for the Firm Shares as set forth in subparagraph (d) below.

(d)The Firm Shares and Option Shares will be delivered by the Company to the Underwriter, against payment of the Purchase Price therefor by wire transfer of same day funds payable to the order of the Company at the offices of Roth Capital Partners, LLC, 888 San Clemente Drive, Suite 400, Newport Beach, CA 92660, or such other location as may be mutually acceptable, at 6:00 a.m. Pacific Time, on the third (or if the Firm Shares and Option Shares are priced, as contemplated by Rule 15c6-1(c) under the Exchange Act, after 4:30 p.m. Eastern time, the fourth) full business day following the date hereof, or at such other time and date as the Underwriter and the Company determine pursuant to Rule 15c6-1(a) under the Exchange Act, or, in the case of the Option Shares, at such date and time set forth in the Option Notice. The time and date of delivery of the Firm Shares is referred to herein as the “Closing Date.” On the Closing Date and the Option Closing Date, the Company shall deliver the Firm Shares or the Option Shares, as applicable, which shall be registered in the name or names and shall be in such denominations as the Underwriter may request at least one (1) business day before the Closing Date, to the account of the Underwriter, which delivery shall be made through the facilities of the Depository Trust Company’s DWAC system unless otherwise requested by the Underwriter.

(e)On the Closing Date, the Company shall issue to the Underwriter (and/or its designees), warrants (the “Underwriter Warrants”), in form and substance acceptable to the Underwriter, for the purchase of an aggregate of [●] shares of Common Stock, which shall be registered in the name or names and shall be in such denominations as the Underwriter may request at least one (1) business day before the Closing Date.

5.Covenants.

(a)The Company covenants and agrees with the Underwriter as follows:

(i)The Company shall prepare the Final Prospectus in a form approved by the Underwriter and file such Final Prospectus pursuant to Rule 424(b) under the Securities Act not later than the Commission’s close of business on the second business day following the execution and delivery of this Agreement, or, if applicable, such earlier time as may be required by the Rules and Regulations.

(ii)During the period beginning on the date hereof and ending on the later of the Closing Date or such date as the Final Prospectus is no longer required by the Securities Act to be delivered in connection with sales by an underwriter or dealer (the “Prospectus Delivery Period”), prior to amending or supplementing the Registration Statement, including any Rule 462 Registration Statement, the Time of Sale Disclosure Package or the Final Prospectus, the Company shall furnish to the Underwriter for review and comment a copy of each such proposed amendment or supplement, and the Company shall not file any such proposed amendment or supplement to which the Underwriter reasonably objects.

(iii)During the Prospectus Delivery Period, the Company shall promptly advise the Underwriter in writing (A) of the receipt of any comments of, or requests for additional or supplemental information from, the Commission, (B) of the time and date of any filing of any post-effective amendment to the Registration Statement or any amendment or supplement to the Time of Sale Disclosure Package, the Final Prospectus or any Issuer Free Writing Prospectus, (C) of the time and date that any post-effective amendment to the Registration Statement becomes effective and (D) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any order preventing or suspending its use or the use of the Time of Sale Disclosure Package, the Final Prospectus or any Issuer Free Writing Prospectus, or of any proceedings to remove, suspend or terminate from listing or quotation the Common Stock from any securities exchange upon which it is listed for trading or included or designated for quotation, or of the threatening or initiation of any proceedings for any of such purposes. If the Commission shall enter any such stop order at any time during the Prospectus Delivery Period, the Company will use its reasonable efforts to obtain the withdrawal or lifting of such order at the earliest possible moment. Additionally, the Company agrees that it shall comply with the provisions of Rules 424(b), 430A, 430B or 430C as applicable, under the Securities Act and will use its reasonable efforts to confirm that any filings made by the Company under Rule 424(b) or Rule 433 were received in a timely manner by the Commission (without reliance on Rule 424(b)(8) or 164(b) of the Securities Act).

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(iv)(A) During the Prospectus Delivery Period, the Company will comply with all requirements imposed upon it by the Securities Act, and by the Rules and Regulations, as from time to time in force, and by the Exchange Act, so far as necessary to permit the continuance of sales of or dealings in the Shares as contemplated by the provisions hereof, the Time of Sale Disclosure Package, the Registration Statement and the Final Prospectus. If during the Prospectus Delivery Period any event occurs the result of which would cause the Final Prospectus (or if the Final Prospectus is not yet available to prospective purchasers, the Time of Sale Disclosure Package) to include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances then existing, not misleading, or if during such period it is necessary or appropriate in the opinion of the Company or its counsel or the Underwriter or counsel to the Underwriter to amend the Registration Statement or supplement the Final Prospectus (or if the Final Prospectus is not yet available to prospective purchasers, the Time of Sale Disclosure Package) to comply with the Securities Act, the Company will promptly notify the Underwriter, allow the Underwriter the opportunity to provide reasonable comments on such amendment, prospectus supplement or document, and will amend the Registration Statement or supplement the Final Prospectus (or if the Final Prospectus is not yet available to prospective purchasers, the Time of Sale Disclosure Package) or file such document (at the expense of the Company) so as to correct such statement or omission or effect such compliance.

(B)       If at any time during the Prospectus Delivery Period there occurred or occurs an event or development the result of which such Issuer Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement or any Prospectus or included or would include, when taken together with the Time of Sale Disclosure Package, an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing at that subsequent time, not misleading, the Company will promptly notify the Underwriter and will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.

(v)The Company will use its commercially reasonable efforts to cooperate with the Underwriter to qualify the Shares for sale under the securities laws of such jurisdictions as the Underwriter reasonably designates and to continue such qualifications in effect so long as required for the distribution of the Shares, except that the Company shall not be required in connection therewith to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified, to execute a general consent to service of process in any state or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise subject.

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(vi) During the Prospectus Delivery Period, the Company will furnish to the Underwriter and counsel to the Underwriter copies of the Registration Statement, each Prospectus, any Issuer Free Writing Prospectus, and all amendments and supplements to such documents, in each case as soon as available and in such quantities as the Underwriter may from time to time reasonably request.

(vii)The Company will make generally available to its security holders as soon as practicable, but in any event not later than 15 months after the end of the Company’s current fiscal quarter, an earnings statement (which need not be audited) covering a 12-month period that shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 of the Rules and Regulations.

(viii)The Company, whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated, will pay or cause to be paid (A) all expenses (including transfer taxes allocated to the respective transferees) incurred in connection with the delivery to the Underwriter of the Shares (including all fees and expenses of the registrar and transfer agent of the Shares), and the cost of preparing and printing stock certificates, (B) all expenses and fees (including, without limitation, fees and expenses of the Company’s counsel) in connection with the preparation, printing, filing, delivery, and shipping of the Registration Statement (including the financial statements therein and all amendments, schedules, and exhibits thereto), the Shares, the Time of Sale Disclosure Package, any Prospectus, the Final Prospectus, any Issuer Free Writing Prospectus and any amendment thereof or supplement thereto, (C) all actual, reasonable and documented filing fees and actual, reasonable and documented fees and disbursements of the Underwriter’s counsel incurred in connection with the qualification of the Shares for offering and sale by the Underwriter or by dealers under the securities or blue sky laws of the states and other jurisdictions that the Underwriter shall designate, (D) the actual, reasonable and documented filing fees and reasonable fees and disbursements of counsel to the Underwriter incident to any required review and approval by FINRA, of the terms of the sale of the Shares, (F) listing fees, if any, and (G) all other costs and expenses incident to the performance of its obligations hereunder that are not otherwise specifically provided for herein. The Company will reimburse the Underwriter for its actual, reasonable and documented out-of-pocket expenses, including actual, reasonable and documented legal fees and disbursements, incurred by the Underwriter in connection with the purchase and sale of the Shares contemplated hereby up to an aggregate of $[●] (including amounts payable pursuant to clauses (C) and (D) above); without the Company’s prior written consent, such consent not to be unreasonably withheld or delayed and in no event more than $[●] in the aggregate. If this Agreement is terminated by the Underwriter in accordance with the provisions of Section 6 or Section 9, the Company will reimburse the Underwriter for all actual, reasonable and documented out-of-pocket disbursements (including, but not limited to, actual, reasonable and documented fees and disbursements of counsel, travel expenses, postage, facsimile and telephone charges) incurred by the Underwriter in connection with its investigation, preparing to market and marketing the Shares or in contemplation of performing its obligations hereunder.

(ix)The Company intends to apply the net proceeds from the sale of the Shares to be sold by it hereunder for the purposes set forth in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus under the heading “Use of Proceeds”.

(x)Other than excepted activity pursuant to Regulation M under the Exchange Act, the Company will not take, directly or indirectly, during the Prospectus Delivery Period, any action designed to or which might reasonably be expected to cause or result in, or that has constituted, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares. For the sake of clarity, actions by the Underwriter or persons acting on its behalf will not constitute direct or indirect action by the Company for purposes of this Section.

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(xi)The Company represents and agrees that, unless it obtains the prior written consent of the Underwriter, and the Underwriter represents and agrees that, unless it obtains the prior written consent of the Company, it has not made and will not make any offer relating to the Securities that would constitute an Issuer Free Writing Prospectus; provided that the prior written consent of the parties hereto shall be deemed to have been given in respect of the free writing prospectuses included in Schedule I. Any such free writing prospectus consented to by the Company and the Underwriter is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company represents that it has treated or agrees that it will treat each Permitted Free Writing Prospectus as an “issuer free writing prospectus,” as defined in Rule 433, and has complied or will comply with the requirements of Rule 433 applicable to any Permitted Free Writing Prospectus, including timely Commission filing where required, legending and record-keeping.

(xii)The Company agrees that, without the prior written consent of the Underwriter, it will not, during the period ending 180 days after the date hereof (“Lock-Up Period”), (i) offer, pledge, issue, sell, contract to sell, purchase, contract to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock; or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Common Stock, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise; or (iii) file any registration statement with the Commission relating to the offering of any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock, except for a registration statement on Form S-4 in connection with a business combination transaction or a registration statement on Form S-8 with respect to the registration of shares of Common Stock to be issued under an equity incentive plan for Company employees. The restrictions contained in the preceding sentence shall not apply to (1) the Shares to be sold hereunder, (2) the issuance of Common Stock upon the exercise of options or warrants (including the Underwriter Warrants), the settlement or vesting of restricted stock units or restricted stock awards, the conversion of outstanding preferred stock or other outstanding convertible securities, or the occurrence of issuance conditions set forth in a SAFE or similar agreement disclosed as outstanding in the Registration Statement (excluding exhibits thereto), the Time of Sale Disclosure Package, and the Final Prospectus, (3) the issuance of employee stock options not exercisable during the Lock-Up Period and the grant of restricted stock awards or restricted stock units or shares of Common Stock pursuant to equity incentive plans described in the Registration Statement (excluding exhibits thereto), the Time of Sale Disclosure Package and the Final Prospectus, or (4) the issuance of Common Stock or any securities convertible into, or exercisable or exchangeable for, Common Stock in connection with any acquisition or strategic investment (including any joint venture, marketing, distribution, collaboration, license, strategic alliance or partnership) or in connection with any debt facility established by the Company, including with any commercial bank or venture debt lender, provided, however, that in the case of an issuance pursuant to this clause (4), it shall be a condition to the issuance that the recipient execute an agreement reasonably satisfactory to the Underwriter stating that the recipient is receiving and holding the securities subject to restrictions substantially similar to those set forth in Exhibit A.

(xiii)The Company hereby agrees, during a period of three years from the effective date of the Registration Statement, to furnish to the Underwriter copies of all reports or other communications (financial or other) furnished to shareholders, and to deliver to the Underwriter as soon as reasonably practicable upon availability, copies of any reports and financial statements furnished to or filed with the Commission or any national securities exchange on which any class of securities of the Company is listed; provided, that any information or documents available on EDGAR shall be considered furnished for purposes of this Section 5(a)(xiii).

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(xiv)The Company hereby agrees to engage and maintain, at its expense, a registrar and transfer agent for the Common Stock.

(xv)The Company hereby agrees to use its reasonable best efforts to obtain approval to list the Shares and the Underwriter Warrant Shares on Nasdaq.

(xvi)The Company hereby agrees not to take, directly or indirectly, any action designed to cause or result in, or that has constituted or might reasonably be expected to constitute, under the Exchange Act or otherwise, the stabilization or manipulation of the price of any securities of the Company to facilitate the sale or resale of the Shares.

(xvii)The Company will promptly notify the Underwriter if the Company ceases to be an Emerging Growth Company at any time prior to the later of (a) the end of the Prospectus Delivery Period and (b) the expiration of the Lock-Up Period.

(b)The Selling Stockholder covenants and agrees with the Underwriter as follows:

(i)The Selling Stockholder, whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated, will pay or cause to be paid (A) all expenses (including transfer taxes allocated to the respective transferees) incurred in connection with the delivery to the Underwriter of the Option Shares to be sold by the Selling Stockholder hereunder.

(ii)The Selling Stockholder hereby agrees that, without the prior written consent of the Underwriter, it will not, during the Lock-Up Period, (i) offer, pledge, sell, contract to sell, purchase, contract to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock; or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Common Stock, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise. The restrictions contained in the preceding sentence shall not apply to (1) the Shares to be sold hereunder, (2) the issuance of Common Stock upon the exercise of options or warrants disclosed as outstanding in the Registration Statement (excluding exhibits thereto) or the Prospectus, (3) the issuance of employee stock options not exercisable during the Lock-Up Period and the grant of restricted stock pursuant to equity incentive plans described in the Registration Statement (excluding exhibits thereto) and the Prospectus.

(iii)The Selling Stockholder will deliver to the Underwriter prior to the applicable Closing Date a properly completed and executed United States Treasury Department Form W-8BEN-E.

(iv)During the Prospectus Delivery Period, the Selling Stockholder will advise the Underwriter promptly, and if requested by the Underwriter, will confirm such advice in writing, of any change in information relating to such Selling Stockholder in the Registration Statement, the Time of Sale Disclosure Package or any Prospectus.

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(v)The Selling Stockholder agrees that it will not prepare or have prepared on its behalf or use or refer to any “free writing prospectus” (as such term is defined in Rule 405 under the Act), and agrees that it will not distribute any written materials in connection with the offer or sale of the Shares.

6.Conditions of the Underwriter’s Obligations. The obligations of the Underwriter hereunder to purchase the Shares are subject to the accuracy, as of the date hereof, on the Closing Date, and on each Option Closing Date (as if made on the Closing Date or such Option Closing Date, as applicable), of and compliance with all representations, warranties and agreements of the Company and the Selling Stockholder contained herein, the performance by the Company and the Selling Stockholder of its obligations hereunder and the following additional conditions:

(a)If filing of the Final Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, is required under the Securities Act or the Rules and Regulations, the Company shall have filed the Final Prospectus (or such amendment or supplement) or such Issuer Free Writing Prospectus with the Commission in the manner and within the time period so required (without reliance on Rule 424(b)(8) or 164(b) under the Securities Act); the Registration Statement shall remain effective; no stop order suspending the effectiveness of the Registration Statement or any part thereof, any Rule 462 Registration Statement, or any amendment thereof, nor suspending or preventing the use of the Time of Sale Disclosure Package, any Prospectus, the Final Prospectus or any Issuer Free Writing Prospectus shall have been issued; no proceedings for the issuance of such an order shall have been initiated or, to the Company’s knowledge, threatened by the Commission; any request of the Commission for additional information (to be included in the Registration Statement, the Time of Sale Disclosure Package, any Prospectus, the Final Prospectus, any Issuer Free Writing Prospectus or otherwise) shall have been complied with to the reasonable satisfaction of the Underwriter.

(b)The Shares and the Underwriter Warrant Shares shall be approved for listing on Nasdaq, subject to official notice of issuance and evidence of satisfactory distribution.

(c)FINRA shall have raised no objection to the fairness and reasonableness of the underwriting terms and arrangements.

(d)The Underwriter shall not have reasonably determined and advised the Company that the Registration Statement, the Time of Sale Disclosure Package, any Prospectus, the Final Prospectus, or any amendment thereof or supplement thereto, or any Issuer Free Writing Prospectus, contains an untrue statement of fact which, in the reasonable opinion of the Underwriter, is material, or omits to state a fact which, in the Underwriter’s reasonable opinion, is material and is required to be stated therein or necessary to make the statements therein not misleading.

(e)On or after the date hereof (i) no downgrading shall have occurred in the rating accorded any of the Company’s securities by any “nationally recognized statistical organization,” as that term is defined by the Commission for purposes of Rule 436(g)(2) under the Securities Act, and (ii) no such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any of the Company’s securities.

(f)On the Closing Date and on each Option Closing Date, there shall have been furnished to the Underwriter the opinion and negative assurance letters of Rutan & Tucker, LLP, counsel to the Company, each dated the Closing Date or the Option Closing Date, as applicable, and addressed to the Underwriter, in form and substance reasonably satisfactory to the Underwriter.

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(g) On the Closing Date and on each Option Closing Date, there shall have been furnished to the Underwriter the negative assurance letter of K&L Gates LLP, counsel to the Underwriter, dated the Closing Date or the Option Closing Date, as applicable, and addressed to the Underwriter, in form and substance reasonably satisfactory to Underwriter.

(h)On the Closing Date and on each Option Closing Date, there shall have been furnished to the Underwriter the opinion of legal counsel to the Selling Stockholder, dated the Closing Date or the Option Closing Date, as applicable, and addressed to the Underwriter, in form and substance reasonably satisfactory to the Underwriter.

(i)The Underwriter shall have received a letter of Deloitte & Touche LLP, on the date hereof and on the Closing Date and on each Option Closing Date, addressed to the Underwriter, confirming that they are independent public accountants within the meaning of the Securities Act and are in compliance with the applicable requirements relating to the qualifications of accountants under Rule 2-01 of Regulation S-X of the Commission, and confirming the conclusions and findings of said firm with respect to the financial information; provided, however, that the requested comfort procedures must be reasonable and customary and in accordance with generally accepted auditing standards that require the information to be generated by or derived from accounting records subject to ordinary auditing procedures.

(j)On the Closing Date and on each Option Closing Date, there shall have been furnished to the Underwriter a certificate, dated the Closing Date and on each Option Closing Date and addressed to the Underwriter, signed by the chief executive officer and the chief financial officer of the Company, solely in their capacities as officers of the Company, to the effect that:

(i)The representations and warranties of the Company in this Agreement that are qualified by materiality or by reference to any Material Adverse Effect are true and correct in all respects, and all other representations and warranties of the Company in this Agreement are true and correct, in all material respects, as if made at and as of the Closing Date and on the Option Closing Date, and the Company has complied in all material respects with all the agreements and satisfied all the conditions on its part required to be performed or satisfied at or prior to the Closing Date or on the Option Closing Date, as applicable;

(ii)No stop order or other order (A) suspending the effectiveness of the Registration Statement or any part thereof or any amendment thereof, (B) suspending the qualification of the Shares for offering or sale, or (C) suspending or preventing the use of the Time of Sale Disclosure Package, any Prospectus, the Final Prospectus or any Issuer Free Writing Prospectus, has been issued, and no proceeding for that purpose has been instituted or, to their knowledge, is contemplated by the Commission or any state or regulatory body; and

(iii)There has been no occurrence of any event resulting or reasonably likely to result in a Material Adverse Effect during the period from and after the date of this Agreement and prior to the Closing Date or on the Option Closing Date, as applicable.

(k)On the Closing Date and each Option Closing Date, there shall have been furnished to the Underwriter certificates, dated the Closing Date or the Option Closing Date, as applicable, and addressed to the Underwriter, signed by the Selling Stockholder, to the effect that the representations and warranties of the Selling Stockholder in this Agreement are true and correct, in all material respects, as if made at and as of the Closing Date or the Option Closing Date, as applicable, and the Selling Stockholder has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date or the Option Closing Date.

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(l) On or before the date hereof, the Underwriter shall have received duly executed lock-up agreements (each a “Lock-Up Agreement”) in the form set forth on Exhibit A hereto, by and between the Underwriter and each of the parties specified in Schedule III.

If the Underwriter, in its sole discretion, agrees to release or waive the restrictions set forth in the Lock-Up Agreement for an officer or director of the Company and provides the Company with notice of the impending release or waiver at least three business days before the effective date of the release or waiver, the Company agrees to announce the impending release or waiver by a press release substantially in the form of Exhibit B hereto through a major news service at least two business days before the effective date of the release or waiver.

(m)The Company and the Selling Stockholder shall have furnished to the Underwriter and its counsel such additional documents, certificates and evidence as the Underwriter or its counsel may have reasonably requested.

If any condition specified in this Section 6 shall not have been fulfilled when and as required to be fulfilled, this Agreement may be terminated by the Underwriter by notice to the Company and the Selling Stockholder at any time at or prior to the Closing Date or on the Option Closing Date, as applicable, and such termination shall be without liability of any party to any other party, except that Section 5(a)(viii), Section 7 and Section 8 shall survive any such termination and remain in full force and effect.

7.Indemnification and Contribution.

(a)The Company agrees to indemnify, defend and hold harmless the Underwriter, its affiliates, directors and officers and employees, and each person, if any, who controls the Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any losses, claims, damages or liabilities to which such party may become subject, under the Securities Act or otherwise (including in settlement of any litigation if such settlement is effected with the written consent of the Company), insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, including the information deemed to be a part of the Registration Statement at the time of effectiveness and at any subsequent time pursuant to Rules 430A and 430B of the Rules and Regulations, or arise out of or are based upon the omission from the Registration Statement, or alleged omission to state therein, a material fact required to be stated therein or necessary to make the statements therein not misleading (ii) an untrue statement or alleged untrue statement of a material fact contained in the Time of Sale Disclosure Package, any Written Testing-the-Waters Communications, any Prospectus, or any amendment or supplement thereto, any Issuer Free Writing Prospectus, or the Marketing Materials or in any other materials provided by the Company for use in connection with the offering of the Shares, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, (iii) in whole or in part, any material inaccuracy in the representations and warranties of the Company contained herein, or (iv) in whole or in part, any material failure of the Company to perform its obligations hereunder or under law, and will reimburse such party for any actual, reasonable and documented legal or other expenses incurred by such party in connection with evaluating, investigating or defending against such loss, claim, damage, liability or action; provided, however, that the Company shall not be liable in any case to the extent that any such loss, claim, damage, liability or action arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, the Time of Sale Disclosure Package, any Written Testing-the-Waters Communications, any Prospectus, or any amendment or supplement thereto or any Issuer Free Writing Prospectus, in reliance upon and in conformity with written information furnished to the Company by the related Underwriter specifically for use in the preparation thereof, which written information is described in Section 7(g).

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(b)The Selling Stockholder will indemnify, defend and hold harmless the Underwriter against any losses, claims, damages or liabilities, joint or several, to which the Underwriter may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, any Prospectus, or any Issuer Free Writing Prospectus, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) in whole or in part, any inaccuracy in the representations and warranties of the Selling Stockholder contained herein, or (iii) in whole or in part, any failure of the Selling Stockholder to perform its obligations hereunder or under law, and will reimburse the Underwriter for any actual, reasonable and documented legal or other expenses incurred by it in connection with evaluating, investigating or defending against such loss, claim, damage, liability or action; provided, however, that the Selling Stockholder shall not be liable in any such case to the extent that any such loss, claim, damage, liability or action arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, the Time of Sale Disclosure Package, any Prospectus, or any amendment or supplement thereto or any Issuer Free Writing Prospectus, in reliance upon and in conformity with written information furnished to the Company by the Underwriter specifically for use in the preparation thereof, which written information is described in Section 7(g).

(c)The Underwriter will indemnify, defend and hold harmless the Company and its affiliates, directors, officers, the Selling Stockholder and each person, if any, who controls the Company or the Selling Stockholder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any losses, claims, damages or liabilities to which such party may become subject, under the Securities Act or otherwise (including in settlement of any litigation, if such settlement is effected with the written consent of the Underwriter), insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the Time of Sale Disclosure Package, any Prospectus, or any amendment or supplement thereto or any Issuer Free Writing Prospectus, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, the Time of Sale Disclosure Package, any Prospectus, the Final Prospectus, or any amendment or supplement thereto or any Issuer Free Writing Prospectus in reliance upon and in conformity with written information furnished to the Company by the Underwriter specifically for use in the preparation thereof, which written information is described in Section 7(f), and will reimburse such party for any legal or other expenses reasonably incurred by such party in connection with evaluating, investigating, and defending against any such loss, claim, damage, liability or action. The obligation of the Underwriter to indemnify the Company or the Selling Stockholder (including any controlling person, director or officer thereof) shall be limited to the amount of the underwriting discount applicable to the Shares and Warrants to be purchased by the Underwriter hereunder actually received by the Underwriter plus the value of the Underwriter Warrants.

(d)Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; but the failure to notify the indemnifying party shall not relieve the indemnifying party from any liability that it may have to any indemnified party except to the extent such indemnifying party has been materially prejudiced by such failure. In case any such action shall be brought against any indemnified party, and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in, and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of the indemnifying party’s election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof; provided, however, that if (i) the indemnified party has reasonably concluded (based on advice of counsel) that there may be legal defenses available to it or other indemnified parties that are different from or in addition to those available to the indemnifying party, (ii) a conflict or potential conflict exists (based on advice of counsel to the indemnified party) between the indemnified party and the indemnifying party (in which case the indemnifying party will not have the right to direct the defense of such action on behalf of the indemnified party), or (iii) the indemnifying party has not in fact employed counsel reasonably satisfactory to the indemnified party to assume the defense of such action within a reasonable time after receiving notice of the commencement of the action, the indemnified party shall have the right to employ a single counsel to represent it and any other parties entitled to indemnification pursuant to this Section 7 in any claim in respect of which indemnity may be sought under subsection (a) or (b) of this Section 7, in which event the reasonable fees and expenses of such separate counsel shall be borne by the indemnifying party or parties and reimbursed to the indemnified party or parties as incurred.

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The indemnifying party under this Section 7 shall not be liable for any settlement of any proceeding effected without its written consent, which shall not be unreasonably conditioned, delayed or withheld, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party against any loss, claim, damage, liability or expense by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement, compromise or consent to the entry of judgment in any pending or threatened action, suit or proceeding in respect of which any indemnified party is a party or could be named and indemnity was or would be sought hereunder by such indemnified party, unless such settlement, compromise or consent (a) includes an unconditional release of such indemnified party from all liability for claims that are the subject matter of such action, suit or proceeding and (b) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.

(e)If the indemnification provided for in this Section 7 is unavailable or insufficient to hold harmless an indemnified party under subsection (a) or (b) above, then the applicable indemnifying party, in lieu of indemnifying the indemnified party or parties, shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred to in subsection (a) or (b) above, (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Selling Stockholder on the one hand and the Underwriter on the other from the offering and sale of the Shares or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company and the Selling Stockholder on the one hand and the Underwriter on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company and the Selling Stockholder on the one hand and the Underwriter on the other shall be deemed to be in the same proportion as the total net proceeds from the offering of the Shares (after deducting underwriting discounts and commissions but before deducting expenses) received by the Company and the Selling Stockholder bear to the total underwriting discount and commissions received by the Underwriter, including from the offering of the Option Shares, if applicable, in each case as set forth in the table on the cover page of the Final Prospectus. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company, the Selling Stockholder or the Underwriter and the parties’ relevant intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The Company, the Selling Stockholder and the Underwriter agree that it would not be just and equitable if contributions pursuant to this subsection (e) were to be determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in the first sentence of this subsection (e). The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (e) shall be deemed to include any actual, reasonable and documented legal or other expenses incurred by such indemnified party in connection with investigating or defending against any action or claim that is the subject of this subsection (e). Notwithstanding the provisions of this subsection (e), no Underwriter shall be required to contribute any amount in excess of the amount of the underwriting discount and commissions applicable to the Shares to be purchased by such Underwriter hereunder actually received by the Underwriter. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

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(f)The obligations of the Company and the Selling Stockholder under this Section 7 shall be in addition to any liability that the Company and the Selling Stockholder may otherwise have and the benefits of such obligations shall extend, upon the same terms and conditions, to each person, if any, who controls the Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act; and the obligations of each Underwriter under this Section 7 shall be in addition to any liability that the Underwriter may otherwise have and the benefits of such obligations shall extend, upon the same terms and conditions, to the Company, the Selling Stockholder and its respective officers, directors and each person who controls the Company or the Selling Stockholder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act.

(g)For purposes of this Agreement, each Underwriter severally confirms, and the Company and the Selling Stockholder acknowledges, that there is no information concerning such Underwriter furnished in writing to the Company and the Selling Stockholder by such Underwriter specifically for preparation of or inclusion in the Registration Statement, the Time of Sale Disclosure Package, any Prospectus, the Final Prospectus or any Issuer Free Writing Prospectus, other than the statement set forth in the last paragraph on the cover page of the Prospectus, the marketing and legal names of each Underwriter, and the statements set forth in the “Underwriting” section of the Registration Statement, the Time of Sale Disclosure Package, and the Final Prospectus only insofar as such statements relate to the amount of selling concession and re-allowance, if any, or to over-allotment, stabilization and related activities that may be undertaken by such Underwriter.

8.Representations and Agreements to Survive Delivery. All representations, warranties, and agreements of the Company and the Selling Stockholder contained herein or in certificates delivered pursuant hereto, including, but not limited to, the agreements of the Underwriter, the Selling Stockholder and the Company contained in Section 5(a)(vii) and Section 7 hereof, shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Underwriter or any controlling person thereof, or the Company and the Selling Stockholder or any of their officers, directors, or controlling persons, and shall survive delivery of, and payment for, the Shares and the Warrants to and by the Underwriter hereunder.

9.Termination of this Agreement.

(a)The Underwriter shall have the right to terminate this Agreement by giving notice to the Company and the Selling Stockholder as hereinafter specified at any time at or prior to the Closing Date or any Option Closing Date (as to the Option Shares to be purchased on such Option Closing Date only), if (i) there has occurred any material adverse change in the securities markets or any event, act or occurrence that has materially disrupted, the securities markets or there has been a material adverse change in general financial, political or economic conditions the effect of which is to make it, in the reasonable judgment of the Underwriter, inadvisable or impracticable to market the Shares (ii) trading in the Company’s Common Stock shall have been suspended by the Commission or Nasdaq or trading in securities generally on Nasdaq Stock Market, the NYSE or the NYSE American shall have been suspended, (iii) minimum or maximum prices for trading shall have been fixed, or maximum ranges for prices for securities shall have been required, on Nasdaq Stock Market, the NYSE or NYSE American, by such exchange or by order of the Commission or any other governmental authority having jurisdiction, (iv) a banking moratorium shall have been declared by federal or New York state authorities, (v) there shall have occurred any attack on, outbreak or escalation of hostilities or act of terrorism involving the United States, any declaration by the United States of a national emergency or war, any substantial change or development involving a prospective substantial change in United States or other international political, financial or economic conditions or any other calamity or crisis, the effect of which is to make it, in the reasonable judgment of the Underwriter, inadvisable or impracticable to market the Shares, or (vi) in the reasonable judgment of the Underwriter, there has been, since the time of execution of this Agreement or since the respective dates as of which information is given in the Registration Statement, the Time of Sale Disclosure Package or the Final Prospectus, any material adverse change in the assets, properties, condition, financial or otherwise, or in the results of operations, business affairs or business prospects of the Company and its subsidiaries considered as a whole, whether or not arising in the ordinary course of business. Any such termination shall be without liability of any party to any other party except that the provisions of Section 5(a)(viii) and Section 7 hereof shall at all times be effective and shall survive such termination.

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(b)If the Underwriter elects to terminate this Agreement as provided in this Section, the Company and the Selling Stockholder shall be notified promptly by the Underwriter by telephone, confirmed by letter.

10.Notices. Except as otherwise provided herein, all communications hereunder shall be in writing and, if to the Underwriter, shall be mailed, delivered or e-mailed to Roth Capital Partners, LLC, 800 San Clemente Drive, Suite 400, Newport Beach, CA 92660, e-mail: rothecm@roth.com, Attention: Managing Director; and if to the Company, shall be mailed, delivered or e-mailed to it at FlexEnergy Green Solutions, Inc., 112 Corporate Drive, Portsmouth, NH 03801, e-mail: wes.kimmel@flexenergy.com, Attention: Chief Financial Officer; and if to the Selling Stockholder, shall be mailed, delivered or e-mailed to it at FlexEnergy Power Solutions, LLC, c/o RNS Capital Partners, LLC, 309 Agate Street, Laguna Beach, CA 92651, e-mail: thomasdenison@gmail.com, Attention: Thomas R. Denison; or in each case to such other address as the person to be notified may have requested in writing. Any party to this Agreement may change such address for notices by sending to the parties to this Agreement written notice of a new address for such purpose.

11.Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns and the controlling persons, officers and directors referred to in Section 7. Nothing in this Agreement is intended or shall be construed to give to any other person, firm or corporation any legal or equitable remedy or claim under or in respect of this Agreement or any provision herein contained. The term “successors and assigns” as herein used shall not include any purchaser, as such purchaser, of any of the Shares from the Underwriter.

12.Absence of Fiduciary Relationship. Each of the Company and the Selling Stockholder acknowledges and agrees that: (a) the Underwriter has been retained solely to act as underwriter in connection with the sale of the Shares and that no fiduciary, advisory or agency relationship between the Company and the Selling Stockholder and the Underwriter has been created in respect of any of the transactions contemplated by this Agreement, irrespective of whether the Underwriter has advised or is advising the Company or the Selling Stockholder on other matters; (b) the price and other terms of the Shares set forth in this Agreement were established by the Company and the Selling Stockholder following discussions and arms-length negotiations with the Underwriter and the Company and the Selling Stockholder is capable of evaluating and understanding and understands and accepts the terms, risks and conditions of the transactions contemplated by this Agreement; (c) it has been advised that the Underwriter and its affiliates are engaged in a broad range of transactions that may involve interests that differ from those of the Company and the Selling Stockholder and that no Underwriter has any obligation to disclose such interest and transactions to the Company or the Selling Stockholder by virtue of any fiduciary, advisory or agency relationship; and (d) it has been advised that the Underwriter is acting, in respect of the transactions contemplated by this Agreement, solely for the benefit of such Underwriter, and not on behalf of the Company or the Selling Stockholder.

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13.Amendments and Waivers. No supplement, modification or waiver of this Agreement shall be binding unless executed in writing by the party to be bound thereby. The failure of a party to exercise any right or remedy shall not be deemed or constitute a waiver of such right or remedy in the future. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (regardless of whether similar), nor shall any such waiver be deemed or constitute a continuing waiver unless otherwise expressly provided.

14.Partial Unenforceability. The invalidity or unenforceability of any section, paragraph, clause or provision of this Agreement shall not affect the validity or enforceability of any other section, paragraph, clause or provision.

15.Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

16.Submission to Jurisdiction. The Company and the Selling Stockholder irrevocably (a) submits to the jurisdiction of the Supreme Court of the State of New York, Borough of Manhattan or the United States District Court for the Southern District of New York for the purpose of any suit, action, or other proceeding arising out of this Agreement, or any of the agreements or transactions contemplated by this Agreement, the Registration Statement, the Time of Sale Disclosure Package, any Prospectus and the Final Prospectus (each a “Proceeding”), (b) agrees that all claims in respect of any Proceeding may be heard and determined in any such court, (c) waives, to the fullest extent permitted by law, any immunity from jurisdiction of any such court or from any legal process therein, (d) agrees not to commence any Proceeding other than in such courts, and (e) waives, to the fullest extent permitted by law, any claim that such Proceeding is brought in an inconvenient forum. EACH OF THE PARTIES HERETO (ON BEHALF OF ITSELF AND, TO THE FULLEST EXTENT PERMITTED BY LAW, ON BEHALF OF ITS RESPECTIVE CONTROLLING PERSONS, OFFICERS, DIRECTORS, MANAGERS, EQUITY HOLDERS AND CREDITORS) HEREBY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE REGISTRATION STATEMENT, THE TIME OF SALE DISCLOSURE PACKAGE, ANY PROSPECTUS AND THE FINAL PROSPECTUS.

17.Counterparts. This Agreement may be executed and delivered (including by electronic mail) in one or more counterparts and, if executed in more than one counterpart, the executed counterparts shall each be deemed to be an original and all such counterparts shall together constitute one and the same instrument.

[Signature Page Follows]

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Please sign and return to the Company the enclosed duplicates of this letter whereupon this letter will become a binding agreement between the Company, the Selling Stockholder and the Underwriter in accordance with its terms.

Very truly yours,

FLEXENERGY GREEN SOLUTIONS, INC.

By:

Name:

Title:

FLEXENERGY POWER SOLUTIONS, LLC

By:

Name:

Title:

Confirmed as of the date first above-mentioned

by the Underwriter.

ROTH CAPITAL PARTNERS, LLC
By:
Name:	Aaron M. Gurewitz
Title:	Head of Equity Capital Markets

-27-

SCHEDULE I

Free Writing Prospectus

1. None.

-28-

SCHEDULE II

Written Testing-the-Waters Communications

-29-

SCHEDULE III

List of officers, directors and stockholders executing lock-up agreements

FlexEnergy Power Solutions, LLC

Mark Schnepel

Wesley Kimmel

Douglas Baltzer

Thomas Denison

Patrick Connelly

George Walker

-30-

SCHEDULE IV

Time of Sale Disclosure Package

-31-

EXHIBIT A

Form of Lock-Up Agreement

Roth Capital Partners, LLC

888 San Clemente Drive

Newport Beach, CA 92660

Ladies and Gentlemen:

The undersigned understands that you propose to enter into an Underwriting Agreement (the “Underwriting Agreement”) with FlexEnergy Green Solutions, Inc., a Delaware corporation (the “Company”), relating to a proposed offering by the Company (the “Offering”) of shares of the Company’s Common Stock, par value $0.0001 per share (the “Common Stock”). Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Underwriting Agreement.

In consideration of the foregoing, and in order to induce you to participate in the Offering, and for other good and valuable consideration receipt of which is hereby acknowledged, the undersigned hereby agrees that, without the prior written consent of Roth Capital Partners, LLC (“Roth”) (which consent may be withheld in its sole discretion), the undersigned will not, during the period (the “Lock-Up Period”) beginning on the date hereof and ending on the date 180 days after the date of the final prospectus relating to the Offering (the “Final Prospectus”), (1) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, or file (or participate in the filing of) a registration statement with the Securities and Exchange Commission in respect of, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for shares of Common Stock (including without limitation, shares of Common Stock that may be deemed to be beneficially owned by the undersigned in accordance with the rules and regulations of the Securities and Exchange Commission and securities which may be issued upon exercise of a stock option or warrant), (2) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the shares of, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of shares of Common Stock or such other securities, in cash or otherwise, (3) make any demand for or exercise any right with respect to, the registration of any shares of Common Stock or any security convertible into or exercisable or exchangeable for shares of Common Stock, or (4) publicly announce an intention to effect any transaction specific in clause (1), (2) or (3) above.

Notwithstanding the foregoing, the restrictions set forth in clause (1) and (2) above shall not apply to (a) the sale of the Option Shares in the Offering, (b) transfers (i) as a bona fide gift or gifts, provided that the donee or donees thereof agree to be bound in writing by the restrictions set forth herein, (ii) to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned, provided that the trustee of the trust agrees to be bound in writing by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value, (iii) by will or other testamentary document, or by intestate succession to the legal representative, heir, beneficiary or member of the immediate family of the undersigned, or (iv) by operation of law, such as pursuant to a qualified domestic order or as required by a divorce settlement, (c) the acquisition or exercise of any stock option issued pursuant to the Company’s existing stock option plan, including any exercise effected by the delivery of shares of Common Stock of the Company held by the undersigned, (d) the purchase or sale of the Company’s securities pursuant to a plan, contract or instruction that satisfies all of the requirements of Rule 10b5-1(c)(1)(i)(B) that was in effect prior to the date hereof or is approved by Roth in its reasonable discretion, or (e) if the undersigned is a corporation, limited liability company, partnership, trust or other entity, transfers to its stockholders, members, partners or trust beneficiaries as part of a distribution, or to any corporation, partnership or other entity that is its affiliate, provided that the transferee or transferees thereof agree to be bound in writing by the restrictions set forth herein. For purposes of this Lock-Up Agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin.

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[Further notwithstanding the foregoing, if at any time beginning 90 days after the date of the Final Prospectus, (i) the Company has filed with the Commission at least one quarterly report on Form 10-Q, (ii) the reported last sale price of the Common Stock on Nasdaq is at least [___]% greater than the initial public offering price per share in the Offering (the “IPO Price”) for 20 trading days out of any 30 trading day period ending after the 90^th day following the date of the Final Prospectus (which 30 trading day period may begin prior to such 90^th day) and (iii) the reported last sale price of the Common Stock on the last day of that 30 trading day period described in clause (ii), above, is at least [___]% greater than the IPO Price, then [___]% of the securities subject to the restrictions set forth in this Lock-up Agreement held by the undersigned as of the Initial Release Date (defined below) will be automatically released (subject, in the case of directors and officers of the Company, to any required notice and announcement procedures provided for herein) from the restrictions contained in this Lock-Up Agreement immediately prior to the opening of Nasdaq on the day following the end of the 30 trading day period (the “Initial Release Date”).]¹

The foregoing restrictions are expressly agreed to preclude the undersigned from engaging in any hedging or other transaction which is designed to or reasonably expected to lead to or result in a sale or disposition of shares of Common Stock even if such securities would be disposed of by someone other than the undersigned. Such prohibited hedging or other transactions would include without limitation any short sale or any purchase, sale or grant of any right (including without limitation any put option or put equivalent position or call option or call equivalent position) with respect to any of the shares of Common Stock or with respect to any security that includes, relates to, or derives any significant part of its value from such shares.

The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Lock-Up Agreement. All authority herein conferred or agreed to be conferred and any obligations of the undersigned shall be binding upon the successors, assigns, heirs or personal representatives of the undersigned.

The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar or depositary against the transfer of the undersigned’s shares of Common Stock except in compliance with the foregoing restrictions.

If the undersigned is an officer or director of the Company, (i) Roth agrees that, at least three business days before the effective date of any release or waiver of the foregoing restrictions in connection with a transfer of Common Shares, Roth will notify the Company of the impending release or waiver, and (ii) the Company will agree in the Underwriting Agreement to announce the impending release or waiver by press release through a major news service at least two business days before the effective date of the release or waiver. Any release or waiver granted by Roth hereunder to any such officer or director shall only be effective two business days after the publication date of such press release. The provisions of this paragraph will not apply if (a) the release or waiver is effected solely to permit a transfer not for consideration and (b) the transferee has agreed in writing to be bound by the same terms described in this letter to the extent and for the duration that such terms remain in effect at the time of the transfer.

¹ Subject to further review.

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The undersigned understands that, if the Underwriting Agreement does not become effective, or if the Underwriting Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the securities to be sold thereunder, the undersigned shall be released from all obligations under this Lock-Up Agreement.

This Lock-Up Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflict of laws principles thereof. The undersigned irrevocably (i) submits to the jurisdiction of the Supreme Court of the State of New York, Borough of Manhattan and the United States District Court for the Southern District of New York, for the purpose of any suit, action, or other proceeding arising out of this Lock-Up Agreement (each a “Proceeding”), (ii) agrees that all claims in respect of any Proceeding may be heard and determined in any such court, (iii) waives, to the fullest extent permitted by law, any immunity from jurisdiction of any such court or from any legal process therein, (iv) agrees not to commence any Proceeding other than in such courts, and (v) waives, to the fullest extent permitted by law, any claim that such Proceeding is brought in an inconvenient forum.

Very truly yours,    

Name:

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EXHIBIT B

Form of Press Release

FlexEnergy Green Solutions, Inc.

[Date]

FlexEnergy Green Solutions, Inc. (the “Company”) announced today that Roth Capital Partners, LLC the Underwriter in the Company’s recent public sale of       shares of common stock are [waiving][releasing] a lock-up restriction with respect to      shares of the Company’s common stock held by [certain officers or directors] [an officer or director] of the Company.  The [waiver][release] will take effect on     , 2021, and the shares may be sold on or after such date.

This press release is not an offer for sale of the securities in the United States or in any other jurisdiction where such offer is prohibited, and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the United States Securities Act of 1933, as amended.

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EX-2.1

Exhibit 2.1

CONTRIBUTION AGREEMENT

THIS CONTRIBUTION AGREEMENT (this “Agreement”) is made as of [●], 2021, by and between FlexEnergy Green Solutions, Inc., a Delaware corporation (the “Company”), and FlexEnergy Power Solutions, LLC, a Delaware limited liability company (the “Contributor”).

WHEREAS, the Contributor owns certain interests in its subsidiaries (the “Subsidiaries”) and now desires to effect a reorganization through contributing such interests to the Company; and

WHEREAS, the Company wishes to issue to the Contributor an aggregate of [●] of the Company’s authorized but unissued Common Stock, par value $0.0001 per share (“Common Stock”) in exchange for the contribution by the Contributor of the interests set forth on Schedule I attached to this Agreement (collectively, the “Contributed Interests”).

NOW, THEREFORE, in consideration of the mutual promises and covenants contained in this Agreement, the parties agree as follows:

1.            Issuance of Stock.

(a)            Contribution; Issuance of Common Stock. Subject to the terms and conditions of this Agreement, at the Closing, the Company agrees to issue to the Contributor the number of shares of Common Stock set forth on Schedule I, and in exchange Contributor agrees to contribute, transfer and assign to the Company the number and type of Contributed Interests set forth on Schedule I. The Shares of Common Stock issued to the Contributor pursuant to this Agreement shall be referred to in this Agreement as the “Shares.”

(b)            Closing; Delivery.

(i)            The closing of the contribution of Contributed Interests in exchange for shares of Common Stock (the “Closing”) shall take place remotely via the exchange of documents and signatures on the date hereof. At the Closing, the Contributor shall contribute to the Company the number and type of Contributed Interests set forth opposite the name of the Contributor on Schedule I under the column labeled “Contributed Interests” in exchange for the issuance by the Company to the Contributor of the shares of Common Stock set forth opposite the name of the Contributor on Schedule I under the column labeled “Company Common Stock”.

(ii)            At the Closing, the Contributor shall deliver to the Company duly executed stock powers and any other transfer documents required to transfer such Contributed Interests to the Company at the Closing.

(c)            Tax Treatment. The Contributor and the Company intend that the contribution of the Contributed Interests to the Company by the Contributor in exchange for shares of Common Stock be treated as a tax free contribution pursuant to Section 351 of the Internal Revenue Code of 1986, as amended, and agree to treat the contribution as such for all federal, state and local income tax purposes and further agree to not take any position that is inconsistent with such treatment unless required by applicable law.

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2.            Additional Covenants.

(a)            Limitation on Additional Company Liens. Without the written consent of the Contributor, so long as the “Parent Loan Notes” (as defined in the Credit Agreement dated February 8, 2019 by and among Flex Leasing Power & Service LLC, Flex Leasing Power & Service ULC and Texas Capital Bank, National Association (as thereafter and hereafter amended and/or restated, the “TCB Credit Agreement”)) remain outstanding, the Company shall not, and shall not permit any of its Subsidiaries to, incur, create, assume, or permit to exist any Lien upon any of its Property, assets, or revenues, whether now owned or hereafter acquired, except:

(i)            existing Liens;

(ii)            Liens in favor of the “Secured Parties” or “Administrative Agent” for the benefit of “Secured Parties” (as such terms are defined in the TCB Credit Agreement);

(iii)            encumbrances consisting of minor easements, zoning restrictions, or other restrictions on the use of real Property that do not (individually or in the aggregate) materially affect the value of the assets encumbered thereby or materially impair the ability of the Company or its Subsidiaries to use such assets in their respective businesses, and none of which is violated in any material respect by existing or proposed structures or land use;

(iv)            Liens for taxes, assessments, or other governmental charges which are not delinquent or which are being contested in good faith and for which adequate reserves in accordance with GAAP have been established and for which such contest operates to suspend the enforcement of any foreclosure or levy on any Property of the Company or any of its Subsidiaries;

(v)            Liens of landlords, vendors, mechanics, materialmen, warehousemen, carriers, or other similar statutory Liens securing obligations incurred in the ordinary course of business that are not yet due or which are being contested in good faith and for which adequate reserves in accordance with GAAP have been established and for which such contest operates to suspend the enforcement of any foreclosure or levy on any Property of the Company or any of its Subsidiaries;

(vi)            Liens resulting from good faith deposits to secure payments of workmen’s compensation, unemployment insurance or other social security programs (other than Liens imposed by ERISA) or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, contracts (other than for payment of Debt), or leases made in the ordinary course of business;

(vii)            normal and customary rights of setoff upon deposits in favor of depository institutions, and Liens of a collecting bank on payment items in the course of collection;

(viii)            purported Liens evidenced by the filing of precautionary UCC or PPSA financing statements relating solely to operating leases or consignments of personal property entered into in the ordinary course of business;

(ix)            Liens granted in the ordinary course of business on the unearned portion of insurance premiums securing the financing of insurance premiums;

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(x)            purchase money Liens on specific Property to secure Debt used to acquire such Property and Liens securing Capitalized Lease Obligations with respect to specific leased Property;

(xi)            Liens granted by the Company with respect to any loans or advances to the Company or any of its Subsidiaries (A) by the Contributor, or (B) by any beneficial owner of a 10% or greater ownership interest in the Contributor, with the written consent of the Contributor; and

(xii)            other Liens securing Debt not to exceed $500,000 in the aggregate at any time outstanding.

For purposes of the foregoing,

(A)            “Capitalized Lease Obligation” means, with respect to any Person, the amount of Debt under a lease of Property by such Person that would be shown as a liability on a balance sheet of such Person prepared for financial reporting purposes in accordance with GAAP;

(B)            “Debt” means, of any Person as of any date of determination (without duplication): (a) all obligations of such Person for borrowed money; (b) all obligations of such Person evidenced by bonds, notes, debentures, or other similar instruments; (c) all obligations of such Person to pay the deferred purchase price of Property or services, except trade accounts payable of such Person arising in the ordinary course of business that are not past due by more than ninety (90) days; (d) all Capitalized Lease Obligations of such Person; (e) all Debt or other obligations of others Guaranteed by such Person; (f) all obligations secured by a Lien existing on Property owned by such Person, whether or not the obligations secured thereby have been assumed by such Person or are non-recourse to the credit of such Person; (g) any other obligation for borrowed money or other financial accommodations which in accordance with GAAP would be shown as a liability on the balance sheet of such Person; (h) any repurchase obligation or liability of a Person with respect to Accounts, chattel paper or notes receivable sold by such Person; (i) any liability under a sale and leaseback transaction that is not a Capitalized Lease Obligation; (j) any obligation under any so called “synthetic leases;” (k) any obligation arising with respect to any other transaction that is the functional equivalent of borrowing but which does not constitute a liability on the balance sheets of a Person; (l) all payment and reimbursement obligations of such Person (whether contingent or otherwise) in respect of letters of credit, bankers’ acceptances, surety or other bonds and similar instruments; (m) all liabilities of such Person in respect of unfunded vested benefits under any Plan; (n) all Hedge Obligations of such Person, valued at the Hedge Termination Value thereof; and (o) all obligations of such Person in respect of Disqualified Equity Interests;

(C)            “GAAP” means generally accepted accounting principles, applied on a consistent basis, as set forth in opinions of the Accounting Principles Board of the American Institute of Certified Public Accountants and/or in statements of the Financial Accounting Standards Board and/or their respective successors and which are applicable in the circumstances as of the date in question. Accounting principles are applied on a “consistent basis” when the accounting principles applied in a current period are comparable in all material respects to those accounting principles applied in a preceding period;

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(D)            “Lien” means, as to any Property of any Person, (I)  any lien, mortgage, security interest, tax lien, pledge, charge, hypothecation, collateral assignment, preference, priority, or other encumbrance of any kind or nature whatsoever (including, without limitation, any conditional sale or title retention agreement), whether arising by contract, operation of law, or otherwise, affecting such Property and (II) the signing or filing of a financing statement which names the Person as debtor or the signing of any security agreement or the signing of any document authorizing a secured party to file any financing statement which names such Person as debtor;

(E)            “Person” means any natural person, corporation, limited liability company, trust, association, company, partnership, joint venture, governmental authority, or other entity, and shall include such Person’s heirs, administrators, personal representatives, executors, successors and assigns;

(F)            “Property” of a Person means any and all property, whether real, personal, tangible, intangible or mixed, of such Person, or any other assets owned, operated or leased by such Person;

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

(H)            Other capitalized terms used in this Section 2(a) but otherwise defined herein have the meanings given in the TCB Credit Agreement.

(b)            Use of Proceeds by the Contributor. The Contributor agrees that the proceeds (net of any transaction expenses) from the Contributor’s sale of any Shares (including any additional securities or proceeds received in connection with any stock split, stock dividend, spin-off, split-off, merger, recapitalization or other similar transaction with respect to the Shares) shall first be applied to the repayment and discharge of the Contributor’s then-outstanding obligations under the “Parent Loan Notes” (as defined in the TCB Credit Agreement) and/or the redemption and termination of the Contributor’s then-outstanding Series B Units and Series B-1 Units until no such Parent Loan Notes, Series B Units or Series B-1 Units remain outstanding.

3.            Representations and Warranties of the Company. The Company hereby represents and warrants to the Contributor that the following representations are true and correct as of the date hereof.

(a)            Organization, Good Standing, Corporate Power and Authority. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to (i) enter into this Agreement and to perform its obligations hereunder, and (ii) issue, sell and deliver the Shares to be issued, sold and delivered to the Contributor at the Closing.

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(b)            Capitalization. Immediately prior to the Closing, the authorized capital of the Company consists of (i) 100,000,000 shares of Common Stock, none of which are issued and outstanding, and (ii) 5,000,000 shares of Preferred Stock, none of which are issued and outstanding.

(c)            Authorization. All action required to be taken by the Company’s Board of Directors in order to authorize the Company to enter into the this Agreement and to issue the Shares at the Closing has been taken. All action on the part of the officers of the Company necessary for the execution and delivery of this Agreement, the performance of all obligations of the Company under this Agreement, and the issuance and delivery of the Shares, has been taken. This Agreement, when executed and delivered by the Company, shall constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their respective terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other laws of general application relating to or affecting the enforcement of creditors’ rights generally, or (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

(d)            Valid Issuance of Shares. The Shares, when issued, sold and delivered in accordance with the terms and for the consideration set forth in this Agreement, will be validly issued, fully paid and nonassessable and free and clear of all liens, encumbrances and restrictions on transfer other than restrictions on transfer under applicable state and federal securities laws and liens or encumbrances created by or imposed by the Contributor. Assuming the accuracy of the representations of the Contributor in Section 3, the Shares will be offered, issued and sold in compliance with all applicable federal and state securities laws, and it is not necessary in connection with the offer, sale and delivery of the Shares in the manner contemplated by this Agreement to register the offer or sale of any of the Shares by the Company under any applicable federal or state securities laws.

(e)            No General Solicitation. Neither the Company, nor any of its officers, directors, employees or agents, has either directly or indirectly, including through a broker or finder, (i) engaged in any general solicitation or (ii) published any advertisement in connection with the offer and sale of the Shares.

(f)            No “Bad Actor” Disqualification. The Company has exercised reasonable care to determine whether any Covered Person (as defined below) is subject to any of the “bad actor” disqualifications described in Rule 506(d)(1)(i) to (viii) (“Disqualification Events”) under the Securities Act of 1933, as amended (the “Securities Act”). To the Company’s knowledge, no Covered Person is subject to a Disqualification Event, except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3) under the Securities Act. For purposes of this Section 3(c), “Covered Persons” are those persons specified in Rule 506(d)(1) under the Securities Act, including the Company; any predecessor or affiliate of the Company; any director, executive officer or other officer participating in the sale of the issuance of the Shares; any beneficial owner of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power; any promoter (as defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of the issuance of the Shares; and any person that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the issuance of the Shares (a “Solicitor”), any general partner or managing member of any Solicitor, and any director, executive officer or other officer participating in the issuance of the Shares of any Solicitor or general partner or managing member of any Solicitor.

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4.            Representations and Warranties of the Contributor. The Contributor hereby represents and warrants to the Company that the following representations are true and correct as of the date hereof and as of the Closing:

(a)            Organization, Good Standing, Company Power and Authority. The Contributor is a limited liability company duly formed, validly existing and in good standing under the laws of the State of Delaware and has all requisite power and authority to enter into this Agreement and to perform its obligations hereunder.

(b)            Title to Contributed Interests. The Contributor is the owner of record and has good and marketable title free and clear of all liens to the Contributed Interests set forth opposite the Contributor’s name on Schedule I, free and clear of any and all liens. The Contributor is not a party to any option, warrant, purchase right or other contract or commitment (other than this Agreement) that could require the Contributor to sell, transfer or otherwise dispose of all or a portion of such Contributed Interests.

(c)            Full Ownership Interests. The Contributed Interests constitute all of the outstanding ownership and voting interests of FlexEnergy, Inc., a Delaware corporation, and Flex Leasing Power & Service LLC, a Delaware limited liability company.

(d)            Investigation.

(i)            The Contributor has received all the information it considers necessary or appropriate for deciding whether to acquire the Shares. The Contributor further represents that the Contributor has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Shares and the business, properties, prospects and financial condition of the Company, and answers have been provided to all such questions to the full satisfaction of the Contributor.

(ii)            The Contributor acknowledges the Contributor is able to fend for itself, can bear the economic risk of Contributor’s investment, and has such knowledge and experience in financial or business matters that the Contributor is capable of evaluating the merits and risks of the investment in the Shares. The Contributor has completed the Contributor’s own analysis with respect to the terms of this Agreement, and to the extent the Contributor believes such discussion necessary, discussed this Agreement with Contributor’s legal, tax and financial advisers.

(iii)            Except for the representations and warranties of the Company in Section 2, the Contributor has not relied on any representations, warranties or other information (whether oral or written) from the Company or any of its managers, officers, equityholders, employees, agents or affiliates.

(e)            Accredited Investor. The Contributor is an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended.

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(f)            No “Bad Actor” Disqualification. The Contributor has exercised reasonable care to determine whether any Covered Person is subject to any Disqualifications Events described in Rule 506(d)(1)(i) to (viii) under the Securities Act. To the Contributor’s knowledge, no Covered Person is subject to a Disqualification Event, except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3) under the Securities Act. For purposes of this Section 4(f), “Covered Persons” are those persons specified in Rule 506(d)(1) under the Securities Act, including the Contributor; any predecessor or affiliate of the Contributor; any beneficial owner of 20% or more of the Contributor’s outstanding voting equity securities, calculated on the basis of voting power; or any director, executive officer or other officer thereof.

5.            Miscellaneous.

(a)            Survival of Warranties. Unless otherwise set forth in this Agreement, the representations and warranties of the Company and the Contributor contained in this Agreement shall survive the execution and delivery of this Agreement and the Closing and shall in no way be affected by any investigation or knowledge of the subject matter thereof made by or on behalf of the Contributor or the Company.

(b)            Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

(c)            Amendments. Any term of this Agreement may be amended, terminated or waived only with the written consent of the Company and the Contributor. Any amendment or waiver effected in accordance with this Section 4(c) shall be binding upon the Contributor and each transferee of the Shares, each future holder of all such securities, and the Company.

(d)            Equitable Remedies. The parties agree that irreparable harm would occur in the event that any of the agreements and provisions of this Agreement were not performed fully by the parties in accordance with their specific terms or were otherwise breached, and that money damages are an inadequate remedy for breach hereof because of the difficulty of ascertaining and quantifying the amount of damage that will be suffered by the parties in the event that this Agreement is not performed in accordance with its terms or is otherwise breached. It is accordingly hereby agreed that the parties shall be entitled to an injunction or injunctions to restrain, enjoin and prevent breaches of this Agreement by the Company and the Contributor and to enforce specifically such terms and provisions of this Agreement against the Company and the Contributor party, as applicable, in any court of the United States or any state having jurisdiction, such remedy being in addition to and not in lieu of, any other rights and remedies to which the parties are entitled to hereunder and at law or in equity.

(e)            Further Actions. Each party agrees to perform all further acts and execute, acknowledge, or deliver any instruments or documents and to perform such additional acts that are not inconsistent with the terms set forth in this Agreement as may be reasonably necessary, appropriate, or desirable to carry out the provisions of this Agreement.

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(f)            Counterparts; Electronic Signature. This Agreement may be executed and delivered by facsimile transmission, .pdf or other digital or electronic means, and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

(g)            Entire Agreement; Severability. This Agreement constitutes the full and entire understanding and agreement between the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties are expressly canceled. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.

(h)            Governing Law. This Agreement (including any claim or controversy arising out of or relating to this Agreement) shall be governed by and construed in accordance with the internal laws of the State of Delaware.

(i)            Dispute Resolution; Jurisdiction. The parties (a) hereby irrevocably and unconditionally submit to the jurisdiction of the federal and state courts located within the State of Delaware for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement, (b) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement except in the federal and state courts located within the State of Delaware and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court. Each of the parties to this Agreement consents to personal jurisdiction in the State of Delaware.

(j)            Waiver of Jury Trial. EACH PARTY HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER TRANSACTION AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER TRANSACTION AGREEMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 4(J).

[Remainder of page intentionally left blank.]

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IN WITNESS WHEREOF, the parties have executed this Contribution Agreement as of the date first written above.

COMPANY:

FlexEnergy Green Solutions, Inc.

By:

Name:

Title:

[Signature page to Contribution Agreement]

IN WITNESS WHEREOF, the parties have executed this Contribution Agreement as of the date first written above.

CONTRIBUTOR

FlexEnergy Power Solutions, LLC

By:

Name:

Title:

[Signature page to Contribution Agreement]

SCHEDULE I

SCHEDULE OF CONTRIBUTED INTERESTS

Contributor	Contributed Interests	Company Common Stock
FlexEnergy Power Solutions, LLC	1,410,375 shares of Class A Common Stock of FlexEnergy, Inc. 100% Membership Interest of Flex Leasing Power & Service LLC	[●] Shares of FlexEnergy Green Solutions, Inc.

EX-3.1

Exhibit 3.1

SECOND AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
FLEXENERGY GREEN SOLUTIONS, INC.

(Pursuant to Sections 241 and 245 of the
General Corporation Law of the State of Delaware)

FlexEnergy Green Solutions, Inc., a corporation organized and existing under and by virtue of the provisions of the General Corporation Law of the State of Delaware (the “General Corporation Law”),

DOES HEREBY CERTIFY:

1.             That the name of this corporation is FlexEnergy Green Solutions, Inc., and that this corporation was originally incorporated pursuant to the General Corporation Law on December 31, 2020.

2.             This corporation has not received any payment for any of its stock.

3.             That the Board of Directors (the “Board”) duly adopted resolutions proposing to amend and restate the Certificate of Incorporation of this corporation, declaring said amendment and restatement to be advisable and in the best interests of this corporation, which resolution setting forth the proposed amendment and restatement is as follows:

RESOLVED, that the Certificate of Incorporation of this corporation be amended and restated in its entirety to read as follows:

ARTICLE I.

The name of this corporation is FlexEnergy Green Solutions, Inc. (the “Company”).

ARTICLE II.

The address of the Company’s registered office in the State of Delaware is 251 Little Falls Drive, in the City of Wilmington, County of New Castle, Delaware 19808, and the name of the registered agent at such address is Corporation Service Company.

ARTICLE III.

The purpose of the Company is to engage in any lawful act or activity for which a corporation may be organized under the Delaware General Corporation Law (“DGCL”).

ARTICLE IV.

Section A.          The Company is authorized to issue two classes of stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares which the Company is authorized to issue is one hundred five million (105,000,000) shares. One hundred million (100,000,000) shares shall be Common Stock, each having a par value of one-hundredth of one cent ($0.0001). Five million (5,000,000) shares shall be Preferred Stock, each having a par value of one-hundredth of one cent ($0.0001).

Section B.          The Preferred Stock may be issued from time to time in one or more series. The Board of Directors of the Company (the “Board of Directors”) is hereby expressly authorized to provide for the issue of all or any number of the shares of the Preferred Stock in one or more series, and to fix the number of shares and to determine or alter for each such series, such voting powers, full or limited, or no voting powers, and such designation, preferences, and relative, participating, optional, or other rights and such qualifications, limitations, or restrictions thereof, as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors providing for the issuance of such shares and as may be permitted by the DGCL. The Board of Directors is also expressly authorized to increase or decrease the number of shares of any series subsequent to the issuance of shares of that series, but not below the number of shares of such series then outstanding. In case the number of shares of any series shall be decreased in accordance with the foregoing sentence, the shares constituting such decrease shall resume the status that they had prior to the adoption of the resolution originally fixing the number of shares of such series. The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of the stock of the Company entitled to vote thereon, without a separate vote of the holders of the Preferred Stock, or of any series thereof, unless a vote of any such holders is required pursuant to the terms of any certificate of designation filed with respect to any series of Preferred Stock.

Section C.          Each outstanding share of Common Stock shall entitle the holder thereof to one vote on each matter properly submitted to the stockholders of the Company for their vote; provided, however, that, except as otherwise required by law, holders of Common Stock shall not be entitled to vote on any amendment to this Second Amended and Restated Certificate of Incorporation (including any certificate of designation filed with respect to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together as a class with the holders of one or more other such series, to vote thereon by law or pursuant to this Second Amended and Restated Certificate of Incorporation (including any certificate of designation filed with respect to any series of Preferred Stock). The number of authorized shares of Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of the stock of the Company entitled to vote thereon, without a separate vote of the holders of the Common Stock.

ARTICLE V.

Section A.

1.            Director Nominations. For the management of the business and for the conduct of the affairs of the Company, and in further definition, limitation and regulation of the powers of the Company, of its directors and of its stockholders or any class thereof, as the case may be, it is further provided that the business and the affairs of the Company shall be managed by or under the direction of the Board of Directors. Subject to the rights of the holders of any series of Preferred Stock to elect additional directors under specified circumstances, the number of directors constituting the Board of Directors shall be fixed exclusively by resolutions adopted by a majority of the authorized number of directors constituting the Board of Directors .

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2.            Term of Office. Subject to the rights of the holders of any series of Preferred Stock to elect additional directors under specified circumstances, all of the directors of the Company shall be of one class and shall be elected annually. Each director shall hold office until the next annual meeting of stockholders and, the foregoing notwithstanding, shall serve until his or her successor shall have been duly elected and qualified or until his or her earlier death, resignation, retirement, disqualification or removal. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director.

3.            Removal of Directors. Subject to any limitations imposed by applicable law and except for the removal of directors, if any, elected by the holders of one or more series of Preferred Stock, voting separately as class, any individual director or directors may be removed by the affirmative vote of the holders of a majority of the voting power of all then-outstanding shares of capital stock of the Company entitled to vote generally at an election of directors.

4.            Vacancies. Subject to any limitations imposed by applicable law and subject to the rights of the holders of any series of Preferred Stock, any vacancies on the Board of Directors resulting from death, resignation, disqualification, removal or other causes and any newly created directorships resulting from any increase in the number of directors, shall be filled only by the affirmative vote of a majority of the directors then in office, even though less than a quorum of the Board of Directors, and not by the stockholders. Any director elected in accordance with the preceding sentence shall hold office for the remainder of the full term of the director for which the vacancy was created or occurred and until such director’s successor shall have been elected and qualified.

Section B.

1.            Bylaw Amendments.

a.            The Board of Directors is expressly empowered to adopt, amend or repeal the Bylaws of the Company (as so adopted, amended and restated, the “Bylaws”). Any adoption, amendment or repeal of the Bylaws of the Company by the Board of Directors shall require the approval of a majority of the authorized number of directors.

b.            During the period that FlexEnergy Power Solutions, LLC, a Delaware limited liability company (“FPS”), continues to hold stock representing at least 50% of the voting power of all of the then-outstanding shares of capital stock of the Company entitled to vote generally in the election of directors (the “Covered FPS Ownership Period”), the stockholders shall also have power to adopt, amend or repeal the Bylaws of the Company with, in addition to any vote of the holders of any class or series of stock of the Company required by law or by this Second Amended and Restated Certificate of Incorporation, (i) the affirmative vote of the holders of more than 50% of the voting power of all of the then-outstanding shares of the capital stock of the Company entitled to vote generally in the election of directors, voting together as a single class, and (ii) after the Covered FPS Ownership Period, such action by stockholders shall require the affirmative vote of the holders of at least 66 2/3% of the voting power of all of the then-outstanding shares of the capital stock of the Company entitled to vote generally in the election of directors, voting together as a single class.

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2.            Ballots. The directors of the Company need not be elected by written ballot unless the Bylaws so provide.

3.            Action Without a Meeting. During the Covered FPS Ownership Period, any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing or by electronic transmission setting forth the action so taken shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. At the end of the Covered FPS Ownership Period, the stockholders’ ability to act by written consent or by electronic transmission pursuant to the immediately preceding sentence shall forever terminate, and, thereafter, (i) no action shall be taken by the stockholders of the Company except at an annual or special meeting of such stockholders and (ii) the stockholders may not take action by written consent or by electronic transmission.

4.            Notice. Advance notice of stockholder nominations for the election of directors and of business to be brought by stockholders before any meeting of the stockholders of the Company shall be given in the manner provided in the Bylaws of the Company.

5.            Special Meetings. Special meetings of the stockholders of the Company may be called only by (i) the Chairperson of the Board of Directors or (ii) the Board of Directors pursuant to a resolution adopted by a majority of the directors then holding office (whether or not there exist any vacancies in previously authorized directorships at the time any such resolution is presented to the Board of Directors for adoption), and the ability of the stockholders to call a special meeting is hereby specifically denied; provided, however, at any time prior to the conclusion of the Covered FPS Ownership Period, special meetings of the stockholders of the Company shall be called by the Company at the request of the holders of not less than a majority in voting power of all then-outstanding shares of capital stock of the Company entitled to vote generally in the election of directors.

ARTICLE VI.

Section A.           The liability of the directors for monetary damages shall be eliminated to the fullest extent permitted by applicable law.

Section B.           To the fullest extent permitted by applicable law, the Company is authorized to provide indemnification of (and advancement of expenses to) directors, officers and agents of the Company (and any other persons to which applicable law permits the Company to provide indemnification) through Bylaw provisions, agreements with such agents or other persons, vote of stockholders or disinterested directors or otherwise in excess of the indemnification and advancement otherwise permitted by such applicable law. If applicable law is amended after approval by the stockholders of this Article VI to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director to the Company shall be eliminated or limited to the fullest extent permitted by applicable law as so amended.

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Section C.          Any repeal or modification of this Article VI shall only be prospective and shall not affect the rights or protections or increase the liability of any director under this Article VI in effect at the time of the alleged occurrence of any act or omission to act giving rise to liability or indemnification.

ARTICLE VII.

Section A.           Unless the Company consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware or if and only if the Court of Chancery lack subject matter jurisdiction, any state court located within the State of Delaware or, if and only if all such state courts lack subject matter jurisdiction, the federal district court for the District of Delaware (together with the Court of Chancery, the “Delaware Courts” and individually, a “Delaware Court”) shall, to the fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company; (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Company to the Company or the Company’s stockholders; (iii) any action asserting a claim against the Company or any director or officer or other employee of the Company arising pursuant to any provision of the DGCL, the Company’s Certificate of Incorporation or the Bylaws of the Company; or (iv) any action asserting a claim against the Company or any director or officer or other employee of the Company governed by the internal affairs doctrine, except for, as to each of (i) through (iv) above, any claim (A) as to which the Delaware Court determines that there is an indispensable party not subject to the jurisdiction of the Delaware Court (and the indispensable party does not consent to the personal jurisdiction of the Delaware Court within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Delaware Court, or (C) for which the Delaware Court does not have subject matter jurisdiction. Notwithstanding any of the foregoing to the contrary, unless the Company consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended. Notwithstanding any of the foregoing to the contrary, the provisions of this Section A of this Article VII will not apply to suits brought to enforce a duty or liability created by the Securities Exchange Act of 1934, as amended, or any other claim for which the federal courts have exclusive jurisdiction.

Section B.           If any action the subject matter of which is within the scope of Section A of this Article VII (other than any complaint asserting a cause of action arising under the Securities Act of 1933, as amended) is filed in a court other than a court located within the State of Delaware (a “Foreign Action”) in the name of any stockholder, such stockholder shall be deemed to have consented to (i) the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce Section A of this Article VII (an “FSC Enforcement Action”) and (ii) having service of process made upon such stockholder in any such FSC Enforcement Action by service upon such stockholder’s counsel in the Foreign Action as agent for such stockholder.

Section C.          If any provision or provisions of this Article VII is held to be invalid, illegal or unenforceable as applied to any person or entity or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Article VII (including, without limitation, each portion of any sentence of this Article VII containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) and the application of such provision to other persons or entities and circumstances shall not in any way be affected or impaired thereby. Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Company shall be deemed to have notice of and to have consented to the provisions of this Article VII.

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ARTICLE VIII.

Section A.          In recognition and anticipation that FPS and its Affiliates, and their respective partners, principals, directors, officers, members, managers, equityholders and/or employees, including without limitation any of the foregoing who serve as officer of the Company or members of the Board of Directors (collectively, the “Identified Persons” and each, an “Identified Person”) may now engage and may continue to engage in the same or similar activities or related lines of business as those in which the Company, directly or indirectly, may engage and/or other business activities that overlap with or compete with those in which the Company or any of its Affiliates, directly or indirectly, may engage or propose to engage, the provisions of this Article VIII are set forth to regulate and define the conduct of certain affairs of the Company with respect to certain classes or categories of business opportunities as they may involve any of the Identified Persons and the powers, rights, duties and liabilities of the Company and its directors, officers and stockholders in connection therewith. In furtherance of the foregoing, no Identified Person shall, to the fullest extent permitted by law, (A) have any duty to refrain from directly or indirectly (i) engaging in the same or similar business activities or lines of business in which the Company or any of its Affiliates now engages or proposes to engage or (ii) otherwise competing with the Company or any of its Affiliates, and, to the fullest extent permitted by law, no Identified Person shall be liable to the Company or its stockholders or to any Affiliate of the Company for breach of any fiduciary duty solely by reason of the fact that such Identified Person engages in any such activities; and (B) the Company hereby renounces any interest or expectancy in, or right to be offered an opportunity to participate in, any business opportunity that may be a corporate opportunity for an Identified Person and the Company or any of its Affiliates. Subject to Section B of this Article VIII, if any Identified Person acquires knowledge of a potential transaction or other business opportunity that may be a corporate opportunity for itself, herself or himself and the Company or any of its Affiliates, such Identified Person shall, to the fullest extent permitted by law, have no duty to communicate or offer such transaction or other business opportunity to the Company or any of its Affiliates and, to the fullest extent permitted by law, shall not be liable to the Company or its stockholders or to any Affiliate of the Company for breach of any fiduciary duty as a stockholder, director or officer of the Company solely by reason of the fact that such Identified Person pursues or acquires such corporate opportunity for itself, herself or himself, or offers or directs such corporate opportunity to another Person or does not communicate information regarding such corporate opportunity to the Company.

Section B.           Notwithstanding the foregoing provisions of this Article VIII, the Company does not renounce its interest in any corporate opportunity offered to any Identified Person (including any Identified Person who serves as an officer of the Company) if such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the Company, and the provisions of Section A of this Article VIII shall not apply to any such corporate opportunity.

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Section C.          In addition to and notwithstanding the foregoing provisions of this Article VIII, a potential corporate opportunity shall not be deemed to be a corporate opportunity for the Company if it is a business opportunity that (i) the Company is neither financially or legally able, nor contractually permitted to undertake, (ii) from its nature, is not in the line of the Company’s business or is of no practical advantage to the Company or (iii) is one in which the Company has no interest or reasonable expectancy.

Section D.         For purposes of this Article VIII, “Affiliate” means (i) in respect of FPS, any person or entity that, directly or indirectly, controls, is under common control with, or is controlled by FPS (other than the Company and any entity that is controlled by the Company), and shall be deemed to include, without limitation, Intervale Capital LLC and RNS Capital LLC, and (ii) in respect of the Company, any person or entity that, directly or indirectly, is controlled by the Company. For purposes of this Article VIII, “control” including the terms “controlling,” “controlled by” and “under common control with,” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person or entity, whether through the ownership of voting stock, by contract, or otherwise. A person or entity who is the owner of 20% or more of the outstanding voting securities of any corporation, partnership, unincorporated association or other entity shall be presumed to have control of such entity, in the absence of proof by a preponderance of the evidence to the contrary. Notwithstanding the foregoing, a presumption of control shall not apply where such person or entity holds voting stock, in good faith and not for the purpose of circumventing this Section D, as an agent, bank, broker, nominee, custodian or trustee for one or more owners who do not individually or as a group have control of such entity.

Section E.           To the fullest extent permitted by law, any person or entity purchasing or otherwise acquiring any interest in any shares of capital stock of the Company shall be deemed to have notice of and to have consented to the provisions of this Article VIII. Neither the alteration, amendment, addition to or repeal of this Article VIII, nor the adoption of any provision of this Second Amended and Restated Certificate of Incorporation (or any certificate of designation filed with respect to a series of Preferred Stock) inconsistent with this Article VIII, shall eliminate or reduce the effect of this Article VIII in respect of any business opportunity first identified or any other matter occurring, or any cause of action, suit or claim that, but for this Article VIII, would accrue or arise, prior to such alteration, amendment, addition, repeal or adoption. This Article VIII shall not limit any protections or defenses available to, or indemnification or advancement rights of, any director or officer of the Company under this Second Amended and Restated Certificate of Incorporation, any bylaws or applicable law.

ARTICLE IX.

Section A.          Indemnification of Directors and Officers. The Company shall indemnify its directors and officers to the fullest extent not prohibited by the DGCL or any other applicable law; provided, however, that the Company may modify the extent of the indemnification by individual contracts with its directors and officers; and, provided, further, that the Company shall not be required to indemnify any director or officer in connection with any proceeding (or part thereof) initiated by such person unless (i) indemnification is expressly required to be made by law, (ii) the proceeding was authorized by the Board of Directors of the Company, (iii) indemnification is provided by the Company, in its sole discretion, pursuant to the powers vested in the Company under the DGCL or any other applicable law or (iv) indemnification is required to be made under Section D of this Article IX.

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Section B.          Indemnification of Employees and other Agents. The Company shall have power to indemnify its employees and other agents as set forth in the DGCL or any other applicable law. The Board of Directors shall have the power to delegate to any person the Board of Directors decides the determination of whether indemnification shall be given.

Section C.          Expense. The Company shall advance to any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was a director or officer, of the Company, or is or was serving at the request of the Company as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, prior to the final disposition of the proceeding, promptly following request therefor, all expenses incurred by any director or officer in connection with such proceeding provided, however, that if the DGCL requires, an advancement of expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the Company of an undertaking (hereinafter an “undertaking”), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a “final adjudication”) that such indemnitee is not entitled to be indemnified for such expenses under this Article IX or otherwise.

Section D.          Enforcement. The rights conferred on any person by this Article IX shall not be exclusive of any other right which such person may have or hereafter acquire under any applicable statute, provision of the Second Amended and Restated Certificate of Incorporation, Bylaws, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding office. The Company is specifically authorized to enter into individual contracts with any or all of its directors, officers, employees or agents respecting indemnification and advances, to the fullest extent not prohibited by the DGCL or any other applicable law.

Section E.          Non-Exclusivity of Rights. The rights conferred on any person by this Article IX shall not be exclusive of any other right which such person may have or hereafter acquire under any applicable statute, provision of the Second Amended and Restated Certificate of Incorporation, Bylaws, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding office. The Company is specifically authorized to enter into individual contracts with any or all of its directors, officers, employees or agents respecting indemnification and advances, to the fullest extent not prohibited by the DGCL or any other applicable law.

Section F.           Survival of Rights. The rights conferred on any person by this Article IX shall continue as to a person who has ceased to be a director, officer, employee or other agent and shall inure to the benefit of the heirs, executors and administrators of such a person.

Section G.          Insurance. To the fullest extent permitted by the DGCL or any other applicable law, the Company, upon approval by the Board of Directors, may purchase insurance on behalf of any person required or permitted to be indemnified pursuant to this Article IX.

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Section H.          Amendments. Any repeal or modification of this Article IX shall only be prospective and shall not affect the rights under this Article IX in effect at the time of the alleged occurrence of any action or omission to act that is the cause of any proceeding against any agent of the Company.

Section I.           Savings Clause. If this Article IX or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify each director and officer to the full extent not prohibited by any applicable portion of this Article IX that shall not have been invalidated, or by any other applicable law. If this Article IX is invalid due to the application of the indemnification provisions of another jurisdiction, then the Company shall indemnify each director and executive officer to the full extent under any other applicable law.

Section J.           Certain Definitions. For the purposes of this Article IX, the following definitions shall apply:

1.           The term “proceeding” shall be broadly construed and shall include, without limitation, the investigation, preparation, prosecution, defense, settlement, arbitration and appeal of, and the giving of testimony in, any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative.

2.           The term “expenses” shall be broadly construed and shall include, without limitation, court costs, attorneys’ fees, witness fees, fines, amounts paid in settlement or judgment and any other costs and expenses of any nature or kind incurred in connection with any proceeding.

3.           The term the “Company” shall include, in addition to the resulting entity, any constituent entity (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent entity, or is or was serving at the request of such constituent entity as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Article IX with respect to the resulting or surviving corporation as he or she would have with respect to such constituent entity if its separate existence had continued.

4.           References to a “director,” “executive officer,” “officer,” “employee,” or “agent” of the Company shall include, without limitation, situations where such person is serving at the request of the Company as, respectively, a director, executive officer, officer, employee, trustee or agent of another corporation, partnership, joint venture, trust or other enterprise.

5.           References to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to “serving at the request of the Company” shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee, or agent with respect to an employee benefit plan, its participants, or beneficiaries; and a person who acted in good faith and in a manner he or she reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Company” as referred to in this Article IX.

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ARTICLE X.

During the Covered FPS Ownership Period, the Company hereby expressly elects not to be governed by Section 203 of the DGCL.

ARTICLE XI.

The name and mailing address of the incorporator are Wes Kimmel, 112 Corporate Drive, Suite 3, Portsmouth, NH 03801.

ARTICLE XII.

Section A.          The Company reserves the right to amend, alter, change or repeal any provision contained in this Second Amended and Restated Certificate of Incorporation, in the manner now or hereafter prescribed by statute, except as provided in Section B of this Article XII, and all rights conferred upon the stockholders herein are granted subject to this reservation.

Section B.          Notwithstanding any other provisions of this Second Amended and Restated Certificate of Incorporation or any provision of law which might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of the holders of any particular class or series of the Company required by law or by this Second Amended and Restated Certificate of Incorporation or any certificate of designation filed with respect to a series of Preferred Stock, (1) during the Covered FPS Ownership Period, the affirmative vote of the holders of more than 50% of the voting power of all of the then-outstanding shares of capital stock of the Company entitled to vote generally in the election of directors, voting together as a single class, at any time, shall be required to alter, amend or repeal Articles V, VI, VII, VIII, IX, X or XII in any respect, or to adopt any provision or bylaw inconsistent therewith, and (2) after the Covered FPS Ownership Period, the affirmative vote of the holders of at least 66 2/3% of the voting power of all of the then-outstanding shares of capital stock of the Company entitled to vote generally in the election of directors, voting together as a single class, at any time, shall be required to alter, amend or repeal Articles V, VI, VII, VIII, IX, X or XII in any respect, or to adopt any provision or bylaw inconsistent therewith.

[Signature Page Follows]

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IN WITNESS WHEREOF, the undersigned has caused this Second Amended and Restated Certificate of Incorporation to be signed on this ___ day of _____________, 2021.

Name:	Wes Kimmel
Title:	Incorporator

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EX-3.2

Exhibit 3.2 

AMENDED AND RESTATED BYLAWS

OF

FLEXENERGY GREEN SOLUTIONS, INC.

(A DELAWARE CORPORATION) 

(initially adopted on December 31, 2020)

(as amended and restated on May 10, 2021)

The following Amended and Restated Bylaws amend, restate and supersede the previously adopted Bylaws of FlexEnergy Green Solutions, Inc., a Delaware corporation (the “corporation”):

ARTICLE I
OFFICES

Section 1.        Registered Office. The registered office of the corporation in the State of Delaware shall be in the City of Wilmington, County of New Castle.

Section 2.        Other Offices. The corporation shall also have and maintain an office or principal place of business at such place as may be fixed by the Board of Directors, and may also have offices at such other places, both within and without the State of Delaware, as the Board of Directors may from time to time determine or the business of the corporation may require.

ARTICLE II
CORPORATE SEAL

Section 3.       Corporate Seal. The Board of Directors may adopt a corporate seal. If adopted, the corporate seal shall consist of a die bearing the name of the corporation and the inscription, “Corporate Seal-Delaware.” The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

ARTICLE III
STOCKHOLDERS’ MEETINGS

Section 4.        Place of Meetings. Meetings of the stockholders of the corporation may be held at such place, if any, either within or without the State of Delaware, as may be determined from time to time by the Board of Directors. The Board of Directors may, in its sole discretion, determine that the meeting shall not be held at any place, but may instead be held solely by means of remote communication as provided under the Delaware General Corporation Law (“DGCL”) and Section 14(c).

Section 5.        Annual Meeting.

(a)         The annual meeting of the stockholders of the corporation, for the purpose of election of directors and for such other business as may properly come before it, shall be held on such date and at such time as may be designated from time to time by the Board of Directors. Nominations of persons for election to the Board of Directors of the corporation and the proposal of business to be considered by the stockholders may be made at an annual meeting of stockholders: (i) pursuant to the corporation’s notice of meeting of stockholders (with respect to business other than nominations); (ii) brought specifically by or at the direction of the Board of Directors or any authorized committee thereof; or (iii) by any stockholder of the corporation who was a stockholder of record at the time of giving the stockholder’s notice provided for in Section 5(b), who is entitled to vote at the meeting and who complied with the notice procedures set forth in Section 5. For the avoidance of doubt, clause (iii) above shall be the exclusive means for a stockholder to make nominations and submit other business (other than matters properly included in the corporation’s notice of meeting of stockholders and proxy statement under Rule 14a-8 under the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (the “1934 Act”)) before an annual meeting of stockholders.

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(b)         At an annual meeting of the stockholders, only such business shall be conducted as is a proper matter for stockholder action under Delaware law and as shall have been properly brought before the meeting.

(1)        For nominations for the election to the Board of Directors to be properly brought before an annual meeting by a stockholder pursuant to clause (iii) of Section 5(a), the stockholder must deliver written notice to the Secretary at the principal executive offices of the corporation on a timely basis as set forth in Section 5(b)(3) and must update and supplement such written notice on a timely basis as set forth in Section 5(c). Such stockholder’s notice shall set forth: (A) as to each nominee such stockholder proposes to nominate at the meeting: (1) the name, age, business address and residence address of such nominee, (2) the principal occupation or employment of such nominee, (3) the class and number of shares of each class of capital stock of the corporation which are owned of record and beneficially by such nominee, (4) the date or dates on which such shares were acquired and the investment intent of such acquisition and (5) such other information concerning such nominee as would be required to be disclosed in a proxy statement soliciting proxies for the election of such nominee as a director in an election contest (even if an election contest is not involved), or that is otherwise required to be disclosed pursuant to Section 14 of the 1934 Act and the rules and regulations promulgated thereunder (including such person’s written consent to being named as a nominee and to serving as a director if elected); and (B) the information required by Section 5(b)(4). The corporation may require any proposed nominee to furnish such other information as it may reasonably require to determine the eligibility of such proposed nominee to serve as an independent director of the corporation or that could be material to a reasonable stockholder’s understanding of the independence, or lack thereof, of such proposed nominee.

(2)        Other than proposals sought to be included in the corporation’s proxy materials pursuant to Rule 14a-8 under the 1934 Act, for business other than nominations for the election to the Board of Directors to be properly brought before an annual meeting by a stockholder pursuant to clause (iii) of Section 5(a), the stockholder must deliver written notice to the Secretary at the principal executive offices of the corporation on a timely basis as set forth in Section 5(b)(3), and must update and supplement such written notice on a timely basis as set forth in Section 5(c). Such stockholder’s notice shall set forth: (A) as to each matter such stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting, and any material interest (including any anticipated benefit of such business to any Proponent (as defined below) other than solely as a result of its ownership of the corporation’s capital stock, that is material to any Proponent individually, or to the Proponents in the aggregate) in such business of any Proponent; and (B) the information required by Section 5(b)(4).

(3)        To be timely, the written notice required by Section 5(b)(1) or Section 5(b)(2) must be received by the Secretary at the principal executive offices of the corporation not later than the close of business on the ninetieth (90^th) day nor earlier than the close of business on the one hundred twentieth (120^th) day prior to the first anniversary of the preceding year’s annual meeting; provided, however, that, subject to the last sentence of this Section 5(b)(3), if the date of the annual meeting is advanced more than thirty (30) days prior to or delayed by more than thirty (30) days after the anniversary of the preceding year’s annual meeting, notice by the stockholder to be timely must be so received not earlier than the close of business on the one hundred twentieth (120^th) day prior to such annual meeting and not later than the close of business on the later of the ninetieth (90^th) day prior to such annual meeting or the tenth (10^th) day following the day on which public announcement of the date of such meeting is first made. In no event shall an adjournment or a postponement of an annual meeting for which notice has been given, or the public announcement thereof has been made, commence a new time period for the giving of a stockholder’s notice as described above.

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(4)        The written notice required by Section 5(b)(1) or Section 5(b)(2) shall also set forth, as of the date of the notice and as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (each, a “Proponent” and collectively, the “Proponents”): (A) the name and address of each Proponent, as they appear on the corporation’s books; (B) the class, series and number of shares of the corporation that are owned beneficially and of record by each Proponent; (C) a description of any agreement, arrangement or understanding (whether oral or in writing) with respect to such nomination or proposal between or among any Proponent and any of its affiliates or associates, and any others (including their names) acting in concert, or otherwise under the agreement, arrangement or understanding, with any of the foregoing; (D) a representation that the Proponents are holders of record or beneficial owners, as the case may be, of shares of the corporation entitled to vote at the meeting and intend to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice (with respect to a notice under Section 5(b)(1)) or to propose the business that is specified in the notice (with respect to a notice under Section 5(b)(2)); (E) a representation as to whether the Proponents intend to deliver a proxy statement and form of proxy to holders of a sufficient number of holders of the corporation’s voting shares to elect such nominee or nominees (with respect to a notice under Section 5(b)(1)) or to carry such proposal (with respect to a notice under Section 5(b)(2)); (F) to the extent known by any Proponent, the name and address of any other stockholder supporting the proposal on the date of such stockholder’s notice; (G) a description of all Derivative Transactions (as defined below) by each Proponent during the previous twelve (12)-month period, including the date of the transactions and the class, series and number of securities involved in, and the material economic terms of, such Derivative Transactions; and (H) as to any business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend the Bylaws of the corporation, the language of the proposed amendment), the reasons for conducting such business at the meeting and any material interest in such business of such Proponents.

(c)         A stockholder providing written notice required by Section 5(b)(1) or Section 5(b)(2) shall update and supplement such notice in writing, if necessary, so that the information provided or required to be provided in such notice is true and correct in all material respects as of (i) the record date for the meeting and (ii) the date that is five (5) business days prior to the meeting and, in the event of any adjournment or postponement thereof, five (5) business days prior to such adjourned or postponed meeting. In the case of an update and supplement pursuant to clause (i) of this Section 5(c), such update and supplement shall be received by the Secretary at the principal executive offices of the corporation not later than five (5) business days after the first public announcement of the record date for the meeting. In the case of an update and supplement pursuant to clause (ii) of this Section 5(c), such update and supplement shall be received by the Secretary at the principal executive offices of the corporation not later than two (2) business days prior to the date for the meeting, and, in the event of any adjournment or postponement thereof, two (2) business days prior to such adjourned or postponed meeting.

(d)         Notwithstanding anything in Section 5(b)(3) to the contrary, if the number of directors of the Board of Directors is increased and there is no public announcement of the appointment of a director to such class, or, if no appointment was made, of the vacancy in such class, made by the corporation at least ten (10) days before the last day a stockholder may deliver a notice of nomination in accordance with Section 5(b)(3), a stockholder’s notice required by this Section 5 and which complies with the requirements in Section 5(b)(1), other than the timing requirements in Section 5(b)(3), shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it is received by the Secretary at the principal executive offices of the corporation not later than the close of business on the tenth (10^th) day following the day on which such public announcement is first made by the corporation.

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(e)         A person shall not be eligible for election or re-election as a director unless the person is nominated either in accordance with clause (ii) of Section 5(a), or in accordance with clause (iii) of Section 5(a). Except as otherwise required by law, the chairperson of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made, or proposed, as the case may be, in accordance with the procedures set forth in these Bylaws and, if any proposed nomination or business is not in compliance with these Bylaws, or the Proponent does not act in accordance with the representations in clauses (D) and (E) of Section 5(b)(4), to declare that such proposal or nomination shall not be presented for stockholder action at the meeting and shall be disregarded, notwithstanding that proxies in respect of such nominations or such business may have been solicited or received.

(f)         Notwithstanding the foregoing provisions of this Section 5, in order to include information with respect to a stockholder proposal in the proxy statement and form of proxy for a stockholders’ meeting, a stockholder must also comply with all applicable requirements of the 1934 Act and the rules and regulations thereunder. Nothing in these Bylaws shall be deemed to affect any rights of stockholders to request inclusion of proposals in the corporation’s proxy statement pursuant to Rule 14a-8 under the 1934 Act; provided, however, that any references in these Bylaws to the 1934 Act or the rules and regulations thereunder are not intended to and shall not limit the requirements applicable to proposals and/or nominations to be considered pursuant to clause (iii) of Section 5(a).

(g)         Notwithstanding the foregoing provisions of this Section 5, unless otherwise required by law, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual or special meeting of stockholders of the Corporation to present a nomination or proposed business, such nomination shall be disregarded and such proposed business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the corporation. For purposes of this Section 5 to be considered a qualified representative of the stockholder, a person must be a duly authorized officer, manager or partner of such stockholder or must be authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of stockholders.

(h)         For purposes of Section 5 and Section 6,

(1)        “affiliates” and “associates” shall have the meanings set forth in Rule 405 under the Securities Act of 1933, as amended (the “1933 Act”);

(2)        “Derivative Transaction” means any agreement, arrangement, interest or understanding entered into by, or on behalf or for the benefit of, any Proponent or any of its affiliates or associates, whether record or beneficial: (A) the value of which is derived in whole or in part from the value of any class or series of shares or other securities of the corporation, (B) which otherwise provides any direct or indirect opportunity to gain or share in any gain derived from a change in the value of securities of the corporation, (C) the effect or intent of which is to mitigate loss, manage risk or benefit of security value or price changes, or (D) which provides the right to vote or increase or decrease the voting power of, such Proponent, or any of its affiliates or associates, with respect to any securities of the corporation, which agreement, arrangement, interest or understanding may include, without limitation, any option, warrant, debt position, note, bond, convertible security, swap, stock appreciation right, short position, profit interest, hedge, right to dividends, voting agreement, performance-related fee or arrangement to borrow or lend shares (whether or not subject to payment, settlement, exercise or conversion in any such class or series), and any proportionate interest of such Proponent in the securities of the corporation held by any general or limited partnership, or any limited liability company, of which such Proponent is, directly or indirectly, a general partner or managing member; and

(3)        “public announcement” means disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the corporation with the Securities and Exchange Commission pursuant to 13, 14 or 15(d) of the 1934 Act.

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Section 6.           Special Meetings.

(a)         Special meetings of the stockholders of the corporation may be called only in the manner provided in the Certificate of Incorporation, as the same may be amended from time to time.

(b)         The Board of Directors shall determine the time and place, if any, of such special meeting. The Board of Directors may, in its sole discretion, determine that special meetings of the stockholders shall not be held at any place, but may instead be held solely by means of remote communication as described in Section 14(c). Upon determination of the time and place, if any, of the meeting, the Secretary shall cause a notice of meeting to be given to the stockholders entitled to vote, in accordance with the provisions of Section 7. No business may be transacted at such special meeting otherwise than specified in the notice of meeting. The Board of Directors may postpone, reschedule or cancel any special meeting of the stockholders previously scheduled by the Chairperson of the Board of Directors or by the Board of Directors.

(c)         Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected (i) by or at the direction of the Board of Directors or (ii) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any stockholder of the corporation who is a stockholder of record at the time of giving notice provided for in this paragraph, who shall be entitled to vote at the meeting and who delivers written notice to the Secretary of the corporation setting forth the information required by Section 5(b)(1). If the corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder of record may nominate a person or persons (as the case may be), for election to such position(s) as specified in the corporation’s notice of meeting, if written notice setting forth the information required by Section 5(b)(1) shall be received by the Secretary at the principal executive offices of the corporation not later than the close of business on the later of the ninetieth (90^th) day prior to such meeting or the tenth (10^th) day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. The stockholder shall also update and supplement such information as required under Section 5(c). In no event shall an adjournment or a postponement of a special meeting for which notice has been given, or the public announcement thereof has been made, commence a new time period for the giving of a stockholder’s notice as described above.

(d)         Notwithstanding the foregoing provisions of this Section 6, a stockholder must also comply with all applicable requirements of the 1934 Act and the rules and regulations thereunder with respect to matters set forth in this Section 6. Nothing in these Bylaws shall be deemed to affect any rights of stockholders to request inclusion of proposals in the corporation’s proxy statement pursuant to Rule 14a-8 under the 1934 Act; provided, however, that any references in these Bylaws to the 1934 Act or the rules and regulations thereunder are not intended to and shall not limit the requirements applicable to nominations for the election to the Board of Directors to be considered pursuant to Section 6(c).

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Section 7.           Notice of Meetings. Except as otherwise provided by law, notice, given in writing or by electronic transmission, of each meeting of stockholders shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting as of the record date for notice of such meeting, such notice to specify the place, if any, date and hour, of the meeting, the record date for determining the stockholders entitled to vote at the meeting (if such date is different from the record date for stockholders entitled to notice of the meeting), and, in the case of special meetings, the purpose or purposes of the meeting, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at any such meeting. If mailed, notice is given when deposited in the United States mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the corporation. Notice of the time, place, if any, and purpose of any meeting of stockholders may be waived in writing, signed by the person entitled to notice thereof or by electronic transmission by such person, either before or after such meeting, and will be waived by any stockholder by his or her attendance thereat in person, by remote communication, if applicable, or by proxy, except when the stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Any stockholder so waiving notice of such meeting shall be bound by the proceedings of any such meeting in all respects as if due notice thereof had been given.

Section 8.           Quorum. At all meetings of stockholders, except where otherwise provided by statute or by the Certificate of Incorporation, or by these Bylaws, the presence, in person, by remote communication, if applicable, or by proxy duly authorized, of the holders of a majority of the voting power of the outstanding shares of stock entitled to vote shall constitute a quorum for the transaction of business. In the absence of a quorum, any meeting of stockholders may be adjourned, from time to time, either by the chairperson of the meeting or by vote of the holders of a majority of voting power of the shares represented thereat, but no other business shall be transacted at such meeting. The stockholders present at a duly called or convened meeting, at which a quorum is present, may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum. Except as otherwise provided by statute or by applicable stock exchange rules, or by the Certificate of Incorporation or these Bylaws, in all matters other than the election of directors, the affirmative vote of the majority of the voting power of the shares present in person, by remote communication, if applicable, or represented by proxy duly authorized at the meeting and entitled to vote on the subject matter shall be the act of the stockholders. Except as otherwise provided by statute, the Certificate of Incorporation or these Bylaws, directors shall be elected by a plurality of the votes of the shares present in person, by remote communication, if applicable, or represented by proxy at the meeting and entitled to vote generally on the election of directors. Where a separate vote by a class or classes or series is required, except where otherwise provided by statute, by applicable stock exchange rules or by the Certificate of Incorporation or these Bylaws, a majority of the voting power of the outstanding shares of such class or classes or series, present in person, by remote communication, if applicable, or represented by proxy duly authorized, shall constitute a quorum entitled to take action with respect to that vote on that matter. Except where otherwise provided by statute, by applicable stock exchange rules or by the Certificate of Incorporation or these Bylaws, the affirmative vote of the majority (plurality, in the case of the election of directors) of shares of such class or classes or series present in person, by remote communication, if applicable, or represented by proxy at the meeting shall be the act of such class or classes or series.

Section 9.           Adjournment and Notice of Adjourned Meetings. Any meeting of stockholders, whether annual or special, may be adjourned from time to time either by the chairperson of the meeting or by the vote of the holders of a majority of the voting power of the shares present in person, by remote communication, if applicable, or represented by proxy at the meeting. When a meeting is adjourned to another time or place, if any, notice need not be given of the adjourned meeting if the time and place, if any, thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the corporation may transact any business that might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days or if after the adjournment a new record date for determination of stockholders entitled to vote is fixed for the adjourned meeting, the Board of Directors shall fix as the record date for determining stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote at the adjourned meeting, and shall give notice of the adjourned meeting to each stockholder of record as of the record date so fixed for notice of such adjourned meeting.

Section 10.         Voting Rights. For the purpose of determining those stockholders entitled to vote at any meeting of the stockholders, except as otherwise provided by law, only persons in whose names shares stand on the stock records of the corporation on the record date, as provided in Section 12, shall be entitled to vote at any meeting of stockholders. Every person entitled to vote shall have the right to do so either in person, by remote communication, if applicable, or by an agent or agents authorized by a proxy granted in accordance with Delaware law. An agent so appointed need not be a stockholder. No proxy shall be voted after three (3) years from its date of creation unless the proxy provides for a longer period.

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Section 11.         Joint Owners of Stock. If shares or other securities having voting power stand of record in the names of two (2) or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, tenants by the entirety, or otherwise, or if two (2) or more persons have the same fiduciary relationship respecting the same shares, unless the Secretary is given written notice to the contrary and is furnished with a copy of the instrument or order appointing them or creating the relationship wherein it is so provided, their acts with respect to voting shall have the following effect: (a) if only one (1) votes, his or her act binds all; (b) if more than one (1) votes, the act of the majority so voting binds all; (c) if more than one (1) votes, but the vote is evenly split on any particular matter, each faction may vote the securities in question proportionally, or may apply to the Delaware Court of Chancery for relief as provided in the DGCL, Section 217(b). If the instrument filed with the Secretary shows that any such tenancy is held in unequal interests, a majority or even-split for the purpose of clause (c) shall be a majority or even-split in interest.

Section 12.        List of Stockholders. The Secretary shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at said meeting (provided, however, if the record date for determining the stockholders entitled to vote is less than ten (10) days before the date of the meeting, the list shall reflect the stockholders entitled to vote as of the tenth day before the meeting date), arranged in alphabetical order, showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, (a) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (b) during ordinary business hours, at the principal place of business of the corporation. If the meeting is to be held at a place, then a list of stockholders entitled to vote at the meeting shall be produced and kept at the time and place of the meeting during the whole time thereof and may be examined by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting. If the corporation makes the list available on an electronic network, the corporation may take reasonable steps to ensure that such information is available only to stockholders of the corporation.

Section 13.        Action Without a Meeting. During the period that FlexEnergy Power Solutions, LLC, a Delaware limited liability company (“FPS”), continues to hold stock representing at least 50% of the voting power of all of the then-outstanding shares of the capital stock of the corporation entitled to vote generally in the election of directors (the “Covered FPS Ownership Period”), any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing or by electronic transmission setting forth the action so taken shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. After the Covered FPS Ownership Period, the stockholders’ ability to act by written consent or by electronic transmission pursuant to the immediately preceding sentence shall forever terminate, and, thereafter, (i) no action shall be taken by the stockholders of the corporation except at an annual or special meeting of such stockholders and (ii) the stockholders may not take action by written consent or by electronic transmission.

Section 14.        Organization.

(a)            At every meeting of stockholders, the Chairperson of the Board of Directors, or, if a Chairperson has not been appointed or is absent, the Chief Executive Officer, or, if the Chief Executive Officer is absent, the President, or, if the President is absent, a chairperson of the meeting chosen by the stockholders holding a majority in voting power of the stockholders entitled to vote, present in person or by proxy, shall act as chairperson. The Secretary, or, in his or her absence, an Assistant Secretary directed to do so by the Chief Executive Officer or the President, shall act as secretary of the meeting.

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(b)         The Board of Directors shall be entitled to make such rules or regulations for the conduct of meetings of stockholders as it shall deem necessary, appropriate or convenient. Subject to such rules and regulations of the Board of Directors, if any, the chairperson of the meeting shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairperson, are necessary, appropriate or convenient for the proper conduct of the meeting, including, without limitation, establishing an agenda or order of business for the meeting, rules and procedures for maintaining order at the meeting and the safety of those present, limitations on participation in such meeting to stockholders of record of the corporation and their duly authorized and constituted proxies and such other persons as the chairperson shall permit, restrictions on entry to the meeting after the time fixed for the commencement thereof, limitations on the time allotted to questions or comments by participants and regulation of the opening and closing of the polls for balloting on matters which are to be voted on by ballot. The date and time of the opening and closing of the polls for each matter upon which the stockholders will vote at the meeting shall be announced at the meeting. Unless and to the extent determined by the Board of Directors or the chairperson of the meeting, meetings of stockholders shall not be required to be held in accordance with rules of parliamentary procedure.

(c)         If authorized by the Board of Directors in its sole discretion, and subject to such guidelines and procedures as the Board of Directors may adopt, stockholders entitled to vote at such meeting and proxy holders not physically present at a meeting of stockholders may, by means of remote communication: (i) participate in a meeting of stockholders; and (ii) be deemed to be present in person and vote at a meeting of stockholders, whether such meeting is to be held at a designated place or solely by means of remote communication; provided, that (A) the corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxy holder, (B) the corporation shall implement reasonable measures to provide such stockholders and proxy holders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings, and (C) if any stockholder or proxy holder votes or takes other action at the meeting by means of remote communication, a record of such votes or other action shall be maintained by the corporation.

ARTICLE IV
DIRECTORS

Section 15.        Number and Term of Office. The authorized number of directors of the corporation shall be fixed in accordance with the Certificate of Incorporation. Directors need not be stockholders unless so required by the Certificate of Incorporation. If for any cause, the directors shall not have been elected at an annual meeting, they may be elected as soon thereafter as convenient at a special meeting of the stockholders called for that purpose in the manner provided in these Bylaws.

Section 16.        Powers. The business and affairs of the corporation shall be managed by or under the direction of the Board of Directors, except as may be otherwise provided by statute or by the Certificate of Incorporation.

Section 17.        Annual Election. Subject to the rights of the holders of any series of Preferred Stock to elect additional directors under specified circumstances, following the adoption of these Bylaws, all of the directors shall be of one class and shall be elected annually. Each director shall hold office until the next annual meeting of stockholders and, notwithstanding the foregoing provisions of this Section 17, shall serve until his or her successor is duly elected and qualified or until his or her earlier death, resignation, retirement, disqualification or removal. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director.

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Section 18.        Vacancies. Unless otherwise provided in the Certificate of Incorporation, and subject to the rights of the holders of any series of Preferred Stock or as otherwise provided by applicable law, any vacancies on the Board of Directors resulting from death, resignation, disqualification, removal or other causes and any newly created directorships resulting from any increase in the number of directors shall be filled only by the affirmative vote of a majority of the directors then in office, even though less than a quorum of the Board of Directors, or by a sole remaining director, and not by the stockholders, provided, however, that whenever the holders of any class or classes of stock or series thereof are entitled to elect one or more directors by the provisions of the Certificate of Incorporation, vacancies and newly created directorships of such class or classes or series shall be filled by a majority of the directors elected by such class or classes or series thereof then in office, or by a sole remaining director so elected, and not by the stockholders. Any director elected in accordance with the preceding sentence shall hold office for the remainder of the full term of the director for which the vacancy was created or occurred and until such director’s successor shall have been elected and qualified. A vacancy in the Board of Directors shall be deemed to exist under this Bylaw in the case of the death, removal or resignation of any director.

Section 19.        Resignation. Any director may resign at any time upon notice to the corporation.When one or more directors shall resign from the Board of Directors, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office for the unexpired portion of the term of the director whose place shall be vacated and until his successor shall have been duly elected and qualified.

Section 20.        Removal. Subject to any limitation imposed by applicable law and to the rights of holders of any series of Preferred Stock to elect additional directors under specified circumstances, any individual director or directors may be removed from office by the affirmative vote of the holders of capital stock of the corporation specified in the Certificate of Incorporation.

Section 21.        Meetings

(a)         Regular Meetings. Unless otherwise restricted by the Certificate of Incorporation, regular meetings of the Board of Directors may be held at any time or date and at any place within or without the State of Delaware which has been designated by the Board of Directors and publicized among all directors, either orally or in writing, by telephone, including a voice-messaging system or other system designed to record and communicate messages, facsimile, by electronic mail or other electronic means. No further notice shall be required for regular meetings of the Board of Directors.

(b)         Special Meetings. Unless otherwise restricted by the Certificate of Incorporation, special meetings of the Board of Directors may be held at any time and place within or without the State of Delaware whenever called by the Chairperson of the Board, the Chief Executive Officer or a majority of the authorized number of directors.

(c)         Meetings by Electronic Communications Equipment. Any member of the Board of Directors, or of any committee thereof, may participate in a meeting by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.

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(d)         Notice of Special Meetings. Notice of the time and place of all special meetings of the Board of Directors shall be orally or in writing, by telephone, including a voice messaging system or other system or technology designed to record and communicate messages, facsimile, telegraph or telex, or by electronic mail or other electronic means, during normal business hours, at least twenty-four (24) hours before the date and time of the meeting. If notice is sent by US mail, it shall be sent by first class mail, postage prepaid at least three (3) days before the date of the meeting. Notice of any meeting may be waived in writing or by electronic transmission at any time before or after the meeting and will be waived by any director by attendance thereat, except when the director attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

(e)         Waiver of Notice. The transaction of all business at any meeting of the Board of Directors, or any committee thereof, however called or noticed, or wherever held, shall be as valid as though it had been transacted at a meeting duly held after regular call and notice, if a quorum be present and if, either before or after the meeting, each of the directors not present who did not receive notice shall sign a written waiver of notice or shall waive notice by electronic transmission. All such waivers shall be filed with the corporate records or made a part of the minutes of the meeting.

Section 22.        Quorum and Voting.

(a)         Unless the Certificate of Incorporation requires a greater number, and except with respect to questions related to indemnification arising under Section 44 for which a quorum shall be one-third of the exact number of directors fixed from time to time, a quorum of the Board of Directors shall consist of a majority of the exact number of directors fixed from time to time by the Board of Directors in accordance with the Certificate of Incorporation; provided, however, at any meeting whether a quorum be present or otherwise, a majority of the directors present may adjourn from time to time until the time fixed for the next regular meeting of the Board of Directors, without notice other than by announcement at the meeting.

(b)         At each meeting of the Board of Directors at which a quorum is present, all questions and business shall be determined by the affirmative vote of a majority of the directors present, unless a different vote be required by law, the Certificate of Incorporation or these Bylaws.

Section 23.        Action Without Meeting. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board of Directors or committee, as the case may be, consent thereto in writing or by electronic transmission, and such writing or writings or transmission or transmissions are filed with the minutes of proceedings of the Board of Directors or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

Section 24.        Fees and Compensation. Directors shall be entitled to such compensation for their services as may be approved by the Board of Directors, including, if so approved, by resolution of the Board of Directors, a fixed sum and expenses of attendance, if any, for attendance at each regular or special meeting of the Board of Directors and at any meeting of a committee of the Board of Directors. Nothing herein contained shall be construed to preclude any director from serving the corporation in any other capacity as an officer, agent, employee, or otherwise and receiving compensation therefor.

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Section 25.        Committees.

(a)         Executive Committee. The Board of Directors may appoint an Executive Committee to consist of one (1) or more members of the Board of Directors. The Executive Committee, to the extent permitted by law and provided in the resolution of the Board of Directors shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the corporation, and may authorize the seal (if any) of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to (i) approving or adopting, or recommending to the stockholders, any action or matter (other than the election or removal of directors) expressly required by the DGCL to be submitted to stockholders for approval, or (ii) adopting, amending or repealing any bylaw of the corporation.

(b)         Other Committees. The Board of Directors may, from time to time, appoint such other committees as may be permitted by law. Such other committees appointed by the Board of Directors shall consist of one (1) or more members of the Board of Directors and shall have such powers and perform such duties as may be prescribed by the resolution or resolutions creating such committees, but in no event shall any such committee have the powers denied to the Executive Committee in these Bylaws.

(c)         Term. The Board of Directors, subject to any requirements of any outstanding series of Preferred Stock and the provisions of Section 25(a) or Section 25(b) may at any time increase or decrease the number of members of a committee or terminate the existence of a committee. The membership of a committee member shall terminate on the date of his death or voluntary resignation from the committee or from the Board of Directors. The Board of Directors may at any time for any reason remove any individual committee member and the Board of Directors may fill any committee vacancy created by death, resignation, removal or increase in the number of members of the committee. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee, and, in addition, in the absence or disqualification of any member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member.

(d)        Meetings. Unless the Board of Directors shall otherwise provide, regular meetings of the Executive Committee or any other committee appointed pursuant to this Section 25 shall be held at such times and places as are determined by the Board of Directors, or by any such committee, and when notice thereof has been given to each member of such committee, no further notice of such regular meetings need be given thereafter. Special meetings of any such committee may be held at any place which has been determined from time to time by such committee, and may be called by any director who is a member of such committee, upon notice to the members of such committee of the time and place of such special meeting given in the manner provided for the giving of notice to members of the Board of Directors of the time and place of special meetings of the Board of Directors. Notice of any special meeting of any committee may be waived in writing or by electronic transmission at any time before or after the meeting and will be waived by any director by attendance thereat, except when the director attends such special meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Unless otherwise provided by the Board of Directors in the resolutions authorizing the creation of the committee, a majority of the authorized number of members of any such committee shall constitute a quorum for the transaction of business, and the act of a majority of those present at any meeting at which a quorum is present shall be the act of such committee.

Section 26.        Duties of Chairperson of the Board of Directors. The Chairperson of the Board of Directors, if appointed and when present, shall preside at all meetings of the stockholders and the Board of Directors. The Chairperson of the Board of Directors shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers, as the Board of Directors shall designate from time to time. The powers and duties of the Chairperson of the Board shall not include supervision or control of the preparation of the financial statements of the corporation (other than through participation as a member of the Board). The position of the Chairperson of the Board and Chief Executive Officer may be held by the same person. If a Chairperson of the Board is a director who is not independent and who serves as an employee of the corporation or one of its affiliates, then the Chairperson of the Board of Directors may also be referred to as Executive Chair.

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Section 27.     Organization. At every meeting of the directors, the Chairperson of the Board of Directors, or, if a Chairperson has not been appointed or is absent, the Chief Executive Officer (if a director), or, if a Chief Executive Officer is absent (or is not a director), the President (if a director), or if the President is absent (or is not a director), the most senior Vice President (if a director), or, in the absence of any such person (or is not a director), a chairperson of the meeting chosen by a majority of the directors present, shall preside over the meeting. The Secretary, or in his absence, any Assistant Secretary or other officer, director or other person directed to do so by the person presiding over the meeting, shall act as secretary of the meeting.

ARTICLE V
OFFICERS

Section 28.     Officers Designated. The officers of the corporation shall include, if and when designated by the Board of Directors, the Chairperson, the Chief Executive Officer, the President, one or more Vice Presidents, the Secretary, the Chief Financial Officer and the Treasurer. The Board of Directors may also appoint one or more Assistant Secretaries and Assistant Treasurers and such other officers and agents with such powers and duties as it shall deem necessary. The Board of Directors may assign such additional titles to one or more of the officers as it shall deem appropriate. Any one person may hold any number of offices of the corporation at any one time unless specifically prohibited therefrom by law. The salaries and other compensation of the officers of the corporation shall be fixed by or in the manner designated by the Board of Directors.

Section 29.     Tenure and Duties of Officers.

(a)            General. All officers shall hold office at the pleasure of the Board of Directors and until their successors shall have been duly elected and qualified, unless sooner removed. Any officer elected or appointed by the Board of Directors may be removed at any time by the Board of Directors. If the office of any officer becomes vacant for any reason, the vacancy may be filled by the Board of Directors.

(b)            Duties of Chief Executive Officer. The Chief Executive Officer shall preside at all meetings of the stockholders and at all meetings of the Board of Directors (if a director), unless the Chairperson of the Board of Directors has been appointed and is present. Unless an officer has been appointed Chief Executive Officer of the corporation, the President shall be the chief executive officer of the corporation and shall, subject to the control of the Board of Directors, have general supervision, direction and control of the business and officers of the corporation. To the extent that a Chief Executive Officer has been appointed and no President has been appointed, all references in these Bylaws to the President shall be deemed references to the Chief Executive Officer. The Chief Executive Officer shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers, as the Board of Directors shall designate from time to time.

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(c)            Duties of President. The President shall preside at all meetings of the stockholders and at all meetings of the Board of Directors (if a director), unless the Chairperson of the Board of Directors, or the Chief Executive Officer has been appointed and is present. Unless another officer has been appointed Chief Executive Officer of the corporation, the President shall be the chief executive officer of the corporation and shall, subject to the control of the Board of Directors, have general supervision, direction and control of the business and officers of the corporation. The President shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers, as the Board of Directors shall designate from time to time.

(d)            Duties of Vice Presidents. A Vice President may assume and perform the duties of the President in the absence or disability of the President or whenever the office of President is vacant. A Vice President shall perform other duties commonly incident to their office and shall also perform such other duties and have such other powers as the Board of Directors or the Chief Executive Officer, or, if the Chief Executive Officer has not been appointed or is absent, the President shall designate from time to time.

(e)            Duties of Secretary. The Secretary shall attend all meetings of the stockholders and of the Board of Directors and shall record all acts and proceedings thereof in the minute book of the corporation. The Secretary shall give notice in conformity with these Bylaws of all meetings of the stockholders and of all meetings of the Board of Directors and any committee thereof requiring notice. The Secretary shall perform all other duties provided for in these Bylaws and other duties commonly incident to the office and shall also perform such other duties and have such other powers, as the Board of Directors shall designate from time to time. The Chief Executive Officer, or if no Chief Executive Officer is then serving, the President may direct any Assistant Secretary or other officer to assume and perform the duties of the Secretary in the absence or disability of the Secretary, and each Assistant Secretary shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors or the Chief Executive Officer, or if no Chief Executive Officer is then serving, the President shall designate from time to time.

(f)            Duties of Chief Financial Officer. The Chief Financial Officer shall keep or cause to be kept the books of account of the corporation in a thorough and proper manner and shall render statements of the financial affairs of the corporation in such form and as often as required by the Board of Directors or the Chief Executive Officer, or if no Chief Executive Officer is then serving, the President. The Chief Financial Officer, subject to the order of the Board of Directors, shall have the custody of all funds and securities of the corporation. The Chief Financial Officer shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors or the Chief Executive Officer, or if no Chief Executive Officer is then serving, the President shall designate from time to time. To the extent that a Chief Financial Officer has been appointed and no Treasurer has been appointed, all references in these Bylaws to the Treasurer shall be deemed references to the Chief Financial Officer. The President may direct the Treasurer, if any, or any Assistant Treasurer, or the controller or any assistant controller to assume and perform the duties of the Chief Financial Officer in the absence or disability of the Chief Financial Officer, and each Treasurer and Assistant Treasurer and each controller and assistant controller shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors or the Chief Executive Officer, or if no Chief Executive Officer is then serving, the President shall designate from time to time.

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(g)            Duties of Treasurer. Unless another officer has been appointed Chief Financial Officer of the corporation, the Treasurer shall be the chief financial officer of the corporation and shall keep or cause to be kept the books of account of the corporation in a thorough and proper manner and shall render statements of the financial affairs of the corporation in such form and as often as required by the Board of Directors or the Chief Executive Officer, or if no Chief Executive Officer is then serving, the President, and, subject to the order of the Board of Directors, shall have the custody of all funds and securities of the corporation. The Treasurer shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors or the Chief Executive Officer, or if no Chief Executive Officer is then serving, the President and Chief Financial Officer (if not Treasurer) shall designate from time to time.

Section 30.     Delegation of Authority. The Board of Directors may from time to time delegate the powers or duties of any officer to any other officer or agent, notwithstanding any provision hereof.

Section 31.     Resignations. Any officer may resign at any time by giving notice in writing or by electronic transmission to the Board of Directors or to the Chief Executive Officer, or if no Chief Executive Officer is then serving, the President or to the Secretary. Any such resignation shall be effective when received by the person or persons to whom such notice is given, unless a later time is specified therein, in which event the resignation shall become effective at such later time. Unless otherwise specified in such notice, the acceptance of any such resignation shall not be necessary to make it effective. Any resignation shall be without prejudice to the rights, if any, of the corporation under any contract with the resigning officer.

Section 32.     Removal. Any officer may be removed from office at any time, either with or without cause, by the affirmative vote of a majority of the directors in office at the time, or by the unanimous written consent of the directors in office at the time, or by any committee or by the Chief Executive Officer or by other superior officers upon whom such power of removal may have been conferred by the Board of Directors.

ARTICLE VI
EXECUTION OF CORPORATE INSTRUMENTS AND VOTING

OF SECURITIES OWNED BY THE CORPORATION

Section 33.     Execution of Corporate Instruments. The Board of Directors may, in its discretion, determine the method and designate the signatory officer or officers, or other person or persons, to execute on behalf of the corporation any corporate instrument or document, or to sign on behalf of the corporation the corporate name without limitation, or to enter into contracts on behalf of the corporation, except where otherwise provided by law or these Bylaws, and such execution or signature shall be binding upon the corporation. All checks and drafts drawn on banks or other depositaries on funds to the credit of the corporation or in special accounts of the corporation shall be signed by such person or persons as the Board of Directors shall authorize so to do. Unless authorized or ratified by the Board of Directors or within the agency power of an officer, no officer, agent or employee shall have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount.

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Section 34.     Voting of Securities Owned by the Corporation. All stock and other securities of other corporations owned or held by the corporation for itself, or for other parties in any capacity, shall be voted, and all proxies with respect thereto shall be executed, by the person authorized so to do by resolution of the Board of Directors, or, in the absence of such authorization, by the Chairperson of the Board of Directors, the Chief Executive Officer, the President, or any Vice President.

ARTICLE VII
SHARES OF STOCK

Section 35.     Form and Execution of Certificates. The shares of the corporation shall be represented by certificates, or shall be uncertificated if so provided by resolution or resolutions of the Board of Directors. Certificates for the shares of stock, if any, shall be in such form as is consistent with the Certificate of Incorporation and applicable law. Every holder of stock in the corporation represented by certificate shall be entitled to have a certificate signed by or in the name of the corporation by any two authorized officers of the corporation, certifying the number of shares owned by him in the corporation. Any or all of the signatures on the certificate may be facsimiles. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued with the same effect as if he or she were such officer, transfer agent, or registrar at the date of issue.

Section 36.     Lost Certificates. A new certificate or certificates shall be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen, or destroyed. The corporation may require, as a condition precedent to the issuance of a new certificate or certificates, the owner of such lost, stolen, or destroyed certificate or certificates, or the owner’s legal representative, to agree to indemnify the corporation in such manner as it shall require or to give the corporation a surety bond in such form and amount as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen, or destroyed.

Section 37.     Transfers.

(a)            Transfers of record of shares of stock of the corporation shall be made only upon its books by the holders thereof, in person or by attorney duly authorized, and, in the case of stock represented by certificate, upon the surrender of a properly endorsed certificate or certificates for a like number of shares.

(b)            The corporation shall have power to enter into and perform any agreement with any number of stockholders of any one or more classes of stock of the corporation to restrict the transfer of shares of stock of the corporation of any one or more classes owned by such stockholders in any manner not prohibited by the DGCL.

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Section 38.     Fixing Record Dates.

(a)            In order that the corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If the Board of Directors so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board of Directors determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for determination of stockholders entitled to vote at the adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote.

(b)            In order that the corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty (60) days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

Section 39.     Registered Stockholders. The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.

ARTICLE VIII
OTHER SECURITIES OF THE CORPORATION

Section 40.     Execution of Other Securities. All bonds, debentures and other corporate securities of the corporation, other than stock certificates (covered in Section 36), may be signed by the Chairperson of the Board of Directors, the Chief Executive Officer, the President or any Vice President, or such other person as may be authorized by the Board of Directors, and the corporate seal impressed thereon or a facsimile of such seal imprinted thereon and attested by the signature of the Secretary or an Assistant Secretary, or the Chief Financial Officer or Treasurer or an Assistant Treasurer; provided, however, that where any such bond, debenture or other corporate security shall be authenticated by the manual signature, or where permissible facsimile signature, of a trustee under an indenture pursuant to which such bond, debenture or other corporate security shall be issued, the signatures of the persons signing and attesting the corporate seal on such bond, debenture or other corporate security may be the imprinted facsimile of the signatures of such persons. Interest coupons appertaining to any such bond, debenture or other corporate security, authenticated by a trustee as aforesaid, shall be signed by the Treasurer or an Assistant Treasurer of the corporation or such other person as may be authorized by the Board of Directors, or bear imprinted thereon the facsimile signature of such person. In case any officer who shall have signed or attested any bond, debenture or other corporate security, or whose facsimile signature shall appear thereon or on any such interest coupon, shall have ceased to be such officer before the bond, debenture or other corporate security so signed or attested shall have been delivered, such bond, debenture or other corporate security nevertheless may be adopted by the corporation and issued and delivered as though the person who signed the same or whose facsimile signature shall have been used thereon had not ceased to be such officer of the corporation.

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ARTICLE IX
DIVIDENDS

Section 41.     Declaration of Dividends. Dividends upon the capital stock of the corporation, subject to the provisions of the Certificate of Incorporation and applicable law, if any, may be declared by the Board of Directors pursuant to law at any regular or special meeting. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the Certificate of Incorporation and applicable law.

Section 42.     Dividend Reserve. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the Board of Directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the Board of Directors shall think conducive to the interests of the corporation, and the Board of Directors may modify or abolish any such reserve in the manner in which it was created.

ARTICLE X
FISCAL YEAR

Section 43.     Fiscal Year. The fiscal year of the corporation shall be fixed by resolution of the Board of Directors.

ARTICLE XI
INDEMNIFICATION

Section 44.     Indemnification of Directors, Officers, Employees and Other Agents.

(a)            Directors and Officers. The corporation shall indemnify its directors and officers to the fullest extent not prohibited by the DGCL or any other applicable law; provided, however, that the corporation may modify the extent of the indemnification by individual contracts with its directors and officers; and, provided, further, that the corporation shall not be required to indemnify any director or officer in connection with any proceeding (or part thereof) initiated by such person unless (i) indemnification is expressly required to be made by law, (ii) the proceeding was authorized by the Board of Directors of the corporation, (iii) indemnification is provided by the corporation, in its sole discretion, pursuant to the powers vested in the corporation under the DGCL or any other applicable law or (iv) indemnification is required to be made under Section 44(d).

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(b)            Employees and other Agents. The corporation shall have power to indemnify its employees and other agents as set forth in the DGCL or any other applicable law. The Board of Directors shall have the power to delegate to any person the Board of Directors decides the determination of whether indemnification shall be given.

(c)            Expenses. The corporation shall advance to any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was a director or officer, of the corporation, or is or was serving at the request of the corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, prior to the final disposition of the proceeding, promptly following request therefor, all expenses incurred by any director or officer in connection with such proceeding provided, however, that if the DGCL requires, an advancement of expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the corporation of an undertaking (hereinafter an “undertaking”), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a “final adjudication”) that such indemnitee is not entitled to be indemnified for such expenses under this Section 44 or otherwise.

(d)            Enforcement. Without the necessity of entering into an express contract, all rights to indemnification and advances to directors and officers under this Section 44 shall be deemed to be contractual rights and be effective to the same extent and as if provided for in a contract between the corporation and the director or officer. Any right to indemnification or advances granted by this Section 44 to a director or officer shall be enforceable by or on behalf of the person holding such right in any court of competent jurisdiction if (i) the claim for indemnification or advances is denied, in whole or in part, or (ii) no disposition of such claim is made within ninety (90) days of request therefor. To the extent permitted by law, the claimant in such enforcement action, if successful in whole or in part, shall be entitled to be paid also the expense of prosecuting the claim. In connection with any claim for indemnification, the corporation shall be entitled to raise as a defense to any such action that the claimant has not met the standards of conduct that make it permissible under the DGCL or any other applicable law for the corporation to indemnify the claimant for the amount claimed. Neither the failure of the corporation (including its Board of Directors, independent legal counsel or its stockholders) to have made a determination that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the DGCL or any other applicable law, nor an actual determination by the corporation (including its Board of Directors, independent legal counsel or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that claimant has not met the applicable standard of conduct. In any suit brought by a director or officer to enforce a right to indemnification or to an advancement of expenses hereunder, the burden of proving that the director or officer is not entitled to be indemnified, or to such advancement of expenses, under this Section 44 or otherwise shall be on the corporation.

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(e)        Non-Exclusivity of Rights. The rights conferred on any person by this Section 44 shall not be exclusive of any other right which such person may have or hereafter acquire under any applicable statute, provision of the Certificate of Incorporation, Bylaws, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding office. The corporation is specifically authorized to enter into individual contracts with any or all of its directors, officers, employees or agents respecting indemnification and advances, to the fullest extent not prohibited by the DGCL or any other applicable law.

(f)         Survival of Rights. The rights conferred on any person by this Section 44 shall continue as to a person who has ceased to be a director, officer, employee or other agent and shall inure to the benefit of the heirs, executors and administrators of such a person.

(g)        Insurance. To the fullest extent permitted by the DGCL or any other applicable law, the corporation, upon approval by the Board of Directors, may purchase insurance on behalf of any person required or permitted to be indemnified pursuant to this Section 44.

(h)        Amendments. Any repeal or modification of this Section 44 shall only be prospective and shall not affect the rights under this Section 44 in effect at the time of the alleged occurrence of any action or omission to act that is the cause of any proceeding against any agent of the corporation.

(i)         Saving Clause. If this Section 44 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the corporation shall nevertheless indemnify each director and officer to the full extent not prohibited by any applicable portion of this Section 44 that shall not have been invalidated, or by any other applicable law. If this Section 44 is invalid due to the application of the indemnification provisions of another jurisdiction, then the corporation shall indemnify each director and executive officer to the full extent under any other applicable law.

(j)         Certain Definitions. For the purposes of this Section 44, the following definitions shall apply:

(1)            The term “proceeding” shall be broadly construed and shall include, without limitation, the investigation, preparation, prosecution, defense, settlement, arbitration and appeal of, and the giving of testimony in, any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative.

(2)            The term “expenses” shall be broadly construed and shall include, without limitation, court costs, attorneys’ fees, witness fees, fines, amounts paid in settlement or judgment and any other costs and expenses of any nature or kind incurred in connection with any proceeding.

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(3)            The term the “corporation” shall include, in addition to the resulting entity, any constituent entity (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent entity, or is or was serving at the request of such constituent entity as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Section 44 with respect to the resulting or surviving corporation as he or she would have with respect to such constituent entity if its separate existence had continued.

(4)            References to a “director,” “executive officer,” “officer,” “employee,” or “agent” of the corporation shall include, without limitation, situations where such person is serving at the request of the corporation as, respectively, a director, executive officer, officer, employee, trustee or agent of another corporation, partnership, joint venture, trust or other enterprise.

(5)            References to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to “serving at the request of the corporation” shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee, or agent with respect to an employee benefit plan, its participants, or beneficiaries; and a person who acted in good faith and in a manner he or she reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the corporation” as referred to in this section.

ARTICLE XII
NOTICES

Section 45.     Notices.

(a)            Notice to Stockholders. Without limiting the manner by which notice may otherwise be given effectively to stockholders under any agreement or contract with such stockholder, and except as otherwise required by law, notice to stockholders f may be sent by United States mail or nationally recognized overnight courier, or by facsimile or by electronic mail or other electronic means.

(b)            Notice to Directors. Any notice required to be given to any director may be given by the method stated in Section 45(a) or as otherwise provided in these Bylaws. If such notice is not delivered personally, it shall be sent to such address as such director shall have filed in writing with the Secretary, or, in the absence of such filing, to the last known post office address of such director.

(c)            Affidavit of Mailing. An affidavit of mailing, executed by a duly authorized and competent employee of the corporation or its transfer agent appointed with respect to the class of stock affected or other agent, specifying the name and address or the names and addresses of the stockholder or stockholders, or director or directors, to whom any such notice or notices was or were given, and the time and method of giving the same, shall in the absence of fraud, be prima facie evidence of the facts therein contained.

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(d)            Methods of Notice. It shall not be necessary that the same method of giving notice be employed in respect of all recipients of notice, but one permissible method may be employed in respect of any one or more, and any other permissible method or methods may be employed in respect of any other or others.

(e)            Notice to Person with Whom Communication is Unlawful. Whenever notice is required to be given, under any provision of law or of the Certificate of Incorporation or Bylaws of the corporation, to any person with whom communication is unlawful, the giving of such notice to such person shall not be required and there shall be no duty to apply to any governmental authority or agency for a license or permit to give such notice to such person. Any action or meeting which shall be taken or held without notice to any such person with whom communication is unlawful shall have the same force and effect as if such notice had been duly given. In the event that the action taken by the corporation is such as to require the filing of a certificate under any provision of the DGCL, the certificate shall state, if such is the fact and if notice is required, that notice was given to all persons entitled to receive notice except such persons with whom communication is unlawful.

(f)            Notice to Stockholders Sharing an Address. Except as otherwise prohibited under DGCL, any notice given under the provisions of DGCL, the Certificate of Incorporation or the Bylaws shall be effective if given by a single written notice to stockholders who share an address if consented to by the stockholders at that address to whom such notice is given. Such consent shall have been deemed to have been given if such stockholder fails to object in writing to the corporation within sixty (60) days of having been given notice by the corporation of its intention to send the single notice. Any consent shall be revocable by the stockholder by written notice to the corporation.

ARTICLE XIII
AMENDMENTS

Section 46.     Amendments.

(a)            Subject to the limitations set forth in Section 44(h) or the provisions of the Certificate of Incorporation, the Board of Directors is expressly empowered to adopt, amend or repeal the Bylaws of the corporation.

(b)            The stockholders also shall have power to adopt, amend or repeal the Bylaws of the corporation; provided, however, that, in addition to any vote of the holders of any class or series of stock of the corporation required by law or by the Certificate of Incorporation, (i) during the Covered FPS Ownership Period, such action by stockholders shall require the affirmative vote of the holders of more than 50% of the voting power of all of the then-outstanding shares of the capital stock of the corporation entitled to vote generally in the election of directors, voting together as a single class, and (ii) after the Covered FPS Ownership Period, such action by stockholders shall require the affirmative vote of the holders of at least 66 2/3% of the voting power of all of the then-outstanding shares of the capital stock of the corporation entitled to vote generally in the election of directors, voting together as a single class.

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EX-10.1

Exhibit 10.1

FLEXENERGY GREEN SOLUTIONS, INC. 2021 INCENTIVE AWARD PLAN

1.            Establishment of the Plan; Effective Date; Duration.

(a)            Establishment of the Plan; Effective Date. FlexEnergy Green Solutions, Inc., a Delaware corporation (the “Company”), hereby establishes this incentive compensation plan to be known as the “FlexEnergy Green Solutions, Inc. 2021 Incentive Award Plan,” as amended from time to time (the “Plan”). The Plan permits the grant of Incentive Stock Options, Nonqualified Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Other Stock-Based Awards, Other Cash-Based Awards and Dividend Equivalents. The Plan shall become effective upon the date on which the Plan is approved by the affirmative vote of the holders of a majority of the Common Shares which are present or represented and entitled to vote and voted at a meeting (the “Effective Date”). If the Plan is not so approved by the stockholders of the Company, then the Plan will be null and void in its entirety. The Plan shall remain in effect as provided in Section 1(b). Capitalized but undefined terms shall have the meaning set forth in Section 3.

(b)            Duration of the Plan. The Plan shall commence on the Effective Date and shall remain in effect, subject to the right of the Board to amend or terminate the Plan at any time pursuant to Section 13. However, in no event may an Award be granted under the Plan on or after ten years from the Effective Date.

2.            Purpose. The purpose of the Plan is to provide a means through which the Company and its Affiliates may attract and retain key personnel and to provide a means whereby certain directors, officers, employees, consultants and advisors (and certain prospective directors, officers, employees, consultants and advisors) of the Company and its Affiliates can acquire and maintain an equity interest in the Company, or be paid incentive compensation, which may be measured by reference to the value of Common Shares, thereby strengthening their commitment to the welfare of the Company and its Affiliates and aligning their interests with those of the Company’s shareholders.

3.            Definitions. Certain terms used herein have the definitions given to them in the first instance in which they are used. In addition, for purposes of the Plan, the following terms are defined as set forth below:

(a)            “Affiliate” means (i) any person or entity that directly or indirectly controls, is controlled by or is under common control with the Company and/or (ii) to the extent provided by the Committee, any person or entity in which the Company has a significant interest. The term “control” (including, with correlative meaning, the terms “controlled by” and “under common control with”), as applied to any person or entity, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that person or entity, whether through the ownership of voting or other securities, by contract or otherwise.

(b)            “Applicable Laws” means the requirements relating to the administration of equity incentive plans under U.S. federal and state securities, tax and other applicable laws, rules and regulations, the applicable rules of any stock exchange or quotation system on which the Common Shares are listed or quoted, and the applicable laws and rules of any foreign country or other jurisdiction where Awards are granted, as are in effect from time to time.

(c)            “Award” means, individually or collectively, any Incentive Stock Option, Nonqualified Stock Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Other Stock-Based Awards, Other Cash-Based Awards, and/or Dividend Equivalents granted under the Plan.

(d)            “Award Agreement” means a written agreement evidencing an Award, which may be electronic, that contains terms and conditions determined by the Committee, consistent with and subject to the terms and conditions of the Plan. An Award Agreement may be a unilateral agreement, if determined by the Committee.

(e)            “Board” means the Board of Directors of the Company.

(f)            “Cause” means, in the case of a particular Award, unless the applicable Award Agreement states otherwise, (A) the Company or an Affiliate having “cause” to terminate a Participant’s employment or service, as defined in any employment or consulting or similar agreement between the Participant and the Company or an Affiliate in effect at the time of termination, or (B) in the absence of an employment or consulting or similar agreement (or the absence of any definition of  “Cause” contained therein), a Participant’s (i) conviction of, or the entry of a plea of guilty or no contest to, a felony or any other crime that causes the Company or its Affiliates public disgrace or disrepute, or materially and adversely affects the Company’s or its Affiliates’ operations or financial performance or the relationship the Company has with its customers; (ii) gross negligence or willful misconduct with respect to the Company or any of its Affiliates, including, without limitation fraud, embezzlement, theft or proven dishonesty in the course of his or her employment or other service; (iii) alcohol abuse or use of controlled drugs other than in accordance with a physician’s prescription; (iv) refusal to perform any lawful, material obligation or fulfill any duty (other than any duty or obligation of the type described in clause (vi) below) to the Company or its Affiliates (other than due to a disability, as determined by the Committee), which refusal, if curable, is not cured within 15 days after delivery of written notice thereof; (v) material breach of any agreement with or duty owed to the Company or any of its Affiliates, which breach, if curable, is not cured within 15 days after the delivery of written notice thereof; (vi) any breach of any obligation or duty to the Company or any of its Affiliates (whether arising by statute, common law or agreement) relating to confidentiality, noncompetition, nonsolicitation and/or proprietary rights; (vii) material violation of the Company’s written policies or codes of conduct, including those related to discrimination, harassment, performance of illegal or unethical practices, and ethical misconduct; or (viii) in the case of a director, repeated failure to participate in Board meetings (including meetings of any Board committee of which the director is a member) on a regular basis despite having received proper notice of meetings in advance.

(g)            “Change in Control” shall, in the case of a particular Award, unless the applicable Award Agreement states otherwise or contains a different definition of  “Change in Control,” be deemed to occur upon any of the following events that is not a Company Sale:

(i)            any “person” as that term is used in Sections 13(d) and 14(d) of the Exchange Act (other than (A) the Company or any of its Affiliates, (B) any trustee or other fiduciary holding securities under any employee benefit plan of the Company or any of its Affiliates, (C) an underwriter temporarily holding securities pursuant to an offering of those securities, (D) an entity owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of Common Shares, (E) FlexEnergy Power Solutions, LLC, or (F) any direct or indirect “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act) of more than 10% or more of the total voting power of the equity securities of FlexEnergy Power Solutions, LLC as of January 1, 2021) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, by way of merger, consolidation, recapitalization, reorganization or otherwise, of 50% or more of the total voting power of the then outstanding voting securities of the Company;

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(ii)            the consummation of a merger or consolidation of the Company with any other company, other than a merger or consolidation that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 50% of the total voting power represented by the voting securities of the Company or the surviving entity outstanding immediately after the merger or consolidation;

(iii)            any other event specified as a “Change in Control” in an applicable Award Agreement.

Notwithstanding the foregoing, if a Change in Control constitutes a payment event with respect to any Award (or any portion of an Award) that provides for the deferral of compensation that is subject to Code Section 409A, to the extent required to avoid the imposition of additional taxes under Code Section 409A, the transaction or event described in subsection (i), (ii), (iii), (iv) or (v) with respect to the Award (or portion thereof) shall only constitute a Change in Control for purposes of the payment timing of the Award if the transaction also constitutes a “change in control event,” as defined in Treasury Regulation Section 1.409A-3(i)(5). Additionally, the issuance of securities by the Company in a financing transaction approved by the Committee shall not be deemed or deemed to cause or result in a “Change in Control”.

(h)            “Code” means the Internal Revenue Code of 1986, as amended, and any successor thereto. Reference in the Plan to any section of the Code shall be deemed to include any regulations or other interpretative guidance under that section, and any amendments or successor provisions to that section, regulations or guidance.

(i)            “Committee” means a committee of at least two people as the Board may appoint to administer the Plan or, if no such committee has been appointed by the Board, the Board.

(j)            “Common Shares” means shares of the Company’s common stock, par value $0.0001 per share (and any stock or other securities into which ordinary shares may be converted or into which they may be exchanged).

(k)            “Company” means FlexEnergy Green Solutions, Inc., a Delaware corporation.

(l)            “Company Sale” shall, in the case of a particular Award, unless the applicable Award Agreement states otherwise or contains a different definition of  “Company Sale,” be deemed to occur upon any of the following events:

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(i)            any “person” as that term is used in Sections 13(d) and 14(d) of the Exchange Act (other than (A) the Company or any of its Affiliates, (B) any trustee or other fiduciary holding securities under any employee benefit plan of the Company or any of its Affiliates, (C) an underwriter temporarily holding securities pursuant to an offering of those securities, (D) an entity owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of Common Shares, or (E) FlexEnergy Power Solutions, LLC prior to an initial public offering of the Company’s common stock) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, by way of merger, consolidation, recapitalization, reorganization or otherwise, of 100% of the total voting power of the then outstanding voting securities of the Company;

(ii)            the consummation of a merger or consolidation of the Company with any other company, other than a merger or consolidation that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 10% of the total voting power represented by the voting securities of the Company or the surviving entity outstanding immediately after the merger or consolidation;

(iii)            the consummation of a plan of complete liquidation of the Company or the sale or disposition by the Company of all or substantially all the Company’s assets; or

(iv)            any other event specified as a “Company Sale” in an applicable Award Agreement.

(m)            “Date of Grant” means the date on which the granting of an Award is authorized, or other date specified in the authorization.

(n)            “Dividend Equivalent” means a right to receive the equivalent value (in cash or Common Shares) of ordinary dividends that would otherwise be paid on the Common Shares subject to an Award that is a full-value award but that have not been issued or delivered, awarded under Section 11.

(o)            “Effective Date” has the meaning set forth in Section 1(a).

(p)            “Eligible Director” means a person who is a “non-employee director” within the meaning of Rule 16b-3 under the Exchange Act.

(q)            “Eligible Person” with respect to an Award denominated in Common Shares, means any (i) individual employed by the Company or an Affiliate; (ii) director of the Company or an Affiliate; (iii) consultant or advisor to the Company or an Affiliate; provided that if the Securities Act applies those persons must be eligible to be offered securities registrable on Form S-8 under the Securities Act; or (iv) prospective employees, directors, officers, consultants or advisors who have accepted offers of employment or consultancy from the Company or its Affiliates (and would satisfy the provisions of clauses (i) through (iii) above once he or she begins employment with or begins providing services to the Company or its Affiliates).

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(r)            “Exchange Act” means the U.S. Securities Exchange Act of 1934, as it may be amended from time to time, including the rules and regulations promulgated thereunder and successor provisions and rules and regulations thereto.

(s)            “Exercise Price” has the meaning set forth in Section 7(b).

(t)            “Fair Market Value” means, as of any date, the value of Common Shares determined as follows:

(i)            If the Common Shares are listed on any established stock exchange or a national market system, the Fair Market Value will be the closing sales price for the Common Shares (or the closing bid, if no sales were reported) as quoted on that exchange or system on the day of determination, as reported in The Wall Street Journal or other source the Committee deems reliable;

(ii)            If the Common Shares are regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value will be the mean between the high bid and low asked prices for the Common Shares on the day of determination, as reported in The Wall Street Journal or other source the Committee deems reliable; or

(iii)            In the absence of an established market for the Common Shares, the Fair Market Value will be determined in good faith by the Committee.

(iv)            Notwithstanding the foregoing, the determination of Fair Market Value in all cases shall be in accordance with the requirements set forth under Code Section 409A to the extent necessary for an Award to comply with, or be exempt from, Code Section 409A.

(u)            “Good Reason” means, unless the applicable Award Agreement states otherwise: (a) if a Participant is a party to an employment or service agreement with the Company or its Affiliates and the agreement provides for a definition of Good Reason, the definition contained therein; or (b) if no agreement exists or if the agreement does not define Good Reason, the occurrence of one or more of the following without the Participant’s express written consent, which circumstances are not remedied by the Company within 30 days of its receipt of a written notice from the Participant describing the applicable circumstances (which notice must be provided by the Participant within 90 days of the Participant’s knowledge of the applicable circumstances): (i) any material, adverse change in the Participant’s duties, responsibilities, authority, title, status or reporting structure; (ii) a material reduction in the Participant’s base salary or bonus opportunity; or (iii) a geographical relocation of the Participant’s principal office location by more than 50 miles.

(v)            “Immediate Family Members” has the meaning set forth in Section 14(b)(ii).

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(w)            “Incentive Stock Option” means an Option that is designated by the Committee as an incentive stock option as described in Code Section 422 and otherwise meets the requirements set forth in the Plan.

(x)            “Indemnifiable Person” has the meaning set forth in Section 4(e).

(y)            “Mature Shares” means Common Shares owned by a Participant that are not subject to any pledge or security interest and that have been either previously acquired by the Participant on the open market or meet any other requirements, if any, the Committee determines are necessary in order to avoid an accounting earnings charge on account of the use of those shares to pay the Exercise Price or satisfy a tax or deduction obligation of the Participant.

(z)            “Nonqualified Stock Option” means an Option that is not designated by the Committee as an Incentive Stock Option.

(aa)          “Option” means an Award granted under Section 7.

(bb)          “Option Period” has the meaning set forth in Section 7(c).

(cc)           “Other Cash-Based Award” means a cash Award granted to a Participant under Section 10, including cash awarded as a bonus or upon the attainment of any performance goals or otherwise as permitted under the Plan.

(dd)          “Other Stock-Based Award” means an equity-based or equity-related Award, other than an Option, SAR, Restricted Stock, Restricted Stock Unit or Dividend Equivalent, granted in accordance with the terms and conditions set forth under Section 10 (including upon the attainment of any performance goals or otherwise as permitted under the Plan).

(ee)          “Participant” means an Eligible Person who has been selected by the Committee to participate in the Plan and to receive an Award pursuant to Section 6.

(ff)           “Permitted Transferee” has the meaning set forth in Section 14(b)(ii).

(gg)          “Person” means any individual, entity or group within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act.

(hh)          “Plan” means this FlexEnergy Green Solutions, Inc. 2021 Incentive Award Plan, as amended from time to time.

(ii)            “Restricted Period” means the period of time determined by the Committee during which an Award is subject to restrictions or, as applicable, the period of time within which performance is measured for purposes of determining whether an Award has been earned.

(jj)            “Restricted Stock Unit” means an unfunded and unsecured promise to deliver Common Shares, cash, other securities or other property, subject to certain performance or time-based restrictions (including, without limitation, a requirement that the Participant remain continuously employed, provide continuous services for a specified period of time, or attain specified performance objectives), granted under Section 9.

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(kk)          “Restricted Stock” means Common Shares, subject to certain specified performance or time-based restrictions (including, without limitation, a requirement that the Participant remain continuously employed, provide continuous services for a specified period of time, or attain specified performance objectives), granted under Section 9.

(ll)            “SAR Period” has the meaning set forth in Section 8(b).

(mm)         “Securities Act” means the Securities Act of 1933, as amended, and any successor thereto. Reference in the Plan to any section of the Securities Act shall be deemed to include any rules, regulations or other interpretative guidance under that section, and any amendments or successor provisions to those section, rules, regulations or guidance.

(nn)          “Stock Appreciation Right” or “SAR” means an Award granted under Section 8.

(oo)            “Strike Price” means, except as otherwise provided by the Committee in the case of Substitute Awards, (i) in the case of a SAR granted in tandem with an Option, the Exercise Price of the related Option, or (ii) in the case of a SAR granted independent of an Option, the Fair Market Value on the Date of Grant.

(pp)      “Subsidiary” means, with respect to any specified Person:

(i)            any corporation, association or other business entity (other than a partnership) of which more than 50% of the total voting power of shares or other equity interests (without regard to the occurrence of any contingency and after giving effect to any voting agreement, stockholders’ agreement, operating agreement, or other agreement that effectively transfers voting power) is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and

(ii)            any partnership (or any comparable foreign entity) (A) the sole general partner (or functional equivalent thereof) or the managing general partner of which is that Person or Subsidiary of that Person or (B) the only general partners (or functional equivalents thereof) of which are that Person or one or more Subsidiaries of that Person (or any combination thereof).

(qq)           “Substitute Award” has the meaning set forth in Section 5(e).

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4.            Administration.

(a)            The Committee shall administer the Plan. To the extent required to comply with the provisions of Rule 16b-3 promulgated under the Exchange Act (if the Board is not acting as the Committee under the Plan), it is intended that each member of the Committee shall, at the time he or she takes any action with respect to an Award under the Plan, be an Eligible Director. However, the fact that a Committee member fails to qualify as an Eligible Director shall not invalidate any Award granted by the Committee that is otherwise validly granted under the Plan.

(b)            Subject to the provisions of the Plan and Applicable Laws, the Committee shall have the sole and plenary authority, in addition to other express powers and authorizations conferred on the Committee by the Plan, to: (i) designate Participants; (ii) determine the type or types of Awards to be granted to a Participant; (iii) determine the number of Common Shares to be covered by, or with respect to which payments, rights, or other matters are to be calculated in connection with, Awards; (iv) determine the terms and conditions of any Award (including any performance goals, criteria, and/or periods applicable to Awards); (v) determine whether, to what extent, and under what circumstances Awards may be settled or exercised in cash, Common Shares, other securities, other Awards or other property, or canceled, forfeited, or suspended and the method or methods by which Awards may be settled, exercised, canceled, forfeited, or suspended; (vi) determine whether, to what extent, and under what circumstances the delivery of cash, Common Shares, other securities, other Awards or other property and other amounts payable with respect to an Award shall be deferred either automatically or at the election of the Participant or of the Committee; (vii) interpret, administer, reconcile any inconsistency in, correct any defect in and/or supply any omission in the Plan and any instrument or agreement relating to, or Award granted under, the Plan, including any changes required to comply with Applicable Laws (including any amendments to the terms and conditions of outstanding Awards in response to changes in Applicable Laws); (viii) establish, amend, suspend, or waive any rules and regulations and appoint any agents the Committee deems appropriate for the proper administration of the Plan; (ix) accelerate the vesting or exercisability of, payment for or lapse of restrictions on, Awards; and (x) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan.

(c)            The Committee may delegate to one or more officers of the Company or any Affiliate the authority to act on behalf of the Committee with respect to any matter, right, obligation, or election that is the responsibility of or that is allocated to the Committee herein, and that may be so delegated as a matter of law, except for grants of Awards to persons subject to Section 16 of the Exchange Act.

(d)            Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations, and other decisions under or with respect to the Plan or any Award or any documents evidencing Awards granted pursuant to the Plan shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive and binding upon all persons or entities, including, without limitation, the Company, any Affiliate, any Participant, any holder or beneficiary of any Award, and any shareholder of the Company.

(e)            No member of the Board, the Committee, delegate of the Committee or any employee or agent of the Company (each such person, an “Indemnifiable Person”) shall be liable for any action taken or omitted to be taken or any determination made in good faith with respect to the Plan or any Award hereunder. Each Indemnifiable Person shall be indemnified and held harmless by the Company against and from any loss, cost, liability, or expense (including attorneys’ fees) that may be imposed upon or incurred by the Indemnifiable Person in connection with or resulting from any action, suit or proceeding to which the Indemnifiable Person may be a party or in which the Indemnifiable Person may be involved by reason of any action taken or omitted to be taken under the Plan or any Award Agreement and against and from any and all amounts paid by the Indemnifiable Person with the Company’s approval, in settlement thereof, or paid by the Indemnifiable Person in satisfaction of any judgment in any such action, suit or proceeding against the Indemnifiable Person, provided that the Company shall have the right, at its own expense, to assume and defend any such action, suit or proceeding and once the Company gives notice of its intent to assume the defense, the Company shall have sole control over the defense with counsel of the Company’s choice. The foregoing right of indemnification shall not be available to an Indemnifiable Person to the extent that a final judgment or other final adjudication (in either case not subject to further appeal) binding upon the Indemnifiable Person determines that the acts or omissions of the Indemnifiable Person giving rise to the indemnification claim resulted from the Indemnifiable Person’s bad faith, fraud or willful criminal act or omission or that the right of indemnification is otherwise prohibited by law or by the Company’s Certificate of Incorporation or Bylaws. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which the Indemnifiable Persons may be entitled under the Company’s Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any other power that the Company may have to indemnify the Indemnifiable Persons or hold them harmless.

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(f)            Notwithstanding anything to the contrary contained in the Plan, the Board may, in its sole discretion, at any time and from time to time, grant Awards and administer the Plan with respect to those Awards. In any such case, the Board shall have all the authority granted to the Committee under the Plan.

5.            Grant of Awards; Shares Subject to the Plan; Limitations.

(a)            The Committee may, from time to time, grant Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Other Stock-Based Awards, Other Cash-Based Awards, and/or Dividend Equivalents to one or more Eligible Persons.

(b)            Subject to Section 12, Awards granted under the Plan shall be subject to the following limitations: (i) the Committee is authorized to deliver under the Plan an aggregate of [l] Common Shares; and (ii) the maximum number of Common Shares that may be granted under the Plan during any single fiscal year to any Participant who is a non-employee director, when taken together with any cash fees paid to the non-employee director during that year in respect of his or her service as a non-employee director (including service as a member or chair of any committee of the Board), shall not exceed $350,000 in total value (calculating the value of any such Awards based on the grant date fair value of the Awards for financial reporting purposes); provided that the non-employee directors who are considered independent (under the rules of The Nasdaq Stock Market or other securities exchange on which the Common Shares are traded) may make exceptions to this limit for a non-executive chair, if any, of the Board, of the Audit Committee, of the Compensation Committee or of the Nominating and Governance Committee, in which case (A) the non-employee Director receiving the additional compensation may not participate in the decision to award the compensation, and (B) the maximum number of Common Shares that may be granted under the Plan during any single fiscal year, when taken together with any cash fees paid during that year in respect of his or her service as a non-employee director (including service as a member or chair of any committee of the Board), shall not exceed $500,000 in total value (calculating the value of any such Awards based on the grant date fair value of the Awards for financial reporting purposes). Notwithstanding the automatic annual increase set forth in (i) above, the Board may act prior to January 1st of a given year to provide that there will be no increase in the share reserve for that year or that the increase in the share reserve for that year will be a lesser number of Common Shares than would otherwise occur pursuant to the stipulated percentage.

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(c)            If (i) any Option or other Award granted hereunder is exercised through the tendering of Common Shares (either actually or by attestation) or by the withholding of Common Shares by the Company, or (ii) tax or deduction liabilities arising from the Option or other Award are satisfied by the tendering of Common Shares (either actually or by attestation) or by the withholding of Common Shares by the Company, then in each case the Common Shares so tendered or withheld shall be added to the Common Shares available for grant under the Plan on a one-for-one basis. Shares underlying Awards under this Plan that are forfeited, cancelled, expire unexercised, or are settled in cash are available again for Awards under the Plan.

(d)            Common Shares delivered by the Company in settlement of Awards may be authorized and unissued shares, shares held in the treasury of the Company, shares purchased on the open market or by private purchase, or a combination of the foregoing.

(e)            Awards may, in the sole discretion of the Committee, be granted under the Plan in assumption of, or in substitution for, outstanding awards previously granted by an entity acquired by the Company or with which the Company combines (“Substitute Awards”). The number of Common Shares underlying any Substitute Awards shall not be counted against the aggregate number of Common Shares available for Awards under the Plan.

6.            Eligibility. Participation shall be limited to Eligible Persons who have entered into an Award Agreement or who have received written notification from the Committee, or from a person designated by the Committee, that they have been selected to participate in the Plan.

7.            Options.

(a)            Generally. Each Option granted under the Plan shall be evidenced by an Award Agreement (whether in paper or electronic medium (including email or the posting on a web site maintained by the Company or a third party under contract with the Company)). Each Option so granted shall be subject to the conditions set forth in this Section 7, and to any other conditions not inconsistent with the Plan reflected in the applicable Award Agreement. All Options granted under the Plan shall be Nonqualified Stock Options unless the applicable Award Agreement expressly states that the Option is intended to be an Incentive Stock Option. The maximum aggregate number of Common Shares that may be issued through the exercise of Incentive Stock Options granted under the Plan is [l] Common Shares. Incentive Stock Options shall be granted only to Eligible Persons who are employees of the Company and its Affiliates, and no Incentive Stock Option shall be granted to any Eligible Person who is ineligible to receive an Incentive Stock Option under the Code. No Option shall be treated as an Incentive Stock Option unless the Plan has been approved by the stockholders of the Company in a manner intended to comply with the stockholder approval requirements of Code Section 422(b)(1); provided that any Option intended to be an Incentive Stock Option shall not fail to be effective solely on account of a failure to obtain approval, but rather the Option shall be treated as a Nonqualified Stock Option unless and until approval is obtained. In the case of an Incentive Stock Option, the terms and conditions of the grant shall be subject to and comply with any rules prescribed by Code Section 422. If for any reason an Option intended to be an Incentive Stock Option (or any portion thereof) does not qualify as an Incentive Stock Option, then, to the extent of the nonqualification, the Option or portion thereof shall be regarded as a Nonqualified Stock Option appropriately granted under the Plan.

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(b)            Exercise Price. Except with respect to Substitute Awards, the exercise price (“Exercise Price”) per Common Share for each Option shall not be less than 100% of the Fair Market Value of that share determined as of the Date of Grant; provided, however, that in the case of an Incentive Stock Option granted to an employee who, at the time of the grant of the Option, owns shares representing more than 10% of the total combined voting power of all classes of shares of the Company or any related corporation (as determined in accordance with Treasury Regulation Section 1.422-2(f)), the Exercise Price per share shall not be less than 110% of the Fair Market Value per share on the Date of Grant and provided further, that, notwithstanding any provision herein to the contrary, the Exercise Price shall not be less than the par value per Common Share.

(c)            Vesting and Expiration. Options shall vest and become exercisable in the manner (including any terms and conditions) and on the date or dates determined by the Committee (including, if applicable, the attainment of any performance goals, as determined by the Committee in the applicable Award Agreement) and shall expire after that period, not to exceed ten years, as may be determined by the Committee (the “Option Period”); provided, however, that the Option Period shall not exceed five years from the Date of Grant in the case of an Incentive Stock Option granted to a Participant who on the Date of Grant owns shares representing more than 10% of the total combined voting power of all classes of shares of the Company or any related corporation (as determined in accordance with Treasury Regulation Section 1.422- 2(f)); provided, further, that notwithstanding any vesting dates set by the Committee, the Committee may, in its sole discretion, accelerate the exercisability of any Option, which acceleration shall not affect the terms and conditions of the Option other than with respect to exercisability. In the event of any termination of employment or service with the Company and its Affiliates thereof of a Participant who has been granted one or more Options, the Options shall be exercisable at the time or times and subject to the terms and conditions set forth in the Award Agreement. If the Option would expire at a time when the exercise of the Option would violate applicable securities laws, the expiration date applicable to the Option will be automatically extended to a date that is 30 calendar days following the date the exercise would no longer violate applicable securities laws (so long as the extension does not violate Code Section 409A); provided, that in no event shall the expiration date be extended beyond the expiration of the Option Period.

(d)            Method of Exercise and Form of Payment. No Common Shares shall be delivered pursuant to any exercise of an Option until payment in full of the Exercise Price therefor is received by the Company and the Participant has paid to the Company an amount equal to any taxes required to be withheld or paid. Options that have become exercisable may be exercised by delivery of written or electronic notice of exercise to the Company in accordance with the terms of the applicable Award Agreement and accompanied by payment of the Exercise Price. The Exercise Price shall be payable (i) in cash, check, cash equivalent and/or Common Shares valued at the Fair Market Value at the time the Option is exercised (including, pursuant to procedures approved by the Committee, by means of attestation of ownership of a sufficient number of Common Shares in lieu of actual delivery of the shares to the Company); provided that the Common Shares are not subject to any pledge or other security interest and are Mature Shares and; (ii) by any other method the Committee permits in accordance with Applicable Laws, in its sole discretion, including without limitation: (A) in other property having a Fair Market Value on the date of exercise equal to the Exercise Price or (B) if there is a public market for the Common Shares at that time, by means of a broker-assisted “cashless exercise” pursuant to which the Company is delivered a copy of irrevocable instructions to a stockbroker to sell the Common Shares otherwise deliverable upon the exercise of the Option and to deliver promptly to the Company an amount equal to the Exercise Price or (C) by a “net exercise” method whereby the Company withholds from the delivery of the Common Shares for which the Option was exercised that number of Common Shares having a Fair Market Value equal to the aggregate Exercise Price for the Common Shares for which the Option was exercised. No fractional Common Shares shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine whether cash, other securities or other property shall be paid or transferred in lieu of any fractional Common Shares, or whether the fractional Common Shares or any rights thereto shall be canceled, terminated or otherwise eliminated.

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(e)            Notification upon Disqualifying Disposition of an Incentive Stock Option. Each Participant awarded an Incentive Stock Option under the Plan shall notify the Company in writing immediately after the date he or she makes a disqualifying disposition of any Common Shares acquired pursuant to the exercise of the Incentive Stock Option. A disqualifying disposition is any disposition (including, without limitation, any sale) of the Common Shares before the later of  (A) two years after the Date of Grant of the Incentive Stock Option or (B) one year after the date of exercise of the Incentive Stock Option. The Company may, if determined by the Committee and in accordance with procedures established by the Committee, retain possession of any Common Shares acquired pursuant to the exercise of an Incentive Stock Option as agent for the applicable Participant until the end of the period described in the preceding sentence.

(f)            Compliance With Laws, etc. Notwithstanding the foregoing, in no event shall a Participant be permitted to exercise an Option in a manner that the Committee determines would violate the Sarbanes-Oxley Act of 2002, if applicable, or any other Applicable Laws or the applicable rules and regulations of the Securities and Exchange Commission or the applicable rules and regulations of any securities exchange or inter-dealer quotation system on which the securities of the Company are listed or traded.

8.            Stock Appreciation Rights.

(a)            Generally. Each SAR granted under the Plan shall be evidenced by an Award Agreement (whether in paper or electronic medium (including email or the posting on a web site maintained by the Company or a third party under contract with the Company)). Each SAR so granted shall be subject to the conditions set forth in this Section 8, and to any other conditions not inconsistent with the Plan reflected in the applicable Award Agreement. Any Option granted under the Plan may include tandem SARs. The Committee also may award SARs to Eligible Persons independent of any Option.

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(b)            Strike Price. The Strike Price per Common Share for each SAR shall not be less than 100% of the Fair Market Value of the share determined as of the Date of Grant.

(c)            Vesting and Expiration. A SAR granted in connection with an Option shall become exercisable and shall expire according to the same vesting schedule and expiration provisions as the corresponding Option (including the terms and conditions set forth in the applicable Award Agreement). A SAR granted independent of an Option shall vest and become exercisable and shall expire in the manner (including any terms and conditions) and on the date or dates determined by the Committee (including, if applicable, the attainment of any performance goals, as shall be determined by the Committee in the applicable Award Agreement) and shall expire after that period, not to exceed ten years, as may be determined by the Committee (the “SAR Period”); provided, however, that notwithstanding any vesting dates set by the Committee, the Committee may, in its sole discretion, accelerate the exercisability of any SAR, which acceleration shall not affect the terms and conditions of the SAR other than with respect to exercisability. In the event of any termination of employment or service with the Company and its Affiliates thereof of a Participant who has been granted one or more SAR, the SARs shall be exercisable at the time or times and subject to the terms and conditions as set forth in the Award Agreement (or in the underlying Option Award Agreement, as may be applicable). If the SAR would expire at a time when the exercise of the SAR would violate applicable securities laws, the expiration date applicable to the SAR will be automatically extended to a date that is 30 calendar days following the date the exercise would no longer violate applicable securities laws (so long as the extension shall not violate Code Section 409A); provided, that in no event shall the expiration date be extended beyond the expiration of the SAR Period.

(d)            Method of Exercise. SARs that have become exercisable may be exercised by delivery of written or electronic notice of exercise to the Company in accordance with the terms of the applicable Award Agreement, specifying the number of SARs to be exercised and the date on which the SARs were awarded. Notwithstanding the foregoing, if on the last day of the Option Period (or in the case of a SAR independent of an option, the SAR Period), the Fair Market Value exceeds the Strike Price, the Participant has not exercised the SAR or the corresponding Option (if applicable), and neither the SAR nor the corresponding Option (if applicable) has expired, the SAR shall be deemed to have been exercised by the Participant on the last day of the Option Period and the Company shall make the appropriate payment therefor.

(e)            Payment. Upon the exercise of a SAR, the Company shall pay to the Participant an amount equal to the number of shares subject to the SAR that are being exercised multiplied by the excess, if any, of the Fair Market Value of one Common Share on the exercise date over the Strike Price, less an amount equal to any taxes required to be withheld or paid. The Company shall pay this amount in cash, in Common Shares valued at Fair Market Value, or any combination thereof, as determined by the Committee. No fractional Common Shares shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine whether cash, other securities or other property shall be paid or transferred in lieu of any fractional Common Shares, or whether the fractional Common Shares or any rights thereto shall be canceled, terminated or otherwise eliminated.

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9.            Restricted Stock and Restricted Stock Units.

(a)            Generally. Each grant of Restricted Stock and Restricted Stock Units shall be evidenced by an Award Agreement (whether in paper or electronic medium (including email or the posting on a web site maintained by the Company or a third party under contract with the Company)). Each grant shall be subject to the conditions set forth in this Section 9, and to any other terms and conditions not inconsistent with the Plan reflected by the Committee in the applicable Award Agreement (including the performance goals, if any, upon whose attainment the Restricted Period shall lapse in part or full).

(b)            Restricted Accounts; Escrow or Similar Arrangement. Upon the grant of Restricted Stock, a book entry in a restricted account shall be established in the Participant’s name at the Company’s transfer agent and, if the Committee determines that the Restricted Stock shall be held by the Company or in escrow rather than held in the restricted account pending the release of the applicable restrictions, the Committee may require the Participant to additionally execute and deliver to the Company (i) an escrow agreement satisfactory to the Committee, if applicable, and (ii) the appropriate share power (endorsed in blank) with respect to the Restricted Stock covered by the agreement. If a Participant shall fail to execute an agreement evidencing an Award of Restricted Stock and, if applicable, an escrow agreement and blank share power within the amount of time specified by the Committee, the Award shall be null and void. Subject to the restrictions set forth in this Section 9 and the applicable Award Agreement, the Participant generally shall have the rights and privileges of a stockholder as to the Restricted Stock, including without limitation the right to vote the Restricted Stock and the right to receive dividends, if applicable. To the extent shares of Restricted Stock are forfeited, any share certificates issued to the Participant evidencing the shares shall be returned to the Company, and all rights of the Participant to the shares and as a stockholder with respect thereto shall terminate without further obligation on the part of the Company.

(c)          Vesting. Unless otherwise provided by the Committee in an Award Agreement, the unvested portion of Restricted Stock and Restricted Stock Units shall terminate and be forfeited upon termination of employment or service of the Participant granted the applicable Award.

(d)            Delivery of Restricted Stock and Settlement of Restricted Stock Units.

(i)            Upon the expiration of the Restricted Period with respect to any shares of Restricted Stock, the restrictions set forth in the applicable Award Agreement shall be of no further force or effect with respect to those shares, except as set forth in the applicable Award Agreement. If an escrow arrangement is used, upon expiration, the Company shall deliver to the Participant, or his or her beneficiary, without charge, the share certificate evidencing the shares of Restricted Stock that have not then been forfeited and with respect to which the Restricted Period has expired (rounded down to the nearest full share). Dividends, if any, that may have been withheld by the Committee and attributable to any particular share of Restricted Stock shall be distributed to the Committee and attributable to any particular share of Restricted Stock shall be distributed to the Participant in cash or, at the sole discretion of the Committee, in Common Shares having a Fair Market Value equal to the amount of the dividends, upon the release of restrictions on the share and, if the share is forfeited, the Participant shall have no right to the dividends (except as otherwise set forth by the Committee in the applicable Award Agreement).

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(ii)            Unless otherwise provided by the Committee in an Award Agreement, upon the expiration of the Restricted Period with respect to any outstanding Restricted Stock Units, the Company shall deliver to the Participant, or his or her beneficiary, without charge, one Common Share for each outstanding Restricted Stock Unit; provided, however, that the Committee may, in its sole discretion, elect to (i) pay cash or part cash and part Common Share in lieu of delivering only Common Shares in respect of the Restricted Stock Units or (ii) defer the delivery of Common Shares (or cash or part Common Shares and part cash, as the case may be) beyond the expiration of the Restricted Period if delivery would result in a violation of Applicable Laws until it is no longer the case. If a cash payment is made in lieu of delivering Common Shares, the amount of the payment shall be equal to the Fair Market Value of the Common Shares as of the date on which the Restricted Period lapsed with respect to the Restricted Stock Units, less an amount equal to any taxes required to be withheld or paid.

10.            Other Stock-Based Awards and Other Cash-Based Awards.

(a)            Other Stock-Based Awards. The Committee may grant types of equity-based or equity-related Awards not otherwise described by the terms of the Plan (including the grant or offer for sale of unrestricted Common Shares), in amounts and subject to terms and conditions, determined by the Committee (including, if applicable, the attainment of any performance goals, as set forth in the applicable Award Agreement). Other Stock-Based Awards may involve the transfer of actual Common Shares to Participants, or payment in cash or otherwise of amounts based on the value of Common Shares. The terms and conditions of the Awards shall be consistent with the Plan and set forth in the Award Agreement and need not be uniform among all the Awards or all Participants receiving the Awards.

(b)            Other Cash-Based Awards. The Committee may grant a cash Award granted to a Participant not otherwise described by the terms of the Plan, including cash awarded as a bonus or upon the attainment of any performance goals or otherwise as permitted under the Plan.

(c)          Value of Awards. Each Other Stock-Based Award shall be expressed in terms of Common Shares or units based on Common Shares, as determined by the Committee, and each Other Cash-Based Award shall be shall be expressed in terms of cash, as determined by the Committee. The Committee may establish performance goals and/or criteria in its discretion, and any such performance goals and/or criteria shall be set forth in the applicable Award Agreement. If the Committee exercises its discretion to establish performance goals and/or criteria, the number and/or value of Other Stock-Based Awards or Other Cash-Based Awards that will be paid out to the Participant will depend on the extent to which the performance goals and/or criteria are met.

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(d)            Payment of Awards. Payment, if any, with respect to an Other Stock-Based Award or Other Cash-Based Award shall be made in accordance with the terms of the Award, as set forth in the Award Agreement, in cash, Common Shares or a combination of cash and Common Shares, as the Committee determines.

(e)           Vesting. The Committee shall determine the extent to which the Participant shall have the right to receive Other Stock-Based Awards or Other Cash-Based Awards following the Participant’s termination of employment or service (including by reason of the Participant’s death, disability (as determined by the Committee), or termination for or without Cause or for or without Good Reason). These provisions shall be determined in the sole discretion of the Committee and these provisions may be included in the applicable Award Agreement, but need not be uniform among all Other Stock-Based Awards or Other Cash-Based Awards issued pursuant to the Plan, and may reflect distinctions based on the reasons for the termination of employment or service.

11.            Dividend Equivalents. No adjustment shall be made in the Common Shares issuable or taken into account under Awards on account of cash dividends that may be paid or other rights that may be issued to the holders of Common Shares prior to issuance of the Common Shares under the Award. The Committee may grant Dividend Equivalents based on the dividends declared on Common Shares that are subject to any Award (other than an Option or Stock Appreciation Right). Any Award of Dividend Equivalents may be credited as of the dividend payment dates, during the period between the Date of Grant of the Award and the date the Award becomes payable or terminates or expires, as determined by the Committee; however, Dividend Equivalents shall not be payable unless and until the Award becomes payable, and shall be subject to forfeiture to the same extent as the underlying Award. Dividend Equivalents may be subject to any additional limitations and/or restrictions determined by the Committee. Dividend Equivalents shall be payable in cash, Common Shares or converted to full-value Awards, calculated based on a formula determined by the Committee.

12.            Changes in Capital Structure and Similar Events. In the event of  (i) any dividend (other than ordinary cash dividends) or other distribution (whether in the form of cash, Common Shares, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, amalgamation, consolidation, spin-off, split-up, split-off, combination, repurchase or exchange of Common Shares or other securities of the Company, issuance of warrants or other rights to acquire Common Shares or other securities of the Company, or other similar corporate transaction or event (including, without limitation, a Change in Control or Company Sale) that affects the Common Shares, or (ii) unusual or infrequently occurring events (including, without limitation, a Change in Control or Company Sale) affecting the Company, any Affiliate, or the financial statements of the Company or any Affiliate, or changes in applicable rules, rulings, regulations or other requirements of any governmental body or securities exchange or inter-dealer quotation system, accounting principles or law, such that in either case an adjustment is determined by the Committee in its sole discretion to be necessary or appropriate, then the Committee shall make the adjustments it deems equitable, including without limitation any or all of the following:

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(a)         adjusting any or all of  (i) the number of Common Shares or other securities of the Company (or number and kind of other securities or other property) that may be delivered in respect of Awards or with respect to which Awards may be granted under the Plan (including, without limitation, adjusting any or all of the limitations under Section 5) and (ii) the terms of any outstanding Award, including, without limitation, (A) the number of Common Shares or other securities of the Company (or number and kind of other securities or other property) subject to outstanding Awards or to which outstanding Awards relate, (B) the Exercise Price or Strike Price with respect to any Award or (C) any applicable performance measures (including, without limitation, any performance goals and/or criteria);

(b)           providing for a substitution or assumption of Awards in a manner that substantially preserves the applicable terms of the Awards;

(c)           accelerating the exercisability or vesting of, lapse of restrictions on, or termination of, Awards or providing for a period of time for exercise prior to the occurrence of the event;

(d)           modifying the terms of Awards to add events, conditions or circumstances (including termination of employment within a specified period after a Change in Control or Company Sale) upon which the exercisability or vesting of or lapse of restrictions thereon will accelerate;

(e)        deeming any performance measures (including, without limitation, any performance goals and/or criteria) satisfied at target, maximum or actual performance through closing or any other level determined by the Committee in its sole discretion, or providing for the performance measures to continue (as is or as adjusted by the Committee) after closing;

(f)            providing that for a period prior to the Change in Control or Company Sale determined by the Committee in its sole discretion, any Options or SARs that would not otherwise become exercisable prior to the Change in Control or Company Sale will be exercisable as to all Common Shares subject thereto (but the exercise will be contingent upon and subject to the occurrence of the Change in Control or Company Sale and if the Change in Control or Company Sale does not take place after giving the notice for any reason whatsoever, the exercise will be null and void) and that any Options or SARs not exercised prior to the consummation of the Change in Control or Company Sale will terminate and be of no further force and effect as of the consummation of the Change in Control or Company Sale; and

(g)        canceling any one or more outstanding Awards and causing to be paid to the holders thereof, in cash, Common Shares, other securities or other property, or any combination thereof, the value of the Awards, if any, as determined by the Committee (which if applicable may be based upon the price per Common Share received or to be received by other shareholders of the Company in that event), including without limitation, in the case of an outstanding Option or SAR, a cash payment in an amount equal to the excess, if any, of the Fair Market Value (as of a date specified by the Committee) of the Common Shares subject to the Option or SAR over the aggregate Exercise Price or Strike Price of the Option or SAR, respectively (it being understood that, in that event, any Option or SAR having a per share Exercise Price or Strike Price equal to, or in excess of, the Fair Market Value of a Common Share subject thereto may be canceled and terminated without any payment or consideration therefor); provided, however, that in the case of any “equity restructuring” (within the meaning of the Financial Accounting Standards Board Accounting Standards Codification Topic 718), the Committee shall make an equitable or proportionate adjustment to outstanding Awards to reflect the equity restructuring. The Company shall give each Participant notice of an adjustment hereunder and, upon notice, the adjustment shall be conclusive and binding for all purposes.

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13.            Amendments and Termination.

(a)            Amendment and Termination of the Plan. The Board may amend, alter, suspend, discontinue, or terminate the Plan or any portion thereof at any time; provided that (i) no amendment to Section 13(b) (to the extent required by the proviso in Section 13(b)) shall be made without shareholder approval and (ii) no amendment, alteration, suspension, discontinuation or termination shall be made without stockholder approval if the approval is necessary to comply with any tax or regulatory requirement applicable to the Plan (including, without limitation, as necessary to comply with any rules or requirements of any securities exchange or inter-dealer quotation system on which the Common Shares may be listed or quoted); provided, further, that any amendment, alteration, suspension, discontinuance or termination that would materially and adversely affect the rights of any Participant or any holder or beneficiary of any Award theretofore granted shall not to that extent be effective as to the affected Participant, holder or beneficiary without the consent of the affected Participant, holder or beneficiary.

(b)          Amendment of Award Agreements. The Committee may, to the extent consistent with the terms of any applicable Award Agreement, waive any conditions or rights under, amend any terms of, or alter, suspend, discontinue, cancel or terminate, any Award theretofore granted or the associated Award Agreement, prospectively or retroactively; provided that the waiver, amendment, alteration, suspension, discontinuance, cancellation or termination that would materially and adversely affect the rights of any Participant or any holder or beneficiary of any Award with respect to any Award theretofore granted shall not to that extent be effective without the consent of the affected Participant, holder or beneficiary; provided, further, that without stockholder approval, except as otherwise permitted under Section 12, (i) no amendment or modification may reduce the Exercise Price of any Option or the Strike Price of any SAR, (ii) the Committee may not cancel any outstanding Option or SAR where the Fair Market Value of the Common Shares underlying the Option or SAR is less than its Exercise Price or Strike Price, as applicable, and replace it with a new Option or SAR, another Award or cash and (iii) the Committee may not take any other action that is considered a “repricing” for purposes of the stockholder approval rules of the applicable securities exchange or inter-dealer quotation system on which the Common Shares are listed or quoted.

14.            General.

(a)       Award Agreements. Each Award under the Plan shall be evidenced by an Award Agreement, which shall be delivered to the Participant (whether in paper or electronic medium (including email or the posting on a web site maintained by the Company or a third party under contract with the Company)) and shall specify the terms and conditions of the Award and any rules applicable thereto, including without limitation, the effect on the Award of the death, disability or termination of employment or service of a Participant, or of any other events determined by the Committee. Except as the Plan otherwise provides, each Award may be made alone or in addition or in relation to any other Award. The terms of each Award to a Participant need not be identical, and the Committee need not treat Participants or Awards (or portions thereof) uniformly.

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(b)            Nontransferability.

(i)            Each Award shall be exercisable only by a Participant during the Participant’s lifetime, or, if permissible under Applicable Laws, by the Participant’s legal guardian or representative. No Award may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a Participant other than by will or by the laws of descent and distribution and the purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or an Affiliate; provided that the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance.

(ii)          Notwithstanding the foregoing, the Committee may, in its sole discretion, permit Awards (other than Incentive Stock Options) to be transferred by a Participant, without consideration, subject to any rules the Committee adopts consistent with any applicable Award Agreement to preserve the purposes of the Plan, to: (A) any person who is a “family member” of the Participant, as that term is used in the instructions to Form S-8 under the Securities Act (collectively, the “Immediate Family Members”); (B) a trust solely for the benefit of the Participant and his or her Immediate Family Members; (C) a partnership or limited liability company whose only partners or stockholders are the Participant and his or her Immediate Family Members; or (D) any other transferee as may be approved either (I) by the Board or the Committee in its sole discretion, or (II) as provided in the applicable Award Agreement. (each transferee described in clauses (A), (B), (C) and (D) above is hereinafter referred to as a “Permitted Transferee”); provided that the Participant gives the Committee advance written notice describing the terms and conditions of the proposed transfer and the Committee notifies the Participant in writing that the transfer would comply with the requirements of the Plan.

(iii)            The terms of any Award transferred in accordance with the immediately preceding sentence shall apply to the Permitted Transferee and any reference in the Plan, or in any applicable Award Agreement, to a Participant shall be deemed to refer to the Permitted Transferee, except that (A) Permitted Transferees shall not be entitled to transfer any Award, other than by will or the laws of descent and distribution; (B) Permitted Transferees shall not be entitled to exercise any transferred Option unless there shall be in effect a registration statement on an appropriate form covering the Common Shares to be acquired pursuant to the exercise of the Option if the Committee determines, consistent with any applicable Award Agreement, that such a registration statement is necessary or appropriate; (C) the Committee or the Company shall not be required to provide any notice to a Permitted Transferee, whether or not the notice is or would otherwise have been required to be given to the Participant under the Plan or otherwise; and (D) the consequences of the termination of the Participant’s employment by, or services to, the Company or an Affiliate under the terms of the Plan and the applicable Award Agreement shall continue to be applied with respect to the Participant, including, without limitation, that an Option shall be exercisable by the Permitted Transferee only to the extent, and for the periods, specified in the Plan and the applicable Award Agreement.

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(c)            Tax Withholding and Deductions.

(i)            A Participant shall be required to pay to the Company or any Affiliate, and the Company or any Affiliate shall have the right and is hereby authorized to deduct and withhold, from any cash, Common Shares, other securities or other property deliverable under any Award or from any compensation or other amounts owing to a Participant, the amount (in cash, Common Shares, other securities or other property) of any required taxes (up to the maximum statutory rate under Applicable Laws as in effect from time to time as determined by the Committee) and deduction in respect of an Award, its grant, vesting or exercise, or any payment or transfer under an Award or under the Plan and to take any other action necessary in the opinion of the Committee or the Company to satisfy all obligations for the payment of the taxes.

(ii)           Without limiting the generality of clause (i) above, the Committee may, in its sole discretion, permit a Participant to satisfy, in whole or in part, the foregoing tax and deduction liability by (A) the delivery of Common Shares (which are not subject to any pledge or other security interest and are Mature Shares, except as otherwise determined by the Committee) owned by the Participant having a Fair Market Value equal to the liability or (B) having the Company withhold from the number of Common Shares otherwise issuable or deliverable pursuant to the exercise or settlement of the Award a number of shares with a Fair Market Value equal to the liability.

(d)            No Claim to Awards; No Rights to Continued Employment; Waiver. No employee of the Company or an Affiliate, or other person, shall have any claim or right to be granted an Award under the Plan or, having been selected for the grant of an Award, to be selected for a grant of any other Award. There is no obligation for uniformity of treatment of Participants or holders or beneficiaries of Awards. The terms and conditions of Awards and the Committee’s determinations and interpretations with respect thereto need not be the same with respect to each Participant and may be made selectively among Participants, whether or not the Participants are similarly situated. Neither the Plan nor any action taken hereunder shall be construed as giving any Participant any right to be retained in the employ or service of the Company or an Affiliate, nor shall it be construed as giving any Participant any rights to continued service on the Board. The Company or any of its Affiliates may at any time dismiss a Participant from employment or discontinue any consulting relationship, free from any liability or any claim under the Plan, unless otherwise expressly provided in the Plan or any Award Agreement. By accepting an Award under the Plan, a Participant shall thereby be deemed to have waived any claim to continued exercise or vesting of an Award or to damages or severance entitlement related to non-continuation of the Award beyond the period provided under the Plan or any Award Agreement, notwithstanding any provision to the contrary in any written employment contract or other agreement between the Company and its Affiliates and the Participant, whether any such agreement is executed before, on or after the Date of Grant.

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(e)           International Participants. With respect to Participants who reside or work outside of the United States of America, the Committee may in its sole discretion amend the terms of the Plan or outstanding Awards with respect to those Participants in order to conform the terms with the requirements of local law or to obtain more favorable tax or other treatment for a Participant, the Company or its Affiliates.

(f)            Designation and Change of Beneficiary. Each Participant may file with the Committee a written designation of one or more persons as the beneficiary(ies) who shall be entitled to receive the amounts payable with respect to an Award, if any, due under the Plan upon his or her death. A Participant may, from time to time, revoke or change his or her beneficiary designation without the consent of any prior beneficiary by filing a new designation with the Committee. The last designation received by the Committee shall be controlling; provided, however, that no designation, or change or revocation thereof, shall be effective unless received by the Committee prior to the Participant’s death, and in no event shall it be effective as of a date prior to receipt. If no beneficiary designation is filed by a Participant, the beneficiary shall be deemed to be his or her spouse or, if the Participant is unmarried at the time of death, his or her estate.

(g)           Termination of Employment/Service. Unless determined otherwise by the Committee at any point following the event: (i) neither a temporary absence from employment or service due to illness, vacation or leave of absence nor a transfer from employment or service with the Company to employment or service with an Affiliate (or vice-versa) shall be considered a termination of employment or service with the Company or an Affiliate; and (ii) if a Participant’s employment with the Company and its Affiliates terminates, but the Participant continues to provide services to the Company and its Affiliates in a non-employee capacity (or vice-versa), the change in status shall not be considered a termination of employment with the Company or an Affiliate.

(h)           No Rights as a Stockholder. Except as otherwise specifically provided in the Plan or any Award Agreement, no person shall be entitled to the privileges of ownership in respect of Common Shares or other securities that are subject to Awards hereunder until the shares have been issued or delivered to that person.

(i)            Government and Other Regulations.

(i)            The obligation of the Company to settle Awards in Common Shares or other consideration shall be subject to all Applicable Laws, rules, and regulations, and to any approvals required by governmental agencies. Notwithstanding any terms or conditions of any Award to the contrary, the Company shall be under no obligation to offer to sell or to sell, and shall be prohibited from offering to sell or selling, any Common Shares or other securities pursuant to an Award unless the shares have been properly registered for sale pursuant to the Securities Act with the Securities and Exchange Commission or unless the Company has received an opinion of counsel, satisfactory to the Company, that the shares may be offered or sold without registration pursuant to an available exemption therefrom and the terms and conditions of the exemption have been fully complied with. The Company shall be under no obligation to register for sale under the Securities Act any of the Common Shares or other securities to be offered or sold under the Plan. The Committee shall have the authority to provide that all certificates for Common Shares or other securities of the Company or any Affiliate delivered under the Plan shall be subject to any stop transfer orders and other restrictions the Committee deems advisable under the Plan, the applicable Award Agreement, the federal securities laws, or the rules, regulations and other requirements of the Securities and Exchange Commission, any securities exchange or inter-dealer quotation system upon which the shares or other securities are then listed or quoted and any other applicable federal, state, local or non-U.S. laws, and, without limiting the generality of Section 9, the Committee may cause a legend or legends to be put on the certificates and Award Agreements to make appropriate reference to the restrictions. Notwithstanding any provision in the Plan to the contrary, the Committee reserves the right to add any additional terms or provisions to any Award granted under the Plan that it in its sole discretion deems necessary or advisable in order that the Award complies with the legal requirements of any governmental entity to whose jurisdiction the Award is subject.

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(ii)           The Committee may cancel an Award or any portion thereof if it determines, in its sole discretion, that legal or contractual restrictions and/or blockage and/or other market considerations would make the Company’s acquisition of Common Shares from the public markets, the Company’s issuance of Common Shares or other securities to the Participant, the Participant’s acquisition of Common Shares or other securities from the Company and/or the Participant’s sale of Common Shares to the public markets, illegal, impracticable or inadvisable. If the Committee determines to cancel all or any portion of an Award denominated in Common Shares in accordance with the foregoing, the Company shall pay to the Participant an amount equal to the excess of  (A) the aggregate Fair Market Value of the Common Shares subject to the Award or portion thereof canceled (determined as of the applicable exercise date, or the date that the shares would have been vested or delivered, as applicable), over (B) the aggregate Exercise Price or Strike Price (in the case of an Option or SAR, respectively) or any amount payable as a condition of delivery of Common Shares (in the case of any other Award). This amount shall be delivered to the Participant as soon as practicable following the cancellation of the Award or portion thereof.

(j)            Payments to Persons Other Than Participants. If the Committee shall find that any person to whom any amount is payable under the Plan is unable to care for his or her affairs because of illness or accident, or is a minor, or has died, then any payment due to that person or his or her estate (unless a prior claim therefor has been made by a duly appointed legal representative) may, if the Committee so directs the Company, be paid to his or her spouse, child, relative, an institution maintaining or having custody of that person, or any other person deemed by the Committee to be a proper recipient on behalf of that person otherwise entitled to payment. Any such payment shall be a complete discharge of the liability of the Committee and the Company therefor.

(k)            Nonexclusivity of the Plan. Neither the adoption of this Plan by the Board nor the submission of this Plan to the stockholders of the Company for approval shall be construed as creating any limitations on the power of the Board to adopt any other incentive arrangements it deems desirable, including, without limitation, the granting of stock options or other equity-based awards otherwise than under this Plan, and these arrangements may be either applicable generally or only in specific cases.

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(l)            No Trust or Fund Created. The Plan is intended to constitute an “unfunded” plan for incentive compensation. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate, on the one hand, and a Participant or other person or entity, on the other hand. No provision of the Plan or any Award shall require the Company, for the purpose of satisfying any obligations under the Plan, to purchase assets or place any assets in a trust or other entity to which contributions are made or otherwise to segregate any assets, nor shall the Company maintain separate bank accounts, books, records or other evidence of the existence of a segregated or separately maintained or administered fund for those purposes. Participants shall have no rights under the Plan other than as unsecured general creditors of the Company, except that insofar as they may have become entitled to payment of additional compensation by performance of services, they shall have the same rights as other employees under general law.

(m)          Reliance on Reports. Each member of the Committee and each member of the Board shall be fully justified in acting or failing to act, as the case may be, and shall not be liable for having so acted or failed to act in good faith, in reliance upon any report made by the independent public accountant of the Company and its Affiliates and/or any other information furnished in connection with the Plan by any agent of the Company or the Committee or the Board, other than himself.

(n)           Relationship to Other Benefits. No payment under the Plan shall be taken into account in determining any benefits under any pension, retirement, profit sharing, group insurance or other benefit plan of the Company or any Affiliate except as otherwise specifically provided in the other plan or an agreement thereunder.

(o)           Governing Law. The Plan shall be governed by and construed in accordance with the internal laws of the State of Delaware applicable to contracts made and performed wholly within the State of Delaware, without giving effect to the conflict of laws provisions thereof.

(p)           Severability. If any provision of the Plan or any Award or Award Agreement is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any person or entity or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, the provision shall be construed or deemed amended to conform to the Applicable Laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, the provision shall be construed or deemed stricken as to that jurisdiction, person or entity or Award and the remainder of the Plan and the Award shall remain in full force and effect.

(q)           Obligations Binding on Successors. The obligations of the Company under the Plan shall be binding upon any successor corporation or organization resulting from the merger, amalgamation, consolidation or other reorganization of the Company, or upon any successor corporation or organization succeeding to substantially all of the assets and business of the Company.

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(r)            Code Section 409A.

(i)            Notwithstanding any provision of this Plan to the contrary, all Awards made under this Plan are intended to be exempt from or, in the alternative, comply with Code Section 409A and the interpretive guidance thereunder, including the exceptions for stock rights and short-term deferrals. The Plan shall be construed and interpreted in accordance with that intent. Each payment under an Award shall be treated as a separate payment for purposes of Code Section 409A.

(ii)           If a Participant is a “specified employee” (as that term is defined for purposes of Code Section 409A) at the time of his or her termination of service, no amount that is nonqualified deferred compensation subject to Code Section 409A and that becomes payable by reason of the termination of service shall be paid to the Participant (or in the event of the Participant’s death, the Participant’s representative or estate) before the earlier of  (x) the first business day after the date that is six months following the date of the Participant’s termination of service, and (y) within 30 days following the date of the Participant’s death. For purposes of Code Section 409A, a termination of service shall be deemed to occur only if it is a “separation from service” within the meaning of Code Section 409A, and references in the Plan and any Award Agreement to “termination of service” or similar terms shall mean a “separation from service.” If any Award is or becomes subject to Code Section 409A, unless the applicable Award Agreement provides otherwise, the Award shall be payable upon the Participant’s “separation from service” within the meaning of Code Section 409A. If any Award is or becomes subject to Code Section 409A and if payment of the Award would be accelerated or otherwise triggered under a Change in Control or Company Sale, then the definition of Change in Control or Company Sale shall be deemed modified, only to the extent necessary to avoid the imposition of an excise tax under Code Section 409A, to mean a “change in control event” as that term is defined for purposes of Code Section 409A.

(iii)          Any adjustments made pursuant to Section 12 to Awards that are subject to Code Section 409A shall be made in compliance with the requirements of Code Section 409A, and any adjustments made pursuant to Section 12 to Awards that are not subject to Code Section 409A shall be made in such a manner as to ensure that after the adjustment, the Awards either (x) continue not to be subject to Code Section 409A or (y) comply with the requirements of Code Section 409A.

(s)           Notification of Election Under Code Section 83(b). If any Participant, in connection with the acquisition of Common Shares under an Award, makes the election permitted under Code Section 83(b), the Participant shall notify the Company of the election within ten days of filing notice of the election with the Internal Revenue Service.

(t)            Expenses; Gender; Titles and Headings; Interpretation. The expenses of administering the Plan shall be borne by the Company and its Affiliates. Masculine pronouns and other words of masculine gender shall refer to both men and women. The titles and headings of the sections in the Plan are for convenience of reference only, and in the event of any conflict, the text of the Plan, rather than those titles or headings shall control. Unless the context of the Plan otherwise requires, words using the singular or plural number also include the plural or singular number, respectively; derivative forms of defined terms will have correlative meanings; the terms “hereof,” “herein” and “hereunder” and derivative or similar words refer to this entire Plan; the term “Section” refers to the specified Section of this Plan and references to “paragraphs” or “clauses” shall be to separate paragraphs or clauses of the Section or subsection in which the reference occurs; the words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation”; and the word “or” shall be disjunctive but not exclusive.

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(u)           Other Agreements. Notwithstanding the above, the Committee may require, as a condition to the grant of and/or the receipt of Common Shares or other securities under an Award, that the Participant execute lock-up, shareholder or other agreements, as it may determine in its sole and absolute discretion.

(v)           Payments. Participants shall be required to pay, to the extent required by Applicable Laws, any amounts required to receive Common Shares or other securities under any Award made under the Plan.

(w)          Clawback; Erroneously Awarded Compensation. All Awards (including on a retroactive basis) granted under the Plan are subject to the terms of any Company forfeiture, incentive compensation recoupment, clawback or similar policy as it may be in effect from time to time, as well as any similar provisions of Applicable Laws, as well as any other policy of the Company that may apply to the Awards, such as anti-hedging or pledging policies, as they may be in effect from time to time. In particular, these policies and/or provisions shall include, without limitation, (i) any Company policy established to comply with Applicable Laws (including, without limitation, Section 304 of the Sarbanes-Oxley Act and Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act), and/or (ii) the rules and regulations of the applicable securities exchange or inter-dealer quotation system on which the Common Shares or other securities are listed or quoted, and these requirements shall be deemed incorporated by reference into all outstanding Award Agreements.

(x)            No Fractional Shares. No fractional shares of Common Shares shall be issued or delivered pursuant to the Plan. The Committee shall determine whether cash, other Awards, or other property shall be issued or paid in lieu of fractional shares or whether fractional shares or any rights thereto shall be forfeited, rounded, or otherwise eliminated.

(y)           Paperless Administration. If the Company establishes, for itself or using the services of a third party, an automated system for the documentation, granting or exercise of Awards, such as a system using an internet website or interactive voice response, then the paperless documentation, granting or exercise of Awards by a Participant may be permitted through the use of such an automated system.

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(z)           Data Privacy. As a condition for receiving any Award, each Participant explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of personal data as described in this Section 14(z) by and among the Company and its Subsidiaries and Affiliates exclusively for implementing, administering and managing the Participant’s participation in the Plan. The Company and its Subsidiaries and Affiliates may hold certain personal information about a Participant, including the Participant’s name, address and telephone number; birthdate; social security, insurance number or other identification number; salary; nationality; job title(s); any Common Shares held in the Company or its Subsidiaries and Affiliates; and Award details, to implement, manage and administer the Plan and Awards (the “Data”). The Company and its Subsidiaries and Affiliates may transfer the Data amongst themselves as necessary to implement, administer and manage a Participant’s participation in the Plan, and the Company and its Subsidiaries and Affiliates may transfer the Data to third parties assisting the Company with Plan implementation, administration and management. These recipients may be located in the Participant’s country, or elsewhere, and the Participant’s country may have different data privacy laws and protections than the recipients’ country. By accepting an Award, each Participant authorizes the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, to implement, administer and manage the Participant’s participation in the Plan, including any required Data transfer to a broker or other third party with whom the Company or the Participant may elect to deposit any Common Shares. The Data related to a Participant will be held only as long as necessary to implement, administer, and manage the Participant’s participation in the Plan. A Participant may, at any time, view the Data that the Company holds regarding the Participant, request additional information about the storage and processing of the Data regarding the Participant, recommend any necessary corrections to the Data regarding the Participant or refuse or withdraw the consents in this Section 14(z) in writing, without cost, by contacting the local human resources representative. The Company may cancel Participant’s ability to participate in the Plan and, in the Committee’s discretion, the Participant may forfeit any outstanding Awards if the Participant refuses or withdraws the consents in this Section 14(z).

(aa)         Broker-Assisted Sales. In the event of a broker-assisted sale of Common Shares in connection with the payment of amounts owed by a Participant under or with respect to the Plan or Awards: (i) any Common Shares to be sold through the broker-assisted sale will be sold on the day the payment first becomes due, or as soon thereafter as practicable; (ii) the Common Shares may be sold as part of a block trade with other Participants in the Plan in which all participants receive an average price; (iii) the applicable Participant will be responsible for all broker’s fees and other costs of sale, and by accepting an Award, each Participant agrees to indemnify and hold the Company harmless from any losses, costs, damages, or expenses relating to any such sale; (iv) to the extent the Company or its designee receives proceeds of the sale that exceed the amount owed, the Company will pay the excess in cash to the applicable Participant as soon as reasonably practicable; (v) the Company and its designees are under no obligation to arrange for the sale at any particular price; and (vi) if the proceeds of the sale are insufficient to satisfy the Participant’s applicable obligation, the Participant may be required to pay immediately upon demand to the Company or its designee an amount in cash sufficient to satisfy any remaining portion of the Participant’s obligation.

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FLEXENERGY GREEN SOLUTIONS, INC.

STOCK OPTION GRANT NOTICE
(2021 INCENTIVE AWARD PLAN)

FLEXENERGY GREEN SOLUTIONS, INC., a Delaware corporation (the “Company”), pursuant to its 2021 Incentive Award Plan, as may be amended from time to time (the “Plan”), hereby grants to Optionholder an option to purchase the number of Common Shares set forth below. This option is subject to all of the terms and conditions as set forth in this Stock Option Grant Notice (including the vesting schedule set forth on Exhibit A hereto, collectively, this “Grant Notice”), in the corresponding Option Agreement, the Plan and the Notice of Exercise, all of which are attached hereto and incorporated herein in their entirety. Capitalized terms not explicitly defined herein but defined in the Plan or the corresponding Option Agreement will have the same definitions as in the Plan or the corresponding Option Agreement. If there is any conflict between the terms in this Grant Notice, the corresponding Option Agreement, the Plan and the Notice of Exercise, then such conflict or inconsistency shall be resolved by giving such documents precedence in the following order: this Grant Notice, the corresponding Option Agreement, the Plan and then the Notice of Exercise.

Optionholder:

Date of Grant:

Vesting Commencement Date:

Number of Shares Subject to Option:

Exercise Price (Per Common Share):

Total Exercise Price:

Expiration Date:

Type of Grant:	¨   Incentive Stock Option      ¨   Nonqualified Stock Option
Vesting Schedule:	This award shall vest pursuant to the schedule set forth in Exhibit A, which is attached hereto and incorporated herein in its entirety.
Payment:	By one or a combination of the following methods (described in the corresponding Option Agreement) as indicated by a checkmark opposite the applicable method below:
	¨     By cash, check, bank draft or money order payable to the Company
	¨     Pursuant to a Regulation T Program if the shares are publicly traded
	¨     By delivery of already-owned shares if the shares are publicly traded

Additional Terms/Acknowledgements:

Optionholder acknowledges receipt of, and understands and agrees to, this Grant Notice, the corresponding Option Agreement, the Plan and the Notice of Exercise.  Optionholder acknowledges and agrees that this Grant Notice, the corresponding Option Agreement and the Notice of Exercise may not be modified, amended or revised except as provided in the Plan.  Optionholder further acknowledges that as of the Date of Grant, this Grant Notice, the corresponding Option Agreement, the Plan and the Notice of Exercise set forth the entire understanding between Optionholder and the Company regarding this option award and supersede all prior oral and written agreements, promises and/or representations on that subject with the exception of the following agreements only.

Acceptance/Expiration of Option:

To accept this option, Optionholder must within 30 days following the Award Date (at which time this option will otherwise automatically expire) complete, execute and deliver this Grant Notice (including all applicable Exhibits and the corresponding Option Agreement).   Notwithstanding the foregoing, if Optionholder has not accepted this Option prior to the occurrence of a Change in Control, Company Sale, dissolution or liquidation, this option may be cancelled by the Company.

OTHER AGREEMENTS:

By accepting this option, you consent to receive such documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

FLEXENERGY GREEN SOLUTIONS, INC.	OPTIONHOLDER:
By:	By:
Name: Mark Schnepel	Name:
Title: Chief Executive Officer	Date:

ATTACHMENTS: Option Agreement, 2021 Incentive Award Plan, Notice of Exercise

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EXHIBIT A

VESTING SCHEDULE

The options under this award with respect to [l] Common Shares (the “Immediately Vested Options”) shall be immediately vested on the Date of Grant.

The options under this award with respect to [l] Common Shares (the “Vesting Options”) shall vest annually over a period of four years in four equal tranches on each annual anniversary of the Date of Grant, such that (i) one-quarter of the Vesting Options shall vest on the first anniversary of the Date of Grant, (ii) another one-quarter of the Vesting Options shall vest on the second anniversary of the Date of Grant, (iii) another one-quarter of the Vesting Options shall vest on the third anniversary of the Date of Grant, and (iv) the final one-quarter of the Vesting Options shall vest on the fourth anniversary of the Date of Grant, in all cases subject to the terms and conditions of the corresponding Option Agreement.

Notwithstanding the above, (A) if the Optionholder’s Continuous Service is terminated without Cause by the Company (or a successor, if appropriate) during the one-year period immediately following the consummation of a Change in Control, then the vesting of the Vesting Options shall accelerate such that 100% of the Vesting Options shall become vested, effective as of immediately prior to such termination of the Optionholder’s Continuous Service; and (B) if a Company Sale occurs during the Optionholder’s Continuous Service, then the vesting of the Vesting Options shall accelerate such that 100% of the Vesting Options shall become vested, effective as of immediately prior to the occurrence of the Company Sale. As a condition of the application of the accelerated vesting contemplated by the foregoing, the Optionholder shall execute the Company’s form of a general release of any claims against the Company (the “Release”) and permit such Release to become effective and irrevocable in accordance with its terms. Unless the Release is executed by the Optionholder and delivered to the Company within the period of time set forth in the Release, and such Release becomes effective and irrevocable, there shall be no accelerated vesting of Vesting Options as otherwise contemplated by the foregoing.

EXHIBIT A
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ATTACHMENT I

OPTION AGREEMENT

[See attached.]

ATTACHMENT I
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FLEXENERGY GREEN SOLUTIONS, INC.

2021 INCENTIVE AWARD PLAN

OPTION AGREEMENT
(INCENTIVE STOCK OPTION OR NONSTATUTORY STOCK OPTION)

Pursuant to your Stock Option Grant Notice (including the vesting schedule attached thereto as Exhibit A, collectively, the “Grant Notice”) and this Option Agreement (this “Option Agreement”), FlexEnergy Green Solutions, Inc., a Delaware corporation (the “Company”) has granted you an option under its 2021 Incentive Award Plan (the “Plan”) to purchase the number of Common Shares indicated in your Grant Notice at the exercise price indicated in your Grant Notice. The option is granted to you effective as of the date of grant set forth in the Grant Notice (the “Date of Grant”). If there is any conflict between the terms in the Grant Notice, this Option Agreement, the Plan and the Notice of Exercise, then such conflict shall be resolved by giving such documents precedence in the following order: the Grant Notice, this Option Agreement, the Plan and then the Notice of Exercise. Capitalized terms not explicitly defined in this Option Agreement or in the Grant Notice but defined in the Plan will have the same definitions as in the Plan.

The details of your option, in addition to those set forth in the Grant Notice and the Plan, are as follows:

1.             VESTING; NO STOCKHOLDER RIGHTS. Your option will vest as provided in your Grant Notice. Vesting will cease upon the termination of your Continuous Service with the Company except as may be provided otherwise in the vesting schedule in Exhibit A to your Grant Notice or in an employment or other agreement between you and the Company. You will not be deemed to be the holder of the Common Shares, or have any of the rights of a stockholder, with respect to your option unless and until the option vests and you exercise the option in accordance with this Option Agreement and the Company has issued and delivered Common Shares to you and your name shall have been entered as a stockholder of record on the books of the Company. As used in this Agreement, “Continuous Service” means that your service with the Company or an Affiliate, whether as an employee, consultant or director, is not interrupted or terminated. Your Continuous Service shall not be deemed to have terminated merely because of a change in the capacity in which you render service to the Company or an Affiliate as an employee, consultant or director or a change in the entity for which you render such service, provided that there is no interruption or termination of your Continuous Service; provided further that if this Option Agreement (and the corresponding Award) is subject to Section 409A of the Code, this sentence shall only be given effect to the extent consistent with Section 409A of the Code. For example, a change in status from an employee of the Company to a director of an Affiliate will not constitute an interruption of Continuous Service. The Committee or its delegate, in its sole discretion, may determine whether Continuous Service will be considered interrupted in the case of any leave of absence approved by that party, including sick leave, military leave or any other personal or family leave of absence. The Committee or its delegate, in its sole discretion, may determine whether a Company transaction, such as a sale or spin-off of a division or subsidiary that employs you, shall be deemed to result in a termination of Continuous Service for purposes of this Option Agreement, and such decision shall be final, conclusive and binding.

ATTACHMENT I
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2.             NUMBER OF SHARES AND EXERCISE PRICE. The number of Common Shares subject to your option and your exercise price per share are set forth in your Grant Notice and will be adjusted in the event of changes in capital structure and similar events as provided in Section 11 of the Plan.

3.             METHOD OF PAYMENT. You must pay the full amount of the exercise price for the shares you wish to exercise. You may pay the exercise price in cash or by check, bank draft or money order payable to the Company or in any other manner expressly indicated as a permitted method of exercise on your Grant Notice, which may include one or more of the following:

(a)            Provided that at the time of exercise the Common Shares are publicly traded, pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of Common Shares, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds. This manner of payment is also known as a “cashless exercise”, “broker-assisted exercise”, “same day sale”, or “sell to cover”.

(b)            Provided that at the time of exercise the Common Shares are publicly traded, by delivery to the Company (either by actual delivery or attestation) of already-owned Common Shares that are owned free and clear of any liens, claims, vesting conditions, transfer restrictions, encumbrances or security interests, and that are valued at Fair Market Value on the date of exercise. “Delivery” for these purposes, in the sole discretion of the Company at the time you exercise your option, will include delivery to the Company of your attestation of ownership of such Common Shares in a form approved by the Company. You may not exercise your option by delivery to the Company of Common Shares if doing so would violate the provisions of any law, regulation or agreement restricting the redemption of the Company’s stock.

4.             WHOLE SHARES. You may exercise your option only for whole Common Shares.

5.             SECURITIES LAW COMPLIANCE. In no event may you exercise your option unless the Common Shares issuable upon exercise are then registered under the Securities Act or, if not registered, the Company has determined that your exercise and the issuance of the shares would be exempt from the registration requirements of the Securities Act. The exercise of your option also must comply with all other applicable laws and regulations governing your option, and you may not exercise your option if the Company determines that such exercise would not be in material compliance with such laws and regulations.

6.             TERM. You may not exercise your option before the Date of Grant or after the expiration of the option’s term. Except as may be provided otherwise in the vesting schedule in Exhibit A to your Grant Notice or in an employment or other agreement between you and the Company, the term of your option expires (subject to the provisions of Section 6(c) of the Plan if your Option is an Incentive Stock Option and you, on the Date of Grant, own shares representing more than 10% of the combined voting power of the Company) upon the earliest of the following:

ATTACHMENT I
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(a)            immediately upon the termination of your service with the Company for Cause;

(b)            three months after the termination of your service with the Company for any reason other than Cause, your Disability (as defined below) or your death (except as otherwise provided in Section 6(d) below); provided, however, that if during any part of such three month period your option is not exercisable solely because of the condition set forth in the section above relating to “Securities Law Compliance,” your option will not expire until the earlier of the Expiration Date or until it has been exercisable for an aggregate period of three months after the termination of your service with the Company;;

(c)            12 months after the termination of your service with the Company due to your Disability (except as otherwise provided in Section 6(d) below). For purposes of this Option Agreement, “Disability” means your inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than 12 months as provided in Sections 22(e)(3) and 409A(a)(2)(c)(i) of the Code, and will be determined by the Committee on the basis of such medical evidence as the Committee deems warranted under the circumstances;

(d)            12 months after your death if you die either during your service with the Company or within three months after your service with the Company terminates for any reason other than Cause;

(e)            the Expiration Date indicated in your Grant Notice; or

(f)            the day before the 10th anniversary of the Date of Grant.

If your option is an Incentive Stock Option, note that to obtain the federal income tax advantages associated with an Incentive Stock Option, the Code requires that at all times beginning on the Date of Grant and ending on the day three months before the date of your option’s exercise, you must be an employee of the Company or an Affiliate, except in the event of your death or Disability. The Company has provided for extended exercisability of your option under certain circumstances for your benefit but cannot guarantee that your option will necessarily be treated as an Incentive Stock Option if you continue to provide services to the Company or an Affiliate as a consultant or director after your employment terminates or if you otherwise exercise your option more than three months after the date your employment with the Company or an Affiliate terminates.

7.             EXERCISE.

(a)            You may exercise the vested portion of your option during its term by (i) delivering a Notice of Exercise (in the form attached to the Grant Notice or such other form as may be designated by the Company) or completing such other documents and/or procedures designated by the Company for exercise and (ii) paying the exercise price and any applicable withholding taxes to the Company’s Secretary, stock plan administrator, or such other person as the Company may designate, together with such additional documents as the Company may then require. Subject to the applicable terms of the Plan, your option shall become exercisable only to the extent your option is vested (as provided in the Vesting Schedule (see above)) at the time of exercise.

ATTACHMENT I
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(b)            By exercising your option you agree that, as a condition to any exercise of your option, the Company may require you and you hereby agree to enter into an arrangement providing for the payment by you to the Company of any tax withholding obligation of the Company arising by reason of (i) the exercise of your option, or (ii) the disposition of Common Shares acquired upon such exercise.

(c)            If your option is an Incentive Stock Option, by exercising your option you agree that you will notify the Company in writing within 15 days after the date of any disposition of any of the shares of the Common Shares issued upon exercise of your option that occurs within two years after the Date of Grant or within one year after such Common Shares are transferred upon exercise of your option.

8.             TRANSFERABILITY. Except as otherwise provided in this Section 8, your option is not assignable or transferable, except by will or by the laws of descent and distribution, and is exercisable during your life only by you. Without limiting the generality of the foregoing, your option may not be sold, assigned, transferred or otherwise disposed of, or pledged or hypothecated in any manner (whether by operation of law or otherwise), and shall not be subject to execution, attachment or other process. Any assignment, transfer, sale, pledge, hypothecation or other disposition of your option or any attempt to make any such levy of execution, attachment or other process will cause your option to terminate immediately, unless the Chief Financial Officer of the Company, with advice from counsel, specifically waives applicability of this provision.

(a)            Certain Trusts. Upon receiving written permission from the Chief Financial Officer of the Company, with advice from counsel, you may transfer your option to a trust if you are considered to be the sole beneficial owner (determined under Section 671 of the Code and applicable state law) while the option is held in the trust. You and the trustee must enter into transfer and other agreements required by the Company.

(b)            Domestic Relations Orders. Upon receiving written permission from the Chief Financial Officer of the Company, with advice from counsel, and provided that you and the designated transferee enter into transfer and other agreements required by the Company, you may transfer your option pursuant to the terms of a domestic relations order, official marital settlement agreement or other divorce or separation instrument as permitted by Treasury Regulation 1.421-1(b)(2) that contains the information required by the Company to effectuate the transfer. You are encouraged to discuss the proposed terms of any division of this option with the Company prior to finalizing the domestic relations order or marital settlement agreement to help ensure the required information is contained within the domestic relations order or marital settlement agreement. If this option is an Incentive Stock Option, this option may be deemed to be a Nonstatutory Stock Option as a result of such transfer.

(c)            Beneficiary Designation. Upon receiving written permission from the Chief Financial Officer of the Company, you may, by delivering written notice to the Company, in a form approved by the Company and any broker designated by the Company to handle option exercises, designate a third party who, on your death, will thereafter be entitled to exercise this option within the 12 months following the date of your death (or such shorter exercise period as may be required by Section 6 above) and receive the Common Shares or other consideration resulting from such exercise. In the absence of such a designation, your executor or administrator of your estate will be entitled to exercise this option and receive, on behalf of your estate, the Common Shares or other consideration resulting from such exercise.

ATTACHMENT I
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9.             OPTION NOT A SERVICE CONTRACT. Your option is not an employment or service contract, and nothing in your option will be deemed to create in any way whatsoever any obligation on your part to continue in the employ or service of the Company or an Affiliate, or of the Company or an Affiliate to continue your employment or service. In addition, nothing in your option will obligate the Company or an Affiliate, their respective stockholders, boards of directors, officers or employees to continue any relationship that you might have as a member of the Company’s Board or a consultant for the Company or an Affiliate. The Company and its Affiliates hereby reserve its rights to discharge and terminate your services at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in a written agreement between you and the Company or an Affiliate.

10.           WITHHOLDING OBLIGATIONS.

(a)            At the time you exercise your option, in whole or in part, and at any time thereafter as requested by the Company, you hereby agree to make adequate provision for (including by means of a “same day sale” pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board to the extent permitted by the Company), any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if any, which arise in connection with the exercise of your option.

(b)            If you fail to make the adequate provisions contemplated by Section 10(a) above, then subject to compliance with any applicable legal conditions or restrictions, the Company shall have the option in its discretion (but not the obligation) to withhold from fully vested Common Shares otherwise issuable to you upon the exercise of your option a number of whole Common Shares having a Fair Market Value, determined by the Company as of the date of exercise, not in excess of the amount of tax required to be withheld by law (or, at the Company’s option, such lower amount as may be necessary to avoid classification of your option as a liability for financial accounting purposes).

(c)            The Company assumes no responsibility for individual income taxes, penalties or interest related to grant or exercise of any option. Neither the Company nor any Affiliate makes any representation or undertaking regarding the treatment of any tax withholding in connection with the grant or exercise of any option. You should consult with your personal tax advisor regarding the tax ramifications, if any, which result from receipt of the option, the subsequent issuance, if any, of Common Shares on exercise of the option, and subsequent disposition of any such Common Shares. You acknowledge that the Company may be required to withhold federal, state and/or local taxes in connection with the exercise of the option. You may not exercise your option unless the tax withholding obligations of the Company and/or any Affiliate are satisfied. Accordingly, you may not be able to exercise your option when desired even though your option is vested, and the Company will have no obligation to issue a certificate for such Common Shares unless such obligations are satisfied.

ATTACHMENT I
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11.           SECTION 409A; TAX CONSEQUENCES. It is the Company’s intent that this option be exempt from Section 409A of the Code to the extent applicable, and that this Option Agreement be administered accordingly. You hereby agree that the Company does not have a duty to design or administer the Plan or its other compensation programs in a manner that minimizes your tax liabilities. You will not make any claim against the Company, or any of its officers, directors, employees or Affiliates, related to tax liabilities arising from your option or your other compensation. You understand that you may suffer adverse tax consequences as a result of the grant, vesting or exercise of your options or with the purchase or disposition of any Common Shares subject to the Option.

12.           NOTICES. Any notices provided for in your option or the Plan will be given in writing and will be deemed effectively given upon receipt. The Company may, in its sole discretion, decide to deliver any documents related to participation in the Plan and this option by electronic means or to request your consent to participate in the Plan by electronic means. By accepting this option, you consent to receive such documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

13.           AGREEMENT SUMMARIES. If the Company provides you (or anyone acting on your behalf) with summary or other information concerning, including or otherwise relating to your rights or benefits under this Option Agreement (including, without limitation, the option and any exercise thereof), such summary or other information shall in all cases be qualified in its entirety by the Grant Notice, this Option Agreement, the Plan and the Notice of Exercise and, unless it explicitly states otherwise and is signed by an officer of the Company, shall not constitute an amendment or other modification hereto.

14.           ACKNOWLEDGEMENTS. You understand, acknowledge, agree and hereby stipulate that: (1) you are executing this Option Agreement voluntarily and without any duress or undue influence by the Company or anyone else; (2) the option is intended to be consideration in exchange for the promises and covenants set forth in this Option Agreement; (3) you have carefully read, considered and understand all of the provisions of this Option Agreement and the Company’s policies reflected in this Option Agreement; (4) you have asked any questions needed for you to understand the terms, consequences and binding effect of this Option Agreement and you fully understand them; (5) you were provided an opportunity to seek the advice of an attorney and/or a tax professional of your choice before accepting this option; (6) the obligations and restrictions set forth in this Option Agreement are fair and reasonable and (7) your participation in the Plan confers no rights or interests other than as herein provided.

ATTACHMENT I
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ATTACHMENT II

2021 INCENTIVE AWARD PLAN

[see attached]

ATTACHMENT II

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ATTACHMENT III

FORM OF NOTICE OF EXERCISE

[see attached]

ATTACHMENT III
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FLEXENERGY GREEN SOLUTIONS, INC.

NOTICE OF EXERCISE

FlexEnergy Green Solutions, Inc.

112 Corporate Drive

Portsmouth, NH 03801

Date of Exercise: _____________, 20__

[Option Holder]

This constitutes notice under my stock option that I elect to purchase the number of shares for the price set forth below.

Type of option (check one):	Incentive	Nonstatutory
Stock option dated:
Number of shares as to which option is exercised:
Shares to be issued in name of:
Total exercise price:
Cash payment delivered herewith:

By this exercise, I agree (i) to provide such additional documents as you may require pursuant to the terms of the 2021 Incentive Award Plan (the “Plan”), (ii) to provide for the payment by me to you (in the manner designated by you) of your withholding obligation, if any, relating to the exercise of this option, and (iii) if this exercise relates to an incentive stock option, to notify you in writing within fifteen (15) days after the date of any disposition of any of the Common Shares issued upon exercise of this option that occurs within two (2) years after the date of grant of this option or within one (1) year after such Common Shares are issued upon exercise of this option.

Very truly yours,

Address:

ATTACHMENT III
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RESTRICTED STOCK AWARD AGREEMENT

This Restricted Stock Award Agreement (this “Agreement”) is made and entered into as of [DATE] (the “Grant Date”) by and between FlexEnergy Green Solutions, Inc., a Delaware corporation (the “Company”), and [l] (the “Grantee”).

WHEREAS, the Company has adopted the FlexEnergy Green Solutions, Inc. 2021 Incentive Award Plan (the “Plan”) pursuant to which awards of Restricted Stock may be granted; and

WHEREAS, the Committee has determined that it is in the best interests of the Company and its stockholders to grant the award of Restricted Stock provided for herein.

NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:

1.            Grant of Restricted Stock. Pursuant to Section 9 of the Plan, the Company hereby issues to the Grantee on the Grant Date a Restricted Stock Award consisting of, in the aggregate, [NUMBER] of Common Shares of the Company (the “Restricted Stock”), on the terms and conditions and subject to the restrictions set forth in this Agreement and the Plan. Capitalized terms that are used but not defined herein have the meaning ascribed to them in the Plan.

2.            Consideration. The grant of the Restricted Stock is made in consideration of the services to be rendered by the Grantee to the Company.

3.            Restricted Period; Vesting.

3.1            Except as otherwise provided herein, provided that the Grantee remains in Continuous Service through the applicable vesting date, the Restricted Stock will vest in accordance with the following schedule:

Vesting Date	Common Shares
[VESTING DATE]	[NUMBER OR PERCENTAGE OF SHARES THAT VEST ON THE VESTING DATE]
[VESTING DATE]	[NUMBER OR PERCENTAGE OF SHARES THAT VEST ON THE VESTING DATE]

The period over which the Restricted Stock vests is referred to as the “Restricted Period”. As used in this Agreement, “Continuous Service” means that the Grantee’s service with the Company or an Affiliate, whether as an employee, consultant or director, is not interrupted or terminated. The Grantee’s Continuous Service shall not be deemed to have terminated merely because of a change in the capacity in which the Grantee renders service to the Company or an Affiliate as an employee, consultant or director or a change in the entity for which the Grantee renders such service, provided that there is no interruption or termination of the Grantee’s Continuous Service; provided further that if any Award is subject to Section 409A of the Code, this sentence shall only be given effect to the extent consistent with Section 409A of the Code. For example, a change in status from an employee of the Company to a director of an Affiliate will not constitute an interruption of Continuous Service. The Committee or its delegate, in its sole discretion, may determine whether Continuous Service will be considered interrupted in the case of any leave of absence approved by that party, including sick leave, military leave or any other personal or family leave of absence. The Committee or its delegate, in its sole discretion, may determine whether a Company transaction, such as a sale or spin-off of a division or subsidiary that employs a Grantee, shall be deemed to result in a termination of Continuous Service for purposes of affected Awards, and such decision shall be final, conclusive and binding.

3.2            The foregoing vesting schedule notwithstanding, if the Grantee’s Continuous Service terminates for any reason at any time before all of his or her Restricted Stock has vested, the Grantee’s unvested Restricted Stock shall be automatically forfeited upon such termination of Continuous Service and neither the Company nor any Affiliate shall have any further obligations to the Grantee under this Agreement.

3.3            Unless otherwise determined by the Committee at the time of a Change in Control, a Change in Control shall have no effect on the Restricted Stock.

4.            Restrictions. Subject to any exceptions set forth in this Agreement or the Plan, during the Restricted Period, the Restricted Stock or the rights relating thereto may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Grantee. Any attempt to assign, alienate, pledge, attach, sell or otherwise transfer or encumber the Restricted Stock or the rights relating thereto during the Restricted Period shall be wholly ineffective and, if any such attempt is made, the Restricted Stock will be forfeited by the Grantee and all of the Grantee’s rights to such shares shall immediately terminate without any payment or consideration by the Company.

5.            Rights as Stockholder; Dividends.

5.1            The Grantee shall be the record owner of the Restricted Stock until the Common Shares are sold or otherwise disposed of, and shall be entitled to all of the rights of a stockholder of the Company including, without limitation, the right to vote such shares and receive all dividends or other distributions paid with respect to such shares. Notwithstanding the foregoing, any dividends or other distributions shall be subject to the same restrictions on transferability as the shares of Restricted Stock with respect to which they were paid.

5.2            The Company may issue stock certificates or evidence the Grantee’s interest by using a restricted book entry account with the Company’s transfer agent. Physical possession or custody of any stock certificates that are issued shall be retained by the Company until the time as the Restricted Stock vests.

5.3            If the Grantee forfeits any rights he or she has under this Agreement in accordance with Section 3, the Grantee shall, on the date of such forfeiture, no longer have any rights as a stockholder with respect to the Restricted Stock and shall no longer be entitled to vote or receive dividends on such shares.

6.            No Right to Continued Service. Neither the Plan nor this Agreement shall confer upon the Grantee any right to be retained in any position as an employee, consultant or director of the Company or its Affiliates. Further, nothing in the Plan or this Agreement shall be construed to limit the discretion of the Company or any of its Affiliates to terminate the Grantee’s Continuous Service at any time, with or without Cause.

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7.            Adjustments. If any change is made to the outstanding Common Shares or the capital structure of the Company, if required, the Common Shares shall be adjusted or terminated in any manner as contemplated by Section 12 of the Plan.

8.            Tax Liability and Withholding.

8.1            The Grantee shall be required to pay to the Company, and the Company shall have the right to deduct from any compensation paid to the Grantee pursuant to the Plan, the amount of any required withholding taxes in respect of the Restricted Stock and to take all such other action as the Committee deems necessary to satisfy all obligations for the payment of such withholding taxes. The Committee may permit the Grantee to satisfy any federal, state or local tax withholding obligation by any of the following means, or by a combination of such means:

(a)            tendering a cash payment.

(b)            authorizing the Company to withhold Common Shares from those Common Shares that would otherwise be issuable or deliverable to the Grantee as a result of the vesting of the Restricted Stock; provided, however, that no Common Shares shall be withheld with a value exceeding the [minimum/maximum] amount of tax required to be withheld by law.

(c)            delivering to the Company previously owned and unencumbered Common Shares.

8.2            Notwithstanding any action the Company takes with respect to any or all income tax, social insurance, payroll tax, or other tax-related withholding (“Tax-Related Items”), the ultimate liability for all Tax-Related Items is and remains the Grantee’s responsibility and the Company (a) makes no representation or undertakings regarding the treatment of any Tax-Related Items in connection with the grant or vesting of the Restricted Stock or the subsequent sale of any shares; and (b) does not commit to structure the Restricted Stock to reduce or eliminate the Grantee’s liability for Tax-Related Items.

9.            Section 83(b) Election. The Grantee may make an election under Code Section 83(b) (a “Section 83(b) Election”) with respect to the Restricted Stock. Any such election must be made within thirty (30) days after the Grant Date. If the Grantee elects to make a Section 83(b) Election, the Grantee shall provide the Company with a copy of an executed version and satisfactory evidence of the filing of the executed Section 83(b) Election with the US Internal Revenue Service. The Grantee agrees to assume full responsibility for ensuring that the Section 83(b) Election is actually and timely filed with the US Internal Revenue Service and for all tax consequences resulting from the Section 83(b) Election.

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10.            [Non-competition and Non-solicitation.

10.1            In consideration of the Restricted Stock, the Grantee agrees and covenants not to:

(a)            contribute his or her knowledge, directly or indirectly, in whole or in part, as an employee, officer, owner, manager, advisor, consultant, agent, partner, director, stockholder, volunteer, intern or in any other similar capacity to an entity engaged in the same or similar business as the Company and its Affiliates, including those engaged in the business of [l] for a period of [l] following the Grantee’s termination of Continuous Service;

(b)            directly or indirectly, solicit, hire, recruit, attempt to hire or recruit, or induce the termination of employment of any employee of the Company or its Affiliates for [l] following the Grantee’s termination of Continuous Service; or

(c)            directly or indirectly, solicit, contact (including, but not limited to, e-mail, regular mail, express mail, telephone, fax, and instant message), attempt to contact or meet with the current[, former or prospective] customers of the Company or any of its Affiliates for purposes of offering or accepting goods or services similar to or competitive with those offered by the Company or any of its Affiliates for a period of [l] following the Grantee’s termination of Continuous Service.

10.2            If the Grantee breaches any of the covenants set forth in Section 10.1:

(a)            all unvested Restricted Stock shall be immediately forfeited; and

(b)            the Grantee hereby consents and agrees that the Company shall be entitled to seek, in addition to other available remedies, a temporary or permanent injunction or other equitable relief against such breach or threatened breach from any court of competent jurisdiction, without the necessity of showing any actual damages or that money damages would not afford an adequate remedy, and without the necessity of posting any bond or other security. The aforementioned equitable relief shall be in addition to, not in lieu of, legal remedies, monetary damages or other available forms of relief.]

11.            Compliance with Law. The issuance and transfer of Common Shares shall be subject to compliance by the Company and the Grantee with all applicable requirements of federal and state securities laws and with all applicable requirements of any stock exchange on which the Common Shares may be listed. No Common Shares shall be issued or transferred unless and until any then applicable requirements of state and federal laws and regulatory agencies have been fully complied with to the satisfaction of the Company and its counsel. The Grantee understands that the Company is under no obligation to register the Common Shares with the Securities and Exchange Commission, any state securities commission or any stock exchange to effect such compliance.

12.            Legends. A legend may be placed on any certificate(s) or other document(s) delivered to the Grantee and may be noted in the book entry account with the Company’s transfer agent indicating restrictions on transferability of the shares of Restricted Stock pursuant to this Agreement or any other restrictions that the Committee may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any applicable federal or state securities laws or any stock exchange on which the Common Shares are then listed or quoted.

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13.            Notices. Any notice required to be delivered to the Company under this Agreement shall be in writing and addressed to the Chief Financial Officer of the Company at the Company’s principal corporate offices. Any notice required to be delivered to the Grantee under this Agreement shall be in writing and addressed to the Grantee at the Grantee’s address as shown in the records of the Company. Either party may designate another address in writing (or by such other method approved by the Company) from time to time.

14.            Governing Law. This Agreement will be construed and interpreted in accordance with the laws of the State of Delaware without regard to conflict of law principles.

15.            Interpretation. Any dispute regarding the interpretation of this Agreement shall be submitted by the Grantee or the Company to the Committee for review. The resolution of such dispute by the Committee shall be final and binding on the Grantee and the Company.

16.            Restricted Stock Subject to Plan. This Agreement is subject to the Plan as approved by the Company’s stockholders. The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.

17.            Successors and Assigns. The Company may assign any of its rights under this Agreement. This Agreement will be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement will be binding upon the Grantee and the Grantee’s beneficiaries, executors, administrators and the person(s) to whom the Restricted Stock may be transferred by will or the laws of descent or distribution.

18.            Severability. The invalidity or unenforceability of any provision of the Plan or this Agreement shall not affect the validity or enforceability of any other provision of the Plan or this Agreement, and each provision of the Plan and this Agreement shall be severable and enforceable to the extent permitted by law.

19.            Discretionary Nature of Plan. The Plan is discretionary and may be amended, cancelled or terminated by the Company at any time, in its discretion. The grant of the Restricted Stock in this Agreement does not create any contractual right or other right to receive any Restricted Stock or other Awards in the future. Future Awards, if any, will be at the sole discretion of the Company. Any amendment, modification, or termination of the Plan shall not constitute a change or impairment of the terms and conditions of the Grantee’s employment with the Company.

20.            Amendment. The Committee has the right to amend, alter, suspend, discontinue or cancel the Restricted Stock, prospectively or retroactively; provided, that, no such amendment shall adversely affect the Grantee’s material rights under this Agreement without the Grantee’s consent.

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21.            No Impact on Other Benefits. The value of the Grantee’s Restricted Stock is not part of his or her normal or expected compensation for purposes of calculating any severance, retirement, welfare, insurance or similar employee benefit.

22.            Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. Counterpart signature pages to this Agreement transmitted by facsimile transmission, by electronic mail in portable document format (.pdf), or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing an original signature.

23.            Acceptance. The Grantee hereby acknowledges receipt of a copy of the Plan and this Agreement. The Grantee has read and understands the terms and provisions thereof, and accepts the Restricted Stock subject to all of the terms and conditions of the Plan and this Agreement. The Grantee acknowledges that there may be adverse tax consequences upon the grant or vesting of the Restricted Stock or disposition of the underlying shares and that the Grantee has been advised to consult a tax advisor prior to such grant, vesting or disposition.

[signature page follows]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

FLEXENERGY GREEN SOLUTIONS, INC.

By:

Name: Mark Schnepel

Title: Chief Executive Officer

[EMPLOYEE NAME]

By:

Name:

[Signature Page to Restricted Stock Award Agreement] 

FLEXENERGY GREEN SOLUTIONS, INC. 2021 INCENTIVE AWARD PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

THIS RESTRICTED STOCK UNIT AWARD AGREEMENT (the “Agreement”), is made and entered into effective [●], 2021 (the “Grant Date”), by and between FlexEnergy Green Solutions, Inc., a Delaware corporation (the “Company”), and [●] (the “Participant”).

RECITALS

WHEREAS, the Company has adopted the FlexEnergy Green Solutions, Inc. 2021 Incentive Award Plan, as amended (the “Plan”), a copy of which has been made available to the Participant;

WHEREAS, pursuant to Section 9 of the Plan, the Company desires to grant to the Participant an award of Restricted Stock Units (the “Units”) set forth in Section 2(a) below, subject to certain restrictions set forth in this Agreement, effective as of the Grant Date; and

WHEREAS, the Board or the Committee has duly made all determinations necessary or appropriate to the grants hereunder.

NOW, THEREFORE, in consideration of the premises and the mutual covenants set forth in this Agreement and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows:

AGREEMENT

1.            Definitions. Any capitalized term used in this Agreement that is not defined in this Agreement will have the same meaning given to it in the Plan.

2.            Grant of Restricted Stock Units; Vesting.

(a)           Subject to the terms and conditions of the Plan, and the additional terms and conditions set forth in this Agreement, the Company hereby grants to the Participant an award of [●] time-vesting Units (the “Award”). Each Unit is a notional amount that represents one unvested Common Share and constitutes the right, subject to the terms and conditions of the Plan and this Agreement, to distribution of a Common Share if and when the Unit vests.

(b)           Provided that the Participant is providing Continuous Service to the Company as of each applicable vesting date, one third (1/3) of the Units granted under this Award will vest on each of the first three (3) anniversaries of the Grant Date (each individually, a “Vesting Date”). In the event that the Participant’s employment or engagement with the Company or its Affiliates is terminated for any reason before the Vesting Date, except as otherwise determined by the Committee, all unvested Units shall be canceled and forfeited. The vested Units shall be settled and become payable in Common Shares in accordance with Section 3. As used in this Agreement, “Continuous Service” means that Participant’s service with the Company or an Affiliate, whether as an employee, consultant or director, is not interrupted or terminated. Participant’s Continuous Service shall not be deemed to have terminated merely because of a change in the capacity in which Participant renders service to the Company or an Affiliate as an employee, consultant or director or a change in the entity for which Participant renders such service, provided that there is no interruption or termination of Participant’s Continuous Service; provided further that if this Agreement (and the corresponding Award) is subject to Section 409A of the Code, this sentence shall only be given effect to the extent consistent with Section 409A of the Code. For example, a change in status from an employee of the Company to a director of an Affiliate will not constitute an interruption of Continuous Service. The Committee or its delegate, in its sole discretion, may determine whether Continuous Service will be considered interrupted in the case of any leave of absence approved by that party, including sick leave, military leave or any other personal or family leave of absence. The Committee or its delegate, in its sole discretion, may determine whether a Company transaction, such as a sale or spin-off of a division or subsidiary that employs Participant, shall be deemed to result in a termination of Continuous Service for purposes of this Agreement, and such decision shall be final, conclusive and binding.

(c)          [In the event of a Change in Control (as defined in the Plan), all of the Participant’s unvested Units granted under this Award shall vest immediately in full upon the effective date of the Change in Control, subject to the Participant’s provision of Continuous Service with the Company on such date. The vested Units shall be settled and become payable in Common Shares in accordance with Section 3.]¹

3.           Timing; Form of Payment. Once a Unit vests, the Participant will be entitled to receive a Common Share in its place or, in the Committee’s discretion, an equivalent amount in cash (or partly in cash and partly in Common Shares). Delivery of the Common Shares or cash, as applicable, will be made as soon as administratively feasible following the vesting of the associated Unit, and in no event later than the [sixtieth (60^th)] day following the Vesting Date. Any Common Shares paid will be credited to an account established for the benefit of the Participant in book entry with the Company’s transfer agent. The Participant will have full legal and beneficial ownership of the Common Shares at that time.

4.            Certificates; Transferability. Units awarded under Section 2 will be credited to a book entry account maintained by the Company on behalf of the Participant, and such book entry will appropriately record the terms, conditions and restrictions applicable to such Units. Neither unvested Units, nor the right to vote such Units, may be sold, assigned, transferred, exchanged, pledged, hypothecated or otherwise encumbered.

5.            Rights as a Stockholder. Unless and until a Unit has vested and the Common Share underlying it has been distributed to the Participant, the Participant will not be entitled to vote in respect of that Unit or that Common Share. Except as provided in this Section 5 or as otherwise required by law, the Participant shall not have any rights as a stockholder with respect to any Common Shares covered by the Units granted hereunder prior to the date on which he or she is recorded as the holder of those Common Shares on the records of the Company. [Notwithstanding any other part of this Agreement, any quarterly or other regular, periodic dividends or distributions (as determined by the Committee) paid on Common Shares will accrue with respect to (i) unvested Units, and (ii) Units that are vested but unpaid pursuant to Section 3, and in each case will be subject to the same forfeitures provisions (if any), and be paid out at the same time or time(s), as the underlying Units on which such dividends or other distributions have accrued]².

6.            Withholding. No later than the date as of which an amount first becomes includible as income of the Participant for any income and/or employment tax purposes with respect to any Unit, the Participant shall pay to the Company, or make arrangements satisfactory to the Company regarding the payment of, all federal, state, local and foreign income and/or employment taxes that are required by applicable law to be withheld with respect to such amount. The Participant authorizes the Company to withhold from his or her compensation to satisfy any income and/or employment tax withholding obligations in connection with this Award. If the Participant is no longer employed by the Company at the time any applicable taxes are due and must be remitted by the Company, the Participant agrees to pay applicable taxes to the Company, and the Company may delay distribution of the Common Shares underlying this Award until proper payment of such taxes has been made by the Participant. The Participant may satisfy such obligations under this Section 6 by any method authorized under this Agreement and the Plan.

7.            Plan. The Participant hereby acknowledges receipt of a copy of the Plan. Notwithstanding any other provision of this Agreement, the Units are granted pursuant to the Plan, as in effect on the date of the Agreement, and are subject to the terms and conditions of the Plan, as the same may be amended from time to time; provided, however, that except as otherwise provided by the Plan, no amendment to either the Plan or this Agreement will deprive the Participant, without the Participant’s consent, of any Units or of the Participant’s rights under this Agreement. The interpretation and construction by the Committee of the Plan, this Agreement, the Units, and such rules and regulations as may be adopted by the Committee for the purpose of administering the Plan, will be final and binding upon the Participant.

¹       Update for each Participant.

²       Update for each Participant, as determined by the Committee.

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8.            No Employment Rights Or Rights to Provide Service. No provision of the Plan or this Agreement will give the Participant any right to continue in the employ of or service to the Company or any of its Affiliates, create any inference as to the length of employment or engagement of the Participant, affect the right of the Company or its Affiliates to terminate the employment or engagement of the Participant, with or without Cause, or give the Participant any right to participate in any employee welfare or benefit plan or other program of the Company or any of its Affiliates.

9.            Changes in Company’s Capital or Organizational Structure. The existence of the Units shall not affect in any way the right or authority of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company, or any issue of preferred Company shares ahead of or affecting the Common Shares or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other act or proceeding, whether of a similar character or otherwise.

10.          Delays. In accordance with the terms of the Plan, the Company shall have the right to suspend or delay any time period prescribed in this Agreement or in the Plan for any action if the Committee shall determine that the action may constitute a violation of any law or result in any liability under any law to the Company, an Affiliate or a stockholder in the Company until such time as the action required or permitted will not constitute a violation of law or result in liability to the Company, an Affiliate or a stockholder of the Company.

11.          Reserved.

12.          Entire Agreement. This Agreement, together with the Plan and any other agreements incorporated herein by reference, constitutes the entire obligation of the parties with respect to the subject matter of this Agreement and supersedes any prior written or oral expressions of intent or understanding with respect to such subject matter (provided, that this Agreement shall not supersede any written consulting agreement, written employment agreement, or other written agreement between the Company and the Participant, including, but not limited to, any written restrictive covenant agreements). The Participant represents that, in executing this Agreement, he or she does not rely and has not relied upon any representation or statement not set forth herein made by the Company or its Affiliates with regard to the subject matter, bases or effect of this Agreement or otherwise.

13.          Amendment. This Agreement may be amended as provided in the Plan.

14.          Waiver; Cumulative Rights. The failure or delay of either party to require performance by the other party of any provision of this Agreement will not affect its right to require performance of such provision unless and until such performance has been waived in writing. Each right under this Agreement is cumulative and may be exercised in part or in whole from time to time.

15.          Counterparts. This Agreement may be signed in two counterparts, each of which will be an original, but both of which will constitute one and the same instrument. Counterpart signature pages to this Agreement transmitted by facsimile transmission, by electronic mail in portable document format (.pdf), or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing an original signature.

16.          Notices. Any notices required or permitted under this Agreement must be in writing and may be delivered personally or by mail, postage prepaid, addressed to (a) the Company at the address of its principal executive office, Attention: Chief Financial Officer and (b) the Participant at the Participant’s address as shown on the Company’s payroll records, or to such other address as the Participant, by notice to the Company, may designate in writing from time to time.

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17.          Headings. The headings in this Agreement are for reference purposes only and will not affect the meaning or interpretation of this Agreement.

18.          Severability. If any provision of this Agreement is for any reason held to be invalid or unenforceable, such invalidity or unenforceability will not affect any other provision of this Agreement, and this Agreement will be construed as if such invalid or unenforceable provision were omitted.

19.          No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any party.

20.          Successors and Assigns. This Agreement will inure to the benefit of and be binding upon each successor and assign of the Company. All obligations imposed upon the Participant or a representative, and all rights granted to the Company under this Agreement, will be binding upon the Participant’s or the representative’s heirs, legal representatives and successors.

21.         Tax Consequences.     The Participant agrees to determine and be responsible for all tax consequences to the Participant with respect to the Units.

22.          Code Section 409A Compliance. This Agreement and delivery of Units and Common Shares under this Agreement are intended to be exempt from or to comply with Section 409A of the Code (“Section 409A”) and shall be administered and construed in accordance with such intent. Notwithstanding any provision of this Agreement, to the extent that the Committee determines that any portion of the Units granted under this Agreement is subject to Section 409A and fails to comply with the requirements of Section 409A, notwithstanding anything to the contrary contained in the Plan or in this Agreement, the Committee reserves the right to amend, restructure, terminate or replace such portion of the Units in order to cause such portion of the Units to either not be subject to Section 409A or to comply with the applicable provisions of such section. In furtherance, and not in limitation, of the foregoing: (a) in no event may the Participant designate, directly or indirectly, the calendar year of any payment to be made hereunder; and (b) notwithstanding any other provision of this Agreement to the contrary, a termination of employment hereunder shall mean and be interpreted consistent with a “separation from service” within the meaning of Section 409A with respect to any payment hereunder that constitute a “deferral of compensation” under Section 409A that becomes due on account of such separation from service. Notwithstanding any provision of the Plan to the contrary, in no event shall the Company be liable to the Participant on account of this Agreement’s failure to (a) qualify for favorable U.S. or foreign tax treatment or (b) avoid adverse tax treatment under U.S. or foreign law, including, without limitation, Section 409A.

[signature page follows]

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IN WITNESS WHEREOF, the Company and the Participant have executed this Agreement as of the date first written above.

FLEXENERGY GREEN SOLUTIONS, INC.: PARTICIPANT:

By:
	Mark Schnepel, Chief Executive Officer	[●]

[Signature Page to Restricted Stock Unit Award Agreement]

EX-10.2

Exhibit 10.2

INDEMNITY AGREEMENT

THIS INDEMNITY AGREEMENT (this “Agreement”) is made as of       [●]      , 2021, by and between FlexEnergy Green Solutions, Inc., a Delaware corporation (the “Company”), and [●] (“Indemnitee”).

RECITALS

The Company believes that, in order to attract and retain highly qualified persons to serve as directors or in other capacities, including as officers, it must provide those persons with adequate protection through indemnification against the risk of claims and actions against them arising out of their services to and activities on behalf of the Company. The Certificate of Incorporation (the “Charter”) and the Bylaws (the “Bylaws”) of the Company require indemnification of the officers and directors of the Company. Indemnitee may also be entitled to indemnification pursuant to applicable provisions of the Delaware General Corporation Law (“DGCL”). The Charter, Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the Board of Directors of the Company (the “Board”), officers and other persons with respect to indemnification, hold harmless, exoneration, advancement and reimbursement rights;

The Company desires and has requested Indemnitee to serve as a [director] [officer] of the Company and, in order to induce the Indemnitee to serve as a [director] [officer] of the Company, the Company is willing to grant the Indemnitee the indemnification provided for herein. Indemnitee is willing to so serve on the basis that such indemnification be provided.

The parties by this Agreement desire to set forth their agreement regarding indemnification and the advancement of expenses. In consideration of the mutual covenants and agreements set forth below, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties, intending to be legally bound, hereby agree as follows:

TERMS AND CONDITIONS

1.SERVICES TO THE COMPANY. In consideration of the Company’s covenants and obligations hereunder, Indemnitee will serve or continue to serve as an officer or director of the Company, as applicable, for so long as Indemnitee is duly elected or appointed or retained or until Indemnitee tenders Indemnitee’s resignation or until Indemnitee is removed. The foregoing notwithstanding, this Agreement shall continue in full force and effect after Indemnitee has ceased to serve as a director or officer of the Company, as provided in Section 14. This Agreement, however, shall not impose any obligation on Indemnitee or the Company to continue Indemnitee’s service to the Company beyond any period otherwise required by law or by other agreements or commitments of the parties, if any.

2.DEFINITIONS. As used in this Agreement:

(a)References to “agent” mean any person who is or was a director, officer or employee of the Company or a Subsidiary of the Company or other person authorized by the Company to act for the Company, to include a person serving in the capacity as a director, officer, employee, fiduciary or other official of another corporation, partnership, limited liability company, joint venture, trust or other enterprise at the request of, for the convenience of, or to represent the interests of the Company or a Subsidiary of the Company.

(b)(i) A “change in control” shall be deemed to occur upon any of the following events:

(I)any “person” as that term is used in Sections 13(d) and 14(d) of the Exchange Act (other than (A) the Company or any of its Affiliates, (B) any trustee or other fiduciary holding securities under any employee benefit plan of the Company or any of its Affiliates, (C) an underwriter temporarily holding securities pursuant to an offering of those securities, (D) an entity owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of shares of stock of the Company, (E) FlexEnergy Power Solutions, LLC, or (F) any direct or indirect “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act) of more than 10% or more of the total voting power of the equity securities of FlexEnergy Power Solutions, LLC as of January 1, 2021) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, by way of merger, consolidation, recapitalization, reorganization or otherwise, of 50% or more of the total voting power of the then outstanding voting securities of the Company;

(II)the consummation of a merger or consolidation of the Company with any other entity, other than a merger or consolidation that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 50% of the total voting power represented by the voting securities of the Company or the surviving entity outstanding immediately after the merger or consolidation; or

(III)the consummation of a plan of complete liquidation of the Company or the sale or disposition by the Company of all or substantially all the Company’s assets.

Additionally, the issuance of securities by the Company in a financing transaction approved by the Board shall not be deemed or deemed to cause or result in a “change in control”.

(ii) For purposes of Section 2(b)(i), the following terms have the following meanings:

(IV)“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.

(V)“Affiliate” means (i) any person or entity that directly or indirectly controls, is controlled by or is under common control with the Company and/or (ii) to the extent provided by the Committee, any person or entity in which the Company has a significant interest. The term “control” (including, with correlative meaning, the terms “controlled by” and “under common control with”), as applied to any person or entity, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that person or entity, whether through the ownership of voting or other securities, by contract or otherwise.

(c)“Corporate Status” describes the status of a person who is or was a director, officer, trustee, general partner, manager, managing member, fiduciary, employee or agent of the Company or of any other Enterprise (as defined below) which that person is or was serving at the request of the Company.

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(d)“Delaware Court” means the Court of Chancery of the State of Delaware.

(e)“Enterprise” means the Company and any other corporation, constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger to which the Company (or any of its wholly owned subsidiaries) is a party, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, trustee, general partner, managing member, fiduciary, employee or agent.

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

(g)“Expenses” shall include, without limitation, all direct and indirect costs, fees and expenses of any type or nature whatsoever, including, without limitation, all reasonable attorneys’ fees and costs, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, fees of private investigators and professional advisors, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, fax transmission charges, secretarial services and all other disbursements, obligations or expenses in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, settlement or appeal of, or otherwise participating in, a Proceeding (as defined below), including reasonable compensation for time spent by Indemnitee for which he or she is not otherwise compensated by the Company or any third party. Expenses also shall include Expenses incurred in connection with any appeal resulting from any Proceeding (as defined below), including without limitation the principal, premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent. “Expenses,” however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.

(h)References to “fines” includes any excise tax assessed on Indemnitee with respect to any employee benefit plan; references to “serving at the request of the Company” includes any service as a director, officer, employee, agent or fiduciary of the Company which imposes duties on, or involves services by, the director, officer, employee, agent or fiduciary with respect to an employee benefit plan, its participants or beneficiaries; and if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan, Indemnitee shall be deemed to have acted in a manner “not opposed to the best interests of the Company” as referred to in this Agreement.

(i)“Independent Counsel” means a law firm or a member of a law firm with significant experience in matters of corporation law and that neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either party (other than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements); or (ii) any other party to the Proceeding (as defined below) giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.

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(j)The term “Person” has the meaning set forth in Sections 13(d) and 14(d) of the Exchange Act as in effect on the date hereof; provided, however, that “Person” shall exclude: (i) the Company; (ii) any Subsidiaries (as defined below) of the Company; (iii) any employment benefit plan of the Company or of a Subsidiary (as defined below) of the Company or of any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company; and (iv) any trustee or other fiduciary holding securities under an employee benefit plan of the Company or of a Subsidiary (as defined below) of the Company or of a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.

(k)The term “Proceeding” includes any threatened, pending or completed action, suit, arbitration, mediation, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil (including intentional or unintentional tort claims), criminal, administrative or investigative or related nature, in which Indemnitee was, is, will or might be involved as a party or otherwise by reason of the fact that Indemnitee is or was a director or officer of the Company by reason of any action taken by Indemnitee (or a failure to take action) or of any action (or failure to act) on Indemnitee’s part while acting pursuant to his or her Corporate Status, in each case whether or not serving in such capacity at the time any liability or expense is incurred for which indemnification, reimbursement, or advancement of expenses can be provided under this Agreement.

(l)The term “Subsidiary,” with respect to the Company or any Person, means any corporation, limited liability company, partnership, joint venture, trust or other entity of which a majority of the voting power of the voting equity securities or equity interest is owned, directly or indirectly, by the Company or that Person, as applicable.

3.INDEMNITY IN THIRD-PARTY PROCEEDINGS. To the fullest extent permitted by applicable law, the Company shall indemnify, hold harmless and exonerate Indemnitee in accordance with the provisions of this Section 3 if Indemnitee was, is, or is threatened to be made, a party to or a participant (as a witness, deponent or otherwise) in any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor by reason of Indemnitee’s Corporate Status. Pursuant to this Section 3, Indemnitee shall be indemnified, held harmless and exonerated against all Expenses, judgments, liabilities, fines, penalties and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of those Expenses, judgments, liabilities, fines, penalties and amounts paid in settlement) actually, and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with the Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal Proceeding, had no reasonable cause to believe that Indemnitee’s conduct was unlawful.

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4.INDEMNITY IN PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY. To the fullest extent permitted by applicable law, the Company shall indemnify, hold harmless and exonerate Indemnitee in accordance with the provisions of this Section 4 if Indemnitee was, is, or is threatened to be made, a party to or a participant (as a witness, deponent or otherwise) in any Proceeding by or in the right of the Company to procure a judgment in its favor by reason of Indemnitee’s Corporate Status. Pursuant to this Section 4, Indemnitee shall be indemnified, held harmless and exonerated against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with the Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company. No indemnification, hold harmless or exoneration for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee has been finally adjudged by a court to be liable to the Company, unless and only to the extent that any court in which the Proceeding was brought or the Delaware Court determines upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification, to be held harmless or to exoneration.

5.INDEMNIFICATION FOR EXPENSES OF A PARTY WHO IS WHOLLY OR PARTLY SUCCESSFUL. Notwithstanding any other provisions of this Agreement, to the extent that Indemnitee was or is, by reason of Indemnitee’s Corporate Status, a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company shall, to the fullest extent permitted by applicable law, indemnify, hold harmless and exonerate Indemnitee against all Expenses actually and reasonably incurred by Indemnitee in connection therewith. If Indemnitee is not wholly successful in the Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in the Proceeding, the Company shall, to the fullest extent permitted by applicable law, indemnify, hold harmless and exonerate Indemnitee against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with each successfully resolved claim, issue or matter. If Indemnitee is not wholly successful in the Proceeding, the Company also shall, to the fullest extent permitted by applicable law, indemnify, hold harmless and exonerate Indemnitee against all Expenses reasonably incurred in connection with a claim, issue or matter related to any claim, issue, or matter on which Indemnitee was successful. For purposes of this Section 5 and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to the claim, issue or matter.

6.INDEMNIFICATION FOR EXPENSES OF A WITNESS. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of Indemnitee’s Corporate Status, a witness or deponent in any Proceeding (including, without limitation, any Proceeding to which Indemnitee was or is not a party or threatened to be made a party), Indemnitee shall, to the fullest extent permitted by applicable law, be indemnified, held harmless and exonerated against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith.

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7.ADDITIONAL INDEMNIFICATION, HOLD HARMLESS AND EXONERATION RIGHTS.  Notwithstanding any limitation in Section 3, Section 4 or Section 5, the Company shall, to the fullest extent permitted by applicable law, indemnify, hold harmless and exonerate Indemnitee if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) against all Expenses, judgments, liabilities, fines, penalties and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of those Expenses, judgments, liabilities, fines, penalties and amounts paid in settlement) actually and reasonably incurred by Indemnitee in connection with the Proceeding.

8.CONTRIBUTION IN THE EVENT OF JOINT LIABILITY.

(a)To the fullest extent permissible under applicable law, if the indemnification, hold harmless and/or exoneration rights provided for in this Agreement are unavailable to Indemnitee in whole or in part for any reason whatsoever, the Company, in lieu of indemnifying, holding harmless or exonerating Indemnitee, shall pay, in the first instance, the entire amount incurred by Indemnitee, whether for judgments, liabilities, fines, penalties, amounts paid or to be paid in settlement and/or for Expenses, in connection with any Proceeding without requiring Indemnitee to contribute to the payment, and the Company hereby waives and relinquishes any right of contribution it may have at any time against Indemnitee.

(b)The Company shall not enter into any settlement of any Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in the Proceeding) unless the settlement provides for a full and final release of all claims asserted against Indemnitee.

(c)The Company shall fully indemnify, hold harmless and exonerate Indemnitee from any claims for contribution which may be brought by officers, directors or employees of the Company other than Indemnitee who may be jointly liable with Indemnitee.

9.EXCLUSIONS. Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnification, advance expenses, hold harmless or exoneration payment in connection with any claim made against Indemnitee:

(a)for which payment has actually been received by or on behalf of Indemnitee under any insurance policy or other indemnity or advancement provision, except with respect to any excess beyond the amount actually received under any insurance policy, contract, agreement, other indemnity or advancement provision or otherwise;

(b)for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act (or any successor rule) or similar provisions of state statutory law or common law; or

(c)in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the indemnification is expressly required to be made by law, (ii) the Proceeding was authorized by the Board of Directors in advance of its initiation, (iii) the indemnification is provided by the Company, in its sole discretion, pursuant to the powers vested in the Company under the DGCL or any other applicable law or (iv) the indemnification is in connection with any Proceeding by Indemnitee to enforce his or her rights under this Agreement in which the Indemnitee is successful on the merits or otherwise, but only to the extent of such success. Indemnitee shall seek payments or advances from the Company only to the extent that the payments or advances are unavailable from any insurance policy of the Company covering Indemnitee.

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10.ADVANCES OF EXPENSES; DEFENSE OF CLAIM.

(a)To the fullest extent permitted by the DGCL, the Company shall pay the Expenses incurred by Indemnitee (or reasonably expected by Indemnitee to be incurred by Indemnitee within three months) in connection with any Proceeding within 30 days after the receipt by the Company of a statement or statements requesting advances from time to time, prior to the final disposition of any Proceeding. Advances shall, to the fullest extent permitted by law, be unsecured and interest free. Advances shall, to the fullest extent permitted by law, be made without regard to Indemnitee’s ability to repay the Expenses and without regard to Indemnitee’s ultimate entitlement to be indemnified, held harmless or exonerated under the other provisions of this Agreement. Advances shall include any and all reasonable Expenses incurred pursuing a Proceeding to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Company to support the advances claimed. To the fullest extent required by applicable law, payments of Expenses in advance of the final disposition of the Proceeding shall be made only upon the Company’s receipt of an undertaking, by or on behalf of Indemnitee, to repay the advanced amounts to the extent that it is ultimately determined that Indemnitee is not entitled to be indemnified, held harmless or exonerated by the Company under the provisions of this Agreement, the Charter, the Bylaws, applicable law or otherwise. This Section 10(a) shall not apply to any claim made by Indemnitee for which an indemnification, hold harmless or exoneration payment is excluded pursuant to Section 9.

(b)The Company will be entitled to participate in the Proceeding at its own expense.

(c)The Company shall not settle any action, claim or Proceeding (in whole or in part) that would impose any Expense, judgment, liability, fine, penalty or limitation on Indemnitee without Indemnitee’s prior written consent.

11.PROCEDURE FOR NOTIFICATION AND APPLICATION FOR INDEMNIFICATION.

(a)Promptly after receipt by Indemnitee of notice of the commencement of any Proceeding, Indemnitee shall, if a claim in respect thereof is to be made against the Company hereunder, notify the Company in writing of the commencement thereof. The failure to promptly notify the Company of the commencement of the Proceeding, or of Indemnitee’s request for indemnification, will not relieve the Company from any liability that it may have to Indemnitee hereunder, except to the extent the Company is actually and materially prejudiced in its defense of the action, suit or proceeding as a result of the failure. To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request therefor including any documentation and information reasonably available to Indemnitee and reasonably necessary to enable the Company to determine whether and to what extent Indemnitee is entitled to indemnification.

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(b)With respect to any Proceeding of which the Company is notified as provided in this Agreement, the Company shall, subject to the last two sentences of this paragraph, be entitled to assume the defense of the Proceeding, with counsel reasonably acceptable to Indemnitee, upon the delivery to Indemnitee of written notice of its election to do so. After delivery of the notice, approval of that counsel by Indemnitee and the retention of that counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any subsequently-incurred fees of separate counsel engaged by Indemnitee with respect to the same Proceeding unless the employment of separate counsel by Indemnitee has been previously authorized in writing by the Company. Notwithstanding the foregoing, if Indemnitee, based on the advice of his or her counsel, reasonably concludes (with written notice being given to the Company setting forth the basis for the conclusion) that, in the conduct of the defense, there is or is reasonably likely to be a conflict of interest or position between the Company and Indemnitee with respect to a significant issue, then the Company will not be entitled, without the written consent of Indemnitee, to assume the defense. In addition, the Company will not be entitled, without the written consent of Indemnitee, to assume the defense of any claim brought by or in the right of the Company.

(c)To the fullest extent permitted by the DGCL, the Company’s assumption of the defense of a Proceeding in accordance with Section 11(b) will constitute an irrevocable acknowledgement by the Company that any loss and liability suffered by Indemnitee and expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement by or for the account of Indemnitee incurred in connection therewith are indemnifiable by the Company under this Agreement.

(d)The determination whether to grant Indemnitee’s indemnification request shall be made promptly and in any event within 60 days following the Company’s receipt of a request for indemnification in accordance with Section 11(a). If the Company determines that Indemnitee is entitled to indemnification or, as contemplated by Section 11(c), the Company has acknowledged the entitlement, the Company will make payment to Indemnitee of the indemnifiable amount within 30 days. If the Company is not deemed to have acknowledged the entitlement or the Company’s determination of whether to grant Indemnitee’s indemnification request has not been made within the 60 day period, the requisite determination of entitlement to indemnification shall, subject to Section 9, nonetheless be deemed to have been made and Indemnitee shall be entitled to indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of indemnification under the DGCL.

(e)If (i) the Company determines that Indemnitee is not entitled to indemnification under this Agreement, (ii) the Company denies a request for indemnification, in whole or in part, or fails to respond or make a determination of entitlement to indemnification within 60 days following receipt of a request for indemnification as described above, (iii) payment of indemnification is not made within the 30 days following a determination that Indemnitee is entitled to indemnification, (iv) advancement of Expenses is not timely made in accordance with Section 10, or (v) the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or proceeding designed to deny, or to recover from, the Indemnitee the benefits provided or intended to be provided to Indemnitee hereunder, Indemnitee shall be entitled to an adjudication in the Delaware Court of his or her entitlement to indemnification or advancement of Expenses. Indemnitee’s Expenses incurred in connection with successfully establishing Indemnitee’s right to indemnification or advancement of Expenses, in whole or in part, in any such proceeding or otherwise shall also be indemnified by the Company to the fullest extent permitted by the DGCL.

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(f)Indemnitee shall be presumed to be entitled to indemnification and advancement of Expenses under this Agreement upon submission of a request therefor in accordance with Section 10 or Section 11, as the case may be. The Company shall have the burden of proof in overcoming the presumption, and the presumption shall be used as a basis for a determination of entitlement to indemnification and advancement of Expenses unless the Company overcomes the presumption by clear and convincing evidence.

(g)If there is a change in control of the Company, then with respect to all matters thereafter arising concerning the rights of Indemnitee to indemnification and advancement of expenses under this Agreement, any other agreement or the Company’s Charter or Bylaws now or hereafter in effect, the Company shall seek legal advice only from Independent Counsel selected by Indemnitee and approved by the Company (which approval shall not be unreasonably withheld). In addition, upon written request by Indemnitee for indemnification pursuant to Section 11(a), a determination, if required by the DGCL, with respect to Indemnitee’s entitlement thereto shall be made by the Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee. The Company shall pay the reasonable fees of the Independent Counsel referred to above.

12.SECURITY. Notwithstanding anything herein to the contrary, to the extent requested by Indemnitee and approved by the Board, the Company may at any time and from time to time provide security to Indemnitee for the Company’s obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral. Any such security, once provided to Indemnitee, may not be revoked or released without the prior written consent of Indemnitee.

13.NON-EXCLUSIVITY; SURVIVAL OF RIGHTS; INSURANCE; SUBROGATION.

(a)The rights of Indemnitee as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Charter, the Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any Proceeding (regardless of when the Proceeding is first threatened, commenced or completed) or claim, issue or matter therein arising out of, or related to, any action taken or omitted by Indemnitee in Indemnitee’s Corporate Status prior to the amendment, alteration or repeal. To the extent that a change in applicable law, whether by statute or judicial decision, permits greater indemnification, hold harmless or exoneration rights or advancement of Expenses than would be afforded currently under the Charter, the Bylaws or this Agreement, it is the intent of the parties that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by the change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

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(b)The DGCL, the Charter and the Bylaws permit the Company to purchase and maintain insurance or furnish similar protection or make other arrangements including, but not limited to, providing a trust fund, letter of credit, or surety bond (“Indemnification Arrangements”) on behalf of Indemnitee against any liability asserted against Indemnitee or incurred by or on behalf of Indemnitee or in the capacity as a director, officer, employee or agent of the Company, or arising out of Indemnitee’s status as such, whether or not the Company would have the power to indemnify Indemnitee against that liability under the provisions of this Agreement or under the DGCL, as it may then be in effect. The purchase, establishment, and maintenance of any Indemnification Arrangement shall not in any way limit or affect the rights and obligations of the Company or of Indemnitee under this Agreement except as expressly provided herein, and the execution and delivery of this Agreement by the Company and Indemnitee shall not in any way limit or affect the rights and obligations of the Company or the other party or parties thereto under any Indemnification Arrangement.

(c)To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, trustees, partners, managers, managing members, fiduciaries, employees, or agents of the Company or of any other Enterprise that the person serves at the request of the Company, Indemnitee shall be covered by the policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any director, officer, trustee, partner, managers, managing member, fiduciary, employee or agent under the policy or policies. If, at the time the Company receives notice from any source of a Proceeding as to which Indemnitee is a party or a participant (as a witness, deponent or otherwise), the Company has director and officer liability insurance in effect, the Company shall give prompt notice of the Proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause the insurers to pay, on behalf of Indemnitee, all amounts payable as a result of the Proceeding in accordance with the terms of the policies.

(d)In the event of any payment under this Agreement, the Company, to the fullest extent permitted by law, shall be subrogated to the extent of the payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure those rights, including execution of any documents necessary to enable the Company to bring suit to enforce those rights.

(e)The Company’s obligation to indemnify, hold harmless, exonerate or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, trustee, partner, manager, managing member, fiduciary, employee or agent of any other Enterprise shall be reduced by any amount Indemnitee has actually received as indemnification, hold harmless or exoneration payments or advancement of expenses from the Enterprise. Notwithstanding any other provision of this Agreement to the contrary, (i) Indemnitee shall have no obligation to reduce, offset, allocate, pursue or apportion any indemnification, hold harmless, exoneration, advancement, contribution or insurance coverage among multiple parties possessing those duties to Indemnitee prior to the Company’s satisfaction and performance of all its obligations under this Agreement, and (ii) the Company shall perform fully its obligations under this Agreement without regard to whether Indemnitee holds, may pursue or has pursued any indemnification, advancement, hold harmless, exoneration, contribution or insurance coverage rights against any person or entity other than the Company.

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14.DURATION OF AGREEMENT. All agreements and obligations of the Company contained herein shall continue during the period Indemnitee serves as a director or officer of the Company or as a director, officer, trustee, partner, manager, managing member, fiduciary, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other Enterprise which Indemnitee serves at the request of the Company and shall continue thereafter if Indemnitee is then threatened to be made, a party to or participant in any Proceeding by reason of Indemnitee’s Corporate Status until the conclusion of such Proceeding, whether or not Indemnitee is acting in any such capacity at the time any liability or expense is incurred for which indemnification or advancement can be provided under this Agreement.

15.SEVERABILITY. If any provision or provisions of this Agreement are held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing the provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) the provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section, paragraph, sentence or clause of this Agreement containing the provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

16.ENFORCEMENT AND BINDING EFFECT.

(a)The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director, officer or key employee of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director, officer or key employee of the Company.

(b)Without limiting any of the rights of Indemnitee under the Charter or Bylaws as they may be amended from time to time, this Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties with respect to the subject matter hereof.

(c)The indemnification, hold harmless, exoneration and advancement of expenses rights provided by or granted pursuant to this Agreement shall be binding upon and be enforceable by the parties and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, officer, employee or agent of the Company or a director, officer, trustee, general partner, manager, managing member, fiduciary, employee or agent of any other Enterprise at the Company’s request, and shall inure to the benefit of Indemnitee and Indemnitee’s spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.

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(d)The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no succession had taken place.

(e)The Company and Indemnitee acknowledge that a monetary remedy for breach of this Agreement, at some later date, may be inadequate, impracticable and difficult of proof, and further agree that a breach may cause Indemnitee irreparable harm. Accordingly, Indemnitee may, to the fullest extent permitted by law, enforce this Agreement by seeking, among other things, injunctive relief and/or specific performance hereof, without any necessity of showing actual damage or irreparable harm and that by seeking injunctive relief and/or specific performance, Indemnitee shall not be precluded from seeking or obtaining any other relief to which Indemnitee may be entitled. Indemnitee shall, to the fullest extent permitted by law, be entitled to specific performance and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, without the necessity of posting bonds or other undertaking in connection therewith. The Company acknowledges that in the absence of a waiver, a bond or undertaking may be required of Indemnitee by a court of competent jurisdiction. The Company hereby waives any such requirement of such a bond or undertaking to the fullest extent permitted by law.

17.MODIFICATION AND WAIVER. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the Company and Indemnitee. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver.

18.NOTICES. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given (i) if delivered by hand and receipted for by the party to whom the notice or other communication shall have been directed, (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed or (iii) when delivered by email, solely if delivery is confirmed:

(a)If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee provides in writing to the Company.

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(b)If to the Company, to:

FlexEnergy Green Solutions, Inc.
112 Corporate Drive
Portsmouth, NH 03801
Attention: Mark G. Schnepel
Email: mark.schnepel@flexenergy.com

With a copy, which shall not constitute notice, to

Fennemore Craig, P.C.
2394 East Camelback Road, Suite 600
Phoenix, AZ 85016-3429
Attention: Aaron Cain
Email: ACain@fennemorelaw.com

or to any other address as may have been furnished to Indemnitee in writing by the Company.

19.APPLICABLE LAW AND CONSENT TO JURISDICTION. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. To the fullest extent permitted by law, the Company and Indemnitee hereby irrevocably and unconditionally: (a) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Delaware Court and not in any other state or federal court in the United States of America or any court in any other country; (b) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement; (c) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court; and (d) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum, or is subject (in whole or in part) to a jury trial. To the fullest extent permitted by law, the parties hereby agree that the mailing of process and other papers in connection with any such action or proceeding in the manner provided by Section 18 or in any other manner permitted by law, shall be valid and sufficient service thereof.

20.IDENTICAL COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Delivery of an executed counterpart of a signature page to this Agreement by electronic transmission in portable document format (.pdf) shall be effective as delivery of a manually executed counterpart of this Agreement. Only one counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.

21.MISCELLANEOUS. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

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22.ADDITIONAL ACTS. If for the validation of any of the provisions in this Agreement any act, resolution, approval or other procedure is required to the fullest extent permitted by law, the Company undertakes to cause the act, resolution, approval or other procedure to be affected or adopted in a manner that will enable the Company to fulfill its obligations under this Agreement.

23.MAINTENANCE OF INSURANCE. The Company shall use commercially reasonable efforts to obtain and maintain in effect during the entire period for which the Company is obligated to indemnify the Indemnitee under this Agreement, one or more policies of insurance with reputable insurance companies to provide the officers/directors of the Company with coverage for losses from wrongful acts and omissions and to ensure the Company’s performance of its indemnification obligations under this Agreement. Indemnitee shall be covered by the policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director or officer under the policy or policies. In all such insurance policies, Indemnitee shall be named as an insured in such a manner as to provide Indemnitee with the same rights and benefits as are accorded to the most favorably insured of the Company’s directors and officers.

[Signature Page Follows]

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IN WITNESS WHEREOF, the parties have caused this Indemnity Agreement to be signed as of the day and year first above written.

FLEXENERGY GREEN SOLUTIONS, INC.
By:
	Name:
	Title:
INDEMNITEE
By:
	Name:
	Title:
	Address:
	E-Mail:

[Signature Page to Indemnity Agreement]

EX-10.3

Exhibit 10.3

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this “Agreement”) is entered into on [l], 2021, by and among FlexEnergy Green Solutions, Inc., a Delaware corporation (the “Company”), FlexEnergy Power Solutions, LLC, a Delaware limited liability company (“FPS”), RNS Flex, LLC, a Delaware limited liability company (“RNS”) and TRF Platform Holdings, LLC, a Delaware limited liability company (“TRF”). FPS, TRF and RNS are referred to collectively as “Investors” and each, individually, as an “Investor.”

RECITALS

WHEREAS, the Company and FPS are parties to a Contribution Agreement, dated as of date hereof (the “Contribution Agreement”), pursuant to which FPS is contributing to the Company all of its equity interests in FlexEnergy, Inc., a Delaware corporation, and FlexEnergy Leasing Power & Service LLC, a Delaware limited liability company, in exchange for the issuance of [l] shares (the “Shares”) of Common Stock of the Company;

WHEREAS, the Investors are parties to one or more SAFE (Simple Agreement for Future Equity) instruments (“SAFE Documentation”), dated as of August 16, 2021, pursuant to which Investors have provided FPS with an aggregate of up to $3,000,000 in funding, in exchange for which FPS has agreed to transfer to Investors an aggregate of up to [l] of the Shares if the Company completes an IPO (as defined below) on the terms set forth in the SAFE Documentation; and

WHEREAS, in connection with the consummation of the transactions contemplated by the Contribution Agreement and the SAFE Documentation, and pursuant to the terms of the Contribution Agreement and the SAFE Documentation, the parties desire to enter into this Agreement in order to grant certain registration rights to Investors as set forth below.

NOW, THEREFORE, in consideration of the foregoing and the mutual and dependent covenants hereinafter set forth, the parties agree as follows:

1.Defined Terms. As used in this Agreement, the following terms have the following meanings:

“Affiliate” of a Person means any other Person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, that Person. The term “control” (including the terms “controlling”, “controlled by” and “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise.

“Agreement” has the meaning set forth in the preamble.

“Board” means the board of directors (or any successor governing body) of the Company.

“Commission” means the Securities and Exchange Commission or any other federal agency administering the Securities Act and the Exchange Act at the time.

“Common Stock” means the common stock, par value $0.0001 per share, of the Company and any other shares of stock issued or issuable with respect thereto (whether by way of a stock dividend or stock split or in exchange for or upon conversion of such shares or otherwise in connection with a combination of shares, distribution, recapitalization, merger, consolidation, other corporate reorganization or other similar event with respect to the Common Stock).

“Company” has the meaning set forth in the preamble and includes the Company’s successors by merger, acquisition, reorganization or otherwise.

“Contribution Agreement” has the meaning set forth in the recitals.

“Controlling Person” has the meaning set forth in Section 5(g).

“Demand Registration” has the meaning set forth in Section 2(a).

“DTCDRS” has the meaning set forth in Section 5(r).

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Governmental Authority” means any federal, state, local or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authority have the force of law), or any arbitrator, court or tribunal of competent jurisdiction.

“Initial Registrable Securities” has the meaning set forth in Section 5(d).

“Initial Registration Statement” has the meaning set forth in Section 5d).

“Inspectors” has the meaning set forth in Section 5(h).

“Investors” has the meaning set forth in the preamble.

“IPO” means an initial underwritten offering of the Common Stock pursuant to an effective Registration Statement filed under the Securities Act (other than a registration or other registration solely relating to an offering or sale to employees or directors of the Company pursuant to a Registration Statement on Form S-4 (or similar form that relates to a transaction subject to Rule 145 under the Securities Act or any successor rule thereto).

“New Registration Statement” has the meaning set forth in Section 5(d).

“Person” means an individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated organization, trust, association or other entity.

“Piggyback Registration” has the meaning set forth in Section 3(a).

“Piggyback Registration Statement” has the meaning set forth in Section 3(a).

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“Piggyback Shelf Registration Statement” has the meaning set forth in Section 3(a).

“Piggyback Shelf Takedown” has the meaning set forth in Section 3(a).

“Prospectus” means the prospectus or prospectuses included in any Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective Registration Statement in reliance on Rule 430A under the Securities Act or any successor rule thereto), as amended or supplemented by any prospectus supplement, including any Shelf Supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by the Registration Statement and by all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by reference in the prospectus or prospectuses.

“Records” has the meaning set forth in Section 5(h).

“Registrable Securities” means (a) the Shares, and (b) any shares of Common Stock issued or issuable with respect to the Shares by way of a stock dividend or stock split or in exchange for or upon conversion of such shares or otherwise in connection with a combination of shares, distribution, recapitalization, merger, consolidation, other reorganization or other similar event with respect to the Common Stock (it being understood that, for purposes of this Agreement, a Person shall be deemed to be a holder of Registrable Securities whenever that Person has the right to then acquire or obtain from the Company any Registrable Securities, whether or not the acquisition has actually been effected). As to any particular Registrable Securities, those securities shall cease to be Registrable Securities when (i) the Commission has declared a Registration Statement covering the securities effective and the securities have been disposed of pursuant to the effective Registration Statement, (ii) the securities are sold under circumstances in which all of the applicable conditions of Rule 144 under the Securities Act are met, (iii) the securities become eligible for sale pursuant to Rule 144 without volume or manner-of-sale restrictions and without the requirement for the Company to be in compliance with the current public information requirement under Rule 144(c)(1) or iii) the securities have ceased to be outstanding.

“Registration Date” means the date on which the Company becomes subject to Section 13(a) or Section 15(d) of the Exchange Act.

“Registration Statement” means any registration statement of the Company, including the Prospectus, amendments and supplements (including Shelf Supplements) to the registration statement, including post-effective amendments, all exhibits and all material incorporated by reference in the registration statement.

“Rule 144” means Rule 144 under the Securities Act or any successor rule thereto.

“SAFE Documentation” has the meaning set forth in the Recitals.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Selling Expenses” means all underwriting discounts, selling commissions and stock transfer taxes applicable to the sale of Registrable Securities, and fees and disbursements of counsel for any holder of Registrable Securities, except for the reasonable fees and disbursements of counsel for the holders of Registrable Securities required to be paid by the Company pursuant to Section 6.

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“Shares” means the shares of Common Stock issued or issuable to FPS pursuant to the Contribution Agreement, including the shares of Common Stock transferable by FPS to RNS and TRF pursuant to the SAFE Documentation.

“Shelf Registration” has the meaning set forth in Section 2(b).

“Shelf Registration Statement” has the meaning set forth in Section 2(b).

“Shelf Supplement” has the meaning set forth in Section 2(c).

“Shelf Takedown” has the meaning set forth in Section 2(c).

“Shelf Takedown Notice” has the meaning set forth in Section 2(c).

“Short-Form Registration” has the meaning set forth in Section 2(a).

2.Demand Registration.

(a)After an IPO, the Company shall use reasonable efforts to qualify and remain qualified to register the offer and sale of securities under the Securities Act pursuant to a Registration Statement on Form S-3 or any successor form thereto. Once the Company has qualified for the use of a Registration Statement on Form S-3 or any successor form thereto, each Investor shall have the right to request an unlimited number of registrations under the Securities Act of all or any portion of the Registrable Securities pursuant to a Registration Statement on Form S-3 or any similar short-form Registration Statement (each, a “Short-Form Registration” and, collectively with each Shelf Registration (as defined below), a “Demand Registration”). Each request for a Short-Form Registration shall specify the number of Registrable Securities requested to be included in the Short-Form Registration. The Company shall prepare and file with (or confidentially submit to) the Commission a Registration Statement on Form S-3 or any successor form thereto covering all of the Registrable Securities that Investors have requested to be included in the Short-Form Registration within 30 days after the date on which the initial request is given and shall use reasonable efforts to cause the Registration Statement to be declared effective by the Commission as soon as practicable thereafter.

(b)Once the Company has qualified for the use of a Registration Statement on Form S-3 or the then appropriate form for an offering to be made on a delayed or continuous basis pursuant to Rule 415 under the Securities Act or any successor rule thereto (a “Shelf Registration Statement”), each Investor shall have the right to request registration under the Securities Act of all or any portion of that Investor’s Registrable Securities for an offering on a delayed or continuous basis pursuant to Rule 415 under the Securities Act or any successor rule thereto (a “Shelf Registration”). Each request for a Shelf Registration shall specify the number of Registrable Securities requested to be included in the Shelf Registration. The Company shall prepare and file with (or confidentially submit to) the Commission a Shelf Registration Statement covering all of the Registrable Securities that an Investor has requested to be included in the Shelf Registration within 30 days after the date on which the initial request is given and shall use reasonable efforts to cause the Shelf Registration Statement to be declared effective by the Commission as soon as practicable thereafter.

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(c)The Company may postpone for up to 90 days the filing or effectiveness of a Registration Statement for a Demand Registration or a supplement for the purpose of effecting an offering pursuant to Rule 415 under the Securities Act or any successor rule thereto (a “Shelf Takedown”) if the Board determines in its reasonable good faith judgment that the Demand Registration or Shelf Takedown would (i) materially interfere with a significant acquisition, corporate organization, financing, securities offering or other similar transaction involving the Company; (ii) require premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential; or (iii) render the Company unable to comply with requirements under the Securities Act or Exchange Act; provided, that if Investors are entitled to withdraw the request and, if the request for a Demand Registration is withdrawn, the Demand Registration shall not count as one of the permitted Demand Registrations hereunder and the Company shall pay all registration expenses in connection with the registration. The Company may delay a Demand Registration or Shelf Takedown hereunder only once in any period of 12 consecutive months.

(d)If the Investor who requested the Demand Registration or Shelf Takedown elects to distribute the Registrable Securities covered by its request in an underwritten offering, it shall so advise the Company as a part of its request made pursuant to Section 2(a), Section 2(b) or Section 2(c). The electing Investor shall select the investment banking firm or firms to act as the managing underwriter or underwriters in connection with the offering; provided, that the selection shall be subject to the consent of the Company, which consent shall not be unreasonably withheld or delayed.

(e)The Company shall not include in any Demand Registration or Shelf Takedown any securities that are not Registrable Securities without the prior written consent of the holders of a majority of the Registrable Securities initially requesting the Demand Registration or Shelf Takedown, which consent shall not be unreasonably withheld or delayed. If a Demand Registration or Shelf Takedown involves an underwritten offering and the managing underwriter of the requested Demand Registration or Shelf Takedown advises the Company and Investors in writing that in its reasonable and good faith opinion the number of shares of Common Stock proposed to be included in the Demand Registration or Shelf Takedown, including all Registrable Securities and all other shares of Common Stock proposed to be included in the underwritten offering, exceeds the number of shares of Common Stock that can be sold in the underwritten offering and/or the number of shares of Common Stock proposed to be included in the Demand Registration or Shelf Takedown would adversely affect the price per share of the Common Stock proposed to be sold in the underwritten offering, the Company shall include in the Demand Registration or Shelf Takedown (i) first, the shares of Common Stock that Investors propose to sell (pro rata in accordance with the number of shares of Common Stock proposed to be sold by each), and (ii) second, the shares of Common Stock proposed to be included therein by any other Persons (including shares of Common Stock to be sold for the account of the Company and/or other holders of Common Stock) allocated among those Persons in any manner they agree. If the managing underwriter determines that less than all of the Registrable Securities proposed to be sold can be included in the offering, then the Registrable Securities that are included in the offering shall be allocated pro rata among the respective holders (other than Investors) on the basis of the number of Registrable Securities owned by each such holder.

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3.Piggyback Registration.

(a)Whenever the Company proposes to register the offer and sale of any shares of its Common Stock under the Securities Act (other than a registration (i) pursuant to a Registration Statement on Form S-8 (or other registration solely relating to an offering or sale to employees or directors of the Company pursuant to any employee stock plan or other employee benefit arrangement), (ii) pursuant to a Registration Statement on Form S-4 (or similar form that relates to a transaction subject to Rule 145 under the Securities Act or any successor rule thereto), or (iii) in connection with any dividend or distribution reinvestment or similar plan), whether for its own account or for the account of one or more stockholders of the Company and the form of Registration Statement (a “Piggyback Registration Statement”) to be used may be used for any registration of Registrable Securities (a “Piggyback Registration”), the Company shall give prompt written notice (in any event no later than 30 days prior to the filing of the Registration Statement) to the Investors of its intention to effect the registration and, subject to Section 3(b) and Section 3(c), shall include in the registration all Registrable Securities with respect to which the Company has received written requests for inclusion from Investors within 15 days after the Company’s notice has been given to the Investors. The Company may postpone or withdraw the filing or the effectiveness of a Piggyback Registration at any time in its sole discretion. A Piggyback Registration shall not be considered a Demand Registration for purposes of Section 2. If any Piggyback Registration Statement pursuant to which holders of Registrable Securities have registered the offer and sale of Registrable Securities is a Registration Statement on Form S-3 or the then appropriate form for an offering to be made on a delayed or continuous basis pursuant to Rule 415 under the Securities Act or any successor rule thereto (a “Piggyback Shelf Registration Statement”), Investors shall have the right, but not the obligation, to be notified of and to participate in any offering under the Piggyback Shelf Registration Statement (a “Piggyback Shelf Takedown”).

(b)If a Piggyback Registration or Piggyback Shelf Takedown is initiated as a primary underwritten offering on behalf of the Company and the managing underwriter advises the Company and Investors (if an Investor has elected to include Registrable Securities in the Piggyback Registration or Piggyback Shelf Takedown) in writing that in its reasonable and good faith opinion the number of shares of Common Stock proposed to be included in the registration or takedown, including all Registrable Securities and all other shares of Common Stock proposed to be included in the underwritten offering, exceeds the number of shares of Common Stock that can be sold in the offering and/or that the number of shares of Common Stock proposed to be included in the registration or takedown would adversely affect the price per share of the Common Stock to be sold in the offering, the Company shall include in the registration or takedown (i) first, the shares of Common Stock that the Company proposes to sell; (ii) second, the shares of Common Stock requested to be included therein by Investors allocated pro rata among Investors on the basis of the number of Registrable Securities owned by each Investor or in such manner as they may otherwise agree; and (iii) third, the shares of Common Stock requested to be included therein by holders of Common Stock other than Investors, allocated among those holders in any manner they agree.

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(c) If a Piggyback Registration or Piggyback Shelf Takedown is initiated as an underwritten offering on behalf of a holder of Common Stock other than Investors, and the managing underwriter advises the Company in writing that in its reasonable and good faith opinion the number of shares of Common Stock proposed to be included in the registration or takedown, including all Registrable Securities and all other shares of Common Stock proposed to be included in the underwritten offering, exceeds the number of shares of Common Stock that can be sold in the offering and/or that the number of shares of Common Stock proposed to be included in the registration or takedown would adversely affect the price per share of the Common Stock to be sold in the offering, the Company shall include in the registration or takedown (i) first, the shares of Common Stock requested to be included therein by the holder(s) requesting the registration or takedown and by the holders of Registrable Securities, allocated pro rata among those holders on the basis of the number of shares of Common Stock other than the Registrable Securities (on a fully diluted, as converted basis) and the number of Registrable Securities, as applicable, owned by all of those holders or in any manner they otherwise agree; and (ii) second, the shares of Common Stock requested to be included therein by other holders of Common Stock, allocated among those holders in any manner they agree.

(d)If any Piggyback Registration or Piggyback Shelf Takedown is initiated as a primary underwritten offering on behalf of the Company, the Company shall select the investment banking firm or firms to act as the managing underwriter or underwriters in connection with the offering.

4.Lock-up Agreement. Upon the request of the managing underwriter in any offering subject to this Agreement, Investors shall not, without the prior written consent of the managing underwriter, during the period commencing on the effective date of the registration and ending on the date specified by the managing underwriter (not to exceed 180 days in the case of an IPO or 90 days in the case of any registration under the Securities Act other than an IPO), (a) offer, pledge, sell, contract to sell, grant any option or contract to purchase, purchase any option or contract to sell, hedge the beneficial ownership of or otherwise dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into, exercisable for or exchangeable for shares of Common Stock held immediately before the effectiveness of the Registration Statement for the offering, or (b) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the securities, whether the transaction described in clause (a) or (b) above is to be settled by delivery of Common Stock or other securities, in cash or otherwise. The foregoing provisions of this Section 4 shall not apply to sales of Registrable Securities to be included in the offering pursuant to Section 2(a), Section 2(b) Section 2(c) or Section 3(a), and shall be applicable to Investors only if all officers and directors of the Company are subject to the same restrictions. Investors shall execute and deliver any other agreements reasonably requested by the Company or the managing underwriter that are consistent with the foregoing or which are necessary to give further effect thereto. Notwithstanding anything to the contrary contained in this Section 4, Investors shall be released from any lock-up agreement entered into pursuant to this Section 4 if and to the extent that the managing underwriter or the Company permit any discretionary waiver or termination of the restrictions of any lock-up agreement pertaining to any officer or director.

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5.Registration Procedures. If and whenever an Investor requests that the offer and sale of any Registrable Securities be registered under the Securities Act or any Registrable Securities be distributed in a Shelf Takedown pursuant to the provisions of this Agreement, the Company shall use reasonable efforts to effect the registration of the offer and sale of Registrable Securities under the Securities Act in accordance with the intended method of disposition thereof, and pursuant thereto the Company shall as soon as reasonably practicable and as applicable:

(a)subject to Section 2(a) and Section 2(b), prepare and file with the Commission a Registration Statement covering the Registrable Securities and use reasonable efforts to cause the Registration Statement to be declared effective;

(b)in the case of a Short-Form Registration, prepare and file with the Commission any amendments, post-effective amendments and supplements to the Registration Statement and the Prospectus used in connection therewith necessary to keep the Registration Statement effective for a period of not less than 120 days, or if earlier, until all of the Registrable Securities have been disposed of and to comply with the provisions of the Securities Act with respect to the disposition of the Registrable Securities in accordance with the intended methods of disposition set forth in the Registration Statement;

(c)in the case of a Shelf Registration, prepare and file with the Commission any amendments, post-effective amendments and supplements, including Shelf Supplements, to the Registration Statement and the Prospectus used in connection therewith necessary to keep the Registration Statement effective and to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities subject thereto for a period ending on the earlier of (i) three months after the effective date of the Registration Statement and (ii) the date on which all the Registrable Securities subject thereto have been sold pursuant to the Registration Statement;

(d)If (i) the Company has filed a Registration Statement (the “Initial Registration Statement”) with the Commission that covers Registrable Securities (the “Initial Registrable Securities”), (ii) pursuant to Rule 415(a)(5) under the Securities Act or any successor rule thereto, the Initial Registration Statement may no longer be used for offers and sales of any of the Initial Registrable Securities, and (iii) any of the Initial Registrable Securities are Registrable Securities at the time that (ii) above occurs, the Company shall prepare and file with the Commission within the time limits required by Rule 415 under the Securities Act or any successor rule thereto a new Registration Statement covering any Initial Registrable Securities that have not ceased to be Registrable Securities for an offering to be made on a delayed on continuous basis pursuant to Rule 415 under the Securities Act or any successor rule thereto (a “New Registration Statement”) and shall use reasonable efforts to cause the New Registration Statement to be declared effective by the Commission as soon as practicable thereafter; provided, that, if at the time it is required to file a New Registration Statement with the Commission pursuant to this Section 5(d) the Company is not qualified to use a Registration Statement on Form S-3 or the then appropriate form for an offering to be made on a delayed or continuous basis pursuant to Rule 415 under the Securities Act or any successor rule thereto, the Company shall not be required to file a New Registration Statement with the Commission;

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(e)within a reasonable time before filing the Registration Statement, Prospectus or amendments or supplements thereto with the Commission, furnish to one counsel selected by Investors copies of the documents proposed to be filed, which documents shall be subject to the review, comment and approval of that counsel;

(f)notify Investors, promptly after the Company receives notice thereof, of the time when the Registration Statement has been declared effective or a supplement, including a Shelf Supplement, to any Prospectus forming a part of the Registration Statement has been filed with the Commission;

(g)furnish to Investors a number of copies of the Prospectus included in the Registration Statement (including each preliminary Prospectus) and any supplement thereto, including a Shelf Supplement (in each case including all exhibits and documents incorporated by reference therein) and any other documents Investors reasonably request in order to facilitate the disposition of the Registrable Securities owned by Investors;

(h)use reasonable efforts to register or qualify the Registrable Securities under any other securities or “blue sky” laws of any jurisdictions an Investor reasonably requests and do any and all other acts and things that are reasonably necessary or advisable to enable Investors to consummate the disposition in those jurisdictions of the Registrable Securities owned by Investors; provided, that the Company shall not be required to qualify generally to do business, subject itself to general taxation or consent to general service of process in any jurisdiction where it would not otherwise be required to do so but for this Section 5(f);

(i)notify Investors, at any time when a Prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event that would cause the Prospectus included in the Registration Statement to contain an untrue statement of a material fact or omit any fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading, and, at the request of Investors, the Company shall prepare a supplement or amendment to the Prospectus so that, as thereafter delivered to the purchasers of Registrable Securities, the Prospectus shall not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;

(j)make available for inspection by Investors, any underwriter participating in any disposition pursuant to the Registration Statement and any attorney, accountant or other agent retained by any Investor or any underwriter (collectively, the “Inspectors”), all financial and other records, pertinent corporate documents and properties of the Company (collectively, the “Records”), and cause the Company’s officers, directors and employees to supply all information reasonably requested by any Inspector in connection with the Registration Statement;

(k)provide a transfer agent and registrar (which may be the same entity) for all Registrable Securities not later than the effective date of registration;

(l)use reasonable efforts to cause the Registrable Securities to be listed on each securities exchange on which the Common Stock is then listed or, if the Common Stock is not then listed, on a national securities exchange selected by Investors;

(m)in connection with an underwritten offering, enter into customary agreements (including underwriting and lock-up agreements in customary form) and take other customary actions reasonably requested by Investors or the managing underwriter of the offering in order to expedite or facilitate the disposition of the Registrable Securities (including, without limitation, making appropriate officers of the Company available to participate in “road show” and other customary marketing activities (including one-on-one meetings with prospective purchasers of the Registrable Securities));

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(n)otherwise use reasonable efforts to comply with all applicable rules and regulations of the Commission and make available to its stockholders an earnings statement (in a form that satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 under the Securities Act or any successor rule thereto) no later than 30 days after the end of the 12-month period beginning with the first day of the Company’s first full fiscal quarter after the effective date of the Registration Statement, which earnings statement shall cover the 12-month period, and which requirement will be deemed to be satisfied if the Company timely files complete and accurate information on Forms 10-K, 10-Q and 8-K under the Exchange Act and otherwise complies with Rule 158 under the Securities Act or any successor rule thereto; and

(o)furnish to Investors and each underwriter, if any, with (i) a written legal opinion of the Company’s outside counsel, dated the closing date of the offering, in form and substance as is customarily given in opinions of the Company’s counsel to underwriters in underwritten registered offerings; and (ii) on the date of the applicable Prospectus, on the effective date of any post-effective amendment to the applicable Registration Statement and at the closing of the offering, dated the respective dates of delivery thereof, a “comfort” letter signed by the Company’s independent certified public accountants in form and substance as is customarily given in accountants’ letters to underwriters in underwritten registered offerings;

(p)              without limiting Section 5(f), use reasonable efforts to cause the Registrable Securities to be registered with or approved by any other governmental agencies or authorities necessary by virtue of the business and operations of the Company to enable Investors to consummate the disposition of the Registrable Securities in accordance with its intended method of distribution thereof;

(q)notify Investors promptly of any request by the Commission for the amending or supplementing of the Registration Statement or Prospectus or for additional information;

(r)advise Investors, promptly after it receives notice or obtain knowledge thereof, of the issuance of any stop order by the Commission suspending the effectiveness of the Registration Statement or the initiation or threatening of any proceeding for that purpose and promptly use reasonable efforts to prevent the issuance of any stop order or to obtain its withdrawal at the earliest possible moment if a stop order is issued;

(s)permit Investors, if in its sole and exclusive judgment, an Investor might be deemed to be an underwriter or a “controlling person” (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) (a “Controlling Person”) of the Company, to participate in the preparation of the Registration Statement and to require the insertion therein of language, furnished to the Company in writing, which in the reasonable judgment of Investors and their counsel should be included;

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(t)cooperate with Investors to facilitate the timely preparation and delivery of certificates representing the Registrable Securities to be sold pursuant to the Registration Statement or Rule 144 free of any restrictive legends and representing any number of shares of Common Stock and registered in any names Investors reasonably request a reasonable period of time prior to sales of Registrable Securities pursuant to the Registration Statement or Rule 144; provided, that the Company may satisfy its obligations hereunder without issuing physical stock certificates through the use of The Depository Trust Company’s Direct Registration System (the “DTCDRS”);

(u)not later than the effective date of the Registration Statement, provide a CUSIP number for all Registrable Securities and provide the applicable transfer agent with printed certificates for the Registrable Securities that are in a form eligible for deposit with The Depository Trust Company; provided, that the Company may satisfy its obligations hereunder without issuing physical stock certificates through the use of the DTCDRS;

(v)take no direct or indirect action prohibited by Regulation M under the Exchange Act; provided, that, to the extent that any prohibition is applicable to the Company, the Company will take all reasonable action to make the prohibition inapplicable; and

(w)otherwise use reasonable efforts to take all other steps necessary to effect the registration of the Registrable Securities contemplated hereby.

6.Expenses. All expenses (other than Selling Expenses) incurred by the Company in complying with its obligations pursuant to this Agreement and in connection with the registration and disposition of Registrable Securities shall be paid by the Company, including, without limitation, all (i) registration and filing fees (including, without limitation, any fees relating to filings required to be made with, or the listing of any Registrable Securities on, any securities exchange or over-the-counter trading market on which the Registrable Securities are listed or quoted); (ii) underwriting expenses (other than fees, commissions or discounts); (iii) expenses of any audits incident to or required by the registration; (iv) fees and expenses of complying with securities and “blue sky” laws (including, without limitation, fees and disbursements of counsel for the Company in connection with “blue sky” qualifications or exemptions of the Registrable Securities); (v) printing expenses; (vi) messenger, telephone and delivery expenses; (vii) fees and expenses of the Company’s counsel and accountants; (viii) Financial Industry Regulatory Authority, Inc. filing fees (if any); and (ix) reasonable fees and expenses of one counsel for the Investors. In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties) and the expense of any annual audits. All Selling Expenses relating to the offer and sale of Registrable Securities registered under the Securities Act pursuant to this Agreement shall be borne and paid by the Investors pro rata on the basis of the number of Registrable Securities registered on their behalf.

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7.Indemnification.

(a)The Company shall indemnify and hold harmless, to the fullest extent permitted by law, Investors, Investors’ officers, directors, managers, members, partners, stockholders and Affiliates, each underwriter, broker or any other Person acting on behalf of an Investor and each other Controlling Person, if any, who controls any of the foregoing Persons, against all losses, claims, actions, damages, liabilities and expenses, joint or several, to which any of the foregoing Persons may become subject under the Securities Act or otherwise, insofar as losses, claims, actions, damages, liabilities or expenses arise out of or are based upon any untrue or alleged untrue statement of a material fact contained in any Registration Statement, Prospectus, preliminary Prospectus, free writing prospectus (as defined in Rule 405 under the Securities Act or any successor rule thereto) or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of a Prospectus, preliminary Prospectus or free writing prospectus, in light of the circumstances under which they were made) not misleading; and shall reimburse those Persons for any legal or other expenses reasonably incurred by any of them in connection with investigating or defending any loss, claim, action, damage or liability, except insofar as the same are caused by or contained in any information furnished in writing to the Company by each Investor expressly for use therein or by that Investor’s failure to deliver a copy of the Registration Statement, Prospectus, preliminary Prospectus, free writing prospectus (as defined in Rule 405 under the Securities Act or any successor rule thereto) or any amendments or supplements thereto (if the same was required by applicable law to be so delivered) after the Company has furnished that Investor with a sufficient number of copies of the same prior to any written confirmation of the sale of Registrable Securities. This indemnity shall be in addition to any liability the Company may otherwise have. The indemnification provided for under this Section 7(a) shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or Controlling Person of the indemnified party and shall survive the transfer of the Registrable Securities by Investors pursuant to Section 15.

(b)In connection with any registration in which an Investor is participating, each participating Investor shall furnish to the Company in writing any information the Company reasonably requests for use in connection with the Registration Statement or Prospectus and, to the extent permitted by law, shall indemnify and hold harmless, the Company, each director of the Company, each officer of the Company who signs the Registration Statement, each underwriter, broker or other Person acting on behalf of the holders of Registrable Securities and each Controlling Person who controls any of the foregoing Persons against any losses, claims, actions, damages, liabilities or expenses resulting from any untrue or alleged untrue statement of material fact contained in the Registration Statement, Prospectus, preliminary Prospectus, free writing prospectus (as defined in Rule 405 under the Securities Act or any successor rule thereto) or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of a Prospectus, preliminary Prospectus or free writing prospectus, in light of the circumstances under which they were made) not misleading, but only to the extent that the untrue statement or omission is contained in any information so furnished in writing by Investors; provided, that the obligation to indemnify shall be several, not joint and several, for each Investor and shall not exceed an amount equal to the net proceeds (after underwriting fees, commissions or discounts) actually received by that Investor from the sale of Registrable Securities pursuant to the Registration Statement. This indemnity shall be in addition to any liability the selling Investor may otherwise have.

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(c)Promptly after receipt by an indemnified party of notice of the commencement of any action involving a claim referred to in this Section 7, the indemnified party shall, if a claim in respect thereof is made against an indemnifying party, give written notice to the latter of the commencement of the action. The failure of any indemnified party to notify an indemnifying party of the action shall not (unless the failure has a material adverse effect on the indemnifying party) relieve the indemnifying party from any liability in respect of that action that it may have to the indemnified party hereunder. If case an action is brought against an indemnified party, the indemnifying party shall be entitled to participate in and to assume the defense of the claims in the action that are subject or potentially subject to indemnification hereunder, jointly with any other indemnifying party similarly notified to the extent that it may wish, with counsel reasonably satisfactory to the indemnified party, and after written notice from the indemnifying party to the indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be responsible for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof; provided, that, if (i) any indemnified party reasonably concludes that there may be one or more legal or equitable defenses available to the indemnified party that are additional to or conflict with those available to the indemnifying party, or that the claim or litigation involves or could have an effect upon matters beyond the scope of the indemnity provided hereunder, or (ii) the action seeks an injunction or equitable relief against any indemnified party or involves actual or alleged criminal activity, the indemnifying party shall not have the right to assume the defense of the action on behalf of the indemnified party without the indemnified party’s prior written consent (but, without the consent, shall have the right to participate therein with counsel of its choice) and the indemnifying party shall reimburse the indemnified party and any Controlling Person of the indemnified party for that portion of the fees and expenses of any counsel retained by the indemnified party that is reasonably related to the matters covered by the indemnity provided hereunder. If the indemnifying party is not entitled to, or elects not to, assume the defense of a claim, it shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by the indemnifying party with respect to the claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between the indemnified party and any other of the indemnified parties with respect to the claim. In that instance, the conflicting indemnified parties shall have a right to retain one separate counsel, chosen by the indemnified parties, at the expense of the indemnifying party.

(d)If the indemnification provided for hereunder is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, claim, damage, liability or action referred to herein, then the indemnifying party, in lieu of indemnifying the indemnified party hereunder, shall contribute to the amounts paid or payable by the indemnified party as a result of the loss, claim, damage, liability or action in a proportion appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions that resulted in the loss, claim, damage, liability or action as well as any other relevant equitable considerations; provided, that the maximum amount of liability in respect of the contribution shall be limited, in the case of each holder of Registrable Securities, to an amount equal to the net proceeds (after underwriting fees, commissions or discounts) actually received by such the seller from the sale of Registrable Securities effected pursuant to the registration. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party, whether the violation of the Securities Act or any other similar federal or state securities laws or rule or regulation promulgated thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any applicable registration, qualification or compliance was perpetrated by the indemnifying party or the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent the statement or omission. The parties acknowledge that it would not be just and equitable if contribution pursuant hereto were determined by pro rata allocation or by any other method or allocation that does not take account of the equitable considerations referred to herein. No Person guilty or liable of fraudulent misrepresentation within the meaning of Section 11(f) of the Securities Act shall be entitled to contribution from any Person who was not guilty of fraudulent misrepresentation.

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8.Participation in Underwritten Registrations. No Person may participate in any registration hereunder that is underwritten unless that Person (a) agrees to sell that Person’s securities on the basis provided in any underwriting arrangements approved by the Person or Persons entitled hereunder to approve the arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of the underwriting arrangements; provided, that no Investor shall be required to make any representations or warranties to the Company or the underwriters (other than representations and warranties regarding that Investor, that Investor’s ownership of its shares of Common Stock to be sold in the offering and that Investor’s intended method of distribution) or to undertake any indemnification obligations to the Company or the underwriters with respect thereto, except as otherwise provided in Section 7.

9.Rule 144 Compliance. With a view to making available to Investors the benefits of Rule 144 and any other rule or regulation of the Commission that may at any time permit a holder to sell securities of the Company to the public without registration, the Company shall:

(a)make and keep public information available, as those terms are understood and defined in Rule 144, at all times after the Registration Date;

(b)use reasonable efforts to file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act, at any time after the Registration Date; and

(c)furnish to each Investor so long as that Investor owns Registrable Securities, promptly upon request, a written statement by the Company as to its compliance with the reporting requirements of Rule 144 and of the Securities Act and the Exchange Act, a copy of the most recent annual or quarterly report of the Company, and such other reports and documents so filed or furnished by the Company as that Investor reasonably requests in connection with the sale of Registrable Securities without registration.

10.Preservation of Rights. The Company shall not (a) grant any registration rights to third parties that are more favorable than or inconsistent with the rights granted hereunder, or (b) enter into any agreement, take any action, or permit any change to occur, with respect to its securities that violates or subordinates the rights expressly granted to Investors in this Agreement.

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11.Termination. This Agreement shall terminate and be of no further force or effect when there are no longer any Registrable Securities outstanding; provided, that the provisions of Section 6 and Section 7 shall survive any such termination.

12.Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Communications must be sent to the respective parties at the addresses indicated below (or at any other address for a party specified in a notice given in accordance with this Section 12).

If to the Company:	112 Corporate Drive
	Portsmouth, NH 03801
	E-mail:  wes.kimmel@flexenergy.com
	Attention:  Chief Financial Officer
with a copy to:	Fennemore Craig
	2394 E. Camelback Road, Suite 600
	Phoenix, AZ 85016
	E-mail:  acain@fennemorelaw.com
	Attention:  Aaron Cain
If to FPS:
	E-mail:
	Attention:
If to RNS:	309 Agate Street
	Laguna Beach, CA 92651
	E-mail: thomasdenison@gmail.com
	Attention: Thomas R. Denison
If to TRF:
	E-mail:  patrick@amberjackcapital.com
	Attention:  Patrick Connelly

13.Entire Agreement. This Agreement, together with the Contribution Agreement, the SAFE Documentation and any related exhibits and schedules thereto, constitutes the sole and entire agreement of the parties with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings and agreements, both written and oral, with respect to the subject matter. Notwithstanding the foregoing, in the event of any conflict between the terms and provisions of this Agreement and those of the Contribution Agreement and the SAFE Documentation, the terms and conditions of this Agreement shall control.

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14.Successor and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties and their respective successors and permitted assigns. The Company may assign this Agreement at any time in connection with a sale or acquisition of the Company, whether by merger, consolidation, sale of all or substantially all of the Company’s assets, or similar transaction, without the consent of Investor; provided, that the successor or acquiring Person agrees in writing to assume all of the Company’s rights and obligations under this Agreement. An Investor may assign its rights hereunder to any purchaser or transferee of Registrable Securities; provided, that the purchaser or transferee shall, as a condition to the effectiveness of the assignment, be required to execute a counterpart to this Agreement agreeing to be treated as an Investor whereupon the purchaser or transferee shall have the benefits of, and shall be subject to the restrictions contained in, this Agreement as if the purchaser or transferee was originally included in the definition of Investors herein and had originally been a party hereto.

15.No Third-Party Beneficiaries. This Agreement is for the sole benefit of the parties and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever, under or by reason of this Agreement; provided, however, the parties hereby acknowledge that the Persons set forth in Section 7 are express third-party beneficiaries of the obligations of the parties set forth in Section 7.

16.Headings. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.

17.Amendment, Modification and Waiver. The provisions of this Agreement may only be amended, modified, supplemented or waived with the prior written consent of the Company and Investors holding at least a majority of the Registrable Securities then outstanding; provided that any provision hereof may be waived by any waiving party on such party’s own behalf, without the consent of any other party. No waiver by any party or parties shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by the written waiver, whether of a similar or different character, and whether occurring before or after that waiver. Except as otherwise set forth in this Agreement, no failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

18.Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, the invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon a determination that any term or other provision is invalid, illegal or unenforceable, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

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19.Remedies. Investors, in addition to being entitled to exercise all rights granted by law, including recovery of damages, shall be entitled to specific performance of their rights under this Agreement. The Company acknowledges that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and the Company shall waive the defense in any action for specific performance that a remedy at law would be adequate.

20.Governing Law; Submission to Jurisdiction. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction). Any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby may be instituted in the federal courts of the United States or the courts of the State of Delaware in each case located in the city of Wilmington and County of New Castle, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding. Service of process, summons, notice or other document by mail to the party’s address set forth herein shall be effective service of process for any suit, action or other proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or any proceeding in such courts and irrevocably waive and agree not to plead or claim in any such court that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

21.Waiver of Jury Trial. Each party acknowledges that any controversy which may arise under this Agreement is likely to involve complicated and difficult issues and, therefore, each party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this Agreement or the transactions contemplated hereby. Each party certifies and acknowledges that (a) no representative of the other party has represented, expressly or otherwise, that the other party would not seek to enforce the foregoing waiver in the event of a legal action, (b) the party has considered the implications of this waiver, (c) the party makes this waiver voluntarily, and (d) the party has been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this Section 21.

22.Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

23.Further Assurances. Each party shall, and shall cause its Affiliates to, execute and deliver any additional documents, instruments, conveyances and assurances and take any further actions reasonably required to carry out the provisions hereof and to give effect to the transactions contemplated hereby.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the parties have executed this Agreement on the date first written above.

FLEXENERGY GREEN SOLUTIONS, INC.
By:
	Name:
	Title:

FLEXENERGY POWER SOLUTIONS, LLC
By:
	Name:
	Title:

RNS FLEX, LLC
By:
	Name:
	Title:

TRF PLATFORM HOLDINGS, LLC
By:
	Name:
	Title:

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EX-10.4

Exhibit 10.4

FLEXENERGY GREEN SOLUTIONS, INC.

BOARD CHAIRPERSON COMPENSATION AGREEMENT

This Board Chairperson Compensation Agreement (this “Agreement”), dated as of [Date of pre-IPO contribution of Flex subsidiaries to FGS], is entered into by and between FlexEnergy Green Solutions, Inc., a Delaware corporation (the “Company”), and George P. Walker (“Director”).

WHEREAS, the Company and its board of directors (the “Board”) desire for Director to serve the Company as a director, the Chairperson of the Board of Directors and the Chairperson of the Company’s audit committee, compensation committee and nominating and corporate governance committee.

NOW THEREFORE in consideration of the mutual benefits to be derived from this Agreement, the Company and Director hereby agree as follows:

1.            Director Duties. Director agrees to serve as a director of the Company, the Chairperson of the Company’s Board of Directors, and the Chairperson of the Company’s Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee, until Director’s successor is duly elected and qualified or until Director’s earlier death, resignation, retirement, disqualification or removal.

2.            Compensation and Benefits. For so long as Director serves as the Chairperson of the Company’s Board of Directors, and the Chairperson of the Company’s Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee, Director shall be compensated as follows:

(a)            Retainer Fees. Director shall be entitled to receive an initial retainer fee of $93,750 paid on November 15, 2021 and quarterly retainer fees of $31,250 at the end of each calendar quarter (the “Quarterly Fee”), commencing with an initial Quarterly Fee paid on December 31, 2021. These retainer fees are in lieu of, and Director shall not be entitled to any other, cash retainer or meeting fees payable to other members of the Board. The Quarterly Fee shall be paid at the end of each calendar quarter during which Director serves the Company in the capacities described in Section 1; provided however, that the final Quarterly Fee shall be prorated based on the portion of such calendar quarter during which Director serves the Company in the capacities described in Section 1.

(b)            Reimbursement of Expenses. The Company shall pay or reimburse Director for all travel, business and entertainment expenses incurred by and reasonably necessary for Director to perform Director’s duties for the Company in accordance with such policies and procedures as the Company may from time to time and subject to the Company’s normal requirements with respect to reporting and documentation of such expenses.

(c)            Incentive Award Plan Eligibility. Director shall be eligible to participate in, and receive one or more grants under, the FlexEnergy Green Solutions, Inc. 2021 Incentive Award Plan. Any such awards and the terms and conditions thereof shall be subject to the discretion of the Board and set forth in award documentation as the Board deems reasonably necessary in connection with any such award.

(d)            No Withholding. In Director’s service to the Company pursuant to this Agreement, Director shall not be an employee of the Company. The Company shall report compensation paid hereunder consistent with the foregoing and Director shall be liable for all taxes associated herewith.

(e)            Additional Benefits. The Company shall also provide Director with other benefits provided from time to time to its other directors, including directors’ and officers’ insurance coverage and director indemnification rights.

3.            Termination. At any time, Director may be removed as Chairperson and/or as a director as provided in Company’s certificate of incorporation, bylaws and applicable law. Director may resign as Chairperson and/or as director as provided in Company’s certificate of incorporation, bylaws and applicable law. Notwithstanding anything to the contrary contained in or arising from this Agreement or any statements, policies, or practices of Company, neither Director nor Company shall be required to provide any advance notice or any reason or cause for termination of Director’s status as Chairperson or a director, except as provided in Company’s certificate of incorporation, bylaws and applicable law.

4.            Entire Agreement; Amendment. This Agreement contains the entire agreement between the Company and Director with respect to the subject matter hereof. This Agreement may not be amended, waived, changed, modified or discharged except by an instrument in writing executed by or on behalf of the party against whom enforcement of any amendment, waiver, change, modification or discharge is sought. No course of conduct or dealing shall be construed to modify, amend or otherwise affect any of the provisions hereof.

5.            Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered in person, delivered by express mail or other expedited service or upon receipt if mailed, postage prepaid, via registered mail, return receipt requested.

6.            Assignability. This Agreement shall not be assignable by either party and shall be binding upon, and shall inure to the benefit of, the heirs, executors, administrators, legal representatives, successors and assigns of the parties. Any successor to the Company (whether direct or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company’s business and/or assets shall assume this Agreement and agree expressly to perform this Agreement in the same manner and to the same extent as the Company would be required to perform it in the absence of a succession. For all purposes under this Agreement, the term “Company” shall include any successor to the Company’s business and/or assets that executes and delivers the assumption agreement described in this Section 6 or which becomes bound by this Agreement by operation of law.

7.            Governing Law. This Agreement shall be governed by and construed under the laws of the State of Delaware without regard to conflict of laws principles that would otherwise result in the application of the laws of any jurisdiction other than the State of Delaware.

8.            Waiver and Further Agreement. Any waiver of any breach of any terms or conditions of this Agreement shall not operate as a waiver of any other breach of such terms or conditions or any other term or condition, nor shall any failure to enforce any provision hereof operate as a waiver of such provision or of any other provision hereof. Each of the parties hereto agrees to execute all such further instruments and documents and to take all such further action as the other party may reasonably require in order to effectuate the terms and purposes of this Agreement.

9.            Headings of No Effect. The Section headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

10.            Counterparts. This Agreement may be executed in two or more counterparts, and with counterpart signature pages, all of which together shall for all purposes constitute one Agreement. Counterpart signature pages to this Agreement transmitted by facsimile transmission, by electronic mail in “portable document format” (“.pdf”) form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing an original signature.

[SIGNATURES ON FOLLOWING PAGE]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the date first above written.

COMPANY:

FlexEnergy Green Solutions, Inc.

By:

Name:

Title:

DIRECTOR:

George P. Walker

EX-10.5

Exhibit 10.5

FLEXENERGY ENERGY SYSTEMS, INC.

EXECUTIVE EMPLOYMENT AGREEMENT

This Executive Employment Agreement (this “Agreement”) is entered by and between FlexEnergy Energy Systems, Inc., a Delaware corporation (the “Company”), and Mark G. Schnepel (“Executive”).

1.            Duties and Scope of Employment.

(a)            Title and Duties. As of the Effective Date (as defined in Section 3 below), Executive will be employed and serve as President and Chief Executive Officer of the Company. During the Employment Term, and without any additional compensation in connection with such service, Executive shall also serve as an officer of such affiliates of the Company as the Board may determine from time to time. During the Employment Term (as defined in Section 3 below), Executive will have authority and render such business and professional services in the performance of Executive’s duties as are customarily associated with Executive’s position(s) provided above, and Executive agrees to perform such other duties and functions as may from time to time be reasonably determined by the Board. The “Board” means (i) the board of directors of FlexEnergy Green Solutions, Inc. (“FGS”) if the Company is a direct or indirect subsidiary of FGS; or (ii) the board of directors or analogous governing body of the Company if the Company is not a direct or indirect subsidiary of FGS.

(b)            Obligations. During the Employment Term, and excluding any periods of vacation, sick leave, or other leave to which the Executive is entitled, Executive will perform Executive’s duties faithfully and to the best of Executive’s ability and will devote such time as reasonably necessary to fulfill Executive’s responsibilities in the position. Executive and the Company agree that the Company represents Executive’s principal business focus. Except as may otherwise be approved by the Company from time to time, Executive’s services shall be primarily performed at the Company’s office at Portsmouth, New Hampshire, or other locations less than 50 miles from such location determined by the Company. Executive agrees to travel as reasonably necessary to fulfill Executive’s responsibilities in the position. During the Employment Term, Executive agrees that Executive shall maintain loyalty to the Company, shall take no action that would be injurious to the Company interests, and shall comply with all rules, regulations and policies of the Company. During the Employment Term, it shall not be a violation of this Agreement for Executive to (i) serve on up to two (2) civic or charitable boards or committees (and other board and committees from time to time as approved by the Board), (ii) deliver lectures, fulfill speaking engagements or teach at educational institutions, or (iii) manage personal investments and business endeavors, so long as such activities do not significantly interfere with the performance of the Executive’s responsibilities as an employee of the Company in accordance with this Agreement.

(c)            Executive’s Employability. Executive represents and warrants that: (i) Executive has the right to execute, deliver and perform Executive’s duties under this Agreement, and (ii) Executive is not a party to any other agreements, arrangements or obligations (e.g., confidentiality agreements, noncompetition agreements), whether written, oral or implied, which include terms that would limit Executive’s ability to execute, deliver and perform Executive’s duties under this Agreement or which are otherwise inconsistent with this Agreement. This warranty will remain in full force and effect throughout the Employment Term (as defined in Section 3 below).

2.            Compensation.

(a)            Base Salary. During the Employment Term, the Company will pay Executive as compensation for Executive’s services a base salary at rate of $24,625.00 per month (the “Base Salary”). The Base Salary will be paid in regular installments in accordance with the Company’s normal payroll practices, subject to applicable deductions and withholdings. The first and last payment will be adjusted, if necessary, to reflect a commencement or termination date other than the first or last working day of a pay period.

(b)            Annual Bonus. Executive shall be eligible for an annual bonus (collectively the “Annual Bonus”) during the Employment Term in a target amount equal to 50% of Base Salary, to be earned based on such targets, criteria, terms and conditions as be determined by the Board (or a duly authorized committee thereof) in its sole discretion, subject to the terms of this Agreement. Any such Annual Bonus (i) will only be determined and awarded after the completion of the audited financial statements for FGS with respect to the applicable annual period for which the Annual Bonus is to be earned; (ii) will only be awarded and paid if both (A) Executive remains employed with the Company during the full annual period for which the Annual Bonus is to be earned and (B) (I) Executive remains employed with the Company through the award and payment of the Annual Bonus or (II) subject to Section 4(b), Executive’s employment with the Company is terminated by the Company without Cause between the last day of the annual period for which the Annual Bonus is to be earned and the date on which the Annual Bonus would otherwise be paid; and (iii) will be paid as soon as practicable, but not later than 45 days, after the completion and public release of audited financial statements for FGS with respect to the applicable annual period for which the Annual Bonus is earned.

(c)            Equity Incentives.

(i)            Incentive Award Plan Eligibility. Executive shall be eligible to participate in, and receive one or more grants under, the FlexEnergy Green Solutions, Inc. 2021 Incentive Award Plan (the “Incentive Plan”). Any such awards and the terms and conditions thereof shall be subject to the discretion of the board of directors of FGS and set forth in award documentation as such board of directors deems reasonably necessary in connection with any such award.

(ii)            Issuance of Shares One Year After IPO. The Company agrees to cause the issuance to Executive of 12,000 shares of common stock of FGS under the Incentive Plan (pursuant to then-current forms of award agreement under the Incentive Plan) after the one (1) year anniversary of the IPO (as defined in Section 3 below) if (A) Executive remains employed by the Company throughout the one (1)-year period immediately following the IPO, (B) Executive is terminated by the Company without Cause (defined below) during one (1)-year period immediately following the IPO, or (C) Executive terminates this Agreement for Good Reason.  For the avoidance of doubt, no shares will be issued to Executive if Executive fails to remain employed by the Company during the one (1)-year period immediately following the IPO under any other circumstances (ex. resignation by Executive, termination by the Company for Cause).

(iii)            Initial Stock Option Award. Without limiting Sections 2(c)(i) or 2(c)(ii) above, the Company will recommend to the FGS board of directors that Executive receive a stock option award to purchase shares of common stock of FGS, (A) at an exercise price determined by the FGS board of directors in accordance with the requirements of the Incentive Plan, (B) 20,000 shares of common stock of FGS initially vested and exercisable upon grant, and 80,000 shares of common stock of FGS vesting and becoming exercisable over a four (4)-year period with 25% vesting on each anniversary of the IPO (defined below) subject to Executive’s continuous service through the applicable anniversary, (C) not subject to any adjustment pursuant to Section 12 of the Incentive Plan, without Executive’s written consent, that would reduce the number of shares subject to the stock option or increase the exercise price applicable to the stock option (except to provide equitable adjustment with respect to a reverse stock split or other event specified in Section 12(i) of the Incentive Plan having a substantively similar effect on the outstanding capital of FGS), and (D) otherwise subject to the general terms and conditions of the Incentive Plan. Notwithstanding the foregoing, it is hereby acknowledged and agreed that no stock option award to Executive has been approved by the FGS board of directors, and Executive has no right to receive (and neither the Company nor FGS has any obligation to issue) any stock option award unless and until the FGS board of directors has actually approved any such stock option award and the full terms thereof (including the applicable exercise price).

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(d)            Expense Reimbursement. During the Employment Term, the Executive shall be entitled to reimbursement of reasonable out-of-pocket business expenses incurred by Executive in furtherance of Company’s business in accordance with Company’s policies with respect thereto as in effect from time to time (the “Expense Reimbursement”). All reimbursements provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during Executive’s lifetime (or during a shorter period of time specified in this Agreement); (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year; (iii) the reimbursement of an eligible expense shall be made no later than the last day of the calendar year following the year in which the expense is incurred; and (iv) the right to reimbursement or in kind benefits is not subject to liquidation or exchange for another benefit.

(e)            Vacation. Executive shall be entitled to a minimum of three (3) weeks paid vacation per year, in accordance with the Company’s standard vacation policy.

(f)             Employee Benefits. During the Employment Term, Executive will be considered a full-time employee and be entitled to participate in the employee benefit plans and programs currently and hereafter maintained by the Company of general applicability to other Employees of Executive’s classification at the Company (the “Benefits”). The Company reserves the right to cancel or change the Benefit plans and programs it offers to its employees at any time. In the event of any dispute between this Agreement and the terms of any Benefit summary plan description, the terms of the summary plan description shall control.

3.            Effective Date; Term of Employment.

(a)            Employment Term; Effective Date. The “Employment Term” under this Agreement will commence on the Effective Date and will continue until the Executive’s employment terminated by either the Company or Executive as provided in Section 3(b) of this Agreement. This Agreement shall only become a legally effective agreement binding on Executive and the Company on the closing date (the “Effective Date”) of an initial public offering of the common stock of FGS pursuant to a registration statement filed under the Securities Act of 1933, as amended (an “IPO”). If an IPO does not close on or before November 10, 2021, then this Agreement shall thereafter be void and no legal force or effect.

(b)            Termination. Notwithstanding anything else contained in this Agreement, Executive’s employment hereunder shall terminate upon the earliest to occur of the following:

(i)            Death. Immediately upon Executive’s death.

(ii)           Termination by Executive.

(1)            Generally. If terminated by Executive without Good Reason, upon written notice by Executive to the Board that Executive is terminating employment (a “Resignation Notice”), which termination shall be effective 60 days after the date of such notice, or such earlier date as specified in writing by the Company in its sole discretion during such 60-day period; or

(2)            For Good Reason. If terminated by Executive for Good Reason, upon written notice by Executive to Company that Executive is terminating Executive’s employment for Good Reason and that sets forth the factual basis supporting the Good Reason, which termination shall be effective 30 days after the date of such notice, or such earlier date as specified in writing by the Company in its sole discretion during such 30-day period. For the avoidance of doubt, such termination shall not constitute a termination for Good Reason if Company cures the conditions identified in Executive’s notice as provided in Section 3(d)(iii).

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(iii)            Termination by the Company.

(1)            For Cause. If terminated by the Company for Cause (defined below), upon written notice by the Company to Executive that Executive’s employment is being terminated for Cause, which termination shall be effective on the date of such notice or such later date as specified in writing by the Company;

(2)            Without Cause or Disability. If terminated by the Company for reasons other than for Cause or Disability, upon written notice by Company to Executive that Executive’s employment is being terminated, which termination shall be effective immediately after the date of such notice or such later date as specified in writing by the Company; or

(3)            For Disability. If terminated by the Company because of Executive’s Disability (defined below), upon written notice by the Company to Executive that Executive’s employment is being terminated as a result of Executive’s Disability, which termination shall be effective 30 days after the date of such notice or such later date as specified in writing by the Company, unless within such period Executive becomes capable of rendering services of the character contemplated hereby (and a physician chosen by the Company so certifies in writing) and Executive in fact resumes such services.

(c)            Deemed Termination for Cause. Notwithstanding anything in this Agreement to the contrary, if (i) the Company at any time determines that Cause existed at the time of Executive’s termination or written notice thereof, (ii) Executive has breached or breaches the terms of Section 5, then upon written notice by the Company to Executive (i) the Executive’s termination shall be deemed be (or have been) terminated by the Company for Cause pursuant to Section 3(b)(iii)(1) (including for purposes of Section 4 and Section 6(g)(ii)(1)), (ii) the Company may immediately cease payments of any Basic Severance Payments and/or any Extended Severance Payments that may otherwise be due to Executive, and (iii) the Company may recover from Executive any Basic Severance Payments and/or any Extended Severance Payments that may have already been paid to Executive. The cessation and recovery of such any payments shall be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company with respect to the matters constituting Cause, including, without limitation, the right to specific performance and/or injunctive or other relief.

(d)            Certain Definitions.

(i)             Definition of Cause. For purposes of this Agreement, “Cause” means any of the following: (A) conviction of, or the entry of a plea of guilty or no contest to, a felony, a crime of moral turpitude, or any other crime that causes the Company public disgrace or disrepute, or which materially and adversely affects the Company’s operations or financial performance or the relationship the Company has with its customers; (B) gross negligence or willful misconduct with respect to the Company, including, without limitation fraud, embezzlement, theft or proven dishonesty in the course of Executive’s employment or other service; (C) alcohol abuse or use of either illegal drugs or controlled drugs (other than in accordance with a physician’s prescription); (D) refusal to perform any lawful, material obligation or fulfill any duty (other than any duty or obligation of the type described in clause (F) below) to the Company (other than due to a disability, as determined by the Committee), which refusal, if curable, is not cured within 15 days after delivery of written notice thereof (and for the avoidance of doubt, the relevant refused obligation or duty will be specifically identified in such written notice); (E) material breach of any agreement with or duty owed to the Company, which breach, if curable, is not cured within 15 days after the delivery of written notice thereof (and for the avoidance of doubt, if applicable, the relevant breached duty will be specifically identified in such written notice); (F) any breach of any obligation or duty to the Company (whether arising by statute, common law or agreement) relating to confidentiality, non-competition, non-solicitation, trade secrets, and/or proprietary rights; (G) material violation of the Company’s written policies or codes of conduct, including those related to discrimination, harassment, performance of illegal or unethical practices, and ethical misconduct; or (H) in the case of a director, repeated failure to participate in Board meetings (including meetings of any Board committee of which the director is a member) on a regular basis despite having received proper notice of meetings in advance.

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(ii)            Definition of Disability. For purposes of this Agreement, “Disability” means Executive’s inability to perform one or more of the essential functions of Executive’s job due to Executive’s physical or mental impairment, with or without reasonable accommodation as required by law, for any period aggregating more than 120 days in any 365 consecutive day period; provided however, that (A) if the Company determines that Executive has become Disabled, the Company shall notify Executive of its determination; (B) Executive may then request a reasonable accommodation (as that term is defined under the Americans with Disabilities Act) from the Company to assist in his/her return to work; (C) the Company will determine whether Executive’s request can be reasonably accommodated without undue hardship no later than 30 days after Executive requests an accommodation (with additional time being provided in the event of Executive or Executive’s medical provider delaying in providing information that is necessary to the Company’s determination); and (D) in the event Executive’s request cannot be reasonably accommodated (and/or presents an undue hardship), the Company may, by notice given in the manner provided in this Agreement, terminate Executive’s employment hereunder.

(iii)            Definition of Good Reason. For purposes of this Agreement, “Good Reason” means any of the following within the prior 90 days without Executive’s approval: (A) any material diminution of Executive’s authority, duties or responsibilities with or to the Company, other than (i) a paid leave of absence at the direction of and approved by the Board or (ii) an unpaid administrative leave imposed for the purposes of investigating or addressing misconduct by Executive; (B) the Board assigns Executive duties or responsibilities that are materially inconsistent with Executive’s position; (C) any material breach of this Agreement by the Company, including, without limitation, a reduction in Executive’s Base Salary below the amount specified in Section 2(a) without Executive’s consent; or (D) a change in the geographic location at which Executive must primarily perform services to a location more than 50 miles from Portsmouth, New Hampshire without Executive’s approval. Executive must give the Company written notice of Executive’s intention to terminate employment for Good Reason, which notice must state the grounds on which the proposed termination for Good Reason is based. Executive must provide such written notice of the occurrence of these grounds no later than 90 days after their initial occurrence. The Company may remedy these condition(s) within 15 days of receiving notice from Executive and no “Good Reason” will exist if the Company remedies such condition(s) during such 15-day period.

(iv)            Definition of Change in Control Period. For purposes of this Agreement, a “Change in Control Period ” means the one (1)-year period commencing six (6)-months prior to a Change in Control (as defined in the Incentive Plan).

(e)            Transition Assistance. For a period of 30 days following the effective date of Executive’s resignation, Executive shall make himself or herself available to the Company and/or its agents (i) for the purpose of facilitating an efficient transition of Executive’s job related responsibilities and duties to other designated individuals, and (ii) to respond to questions from the Company and/or its agents regarding information and/or activities in which Executive was engaged while employed by the Company; provided that the foregoing time period is based on Executive’s reasonable efforts to cooperate, Executive will not be entitled to additional compensation for such availability and cooperation; and further provided that such assistance shall be reasonable and not substantially interfere or conflict with Executive’s responsibilities to any new employer.

4.            Payments upon Termination.

(a)            Generally; Accrued Obligations. If Executive’s employment is terminated for any reason, then the Company shall pay Executive the Accrued Obligations promptly following the effective date of such termination. “Accrued Obligations” means (A) the portion of Executive’s Base Salary that has accrued prior to any termination of Executive’s employment with Company and has not yet been paid, any bonus that has been awarded to Executive as of the date of termination of Executive’s employment but has not yet been paid to Executive, (B) and the amount of any unreimbursed Expense Reimbursement. Executive’s entitlement to any other compensation or benefit under any plan of Company shall be governed by and determined in accordance with the terms of such plans, except as otherwise specified in this Agreement.

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(b)            Termination by the Company without Cause or Termination for Good Reason. If the Company terminates Executive’s employment without Cause or the Executive terminates Executive’s employment for Good Reason, then, in addition to the Accrued Obligations, and subject to (A) the Executive signing a separation and release agreement in the form attached as Exhibit A, and as such form may be updated by the Company from time to time at any time to conform with changes in applicable laws (a “General Release”) and (B) the General Release becoming effective and irrevocable, all within 60 days after the date of termination (or such shorter period as set forth in the General Release), the Company shall pay Executive:

(i)            the Basic Severance Payments, or

(ii)           if the Board, in its sole discretion, elects (by written notice to Executive within 10 days following the termination of Executive’s employment) that the Company will pay Extended Severance Payments to Executive instead of the Basic Severance Payments pursuant to Section 4(b)(i), the Extended Severance Payments (instead of the Basic Severance Payments); and

if applicable pursuant to Section 2(b), an Annual Bonus with respect to the preceding annual period.

(c)            Terminations without Cause during a Change in Control Period. If the Company terminates Executive’s employment without Cause during a Change in Control Period, then, in addition to the Accrued Obligations, and subject to (i) the Executive signing a General Release and (ii) the General Release becoming effective and irrevocable, all within 60 days after the date of termination (or such shorter period as set forth in the General Release), the Company shall pay Executive the Extended Severance Payments.

(d)            COBRA Premiums.

(i)            Subject to Section 4(d)(ii), if (A) Executive is entitled to Basic Severance Payments or Extended Severance Payments (including, without limitation, Executive’s timely execution and delivery of a General Release that has become effective and irrevocable), and (B) Executive is eligible for and timely and properly elects continuation health care coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), then the Company will pay or promptly reimburse the COBRA premium amounts required for the continued coverage of Executive and Executive’s dependents (if any) under the Company’s group health care plans at the same levels that would have applied if Executive’s employment had not terminated (if possible) until the end of the Basic Severance Term or Extended Severance Term, as applicable (or until such earlier time as Executive ceases to be eligible for COBRA coverage, if earlier) (the “COBRA Premiums”). Notwithstanding the foregoing, if the Company determines, in its sole discretion, that it cannot pay the COBRA Premium without a substantial risk of violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), the Company instead shall pay Executive a monthly cash payment equal to the applicable COBRA Premium for that month.

(ii)            If, however, health care insurance benefits are available to Executive from a new employer, the Company shall have no further obligation relating to payment of additional COBRA Premiums. Executive agrees to promptly inform the Company if and when health care insurance benefits are available from a new employer, and to reimburse the Company for any amounts paid with respect to COBRA Premiums to the extent paid after health care insurance benefits are available to Executive from a new employer.

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(e)            Certain Definitions.

(i)            Basic Severance Payments; Basic Severance Term. For purposes of this Agreement, “Basic Severance Payments” means, to the extent applicable, the monthly cash severance at the Base Salary rate, less standard withholdings and deductions, to be paid during the Basic Severance Term. For purposes of this Agreement, “Basic Severance Term” means the six (6)-month period immediately following the termination date of Executive’s employment.

(ii)            Extended Severance Payments; Extended Severance Term. For purposes of this Agreement, “Extended Severance Payments” means, to the extent applicable, the monthly cash severance at the Base Salary rate, less standard withholdings and deductions, to be paid during the applicable Extended Severance Term. For purposes of this Agreement, “Extended Severance Term” means the one (1)-year period immediately following the termination date of Executive’s employment.

(f)             Execution of General Release. For the avoidance of doubt, the Company shall not be obligated to pay Executive any severance payments unless a General Release has been timely executed and delivered by Executive and such General Release has become effective and irrevocable.

(g)            Limited Rights to Severance Payments. For clarity, (i) entitlement to severance payments of any kind pursuant to this Agreement shall only be possible if (A) the Company terminates Executive’s employment without Cause, or (B) Executive terminates this Agreement for Good Reason; and (ii) no severance payment obligations shall arise out of (W) a termination of this Agreement by the Company with Cause, (X) a termination of this Agreement by the Executive without Good Reason, or (Y) a termination of this Agreement due to Executive’s death or Disability.

(h)            No Continued Vesting. For the avoidance of doubt, vesting of any grants under the Incentive Plan or any other stock, stock option or other incentive awards shall cease upon the date of any termination of Executive’s employment, and shall not continue to vest for the remainder of any Noncompetition Period, Non-Solicitation Period or during any applicable Basic Severance Term or Extended Severance Term.

(i)             Execution of General Release. In accordance with Section 4(b), Section 4(c) and Section 4(d), to receive the payments set forth in those Sections, Executive’s or Executive’s estate’s, if applicable, General Release must be executed, effective and irrevocable before the expiration of 60 days after the date of termination. The payments specified in these Sections will begin as soon as practicable (not to exceed 30 days) after the General Release is executed, effective and irrevocable, but if the 60-day period could span two (2) tax years, the payments must be made in the later year. For example, if the Company terminates Executive’s employment without Cause on December 15, Executive has 60 days—until February 13 —for a General Release to be sign and become effective and irrevocable. In this case, payments due in accordance with Section 4(b), Section 4(c) or Section 4(d) may not begin until the following year, even if the release was signed, effective and irrevocable in December. If Executive’s or Executive’s estate’s, if applicable, General Release is not executed, effective and irrevocable before the end of the 60-day-period, then the Executive and Executive’s estate forfeit, on behalf of Executive and all who might claim through Executive, the payments that would otherwise be due under the applicable Section of this Agreement.

5.            Confidentiality and Invention Assignment Agreement. Executive has executed, and as applicable shall execute, the Company’s Confidentiality and Invention Assignment Agreement, the current form of is attached as Exhibit B, and as updated from time to time (“CIIA”), the provisions of which are hereby incorporated by reference and shall govern the Executive’s obligations and responsibilities with regard to the Company Confidential Information (as that term is defined in the CIIA), the assignment of intellectual property, and other matters. Executive agrees to comply with the terms of the CIIA. To the extent that any provision of the CIIA conflicts with any provision in this Agreement, the provisions requiring Executive to comply with the higher standard shall govern.

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6.            Restrictive Covenants.

(a)            Acknowledgement. Executive agrees that, during the Employment Term, Executive (i) has a duty of loyalty to the Company, and (ii) shall not engage in or undertake any action that conflicts with the undivided loyalty owed by Executive to the Company. Executive represents and warrants that Executive has no other agreements, relationships, or commitments to any other person or entity that conflict with the provisions of this Agreement, Executive’s obligations to the Company under this Agreement, or Executive’s ability to perform Executive’s duties to the Company. Executive acknowledges and agrees that: (A) Executive’s employment with the Company has brought Executive into close contact with Confidential Information of the Company and its customers, vendors, suppliers, employees, and independent contractors; and (B) the agreements and covenants contained in this Section 6 are essential, reasonable, and no broader than necessary to protect the reasonable business interests and goodwill of the Company. Executive further acknowledges, represents, and agrees that the terms of this Section 6 do not and will not pose an undue hardship on Executive, and that Executive will be able to maintain gainful employment notwithstanding the terms of this Section 6. Executive further acknowledges, represents, and agrees that he/she has received valuable consideration (including, but not limited to, a payment of five hundred dollars ($500.00) that is expressly for the purposes of serving as consideration for this Section 6) that is sufficient to support the promises being made by Executive herein. Accordingly, Executive covenants and agrees to the following restrictive covenants.

(b)            Non-Solicitation of Company Employees and Contractors. Executive agrees that during the Non-Solicitation Period (defined below), Executive shall not directly or indirectly (i) hire, employ, recruit, solicit, lure or entice away, or in any other manner persuade or attempt to persuade, any employee of the Company to discontinue such employee’s employment with the Company or (ii) solicit or encourage any independent contractor providing services to the Company to terminate or diminish its relationship with the Company; provided, that, the foregoing shall not be breached by general advertisements not targeted at employees or independent contractors of the Company.

(c)            Non-Solicitation of Company Customers. Executive agrees that, during the Non-Solicitation Period, Executive shall not directly or indirectly (i) solicit or assist in the solicitation by any third party of any Covered Customer (defined below) for the purpose of providing services or products that compete with, or are similar to, the service or product offerings of the Company, except when such solicitation is done on behalf of the Company, or (ii) discourage any Covered Customer from obtaining of services or products from the Company.

(d)            Non-Interference with Vendors and Service Providers. Executive agrees that, during the Non-Solicitation Period, Executive shall not directly or indirectly negatively influence or otherwise interfere with the Company’s relationships with vendors, suppliers, consultants, advisors, or other service providers of the Company.

(e)            Non-Competition with the Company. Executive agrees that, during the Non-Competition Period, Executive shall not directly or indirectly, as a director, manager, member, stockholder, partner, owner, employee, consultant, or agent of any business, or in any other capacity, other than on behalf of the Company, organize, establish, own, operate, manage, control, engage in, participate in, invest in, permit Executive’s name to be used by, act as a consultant or advisor to, render services for (alone or in association with any person, firm, corporation, or other entity), or otherwise assist any person or entity that engages in or owns, invests in, operates, manages, or controls any venture or enterprise in all or a part of the Restricted Area, that engages in (A) the manufacture, sale, lease, service or other manner of offering of products or services that provide natural gas or hydrogen fueled distributed power generation with a single unit nameplate capacity of up to 5MW (which excludes, for the avoidance of doubt, the manufacture, sale, lease, service or other manner of offering of batteries, solar or wind powered energy generation equipment, or electrochemical (non-combustion) powered fuel cells), (B) the manufacture, sale, lease, service or other manner of offering of heat exchanger/transfer products that can operate with gases at a temperature above 1000° Fahrenheit or (C) any other new line of business, products or services offered or in development by FGS or any direct or indirect subsidiary thereof during the prior six months of the Employment Term and in which Executive has had material involvement (the “Restricted Business”). Notwithstanding the foregoing, nothing in this Agreement shall prevent Executive from owning, directly or indirectly, for passive investment purposes not intended to circumvent this Agreement, less than 2% of the publicly traded common equity securities of any company engaged in the Business (so long as Executive has no power to manage, operate, advise, consult with, or control the competing enterprise and no power, alone or in conjunction with other affiliated parties, to select a director, manager, general partner, or similar governing official of the competing enterprise other than in connection with the normal and customary voting powers afforded Executive in connection with any permissible equity ownership).

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(f)             Non-Disparagement. Executive also agrees that, during the Non-Solicitation Period, Executive shall not directly or indirectly (i) disparage the Company, its affiliates and their respective directors, officers, managers, managers, employees, or agents, or (ii) make any public statement that could reasonably be expected to materially and adversely affects the reputation, brand, or business of the Company. This provision does not apply to any statements made to governmental agencies for the purposes of asserting, or participating in any investigation by such agencies concerning, Executive’s statutory rights. In the event of a termination of Executive’s employment (other than a termination for Cause, including pursuant to Section 3(c)), subject to a General Release for Executive being signed, delivered, effective and irrevocable, and further subject to Executive’s compliance and continuing compliance with Executive’s continuing obligations of this Agreement (including this Section 6), then the Company shall cause the FGS board of directors and FGS executive officers (while such individuals serve in such capacities) not to disparage Executive during the remainder of the Non-Solicitation Period. This provision does not apply to any statements or other disclosures by the Company, the FGS board of directors or FGS executive officers for the purpose of or necessary for compliance with federal or state securities laws, as well as rules of any securities exchange on which any securities of the Company, including FGS, are then traded.

(g)            Certain Defined Terms. The following terms, when used in this Section 6, will have the respective meanings set forth below:

(i)            “Restricted Area” means the area within the United States, Canada and each other country and territory for which the Company has provided products or services or in which the Company has otherwise done business during Executive’s employment with the Company; provided however if any court of competent jurisdiction determines that the geographic scope of such Restricted Area is unreasonable, the “Restricted Area” means with respect to the United States, Canada and each other country and territory for which the Company has provided products or services or in which the Company has otherwise done business during Executive’s employment with the Company, the area within each state or territory thereof for which the Company has provided products or services or in which the Company has otherwise done business during Executive’s employment with the Company; provided however if any court of competent jurisdiction determines that the geographic scope of such Restricted Area is unreasonable, the “Restricted Area” means with respect to the United States, Canada and each other country and territory for which the Company has provided products or services or in which the Company has otherwise done business during Executive’s employment with the Company, the area within each county or similar jurisdiction thereof for which the Company has provided products or services or in which the Company has otherwise done business during Executive’s employment with the Company; provided, however if any court of competent jurisdiction determines that the geographic scope of such Applicable Area is unenforceable, the “Restricted Area” means within 50 miles of any location at which the Company has provided products or services or in which the Company has otherwise done business during Executive’s employment with the Company.

(ii)            “Non-Competition Period” means:

(1)            the period during Executive’s employment with the Company and for the one (1)-year period after the end of Executive’s employment with the Company if Executive’s employment (A) is terminated by the Company for Cause, (B) is terminated by the Company without Cause during a Change in Control Period, or (C) is terminated by Executive other than for Good Reason.

(2)            the period during Executive’s employment with the Company and for the six (6)-month period after the end of Executive’s employment with the Company if Executive’s employment is terminated in any circumstances not provided in Section 6(g)(ii)(1)(A), (B) or (C) above; provided, however, that the Board may, in its sole discretion, elect (by written notice to Executive within 10 days following the termination of Executive’s employment) that the Company will pay Extended Severance Payments to Executive (instead of any Basic Severance Payments), in which case the “Non-Competition Period” instead means the period during the Executive’s employment with the Company and for the one (1)-year period after the end of Executive’s employment with the Company.

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(iii)          “Non-Solicitation Period” means the period during Executive’s employment with the Company and for the one (1)-year period after the end of Executive’s employment with the Company.

(iv)          “Company” includes the Company and any of the Company’s affiliates.

(v)           “Covered Customers” means persons; firms; associations; partnerships; corporations; limited liability companies; institutions, local, state, federal and foreign entities or agencies; and other entities (A) to which the Company provided services or products before or during Executive’s employment with the Company, (B) in relation to which Executive has provided any of the Services, or (C) that the Company (or Executive in connection with the Services) has contacted or solicited with respect to the provision of services or products before or during Executive’s employment with the Company.

(vi)          An “employee” or “independent contractor” of the Company is any person who is an employee or independent contractor, respectively, of any of the Company on the date hereof or who becomes an employee or independent contractor of the Company during Executive’s employment with the Company.

(h)            Remedies. If Executive breaches any of the provisions contained in this Section 6, the Company shall have the remedies set forth below, each of which shall be enforceable, and each of which is in addition to, and not in lieu of, any other rights and remedies available to the Company at law or in equity. The provisions of this Section 6 are intended to be for the benefit of the Company and its affiliates, and any of the Company or its affiliate may enforce such provisions. Executive recognizes and acknowledges that a breach of the covenants contained in this Section 6 will cause irreparable harm to the goodwill and business of the Company, the exact amount of which will be difficult to ascertain, and that the remedies at law for any such breach will be inadequate. Accordingly, in the event of an alleged or threatened breach by Executive of any of the provisions of this Section 6, the Company may, in addition to all other rights and remedies existing in its favor, seek specific performance and/or injunctive or other relief in order to enforce or prevent any violations of the provisions hereof. Additionally, if Executive breaches Executive’s obligations under Section 5 or Section 6, then the Company may immediately cease payments of any Basic Severance Payments and/or any Extended Severance Payments and may recover any Basic Severance Payments and/or any Extended Severance Payments paid to Executive after such breach. The cessation and recovery of such payments shall be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company including, without limitation, the right to specific performance and/or injunctive or other relief.

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(i)             Severability. In the event any provision of this Section 6 shall be determined by a court of competent jurisdiction to be unenforceable by reason of its extending for too great a period of time or over too great a geographical area or by reason of its being too extensive in any other respect, it will be interpreted to extend only over the maximum period of time for which it may be enforceable, over the maximum geographical area as to which it may be enforceable, or to the maximum extent in all other respects as to which it may be enforceable, all as determined by such court in such action. If any provision of this Agreement, or any part thereof, is held to be invalid or unenforceable because of the scope or duration of or the area covered by such provision, the parties agree that the court making such determination shall reduce the scope, duration and/or area of such provision (and shall substitute appropriate provisions for any such invalid or unenforceable provisions) in order to make such provision enforceable to the fullest extent permitted by law and/or shall delete specific words and phrases, and such modified provision shall then be enforceable and shall be enforced. In the event that any court determines that the time period or the area, or both, are unreasonable and that any of the covenants is to that extent invalid or unenforceable, the parties agree that such covenants will remain in full force and effect, first, for the greatest time period, and second, in the greatest geographical area that would not render them unenforceable.

(j)             Enforceability. The Parties each acknowledge that the other party acted in good faith in the negotiation and execution of the provisions in this Section 6. In particular, the Parties acknowledge that given the nature of Executive’s duties and responsibilities (and Executive’s associated influence over the Company’s business and its relationships with its customers), the restrictions and duration of the obligations set forth in this Section 6 are reasonable and no broader than necessary to protect the legitimate business interests of the Company and the goodwill thereof. Executive further acknowledges that the restrictions and duration of this Section 6 do not and will not impose an unreasonable hardship upon Executive. The Parties further agree that the requirements of this Section 6 shall survive the termination of Executive’s employment with the Company.

(k)            Waiver or Inapplicability of Non-Competition Obligations. Executive may submit to the Board a written description setting out a reasonable description (including without limitation the identity of any associated employer and other relevant parties) of any contemplated activity that would or may otherwise violate or contravene Executive’s obligations under Section 6(e) (the “Specified Activity”), and request that the Board waive or otherwise confirm the inapplicability of Executive’s obligations under Section 6(e) with respect to such Specified Activity. If and to the extent the Board confirms in writing to Executive the waiver or inapplicability of Executive’s obligations under Section 6(e) with respect to the Specified Activity (such waiver or confirmation, not to be unreasonably withheld based on the interests of the Company), then Executive shall thereafter have no liability or obligation under Section 6(e) with respect to the Specified Activity.

7.            Assignment. This Agreement will be binding upon and inure to the benefit of (a) the heirs, executors and legal representatives of Executive upon Executive’s death and (b) any successor of the Company. Any such successor of the Company will be deemed substituted for the Company under the terms of this Agreement for all purposes. For this purpose, “successor” means any person, firm, corporation or other business entity which at any time, whether by purchase, merger or otherwise, directly or indirectly acquires all or substantially all of the assets or business of the Company. None of the rights of Executive to receive any form of compensation or benefits pursuant to this Agreement may be assigned or transferred except by will or the laws of descent and distribution. None of the obligations of Executive under this Agreement may be assigned or transferred. Any other attempted assignment, transfer, conveyance or other disposition of Executive’s right to compensation or other benefits will be null and void.

8.            Notices. All notices, requests, demands and other communications called for under this Agreement will be in writing and will be delivered personally by hand or by courier, mailed by United States first-class mail, postage prepaid, or sent by email or by other electronic means directed to the party to be notified at the address or email address indicated for such party on the signature page to this Agreement, or at such other address or email address as such party may designate by 10 days’ advance written notice to the other parties hereto. All such notices and other communications will be deemed given upon personal delivery, three (3) days after the date of mailing, or when sent if given via email or other electronic means.

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9.            Severability. In the event that any provision(s) of this Agreement becomes or is declared by an arbitrator or a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement will continue in full force and effect without such provision(s).

10.          Arbitration.

READ THE FOLLOWING ARBITRATION PROVISION CAREFULLY. IT LIMITS CERTAIN OF YOUR RIGHTS, INCLUDING YOUR RIGHT TO OBTAIN REDRESS THROUGH COURT ACTION

(a)            Executive and the Company agree that other than any claims (by Company or Executive) for injunctive relief, any dispute or controversy arising out of, relating to, or in connection with this Agreement, or the interpretation, validity, construction, performance, breach, or termination thereof, will be settled by binding arbitration to be held in New Hampshire in accordance with the National Rules for the Resolution of Employment Disputes then in effect of the American Arbitration Association (the “Rules”). The arbitrator may grant injunctions or other relief in such dispute or controversy. The decision of the arbitrator will be final, conclusive and binding on the parties to the arbitration. Judgment may be entered on the arbitrator’s decision in any court having jurisdiction.

(b)            The arbitrator(s) will apply New Hampshire law to the merits of any dispute or claim, without reference to rules of conflicts of law. The arbitration proceedings will be governed by federal arbitration law and by the Rules, without reference to state arbitration law.

(c)            EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE AGREES TO SUBMIT ANY CLAIMS (OTHER THAN THOSE FOR INJUNCTIVE RELIEF) WHICH ARISE OUT OF, RELATE TO, OR ARE IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF TO BINDING ARBITRATION, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE’S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EMPLOYEE RELATIONSHIP, INCLUDING BUT NOT LIMITED TO, CLAIMS OF DISCRIMINATION, HARASSMENT, OR RETALIATION, OTHER THAN CLAIMS FOR INJUNCTIVE RELIEF.

(d)            The Parties each acknowledge and agree that they have had ample time to consider the terms of this arbitration agreement, that they each negotiated it at arms-length with equal bargaining power,

Executive Signature Signifying Agreement To Arbitration

11.         Integration/Waiver. This Agreement, its exhibits, and the confidentiality and invention assignment agreement described in Section 5 above represent the entire agreement and understanding between the parties as to the subject matter herein and supersede all prior or contemporaneous agreements whether written or oral, including without limitation any employment agreement previously signed by Executive. To the extent that any provision of the CIIA conflicts with any provision in this Agreement, the provisions requiring Executive to comply with the higher standard shall govern. No waiver, alteration or modification of any of the provisions of this Agreement will be binding unless in writing and signed by duly authorized representatives of the parties hereto.

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12.         Tax Withholding. All payments made pursuant to this Agreement will be subject to applicable taxes and other withholdings or deductions authorized or required by law.

13.         Governing Law; Consent to Personal Jurisdiction. THIS AGREEMENT WILL BE GOVERNED BY THE LAWS OF THE STATE OF NEW HAMPSHIRE WITHOUT REGARD FOR CONFLICTS OF LAWS PRINCIPLES. EACH PARTY EXPRESSLY CONSENTS TO THE PERSONAL JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN THE DISTRICT OF NEW HAMPSHIRE SUBJECT TO THE ARBITRATION PROVISION SET FORTH IN SECTION 10.

14.         Attorneys’ Fees. In the event of arbitration or litigation arising from or relating to this Agreement, each party shall be responsible for such party’s own attorneys’ fees and costs and expenses including expert witness fees.

15.         Construction of Agreement. The parties have participated jointly in the negotiating and drafting of this Agreement. If a question concerning intent or interpretation arises, no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of authorship.

16.         Captions. Titles or captions contained in this Agreement are for convenience and are not intended to affect the substantive meaning of any provision.

17.         Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

18.         Code Section 409A. To the fullest extent applicable, amount and other benefits payable under this Agreement are intended to be exempt from the definition of “nonqualified deferred compensation” under section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”) in accordance with one or more of the exemptions available under the final Treasury regulations promulgated under Section 409A and, notwithstanding anything in the Agreement to the contrary, to the extent that any such amount or benefit is or becomes subject to Section 409A due to a failure to qualify for an exemption from the definition of nonqualified deferred compensation in accordance with such final Treasury regulations, this Agreement must be interpreted and administered to the extent possible, or amended, to comply with the applicable requirements of Section 409A with respect to these amounts or benefits.

[Signature page follows]

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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officer, as of the day and year first above written.

“COMPANY”
FlexEnergy Energy Systems, Inc.
By:
Name:
Title:
Date:
Address:
Email:
“EXECUTIVE”
Mark G. Schnepel
Date:
Address:
	112 Corporate Drive, Suite 3
	Portsmouth, NH 03801
	Attn.: Board of Directors
Email:

Exhibit A

Form of General Release

Exhibit B

Form of Confidentiality and Invention Assignment Agreement

EX-10.6

Exhibit 10.6

FlexEnergy ENERGY SYSTEMS, INC.

EXECUTIVE EMPLOYMENT AGREEMENT

This Executive Employment Agreement (this “Agreement”) is entered by and between FlexEnergy Energy Systems, Inc., a Delaware corporation (the “Company”), and Wes Kimmel (“Executive”).

1.             Duties and Scope of Employment.

(a)           Title and Duties. As of the Effective Date (as defined in Section 3 below), Executive will be employed and serve as Chief Financial Officer of the Company. During the Employment Term, and without any additional compensation in connection with such service, Executive shall also serve as an officer of such affiliates of the Company as the Board may determine from time to time. During the Employment Term (as defined in Section 3 below), Executive will have authority and render such business and professional services in the performance of Executive’s duties as are customarily associated with Executive’s position within the Company and Executive agrees to perform such other duties and functions as may from time to time be reasonably determined by the Board. The “Board” means (i) the board of directors of FlexEnergy Green Solutions, Inc. (“FGS”) if the Company is a direct or indirect subsidiary of FGS; or (ii) the board of directors or analogous governing body of the Company if the Company is not a direct or indirect subsidiary of FGS.

(b)           Obligations. During the Employment Term, and excluding any periods of vacation, sick leave, or other leave to which the Executive is entitled, Executive will perform Executive’s duties faithfully and to the best of Executive’s ability and will devote such time as reasonably necessary to fulfill Executive’s responsibilities in the position. Executive and the Company agree that the Company represents Executive’s principal business focus. Except as may otherwise be approved by the Company from time to time, Executive’s services shall be primarily performed at the Company’s office at Portsmouth, New Hampshire, or other locations less than 50 miles from such location determined by the Company. Executive agrees to travel as reasonably necessary to fulfill Executive’s responsibilities in the position. During the Employment Term, Executive agrees that Executive shall maintain loyalty to the Company, shall take no action that would be injurious to the Company interests, and shall comply with all rules, regulations and policies of the Company. During the Employment Term, it shall not be a violation of this Agreement for Executive to (i) serve on up to two (2) civic or charitable boards or committees (and other board and committees from time to time as approved by the Board), (ii) deliver lectures, fulfill speaking engagements or teach at educational institutions, or (iii) manage personal investments and business endeavors, so long as such activities do not significantly interfere with the performance of the Executive’s responsibilities as an employee of the Company in accordance with this Agreement.

(c)           Executive’s Employability. Executive represents and warrants that: (i) Executive has the right to execute, deliver and perform Executive’s duties under this Agreement, and (ii) Executive is not a party to any other agreements, arrangements or obligations (e.g., confidentiality agreements, noncompetition agreements), whether written, oral or implied, which include terms that would limit Executive’s ability to execute, deliver and perform Executive’s duties under this Agreement or which are otherwise inconsistent with this Agreement. This warranty will remain in full force and effect throughout the Employment Term (as defined in Section 3 below).

2.             Compensation.

(a)           Base Salary. During the Employment Term, the Company will pay Executive as compensation for Executive’s services a base salary at rate of $24,625.00 per month (the “Base Salary”). The Base Salary will be paid in regular installments in accordance with the Company’s normal payroll practices, subject to applicable deductions and withholdings. The first and last payment will be adjusted, if necessary, to reflect a commencement or termination date other than the first or last working day of a pay period.

(b)           Annual Bonus. Executive shall be eligible for an annual bonus (collectively the “Annual Bonus”) during the Employment Term in a target amount equal to 50% of Base Salary, to be earned based on such targets, criteria, terms and conditions as be determined by the Board (or a duly authorized committee thereof) in its sole discretion, subject to the terms of this Agreement. Any such Annual Bonus (i) will only be determined and awarded after the completion of the audited financial statements for FGS with respect to the applicable annual period for which the Annual Bonus is to be earned; (ii) will only be awarded and paid if both (A) Executive remains employed with the Company during the full annual period for which the Annual Bonus is to be earned and (B) (I) Executive remains employed with the Company through the award and payment of the Annual Bonus or (II) subject to Section 4(b), Executive’s employment with the Company is terminated by the Company without Cause between the last day of the annual period for which the Annual Bonus is to be earned and the date on which the Annual Bonus would otherwise be paid; and (iii) will be paid as soon as practicable, but not later than 45 days, after the completion and public release of audited financial statements for FGS with respect to the applicable annual period for which the Annual Bonus is earned.

(c)           Equity Incentives.

(i)            Incentive Award Plan Eligibility. Executive shall be eligible to participate in, and receive one or more grants under, the FlexEnergy Green Solutions, Inc. 2021 Incentive Award Plan (the “Incentive Plan”). Any such awards and the terms and conditions thereof shall be subject to the discretion of the board of directors of FGS and set forth in award documentation as such board of directors deems reasonably necessary in connection with any such award.

(ii)           Issuance of Shares One Year After IPO. The Company agrees to cause the issuance to Executive of 25,000 shares of common stock of FGS under the Incentive Plan (pursuant to then-current forms of award agreement under the Incentive Plan) after the one (1) year anniversary of the IPO (as defined in Section 3 below) if (A) Executive remains employed by the Company throughout the one (1)-year period immediately following the IPO, (B) Executive is terminated by the Company without Cause (defined below) during one (1)-year period immediately following the IPO, or (C) Executive terminates this Agreement for Good Reason.  For the avoidance of doubt, no shares will be issued to Executive if Executive fails to remain employed by the Company during the one (1)-year period immediately following the IPO under any other circumstances (ex. resignation by Executive without Good Reason, termination by the Company for Cause).

(iii)           Stock Option Awards.

(1)           Initial Award. Without limiting Sections 2(c)(i) or 2(c)(ii) above, the Company will recommend to the FGS board of directors that Executive receive a stock option award to purchase shares of common stock of FGS, at an exercise price determined by the FGS board of directors in accordance with the requirements of the Incentive Plan, for 20,000 shares of common stock of FGS initially vested and exercisable upon grant, and 80,000 shares of common stock of FGS vesting and becoming exercisable over a four (4)-year period with 25% vesting on each anniversary of the IPO (defined below) subject to Executive’s continuous service through the applicable anniversary.

(2)           Additional IPO Award. Without limiting Sections 2(c)(i) or 2(c)(ii) above, in recognition of extraordinary efforts with respect to the IPO, the Company will recommend to the FGS board of directors that Executive receive an additional stock option award to purchase shares of common stock of FGS, at an exercise price determined by the FGS board of directors in accordance with the requirements of the Incentive Plan, for 15,000 shares of common stock of FGS initially vested and exercisable upon grant.

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(3)           Additional Award Terms. The Company will recommend in connection with the foregoing recommendations that (A) any such stock option award not be subject to any adjustment pursuant to Section 12 of the Incentive Plan, without Executive’s written consent, that would reduce the number of shares subject to the stock option or increase the exercise price applicable to the stock option (except to provide equitable adjustment with respect to a reverse stock split or other event specified in Section 12(i) of the Incentive Plan having a substantively similar effect on the outstanding capital of FGS), and (B) any such stock option award otherwise be subject to the general terms and conditions of the Incentive Plan.

(4)           Acknowledgement. Notwithstanding the foregoing, it is hereby acknowledged and agreed that no stock option award to Executive has been approved by the FGS board of directors, and Executive has no right to receive (and neither the Company nor FGS has any obligation to issue) any stock option award unless and until the FGS board of directors has actually approved any such stock option award and the full terms thereof (including the applicable exercise price).

(d)           Expense Reimbursement. During the Employment Term, the Executive shall be entitled to reimbursement of reasonable out-of-pocket business expenses incurred by Executive in furtherance of Company’s business in accordance with Company’s policies with respect thereto as in effect from time to time (the “Expense Reimbursement”). All reimbursements provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during Executive’s lifetime (or during a shorter period of time specified in this Agreement); (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year; (iii) the reimbursement of an eligible expense shall be made no later than the last day of the calendar year following the year in which the expense is incurred; and (iv) the right to reimbursement or in kind benefits is not subject to liquidation or exchange for another benefit.

(e)           Vacation. Executive shall be entitled to a minimum of three (3) weeks paid vacation per year, in accordance with the Company’s standard vacation policy.

(f)           Employee Benefits. During the Employment Term, Executive will be considered a full-time employee and be entitled to participate in the employee benefit plans and programs currently and hereafter maintained by the Company of general applicability to other Employees of Executive’s classification at the Company (the “Benefits”). The Company reserves the right to cancel or change the Benefit plans and programs it offers to its employees at any time. In the event of any dispute between this Agreement and the terms of any Benefit summary plan description, the terms of the summary plan description shall control.

3.           Effective Date; Term of Employment.

(a)           Employment Term; Effective Date. The “Employment Term” under this Agreement will commence on the Effective Date and will continue until the Executive’s employment terminated by either the Company or Executive as provided in Section 3(b) of this Agreement. This Agreement shall only become a legally effective agreement binding on Executive and the Company on the closing date (the “Effective Date”) of an initial public offering of the common stock of FGS pursuant to a registration statement filed under the Securities Act of 1933, as amended (an “IPO”). If an IPO does not close on or before November 10, 2021, then this Agreement shall thereafter be void and no legal force or effect.

(b)           Termination. Notwithstanding anything else contained in this Agreement, Executive’s employment hereunder shall terminate upon the earliest to occur of the following:

(i)            Death. Immediately upon Executive’s death.

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(ii)           Termination by Executive.

(1)           Generally. If terminated by Executive without Good Reason, upon written notice by Executive to the Board that Executive is terminating employment (a “Resignation Notice”), which termination shall be effective 60 days after the date of such notice, or such earlier date as specified in writing by the Company in its sole discretion during such 60-day period; or

(2)           For Good Reason. If terminated by Executive for Good Reason, upon written notice by Executive to Company that Executive is terminating Executive’s employment for Good Reason and that sets forth the factual basis supporting the Good Reason, which termination shall be effective 30 days after the date of such notice, or such earlier date as specified in writing by the Company in its sole discretion during such 30-day period. For the avoidance of doubt, such termination shall not constitute a termination for Good Reason if Company cures the conditions identified in Executive’s notice as provided in Section 3(d)(iii).

(iii)          Termination by the Company.

(1)           For Cause. If terminated by the Company for Cause (defined below), upon written notice by the Company to Executive that Executive’s employment is being terminated for Cause, which termination shall be effective on the date of such notice or such later date as specified in writing by the Company;

(2)           Without Cause or Disability. If terminated by the Company for reasons other than for Cause or Disability, upon written notice by Company to Executive that Executive’s employment is being terminated, which termination shall be effective immediately after the date of such notice or such later date as specified in writing by the Company; or

(3)           For Disability. If terminated by the Company because of Executive’s Disability (defined below), upon written notice by the Company to Executive that Executive’s employment is being terminated as a result of Executive’s Disability, which termination shall be effective 30 days after the date of such notice or such later date as specified in writing by the Company, unless within such period Executive becomes capable of rendering services of the character contemplated hereby (and a physician chosen by the Company so certifies in writing) and Executive in fact resumes such services.

(c)           Deemed Termination for Cause. Notwithstanding anything in this Agreement to the contrary, if (i) the Company at any time determines that Cause existed at the time of Executive’s termination or written notice thereof, (ii) Executive has breached or breaches the terms of Section 5, then upon written notice by the Company to Executive (i) the Executive’s termination shall be deemed be (or have been) terminated by the Company for Cause pursuant to Section 3(b)(iii)(1) (including for purposes of Section 4 and Section 6(g)(ii)(1)), (ii) the Company may immediately cease payments of any Basic Severance Payments and/or any Extended Severance Payments that may otherwise be due to Executive, and (iii) the Company may recover from Executive any Basic Severance Payments and/or any Extended Severance Payments that may have already been paid to Executive. The cessation and recovery of such any payments shall be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company with respect to the matters constituting Cause, including, without limitation, the right to specific performance and/or injunctive or other relief.

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(d)           Certain Definitions.

(i)           Definition of Cause. For purposes of this Agreement, “Cause” means any of the following: (A) conviction of, or the entry of a plea of guilty or no contest to, a felony, a crime of moral turpitude, or any other crime that causes the Company public disgrace or disrepute, or which materially and adversely affects the Company’s operations or financial performance or the relationship the Company has with its customers; (B) gross negligence or willful misconduct with respect to the Company, including, without limitation fraud, embezzlement, theft or proven dishonesty in the course of Executive’s employment or other service; (C) alcohol abuse or use of either illegal drugs or controlled drugs (other than in accordance with a physician’s prescription); (D) refusal to perform any lawful, material obligation or fulfill any duty (other than any duty or obligation of the type described in clause (F) below) to the Company (other than due to a disability, as determined by the Committee), which refusal, if curable, is not cured within 15 days after delivery of written notice thereof (and for the avoidance of doubt, the relevant refused obligation or duty will be specifically identified in such written notice); (E) material breach of any agreement with or duty owed to the Company, which breach, if curable, is not cured within 15 days after the delivery of written notice thereof (and for the avoidance of doubt, if applicable, the relevant breached duty will be specifically identified in such written notice); (F) any breach of any obligation or duty to the Company (whether arising by statute, common law or agreement) relating to confidentiality, non-competition, non-solicitation, trade secrets, and/or proprietary rights; (G) material violation of the Company’s written policies or codes of conduct, including those related to discrimination, harassment, performance of illegal or unethical practices, and ethical misconduct; or (H) in the case of a director, repeated failure to participate in Board meetings (including meetings of any Board committee of which the director is a member) on a regular basis despite having received proper notice of meetings in advance.

(ii)           Definition of Disability. For purposes of this Agreement, “Disability” means Executive’s inability to perform one or more of the essential functions of Executive’s job due to Executive’s physical or mental impairment, with or without reasonable accommodation as required by law, for any period aggregating more than 120 days in any 365 consecutive day period; provided however, that (A) if the Company determines that Executive has become Disabled, the Company shall notify Executive of its determination; (B) Executive may then request a reasonable accommodation (as that term is defined under the Americans with Disabilities Act) from the Company to assist in his/her return to work; (C) the Company will determine whether Executive’s request can be reasonably accommodated without undue hardship no later than 30 days after Executive requests an accommodation (with additional time being provided in the event of Executive or Executive’s medical provider delaying in providing information that is necessary to the Company’s determination); and (D) in the event Executive’s request cannot be reasonably accommodated (and/or presents an undue hardship), the Company may, by notice given in the manner provided in this Agreement, terminate Executive’s employment hereunder.

(iii)          Definition of Good Reason. For purposes of this Agreement, “Good Reason” means any of the following within the prior 90 days without Executive’s approval: (A) any material diminution of Executive’s authority, duties or responsibilities with or to the Company, other than (i) a paid leave of absence at the direction of and approved by the Board or (ii) an unpaid administrative leave imposed for the purposes of investigating or addressing misconduct by Executive; (B) the Board assigns Executive duties or responsibilities that are materially inconsistent with Executive’s position; (C) any material breach of this Agreement by the Company, including, without limitation, a reduction in Executive’s Base Salary below the amount specified in Section 2(a) without Executive’s consent; or (D) a change in the geographic location at which Executive must primarily perform services to a location more than 50 miles from Portsmouth, New Hampshire without Executive’s approval. Executive must give the Company written notice of Executive’s intention to terminate employment for Good Reason, which notice must state the grounds on which the proposed termination for Good Reason is based. Executive must provide such written notice of the occurrence of these grounds no later than 90 days after their initial occurrence. The Company may remedy these condition(s) within 15 days of receiving notice from Executive and no “Good Reason” will exist if the Company remedies such condition(s) during such 15-day period.

(iv)          Definition of Change in Control Period. For purposes of this Agreement, a “Change in Control Period ” means the one (1)-year period commencing six (6)-months prior to a Change in Control (as defined in the Incentive Plan).

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(e)           Transition Assistance. For a period of 30 days following the effective date of Executive’s resignation, Executive shall make himself or herself available to the Company and/or its agents (i) for the purpose of facilitating an efficient transition of Executive’s job related responsibilities and duties to other designated individuals, and (ii) to respond to questions from the Company and/or its agents regarding information and/or activities in which Executive was engaged while employed by the Company; provided that the foregoing time period is based on Executive’s reasonable efforts to cooperate, Executive will not be entitled to additional compensation for such availability and cooperation; and further provided that such assistance shall be reasonable and not substantially interfere or conflict with Executive’s responsibilities to any new employer.

4.             Payments upon Termination.

(a)           Generally; Accrued Obligations. If Executive’s employment is terminated for any reason, then the Company shall pay Executive the Accrued Obligations promptly following the effective date of such termination. “Accrued Obligations” means (A) the portion of Executive’s Base Salary that has accrued prior to any termination of Executive’s employment with Company and has not yet been paid, any bonus that has been awarded to Executive as of the date of termination of Executive’s employment but has not yet been paid to Executive, (B) and the amount of any unreimbursed Expense Reimbursement. Executive’s entitlement to any other compensation or benefit under any plan of Company shall be governed by and determined in accordance with the terms of such plans, except as otherwise specified in this Agreement.

(b)           Termination by the Company without Cause or Termination for Good Reason. If the Company terminates Executive’s employment without Cause or the Executive terminates Executive’s employment for Good Reason, then, in addition to the Accrued Obligations, and subject to (A) the Executive signing a separation and release agreement in the form attached as Exhibit A, and as such form may be updated by the Company from time to time at any time to conform with changes in applicable laws (a “General Release”) and (B) the General Release becoming effective and irrevocable, all within 60 days after the date of termination (or such shorter period as set forth in the General Release), the Company shall pay Executive:

(i)            the Basic Severance Payments, or

(ii)           if the Board, in its sole discretion, elects (by written notice to Executive within 10 days following the termination of Executive’s employment) that the Company will pay Extended Severance Payments to Executive instead of the Basic Severance Payments pursuant to Section 4(b)(i), the Extended Severance Payments (instead of the Basic Severance Payments); and

if applicable pursuant to Section 2(b), an Annual Bonus with respect to the preceding annual period.

(c)           Terminations without Cause during a Change in Control Period. If the Company terminates Executive’s employment without Cause during a Change in Control Period, then, in addition to the Accrued Obligations, and subject to (i) the Executive signing a General Release and (ii) the General Release becoming effective and irrevocable, all within 60 days after the date of termination (or such shorter period as set forth in the General Release), the Company shall pay Executive the Extended Severance Payments.

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(d)           COBRA Premiums.

(i)           Subject to Section 4(d)(ii), if (A) Executive is entitled to Basic Severance Payments or Extended Severance Payments (including, without limitation, Executive’s timely execution and delivery of a General Release that has become effective and irrevocable), and (B) Executive is eligible for and timely and properly elects continuation health care coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), then the Company will pay or promptly reimburse the COBRA premium amounts required for the continued coverage of Executive and Executive’s dependents (if any) under the Company’s group health care plans at the same levels that would have applied if Executive’s employment had not terminated (if possible) until the end of the Basic Severance Term or Extended Severance Term, as applicable (or until such earlier time as Executive ceases to be eligible for COBRA coverage, if earlier) (the “COBRA Premiums”). Notwithstanding the foregoing, if the Company determines, in its sole discretion, that it cannot pay the COBRA Premium without a substantial risk of violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), the Company instead shall pay Executive a monthly cash payment equal to the applicable COBRA Premium for that month.

(ii)           If, however, health care insurance benefits are available to Executive from a new employer, the Company shall have no further obligation relating to payment of additional COBRA Premiums. Executive agrees to promptly inform the Company if and when health care insurance benefits are available from a new employer, and to reimburse the Company for any amounts paid with respect to COBRA Premiums to the extent paid after health care insurance benefits are available to Executive from a new employer.

(e)           Certain Definitions.

(i)            Basic Severance Payments; Basic Severance Term. For purposes of this Agreement, “Basic Severance Payments” means, to the extent applicable, the monthly cash severance at the Base Salary rate, less standard withholdings and deductions, to be paid during the Basic Severance Term. For purposes of this Agreement, “Basic Severance Term” means the six (6)-month period immediately following the termination date of Executive’s employment.

(ii)           Extended Severance Payments; Extended Severance Term. For purposes of this Agreement, “Extended Severance Payments” means, to the extent applicable, the monthly cash severance at the Base Salary rate, less standard withholdings and deductions, to be paid during the applicable Extended Severance Term. For purposes of this Agreement, “Extended Severance Term” means the one (1)-year period immediately following the termination date of Executive’s employment.

(f)            Execution of General Release. For the avoidance of doubt, the Company shall not be obligated to pay Executive any severance payments unless a General Release has been timely executed and delivered by Executive and such General Release has become effective and irrevocable.

(g)           Limited Rights to Severance Payments. For clarity, (i) entitlement to severance payments of any kind pursuant to this Agreement shall only be possible if (A) the Company terminates Executive’s employment without Cause, or (B) Executive terminates this Agreement for Good Reason; and (ii) no severance payment obligations shall arise out of (W) a termination of this Agreement by the Company with Cause, (X) a termination of this Agreement by the Executive without Good Reason, or (Y) a termination of this Agreement due to Executive’s death or Disability.

(h)           No Continued Vesting. For the avoidance of doubt, vesting of any grants under the Incentive Plan or any other stock, stock option or other incentive awards shall cease upon the date of any termination of Executive’s employment, and shall not continue to vest for the remainder of any Noncompetition Period, Non-Solicitation Period or during any applicable Basic Severance Term or Extended Severance Term.

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(i)            Execution of General Release. In accordance with Section 4(b), Section 4(c) and Section 4(d), to receive the payments set forth in those Sections, Executive’s or Executive’s estate’s, if applicable, General Release must be executed, effective and irrevocable before the expiration of 60 days after the date of termination. The payments specified in these Sections will begin as soon as practicable (not to exceed 30 days) after the General Release is executed, effective and irrevocable, but if the 60-day period could span two (2) tax years, the payments must be made in the later year. For example, if the Company terminates Executive’s employment without Cause on December 15, Executive has 60 days—until February 13 —for a General Release to be sign and become effective and irrevocable. In this case, payments due in accordance with Section 4(b), Section 4(c) or Section 4(d) may not begin until the following year, even if the release was signed, effective and irrevocable in December. If Executive’s or Executive’s estate’s, if applicable, General Release is not executed, effective and irrevocable before the end of the 60-day-period, then the Executive and Executive’s estate forfeit, on behalf of Executive and all who might claim through Executive, the payments that would otherwise be due under the applicable Section of this Agreement.

5.             Confidentiality and Invention Assignment Agreement. Executive has executed, and as applicable shall execute, the Company’s Confidentiality and Invention Assignment Agreement, the current form of is attached as Exhibit B, and as updated from time to time (“CIIA”), the provisions of which are hereby incorporated by reference and shall govern the Executive’s obligations and responsibilities with regard to the Company Confidential Information (as that term is defined in the CIIA), the assignment of intellectual property, and other matters. Executive agrees to comply with the terms of the CIIA. To the extent that any provision of the CIIA conflicts with any provision in this Agreement, the provisions requiring Executive to comply with the higher standard shall govern.

6.             Restrictive Covenants.

(a)           Acknowledgement. Executive agrees that, during the Employment Term, Executive (i) has a duty of loyalty to the Company, and (ii) shall not engage in or undertake any action that conflicts with the undivided loyalty owed by Executive to the Company. Executive represents and warrants that Executive has no other agreements, relationships, or commitments to any other person or entity that conflict with the provisions of this Agreement, Executive’s obligations to the Company under this Agreement, or Executive’s ability to perform Executive’s duties to the Company. Executive acknowledges and agrees that: (A) Executive’s employment with the Company has brought Executive into close contact with Confidential Information of the Company and its customers, vendors, suppliers, employees, and independent contractors; and (B) the agreements and covenants contained in this Section 6 are essential, reasonable, and no broader than necessary to protect the reasonable business interests and goodwill of the Company. Executive further acknowledges, represents, and agrees that the terms of this Section 6 do not and will not pose an undue hardship on Executive, and that Executive will be able to maintain gainful employment notwithstanding the terms of this Section 6. Executive further acknowledges, represents, and agrees that he/she has received valuable consideration (including, but not limited to, a payment of five hundred dollars ($500.00) that is expressly for the purposes of serving as consideration for this Section 6) that is sufficient to support the promises being made by Executive herein. Accordingly, Executive covenants and agrees to the following restrictive covenants.

(b)           Non-Solicitation of Company Employees and Contractors. Executive agrees that during the Non-Solicitation Period (defined below), Executive shall not directly or indirectly (i) hire, employ, recruit, solicit, lure or entice away, or in any other manner persuade or attempt to persuade, any employee of the Company to discontinue such employee’s employment with the Company or (ii) solicit or encourage any independent contractor providing services to the Company to terminate or diminish its relationship with the Company; provided, that, the foregoing shall not be breached by general advertisements not targeted at employees or independent contractors of the Company.

(c)           Non-Solicitation of Company Customers. Executive agrees that, during the Non-Solicitation Period, Executive shall not directly or indirectly (i) solicit or assist in the solicitation by any third party of any Covered Customer (defined below) for the purpose of providing services or products that compete with, or are similar to, the service or product offerings of the Company, except when such solicitation is done on behalf of the Company, or (ii) discourage any Covered Customer from obtaining of services or products from the Company.

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(d)           Non-Interference with Vendors and Service Providers. Executive agrees that, during the Non-Solicitation Period, Executive shall not directly or indirectly negatively influence or otherwise interfere with the Company’s relationships with vendors, suppliers, consultants, advisors, or other service providers of the Company.

(e)           Non-Competition with the Company. Executive agrees that, during the Non-Competition Period, Executive shall not directly or indirectly, as a director, manager, member, stockholder, partner, owner, employee, consultant, or agent of any business, or in any other capacity, other than on behalf of the Company, organize, establish, own, operate, manage, control, engage in, participate in, invest in, permit Executive’s name to be used by, act as a consultant or advisor to, render services for (alone or in association with any person, firm, corporation, or other entity), or otherwise assist any person or entity that engages in or owns, invests in, operates, manages, or controls any venture or enterprise in all or a part of the Restricted Area, that engages in (A) the manufacture, sale, lease, service or other manner of offering of products or services that provide natural gas or hydrogen fueled distributed power generation with a single unit nameplate capacity of up to 5MW (which excludes, for the avoidance of doubt, the manufacture, sale, lease, service or other manner of offering of batteries, solar or wind powered energy generation equipment, or electrochemical (non-combustion) powered fuel cells), (B) the manufacture, sale, lease, service or other manner of offering of heat exchanger/transfer products that can operate with gases at a temperature above 1000° Fahrenheit or (C) any other new line of business, products or services offered or in development by FGS or any direct or indirect subsidiary thereof during the prior six months of the Employment Term and in which Executive has had material involvement (the “Restricted Business”). Notwithstanding the foregoing, nothing in this Agreement shall prevent Executive from owning, directly or indirectly, for passive investment purposes not intended to circumvent this Agreement, less than 2% of the publicly traded common equity securities of any company engaged in the Business (so long as Executive has no power to manage, operate, advise, consult with, or control the competing enterprise and no power, alone or in conjunction with other affiliated parties, to select a director, manager, general partner, or similar governing official of the competing enterprise other than in connection with the normal and customary voting powers afforded Executive in connection with any permissible equity ownership). Notwithstanding the foregoing, nothing in this Section 6(e) shall be deemed to restrict Executive from employment (and potentially associated ownership therein) with a private equity firm, venture capital firm, family office investment firm, structured debt financing or infrastructure investment firm (including such a firm focused on the energy industry), so long as (i) Executive shall not have responsibility for, nor provide any work or services directly for or the direct benefit of, any person or entity (whether an actual portfolio, prospective portfolio or otherwise) engaged in the Restricted Business, and (ii) Executive complies with Executive’s other continuing confidentiality, non-solicitation, non-interference, non-disparagement and other associated obligations under this Agreement in connection with Executive’s employment with such private equity firm.

(f)            Non-Disparagement. Executive also agrees that, during the Non-Solicitation Period, Executive shall not directly or indirectly (i) disparage the Company, its affiliates and their respective directors, officers, managers, managers, employees, or agents, or (ii) make any public statement that could reasonably be expected to materially and adversely affects the reputation, brand, or business of the Company. This provision does not apply to any statements made to governmental agencies for the purposes of asserting, or participating in any investigation by such agencies concerning, Executive’s statutory rights. In the event of a termination of Executive’s employment (other than a termination for Cause, including pursuant to Section 3(c)), subject to a General Release for Executive being signed, delivered, effective and irrevocable, and further subject to Executive’s compliance and continuing compliance with Executive’s continuing obligations of this Agreement (including this Section 6), then the Company shall cause the FGS board of directors and FGS executive officers (while such individuals serve in such capacities) not to disparage Executive during the remainder of the Non-Solicitation Period. This provision does not apply to any statements or other disclosures by the Company, the FGS board of directors or FGS executive officers for the purpose of or necessary for compliance with federal or state securities laws, as well as rules of any securities exchange on which any securities of the Company, including FGS, are then traded.

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(g)           Certain Defined Terms. The following terms, when used in this Section 6, will have the respective meanings set forth below:

(i)            “Restricted Area” means the area within the United States, Canada and each other country and territory for which the Company has provided products or services or in which the Company has otherwise done business during Executive’s employment with the Company; provided however if any court of competent jurisdiction determines that the geographic scope of such Restricted Area is unreasonable, the “Restricted Area” means with respect to the United States, Canada and each other country and territory for which the Company has provided products or services or in which the Company has otherwise done business during Executive’s employment with the Company, the area within each state or territory thereof for which the Company has provided products or services or in which the Company has otherwise done business during Executive’s employment with the Company; provided however if any court of competent jurisdiction determines that the geographic scope of such Restricted Area is unreasonable, the “Restricted Area” means with respect to the United States, Canada and each other country and territory for which the Company has provided products or services or in which the Company has otherwise done business during Executive’s employment with the Company, the area within each county or similar jurisdiction thereof for which the Company has provided products or services or in which the Company has otherwise done business during Executive’s employment with the Company; provided, however if any court of competent jurisdiction determines that the geographic scope of such Applicable Area is unenforceable, the “Restricted Area” means within 50 miles of any location at which the Company has provided products or services or in which the Company has otherwise done business during Executive’s employment with the Company.

(ii)           “Non-Competition Period” means:

(1)           the period during Executive’s employment with the Company and for the one (1)-year period after the end of Executive’s employment with the Company if Executive’s employment (A) is terminated by the Company for Cause, (B) is terminated by the Company without Cause during a Change in Control Period, or (C) is terminated by Executive other than for Good Reason.

(2)           the period during Executive’s employment with the Company and for the six (6)-month period after the end of Executive’s employment with the Company if Executive’s employment is terminated in any circumstances not provided in Section 6(g)(ii)(1)(A), (B) or (C) above; provided, however, that the Board may, in its sole discretion, elect (by written notice to Executive within 10 days following the termination of Executive’s employment) that the Company will pay Extended Severance Payments to Executive (instead of any Basic Severance Payments), in which case the “Non-Competition Period” instead means the period during the Executive’s employment with the Company and for the one (1)-year period after the end of Executive’s employment with the Company.

(iii)           “Non-Solicitation Period” means the period during Executive’s employment with the Company and for the one (1)-year period after the end of Executive’s employment with the Company.

(iv)           “Company” includes the Company and any of the Company’s affiliates.

(v)           “Covered Customers” means persons; firms; associations; partnerships; corporations; limited liability companies; institutions, local, state, federal and foreign entities or agencies; and other entities (A) to which the Company provided services or products before or during Executive’s employment with the Company, (B) in relation to which Executive has provided any of the Services, or (C) that the Company (or Executive in connection with the Services) has contacted or solicited with respect to the provision of services or products before or during Executive’s employment with the Company.

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(vi)           An “employee” or “independent contractor” of the Company is any person who is an employee or independent contractor, respectively, of any of the Company on the date hereof or who becomes an employee or independent contractor of the Company during Executive’s employment with the Company.

(h)           Remedies. If Executive breaches any of the provisions contained in this Section 6, the Company shall have the remedies set forth below, each of which shall be enforceable, and each of which is in addition to, and not in lieu of, any other rights and remedies available to the Company at law or in equity. The provisions of this Section 6 are intended to be for the benefit of the Company and its affiliates, and any of the Company or its affiliate may enforce such provisions. Executive recognizes and acknowledges that a breach of the covenants contained in this Section 6 will cause irreparable harm to the goodwill and business of the Company, the exact amount of which will be difficult to ascertain, and that the remedies at law for any such breach will be inadequate. Accordingly, in the event of an alleged or threatened breach by Executive of any of the provisions of this Section 6, the Company may, in addition to all other rights and remedies existing in its favor, seek specific performance and/or injunctive or other relief in order to enforce or prevent any violations of the provisions hereof. Additionally, if Executive breaches Executive’s obligations under Section 5 or Section 6, then the Company may immediately cease payments of any Basic Severance Payments and/or any Extended Severance Payments and may recover any Basic Severance Payments and/or any Extended Severance Payments paid to Executive after such breach. The cessation and recovery of such payments shall be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company including, without limitation, the right to specific performance and/or injunctive or other relief.

(i)            Severability. In the event any provision of this Section 6 shall be determined by a court of competent jurisdiction to be unenforceable by reason of its extending for too great a period of time or over too great a geographical area or by reason of its being too extensive in any other respect, it will be interpreted to extend only over the maximum period of time for which it may be enforceable, over the maximum geographical area as to which it may be enforceable, or to the maximum extent in all other respects as to which it may be enforceable, all as determined by such court in such action. If any provision of this Agreement, or any part thereof, is held to be invalid or unenforceable because of the scope or duration of or the area covered by such provision, the parties agree that the court making such determination shall reduce the scope, duration and/or area of such provision (and shall substitute appropriate provisions for any such invalid or unenforceable provisions) in order to make such provision enforceable to the fullest extent permitted by law and/or shall delete specific words and phrases, and such modified provision shall then be enforceable and shall be enforced. In the event that any court determines that the time period or the area, or both, are unreasonable and that any of the covenants is to that extent invalid or unenforceable, the parties agree that such covenants will remain in full force and effect, first, for the greatest time period, and second, in the greatest geographical area that would not render them unenforceable.

(j)           Enforceability. The Parties each acknowledge that the other party acted in good faith in the negotiation and execution of the provisions in this Section 6. In particular, the Parties acknowledge that given the nature of Executive’s duties and responsibilities (and Executive’s associated influence over the Company’s business and its relationships with its customers), the restrictions and duration of the obligations set forth in this Section 6 are reasonable and no broader than necessary to protect the legitimate business interests of the Company and the goodwill thereof. Executive further acknowledges that the restrictions and duration of this Section 6 do not and will not impose an unreasonable hardship upon Executive. The Parties further agree that the requirements of this Section 6 shall survive the termination of Executive’s employment with the Company.

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(k)           Waiver or Inapplicability of Non-Competition Obligations. Executive may submit to the Board a written description setting out a reasonable description (including without limitation the identity of any associated employer and other relevant parties) of any contemplated activity that would or may otherwise violate or contravene Executive’s obligations under Section 6(e) (the “Specified Activity”), and request that the Board waive or otherwise confirm the inapplicability of Executive’s obligations under Section 6(e) with respect to such Specified Activity. If and to the extent the Board confirms in writing to Executive the waiver or inapplicability of Executive’s obligations under Section 6(e) with respect to the Specified Activity (such waiver or confirmation, not to be unreasonably withheld based on the interests of the Company), then Executive shall thereafter have no liability or obligation under Section 6(e) with respect to the Specified Activity.

7.            Assignment. This Agreement will be binding upon and inure to the benefit of (a) the heirs, executors and legal representatives of Executive upon Executive’s death and (b) any successor of the Company. Any such successor of the Company will be deemed substituted for the Company under the terms of this Agreement for all purposes. For this purpose, “successor” means any person, firm, corporation or other business entity which at any time, whether by purchase, merger or otherwise, directly or indirectly acquires all or substantially all of the assets or business of the Company. None of the rights of Executive to receive any form of compensation or benefits pursuant to this Agreement may be assigned or transferred except by will or the laws of descent and distribution. None of the obligations of Executive under this Agreement may be assigned or transferred. Any other attempted assignment, transfer, conveyance or other disposition of Executive’s right to compensation or other benefits will be null and void.

8.           Notices. All notices, requests, demands and other communications called for under this Agreement will be in writing and will be delivered personally by hand or by courier, mailed by United States first-class mail, postage prepaid, or sent by email or by other electronic means directed to the party to be notified at the address or email address indicated for such party on the signature page to this Agreement, or at such other address or email address as such party may designate by 10 days’ advance written notice to the other parties hereto. All such notices and other communications will be deemed given upon personal delivery, three (3) days after the date of mailing, or when sent if given via email or other electronic means.

9.           Severability. In the event that any provision(s) of this Agreement becomes or is declared by an arbitrator or a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement will continue in full force and effect without such provision(s).

10.           Arbitration.

READ THE FOLLOWING ARBITRATION PROVISION CAREFULLY. IT LIMITS CERTAIN OF YOUR RIGHTS, INCLUDING YOUR RIGHT TO OBTAIN REDRESS THROUGH COURT ACTION

(a)           Executive and the Company agree that other than any claims (by Company or Executive) for injunctive relief, any dispute or controversy arising out of, relating to, or in connection with this Agreement, or the interpretation, validity, construction, performance, breach, or termination thereof, will be settled by binding arbitration to be held in New Hampshire in accordance with the National Rules for the Resolution of Employment Disputes then in effect of the American Arbitration Association (the “Rules”). The arbitrator may grant injunctions or other relief in such dispute or controversy. The decision of the arbitrator will be final, conclusive and binding on the parties to the arbitration. Judgment may be entered on the arbitrator’s decision in any court having jurisdiction.

(b)           The arbitrator(s) will apply New Hampshire law to the merits of any dispute or claim, without reference to rules of conflicts of law. The arbitration proceedings will be governed by federal arbitration law and by the Rules, without reference to state arbitration law.

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(c)           EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE AGREES TO SUBMIT ANY CLAIMS (OTHER THAN THOSE FOR INJUNCTIVE RELIEF) WHICH ARISE OUT OF, RELATE TO, OR ARE IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF TO BINDING ARBITRATION, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE’S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EMPLOYEE RELATIONSHIP, INCLUDING BUT NOT LIMITED TO, CLAIMS OF DISCRIMINATION, HARASSMENT, OR RETALIATION, OTHER THAN CLAIMS FOR INJUNCTIVE RELIEF.

(d)           The Parties each acknowledge and agree that they have had ample time to consider the terms of this arbitration agreement, that they each negotiated it at arms-length with equal bargaining power,

Executive Signature Signifying Agreement To Arbitration

11.           Integration/Waiver. This Agreement, its exhibits, and the confidentiality and invention assignment agreement described in Section 5 above represent the entire agreement and understanding between the parties as to the subject matter herein and supersede all prior or contemporaneous agreements whether written or oral, including without limitation any employment agreement previously signed by Executive. To the extent that any provision of the CIIA conflicts with any provision in this Agreement, the provisions requiring Executive to comply with the higher standard shall govern. No waiver, alteration or modification of any of the provisions of this Agreement will be binding unless in writing and signed by duly authorized representatives of the parties hereto.

12.           Tax Withholding. All payments made pursuant to this Agreement will be subject to applicable taxes and other withholdings or deductions authorized or required by law.

13.           Governing Law; Consent to Personal Jurisdiction. THIS AGREEMENT WILL BE GOVERNED BY THE LAWS OF THE STATE OF NEW HAMPSHIRE WITHOUT REGARD FOR CONFLICTS OF LAWS PRINCIPLES. EACH PARTY EXPRESSLY CONSENTS TO THE PERSONAL JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN THE DISTRICT OF NEW HAMPSHIRE SUBJECT TO THE ARBITRATION PROVISION SET FORTH IN SECTION 10.

14.           Attorneys’ Fees. In the event of arbitration or litigation arising from or relating to this Agreement, each party shall be responsible for such party’s own attorneys’ fees and costs and expenses including expert witness fees.

15.           Construction of Agreement. The parties have participated jointly in the negotiating and drafting of this Agreement. If a question concerning intent or interpretation arises, no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of authorship.

16.           Captions. Titles or captions contained in this Agreement are for convenience and are not intended to affect the substantive meaning of any provision.

17.           Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

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18.           Code Section 409A. To the fullest extent applicable, amount and other benefits payable under this Agreement are intended to be exempt from the definition of “nonqualified deferred compensation” under section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”) in accordance with one or more of the exemptions available under the final Treasury regulations promulgated under Section 409A and, notwithstanding anything in the Agreement to the contrary, to the extent that any such amount or benefit is or becomes subject to Section 409A due to a failure to qualify for an exemption from the definition of nonqualified deferred compensation in accordance with such final Treasury regulations, this Agreement must be interpreted and administered to the extent possible, or amended, to comply with the applicable requirements of Section 409A with respect to these amounts or benefits.

[Signature page follows]

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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officer, as of the day and year first above written.

“COMPANY”

FlexEnergy Energy Systems, Inc.

By:

Name:

Title:

Date:

Address:

112 Corporate Drive, Suite 3

Portsmouth, NH 03801

Attn.: Board of Directors

Email:

“EXECUTIVE”

Wes Kimmel

Date:

Address:

Email:

Exhibit A

Form of General Release

Exhibit B

Form of Confidentiality and Invention Assignment Agreement

EX-10.7

Exhibit 10.7

FLEX LEASING POWER & SERVICE LLC

EXECUTIVE EMPLOYMENT AGREEMENT

This Executive Employment Agreement (this “Agreement”) is entered by and between Flex Leasing Power & Service LLC, a Delaware limited liability company (the “Company”), and Doug Baltzer (“Executive”).

1.            Duties and Scope of Employment.

(a)            Title and Duties. As of the Effective Date (as defined in Section 3 below), Executive will be employed and serve as President of the Company. During the Employment Term, and without any additional compensation in connection with such service, Executive shall also serve as an officer of such affiliates of the Company as the Board may determine from time to time. During the Employment Term (as defined in Section 3 below), Executive will have authority and render such business and professional services in the performance of Executive’s duties as are customarily associated with Executive’s position(s) provided above, and Executive agrees to perform such other duties and functions as may from time to time be reasonably determined by the Board. The “Board” means (i) the board of directors of FlexEnergy Green Solutions, Inc. (“FGS”) if the Company is a direct or indirect subsidiary of FGS; or (ii) the board of directors or analogous governing body of the Company if the Company is not a direct or indirect subsidiary of FGS.

(b)            Obligations. During the Employment Term, and excluding any periods of vacation, sick leave, or other leave to which the Executive is entitled, Executive will perform Executive’s duties faithfully and to the best of Executive’s ability and will devote such time as reasonably necessary to fulfill Executive’s responsibilities in the position. Executive and the Company agree that the Company represents Executive’s principal business focus. Except as may otherwise be approved by the Company from time to time, Executive’s services shall be primarily performed at the Company’s office at Greenwood Village, Colorado, or other locations less than 50 miles from such location determined by the Company. Executive agrees to travel as reasonably necessary to fulfill Executive’s responsibilities in the position. During the Employment Term, Executive agrees that Executive shall maintain loyalty to the Company, shall take no action that would be injurious to the Company interests, and shall comply with all rules, regulations and policies of the Company. During the Employment Term, it shall not be a violation of this Agreement for Executive to (i) serve on up to two (2) civic or charitable boards or committees (and other board and committees from time to time as approved by the Board), (ii) deliver lectures, fulfill speaking engagements or teach at educational institutions, or (iii) manage personal investments and business endeavors, so long as such activities do not significantly interfere with the performance of the Executive’s responsibilities as an employee of the Company in accordance with this Agreement.

(c)            Executive’s Employability. Executive represents and warrants that: (i) Executive has the right to execute, deliver and perform Executive’s duties under this Agreement, and (ii) Executive is not a party to any other agreements, arrangements or obligations (e.g., confidentiality agreements, noncompetition agreements), whether written, oral or implied, which include terms that would limit Executive’s ability to execute, deliver and perform Executive’s duties under this Agreement or which are otherwise inconsistent with this Agreement. This warranty will remain in full force and effect throughout the Employment Term (as defined in Section 3 below).

2.            Compensation.

(a)            Base Salary. During the Employment Term, the Company will pay Executive as compensation for Executive’s services a base salary at rate of $24,625.00 per month (the “Base Salary”). The Base Salary will be paid in regular installments in accordance with the Company’s normal payroll practices, subject to applicable deductions and withholdings. The first and last payment will be adjusted, if necessary, to reflect a commencement or termination date other than the first or last working day of a pay period.

(b)            Annual Bonus. Executive shall be eligible for an annual bonus (collectively the “Annual Bonus”) during the Employment Term in a target amount equal to 50% of Base Salary, to be earned based on such targets, criteria, terms and conditions as be determined by the Board (or a duly authorized committee thereof) in its sole discretion, subject to the terms of this Agreement. Any such Annual Bonus (i) will only be determined and awarded after the completion of the audited financial statements for FGS with respect to the applicable annual period for which the Annual Bonus is to be earned; (ii) will only be awarded and paid if both (A) Executive remains employed with the Company during the full annual period for which the Annual Bonus is to be earned and (B) (I) Executive remains employed with the Company through the award and payment of the Annual Bonus or (II) subject to Section 4(b), Executive’s employment with the Company is terminated by the Company without Cause between the last day of the annual period for which the Annual Bonus is to be earned and the date on which the Annual Bonus would otherwise be paid; and (iii) will be paid as soon as practicable, but not later than 45 days, after the completion and public release of audited financial statements for FGS with respect to the applicable annual period for which the Annual Bonus is earned.

(c)            Equity Incentives.

(i)            Incentive Award Plan Eligibility. Executive shall be eligible to participate in, and receive one or more grants under, the FlexEnergy Green Solutions, Inc. 2021 Incentive Award Plan (the “Incentive Plan”). Any such awards and the terms and conditions thereof shall be subject to the discretion of the board of directors of FGS and set forth in award documentation as such board of directors deems reasonably necessary in connection with any such award.

(ii)            Issuance of Shares One Year After IPO. The Company agrees to cause the issuance to Executive of 12,000 shares of common stock of FGS under the Incentive Plan (pursuant to then-current forms of award agreement under the Incentive Plan) after the one (1) year anniversary of the IPO (as defined in Section 3 below) if (A) Executive remains employed by the Company throughout the one (1)-year period immediately following the IPO, (B) Executive is terminated by the Company without Cause (defined below) during one (1)-year period immediately following the IPO, or (C) Executive terminates this Agreement for Good Reason.  For the avoidance of doubt, no shares will be issued to Executive if Executive fails to remain employed by the Company during the one (1)-year period immediately following the IPO under any other circumstances (ex. resignation by Executive, termination by the Company for Cause).

(iii)            Initial Stock Option Award. Without limiting Sections 2(c)(i) or 2(c)(ii) above, the Company will recommend to the FGS board of directors that Executive receive a stock option award to purchase shares of common stock of FGS, (A) at an exercise price determined by the FGS board of directors in accordance with the requirements of the Incentive Plan, (B) 20,000 shares of common stock of FGS initially vested and exercisable upon grant, and 80,000 shares of common stock of FGS vesting and becoming exercisable over a four (4)-year period with 25% vesting on each anniversary of the IPO (defined below) subject to Executive’s continuous service through the applicable anniversary, (C) not subject to any adjustment pursuant to Section 12 of the Incentive Plan, without Executive’s written consent, that would reduce the number of shares subject to the stock option or increase the exercise price applicable to the stock option (except to provide equitable adjustment with respect to a reverse stock split or other event specified in Section 12(i) of the Incentive Plan having a substantively similar effect on the outstanding capital of FGS), and (D) otherwise subject to the general terms and conditions of the Incentive Plan. Notwithstanding the foregoing, it is hereby acknowledged and agreed that no stock option award to Executive has been approved by the FGS board of directors, and Executive has no right to receive (and neither the Company nor FGS has any obligation to issue) any stock option award unless and until the FGS board of directors has actually approved any such stock option award and the full terms thereof (including the applicable exercise price).

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(d)            Expense Reimbursement. During the Employment Term, the Executive shall be entitled to reimbursement of reasonable out-of-pocket business expenses incurred by Executive in furtherance of Company’s business in accordance with Company’s policies with respect thereto as in effect from time to time (the “Expense Reimbursement”). All reimbursements provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during Executive’s lifetime (or during a shorter period of time specified in this Agreement); (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year; (iii) the reimbursement of an eligible expense shall be made no later than the last day of the calendar year following the year in which the expense is incurred; and (iv) the right to reimbursement or in kind benefits is not subject to liquidation or exchange for another benefit.

(e)            Vacation. Executive shall be entitled to a minimum of three (3) weeks paid vacation per year, in accordance with the Company’s standard vacation policy.

(f)            Employee Benefits. During the Employment Term, Executive will be considered a full-time employee and be entitled to participate in the employee benefit plans and programs currently and hereafter maintained by the Company of general applicability to other Employees of Executive’s classification at the Company (the “Benefits”). The Company reserves the right to cancel or change the Benefit plans and programs it offers to its employees at any time. In the event of any dispute between this Agreement and the terms of any Benefit summary plan description, the terms of the summary plan description shall control.

3.            Effective Date; Term of Employment.

(a)            Employment Term; Effective Date. The “Employment Term” under this Agreement will commence on the Effective Date and will continue until the Executive’s employment terminated by either the Company or Executive as provided in Section 3(b) of this Agreement. This Agreement shall only become a legally effective agreement binding on Executive and the Company on the closing date (the “Effective Date”) of an initial public offering of the common stock of FGS pursuant to a registration statement filed under the Securities Act of 1933, as amended (an “IPO”). If an IPO does not close on or before November 10, 2021, then this Agreement shall thereafter be void and no legal force or effect.

(b)            Termination. Notwithstanding anything else contained in this Agreement, Executive’s employment hereunder shall terminate upon the earliest to occur of the following:

(i)            Death. Immediately upon Executive’s death.

(ii)            Termination by Executive.

(1)            Generally. If terminated by Executive without Good Reason, upon written notice by Executive to the Board that Executive is terminating employment (a “Resignation Notice”), which termination shall be effective 60 days after the date of such notice, or such earlier date as specified in writing by the Company in its sole discretion during such 60-day period; or

(2)            For Good Reason. If terminated by Executive for Good Reason, upon written notice by Executive to Company that Executive is terminating Executive’s employment for Good Reason and that sets forth the factual basis supporting the Good Reason, which termination shall be effective 30 days after the date of such notice, or such earlier date as specified in writing by the Company in its sole discretion during such 30-day period. For the avoidance of doubt, such termination shall not constitute a termination for Good Reason if Company cures the conditions identified in Executive’s notice as provided in Section 3(d)(iii).

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(iii)            Termination by the Company.

(1)            For Cause. If terminated by the Company for Cause (defined below), upon written notice by the Company to Executive that Executive’s employment is being terminated for Cause, which termination shall be effective on the date of such notice or such later date as specified in writing by the Company;

(2)            Without Cause or Disability. If terminated by the Company for reasons other than for Cause or Disability, upon written notice by Company to Executive that Executive’s employment is being terminated, which termination shall be effective immediately after the date of such notice or such later date as specified in writing by the Company; or

(3)            For Disability. If terminated by the Company because of Executive’s Disability (defined below), upon written notice by the Company to Executive that Executive’s employment is being terminated as a result of Executive’s Disability, which termination shall be effective 30 days after the date of such notice or such later date as specified in writing by the Company, unless within such period Executive becomes capable of rendering services of the character contemplated hereby (and a physician chosen by the Company so certifies in writing) and Executive in fact resumes such services.

(c)            Deemed Termination for Cause. Notwithstanding anything in this Agreement to the contrary, if (i) the Company at any time determines that Cause existed at the time of Executive’s termination or written notice thereof, (ii) Executive has breached or breaches the terms of Section 5, then upon written notice by the Company to Executive (i) the Executive’s termination shall be deemed be (or have been) terminated by the Company for Cause pursuant to Section 3(b)(iii)(1) (including for purposes of Section 4 and Section 6(g)(ii)(1)), (ii) the Company may immediately cease payments of any Basic Severance Payments and/or any Extended Severance Payments that may otherwise be due to Executive, and (iii) the Company may recover from Executive any Basic Severance Payments and/or any Extended Severance Payments that may have already been paid to Executive. The cessation and recovery of such any payments shall be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company with respect to the matters constituting Cause, including, without limitation, the right to specific performance and/or injunctive or other relief.

(d)            Certain Definitions.

(i)            Definition of Cause. For purposes of this Agreement, “Cause” means any of the following: (A) conviction of, or the entry of a plea of guilty or no contest to, a felony, a crime of moral turpitude, or any other crime that causes the Company public disgrace or disrepute, or which materially and adversely affects the Company’s operations or financial performance or the relationship the Company has with its customers; (B) gross negligence or willful misconduct with respect to the Company, including, without limitation fraud, embezzlement, theft or proven dishonesty in the course of Executive’s employment or other service; (C) alcohol abuse or use of either illegal drugs or controlled drugs (other than in accordance with a physician’s prescription); (D) refusal to perform any lawful, material obligation or fulfill any duty (other than any duty or obligation of the type described in clause (F) below) to the Company (other than due to a disability, as determined by the Committee), which refusal, if curable, is not cured within 15 days after delivery of written notice thereof (and for the avoidance of doubt, the relevant refused obligation or duty will be specifically identified in such written notice); (E) material breach of any agreement with or duty owed to the Company, which breach, if curable, is not cured within 15 days after the delivery of written notice thereof (and for the avoidance of doubt, if applicable, the relevant breached duty will be specifically identified in such written notice); (F) any breach of any obligation or duty to the Company (whether arising by statute, common law or agreement) relating to confidentiality, non-competition, non-solicitation, trade secrets, and/or proprietary rights; (G) material violation of the Company’s written policies or codes of conduct, including those related to discrimination, harassment, performance of illegal or unethical practices, and ethical misconduct; or (H) in the case of a director, repeated failure to participate in Board meetings (including meetings of any Board committee of which the director is a member) on a regular basis despite having received proper notice of meetings in advance.

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(ii)            Definition of Disability. For purposes of this Agreement, “Disability” means Executive’s inability to perform one or more of the essential functions of Executive’s job due to Executive’s physical or mental impairment, with or without reasonable accommodation as required by law, for any period aggregating more than 120 days in any 365 consecutive day period; provided however, that (A) if the Company determines that Executive has become Disabled, the Company shall notify Executive of its determination; (B) Executive may then request a reasonable accommodation (as that term is defined under the Americans with Disabilities Act) from the Company to assist in his/her return to work; (C) the Company will determine whether Executive’s request can be reasonably accommodated without undue hardship no later than 30 days after Executive requests an accommodation (with additional time being provided in the event of Executive or Executive’s medical provider delaying in providing information that is necessary to the Company’s determination); and (D) in the event Executive’s request cannot be reasonably accommodated (and/or presents an undue hardship), the Company may, by notice given in the manner provided in this Agreement, terminate Executive’s employment hereunder.

(iii)            Definition of Good Reason. For purposes of this Agreement, “Good Reason” means any of the following within the prior 90 days without Executive’s approval: (A) any material diminution of Executive’s authority, duties or responsibilities with or to the Company, other than (i) a paid leave of absence at the direction of and approved by the Board or (ii) an unpaid administrative leave imposed for the purposes of investigating or addressing misconduct by Executive; (B) the Board assigns Executive duties or responsibilities that are materially inconsistent with Executive’s position; (C) any material breach of this Agreement by the Company, including without limitation a reduction in Executive’s Base Salary below the amount specified in Section 2(a) without Executive’s consent; or (D) a change in the geographic location at which Executive must primarily perform services to a location more than 50 miles from Greenwood Village, Colorado without Executive’s approval. Executive must give the Company written notice of Executive’s intention to terminate employment for Good Reason, which notice must state the grounds on which the proposed termination for Good Reason is based. Executive must provide such written notice of the occurrence of these grounds no later than 90 days after their initial occurrence. The Company may remedy these condition(s) within 15 days of receiving notice from Executive and no “Good Reason” will exist if the Company remedies such condition(s) during such 15-day period.

(iv)            Definition of Change in Control Period. For purposes of this Agreement, a “Change in Control Period ” means the one (1)-year period commencing six (6)-months prior to a Change in Control (as defined in the Incentive Plan).

(e)            Transition Assistance. For a period of 30 days following the effective date of Executive’s resignation, Executive shall make himself or herself available to the Company and/or its agents (i) for the purpose of facilitating an efficient transition of Executive’s job related responsibilities and duties to other designated individuals, and (ii) to respond to questions from the Company and/or its agents regarding information and/or activities in which Executive was engaged while employed by the Company; provided that the foregoing time period is based on Executive’s reasonable efforts to cooperate, Executive will not be entitled to additional compensation for such availability and cooperation; and further provided that such assistance shall be reasonable and not substantially interfere or conflict with Executive’s responsibilities to any new employer.

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4.            Payments upon Termination.

(a)            Generally; Accrued Obligations. If Executive’s employment is terminated for any reason, then the Company shall pay Executive the Accrued Obligations promptly following the effective date of such termination. “Accrued Obligations” means (A) the portion of Executive’s Base Salary that has accrued prior to any termination of Executive’s employment with Company and has not yet been paid, any bonus that has been awarded to Executive as of the date of termination of Executive’s employment but has not yet been paid to Executive, (B) and the amount of any unreimbursed Expense Reimbursement. Executive’s entitlement to any other compensation or benefit under any plan of Company shall be governed by and determined in accordance with the terms of such plans, except as otherwise specified in this Agreement.

(b)            Termination by the Company without Cause or Termination for Good Reason. If the Company terminates Executive’s employment without Cause or the Executive terminates Executive’s employment for Good Reason, then, in addition to the Accrued Obligations, and subject to (A) the Executive signing a separation and release agreement in the form attached as Exhibit A, and as such form may be updated by the Company from time to time at any time to conform with changes in applicable laws (a “General Release”) and (B) the General Release becoming effective and irrevocable, all within 60 days after the date of termination (or such shorter period as set forth in the General Release), the Company shall pay Executive:

(i)            the Basic Severance Payments, or

(ii)            if the Board, in its sole discretion, elects (by written notice to Executive within 10 days following the termination of Executive’s employment) that the Company will pay Extended Severance Payments to Executive instead of the Basic Severance Payments pursuant to Section 4(b)(i), the Extended Severance Payments (instead of the Basic Severance Payments); and

if applicable pursuant to Section 2(b), an Annual Bonus with respect to the preceding annual period.

(c)            Terminations without Cause during a Change in Control Period. If the Company terminates Executive’s employment without Cause during a Change in Control Period, then, in addition to the Accrued Obligations, and subject to (i) the Executive signing a General Release and (ii) the General Release becoming effective and irrevocable, all within 60 days after the date of termination (or such shorter period as set forth in the General Release), the Company shall pay Executive the Extended Severance Payments.

(d)            COBRA Premiums.

(i)            Subject to Section 4(d)(ii), if (A) Executive is entitled to Basic Severance Payments or Extended Severance Payments (including, without limitation, Executive’s timely execution and delivery of a General Release that has become effective and irrevocable), and (B) Executive is eligible for and timely and properly elects continuation health care coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), then the Company will pay or promptly reimburse the COBRA premium amounts required for the continued coverage of Executive and Executive’s dependents (if any) under the Company’s group health care plans at the same levels that would have applied if Executive’s employment had not terminated (if possible) until the end of the Basic Severance Term or Extended Severance Term, as applicable (or until such earlier time as Executive ceases to be eligible for COBRA coverage, if earlier) (the “COBRA Premiums”). Notwithstanding the foregoing, if the Company determines, in its sole discretion, that it cannot pay the COBRA Premium without a substantial risk of violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), the Company instead shall pay Executive a monthly cash payment equal to the applicable COBRA Premium for that month.

(ii)            If, however, health care insurance benefits are available to Executive from a new employer, the Company shall have no further obligation relating to payment of additional COBRA Premiums. Executive agrees to promptly inform the Company if and when health care insurance benefits are available from a new employer, and to reimburse the Company for any amounts paid with respect to COBRA Premiums to the extent paid after health care insurance benefits are available to Executive from a new employer.

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(e)            Certain Definitions.

(i)            Basic Severance Payments; Basic Severance Term. For purposes of this Agreement, “Basic Severance Payments” means, to the extent applicable, the monthly cash severance at the Base Salary rate, less standard withholdings and deductions, to be paid during the Basic Severance Term. For purposes of this Agreement, “Basic Severance Term” means the six (6)-month period immediately following the termination date of Executive’s employment.

(ii)            Extended Severance Payments; Extended Severance Term. For purposes of this Agreement, “Extended Severance Payments” means, to the extent applicable, the monthly cash severance at the Base Salary rate, less standard withholdings and deductions, to be paid during the applicable Extended Severance Term. For purposes of this Agreement, “Extended Severance Term” means the one (1)-year period immediately following the termination date of Executive’s employment.

(f)            Execution of General Release. For the avoidance of doubt, the Company shall not be obligated to pay Executive any severance payments unless a General Release has been timely executed and delivered by Executive and such General Release has become effective and irrevocable.

(g)            Limited Rights to Severance Payments. For clarity, (i) entitlement to severance payments of any kind pursuant to this Agreement shall only be possible if (A) the Company terminates Executive’s employment without Cause, or (B) Executive terminates this Agreement for Good Reason; and (ii) no severance payment obligations shall arise out of (W) a termination of this Agreement by the Company with Cause, (X) a termination of this Agreement by the Executive without Good Reason, or (Y) a termination of this Agreement due to Executive’s death or Disability.

(h)            No Continued Vesting. For the avoidance of doubt, vesting of any grants under the Incentive Plan or any other stock, stock option or other incentive awards shall cease upon the date of any termination of Executive’s employment, and shall not continue to vest for the remainder of any Noncompetition Period, Non-Solicitation Period or during any applicable Basic Severance Term or Extended Severance Term.

(i)            Execution of General Release. In accordance with Section 4(b), Section 4(c) and Section 4(d), to receive the payments set forth in those Sections, Executive’s or Executive’s estate’s, if applicable, General Release must be executed, effective and irrevocable before the expiration of 60 days after the date of termination. The payments specified in these Sections will begin as soon as practicable (not to exceed 30 days) after the General Release is executed, effective and irrevocable, but if the 60-day period could span two (2) tax years, the payments must be made in the later year. For example, if the Company terminates Executive’s employment without Cause on December 15, Executive has 60 days—until February 13 —for a General Release to be sign and become effective and irrevocable. In this case, payments due in accordance with Section 4(b), Section 4(c) or Section 4(d) may not begin until the following year, even if the release was signed, effective and irrevocable in December. If Executive’s or Executive’s estate’s, if applicable, General Release is not executed, effective and irrevocable before the end of the 60-day-period, then the Executive and Executive’s estate forfeit, on behalf of Executive and all who might claim through Executive, the payments that would otherwise be due under the applicable Section of this Agreement.

5.            Confidentiality and Invention Assignment Agreement. Executive has executed, and as applicable shall execute, the Company’s Confidentiality and Invention Assignment Agreement, the current form of is attached as Exhibit B, and as updated from time to time (“CIIA”), the provisions of which are hereby incorporated by reference and shall govern the Executive’s obligations and responsibilities with regard to the Company Confidential Information (as that term is defined in the CIIA), the assignment of intellectual property, and other matters. Executive agrees to comply with the terms of the CIIA. To the extent that any provision of the CIIA conflicts with any provision in this Agreement, the provisions requiring Executive to comply with the higher standard shall govern.

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6.            Restrictive Covenants.

(a)            Acknowledgement. Executive agrees that, during the Employment Term, Executive (i) has a duty of loyalty to the Company, and (ii) shall not engage in or undertake any action that conflicts with the undivided loyalty owed by Executive to the Company. Executive represents and warrants that Executive has no other agreements, relationships, or commitments to any other person or entity that conflict with the provisions of this Agreement, Executive’s obligations to the Company under this Agreement, or Executive’s ability to perform Executive’s duties to the Company. Executive acknowledges and agrees that: (A) Executive’s employment with the Company has brought Executive into close contact with Confidential Information of the Company and its customers, vendors, suppliers, employees, and independent contractors; and (B) the agreements and covenants contained in this Section 6 are essential, reasonable, and no broader than necessary to protect the reasonable business interests and goodwill of the Company. Executive further acknowledges, represents, and agrees that the terms of this Section 6 do not and will not pose an undue hardship on Executive, and that Executive will be able to maintain gainful employment notwithstanding the terms of this Section 6. Executive further acknowledges, represents, and agrees that he/she has received valuable consideration (including, but not limited to, a payment of five hundred dollars ($500.00) that is expressly for the purposes of serving as consideration for this Section 6) that is sufficient to support the promises being made by Executive herein. Accordingly, Executive covenants and agrees to the following restrictive covenants.

(b)            Non-Solicitation of Company Employees and Contractors. Executive agrees that during the Non-Solicitation Period (defined below), Executive shall not directly or indirectly (i) hire, employ, recruit, solicit, lure or entice away, or in any other manner persuade or attempt to persuade, any employee of the Company to discontinue such employee’s employment with the Company or (ii) solicit or encourage any independent contractor providing services to the Company to terminate or diminish its relationship with the Company; provided, that, the foregoing shall not be breached by general advertisements not targeted at employees or independent contractors of the Company.

(c)            Non-Solicitation of Company Customers. Executive agrees that, during the Non-Solicitation Period, Executive shall not directly or indirectly (i) solicit or assist in the solicitation by any third party of any Covered Customer (defined below) for the purpose of providing services or products that compete with, or are similar to, the service or product offerings of the Company, except when such solicitation is done on behalf of the Company, or (ii) discourage any Covered Customer from obtaining of services or products from the Company.

(d)            Non-Interference with Vendors and Service Providers. Executive agrees that, during the Non-Solicitation Period, Executive shall not directly or indirectly negatively influence or otherwise interfere with the Company’s relationships with vendors, suppliers, consultants, advisors, or other service providers of the Company.

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(e)            Non-Competition with the Company. Executive agrees that, during the Non-Competition Period, Executive shall not directly or indirectly, as a director, manager, member, stockholder, partner, owner, employee, consultant, or agent of any business, or in any other capacity, other than on behalf of the Company, organize, establish, own, operate, manage, control, engage in, participate in, invest in, permit Executive’s name to be used by, act as a consultant or advisor to, render services for (alone or in association with any person, firm, corporation, or other entity), or otherwise assist any person or entity that engages in or owns, invests in, operates, manages, or controls any venture or enterprise in all or a part of the Restricted Area, that engages in (A) the manufacture, sale, lease, service or other manner of offering of products or services that provide natural gas or hydrogen fueled distributed power generation with a single unit nameplate capacity of up to 5MW (which excludes, for the avoidance of doubt, the manufacture, sale, lease, service or other manner of offering of batteries, solar or wind powered energy generation equipment, or electrochemical (non-combustion) powered fuel cells), (B) the manufacture, sale, lease, service or other manner of offering of heat exchanger/transfer products that can operate with gases at a temperature above 1000° Fahrenheit or (C) any other new line of business, products or services offered or in development by FGS or any direct or indirect subsidiary thereof during the prior six months of the Employment Term and in which Executive has had material involvement (the “Restricted Business”). Notwithstanding the foregoing, nothing in this Agreement shall prevent Executive from owning, directly or indirectly, for passive investment purposes not intended to circumvent this Agreement, less than 2% of the publicly traded common equity securities of any company engaged in the Business (so long as Executive has no power to manage, operate, advise, consult with, or control the competing enterprise and no power, alone or in conjunction with other affiliated parties, to select a director, manager, general partner, or similar governing official of the competing enterprise other than in connection with the normal and customary voting powers afforded Executive in connection with any permissible equity ownership).

(f)            Non-Disparagement. Executive also agrees that, during the Non-Solicitation Period, Executive shall not directly or indirectly (i) disparage the Company, its affiliates and their respective directors, officers, managers, managers, employees, or agents, or (ii) make any public statement that could reasonably be expected to materially and adversely affects the reputation, brand, or business of the Company. This provision does not apply to any statements made to governmental agencies for the purposes of asserting, or participating in any investigation by such agencies concerning, Executive’s statutory rights. In the event of a termination of Executive’s employment (other than a termination for Cause, including pursuant to Section 3(c)), subject to a General Release for Executive being signed, delivered, effective and irrevocable, and further subject to Executive’s compliance and continuing compliance with Executive’s continuing obligations of this Agreement (including this Section 6), then the Company shall cause the FGS board of directors and FGS executive officers (while such individuals serve in such capacities) not to disparage Executive during the remainder of the Non-Solicitation Period. This provision does not apply to any statements or other disclosures by the Company, the FGS board of directors or FGS executive officers for the purpose of or necessary for compliance with federal or state securities laws, as well as rules of any securities exchange on which any securities of the Company, including FGS, are then traded.

(g)            Certain Defined Terms. The following terms, when used in this Section 6, will have the respective meanings set forth below:

(i)            “Restricted Area” means the area within the United States, Canada and each other country and territory for which the Company has provided products or services or in which the Company has otherwise done business during Executive’s employment with the Company; provided however if any court of competent jurisdiction determines that the geographic scope of such Restricted Area is unreasonable, the “Restricted Area” means with respect to the United States, Canada and each other country and territory for which the Company has provided products or services or in which the Company has otherwise done business during Executive’s employment with the Company, the area within each state or territory thereof for which the Company has provided products or services or in which the Company has otherwise done business during Executive’s employment with the Company; provided however if any court of competent jurisdiction determines that the geographic scope of such Restricted Area is unreasonable, the “Restricted Area” means with respect to the United States, Canada and each other country and territory for which the Company has provided products or services or in which the Company has otherwise done business during Executive’s employment with the Company, the area within each county or similar jurisdiction thereof for which the Company has provided products or services or in which the Company has otherwise done business during Executive’s employment with the Company; provided, however if any court of competent jurisdiction determines that the geographic scope of such Applicable Area is unenforceable, the “Restricted Area” means within 50 miles of any location at which the Company has provided products or services or in which the Company has otherwise done business during Executive’s employment with the Company.

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(ii)            “Non-Competition Period” means:

(1)            the period during Executive’s employment with the Company and for the one (1)-year period after the end of Executive’s employment with the Company if Executive’s employment (A) is terminated by the Company for Cause, (B) is terminated by the Company without Cause during a Change in Control Period, or (C) is terminated by Executive other than for Good Reason.

(2)            the period during Executive’s employment with the Company and for the six (6)-month period after the end of Executive’s employment with the Company if Executive’s employment is terminated in any circumstances not provided in Section 6(g)(ii)(1)(A), (B) or (C) above; provided, however, that the Board may, in its sole discretion, elect (by written notice to Executive within 10 days following the termination of Executive’s employment) that the Company will pay Extended Severance Payments to Executive (instead of any Basic Severance Payments), in which case the “Non-Competition Period” instead means the period during the Executive’s employment with the Company and for the one (1)-year period after the end of Executive’s employment with the Company.

(iii)            “Non-Solicitation Period” means the period during Executive’s employment with the Company and for the one (1)-year period after the end of Executive’s employment with the Company.

(iv)            “Company” includes the Company and any of the Company’s affiliates.

(v)            “Covered Customers” means persons; firms; associations; partnerships; corporations; limited liability companies; institutions, local, state, federal and foreign entities or agencies; and other entities (A) to which the Company provided services or products before or during Executive’s employment with the Company, (B) in relation to which Executive has provided any of the Services, or (C) that the Company (or Executive in connection with the Services) has contacted or solicited with respect to the provision of services or products before or during Executive’s employment with the Company.

(vi)            An “employee” or “independent contractor” of the Company is any person who is an employee or independent contractor, respectively, of any of the Company on the date hereof or who becomes an employee or independent contractor of the Company during Executive’s employment with the Company.

(h)            Remedies. If Executive breaches any of the provisions contained in this Section 6, the Company shall have the remedies set forth below, each of which shall be enforceable, and each of which is in addition to, and not in lieu of, any other rights and remedies available to the Company at law or in equity. The provisions of this Section 6 are intended to be for the benefit of the Company and its affiliates, and any of the Company or its affiliate may enforce such provisions. Executive recognizes and acknowledges that a breach of the covenants contained in this Section 6 will cause irreparable harm to the goodwill and business of the Company, the exact amount of which will be difficult to ascertain, and that the remedies at law for any such breach will be inadequate. Accordingly, in the event of an alleged or threatened breach by Executive of any of the provisions of this Section 6, the Company may, in addition to all other rights and remedies existing in its favor, seek specific performance and/or injunctive or other relief in order to enforce or prevent any violations of the provisions hereof. Additionally, if Executive breaches Executive’s obligations under Section 5 or Section 6, then the Company may immediately cease payments of any Basic Severance Payments and/or any Extended Severance Payments and may recover any Basic Severance Payments and/or any Extended Severance Payments paid to Executive after such breach. The cessation and recovery of such payments shall be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company including, without limitation, the right to specific performance and/or injunctive or other relief.

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(i)            Severability. In the event any provision of this Section 6 shall be determined by a court of competent jurisdiction to be unenforceable by reason of its extending for too great a period of time or over too great a geographical area or by reason of its being too extensive in any other respect, it will be interpreted to extend only over the maximum period of time for which it may be enforceable, over the maximum geographical area as to which it may be enforceable, or to the maximum extent in all other respects as to which it may be enforceable, all as determined by such court in such action. If any provision of this Agreement, or any part thereof, is held to be invalid or unenforceable because of the scope or duration of or the area covered by such provision, the parties agree that the court making such determination shall reduce the scope, duration and/or area of such provision (and shall substitute appropriate provisions for any such invalid or unenforceable provisions) in order to make such provision enforceable to the fullest extent permitted by law and/or shall delete specific words and phrases, and such modified provision shall then be enforceable and shall be enforced. In the event that any court determines that the time period or the area, or both, are unreasonable and that any of the covenants is to that extent invalid or unenforceable, the parties agree that such covenants will remain in full force and effect, first, for the greatest time period, and second, in the greatest geographical area that would not render them unenforceable.

(j)            Enforceability. The Parties each acknowledge that the other party acted in good faith in the negotiation and execution of the provisions in this Section 6. In particular, the Parties acknowledge that given the nature of Executive’s duties and responsibilities (and Executive’s associated influence over the Company’s business and its relationships with its customers), the restrictions and duration of the obligations set forth in this Section 6 are reasonable and no broader than necessary to protect the legitimate business interests of the Company and the goodwill thereof. Executive further acknowledges that the restrictions and duration of this Section 6 do not and will not impose an unreasonable hardship upon Executive. The Parties further agree that the requirements of this Section 6 shall survive the termination of Executive’s employment with the Company.

(k)            Waiver or Inapplicability of Non-Competition Obligations. Executive may submit to the Board a written description setting out a reasonable description (including without limitation the identity of any associated employer and other relevant parties) of any contemplated activity that would or may otherwise violate or contravene Executive’s obligations under Section 6(e) (the “Specified Activity”), and request that the Board waive or otherwise confirm the inapplicability of Executive’s obligations under Section 6(e) with respect to such Specified Activity. If and to the extent the Board confirms in writing to Executive the waiver or inapplicability of Executive’s obligations under Section 6(e) with respect to the Specified Activity (such waiver or confirmation, not to be unreasonably withheld based on the interests of the Company), then Executive shall thereafter have no liability or obligation under Section 6(e) with respect to the Specified Activity.

7.            Assignment. This Agreement will be binding upon and inure to the benefit of (a) the heirs, executors and legal representatives of Executive upon Executive’s death and (b) any successor of the Company. Any such successor of the Company will be deemed substituted for the Company under the terms of this Agreement for all purposes. For this purpose, “successor” means any person, firm, corporation or other business entity which at any time, whether by purchase, merger or otherwise, directly or indirectly acquires all or substantially all of the assets or business of the Company. None of the rights of Executive to receive any form of compensation or benefits pursuant to this Agreement may be assigned or transferred except by will or the laws of descent and distribution. None of the obligations of Executive under this Agreement may be assigned or transferred. Any other attempted assignment, transfer, conveyance or other disposition of Executive’s right to compensation or other benefits will be null and void.

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8.            Notices. All notices, requests, demands and other communications called for under this Agreement will be in writing and will be delivered personally by hand or by courier, mailed by United States first-class mail, postage prepaid, or sent by email or by other electronic means directed to the party to be notified at the address or email address indicated for such party on the signature page to this Agreement, or at such other address or email address as such party may designate by 10 days’ advance written notice to the other parties hereto. All such notices and other communications will be deemed given upon personal delivery, three (3) days after the date of mailing, or when sent if given via email or other electronic means.

9.            Severability. In the event that any provision(s) of this Agreement becomes or is declared by an arbitrator or a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement will continue in full force and effect without such provision(s).

10.            Arbitration.

READ THE FOLLOWING ARBITRATION PROVISION CAREFULLY. IT LIMITS CERTAIN OF YOUR RIGHTS, INCLUDING YOUR RIGHT TO OBTAIN REDRESS THROUGH COURT ACTION

(a)            Executive and the Company agree that other than any claims (by Company or Executive) for injunctive relief, any dispute or controversy arising out of, relating to, or in connection with this Agreement, or the interpretation, validity, construction, performance, breach, or termination thereof, will be settled by binding arbitration to be held in Colorado in accordance with the National Rules for the Resolution of Employment Disputes then in effect of the American Arbitration Association (the “Rules”). The arbitrator may grant injunctions or other relief in such dispute or controversy. The decision of the arbitrator will be final, conclusive and binding on the parties to the arbitration. Judgment may be entered on the arbitrator’s decision in any court having jurisdiction.

(b)            The arbitrator(s) will apply Colorado law to the merits of any dispute or claim, without reference to rules of conflicts of law. The arbitration proceedings will be governed by federal arbitration law and by the Rules, without reference to state arbitration law.

(c)            EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE AGREES TO SUBMIT ANY CLAIMS (OTHER THAN THOSE FOR INJUNCTIVE RELIEF) WHICH ARISE OUT OF, RELATE TO, OR ARE IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF TO BINDING ARBITRATION, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE’S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EMPLOYEE RELATIONSHIP, INCLUDING BUT NOT LIMITED TO, CLAIMS OF DISCRIMINATION, HARASSMENT, OR RETALIATION, OTHER THAN CLAIMS FOR INJUNCTIVE RELIEF.

(d)            The Parties each acknowledge and agree that they have had ample time to consider the terms of this arbitration agreement, that they each negotiated it at arms-length with equal bargaining power,

Executive Signature Signifying Agreement To Arbitration

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11.            Integration/Waiver. This Agreement, its exhibits, and the confidentiality and invention assignment agreement described in Section 5 above represent the entire agreement and understanding between the parties as to the subject matter herein and supersede all prior or contemporaneous agreements whether written or oral, including without limitation any employment agreement previously signed by Executive. To the extent that any provision of the CIIA conflicts with any provision in this Agreement, the provisions requiring Executive to comply with the higher standard shall govern. No waiver, alteration or modification of any of the provisions of this Agreement will be binding unless in writing and signed by duly authorized representatives of the parties hereto.

12.            Tax Withholding. All payments made pursuant to this Agreement will be subject to applicable taxes and other withholdings or deductions authorized or required by law.

13.            Governing Law; Consent to Personal Jurisdiction. THIS AGREEMENT WILL BE GOVERNED BY THE LAWS OF THE STATE OF COLORADO WITHOUT REGARD FOR CONFLICTS OF LAWS PRINCIPLES. EACH PARTY EXPRESSLY CONSENTS TO THE PERSONAL JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN THE DISTRICT OF COLORADO SUBJECT TO THE ARBITRATION PROVISION SET FORTH IN SECTION 10.

14.            Attorneys’ Fees. In the event of arbitration or litigation arising from or relating to this Agreement, each party shall be responsible for such party’s own attorneys’ fees and costs and expenses including expert witness fees.

15.            Construction of Agreement. The parties have participated jointly in the negotiating and drafting of this Agreement. If a question concerning intent or interpretation arises, no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of authorship.

16.            Captions. Titles or captions contained in this Agreement are for convenience and are not intended to affect the substantive meaning of any provision.

17.            Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

18.            Code Section 409A. To the fullest extent applicable, amount and other benefits payable under this Agreement are intended to be exempt from the definition of “nonqualified deferred compensation” under section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”) in accordance with one or more of the exemptions available under the final Treasury regulations promulgated under Section 409A and, notwithstanding anything in the Agreement to the contrary, to the extent that any such amount or benefit is or becomes subject to Section 409A due to a failure to qualify for an exemption from the definition of nonqualified deferred compensation in accordance with such final Treasury regulations, this Agreement must be interpreted and administered to the extent possible, or amended, to comply with the applicable requirements of Section 409A with respect to these amounts or benefits.

[Signature page follows]

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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officer, as of the day and year first above written.

“COMPANY”

Flex Leasing Power & Service LLC

By: 

Name: 

Title: 

Date:

Address: 

112 Corporate Drive, Suite 3 

Portsmouth, NH 03801 

Attn.: Board of Directors 

Email:

“EXECUTIVE”

Doug Baltzer

Date:

Address:

Email:

Exhibit A

Form of General Release

Exhibit B

Form of Confidentiality and Invention Assignment Agreement

EX-10.8

Exhibit 10.8

SUBLEASE

BETWEEN

PIONEER NEW HAMPSHIRE LLC

AS

“SUBLESSOR”

AND

FLEXENERGY ENERGY SYSTEMS, INC.

AS

“SUBLESSEE”

TABLE OF CONTENTS
ARTICLE		PAGE
RECITALS		1
ARTICLE 1.	PREMISES	2
ARTICLE 2.	CONDITION OF SUBLEASED PREMISES - SUBLESSOR’S WORK	3
ARTICLE 3.	TERM	4
ARTICLE 4.	RENT	5
ARTICLE 5.	SUBLESSOR’S COMPLIANCE	6
ARTICLE 6.	SURRENDER OF SUBLEASED PREMISES	7
ARTICLE 7.	INSURANCE	8
ARTICLE 8.	SUBLESSOR’S RIGHT TO PERFORM SUBLESSEE’S COVENANTS	10
ARTICLE 9.	USE OF SUBLEASED PREMISES	11
ARTICLE 9A	[RESERVED]	12
ARTICLE 10.	LIENS	13
ARTICLE 11.	REPAIRS AND MAINTENANCE	14
ARTICLE 12.	RIGHT OF SUBLESSOR TO INSPECT AND REPAIR	15
ARTICLE 13.	GENERAL INDEMNIFICATION BY SUBLESSEE	16
ARTICLE 14.	UTILITIES	18
ARTICLE 15.	ALTERATIONS – SIGNS	19
ARTICLE 16.	DESTRUCTION AND RESTORATION	21
ARTICLE 16(A)	EMINENT DOMAIN	23
ARTICLE 17.	DEFAULT BY SUBLESSOR	24
ARTICLE 18.	DEFAULT BY SUBLESSEE	25
ARTICLE 19.	DELEGATION - ASSIGNMENT - SUBLEASES - MORTGAGES	28
ARTICLE 20.	[RESERVED]	30
ARTICLE 21.	ESTOPPEL CERTIFICATES	31
ARTICLE 22.	INVALIDITY OF PARTICULAR PROVISIONS	32
ARTICLE 23.	NOTICES	33
ARTICLE 24.	QUIET ENJOYMENT	34
ARTICLE 25.	ENVIRONMENTAL PROTECTION	35
ARTICLE 26.	MISCELLANEOUS	40
ARTICLE 27.	TERMINATION OF SUBLEASE	44

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EXHIBITS TO SUBLEASE

Exhibit

1	-	PRIMARY LEASE
2	-	VESTING DEED
3	-	PLANS DESIGNATING THE SUBLEASED PREMISES
4		SUBLESSOR’S WORK
5	-	LIST OF ENVIRONMENTAL LAWS AND REGULATIONS
6	-	RESERVED
7	-	FAA REQUIREMENTS

ii 

SUBLEASE

THIS SUBLEASE (“Sublease”) is made by and between Pioneer New Hampshire LLC, a New Hampshire limited liability company (“Sublessor”) and FlexEnergy Energy Systems, Inc., a Delaware corporation (“Sublessee”). (Sublessor and Sublessee may be referred to jointly as the “Parties.”)

RECITALS

A.       Pioneer New Hampshire LLC entered into a Sublease dated December 23, 1999 with the Pease Development Authority (“PDA”), an agency of the State of New Hampshire established pursuant to RSA ch 12-G for premises located at the Pease International Tradeport in Portsmouth, New Hampshire described as follows: Former Brackett School, Corporate Drive, Pease International Tradeport (the “Property”), which lease was amended effective September 6, 2012 a copy of which Sublease and Amendment are attached hereto as Exhibit 1 (collectively the “Primary Lease”).

B.       At the time of the Primary Lease, PDA anticipated acquiring fee title to the portion of the former Pease Air Force Base hereinafter designated Premises I and II from the United States of America (“Government” or “Air Force”) by public benefit transfer (i.e. transfer without consideration) pursuant to the general authority contained in 49 U.S.C. Sections 47151-47153 and other applicable provisions of law. (Together, Premises I and Premises II constitute the entirety of the Airport (the “Airport” or “Pease”)). Pending final disposition of the Airport, PDA and Air Force entered into a Lease as of April 14, 1992 for the Airport District, a Supplement No. 1 thereto dated August 4, 1992, a Supplement No. 2 thereto dated July 15, 1993 and a Supplement No. 3 thereto dated June 27, 1997.

C.       On October 15, 2003 the PDA acquired the portion of the Airport on which the Subleased Premises are located pursuant to a deed recorded in the Rockingham County Registry of Deeds (“Vesting Deed”) attached hereto as Exhibit 2.

D.       Attached as an exhibit to the Vesting Deed is a copy of the Federal Facilities Agreement (as amended, the “FFA”) required under Section 120 of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. §9601 et seq., that was entered into by the Air Force, the New Hampshire Department of Environmental Services (“NHDES”) and the United States Environmental Protection Agency (“EPA”) and pertains to certain contamination at Pease and the FFA also imposes certain requirements upon PDA, Sublessor (and therefore Sublessee) which are addressed in the terms and conditions of this Sublease.

E.       On June 28, 2013, Sublessor submitted the Property subject to the Primary Lease to a leasehold condominium pursuant to Declaration of Condominium dated May 30, 2013, and recorded in the Rockingham County Registry of Deeds at Book 5454, Page 2283 and site and floor plans recorded in said Registry as Plan #D-37765 (collectively, the “Condominium Instruments”).

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NOW, THEREFORE, in consideration of the covenants herein contained and other valuable consideration, the receipt of which is hereby acknowledged, Sublessor and Sublessee hereby agree as follows:

ARTICLE 1.

PREMISES

1.1.       Description of Subleased Premises

Sublessor, for and in consideration of the rents and covenants herein specified to be paid and performed by Sublessee, hereby leases to Sublessee, and Sublessee hereby hires from Sublessor, the premises described generally below, and more particularly on the plan attached as Exhibit 3 (the “Subleased Premises” or the “Premises”):

Approximately 5800 rentable square feet of space, located in Unit 3A, 112 Corporate Drive, Portsmouth, New Hampshire, together with the non-exclusive right to use in common with others entitled thereto, the sidewalks and driveways, and including the nonexclusive use of spaces for automobile parking facilities which are adjacent to said building for Sublessee’s employees and business invitees.

1.2.       Easements - Rights-of-Way

In addition to the Primary Lease, Vesting Deed and Condominium Instruments, this Sublease is subject to existing easements and rights-of-way of record and to (i) the Utility Sublease and License Agreement dated July 31, 1992 by and between PDA and Public Service Company of New Hampshire (“PSNH”), (ii) the utility Sublease and License Agreement dated May 10, 1995 by PDA and New England Telephone and Telegraph Company (“NETEL”); (iii) the Wastewater Disposal and Water Service Facilities Sublease and License Agreement dated as of January 1, 1993 and amended July 1, 1998 by and between PDA and the City of Portsmouth (“COP”) and (iv) the Pipeline Easement and Transfer Agreement dated August 12, 1998 by and between PDA, Portland Natural Gas Transmission System and Maritimes & Northeast Pipeline, L.L.C. Furthermore, in the Vesting Deed, the Government reserves, on behalf of the Federal Aviation Administration (“FAA”) for the use and benefit of the public, an avigation easement and a right of way for the free and unobstructed passage of aircraft in the airspace above the surface of the Airport, together with the right to cause in such airspace such sound, vibrations, fumes, dust, fuel particles, and all other effects as may be caused by the operation of aircraft, now known or hereafter used, for the navigation through or flight in the said airspace, and for use of said airspace for landing on, taking off from, or operating on the Airport.

1.3.       Access; Parking

Sublessee shall have the right to use 25 parking spaces as well as the right, in common with other Airport tenants and authorized Airport users, to use the entrances, exits and roadways designated by PDA for common use at the Airport, subordinate, however, to PDA’s rights to manage the common areas and roadways, which rights of PDA shall include, without limitation, the right to impose reasonable rules and regulations, and to add, delete, alter, or otherwise modify the designation and non-exclusive use of all parking areas, entrances, exists, roadways and other areas of the Airport.

END OF ARTICLE 1

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ARTICLE 2.

CONDITION OF SUBLEASED PREMISES – SUBLESSOR’S WORK

2.1       PDA shall not be responsible for any latent or other defect or change of condition in the Subleased Premises. Sublessee accepts the Subleased Premises in their present condition, subject only to Sublessor’s obligation to do the Work described on Exhibit 4. All Sublessor’s Work shall be done in a good and workmanlike manner and compliance with, and with all approvals required by, all applicable governmental regulations, codes, standards and other requirements, including fire, safety and building codes and Land Use Regulations promulgated by PDA, and shall be completed on or before February 1, 2021.

END OF ARTICLE 2

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ARTICLE 3.

TERM

3.1.       This Sublease shall commence on February 1, 2021 (“Commencement Date”) and shall end on June 30, 2024, unless terminated earlier or renewed in accordance with the provisions of this Sublease.

3.2       Option to Renew. Provided Sublessee is not in default under this Sublease, Sublessee will have two (2) options to renew this Sublease for a period of three (3) years each by giving Sublessor prior written notice of its intent to renew this Sublease not less than six (6) months before the expiration date of the then expiring term. The renewal will be on all of the same terms and conditions of this Sublease unless otherwise amended by both parties in writing, except that the Basic Rent for each year of each Option Term shall be three percent (3%) more than the Basic Rent for the immediately preceding year.

END OF ARTICLE 3

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ARTICLE 4.

RENT

4.1.       Commencing on the Rent Commencement Date, Sublessee shall pay to Sublessor Basic Rent for the initial term equal to $87,000 per annum or $7,250 per month (“Basic Rent” or “Base Rent”).

The Rent Commencement Date is March 1, 2021. If Sublessee exercises its Option to Renew set forth in Section 3.2, Basic Rent for each year of each Option Term shall be three percent (3%) more than the Basic Rent for the immediately preceding year.

4.2.       The Basic Rent due under Section 4.1 shall commence on the Rent Commencement Date. Rent shall be payable in each case in equal monthly installments of one twelfth thereof in advance on the first day of each month without offset (except as expressly provided for in this Sublease) in lawful money of the United States at the office of Sublessor at c/o Summit Land Development, 340 Central Avenue, Suite 202, Dover, New Hampshire 03820 or at such other address as Sublessor may hereafter designate in writing.

4.3.       This is a gross lease, and includes all utilities, meaning that Sublessor shall not be reimbursed by Sublessee for, and Sublessee shall not pay, insurance premiums, maintenance costs, taxes, utilities or, except as expressly provided in this Sublease, any other costs or expenses.

4.4.       In the event that rent, whether the same is Basic Rent is more than fifteen (15) days late, Sublessee shall pay to Sublessor a late fee in the amount of five (5%) percent of the total amount due. The Sublessee acknowledges and agrees that the characterization of rental amounts due under this Article 4 as Basic Rent, Additional Rent, or any other characterizations, shall not affect the Sublessor’s ability to collect said amount upon Sublessee’s default hereunder.

4.5.       Security Deposit. Upon execution of this Sublease, Sublessee shall pay to Sublessor the amount of $7,250, which amount shall be held by Sublessor as security for any default by Sublessee and will be returned to Sublessee within sixty (60) days after Sublessee’s surrender of the Premises in accordance with Article 6 below, provided no outstanding default exists.

END OF ARTICLE 4

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ARTICLE 5.

SUBLESSOR’S COMPLIANCE

Sublessor shall, at its sole cost and expense and in a timely manner, perform its respective obligations under the Vesting Deed, the FFA, the Primary Lease, and any other agreements encumbering the Subleased Premises, and shall comply with all restrictions and other requirements contained therein except to the extent they are delegated to Sublessee under this Sublease.

END OF ARTICLE 5

6 

ARTICLE 6.

SURRENDER OF SUBLEASED PREMISES

6.1       On the expiration or termination of this Sublease, Sublessee shall surrender to Sublessor the Subleased Premises, including all improvements and fixtures therein whether leased to Sublessee hereunder or otherwise owned by Sublessee, broom clean and in good order, condition and repair, reasonable wear and tear and damage by casualty and taking by eminent domain excepted, together with all alterations, decorations, additions and improvements that may have been made in, to or on the Subleased Premises, except that Sublessee shall be required to remove its personal property. Sublessee shall also be required to remove any Alterations made by Sublessee and to restore the Premises to its condition prior to such Alterations, provided that, as a condition of granting its consent, Sublessor required Sublessee to remove such Alterations. The Subleased Premises, including the Alterations and fixtures therein, shall be delivered free and clear of all subtenancies, liens and encumbrances, other than those, if any, permitted hereby or otherwise created or consented to by Sublessor, and if requested to do so, Sublessee shall execute, acknowledge and deliver to Sublessor such instruments of further assurance as in the reasonable opinion of Sublessor are necessary or desirable to confirm or perfect Sublessor’s right, title and interest in and to the Subleased Premises including said Alterations and fixtures. On or before the end of the Sublease term, Sublessee shall remove all of Sublessee’s personal and other property allowed or required to be removed hereunder and restore the Premises to its prior condition, and all such property not removed shall be deemed abandoned by Sublessee and may be utilized or disposed of by Sublessor without any liability to Sublessee. Sublessee’s liabilities under this Article 6 shall survive the expiration or termination of this Sublease.

END OF ARTICLE 6

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ARTICLE 7.

INSURANCE

7.1.       Sublessee’s Insurance. During the entire period that this Sublease shall be in effect, the Sublessee at its expense will carry and maintain:

(A)       Contents insurance coverage on Sublessee’s personal property kept or maintained by the Sublessee at the Subleased Premises in such amount as is reasonable and prudent.

(B)       Comprehensive general liability insurance, and products and completed operations liability insurance, on an “occurrence basis” in an amount of two million dollars ($2,000,000) per occurrence against claims for “personal injury”, including without limitation, bodily injury, death or property damage, occurring upon, in or about the land and buildings of which the Subleased Premises are a part as required pursuant to the Primary Lease.

(C)       Workers’ compensation and employer’s liability insurance in an amount and form which meets all applicable requirements of the labor laws of the State of New Hampshire, as amended from time to time, and which specifically covers the persons and risks involved in this Sublease.

(D)       Automobile liability insurance, where Sublessee’s operations require such coverage, in amounts approved from time to time by Sublessee, but not less than one million dollars ($1,000,000) combined single limit for owned, hired and non-owned automobiles.

7.2.       All policies of insurance required to be carried under this Article shall be effected under valid and enforceable policies, in such forms and amounts as may, from time to time, be required under this Sublease, issued by insurers of recognized responsibility which are authorized to transact such insurance coverage in the State of New Hampshire. All such policies of insurance shall be for the mutual benefit of Sublessor, PDA, and Sublessee as named insureds. Upon the execution of this Sublease (and thereafter not less than fifteen (15) days prior to the expiration date of each policy furnished pursuant to this Article) a certificate of insurance evidencing the required coverage shall be delivered by each party to the other.

7.3.       All policies of insurance shall provide for loss thereunder to be adjusted and payable to Sublessor or Sublessee in accordance with the terms of this Sublease.

7.4.       Each such policy or certificate therefor issued by the insurer shall to the extent reasonably obtainable, with the insurance companies with whom the parties normally do business, contain (i) a provision that no act or omission of Sublessee, Sublessor, or any employee, officer or agent thereof, which would otherwise result in forfeiture or reduction of the insurance therein provided shall affect or limit the obligation of the insurance company to pay the amount of any loss sustained; (ii) an agreement by the insurer that such policy shall not be canceled without at least thirty (30) days prior written notice (or ten (10) days for non-payment of premiums) by registered mail to the appropriate parties hereof; and (iii) provide that the insurer shall have no right of subrogation against the PDA or the Sublessor.

8 

7.5.       All policies of insurance required to be maintained by Sublessee shall have attached thereto the Lender’s Loss Payable Endorsement, or its equivalent, or a loss payable clause acceptable to Sublessor, for the benefit of any Mortgagee, but the right of any Mortgagee to the payment of insurance proceeds shall at all times be subject to the provisions of this Sublease with respect to the application of the proceeds of such insurance.

7.6.       The Parties shall observe and comply with the requirements of all policies of insurance at any time in force with respect to the Subleased Premises and the Parties shall also perform and satisfy the requirements of the companies writing such policies so that at all times companies of good standing reasonably satisfactory to Sublessor shall be willing to write or to continue such insurance. Sublessee shall, in the event of any violations or attempted violations of the provisions of this Section 7.6 by a subtenant, take steps, immediately upon knowledge of such violation or attempted violation, to remedy or prevent the same as the case may be.

7.7.       Any insurance provided for in this Sublease may be effected by a policy or policies of blanket insurance; provided, however, that the amount of the total insurance allocated to the Subleased Premises shall be such as to furnish in protection the equivalent of separate policies in the amounts herein required, and provided further that in all other respects, any such policy or policies shall comply with the other provisions of this Sublease. In any such case, it shall not be necessary to deliver the original of any such blanket policy to Sublessor, but Sublessee shall deliver to Sublessor and to any Mortgagee a certificate or duplicate of such policy in form and content acceptable to Sublessor or Sublessee.

END OF ARTICLE 7

9 

ARTICLE 8.

SUBLESSOR’S RIGHT TO PERFORM SUBLESSEE’S COVENANTS

8.1.       If Sublessee shall at any time fail to make any payment or perform any other act on Sublessee’s part required by this Sublease, then Sublessor, after ten (10) days written notice to Sublessee (or, in case of any emergency, without notice, or with such notice as may be reasonable under the circumstances) and without waiving or releasing Sublessee from any obligation of Sublessee hereunder, may (but shall not be required to) make such payment or perform such other act on Sublessee’s part to be made or performed as provided in this Sublease, and may enter upon the Subleased Premises for such purpose and take all such necessary action as may reasonably be deemed appropriate by Sublessor to correct such failure of Sublessee, all at the expense of Sublessee.

8.2.       All reasonable sums so paid by Sublessor and all reasonable costs and expenses incurred by Sublessor in connection with the performance of any such act (together with interest thereon at the rate specified in Section 26.1 from the respective date(s) of Sublessor’s making of each such payment or incurring of each cost or expenses) shall constitute “Additional Rent” payable by Sublessee under this Sublease and shall be paid by Sublessee to Sublessor on demand.

END OF ARTICLE 8

10 

ARTICLE 9.

USE OF SUBLEASED PREMISES

9.1.       The sole purpose for which Sublessee may use the Subleased Premises is general office and for no other uses without Sublessor’s and PDA’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed by Sublessor. Sublessee shall not use, or permit to be used, the Subleased Premises for any other purpose without the prior express written consent of Sublessor and PDA. Sublessor’s and PDA’s consent shall be subject to the execution of an appropriate agreement which may include a provision requiring the payment of established fees and charges that may be applicable to any such additional uses consented to by Sublessor and PDA. Sublessee is prohibited from any use of the Subleased Premises not specifically granted in this Section 9.1.

9.2.       Sublessee recognizes that the uses authorized in Section 9.1 are not granted on an exclusive basis and that Sublessor and PDA may enter into subleases or other agreements with other tenants or users at areas of the building in which the Subleased Premises are a part or other areas of the Airport for similar, identical, or competing uses. No provision of this Sublease shall be construed as granting or authorizing the granting of an exclusive right within the meaning of Section 308 of the Federal Aviation Act as the same may be amended from time to time.

9.3.       Sublessee agrees that it will keep the Premises in a neat, clean and orderly condition and shall be responsible for trash removal in accordance with the provisions of Chapters 300 through 500 of the Pease Development Authority Zoning Requirements, Site Plan Review Regulations and Subdivision Regulations (collectively the “Land Use Controls”) and such other rules and regulations from time to time promulgated, provided that Sublessee shall not be bound by any such rules and regulations until such time as it receives a copy thereof. Sublessor agrees to cause trash receptacles to be regularly emptied.

9.4.       Sublessee shall be solely responsible for determining the suitability of the Premises for its intended use and whether the same complies with all zoning and other laws. Sublessee warrants that it holds all certificates, permits, licenses or other entitlements required by federal, state or local laws in order to allow Sublessee to conduct the permitted uses hereunder, and that the same are and will be kept current, valid and complete. Sublessee further warrants that it shall at all times abide by and conform with all terms of the same and that it shall give immediate notice to Sublessor of any additions, renewals, amendments, suspensions or revocations. In the use and occupation of the Subleased Premises and the conduct of such business thereon, Sublessee, at its sole cost and expense, shall promptly comply with all present and future laws, ordinances, orders, rules, regulations and requirements of all federal, state and municipal governments, courts, departments, commissions and boards, any national, state or local Board of Fire Underwriters, or any other body exercising functions similar to those of any of the foregoing, so long as any such compliance does not require modification to the Subleased Premises or to its mechanical or electrical services or components.

9.5.       Sublessee shall have the right to contest by appropriate proceedings diligently conducted in good faith, without cost or expense to Sublessor, the validity or application of any law, ordinance, order, rule, regulation or requirement of the nature referred to in this Article. If compliance with any such law, ordinance, order, rule, regulation or requirement may be delayed on the basis of an order from a court of competent jurisdiction pending the prosecution of any such proceeding without the incurrence of any lien, charge or liability of any kind against the Subleased Premises or Sublessee’s interest therein and without subjecting Sublessor to any liability, civil or criminal, for failure so to comply therewith, Sublessee may delay compliance therewith consistent with such court order. Even if such lien, charge or civil liability would be incurred by reason of any such delay, Sublessee may, with the prior written consent of Sublessor, which consent shall not be unreasonably withheld, conditioned or delayed, contest as aforesaid and delay as aforesaid, provided that such contest or delay does not subject Sublessor to criminal liability, damages or expense and provided that Sublessee: (i) furnishes to Sublessor security, reasonably satisfactory to Sublessor, against any loss or injury by reason of such contest or delay; and (ii) prosecutes the contest with due diligence.

9.6.       Sublessor and PDA shall not be required to join in any proceedings referred to in Section 9.5 unless the provisions of any applicable laws, rules or regulations at the time in effect shall require that such proceedings be brought by and/or in the name of Sublessor and/or PDA and Sublessor and/or PDA determines that such action is in its best interests, in which event Sublessor and/or PDA shall join in the proceedings, or permit the same to be brought in its name, if Sublessee shall pay all expenses in connection therewith.

9.7.       Responsibility for compliance with all federal, state and local laws as required by this Article rests exclusively with the Sublessee so long as any such compliance does not require modification to the Subleased Premises or to its mechanical or electrical services or components. Sublessor assumes no enforcement or supervisory responsibility except with respect to matters committed to its jurisdiction and authority.

9.8.       Sublessee’s use of the Subleased Premises shall be orderly and efficient and shall not cause any disruptions to other Airport activities or other tenants in the building in which the Subleased Premises are a part. Sublessee shall not cause or maintain any nuisance on the Subleased Premises. Sublessee shall conduct all of its activities hereunder in compliance with Article 25 hereof and in an otherwise environmentally responsible manner.

9.9.       Sublessee shall have the right to obtain supplies or services from suppliers, vendors or contractors of its own choice at the Subleased Premises, provided that PDA in the Primary Lease reserved the right to prohibit persons from engaging in “aeronautical activities” (as defined in Advisory Circular AC 150/5190-2A of the Federal Aviation Administration) or the provisions of ground transportation services at the Airport except in accordance with concession contracts or operating agreements entered into between PDA and said persons.

9.10.       Sublessee acknowledges that PDA is subject to certain restrictions on the use of the Airport Property set forth in the Vesting Deed, including the attachments thereto. Notwithstanding any other provision of this Sublease or the Primary Lease, the Sublessee shall also comply with and be subject to the restrictions contained in the Vesting Deed to the extent applicable to the Subleased Premises or any rights granted to Sublessee under the Sublease.

9.11       Sublessee shall conduct its business so that it will not cause any noise or disturbance to other tenants in the Building.

END OF ARTICLE 9

11 

ARTICLE 9A.

[RESERVED]

END OF ARTICLE 9A

12 

ARTICLE 10.

LIENS

10.1.       During the term of this Sublease, Sublessee shall not permit to remain, and shall promptly discharge, at its cost and expense, all liens, encumbrances and charges upon the Subleased Premises or any part thereof which arise as a result of the actions/inactions of Sublessee. Sublessee shall, however, have the right to contest with due diligence the validity or amount of any lien or claimed lien, if Sublessee shall give to Sublessor such security as Sublessor may reasonably require to insure payment thereof and prevent any sale, foreclosure or forfeiture of Sublessee’s interest in the Subleased Premises or any portion thereof by reason of such nonpayment. On final determination of the lien or claim for lien, Sublessee shall immediately pay any judgment rendered with all proper costs and charges and shall have the lien released or judgment satisfied at Sublessee’s own expense, and if Sublessee shall fail to do so, Sublessor may at its option pay any such final judgment and clear the Subleased Premises therefrom. If Sublessee shall fail to contest with due diligence the validity or amount of any such lien or claimed lien, or to give Sublessor security as hereinabove provided, Sublessor may, but shall not be required to, contest the validity or amount of any such lien or claimed lien or settle or compromise the same without inquiring into the validity of the claim or the reasonableness of the amount thereof.

10.2.       Should any lien be filed against the Subleased Premises or the building in which the Subleased Premises are a part arising from work performed by or on behalf of Sublessee, or should any action of any character affecting the title thereto be commenced due to any actions or failure to act of Sublessee, Sublessee shall give to Sublessor written notice thereof as soon as notice of such lien or action comes to the knowledge of Sublessee and Sublessee shall cause any lien or action to be dismissed within a reasonable period time.

END OF ARTICLE 10

13 

ARTICLE 11.

REPAIRS AND MAINTENANCE

11.1.       Sublessee covenants and agrees, throughout the term of this Sublease, without cost to Sublessor, to take good care of the Subleased Premises and related improvements and fixtures and all mechanical equipment serving the interior of Subleased Premises, which is within the Subleased Premises and to keep the same in good order and condition, and shall promptly at Sublessee’s own cost and expense, make all necessary repairs of damage caused by its operations, including any negligence of the Sublessee, its employees or vendors and to keep the Subleased Premises and related improvements and fixtures in safe, clean and sanitary condition. All such repairs made by Sublessee shall be at least equal in quality and class to the original work and shall comply with the provisions of Article 15.

11.2       Unless the need for such repair or replacement is due to the misuse or negligence of Sublessee or its invitees, Sublessor agrees to repair, maintain and replace if necessary, at Sublessor’s expense, the roof, floors, HVAC, structural elements and foundation of the Building in which the Leased Premises is located. Additionally, Sublessor agrees to maintain and keep in good condition and repair (including making necessary capital repairs or replacements) all common areas, including common utilities, grounds, parking areas and walkways.

11.3       If Sublessor fails to maintain, repair, or replace any of the items for which Sublessor is responsible under this Sublease, and such failure continues for ten (10) days after written request by Sublessee, then Sublessee will have the right to perform such maintenance, repair, or replacement at Sublessor’s sole cost and expense (provided such costs and expenses are reasonable) by delivering notice to Sublessor. Sublessor agrees to reimburse Sublessee for the costs and expenses reasonably incurred by Sublessee in connection therewith.

END OF ARTICLE 11

14 

ARTICLE 12.

RIGHT OF SUBLESSOR TO INSPECT AND REPAIR

12.1.       Sublessee will permit Sublessor and/or PDA and their authorized agents and representatives to enter the Subleased Premises at all reasonable times and upon reasonable prior notice for the purpose of inspecting the same and/or making any necessary repairs and/or performing any work that may be necessary by reason of Sublessee’s failure to comply with the terms of this Sublease, provided, however, in the event of an emergency (as determined in Sublessor’s and/or PDA’s sole discretion) no prior notice need be given to Sublessee. Nothing herein shall imply any duty upon the part of Sublessor and/or PDA to do any such work and performance thereof by Sublessor and/or PDA shall not constitute a waiver of Sublessee’s default in failing to perform the same. Sublessor and/or PDA may during the progress of such work keep and store in or on the Subleased Premises all necessary materials, tools, supplies and equipment. Sublessor and/or PDA shall not be liable for inconvenience, annoyance, disturbance, loss of business or other damage of Sublessee by reason of making such repairs or the performance of any such work, on or account of bringing materials, tools, supplies or equipment into or through the Subleased Premises during the course thereof and the obligations of Sublessee under this Sublease shall not be affected thereby, provided, however, that Sublessor shall use commercially reasonable efforts not to interfere with Sublessee’s use of the Premises. Nothing herein shall limit the provisions of Article 8.

12.2.       Sublessee acknowledges that from time to time Sublessor and/or PDA may undertake construction, repair or other activities related to the operation, maintenance and repair of the Building of which the Subleased Premises are a part and/or the Airport (in the case of the PDA) which will require temporary accommodation by Sublessee. Sublessee agrees to accommodate PDA and Sublessor in such matters, even though Sublessee’s own activities may be inconvenienced or partially impaired, and Sublessee agrees that no liability shall attach to Sublessor, PDA, its members, employees or agents by reason of such inconvenience or impairment, unless such activities of Sublessor and/or PDA hereunder are performed in a negligent manner, provided, however, that Sublessor shall use commercially reasonable efforts not to interfere with Sublessee’s use of the Premises.

END OF ARTICLE 12

15 

ARTICLE 13.

GENERAL INDEMNIFICATION

13.1.       In addition to any other obligation of Sublessee under this Sublease to indemnify, defend and hold harmless Sublessor, Sublessee agrees to indemnify, defend and hold harmless Sublessor against and from any and all third party claims, judgments, damages, penalties, fines, assessments, costs and expenses, liabilities and losses (including, without limitation, diminution in value of the Premises, damages for the loss or restriction on the use of the Premises, sums paid in settlement of claims, attorneys’ fees, consultants’ fees and experts’ fees) as a result of the action/inaction of the Sublessee resulting or arising during the term of this Sublease as follows:

(1)       from any condition of the Premises, or complaints of other occupants of the Building resulting from acts or omissions of the Sublessee, agents or employees; or

(2)       from any breach or default on the part of Sublessee in the performance of any covenant or agreement on the part of Sublessee to be performed pursuant to the terms of this Sublease, or from any act or omission of Sublessee, or any of its agents, contractors, servants, employees, sublessees, licensees or invitees; or

(3)       from any accident, injury, loss or damage whatsoever caused to any person or property occurring during the term by act or omission of Sublessee, on or about the Subleased Premises (including ramp and parking areas), or upon the land, streets, curbs or parking areas adjacent thereto.

If any action or proceeding is brought against Sublessor by reason of any matter for which Sublessee has hereby agreed to indemnify, defend, or hold harmless Sublessor, Sublessee, upon notice from Sublessor, covenants to resist or defend such action or proceeding. Notwithstanding the foregoing or anything else to the contrary contained in this Sublease, Sublessor waives the right to recover from Sublessee for any claims, judgments, damages, penalties, fines, assessments, costs and expenses, liabilities and losses to the extent covered by any insurance maintained by Sublessor.

13.2.       The term “Person” as used in this Article and Article 25 shall include individuals, corporations, partnerships, governmental units and any other legal entity entitled to bring a claim, action or other demand or proceeding on its own behalf or on behalf of any other entity.

13.3.       The Sublessee agrees to indemnify, save, hold harmless and defend the Air Force to the same extent required of Sublessor under the Primary Lease with respect to the Premises.

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13.4.       The Sublessee also expressly waives any claims against PDA and the State of New Hampshire and further agrees to indemnify, defend and hold harmless PDA and the State of New Hampshire to the same extent required of the Sublessor under the Primary Lease against and from any and all claims, judgments, damages, penalties, fines, assessments, costs and expenses, liabilities and losses (including, without limitation, diminution in value of the Premises, damages for the loss or restriction on the use of the Premises, sums paid in settlement of claims, attorneys’ fees, consultants’ fees and experts’ fees) resulting or arising during the term of this Sublease: (1) from any act or omission of Sublessee, or any of its agents, contractors, servants, employees, sublessees, licensees or invitees; (2) from any breach or default on the part of the Sublessee in the performance of any covenant or agreement on the part of the Sublessee to be performed pursuant to the terms of this Sublease; or (3) from any accident, injury, death, loss or damage whatsoever caused to any person or property during the term of this Sublease on or about the Subleased Premises.

13.5.       Notwithstanding the preceding provisions of Sections 13.1, 13.3 and 13.4, Sublessee shall be under no obligation to PDA or the Air Force in respect to such matters included in Sections 13.1, 13.3 and 13.4 above in existence prior to the effective date of this Sublease or caused by the negligence or willful misconduct of PDA, its officers, agents or employees, or the gross negligence or willful misconduct of the Air Force, its assigns, agents, contractors, servants or employees or the negligence or willfill misconduct of Sublessor, its officers, agents or employees.

13.6       Sublessor agrees to indemnify, defend and hold harmless Sublessee against and from any and all claims, judgments, damages, penalties, fines, assessments, costs and expenses, liabilities and losses (including, without limitation, diminution in value of the Premises, damages for the loss or restriction on the use of the Premises, sums paid in settlement of claims, attorneys’ fees, consultants’ fees and experts’ fees): (1) from any breach or default on the part of the Sublessor in the performance of any covenant or agreement on the part of the Sublessor to be performed pursuant to the terms of this Sublease; or (2) from any accident, injury, death, loss or damage whatsoever caused to any person or property during the term of this Sublease, on or about the Subleased Premises as a result of the gross negligence or willful misconduct of the Sublessor, its agents, employees or contractors.

END OF ARTICLE 13

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ARTICLE 14.

UTILITIES

14.1.       Sublessee shall not at any time overburden or exceed the capacity of the mains, feeders, ducts, conduits, or other facilities by which such utilities are supplied to, distributed in or serve the Subleased Premises. If Sublessee desires to install any equipment which shall require additional utility facilities or utility facilities of a greater capacity than the facilities provided by Sublessor, such installation shall be subject to Sublessor’s and PDA’s prior written approval of Sublessee’s plans and specifications therefor, which approval shall not be unreasonably withheld, conditioned or delayed. If such installation is approved by Sublessor and PDA and if Sublessor and PDA agree to provide any additional facilities to accommodate Sublessee’s installation, Sublessee agrees to pay Sublessor and/or PDA, in advance and on demand, the reasonable cost for providing such additional utility facilities or utility facilities of greater capacity.

PDA under the Primary Lease also reserved the right to run such utility lines as it deems necessary in connection with the development of the Airport to, from, or through the Subleased Premises, provided, however, that PDA in exercising such reserved right shall provide reasonable prior notice and the opportunity to confer with PDA and shall exercise reasonable efforts to avoid or minimize interference with use of the Subleased Premises and shall not reduce the useable floor area.

PDA under the Primary Lease, at its sole discretion, shall have the right from time to time, to alter the method and source of supply of the above enumerated utilities to the Subleased Premises and Sublessee agrees to execute and deliver to PDA such documentation as may be required to effect such alteration. If the alteration of the method and source of supply of the above enumerated utilities to the Subleased Premises unduly or unreasonably restricts or significantly adversely effects the Sublessee’s use and enjoyment of the Subleased Premises, the Sublessee shall have the right to terminate this Sublease as stated in Article 27 below.

PDA under the Primary Lease, shall have the option to supply any of the above enumerated utilities to the Subleased Premises. If PDA shall elect to supply any of such utilities to the Subleased Premises, Sublessee will purchase its requirements for such services tendered by PDA, and Sublessee will pay PDA, within ten (10) days after mailing by PDA to Sublessee of statements therefor, at the applicable rates determined by PDA from time to time which PDA agrees shall not be in excess of the public utility rates for the same service, if applicable, to other aviation tenants at the Airport. If PDA so elects to supply any of such utilities, Sublessee shall execute and deliver to PDA, within ten (10) days after request therefor, any documentation reasonably required by PDA to effect such change in the method of furnishing of such utilities.

14.2.       All work and construction under this Article shall comply with the provisions of Article 15 of this Sublease applicable to construction work.

14.3.       Sublessee (and any sublessee or assignee of Sublessee) shall be required to comply with any and all land use control regulations promulgated by PDA and any and all federal, state and local requirements and standards concerning storm water discharges and discharges to sewage treatment works, including, without limitation, any pre-treatment requirements.

END OF ARTICLE 14

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ARTICLE 15.

ALTERATIONS - SIGNS

15.1.       Sublessee shall not place or construct any material improvements, changes, structures, alterations or additions (cumulatively referred to in this Article as “Alterations”), in, to or upon the Subleased Premises without Sublessor’s and PDA’s written consent, which shall not be unreasonably withheld, conditioned or unduly delayed by Sublessor. Unless Sublessee is subject to an earlier notice requirement under the PDA’s land use controls or other applicable requirements with respect to the information required under this section, any request for Sublessor’s and PDA’s consent shall be made upon sixty (60) days prior written notice and shall be accompanied by preliminary engineering or architectural plans or, if consented to by Sublessor and PDA, working drawings. If Sublessor and PDA each grants its consent all such work shall be done at Sublessee’s sole cost and expense, subject, in all cases, to the following covenants:

(1)       All work and Alterations shall be done in compliance with all applicable governmental regulations, codes, standards or other requirements, including fire, safety and building codes and Land Use Regulations promulgated by PDA and with the provisions of Article 25 of this Sublease. This obligation shall include compliance with all applicable provisions of the Vesting Deed, including obligations in respect to construction and construction related work.

(2)       All Alterations shall be of such a character as not to materially reduce the value and usefulness of any of the buildings or other improvements below their value and usefulness immediately before such Alteration. All work performed hereunder shall be performed in a good and workmanlike manner, shall conform to drawings and specifications approved by Sublessor and PDA in all material respects and shall not be disruptive of the overall operation of the Airport. All contractors engaged by Sublessee to perform such work shall employ labor that can work in harmony with all elements of labor at the Airport.

(3)       During the period of construction of any Alterations, Sublessee or any contractor, subcontractor or sublessee of Sublessee shall maintain or cause to be maintained the following insurance:

(i)       The comprehensive general liability and property damage and automobile insurance provided for in Section 7.1(B) shall be maintained for the limits specified thereunder and shall provide coverage for the mutual benefit of Sublessor, PDA and Sublessee as named insureds in connection with any Alteration permitted pursuant to this Article 15;

(ii)       Fire and any other applicable insurance provided for in Article 7 which if not then covered under the provisions of existing policies shall be covered by special endorsement thereto in respect to any Alteration, including all materials and equipment therefor incorporated in, on or about the Subleased Premises (including excavations, foundations, and footings) under a broad form all risks builder’s risk completed value form or equivalent thereof; and

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(iii)       Workers’ compensation insurance covering all persons employed in connection with the work and with respect to whom death or bodily injury claims could be asserted against PDA, Sublessor, Sublessee or the Subleased Premises, with statutory limits as then required under the laws of the State of New Hampshire.

The provisions of all applicable Sections of Article 7 of this Sublease shall apply to all insurance provided for in this Section.

(4)       Sublessee shall provide Sublessor and PDA with MYLAR as-built drawings when any Alteration authorized hereunder is completed.

15.2.       In addition to the requirements to provide notice to Sublessor and PDA under this Article 15 in respect to any Alteration, Sublessee shall also provide notice to, EPA and NHDES in the same manner and to the extent required of PDA under the Vesting Deed. In undertaking any Alteration, Sublessee shall comply with the Vesting Deed to the same extent required of Sublessor and PDA.

15.3.       Sublessee shall have the right to install a sign on the front door and existing sign monument at its sole cost and expense, subject to the prior written approval by Sublessor of the design and location, which approval shall not be unreasonably withheld, conditioned or delayed if such sign conforms to existing sign standards of the Building and complies with all laws, regulations and codes.

END OF ARTICLE 15

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ARTICLE 16.

DESTRUCTION AND RESTORATION

16.1.       Subject to the rights of Sublessor’s Mortgagee, if the Premises or the Building are substantially damaged by fire or casualty (the term “substantially damaged” meaning damage of such a character that the same cannot, in ordinary course, reasonably be expected to be repaired within one hundred eighty (180) days from the date of such damage or casualty), or if any substantial part of the Building is taken by any exercise of the right of eminent domain, then the Sublessor shall have the election either to terminate this Sublease in accordance with Section 16.2 as it relates to the damaged portions or to repair the damaged portions in accordance with Section 16.3, subject to the rights of the PDA under the Primary Lease and subject to the rights of Sublessor’s Mortgagee.

16.2.       If the Sublessor elects to terminate this Sublease as allowed in Section 16.1, it shall provide written notice of such termination to Sublessee within thirty (30) days following the occurrence of such damage or destruction, which termination shall be effective on the tenth (10th) day following the date of receipt of such notice. In such event, the proceeds received from any applicable policy of insurance obtained by Sublessor shall be applied first to Sublessor’s mortgagee, second to removing any debris and restoring the site to a condition satisfactory to the Sublessor, and third to any sums owed by Sublessee to the Sublessor under this Sublease, such as, for example, unpaid Rent, subject to rights of the PDA under the Primary Lease. Any balance remaining from any insurance proceeds shall then be apportioned between the Sublessor and Sublessee as follows:

First, to Sublessor an amount equal to the unamortized balance of leasehold improvements made at Sublessor’s expense calculated on a straight line basis over the useful life of said improvement;

Second, to Sublessee an amount equal to the unamortized balance of leasehold improvements made at Sublessee’s expense calculated on a straight line basis over the useful life of said improvement;

Third, to Sublessor any remaining balance; subject to the rights of the PDA under the Primary Lease.

16.3.       If the Sublessor shall elect to repair and restore the damaged premises, it shall provide written notice of such election to Sublessee within thirty (30) days following the occurrence of such damage or destruction and it shall use diligent, commercially reasonable efforts to repair and restore the damaged premises to its condition immediately prior to the occurrence of the fire or other cause as soon as reasonably practicable. In the event of a total loss of the Subleased Premises and Sublessor elects to repair the damage or destruction or fails to exercise its option to terminate herein, Sublessor shall, within 6 months after the date of written notice to Sublessee, have substantially completed the repair and restoration of the damaged property to its condition immediately prior to the occurrence of the fire or other cause, subject to the rights of the PDA under the Primary Lease. In the event of a partial loss involving no damage to structural portions or components of the Subleased Premises and Sublessor elects to repair the damage or destruction or fails to exercise its option to terminate herein, Sublessor shall, within 60 days after the date of written notice to Sublessee, repair and restore the damaged property to its condition immediately prior to the occurrence of the fire or other cause, subject to the rights of the PDA under the Primary Lease. In the event of a partial loss involving damage to structural portions or components of the Subleased Premises and Sublessor elects to repair the damage or destruction or fails to exercise its option to terminate herein, Sublessor shall, within 90 days after the date of written notice to Sublessee, repair and restore the damaged property to its condition immediately prior to the occurrence of the fire or other cause, subject to the rights of the PDA under the Primary Lease.

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16.4.       Sublessor’s obligations to repair hereunder are subject to Sublessor’s receipt of insurance proceeds for such purpose from Sublessor’s mortgagee.

16.5.       All repair/restoration work under this Article shall comply with the provisions of Article 15 of this Sublease applicable to construction work.

16.6.       In the event the loss or damage to Subleased Premises is of such an extent of character that Sublessee’s use of the Premises is substantially effected, Sublessee shall have the option to surrender the Subleased Premises and terminate this Sublease upon thirty (30) days written notice to Sublessor or if Sublessee elects to continue its leasehold interest despite loss of use and unless the damage is caused by Sublessee’s willful misconduct, the Sublessor shall abate the Basic Rent in a just proportion to that part of the Subleased Premises that is unfit for use in Sublessee’s business. The abatement shall consider the nature and extent of interference to Sublessee’s ability to conduct business in the Premises and the need for access and essential services. The abatement shall continue from the date the damage occurred until ten (10) business days after Sublessor completes the repairs and restoration to the Subleased Premises or the part rendered unusable and notice to Sublessee that the repairs and restoration are completed, or until Sublessee again uses the Premises or the part rendered unusable, whichever is first. Sublessor is not obligated to repair or restore damage to Sublessee’s trade fixtures, furniture, equipment or other personal property, or any improvements made by Sublessee.

END OF ARTICLE 16

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ARTICLE 16A.

EMINENT DOMAIN

In the event that there is a taking by eminent domain of the whole of the Subleased Premises, this Sublease shall terminate. In the event that there is a taking by eminent domain of a portion of the Subleased Premises, then this Sublease shall terminate as to the portion taken. In the event that the taking shall not be of the entire Subleased Premises, but the part of the Subleased Premises remaining shall not be reasonably sufficient and suitable for Sublessee’s use and occupancy for the purposes permitted hereunder, then Sublessee may terminate this Sublease forthwith. In all cases, the entire damages attributable to land, buildings and improvements shall belong to Sublessor, provided, however, that Sublessee may receive moving expenses.

END OF ARTICLE 16A

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ARTICLE 17.

DEFAULT BY SUBLESSOR

If Sublessor fails to perform any of Sublessor’s obligations under this Sublease, which failure is not cured within fifteen (15) days after the giving of written notice thereof by Sublessee, unless such default is of such nature that it cannot be cured within such fifteen (15) day period, in which case no event of default shall occur so long as Sublessor shall commence the curing of the default within such fifteen (15) day period and shall thereafter diligently prosecute the curing of same (except in the event of an emergency situation, which is only subject to a five (5) day notice and cure period), then Sublessor shall be in default and Sublessee will have the right (in addition to all other rights and remedies available at law or in equity) to (i) perform such obligation on behalf of Sublessor at Sublessor’s sole cost and expense (provided such costs and expenses are reasonable) by delivering notice to Sublessor, in which event Sublessor agrees to reimburse Sublessee for the reasonable costs and expenses incurred by Sublessee in connection therewith within ten (10) days after request by Sublessee.

END OF ARTICLE 17

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ARTICLE 18.

DEFAULT BY SUBLESSEE

18.1.       The occurrence of any of the following events shall constitute a Default and breach of this Sublease by Sublessee:

A. The failure by Sublessee to pay when due the Basic Rent, or Additional Rent, or any other payment required to be made by Sublessee to Sublessor hereunder where such failure continues for seven (7) business days after written notice thereof by Sublessor to Sublessee.

B.       The abandonment or vacation of the Subleased Premises by Sublessee while in material breach or default of any other provision of this Sublease that lasts for thirty (30) days or more.

C.       The failure by Sublessee to observe and perform any other provision of this Sublease (including without limitation compliance with federal, state and local laws and regulations) to be observed or performed by Sublessee, where such failure continues for thirty (30) business days after written notice thereof by Sublessor to Sublessee; provided that if the nature of such default is such that the same cannot reasonably be cured within such thirty-business-day period, Sublessee shall not be deemed to be in default if Sublessee shall within such period commence such cure and thereafter diligently prosecutes the same to completion.

D.       The making by Sublessee of any general assignment for the benefit of creditors; the filing by or against a Sublessee of a petition to have Sublessee adjudged a bankrupt or of a petition for reorganization or arrangement under any law relating to bankruptcy; or the attachment, execution or other judicial seizure of substantially all of Sublessee’s assets or of Sublessee’s interest in this Sublease; provided, however, that in the event of an involuntary filing against Sublessee, the Sublessee shall have sixty (60) days in which to cause such filing to be dismissed.

E.       If any guarantor attempts to revoke its Guaranty.

18.2.       In the event of any Default by Sublessee, Sublessor shall have the option to terminate this Sublease and all rights of Sublessee hereunder by giving ten (10) days written notice of such intention to terminate in the manner specified herein, or Sublessor may elect among any one or more of the following remedies without limiting any other remedies available to Sublessor:

(1)       subject to available legal and factual defenses,

· a decree or order of a court of competent jurisdiction compelling specific performance by Sublessee of its obligations under the Sublease;

· a decree or order by a court of competent jurisdiction restraining or enjoining the breach by Sublessee of any of its obligations under the Sublease; and

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(2) to the extent allowed by law, the right to undertake to cure Sublessee’s default, in which event Sublessee shall pay Sublessor the reasonable costs incurred in such undertaking;

If Sublessor shall elect to so terminate this Sublease, then Sublessor may recover from Sublessee:

(i) any unpaid rent up to the effective date of termination; plus

(ii) all amounts necessary to compensate Sublessor for all the detriment proximately caused by Sublessee’s failure to perform its obligations under this Sublease or which in the ordinary course of things would be likely to result therefrom, including, the discounted value of the rental payments payable to Sublessor under the full term of this Sublease; provided, however, that Sublessor shall use reasonable efforts to relet the Premises; plus

(iii) the reasonable costs to relet the Premises (including repairs due to damage caused by Sublessee or Sublessee’s failure to maintain the interior of the Premises and reasonable remodeling costs, commissions and all other reasonable costs); plus

(iv) such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by applicable New Hampshire law.

18.3.       In the event of any such default by Sublessee, Sublessor shall also have the right, with or without terminating this Sublease, to peaceably reenter the Subleased Premises and remove all persons and property from the Subleased Premises to the extent allowed under New Hampshire law. Such property may be removed and stored in a public warehouse or elsewhere at the cost of and for the account of Sublessee. Under no circumstances shall Sublessor be held liable in damages or otherwise by reason of any such peaceable reentry or eviction or by reason of the exercise by Sublessor of any other remedy provided in this Article. All property of Sublessee which is stored by Sublessor may be redeemed by Sublessee within thirty (30) days after Sublessor takes possession upon payment to Sublessor in full of all obligations then due from Sublessee to Sublessor and of all costs incurred by Sublessor in providing such storage. If Sublessee fails to redeem such property within this thirty (30) day period, Sublessor may sell the property in any reasonable manner, and shall apply the proceeds of such sale actually collected first against the costs of storage and sale and then against any other obligation due from Sublessee.

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18.4.       In the event of the vacation or abandonment of the Subleased Premises by Sublessee while in material breach or default of any other provision of the Sublease for thirty (30) days or in the event that Sublessor shall elect to reenter as provided in Section 18.3 or shall take possession of the Subleased Premises pursuant to any provision of New Hampshire law or pursuant to any notice provided by law, then if Sublessor does not elect to terminate this Sublease as provided in Section 18.2, Sublessor may from time to time, without terminating this Sublease, either recover all rental as it becomes due or relet the Subleased Premises or any part thereof for such terms and conditions as Sublessor in its reasonable discretion may deem advisable, including the right to make alterations and repairs to the Subleased Premises. In the event that Sublessor shall elect to relet, then rentals received by Sublessor from such reletting shall be applied: first, to the payment of any indebtedness other than rent due hereunder from Sublessee to Sublessor; second, to the payment of any reasonable cost of such reletting; third, to the payment of the reasonable cost of any alterations and repairs to the Subleased Premises; fourth, to the payment of rent due and unpaid hereunder; and the residue, if any, shall be held by Sublessor and applied in payment of future rent as the same may become due and payable hereunder. Should the amount of rental received from such reletting during any month which is applied to the payment of rent be less than that required to be paid during that month by Sublessee under this Sublease, the Sublessee shall pay such deficiency to Sublessor immediately upon demand by Sublessor. Such deficiency shall be calculated and paid monthly. Sublessee shall also pay to Sublessor, as soon as ascertained, any reasonable costs and expenses incurred by Sublessor in such reletting or in making such alterations and repairs not covered by the rentals received from such reletting.

18.5.       The various rights and remedies reserved to Sublessor, including those not specifically described under this Sublease, shall be cumulative, and, except as otherwise provided by New Hampshire statutory law in force and effect at the time of the execution of this Sublease, Sublessor may pursue any or all of such rights and remedies, whether at the same time or otherwise.

18.6.       No delay or omission of Sublessor to exercise any right or remedy shall be construed as a waiver of any such right or remedy or of any default by Sublessee.

18.7.       Notwithstanding any other provision of this Sublease, in the event the breach by Sublessee in the reasonable opinion of Sublessor or PDA affects or is likely to affect the efficient operation of the Airport or give rise to public safety concerns, in addition to any other remedy it may have under this Sublease, Sublessor and PDA under the terms of the Primary Lease shall also be entitled (but shall not be obligated) to take whatever actions is reasonably deemed necessary by Sublessor and/or PDA to abate or cure such situation and Sublessee shall reimburse Sublessor and/or PDA to abate or cure such situation and Sublessee shall reimburse Sublessor and/or PDA for all reasonable costs incurred by Sublessor and/or PDA in taking such action.

END OF ARTICLE 18

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ARTICLE 19.

DELEGATION - ASSIGNMENT - SUBLEASES - MORTGAGES

19.1.       Delegation. Sublessee shall not have the right to delegate any of its responsibilities or obligations under this Sublease.

19.2.       Assignment and Subleases. Sublessee may not assign this Sublease or sublet the Premises without the prior written approval of the Sublessor and PDA which consent shall not be unreasonably withheld, conditioned or delayed by Sublessor, provided the provisions of 19.3 below are satisfied.

19.3.       Consent. Any request for Sublessor’s approval shall be made at least forty-five (45) days prior to the commencement of such subtenancy or assignment and shall provide detailed information concerning the identity and financial condition of the proposed assignee or sublessee and the terms and conditions of the proposed sublease or assignment. Sublessor shall not unreasonably withhold or delay its consent to such sublease or assignment if: (1) the use of the Subleased Premises associated with any sublease(s) is permitted under Article 9 and is compatible with the other existing tenants of the Building in which the Subleased Premises is located, (2) the sublease(s)/assignment(s) are consistent with the terms and conditions of this Sublease and the Primary Lease; (3) Sublessee remains primarily liable to Sublessor to pay rent and to perform all other obligations to be performed by subtenant/assignee under this Sublease, (4) the proposed sublessee is financially and operationally responsible and (5) PDA has given its approval to the proposed sublease/assignment.

19.4.       Continuing Liability of Sublessee. No subletting, assignment or transfer, shall release Sublessee’s obligations or alter the primary liability of Sublessee to pay the rent and to perform all other obligations to be performed by Sublessee hereunder. The acceptance of rent by Sublessor from any other person shall not be deemed to be a waiver by Sublessor of any provision hereof. Consent to one assignment or subletting shall not be deemed consent to any subsequent assignment or subletting. If any assignee of Sublessee or any successor of Sublessee defaults in the performance of any of the terms hereof, Sublessor may proceed directly against Sublessee without the necessity of exhausting remedies against such assignee or successor. If Sublessee assigns this Sublease, or sublets all or a portion of the Subleased Premises, or requests the consent of Sublessor to any assignment or subletting, or if Sublessee requests the consent of Sublessor for any act that Sublessee proposes to do, then Sublessee shall pay Sublessor’s reasonable processing fee and reimburse Sublessor for all reasonable attorneys’ fees incurred in connection therewith. Any assignment or subletting of the Subleased Premises that is not in compliance with the provisions of this Article 19 shall be void.

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19.5.       Bankruptcy. If a petition is filed by or against Sublessee for relief under Title 11 of the United States Code, as amended (the “Bankruptcy Code”), and Sublessee (including for purposes of this Section Sublessee’s successor in bankruptcy, whether a trustee or Sublessee as debtor-in- possession) assumes and proposes to assign, or proposes to assume and assign, this Sublease pursuant to the provisions of the Bankruptcy Code to any person or entity who has made a bona fide offer to accept an assignment of this Sublease, then notice of the proposed assignment setting forth (a) the name and address of the proposed assignee, (b) all of the terms and conditions of the offer and proposed assignment, and (c) the adequate assurance to be furnished by the proposed assignee of its future performance under the Sublease, shall be given to Sublessor by Sublessee no later than twenty (20) days after Sublessee has made or received such offer, but in no event later than thirty (30) days prior to the date on which Sublessee applies to a court of competent jurisdiction for authority and approval to enter into the proposed assignment. Any person or entity to which this Sublease is assigned pursuant to the provisions of the Bankruptcy Code shall be deemed, without further act or documentation, to have assumed all of the Sublessee’s obligations arising under this Sublease on and after the date of such assignment. Any such assignee shall, upon demand, execute and deliver to Sublessor an instrument confirming such assumption. No provision of this Sublease shall be deemed a waiver of Sublessor’s rights or remedies under the Bankruptcy Code to oppose any assumption and/or assignment of this Sublease, to require a timely performance of Sublessee’s obligations under this Sublease, or to regain possession of the Premises if this Sublease has neither been assumed nor rejected within sixty (60) days after the date of the order for relief or within such additional time as a court of competent jurisdiction may have fixed. Notwithstanding anything in this Sublease to the contrary, all amounts payable by Sublessee to or on behalf of Sublessor under this Sublease, whether or not expressly denominated as rent, shall constitute rent for the purposes of Section 502(b)(6) of the Bankruptcy Code.

19.6.       Notwithstanding any other provision of this Sublease, any assignment or sublease shall comply with the provision of Article 25.

19.7.       Mortgages. Except as otherwise expressly agreed to by PDA and Sublessor in writing, Sublessee shall not have the right to engage in any financing or other transaction creating any mortgage upon the Subleased Premises. Any approval of PDA and Sublessor shall expressly be subject to the provisions of the Primary Lease.

END OF ARTICLE 19

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ARTICLE 20

[RESERVED]

END OF ARTICLE 20

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ARTICLE 21.

ESTOPPEL CERTIFICATES

21.1.       Sublessor, on or before twenty (20) days following receipt of a written request from Sublessee, and Sublessee, on or before twenty (20) days following receipt of a written request from Sublessor, shall deliver to the party making such request a statement in writing certifying that this Sublease is unmodified and in full force and effect (or if there shall have been modifications that the same is in full force and effect as modified and stating the modifications) and the date to which the rent and any other deposits or charges have been paid and stating whether or not, to the best knowledge of the party executing such certificate (based on reasonable investigation), the party requesting such statement is in default in the performance of any covenant, agreement or condition contained in this Sublease and, if so, specifying each such default of which the executing party has knowledge. Should any such estoppels certificate contain language subordinating this Sublease to any mortgage or other financing security document, Sublessee shall not be required to sign or deliver it unless it contains a non-disturbance clause preventing the termination of this Sublease so long as Sublessee is not in default of its terms beyond any applicable notice and time to cure period.

END OF ARTICLE 21

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ARTICLE 22.

INVALIDITY OF PARTICULAR PROVISIONS

22.1. If any term or provision of this Sublease, or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Sublease, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provisions of this Sublease shall be valid and be enforced to the fullest extent permitted by law.

END OF ARTICLE 22

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ARTICLE 23.

NOTICES

23.1       Whenever Sublessor or Sublessee shall desire to give or serve upon the other any notice, demand, request or other communication with respect to this Sublease or with respect to the Subleased Premises each such notice, demand, request or other communication shall be in writing and shall not be effective for any purpose unless same shall be given or served by personal delivery to the party or parties to whom such notice, demand, request or other communication is directed or by mailing the same, in duplicate, to such parties by reputable overnight carrier, delivery in hand or by certified mail, postage prepaid, return receipt requested, addressed as follows:

If to Sublessor:	Pioneer New Hampshire LLC.
	Attention: Chad Kageleiry, Member
	P.O. Box 728
	Dover, New Hampshire 03821

If to Sublessee:	FlexEnergy Energy Systems, Inc.
	Attention: Mark Schnepel
	112 Corporate Drive
	Portsmouth, NH 03801

or at such other address or addresses as Sublessor or Sublessee may from time to time designate by notice given by certified mail.

Every notice, demand, request or communication hereunder shall be deemed to have been given or served if hand delivered, when received, if sent by overnight, the next business day, and otherwise as of the second business day following the date of such mailing

END OF ARTICLE 23

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ARTICLE 24.

QUIET ENJOYMENT

24.1.       Sublessor covenants and agrees that Sublessee, upon paying the rent and all other charges herein provided for and observing and keeping all covenants, agreements, and conditions of this Sublease on its part to be observed and kept, shall quietly have and enjoy the Subleased Premises during the term of this Sublease without hindrance or molestation by Sublessor and anyone claiming by, through or under Sublessor, subject, however, to the exceptions, reservations and conditions of this Sublease and the Vesting Deed.

END OF ARTICLE 24

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ARTICLE 25.

ENVIRONMENTAL PROTECTION

25.1.       Sublessee and any sublessee or assignee of Sublessee shall comply with all federal, state, and local laws, regulations, and standards that are or may become applicable to Sublessee’s or such sublessee’s or assignee’s activities at the Subleased Premises, including but not limited to, the applicable environmental laws and regulations identified in Exhibit 5, as amended from time to time.

25.2.       Sublessee and any sublessee or assignee of Sublessee shall be solely responsible for obtaining at their cost and expense any environmental permits required for their operations under this Sublease or any sublease or assignment, independent of any existing Airport permits.

25.3.       Sublessee shall indemnify, defend and hold harmless Sublessor, PDA and the Air Force against and from all claims, judgments, damages, penalties, fines, costs and expenses, liabilities and losses (including, without limitation, diminution in value of the Premises, damages for the loss or restriction on the use of the Premises, and sums paid in settlement of claims, attorneys’ fees, consultants’ fees and experts’ fees), resulting or arising from discharges, emissions, spills, releases, storage, or disposal of any Hazardous Substances by the Sublessee, or any other action by the Sublessee, or any sublessee or assignee of the Sublessee, giving rise to Sublessor or PDA or Air Force liability, civil or criminal, or responsibility under federal, state or local environmental laws.

This indemnification of Sublessor and PDA and Air Force by Sublessee includes, without limitation, any and all claims, judgment, damages, penalties, fines, costs and expenses, liabilities and losses incurred by Sublessor or PDA or Air Force in connection with any investigation of site conditions, or any remedial or removal action or other site restoration work required by any federal, state or local governmental unit or other person for or pertaining to any discharges, emissions, spills, releases, storage or disposal of Hazardous Substances arising or resulting from any act or omission of the Sublessee or any sublessee or assignee of the Sublessee at the Subleased Premises after the Occupancy Date. “Occupancy Date” as used herein shall mean the first day of Sublessee’s occupancy or use of the Subleased Premises. “Occupancy” or “Use” shall mean any activity or presence including preparation and construction in or upon the Subleased Premises.

The provisions of this Section shall survive the expiration or termination of the Sublease, and the Sublessee’s obligations hereunder shall apply whenever the Sublessor, PDA, or the Air Force incurs costs or liabilities for the Sublessee’s actions of the types described in this Article.

25.4.       Notwithstanding any other provision of this Sublease, Sublessee and its assignees do not assume any liability or responsibility for environmental impacts and damage caused by Air Force of Hazardous Substances on any portion of the Airport, including the Subleased Premises. The Sublessee and its assignees have no obligation to undertake the defense, remediation and cleanup, including the liability and responsibility for the costs of damages, penalties, legal and investigative services arising out of any claim or action in existence now, or which may be brought in the future by any person, including governmental units against theAir Force, because of any use of, or release from, any portion of the Airport (including the Subleased Premises) of any Hazardous Substances prior to the Occupancy Date.

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25.5.       As used in this Sublease, the term “Hazardous Substances” means any hazardous or toxic substance, material or waste, oil or petroleum product, which is or becomes regulated by any local governmental authority, the State of New Hampshire or the United States Government. The term “Hazardous Substances” includes, without limitation, any material or substance which is (i) defined as a “hazardous waste,” under New Hampshire RSA ch. 147-A, (ii) defined as a “hazardous substance” under New Hampshire RSA ch. 147-B, (iii) oil, gasoline or other petroleum product, (iv) asbestos, (v) listed under or defined as hazardous substance pursuant to Part Hc.P 1905 (“Hazardous Waste Rules”) of the New Hampshire Code of Administrative Rules, (vi) designated as a “hazardous substance” pursuant to Section 311 of the Federal Water Pollution Control Act (33 U.S.C. §1317), (vii) defined as a “hazardous waste” pursuant to Section 1004 of the Federal Resource Conservation and Recovery Act, 42 U.S.C. §6901 et seq. (42 U.S.C. §6903), or (viii) defined as a “hazardous substance” pursuant to Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. §9601 et seq. (42 U.S.C. §9601) and (ix) so defined in the regulations adopted and publications promulgated pursuant to any of such laws, or as such laws or regulations may be further amended, modified or supplemented (collectively “Hazardous Substance Laws”).

As used in this Sublease, the terms “release” and “storage” shall have the meanings provided in RSA 147-B:2, as amended, and the term “disposal” shall have the meaning provided in RSA 147-A:2.

25.6.       Sublessor’s rights under this Sublease and PDA’s rights under the Primary Lease specifically include the right of Sublessor and PDA to inspect the Subleased Premises and any buildings or other facilities thereon for compliance with environmental, safety, and occupational health laws and regulations, whether or not the Sublessor or PDA is responsible for enforcing them. Such inspections are without prejudice to the right of duly constituted enforcement officials to make such inspections.

25.7.       Notwithstanding any other provision of this Sublease and pursuant to the Primary lease, PDA is not responsible for any removal or containment of asbestos. If Sublessee and any sublessee or assignee intend to make any improvements or repairs that require the removal of asbestos, an appropriate asbestos disposal plan must be incorporated in the plans and specifications. The asbestos disposal plan shall identify the proposed disposal site for the asbestos. In addition, non-friable asbestos which becomes friable through or as a consequence of the activities of Sublessee will be abated by Sublessee at its sole cost and expense.

25.8.       Sublessor and Sublessee acknowledge that the Airport has been identified as a National Priority List (NPL) Site under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) of 1980, as amended. Sublessee acknowledges that Sublessor has provided it with a copy of the Pease Federal Facility Agreement (“FFA”) entered into by EPA, and the Air Force on April 24,1991, and Modification No. 1 thereto, effective March 18, 1993, agrees that it will comply with the terms of the FFA to the extent the same may be applicable to the Subleased Premises and that should any conflict arise between the terms of the FFA and the provisions of this Sublease, the terms of the FFA will take precedence. The Sublessee further agrees that the Sublessor and PDA assume no liability to the Sublessee or any sublessee or assignee of Sublessee should implementation of the FFA interfere with their use of the Subleased Premises. The Sublessee and its sublessee(s) and assignee(s) shall have no claim on account of any such interference against the Sublessor, or PDA or any officer, agent, employee or contractor thereof, other than a claim to Sublessor for abatement of rent.

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25.9.       The Air Force, EPA and NHDES and their officers, agents, employees, contractors, and subcontractors have the right, upon reasonable notice to the Sublessee and any sublessee or assignee, to enter upon the Subleased Premises for the purposes enumerated in this subparagraph and for such other purposes consistent with the FFA:

(1)       to conduct investigations and surveys, including, where necessary, drilling, testpitting, borings and other activities related to the Pease Installation Restoration Program (“IRP”) or the FFA; and

(2)       to inspect field activities of the Air Force and its contractors and subcontractors in implementing the IRP or the FFA;

(3)       to conduct any test or survey required by the EPA and NHDES relating to the implementation of the FFA or environmental conditions at the Subleased Premises or to verify any data submitted to the EPA and NHDES by the Air Force relating to such conditions;

(4)       to construct, operate, maintain or undertake any other response or remedial action as required or necessary under the IRP or the FFA, including, but not limited to monitoring wells, pumping wells and treatment facilities.

25.10.       Sublessee and its sublessees and assignees agree to comply with the provisions of any health or safety plan in effect under the IRP or the FFA during the course of any of the above described response or remedial actions. Any inspection, survey, investigation, or other response or remedial action will, to the extent practicable, be coordinated with representatives designated by the Sublessee and any sublessee or assignee. Sublessee and any sublessee or assignee shall have no claim on account of such entries against the State as defined in FFA or any officer, agent, employee, contractor, or subcontractor thereof.

25.11.       Sublessee further agrees that in the event of any authorized sublease or assignment of the Subleased Premises, it shall provide to the Air Force, EPA and NHDES by certified mail a copy of the agreement of sublease or assignment of the Subleased Premises within fourteen (14) days after the effective date of such transaction. Sublessee may delete the financial terms and any other proprietary information from any sublease or assignment submitted to the above mentioned entities.

25.12.       The Airport air emissions offsets and Air Force accumulation points for hazardous and other wastes will not be made available to Sublessee. Sublessee shall be responsible for obtaining from some other source(s) any air pollution credits that may be required to offset emissions resulting from its activities under the Sublease.

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25.13.       Any permit required under Hazardous Substance Laws for the management of Hazardous Substances stored or generated by Sublessee or any sublessee or assignee of Sublessee shall be obtained by Sublessee or its sublessees or assignees and shall be limited to generation and transportation. Any violation of this requirement shall be deemed a material breach of this Sublease. Sublessee shall provide at its own expense such hazardous waste storage facilities, complying with all laws and regulations, as it needs for management of its hazardous waste.

25.14.       Sublessee, and any sublessee or assignee of Sublessee whose operations utilize Hazardous Substances, shall have a completed and approved plan for responding to Hazardous Substances spills prior to commencement of operations on the Subleased Premises. Such plan shall be independent of, but not inconsistent with, any plan or other standard of PDA applicable to the Airport and except for initial fire response and/or spill containment, shall not rely on use of the Airport or Sublessor personnel or equipment. Should the Sublessor provide any personnel or equipment, whether for initial fire response and/or spill containment or otherwise, on request of the Sublessee, or because the Sublessee was not, in the opinion of the Sublessor, conducting timely cleanup actions, the Sublessee agrees to reimburse the Sublessor for its costs.

25.15.       Sublessee, and any sublessee, or assignee of the Sublessee, must maintain and make available to PDA, the Air Force, EPA and NHDES all records, inspection logs, and manifests that track the generation, handling, storage, treatment and disposal of hazardous waste, as well as all other records required by applicable laws and requirements. PDA and the Air Force reserve the right to inspect the Subleased Premises and Sublessee’s, its sublessee’s or assignee’s records for compliance with Federal, State, local laws, regulations, and other requirements relating to the generation, handling, storage, treatment and disposal of hazardous waste, as well as the discharge or release of hazardous substances. Violations may be reported by PDA and the Air Force to appropriate regulatory agencies, as required by applicable law. The Sublessee, its sublessees or assignees, shall be liable for the payment of any fines and penalties or costs which may accrue to the United States of America or PDA as a result of the actions of Sublessee, its sublessees or assignees, respectively.

25.16.       Sublessee, its sublessees and assignees agree to comply with the provisions of any Wetlands Management Plan in effect at Pease. Sublessee, its sublessees and assignees will minimize the destruction, loss or degradation of wetlands on the Subleased Premises. Sublessee, its sublessees and assignees will obtain prior written approval from Sublessor and the Air Force before conducting any new construction in wetland areas. Sublessee, its sublessees and assignees will obtain all necessary permits or waivers under Section 404 of the Clean Water Act and the New Hampshire Fill and Dredge in Wetlands Act.

25.17.       Prior to the development of any portion of the Subleased Premises on which a wetland has been identified in the Final Supplemental Environmental Impact Statement dated August 1995 (“SEIS”), the Sublessee, its sublessees and assignees, as applicable, shall, if one has not previously been completed, perform a wetland delineation.

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25.18.       Prior to the storage, mixing, or application of any pesticide, as that term is defined under the Federal Insecticide, Fungicide, and Rodenticide Act, the Sublessee, its sublessees and assignees shall prepare a plan for storage, mixing and application of pesticides (“Pesticide Management Plan”). The Pesticide Management Plan shall be sufficient to meet all applicable Federal, State and local pesticide requirements. The Sublessee, its sublessees and assignees shall store, mix and apply all pesticides within the Subleased Premises only in strict compliance with the Pesticide Management Plan. The pesticides will only be applied by a licensed applicator.

25.19.       The Sublessee, its sublessees and assignees must notify the Sublessor and the Site Manager of its intent to possess, store, or use any licensed or licensable source or byproduct materials, as those terms are defined under the Atomic Energy Act and its implementing regulations; of Sublessee’s, its sublessees and assignees intent to possess, use, or store radium; and of Sublessee’s, its sublessees and assignees intent to possess or use any equipment producing ionizing radiation and subject to specific licensing requirements or other individual regulations, at least sixty (60) days prior to the entry of such materials or equipment upon the Airport. Upon notification, the Sublessor and the Site Manager may impose such requirements, including prohibition of possession, use, or storage, as deemed necessary to adequately protect health and human environment. Thereafter, the Sublessee must notify the Sublessor and the Site Manager of the presence of all licensed or licensable source or other byproduct materials, of the presence of all radium, and of the presence of all equipment producing ionizing radiation and subject to specific licensing requirements or other individual regulation; provided, however, that the Sublessee, its sublessees and assignees need not make either of the above notifications to the Sublessor and the Site Manager with respect to source and byproduct material which is exempt from regulation under the Atomic Energy Act. The Sublessee shall not, under any circumstances, use, own, possess or allow the presence of special nuclear material on the Subleased Premises.

25.20.       The Sublessee, its sublessees and assignees acknowledge that lead-based paint may be present in and on facilities within the Subleased Premises. The Air Force may conduct surveys to determine the existence and extent of any possible lead-based paint in or on the Subleased Premises. Prior to beginning any Alterations, other construction or construction related work, (to include paint stripping or sanding), excavating, demolition, or restoration, the Sublessee, any sublessee or assignee must test any paint which would be disturbed unless a conclusive determination has been made that lead-based paint is not present. If paint is lead-based, the Sublessee, any sublessee or assignee is required to handle it in accordance with Title X and all applicable Federal, State and local laws and regulations at its own expense. The Sublessee is required to ensure that any lead-based paint is maintained in good condition.

25.21.       The Sublessee acknowledges that chlordane was used at selected housing units as described in Environmental Condition Report, Exhibit D-l of the Master Lease. The Sublessee, its sublessees or assignees will follow all applicable laws and regulations should the Sublessee, its sublessee or assignee choose to disturb or excavate any of this material. Any cost associated with this action shall be at the Sublessee’s, its sublessee’s or assignee’s expense.

25.22.      The Sublessee, its sublessees and assignees acknowledge receipt of the Addendum to the June 24, 1997 Finding of Suitability to Lease (FOSL) attached hereto and incorporated herein as Exhibit 1.

END OF ARTICLE 25

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ARTICLE 26.

MISCELLANEOUS

26.1.         All rent and all other sums which may from time to time become due and payable by Sublessee to Sublessor under any of the provisions of this Sublease shall be made payable to the Sublessor and forwarded by the Sublessee direct to Sublessor’s address specified in Article 23. All such rent and other sums if not paid on the due date shall bear interest from and after the due date thereof at the higher of the then current rate applied to legal judgments by the courts of the State of New Hampshire or the rate of twelve percent (12%) per annum; provided, however, that such interest shall in no event exceed the maximum rate permitted by law.

26.2.         In all cases the language in all parts of this Sublease shall be construed simply, according to its fair meaning and not strictly for or against Sublessor or Sublessee.

26.3.         The word titles underlying the Article designations contained herein are inserted solely for convenience and under no circumstances are they or any of them to be treated or construed as any part of this instrument.

26.4.         In any action or proceeding which either Party may take to enforce such Party’s rights hereunder, whether prior to or after breach or termination, or to which such Party may be made a party because of any matters arising or growing out of this Sublease, and due to the act or default of the other, the Party whose act or default caused the other Party, without fault to become involved in such litigation, or who shall be defeated in such litigation, agrees to pay all costs incurred by the winning or other party therein, including reasonable attorneys’ fees.

26.5.         If Sublessee should remain in possession of the Subleased Premises after the expiration of the term of this Sublease and without executing a new lease, then such holding over shall be construed as a tenancy at sufferance and the Basic Rent due and payable shall be one and one half times the amount of the Basic Rent due under this Sublease immediately prior to the expiration of this Sublease.

26.6.         The individuals executing this Sublease on behalf of Sublessee and Sublessor represent and warrant that he or she is duly authorized to execute and deliver this Sublease on behalf of said entities, and that this Sublease is binding upon said entities in accordance with its terms. A Certificate of Authority to Do Business in the State of New Hampshire from the New Hampshire Secretary of State is attached as Exhibit 6.

26.7.         This Sublease covers in full each and every agreement of every kind or nature whatsoever between the Parties hereto concerning the Subleased Premises and all preliminary negotiations and agreements of every kind or nature whatsoever with respect to the Subleased Premises; and no other person, firm or corporation has at any time had any authority from Sublessor to make any representations or promises on behalf of Sublessor, and Sublessee expressly agrees that if any such representations or promises have been made by Sublessor or others, Sublessee hereby waives all right to rely thereon. No verbal agreement or implied covenant shall be held to vary the provisions hereof, any statute, law, or custom to the contrary notwithstanding. No provision of this Sublease may be amended or added to except by an agreement in writing signed by the Parties hereto or their respective successors in interest. Sublessee acknowledges that it has read this Section and understands it to be a waiver of any right to rely on any representations or agreements not expressly set forth in this Sublease.

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26.8.         Subject to the provisions hereof, this Sublease shall be binding upon and shall inure to the benefit of the Parties hereto and their respective successors and assigns, and wherever a reference in this Sublease is made to either of the Parties hereto, such reference shall be deemed to include, wherever applicable, also a reference to the successors and assigns of such party, as if in every case so expressed.

26.9.         Nothing contained in this Sublease shall be deemed or construed by the Parties hereto or by any third person to create the relationship of principal and agent or of partnership or of joint venture or of any association between Sublessor and Sublessee, and neither the method of computation of rent nor any other provision contained in this Sublease nor any acts of the Parties hereto shall be deemed to create any relationship between Sublessor and Sublessee other than the relationship of landlord and tenant.

26.10.       Sublessee agrees that it dealt with no broker.

26.11.       This Sublease shall be construed and enforced in accordance with the laws of the State of New Hampshire.

26.12.       Any actions or proceedings with respect to any matters arising under or growing out of this Sublease shall be instituted and prosecuted only in courts located in the State of New Hampshire. Nothing contained in this Article or any other provision of this Sublease shall be deemed to constitute a waiver of the sovereign immunity of the State of New Hampshire, which immunity is hereby reserved to PDA and to the State of New Hampshire.

26.13.       This instrument may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

26.14.       Sublessee shall faithfully observe and comply with such rules and regulations as the PDA may adopt and modify from time to time for the operation of the Airport and such rules and regulations as Sublessor may reasonably adopt from time to time for the operation of the building and lot of which the Subleased Premises are a part. Neither PDA nor Sublessor shall be responsible to Sublessee for the violation or nonperformance by any other tenant of the PDA or Subtenant of Sublessor of such airport rules and regulations or of Sublessor’s rules and regulations, provided, however, that Sublessor shall use reasonable efforts to apply such rules and regulations uniformly to all tenants and subtenants.

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26.15.       Force Majeure. Except for the performance of any monetary payment obligations hereunder, the duties of Sublessor or Sublessee to observe or perform any of the provisions of this Sublease on its part to be performed or observed shall be excused for a period equal to the period of prevention, delay or stoppage due to causes beyond the control of the affected party, by reason of strikes, civil riots, shortages of materials (except in the event materials of like kind or quality are available), war, invasion, fire or other casualty, labor unrest (unless such labor unrest solely affects the Property and is not a result of Sublessee’s acts, omission or negligence but is caused by the acts, omissions or negligence of Sublessor), actions or public utilities, Acts of God, adverse seasonal or weather conditions beyond those normally experienced in the Portsmouth area, or other events beyond the reasonable control of the affected party (“Force Majeure”), provided that (a) the affected party has taken steps that are reasonable under the circumstances to mitigate the effects of such Force Majeure situation, and (b) the affected party notifies the other party in writing of the event of Force Majeure within five (5) days after the affected party obtains actual knowledge of the occurrence thereof. This clause shall not be applicable to any payment of rent or other charges due from Sublessee to Sublessor.

26.16.       Sublessee agrees to conform to such additional provisions required, from time to time, by the FAA (“FAA Requirements”) or its successor with respect to the operation of the Airport, or a portion thereof. The current FAA Requirements are attached hereto as Exhibit 7 and incorporated herein by reference.

26.17.       This Sublease is subject and subordinate to any agreements heretofore or hereafter made between PDA and the United States or the Air Force, the execution of which was required to enable or permit transfer of rights or property to PDA for airport purposes or expenditure of federal grant funds for airport improvement, maintenance or development, including, without limitation, the Vesting Deed and FFA. Sublessee shall abide by requirements of any agreement between PDA and the United States or the Air Force or the FAA applicable to the Subleased Premises or Sublessee’s activities at the Airport and shall consent to amendments and modifications of this Sublease if required by such agreements or as a condition of PDA’s entry into such agreements. If any such amendment or modification to this Sublease unduly or unreasonably restricts or significantly adversely affects the Sublessee’s use and enjoyment of the Subleased Premises, the Sublessee shall have the right to terminate this Sublease as stated in Article 27 below.

26.18.       This Sublease is further subject and subordinate to the Primary Lease between PDA and Sublessor, and Sublessee shall abide by the provisions of the Primary Lease applicable to the Subleased Premises or Sublessee’s activities at the Airport.

26.19.       Sublessee acknowledges that PDA, in its sole discretion, shall determine and may from time to time change the routes of surface ingress and egress connecting the Subleased Premises. PDA also reserves the right to further develop the Airport, or such portion of the Airport as is owned or controlled by PDA, as it sees fit, regardless of the desires or views of Sublessee and without interference or hindrance. If any such changes to ingress and egress or further development by the PDA significantly adversely affects the Sublessee’s use and enjoyment of the Subleased Premises, the Sublessee shall have the right to terminate this Sublease as stated in Article 27 below.

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26.20.       The Sublessee herein covenants by and for itself, its heirs, executors, administrators, and assigns, and all persons claiming under or through it, that this Sublease is made and accepted upon and subject to the following conditions:

That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, national origin, or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the Premises herein leased nor shall the Sublessee, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the Subleased Premises herein leased.

26.21.       All obligations of Sublessee to indemnify, defend and hold harmless Sublessor, and PDA and to make any monetary payment to Sublessor, and PDA shall survive the termination or expiration of this Sublease. All obligations of Sublessor to indemnify, defend and hold harmless Sublessee shall survive the termination or expiration of this Sublease.

END OF ARTICLE 26

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ARTICLE 27.

TERMINATION OF SUBLEASE

27.1.       The Parties acknowledge that: (i) this Sublease incorporates by reference a number of ancillary documents including but not limited to the Vesting Deed, the FFA, and the Primary Lease (the “Incorporated Documents”) and (ii) the PDA and the Sublessor have reserved certain rights therein and herein (the “Reserved Rights”). In the event that the provisions of the Incorporated Documents and/or the Reserved Rights, if exercised, unduly or unreasonably restrict or significantly adversely affect the Sublessee’s use and enjoyment of the Subleased Premises or impose a material obligation upon the Sublessee which is other than those expressly set forth in this Sublease, then the Sublessee may provide written notice to the Sublessor of the nature of the obligation or action or inaction and the consequent significant adverse effect such action or inaction has had on the Sublessee within ten (10) days after Sublessee has actual knowledge thereof. Failure of Sublessee to notify Sublessor within the ten (10) day time period shall be deemed a waiver of its right to terminate this Sublease. Sublessor shall have 60 days after receipt of Sublessee’s written notice in which to eliminate the significant or adverse effect on the Sublessee. If the Sublessor is unable to eliminate the significant adverse effect on the Sublessee within the 60-day period, Sublessee may terminate this Sublease by giving Sublessor a second written notice to Sublessor terminating this Sublease which termination shall be effective thirty (30) days after receipt of the second written notice by Sublessor. During any period that actions of the PDA or the Sublessor unduly or unreasonably restrict or significantly adversely affects the Sublessee’s use and enjoyment of the Subleased Premises, Sublessee’s rent shall be equitably abated during such period of time.

END OF ARTICLE 27

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EXECUTION

IN WITNESS WHEREOF, Sublessor and Sublessee have executed duplicate originals of this Sublease as of December 23, 2020.

SUBLESSOR:
PIONEER NEW HAMPSHIRE LLC
By:	/s/ Chad Kageleiry
	Chad Kageleiry, Its Member,
	Duly Authorized
SUBLESSEE:
FLEXENERGY ENERGY SYSTEMS, INC.
By:	/s/ Mark G. Schnepel
	Name: Mark G. Schnepel
	Title: President and CEO
	Duly Authorized

STATE OF NEW HAMPSHIRE

COUNTY OF Strafford

This instrument was acknowledged before me on this 29 day of December, 2020 by Chad Kageleiry as member of Pioneer New Hampshire LLC.

/s/ Melanie Morin

Notary Public/ Justice of the Peace

(Seal, if any)

My Commission Expires:

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STATE OF MASSACHUSETTS

COUNTY OF ESSEX

This instrument was acknowledged before me on this 23^rd day of December, 2020 by Mark G. Schnepel as President and CEO of FlexEnergy Energy Systems, Inc.

		/s/ Andrea Hellrigel
		Notary Public/ Justice of the Peace
(Seal, if any)
		My Commission Expires: 4.20.2023

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EXHIBIT 1

PRIMARY LEASE

On file with PDA

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EXHIBIT 2

VESTING DEED

On file with PDA

48 

EXHIBIT 3

PLANS DESIGNATING THE SUBLEASED PREMISES

[To Be Attached]

49 

 

50 

EXHIBIT 4

SUBLESSOR’S WORK

Sublessor will:

· Create a passage in between the two spaces

· Provide a fresh coat of paint on the walls

· Shampoo carpets

· Remove small kitchenette

· Add four (4) solid birch doors with full light

· Repair exterior stucco at entry

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EXHIBIT 5

LIST OF ENVIRONMENTAL LAWS AND REGULATIONS

Air Quality:	(a)	Clean Air Act & Amendments, 42 U.S.C. 7401-7642
	(b)	40 CFR Parts 50-52, 61, 62, 65-67, 81
	(c)	RSA ch. 125-C, Air Pollution Control, and rules adopted thereunder
	(d)	RSA ch. 125-H, Air Toxic Control Act, and rules adopted thereunder

Hazardous Materials:	(a)	Hazardous Materials Transportation Act, 49 U.S.C. 1801-1813, and Department of Transportation Regulations thereunder
	(b)	Emergency Planning and Community Right-To-Know Act, 42 U.S.C. 11001-11050
	(c)	49 CFR Parts 100-179
	(d)	40 CFR Part 302
	(e)	RSA ch. 277-A, Toxic Substances in the Workplace, and rules adopted thereunder

Hazardous Waste:	(a)	Resource Conservation and Recovery Act (RCRA) of 1976 and RCRA Amendments of 1984, 42 U.S.C. 6901-6991i
	(b)	Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) of 1980, as amended, 42 U.S.C. 9601-9675
	(c)	40 CFR Parts 260-271, 300, 302
	(d)	RSA ch. 147-A, Hazardous Waste Management, and rules adopted thereunder

Water Quality:	(a)	Federal Water Pollution Control Act (Clean Water Act) and Amendments, 33 U.S.C. 1251-1387
	(b)	Safe Drinking Water Act, as amended, 42 U.S.C. 300f- 300j-26, 40 CFR Title 100-143, 401 and 403
	(c)	RSA ch. 146-A, Oil Spillage in Public Waters, and rules adopted thereunder
	(d)	RSA ch. 485, New Hampshire Safe Drinking Water Act, and rules adopted thereunder
	(e)	RSA ch. 485-A, Pollution and Waste Disposal, and rules adopted thereunder

52 

EXHIBIT 6

SUBLESSEE CERTIFICATE OF GOOD STANDING

State of New Hampshire

Department of State

CERTIFICATE

I, William M. Gardner, Secretary of State of the State of New Hampshire, do hereby certify that FLEXENERGY ENERGY SYSTEMS, INC. is a Delaware Profit Corporation registered to transact business in New Hampshire on April 04, 2011. I further certify that all fees and documents required by the Secretary of State’s office have been received and is in good standing as far as this office is concerned.

Business ID: 646930

Certificate Number: 0005053485

	IN TESTIMONY WHEREOF,
	I hereto set my hand and cause to be affixed the Seal of the State of New Hampshire, this 9th day of December A.D. 2020.
	/s/ William M. Gardner
	William M. Gardner
	Secretary of State

53 

EXHIBIT 7

SUBLEASE PROVISIONS REQUIRED BY

THE FEDERAL AVIATION ADMINISTRATION

1.       Sublessee, for himself, his heirs, personal representatives, successors in interest, and assigns, as a part of the consideration hereof, does hereby agree that in the event facilities are constructed, maintained, or otherwise operated on the Subleased Premises, for a purpose for which a United States Department of Transportation (“DOT”) program or activity is extended or for another purpose involving the provision of similar services or benefits, Sublessee shall maintain and operate such facilities and services in compliance with all other requirements imposed pursuant to Title 49, Code of Federal Regulations, DOT, Subtitle A, Office of the Secretary, Part 21, Nondiscrimination in Federally Assisted Programs of the Department of Transportation Effectuation of Title VI of the Civil Rights Act of 1964, and as said Regulations may be amended.

2.       Sublessee, for himself, his personal representative, successors in interest, and assigns, as a part of the consideration hereof, does hereby agree that: (i) no person on the grounds of race, color, or national origin, shall be excluded from participation in, denied the benefits of, or otherwise be subjected to discrimination in the use of said facilities; (ii) that in the construction of any improvements on, over, or under such land and the furnishing of services thereon, no person on the grounds of race, color, or national origin shall be excluded from participation in, denied the benefits of, or otherwise be excluded from participation in, denied the benefits of, or otherwise be subject to discrimination; and (iii) that the Sublessee shall use the premises in compliance with all other requirements imposed by or pursuant to Title 49, Code of Federal Regulations, Department of Transportation, Subtitle A, Office of the Secretary, Part 21, Nondiscrimination in Federally-Assisted Programs of the Department of Transportation Effectuation of Title VI of the Civil Rights Act of 1964, and as said Regulation may be amended.

3.       That in the event of breach of any of the above nondiscrimination covenants, Sublessor shall have the right to terminate the Sublease, and to reenter and repossess said land and the facilities thereon, and hold the same as if said lease, had never been made or issued. This provision does not become effective until the procedures of 49 CFR, Part 21 are allowed and completed including expiration of appeal rights.

4.       Sublessee shall furnish its accommodations and/or services on a fair, equal and not unjustly discriminatory basis to all users thereof and it shall charge fair, reasonable and not unjustly discriminatory prices for each unit or service; PROVIDED THAT the Sublessee may be allowed to make reasonable and nondiscriminatory discounts, rebates or other similar type of price reductions to volume purchasers.

5.       Non-compliance with Provision 4 above shall constitute a material breach thereof and in the event of such non-compliance Sublessor shall have the right to terminate this Sublease, and the estate hereby created without liability therefor or at the election of the Sublessor or the United States either or both of Sublessor or the United States shall have the right to judicially enforce provisions.

54 

6.       Sublessee agrees that it shall insert the above five provisions in any lease agreement, by which said Sublessee grants a right or privilege to any person, firm or corporation to render accommodations and/or services to the public on the Subleased Premises.

7.       Sublessee assures that it will undertake an affirmative action program as required by 14 CFR, Part 152, Subpart E, to insure that no person shall on the grounds of race, creed, color, national origin, or sex be excluded from participating in any employment activities covered in 14 CFR, Part 152, Subpart E. Sublessee assures that no person shall be excluded on these grounds from participating in or receiving the services or benefits of any program or activity covered by this subpart. Sublessee assures that it will require that its covered suborganizations provide assurance to the Sublessor, that they similarly will undertake affirmative action programs and that they will require assurances from their suborganizations, as required by 14 CFR, Part 152, Subpart E, to the same effect.

8.       Sublessor reserves the right to further develop or improve the landing area of the Airport as it sees fit, regardless of the desires or view of the Sublessee and without interference or hindrance.

9.       Sublessor reserves the right, but shall not be obligated to the Sublessee, to maintain and keep in repair the landing area of the Airport and all publicly-owned facilities of the Airport, together with the right to direct and control all activities of the Sublessee in this regard.

10.     This Sublease shall be subordinate to the provisions and requirements of any existing or future agreement the Sublessor and the United States, relative to the development, operation or maintenance of the Airport.

11.     There is hereby reserved to Sublessor, its successors and assigns, for the use and benefit of the public, a right of flight for the passage of aircraft in the airspace above the surface of the Subleased Premises. This public right of flight shall include the right to cause in said airspace any noise inherent in the operation of any aircraft used for navigation or flight through the said airspace or landing at, taking off from or operation on the Airport.

12.     Sublessee agrees to comply with the notification and review requirements covered in Part 77 of the Federal Aviation Regulations in the event future construction of building is planned for the Subleased Premises, or in the event of any planned modification or alteration of any present or future building or structure situated on Subleased Premises.

13.     Sublessee, by accepting this Sublease expressly agrees for itself, its successors and assigns that it shall not erect nor permit the erection of any structure or object not permit the growth of any tree on the land leased hereunder above the mean sea level elevation of 200 feet. In the event the aforesaid covenants are breached, Sublessor reserves the right to enter upon the Premises and to remove the offending structure or object and cut the offending tree, all of which shall be at the expense of the Sublessee.

14.     Sublessee, by accepting this Sublease, agrees for itself, its successors and assigns that it will not make use of the Subleased Premises in any manner which might interfere with the landing and taking off of aircraft from the Airport or otherwise constitute a hazard. In the event the aforesaid covenant is breached, Sublessor reserves the right to enter upon the Subleased Premises, and cause the abatement of such interference at the expense of the Sublessee.

15.     It is understood and agreed that nothing herein contained shall be construed to grant or authorize the granting of an exclusive right within the meaning of Section 308a of the Federal Aviation Act of 1958 (49 U.S.C. 1349a).

16.     This Sublease and all the provisions hereof shall be subject to whatever right the United States Government now has or in the future may have or acquire, affecting the control, operation, regulation and taking over of said Airport or the exclusive or non-exclusive use of the Airport by the United States during the time of war or national emergency.

55 

EX-10.9

Exhibit 10.9

 

PLAZA TOWER ONE

Office Lease

BETWEEN

GPI PLAZA TOWER, LP,

A TEXAS LIMITED PARTNERSHIP,

AS LANDLORD,

AND

FLEX LEASING POWER & SERVICE LLC,

A DELAWARE LIMITED LIABILITY COMPANY,

AS TENANT

6400 SOUTH FIDDLERS GREEN CIRCLE

GREENWOOD VILLAGE, COLORADO 80111

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One 

i 

OFFICE LEASE

BASIC LEASE INFORMATION

1. Date of Lease: February 19, 2018

2. Building:

a. Name: PLAZA TOWER ONE

b. Address: 6400 SOUTH FIDDLERS GREEN CIRCLE

GREENWOOD VILLAGE, CO 80111

c. Building Rentable Area: 457,919 square feet

3. Tenant: Flex Leasing Power & Service LLC

4. Premises:

a. Suite: 900

b. Premises Rentable Area: 7,972 square feet

5. Basic Rent:

	Annual Rate Per		Basic
Rental	Square Foot of Premises		Monthly
Period	Rentable Area		Rent
Commencement Date
– Month 16	$	31.00	$	20,594.33	*
Months 17-28	$	31.78	$	21,109.19
Months 29-40	$	32.57	$	21,636.92
Months 41-52	$	33.38	$	22,177.84
Months 53-64	$	34.22	$	22,732.29

* Notwithstanding anything to the contrary contained in this Lease, Landlord agrees not to demand or collect from Tenant Basic Monthly Rent for the first four (4) months after the Commencement Date (the “Abatement Period”). If the Abatement Period ends on a day other than the first day of a calendar month, Basic Monthly Rent for the month in which the Abatement Period ends shall be prorated based on the number of days after the Abatement Period in such month and the number of days in such month. If a default beyond any applicable cure period provided for herein occurs at any time during the Term, the abated Basic Monthly Rent for the Abatement Period will be immediately due and payable. Except for such Basic Monthly Rent abatement, all of the terms and conditions of this Lease will be applicable during the Abatement Period.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One 

i 

6. Tenant’s Share: 1.74% (See subsection 1.1.2)

7. Operating Base Year: The calendar year 2018

8. Tax Base: The calendar year 2018

9. Term: Approximately sixty-four (64) full calendar months

10. Commencement Date: Upon Substantial Completion of the Tenant’s Improvements (as those terms are defined in Exhibit C), which is estimated to be May 1, 2018, subject to subsection 1.2.1

11. Expiration Date: The last day of the sixty-fourth (64^th) full calendar month after the Commencement Date, subject to subsection 1.2.1

12. Permitted Use: General office use.

13. Security Deposit: $22,732.29

14. Guarantor: None.

15. Addresses:

(a) Landlord: GPI Plaza Tower, LP

For Payment of RENT only:	WIRE INSTRUCTIONS FOR RENT
GPI Plaza Tower, LP
PO Box 201365	Bank Name Wells Fargo Bank, NA
Dallas, TX 75320-1365	ABA Number 121000248
	Account Name Granite Properties,
	Inc.
	Account Number 4945061919
	Reference 6400 South Fiddlers
	Green Circle and Suite Number

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One 

ii 

	For NOTICES only:	With a copy at the same time to:
	c/o Property Management	5601 Granite Parkway, Suite 800
	Plaza Tower One	Plano, Texas 75024
	6400 South Fiddlers Green Circle,	Attention: Director of Leasing
	Suite 500	Phone: 972-731-2300
	Greenwood Village, CO 80111	Fax: 972-731-2360
(b)	Tenant: Flex Leasing Power &
	Service LLC
	For Notices prior to the	For Notices from and after the
	Commencement Date:	Commencement Date:
	6400 S. Fiddler’s Green Circle	6400 S. Fiddler’s Green Circle
	Suite 450	Suite 900
	Greenwood Village, CO. 80111	Greenwood Village, CO. 80111
	Attention: Doug Baltzer	Attention: Doug Baltzer
	Phone: (720) 573-7664	Phone: (720) 573-7664
	Email:	Email:
	Doug.baltzer@flexleasingpower.com	Doug.baltzer@flexleasingpower.com
	With a copy to:	With a copy to:
	Lewis Roca Rothgerber	Lewis Roca Rothgerber
	Christie LLP	Christie LLP
	1200 17th Street, Suite 3000	1200 17th Street, Suite 3000
	Denver, CO 80202-5855	Denver, CO 80202-5855
	Attention: Joel Fry	Attention: Joel Fry
	Phone: (303) 628-9547	Phone: (303) 628-9547
	Email: jfry@lrrc.com	Email: jfry@lrrc.com

16. Parking:

2 Reserved spaces at $75.00

per month each

21 Unreserved spaces at $55.00

per month each

23 Total spaces

(Subject to Exhibit F)

17. Brokers: Colliers International (Robert Whittelsey and Katy Sheehy) on behalf of Landlord and JLL (Tim Bourdelais) on behalf of Tenant.

18. Tenant’s Improvements:

Shall be constructed on a “turn-key” basis by Landlord.

(Subject to Exhibit C)

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One 

iii 

TABLE OF CONTENTS

FOR OFFICE LEASE

	Page
ARTICLE 1 TERM AND POSSESSION	1
ARTICLE 2 RENT	6
ARTICLE 3 SECURITY DEPOSIT	13
ARTICLE 4 OCCUPANCY AND USE	13
ARTICLE 5 UTILITIES AND SERVICES	15
ARTICLE 6 MAINTENANCE, REPAIRS, ALTERATIONS AND IMPROVEMENTS	18
ARTICLE 7 INSURANCE AND CASUALTY	20
ARTICLE 8 CONDEMNATION	25
ARTICLE 9 LIENS	25
ARTICLE 10 TAXES ON TENANT’S PROPERTY	26
ARTICLE 11 SUBLETTING AND ASSIGNING	26
ARTICLE 12 TRANSFERS BY LANDLORD, SUBORDINATION AND TENANT’S ESTOPPEL CERTIFICATE	28
ARTICLE 13 DEFAULT	29
ARTICLE 14 NOTICES	33
ARTICLE 15 MISCELLANEOUS PROVISIONS	33

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One 

iv 

EXHIBITS TO OFFICE LEASE

Exhibit A	Land Legal Description
Exhibit B	Premises Floor Plan
Exhibit C	Work Letter
Exhibit D	Rules and Regulations
Exhibit E	Acceptance of Premises Memorandum
Exhibit F	Parking Agreement

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One 

v 

OFFICE LEASE

This Office Lease (this “Lease”) is made by and between GPI PLAZA TOWER, LP, a Texas limited partnership (“Landlord”), and FLEX LEASING POWER & SERVICE LLC, a Delaware limited liability company (“Tenant”). The Basic Lease Information attached hereto as pages i through iv (the “Basic Lease Information”) and all exhibits and other attachments to this Lease are incorporated into this Lease and made a part hereof. Capitalized terms used in this Lease without definitions have the respective meanings assigned to them in the Basic Lease Information.

ARTICLE 1

TERM AND POSSESSION

SECTION 1.1         LEASE OF PREMISES, COMMENCEMENT AND EXPIRATION.

1.1.1 Lease of Premises. The Building is constructed on the land described in Exhibit A attached hereto (the “Land”) and is served by a parking garage structure (the “Garage”). In consideration of the mutual covenants herein, Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the Premises, subject to all the terms and conditions of this Lease. The Building includes a “Tower” and a “Retail Area”. The Premises are shown as the crosshatched area on Exhibit B attached hereto. The Building, the Garage, the Land and all other improvements located thereon and appurtenances thereto are referred to collectively herein as the “Property”.

1.1.2 Rentable Area. The agreed rentable area of the Premises is stipulated to be the Premises Rentable Area, which is set forth in the Basic Lease Information. The Tenant’s Share stipulated in the Basic Lease Information has been calculated by dividing the Premises Rentable Area by the Building Rentable Area, then expressing such quotient as a percentage.

1.1.3 Term and Commencement. The Term of this Lease shall commence on the Commencement Date (as such Commencement Date may be adjusted pursuant to subsection 1.2.1 below or the Work Letter (herein so called) attached hereto as Exhibit C) and, unless sooner terminated pursuant to the terms of this Lease, shall expire, without notice to Tenant, on the Expiration Date (as such Expiration Date may be adjusted pursuant to subsection 1.2.1 below or the Work Letter). In the event the Commencement Date occurs on other than on the first day of the month, such partial month shall be added to the Term and the Expiration Date shall be the last day of the last month of the Term.

SECTION 1.2         COMPLETION AND DELIVERY OF PREMISES.

1.2.1 Construction of Tenant’s Improvements. The Tenant’s Improvements shall be constructed in the Premises as defined and provided in the Work Letter. Landlord will use reasonable efforts to achieve Substantial Completion (as defined in the Work Letter) of the Tenant’s Improvements by the Commencement Date provided in the Basic Lease Information. If Substantial Completion of the Tenant’s Improvements is not achieved by the Commencement Date stated in the Basic Lease Information for any reason other than Tenant Delays (as defined in the Work Letter), or force majeure (as defined in Section 15.13), Tenant’s sole and exclusive remedies shall be as follows:

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

1 

1.2.1.1 Tenant shall be entitled to an adjustment of the Commencement Date and the Expiration Date.

1.2.1.2 If Substantial Completion of the Tenant’s Improvements does not occur on or before September 1, 2018 (as such date may be extended on a day-for-day basis for any delay caused by Tenant Delays or force majeure), then Tenant shall be entitled to a Rent credit equal to one (1) day of Basic Annual Rent and Additional Rent for each day from and including September 1, 2018 until the date of Substantial Completion of the Tenant’s Improvements, which credit shall be applied against the next payments of Basic Annual Rent and Additional Rent due and owing by Tenant.

1.2.1.3 If Substantial Completion of the Tenant’s Improvements does not occur on or before January 1, 2019 (as such date may be extended on a day-for-day basis for any delay caused by Tenant Delays or force majeure), then Tenant shall have the right to terminate this Lease by the delivery of written notice to Landlord prior to the date of Substantial Completion of the Tenant’s Improvements, time being of the essence.

1.2.2 Acceptance of Premises Memorandum. Within ten (10) days after Substantial Completion of the Tenant’s Improvements, Landlord and Tenant shall execute the Acceptance of Premises Memorandum (herein so called) in the form attached hereto as Exhibit E; provided, however, that in the event Tenant occupies the Premises for the purpose of conducting its business therefrom and fails to timely execute an Acceptance of Premises Memorandum, the Premises shall be deemed to be Substantially Complete (as defined in the Work Letter) and suitable for the Permitted Use without Tenant’s execution of an Acceptance of Premises Memorandum.

1.2.3 Occupancy of the Premises. Tenant shall have no right to occupy any portion of the Premises prior to Substantial Completion. Notwithstanding the foregoing, Tenant and Tenant’s Contractors (as defined in the Work Letter) and consultants shall have the right to enter upon the Premises up to 14 days prior to the Commencement Date with Landlord’s prior written approval, such approval not to be unreasonably withheld or delayed, to perform installation of Tenant’s telephone systems, office equipment, trade fixtures and furnishings, provided Tenant and Tenant’s Contractors and consultants shall not interfere with the construction of the Tenant’s Improvements and further provided that such entry shall be subject to all terms and conditions of this Lease other than the obligation to pay Rent.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

2 

1.2.4 Temporary Space. Pursuant to that certain Sublease Agreement between Tenant, as subtenant, and Brightstar US, Inc., a Florida corporation, as sublandlord, dated effective as of January ___, 2015 (the “Sublease”), Tenant subleases and occupies approximately 5,078 rentable square feet of space known as Suite 450, located on the fourth (4^th) floor of the Building (the “Subleased Premises”). The Sublease expires by its terms on February 27, 2018 (the “Sublease Expiration Date”). In the event the Commencement Date has not occurred by the Sublease Expiration Date, then: (a) commencing on the Sublease Expiration Date, and continuing up to and including the Commencement Date, Landlord will make available to Tenant the Subleased Premises (referred to herein as the “Temporary Space”): (b) Tenant shall accept the Temporary Space in its “as is” condition as of the Sublease Expiration Date, (c) on the Commencement Date, Tenant will surrender the Temporary Space in the condition it was delivered, ordinary wear and tear excepted, and (d) Tenant’s use of the Temporary Space will be on all the terms and conditions of the Lease, except that Tenant shall not be obligated to pay Rent for the Temporary Space.

SECTION 1.3        REDELIVERY OF THE PREMISES. Upon the expiration or earlier termination of this Lease or upon the exercise by Landlord of its right to re-enter the Premises without terminating this Lease pursuant to subsection 13.2.2 below, Tenant shall immediately deliver to Landlord the Premises in a safe, clean, neat, sanitary and operational condition, ordinary wear and tear, damage by casualty and condemnation and repairs required to be made by Landlord hereunder excepted, together with all keys and parking and access cards. At Landlord’s option, (a) all fixtures installed in the Premises shall remain therein and become the property of Landlord, and (b) all voice and data cabling and wiring installed by Tenant shall be removed at Tenant’s expense.

SECTION 1.4        HOLDING OVER. In the event Tenant retains possession of the Premises after the expiration or earlier termination of this Lease, such possession shall constitute a tenancy at sufferance only, subject, however, to all of the terms, provisions, covenants and agreements on the part of Tenant hereunder. In such event, Tenant shall be subject to immediate eviction and removal and shall pay Landlord as rent for the period of such holdover an amount equal to one and one-half (1-1/2) times the Basic Annual Rent and Additional Rent (each as hereinafter defined) in effect immediately preceding expiration or termination, as applicable, which payments shall be due and payable on or before the first (1^st) day of each month during any holdover period. Tenant shall also pay any actual damages sustained by Landlord as a result of such holdover but Tenant shall not be liable for any indirect, speculative, punitive, consequential or exemplary damages. Notwithstanding the foregoing, in the event such holdover exceeds thirty (30) days, Tenant shall also pay any consequential damages sustained by Landlord as a result of such holdover but Tenant shall not be liable for punitive or exemplary damages.

SECTION 1.5         RENEWAL OPTION.

1.5.1 If, and only if, on the date Tenant notifies Landlord of its intention to renew the term of this Lease (as provided below) and on the Expiration Date, (i) Tenant is not in default under this Lease beyond any applicable notice and cure period, (ii) Tenant (or an Affiliate, as defined in Section 11.1) then occupies all of the Premises, and (iii) this Lease is in full force and effect, then Tenant, but not any assignee or subtenant of Tenant (except an Affiliate, as defined in Section 11.1), shall have and may exercise an option to renew (the “Renewal Option”) this Lease for one (1) additional term of five (5) years (the “Renewal Term”) upon substantially the same terms and conditions contained in this Lease with the exceptions that (x) this Lease shall not be further available for renewal and (y) the rental for the Renewal Term shall be based on “Fair Market Value” hereinafter defined. “Fair Market Value” is hereby defined to mean the then fair market value payable by new and renewing tenants having a credit standing substantially similar to that of Tenant, for premises in buildings of similar quality, size, utility and location as the Building, including any additions thereto, in buildings located within the Denver southeast suburban market and leased for a renewal term approximately equal to the Renewal Term. Fair Market Value will take into consideration adjustments for those then current leasing inducements, leasing concessions, tenant improvements allowances, and parking concessions.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

3 

1.5.2 If Tenant desires to renew this Lease, Tenant must notify Landlord in writing of its intention to renew on or before the date which is at least nine (9) full months but no more than twelve (12) full months prior to the Expiration Date. Landlord shall, within the next thirty (30) days, notify Tenant in writing of Landlord’s determination of Fair Market Value and Tenant shall, within the next thirty (30) days following receipt of Landlord’s determination of the Fair Market Value, notify Landlord in writing of Tenant’s acceptance or rejection of Landlord’s determination of the Fair Market Value or Tenant’s desire to withdraw its election to exercise the Renewal Option. If Tenant timely notifies Landlord of Tenant’s acceptance of Landlord’s determination of the Fair Market Value, this Lease shall be extended as provided herein and Landlord and Tenant shall, within thirty (30) days of such acceptance enter into an amendment to this Lease to reflect the extension of the term and changes in Rent in accordance with this paragraph. If Tenant fails to timely respond to notice of Landlord’s determination of the Fair Market Value, Tenant will be deemed to have withdrawn Tenant’s election to exercise the Renewal Option and this Lease will terminate as of the Expiration Date.

1.5.3 If Tenant rejects Landlord’s determination of the Fair Market Value for an extension of the Term, Tenant will deliver notice of such dispute, together with Tenant’s proposed Fair Market Value, to Landlord within thirty (30) days of Tenant’s receipt of Landlord’s determination. The parties will then attempt in good faith to agree upon the Fair Market Value. If they fail to agree within fifteen (15) days, then Landlord and Tenant will each appoint an arbitrator meeting the criteria below within seven (7) days after the expiration of such fifteen (15) day period. Each arbitrator shall (i) be a real estate broker licensed under the laws of the State of Colorado, (ii) have been actively and continuously engaged in leasing office space in multi-story office buildings in the southeast Denver metropolitan area for not less than the previous ten (10) years, and (iii) during the previous ten (10) years been involved in transactions which in the aggregate total more than one million (1,000,000) square feet of rentable area of office space in the Denver metropolitan area. The arbitrator(s) selected by Landlord and Tenant shall not be the real estate brokers or agents that have previously represented Landlord or Tenant. The two arbitrators thus appointed will, within seven (7) days of their mutual appointment, together appoint a third arbitrator meeting the foregoing criteria. Within ten (10) days after the last arbitrator is so appointed, Landlord and Tenant may submit to the arbitrators their respective determinations of Fair Market Value and any supporting information or analysis. The arbitrators will determine, by majority vote which of Landlord’s determination of the Fair Market Value or Tenant’s determination of the Fair Market Value is the closest to the Fair Market Value and such determination shall be the final Basic Rental Rate for the Renewal Term.

1.5.4 Landlord and Tenant will each pay all costs, fees and expenses of the respective arbitrator they appointed. Landlord and Tenant will also each pay, directly to the third arbitrator, one-half of all costs, fees and expenses of the third arbitrator.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

4 

SECTION 1.6         RIGHT OF FIRST OFFER TO LEASE. Subject to the terms of this Section 1.6 and the rights of existing tenants in the Building as of the Date of Lease, Landlord grants to Tenant a continuous right of first offer (“Right of First Offer”) to lease any additional space on the ninth (9^th) floor of the Building (“ROFO Space”) that is “Available for Direct Lease” (as defined below), at the proposed economic terms determined by Landlord in its good faith determination (the “Market Terms”).

1.6.1 Available for Direct Lease. “Available for Direct Lease” shall mean vacant or not subject to any unexercised right by a third party; provided that if Tenant desires such space, Landlord will offer such space as required to trigger and resolve such third party right.

1.6.2 Space. Within twenty (20) days after Landlord’s receipt of a written request from Tenant for additional space in the Building (“Request for Space”). Landlord will notify Tenant of the availability of any ROFO Space that is currently Available for Direct Lease and any ROFO Space that Landlord anticipates may become Available for Direct Lease within six (6) months following Landlord’s receipt of the Request for Space (the “Designated ROFO Space”) including the date of availability and the Market Terms for such Designated ROFO Space (“Landlord’s Offer Notice”). Any Designated ROFO Space that is not currently Available for Direct Lease when Landlord delivers Landlord’s Offer Notice shall remain subject to availability. Landlord’s Offer Notice will contain a term that is coterminous with the Term of this Lease provided that the minimum term offered shall be at least thirty-six (36) full calendar months. Within ten (10) days after receipt of Landlord’s Offer Notice, Tenant shall notify Landlord in writing of Tenant’s intention to lease such Designated ROFO Space, which such notice, if provided, shall state that Tenant either does or does not accept the Market Terms. If Tenant does not accept the Market Terms and Tenant and Landlord are unable after good faith negotiations to agree on the Market Terms for such Designated ROFO Space within thirty (30) days thereafter, Tenant shall be deemed to have declined to lease such Designated ROFO Space. Failure of Tenant to timely respond in writing within ten (10) days after receipt of Landlord’s Offer Notice shall be deemed a refusal to lease such Designated ROFO Space. If Tenant elects to lease such Designated ROFO Space, Landlord and Tenant shall execute an amendment to this Lease which shall add such Designated ROFO Space to the Premises on the same terms and conditions for the remainder of the Term, except for the applicable Market Terms which will be as set forth in Landlord’s Offer Notice. If, however, Tenant fails to execute an amendment to this Lease for such Designated ROFO Space within thirty (30) days after receipt of the amendment from Landlord, Tenant shall thereafter have no rights hereunder with regard to such Designated ROFO Space and Tenant’s Right of First Offer shall terminate.

1.6.3 No Default. As a condition precedent to Tenant’s exercise of its Right of First Offer, Tenant shall not be in default after notice and opportunity to cure, at the time of Tenant’s Request for Space, Landlord’s Offer Notice or the date at which such Designated ROFO Space is to be delivered to Tenant. Any assignment or subletting of this Lease, or the Premises, other than to an Affiliate (as defined in Section 11.1), shall terminate Tenant’s rights under this Section 1.6.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

5 

ARTICLE 2

RENT

SECTION 2.1         BASIC RENT. Tenant shall pay as annual rent for the Premises the product of the Premises Rentable Area times the annual rate per square foot of Premises Rentable Area shown in the Basic Lease Information (such product is herein called “Basic Annual Rent”). The Basic Annual Rent shall be payable in monthly installments equal to the applicable “Basic Monthly Rent” shown in the Basic Lease Information, and the monthly installments of Basic Annual Rent shall be due in advance, without demand, offset or deduction, commencing on the Commencement Date and continuing on the first (1^st) day of each calendar month thereafter unless otherwise provided herein. If the Commencement Date occurs on a day other than the first day of the calendar month, the monthly installment of Basic Annual Rent for such partial month shall be prorated. Upon execution of this Lease, Tenant shall pay to Landlord an amount equal to the initial monthly installment of Rent due hereunder and such amount shall be applied to the first installment of Rent due hereunder. All payments shall be payable to Landlord and sent to the payment address or routing number provided to Tenant by Landlord. All payments shall be in the form of check or wire transfer unless otherwise designated by Landlord, provided that payment by check shall not be deemed made if the check is not duly honored with good funds.

SECTION 2.2         ADDITIONAL RENT.

2.2.1 Definitions. For purposes of this Lease, the following definitions shall apply:

(a) “Additional Rent” shall mean the sum of: (i) Tenant’s Share multiplied by the amount by which Operating Expenses (hereinafter defined) for such calendar year exceed the Operating Expenses for the Operating Base Year, plus (ii) Tenant’s Share multiplied by the amount by which Taxes (hereinafter defined) for such calendar year exceed Taxes for the Tax Base, plus (iii) any applicable rental, excise, sales, transaction, business activity tax or levy, imposed upon or measured by the rental required to be paid by Tenant under this Lease during the calendar year in question (“Rental Tax”).

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

6 

(b) “Operating Expenses” shall mean all of the costs and expenses Landlord incurs, pays or becomes obligated to pay in connection with operating, maintaining, insuring and managing the Property for a particular calendar year or portion thereof, as reasonably determined by Landlord in accordance with sound accounting principles and all taxes thereon, including, without limitation, all costs of maintaining and managing the Building or any part thereof to be sustainable and conform with the USGBC’s LEED rating system (as the same may be modified or updated and as applicable to the Building) or such other sustainability or “green building” certification system as may be selected by Landlord from time to time (individually and collectively “Green Building Certification”). Landlord shall reasonably allocate Operating Expenses between the Tower and the Retail Area. Notwithstanding the foregoing, the term Operating Expenses shall not include:

(i) management fees payable to the property management company managing the Property (the “Property Manager”), which Property Manager may be an affiliate of Landlord, in excess of the amounts reasonably customary in the marketplace for office buildings comparable to the Building

(ii) legal services, if incurred:

(A) in connection with tenant defaults, lease negotiations or procuring new tenants, or

(B) as the result of a specific claim or action for which another tenant in the Building is obligated under its lease to pay Landlord’s legal fees; and

(iii) any capital expenditures except for:

(A) the cost of any improvements made to the Property by Landlord that are required under any governmental law or regulation which was not promulgated, or which was promulgated but was not applicable to the Building, at the time of the Commencement Date, amortized over such period as Landlord shall reasonably determine (but not less than the useful life of such improvement), together with an amount equal to interest on the unamortized balance thereof at a rate which is equal to the sum of two percent (2%) per annum plus the annual “Prime Rate” published by The Wall Street Journal in its listing of “Money Rates,” or if such rate is no longer published, a comparable rate of interest listed in a nationally circulated publication reasonably selected by Landlord, provided that such sum may in no event exceed the maximum interest allowed to be contracted for under applicable law (such sum is herein called the “Amortization Rate”);

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

7 

(B) the cost of any improvement made to the Common Areas or Service Corridors of the Property that is required under interpretations or regulations issued after the Commencement Date under, or amendments made after the Commencement Date to, the applicable provisions of state laws which apply to persons with disabilities and the provisions of the American With Disabilities Act of 1990, 42 U.S.C. §§12101-12213 (such statutes, interpretations and regulations are herein collectively called the “Disability Acts”). amortized over such period as Landlord shall reasonably determine (but not less than the useful life of such improvement), together with an amount equal to interest on the unamortized balance thereof at a rate which, on the date the improvement in question is fully completed, is equal to the Amortization Rate;

(C) the cost of any other equipment installed in, or capital improvement made to, the Building to the extent such equipment reduces Operating Expenses, increases energy efficiency or decreases the Building’s use of natural resources or eliminates waste of the same, amortized over such period as is reasonably determined by Landlord (but not less than the useful life of such improvement), together with an amount equal to interest on the unamortized balance thereof at a rate, which on the date the device or equipment in question is fully installed, is equal to the Amortization Rate;

(D) the cost of any improvements to the Building or equipment installed in or on the Building in connection with maintaining Green Building Certification, amortized over such period as is reasonably determined by Landlord (but not less than the useful life of such equipment), together with an amount equal to interest on the unamortized balance thereof at a rate, which on the date the improvement is completed or the equipment installed is equal to the Amortization Rate;

(iv) any costs or expenses associated with the leasing, marketing, solicitation, negotiation and execution of leases in the Building including without limitation promotional and advertising expenses, commissions, finders fees and referral fees, accounting, legal and other professional fees and expenses relating to the negotiation and preparation of any lease;

(v) any costs or expenses originally incurred in connection with the initial design and construction of the Building;

(vi) any portion of the wages, salaries, benefits, reimbursable expenses and taxes (or allocations thereof) paid to full and part time personnel of Landlord or Property Manager (collectively, “Compensation Expenses”) to the extent any employee’s time is devoted to efforts unrelated to the maintenance and operation of the Building, provided that in no event shall Compensation Expenses of Property Manager which are included in Operating Expenses exceed the then prevailing market compensation expense for a full-time building manager in comparable office buildings;

(vii) any costs or expenses incurred in connection with upgrading the Building to comply with life safety codes, ordinances, statutes or other laws in effect prior to the Commencement Date or to comply with a tenant’s separate specific request;

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

8 

(viii) any costs or expenses related to monitoring, testing, removal, cleaning, abatement or remediation of any Hazardous or Toxic Materials (hereinafter defined) in the Building or on the Land;

(ix) any costs of any service or items sold or provided to tenants or other occupants for which Landlord or Landlord’s managing agent has been or is entitled to be reimbursed by such tenants or other occupants for such service;

(x) any costs or expenses in connection with services or other benefits which are provided to another tenant or occupant of the Building and which do not benefit Tenant;

(xi) any costs for the purchase of sculptures, paintings, fountains or other objects of art or the display of such items;

(xii) any increase in Landlord’s insurance premiums caused by a specific use of another tenant;

(xiii) any Operating Expense covered by insurance or condemnation proceeds or reimbursed pursuant to warranty or service contracts;

(xiv) any costs or expenses incurred in connection with the renovation of space or construction of improvements for another tenant of the Building;

(xv) overhead or profits paid to subsidiaries or affiliates of Landlord or to any party as a result of a non-competitive selection process, for management of other services to the Building, or for supplies or other materials, to the extent that the costs of such supplies or materials exceed the costs that would have been paid had the services, supplies or materials been provided by parties unaffiliated with the Landlord on a competitive basis and are consistent with those incurred by similar buildings in the same metropolitan area in which the Building is located;

(xvi) any fines, costs, penalties or interest resulting from Landlord’s violation of any law, rule or regulation or from the gross negligence, willful misconduct or deliberate act or omission of the Landlord or its agents, contractors, or employees;

(xvii) any costs, fees, dues, contributions or similar political, charitable expenses; or

(xix) costs for capital reserves of any kind.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

9 

(c) “Taxes” shall mean (i) all real estate taxes and other taxes or assessments which are levied with respect to the Property or any portion thereof for each calendar year (but excluding any penalties thereon), (ii) any tax, surcharge or assessment, however denominated, including any excise, sales, capital stock, assets, franchise, transaction, business activity, privilege or other tax (other than any Rental Tax), which is imposed upon Landlord or the Property and which is attributable to rent or other revenue derived from the Property or which is imposed as a supplement to or in lieu of real estate taxes or as a means of raising government revenue to replace revenue lost because of a reduction in real estate taxes, and (iii) the costs and expenses of a consultant, if any, or of contesting the validity or amount of any tax, surcharge or assessment described in clause (i) or (ii) above. “Taxes” shall not include gross receipts taxes, personal and corporate income taxes, inheritance and estate taxes, other business taxes, franchise, gift, transfer taxes, business license fees or taxes, or and any penalties or interest due to Landlord’s failure to pay taxes when due.

2.2.2 Gross-Up. If the Building is not 95% occupied during any calendar year or partial calendar year, including the Operating Base Year, or if Landlord is not supplying services to 95% of the total square footage of Building Rentable Area at any time during a calendar year or partial calendar year, including the Operating Base Year, Operating Expenses shall be determined as if the Building had been 95% occupied and Landlord had been supplying services to 95% of the square footage of Building Rentable Area during that calendar year; provided, however, that Landlord agrees that Landlord will not collect or be entitled to collect Operating Expenses from all of its tenants of the Building in an amount which is in excess of one hundred percent (100%) of the Operating Expenses actually paid or incurred by Landlord in connection with the operation of the Property. The extrapolation of Operating Expenses under this subsection 2.2.2 shall be performed by Landlord by adjusting the cost of those components of Operating Expenses that are impacted by changes in the occupancy of the Building, including, without limitation, electricity, janitorial services and management fees.

2.2.3 Payment Obligation. In addition to the Basic Rent specified in this Lease, Tenant shall pay to Landlord the Additional Rent in monthly installments as hereinafter provided. Landlord shall use reasonable efforts to provide Tenant with written notice of Tenant’s estimated Additional Rent for the next calendar year and the amount of the monthly installment of Additional Rent due for such year by December 15 of each calendar year or as soon thereafter as is reasonably possible. Landlord shall have the right to increase Tenant’s estimated Additional Rent during any calendar year if Landlord reasonably believes Operating Expenses or Taxes have increased (or are likely to increase) during such year. Beginning on the Commencement Date and continuing on the first day of each month thereafter, Tenant shall pay to Landlord the applicable monthly installment of Additional Rent, without demand, offset or deduction, provided, however, if the applicable installment covers a partial month, then such installment shall be prorated on a daily basis.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

10 

(a) This subparagraph (a) applies to each calendar year during which Additional Rent is owing except for the calendar year in which the Expiration Date or termination date of this Lease occurs. Within ninety (90) days after the end of each calendar year or as soon thereafter as is reasonably possible, Landlord shall prepare and deliver to Tenant a statement showing Tenant’s actual Additional Rent for the applicable calendar year. If Tenant’s total monthly payments of estimated Additional Rent for the applicable year are less than Tenant’s actual Additional Rent, then Tenant shall pay to Landlord the amount of such underpayment. If Tenant’s total monthly payments of estimated Additional Rent for the applicable year are more than Tenant’s actual Additional Rent, then Landlord shall pay such amount to Tenant or, at Landlord’s option, credit against the next Additional Rent payment or payments due from Tenant the amount of such overpayment. This provision shall survive the expiration or earlier termination of this Lease with respect to the calendar year in which the Expiration Date or termination date occurs.

(b) Within ninety (90) days after the Expiration Date or termination date of this Lease or as soon thereafter as is reasonably possible, Landlord shall prepare and deliver to Tenant a statement (the “Final Additional Rent Statement”) showing Tenant’s actual Additional Rent for the period beginning January 1 of the year in which the Expiration Date or termination date occurs and ending on the Expiration Date or termination date (such period is herein called the “Final Additional Rent Period”). Landlord shall have the right to estimate the actual Operating Expenses and Additional Rent allocable to the Final Additional Rent Period which are not determinable within such ninety (90) day period. If the aggregate of Tenant’s monthly payments of estimated Additional Rent for the Final Additional Rent Period are less than Tenant’s actual Additional Rent for such period as set forth in the Final Additional Rent Statement, then Tenant shall pay to Landlord the amount of such underpayment. If Tenant’s monthly payments of estimated Additional Rent for the Final Additional Rent Period are more than Tenant’s actual Additional Rent for such period as set forth in the Final Additional Rent Statement, Landlord shall pay to Tenant the amount of such excess payments, less any amounts then owed to Landlord.

(c) Landlord will cause adequate books and records for Operating Expenses and Taxes and other amounts relevant to Tenant’s obligations under this Lease to be maintained in accordance with the provisions set forth herein. Unless Tenant takes written exception to any item within sixty (60) days after delivery to Tenant of an annual statement or a statement delivered for the Final Additional Rent Period, such statement shall be considered as final and accepted by Tenant. Within ten (10) business days following a request from Tenant, Landlord shall furnish written explanations to Tenant in reasonable detail for any computation made under this Lease. If Tenant questions such computation following receipt of such explanation, Tenant, within ten (10) business days following receipt of such explanation, shall give notice thereof to Landlord, and Landlord and Tenant shall, within twenty (20) business days thereafter, discuss, in good faith, such computation.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

11

(d) In the event the amount of Tenant’s Share of Operating Expenses increases by five percent (5%) or more over the prior year, Tenant shall have the right to perform, at Tenant’s expense, an audit of Landlord’s books and records to verify Landlord’s calculation of the actual Operating Expenses, provided that such audit shall be conducted by an unrelated, third party certified public accountant who is not a tenant in the Building, reasonably acceptable to Landlord, and not compensated on a contingent fee basis. Any such audit shall be conducted, if at all, (i) no later than one hundred twenty (120) days after delivery to Tenant of the annual statement in question, and within sixty (60) days after Landlord’s receipt of prior written notice that Tenant has decided to perform an audit, (ii) during Landlord’s normal business hours, (iii) at the place where Landlord maintains it records, and (iv) on a confidential basis. The auditor’s report reflecting the results of such audit shall properly apply the definition of “Operating Expenses” set forth in the Lease and include a certification that it was prepared in accordance with such definition of Operating Expenses. Prior to finalizing its report, Tenant’s auditor shall present its findings in draft form to Landlord for review. Landlord may discuss the findings with the auditor and offer comments, explanations and suggested changes to the report as Landlord believes appropriate. The final report of Tenant’s auditor and the determinations set forth therein (“Tenant’s Auditor’s Report”), if prepared in accordance with this subparagraph and if updated as necessary to properly incorporate Landlord’s comments, explanations and suggested changes, shall be binding on Landlord and Tenant. If Tenant’s Auditor’s Report reflects an overcharge in the total actual Operating Expenses of more than five percent (5%) in the aggregate for such audited calendar year, then Landlord shall reimburse Tenant for all actual reasonable out-of-pocket third-party costs (excluding travel costs) incurred by Tenant in connection with Tenant’s Auditor’s Report. If Tenant’s Auditor’s Report reflects that the actual Operating Expenses were overcharged or undercharged in the audited calendar year, Tenant shall, within thirty (30) days after receipt of such report, pay to Landlord the amount of any underpayment or, if applicable, Landlord shall pay to Tenant the amount of any overpayment.

SECTION 2.3      RENT DEFINED AND NO OFFSETS. Basic Annual Rent, Additional Rent and all other sums (whether or not expressly designated as rent) required to be paid to Landlord by Tenant under this Lease (including, without limitation, any sums payable to Landlord under any addendum, exhibit or schedule attached hereto) shall constitute rent and are sometimes collectively referred to as “Rent”. Each payment of Rent shall be paid by Tenant when due, without prior demand therefor and without deduction or setoff.

SECTION 2.4      LATE CHARGES; INTEREST RATE. If any Rent under this Lease shall not be paid within five (5) days after the date such payment is due, a “Late Charge” of ten percent (10%) of the payment then overdue may be charged by Landlord to defray Landlord’s administrative expense incident to the handling of such overdue payments. Furthermore, any amount due from Tenant to Landlord which is not paid within ten (10) days after the date due shall bear interest at the lower of (i) eighteen percent (18%) per annum or (ii) the highest rate from time to time allowed by applicable law, from the date such payment is due until paid. Notwithstanding the foregoing, Landlord shall waive the Late Charge and interest for late payment of Rent, no more than one (1) time in any calendar year if the late payment is received within five (5) days after notice to Tenant from Landlord.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

12

ARTICLE 3

SECURITY DEPOSIT

If a Security Deposit is specified in the Basic Lease Information, Tenant will pay Landlord on the Date of Lease such Security Deposit as security for the performance of the terms hereof by Tenant. Tenant shall not be entitled to interest thereon and Landlord may commingle such Security Deposit with any other funds of Landlord. The Security Deposit shall not be considered an advance payment of rental or a measure of Landlord’s damages in case of default by Tenant. If a default by Tenant shall occur under this Lease, Landlord may, but shall not be required to, from time to time, without prejudice to any other remedy, use, apply or retain all or any part of this Security Deposit for the payment of any Rent or any other sum in default or to compensate Landlord for any other loss or damage which Landlord may suffer by reason of Tenant’s default, including, without limitation, costs and attorneys’ fees incurred by Landlord to recover possession of the Premises. If Landlord shall use, apply or retain all or any part of the Security Deposit as provided for above, Tenant shall restore the Security Deposit to the amount set forth in the Basic Lease Information within thirty (30) days after receipt of notice from Landlord. So long as Tenant (a) is not in default beyond applicable notice and cure period at the end of the Term, (b) surrenders the Premises in accordance with the terms and provisions of this Lease, and (c) has performed an end of Term walk through with Landlord, the Security Deposit or any balance of the Security Deposit shall be returned to Tenant within thirty (30) days after the Expiration Date.

ARTICLE 4

OCCUPANCY AND USE

SECTION 4.1       USE OF PREMISES.

4.1.1 General. The Premises shall, subject to the remaining provisions of this Section, be used solely for the Permitted Use. Without limiting the foregoing, Tenant shall comply with all laws, statutes, ordinances, orders, permits and regulations affecting Tenant’s use and occupancy of the Premises. Tenant will not do or permit anything which may disturb the quiet enjoyment of any other tenant of the Property. Tenant shall not permit the occupancy of the Premises to exceed a ratio of more than one (1) person per 250 square feet of Premises Rentable Area. Notwithstanding the foregoing, Landlord acknowledges that from time to time Tenant will have in excess of one person per 250 square feet of Premises Rentable Area due to meetings, conferences, training and similar circumstances, and Landlord agrees that such occasional use of the Premises exceeding the occupancy ratio shall not constitute a default under this Lease.

4.1.2 Landlord’s Compliance Obligation. Landlord shall comply with all laws, statutes, ordinances, orders and regulations relating to the Property (exclusive, however, of those with which Tenant is obligated to comply by reason of subsection 4.1.1) as of the Date of Lease. Landlord shall also be responsible for causing the Common Areas to be in compliance with the Disability Acts.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

13

4.1.3 Hazardous and Toxic Materials.

(a) For purposes of this Lease, hazardous or toxic materials shall mean asbestos containing materials and all other materials, substances, wastes and chemicals classified as hazardous or toxic substances, materials, wastes or chemicals (individually and collectively, “Hazardous or Toxic Materials”) under then-current applicable governmental laws, rules or regulations or that are subject to any right-to-know laws or requirements (individually and collectively, “Environmental Laws”).

(b) Tenant shall not knowingly incorporate into, or use or otherwise place or dispose of at the Premises or any other portion of the Property, any Hazardous or Toxic Materials, except for use and storage of cleaning and office supplies used in the ordinary course of Tenant’s business and then only if (i) such materials are in small quantities, properly labeled and contained, and (ii) such materials are handled and disposed of in accordance with the highest accepted industry standards for safety, storage, use and disposal. If Tenant or its employees, agents or contractors shall ever violate the provisions of paragraph (b) of this subsection 4.1.3 or otherwise contaminate the Premises or the Property, then, at Landlord’s election, either Tenant or Landlord shall clean, remove and dispose of the material causing the violation, in compliance with all applicable governmental standards, laws, rules and regulations and then prevalent industry practice and standards (the “Remediation Work”). In the event Tenant performs such work, Tenant shall repair any damage to the Premises or the Property (collectively with the Remediation Work, “Tenant’s Environmental Corrective Work”) in such period of time as may be reasonable under the circumstances after written notice by Landlord. In the event Landlord performs the Tenant’s Environmental Corrective Work, within thirty (30) days after receiving an invoice, Tenant shall reimburse Landlord for the costs incurred by Landlord to perform such Tenant’s Environmental Corrective Work. Tenant’s obligations under this subsection 4.1.3(b) shall survive the expiration or earlier termination of this Lease.

(c) Landlord has no current actual knowledge of the presence of, and Landlord shall not knowingly dispose of at the Premises or any other portion of the Property, any Hazardous or Toxic Materials that would materially and adversely affect Tenant’s access, use or occupancy of the Premises or otherwise pose any material risk or material threat to the health, safety or welfare of Tenant or any of its employees or guests.

SECTION 4.2      RULES AND REGULATIONS. Tenant will comply with all rules and regulations applying to tenants in the Building and the Garage (the “Rules and Regulations”) as may be adopted and uniformly applied from time to time by Landlord for (a) the management, safety, care and cleanliness of, and the preservation of good order and protection of property in, the Premises and the Building and at the Property, (b) the increase in energy efficiency of the Building and the Property, (c) the decrease in the use of natural resources in the Building and the Property or the waste of the same, (d) recycling of reusable items, and (e) such other goals which result in the decrease in the carbon footprint of the Building and the Property. Landlord reserves the right, without approval from Tenant, to rescind, supplement and amend any Rules and Regulations and to waive any Rules and Regulations with respect to any tenant or tenants so long as any change in the Rules and Regulations does not diminish the rights granted to Tenant in this Lease. The Rules and Regulations in effect on the date hereof are attached hereto as Exhibit D and included in Exhibit F to this Lease. All changes and amendments to the Rules and Regulations sent by Landlord to Tenant in writing and conforming to the foregoing standards shall be carried out and observed by Tenant. In the event of any conflict between the Rules and Regulations and the provisions of this Lease, the provisions of this Lease shall prevail. Landlord hereby reserves all rights necessary to implement and enforce the Rules and Regulations.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

14

SECTION 4.3      ACCESS. Without being deemed guilty of an eviction of Tenant and without abatement of Rent, Landlord and its authorized agents shall have the right to enter the Premises upon reasonable notice to Tenant, which notice may be oral, to inspect the Premises, to show the Premises to prospective lenders or purchasers, and to fulfill Landlord’s obligations or exercise its rights (including without limitation Landlord’s Reserved Right [as hereinafter defined]) under this Lease and, upon Landlord’s receipt of a notice of non-renewal from Tenant and in any event during the last six (6) months of the Term, to show the Premises to prospective tenants. Landlord will use commercially reasonable efforts to provide Tenant with at least twenty-four (24) hours’ prior notice of any such entry, except in the event of an emergency or in connection with providing janitorial services to the Premises, in which case no prior notice shall be required. Landlord shall have the right to use any and all means which Landlord may deem proper to enter the Premises in an emergency. Tenant hereby waives any claim for damages for any injury or inconvenience to or interference with Tenant’s business, any loss of occupancy or quiet enjoyment of the Premises and any other loss occasioned thereby. Landlord agrees to exercise reasonable, good faith efforts (i) to prosecute completion of any work within the Premises diligently, (ii) to minimize interference with Tenant’s use, access, occupancy and quiet enjoyment of the Premises including, without limitation, performing noisy and/or materially disruptive work such as structural work, coring, drilling and chipping after Normal Business Hours to the extent reasonably practicable in Landlord’s sole, but reasonable discretion, and (Hi) to protect Tenant’s property located in the Premises from damage. Landlord shall at all times have and retain a key with which to unlock the doors to and within the Premises, excluding Tenant’s furniture, file cabinets, storage lockers, vaults and safes.

SECTION 4.4      QUIET POSSESSION. Provided that no default beyond any applicable cure period provided for herein occurs and is continuing, Tenant shall have the quiet possession of the Premises for the entire Term hereof, subject to all of the provisions of this Lease.

SECTION 4.5     PERMITS. Landlord shall obtain the certificate of occupancy (or its equivalent), if any, required for Tenant’s occupancy of the Premises following construction of the Tenant’s Improvements. If any additional governmental license or permit shall be required for the proper and lawful conduct of Tenant’s business in the Premises or any part thereof, Tenant, at its expense, shall procure and thereafter maintain such license or permit. Additionally, if any subsequent alteration or improvement is made to the Premises by Tenant, Tenant shall, at its expense, take all actions to procure any such modification or amendment or additional permit.

ARTICLE 5

UTILITIES AND SERVICES

SECTION 5.1      SERVICES TO BE PROVIDED.

Landlord agrees to furnish to the Premises the utilities and services described in subsections 5.1.1 through 5.1.7 below. As used in this Lease, “Normal Business Hours” shall mean 6:00 A.M. to 6:00 P.M. Monday through Friday, and 7:00 A.M. to 1:00 P.M. Saturday, except for New Year’s Day, Memorial Day, July 4, Labor Day, Thanksgiving Day and Christmas Day and any other national holiday observed by most businesses in the same market area as the Building.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

15

5.1.1 Elevator Service. Landlord shall provide automatic elevator facilities during Normal Business Hours, and shall have at least one (1) elevator available for use at all other times, except during emergencies.

5.1.2 Heat and Air Conditioning. During Normal Business Hours, Landlord shall ventilate the Premises and furnish heat or air conditioning, at such temperatures and in such amounts as is customary in buildings of comparable size and quality to, and in the general vicinity of, the Building, with such adjustments as may be reasonably necessary for the comfortable occupancy of the Premises, subject to events of force majeure and any governmental requirements, ordinances, rules, regulations, guidelines or standards relating to, among other things, energy conservation. Upon reasonable advance request from Tenant, Landlord shall make available to the Premises, at Tenant’s expense, heat or air conditioning during periods in addition to Normal Business Hours. Tenant shall submit to Landlord a list of all personnel who are authorized to make such requests. The current minimum charge and the hourly rate for the use of after-hours heat or air conditioning is $50.00 per hour with a two (2) hour minimum, subject to adjustment from time to time by Landlord, provided, however that the total charge for such usage shall not exceed the actual cost to Landlord, inclusive of a reasonable administrative fee.

5.1.3 Electricity.

(a) Landlord shall furnish electrical power for heating and air-conditioning services as described in subsection 5.1.2 and for lighting, including Tenant’s lighting and office equipment as described herein. Landlord shall use commercially reasonable efforts to furnish such electrical power in a cost-effective and environmentally responsible manner using environmentally responsible equipment, fixtures and supplies. Landlord shall furnish to the Premises electrical power for Tenant’s lighting in compliance with the governing energy code. Additionally, Landlord shall furnish 120 volt power to the Premises for electrical outlets to operate Tenant’s standard office equipment and the equipment to be installed in the Premises pursuant to the Tenant’s Improvements (as defined in the Work Letter). Any additional electrical power required above 120 volts will be considered excess electrical consumption (“Excess Electrical Consumption”) and will be separately measured by submeters (“Submeters”) at Tenant’s expense (which such expense shall not be duplicative of any Operating Expenses paid for by Tenant). The actual cost of such electrical usage as measured by such Submeters (“Excess Electrical Cost”, as hereinafter defined) shall be paid by Tenant. The present rate for lighting outside of Normal Business Hours is $5.00 per hour, subject to adjustment from time to time by Landlord. In the event Tenant regularly conducts Tenant’s business outside of Normal Business Hours, Tenant shall also pay for the cost of electricity regularly consumed at the Premises for lighting used in the Premises outside of Normal Business Hours, and the cost shall be considered Excess Electrical Consumption. Landlord agrees that Tenant may operate dedicated data/server rooms within the Premises and that all electrical usage of such rooms, including supplemental air, will be separately submetered at Tenant’s expense and the electrical usage, as measured by such Submeters shall be paid by Tenant as Excess Electrical Cost. Furthermore, in the event more than one third (1/3) of the Premises Rentable Area is at any time improved with cubicles, the Tenant’s Improvements shall include the installation of a transformer and an electrical panel.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

16

(b) Landlord may, from time to time, engage a reputable consultant to conduct a survey of electrical usage within the Premises (a “Consumption Survey”) or install one or more submeters (“Submeters”) to measure electrical usage within the Premises or a particular floor of the Premises. If the Consumption Survey or Submeters reflect Excess Electrical Consumption, then (i) Tenant shall be responsible for the costs of the Consumption Survey and Submeters, (ii) Tenant shall pay to Landlord, as Rent, the product of (A) the kilowatts of Excess Electrical Consumption during the period in question times (B) the cost per kilowatt of electricity charged to Landlord by the public utility for electricity consumed at the Property during such period (such product is herein called the “Excess Electrical Cost”), and (iii) Landlord shall have the right to install, at Tenant’s expense, permanent Submeters to measure the electrical consumption within the Premises. If Landlord installs permanent Submeters as permitted hereunder, Tenant shall, from time to time thereafter within twenty (20) days after receiving an invoice from Landlord, pay to Landlord any Excess Electrical Cost reflected by such Submeters and all costs incurred by Landlord to maintain, repair and read the Submeters.

5.1.4 Water. Landlord shall furnish cold water for drinking and cleaning and hot and cold water for lavatory and kitchen (if applicable) purposes only, at the points of supply generally provided in the Building.

5.1.5 Janitorial Services. Landlord shall provide janitorial services to the occupied portion of the Premises comparable to that provided in other offices of similar size and quality to, and in the general vicinity of, the Building.

5.1.6 Common Areas. Landlord shall perform routine maintenance in the Common Areas.

5.1.7 Bulbs and Ballasts. As necessary, Landlord shall provide bulbs and ballasts for the lighting fixtures in the Premises which are standard for the Building. Landlord shall also provide bulbs and ballasts for fixtures which are not standard for the Building (“Non-Building Standard”), provided Tenant shall pay Landlord’s standard charge therefor. All amounts due under this Section for such Non-Building Standard bulbs and ballasts shall be paid to Landlord within thirty (30) days after receipt of an invoice therefor.

5.1.8 Access. Landlord shall provide access to the Premises 24 hours a day 7 days a week; provided access after Normal Business Hours Monday through Friday shall be limited to card-key access.

5.1.9 Security. The on-site manned security shall be during to be determined hours (but at least during Normal Business Hours of the Building). In addition, the Building will have a surveillance camera system monitored during to be determined hours and will cover all entry and exit points of the Building, including during those hours when manned security is not present. The Building will have an access control system for door hardware to restrict access to the Building after hours. Elevators will be equipped with access control card readers to restrict entry after hours and individual floors shall be isolated.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

17

SECTION 5.2      ADDITIONAL SERVICES. In addition to the charges set forth in subsections 5.1.2 and 5.1.3(b), Landlord may impose a reasonable charge for any other services provided by Landlord by reason of any use of the services at any time other than Normal Business Hours or beyond the levels or quantities that Landlord agrees herein to furnish.

SECTION 5.3       SERVICE INTERRUPTION.

5.3.1 Service Interruption/Waiver of Landlord Liability. Landlord shall not be liable for and, except as provided in subsection 5.3.2 below, Tenant shall not be entitled to any abatement or reduction of Rent by reason of, interruption of any of the foregoing services when such interruption is caused by circumstances beyond Landlord’s reasonable control, nor shall any such interruption be construed as an eviction (constructive or actual) of Tenant or as a breach of the implied warranty of suitability, or relieve Tenant from the obligation to perform any covenant or agreement herein and in no event shall Landlord be liable for damage to persons or property (including, without limitation, business interruption), or be in default hereunder, as a result of any such interruption or results or effects thereof.

5.3.2 Limited Right to Abatement of Rent. If any portion of the Premises becomes unfit for occupancy because of any interruption of the services required under subsections 5.1.1 through 5.1.4 above as a result of Landlord’s act or omission, and provided such failure is not caused by Tenant, Tenant’s Contractors (as defined in Exhibit C or any of their respective agents or employees, and if the Premises remain unfit for occupancy and are actually unoccupied because of such failure for any period (other than a reconstruction period conducted pursuant to Section 7.1 or Article 8 below) exceeding five (5) consecutive business days after written notice by Tenant to Landlord, Tenant shall be entitled to a fair partial abatement of Basic Annual Rent and Additional Rent for any such portion of the Premises from the expiration of such five (5) business day period until such portion is again fit for occupancy.

5.3.3 Termination Right. In the event fifty percent (50%) or more of the Premises becomes unfit for occupancy because of any interruption of the services required under subsections 5.1.1 through 5.1.4 above as a result of Landlord’s act or omission, and provided such failure is not caused by Tenant, and such interruption continues for more than thirty (30) consecutive days in any one calendar year (other than a reconstruction period conducted pursuant to Section 7.1 or Article 8 below), Tenant shall, as its sole and exclusive remedy, have the right to terminate this Lease by delivering written notice thereof to Landlord after such 30-consecutive day period but prior to the resumption of the interrupted services.

SECTION 5.4      TELECOMMUNICATION EQUIPMENT. In the event that Tenant wishes at any time to utilize the services of a telephone or telecommunications provider whose equipment is not then servicing the Building, no such provider shall be permitted to install its lines or other equipment within the Building without first securing the prior written approval of Landlord.

ARTICLE 6

MAINTENANCE, REPAIRS, ALTERATIONS AND IMPROVEMENTS

SECTION 6.1      LANDLORD’S OBLIGATION TO MAINTAIN AND REPAIR. Landlord shall, at its sole cost and expense (subject to including the costs thereof in Operating Expenses), maintain the foundation, floor and ceiling slabs, roof (including gutters, downspouts, and canopies), curtain wall, exterior glass and mullions, columns, beams, shafts (including elevator shafts) of the Building, including the Premises (collectively the “Building Structure”), all Common Areas, Service Corridors and Service Areas (all as defined in Section 15.5). and core Building mechanical, electrical, life safety, plumbing, sprinkler systems and core HVAC systems (collectively, the “Building Systems”) and shall operate the Building in a manner comparable to similar office buildings in the area. Notwithstanding anything in this Lease to the contrary, Tenant shall be neither required nor permitted to make any repair to, modification of, or addition to the Building Structure or the Building Systems except to the extent required (and after prior written approval by Landlord using contractors approved in writing by Landlord) because of Tenant’s use of all or a portion of the Premises for other than normal and customary business office operations. Except for the elements of the Building described herein, Landlord shall not be required to maintain or repair any portion of the Premises.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

18

SECTION 6.2       TENANT’S OBLIGATION TO MAINTAIN AND REPAIR.

6.2.1 Tenant’s Obligation. Tenant shall, at Tenant’s sole cost and expense, (i) maintain and keep the Premises (including, but not limited to, all fixtures, walls, ceilings, floors, doors, windows [except replacement of exterior plate glass], appliances, supplemental HVAC units, data and phone cables, satellite dishes, antennas and any and all other equipment which is a part of or serves the Premises) in good repair and condition, ordinary wear and tear excepted, and (ii) repair or replace any damage or injury done to the Building or any other part of the Property caused by Tenant, Tenant’s agents, employees, licensees, invitees or visitors. All repairs and replacements performed by or on behalf of Tenant shall be performed diligently, in a good and workmanlike manner and in accordance with applicable governmental laws, rules, and regulations.

6.2.2 Rights of Landlord. In the event Tenant fails, in the reasonable judgment of Landlord, to maintain and repair the Premises in good order, condition and repair, Landlord shall have the right to perform such maintenance, repairs and replacements, and Tenant shall pay Landlord, as additional Rent, the cost thereof plus a management fee of ten percent (10%) of such cost.

SECTION 6.3       IMPROVEMENTS AND ALTERATIONS.

6.3.1 Landlord’s Construction Obligations. Landlord’s sole construction obligations under this Lease are as set forth in Exhibit C attached hereto.

6.3.2 Alteration of Building. Landlord shall have the right to repair, change, redecorate, alter, improve, modify, renovate, enclose or make additions to any part of the Property (including, without limitation, structural elements and load bearing elements within the Premises and to enclose and change the arrangement and location of driveways or parking areas or landscaping or other Common Areas of the Property), all without being held guilty of an actual or constructive eviction of Tenant or breach of the implied warranty of suitability and without an abatement of Rent (the “Reserved Right”). When exercising the Reserved Right, Landlord will interfere with Tenant’s use and occupancy of the Premises as little as is reasonably practicable. Landlord shall not obstruct or interrupt Tenant’s access to the Premises without providing alternative access during Normal Business Hours.

6.3.3 Alterations and Installations by Tenant. Tenant shall not, without the prior written consent of Landlord, not to be unreasonably withheld, make any alterations to, or install any equipment or machinery of any kind (other than office equipment and unattached personal property) in the Premises (all such alterations are herein collectively referred to as “Installations”). Notwithstanding the foregoing, Tenant shall be able to make non-structural, internal alterations to the Premises which do not involve the mechanical, electrical or plumbing systems of the Building and cost less than $10,000 in the aggregate without the prior consent of Landlord so long as Tenant gives Landlord prior written notice of its intent to make such alterations and the dates when such work is to be done and Tenant performs such work in compliance with all of the Building rules and regulations and insurance requirements related to construction. All work performed by Tenant or its contractor relating to the Installations shall be performed diligently and in a good and workmanlike manner, and shall conform to applicable governmental laws, rules and regulations, Landlord’s insurance requirements and all rules for performing work in the Building. Upon completion of the Installations, Tenant shall deliver to Landlord “as built” plans in a format acceptable to Landlord. If Landlord performs any Installations after completion of the Tenant’s Improvements (as defined in the Work Letter), Tenant shall pay Landlord, as Rent, the cost thereof plus a construction management fee of five percent (5%) of such cost; provided, however, the Construction Management Fee (as defined in the Work Letter) shall apply to the initial Tenant’s Improvements. All Installations that constitute improvements constructed within the Premises shall be surrendered with the Premises at the expiration or earlier termination of this Lease, unless prior to construction of the Installations and as a condition of Landlord’s approval thereof, Landlord requires that some or all of the Installations be removed by Tenant at Tenant’s sole cost and expense upon termination or expiration of this Lease. TENANT SHALL DEFEND, INDEMNIFY AND HOLD HARMLESS LANDLORD FROM AND AGAINST ANY AND ALL COSTS, EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES), DEMANDS, CLAIMS, CAUSES OF ACTION AND LIENS ARISING FROM OR IN CONNECTION WITH ANY INSTALLATIONS PERFORMED BY OR ON BEHALF OF TENANT BY TENANT’S CONTRACTORS. Landlord will have the right to periodically inspect the work on the Premises and may require changes in the method or quality of the work if necessary to cause the work to comply with the requirements of this Lease.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

19

ARTICLE 7

INSURANCE AND CASUALTY

SECTION 7.1 TOTAL OR PARTIAL DESTRUCTION OF THE BUILDING, THE GARAGE OR THE PREMISES.

(a) Total Destruction. If the Building or the Garage should be totally destroyed by fire or other casualty or if either the Building, the Garage (or any portion thereof) or the Premises should be so damaged that rebuilding or repairs cannot be completed, in Landlord’s reasonable opinion, within one hundred eighty (180) days after commencement of repairs to the Building, the Garage or the Premises, as applicable, Landlord shall within thirty (30) days after the casualty provide written notice of its opinion to Tenant, and either Landlord or Tenant may, at its option, terminate this Lease, in which event no further Basic Annual Rent and Additional Rent shall be payable to Landlord during the unexpired portion of this Lease effective as of the date of such damage. Landlord shall exercise the termination right pursuant to the preceding sentence, if at all, by delivering written notice of termination to Tenant within ten (10) days after determining that the repairs cannot be completed within one hundred eighty (180) days. Tenant shall exercise its termination right pursuant to this Section 7.1(a), if at all, by delivering written notice of termination to Landlord within ten (10) days after being advised by Landlord that the repairs cannot be completed within one hundred eighty (180) days or that the Premises will be unfit for occupancy or inaccessible by reasonable means for at least one hundred eighty (180) days after commencement of repairs to the Building.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 20

(b) Partial Destruction; Failure to Terminate. If the Building or the Garage or the Premises should be partially destroyed by fire or other casualty or if the Building or the Garage or the Premises is completely destroyed and neither Landlord nor Tenant elects to terminate this Lease pursuant to subsection 7.1(a), then Landlord shall promptly commence (and thereafter pursue with reasonable diligence) preparation of the plans and specifications for the repair of the Building, the Garage and the Premises (including the Tenant’s Improvements except as set forth in the next sentence) and thereafter diligently pursue repairing the Building, the Garage and the Premises to substantially the same condition which existed immediately prior to the occurrence of the casualty. To the extent the Tenant’s Improvements include any items required to be insured by Tenant under subsection 7.2.1(b) below, Landlord shall have the obligation to repair such items only to the extent the proceeds of such insurance are disbursed to Landlord for such repair.

(c) Limitation on Landlord’s Obligations; Abatement of Rent. In no event shall Landlord be required to rebuild, repair or replace any part of the furniture, equipment, fixtures, inventory, supplies or any other personal property or any other improvements (except Tenant’s Improvements to the extent set forth in subsection (b) above), which may have been placed by Tenant within the Building, the Garage or the Premises. Landlord shall allow Tenant a fair diminution of Basic Annual Rent and Additional Rent during the time the Premises are unfit for occupancy; provided, however, if the casualty in question was caused by Tenant, its agents, employees, licensees or invitees, Basic Annual Rent and Additional Rent shall be abated only to the extent Landlord is compensated for such Basic Annual Rent and Additional Rent by loss of rents insurance, if any.

(d) Termination Resulting from Mortgagee’s Use of Proceeds. Notwithstanding Landlord’s restoration obligation, in the event any mortgagee under a deed of trust or mortgage on the Building and the Garage should require that the insurance proceeds be used to retire or reduce the mortgage debt or if the insurance company issuing Landlord’s fire and casualty insurance policy fails or refuses to pay Landlord the proceeds under such policy, Landlord shall have no obligation to rebuild and this Lease shall terminate upon notice by Landlord to Tenant.

(e) Insurance Proceeds. Any insurance which may be carried by Landlord or Tenant against loss or damage to the Building, the Garage or the Premises shall be for the sole benefit of the party carrying such insurance and under its sole control.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 21

SECTION 7.2 TENANT’S INSURANCE.

7.2.1 Types of Coverage. From and after the date of this Lease, Tenant will carry, at its expense, the insurance set forth in paragraphs (a), (b), and (c) of this subsection.

(a) Commercial General Liability Insurance. Commercial General Liability Insurance covering the Premises and Tenant’s use thereof against claims for personal or bodily injury or death or property damage occurring upon, in or about the Premises (including contractual indemnity and liability coverage), such insurance to provide coverage of not less than $2,000,000.00 per occurrence and $2,000,000.00 annual aggregate, with a deductible reasonably acceptable to Landlord. This limit may be obtained through combining commercial general liability and excess umbrella policies, provided the specified coverage amounts are allocated and available for the Premises. All insurance coverage required under this subsection (a) shall extend to any liability of Tenant arising out of the indemnities provided for in this Lease to the extent such indemnity would be covered by commercial general liability insurance. Additionally, each such policy of insurance required under this subsection shall expressly insure Tenant and, as additional insureds, both Landlord and Property Manager.

(b) Property Insurance. Property insurance on an all-risk basis (including coverage against fire, wind, tornado, vandalism, malicious mischief, water damage and sprinkler leakage) covering all tenant owned fixtures, equipment and leasehold improvements, and other personal property located in the Premises and endorsed to provide one hundred percent (100%) replacement cost coverage. Such policy will be written in the name of Tenant. The property insurance may, with the consent of the Landlord, provide for a reasonable deductible.

(c) Workers Compensation’ and Employer’s Liability Insurance. Worker’s compensation insurance together with employer’s liability insurance in an amount of at least $1,000,000.00.

(d) Hired and Non-Owned Auto Liability Insurance. Hired and Non-Owned Auto Liability Insurance covering Tenant and its employees and agents in an amount of at least $500,000 per occurrence.

7.2.2 Other Requirements of Insurance. All such insurance will be issued and underwritten by companies with an AM Best rating of A or better and will contain endorsements that (a) such insurance may not lapse with respect to Landlord or Property Manager or be canceled or amended with respect to Landlord or Property Manager without the insurance company giving Landlord and Property Manager at least thirty (30) days prior written notice of such cancellation or amendment, (b) Tenant will be solely responsible for payment of premiums, (c) in the event of payment of any loss covered by such policy, Landlord or Landlord’s designees will be paid first by the insurance company for Landlord’s loss, and (d) Tenant’s insurance is primary in the event of overlapping coverage which may be carried by Landlord.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 22

7.2.3 Proof of Insurance. Within fifteen (15) days after the Date of Lease, but in any event prior to the Commencement Date, Tenant shall deliver to Landlord duly executed, original certificates of such insurance evidencing in-force coverage. Further, at least fifteen (15) days prior to the expiration of the policy in question, Tenant shall deliver to Landlord a duly executed, original certificate of insurance evidencing the renewal of each insurance policy required to be maintained by Tenant hereunder.

SECTION 7.3 LANDLORD’S INSURANCE.

7.3.1 Property Insurance. From and after the Date of Lease, Landlord will carry a policy or policies of all risk extended coverage insurance covering the Property (excluding property required to be insured by Tenant) endorsed to provide replacement cost coverage and providing protection against perils included within the standard Colorado form of fire and extended coverage insurance policy, together with insurance against sprinkler damage, vandalism, malicious mischief and such other risks as Landlord may from time to time determine and with any such deductibles as Landlord may from time to time determine.

7.3.2 Commercial General Liability Insurance. Landlord will carry Commercial General Liability policy or policies covering the Building against claims for personal or bodily injury, or death, or property damage resulting from the negligence of the Landlord or Property Manager or their agents, occurring upon, in or about the Building to afford protection to the limit of not less than $2,000,000 per occurrence, and $2,000,000 annual aggregate. This insurance coverage shall extend to any liability of Landlord arising out of the indemnities provided for in this Lease.

7.3.3 Other Requirements. Any insurance provided for in this Section 7.3 may be effected by self-insurance or by a policy or policies of blanket insurance covering additional items or locations or assureds, provided that the requirements of this Section 7.3 are otherwise satisfied. Tenant shall have no rights in any policy or policies maintained by Landlord.

SECTION 7.4      WAIVER OF SUBROGATION. LANDLORD AND TENANT EACH HEREBY WAIVES ANY RIGHTS IT MAY HAVE AGAINST THE OTHER (INCLUDING, BUT NOT LIMITED TO, A DIRECT ACTION FOR DAMAGES) ON ACCOUNT OF ANY LOSS OR DAMAGE OCCASIONED TO LANDLORD OR TENANT, AS THE CASE MAY BE (EVEN IF SUCH LOSS OR DAMAGE IS CAUSED BY THE FAULT, NEGLIGENCE OR OTHER TORTIOUS CONDUCT, ACTS OR OMISSIONS OF THE RELEASED PARTY OR THE RELEASED PARTY’S DIRECTORS, EMPLOYEES, AGENTS OR INVITEES OR IF THE RELEASED PARTY OR THE RELEASED PARTY’S DIRECTORS, EMPLOYEES, AGENTS OR INVITEES WOULD OTHERWISE BE LIABLE UNDER STRICT LIABILITY), TO THEIR RESPECTIVE PROPERTY, THE PREMISES, ITS CONTENTS OR TO ANY OTHER PORTION OF THE BUILDING OR THE PROPERTY ARISING FROM ANY RISK (WITHOUT REGARD TO THE AMOUNT OF COVERAGE OR THE AMOUNT OF DEDUCTIBLE) COVERED BY THE ALL RISK PROPERTY INSURANCE REQUIRED TO BE CARRIED BY TENANT AND LANDLORD, RESPECTIVELY, UNDER SUBSECTION 7.2.1 AND SUBSECTION 7.3.1 ABOVE. The foregoing waiver shall be effective even if either or both parties fail to carry the insurance required by subsection 7.2.1 and subsection 7.3.1 above. If a party waiving rights under this Section 7.4 is carrying an all risk full replacement cost insurance policy in the promulgated form used in the State of Colorado and an amendment to such promulgated form is passed, such amendment shall be deemed not a part of such promulgated form until it applies to the policy being carried by the waiving party. Without limiting the foregoing waivers and to the extent permitted by applicable law, each of the parties hereto, on behalf of their respective insurance companies insuring the property of such party against loss, waive any right of subrogation that such party or Property Manager or its respective insurers may have against the other party or its respective officers, directors, employees, agents or invitees and all rights of their respective insurance companies based upon an assignment from its insured. Each party to this Lease agrees immediately to give to each such insurance company written notification of the terms of the mutual waivers contained in this Section and to have its insurance policies properly endorsed, if necessary, to prevent the invalidation of insurance coverage by reason of such waivers.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 23

SECTION 7.5       TENANT’S GENERAL INDEMNITY. TENANT WILL DEFEND, INDEMNIFY, AND HOLD HARMLESS LANDLORD, PROPERTY MANAGER, AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS (COLLECTIVELY, “LANDLORD’S PARTIES”) FROM AND AGAINST ALL CLAIMS, DEMANDS, ACTIONS, DAMAGES, LOSS, LIABILITIES, JUDGMENTS, COSTS AND EXPENSES, INCLUDING WITHOUT LIMITATION, ATTORNEYS’ FEES AND COURT COSTS (EACH, A “LANDLORD CLAIM”) WHICH ARE SUFFERED BY, RECOVERED FROM OR ASSERTED AGAINST LANDLORD OR LANDLORD’S PARTIES AND ARISE FROM OR IN CONNECTION WITH (I) THE USE OR OCCUPANCY OF THE PREMISES, (II) ANY ACCIDENT, INJURY OR DAMAGE OCCURRING IN OR AT THE PREMISES, OR (III) ANY BREACH BY TENANT OF ANY REPRESENTATION OR COVENANT IN THIS LEASE, INCLUDING WITHOUT LIMITATION, TENANT’S FAILURE TO COMPLY WITH ALL APPLICABLE LAWS. TENANT’S INDEMNITY AND HOLD HARMLESS OBLIGATIONS SHALL APPLY EVEN IN THE EVENT OF THE FAULT OR NEGLIGENCE OF THE PARTIES INDEMNIFIED AND HELD HARMLESS HEREUNDER TO THE FULLEST EXTENT PERMITTED BY LAW, BUT IN NO EVENT SHALL THEY APPLY TO LIABILITY OR DAMAGE OR LOSS CAUSED BY THE WILLFUL MISCONDUCT OR SOLE NEGLIGENCE OF THE PARTIES INDEMNIFIED OR HELD HARMLESS. FURTHER, SUCH INDEMNIFICATION SHALL NOT INCLUDE ANY LANDLORD CLAIM WAIVED BY LANDLORD UNDER SECTION 7.4 ABOVE.

SECTION 7.6        LANDLORD’S GENERAL INDEMNITY. LANDLORD WILL DEFEND, INDEMNIFY AND HOLD HARMLESS TENANT AND ITS OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS (COLLECTIVELY, “TENANT’S PARTIES”) FROM AND AGAINST ALL CLAIMS, DEMANDS, ACTIONS, DAMAGES, LOSS, LIABILITIES, JUDGMENTS, COSTS AND EXPENSES, INCLUDING WITHOUT LIMITATION, ATTORNEY’S FEES AND COURT COSTS (EACH, A “TENANT CLAIM”) WHICH ARE SUFFERED BY, RECOVERED FROM OR ASSERTED AGAINST TENANT OR TENANT’S PARTIES AND ARISE FROM OR IN CONNECTION WITH (I) ANY ACCIDENT, INJURY OR DAMAGE OCCURRING IN OR AT THE PROPERTY (OTHER THAN IN THE PREMISES), OR (II) ANY BREACH BY LANDLORD OF ANY REPRESENTATION OR COVENANT IN THIS LEASE. LANDLORD’S INDEMNITY AND HOLD HARMLESS OBLIGATIONS SHALL APPLY EVEN IN THE EVENT OF THE FAULT OR NEGLIGENCE OF THE PARTIES INDEMNIFIED AND HELD HARMLESS HEREUNDER TO THE FULLEST EXTENT PERMITTED BY LAW, BUT IN NO EVENT SHALL THEY APPLY TO LIABILITY OR DAMAGE OR LOSS CAUSED BY THE WILLFUL MISCONDUCT OR SOLE NEGLIGENCE OF THE PARTIES INDEMNIFIED OR HELD HARMLESS. FURTHER, SUCH INDEMNIFICATION SHALL NOT INCLUDE ANY TENANT CLAIM WAIVED BY TENANT UNDER SECTION 7.4.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 24

ARTICLE 8

CONDEMNATION

If the Property or any portion thereof that, in Landlord’s or Tenant’s reasonable opinion, is necessary to the continued efficient or economically feasible use of the Property or the Premises shall be taken or condemned for public purposes, or sold to a condemning authority in lieu thereof, then either party may, at its option, terminate this Lease on the effective date of such taking by delivering written notice thereof to the other party on or before ten (10) days after the effective date of the taking, condemnation or sale in lieu thereof. If neither Landlord nor Tenant elects to exercise such termination right, then this Lease shall continue in full force and effect, provided that if the taking, condemnation or sale includes any portion of the Premises, the Basic Annual Rent and Additional Rent shall be redetermined on the basis of the remaining square feet of Premises Rentable Area. Landlord, at Landlord’s sole option and expense, shall restore and reconstruct the Building to substantially its former condition to the extent that the same may be reasonably feasible, but such work shall not be required to exceed the scope of the work done by Landlord in originally constructing the Building. Landlord shall receive the entire award (which shall include sales proceeds) payable as a result of a condemnation, taking or sale in lieu thereof. Tenant shall, however, have the right to recover from such authority through a separate award which does not reduce Landlord’s award, any compensation as may be awarded to Tenant on account of moving and relocation expenses and depreciation and removal of Tenant’s physical property.

ARTICLE 9

LIENS

Tenant shall keep the Premises and the Property free from all liens arising out of any work performed, materials furnished or obligations incurred by or for Tenant, and Tenant shall defend indemnify and hold harmless Landlord from and against any and all claims, causes of action, damages and expenses (including reasonable attorneys’ fees) arising from or in connection with any such liens. If Tenant shall not, within ten (10) days following notification to Tenant of the imposition of any such lien, cause the same to be released of record by payment or the posting of a bond in amount, form and substance acceptable to Landlord, Landlord shall have, in addition to all other remedies provided herein and by law, the right but not the obligation, to cause the same to be released by such means as it shall deem proper, including payment of or defense against the claim giving rise to such lien. All amounts paid or incurred by Landlord in connection therewith shall be paid by Tenant to Landlord on demand and shall bear interest from the date of demand until paid at the rate set forth in Section 2.4 above.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 25

ARTICLE 10

TAXES ON TENANT’S PROPERTY

Tenant shall be liable for and shall pay, prior to their becoming delinquent, any and all taxes and assessments levied against any personal property or trade or other fixtures placed by Tenant in or about the Premises.

ARTICLE 11

SUBLETTING AND ASSIGNING

SECTION 11.1        SUBLEASE AND ASSIGNMENT. Except as otherwise permitted herein and by Section 11.2 and Section 11.3 below, Tenant shall not assign this Lease, or allow it to be assigned, in whole or in part, by operation of law or otherwise (it being agreed that for purposes of this Lease, assignment shall include, without limitation, the transfer of a majority interest of stock, partnership or other forms of ownership interests, merger or dissolution) or mortgage or pledge the same, or sublet the Premises or any part thereof or permit the Premises to be occupied by any individual or business entity, or any combination thereof, other than Tenant, without the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed. Notwithstanding any subletting or assignment by Tenant hereunder or any provision herein to the contrary, Tenant shall remain fully liable for the performance of all the covenants, agreements, terms, provisions and conditions contained in this Lease on the part of Tenant to be performed. No assignee or subtenant of the Premises or any portion thereof may assign or sublet the Premises or any portion thereof. Any assignment made by Tenant shall contain a covenant of assumption by the assignee running to Landlord. All reasonable legal fees and expenses incurred by Landlord in connection with any assignment or sublease proposed by Tenant will be paid by Tenant within thirty (30) days of receipt of an invoice from Landlord.

Notwithstanding the foregoing, Tenant shall have the right at any time during the Term of this Lease, without Landlord’s consent but with prior written notice to Landlord and reimbursement of Landlord for all reasonable out of pocket expenses related to review and negotiation of any documentation required by an Affiliate (hereinafter defined) or its lender, to sublet the Premises, or any portion thereof, to any Affiliate or to assign Tenant’s interest in this Lease to any Affiliate. Other than reimbursement of Landlord for reasonable out of pocket expenses, no economic consideration shall be payable to Landlord in connection with any assignment or sublease to an Affiliate. The term “Affiliate” shall mean an entity that is either (i) a surviving corporation in the event of a merger or consolidation by Tenant (it being agreed that Tenant may engage in any such merger or consolidation whether Tenant or the other entity is the survivor) so long as such survivor owns the majority of the assets of Tenant, (ii) Tenant’s parent corporation, a wholly-owned subsidiary of Tenant or an entity controlled by or under common control with Tenant or (iii) any entity which may acquire all or substantially all of the assets, stock or shares of Tenant. Prior to any such sublease or assignment to an Affiliate, Tenant shall give Landlord notice thereof, together with information reasonably acceptable to Landlord substantiating that such sublessee or assignee is, in fact, an Affiliate as herein provided. Notwithstanding any provisions to the contrary contained in this Article 11, Tenant may not, through the use of any of its rights under this Article 11, through two (2) or more transactions, at one time or over time, whether by first assigning this Lease to an Affiliate and then merging the Affiliate into another entity or selling the stock or other ownership interests of such Affiliate or the majority of its assets or by other means, assign this Lease or any interest herein or sublease the Premises or any portion thereof, in any manner otherwise prohibited by this Article 11 or otherwise requiring consent of Landlord under this Article 11 as a subterfuge by Tenant to avoid its obligations under this Lease or the restrictions on transfers under this Article 11.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 26

SECTION 11.2        LANDLORD’S RIGHTS. If Tenant desires to sublease any portion of the Premises or assign this Lease to a party which is not an Affiliate, Tenant shall submit to Landlord (a) in writing, the name of the proposed subtenant or assignee, the nature of the proposed subtenant’s or assignee’s business and, in the event of a sublease, the portion of the Premises which Tenant desires to sublease, (b) a current balance sheet and income statement for such proposed subtenant or assignee, (c) a copy of the proposed form of sublease or assignment, and (d) such other information as Landlord may reasonably request (collectively, the “Required Information”). Landlord shall, within fifteen (15) business days after Landlord’s receipt of the Required Information, deliver to Tenant a written notice (a “Landlord Response”) in which Landlord either (i) consents to the proposed sublease or assignment, or (ii) withholds its consent to the proposed sublease or assignment, which consent shall not be unreasonably withheld, conditioned or delayed so long as Tenant is not in default beyond any applicable cure period hereunder and Landlord has received all Required Information. The reasons for which Landlord shall be deemed to have reasonably withheld its consent to any sublease or assignment include but are not limited to (i) Landlord’s determination (in its sole discretion) that such subtenant or assignee is not of the character or quality of a tenant to whom Landlord would generally lease space in the Building, (ii) such sublease or assignment conflicts in any manner with this Lease, including, but not limited to, the Permitted Use or Section 4.1 hereof, (in) the proposed subtenant or assignee is a governmental entity, a school, a training facility, a provider of medical services or a telemarketing operation, (iv) the proposed subtenant’s or assignee’s primary business is prohibited by an non-compete clause then affecting the Building, (v) the proposed subtenant or assignee is a tenant of the Building or Landlord is currently negotiating with the proposed subtenant or assignee to become a tenant of the Building, or (vi) such subtenant or assignee does not meet the creditworthiness standards applied by Landlord generally in the selection of tenants for the Building (but taking into consideration the fact that Tenant remains liable under this Lease). In lieu of consenting to any such proposed sublease or assignment (and without regard to whether Landlord’s action is “reasonable” or “unreasonable”) Landlord shall have the right, within fifteen (15) business days after Landlord’s receipt of the Required Information to (1) suspend this Lease as to the space so affected as of the date on which the assignment or sublease was to be effective and for the duration of the proposed sublease or assignment, whereupon Tenant shall be relieved of all obligations hereunder as to such space during such suspension, but after such suspension, Tenant shall once again become liable hereunder as to the relevant space or, (2) if the proposed assignment or sublease is for the remainder of the term of this Lease, terminate this Lease as to the space so affected as of the date so specified by Tenant in its notice to Landlord, in which event Tenant shall be relieved of any and all further obligations hereunder as to such space. In the event Landlord consents to any sublease or assignment by Tenant, Landlord shall be entitled to fifty percent (50%) of the net profits, if any (after deducting all out-of-pocket subleasing costs including the unamortized cost of any tenant improvements paid by Tenant in connection with the subleasing or assignment), from any subleasing of all or any portion of the Premises, or the assignment of all of the Premises, to an entity or person other than an Affiliate.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 27

SECTION 11.3        LANDLORD’S RIGHTS RELATING TO ASSIGNEE OR SUBTENANT. If this Lease or any part hereof is assigned or the Premises or any part thereof are sublet, Landlord may at its option collect directly from such assignee or subtenant all rents becoming due to Tenant under such assignment or sublease and apply such rent against any sums due to Landlord by Tenant hereunder. Tenant hereby authorizes and directs any such assignee or subtenant to make such payment of rent directly to Landlord upon receipt of notice from Landlord, and Tenant agrees that any such payments made by an assignee or subtenant to Landlord shall, to the extent of the payments so made, be a full and complete release and discharge of rent owed to Tenant by such assignee or subtenant. No direct collection by Landlord from any such assignee or subtenant shall be construed to constitute a novation or a release of Tenant or any guarantor of Tenant from the further performance of its obligations hereunder. In the event that, following an assignment or subletting, this Lease or the rights and obligations of Tenant hereunder are terminated for any reason, including without limitation in connection with default by or bankruptcy of Tenant, Landlord may, at its option, consider this Lease to be thereafter a direct lease to the assignee or subtenant of Tenant upon the terms and conditions contained in this Lease.

ARTICLE 12

TRANSFERS BY LANDLORD, SUBORDINATION AND

TENANT’S ESTOPPEL CERTIFICATE

SECTION 12.1        SALE OF THE PROPERTY. In the event of any transfer of title to the Property, the transferor shall automatically be relieved and freed of all obligations of Landlord under this Lease accruing after such transfer, provided that the transferee expressly assumes in writing all obligations of Landlord hereunder accruing after the date of such transfer and further provided that if a Security Deposit has been made by Tenant, Landlord shall not be released from liability with respect thereto unless Landlord’s transferee assumes responsibility for the Security Deposit.

SECTION 12.2        SUBORDINATION, ATTORNMENT AND NOTICE. This Lease is subject and subordinate (i) to each lease of all or any portion of the Property wherein Landlord is the tenant and to the lien of each mortgage and deed of trust encumbering all or any portion of the Property, regardless of whether such lease, mortgage or deed of trust now exists or may hereafter be created, (ii) to any and all advances (including interest thereon) to be made under each such lease, mortgage or deed of trust and (iii) to all modifications, consolidations, renewals, replacements and extensions of each such lease, mortgage or deed of trust; provided that the foregoing subordination to any mortgage or deed of trust placed on the Property after the date hereof shall not become effective until and unless the holder of such mortgage or deed of trust delivers to Tenant a non-disturbance agreement (which may include Tenant’s agreement to attorn as set forth below) permitting Tenant, if Tenant is not then in default beyond any applicable cure period under any provision of this Lease, to remain in occupancy of the Premises in the event of a foreclosure of any such mortgage or deed of trust. Tenant shall, in the event of the sale or assignment of Landlord’s interest in the Premises, attorn to and recognize such purchaser, assignee or lessor as Landlord under this Lease. Tenant shall, in the event of any proceedings brought for the foreclosure of, or in the event of the exercise of the power of sale under, any mortgage or deed of trust covering the Premises, attorn to and recognize the purchaser at foreclosure as Landlord under this Lease. The above subordination and attornment clauses shall be self-operative and no further instruments of subordination or attornment need be required by any mortgagee, trustee, lessor, purchaser or assignee. In confirmation thereof, Tenant agrees that, upon the request of Landlord, or any such mortgagee, trustee, lessor, purchaser or assignee, Tenant shall execute and deliver whatever instruments may be required for such purposes and to carry out the intent of this Section 12.2. In the event Tenant requests a subordination, non-disturbance and attornment agreement from any mortgagee, trustee, lessor, purchaser or assignee of Landlord, Tenant shall pay all legal fees and expenses incurred by Landlord in connection therewith, including any legal and other fees and expenses charged by Landlord’s mortgagee, trustee, lessor, purchaser or assignee.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 28

SECTION 12.3        TENANT’S ESTOPPEL CERTIFICATE. Tenant shall, upon the request of Landlord or any mortgagee of Landlord (whether under a mortgage or deed of trust), without additional consideration, deliver an estoppel certificate within ten (10) days after a request therefor, consisting of reasonable statements required by Landlord, any mortgagee or purchaser of any interest in the Property, which statements may include but shall not be limited to the following: this Lease is in full force and effect, with rental paid through the date specified in the certificate; this Lease has not been modified or amended; Tenant is not aware that Landlord is in default or that Landlord has failed to fully perform all of Landlord’s obligations hereunder; and such other statements as may reasonably be required by the requesting party. If Tenant is unable to make any statements contained in the estoppel certificate because the same is untrue or inaccurate, Tenant shall with specificity state the reason why such statement is untrue or inaccurate.

ARTICLE 13

DEFAULT

SECTION 13.1        DEFAULTS BY TENANT. The occurrence of any of the events described in subsections 13.1.1 through 13.1.4 shall constitute a default by Tenant under this Lease.

13.1.1 Failure to Pay Rent. With respect to the first payment of Rent not made by Tenant when due in any twelve (12) month period, the failure by Tenant to make such payment to Landlord within five (5) business days after Landlord gives Tenant written notice specifying that the payment was not made when due; with respect to any other payment of Rent during any twelve (12) month period, the failure by Tenant to make such payment of Rent to Landlord when due, no notice of any such failure being required.

13.1.2 Failure to Perform Other Obligations. Any failure by Tenant to observe and perform any provision of this Lease to be observed or performed by Tenant where such failure continues for thirty (30) days after Landlord gives Tenant written notice of such failure, provided that if such failure by its nature cannot be cured within such thirty (30) day period, Tenant shall not be in default hereunder so long as Tenant commences curative action within such thirty (30) day period, diligently and continuously pursues the curative action and fully cures the failure within ninety (90) days after Landlord gives such written notice to Tenant.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 29

13.1.3 Repeated Failure to Perform. The third failure by Tenant in any twelve (12) month period to perform and observe a particular provision of this Lease to be observed or performed by Tenant (other than the failure to pay Rent, which in all instances will be governed by subsection 13.1.1 above), no notice being required for any such third failure.

13.1.4 Bankruptcy, Insolvency, Etc. Tenant or any Guarantor (i) becomes or is declared insolvent according to any law, (ii) makes a transfer in fraud of creditors according to any applicable law, (iii) assigns or conveys all or a substantial portion of its property for the benefit of creditors or (iv) files a petition for relief, or is the subject of an order for relief, under the Federal Bankruptcy Code or any other present or future federal or state insolvency, bankruptcy or similar law (collectively, “applicable bankruptcy law”) or a receiver or trustee is appointed for Tenant or Guarantor or its property; the interest of Tenant or Guarantor under this Lease is levied on under execution or under other legal process; or any involuntary petition is filed against Tenant or Guarantor under applicable bankruptcy law; provided, however, no action described in this subsection 13.1.4 shall constitute a default by Tenant if Tenant or Guarantor shall vigorously contest the action by appropriate proceedings and shall remove, vacate or terminate the action within sixty (60) days after the date of its inception.

SECTION 13.2 REMEDIES OF LANDLORD.

13.2.1 Termination of Lease. Upon the occurrence of a default beyond any applicable cure period by Tenant hereunder, Landlord may, without judicial process, terminate this Lease by giving written notice thereof to Tenant (whereupon all obligations and liabilities of Landlord hereunder shall terminate) and, without further notice and without liability, repossess the Premises. Landlord shall be entitled to recover all loss and damage Landlord may suffer by reason of such termination, whether through inability to relet the Premises on satisfactory terms or otherwise, including with limitation, accrued Rent to the date of termination and Late Charges, plus (a) interest thereon at the rate established under Section 2.4 above from the date due through the date paid or date of any judgment or award by any court of competent jurisdiction, (b) the unamortized cost of (i) the Tenant’s Improvements, (ii) brokers’ fees and commissions, (iii) attorneys’ fees, (iv) moving allowances, (v) equipment allowances and (vi) any other costs incurred by Landlord in connection with making or executing this Lease, (c) the cost of recovering the Premises, and (d) the costs of reletting the Premises (including, without limitation, advertising costs, brokerage fees, leasing commissions, reasonable attorneys’ fees and refurbishing costs and other costs in readying the Premises for a new tenant).

13.2.2 Repossession and Re-Entry. Upon the occurrence of a default beyond any applicable cure period by Tenant hereunder, Landlord may, without judicial process, immediately terminate Tenant’s right of possession of the Premises (whereupon all obligations and liability of Landlord hereunder shall terminate) without terminating this Lease, and, without notice, demand or liability, enter upon the Premises or any part thereof, take absolute possession of the same, expel or remove Tenant and any other person or entity who may be occupying the Premises and change the locks. If Landlord terminates Tenant’s possession of the Premises under this subsection 13.2.2, (i) Landlord shall have no obligation to tender to Tenant a key for new locks installed in the Premises, (ii) Tenant shall have no further right to possession of the Premises, and (iii) Landlord will have the right to relet the Premises or any part thereof on such terms as Landlord deems advisable, subject to any obligation to mitigate damages imposed by applicable law. Any rent received by Landlord from reletting the Premises or a part thereof shall be applied first, to the payment of any indebtedness other than Rent due hereunder from Tenant to Landlord (in such order as Landlord shall designate), second, to the payment of any cost of such reletting, including, without limitation, refurbishing costs, reasonable attorneys’ fees, advertising costs, brokerage fees and leasing commissions (in such order as Landlord shall designate) and third, to the payment of Rent due and unpaid hereunder, and Tenant shall satisfy and pay to Landlord any deficiency upon demand therefor. No such re-entry or taking of possession of the Premises by Landlord shall be construed as an election by Landlord to terminate this Lease unless a written notice of such termination is also given to Tenant pursuant to subsection 13.2.1 above. If Landlord relets the Premises, either before or after the termination of this Lease, all such rentals received from such lease shall be and remain the exclusive property of Landlord.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 30

13.2.3 Cure of Default. Upon the occurrence of a default beyond any applicable cure period by Tenant hereunder, Landlord may, without judicial process and without having any liability therefor, enter upon the Premises and do whatever Tenant is obligated to do under the terms of this Lease and Tenant agrees to reimburse Landlord on demand for any expenses which Landlord may incur in effecting compliance with Tenant’s obligations under this Lease, and Tenant further agrees that Landlord shall not be liable for any damages resulting to Tenant from such action, WHETHER CAUSED BY THE NEGLIGENCE OF LANDLORD OR OTHERWISE.

13.2.4 Continuing Obligations. No repossession of or re-entering upon the Premises or any part thereof pursuant to subsection 13.2.2 or 13.2.3 above or otherwise and no reletting of the Premises or any part thereof pursuant to subsection 13.2.2 above shall relieve Tenant or any Guarantor of its liabilities and obligations hereunder, all of which shall survive such repossession or re-entering. In the event of any such repossession of or re-entering upon the Premises or any part thereof by reason of the occurrence of a default, Tenant will continue to pay to Landlord all Rent which is required to be paid by Tenant.

13.2.5 Cumulative Remedies. No right or remedy herein conferred upon or reserved to Landlord is intended to be exclusive of any other right or remedy set forth herein or otherwise available to Landlord at law or in equity and each and every right and remedy shall be cumulative and in addition to any other right or remedy given hereunder or now or hereafter existing at law or in equity. In addition to the other remedies provided in this Lease and without limiting the preceding sentence, Landlord shall be entitled, to the extent permitted by applicable law, to injunctive relief in case of the violation, or attempted or threatened violation, of any of the covenants, agreements, conditions or provisions of this Lease, or to a decree compelling performance of any of the covenants, agreements, conditions or provisions of this Lease.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 31

13.2.6 Mitigation of Damages. For purposes of determining any recovery of rent or damages by Landlord that depends upon what Landlord could collect by using reasonable efforts to relet the Premises, whether the determination is required under subsections 13.2.1 or 13.2.2 or otherwise, it is understood and agreed that:

(a) Landlord may reasonably elect to lease other comparable, available space in the Building, if any, before reletting the Premises.

(b) Landlord may reasonably decline to incur out-of-pocket costs to relet the Premises, other than customary leasing commissions and legal fees for the negotiation of a lease with a new tenant.

(c) Landlord may reasonably decline to relet the Premises at rental rates below then prevailing market rental rates, because of the negative impact lower rental rates would have on the value of the Building and because of the uncertainty of actually receiving from Tenant the greater damages that Landlord would suffer from and after reletting at the lower rates.

(d) Before reletting the Premises to a prospective tenant, Landlord may reasonably require the prospective tenant to demonstrate the same financial wherewithal that Landlord would require as a condition to leasing other space in the Building to prospective tenant.

(e) Identifying a prospective tenant to relet the Premises, negotiating a new lease with such tenant and making the Premises ready for such tenant will take time, depending upon market conditions when the Premises first become available for reletting, and during such time no one can reasonably expect Landlord to collect anything from reletting.

SECTION 13.3         DEFAULTS BY LANDLORD. Landlord shall be in default under this Lease if Landlord fails to perform any of its obligations hereunder and such failure continues for a period of thirty (30) days after Tenant gives written notice to Landlord and each mortgagee who has a lien against any portion of the Property and whose name and address has been provided to Tenant stating that (a) Landlord is in breach of this Lease and (b) describing the breach with specificity, provided that if such failure cannot reasonably be cured within such thirty (30) day period, Landlord shall not be in default hereunder if the curative action is commenced within such thirty (30) day period and is thereafter diligently pursued until cured.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 32

SECTION 13.4         LANDLORD’S LIABILITY. If Tenant shall recover a money judgment against Landlord, such judgment shall be satisfied only out of the right, title and interest of Landlord in the Property as the same may then be encumbered and Landlord shall not be liable for any deficiency. In no event shall Tenant have the right to levy execution against any property of Landlord other than its interest in the Property as above provided. Landlord shall not be liable to Tenant for any claims, actions, demands, costs, expenses, damage or liability of any kind which (a) are caused by (i) tenants or any persons either in the Premises or elsewhere in the Building (unless occurring in the Common Areas and caused by Landlord’s negligence), (ii) occupants of property adjacent to the Building or Common Areas, (iii) the public, or (iv) the construction of any private, public or quasi-public work, or (b) are caused by any theft or burglary at the Premises or the Property.

SECTION 13.5          CONSEQUENTIAL DAMAGES. In no event shall either party by liable to the other party for consequential or special damages by reason of a failure to perform (or a default) by such party hereunder or otherwise, except as set forth in Section 1.4 above.

ARTICLE 14

NOTICES

Any notice or communication required or permitted in this Lease shall be given in writing, sent by (a) personal delivery (b) expedited delivery service, (c) United States mail, postage prepaid, registered or certified mail, return receipt requested, (d) electronic mail or facsimile, with proof of delivery on a business day and addressed as set forth in the Basic Lease Information or to such other address or to the attention of such other person as shall be designated from time to time in writing by the applicable party and sent in accordance herewith. Any such notice or communication shall be deemed to have been given either at the time of personal delivery or, in the case of delivery service, mail or electronic mail, as of the date of first attempted delivery at the address and in the manner provided herein. Reference is made to Section 13.3 of this Lease for other provisions governing notices.

ARTICLE 15

MISCELLANEOUS PROVISIONS

SECTION 15.1         BUILDING NAME AND ADDRESS. Tenant shall not, without the written consent of Landlord, use the name of the Building for any purpose other than as the address of the business to be conducted by Tenant in the Premises and in no event shall Tenant acquire any rights in or to such names. Landlord shall have the right at any time to change the name, number or designation by which the Building is known.

SECTION 15.2         SIGNAGE. Landlord shall maintain a tenant directory in the main Building lobby, and shall provide Tenant identification in such directory, setting forth Tenant’s name and location. Tenant shall not otherwise inscribe, paint, affix, or display any signs, advertisements or notices on or in the Building or the Premises, except for such tenant identification information approved in advance by Landlord and installed adjacent to the access door or doors to the Premises. Tenant may also install its standard signage within the Premises so long as such signage is not visible from the Common Areas. Landlord will provide a building standard sign plaque at the main entry to the Premises at Landlord’s sole cost and expense. Landlord may reasonably withhold approval of any Tenant sign if necessary, in Landlord’s reasonable discretion, to preserve aesthetic standards for the Building. All signs permitted hereunder shall constitute Installations and shall be subject to the provisions of subsection 6.3.3, including without limitation Landlord’s rights under such subsection to perform and charge for the work necessary to complete Installations.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 33

SECTION 15.3         NO WAIVER. No waiver by Landlord or Tenant of any provision of this Lease shall be deemed to have been made unless such waiver is expressly stated in writing signed by the waiving party. No waiver by Landlord or Tenant of any breach by the other party shall be deemed a waiver of any subsequent breach of the same or any other provision. The failure of Landlord or Tenant to insist at any time upon the strict performance of any covenant or agreement or to exercise any option, right, power or remedy contained in this Lease shall not be construed as a future waiver thereof. No payment by Tenant or receipt by Landlord of a lesser amount than the monthly installment of Rent due under this Lease shall be deemed to be other than on account of the earliest Rent due hereunder, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as Rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance of such Rent or pursue any other remedy which may be available to Landlord.

SECTION 15.4          APPLICABLE LAW. This Lease shall be governed by and construed in accordance with the laws of the State of Colorado.

SECTION 15.5         COMMON AREAS. “Common Areas” shall mean all areas, spaces, facilities and equipment (whether or not located within the Building) made available by Landlord for the common and joint use of Landlord, Tenant and others designated by Landlord using or occupying space in the Building, including but not limited to, any conference centers, fitness centers (subject to any written indemnification or waiver agreements required by Landlord from any users of such fitness centers), tunnels, walkways, sidewalks and driveways necessary for access to the Building, Building lobbies, the Garage, landscaped areas, public corridors, public rest rooms, Building stairs, elevators open to the public, service elevators (provided that such service elevators shall be available only for tenants of the Building and others designated by Landlord), drinking fountains and any such other areas and facilities as are designated by Landlord from time to time as Common Areas. “Service Corridors” shall mean all loading docks, loading areas and all corridors that are not open to the public but which are available for use by Tenant and others designated by Landlord. “Service Areas” will refer to areas, spaces, facilities and equipment serving the Building (whether or not located within the Building) but to which Tenant and other occupants of the Building will not have access, including, but not limited to, mechanical, telephone, electrical and similar rooms and air and water refrigeration equipment. Tenant is hereby granted a nonexclusive right to use the Common Areas and Service Corridors during the term of this Lease for their intended purposes, in common with others designated by Landlord, subject to the terms and conditions of this Lease, including, without limitation, the Rules and Regulations and the Parking Agreement attached hereto as Exhibit F. The Building, Common Areas, Service Corridors and Service Areas will be at all times under the exclusive control, management and operation of Landlord and Property Manager. Tenant agrees and acknowledges that the Premises (whether consisting of less than one floor or one or more full floors within the Building) do not include, and Landlord hereby expressly reserves for its sole and exclusive use, any and all mechanical, electrical, telephone and similar rooms, janitor closets, elevator, pipe and other vertical shafts and ducts, flues, stairwells, any area above the acoustical ceiling and any other areas not specifically shown on Exhibit B as being part of the Premises.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 34

SECTION 15.6          SUCCESSORS AND ASSIGNS. Subject to Article 11 hereof, all of the covenants, conditions and provisions of this Lease shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors and assigns.

SECTION 15.7         BROKERS. Tenant and Landlord each warrants that it has had no dealings with any real estate broker or agent in connection with the negotiation of this Lease other than the Brokers identified in the Basic Lease Information, and that it knows of no other real estate brokers or agents who are or claim to be entitled to a commission in connection with this Lease. Landlord and Tenant each agrees to defend, indemnify and hold harmless the other from and against any liability or claim, whether meritorious or not, arising with respect to any other broker or agent not so named and claiming to be entitled to a commission by, through or under such party. Landlord has agreed to pay the fees of Landlord’s Broker and Tenant’s Broker strictly in accordance with and subject to the terms and conditions of separate written commission agreements.

SECTION 15.8          SEVERABILITY. If any provision of this Lease or the application thereof to any person or circumstances shall be invalid or unenforceable to any extent, the application of such provisions to other persons or circumstances and the remainder of this Lease shall not be affected thereby and shall be enforced to the greatest extent permitted by law.

SECTION 15.9          EXAMINATION OF LEASE. Submission by Landlord of this instrument to Tenant for examination or signature does not constitute a reservation of or option for lease. This Lease will be effective as a lease only upon execution by and delivery to both Landlord and Tenant.

SECTION 15.10      TIME. Time is of the essence in this Lease and in each and all of the provisions hereof. Whenever a period of days is specified in this Lease, such period shall refer to calendar days unless otherwise expressly stated in this Lease. If any date provided under this Lease for performance of an obligation or expiration of a time period is a Saturday, Sunday or a holiday generally recognized by businesses, the obligation shall be performed or the time period shall expire, as the case may be, on the next succeeding business day.

SECTION 15.11      DEFINED TERMS AND MARGINAL HEADINGS. The words “Landlord” and “Tenant” as used herein shall include the plural as well as singular. If more than one person is named as Tenant, the obligations of such persons are joint and several. The headings and titles to the articles, sections and subsections of this Lease are not a part of this Lease and shall have no effect upon the construction or interpretation of any part of this Lease.

SECTION 15.12       AUTHORITY. Landlord and Tenant and each person signing this Lease on behalf of such party represents to the other party as follows: Such party, if a corporation, limited liability company, limited partnership, limited liability partnership or partnership is duly formed and validly existing under the laws of the state of its formation and is duly qualified to do business in the State of Colorado. Tenant has all requisite power and all governmental certificates of authority, licenses, permits, qualifications and other documentation to lease the Premises and to carry on its business as now conducted and as contemplated to be conducted. Each person signing on behalf of Landlord or Tenant is authorized to do so. The foregoing representation in this Section 15.12 shall also apply to any corporation, limited liability company, limited partnership, limited liability partnership or partnership which is a general partner or joint venturer of Tenant.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 35

SECTION 15.13       FORCE MAJEURE. Whenever a period of time is herein prescribed for action to be taken by Landlord or Tenant, the party taking the action shall not be liable or responsible for, and there shall be excluded from the computation for any such period of time, any delays due to strikes, riots, acts of God, shortages of labor or materials, war, governmental laws, regulations or restrictions or any other causes which are beyond the reasonable control of such party; provided, however, in no event shall the foregoing apply to the financial obligations of either Landlord or Tenant to the other under this Lease, including Tenant’s obligation to pay Basic Annual Rent, Additional Rent or any other amount payable to Landlord hereunder.

SECTION 15.14       NO RECORDING. This Lease shall not be recorded.

SECTION 15.15       PARKING. Exhibit F attached hereto sets forth agreements between Landlord and Tenant relating to parking.

SECTION 15.16       ATTORNEYS’ FEES. In the event of any legal action or proceeding brought by either party against the other arising out of this Lease, the prevailing party shall be entitled to recover reasonable attorneys’ fees and costs incurred in such action (including, without limitation, all costs of appeal) and such amount shall be included in any judgment rendered in such proceeding.

SECTION 15.17       SURVIVAL OF INDEMNITIES. Each indemnity agreement and hold harmless agreement contained herein shall survive the expiration or termination of this Lease.

SECTION 15.18      RELOCATION OF PREMISES. Landlord may, upon ninety (90) days prior written notice to Tenant (the “Relocation Notice”), relocate the Premises to any other premises within the Building (hereinafter referred to as the “Relocated Premises”), provided that each of the following conditions are satisfied:

15.18.1 The Relocated Premises (a) are substantially the same size as the Premises; (b) have substantially the same configuration and leasehold improvements as the Premises; and (c) have substantially the same view as the Premises;

15.18.2 Landlord shall pay all out-of-pocket expenses incurred by Tenant in connection with any such relocation, including all costs of changes in signs, stationery costs, moving costs, reinstallation of telephone and computer equipment, wiring and cabling, and the expense of furnishing the Relocated Premises with substantially the same type and quality of leasehold improvements as the Premises; and

15.18.3 Such relocation shall be accomplished in a manner that will minimize the disruption to Tenant’s business.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 36

In the event of such relocation, this Lease shall continue in full force and effect without any change in the terms or conditions thereof, except that the Relocated Premises shall be substituted for the original Premises and if the Relocated Premises are smaller than the Premises, the Base Rent and Tenant’s Share shall be proportionately reduced as of the date on which Tenant surrenders the Premises; provided, that there shall be no increase to the Base Rent and Tenant’s Share if the Relocated Premises is larger than the original Premises. If Tenant shall not desire to so relocate, then within twenty (20) days after Landlord sends the Relocation Notice to Tenant, Tenant shall notify Landlord that Tenant does not desire to relocate (the “Tenant’s Response”), and either Landlord or Tenant may, but shall have no obligation to, terminate this Lease effective ninety (90) days after the date of the Relocation Notice by delivering written notice of termination to the other party within ten (10) days after Landlord’s receipt of the Tenant’s Response. If neither party timely delivers notice of termination after Landlord’s receipt of the Tenant’s Response, then the parties shall be deemed to have waived their respective rights to terminate this Lease pursuant to this Section 15.18, and Tenant shall be obligated to relocate to the Relocated Premises in accordance with the Relocation Notice and the other terms and provisions of this Section 15.18. There shall be no abatement of any Rent or other sums payable hereunder on account of Tenant’s relocation or any inconvenience or business loss caused to Tenant thereby so long as Landlord complies with all of the terms and provisions of this Section 15.18.

SECTION 15.19       CONFIDENTIALITY. Tenant and Landlord acknowledge that the terms and conditions of the Lease are to remain confidential for Landlord’s benefit and may not be disclosed by Tenant to anyone, by any manner or means, directly or indirectly, without Landlord’s prior written consent; however, Tenant may disclose the terms and conditions of the Lease if required by Law or court order, in connection with a dispute between Landlord and Tenant, and to its attorneys, accountants, employees and existing or prospective financial partners provided same are advised by Tenant of the confidential nature of such terms and conditions and agree to maintain the confidentiality thereof (in each case, prior to disclosure). Tenant shall be liable for any disclosures made in violation of this Section by Tenant or by any entity or individual to whom the terms of and conditions of the Lease were disclosed or made available by Tenant. The consent by Landlord to any disclosures shall not be deemed to be a waiver on the part of Landlord of any prohibition against any future disclosure.

SECTION 15.20       FINANCIAL STATEMENTS. Tenant warrants and represents that all of the financial statements provided to Landlord prior to the Date of Lease are true, correct and complete in all respects and fairly and accurately present the financial position of Tenant. During the Term of this Lease, Tenant shall, within fifteen (15) days after receipt of a written request therefor, deliver to Landlord, a current balance sheet and (as applicable) related statements of income, cash flow, retained earnings, and contingent liabilities showing the financial position and results of operations of Tenant (collectively referred to as “Financial Information”). The Financial Information shall be in form, scope and detail reasonably satisfactory to Landlord and shall be certified by an authorized representative of Tenant that the financial statements fairly and accurately present the financial position of Tenant. Except in connection with a proposed financing or sale of the Property and as otherwise provided herein, Landlord may request the Financial Information from Tenant no more than one (1) time in any twelve (12) month period. Notwithstanding the foregoing, Landlord may request the Financial Information upon each occurrence of any of the events described in subsections 13.1.1 through 13.1.4. Upon written request by Tenant, Landlord shall enter into a commercially reasonable confidentiality agreement covering any information that is disclosed by Tenant. Failure of Tenant to timely deliver its Financial Information in accordance with the provisions of this Section 15.20 shall be deemed to be a default under this Lease.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 37

SECTION 15.21       PROHIBITED PERSONS AND TRANSACTIONS. Tenant represents to Landlord: (i) that neither Tenant nor any person or entity that directly owns a 10% or greater equity interest in it, nor any of its officers, directors or managing members, is a person or entity with whom U.S. persons or entities are restricted from doing business under regulations of the Office of Foreign Asset Control (“OFAC”) of the Department of the Treasury (including those named on OFAC’s Specially Designated and Blocked Persons List) or under Executive Order 13224 (the “Executive Order”) signed on September 24, 2001, and entitled “Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism”, or other Laws, (ii) that Tenant’s activities do not violate the International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001, or the regulations or orders promulgated thereunder, as they may be amended from time to time, or other anti-money laundering Laws (the “Anti-Money Laundering Laws”), and (iii) that throughout the Term of this Lease Tenant shall comply with the Executive Order and with the Anti-Money Laundering Laws.

SECTION 15.22       DIGITAL RECORDS. Landlord and Tenant agree to accept a digital image of this Lease, as executed in counterparts, as a true and correct original and admissible for the purposes of state law, Federal Rule of Evidence 1002, and like statutes and regulations.

SECTION 15.23       ENTIRE AGREEMENT. This Lease contains all of the agreements of the parties hereto with respect to any matter covered or mentioned in this Lease, and no prior agreement, understanding or representation pertaining to any such matter shall be effective for any purpose. No provision of this Lease may be amended or supplemented except by an agreement in writing signed by the parties hereto or their respective successors in interest.

[SIGNATURE PAGE FOLLOWS]

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 38

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Lease effective as of the Date of Lease set forth in the Basic Lease Information.

		LANDLORD:
		GPI PLAZA TOWER, LP,
		a Texas limited partnership
		By:	Granite Properties, Inc.,
			a Delaware corporation
			its general partner
Date:	2/19/18	By:	/s/ Stephanie T. Lawrence
			Stephanie T. Lawrence
			Senior Managing Director
		TENANT:
		FLEX LEASING POWER & SERVICE LLC,
		a Delaware limited liability company
Date:	2/16/18	By:	/s/ Doug Beltzer
		Name:	Doug Beltzer
		Title:	President

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 39

EXHIBIT A

LEGAL DESCRIPTION

Parcel 1:

Lot 4, Block 3,

GREENWOOD PLAZA SOUTH FILING NO. 1,

Less and Except those portions conveyed to the State of Colorado, Department of Transportation in Warranty Deeds recorded December 20, 2001 at Reception No. B1220860 and October 15, 2003 at Reception No. B3225671, County of Arapahoe, State of Colorado.

Parcel 2:

A non-exclusive easement for a tunnel road over a portion of Lot 1, Block 4, Greenwood Plaza South Filing No.1, as set forth in instrument recorded October 25, 1984 in Book 4292 at Page 302, County of Arapahoe, State of Colorado.

Parcel 3:

A non-exclusive easement for an underpass under the South Yosemite Street Overpass, as set forth in instrument recorded November 16, 1984 in Book 4309 at Page 230, County of Arapahoe, State of Colorado.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 40

EXHIBIT B

PREMISES FLOOR PLAN

(Premises crosshatched below and not to scale)

 

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 41

EXHIBIT C

WORK LETTER

1.            Plans.

1.1       Space Plan. Landlord-and Tenant have agreed that the Premises will be improved in accordance with the plans and specifications, including without limitation the Space Plan and related Notes dated November 13, 2017, attached hereto as Schedule C-1 (herein referred to as the “Space Plan”) approved and initialed by Landlord and Tenant.

1.2       Design and Color Scheme. Within seven (7) business days after the execution of this Lease by Tenant and Landlord, Tenant’s representatives shall meet with Landlord’s space planner, at Landlord’s expense to arrive at an acceptable Building Standard design of and color scheme for the Premises (such design and color scheme, when approved by Landlord and Tenant, the “Design and Color Scheme”). For purposes hereof, the term “Building Standard” (herein so called) shall mean certain component elements utilized in the design and construction of improvements in the Building that have been pre-selected by Landlord to ensure a minimum quality and appearance throughout the Building (which elements include as per the Space Plan, but are not limited to, ceiling systems, including ceiling grid, doors, hardware, window coverings, lights and light fixtures, HVAC components, electrical and plumbing systems). The Design and Color Scheme shall, in Landlord’s sole judgment, conform to the design criteria from time to time established by Landlord for the Building. Each day thereafter that the Design and Color Scheme not approved by Tenant shall constitute one (1) day of Tenant Delay.

1.3       Compliance with Disability Acts. Tenant shall promptly provide Landlord and Landlord’s space planner and/or architect, as applicable, with all information needed to cause the construction of the Tenant’s Improvements to be completed such that Tenant, the Premises and the Tenant’s Improvements (as constructed) will be in compliance with the Disability Acts.

1.4       Construction Plans. Within seven (7) business days after approval of the Design and Color Scheme by Landlord and Tenant, Landlord’s space planner and engineer will meet to prepare construction plans (such construction plans, when approved, and all changes and amendments thereto agreed to by Landlord and Tenant in writing, the “Construction Plans”) for all of the improvements to the Premises (individually and collectively, the “Tenant’s Improvements”) described in the Space Plan, the Design and Color Scheme, including complete detail and finish drawings for partitions, doors, reflected ceiling, telephone outlets, electrical switches and outlets and Building Standard heating, ventilation and air conditioning equipment and controls. Within five (5) business days after the Construction Plans are delivered to Tenant, Tenant shall approve (which approval shall not be unreasonably withheld) or disapprove same in writing and, if disapproved, Tenant shall provide Landlord and Landlord’s space planner and engineer specific reasons for disapproval. The foregoing process shall continue until the Construction Plans are approved by Tenant; provided that if Tenant fails to respond in any five (5) business day period, Tenant shall be deemed to have approved the last submitted construction plans. Each day thereafter that the Construction Plans are not approved by Tenant shall constitute one (1) day of Tenant Delay. Tenant’s Improvements shall not include any of Tenant’s trade fixtures, equipment, furniture, furnishings, telephone and data equipment or other personal property.

1.5       Changes to Approved Plans. If any redrawing or re-drafting of any of the Space Plan, the Design and Color Scheme or the Construction Plans is necessitated by Tenant’s requested changes (all of which shall be subject to Landlord’s approval), the expense of any such re-drawing or re-drafting and the expense of any work and improvements necessitated by such re-drawing or re-drafting are collectively defined as “Change Orders” hereunder and will be charged to Tenant, and any delay will be a Tenant Delay. The cost of all (a) Change Orders; (b) any alternate selections on the Space Plan that are selected by Tenant (“Alternate Selections”), and (c) any construction management fees associated with such Change Orders or Alternate Selections, are collectively referred to as “Excess Costs,” and shall be paid by Tenant pursuant to Section 2 below.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 42

1.6       Coordination of Planners and Designers. If Tenant shall arrange for interior design services or services above the scope of work referenced in 1.4 above, whether with Landlord’s space planner or any other planner or designer, it shall be Tenant’s responsibility to cause necessary coordination of its agents’ efforts with Landlord’s agents to ensure that no delays are caused to either the planning or construction of the Tenant’s Improvements.

2.            Construction and Costs of the Tenant’s Improvements

2.1       Construction Obligation and Cost of Tenant’s Improvements. Landlord shall construct the Tenant’s Improvements at its sole cost and expense, except for Excess Costs. Tenant shall bear the cost of any Excess Costs.

2.2       Excess Costs. Landlord will, prior to the commencement of construction of Tenant’s Improvements, advise Tenant of the Excess Costs, if any. Tenant shall have three (3) business days from and after the receipt of such advice within which to approve or disapprove the Excess Costs. If Tenant fails to approve same by the expiration of the third (3rd) such business day, then Tenant shall be deemed to have approved the proposed Excess Costs. If Tenant disapproves the Excess Costs within such three (3) business day period, then Tenant shall reduce the scope of the Tenant’s Improvements such that there shall be no Excess Costs. Subject to the last sentence of this subsection, the foregoing process shall continue until the Excess Costs, if any, are accepted or deemed accepted by Tenant. Landlord and Tenant must approve (or be deemed to have approved) the Construction Plans and Excess Costs for the construction of the Tenant’s Improvements in writing prior to the commencement of construction.

2.3       Liens Arising from Excess Costs. Tenant agrees to keep the Premises free from any liens arising out of nonpayment of Excess Costs. The terms of Article 9 of the Lease shall apply to any such liens.

2.4       Construction Deposit. Tenant shall remit to Landlord an amount (the “Prepayment”) equal to the projected Excess Costs, if any, prior to commencement of construction by Landlord and commencement of work required by each change order involving Excess Costs-during the construction period. Should Tenant fail to timely make a Prepayment or pay any Excess Costs, Landlord shall have the right to suspend construction and each day of delay shall be a Tenant Delay. All sums due Landlord under this Section 2.4 shall be considered Rent under the terms of the Lease and nonpayment shall constitute a default under the Lease and entitle Landlord to any and all remedies specified in the Lease., including without limitation, Late Charges.

3.            Delays. Each delay in the completion of construction of the Tenant’s Improvements or in obtaining a certificate of occupancy or a final inspection, if required by the applicable governmental authority, caused by Tenant, Tenant’s Contractors (hereinafter defined) or any person, firm or corporation employed by Tenant or Tenant’s Contractors shall constitute a “Tenant Delay” (herein so called). In the event that the Tenant’s Improvements are not Substantially Complete (hereinafter defined) by the Commencement Date set forth in the Basic Lease Information, then the Commencement Date shall be amended to be the Adjusted Substantial Completion Date (hereinafter defined) and the Expiration Date set forth in the Basic Lease Information shall be adjusted forward by the same number of days as is the Commencement Date, so that the Term of the Lease will be the Term set forth in the Basic Lease Information. The Adjusted Substantial Completion Date shall be the date the Tenant’s Improvements are Substantially Complete, adjusted backward, however, by one day for each day of Tenant Delay, if any. The foregoing adjustments in the Commencement Date and the Expiration Date, along with the other remedies described in Section 1.2 of the Lease, shall be Tenant’s sole and exclusive remedy in the event the Tenant’s Improvements are not Substantially Complete by the Commencement Date set forth in the Basic Lease Information.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 43

4.            Substantial Completion and Punch List. The terms “Substantial Completion” and “Substantially Complete” as applicable, shall mean when the Tenant’s Improvements are sufficiently completed in accordance with the Construction Plans so that Tenant can reasonably use the Premises for the Permitted Use (as described in the Basic Lease Information). When Landlord considers the Tenant’s Improvements to be Substantially Complete, Landlord will notify Tenant and within two (2) business days thereafter, Landlord’s representative and Tenant’s representative shall conduct a walk-through of the Premises and identify any necessary touch-up work, repairs and minor completion items as are necessary for final completion of the Tenant’s Improvements (collectively, the “Punch List Items”). Neither Landlord’s representative nor Tenant’s representative shall unreasonably withhold his or her agreement on the Punch List Items. Landlord will use reasonable efforts to cause the contractor to complete all Punch List Items within thirty (30) days after Landlord’s and Tenant’s agreement thereon.

5.            Tenant’s Contractors and Vendors. If Tenant should desire to enter the Premises or authorize its agent to do so prior to the Commencement Date of the Lease, to perform approved work not requested of the Landlord, or to install furniture, fixtures and equipment and data cabling/phones, Landlord shall permit such entry upon two (2) weeks prior to the anticipated Commencement Date, and subject to, the following terms and conditions:

(a)       Tenant shall use only such contractors and or vendors which Landlord shall approve in its reasonable discretion and Landlord shall have approved the plans to be utilized by Tenant, which approval will not be unreasonably withheld; and

(b)       Tenant, its contractors, vendors, workmen, mechanics, engineers, space planners or such others as may enter the Premises (collectively, “Tenant’s Contractors”), shall work in harmony with and shall not in any way disturb or interfere with Landlord’s space planners, architects, engineers, contractors, workmen, mechanics or other agents or independent contractors in the performance of their work (collectively, “Landlord’s Contractors”) or other tenants in the Building, it being understood and agreed that if entry of Tenant or Tenant’s Contractors would cause, has caused or is causing a material disturbance to Landlord or Landlord’s Contractors or other tenants, then Landlord may, with notice, refuse admittance to Tenant or Tenant’s Contractors causing such disturbance; and

(c)       Tenant, Tenant’s Contractors and other agents shall provide Landlord sufficient evidence that each is covered under Worker’s Compensation, and Commercial General Liability Insurance of $5,000,000 per occurrence for Tenant’s Contractors which are involved in the actual construction of improvements or the installation of fixtures within the Premises or Worker’s Compensation and Commercial General Liability Insurance of $2,000,000 per occurrence for Tenant’s Contractors which are involved in the installation of furnishings and equipment, including, without limitation, cabling, carpeting, and window treatments, in the Premises, together with such property insurance as Landlord may reasonably request for its protection. General Liability Insurance shall include coverage for ongoing and completed construction. Tenant’s Contractors will name Landlord and Property Manager as additional insureds on commercial general liability and property insurance policies. All liability policies will be primary and non-contributory and contain waivers of subrogation in favor of Landlord. Workers Compensation policy shall contain a waiver of subrogation in favor of Landlord.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 44

LANDLORD SHALL NOT BE LIABLE FOR ANY INJURY, LOSS OR DAMAGE TO ANY OF TENANT’S INSTALLATIONS OR DECORATIONS MADE PRIOR TO THE COMMENCEMENT DATE AND NOT INSTALLED BY LANDLORD. TENANT SHALL INDEMNIFY AND HOLD HARMLESS LANDLORD AND LANDLORD’S CONTRACTORS FROM AND AGAINST ANY AND ALL COSTS, EXPENSES, CLAIMS, LIABILITIES AND CAUSES OF ACTION ARISING OUT OF OR IN CONNECTION WITH WORK PERFORMED IN THE PREMISES BY OR ON BEHALF OF TENANT (BUT EXCLUDING WORK PERFORMED BY LANDLORD OR LANDLORD’S CONTRACTORS). LANDLORD IS NOT RESPONSIBLE FOR THE FUNCTION AND MAINTENANCE OF THE TENANT’S IMPROVEMENTS WHICH ARE DIFFERENT FROM THE BUILDING STANDARD IMPROVEMENTS AT THE PROPERTY OR IMPROVEMENTS, EQUIPMENT, CABINETS OR FIXTURES NOT INSTALLED BY LANDLORD. SUCH ENTRY BY TENANT AND TENANT’S CONTRACTORS PURSUANT TO THIS SECTION 5 SHALL BE DEEMED TO BE UNDER ALL OF THE TERMS, COVENANTS, PROVISIONS AND CONDITIONS OF THE LEASE EXCEPT THE COVENANT TO PAY RENT.

6.            Construction Representatives. Landlord’s and Tenant’s representatives for coordination of construction and approval of change orders will be as follows, provided that either party may change its representative upon written notice to the other:

LANDLORD’S REPRESENTATIVE:
NAME	Richard Vannatta, Granite Properties
ADDRESS	6400 South Fiddlers Green Circle, Suite 500
	Greenwood Village, CO 80111
PHONE	303-804-4715
E-MAIL:	rvannatta@graniteprop.com
TENANT’S REPRESENTATIVE:
NAME	Doug Baltzer
ADDRESS	6400 S. Fiddler’s Green Circle, Suite 450
	Greenwood Village, CO 80111
PHONE	(720)573-7664
E-MAIL:	Doug.baltzer@flexleasingpower.com

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 45

Schedule C-1

Space Plan

 

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 46

 

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 47

EXHIBIT D

RULES AND REGULATIONS

1.       The sidewalks, walks, plaza entries, corridors, concourses, ramps, staircases, escalators and elevators of the Property shall not be obstructed or used by Tenant, or the employees, agents, servants, visitors or licensees of Tenant for any purpose other than pedestrian ingress and egress to and from the Premises. No bicycle or motorcycle shall be brought into the Building or kept on the Premises without the prior written consent of Landlord.

2.       No freight, furniture or bulky matter of any description will be received into the Property or carried into the elevators except in such a manner, during such hours and using such elevators and passageways as may be approved by Landlord, and then only upon having been scheduled in advance. Any hand trucks, carryalls, or similar equipment used for the delivery or receipt of merchandise or equipment shall be equipped with rubber tires, side guards and such other safeguards as Landlord shall require.

3.       Landlord shall have the right to prescribe the weight, position and manner of installation of safes or other heavy equipment which shall, if considered necessary by Landlord, be installed in a manner which shall insure satisfactory weight distribution. All damage done to the Property by reason of a safe or any other article of Tenant’s office equipment being on the Premises shall be repaired at the expense of Tenant. The time, routing and manner of moving safes or other heavy equipment shall be subject to prior approval by Landlord.

4.       Only persons authorized by Landlord will be permitted to furnish drinking water, barbering, shoe shining, janitorial services, and other similar services and concessions to Tenant, and only at hours and in compliance with security requirements established by Landlord.

5.       Tenant, or the employees, agents, servants, visitors or licensees of Tenant shall not at any time leave, place or discard any rubbish, paper, articles or objects of any kind whatsoever outside the doors of the Premises or in the corridors, stairways or passageways of the Property.

6.       Landlord shall have the right to prohibit any advertising by Tenant which includes the picture, name or address of the Property and which, in Landlord’s opinion, tends to impair the reputation of the Property or its desirability for offices, and, upon written notice from Landlord, Tenant will refrain from or discontinue such advertising.

7.       Tenant shall not place, or cause or allow to be placed, any sign, placard, picture, advertisement, notice or lettering whatsoever, in, about or on the exterior of the Premises, Building or Property except in and at such places as may be designated by Landlord and consented to by Landlord in writing. Any such sign, placard, advertisement, picture, notice or lettering so placed may be removed by Landlord without notice to and at the expense of Tenant. All lettering and graphics on corridor doors shall conform to the Building’s standard prescribed by Landlord. No trademark shall be displayed in any event.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 48

8.       Canvassing, soliciting or peddling in the Building or Property is prohibited, and Tenant shall cooperate to prevent same.

9.       Landlord shall have the right to exclude any person from the Property other than during customary business hours as set forth in the Lease, and any person in the Property will be subject to identification by employees and agents of Landlord. All persons in or entering the Property shall be required to comply with the security policies of the Property. If Tenant desires any additional security service for the Premises, Tenant shall have the right (with the advance written consent of Landlord) to obtain such additional service at Tenant’s sole cost and expense. Tenant shall keep doors to unattended areas locked and shall otherwise exercise reasonable precautions to protect property from theft, loss or damage. Landlord shall not be responsible for the theft, loss or damage of any property or for any error with regard to the exclusion from or admission to the Property of any person. In case of invasion, mob, riot or public excitement, Landlord reserves the right to prevent access to the Property during the continuance of same by closing the doors or taking other measures for the safety of the tenants and protection of the Property and property or persons therein.

10.     Only workmen employed, designated or approved by Landlord may be employed for repairs, installations, alterations, painting, material moving and other similar work that may be done in or on the Premises. Tenant will refer all contractors, contractor’s representatives and installation technicians rendering any service on or to the Premises for Tenant to Landlord for Landlord’s approval and supervision before performance of any contractual service. This provision shall apply to all work performed in the Building including installation of telephones, electrical devices and attachments and installations of any nature affecting floors, walls, woodwork, trim, windows, ceilings equipment or any other physical portion of the Building.

11.     Tenant shall not do any cooking (other than warming in a microwave oven) or conduct any restaurant, luncheonette, automat or cafeteria for the sale or service of food or beverages to its employees or to others. Tenant may, however, operate a coffee bar by and for its employees. Tenant shall not install or permit to be installed any vending machines in the Premises.

12.     Tenant shall not bring or permit to be brought or kept in or on the Premises or the Property any inflammable, combustible, corrosive, caustic, poisonous, or explosive substance, or cause or permit any odors to permeate in or emanate from the Premises, or permit or suffer the Premises to be occupied or used in a manner offensive or objectionable to Landlord or other occupants of the Property by reason of light, radiation, magnetism, noise, odors or vibrations, or interfere in any way with other tenants or those having business in the Property.

13.     Except for the installation of pictures and standard office equipment and decoration within the Premises, Tenant shall not mark, paint, drill into, or in any way deface any part of the Property or the Premises. No boring, driving of nails or screws, cutting or stringing of wires shall be permitted, except as otherwise provided herein or with the prior written consent of Landlord, and as Landlord may direct. Tenant shall not install any resilient tile or similar floor covering in the Premises except with the prior approval of Landlord. The use of cement or other similar adhesive material is expressly prohibited.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 49

14.       No additional locks or bolts of any kind shall be placed on any door in the Property or the Premises and no lock on any door therein shall be changed or altered in any respect. Landlord shall furnish two keys for each lock on exterior doors to the Premises and shall, at Tenant’s request and at Tenant’s expense, provide additional duplicate keys. Tenant shall not make duplicate keys. All keys shall be returned to Landlord upon the termination of this Lease, and Tenant shall give to Landlord explanations of the combinations of all safes, vaults and combination locks remaining with the Premises. Landlord may at all times keep a pass key to the Premises. All entrance doors to the Premises shall be left closed at all times and left locked when the Premises are not in use. Landlord agrees to furnish to Tenant, at Landlord’s expense, two (2) CardKeys for access to the Building during such times as the Building is not open to the public. Upon written request from Tenant, or other parties authorized by Tenant, Landlord will furnish additional CardKeys to Tenant at Tenant’s expense. Should any CardKeys be lost or stolen, Tenant will immediately notify Landlord and Landlord will issue replacement CardKeys with a different computer code number. Such replacement CardKeys will be at Tenant’s expense.

15.       Tenant shall give immediate notice to Landlord in case of theft, unauthorized solicitation or accident in the Premises or in the Property or of defects therein or in any fixtures or equipment, or of any known emergency in the Property.

16.       Tenant shall not use the Premises or permit the Premises to be used for photographic or other forms of reproductions, except in connection with its own business and not as a service for others without Landlord’s prior permission.

17.       Tenant shall not use or permit any portion of the Premises to be used as an office for a public word processor, a printer, the sale of liquor or tobacco, a barber, a hair salon, a manicure shop, an employment bureau, a labor union office, a doctor’s or dentist’s office, a dance or music studio, any type of school, or for any use other than those specifically granted in this Lease.

18.       Tenant shall not advertise for laborers giving the Premises as an address, nor pay such laborers at a location on the Property.

19.       The requirements of Tenant will be attended to only after notice to Landlord at the Building or at such other address as may be designated by Landlord in the Lease. Employees of Landlord shall not perform any work or do anything outside of their regular duties, unless under special instructions from the office of Landlord.

20.       Tenant shall not place a load upon any floor of the Premises which exceeds the load per square foot which such floor was designed to carry and which is allowed by law. Business machines and mechanical and electrical equipment belonging to Tenant which cause noise, vibration, electrical or magnetic interference, or any other nuisance that may be transmitted to the structure or other portions of the Property or to the Premises to such a degree as to be objectionable to Landlord or which interfere with the use or enjoyment by other tenants of their premises or the public portions of the Property shall be placed and maintained by Tenant, at Tenant’s expense in settings of cork, rubber, spring type, or other vibration eliminators sufficient to eliminate noise or vibration.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

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21.      No awning, draperies, shutters or other interior or exterior window coverings that are visible from the exterior of the Building or from the exterior of the Premises within the Building may be installed by Tenant.

22.     Tenant shall not place, install or operate within the Premises or any other part of the Property any engine, stove, or machinery, or conduct mechanical operations therein, without the written consent of Landlord.

23.      No portion of the Premises or any part of the Property shall at any time be used or occupied as sleeping or lodging quarters.

24.      Tenant shall at all times keep the Premises neat and orderly.

25.      The toilet rooms, urinals, wash bowls and other apparatus shall not be used for any purpose other than that for which they were constructed and no foreign substance of any kind whatsoever shall be thrown therein and the expense of any breakage, stoppage or damage resulting from the violation of this rule shall be borne by the tenant who or whose employees or invitees shall have caused it.

26.      Landlord reserves the right to exclude or expel from the Property any person who, in the judgment of Landlord, is intoxicated or under the influence of liquor or drugs, or who shall in any manner do any act in violation of any of the Rules and Regulations of the Property.

27.      Tenant shall use no other method of heating or cooling than that supplied by Landlord.

28.     Tenant and its agents, employees and invitees shall observe and comply with the driving and parking signs and markers on the Property grounds and surrounding areas.

29.      Except for service animals, no animals, birds or fish shall be brought to or kept in or about the Property.

30.      Smoking of any kind (cigarette, pipe, etc.) is strictly prohibited within the Premises, Building, Common Areas (to include, but not limited to, lobbies, corridors, restrooms, elevators, stairwells, and the Garage) and any other areas not specifically designated as a Smoking Area by Landlord. Tenant hereby agrees that violation of this smoking prohibition by Tenant, Tenant’s employees, agents, visitors or invitees (individually and collectively, “Tenant Party”) shall be subject to a fine in the amount of One Hundred and No/100 Dollars ($100.00.) for the first violation by a Tenant Party and Two Hundred Fifty and No/100 Dollars ($250.00) for each subsequent violation by a Tenant Party, whether or not the violation involves the same Tenant Party or a different Tenant Party. Use of any electronic cigarette, electronic vaping device, personal vaporizer (PV), digital vapor device or electronic nicotine delivery system (ENDS) is prohibited in the Building or around the entries to the Building. Users of these devices should be directed to the designated smoking area. Repeated violations of this rule shall, at Landlord’s discretion, constitute a default under this Lease.

31.      Landlord shall have the right to install such devices within the Premises and elsewhere in the Building and on the Property as Landlord deems advisable to decrease consumption of utilities and waste on the Property, and Tenant shall cooperate with Landlord in the installation and use thereof. Landlord may establish such recycling programs as it deems advisable in its sole discretion, and guidelines for the same. Landlord may forbid or restrict the use of certain supplies by Tenant if alternatives are readily available at a comparable cost which are more readily recyclable or otherwise reduce the carbon footprint of the Property. Tenant shall ensure that all occupants of the Premises diligently observe the recycling program and the guidelines for the same as well as reasonable restrictions on the use of certain supplies. Landlord reserves the right to impose penalties on Tenant for the repeated failure of any occupant of the Premises to participate in the recycling program and observe the guidelines for the same or the repeated use of restricted supplies.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 51

EXHIBIT E

ACCEPTANCE OF PREMISES MEMORANDUM

This Acceptance of Premises Memorandum is being executed pursuant to that certain Lease Agreement (the “Lease”) dated the                      day of                                    , 20             between                                                           (“Landlord”) and                                                               (“Tenant”), pursuant to which Landlord leased to Tenant and Tenant leased from Landlord certain space in the office building located at                                                                               (the “Building”). Landlord and Tenant hereby agree that:

1. Except for the Punch List Items (as shown on the attached Punch List), Landlord has fully completed the construction work required under the terms of the Lease and the Work Letter attached thereto.

2. The Premises are tenantable, Landlord has no further obligation for construction (except with respect to Punch List Items) and Tenant acknowledges that the Building, the Premises and, except for the Punch List Items, the Tenant’s Improvements are satisfactory in all respects, and are suitable for the Permitted Use.

3. The Commencement Date of the Lease is the            day of                                          , 20      . If the date the Commencement Date set forth in the Base Lease Information is different from the date set forth in the preceding sentence, then the Basic Lease Information is hereby amended to be the Commencement Date set forth in the preceding sentence.

4. The Expiration Date of the Lease is the            day of                                          , 20      . If the date set forth in the Base Information Page of the Lease is different from the date set forth in the preceding sentence, then the Expiration Date set forth in the Basic Lease Information is hereby amended to be the Expiration Date set forth in the preceding sentence.

5. Tenant acknowledges receipt of the current Rules and Regulations for the Building.

6. All capitalized terms not defined herein shall have the meaning assigned to them in the Lease.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 52

Agreed and Executed this                 day of                          , 20     .

LANDLORD:
By:	, its
By:
Name:
Title:
TENANT:
By:
Name:
Title:

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 53

EXHIBIT F

PARKING AGREEMENT

1.          Throughout the Term of this Lease, Tenant shall lease from Landlord twenty-three (23) parking permits in the Garage. Of these, two (2) shall be reserved parking permits and twenty-one (21) shall be unreserved parking permits, and each of which parking permits shall be leased for the entirety of the Term.

2.          For each such parking permit. Tenant shall pay the Landlord or its agent, the prevailing market rate posted by Landlord from time to time during the term of the Lease (the “Parking Rent”). The current monthly rate is $75.00 per month plus taxes, if applicable, for each reserved parking permit and $55.00 per month for each unreserved parking permit plus taxes, if applicable, in the Garage. Notwithstanding the foregoing, Landlord agrees not to demand or collect from Tenant the Parking Rent for the parking permits for the first twenty-four (24) months after the Commencement Date (the “Parking Abatement Period”). If the Parking Abatement Period ends on a day other than the last day of a calendar month, Parking Rent for the month in which the Parking Abatement Period ends shall be prorated based on the number of days after the Parking Abatement Period in such month and the number of days in such month. If a default occurs at any time during the Term, the abated Parking Rent for the Parking Abatement Period will be immediately due and payable.

3.          The Parking Rent shall be payable in accordance with the policies established by Landlord (or its agent) from time to time for payment of Parking Rent in the Garage. Tenant shall indemnify and hold harmless Landlord from and against all claims, losses, liabilities, damages, costs and expenses (including, but not limited to, attorneys’ fees and court costs) arising or alleged to arise out of Tenant’s use of any such parking spaces. Tenant shall have no further rights to (a) any parking permit not taken at the beginning of the original Term or (b) any parking permit taken at the beginning of the original Term and thereafter released by Tenant with Landlord’s consent or terminated by Landlord for failure to pay Parking Rent or to comply with the other terms and conditions for the leasing of such parking permit imposed by Landlord. Upon the termination of this Lease, Tenant’s rights to the parking permits then being leased to Tenant hereunder shall terminate. In the event any of the above parking spaces are or become unavailable at any time or from time to time throughout the Term, whether due to casualty or any other cause, the Lease shall continue in full force and effect, and Tenant’s sole remedy shall be an abatement of Parking Rent for those parking spaces rendered unavailable, which abatement shall continue until such time as said parking spaces, or substitutes therefor, again become available, it being expressly agreed and understood that Landlord shall have no duty to provide substitute parking spaces for those spaces rendered unavailable; provided, however, that Landlord agrees to use reasonable efforts to restore the Garage to the condition immediately preceding such damage as soon as reasonably practicable.

4.           Tenant agrees to comply with all reasonable rules and regulations now or hereafter established by Landlord relating to the use of the Garage by contract parking patrons. A condition of any parking shall be compliance by the parking patron with Garage rules and regulations, including any sticker or other identification system established by Landlord. The following rules and regulations are in effect until notice is given to Tenant of any change. Landlord may refuse to permit any person who violates the rules to park in the Garage, and any violation of the rules shall subject the car to removal.

RULES AND REGULATIONS

1.         Cars must be parked entirely within the stall lines painted on the floor.

2.         All directional signs and arrows must be observed.

3.          The speed limit shall be 5 miles per hour.

4.         Parking is prohibited:

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 54

 (a)       in areas not striped for parking

 (b)       in aisles

 (c)       where “No Parking” signs are posted

 (d)       in cross hatched areas

 (e)       in such other areas as may be designated by Landlord or Landlord’s agent(s).

 (f)       by tenants in Visitor, Delivery, Handicapped (except for handicapped tenants) or other specially designated parking areas

5.Parking stickers or any other device or form of identification supplied by Landlord shall remain the property of the Landlord and shall not be transferable. There will be a replacement charge payable by Tenant equal to the amount posted from time to time by Landlord for loss of any magnetic parking card or parking sticker.

6.Garage managers or attendants are not authorized to make or allow any exceptions to these Rules and Regulations.

7.Every parker is required to park and lock his own car. All responsibility for damage to cars or persons is assumed by the parker.

8.      No intermediate or full-size cars shall be parked in parking spaces limited to compact cars.

9.     All motorcycles/motorized bicycles are to be parked in the designated motorcycle area, and will be removed from the property if not in the designated area.

Failure to (a) promptly pay the Parking Rent required hereunder within five (5) business days after the date when due, no notice of any such failure being required, or (b) persistent failure on the part of Tenant or Tenant’s designated parkers to observe the rules and regulations above shall give Landlord the right to terminate Tenant’s right to use the Garage. No such termination shall create any liability on Landlord or be deemed to interfere with Tenant’s right to quiet possession of the Premises.

Tenant Name: Flex Leasing Power & Service LLC

Building Name: Plaza Tower One

 55

EX-10.10

Exhibit 10.10

FIRST AMENDMENT TO OFFICE LEASE

THIS FIRST AMENDMENT TO OFFICE LEASE (“First Amendment”) is entered into effective as of August 29, 2019 (the “Effective Date”), by and between GPI PLAZA TOWER, LP, a Texas limited partnership (“Landlord”), and FLEX LEASING POWER & SERVICE, LLC, a Delaware limited liability company (“Tenant”).

RECITALS

A.           Landlord and Tenant entered into that certain Office Lease dated February 19, 2018 (the “Lease”), for Suite 900 containing approximately 7,972 rentable square feet (the “Original Premises”), located on the ninth (9^th) floor of the office building known as Plaza Tower One located at 6400 South Fiddler’s Green Circle, Greenwood Village, Colorado 80111 (the “Building”).

B.            The parties desire to amend the Lease as more particularly set forth in this First Amendment.

AGREEMENT

NOW, THEREFORE, for and in consideration of the facts mentioned above, the mutual promises set forth below and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto agree as follows:

1.            Capitalized Terms; Recitals. All capitalized terms used in this First Amendment which are not defined herein shall have their meanings in the Lease. The recitals are incorporated into this First Amendment as though set forth in full in it.

2.            Expansion Premises. Commencing on the Expansion Commencement Date (as defined in Exhibit B attached hereto), Landlord hereby leases to Tenant and Tenant leases from Landlord approximately 1,978 rentable square feet on the first floor of the Building, known as Suite 910, as shown on Exhibit A attached hereto and incorporated herein by this reference (the “Expansion Premises”), for a term that is coterminous with the Term, subject to all of the terms and provisions of the Lease, as amended by this First Amendment. Landlord will deliver the Expansion Premises to Tenant in accordance with Exhibit B attached hereto and incorporated herein by this reference (the “Work Letter”). Landlord estimates that the delivery and commencement date for the Expansion Premises will be December 1, 2019; provided, however, that the actual “Expansion Commencement Date” will be determined pursuant to the Work Letter.

3.            Premises. As of the Expansion Commencement Date, (a) the Original Premises and the Expansion Premises will collectively constitute the “Premises” under the Lease, (b) the Premises Rentable Area shall consist of a total of approximately 9,950 rentable square feet, (c) all references in the Lease to the “Premises” will be deemed to refer, collectively, to the Original Premises and the Expansion Premises, and (d) all references in the Lease to “Exhibit B” shall be deemed to include Exhibit A attached to this First Amendment.

4.            Basic Rent. Landlord agrees not to demand or collect from Tenant Basic Monthly Rent for the Expansion Premises the first four (4) months following the Expansion Commencement Date (the “Expansion Abatement Period”). If the Expansion Abatement Period ends on a day other than the first day of a calendar month, Basic Monthly Rent for the Expansion Premises for the month in which the Expansion Abatement Period ends shall be prorated based on the number of days after the Expansion Abatement Period in such month and the number of days in such month. If a default beyond any applicable cure period provided for herein occurs at any time during the Term and Landlord seeks to terminate the Lease as a result of such default, the abated Basic Monthly Rent for the Expansion Abatement Period will be immediately due and payable. The first day following the expiration of the Expansion Abatement Period shall be the “Expansion Premises Rent Commencement Date.” Prior to the Expansion Premises Rent Commencement Date, Tenant shall continue to pay Basic Rent for the Original Premises in accordance with the terms of the Lease. Notwithstanding anything to the contrary contained in the Lease, commencing on the Expansion Premises Rent Commencement Date, and continuing through the Term, Tenant shall pay monthly installments of Basic Rent for the entire Premises (on the same terms and conditions as set forth in the Lease, as modified herein) as set forth in the table below:

Rental Period	Annual Rate per Square Foot of Premises Rentable Area		Basic Monthly Rent
From the Expansion Premises Rent Commencement Date through September 30, 2020	$	31.78	$	26,350.92
October 1, 2020 – September30, 2021	$	32.57	$	27,005.96
October 1, 2021 – September 30, 2022	$	33.38	$	27,677.58
October 1, 2022 – September 30, 2023	$	34.22	$	28,374.08

5.            Tenant’s Share. Effective as of the Expansion Commencement Date, Tenant’s Share, as defined in Section 6 of the Basic Lease Information of the Lease, is hereby amended to be “2.17%”.

6.            Base Year. The Operating Base Year and Tax Base for the Expansion Premises shall be the calendar year 2020. The Operating Base Year and Tax Base for the Original Premises shall continue to be as set forth in the Lease.

7.            Condition of Expansion Premises. Landlord shall construct the Expansion Improvements (as defined in the Work Letter) pursuant to the terms and conditions of the Work Letter. The Work Letter shall be deemed effective upon both parties’ execution of this First Amendment and shall not need to be separately executed by the parties hereto. Other than as set forth in the Work Letter attached as Exhibit B hereto, Landlord shall have no obligation for the completion or remodeling of the Original Premises or the Expansion Premises, and Tenant shall accept the Expansion Premises in their “as is” condition as of the Expansion Commencement Date.

2 

8.            Parking. As of the Expansion Commencement Date, Tenant shall lease from Landlord an additional six (6) unreserved parking permits in the Garage (for a total of twenty-seven (27) unreserved parking permits), pursuant to the terms of Exhibit F and the Lease, Landlord agrees not to demand or collect from Tenant Parking Rent for such additional parking permits during the existing Parking Abatement Period (which, for the avoidance of doubt, expires by its terms on April 30, 2020).

9.            Additional Security Deposit. As of the Effective Date, Landlord and Tenant acknowledge and agree that Landlord holds a Security Deposit in the amount of $22,732.29 pursuant to Section 13 of the Basic Lease Information and Article 3 of the Lease. Prior to the Expansion Commencement Date, Tenant shall deliver to Landlord the sum of $5,641.79 as an additional security deposit to be held by Landlord under the Lease. As of such additional deposit, Section 13 of the Basic Lease Information is amended to provide that the Security Deposit under the Lease is $28,374.08.

10.          Broker. Tenant represents and warrants to Landlord that no broker or agent negotiated or was instrumental in the negotiation or consummation of this First Amendment other than the Brokers (as defined in Section 17 of the Basic Lease Information, except that Katy Sheehy is hereby amended to be Abby Pattillo). Landlord and Tenant each agree to indemnify and hold harmless the other party against any loss, expense, cost or liability incurred by such party as a result of any claims by any brokers acting on behalf of, or claiming to be acting on behalf of, the indemnifying party other than the Brokers.

11.          No Further Modifications. Except as otherwise set forth in this First Amendment, the terms and conditions of the Lease remain unchanged and in full force and effect. In the event of any conflict between the terms of the Lease and the terms of this First Amendment, the terms of this First Amendment shall govern and control.

12.          Headings. The paragraph headings that appear in this First Amendment are for purposes of convenience of reference only and are not in any sense to be construed as modifying the substance of the paragraphs in which they appear.

13.          Severability. In the event that any one or more of the provisions of this First Amendment shall for any reason be held to be invalid or unenforceable, the remaining provisions of this First Amendment shall be unimpaired, and shall remain in full force and effect and be binding upon the parties hereto.

14.          Counterparts. This First Amendment may be executed in counterparts, each of which shall be deemed an original, and all of which when executed and delivered shall together constitute one and the same instrument.

15.          Authority. Each party represents that the person executing this First Amendment for such party is acting on behalf of such party and is duly authorized to execute this First Amendment for such party.

16.          Entire Agreement. This First Amendment constitutes the entire and complete agreement of the parties with respect to the subject matter hereof, and supersedes all prior or contemporaneous agreements, statements, promises, understandings, arrangements, and commitments.

17.          Governing Law. This First Amendment shall be governed by and construed in accordance with the internal laws and decisions of the state in which the Premises are located.

18.          Binding Effect. This First Amendment becomes effective as of the Effective Date only upon execution by both Landlord and Tenant.

[Signature Page Follows]

3 

IN WITNESS WHEREOF, the parties hereto have executed this First Amendment to Office Lease as of the date first written above.

LANDLORD:			TENANT:
GPI PLAZA TOWER, LP, a Texas limited			FLEX LEASING POWER & SERVICE, LLC,
partnership			a Delaware limited liability company
By:	Granite Properties, Inc.,
	a Delaware corporation		By:	/s/ Doug Baltzer
	Its general partner		Name:	Doug Baltzer
			Title:	Chief Commercial Officer
	By:	/s/ Stephanie T. Lawrence
		Stephanie T. Lawrence
		Senior Managing Director

4 

EXHIBIT A

DEPICTION OF EXPANSION PREMISES

 

Exhibit A

EXHIBIT B

WORK LETTER

1. Plans.

1.1          Space Plan. Landlord and Tenant have agreed that the Expansion Premises will be improved in accordance with the plans and specifications, including without limitation the Space Plan and related Notes dated April 18, 2019, attached hereto as Schedule B-1 (herein referred to as the “Space Plan”) approved and initialed by Landlord and Tenant.

1.2          Design and Color Scheme. Within seven (7) business days after the Effective Date of the First Amendment, Tenant’s representatives shall meet with Landlord’s space planner, at Tenant’s expense (provided that such expense may be included in the Expansion Allowance) to arrive at an acceptable design of and color scheme for the Expansion Premises (such design and color scheme, when approved by Landlord and Tenant, the “Design and Color Scheme”) and an acceptable product specification list for all materials, products, finishes and work that Tenant desires to use that are not Building Standard (such product specification list, when approved by Landlord and Tenant, the “Above Standard Product Specification List”). The Design and Color Scheme shall, in Landlord’s sole judgment, conform to the design criteria from time to time established by Landlord for the Building, and the Above Standard Product Specification List shall be acceptable to Landlord in all respects. Delays in construction of the Expansion Improvements (hereinafter defined) caused by Tenant’s specification of a material, product, finish or type of work included in the Above Standard Product Specification List shall constitute a Tenant Delay (hereinafter defined). Each day thereafter that the Design and Color Scheme and Above Standard Product Specification List are not approved by Tenant shall constitute one (1) day of Tenant Delay.

1.3          Compliance with Disability Acts. Tenant shall promptly provide Landlord and Landlord’s space planner and/or architect, as applicable, with all information needed to cause the construction of the Expansion Improvements to be completed such that Tenant, the Expansion Premises and the Expansion Improvements (as constructed) will be in compliance with the Disability Acts.

1.4          Construction Plans. On or before seven (7) business days after approval of both the Design and Color Scheme and the Above Standard Product Specification List by Landlord and Tenant, Landlord’s space planner and engineer will meet to prepare construction plans (such construction plans, when approved, and all changes and amendments thereto agreed to by Landlord and Tenant in writing, the “Construction Plans”) for all of the improvements to the Expansion Premises (individually and collectively, the “Expansion Improvements”) described in the Space Plan, the Design and Color Scheme and the Above Standard Product Specification List, including complete detail and finish drawings for partitions, doors, reflected ceiling, telephone outlets, electrical switches and outlets and Building Standard heating, ventilation and air conditioning equipment and controls. Within five (5) business days after the Construction Plans are delivered to Tenant, Tenant shall approve (which approval shall not be unreasonably withheld) or disapprove same in writing and, if disapproved, Tenant shall provide Landlord and Landlord’s space planner and engineer specific reasons for disapproval. If Tenant disapproves of any aspect of the Construction Plans, Landlord shall cause Landlord’s space planner and engineer to revise the applicable portions of the Construction Plans to address Tenants objections, and shall deliver such revised documentation to Tenant. The foregoing process shall continue until the Construction Plans are approved by Tenant; provided that if Tenant fails to respond in any five (5) business day period, Tenant shall be deemed to have approved the last submitted construction plans. Each day thereafter that the Construction Plans are not approved by Tenant shall constitute one (1) day of Tenant Delay. The Expansion Improvements shall not include any of Tenant’s trade fixtures, equipment, furniture, furnishings, telephone and date equipment or other personal property.

Exhibit B, Page 1

1.5          Changes to Approved Plans. If any redrawing or re-drafting of either the Space Plan, the Design and Color Scheme, the Above Standard Product Specification List or the Construction Plans is necessitated by Tenant’s requested changes (all of which shall be subject to Landlord’s approval), the expense of any such re-drawing or re-drafting required in connection therewith and the expense of any work and improvements necessitated by such re-drawing or re-drafting will be charged to Tenant.

1.6          Coordination of Planners and Designers. If Tenant shall arrange for interior design services or services above the scope of work referenced in 1.4 above, whether with Landlord’s space planner or any other planner or designer, it shall be Tenant’s responsibility to cause necessary coordination of its agents’ efforts with Landlord’s agents to ensure that no delays are caused to either the planning or construction of the Expansion Improvements.

2.            Construction and Costs of the Expansion Improvements

2.1            Construction Obligation and Expansion Allowance. Landlord shall deliver, and Tenant shall accept, the Expansion Premises in “as is” condition subject to construction of the Expansion Improvements. Landlord agrees to obtain no less than three (3) different competitive bids to construct the Expansion Improvements, at Tenant’s cost and expense; provided, however, Landlord shall provide Tenant with an allowance up to $30.00 per square foot of rentable area of the Expansion Premises (the “Expansion Allowance”) which allowance shall be used solely for the Expansion Improvements and which allowance shall be disbursed by Landlord, from time to time, for payment of (in the following priority) (i) the contract sum required to be paid to the general contractor engaged to construct Expansion Improvements (the “Contract Sum”), (ii) the fees of the preparer of the Construction Plans and (iii) payment of the Construction Management Fee (hereinafter defined) (the foregoing costs hereinafter collectively, the “Permitted Costs”). Upon completion of the Expansion Improvements and in consideration of Landlord’s administering the construction of the Expansion Improvements, Tenant agrees to pay Landlord a fee equal to three percent (3%) of the Contract Sum (the “Construction Management Fee”). Any unused portion of the Expansion Allowance must be utilized within the first twelve (12) months after the Expansion Premises Commencement Date.

Exhibit B, Page 2

2.2          Excess Costs. If the sum of the Permitted Costs exceeds the Expansion Allowance, then Tenant shall pay all such excess costs (the “Excess Costs”), provided, however, Landlord will, prior to the commencement of construction of the Expansion Improvements, advise Tenant of the Excess Costs, if any, and the Contract Sum. Tenant shall have three (3) business days from and after the receipt of such advice within which to approve or disapprove the Contract Sum and the Excess Costs. If Tenant fails to approve same by the expiration of the third (3rd) such business day, then Tenant shall be deemed to have approved the proposed Contract Sum and Excess Costs. If Tenant disapproves the Contract Sum and Excess Costs within such three (3) business day period, then Tenant shall reduce the scope of the Expansion Improvements such that there shall be no Excess Costs. Subject to the last sentence of this subsection, the foregoing process shall continue until a Contract Sum and resulting Excess Costs, if any, are accepted or deemed accepted by Tenant. Landlord and Tenant must approve (or be deemed to have approved) the Contract Sum for the construction of the Expansion Improvements in writing prior to the commencement of construction.

2.3          Liens Arising from Excess Costs. Tenant agrees to keep the Original Premises and the Expansion Premises free from any liens arising out of nonpayment of Excess Costs. The terms of Article 9 of the Lease shall apply to any such liens.

2.4          Construction Deposit. Tenant shall remit to Landlord an amount (the “Prepayment”) equal to the projected Excess Costs, if any, prior to commencement of construction by Landlord and commencement of work required by each change order involving Excess Costs-during the construction period. Should Tenant fail to timely make a Prepayment, Landlord shall have the right to suspend construction and each day of delay shall be a Tenant Delay. All sums due Landlord under this Section 2.4 shall be considered Rent under the terms of the Lease and nonpayment shall constitute a default under the Lease and entitle Landlord to any and all remedies specified in the Lease, including without limitation, Late Charges.

3.            Delays. Each delay in the completion of construction of the Expansion Improvements or in obtaining a certificate of occupancy or a final inspection, if required by the applicable governmental authority, caused by Tenant, Tenant’s Contractors (hereinafter defined) or any person, firm or corporation employed by Tenant or Tenant’s Contractors shall constitute a ‘Tenant Delay” (herein so called).

4.            Expansion Premises Commencement Date. Landlord estimates that the delivery of the Expansion Premises to Tenant shall occur on December 1, 2019; provided, however, that the actual “Expansion Premises Commencement Date” shall be the date the Expansion Improvements in the Expansion Premises are Substantially Complete (as defined below), adjusted backward, however, by one day for each day of Tenant Delays, if any.

5.            Substantial Completion and Punch List. The terms “Substantial Completion” and “Substantially Complete” as applicable, shall mean when the Expansion Improvements are sufficiently completed in accordance with the Construction Plans so that Tenant can reasonably use the Expansion Premises for the Permitted Use (as described in the Basic Lease Information). When Landlord considers the Expansion Improvements to be Substantially Complete, Landlord will notify Tenant and within two (2) business days thereafter, Landlord’s representative and Tenant’s representative shall conduct a walk-through of the Expansion Premises and identify any necessary touch-up work, repairs and minor completion items as are necessary for final completion of the Expansion Improvements (collectively, the “Punch List Items”). Neither Landlord’s representative nor Tenant’s representative shall unreasonably withhold his or her agreement on the Punch List Items. Landlord will cause the contractor to complete all Punch List Items within thirty (30) days after Landlord’s and Tenant’s agreement thereon.

Exhibit B, Page 3

6.            Tenant’s Contractors. If Tenant should desire to enter the Expansion Premises or authorize its agent to do so prior to the Expansion Premises Commencement Date, to perform approved work not requested of the Landlord, Landlord shall permit such entry upon, and subject to, the following terms and conditions:

(a)          Tenant shall use only such contractors selected by Tenant but approved by Landlord in its reasonable discretion and Landlord shall have approved the plans to be utilized by Tenant, which approval will not be unreasonably withheld; and

(b)          Tenant, its contractors, workmen, mechanics, engineers, space planners or such others as may enter the Expansion Premises (collectively, “Tenant’s Contractors”), shall work in harmony with and shall not in any way disturb or interfere with Landlord’s space planners, architects, engineers, contractors, workmen, mechanics or other agents or independent contractors in the performance of their work (collectively, “Landlord’s Contractors”) or other tenants in the Building, it being understood and agreed that if entry of Tenant or Tenant’s Contractors would cause, has caused or is causing a material disturbance to Landlord or Landlord’s Contractors or other tenants, then Landlord may, with notice, refuse admittance to Tenant or Tenant’s Contractors causing such disturbance; and

(c)          Tenant, Tenant’s Contractors and other agents shall provide Landlord sufficient evidence that each is covered under Worker’s Compensation, and Commercial General Liability Insurance of $5,000,000 per occurrence for Tenant’s Contractors which are involved in the actual construction of improvements or the installation of fixtures within the Expansion Premises or Worker’s Compensation and Commercial General Liability Insurance of $2,000,000 per occurrence for Tenant’s Contractors which are involved in the installation of furnishings and equipment, including, without limitation, cabling, carpeting, and window treatments, in the Expansion Premises, together with such property insurance as Landlord may reasonably request for its protection. General Liability Insurance shall include coverage for ongoing and completed construction. Tenant’s Contractors will name Landlord and Property Manager as additional insureds on commercial general liability and property insurance policies. All liability policies will be primary and non-contributory and contain waivers of subrogation in favor of Landlord. Workers Compensation policy shall contain a waiver of subrogation in favor of Landlord.

LANDLORD SHALL NOT BE LIABLE FOR ANY INJURY, LOSS OR DAMAGE TO ANY OF TENANT’S INSTALLATIONS OR DECORATIONS MADE PRIOR TO THE EXPANSION PREMISES COMMENCEMENT DATE AND NOT INSTALLED BY LANDLORD UNLESS SUCH INJURY, LOSS OR DAMAGE TO ANY OF TENANT’S INSTALLATIONS OR DECORATIONS IS CAUSED BY LANDLORD’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. TENANT SHALL INDEMNIFY AND HOLD HARMLESS LANDLORD AND LANDLORD’S CONTRACTORS FROM AND AGAINST ANY AND ALL COSTS, EXPENSES, CLAIMS, LIABILITIES AND CAUSES OF ACTION ARISING OUT OF OR IN CONNECTION WITH WORK PERFORMED IN THE EXPANSION PREMISES BY OR ON BEHALF OF TENANT (BUT EXCLUDING WORK PERFORMED BY LANDLORD OR LANDLORD’S CONTRACTORS). LANDLORD IS NOT RESPONSIBLE FOR THE FUNCTION AND MAINTENANCE OF THE EXPANSION IMPROVEMENTS WHICH ARE DIFFERENT FROM THE BUILDING STANDARD IMPROVEMENTS AT THE PROPERTY OR IMPROVEMENTS, EQUIPMENT, CABINETS OR FIXTURES NOT INSTALLED BY LANDLORD. SUCH ENTRY BY TENANT AND TENANT’S CONTRACTORS PURSUANT TO THIS SECTION 6 SHALL BE DEEMED TO BE UNDER ALL OF THE TERMS, COVENANTS, PROVISIONS AND CONDITIONS OF THE LEASE EXCEPT THE COVENANT TO PAY RENT WITH RESPECT TO THE EXPANSION PREMISES.

Exhibit B, Page 4

7.            Construction Representatives. Landlord’s and Tenant’s representatives for coordination of construction and approval of change orders will be as follows, provided that either party may change its representative upon written notice to the other:

LANDLORD’S REPRESENTATIVE:
	NAME	Richard Vannatta, Granite Properties
	ADDRESS	6400 South Fiddlers Green Circle, Suite 500
		Greenwood Village, CO 80111
	PHONE	303-804-4715
	E-MAIL:	rvannatta@graniteprop.com
TENANT’S REPRESENTATIVE:
	NAME	Doug Baltzer
	ADDRESS	6400 S. Fiddler’s Green Circle, Suite 900
		Greenwood Village, CO 80111
	PHONE	720-573-7664
	E-MAIL:	Doug.baltzer@flexleasingpower.com

Exhibit B, Page 5

Schedule B-1

Space Plan

 

Schedule B-1, Page 1

 

Schedule B-1, Page 2

EX-10.11

Exhibit 10.11

SUBLEASE

This Sublease (this “Sublease”) is executed as of April 12, 2016, between Energes, LLC, a Texas limited liability company (“Sublessor”), and Flex Leasing Power & Service LLC, a Delaware limited liability company (“Sublessee”).

RECITALS

A.            Sublessor has the right to possession of the building and property located at 14417 45 J Street, NW, Alexander, North Dakota 58831, commonly known as the “Premises”, under that certain lease agreement dated June 5, 2014 (as amended to date, the “Base Lease”), between Elk Ridge B5L2, LLC, a Maryland limited liability company, as “Landlord”, and Sublessor as “Tenant”.

B.            Sublessee desires to sublease the Premises (as described in Exhibit A hereto), and Sublessor has agreed to lease the Premises to Sublessee on the terms and conditions contained herein.

AGREEMENTS

In consideration of the premises and other good and valuable consideration, Sublessor and Sublessee agree as follows:

1.            Premises Subleased & Term. Sublessor hereby subleases to Sublessee the Premises for a five-year term commencing on the later of (i) the date in which the Landlord under the Base Lease approves this Sublease, and (ii) May 1, 2016 (the “Sublease Commencement Pate”) and continuing until April 30,2021 (the “Term”).

2.            Right of First Refusal. At the expiration of the Term, so long as Sublessee is not in default under the Sublease, Sublessee will have a right of first refusal to sublease the Premises. Upon Sublessor notifying Sublessee of the terms on which Sublessor is willing to sublease the Premises, Sublessee shall have 30 days to notify Sublessor that it is either exercising or waiving its right of first refusal.

3.            Rent. As rent for this Sublease, Sublessee shall pay to Sublessor on the following schedule (“Rent”), together with its proportionate share of all other sums, including without limitation utility costs, insurance costs, operating costs, and taxes paid by Sublessor in its capacity as Tenant under the Base Lease (“Additional Rent”).

Year 1:   $13,000 NNN per month

Year 2:   $14,000 NNN per month

Year 3:   $15,500 NNN per month

Year 4:   $17,000 NNN per month

Year 5:   $18,000 NNN per month

Such rent shall be payable on the first day of each month based upon a reasonable estimate provided to Sublessee by Sublessor of the other sums payable by Sublessor for that month under the Base Lease. Within 15 days after the actual amount of other sums due under the Base Lease is known by Sublessor, Sublessor shall notify Sublessee thereof and of Sublessee’s portion thereof. If Sublessee has overpaid rent for the period in question, such overpayment shall be credited against the next installments of rent due or returned by Sublessor to Sublessee, or if Sublessee has underpaid rent, then Sublessee shall pay the amount of such underpayment to Sublessor within twenty days after the receipt of such notice. Payment of Rent and Additional Rent shall be made to Sublessor at its address written below or at such other place Sublessor may designate in writing, without any offset or deduction whatsoever. In addition if the Base Lease requires Tenant to make payments of real estate taxes and/or utilities which are applicable to the Premises directly to the taxing authorities and/or utility companies, as the case may be, Sublessee shall make such payments in a timely manner and promptly supply Sublessor with evidence thereof, and such shall be deemed to be additional rent hereunder.

4.            Acceptance. Sublessee acknowledges that it has inspected the Premises demised hereunder, and is fully satisfied with their condition and accepts the same, “AS IS.” Sublessor has made no representation or warranties of any nature whatsoever with regard to the Premises, other than those set forth herein, and Sublessor shall have no obligation or duty with regard to preparation of the Premises for occupancy by Sublessee. Sublessor shall deliver vacant possession of the Premises to Sublessee on Sublease Commencement Date.

5.            Base Lease Incorporated. The provisions of the Base Lease are, except as otherwise herein specifically provided, hereby incorporated in this Sublease with the same effect as if entirely rewritten herein, and shall fix the rights and obligations of the parties hereto with respect to the Premises with the same effect as if Sublessor and Sublessee were, respectively, the landlord and tenant named in the Base Lease. Sublessee hereby covenants to perform the covenants and undertakings of Sublessor as tenant under the Base Lease to the extent the same are applicable to the Premises during the term of this Sublease, and agrees not to do or permit to be done any act which shall result in a violation of any of the terms and conditions of said Base lease. Except as otherwise specifically provided herein, Sublessee is to have the benefit of the covenants and undertakings of Landlord in the Base Lease to the extent the same are applicable to the Premises during the term of this Sublease. It is expressly understood and agreed, however, that Sublessor is not in the position to render any of the services or to perform any of the obligations required of Landlord by the terms of this Sublease, and that performance by Sublessor of its obligations hereunder are conditioned upon due performance by owner of its corresponding obligations under the Base Lease. Notwithstanding the foregoing, Sublessor shall take all reasonable measures and use its reasonable efforts to enforce its rights under the Base lease and to insure that Landlord performs said obligations. So long as Sublesssor takes such reasonable measures and uses such reasonable efforts, Sublessor shall not be in default under this Sublease for failure to render such services or perform such obligations required by Sublessor by the terms of this Sublease that are the responsibility of the Landlord under the Base Lease. The terms “reasonable measures” and “reasonable efforts” shall not include legal action against Landlord for its failure to so perform unless Sublessee agrees to pay all actual costs and expenses in connection therewith.

Page 2

6.            Subordinate to Base Lease. This Sublease is subject and subordinate in all respects to the Base Lease, and Sublessee acknowledges that it has received a copy of the Base Lease, which is attached hereto as Exhibit B. Sublessor hereby represents and warrants to Sublessee that the copy of the Base Lease attached hereto as Exhibit B is a true and correct copy of the Base Lease and includes all amendments and supplements thereto.

7.            Holdover. Sublessee shall promptly vacate the Premises upon expiration or termination of this Sublease. Any holding over by Sublessee beyond the expiration date of this Sublease shall be deemed unlawful unless expressly consented to by Sublessor in writing, and Sublessor shall be entitled to any and all remedies in law or in equity by reason of such unlawful holding over by Sublessee, Sublessee agrees to indemnify and save Sublessor harmless against and from any and all loss, cost, expense and liability incurred by Sublessor under the Base Lease by reason of any such holding over.

8.            Indemnification. Sublessee shall indemnify and save harmless Sublessor against and from any and all liability, damage, expense, cause of action, suits, claims or judgments for injury or death to persons or damage to property sustained by anyone in and about said Sublease Premises or any part thereof, arising out of or in any way connected with Sublessee’s use or occupation of the Premises or this Sublease.

9.            Sublessor Covenants. Sublessor shall not, without prior written consent of Sublessee, modify or amend the Base Lease or take any action which would in any way (a) diminish Sublessee’s receipt of services to the Premises, (b) increase the Rent or Additional Rent under this Sublease, (c) shorten the term of this Sublease (except resulting from casualty or condemnation); (d) increase the obligations or decrease the rights of Sublessee under this Sublease or (e) decrease the obligations or increase the rights of Landlord with respect to the Premises and/or this Sublease.

10.            Sublessor Representations. Sublessor represents to Sublessee as follows:

(a)            The Base Lease is in full force and effect;

(b)            That as of the date of this Sublease there is no uncured default by either party under the Base Lease of which Sublessor has received notice.

11.            Assignment or Subletting. Sublessee shall not, without the prior written consent of Sublessor, assign the term hereby demised, or suffer or permit it to be assigned by operation of law or otherwise, nor shall the Sublessee, without the prior written consent of Sublessor, let or sublet or permit the said Sublease Premises or any part thereof to be used by others for hire.

12.            Landlord’s Consent. This Sublease is subject to and conditioned upon the written consent of Landlord to this subletting. If Landlord does not give its consent to this Sublease for any reason whatsoever within thirty (30) days after the date hereof, this Sublease shall be deemed null and void and of no effect.

13.            Insurance. Sublessee shall maintain insurance as required under the Base Lease in the amounts stated in the Base Lease, with Sublessor named as an additional insured. Sublessee shall furnish to Sublessor certificates of such insurance and other evidence satisfactory to Sublessor of the maintenance of all insurance coverage required hereunder.

Page 3

14.            Notices. All notices and other communications given pursuant to the Sublease shall be in writing and shall be (a) mailed by first class, United States mail, postage prepaid, certified, with return receipt requested, and addressed to the parties hereto at the address listed below, (b) hand delivered to the intended addressee, (c) sent by nationally recognized overnight courier, or (d) sent by prepaid telegram, cable, facsimile transmission, or telex followed by a confirmatory letter. Notice sent by certified mail, postage prepaid, shall be effective three business days after being deposited in the United States mail; all other notices shall be effective upon delivery to the address of the addressee. The parties hereto may change their addresses by giving notice thereof to the other in conformity with this provision.

Sublessor:	Energes, LLC
	32315 TAMINA RD. SUITE B
	MAGNOLIA, TX 77354
	Attention:	JAMES E. PUNG
Sublessee:	Flex Leasing Power & Service LLC
	Attention: Doug Baltzer
	6400 S. Fiddlers Green Circle
	Suite 450
	Greenwood Village, CO 80111
Landlord:	Elk Ridge B5L2, LLC
	1610 West Street, Suite 100
	Annapolis, MD 21401
	Attention: EricDitter

15.            Brokerage. Sublessor and Sublessee each warrant to the other that it has not dealt with any broker or agent in connection with the negotiation or execution of this Sublease outside of Energy Real Estate Solutions, LLC. Sublessee and Sublessor shall each indemnify the other against all costs, expenses, attorneys’ fees, and other liability for commissions or other compensation claimed by any broker or agent claiming the same by, through, or under the indemnifying party.

16.            Binding Effect: Governing Law. Except as modified hereby, the Base Lease shall remain in full effect and this Sublease shall be binding upon Sublessor and Sublessee and their respective successors and assigns. If any inconsistency exists or arises between the terms of this Sublease and the terms of the Base Lease, the terms of this Sublease shall prevail. This Sublease shall be governed by the laws of the State in which the Premises is located.

17.            Counterparts. This Sublease may be executed in multiple counterparts, each of which shall constitute an original, but all of which shall constitute one document.

Page 4

Executed as of the date first written above.

SUBLESSOR:	Energes, LLC
	By:	/s/ James E. Pung
	Name:	JAMES E. PUNG
	Title:	CEO
SUBLESSEE:	Flex Leasing Power & Service LLC
	By:	/s/ Doug Baltzer
	Name:	Doug Baltzer
	Title:	President

Page 5

EXHIBIT A

DESCRIPTION OF PREMISES

14417 41^st J St NW, Alexander, ND 58831

This two story wood-post frame property includes:

– 16,560 SF

– Four pull through bays

– 20’high ceilings

– Insulated shop

– Two story office space

– Eight 14’x14’ overhead doors

Zoned industrial and located on a 6.88 acre lot

 

Page 6

EXHIBIT B

[BASE LEASE]

Page 7

EXHIBIT C

LANDLORD’S CONSENT

The undersigned, Landlord under the Base Lease, executes below to evidence its consent to this Sublease. Such consent shall not release Sublessor from any liabilities or obligations under the Base Lease nor constitute consent to any further assignment or subletting. Sublessor shall remain fully liable under the Base Lease, and the provisions thereof shall apply to any further subleasing or assignment.

LANDLORD:	Elk Ridge B5L2, LLC
	By:
	Name:
	Title:

Page 8

EX-10.12

Exhibit 10.12

1

LEASE

THIS LEASE, dated for reference December 1, 2015, is made and entered into by the Landlord and the Tenant named herein who, in consideration of the rents, covenants and agreements herein contained, covenant and agree as follows:

ARTICLE 1

BASIC TERMS, DEFINITIONS AND INTERPRETATION

1.1 Basic Terms

The basic terms of this Lease are as follows:

(a)	(i)	Landlord:	BENNETT FINANCIAL CORP.
	(ii)	Address of Landlord:	10905 – 88A Street, Grande Prairie
			Alberta T8X 1N8
	(iii)	Email:	harvey.mainline@gmail.com
(b)	(i)	Tenant:	FLEX LEASING POWER AND SERVICE ULC
	(ii)	Address of Tenant:	#102, 9215 – 154 Avenue
			Clairmont, Alberta T8X 0L2
	(iii)	Email:
(c)	Premises:		#102, 9215 – 154 Avenue
			Clairmont, Alberta T8X 0L2
			CONDOMINUM PLAN 1320815
			UNIT 2
			AND 5000 UNDIVIDED ONE TEN THOUSANDTH SHARES IN THE COMMON PROPERTY EXCEPTING THEREOUT ALL MINES AND MINERALS
(d)	Term:		3 years
(e)	Commencement Date:		January 1, 2016
(f)	Occupancy Date:		December 1, 2015
(g)	Annual Basic Rent:		$129,600.00 + GST
(h)	Permitted Use:		Sales and leasing of turbines, general office space
(i)	Right to Renew:		1 term of 3 years as set out in Schedule C

2

The foregoing Basic Terms are agreed to by the parties and each reference in this Lease to any of the Basic Terms will be construed to include the foregoing provisions and all of the additional applicable sections of this Lease where such Basic Terms are more fully set forth.

1.2 Definitions

The Landlord and the Tenant agree that, in this Lease, the words or phrases set out in Schedule A attached hereto will, unless there is something in the context inconsistent therewith, have the meanings set out in Schedule A attached hereto.

1.3 Schedules

The Schedules attached to this Lease are incorporated into and form an integral part of this Lease and are as follows:

Schedule A	Definitions
Schedule B	Rules and Regulations
Schedule C	Right to Renew

ARTICLE 2

DEMISE AND TERM

2.1 Demise

The Landlord hereby leases the Premises to the Tenant and the Tenant leases the Premises from the Landlord, subject to the terms and conditions set out in this Lease, for the Term. The Tenant acknowledges that subject to Section 9.4 herein, it is leasing the Premises from the Landlord on an “as is where is” basis, and that the Landlord will not be required to perform any work or provide any materials or services in respect of the Premises whatsoever

ARTICLE 3

RENT AND OTHER PAYMENTS

3.1 Annual Basic Rent and Additional Rent

Subject to the provision below, the Tenant will pay to the Landlord or as the Landlord may in writing direct, in lawful money of Canada, the aggregate of:

(a) Beginning on the Commencement Date, Annual Basic Rent for each Lease Year, payable in advance in equal consecutive monthly instalments of $10,800.00 plus GST on the first day of each month in each year of the Term; and

(b) Beginning on the Occupancy Date, the Tenant’s proportionate shares of the Operating Costs and Property Taxes, payable in accordance with Section 3.2.

Rent will be payable at the Landlord’s address specified in Paragraph 1.1(a)(ii) or at such other place as the Landlord may from time to time direct in writing.

3

3.2 Operating Costs and Property Taxes

Additional Rent (including, without limitation that Tenant’s proportionate share of, Operating Costs and Property Taxes) payable by the Tenant will be estimated on an annual basis by the Landlord for such annual period as is designated by the Landlord from time to time. The Tenant will pay the Landlord the estimated amount in monthly instalments in advance on the first day of each calendar month during the designated period. Within sixty (60) days following the designated period, the Landlord will furnish to the Tenant a statement setting out the Operating Costs and Property Taxes for such period. If the amount payable by the Tenant as shown on any such statement is greater or less than the aggregate of amounts paid by the Tenant under this Section 3.2, the proper adjusting credit or payment will be made between the parties within 14 days after delivery of the statement. Any credit made by the Landlord or payment made by the Tenant and accepted by the Landlord in respect of any adjustment made hereunder, will be without prejudice to the Landlord’s or Tenant’s right to claim a readjustment provided such claim is made within 12 months from the date of delivery of the statement referred to in this Section 3.2. Landlord shall keep accurate and current records in respect of such Additional Rent, which records may be reviewed by the Tenant or the Tenant’s agent upon request.

3.3 Tenant’s Taxes

The Tenant will promptly pay the Tenant’s Taxes as they become due. The Tenant will provide to the Landlord, upon request, the official receipt for each payment made by the Tenant in respect of the Tenant’s Taxes.

3.4 Utilities

Beginning on the Occupancy Date, the Tenant will pay all electricity, gas, other fuel, water, sewer and other utilities consumed in the Premises, except water which shall be billed to the Landlord the charges of which shall form part of the Additional Rent, directly to the applicable utility provider, whether billed by the supplying utility to the Landlord or to the Tenant directly. The Tenant will be solely responsible for arranging for supply of utilities to the Premises with utility service providers.

3.5 Irregular Periods

If, for any reason, it becomes necessary to calculate Annual Basic Rent or Additional Rent for irregular periods, an appropriate pro rata adjustment will be made on a daily basis in order to compute such rent for such irregular periods, unless otherwise expressly set out in this Lease.

3.6 Net Lease

This Lease will be absolutely net to the Landlord such that, without limitation, except as specifically set out in this Lease, all costs, expenses and obligations of every kind and nature whatsoever relating to the Premises, whether or not referred to in this Lease and whether or not of a kind now existing or within the contemplation of the parties hereto, will be paid by the Tenant.

4

3.7 Deposit

The Landlord acknowledges that it currently holds a deposit of $22,680.00 inclusive of GST on account of the first and last month’s Basic Rent. The aforementioned deposit will not bear interest.

ARTICLE 4

TENANT’S OPERATING COVENANTS

4.1 Use of Premises

The Tenant will not:

(a) use the Premises nor allow the Premises to be used for any purpose other than that specified in Subsection 1.1(h) without the prior written consent of the Landlord, which consent may not be unreasonably withheld or delayed;

(b) use, exercise, or carry on, or permit or suffer to be used, exercised or carried on, in, upon or about the Premises, or any part thereof, any noxious, illegal, noisome or offensive act, trade, business, occupation or calling, nor do or permit to be done on the Premises anything which damages the Premises, nor keep, sell, use handle or dispose of any merchandise, goods or things which are objectionable, or by which the Premises or any part thereof may be damaged other than reasonable wear and tear; or

(c) do or permit to be done any act, matter or thing whatsoever in or upon the Premises, or any part thereof, which may result in nuisance, grievance, damage or disturbance to any occupiers or owners of any other lands or premises or to the holders of any registered easement, right of way or other encumbrance charging the whole or part of the Premises.

In any of the foregoing events, the Tenant will forthwith remedy the same.

4.2 Signs

The Tenant shall have the right to place prominent external signage on the face of the Building at the Tenant’s cost. The design, size and location of the signage shall be subject to the approval of the Landlord, which approval may not be unreasonably delayed or withheld, and which shall comply at all times with the requirements of any lawful authority having jurisdiction over signs.

4.3 Rubbish

The Tenant will keep the Premises clean and tidy and in good order and will not permit waste or garbage to be placed or accumulate outside of the Premises. The Tenant will dispose of waste or garbage in the manner designated by the Landlord from time to time, acting reasonably.

5

4.4 Compliance with Laws

The Tenant will do, observe and perform all of its obligations and all matters and things necessary or expedient to be done, observed or performed by the Tenant by virtue of any law, statute, by-law, ordinance, regulation or lawful requirements of any governmental authority or any public utility lawfully acting under statutory authority. The Tenant will immediately advise the Landlord of the presence of and will do all things necessary to remove any dangerous condition from time to time existing on the Premises.

4.5 Rules and Regulations

The Tenant will observe and perform, and will cause its employees, agents, invitees (and others over whom the Tenant can reasonably be expected to exercise control) to observe and perform, the Rules and Regulations attached hereto as Schedule B and such other reasonable rules and regulations or amendments as may be made from time to time by the Landlord. In the event of any conflict between a provision of this Lease and any of the Rules and Regulations, the provision of this Lease will govern.

4.6 Vacate on Termination

At the termination of this Lease, whether by the effluxion of time or otherwise, the Tenant will vacate and deliver up possession of the Premises in the condition required by this Lease and will inform the Landlord of all combinations of locks, safes and vaults, if any, in the Premises.

ARTICLE 5

HAZARDOUS SUBSTANCES

5.1 Hazardous Substances

Except as otherwise expressly provided for in Section 4.1, the Tenant will not bring or permit to be brought into the Premises, and will not use in any way, or permit the use of the Premises or any part thereof to either directly or indirectly prepare, produce, use, generate, manufacture, refine, treat, transport, store, maintain, handle, dispose of, transfer, process, release or permit any other dealing with, any Hazardous Substances unless it has received the prior written consent of the Landlord, which shall not be arbitrarily and unreasonably withheld or delayed. Any substance which the Landlord permits the Tenant to treat, store, transfer or dispose of will be dealt with in strict compliance with all applicable laws and environmental permits. The Tenant will not release nor permit the release of any Hazardous Substances into any soil, water courses, culverts, drains or sewers on or nearby the Premises. The Tenant will comply with all applicable laws and environmental permits from time to time in force regulating any dealing with Hazardous Substances by the Tenant to which the Landlord has consented.

5.2 Removal of Hazardous Substances

On or before the expiry or sooner termination of this Lease, the Tenant will remove all Hazardous Substances which the Tenant has brought onto or created upon the Premises during the Term or Renewal Term.

6

5.3 Notice of Hazardous Substances

The Tenant will advise the Landlord forthwith after becoming aware of any release of any Hazardous Substances on the Premises or any other part of the Premises or any adjacent property and will provide the Landlord with all information, notices, reports and other documents it has regarding such release and the remediation steps being undertaken by the Tenant with respect to the release or as may reasonably be required by the Landlord of the Tenant.

5.4 Restoration After Contamination

If the Tenant has brought onto or created upon the Premise any Hazardous Substance on the Premises during the Term or any extension or renewal thereof, the Tenant will promptly take all actions at its sole risk and expense as are necessary to return the Premises to the condition existing prior to the introduction of any such Hazardous Substance or other substance on the Premises.

5.5 Clean Up Plans

If any government authority requires the clean up of any Hazardous Substance held, released, spilled, abandoned or placed upon the Premises or any other lands by the Tenant or released, spilled, leaked, pumped, poured, emitted, emptied, discharged, injected, escaped, leached, disposed or dumped into the environment by the Tenant in the course of the Tenant’s business or as a result of the Tenant’s use or occupancy of the Premises during the Term or any extension or renewal thereof, the Tenant will, at its own risk and expense:

(a) prepare all necessary studies, plans and proposals and submit them for approval;

(b) provide all bonds and other security required by any governmental authority;

(c) carry out the work required and keep the Landlord fully informed; and

(d) provide to the Landlord full information with respect to proposed plans and comply with the Landlord’s reasonable requirements with respect to such plans.

5.6 Indemnity to Landlord

The Tenant shall be solely responsible for and will indemnify and save harmless the Landlord from any damage to the Premises caused by any spill, discharge or release of any contaminant or Hazardous Substance by the Tenant or the breach of any environmental laws by the Tenant during the Term of this Lease to the extent that such damage, spill, discharge, release or breach occurred or was occasioned by the activities of the Tenant or any person for whom the Tenant is responsible for at law. The Tenant hereby expressly agrees that this indemnification will survive the expiration or earlier termination of this Lease.

5.7 Indemnity to Tenant

The Landlord shall be responsible for and will indemnify and save harmless the Tenant from any Hazardous Substances existing on, under or within the Premises prior to the Commencement Date or any Hazardous Substances that are spilled, discharged or released onto the Premises or into the environmental as a result of the negligence or wilful misconduct of the Landlord or any person for whom the Landlord is responsible for at law. The Landlord hereby expressly agrees that this indemnification will survive the expiration or earlier termination of this Lease.

7

5.8 Phase 1 Environmental Report

(a) The Landlord shall, within 90 days of the Occupancy Date, at its expense provide a Phase 1 Environmental Report on terms acceptable to the Tenant with baseline testing done immediately prior to the Commencement Date (the “Baseline Environmental Report”). At the expiration of this Lease the Tenant shall at its expense pay for a Phase 1 Environmental Report on similar terms (the “Post-Termination Environmental Report”). If the Post-Termination Environmental Report shows any increase in the level(s) of Hazardous Substances identified and described in the Baseline Environmental Report, or if there appears to be the presence of Hazardous Substances that were not present in the Baseline Environmental Report, then, subject to Section 5.5(b) and (c), the responsibility and liability for such Hazardous Substances shall be allocated to the Tenant.

(b) If the results of the Baseline Environmental Report identify any contamination of the Environment, the responsibility, liability and all necessary or recommended actions required by Applicable Laws or otherwise, to perform further assessments, report, clean up and remediate such contamination of the Environment, including without limitation, leaching and seepage of a contaminant(s), shall be allocated to the Landlord, at the sole expense of the Landlord.

(c) If the Baseline Environmental Report recommends any further action, including but not limited to the performance of a phase 2 environmental assessment and/or remedial action, the Landlord shall comply with said recommendations within a reasonable time. Notwithstanding the foregoing, the Landlord or the Tenant may choose to terminate this Lease, by thirty (30) days written notice to the other party, due to the results of the Baseline Environmental Report or any subsequent reports. Should this Lease be terminated by either party, the Landlord shall not be obligated to take any further action in regards to the Environment.

(d) The Landlord and Tenant agree that the Post-Termination Environmental Report set out in Section 5.7(a) shall be conducted by the same company that performed the original Baseline Environmental Report or, another company to be approved by the Landlord. Such report shall be conducted using methods and procedures substantially the same as those used in the preparation of the Baseline Environmental Report.

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ARTICLE 6

TENANT’S REPAIRS AND ALTERATIONS

6.1 Repair

Excepting only reasonable wear and tear and repairs for which the Landlord is responsible under section 9.2 of this Lease, the Tenant will, at its own expense, repair and maintain the Premises and all equipment, fixtures and improvements (including all electrical, mechanical, plumbing and sprinkler equipment and all heating, ventilating and air-conditioning equipment exclusively serving the Premises) in a condition of the same quality as at the Occupancy Date or better. At the end or sooner termination of the Term or any extension or renewal thereof the Tenant will deliver to the Landlord the Premises repaired and maintained in the condition required by this Section 6.1, and this obligation will survive the expiration or earlier termination of the Term or any extension thereof.

6.2 Repair on Notice

Upon 72 hours’ prior written notice (except in any emergency when no notice is required), the Landlord and its duly authorized agents or nominees may, with or without workers and others, enter upon the Premises for the purpose of examining the state of repair, condition and use thereof, and in every case the Tenant will cooperate with and assist the Landlord in such entry and examination and, upon notice in writing of any defect or want of repair being given by the Landlord, the Tenant will cause the same to be repaired, as required by Section 6.1, within 30 days from the date of the giving of such notice by the Landlord or any such longer period if reasonably necessary in the circumstances to complete the repairs or maintenance. In exercising the foregoing rights, the Landlord will make reasonable efforts to minimize any disruption of the Tenant’s business.

6.3 Business and Trade Fixtures

The Tenant may install its usual business and trade fixtures, provided that the installation does not damage the Premises.

All business and trade fixtures owned or installed by the Tenant in or on the Premises will remain the property of the Tenant and will be removed by the Tenant at the expiration of the Term or any renewal thereof or at the sooner termination thereof, provided that the Tenant at its expense will repair any damage to the Premises caused by such removal..

6.4 Alterations and Additions

The Tenant will not make any change to the Premises, including the installation of any trade fixtures or leasehold improvements, without having first submitted plans and specifications of the proposed change to the Landlord and having obtained the prior written consent of the Landlord to the proposed change, such consent not to be unreasonably delayed or withheld. All work will be done in a first class manner. The Tenant will obtain and pay for all required building and occupancy permits in respect of its work. The Tenant will, at its own cost and expense, take out any additional insurance coverage reasonably required by the Landlord to protect the respective interests of the Landlord and the Tenant during all periods when any such work is being performed. Notwithstanding anything contained in this Lease, the Landlord will not be obligated to repair, maintain, replace or insure such installations, alterations, additions, partitions and fixtures or anything in the nature of a leasehold improvement made or installed by or on behalf of the Tenant and the Landlord may require the Tenant, at the Tenant’s cost, to remove any or all installations, alterations, additions, partitions, improvements or fixtures made or installed by or on behalf of the Tenant during the Term of any renewal thereof.

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6.5 Liens

If any claim of lien is filed against the Premises by any person claiming against the Tenant, the Tenant will take all necessary steps to have the claim of lien cancelled and discharged from title to the Premises within 30 days of the date the Tenant has knowledge of such filing and the Tenant will indemnify and save the Landlord harmless from any and all loss, cost, expense, damage and liability relating to such claim of lien.

ARTICLE 7

INSURANCE/INDEMNIFICATION

7.1 Tenant’s Insurance

(a) The Tenant will, at its sole cost, during any period that the Tenant occupies the Premises, take out and maintain in full force and effect, the following:

(i) “all risks” insurance (or its equivalent), including earthquake, fire, flood and sewer backup perils, upon all merchandise, stock-in-trade, furniture, fixtures, equipment, leasehold improvements and other property of every kind and description located at the Premises, owned by the Tenant or for which the Tenant is responsible or legally liable, in an amount at least equal to the full insurable value thereof, calculated on a full replacement cost basis;

(ii) “comprehensive form” boiler and machinery insurance (or its equivalent) upon any boilers, pressure vessels or mechanical equipment located at the Premises in such amount as the Landlord may reasonably require from time to time;

(iii) commercial bodily injury and property damage liability insurance (or its equivalent) applying to the operations of the Tenant carried on, in and from the Premises and which will include, without limitation, personal injury liability, product liability, contractual liability, non-owned automobile liability, protective liability and Tenant’s legal liability with respect to the occupancy by the Tenant of the Premises; and such insurance will be written for an amount of not less than $2,000,000.00.

(b) All policies of liability insurance referred to in this Section 7.1 will name the Landlord as additional insured and provide that the Landlord will be insured in the same manner and to the same extent as if separate policies had been issued to the Landlord.

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(c) All policies of insurance referred to in this Section 7.1 will be underwritten by insurers reasonably acceptable to the Landlord and on policy forms satisfactory to the Landlord, reasonably acting. The Tenant will deliver to the Landlord certificates of insurance upon request of the Landlord. Whenever required by the Landlord, the Tenant will provide the Landlord with evidence that all premiums for all insurance policies have been paid.

(d) The Tenant will not do or permit anything to be done upon the Premises which might cause any policy of insurance against loss or damage to the Premises or against legal liability for damage to persons or property caused by the ownership, maintenance, use or occupancy of the Premises, or by reason of the conduct of any business carried on thereon, to be invalidated, and, for such purpose, upon receipt of notice in writing from any insurer of the Premises requiring the execution of works or a discontinuance of any operations in order to correct such situation, the Tenant will immediately comply with the notice.

(e) The Tenant will not do or permit anything to be done or exist upon the Premises that would cause an increase in the cost of the Landlord’s insurance or subject any such insurance to cancellation.

7.2 Landlord’s Insurance

At the Tenant’s own expense, the Landlord will take out and maintain in force such insurance as the Landlord deems appropriate, acting reasonably.

7.3 Indemnify Landlord

Save for where caused by the negligence or wilful misconduct of the Landlord or any person for whom the Landlord is responsible for at law, the Tenant will indemnify and save harmless the Landlord from and against any actions or causes of action, damages, costs, loss or expenses of whatever kind which the Landlord may become liable for or suffer by reason of a breach, violation or non-performance by the Tenant of any covenant, term or provision in this Lease or by reason of any injury occasioned to or suffered by any person or persons or any property damage resulting from the wrongful act, neglect or default on the part of the Tenant or any person for whom the Tenant is responsible for at law or arising out of the use and occupation by the Tenant of the Premises and the business of the Tenant conducted thereon and such liability to indemnify and save harmless will survive any termination of this Lease.

7.4 Indemnify Tenant

Save for where caused by the negligence or wilful misconduct of the Tenant or any person for whom the Tenant is responsible for at law, the Landlord will indemnify and save harmless the Tenant from and against any actions or causes of action, damages, costs, loss or expenses of whatever kind which the Tenant may become liable for or suffer by reason of a breach, violation or non-performance by the Landlord of any covenant, term or provision in this Lease or by reason of any injury occasioned to or suffered by any person or persons or any property damage resulting from the wrongful act, neglect or default on the part of the Landlord or any person for whom the Landlord is responsible for at law and such liability to indemnify and save harmless will survive any termination of this Lease.

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7.5 Damage or Injury

Except for any structural repairs or any structural default of the Building or the Premises and expect to the extent attributable to the negligence or wilful misconduct of the Landlord, or any persons for whom the Landlord, at law, is responsible, the Landlord will not be liable for any personal injury, death or property loss or damage sustained by the Tenant, or its employees, agents, assignees, subtenants, licensees, invitees or those doing business with it in the Premises, and the Tenant hereby releases the Landlord and its directors, officers, shareholders, agents and employees from all claims for damages or other expenses arising out of such personal injury, death or property loss or damage and will indemnify the Landlord and its directors, officers, shareholders, agents and employees against all actions or liabilities arising out of such personal injury, death or property damage or loss.

7.6 Tenant Responsible for Damages

The Tenant acknowledges and agrees that it will be solely responsible, at its own cost, for repairing any and all damage, including without limitation replacement of broken windows, caused to the Premises by the Tenant, its employees, agents, contractors, customers, invitees or other persons for whom the Tenant is responsible at law.

ARTICLE 8

DISPOSITIONS

8.1 Assignment and Subletting

The Tenant shall not make, grant, execute, enter into, consent to, or permit any subletting without the prior written consent of the Landlord, such consent not to be unreasonably withheld, conditioned or delayed. In the event that the Tenant desires to make, grant, execute, enter into, consent to, or permit any subletting then the Tenant shall give prior written notice to the Landlord of such desire, specifying therein the proposed subtenant and providing to the Landlord such information on the nature of the business of the proposed subtenant, together with its financial responsibility and standing, as the Landlord may reasonably require, together with the terms and conditions of the proposed subletting. The Tenant shall also deliver to the Landlord a copy of the sublease intended to be executed by the Tenant and the Transferee, together with the Landlord’s administration fee required hereunder. The Landlord shall, within 10 Business Days thereafter, notify the Tenant in writing that:

(a) it consents to such subletting, or

(b) that it does not consent to such subletting, in which event the Landlord must advise the Tenant of its reason for not consenting.

Notwithstanding the forgoing, provided the Tenant is not then in material default of any of the terms of this Lease, the Tenant shall have the right (without being required to first obtain the Landlord’s prior consent) to assign this Lease or sublet all or a portion of the Premises to (i) an affiliate of the Tenant, or (ii) a third party purchaser of all or substantially all of the Tenants assets in Alberta. The Tenant shall provide a minimum of 60 days written notice to the Landlord of any such assignment or sublet as soon as is reasonably practicable.

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8.2 Tenant’s Charges

The Tenant will:

(a) not mortgage or charge its leasehold interest in the Premises without the prior written consent of the Landlord, such consent not to be unreasonably withheld; and

(b) pay all money owed by it under any mortgage or charge of its leasehold interest in the Premises and immediately upon making all of the payments thereunder, obtain a memorandum of satisfaction or other appropriate document of discharge and register the same at its own expense in the proper land title office or other appropriate office of public record (as applicable).

8.3 Subordination

This Lease is and will be subject, subordinate and postponed to all mortgages and charges, including, without limitation, any debentures and any deeds of trust and mortgages securing bonds and all indentures supplemental thereto (collectively called the “Mortgages”) which may now or hereafter charge the Premises and to all renewals, modifications, consolidations, replacements and extensions of the Mortgages, without execution of any document other than this Lease provided the holder of any such Mortgages delivers a reasonable Non-Disturbance Agreement to the Tenant for execution by the Tenant. Without limiting the generality of the foregoing, the Tenant agrees to execute promptly any document in confirmation of such subordination, postponement and priority which the Landlord reasonably may request.

8.4 Estoppel Certificate

Each party will, at any time and from time to time, upon ten (10) days’ prior written notice from the other party, execute and deliver to the requesting party (or if requested by the Landlord, to the Landlord’s Mortgagees or a prospective purchaser of the Premises), a statement in writing as to the then status of this Lease, including, without limitation, as to whether it is in full force and effect, is modified or unmodified, confirming the Rent payable hereunder and the state of accounts between the Landlord and the Tenant, the existence or non-existence of defaults, and any other matters pertaining to this Lease as reasonably required by the requesting party.

8.5 Exhibit Premises

The Landlord may, on reasonable notice to the Tenant, enter and exhibit the Premises to prospective tenants or subtenants during the six (6) month period prior to the expiry of the Term or any renewal or extension thereof, and to the Landlord’s Mortgagees or prospective mortgagees or purchasers at any time during the Term or any extension thereof. The Landlord will make reasonable efforts to minimize any disruption of the Tenant’s business caused thereby.

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ARTICLE 9

LANDLORD’S COVENANTS

9.1 Quiet Enjoyment

If the Tenant pays the Rent and performs the covenants contained in this Lease, the Tenant will be entitled to quiet enjoyment of the Premises, subject to the rights of owners or occupiers of the easements and rights-of-way, if any, now or hereafter registered against title to the Premises.

9.2 Structural Repairs

The Landlord will, at its own cost, make all necessary structural repairs, both exterior and interior, to the Roof, foundations, sub-floors and perimeter load-bearing walls of the Building and any related repairs to the mechanical and electrical works included within the Premises, including all electrical, mechanical, plumbing, and sprinkler equipment and all heating, ventilating and air-conditioning equipment, which may be required as a direct result of a structural issue. The Landlord shall make reasonable efforts to minimize any disruption to the Tenant’s business as a result of carrying out such repairs.

9.3 Payment of Property Taxes

Subject to the Tenant’s obligation to pay the Property Taxes, the Landlord will pay the Property Taxes in respect of the Premises. If the Landlord is obligated to pay Property Taxes in advance for or during the year or other period in which the Property Taxes are or are to become due, the Landlord may establish a reserve from which to pay the Property Taxes when due, and if it does so, the Tenant will, notwithstanding Section 3.2, pay the Property Taxes in equal monthly instalments in advance on the first day of each month, in amounts sufficient to fund such reserve so as to enable the Landlord to pay the Property Taxes in advance, when due.

9.4 Landlord’s Repairs

Prior to the Commencement Date, the Landlord shall complete the following:

(a) Ensure the electrical, mechanical, plumbing, bay doors, and HVAC systems are in good working order;

(b) Patch all holes in the office, and clean and paint the office area;

(c) Finish office space upstairs to include stairway from shop, conference room, and breakroom with sink, cabinets, and countertops; and

(d) Fix gap between the wall and floor upstairs.

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ARTICLE 10

DEFAULT

10.1 Re-entry on Default

If at any time during the Term or any extension or renewal thereof:

(a) any payments of the Rent or any part thereof, are not paid within thirty (30) days after written notice from the Landlord that they are overdue;

(b) the Tenant breaches or fails to observe or perform any covenant, agreement, stipulation, proviso, condition, rule or regulation contained in this Lease and the breach, non-observance or non-performance continues for 30 days after written notice thereof to the Tenant (or such longer period as may be reasonably necessary in the circumstances in order to rectify such breach or failure);

(c) the Premises are abandoned;

(d) the Term or any extension thereof or any of the goods and chattels of the Tenant is seized or taken in attachment by any creditor of the Tenant;

(e) the Tenant becomes bankrupt or insolvent or takes the benefit of any statute at the time in force for bankrupt or insolvent debtors; or

(f) the Tenant assigns, sublets or parts with possession of all or any part of the Premises without the Landlord’s consent as herein required,

then:

(g) the Landlord, in addition to any other remedy available to it, may re-enter and take possession immediately of the Premises or any part thereof.

10.2 Sale and Reletting

Upon the Landlord becoming entitled to re-enter the Premises under any of the provisions of this Lease, the Landlord, in addition to all other rights and remedies it may have under this Lease or otherwise, may enter the Premises and relet the Premises and receive all rent therefor. The Landlord may also take possession of any business and trade fixtures of the Tenant and any goods and property whatsoever on the Premises, sell them at public or private sale without notice and apply the proceeds of such sale and any rent derived from reletting the Premises, after deducting its costs of conducting such sale and its costs of reletting, in payment of the Rent due under this Lease, and the Tenant will be liable to the Landlord for any deficiency.

10.3 Termination

Upon the Landlord becoming entitled to re-enter upon the Premises under any of the provisions of this Lease, the Landlord, in addition to all other rights and remedies, may immediately terminate this Lease by giving notice in writing addressed to the Tenant of its intention so to do. Upon such termination, Rent will be computed, apportioned and paid in full to the date of such termination, the Tenant will pay any other amounts for which it is liable pursuant to Section 10.5, the Tenant will forthwith deliver up possession of the Premises to the Landlord and the Landlord may re-enter and take possession of the Premises.

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10.4 Payments by Landlord Regarded as Rent

If the Tenant fails to observe or perform any of the covenants or obligations of the Tenant under or in respect of this Lease within the applicable cure periods, the Landlord may at its discretion perform any of such covenants or obligations or any part thereof and for such purpose may do such things as may be necessary and may enter upon the Premises to do such things and all costs and expenses incurred and expenditures made by or on behalf of the Landlord will be paid by the Tenant to the Landlord on demand.

10.5 Landlord’s Expenses Enforcing Lease

If it is necessary for the Landlord to retain the services of any person for the purpose of assisting the Landlord in enforcing any of its rights under this Lease or otherwise available at law, the Landlord may collect from the Tenant the cost of its reasonable legal fees and disbursements in connection with all necessary court proceedings at trial or on appeal as if the same were Rent in arrears.

10.6 Remedies Cumulative

No remedy conferred upon or reserved to the Landlord under this Lease, by statute or otherwise, will be considered exclusive of any other remedy, but the same will be cumulative and in addition to every other remedy available to the Landlord and all such remedies and powers of the Landlord may be exercised concurrently and from time to time and as often as the Landlord deems expedient.

10.7 No Waiver

The failure of the Landlord to exercise any right or option in connection with any breach or violation of any term, covenant or condition herein contained will not be deemed to be a waiver or relinquishment of such term, covenant, or condition or any subsequent breach of the same or any other term, covenant or condition herein contained. The subsequent acceptance of the Rent or any portion hereunder by the Landlord will not be deemed to be a waiver of a preceding breach by the Tenant of any term, covenant or condition of this Lease other than the failure of the Tenant to pay the particular amount of the Rent so accepted, regardless of the Landlord’s knowledge of such preceding breach at the time of acceptance of such amount of the Rent.

10.8 Interest

Interest on any money due to the Landlord under this Lease will be paid by the Tenant and will accrue at the rate of Prime Rate plus 2% per annum, such rate of interest to be calculated and compounded monthly, not in advance, from the respective date upon which any such money becomes due to the Landlord.

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ARTICLE 11

DAMAGE AND DESTRUCTION/EXPROPRIATION

11.1 Damage and Destruction

The Landlord and the Tenant agree that:

(a) if all or any part of the Premises is damaged by fire or other casualty and all or a portion of the Premises is rendered unusable by the Tenant (as determined by the tenant, acting reasonably and in good faith), then Rent will abate, in the proportion that that part of the Premises which is rendered unusable bears to the whole of the Premises.;

(b) except as provided in Subsection 11.1(c), if the Premises are damaged by fire or other casualty insured against by the Landlord or for the Landlord’s benefit, the damage to the Premises will be repaired by the Landlord at its expense except that repairs to installations, alterations, additions, partitions, improvements and fixtures made by or on behalf of the Tenant or any part thereof will be performed by the Tenant. All repairs which the Landlord is required to make under this Subsection 11.1(b) will be made with due diligence, provided that the Landlord will not be liable to the Tenant for any loss or damage suffered by the Tenant as a result of any delay which may arise by reason of adjustment of insurance on the part of the Landlord or on account of labour troubles or any other cause beyond the Landlord’s control; and

(c) notwithstanding the foregoing, the Landlord will have no obligation to repair, reconstruct or restore the Premises or the Building if any of the following occurs:

(i) the Building is damaged by fire or other casualty to the extent that it cannot reasonably be repaired or rebuilt within 180 days after the occurrence of such damage;

(ii) the holder of any mortgage or security agreement encumbering the Premises elects not to permit the insurance proceeds payable upon damage to or destruction of the Building or Premises to be used for such repair, reconstruction or restoration;

(iii) the damage or destruction is not fully covered by insurance maintained by the Landlord or for the Landlord’s benefit; or

(iv) the damage or destruction occurs during the last 24 months of the initial Term or any extension or renewal thereof.

If the Landlord decides not to restore the Building, the Landlord will, within 90 days after the happening of such fire or other casualty, give to the Tenant a notice in writing of such decision and the Term and any extension thereof will expire forthwith and the Tenant will vacate the Premises and surrender them to the Landlord within 90 days of receiving such notice. If the Building is damaged to the extent set out above and the Landlord does not give notice of a decision not to restore, the Landlord will diligently proceed to repair the Building to the extent set out in Subsection 11.1(b). Upon the termination of this Lease by the Landlord as provided in this Subsection 11.1(c), the Tenant’s liability for the Rent will cease as of the day following the fire or casualty.

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11.2 Expropriation

It the Premises will be acquired or condemned by an authority having the power for such acquisition or condemnation then the Term and any extension thereof will cease from the date of entry by such authority. Nothing in this Lease will prevent the Landlord or the Tenant or both from recovering damages from such authority for the value of their respective interests or for such other damages and expenses allowed by law.

ARTICLE 12

MISCELLANEOUS

12.1 No Warranties

No representations, warranties, agreements or conditions have been made to or for the Landlord or the Tenant other than those expressed herein, and no agreement collateral to this Lease will be binding upon the Landlord or the Tenant unless it is made in writing and duly executed by the Landlord and the Tenant.

12.2 Notices

Any notice, demand, request, consent, invoice, objection or other instrument which may be or is required to be given under this Lease will be in writing and delivered personally or sent by registered mail, postage prepaid, or by e-mail (except that cheques and other documents requiring an original signature by law may not be sent by email), and will be addressed, if to the Landlord, to the address set out in Paragraph 1.1(a)(ii) and, if sent by email, to the email address set out in Paragraph 1.1(a)(iii) and, if to the Tenant, to the Premises or, at the Landlord’s option, to the address set out in Paragraph 1.1(b)(ii) (if different) or to the Tenant’s registered office in Alberta or in any other jurisdiction and, if sent by email, to the email address set out in Paragraph 1.1(b)(iii). In the event of a postal disruption, any notice will only be delivered personally or sent by email.

Any such notice will be conclusively deemed to have been given or made on the day on which such notice is delivered or, if sent by registered mail, then 72 hours following the date of mailing or, if sent by email, on the date the email was transmitted.

Either party may from time to time give written notice to the other (in the manner provided in this Section 12.2) of any change of address or email address of the party giving such notice and, from and after the giving of such notice, the address or email address therein specified will be deemed to be the address or email address of such party for the purpose of giving notice hereunder.

12.3 Overholding

If the Tenant holds over after the expiration of the Term or any extension thereof and the Landlord accepts Rent or any portion thereof, the new tenancy thereby created will be deemed a monthly tenancy and not a yearly tenancy and will be subject to the covenants and conditions contained in this Lease insofar as they are applicable to a monthly tenancy, except that the monthly instalments of Annual Basic Rent will be 150% of the monthly instalments of Annual Basic Rent payable for the last month of the Term or any extension thereof. In the future event that a replacement lease shall subsequently come into effect, any excess rental paid by the Tenant to the Landlord in pursuant of this Section 12.3 shall be adjusted in accordance with such replacement lease for the commencement date thereof and an appropriate adjusting payment shall be made by the Landlord to the Tenant.

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12.4 Continuation of Obligations

This Lease and the obligations of the Tenant under it will continue in full force and effect notwithstanding any change in the person or persons comprising the Landlord.

12.5 Assignment by Landlord

If there is a sale, lease or other disposition by the Landlord of the Premises or any part thereof, or the assignment by the Landlord of this Lease or any interest of the Landlord hereunder, and to the extent that the purchaser or assignee assumes the covenants and obligations of the Landlord hereunder, the Landlord will, thereupon and without further agreement, be relieved of all further liability with respect to its covenants and obligations.

12.6 Caveat

The Tenant shall be permitted to register a caveat in respect of this lease against title to the Premises provided no financial terms of this Lease are disclosed on said caveat. Such caveat shall be removed by the Tenant within a reasonable time after the Tenant vacates the Premises.

12.7 Acknowledgement re Condominium Unit

The provisions contained in this Lease shall be subject to and deemed to be modified as required to reflect the fact that the Premises comprise a unit in a condominium of which the Landlord is an owner and that certain payments and obligations of the Landlord may in fact be made or performed by the Condominium Corporation, notwithstanding which, the Landlord shall be deemed to have fulfilled its obligations hereunder. It is further understood that certain payments and obligations of the Tenant may in fact be made or performed by the Condominium Corporation and that the costs of the same may be included in the monthly condominium fees rather than charged to the Tenant under certain other Additional Rent provisions found in this Lease. Accordingly, it is agreed that the Additional Rent charged to the Tenant under this Lease shall be without duplication with respect to utilities or services supplied by the Condominium Corporation and paid for by the Tenant by way of condominium fees and charged to the Tenant as Operating Costs.

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ARTICLE 13

INTERPRETATION

13.1 Interpretation

The parties agree that:

(a) This Lease will be construed in accordance with, and governed by, the laws of Alberta.

(b) All of the provisions of this Lease are to be construed as covenants and agreements as though the words importing such covenants and agreements were used in each separate provision hereof.

(c) If any provision or provisions of this Lease is found to be illegal or not enforceable it or they will be considered separate and severable from this Lease and its remaining provisions will remain in force and be binding upon the parties hereto as though the said provision or provisions had never been included.

(d) Time is of the essence of this Lease.

(e) The headings of the Articles and Sections in this Lease are inserted for convenience only and in no way define, limit, construe or describe the scope or intent of such Articles or Sections nor in any way affect this Lease.

(f) This Lease will extend to, be binding upon and enure to the benefit of the Landlord and the Tenant and their respective successors and permitted assigns.

(g) This Lease sets out the entire agreement between the parties with respect to the subject matter of this Lease and will not be modified, amended or waived except by an instrument in writing duly executed and delivered by the parties or by their successors and permitted assigns.

(h) This agreement may be signed and accepted in counterpart and delivered by facsimile or portable document format (pdf).

SIGNATURE PAGE TO FOLLOW

….INTENTIONAL PAGE BREAK

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IN WITNESS WHEREOF the parties hereto have duly executed and delivered this Lease as of the day and year first above written.

TENANT :	FLEX LEASING POWER AND SERVICE ULC
	Per:	/s/ [ILLEGIBLE]
LANDLORD :	BENNETT FINANCIAL CORP.
	Per:

EX-10.13

Exhibit 10.13

AGREEMENT TO RENEW LEASE MADE THIS 1^st DAY OF JULY, 2020;

BETWEEN:

BENNETT FINANCIAL CORP.

(hereinafter called “the Landlord”)

-and-

FLEX LEASING POWER AND SERVICE ULC

(hereinafter called “the Tenant”)

WHEREAS by a written lease agreement dated the 1^st day of December, 2015 (the “Lease”), the Landlord leased to the Tenant the premises legally described as follows:

CONDOMINIUM PLAN 1320815

UNIT 2

AND 5000 UNDIVIDED ONE TEN

THOUSANTH SHARES IN THE COMMON

PROPERTY

EXCEPTING THEREOUT ALL MINES AND MINERALS

AND WHEREAS the Term (as described in the Lease) of the Lease was renewed for a further year by a renewal agreement dated December 14, 2018 (the “First Renewal Agreement”);

AND WHEREAS the Term was subsequently renewed for a further year by a renewal agreement dated October 1^st, 2019 (the “Second Renewal Agreement”);

AND WHEREAS the World Health Organization has declared a pandemic caused by the COVID-19 coronavirus (the “Pandemic”);

AND WHEREAS the Pandemic has caused economic hardship to businesses in Alberta and abroad;

AND WHEREAS the Landlord recognizes the Pandemic has affected the business of the Tenant and has offered to abate the Tenant’s monthly rent by 30% ($3,645.00) for a monthly amount payable of $8,505.00 plus GST for the months of June 2020, July 2020, and August 2020 (the “Abatement”);

AND WHEREAS in consideration for the Abatement, the Tenant has agreed to extend the Term of its Lease for one year;

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

1. The Landlord has agreed with the Tenant to renew the Lease for a period of one (1) year to commence on the 1^st day of January, 2021 and end on the 31^st day of December, 2021 (the “Third Renewal Term”).

Page 2

2. The Annual Basic Rent described in 1.1(g) of the Lease shall be $145,800.00 + GST ($18.00/sq ft + GST) for the Third Renewal Term.

3. The Landlord and the Tenant agree that section 3.1(a) of the Lease shall be amended to read as follows:

(a) Beginning on January 1, 2021, Annual Basic Rent for each Lease Year, payable in advance in equal consecutive monthly instalments of $12,150.00 plus GST on the first day of each month in each year of the Third Renewal Term;

4. The Tenant and Landlord further agree that the Lease for this Third Renewal Term shall be on the same terms and conditions as the initial Lease except as set out herein.

5. The Tenant further agrees to pay the following sums, as Additional Rent, on or before January 1^st, 2021:

a. $10,600.00 + GST, which represents 10% of the grading costs for the Premises.

6. All other terms and conditions of the Lease will continue in force and effect, except there shall be no right to renew the Lease unless by agreement between the Parties hereto.

7. This Agreement shall be binding upon and enure to the benefit of the heirs, executors, administrators, successors and assigns of the Parties hereto.

8. This Agreement may be signed and accepted in counterpart and delivered by facsimile or portable document format (pdf).

IN WITNESS WHEREOF the Parties hereto have executed this agreement effective the day, month and year first above written.

BENNETT FINANCIAL CORP.

Per:

/s/ [ILLEGIBLE]

(authorized signatory)

FLEX LEASING POWER AND SERVICE ULC

Per:

/s/ [ILLEGIBLE]

(authorized signatory)

EX-10.14

Exhibit 10.14

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21 . i.l TEXAS REALTORS COMMERCIAL LEASE USE Of THIS FORM BY PERSONS IM-tO ARE NOT MEMBERS OF n;e TEXAS ASSOCIATION OF REAL TORse . INC. IS NOT AlmlORIZED. OTnaa Auocllllon of ~L TO- . Inc. 2014 Table of Contents Paragraph Description Parties .......................................................... 2 Leased Premises ..... ... . .. . . .. . . .... .. . . ... . ... ... .. .. . . 2 Term A. Term ...................................................... 2 B. Delay of Occupancy ............................... 2 C. Certificate of Occupancy ........................ 3 Rent and Expenses A. Base Monthly Rent ................................. 3 B. Addit ional Rent ....................................... 3 C. First Full Month's Rent ........................... 3 D. Prorated Rent ......................................... 3 E. Place of Payment ................................... 3 F. Method of Payment ................................ 3 G. Late Charges ......................................... 4 H. Returned Checks ........ ........................... 4 Security Deposit ........................................... 4 Taxes ............................................................ 4 Utilities .......................................................... 4 Insurance ....................................... ......... ...... 5 Use and Hours ............................................. 6 Legal Compliance ......................................... 6 Signs ............................................................ 6 Access By Landlord ...................................... 7 Move-In Condition ........................................ 7 Move-Out condition ..................................... 7 Maintenance and Repairs A. Cleaning ................................................. 7 B. Conditions Caused by a Party ................ 8 C. Repair & Maintenance Responsibility J 8 D. Repair Persons ...................................... 8 E. HVAC Service Contract ......................... 9 F. Common Areas ...................................... 9 G. Notice of Repairs ................................... 9 H. Failure to Repair .................................... 9 Alterations ..... ............................................... 9 Liens ............................................................. 9 Liability ......................................................... 9 Indemnity ...................................................... 10 Removal of Property & Lockout .................... 1 O 24. 25. 26. 27. 28. 29. 30. 31 . 32. 33. 34. 35. 36. 00 □ □ □ □ 8 D D D P a ragraph D e scription Assignment and Subletting ........................... 11 Relocation . . . . .. . . . .. . . .. . . . . . .. . . . . .. . ... . .. . . .. .. . . . . . . . . . . . 11 Subordination . .. . .... . . .. .... . . .. .. .. .. . ... . .. .. .. .. . .. . . . . . 11 Estoppel Certificates & Financial Info ........... 11 Casualty Loss ............................................... 12 Condemnation .............................................. 12 Attorney's Fees ............................................. 12 Representations ........................................... 12 Brokers ......................................................... 13 Addenda ....................................... ................ 13 Notices ......................................................... 13 Special Provisions ........................................ 14 Agreement of the Parties .............................. 14 ADD ENDA & EXHIBITS {check all that apply) Exhibit A - Building Plans Exhibit B Photos & Finishout Commercial Lease Addendum for Broker's Fee (TXR-2102) Commercial Lease Addendum for Expense Reimbursement {TXR-2103) Commercial Lease Addendum for Extension Option {TXR-2104) . Commercial Lease Addendum for Percentage Rent (TXR-2106) Commercial Lease Addendum for Parking (TXR-2107) Commercial Landlord's Rules and Regulations (TXR-2108) Commercial Leas~ Guaranty (TXR-2109) Commercial Lease Addendum for Right of First Refusal (TXR-2105) Commercial Lease Addendum for Optional Space (TXR-2110) Commercial Lease Addendum for Construction (TXR-2111 ) or (TXR-2112) Commercial Lease; Addendum for Contingencies (TXR-2119) ~~:n u ~~~~~~t:·i~t~~; ~·pti~- ~·-~f·Utilii~~:·········· 10 ~ 22. Holdover ....................................................... 10 x Information About Brokerage Services 23. Landlord's Lien & Security Interest ............... 11 {TXR-2501) (TXR-2101) 4-1-14 Initialed for Identification by Landlord: "'~v , __ , and Tenant: r/, __ _ Page 1 of 15 :\ 'RG Jl,all y Grogp. LLC. 6191 Hl11hw,,y 161,S¥kt ◄J0 lrv lll;TX 750.lll Phone' (l141534•'11l76 Fax. J1111lo Dodd Produced wi1h zipForm® by z,ploglx 18070 Fifteen Milt Road, Fraser, Mich~ "8026 ,.,..,,, JiRb pgix oom nex Le11lng

i.l TEXAS REALTORS COMMERCIAL LEASE USE OF THIS FORM BY PERSONS \MIO ARE NOT MEMBERS OF THE TEXAS ASSOCIATION OF REALTORS®, INC. IS NOT AIJll,IORIZEO. OTtlH AHociatlon of REALTORS®, Inc. 2014 1. PARTIES: The parties to this lease are: Landlord: West Epley LLC ___ ___________________________ ; and Tenant: Flex Leasing Power and Service, LLC 2. LEASED PREMISES: A. Landlord leases to Tenant the following described real property, known as the "leased premises," along with all its improvements (Check only one box): D (1) Multiple-Tenant property: Suite or Unit Number ____ containing approximately _ ___ _ square feet of rentable area in _ _________________ (project name) at .-:---:-:----------------~---------------- (address) in ____________ (city), ___________ (county), Texas, which is legally described on attached Exhibit or as follows: ~ (2) Sjngle-Tenant Property: The real property containing approximately _ ___;1:..::o=o-=-00=--- square feet of rentable area at: 13906 W IH 20 E ________________________ _ ___ (address) in Odessa (city), - ---~ M =id=l=an::.:.d;;;...._ ____ (county), Texas, which is legally described on attached Exhibit or as follows: Lot 6 Block 2 Sandridge being 5.01 Acres B. If Paragraph 2A(1) applies: (1) "Property" means the building or complex In which the leased premises are located, inclusive of any common areas, drives, parking areas, and walks; and (2) the parties agree that the rentable area of the leased premises may not equal the actual or useable area within the leased premises and may include an allocation of common areas in the Property. The rentable area D will lil will not be adjusted if re-measured. 3. TERM: A Term: The term of this lease is 60 months and __ ........;. 1-=-6--'---_ days, commencing on: August 15, 2019 (Commencement Date} and ending on August 31, 2024 (Expiration Date}. B. Delay of Occupancy: If Tenant is unable to occupy the leased premises on the Commencement Date because of construction on the leased premises to be completed by Landlord that is not substantially (TXR-2101) 4-1-14 Initialed for Identification by Landlord: 'fdV. _ , and Tenant: X-., __ _ Page 2 of 15 Producad w!Ch zlpF om'41> by aoploglx 18070 Fifteen Mie Road. Fra ..,,._ M,ctugan 48026 Wttl/ ml ggjx com

13906 W IH 20 E Commercial Lease concerning: Odessa TX 79765 ===-:.:.:.....=.:..::.:... _____ _ _____________ _ ___ _ complete or a prior tenant's holding over of the leased premises, Landlord will not be liable to Tenant for such delay and this lease will remain enforceable. In the event of such a delay, the Commencement Date will automatically be extended to the date Tenant is able to occupy the Property and the Expiration Date will also be extended by a like number of days, so that the length of this lease remains unchanged. If Tenant is unable to occupy the leased premises after the 90th day after the Commencement Date because of construction on the leased premises to be completed by Landlord that is not substantially complete or a prior tenant's holding over of the leased premises, Tenant may terminate this lease by giving written notice to Landlord before the leased premises become available to be occupied by Tenant and Landlord will refund to Tenant any amounts' paid to Landlord by Tenant. This Paragraph 38 does not apply to any delay in occupancy caused by cl~aning or repairs. C. Certificate of Occupancy: Unless the parties agree otherwise, Tenant is responsible for obtaining a certificate of occupancy for the leased premises if required by a governmental body. 4. RENT AND EXPENSES: A. Base Monthly Rent: On or before the first day of each month during this lease, Tenant will pay Landlord base monthly rent as described on attached Exhibit N/A or as follows: Dates Rate per rentable square foot (optional) Base Monthly From To $ Monthly Rate $ Annual Rate Rent$ 08/15/2019 08/31/2019 I rsf / month / rsf / vear 12 051.61 09/01/2019 08/31/2024 / rsf / month / rsf I year 23 350.00 / rsf I month / rsf I vear I rsf / month / rsf / vear I rsf / month / rsf I year B. Additjonal Rent: In addition to the base monthly rent, Tenant will pay Landlord all other amounts, as ~ ovided by the attached (Check all that apply.): (1) Commercial Lease Addendum for Expense Reimbursement (TXR-2103) (2) Commercial Lease Addendum for Percentage Rent (TXR-2106) (3) Commercial Lease Addendum for Parking (TXR-2107) (4) Reimbursement for Property taxes and Property Insurance billed by Landlord. All amounts payable under the applicable addenda are deemed to be "rent" for the purposes of this lease. C. Fjrst Fun Month's Rent: The first full monthly rent is due on or before - - --= S =-"e,:.c p:.:;t e:.: m=b=e=-r _,_1,a..:2::..;0::...;1:.::9 '----- D. Prorated Rent: If the Commencement Date is on a day other than the first day of a month, Tenant will pay Landlord as prorated rent, an amount equal to the base monthly rent multiplied by the following fraction: the number of days from the Commencement Date to the first day of the following month divided by the number of days in the month in which this lease commences. The prorated rent is due on or before the Commencement Date. E. Place of Payment: Tenant will remit all amounts due to Landlord under this lease to the following person at the place stated or to such other person or place as Landlord may later designate in writing: Name: West Epley LLC via Electronic Payment Address: 327 E Loop 338 Odessa TX 79765 F. Method of Payment: Tenant must pay all rent timely without demand, deduction, or offset, except as permitted by law or this lease. If Tenant fails to timely pay any amounts due under this lease or if any (TXR-2101) 4-1-14 Initialed for Identification by Landlord: ~ , __ , and Tenant: !}C__ , _ _ _ Page 3 of 15 Prowcedw11h z,pfer .. ~y ziplogix 18070 Flt_, Mile Road FraH<. M'Chgan 48026 WM1 n,tgqlx cgm

13906 W IH 20 E Commercial Lease concerning: Odessa TX 79765 ~----~=-'-"-'-.=;.::;....-______________________ _ check of Tenant is returned to Landlord by the institution on which it was drawn, Landlord after providing written notice to Tenant may require Tenant to pay subsequent amounts that become due under this lease in certified funds. This paragraph does not limit Landlord from seeking other remedies under this lease for Tenant's failure to make timely payments with good funds. G. Late Charges: If Landlord does not actually receive a rent payment at the designated place of payment within 5 days after the date it is due, Tenant will pay Landlord a late charge equal to 10% of the amount due. In this paragraph, the mailbox is not the agent for receipt for Landlord. The late charge is a cost associated with the collection of rent and Landlord's acceptance of , late charge does not waive Landlord's right to exercise remedies under Paragraph 20. H. Returned Checks: Tenant will pay$ 35.00 for each check Tenant tenders to Landlord which is returned by the institution on which it is drawn for any reason, plus any late charges until Landlord receives payment. 5. SECURITY DEPOSIT: A. Upon execution of this lease, Tenant will pay$ =2=3,=3-=-50=·--0-=-0 _______ to Landlord as a security deposit. B. Landlord may apply the security deposit to any amounts owed by Tenant under this lease. If Landlord applies any part of the security deposit during any time this lease is in effect to amounts owed by Tenant, Tenant must, within 10 days after receipt of notice from Landlord, restore the security deposit to the amount stated. C. Within 60 days after Tenant surrenders the leased premises and provides Landlord written notice of Tenant's forwarding address, Landlord will refund the security deposit less any amounts applied toward amounts owed by Tenant or other charges authorized by this lease. 6. TAXES: Unless otherwise agreed by the parties, Landlord will pay all real property ad valorem taxes assessed against the leased premises. 7. UTILITIES: A. The party designated below will pay for the following utility charges to the leased premises and any connection charges for the utilities. (Check all that apply.) (1) Water (2) Sewer (3) Electric (4) Gas (5) Telephone (6) Internet (7) Cable (8) Trash (9) ----------- - ---­ (10)AII other utilities ~ X Landlord Tenant X X X X X X X X B. The party responsible for the charges under Paragraph 7 A will pay the charges directly to the utility service provider. The responsible party may select the utility service provider except that if Tenant selects the provider, any access or alterations to the Property or leased premises necessary for the utilities may be made only with Landlord's prior consent, which Landlord will not unreasonably withhold. If Landlord incurs any liability for utility or connection charges for which Tenant is responsible to pay (TXR-2101) 4-1-14 Initialed for Identification by Landlord:~, __ . and Tenant: ?r , _ _ _ Page 4 of 15 PrOCM:ed w'oth i,pFormll) by zipl oglK 18070 Flf1een Mile Road, Fraser, t,11,c;higan 48026 -« ZlDLgpllC com

13906 W IH 20 E Commercial Lease concerning: Odessa TX 79765 ===-a.;.:_;..:;..:...=::.... ________________ _ ______ _ and Landlord pays such amount, Tenant will immediately upon written notice from Landlord reimburse Landlord such amount. C. Notice: Tenant should determine if all necessary utilities are available to the leased premises and are adequate for Tenant's Intended use. D. After-Hours HVAC Charges: "HVAC services" means heating, ventilating, and air conditioning of the leased premises. (Check one box only.) 0 (1) Landlord is obligated to provide the HVAC services to the leased premises only during the Property's operating hours specified under Paragraph 9C. 0 (2) Landlord will provide the HVAC services to the leased premises during the operating hours specified under Paragraph 9C for no additional charge and will, at Tenant's request, provide HVAC services to the leased premises during other hours for an additional charge of $ ______ _ per hour. Tenant will pay Landlord the charges under this paragraph immediately upon receipt of Landlord's invoice. Hourly charges are charged on a half-hour basis. Any partial hour will be rounded up to the next half hour. Tenant will comply with Landlord's procedures to make a request to provide the additional HVAC services under this paragraph. ~ (3) Tenant will pay for the HVAC services under this lease. 8. INSURANCE: A During all times this lease is in effect, Tenant must, at Tenant's expense, maintain in full force and effect from an insurer authorized to operate in Texas: (1) public liability insurance naming Landlord as an additional insured with policy limits on an occurrence basis in a minimum amount of: (check only (a) or (b) below) D (a} $1 ,000,000; or ~ (b) $2,000,000. If neither box is checked the minimum amount will be $1 ,000,000. (2) personal property damage insurance for the business operations being conducted in the leased premises and contents in the leased premises in an amount sufficient to replace euch contents after a casualty loss; and 0 (3) business interruption insurance sufficient to pay 12 months of rent payments; B. Before the Commencement Date, Tenant must provide Landlord with a copy of insurance certificates evidencing the required coverage. If the insurance coverage is renewed or changes in any manner or degree at any time this lease is in effect, Tenant must, not later than 10 days after the renewal or change, provide Landlord a copy of an insurance certificate evidencing the renewal or change. C. If Tenant fails to maintain the required insuranee in full force and effect at all times this lease is in effect, Landlord may: (1) purchase insurance that will provide Landlord the same coverage as ,he required insurance and Tenant must immediately reimburse Landlord for such expense; or (2) exercise Landlord's remedies under Paragraph 20. D. Unless the parties agree otherwise, Landlord will maintain in full force and effect insurance for: (1) fire and extended coverage in an amount to cover the reasonable replacement cost of the improvements of the Property; and (2) any public liability insurance in an amount that Landlord determines reasonable and appropriate. E. If there is an increase in Landlord's insurance premiums for the leased premises or Property or its contents that is caused by Tenant, Tenant's use of the leased premises, or 1ny improvements made by or for Ten ant, Tenant will, for each year this lease is in effect. pay Landlord the increase immediately {TXR-2101) 4-1-14 Initialed for Identification by Landlord: .{\/ . __ . and Tenant:~, ___ Page 5 of 15 Produced with zjpFcnnlD by ziplogD< 18070 Fillean M,le Road. F rH et, Michigan 48026 www.zml og,x com

13906 W IH 20 E Commercial Lease concerning: Odessa TX 79765 ..:;;..::==--..;.:;.;.....:...=.;~------------------------- after Landlord notifies Tenant of the increase. Any charge to Tenant under this Paragraph 8E will be equal to the actual amount of the increase in Landlord's insurance premium. 9. USE ANO HOURS: A. Tenant may use the leased premises for the following purpose and no other: General Office and administrative work, storage and maintenance of gas powered generators, trailers, trucks, electrical equipment, and other equipment owned, leased, or used by Tenant. B. Unless otherwise specified in this lease, Tenant will operate and conduct its business in the leased premises during business hours that are typical of the industry in which Tenant represents it operates. C. The Property maintains operating hours of (specify hours, days of week, and if inclusive or exclusive of weekends and holidays): as determined by Tenant 10. LEGAL COMPLIANCE: A. Tenant may not use or permit any part of the leased premises or the Property to be used for: (1) any activity which is a nuisance or is offensive, noisy, or dangerous; (2) any activity that interferes with any other tenant's normal business operations or Landlord's management of the Property; (3) any activity that violates any applicable law, regulation, zoning ordinance, restrictive covenant, governmental order, owners' association rules, tenants' association rules, Landlord's rules or regulations, or this lease; (4) any hazardous activity that would require any insurance premium on the Property or leased premises to increase or that would void any such insurance; (5) any activity that violates any applicable federal, state, or local law, including but not limited to those laws related to air quality, water quality, hazardous materials, wastewater, waste disposal, air emissions, or other environmental matters; (6) the permanent or temporary storage of any hazardous material; or (7) Steam Cleaning and Power Washing in approved areas only. No employee Housing or lodging on the property. No water sales from the property. B. "Hazardous material" means any pollutant, toxic substance, hazardous waste, hazardous material, hazardous substance, solvent, or oil as defined by any federal, state, or local environmental law, regulation, ordinance, or rule existing as of the date of this lease or later ena. cted. C. Landlord does not represent or warrant that the leased premises or Property conform to applicable restrictions, zoning ordinances, setback lines, parking requirements, impervious ground cover ratio requirements, and other matters that may relate to Tenant's intended use, . Tenant must satjsfy itself that the leased premises may be used as Tenant intends by independently investigating all matters related to the use of the leased premises or Property. Tenant agrees that it js not relying on any warranty or representation made by Landlord, Landlord's agent, or any broker concerning the use of the leased premises or Property, 11. SIGNS: A. Tenant may not post or paint any signs or place any decoration outside the leased premises or on the Property without Landlord's written consent. Landlord may remove any unauthorized sign or decorations, and Tenant will promptly reimburse Landlord for its cost to remove any unauthorized sign or decorations. (TXR-2101) 4•1-14 Initialed for Identification by Landlord: ~jl/ , __ , and Tenant~. ___ Page 6 of 15 Produc:edwilh z,pFonr,eby zil)LoglX 18070 Fjjeen Mile Road. Fraser, M' ~ 48026 www ZIPb999 G9ID

13906 W IH 20 E Commercial Lease concerning: Odessa TX 79765 -====-'=-;...:;.:..-z.. _ ______________________ _ B. Any authorized sign must comply with all laws, restrictions, zoning ordinances, and any governmental order relating to signs on the leased premises or Property. Landlord may temporarily remove any authorized sign to complete repairs or alterations to the leased premises or the Property. C. By providing written notice to Tenant before this lease ends, Landlord may require Tenant, upon move­ out and at Tenant's expense, to remove, without damage to the Property or leased premises, any or all signs or decorations that were placed on the Property or leased premises by or at the request of Tenant. Any signs or decorations that Landlord does not require Tenant to remove and that are fixtures, become the property of the Landlord and must be surrendered to Landlord at the time this lease ends. 12. ACCESS BY LANDLORD: A. During Tenant's normal business hours Landlord may enter the leased premises for any reasonable purpose, including but not limited to purposes for repairs, maintenance, alterations, and showing the leased premises to prospective tenants or purchasers. Landlord may access the leased premises after Tenant's normal business hours if : (1) entry is made with Tenant's permissi'on; or (2) entry is necessary to complete emergency repairs. Landlord will not unreasonably interfere with Tenant's business operations when accessing the leased premises. B. During the last ~ days of this lease, Landlord may place a "For Lease" or similarly worded sign on the leased premises. 13. MOVE-IN CONDITION: Tenant has inspected the leased premises and accepts it in its present (as-is) condition unless expressly noted otherwise in this lease or in an addendum. Landlord and any agent have made no express or irooUed warranties as to the condition or permitted use of the leased premises or Property. 14. MOVE-OUT CONDITION ANO FORFEITURE OF TENANT'S PERSONAL PROPERTY: A. At the time this lease ends, Tenant will surrender the leased premises in the same condition as when received, except for normal wear and tear. Tenant will leave the leased premises in a clean condition free of all trash, debris, personal property, hazardous materials, and environmental contaminants. B. If Tenant leaves any personal property in the leased premises after Tenant surrenders possession of the leased premises, Landlord may: (1) require Tenant, at Tenant's expense, to remove the personal property by providing written notice to Tenant; or (2) retain such personal property as forfeited property to Landlord. C. "Surrender" means vacating the leased premises and returning all keys and access devices to Landlord. "Normal wear and tear" means deterioration that occurs without negligence, carelessness, accident, or abuse. D. By providing written notice to Tenant before this lease ends, Landlord may require Tenant, upon move­ out and at Tenant's expense, to remove, without damage to the Property or leased premises, any or all fixtures that were placed on the Property or leased premises by or at the request of Tenant. Any fixtures that Landlord does not require Tenant to remove become the property of the Landlord and must be surrendered to Landlord at the time this lease ends. 15. MAINTENANCE AND REPAIRS: A. Cleanjng: Tenant must keep the leased premises clean and sanitary and promptly dispose of all garbage in appropriate receptacles. D Landlord ~ Tenant will provide, at its expense, janitorial services to the leased premises that are customary and ordinary for the property type. Tenant will maintain any grease trap on the Property which Tenant uses, including but not limited to periodic (TXR-21 01) 4-1-14 Initialed for Identification by Landlord:~ , __ , and Tenant:~, __ _ Page 7 of 15 Producedwilh Zl)FO<mllb-/ ZJplogoc 18070 Fifteen Mole Road, FraSM, Mlchigan 48026 www z10Logn, com

13906 W IH 20 E Commercial Lease concerning: Odessa TX 79765 -~~-----........ ~----- ------------------- emptying and cleaning, as well as making any modification to the grease trap that may be necessary to comply with any applicable law. B. Repairs of Condjtjons Caused by a Party: Each party must promptly repair a condition in need of repair that is caused, either intentionally or negligently, by that party or that party's guests, patrons, invitees, contractors or permitted subtenants. c. Repair and Maintenance Responsibility: Except as otherwise provided by this Paragraph 15, the party designated below, at its expense, is responsible to maintain and repair the following specified items in the leased premises (if any). The specified items must be maintained iri clean and good operable condition. If a governmental regulation or order requires a modification to any of the specified items, the party designated to maintain the item must complete and pay the expense of the modification. The specified items include and relate only to real property in the leased premises. Tenant is responsible for the repair and maintenance of its personal property. (Check all that apply.) m ~~~:i=~~"_:.~:a:~•. ~ . .. II~:.'~~'.. ~~~ ~t~~~ . •t~ . ~~' . •.l~~~~~~~~t~ .: ::: N ~/A Lan~ ~ord Te i:~ant (3) Fire protection equipment .................................................................. . (4) Fire sprinkler systems ....................................................................... . (5) Exterior & overhead doors, including closure devices, molding, locks, and hardware .... ........ .......... ... . .. ............... .... .... . .... .... .... .... .. ..... 0 (6) Grounds maintenance, including landscaping and irrigation systems .............................................................................................. 0 (7) Interior doors, including closure devices, frames, molding, locks, and hardware ..................................................................................... . (8) Parking areas and walks .................................................................... . (9) Plumbing systems, drainage systems and sump pumps .................. .. (10) Electrical systems, mechanical systems .......................................... .. (11) Ballast and lamp replacement .......................................................... .. (12) Heating, Ventilation and Air Conditioning (HVAC) systems ............... . (13)HVAC system replacement ................................................................ . (14) Signs and lighting: .............................................................................. . (a) Pylon ............................................................................................ . (b) Facia ............................................................................................ . (c) Monument .................................................................................... . (d) Door/Suite .................................................................................... . (e) Other: _ ______________ ............. X (15) Extermination and pest control, excluding wood-destroying insects. (16) Fences and Gates ............................................................................. . (17) Storage yards and storage buildings ................................................ .. (18) Wood-destroying insect treatment and repairs ................................. .. (19) Cranes and related systems ............................................................. .. (20)N/A (21)M/A (22) All other items and systems .............................................................. .. □ □ X D. Repair Persons: Repairs must be completed by trained, qualified, and insured repair persons. (TXR-2101) 4-1-14 Initialed for Identification by Landlord: ~ , __ , .tnd Tenant: ,;y-- , __ _ Produced Wllh z,pForm®by z,plogbc 18070 Fifteen M,le Road, FraHr. Mldllgan 40026 www zoplggjx GP!D X X X X X X X X X X X X X X X X Page 8 of 15

13906 W IM 20 E Commercial Lease concerning: Odessa TX 79765 ~=-="'""--'"-'-'--'--'-=------------------------- E. HVAC Servjce Contract: If Tenant maintains the HVAC system under Paragraph 15C(12), Tenant D is ~ is not required to maintain, at its expense, a regularly scheduled maintenance and service contract for the HVAC system. The maintenance and service contract must be purchased from a HVAC maintenance company that regularly provides such contracts to similar properties. If Tenant fails to maintain a required HVAC maintenance and service contract in effect at all times during this lease, Landlord may do so and Tenant will reimburse Landlord for the expense of such maintenance and service contract or Landlord may exercise Landlord's remedies under Paragraph 20. F. Common Areas: Landlord will maintain any common areas in the Prope~y in a manner as Landlord determines to be in the best interest of the Property. Landlord will maintain any elevator and signs in the common area. Landlord may change the size, dimension, and location of any common areas, provided that such change does not materially impair Tenant's use and access to the leased premises. Tenant has the non-exclusive license to use the common areas in compliance with Landlord's rules and regulations. Tenant may not solicit any business in the common areas or interfere with any other person's right to use the common areas. This paragraph does not apply if Paragraph 2A(2) applies. G. Notice of Repairs: Tenant must promptly notify Landlord of any item that is in need of repair and that is Landlord's responsibility to repair. All requests for repairs to Landlord must be in writing. H. Failure to Repair: Landlord must make a repair for .which Landlord is responsible within a reasonable period of time after Tenant provides Landlord written notice of the needed repair. If Tenant fails to repair or maintain an item for which Tenant is responsible within 4G days after Landlord provides Tenant written notice of the needed repair or maintenance, Landlord may: (1) repair or maintain the item, without liability for any damage or loss to Tenant. and Tenant must immediately reimburse Landlord for the cost to repair or maintain; or (2) exercise Landlord's remedies under Paragraph 20. 16. ALTERATIONS: A. Tenant may not alter (including making any penetrations to the roof, exterior walls or foundation), improve, or add to the Property or the leased premises without Landlord's written consent. Landlord will not unreasonably withhold consent for the Tenant to make reasonable non-structural alterations. modifications, or improvements to the leased premises. B. Tenant may not alter any locks or any security devices on the Property or the leased premises without Landlord's consent. If Landlord authorizes the changing, addition, or rekeying of any locks or other security devices, Tenant must immediately deliver the new keys and access devices to Landlord. C . If a governmental order requires alteration or modification to the leased premises, the party obligated to maintain and repair the item to be modified or altered as designated in Paragraph 15 will, at its expense, modify or alter the item in compliance with the order and in compliance with Paragraphs 16A and 17. D. Any alterations, improvements, fixtures or additions to the Property or leased premises installed by either party during the term of this lease will become Landlord's property and must be surrendered to Landlord at the time this lease ends, except for those fixtures Landlord requires Tenant to remove under Paragraph 11 or 14 or if the parties agree otherwise in writing. 17. LIENS: Tenant may not do anything that will cause the title of the Property or leased premises to be encumbered in any way. If Tenant causes a lien to be filed against the Property or leased premises, Tenant will within 20 days after receipt of Landlord's demand: (1) pay the lien and have the lien released of record; or (2) take action to discharge the lien. Tenant will provide Landlord a copy of any release Tenant obtains pursuant to this paragraph. 18. LIABILITY: Jo the extent permitted by law, Landlord is NOT responsible to Tenant or Tenant's employees, patrons, guests. or invitees for any damages, injuries, or losses to person or property caused by: (TXR-2101) 4-1-14 Initialed for Identification by Landlord:~ , __ , and Tenant: ~ . ___ Page 9 of 15 Produced will\ z,pFoor,4!1 by ziploglx 18070 Fofteen Mile Road. Fraser, M,a,,gan 48026 www ziploqQC com Flntn1lng

13906 W IH 20 E Commercial Lease conceming: .,_ O=de=s:.:::s.:.ia...:T.:..:X~7:..:9c.:.7;::.:65::,__ ___________________ _ __ _ A an act, omission. or neglect of: Tenant: Tenant's agent: Tenant's guest; Tenant's employees· Tenant's patrons; Tenant's jnyitees: or any other tenant on the Property: B. fire, flood, water leaks, ice, snow, hail, winds, explosion. smoke riot. strike. interruption of utilities, theft, burgiacy robbery. assault. vandalism other persons. environmental contaminants, or other occurrences or casualty losses. 19. INDEMNITY: Each party will indemnify. defend, and hold the other party harmless from any property damage. personal injury, suits, actions. ljabjljties. damages, cost of repairs or service to the leased premises or Property or any other loss caused, negligently or otherwise. by that party or that party's employees, patrons guests, or invitees. 20. DEFAULT: A. If Landlord fails to comply with this lease within 30 days after Tenant notifies Landlord of Landlord's failure to comply, Landlord will be in default and Tenant may seek any remedy provided by law. If, however, Landlord's non-compliance reasonably requires more than 30 days to cure, Landlord will not be in default if the cure is commenced within the 30-day period and is diligently pursued. B. If Landlord does not actually receive at the place designated for payment any rent due under this lease within 5 days after it is due, Tenant will be in default. If Tenant fails to comply with this lease for any other reason within 10 days after Landlord notifies Tenant of its failure to comply, Tenant will be in default. C. If Tenant is in default, Landlord may, with at least .a days written notice to Tenant: (i) terminate this lease, or (ii) terminate Tenant's right to occupy the leased premises without terminating this lease and may accelerate all rents which are payable during the remainder of this lease or any renewal period. Landlord will attempt to mitigate any damage or loss caused by Tenant's breach by using commercially reasonable means. If Tenant is in default, Tenant will be liable for: (1) any lost rent; (2) Landlord's cost of reletting the leased premises, including brokerage fees, advertising fees, and other fees necessary to relet the leased premises; (3) repairs to the leased premises for use beyond normal wear and tear; (4) all Landlord's costs associated with eviction of Tenant, such as attorney's fees, court costs, and prejudgment interest; (5) all Landlord's costs associated with collection of rent such as collection fees, late charges, and returned check charges; (6) cost of removing any of Tenant's equipment or fixtures left on the leased premises or Property; (7) cost to remove any trash, debris, personal property, hazardous materials, or environmental contaminants left by Tenant or Tenant's employees, patrons, guests, or invitees in the leased premises or Property; (8) cost to replace any unreturned keys or access devices to the leased ~remises, parking areas, or Property; and (9) any other recovery to which Landlord may be entitled under this lease or under law. 21.ABANDONMENT, INTERRUPTION OF UTILITIES, REMOVAL OF PROPERTY, ANO LOCKOUT: Chapter 93 of the Texas Property Code governs the rights and obligations of the parties with regard to: (a) abandonment of the leased premises; (b) interruption of utilities: (c) removal of Tenant's property; and (d) "lock-out" of Tenant. 22. HOLDOVER: If Tenant fails to vacate the leased premises at the time this lease ends, Tenant will become a tenant-at-will and must vacate the leased premises immediately upon receipt of demand from Landlord. No holding over by Tenant, with or without the consent of Landlord, will extend this lease. Tenant will (TXR-2101) 4-1-14 Initialed for Identification by Landlord:~ , __ • and Tenant: ef , __ _ Page 10 of 15 Procu:eo with ~cmie by zlplog,x 18070 F'1eon Mii. Roa<! Frase,. Midligor, 4~ Wfttl ••Q\ gg,x com fle• l.eHing

13906 W IH 20 E Commercial lease concerning: Odessa TX 79765 __ _._-'-'---"--'-"-"------------- - ----------- indemnify Landlord and any prospective tenants for any and all damages caused by the holdover. Rent for any holdover period will be 150% of the base monthly rent plus any additiorlal rent calculated on a daily basis and will be immediately due and payable daily without notice or demand. 23. LAN9LOA:9'8 bliN .t..ND Gi;CUAITV INTEREST: Te eee1:1r:e Tel'laflt'e ~eFferffleRee 1::1REler tl'lis lease, TeRaRt areAts te Laedlerd a lieR emf seeuFjt>; ietereet agaieet an of TeAaRt's AeReMefJlpt eeFeeAel er-eee(h' that is iA U=ie !eaeee ereFAises or QB ihe Prepefly, This lease is e seeuri~ agreemeRt fer u,e l'tlflleeee ef the UAifeFffl G8fflffl8Feial Gede. LenEllerEI Mey file a fiAaReiAg steteMeflt to J'OAeet LaAdlerd's seeuFi~r iMoreot t:1Ader the URi#erm CeMMereiel Geae. 24. ASSIGNMENT AND SUBLETTING: Landlord may assign this lease to any subsequent owner of the Property. Tenant may not assign this lease or sublet any part of the leased premises without Landlord's written consent. An assignment of this lease or subletting of the leased premis~s without Landlord's written consent is voidable by Landlord. If Tenant assigns this lease or sublets any ~art of the leased premises, Tenant will remain liable for all of Tenant's obligations under this lease regardless if the assignment or sublease is made with or without the consent of Landlord. 25. RELOCATION: D A. By providing Tenant with not less than 90 days advanced written notice, Landlord may require Tenant to relocate to another location in the Property, provided that the other location is equal in size or larger than the leased premises then occupied by Tenant and contains similar leasehold improvements. Landlord will pay Tenant's reasonable out-of-pocket moving expenses for moving to the other location. "Moving expenses" means reasonable expenses payable to professional movers, utility companies for connection and disconnection fees, wiring companies for connecting and disconnecting Tenant's office equipment required by the relocation, and printing companies for reprinting Tenant's stationary and business cards. A relocation of Tenant will not change or affect any other provision of this lease that is then in effect, including rent and reimbursement amounts, except that the description of the suite or unit number will automatically be amended. ~ B. Landlord may not require Tenant to relocate to another location in the Property without Tenant's prior consent. 26. SUBORDINATION: A. This lease and Tenant's leasehold interest are and will be subject, subordinate, and inferior to: (1) any lien, encumbrance, or ground lease now or hereafter placed on the leased premises or the Property that Landlord authorizes; (2) all advances made under any such lien, encumbrance, or ground lease; (3) the interest payable on any such lien or encumbrance; (4) any and all renewals and extensions of any such lien, encumbrance, or ground lease; (5) any restrictive covenant affecting the leased premises or the Property; and (6) the rights of any owners' association affecting the leased premises or Property. B. Tenant must, on demand, execute a subordination, attornment, and non-disturbance agreement that Landlord may request that Tenant execute, provided that such agreement is made on the condition that this lease and Tenant's rights under this lease are recognized by the lien-holder. 27. ESTOPPEL CERTIFICATES & FINANCIAL INFORMATION: A. Within 10 days after receipt of a written request from Landlord, Tenant will execute and deliver to Landlord an estoppel certificate that identifies the terms and conditions of this lease. Initialed for Identification by landlord: ~ . __ , and Tenant: ~ . __ _ Page 11 of 15 Procfu"8d will> z,pForn,$ by zlplog,x 18070 Fifteen Milt Road. F,... ,_ Miet\igan ~ www r!PI 9Pil G9fD Fits l.n1oinJ

13906 W IH 20 E Commercial Lease concerning: Odessa TX 79765 -'--'-"-=-.;.;;..c.....a~=------------------------- B. Within 30 days after receipt of a written request from Landlord, T en~mt will provide to Landlord Tenant's current financial information (balance sheet and income statement). Landlord may request the financial information no more frequently than once every 12 months. 28. CASUALTY LOSS: A. Tenant must immediately notify landlord of any casualty loss in the leased premises. Within 20 days after receipt of Tenant's notice of a casualty loss, Landlord will notify Tenant if the leased premises are less than or more than 50% unusable, on a per square foot basis, and if Landlord can substantially restore the leased premises within 120 days after Ten ant notifies Landlord of the casualty loss. B. If the leased premises are less than 50% unusable and Landlord can substantially restore the leased premises within 120 days after Tenant notifies Landlord of the casualty, Landlord will restore the leased premises to substantially the same condition as before the casualty. If Landlord fails to substantially restore within the time required, Tenant may terminate this lease. C. If the leased premises are more than 50% unusable and Landlord can substantially restore the leased premises within 120 days after Tenant notifies Landlord of the casualty, Landlord may: (1) terminate this lease; or (2) restore the leased premises to substantially the same condition as before the casualty. If Landlord chooses to restore and does not substantially restore the leased premises within the time required, Tenant may terminate this lease. D. If Landlord notifies Tenant that Landlord cannot substantially restore the leased premises within 120 days after Tenant notifies Landlord of the casualty loss, Landlord may: (1) choose not to restore and terminate this lease; or (2) choose to restore, notify Tenant of the estimated time to restore, and give Tenant the option to terminate this lease by notifying Landlord within 10 days. E. If this lease does not terminate because of a casualty loss, rent will be reduced from the date Tenant notifies Landlord of the casualty loss to the date the leased premises are substantially restored by an amount proportionate to the extent the leased premises are unusable. 29. CONDEMNATION: If after a condemnation or purchase in lieu of condemnation the leased premises are totally unusable for the purposes stated in this lease, this lease will terminate, If after a condemnation or purchase in lieu of condemnation the leased premises or Property are partially unusable for the purposes of this lease, this lease will continue and rent will be reduced in an amount proportionate to the extent the leased premises are unusable. Any condemnation award or proceeds in lieu of condemnation are the property of Landlord and Tenant has no claim to such proceeds or award. Tenant may seek compensation from the condemning authority for its moving expenses and damages to Tenant's personal property. 30. ATTORNEY'S FEES: Any person who is a prevailing party in any legal proceeding brought under or related to the transaction described in this lease is entitled to recover prejudgment interest, reasonable attorney's fees, and all other costs of litigation from the nonprevailing party. 31. REPRESENTATIONS: A. Tenant's statements in this lease and any application for rental are material representations relied upon by Landlord. Each party signing this lease represents that he or she is of legal age to enter into a binding contract and is authorized to sign the lease. If Tenant makes any misrepresentation in this lease or in any application for rental, Tenant is in default. B. Landlord is not aware of any material defect on the Property that would affect the health and safety of an ordinary person or any environmental hazard on or affecting the Property that would affect the (TXR-2101) 4-1-14 Initialed for Identification by Landlord: * , _ _ , and Tenant: ~ . __ _ Page 12 of 15 Produced w,lh zip~ormll by z,plogix 1&070 Flf1e«i Milo Road, F«uer, Machigal ◄8026 WWW Z!Pb99iJt ggm FlnLn,lna

13906 W IH 20 E Commercial Lease conceming:-=O=de =s= s=a -'-TX-=---7-=9c.:...76=5'---- -------- - - - ---------- - health or safety of an ordinary person, except: NIA -'--'-'-'--'----------- - --- - --- C. Each party and each signatory to this lease represents that: (1) it is not a person named as a Specially Designated National and Blocked Person as defined in Presidential Executive Order 13224; (2) it is not acting, directly or indirectly, for or on behalf of a Specially Designated and Blocked Person; and (3) is not arranging or facilitating this lease or any transaction related to this lease for a Specially Designated and Blocked Person. Any party or any signatory to this lease who is a Specially Designated and Blocked person will indemnify and hold harmless any other person who relies on this representation and who suffers any claim, damage, loss, liability or expense as a result of ihis representation. 32. BROKERS: A. The brokers to this lease are: Principal Broker: -- - -------- K irk Straban Realty Cooperating Broker: _ _ __________ _ NRG Realty Group LLC Agent: Kirk Strahan Address:3915 Tanglewood Lane Odessa, TX 79762 Agent: Justin Dodd Address:6191 Hwy 161 , Ste. 430 Irving TX 75038 Phone & Fax: (432)366-5475 E-mail: kirk@strahanrealty.com (432)366-5477 Phone & Fax: ...,,(2:.:..14--'-'}.=.;534~-7""'9.;..;76 =----------­ E-mail: justin@nrgrealtvgroup.com License No.: __ 53""'6""'60=2 a..-_________ _ License No.: =60::...:1-=- 0"""'10 ____ _ ______ _ __ _ Principal Broker: (Check only one box) Cooperating Broker represents Tenant. ~ represents Landlord only. represents Tenant only. is an intermediary between Landlord and Tenant. B. ~ : [ii (1 ) Principal Brokers fee will be paid according to: (Check only one box). liJ (a) a separate written commission agreement between Principal Broker and: ~ Landlord O Tenant. 0 (b) the attached Commercial Lease Addendum for Broker's Fee (TXR-2102). Ii] (2) Cooperating Broker's fee will be paid according to: (Check only one box). D (a) a separate written commission ~reement between Cooperating Broker and: D Principal Broker D Landlord LJ Tenant. lil (b) the attached Commercial Lease Addendum for Broker's Fee (TXR-2102). 33. ADDENDA: Incorporated into this lease are the addenda, exhibits and other information marked in the Addenda and Exhibit section of the Table of Contents. If Landlord's Rules and Regulations are made part of this lease, Tenant agrees to comply with the Rules and Regulations as Landlord may, at its discretion, amend from time to time. 34. NOTICES: All notices under this lease must be in writing and are effective when hand-delivered, sent by mail, or sent by facsimile transmission to: Landlord at: West Epley LLC Address: 327 E Loop 338, Odessa. Texas 79762 (TXR-2101) 4-1-14 Initialed for Identification by Landlord: ~ . _ . and Tenant:~, _ _ _ Page 13 of 15 Produced with zipForme by z,plog lx 18070 Fdteen Mile Road. Fn1ter, Michigan 480 26 W'f/W zipLggix oom

13906 W IH 20 E Commercial Lease concerning: Odessa TX 79765 ~~-=--~~~------------ - ----------- Phone: (325)668-1605 Fax:----,,----------- and a copy to: Kirk Strahan Realty LLC Address: 3915 . ----:------:-------------___;_ _________ _ Phone: (432)366-5475 Fax: _____ _ ______ _ ~ Landlord also consents to receive notices by e-mail at: Kirk@kirkstraha1nrealty.com Ten ant at the leased premises, and a copy to: Flex leasing Power and Service, LLC Address: 6400 S. Fiddlers Green Circle, Suite 900, Greenwood VIiiage, co 80111 Phone: _ _______ ____ Fax: 0 Tenant also consents to receive notices by e-mail at: -------------- 35. SPECIAL PROVISIONS: 1) Regarding the Liability Insurance as outlined in Paragraph 8, the insurance policy will include the following as Additional Insured: West Epley, LLC 327 E Loop 338 Odessa, TX, 79762 2) Landlord agrees to add a 25' x 50' covered lighted wash bay to the end of the building. Completed with electricity and water faucet. Pad with aprons and catch basin. 3) Add a 30' wide x 16' over head door between existing shop and wash bay. Door Is in place of the standard 16' x 16' overhead door. 4) Add 5 ton overhead crane to the shop. Installation of crane will not delay commencement date. 5) The Rent will not commence until the building is complete inclusive of power, either from the utility or by backup generator. 6) Landlord will provide a one year warranty on the building including all mechanical systems. 7) Landlord will provide Building plans and photos of example building next door for approval of finishes. 8) Tenant will be allowed to have their vendors install IT, Telecom, furniture, fixtures and equipment in the building and the yard between August 1 and August 14, 2019. 36. AGREEMENT OF PARTIES: A. Entire Agreement: This lease contains the entire agreement between Lan'dlord and Tenant and may not be changed except by written agreement. B. Binding Effect: This lease is binding upon and inures to the benefit of the parties and their respective heirs, executors, administrators, successors, and permitted assigns. C. Jojnt and Several: All Tenants are jointly and severally liable for all provisions of this lease. Any act or notice to, or refund to, or signature of, any one or more of the Tenants regarding any term of this lease, its renewal, or its termination is binding on all Tenants. D. Controlling Law: The laws of the State of Texas govern the interpretation, performance, and enforcement of this lease. E. Severable Ctauses: If any clause in this lease is found invalid or unenforceable by a court of law, the remainder of this lease will not be affected and all other provisions of this lease will remain valid and enforceable. F. Wajyer: Landlord's delay, waiver, or non-enforcement of acceleration, contractual or statutory lien, rental due date, or any other right will not be deemed a waiver of any other or subsequent breach by Tenant or any other term in this lease. (TXR-2101) 4-1-14 Initialed for Identification by Landlord:~ , __ , and Tenant:~ , ___ Page 14 of 15 Produced wlfl'I zipForrneby ziplogix 18070 Fifieen Mlle Roact Fraser M>Chigan 48026 www.Wb99il< com

13906 W IH 20 E Commercial Lease concerning: .;::;O..:::.de:::a.;s:c.:s=a'-'TX:...:..:...:..;79::..::7'-=6.:.5 _ _____________ ~---------- G. Oujet Enjoyment: Provided that Tenant is not in default of this tease, Landlord covenants that Tenant will enjoy possession and use of the leased premises free from material interference. H. force Majeure: If Landlord's performance of a term in this lease is delayed by strike, lock-out, shortage of material, governmental restriction. riot, flood, or any cause outside Landlord's control, the time for Landlord's performance will be abated until after the delay. I. Il!M: Time is of the essence. The parties require strict compliance with the times tor performance. Brokers are not qualified to render legal advice, property inspections, surveys, engineering studies, environmental assessments, tax advice, or compliance Inspections. The parties should seek experts to render such services. READ THIS LEASE CAREFULLY. If you do not understand the effect of this Lease, consult your attorney BEFORE signing. t..dard: West Epley LLC By (signature): ---.....JC....-&:.----..r..,c..;.'------­ Printed Name: -~~u.........1:M11U11a::!::.-------~- Title: _______ ..........,..._ ___ _ By: ________________ _ By (signature): ____________ _ Printed Name: ____________ _ Title: __________ Date: ___ _ (TXR-2101) Tenant: flex Leasing Power and Service LLC By: ________ --rr--------- By (signature): ~~--- Printed Name: DM1N ~ 1/t/C Title: <;vP Date: , ,Z!f · l'j By: _ _______________ _ By (signature): _ ___________ _ Printed Name: ____________ _ Title: _ _________ Date: ___ _ Page 15 of 15 Produced wlih z,pFom,®by zipl.ogaJC 19070 Fll'leen M, .. Road Fra- M~ <l802tl WWW H>Lggjx com

i.1 TEXAS REALT ORS COMMERCIAL LEASE ADDENDUM FOR EXPENSE REIMBURSEMENT USE OF THIS FORM BY PERSONS IMtO ARE NOT MEMBERS OF THE TEXAS ASSOCIATION OF REAL TORS®. INC. 1s NOT AUTliORIZED. m .. u Aasoctatlon or REAL TORS®, lne. 2010 ADDENDUM TO THE COMMERCIAL LEASE BETWEEN THE UNDERSIGNED PARTIES CONCERNING THE LEASED PREMISES AT 13906 W IH 20 E, Odessa, TX 79765 In addition to rent stated in the lease, Tenant will pay Landlord the additional rent described in this addendum. Tenant will pay the additional rent each month at the time the base-monthly rent in the lease is due. A. Definitions: (1) "Tenant's pro rata share" is 100.000 %. (2) "CAM" means all of Landlord's expenses reasonably incurred to maintain. repair, operate, manage, and secure the Property (for example, security, lighting, painting, cleaning, decorations, utilities, trash removal, pest control, promotional expenses, and other expenses reasopably related the Property's operations); CAM does not include capital expenditures, interest, depreciation, tenant improvements, insurance, taxes, or brokers' leasing fees Notwithstanding the foregoing, CAM does include the amortized costs incurred by Landlord in making capital improvements or other modifications to the Property to the extent such improvements or modifications reduce CAM overall. These costs will be amortized over the useful life of the improvement or modification on a straight-line basis; however, in no event will the charge for such amortization included in CAM exceed the actual reduction in CAM achieved by the improvements and modifications. (3) "Insurance" means Landlord's costs to insure the leased premises and the Property including but not limited to insurance for casualty loss, general liability, and reasonable rent loss. (4) "Taxes" means the real property ad valorem taxes assessed against the leased premises and Property inclusive of all general and special assessments and surcharges. (5) "Structural" means all of Landlord's expenses reasonably incurred to maintain, repair, and replace the roof, foundation, exterior walls, load bearing walls and other structural components of the Property. B. Method: The additional rent will be calculated under the following method: Note: "CAM 0 does not include taxes and insurance costs. 0 (1) Base-year expens es: Each month Tenant will pay Tenant's pro rata share of the projected monthly expenses for the Property that exceed the amount of the monthly base-year expenses for the calendar year ____ for: 0 taxes; 0 insurance; D CAM; 0 structural; and □--------- D (2) Expense-stop: Each month Tenant will pay Tenant's pro rata share of the projected mont~ . expenses for the P'3Perty that exceed $ ____ _ __ per square foot per year for: 0 taxes; U insurance; 0 CAM; LJ structural; and □ ---------------------- . I&] (3) .&m: Each month Tenant will pay Tenant's pro rata share of the projected monthly expenses for the Property for: !&] taxes; ~ insurance; I&] CAM; 0 structural; and □ ------------ C. Proiected Monthly Expenses: On or about December 31 of each calendar year, Landlord will project the applicable monthly expenses (those that Tenant is to pay under this addendum} for the following calendar year and will not ify Tenant of the projected expenses. The projected expenses are based on Landlord's estimates of such expenses. The actual expenses may vary. (TXR-2103) 1-26-10 Initialed for Identification by Landlord:~ , __ , and lenant:~ _ _ Page 1 of 2 NRG R.,.liy (lr oup, LLC. 6191 ffll hW I) ' 1 61. Sul .. 430 lrv los 1" X 7~38 Phone· (214)53~797' Fax: Fltx L .. J l■1 J...ii ■ Dodd ProdUCed wrth ZljlForrn4!1 by zlpLogix 18070 Fifteen Mil e Road. Fra,et, Michigan 48026 www zlpLogntcom

Expense Reimbursement Addendum concerning ""'13,..9..,.0.,._&~w .... 1.._. H ..... 2.,.o_.E....,,. O.,,.de,..s..,.s..,a,.._.J...,X._._,79...,.7_..6.._5 ___ ~ - --------- ~ : The applicable projected expenses at the time which the above-referenced lease commences are shown in the table below. The total area of the Property presently used by Landlord for calculating expense reimbursements is 10000 rentable square feet (including any add on factor for common areas). Projected Expenses I $ Monthly Rate I $ Annual Rate 0.20 / rsf I month I 2.00 / rsf / year D. Reconcmation: Within a reasonable time after the end of each calendar year, Landlord will notify Tenant of the actual costs of the applicable expenses (those that Tenant is to pay under this addendum) for the previous year. If the actual costs of the applicable expenses exceed the amounts paid or owed by Tenant for the previous year, Tenant must pay the deficient amount to Landlord within 30 days after Landlord notifies Tenant of the deficient amount. If the actual costs of the applicable expenses are less than the amounts paid by Tenant for the previous year, Landlord will refund the excess to Tenant or will credit the excess to Tenant's next rent payment. Tenant may audit or examine those items in Landlord's records that relate to Tenant's obligations under this addendum. Landlord will promptly refund to Tenant any overpayment revealed by an audit or examination. If the audit or examination reveals an error of more than 5% over the amounts Landlord collected in a calendar year from Tenant under this addendum, Landlord will pay the reasonable cost of the audit or examination. Landlord may not seek a deficiency from Tenant under this paragraph if Landlord fails to timely provide the required notice. E. Special Provisions: Landlord: By: __ =~-H--r~-+-r- / __ By (signature): _ _,, _.,e.L{fl.~Wc..=. _ --1,/L- '---------- Printed Name: ____________ _ Title: ______________ _ _ By: ________________ _ By (signature): ____________ _ Printed Name: ____________ _ Title: _____________ _ _ _ (TXR-2103) 1-26-10 Tenant: _______________ _ By: ~ g f)-- ~ - By (signature): ~ \~ .. - Printed Name: ____________ _ Title: ___ _ ___________ _ By:--------'--------- - By (signature): ___ ;,.._ ____ _ ___ _ Printed Name: ___ .,:_.. ________ _ Title:-------;,---------- - Page 2 of2 Pt~with zipFom,~ by z:lplogo< 18070 F'lll.oen M,le Road. Fraser, Mieh;gan 48026 www zlploplJ< com

i.l TEXAS REALTORS COMMERCIAL LEASE ADDENDUM FOR BROKER'S FEE USE OF THIS FORM BY PERSONS WHO ARE NOT MEMBERS OF 1'HE TI:)(AS ASSOCIATION OF REALTORS® INC. IS NOT AUTHORIZED. <PT•xas ANOclalion of REAL TORS®, Inc. 2014 ADDENDUM TO THE COMMERCIAL LEASE BETWEEN THE UNDERSIGNED LANDLORD ANO TENANT CONCERNING THE LEASED PREMISES AT 13906 W IH 20 E, Odessa, TX 79765 A . Leasjng Fees: All leasing fees are earned when the above referenced lease is executed. (1) Landlord will pay Principal Broker a leasing fee calculated and payable as follows: D (a) ______ % of all base monthly rents to be paid for the term of the lease and the same percentage of the expense reimbursements stated or estimated in the lease, payable as follows: one-half of such amount at the time Landlord and Tenant execute the lease and the remainder on the date the lease commences. D (b) _____ _ % of all base monthly rents to be paid for the term of the lease and the same percentage of the expense reimbursements stated or estimated in the lease, payable as follows: ---------------------------- -- ~ (c) 3% of all Base Rents within 30 days of Lease Commencement (2) Landlord will pay Cooperating Broker a leasing fee calculated and payable as follows: O (a) ____ % of all base monthly rents to be paid for the term of the lease and the same percentage of the expense reimbursements stated or estimated in the lease, payable as follows: one-half of such amount at the time Landlord and Tenant execute the lease and the remainder on the date the lease commences. D (b} ____ % of all base monthly rents to be paid for the term of the lease and the same percentage of the expense reimbursements stated or estimated in the lease, payable as follows:- - --- - ------------------------- [i] (c} 3% of all Base Rents within 30 days of Lease Commencement B. Renewal and Expansion Fees: If Landlord and Tenant subsequently renew, extend, or expand the lease, including a new lease for more, less, or different space in the Property or in any other property owned, controlled, or managed by Landlord, the brokers will be paid the fees set forth below. The fees will be earned and payable when the extension, renewal, expansion, or new lease is executed or commences, whichever is earlier. (1) _____________________ will pay Principal Broker a renewal fee of: 0 (a) _____ % of all base monthly rents to be paid for the term of1the renewal, extension, or new lease and the same percentage of the expense reimbursements stated or estimated in the lease governing the renewal, extension, or new lease; (TXR-210 2) 4-1-14 Initialed for Identification by Landlord: ~ , __ , and Tenant: ~ . _ Page 1 of 3 SRC RffllyCroep. 1.1.C. 6191 Hlp.,1)' 161,Soit•OO lning TX 7!038 Phone: (214)534,7976 Fax. Jullltl OCtdd Proc1.tce<:I wllh zipF«me by zil'Logix 18070 Fdtaen Mia Road Fraser Micnigan ~ !"«:« t iPl,pgjx com

Addendum for Broker's Fee concerning ...., 13..,9..,06._W........,IH ....... 20,.__E,._.O...,d ... e,..ss...,a,.__ T _..,X,._._79..., 7 ... 6,.._ 5 ______ _ __ _ _ ____ _ D (b) ____ % of all base monthly rents to be paid for the term of the expansion and the same percentage of the expense reimbursements stated or estimated in the lease governing the expansion; or 0 (c) - - - ------- - - ------,-------- (2) Landlord will pay Cooperating Broker a renewal fee of: D (a) ___ _ % of all base monthly rents to be paid for the term of the renewal, extension, or new lease and the same percentage of the expense reimbursements stated or estimated in the lease governing the renewal, extension, or new lease; D (b) ____ % of all base monthly rents to be paid for the term of the expansion and the same percentage of the expense reimbursements stated or estimated in the lease governing the expansion; or 00 (c) 3% of all Base Rent. s within 30 days of Lease Execution C. Fees in the Eyent of a Sale: If, during any time the lease is in effect or during any time Tenant occupies the leased premises, including any extension, renewal, or expansion, Tenant agrees to purchase the leased premises or Property by oral or written agreement or option, brokers will be paid the additional fees set forth below. The additional fees will be earned at the time Landlord and Tenant enter into an agreement for the sale, purchase, or option for the leased premises or Property, and are payable at the time the sale or purchase closes. (1) _ ____ _ __ _ ___ _ ___ _ __ will pay Principal Broker an additional fee of: 0 (a} _____ % of the sales price for the purchase. □ (b) _________________ _ _ __ _ _ (2) _ _________________ will pay Cooperating Broker an additional fee of: 0 (a) % of the sales price for the purchase. 0 (b) - ------- - - ---- - -----,------ - - 0. County: All fees under this addendum are payable in _____________ County, Texas. E. Attorney's Fees: If Landlord, Tenant, or any broker is a prevailing party in any legal proceeding brought as a result of a dispute under this addendum or any transaction related to or contemplated by this addendum, such party will be entitled to recover from the non-prevailing parties all costs of such proceeding, prejudgment interest, and reasonable attorney's fees. F. Special Provisjons: (TXR -2102) 4-1-14 Initialed for Identification by Landlord:~. __ , and Tenant:~. _ _ Page 2 of3 Pr~ With zipFormel by z,plogoc 1 8070 Fifteen Mile Road. Fraser. Mochio-n 48026 WWW zlpLogoc com

Addendum for Broker's Fee concerning .,_ 13,..Q..,,0,..6uWCL.JJIHu.a.20.....,E .._. o_de.., s;i;; s .., a.._. JX-1.A..J]:.;i 9 .r..76K, 5,L_ _ ________________ _ NOTICE: Under Chapter 62, Texas Property Code, Broker is entitled to claim a lien against the Property to secure payment of an eamed commission. Landlord: Tenant: _ __________ _ ____ _ By (signature): - ~~qp.---, 4..-,1::::.....~-- - -- - Printed Name: ...,..:,.._.:.i:,;:..=.w....::::sJ4.:'I-/ __ _ __ _ Title: ( . ) 0 By: ~ l,..,,......__., By (signature): _ _.., ~_. ,_ _ _ /. _ 2 _ .: __ ~ ....; .._ =------- Printed Name: _ _ ______ _ __ _ _ _ Title: ________________ _ By: _ _______________ _ By: _______ -'-- ---- - --- - By (signature): _____________ _ By (signature): ___ ....._ ________ _ _ Printed Name: _ _ ___________ _ Printed Name: _____________ _ Title: ______ _ _ _ _ ______ _ Title: _____ _ _____ _ _ _ __ _ Principal Broker: Cooperating Broker: Broker / Company Name: __ _ ________ _ Broker / Company Name: NRG Realty Group, LLC License No. _ _ _ _ _ License No. 9004023 By (signature): _____________ _ By (signature): _ ____________ _ Printed Name: _____________ _ Printed Name: "'J=- us::.:t::.: in .;.; D::.o::.d::.:d=-- ---- - ---- Title: ________ License No. _ ___ _ Title: Pres License No. 601010 (TXR-210 2) 4-1-14 Page 3 of3 Pr oduce d with z,pFonn® by ziplogix 18070 Fi!t"'1 Mile Road Fraser. MlChlgan 48026 WWW ziploqjx com

0 C In I "' 0 0 J° 0 ~-- .. .;a• ~ t-1 l)c - -..:.::- 1 ~ ... - , ~ ~ . ~ · i i :;11Fk~ • " • [ • • •

ExhibitB To the Lease agreement between West Epley LLC (Landlord) and Flex Energy Services (Tenant) for the property located at Lot 6 Block 2 Sandridge Addition also known as 13906 W IH 20 E Odessa, Texas. The follow pictures are provided as an example of the finish out to the subject property currently under construction. The final finish may very slightly but the overall quality and construction will be similar to the attached photos. The final building will be a SO' x 200' metal building with a SO' x 25' washbay attached to the north end of the building. The property will also have a 5 ton crane covering the shop area. The interior finishes will include tile flooring, textured and painted walls, a suspended ceiling with 2' x 4' lay in lights. The finish will include an office restroom, breakroom and shop restroom. All of the offices and restrooms will be heated and cooled. Photos are examples of final finishes.

Exhibit B (cont) Exterior finishout will be the building with tan siding and brown trim. Yard will be stablized with a perimeter 6' foot chain link fence and a gate. Inside shop area will be insulated with 8 14' x 16' overhead doors and I - 30' x 16' overhead door on the northend of the shop. Photos are examples of final fmishes.

EX-10.15

Exhibit 10.15

i.l TEXAS REALTORS. COMMERCIAL LEASE AMENDMENT USE OF THIS FORM BY PER SONS WHO ARE NOT MEMBERS OF THE TEXAS ASSOCIATION OF REALTORS® IS NOT AUTHORIZED. ffl"oxas Association of REALTORSfl>, Inc. 2010 AMENDMENT TO THE COMMERCIAL LEASE BETWEEN THE UNDERSIGNED PARTIES CONCERNING THE LEASED PREMISES AT 13906 W IH 20 E, Odessa, TX 79765 Effective on - - -=--Ju=n '-'-' e :;.......:.. 1,i....;; 2 ;;;..: 0 = 2 :...::. 0 __ , Landlord and Tenant amend the above-referenced lease as follows: D A. Leased Premises: The suite or unit number identified in Paragraph 2A(1) is: D (1) changed to ____ _ D (2) contains approximately ________ _ _ _ square feet. ~ 8. Ifilm: Ix] (1) The length of the term stated in Paragraph 3A is changed to 61 months and 15 days. D (2) The Commencement Date stated in Paragraph 3A is changed to __________ _ Ix] (3) The Expiration Date stated in Paragraph 3A is changed to ____ O _ct _ o_ b_ er _1 _5 ~,_ 2_ 02 _4 ___ _ ~ C. Rent: The amount of the base monthly rent specified in Paragraph 4A is changed to: $ 7,833.55 from ___ 06 _/_ 01 _ /2 _0 _ 2_ 0 __ to ---=- 09 =/= 30 = /2 =0 = 2 c.:;._ 0 __ $ _________ from to ________ _ $ ~m ~ - - - - - - - - - $ ~m ~ - -- - - - - - - $ ~m ~ - ---- - - -- D D. Security Deposit: The amount of the security deposit in Paragraph 5 is changed to $ _ ______ _ _ D E. Maintenance and Repairs: The following item(s) specified in the identified subparagraph of Paragraph 1 SC will be maintained by the party designated below: Para. No. Description Responsible Party ~ NIA~ Landlord ~ Tenant NIA Landlord Tenant N/A Landlord Tenant N/A Landlord Tenant D F. Parking: D (1) Common Parking: The number of vehicles identified in Paragraph A(1) of the Commercial Lease Parking Addendum is changed ____ ___ to vehicles. D (2) Restricted Common Parking for Tenants: The number of vehicles identified in Paragraph A(2) of the Commercial Lease Parking Addendum is changed to ______ _ vehicles. (TXR-2114) 1-26-10 Initialed for Identification by Landlord: ~;l/ , __ , and Tenant: __ , _ _ Page 1 of 2 NRG Really Group, LLC, 6191 Hiahway 161, Sultc430 Irving TX 7503K Phone: (214)534-7976 Fax: Flex Lcasln" Justin Do>dd Produced with zipForm® by ziplogix 18070 Fifteen Mile Road, Fraser, Michigan 48026 www zlplgglx com

Amendment to Commercial Lease concerning ""13..,9"'0 ,.,. 6_. W ........ IH ..... 2..,0'-.JE ..,,'--" O,...d..,.e ... s..,sa..,,_, TX.a.....Z .... 9._.7...,_6.,,_ 5 __ _ __ _ __ _ __ _ _ _ _ D (3) Assigned Parking: Tenant's assigned parking areas identified in Paragraph A(3) of the Commercial Lease Parking Addendum is changed to -- - -- - ------ - ------ - - - D (4) Parking Rental: The amount of rent identified in Paragraph B of the Commercial Lease Parking Addendum is changed to$ ____ _ _ __________ _ _ D G. Other: Paragraph(s) ________ are changed to read (cite specific paragraphs and copy the applicable paragraphs verbatim, making any necessary changes): ::••lorn, ::;;;2:/ By(signature): ✓~ Printed Name: ____________ _ Tenant: Flex e Power and Seryjce, LLC By: ~ By (signature): ____________ _ Printed Name: Darin Romine Title: _________ _ Date: __ _ _ Title: SVP Date: 5/29/20 ---- - ----- By: _ _______ _ _______ _ By: _______________ _ _ By (signature): ____________ _ By (signature): _ ___________ _ Printed Name: ____________ _ Printed Name: ____________ _ Title: _ _________ Date: ___ _ Title: __________ Date: ___ _ (TXR-2114) 1-26-10 Page 2 of 2 Produced with zipFonn® by ziplogix 18070 Fift een Mi e Road, Frase r. Mi chigan 48026 WWW ziplpglx oom Flex Lcasini;:

EX-10.16

Exhibit 10.16

EX-10.17

Exhibit 10.17

EX-10.18

Exhibit 10.18

Execution Version

CREDIT AGREEMENT

among

FLEX LEASING POWER & SERVICE LLC,

as a Borrower,

and

THE OTHER LOAN PARTIES FROM TIME TO TIME PARTY HERETO,

THE LENDERS FROM TIME TO TIME PARTY HERETO

and

TEXAS CAPITAL BANK, NATIONAL ASSOCIATION,

as Administrative Agent, Swing Line Lender and L/C Issuer

TEXAS CAPITAL BANK, NATIONAL ASSOCIATION,

as Sole Lead Arranger and Sole Book Runner

DATED AS OF FEBRUARY 8, 2019

TABLE OF CONTENTS

			Page
ARTICLE 1. DEFINITIONS			1
	Section 1.1	Definitions	1
	Section 1.2	Accounting Matters	38
	Section 1.3	ERISA Matters	39
	Section 1.4	Letter of Credit Amounts	39
	Section 1.5	Other Definitional Provisions	39
	Section 1.6	Interpretative Provision	40
	Section 1.7	Times of Day	40
	Section 1.8	Other Loan Documents	40
	Section 1.9	Divisions	40
ARTICLE 2. THE COMMITMENTS AND CREDIT EXTENSIONS			40
	Section 2.1	The Loans	40
	Section 2.2	Letters of Credit	42
	Section 2.3	Swing Line Loans	50
	Section 2.4	Fees	53
	Section 2.5	Payments Generally; Administrative Agent’s Clawback	54
	Section 2.6	Evidence of Debt	56
	Section 2.7	Cash Collateral	56
	Section 2.8	Interest; Payment Terms	57
	Section 2.9	Voluntary Termination or Reduction of Commitments; Prepayments	59
	Section 2.10	Uncommitted Increase in Commitments	60
	Section 2.11	Cash Collateral Blocked Accounts	61
	Section 2.12	Collection of Accounts	63
	Section 2.13	Appointment of Borrower Representative	63
	Section 2.14	Joint and Several Liability	64
ARTICLE 3. TAXES, YIELD PROTECTION AND INDEMNITY			65
	Section 3.1	Increased Costs	65
	Section 3.2	Illegality	67
	Section 3.3	Inability to Determine Rates	67
	Section 3.4	Taxes	68
	Section 3.5	Compensation for Losses	72
	Section 3.6	Mitigation of Obligations; Replacement of Lenders	73
	Section 3.7	Survival	74
ARTICLE 4. CONDITIONS PRECEDENT			74
	Section 4.1	Initial Extension of Credit	74
	Section 4.2	All Extensions of Credit	78

i 

ARTICLE 5. REPRESENTATIONS AND WARRANTIES			79
	Section 5.1	Entity Existence	79
	Section 5.2	Financial Statements; Etc.	79
	Section 5.3	Action; No Breach	79
	Section 5.4	Operation of Business	80
	Section 5.5	Litigation and Judgments	80
	Section 5.6	Rights in Properties; Liens	80
	Section 5.7	Enforceability	81
	Section 5.8	Approvals	81
	Section 5.9	Taxes	81
	Section 5.10	Use of Proceeds; Margin Securities	81
	Section 5.11	ERISA	81
	Section 5.12	Disclosure	82
	Section 5.13	Subsidiaries	82
	Section 5.14	Agreements	82
	Section 5.15	Compliance with Laws	83
	Section 5.16	Inventory	83
	Section 5.17	Regulated Entities	83
	Section 5.18	Environmental Matters	83
	Section 5.19	Intellectual Property	84
	Section 5.20	Anti-Corruption Laws; Sanctions; Etc.	84
	Section 5.21	Patriot Act	84
	Section 5.22	Insurance	85
	Section 5.23	Solvency	85
	Section 5.24	Security Documents	85
	Section 5.25	Labor Matters	85
	Section 5.26	Material Agreements	85
	Section 5.27	Additional Representations of Guarantors	85
	Section 5.28	Qualified ECP Guarantor. Each Borrower is a Qualified ECP Guarantor	85
ARTICLE 6. AFFIRMATIVE COVENANTS			86
	Section 6.1	Reporting Requirements	86
	Section 6.2	Maintenance of Existence; Conduct of Business	90
	Section 6.3	Maintenance of Properties	90
	Section 6.4	Taxes and Claims	90
	Section 6.5	Insurance	90
	Section 6.6	Inspection Rights	91
	Section 6.7	Keeping Books and Records	92
	Section 6.8	Compliance with Laws	92
	Section 6.9	Compliance with Agreements	92
	Section 6.10	Further Assurances	92
	Section 6.11	ERISA	92

ii 

	Section 6.12	Depository Relationship; Control Agreements; Blocked Accounts	92
	Section 6.13	Additional Loan Parties	92
	Section 6.14	Inventory; Collateral Access Agreements	93
	Section 6.15	Certificates of Title	94
	Section 6.16	Sanctions; Anti-Corruption Laws	94
	Section 6.17	Post-Closing Obligations	94
ARTICLE 7. NEGATIVE COVENANTS			94
	Section 7.1	Debt	94
	Section 7.2	Limitation on Liens	95
	Section 7.3	Mergers, Etc.	96
	Section 7.4	Restricted Payments	97
	Section 7.5	Loans and Investments	97
	Section 7.6	Limitation on Issuance of Equity	98
	Section 7.7	Transactions With Affiliates	98
	Section 7.8	Disposition of Assets	99
	Section 7.9	Sale and Leaseback	99
	Section 7.10	Prepayment of Debt	99
	Section 7.11	Nature of Business	99
	Section 7.12	Environmental Protection	99
	Section 7.13	Accounting	100
	Section 7.14	Burdensome Agreements	100
	Section 7.15	Subsidiaries	100
	Section 7.16	Amendments of Certain Documents	100
	Section 7.17	Hedge Agreements	100
	Section 7.18	Anti-Corruption Laws; Sanctions; Anti-Terrorism Law	100
	Section 7.19	Negative Pledge	101
ARTICLE 8. FINANCIAL COVENANTS			101
	Section 8.1	Leverage Ratio	101
	Section 8.2	Fixed Charge Coverage Ratio	101
ARTICLE 9. DEFAULT			101
	Section 9.1	Events of Default	101
	Section 9.2	Remedies Upon Default	104
	Section 9.3	Right to Cure Financial Covenant Non-Compliance	104
	Section 9.4	Application of Funds	105
	Section 9.5	Performance by Administrative Agent	106
ARTICLE 10. AGENCY			107
	Section 10.1	Appointment and Authority	107
	Section 10.2	Rights as a Lender	107
	Section 10.3	Exculpatory Provisions	107
	Section 10.4	Reliance by Administrative Agent	109

iii 

	Section 10.5	Delegation of Duties	109
	Section 10.6	Resignation or Removal of Administrative Agent	109
	Section 10.7	Non-Reliance on Administrative Agent and Other Lenders	111
	Section 10.8	Administrative Agent May File Proofs of Claim	112
	Section 10.9	Collateral and Guaranty Matters	112
	Section 10.10	Bank Product Agreements	113
ARTICLE 11. MISCELLANEOUS			114
	Section 11.1	Expenses	114
	Section 11.2	INDEMNIFICATION	115
	Section 11.3	Limitation of Liability	116
	Section 11.4	No Duty	116
	Section 11.5	Lenders Not Fiduciary	116
	Section 11.6	Equitable Relief	116
	Section 11.7	No Waiver; Cumulative Remedies	117
	Section 11.8	Successors and Assigns	117
	Section 11.9	Survival	121
	Section 11.10	Amendment	122
	Section 11.11	Notices	123
	Section 11.12	Governing Law; Venue; Service of Process	125
	Section 11.13	Counterparts	126
	Section 11.14	Severability	126
	Section 11.15	Headings	126
	Section 11.16	Construction	126
	Section 11.17	Independence of Covenants	126
	Section 11.18	WAIVER OF JURY TRIAL	126
	Section 11.19	Additional Interest Provision	127
	Section 11.20	Ceiling Election	128
	Section 11.21	USA Patriot Act Notice	128
	Section 11.22	Defaulting Lenders	128
	Section 11.23	Sharing of Payments by Lenders	131
	Section 11.24	Payments Set Aside	132
	Section 11.25	Setoff	132
	Section 11.26	Confidentiality	133
	Section 11.27	Electronic Execution of Assignments and Certain Other Documents	134
	Section 11.28	Acknowledgement and Consent to Bail-In of EEA Financial Institutions	134
	Section 11.29	Keepwell	135
	Section 11.30	NOTICE OF FINAL AGREEMENT	135
	Section 11.31	Intercreditor Agreement	135
ARTICLE 12. GUARANTY			136
	Section 12.1	Guaranty	136
	Section 12.2	Payment	136
	Section 12.3	Agreements and Waivers	136

iv 

Section 12.4	Liability	138
Section 12.5	Subordination	139
Section 12.6	Subrogation	139
Section 12.7	Other Indebtedness or Obligations of Guarantors	139
Section 12.8	Costs and Expenses	139
Section 12.9	Exercising Rights, Etc.	140
Section 12.10	Benefit; Binding Effect	140
Section 12.11	Multiple Guarantors	140
Section 12.12	Additional Guarantors	140
Section 12.13	Reinstatement	141
Section 12.14	Maximum Liability	141

v 

INDEX TO SCHEDULES
Schedule	Description of Schedule	Section
2.1	Commitments and Applicable Percentages	2.1
2.11	Blocked Accounts	2.11
5.5	Litigation and Judgments	5.5
5.6(b)	Owned Real Property	5.6
5.6(c)	Leased Real Property (Lessee)	5.6
5.9	Taxes	5.9
5.13	Parent; Subsidiaries	5.13
5.26	Material Agreements	5.26
7.1	Existing Debt	7.1
7.2	Existing Liens	7.2
7.5	Existing Investments	7.5
11.11	Notices	11.11
	INDEX TO EXHIBITS
Exhibit	Description of Exhibit	Section
A	Assignment and Assumption	1.1
B	Borrowing Base Report	1.1
C	Compliance Certificate	1.1
D	Borrowing Request	1.1
E	Note	1.1
F	Swing Line Loan Request	1.1
G	Tax Forms	3.4(g)
H	Joinder Agreement	1.1

vi 

CREDIT AGREEMENT

This CREDIT AGREEMENT dated as of February 8, 2019 (as the same may be amended, restated, supplemented or otherwise modified from time to time, this “Agreement”), is among FLEX LEASING POWER & SERVICE LLC, a Delaware limited liability company (“Company”; and together with any Domestic Subsidiary of Company that becomes party hereto as a “Borrower” pursuant to Section 6.13(a), including their respective successors and assigns to the extent permitted by Section 11.8, individually, a “Borrower”, and collectively, “Borrowers”), each of the other Loan Parties from time to time party hereto, the Lenders from time to time party hereto, and TEXAS CAPITAL BANK, NATIONAL ASSOCIATION, a national banking association, as Administrative Agent, Swing Line Lender and L/C Issuer.

RECITALS

The Borrowers have requested that Lenders extend credit to Borrowers as described in this Agreement. Lenders are willing to make such credit available to Borrowers upon and subject to the provisions, terms and conditions hereinafter set forth.

NOW THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto agree as follows:

ARTICLE 1.

DEFINITIONS

Section 1.1 Definitions. As used in this Agreement, all exhibits, appendices and schedules hereto and in any note, certificate, report or other Loan Document made or delivered pursuant to this Agreement, the following terms will have the meanings given such terms in this Article 1 or in the provision, section or recital referred to below:

“Account” means an account, as defined in the UCC.

“Account Agings” has the meaning set forth in Section 6.1(l).

“Additional Guarantor” has the meaning set forth in Section 12.12.

“Adjusted Eurodollar Rate” means, with respect to any Loan for any Interest Period or day, as applicable, an interest rate per annum equal to the Eurodollar Rate for such Interest Period or day multiplied by the Statutory Reserve Rate; provided, however, if the Eurodollar Rate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement.

“Administrative Agent” means Texas Capital Bank, National Association, in its capacity as administrative agent under any of the Loan Documents, until the appointment of a successor administrative agent pursuant to the terms of this Agreement and, thereafter, shall mean such successor administrative agent.

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by or reasonably acceptable to Administrative Agent.

“Affiliate” means, as to any Person, any other Person that directly or indirectly, through one or more intermediaries, Controls or is Controlled by, or is under common Control with, such Person; provided, however, in no event shall any Lender be deemed an Affiliate of Parent, any Borrower or any of their respective Subsidiaries or Affiliates. Notwithstanding the foregoing, for purposes of clause (e), clause (n), and clause (r) of the definition of “Eligible Accounts”, the term “Affiliate” solely with respect to any Loan Party shall exclude any portfolio company (other than Parent, any Loan Party or any of their respective Subsidiaries) of the Permitted Holders and their Affiliates engaged in the business of producing goods or providing services that, but for this sentence, would otherwise be an Affiliate of any Permitted Holder or of Parent, any Loan Party or any of their respective Subsidiaries.

“Affiliated Debt” has the meaning set forth in Section 12.5.

“Agent Parties” means, collectively, Administrative Agent or any of its Related Parties.

“Agreement” has the meaning set forth in the introductory paragraph hereto, and includes all schedules, exhibits and appendices attached or otherwise identified therewith.

“Annualized Debt Service” means, for any date of determination, the sum of all regularly scheduled principal payments and all Cash Interest Expense that are paid or payable in respect of all Debt of Company and its Subsidiaries on a consolidated basis in accordance with GAAP (other than scheduled payments of principal on Debt which pay such Debt in full, but only to the extent such final payment is greater than the scheduled principal payment immediately preceding such final payment) for the trailing three month period then ending on such date multiplied by four (4).

“Annualized EBITDA” means, for any date of determination, the sum of (a)(i) EBITDA of Company and its Subsidiaries on a consolidated basis in accordance with GAAP for the trailing three month period then ending on such date (without giving effect to the amount of any Specified EBITDA Equity Contribution that is deemed to be EBITDA for any fiscal quarter included in the trailing four fiscal quarter period pursuant to Section 9.3 multiplied by (ii) four (4), plus (b) the amount of any Specified EBITDA Equity Contribution that is deemed to be EBITDA for any fiscal quarter included in the trailing four fiscal quarter period pursuant to Section 9.3.

“Anti-Corruption Laws” means all state or federal Laws, rules, and regulations applicable to the Loan Parties or any of their Affiliates from time to time concerning or relating to bribery or corruption, including the FCPA and the Bank Secrecy Act, and other similar anti-corruption legislation in other jurisdictions.

“Anti-Terrorism Laws” has the meaning set forth in Section 5.21.

“Applicable Margin” means the applicable percentages per annum set forth below, based upon the Leverage Ratio, as set forth in the most recent Compliance Certificate received by Administrative Agent for the last month of each fiscal quarter from time to time pursuant to Section 6.1(d):

Pricing Level		Leverage Ratio	Base Rate Loans			Eurodollar Rate Loans and Letter of Credit Fee
	1	≤ 2.00:1.00		1.50	%		2.50	%
	2	>2.00:1.00 but ≤ 2.50:1.00		1.75	%		2.75	%
	3	>2.50:1.00		2.00	%		3.00	%

CREDIT AGREEMENT – Page 2 

Any increase or decrease in the Applicable Margin resulting from a change in the Leverage Ratio shall become effective as of the first day immediately following the date a Compliance Certificate is delivered for the last month of each fiscal quarter from time to time pursuant to Section 6.1(d); provided that if such Compliance Certificate is not delivered when due in accordance with such Section, then upon the request of the Required Lenders, Pricing Level 3 shall apply as of the first day after the date on which such Compliance Certificate was required to have been delivered and shall remain in effect until the date on which such Compliance Certificate is delivered. The Applicable Margin from the Closing Date through the date such Compliance Certificate is delivered pursuant to Section 6.1(d) in respect of the last month of the second fiscal quarter of Company ending after the Closing Date shall be determined based upon Pricing Level 2.

If, as a result of any restatement of or other adjustment to the financial statements of Company or for any other reason, the Borrower Representative or the Required Lenders determine that (i) the Leverage Ratio as calculated by Company as of any applicable date was inaccurate and (ii) a proper calculation of the Leverage Ratio would have resulted in higher pricing for such period, Borrowers shall immediately and retroactively be obligated to pay to Administrative Agent for the account of the applicable Lenders, L/C Issuer or Swing Line Lender, as the case may be, promptly on demand by Administrative Agent (or, after the occurrence of an actual or deemed entry of an order for relief with respect to any Loan Party under the Bankruptcy Code of the United States, automatically and without further action by Administrative Agent, any Lender, L/C Issuer or Swing Line Lender), an amount equal to the excess of the amount of interest and fees that should have been paid for such period over the amount of interest and fees actually paid for such period. This paragraph shall not limit the rights of Administrative Agent, any Lender, L/C Issuer or Swing Line Lender, as the case may be, including the rights available under Article 2 or under Article 9. Each Borrower’s obligations under this paragraph shall survive the termination of the Commitments and the repayment of all other Obligations hereunder.

“Applicable Percentage” means, with respect to any Lender at any time, the percentage (carried out to the ninth decimal place) of such Lender’s Commitment at such time divided by the aggregate Commitments of all Lenders; provided that if the Commitments have been terminated pursuant to the terms hereof, then the Applicable Percentage of each Lender shall be determined based upon the Applicable Percentage of such Lender immediately prior to such termination and after giving effect to any subsequent assignments made pursuant to the terms hereof.

“Applicable Rate” means (a) in the case of a Base Rate Loan, the Base Rate plus the Applicable Margin; and (b) in the case of a Eurodollar Rate Loan, the Adjusted Eurodollar Rate plus the Applicable Margin.

CREDIT AGREEMENT – Page 3 

“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

“Arranger” means Texas Capital Bank in its capacity as sole lead arranger and sole book runner.

“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 11.8), and accepted by Administrative Agent, in substantially the form of Exhibit A or any other form approved by Administrative Agent.

“Authorized Party” has the meaning set forth in Section 11.11(d)(iii).

“Availability” means, as of any date, the difference between (a) an amount equal to the lesser of (i) the Borrowing Base in effect on such date and (ii) the aggregate amount of the Commitments of the Lenders on such date less (b) the total Revolving Credit Exposure of the Lenders on such date.

“Availability Reserves” shall mean, as of any date of determination, such amounts as Administrative Agent may from time to time establish and revise in its Permitted Discretion: (a) to reflect events, conditions, contingencies or risks which, as determined by Administrative Agent, do or may affect either (i) the Collateral or any other Property which is security for the Obligations, (ii) the assets, business or prospects of the Loan Parties, (iii) the security interests and other rights of any Secured Party in the Collateral (including the enforceability, perfection and priority thereof), (b) to reflect Administrative Agent’s belief that any collateral report or financial information furnished by or on behalf of the Loan Parties to Administrative Agent is or may have been incomplete, inaccurate or misleading in any material respect, (c) in respect of Rent Reserves, Bank Products and Hedge Agreements and (d) in respect of any state of facts which Administrative Agent determines constitutes a Default or an Event of Default or may, with notice or passage of time or both, constitute a Default or an Event of Default.

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

“Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing Law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

“Bank Product Agreements” means those certain agreements entered into from time to time between any Loan Party and a Bank Product Provider in connection with any of the Bank Products, including without limitation, Hedge Agreements.

“Bank Product Obligations” means all obligations, liabilities, contingent reimbursement obligations, fees, and expenses owing by any Loan Party or any of its Subsidiaries to any Bank Product Provider pursuant to or evidenced by the Bank Product Agreements and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, and including all such amounts that any Loan Party or such Subsidiary is obligated to reimburse to any Bank Product Provider as a result of such Bank Product Provider purchasing participations or executing indemnities or reimbursement obligations with respect to the Bank Products provided to any Loan Party or such Subsidiaries pursuant to the Bank Product Agreements. For the avoidance of doubt, the Bank Product Obligations arising under any Hedge Agreement shall be determined by the Hedge Termination Value thereof.

CREDIT AGREEMENT – Page 4 

“Bank Product Provider” means any Lender or Affiliate of a Lender (or any Person that was a Lender or an Affiliate of a Lender at the time the relevant Hedge Agreement was entered into) that provides Bank Products to the Loan Parties from time to time.

“Bank Products” means any service provided to, facility extended to, or transaction entered into with, any Loan Party by any Bank Product Provider consisting of (a) deposit accounts, (b) cash management services, including treasury, depository, return items, overdraft, controlled disbursement, merchant store value cards, e-payables services, electronic funds transfer, interstate depository network, automatic clearing house transfer (including the Automated Clearing House processing of electronic funds transfers through the direct Federal Reserve Fedline system) and other cash management arrangements maintained with any Bank Product Provider, (c) debit cards, stored value cards, and credit cards (including commercial credit cards (including so-called “procurement cards” or “P-cards”)) and debit card and credit card processing services or (d) Hedge Agreements.

“Base Rate” means, for any day, a rate of interest per annum equal to the highest of (a) the Prime Rate for such day; (b) the sum of the Federal Funds Rate for such day plus one half of one percent (0.5%); and (c) the Adjusted Eurodollar Rate for such day plus one percent (1.00%).

“Base Rate Borrowing” means, as to any Borrowing, the Base Rate Loans comprising such Borrowing.

“Base Rate Loan” means a Loan bearing interest based on the Base Rate.

“Beneficial Ownership Certification” means a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation.

“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.

“Blocked Accounts” has the meaning set forth in Section 2.11.

“Board of Governors” means the Board of Governors of the Federal Reserve System of the U.S.

“Borrower” or “Borrowers” has the meaning set forth in the introductory paragraph hereto.

“Borrower Representative” has the meaning set forth in Section 2.13(a).

“Borrowing” means a Revolving Credit Borrowing or a Swing Line Borrowing, as the context may require.

CREDIT AGREEMENT – Page 5

“Borrowing Base” means, as of any date, an amount equal to the sum of, without duplication:

(a)            ninety percent (90%) of the Borrowers’ Eligible Accounts owing by Investment Grade Account Debtors, plus

(b)            eighty-five percent (85%) of the Borrowers’ Eligible Accounts owing by Non-Investment Grade Account Debtors, plus

(c)            fifty percent (50%) of the Borrowers’ Eligible Inventory, valued at the lower of cost or market value, determined on a weighted average cost basis; provided, that the maximum amount of Eligible Inventory of the Borrowers that may be included in the Borrowing Base pursuant to this clause (c) after giving effect to the advance rate set forth herein shall not exceed $3,000,000, plus

(d)            the lesser of (i) the product of eighty percent (80%) of the Net Orderly Liquidation Value of the Borrowers’ Eligible Generator Units as determined pursuant to the most recent generator appraisal ordered, received and relied upon by Administrative Agent pursuant to Section 6.6(c) and (ii) ninety-five percent (95%) of the net book value of the Borrowers’ Eligible Generator Units; provided that (A) the value of Eligible Generator Units included in the Borrowing Base pursuant to clause (d)(i) after giving effect to the advance rate set forth herein shall be reduced, on the first day of each calendar month following the Closing Date, based on a 7-year straight line amortization schedule until Administrative Agent receives a new appraisal at which time the Net Orderly Liquidation Value will reset, and (B) the value of Eligible Generator Units included in the Borrowing Base pursuant to this clause (d) after giving effect to the advance rate set forth herein shall be reduced, on the date any item of Eligible Generator Units ceases to be Eligible Generator Units for any reason (including as a result of any sale, transfer or other disposition thereof or any casualty or condemnation event with respect thereto), by the amount then included in the Borrowing Base with respect to such item of Eligible Generator Units, plus

(e)            eighty percent (80%) of the Net Invoice Cost of the Borrowers’ Eligible New Generator Units, minus

(f)             any Availability Reserves established by Administrative Agent in its Permitted Discretion.

“Borrowing Base Report” means, as of any date of preparation, a certificate substantially the form of Exhibit B, or in any other form agreed to in writing by Borrowers and Administrative Agent, prepared by and certified by a Responsible Officer of the Borrower Representative.

“Borrowing Request” means a writing, substantially in the form of Exhibit D, properly completed and signed by the Borrower Representative, requesting a Revolving Credit Borrowing.

“Business Day” means (a) for all purposes, a weekday, Monday through Friday, except a legal holiday or a day on which banking institutions in Dallas, Texas are authorized or required by Law to be closed, and (b) for purposes of the calculation of the Eurodollar Rate, a day that satisfies the requirements of clause (a) and that is a day on which commercial banks in the City of London, England are open for business and dealing in offshore Dollars. Unless otherwise provided, the term “days” when used herein means calendar days.

CREDIT AGREEMENT – Page 6

“Capital Expenditure” means, with respect to any Person, any expenditure by such Person for (a) an asset which will be used in a year or years subsequent to the year in which the expenditure is made and which asset is properly classified in relevant financial statements of such Person as equipment, real Property, a fixed asset or a similar type of capitalized asset in accordance with GAAP or (b) an asset relating to or acquired in connection with an acquired business, and any and all acquisition costs related to clause (a) or (b) above.

“Capitalized Lease Obligation” means, with respect to any Person, the amount of Debt under a lease of Property by such Person that would be shown as a liability on a balance sheet of such Person prepared for financial reporting purposes in accordance with GAAP.

“Cash Collateralize” means to pledge and deposit with or deliver to Administrative Agent, for the benefit of one or more of L/C Issuer or Lenders, as collateral for L/C Obligations or obligations of Lenders to fund participations in respect of L/C Obligations, cash or deposit account balances or, if Administrative Agent and L/C Issuer shall agree in their sole discretion, other credit support, in each case pursuant to documentation in form and substance satisfactory to Administrative Agent and L/C Issuer. “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.

“Cash Interest Expense” means, for any Person for any period, total interest expense in respect of all outstanding Debt actually paid or that is payable by such Person during such period, including, without limitation, all commissions, discounts, and other fees and charges with respect to letters of credit and all net costs under Hedge Agreements in respect of interest rates to the extent such costs are allocable to such period, but excluding interest expense not payable in cash, all as determined in accordance with GAAP.

“CFC” means a “controlled foreign corporation” as defined in Section 957 of the Code.

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

CREDIT AGREEMENT – Page 7

“Change of Control” means an event or series of events by which (a) the Permitted Holders shall cease for any reason (i) to have record and beneficial ownership (directly or indirectly) of more than 50% of the outstanding voting Equity Interests of Parent on a fully diluted basis or (ii) to Control Parent; (b) the Permitted Holders shall cease to have the ability to elect (either through share ownership or contractual voting rights) a majority of the board of directors or equivalent governing body of Parent; (c) Parent shall cease to own, free and clear of all Liens or other encumbrances (other than Permitted Liens), directly or indirectly, at least 100% of the outstanding direct or indirect Equity Interests of Company on a fully diluted basis; (d) Company shall cease to own, free and clear of all Liens or other encumbrances (other than Permitted Liens), directly or indirectly, at least 100% of the outstanding direct or indirect Equity Interests of any other Loan Party on a fully diluted basis; or (e) a “change of control”, “fundamental change” or any comparable term under the Parent Loan Documents shall have occurred.

“Closing Date” means the first date all the conditions precedent in Section 4.1 are satisfied or waived in accordance with Section 11.10.

“Code” means the Internal Revenue Code of 1986, as amended from time to time, and any successor statute, together with the regulations promulgated thereunder.

“Collateral” means substantially all of the Property of the Loan Parties and their Subsidiaries as described in the Security Documents, including 100% of the Equity Interests in Company and any other Loan Party, together with any other Property and collateral described in the Security Documents, including, among other things, any Property which may now or hereafter secure the Obligations or any part thereof (but which in no event will include any Excluded Asset).

“Collateral Access Agreement” means a landlord waiver, mortgagee waiver, bailee letter or similar acknowledgment of any lessor, warehouseman, processor or other Person in possession of any Collateral or on whose Property any Collateral is located, in form and substance reasonably satisfactory to Administrative Agent.

“Commitment” means, as to each Lender, its obligation to (a) make Revolving Credit Loans to Borrowers pursuant to Section 2.1(a), (b) purchase participations in L/C Obligations, and (c) purchase participations in Swing Line Loans, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2.1 under the caption “Commitment” or opposite such caption in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be (a) terminated or reduced from time to time in accordance with Section 2.9(a), (b) increased from time to time in accordance with Section 2.10 or (c) otherwise adjusted from time to time in accordance with this Agreement.

“Commitment Fee Rate” means, with respect to the commitment fees payable hereunder, the applicable percentages per annum set forth below under the caption “Commitment Fee Rate” as determined based on the daily average unused amount of the Commitments during any fiscal month in accordance with Section 2.4(c); provided that until the last day of the first fiscal month ending after the Closing Date, the Commitment Fee Rate shall be the applicable percentage per annum set forth below in Pricing Level 2:

Pricing
Level	Daily Average Unused Amount	Commitment Fee Rate
1	< 50% of the Commitments		0.250	%
2	> 50% of the Commitments		0.500	%

CREDIT AGREEMENT – Page 8

“Commodity Account Control Agreement” has the meaning assigned to such term in the Security Agreement.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

“Communications” means, collectively, any notice, demand, communication, information, document or other material provided by or on behalf of the Loan Parties pursuant to any Loan Document or the transactions contemplated therein which is distributed to Administrative Agent, any Lender, L/C Issuer or Swing Line Lender by means of electronic communications pursuant to Section 11.11(d), including through the Platform.

“Company” has the meaning set forth in the introductory paragraph hereto.

“Compliance Certificate” means a certificate, substantially in the form of Exhibit C, or in any other form agreed to by Company and Administrative Agent, prepared by and certified by a Responsible Officer of Company.

“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

“Constituent Documents” means (a) in the case of a corporation, its articles or certificate of incorporation and bylaws; (b) in the case of a general partnership, its partnership agreement; (c) in the case of a limited partnership, its certificate of limited partnership or certificate of formation, as applicable, and partnership agreement; (d) in the case of a trust, its trust agreement; (e) in the case of a joint venture, its joint venture agreement; (f) in the case of a limited liability company, its articles of organization, operating agreement, regulations and/or other organizational and governance documents and agreements; and (g) in the case of any other entity, its organizational and governance documents and agreements.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have correlative meanings thereto.

“Control Agreements” means, collectively, the Commodity Account Control Agreements, the Deposit Account Control Agreements and the Securities Account Control Agreements, in each case, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“Credit Extension” means each of (a) a Borrowing and (b) an L/C Credit Extension.

“Cure Amount” has the meaning set forth in Section 9.3.

CREDIT AGREEMENT – Page 9

“Cure Right” has the meaning set forth in Section 9.3.

“Debt” means, of any Person as of any date of determination (without duplication): (a) all obligations of such Person for borrowed money; (b) all obligations of such Person evidenced by bonds, notes, debentures, or other similar instruments; (c) all obligations of such Person to pay the deferred purchase price of Property or services, except trade accounts payable of such Person arising in the ordinary course of business that are not past due by more than ninety (90) days; (d) all Capitalized Lease Obligations of such Person; (e) all Debt or other obligations of others Guaranteed by such Person; (f) all obligations secured by a Lien existing on Property owned by such Person, whether or not the obligations secured thereby have been assumed by such Person or are non-recourse to the credit of such Person; (g) any other obligation for borrowed money or other financial accommodations which in accordance with GAAP would be shown as a liability on the balance sheet of such Person; (h) any repurchase obligation or liability of a Person with respect to Accounts, chattel paper or notes receivable sold by such Person; (i) any liability under a sale and leaseback transaction that is not a Capitalized Lease Obligation; (j) any obligation under any so called “synthetic leases;” (k) any obligation arising with respect to any other transaction that is the functional equivalent of borrowing but which does not constitute a liability on the balance sheets of a Person; (l) all payment and reimbursement obligations of such Person (whether contingent or otherwise) in respect of letters of credit, bankers’ acceptances, surety or other bonds and similar instruments; (m) all liabilities of such Person in respect of unfunded vested benefits under any Plan; (n) all Hedge Obligations of such Person, valued at the Hedge Termination Value thereof; and (o) all obligations of such Person in respect of Disqualified Equity Interests.

For all purposes, the Debt of any Person shall include the Debt of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Debt is expressly made non-recourse to such Person.

“Debtor Relief Laws” means Title 11 of the United States Code, as now or hereafter in effect, or any other applicable Law, domestic or foreign, as now or hereafter in effect, relating to bankruptcy, insolvency, liquidation, receivership, reorganization, assignment for the benefit of creditors, moratorium, arrangement or composition, extension or adjustment of debts, or similar Laws affecting the rights of creditors.

“Default” means an Event of Default or the occurrence of an event or condition which with notice or lapse of time or both would become an Event of Default.

“Default Interest Rate” means (a) when used with respect to Obligations other than Letter of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the Applicable Margin, if any, applicable to a Base Rate Loan plus (iii) two percent (2%) per annum; provided, however, that with respect to a Eurodollar Rate Loan, the Default Interest Rate shall be an interest rate equal to the interest rate (including any Applicable Margin) otherwise applicable to such Loan plus two percent (2%) per annum, and (b) when used with respect to Letter of Credit Fees, a rate equal to the Applicable Margin plus two percent (2%) per annum; provided, however, in no event shall the Default Interest Rate exceed the Maximum Rate.

CREDIT AGREEMENT – Page 10

  

“Defaulting Lender” means, subject to Section 11.22(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two (2) Business Days of the date such Loans were required to be funded hereunder, or (ii) pay to Administrative Agent, the L/C Issuer, the Swing Line Lender or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit or Swing Line Loans) within two (2) Business Days of the date when due, (b) has notified the Borrower Representative, Administrative Agent, L/C Issuer or Swing Line Lender in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect, (c) has failed, within three (3) Business Days after written request by Administrative Agent or the Borrower Representative, to confirm in writing to Administrative Agent and the Borrower Representative that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by Administrative Agent and the Borrower Representative), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity, or (iii) become the subject of a Bail-In Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any Equity Interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 11.22(b)) upon delivery of written notice of such determination to the Borrower Representative and each Lender.

“Deposit Account Control Agreement” has the meaning assigned to such term in the Security Agreement.

“Disposition” means any sale, lease, sub-lease, license, transfer, assignment, conveyance, release, loss or other disposition, or entry into any contract the performance of which would result in any of the foregoing, of any interest in Property, or of any interest in a Subsidiary that owns Property, in any transaction or event or series of transactions or events, and “Dispose” has the correlative meaning thereto.

“Disqualified Equity Interest” means any Equity Interest that, by its terms (or the terms of any security or other Equity Interests into which it is convertible or for which it is exchangeable), or upon the happening of any event or condition (a) matures or is mandatorily redeemable (other than solely for Equity Interests that are not Disqualified Equity Interests), pursuant to a sinking fund obligation or otherwise (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations that are accrued and payable and the termination of the Commitments), (b) is redeemable at the option of the holder thereof, in whole or in part, (c) provides for scheduled payments of dividends in cash, or (d) is or becomes convertible into or exchangeable for Debt or any other Equity Interests that would constitute Disqualified Equity Interests, in each case, prior to the date that is ninety-one days after the Maturity Date; provided that if such Equity Interests are issued pursuant to a plan for the benefit of employees of any Loan Party or any of its Subsidiaries or by any such plan to such employees, such Equity Interests shall not constitute Disqualified Equity Interests solely because they may be required to be repurchased by any Loan Party or its Subsidiaries in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s termination, death or disability.

CREDIT AGREEMENT – Page 11

“Dollars” and “$” mean lawful money of the U.S.

“Domestic Subsidiary” means any Subsidiary that is organized under the Laws of any political subdivision of the U.S.

“EBITDA” means, for any Person for any period, an amount equal to: (a) Net Income plus (b) the sum (in each case, without duplication) of the following to the extent deducted in the calculation of Net Income: (i) interest expense; (ii) Taxes based on income or profits; (iii) depreciation; (iv) amortization; (v) losses that are unusual and infrequently occurring determined in accordance with GAAP; (vi) other non-recurring expenses reducing such Net Income which do not represent a cash item in such period or any future period; and (vii) the amount of any Specified EBITDA Equity Contribution that is deemed to be EBITDA for any fiscal quarter included in the trailing four fiscal quarter period pursuant to Section 9.3; minus (c) the sum (in each case, without duplication) of the following to the extent included in the calculation of Net Income: (i) income tax credits; (ii) gains that are unusual and infrequently occurring determined in accordance with GAAP; and (iii) all non-recurring, non-cash items increasing Net Income.

“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

“EEA Resolution Authority” means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

CREDIT AGREEMENT – Page 12

“Eligible Accounts” means, as of any applicable period of determination thereof, all Accounts of Borrowers (net of service charges, interest and finance fees) created in the ordinary course of business that Administrative Agent determines are eligible as the basis for the extension of the Credit Extensions. Without limiting the foregoing, no Account shall be an Eligible Account if:

(a)          it does not comply in all material respects with all applicable Laws, rules, and regulations, including, without limitation, usury Laws, the Federal Truth in Lending Act, and Regulation Z of the Board of Governors of the Federal Reserve System;

(b)          it has been outstanding for more than ninety (90) days past the original date of invoice or sixty (60) days after the original date payment is due;

(c)          (i) the goods giving rise to it have not been delivered to the account debtor and do not constitute a final sale or (ii) the services giving rise to it have not been performed for the account debtor;

(d)          it represents a progress billing or retainage, or relates to services for which a performance, surety or completion bond or similar assurance has been issued;

(e)          it arises from a sale to an Affiliate, from a sale on a cash-on-delivery, bill- and-hold, sale-or-return, sale-on-approval, consignment, or other repurchase or return basis, or from a sale for personal, family or household purposes;

(f)           it is not subject to a duly perfected, first priority Lien in favor of Administrative Agent;

(g)          it is subject to any Lien other than (i) a Lien in favor of Administrative Agent, or (ii) a Permitted Lien which does not have priority over the Lien in favor of Administrative Agent;

(h)          it arises out of a contract with or order from, an account debtor that, by its terms, prohibits or makes void or unenforceable the grant of a security interest by the applicable Borrower to Administrative Agent in and to such Account;

(i)           it does not conform with a covenant or representation herein or in the other Loan Documents;

(j)           it is owing by a creditor or supplier of any Borrower or any Subsidiary thereof, or is otherwise subject to a potential offset, counterclaim, dispute, deduction, discount, recoupment, reserve, defense, chargeback, credit or allowance that has been asserted in writing;

(k)          the account debtor is insolvent or the subject of any bankruptcy or insolvency proceeding, or has made an assignment for the benefit of creditors, suspended normal business operations, dissolved, liquidated, terminated its existence, ceased to pay its debts as they become due, or suffered a receiver or trustee to be appointed for any of its assets or affairs;

(l)           it is evidenced by chattel paper or an instrument;

(m)         a default exists under the Account by any party thereto;

CREDIT AGREEMENT – Page 13

(n)          it is owed by an Affiliate, employee, officer, director or shareholder of Parent, any Borrower or any of their Subsidiaries;

(o)          it is owed in currency other than Dollars by the account debtor;

(p)          the account debtor is organized or has its principal offices or assets outside the United States or Canada;

(q)          the Account is owed by an individual or a Sanctioned Person;

(r)           if more than twenty-five percent (25%) of the aggregate balances then outstanding on all Accounts owed by such account debtor and its Affiliates are unpaid for more than (i) sixty (60) days after the original date payment is due or (ii) ninety (90) days past the dates of their original invoices;

(s)          it is owing by a Governmental Authority, unless the account debtor is the U.S. or any department, agency, or instrumentality thereof and the Account has been assigned to Administrative Agent in compliance with the Federal Assignment of Claims Act of 1940;

(t)           it includes a billing for interest, fees or late charges;

(u)          when aggregated with all other Accounts owed, without duplication, (i) by an Investment Grade Account Debtor and its Affiliates to which such Account relates exceeds thirty-five percent (35%) of all Eligible Accounts owed by all of Borrowers’ account debtors; (ii) by a Non-Investment Grade Account Debtor and its Affiliates to which such Account relates exceeds twenty-five percent (25%) of all Eligible Accounts owed by all of Borrowers’ account debtors or (iii) solely for purposes of calculating the Borrowing Base in any period on or prior to December 31, 2019, by QEP Resources, Inc. and its Affiliates to which such Account relates exceeds thirty-five percent (35%) of all Eligible Accounts owed by all of Borrowers’ account debtors; provided, however, that, in each case under the foregoing clauses (i) through (iii), if such aggregate exceeds such percentage of all Eligible Accounts, only such excess shall be ineligible; and

(v)          Administrative Agent otherwise reasonably determines it be ineligible.

The amount of the Eligible Accounts owed by an account debtor to any Borrower shall be reduced by the amount of all “contra accounts” and other obligations owed, whether by such Borrower or any other Borrower or Subsidiary, to such account debtor. Administrative Agent shall have the right to create and adjust eligibility standards and related services from time to time in its reasonable discretion.

“Eligible Assignee” means any Person that meets the requirements to be an assignee under Section 11.8(b)(iii), (v) and (vi) (subject to such consents, if any, as may be required under Section 11.8(b)(iii)).

“Eligible Generator Units” means the Eligible Inventory owned by the Borrowers consisting of Generator Units.

CREDIT AGREEMENT – Page 14

“Eligible Inventory” means, as of any applicable period of determination thereof, all Inventory of Borrowers that Administrative Agent determines is eligible as the basis for the extension of the Credit Extensions. Without limiting the foregoing, no Inventory shall be Eligible Inventory if:

(a)          it is not subject to a duly perfected, first priority Lien in favor of Administrative Agent;

(b)          it is subject to any Lien other than (i) a Lien in favor of Administrative Agent or (ii) a Permitted Lien which does not have priority over the Lien in favor of Administrative Agent;

(c)          it is consigned to or from third parties;

(d)          it is slow-moving, obsolete, unserviceable, perishable or spoiled, unless such Inventory can be (i) used or repurposed to create new Inventory of the Borrowers or (ii) sold to another customer of a Borrower;

(e)          it is accounted for on the books of a Borrower as burden or overhead;

(f)           comprised of packaging and shipping supplies, materials, boxes or containers (in each case, other than such packaging and shipping supplies, materials, boxes or containers that constitute actual Inventory of the Borrowers);

(g)          it is used, damaged or defective, unless such Inventory can be (i) used or repurposed to create new Inventory of the Borrowers or (ii) sold to another customer of a Borrower;

(h)          it is located on premises not owned by the Borrowers (other than a customer site or location), unless either: (i) Administrative Agent shall have received a Collateral Access Agreement with respect thereto, executed by the mortgagee, lessor, contract warehouseman, bailor or such other Person, as the case may be, and segregated or otherwise separately identifiable from goods of others, if any, stored on the premises and such Collateral Access Agreement shall remain in full force and effect; or (ii) Administrative Agent shall have established a Rent Reserve with respect to such premises in an amount satisfactory to Administrative Agent;

(i)           it is located at any customer site or location or is in the possession of a customer of any Borrower, unless either: (i) Administrative Agent shall have received a Collateral Access Agreement from such customer; or (ii) such Inventory is subject to a valid uptime energy, servicing or lease agreement with terms acceptable to Administrative Agent in effect at such time;

(j)           it is located outside of the continental United States or Canada;

(k)          it is a sample item, is in-transit or is subject to any warehouse receipt or negotiable document;

CREDIT AGREEMENT – Page 15

(l)           it constitutes work in process or raw materials; provided that Generator Units are not raw materials;

(m)         it has been acquired from a Sanctioned Person; or

(n)          Administrative Agent otherwise determines it to be ineligible in its Permitted Discretion.

Administrative Agent shall have the right to create and adjust eligibility standards from time to time in its reasonable discretion.

“Eligible New Generator Units” means the Eligible Inventory owned by the Borrowers consisting of New Generator Units.

“Environmental Laws” means any and all federal, state, and local Laws, regulations, judicial decisions, orders, decrees, plans, rules, permits, licenses, and other governmental restrictions and requirements pertaining to health, safety, or the environment, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §9601 et seq., the Resource Conservation and Recovery Act, 42 U.S.C. §6901 et seq., the Federal Water Pollution Control Act, as amended by the Clean Water Act, 33 U.S.C. §1251 et seq., the Clean Air Act, 42 U.S.C. §7401 et seq., the Emergency Planning and Community Right-to-Know Act, 42 U.S.C. §11001 et seq., the Hazardous Materials Transportation Act, 49 U.S.C. §5101 et seq., the Toxic Substances Control Act, 15 U.S.C. §2601 et seq., the Oil Pollution Act of 1990, 33 U.S.C. §2701 et seq., the Safe Drinking Water Act, 42 U.S.C. §300f et seq., the Occupational Safety and Health Act, 29 U.S.C. §651 et seq., the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. §136 et seq., the Endangered Species Act, U.S.C. §1531 et seq., the National Environmental Policy Act, 42 U.S.C. §4321 et seq., the Rivers and Harbors Appropriation Act of 1899, 33 U.S.C. §407, all similar state statutes and local ordinances, and all regulations promulgated under any of those statutes, and all administrative and judicial actions respecting such legislation, all as amended from time to time.

“Environmental Liabilities” means, as to any Person, all liabilities, obligations, responsibilities, Remedial Actions, losses, damages, punitive damages, consequential damages, treble damages, costs, and expenses (including, without limitation, all reasonable fees, disbursements and expenses of counsel, expert and consulting fees and costs of investigation and feasibility studies), fines, penalties, sanctions, and interest incurred as a result of any claim or demand, by any Person, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute, including any Environmental Law, permit, order or agreement with any Governmental Authority or other Person, arising from environmental, health or safety conditions or the Release or threatened Release of a Hazardous Material into the environment, resulting from the past, present, or future operations of such Person or its Affiliates.

CREDIT AGREEMENT – Page 16

“Equity Interests” means, as to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, together with the regulations promulgated thereunder.

“ERISA Affiliate” means any corporation or trade or business which is a member of the same controlled group of corporations (within the meaning of Section 414(b) of the Code) as a Loan Party, is under common control (within the meaning of Section 414(c) of the Code) with a Loan Party, or is otherwise considered a single employer with a Loan Party pursuant to Sections 414(m) or (o) of the Code, for purposes of the provisions relating to Section 412 of the Code or Section 303 of ERISA.

“ERISA Event” means (a) a Reportable Event with respect to a Plan, (b) a withdrawal by any Loan Party or any ERISA Affiliate from a Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations which is treated as such a withdrawal under Section 4062(e) of ERISA, (c) a complete or partial withdrawal by any Loan Party or any ERISA Affiliate from a Multiemployer Plan, (d) the filing of a notice of intent to terminate a Plan, the treatment of a Plan or Multiemployer Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Plan or Multiemployer Plan, (e) the occurrence of an event or condition which might reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan or Multiemployer Plan, (f) the imposition of any liability to the PBGC under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon any Loan Party or any ERISA Affiliate, (g) the failure of any Loan Party or ERISA Affiliate to meet any funding obligations with respect to any Plan or Multiemployer Plan, or (h) a Plan becomes subject to the at-risk requirements in Section 303 of ERISA or Section 430 of the Code or is in endangered or critical status under Section 305 of ERISA or Section 432 of the Code.

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.

“Eurodollar Rate” means:

(a)      with respect to any Eurodollar Rate Loan for any Interest Period, the per annum rate appearing on the ICE Benchmark Administration LIBOR Rates Page (or on any successor or substitute page or service providing quotations of interest rates applicable to Dollar deposits in the London interbank market comparable to those currently provided on such page, as determined by Administrative Agent from time to time) at approximately 11:00 a.m., London time, on the related Eurodollar Rate Determination Date, as the rate for Dollar deposits with a maturity comparable to such Interest Period, and if such rate does not appear on such screen or service, or such screen or service shall cease to be available, then the Eurodollar Rate shall be the offered rate (as determined by Administrative Agent in its sole discretion) on such other screen or service that displays an average interest settlement rate for deposits in Dollars (for delivery on the first day of such Interest Period) for a term equivalent to such Interest Period as of 11:00 a.m. on the relevant Eurodollar Rate Determination Date; and

CREDIT AGREEMENT – Page 17

(b)          with respect to any interest calculation with respect to a Base Rate Loan on any date, the per annum rate appearing on the ICE Benchmark Administration LIBOR Rates Page (or on any successor or substitute page or service providing quotations of interest rates applicable to Dollar deposits in the London interbank market comparable to those currently provided on such page, as determined by Administrative Agent from time to time) at approximately 11:00 a.m., London time, on the related Eurodollar Rate Determination Date for a term of one (1) month commencing on the date of calculation, and if such rate does not appear on such screen or service, or such screen or service shall cease to be available, then the Eurodollar Rate shall be the offered rate (as determined by Administrative Agent in its sole discretion) on such other screen or service that displays an average interest settlement rate for deposits in Dollars (for delivery on such date of calculation) for a term of one (1) month as of 11:00 a.m. on the relevant Eurodollar Rate Determination Date.

“Eurodollar Rate Borrowing” means, as to any Borrowing, the Eurodollar Rate Loans comprising such Borrowing.

“Eurodollar Rate Determination Date” means a day that is two (2) Business Days prior to the beginning of the relevant Interest Period or prior to the applicable date, as applicable.

“Eurodollar Rate Loan” means each Loan bearing interest based on the Adjusted Eurodollar Rate where the Eurodollar Rate is determined pursuant to clause (a) of the definition thereof.

“Event of Default” has the meaning set forth in Section 9.1.

“Excluded Accounts” means any commodity account, deposit account or securities account (a) established solely as a payroll account and other zero-balance disbursement account, (b) held in a fiduciary capacity and established in connection with employee benefit plans in the ordinary course of business or pursuant to applicable legal requirements, (c) with a balance in each such account individually not exceeding $100,000 at any time and the aggregate balance of all such accounts not exceeding $250,000.

“Excluded Assets” means, collectively:

(a)          assets as to which Administrative Agent and Loan Parties agree in writing that the cost of creating or perfecting a pledge of, or a security interest in, such assets is excessive in relation to the value of the security to be afforded thereby;

CREDIT AGREEMENT – Page 18

(b)          any rights or interest in any lease, contract, license or license agreement covering personal Property or real Property and/or such assets subject thereto, so long as under the terms of such lease, contract, license or license agreement, the grant of a security interest or Lien therein for the benefit of the Secured Parties (1) is prohibited, (2) would give any other party to such lease, contract, license or license agreement, instrument or indenture the right to terminate its obligations thereunder, or (3) is permitted only with the consent of another party (including, without limitation, any Governmental Authority) (or would render such lease, contract, license or license agreement cancelled, invalid or unenforceable) and such prohibition has not been or is not waived or the consent of the other party to such lease, contract, license or license agreement has not been or is not otherwise obtained; provided that, this exclusion shall in no way be construed to apply if any such prohibition is unenforceable under the UCC or any other Law (including any Debtor Relief Law) or so as to limit, impair or otherwise affect the unconditional continuing security interests in and Liens for the benefit of the Secured Parties upon any rights or interests in or to monies due or to become due under any such lease, contract, license or license agreement (including any receivables) and provided further that, with respect to any lease, contract, license or license agreement entered into after the Closing Date, the Loan Parties shall use commercially reasonable efforts to permit Liens for the benefit of the Secured Parties on each such lease, contract, license or license agreement and avoid prohibitions of the types described in clauses (1) through (3) above;

(c)          any such account described in clause (b) of the definition of “Excluded Accounts”;

(d)          any application for registration of a trademark filed in the United States Patent and Trademark Office on an intent to use basis to the extent that the grant of a security interest in any such trademark application would adversely affect the validity or enforceability or result in cancellation or voiding of such trademark application, provided, however, that such trademark applications shall no longer be considered Excluded Assets upon the filing of a Statement of Use or an Amendment to Allege Use has been filed and accepted in the United States Patent and Trademark Office;

(e)          any assets that are subject to a Lien permitted under Section 7.2(g) if the contract or other agreement in which the Lien is granted (or the documentation providing for the Debt secured thereby) prohibits the creation of any other Lien on such assets; provided that immediately upon the ineffectiveness, lapse or termination of any such Lien permitted under Section 7.2(g), such assets shall no longer be considered Excluded Assets pursuant to this clause (e) and the Collateral shall include all such rights and interest in such assets as if such Lien permitted under Section 7.2(g) had never been in effect (unless such asset would constitute as an Excluded Asset under any other clause herein); and

(f)           any Equity Interests in the Excluded Subsidiary (so long as the Excluded Subsidiary constitutes a CFC) in excess of 65% (or such greater percentage as permitted under applicable law that could not reasonably be expected to cause any material adverse tax consequences) of the issued and outstanding Equity Interests entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) in the Excluded Subsidiary.

To the extent that such Property constitutes as an “Excluded Asset” due to the failure by any Loan Party to obtain a consent as described in clause (b) above, such Loan Party shall use commercially reasonable efforts to obtain such consent and, upon obtaining such consent, such Property shall cease to constitute as an “Excluded Asset”.

CREDIT AGREEMENT – Page 19

“Excluded Subsidiary” means, as of the Closing Date, Flex Leasing Power & Service, ULC, an unlimited liability corporation organized under the laws of Canada.

“Excluded Swap Obligation” means, with respect to any Loan Party, any Swap Obligation if, and to the extent that, all or a portion of the Guarantee of such Loan Party of, or the grant by such Loan Party of a Lien to secure, such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Loan Party’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act (determined after giving effect to any “keepwell, support or other agreement” for the benefit of such Loan Party and any and all guarantees of such Loan Party’s Swap Obligations by any Borrower or any other Loan Party) at the time the Guarantee of such Loan Party, or a grant by such Loan Party of a Lien, becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guarantee or Lien is or becomes excluded in accordance with the first sentence of this definition.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the Laws of, or having its principal office or, in the case of any Lender, its applicable Lending Office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a Law in effect on the date on which (i) such Lender acquires such interest in such Loan or Commitment (other than pursuant to an assignment request by any Borrower under Section 3.6(b)) or (ii) such Lender changes its Lending Office, except in each case to the extent that, pursuant to Section 3.4, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its Lending Office, (c) Taxes attributable to such Recipient’s failure to comply with Section 3.4(g) and (d) any U.S. federal withholding Taxes imposed under FATCA.

“FASB ASC” means the Accounting Standards Codification of the Financial Accounting Standards Board.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreement entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such Sections of the Code.

“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.

CREDIT AGREEMENT – Page 20

“Federal Funds Rate” means, for any day, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers on such day, as published by the Federal Reserve Bank of New York, on the Business Day next succeeding such day, provided that (a) if the day for which such rate is to be determined is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if such rate is not so published for any day, the Federal Funds Rate for such day shall be the average rate charged to Administrative Agent on such day on such transactions as determined by Administrative Agent.

“Fee Letter” means (a) the separate fee letter dated as of February 8, 2019, between Borrowers and Texas Capital Bank and (b) any other fee letter among Borrowers and Administrative Agent, Arranger and/or Texas Capital Bank concerning fees to be paid by Borrowers in connection with this Agreement including any amendments, restatements, supplements or modifications thereof. By its execution of this Agreement, each Lender acknowledges and agrees that Administrative Agent, Arranger and/or Texas Capital Bank may elect to treat as confidential and not share with Lenders any Fee Letters executed from time to time in connection with this Agreement.

“Financial Covenants” means the covenants set forth in Sections 8.1 and 8.2.

“Fixed Charge Coverage Ratio” means, for any date of determination, the ratio of (a) Annualized EBITDA of Company and its Subsidiaries minus Unfinanced Capital Expenditures, to (b) Fixed Charges of Company and its Subsidiaries.

“Fixed Charges” means, for any Person for any date of determination, the sum of (a) Annualized Debt Service, plus (b) cash income taxes paid during the trailing twelve (12) fiscal month period then ending on such date, plus (c) the sum of distributions and dividends (including any Permitted Tax Distributions, but excluding any Restricted Payments to Parent with respect to the Parent Loan made in cash during fiscal year 2019 (such amount, for the avoidance of doubt, not to exceed $10,000,000 in the aggregate)) made during the trailing twelve (12) fiscal month period then ending on such date.

“Foreign Lender” means a Lender that is not a U.S. Person.

“Foreign Subsidiaries” means each Subsidiary other than a Domestic Subsidiary.

“Fraudulent Transfer Laws” has the meaning set forth in Section 12.14.

“Fronting Exposure” means, at any time there is a Lender that is a Defaulting Lender, (a) with respect to L/C Issuer, such Defaulting Lender’s Applicable Percentage of the Outstanding Amount of the L/C Obligations other than L/C Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof, and (b) with respect to Swing Line Lender, such Defaulting Lender’s Applicable Percentage of the Outstanding Amount of Swing Line Loans other than Swing Line Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders in accordance with the terms hereof.

CREDIT AGREEMENT – Page 21

“Fund” means any Person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities.

“GAAP” means generally accepted accounting principles, applied on a consistent basis, as set forth in opinions of the Accounting Principles Board of the American Institute of Certified Public Accountants and/or in statements of the Financial Accounting Standards Board and/or their respective successors and which are applicable in the circumstances as of the date in question. Accounting principles are applied on a “consistent basis” when the accounting principles applied in a current period are comparable in all material respects to those accounting principles applied in a preceding period.

“Generator Packages” means uptime energy power units, generally consisting of an engineered package of components, including, without limitation, a turbine engine, combustor, synchronous generator, recuperator, inlet guide vanes, generator braking resistor, and other control devices mounted on either a metal skid or trailer.

“Generator Units” means Inventory of the Borrowers consisting of completed Generator Packages.

“Governmental Authority” means the government of the U.S. or any other nation, or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank, tribal body or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank), and any group or body charged with setting financial accounting or regulatory capital rules or standards (including without limitation, the Financial Accounting Standards Board, the Bank for International Settlements or the Basel Committee on Banking Supervision or any successor or similar authority to any of the foregoing).

“Guarantee” by any Person means any obligation or liability, contingent or otherwise, of such Person directly or indirectly guaranteeing any Debt or other obligation of any other Person as well as any obligation or liability, direct or indirect, contingent or otherwise, of such Person (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other obligation or liability (whether arising by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services, to operate Property, to take-or-pay, or to maintain net worth or working capital or other financial statement conditions or otherwise) or (b) entered into for the purpose of indemnifying or assuring in any other manner the obligee of such Debt or other obligation or liability of the payment thereof or to protect the obligee against loss in respect thereof (in whole or in part); provided that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning.

“Guarantors” means, collectively, (a) each of the Borrowers with respect to the Obligations under any Bank Product Agreement to the extent that each such Borrower is not the primary obligor with respect thereto, (b) Flex Power Co., a Delaware corporation, and each other Domestic Subsidiary of Company (other than Borrowers) and (d) each Person (other than Parent) who from time to time Guarantees all or any part of the Obligations under the Loan Documents, including any Person who becomes a party to this Agreement pursuant to a Joinder Agreement.

CREDIT AGREEMENT – Page 22

“Guaranty” means, collectively, the guaranty made by the Loan Parties party to this Agreement pursuant to Article 12 and each other written guaranty executed by one or more of the other Guarantors in favor of Administrative Agent, for the benefit of Secured Parties, in form and substance satisfactory to Administrative Agent.

“Hazardous Material” means any substance, product, waste, pollutant, material, chemical, contaminant, constituent, or other material which is or becomes listed, regulated, or addressed under any Environmental Law, including, without limitation, any petroleum and petroleum byproducts, natural gas, natural gas liquids, liquefied natural gas or synthetic gas usable for fuel (or mixture of natural gas and such synthetic gas), polychlorinated biphenyls, lead and lead-based paint, radon, radioactive materials, flammables and explosives, and mold. “Hazardous Substances” shall include, without limitation, any hazardous or toxic substance, material or waste or any chemical, element, compound or mixture which is: (i) asbestos and asbestos-containing materials; (ii) designated as a “pollutant” or “toxic pollutant” pursuant to the Federal Water Pollution Control Act (33 U.S.C. Paragraph 1251 et seq.); (iii) defined as a “solid or hazardous waste” pursuant to the Federal Resource Conservation and Recovery Act (42 U.S.C. Paragraph 6901 et seq.); (iv) defined as “hazardous substances” pursuant to the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. Paragraph 9601 et seq.); (v) listed in the United States Department of Transportation Table (49 CFR 172.101) or by the Environmental Protection Agency as hazardous substances (40 CFR part 302); (vi) chemicals, elements, compounds, mixtures, substances, materials or wastes otherwise regulated under any applicable federal, state or local Environmental Laws; (vii) polychlorinated biphenyls; (ix) “pesticides” as defined in the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. §§ 136 et seq.; (x) “contaminant” as defined in the Safe Drinking Water Act, 42 U.S.C. §§ 300f et seq.; (xi) “extremely hazardous substances” as defined in the Emergency Planning and Community Right to Know Act, 42 U.S.C. §§ 11001 et seq.; (xii) “hazardous materials” as defined in the Hazardous Materials Transportation Act, 49 U.S.C. §§ 5101 et seq.; (xiii) “hazardous air pollutants” as defined in the Clean Air Act, 42 U.S.C. §§ 7401 et seq.; and (xiv) “oil” as defined in the Oil Pollution Act of 1990, 33 U.S.C. §§ 2701 et seq.

“Hedge Agreement” means (a) any and all interest rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules and annexes, a “Master Agreement”), (c) any and all Master Agreements and any and all related confirmations and (d) any other agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.

CREDIT AGREEMENT – Page 23

“Hedge Obligations” means, at any time with respect to any Person, all indebtedness, liabilities, and obligations of such Person under or in connection with any Hedge Agreement, whether actual or contingent, due or to become due and existing or arising from time to time.

“Hedge Termination Value” means, in respect of any one or more Hedge Agreements, after taking into account the effect of any legally enforceable netting agreement relating to such Hedge Agreements, (a) for any date on or after the date such Hedge Agreements have been closed out and settlement amounts, early termination amounts or termination value(s) determined in accordance therewith, such settlement amounts, early termination amounts or termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Hedge Agreements, as determined based upon one or more commercially reasonable mid-market or other readily available quotations provided by any dealer which is a party to such Hedge Agreement or any other recognized dealer in such Hedge Agreements (which may include a Lender or any Affiliate of a Lender).

“Honor Date” has the meaning set forth in Section 2.2(c)(i).

“Increase Effective Date” has the meaning set forth in Section 2.10(c).

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of Borrowers or any other Loan Party under any Loan Document and (b) to the extent not otherwise described in clause (a), Other Taxes.

“Information” has the meaning set forth in Section 11.26.

“Intellectual Property” means all copyrights, copyrightable works, patents, patent applications, trademarks, service marks, trade names, brand names, trade dress, slogans, logos and Internet domain names and uniform resource locators, and the goodwill associated with any of the foregoing, and other types of intellectual or industrial property rights and foreign equivalent or counterpart rights and forms of protection of a similar or analogous nature to any of the foregoing or having similar effect in any jurisdiction throughout the world, and registrations and applications for registration of any of the foregoing, and all documentation and embodiments of the foregoing, in whatever form, now owned or hereafter acquired.

“Intercreditor Agreement” means that certain Subordination and Intercreditor Agreement dated as of the Closing Date, by and among Administrative Agent, the Subordinated Lenders, Parent, and the Loan Parties, as the same may be amended, amended and restated, supplemented or otherwise modified from time to time in accordance therewith and herewith.

“Interest Period” means with respect to any Eurodollar Rate Loan, the period commencing on the date such Loan becomes a Eurodollar Rate Loan (whether by the making of a Loan or its continuation or conversion) and ending on the numerically corresponding day in the calendar month that is one (1), two (2) or three (3) months thereafter (in each case subject to the availability of the Eurodollar Rate for such period), as the Borrower Representative may elect; provided that (a) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (b) any Interest Period pertaining to a Eurodollar Rate Loan that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period.

CREDIT AGREEMENT – Page 24

“Interest Rate” means the rate equal to the lesser of (a) the Maximum Rate and (b) the Applicable Rate.

“Inventory” means inventory, as defined in the UCC.

“Investment Grade Account Debtor” means, any account debtor whose securities are rated BBB- (or then equivalent grade) or higher by S&P or Baa3 (or then equivalent grade) or higher by Moody’s, or whose credit rating or credit quality has the characteristics of an Investment Grade Account Debtor as determined by Administrative Agent in its sole discretion.

“IRS” means the Internal Revenue Service or any entity succeeding to all or any of its functions.

“ISP” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice, Inc. (or such later version thereof as may be in effect at the time of issuance).

“Issuer Documents” means, with respect to any Letter of Credit, the Letter of Credit Application, and any other document, agreement and instrument entered into by L/C Issuer and any Borrower or in favor of L/C Issuer and relating to such Letter of Credit.

“Joinder Agreement” means a Joinder Agreement in the form of Exhibit H hereto.

“L/C Advance” means, with respect to each Lender, such Lender’s funding of its participation in any L/C Borrowing in accordance with its Applicable Percentage.

“L/C Borrowing” means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed by Borrowers on the date when made or refinanced as a Revolving Credit Borrowing.

“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the increase of the amount thereof.

“L/C Issuer” means Texas Capital Bank in its capacity as issuer of Letters of Credit hereunder, or any successor issuer of Letters of Credit hereunder.

“L/C Obligations” means, as of any date of determination, the aggregate amount available to be drawn under all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all L/C Borrowings. For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.4. For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.

CREDIT AGREEMENT – Page 25

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

“Lease” of any Person means all of the right, title and interest of such Person as lessee or licensee in, to and under a lease or license of land, improvements and/or fixtures.

“Lenders” means, (a) at any time prior to the termination of the Commitments, any Person that has a Commitment at such time, and (b) at any time after the termination of the Commitments, any Person that has Revolving Credit Exposure at such time. Unless the context otherwise requires, the term “Lenders” includes Swing Line Lender, L/C Issuer and their respective successors and assigns permitted hereunder.

“Lending Office” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Borrower Representative and Administrative Agent.

“Letter of Credit” means any standby letter of credit issued hereunder providing for the payment of cash upon the honoring of a presentation thereunder.

“Letter of Credit Application” means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by L/C Issuer.

“Letter of Credit Expiration Date” means the day that is seven (7) days prior to the Maturity Date (or, if such day is not a Business Day, the next preceding Business Day).

“Letter of Credit Fee” has the meaning set forth in Section 2.4(b).

“Letter of Credit Sublimit” means an amount equal to the lesser of (a) $5,000,000 and (b) the aggregate Commitments. The Letter of Credit Sublimit is part of, and not in addition to, the Commitments.

“Leverage Ratio” means, as of the last day of the last fiscal month of each fiscal quarter, the ratio of (i) all Debt of Company and its Subsidiaries, on a consolidated basis in accordance with GAAP, as of such date to (ii) EBITDA of Company and its Subsidiaries, on a consolidated basis in accordance with GAAP, for the trailing twelve month period then ending on such date.

CREDIT AGREEMENT – Page 26

“Lien” means, as to any Property of any Person, (a) any lien, mortgage, security interest, tax lien, pledge, charge, hypothecation, collateral assignment, preference, priority, or other encumbrance of any kind or nature whatsoever (including, without limitation, any conditional sale or title retention agreement), whether arising by contract, operation of law, or otherwise, affecting such Property and (b) the signing or filing of a financing statement which names the Person as debtor or the signing of any security agreement or the signing of any document authorizing a secured party to file any financing statement which names such Person as debtor.

“Loan” means an extension of credit by a Lender to any Borrower under Article 2 in the form of a Revolving Credit Loan or a Swing Line Loan.

“Loan Documents” means this Agreement, each Guaranty, the Security Documents, the Notes, the Issuer Documents, and all other promissory notes, security agreements, deeds of trust, assignments, letters of credit, guaranties, and other instruments, documents, or agreements executed and delivered pursuant to or in connection with this Agreement or the Security Documents; provided that the term “Loan Documents” shall not include any Bank Product Agreement.

“Loan Party” means Borrowers, each other Guarantor or any other Person who is or becomes party to any agreement with any Secured Party that obligates such Person to pay or perform, or that Guarantees or secures payment or performance of, the Obligations under the Loan Documents or any part thereof. Notwithstanding the foregoing, neither the Excluded Subsidiary nor the Parent shall constitute as being a “Loan Party” for all purposes under the Loan Documents.

“Material Adverse Effect” means any act, event, condition, or circumstance which could reasonably be expected to materially and adversely affect (a) the operations, business, Properties, liabilities (actual or contingent), or condition (financial or otherwise) of the Loan Parties and their Subsidiaries, taken as a whole; (b) the ability of any Loan Party to perform its obligations under any Loan Document to which it is a party; (c) the legality, validity, binding effect or enforceability against any Loan Party of any Loan Document to which it is a party; or (d) the rights, remedies and benefits available to, or conferred upon, Administrative Agent or any Secured Party under any Loan Documents.

“Maturity Date” means February 8, 2024, or such earlier date on which the Commitment of each Lender terminates as provided in this Agreement.

“Maximum Rate” means, at all times, the maximum rate of interest which may be charged, contracted for, taken, received or reserved by Lenders in accordance with applicable Texas Law (or applicable United States federal Law to the extent that such Law permits Lenders to charge, contract for, receive or reserve a greater amount of interest than under Texas Law). The Maximum Rate shall be calculated in a manner that takes into account any and all fees, payments, and other charges in respect of the Loan Documents that constitute interest under applicable Law. Each change in any interest rate provided for herein based upon the Maximum Rate resulting from a change in the Maximum Rate shall take effect without notice to any Borrower at the time of such change in the Maximum Rate.

CREDIT AGREEMENT – Page 27

“Minimum Collateral Amount” means, at any time, (a) with respect to Cash Collateral consisting of cash or deposit account balances provided to reduce or eliminate Fronting Exposure during the time that a Defaulting Lender exists, an amount equal to 103% of the Fronting Exposure of L/C Issuer with respect to Letters of Credit issued and outstanding at such time, (b) with respect to Cash Collateral consisting of cash or deposit account balances provided in accordance with the provisions of Section 2.7(a)(i), (a)(ii) or (a)(iii), an amount equal to 103% of the Outstanding Amount of all L/C Obligations, and (c) otherwise, an amount determined by Administrative Agent and L/C Issuer in their sole discretion.

“Multiemployer Plan” means a multiemployer plan defined as such in Section 3(37) of ERISA to which contributions are being made or have been made by, or for which there is an obligation to make contributions by or there is any liability, contingent or otherwise, with respect to an Loan Party or any ERISA Affiliate and which is covered by Title IV of ERISA.

“Net Cash Proceeds” means:

(a)           with respect to any Disposition by any Loan Party or any of its Subsidiaries the excess, if any, of (i) the sum of cash and cash equivalents received in connection with such transaction (including any cash or cash equivalents received by way of deferred payment pursuant to, or by monetization of, a note receivable or otherwise, but only as and when so received), over (ii) the sum of (A) the principal amount of any Debt that is secured by the applicable asset and that is required to be repaid in connection with such transaction (other than Debt under the Loan Documents), (B) the reasonable out-of-pocket expenses incurred by such Loan Party or such Subsidiary in connection with such transaction including legal, accounting, investment banking and other professional fees and (C) taxes paid or reasonably estimated to be payable within two years of the date of the relevant transaction as a result of any gain recognized in connection therewith; provided that, if (1) reserves established pursuant to subclause (A) exceeds the actual purchase price adjustment required to be paid in connection with such transactions, or (2) the amount of any estimated taxes pursuant to subclause (C) exceeds the amount of taxes actually required to be paid in cash in respect of such Disposition, in each case, the aggregate amount of such excess shall constitute Net Cash Proceeds.

(b)            with respect to the sale or issuance of any Equity Interests by any Loan Party or any of its Subsidiaries, or the incurrence or issuance of any Debt by any Loan Party or any of its Subsidiaries, the excess of (i) the sum of the cash and cash equivalents received in connection with such transaction over (ii) the underwriting discounts and commissions, and other reasonable and customary out-of-pocket expenses, incurred by such Loan Party or such Subsidiary in connection therewith.

“Net Income” means, for any Person for any period, the net income (or loss) of such Person and its Subsidiaries on a consolidated basis as determined in accordance with GAAP; provided that Net Income shall exclude (a) the net income of any Subsidiary of such Person during such period to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary of such income is not permitted by operation of the terms of its Constituent Documents or any agreement, instrument or Law applicable to such Subsidiary during such period, except that such Person’s equity in any net loss of any such Subsidiary for such period shall be included in determining Net Income, and (b) any income (or loss) for such period of any other Person if such other Person is not a Subsidiary, except that Company’s equity in the net income of such Person for such period shall be included in Net Income up to the aggregate amount of cash actually distributed by such Person during such period to Company or a Subsidiary as a dividend or other distribution (and in the case of a dividend or other distribution to such Subsidiary, such Subsidiary is not precluded from further distributing such amount to Company as described in clause (a) of this proviso).

CREDIT AGREEMENT – Page 28

“Net Invoice Costs” means “hard costs” (i.e. the net invoice cost of Inventory excluding taxes, shipping, delivery, handling, installation, set-up costs or other soft costs) of any Inventory.

“Net Orderly Liquidation Value” means, with respect to Inventory of any Person, the orderly liquidation value thereof, expressed as a percentage of net book value, as determined in a manner acceptable to Administrative Agent by an appraiser acceptable to Administrative Agent, net of all costs of liquidation thereof.

“New Generator Units” means Generator Unites, whether held or deployed by the Borrowers in the ordinary course of business, and which are not included in the most recent appraisal ordered, received and relied upon by Administrative Agent pursuant to Section 6.6(c).

“Non-Consenting Lender” means any Lender that does not approve any consent, waiver or amendment that (a) requires the approval of all or all affected Lenders in accordance with the terms of Section 11.10 and (b) has been approved by the Required Lenders.

“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting Lender at such time.

“Non-Investment Grade Account Debtor” means any account debtor which is not an Investment Grade Account Debtor.

“Notes” means a promissory note made by Borrowers in favor of a Lender evidencing Revolving Credit Loans or Swing Line Loans, as the case may be, made by such Lender, substantially in the form of Exhibit E.

“Obligations” means all obligations, indebtedness, and liabilities of Borrowers and each other Loan Party to Administrative Agent, each Lender and each other Secured Party now existing or hereafter arising, whether direct, indirect, related, unrelated, fixed, contingent, liquidated, unliquidated, joint, several, or joint and several, arising under or pursuant to this Agreement, any Bank Product Agreements or the other Loan Documents, and all interest accruing thereon (whether a claim for post-filing or post-petition interest is allowed in any bankruptcy, insolvency, reorganization or similar proceeding) and all attorneys’ fees and other expenses incurred in the enforcement or collection thereof; provided that, as to any Loan Party, the “Obligations” shall exclude any Excluded Swap Obligations of such Loan Party.

“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).

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“Other Guaranties” has the meaning set forth in Section 12.11.

“Other Guarantors” has the meaning set forth in Section 12.11.

“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 3.6).

“Outstanding Amount” means (a) with respect to the Revolving Credit Loans and the Swing Line Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Revolving Credit Loans and Swing Line Loans, as the case may be, occurring on such date, and (b) with respect to any L/C Obligations on any date, the amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements by Borrowers of Unreimbursed Amounts.

“Parent” means FlexEnergy Power Solutions, LLC, a Delaware limited liability company.

“Parent Loan” means the subordinated Debt of Parent owing to the Subordinated Lenders in an original aggregate principal amount of $18,000,000, which Debt is evidenced and governed by the Parent Loan Documents.

“Parent Loan Documents” means, collectively, (a) the Parent Loan Notes, and (b) any and all guarantees, notes, instruments, documents and agreements executed and delivered by Parent in connection with, or pursuant to, the issuance of the Parent Loan, in each case, as the same may be amended, restated, supplemented or otherwise modified from time to time in accordance with Section 7.16(b).

“Parent Loan Notes” means, collectively, those certain secured promissory notes entered into from time to time, among Parent and the Subordinated Lenders, as the same may be amended, restated, supplemented or otherwise modified from time to time in accordance with Section 7.16(b).

“Parent Pledge Agreement” means that certain Pledge and Limited Guaranty Agreement (including any and all supplements thereto), dated as of the Closing Date, among Parent and Administrative Agent, for the benefit of Administrative Agent and the other Secured Parties, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“Participant” means any Person (other than (a) a natural Person, (b) a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural Person, (c) a Defaulting Lender, or (d) Parent, any of Parent’s Affiliates, any Subsidiaries of Parent or any other Loan Party) to which a participation is sold by any Lender in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it).

CREDIT AGREEMENT – Page 30

“Participant Register” means a register in the United States on which each Lender that sells a participation enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents.

“Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. 107-56, signed into law October 26, 2001).

“Payment Conditions” means, with respect to any Restricted Payment made pursuant to Section 7.4(d) or Section 7.4(e):

(a) no Default or Event of Default shall have occurred and be continuing on the date of such Restricted Payment or would result after giving effect to such Restricted Payment;

(b) solely with respect to any Restricted Payment made pursuant to Section 7.4(d), after giving effect to and at all times during the ninety (90) consecutive day period immediately prior to such Restricted Payment, Availability shall be greater than or equal to $12,500,000;

(c) solely with respect to any Restricted Payment made pursuant to Section 7.4(e), (i) after giving effect to and at all times during the ninety (90) consecutive day period immediately prior to such Restricted Payment, Availability shall be greater than or equal to $6,500,000; and (ii) the Fixed Charge Coverage Ratio for Company and its Subsidiaries for the most recently ended fiscal quarter calculated on a pro forma basis, after giving effect to such Restricted Payment shall be greater than 1.25 to 1.00; and

(d)            Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower Representative demonstrating satisfaction of the foregoing conditions concurrently with any such Restricted Payment.

“Payment Date” means (a) in respect of each Base Rate Loan, the first day of each and every calendar month during the term of this Agreement, upon prepayment of such Loan and the Maturity Date, and (b) in respect of each Eurodollar Rate Loan, the last day of each Interest Period applicable to such Eurodollar Rate Loan (or the day that is three (3) months after the first day of such Interest Period if such Interest Period has a length of more than three (3) months) and the Maturity Date.

“PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding to all or any of its functions under ERISA.

“Perfection Certificate” means, collectively, (a) that certain Perfection Certificate dated as of the Closing Date, executed by the Loan Parties at such time and addressed to Administrative Agent and (b) any other perfection certificate from time to time delivered to Administrative Agent, executed by the Loan Parties, in each case in form and substance reasonably satisfactory to Administrative Agent.

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“Permitted Discretion” means a determination made in good faith and in the exercise of reasonable (from the perspective of a secured asset-based lender) business judgment.

“Permitted Liens” means those Liens permitted by Section 7.2.

“Permitted Holders” means, collectively, RNS Flex, LLC, ESS Participation Fund II, L.P., Energy Special Situations Fund II, L.P., Intervale Capital Fund III, L.P. and Intervale Capital Co-Investment Fund III, L.P.

“Permitted Tax Distributions” means, with respect to any Person, for any taxable period after the Closing Date during which time such Person is a pass-through entity for income tax purposes, any Restricted Payment to any holder of such Person’s stock or other Equity Interests to permit such holders to pay federal income taxes and all relevant state and local income taxes at a rate equal to the highest marginal applicable tax rate for the applicable tax year, however denominated (together with any interest, penalties, additions to tax, or additional amounts with respect thereto) imposed as a result of taxable income attributed to such holder as a partner of such Person under federal, state, and local income tax Laws, determined on a basis that combines those liabilities arising out of the net effect of the income, gains, deductions, losses, and credits of such Person and attributable to it in proportion and to the extent in which such holders hold stock or other Equity Interests of such Person.

“Person” means any natural person, corporation, limited liability company, trust, association, company, partnership, joint venture, Governmental Authority, or other entity, and shall include such Person’s heirs, administrators, personal representatives, executors, successors and assigns.

“Plan” means any employee benefit or other plan, other than a Multiemployer Plan, established or maintained by, or for which there is an obligation to make contributions by or there is any liability, contingent or otherwise with respect to a Borrower or any ERISA Affiliate and which is covered by Title IV of ERISA or subject to Section 412 of the Code.

“Platform” means Debt Domain, Intralinks, Syndtrak or a substantially similar electronic transmission system.

“Prime Rate” means the rate of interest per annum publicly announced from time to time by Texas Capital Bank as its prime rate in effect at its Principal Office; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective. Such rate is set by Texas Capital Bank as a general reference rate of interest, taking into account such factors as Texas Capital Bank may deem appropriate; it being understood that many of Texas Capital Bank’s commercial or other loans are priced in relation to such rate, that it is not necessarily the lowest or best rate actually charged to any customer and that Texas Capital Bank may make various commercial or other loans at rates of interest having no relationship to such rate.

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“Principal Office” means the principal office of Administrative Agent, presently located at the address set forth on Schedule 11.11.

“Prohibited Transaction” means any transaction set forth in Section 406 of ERISA or Section 4975 of the Code.

“Property” of a Person means any and all property, whether real, personal, tangible, intangible or mixed, of such Person, or any other assets owned, operated or leased by such Person.

“Qualified ECP Guarantor” means, at any time, each Loan Party with total assets exceeding $10,000,000 or that qualifies at such time as an “eligible contract participant” under the Commodity Exchange Act or any regulation promulgated thereunder and can cause another Person to qualify as an “eligible contract participant” at such time under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

“Receipt” has the meaning set forth in Section 2.12(a).

“Recipient” means Administrative Agent, L/C Issuer, Swing Line Lender, or any Lender, as applicable.

“Register” means a register for the recordation of the names and addresses of Lenders, and the Commitments of, and principal amounts of and stated interest on the Loans owing to, each Lender pursuant to the terms hereof from time to time.

“Related Indebtedness” means any and all indebtedness paid or payable by any Borrower or any other Loan Party to Administrative Agent or any Lender pursuant to any Loan Document other than any Note.

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

“Release” means, as to any Person, any release, spill, emission, leaking, pumping, injection, deposit, disposal, disbursement, leaching, or migration of Hazardous Materials into the indoor or outdoor environment or into or out of Property owned by such Person, including, without limitation, the movement of Hazardous Materials through or in the air, soil, surface water, ground water, or Property.

“Release Date” means the last to occur of the dates on which Liens securing the Obligations may be released pursuant to Section 10.9(a)(i)(x).

“Remedial Action” means all actions required to (a) clean up, remove, treat, or otherwise address Hazardous Materials in the indoor or outdoor environment, (b) prevent the Release or threat of Release or minimize the further Release of Hazardous Materials so that they do not migrate or endanger or threaten to endanger public health or welfare or the indoor or outdoor environment, or (c) perform pre-remedial studies and investigations and post-remedial monitoring and care.

CREDIT AGREEMENT – Page 33

“Removal Effective Date” has the meaning set forth in Section 10.6(b).

“Rent Reserve” means, with respect to any facility, warehouse distribution center, regional distribution center or depot where any Inventory subject to Liens arising by operation of law is located and with respect to which no Collateral Access Agreement is in effect, a reserve equal to (a) in the case of any leased location, all rent, charges and fees scheduled or customarily falling due for payment during a three (3) month period at such facility, warehouse distribution center, regional distribution center or depot where any Inventory (including any Generator Units) are stored or located, and (b) in the case of any other location, an amount determined by Administrative Agent in its sole discretion in respect of liabilities owed to the applicable consignee, bailee, processor or warehouseman.

“Reportable Event” means any of the events set forth in Section 4043 of ERISA.

“Required Lenders” means, as of any date of determination, Lenders holding more than 66 2/3% of the sum of the (a) the Revolving Credit Exposure of all Lenders (with the aggregate amount of each Lender’s risk participation and funded participation in L/C Obligations and Swing Line Loans being deemed “held” by such Lender for purposes of this definition) and (b) aggregate unused Commitments; provided that, if one Lender holds more than 66 2/3% but less than 100% of the sum of the Revolving Credit Exposure and the unused Commitments at such time, subject to the last sentence of Section 11.10, Required Lenders shall be at least two Lenders. The unused Commitment of, and the portion of the Revolving Credit Exposure of all Lenders held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.

“Resignation Effective Date” has the meaning set forth in Section 10.6(a).

“Responsible Officer” means the chief executive officer, president, chief financial officer, vice president, vice president of finance or treasurer of a Loan Party (or the chief executive officer, president, chief financial officer, vice president, vice president of finance or treasurer of the general partner or managing member of a Loan Party, as applicable); solely for purposes of the delivery of incumbency certificates pursuant to Section 4.1, the secretary or assistant secretary of a Loan Party (or the secretary or any assistant secretary of the general partner or managing member of a Loan Party, as applicable) or any Person designated by a Responsible Officer to act on behalf of a Responsible Officer; provided that such designated Person may not designate any other Person to be a Responsible Officer. Any document delivered hereunder that is signed by a Responsible Officer of an Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Person and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

“Restricted Payment” means, collectively, (a) any dividend or other distribution (whether in cash, securities or other Property) with respect to any capital stock or other Equity Interest of Company or any Subsidiary, and (b) any payment (whether in cash, securities or other Property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any capital stock or other Equity Interest or on account of any return of capital to Company’s stockholders, partners or members (or the equivalent Person thereof).

CREDIT AGREEMENT – Page 34

“Revolving Credit Borrowing” means a borrowing consisting of simultaneous Revolving Credit Loans of the same Type and, in the case of Eurodollar Rate Loans, having the same Interest Period made by each of the Lenders pursuant to Section 2.1(a).

“Revolving Credit Exposure” means, as to any Lender at any time, the aggregate Outstanding Amount of its Revolving Credit Loans and such Lender’s participation in L/C Obligations and Swing Line Loans at such time.

“Revolving Credit Facility” means, at any time, the aggregate amount of the Lenders’ Commitments at such time.

“Revolving Credit Loan” has the meaning set forth in Section 2.1(a).

“RICO” means the Racketeer Influenced and Corrupt Organization Act of 1970.

“Sanctioned Country” means, at any time, a country or territory which is itself the subject or target of any Sanctions.

“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by OFAC, the U.S. Department of State or by the United Nations Security Council, the European Union, any European Union member state or Her Majesty’s Treasury of the United Kingdom, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person controlled by any such Person or Persons, in each case, to the extent dealings are prohibited or restricted with such Person under Sanctions.

“Sanctions” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by the U.S. government (including those administered by OFAC or the U.S. Department of State), the United Nations Security Council, the European Union, any European Union member state or Her Majesty’s Treasury of the United Kingdom, or other relevant sanctions authority.

“Secured Parties” means the collective reference to Administrative Agent, each Lender, L/C Issuer, Swing Line Lender, each Bank Product Provider, and any other Person the Obligations owing to which are, or are purported to be, secured by the Collateral under the terms of the Security Documents.

“Security Agreement” means that certain Pledge and Security Agreement (including any and all supplements thereto), dated as of the Closing Date, among the Loan Parties and Administrative Agent, for the benefit of Administrative Agent and the other Secured Parties, and any other pledge or security agreement entered into, after the date of this Agreement by any other Loan Party (as required by this Agreement or any other Loan Document) or any other Person for the benefit of Administrative Agent and the other Secured Parties, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“Security Documents” means (a) the Security Agreement, (b) the Control Agreements, (c) the Intercreditor Agreement, (d) the Parent Pledge Agreement and (e) every mortgage, security agreement, pledge agreement, mortgage, deed of trust, control agreement or other collateral security agreement required by or delivered to Administrative Agent from time to time that purport to create a Lien in favor of any of the Secured Parties to secure payment or performance of the Obligations or any portion thereof.

CREDIT AGREEMENT – Page 35

“Securities Account Control Agreement” has the meaning assigned to such term in the Security Agreement.

“Specified EBITDA Equity Contribution” means any direct or indirect investment in the Company to cure a breach of Section 8.1 or Section 8.2 pursuant to Section 9.3 (and designated in writing at or about the time made as being a Specified EBITDA Equity Contribution) in cash in the form of a capital contribution (including the purchase of common Equity Interests issued by Company), directly or indirectly, to Company or the purchase of common Equity Interests issued by Parent (or other Equity Interests issued by Parent and reasonably acceptable to Administrative Agent, but not Disqualified Equity Interests) and the proceeds thereof distributed to Company.

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is the number one (1) and the denominator of which is the number one (1) minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board of Governors to which Administrative Agent is subject with respect to the Eurodollar Rate, for eurocurrency funding (currently referred to as “Eurocurrency liabilities” in Regulation D of the Board of Governors). Such reserve percentages shall include those imposed pursuant to such Regulation D. Eurodollar Rate Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

“Subordinated Lenders” means, collectively, at any time, the holders of the Parent Loan Notes.

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

“Sureties” has the meaning set forth in Section 12.3(b).

“Swap Obligations” means, with respect to any Loan Party, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.

“Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to Section 2.3.

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“Swing Line Lender” means Texas Capital Bank in its capacity as provider of Swing Line Loans, or any successor swing line lender hereunder.

“Swing Line Loan” has the meaning set forth in Section 2.3(a).

“Swing Line Loan Request” means a writing, substantially in the form of Exhibit F, or in such other form agreed to by the Borrower Representative and Administrative Agent, properly completed and signed by the Borrower Representative, requesting a Swing Line Borrowing.

“Swing Line Sublimit” means an amount equal to the greater of (a) $5,000,000 and (b) 10% the aggregate Commitments in effect at any time. The Swing Line Sublimit is part of, and not in addition to, the Commitments.

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

“Tax Return” means any return (including any information report), report, statement, schedule, notice, form, or other document or information filed with or submitted to, or required to be filed with or submitted to, any Governmental Authority in connection with the determination, assessment, collection, or payment of any Tax or in connection with the administration, implementation, or enforcement of any Tax.

“Texas Capital Bank” means Texas Capital Bank, National Association, a national banking association, and its successors and assigns.

“Trigger Period” means any period commencing on the first date on which (a) an Event of Default has occurred and is continuing or (b) Availability is less than the greater of (i) $3,500,000 and (ii) 10% of the aggregate Commitments then in effect, and continuing until the date upon which both (A) Availability has been equal to or greater than the greater of (x) $3,500,000 and (y) 10% of the aggregate Commitments then in effect, in each case, at all times during the preceding sixty (60) consecutive day period, and (B) no Event of Default has occurred and is continuing during such sixty (60) consecutive day period.

“Type” means, with respect to a Loan, refers to whether such Loan is a Base Rate Loan or a Eurodollar Rate Loan, and, with respect to a Borrowing, refers to whether such Borrowing is a Base Rate Borrowing or a Eurodollar Rate Borrowing.

“UCC” means Chapters 1 through 11 of the Texas Business and Commerce Code.

“Unfinanced Capital Expenditures” means, for any date of determination, Capital Expenditures of Company and its Subsidiaries made during the trailing twelve (12) fiscal month period then ending on such date which are not financed from the proceeds of any Debt (other than the Revolving Credit Loans); provided that, only twenty percent (20%) of the portion of Capital Expenditures made during such period financed from the proceeds of Revolving Credit Loans which were exclusively used to acquire or construct any New Generator Units after January 31, 2019 shall be deemed to be Unfinanced Capital Expenditures; provided, further that in no event shall the amount of Unfinanced Capital Expenditures for any period be less than zero.

CREDIT AGREEMENT – Page 37

“Unfunded Pension Liability” means the excess, if any, of (a) the funding target as defined under Section 430(d) of the Code without regard to the special at-risk rules of Section 430(i) of the Code, over (b) the value of plan assets as defined under Section 430(g)(3)(A) of the Code determined as of the last day of each plan year, without regard to the averaging which may be allowed under Section 430(g)(3)(B) of the Code and reduced for any prefunding balance or funding standard carryover balance as defined and provided for in Section 430(f) of the Code.

“Unreimbursed Amount” has the meaning set forth in Section 2.2(c)(i).

“U.S.” means the United States of America.

“U.S. Person” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.

“U.S. Tax Compliance Certificate” has the meaning specified in Section 3.4(g)(ii)(B)(3).

“Withholding Agent” means each of the Loan Parties and Administrative Agent.

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

Section 1.2              Accounting Matters.

(a)            Generally. All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the audited financial statements described in Section 5.2, except as otherwise specifically prescribed herein. Notwithstanding the foregoing or anything to the contrary herein, (i) for purposes of determining compliance with any covenant (including the computation of any Financial Covenant) contained herein, Debt of Company and its Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 on financial liabilities shall be disregarded and (ii) any lease that is treated as an operating lease for purposes of GAAP as of December 15, 2018 shall continue to be treated as an operating lease (and any future lease, if it were in effect on December 15, 2018, that would be treated as an operating lease for purposes of GAAP as of December 15, 2018 shall be treated as an operating lease), in each case for purposes of this Agreement, notwithstanding any change in GAAP after December 15, 2018.

(b)            Changes in GAAP. If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth herein, and either the Borrower Representative or the Required Lenders shall so request, Administrative Agent, Lenders and the Borrower Representative shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Borrower Representative shall provide to Administrative Agent and Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.

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Section 1.3           ERISA Matters. If, after the date hereof, there shall occur, with respect to ERISA, the adoption of any applicable Law, rule, or regulation, or any change therein, or any change in the interpretation or administration thereof by the PBGC or any other Governmental Authority, then either the Borrower Representative or Required Lenders may request a modification to this Agreement solely to preserve the original intent of this Agreement with respect to the provisions hereof applicable to ERISA, and the parties to this Agreement shall negotiate in good faith to complete such modification.

Section 1.4           Letter of Credit Amounts. Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the stated amount of such Letter of Credit in effect at such time; provided, however, that with respect to any Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.

Section 1.5           Other Definitional Provisions. All definitions contained in this Agreement are equally applicable to the singular and plural forms of the terms defined. The words “hereof”, “herein”, and “hereunder” and words of similar import referring to this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement. Unless otherwise specified, all references in a Loan Document to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, the Loan Document in which such references appear. Terms used herein that are defined in the UCC, unless otherwise defined herein, shall have the meanings specified in the UCC. Any definition of or reference to any agreement, instrument or other document shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document). Any reference to any Law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such Law and any reference to any Law or regulation shall, unless otherwise specified, refer to such Law or regulation as amended, modified or supplemented from time to time. Words denoting gender shall be construed to include the masculine, feminine and neuter, when such construction is appropriate; specific enumeration shall not exclude the general but shall be constructed as cumulative; the word “or” is not exclusive; the word “including” (in its various forms) means “including, without limitation”; in the computation of periods of time, the word “from” means “from and including” and the words “to” and “until” mean “to but excluding”; and all references to money refer to the legal currency of the U.S.

CREDIT AGREEMENT – Page 39

Section 1.6           Interpretative Provision. For purposes of Section 9.1, a breach of a Financial Covenant shall be deemed to have occurred as of any date of determination thereof by Borrowers or the Required Lenders or as of the last date of any specified measurement period, regardless of when the financial statements or the Compliance Certificate reflecting such breach are delivered to Administrative Agent.

Section 1.7           Times of Day. Unless otherwise specified, all references herein to times of day shall be references to central time (daylight or standard, as applicable).

Section 1.8           Other Loan Documents. The other Loan Documents, including the Security Documents, contain representations, warranties, covenants, defaults and other provisions that are in addition to and not limited by, or a limitation of, similar provisions of this Agreement. Such provisions in such other Loan Documents may be different or more expansive than similar provisions of this Agreement and neither such differences nor such more expansive provisions shall be construed as a conflict.

Section 1.9           Divisions. For all purposes under the Loan Documents, in connection with any division or plan of division under Delaware law (or any comparable event under a different jurisdiction’s laws): (a) if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original Person to the subsequent Person, and (b) if any new Person comes into existence, such new Person shall be deemed to have been organized on the first date of its existence by the holders of its Equity Interests at such time.

ARTICLE 2.

THE COMMITMENTS AND CREDIT EXTENSIONS

Section 2.1             The Loans.

(a)            Revolving Credit Borrowings. Subject to the terms and conditions of this Agreement, each Lender severally agrees to make one or more revolving credit loans (each such loan, a “Revolving Credit Loan”) to Borrowers from time to time from the Closing Date until the Maturity Date in an aggregate principal amount for such Lender at any time outstanding up to but not exceeding the amount of such Lender’s Commitment, provided that the Revolving Credit Exposure of all Lenders shall not exceed the lesser of (i) the aggregate amount of the Commitments of the Lenders and (ii) the Borrowing Base. Subject to the foregoing limitations, and the other terms and provisions of this Agreement, Borrowers may borrow, repay, and reborrow Revolving Credit Loans hereunder.

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(b)           Borrowing Procedure. Each Revolving Credit Borrowing, each conversion of a Borrowing from one Type to the other, and each continuation of a Eurodollar Rate Borrowing shall be made upon the Borrower Representative’s irrevocable notice to Administrative Agent, which may be given by telephone. Each such notice must be received by Administrative Agent not later than 11:00 a.m. (i) three (3) Business Days prior to the requested date of any Borrowing of, conversion to or continuation of a Eurodollar Rate Borrowing or of any conversion of a Eurodollar Rate Borrowing to a Base Rate Borrowing, and (ii) on the requested date of any Base Rate Borrowing. Each telephonic notice by the Borrower Representative pursuant to this Section 2.1(b) must be confirmed promptly by delivery to Administrative Agent of a written Borrowing Request, appropriately completed and signed by a Responsible Officer of the Borrower Representative. Each Borrowing of, conversion to or continuation of a Eurodollar Rate Borrowing shall be in a principal amount of $250,000 or a whole multiple of $50,000 in excess thereof. Except as provided in Sections 2.2(c) and 2.3(c), each Borrowing of or conversion to a Base Rate Borrowing shall be in a principal amount of $250,000 or a whole multiple of $50,000 in excess thereof; provided that a Base Rate Borrowing may be in an amount equal to Availability. Each Borrowing Request (whether telephonic or written) shall specify (A) whether the Borrower Representative is requesting a Revolving Credit Borrowing, a conversion of Borrowings from one Type to the other, or a continuation of Borrowings, (B) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (C) the principal amount of Borrowings to be borrowed, converted or continued, (D) the Type of Borrowings to be borrowed or to which existing Borrowings are to be converted, and (E) if applicable, the duration of the Interest Period with respect thereto. If the Borrower Representative fails to specify a Type of Borrowing in a Borrowing Request or if the Borrower Representative fails to give a timely notice requesting a conversion or continuation, then the applicable Borrowing shall be made as, or converted to, a Base Rate Borrowing. Any such automatic conversion to Base Rate Borrowings shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurodollar Rate Borrowing. If the Borrower Representative requests a Borrowing of, conversion to, or continuation of a Eurodollar Rate Borrowing in any such Borrowing Request, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one (1) month.

(c)            Funding. Following receipt of a Borrowing Request, Administrative Agent shall promptly notify each Lender of the amount of its Applicable Percentage of the applicable Borrowing, and if no timely notice of a conversion or continuation is provided by the Borrower Representative, Administrative Agent shall notify each Lender of the details of any automatic conversion to Base Rate Borrowing as described in Section 2.1(b). In the case of a Revolving Credit Borrowing, each Lender shall make the amount of its Loan available to Administrative Agent in immediately available funds at Administrative Agent’s Principal Office not later than 1:00 p.m. on the Business Day specified in the applicable Borrowing Request. Upon satisfaction of the applicable conditions set forth in Section 4.2 (and, if such Borrowing is the initial Credit Extension, Section 4.1), Administrative Agent shall make all funds so received available to the applicable Borrower in like funds as received by Administrative Agent either by (i) crediting the account of the applicable Borrower on the books of Texas Capital Bank with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) Administrative Agent by the Borrower Representative; provided, however, that if, on the date the Borrowing Request with respect to such Borrowing is given by the Borrower Representative, there are L/C Borrowings outstanding, then the proceeds of such Borrowing, first, shall be applied to the payment in full of any such L/C Borrowings, and second, shall be made available to the applicable Borrower as provided above.

(d)            Continuations and Conversions. Except as otherwise provided herein, a Eurodollar Rate Borrowing may be continued or converted only on the last day of an Interest Period for such Eurodollar Rate Borrowing. During the existence of a Default, (i) no Loans may be requested as, converted to or continued as Eurodollar Rate Borrowings without the consent of the Required Lenders and (ii) unless repaid, each Eurodollar Rate Borrowing shall be converted to a Base Rate Borrowing at the end of the Interest Period applicable thereto.

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(e)            Notifications. Administrative Agent shall promptly notify the Borrower Representative and Lenders of the interest rate applicable to any Interest Period for Eurodollar Rate Borrowings upon determination of such interest rate. At any time that Base Rate Borrowings are outstanding, Administrative Agent shall notify the Borrower Representative and Lenders of any change in Texas Capital Bank’s prime rate used in determining the Base Rate promptly following the public announcement of such change.

(f)             Interest Periods. After giving effect to all Borrowings, all conversions of Borrowings from one Type to the other, and all continuations of Borrowings as the same Type, there shall not be more than five (5) Interest Periods in effect with respect to Eurodollar Rate Borrowings.

Section 2.2              Letters of Credit.

(a)            The Letter of Credit Commitment.

(i)            Subject to the terms and conditions set forth herein, (A) L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.2, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of any Borrower, and to amend or extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Letters of Credit; and (B) Lenders severally agree to participate in Letters of Credit issued for the account of any Borrower and any drawings thereunder; provided that immediately after giving effect to any L/C Credit Extension with respect to any Letter of Credit, (x) the Revolving Credit Exposure of all Lenders shall not exceed the lesser of the aggregate amount of the Commitments of the Lenders and the Borrowing Base, in each case in effect at such time, (y) the Revolving Credit Exposure of any Lender shall not exceed such Lender’s Commitment, and (z) the Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit Sublimit. Each request by the Borrower Representative for the issuance or amendment of a Letter of Credit shall be deemed to be a representation by Borrowers that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, each Borrower’s ability to obtain Letters of Credit shall be fully revolving, and accordingly Borrowers may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.

(ii) L/C Issuer shall not issue any Letter of Credit, if:

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(A)            subject to Section 2.2(b)(iii), the expiry date of the requested Letter of Credit would occur more than twelve (12) months after the date of issuance or last extension, unless Required Lenders have approved such expiry date; or

(B)             the expiry date of the requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all Lenders have approved such expiry date.

(iii)          L/C Issuer shall not be under any obligation to issue any Letter of Credit if:

(A)            any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain L/C Issuer from issuing the Letter of Credit, or any Law applicable to L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over L/C Issuer shall prohibit, or request that L/C Issuer refrain from, the issuance of letters of credit generally or the Letter of Credit in particular or shall impose upon L/C Issuer with respect to the Letter of Credit any restriction, reserve or capital requirement (for which L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which L/C Issuer in good faith deems material to it;

(B)             the issuance of the Letter of Credit would violate one or more policies of L/C Issuer applicable to letters of credit generally;

(C)             except as otherwise agreed by Administrative Agent and L/C Issuer, the Letter of Credit is in an initial stated amount less than $50,000;

(D)             the Letter of Credit is to be denominated in a currency other than Dollars;

(E)              any Lender is at that time a Defaulting Lender, unless L/C Issuer has entered into arrangements, including the delivery of Cash Collateral, satisfactory to L/C Issuer (in its sole discretion) with Borrowers or such Lender to eliminate L/C Issuer’s actual or potential Fronting Exposure (after giving effect to Section 11.22(a)(iv)) with respect to the Defaulting Lender arising from either the Letter of Credit then proposed to be issued or that Letter of Credit and all other L/C Obligations as to which L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion; or

(F)              the Letter of Credit contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder.

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(iv)          L/C Issuer shall not amend any Letter of Credit if L/C Issuer would not be permitted at such time to issue the Letter of Credit in its amended form under the terms hereof.

(v)           L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) L/C Issuer would have no obligation at such time to issue the Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of the Letter of Credit does not accept the proposed amendment to the Letter of Credit.

(vi)          L/C Issuer shall act on behalf of Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and L/C Issuer shall have all of the benefits and immunities (A) provided to Administrative Agent in Article 10 with respect to any acts taken or omissions suffered by L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used in Article 10 included L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to L/C Issuer.

(b)            Procedures for Issuance and Amendment of Letters of Credit.

(i)            Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the Borrower Representative delivered to L/C Issuer (with a copy to Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Officer of the Borrower Representative. Such Letter of Credit Application may be sent by facsimile, by United States mail, by overnight courier, by electronic transmission using the system provided by L/C Issuer, by personal delivery or by any other means acceptable to L/C Issuer. Such Letter of Credit Application must be received by L/C Issuer and Administrative Agent not later than 11:00 a.m. at least two (2) Business Days (or such later date and time as Administrative Agent and L/C Issuer may agree in a particular instance in their sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to L/C Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; (G) the purpose and nature of the requested Letter of Credit; and (H) such other matters as L/C Issuer may require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to L/C Issuer (1) the Letter of Credit to be amended; (2) the proposed date of amendment thereof (which shall be a Business Day); (3) the nature of the proposed amendment; and (4) such other matters as L/C Issuer may require. Additionally, the Borrower Representative shall furnish to L/C Issuer and Administrative Agent such other documents and information pertaining to such requested Letter of Credit issuance or amendment, including any Issuer Documents, as L/C Issuer or Administrative Agent may require.

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(ii)           Promptly after receipt of any Letter of Credit Application, L/C Issuer will confirm with Administrative Agent (by telephone or in writing) that Administrative Agent has received a copy of such Letter of Credit Application from the Borrower Representative and, if not, L/C Issuer will provide Administrative Agent with a copy thereof. Unless L/C Issuer has received written notice from Administrative Agent or any Loan Party, at least one (1) Business Day prior to the requested date of issuance or amendment of the applicable Letter of Credit, that one or more applicable conditions contained in Article 4 shall not then be satisfied, then, subject to the terms and conditions hereof, L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of the applicable Borrower or enter into the applicable amendment, as the case may be, in each case in accordance with L/C Issuer’s usual and customary business practices. Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from L/C Issuer a risk participation in such Letter of Credit in an amount equal to the product of such Lender’s Applicable Percentage times the amount of such Letter of Credit.

(iii)          Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, L/C Issuer will also deliver to the Borrower Representative and Administrative Agent a true and complete copy of such Letter of Credit or amendment.

(c)            Drawings and Reimbursements; Funding of Participations.

(i)            Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, L/C Issuer shall notify the Borrower Representative and Administrative Agent thereof. Not later than 11:00 a.m. on the date of any payment by L/C Issuer under a Letter of Credit (each such date, an “Honor Date”), Borrowers shall reimburse L/C Issuer through Administrative Agent in an amount equal to the amount of such drawing. If Borrowers fail to so reimburse L/C Issuer by such time, Administrative Agent shall promptly notify each Lender of the Honor Date, the amount of the unreimbursed drawing (the “Unreimbursed Amount”), and the amount of such Lender’s Applicable Percentage thereof. In such event, Borrowers shall be deemed to have requested a Revolving Credit Borrowing to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, subject to the amount of Availability and the conditions set forth in Section 4.2 (other than the delivery of a Borrowing Request). Any notice given by L/C Issuer or Administrative Agent pursuant to this Section 2.2(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.

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(ii)           Each Lender shall upon any notice pursuant to Section 2.2(c)(i) make funds available (and Administrative Agent may apply Cash Collateral provided for this purpose) for the account of L/C Issuer at Administrative Agent’s Principal Office in an amount equal to its Applicable Percentage of the Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified in such notice by Administrative Agent, whereupon, subject to the provisions of Section 2.2(c)(iii), each Lender that so makes funds available shall be deemed to have made a Revolving Credit Loan (or, if the conditions set forth in Section 4.2 are not satisfied, an L/C Borrowing as further described in clause (iii) below) to Borrowers in such amount. Administrative Agent shall remit the funds so received to L/C Issuer.

(iii)          With respect to any Unreimbursed Amount that is not fully refinanced by a Revolving Credit Borrowing because the conditions set forth in Section 4.2 cannot be satisfied or for any other reason, Borrowers shall be deemed to have incurred from L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Interest Rate. In such event, each Lender’s payment to Administrative Agent for the account of L/C Issuer pursuant to Section 2.2(c)(ii) shall be deemed payment in respect of its participation in such L/C Borrowing and shall constitute an L/C Advance from such Lender in satisfaction of its participation obligation under this Section 2.2.

(iv)          Until each Lender funds its Revolving Credit Loan or L/C Advance pursuant to this Section 2.2(c) to reimburse L/C Issuer for any amount drawn under any Letter of Credit, interest in respect of such Lender’s Applicable Percentage of such amount shall be solely for the account of L/C Issuer.

(v)           Each Lender’s obligation to make Revolving Credit Loans or L/C Advances to reimburse L/C Issuer for amounts drawn under Letters of Credit, as contemplated by this Section 2.2(c), shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against L/C Issuer, Borrowers or any other Person for any reason whatsoever, (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Lender’s obligation to make Revolving Credit Loans (but not its obligation to fund it pro rata share of L/C Advances) pursuant to this Section 2.2(c) is subject to the conditions set forth in Section 4.2 (other than delivery by the Borrower Representative of a Borrowing Request). No such making of an L/C Advance shall relieve or otherwise impair the obligation of Borrowers to reimburse L/C Issuer for the amount of any payment made by L/C Issuer under any Letter of Credit, together with interest as provided herein.

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(vi)         If any Lender fails to make available to Administrative Agent for the account of L/C Issuer any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.2(c) by the time specified in Section 2.2(c)(ii), then, without limiting the other provisions of this Agreement, L/C Issuer shall be entitled to recover from such Lender (acting through Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to L/C Issuer at a rate per annum equal to the greater of the Federal Funds Rate and a rate determined by L/C Issuer in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by L/C Issuer in connection with the foregoing. If such Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Lender’s Revolving Credit Loan included in the relevant Revolving Credit Borrowing or L/C Advance in respect of the relevant L/C Borrowing, as the case may be. A certificate of L/C Issuer submitted to any Lender (through Administrative Agent) with respect to any amounts owing under this clause (vi) shall be conclusive absent manifest error.

(d)           Repayment of Participations.

(i)            At any time after L/C Issuer has made a payment under any Letter of Credit and has received from any Lender such Lender’s L/C Advance in respect of such payment in accordance with Section 2.2(c), if Administrative Agent receives for the account of L/C Issuer any payment in respect of the related Unreimbursed Amount or interest thereon (whether directly from Borrowers or otherwise, including proceeds of Cash Collateral applied thereto by Administrative Agent), Administrative Agent will distribute to such Lender its Applicable Percentage thereof in the same funds as those received by Administrative Agent.

(ii)          If any payment received by Administrative Agent for the account of L/C Issuer pursuant to Section 2.2(c)(i) is required to be returned under any of the circumstances described in Section 11.24 (including pursuant to any settlement entered into by L/C Issuer in its discretion), each Lender shall pay to Administrative Agent for the account of L/C Issuer its Applicable Percentage thereof on demand of Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Lender, at a rate per annum equal to the Federal Funds Rate from time to time in effect. The obligations of Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.

(e)            Obligations Absolute. The obligation of Borrowers to reimburse L/C Issuer for each drawing under each Letter of Credit and to repay each L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:

(i)           any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other Loan Document;

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(ii)          the existence of any claim, counterclaim, setoff, defense or other right that any Borrower or any Subsidiary may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), L/C Issuer or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;

(iii)         any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit;

(iv)         waiver by L/C Issuer of any requirement that exists for L/C Issuer’s protection and not the protection of a Borrower or any waiver by L/C Issuer which does not in fact materially prejudice such Borrower;

(v)          honor of a demand for payment presented electronically even if such Letter of Credit requires that demand be in the form of a draft;

(vi)         any payment made by L/C Issuer in respect of an otherwise complying item presented after the date specified as the expiration date of, or the date by which documents must be received under such Letter of Credit if presentation after such date is authorized by the UCC or the ISP, as applicable;

(vii)        any payment by L/C Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by L/C Issuer under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law; or

(viii)      any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Borrower or any Subsidiary.

The applicable Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with such Borrower’s instructions or other irregularity, such Borrower will immediately notify L/C Issuer. Each Borrower shall be conclusively deemed to have waived any such claim against L/C Issuer and its correspondents unless such notice is given as aforesaid.

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(f)            Role of L/C Issuer. Each Lender and each Borrower agree that, in paying any drawing under a Letter of Credit, L/C Issuer shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document. None of L/C Issuer, Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of L/C Issuer shall be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of Required Lenders; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Issuer Document. Each Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided, however, that this assumption is not intended to, and shall not, preclude such Borrower’s pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. None of L/C Issuer, Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of L/C Issuer shall be liable or responsible for any of the matters described in clauses (i) through (viii) of Section 2.2(e); provided, however, that anything in such clauses to the contrary notwithstanding, each Borrower may have a claim against L/C Issuer, and L/C Issuer may be liable to such Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by such Borrower which such Borrower proves were directly caused by L/C Issuer’s willful misconduct or gross negligence or L/C Issuer’s willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In furtherance and not in limitation of the foregoing, L/C Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and L/C Issuer shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason. L/C Issuer may send a Letter of Credit or conduct any communication to or from the beneficiary via the Society for Worldwide Interbank Financial Telecommunication message or overnight courier, or any other commercially reasonable means of communicating with a beneficiary.

(g)           Applicability of ISP; Limitation of Liability. Unless otherwise expressly agreed by L/C Issuer and the applicable Borrower when a Letter of Credit is issued, the rules of the ISP shall apply to each standby Letter of Credit. Notwithstanding the foregoing, L/C Issuer shall not be responsible to any Borrower for, and L/C Issuer’s rights and remedies against such Borrower shall not be impaired by, any action or inaction of L/C Issuer required or permitted under any Law, order, or practice that is required or permitted to be applied to any Letter of Credit or this Agreement, including the Law or any order of a jurisdiction where L/C Issuer or the beneficiary is located, the practice stated in the ISP, or in the decisions, opinions, practice statements, or official commentary of the ICC Banking Commission, the Bankers Association for Finance and Trade - International Financial Services Association (BAFT-IFSA), or the Institute of International Banking Law & Practice, whether or not any Letter of Credit or other Issuer Document chooses such Law or practice.

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(h)           Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer. Borrowers shall pay directly to L/C Issuer for its own account a fronting fee at the rate per annum separately agreed between applicable Borrower and L/C Issuer, computed on the daily amount available to be drawn under such Letter of Credit and payable on a quarterly basis in arrears. Such fronting fee shall be due and payable on the first day after the end of each March, June, September and December in respect of the most recently-ended quarterly period (or portion thereof, in the case of the first payment), commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand. For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.4. In addition, Borrowers shall pay directly to L/C Issuer for its own account the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of L/C Issuer relating to letters of credit as from time to time in effect. Such customary fees and standard costs and charges are due and payable on demand and are nonrefundable.

(i)             Conflict with Issuer Documents. In the event of any conflict between the terms hereof and the terms of any Issuer Document, the terms hereof shall control.

Section 2.3             Swing Line Loans.

(a)            The Swing Line. Subject to the terms and conditions set forth herein, Swing Line Lender, in reliance upon the agreements of the other Lenders set forth in this Section 2.3, may in its sole discretion make loans (each such loan, a “Swing Line Loan”) to any Borrower from time to time on any Business Day during the period from the Closing Date to the Maturity Date in an aggregate amount not to exceed at any time outstanding the amount of the Swing Line Sublimit, notwithstanding the fact that such Swing Line Loans, when aggregated with the Applicable Percentage of the Outstanding Amount of Revolving Credit Loans and L/C Obligations of the Lender acting as Swing Line Lender, may exceed the amount of such Lender’s Commitment; provided, however, that (i) immediately after giving effect to any Swing Line Loan, (A) the Revolving Credit Exposure of all Lenders shall not exceed the lesser of the aggregate amount of the Commitments of the Lenders and the Borrowing Base, in each case in effect at such time, and (B) except as provided above with respect to the Swing Line Lender, the Revolving Credit Exposure of any Lender shall not exceed such Lender’s Commitment, (ii) no Borrower shall use the proceeds of any Swing Line Loan to refinance any outstanding Swing Line Loan, and (iii) Swing Line Lender shall not be under any obligation to make any Swing Line Loan if it shall determine (which determination shall be in its sole discretion) that it has, or by such Credit Extension may have, Fronting Exposure. Within the foregoing limits, and subject to the other terms and conditions hereof, each Borrower may borrow under this Section 2.3, prepay under Section 2.9(b), and reborrow under this Section 2.3. Each Swing Line Loan shall bear interest as a Base Rate Loan. Immediately upon the making of a Swing Line Loan, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from Swing Line Lender a risk participation in such Swing Line Loan in an amount equal to the product of such Lender’s Applicable Percentage times the amount of such Swing Line Loan.

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(b)           Borrowing Procedures. Each Swing Line Borrowing shall be made upon the Borrower Representative’s irrevocable notice to Swing Line Lender and Administrative Agent, which may be given by telephone. Each such notice must be received by Swing Line Lender and Administrative Agent not later than 1:00 p.m. on the requested borrowing date, and shall specify (i) the amount to be borrowed, which shall be a minimum of $100,000, and (ii) the requested borrowing date, which shall be a Business Day. Each such telephonic notice must be confirmed promptly by delivery to Swing Line Lender and Administrative Agent of a written Swing Line Loan Request, appropriately completed and signed by a Responsible Officer of the Borrower Representative. Any telephonic request for a Swing Line Loan by the Borrower Representative shall be promptly confirmed by submission of a properly completed Swing Line Loan Request, signed by a Responsible Officer of the Borrower Representative, to Swing Line Lender and Administrative Agent, but failure to deliver a Swing Line Loan Request shall not be a defense to payment of any Swing Line Borrowing. Neither Swing Line Lender nor Administrative Agent shall have any liability to any Borrower for any loss or damage suffered by such Borrower as a result of Swing Line Lender’s or Administrative Agent’s honoring of any requests, execution of any instructions, authorizations or agreements or reliance on any reports communicated to it telephonically, by facsimile or electronically and purporting to have been sent to Swing Line Lender or Administrative Agent by such Borrower and neither Swing Line Lender nor Administrative Agent shall have any duty to verify the origin of any such communication or the identity or authority of the Person sending it. Promptly after receipt by Swing Line Lender of any telephonic Swing Line Loan Request, Swing Line Lender will confirm with Administrative Agent (by telephone or in writing) that Administrative Agent has also received such Swing Line Loan Request and, if not, Swing Line Lender will notify Administrative Agent (by telephone or in writing) of the contents thereof. Unless Swing Line Lender has received notice (by telephone or in writing) from Administrative Agent prior to 2:00 p.m. on the date of the proposed Swing Line Borrowing (A) directing Swing Line Lender not to make such Swing Line Loan as a result of the limitations set forth in the first proviso to the first sentence of Section 2.3(a), or (B) that one or more of the applicable conditions specified in Article 4 is not then satisfied, then, subject to the terms and conditions hereof, Swing Line Lender may, not later than 3:00 p.m. on the borrowing date specified in such Swing Line Loan Request, make the amount of its Swing Line Loan available to the applicable Borrower at its office by crediting the account of such Borrower on the books of Swing Line Lender in immediately available funds.

(c)            Refinancing of Swing Line Loans.

(i)           Swing Line Lender at any time in its sole discretion may request, on behalf of Borrowers (which hereby irrevocably authorize Swing Line Lender to so request on its behalf), that each Lender make a Revolving Credit Loan in an amount equal to such Lender’s Applicable Percentage of the amount of Swing Line Loans then outstanding. Such request shall be made in writing (which written request shall be deemed to be a Borrowing Request for purposes hereof) and in accordance with the requirements of Section 2.1, subject to Availability and the conditions set forth in Section 4.2. Swing Line Lender shall furnish the Borrower Representative with a copy of the applicable Borrowing Request promptly after delivering such notice to Administrative Agent. Each Lender shall make an amount equal to its Applicable Percentage of the amount specified in such Borrowing Request available to Administrative Agent in immediately available funds (and Administrative Agent may apply Cash Collateral available with respect to the applicable Swing Line Loan) for the account of Swing Line Lender at Administrative Agent’s Principal Office not later than 1:00 p.m. on the day specified in such Borrowing Request, whereupon, subject to Section 2.3(c)(ii), each Lender that so makes funds available shall be deemed to have made a Revolving Credit Loan to Borrowers in such amount. Administrative Agent shall remit the funds so received to Swing Line Lender.

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(ii)          If for any reason any Swing Line Loan cannot be refinanced by such a Revolving Credit Borrowing in accordance with Section 2.3(c)(i), the request for Revolving Credit Loans submitted by Swing Line Lender as set forth herein shall be deemed to be a request by Swing Line Lender that each Lender fund its risk participation in the relevant Swing Line Loan and each Lender’s payment to Administrative Agent for the account of Swing Line Lender pursuant to Section 2.3(c)(i) shall be deemed payment in respect of such participation.

(iii)         If any Lender fails to make available to Administrative Agent for the account of Swing Line Lender any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.3(c) by the time specified in Section 2.3(c)(i), Swing Line Lender shall be entitled to recover from such Lender (acting through Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to Swing Line Lender at a rate per annum equal to the greater of the Federal Funds Rate and a rate determined by Swing Line Lender in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by Swing Line Lender in connection with the foregoing. If such Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Lender’s Revolving Credit Loan included in the relevant Revolving Credit Borrowing or funded participation in the relevant Swing Line Loan, as the case may be. A certificate of Swing Line Lender submitted to any Lender (through Administrative Agent) with respect to any amounts owing under this clause (iii) shall be conclusive absent manifest error.

(iv)         Each Lender’s obligation to make Revolving Credit Loans or to purchase and fund risk participations in Swing Line Loans pursuant to this Section 2.3(c) shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against Swing Line Lender, Borrowers or any other Person for any reason whatsoever, (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Lender’s obligation to make Revolving Credit Loans pursuant to this Section 2.3(c) is subject to Availability and the conditions set forth in Section 4.2. No such funding of risk participations shall relieve or otherwise impair the obligation of Borrowers to repay Swing Line Loans, together with interest as provided herein.

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(d)           Repayment of Participations.

(i)           At any time after any Lender has purchased and funded a risk participation in a Swing Line Loan, if Swing Line Lender receives any payment on account of such Swing Line Loan, Swing Line Lender will distribute to such Lender its Applicable Percentage thereof in the same funds as those received by Swing Line Lender.

(ii)          If any payment received by Swing Line Lender in respect of principal or interest on any Swing Line Loan is required to be returned by Swing Line Lender under any of the circumstances described in Section 11.24 (including pursuant to any settlement entered into by Swing Line Lender in its discretion), each Lender shall pay to Swing Line Lender its Applicable Percentage thereof on demand of Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned, at a rate per annum equal to the Federal Funds Rate. Administrative Agent will make such demand upon the request of Swing Line Lender. The obligations of Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.

(e)            Interest for Account of Swing Line Lender. Swing Line Lender shall be responsible for invoicing Borrowers for interest on the Swing Line Loans. Until each Lender funds its Revolving Credit Loan or risk participation pursuant to this Section 2.3 to refinance such Lender’s Applicable Percentage of any Swing Line Loan, interest in respect of such Applicable Percentage shall be solely for the account of Swing Line Lender.

(f)            Payments to Swing Line Lender or Lenders. Borrowers shall make all payments of principal and interest in respect of the Swing Line Loans to Administrative Agent for the account of Swing Line Lender or Lenders, as applicable.

Section 2.4             Fees.

(a)            Fees. Borrowers agree to pay to Administrative Agent and Arranger, for the account of Administrative Agent, Arranger and each Lender, as applicable, fees, in the amounts and on the dates set forth in any Fee Letter.

(b)           Letter of Credit Fees. Borrowers shall pay to Administrative Agent for the account of each Lender in accordance, subject to Section 11.22, with its Applicable Percentage a Letter of Credit fee (the “Letter of Credit Fee”) equal to the Applicable Margin for Eurodollar Rate Loans times the daily amount available to be drawn under such Letter of Credit. For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.4. Letter of Credit Fees shall be (i) due and payable in arrears on the first day after the end of each March, June, September and December, commencing with the first such date to occur after the issuance or renewal of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand and (ii) computed on a quarterly basis in arrears. If there is any change in the Applicable Margin for Eurodollar Rate Loans during any quarter, the daily amount available to be drawn under each standby Letter of Credit shall be computed and multiplied by the Applicable Margin for Eurodollar Rate Loan separately for each period during such quarter that such Applicable Margin for Eurodollar Rate Loans was in effect. Notwithstanding anything to the contrary contained herein while any Event of Default exists, all Letter of Credit Fees shall accrue at the Default Interest Rate.

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(c)            Commitment Fees. Borrowers agree to pay to Administrative Agent for the account of each Lender in accordance, subject to Section 11.22, with its Applicable Percentage a commitment fee on the daily average unused amount of the Commitment of such Lender for the period from and including the date of this Agreement to and including the Maturity Date (including at any time during which one or more of the conditions in Article 4 is not met), at a rate equal to the applicable Commitment Fee Rate. For the purpose of calculating the commitment fee hereunder, the Commitment of each Lender shall be deemed utilized by the amount of all outstanding Revolving Credit Loans and L/C Obligations, but excluding the amount of any outstanding Swing Line Loans, owing to such Lender whether directly or by participation. Accrued commitment fees shall be payable monthly in arrears on the first day of each and every calendar month during the terms of this Agreement and on the Maturity Date.

Section 2.5             Payments Generally; Administrative Agent’s Clawback.

(a)            General. All payments of principal, interest, and other amounts to be made by any Borrower under this Agreement and the other Loan Documents shall be made to Administrative Agent for the account of Administrative Agent, L/C Issuer, or Swing Line Lender or the pro rata accounts of the applicable Lenders, as applicable, at the Principal Office in Dollars and immediately available funds, without setoff, deduction, or counterclaim, and free and clear of all taxes at the time and in the manner provided herein. Payments by check or draft shall not constitute payment in immediately available funds until the required amount is actually received by Administrative Agent in full. Payments in immediately available funds received by Administrative Agent in the place designated for payment on a Business Day prior to 11:00 a.m. at such place of payment shall be credited prior to the close of business on the Business Day received, while payments received by Administrative Agent on a day other than a Business Day or after 11:00 a.m. on a Business Day shall not be credited until the next succeeding Business Day. If any payment of principal or interest on the Notes shall become due and payable on a day other than a Business Day, then such payment shall be made on the next succeeding Business Day. Any such extension of time for payment shall be included in computing interest which has accrued and shall be payable in connection with such payment. Administrative Agent is hereby authorized upon notice to the Borrower Representative to charge the account of Borrowers maintained with Administrative Agent for each payment of principal, interest and fees as it becomes due hereunder.

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(b)           Funding by Lenders; Presumption by Administrative Agent. Unless Administrative Agent shall have received notice from a Lender that such Lender will not make available to Administrative Agent such Lender’s share of a Borrowing, Administrative Agent may assume that such Lender has made such share available on such date in accordance with this Agreement and may, in reliance upon such assumption, make available to Borrowers a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to Administrative Agent, then the applicable Lender and Borrowers severally agree to pay to Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to Borrowers to but excluding the date of payment to Administrative Agent, at (i) in the case of a payment to be made by such Lender, the greater of the Federal Funds Rate and a rate determined by Administrative Agent in accordance with banking industry rules on interbank compensation, and (ii) in the case of a payment to be made by Borrowers, the interest rate applicable to the applicable Borrowing. If Borrowers and such Lender shall pay such interest to Administrative Agent for the same or an overlapping period, Administrative Agent shall promptly remit to Borrowers the amount of such interest paid by Borrowers for such period. If such Lender pays its share of the applicable Borrowing to Administrative Agent, then the amount so paid shall constitute such Lender’s Loan. Any payment by Borrowers shall be without prejudice to any claim Borrowers may have against a Lender that shall have failed to make such payment to Administrative Agent.

(c)           Payments by Borrowers; Presumption by Administrative Agent. Unless Administrative Agent shall have received notice from the Borrower Representative prior to the date on which any payment is due to Administrative Agent for the account of L/C Issuer, Swing Line Lender or the applicable Lenders hereunder that Borrowers will not make such payment, Administrative Agent may assume that Borrowers have made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to L/C Issuer, Swing Line Lender or the applicable Lenders the amount due. In such event, if Borrowers have not in fact made such payment, then each of L/C Issuer, Swing Line Lender and the applicable Lenders, as applicable, severally agrees to repay to Administrative Agent forthwith on demand the amount so distributed to L/C Issuer, Swing Line Lender, or such Lender, with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by Administrative Agent in accordance with banking industry rules on interbank compensation.

(d)           Cash Dominion. During any Trigger Period, all funds credited to the Blocked Accounts shall be promptly applied by Administrative Agent to the Obligations whether or not such Obligations shall have, by its terms, matured, such application to be made to principal or interest or expenses as Administrative Agent may elect; provided, however, Administrative Agent need not apply or give credit for any item included in such sums until one Business Day after the final collection thereof; provided, further, however, that Administrative Agent’s failure to so apply any such sums shall not be a waiver of Administrative Agent’s right to so apply such sums or any other sums at any time during a Trigger Period. Notwithstanding anything herein to the contrary, to the extent any funds credited to the Blocked Accounts constitute Net Cash Proceeds (i) from any Disposition not otherwise permitted by Section 7.8 or (ii) from the incurrence of any Debt not permitted by Section 7.1, the application of such Net Cash Proceeds shall be subject to Section 2.9(c).

CREDIT AGREEMENT – Page 55

Section 2.6             Evidence of Debt.

(a)            The Loans made by Swing Line Lender and each Lender shall be evidenced by one or more accounts or records maintained by Swing Line Lender or such Lender and by Administrative Agent in the ordinary course of business; provided that such Lender or Administrative Agent may, in addition, request that such Loans be evidenced by the Notes. The Credit Extensions made by L/C Issuer shall be evidenced by one or more accounts or records maintained by L/C Issuer and by Administrative Agent in the ordinary course of business. The accounts or records maintained by Administrative Agent, Swing Line Lender, L/C Issuer, and each Lender shall be conclusive absent manifest error of the amount of the Credit Extensions made to any Borrower and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of any Borrower hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict between the accounts and records maintained by L/C Issuer, Swing Line Lender, or any Lender and the accounts and records of Administrative Agent in respect of such matters, the accounts and records of Administrative Agent shall control in the absence of manifest error.

(b)            In addition to the accounts and records referred to in subsection (a) above, each Lender and Administrative Agent shall maintain in accordance with its usual practice accounts or records evidencing the purchases and sales by such Lender of participations in Letters of Credit and Swing Line Loans. In the event of any conflict between the accounts and records maintained by Administrative Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of Administrative Agent shall control in the absence of manifest error.

Section 2.7             Cash Collateral.

(a)            Certain Credit Support Events. If (i) L/C Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing, (ii) as of the Letter of Credit Expiration Date, any L/C Obligation for any reason remains outstanding, (iii) any Borrower shall be required to provide Cash Collateral pursuant to Section 9.2, or (iv) if there is more than one Lender at such time of determination, there shall exist a Lender that is a Defaulting Lender, Borrowers shall immediately (in the case of clause (iii) above) or within one (1) Business Day (in all other cases) following any request by Administrative Agent or L/C Issuer, provide Cash Collateral in an amount not less than the applicable Minimum Collateral Amount (determined in the case of Cash Collateral provided pursuant to clause (iv) above, after giving effect to Sections 11.22(a)(iv) and 11.22(a)(v) and any Cash Collateral provided by the Defaulting Lender).

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(b)           Grant of Security Interest. Each Borrower, and to the extent provided by any Defaulting Lender, such Defaulting Lender, hereby grants to (and subjects to the control of) Administrative Agent, for the benefit of Administrative Agent, L/C Issuer and Lenders, and agrees to maintain, a first priority security interest in all such Cash Collateral, and all other Property so provided as Collateral pursuant hereto, and in all proceeds of the foregoing, all as security for the obligations to which such Cash Collateral may be applied pursuant to Section 2.7(c). If at any time Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person other than Administrative Agent or L/C Issuer as herein provided, or that the total amount of such Cash Collateral is less than the Minimum Collateral Amount, Borrowers will, promptly upon demand by Administrative Agent, pay or provide to Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency. All Cash Collateral (other than credit support not constituting funds subject to deposit) shall be maintained in one or more blocked, non-interest bearing deposit accounts at Texas Capital Bank. Borrowers shall pay on demand therefor from time to time all customary account opening, activity and other administrative fees and charges in connection with the maintenance and disbursement of Cash Collateral.

(c)            Application. Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under any of this Section 2.7 or Sections 2.2, 9.2 or 11.22 in respect of Letters of Credit shall be held and applied to the satisfaction of the specific L/C Obligations, obligations to fund participations therein (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) and other obligations for which the Cash Collateral was so provided, prior to any other application of such Property as may otherwise be provided for herein.

(d)           Release. Cash Collateral (or the appropriate portion thereof) provided to reduce Fronting Exposure or to secure other obligations shall be released promptly following (i) the elimination of the applicable Fronting Exposure or other obligations giving rise thereto, including by the termination of Defaulting Lender status of the applicable Lender (or, as appropriate, its assignee following compliance with Section 11.8(b)(vii)) or (ii) the determination by Administrative Agent and L/C Issuer that there exists excess Cash Collateral; provided, however, (x) any such release shall be without prejudice to, and any disbursement or other transfer of Cash Collateral shall be and remain subject to, any other Lien conferred under the Loan Documents and the other applicable provisions of the Loan Documents, and (y) the Person providing Cash Collateral and L/C Issuer may agree that Cash Collateral shall not be released but instead held to support future anticipated Fronting Exposure or other obligations.

Section 2.8             Interest; Payment Terms.

(a)            Revolving Credit Loans - Payment of Principal and Interest; Revolving Nature. The unpaid principal amount of each Borrowing of the Revolving Credit Loans shall, subject to the following sentence and Section 2.8(e), bear interest at the applicable Interest Rate. If at any time such rate of interest would exceed the Maximum Rate but for the provisions thereof limiting interest to the Maximum Rate, then any subsequent reduction shall not reduce the rate of interest on the Revolving Credit Loans below the Maximum Rate until the aggregate amount of interest accrued on the Revolving Credit Loans equals the aggregate amount of interest which would have accrued on the Revolving Credit Loans if the interest rate had not been limited by the Maximum Rate. All accrued but unpaid interest on the principal balance of the Revolving Credit Loans shall be payable on each Payment Date and on the Maturity Date, provided that interest accruing at the Default Interest Rate pursuant to Section 2.8(e) shall be payable on demand. The then Outstanding Amount of the Revolving Credit Loans and all accrued but unpaid interest thereon shall be due and payable on the Maturity Date. The unpaid principal balance of the Revolving Credit Loans at any time shall be the total amount advanced hereunder by Lenders less the amount of principal payments made thereon by or for Borrowers, which balance may be endorsed on the Notes from time to time by Lenders or Swing Line Lender, as applicable, or otherwise noted in Lenders’, Swing Line Lender’s and/or Administrative Agent’s records, which notations shall be, absent manifest error, conclusive evidence of the amounts owing hereunder from time to time.

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(b)           Computation Period. Interest on the Loans and all other amounts payable by Borrowers hereunder on a per annum basis shall be computed on the basis of a 360-day year and the actual number of days elapsed (including the first day but excluding the last day) unless such calculation would result in a usurious rate or to the extent such Loan bears interest based upon the Base Rate, in which case interest shall be calculated on the basis of a 365-day year or 366-day year, as the case may be. In computing the number of days during which interest accrues, the day on which funds are initially advanced shall be included regardless of the time of day such advance is made, and the day on which funds are repaid shall be included unless repayment is credited prior to the close of business on the Business Day received. Each determination by Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

(c)            Unconditional Payment. Each Borrower is and shall be obligated to pay all principal, interest and any and all other amounts which become payable under any of the Loan Documents absolutely and unconditionally and without any abatement, postponement, diminution or deduction whatsoever and without any reduction for counterclaim or setoff whatsoever. If at any time any payment received by Administrative Agent hereunder shall be deemed by a court of competent jurisdiction to have been a voidable preference or fraudulent conveyance under any Debtor Relief Law, then the obligation to make such payment shall survive any cancellation or satisfaction of the Obligations under the Loan Documents and shall not be discharged or satisfied with any prior payment thereof or cancellation of such Obligations, but shall remain a valid and binding obligation enforceable in accordance with the terms and provisions hereof, and such payment shall be immediately due and payable upon demand.

(d)           Partial or Incomplete Payments. Subject to Section 9.3, if at any time insufficient funds are received by and available to Administrative Agent to pay fully all amounts of principal, L/C Borrowings, interest, fees and other amounts then due hereunder, such funds shall be applied (i) first, to pay interest, fees and other amounts then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest, fees and other amounts then due to such parties, and (ii) second, to pay principal and L/C Borrowings then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal or L/C Borrowings, as applicable, then due to such parties. Remittances in payment of any part of the Obligations under the Loan Documents other than in the required amount in immediately available funds at the place where such Obligations are payable shall not, regardless of any receipt or credit issued therefor, constitute payment until the required amount is actually received by Administrative Agent in full in accordance herewith and shall be made and accepted subject to the condition that any check or draft may be handled for collection in accordance with the practice of the collecting bank or banks. Acceptance by Administrative Agent of any payment in an amount less than the full amount then due shall be deemed an acceptance on account only, and the failure to pay the entire amount then due shall be and continue to be an Event of Default.

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(e)            Default Interest Rate. For so long as any Event of Default exists, regardless of whether or not there has been an acceleration of the Loans, and at all times after the maturity of the Loans (whether by acceleration or otherwise), and in addition to all other rights and remedies of Administrative Agent or Lenders hereunder, (i) interest shall accrue on the Outstanding Amount of the Loans at the Default Interest Rate, (ii) interest shall accrue on any past due amount (other than the Outstanding Amount of the Loans) at the Default Interest Rate and (iii) upon the request of the Required Lenders, interest shall accrue on the principal amount of all other outstanding Obligations at the Default Interest Rate, and such accrued interest shall be immediately due and payable. Each Borrower acknowledges that it would be extremely difficult or impracticable to determine Administrative Agent’s or Lenders’ actual damages resulting from any late payment or Event of Default, and such accrued interest are reasonable estimates of those damages and do not constitute a penalty.

Section 2.9             Voluntary Termination or Reduction of Commitments; Prepayments.

(a)            Voluntary Termination or Reduction of Commitments. The Borrower Representative may, upon written notice to Administrative Agent, terminate the Commitments, or from time to time permanently reduce the Commitments; provided that (i) any such notice shall be received by Administrative Agent not later than 11:00 a.m. three (3) Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate amount of $2,500,000 or any whole multiple of $1,000,000 in excess thereof, (iii) the Borrower Representative shall not terminate or reduce the Commitments if, (A) immediately after giving effect thereto and to any concurrent prepayments hereunder, the Revolving Credit Exposure of all Lenders would exceed the lesser of (x) the aggregate amount of the Commitments of the Lenders and (y) the Borrowing Base, in each case in effect at such time or (B) the aggregate amount of the Commitments of the Lenders would be less than $10,000,000 (unless with respect to this clause (B), the aggregate Commitments are reduced to $0) and (iv) if, immediately after giving effect to any reduction of the Commitments, the Letter of Credit Sublimit or Swing Line Sublimit exceeds the amount of the Revolving Credit Facility, such sublimit shall be automatically reduced by the amount of such excess. Administrative Agent will promptly notify Lenders of any such notice of termination or reduction of the Commitments. Any reduction of the Commitments shall be applied to the Commitment of each Lender according to its Applicable Percentage. All fees accrued until the effective date of any termination of the Commitments shall be paid on the effective date of such termination.

CREDIT AGREEMENT – Page 59

(b)            Voluntary Prepayments. Subject to the conditions set forth below, Borrowers shall have the right, at any time and from time to time upon at least three (3) Business Days’ prior written notice to Administrative Agent, to prepay the principal of the Revolving Credit Loans or the Swing Line Loans in full or in part. If there is a prepayment of all or any portion of the principal of the Revolving Credit Loans or the Swing Line Loans on or before the Maturity Date, whether voluntary or because of acceleration or otherwise, such prepayment shall also include any and all accrued but unpaid interest on the amount of principal being so prepaid through and including the date of prepayment, plus any other sums which have become due to Lenders under the other Loan Documents on or before the date of prepayment, but which have not been fully paid.

(c)            Mandatory Prepayment of Revolving Credit Facility. Borrowers shall make a prepayment of the Revolving Credit Loans or the Swing Line Loans upon the occurrence of any of the following:

(i)           If at any time the Revolving Credit Exposure of the Lenders exceeds the lesser of (A) the aggregate amount of the Commitments of the Lenders and (B) the Borrowing Base, in each case in effect at such time, then Borrowers shall immediately prepay the entire amount of such excess to Administrative Agent, for the ratable account of Lenders, and/or Cash Collateralize the L/C Obligations in an aggregate amount equal to such excess; provided, however, that no Borrower shall be required to Cash Collateralize the L/C Obligations pursuant to this Section 2.9(c) unless after the prepayment in full of the Revolving Credit Loans and Swing Line Loans the Revolving Credit Exposure of the Lenders exceeds the lesser of (x) the aggregate amount of the Commitments of the Lenders and (y) the Borrowing Base, in each case in effect at such time.

(ii)          Concurrently with the receipt by any Loan Party of any Net Cash Proceeds from a Disposition not permitted by Section 7.8, the Borrowers shall prepay the Loans in an amount equal to 100% of such Net Cash Proceeds.

(iii)         Concurrently with the receipt by any Loan Party of any Net Cash Proceeds from the incurrence of any Debt not permitted by Section 7.1, the Borrowers shall prepay the Loans in an amount equal to 100% of such Net Cash Proceeds.

(iv)         Upon the receipt by any Loan Party of any cash proceeds of a Specified EBITDA Equity Contribution pursuant to Section 9.3, Borrowers shall prepay an aggregate principal amount of Loans equal to all Net Cash Proceeds received therefrom immediately upon receipt thereof by any such Loan Party or such Subsidiary.

Each prepayment required by this Section 2.9(c) shall be applied, first, to any Base Rate Borrowings then outstanding, and, second, to any Eurodollar Rate Borrowings then outstanding, and if more than one Eurodollar Rate Borrowing is then outstanding, to such Eurodollar Rate Borrowings in such order as the Borrower Representative may direct, or if the Borrower Representative fails to so direct, as Administrative Agent shall elect.

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Section 2.10           Uncommitted Increase in Commitments.

(a)            Request for Increase. Provided that no Default or Event of Default shall have occurred and be continuing, upon written notice to Administrative Agent (which shall promptly notify the Lenders), Borrowers may from time to time, request an increase in the aggregate Commitments by an amount not to exceed $15,000,000 (with the aggregate Commitments not to exceed $45,000,000 after giving effect to all such increases implemented pursuant to this Section 2.10); provided that (i) any such request for an increase shall be in a minimum amount of $5,000,000, and (ii) Borrowers may make a maximum of three such requests. To achieve the full amount of a requested increase, and subject to the approval of Administrative Agent and L/C Issuer, Borrowers may (A) request that one or more Lenders increase their Commitment, (B) invite all Lenders to increase their respective Commitment, and/or (C) invite additional Eligible Assignees to become Lenders pursuant to a joinder agreement in form and substance satisfactory to Administrative Agent and its counsel. Nothing contained in this Section 2.10 shall constitute, or otherwise be deemed to be, a commitment on the party of any Lender to increase its Commitment hereunder at any time.

(b)            Notification by Administrative Agent; Additional Lenders. In the event the Borrowers invite all Lenders to increase their respective Commitment, then at the time of sending such notice, Borrowers (in consultation with Administrative Agent) shall specify the time period within which each Lender is requested to respond (which shall in no event be less than ten (10) Business Days from the date of delivery of such notice to the Lenders). Each Lender shall notify Administrative Agent within such time period whether or not it agrees to increase its Commitment and, if so, whether by an amount equal to, greater than, or less than its Applicable Percentage of such requested increase. Any Lender not responding within such time period shall be deemed to have declined to increase its Commitment. Administrative Agent shall notify Borrowers and each Lender of the Lenders’ responses to each request made hereunder.

(c)            Effective Date and Allocations. If the Commitments are increased in accordance with this Section 2.10, Administrative Agent and Borrowers shall determine the effective date (the “Increase Effective Date”) and the final allocation of such increase. Administrative Agent shall promptly notify Borrowers and the Lenders of the final allocation of such increase and the Increase Effective Date.

(d)           Conditions to Effectiveness of Increase. As a condition precedent to such increase, Borrowers shall deliver to Administrative Agent a certificate of each Loan Party dated as of the Increase Effective Date (in sufficient copies for each Lender) signed by a Responsible Officer of such Loan Party, in each case in form and substance satisfactory to Administrative Agent, (i) certifying and attaching the resolutions adopted by such Loan Party approving or consenting to such increase, and (ii) in the case of Borrowers, certifying that, before and after giving effect to such increase, (A) the representations and warranties contained in Article 5 and the other Loan Documents are true and correct in all material respects (other than such representation or warranty expressly qualified by materiality or by reference to Material Adverse Effect) on and as of the Increase Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct in all material respects (other than such representation or warranty expressly qualified by materiality or by reference to Material Adverse Effect) as of such earlier date, (B) no Default exists and (C) Borrowers are in pro forma compliance with the financial covenants contained in Sections 8.1 and 8.2.

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(e)            Pro Rata Treatment; Etc. On the Increase Effective Date, (i) any Lender increasing (or, in the case of any newly added Lender, extending) its Commitment shall make available to Administrative Agent such amounts in immediately available funds as Administrative Agent shall determine, for the benefit of the other Lenders, as being required in order to cause, after giving effect to such increase or addition and the use of such amounts to make payments to such other Lenders, each Lender’s portion of the outstanding Revolving Credit Loans of all the Lenders to equal its revised Applicable Percentage of such outstanding Revolving Credit Loans, and Administrative Agent shall make such other adjustments among the Lenders with respect to the Revolving Credit Loans then outstanding and amounts of principal, interest, commitment fees and other amounts paid or payable with respect thereto as shall be necessary, in the opinion of Administrative Agent, in order to effect such reallocation and (ii) Borrowers shall be deemed to have repaid and reborrowed all outstanding Revolving Credit Loans as of the date of any increase (or addition) in the Commitments (with such reborrowing to consist of the Types of Revolving Credit Loans, with related Interest Periods if applicable, specified in a notice delivered by the Borrower Representative, in accordance with the requirements of Section 2.1(b)). The deemed payments made pursuant to clause (ii) of the immediately preceding sentence shall be accompanied by payment of all accrued interest on the amount prepaid and, in respect of each Eurodollar Rate Loan, shall be subject to the provisions of Section 3.5 if the deemed payment occurs other than on the last day of the related Interest Periods. Within a reasonable time after the effective date of any increase or addition, Administrative Agent shall, and is hereby authorized and directed to, revise Schedule 2.1 to reflect such increase or addition and shall distribute such revised Schedule 2.1 to each of the Lenders and the Borrowers, whereupon such revised Schedule 2.1 shall replace the old Schedule 2.1 and become part of this Agreement.

(f)            Conflicting Provisions. This Section shall supersede any provisions in Sections 11.10 or 11.23 to the contrary.

Section 2.11     Cash Collateral Blocked Accounts. Subject to Section 6.12, each Borrower shall establish with Administrative Agent or any banks acceptable to Administrative Agent, certain lockboxes and blocked accounts (collectively “Blocked Accounts”), for the benefit of Administrative Agent, for the deposit of all receipts and collections in accordance with Section 2.12 hereof, pursuant to executed Deposit Account Control Agreements in form and substance satisfactory to Administrative Agent, in its reasonable discretion. At all times during a Trigger Period, each Borrower shall cause all receipts and collections of any accounts receivable to be deposited in such Blocked Accounts to be pledged to Administrative Agent, for the benefit of the Secured Parties, and, pursuant to Section 2.5(d), forwarded on a daily basis to an account held by Administrative Agent. During a Trigger Period, proceeds received from such Blocked Accounts shall be applied against any Obligations owing by any Borrower to the Lenders and shall be applied in accordance with Section 2.5(d) hereof. Only Administrative Agent shall have the right to direct withdrawals from such Blocked Accounts. Except as otherwise agreed to by Administrative Agent, each bank at which any such Blocked Account is maintained shall waive any right of offset such bank may otherwise have in such Blocked Account and the items deposited therein.

Borrowers shall pay all fees and charges as may be required by any depository in which such Blocked Accounts are opened. Subject to Section 6.12, each Borrower shall, contemporaneously with the execution of this Agreement, provide Administrative Agent with the duly executed Deposit Account Control Agreements related to such Blocked Accounts. Subject to Section 6.12, each Borrower covenants and agrees to notify all of its customers and account debtors in writing on or before the date set forth in Section 6.12 directing such customers and account debtors to forward all current and future remittances and/or payments owed to such Borrower to the Blocked Accounts. The Blocked Accounts as of the Closing Date are set forth in Schedule 2.11.

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Section 2.12     Collection of Accounts.

(a)            All receipts of cash, cash equivalents, checks, credit card receipts, drafts, instruments, and other items of payment arising out of the sale of inventory or other Property of the Loan Parties or the creation of accounts receivable, including without limitation, insurance proceeds and tax refunds (referred to as “Receipts”), and all Property of the Loan Parties in which Administrative Agent has a security interest or Lien, shall be deposited daily into one or more of the Blocked Accounts, and shall be held in trust by such Loan Party for Administrative Agent until so deposited.

(b)            In the event, notwithstanding the provisions of this Section, any Loan Party receives or otherwise has dominion and control of any Receipts, or any proceeds or collections of any Property of the Loan Parties in which Administrative Agent has a security interest or Lien, such Receipts, proceeds, and collections shall be held in trust by such Loan Party for Administrative Agent and shall not be commingled with any of such Loan Party’s other funds or deposited in any account of such Loan Party other than a Blocked Account.

Section 2.13     Appointment of Borrower Representative.

(a)            Each Borrower hereby irrevocably appoints and constitutes Flex Leasing Power & Services LLC, a Delaware limited liability company (in such capacity, the “Borrower Representative”), as its agent to request and receive the proceeds of any Loan, Letter of Credit or any other extension of credit hereunder (and to otherwise act on behalf of such Borrower pursuant to this Agreement and the other Loan Documents) from the Lenders in the name or on behalf of each such Borrower. The Lenders may disburse such proceeds only to a bank account of a Borrower without notice to any other Borrower or any other Loan Party.

(b)            Each Loan Party hereby irrevocably appoints and constitutes the Borrower Representative as its agent to (i) receive statements of account and all other notices from Administrative Agent with respect to the Obligations or otherwise under or in connection with this Agreement and the other Loan Documents; (ii) execute and deliver Borrowing Base Reports and all other notices, certificates and documents to be executed and/or delivered by any Loan Party under this Agreement or the other Loan Documents; and (iii) otherwise act on behalf of such Loan Party pursuant to this Agreement and the other Loan Documents.

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(c)            The authorizations contained in this Section 2.13 are coupled with an interest and shall be irrevocable, and the Lenders may rely on any notice, request, information supplied by the Borrower Representative, every document executed by the Borrower Representative, every agreement made by the Borrower Representative or other action taken by the Borrower Representative in respect of any Borrower or other Loan Party as if the same were supplied, made or taken by such Borrower or such Loan Party. Without limiting the generality of the foregoing, the failure of one or more Borrowers or other Loan Parties to join in the execution of any writing in connection herewith shall not relieve any Borrower or other Loan Party from obligations in respect of such writing.

(d)            No purported termination of the appointment of the Borrower Representative as agent shall be effective without the prior written consent of Administrative Agent.

(e)            Any notice given by or to the Borrower Representative hereunder shall constitute and be deemed to be notice given by or to all Borrowers, jointly and severally. Notice given by Administrative Agent to the Borrower Representative hereunder or pursuant to any other Loan Documents in accordance with the terms hereof or thereof shall constitute notice to all Borrowers. The knowledge of any Borrower shall be imputed to all Borrowers and any consent by the Borrower Representative or any Borrower shall constitute the consent of and shall bind all Borrowers.

(f)             The Borrower Representative hereby accepts the appointment by each Loan Party to act as the agent of the Loan Parties pursuant to this Section 2.13. The Borrower Representative shall ensure that the disbursement of any Loans, the issuance of any Letters of Credit or other extension of credit hereunder to each Borrower requested by or paid to or for the account of such Borrower shall be paid to or for the account of such Borrower.

Section 2.14     Joint and Several Liability. The Borrowers shall be jointly and severally liable for all Obligations due to the Secured Parties under this Agreement, regardless of which Borrower actually receives any Loans, Letters of Credit or other extensions of credit hereunder or the amount of such Loans or Letters of Credit received or the manner in which Administrative Agent accounts for such Loans, Letters of Credit or other extensions of credit on its books and records. The Obligations with respect to the Loans and Letters of Credit or other extensions of credit made to a Borrower, and the Obligations arising as a result of the joint and several liability of a Borrower hereunder, shall be primary obligations of all the Borrowers. The Obligations arising as a result of the joint and several liability of a Borrower hereunder with respect to the Loans, Letters of Credit or other extensions of credit made to the other Borrowers hereunder shall, to the fullest extent permitted by law, be unconditional irrespective of (a) the validity or enforceability, avoidance or subordination of the Obligations of the other Borrowers or of any promissory note or other document evidencing all or any part of the Obligations of the other Borrowers, (b) the absence of any attempt to collect the Obligations from the other Borrowers, any other Loan Party or any other security therefor, or the absence of any other action to enforce the same, (c) the failure by Administrative Agent to take any steps to perfect and maintain its security interest in, or to preserve its rights and maintain its security or collateral for the Obligations of the other Borrowers and the other Loan Parties, (d) the election of Administrative Agent or any other Secured Party in any proceeding instituted under any bankruptcy, insolvency or other Debtor Relief Law or of the application of Section 1111(b)(2) of the Bankruptcy Code of the United States, (e) the disallowance of all or any portion of the claim(s) of the Secured Parties for the repayment of the Obligations of the other Borrowers and other Loan Parties under Section 502 of the Bankruptcy Code of the United States, or (f) any other circumstances which might constitute a legal or equitable discharge or defense of any obligor. With respect to the Obligations arising as a result of the joint and several liability of a Borrower hereunder with respect to the Loans, Letters of Credit or other extensions of credit made to the other Borrowers hereunder, each Borrower waives, until the Obligations shall have been paid in full in immediately available funds and this Agreement shall have been terminated, any right to enforce any right of subrogation or any remedy which the Secured Parties now have or may hereafter have against the Borrowers and the other Loan Parties, any endorser or any guarantor of all or any part of the Obligations, and any benefit of, and any right to participate in, any security or collateral given to the Secured Parties. Upon any Event of Default and for so long as the same is continuing, Administrative Agent may proceed directly and at once, without notice, against any Borrower or any Guarantor to collect and recover the full amount, or any portion of the Obligations, without first proceeding against the other Borrowers or any other Person, or against any security or collateral for the Obligations. Each Borrower consents and agrees that Administrative Agent shall be under no obligation to marshal any assets in favor of any Borrower or any other Loan Party against or in payment of any or all of the Obligations.

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ARTICLE 3.

TAXES, YIELD PROTECTION AND INDEMNITY

Section 3.1       Increased Costs.

(a)            Increased Costs Generally. If any Change in Law shall:

(i)            impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement reflected in the Adjusted Eurodollar Rate);

(ii)           subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or

(iii)          impose on any Lender or the London interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or Loans made by such Lender or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such Lender or such other Recipient of making, converting to, continuing or maintaining any Loan or of maintaining its obligation to make any such Loan, or to increase the cost to such Lender or such other Recipient of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit) or to reduce the amount of any sum received or receivable by such Lender or other Recipient hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or other Recipient, Borrowers will pay to such Lender or other Recipient, as the case may be, such additional amount or amounts as will compensate such Lender or other Recipient, as the case may be, for such additional costs incurred or reduction suffered.

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(b)            Capital or Liquidity Requirements. If any Lender determines that any Change in Law affecting such Lender or any Lending Office of such Lender or such Lender’s holding company, if any, regarding capital or liquidity requirements, has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by, or participations in Letters of Credit or Swing Line Loans held by such Lender or the Letters of Credit issued by L/C Issuer, to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy and liquidity), then from time to time Borrowers will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.

(c)            Certificates for Reimbursement. A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in Sections 3.1(a) or (b) and delivered to the Borrower Representative, shall be conclusive absent manifest error. Borrowers shall pay such Lender the amount shown as due on any such certificate within ten (10) days after receipt thereof.

(d)            Delay in Requests. Failure or delay on the part of any Lender to demand compensation pursuant to this Section 3.1 shall not constitute a waiver of such Lender’s right to demand such compensation; provided that no Borrower shall be required to compensate a Lender pursuant to this Section 3.1 for any increased costs incurred or reductions suffered more than six (6) months prior to the date that such Lender notifies the Borrower Representative of the Change in Law giving rise to such increased costs or reductions, and of such Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine (9) -month period referred to above shall be extended to include the period of retroactive effect thereof).

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Section 3.2       Illegality. If any Lender determines that any Law or regulation has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its Lending Office to make, maintain or fund Loans whose interest is determined by reference to the Eurodollar Rate, or to determine or charge interest rates based upon the Eurodollar Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London interbank market, then, on notice thereof by such Lender to the Borrower Representative through Administrative Agent, (i) any obligation of such Lender to make or continue Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans shall be suspended, and (ii) if such notice asserts the illegality of such Lender making or maintaining Base Rate Loans the interest rate on which is determined by reference to the Eurodollar Rate component of the Base Rate, the interest rate on which Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be determined by Administrative Agent without reference to the Eurodollar Rate component of the Base Rate, in each case until such Lender notifies Administrative Agent and the Borrower Representative that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, (x) Borrowers shall, upon demand from such Lender (with a copy to Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate Loans of such Lender to Base Rate Loans (the interest rate on which Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be determined by Administrative Agent without reference to the Eurodollar Rate component of the Base Rate), either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar Rate Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurodollar Rate Loans and (y) if such notice asserts the illegality of such Lender determining or charging interest rates based upon the Eurodollar Rate, Administrative Agent shall during the period of such suspension compute the Base Rate applicable to such Lender without reference to the Eurodollar Rate component thereof until Administrative Agent is advised in writing by such Lender that it is no longer illegal for such Lender to determine or charge interest rates based upon the Eurodollar Rate. Upon any such prepayment or conversion, Borrowers shall also pay accrued interest on the amount so prepaid or converted.

Section 3.3       Inability to Determine Rates.

(a)            Subject to clause (b) below, if (i) Administrative Agent or the Required Lenders determine that for any reason in connection with any request for a Eurodollar Rate Loan or a conversion to or continuation thereof that (A) Dollar deposits are not being offered to banks in the London interbank eurodollar market for the applicable amount and Interest Period of such Eurodollar Rate Loan, (B) adequate and reasonable means do not exist for determining the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan or in connection with an existing or proposed Base Rate Borrowing, or (C) the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to such Lenders of funding such Eurodollar Rate Loans, or (ii) by reason of any Change in Law any Lender would become subject to restrictions on the amount of a category of liabilities or assets which it may hold and notifies Administrative Agent of same, Administrative Agent will promptly so notify the Borrower Representative and each Lender. Thereafter, (x) the obligation of Lenders to make or maintain Eurodollar Rate Loans shall be suspended, and (y) in the event of a determination described in the preceding sentence with respect to the Eurodollar Rate component of the Base Rate, the utilization of the Eurodollar Rate component in determining the Base Rate shall be suspended, in each case until Administrative Agent (upon the instruction of the Required Lenders) revokes such notice. Upon receipt of such notice, the Borrower Representative may revoke any pending request for a Borrowing of, conversion to or continuation of Eurodollar Rate Loans or, failing that, will be deemed to have converted such request into a request for a Base Rate Borrowing in the amount specified therein.

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(b)            If at any time Administrative Agent determines (which determination shall be conclusive absent manifest error) that (i) the circumstances set forth in clause (a)(i)(A) or clause (a)(i)(B) have arisen and such circumstances are unlikely to be temporary or (ii) the circumstances set forth in clause (a)(i)(A) or clause (a)(i)(B) have not arisen but the ICE Benchmark Administration or its successor or a Governmental Authority having jurisdiction over Administrative Agent has made a public statement identifying a specific date after which the Eurodollar Rate shall no longer be used for determining interest rates for loans, then Administrative Agent may, to the extent practicable (in consultation with Borrowers and as determined by Administrative Agent to be generally in accordance with similar situations in other transactions in which it is serving as administrative agent or otherwise consistent with market practice), establish a replacement interest rate, and Borrowers and Administrative Agent shall enter into an amendment to this Agreement to reflect such replacement interest rate or such other related changes to this Agreement as may be applicable. Notwithstanding anything to the contrary in Section 11.10, such amendment shall become effective without any further action or consent of any other party to this Agreement so long as Administrative Agent shall not have received, within five (5) Business Days after the date notice of such alternate rate of interest is provided to the Lenders, a written notice from the Required Lenders stating that such Required Lenders object to such amendment. Until an alternate rate of interest shall be determined in accordance with this clause (b) (but, in the case of the circumstances described in clause (ii) of the first sentence of this Section 3.3(b), only to the extent the Eurodollar Rate for such Interest Period is not available or published at such time on a current basis), (x) any Borrowing Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurodollar Rate Loan shall be ineffective and (y) if any Borrowing Request requests a Revolving Credit Borrowing comprised of Revolving Credit Loans bearing interest based on Adjusted Eurodollar Rate such Borrowing shall be made as a Borrowing of Revolving Credit Loans bearing interest based on the Base Rate; provided that, if such alternate rate of interest shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement.

Section 3.4       Taxes.

(a)            Defined Terms. For purposes of this Section, the term “applicable Law” includes FATCA.

(b)            Payment Free of Taxes. Any and all payments by or on account of any obligation of any Loan Party under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable Law. If any applicable Law (as determined in the good faith discretion of an applicable Withholding Agent) requires the deduction or withholding of any Tax from any such payment by a Withholding Agent, then the applicable Withholding Agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable Law and, if such Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section 3.4) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.

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(c)            Payment of Other Taxes by the Loan Parties. The Loan Parties shall timely pay to the relevant Governmental Authority in accordance with applicable Law, or at the option of Administrative Agent timely reimburse it for the payment of, any Other Taxes.

(d)            Indemnification by the Loan Parties. The Loan Parties shall jointly and severally indemnify each Recipient, within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 3.4) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower Representative by a Lender (with a copy to Administrative Agent), or by Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

(e)            Indemnification by Lenders. Each Lender shall severally indemnify Administrative Agent, within ten (10) days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that any Loan Party has not already indemnified Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 11.8 relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by Administrative Agent to such Lender from any other source against any amount due to Administrative Agent under this Section 3.4(e).

(f)             Evidence of Payments. As soon as practicable after any payment of Taxes by any Loan Party to a Governmental Authority pursuant to this Section 3.4, such Loan Party shall deliver to Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to Administrative Agent.

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(g)            Status of Lenders.

(i)             Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower Representative and Administrative Agent, at the time or times reasonably requested by the Borrower Representative or Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower Representative or Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Borrower Representative or Administrative Agent, shall deliver such other documentation prescribed by applicable Law or reasonably requested by the Borrower Representative or Administrative Agent as will enable the Borrower Representative or Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two (2) sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 3.4(g)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in such Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

(ii)            Without limiting the generality of the foregoing,

(A)            any Lender that is a U.S. Person shall deliver to the Borrower Representative and Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower Representative or Administrative Agent), executed copies of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax;

(B)             any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower Representative and Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower Representative or Administrative Agent), whichever of the following is applicable:

(1)            in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, executed copies of IRS Form W-8BEN (or IRS Form W-8BEN-E, if applicable) establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN (or IRS Form W-8BEN- E, if applicable) establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

(2)            executed copies of IRS Form W-8ECI;

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(3)            in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit G-1 to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of any Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) executed copies of IRS Form W-8BEN (or IRS Form W-8BEN-E, if applicable); or

(4)            to the extent a Foreign Lender is not the beneficial owner, executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN (or IRS Form W-8BEN-E, if applicable), a U.S. Tax Compliance Certificate substantially in the form of Exhibit G-2 or Exhibit G-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit G-4 on behalf of each such direct and indirect partner;

(C)            any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower Representative and Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower Representative or Administrative Agent), executed copies of any other form prescribed by applicable Law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable Law to permit the Borrower Representative or Administrative Agent to determine the withholding or deduction required to be made; and

(D)            if a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower Representative and Administrative Agent at the time or times prescribed by Law and at such time or times reasonably requested by the Borrower Representative or Administrative Agent such documentation prescribed by applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower Representative or Administrative Agent as may be necessary for the Borrower Representative and Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

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Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower Representative and Administrative Agent in writing of its legal inability to do so.

(h)            Treatment of Certain Refunds. If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 3.4 (including by the payment of additional amounts pursuant to this Section 3.4), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section 3.4 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this Section 3.4(h) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this Section 3.4(h), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this Section 3.4(h) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This Section 3.4(h) shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

(i)             Survival. Each party’s obligations under this Section 3.4 shall survive the resignation or replacement of Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document.

Section 3.5       Compensation for Losses. Upon demand of any Lender (with a copy to Administrative Agent) from time to time, Borrowers shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of:

(a)            any continuation, conversion, payment or prepayment of any Eurodollar Rate Loan on a day other than the last day of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise); or

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(b)            any failure by Borrowers (for a reason other than the failure of such Lender to lend a Eurodollar Rate Loan) to prepay, borrow, continue or convert any Eurodollar Rate Loan on the date or in the amount notified by the Borrower Representative; or

(c)            any assignment of a Eurodollar Rate Loan on a day other than the last day of the Interest Period therefor as a result of a request by the Borrower Representative pursuant to Section 3.6(b);

including any loss of anticipated profits and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained. Borrowers shall also pay any customary administrative fees charged by such Lender in connection with the foregoing.

For purposes of calculating amounts payable by Borrowers to the Lenders under this Section 3.5, each Lender shall be deemed to have funded each Eurodollar Rate Loan made by it at Adjusted Eurodollar Rate by a matching deposit or other borrowing in the London interbank eurodollar market for a comparable amount and for a comparable period, whether or not such Eurodollar Rate Loan was in fact so funded. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower Representative and shall be conclusive absent demonstrable error. Borrowers shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

Section 3.6       Mitigation of Obligations; Replacement of Lenders.

(a)            Designation of a Different Lending Office. If any Lender requests compensation under Section 3.1, or requires Borrowers to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.4, then such Lender shall (at the request of the Borrower Representative) use reasonable efforts to designate a different Lending Office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or Affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.1 or Section 3.4, as the case may be, in the future, and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. Borrowers hereby agree to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

(b)            Replacement of Lenders. If any Lender requests compensation under Section 3.1, or if Borrowers are required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.4 and, in each case, such Lender has declined or is unable to designate a different Lending Office in accordance with Section 3.6(a), or if any Lender is a Defaulting Lender or a Non-Consenting Lender, then Borrowers may, at their sole expense and effort, upon notice to such Lender and Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 11.8), all of its interests, rights (other than its existing rights to payments pursuant to Section 3.1 or Section 3.4) and obligations under this Agreement and the related Loan Documents to an Eligible Assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that:

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(i)            Borrowers shall have paid to Administrative Agent the assignment fee (if any) specified in Section 11.8;

(ii)           such Lender shall have received payment of an amount equal to the Outstanding Amount of its Loans and L/C Advances, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 3.5) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or Borrowers (in the case of all other amounts);

(iii)          in the case of any such assignment resulting from a claim for compensation under Section 3.1 or payments required to be made pursuant to Section 3.4, such assignment will result in a reduction in such compensation or payments thereafter;

(iv)          such assignment does not conflict with applicable Law; and

(v)           in the case of any assignment resulting from a Lender becoming a Non-Consenting Lender, the applicable assignee shall have consented to the applicable amendment, waiver or consent.

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling Borrowers to require such assignment and delegation cease to apply.

Section 3.7       Survival. All of the obligations under this Article 3 shall survive termination of the Commitments, repayment of all other Obligations hereunder, and resignation of Administrative Agent.

ARTICLE 4.

CONDITIONS PRECEDENT

Section 4.1       Initial Extension of Credit. The obligation of Lenders to make the initial Credit Extension hereunder is subject to the condition precedent that Administrative Agent shall have received all of the following, each dated (unless otherwise indicated or otherwise specified by Administrative Agent) the Closing Date, in form and substance satisfactory to Administrative Agent:

(a)            Credit Agreement. Counterparts of this Agreement executed by Administrative Agent, the Lenders, Swing Line Lender, L/C Issuer and each Loan Party;

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(b)        Resolutions. Resolutions of the board of directors (or other governing body) of Parent and each Loan Party that is not a natural Person certified by the secretary or an assistant secretary (or a Responsible Officer or other custodian of records) of such Person which authorize the execution, delivery, and performance by such Person of this Agreement and the other Loan Documents to which such Person is or is to be a party;

(c)        Incumbency Certificate. A certificate of incumbency certified by a Responsible Officer of Parent and each Loan Party that is not a natural Person certifying the names of the individuals or other Persons authorized to sign this Agreement and each of the other Loan Documents to which each Loan Party is or is to be a party (including the certificates contemplated herein) on behalf of such Person together with specimen signatures of such individual Persons;

(d)        Certificate Regarding Consents and Approvals. A certificate of a Responsible Officer of each Loan Party either (i) attaching copies of all consents, licenses and approvals required in connection with the execution, delivery and performance by such Loan Party and the validity against such Loan Party of the Loan Documents to which it is a party, and such consents, licenses and approvals shall be in full force and effect, or (ii) stating that no such consents, licenses or approvals are so required;

(e)        Closing Certificate. A certificate signed by a Responsible Officer of the Borrower Representative certifying (i) that the conditions specified in Sections 4.2(b), (c) and (d) have been satisfied and (ii) that attached to such certificate are true, accurate and complete copies of the Parent Loan Documents, including any amendments and supplements thereto;

(f)         Solvency Certificate. A solvency certificate signed by the chief financial officer or vice president of finance of Company;

(g)        Perfection Certificate. The Perfection Certificate signed by a Responsible Officer of each Loan Party;

(h)        Constituent Documents. The Constituent Documents and all amendments thereto for Parent and each Loan Party that is not a natural Person, with the formation documents included in the Constituent Documents being certified as of a date acceptable to Administrative Agent by the appropriate government officials of the state of incorporation or organization of Parent and each Loan Party, and all such Constituent Documents being accompanied by certificates that such copies are complete and correct, given by an authorized representative acceptable to Administrative Agent;

(i)         Governmental Certificates. Certificates of the appropriate government officials of the state of incorporation or organization of Parent and each Loan Party that is not a natural Person as to the existence and good standing of Parent and each Loan Party that is not a natural Person, each dated as of a recent date hereof;

(j)         Notes. The Notes executed by Borrowers in favor of each Lender requesting Notes;

(k)        Security Documents; Intercreditor Agreement. The Security Documents (including the Intercreditor Agreement) executed by Parent, Borrowers, the other Loan Parties, the Subordinated Lenders and Administrative Agent, in each case, as the case may be;

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(l)             Pledged Equity Interests; Stock Powers; Pledged Notes. Subject to Section 6.17, Administrative Agent shall have received (i) the certificates (if any) representing any Equity Interests pledged pursuant to the Security Documents, together with an undated stock power for each such certificate executed in blank by a duly authorized officer of the pledgor thereof and (ii) each promissory note (if any) pledged to Administrative Agent pursuant to the Security Documents endorsed (without recourse) in blank (or accompanied by an executed transfer form in blank) by the pledgor thereof;

(m)          Financing Statements. UCC financing statements reflecting Parent (solely with respect to its pledge of the Equity Interests in Company) and the Loan Parties, as debtors, and Administrative Agent, as secured party, which are required to grant a Lien which secures the Obligations and covering such Collateral as Administrative Agent may request;

(n)             Borrowing Base Report. Borrowing Base Report which calculates the Borrowing Base as of a date specified by Administrative Agent prior to or on the Closing Date with customary supporting schedules and documentation;

(o)            Field Examination. Such third-party field examinations and audits of the Borrowers’ Accounts, Inventory (including, without limitation, the Generator Units), related working capital matters and of the Borrowers’ related data processing and other systems and such other information or materials as Administrative Agent shall include within the scope of such third-party field examinations and audits, the results of which shall be satisfactory to Administrative Agent in its sole discretion;

(p)            Appraisals. Such third-party asset appraisals of each Borrowers’ Inventory (including, without limitation, the Generator Units), which third-party appraisal shall be in form and substance satisfactory to Administrative Agent in its sole discretion;

(q)          Corporate Structure. The corporate structure, capital structure and other material debt instruments, material accounts and governing documents of Parent, the Company and its Subsidiaries shall be acceptable to Administrative Agent in its reasonable discretion;

(r)           Insurance Matters. Subject to Section 6.17, copies of insurance certificates describing all insurance policies required by Section 6.5, together with lender loss payable and additional insured endorsements in favor of Administrative Agent with respect to all insurance policies covering Collateral;

(s)            Lien Searches. The results of UCC, tax lien and judgment lien searches showing all financing statements and other documents or instruments on file against each Loan Party in the appropriate filing offices, such search to be as of a date no more than thirty (30) days prior to the date hereof, and reflecting no Liens against any of the intended Collateral other than Liens being released or assigned to Administrative Agent concurrently with the initial Credit Extension and Permitted Liens;

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(t)           Opinion of Counsel. A favorable opinion of Fennemore Craig, P.C., legal counsel to each Loan Party, as to such matters as Administrative Agent may reasonably request;

(u)         Attorneys’ Fees and Expenses. Evidence that the costs and expenses (including reasonable attorneys’ fees) referred to in Section 11.1, to the extent invoiced, shall have been paid in full by Borrowers;

(v)            Financial Statements. The financial statements set forth in Section 5.2;

(w)           Financial Projections. Pro forma consolidated financial statements for Company and its Subsidiaries, and projections prepared by management of Company, of balance sheets, income statements and cash flow statements on a quarterly basis for the first year following the Closing Date and on an annual basis for each year thereafter during the term of this Agreement, which shall not be inconsistent with any financial information or projections previously delivered to Administrative Agent;

(x)            KYC Information; Beneficial Ownership. Each Loan Party shall have provided to Administrative Agent and the Lenders (i) the documentation and other information requested by Administrative Agent as it deems necessary in order to comply with requirements of any anti-money laundering Laws, including, without limitation, the Patriot Act and any applicable “know your customer” rules and regulations and (ii) at least three (3) Business Days prior to the Closing Date, any Borrower that qualified as a “legal entity customer” under the Beneficial Ownership Regulation shall deliver a Beneficial Ownership Certification in relation to such Borrower;

(y)            Minimum Availability. Evidence that, immediately after giving effect to the initial Credit Extension hereunder, Availability shall be at least $5,000,000;

(z)           Legal Due Diligence. Administrative Agent and its counsel shall have completed all legal due diligence (including review of any material agreements disclosed on Schedule 5.26), the results of which shall be satisfactory to Administrative Agent in its sole discretion;

(aa)            Closing Fees. Evidence that (i) all fees required to be paid to Administrative Agent and Arranger on or before the Closing Date have been paid, and (ii) all fees required to be paid to the Lenders on or before the Closing Date have been paid; and

(bb)          Additional Documentation. Such additional approvals, opinions, or documents as Administrative Agent or its legal counsel may reasonably request.

For purposes of determining compliance with the conditions set forth in this Section 4.1, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or be satisfied with, each document or other matter required thereunder to be consented to or approved by or be acceptable or satisfactory to a Lender unless Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

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Section 4.2       All Extensions of Credit. The obligation of Lenders to make any Credit Extension hereunder (including the initial Credit Extension) is subject to the following additional conditions precedent:

(a)            Request for Credit Extension. Administrative Agent shall have received in accordance with this Agreement, as the case may be, a Borrowing Request, Letter of Credit Application, or Swing Line Loan Request, as applicable, pursuant to Administrative Agent’s requirements and executed by a Responsible Officer of the Borrower Representative;

(b)          No Default. No Default or Event of Default shall have occurred and be continuing, or would result from or after giving effect to such Credit Extension;

(c)         No Material Adverse Effect. No Material Adverse Effect shall have occurred and no circumstance shall exist that could reasonably be expected to have a Material Adverse Effect;

(d)            Representations and Warranties. All of the representations and warranties of each Borrower and each other Loan Party contained in Article 5 and in the other Loan Documents shall (i) with respect to representations and warranties that contain a materiality qualification, be true and correct on and as of the date of such Borrowing, and (ii) with respect to representations and warranties that do not contain a materiality qualification, be true and correct in all material respects on and as of the date of such Borrowing, in each case with the same force and effect as if such representations and warranties had been made on and as of such date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects (or in the case of such representations and warranties that contain a materiality qualification, in all respects) as of such earlier date, and except that for purposes of this Section 4.2, the representations and warranties contained in Section 5.2 shall be deemed to refer to the most recent statements furnished pursuant to Section 6.1(a) and (b), respectively; and

(e)         Availability Under Revolving Credit Facility. With respect to any request for a Credit Extension under the Commitments, immediately after giving effect to the Credit Extension so requested, the total Revolving Credit Exposure of the Lenders shall not exceed the lesser of (i) the Borrowing Base in effect as of the date of such Credit Extension and (ii) the aggregate Commitments of the Lenders in effect as of the date of such Credit Extension.

Each Credit Extension hereunder shall be deemed to be a representation and warranty by each Borrower that the conditions specified in this Section 4.2 have been satisfied on and as of the date of the applicable Credit Extension.

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ARTICLE 5.

REPRESENTATIONS AND WARRANTIES

To induce Administrative Agent and Lenders to enter into this Agreement, and to make Credit Extensions hereunder, each Loan Party represents and warrants to Administrative Agent and Lenders that:

Section 5.1       Entity Existence. Each Loan Party and each Subsidiary thereof (a) is duly incorporated or organized, as the case may be, validly existing, and in good standing under the Laws of the jurisdiction of its incorporation or organization; (b) has all requisite power and authority to own its assets and carry on its business as now being or as proposed to be conducted; and (c) is qualified to do business in all jurisdictions in which the nature of its business makes such qualification necessary and where failure to so qualify could reasonably be expected to have a Material Adverse Effect. Each of the Loan Parties has the power and authority to execute, deliver, and perform its obligations under this Agreement and the other Loan Documents to which it is or may become a party.

Section 5.2       Financial Statements; Etc. Company has delivered to Administrative Agent (a) audited financial statements of Company and its Subsidiaries as of and for the fiscal year ended December 31, 2017 and (b) unaudited consolidated and consolidating financial statements of Company and its Subsidiaries as of and for the calendar month and the portion of the fiscal year ended November 30, 2018. Such financial statements are true and correct, have been prepared in accordance with GAAP, and fairly and accurately present, on a consolidated basis, the financial condition of Company and its Subsidiaries as of the respective dates indicated therein and the results of operations for the respective periods indicated therein. Neither Company nor any of its Subsidiaries has any material contingent liabilities, liabilities for taxes, unusual forward or long-term commitments, unrealized or anticipated losses from any unfavorable commitments except as referred to or reflected in such financial statements. No Material Adverse Effect and no circumstance which could reasonably be expected to result in a Material Adverse Effect has occurred since the effective date of the financial statements referred to in this Section 5.2. All projections delivered by the Borrower Representative to Administrative Agent and Lenders have been prepared in good faith, with care and diligence and using assumptions that are reasonable under the circumstances at the time such projections were prepared and delivered to Administrative Agent and Lenders and all such assumptions are disclosed in the projections. Other than the Debt listed on Schedule 7.1 and Debt otherwise permitted by Section 7.1, Company and each Subsidiary have no Debt.

Section 5.3       Action; No Breach. The execution, delivery, and performance by each Loan Party of this Agreement and the other Loan Documents to which such Person is or may become a party and compliance with the terms and provisions hereof and thereof have been duly authorized by all requisite action on the part of such Person and do not and will not (a) violate or conflict with, or result in a breach of, or require any consent under (i) the Constituent Documents of such Person (if such Person is not a natural person), (ii) any applicable Law, rule, or regulation or any order, writ, injunction, or decree of any Governmental Authority or arbitrator, or (iii) any agreement or instrument to which such Person is a party or by which it or any of its Properties is bound or subject which could reasonably be expected to have a Material Adverse Effect, or (b) constitute a default under any such agreement or instrument which could reasonably be expected to have a Material Adverse Effect, or result in the creation or imposition of any Lien upon any of the revenues or assets of such Person.

CREDIT AGREEMENT – Page 79

Section 5.4          Operation of Business. Each Loan Party and its Subsidiaries possesses all licenses, permits, consents, authorizations, franchises, patents, copyrights, trademarks, and trade names, or rights thereto, necessary to conduct its respective businesses substantially as now conducted and as presently proposed to be conducted, and no Loan Party or any of its Subsidiaries is in violation of any valid rights of others with respect to any of the foregoing which could reasonably be expected to have a Material Adverse Effect.

Section 5.5          Litigation and Judgments. Except as specifically disclosed in Schedule 5.5 as of the date hereof, there is no action, suit, investigation, or proceeding before or by any Governmental Authority or arbitrator pending, or to the knowledge of any Loan Party after a reasonable investigation, threatened against or affecting any Loan Party or any of its Subsidiaries or against any of their Properties that could, if adversely determined, reasonably be expected to have a Material Adverse Effect. As of the Closing Date, there are no outstanding judgments against any Loan Party or any of its Subsidiaries. Since the date hereof, there has been no adverse change in the status of any matter set forth on Schedule 5.5 that, taking into account the availability of any appeals, could reasonably be expected to increase materially the likelihood of a Material Adverse Effect resulting therefrom.

Section 5.6          Rights in Properties; Liens.

(a)         Each Loan Party and its Subsidiaries has good and indefeasible title to or valid leasehold interests in its respective Properties, including the Properties reflected in the financial statements described in Section 5.2, and none of the Properties of any Loan Party or any of its Subsidiaries is subject to any Lien, except Permitted Liens.

(b)        Schedule 5.6(b) sets forth a complete and accurate list of all real Property owned by each Loan Party and each of its Subsidiaries on the Closing Date, showing as of the date hereof the street address, county or other relevant jurisdiction, state and record owner thereof. Each Loan Party and each of its Subsidiaries has good, indefeasible and insurable fee simple title to the real Property owned by such Loan Party or such Subsidiary.

(c)        Schedule 5.6(c) sets forth a complete and accurate list of all Leases under which any Loan Party or any of its Subsidiaries is the lessee on the Closing Date, showing as of the date hereof the street address, county or other relevant jurisdiction, state, lessor, lessee, expiration date and annual rental cost thereof. Each such Lease is a legal, valid and binding obligation of the lessor thereof, enforceable in accordance with its terms, except as enforceability is limited by bankruptcy, insolvency, reorganization, moratorium or other applicable Laws relating to or affecting generally the enforcement of creditors’ rights and except to the extent that availability of the remedy of specific performance or injunctive relief is subject to the discretion of the court before which any proceeding therefor may be brought.

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Section 5.7          Enforceability. This Agreement constitutes, and the other Loan Documents to which any Loan Party is a party, when delivered, shall constitute legal, valid, and binding obligations of such Person, enforceable against such Person in accordance with their respective terms, except as limited by Debtor Relief Laws.

Section 5.8          Approvals. No authorization, approval, or consent of, and no filing or registration with, any Governmental Authority or third party (other than filings and registrations to perfect Liens) is or will be necessary for the execution, delivery, or performance by any Loan Party of this Agreement and the other Loan Documents to which such Person is or may become a party or the validity or enforceability thereof.

Section 5.9          Taxes. Each Loan Party and its Subsidiaries has filed on a timely basis all Tax Returns required to be filed, including all income, franchise, employment, Property, and sales Tax Returns. Each such Tax Return is true, correct and complete in all respects. Each Loan Party and its Subsidiaries has paid all of its respective liabilities for Taxes, assessments, governmental charges, and other levies that are due and payable (whether or not shown on any Tax Return), other than Taxes, if any, set forth on Schedule 5.9, the payment of which is being contested in good faith and by appropriate proceedings and reserves for the payment of which are being maintained in accordance with GAAP. Each Loan Party knows of no pending investigation of any Loan Party or any of its Subsidiaries by any taxing authority or of any pending but unassessed tax liability of any Loan Party or any of its Subsidiaries. No claim has ever been made or is expected to be made by any Governmental Authority in a jurisdiction where any Loan Party or its Subsidiaries does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. Each Loan Party and its Subsidiaries has not given or been requested to give waivers or extensions (or is or would be subject to a waiver or extension given by any other Person) of any statute of limitations relating to the payment of Taxes of each Loan Party or its Subsidiaries or for which each Loan Party or its Subsidiaries may be liable. No Loan Party or any Subsidiary thereof is, or has been party to any Tax sharing agreement, Tax allocation agreement, Tax indemnity obligation or similar written or unwritten agreement, arrangement, understanding or practice with respect to Taxes.

Section 5.10        Use of Proceeds; Margin Securities. The proceeds of the Revolving Credit Borrowings shall be used by Borrowers for working capital in the ordinary course of business, capital expenditures and other general corporate purposes. No Loan Party nor any of its Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulations T, U, or X of the Board of Governors of the Federal Reserve System), and no part of the proceeds of any Loan will be used to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying margin stock. No part of the proceeds of any Loan will be used directly or indirectly to fund any operations in, finance any investments or activities in or make any payments to, a Sanctioned Person, or in any other manner that will result in any violation by any Person (including any Lender, any Arranger or Administrative Agent) of any Anti-Terrorism Laws, Anti-Corruption Laws or any Sanctions.

Section 5.11        ERISA. Each Plan that is intended to qualify under Section 401(a) of the Code has received a favorable determination letter from the IRS or an application for such a letter is currently being processed by the IRS with respect thereto and, to the knowledge of each Loan Party, nothing has occurred which would prevent, or cause the loss of, such qualification. No application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made with respect to any Plan. There are no pending or, to the knowledge of any Loan Party, threatened claims, actions or lawsuits, or action by any Governmental Authority with respect to any Plan or Multiemployer Plan. There has been no Prohibited Transaction or violation of the fiduciary responsibility rules with respect to any Plan or Multiemployer Plan. No ERISA Event has occurred or is reasonably expected to occur. No Plan has any Unfunded Pension Liability. No Multiemployer Plan is insolvent within the meaning of Section 4245 of ERISA. No Loan Party or ERISA Affiliate has incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect to any Plan (other than premiums due and not delinquent under Section 4007 of ERISA). No Loan Party or ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such liability) under Section 4201 of ERISA with respect to a Multiemployer Plan. No Loan Party or ERISA Affiliate has engaged in a transaction that could be subject to Section 4069 or 4212(c) of ERISA.

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Section 5.12        Disclosure.

(a)         No statement, information, report, representation, or warranty made by any Loan Party in this Agreement or in any other Loan Document or furnished to Administrative Agent or any Lender in connection with this Agreement or any of the transactions contemplated hereby contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements herein or therein not misleading. There is no fact known to any Loan Party which could reasonably be expected to have a Material Adverse Effect, or which might in the future could reasonably be expected to have a Material Adverse Effect that has not been disclosed in writing to Administrative Agent and each Lender.

(b)         As of the Closing Date, the information included in the Beneficial Ownership Certification is true and correct in all respects.

Section 5.13         Subsidiaries. No Loan Party has any Subsidiaries other than those listed on Schedule 5.13 (and, if subsequent to the Closing Date, such additional Domestic Subsidiaries have been formed or acquired in compliance with Section 6.13(a)) and Schedule 5.13 sets forth the jurisdiction of incorporation or organization of each Subsidiary and the percentage of each Loan Party’s ownership interest in such Subsidiary. Schedule 5.13 also sets forth the name and jurisdiction of incorporation or organization of Parent and the percentage of Parent’s ownership interest in Company. All of the outstanding capital stock or other Equity Interests of Parent and each Subsidiary described on Schedule 5.13 have been validly issued, are fully paid, and are nonassessable. There are no outstanding subscriptions, options, warrants, calls, rights or other agreements or commitments of any nature relating to any Equity Interests of any Loan Party or any Subsidiary.

Section 5.14         Agreements. No Loan Party nor any of its Subsidiaries is a party to any indenture, loan, or credit agreement, or to any lease or other agreement or instrument, or subject to any charter or corporate or other organizational restriction, in each case which could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. No Loan Party nor any of its Subsidiaries is in default in any respect in the performance, observance, or fulfillment of any of the obligations, covenants, or conditions contained in any agreement or instrument material to its business to which it is a party which could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

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Section 5.15        Compliance with Laws. No Loan Party nor any of its Subsidiaries is in violation in any material respect of any Law, rule, regulation, order, or decree of any Governmental Authority or arbitrator.

Section 5.16        Inventory. All Inventory of each Loan Party and its Subsidiaries has been and will hereafter be produced or maintained in compliance with all applicable Laws, rules, regulations, and governmental standards, including, without limitation, the minimum wage and overtime provisions of the Fair Labor Standards Act (29 U.S.C. §§ 201-219).

Section 5.17        Regulated Entities. No Loan Party nor any of its Subsidiaries is (a) an “investment company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940 or (b) subject to regulation under any other federal or state statute, rule or regulation limiting its ability to incur Debt, pledge its assets or perform its obligations under the Loan Documents. No Loan Party is an EEA Financial Institution.

Section 5.18        Environmental Matters.

(a)         Each Loan Party and its Subsidiaries, and all of their respective Properties, assets, and operations, are in compliance with all Environmental Laws. No Loan Party is aware of, nor has any Loan Party received notice of, any past, present, or future conditions, events, activities, practices, or incidents which may interfere with or prevent the compliance or continued compliance of each Loan Party and its Subsidiaries with all Environmental Laws;

(b)        Each Loan Party and its Subsidiaries has obtained all permits, licenses, and authorizations that are required under applicable Environmental Laws, and all such permits are in good standing and each Loan Party and its Subsidiaries are in compliance with all of the terms and conditions of such permits;

(c)        No Hazardous Materials exist on, about, or within, or have been used, generated, stored, transported, disposed of on, or Released from, any of the Properties or assets of any Loan Party or any of its Subsidiaries in violation of, or in a manner or to a location that could give rise to liability under, any applicable Environmental Laws. The use which each Loan Party and its Subsidiaries make and intend to make of their respective Properties and assets will not result in the use, generation, storage, transportation, accumulation, disposal, or Release of any Hazardous Material on, in, or from any of their Properties or assets in violation of, or in a manner that could give rise to liability under, any applicable Environmental Laws;

(d)        No Loan Party or any of its Subsidiaries nor any of their respective currently or previously owned or leased Properties or operations is subject to any outstanding or threatened order from or agreement with any Governmental Authority or other Person or subject to any judicial or docketed administrative proceeding with respect to (i) any failure to comply with Environmental Laws, (ii) any Remedial Action, or (iii) any Environmental Liabilities arising from a Release or threatened Release;

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(e)         There are no conditions or circumstances associated with the currently or previously owned or leased Properties or operations of any Loan Party or any of its Subsidiaries that could reasonably be expected to give rise to any Environmental Liabilities;

(f)          No Loan Party nor any of its Subsidiaries is a treatment, storage, or disposal facility requiring a permit under the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq., regulations thereunder or any comparable provision of state Law. Each Loan Party and its Subsidiaries are in compliance with all applicable financial responsibility requirements of all Environmental Laws;

(g)         No Loan Party nor any of its Subsidiaries has filed or failed to file any notice required under applicable Environmental Law reporting a Release; and

(h)         No Lien arising under any Environmental Law has attached to any Property or revenues of any Loan Party or any of its Subsidiaries.

Section 5.19         Intellectual Property. Each Loan Party and each of its Subsidiaries owns, or is licensed to use, all Intellectual Property necessary to conduct its business as currently conducted except for such Intellectual Property the failure of which to own or license could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 5.20         Anti-Corruption Laws; Sanctions; Etc.

(a)          No Loan Party, Subsidiary, Affiliate of any Loan Party or, to the knowledge of any Loan Party, any director, officer, employee, agent, or Affiliate of a Loan Party or any of its Subsidiaries is an individual or entity (“person”) that is, or is owned or Controlled by persons that are: (i) the subject of any Sanctions, or (ii) located, organized or resident in a country or territory that is, or whose government is, the subject of Sanctions (including, Crimea, Cuba, Iran, North Korea, Sudan and Syria).

(b)          The Loan Parties, their Subsidiaries and their respective directors, officers and employees and, to the knowledge of the Loan Parties, the agents of the Loan Parties and their Subsidiaries, are in compliance with all applicable Sanctions and with the FCPA and any other applicable Anti-Corruption Law, in all material respects. Each Loan Party and its Subsidiaries have instituted and maintain policies and procedures designed to promote and achieve continued compliance with applicable Sanctions, the FCPA and any other applicable Anti-Corruption Laws.

Section 5.21         Patriot Act. The Loan Parties, each of their Subsidiaries, and each of their Affiliates are in compliance with (a) the Trading with the Enemy Act, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B Chapter V, as amended), and all other enabling legislation or executive order relating thereto, (b) the Patriot Act, and (c) all other federal or state Laws relating to “know your customer” (collectively, the “Anti-Terrorism Laws”).

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Section 5.22       Insurance. The Properties of each Loan Party and its Subsidiaries are insured with financially sound and reputable insurance companies not Affiliates of any Loan Party, in such amounts (after giving effect to any self-insurance compatible with the following standards), with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar Properties in localities where such Loan Party or the applicable Subsidiary operates.

Section 5.23       Solvency. After giving effect to the transactions contemplated hereby (including each Credit Extension hereunder), (a) the aggregate assets (after giving effect to amounts that could reasonably be received by reason of indemnity, offset, insurance or any similar arrangement), at a fair valuation, of the Loan Parties, taken as a whole, will exceed the aggregate liabilities of the Loan Parties on a consolidated basis, as their liabilities become absolute and mature, (b) each of the Loan Parties will not have incurred or intended to incur, and will not believe that it will incur, liabilities beyond its ability to pay such liabilities (after taking into account the timing and amounts of cash to be received by each of the Loan Parties and the amounts to be payable on or in respect of its liabilities, and giving effect to amounts that could reasonably be received by reason of indemnity, offset, insurance or any similar arrangement) as such liabilities become absolute and mature, and (c) each of the Loan Parties will not have (and will have no reason to believe that it will have thereafter) unreasonably small capital for the conduct of its business.

Section 5.24       Security Documents. The provisions of the Security Documents are effective to create in favor of Administrative Agent for the benefit of the Secured Parties a legal, valid and enforceable Lien (subject to Permitted Liens) on all right, title and interest of the respective Loan Parties party thereto in the Collateral. Except for filings completed prior to the Closing Date and as contemplated hereby and by the Security Documents, no filing or other action will be necessary to perfect such Liens in Collateral.

Section 5.25       Labor Matters. There are no labor controversies pending, or to the best knowledge of any Loan Party, threatened against any Loan Party or any of its Subsidiaries which could reasonably be expected to have a Material Adverse Effect.

Section 5.26       Material Agreements. Schedule 5.26 sets forth a complete and correct list of all agreements in effect or to be in effect on the Closing Date and on the date of each update thereof required hereunder, to the extent that a default, breach, termination or other impairment thereof could reasonably be expected to have a Material Adverse Effect.

Section 5.27       Additional Representations of Guarantors. Each Guarantor (a) has received, or will receive, direct or indirect benefit from the making of the Guaranty and the Obligations, and (b) is familiar with, and has independently reviewed the books and records regarding, the financial condition of Borrowers and is familiar with the value of any and all Collateral intended to be created as security for the payment of the Obligations, but such Guarantor is not relying on such financial condition, such Collateral, or the agreement of any other party as an inducement to enter into this Agreement and provide the Guaranty. Each Guarantor confirms that neither Administrative Agent, any Lender, any other Guarantor, nor any other party has made any representation, warranty or statement to such Guarantor in order to induce such Guarantor to execute this Agreement and provide the Guaranty.

Section 5.28       Qualified ECP Guarantor. Each Borrower is a Qualified ECP Guarantor.

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ARTICLE 6.

AFFIRMATIVE COVENANTS

Each Loan Party covenants and agrees that, as long as the Obligations or any part thereof are outstanding or any Letter of Credit shall remain outstanding or any Lender has any Commitment hereunder:

Section 6.1             Reporting Requirements. Borrowers will furnish, or cause to be furnished, to Administrative Agent (with copies for each Lender upon Administrative Agent’s request):

(a)           Annual Financial Statements. As soon as available, and in any event within one hundred twenty (120) days (or one hundred fifty (150) days in the case of the fiscal year ending December 31, 2018) after the last day of each fiscal year of Company, beginning with the fiscal year ending December 31, 2018, a copy of the annual audit report of Company and its Subsidiaries for such fiscal year containing, on a consolidated basis, balance sheets and statements of income, retained earnings, and cash flow as of the end of such fiscal year and for the twelve (12)-month period then ended, in each case setting forth in comparative form the figures for the preceding fiscal year, all in reasonable detail and audited and certified by independent certified public accountants of recognized standing acceptable to Administrative Agent, to the effect that such report has been prepared in accordance with GAAP and containing no material qualifications or limitations on scope;

(b)            Monthly Financial Statements. As soon as available, and in any event within thirty (30) days after the last day of each fiscal month, a copy of an unaudited financial report of Company and its Subsidiaries as of the end of such month and for the portion of the fiscal year then ended, containing, on a consolidated basis, respectively, balance sheets and statements of income, retained earnings, and cash flow, in each case setting forth in comparative form and figures for the corresponding period of the preceding fiscal year, all in reasonable detail certified by a Responsible Officer of Company to have been prepared in accordance with GAAP and to fairly and accurately present (subject to year-end audit adjustments) the financial condition and results of operations of Company and its Subsidiaries, on a consolidated basis, as of the dates and for the periods indicated therein;

(c)          Borrowing Base Report. As soon as available (or contemporaneously with a Disposition of Generator Packages or Generator Units pursuant to Section 7.8(f)), and in any event within twenty (20) days after the last day of each fiscal month, a Borrowing Base Report, calculating the Borrowing Base and reflecting the components of the Borrowing Base, including (i) Eligible Accounts of each of the Borrowers as of the end of the preceding month and calculating the advance amounts based thereon, together with the Account Agings, (ii) Eligible Inventory, Eligible Generator Units and Eligible New Generator Units of each of the Borrowers as of the end of the preceding month and calculating the advance amounts based thereon and (iii) such worksheets detailing the Accounts excluded from Eligible Accounts and Inventory (including Generator Units) excluded from Eligible Inventory, Eligible Generator Units and Eligible New Generator Units, as the case may be, and the reason for such exclusion; provided that if a Trigger Period is in effect, a Borrowing Base Report and related documentation shall be due on or before the third (3^rd) Business Day of each week (or contemporaneously with a Disposition of Generator Packages or Generator Units pursuant to Section 7.8(f) during a Trigger Period) calculating the Borrowing Base and reflecting the Eligible Accounts, Eligible Inventory, Eligible Generator Units and Eligible New Generator Units of each of the Borrowers as of the end of the preceding week and calculating the advance amounts based thereon. Such report shall also reflect the amount of sales and receipts of Borrowers during the preceding period and such other information as Administrative Agent may reasonably request;

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(d)           Compliance Certificate. Concurrently with the delivery of each of the financial statements referred to in Section 6.1(a) and each of the financial statements delivered for the last month of each fiscal quarter pursuant to Section 6.1(b), a Compliance Certificate (i) certifying, in the case of the financial statements delivered under Sections 6.1(a) and 6.1(b), as applicable, that such statements present fairly in all material respects the financial condition and results of operations of Company and its Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year end audit adjustments and the absence of footnotes, (ii) stating that to the best of the knowledge of the Responsible Officer executing same, no Default has occurred and is continuing, or if a Default has occurred and is continuing, a statement as to the nature thereof and the action which is proposed to be taken with respect thereto, (iii) showing in reasonable detail the calculations demonstrating compliance with the covenants set forth in Article 8 and calculation of the Leverage Ratio for purposes of calculating the Applicable Margin, (iv) stating whether any change in GAAP or in the application thereof has occurred since the date of the audited financial statements most recently delivered pursuant to Section 6.1(a) above and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate and (v) containing such other certifications set forth therein. For any financial statements delivered electronically by a Responsible Officer in satisfaction of the reporting requirements set forth in clause (a) or (b) preceding that are not accompanied by the required Compliance Certificate, that Responsible Officer shall nevertheless be deemed to have certified the factual matters described in this clause (d) with respect to such financial statements; however, such deemed certificate shall not excuse or be construed as a waiver of Company’s obligation to deliver the required Compliance Certificate;

(e)            Projections. Commencing with respect to the fiscal year ending December 31, 2019, as soon as available, but in any event not earlier than thirty (30) days before and not later than thirty (30) days after the end of each fiscal year of Company, forecasts prepared by management of Company, in form and substance satisfactory to Administrative Agent, of consolidated balance sheets of income or operations and cash flows of Company and its Subsidiaries on a monthly basis for the immediately following fiscal year;

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(f)        Notice of Litigation. Promptly after the commencement thereof, notice of all actions, suits, and proceedings before any Governmental Authority or arbitrator affecting any Loan Party or any of its Subsidiaries which, if determined adversely to such Loan Party or such Subsidiary, could reasonably be expected to have a Material Adverse Effect;

(g)           Notice of Default. As soon as possible and in any event within five (5) days after the occurrence of any Default, a written notice setting forth the details of such Default and the action that the applicable Loan Party has taken and proposes to take with respect thereto;

(h)           ERISA Reports. Promptly after the filing or receipt thereof, copies of all reports, including annual reports, and notices which any Loan Party or ERISA Affiliate files with or receives from the PBGC, the IRS, or the U.S. Department of Labor under ERISA; as soon as possible and in any event within five (5) days after any Loan Party or any ERISA Affiliate knows or has reason to know that any ERISA Event or Prohibited Transaction has occurred with respect to any Plan or Multiemployer Plan, a certificate of the chief financial officer or other Responsible Officer of the applicable Loan Party setting forth the details as to such ERISA Event or Prohibited Transaction and the action that the applicable Loan Party proposes to take with respect thereto; annually, a copy of the notice described in Section 101(f) of ERISA that any Loan Party or ERISA Affiliate files or receives with respect to a Plan or Multiemployer Plan;

(i)            Updates to Security Document Schedules. Upon Administrative Agent’s request, at the time of delivery of the Compliance Certificate delivered in connection with the financial statements pursuant to Sections 6.1(a) and 6.1(b), updates to all Schedules to the Security Documents to the extent that information contained in such Schedules has become inaccurate or incomplete since delivery thereof and such Schedules are required to be updated from time to time pursuant to the terms of the applicable Security Document;

(j)         Insurance. Upon Administrative Agent’s request, at the time of delivery of the Compliance Certificate delivered in connection with the annual financial statements pursuant to Section 6.1(a), a report summarizing the insurance coverage (specifying type, amount and carrier) in effect for each Loan Party and its Subsidiaries and containing such additional information as Administrative Agent, or any Lender through Administrative Agent, may reasonably specify;

(k)        Notice of Material Adverse Effect. As soon as possible and in any event within five (5) days after the occurrence thereof, written notice of any event or circumstance that could reasonably be expected to have a Material Adverse Effect;

(l)         Account Agings. As soon as available and in any event within twenty (20) days (or earlier if a Trigger Period is in effect or if deemed necessary by Administrative Agent in its sole discretion) after the end of each fiscal month, consolidated and consolidating agings of all accounts payable and accounts receivable of the Borrowers (the “Account Agings”) showing each such account which is current and each such account which is thirty (30), sixty (60), ninety (90), and over ninety (90) days past invoice date and, with respect to accounts receivable, reconciling such aging with the Borrowing Base Reports;

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(m)           Inventory Report(s). As soon as available and in any event within twenty (20) days after the end of each calendar month (or earlier if a Trigger Period is in effect or if deemed necessary by Administrative Agent in its sole discretion), an Inventory perpetual report for the Borrowers and a schedule that lists Inventory (including Generator Units) by item, quantity, cost, location, customer, utilization, leased or rented out or held for lease or rent, appraised or not appraised in most recent appraisal, and eligible or ineligible as Eligible Inventory;

(n)           Monthly Customer Statements. If requested by Administrative Agent, as soon as available and in any event within twenty (20) days (or earlier to the extent available and a Trigger Period is then in effect) after the end of each fiscal month, monthly customer statements of the Borrowers;

(o)         Notice of Certain Changes. Promptly, (i) notice of any change in the business conducted by any Loan Party or any of its Subsidiaries, (ii) copies of any amendment, restatement, supplement or other modification to any of the Constituent Documents of any Loan Party or any of its Subsidiaries and (iii) notice of any change in the information provided in the Beneficial Ownership Certification that would result in a change to the list of beneficial owners identified in parts (c) or (d) of such certification;

(p)          Management Letters. Promptly upon receipt thereof, a copy of any management letter or written report submitted to Company or any of its Subsidiaries by independent certified public accountants with respect to the business, condition (financial or otherwise), operations, prospects, or Properties of Company or any of its Subsidiaries;

(q)          General Information. Promptly, such other information concerning any Loan Party, any of its Subsidiaries or any of their respective Properties as Administrative Agent, or any Lender through Administrative Agent, may from time to time request, including, without limitation, any certification or other evidence Administrative Agent requests in order for it to (i) comply with any applicable federal or state Laws or regulations (including, but not limited to, information about the ownership and management of any Loan Party), (ii) confirm compliance by any Loan Party with all Anti-Terrorism Laws, and (iii) confirm that no Loan Party (nor any Person owning any interest of any nature whatsoever in any Loan Party) is a Sanctioned Person; and

(r)       Additional Information. If requested by Administrative Agent, (i) cash receipt journals or copies of checks, invoices for new billings, sales journals and backup for all miscellaneous credits and debits, purchases journals and cost of goods sold reports and inventory reports, which support a Borrowing Base report, (ii) a schedule detailing each Borrower’s Inventory, in form satisfactory to Administrative Agent, (A) by location (showing Inventory in transit and any Inventory located with a third party under any consignment, bailee arrangement or warehouse agreement), by product type (including Generator Units), and by volume on hand, which Inventory shall be valued at the lower of cost or market (which approximates cost) and adjusted for Availability Reserves as Administrative Agent has previously indicated to the Borrowers are deemed by Administrative Agent to be appropriate, and (B) including a report of any variances or other results of Inventory counts performed by the Borrowers since the last Inventory schedule (including information regarding sales or other reductions, additions, returns, credits issued by the Borrowers and complaints and claims made against any Borrower) and (iii) a status report regarding each uptime energy, servicing or lease agreement covering any Generator Unit, including whether such uptime energy, servicing or lease agreement has been amended, restated, modified or terminated during such period and delivering a copy of any new uptime energy, servicing or lease agreement or any amendment, modification or termination of any uptime energy, servicing or lease agreement.

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All representations and warranties set forth in the Loan Documents with respect to any financial information concerning any Loan Party shall apply to all financial information delivered to Administrative Agent by such Loan Party, or any Person purporting to be a Responsible Officer of such Loan Party or other representative of such Loan Party regardless of the method of such transmission to Administrative Agent or whether or not signed by such Loan Party, or such Responsible Officer or other representative, as applicable.

Section 6.2          Maintenance of Existence; Conduct of Business. Each Loan Party shall, and shall cause each of its Subsidiaries to, preserve and maintain its existence and all of its leases, privileges, licenses, permits, franchises, qualifications, and rights that are necessary or desirable in the ordinary conduct of its business, except to the extent a failure to so preserve and maintain could not reasonably be expected to have a Material Adverse Effect. Each Loan Party shall, and shall cause each of its Subsidiaries to, conduct its business in an orderly and efficient manner in accordance with good business practices.

Section 6.3           Maintenance of Properties. Each Loan Party shall, and shall cause each of its Subsidiaries to, maintain, keep, and preserve all of its Properties (tangible and intangible) necessary or useful in the proper conduct of its business in good working order and condition (reasonable wear and tear excepted).

Section 6.4            Taxes and Claims. Each Loan Party shall, and shall cause each of its Subsidiaries to, pay or discharge at or before maturity or before becoming delinquent (a) all Taxes, levies, assessments, and governmental charges imposed on it or its income or profits or any of its Property, and (b) all lawful claims for labor, material, and supplies, which, if unpaid, might become a Lien upon any of its Property; provided, however, that no Loan Party nor any of its Subsidiaries shall be required to pay or discharge any Tax, levy, assessment, or governmental charge which is being contested in good faith by appropriate proceedings diligently pursued, and for which adequate reserves in accordance with GAAP have been established.

Section 6.5        Insurance. Each Loan Party shall, and shall cause each of its Subsidiaries (other than the Excluded Subsidiary) to, maintain insurance with financially sound and reputable insurance companies satisfactory to Administrative Agent in such amounts and covering such risks as is usually carried by companies engaged in similar businesses and owning similar Properties in the same general areas in which such Loan Party and its Subsidiaries operate, provided that in any event each Loan Party will maintain and cause each of its Subsidiaries to maintain workmen’s compensation insurance, property insurance and comprehensive general liability insurance with coverage amounts and deductibles reasonably satisfactory to Administrative Agent. Each insurance policy shall name Administrative Agent as lender loss payee or additional insured, as applicable, and each such insurance policy shall provide that such policy will not be cancelled or reduced without 30 days’ prior written notice to Administrative Agent (or 10 days in the case of nonpayment of premium).

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Section 6.6               Inspection Rights; Field Examinations; Appraisals.

(a)         Each Loan Party shall, and shall cause each of its Subsidiaries to, permit representatives and independent contractors of Administrative Agent and each Lender (i) to examine, inspect, review, evaluate and make physical verifications of the Inventory (including Generator Units) and other Collateral in any manner and through any medium that Administrative Agent or such Lender considers advisable, (ii) to visit and inspect its Properties, (iii) to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom and (iv) to discuss its affairs, business, operations, financial condition and accounts with its directors, officers, employees and independent certified public accountants, all at the expense of Borrowers and at such reasonable times during normal business hours and as often as may be reasonably requested; provided that, other than with respect to such visits and inspections during the continuance of an Event of Default, (A) only Administrative Agent on behalf of the Lenders may exercise rights under this clause (a) and (B) subject to Section 6.6(c), Administrative Agent shall not exercise such rights more often than one time during any period of twelve (12) consecutive months; provided, further, that when an Event of Default exists Administrative Agent or any Lender (or any of their respective representatives or independent contractors) may do any of the foregoing under this Section at the expense of Borrowers and at any time during normal business hours and without advance notice.

(b)            Each Loan Party shall, and shall cause each of its Subsidiaries to, permit any representatives designated by Administrative Agent (including any consultants, accountants, lawyers and appraisers retained by Administrative Agent) to conduct field exams of the Accounts of the Loan Parties all at the expense of Borrowers and at such reasonable times; provided that Borrowers shall not be required to pay for more than one such field exam in any period of twelve (12) consecutive months unless an Event of Default has occurred and is continuing (in which case any limit of the number of field exams Administrative Agent may conduct shall not apply and any such field exams conducted when an Event of Default has occurred and is continuing shall be at the sole cost and expense of Borrowers).

(c)            Each Loan Party shall, and shall cause each of its Subsidiaries to, permit any representatives designated by Administrative Agent (including any consultants, accountants, lawyers and appraisers retained by Administrative Agent) to conduct third- party appraisals or updates thereof of the Inventory (including Generator Units) owned by the Loan Parties, all at the expense of Borrowers and at such reasonable times; provided that Borrowers shall not be required to pay for more than two such third-party appraisals in any period of twelve (12) consecutive months unless an Event of Default has occurred and is continuing (in which case any such third-party appraisal conducted when an Event of Default has occurred and is continuing shall be at the sole cost and expense of Borrowers).

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Section 6.7          Keeping Books and Records. Each Loan Party shall, and shall cause each of its Subsidiaries to, maintain proper books of record and account in which full, true, and correct entries in conformity with GAAP shall be made of all dealings and transactions in relation to its business and activities.

Section 6.8          Compliance with Laws. Each Loan Party shall, and shall cause each of its Subsidiaries to, comply in all material respects with all applicable Laws (including, without limitation, all Anti-Terrorism Laws, Anti-Corruption Laws and applicable Sanctions) and decrees of any Governmental Authority or arbitrator.

Section 6.9          Compliance with Agreements. Each Loan Party shall, and shall cause each of its Subsidiaries to, comply in all material respects with all agreements, contracts, and instruments binding on it or affecting its Properties or business, except to the extent a failure to so comply could not reasonably be expected to have a Material Adverse Effect.

Section 6.10        Further Assurances. Each Loan Party shall, and shall cause each of its Subsidiaries and each other Loan Party to, execute and deliver such further agreements and instruments and take such further action as may be reasonably requested by Administrative Agent or any Lender to carry out the provisions and purposes of this Agreement and the other Loan Documents and to create, preserve, and perfect the Liens of Administrative Agent in the Collateral.

Section 6.11        ERISA. Each Loan Party shall, and shall cause each of its Subsidiaries to, comply with all minimum funding requirements, and all other material requirements, of ERISA and the Code, if applicable, so as not to give rise to any liability thereunder.

Section 6.12        Depository Relationship; Control Agreements; Blocked Accounts. Within sixty (60) days after the Closing Date (or such longer period as agreed to by Administrative Agent in its sole discretion), each Loan Party shall, and shall cause each of its Subsidiaries (other than the Excluded Subsidiary) to, (a) use the financial institution serving as Administrative Agent as its principal depository bank, including for the maintenance of business, cash management, operating and administrative deposit accounts, (b) cause all commodity accounts, deposit accounts and securities accounts (in each case, excluding those accounts which are Excluded Accounts) to be subject to a Control Agreement in favor of Administrative Agent, in form and substance reasonably satisfactory to Administrative Agent, which provides that Administrative Agent shall have exclusive “Control” (as defined in the UCC) of such account and (c) will cause all collection and other Receipts to be directed to Blocked Accounts in accordance with Section 2.11. Loan Parties will at all times maintain Blocked Accounts required by Section 2.11.

Section 6.13        Additional Loan Parties; Additional Collateral.

(a)         Each Loan Party shall notify Administrative Agent at the time that any Person becomes a Domestic Subsidiary of such Loan Party, and promptly thereafter (and in any event within thirty (30) days (or such longer period as agreed to by Administrative Agent in its sole discretion)) (i) execute and deliver or cause to be delivered to Administrative Agent all Security Documents, stock certificates, stock powers and other agreements and instruments as may be requested by Administrative Agent to ensure that Administrative Agent has a perfected Lien on all ownership interests (other than Excluded Assets) held by such Loan Party in such Subsidiary, and (ii) cause such new Domestic Subsidiary to (A) become a Guarantor and/or a Borrower by executing and delivering to Administrative Agent a Guaranty (or a joinder to Guaranty) and/or a Joinder Agreement, (B) execute and deliver all Security Documents (or joinders or assumptions thereto) requested by Administrative Agent pledging to Administrative Agent for the benefit of the Secured Parties all of its Property (other than Excluded Assets or such other exceptions as Administrative Agent may permit) and take all actions required by Administrative Agent to grant to Administrative Agent for the benefit of Secured Parties a perfected first priority (subject to Permitted Liens) security interest in such Property, including the filing of UCC financing statements in such jurisdictions as may be requested by Administrative Agent, and (C) deliver to Administrative Agent such other documents and instruments as Administrative Agent may require, including appropriate favorable opinions of counsel to such Person in form, content and scope reasonably satisfactory to Administrative Agent.

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(b)           Company will at all times cause Parent or any other holder of the direct Equity Interests in Company to be a party to the Parent Pledge Agreement and pledge 100% of the Equity Interests in Company that such Person owns (including, to the extent such Equity Interests are certificated, delivery of original stock certificates evidencing such Equity Interests, together with an appropriate undated membership power for each certificate duly executed in blank by the registered owner thereof).

(c)         Subject to clause (ii) below, each Loan Party will cause (i) 100% of the issued and outstanding Equity Interests of each of its Domestic Subsidiaries and (ii) (A) 65% (or such greater percentage that (x) would not reasonably be expected to cause the undistributed earnings of the Excluded Subsidiary (so long as the Excluded Subsidiary constitutes a CFC) as determined for U.S. federal income tax purposes to be treated as a deemed dividend to the Excluded Subsidiary’s U.S. parent and (y) would not reasonably be expected to cause any adverse tax consequences) of the issued and outstanding Equity Interests entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and (B) 100% of the issued and outstanding Equity Interests not entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) in the Excluded Subsidiary, in each case, to be subject at all times to a first priority, perfected Lien in favor of the Administrative Agent, for the benefit of the Administrative Agent and the other Secured Parties, pursuant to the terms and conditions of the Loan Documents or other Security Documents as Administrative Agent shall reasonably request.

Section 6.14          Inventory; Collateral Access Agreements. If any Loan Party’s Inventory is located at a location leased by such Loan Party or in the possession or control of any Person (other than a customer of such Loan Party), the Borrower Representative shall notify the landlord or such Person, as applicable, of Administrative Agent’s security interest therein and, upon request by Administrative Agent, instruct such Person to execute a Collateral Access Agreement or otherwise acknowledge in writing its agreement to hold all such Inventory for the benefit of Administrative Agent and subject to Administrative Agent’s instructions; provided that if the Borrower Representative is unable to have such Person execute a Collateral Access Agreement, then such failure shall not constitute a Default or Event of Default under this Agreement, but Administrative Agent may establish a Rent Reserve. If so requested by Administrative Agent, the Borrower Representative and such other Loan Parties (as promptly as possible after requested by Administrative Agent but in any event within five (5) Business Days after any such request is made) will deliver (i) to Administrative Agent warehouse receipts covering any Loan Party’s Inventory located in warehouses showing Administrative Agent as the beneficiary thereof and (ii) to the warehouseman such agreements relating to the release of warehouse Inventory as Administrative Agent may reasonably request.

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Section 6.15         Certificates of Title. The Loan Parties shall cause Administrative Agent to be named as lienholder (a) on all of its Generator Units that are evidenced by a certificate of title on the Closing Date and (b) on all of its New Generator Units acquired after the Closing Date that are evidenced by a certificate of title, in each case, in accordance with Section 4.3(d) of the Security Agreement.

Section 6.16         Sanctions; Anti-Corruption Laws. Each Loan Party will maintain in effect policies and procedures designed to promote compliance by such Loan Party, its Subsidiaries, and their respective directors, officers, employees, and agents with applicable Sanctions and with the FCPA and any other applicable Anti-Corruption Laws.

Section 6.17         Post-Closing Obligations.

(a)          Within thirty (30) days following the Closing Date (or such longer period as agreed to by the Administrative Agent in its sole discretion), the Loan Parties shall deliver (or cause to be delivered) to the Administrative Agent copies of all lender loss payable and additional insured endorsements with respect to the insurance policies required pursuant to Section 6.5.

(b)          Within thirty (30) days following the Closing Date (or such longer period as agreed to by the Administrative Agent in its sole discretion), the Loan Parties shall deliver (or cause to be delivered) to the Administrative Agent (i) Certificate No. 2AC issued to Flex Power Co. evidencing 65 shares of Class A Common Shares of the Excluded Subsidiary and (ii) an undated stock power executed in blank by a Responsible Officer of Flex Power Co. with respect to such stock certificate.

For the avoidance of doubt, the Loan Parties’ failure to comply with any requirement of this Section 6.17 on or before the dates specified in this Section 6.17 shall constitute an immediate Event of Default.

ARTICLE 7.

NEGATIVE COVENANTS

Each Loan Party covenants and agrees that, as long as the Obligations or any part thereof are outstanding or any Letter of Credit is outstanding or any Lender has any Commitment hereunder:

Section 7.1           Debt. Each Loan Party shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, incur, create, assume, or permit to exist any Debt, except:

(a)          the Obligations (other than Hedge Obligations);

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(b)          existing Debt described on Schedule 7.1;

(c)          purchase money Debt and Capitalized Lease Obligations not to exceed $2,500,000 in the aggregate at any time outstanding;

(d)          (i) Debt of any Loan Party owing to any other Loan Party, (ii) Debt of any Subsidiary that is not a Guarantor owing to any other Subsidiary that is not a Guarantor, and (iii) Debt of any Subsidiary that is not a Guarantor owing to any Loan Party that is permitted under Section 7.5;

(e)          Debt owed to any Person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance, performance, bid, surety or appeal bonds, performance and completion guarantees and similar obligations, pursuant to reimbursement or indemnification obligations to such Person, in each case incurred in the ordinary course of business;

(f)           endorsements of negotiable or similar instruments for collection or deposit in the ordinary course of business;

(g)          with respect to any Debt permitted to be incurred pursuant to this Section 7.1, guaranties of such Debt or guaranties by any Loan Party or any of its Subsidiaries of such Debt;

(h)          Debt incurred in the ordinary course of business owed to any Person providing property, casualty, liability, or other insurance to the Loan Parties, including to finance insurance premiums, so long as the amount of such Debt is not in excess of the amount of the unpaid cost of, and shall be incurred only to defer the cost of, such;

(i)           Hedge Obligations existing or arising under Hedge Agreements permitted by Section 7.17; and

(j)           other Debt not to exceed $2,500,000 in the aggregate at any time outstanding.

Section 7.2            Limitation on Liens. Each Loan Party shall not, and shall not permit any of its Subsidiaries to, incur, create, assume, or permit to exist any Lien upon any of its Property, assets, or revenues, whether now owned or hereafter acquired, except:

(a)          existing Liens disclosed on Schedule 7.2;

(b)          Liens in favor of the Secured Parties or Administrative Agent for the benefit of Secured Parties;

(c)          encumbrances consisting of minor easements, zoning restrictions, or other restrictions on the use of real Property that do not (individually or in the aggregate) materially affect the value of the assets encumbered thereby or materially impair the ability of any Loan Party or its Subsidiaries to use such assets in their respective businesses, and none of which is violated in any material respect by existing or proposed structures or land use;

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(d)          Liens for taxes, assessments, or other governmental charges which are not delinquent or which are being contested in good faith and for which adequate reserves in accordance with GAAP have been established and for which such contest operates to suspend the enforcement of any foreclosure or levy on any Property of each Loan Party or any of its Subsidiary;

(e)          Liens of landlords, vendors, mechanics, materialmen, warehousemen, carriers, or other similar statutory Liens securing obligations incurred in the ordinary course of business that are not yet due or which are being contested in good faith and for which adequate reserves in accordance with GAAP have been established and for which such contest operates to suspend the enforcement of any foreclosure or levy on any Property of each Loan Party or any of its Subsidiaries;

(f)           Liens resulting from good faith deposits to secure payments of workmen’s compensation, unemployment insurance or other social security programs (other than Liens imposed by ERISA) or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, contracts (other than for payment of Debt), or leases made in the ordinary course of business;

(g)          normal and customary rights of setoff upon deposits in favor of depository institutions, and Liens of a collecting bank on payment items in the course of collection;

(h)          purported Liens evidenced by the filing of precautionary UCC financing statements relating solely to operating leases or consignments of personal property entered into in the ordinary course of business;

(i)           Liens granted in the ordinary course of business on the unearned portion of insurance premiums securing the financing of insurance premiums to the extent the financing is permitted under Section 7.1(h);

(j)            purchase money Liens on specific Property to secure Debt used to acquire such Property and Liens securing Capitalized Lease Obligations with respect to specific leased Property, in each case to the extent permitted in Section 7.1(c);

(k)            Liens granted by the Loan Parties on certain Property specified in each of the Parent Loan Notes to secure the Parent Loan, provided that such Liens (i) are subordinate to the Liens in favor of Administrative Agent securing the Obligations and (ii) are at all time subject to the Intercreditor Agreement; and

(l)            other Liens securing Debt not to exceed $500,000 in the aggregate at any time outstanding.

Section 7.3           Mergers, Etc. Each Loan Party shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, become a party to a division, merger or consolidation, or purchase or otherwise acquire all or substantially all of the assets of any Person or any shares or other evidence of beneficial ownership of any Person, or wind-up, dissolve, or liquidate, except that (a) any Subsidiary of Company may merge or consolidate with any Borrower so long as such Borrower is the surviving entity, (b) any Subsidiary of Company may merge or consolidate with another Subsidiary so long as if such Subsidiary that is a Guarantor is involved in such merger or consolidation, such Guarantor is the surviving entity and (c) any Person may merge or consolidate with or into any Loan Party provided such Loan Party shall be the surviving entity.

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Section 7.4           Restricted Payments. Each Loan Party shall not, nor shall it permit any of its Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except:

(a)          each Loan Party may make Restricted Payments with respect to its Equity Interests payable solely in additional shares of its Equity Interests (other than Disqualified Equity Interests);

(b)          Subsidiaries may declare and pay dividends and other Restricted Payments, directly or indirectly, to Company and any other Subsidiary of Company that is a Loan Party;

(c)          so long as no Default or Event of Default or exists or would result therefrom, to the extent Parent is treated as a flow-through entity for federal income tax purposes, the Loan Parties and their Subsidiaries may make Permitted Tax Distributions;

(d)          on or prior to December 31, 2019, the Loan Parties and their Subsidiaries may make Restricted Payments to Parent in an aggregate amount not to exceed $10,000,000 solely to permit Parent to make payments of the Parent Loan under the Parent Loan Documents and so long as the Payment Conditions have been satisfied at the time such Restricted Payment is made; and

(e)          commencing January 1, 2020, the Loan Parties and their Subsidiaries may make other Restricted Payments so long as the Payment Conditions have been satisfied at the time such Restricted Payment is made.

Section 7.5            Loans and Investments. Each Loan Party shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, make, hold or maintain, any advance, loan, extension of credit, or capital contribution to or investment in, or purchase any stock, bonds, notes, debentures, or other securities of, any Person, except:

(a)          existing investments described on Schedule 7.5;

(b)          readily marketable direct obligations of the U.S. or any agency thereof with maturities of one (1) year or less from the date of acquisition;

(c)          fully insured certificates of deposit with maturities of one (1) year or less from the date of acquisition issued by either (i) any commercial bank operating in the U.S. having capital and surplus in excess of $50,000,000 or (ii) any Lender;

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(d)          commercial paper of a domestic issuer if at the time of purchase such paper is rated in one (1) of the two (2) highest rating categories of Standard and Poor’s Corporation or Moody’s Investors Service;

(e)          investments by a Borrower or a Guarantor in another Borrower or Guarantor;

(f)           investments consisting of Hedge Agreements permitted under Section 7.17;

(g)          advances or extensions of credit in the form of accounts receivable incurred and trade credit extended in the ordinary course of business;

(h)          investments in securities of account debtors received pursuant to any settlement, restructuring, plan of reorganization or similar arrangement in connection with a foreclosure, bankruptcy workout or otherwise with respect to such account debtors, or upon the foreclosure or enforcement of any Lien on such securities arising in the ordinary course of business in favor of a Loan Party or its Subsidiaries;

(i)           loans or advances made by a Loan Party to its employees for travel and entertainment expenses, relocation costs and similar purposes up to a maximum of $250,000 in the aggregate at any one time outstanding or, on a non-cash basis, for the purchase of Equity Interests in any Loan Party or any direct or indirect parent thereof; and

(j)           other investments so long as (i) no Event of Default shall have occurred and be continuing at the time of making such investment and immediately after giving effect thereto and (ii) the aggregate amount of all such investments under this clause (j) shall not exceed $2,000,000 at any time.

Section 7.6           Limitation on Issuance of Equity. Each Loan Party shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, issue, sell, assign, or otherwise Dispose of (a) any of its stock or other Equity Interests, (b) any securities exchangeable for or convertible into or carrying any rights to acquire any of its stock or other Equity Interests, (c) any option, warrant, or other right to acquire any of its stock or other Equity Interests or (d) any Disqualified Equity Interests, in each case, other than to any Loan Party or another Subsidiary.

Section 7.7           Transactions With Affiliates. Except with respect to the making of Restricted Payments permitted by Section 7.4, Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, enter into any transaction, including, without limitation, the purchase, sale, or exchange of Property, the rendering of any service or the payment of any management, advisory or similar fees, with any Affiliate of Company or such Subsidiary, except in the ordinary course of and pursuant to the reasonable requirements of Company’s or such Subsidiary’s business, pursuant to a transaction which is otherwise expressly permitted under this Agreement, and upon fair and reasonable terms no less favorable to Company or such Subsidiary than would be obtained in a comparable arm’s-length transaction with a Person not an Affiliate of Company or such Subsidiary.

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Section 7.8           Disposition of Assets. Each Loan Party shall not, and shall not permit any of its Subsidiaries to, directly or indirectly make any Disposition, except (a) Dispositions of Inventory in the ordinary course of business, (b) Dispositions, for fair value, of worn-out, surplus and obsolete equipment not necessary or useful to the conduct of business, (c) Dispositions of Equity Interests permitted by Section 7.6, (d) Dispositions of Property to any Loan Party or any Subsidiary, provided that any such Disposition involving a Subsidiary that is not a Loan Party shall be made in compliance with Sections 7.5 or 7.6, (e) the unwinding of any Hedge Agreement, (f) Dispositions of Generator Packages or Generator Units not to exceed $8,000,000 in the aggregate in any fiscal year; provided that (i) no Default or Event of Default shall have occurred and be continuing both before and after giving effect to such Disposition, (ii) Borrowers shall concurrently with such Disposition deliver a pro forma Borrowing Base Report to Administrative Agent giving effect to such Disposition (with such Disposition, for the avoidance of doubt, calculated based on the Net Orderly Liquidation Value of such Generator Packages and/or Generator Units at such time) and the Borrowing Base shall be adjusted immediately upon receipt of such Borrowing Base Report to reflect such Disposition, (iii) after giving effect to such Disposition, including the reduction of the Borrowing Base in accordance with the foregoing clause (ii), Availability shall be equal to or greater than $0 or the Borrowers shall make any mandatory prepayment pursuant to Section 2.9(c)(i) concurrently with such Disposition, and (iv) such Disposition shall be made for fair value and for at least 80% cash consideration or (g) other Dispositions (other than with respect to any Accounts or other Property included in the Borrowing Base at any time) not to exceed $2,000,000 in the aggregate in any fiscal year.

Section 7.9           Sale and Leaseback. Each Loan Party shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, enter into any arrangement with any Person pursuant to which it leases from such Person real or personal Property that has been or is to be sold or transferred, directly or indirectly, by it to such Person.

Section 7.10         Prepayment of Debt. Each Loan Party shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, make any optional or voluntary payment, prepayment, repurchase or redemption of any Debt, except the Obligations under the Loan Documents.

Section 7.11         Nature of Business. Each Loan Party shall not, and shall not permit any of its Subsidiaries to, engage in any business other than the businesses in which they are engaged as of the date hereof or businesses directly related thereto. Each Loan Party shall not, and shall not permit any of its Subsidiaries to, make any material change in its credit collection policies if such change would materially impair the collectability of any Account, nor will it rescind, cancel or modify any Account except in the ordinary course of business.

Section 7.12         Environmental Protection. Each Loan Party shall not, and shall not permit any of its Subsidiaries to, directly or indirectly (a) use (or permit any tenant to use) any of their respective Properties or assets for the handling, processing, storage, transportation, or disposal of any Hazardous Material in violation of, or in a manner or to a location that could give rise to liability under, any applicable Environmental Laws, (b) generate any Hazardous Material in violation of any applicable Environmental Laws, (c) conduct any activity that is likely to cause a Release or threatened Release of any Hazardous Material in violation of any applicable Environmental Laws, or (d) otherwise conduct any activity or use any of their respective Properties or assets in any manner that is likely to violate any Environmental Law or create any Environmental Liabilities for which any Loan Party or any of its Subsidiaries would be responsible.

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Section 7.13          Accounting. Each Loan Party shall not, and shall not permit any of its Subsidiaries to, change its fiscal year or make any change (a) in accounting treatment or reporting practices, except as required by GAAP and disclosed to Administrative Agent and Lenders, or (b) in tax reporting treatment, except as required by Law and disclosed to Administrative Agent and Lenders.

Section 7.14         Burdensome Agreements. Each Loan Party shall not, and shall not permit any of its Subsidiaries or any other Loan Party to, enter into or permit to exist any arrangement or agreement, other than pursuant to this Agreement or any other Loan Document, which (a) directly or indirectly prohibits Company, any of its Subsidiaries or any other Loan Party from creating or incurring a Lien on any of its Property, revenues, or assets, whether now owned or hereafter acquired, (b) directly or indirectly prohibits any of its Subsidiaries or any other Loan Party to make any payments, directly or indirectly, to any other Loan Party by way of dividends, distributions, advances, repayments of loans, repayments of expenses, accruals, or otherwise or (c) in any way would be contravened by such Person’s performance of its obligations hereunder or under the other Loan Documents; provided that clause (a) of the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured Debt permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Debt.

Section 7.15         Subsidiaries. Each Loan Party shall not, directly or indirectly, form or acquire any Domestic Subsidiary unless such Loan Party complies with the requirements of Section 6.13(a). Except as set forth on Schedule 5.13 on the Closing Date, the Loan Parties shall not form or acquire any Foreign Subsidiaries. The Excluded Subsidiary shall not form or acquire any Subsidiaries.

Section 7.16         Amendments of Certain Documents. Each Loan Party shall not, and shall not permit any of its Subsidiaries to, amend, restate, supplement or otherwise modify (a) any of their respective Constituent Documents in a manner adverse to the interest of the Lenders or (b) the Parent Loan Documents in contravention of the Intercreditor Agreement.

Section 7.17         Hedge Agreements. Each Loan Party shall not, and shall not permit any of its Subsidiaries to, enter into any Hedge Agreement, except those that are entered into for non- speculative purposes and that are (a) Hedge Agreements entered into to hedge or mitigate risks to which such Loan Party or any Subsidiary thereof has actual exposure which have terms and conditions reasonably acceptable to Administrative Agent, and (b) other Hedge Agreements entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment, Debt of such Loan Party or any of its Subsidiaries limited to the principal amount of such interest-bearing liability or investment or Debt which have terms and conditions reasonably acceptable to Administrative Agent.

Section 7.18         Anti-Corruption Laws; Sanctions; Anti-Terrorism Law. Each Loan Party will not, directly or indirectly, use the proceeds of the Loans or Letters of Credit, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person, (a) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of the FCPA or any other applicable Anti-Corruption Law, or (b) (i) to fund any activities or business of or with any Person, or in any country or territory, that, at the time of such funding, is, or whose government is, the subject of Sanctions, or (ii) in any other manner that would result in a violation of Sanctions by any Person (including any Person participating in the Loans or Letters of Credit, whether as Administrative Agent, Arranger, Lender, underwriter, advisor, investor, or otherwise).

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Section 7.19         Negative Pledge. Each Loan Party shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that limits the ability of such Loan Party or Subsidiary to create, incur, assume or suffer to exist Liens on any real estate owned by such Loan Party or Subsidiary to secure the Obligations.

ARTICLE 8.

FINANCIAL COVENANTS

Each Loan Party covenants and agrees that, as long as the Obligations or any part thereof are outstanding or any Letter of Credit is outstanding or any Lender has any Commitment hereunder:

Section 8.1            Leverage Ratio. Company shall not permit the Leverage Ratio to be greater than (a) 4.00 to 1.00 as of the last day of any fiscal quarter ending March 31, 2019 through September 30, 2019 and (b) 3.50 to 1.00 as of the last day of any fiscal quarter ending on and after December 31, 2019.

Section 8.2            Fixed Charge Coverage Ratio. Company shall not permit the Fixed Charge Coverage Ratio to be less than (a) 1.10 to 1.00 as of the last day of any fiscal quarter ending March 31, 2019 through September 30, 2019 and (b) 1.25 to 1.00 as of the last day of any fiscal quarter ending on and after December 31, 2019.

ARTICLE 9.

DEFAULT

Section 9.1           Events of Default. Each of the following shall be deemed an “Event of Default”:

(a)           Any Loan Parties shall fail to pay the Obligations under the Loan Documents or any part thereof shall not be paid when due or declared due and, other than with respect to payments of principal, such failure shall continue unremedied for three (3) Business Days after such payment became due;

(b)          Any Loan Party shall breach any provision of Sections 6.1, 6.2 (with respect to a Loan Party’s existence), 6.5, 6.12, 6.13, 6.16 or 6.17 or Article 7 or Article 8 of this Agreement;

(c)          Any representation or warranty made or deemed made by Parent or any Loan Party (or any of their respective officers) in any Loan Document or in any certificate, report, notice, or financial statement furnished at any time in connection with this Agreement or any other Loan Document shall be false, misleading, or erroneous in any material respect (without duplication of any materiality qualifier contained therein) when made or deemed to have been made;

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(d)          Parent, Company, any of its Subsidiaries, or any other Loan Party or any Subsidiary of any Loan Party shall fail to perform, observe, or comply with any covenant, agreement, or term contained in this Agreement or any other Loan Document (other than as covered by Sections 9.1(a) and (b)), and such failure continues for more than thirty (30) days following the date such failure first began;

(e)          Parent, Company or any of its Subsidiaries, or any other Loan Party or any Subsidiary of any Loan Party shall commence a voluntary proceeding seeking liquidation, reorganization, or other relief with respect to itself or its debts under any bankruptcy, insolvency, or other similar Law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian, or other similar official of it or a substantial part of its Property or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it or shall make a general assignment for the benefit of creditors or shall generally fail to pay its debts as they become due or shall take any corporate action to authorize any of the foregoing;

(f)           An involuntary proceeding shall be commenced against Parent, Company or any of its Subsidiaries, or any other Loan Party or any Subsidiary of any Loan Party seeking liquidation, reorganization, or other relief with respect to it or its debts under any bankruptcy, insolvency, or other similar Law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian, or other similar official for it or a substantial part of its Property, and such involuntary proceeding shall remain undismissed and unstayed for a period of thirty (30) consecutive days;

(g)          Company, any of its Subsidiaries, or any other Loan Party or any Subsidiary of any Loan Party shall fail to pay when due any principal of or interest on any Debt (other than the Obligations under the Loan Documents) with an outstanding principal amount of $1,000,000 or more, or the maturity of any such Debt shall have been accelerated, or any such Debt shall have been required to be prepaid, repurchased, defeased or redeemed prior to the stated maturity thereof or any cash collateral in respect thereof to be demanded, or any event shall have occurred that permits (or, with the giving of notice or lapse of time or both, after any applicable cure periods, would permit) any holder or holders of such Debt, or the counterparty under any Hedge Agreement constituting such Debt, or any Person acting on behalf of such holder or holders or such counterparty to accelerate the maturity thereof or require any such prepayment, repurchase, defeasance or redemption or any cash collateral in respect thereof to be demanded;

(h)          This Agreement, the Guaranty or any other Loan Document shall cease to be in full force and effect or shall be declared null and void or the validity or enforceability thereof shall be contested or challenged by Parent, Company, any of its Subsidiaries, any other Loan Party or any Subsidiary of any Loan Party or any of their respective equity holders, or Parent or any Loan Party shall deny that it has any further liability or obligation under any of the Loan Documents, or any Lien created by the Loan Documents shall for any reason cease to be a valid, first priority perfected Lien (subject to Permitted Liens) upon any of the Collateral purported to be covered thereby;

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(i)           Any of the following events shall occur or exist with respect to any Loan Party or any ERISA Affiliate: (i) any ERISA Event occurs with respect to a Plan or Multiemployer Plan, or (ii) any Prohibited Transaction involving any Plan or Multiemployer Plan; and in each case above, such event or condition, together with all other events or conditions, if any, have subjected or could in the reasonable opinion of Administrative Agent subject any Loan Party or any ERISA Affiliate to any tax, penalty, or other liability to a Plan, a Multiemployer Plan, the PBGC, the IRS, the U. S. Department of Labor, or otherwise (or any combination thereof) which in the aggregate exceed or could reasonably be expected to exceed $1,000,000;

(j)           A Change of Control shall occur;

(k)          Company, any of its Subsidiaries, or any other Loan Party or any Subsidiary of any Loan Party, or any of their Properties, revenues, or assets, shall become subject to an order of forfeiture, seizure, or divestiture (whether under RICO or otherwise) and the same shall not have been discharged within thirty (30) days from the date of entry thereof;

(l)           Company, any of its Subsidiaries, or any other Loan Party or any Subsidiary of any Loan Party shall fail to discharge within a period of thirty (30) consecutive days after the commencement thereof any attachment, sequestration, or similar proceeding or proceedings involving an aggregate amount in excess of $500,000 against any of its assets or Properties;

(m)         A final judgment or judgments for the payment of money in excess of $500,000 not covered by insurance in the aggregate (and to which the applicable insurer has not denied coverage) shall be rendered by a court or courts against Company, any of its Subsidiaries, or any other Loan Party or any Subsidiary of any Loan Party and the same shall not be discharged (or provision shall not be made for such discharge), or a stay of execution thereof shall not be procured, within thirty (30) consecutive days from the date of entry thereof and Company, such Subsidiary, or such Loan Party or such Subsidiary of such Loan Party shall not, within such period of thirty (30) consecutive days, or such longer period during which execution of the same shall have been stayed, appeal therefrom and cause the execution thereof to be stayed during such appeal; or

(n)          any event of default shall occur under any of the Parent Loan Documents.

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Section 9.2           Remedies Upon Default. If any Event of Default shall occur and be continuing, then Administrative Agent may, with the consent of Required Lenders, or shall, at the direction of Required Lenders, without notice do any or all of the following: (a) terminate the Commitments of Lenders (except for funding obligations of outstanding Letters of Credit), (b) terminate the obligations of L/C Issuer to make L/C Credit Extensions, (c) terminate the commitment of Swing Line Lender to make Swing Line Loans, (d) require that Borrowers Cash Collateralize the L/C Obligations (in an amount equal to the Minimum Collateral Amount with respect thereto), or (e) declare the Obligations (other than the Obligations arising out of Bank Product Agreements) or any part thereof to be immediately due and payable, and the same shall thereupon become immediately due and payable, without notice, demand, presentment, notice of dishonor, notice of acceleration, notice of intent to accelerate, notice of intent to demand, protest, or other formalities of any kind, all of which are hereby expressly waived by each Borrower and each other Loan Party; provided, however, that upon the occurrence of an Event of Default under Section 9.1(e) or (f), the Commitments of Lenders shall automatically terminate (except for funding obligations of outstanding Letters of Credit), the obligations of L/C Issuer to make L/C Credit Extensions shall automatically terminate, the commitment of Swing Line Lender to make Swing Line Loans shall automatically terminate, the obligation of each Borrower to Cash Collateralize the L/C Obligations as aforesaid shall automatically become effective, and the Obligations (other than the Obligations arising out of Bank Product Agreements) shall become immediately due and payable, in each case without notice, demand, presentment, notice of dishonor, notice of acceleration, notice of intent to accelerate, notice of intent to demand, protest, or other formalities of any kind, all of which are hereby expressly waived by each Borrower and each other Loan Party. In addition to the foregoing, if any Event of Default shall occur and be continuing, Administrative Agent may, with the consent of Required Lenders, or shall, at the direction of Required Lenders, exercise all rights and remedies available to it, Lenders and L/C Issuer in law or in equity, under the Loan Documents, or otherwise.

Section 9.3            Right to Cure Financial Covenant Non-Compliance. Notwithstanding anything to the contrary contained in Section 9.1 or 9.2, in the event Company fails to comply with the financial covenants set forth in Section 8.1 or Section 8.2 as of the last day of such fiscal quarter, subject to the terms and conditions hereof, Company shall have the right (the “Cure Right”) from the last day of the applicable fiscal quarter until the expiration of the 10th Business Day subsequent to the date by which the financial statements for the last month of such fiscal quarter are required to be delivered to Administrative Agent pursuant to Section 6.1(b), to receive a Specified EBITDA Equity Contribution in an aggregate amount equal to, but not greater than, the amount necessary to cause Company to be in compliance with Section 8.1 and Section 8.2 for such period (hereinafter, the “Cure Amount”), and upon the receipt by Company of the cash proceeds thereof, the financial covenants shall then be recalculated giving effect to the following pro forma adjustments:

(a)          Annualized EBITDA and/or EBITDA shall be calculated for the applicable fiscal quarter and any four fiscal quarter period that contains such fiscal quarter, solely for the purpose of measuring compliance with the financial covenants and not for any other purpose under this Agreement, by an amount equal to the Cure Amount (it being understood that, with respect to the calculation of Annualized EBITDA, the Cure Amount will be added after the amount of EBITDA set forth in clause (a) of the definition of Annualized EBITDA has been calculated for the applicable fiscal month for which Company has failed to comply with the financial covenants set forth in Section 8.2);

(b)          if, after giving effect to the foregoing recalculations, Company shall then be in compliance with the requirements of all financial covenants, Company shall be deemed to have been in compliance with such financial covenants as of the relevant date of determination with the same effect as though there had been no failure to comply therewith at such date, and the applicable breach, Default or Event of Default of such financial covenants that had occurred shall be deemed not to have occurred for this purpose of the Agreement;

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(c)          notwithstanding anything herein to the contrary, (i) in each four consecutive fiscal quarter period of Company there shall be at least two fiscal quarters in which the Cure Right is not exercised, (ii) during the term of this Agreement, the Cure Right shall not be exercised more than five (5) times, (iii) the Cure Amount shall be no greater than the amount required for purposes of complying with the financial covenants and any amounts in excess thereof shall not be deemed to be a Cure Amount and (iv) there shall be no pro forma reduction in Debt with the proceeds of any Cure Amount. Notwithstanding any other provision in this Agreement to the contrary, the Cure Amount received pursuant to any exercise of the Cure Right shall be disregarded for purposes of determining the satisfaction of any Default or Event of Default condition, any financial ratio-based conditions or tests, the Applicable Margin or other pricing or any available basket under Article 7 of this Agreement; and

(d)          the mandatory prepayment of the Loans made pursuant to Section 2.9(c) with respect to any cash proceeds of Specified EBITDA Equity Contribution shall not serve as a reduction to Debt for purposes of calculating the Leverage Ratio for the four fiscal quarter period then ending (even if the proceeds of any Specified EBITDA Equity Contribution are actually used to repay Debt, regardless of whether the proceeds of any Specified EBITDA Equity Contribution are received before or after the last day of such period).

Section 9.4            Application of Funds. After the exercise of remedies provided for in Section 9.2 (or if an Event of Default exists and the written notice thereof, if any, to any Borrower from Administrative Agent expressly provides that this Section 9.4 shall thereafter apply to any amounts received on account of the Obligations or after the Loans have automatically become immediately due and payable), any amounts received on account of the Obligations shall be applied by Administrative Agent in the following order:

First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including fees, charges and disbursements of counsel to Administrative Agent) payable to Administrative Agent in its capacity as such;

Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal, interest, and Letter of Credit Fees) payable to Lenders and L/C Issuer (including fees, charges and disbursements of counsel to the respective Lenders and L/C Issuer) arising under the Loan Documents, ratably among them in proportion to the respective amounts described in this clause Second payable to them;

Third, to payment of that portion of the Obligations constituting accrued and unpaid Letter of Credit Fees and interest on the Loans, L/C Borrowings and other Obligations arising under the Loan Documents, ratably among Lenders and L/C Issuer in proportion to the respective amounts described in this clause Third payable to them;

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Fourth, to payment of that portion of the Obligations constituting unpaid principal of the Loans and L/C Borrowings and constituting unpaid Bank Product Obligations, ratably among Lenders and Bank Product Providers in proportion to the respective amounts described in this clause Fourth held by them;

Fifth, to Administrative Agent for the account of the L/C Issuer, to Cash Collateralize that portion of L/C Obligations comprised of the aggregate undrawn amount of Letters of Credit to the extent not otherwise Cash Collateralized by any Borrower pursuant to Sections 2.2 and 2.7;

Sixth, to payment of that remaining portion of the Obligations, ratably among the Lenders and Bank Product Providers in proportion to the respective amounts described in this clause Sixth held by them; and

Last, the balance, if any, after all of the Obligations have been indefeasibly paid in full, to Borrowers or as otherwise required by Law.

Notwithstanding anything to the contrary herein or in any other Loan Document, no amount received from any Loan Party shall be applied to any Excluded Swap Obligation of such Loan Party, but appropriate adjustments shall be made with respect to payments from other Loan Parties to preserve allocation to Obligations otherwise set forth in this Section.

Further notwithstanding, Bank Product Obligations shall be excluded from the application described above if Administrative Agent has not received written notice thereof, together with supporting documentation as Administrative Agent may request from the applicable Bank Product Provider, provided that no such notice shall be required for any Bank Product Agreement for which Administrative Agent or any Affiliate of Administrative Agent is the applicable Bank Product Provider. Each Bank Product Provider that is not a party to this Agreement that has given notice contemplated by the preceding sentence shall, by such notice, be deemed to have acknowledged and accepted the appointment of Administrative Agent pursuant to the terms of Article 10 hereof for itself and its Affiliates as if a “Lender” party hereto.

Section 9.5           Performance by Administrative Agent. If any Loan Party shall fail to perform any covenant or agreement contained in any of the Loan Documents, then Administrative Agent may perform or attempt to perform such covenant or agreement on behalf of such Loan Party. In such event, Borrowers shall, at the request of Administrative Agent, promptly pay to Administrative Agent any amount expended by Administrative Agent in connection with such performance or attempted performance, together with interest thereon at the Default Interest Rate from and including the date of such expenditure to but excluding the date such expenditure is paid in full. Notwithstanding the foregoing, it is expressly agreed that Administrative Agent shall not have any liability or responsibility for the performance of any covenant, agreement, or other obligation of any Borrower or any other Loan Party under this Agreement or any other Loan Document.

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ARTICLE 10.

AGENCY

Section 10.1         Appointment and Authority.

(a)          Each of the Lenders, L/C Issuer, and Swing Line Lender hereby irrevocably appoints Texas Capital Bank to act on its behalf as Administrative Agent hereunder and under the other Loan Documents and authorizes Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article 10 are solely for the benefit of Administrative Agent, Lenders, L/C Issuer, and Swing Line Lender, and no Loan Party shall have rights as a third- party beneficiary of any of such provisions. It is understood and agreed that the use of the term “agent” herein or in any other Loan Documents (or any other similar term) with reference to Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable Law. Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.

(b)          Administrative Agent shall also act as the “collateral agent” under the Loan Documents, and each of the Lenders (including for itself and its Affiliates in their capacities as potential Bank Product Providers) and L/C Issuer hereby irrevocably appoints and authorizes Administrative Agent to act as the agent of such Lender and L/C Issuer for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Loan Parties to secure any of the Obligations, together with such powers and discretion as are reasonably incidental thereto. In this connection, Administrative Agent, as “collateral agent” and any co-agents, sub-agents and attorneys-in-fact appointed by Administrative Agent pursuant to Section 10.5 for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Security Documents, or for exercising any rights and remedies thereunder at the direction of Administrative Agent, shall be entitled to the benefits of all provisions of this Article 10 and Article 11 (including Section 11.1(b), as though such co-agents, sub-agents and attorneys-in-fact were the “collateral agent” under the Loan Documents) as if set forth in full herein with respect thereto.

Section 10.2         Rights as a Lender. The Person serving as Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not Administrative Agent, and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for, and generally engage in any kind of business with, any Loan Party or any Subsidiary or other Affiliate thereof as if such Person were not Administrative Agent hereunder and without any duty to account therefor to Lenders.

Section 10.3         Exculpatory Provisions.

(a)          Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents, and its duties hereunder shall be administrative in nature. Without limiting the generality of the foregoing, Administrative Agent:

(i)             shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

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(ii)            shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that Administrative Agent is required to exercise as directed in writing by Required Lenders (or such other number or percentage of Lenders as shall be expressly provided for herein or in the other Loan Documents); provided that Administrative Agent shall not be required to take any action that, in its opinion or upon the advice of its counsel, may expose Administrative Agent to liability or that is contrary to any Loan Document or applicable Law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or termination of Property of a Defaulting Lender in violation of any Debtor Relief Law;

(iii)           shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to any Loan Party or any of their respective Affiliates that is communicated to or obtained by the Person serving as Administrative Agent or any of its Affiliates in any capacity; and

(iv)           shall be fully justified in failing or refusing to take any action hereunder or under any other Loan Document unless it shall first be indemnified to its satisfaction by Lenders pro rata against any and all liability, cost and expense that it may incur by reason of taking or continuing to take any such action.

(b)          Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of Required Lenders (or such other number or percentage of Lenders as shall be necessary, or as Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 9.2 and 10.9), or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and nonappealable judgment. SUCH LIMITATION OF LIABILITY SHALL APPLY REGARDLESS OF WHETHER THE LIABILITY ARISES FROM THE SOLE, CONCURRENT, CONTRIBUTORY OR COMPARATIVE NEGLIGENCE OF ADMINISTRATIVE AGENT. Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to Administrative Agent in writing by any Loan Party, a Lender, L/C Issuer, or Swing Line Lender.

(c)          Neither Administrative Agent nor any Related Party thereof shall be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article 4 or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to Administrative Agent.

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Section 10.4         Reliance by Administrative Agent. Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Credit Extension, that by its terms must be fulfilled to the satisfaction of a Lender, L/C Issuer, or Swing Line Lender, Administrative Agent may presume that such condition is satisfactory to such Lender, L/C Issuer, or Swing Line Lender unless Administrative Agent shall have received notice to the contrary from such Lender prior to the making of such Credit Extension. Administrative Agent may consult with legal counsel (who may be counsel for any Loan Party), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

Section 10.5         Delegation of Duties. Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub agents appointed by Administrative Agent. Administrative Agent and any such sub agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article 10 shall apply to any such sub agent and to the Related Parties of Administrative Agent and any such sub agent, and shall apply to their respective activities in connection with the syndication of the Revolving Credit Facility as well as activities as Administrative Agent. Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and non-appealable judgment that Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub agents.

Section 10.6         Resignation or Removal of Administrative Agent.

(a)          Administrative Agent may at any time give notice of its resignation to Lenders, L/C Issuer, Swing Line Lender and Borrowers. Upon receipt of any such notice of resignation, Required Lenders shall have the right, in consultation with Borrowers (so long as no Event of Default has occurred and is continuing), to appoint a successor, which shall be a bank with an office in Dallas, Texas, or an Affiliate of any such bank with an office in Dallas, Texas. If no such successor shall have been so appointed by Required Lenders and shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent gives notice of its resignation (or such earlier day as shall be agreed by Required Lenders) (the “Resignation Effective Date”), then the retiring Administrative Agent may (but shall not be obligated to), on behalf of Lenders, L/C Issuer, and Swing Line Lender, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that in no event shall any successor Administrative Agent be a Defaulting Lender. Whether or not a successor has been appointed, such resignation shall become effective in accordance with such notice on the Resignation Effective Date. After the Resignation Effective Date, the provisions of this Article 10 relating to or indemnifying or releasing Administrative Agent shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement and the other Loan Documents.

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(b)           If the Person serving as Administrative Agent is a Defaulting Lender pursuant to clause (d) of the definition thereof, Required Lenders may, to the extent permitted by applicable Law, by notice in writing to the Borrower Representative and such Person remove such Person as Administrative Agent and, in consultation with the Borrower Representative, appoint a successor. If no such successor shall have been so appointed by Required Lenders and shall have accepted such appointment within thirty (30) days (or such earlier day as shall be agreed by Required Lenders) (the “Removal Effective Date”), then such removal shall nonetheless become effective in accordance with such notice on the Removal Effective Date.

(c)          With effect from the Resignation Effective Date or the Removal Effective Date (as applicable) (i) the retiring or removed Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any Collateral held by Administrative Agent on behalf of Secured Parties under any of the Loan Documents, the retiring or removed Administrative Agent shall continue to hold such Collateral until such time as a successor Administrative Agent is appointed) and (ii) except for any indemnity, fee or expense payments owed to the retiring or removed Administrative Agent, all payments, communications and determinations provided to be made by, to or through Administrative Agent shall instead be made by or to each Lender, L/C Issuer, or Swing Line Lender, as applicable, directly, until such time, if any, as Required Lenders appoint a successor Administrative Agent as provided for above. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring or removed Administrative Agent (other than any rights to indemnity payments owed to the retiring or removed Administrative Agent), and the retiring or removed Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents. The fees payable by Borrowers to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between Borrowers and such successor. After the retiring or removed Administrative Agent’s resignation or removal hereunder and under the other Loan Documents, the provisions of this Article 10, Section 11.1, and Section 11.2 shall continue in effect for the benefit of such retiring or removed Administrative Agent, its sub agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring or removed Administrative Agent was acting as Administrative Agent.

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(d)          Any resignation by Texas Capital Bank as Administrative Agent pursuant to this Section shall also constitute its resignation as L/C Issuer and Swing Line Lender unless the notice thereof otherwise provides. If Texas Capital Bank resigns as an L/C Issuer, it shall retain all the rights, powers, privileges and duties of L/C Issuer hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as L/C Issuer and all L/C Obligations with respect thereto, including the right to require Lenders to make Revolving Credit Loans or fund risk participations in Unreimbursed Amounts pursuant to Section 2.2(c). If Texas Capital Bank resigns as Swing Line Lender, it shall retain all the rights of Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it and outstanding as of the effective date of such resignation, including the right to require Lenders to make Revolving Credit Loans or fund risk participations in outstanding Swing Line Loans pursuant to Section 2.3(c). Upon the appointment by Borrowers of a successor L/C Issuer or Swing Line Lender hereunder (which successor shall in all cases be a Lender other than a Defaulting Lender), (i) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer or Swing Line Lender, as applicable, (ii) the retiring L/C Issuer and Swing Line Lender shall be discharged from all of their respective duties and obligations hereunder or under the other Loan Documents, and (iii) the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to Texas Capital Bank to effectively assume the obligations of Texas Capital Bank with respect to such Letters of Credit.

Section 10.7          Non-Reliance on Administrative Agent and Other Lenders. Each Lender, L/C Issuer, and Swing Line Lender expressly acknowledges that neither Administrative Agent nor any other Lender nor any Related Party thereto has made any representation or warranty to such Person and that no act by Administrative Agent or any other Lender hereafter taken, including any review of the affairs of any Loan Party, shall be deemed to constitute any representation or warranty by Administrative Agent or any Lender to any other Lender. Each Lender, Swing Line Lender and L/C Issuer acknowledges that it has, independently and without reliance upon Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender, L/C Issuer, and Swing Line Lender also acknowledges that it will, independently and without reliance upon Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder. Except for notices, reports and other documents expressly required to be furnished to the Lenders or Swing Line Lender by Administrative Agent hereunder, Administrative Agent shall not have any duty or responsibility to provide any Lender or Swing Line Lender with any credit or other information concerning the business, operations, Property, condition (financial or otherwise), or creditworthiness of any Loan Party or the value of the Collateral or other Properties of any Loan Party or any other Person which may come into the possession of Administrative Agent or any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates.

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Section 10.8          Administrative Agent May File Proofs of Claim. In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether Administrative Agent shall have made any demand on any Loan Party) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:

(a)            to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, L/C Obligations and all other Obligations under the Loan Documents that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of Lenders, L/C Issuer, Swing Line Lender, and Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of Lenders, L/C Issuer, Swing Line Lender, and Administrative Agent and their respective agents and counsel and all other amounts due Lenders, L/C Issuer, Swing Line Lender, and Administrative Agent under Section 11.1 or Section 11.2) allowed in such judicial proceeding; and

(b)            to collect and receive any monies or other Property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender, L/C Issuer and Swing Line Lender to make such payments to Administrative Agent and, in the event that Administrative Agent shall consent to the making of such payments directly to Lenders, L/C Issuer, and Swing Line Lender, as applicable, to pay to Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of Administrative Agent and its agents and counsel, and any other amounts due Administrative Agent under Section 11.1 or Section 11.2.

Section 10.9            Collateral and Guaranty Matters.

(a)            The Secured Parties irrevocably authorize Administrative Agent, at its option and in its discretion:

(i)            to release any Lien on any Property granted to or held by Administrative Agent under any Loan Document (x) upon termination of all Commitments and payment in full of all Obligations (other than (A) contingent indemnification obligations and (B) obligations and liabilities under Bank Product Agreements as to which arrangements satisfactory to the applicable Bank Product Provider shall have been made) and the expiration or termination of all Letters of Credit (other than Letters of Credit as to which other arrangements satisfactory to Administrative Agent and L/C Issuer shall have been made), (y) that is sold or otherwise disposed of or to be sold or otherwise disposed of as part of or in connection with any sale or other disposition permitted under the Loan Documents, or (z) if approved, authorized or ratified in writing by Required Lenders or all Lenders, as applicable, under Section 11.10;

(ii)            to subordinate any Lien on any Property granted to or held by Administrative Agent under any Loan Document to the holder of any Lien on such Property that is permitted by Section 7.2; and

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(iii)            to release any Guarantor from its obligations under the Guaranty if such Person ceases to be a Subsidiary as a result of a transaction permitted under the Loan Documents.

Upon request by Administrative Agent at any time, Required Lenders will confirm in writing Administrative Agent’s authority to release or subordinate its interest in particular types or items of Property, or to release any Guarantor from its obligations under the Guaranty pursuant to this Section 10.9. Upon the occurrence of any of the events specified in Section 10.9(a)(i)(x), (y) or (z) or Section 10.9(a)(iii), at Borrowers’ expense, Administrative Agent shall execute and deliver to Borrowers such documentation as Borrowers shall reasonably request to release the applicable Collateral from the Liens created by the Loan Documents and/or release the applicable Guarantor from its obligations under its Guaranty, as the case may be.

(b)            Administrative Agent shall not be responsible for or have a duty to ascertain or inquire into any representation or warranty regarding the existence, value or collectability of the Collateral, the existence, priority or perfection of Administrative Agent’s Lien thereon, or any certificate prepared by any Loan Party in connection therewith, nor shall Administrative Agent be responsible or liable to Lenders for any failure to monitor or maintain any portion of the Collateral.

Section 10.10         Bank Product Agreements. No Bank Product Provider who obtains the benefits of Section 9.4, any Guaranty or any Collateral by virtue of the provisions hereof or of any Guaranty or any Security Document shall have any right to notice of any action or to consent to, direct or object to any action hereunder or under any other Loan Document or otherwise in respect of the Collateral (including the release or impairment of any Collateral) (or to notice of or to consent to any amendment, waiver or modification of the provisions hereof or of the Guaranty or any Security Document) other than in its capacity as a Lender and, in such case, only to the extent expressly provided in the Loan Documents. Notwithstanding any other provision of this Article 10 to the contrary, Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Bank Product Obligations unless Administrative Agent has received written notice of such Bank Product Obligations, together with such supporting documentation as Administrative Agent may request, from the applicable Bank Product Provider. Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Bank Product Obligations arising under Bank Product Agreements upon termination of all Commitments and payment in full of all Obligations under the Loan Documents (other than contingent indemnification obligations) and the expiration or termination of all Letters of Credit (other than Letters of Credit as to which other arrangements satisfactory to Administrative Agent and L/C Issuer shall have been made).

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ARTICLE 11.

MISCELLANEOUS

Section 11.1           Expenses.

(a)            Each Borrower hereby agrees to pay on demand: (i) all costs and expenses of Arranger, Administrative Agent, L/C Issuer, Swing Line Lender and their Related Parties in connection with the syndication and distribution of the Revolving Credit Facility and the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents and any and all amendments, modifications, renewals, extensions, supplements, waivers, consents and ratifications thereof and thereto, including, without limitation, the reasonable fees and expenses of legal counsel, advisors, consultants, and auditors for Administrative Agent, L/C Issuer, Swing Line Lender and their Related Parties; (ii) all costs and expenses of Administrative Agent, L/C Issuer, Swing Line Lender and each Lender in connection with any Default and the enforcement of this Agreement or any other Loan Document, including, without limitation, court costs and fees and expenses of legal counsel, advisors, consultants, and auditors for Administrative Agent, L/C Issuer, Swing Line Lender and each Lender; (iii) all costs and expenses incurred by L/C Issuer in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder; (iv) all transfer, stamp, documentary, or other similar taxes, assessments, or charges levied by any Governmental Authority in respect of this Agreement or any of the other Loan Documents; (v) all costs, expenses, assessments, and other charges incurred in connection with any filing, registration, recording, or perfection of any Lien contemplated by this Agreement or any other Loan Document; and (vi) all other costs and expenses incurred by Administrative Agent, L/C Issuer, Swing Line Lender and any Lender in connection with the enforcement or protection of its rights under this Agreement or any other Loan Document, any workout or restructuring (including the negotiations thereof), any litigation, dispute, suit, proceeding or action, the enforcement of its rights and remedies, and the protection of its interests in bankruptcy, insolvency or other legal proceedings, including, without limitation, all costs, expenses, and other charges (including Administrative Agent’s and such Lender’s, L/C Issuer’s, and Swing Line Lender’s internal charges) incurred in connection with evaluating, observing, collecting, examining, auditing, appraising, selling, liquidating, or otherwise disposing of the Collateral or other assets of the Loan Parties. Borrowers shall be responsible for all expenses described in this clause (a) whether or not any Credit Extension is ever made. Any amount to be paid under this Section 11.1 shall be a demand obligation owing by Borrowers and if not paid within ten (10) days of demand shall bear interest, to the extent not prohibited by and not in violation of applicable Law, from the date of expenditure until paid at a rate per annum equal to the Default Interest Rate. The obligations of Borrowers under this Section 11.1 shall survive payment of the Notes and other obligations hereunder and the assignment of any right hereunder.

(b)            To the extent that Borrowers for any reason fail to indefeasibly pay any amount required under Section 11.1(a) or Section 11.2 to be paid by it to Arranger, Administrative Agent, L/C Issuer, or Swing Line Lender (or any sub-agent thereof) or any Related Party of Arranger, Administrative Agent, L/C Issuer, or Swing Line Lender (or any sub-agent thereof), each Lender severally agrees to pay to Arranger, Administrative Agent, L/C Issuer, or Swing Line Lender (or any such sub-agent) or such Related Party, as the case may be, such Lender’s pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought based on each Lender’s share of the Revolving Credit Exposure at such time) of such unpaid amount (including any such unpaid amount in respect of a claim asserted by such Lender); provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against Arranger, Administrative Agent, L/C Issuer, or Swing Line Lender (or any such sub-agent) or against any Related Party of Arranger, Administrative Agent, L/C Issuer, or Swing Line Lender (or any sub-agent thereof) acting for Arranger, Administrative Agent, L/C Issuer, or Swing Line Lender (or any such sub-agent) in connection with such capacity. EACH LENDER ACKNOWLEDGES THAT SUCH PAYMENTS MAY BE IN RESPECT OF LOSSES, CLAIMS, DAMAGES, LIABILITIES OR RELATED EXPENSES ARISING OUT OF OR RESULTING FROM THE SOLE, CONTRIBUTORY, COMPARATIVE, CONCURRENT OR ORDINARY NEGLIGENCE OF THE PERSON (OR THE REPRESENTATIVES OF THE PERSON) TO WHOM SUCH PAYMENTS ARE TO BE MADE.

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Section 11.2           INDEMNIFICATION. EACH BORROWER SHALL INDEMNIFY ARRANGER, ADMINISTRATIVE AGENT, L/C ISSUER, SWING LINE LENDER, EACH LENDER AND EACH RELATED PARTY THEREOF (EACH, AN “INDEMNITEE”) FROM, AND HOLD EACH OF THEM HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING ATTORNEYS’ FEES) TO WHICH ANY OF THEM MAY BECOME SUBJECT WHICH DIRECTLY OR INDIRECTLY ARISE FROM OR RELATE TO (A) THE NEGOTIATION, EXECUTION, DELIVERY, PERFORMANCE, ADMINISTRATION, OR ENFORCEMENT OF ANY OF THE LOAN DOCUMENTS, (B) ANY OF THE TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS, (C) ANY BREACH BY ANY BORROWER OF ANY REPRESENTATION, WARRANTY, COVENANT, OR OTHER AGREEMENT CONTAINED IN ANY OF THE LOAN DOCUMENTS, (D) THE PRESENCE, RELEASE, THREATENED RELEASE, DISPOSAL, REMOVAL, OR CLEANUP OF ANY HAZARDOUS MATERIAL LOCATED ON, ABOUT, WITHIN, OR AFFECTING ANY OF THE PROPERTIES OR ASSETS OF COMPANY OR ANY OF ITS SUBSIDIARIES OR ANY OTHER LOAN PARTY, (E) ANY LOAN OR LETTER OF CREDIT OR USE OR PROPOSED USE OF THE PROCEEDS THEREFROM (INCLUDING ANY REFUSAL BY THE L/C ISSUER TO HONOR A DEMAND FOR PAYMENT UNDER A LETTER OF CREDIT IF THE DOCUMENTS PRESENTED IN CONNECTION WITH SUCH DEMAND DO NOT STRICTLY COMPLY WITH THE TERMS OF SUCH LETTER OF CREDIT) OR (F) ANY INVESTIGATION, LITIGATION, OR OTHER PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY THREATENED OR PROSPECTIVE INVESTIGATION, LITIGATION, OR OTHER PROCEEDING, RELATING TO ANY OF THE FOREGOING, WHETHER BROUGHT BY A THIRD PARTY OR BY ANY LOAN PARTY. WITHOUT LIMITING ANY PROVISION OF THIS AGREEMENT OR OF ANY OTHER LOAN DOCUMENT, IT IS THE EXPRESS INTENTION OF THE PARTIES HERETO THAT EACH INDEMNITEE SHALL BE INDEMNIFIED FROM AND HELD HARMLESS AGAINST ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING ATTORNEYS’ FEES) ARISING OUT OF OR RESULTING FROM THE SOLE, CONTRIBUTORY, COMPARATIVE, CONCURRENT OR ORDINARY NEGLIGENCE OF SUCH INDEMNITEE (OR THE REPRESENTATIVES OF SUCH PERSON); provided that such indemnity shall not, as to any Indemnitee, be available to the extent such losses, liabilities, claims, damages, penalties, judgments, disbursements, costs and expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a claim not involving an act or omission of any Loan Party and that is brought by an Indemnitee against another Indemnitee (other than against the Arranger or Administrative Agent in their capacities as such). Any amount to be paid under this Section 11.2 shall be a demand obligation owing by Borrowers and if not paid within ten (10) days of demand shall bear interest, to the extent not prohibited by and not in violation of applicable Law, from the date of expenditure until paid at a rate per annum equal to the Default Interest Rate. The obligations of Borrowers under this Section 11.2 shall survive payment of the Notes and other obligations hereunder and the assignment of any right hereunder.

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Section 11.3           Limitation of Liability. None of Arranger, Administrative Agent, L/C Issuer, Swing Line Lender, or any Lender, or any of their Related Parties, shall have any liability with respect to, and each Loan Party hereby waives, releases, and agrees not to sue any of them upon, any claim for any special, indirect, incidental, or consequential damages (whether in contract, tort or otherwise) suffered or incurred by any Loan Party in connection with, arising out of, or in any way related to, this Agreement or any of the other Loan Documents, or any of the transactions contemplated by this Agreement or any of the other Loan Documents. Each Loan Party hereby waives, releases, and agrees not to sue Arranger, Administrative Agent, L/C Issuer, Swing Line Lender, or any Lender, or any of their Related Parties, for punitive damages in respect of any claim in connection with, arising out of, or in any way related to, this Agreement or any of the other Loan Documents, or any of the transactions contemplated by this Agreement or any of the other Loan Documents.

Section 11.4           No Duty. All attorneys, accountants, appraisers, and other professional Persons and consultants retained by Arranger, Administrative Agent, any Lender, L/C Issuer, or Swing Line Lender shall have the right to act exclusively in the interest of Arranger, Administrative Agent or such Lender, L/C Issuer, or Swing Line Lender and shall have no duty of disclosure, duty of loyalty, duty of care, or other duty or obligation of any type or nature whatsoever to any Loan Party or any of such Loan Party’s equity holders, Affiliates, officers, employees, attorneys, agents, or any other Person.

Section 11.5           Lenders Not Fiduciary. The relationship between Borrowers and each other Loan Party on the one hand, and Administrative Agent, Arranger and each Lender, L/C Issuer, and Swing Line Lender is solely that of debtor and creditor, and none of Administrative Agent, Arranger, any Lender, L/C Issuer, or Swing Line Lender, on the other hand, has any fiduciary or other special relationship with Borrowers or any other Loan Party, and no term or condition of any of the Loan Documents shall be construed so as to deem the relationship between Borrowers and each other Loan Party on the one hand, and Administrative Agent, Arranger and each Lender, L/C Issuer, and Swing Line Lender, on the other hand, to be other than that of debtor and creditor.

Section 11.6           Equitable Relief. Each Loan Party recognizes that in the event any Borrower or any other Loan Party fails to pay, perform, observe, or discharge any or all of the Obligations, any remedy at law may prove to be inadequate relief to Administrative Agent or Lenders, L/C Issuer, or Swing Line Lender. Each Loan Party therefore agrees that Administrative Agent, any Lender, L/C Issuer, or Swing Line Lender, if Administrative Agent or such Lender, L/C Issuer, or Swing Line Lender so requests, shall be entitled to temporary and permanent injunctive relief in any such case without the necessity of proving actual damages.

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Section 11.7           No Waiver; Cumulative Remedies. No failure on the part of Administrative Agent, any Lender, L/C Issuer, or Swing Line Lender to exercise and no delay in exercising, and no course of dealing with respect to, any right, remedy, power, or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power, or privilege under this Agreement preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege. The rights and remedies provided for in this Agreement and the other Loan Documents are cumulative and not exclusive of any rights and remedies provided by Law.

Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Loan Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, Administrative Agent in accordance with Section 9.2 for the benefit of all the Lenders; provided, however, that the foregoing shall not prohibit (a) Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan Documents, (b) Swing Line Lender from exercising the rights and remedies that inure to its benefit (solely in its capacity as Swing Line Lender) hereunder and under the other Loan Documents, (c) any Lender from exercising setoff rights in accordance with Section 4.2 (subject to the terms of Section 11.23), or (d) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Loan Party under any Debtor Relief Law; and provided, further, that if at any time there is no Person acting as Administrative Agent hereunder and under the other Loan Documents, then (i) the Required Lenders shall have the rights otherwise ascribed to Administrative Agent pursuant to Section 9.2 and (ii) in addition to the matters set forth in clauses (b), (c) and (d) of the preceding proviso and subject to Section 11.23, any Lender may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.

Section 11.8           Successors and Assigns.

(a)            Successors and Assigns Generally. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that no Loan Party may assign or otherwise transfer any of its rights, duties, or obligations under this Agreement or the other Loan Documents without the prior written consent of Administrative Agent and each Lender, and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of Section 11.8(b), (ii) by way of participation in accordance with the provisions of Section 11.8(d), or (iii) by way of pledge or assignment of a security interest subject to the restrictions of Section 11.8(e) (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in Section 11.8(d) and, to the extent expressly contemplated hereby, the Related Parties of each of Administrative Agent and Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

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(b)            Assignments by Lenders. Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment(s) and the Loans at the time owing to it); provided that any such assignment shall be subject to the following conditions:

(i)            Minimum Amounts. (A) in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment(s) and/or the Loans at the time owing to it or contemporaneous assignments to related Approved Funds (determined after giving effect to such assignments) that equal at least the amount specified in Section 11.8(b)(i)(B) in the aggregate or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and (B) in any case not described in Section 11.8(b)(i)(A), the aggregate amount of the Commitment(s) (which for this purpose includes Loans outstanding hereunder) or, if the applicable Commitment is not then in effect, the Outstanding Amount of the Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date) shall not be less than $5,000,000, unless each of Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower Representative otherwise consents (each such consent not to be unreasonably withheld or delayed).

(ii)           Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loan or the Commitment(s) assigned.

(iii)          Required Consents. No consent shall be required for any assignment except to the extent required by Section 11.8(b)(i)(B) and, in addition: (A) the consent of the Borrower Representative (such consent not to be unreasonably withheld or delayed) shall be required unless (x) an Event of Default has occurred and is continuing at the time of such assignment, or (y) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; provided that the Borrower Representative shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to Administrative Agent within five (5) Business Days after having received notice thereof; (B) the consent of Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments in respect of any Commitment or Revolving Credit Loans if such assignment is to a Person that is not a Lender with a Commitment, an Affiliate of such Lender or an Approved Fund with respect to such Lender; and (C) the consent of L/C Issuer and Swing Line Lender shall be required for any assignment in respect of the Revolving Credit Facility.

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(iv)          Assignment and Assumption. The parties to each assignment shall execute and deliver to Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500; provided that Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment; and provided further that Borrowers shall not be obligated to pay for such processing and recording fee except in the case of any assignment made pursuant to Section 3.6(b). The assignee, if it is not a Lender, shall deliver to Administrative Agent an Administrative Questionnaire.

(v)           No Assignment to Certain Persons. No such assignment shall be made to (A) Parent, any Loan Party, or any their respective Affiliates or Subsidiaries or (B) any Defaulting Lender or any of its Affiliates, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (b).

(vi)          No Assignment to Natural Persons. No such assignment shall be made to a natural Person (or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural Person).

(vii)         Certain Additional Payments. In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to such assignment shall make such additional payments to Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrower Representative and Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by such Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to: (A) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to Administrative Agent or any Lender hereunder (and interest accrued thereon) and (B) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in Letters of Credit and Swing Line Loans in accordance with its Applicable Percentage. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable Law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

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Subject to acceptance and recording thereof by Administrative Agent pursuant to Section 11.8(c), from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Section 3.1, Section 3.2, Section 11.1 and Section 11.2 with respect to facts and circumstances occurring prior to the effective date of such assignment; provided that, except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 11.8(d). Upon the consummation of any assignment pursuant to this Section 11.8(b), if requested by the transferor or transferee Lender, the transferor Lender, Administrative Agent and Borrowers shall make appropriate arrangements so that replacement Notes are issued to such transferor Lender (if applicable) and new Notes or, as appropriate, replacement Notes, are issued to the assignee.

(c)            Register. Administrative Agent, acting solely for this purpose as a non-fiduciary agent of Borrowers, shall maintain at one of its offices in Dallas, Texas a copy of each Assignment and Assumption delivered to it and a Register. The entries in the Register shall be conclusive absent manifest error, and Borrowers, Administrative Agent and Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by Borrowers and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(d)            Participations. Any Lender may at any time, without the consent of, or notice to, any Loan Party or Administrative Agent, sell participations to a Participant in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment(s) and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, and (iii) each Loan Party, Administrative Agent, and Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. For the avoidance of doubt, each Lender shall be responsible for the indemnity under Section 11.1(b) without regard to the existence of any participation.

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Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in Section 11.10 which requires the consent of all Lenders and affects such Participant. Each Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.1, 3.4 and 3.5 (subject to the requirements and limitations therein, including the requirements under Section 3.4(g) (it being understood that the documentation required under Section 3.4(g) shall be delivered to the participating Lender)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant (A) agrees to be subject to the provisions of Section 3.6 as if it were an assignee under paragraph (b) of this Section; and (B) shall not be entitled to receive any greater payment under Sections 3.1 or 3.4, with respect to any participation, than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation. Each Lender that sells a participation agrees, at Borrowers’ request and expense, to use reasonable efforts to cooperate with Borrowers to effectuate the provisions of Section 3.6 with respect to any Participant. To the extent permitted by Law, each Participant also shall be entitled to the benefits of Section 11.25 as though it were a Lender; provided that such Participant agrees to pay to Administrative Agent any amount set-off for application to the Obligations under the Loan Documents as required pursuant to Section 11.25; provided further that such Participant agrees to be subject to Section 11.23 as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of Borrowers, maintain a Participant Register; provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

(e)           Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

(f)            Dissemination of Information. Each Loan Party authorizes Administrative Agent and each Lender to disclose to any actual or prospective purchaser, assignee or other recipient of a Lender’s Commitment, any and all information in Administrative Agent’s or such Lender’s possession concerning Borrowers, the other Loan Parties and their respective Affiliates.

Section 11.9          Survival. All representations and warranties made in this Agreement or any other Loan Document or in any document, statement, or certificate furnished in connection with this Agreement shall survive the execution and delivery of this Agreement and the other Loan Documents, and no investigation by Administrative Agent or any Lender or any closing shall affect the representations and warranties or the right of Administrative Agent or any Lender to rely upon them. Without prejudice to the survival of any other obligation of any Loan Party hereunder, the obligations of Borrowers under Sections 11.1 and 11.2 shall survive repayment of the Obligations and termination of the Commitments.

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Section 11.10         Amendment. Subject to Section 3.3(b), the provisions of this Agreement and the other Loan Documents to which Borrowers or any other Loan Party is a party (other than the Issuer Documents) may be amended or waived only by an instrument in writing signed by Required Lenders (or by Administrative Agent with the consent of Required Lenders) and each Loan Party party thereto and acknowledged by Administrative Agent; provided, however, that no such amendment or waiver shall:

(a)           waive any condition set forth in Section 4.1, without the written consent of each Lender;

(b)           extend or increase any Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 9.2) without the written consent of such Lender;

(c)           postpone any date fixed by this Agreement or any other Loan Document for any payment (excluding mandatory prepayment) of principal, interest, fees or other amounts due to Lenders (or any of them) hereunder or under any other Loan Document without the written consent of each Lender directly affected thereby;

(d)           reduce the principal of, or the rate of interest specified herein on, any Loan, or any fees or other amounts payable hereunder or under any other Loan Document without the written consent of each Lender directly affected thereby; provided, however, that (i) any amendment or modification of the financial covenants in this Agreement (or any defined term used therein) shall not constitute a reduction in the rate of interest or fees for purposes of this clause (d) and (ii) only the consent of Required Lenders shall be necessary to adjust the Default Interest Rate or to waive any obligation of Borrowers to pay interest at such rate;

(e)           change any provision of this Section 11.10 or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender;

(f)            change Section 9.4 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender; or

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(g)           release any Guaranty or all or substantially all of the Collateral (in each case, except as provided herein) without the written consent of each Lender;

and, provided further, that (i) no amendment, waiver or consent shall, unless in writing and signed by the L/C Issuer in addition to the Lenders required above, affect the rights or duties of the L/C Issuer under this Agreement or any Issuer Document relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed by the Swing Line Lender in addition to the Lenders required above, affect the rights or duties of the Swing Line Lender under this Agreement; (iii) no amendment, waiver or consent shall, unless in writing and signed by Administrative Agent in addition to Lenders required above, affect the rights or duties of Administrative Agent under this Agreement or any other Loan Document; (iv) the Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto; and (v) Borrowers and Administrative Agent may amend this Agreement or any other Loan Document without the consent of Lenders (unless the Required Lenders object in writing within five (5) Business Days of notice by Administrative Agent of such amendment) in order to (A) correct, amend or cure any ambiguity, inconsistency or defect or correct any typographical error or other manifest error in any Loan Document or (B) comply with local Law or advice of local counsel in any jurisdiction the Laws of which govern any Security Document or that are relevant to the creation, perfection, protection and/or priority of any Lien in favor of Administrative Agent, (C) effect the granting, perfection, protection, expansion or enhancement of any security interest in any Collateral or additional property to become Collateral for the benefit of the Secured Parties, (D) make administrative or operational changes not adverse to any Lender or (E) add a Guarantor or Collateral or otherwise enhance the rights and benefits of the Lenders.

Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment, waiver or consent which by its terms requires the consent of all Lenders or each affected Lender may be effected with the consent of the applicable Lenders other than Defaulting Lenders), except that (x) the Commitment(s) of any Defaulting Lender may not be increased or extended without the consent of such Lender; and (y) any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender that by its terms affects any Defaulting Lender disproportionately adversely relative to other affected Lenders shall require the consent of such Defaulting Lender.

Section 11.11         Notices.

(a)            Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in Section 11.11(b)), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile as set forth on Schedule 11.11. Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received. Notices sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient). Notices delivered through electronic communications, to the extent provided in Section 11.11(b) shall be effective as provided in Section 11.11(b).

(b)            Electronic Communications. Notices and other communications to Lenders and hereunder may be delivered or furnished by electronic communication (including e-mail and internet or intranet websites) pursuant to procedures approved by Administrative Agent, provided that the foregoing shall not apply to notices to any Lender pursuant to Article 2 if such Lender has notified Administrative Agent that it is incapable of receiving notices under Article 2 by electronic communication. Administrative Agent or any Loan Party may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

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Unless Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), and (ii) notices or communications posted to an internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient, at its e-mail address as described in the foregoing clause (i), of notification that such notice or communication is available and identifying the website address therefor; provided that, for both clauses (i) and (ii) above, if such facsimile, email or other electronic communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient.

(c)            Change of Address, etc. Any party hereto may change its address or facsimile number for notices and other communications hereunder by notice to the other parties hereto, Schedule 11.11 shall be deemed to be amended by each such change, and Administrative Agent is authorized, in its discretion, from time to time to reflect each such change in an amended Schedule 11.11 provided by Administrative Agent to each party hereto.

(d)            Platform.

(i)            Each Loan Party agrees that Administrative Agent may, but shall not be obligated to, make the Communications (as defined below) available to the Lenders, L/C Issuer or Swing Line Lender by posting the Communications on the Platform.

(ii)            The Platform is provided “as is” and “as available.” The Agent Parties do not warrant the adequacy of the Platform and expressly disclaim liability for errors or omissions in the Communications. No warranty of any kind, express, implied or statutory, including, without limitation, any warranty of merchantability, fitness for a particular purpose, non-infringement of third-party rights or freedom from viruses or other code defects, is made by any Agent Party in connection with the Communications or the Platform. In no event shall the Agent Parties have any liability to any Loan Party, any Lender or any other Person or entity for damages of any kind, including, without limitation, direct or indirect, special, incidental or consequential damages, losses or expenses (whether in tort, contract or otherwise) arising out of any Loan Party’s or Administrative Agent’s transmission of Communications through the Platform.

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(iii)            Each Loan Party (by its, his or her execution of a Loan Document) hereby authorizes Administrative Agent, each Lender, Swing Line Lender and their respective counsel and agents and Related Parties (each an “Authorized Party”) to communicate and transfer documents and other information (including confidential information) concerning this transaction or any Loan Party and the business affairs of such Loan Parties via the Internet or other electronic communication method. In no event shall any Authorized Party have any liability to any Loan Party, any Lender or any other Person or entity for damages of any kind (whether in tort, contract or otherwise) arising out of any such communications or transmissions, except to the extent that such damages are determined by a court of competent jurisdiction in a final and nonappealable judgment to have directly resulted from the gross negligence or willful misconduct of such Authorized Party; provided, however, that in no event shall any Authorized Party have any liability for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages).

Section 11.12         Governing Law; Venue; Service of Process.

(a)            Governing Law. This Agreement and the other Loan Documents and any claims, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Agreement or any other Loan Document (except, as to any other Loan Document, as expressly set forth therein) and the transactions contemplated hereby and thereby shall be governed by, and construed in accordance with, the Laws of the State of Texas (without reference to applicable rules of conflicts of Laws), except to the extent the Laws of any jurisdiction where Collateral is located require application of such Laws with respect to such Collateral.

(b)            Jurisdiction. Each Loan Party irrevocably and unconditionally agrees that it will not commence any action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or in tort or otherwise, against Administrative Agent, any Lender, L/C Issuer, Swing Line Lender or any Related Party of the foregoing in any way relating to this Agreement or any other Loan Document or the transactions relating hereto or thereto, in any forum other than the courts of the State of Texas sitting in Dallas County, Texas, and of the United States District Court of the Northern District of Texas, and any appellate court from any thereof, and each of the parties hereto irrevocably and unconditionally submits to the jurisdiction of such courts and agrees that all claims in respect of any such action, litigation or proceeding may be heard and determined in such Texas state court or, to the fullest extent permitted by applicable Law, in such federal court. Each of the parties hereto agrees that a final judgment in any such action, litigation or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law. Nothing in this Agreement or in any other Loan Document shall affect any right that Administrative Agent, any Lender, L/C Issuer or Swing Line Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against any Borrower or any of the other Loan Parties or their Properties in the courts of any jurisdiction.

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

(d)            Service of Process. Each party hereto irrevocably consents to service of process by the mailing thereof, in the manner provided for the mailing of notices in Section 11.11. Nothing in this Agreement will affect the right of any party hereto to serve process in any other manner permitted by applicable Law.

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Section 11.13     Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Except as provided in Section 4.1, this Agreement shall become effective when it shall have been executed by Administrative Agent and when Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other electronic imaging means (e.g. “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart of this Agreement.

Section 11.14     Severability. Any provision of this Agreement or any other Loan Document held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this Agreement and the effect thereof shall be confined to the provision held to be invalid or illegal. Furthermore, in lieu of such invalid or unenforceable provision there shall be added as a part of this Agreement or the other Loan Documents a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable.

Section 11.15     Headings. The headings, captions, and arrangements used in this Agreement are for convenience only and shall not affect the interpretation of this Agreement.

Section 11.16     Construction. Each Loan Party, Administrative Agent and each Lender acknowledge that each of them has had the benefit of legal counsel of its own choice and has been afforded an opportunity to review this Agreement and the other Loan Documents with its legal counsel and that this Agreement and the other Loan Documents shall be construed as if jointly drafted by each Loan Party, Administrative Agent and each Lender.

Section 11.17     Independence of Covenants. All covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or be otherwise within the limitations of, another covenant shall not avoid the occurrence of a Default if such action is taken or such condition exists.

Section 11.18     WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 11.18.

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Section 11.19     Additional Interest Provision. It is expressly stipulated and agreed to be the intent of each Loan Party, Administrative Agent and each Lender at all times to comply strictly with the applicable Law governing the maximum rate or amount of interest payable on the indebtedness evidenced by any Note, any other Loan Document, and the Related Indebtedness (or applicable United States federal Law to the extent that it permits any Lender to contract for, charge, take, reserve or receive a greater amount of interest than under applicable Law). If the applicable Law is ever judicially interpreted so as to render usurious any amount (a) contracted for, charged, taken, reserved or received pursuant to any Note, any of the other Loan Documents or any other communication or writing by or between any Borrower or any other Loan Party and any Lender related to the transaction or transactions that are the subject matter of the Loan Documents, (b) contracted for, charged, taken, reserved or received by reason of Administrative Agent’s or any Lender’s exercise of the option to accelerate the maturity of any Note and/or the Related Indebtedness, or (c) any Loan Party will have paid or Administrative Agent or any Lender will have received by reason of any voluntary prepayment by Borrowers or any other Loan Party of any Note and/or the Related Indebtedness, then it is Borrowers’ and each other Loan Party’s, Administrative Agent’s and Lenders’ express intent that all amounts charged in excess of the Maximum Rate shall be automatically canceled, ab initio, and all amounts in excess of the Maximum Rate theretofore collected by Administrative Agent or any Lender shall be credited on the principal balance of any Note and/or the Related Indebtedness (or, if any Note and all Related Indebtedness have been or would thereby be paid in full, refunded to Borrowers or such other Loan Party, as applicable), and the provisions of any Note and the other Loan Documents shall immediately be deemed reformed and the amounts thereafter collectible hereunder and thereunder reduced, without the necessity of the execution of any new document, so as to comply with the applicable Law, but so as to permit the recovery of the fullest amount otherwise called for hereunder and thereunder; provided, however, if any Note or Related Indebtedness has been paid in full before the end of the stated term thereof, then Borrowers, each other Loan Party, Administrative Agent and each Lender agree that Administrative Agent or any Lender, as applicable, shall, with reasonable promptness after Administrative Agent or such Lender discovers or is advised by any Loan Party that interest was received in an amount in excess of the Maximum Rate, either refund such excess interest to such Loan Party, as applicable, and/or credit such excess interest against such Note and/or any Related Indebtedness then owing by Borrowers and the other Loan Parties to Administrative Agent or such Lender. Each Loan Party hereby agrees that as a condition precedent to any claim seeking usury penalties against Administrative Agent or such Lender, such Loan Party will provide written notice to Administrative Agent or any Lender, advising Administrative Agent or such Lender in reasonable detail of the nature and amount of the violation, and Administrative Agent or such Lender shall have sixty (60) days after receipt of such notice in which to correct such usury violation, if any, by either refunding such excess interest to such Loan Parties, as applicable, or crediting such excess interest against the Note to which the alleged violation relates and/or the Related Indebtedness then owing by the Loan Parties to Administrative Agent or such Lender. All sums contracted for, charged, taken, reserved or received by Administrative Agent or any Lender for the use, forbearance or detention of any debt evidenced by any Note and/or the Related Indebtedness shall, to the extent permitted by applicable Law, be amortized or spread, using the actuarial method, throughout the stated term of such Note and/or the Related Indebtedness (including any and all renewal and extension periods) until payment in full so that the rate or amount of interest on account of any Note and/or the Related Indebtedness does not exceed the Maximum Rate from time to time in effect and applicable to such Note and/or the Related Indebtedness for so long as debt is outstanding. In no event shall the provisions of Chapter 346 of the Texas Finance Code (which regulates certain revolving credit loan accounts and revolving triparty accounts) apply to the Notes and/or any of the Related Indebtedness. Notwithstanding anything to the contrary contained herein or in any of the other Loan Documents, it is not the intention of Administrative Agent or any Lender to accelerate the maturity of any interest that has not accrued at the time of such acceleration or to collect unearned interest at the time of such acceleration.

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Section 11.20     Ceiling Election. To the extent that any Lender is relying on Chapter 303 of the Texas Finance Code to determine the Maximum Rate payable on any Note and/or any other portion of the Obligations under the Loan Documents, such Lender will utilize the weekly ceiling from time to time in effect as provided in such Chapter 303. To the extent United States federal Law permits any Lender to contract for, charge, take, receive or reserve a greater amount of interest than under Texas Law, such Lender will rely on United States federal Law instead of such Chapter 303 for the purpose of determining the Maximum Rate. Additionally, to the extent permitted by applicable Law now or hereafter in effect, any Lender may, at its option and from time to time, utilize any other method of establishing the Maximum Rate under such Chapter 303 or under other applicable Law by giving notice, if required, to Borrowers as provided by applicable Law now or hereafter in effect.

Section 11.21     USA Patriot Act Notice. Administrative Agent and each Lender hereby notifies each Loan Party that pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies each Loan Party, which information includes the name and address of each Loan Party and other information that will allow Administrative Agent and such Lender to identify each Loan Party in accordance with the Patriot Act. In addition, each Loan Party agrees to (a) ensure that no Person who owns a Controlling interest in or otherwise controls any Loan Party or any Subsidiary of Company or any other Loan Party is or shall be a Sanctioned Person, (b) not to use or permit the use of proceeds of the Obligations to violate any Anti-Corruption Laws, Anti-Terrorism Laws or any applicable Sanctions, and (c) comply, or cause its Subsidiaries to comply, with the applicable Laws.

Section 11.22     Defaulting Lenders.

(a)            Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicable Law:

(i)            Waivers and Amendments. Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of “Required Lenders” and in Section 11.10.

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(ii)            Defaulting Lender Waterfall. Any payment of principal, interest, fees or other amounts received by Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article 9 or otherwise) or received by Administrative Agent from a Defaulting Lender shall be applied at such time or times as may be determined by Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to Administrative Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to L/C Issuer or Swing Line Lender hereunder; third, to Cash Collateralize L/C Issuer’s Fronting Exposure, if any, with respect to such Defaulting Lender in accordance with Section 2.7; fourth, as Borrowers may request (so long as no Default or Event of Default exists), to the funding of any Revolving Credit Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by Administrative Agent; fifth, if so determined by Administrative Agent and Borrowers, to be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Lender’s potential future funding obligations with respect to Revolving Credit Loans under this Agreement and (y) Cash Collateralize L/C Issuer’s future Fronting Exposure, if any, with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in accordance with Section 2.7; sixth, to the payment of any amounts owing to Lenders, L/C Issuer or Swing Line Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender, L/C Issuer or Swing Line Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to Borrowers as a result of any judgment of a court of competent jurisdiction obtained by Borrowers against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that, if (x) such payment is a payment of the principal amount of any Loans or L/C Borrowings in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made or the related Letters of Credit were issued at a time when the conditions set forth in Section 4.2 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and L/C Obligations owed to, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or L/C Obligations owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in L/C Obligations and Swing Line Loans are held by Lenders pro rata in accordance with the Commitments under the Revolving Credit Facility without giving effect to Section 11.22(a)(iv). Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 11.22(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

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(iii)            Certain Fees.

(A)            No Defaulting Lender shall be entitled to receive any fee payable under Section 2.4(c) for any period during which that Lender is a Defaulting Lender (and Borrowers shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender).

(B)            Each Defaulting Lender shall be entitled to receive Letter of Credit Fees for any period during which that Lender is a Defaulting Lender only to the extent allocable to its Applicable Percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to Section 2.7.

(C)            With respect to any fee payable under Section 2.4(c) or to any Letter of Credit Fee not required to be paid to any Defaulting Lender pursuant to clause (A) or (B) above, Borrowers shall (x) pay to each Lender that is a Non-Defaulting Lender that portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lender’s participation in L/C Obligations or Swing Line Loans that has been reallocated to such Non-Defaulting Lender pursuant to clause (iv) below, (y) pay to L/C Issuer and Swing Line Lender, as applicable, the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to such L/C Issuer’s or Swing Line Lender’s Fronting Exposure to such Defaulting Lender, and (z) not be required to pay the remaining amount of any such fee.

(iv)            Reallocation of Applicable Percentages to Reduce Fronting Exposure. All or any part of such Defaulting Lender’s participation in L/C Obligations and Swing Line Loans shall be reallocated among the Lenders that are Non-Defaulting Lenders in accordance with their respective Applicable Percentages (calculated without regard to such Defaulting Lender’s Commitment) but only to the extent that such reallocation does not cause the aggregate Revolving Credit Exposure of any Non-Defaulting Lender to exceed such Non-Defaulting Lender’s Commitment. Subject to Section 11.23, no reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation.

(v)            Cash Collateral, Repayment of Swing Line Loans. If the reallocation described in clause (a)(iv) above cannot, or can only partially, be effected, Borrowers shall, without prejudice to any right or remedy available to it hereunder or under applicable Law, (x) first, prepay Swing Line Loans in an amount equal to Swing Line Lender’s Fronting Exposure and (y) second, Cash Collateralize L/C Issuers’ Fronting Exposure in accordance with the procedures set forth in Section 2.7.

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(b)            Defaulting Lender Cure. If Borrowers, Administrative Agent, Swing Line Lender and L/C Issuer agree in writing that a Lender is no longer a Defaulting Lender, Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letters of Credit and Swing Line Loans to be held on a pro rata basis by Lenders in accordance with their Applicable Percentages (without giving effect to Section 11.22(a)(iv)), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of Borrowers while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

Section 11.23     Sharing of Payments by Lenders. If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of the Loans made by it or other obligations hereunder, resulting in such Lender’s receiving payment of a proportion of the aggregate amount of such Loans and accrued interest thereon greater than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall:

(a)            notify Administrative Agent of such fact; and

(b)            purchase (for cash at face value) participations in the Loans and such other obligations of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and other amounts owing them, provided that:

(i)            if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and

(ii)            the provisions of this Section 11.23 shall not be construed to apply to: (A) any payment made by or on behalf of Borrowers pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender); or (B) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or subparticipations in L/C Obligations or Swing Line Loans to any assignee or participant, other than an assignment to any Borrower or any Affiliate thereof (as to which the provisions of this Section 11.23 shall apply).

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Each Loan Party consents to the foregoing and agrees, to the extent it may effectively do so under applicable Law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against such Loan Party, as applicable, rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Loan Party in the amount of such participation.

Section 11.24     Payments Set Aside. To the extent that any payment by or on behalf of any Loan Party is made to Administrative Agent, L/C Issuer or any Lender, or Administrative Agent, L/C Issuer or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by Administrative Agent, L/C Issuer or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each Lender and L/C Issuer severally agrees to pay to Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Rate from time to time in effect. The obligations of Lenders and L/C Issuer under clause (b) of the preceding sentence shall survive the payment in full of the Obligations and the termination of this Agreement.

Section 11.25     Setoff. If an Event of Default exists, Administrative Agent and each Lender shall have the right to set off against the Obligations under the Loan Documents, at any time and without notice to any Loan Party, any and all deposits (general or special, time or demand, provisional or final) or other sums at any time credited by or owing from Administrative Agent or such Lender to such Loan Party whether or not the Obligations under the Loan Documents are then due; provided that in the event that any Defaulting Lender shall exercise any such right of setoff: (a) all amounts so set off shall be paid over immediately to Administrative Agent for further application in accordance with the provisions of Section 11.22 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of Administrative Agent and Lenders; and (b) such Defaulting Lender shall provide promptly to Administrative Agent a statement describing in reasonable detail the Obligations under the Loan Documents owing to such Defaulting Lender as to which it exercised such right of setoff. Each amount set off shall be paid to Administrative Agent for application to the Obligations under the Loan Documents in the order set forth in Section 9.4. As further security for the Obligations, each Loan Party hereby grants to Administrative Agent and each Lender a security interest in all money, instruments, and other Property of such Loan Party, as applicable, now or hereafter held by Administrative Agent or such Lender, including, without limitation, Property held in safekeeping. In addition to Administrative Agent’s and each Lender’s right of setoff and as further security for the Obligations, each Loan Party hereby grants to Administrative Agent and each Lender a security interest in all deposits (general or special, time or demand, provisional or final) and other accounts of such Loan Party now or hereafter on deposit with or held by Administrative Agent or such Lender and all other sums at any time credited by or owing from Administrative Agent or such Lender to such Loan Party. The rights and remedies of Administrative Agent and each Lender hereunder are in addition to other rights and remedies (including, without limitation, other rights of setoff) which Administrative Agent or such Lender may have.

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Section 11.26     Confidentiality. Each of Administrative Agent, L/C Issuer, Swing Line Lender and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its Related Parties (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential or shall otherwise be subject to confidentiality provisions generally), (b) to any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners) or any Governmental Authority, quasi-Governmental Authority or legislative committee, (c) to the extent required by applicable Laws or regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement or any other Loan Document, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to its being under a duty of confidentiality no less restrictive than this Section 11.26, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement, (ii) any actual or prospective counterparty (or its Related Parties) to any Bank Product relating to any Loan Party and its obligations, (iii) any actual or prospective purchaser of a Lender or its holding company, (iv) any rating agency or any similar organization in connection with the rating of any Loan Party or the Revolving Credit Facility or (v) the CUSIP Service Bureau or any similar organization in connection with the issuance and monitoring of CUSIP numbers with respect to the Revolving Credit Facility, (g) with the consent of Borrowers or such other applicable Loan Parties, or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section 11.26 or (ii) becomes available to Administrative Agent, L/C Issuer, Swing Line Lender, any Lender or any of their respective Affiliates on a nonconfidential basis from a source other than Borrowers. In addition, Administrative Agent and the Lenders may disclose the existence of this Agreement and information about this Agreement to market data collectors, similar service providers to the lending industry and service providers to Administrative Agent and the Lenders in connection with the administration of this Agreement, the other Loan Documents, and the Commitments. For purposes of this Section 11.26, “Information” means all information received from any Borrower or any other Loan Party or any Subsidiary thereof relating to any Borrower or any other Loan Party or any Subsidiary thereof or any of their respective businesses which is clearly identified as confidential, other than any such information that is available to Administrative Agent, L/C Issuer, Swing Line Lender or any Lender on a nonconfidential basis prior to disclosure by any Borrower or any other Loan Party or any Subsidiary thereof; provided that, in the case of information received from any Borrower or any other Loan Party or any Subsidiary thereof after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section 11.26 shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information. Each Loan Party party hereto agrees and confirms that, as between such Loan Party and Texas Capital Bank, the obligations of Texas Capital Bank under this Section 11.26 supersede and replace in their respective entireties all confidentiality, non-disclosure and similar obligations of Texas Capital Bank, if any, set forth in any previous agreement between such Loan Party and Texas Capital Bank notwithstanding anything to the contrary contained therein.

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Each of the Loan Parties hereby authorize Administrative Agent, with the written consent of the Borrower Representative, to publish the name and logo of any Loan Party and the amount of the credit facility provided hereunder in any “tombstone” or comparable advertisement which Administrative Agent desires to publish; provided, however, that Administrative Agent may provide industry trade organizations information necessary for inclusion in league table measurements without the written consent of the Borrower Representative.

Section 11.27     Electronic Execution of Assignments and Certain Other Documents. The words “execute,” “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption or in any amendment or other modification hereof (including waivers and consents) shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by Administrative Agent, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state Laws based on the Uniform Electronic Transactions Act.

Section 11.28     Acknowledgement and Consent to Bail-In of EEA Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Lender that is an EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the Write-Down and Conversion Powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

(a)            the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any Lender that is an EEA Financial Institution; and

(b)               the effects of any Bail-In Action on any such liability, including, if applicable:

(i)            a reduction in full or in part or cancellation of any such liability;

(ii)          a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

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(iii)            the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of any EEA Resolution Authority.

Section 11.29     Keepwell. Each Qualified ECP Guarantor party hereby jointly and severally absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each other Loan Party to honor all of such other Loan Party’s (a) Swap Obligations and (b) obligations under the Guaranty including those with respect to Swap Obligations (provided, however, that each Qualified ECP Guarantor shall only be liable under this Section for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section, or otherwise under this Agreement or any other Loan Document, voidable under applicable Law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The obligations of each Qualified ECP Guarantor under this Section shall remain in full force and effect until the Obligations (other than contingent indemnification obligations that survive the termination of this Agreement) have been paid in full and the Commitments have expired or terminated. Each Qualified ECP Guarantor intends that this Section constitute, and this Section shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each other Loan Party for all purposes of Section 1a(18)(A)(v)(ii) of the Commodity Exchange Act.

Section 11.30     NOTICE OF FINAL AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

Section 11.31     Intercreditor Agreement. Notwithstanding anything to the contrary herein, the Liens granted to the Secured Parties pursuant to this Agreement and the exercise of any right or remedy by Administrative Agent hereunder with respect to the Collateral are subject to the provisions of the Intercreditor Agreement. In the event of any conflict between the terms of the Intercreditor Agreement and this Agreement with respect to such matters, the terms of the Intercreditor Agreement shall govern and control. The Lenders hereby authorize (a) Administrative Agent to enter into the Intercreditor Agreement and to amend such agreement in accordance with the provisions of Section 11.10 and (b) Administrative Agent to take such action and execute and deliver to the Loan Parties, at the Loan Parties’ sole cost and expense, any all instruments, assignments, agreements, releases of Liens, UCC-3 termination or other documents reasonably requested by the Loan Parties and/or the Subordinated Lenders in connection with the Subordinated Lenders exercising their purchase option in accordance with the Intercreditor Agreement. Each Lender (by receiving the benefits thereunder and of the Collateral pledged pursuant to the Security Documents) agrees that the terms of the Intercreditor Agreement shall be binding on such Lender and its successors and assigns, as if it were a party thereto.

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ARTICLE 12.

GUARANTY

Section 12.1     Guaranty. In consideration of the Loans, advances and other credit heretofore or hereafter granted by the Secured Parties to Borrowers pursuant to this Agreement and the other Loan Documents and in further consideration of any Bank Product Agreements, Guarantors hereby, jointly and severally, unconditionally, absolutely and irrevocably, guarantee to the Secured Parties, the due and punctual payment at maturity, whether by acceleration or otherwise, and the due fulfillment and performance of the Obligations. Each Guarantor is jointly and severally liable for the full payment and performance of the Obligations as a primary obligor.

Section 12.2     Payment. If any of the Obligations is not punctually paid when such indebtedness becomes due and payable, either by its terms or as a result of the exercise of any power to accelerate, Guarantors shall, immediately on demand and without presentment, protest, notice of protest, notice of nonpayment, notice of intent to accelerate, notice of acceleration or any other notice whatsoever (all of which are expressly waived in accordance with Section 12.3 hereof), pay the amount due and payable thereon to Administrative Agent, at its Principal Office. It is not necessary for Administrative Agent, in order to enforce such payment by Guarantors, first to institute suit or exhaust its remedies against Borrowers or others liable on the Obligations, or to enforce its rights against any security given to secure such Obligations. Administrative Agent is not required to mitigate damages or take any other action to reduce, collect or enforce the Obligations. No setoff, counterclaim, reduction or diminution of any obligation, or any defense of any kind which any Guarantor has or may have against any Borrower or any Secured Party shall be available hereunder to Guarantors. No payment by any Guarantor shall discharge the liability of Guarantors hereunder until the Obligations have been fully satisfied and the Release Date shall have occurred. If Administrative Agent must rescind or restore any payment, or any part thereof, received by Administrative Agent on any part of the Obligations, any prior release or discharge from the terms of this Guaranty given Guarantors by Administrative Agent or any reduction of any Guarantor’s liability hereunder shall be without effect, and this Guaranty shall remain in full force and effect.

Section 12.3     Agreements and Waivers. Each Guarantor

(a)            agrees to all terms and agreements heretofore or hereafter made by Borrowers with Administrative Agent and/or any other Secured Party;

(b)            agrees that Administrative Agent may without impairing its rights or the obligations of such Guarantor hereunder (i) waive or delay the exercise of any of its rights or remedies against or release Borrowers or any other Person, including, without limitation, any other party who is or whose Property is liable with respect to the Obligations or any part thereof (Guarantors and any such other Person or Persons are hereafter collectively called the “Sureties” and individually called a “Surety”); (ii) take or accept any other security, collateral or guaranty, or other assurance of the payment of all or any part of the Obligations; (iii) release, surrender, exchange, subordinate or permit or suffer to exist any deterioration, waste, loss or impairment (including without limitation negligent, willful, unreasonable or unjustified impairment) of any collateral, Property or security, at any time existing in connection with, or assuring or securing payment of, all or any part of the Obligations or the liability of such Guarantor or any other Surety; (iv) increase, renew, extend, or modify the terms of any of the Obligations or any instrument or agreement evidencing the same; (v) apply payments by Borrowers, any Surety, or any other Person, to any of the Obligations; (vi) bring suit against any one or more Sureties without joining any other Surety or Borrowers in such proceeding; (vii) compromise or settle with any one or more Sureties in whole or in part for such consideration or no consideration as Administrative Agent may deem appropriate; or (viii) partially or fully release any Guarantor or any other Surety from liability hereunder;

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(c)            agrees that the obligations of such Guarantor under this Guaranty shall not be released, diminished, or adversely affected by any of the following: (i) the insolvency, bankruptcy, rearrangement, adjustment, composition, liquidation, disability, dissolution or lack of power of Borrowers or any Surety; (ii) the invalidity, illegality or unenforceability of all or any part of the Obligations or any document or agreement executed in connection with the Obligations, for any reason, or the fact that any debt included in the Obligations exceeds the amount permitted by Law; (iii) the failure of Administrative Agent or any other party to exercise diligence or reasonable care or to act in a commercially reasonable manner in the preservation, protection, enforcement, sale or other handling or treatment of all or any part of such collateral, Property or security; (iv) the fact that any collateral, security or Lien contemplated or intended to be given, created or granted as security for the repayment of the Obligations is not properly perfected or created, or proves to be unenforceable or subordinate to any other Lien; (v) the fact that any Borrower has any defense to the payment of all or any part of the Obligations; (vi) any payment by Borrowers or any Surety to Administrative Agent and/or any other Secured Party is a preference under applicable Debtor Relief Laws, or for any reason Administrative Agent and/or any other Secured Party is required to refund such payment or pay such amounts to Borrowers, any such Surety, or someone else; (vii) any defenses which Borrowers could assert on the Obligations, including but not limited to failure of consideration, breach of warranty, fraud, payment, accord and satisfaction, strict foreclosure, statute of frauds, bankruptcy, statute of limitations, lender liability and usury; or (viii) any other action taken or omitted to be taken with respect to this Agreement, the Loan Documents, the Obligations, the security and collateral therefor whether or not such action or omission prejudices such Guarantor or any Surety, or increases the likelihood that such Guarantor will be required to pay the Obligations pursuant to the terms hereof;

(d)            agrees that such Guarantor is obligated to pay the Obligations when due, notwithstanding any occurrence, circumstance, event, action or omission whatsoever, whether or not particularly described herein, except for the full and final payment and satisfaction of the Obligations;

(e)            to the extent allowed by applicable Law, waives all rights and remedies now or hereafter accorded by applicable Law to guarantors or sureties, including without limitation any defense, right of offset or other claim which such Guarantor may have against Borrowers or which Borrowers may have against Administrative Agent and/or the Lenders;

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(f)            waives all notices whatsoever with respect to this Guaranty or with respect to the Obligations, including, but without limitation, notice of (i) Administrative Agent’s and/or any other Secured Party’s acceptance hereof or its intention to act, or its action, in reliance hereon; (ii) the present existence, future incurring, or any amendment of the provisions of any of the Obligations or any terms or amounts thereof or any change therein in the rate of interest thereon; (iii) any default by Borrowers or any Surety; or (iv) the obtaining, enforcing, or releasing of any guaranty or surety agreement (in addition hereto), pledge, assignment or other security for any of the Obligations;

(g)            waives notice of presentment for payment, notice of protest, protest, demand, notice of intent to accelerate, notice of acceleration and notice of nonpayment, protest in relation to any instrument evidencing any of the Obligations, and any demands and notices required by Law, except as such waiver may be expressly prohibited by Law, and diligence in bringing suits against any Surety; and

(h)            waives each right to which it may be entitled by virtue of the Laws of the State of Texas governing or relating to suretyship and guaranties, including, without limitation, any rights under Rule 31, Texas Rules of Civil Procedure, Chapter 51 of the Texas Property Code, Section 17.001 of the Texas Civil Practice and Remedies Code, Section 3.605 of the Uniform Commercial Code, and Chapter 43 of the Texas Civil Practice and Remedies Code, as any or all of the same may be amended or construed from time to time, or the common law of the State of Texas at all relevant times.

Section 12.4     Liability. The liability of each Guarantor under this Guaranty is irrevocable, absolute and unconditional, without regard to the liability of any other Person, and shall not in any manner be affected by reason of any action taken or not taken by Administrative Agent and/or any other Secured Party, which action or inaction is herein consented and agreed to, nor by the partial or complete unenforceability or invalidity of any other guaranty or surety agreement, pledge, assignment or other security for any of the Obligations. No delay in making demand on Sureties or any of them for satisfaction of the liability hereunder shall prejudice Administrative Agent’s right to enforce such satisfaction. All of Administrative Agent’s rights and remedies shall be cumulative and any failure of Administrative Agent to exercise any right hereunder shall not be construed as a waiver of the right to exercise the same or any other right at any time, and from time to time, thereafter. This is a continuing guaranty of payment, not a guaranty of collection, and this Guaranty shall be binding upon Guarantors regardless of how long before or after the date hereof any of the Obligations were or are incurred.

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Section 12.5     Subordination. If a Borrower or any other Loan Party is now or hereafter becomes indebted to one or more Guarantors (such indebtedness and all interest thereon is referred to as the “Affiliated Debt”), such Affiliated Debt shall be subordinate in all respects to the full payment and performance of the Obligations, and no Guarantor shall be entitled to enforce or receive payment with respect to any Affiliated Debt until the Release Date. Each Guarantor agrees that any Liens, mortgages, deeds of trust, security interests, judgment liens, charges or other encumbrances upon any Loan Party’s assets securing the payment of the Affiliated Debt shall be and remain subordinate and inferior to any Liens, mortgages, deeds of trust, security interests, judgment liens, charges or other encumbrances upon any Loan Party’s assets securing the payment of the Obligations, and without the prior written consent of Administrative Agent, no Guarantor shall exercise or enforce any creditor’s rights of any nature against any Loan Party to collect the Affiliated Debt (other than demand payment therefor). In the event of the receivership, bankruptcy, reorganization, arrangement, debtor’s relief or other insolvency proceedings involving any Borrower or any applicable Loan Party as a debtor, Administrative Agent has the right and authority, either in its own name or as attorney-in-fact for any applicable Guarantor, to file such proof of debt, claim, petition or other documents and to take such other steps as are necessary to prove its rights hereunder and receive directly from the receiver, trustee or other court custodian, payments, distributions or other dividends which would otherwise be payable upon the Affiliated Debt. Each Guarantor hereby assigns such payments, distributions and dividends to Administrative Agent, and irrevocably appoints Administrative Agent as its true and lawful attorney-in-fact with authority to make and file in the name of such Guarantor any proof of debt, amendment of proof of debt, claim, petition or other document in such proceedings and to receive payment of any sums becoming distributable on account of the Affiliated Debt, and to execute such other documents and to give acquittances therefor and to do and perform all such other acts and things for and on behalf of such Guarantor as may be necessary in the opinion of Administrative Agent in order to have the Affiliated Debt allowed in any such proceeding and to receive payments, distributions or dividends of or on account of the Affiliated Debt.

Section 12.6     Subrogation. No Guarantor waives or releases any rights of subrogation, reimbursement or contribution which such Guarantor may have, after full and final payment of the Obligations, against others liable on the Obligations. Each Guarantor’s rights of subrogation and reimbursement are subordinate in all respects to the rights and claims of Administrative Agent and the other Secured Parties, and no Guarantor may exercise any rights it may acquire by way of subrogation under this Guaranty, by payment made hereunder or otherwise, until the Release Date. If any amount is paid to any Guarantor on account of such subrogation rights prior to the Release Date, such amount shall be held in trust for the benefit of Administrative Agent and/or the other Secured Parties to be credited and applied on the Obligations, whether matured or unmatured.

Section 12.7     Other Indebtedness or Obligations of Guarantors. If any Guarantor is or becomes liable for any indebtedness owed by any Loan Party to the Lenders by endorsement or otherwise than under this Guaranty, such liability shall not be affected by this Guaranty, and the rights of Administrative Agent and the Lenders hereunder shall be cumulative of all other rights that Administrative Agent and the Lenders may have against such Guarantor. The exercise by Administrative Agent of any right or remedy hereunder or under any other instrument or at law or in equity shall not preclude the concurrent or subsequent exercise of any other instrument or remedy at law or in equity and shall not preclude the concurrent or subsequent exercise of any other right or remedy. Further, without limiting the generality of the foregoing, this Guaranty is given by Guarantors as an additional guaranty to all guaranties heretofore or hereafter executed and delivered to Administrative Agent and/or the Lenders by Guarantors in favor of Administrative Agent and/or the Lenders relating to the indebtedness of the Loan Parties to the Secured Parties, and nothing herein shall be deemed to replace or be in lieu of any other of such previous or subsequent guarantees.

Section 12.8     Costs and Expenses. Guarantors jointly and severally agree to pay to Administrative Agent and the Lenders, upon demand, all losses and costs and expenses, including attorneys’ fees, that may be incurred by Administrative Agent and the Lenders in attempting to cause the Obligations to be satisfied or in attempting to cause satisfaction of Guarantors’ liability under this Guaranty.

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Section 12.9     Exercising Rights, Etc. No notice to or demand upon any Guarantor in any case shall, of itself, entitle such Guarantor or any other Guarantor to any other or further notice or demand in similar or other circumstances. No delay or omission by Administrative Agent in exercising any power or right hereunder shall impair such right or power or be construed as a waiver thereof or any acquiescence therein, nor shall any single or partial exercise of any such power preclude other or further exercise thereof, or the exercise of any other right or power hereunder.

Section 12.10     Benefit; Binding Effect. This Guaranty shall inure to the benefit of Administrative Agent and each other Secured Party and their respective successors and assigns, and to any interest in any of the Obligations. All of the obligations of Guarantors arising hereunder shall be jointly and severally binding on each of the Persons signing this Guaranty, and their respective successors and assigns (provided, however, that no Guarantor may, without the prior written consent of Administrative Agent in each instance, assign or delegate any of its rights, powers, duties or obligations hereunder, and any attempted assignment or delegation made without Administrative Agent’s prior written consent shall be void ab initio and of no force or effect).

Section 12.11     Multiple Guarantors. It is specifically agreed that Administrative Agent may enforce the provisions hereof with respect to one or more Guarantors without seeking to enforce the same as to all or any Guarantors. If one or more additional guaranty agreements (“Other Guaranties”) are executed by one or more additional guarantors (“Other Guarantors”), which guarantee, in whole or in part, any of the Obligations, it is specifically agreed that Administrative Agent may enforce the provisions of this Guaranty or of Other Guaranties with respect to one or more of Guarantors or any one or more of Other Guarantors under Other Guaranties without seeking to enforce the provisions of this Guaranty or Other Guaranties as to all or any of Guarantors or Other Guarantors. Each Guarantor hereby waives any requirement of joinder of all or any other Guarantor or all or any of Other Guarantors in any suit or proceeding to enforce the provisions of this Guaranty or of Other Guaranties. The liability hereunder of all Guarantors hereunder shall be joint and several.

Section 12.12     Additional Guarantors. From time to time subsequent to the date hereof, additional Persons may become parties hereto as additional Guarantors (each, an “Additional Guarantor”), by executing a Joinder Agreement. Upon delivery of any such Joinder Agreement to Administrative Agent, notice of which is hereby waived by Guarantors, each Additional Guarantor shall be a Guarantor and shall be as fully a party hereto as if Additional Guarantor were an original signatory hereto. Each Guarantor expressly agrees that its obligations arising hereunder shall not be affected or diminished by the addition or release of any other Guarantor hereunder, nor by any election of Administrative Agent not to cause any Subsidiary or Affiliate of Company to become an Additional Guarantor hereunder. This Guaranty shall be fully effective as to any Guarantor that is or becomes a party hereto regardless of whether any other Person becomes or fails to become or ceases to be a Guarantor hereunder.

 CREDIT AGREEMENT – Page 140

Section 12.13     Reinstatement. Notwithstanding anything contained in this Agreement or the other Loan Documents, the obligations of each Guarantor under this Article 12 shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of any Person in respect of the Obligations is rescinded or must be otherwise restored by any holder of any of the Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise, and each Guarantor agrees that it will indemnify each Secured Party on demand for all reasonable costs and expenses (including, without limitation, reasonable fees of counsel) incurred by such Person in connection with such rescission or restoration, including any such costs and expenses incurred in defending against any claim alleging that such payment constituted a preference, fraudulent transfer or similar payment under any Debtor Relief Law.

Section 12.14     Maximum Liability. Anything in this Guaranty to the contrary notwithstanding, the obligations of each Guarantor hereunder shall be limited to a maximum aggregate amount equal to the largest amount that would not render its obligations hereunder subject to avoidance as a fraudulent transfer or conveyance under Section 548 of Title 11 of the United States Code or any applicable provisions of comparable Law (collectively, the “Fraudulent Transfer Laws”), in each case after giving effect to all other liabilities of such Guarantor, contingent or otherwise, that are relevant under the Fraudulent Transfer Laws (specifically excluding, however, any liabilities of such Guarantor in respect of intercompany indebtedness to other Loan Parties or Affiliates of other Loan Parties to the extent that such indebtedness would be discharged in an amount equal to the amount paid or Property conveyed by such Guarantor under the Loan Documents) and after giving effect as assets, subject to Section 12.6, to the value (as determined under the applicable provisions of the Fraudulent Transfer Laws) of any rights to subrogation or contribution of such Guarantor pursuant to (a) applicable Law or (b) any agreement providing for an equitable allocation among such Guarantor and other Loan Parties of obligations arising under the Loan Documents and Bank Product Agreements.

[Remainder of Page Intentionally Left Blank; Signature Page Follows]

 CREDIT AGREEMENT – Page 141

EXECUTED to be effective as of the date first written above.

BORROWERS:
FLEX LEASING POWER & SERVICE LLC,
a Delaware limited liability company
By:	/s/ Darin Romine
Name:	Darin Romine
Title:	Vice President—Finance

Signature Page To Credit Agreement

Flex Leasing Power & Service Llc

GUARANTORS:
FLEX POWER CO.,
a Delaware corporation
By:	/s/ Darin Romine
Name:	Darin Romine
Title:	Vice President

Signature Page To Credit Agreement

Flex Leasing Power & Service Llc

ADMINISTRATIVE AGENT:
TEXAS CAPITAL BANK, NATIONAL
ASSOCIATION,
as Administrative Agent, Swing Line Lender, L/C
Issuer, and a Lender
By:	/s/ Jeff A. Tompkins
Name:	Jeff A. Tompkins
Title:	Senior Vice President

Signature Page To Credit Agreement

Flex Leasing Power & Service Llc

EX-10.19

Exhibit 10.19

Execution Version

PLEDGE AND SECURITY AGREEMENT

This PLEDGE AND SECURITY AGREEMENT (as it may be amended, restated, supplemented or modified from time to time, this “Security Agreement”) is entered into as of February 8, 2019, by and among each of the undersigned identified on the signature pages hereto as Grantors (together with any other entity that may become a party hereto as provided herein, each a “Grantor, and collectively, the “Grantors”), and TEXAS CAPITAL BANK, NATIONAL ASSOCIATION, in its capacity as administrative agent (the “Administrative Agent”) for the Lenders and the other Secured Parties.

PRELIMINARY STATEMENTS

A.           Reference is made to that certain Credit Agreement dated as of the date hereof, among FLEX LEASING POWER & SERVICE LLC, a Delaware limited liability company (“Company”, and together with any Domestic Subsidiary of Company that becomes party thereto from time to time, each a “Borrower” and collectively, the “Borrowers”), the other Loan Parties from time to time party thereto, the financial institutions from time to time party thereto as lenders (collectively, the “Lenders”) and TEXAS CAPITAL BANK, NATIONAL ASSOCIATION, in its capacity as administrative agent for the Lenders (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), pursuant to which the Lenders have agreed to make loans and other extensions of credit to the Borrowers for the purposes set forth therein.

B.           The Loan Parties and/or certain of their Subsidiaries and certain Bank Product Providers have or may enter into certain Bank Product Agreements, including without limitation, Hedge Agreements (the “Secured Bank Product Agreements”).

C.           The Guarantors have provided a guarantee under the Credit Agreement or may from time to time execute a written guaranty whether by means of a joinder or assumption agreement related thereto or otherwise (such guarantee and such written guaranty, joinders and assumption agreements, as they may from time to time be amended, restated, replaced, modified or supplemented, are collectively the “Guaranty”), pursuant to which, upon the terms and conditions stated therein, the Guarantors party thereto have agreed to guarantee the obligations of the Borrowers and the other Loan Parties under the Credit Agreement, the other Loan Documents and the Secured Bank Product Agreements. The Credit Agreement, the Guaranty, the other Loan Documents and the Secured Bank Product Agreements are collectively referred to herein as the “Secured Transaction Documents”.

D.           The Administrative Agent and the other Secured Parties have conditioned their obligations under the Secured Transaction Documents upon the execution and delivery by the Grantors of this Security Agreement, and the Grantors have agreed to enter into this Security Agreement to secure all obligations owing to the Administrative Agent and the other Secured Parties under the Secured Transaction Documents.

E.            Each Grantor has determined that valuable benefits will be derived by it as a result of the Credit Agreement and the extension of credit made (and to be made) by the Lenders thereunder.

ACCORDINGLY, the Grantors and the Administrative Agent, on behalf of the Secured Parties, hereby agree as follows:

ARTICLE I

DEFINITIONS

1.1           Terms Defined in Credit Agreement. All capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Credit Agreement.

1.2           Terms Defined in UCC. Terms defined in the UCC which are not otherwise defined in this Security Agreement are used herein as defined in the UCC.

1.3           Definitions of Certain Terms Used Herein. As used in this Security Agreement, in addition to the terms defined in the introductory paragraph hereto and in the Preliminary Statements, the following terms shall have the following meanings:

“Account Debtor” means a Person who is obligated on an Account.

“Accounts” shall have the meaning set forth in Article 9 of the UCC.

“Amendment” shall have the meaning set forth in Section 4.4 hereof.

“Article” means a numbered article of this Security Agreement, unless another document is specifically referenced.

“Assigned Contracts” means, collectively, all of the Grantors’ rights and remedies under, and all moneys and claims for money due or to become due to any Grantor under all material contracts, and any and all amendments, supplements, extensions, and renewals thereof including all rights and claims of the Grantors now or hereafter existing: (a) under any insurance, indemnities, warranties, and guarantees provided for or arising out of or in connection with any of the foregoing agreements; (b) for any damages arising out of or for breach or default under or in connection with any of the foregoing contracts; (c) to all other amounts from time to time paid or payable under or in connection with any of the foregoing agreements; or (d) to exercise or enforce any and all covenants, remedies, powers and privileges thereunder.

“Assumption Agreement” means an Assumption Agreement substantially in the form of Annex 1 hereto.

“Chattel Paper” shall have the meaning set forth in Article 9 of the UCC.

“Collateral” shall have the meaning set forth in Article II.

“Collateral Report” means any certificate, report or other document delivered by any Grantor to the Administrative Agent or any Lender with respect to the Collateral pursuant to any Loan Document.

“Commercial Tort Claims” shall have the meaning set forth in Article 9 of the UCC.

“Commodity Account Control Agreement” means an agreement, in form and substance reasonably satisfactory to the Administrative Agent, among any Grantor, a commodity intermediary holding such Grantor’s assets, including funds and commodity contracts, and the Administrative Agent with respect to collection and control of all deposits, commodity contracts and other balances held in a Commodity Account maintained by any Grantor with such commodity intermediary.

“Commodity Accounts” shall have the meaning set forth in Article 9 of the UCC.

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“Control” shall have the meaning set forth in Article 8 or, if applicable, in Section 9.104, 9.105, 9.106 or 9.107 of Article 9 of the UCC.

“Copyrights” means, with respect to any Person, all of such Person’s right, title, and interest in and to the following: (a) all copyrights, rights and interests in copyrights, works protectable by copyright, copyright registrations, and copyright applications; (b) all renewals of any of the foregoing; (c) all income, royalties, damages, and payments now or hereafter due and/or payable under any of the foregoing, including, without limitation, damages or payments for past or future infringements for any of the foregoing; (d) the right to sue for past, present, and future infringements of any of the foregoing; and (e) all rights corresponding to any of the foregoing throughout the world.

“Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

“Deposit Account Control Agreement” means an agreement, in form and substance reasonably satisfactory to the Administrative Agent, among any Grantor, a banking institution holding such Grantor’s funds, and the Administrative Agent with respect to collection and control of all deposits and balances held in a Deposit Account maintained by any Grantor with such banking institution.

“Deposit Accounts” shall have the meaning set forth in Article 9 of the UCC.

“Documents” shall have the meaning set forth in Article 9 of the UCC.

“Effective Date” means (a) with respect to the Borrowers and each other Grantor party hereto on the date hereof, the “Closing Date” as defined in the Credit Agreement, and (b) with respect to each other Grantor, the “Effective Date” as defined in the Assumption Agreement by means of which such Grantor becomes a party hereto.

“Equipment” shall have the meaning set forth in Article 9 of the UCC.

“Event of Default” means an event described in Section 5.1.

“Excluded Payments” shall have the meaning set forth in Section 4.6(c)(iii) hereof.

“Exhibit” refers to a specific exhibit to this Security Agreement (unless another document is specifically referenced) as from time to time supplemented by any Assumption Agreements.

“Fixtures” shall have the meaning set forth in Article 9 of the UCC.

“General Intangibles” shall have the meaning set forth in Article 9 of the UCC.

“Generator Location” means, at any time, any customer location where a Grantor’s Generator Units are in the possession of a customer pursuant to an uptime energy, servicing or lease agreement entered into by a Grantor and such Person in the ordinary course of business.

“Goods” shall have the meaning set forth in Article 9 of the UCC.

“Instruments” shall have the meaning set forth in Article 9 of the UCC.

“Inventory” shall have the meaning set forth in Article 9 of the UCC.

“Investment Property” shall have the meaning set forth in Article 9 of the UCC.

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“Letter-of-Credit Rights” shall have the meaning set forth in Article 9 of the UCC.

“Licenses” means, with respect to any Person, all of such Person’s right, title, and interest in and to (a) any and all licensing agreements or similar arrangements in and to its Patents, Copyrights, or Trademarks, (b) all income, royalties, damages, claims, and payments now or hereafter due or payable under and with respect thereto, including, without limitation, damages and payments for past and future breaches thereof, and (c) all rights to sue for past, present, and future breaches thereof.

“Patents” means, with respect to any Person, all of such Person’s right, title, and interest in and to: (a) any and all patents and patent applications; (b) all inventions and improvements described and claimed therein; (c) all reissues, divisions, continuations, renewals, extensions, and continuations-in-part thereof; (d) all income, royalties, damages, claims, and payments now or hereafter due or payable under and with respect thereto, including, without limitation, damages and payments for past and future infringements thereof; (e) all rights to sue for past, present, and future infringements thereof; and (f) all rights corresponding to any of the foregoing throughout the world.

“Pledged Collateral” means all Instruments, Securities and other Investment Property of the Grantors, whether or not physically delivered to the Administrative Agent pursuant to this Security Agreement.

“Proceeds” shall have the meaning set forth in Article 9 of the UCC and, in any event shall include, without limitation all dividends or other income from the Pledged Collateral, collections thereon and distributions or payments with respect thereto.

“Receivables” means the Accounts, Chattel Paper, Documents, Investment Property, Instruments and any other rights or claims to receive money which are General Intangibles or which are otherwise included as Collateral.

“Section” means a numbered section of this Security Agreement, unless another document is specifically referenced.

“Securities Account Control Agreement” means an agreement, in form and substance reasonably satisfactory to the Administrative Agent, among any Grantor, a securities intermediary holding such Grantor’s assets, including funds and securities, or an issuer of Securities, and the Administrative Agent with respect to collection and control of all deposits, securities and other balances held in a Securities Account maintained by any Grantor with such securities intermediary.

“Securities Accounts” shall have the meaning set forth in Article 8 of the UCC.

“Security” shall have the meaning set forth in Article 8 of the UCC.

“Stock Rights” means all dividends, instruments or other distributions and any other right or property which the Grantors shall receive or shall become entitled to receive for any reason whatsoever with respect to, in substitution for or in exchange for any Equity Interest constituting Collateral, any right to receive an Equity Interest and any right to receive earnings, in which the Grantors now have or hereafter acquire any right, issued by an issuer of such Equity Interest.

“Supporting Obligations” shall have the meaning set forth in Article 9 of the UCC.

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“Trademarks” means, with respect to any Person, all of such Person’s right, title, and interest in and to the following: (a) all trademarks (including service marks), trade names, trade dress, and trade styles and the registrations and applications for registration thereof and the goodwill of the business symbolized by the foregoing; (b) all licenses of the foregoing, whether as licensee or licensor; (c) all renewals of the foregoing; (d) all income, royalties, damages, and payments now or hereafter due or payable with respect thereto, including, without limitation, damages, claims, and payments for past and future infringements thereof; (e) all rights to sue for past, present, and future infringements of the foregoing, including the right to settle suits involving claims and demands for royalties owing; and (f) all rights corresponding to any of the foregoing throughout the world.

“UCC” means the Uniform Commercial Code, as in effect from time to time, of the State of Texas or of any other state the laws of which are required as a result thereof to be applied in connection with the attachment, perfection or priority of, or remedies with respect to, Administrative Agent’s or any Secured Party’s Lien on any Collateral.

The foregoing definitions shall be equally applicable to both the singular and plural forms of the defined terms.

ARTICLE II

GRANT OF SECURITY INTEREST

Each Grantor hereby pledges, assigns and grants to the Administrative Agent, on behalf of and for the ratable benefit of the Secured Parties, a security interest in all of its right, title and interest in, to and under all personal property and other assets, whether now owned by or owing to, or hereafter acquired by or arising in favor of such Grantor (including under any trade name or derivations thereof), and whether owned or consigned by or to, or leased from or to, such Grantor, and regardless of where located (all of which will be collectively referred to as the “Collateral”), including:

(i)             all Pledged Collateral now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title or interest and whether now existing or hereafter coming into existence;

(ii)            all Accounts;

(iii)           all Chattel Paper;

(iv)           all Copyrights, Patents, Trademarks and other intellectual property;

(v)            all Documents;

(vi)           all Equipment;

(vii)          all Fixtures;

(viii)         all General Intangibles;

(ix)           all Goods;

(x)            all Instruments;

(xi)           all Inventory (including Generator Units);

(xii)          all Investment Property;

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(xiii)          all cash or cash equivalents;

(xiv)         all letters of credit, Letter-of-Credit Rights and Supporting Obligations;

(xv)          all Deposit Accounts with any bank or other financial institution;

(xvi)         all Commercial Tort Claims listed on Exhibit J hereto;

(xvii)        all Securities Accounts;

(xviii)       all Commodity Accounts;

(xix)          all Assigned Contracts;

(xx)           all Hedge Agreements; and

(xxi)          all accessions to, substitutions for and replacements, Proceeds (including Stock Rights), insurance proceeds and products of the foregoing, together with all books and records, customer lists, credit files, computer files, programs, printouts and other computer materials and records related thereto and any General Intangibles at any time evidencing or relating to any of the foregoing;

to secure the prompt and complete payment and performance of the Obligations; provided, however, that “Collateral” shall not include any Excluded Assets; and provided further, that (x) Excluded Assets shall not include any proceeds, products, substitutions, or replacements of Excluded Assets unless such proceeds, products, substitutions, or replacements of Excluded Assets would otherwise constitute Excluded Assets and (y) if and when any such item, category or type of property shall cease to be an Excluded Asset, such property shall be deemed at all times from and after such date to constitute Collateral.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

Each Grantor represents and warrants to the Administrative Agent and the Secured Parties that:

3.1           Title, Authorization, Validity, Enforceability, Perfection and Priority. Such Grantor has good and valid rights in or the power to transfer the Collateral and title to the Collateral with respect to which it has purported to grant a security interest hereunder, free and clear of all Liens except for Liens permitted under Section 4.1(e), and has full power and authority to grant to the Administrative Agent the security interest in such Collateral pursuant hereto. The execution and delivery by such Grantor of this Security Agreement has been duly authorized by proper corporate, limited liability company, partnership, or other similar organizational actions, as applicable, of such Grantor, and this Security Agreement constitutes a legal valid and binding obligation of such Grantor and creates a security interest which is enforceable against such Grantor in all Collateral it now owns or hereafter acquires, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law. When financing statements have been filed in the appropriate offices against such Grantor in the locations listed on Exhibit H and this Security Agreement (or other short form security agreement) has been filed in the United States Patent and Trademark Office and the United States Copyright Office, as applicable, and all filing and recordation fees associated therewith have been paid, the Administrative Agent will have a validly perfected first priority security interest in that Collateral of the Grantor in which a security interest may be perfected by filing, subject only to Liens permitted under Section 4.1(e).

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3.2           Type and Jurisdiction of Organization, Organizational and Identification Numbers. The type of entity of such Grantor, its state of organization, the organizational number issued to it by its state of organization and its federal employer identification number are set forth on Exhibit A.

3.3           Principal Location. Such Grantor’s mailing address and the location of its place of business (if it has only one) or its chief executive office (if it has more than one place of business), are disclosed in Exhibit A.

3.4           Collateral Locations. All of such Grantor’s locations where Collateral is located, excluding Generator Locations, are listed on Exhibit A. All of said locations are owned by such Grantor except for locations (a) which are leased by the Grantor as lessee and designated in Part II(b) of Exhibit A and (b) at which Inventory or other Collateral is held in a public warehouse or is otherwise held by a bailee or on consignment as designated in Part II(c) of Exhibit A.

3.5           Deposit Accounts, Commodity Accounts and Securities Accounts. All of such Grantor’s Deposit Accounts, Commodity Accounts and Securities Accounts (including any Excluded Accounts) as of the Effective Date are listed on Exhibit B.

3.6           Exact Names. As of the Effective Date, such Grantor’s name in which it has executed this Security Agreement is the exact name as it appears in such Grantor’s organizational documents, as amended, as filed with such Grantor’s jurisdiction of organization. Except as may be described in Exhibit A, such Grantor has not, during the past five years, been known by or used any other corporate or fictitious name, or been a party to any merger or consolidation, or been a party to any acquisition.

3.7           Letter-of-Credit Rights and Chattel Paper. As of the Effective Date, Exhibit C lists all Letter-of-Credit Rights and Chattel Paper of such Grantor as of the Effective Date. All action by such Grantor necessary or desirable to protect and perfect the Administrative Agent’s Lien on each item listed on Exhibit C (including the delivery of all originals and the placement of a legend on all Chattel Paper as required hereunder) has been duly taken. The Administrative Agent will have a fully perfected first priority security interest in the Collateral listed on Exhibit C, subject only to Liens permitted under Section 4.1(e).

3.8           Accounts and Chattel Paper.

(a)           The names of the obligors, amounts owing, due dates and other information with respect to its Accounts and Chattel Paper are and will be correctly stated in all records of such Grantor relating thereto and in all invoices and Collateral Reports with respect thereto furnished to the Administrative Agent by such Grantor from time to time. As of the time when each Account or each item of Chattel Paper arises, such Grantor shall be deemed to have represented and warranted that such Account or Chattel Paper, as the case may be, and all records relating thereto, are genuine and in all respects what they purport to be.

(b)           With respect to its Accounts, except as specifically disclosed on the most recent Collateral Report, (i) all Accounts are Eligible Accounts; (ii) to such Grantor’s knowledge, there are no facts, events or occurrences which in any way impair the validity or enforceability thereof or could reasonably be expected to reduce the amount payable thereunder as shown on such Grantor’s books and records and any invoices, statements and Collateral Reports with respect thereto; (iii) such Grantor has not received any notice of proceedings or actions which are threatened or pending against any Account Debtor which might result in any adverse change in such Account Debtor’s financial condition; and (iv) such Grantor has no knowledge that any Account Debtor is unable generally to pay its debts as they become due.

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(c)           In addition, with respect to all of its Accounts, (i) the amounts shown on all invoices, statements and Collateral Reports with respect thereto are actually and absolutely owing to such Grantor as indicated thereon and are not in any way contingent; (ii) no payments have been or shall be made thereon except payments immediately delivered to a Blocked Account subject to a Deposit Account Control Agreement as required by Section 2.11 of the Credit Agreement; and (iii) to such Grantor’s knowledge, all Account Debtors have the capacity to contract.

3.9           Inventory. With respect to any Inventory of any Loan Party scheduled or listed on the most recent Collateral Report, (a) such Inventory (other than Inventory in transit, Inventory located at a Generator Location or Inventory subject to maintenance or repair) is located at one of such Grantor’s locations set forth on Exhibit A, (b) no Inventory (other than Inventory in transit, Inventory located at a Generator Location or Inventory subject to maintenance or repair) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the Lien granted to the Administrative Agent, for the benefit of the Administrative Agent and Secured Parties, and except for Permitted Liens, (d) except as specifically disclosed in the most recent Collateral Report delivered to the Administrative Agent, such Inventory is Eligible Inventory, Eligible Generator Units or Eligible New Generator Units, as the case may be and (e) such Inventory is not subject to any licensing, patent, royalty, trademark, trade name or copyright agreements with any third parties which would require any consent of any third party upon sale or disposition of that Inventory or the payment of any monies to any third party upon such sale or other disposition.

3.10         Intellectual Property. As of the Effective Date, such Grantor does not have any interest in, or title to, any Patent, Trademark or Copyright except as set forth in Exhibit D. This Security Agreement is effective to create a valid and continuing Lien and, upon filing of appropriate financing statements in the offices listed on Exhibit H and this Security Agreement (or, if applicable, such short-form intellectual property security agreements as the parties may agree upon) with the United States Copyright Office and the United States Patent and Trademark Office, fully perfected first priority security interests in favor of the Administrative Agent on such Grantor’s Patents, Trademarks and Copyrights, such perfected security interests are enforceable as such as against any and all creditors of and purchasers from such Grantor; and all action necessary or desirable to protect and perfect the Administrative Agent’s Lien on such Grantor’s Patents, Trademarks or Copyrights shall have been duly taken.

3.11         Filing Requirements. As of the Effective Date, none of its Equipment is covered by any certificate of title, except for the Generator Units, vehicles and other rolling stock described in Part I of Exhibit E. None of the Collateral owned by it is of a type for which security interests or liens may be perfected by filing under any federal statute except for (a) the vehicles described in Part II of Exhibit E and (b) Patents, Trademarks and Copyrights held by such Grantor and described in Exhibit D. The legal description, county and street address of each property on which any Fixtures are located is set forth in Exhibit F together with the name and address of the record owner of each such property.

3.12         No Financing Statements, Security Agreements. No financing statement or security agreement describing all or any portion of the Collateral which has not lapsed or been terminated naming such Grantor as debtor has been filed or is of record in any jurisdiction except (a) for financing statements or security agreements naming the Administrative Agent on behalf of the Secured Parties as the secured party and (b) as permitted by Section 4.1(e).

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3.13         Pledged Collateral.

(a)           Exhibit G sets forth a complete and accurate list of all Pledged Collateral owned by such Grantor as of the Effective Date. Such Grantor is the direct, sole beneficial owner and sole holder of record of the Pledged Collateral listed on Exhibit G as being owned by it, free and clear of any Liens, except for the security interest granted to the Administrative Agent for the benefit of the Secured Parties hereunder and except for any Permitted Liens. Such Grantor further represents and warrants that (i) all Pledged Collateral owned by it constituting an Equity Interest has been (to the extent such concepts are relevant with respect to such Pledged Collateral) duly authorized, validly issued, are fully paid and non-assessable, (ii) with respect to any certificates delivered to the Administrative Agent representing an Equity Interest, either such certificates are Securities as defined in Article 8 of the UCC as a result of actions by the issuer or otherwise, or, if such certificates are not Securities, such Grantor has so informed the Administrative Agent so that the Administrative Agent may take steps to perfect its security interest therein as a General Intangible, (iii) all such Pledged Collateral held by a securities intermediary is covered by a Securities Account Control Agreement and (iv) all Pledged Collateral which represents indebtedness owed to such Grantor has been duly authorized, authenticated or issued and delivered by the issuer of such indebtedness, is the legal, valid and binding obligation of such issuer and such issuer is not in default thereunder.

(b)           In addition, (i) none of the Pledged Collateral owned by it has been issued or transferred in violation of the securities registration, securities disclosure or similar laws of any jurisdiction to which such issuance or transfer may be subject, (ii) there are existing no options, warrants, calls or commitments of any character whatsoever relating to such Pledged Collateral or which obligate the issuer of any Equity Interest included in the Pledged Collateral to issue additional Equity Interests, and (iii) no consent, approval, authorization, or other action by, and no giving of notice, filing with, any Governmental Authority or any other Person is required for the pledge by such Grantor of such Pledged Collateral pursuant to this Security Agreement or for the execution, delivery and performance of this Security Agreement by such Grantor, or for the exercise by the Administrative Agent of the voting or other rights provided for in this Security Agreement or for the remedies in respect of the Pledged Collateral pursuant to this Security Agreement, except as may be required in connection with such disposition by laws affecting the offering and sale of securities generally.

(c)           Except as set forth in Exhibit G, as of the Effective Date, such Grantor owns 100% of the issued and outstanding Equity Interests which constitute Pledged Collateral owned by it and none of the Pledged Collateral which represents indebtedness owed to such Grantor is subordinated in right of payment to other indebtedness or subject to the terms of an indenture.

ARTICLE IV

COVENANTS

From the date of this Security Agreement and thereafter until this Security Agreement is terminated pursuant to the terms hereof, each Grantor party hereto as of the date hereof agrees, and from and after the effective date of any Assumption Agreement applicable to any Grantor (and after giving effect to supplements, if any, to each of the Exhibits hereto with respect to such subsequent Grantor as attached to such Assumption Agreement), each such additional Grantor agrees that:

4.1           General.

(a)           Collateral Records. Such Grantor will maintain complete and accurate books and records with respect to the Collateral owned by it, and furnish to the Administrative Agent, with sufficient copies for each of the Lenders, such reports relating to such Collateral as the Administrative Agent shall from time to time request.

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(b)           Authorization to File Financing Statements; Ratification. Such Grantor hereby authorizes the Administrative Agent to file, and if requested will deliver to the Administrative Agent, all financing statements and other documents and take such other actions as may from time to time be requested by the Administrative Agent in order to maintain a perfected, security interest in and, if applicable, Control of, the Collateral owned by such Grantor. Any financing statement filed by the Administrative Agent may be filed in any filing office in any UCC jurisdiction and may (i) indicate such Grantor’s Collateral (A) as all assets of the Grantor or words of similar effect, regardless of whether any particular asset comprised in the Collateral falls within the scope of Article 9 of the UCC or such jurisdiction, or (B) by any other description which reasonably approximates the description contained in this Security Agreement, and (ii) contain any other information required by part 5 of Article 9 of the UCC for the sufficiency or filing office acceptance of any financing statement or amendment, including (A) whether such Grantor is an organization, the type of organization and any organization identification number issued to such Grantor, and (B) in the case of a financing statement filed as a fixture filing or indicating such Grantor’s Collateral as as-extracted collateral or timber to be cut, a sufficient description of real property to which the Collateral relates. Such Grantor also agrees to furnish any such information to the Administrative Agent promptly upon request. Such Grantor also ratifies its authorization for the Administrative Agent to have filed in any UCC jurisdiction any initial financing statements or amendments thereto if filed prior to the date hereof.

(c)           Further Assurances. Such Grantor will, if so requested by the Administrative Agent, furnish to the Administrative Agent, as often as the Administrative Agent requests, statements and schedules further identifying and describing the Collateral owned by it and such other reports and information in connection with its Collateral as the Administrative Agent may reasonably request, all in such detail as the Administrative Agent may specify. Such Grantor also agrees to take any and all actions necessary to defend title to the Collateral against all persons and to defend the security interest of the Administrative Agent in its Collateral and the priority thereof against any Lien not expressly permitted hereunder.

(d)           Disposition of Collateral. Such Grantor will not sell, lease or otherwise dispose of the Collateral owned by it except for dispositions specifically permitted pursuant to Section 7.8 of the Credit Agreement.

(e)           Liens. Such Grantor will not create, incur, or suffer to exist any Lien on the Collateral owned by it except (i) the security interest created by this Security Agreement, and (ii) other Permitted Liens.

(f)            Other Financing Statements. Such Grantor will not authorize the filing of any financing statement naming it as debtor covering all or any portion of the Collateral owned by it, except as permitted by Section 4.1(e). Such Grantor acknowledges that it is not authorized to file any financing statement or amendment or termination statement with respect to any financing statement without the prior written consent of the Administrative Agent, subject to such Grantor’s rights under Section 9.509(d)(2) of the UCC.

(g)           Locations. Such Grantor will not (i) maintain any Collateral owned by it (other than Collateral in transit and Collateral subject to maintenance or repair) at any location other than those locations listed on Exhibit A and Generator Locations, (ii) otherwise change, or add to, such locations (other than Generator Locations) without the Administrative Agent’s prior written consent as required by the Credit Agreement (and if the Administrative Agent gives such consent, such Grantor will concurrently therewith obtain a Collateral Access Agreement for each such location to the extent required by Section 4.13), or (iii) change its principal place of business or chief executive office from the location identified on Exhibit A, other than as permitted by Section 4.15 and the Credit Agreement.

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(h)           Compliance with Terms. Such Grantor will perform and comply with all obligations in respect of the Collateral owned by it and all agreements to which it is a party or by which it is bound relating to such Collateral.

4.2           Receivables.

(a)           Certain Agreements on Receivables. Such Grantor will not make or agree to make any discount, credit, rebate or other reduction in the original amount owing on a Receivable or accept in satisfaction of a Receivable less than the original amount thereof, except that, prior to the occurrence of an Event of Default, such Grantor may reduce the amount of Accounts arising from the sale of Inventory in accordance with its present policies and in the ordinary course of business.

(b)           Collection of Receivables. Except as otherwise provided in this Security Agreement, such Grantor will collect and enforce, at such Grantor’s sole expense, all amounts due or hereafter due to such Grantor under the Receivables owned by it.

(c)           Delivery of Invoices. Promptly after the request of the Administrative Agent, such Grantor will deliver to the Administrative Agent duplicate invoices with respect to each Account owned by it bearing such language of assignment as the Administrative Agent shall specify.

(d)           Disclosure of Counterclaims on Receivables. If (i) any discount, credit or agreement to make a rebate or to otherwise reduce the amount owing on any Receivable owned by such Grantor exists and such discount, credit or rebate exceeds $50,000 or (ii) if, to the knowledge of such Grantor, any dispute, setoff, claim, counterclaim or defense exists or has been asserted or threatened with respect to any such Receivable is in excess of $50,000 individually and $150,000 in the aggregate, such Grantor will promptly disclose such fact to the Administrative Agent in the next Borrowing Base Report submitted by it.

(e)           Electronic Chattel Paper. Such Grantor shall take all steps necessary to grant the Administrative Agent Control of all electronic chattel paper in accordance with the UCC and all “transferable records” as defined in each of the Uniform Electronic Transactions Act and the Electronic Signatures in Global and National Commerce Act.

4.3           Inventory and Equipment.

(a)           Maintenance of Goods. Such Grantor will do all things necessary to maintain, preserve, protect and keep its Inventory in saleable condition and its Equipment in good repair and working and saleable condition, except for damaged or defective goods and consumption of Inventory arising in the ordinary course of such Grantor’s business and except for ordinary wear and tear in respect of the Equipment.

(b)           Returned Inventory. All returned Inventory shall be subject to the Administrative Agent’s Liens thereon. Whenever any Inventory is returned, the related Account shall be deemed ineligible to the extent of the amount owing by the Account Debtor with respect to such returned Inventory.

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(c)           Equipment. Such Grantor shall not permit any Equipment to become a fixture with respect to real property or to become an accession with respect to other personal property with respect to which real or personal property the Administrative Agent does not have a Lien. Such Grantor will not, without the Administrative Agent’s prior written consent (such consent not to be unreasonably withheld, conditioned or delayed), alter or remove any identifying symbol or number on any of such Grantor’s Equipment constituting Collateral. Such Grantor will maintain a perpetual Inventory reporting system at all times.

(d)           Certificated Generator Units, Vehicles and other Rolling Stock. Within 30 days (or such later date agreed to by the Administrative Agent) after (i) the Effective Date with respect to each of the Generator Units, vehicles or other rolling stock covered by a certificate of title set forth on Exhibit E hereto as of the Effective Date or (ii) the date upon which any Grantor acquires a Generator Unit, vehicle or other rolling stock covered by a certificate of title after the Effective Date, the applicable Grantor will deliver to the Administrative Agent or its agent or other designee, the original certificate of title of any Generator Unit, vehicle or other rolling stock title certificate, and, in each case, provide and/or file all other documents or instruments necessary to have the Lien of the Administrative Agent noted on any such certificate or with the appropriate state office. Notwithstanding the foregoing, the Grantors shall not be required to deliver to the Administrative Agent the original certificates of title with respect to any vehicles and other rolling stock that are not included in the Borrowing Base with an aggregate net book value of $250,000.

4.4           Delivery of Instruments, Securities, Chattel Paper and Documents. Such Grantor will (a) subject to Section 6.17 of the Credit Agreement, deliver to the Administrative Agent immediately upon execution of this Security Agreement, the originals of all certificated Securities constituting Collateral owned by it on the Effective Date (if any then exist), (b) deliver to the Administrative Agent immediately upon execution of this Security Agreement, the originals of all Chattel Paper and other Instruments, in each case with a value in excess of $50,000, constituting Collateral owned by it on the Effective Date (if any then exist), (c) hold in trust for the Administrative Agent upon receipt and immediately thereafter deliver to the Administrative Agent (i) any such Securities constituting Collateral or (ii) any such Chattel Paper and Instruments, in each case, with a value in excess of $50,000, constituting Collateral, (d) not permit the aggregate value of all Chattel Paper and other Instruments constituting Collateral and owned by the Grantors for which the originals have not been delivered to the Administrative Agent pursuant to the foregoing clauses (b) and (c)(ii) to exceed $100,000, (e) promptly within five Business Days of the Administrative Agent’s request, deliver to the Administrative Agent (and thereafter hold in trust for the Administrative Agent upon receipt and immediately deliver to the Administrative Agent) any Document evidencing or constituting Collateral, (f) mark conspicuously all original Chattel Paper, Instruments and Documents (other than any delivered to the Administrative Agent) with an appropriate reference to the security interest of the Administrative Agent and (g) promptly within five Business Days of the Administrative Agent’s request, deliver to the Administrative Agent a duly executed amendment to this Security Agreement, in the form of Exhibit I hereto (the “Amendment”), pursuant to which such Grantor will pledge such additional Collateral. Such Grantor hereby authorizes the Administrative Agent to attach each Amendment to this Security Agreement and agrees that all additional Collateral owned by it set forth in such Amendments shall be considered to be part of the Collateral.

4.5           Uncertificated Pledged Collateral. Such Grantor will permit the Administrative Agent from time to time to cause the appropriate issuers (and, if held with a securities intermediary, such securities intermediary) of uncertificated securities or other types of Pledged Collateral owned by it not represented by certificates to mark their books and records with the numbers and face amounts of all such uncertificated securities or other types of Pledged Collateral not represented by certificates and all rollovers and replacements therefor to reflect the Lien of the Administrative Agent granted pursuant to this Security Agreement. With respect to any Pledged Collateral owned by it, such Grantor will take any actions necessary to cause (a) the issuers of uncertificated securities which are Pledged Collateral and (b) any securities intermediary which is the holder of any such Pledged Collateral, to cause the Administrative Agent to have and retain Control over such Pledged Collateral. Without limiting the foregoing, such Grantor will, with respect to any such Pledged Collateral held with a securities intermediary, cause such securities intermediary to enter into a Securities Account Control Agreement unless such Pledged Collateral is held in an Excluded Account.

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4.6           Pledged Collateral.

(a)           Grantors as Issuers. In the case of each Grantor that is an issuer of Pledged Collateral, such Grantor agrees that it will be bound by the terms of this Security Agreement relating to the Pledged Collateral issued by it and will comply with such terms insofar as such terms are applicable to it.

(b)           Registration of Pledged Collateral. Such Grantor will permit any registerable Pledged Collateral owned by it to be registered in the name of the Administrative Agent or its nominee at any time at the option of the Required Lenders.

(c)           Exercise of Rights in Pledged Collateral.

(i)           Without in any way limiting the foregoing and subject to clause (ii) below, such Grantor shall have the right to exercise all voting rights or other rights relating to the Pledged Collateral owned by it for all purposes not inconsistent with this Security Agreement, the Credit Agreement, the Intercreditor Agreement or any other Loan Document; provided however, that no vote or other right shall be exercised or action taken which would have the effect of impairing the rights of the Administrative Agent in respect of such Pledged Collateral;

(ii)           Such Grantor will permit the Administrative Agent or its nominee at any time after the occurrence of an Event of Default, without notice and so long as the Obligations have been accelerated (upon demand or otherwise) pursuant to Section 9.2 of the Credit Agreement, to exercise all voting rights or other rights relating to the Pledged Collateral owned by it, including, without limitation, exchange, subscription or any other rights, privileges, or options pertaining to any Equity Interest or Investment Property constituting such Pledged Collateral as if it were the absolute owner thereof;

(iii)          Such Grantor shall be entitled to collect and receive for its own use all cash dividends and interest paid in respect of the Pledged Collateral owned by it to the extent not in violation of the Credit Agreement other than any of the following distributions and payments (collectively referred to as the “Excluded Payments”): (A) dividends and interest paid or payable other than in cash in respect of such Pledged Collateral, and instruments and other property received, receivable or otherwise distributed in respect of, or in exchange for, any Pledged Collateral; (B) dividends and other distributions paid or payable in cash in respect of such Pledged Collateral in connection with a partial or total liquidation or dissolution or in connection with a reduction of capital, capital surplus or paid-in capital of an issuer; and (C) cash paid, payable or otherwise distributed, in respect of principal of, or in redemption of, or in exchange for, such Pledged Collateral; provided however, that until actually paid, all rights to such distributions shall remain subject to the Lien created by this Security Agreement; and

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(iv)           All Excluded Payments and all other distributions in respect of any of the Pledged Collateral owned by such Grantor, whenever paid or made, shall be delivered to the Administrative Agent to hold as Pledged Collateral and shall, if received by such Grantor, be received in trust for the benefit of the Administrative Agent, be segregated from the other property or funds of such Grantor and be forthwith delivered to the Administrative Agent as Pledged Collateral in the same form as so received (with any necessary endorsement).

4.7           Intellectual Property.

(a)           If requested by the Administrative Agent, such Grantor will use commercially reasonable efforts to secure all consents and approvals necessary or appropriate for the assignment to or benefit of the Administrative Agent of any License held by such Grantor and to enforce the security interests granted hereunder.

(b)           Such Grantor shall notify the Administrative Agent immediately if it knows or has reason to know that any application or registration relating to any Patent, Trademark or Copyright (now or hereafter existing) may become abandoned or dedicated, or of any adverse determination or development (including the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office, the United States Copyright Office or any court) regarding such Grantor’s ownership of any Patent, Trademark or Copyright, its right to register the same, or to keep and maintain the same.

(c)           In no event shall such Grantor, either directly or through any agent, employee, licensee or designee, file an application for the registration of any Patent, Trademark or Copyright with the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency without giving the Administrative Agent prior written notice thereof, and, upon request of the Administrative Agent, such Grantor shall execute and deliver any and all security agreements as the Administrative Agent may request to evidence the Administrative Agent’s first priority security interest on such Patent, Trademark or Copyright, and the General Intangibles of such Grantor relating thereto or represented thereby.

(d)           Such Grantor shall take all actions necessary or requested by the Administrative Agent to maintain and pursue each application, to obtain the relevant registration and to maintain the registration of each of its Patents, Trademarks and Copyrights (now or hereafter existing), including the filing of applications for renewal, affidavits of use, affidavits of noncontestability and opposition and interference and cancellation proceedings, unless such Grantor and the Administrative Agent shall determine that such Patent, Trademark or Copyright is not material to the conduct of such Grantor’s business.

(e)           Such Grantor shall, unless it shall reasonably determine that such Patent, Trademark or Copyright is in no way material to the conduct of its business or operations, promptly sue for infringement, misappropriation or dilution and to recover any and all damages for such infringement, misappropriation or dilution, and shall take such other actions as the Administrative Agent shall deem appropriate under the circumstances to protect such Patent, Trademark or Copyright. In the event that such Grantor institutes suit because any of its Patents, Trademarks or Copyrights constituting Collateral is infringed upon, or misappropriated or diluted by a third party, such Grantor shall comply with Section 4.8.

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4.8           Commercial Tort Claims. Such Grantor shall (a) promptly, and in any event within two Business Days after the same is acquired by it, notify the Administrative Agent of any commercial tort claim (as defined in the UCC) acquired by it that could reasonably be expected to result in a judgment or settlement in such Grantor’s favor in excess of $50,000 and, unless the Administrative Agent otherwise consents, such Grantor shall enter into an amendment to this Security Agreement, in the form of Exhibit I hereto, granting to Administrative Agent a first priority security interest in such Commercial Tort Claim and (b) not permit the aggregate expected amount of judgments or settlements in favor of the Grantors in respect of all Commercial Tort Claims for which the Administrative Agent has not been granted a first priority security interest pursuant to clause (a) to exceed $100,000.

4.9           Letter-of-Credit Rights. If such Grantor is or becomes the beneficiary of a letter of credit with a face amount in excess of $50,000, it shall promptly, and in any event within two Business Days after becoming a beneficiary, notify the Administrative Agent thereof and cause the issuer and/or confirmation bank to (a) consent to the assignment of any Letter-of-Credit Rights to the Administrative Agent and (b) agree to direct all payments thereunder to a Blocked Account for application to the Obligations, in accordance with Section 2.5(d) of the Credit Agreement, all in form and substance reasonably satisfactory to the Administrative Agent. No Grantor shall permit the aggregate face amounts of all letters of credit for which the Grantors are beneficiary and for which the applicable Grantor has not taken the steps set forth in the immediately preceding sentence to exceed $100,000.

4.10         Federal, State or Municipal Claims. Such Grantor will promptly notify the Administrative Agent of any Collateral which constitutes a claim against the United States government or any state or local government or any instrumentality or agency thereof, the assignment of which claim is restricted by federal, state or municipal law.

4.11         No Interference. Such Grantor agrees that it will not interfere with any right, power and remedy of the Administrative Agent provided for in this Security Agreement or now or hereafter existing at law or in equity or by statute or otherwise, or the exercise or beginning of the exercise by the Administrative Agent of any one or more of such rights, powers or remedies.

4.12         Insurance. Each Grantor shall maintain insurance in accordance with the requirements of Section 6.5 of the Credit Agreement. All premiums on any such insurance shall be paid when due by such Grantor, and copies of the policies delivered to the Administrative Agent. If such Grantor fails to obtain any insurance as required by this Section, the Administrative Agent may obtain such insurance at such Grantor’s expense. By purchasing such insurance, the Administrative Agent shall not be deemed to have waived any Default arising from such Grantor’s failure to maintain such insurance or pay any premiums therefor.

4.13        Collateral Access Agreements.

(a)           For any location leased by a Grantor or where any Inventory of such Grantor is in the possession or control of any Person other than a Grantor or any of its Subsidiaries (other than a Generator Location), such Grantor shall obtain Collateral Access Agreements in accordance with Section 6.14 of the Credit Agreement; provided that to the extent a Collateral Access Agreement has not been provided for such location, a Rent Reserve for rent, charges and other amounts due or to become due with respect to such location may be established by the Administrative Agent in its Permitted Discretion. Such Grantor shall timely and fully pay and perform its obligations under all leases and other agreements with respect to each leased location or third-party warehouse where any Collateral is or may be located.

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(b)           For each Generator Location, such Grantor (i) shall not prepare, draft, amend, supplement or modify any uptime energy, servicing or lease agreement for any Generator Unit in a manner that adversely affects the rights and security interests of the Administrative Agent hereunder, and (ii) with respect to any uptime energy, servicing or lease agreement for any Generator Units entered into by such Grantor after the Closing Date for any Generator Location, such Grantor shall use commercially reasonable efforts to include the following provision or a similar provision reasonably acceptable to the Administrative Agent in each such uptime energy, servicing or lease agreement: “Customer shall provide Flex Leasing Power & Service LLC, a Delaware limited liability company (“Company”), and its officers, representatives, agents and lenders with access to the site at all times while Company’s Equipment is present on Customer’s locations; provided that, any party not an officer, representative or agent of Company shall (i) not enter the site without the prior consent of Customer, which consent shall not be unreasonably withheld; (ii) adhere to the safety requirements of Customer and Company; and (iii) be accompanied by an officer, representative or agent of Company at all times.”

4.14         Control Agreements. Subject to Section 6.12 of the Credit Agreement, for each Deposit Account, Securities Account and Commodity Account (other than Excluded Accounts) that such Grantor at any time maintains, such Grantor will, substantially contemporaneously with the opening of such Deposit Account, Securities Account or Commodity Account (other than Excluded Accounts), pursuant to a Control Agreement in form and substance satisfactory to the Administrative Agent, pursuant to which such Control Agreement shall cause the depository bank that maintains such Deposit Account, securities intermediary that maintains such Securities Account, or commodities intermediary that maintains such Commodity Account, as applicable, to agree to comply at any time with instructions from the Administrative Agent to such depository bank, securities intermediary or commodities intermediary directing the disposition of funds from time to time credited to such Deposit Account, Securities Account or Commodity Account, without further consent of such Grantor, or take such other action as the Administrative Agent may approve in order to perfect the Administrative Agent’s security interest in such Deposit Account, Securities Account or Commodity Account.

4.15         Change of Name or Location; etc. Such Grantor shall not (a) change its name as it appears in official filings in the state of its incorporation or organization, (b) change its chief executive office, principal place of business or mailing address, (c) change the type of entity that it is, (d) change its organization identification number, if any, issued by its state of incorporation or other organization, or (e) change its state of incorporation or organization, in each case, unless the Administrative Agent shall have received at least thirty (30) days prior written notice of such change and the Administrative Agent shall have acknowledged in writing that either (1) such change will not adversely affect the validity, perfection or priority of the Administrative Agent’s security interest in the Collateral, or (2) any reasonable action requested by the Administrative Agent in connection therewith has been completed or taken (including any action to continue the perfection of any Liens in favor of the Administrative Agent, on behalf of the Secured Parties, in any Collateral), provided that, any new location shall be in the continental U.S. Such Grantor shall not change its fiscal year which currently ends on December 31 without the prior written consent of the Administrative Agent.

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4.16         Assigned Contracts. If requested by the Administrative Agent, such Grantor will use commercially reasonable efforts to secure all consents and approvals necessary or appropriate for the assignment to or for the benefit of the Administrative Agent of any Assigned Contract held by such Grantor and to enforce the security interests granted hereunder. Such Grantor shall fully perform all of its obligations under each of its Assigned Contracts, and shall enforce all of its rights and remedies thereunder, in each case, as it deems appropriate in its business judgment; provided however, that such Grantor shall not take any action or fail to take any action with respect to its Assigned Contracts which would cause the termination of an Assigned Contract. Without limiting the generality of the foregoing, such Grantor shall take all action necessary or appropriate to permit, and shall not take any action which would have any materially adverse effect upon, the full enforcement of all indemnification rights under its Assigned Contracts. Such Grantor shall notify the Administrative Agent and the Lenders in writing, promptly after such Grantor becomes aware thereof, of any event or fact which could give rise to a material claim by it for indemnification under any of its Assigned Contracts, and shall diligently pursue such right and report to the Administrative Agent on all further developments with respect thereto. Such Grantor shall deposit into a Deposit Account subject to a Deposit Account Control Agreement, all amounts received by such Grantor as indemnification or otherwise pursuant to its Assigned Contracts. If such Grantor shall fail after the Administrative Agent’s demand to pursue diligently any right under its Assigned Contracts, or if an Event of Default then exists, the Administrative Agent may, and at the direction of the Required Lenders shall, directly enforce such right in its own or such Grantor’s name and may enter into such settlements or other agreements with respect thereto as the Administrative Agent or the Required Lenders, as applicable, shall determine. In any suit, proceeding or action brought by the Administrative Agent for the benefit of the Secured Parties under any Assigned Contract for any sum owing thereunder or to enforce any provision thereof, such Grantor shall indemnify and hold the Administrative Agent and Secured Parties harmless from and against all expense, loss or damage suffered by reason of any defense, setoff, counterclaims, recoupment, or reduction of liability whatsoever of the obligor thereunder arising out of a breach by such Grantor of any obligation thereunder or arising out of any other agreement, indebtedness or liability at any time owing from such Grantor to or in favor of such obligor or its successors. All such obligations of such Grantor shall be and remain enforceable only against such Grantor and shall not be enforceable against the Administrative Agent or the Secured Parties. Notwithstanding any provision hereof to the contrary, such Grantor shall at all times remain liable to observe and perform all of its duties and obligations under its Assigned Contracts, and the Administrative Agent’s or any Secured Party’s exercise of any of their respective rights with respect to the Collateral shall not release such Grantor from any of such duties and obligations. Neither the Administrative Agent nor any Secured Party shall be obligated to perform or fulfill any of such Grantor’s duties or obligations under its Assigned Contracts or to make any payment thereunder, or to make any inquiry as to the nature or sufficiency of any payment or property received by it thereunder or the sufficiency of performance by any party thereunder, or to present or file any claim, or to take any action to collect or enforce any performance, any payment of any amounts, or any delivery of any property.

4.17         Additional Grantors. Each Grantor agrees to cause each Domestic Subsidiary of Company that is required to become a party to this Security Agreement pursuant to Section 6.13(a) of the Credit Agreement to become a Grantor for all purposes of this Security Agreement upon execution and delivery by such Domestic Subsidiary of an Assumption Agreement in the form of Annex 1 hereto.

ARTICLE V

EVENTS OF DEFAULT AND REMEDIES

5.1           Events of Default. The occurrence of any one or more of the following events shall constitute an Event of Default hereunder:

(a)           Any representation or warranty made by or on behalf of any Grantor under or in connection with this Security Agreement shall be materially false as of the date on which made.

(b)           The breach by any Grantor of any of the terms or provisions of Article IV.

(c)           The breach by any Grantor (other than a breach which constitutes an Event of Default under any other Section of this Article V) of any of the terms or provisions of this Security Agreement which is not remedied within ten days after such breach.

(d)           The occurrence of any “Event of Default” under, and as defined in, the Credit Agreement.

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(e)           Any Equity Interest which is included within the Collateral shall at any time constitute a Security or the issuer of any such Equity Interest shall take any action to have such interests treated as a Security unless (i) all certificates or other documents constituting such Security have been delivered to the Administrative Agent and such Security is properly defined as such under Article 8 of the UCC of the applicable jurisdiction, whether as a result of actions by the issuer thereof or otherwise, or (ii) the Administrative Agent has entered into a Securities Account Control Agreement with the issuer of such Security or with a securities intermediary relating to such Security and such Security is defined as such under Article 8 of the UCC of the applicable jurisdiction, whether as a result of actions by the issuer thereof or otherwise.

5.2           Remedies.

(a)           Upon the occurrence of an Event of Default, the Administrative Agent may, or at the direction of the Required Lenders, shall exercise any or all of the following rights and remedies:

(i)             those rights and remedies provided in this Security Agreement, the Credit Agreement, or any other Loan Document; provided that, this Section 5.2(a) shall not be understood to limit any rights or remedies available to the Administrative Agent and the Secured Parties prior to an Event of Default;

(ii)            those rights and remedies available to a secured party under the UCC (whether or not the UCC applies to the affected Collateral) or under any other applicable law (including, without limitation, any law governing the exercise of a bank’s right of setoff or bankers’ lien) when a debtor is in default under a security agreement;

(iii)           give notice of sole control or any other instruction under any Control Agreement and take any action therein with respect to such Collateral;

(iv)           without notice (except as specifically provided in Section 7.1 or elsewhere herein), demand or advertisement of any kind to any Grantor or any other Person, enter the premises of any Grantor where any Collateral is located (through self-help and without judicial process) to collect, receive, assemble, process, appropriate, sell, lease, assign, grant an option or options to purchase or otherwise dispose of, deliver, or realize upon, the Collateral or any part thereof in one or more parcels at public or private sale or sales (which sales may be adjourned or continued from time to time with or without notice and may take place at any Grantor’s premises or elsewhere), for cash, on credit or for future delivery without assumption of any credit risk, and upon such other terms as the Administrative Agent may deem commercially reasonable; and

(v)            so long as the Obligations have been accelerated (upon demand or otherwise) pursuant to Section 9.2 of the Credit Agreement, concurrently with written notice to the applicable Grantor, transfer and register in its name or in the name of its nominee the whole or any part of the Pledged Collateral, to exchange certificates or instruments representing or evidencing Pledged Collateral for certificates or instruments of smaller or larger denominations, to exercise the voting and all other rights as a holder with respect thereto, to collect and receive all cash dividends, interest, principal and other distributions made thereon and to otherwise act with respect to the Pledged Collateral as though the Administrative Agent was the outright owner thereof.

(b)           The Administrative Agent, on behalf of the Secured Parties, may comply with any applicable state or federal law requirements in connection with a disposition of the Collateral and compliance will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral.

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(c)           The Administrative Agent shall have the right upon any such public sale or sales and, to the extent permitted by law, upon any such private sale or sales, to purchase for the benefit of the Administrative Agent and the Secured Parties, the whole or any part of the Collateral so sold, free of any right of equity redemption, which equity redemption the Grantor hereby expressly releases.

(d)           Until the Administrative Agent is able to effect a sale, lease, or other disposition of Collateral, the Administrative Agent shall have the right to hold or use Collateral, or any part thereof, to the extent that it deems appropriate for the purpose of preserving Collateral or its value or for any other purpose deemed appropriate by the Administrative Agent. The Administrative Agent may, if it so elects, seek the appointment of a receiver or keeper to take possession of Collateral and to enforce any of the Administrative Agent’s remedies (for the benefit of the Administrative Agent and Secured Parties), with respect to such appointment without prior notice or hearing as to such appointment.

(e)           Notwithstanding the foregoing, neither the Administrative Agent nor any Secured Party shall be required to (i) make any demand upon, or pursue or exhaust any of their rights or remedies against, any Grantor, any other obligor, guarantor, pledgor or any other Person with respect to the payment of the Obligations or to pursue or exhaust any of their rights or remedies with respect to any Collateral therefor or any direct or indirect guarantee thereof, (ii) marshal the Collateral or any guarantee of the Obligations or to resort to the Collateral or any such guarantee in any particular order, or (iii) effect a public sale of any Collateral.

(f)            Each Grantor recognizes that the Administrative Agent may be unable to effect a public sale of any or all the Pledged Collateral and may be compelled to resort to one or more private sales thereof in accordance with clause (a) above. Each Grantor also acknowledges that any private sale may result in prices and other terms less favorable to the seller than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall not be deemed to have been made in a commercially unreasonable manner solely by virtue of such sale being private. The Administrative Agent shall be under no obligation to delay a sale of any of the Pledged Collateral for the period of time necessary to permit any Grantor or the issuer of the Pledged Collateral to register such securities for public sale under the Securities Act of 1933, as amended, or under applicable state securities laws, even if the applicable Grantor and the issuer would agree to do so.

5.3           Grantor’s Obligations Upon Event of Default. Upon the request of the Administrative Agent after the occurrence and during the continuance of an Event of Default, each Grantor will:

(a)           assemble and make available to the Administrative Agent the Collateral and all books and records relating thereto at any place or places specified by the Administrative Agent, whether at a Grantor’s premises or elsewhere;

(b)           permit the Administrative Agent, by the Administrative Agent’s representatives and agents, to enter, occupy and use any premises where all or any part of the Collateral, or the books and records relating thereto, or both, are located, to take possession of all or any part of the Collateral or the books and records relating thereto, or both, to remove all or any part of the Collateral or the books and records relating thereto, or both, and to conduct sales of the Collateral, without any obligation to pay the Grantor for such use and occupancy; and

(c)           at its own expense, cause the independent certified public accountants then engaged by each Grantor to prepare and deliver to the Administrative Agent and each Lender, at any time, and from time to time, promptly upon the Administrative Agent’s request, the following reports with respect to the applicable Grantor: (i) a reconciliation of all Accounts; (ii) an aging of all Accounts; (iii) trial balances; and (iv) a test verification of such Accounts.

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5.4           Grant of Intellectual Property License. For the purpose of enabling the Administrative Agent to exercise the rights and remedies under this Article V, each Grantor hereby (a) grants to the Administrative Agent, for the benefit of the Administrative Agent and the Secured Parties, an irrevocable, nonexclusive license (exercisable without payment of royalty or other compensation to any Grantor) to use, license or sublicense any intellectual property rights now owned or hereafter acquired by such Grantor, and wherever the same may be located, and including in such license access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof and (b) irrevocably agrees that the Administrative Agent may sell any of such Grantor’s Inventory directly to any person, including without limitation persons who have previously purchased the Grantor’s Inventory from such Grantor and in connection with any such sale or other enforcement of the Administrative Agent’s rights under this Security Agreement, may sell Inventory which bears any Trademark owned by or licensed to such Grantor and any Inventory that is covered by any Copyright owned by or licensed to such Grantor and the Administrative Agent may (but shall have no obligation to) finish any work in process and affix any Trademark owned by or licensed to such Grantor and sell such Inventory as provided herein.

ARTICLE VI

ACCOUNT VERIFICATION; ATTORNEY IN FACT; PROXY

6.1           Account Verification. The Administrative Agent may at any time, in the Administrative Agent’s own name, in the name of a nominee of the Administrative Agent, or in the name of any Grantor communicate (by mail, telephone, facsimile or otherwise) with the Account Debtors of any such Grantor, parties to contracts with any such Grantor and obligors in respect of Instruments of any such Grantor to verify with such Persons, to the Administrative Agent’s satisfaction, the existence, amount, terms of, and any other matter relating to, Accounts, Instruments, Chattel Paper, payment intangibles and/or other Receivables.

6.2           Authorization for Secured Party to Take Certain Action.

(a)           Each Grantor irrevocably authorizes the Administrative Agent at any time and from time to time in the sole discretion of the Administrative Agent and appoints the Administrative Agent as its attorney in fact (i) to execute on behalf of such Grantor as debtor and to file financing statements necessary or desirable in the Administrative Agent’s sole discretion to perfect and to maintain the perfection and priority of the Administrative Agent’s security interest in the Collateral, (ii) to endorse and collect any cash proceeds of the Collateral, (iii) to file a carbon, photographic or other reproduction of this Security Agreement or any financing statement with respect to the Collateral as a financing statement and to file any other financing statement or amendment of a financing statement (which does not add new collateral or add a debtor) in such offices as the Administrative Agent in its sole discretion deems necessary or desirable to perfect and to maintain the perfection and priority of the Administrative Agent’s security interest in the Collateral, (iv) to contact and enter into one or more agreements with the issuers of uncertificated securities which are Pledged Collateral or with securities intermediaries holding Pledged Collateral as may be necessary or advisable to give the Administrative Agent Control over such Pledged Collateral, (v) to apply the proceeds of any Collateral received by the Administrative Agent to the Obligations as provided in Section 2.5(d) of the Credit Agreement, (vi) to discharge past due taxes, assessments, charges, fees or Liens on the Collateral (except for such Liens as are specifically permitted hereunder), (vii) to contact Account Debtors for any reason, (viii) to demand payment or enforce payment of the Receivables in the name of the Administrative Agent or such Grantor and to endorse any and all checks, drafts, and other instruments for the payment of money relating to the Receivables, (ix) to sign such Grantor’s name on any invoice or bill of lading relating to the Receivables, drafts against any Account Debtor of the Grantor, assignments and verifications of Receivables, (x) to exercise all of such Grantor’s rights and remedies with respect to the collection of the Receivables and any other Collateral, (xi) to settle, adjust, compromise, extend or renew the Receivables, (xii) to settle, adjust or compromise any legal proceedings brought to collect Receivables, (xiii) to prepare, file and sign such Grantor’s name on a proof of claim in bankruptcy or similar document against any Account Debtor of such Grantor, (xiv) to prepare, file and sign such Grantor’s name on any notice of Lien, assignment or satisfaction of Lien or similar document in connection with the Receivables, (xv) to change the address for delivery of mail addressed to such Grantor to such address as the Administrative Agent may designate and to receive, open and dispose of all mail addressed to such Grantor, and (xvi) to do all other acts and things necessary to carry out this Security Agreement; and such Grantor agrees to reimburse the Administrative Agent on demand for any payment made or any expense incurred by the Administrative Agent in connection with any of the foregoing; provided that, this authorization shall not relieve such Grantor of any of its obligations under this Security Agreement, the Credit Agreement or under any other Loan Document.

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(b)           All acts of said attorney or designee are hereby ratified and approved. The powers conferred on the Administrative Agent, for the benefit of the Administrative Agent and Secured Parties, under this Section 6.2 are solely to protect the Administrative Agent’s interests in the Collateral and shall not impose any duty upon the Administrative Agent or any Secured Party to exercise any such powers. The Administrative Agent agrees that, except for the powers granted in Section 6.2(a)(i) through (vi) and Section 6.2(a)(xvi), it shall not exercise any power or authority granted to it unless an Event of Default has occurred and is continuing.

6.3           Proxy. EACH GRANTOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS THE ADMINISTRATIVE AGENT AS ITS PROXY AND ATTORNEY-IN-FACT (AS SET FORTH IN SECTION 6.2 ABOVE) WITH RESPECT TO ITS PLEDGED COLLATERAL, INCLUDING THE RIGHT TO VOTE SUCH PLEDGED COLLATERAL, WITH FULL POWER OF SUBSTITUTION TO DO SO. IN ADDITION TO THE RIGHT TO VOTE ANY SUCH PLEDGED COLLATERAL, THE APPOINTMENT OF THE ADMINISTRATIVE AGENT AS PROXY AND ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF SUCH PLEDGED COLLATERAL WOULD BE ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF SHAREHOLDERS, CALLING SPECIAL MEETINGS OF SHAREHOLDERS AND VOTING AT SUCH MEETINGS). SUCH PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF ANY SUCH PLEDGED COLLATERAL ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON (INCLUDING THE ISSUER OF SUCH PLEDGED COLLATERAL OR ANY OFFICER OR AGENT THEREOF), UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT.

6.4           Nature of Appointment; Limitation of Duty. THE APPOINTMENT OF THE ADMINISTRATIVE AGENT AS PROXY AND ATTORNEY-IN-FACT IN THIS ARTICLE VI IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE DATE ON WHICH THIS SECURITY AGREEMENT IS TERMINATED IN ACCORDANCE WITH SECTION 7.14. NOTWITHSTANDING ANYTHING CONTAINED HEREIN, NEITHER THE ADMINISTRATIVE AGENT, NOR ANY SECURED PARTY, NOR ANY OF THEIR RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES SHALL HAVE ANY DUTY TO EXERCISE ANY RIGHT OR POWER GRANTED HEREUNDER OR OTHERWISE OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE FOR ANY FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO, EXCEPT IN RESPECT OF DAMAGES ATTRIBUTABLE SOLELY TO THEIR OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION; PROVIDED THAT, IN NO EVENT SHALL THEY BE LIABLE FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES.

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ARTICLE VII

GENERAL PROVISIONS

7.1           Waivers. Each Grantor hereby waives notice of the time and place of any public sale or the time after which any private sale or other disposition of all or any part of the Collateral may be made. To the extent such notice may not be waived under applicable law, any notice made shall be deemed reasonable if sent to the Grantors, addressed as set forth in Article VIII, at least ten days prior to (a) the date of any such public sale or (b) the time after which any such private sale or other disposition may be made. To the maximum extent permitted by applicable law, each Grantor waives all claims, damages, and demands against the Administrative Agent or any Secured Party arising out of the repossession, retention or sale of the Collateral, except such as arise solely out of the gross negligence or willful misconduct of the Administrative Agent or such Secured Party as finally determined by a court of competent jurisdiction. To the extent it may lawfully do so, each Grantor absolutely and irrevocably waives and relinquishes the benefit and advantage of, and covenants not to assert against the Administrative Agent or any Secured Party, any valuation, stay, appraisal, extension, moratorium, redemption or similar laws and any and all rights or defenses it may have as a surety now or hereafter existing which, but for this provision, might be applicable to the sale of any Collateral made under the judgment, order or decree of any court, or privately under the power of sale conferred by this Security Agreement, or otherwise. Except as otherwise specifically provided herein, each Grantor hereby waives presentment, demand, protest or any notice (to the maximum extent permitted by applicable law) of any kind in connection with this Security Agreement or any Collateral.

7.2           Limitation on Administrative Agent’s and any Secured Party’s Duty with Respect to the Collateral. The Administrative Agent shall have no obligation to clean-up or otherwise prepare the Collateral for sale. The Administrative Agent and each Secured Party shall use reasonable care with respect to the Collateral in its possession or under its control. Neither the Administrative Agent nor any Secured Party shall have any other duty as to any Collateral in its possession or control or in the possession or control of any agent or nominee of the Administrative Agent or such Secured Party, or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto. To the extent that applicable law imposes duties on the Administrative Agent to exercise remedies in a commercially reasonable manner, each Grantor acknowledges and agrees that it is commercially reasonable for the Administrative Agent (a) to fail to incur expenses deemed significant by the Administrative Agent to prepare Collateral for disposition or otherwise to transform raw material or work in process into finished goods or other finished products for disposition, (b) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain governmental or third party consents for the collection or disposition of Collateral to be collected or disposed of, (c) to fail to exercise collection remedies against Account Debtors or other Persons obligated on Collateral or to remove Liens on or any adverse claims against Collateral, (d) to exercise collection remedies against Account Debtors and other Persons obligated on Collateral directly or through the use of collection agencies and other collection specialists, (e) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (f) to contact other Persons, whether or not in the same business as such Grantor, for expressions of interest in acquiring all or any portion of such Collateral, (g) to hire one or more professional auctioneers to assist in the disposition of Collateral, whether or not the Collateral is of a specialized nature, (h) to dispose of Collateral by utilizing internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capacity of doing so, or that match buyers and sellers of assets, (i) to dispose of assets in wholesale rather than retail markets, (j) to disclaim disposition warranties, such as title, possession or quiet enjoyment, (k) to purchase insurance or credit enhancements to insure the Administrative Agent against risks of loss, collection or disposition of Collateral or to provide to the Administrative Agent a guaranteed return from the collection or disposition of Collateral, or (l) to the extent deemed appropriate by the Administrative Agent, to obtain the services of other brokers, investment bankers, consultants and other professionals to assist the Administrative Agent in the collection or disposition of any of the Collateral. Each Grantor acknowledges that the purpose of this Section 7.2 is to provide non-exhaustive indications of what actions or omissions by the Administrative Agent would be commercially reasonable in the Administrative Agent’s exercise of remedies against the Collateral and that other actions or omissions by the Administrative Agent shall not be deemed commercially unreasonable solely on account of not being indicated in this Section 7.2. Without limitation upon the foregoing, nothing contained in this Section 7.2 shall be construed to grant any rights to any Grantor or to impose any duties on the Administrative Agent that would not have been granted or imposed by this Security Agreement or by applicable law in the absence of this Section 7.2.

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7.3           Compromises and Collection of Collateral. The Grantors and the Administrative Agent recognize that setoffs, counterclaims, defenses and other claims may be asserted by obligors with respect to certain of the Receivables, that certain of the Receivables may be or become uncollectible in whole or in part and that the expense and probability of success in litigating a disputed Receivable may exceed the amount that reasonably may be expected to be recovered with respect to a Receivable. In view of the foregoing, each Grantor agrees that the Administrative Agent may at any time and from time to time, if an Event of Default has occurred and is continuing, compromise with the obligor on any Receivable, accept in full payment of any Receivable such amount as the Administrative Agent in its sole discretion shall determine or abandon any Receivable, and any such action by the Administrative Agent shall be commercially reasonable so long as the Administrative Agent acts in good faith based on information known to it at the time it takes any such action.

7.4           Secured Party Performance of Debtor Obligations. Without having any obligation to do so, the Administrative Agent may perform or pay any obligation which any Grantor has agreed to perform or pay in this Security Agreement and the Grantors shall reimburse the Administrative Agent for any amounts paid by the Administrative Agent pursuant to this Section 7.4. The Grantors’ obligation to reimburse the Administrative Agent pursuant to the preceding sentence shall constitute Obligations payable on demand.

7.5           Specific Performance of Certain Covenants. Each Grantor acknowledges and agrees that a breach of any of the covenants contained in Sections 4.1(d), 4.1(e), 4.3(d), 4.4, 4.5, 4.6, 4.7, 4.8, 4.9, 4.10, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17 or 5.3 will cause irreparable injury to the Administrative Agent and the Secured Parties, that the Administrative Agent and Secured Parties have no adequate remedy at law in respect of such breaches and therefore agrees, without limiting the right of the Administrative Agent or the Secured Parties to seek and obtain specific performance of other obligations of the Grantors contained in this Security Agreement, that the covenants of the Grantors contained in the Sections referred to in this Section 7.5 shall be specifically enforceable against the Grantors.

7.6           Dispositions Not Authorized. No Grantor is authorized to sell or otherwise dispose of the Collateral except as set forth in Section 4.1(d) and notwithstanding any course of dealing between any Grantor and the Administrative Agent or other conduct of the Administrative Agent, no authorization to sell or otherwise dispose of the Collateral (except as set forth in Section 4.1(d)) shall be binding upon the Administrative Agent or the Secured Parties unless such authorization is in writing signed by the Administrative Agent with the consent or at the direction of the Required Lenders.

7.7           No Waiver; Amendments; Cumulative Remedies. No delay or omission of the Administrative Agent or any Lender to exercise any right or remedy granted under this Security Agreement shall impair such right or remedy or be construed to be a waiver of any Default or an acquiescence therein, and any single or partial exercise of any such right or remedy shall not preclude any other or further exercise thereof or the exercise of any other right or remedy. No waiver, amendment or other variation of the terms, conditions or provisions of this Security Agreement whatsoever (other than any Amendment or Assumption Agreement) shall be valid unless in writing signed by the Administrative Agent with the concurrence or at the direction of the Lenders required under Section 11.10 of the Credit Agreement and then only to the extent in such writing specifically set forth. All rights and remedies contained in this Security Agreement or by law afforded shall be cumulative and all shall be available to the Administrative Agent and the Secured Parties until the Obligations have been paid in full.

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7.8           Limitation by Law; Severability of Provisions. All rights, remedies and powers provided in this Security Agreement may be exercised only to the extent that the exercise thereof does not violate any applicable provision of law, and all the provisions of this Security Agreement are intended to be subject to all applicable mandatory provisions of law that may be controlling and to be limited to the extent necessary so that they shall not render this Security Agreement invalid, unenforceable or not entitled to be recorded or registered, in whole or in part. Any provision in this Security Agreement that is held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid without affecting the remaining provisions in that jurisdiction or the operation, enforceability, or validity of that provision in any other jurisdiction, and to this end the provisions of this Security Agreement are declared to be severable.

7.9           Reinstatement. This Security Agreement shall remain in full force and effect and continue to be effective should any petition be filed by or against any Grantor for liquidation or reorganization, should any Grantor become insolvent or make an assignment for the benefit of any creditor or creditors or should a receiver or trustee be appointed for all or any significant part of any Grantor’s assets, and shall continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Obligations, whether as a “voidable preference,” “fraudulent conveyance,” or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

7.10         Benefit of Agreement. The terms and provisions of this Security Agreement shall be binding upon and inure to the benefit of the Grantors, the Administrative Agent and the Secured Parties and their respective successors and assigns (including all persons who become bound as a debtor to this Security Agreement), except that no Grantor shall have the right to assign its rights or delegate its obligations under this Security Agreement or any interest herein, without the prior written consent of the Administrative Agent. No sales of participations, assignments, transfers, or other dispositions of any agreement governing the Obligations or any portion thereof or interest therein shall in any manner impair the Lien granted to the Administrative Agent, for the benefit of the Administrative Agent and the Secured Parties, hereunder.

7.11        Survival of Representations. All representations and warranties of the Grantors contained in this Security Agreement shall survive the execution and delivery of this Security Agreement.

7.12         Taxes and Expenses. Any stamp or transfer taxes payable or ruled payable by Federal or State authority in respect of this Security Agreement shall be paid by the Grantors, together with interest and penalties, if any. The Grantors shall reimburse the Administrative Agent for any and all out-of-pocket expenses and internal charges (including reasonable attorneys’, auditors’ and accountants’ fees and reasonable time charges of attorneys, paralegals, auditors and accountants who may be employees of the Administrative Agent) paid or incurred by the Administrative Agent in connection with the preparation, execution, delivery, administration, collection and enforcement of this Security Agreement and in the audit, analysis, administration, collection, preservation or sale of the Collateral (including the expenses and charges associated with any periodic or special audit of the Collateral). Any and all costs and expenses incurred by the Grantors in the performance of actions required pursuant to the terms hereof shall be borne solely by the Grantors.

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7.13          Headings. The title of and section headings in this Security Agreement are for convenience of reference only and shall not govern the interpretation of any of the terms and provisions of this Security Agreement.

7.14          Termination. This Security Agreement shall continue in effect (notwithstanding the fact that from time to time there may be no Obligations outstanding) until (a) the Credit Agreement has terminated pursuant to its express terms and (b) all of the Obligations have been paid and performed in full (or with respect to any outstanding Letters of Credit, a cash deposit or supporting letter of credit has been delivered to the Administrative Agent as required by the Credit Agreement) and no commitments of the Administrative Agent or the Secured Parties which would give rise to any Obligations are outstanding.

7.15          Entire Agreement. This Security Agreement embodies the entire agreement and understanding between the Grantors and the Administrative Agent relating to the Collateral and supersedes all prior agreements and understandings between the Grantors and the Administrative Agent relating to the Collateral.

7.16          CHOICE OF LAW. THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.

7.17          CONSENT TO JURISDICTION. EACH GRANTOR HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR TEXAS STATE COURT, IN EITHER CASE, SITTING IN DALLAS COUNTY, TEXAS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT AND EACH GRANTOR HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY SECURED PARTY TO BRING PROCEEDINGS AGAINST ANY GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY GRANTOR AGAINST THE ADMINISTRATIVE AGENT OR ANY SECURED PARTY OR ANY AFFILIATE OF THE ADMINISTRATIVE AGENT OR ANY SECURED PARTY INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN DALLAS COUNTY, TEXAS.

7.18          WAIVER OF JURY TRIAL. EACH GRANTOR, THE ADMINISTRATIVE AGENT AND EACH SECURED PARTY HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.

7.19          Indemnity. Section 11.2 of the Credit Agreement is hereby incorporated by reference mutatis mutandis, as if stated verbatim herein as agreements and obligations of each Grantor.

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7.20          Counterparts. This Security Agreement may be executed in any number of counterparts, all of which taken together shall constitute one agreement, and any of the parties hereto may execute this Security Agreement by signing any such counterpart. Delivery of an executed counterpart of this Security Agreement by fax or other electronic transmission (e.g. .pdf) shall be effective as delivery of a manually executed counterpart of this Security Agreement.

7.21          Lien Absolute. All obligations of each Grantor hereunder, shall be absolute and unconditional irrespective of:

(a)          any extension, renewal, settlement, compromise, waiver or release in respect of any of the Obligations, by operation of law or otherwise, or any obligation of any other guarantor of any of the Obligations, or any default, failure or delay, willful or otherwise, in the payment or performance of the Obligations;

(b)          any lack of validity or enforceability relating to or against Borrowers, any other Loan Party or any other guarantor of any of the Obligations, for any reason related to the Credit Agreement, any other Loan Document or any other agreement or instrument governing or evidencing any Obligations, or any applicable Law purporting to prohibit the payment by Borrowers, any other Loan Party or any other guarantor of the Obligations of the principal of or interest on the Obligations;

(c)          any modification or amendment of or supplement to the Credit Agreement or any other Loan Document;

(d)          any change in the time, manner or place of payment of, or in any other term of, all or any part of the Obligations, or any other amendment or waiver of or any consent to any departure from the Credit Agreement, any other Loan Document or any other agreement or instrument governing or evidencing any Obligations, including any increase or decrease in the rate of interest thereon;

(e)          any change in the corporate existence, structure or ownership of the Borrowers, any other Loan Party or any other guarantor of any of the Obligations, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting Borrowers, any other Loan Party or any other guarantor of the Obligations, or any of their assets or any resulting release of discharge of any obligation of Borrowers, any other Loan Party or any other guarantor or any of the Obligations;

(f)          any present or future law, regulation or order of any jurisdiction (whether of right or in fact) or of any agency thereof purporting to reduce, amend, restructure or otherwise affect any term of any Loan Document or Obligations;

(g)          any other setoff, defense or counterclaim whatsoever (in any case, whether based on contract, tort or any other theory) with respect to the Credit Agreement, any other Loan Document, any other agreement or instrument or the transactions contemplated thereby which might constitute a legal or equitable defense available to, or discharge of any Grantor; or

(h)          any other act or omission to act or delay of any kind by Borrowers, any other Loan Party, any other guarantor of the Obligations, the Administrative Agent, any Lender or any other Person or any other circumstance whatsoever which might, but for the provisions of this paragraph, constitute a legal or equitable discharge of any Grantor’s obligations hereunder.

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7.22          Release. Each Grantor consents and agrees that the Administrative Agent may at any time, or from time to time, in its discretion:

(a)          renew, extend or change the time of payment, and/or the manner, place or terms of payment of all or any part of the Obligations; and

(b)          exchange, release and/or surrender all or any of the Collateral (including the Pledged Collateral), or any part thereof, by whomsoever deposited, which is now or may hereafter be held by the Administrative Agent in connection with all or any of the Obligations; all in such manner and upon such terms as the Administrative Agent may deem proper, and without notice to or further assent from any Grantor, it being hereby agreed that each Grantor shall be and remain bound upon this Security Agreement, irrespective of the value or condition of any of the Collateral, and notwithstanding any such change, exchange, settlement, compromise, surrender, release, renewal or extension, and notwithstanding also that the Obligations may, at any time, exceed the aggregate principal amount thereof set forth in the Credit Agreement, or any other agreement governing any Obligations.

7.23          Intercreditor Agreement. Notwithstanding anything to the contrary contained in this Security Agreement, the Liens, security interests and rights granted pursuant to this Security Agreement shall be subject to the terms, provisions and conditions of, the Intercreditor Agreement. In the event of any conflict between this Security Agreement and the Intercreditor Agreement, the Intercreditor Agreement shall control, and no right, power, or remedy granted to the Administrative Agent hereunder shall be exercised by the Administrative Agent, nor shall any direction be given by the Administrative Agent in contravention of, the Intercreditor Agreement.

ARTICLE VIII

NOTICES

8.1            Sending Notices. Any notice required or permitted to be given under this Security Agreement shall be given in accordance with Section 11.11 of the Credit Agreement, with each notice to each Grantor other than the Borrowers being given in the same manner as notice to the Borrowers under the Credit Agreement, provided that such notice shall in each case be sent by United States mail, telecopier, personal delivery or nationally established overnight courier service, and shall be deemed received (a) when received, if sent by hand or overnight courier service, or mailed by certified or registered mail notices or (b) when sent, if sent by telecopier (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient), in each case addressed to the Grantors at the notice address set forth on Exhibit A, and to the Administrative Agent and the Lenders at the addresses set forth in accordance with Section 11.11 of the Credit Agreement.

8.2            Change in Address for Notices. Each of the Grantors, the Administrative Agent and the Lenders may change the address for service of notice upon it by a notice in writing to the other parties.

ARTICLE IX

THE ADMINISTRATIVE AGENT

Texas Capital Bank, National Association has been appointed Administrative Agent for the Secured Parties hereunder pursuant to Article 10 of the Credit Agreement. It is expressly understood and agreed by the parties to this Security Agreement that any authority conferred upon the Administrative Agent hereunder is subject to the terms of the delegation of authority made by the Secured Parties to the Administrative Agent pursuant to the Credit Agreement, and that the Administrative Agent has agreed to act (and any successor Administrative Agent shall act) as such hereunder only on the express conditions contained in such Article 10. Any successor Administrative Agent appointed pursuant to Article 10 of the Credit Agreement shall be entitled to all the rights, interests and benefits of the Administrative Agent hereunder.

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ARTICLE XI

CONSENT TO PLEDGED EQUITY

11.1          Each Grantor and each of its Subsidiaries, in its respective capacity as an issuer of Pledged Collateral (in such capacity, an “Issuer”), hereby (a) consents to the grant by each other Grantor to the Administrative Agent, for the benefit of the Secured Parties, of a security interest in and lien on all of the Pledged Collateral, (b) represents to the Administrative Agent that it has no rights of setoff or other claims against any of the Pledged Collateral, (c) acknowledges and agrees that it shall, upon demand by the Administrative Agent, pay to the Administrative Agent, for the benefit of the Secured Parties, any dividends and distributions due to any Grantor in accordance with the terms hereof, and (d) consents to the transfer of such Pledged Collateral to the Administrative Agent or its nominee following an Event of Default and to the substitution of the Administrative Agent or its nominee as a partner in any partnership or as a member in any limited liability company with all the rights and powers related thereto.

11.2          Each Grantor hereby authorizes and instructs each Issuer to comply with any instruction received by it from the Administrative Agent in writing that (a) states that an Event of Default has occurred and (b) is otherwise in accordance with the terms of this Security Agreement, without any other or further instructions from such Grantor.

[Signature Pages Follow]

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IN WITNESS WHEREOF, the Grantors and the Administrative Agent have executed this Security Agreement as of the date first above written.

GRANTORS:
FLEX LEASING POWER & SERVICE LLC
By:	/s/ Darin Romine
Name:	Darin Romine
Title:	Vice President—Finance
FLEX POWER CO.
By:	/s/ Darin Romine
Name:	Darin Romine
Title:	Vice President

[Signature Page to Pledge And Security Agreement –

Flex Leasing Power & Service Llc]

ADMINISTRATIVE AGENT:
TEXAS CAPITAL BANK, NATIONAL
ASSOCIATION,
as Administrative Agent
By:	/s/ Jeff A. Tompkins
Name:	Jeff A. Tompkins
Title:	Senior Vice President

[Signature Page to Pledge And Security Agreement –

Flex Leasing Power & Service Llc]

The undersigned has executed this Security Agreement as of the date first above written for the sole purpose of Article XI.

FLEX LEASING POWER & SERVICE, ULC
By:	/s/ Darin Romine
Name:	Darin Romine
Title:	Vice President

[Signature Page to Pledge And Security Agreement –

Flex Leasing Power & Service Llc]

EX-10.20

Exhibit 10.20

Execution Version

PLEDGE AND LIMITED GUARANTY AGREEMENT

This PLEDGE AND LIMITED GUARANTY AGREEMENT (as it may be amended, restated, supplemented or modified from time to time, this “Parent Pledge Agreement”) is entered into as of February 8, 2019, between FLEXENERGY POWER SOLUTIONS, LLC, a Delaware limited liability company (“Pledgor”), and TEXAS CAPITAL BANK, NATIONAL ASSOCIATION, in its capacity as administrative agent (the “Administrative Agent”) for the Lenders and the other Secured Parties.

PRELIMINARY STATEMENTS

A.       Reference is made to that certain Credit Agreement dated as of the date hereof, among Flex Leasing Power & Service LLC, a Delaware limited liability company (“Company”, and together with any Domestic Subsidiary of Company that becomes party thereto from time to time, each a “Borrower” and collectively, the “Borrowers”), the other Loan Parties from time to time party thereto, the financial institutions from time to time party thereto as lenders (collectively, the “Lenders”) and the Administrative Agent (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), pursuant to which the Lenders have agreed to make loans and other extensions of credit to the Borrowers for the purposes set forth therein.

B.       The Administrative Agent and the other Secured Parties have conditioned their obligations under the Credit Agreement upon the execution and delivery by Pledgor of this Parent Pledge Agreement, and Pledgor has agreed to enter into this Parent Pledge Agreement to secure the Obligations.

C.       Pledgor has determined that valuable benefits will be derived by it as a result of the Credit Agreement and the extension of credit made (and to be made) by the Lenders thereunder.

ACCORDINGLY, Pledgor and the Administrative Agent, on behalf of the Secured Parties, hereby agree as follows:

ARTICLE I

DEFINITIONS

1.1       Terms Defined in Credit Agreement. All capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Credit Agreement.

1.2       Terms Defined in UCC. Terms defined in the UCC which are not otherwise defined in this Parent Pledge Agreement are used herein as defined in the UCC.

1.3       Definitions of Certain Terms Used Herein. As used in this Parent Pledge Agreement, in addition to the terms defined in the introductory paragraph hereto and in the Preliminary Statements, the following terms shall have the following meanings:

“Amendment” shall have the meaning set forth in Section 5.2 hereof.

“Article” means a numbered article of this Parent Pledge Agreement, unless another document is specifically referenced.

“Collateral” shall have the meaning set forth in Article III.

“Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

“Effective Date” means the “Closing Date” as defined in the Credit Agreement.

“Event of Default” means an event described in Section 6.1.

“Excluded Payments” shall have the meaning set forth in Section 5.4(c)(iii) hereof.

“Exhibit” refers to a specific exhibit to this Parent Pledge Agreement (unless another document is specifically referenced) as from time to time supplemented by any Amendment.

“General Intangibles” shall have the meaning set forth in Article 9 of the UCC.

“Investment Property” shall have the meaning set forth in Article 9 of the UCC.

“Limited Guaranty” shall have the meaning set forth in Section 2.1(a) hereof.

“Pledged Equity” means the Equity Interests in Company now or hereafter acquired by Pledgor, whether or not physically delivered to the Administrative Agent pursuant to this Parent Pledge Agreement, including, without limitation, the Equity Interests set forth on Exhibit B hereto.

“Proceeds” shall have the meaning set forth in Article 9 of the UCC and, in any event shall include, without limitation all dividends or other income from the Pledged Equity, collections thereon and distributions or payments with respect thereto.

“Recourse Assets” shall have the meaning set forth in Section 2.2(b) hereof.

“Section” means a numbered section of this Parent Pledge Agreement, unless another document is specifically referenced.

“Securities Account Control Agreement” means an agreement, in form and substance reasonably satisfactory to the Administrative Agent, among Pledgor, a securities intermediary holding Pledgor’s assets, including funds and securities, or an issuer of Securities, and the Administrative Agent with respect to collection and control of all deposits, securities and other balances held in a Securities Account maintained by Pledgor with such securities intermediary.

“Securities Accounts” shall have the meaning set forth in Article 8 of the UCC.

“Security” shall have the meaning set forth in Article 8 of the UCC.

“Stock Rights” means all dividends, instruments or other distributions and any other right or property which Pledgor shall receive or shall become entitled to receive for any reason whatsoever with respect to, in substitution for or in exchange for any Equity Interest constituting Collateral, any right to receive an Equity Interest and any right to receive earnings, in which Pledgor now has or hereafter acquires any right, issued by an issuer of such Equity Interest.

“UCC” means the Uniform Commercial Code, as in effect from time to time, of the State of Texas or of any other state the laws of which are required as a result thereof to be applied in connection with the attachment, perfection or priority of, or remedies with respect to, Administrative Agent’s or any Secured Party’s Lien on any Collateral.

The foregoing definitions shall be equally applicable to both the singular and plural forms of the defined terms.

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ARTICLE II

LIMITED GUARANTY

2.1           Limited Guaranty.

(a)       Pledgor hereby absolutely and unconditionally guarantees the prompt, complete and full payment when due, no matter how such shall become due, of the Obligations, and further guarantees that Borrowers will properly and timely perform the Obligations when and as required under the Credit Agreement, and agrees to pay any and all fees and expenses, legal or otherwise (including court costs and attorneys’ fees) paid or incurred by the Administrative Agent or any Secured Party in connection with the enforcement or collection of this Parent Pledge Agreement, or any part hereof, as to Pledgor, and in protecting, defending or enforcing this Parent Pledge Agreement in any litigation, bankruptcy or insolvency proceedings or otherwise, as to Pledgor (the “Limited Guaranty”). Notwithstanding any contrary provision in this Parent Pledge Agreement or any other Loan Document, however, Pledgor’s maximum liability under the Limited Guaranty is several and limited to the Collateral.

(b)      After the occurrence and during the continuance of an Event of Default arising from a default by any Borrower in payment of the Obligations, or any part thereof, when such Obligations become due, either by their terms or as the result of the exercise of any power to accelerate, Pledgor shall, on demand, and without further notice of dishonor and without any notice having been given to Pledgor previous to such demand of the acceptance by the Administrative Agent or any Secured Party of this Parent Pledge Agreement, and without any notice having been given to Pledgor previous to such demand of the creating or incurring of such Obligations, severally pay as set out in Section 1.1(a), subject to the limitations expressly set forth herein, the amount due on the Obligations to the Administrative Agent and the Secured Parties at the Administrative Agent’s office as set forth in the Credit Agreement, and it shall not be necessary for the Administrative Agent or any Secured Party, in order to enforce such payment by Pledgor, first, to institute suit or exhaust its remedies against any Loan Party or others liable on such Obligations, to have any Loan Party joined with Pledgor in any suit brought under this Parent Pledge Agreement or to enforce their rights against any security which shall ever have been given to secure such indebtedness; provided, however, that in the event the Administrative Agent, on behalf of itself or any Secured Party, elects to enforce and/or exercise any remedies they may possess with respect to any security for the Secured Obligations prior to demanding payment from Pledgor, Pledgor shall nevertheless be, subject to the limitations expressly set forth herein, obligated hereunder for any and all sums still owing to the Administrative Agent or any Secured Party on the Obligations and not repaid or recovered incident to the exercise of such remedies.

(c)       Notice to Pledgor of the acceptance of this Parent Pledge Agreement, of the making, renewing, extending, assignment or modification of the Obligations, and of any amendment, modification or other change to any Loan Document (other than this Parent Pledge Agreement) and each item thereof, are hereby expressly waived by Pledgor.

(d)      If all or any part of the Obligations at any time are secured, Pledgor agrees that the Administrative Agent, on its own behalf and on behalf of the Secured Parties, may at any time and from time to time, in its discretion, without notice to Pledgor and with or without valuable consideration, allow substitution or withdrawal of collateral or other security and release collateral or other security or compromise or settle any amount due or owing under the Credit Agreement or amend or modify in whole or in part the Credit Agreement or any Loan Document (other than this Parent Pledge Agreement) executed in connection with same without impairing or diminishing the obligations of Pledgor hereunder. Pledgor further agree that if any Borrower or any other Loan Party executes in favor of the Administrative Agent or any Secured Party any collateral agreement, mortgage or other security instrument, the exercise by the Administrative Agent or any Secured Party of any right or remedy thereby conferred on the Administrative Agent or such Secured Party shall be wholly discretionary with the Administrative Agent or such Secured Party, and that the exercise or failure to exercise any such right or remedy shall in no way impair or diminish the obligations of Pledgor hereunder. Pledgor further agrees that the Administrative Agent and any Secured Party shall not be liable for their failure to use diligence in the collection of the Obligations or in preserving the liability of any person liable for the Obligations, and Pledgor hereby waives presentment for payment, notice of nonpayment, protest and notice thereof (including, notice of acceleration), and diligence in bringing suits against any Person liable on the Obligations, or any part thereof.

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(e)       Pledgor agrees that the Administrative Agent, on its own behalf and on behalf of the Secured Parties, in its discretion, may (i) bring suit against all guarantors (including, without limitation, Pledgor hereunder) of the Obligations severally or against any one or more of them, (ii) settle with any one or more of such guarantors for such consideration as the Administrative Agent, on its own behalf and on behalf of the Secured Parties, may deem proper, and (iii) release one or more of such guarantors from liability hereunder, and that no such action shall impair the rights of the Administrative Agent or the Secured Parties to collect the Obligations (or the unpaid balance thereof) from other such guarantors of the Obligations, or any of them, not so sued, settled with or released. Pledgor agrees, however, that nothing contained in this paragraph, and no action by the Administrative Agent permitted under this paragraph, shall in any way affect or impair the rights or obligations of such guarantors among themselves.

2.2           Limited Recourse.

(a)       Notwithstanding any other provision of this Parent Pledge Agreement or otherwise, other than the filing of a claim in the liquidation, insolvency, bankruptcy or similar proceedings of Pledgor that is initiated by another party or that is initiated by a Secured Party in relation to the recovery of Recourse Assets (as defined in clause (b) below), no Secured Party or any other Person acting on its behalf may institute against, or join any Person in instituting against, Pledgor any bankruptcy, winding up, reorganisation, arrangement, insolvency or liquidation proceeding or other proceeding under any similar law.

(b)      Notwithstanding any other provision of this Parent Pledge Agreement or otherwise, each Secured Party acknowledges that the obligations of Pledgor arising under this Parent Pledge Agreement are limited recourse obligations, payable solely from the Collateral owned by Pledgor (and any amounts arising therefrom) (the “Recourse Assets”), and that any claims of any Secured Party against Pledgor under this Parent Pledge Agreement shall be limited, in aggregate, to the Recourse Assets of Pledgor. Following realization and distribution of such Recourse Assets, no Secured Party nor any other Person acting on its behalf may take any further steps against Pledgor to recover any sums due but unpaid to them except for the steps outlined in clause (a) above, and all claims and all rights to claim of any Secured Party against Pledgor under this Parent Pledge Agreement (and the obligations of Pledgor) in respect of each such sum unpaid shall be extinguished.

(c)       No recourse for or under any obligation, covenant or agreement of Pledgor contained in this Parent Pledge Agreement shall be had against any shareholder, partner, member, creditor or equity holder of Pledgor or against any officer, director, partner, member, employee or agent of any such party or of Pledgor, by the enforcement of any assessment or by any proceeding, by virtue of any statute or otherwise.

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ARTICLE III

GRANT OF SECURITY INTEREST

Pledgor hereby pledges, assigns and grants to the Administrative Agent, on behalf of and for the ratable benefit of the Secured Parties, a security interest in all of its right, title and interest in, to and under (i) all Pledged Equity whether constituting General Intangibles or Investment Property; and (ii) all Proceeds (including Stock Rights) of the foregoing, in each case whether now owned by, or hereafter acquired by or arising in favor of Pledgor, and regardless of where located (all of which will be collectively referred to as the “Collateral”), to secure the prompt and complete payment and performance of the Obligations.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

Pledgor represents and warrants to the Administrative Agent and the Secured Parties that:

4.1           Title, Authorization, Validity, Enforceability, Perfection and Priority. Pledgor has good and valid rights in or the power to transfer the Collateral and title to the Collateral with respect to which it has purported to grant a security interest hereunder, free and clear of all Liens except for Liens permitted under Section 5.1(d), and has full power and authority to grant to the Administrative Agent the security interest in such Collateral pursuant hereto. The execution and delivery by Pledgor of this Parent Pledge Agreement has been duly authorized by proper corporate, limited liability company, partnership, or other similar organizational actions, as applicable, of Pledgor, and this Parent Pledge Agreement constitutes a legal valid and binding obligation of Pledgor and creates a security interest which is enforceable against Pledgor in all Collateral it now owns or hereafter acquires, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law. When financing statements have been filed in the appropriate offices against Pledgor in the locations listed on Exhibit C and all filing and recordation fees associated therewith have been paid, the Administrative Agent will have a validly perfected first priority security interest in that Collateral of Pledgor in which a security interest may be perfected by filing, subject only to Liens permitted under Section 5.1(d).

4.2           Type and Jurisdiction of Organization, Organizational and Identification Numbers. The type of entity of Pledgor, its state of organization, the organizational number issued to it by its state of organization and its federal employer identification number are set forth on Exhibit A.

4.3           Principal Location. Pledgor’s mailing address and the location of its place of business (if it has only one) or its chief executive office (if it has more than one place of business), are disclosed in Exhibit A.

4.4           Exact Names. As of the Effective Date, Pledgor’s name in which it has executed this Parent Pledge Agreement is the exact name as it appears in Pledgor’s organizational documents, as amended, as filed with Pledgor’s jurisdiction of organization. Except as may be described in Exhibit A, Pledgor has not, during the past five years, been known by or used any other corporate or fictitious name, or been a party to any merger or consolidation, or been a party to any acquisition.

4.5           No Financing Statements, Pledge Agreements. No financing statement or pledge agreement describing all or any portion of the Collateral which has not lapsed or been terminated naming Pledgor as debtor has been filed or is of record in any jurisdiction except (a) for financing statements or security agreements naming the Administrative Agent on behalf of the Secured Parties as the secured party and (b) as permitted by Section 5.1(d).

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4.6           Pledged Equity.

(a)       Exhibit B sets forth a complete and accurate list of all Pledged Equity owned by Pledgor as of the Effective Date. Pledgor is the direct, sole beneficial owner and sole holder of record of the Pledged Equity listed on Exhibit B as being owned by it, free and clear of any Liens, except for (i) the security interest granted to the Administrative Agent for the benefit of the Secured Parties hereunder and (ii) security interest granted to the Subordinated Lenders pursuant to the Parent Loan Documents, subject to the terms and first-priority Lien of the Administrative Agent pursuant to the Intercreditor Agreement. Pledgor further represents and warrants that (i) the Pledged Equity owned by it has been duly authorized and validly issued and, if such Pledged Equity is stock in a corporation, is fully paid and non-assessable, (ii) with respect to any certificates delivered to the Administrative Agent representing Pledged Equity, either such certificates are Securities as defined in Article 8 of the UCC as a result of actions by the issuer or otherwise, or, if such certificates are not Securities, Pledgor has so informed the Administrative Agent so that the Administrative Agent may take steps to perfect its security interest therein as a General Intangible, and (iii) all such Pledged Equity held by a securities intermediary is covered by a Securities Account Control Agreement.

(b)       In addition, (i) none of the Pledged Equity owned by it has been issued or transferred in violation of the securities registration, securities disclosure or similar laws of any jurisdiction to which such issuance or transfer may be subject, (ii) there are existing no options, warrants, calls or commitments of any character whatsoever relating to such Pledged Equity or which obligate the issuer of such Pledged Equity to issue additional Equity Interests, and (iii) no consent, approval, authorization, or other action by, and no giving of notice, filing with, any Governmental Authority or any other Person is required for the pledge by Pledgor of such Pledged Equity pursuant to this Parent Pledge Agreement or for the execution, delivery and performance of this Parent Pledge Agreement by Pledgor, or for the exercise by the Administrative Agent of the voting or other rights provided for in this Parent Pledge Agreement or for the remedies in respect of the Pledged Equity pursuant to this Parent Pledge Agreement, except as may be required in connection with such disposition by laws affecting the offering and sale of securities generally.

(c)       Pledgor owns 100% of the issued and outstanding Equity Interests in Company.

ARTICLE V

COVENANTS

From the date of this Parent Pledge Agreement and thereafter until this Parent Pledge Agreement is terminated pursuant to the terms hereof, Pledgor agrees that:

5.1           General.

(a)       Authorization to File Financing Statements; Ratification. Pledgor hereby authorizes the Administrative Agent to file, and if requested will deliver to the Administrative Agent, all financing statements and other documents and take such other actions as may from time to time be requested by the Administrative Agent in order to maintain a first perfected, security interest in and, if applicable, Control of, the Collateral owned by Pledgor. Any financing statement filed by the Administrative Agent may be filed in any filing office in any UCC jurisdiction and may (i) indicate Pledgor’s Collateral (A) as all equity interest in Company or words of similar effect, regardless of whether any particular asset comprised in the Collateral falls within the scope of Article 9 of the UCC or such jurisdiction, or (B) by any other description which reasonably approximates the description contained in this Parent Pledge Agreement, and (ii) contain any other information required by part 5 of Article 9 of the UCC for the sufficiency or filing office acceptance of any financing statement or amendment, including whether Pledgor is an organization, the type of organization and any organization identification number issued to Pledgor. Pledgor also agrees to furnish any such information to the Administrative Agent promptly upon request. Pledgor also ratifies its authorization for the Administrative Agent to have filed in any UCC jurisdiction any initial financing statements or amendments thereto if filed prior to the date hereof.

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(b)       Further Assurances. Pledgor will, if so requested by the Administrative Agent, furnish to the Administrative Agent, as often as the Administrative Agent requests, statements and schedules further identifying and describing the Collateral owned by it and such other reports and information in connection with its Collateral as the Administrative Agent may reasonably request, all in such detail as the Administrative Agent may specify. Pledgor also agrees to take any and all actions necessary to defend title to the Collateral against all persons and to defend the security interest of the Administrative Agent in its Collateral and the priority thereof against any Lien not expressly permitted hereunder. Pledgor will at all times pledge on a non-recourse basis all of the Equity Interests of the Company (including delivery of any original certificates evidencing the Equity Interests of Company pursuant to Section 5.2, together with an appropriate undated membership power for each certificate duly executed in blank by the registered owner thereof) as Collateral pursuant to this Parent Pledge Agreement.

(c)       Disposition of Collateral. Pledgor will not sell, lease or otherwise dispose of the Collateral owned by it except for dispositions specifically permitted pursuant to Section 7.8 of the Credit Agreement.

(d)       Liens. Pledgor will not create, incur, or suffer to exist any Lien on the Collateral owned by it except (i) the security interest created by this Parent Pledge Agreement, and (ii) other Permitted Liens.

(e)       Other Financing Statements. Pledgor will not authorize the filing of any financing statement naming it as debtor covering all or any portion of the Collateral owned by it, except as permitted by Section 5.1(d). Pledgor acknowledges that it is not authorized to file any financing statement or amendment or termination statement with respect to any financing statement without the prior written consent of the Administrative Agent, subject to Pledgor’s rights under Section 9.509(d)(2) of the UCC.

(f)        Compliance with Terms. Pledgor will perform and comply with all obligations in respect of the Collateral owned by it and all agreements to which it is a party or by which it is bound relating to such Collateral.

(g)       Changes in Capital Structure of Issuer. Pledgor will not (i) permit or suffer any issuer of an Equity Interest constituting Pledged Equity owned by it to dissolve, liquidate, retire any of its Equity Interests or other Securities evidencing ownership, sell all or substantially all of its assets (except for Permitted Liens and sales of assets permitted pursuant to Section 7.8 of the Credit Agreement) or merge or consolidate with any other entity (except as permitted pursuant to Section 7.3 of the Credit Agreement), or (ii) vote any such Pledged Equity in favor of any of the foregoing.

(h)       Issuance of Additional Securities. Pledgor will not permit or suffer the issuer of an Equity Interests constituting Pledged Equity owned by it to issue additional Equity Interests, any right to receive the same or any right to receive earnings in respect of such Equity Interests owned by Pledgor, except to Pledgor.

5.2           Delivery of Certificated Securities. Pledgor will (a) deliver to the Administrative Agent immediately upon execution of this Parent Pledge Agreement, the originals of all certificated Securities constituting Collateral owned by Pledgor on the Effective Date (if any then exist), (b) hold in trust for the Administrative Agent upon receipt and immediately thereafter deliver to the Administrative Agent any such Securities constituting Collateral, and (c) promptly within five Business Days of the Administrative Agent’s request, deliver to the Administrative Agent a duly executed amendment to this Parent Pledge Agreement, in the form of Exhibit D hereto (the “Amendment”), pursuant to which Pledgor will pledge any additional Collateral acquired after the Effective Date. Pledgor hereby authorizes the Administrative Agent to attach each Amendment to this Parent Pledge Agreement and agrees that all additional Collateral owned by it set forth in such Amendments shall be considered to be part of the Collateral.

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5.3           Uncertificated Pledged Equity. Pledgor will permit the Administrative Agent from time to time to cause the appropriate issuers (and, if held with a securities intermediary, such securities intermediary) of uncertificated securities or other types of Pledged Equity owned by it not represented by certificates to mark their books and records with the numbers and face amounts of all such uncertificated securities or other types of Pledged Equity not represented by certificates and all rollovers and replacements therefor to reflect the Lien of the Administrative Agent granted pursuant to this Parent Pledge Agreement. Pledgor will take any actions necessary to cause (a) the issuers of uncertificated securities constituting such Pledged Equity and (b) any securities intermediary which is the holder of any such Pledged Equity, to cause the Administrative Agent to have and retain Control over such Pledged Equity. Without limiting the foregoing, Pledgor will, with respect to any such Pledged Equity held with a securities intermediary, cause such securities intermediary to enter into a Securities Account Control Agreement unless such Pledged Equity is held in an Excluded Account.

5.4           Pledged Equity.

(a)            Company as Issuer. Company, as the issuer of the Pledged Equity, agrees that it will be bound by the terms of this Parent Pledge Agreement relating to the Pledged Equity issued by it and will comply with such terms insofar as such terms are applicable to it.

(b)           Registration of Pledged Equity. Pledgor will permit any registerable Pledged Equity owned by it to be registered in the name of the Administrative Agent or its nominee at any time at the option of the Required Lenders.

(c)            Exercise of Rights in Pledged Equity.

(i)        Without in any way limiting the foregoing and subject to clause (ii) below, Pledgor shall have the right to exercise all voting rights or other rights relating to the Pledged Equity owned by it for all purposes not inconsistent with this Parent Pledge Agreement, the Credit Agreement, the Intercreditor Agreement or any other Loan Document; provided however, that no vote or other right shall be exercised or action taken which would have the effect of impairing the rights of the Administrative Agent in respect of such Pledged Equity;

(ii)       Pledgor will permit the Administrative Agent or its nominee at any time after the occurrence of an Event of Default, without notice and so long as the Obligations have been accelerated (upon demand or otherwise) pursuant to Section 9.2 of the Credit Agreement, to exercise all voting rights or other rights relating to the Pledged Equity owned by it, including, without limitation, exchange, subscription or any other rights, privileges, or options pertaining to any Equity Interest as if it were the absolute owner thereof;

(iii)      Pledgor shall be entitled to collect and receive for its own use all cash dividends and interest paid in respect of the Pledged Equity owned by it to the extent not in violation of the Credit Agreement other than any of the following distributions and payments (collectively referred to as the “Excluded Payments”): (A) dividends and interest paid or payable other than in cash in respect of such Pledged Equity, and instruments and other property received, receivable or otherwise distributed in respect of, or in exchange for, any Pledged Equity; (B) dividends and other distributions paid or payable in cash in respect of such Pledged Equity in connection with a partial or total liquidation or dissolution or in connection with a reduction of capital, capital surplus or paid-in capital of an issuer; and (C) cash paid, payable or otherwise distributed, in respect of principal of, or in redemption of, or in exchange for, such Pledged Equity; provided however, that until actually paid, all rights to such distributions shall remain subject to the Lien created by this Parent Pledge Agreement; and

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(iv)     All Excluded Payments and all other distributions in respect of any of the Pledged Equity owned by Pledgor, whenever paid or made, shall be delivered to the Administrative Agent to hold as Pledged Equity and shall, if received by Pledgor, be received in trust for the benefit of the Administrative Agent, be segregated from the other property or funds of Pledgor and be forthwith delivered to the Administrative Agent as Pledged Equity in the same form as so received (with any necessary endorsement).

5.5           Change of Name or Location; etc. Pledgor shall not (a) change its name as it appears in official filings in the state of its incorporation or organization, (b) change its chief executive office, principal place of business or mailing address, (c) change the type of entity that it is, (d) change its organization identification number, if any, issued by its state of incorporation or other organization, or (e) change its state of incorporation or organization, in each case, unless the Administrative Agent shall have received at least thirty (30) days prior written notice of such change and the Administrative Agent shall have acknowledged in writing that either (1) such change will not adversely affect the validity, perfection or priority of the Administrative Agent’s security interest in the Collateral, or (2) any reasonable action requested by the Administrative Agent in connection therewith has been completed or taken (including any action to continue the perfection of any Liens in favor of the Administrative Agent, on behalf of the Secured Parties, in any Collateral), provided that, any new location shall be in the continental U.S.

5.6           Holding Company. Pledgor shall at all times directly hold 100% of the Equity Interests in Company.

ARTICLE VI

EVENTS OF DEFAULT AND REMEDIES

6.1           Events of Default. The occurrence of any one or more of the following events shall constitute an Event of Default hereunder:

(a)           Any representation or warranty made by or on behalf of Pledgor under or in connection with this Parent Pledge Agreement shall be materially false as of the date on which made.

(b)           The breach by Pledgor of any of the terms or provisions of Article V.

(c)           The breach by Pledgor (other than a breach which constitutes an Event of Default under any other Section of this Article VII) of any of the terms or provisions of this Parent Pledge Agreement which is not remedied within ten days after such breach.

(d)           The occurrence of any “Event of Default” under, and as defined in, the Credit Agreement.

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(e)           Any Equity Interest which is included within the Collateral shall at any time constitute a Security or the issuer of any such Equity Interest shall take any action to have such interests treated as a Security unless (i) all certificates or other documents constituting such Security have been delivered to the Administrative Agent and such Security is properly defined as such under Article 8 of the UCC of the applicable jurisdiction, whether as a result of actions by the issuer thereof or otherwise, or (ii) the Administrative Agent has entered into a Securities Account Control Agreement with the issuer of such Security or with a securities intermediary relating to such Security and such Security is defined as such under Article 8 of the UCC of the applicable jurisdiction, whether as a result of actions by the issuer thereof or otherwise.

6.2           Remedies.

(a)           Upon the occurrence of an Event of Default, the Administrative Agent may, or at the direction of the Required Lenders, shall exercise any or all of the following rights and remedies:

(i)        those rights and remedies provided in this Parent Pledge Agreement, the Credit Agreement, or any other Loan Document; provided that, this Section 6.2(a) shall not be understood to limit any rights or remedies available to the Administrative Agent and the Secured Parties prior to an Event of Default;

(ii)       those rights and remedies available to a secured party under the UCC (whether or not the UCC applies to the affected Collateral) or under any other applicable law (including, without limitation, any law governing the exercise of a bank’s right of setoff or bankers’ lien) when a debtor is in default under a security agreement;

(iii)      give notice of sole control or any other instruction under any Control Agreement and take any action therein with respect to such Collateral;

(iv)     without notice (except as specifically provided in Section 8.1 or elsewhere herein), demand or advertisement of any kind to Pledgor or any other Person, collect, receive, sell, assign, or otherwise dispose of, deliver, or realize upon, the Collateral or any part thereof in one or more parcels at public or private sale or sales (which sales may be adjourned or continued from time to time with or without notice and may take place at Pledgor’s premises or elsewhere), for cash, on credit or for future delivery without assumption of any credit risk, and upon such other terms as the Administrative Agent may deem commercially reasonable; and

(v)      so long as the Obligations have been accelerated (upon demand or otherwise) pursuant to Section 9.2 of the Credit Agreement, concurrently with written notice to Pledgor, transfer and register in its name or in the name of its nominee the whole or any part of the Pledged Equity, to exchange certificates or instruments representing or evidencing Pledged Equity for certificates or instruments of smaller or larger denominations, to exercise the voting and all other rights as a holder with respect thereto, to collect and receive all cash dividends, interest, principal and other distributions made thereon and to otherwise act with respect to the Pledged Equity as though the Administrative Agent was the outright owner thereof.

(b)           The Administrative Agent, on behalf of the Secured Parties, may comply with any applicable state or federal law requirements in connection with a disposition of the Collateral and compliance will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral.

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(c)           The Administrative Agent shall have the right upon any such public sale or sales and, to the extent permitted by law, upon any such private sale or sales, to purchase for the benefit of the Administrative Agent and the Secured Parties, the whole or any part of the Collateral so sold, free of any right of equity redemption, which equity redemption Pledgor hereby expressly releases.

(d)           Until the Administrative Agent is able to effect a sale, lease, or other disposition of Collateral, the Administrative Agent shall have the right to hold or use Collateral, or any part thereof, to the extent that it deems appropriate for the purpose of preserving Collateral or its value or for any other purpose deemed appropriate by the Administrative Agent. The Administrative Agent may, if it so elects, seek the appointment of a receiver or keeper to take possession of Collateral and to enforce any of the Administrative Agent’s remedies (for the benefit of the Administrative Agent and Secured Parties), with respect to such appointment without prior notice or hearing as to such appointment.

(e)           Notwithstanding the foregoing, neither the Administrative Agent nor any Secured Party shall be required to (i) make any demand upon, or pursue or exhaust any of their rights or remedies against, Pledgor, any other obligor, guarantor, pledgor or any other Person with respect to the payment of the Obligations or to pursue or exhaust any of their rights or remedies with respect to any Collateral therefor or any direct or indirect guarantee thereof, (ii) marshal the Collateral or any guarantee of the Obligations or to resort to the Collateral or any such guarantee in any particular order, or (iii) effect a public sale of any Collateral.

(f)            Pledgor recognizes that the Administrative Agent may be unable to effect a public sale of any or all the Pledged Equity and may be compelled to resort to one or more private sales thereof in accordance with clause (a) above. Pledgor also acknowledges that any private sale may result in prices and other terms less favorable to the seller than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall not be deemed to have been made in a commercially unreasonable manner solely by virtue of such sale being private. The Administrative Agent shall be under no obligation to delay a sale of any of the Pledged Equity for the period of time necessary to permit Pledgor or the issuer of the Pledged Equity to register such securities for public sale under the Securities Act of 1933, as amended, or under applicable state securities laws, even if Pledgor and the issuer would agree to do so.

6.3           Pledgor’s Obligations Upon Event of Default. Upon the request of the Administrative Agent after the occurrence and during the continuance of an Event of Default, Pledgor will assemble and make available to the Administrative Agent the Collateral and all books and records relating thereto at any place or places specified by the Administrative Agent, whether at Pledgor’s premises or elsewhere.

ARTICLE VII

ATTORNEY IN FACT; PROXY

7.1        Authorization for Secured Party to Take Certain Action.

(a)           Pledgor irrevocably authorizes the Administrative Agent at any time and from time to time in the sole discretion of the Administrative Agent and appoints the Administrative Agent as its attorney in fact (i) to execute on behalf of Pledgor as debtor and to file financing statements necessary or desirable in the Administrative Agent’s sole discretion to perfect and to maintain the perfection and priority of the Administrative Agent’s security interest in the Collateral, (ii) to endorse and collect any cash proceeds of the Collateral, (iii) to contact and enter into one or more agreements with the issuers of uncertificated securities constituting Pledged Equity or with securities intermediaries holding Pledged Equity as may be necessary or advisable to give the Administrative Agent Control over such Pledged Equity, (iv) to apply the proceeds of any Collateral received by the Administrative Agent to the Obligations as provided in Section 2.5(d) of the Credit Agreement and (v) to do all other acts and things necessary to carry out this Parent Pledge Agreement; and Pledgor agrees to reimburse the Administrative Agent on demand for any payment made or any expense incurred by the Administrative Agent in connection with any of the foregoing; provided that, this authorization shall not relieve Pledgor of any of its obligations under this Parent Pledge Agreement, the Credit Agreement or under any other Loan Document.

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(b)           All acts of said attorney or designee are hereby ratified and approved. The powers conferred on the Administrative Agent, for the benefit of the Administrative Agent and Secured Parties, under this Section 7.1 are solely to protect the Administrative Agent’s interests in the Collateral and shall not impose any duty upon the Administrative Agent or any Secured Party to exercise any such powers. The Administrative Agent agrees that, except for the powers granted in Section 7.1(a)(i) through (v), it shall not exercise any power or authority granted to it unless an Event of Default has occurred and is continuing.

7.2        Proxy. PLEDGOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS THE ADMINISTRATIVE AGENT AS ITS PROXY AND ATTORNEY-IN-FACT (AS SET FORTH IN SECTION 7.1 ABOVE) WITH RESPECT TO ITS PLEDGED EQUITY, INCLUDING THE RIGHT TO VOTE SUCH PLEDGED EQUITY, WITH FULL POWER OF SUBSTITUTION TO DO SO. IN ADDITION TO THE RIGHT TO VOTE ANY SUCH PLEDGED EQUITY, THE APPOINTMENT OF THE ADMINISTRATIVE AGENT AS PROXY AND ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF SUCH PLEDGED EQUITY WOULD BE ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF SHAREHOLDERS, CALLING SPECIAL MEETINGS OF SHAREHOLDERS AND VOTING AT SUCH MEETINGS). SUCH PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF ANY SUCH PLEDGED EQUITY ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON (INCLUDING THE ISSUER OF SUCH PLEDGED EQUITY OR ANY OFFICER OR AGENT THEREOF), UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT.

7.3        Nature of Appointment; Limitation of Duty. THE APPOINTMENT OF THE ADMINISTRATIVE AGENT AS PROXY AND ATTORNEY-IN-FACT IN THIS ARTICLE VII IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE DATE ON WHICH THIS PARENT PLEDGE AGREEMENT IS TERMINATED IN ACCORDANCE WITH SECTION 8.13. NOTWITHSTANDING ANYTHING CONTAINED HEREIN, NEITHER THE ADMINISTRATIVE AGENT, NOR ANY SECURED PARTY, NOR ANY OF THEIR RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES SHALL HAVE ANY DUTY TO EXERCISE ANY RIGHT OR POWER GRANTED HEREUNDER OR OTHERWISE OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE FOR ANY FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO, EXCEPT IN RESPECT OF DAMAGES ATTRIBUTABLE SOLELY TO THEIR OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION; PROVIDED THAT, IN NO EVENT SHALL THEY BE LIABLE FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES.

ARTICLE VIII

GENERAL PROVISIONS

8.1           Waivers. Pledgor hereby waives notice of the time and place of any public sale or the time after which any private sale or other disposition of all or any part of the Collateral may be made. To the extent such notice may not be waived under applicable law, any notice made shall be deemed reasonable if sent to Pledgor, addressed as set forth in Article IX, at least ten days prior to (a) the date of any such public sale or (b) the time after which any such private sale or other disposition may be made. To the maximum extent permitted by applicable law, Pledgor waives all claims, damages, and demands against the Administrative Agent or any Secured Party arising out of the repossession, retention or sale of the Collateral, except such as arise solely out of the gross negligence or willful misconduct of the Administrative Agent or such Secured Party as finally determined by a court of competent jurisdiction. To the extent it may lawfully do so, Pledgor absolutely and irrevocably waives and relinquishes the benefit and advantage of, and covenants not to assert against the Administrative Agent or any Secured Party, any valuation, stay, appraisal, extension, moratorium, redemption or similar laws and any and all rights or defenses it may have as a surety now or hereafter existing which, but for this provision, might be applicable to the sale of any Collateral made under the judgment, order or decree of any court, or privately under the power of sale conferred by this Parent Pledge Agreement, or otherwise. Except as otherwise specifically provided herein, Pledgor hereby waives presentment, demand, protest or any notice (to the maximum extent permitted by applicable law) of any kind in connection with this Parent Pledge Agreement or any Collateral.

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8.2           Limitation on Administrative Agent’s and any Secured Party’s Duty with Respect to the Collateral. The Administrative Agent shall have no obligation to prepare the Collateral for sale. The Administrative Agent and each Secured Party shall use reasonable care with respect to the Collateral in its possession or under its control. Neither the Administrative Agent nor any Secured Party shall have any other duty as to any Collateral in its possession or control or in the possession or control of any agent or nominee of the Administrative Agent or such Secured Party, or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto. To the extent that applicable law imposes duties on the Administrative Agent to exercise remedies in a commercially reasonable manner, Pledgor acknowledges and agrees that it is commercially reasonable for the Administrative Agent (a) to fail to incur expenses deemed significant by the Administrative Agent to prepare Collateral for disposition, (b) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain governmental or third party consents for the collection or disposition of Collateral to be collected or disposed of, (c) to fail to exercise collection remedies against Persons obligated on Collateral or to remove Liens on or any adverse claims against Collateral, (d) to exercise collection remedies against Persons obligated on Collateral directly or through the use of collection agencies and other collection specialists, (e) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (f) to contact other Persons, whether or not in the same business as Pledgor, for expressions of interest in acquiring all or any portion of such Collateral, (g) to disclaim disposition warranties, such as title, possession or quiet enjoyment, (h) to purchase insurance or credit enhancements to insure the Administrative Agent against risks of loss, collection or disposition of Collateral or to provide to the Administrative Agent a guaranteed return from the collection or disposition of Collateral, or (i) to the extent deemed appropriate by the Administrative Agent, to obtain the services of other brokers, investment bankers, consultants and other professionals to assist the Administrative Agent in the collection or disposition of any of the Collateral. Pledgor acknowledges that the purpose of this Section 8.2 is to provide non-exhaustive indications of what actions or omissions by the Administrative Agent would be commercially reasonable in the Administrative Agent’s exercise of remedies against the Collateral and that other actions or omissions by the Administrative Agent shall not be deemed commercially unreasonable solely on account of not being indicated in this Section 8.2. Without limitation upon the foregoing, nothing contained in this Section 8.2 shall be construed to grant any rights to Pledgor or to impose any duties on the Administrative Agent that would not have been granted or imposed by this Parent Pledge Agreement or by applicable law in the absence of this Section 8.2.

8.3           Secured Party Performance of Debtor Obligations. Without having any obligation to do so, the Administrative Agent may perform or pay any obligation which Pledgor has agreed to perform or pay in this Parent Pledge Agreement and Pledgor shall reimburse the Administrative Agent for any amounts paid by the Administrative Agent pursuant to this Section 8.3. Pledgor’s obligation to reimburse the Administrative Agent pursuant to the preceding sentence shall constitute Obligations payable on demand.

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8.4           Specific Performance of Certain Covenants. Pledgor acknowledges and agrees that a breach of any of the covenants contained herein will cause irreparable injury to the Administrative Agent and the Secured Parties, that the Administrative Agent and Secured Parties have no adequate remedy at law in respect of such breaches and therefore agrees, without limiting the right of the Administrative Agent or the Secured Parties to seek and obtain specific performance of other obligations of Pledgor contained in this Parent Pledge Agreement, that the covenants of Pledgor contained in the Sections referred to in this Section 8.4 shall be specifically enforceable against Pledgor.

8.5           Dispositions Not Authorized. No Pledgor is authorized to sell or otherwise dispose of the Collateral except as set forth in Section 5.1(c) and notwithstanding any course of dealing between Pledgor and the Administrative Agent or other conduct of the Administrative Agent, no authorization to sell or otherwise dispose of the Collateral (except as set forth in Section 5.1(c)) shall be binding upon the Administrative Agent or the Secured Parties unless such authorization is in writing signed by the Administrative Agent with the consent or at the direction of the Required Lenders.

8.6           No Waiver; Amendments; Cumulative Remedies. No delay or omission of the Administrative Agent or any Lender to exercise any right or remedy granted under this Parent Pledge Agreement shall impair such right or remedy or be construed to be a waiver of any Default or an acquiescence therein, and any single or partial exercise of any such right or remedy shall not preclude any other or further exercise thereof or the exercise of any other right or remedy. No waiver, amendment or other variation of the terms, conditions or provisions of this Parent Pledge Agreement whatsoever (other than any Amendment) shall be valid unless in writing signed by the Administrative Agent with the concurrence or at the direction of the Lenders required under Section 11.10 of the Credit Agreement and then only to the extent in such writing specifically set forth. All rights and remedies contained in this Parent Pledge Agreement or by law afforded shall be cumulative and all shall be available to the Administrative Agent and the Secured Parties until the Obligations have been paid in full.

8.7           Limitation by Law; Severability of Provisions. All rights, remedies and powers provided in this Parent Pledge Agreement may be exercised only to the extent that the exercise thereof does not violate any applicable provision of law, and all the provisions of this Parent Pledge Agreement are intended to be subject to all applicable mandatory provisions of law that may be controlling and to be limited to the extent necessary so that they shall not render this Parent Pledge Agreement invalid, unenforceable or not entitled to be recorded or registered, in whole or in part. Any provision in this Parent Pledge Agreement that is held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid without affecting the remaining provisions in that jurisdiction or the operation, enforceability, or validity of that provision in any other jurisdiction, and to this end the provisions of this Parent Pledge Agreement are declared to be severable.

8.8           Reinstatement. This Parent Pledge Agreement shall remain in full force and effect and continue to be effective should any petition be filed by or against Pledgor for liquidation or reorganization, should Pledgor become insolvent or make an assignment for the benefit of any creditor or creditors or should a receiver or trustee be appointed for all or any significant part of Pledgor’s assets, and shall continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Obligations, whether as a “voidable preference,” “fraudulent conveyance,” or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

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8.9           Benefit of Agreement. The terms and provisions of this Parent Pledge Agreement shall be binding upon and inure to the benefit of Pledgor, the Administrative Agent and the Secured Parties and their respective successors and assigns (including all persons who become bound as a debtor to this Parent Pledge Agreement), except that no Pledgor shall have the right to assign its rights or delegate its obligations under this Parent Pledge Agreement or any interest herein, without the prior written consent of the Administrative Agent. No sales of participations, assignments, transfers, or other dispositions of any agreement governing the Obligations or any portion thereof or interest therein shall in any manner impair the Lien granted to the Administrative Agent, for the benefit of the Administrative Agent and the Secured Parties, hereunder.

8.10         Survival of Representations. All representations and warranties of Pledgor contained in this Parent Pledge Agreement shall survive the execution and delivery of this Parent Pledge Agreement.

8.11         Taxes and Expenses. Any stamp or transfer taxes payable or ruled payable by Federal or State authority in respect of this Parent Pledge Agreement shall be paid by Pledgor, together with interest and penalties, if any. Pledgor shall reimburse the Administrative Agent for any and all out-of-pocket expenses and internal charges (including reasonable attorneys’, auditors’ and accountants’ fees and reasonable time charges of attorneys, paralegals, auditors and accountants who may be employees of the Administrative Agent) paid or incurred by the Administrative Agent in connection with the preparation, execution, delivery, administration, collection and enforcement of this Parent Pledge Agreement and in the audit, analysis, administration, collection, preservation or sale of the Collateral (including the expenses and charges associated with any periodic or special audit of the Collateral). Any and all costs and expenses incurred by Pledgor in the performance of actions required pursuant to the terms hereof shall be borne solely by Pledgor.

8.12         Headings. The title of and section headings in this Parent Pledge Agreement are for convenience of reference only and shall not govern the interpretation of any of the terms and provisions of this Parent Pledge Agreement.

8.13         Termination. This Parent Pledge Agreement shall continue in effect (notwithstanding the fact that from time to time there may be no Obligations outstanding) until (a) the Credit Agreement has terminated pursuant to its express terms and (b) all of the Obligations have been indefeasibly paid and performed in full (or with respect to any outstanding Letters of Credit, a cash deposit or supporting letter of credit has been delivered to the Administrative Agent as required by the Credit Agreement) and no commitments of the Administrative Agent or the Secured Parties which would give rise to any Obligations are outstanding.

8.14         Entire Agreement. This Parent Pledge Agreement embodies the entire agreement and understanding between Pledgor and the Administrative Agent relating to the Collateral and supersedes all prior agreements and understandings between Pledgor and the Administrative Agent relating to the Collateral.

8.15         CHOICE OF LAW. THIS PARENT PLEDGE AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.

8.16         CONSENT TO JURISDICTION. PLEDGOR HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR TEXAS STATE COURT, IN EITHER CASE, SITTING IN DALLAS COUNTY, TEXAS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS PARENT PLEDGE AGREEMENT OR ANY OTHER LOAN DOCUMENT AND PLEDGOR HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY SECURED PARTY TO BRING PROCEEDINGS AGAINST PLEDGOR IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY PLEDGOR AGAINST THE ADMINISTRATIVE AGENT OR ANY SECURED PARTY OR ANY AFFILIATE OF THE ADMINISTRATIVE AGENT OR ANY SECURED PARTY INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS PARENT PLEDGE AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN DALLAS COUNTY, TEXAS.

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8.17         WAIVER OF JURY TRIAL. PLEDGOR, THE ADMINISTRATIVE AGENT AND EACH SECURED PARTY HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS PARENT PLEDGE AGREEMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.

8.18         Counterparts. This Parent Pledge Agreement may be executed in any number of counterparts, all of which taken together shall constitute one agreement, and any of the parties hereto may execute this Parent Pledge Agreement by signing any such counterpart. Delivery of an executed counterpart of this Parent Pledge Agreement by fax or other electronic transmission (e.g. .pdf) shall be effective as delivery of a manually executed counterpart of this Parent Pledge Agreement.

8.19         Lien Absolute. All obligations of Pledgor hereunder, shall be absolute and unconditional irrespective of:

(a)           any extension, renewal, settlement, compromise, waiver or release in respect of any of the Obligations, by operation of law or otherwise, or any obligation of any other guarantor of any of the Obligations, or any default, failure or delay, willful or otherwise, in the payment or performance of the Obligations;

(b)           any lack of validity or enforceability relating to or against Borrowers, any other Loan Party, Pledgor or any other guarantor of any of the Obligations, for any reason related to the Credit Agreement, any other Loan Document or any other agreement or instrument governing or evidencing any Obligations, or any applicable Law purporting to prohibit the payment by Borrowers, any other Loan Party, Pledgor or any other guarantor of the Obligations of the principal of or interest on the Obligations;

(c)           any modification or amendment of or supplement to the Credit Agreement or any other Loan Document;

(d)           any change in the time, manner or place of payment of, or in any other term of, all or any part of the Obligations, or any other amendment or waiver of or any consent to any departure from the Credit Agreement, any other Loan Document or any other agreement or instrument governing or evidencing any Obligations, including any increase or decrease in the rate of interest thereon;

(e)           any change in the corporate existence, structure or ownership of the Borrowers, any other Loan Party, Pledgor or any other guarantor of any of the Obligations, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting Borrowers, any other Loan Party, Pledgor or any other guarantor of the Obligations, or any of their assets or any resulting release of discharge of any obligation of Borrowers, any other Loan Party, Pledgor or any other guarantor or any of the Obligations;

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(f)            any present or future law, regulation or order of any jurisdiction (whether of right or in fact) or of any agency thereof purporting to reduce, amend, restructure or otherwise affect any term of any Loan Document or Obligations;

(g)           any other setoff, defense or counterclaim whatsoever (in any case, whether based on contract, tort or any other theory) with respect to the Credit Agreement, any other Loan Document, any other agreement or instrument or the transactions contemplated thereby which might constitute a legal or equitable defense available to, or discharge of Pledgor; or

(h)           any other act or omission to act or delay of any kind by Borrowers, any other Loan Party, Pledgor, any other guarantor of the Obligations, the Administrative Agent, any Lender or any other Person or any other circumstance whatsoever which might, but for the provisions of this paragraph, constitute a legal or equitable discharge of Pledgor’s obligations hereunder.

8.20         Release. Pledgor consents and agrees that the Administrative Agent may at any time, or from time to time, in its discretion:

(a)           renew, extend or change the time of payment, and/or the manner, place or terms of payment of all or any part of the Obligations; and

(b)           exchange, release and/or surrender all or any of the Collateral, or any part thereof, by whomsoever deposited, which is now or may hereafter be held by the Administrative Agent in connection with all or any of the Obligations; all in such manner and upon such terms as the Administrative Agent may deem proper, and without notice to or further assent from Pledgor it being hereby agreed that Pledgor shall be and remain bound upon this Parent Pledge Agreement, irrespective of the value or condition of any of the Collateral, and notwithstanding any such change, exchange, settlement, compromise, surrender, release, renewal or extension, and notwithstanding also that the Obligations may, at any time, exceed the aggregate principal amount thereof set forth in the Credit Agreement, or any other agreement governing any Obligations.

8.21         Intercreditor Agreement. Notwithstanding anything to the contrary contained in this Parent Pledge Agreement, the Liens, security interests and rights granted pursuant to this Parent Pledge Agreement shall be subject to the terms, provisions and conditions of, the Intercreditor Agreement. In the event of any conflict between this Parent Pledge Agreement and the Intercreditor Agreement, the Intercreditor Agreement shall control, and no right, power, or remedy granted to the Administrative Agent hereunder shall be exercised by the Administrative Agent, nor shall any direction be given by the Administrative Agent in contravention of, the Intercreditor Agreement.

ARTICLE IX

NOTICES

9.1          Sending Notices. Any notice required or permitted to be given under this Parent Pledge Agreement shall be given in accordance with Section 11.11 of the Credit Agreement, with each notice to Pledgor other than the Borrowers being given in the same manner as notice to the Borrowers under the Credit Agreement, provided that such notice shall in each case be sent by United States mail, telecopier, personal delivery or nationally established overnight courier service, and shall be deemed received (a) when received, if sent by hand or overnight courier service, or mailed by certified or registered mail notices or (b) when sent, if sent by telecopier (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient), in each case addressed to Pledgor at the notice address set forth on Exhibit A, and to the Administrative Agent and the Lenders at the addresses set forth in accordance with Section 11.11 of the Credit Agreement.

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9.2           Change in Address for Notices. Pledgor, the Administrative Agent and the Lenders may change the address for service of notice upon it by a notice in writing to the other parties.

ARTICLE X

THE ADMINISTRATIVE AGENT

Texas Capital Bank, National Association has been appointed Administrative Agent for the Secured Parties hereunder pursuant to Article 10 of the Credit Agreement. It is expressly understood and agreed by the parties to this Parent Pledge Agreement that any authority conferred upon the Administrative Agent hereunder is subject to the terms of the delegation of authority made by the Secured Parties to the Administrative Agent pursuant to the Credit Agreement, and that the Administrative Agent has agreed to act (and any successor Administrative Agent shall act) as such hereunder only on the express conditions contained in such Article 10. Any successor Administrative Agent appointed pursuant to Article 10 of the Credit Agreement shall be entitled to all the rights, interests and benefits of the Administrative Agent hereunder.

ARTICLE XI

CONSENT TO PLEDGED EQUITY

11.1        Company, in its capacity as an issuer of the Pledged Equity (in such capacity, an “Issuer”), hereby (a) consents to the grant by Pledgor to the Administrative Agent, for the benefit of the Secured Parties, of a security interest in and lien on all of the Pledged Equity, (b) represents to the Administrative Agent that it has no rights of setoff or other claims against any of the Pledged Equity, (c) acknowledges and agrees that it shall, upon demand by the Administrative Agent, pay to the Administrative Agent, for the benefit of the Secured Parties, any dividends and distributions due to Pledgor in accordance with the terms hereof, and (d) consents to the transfer of such Pledged Equity to the Administrative Agent or its nominee following an Event of Default and to the substitution of the Administrative Agent or its nominee as a partner in any partnership or as a member in any limited liability company with all the rights and powers related thereto.

11.2         Pledgor hereby authorizes and instructs the Issuer to comply with any instruction received by it from the Administrative Agent in writing that (a) states that an Event of Default has occurred and (b) is otherwise in accordance with the terms of this Parent Pledge Agreement, without any other or further instructions from Pledgor.

[Signature Pages Follow]

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IN WITNESS WHEREOF, Pledgor and the Administrative Agent have executed this Parent Pledge Agreement as of the date first above written.

PLEDGOR:
FLEXENERGY POWER SOLUTIONS, LLC,
a Delaware limited liability company
By:	/s/ Wes Kimmel
Name:	Wes Kimmel
Title:	Chief Financial Officer

[signature Page To Pledge And Limited Guaranty –

Flexenergy Power Solutions, Llc]

ADMINISTRATIVE AGENT:
TEXAS CAPITAL BANK, NATIONAL
ASSOCIATION,
as Administrative Agent
By:	/s/ Jeff A. Tompkins
Name:	Jeff A. Tompkins
Title:	Senior Vice President

[signature Page To Pledge And Limited Guaranty –

Flexenergy Power Solutions, Llc]

The undersigned has executed this Parent Pledge Agreement as of the date first above written for the sole purpose of Article XI.

FLEX LEASING POWER & SERVICE LLC,
a Delaware limited liability company
By:	/s/ Darin Romine
Name:	Darin Romine
Title:	Vice President—Finance

[signature Page to Pledge and Limited Guaranty –

Flexenergy Power Solutions, Llc]

EX-10.21

Exhibit 10.21

Execution Version

SUBORDINATION AND INTERCREDITOR AGREEMENT

This SUBORDINATION AND INTERCREDITOR AGREEMENT (this “Agreement”) is entered into as of February 8, 2019, by and among RNS FLEX, LLC, ENERGY SPECIAL SITUATIONS FUND II, L.P., ESS PARTICIPATION FUND II, L.P. and TRF PLATFORM HOLDINGS, LLC (together with their respective successors and assigns and each Person (as hereinafter defined) that hereafter becomes a holder of the Parent Loan Notes (as hereinafter defined), each individually, a “Subordinated Lender” and collectively, “Subordinated Lenders”), FLEXENERGY POWER SOLUTIONS, LLC, a Delaware limited liability company (the “Parent”), FLEX LEASING POWER & SERVICE LLC, a Delaware limited liability company (the “Company”), each of the other Loan Parties (as hereinafter defined) from time to time party hereto, and TEXAS CAPITAL BANK, NATIONAL ASSOCIATION, as Agent (as hereinafter defined) for all Senior Secured Parties (as hereinafter defined).

R E C I T A L S

A.      The financial institutions party thereto from time to time (together with their respective successors and assigns, the “Senior Lenders”), Agent, the Company and the other Loan Parties (as hereinafter defined) have entered into a Credit Agreement dated as of February 8, 2019 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Senior Credit Agreement”) pursuant to which, among other things, Senior Lenders have agreed, subject to the terms and conditions set forth in the Senior Credit Agreement, to make certain loans and financial accommodations to the Company and the other Loan Parties. The Company and the other Loan Parties may also now or hereafter enter into Bank Product Agreements (as hereinafter defined) with Bank Product Providers.

B.       All of the Company’s and the other Loan Parties’ obligations to Agent and Senior Secured Parties are secured by liens on and security interests in the Equity Interests in the Company and substantially all of the assets of the Company and the other Loan Parties (collectively, the “Collateral”).

C.       Subordinated Lenders have extended credit to the Parent as evidenced by those certain secured promissory notes described on Exhibit A hereto in the original aggregate principal amount of $18,000,000 and payable by the Parent to Subordinated Lenders (collectively, the “Subordinated Notes”).

D.       As an inducement to and as one of the conditions to the agreement of Agent and Senior Secured Parties to make certain loans and financial accommodations to the Company and the other Loan Parties as contemplated by the Senior Debt Documents (as hereinafter defined), Agent and Senior Lenders have required the execution and delivery of this Agreement by each Subordinated Lender and the Loan Parties in order to set forth the relative rights and priorities of Agent, Senior Secured Parties and Subordinated Lenders under the Senior Debt Documents and the Subordinated Debt Documents (as hereinafter defined).

NOW, THEREFORE, in order to induce Agent and Senior Secured Parties to make certain loans and financial accommodations to the Company and the other Loan Parties pursuant to the Senior Debt Documents, and for other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the parties hereto hereby agree as follows:

1.       Definitions. Capitalized terms used and not defined herein shall have the meanings attributed thereto in the Senior Credit Agreement. The following terms shall have the following meanings in this Agreement:

“Agent” shall mean Texas Capital Bank, National Association, as administrative agent for the Senior Secured Parties, or any other Person appointed by the holders of the Senior Debt as administrative agent for purposes of the Senior Debt Documents and this Agreement.

“Agreement” shall have the meaning set forth in the introductory paragraph to this Agreement.

“Bank Product” shall mean any service provided to, facility extended to, or transaction entered into with, any Loan Party by any Bank Product Provider consisting of (a) deposit accounts, (b) cash management services, including treasury, depository, return items, overdraft, controlled disbursement, merchant store value cards, e-payables services, electronic funds transfer, interstate depository network, automatic clearing house transfer (including the Automated Clearing House processing of electronic funds transfers through the direct Federal Reserve Fedline system) and other cash management arrangements maintained with any Bank Product Provider, (c) debit cards, stored value cards, and credit cards (including commercial credit cards (including so called “procurement cards” or “P cards”)) and debit card and credit card processing services or (d) Hedge Agreements.

“Bank Product Agreements” shall mean those certain agreements entered into from time to time between any Loan Party and a Bank Product Provider in connection with any of the Bank Products, including without limitation, Hedge Agreements.

“Bank Product Obligations” shall mean all obligations, liabilities, contingent reimbursement obligations, fees, and expenses owing by any Loan Party or any of its Subsidiaries to any Bank Product Provider pursuant to or evidenced by the Bank Product Agreements and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, and including all such amounts that any Loan Party or such Subsidiary is obligated to reimburse to any Bank Product Provider as a result of such Bank Product Provider purchasing participations or executing indemnities or reimbursement obligations with respect to the Bank Products provided to any Loan Party or such Subsidiaries pursuant to the Bank Product Agreements.

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“Bank Product Provider” shall mean any Senior Lender or Affiliate of a Senior Lender (or any Person that was a Senior Lender or an Affiliate of a Senior Lender at the time such Bank Product Agreement was entered into) that provides Bank Products to the Loan Parties or any of their Subsidiaries from time to time.

“Bankruptcy Code” shall mean Title 11 of the United States Code, as in effect from time to time.

“Business Day(s)” means those days (other than Saturdays or Sundays) upon which banks are generally open in Texas for the conduct of substantially all of their commercial lending activities and wire transfers of funds can be made.

“Collateral” shall have the meaning set forth in Recital B of this Agreement.

“Company” shall have the meaning set forth in the introductory paragraph to this Agreement.

“DIP Financing” shall have the meaning set forth in Section 8.1.

“Distribution” shall mean, with respect to any indebtedness, obligation or security, (a) any payment or distribution by any Person of cash, securities or other property, by set-off or otherwise, on account of such indebtedness, obligation or security, or (b) any redemption, purchase or other acquisition of such indebtedness, obligation or security by any Person.

“Enforcement Action” shall mean (a) to take from or for the account of the Company or any other Loan Party, by set-off or in any other manner, the whole or any part of any moneys which may now or hereafter be owing by the Company or any such Loan Party with respect to the Subordinated Debt, (b) to sue for payment of, or to initiate or participate with others in any suit, action or proceeding against the Company or any such Loan Party to (i) enforce payment of or to collect the whole or any part of the Subordinated Debt or (ii) commence enforcement of any of the rights and remedies under the Subordinated Debt Documents or applicable law with respect to the Subordinated Debt, (c) to accelerate the Subordinated Debt, (d) to exercise any put option or to cause the Company or any such Loan Party to honor any redemption or mandatory prepayment obligation under any Subordinated Debt Document, or (e) to take any action under the provisions of any state or federal law, including, without limitation, the Uniform Commercial Code, or under any contract or agreement, to enforce, foreclose upon, take possession of or sell the Parent’s Equity Interests in the Company or any property or assets of the Company or any such Loan Party including the Collateral.

“Exercise Notice” shall have the meaning set forth in Section 2.10.

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“Hedge Agreement” shall mean (a) any and all interest rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules and annexes, a “Master Agreement”), (c) any and all Master Agreements and any and all related confirmations and (d) any other agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.

“Loan Parties” shall mean the Company and each Domestic Subsidiary of the Company that is now or hereafter becomes a party to any Senior Debt Document. All references in this Agreement to any Loan Party shall include such Loan Party as a debtor-in-possession and any receiver or trustee for such Loan Party in any Proceeding.

“Loan Purchase Price” shall have the meaning set forth in Section 2.10.

“Paid in Full” or “Payment in Full” shall mean, as of any date of determination with respect to the Senior Debt that: (a) all of the Senior Debt (other than (i) contingent indemnification obligations not yet due and payable or with respect to which a claim may not yet have been reasonably asserted, (ii) obligations not yet due and payable with respect to letters of credit issued pursuant to the applicable Senior Debt Documents and (iii) Bank Product Obligations not yet due and payable) has been indefeasibly paid in full in cash, (b) no Person has any further right to obtain any loans, letters of credit or other extensions of credit under the Senior Debt Documents, (c) any and all letters of credit issued under the Senior Debt Documents have been cancelled and returned or backed by standby letters of credit (issued by a bank, and in form and substance, acceptable to Agent) or cash collateralized, in each case in an amount equal to 103% of the face amount of such letters of credit, (d) any and all Bank Product Obligations have been cancelled or backed by standby letters of credit (issued by a bank, and in form and substance, acceptable to Agent) or cash collateralized, in each case in an amount reasonably determined by Agent as sufficient to satisfy the estimated credit exposure with respect to the Bank Product Obligations, and (e) any costs, expenses and contingent indemnification obligations which are not yet due and payable but with respect to which a claim may reasonably be expected to be asserted by Agent or a Senior Secured Party are backed by standby letters of credit (issued by a bank, and in form and substance, acceptable to Agent) or cash collateralized, in each case in an amount reasonably estimated by Agent to be the amount of costs, expenses and contingent indemnification obligations that may become due and payable.

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“Person” shall mean natural persons, corporations, limited liability companies, limited partnerships, general partnerships, limited liability partnerships, joint ventures, trusts, land trusts, business trusts, or other organizations, irrespective of whether they are legal entities, and governments and agencies and political subdivisions thereof.

“Proceeding” shall mean any voluntary or involuntary insolvency, bankruptcy, receivership, custodianship, liquidation, dissolution, reorganization, assignment for the benefit of creditors, appointment of a custodian, receiver, trustee or other officer with similar powers or any other proceeding for the liquidation, dissolution or other winding up of a Person.

“Purchase Option Event” shall have the meaning set forth in Section 2.10.

“Recovery” shall have the meaning set forth in Section 2.9.

“Senior Credit Agreement” shall have the meaning set forth in Recital A of this Agreement.

“Senior Debt” shall mean (a) all obligations, liabilities and indebtedness of every nature of the Company and the other Loan Parties from time to time owed under the Senior Debt Documents, including, without limitation, the principal amount of all debts, claims and indebtedness and guarantees, accrued and unpaid interest (including, without limitation, default interest), fees, costs and expenses, whether primary, secondary, direct, contingent, fixed or otherwise, heretofore, now and from time to time hereafter owing, due or payable, whether before or after the filing of a Proceeding under the Bankruptcy Code together with any interest (including, without limitation, default interest) and fees accruing thereon after the commencement of a Proceeding, without regard to whether or not such interest or fees is an allowed claim, and (b) all Bank Product Obligations.

“Senior Debt Documents” shall mean the Senior Credit Agreement, the Security Documents, the Notes, the Issuer Documents, and all other agreements, documents and instruments executed from time to time in connection therewith (including, without limitation, the Bank Product Agreements), as the same may be amended, restated, supplemented or otherwise modified from time to time, and after any refinancing of the Senior Debt, any financing documentation which replaces the Senior Debt Documents (including under any DIP Financing) and pursuant to which the Senior Debt is refinanced, as such financing documentation may be amended, restated, supplemented or otherwise modified from time to time.

“Senior Default” shall mean any “Default” or “Event of Default” under any of the Senior Debt Documents.

“Senior Lenders” shall have the meaning set forth in Recital A of this Agreement.

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“Senior Secured Parties” shall mean, collectively, Agent, Senior Lenders, Bank Product Providers, and any holders of the Senior Debt.

“Subordinated Debt” shall mean all obligations, liabilities and indebtedness of every nature of the Parent, the Company and the other Loan Parties from time to time owed to any Subordinated Lender under the Subordinated Debt Documents, including, without limitation, the principal amount of all debts, claims and indebtedness, accrued and unpaid interest (including, without limitation, default interest), fees, costs and expenses, whether primary, secondary, direct, contingent, fixed or otherwise, heretofore, now and from time to time hereafter owing, due or payable, whether before or after the filing of a Proceeding under the Bankruptcy Code together with any interest (including, without limitation, default interest) and fees accruing thereon after the commencement of a Proceeding, without regard to whether or not such interest or fees is an allowed claim.

“Subordinated Debt Documents” shall mean, collectively, (a) the Subordinated Notes, and (b) any and all guarantees, notes, instruments, documents and agreements executed and delivered by the Parent or any Loan Party in connection with, or pursuant to, the issuance of the Subordinated Debt.

“Subordinated Lender” shall have the meaning set forth in the introductory paragraph in this Agreement and shall also refer to any subsequent party to whom the benefit of this Agreement has been extended in accordance with the terms of this Agreement.

“Subordinated Notes” shall have the meaning set forth in Recital C of this Agreement.

“Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect from time to time in the State of Texas.

2.       Subordination.

2.1.       Subordination of Liens and Security Interests; Agreement Not to Contest; Agreement to Release Liens; Nature of Priority; No New Liens.

(a)       Until all of the Senior Debt has been Paid in Full, any liens and security interests of any Subordinated Lender in the Collateral shall be and hereby are subordinated for all purposes and in all respects to the liens and security interests of Agent and Senior Secured Parties in the Collateral, regardless of the time, manner or order of the creation, granting, attachment or perfection of any such liens and security interests. Each Subordinated Lender agrees that it will not at any time contest the validity, perfection, priority or enforceability of the Senior Debt, the Senior Debt Documents, or the liens and security interests of Agent and Senior Secured Parties in the Collateral securing the Senior Debt. In furtherance of the foregoing, each Subordinated Lender hereby irrevocably appoints Agent its attorney-in-fact, with full authority in the place and stead of such Subordinated Lender and in the name of such Subordinated Lender or otherwise, to execute and deliver any document or instrument which such Subordinated Lender may be required to deliver pursuant to this Section 2.1.

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(b)       Each Subordinated Lender acknowledges that a portion of the Senior Debt represents debt that is revolving in nature and that the amount thereof that may be outstanding at any time or from time to time may be increased or reduced and subsequently reborrowed, and that the terms of the Senior Debt may be modified, extended or amended from time to time, and that the aggregate amount of the Senior Debt may be increased, replaced or refinanced, in each event, without notice to or consent by the Subordinated Lenders and without affecting the provisions hereof. The lien priorities provided in Section 2.1(a) shall not be altered or otherwise affected by any such amendment, modification, supplement, extension, repayment, reborrowing, increase, replacement, renewal, restatement or refinancing of either the Senior Debt or the Subordinated Debt, or any portion thereof.

(c)       Until all of the Senior Debt has been Paid in Full, the parties hereto agree that (i) there shall be no lien on any assets of, or Equity Interests issued by, any Loan Party securing any Subordinated Debt if these same assets are not subject to, and do not become subject to, a lien securing the Senior Debt and (ii) if any Subordinated Lender shall acquire or hold any lien on any assets of, or Equity Interests issued by, any Loan Party securing any Subordinated Debt which assets are not also subject to the first-priority lien of Agent under the Senior Debt Documents, then each Subordinated Lender will, without the need for any further consent of any other Subordinated Lender, notwithstanding anything to the contrary in any other Subordinated Debt Document, either (A) release such lien or (B) assign it to Agent as security for the Senior Debt. To the extent that the foregoing provisions are not complied with for any reason, without limiting any other rights and remedies available to Agent, the Subordinated Lenders agree that any amounts received by or distributed to any of them pursuant to or as a result of liens granted in contravention of this Section 2.1(c) shall be subject to Section 2.5.

2.2.       Liquidation, Dissolution, Bankruptcy. In the event of any Proceeding involving the Parent, the Company or any other Loan Party:

(a)       All Senior Debt shall first be Paid in Full before any Distribution (whether in cash, securities or other property) from the Parent’s Equity Interests in the Company, the Company or any other Loan Party is made to any Subordinated Lender on account of any Subordinated Debt.

(b)      Any Distribution from the Parent’s Equity Interests in the Company, the Company or any other Loan Party, whether in cash, securities or other property which would otherwise, but for the terms hereof, be payable or deliverable in respect of the Subordinated Debt, shall be paid or delivered directly to Agent (to be held and/or applied by Agent in accordance with the terms of the Senior Debt Documents) until all Senior Debt is Paid in Full. Each Subordinated Lender irrevocably authorizes, empowers and directs any debtor, debtor in possession, receiver, trustee, liquidator, custodian, conservator or other Person having authority, to pay or otherwise deliver all such Distributions to Agent. Each Subordinated Lender also irrevocably authorizes and empowers Agent, in the name of such Subordinated Lender, to demand, sue for, collect and receive any and all such Distributions.

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(c)       Each Subordinated Lender waives any claim it may now or hereafter have arising out of Agent’s or Senior Lenders’ election, in any Proceeding instituted under the Bankruptcy Code, of the application of Section 1111(b)(2) of the Bankruptcy Code, any borrowing or grant of a security interest under Section 364 of the Bankruptcy Code by the Company or any other Loan Party, as debtor in possession, and/or any use of cash collateral. Each Subordinated Lender further agrees that it will not seek to participate on any creditor’s committee without Agent’s prior written consent.

(d)       Each Subordinated Lender agrees to execute, verify, deliver and file any proofs of claim in respect of the Subordinated Debt requested by Agent in connection with any such Proceeding. If such Subordinated Lender does not file a proper claim or proof of debt or other document or amendment thereof in the form required in any Proceeding prior to 30 days before the expiration of time to file such claim or other document or amendment thereof, then Agent shall have the right (but not the obligation) in such proceeding, and hereby irrevocably is appointed lawful attorney of each Subordinated Lender for the purpose of enabling Agent to demand, sue for, collect, receive and give receipt for the payments and distributions in respect of the Subordinated Debt that are made in such Proceeding and that are required to be paid or delivered to Agent and Senior Secured Parties as provided in this Agreement, and to file and prove all claims therefor and to execute and deliver all documents in such proceeding in the name of any Subordinated Lender or otherwise in respect of such claims, as Agent reasonably may determine to be necessary or appropriate.

(e)       This Agreement is intended to be enforceable as a subordination agreement (notwithstanding the commencement of any Proceeding), including under Section 510 of the Bankruptcy Code and any comparable provision of otherwise applicable law.

(f)       Until Payment in Full of the Senior Debt has occurred, each Subordinated Lender agrees that it shall not, in its capacity as a creditor of Parent, without the consent of Agent (i) propose any plan of reorganization or file any motion or pleading in support of any motion or plan that would impair the rights of any holders of the Senior Debt, (ii) oppose any plan of reorganization or liquidation proposed by Agent or Senior Secured Parties or with Agent’s or Senior Secured Parties’ written approval; provided that no Subordinated Lender shall be prohibited from opposing any plan proposed or approved by Agent or Senior Secured Parties if Subordinated Lenders proposed or supported an alternative plan which provides for Payment in Full of all Senior Debt on the effective date of such plan, or (iii) vote its claim in favor of any plan of reorganization, liquidation, arrangement, moratorium or composition opposed by Agent or Senior Secured Parties other than a plan which provides for the Payment in Full of all Senior Debt on the effective date thereof.

2.3.       Subordinated Debt Standstill Provisions. Until all Senior Debt is Paid in Full, no Subordinated Lender shall, without the prior written consent of Agent, take any Enforcement Action with respect to the Parent’s Equity Interests in the Company, the Company or any other Loan Party, in each case, in connection with the Subordinated Debt.

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2.4.       Incorrect Payments. If any Distribution from the Parent’s Equity Interests in the Company, the Company or any other Loan Party on account of the Subordinated Debt not permitted to be made by the Company or any other Person or accepted by any Subordinated Lender under this Agreement is made and received by a Subordinated Lender, such Distribution shall not be commingled with any of the assets of such Subordinated Lender, shall be held in trust by such Subordinated Lender for the benefit of Agent and Senior Secured Parties and shall be promptly paid over to Agent for application (in accordance with the Senior Debt Documents ) to the payment of the Senior Debt then remaining unpaid, until all of the Senior Debt is Paid in Full.

2.5.       Application of Proceeds from Sale or other Disposition of the Collateral. In the event of any sale, transfer or other disposition (including a casualty loss or taking through eminent domain) of the Collateral, the proceeds resulting therefrom (including insurance proceeds) shall be applied in accordance with the terms of the Senior Debt Documents or as otherwise consented to by Agent until such time as all of the Senior Debt is Paid in Full.

2.6.       Sale, Transfer or other Disposition of Subordinated Debt.

(a)       No Subordinated Lender shall sell, assign, pledge, dispose of or otherwise transfer all or any portion of the Subordinated Debt or any Subordinated Debt Document unless prior to the consummation of such sale, assignment, pledge, disposition or other transfer, the transferee thereof shall agree, in writing reasonably acceptable to Agent, to be bound by all the terms and provisions hereof.

(b)       Notwithstanding the foregoing, the subordination effected hereby shall survive any sale, assignment, pledge, disposition or other transfer of all or any portion of the Subordinated Debt in violation of the foregoing prohibition, and the terms of this Agreement shall be binding upon the successors and assigns of each Subordinated Lender, as provided in Section 14 hereof.

2.7.       Legends. Until the termination of this Agreement in accordance with Section 20 hereof, each Subordinated Lender will use commercially reasonable efforts to cause to be clearly, conspicuously and prominently inserted on the face of the Subordinated Notes and any other Subordinated Debt Document, as well as any renewals or replacements thereof, the following legend:

“THIS INSTRUMENT AND THE RIGHTS AND OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATE IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN SUBORDINATION AND INTERCREDITOR AGREEMENT DATED AS OF FEBRUARY 8, 2019 (THE “SUBORDINATION AGREEMENT”), AMONG FLEXENERGY POWER SOLUTIONS, LLC, A DELAWARE LIMITED LIABILITY COMPANY, AS PARENT, FLEX LEASING POWER & SERVICE LLC, A DELAWARE LIMITED LIABILITY COMPANY (THE “COMPANY”), THE LOAN PARTIES PARTY THERETO, RNS FLEX, LLC, ENERGY SPECIAL SITUATIONS FUND II, L.P., ESS PARTICIPATION FUND II, L.P. AND TRF PLATFORM HOLDINGS, LLC (COLLECTIVELY, “SUBORDINATED LENDERS”) AND TEXAS CAPITAL BANK, NATIONAL ASSOCIATION (“AGENT”), TO THE OBLIGATIONS AND INDEBTEDNESS (INCLUDING INTEREST) OWED BY THE COMPANY AND ANY OF ITS SUBSIDIARIES PURSUANT TO THAT CERTAIN CREDIT AGREEMENT DATED AS OF FEBRUARY 8, 2019 AMONG THE COMPANY, CERTAIN SUBSIDIARIES OF THE COMPANY, AGENT AND THE LENDERS FROM TIME TO TIME PARTY THERETO, AND THE AGREEMENTS, INSTRUMENTS AND DOCUMENTS EXECUTED IN CONNECTION THEREWITH, AS SUCH CREDIT AGREEMENT AND SUCH OTHER AGREEMENTS, INSTRUMENTS AND DOCUMENTS MAY BE AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME AND TO INDEBTEDNESS REFINANCING ANY SUCH INDEBTEDNESS AS CONTEMPLATED BY THE SUBORDINATION AGREEMENT; AND EACH HOLDER OF THIS INSTRUMENT, BY ITS ACCEPTANCE HEREOF, IRREVOCABLY AGREES TO BE BOUND BY THE PROVISIONS OF THE SUBORDINATION AGREEMENT.”

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2.8.       Obligations Hereunder Not Affected. All rights and interests of Senior Secured Parties and Agent hereunder, and all agreements and obligations of each Subordinated Lender and the Company hereunder, shall remain in full force and effect irrespective of: (a) any lack of validity or enforceability of any document evidencing any of the Senior Debt; (b) any change in the time, manner or place of payment of, or any other term of, all or any of the Senior Debt, or any other amendment or waiver of or any release or consent to departure from any of the Senior Debt Documents; (c) any exchange, release or non-perfection of any collateral or guaranty for all or any of the Senior Debt; (d) any failure of any Senior Secured Party or Agent to assert any claim or to enforce any right or remedy against any party under the provisions of this Agreement or any Senior Debt Document; (e) any reduction, limitation, impairment or termination of the Senior Debt for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to (and Parent, each Loan Party and each Subordinated Lender hereby waive any right to or claim of) any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of invalidity, illegality, nongenuiness, irregularity, compromise, unenforceability of, or any other event or occurrence affect, any Senior Debt; and (f) any other circumstance which might otherwise constitute a defense available to, or a discharge of, any Loan Party in respect of the Senior Debt or any Subordinated Lender in respect of this Agreement. Each Subordinated Lender acknowledges and agrees that Senior Secured Parties and Agent may, in accordance with the terms of the Senior Debt Documents, without notice or demand and without affecting or impairing such Subordinated Lender’s obligations hereunder, from time to time (i) renew, compromise, extend, increase, accelerate or otherwise change the time for payment of, or otherwise change the terms of the Senior Debt or any part thereof, including, without limitation, to increase or decrease the rate of interest thereon or the principal amount thereof; (ii) take or hold security for the payment of the Senior Debt and exchange, enforce, foreclose upon, waive and release any such security; (iii) apply such security and direct the order or manner of sale thereof as Agent and Senior Secured Parties in their sole discretion, may determine; (iv) release and substitute one or more endorsers, warrantors, borrowers or other obligors; and (v) exercise or refrain from exercising any rights against the Company or any other Person.

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2.9.       Enforceability of Senior Debt; Reinstatement. The Senior Debt shall continue to be treated as Senior Debt and the provisions of this Agreement shall continue to govern the relative rights and priorities of Agent and Senior Secured Parties, on the one hand, and Subordinated Lenders, on the other hand, even if all or part of the Senior Debt or the security interests securing the Senior Debt are subordinated, set aside, avoided, invalidated or disallowed. If Agent or any Senior Secured Party is required to disgorge any Distribution from the Parent’s Equity Interests in the Company, the Company or any other Loan Party, proceeds of Collateral or other amount received by such Person (whether because such Distribution, proceeds or other amount is invalidated, declared to be fraudulent or preferential or otherwise) or turn over or otherwise pay any amount (a “Recovery”) to the estate or to any creditor or representative of any Loan Party or any other Person, then the Senior Debt shall be reinstated (to the extent of such Recovery) as if such Senior Debt had never been paid and to the extent any Subordinated Lender has received a Distribution to which such Subordinated Lender would not have been entitled under this Agreement had such reinstatement occurred prior to receipt of such Distribution, such Subordinated Lender shall return such Distribution to Agent for reapplication to the Senior Debt. If this Agreement shall have been terminated prior to such Recovery, this Agreement shall be reinstated in full force and effect, and such prior termination shall not diminish, release, discharge, impair, or otherwise affect the obligations of the parties hereto. This Agreement shall remain in full force and effect and shall continue irrespective of the commencement of, or any discharge, confirmation, conversion, or dismissal of any Proceeding by or against the Parent, the Company or any other Loan Party.

2.10.    Option to Purchase Senior Debt. If (a) the Senior Debt has been accelerated or otherwise becomes due and payable, (b) any payment Event of Default under Section 9.1(a) of the Senior Credit Agreement has occurred and has been continuing for a period of more than fifteen (15) days, or (c) any Event of Default under Sections 9.1(e) or 9.1(f) has occurred (each of the foregoing, a “Purchase Option Event”), upon fifteen (15) Business Days’ prior written notice to Agent (an “Exercise Notice”), Subordinated Lenders (acting severally or jointly) shall have the right to purchase, in whole but not in part, the Senior Debt for a price equal to, without duplication, the sum of:

(i)       the outstanding principal balance thereof, together with all accrued interest and other amounts due thereon (exclusive of any late charges, default interest, exit fees, advances and post-petition interest), including all costs and expenses (including reasonable legal fees and expenses) incurred by Senior Lenders in accordance with the Senior Debt Documents;

(ii)      any unreimbursed obligations and, without duplication, the Outstanding Amount of L/C Obligations (which shall be satisfied by providing cash collateralization of such reimbursement obligations and Outstanding Amount of L/C Obligations in an amount equal to 103% thereof);

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(iii)     cash collateral to secure any unreimbursed obligations in respect of Bank Product Obligations (which shall include any such Bank Product Obligations that are not yet liquidated and/or are contingent in amount) owing to such Senior Lenders who are, or whose Affiliates are, Bank Product Providers; it being agreed by the parties hereto that such Senior Lenders shall (A) as applicable, (x) be entitled to apply such cash collateral to reimburse themselves or their Affiliates for any Bank Product Obligations or other amounts owing related thereto or (y) at the option of such Senior Lender, terminate the applicable agreements related thereto and make all payments pursuant thereto and (B) promptly return any unapplied portion of such cash collateral to such Subordinated Lender (or its agent) at such time as all obligations with respect to such Bank Products have been Paid in Full; and

(iv)       an amount, not otherwise assumed and/or indemnified by Subordinated Lenders, that Agent, in its reasonable business judgment, determines is sufficient to cover any contingent indemnification or expense reimbursement obligation of the Company or any other Loan Party under Section 11.1 of the Credit Agreement for which claims against Agent or any Senior Lender have been asserted in writing, the payment of which amount shall be furnished as cash collateral and the unused portion thereof shall be returned to such Subordinated Lender(s) upon the settlement or other resolutions of such claims (collectively, the “Loan Purchase Price”).

Concurrently with payment to Senior Lenders of the Loan Purchase Price, Senior Lenders shall deliver or cause to be delivered to Subordinated Lenders all Senior Debt Documents held by or on behalf of Senior Lenders and will execute in favor of Subordinated Lenders or its designee assignment documentation, in form and substance reasonably acceptable to Subordinated Lenders, sufficient to assign the Senior Debt and all rights of Senior Lenders under the Senior Debt Documents (without recourse, representations or warranties, except for representations as to the outstanding balance of the Senior Debt and that the Senior Debt Documents and Senior Debt are free and clear of all claims, liens, security interests and encumbrances and that Senior Lenders have delivered all notices of default and other documents executed or delivered in connection with Senior Lenders’ expenses and notices its intention to exercise any legal remedies). The right of Subordinated Lenders to purchase the Senior Debt shall automatically terminate upon the earlier to occur of (1) a transfer of the Collateral by foreclosure sale, sale by power of sale or delivery of a deed in lieu of foreclosure or bill of sale, (2) the payment in full of the Subordinated Debt under the Subordinated Debt Documents and (3) the Payment in Full of the Senior Debt. Agent shall be entitled to conclusively rely on any Exercise Notice for purposes of determining whether a Purchase Option Event has occurred and is continuing and shall not be liable to any Person (including the Parent, the Company or any other Loan Party, any other Subordinated Lender or any of their respective subsidiaries, Affiliates or equity holders) in connection with any such reliance.

3.       Modifications to Senior Debt Documents. Agent and Senior Secured Parties may at any time and from time to time without the consent of or notice to any Subordinated Lender, without incurring liability to such Subordinated Lender and without impairing or releasing the obligations of such Subordinated Lender under and the subordination effected by this Agreement, change the manner or place of payment or extend the time of payment of or renew or alter any of the terms of the Senior Debt (including increasing the Senior Debt), or amend in any manner any Senior Debt Document.

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4.       Modifications to Subordinated Debt Documents. Until all of the Senior Debt has been Paid in Full, and notwithstanding anything to the contrary contained in the Subordinated Debt Documents, no Subordinated Lender shall, without the prior written consent of Agent, agree to any amendment, modification or supplement to the Subordinated Debt Documents or enter into any additional Subordinated Debt Documents, the result of which would cause the aggregate amount of the Subordinated Debt secured by the Collateral at any time outstanding to be in excess of $21,000,000 (it being understood that this Section 4 shall not prohibit any amendment, modification, supplement or additional Subordinated Debt Document with respect to any Subordinated Debt that is either unsecured or secured by assets, including without limitation any Equity Interests, in each case, not constituting Collateral at any time).

5.       Waiver of Certain Rights by Subordinated Lenders.

5.1.       Rights Relating to Agent’s Actions with respect to the Collateral. Each Subordinated Lender hereby waives, to the extent permitted by applicable law, any rights which it may have to enjoin or otherwise obtain a judicial or administrative order preventing Agent or Senior Secured Parties from taking, or refraining from taking, any action with respect to all or any part of the Collateral. Without limitation of the foregoing, each Subordinated Lender hereby agrees (a) that it has no right to direct or object to the manner in which Agent and Senior Secured Parties apply the proceeds of the Collateral resulting from the exercise by Agent and Senior Secured Parties of rights and remedies under the Senior Debt Documents to the Senior Debt and (b) that Agent has not assumed any obligation to act as the agent for any Subordinated Lender with respect to the Collateral.

5.2.       Waiver of Notice of Acceptance. To the fullest extent permitted by applicable law, each Subordinated Lender hereby waives: (a) notice of acceptance hereof; (b) notice of any loans or other financial accommodations made or extended under the Senior Debt Documents, or the creation or existence of any Senior Debt; (c) notice of the amount of the Senior Debt; (d) notice of any adverse change in the financial condition of the Parent, the Company or any other Loan Party or of any other fact that might increase the risk hereunder of such Subordinated Lender; (e) notice of presentment for payment, demand, protest, and notice thereof as to any instrument among the Senior Debt Documents; (f) notice of any Senior Default under the Senior Debt Documents or otherwise relating to the Senior Debt; and (g) all other notices (except if such notice is specifically required to be given to such Subordinated Lender under this Agreement) and demands to which such Subordinated Lender might otherwise be entitled.

5.3.       Waiver of Defenses, Offsets, and Counter-Claims. To the fullest extent permitted by applicable law, each Subordinated Lender hereby waives: (a) any defense, set-off, counterclaim, or claim, of any kind or nature, arising directly or indirectly from the present or future lack of perfection, sufficiency, validity, or enforceability of any Senior Debt or any security therefor; (b) any defense arising by reason of any claim or defense based upon an election of remedies by Agent or any Senior Secured Party; and (c) the benefit of any statute of limitations affecting such Subordinated Lender’s obligations hereunder or the enforcement thereof.

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5.4.       Waiver of Rights of Subrogation. Until such time as the Payment in Full of all Senior Debt shall have occurred, each Subordinated Lender hereby waives and postpones: (a) any right of subrogation such Subordinated Lender has or may have as against the Company or any other Loan Party with respect to any Senior Debt; (b) any right to proceed against the Company, any other Loan Party or any other Person, now or hereafter, for contribution, indemnity, reimbursement, or any other suretyship rights and claims (irrespective of whether direct or indirect, liquidated or contingent), with respect to any Senior Debt; and (c) any right to proceed or to seek recourse against or with respect to the Parent’s Equity Interests in the Company and any property or asset of the Company or any other Loan Party.

5.5.       Waiver of Election of Remedies. WITHOUT LIMITING THE GENERALITY OF ANY OTHER WAIVER OR OTHER PROVISION SET FORTH IN THIS AGREEMENT, EACH SUBORDINATED LENDER WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS AND DEFENSES ARISING OUT OF AN ELECTION OF REMEDIES BY AGENT OR THE SENIOR SECURED PARTIES, EVEN THOUGH THAT ELECTION OF REMEDIES HAS DESTROYED SUCH SUBORDINATED LENDER’S RIGHTS OF SUBROGATION AND REIMBURSEMENT AGAINST THE PARENT, THE COMPANY OR ANY OTHER LOAN PARTY BY THE OPERATION OF ANY APPLICABLE LAW.

5.6.       Waiver of Liability. If Agent or the Senior Secured Parties honor (or fail to honor) a request by the Company or any other Loan Party for an extension of credit pursuant to the Senior Credit Agreement or any of the other Senior Debt Documents, whether or not Agent or the Senior Secured Parties have knowledge that the honoring of (or failure to honor) any such request would constitute a default under the terms of the Subordinated Debt Documents or an act, condition, or event that, with the giving of notice or the passage of time, or both, would constitute such a default, or if Agent or Senior Secured Parties otherwise should exercise any of their contractual rights or remedies under the Senior Debt Documents, Agent and Senior Secured Parties shall have no liability whatsoever to any Subordinated Lender as a result of such action, omission, or exercise. Agent and Senior Secured Parties will be entitled to manage and supervise the loans and extensions of credit under the Senior Debt Documents as they may, in their sole discretion, deem appropriate, and Agent and Senior Lenders and each other holder of Senior Debt may manage its loans and extensions of credit without regard to any rights or interests that Subordinated Lenders may have. Agent and Senior Secured Parties may, from time to time, enter into agreements and settlements with the Parent, the Company or any other Loan Party as they may determine in their sole discretion without impairing any of the subordinations, priorities, rights or obligations of the parties under this Agreement, including, without limitation, substituting Collateral, releasing any Lien and releasing any Loan Party.

5.7.       Information Concerning Financial Condition. Each Subordinated Lender hereby assumes responsibility for keeping itself informed of the financial condition of the Loan Parties and of all other circumstances bearing upon the risk of nonpayment of the Subordinated Debt, and agrees that Agent and Senior Secured Parties have no duty to advise any Subordinated Lender of information known to any of them regarding such condition or any such circumstances. In the event Agent or any Senior Secured Party, in its sole discretion, undertakes, at any time or from time to time, to provide any such information to any Subordinated Lender, it shall be under no obligation (a) to provide any such information to such Subordinated Lender on any subsequent occasion, (b) to undertake any investigation, or (c) to disclose any information which, pursuant to its commercial finance practices, it wishes to maintain confidential.

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6.       Representations and Warranties. Each Subordinated Lender hereby represents and warrants to Agent and Senior Secured Parties that as of the date hereof: (a) it is duly organized and validly existing under the laws of its state of organization; (b) it has the power and authority to enter into, execute, deliver and carry out the terms of this Agreement, all of which have been duly authorized by all proper and necessary action; (c) the execution of this Agreement by such Subordinated Lender will not violate or conflict with its organizational documents, any material agreement binding upon such Subordinated Lender or any law, regulation or order or require any consent or approval which has not been obtained; (d) this Agreement is the legal, valid and binding obligation of such Subordinated Lender, enforceable against such Subordinated Lender in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally; and (e) Subordinated Lenders are the sole owners, beneficially and of record, of the Subordinated Debt Documents to which they are a party and the Subordinated Debt.

7.       Asset Dispositions; Proceedings.

7.1.       Asset Dispositions in a Proceeding under the Bankruptcy Code. No Subordinated Lender shall, in a Proceeding under the Bankruptcy Code or otherwise, oppose any sale or disposition of any Collateral that is supported by the Senior Secured Parties, and each Subordinated Lender will be deemed to have consented under Section 363 of the Bankruptcy Code (and otherwise) to any sale supported by the Senior Secured Parties and to have released their liens on such Collateral.

7.2.       Releases of Subordinated Lenders’ Liens.

(a)       Upon any release, sale or disposition of Collateral permitted pursuant to the terms of the Senior Debt Documents or with the consent of the Senior Secured Parties that results in the release of the lien in favor of Agent for the benefit of the Senior Secured Parties on any Collateral (including without limitation any sale or other disposition pursuant to any Enforcement Action), the liens in favor of the Subordinated Lenders on such Collateral shall be automatically and unconditionally released with no further consent or action of any Person.

(b)       Each Subordinated Lender shall promptly execute and deliver such release documents and instruments and shall take such further actions as Agent shall request to evidence any release of the liens of the Subordinated Lenders described in clause (a) above. Each Subordinated Lender hereby appoints Agent and any officer or duly authorized person of Agent, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power of attorney in the place and stead of such Subordinated Lender and in the name of such Subordinated Lender, or in Agent’s own name, from time to time, in Agent’s sole discretion, for the purposes of carrying out the terms of this Section 7.2, to take any and all appropriate action and to execute and deliver any and all documents and instruments as may be necessary or desirable to accomplish the purposes of this Section 7.2, including, without limitation, any financing statements, endorsements, assignments, releases or other documents or instruments of transfer (which appointment, being coupled with an interest, is irrevocable).

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8.       Proceedings.

8.1.       Financing Matters. If any Loan Party becomes subject to any Proceeding, and if Agent or the other Senior Secured Parties desire to consent (or not object) to the use of cash collateral under the Bankruptcy Code or to provide financing to any Loan Party under the Bankruptcy Code or to consent (or not object) to the provision of such financing to any Loan Party by any third party (any such financing, “DIP Financing”), then each Subordinated Lender agrees that such Subordinated Lender (a) will be deemed to have consented to, will raise no objection to, nor support any other Person objecting to, the use of such cash collateral or to such DIP Financing, (b) will not request or accept adequate protection or any other relief in connection with the use of such cash collateral or such DIP Financing except as set forth in Section 8.3 below, (c) will subordinate (and will be deemed hereunder to have subordinated) any lien under the Subordinated Debt Documents (i) to such DIP Financing on the same terms as the liens under the Senior Debt Documents are subordinated thereto (and such subordination will not alter in any manner the terms of this Agreement), (ii) to any adequate protection provided to Agent and the Senior Secured Parties and (iii) to any “carve-out” agreed to by Agent or the other Senior Secured Parties, and (d) agrees that notice received two calendar days prior to the entry of an order approving such usage of cash collateral or approving such financing shall be adequate notice.

8.2.       Relief From the Automatic Stay. Each Subordinated Lender agrees that it will not seek relief from the automatic stay or from any other stay in any Proceeding against any Loan Party or take any action in derogation thereof, in each case in respect of any Collateral, without the prior written consent of Agent.

8.3.       Adequate Protection. Each Subordinated Lender agrees that it shall not object, contest, or support any other Person objecting to or contesting, (a) any request by Agent or the other Senior Secured Parties for adequate protection or any adequate protection provided to Agent or the other Senior Secured Parties or (b) any objection by Agent or any other Senior Secured Parties to any motion, relief, action or proceeding based on a claim of a lack of adequate protection or (c) the payment of interest, fees, expenses or other amounts to Agent or any other Senior Secured Party under Section 506(b) or 506(c) of the Bankruptcy Code or otherwise. Notwithstanding anything contained in this Section 8, in any Proceeding against any Loan Party under the Bankruptcy Code, (i) if the Senior Secured Parties (or any subset thereof) are granted adequate protection consisting of additional collateral (with replacement liens on such additional collateral) and superpriority claims in connection with any DIP Financing or use of cash collateral, and the Senior Secured Parties do not object to the adequate protection being provided to them, then in connection with any such DIP Financing or use of cash collateral, each Subordinated Lender may seek or accept adequate protection consisting solely of (x) a replacement lien on the same additional collateral, subordinated to the liens securing the Senior Debt and such DIP Financing on the same basis as the other liens securing the Subordinated Debt are so subordinated to the Senior Debt under this Agreement and (y) superpriority claims junior in all respects to the superpriority claims granted to the Senior Secured Parties, provided, however, that each Subordinated Lender shall have irrevocably agreed, pursuant to Section 1129(a)(9) of the Bankruptcy Code in any stipulation and/or order granting such adequate protection, that such junior superpriority claims may be paid under any plan of reorganization in any combination of cash, debt, equity or other property having a value on the effective date of such plan equal to the allowed amount of such claims and (ii) in the event any Subordinated Lender seeks or accepts adequate protection in accordance with clause (i) above and such adequate protection is granted in the form of additional collateral, then each Subordinated Lender agrees that Agent shall also be granted a senior lien on such additional collateral as security for the Senior Debt and any such DIP Financing and that any lien on such additional collateral securing the Subordinated Debt shall be subordinated to the liens on such collateral securing the Senior Debt and any such DIP Financing (and all obligations relating thereto) and any other liens granted to the Senior Secured Parties as adequate protection, with such subordination to be on the same terms that the other liens securing the Subordinated Debt are subordinated to such Senior Debt under this Agreement. Each Subordinated Lender agrees that, except as expressly set forth in this Section 8, it shall not seek or accept adequate protection without the prior written consent of Agent.

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8.4.       Other Matters. To the extent that any Subordinated Lender has or acquires rights under Section 363 or Section 364 of the Bankruptcy Code with respect to any of the Collateral, each Subordinated Lender agrees not to assert any of such rights without the prior written consent of the Agent; provided that if requested by the Agent, each Subordinated Lender shall timely exercise such rights in the manner requested by the Agent, including any rights to payments in respect of such rights.

9.       Subrogation. Upon the Payment in Full of all Senior Debt, each Subordinated Lender shall be subrogated to the rights of Agent and Senior Secured Parties to receive Distributions from the Parent’s Equity Interests in the Company, the Company or any other Loan Party until the Subordinated Debt is paid in full. Without limiting the other provisions of this Agreement (including, without limitation, Section 2.9), each Subordinated Lender agrees that in the event that all or any part of a payment made with respect to the Senior Debt is recovered from the holders of the Senior Debt in a Proceeding or otherwise, any Distribution from the Parent’s Equity Interests in the Company, the Company or any other Loan Party received by such Subordinated Lender with respect to the Senior Debt at any time after the date of the payment that is so recovered, whether pursuant to the right of subrogation provided for in this Agreement or otherwise, shall be deemed to have been received by such Subordinated Lender in trust as property of the holders of the Senior Debt and such Subordinated Lender shall forthwith deliver the same to Agent for the benefit of the Senior Secured Parties for application to the Senior Debt until all of the Senior Debt is Paid in Full. A Distribution from the Parent’s Equity Interests in the Company, the Company or any other Loan Party made pursuant to this Agreement to Agent or Senior Secured Parties which otherwise would have been made to a Subordinated Lender is not, as between the Company and such Subordinated Lender, a payment by the Company to or on account of the Senior Debt.

10.       Modification. Any modification or waiver of any provision of this Agreement, or any consent to any departure by any party from the terms hereof, shall not be effective in any event unless the same is in writing and signed by Agent and each Subordinated Lender, and then such modification, waiver or consent shall be effective only in the specific instance and for the specific purpose given. Any notice to or demand on any party hereto in any event not specifically required hereunder shall not entitle the party receiving such notice or demand to any other or further notice or demand in the same, similar or other circumstances unless specifically required hereunder.

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11.       Further Assurances. Each party to this Agreement promptly will execute and deliver such further instruments and agreements and do such further acts and things as may be reasonably requested in writing by any other party hereto that may be necessary or desirable in order to effect fully the purposes of this Agreement.

12.       Consent to Senior Debt. To the extent that the Company’s incurrence of the Senior Debt or the Parent’s or any Loan Party’s guarantee thereof (a) may require the consent of the Subordinated Lenders pursuant to the Subordinated Notes, (b) creates a default under the Subordinated Notes or (c) gives rise to any other rights or remedies under the Subordinated Notes, each Subordinated Lender hereby (i) consents to any Loan Party’s incurrence of the Senior Debt and the Parent’s or any applicable Loan Party’s guarantee thereof, and (ii) agrees that the incurrence of the Senior Debt by the Loan Parties and the guarantee thereof by the Parent or any applicable Loan Party will not constitute a default or event of default under the Subordinated Notes.

13.       Notices. Unless otherwise specifically provided herein, any notice delivered under this Agreement shall be in writing addressed to the respective party as set forth below and may be personally served, faxed or sent by overnight courier service or certified or registered United States mail and shall be deemed to have been given (a) if delivered in person, when delivered; (b) if delivered by facsimile, on the date of transmission if transmitted on a business day before 5:00 p.m. (Central time) or, if not, on the next succeeding business day; (c) if delivered by overnight courier, one business day after delivery to such courier properly addressed; or (d) if by United States mail, three business days after deposit in the United States mail, postage prepaid and properly addressed.

Notices shall be addressed as follows:

If to the Subordinated Lenders:

RNS Flex, LLC

309 Agate Street

Laguna Beach, CA 92651

Attention: Mallory McCamant

Email: MalloryMcCamant@RNScapitalpartners.com

TRF Platform Holdings, LLC

c/o Intervale Capital

20 University Road, Suite 360

Cambridge, MA 02138

Fax No.: (617) 497-8453

Email: christine@intervalecapital.com

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Energy Special Situations Fund II, L.P.

ESS Participation Fund II, L.P.

c/o ESS Funds

1801 Patterson Street

Houston, TX 77007

Email: jlinker@essfunds.com

If to the Parent or any Loan Party:

c/o FlexEnergy Power Solutions, LLC

6400 S. Fiddlers Green Circle, Suite 900

Greenwood Village, Colorado 80111

Attention: Doug Baltzer

Fax: (303) 694-0344

E-Mail: doug.baltzer@flexleasingpower.com

With a copy to:

Fennemore Craig, P.C.

2394 E. Camelback Rd, Suite 600

Phoenix, Arizona 85016

Attention: C.W. Ross

Fax: 602.916.5503

If to Agent or Senior Secured Parties:

Texas Capital Bank, National Association

2000 McKinney Avenue, Suite 700

Dallas, Texas 75201

Attention: ABL Portfolio Manager

E-Mail: ABL@texascapitalbank.com

With a copy to:

Vinson & Elkins LLP

2001 Ross Avenue, Suite 3900

Dallas, Texas 75201

Attention: Bailey Pham

E-Mail: bpham@velaw.com

or in any case, to such other address as the party addressed shall have previously designated by written notice to the serving party, given in accordance with this Section 13.

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14.       Successors and Assigns. This Agreement shall inure to the benefit of, and shall be binding upon, the respective successors and assigns of Agent, Senior Secured Parties, Subordinated Lenders, Parent and the Loan Parties. Senior Secured Parties may, from time to time, without notice to any Subordinated Lender, assign or transfer any or all of the Senior Debt or any interest therein to any Person and, notwithstanding any such assignment or transfer, or any subsequent assignment or transfer, the Senior Debt shall, subject to the terms hereof, be and remain Senior Debt for purposes of this Agreement, and every assignee or transferee of any of the Senior Debt or of any interest therein shall, to the extent of the interest of such assignee or transferee in the Senior Debt, be entitled to rely upon and be the third party beneficiary of the subordination provided under this Agreement and shall be entitled to enforce the terms and provisions hereof to the same extent as if such assignee or transferee were initially a party hereto. Each Subordinated Lender agrees that any party that refinances the Senior Debt may rely on and enforce this Agreement. Each Subordinated Lender further agrees that it will, at the request of Agent, enter into an agreement, in the form of this Agreement, mutatis mutandis, with the party that refinances the Senior Debt, provided, that the failure of such Subordinated Lender to execute such an agreement shall not affect such party’s right to rely on and enforce the terms of this Agreement.

15.       Relative Rights. This Agreement shall define the relative rights of Agent, Senior Secured Parties and Subordinated Lenders. Nothing in this Agreement shall (a) impair, as among the Loan Parties, Agent and Senior Secured Parties and as between the Parent and Subordinated Lenders, the obligation of the Loan Parties with respect to the payment of the Senior Debt and the obligation of the Parent with respect to the payment of the Subordinated Debt in accordance with their respective terms or (b) affect the relative rights of Agent, Senior Secured Parties or Subordinated Lenders with respect to any other creditors of the Loan Parties or Parent.

16.       Conflict. In the event of any conflict between any term, covenant or condition of this Agreement and any term, covenant or condition of any of the Subordinated Debt Documents, the provisions of this Agreement shall control and govern.

17.       Headings. The paragraph headings used in this Agreement are for convenience only and shall not affect the interpretation of any of the provisions hereof.

18.       Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of this Agreement by fax or other electronic transmission (e.g., “.pdf”) shall be effective as delivery of a manually executed counterpart of this Agreement.

19.       Severability. In the event that any provision of this Agreement is deemed to be invalid, illegal or unenforceable by reason of the operation of any law or by reason of the interpretation placed thereon by any court or governmental authority, the validity, legality and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby, and the affected provision shall be modified to the minimum extent permitted by law so as most fully to achieve the intention of this Agreement.

20.       Continuation of Subordination; Termination of Agreement. This Agreement shall remain in full force and effect until all of the Senior Debt is Paid in Full, and shall thereafter be reinstated as provided in Section 2.9.

21.       Applicable Law. This Agreement shall be governed by and shall be construed and enforced in accordance with the internal laws of the State of Texas.

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22.       Consent to Jurisdiction; Waiver of Jury Trial. Parent, the Loan Parties, Subordinated Lenders and Agent each consent to the jurisdiction of any state or federal court located within Dallas County, Texas. Parent, each Loan Party and each Subordinated Lender waives personal service of any and all process upon it, and consents that all service of process be made in the manner set forth in Section 13. Parent, each Loan Party, each Subordinated Lender and Agent each waive, to the fullest extent each may effectively do so, any defense or objection based upon forum non conveniens and any defense or objection to venue of any action instituted within Dallas County, Texas. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION TO ENFORCE OR DEFEND ANY MATTER ARISING FROM OR RELATED TO THIS AGREEMENT.

23.       Costs and Attorneys’ Fees. In the event it becomes necessary for Agent or Senior Secured Parties to commence or become a party to any proceeding or action to enforce the provisions of this Agreement, the court or body before which the same shall be tried shall award to Agent and Senior Secured Parties, if the prevailing parties thereunder, all costs and expenses thereof (solely to the extent they pertain to enforcing the provisions of this Agreement, as opposed to the Senior Debt Documents generally), including reasonable attorneys’ fees, the usual and customary and lawfully recoverable court costs, and all other expenses in connection therewith.

24.       Independent Action. Except as otherwise expressly provided herein, each Subordinated Lender may manage and supervise (a) its loans and extensions of credit under the Subordinated Debt Documents, (b) its membership interest in Parent, and (c) the actions or inactions of its representatives on the board of managers of Parent in each case in accordance with applicable law and as it may otherwise, in its sole discretion, deem appropriate.

25.       Integrated Agreement. THIS AGREEMENT REPRESENTS AND EMBODIES THE ENTIRE AND FINAL AGREEMENT AMONG THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDES ALL PRIOR WRITTEN OR ORAL AGREEMENTS AND UNDERSTANDINGS, IF ANY, RELATING TO THE SUBJECT MATTER HEREOF. THIS AGREEMENT MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN, ORAL AGREEMENTS BETWEEN THE PARTIES.

26.       Additional Loan Parties. The Company shall cause each Person that becomes a Loan Party after the date hereof to become a party to this Agreement by execution and delivery by such Person of a Joinder Agreement in the form of Exhibit B hereto.

[Signature Pages Follow]

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IN WITNESS WHEREOF, each Subordinated Lender, Parent, the Loan Parties and Agent have caused this Agreement to be executed as of the date first above written.

SUBORDINATED LENDERS:
RNS FLEX, LLC
By:	RNS Management, LLC, its Manager
	By:	/s/ Thomas R. Denison
		Thomas R. Denison, Manager
ENERGY SPECIAL SITUATIONS FUND II, L.P.
By:		Energy Special Situations Fund Management II, LLC, its general partner
	By:
		Jonathan S. Linker, Manager
ESS PARTICIPATION FUND II, L.P.
By:		Energy Special Situations Fund Management II, LLC, its general partner
	By:
		Jonathan S. Linker, Manager
TRF PLATFORM HOLDINGS, LLC
By:		Intervale Capital Fund III, L.P., its manager
By:		Intervale Capital GP III, L.P., its general partner
By:		Intervale Capital Associates III LLC, its general partner
	By:
		Patrick Connelly, Authorized Person

[Signature Page to Subordination and Intercreditor Agreement – Flex Leasing Power & Service LLC]

IN WITNESS WHEREOF, each Subordinated Lender, Parent, the Loan Parties and Agent have caused this Agreement to be executed as of the date first above written.

SUBORDINATED LENDERS:
RNS FLEX, LLC
By:	RNS Management, LLC, its Manager
	By:
		Thomas R. Denison, Manager
ENERGY SPECIAL SITUATIONS FUND II, L.P.
By:	Energy Special Situations Fund Management II, LLC, its general partner
	By:	/s/ Jonathan S. Linker
		Jonathan S. Linker, Manager
ESS PARTICIPATION FUND II, L.P.
By:	Energy Special Situations Fund Management II, LLC, its general partner
	By:	/s/ Jonathan S. Linker
		Jonathan S. Linker, Manager
TRF PLATFORM HOLDINGS, LLC
By:	Intervale Capital Fund III, L.P., its manager
By:	Intervale Capital GP III, L.P., its general partner
By:	Intervale Capital Associates III LLC, its general partner
	By:
		Patrick Connelly, Authorized Person

[Signature Page to Subordination and Intercreditor Agreement – Flex Leasing Power & Service LLC]

IN WITNESS WHEREOF, each Subordinated Lender, Parent, the Loan Parties and Agent have caused this Agreement to be executed as of the date first above written.

SUBORDINATED LENDERS:
RNS FLEX, LLC
By:	RNS Management, LLC, its Manager
	By:
		Thomas R. Denison, Manager
ENERGY SPECIAL SITUATIONS FUND II, L.P.
By:	Energy Special Situations Fund Management II, LLC, its general partner
	By:
		Jonathan S. Linker, Manager
ESS PARTICIPATION FUND II. L.P.
By:	Energy Special Situations Fund Management II, LLC, its general partner
	By:
		Jonathan S. Linker, Manager
TRF PLATFORM HOLDINGS, LLC
By:	Intervale Capital Fund III, L.P., its manager
By:	Intervale Capital GP III, L.P., its general partner
By:	Intervale Capital Associates III LLC, its general partner
	By:	/s/ Patrick Connelly
		Patrick Connelly, Authorized Person

[Signature Page to Subordination and Intercreditor Agreement – Flex Leasing Power & Service LLC]

PARENT:
FLEXENERGY POWER SOLUTIONS, LLC,
a Delaware limited liability company
By	/s/ Wes Kimmel
Name:	Wes Kimmel
Title:	Chief Financial Officer
LOAN PARTIES:
FLEX LEASING POWER & SERVICE LLC,
a Delaware limited liability company
By
Name:	Darin Romine
Title:	Vice President—Finance
FLEX POWER CO.,
a Delaware corporation
By
Name:	Darin Romine
Title:	Vice President

[Signature Page to Subordination and Intercreditor Agreement – Flex Leasing Power & Service LLC]

PARENT:
FLEXENERGY POWER SOLUTIONS, LLC,
a Delaware limited liability company
By
Name:	Wes Kimmel
Title:	Chief Financial Officer
LOAN PARTIES:
FLEX LEASING POWER & SERVICE LLC,
a Delaware limited liability company
By	/s/ Darin Romine
Name:	Darin Romine
Title:	Vice President—Finance
FLEX POWER CO.,
a Delaware corporation
By	/s/ Darin Romine
Name:	Darin Romine
Title:	Vice President

[Signature Page to Subordination and Intercreditor Agreement – Flex Leasing Power & Service LLC]

AGENT:
TEXAS CAPITAL BANK, NATIONAL ASSOCIATION, as Agent
By:	/s/ Jeff A. Tompkins
Name:	Jeff A. Tompkins
Title:	Senior Vice President

[Signature Page to Subordination and Intercreditor Agreement – Flex Leasing Power & Service LLC]

EX-10.22

Exhibit 10.22

Execution Version

FIRST AMENDMENT TO CREDIT AGREEMENT AND FIRST AMENDMENT TO
PLEDGE AND SECURITY AGREEMENT

This FIRST AMENDMENT TO CREDIT AGREEMENT AND FIRST AMENDMENT TO PLEDGE AND SECURITY AGREEMENT (this “Amendment”) is made and entered into on January 27, 2020 (the “First Amendment Effective Date”), by and among FLEX LEASING POWER & SERVICE LLC, a Delaware limited liability company (the “Company”), the other Borrowers and Loan Parties party hereto, TEXAS CAPITAL BANK, NATIONAL ASSOCIATION, in its capacity as Administrative Agent (the “Administrative Agent”), and the Lenders (as defined below) party hereto.

RECITALS:

WHEREAS, the Loan Parties are party to that certain Credit Agreement dated as of February 8, 2019 (as amended, restated, supplemented or otherwise modified, the “Credit Agreement”), by and among the Company, the other Borrowers from time to time party thereto, the other Loan Parties from time to time party thereto, the financial institutions from time to time party thereto as lenders (the “Lenders”) and the Administrative Agent. Capitalized terms used but not defined herein have the meaning set forth in the Credit Agreement, as amended hereby.

WHEREAS, the Company, the other Borrowers, the other Loan Parties and the Administrative Agent are parties to that certain Pledge and Security Agreement dated as of February 8, 2019 (as amended, restated, supplemented or otherwise modified, the “Security Agreement”).

WHEREAS, the Company, the other Borrowers, the other Loan Parties, the Administrative Agent and the Lenders desire to (a) amend the Credit Agreement and (b) the Security Agreement, in each case, as provided herein upon the terms and conditions set forth herein.

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

SECTION 1. Amendments to the Credit Agreement. In reliance upon the representations, warranties, covenants and conditions contained in this Amendment, and subject to the terms, and satisfaction of the conditions precedent set forth in Section 3 hereof, the Credit Agreement is hereby amended as of the First Amendment Effective Date in the manner provided in this Section 1.

1.1       Additional Definitions. Section 1.1 of the Credit Agreement is hereby amended to add thereto in alphabetical order each of the following definitions which shall read in full as follows:

“BHC Act Affiliate” means, as to any Person, an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such Person.

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“Covered Entity” means any of the following: (a) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (b) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (c) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).

“Covered Party” has the meaning set forth in Section 11.32.

“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

“Eligible Field Units” means the Eligible Inventory owned by the Borrowers consisting of Field Units.

“Field Units” means Inventory of the Borrowers generally consisting of diesel generators, oil and gas separators, electrical switchgear, and other related support equipment, which, in each case, are not part of any Generator Package.

“First Amendment” means that certain First Amendment to Credit Agreement and First Amendment to Pledge and Security Agreement dated as of the First Amendment Effective Date, by and among the Company, the other Borrowers and the other Loan Parties party thereto, the Administrative Agent and the Lenders party thereto.

“First Amendment Effective Date” means January 27, 2020.

“QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).

“QFC Credit Support” has the meaning set forth in Section 11.32.

“Supported QFC” has the meaning set forth in Section 11.32.

“U.S. Special Resolution Regimes” has the meaning set forth in Section 11.32.

1.2       Amended Definitions. The definitions of the following terms contained in Section 1.1 of the Credit Agreement are hereby amended as follows:

(a)       Clause (l) of the definition “Eligible Inventory” is hereby amended by adding a reference to the phrase “and Field Units” immediately after the reference to “Generator Units” therein.

(b)       The definition of “Rent Reserve” is hereby amended by adding a reference to the phrase “and Field Units” immediately after the reference to “Generator Units” therein.

(c)       The definition of “Excluded Accounts” is hereby amended by adding “or” immediately before “(c)” therein.

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1.3       Restated Definitions. The definitions of the following terms contained in Section 1.1 of the Credit Agreement are hereby amended and restated in their respective entireties to read as follows:

“Borrowing Base” means, as of any date, an amount equal to the sum of, without duplication:

(a)       ninety percent (90%) of the Borrowers’ Eligible Accounts owing by Investment Grade Account Debtors, plus

(b)       eighty-five percent (85%) of the Borrowers’ Eligible Accounts owing by Non-Investment Grade Account Debtors, plus

(c)       fifty percent (50%) of the Borrowers’ Eligible Inventory, valued at the lower of cost or market value, determined on a weighted average cost basis; provided, that the maximum amount of Eligible Inventory of the Borrowers that may be included in the Borrowing Base pursuant to this clause (c) after giving effect to the advance rate set forth herein shall not exceed $3,000,000, plus

(d)       the lesser of (i) the product of eighty percent (80%) of the Net Orderly Liquidation Value of the Borrowers’ Eligible Generator Units as determined pursuant to the most recent generator appraisal ordered, received and relied upon by Administrative Agent pursuant to Section 6.6(c) and (ii) ninety-five percent (95%) of the net book value of the Borrowers’ Eligible Generator Units; provided that (A) the value of Eligible Generator Units included in the Borrowing Base pursuant to clause (d)(i) after giving effect to the advance rate set forth herein shall be reduced, on the first day of each calendar month following the Closing Date, based on a 7-year straight line amortization schedule until Administrative Agent receives a new appraisal at which time the Net Orderly Liquidation Value will reset, and (B) the value of Eligible Generator Units included in the Borrowing Base pursuant to this clause (d) after giving effect to the advance rate set forth herein shall be reduced, on the date any item of Eligible Generator Units ceases to be Eligible Generator Units for any reason (including as a result of any sale, transfer or other disposition thereof or any casualty or condemnation event with respect thereto), by the amount then included in the Borrowing Base with respect to such item of Eligible Generator Units, plus

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(e)       the lesser of (i) the product of eighty percent (80%) of the Net Orderly Liquidation Value of the Borrowers’ Eligible Field Units as determined pursuant to the most recent field unit appraisal ordered, received and relied upon by Administrative Agent pursuant to Section 6.6(c) and (ii) ninety-five percent (95%) of the net book value of the Borrowers’ Eligible Field Units; provided that (A) the value of Eligible Field Units included in the Borrowing Base pursuant to clause (e)(i) after giving effect to the advance rate set forth herein shall be reduced, on the first day of each calendar month following the First Amendment Effective Date, based on a 5-year straight line amortization schedule until Administrative Agent receives a new appraisal at which time the Net Orderly Liquidation Value will reset, and (B) the value of Eligible Field Units included in the Borrowing Base pursuant to this clause (e) after giving effect to the advance rate set forth herein shall be reduced, on the date any item of Eligible Field Units ceases to be Eligible Field Units for any reason (including as a result of any sale, transfer or other disposition thereof or any casualty or condemnation event with respect thereto), by the amount then included in the Borrowing Base with respect to such item of Eligible Field Units, plus

(f)       eighty percent (80%) of the Net Invoice Cost of the Borrowers’ Eligible New Generator Units, minus

(g)       any Availability Reserves established by Administrative Agent in its Permitted Discretion.

“Generator Units” means Inventory of the Borrowers consisting of completed Generator Packages. For the avoidance of doubt Generator Units will not include any Field Units.

“Leverage Ratio” means, as of the last day of the last fiscal month of each fiscal quarter, the ratio of (i) all Debt of Company and its Subsidiaries, on a consolidated basis in accordance with GAAP, as of such date to (ii) Annualized EBITDA of Company and its Subsidiaries, on a consolidated basis in accordance with GAAP, as of such date.

“Loan Documents” means this Agreement, the First Amendment, each Guaranty, the Security Documents, the Notes, the Issuer Documents, and all other promissory notes, security agreements, deeds of trust, assignments, letters of credit, guaranties, and other instruments, documents, or agreements executed and delivered pursuant to or in connection with this Agreement or the Security Documents; provided that the term “Loan Documents” shall not include any Bank Product Agreement.

“Trigger Period” means any period commencing on the first date on which (a) an Event of Default has occurred and is continuing or (b) Availability plus the amount, if any, by which the Borrowing Base on such date exceeds the aggregate Commitments of the Lenders then in effect, is less than the greater of (i) $3,500,000 and (ii) 10% of the aggregate Commitments then in effect, and continuing until the date upon which both (A) Availability (and solely to the extent such Trigger Period commenced only as a result of an event under subclause (b) above, plus the amount, if any, by which the Borrowing Base on such date exceeds the aggregate Commitments of the Lenders then in effect) has been equal to or greater than the greater of (x) $3,500,000 and (y) 10% of the aggregate Commitments then in effect, in each case, at all times during the preceding sixty (60) consecutive day period, and (B) no Event of Default has occurred and is continuing during such sixty (60) consecutive day period.

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1.4       Amendment to Section 6.1(c) of the Credit Agreement. Section 6.1(c) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

(c)       Borrowing Base Report. As soon as available (or contemporaneously with a Disposition of Generator Packages, Generator Units or Field Units pursuant to Section 7.8(f)), and in any event within twenty (20) days after the last day of each fiscal month, a Borrowing Base Report, calculating the Borrowing Base and reflecting the components of the Borrowing Base, including (i) Eligible Accounts of each of the Borrowers as of the end of the preceding month and calculating the advance amounts based thereon, together with the Account Agings, (ii) Eligible Inventory, Eligible Generator Units, Eligible New Generator Units, and Eligible Field Units of each of the Borrowers as of the end of the preceding month and calculating the advance amounts based thereon and (iii) such worksheets detailing the Accounts excluded from Eligible Accounts and Inventory (including Generator Units and Field Units) excluded from Eligible Inventory, Eligible Generator Units, Eligible New Generator Units and Eligible Field Units, as the case may be, and the reason for such exclusion; provided that if a Trigger Period is in effect, a Borrowing Base Report and related documentation shall be due on or before the third (3^rd) Business Day of each week (or contemporaneously with a Disposition of Generator Packages, Generator Units or Field Units pursuant to Section 7.8(f) during a Trigger Period) calculating the Borrowing Base and reflecting the Eligible Accounts, Eligible Inventory, Eligible Generator Units, Eligible New Generator Units and Eligible Field Units of each of the Borrowers as of the end of the preceding week and calculating the advance amounts based thereon. Such report shall also reflect the amount of sales and receipts of Borrowers during the preceding period and such other information as Administrative Agent may reasonably request;

1.5       Amendment to Section 6.1(m) of the Credit Agreement. Section 6.1(m) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

(m)       Inventory Report(s). As soon as available and in any event within twenty (20) days after the end of each calendar month (or earlier if a Trigger Period is in effect or if deemed necessary by Administrative Agent in its sole discretion), an Inventory perpetual report for the Borrowers and a schedule that lists Inventory (including Generator Units and Field Units) by item, quantity, cost, location, customer, utilization, leased or rented out or held for lease or rent, appraised or not appraised in most recent appraisal, and eligible or ineligible as Eligible Inventory;

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1.6       Amendment to Section 6.1(r) of the Credit Agreement. Section 6.1(r) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

(r)       Additional Information. If requested by Administrative Agent, (i) cash receipt journals or copies of checks, invoices for new billings, sales journals and backup for all miscellaneous credits and debits, purchases journals and cost of goods sold reports and inventory reports, which support a Borrowing Base report, (ii) a schedule detailing each Borrower’s Inventory, in form satisfactory to Administrative Agent, (A) by location (showing Inventory in transit and any Inventory located with a third party under any consignment, bailee arrangement or warehouse agreement), by product type (including Generator Units or Field Units), and by volume on hand, which Inventory shall be valued at the lower of cost or market (which approximates cost) and adjusted for Availability Reserves as Administrative Agent has previously indicated to the Borrowers are deemed by Administrative Agent to be appropriate, and (B) including a report of any variances or other results of Inventory counts performed by the Borrowers since the last Inventory schedule (including information regarding sales or other reductions, additions, returns, credits issued by the Borrowers and complaints and claims made against any Borrower) and (iii) a status report regarding each uptime energy, servicing or lease agreement covering any Generator Unit or Field Units, including whether such uptime energy, servicing or lease agreement has been amended, restated, modified or terminated during such period and delivering a copy of any new uptime energy, servicing or lease agreement or any amendment, modification or termination of any uptime energy, servicing or lease agreement.

1.7       Amendment to Section 6.6(a) of the Credit Agreement. Section 6.6(a) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

(a)       Each Loan Party shall, and shall cause each of its Subsidiaries to, permit representatives and independent contractors of Administrative Agent and each Lender (i) to examine, inspect, review, evaluate and make physical verifications of the Inventory (including Generator Units and Field Units) and other Collateral in any manner and through any medium that Administrative Agent or such Lender considers advisable, (ii) to visit and inspect its Properties, (iii) to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom and (iv) to discuss its affairs, business, operations, financial condition and accounts with its directors, officers, employees and independent certified public accountants, all at the expense of Borrowers and at such reasonable times during normal business hours and as often as may be reasonably requested; provided that, other than with respect to such visits and inspections during the continuance of an Event of Default, (A) only Administrative Agent on behalf of the Lenders may exercise rights under this clause (a) and (B) subject to Section 6.6(c), Administrative Agent shall not exercise such rights more often than one time during any period of twelve (12) consecutive months; provided, further, that when an Event of Default exists Administrative Agent or any Lender (or any of their respective representatives or independent contractors) may do any of the foregoing under this Section at the expense of Borrowers and at any time during normal business hours and without advance notice.

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1.8       Amendment to Section 6.6(c) of the Credit Agreement. Section 6.6(c) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

(c)       Each Loan Party shall, and shall cause each of its Subsidiaries to, permit any representatives designated by Administrative Agent (including any consultants, accountants, lawyers and appraisers retained by Administrative Agent) to conduct third-party appraisals or updates thereof of the Inventory (including Generator Units and Field Units) owned by the Loan Parties, all at the expense of Borrowers and at such reasonable times; provided that Borrowers shall not be required to pay for more than two such third-party appraisals in any period of twelve (12) consecutive months unless an Event of Default has occurred and is continuing (in which case any such third-party appraisal conducted when an Event of Default has occurred and is continuing shall be at the sole cost and expense of Borrowers).

1.9       Amendment to Section 6.15 of the Credit Agreement. Section 6.15 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

Section 6.15     Certificates of Title. The Loan Parties shall cause Administrative Agent to be named as lienholder on all of their (a) Generator Units that are evidenced by a certificate of title, (b) New Generator Units acquired after the Closing Date that are evidenced by a certificate of title and (c) Field Units that are evidenced by a certificate of title, in each case, in accordance with Section 4.3(d) of the Security Agreement.

1.10       Amendment to Section 7.8 of the Credit Agreement. Section 7.8 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

Section 7.8     Disposition of Assets. Each Loan Party shall not, and shall not permit any of its Subsidiaries to, directly or indirectly make any Disposition, except (a) Dispositions of Inventory in the ordinary course of business, (b) Dispositions, for fair value, of worn-out, surplus and obsolete equipment not necessary or useful to the conduct of business, (c) Dispositions of Equity Interests permitted by Section 7.6, (d) Dispositions of Property to any Loan Party or any Subsidiary, provided that any such Disposition involving a Subsidiary that is not a Loan Party shall be made in compliance with Sections 7.5 or 7.6, (e) the unwinding of any Hedge Agreement, (f) Dispositions of Generator Packages, Generator Units or Field Units not to exceed $8,000,000 in the aggregate in any fiscal year; provided that (i) no Default or Event of Default shall have occurred and be continuing both before and after giving effect to such Disposition, (ii) Borrowers shall concurrently with such Disposition deliver a pro forma Borrowing Base Report to Administrative Agent giving effect to such Disposition (with such Disposition, for the avoidance of doubt, calculated based on the Net Orderly Liquidation Value of such Generator Packages, Generator Units and/or Field Units at such time) and the Borrowing Base shall be adjusted immediately upon receipt of such Borrowing Base Report to reflect such Disposition, (iii) after giving effect to such Disposition, including the reduction of the Borrowing Base in accordance with the foregoing clause (ii), Availability shall be equal to or greater than $0 or the Borrowers shall make any mandatory prepayment pursuant to Section 2.9(c)(i) concurrently with such Disposition, and (iv) such Disposition shall be made for fair value and for at least 80% cash consideration or (g) other Dispositions (other than with respect to any Accounts or other Property included in the Borrowing Base at any time) not to exceed $2,000,000 in the aggregate in any fiscal year.

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1.11       Amendment to Article 11 of the Credit Agreement. Article 11 of the Credit Agreement is amended by adding the following new section in its entirety immediately following Section 11.31 of the Credit Agreement:

Section 11.32. Acknowledgement Regarding Any Supported QFCs. To the extent that the Loan Documents provide support, through a guarantee or otherwise, for Hedge Agreements or any other agreement or instrument that is a QFC (such support, “QFC Credit Support” and each such QFC a “Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Loan Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of Texas and/or of the United States or any other state of the United States). In the event a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regimes if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regimes, Default Rights under the Loan Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Loan Documents were governed by the laws of the United States or a state of the United States.

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1.12       Replacement of Exhibit B to the Credit Agreement. Exhibit B attached to the Credit Agreement is hereby replaced in its entirety with Exhibit B attached hereto as Annex I. Exhibit B attached hereto as Annex I shall be deemed to be attached as Exhibit B to the Credit Agreement as of the First Amendment Effective Date.

SECTION 2.      Amendments to the Security Agreement. In reliance upon the representations, warranties, covenants and conditions contained in this Amendment, and subject to the terms, and satisfaction of the conditions precedent set forth in Section 3 hereof, the Security Agreement is hereby amended as of the First Amendment Effective Date in the manner provided in this Section 2.

2.1       Restated Definition. The definition of the following term contained in Section 1.3 of the Security Agreement is hereby amended and restated in its entirety to read as follows:

“Generator Location” means, at any time, any customer location where a Grantor’s Generator Units or Field Units are in the possession of a customer pursuant to an uptime energy, servicing or lease agreement entered into by a Grantor and such Person in the ordinary course of business.

2.2       Article II of the Security Agreement. Clause (xi) set forth in Article II of the Security Agreement shall be amended and restated in its entirety to read as follows:

(xi)       all Inventory (including Generator Units and Field Units);

2.1       Section 3.9(d) of the Security Agreement. Section 3.9(d) of the Security Agreement is hereby amended and restated in its entirety to read as follows:

(d) except as specifically disclosed in the most recent Collateral Report delivered to the Administrative Agent, such Inventory is Eligible Inventory, Eligible Generator Units, Eligible New Generator Units or Eligible Field Units, as the case may be

2.2       Section 3.11 of the Security Agreement. The first sentence in Section 3.11 of the Security Agreement is hereby amended and restated in its entirety to read as follows:

As of the First Amendment Effective Date, none of its Equipment is covered by any certificate of title, except for the Generator Units, Field Units, vehicles and other rolling stock described in Part I of Exhibit E.

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2.3       Section 4.3(d) of the Security Agreement. Section 4.3(d) of the Security Agreement is hereby amended and restated in its entirety to read as follows:

(d) Certificated Generator Units, Field Units, Vehicles and other Rolling Stock. Within 30 days (or such later date agreed to by the Administrative Agent) after (i) the First Amendment Effective Date with respect to each of the Generator Units, Field Units, vehicles or other rolling stock covered by a certificate of title set forth on Exhibit E hereto as of the First Amendment Effective Date or (ii) the date upon which any Grantor acquires a Generator Unit, a Field Unit, vehicle or other rolling stock covered by a certificate of title after the First Amendment Effective Date, the applicable Grantor will deliver to the Administrative Agent or its agent or other designee, the original certificate of title of any Generator Unit, Field Unit, vehicle or other rolling stock title certificate, and, in each case, provide and/or file all other documents or instruments necessary to have the Lien of the Administrative Agent noted on any such certificate or with the appropriate state office. Notwithstanding the foregoing, the Grantors shall not be required to deliver to the Administrative Agent the original certificates of title with respect to any vehicles and other rolling stock that are not included in the Borrowing Base with an aggregate net book value of $250,000.

2.4       Replacement of Exhibit A, Exhibit B and Exhibit C to the Security Agreement. Exhibit A, Exhibit B and Exhibit C attached to the Security Agreement are hereby replaced in their entirety with Exhibit A, Exhibit B and Exhibit C attached hereto as Annex II. Exhibit A, Exhibit B and Exhibit C attached hereto as Annex II shall be deemed to be attached as Exhibit A, Exhibit B and Exhibit C to the Security Agreement as of the First Amendment Effective Date.

SECTION 3.      Conditions Precedent to Amendment. This Amendment will be effective as of the First Amendment Effective Date on the condition that the following conditions precedent will have been satisfied:

3.1       Counterparts. The Administrative Agent shall have received counterparts of this Amendment duly executed by each of the Loan Parties, the Administrative Agent and each Lender.

3.2       Appraisal. The Administrative Agent shall have received such third-party appraisals of each Borrowers’ Inventory (including, without limitation, the Generator Units and Field Unit) as requested by the Administrative Agent, which third-party appraisals shall be in form and substance satisfactory to the Administrative Agent in its sole discretion.

3.3       Borrowing Base Report. The Administrative Agent shall have received an executed pro forma Borrowing Base Report prior to or on the First Amendment Effective Date with customary supporting schedules and documentation, which calculates the Borrowing Base as of a date specified by the Administrative Agent after giving effect to this Amendment.

3.4       Expenses. The Administrative Agent shall have received payment or reimbursement of its out-of-pocket expenses in connection with this Amendment and any other out-of-pocket expenses of the Administrative Agent required to be paid or reimbursed pursuant to the Credit Agreement, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent.

3.5       Other Documents. The Administrative Agent shall have been provided with such documents, instruments and agreements, and the Loan Parties shall have taken such actions, in each case as the Administrative Agent may reasonably require in connection with this Amendment and the transactions contemplated hereby.

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SECTION 4.      Representations and Warranties. Each Loan Party hereby represents and warrants to the Lenders the following:

4.1       the representations and warranties contained in the Credit Agreement, as amended hereby, and the other Loan Documents are true and correct in all material respects (without duplication of any materiality qualification applicable thereto) on and as of the date hereof as though made on and as of the date hereof, except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties were true and correct as of such earlier date, and except for any change of facts expressly permitted under the provisions of the Credit Agreement and the other Loan Documents;

4.2       no Default or Event of Default has occurred and is continuing as of the date hereof; and

4.3       this Amendment has been duly executed and delivered by such Loan Party, and the Credit Agreement, as amended hereby, constitutes a legal, valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

SECTION 5.      Survival of Representations and Warranties. All representations and warranties made in this Amendment, including any Loan Document furnished in connection with this Amendment, shall survive the execution and delivery of this Amendment and the other Loan Documents, and no investigation by the Administrative Agent or any closing shall affect the representations and warranties or the right of the Administrative Agent or any Lender to rely upon them.

SECTION 6.      Expenses. As provided in Section 11.1 of the Credit Agreement and subject to the limitations expressly set forth therein, the Borrowers hereby agree to pay on demand all legal and other fees, costs and expenses incurred by the Administrative Agent in connection with the negotiation, preparation, and execution of this Amendment and all related documents.

SECTION 7.      No Implied Waivers. No failure or delay on the part of the Administrative Agent or any Lender in exercising, and no course of dealing with respect to, any right, power or privilege under this Amendment, the Credit Agreement or any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege under this Amendment, the Credit Agreement or any other Loan Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

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SECTION 8.      Ratification and Affirmation of Loan Parties. Each of the Loan Parties hereby expressly (i) acknowledges the terms of this Amendment, (ii) ratifies and affirms its obligations under the Loan Documents to which it is a party, (iii) acknowledges, renews and extends its continued liability under the Loan Documents to which it is a party, and (iv) agrees, with respect to each Loan Party that is a Guarantor, that its guarantee under the Guaranty remains in full force and effect with respect to the Obligations as amended hereby. Any and all of the terms and provisions of the Credit Agreement and the other Loan Documents shall, except as amended hereby, remain in full force and effect. The Loan Parties hereby extend the Liens securing the Obligations until the Obligations have been paid in full, and agree that the amendments and waivers herein contained shall in no manner affect or impair the Obligations or the Liens securing payment and performance thereof, all of which are ratified and confirmed. .

SECTION 9.      Severability. Any provision of this Amendment that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

SECTION 10.   APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.

SECTION 11.  Successors and Assigns. This Amendment is binding upon and shall inure to the benefit of the Administrative Agent, the Lenders and the Loan Parties and their respective successors and assigns, except the Loan Parties may not assign or transfer any of their rights or obligations hereunder without the prior written consent of the Administrative Agent, other than as expressly permitted under the terms of the Credit Agreement.

SECTION 12.  Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original but all of which when taken together shall constitute but one and the same instrument. Delivery of an executed signature page of this Amendment by facsimile transmission or PDF electronic transmission shall be effective as delivery of a manually executed counterpart hereof.

SECTION 13.  Effect of Consent. No consent or waiver, express or implied, by the Administrative Agent to or for any breach of or deviation from any covenant, condition or duty by the Borrowers shall be deemed a consent or waiver to or of any other breach of the same or any other covenant, condition or duty.

SECTION 14.  Headings. The headings of this Amendment are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

SECTION 15.  Reaffirmation of Loan Documents. This Amendment shall be deemed to be an amendment to the Credit Agreement, and the Credit Agreement, as amended hereby, and the other Loan Documents are hereby ratified, approved and confirmed in each and every respect. All references to the Credit Agreement herein and in any other document, instrument, agreement or writing shall hereafter be deemed to refer to the Credit Agreement as amended hereby.

SECTION 16.  Loan Document. This Amendment constitutes a “Loan Document” under and as defined in the Credit Agreement.

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SECTION 17. Entire Agreement. THE CREDIT AGREEMENT, THIS AMENDMENT, THE OTHER LOAN DOCUMENTS, AND ALL OTHER INSTRUMENTS, DOCUMENTS AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS AMENDMENT REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES.

[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date set forth above.

BORROWERS:
FLEX LEASING POWER & SERVICE LLC,
a Delaware limited liability company
By:	/s/ Darin Romine
Name:	Darin Romine
Title:	Sr. Vice President of Finance

[signature page to first amendment to credit agreement

and first amendment to security agreement –

flex leasing power & service llc]

GUARANTORS:
FLEX POWER CO.,
a Delaware limited liability company
By:	/s/ Darin Romine
Name:	Darin Romine
Title:	Sr. Vice President of Finance

[signature page to first amendment to credit agreement

and first amendment to security agreement –

flex leasing power & service llc] 

ADMINISTRATIVE AGENT AND LENDER:
TEXAS CAPITAL BANK, NATIONAL
ASSOCIATION
By:	/s/ Chad Ramsey
Name:	Chad Ramsey
Title:	Senior Vice President

[signature page to first amendment to credit agreement

and first amendment to security agreement –

flex leasing power & service llc]

EX-10.23

Exhibit 10.23

SECOND AMENDMENT TO CREDIT AGREEMENT

This SECOND AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is made and entered into on August 28, 2020 (the “Second Amendment Effective Date”), by and among FLEX LEASING POWER & SERVICE LLC, a Delaware limited liability company (the “Company”), the other Borrowers and Loan Parties party hereto, TEXAS CAPITAL BANK, NATIONAL ASSOCIATION, in its capacity as Administrative Agent (the “Administrative Agent”), and the Lenders (as defined below) party hereto.

RECITALS:

WHEREAS, the Loan Parties are party to that certain Credit Agreement dated as of February 8, 2019 (as amended, restated, supplemented or otherwise modified, the “Credit Agreement”), by and among the Company, the other Borrowers from time to time party thereto, the other Loan Parties from time to time party thereto, the financial institutions from time to time party thereto as lenders (the “Lenders”) and the Administrative Agent. Capitalized terms used but not defined herein have the meaning set forth in the Credit Agreement, as amended hereby.

WHEREAS, the Company, the other Borrowers, the other Loan Parties, the Administrative Agent and the Lenders desire to amend the Credit Agreement as provided herein upon the terms and conditions set forth herein.

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

SECTION 1.     Amendments to the Credit Agreement. In reliance upon the representations, warranties, covenants and conditions contained in this Amendment, and subject to the terms, and satisfaction of the conditions precedent set forth in Section 3 hereof, the Credit Agreement is hereby amended as of the Second Amendment Effective Date in the manner provided in this Section 1.

1.1       Additional Definition. Section 1.1 of the Credit Agreement is hereby amended to add thereto in alphabetical order the following definition which shall read in full as follows:

“Second Amendment” means that certain Second Amendment to Credit Agreement dated as of August 28, 2020, by and among the Company, the other Borrowers and the other Loan Parties party thereto, the Administrative Agent and the Lenders party thereto.

1.2       Restated Definitions. The definitions of the following terms contained in Section 1.1 of the Credit Agreement are hereby amended and restated in their respective entireties to read as follows:

“Borrowing Base” means, as of any date, an amount equal to the sum of, without duplication:

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(a)       eighty-five percent (85%) of the Borrowers’ Eligible Accounts, plus

(b)       fifty percent (50%) of the Borrowers’ Eligible Inventory, valued at the lower of cost or market value, determined on a weighted average cost basis; provided, that the maximum amount of Eligible Inventory of the Borrowers that may be included in the Borrowing Base pursuant to this clause (b) after giving effect to the advance rate set forth herein shall not exceed $3,000,000, plus

(c)       the lesser of (i) the product of eighty percent (80%) of the Net Orderly Liquidation Value of the Borrowers’ Eligible Generator Units as determined pursuant to the most recent generator appraisal ordered, received and relied upon by Administrative Agent pursuant to Section 6.6(c) and (ii) ninety-five percent (95%) of the net book value of the Borrowers’ Eligible Generator Units; provided that (A) the value of Eligible Generator Units included in the Borrowing Base pursuant to clause (c)(i) after giving effect to the advance rate set forth herein shall be reduced, on the first day of each calendar month following the Closing Date, based on a 7-year straight line amortization schedule until Administrative Agent receives a new appraisal at which time the Net Orderly Liquidation Value will reset, and (B) the value of Eligible Generator Units included in the Borrowing Base pursuant to this clause (c) after giving effect to the advance rate set forth herein shall be reduced, on the date any item of Eligible Generator Units ceases to be Eligible Generator Units for any reason (including as a result of any sale, transfer or other disposition thereof or any casualty or condemnation event with respect thereto), by the amount then included in the Borrowing Base with respect to such item of Eligible Generator Units, plus

(d)       the lesser of (i) the product of eighty percent (80%) of the Net Orderly Liquidation Value of the Borrowers’ Eligible Field Units as determined pursuant to the most recent field unit appraisal ordered, received and relied upon by Administrative Agent pursuant to Section 6.6(c) and (ii) ninety-five percent (95%) of the net book value of the Borrowers’ Eligible Field Units; provided that (A) the value of Eligible Field Units included in the Borrowing Base pursuant to clause (d)(i) after giving effect to the advance rate set forth herein shall be reduced, on the first day of each calendar month following the First Amendment Effective Date, based on a 5-year straight line amortization schedule until Administrative Agent receives a new appraisal at which time the Net Orderly Liquidation Value will reset, and (B) the value of Eligible Field Units included in the Borrowing Base pursuant to this clause (d) after giving effect to the advance rate set forth herein shall be reduced, on the date any item of Eligible Field Units ceases to be Eligible Field Units for any reason (including as a result of any sale, transfer or other disposition thereof or any casualty or condemnation event with respect thereto), by the amount then included in the Borrowing Base with respect to such item of Eligible Field Units, plus

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(e)       eighty percent (80%) of the Net Invoice Cost of the Borrowers’ Eligible New Generator Units, minus

(f)       any Availability Reserves established by Administrative Agent in its Permitted Discretion.

“Commitment Fee Rate” means, with respect to the commitment fees payable hereunder, the applicable percentages per annum set forth below under the caption “Commitment Fee Rate” as determined based on the daily average unused amount of the Commitments during any fiscal month in accordance with Section 2.4(c):

Pricing
Level	Daily Average Unused Amount	Commitment Fee Rate
1	≤ 50% of the Commitments		0.225	%
2	> 50% of the Commitments		0.475	%

“Loan Documents” means this Agreement, the First Amendment, the Second Amendment, each Guaranty, the Security Documents, the Notes, the Issuer Documents, and all other promissory notes, security agreements, deeds of trust, assignments, letters of credit, guaranties, and other instruments, documents, or agreements executed and delivered pursuant to or in connection with this Agreement or the Security Documents; provided that the term “Loan Documents” shall not include any Bank Product Agreement.

1.3       Replacement of Exhibit B to the Credit Agreement. Exhibit B attached to the Credit Agreement is hereby replaced in its entirety with Exhibit B attached hereto as Annex I. Exhibit B attached hereto as Annex I shall be deemed to be attached as Exhibit B to the Credit Agreement as of the Second Amendment Effective Date.

SECTION 2.        Conditions Precedent to Amendment. This Amendment will be effective as of the Second Amendment Effective Date on the condition that the following conditions precedent will have been satisfied:

2.1       Counterparts. The Administrative Agent shall have received counterparts of this Amendment duly executed by each of the Loan Parties, the Administrative Agent and each Lender.

2.2       Borrowing Base Report. The Administrative Agent shall have received an executed pro forma Borrowing Base Report prior to or on the Second Amendment Effective Date with customary supporting schedules and documentation, which calculates the Borrowing Base, as amended hereby, as of a date specified by the Administrative Agent.

2.3       Expenses. The Administrative Agent shall have received payment or reimbursement of its out-of-pocket expenses in connection with this Amendment and any other out-of-pocket expenses of the Administrative Agent required to be paid or reimbursed pursuant to the Credit Agreement, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent.

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2.4       Other Documents. The Administrative Agent shall have been provided with such documents, instruments and agreements, and the Loan Parties shall have taken such actions, in each case as the Administrative Agent may reasonably require in connection with this Amendment and the transactions contemplated hereby.

SECTION 3.      Representations and Warranties. Each Loan Party hereby represents and warrants to the Lenders the following:

3.1       Representations and Warranties. The representations and warranties contained in the Credit Agreement, as amended hereby, and the other Loan Documents are true and correct in all material respects (without duplication of any materiality qualification applicable thereto) on and as of the date hereof as though made on and as of the date hereof, except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties were true and correct in all material respects as of such earlier date, and except for any change of facts expressly permitted under the provisions of the Credit Agreement and the other Loan Documents.

3.2       No Default. No Default or Event of Default has occurred and is continuing as of the date hereof.

3.3       Enforceability. This Amendment has been duly executed and delivered by such Loan Party, and the Credit Agreement, as amended hereby, constitutes a legal, valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

SECTION 4.      Survival of Representations and Warranties. All representations and warranties made in this Amendment, including any Loan Document furnished in connection with this Amendment, shall survive the execution and delivery of this Amendment and the other Loan Documents, and no investigation by the Administrative Agent or any closing shall affect the representations and warranties or the right of the Administrative Agent or any Lender to rely upon them.

SECTION 5.      Expenses. As provided in Section 11.1 of the Credit Agreement and subject to the limitations expressly set forth therein, the Borrowers hereby agree to pay on demand all legal and other fees, costs and expenses incurred by the Administrative Agent in connection with the negotiation, preparation, and execution of this Amendment and all related documents.

SECTION 6.      No Implied Waivers. No failure or delay on the part of the Administrative Agent or any Lender in exercising, and no course of dealing with respect to, any right, power or privilege under this Amendment, the Credit Agreement or any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege under this Amendment, the Credit Agreement or any other Loan Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

4

SECTION 7.     Ratification and Affirmation of Loan Parties. Each of the Loan Parties hereby expressly (a) acknowledges the terms of this Amendment, (b) ratifies and affirms its obligations under the Loan Documents to which it is a party, (c) acknowledges, renews and extends its continued liability under the Loan Documents to which it is a party, and (d) agrees, with respect to each Loan Party that is a Guarantor, that its guarantee under the Guaranty remains in full force and effect with respect to the Obligations as amended hereby. Any and all of the terms and provisions of the Credit Agreement and the other Loan Documents shall, except as amended hereby, remain in full force and effect. The Loan Parties hereby extend the Liens securing the Obligations until the Obligations have been paid in full, and agree that the amendments and waivers herein contained shall in no manner affect or impair the Obligations or the Liens securing payment and performance thereof, all of which are ratified and confirmed.

SECTION 8.     Severability. Any provision of this Amendment that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

SECTION 9.     APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.

SECTION 10.     Successors and Assigns. This Amendment is binding upon and shall inure to the benefit of the Administrative Agent, the Lenders and the Loan Parties and their respective successors and assigns, except the Loan Parties may not assign or transfer any of their rights or obligations hereunder without the prior written consent of the Administrative Agent, other than as expressly permitted under the terms of the Credit Agreement.

SECTION 11.     Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original but all of which when taken together shall constitute but one and the same instrument. Delivery of an executed signature page of this Amendment by facsimile transmission or PDF electronic transmission shall be effective as delivery of a manually executed counterpart hereof.

SECTION 12.     Effect of Consent. No consent or waiver, express or implied, by the Administrative Agent to or for any breach of or deviation from any covenant, condition or duty by the Borrowers shall be deemed a consent or waiver to or of any other breach of the same or any other covenant, condition or duty.

SECTION 13.     Headings. The headings of this Amendment are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

SECTION 14.     Reaffirmation of Loan Documents. This Amendment shall be deemed to be an amendment to the Credit Agreement, and the Credit Agreement, as amended hereby, and the other Loan Documents are hereby ratified, approved and confirmed in each and every respect. All references to the Credit Agreement herein and in any other document, instrument, agreement or writing shall hereafter be deemed to refer to the Credit Agreement as amended hereby.

5

SECTION 15.     Loan Document. This Amendment constitutes a “Loan Document” under and as defined in the Credit Agreement.

SECTION 16.     Entire Agreement. THE CREDIT AGREEMENT, THIS AMENDMENT, THE OTHER LOAN DOCUMENTS, AND ALL OTHER INSTRUMENTS, DOCUMENTS AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS AMENDMENT REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES.

[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]

6

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date set forth above.

BORROWERS:
FLEX LEASING POWER & SERVICE LLC,
a Delaware limited liability company
By:	/s/ DARIN ROMINE
Name:	DARIN ROMINE
Title:	SVP

[SIGNATURE PAGE TO SECOND AMENDMENT TO CREDIT AGREEMENT – FLEX LEASING POWER & SERVICE LLC]

GUARANTORS:
FLEX POWER CO.,
a Delaware limited liability company
By:	/s/ DARIN ROMINE
Name:	DARIN ROMINE
Title:	SVP

[SIGNATURE PAGE TO SECOND AMENDMENT TO CREDIT AGREEMENT – FLEX LEASING POWER & SERVICE LLC]

ADMINISTRATIVE AGENT AND LENDER:
TEXAS CAPITAL BANK, NATIONAL
ASSOCIATION
By:	/s/ Jerra Hayden
Name:	Jerra Hayden
Title:	Senior Vice President

[SIGNATURE PAGE TO SECOND AMENDMENT TO CREDIT AGREEMENT – FLEX LEASING POWER & SERVICE LLC]

EX-10.24

Exhibit 10.24

THIRD AMENDMENT TO CREDIT AGREEMENT

This THIRD AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is made and entered into on December 22, 2020 (the “Third Amendment Effective Date”), by and among FLEX LEASING POWER & SERVICE LLC, a Delaware limited liability company (the “Company”), the other Borrowers and Loan Parties party hereto, TEXAS CAPITAL BANK, NATIONAL ASSOCIATION, in its capacity as Administrative Agent (the “Administrative Agent”), and the Lenders (as defined below) party hereto.

RECITALS:

WHEREAS, the Loan Parties are party to that certain Credit Agreement dated as of February 8, 2019 (as amended, restated, supplemented or otherwise modified, the “Credit Agreement”), by and among the Company, the other Borrowers from time to time party thereto, the other Loan Parties from time to time party thereto, the financial institutions from time to time party thereto as lenders (the “Lenders”) and the Administrative Agent. Capitalized terms used but not defined herein have the meaning set forth in the Credit Agreement, as amended hereby.

WHEREAS, the Company, the other Borrowers, the other Loan Parties, the Administrative Agent and the Lenders desire to amend the Credit Agreement as provided herein upon the terms and conditions set forth herein, including with respect to allowing Flex Leasing Power and Service ULC, an Alberta unlimited liability corporation (the “Canadian Borrower”) to be a “Borrower” under the Credit Agreement.

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

SECTION 1.      Amendments to the Credit Agreement. In reliance upon the representations, warranties, covenants and conditions contained in this Amendment, and subject to the terms, and satisfaction of the conditions precedent set forth in Section 4 hereof, the Credit Agreement (other than the signature pages, Exhibits and Schedules thereto except as expressly set forth in Section 2 and Section 3 below) is hereby amended in its entirety to read as set forth in the attached Annex A.

SECTION 2.     Replacement of Exhibit B to the Credit Agreement. In reliance upon the representations, warranties, covenants and conditions contained in this Amendment, and subject to the terms, and satisfaction of the conditions precedent set forth in Section 4 hereof, Exhibit B attached to the Credit Agreement is hereby replaced in its entirety with Exhibit B attached hereto as Annex B. Exhibit B attached hereto as Annex B shall be deemed to be attached as Exhibit B to the Credit Agreement as of the Third Amendment Effective Date.

SECTION 3.      Replacement of Schedule 5.13 to the Credit Agreement. In reliance upon the representations, warranties, covenants and conditions contained in this Amendment, and subject to the terms, and satisfaction of the conditions precedent set forth in Section 4 hereof, Schedule 5.13 attached to the Credit Agreement is hereby replaced in its entirety with Schedule 5.13 attached hereto as Annex C. Schedule 5.13 attached hereto as Annex C shall be deemed to be attached as Schedule 5.13 to the Credit Agreement as of the Third Amendment Effective Date.

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SECTION 4.      Conditions Precedent to Amendment. This Amendment will be effective as of the Third Amendment Effective Date on the condition that the following conditions precedent will have been satisfied:

4.1Counterparts. The Administrative Agent shall have received counterparts of this Amendment duly executed by each of the Loan Parties, the Administrative Agent and each Lender.

4.2Joinder Agreement. The Administrative Agent shall have received a Joinder Agreement in form and substance reasonably satisfactory to the Administrative Agent, duly executed by the Canadian Borrower.

4.3Joinder and Amendment to Intercreditor Agreement. The Administrative Agent shall have received a joinder and amendment to the Intercreditor Agreement in form and substance reasonably satisfactory to the Administrative Agent, duly executed by the Administrative Agent, the Subordinated Lenders, the Canadian Borrower and the other parties thereto.

4.4Canadian Security Agreement. The Administrative Agent shall have received (a) the Canadian Security Agreement in form and substance reasonably satisfactory to the Administrative Agent, duly executed by the Administrative Agent and the Canadian Borrower and (b) evidence reasonably satisfactory to the Administrative Agent of all UCC or PPSA filings or recordations necessary to perfect its Lien in the Collateral of the Canadian Borrower and the Equity Interests in the Canadian Borrower.

4.5Perfection Certificate. The Administrative Agent shall have received a Perfecting Certificate with respect to the Canadian Borrower in form and substance reasonably satisfactory to the Administrative Agent, duly executed by the Canadian Borrower.

4.6Note. The Administrative Agent shall have received an amended and restated Note by the Borrowers in favor of Texas Capital Bank, in form and substance reasonably satisfactory to the Administrative Agent, duly executed by the Borrowers.

4.7Stock Certificate and Stock Power. The Administrative Agent shall have received (i) Certificate No. 3AC issued to Flex Power Co. evidencing 35 shares of Class A Common Shares of the Canadian Borrower and (ii) an undated stock power executed in blank by a Responsible Officer of Flex Power Co. with respect to such stock certificate.

4.8Legal Opinion. The Administrative Agent shall have received an opinion of Bennett Jones LLP, Canadian counsel to the Canadian Borrower, in form and substance reasonably satisfactory to the Administrative Agent.

4.9Insurance. The Administrative Agent shall have received copies of insurance certificates describing all insurance policies of the Canadian Borrower required by Section 6.5 of the Credit Agreement, together with lender loss payable and additional insured endorsements in favor of Administrative Agent with respect to all insurance policies covering the Collateral of the Canadian Borrower.

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4.10Officer’s Certificate. The Administrative Agent shall have received a certificate of a Responsible Officer of the Canadian Borrower attaching and/or setting forth (a) resolutions of the directors of the Canadian Borrower with respect to the authorization of the Canadian Borrower to execute and deliver this Amendment and the other Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (b) the officers of the Canadian Borrower who are authorized to sign the Loan Documents to which the Canadian Borrower is a party and who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with the Credit Agreement and the other Loan Documents, as amended hereby, and the transactions contemplated thereby, (c) specimen signatures of each such authorized officer, and (d) the articles, by-laws or other applicable organizational documents of the Canadian Borrower, certified as being true and complete.

4.11Certificate of Status. The Administrative Agent shall have received certificates of the appropriate government officials of the province of incorporation or organization of the Canadian Borrower as to the existence and good standing of the Canadian Borrower dated as of a recent date hereof.

4.12Lien Searches. The Administrative Agent shall have received the results of PPSA, UCC, tax lien and judgment lien searches showing all financing statements and other documents or instruments on file against the Canadian Borrower in the appropriate filing offices, reflecting no Liens against any of the Collateral of the Canadian Borrower, other than Permitted Liens.

4.13KYC Requirements. The Administrative Agent and each of the Lenders shall have received from the Canadian Borrower, to the extent requested by the Administrative Agent or such Lender at least three (3) Business Days prior to the Third Amendment Effective Date, all documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the Patriot Act.

4.14Borrowing Base Report. The Administrative Agent shall have received an executed pro forma Borrowing Base Report (including, without limitation, a Canadian Priority Payables report in substantially the form attached thereto) prior to or on the Third Amendment Effective Date with customary supporting schedules and documentation, which calculates the Borrowing Base, as amended hereby, as of a date specified by the Administrative Agent.

4.15Expenses. The Administrative Agent shall have received payment or reimbursement of its out-of-pocket expenses in connection with this Amendment and any other out-of-pocket expenses of the Administrative Agent required to be paid or reimbursed pursuant to the Credit Agreement, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent.

4.16Other Documents. The Administrative Agent shall have been provided with such documents, instruments and agreements, and the Loan Parties shall have taken such actions, in each case as the Administrative Agent may reasonably require in connection with this Amendment and the transactions contemplated hereby.

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SECTION 5.      Post-Closing Requirement – Control Agreement. No later than thirty (30) days after the Third Amendment Effective Date (or such later date as agreed to by the Administrative Agent in its sole discretion), the Company shall have delivered to the Administrative Agent a Control Agreement with respect to the Canadian Borrower’s deposit account no. 00009-138-174-8 held with Royal Bank of Canada, as depository bank, in form and substance reasonably satisfactory to the Administrative Agent, duly executed by the Administrative Agent, the Canadian Borrower and Royal Bank of Canada.

Notwithstanding anything to the contrary in Section 9.1 of the Credit Agreement, the Company’s failure to comply with this Section 5 on or before the date specified in this Section 5 shall constitute an immediate Event of Default.

SECTION 6.      Representations and Warranties. Each Loan Party hereby represents and warrants to the Lenders the following:

6.1Representations and Warranties. The representations and warranties contained in the Credit Agreement, as amended hereby, and the other Loan Documents are true and correct in all material respects (without duplication of any materiality qualification applicable thereto) on and as of the date hereof as though made on and as of the date hereof, except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties were true and correct in all material respects as of such earlier date, and except for any change of facts expressly permitted under the provisions of the Credit Agreement and the other Loan Documents.

6.2No Default. No Default or Event of Default has occurred and is continuing as of the date hereof.

6.3Enforceability. This Amendment has been duly executed and delivered by such Loan Party, and the Credit Agreement, as amended hereby, constitutes a legal, valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

SECTION 7.      Survival of Representations and Warranties. All representations and warranties made in this Amendment, including any Loan Document furnished in connection with this Amendment, shall survive the execution and delivery of this Amendment and the other Loan Documents, and no investigation by the Administrative Agent or any closing shall affect the representations and warranties or the right of the Administrative Agent or any Lender to rely upon them.

SECTION 8.       Expenses. As provided in Section 11.1 of the Credit Agreement and subject to the limitations expressly set forth therein, the Borrowers hereby agree to pay on demand all legal and other fees, costs and expenses incurred by the Administrative Agent in connection with the negotiation, preparation, and execution of this Amendment and all related documents.

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SECTION 9.      No Implied Waivers. No failure or delay on the part of the Administrative Agent or any Lender in exercising, and no course of dealing with respect to, any right, power or privilege under this Amendment, the Credit Agreement or any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege under this Amendment, the Credit Agreement or any other Loan Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

SECTION 10.    Ratification and Affirmation of Loan Parties. Each of the Loan Parties hereby expressly (a) acknowledges the terms of this Amendment, (b) ratifies and affirms its obligations under the Loan Documents to which it is a party, (c) acknowledges, renews and extends its continued liability under the Loan Documents to which it is a party, and (d) agrees, with respect to each Loan Party that is a Guarantor, that its guarantee under the Guaranty remains in full force and effect with respect to the Obligations as amended hereby. Any and all of the terms and provisions of the Credit Agreement and the other Loan Documents shall, except as amended hereby, remain in full force and effect. The Loan Parties hereby extend the Liens securing the Obligations until the Obligations have been paid in full, and agree that the amendments and waivers herein contained shall in no manner affect or impair the Obligations or the Liens securing payment and performance thereof, all of which are ratified and confirmed.

SECTION 11. Severability. Any provision of this Amendment that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

SECTION 12. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.

SECTION 13. Successors and Assigns. This Amendment is binding upon and shall inure to the benefit of the Administrative Agent, the Lenders and the Loan Parties and their respective successors and assigns, except the Loan Parties may not assign or transfer any of their rights or obligations hereunder without the prior written consent of the Administrative Agent, other than as expressly permitted under the terms of the Credit Agreement.

SECTION 14.   Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original but all of which when taken together shall constitute but one and the same instrument. Delivery of an executed signature page of this Amendment by facsimile transmission or PDF electronic transmission shall be effective as delivery of a manually executed counterpart hereof.

SECTION 15. Effect of Consent. No consent or waiver, express or implied, by the Administrative Agent to or for any breach of or deviation from any covenant, condition or duty by the Borrowers shall be deemed a consent or waiver to or of any other breach of the same or any other covenant, condition or duty.

SECTION 16. Headings. The headings of this Amendment are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

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SECTION 17. Reaffirmation of Loan Documents. This Amendment shall be deemed to be an amendment to the Credit Agreement, and the Credit Agreement, as amended hereby, and the other Loan Documents are hereby ratified, approved and confirmed in each and every respect. All references to the Credit Agreement herein and in any other document, instrument, agreement or writing shall hereafter be deemed to refer to the Credit Agreement as amended hereby.

SECTION 18. Loan Document. This Amendment constitutes a “Loan Document” under and as defined in the Credit Agreement.

SECTION 19.   Entire Agreement. THE CREDIT AGREEMENT, THIS AMENDMENT, THE OTHER LOAN DOCUMENTS, AND ALL OTHER INSTRUMENTS, DOCUMENTS AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS AMENDMENT REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES.

[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date set forth above.

BORROWERS:
FLEX LEASING POWER & SERVICE LLC,
a Delaware limited liability company
By:	/s/ Darin Romine
Name:	Darin Romine
Title:	Senior Vice President
FLEX LEASING POWER AND SERVICE ULC,
an Alberta unlimited liability corporation
By:	/s/ Darin Romine
Name:	Darin Romine
Title:	Senior Vice President

[Signature Page to Third Amendment To Credit Agreement – Flex Leasing Power & Service LLC]

GUARANTORS:
FLEX POWER CO.,
a Delaware limited liability company
By:	/s/ Darin Romine
Name:	Darin Romine
Title:	Senior Vice President

[Signature Page to Third Amendment To Credit Agreement – Flex Leasing Power & Service LLC]

ADMINISTRATIVE AGENT AND LENDER:
TEXAS CAPITAL BANK, NATIONAL ASSOCIATION
By:	/s/ Jerra Hayden
Name:	Jerra Hayden
Title:	Senior Vice President

[Signature Page to Third Amendment To Credit Agreement – Flex Leasing Power & Service LLC]

EX-10.25

Exhibit 10.25

TEXAS CAPITAL BANK

Texas Capital Bank, National Association

2000 McKinney Avenue, Suite 700

Dallas, Texas 75201

February 12, 2021

c/o Flex Leasing Power & Service LLC

6400 S. Fiddlers Green Circle

Suite 900

Greenwood Village, Colorado 80111

Attention: Doug Baltzer

Re:       Letter Agreement Regarding Limited Waiver of Leverage Ratio Financial Covenant

Ladies and Gentlemen:

Reference is hereby made to that certain Credit Agreement, dated as of February 8, 2019 (as amended, supplemented or otherwise modified prior to the date hereof, the “Credit Agreement”), by and among Flex Leasing Power & Service LLC, a Delaware limited liability company (the “Company”), the other Loan Parties (as defined in the Credit Agreement) from time to time party thereto, the financial institutions from time to time party thereto as lenders (the “Lenders”) and Texas Capital Bank, National Association, as administrative agent (in such capacity, the “Administrative Agent”). Capitalized terms used herein without definition shall have the meanings given to them in the Credit Agreement.

1.       Company Request. The Company has advised the Administrative Agent and the Lenders that (a) as of the last day of the fiscal quarter ending December 31, 2020 (the “Specified Test Date”), the Company’s Leverage Ratio was greater than 3.50 to 1.00 in contravention of Section 8.2 of the Credit Agreement, and (b) such non-compliance constitutes an Event of Default under Section 9.1(b) of the Credit Agreement (the “Specified Event of Default”). The Company has requested that the Lenders enter into this letter agreement (this “Letter Agreement”) to waive the Specified Event of Default on the terms and conditions set forth herein.

2.       Limited Waiver. In reliance on the representations, warranties, covenants and agreements contained in this Letter Agreement, the receipt and sufficiency of which are hereby acknowledged and confessed, and subject to the satisfaction of the conditions precedent in Section 5 hereof, the Lenders hereby waive the Specified Event of Default solely with respect to the Specified Test Date. The Loan Parties hereby acknowledge that nothing contained herein, nor any past indulgence by the Administrative Agent or any Lender nor any other action or inaction on behalf of the Administrative Agent or any Lender, shall constitute or be deemed to constitute a consent to, or waiver of, any other action or inaction of the Company or any other Loan Party which constitutes (or would constitute) a violation of any provision of the Credit Agreement, the Subordination Agreement or any other Loan Document, or which results (or would result) in a material breach, Default or Event of Default under the Credit Agreement or any other Loan Document, nor shall this Letter Agreement constitute a course of conduct or dealing among the parties. The Administrative Agent and the Lenders shall have no obligation to grant any future waivers, consents or amendments with respect to the Credit Agreement or any other Loan Document. The parties hereto agree that the limited waiver provided herein shall constitute a one-time waiver and shall not waive, affect or diminish any right of the Administrative Agent and the Lenders to hereafter demand strict compliance with the Credit Agreement and the other Loan Documents.

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3.       Amendments to the Credit Agreement. In reliance on the representations, warranties, covenants and agreements contained in this Letter Agreement, the receipt and sufficiency of which are hereby acknowledged and confessed, and subject to the satisfaction of the conditions precedent in Section 5 hereof, the Credit Agreement is hereby amended as of the date hereof in the manner provided in this Section 3.

(a)       Additional Definitions. Section 1.1 of the Credit Agreement is hereby amended to add thereto in alphabetical order the following definitions which shall read in full as follows:

“Availability Limitation” means an amount equal to (a) at any time during the Availability Limitation Period, $1,500,000 and (b) at any time after the expiration of the Availability Limitation Period, $0.00.

“Availability Limitation Period” means the period from February 12, 2021 until the Leverage Ratio as of the last day of any fiscal quarter thereafter is less than 3.50 to 1.00 as evidenced by a Compliance Certificate setting forth the information and certifying as to the matters set forth in Section 6.1(d) of the Credit Agreement and demonstrating compliance with the covenants set forth in Article 8 of the Credit Agreement (with reasonably detailed calculations demonstrating compliance thereof). Upon the expiration of the Availability Limitation Period, the Administrative Agent shall promptly deliver written notice thereof to the Company and the Lenders.

(b)       Restated Definition. The definition of “Availability” contained in Section 1.1 of the Credit Agreement is hereby amended and restated in its entirety to read in full as follows:

“Availability” means, as of any date, the difference between (a) an amount equal to the lesser of (i) the Borrowing Base in effect on such date and (ii) the aggregate amount of the Commitments of the Lenders on such date less (b) the total Revolving Credit Exposure of the Lenders on such date less (c) the Availability Limitation.

(c)       Amendment to Section 2.1(a) of the Credit Agreement. Section 2.1(a) of the Credit Agreement is hereby amended by amending and restating the proviso contained in the first sentence of such section to read in full as follows:

provided that the Revolving Credit Exposure of all Lenders shall not exceed the lesser of (i) the aggregate amount of the Commitments of the Lenders minus the Availability Limitation and (ii) the Borrowing Base minus the Availability Limitation.

(d)       Amendment to Section 2.2(a)(i) of the Credit Agreement. Section 2.2(a)(i) of the Credit Agreement is hereby amended by amending and restating clause (x) therein to read in full as follows:

(x) the Revolving Credit Exposure of all Lenders shall not exceed the lesser of (I) the aggregate amount of the Commitments of the Lenders minus the Availability Limitation and (II) the Borrowing Base minus the Availability Limitation, in each case in effect at such time,

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(e)       Amendment to Section 2.3(a) of the Credit Agreement. Section 2.3(a) of the Credit Agreement is hereby amended by amending and restating clause (i)(A) therein to read in full as follows:

(A) the Revolving Credit Exposure of all Lenders shall not exceed the lesser of (x) the aggregate amount of the Commitments of the Lenders minus the Availability Limitation and (y) the Borrowing Base minus the Availability Limitation, in each case in effect at such time,

(f)       Amendment to Section 2.9(a) of the Credit Agreement. Section 2.9(a) of the Credit Agreement is hereby amended by amending and restating clause (iii)(A) therein to read in full as follows:

(A)       immediately after giving effect thereto and to any concurrent prepayments hereunder, the Revolving Credit Exposure of all Lenders would exceed the lesser of (x) the aggregate amount of the Commitments of the Lenders minus the Availability Limitation and (y) the Borrowing Base minus the Availability Limitation, in each case in effect at such time or

(g)       Amendment to Section 2.9(c) of the Credit Agreement. Section 2.9(c) of the Credit Agreement is hereby amended by amending and restating clause (i) therein to read in full as follows:

(i)       If at any time the Revolving Credit Exposure of the Lenders exceeds the lesser of (A) the aggregate amount of the Commitments of the Lenders minus the Availability Limitation and (B) the Borrowing Base minus the Availability Limitation, in each case in effect at such time, then Borrowers shall immediately prepay the entire amount of such excess to Administrative Agent, for the ratable account of Lenders, and/or Cash Collateralize the L/C Obligations in an aggregate amount equal to such excess; provided, however, that no Borrower shall be required to Cash Collateralize the L/C Obligations pursuant to this Section 2.9(c) unless after the prepayment in full of the Revolving Credit Loans and Swing Line Loans the Revolving Credit Exposure of the Lenders exceeds the lesser of (x) the aggregate amount of the Commitments of the Lenders minus the Availability Limitation and (y) the Borrowing Base minus the Availability Limitation, in each case in effect at such time.

(h)       Amendment to Section 4.2(e) of the Credit Agreement. Section 4.2(e) of the Credit Agreement is hereby amended and restated in its entirety to read in full as follows:

(e)       Availability Under Revolving Credit Facility. With respect to any request for a Credit Extension under the Commitments, immediately after giving effect to the Credit Extension so requested, the total Revolving Credit Exposure of the Lenders shall not exceed the lesser of (i) the Borrowing Base in effect as of the date of such Credit Extension minus the Availability Limitation and (ii) the aggregate Commitments of the Lenders in effect as of the date of such Credit Extension minus the Availability Limitation.

4.       Equity Cure. In reliance on the representations, warranties, covenants and agreements contained in this Letter Agreement, the receipt and sufficiency of which are hereby acknowledged and confessed, and subject to the satisfaction of the conditions precedent in Section 5 hereof, notwithstanding anything to the contrary in Section 9.3 of the Credit Agreement or the definition of Specified EBITDA Equity Contribution, the parties hereto agree that (a) the Limited Waiver Contribution (as defined below) shall be deemed to constitute a “Specified EBITDA Equity Contribution” and the exercise of a “Cure Right” for purposes of Section 9.3 of the Credit Agreement, (b) Annualized EBITDA and EBITDA shall be deemed increased by $1,500,000 for the fiscal quarter ending December 31, 2020 and any four fiscal quarter period containing such fiscal quarter solely for the purpose of measuring compliance with Sections 8.1 and 8.2 of the Credit Agreement and not for any other purpose under the Credit Agreement (it being understood that, with respect to the calculation of Annualized EBITDA, $1,500,000 will be added after the amount of EBITDA set forth in clause (a) of the definition of Annualized EBITDA has been annualized for any applicable fiscal quarter) and (c) the mandatory prepayment of the Loans made pursuant to Section 2.9(c)(ii) of the Credit Agreement and Section 5(b)(ii) hereof with respect to any cash proceeds of the Limited Waiver Contribution shall not serve as a reduction to Debt for purposes of calculating the Leverage Ratio for the four fiscal quarter period ending December 31, 2020.

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5.       Conditions Precedent. The effectiveness of this Letter Agreement is subject to the following:

(a)       Counterparts. The Administrative Agent shall have received executed counterparts of this Letter Agreement from each Loan Party and the Lenders.

(b)       Contribution; Prepayments. The Administrative Agent shall have received evidence satisfactory to it that (i) the Company shall have received cash proceeds from Parent in an amount equal to at least $1,500,000 (the “Limited Waiver Contribution”) and (ii) the Company shall have prepaid the Loans in an aggregate principal amount equal to $1,500,000 plus accrued interest thereon. The prepayment herein shall be applied in the same manner as set forth in the last paragraph of Section 2.9(c) of the Credit Agreement.

(c)       Waiver Fee. The Administrative Agent shall have received a non-refundable waiver fee in an amount equal to $22,500.

(d)       Parent Loan Notes. The Administrative Agent shall have received executed counterparts to the Parent Loan Notes evidencing the Parent Loan owing by Parent to the Subordinated Lenders in the aggregate principal amount of $1,500,000, which Parent Loan Notes shall be in form and substance satisfactory to the Administrative Agent and the proceeds thereof shall be contributed to the Company pursuant to clause (b) above.

6.       Representations and Warranties; Ratifications and Affirmations of the Loan Parties. To induce the Lenders and the Administrative Agent to enter into this Letter Agreement, each Loan Party hereby represents and warrants to the Lenders and the Administrative Agent as follows:

(a)       after giving effect to this Letter Agreement, each representation and warranty of such Loan Party contained in the Credit Agreement, the Subordination Agreement and the other Loan Documents is true and correct in all material respects on and as of the date hereof, except (i) to the extent any such representations and warranties are expressly limited to an earlier date, in which case, on and as of the date hereof, such representations and warranties shall continue to be true and correct in all material respects as of such specified earlier date, and (ii) to the extent that any such representation and warranty is expressly qualified by materiality or by reference to a Material Adverse Effect, such representation and warranty (as so qualified) shall continue to be true and correct in all respects; and

(b)       after giving effect to this Letter Agreement, no Default or Event of Default exists.

Each Loan Party hereby expressly (x) ratifies and affirms its obligations under the Credit Agreement and the other Loan Documents to which it is a party and (y) acknowledges the validity, enforceability and binding effect against such Loan Party of the Credit Agreement and each other Loan Document to which such Loan Party is a party.

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7.       Release of Claims. The Company and each other Loan Party hereby forever releases, discharges and acquits the Administrative Agent, the L/C Issuer, the Swing Line Lender and the Lenders, their respective officers, directors, agents and employees and their respective affiliates, successors, assigns, shareholders and controlling persons, from any and all obligations to the Company or any of the other Loan Parties (and their respective successors, assigns, affiliates, shareholders and controlling persons) and from, and hereby further waives, releases and discharges, any and all claims (including, without limitation, crossclaims, counterclaims, rights of set-off and recoupment), demands, debts, accounts, contracts, liabilities, damages, action and causes of action (collectively, the “Released Claims”), whether in law or in equity, of whatsoever nature and kind, whether known or unknown, whether now or hereafter existing, that the Company or any of the other Loan Parties at any time had or has, or that their respective successors, assigns, affiliates, shareholders and controlling persons hereafter can or may have against the Administrative Agent or the Lenders, their respective officers, directors, agents or employees and their respective affiliates, successors, assigns, shareholders and controlling persons, in each case in connection with the Credit Agreement, the other Loan Documents and the transactions contemplated thereby.

8.       Miscellaneous.

(a)       This Letter Agreement shall be governed by and construed in accordance with the laws of the State of Texas without regard to principles of conflicts of law to the extent that the application of the laws of another jurisdiction will be required thereby. The provisions of Section 11.12 of the Credit Agreement is hereby incorporated by reference and made a part hereof.

(b)       The expense reimbursement and indemnification provisions of Section 11.1 and Section 11.2 of the Credit Agreement are hereby incorporated by reference and made a part hereof.

(c)       THIS LETTER AGREEMENT REPRESENTS THE FINAL AGREEMENT AMONG THE PARTIES REGARDING THE MATTERS SET FORTH HEREIN AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

(d)       This Letter Agreement may be executed in separate counterparts and delivery of an executed signature page hereof by facsimile or electronic mail (including .pdf) shall be effective as delivery of a manually executed counterpart hereof. This Letter Agreement constitutes a “Loan Document” under and as defined in Section 1.1 of the Credit Agreement.

[Signature Pages Follow]

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Very truly yours,
TEXAS CAPITAL BANK, NATIONAL
ASSOCIATION
By:	/s/ Jerra Hayden
Name:	Jerra Hayden
Title:	Senior Vice President

[Signature Page to Letter Agreement Re:

Limited Waiver of Leverage Ratio Financial Covenant – Flex Leasing Power & Service LLC]

Accepted and Agreed to:
BORROWERS:
FLEX LEASING POWER & SERVICE LLC,
a Delaware limited liability company
By:	/s/ Darin Romine
Name:	Darin Romine
Title:	SVP
FLEX LEASING POWER AND SERVICE ULC,
an Alberta unlimited liability corporation
By:	/s/ Darin Romine
Name:	Darin Romine
Title:	SVP
GUARANTOR:
FLEX POWER CO.,
a Delaware corporation
By:	/s/ Darin Romine
Name:	Darin Romine
Title:	SVP

[Signature Page to Letter Agreement Re:

Limited Waiver of Leverage Ratio Financial Covenant – Flex Leasing Power & Service LLC]

EX-10.26

Exhibit 10.26

FOURTH AMENDMENT TO CREDIT AGREEMENT

This FOURTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is made and entered into on June 29, 2021 (the “Fourth Amendment Effective Date”), by and among FLEX LEASING POWER & SERVICE LLC, a Delaware limited liability company (the “Company”), the other Borrowers and Loan Parties party hereto, TEXAS CAPITAL BANK, NATIONAL ASSOCIATION, in its capacity as Administrative Agent (the “Administrative Agent”), and the Lenders (as defined below) party hereto.

RECITALS:

WHEREAS, the Loan Parties are party to that certain Credit Agreement dated as of February 8, 2019 (as amended, restated, supplemented or otherwise modified, the “Credit Agreement”), by and among the Company, the other Borrowers from time to time party thereto, the other Loan Parties from time to time party thereto, the financial institutions from time to time party thereto as lenders (the “Lenders”) and the Administrative Agent. Capitalized terms used but not defined herein have the meaning set forth in the Credit Agreement, as amended hereby.

WHEREAS, the Company, the other Borrowers, the other Loan Parties, the Administrative Agent and the Lenders desire to amend the Credit Agreement as provided herein upon the terms and conditions set forth herein.

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

SECTION 1.     Amendments to the Credit Agreement. In reliance upon the representations, warranties, covenants and conditions contained in this Amendment, and subject to the terms, and satisfaction of the conditions precedent set forth in Section 2 hereof, the Credit Agreement is hereby amended (a) with respect to the amendment set forth in Section 1.3(a) hereof, effective as of April 30, 2021 and (b) with respect to all other amendments set forth in Section 1 hereof (including, for the avoidance of doubt, Section 1.3(b) and Section 1.3(c) hereof), effective as of the Fourth Amendment Effective Date, in each case, in the manner provided in this Section 1.

1.1      Additional Definitions. Section 1.1 of the Credit Agreement is hereby amended to add thereto in alphabetical order the following definitions which shall read in full as follows:

“FlexEnergy” means FlexEnergy, Inc., a Delaware corporation.

“Fourth Amendment” means that certain Fourth Amendment to Credit Agreement dated as of the Fourth Amendment Effective Date, by and among the Company, the other Borrowers and the other Loan Parties party thereto, the Administrative Agent and the Lenders party thereto.

“Fourth Amendment Effective Date” means June 29, 2021.

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1.2      Restated Definitions. The definitions of the following terms contained in Section 1.1 of the Credit Agreement are hereby amended and restated in their respective entireties to read in full as follows:

“Availability Limitation” means an amount equal to (a) at any time during the Availability Limitation Period (i) from February 12, 2021 until (but not including) the Fourth Amendment Effective Date, $1,500,000 and (ii) on and after the Fourth Amendment Effective Date, $3,500,000, and (b) at any time after the expiration of the Availability Limitation Period, $0.00.

“Loan Documents” means this Agreement, the First Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment, each Guaranty, the Security Documents, the Notes, the Issuer Documents, and all other promissory notes, security agreements, deeds of trust, assignments, letters of credit, guaranties, and other instruments, documents, or agreements executed and delivered pursuant to or in connection with this Agreement or the Security Documents; provided that the term “Loan Documents” shall not include any Bank Product Agreement.

1.3      Amendments to Section 6.1 of the Credit Agreement. Section 6.1 of the Credit Agreement is hereby amended by:

(a)            amending and restating the parenthetical appearing immediately after the phrase “one hundred twenty (120) days” in clause (a) therein to read in full as follows:

(or (x) within one hundred fifty (150) days in the case of the fiscal year ending December 31, 2018 and (y) on or prior to July 31, 2021 in the case of the fiscal year ending December 31, 2020)

(b)            deleting the word “and” appearing immediately after the semi-colon in clause (q) therein; and

(c)            re-lettering clause (r) therein as new clause (s), and inserting a new clause (r) immediately after clause (q) therein to read in full as follows:

(r)            Quarterly Financial Statements. As soon as available, and in any event within sixty (60) days after the last day of each fiscal quarter of FlexEnergy, a copy of an unaudited financial report of FlexEnergy and its Subsidiaries as of the end of such quarter and for the portion of the fiscal year then ended, containing, on a consolidated basis, respectively, balance sheets and statements of income, retained earnings, and cash flow, in each case setting forth in comparative form and figures for the corresponding period of the preceding fiscal year, all in reasonable detail and prepared in accordance with GAAP and to fairly and accurately present (subject to year-end audit adjustments) the financial condition and results of operations of FlexEnergy and its Subsidiaries, on a consolidated basis, as of the dates and for the periods indicated therein; and

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SECTION 2.     Conditions Precedent to Amendment. This Amendment will be effective as of the Fourth Amendment Effective Date on the condition that the following conditions precedent will have been satisfied:

2.1      Counterparts. The Administrative Agent shall have received counterparts of this Amendment duly executed by each of the Loan Parties, the Administrative Agent and each Lender.

2.2      Expenses. The Administrative Agent shall have received payment or reimbursement of its out-of-pocket expenses in connection with this Amendment and any other out-of-pocket expenses of the Administrative Agent required to be paid or reimbursed pursuant to the Credit Agreement, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent.

2.3      Other Documents. The Administrative Agent shall have been provided with such documents, instruments and agreements, and the Loan Parties shall have taken such actions, in each case as the Administrative Agent may reasonably require in connection with this Amendment and the transactions contemplated hereby.

SECTION 3.     Representations and Warranties. Each Loan Party hereby represents and warrants to the Lenders the following:

3.1      Representations and Warranties. The representations and warranties contained in the Credit Agreement, as amended hereby, and the other Loan Documents are true and correct in all material respects (without duplication of any materiality qualification applicable thereto) on and as of the date hereof as though made on and as of the date hereof, except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties were true and correct in all material respects as of such earlier date, and except for any change of facts expressly permitted under the provisions of the Credit Agreement and the other Loan Documents.

3.2      No Default. No Default or Event of Default has occurred and is continuing as of the date hereof.

3.3      Enforceability. This Amendment has been duly executed and delivered by such Loan Party, and the Credit Agreement, as amended hereby, constitutes a legal, valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

SECTION 4.     Survival of Representations and Warranties. All representations and warranties made in this Amendment, including any Loan Document furnished in connection with this Amendment, shall survive the execution and delivery of this Amendment and the other Loan Documents, and no investigation by the Administrative Agent or any closing shall affect the representations and warranties or the right of the Administrative Agent or any Lender to rely upon them.

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SECTION 5.     Expenses. As provided in Section 11.1 of the Credit Agreement and subject to the limitations expressly set forth therein, the Borrowers hereby agree to pay on demand all legal and other fees, costs and expenses incurred by the Administrative Agent in connection with the negotiation, preparation, and execution of this Amendment and all related documents.

SECTION 6.     No Implied Waivers. No failure or delay on the part of the Administrative Agent or any Lender in exercising, and no course of dealing with respect to, any right, power or privilege under this Amendment, the Credit Agreement or any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege under this Amendment, the Credit Agreement or any other Loan Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

SECTION 7.     Ratification and Affirmation of Loan Parties. Each of the Loan Parties hereby expressly (a) acknowledges the terms of this Amendment, (b) ratifies and affirms its obligations under the Loan Documents to which it is a party, (c) acknowledges, renews and extends its continued liability under the Loan Documents to which it is a party, and (d) agrees, with respect to each Loan Party that is a Guarantor, that its guarantee under the Guaranty remains in full force and effect with respect to the Obligations as amended hereby. Any and all of the terms and provisions of the Credit Agreement and the other Loan Documents shall, except as amended hereby, remain in full force and effect. The Loan Parties hereby extend the Liens securing the Obligations until the Obligations have been paid in full, and agree that the amendments and waivers herein contained shall in no manner affect or impair the Obligations or the Liens securing payment and performance thereof, all of which are ratified and confirmed.

SECTION 8.     Severability. Any provision of this Amendment that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

SECTION 9.     APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.

SECTION 10.     Successors and Assigns. This Amendment is binding upon and shall inure to the benefit of the Administrative Agent, the Lenders and the Loan Parties and their respective successors and assigns, except the Loan Parties may not assign or transfer any of their rights or obligations hereunder without the prior written consent of the Administrative Agent, other than as expressly permitted under the terms of the Credit Agreement.

SECTION 11.     Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original but all of which when taken together shall constitute but one and the same instrument. Delivery of an executed signature page of this Amendment by facsimile transmission or PDF electronic transmission shall be effective as delivery of a manually executed counterpart hereof.

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SECTION 12.     Effect of Consent. No consent or waiver, express or implied, by the Administrative Agent to or for any breach of or deviation from any covenant, condition or duty by the Borrowers shall be deemed a consent or waiver to or of any other breach of the same or any other covenant, condition or duty.

SECTION 13.     Headings. The headings of this Amendment are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

SECTION 14.     Reaffirmation of Loan Documents. This Amendment shall be deemed to be an amendment to the Credit Agreement, and the Credit Agreement, as amended hereby, and the other Loan Documents are hereby ratified, approved and confirmed in each and every respect. All references to the Credit Agreement herein and in any other document, instrument, agreement or writing shall hereafter be deemed to refer to the Credit Agreement as amended hereby.

SECTION 15.     Loan Document. This Amendment constitutes a “Loan Document” under and as defined in the Credit Agreement.

SECTION 16.    Entire Agreement. THE CREDIT AGREEMENT, THIS AMENDMENT, THE OTHER LOAN DOCUMENTS, AND ALL OTHER INSTRUMENTS, DOCUMENTS AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS AMENDMENT REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES.

[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]

5 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date set forth above.

BORROWERS:
FLEX LEASING POWER & SERVICE LLC,
a Delaware limited liability company
By:	/s/ Darin Romine
Name:	Darin Romine
Title:	Senior Vice President
FLEX LEASING POWER AND SERVICE ULC,
an Alberta unlimited liability corporation
By:	/s/ Darin Romine
Name:	Darin Romine
Title:	Senior Vice President

[Signature Page to Fourth Amendment To Credit Agreement – Flex Leasing Power & Service LLC]

GUARANTORS:
FLEX POWER CO.,
a Delaware limited liability company
By:	/s/ Darin Romine
Name:	Darin Romine
Title:	SVP

[Signature Page to Fourth Amendment To Credit Agreement – Flex Leasing Power & Service LLC]

ADMINISTRATIVE AGENT AND LENDER:
TEXAS CAPITAL BANK, NATIONAL ASSOCIATION
By:	/s/ Dan Clubb
Name:	Dan Clubb
Title:	SVP

[Signature Page to Fourth Amendment To Credit Agreement – Flex Leasing Power & Service LLC]

EX-10.27

Exhibit 10.27

JOINDER AGREEMENT

THIS JOINDER AGREEMENT (this “Joinder Agreement”) is entered into as of December 22, 2020, by the undersigned (“Additional Loan Party”), in favor of TEXAS CAPITAL BANK, NATIONAL ASSOCIATION, for the benefit of the Secured Parties, in its capacity as administrative agent (in such capacity, “Administrative Agent”) under that certain Credit Agreement dated as of February 8, 2019 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among Flex Leasing Power & Service LLC (“Company”, and together with the Additional Loan Party and any other Subsidiary of Company that becomes a party thereto from time to time, each a “Borrower” and collectively, “Borrowers”), the other Loan Parties from time to time party thereto, the Administrative Agent and the Lenders from time to time party thereto. All capitalized terms used herein and not otherwise defined herein shall have the meanings set forth in the Credit Agreement.

The Additional Loan Party and Administrative Agent, for the benefit of the Secured Parties, hereby agree as follows:

1.Additional Guarantor. The Additional Loan Party hereby acknowledges, agrees and confirms that, by its execution of this Joinder Agreement, the Additional Loan Party will be deemed to be a party to the Credit Agreement as a “Guarantor” for all purposes of the Credit Agreement (including any Guaranty), and shall have all of the obligations of a Guarantor thereunder as if it had executed the Credit Agreement. The Additional Loan Party hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions applicable to Guarantors contained in the Credit Agreement. Without limiting the generality of the foregoing terms of this Section 1, the Additional Loan Party hereby, jointly and severally with the other Guarantors, unconditionally, absolutely and irrevocably guarantees to the Secured Parties, as provided in the Guaranty, the due and punctual payment at maturity, whether by acceleration or otherwise, and the due fulfillment and performance of the Obligations. The Additional Loan Party is jointly and severally liable for the full payment and performance of the Obligations as a primary obligor.

2.            Additional Borrower. The Additional Loan Party hereby acknowledges, agrees and confirms that, by its execution of this Joinder Agreement, the Additional Loan Party will be deemed to be a party to the Credit Agreement as a “Borrower” for all purposes of the Credit Agreement, and shall have all of the obligations of a Borrower thereunder as if it had executed the Credit Agreement. The Additional Loan Party hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions applicable to Borrowers contained in the Credit Agreement.

3.            Joinder Documents. In accordance with Section 6.13 of the Credit Agreement, the Additional Loan Party is, simultaneously with the execution of this Joinder Agreement, (a) executing and delivering such Security Documents (or joinders or assumptions thereto) as requested by Administrative Agent in accordance with the Credit Agreement and (b) delivering such other documents and instruments as Administrative Agent may require in its sole discretion, including appropriate favorable opinions of counsel to the Additional Loan Party in form, content and scope reasonably satisfactory to Administrative Agent.

4.Address for Notice Purposes. The address of the Additional Loan Party for purposes of all notices and other communications is set forth on the signature page hereof.

5.Waiver of Acceptance. The Additional Loan Party hereby waives acceptance by Administrative Agent and the Lenders of the guaranty by the Additional Loan Party under the Guaranty upon the execution of this Joinder Agreement by the Additional Loan Party.

6.Representations and Warranties. The Additional Loan Party hereby represents and confirms that the representations and warranties set forth in the Loan Documents which are applicable to the Guarantors and Borrowers are true and correct with respect to the Additional Loan Party on and as of the date hereof (and after giving effect hereto), as if set forth herein in their entirety.

7.Severability. Any provision of this Joinder Agreement held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this Joinder Agreement and the effect thereof shall be confined to the provision held to be invalid or illegal.

8.Counterparts. This Joinder Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Joinder Agreement shall become effective when it shall have been executed by Administrative Agent and when Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Joinder Agreement by facsimile or other electronic transmission (e.g. “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart of this Joinder Agreement.

9.Governing Law. This Joinder Agreement and any claims, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Joinder Agreement and the transactions contemplated hereby and thereby shall be governed by, and construed in accordance with, the Law of the State of Texas (without reference to applicable rules of conflicts of laws).

10.Loan Document. This Joinder Agreement is a Loan Document for all purposes and each reference in any Loan Document to the Credit Agreement or the Guaranty shall mean the Credit Agreement or the Guaranty, as applicable, as supplemented by this Joinder Agreement.

11.ENTIRE AGREEMENT. THIS JOINDER AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

[Remainder of page intentionally left blank. Signature pages follow.]

2

IN WITNESS WHEREOF, the undersigned Additional Loan Party and Administrative Agent have executed this Joinder Agreement as of the date first above written.

ADDITIONAL LOAN PARTY:

Flex Leasing Power and Service ULC, an Alberta unlimited liability corporation

By:

Name:

Title:

Address for notices:

Attn:

Facsimile:

E-mail:

[Signature Page to Joinder Agreement –

Flex Leasing Power and Service ULC]

ACCEPTED BY:

TEXAS CAPITAL BANK, NATIONAL ASSOCIATION, as Administrative Agent

By:

Name:

Title:

[Signature Page to Joinder Agreement –

Flex Leasing Power and Service ULC]

EX-10.28

Exhibit 10.28

JOINDER AGREEMENT AND AMENDMENT TO SUBORDINATION AND

INTERCREDITOR AGREEMENT

This JOINDER AGREEMENT AND AMENDMENT TO SUBORDINATION AND INTERCREDITOR AGREEMENT dated as of December 22, 2020 (this "Agreement"), is executed by FLEX LEASING POWER AND SERVICE ULC, an Alberta unlimited liability corporation (the "New Subsidiary"), in favor of TEXAS CAPITAL BANK, NATIONAL ASSOCIATION, in its capacity as Agent ("Agent"), and acknowledged and accepted by Agent, the existing Loan Parties and the Subordinated Lenders, as defined in and pursuant to, that certain Subordination and Intercreditor Agreement dated as of February 8, 2019 (as amended, restated, supplemented or otherwise modified from time to time, the "Intercreditor Agreement"), among Agent, the Subordinated Lenders from time to time party thereto, FlexEnergy Power Solutions, LLC, a Delaware limited liability company, as Parent, Flex Leasing Power & Service LLC, a Delaware limited liability company, as Company, and each of the other Loan Parties from time to time party thereto. All capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Intercreditor Agreement.

Section 1. Amendment to Intercreditor Agreement.

Section 1 of the Intercreditor Agreement is hereby amended by amending and replacing the definition of "Loan Parties" in its entirety to read as follows:

"Loan Parties" shall mean the Company and each Subsidiary of the Company that is now or hereafter becomes a party to any Senior Debt Document. All references in this Agreement to any Loan Party shall include such Loan Party as a debtor-in-possession and any receiver or trustee for such Loan Party in any Proceeding.

Section 2. Joinder to Intercreditor Agreement.

(a)The New Subsidiary, for the benefit of Agent, hereby agrees as follows: The New Subsidiary hereby acknowledges the Intercreditor Agreement and acknowledges, agrees and confirms that, by its execution of this Agreement, the New Subsidiary will be deemed to be a "Loan Party" under the Intercreditor Agreement and shall have all of the obligations of a Loan Party thereunder as if it had executed the Intercreditor Agreement. The New Subsidiary hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions contained in the Intercreditor Agreement.

(b)The address of the New Subsidiary for purposes of Section 13 of the Intercreditor Agreement is as follows:

6400 S. Fiddlers Green Circle, Suite 900,

Greenwood Village, CO 80111

Attention:Doug Baltzer

Fax:(303) 694-0344

E-Mail:doug.baltzer@flexleasingpower.com

Section 3. Miscellaneous.

(a)          Continuing Effect. Except as specifically provided herein, each party hereto confirms and agrees that the Intercreditor Agreement shall remain in full force and effect in accordance with its terms and is hereby ratified and confirmed in all respects.

(b)Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE NEW SUBSIDIARY HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.

(c)         Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall not invalidate the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

(d)         Counterparts. This Agreement may be executed in any number of counterparts, each of which counterparts when executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. Delivery of an executed counterpart of this Agreement by fax or other electronic transmission shall be equally effective as delivery of a manually executed counterpart.

(e)           Headings. Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.

(f)Binding Effect; Assignment. This Agreement shall be binding upon and inure to the benefit of the Agent, the Senior Secured Parties and the Subordinated Lenders and their respective successors and assigns.

(g)Entire Agreement. This Agreement constitutes the entire agreement and understanding among the parties hereto with respect to the subject matter hereof and supersedes any prior agreements, written or oral, with respect thereto.

[Signature Pages Follow]

[Signature Page to Joinder and Amendment to Subordination and Intercreditor Agreement]

IN WITNESS WHEREOF, the New Subsidiary has caused this Agreement to be duly executed by its authorized officer, as of the day and year first above written.

FLEX LEASING POWER AND SERVICE ULC, an Alberta unlimited liability company

By:

Name:

Title:

[Signature Page to Joinder and Amendment to Subordination and Intercreditor Agreement]

ACKNOWLEDGED AND AGREED TO BY:

SUBORDINATED LENDERS:

RNS FLEX, LLC

By: RNS Management, LLC, its Manager

By:

Name:

Title:

ENERGY SPECIAL SITUATIONS FUND II, L.P.,

By: Energy Special Situations Fund Management II, LLC, its general partner

By:

Name:

Title:

ESS PARTICIPATION FUND II, L.P.,

By: Energy Special Situations Fund Management II, LLC, its general partner

By:

Name:

Title:

TRF PLATFORM HOLDINGS, LLC

By: Intervale Capital Fund III, L.P., its manager

By: Intervale Capital GP III, L.P., its general partner

By: Intervale Capital Associates III LLC, its general partner

By:

Name:

Title:

[Signature Page to Joinder and Amendment to Subordination and Intercreditor Agreement]

PARENT:

FLEXENERGY POWER SOLUTIONS, LLC,

a Delaware limited liability company

By

Name: Wes Kimmel

Title: Chief Financial Officer  

LOAN PARTIES:

FLEX LEASING POWER & SERVICE LLC,

a Delaware limited liability company  

By

Name: Darin Romine

Title: Vice President–Finance

FLEX POWER CO.,

a Delaware corporation

By

Name: Darin Romine

Title: Vice President–Finance

[Signature Page to Joinder and Amendment to Subordination and Intercreditor Agreement]

AGENT:

TEXAS CAPITAL BANK, NATIONAL ASSOCIATION, as Agent

By:

Name:

Title:

[Signature Page to Joinder and Amendment to Subordination and Intercreditor Agreement]

EX-10.29

Exhibit 10.29

AMENDMENT TO SECURITY AGREEMENT

This Amendment, dated December 22, 2020 is delivered pursuant to Section 4.4 of the Security Agreement referred to below. All defined terms herein shall have the meanings ascribed thereto or incorporated by reference in the Security Agreement. The undersigned, Flex Power Co. ( “Flex Power”), hereby certifies that the representations and warranties in Article III of the Security Agreement are and continue to be true and correct. Flex Power further agrees that this Amendment may be attached to that certain Pledge and Security Agreement dated as of February 8, 2019 (as amended, restated, supplemented or otherwise modified from time to time, the “Security Agreement”), between Flex Power and the other Grantors party thereto, as Grantors, and Texas Capital Bank, National Association, as the Administrative Agent, and that the Collateral listed on Schedule I to this Amendment shall be and become a part of the Collateral referred to in said Security Agreement and shall secure all Obligations referred to in said Security Agreement.

Flex Power hereby acknowledges that certain of the Collateral of Flex Power may now or in the future consist of shares or other equity interests (collectively, “ULC Shares”) in the capital stock of an issuer that is an unlimited company, unlimited liability corporation or unlimited liability company (in each case, a “ULC”), and that it is the intention of the Administrative Agent and Flex Power that neither the Administrative Agent nor any other Secured Party should under any circumstances prior to realization thereon be held to be a “member” or a “shareholder”, as applicable, of a ULC for the purposes of the Companies Act (Nova Scotia), the Business Corporations Act (Alberta), the Business Corporations Act (British Columbia) or any other present or future Laws governing ULCs (collectively, “ULC Laws”). Therefore, notwithstanding any provisions to the contrary contained in the Security Agreement, the Credit Agreement or any other Loan Document, where Flex Power is the registered owner of ULC Shares which are Collateral, Flex Power shall remain the sole registered owner of such ULC Shares until such time as such ULC Shares are effectively transferred into the name of the Administrative Agent, any other Secured Party, or any other Person on the books and records of the applicable ULC. Accordingly, Flex Power shall be entitled to receive and retain for its own account any dividend on or other distribution, if any, with respect to such ULC Shares (except for any dividend or distribution comprised of certificated Securities pledged by Flex Power, which shall be delivered to the Administrative Agent to hold in accordance with the Security Agreement) and shall have the right to vote such ULC Shares and to control the direction, management and policies of the applicable ULC to the same extent as Flex Power would if such ULC Shares were not pledged to the Administrative Agent pursuant to the Security Agreement. Nothing in this Security Agreement, the Credit Agreement or any other Loan Document is intended to, and nothing in this Security Agreement, the Credit Agreement or any other Loan Document shall, constitute the Administrative Agent, any other Secured Party, or any other Person other than Flex Power, a member or shareholder of a ULC for the purposes of any ULC Laws (whether listed or unlisted, registered or beneficial), until such time as notice is given to Flex Power and further steps are taken pursuant hereto or thereto so as to register the Administrative Agent, any other Secured Party, or such other Person, as specified in such notice, as the holder of the ULC Shares. To the extent any provision hereof would have the effect of constituting the Administrative Agent or any other Secured Party as a member or a shareholder, as applicable, of any ULC prior to such time, such provision shall be severed from the Security Agreement and shall be ineffective with respect to ULC Shares which are Collateral of Flex Power without otherwise invalidating or rendering unenforceable the Security Agreement or invalidating or rendering unenforceable such provision insofar as it relates to Collateral of Flex Power which is not ULC Shares. Except upon the exercise of rights of the Administrative Agent to sell, transfer or otherwise dispose of ULC Shares in accordance with the Security Agreement, Flex Power shall not cause or permit, or enable any issuer that is a ULC to cause or permit, the Administrative Agent or any other Secured Party to: (a) be registered as a shareholder or member of such issuer; (b) have any notation entered in their favour in the share register of such issuer; (c) be held out as shareholders or members of such issuer; (d) receive, directly or indirectly, any dividends, property or other distributions from such issuer by reason of the Administrative Agent holding the Security Interests over the ULC Shares; or (e) act as a shareholder of such issuer, or exercise any rights of a shareholder including the right to attend a meeting of shareholders of such issuer or to vote its ULC Shares.

[signatures on the following pages]

IN WITNESS WHEREOF, Flex Power Co. has executed this Amendment to Security Agreement as of the date first above written.

GRANTOR:
FLEX POWER CO.
By:	/s/ Darin Romine
Name:	Darin Romine
Title:	Senior Vice President

Signature Page Amendment to Security Agreement

EX-10.30

Exhibit 10.30

Execution Version

CANADIAN PLEDGE AND SECURITY AGREEMENT

This CANADIAN PLEDGE AND SECURITY AGREEMENT (as it may be amended, restated, supplemented or modified from time to time, this “Security Agreement”) is entered into as of December 22, 2020, by and among each of the undersigned identified on the signature pages hereto as Grantors (together with any other entity that may become a party hereto as provided herein, each a “Grantor”, and collectively, the “Grantors”), and Texas Capital Bank, National Association, in its capacity as administrative agent (the “Administrative Agent”) for the Lenders and the other Secured Parties.

PRELIMINARY STATEMENTS

A.Reference is made to that certain Credit Agreement dated as February 8, 2019, among FLEX LEASING POWER & SERVICE LLC, a Delaware limited liability company (“Flex U.S.”), Flex Leasing Power and Service ULC, an Alberta unlimited liability corporation (“Flex Canada”, and together with Flex U.S. and any Subsidiary of Flex U.S. that becomes party thereto from time to time as a “Borrower”, each a “Borrower” and collectively, the “Borrowers”), the other Loan Parties from time to time party thereto, the financial institutions from time to time party thereto as lenders (collectively, the “Lenders”) and TEXAS CAPITAL BANK, NATIONAL ASSOCIATION, in its capacity as administrative agent for the Lenders (as amended and supplemented to the date hereof and as further amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), pursuant to which the Lenders have agreed to make loans and other extensions of credit to the Borrowers for the purposes set forth therein.

B.The Loan Parties and/or certain of their Subsidiaries and certain Bank Product Providers have or may enter into certain Bank Product Agreements, including without limitation, Hedge Agreements (the “Secured Bank Product Agreements”).

C.The Guarantors have provided a guarantee under the Credit Agreement or may from time to time execute a written guaranty whether by means of a joinder or assumption agreement related thereto or otherwise (such guarantee and such written guaranty, joinders and assumption agreements, as they may from time to time be amended, restated, replaced, modified or supplemented, are collectively the “Guaranty”), pursuant to which, upon the terms and conditions stated therein, the Guarantors party thereto have agreed to guarantee the obligations of the Borrowers and the other Loan Parties under the Credit Agreement, the other Loan Documents and the Secured Bank Product Agreements. The Credit Agreement, the Guaranty, the other Loan Documents and the Secured Bank Product Agreements are collectively referred to herein as the “Secured Transaction Documents”.

D.The Administrative Agent and the other Secured Parties have conditioned their obligations under the Secured Transaction Documents upon the execution and delivery by the Grantors of this Security Agreement, and the Grantors have agreed to enter into this Security Agreement to secure all obligations owing to the Administrative Agent and the other Secured Parties under the Secured Transaction Documents.

E.Each Grantor has determined that valuable benefits will be derived by it as a result of the Credit Agreement and the extension of credit made (and to be made) by the Lenders thereunder.

ACCORDINGLY, the Grantors and the Administrative Agent, on behalf of the Secured Parties, hereby agree as follows:

ARTICLE I
DEFINITIONS

1.1Terms Defined in Credit Agreement. All capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Credit Agreement.

1.2Terms Defined in PPSA or STA. Terms defined in the PPSA or the STA (each as defined below) which are not otherwise defined in this Security Agreement are used herein as defined in the PPSA or the STA, as applicable.

1.3Definitions of Certain Terms Used Herein. As used in this Security Agreement, in addition to the terms defined in the introductory paragraph hereto and in the Preliminary Statements, the following terms shall have the following meanings:

“Account Debtor” means a Person who is obligated on an Account.

“Accounts” shall have the meaning set forth in the PPSA.

“Amendment” shall have the meaning set forth in Section 4.4 hereof.

“Article” means a numbered article of this Security Agreement, unless another document is specifically referenced.

“Assigned Contracts” means, collectively, all of the Grantors’ rights and remedies under, and all moneys and claims for money due or to become due to any Grantor under all material contracts, and any and all amendments, supplements, extensions, and renewals thereof including all rights and claims of the Grantors now or hereafter existing: (a) under any insurance, indemnities, warranties, and guarantees provided for or arising out of or in connection with any of the foregoing agreements; (b) for any damages arising out of or for breach or default under or in connection with any of the foregoing contracts; (c) to all other amounts from time to time paid or payable under or in connection with any of the foregoing agreements; or (d) to exercise or enforce any and all covenants, remedies, powers and privileges thereunder.

“Assumption Agreement” means an Assumption Agreement substantially in the form of Annex 1 hereto.

“Chattel Paper” shall have the meaning set forth in the PPSA.

“Collateral” shall have the meaning set forth in Article II.

“Collateral Report” means any certificate, report or other document delivered by any Grantor to the Administrative Agent or any Lender with respect to the Collateral pursuant to any Loan Document.

“Commodity Account Control Agreement” means an agreement, in form and substance reasonably satisfactory to the Administrative Agent, among any Grantor, a futures intermediary holding such Grantor’s assets, including funds and futures contracts, and the Administrative Agent with respect to collection and control of all deposits, futures contracts and other balances held in a Commodity Account maintained by any Grantor with such futures intermediary.

“Commodity Accounts” shall mean all “futures accounts” as defined in the PPSA.

“Control” shall have the meaning set forth in Section 1(1.1) of the PPSA.

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“Copyrights” means, with respect to any Person, all of such Person’s right, title, and interest in and to the following: (a) all copyrights, rights and interests in copyrights, works protectable by copyright, copyright registrations, and copyright applications; (b) all renewals of any of the foregoing; (c) all income, royalties, damages, and payments now or hereafter due and/or payable under any of the foregoing, including, without limitation, damages or payments for past or future infringements for any of the foregoing; (d) the right to sue for past, present, and future infringements of any of the foregoing; and (e) all rights corresponding to any of the foregoing throughout the world.

“Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

“Deposit Account Control Agreement” means an agreement, in form and substance reasonably satisfactory to the Administrative Agent, among any Grantor, a banking institution holding such Grantor’s funds, and the Administrative Agent with respect to collection and control of all deposits and balances held in a Deposit Account maintained by any Grantor with such banking institution.

“Deposit Account” means a demand, time, savings, passbook, or similar Account maintained with an organization that is engaged in the business of banking (including savings banks, savings and loan associations, credit unions, and trust companies), but does not include Investment Property or Accounts evidenced by an Instrument.

“Document of Title” shall have the meaning set forth in the PPSA.

“Effective Date” means (a) with respect to each Grantor party hereto on the date hereof, the Third Amendment Effective Date, and (b) with respect to each other Grantor, the “Effective Date” as defined in the Assumption Agreement by means of which such Grantor becomes a party hereto.

“Equipment” shall have the meaning set forth in the PPSA.

“Event of Default” means an event described in Section 5.1.

“Excluded Payments” shall have the meaning set forth in Section 4.6(c)(iii) hereof.

“Exhibit” refers to a specific exhibit to this Security Agreement (unless another document is specifically referenced) as from time to time supplemented by any Assumption Agreements.

“Fixtures” means goods that have become so related to particular real property that an interest in them arises under real property law.

“Generator Location” means, at any time, any customer location where a Grantor’s Generator Units or Field Units are in the possession of a customer pursuant to an uptime energy, servicing or lease agreement entered into by a Grantor and such Person in the ordinary course of business.

“Goods” shall have the meaning set forth in the PPSA.

“Industrial Designs” means, with respect to any Person, all of such Person’s right, title, and interest in and to: (a) any and all industrial designs and industrial design applications; (b) all inventions and improvements described and claimed therein; (c) all reissues, divisions, continuations, renewals, extensions, and continuations-in-part thereof; (d) all income, royalties, damages, claims, and payments now or hereafter due or payable under and with respect thereto, including, without limitation, damages and payments for past and future infringements thereof; (e) all rights to sue for past, present, and future infringements thereof; and (f) all rights corresponding to any of the foregoing throughout the world.

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“Instruments” shall have the meaning set forth in the PPSA.

“Intangibles” shall have the meaning set forth in the PPSA.

“Inventory” shall have the meaning set forth in the PPSA.

“Investment Property” shall have the meaning set forth in the PPSA.

“Letter-of-Credit Rights” means a right to payment or performance under a letter of credit, whether or not the beneficiary has demanded or is at the time entitled to demand payment or performance, but does not include the right of a beneficiary to demand payment or performance under a letter of credit.

“Licenses” means, with respect to any Person, all of such Person’s right, title, and interest in and to (a) any and all licensing agreements or similar arrangements in and to its Patents, Copyrights, Industrial Designs or Trademarks, (b) all income, royalties, damages, claims, and payments now or hereafter due or payable under and with respect thereto, including, without limitation, damages and payments for past and future breaches thereof, and (c) all rights to sue for past, present, and future breaches thereof.

“Patents” means, with respect to any Person, all of such Person’s right, title, and interest in and to: (a) any and all patents and patent applications; (b) all inventions and improvements described and claimed therein; (c) all reissues, divisions, continuations, renewals, extensions, and continuations-in-part thereof; (d) all income, royalties, damages, claims, and payments now or hereafter due or payable under and with respect thereto, including, without limitation, damages and payments for past and future infringements thereof; (e) all rights to sue for past, present, and future infringements thereof; and (f) all rights corresponding to any of the foregoing throughout the world.

“Pledged Collateral” means all Instruments, Securities and other Investment Property of the Grantors, whether or not physically delivered to the Administrative Agent pursuant to this Security Agreement.

“PPSA” means the Personal Property Security Act (Alberta) and the regulations thereunder, as from time to time in effect, provided, however, if attachment, perfection or priority of the Administrative Agent’s security interests in any Collateral are governed by the personal property security laws of any jurisdiction in Canada other than Alberta, PPSA shall mean those personal property security laws in such other jurisdiction for the purposes of the provisions hereof relating to such attachment, perfection or priority and for the definitions related to such provisions.

“Proceeds” shall have the meaning set forth in the PPSA and, in any event shall include, without limitation all dividends or other income from the Pledged Collateral, collections thereon and distributions or payments with respect thereto.

“Receivables” means the Accounts, Chattel Paper, Documents of Title, Investment Property, Instruments and any other rights or claims to receive money which are Intangibles or which are otherwise included as Collateral.

“Receiver” means a receiver, an interim receiver, a manager or a receiver and manager.

“Section” means a numbered section of this Security Agreement, unless another document is specifically referenced.

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“Securities Account Control Agreement” means an agreement, in form and substance reasonably satisfactory to the Administrative Agent, among any Grantor, a securities intermediary holding such Grantor’s assets, including funds and securities, or an issuer of Securities, and the Administrative Agent with respect to collection and control of all deposits, securities and other balances held in a Securities Account maintained by any Grantor with such securities intermediary.

“Securities Accounts” shall have the meaning set forth in the PPSA.

“Security” shall have the meaning set forth in the PPSA.

“STA” means the Securities Transfer Act (Alberta), as such legislation may be amended, renamed or replaced from time to time, and includes all regulations from time to time made under such legislation.

“Stock Rights” means all dividends, instruments or other distributions and any other right or property which the Grantors shall receive or shall become entitled to receive for any reason whatsoever with respect to, in substitution for or in exchange for any Equity Interest constituting Collateral, any right to receive an Equity Interest and any right to receive earnings, in which the Grantors now have or hereafter acquire any right, issued by an issuer of such Equity Interest.

“Supporting Obligations” means any Letter-of-Credit Right or secondary obligation that supports the payment or performance of an Account, Chattel Paper, Document of Title, Intangible, Instrument or Investment Property.

“Trademarks” means, with respect to any Person, all of such Person’s right, title, and interest in and to the following: (a) all trademarks (including service marks), trade names, trade dress, and trade styles and the registrations and applications for registration thereof and the goodwill of the business symbolized by the foregoing; (b) all licenses of the foregoing, whether as licensee or licensor; (c) all renewals of the foregoing; (d) all income, royalties, damages, and payments now or hereafter due or payable with respect thereto, including, without limitation, damages, claims, and payments for past and future infringements thereof; (e) all rights to sue for past, present, and future infringements of the foregoing, including the right to settle suits involving claims and demands for royalties owing; and (f) all rights corresponding to any of the foregoing throughout the world.

“ULC” means an Issuer that is an unlimited company, unlimited liability corporation or unlimited liability company.

“ULC Laws” means the Companies Act (Nova Scotia), the Business Corporations Act (Alberta), the Business Corporations Act (British Columbia) and any other present or future Laws governing ULCs.

“ULC Shares” means shares or other equity interests in the capital stock of a ULC.

The foregoing definitions shall be equally applicable to both the singular and plural forms of the defined terms.

ARTICLE II
GRANT OF SECURITY INTEREST

Each Grantor hereby pledges, assigns and grants to the Administrative Agent, on behalf of and for the ratable benefit of the Secured Parties, a security interest in all of its right, title and interest in, to and under all of its present and after-acquired personal property and other assets, whether now owned by or owing to, or hereafter acquired by or arising in favour of such Grantor (including under any trade name or derivations thereof), and whether owned or consigned by or to, or leased from or to, such Grantor, and regardless of where located (all of which will be collectively referred to as the “Collateral”), including:

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(i)all Pledged Collateral now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title or interest and whether now existing or hereafter coming into existence;

(ii)all Accounts;

(iii)all Chattel Paper;

(iv)all Copyrights, Patents, Trademarks, Industrial Designs and other intellectual property;

(v)all Documents of Title;

(vi)all Equipment;

(vii)all Fixtures;

(viii)all Intangibles;

(ix)all Goods;

(x)all Instruments;

(xi)all Inventory (including Generator Units and Field Units);

(xii)all Investment Property;

(xiii)all cash or cash equivalents;

(xiv)all letters of credit, Letter-of-Credit Rights and Supporting Obligations;

(xv)all Deposit Accounts with any bank or other financial institution;

(xvi)all Securities Accounts;

(xvii)all Commodity Accounts;

(xviii)all Assigned Contracts;

(xix)all Hedge Agreements; and

(xx)all accessions to, substitutions for and replacements, Proceeds (including Stock Rights), insurance proceeds and products of the foregoing, together with all books and records, customer lists, credit files, computer files, programs, printouts and other computer materials and records related thereto and any Intangibles at any time evidencing or relating to any of the foregoing;

to secure the prompt and complete payment and performance of its Obligations; provided, however, that “Collateral” shall not include (i) any Excluded Assets; and provided further, that (x) Excluded Assets shall not include any proceeds, products, substitutions, or replacements of Excluded Assets unless such proceeds, products, substitutions, or replacements of Excluded Assets would otherwise constitute Excluded Assets and (y) if and when any such item, category or type of property shall cease to be an Excluded Asset, such property shall be deemed at all times from and after such date to constitute Collateral; (ii) any Consumer Goods; or (iii) the last day of any real property lease or any agreement to lease real property, to which a Grantor is now or becomes a party as lessee, provided that any such last day shall be held in trust by such Grantor and, on the exercise by the Administrative Agent of its rights and remedies hereunder, shall be assigned by the Grantor as directed by the Administrative Agent.

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ARTICLE III
REPRESENTATIONS AND WARRANTIES

Each Grantor represents and warrants to the Administrative Agent and the Secured Parties that:

3.1Title, Authorization, Validity, Enforceability, Perfection and Priority. Such Grantor has good and valid rights in or the power to transfer the Collateral and title to the Collateral with respect to which it has purported to grant a security interest hereunder, free and clear of all Liens except for Liens permitted under Section 4.1(e), and has full power and authority to grant to the Administrative Agent the security interest in such Collateral pursuant hereto. The execution and delivery by such Grantor of this Security Agreement has been duly authorized by proper corporate, limited liability company, unlimited liability corporation, partnership, or other similar organizational actions, as applicable, of such Grantor, and this Security Agreement constitutes a legal valid and binding obligation of such Grantor and creates a security interest which is enforceable against such Grantor in all Collateral it now owns or hereafter acquires, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law. When financing statements have been filed in the appropriate jurisdictions against such Grantor in the locations listed on Exhibit H and this Security Agreement (or other short form security agreement) has been filed in the Canadian Intellectual Property Office, the United States Patent and Trademark Office and/or the United States Copyright Office, as applicable, and all filing and recordation fees associated therewith have been paid, the Administrative Agent will have a validly perfected first priority security interest in that Collateral of the Grantor in which a security interest may be perfected by filing, subject only to Liens permitted under Section 4.1(e).

3.2Type and Jurisdiction of Organization, Organizational and Identification Numbers. The type of entity of such Grantor, its jurisdiction of organization and the organizational number issued to it by its jurisdiction of organization are set forth on Exhibit A.

3.3Principal Location. Such Grantor’s mailing address and the location of its place of business (if it has only one) or its chief executive office (if it has more than one place of business), are disclosed in Exhibit A.

3.4Collateral Locations and Serial Number Goods. All of such Grantor’s locations where Collateral is located, excluding Generator Locations, are listed on Exhibit A. All of said locations are owned by such Grantor except for locations (a) which are leased by the Grantor as lessee and designated in Part II(b) of Exhibit A and (b) at which Inventory or other Collateral is held in a public warehouse or is otherwise held by a bailee or on consignment as designated in Part II(c) of Exhibit A. All serial number goods owned by such Grantor that are Equipment are listed in Part III of Exhibit A, together with the jurisdiction in which each such serial number good is located.

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3.5Deposit Accounts, Commodity Accounts and Securities Accounts. All of such Grantor’s Deposit Accounts, Commodity Accounts and Securities Accounts (including any Excluded Accounts) as of the Effective Date are listed on Exhibit B.

3.6Exact Names. As of the Effective Date, such Grantor’s name in which it has executed this Security Agreement is the exact name as it appears in such Grantor’s organizational documents, as amended, as filed with such Grantor’s jurisdiction of organization. Except as may be described in Exhibit A, such Grantor has not, during the past five years, been known by or used any other corporate or fictitious name, or been a party to any merger or consolidation, or been a party to any acquisition.

3.7Letter-of-Credit Rights and Chattel Paper. As of the Effective Date, Exhibit C lists all Letter-of-Credit Rights and Chattel Paper of such Grantor as of the Effective Date. All action by such Grantor necessary or desirable to protect and perfect the Administrative Agent’s Lien on each item listed on Exhibit C (including the delivery of all originals and the placement of a legend on all Chattel Paper as required hereunder) has been duly taken. The Administrative Agent will have a fully perfected first priority security interest in the Collateral listed on Exhibit C, subject only to Liens permitted under Section 4.1(e).

3.8Accounts and Chattel Paper.

(a)The names of the obligors, amounts owing, due dates and other information with respect to its Accounts and Chattel Paper are and will be correctly stated in all records of such Grantor relating thereto and in all invoices and Collateral Reports with respect thereto furnished to the Administrative Agent by such Grantor from time to time. As of the time when each Account or each item of Chattel Paper arises, such Grantor shall be deemed to have represented and warranted that such Account or Chattel Paper, as the case may be, and all records relating thereto, are genuine and in all respects what they purport to be.

(b)With respect to its Accounts, except as specifically disclosed on the most recent Collateral Report, (i) all Accounts are Eligible Accounts; (ii) to such Grantor’s knowledge, there are no facts, events or occurrences which in any way impair the validity or enforceability thereof or could reasonably be expected to reduce the amount payable thereunder as shown on such Grantor’s books and records and any invoices, statements and Collateral Reports with respect thereto; (iii) such Grantor has not received any notice of proceedings or actions which are threatened or pending against any Account Debtor which might result in any adverse change in such Account Debtor’s financial condition; and (iv) such Grantor has no knowledge that any Account Debtor is unable generally to pay its debts as they become due.

(c)In addition, with respect to all of its Accounts, (i) the amounts shown on all invoices, statements and Collateral Reports with respect thereto are actually and absolutely owing to such Grantor as indicated thereon and are not in any way contingent; (ii) no payments have been or shall be made thereon except payments immediately delivered to a Blocked Account subject to a Deposit Account Control Agreement as required by Section 2.11 of the Credit Agreement; and (iii) to such Grantor’s knowledge, all Account Debtors have the capacity to contract.

3.9Inventory. With respect to any Inventory of any Loan Party scheduled or listed on the most recent Collateral Report, (a) such Inventory (other than Inventory in transit, Inventory located at a Generator Location or Inventory subject to maintenance or repair) is located at one of such Grantor’s locations set forth on Exhibit A, (b) no Inventory (other than Inventory in transit, Inventory located at a Generator Location or Inventory subject to maintenance or repair) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the Lien granted to the Administrative Agent, for the benefit of the Administrative Agent and Secured Parties, and except for Permitted Liens, (d) except as specifically disclosed in the most recent Collateral Report delivered to the Administrative Agent, such Inventory is Eligible Inventory, Eligible Generator Units, Eligible New Generator Units or Eligible Field Units, as the case may be and (e) such Inventory is not subject to any licensing, patent, royalty, trademark, industrial design, trade name or copyright agreements with any third parties which would require any consent of any third party upon sale or disposition of that Inventory or the payment of any monies to any third party upon such sale or other disposition.

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3.10Intellectual Property. As of the Effective Date, such Grantor does not have any interest in, or title to, any Patent, Trademark, Industrial Design or Copyright except as set forth in Exhibit D. This Security Agreement is effective to create a valid and continuing Lien and, upon filing of appropriate financing statements in the jurisdictions listed on Exhibit H and this Security Agreement (or, if applicable, such short-form intellectual property security agreements as the parties may agree upon) with the Canadian Intellectual Property Office, the United States Patent and Trademark Office and/or the United States Copyright Office, as applicable, fully perfected first priority security interests in favour of the Administrative Agent on such Grantor’s Patents, Trademarks, Industrial Designs and Copyrights, such perfected security interests are enforceable as such as against any and all creditors of and purchasers from such Grantor; and all action necessary or desirable to protect and perfect the Administrative Agent’s Lien on such Grantor’s Patents, Trademarks, Industrial Designs or Copyrights shall have been duly taken.

3.11Filing Requirements. None of the Collateral owned by it is of a type for which security interests or liens may be perfected by filing under any federal statute except for (a) the vehicles described in Exhibit E and (b) Patents, Trademarks, Industrial Designs and Copyrights held by such Grantor and described in Exhibit D. The legal description, county and street address of each property on which any Fixtures are located is set forth in Exhibit F together with the name and address of the record owner of each such property.

3.12No Financing Statements, Security Agreements. No financing statement or security agreement describing all or any portion of the Collateral which has not lapsed or been terminated naming such Grantor as debtor has been filed or is of record in any jurisdiction except (a) for financing statements or security agreements naming the Administrative Agent on behalf of the Secured Parties as the secured party and (b) as permitted by Section 4.1(e).

3.13Pledged Collateral.

(a)Exhibit G sets forth a complete and accurate list of all Pledged Collateral owned by such Grantor as of the Effective Date. Such Grantor is the direct, sole beneficial owner and sole holder of record of the Pledged Collateral listed on Exhibit G as being owned by it, free and clear of any Liens, except for the security interest granted to the Administrative Agent for the benefit of the Secured Parties hereunder and except for any Permitted Liens. Such Grantor further represents and warrants that (i) all Pledged Collateral owned by it constituting an Equity Interest has been (to the extent such concepts are relevant with respect to such Pledged Collateral) duly authorized, validly issued, are fully paid and non-assessable, (ii) with respect to any certificates delivered to the Administrative Agent representing an Equity Interest, either such certificates are Securities for the purposes of the STA as a result of actions by the issuer or otherwise, or, if such certificates are not Securities, such Grantor has so informed the Administrative Agent so that the Administrative Agent may take steps to perfect its security interest therein as an Intangible, (iii) all such Pledged Collateral held by a securities intermediary is covered by a Securities Account Control Agreement and (iv) all Pledged Collateral which represents indebtedness owed to such Grantor has been duly authorized, authenticated or issued and delivered by the issuer of such indebtedness, is the legal, valid and binding obligation of such issuer and such issuer is not in default thereunder.

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(b)In addition, (i) none of the Pledged Collateral owned by it has been issued or transferred in violation of the securities registration, securities disclosure or similar laws of any jurisdiction to which such issuance or transfer may be subject, (ii) there are existing no options, warrants, calls or commitments of any character whatsoever relating to such Pledged Collateral or which obligate the issuer of any Equity Interest included in the Pledged Collateral to issue additional Equity Interests, and (iii) no consent, approval, authorization, or other action by, and no giving of notice, filing with, any Governmental Authority or any other Person is required for the pledge by such Grantor of such Pledged Collateral pursuant to this Security Agreement or for the execution, delivery and performance of this Security Agreement by such Grantor, or for the exercise by the Administrative Agent of the voting or other rights provided for in this Security Agreement or for the remedies in respect of the Pledged Collateral pursuant to this Security Agreement, except as may be required in connection with such disposition by laws affecting the offering and sale of securities generally.

(c)Except as set forth in Exhibit G, as of the Effective Date, such Grantor owns 100% of the issued and outstanding Equity Interests which constitute Pledged Collateral owned by it and none of the Pledged Collateral which represents indebtedness owed to such Grantor is subordinated in right of payment to other indebtedness or subject to the terms of an indenture.

ARTICLE IV
COVENANTS

From the date of this Security Agreement and thereafter until this Security Agreement is terminated pursuant to the terms hereof, each Grantor party hereto as of the date hereof agrees, and from and after the effective date of any Assumption Agreement applicable to any Grantor (and after giving effect to supplements, if any, to each of the Exhibits hereto with respect to such subsequent Grantor as attached to such Assumption Agreement), each such additional Grantor agrees that:

4.1General.

(a)Collateral Records. Such Grantor will maintain complete and accurate books and records with respect to the Collateral owned by it, and furnish to the Administrative Agent, with sufficient copies for each of the Lenders, such reports relating to such Collateral as the Administrative Agent shall from time to time request. 

(b)Authorization to File Financing Statements; Ratification. Such Grantor hereby authorizes the Administrative Agent to file, and if requested will deliver to the Administrative Agent, all financing statements and other documents and take such other actions as may from time to time be requested by the Administrative Agent in order to maintain a perfected, security interest in and, if applicable, Control of, the Collateral owned by such Grantor. Any financing statement filed by the Administrative Agent may be filed in any filing office in any PPSA jurisdiction and may (i) indicate such Grantor’s Collateral (A) as all present and after-acquired personal property of the Grantor or words of similar effect, regardless of whether any particular asset comprised in the Collateral falls within the scope of the PPSA or such jurisdiction, or (B) by any other description which reasonably approximates the description contained in this Security Agreement, and (ii) contain any other information required by the PPSA for the sufficiency or filing office acceptance of any financing statement or amendment, including (A) whether such Grantor is an organization, the type of organization and any organization identification number issued to such Grantor, and (B) in the case of a financing statement filed as a fixture filing or indicating such Grantor’s Collateral as as-extracted collateral or timber to be cut, a sufficient description of real property to which the Collateral relates. Such Grantor also agrees to furnish any such information to the Administrative Agent promptly upon request. Such Grantor also ratifies its authorization for the Administrative Agent to have filed in any PPSA jurisdiction any initial financing statements or amendments thereto if filed prior to the date hereof.

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(c)Further Assurances. Such Grantor will, if so requested by the Administrative Agent, furnish to the Administrative Agent, as often as the Administrative Agent requests, statements and schedules further identifying and describing the Collateral owned by it and such other reports and information in connection with its Collateral as the Administrative Agent may reasonably request, all in such detail as the Administrative Agent may specify. Such Grantor also agrees to take any and all actions necessary to defend title to the Collateral against all persons and to defend the security interest of the Administrative Agent in its Collateral and the priority thereof against any Lien not expressly permitted hereunder.

(d)Disposition of Collateral. Such Grantor will not sell, lease or otherwise dispose of the Collateral owned by it except for dispositions specifically permitted pursuant to Section 7.8 of the Credit Agreement.

(e)Liens. Such Grantor will not create, incur, or suffer to exist any Lien on the Collateral owned by it except (i) the security interest created by this Security Agreement, and (ii) other Permitted Liens.

(f)Other Financing Statements. Such Grantor will not authorize the filing of any financing statement naming it as debtor covering all or any portion of the Collateral owned by it, except as permitted by Section 4.1(e). Such Grantor acknowledges that it is not authorized to file any financing statement or amendment or termination statement with respect to any financing statement without the prior written consent of the Administrative Agent, subject to such Grantor’s rights under Section 50(5) of the PPSA.

(g)Locations. Such Grantor will not (i) maintain any Collateral owned by it (other than Collateral in transit and Collateral subject to maintenance or repair) at any location other than those locations listed on Exhibit A and Generator Locations, (ii) otherwise change, or add to, such locations (other than Generator Locations) without the Administrative Agent’s prior written consent as required by the Credit Agreement (and if the Administrative Agent gives such consent, such Grantor will concurrently therewith obtain a Collateral Access Agreement for each such location to the extent required by Section 4.13), or (iii) change its principal place of business or chief executive office from the location identified on Exhibit A, other than as permitted by Section 4.15 and the Credit Agreement.

(h)Compliance with Terms. Such Grantor will perform and comply with all obligations in respect of the Collateral owned by it and all agreements to which it is a party or by which it is bound relating to such Collateral.

4.2Receivables.

(a)Certain Agreements on Receivables. Such Grantor will not make or agree to make any discount, credit, rebate or other reduction in the original amount owing on a Receivable or accept in satisfaction of a Receivable less than the original amount thereof, except that, prior to the occurrence of an Event of Default, such Grantor may reduce the amount of Accounts arising from the sale of Inventory in accordance with its present policies and in the ordinary course of business.

(b)Collection of Receivables. Except as otherwise provided in this Security Agreement, such Grantor will collect and enforce, at such Grantor’s sole expense, all amounts due or hereafter due to such Grantor under the Receivables owned by it.

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(c)Delivery of Invoices. Promptly after the request of the Administrative Agent, such Grantor will deliver to the Administrative Agent duplicate invoices with respect to each Account owned by it bearing such language of assignment as the Administrative Agent shall specify.

(d)Disclosure of Counterclaims on Receivables. If (i) any discount, credit or agreement to make a rebate or to otherwise reduce the amount owing on any Receivable owned by such Grantor exists and such discount, credit or rebate exceeds $50,000 or (ii) if, to the knowledge of such Grantor, any dispute, setoff, claim, counterclaim or defense exists or has been asserted or threatened with respect to any such Receivable is in excess of $50,000 individually and $150,000 in the aggregate, such Grantor will promptly disclose such fact to the Administrative Agent in the next Borrowing Base Report submitted by it.

4.3Inventory and Equipment.

(a)Maintenance of Goods. Such Grantor will do all things necessary to maintain, preserve, protect and keep its Inventory in saleable condition and its Equipment in good repair and working and saleable condition, except for damaged or defective goods and consumption of Inventory arising in the ordinary course of such Grantor’s business and except for ordinary wear and tear in respect of the Equipment.

(b)Returned Inventory. All returned Inventory shall be subject to the Administrative Agent’s Liens thereon. Whenever any Inventory is returned, the related Account shall be deemed ineligible to the extent of the amount owing by the Account Debtor with respect to such returned Inventory.

(c)Equipment. Such Grantor shall not permit any Equipment to become a fixture with respect to real property or to become an accession with respect to other personal property with respect to which real or personal property the Administrative Agent does not have a Lien. Such Grantor will not, without the Administrative Agent’s prior written consent (such consent not to be unreasonably withheld, conditioned or delayed), alter or remove any identifying symbol or number on any of such Grantor’s Equipment constituting Collateral. Such Grantor will maintain a perpetual Inventory reporting system at all times.

4.4Delivery of Instruments, Securities, Chattel Paper and Documents of Title. Such Grantor will (a) deliver to the Administrative Agent immediately upon execution of this Security Agreement, the originals of all certificated Securities constituting Collateral owned by it on the Effective Date (if any then exist), (b) deliver to the Administrative Agent immediately upon execution of this Security Agreement, the originals of all Chattel Paper and other Instruments, in each case with a value in excess of $50,000, constituting Collateral owned by it on the Effective Date (if any then exist), (c) hold in trust for the Administrative Agent upon receipt and immediately thereafter deliver to the Administrative Agent (i) any such Securities constituting Collateral or (ii) any such Chattel Paper and Instruments, in each case, with a value in excess of $50,000, constituting Collateral, (d) not permit the aggregate value of all Chattel Paper and other Instruments constituting Collateral and owned by the Grantors for which the originals have not been delivered to the Administrative Agent pursuant to the foregoing clauses (b) and (c)(ii) to exceed $100,000, (e) promptly within five Business Days of the Administrative Agent’s request, deliver to the Administrative Agent (and thereafter hold in trust for the Administrative Agent upon receipt and immediately deliver to the Administrative Agent) any Document of Title evidencing or constituting Collateral, (f) mark conspicuously all original Chattel Paper, Instruments and Documents of Title (other than any delivered to the Administrative Agent) with an appropriate reference to the security interest of the Administrative Agent and (g) promptly within five Business Days of the Administrative Agent’s request, deliver to the Administrative Agent a duly executed amendment to this Security Agreement, in the form of Exhibit I hereto (the “Amendment”), pursuant to which such Grantor will pledge such additional Collateral. Such Grantor hereby authorizes the Administrative Agent to attach each Amendment to this Security Agreement and agrees that all additional Collateral owned by it set forth in such Amendments shall be considered to be part of the Collateral.

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4.5Uncertificated Pledged Collateral. Such Grantor will permit the Administrative Agent from time to time to cause the appropriate issuers (and, if held with a securities intermediary, such securities intermediary) of uncertificated securities or other types of Pledged Collateral owned by it not represented by certificates to mark their books and records with the numbers and face amounts of all such uncertificated securities or other types of Pledged Collateral not represented by certificates and all rollovers and replacements therefor to reflect the Lien of the Administrative Agent granted pursuant to this Security Agreement. With respect to any Pledged Collateral owned by it, such Grantor will take any actions necessary to cause (a) the issuers of uncertificated securities which are Pledged Collateral and (b) any securities intermediary which is the holder of any such Pledged Collateral, to cause the Administrative Agent to have and retain Control over such Pledged Collateral. Without limiting the foregoing, such Grantor will, with respect to any such Pledged Collateral held with a securities intermediary, cause such securities intermediary to enter into a Securities Account Control Agreement unless such Pledged Collateral is held in an Excluded Account.

4.6Pledged Collateral.

(a)Grantors as Issuers. In the case of each Grantor that is an issuer of Pledged Collateral, such Grantor agrees that it will be bound by the terms of this Security Agreement relating to the Pledged Collateral issued by it and will comply with such terms insofar as such terms are applicable to it.

(b)Registration of Pledged Collateral. Such Grantor will permit any registerable Pledged Collateral owned by it to be registered in the name of the Administrative Agent or its nominee at any time at the option of the Required Lenders.

(c)Exercise of Rights in Pledged Collateral.

(i)Without in any way limiting the foregoing and subject to clause (ii) below, such Grantor shall have the right to exercise all voting rights or other rights relating to the Pledged Collateral owned by it for all purposes not inconsistent with this Security Agreement, the Credit Agreement, the Intercreditor Agreement or any other Loan Document; provided however, that no vote or other right shall be exercised or action taken which would have the effect of impairing the rights of the Administrative Agent in respect of such Pledged Collateral;

(ii)Such Grantor will permit the Administrative Agent or its nominee at any time after the occurrence of an Event of Default, without notice and so long as the Obligations have been accelerated (upon demand or otherwise) pursuant to Section 9.2 of the Credit Agreement, to exercise all voting rights or other rights relating to the Pledged Collateral owned by it, including, without limitation, exchange, subscription or any other rights, privileges, or options pertaining to any Equity Interest or Investment Property constituting such Pledged Collateral as if it were the absolute owner thereof;

(iii)Such Grantor shall be entitled to collect and receive for its own use all cash dividends and interest paid in respect of the Pledged Collateral owned by it to the extent not in violation of the Credit Agreement other than any of the following distributions and payments (collectively referred to as the “Excluded Payments”): (A) dividends and interest paid or payable other than in cash in respect of such Pledged Collateral, and instruments and other property received, receivable or otherwise distributed in respect of, or in exchange for, any Pledged Collateral; (B) dividends and other distributions paid or payable in cash in respect of such Pledged Collateral in connection with a partial or total liquidation or dissolution or in connection with a reduction of capital, capital surplus or paid-in capital of an issuer; and (C) cash paid, payable or otherwise distributed, in respect of principal of, or in redemption of, or in exchange for, such Pledged Collateral; provided however, that until actually paid, all rights to such distributions shall remain subject to the Lien created by this Security Agreement; and

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(iv)All Excluded Payments and all other distributions in respect of any of the Pledged Collateral owned by such Grantor, whenever paid or made, shall be delivered to the Administrative Agent to hold as Pledged Collateral and shall, if received by such Grantor, be received in trust for the benefit of the Administrative Agent, be segregated from the other property or funds of such Grantor and be forthwith delivered to the Administrative Agent as Pledged Collateral in the same form as so received (with any necessary endorsement).

4.7Intellectual Property.

(a)If requested by the Administrative Agent, such Grantor will use commercially reasonable efforts to secure all consents and approvals necessary or appropriate for the assignment to or benefit of the Administrative Agent of any License held by such Grantor and to enforce the security interests granted hereunder.

(b)Such Grantor shall notify the Administrative Agent immediately if it knows or has reason to know that any application or registration relating to any Patent, Trademark, Industrial Design or Copyright (now or hereafter existing) may become abandoned or dedicated, or of any adverse determination or development (including the institution of, or any such determination or development in, any proceeding in the Canadian Intellectual Property Office, the United States Patent and Trademark Office or the United States Copyright Office) regarding such Grantor’s ownership of any Patent, Trademark, Industrial Design or Copyright, its right to register the same, or to keep and maintain the same.

(c)In no event shall such Grantor, either directly or through any agent, employee, licensee or designee, file an application for the registration of any Patent, Trademark, Industrial Design or Copyright with the Canadian Intellectual Property Office, the United States Patent and Trademark Office or the United States Copyright Office or any similar office or agency without giving the Administrative Agent prior written notice thereof, and, upon request of the Administrative Agent, such Grantor shall execute and deliver any and all security agreements as the Administrative Agent may request to evidence the Administrative Agent’s first priority security interest on such Patent, Trademark, Industrial Design or Copyright, and the Intangibles of such Grantor relating thereto or represented thereby.

(d)Such Grantor shall take all actions necessary or requested by the Administrative Agent to maintain and pursue each application, to obtain the relevant registration and to maintain the registration of each of its Patents, Trademarks, Industrial Designs and Copyrights (now or hereafter existing), including the filing of applications for renewal, affidavits of use, affidavits of noncontestability and opposition and interference and cancellation proceedings, unless such Grantor and the Administrative Agent shall determine that such Patent, Trademark, Industrial Designs or Copyright is not material to the conduct of such Grantor’s business.

(e)Such Grantor shall, unless it shall reasonably determine that such Patent, Trademark, Industrial Design or Copyright is in no way material to the conduct of its business or operations, promptly sue for infringement, misappropriation or dilution and to recover any and all damages for such infringement, misappropriation or dilution, and shall take such other actions as the Administrative Agent shall deem appropriate under the circumstances to protect such Patent, Trademark, Industrial Design or Copyright. In the event that such Grantor institutes suit because any of its Patents, Trademarks, Industrial Designs or Copyrights constituting Collateral is infringed upon, or misappropriated or diluted by a third party, such Grantor shall comply with Section 4.8.

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4.8[Intentionally Deleted.]

4.9Letter-of-Credit Rights. If such Grantor is or becomes the beneficiary of a letter of credit with a face amount in excess of $50,000, it shall promptly, and in any event within two Business Days after becoming a beneficiary, notify the Administrative Agent thereof and cause the issuer and/or confirmation bank to consent to the assignment of any Letter-of-Credit Rights to the Administrative Agent and agree to direct all payments thereunder to a Blocked Account for application to the Obligations, in accordance with Section 2.5(d) of the Credit Agreement, all in form and substance reasonably satisfactory to the Administrative Agent. No Grantor shall permit the aggregate face amounts of all letters of credit for which the Grantors are beneficiary and for which the applicable Grantor has not taken the steps set forth in the immediately preceding sentence to exceed $100,000.

4.10Federal, Provincial or Municipal Claims. Such Grantor will promptly notify the Administrative Agent of any Collateral which constitutes a claim against the Canadian government or any provincial, territorial or local government or any instrumentality or agency thereof, the assignment of which claim is restricted by federal, provincial, territorial or municipal law.

4.11No Interference. Such Grantor agrees that it will not interfere with any right, power and remedy of the Administrative Agent provided for in this Security Agreement or now or hereafter existing at law or in equity or by statute or otherwise, or the exercise or beginning of the exercise by the Administrative Agent of any one or more of such rights, powers or remedies.

4.12Insurance. Each Grantor shall maintain insurance in accordance with the requirements of Section 6.5 of the Credit Agreement. All premiums on any such insurance shall be paid when due by such Grantor, and copies of the policies delivered to the Administrative Agent. If such Grantor fails to obtain any insurance as required by this Section, the Administrative Agent may obtain such insurance at such Grantor’s expense. By purchasing such insurance, the Administrative Agent shall not be deemed to have waived any Default arising from such Grantor’s failure to maintain such insurance or pay any premiums therefor.

4.13Collateral Access Agreements.

(a)For any location leased by a Grantor or where any Inventory of such Grantor is in the possession or control of any Person other than a Grantor or any of its Subsidiaries (other than a Generator Location), such Grantor shall obtain Collateral Access Agreements in accordance with Section 6.14 of the Credit Agreement; provided that to the extent a Collateral Access Agreement has not been provided for such location, a Rent Reserve for rent, charges and other amounts due or to become due with respect to such location may be established by the Administrative Agent in its Permitted Discretion. Such Grantor shall timely and fully pay and perform its obligations under all leases and other agreements with respect to each leased location or third-party warehouse where any Collateral is or may be located.

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(b)For each Generator Location, such Grantor (i) shall not prepare, draft, amend, supplement or modify any uptime energy, servicing or lease agreement for any Generator Unit in a manner that adversely affects the rights and security interests of the Administrative Agent hereunder, and (ii) with respect to any uptime energy, servicing or lease agreement for any Generator Units entered into by such Grantor after the Third Amendment Effective Date for any Generator Location, such Grantor shall use commercially reasonable efforts to include the following provision or a similar provision reasonably acceptable to the Administrative Agent in each such uptime energy, servicing or lease agreement: “Customer shall provide Flex Leasing Power & Service LLC, a Delaware limited liability company (“Company”), and its officers, representatives, agents and lenders with access to the site at all times while Company’s Equipment is present on Customer’s locations; provided that, any party not an officer, representative or agent of Company shall (i) not enter the site without the prior consent of Customer, which consent shall not be unreasonably withheld; (ii) adhere to the safety requirements of Customer and Company; and (iii) be accompanied by an officer, representative or agent of Company at all times.”

4.14Control Agreements. Subject to Section 5 of the Third Amendment, for each Deposit Account, Securities Account and Commodity Account (other than Excluded Accounts) that such Grantor at any time maintains, such Grantor will, substantially contemporaneously with the opening of such Deposit Account, Securities Account or Commodity Account (other than Excluded Accounts), pursuant to a Control Agreement in form and substance satisfactory to the Administrative Agent, pursuant to which such Control Agreement shall cause the depository bank that maintains such Deposit Account, securities intermediary that maintains such Securities Account, or futures intermediary that maintains such Commodity Account, as applicable, to agree to comply at any time with instructions from the Administrative Agent to such depository bank, securities intermediary or futures intermediary directing the disposition of funds from time to time credited to such Deposit Account, Securities Account or Commodity Account, without further consent of such Grantor, or take such other action as the Administrative Agent may approve in order to perfect the Administrative Agent’s security interest in such Deposit Account, Securities Account or Commodity Account.

4.15Change of Name or Location; etc. Such Grantor shall not (a) change its name as it appears in official filings in the jurisdiction of its incorporation or organization, (b) change its chief executive office, principal place of business or mailing address, (c) change the type of entity that it is, (d) change its organization identification number, if any, issued by its jurisdiction of incorporation or other organization, (e) change its jurisdiction of incorporation or organization, or (f) change the jurisdictions in which its tangible Collateral is located (other than to a jurisdiction in which the Administrative Agent has a current and valid registration against such Grantor), in each case, unless the Administrative Agent shall have received at least thirty (30) days prior written notice of such change and the Administrative Agent shall have acknowledged in writing that either (1) such change will not adversely affect the validity, perfection or priority of the Administrative Agent’s security interest in the Collateral, or (2) any reasonable action requested by the Administrative Agent in connection therewith has been completed or taken (including any action to continue the perfection of any Liens in favour of the Administrative Agent, on behalf of the Secured Parties, in any Collateral), provided that, any new location shall be in Canada. Such Grantor shall not change its fiscal year which currently ends on December 31 without the prior written consent of the Administrative Agent.

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4.16Assigned Contracts. If requested by the Administrative Agent, such Grantor will use commercially reasonable efforts to secure all consents and approvals necessary or appropriate for the assignment to or for the benefit of the Administrative Agent of any Assigned Contract held by such Grantor and to enforce the security interests granted hereunder. Such Grantor shall fully perform all of its obligations under each of its Assigned Contracts, and shall enforce all of its rights and remedies thereunder, in each case, as it deems appropriate in its business judgment; provided however, that such Grantor shall not take any action or fail to take any action with respect to its Assigned Contracts which would cause the termination of an Assigned Contract. Without limiting the generality of the foregoing, such Grantor shall take all action necessary or appropriate to permit, and shall not take any action which would have any materially adverse effect upon, the full enforcement of all indemnification rights under its Assigned Contracts. Such Grantor shall notify the Administrative Agent and the Lenders in writing, promptly after such Grantor becomes aware thereof, of any event or fact which could give rise to a material claim by it for indemnification under any of its Assigned Contracts, and shall diligently pursue such right and report to the Administrative Agent on all further developments with respect thereto. Such Grantor shall deposit into a Deposit Account subject to a Deposit Account Control Agreement, all amounts received by such Grantor as indemnification or otherwise pursuant to its Assigned Contracts. If such Grantor shall fail after the Administrative Agent’s demand to pursue diligently any right under its Assigned Contracts, or if an Event of Default then exists, the Administrative Agent may, and at the direction of the Required Lenders shall, directly enforce such right in its own or such Grantor’s name and may enter into such settlements or other agreements with respect thereto as the Administrative Agent or the Required Lenders, as applicable, shall determine. In any suit, proceeding or action brought by the Administrative Agent for the benefit of the Secured Parties under any Assigned Contract for any sum owing thereunder or to enforce any provision thereof, such Grantor shall indemnify and hold the Administrative Agent and Secured Parties harmless from and against all expense, loss or damage suffered by reason of any defense, setoff, counterclaims, recoupment, or reduction of liability whatsoever of the obligor thereunder arising out of a breach by such Grantor of any obligation thereunder or arising out of any other agreement, indebtedness or liability at any time owing from such Grantor to or in favour of such obligor or its successors. All such obligations of such Grantor shall be and remain enforceable only against such Grantor and shall not be enforceable against the Administrative Agent or the Secured Parties. Notwithstanding any provision hereof to the contrary, such Grantor shall at all times remain liable to observe and perform all of its duties and obligations under its Assigned Contracts, and the Administrative Agent’s or any Secured Party’s exercise of any of their respective rights with respect to the Collateral shall not release such Grantor from any of such duties and obligations. Neither the Administrative Agent nor any Secured Party shall be obligated to perform or fulfill any of such Grantor’s duties or obligations under its Assigned Contracts or to make any payment thereunder, or to make any inquiry as to the nature or sufficiency of any payment or property received by it thereunder or the sufficiency of performance by any party thereunder, or to present or file any claim, or to take any action to collect or enforce any performance, any payment of any amounts, or any delivery of any property.

4.17Additional Grantors.

(a)Domestic Subsidiaries. Each Grantor agrees to cause each Domestic Subsidiary of such Grantor that is required to become a party to the U.S. Security Agreement pursuant to Section 6.13(a) of the Credit Agreement to become a Grantor for all purposes of the U.S. Security Agreement upon execution and delivery by such Subsidiary of an Assumption Agreement in the form of Annex 1 attached to the U.S. Security Agreement.

(b)Non-Domestic Subsidiaries. Each Grantor agrees to cause each Subsidiary incorporated, formed or otherwise organized under the laws of Canada or any province or territory thereof of such Grantor that is permitted to exist under the terms of the Loan Documents and is otherwise required to become a party to this Security Agreement pursuant to the Credit Agreement to become a Grantor for all purposes of this Security Agreement upon execution and delivery by such Subsidiary of an Assumption Agreement in the form of Annex 1 attached hereto.

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4.18ULC Shares. Each Grantor acknowledges that certain of the Collateral of such Grantor may now or in the future consist of ULC Shares, and that it is the intention of the Administrative Agent and each Grantor that neither the Administrative Agent nor any other Secured Party should under any circumstances prior to realization thereon be held to be a “member” or a “shareholder”, as applicable, of a ULC for the purposes of any ULC Laws. Therefore, notwithstanding any provisions to the contrary contained in this Security Agreement, the Credit Agreement or any other Loan Document, where a Grantor is the registered owner of ULC Shares which are Collateral of such Grantor, such Grantor shall remain the sole registered owner of such ULC Shares until such time as such ULC Shares are effectively transferred into the name of the Administrative Agent, any other Secured Party, or any other Person on the books and records of the applicable ULC. Accordingly, each Grantor shall be entitled to receive and retain for its own account any dividend on or other distribution, if any, with respect to such ULC Shares (except for any dividend or distribution comprised of certificated Securities pledged by such Grantor, which shall be delivered to the Administrative Agent to hold hereunder) and shall have the right to vote such ULC Shares and to control the direction, management and policies of the applicable ULC to the same extent as such Grantor would if such ULC Shares were not pledged to the Administrative Agent pursuant hereto. Nothing in this Security Agreement, the Credit Agreement or any other Loan Document is intended to, and nothing in this Security Agreement, the Credit Agreement or any other Loan Document shall, constitute the Administrative Agent, any other Secured Party, or any other Person other than the applicable Grantor, a member or shareholder of a ULC for the purposes of any ULC Laws (whether listed or unlisted, registered or beneficial), until such time as notice is given to such Grantor and further steps are taken pursuant hereto or thereto so as to register the Administrative Agent, any other Secured Party, or such other Person, as specified in such notice, as the holder of the ULC Shares. To the extent any provision hereof would have the effect of constituting the Administrative Agent or any other Secured Party as a member or a shareholder, as applicable, of any ULC prior to such time, such provision shall be severed herefrom and shall be ineffective with respect to ULC Shares which are Collateral of any Grantor without otherwise invalidating or rendering unenforceable this Security Agreement or invalidating or rendering unenforceable such provision insofar as it relates to Collateral of any Grantor which is not ULC Shares. Except upon the exercise of rights of the Administrative Agent to sell, transfer or otherwise dispose of ULC Shares in accordance with this Security Agreement, each Grantor shall not cause or permit, or enable an issuer that is a ULC to cause or permit, the Administrative Agent or any other Secured Party to: (a) be registered as a shareholder or member of such issuer; (b) have any notation entered in their favour in the share register of such issuer; (c) be held out as shareholders or members of such issuer; (d) receive, directly or indirectly, any dividends, property or other distributions from such issuer by reason of the Administrative Agent holding the Liens over the ULC Shares; or (e) act as a shareholder of such issuer, or exercise any rights of a shareholder including the right to attend a meeting of shareholders of such issuer or to vote its ULC Shares.

ARTICLE V
EVENTS OF DEFAULT AND REMEDIES

5.1Events of Default. The occurrence of any one or more of the following events shall constitute an Event of Default hereunder:

(a)Any representation or warranty made by or on behalf of any Grantor under or in connection with this Security Agreement shall be materially false as of the date on which made.

(b)The breach by any Grantor of any of the terms or provisions of Article IV.

(c)The breach by any Grantor (other than a breach which constitutes an Event of Default under any other Section of this Article V) of any of the terms or provisions of this Security Agreement which is not remedied within ten days after such breach.

(d)The occurrence of any “Event of Default” under, and as defined in, the Credit Agreement.

(e)Any Equity Interest which is included within the Collateral shall at any time constitute a Security or the issuer of any such Equity Interest shall take any action to have such interests treated as a Security unless (i) all certificates or other documents constituting such Security have been delivered to the Administrative Agent and such Security constitutes a security for the purposes of the STA of the applicable jurisdiction, whether as a result of actions by the issuer thereof or otherwise, or (ii) the Administrative Agent has entered into a Securities Account Control Agreement with the issuer of such Security or with a securities intermediary relating to such Security and such Security constitutes a security for the purposes of the STA of the applicable jurisdiction, whether as a result of actions by the issuer thereof or otherwise.

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5.2Remedies.

(a)Upon the occurrence of an Event of Default, the Administrative Agent may, or at the direction of the Required Lenders, shall exercise any or all of the following rights and remedies:

(i)those rights and remedies provided in this Security Agreement, the Credit Agreement, or any other Loan Document; provided that, this Section 5.2(a) shall not be understood to limit any rights or remedies available to the Administrative Agent and the Secured Parties prior to an Event of Default;

(ii)those rights and remedies available to a secured party under the PPSA (whether or not the PPSA applies to the affected Collateral) or under any other applicable law (including, without limitation, any law governing the exercise of a bank’s right of setoff or bankers’ lien) when a debtor is in default under a security agreement;

(iii)give notice of sole control or any other instruction under any Control Agreement and take any action therein with respect to such Collateral;

(iv)without notice (except as specifically provided in Section 7.1 or elsewhere herein), demand or advertisement of any kind to any Grantor or any other Person, enter the premises of any Grantor where any Collateral is located (through self-help and without judicial process) to collect, receive, assemble, process, appropriate, sell, lease, assign, grant an option or options to purchase or otherwise dispose of, deliver, or realize upon, the Collateral or any part thereof in one or more parcels at public or private sale or sales (which sales may be adjourned or continued from time to time with or without notice and may take place at any Grantor’s premises or elsewhere), for cash, on credit or for future delivery without assumption of any credit risk, and upon such other terms as the Administrative Agent may deem commercially reasonable;

(v)so long as the Obligations have been accelerated (upon demand or otherwise) pursuant to Section 9.2 of the Credit Agreement, concurrently with written notice to the applicable Grantor, transfer and register in its name or in the name of its nominee the whole or any part of the Pledged Collateral, to exchange certificates or instruments representing or evidencing Pledged Collateral for certificates or instruments of smaller or larger denominations, to exercise the voting and all other rights as a holder with respect thereto, to collect and receive all cash dividends, interest, principal and other distributions made thereon and to otherwise act with respect to the Pledged Collateral as though the Administrative Agent was the outright owner thereof;

(vi)appoint by instrument in writing one or more Receivers of any or all Grantors or any or all of the Collateral of any or all Grantors with such rights, powers and authority (including any or all of the rights, powers and authority of the Administrative Agent under this Security Agreement) as may be provided for in the instrument of appointment or any supplemental instrument, and remove and replace any such Receiver from time to time (it being acknowledged that, to the extent permitted by applicable law, any Receiver appointed by the Administrative Agent will (for purposes relating to the responsibility for the Receiver’s acts or omissions) be considered to be the agent of any such Grantor and not of the Administrative Agent or any of the other Secured Parties); and

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(vii)obtain from any court of competent jurisdiction an order for the appointment of a Receiver of any or all Grantors or of any or all of the Collateral of any or all Grantors.

(b)The Administrative Agent, on behalf of the Secured Parties, may comply with any applicable provincial, territorial or federal law requirements in connection with a disposition of the Collateral and compliance will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral.

(c)The Administrative Agent shall have the right upon any such public sale or sales and, to the extent permitted by law, upon any such private sale or sales, to purchase for the benefit of the Administrative Agent and the Secured Parties, the whole or any part of the Collateral so sold, free of any right of equity redemption, which equity redemption the Grantor hereby expressly releases.

(d)Until the Administrative Agent is able to effect a sale, lease, or other disposition of Collateral, the Administrative Agent shall have the right to hold or use Collateral, or any part thereof, to the extent that it deems appropriate for the purpose of preserving Collateral or its value or for any other purpose deemed appropriate by the Administrative Agent. The Administrative Agent may, if it so elects, seek the appointment of a receiver or keeper to take possession of Collateral and to enforce any of the Administrative Agent’s remedies (for the benefit of the Administrative Agent and Secured Parties), with respect to such appointment without prior notice or hearing as to such appointment.

(e)Notwithstanding the foregoing, neither the Administrative Agent nor any Secured Party shall be required to (i) make any demand upon, or pursue or exhaust any of their rights or remedies against, any Grantor, any other obligor, guarantor, pledgor or any other Person with respect to the payment of the Obligations or to pursue or exhaust any of their rights or remedies with respect to any Collateral therefor or any direct or indirect guarantee thereof, (ii) marshal the Collateral or any guarantee of the Obligations or to resort to the Collateral or any such guarantee in any particular order, or (iii) effect a public sale of any Collateral.

(f)Each Grantor recognizes that the Administrative Agent may be unable to effect a public sale of any or all the Pledged Collateral and may be compelled to resort to one or more private sales thereof in accordance with clause (a) above. Each Grantor also acknowledges that any private sale may result in prices and other terms less favourable to the seller than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall not be deemed to have been made in a commercially unreasonable manner solely by virtue of such sale being private. The Administrative Agent shall be under no obligation to delay a sale of any of the Pledged Collateral for the period of time necessary to permit any Grantor or the issuer of the Pledged Collateral to register such securities for public sale under applicable securities laws, even if the applicable Grantor and the issuer would agree to do so.

5.3Grantor’s Obligations Upon Event of Default. Upon the request of the Administrative Agent after the occurrence and during the continuance of an Event of Default, each Grantor will:

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(a)assemble and make available to the Administrative Agent the Collateral and all books and records relating thereto at any place or places specified by the Administrative Agent, whether at a Grantor’s premises or elsewhere;

(b)permit the Administrative Agent, by the Administrative Agent’s representatives and agents, to enter, occupy and use any premises where all or any part of the Collateral, or the books and records relating thereto, or both, are located, to take possession of all or any part of the Collateral or the books and records relating thereto, or both, to remove all or any part of the Collateral or the books and records relating thereto, or both, and to conduct sales of the Collateral, without any obligation to pay the Grantor for such use and occupancy; and

(c)at its own expense, cause the independent certified public accountants then engaged by each Grantor to prepare and deliver to the Administrative Agent and each Lender, at any time, and from time to time, promptly upon the Administrative Agent’s request, the following reports with respect to the applicable Grantor: (i) a reconciliation of all Accounts; (ii) an aging of all Accounts; (iii) trial balances; and (iv) a test verification of such Accounts.

5.4Grant of Intellectual Property License. For the purpose of enabling the Administrative Agent to exercise the rights and remedies under this Article V, each Grantor hereby (a) grants to the Administrative Agent, for the benefit of the Administrative Agent and the Secured Parties, an irrevocable, nonexclusive license (exercisable without payment of royalty or other compensation to any Grantor) to use, license or sublicense any intellectual property rights now owned or hereafter acquired by such Grantor, and wherever the same may be located, and including in such license access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof and (b) irrevocably agrees that the Administrative Agent may sell any of such Grantor’s Inventory directly to any person, including without limitation persons who have previously purchased the Grantor’s Inventory from such Grantor and in connection with any such sale or other enforcement of the Administrative Agent’s rights under this Security Agreement, may sell Inventory which bears any Trademark owned by or licensed to such Grantor and any Inventory that is covered by any Copyright owned by or licensed to such Grantor and the Administrative Agent may (but shall have no obligation to) finish any work in process and affix any Trademark owned by or licensed to such Grantor and sell such Inventory as provided herein.

ARTICLE VI
ACCOUNT VERIFICATION; ATTORNEY IN FACT; PROXY

6.1Account Verification. The Administrative Agent may at any time, in the Administrative Agent’s own name, in the name of a nominee of the Administrative Agent, or in the name of any Grantor communicate (by mail, telephone, facsimile or otherwise) with the Account Debtors of any such Grantor, parties to contracts with any such Grantor and obligors in respect of Instruments of any such Grantor to verify with such Persons, to the Administrative Agent’s satisfaction, the existence, amount, terms of, and any other matter relating to, Accounts, Instruments, Chattel Paper, payment intangibles and/or other Receivables.

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6.2Authorization for Secured Party to Take Certain Action.

(a)Each Grantor irrevocably authorizes the Administrative Agent at any time and from time to time in the sole discretion of the Administrative Agent and appoints the Administrative Agent as its attorney in fact (i) to execute on behalf of such Grantor as debtor and to file financing statements necessary or desirable in the Administrative Agent’s sole discretion to perfect and to maintain the perfection and priority of the Administrative Agent’s security interest in the Collateral, (ii) to endorse and collect any cash proceeds of the Collateral, (iii) to file a carbon, photographic or other reproduction of this Security Agreement or any financing statement with respect to the Collateral as a financing statement and to file any other financing statement or amendment of a financing statement (which does not add new collateral or add a debtor) in such offices as the Administrative Agent in its sole discretion deems necessary or desirable to perfect and to maintain the perfection and priority of the Administrative Agent’s security interest in the Collateral, (iv) to contact and enter into one or more agreements with the issuers of uncertificated securities which are Pledged Collateral or with securities intermediaries holding Pledged Collateral as may be necessary or advisable to give the Administrative Agent Control over such Pledged Collateral, (v) to apply the proceeds of any Collateral received by the Administrative Agent to the Obligations as provided in Section 2.5(d) of the Credit Agreement, (vi) to discharge past due taxes, assessments, charges, fees or Liens on the Collateral (except for such Liens as are specifically permitted hereunder), (vii) to contact Account Debtors for any reason, (viii) to demand payment or enforce payment of the Receivables in the name of the Administrative Agent or such Grantor and to endorse any and all cheques, drafts, and other instruments for the payment of money relating to the Receivables, (ix) to sign such Grantor’s name on any invoice or bill of lading relating to the Receivables, drafts against any Account Debtor of the Grantor, assignments and verifications of Receivables, (x) to exercise all of such Grantor’s rights and remedies with respect to the collection of the Receivables and any other Collateral, (xi) to settle, adjust, compromise, extend or renew the Receivables, (xii) to settle, adjust or compromise any legal proceedings brought to collect Receivables, (xiii) to prepare, file and sign such Grantor’s name on a proof of claim in bankruptcy or similar document against any Account Debtor of such Grantor, (xiv) to prepare, file and sign such Grantor’s name on any notice of Lien, assignment or satisfaction of Lien or similar document in connection with the Receivables, (xv) to change the address for delivery of mail addressed to such Grantor to such address as the Administrative Agent may designate and to receive, open and dispose of all mail addressed to such Grantor, and (xvi) to do all other acts and things necessary to carry out this Security Agreement; and such Grantor agrees to reimburse the Administrative Agent on demand for any payment made or any expense incurred by the Administrative Agent in connection with any of the foregoing; provided that, this authorization shall not relieve such Grantor of any of its obligations under this Security Agreement, the Credit Agreement or under any other Loan Document.

(b)All acts of said attorney or designee are hereby ratified and approved. The powers conferred on the Administrative Agent, for the benefit of the Administrative Agent and Secured Parties, under this Section 6.2 are solely to protect the Administrative Agent’s interests in the Collateral and shall not impose any duty upon the Administrative Agent or any Secured Party to exercise any such powers. The Administrative Agent agrees that, except for the powers granted in Section 6.2(a)(i) through (vi) and Section 6.2(a)(xvi), it shall not exercise any power or authority granted to it unless an Event of Default has occurred and is continuing.

6.3Proxy. EACH GRANTOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS THE ADMINISTRATIVE AGENT AS ITS PROXY AND ATTORNEY-IN-FACT (AS SET FORTH IN SECTION 6.2 ABOVE) WITH RESPECT TO ITS PLEDGED COLLATERAL, INCLUDING THE RIGHT TO VOTE SUCH PLEDGED COLLATERAL, WITH FULL POWER OF SUBSTITUTION TO DO SO. IN ADDITION TO THE RIGHT TO VOTE ANY SUCH PLEDGED COLLATERAL, THE APPOINTMENT OF THE ADMINISTRATIVE AGENT AS PROXY AND ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF SUCH PLEDGED COLLATERAL WOULD BE ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF SHAREHOLDERS, CALLING SPECIAL MEETINGS OF SHAREHOLDERS AND VOTING AT SUCH MEETINGS). SUCH PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF ANY SUCH PLEDGED COLLATERAL ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON (INCLUDING THE ISSUER OF SUCH PLEDGED COLLATERAL OR ANY OFFICER OR AGENT THEREOF), UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT.

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6.4Nature of Appointment; Limitation of Duty. THE APPOINTMENT OF THE ADMINISTRATIVE AGENT AS PROXY AND ATTORNEY-IN-FACT IN THIS ARTICLE VI IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE DATE ON WHICH THIS SECURITY AGREEMENT IS TERMINATED IN ACCORDANCE WITH SECTION 7.14. NOTWITHSTANDING ANYTHING CONTAINED HEREIN, NEITHER THE ADMINISTRATIVE AGENT, NOR ANY SECURED PARTY, NOR ANY OF THEIR RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES SHALL HAVE ANY DUTY TO EXERCISE ANY RIGHT OR POWER GRANTED HEREUNDER OR OTHERWISE OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE FOR ANY FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO, EXCEPT IN RESPECT OF DAMAGES ATTRIBUTABLE SOLELY TO THEIR OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION; PROVIDED THAT, IN NO EVENT SHALL THEY BE LIABLE FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES.

ARTICLE VII
GENERAL PROVISIONS

7.1Waivers. Each Grantor hereby waives notice of the time and place of any public sale or the time after which any private sale or other disposition of all or any part of the Collateral may be made. To the extent such notice may not be waived under applicable law, any notice made shall be deemed reasonable if sent to the Grantors, addressed as set forth in Article VIII, at least ten days prior to (a) the date of any such public sale or (b) the time after which any such private sale or other disposition may be made. To the maximum extent permitted by applicable law, each Grantor waives all claims, damages, and demands against the Administrative Agent or any Secured Party arising out of the repossession, retention or sale of the Collateral, except such as arise solely out of the gross negligence or willful misconduct of the Administrative Agent or such Secured Party as finally determined by a court of competent jurisdiction. To the extent it may lawfully do so, each Grantor absolutely and irrevocably waives and relinquishes the benefit and advantage of, and covenants not to assert against the Administrative Agent or any Secured Party, any valuation, stay, appraisal, extension, moratorium, redemption or similar laws and any and all rights or defenses it may have as a surety now or hereafter existing which, but for this provision, might be applicable to the sale of any Collateral made under the judgment, order or decree of any court, or privately under the power of sale conferred by this Security Agreement, or otherwise. Except as otherwise specifically provided herein, each Grantor hereby waives presentment, demand, protest or any notice (to the maximum extent permitted by applicable law) of any kind in connection with this Security Agreement or any Collateral.

7.2Limitation on Administrative Agent’s and any Secured Party’s Duty with Respect to the Collateral. The Administrative Agent shall have no obligation to clean-up or otherwise prepare the Collateral for sale. The Administrative Agent and each Secured Party shall use reasonable care with respect to the Collateral in its possession or under its control. Neither the Administrative Agent nor any Secured Party shall have any other duty as to any Collateral in its possession or control or in the possession or control of any agent or nominee of the Administrative Agent or such Secured Party, or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto. To the extent that applicable law imposes duties on the Administrative Agent to exercise remedies in a commercially reasonable manner, each Grantor acknowledges and agrees that it is commercially reasonable for the Administrative Agent (a) to fail to incur expenses deemed significant by the Administrative Agent to prepare Collateral for disposition or otherwise to transform raw material or work in process into finished goods or other finished products for disposition, (b) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain governmental or third party consents for the collection or disposition of Collateral to be collected or disposed of, (c) to fail to exercise collection remedies against Account Debtors or other Persons obligated on Collateral or to remove Liens on or any adverse claims against Collateral, (d) to exercise collection remedies against Account Debtors and other Persons obligated on Collateral directly or through the use of collection agencies and other collection specialists, (e) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (f) to contact other Persons, whether or not in the same business as such Grantor, for expressions of interest in acquiring all or any portion of such Collateral, (g) to hire one or more professional auctioneers to assist in the disposition of Collateral, whether or not the Collateral is of a specialized nature, (h) to dispose of Collateral by utilizing internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capacity of doing so, or that match buyers and sellers of assets, (i) to dispose of assets in wholesale rather than retail markets, (j) to disclaim disposition warranties, such as title, possession or quiet enjoyment, (k) to purchase insurance or credit enhancements to insure the Administrative Agent against risks of loss, collection or disposition of Collateral or to provide to the Administrative Agent a guaranteed return from the collection or disposition of Collateral, or (l) to the extent deemed appropriate by the Administrative Agent, to obtain the services of other brokers, investment bankers, consultants and other professionals to assist the Administrative Agent in the collection or disposition of any of the Collateral. Each Grantor acknowledges that the purpose of this Section 7.2 is to provide non-exhaustive indications of what actions or omissions by the Administrative Agent would be commercially reasonable in the Administrative Agent’s exercise of remedies against the Collateral and that other actions or omissions by the Administrative Agent shall not be deemed commercially unreasonable solely on account of not being indicated in this Section 7.2. Without limitation upon the foregoing, nothing contained in this Section 7.2 shall be construed to grant any rights to any Grantor or to impose any duties on the Administrative Agent that would not have been granted or imposed by this Security Agreement or by applicable law in the absence of this Section 7.2.

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7.3Compromises and Collection of Collateral. The Grantors and the Administrative Agent recognize that setoffs, counterclaims, defenses and other claims may be asserted by obligors with respect to certain of the Receivables, that certain of the Receivables may be or become uncollectible in whole or in part and that the expense and probability of success in litigating a disputed Receivable may exceed the amount that reasonably may be expected to be recovered with respect to a Receivable. In view of the foregoing, each Grantor agrees that the Administrative Agent may at any time and from time to time, if an Event of Default has occurred and is continuing, compromise with the obligor on any Receivable, accept in full payment of any Receivable such amount as the Administrative Agent in its sole discretion shall determine or abandon any Receivable, and any such action by the Administrative Agent shall be commercially reasonable so long as the Administrative Agent acts in good faith based on information known to it at the time it takes any such action.

7.4Secured Party Performance of Debtor Obligations. Without having any obligation to do so, the Administrative Agent may perform or pay any obligation which any Grantor has agreed to perform or pay in this Security Agreement and the Grantors shall reimburse the Administrative Agent for any amounts paid by the Administrative Agent pursuant to this Section 7.4. The Grantors’ obligation to reimburse the Administrative Agent pursuant to the preceding sentence shall constitute Obligations payable on demand.

7.5Specific Performance of Certain Covenants. Each Grantor acknowledges and agrees that a breach of any of the covenants contained in Sections 4.1(d), 4.1(e), 4.3(d), 4.4, 4.5, 4.6, 4.7, 4.8, 4.9, 4.10, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17 or 5.3 will cause irreparable injury to the Administrative Agent and the Secured Parties, that the Administrative Agent and Secured Parties have no adequate remedy at law in respect of such breaches and therefore agrees, without limiting the right of the Administrative Agent or the Secured Parties to seek and obtain specific performance of other obligations of the Grantors contained in this Security Agreement, that the covenants of the Grantors contained in the Sections referred to in this Section 7.5 shall be specifically enforceable against the Grantors.

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7.6Dispositions Not Authorized. No Grantor is authorized to sell or otherwise dispose of the Collateral except as set forth in Section 4.1(d) and notwithstanding any course of dealing between any Grantor and the Administrative Agent or other conduct of the Administrative Agent, no authorization to sell or otherwise dispose of the Collateral (except as set forth in Section 4.1(d)) shall be binding upon the Administrative Agent or the Secured Parties unless such authorization is in writing signed by the Administrative Agent with the consent or at the direction of the Required Lenders.

7.7No Waiver; Amendments; Cumulative Remedies. No delay or omission of the Administrative Agent or any Lender to exercise any right or remedy granted under this Security Agreement shall impair such right or remedy or be construed to be a waiver of any Default or an acquiescence therein, and any single or partial exercise of any such right or remedy shall not preclude any other or further exercise thereof or the exercise of any other right or remedy. No waiver, amendment or other variation of the terms, conditions or provisions of this Security Agreement whatsoever (other than any Amendment or Assumption Agreement) shall be valid unless in writing signed by the Administrative Agent with the concurrence or at the direction of the Lenders required under Section 11.10 of the Credit Agreement and then only to the extent in such writing specifically set forth. All rights and remedies contained in this Security Agreement or by law afforded shall be cumulative and all shall be available to the Administrative Agent and the Secured Parties until the Obligations have been paid in full.

7.8Limitation by Law; Severability of Provisions. All rights, remedies and powers provided in this Security Agreement may be exercised only to the extent that the exercise thereof does not violate any applicable provision of law, and all the provisions of this Security Agreement are intended to be subject to all applicable mandatory provisions of law that may be controlling and to be limited to the extent necessary so that they shall not render this Security Agreement invalid, unenforceable or not entitled to be recorded or registered, in whole or in part. Any provision in this Security Agreement that is held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid without affecting the remaining provisions in that jurisdiction or the operation, enforceability, or validity of that provision in any other jurisdiction, and to this end the provisions of this Security Agreement are declared to be severable.

7.9Reinstatement. This Security Agreement shall remain in full force and effect and continue to be effective should any petition be filed by or against any Grantor for liquidation or reorganization, should any Grantor become insolvent or make an assignment for the benefit of any creditor or creditors or should a receiver or trustee be appointed for all or any significant part of any Grantor’s assets, and shall continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Obligations, whether as a “voidable preference,” “fraudulent conveyance,” or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

7.10Benefit of Agreement. The terms and provisions of this Security Agreement shall be binding upon and inure to the benefit of the Grantors, the Administrative Agent and the Secured Parties and their respective successors and assigns (including all persons who become bound as a debtor to this Security Agreement), except that no Grantor shall have the right to assign its rights or delegate its obligations under this Security Agreement or any interest herein, without the prior written consent of the Administrative Agent. No sales of participations, assignments, transfers, or other dispositions of any agreement governing the Obligations or any portion thereof or interest therein shall in any manner impair the Lien granted to the Administrative Agent, for the benefit of the Administrative Agent and the Secured Parties, hereunder.

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7.11Survival of Representations. All representations and warranties of the Grantors contained in this Security Agreement shall survive the execution and delivery of this Security Agreement.

7.12Taxes and Expenses. Any stamp or transfer taxes payable or ruled payable by federal, provincial or territorial authority in respect of this Security Agreement shall be paid by the Grantors, together with interest and penalties, if any. The Grantors shall reimburse the Administrative Agent for any and all out-of-pocket expenses and internal charges (including reasonable attorneys’, auditors’ and accountants’ fees and reasonable time charges of attorneys, paralegals, auditors and accountants who may be employees of the Administrative Agent) paid or incurred by the Administrative Agent in connection with the preparation, execution, delivery, administration, collection and enforcement of this Security Agreement and in the audit, analysis, administration, collection, preservation or sale of the Collateral (including the expenses and charges associated with any periodic or special audit of the Collateral). Any and all costs and expenses incurred by the Grantors in the performance of actions required pursuant to the terms hereof shall be borne solely by the Grantors.

7.13Headings. The title of and section headings in this Security Agreement are for convenience of reference only and shall not govern the interpretation of any of the terms and provisions of this Security Agreement.

7.14Termination. This Security Agreement shall continue in effect (notwithstanding the fact that from time to time there may be no Obligations outstanding) until (a) the Credit Agreement has terminated pursuant to its express terms and (b) all of the Obligations have been paid and performed in full (or with respect to any outstanding Letters of Credit, a cash deposit or supporting letter of credit has been delivered to the Administrative Agent as required by the Credit Agreement) and no commitments of the Administrative Agent or the Secured Parties which would give rise to any Obligations are outstanding.

7.15Entire Agreement. This Security Agreement embodies the entire agreement and understanding between the Grantors and the Administrative Agent relating to the Collateral and supersedes all prior agreements and understandings between the Grantors and the Administrative Agent relating to the Collateral.

7.16CHOICE OF LAW. THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE PROVINCE OF ALBERTA AND THE FEDERAL LAWS OF CANADA APPLICABLE THEREIN.

7.17CONSENT TO JURISDICTION. EACH GRANTOR HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY COURT SITTING IN THE PROVINCE OF ALBERTA IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT AND EACH GRANTOR HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY SECURED PARTY TO BRING PROCEEDINGS AGAINST ANY GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION.

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7.18WAIVER OF JURY TRIAL. EACH GRANTOR, THE ADMINISTRATIVE AGENT AND EACH SECURED PARTY HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.

7.19Indemnity. Section 11.2 of the Credit Agreement is hereby incorporated by reference mutatis mutandis, as if stated verbatim herein as agreements and obligations of each Grantor.

7.20Counterparts. This Security Agreement may be executed in any number of counterparts, all of which taken together shall constitute one agreement, and any of the parties hereto may execute this Security Agreement by signing any such counterpart. Delivery of an executed counterpart of this Security Agreement by fax or other electronic transmission (e.g. .pdf) shall be effective as delivery of a manually executed counterpart of this Security Agreement.

7.21Lien Absolute. All obligations of each Grantor hereunder, shall be absolute and unconditional irrespective of:

(a)any extension, renewal, settlement, compromise, waiver or release in respect of any of the Obligations, by operation of law or otherwise, or any obligation of any other guarantor of any of the Obligations, or any default, failure or delay, willful or otherwise, in the payment or performance of the Obligations;

(b)any lack of validity or enforceability relating to or against Borrowers, any other Loan Party or any other guarantor of any of the Obligations, for any reason related to the Credit Agreement, any other Loan Document or any other agreement or instrument governing or evidencing any Obligations, or any applicable Law purporting to prohibit the payment by Borrowers, any other Loan Party or any other guarantor of the Obligations of the principal of or interest on the Obligations;

(c)any modification or amendment of or supplement to the Credit Agreement or any other Loan Document;

(d)any change in the time, manner or place of payment of, or in any other term of, all or any part of the Obligations, or any other amendment or waiver of or any consent to any departure from the Credit Agreement, any other Loan Document or any other agreement or instrument governing or evidencing any Obligations, including any increase or decrease in the rate of interest thereon;

(e)any change in the corporate existence, structure or ownership of the Borrowers, any other Loan Party or any other guarantor of any of the Obligations, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting Borrowers, any other Loan Party or any other guarantor of the Obligations, or any of their assets or any resulting release of discharge of any obligation of Borrowers, any other Loan Party or any other guarantor or any of the Obligations;

(f)any present or future law, regulation or order of any jurisdiction (whether of right or in fact) or of any agency thereof purporting to reduce, amend, restructure or otherwise affect any term of any Loan Document or Obligations;

(g)any other setoff, defense or counterclaim whatsoever (in any case, whether based on contract, tort or any other theory) with respect to the Credit Agreement, any other Loan Document, any other agreement or instrument or the transactions contemplated thereby which might constitute a legal or equitable defense available to, or discharge of any Grantor; or

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(h)any other act or omission to act or delay of any kind by Borrowers, any other Loan Party, any other guarantor of the Obligations, the Administrative Agent, any Lender or any other Person or any other circumstance whatsoever which might, but for the provisions of this paragraph, constitute a legal or equitable discharge of any Grantor’s obligations hereunder.

7.22Release. Each Grantor consents and agrees that the Administrative Agent may at any time, or from time to time, in its discretion:

(a)renew, extend or change the time of payment, and/or the manner, place or terms of payment of all or any part of the Obligations; and

(b)exchange, release and/or surrender all or any of the Collateral (including the Pledged Collateral), or any part thereof, by whomsoever deposited, which is now or may hereafter be held by the Administrative Agent in connection with all or any of the Obligations; all in such manner and upon such terms as the Administrative Agent may deem proper, and without notice to or further assent from any Grantor, it being hereby agreed that each Grantor shall be and remain bound upon this Security Agreement, irrespective of the value or condition of any of the Collateral, and notwithstanding any such change, exchange, settlement, compromise, surrender, release, renewal or extension, and notwithstanding also that the Obligations may, at any time, exceed the aggregate principal amount thereof set forth in the Credit Agreement, or any other agreement governing any Obligations.

7.23Intercreditor Agreement. Notwithstanding anything to the contrary contained in this Security Agreement, the Liens, security interests and rights granted pursuant to this Security Agreement shall be subject to the terms, provisions and conditions of, the Intercreditor Agreement. In the event of any conflict between this Security Agreement and the Intercreditor Agreement, the Intercreditor Agreement shall control, and no right, power, or remedy granted to the Administrative Agent hereunder shall be exercised by the Administrative Agent, nor shall any direction be given by the Administrative Agent in contravention of, the Intercreditor Agreement.

ARTICLE VIII
NOTICES

8.1Sending Notices. Any notice required or permitted to be given under this Security Agreement shall be given in accordance with Section 11.11 of the Credit Agreement, with each notice to each Grantor other than the Borrowers being given in the same manner as notice to the Borrowers under the Credit Agreement, provided that such notice shall in each case be sent by mail, telecopier, personal delivery or nationally established overnight courier service, and shall be deemed received (a) when received, if sent by hand or overnight courier service, or mailed by certified or registered mail notices or (b) when sent, if sent by telecopier (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient), in each case addressed to the Grantors at the notice address set forth on Exhibit A, and to the Administrative Agent and the Lenders at the addresses set forth in accordance with Section 11.11 of the Credit Agreement.

8.2Change in Address for Notices. Each of the Grantors, the Administrative Agent and the Lenders may change the address for service of notice upon it by a notice in writing to the other parties.

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ARTICLE IX
THE ADMINISTRATIVE AGENT

Texas Capital Bank, National Association has been appointed Administrative Agent for the Secured Parties hereunder pursuant to Article 10 of the Credit Agreement. It is expressly understood and agreed by the parties to this Security Agreement that any authority conferred upon the Administrative Agent hereunder is subject to the terms of the delegation of authority made by the Secured Parties to the Administrative Agent pursuant to the Credit Agreement, and that the Administrative Agent has agreed to act (and any successor Administrative Agent shall act) as such hereunder only on the express conditions contained in such Article 10. Any successor Administrative Agent appointed pursuant to Article 10 of the Credit Agreement shall be entitled to all the rights, interests and benefits of the Administrative Agent hereunder.

ARTICLE X 

CONSENT TO PLEDGED EQUITY

10.1Each Grantor and each of its Subsidiaries, in its respective capacity as an issuer of Pledged Collateral (in such capacity, an “Issuer”), hereby (a) consents to the grant by each other Grantor to the Administrative Agent, for the benefit of the Secured Parties, of a security interest in and lien on all of the Pledged Collateral, (b) represents to the Administrative Agent that it has no rights of setoff or other claims against any of the Pledged Collateral, (c) acknowledges and agrees that it shall, upon demand by the Administrative Agent, pay to the Administrative Agent, for the benefit of the Secured Parties, any dividends and distributions due to any Grantor in accordance with the terms hereof, and (d) consents to the transfer of such Pledged Collateral to the Administrative Agent or its nominee following an Event of Default and to the substitution of the Administrative Agent or its nominee as a partner in any partnership or as a member in any limited liability company with all the rights and powers related thereto.

10.2Each Grantor hereby authorizes and instructs each Issuer to comply with any instruction received by it from the Administrative Agent in writing that (a) states that an Event of Default has occurred and (b) is otherwise in accordance with the terms of this Security Agreement, without any other or further instructions from such Grantor.

[Signature Pages Follow]

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IN WITNESS WHEREOF, the Grantors and the Administrative Agent have executed this Security Agreement as of the date first above written.

GRANTORS:
FLEX LEASING POWER AND SERVICE ULC
By:
Name:	Darin Romine
Title:	Vice President

[Signature Page to Canadian Pledge and Security Agreement]

ADMINISTRATIVE AGENT:

TEXAS CAPITAL BANK, NATIONAL ASSOCIATION,
as Administrative Agent

By:

Name:

Title:

[Signature Page to Canadian Pledge and Security Agreement]

EX-10.31

Exhibit 10.31

STOCK PLEDGE AGREEMENT

THIS STOCK PLEDGE AGREEMENT (this “Agreement”), dated as of [l], 2021, is made by and among FLEXENERGY POWER SOLUTIONS, LLC, a Delaware limited liability company (the “Pledgor”), and each of RNS FLEX, LLC, a Delaware limited liability company, TRF PLATFORM HOLDINGS, LLC, a Delaware limited liability company, ENERGY SPECIAL SITUATIONS FUND II, L.P., a Delaware limited partnership, and ESS PARTICIPATION FUND II, L.P., a Delaware limited partnership (each, a “Lender” and together, the “Lenders”).

RECITALS:

WHEREAS, Pledgor has issued to each of the Lenders certain Secured Promissory Notes further described on Schedule 1 attached hereto (as amended, restated, supplemented or otherwise modified, the “Notes”) pursuant to which the Lenders have advanced funds to the Pledgor as provided therein;

WHEREAS, pursuant to the terms of the Notes, Pledgor has granted to Lenders a security interest (the “Existing Security Interest”) in certain assets and properties of Pledgor and its subsidiaries, subject to the exclusion and limitations set forth in Section 4 of the Notes and that certain Subordination and Intercreditor Agreement dated as of February 8, 2019 entered into by each of the Lenders in favor of Texas Capital Bank, National Associations (as amended, restated, supplemented or otherwise modified, the “Subordination Agreement”);

WHEREAS, in consideration of the extensions of credit and other accommodations of the Lenders as set forth in the Notes, Pledgor has agreed to pledge and grant a security interest in the Pledged Collateral (as hereinafter defined) as security for the Pledgor’s Secured Obligations (as hereafter define) for the benefit of the Lenders; and

NOW, THEREFORE, in consideration of the credit extended now and in the future by the Lenders to the Pledgor and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

SECTION 1.      Definitions.

(a)            As used in this Agreement, the following terms shall have the following meanings:

“Additional Collateral” means any and all (i) additional capital stock or other equity securities issued by, or interests in, FGS, whether certificated or uncertificated, (ii) warrants, options or other rights entitling Pledgor to acquire any interest in capital stock or other equity securities of or other equity interests in FGS, (iii) securities, property, interest, dividends and other payments and distributions issued in redemption of, in renewal or exchange for, in substitution or upon conversion of, or otherwise on account of, the Pledged Shares or such additional capital stock or other equity securities or other interests in FGS, and (iv) cash and non-cash proceeds of the Pledged Shares of any or all of the foregoing, in each case from time to time received or receivable by, or otherwise paid or distributed to or acquired by, Pledgor.

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“FGS” means FlexEnergy Green Solutions, Inc., a Delaware corporation.

“Pledged Collateral” has the meaning set forth in Section 2(a).

“Pledged Shares” means all of the issued and outstanding shares of the capital stock, whether certificated or uncertificated, of FGS now owned by Pledgor, as more specifically described in Schedule 2.

“Secured Obligations” means all liabilities, indebtedness and obligations (monetary (including post-petition interest, allowed or not) or otherwise) of Pledgor under this Agreement, the Notes or any other document or instrument executed in connection herewith or therewith, in each case howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, now or hereafter existing, or due or to become due.

“UCC” shall mean the Uniform Commercial Code, as in effect from time to time in the State of Delaware or any other applicable jurisdiction.

(b)            Where applicable and except as otherwise defined herein, terms used in this Agreement shall have the meanings assigned to them in the UCC.

SECTION 2.      Termination of Existing Security Interest; Grant of Security Interest.

(a)            The Existing Security Interest in hereby terminated by the Lenders and replaced with the lien and security interest in the Pledged Collateral contemplated by this Agreement. Upon Pledgor’s request, Lenders shall promptly redeliver to Pledgor any of the collateral encumbered by the Existing Security Interest in possession of the Lenders and Lenders shall execute and deliver to Pledgor such documents, instruments and discharges reasonably requested by Pledgor as shall be necessary to evidence termination and discharge of the Existing Security Interest. All liens and security interests at any time granted by Pledgor to secure the Secured Obligations to any Lender are pari passu to the liens and security interests granted by Pledgor to secure the Secured Obligations of the other Lenders. Notwithstanding the foregoing, the security interest granted to Lenders pursuant to this Agreement, as well as the other associated rights of Lenders hereunder, shall be subject to and limited by the terms of the Subordination Agreement.

(b)            As security for the payment and performance of its Secured Obligations, Pledgor hereby pledges to the Lenders, and hereby grants to the Lenders a security interest in all of Pledgor’s right, title and interest in, to and under (i) the Pledged Shares and the Additional Collateral and any certificates and instruments now or hereafter representing the Pledged Shares and the Additional Collateral, (ii) all rights, interests and claims with respect to the Pledged Shares and Additional Collateral, including under any and all related agreements, instruments and other documents, and (iii) all books, records and other documentation of Pledgor related to the Pledged Shares and Additional Collateral, in each case whether presently existing or owned or hereafter arising or acquired and wherever located (collectively, the “Pledged Collateral”).

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(c)            To the extent applicable, Pledgor has delivered to or for the account of the Lenders, all certificates representing the Pledged Shares, which were accompanied by a duly executed assignment in blank substantially in the form of Exhibit A.

(d)            If Pledgor shall become entitled to receive or shall receive any Additional Collateral, Pledgor shall accept any such Additional Collateral as the Lenders’ agent, shall hold it in trust for the Lenders, shall segregate it from other property or funds of Pledgor, and shall deliver all Additional Collateral and all certificates, instruments and other writings representing such Additional Collateral forthwith to or for the account of the Lenders, at the address and to the person or entity to be designated by the Lenders, which shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance reasonably satisfactory to the Lenders, to be held by the Lenders subject to the terms hereof, as part of the Pledged Collateral.

(e)            Pledgor hereby authorizes the Lenders to file at any time and from time to time any financing statements or other similar documents under any applicable laws describing the Pledged Collateral, and Pledgor shall execute and deliver to the Lenders, and Pledgor hereby authorizes the Lenders to file, at any time and from time to time, all amendments to financing statements, assignments, continuation financing statements, termination statements, and other documents and instruments, in form reasonably satisfactory to the Lenders, as the Lenders may reasonably request, to effect a transfer of a perfected first priority security interest in and pledge of the Pledged Collateral to the Lenders pursuant to the UCC and to continue perfected, maintain the priority of or provide notice of the security interest of the Lenders in the Pledged Collateral and to accomplish the purposes of this Agreement.

(f)            Pledgor agrees that this Agreement creates a first priority continuing security interest in and pledge of the Pledged Collateral, which shall remain in effect until terminated in accordance with Section 17.

SECTION 3.      Representations and Warranties. Pledgor represents and warrants to the Lenders that:

(a)            All the Pledged Shares have been, and upon issuance of any Additional Collateral will be, duly and validly issued, and are and will be fully paid and non-assessable.

(b)           With respect to the Pledged Shares, Pledgor is, and with respect to any Additional Collateral, Pledgor will be, the legal record and beneficial owner thereof, and has and will have good and marketable title thereto.

(c)           There are no restrictions on the transferability of the Pledged Collateral to the Lenders or with respect to the foreclosure, transfer or disposition thereof by the Lenders. There are no shareholders agreements, voting trusts, proxy agreements or other agreements or understandings which affect or relate to the voting or giving of written consents with respect to any of the Pledged Collateral.

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(d)           No control agreements exist with respect to any Pledged Collateral other than in favor of the Lenders.

Pledgor agrees that the foregoing representations and warranties shall be deemed to have been made by it on the date of each delivery of Pledged Collateral hereunder.

SECTION 4.      Covenants. Until the Secured Obligations are paid in full, Pledgor agrees that:

(a)            Pledgor will use commercially reasonable efforts, at its own expense, to appear in and defend any action, suit or proceeding which purports to adversely affect its title to, or right or interest in, the Pledged Collateral or the security interest of the Lenders therein and the pledge to the Lenders thereof.

(b)            Pledgor will not enter into any shareholders agreement, voting trust, proxy agreement or other agreement or understanding which affects or relates to the voting or giving of written consents with respect to any of the Pledged Collateral.

SECTION 5.      Administration of the Pledged Collateral.

(a)            Unless an Event of Default (as defined in the Notes) shall have occurred and be continuing, (i) Pledgor shall be entitled to retain for its own account all cash dividends, distributions and other payments with respect to the Pledged Collateral; provided, however that such cash dividends, distributions and other payments shall be used by Pledgor to make payments under the Notes in accordance with the terms thereof, and (ii) Pledgor shall have the right to vote the Pledged Collateral and to retain the power to control the direction, management and policies of FGS to the same extent as Pledgor would if the Pledged Collateral were not pledged to the Lenders pursuant to this Agreement; provided, however, that no vote shall be cast or consent, waiver or ratification given or action taken or proxy given which would have the effect of impairing the security position or security interest of the Lenders as a secured party in respect of the Pledged Collateral or which would alter the voting rights with respect to the stock of FGS in a manner adverse to any Lender as a secured party or be inconsistent with or violate any provision of this Agreement. For greater certainty and for the avoidance of doubt, it shall not be a breach or violation of this Section 5(a) if such vote, waiver, ratification, action or proxy has the effect of decreasing the financial value of the Pledged Collateral. The Lenders shall execute and deliver (or cause to be executed and delivered) to Pledgor all such proxies and other instruments as Pledgor may reasonably request for the purpose of enabling Pledgor to exercise the voting and other rights which it is entitled to exercise.

(b)            Upon and during the continuance of an Event of Default: (i) the Lenders shall be entitled to receive all distributions and payments of any nature with respect to the Pledged Collateral, to be held by the Lenders as part of the Pledged Collateral; (ii) the Lenders shall have the right following prior written notice to Pledgor to vote or consent to take any action with respect to the Pledged Collateral and exercise all rights of conversion, exchange, subscription or any other rights, privileges or options pertaining to the Pledged Collateral as if the Lenders were the absolute owner thereof; and (iii) the Lenders shall have the right, for and in the name, place and stead of Pledgor, to execute endorsements, assignments or other instruments of conveyance or transfer with respect to all or any of the Pledged Collateral, to endorse any checks, drafts, money orders and other instruments relating thereto, to sue for, collect, receive and give acquittance for all moneys due or to become due in connection with the Pledged Collateral and otherwise to file any claims, take any action or institute, defend, settle or adjust any actions, suits or proceedings with respect to the Pledged Collateral, execute any and all such other documents and instruments, and do any and all such acts and things, as the Lenders may deem necessary or desirable to protect, collect, realize upon and preserve the Pledged Collateral, to enforce the Lenders’ rights with respect to the Pledged Collateral and to accomplish the purposes of this Agreement.

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(c)            Distributions and other payments which are received by Pledgor but which it is not entitled to retain as a result of the operation of subsection (b) shall be held in trust for the benefit of the Lenders, be segregated from the other property or funds of Pledgor, and be forthwith paid over or delivered to the Lenders in the same form as so received.

(d)            For the purpose of enabling the Lenders to exercise its rights under this Section 5 or otherwise in connection with this Agreement, Pledgor hereby (i) constitutes and appoints the Lenders (and any of the Lenders’ officers, employees or agents designated by the Lenders) its true and lawful attorney-in-fact, with full power and authority upon the occurrence and during the continuance of an Event of Default to execute any notice, assignment, endorsement or other instrument or document, and to do any and all acts and things for and on behalf of Pledgor, which the Lenders may deem necessary or desirable to protect, collect, realize upon and preserve the Pledged Collateral, to enforce the Lenders’ rights with respect to the Pledged Collateral and to accomplish the purposes hereof, and (ii) revokes all previous proxies with regard to the Pledged Collateral and appoints the Lenders as its proxyholder with respect to the Pledged Collateral to, solely during any time that an Event of Default has occurred and is continuing, attend and vote at any and all meetings of the shareholders of FGS held on or after the date of this proxy and prior to the termination hereof, with full power of substitution to do so and agrees, if so requested, to execute or cause to be executed appropriate proxies therefor as requested by the Lenders. Each such appointment is coupled with an interest and irrevocable so long as the Secured Obligations (other than contingent indemnification obligations for which no claim has been asserted) have not been paid and performed in full. Pledgor hereby ratifies, to the extent permitted by law, all that the Lenders shall lawfully and in good faith do or cause to be done by virtue of and in compliance with this Section 5(d).

SECTION 6.      The Lenders’ Duties. Notwithstanding any provision contained in this Agreement, the Lenders shall have no duty to exercise any of the rights, privileges or powers afforded to it and shall not be responsible to Pledgor or any other person or entity for any failure to do so or delay in doing so. Beyond the exercise of reasonable care to assure the safe custody of the Pledged Collateral while held hereunder and the accounting for moneys actually received by the Lenders hereunder, the Lenders shall have no duty or liability to exercise or preserve any rights, privileges or powers pertaining to the Pledged Collateral.

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SECTION 7.      Remedies.

(a)            Upon and during the continuance of an Event of Default, the Lenders shall have, in addition to all other rights and remedies granted to it in this Agreement or the Notes, all rights and remedies of a secured party under the UCC and other applicable laws. Without limiting the generality of the foregoing, Pledgor agrees that, Upon and during the continuance of an Event of Default, any item of the Pledged Collateral may be sold for cash or on credit or for future delivery without assumption of any credit risk, in any number of lots at the same or different times, by public or private sale, and at such times and on such terms, as the Lenders shall determine; provided, however, that Pledgor shall be credited with the net proceeds of sale only when such proceeds are finally collected by the Lenders in cash. The Lenders shall give Pledgor such notice of any private or public sales as may be required by the UCC or other applicable law. Pledgor recognizes that the Lenders may be unable to make a public sale of any or all of the Pledged Collateral, by reason of prohibitions contained in applicable securities laws or otherwise, and expressly agrees that a private sale to a restricted group of purchasers for investment and not with a view to any distribution thereof shall be considered a commercially reasonable sale. The Lenders shall have the right upon any such public sale, and, to the extent permitted by law, upon any such private sale, to purchase the whole or any part of the Pledged Collateral so sold, free of any right or equity of redemption, which right or equity of redemption Pledgor hereby releases to the extent permitted by law.

(b)            The cash proceeds actually received from the sale or other disposition or collection of Pledged Collateral, and any other amounts received in respect of the Pledged Collateral the application of which is not otherwise provided for herein, shall be applied as contemplated in the Notes. Any surplus thereof which exists after payment and performance in full of the Secured Obligations (other than contingent indemnification obligations for which no claim has been asserted) shall be promptly paid over to Pledgor or otherwise disposed of in accordance with the UCC or other applicable law.

SECTION 8.      Consents and Waivers.

(a)            Pledgor waives, to the fullest extent permitted by law, (i) any right of redemption with respect to the Pledged Collateral, whether before or after sale hereunder, and all rights, if any, of marshalling of the Pledged Collateral or other collateral or security for the Secured Obligations; (ii) any right to require the Lenders (A) to proceed against any person or entity, (B) to exhaust any other collateral or security for any of the Secured Obligations, (C) to pursue any remedy in the Lenders’ power, or (D) to make or give any presentments, demands for performance, notices of nonperformance, protests, notices of protests or notices of dishonor in connection with any of the Pledged Collateral; and (iii) all claims, damages, and demands against the Lenders arising out of the repossession, retention, sale or application of the proceeds of any sale of the Pledged Collateral.

(b)            The Lenders may comply with any applicable law in connection with a disposition of the Pledged Collateral and compliance will not be considered adversely to affect the commercial reasonableness of any sale of the Pledged Collateral. The Lenders may sell the Pledged Collateral without giving any warranties as to the Pledged Collateral. The Lenders may specifically disclaim any warranties of title or the like. This procedure will not be considered adversely to affect the commercial reasonableness of any sale of the Pledged Collateral. If the Lenders sells any of the Pledged Collateral upon credit, Pledgor will be credited only with payments actually made by the purchaser, received by the Lenders and applied to the indebtedness of the purchaser. In the event the purchaser fails to pay for the Pledged Collateral, the Lenders may resell the Pledged Collateral and Pledgor shall be credited with the proceeds of the sale.

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(c)            Pledgor waives any and all notice of the creation, renewal, modification, extension or accrual of the Secured Obligations. The Secured Obligations shall conclusively be deemed to have been created, contracted, incurred and permitted to exist in reliance upon this Agreement. Pledgor waives promptness, diligence, presentment, protest, demand for payment, notice of default, dishonor or nonpayment and all other notices to or upon Pledgor or any other person or entity with respect to the Secured Obligations except as expressly provided in the Notes.

(d)            Pledgor shall not have any right to require the Lenders to obtain or disclose any information with respect to: (i) the financial condition or character of Pledgor or the ability of Pledgor to pay and perform the Secured Obligations; (ii) the Secured Obligations; (iii) other security for any or all of the Secured Obligations; (iv) the existence or nonexistence of any other guarantees of all or any part of the Secured Obligations; or (v) any action or inaction on the part of the Lenders or any other person or entity.

SECTION 9.        Knowing and Explicit Consents and Waivers. Pledgor acknowledges that it has either obtained the advice of legal counsel or has had the opportunity to obtain such advice in connection with the terms and provisions of this Agreement. Pledgor acknowledges and agrees that each of the waivers and consents set forth herein, including those contained in Section 8, are made with full knowledge of their significance and consequences. Additionally, Pledgor acknowledges and agrees that by executing this Agreement, it is waiving certain rights, benefits, protections and defenses to which it may otherwise be entitled under Applicable Law and that all such waivers herein are explicit, knowing waivers. Pledgor further acknowledges and agrees that the Lenders are relying on such waivers in creating the Secured Obligations, and that such waivers are a material part of the consideration which the Lenders are receiving for creating the Secured Obligations.

SECTION 10.      Notices. All notices, requests, demands or other communications pursuant hereunder shall be made at the addresses, in the manner and with the effect provided in the Notes or at such other address as shall have been furnished in writing by any person or entity described above to the party required to give notice hereunder.

SECTION 11.      No Waiver; Cumulative Remedies. No failure on the part of the Lenders to exercise, and no delay in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, remedy, power or privilege preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights and remedies under this Agreement are cumulative and not exclusive of any rights, remedies, powers and privileges that may otherwise be available to the Lenders.

SECTION 12.      Binding Effect; Assignment. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto; provided that Pledgor may not assign or otherwise transfer any of its rights under this Agreement without the prior written consent of the Lenders.

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SECTION 13.      Governing Law; Submission to Jurisdiction.

(a)            THIS AGREEMENT, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE AND MATTERS RELATING TO THE CREATION, VALIDITY, ENFORCEMENT OR PRIORITY OF THE LIENS CREATED BY THIS AGREEMENT, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO THE CONFLICT OF LAWS RULES THEREOF THAT REQUIRE THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION, EXCEPT AS MAY BE REQUIRED BY OTHER MANDATORY PROVISIONS OF APPLICABLE LAW.

(b)            Pledgor hereby submits to the nonexclusive jurisdiction of the United States District Court for the District of Delaware and of any Delaware State court sitting in New Castle, County for the purposes of all legal proceedings arising out of or relating to this Agreement or the transactions contemplated hereby. Pledgor hereby irrevocably waives, to the fullest extent permitted by applicable law, any objection which it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum.

(c)            To the extent Pledgor may, in any action or proceeding arising out of or relating to this Agreement, be entitled under any applicable law to require or claim that the Lenders post security for costs or take similar action, Pledgor hereby irrevocably waives and agrees not to claim the benefit of such entitlement.

SECTION 14.      Entire Agreement; Amendment. This Agreement and the Notes contain the entire agreement of the parties with respect to the subject matter hereof and this Agreement shall not be amended except by the written agreement of the parties hereto.

SECTION 15.      Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under all applicable laws and regulations. If, however, any provision of this Agreement shall be prohibited by or invalid under any such law or regulation in any jurisdiction, it shall, as to such jurisdiction, be deemed modified to conform to the minimum requirements of such law or regulation, or, if for any reason it is not deemed so modified, it shall be ineffective and invalid only to the extent of such prohibition or invalidity without affecting the remaining provisions of this Agreement, or the validity or effectiveness of such provision in any other jurisdiction.

SECTION 16.      Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement.

SECTION 17.      Precedence. In the event of any conflict or inconsistency between the provisions of this Agreement and the provisions of the Notes, the provisions of the Notes shall govern and prevail to resolve the conflict or inconsistency. If, strictly in connection with the interpretation of this Agreement, there is any conflict or inconsistency between the provisions of this Agreement and the Notes and the provisions of the Subordination Agreement, the provisions of the Subordination Agreement shall govern and prevail to the extent required to resolve the conflict or inconsistency.

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SECTION 18.      Sale of Pledged Collateral; Termination. Upon the approval of Pledgor’s governing body, Pledgor shall be entitled to sell all or any portion of the Pledged Collateral in a single transaction or a series of transactions (each, and together, the “Pledged Collateral Sales”); provided, that Pledgor shall use all proceeds from the Pledged Collateral Sales to make payments under the Notes in the manner prescribed under the Notes (i.e. pro rata, in accordance with the outstanding principal balance under each of the Notes). In the event of a Pledged Collateral Sale and upon the request of Pledgor, Lenders shall promptly redeliver to Pledgor all of the Pledged Collateral subject to a Pledged Collateral Sale that is in the Lenders’ possession and shall execute and deliver to Pledgor such documents, instruments and discharges reasonably requested by Pledgor as shall be necessary to evidence termination and discharge of all security interests given by Pledgor to the Lenders hereunder with respect to such Pledged Collateral. Upon payment in full of the Secured Obligations, this Agreement (including any provision providing for the appointment of the Lenders as attorney-in-fact for Pledgor) and the security interests created under this Agreement shall automatically terminate and the Lenders shall promptly redeliver to Pledgor all of the Pledged Collateral in the Lenders’ possession and shall execute and deliver to Pledgor such documents, instruments and discharges reasonably requested by Pledgor as shall be necessary to evidence termination and discharge of all security interests given by Pledgor to the Lenders hereunder.

***Remainder of page intentionally left blank***

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement, as of the date first above written.

FLEXENERGY POWER SOLUTIONS, LLC,

a Delaware limited liability company

By

Name:

Title:

RNS FLEX, LLC

By: RNS Management, LLC, its Manager

By:

Name: Thomas R. Denison

Title: Manager

ENERGY SPECIAL SITUATIONS FUND II, L.P.,

By: Energy Special Situations Fund Management II, LLC, its general partner

By:

Name: Jonathan S. Linker

Title: Manager

ESS PARTICIPATION FUND II, L.P.,

By: Energy Special Situations Fund Management II, LLC, its general partner

By:

Name: Jonathan S. Linker

Title: Manager

TRF PLATFORM HOLDINGS, LLC

By: Intervale Capital Fund III, L.P., its manager

    By: Intervale Capital GP III, L.P., its general partner

       By: Intervale Capital Associates III LLC, its general partner

By:

Name: Christine Smoragiewicz

Title: Authorized Person

[Signature page to Stock Pledge Agreement]

SCHEDULE 1
to the Stock Pledge Agreement

NOTES

ESS Participation Fund II, L.P.

The following Notes issued in 2016:

(i) the Secured Promissory Note, issued on January 6, 2016, in respect of an Advanced Amount of $43,000.00

(ii) the Secured Promissory Note, issued on April 15, 2016, in respect of an Advanced Amount of $14,333.33

(iii) the Secured Promissory Note, issued on July 12, 2016, in respect of an Advanced Amount of $10,033.33

(iv) the Secured Promissory Note, issued on August 24, 2016, in respect of an Advanced Amount of $7,166.67

(v) the Secured Promissory Note, issued on October 18, 2016, in respect of an Advanced Amount of $5,733.33

(vi) the Secured Promissory Note, issued on November 2, 2016, in respect of an Advanced Amount of $11,466.67

(vii) the Secured Promissory Note, issued on November 30, 2016 in respect of an Advanced Amount of $4,299.98

(viii) the Secured Promissory Note, issued on December 16, 2016 in respect of an Advanced Amount of $4,299.98

and the following Notes issued in 2017:

(i) the Secured Promissory Note, issued on January 6, 2017, in respect of an Advanced Amount of $4,299.98

(ii) the Secured Promissory Note, issued on January 26, 2017, in respect of an Advanced Amount of $5,733.33

(iii) the Secured Promissory Note, issued on January 26, 2017, in respect of an Advanced Amount of $8,026.67

(iv) the Secured Promissory Note, issued on February 22, 2017 in respect of an Advanced Amount of $18,633.33

(v) the Secured Promissory Note, issued on February 22, 2017 in respect of an Advanced Amount of $5,733.33

(vi) the Secured Promissory Note, issued on April 20, 2017 in respect of an Advanced Amount of $9,316.67

(vii) the Secured Promissory Note, issued on May 9, 2017 in respect of an Advanced Amount of $5,016.67

(viii) the Secured Promissory Note, issued on June 26, 2017 in respect of an Advanced Amount of $7,166.67

(ix) the Secured Promissory Note, issued on July 21, 2017 in respect of an Advanced Amount of $7,166.67

(x) the Secured Promissory Note, issued on August 23, 2017 in respect of an Advanced Amount of $7,166.67

(xi) the Secured Promissory Note, issued on October 4, 2017 in respect of an Advanced Amount of $7,166.67

(xii) the Secured Promissory Note, issued on November 21, 2017 in respect of an Advanced Amount of $14,333.34

and the following Notes issued in 2018:

(i) the Secured Promissory Note, issued on May 31, 2018, in respect of an Advanced Amount of $5,733.33

(ii) the Secured Promissory Note, issued on July 23, 2018, in respect of an Advanced Amount of $4,299.98

(iii) the Secured Promissory Note, issued on August 8, 2018, in respect of an Advanced Amount of $17,199.90

(iv) the Secured Promissory Note, issued on September 14, 2018 in respect of an Advanced Amount of $8,599.95

(v) the Secured Promissory Note, issued on October 12, 2018 in respect of an Advanced Amount of $7,166.62

(vi) the Secured Promissory Note, issued on November 2, 2018 in respect of an Advanced Amount of $7,166.62

(vii) the Secured Promissory Note, issued on November 21, 2018 in respect of an Advanced Amount of $7,166.62

(viii) the Secured Promissory Note, issued on December 27, 2018 in respect of an Advanced Amount of $7,166.62

and the following Notes issued in 2019:

(i) the Secured Promissory Note, issued on January 24, 2019, in respect of an Advanced Amount of $7,166.62

TRF Platform Holdings, LLC

The following Notes originally issued by Borrower to Intervale Capital Fund III, L.P. during 2017:

(i) the Secured Promissory Note, issued on January 11, 2017 in respect of an Advanced Amount of $76,470.57

(ii) the Secured Promissory Note, issued on January 27, 2017 in respect of an Advanced Amount of $157,578.88

(iii) the Secured Promissory Note, issued on February 28, 2017 in respect of an Advanced Amount of $512,131.36

(iv) the Secured Promissory Note, issued on April 20, 2017 in respect of an Advanced Amount of $256,065.68

(v) the Secured Promissory Note, issued on May 9, 2017 in respect of an Advanced Amount of $137,881.52

(vi) the Secured Promissory Note, issued on June 26, 2017 in respect of an Advanced Amount of $196,973.60

(vii) the Secured Promissory Note, issued on July 24, 2017 in respect of an Advanced Amount of $196,973.60

(viii) the Secured Promissory Note, issued on September 5, 2017 in respect of an Advanced Amount of $196,973.60

(ix) the Secured Promissory Note, issued on October 5, 2017 in respect of an Advanced Amount of $196,973.60

(x) the Secured Promissory Note, issued on November 21, 2017 in respect of an Advanced Amount of $393,947.20

and the following Notes originally issued by Borrower to Intervale Capital Co Investment Fund III, L.P. during 2017:

(i) the Secured Promissory Note, issued on January 11, 2017 in respect of an Advanced Amount of $1,815.84

(ii) the Secured Promissory Note, issued on January 27, 2017 in respect of an Advanced Amount of $2,421.12

(iii) the Secured Promissory Note, issued on February 28, 2017 in respect of an Advanced Amount of $7,868.64

(iv) the Secured Promissory Note, issued on April 20, 2017 in respect of an Advanced Amount of $3,934.32

(v) the Secured Promissory Note, issued on May 9, 2017 in respect of an Advanced Amount of $2,118.48

(vi) the Secured Promissory Note, issued on June 26, 2017 in respect of an Advanced Amount of $3,026.40

(vii) the Secured Promissory Note, issued on July 24, 2017 in respect of an Advanced Amount of $3,026.40

(viii) the Secured Promissory Note, issued on September 5, 2017 in respect of an Advanced Amount of $3,026.40

(ix) the Secured Promissory Note, issued on October 5, 2017 in respect of an Advanced Amount of $3,026.40

(x) the Secured Promissory Note, issued on November 21, 2017 in respect of an Advanced Amount of $6,052.80

and the following Notes issued in 2018:

(i) the Secured Promissory Note, issued on May 31, 2018, in respect of an Advanced Amount of $160,000.00

(ii) the Secured Promissory Note, issued on July 26, 2018, in respect of an Advanced Amount of $120,000.00

(iii) the Secured Promissory Note, issued on August 9, 2018, in respect of an Advanced Amount of $480,000.00

(iv) the Secured Promissory Note, issued on September 18, 2018 in respect of an Advanced Amount of $240,000.00

(v) the Secured Promissory Note, issued on October 16, 2018 in respect of an Advanced Amount of $200,000.00

(vi) the Secured Promissory Note, issued on November 7, 2018 in respect of an Advanced Amount of $200,000.00

(vii) the Secured Promissory Note, issued on November 28, 2018 in respect of an Advanced Amount of $200,000.00

(viii) the Secured Promissory Note, issued on December 27, 2018 in respect of an Advanced Amount of $200,000.00

and the following Notes issued in 2019:

(i) the Secured Promissory Note, issued on January 24, 2019, in respect of an Advanced Amount of $200,000.00

(ii) the Secured Promissory Note, issued on March 7, 2019, in respect of an Advanced Amount of $533,333.33

(iii) the Secured Promissory Note, issued on June 21, 2019, in respect of an Advanced Amount of $533,333.33

(iv) the Secured Promissory Note, issued on August 27, 2019, in respect of an Advanced Amount of $1,066,666.67

(v) the Secured Promissory Note, issued on October 8, 2019, in respect of an Advanced Amount of $400,000.00

(vi) the Secured Promissory Note, issued on November 5, 2019, in respect of an Advanced Amount of $1,333,333.33

(vii) the Secured Promissory Note, issued on May 6, 2020, in respect of an Advanced Amount of $266,666.67

(viii) the Secured Promissory Note, issued on June 18, 2020, in respect of an Advanced Amount of $160,000.00

RNS Flex, LLC

The following Notes issued in 2017:

(i) the Secured Promissory Note, issued on January 11, 2017, in respect of an Advanced Amount of $11,649.61

(ii) the Secured Promissory Note, issued on March 16, 2017, in respect of an Advanced Amount of $355,000.00

(iii) the Secured Promissory Note, issued on April 20, 2017, in respect of an Advanced Amount of $227,500.00

(iv) the Secured Promissory Note, issued on May 9, 2017, in respect of an Advanced Amount of $122,500.00

(v) the Secured Promissory Note, issued on June 19, 2017, in respect of an Advanced Amount of $175,000.00

(vi) the Secured Promissory Note, issued on July 21, 2017, in respect of an Advanced Amount of $175,000.00

(vii) the Secured Promissory Note, issued on August 23, 2017, in respect of an Advanced Amount of $175,000.00

(viii) the Secured Promissory Note, issued on October 4, 2017, in respect of an Advanced Amount of $175,000.00

(ix) the Secured Promissory Note, issued on November 30, 2017, in respect of an Advanced Amount of $350,000.00

and the following Notes issued in 2018:

(i) the Secured Promissory Note, issued on May 31, 2018, in respect of an Advanced Amount of $140,000.00

(ii) the Secured Promissory Note, issued on July 25, 2018, in respect of an Advanced Amount of $105,000.00

(iii) the Secured Promissory Note, issued on August 8, 2018, in respect of an Advanced Amount of $420,000.00

(iv) the Secured Promissory Note, issued on September 17, 2018 in respect of an Advanced Amount of $210,000.00

(v) the Secured Promissory Note, issued on October 15, 2018 in respect of an Advanced Amount of $175,000.00

(vi) the Secured Promissory Note, issued on November 2, 2018 in respect of an Advanced Amount of $175,000.00

(vii) the Secured Promissory Note, issued on November 29, 2018 in respect of an Advanced Amount of $175,000.00

(viii) the Secured Promissory Note, issued on December 28, 2018 in respect of an Advanced Amount of $175,000.00

and the following Notes issued in 2019:

(i) the Secured Promissory Note, issued on January 30, 2019, in respect of an Advanced Amount of $175,000.00

(ii) the Secured Promissory Note, issued on March 7, 2019, in respect of an Advanced Amount of $466,666.67

(iii) the Secured Promissory Note, issued on June 26, 2019, in respect of an Advanced Amount of $466,666.67

(iv) the Secured Promissory Note, issued on September 5, 2019, in respect of an Advanced Amount of $933,333.33

(v) the Secured Promissory Note, issued on October 24, 2019, in respect of an Advanced Amount of $350,000.00

(vi) the Secured Promissory Note, issued on November 5, 2019, in respect of an Advanced Amount of $1,166,666.67

(vii) the Secured Promissory Note, issued on May 14, 2020, in respect of an Advanced Amount of $233,333.33

(viii) the Secured Promissory Note, issued on June 30, 2020, in respect of an Advanced Amount of $140,000.00

Energy Special Situations Fund II, L.P.

The following Notes issued in 2016:

(i) the Secured Promissory Note, issued on January 6, 2016, in respect of an Advanced Amount of $707,000.00

(ii) the Secured Promissory Note, issued on April 15, 2016, in respect of an Advanced Amount of $235,666.67

(iii) the Secured Promissory Note, issued on July 12, 2016, in respect of an Advanced Amount of $164,966.67

(iv) the Secured Promissory Note, issued on August 24, 2016, in respect of an Advanced Amount of $117,833.33

(v) the Secured Promissory Note, issued on October 18, 2016, in respect of an Advanced Amount of $94,266.67

(vi) the Secured Promissory Note, issued on November 2, 2016, in respect of an Advanced Amount of $188,533.33

(vii) the Secured Promissory Note, issued on November 30, 2016 in respect of an Advanced Amount of $70,700.02

(viii) the Secured Promissory Note, issued on December 16, 2016 in respect of an Advanced Amount of $70,700.02

and the following Notes issued in 2017:

(i) the Secured Promissory Note, issued on January 6, 2017, in respect of an Advanced Amount of $70,700.02

(ii) the Secured Promissory Note, issued on January 26, 2017, in respect of an Advanced Amount of $94,266.67

(iii) the Secured Promissory Note, issued on January 26, 2017, in respect of an Advanced Amount of $131,973.33

(iv) the Secured Promissory Note, issued on February 22, 2017 in respect of an Advanced Amount of $306,366.67

(v) the Secured Promissory Note, issued on February 22, 2017 in respect of an Advanced Amount of $94,266.67

(vi) the Secured Promissory Note, issued on April 20, 2017 in respect of an Advanced Amount of $153,183.33

(vii) the Secured Promissory Note, issued on May 9, 2017 in respect of an Advanced Amount of $82,483.33

(viii) the Secured Promissory Note, issued on June 26, 2017 in respect of an Advanced Amount of $117,833.33

(ix) the Secured Promissory Note, issued on July 21, 2017 in respect of an Advanced Amount of $117,833.33

(x) the Secured Promissory Note, issued on August 23, 2017 in respect of an Advanced Amount of $117,833.33

(xi) the Secured Promissory Note, issued on October 4, 2017 in respect of an Advanced Amount of $117,833.33

(xii) the Secured Promissory Note, issued on November 21, 2017 in respect of an Advanced Amount of $235,666.66

and the following Notes issued in 2018:

(i) the Secured Promissory Note, issued on May 31, 2018, in respect of an Advanced Amount of $94,266.67

(ii) the Secured Promissory Note, issued on July 23, 2018, in respect of an Advanced Amount of $70,700.02

(iii) the Secured Promissory Note, issued on August 8, 2018, in respect of an Advanced Amount of $282,800.10

(iv) the Secured Promissory Note, issued on September 14, 2018 in respect of an Advanced Amount of $141,400.05

(v) the Secured Promissory Note, issued on October 12, 2018 in respect of an Advanced Amount of $117,833.38

(vi) the Secured Promissory Note, issued on November 2, 2018 in respect of an Advanced Amount of $117,833.38

(vii) the Secured Promissory Note, issued on November 21, 2018 in respect of an Advanced Amount of $117,833.38

(viii) the Secured Promissory Note, issued on December 27, 2018 in respect of an Advanced Amount of $117,833.38

and the following Notes issued in 2019 (collectively, the “2019 Notes”):

(i) the Secured Promissory Note, issued on January 24, 2019, in respect of an Advanced Amount of $117,833.38

SCHEDULE 2
to the Stock Pledge Agreement

PLEDGED SHARES

Common stock of FGS being represented by stock certificates as follows:

Certificate No.   Certificate Date No. of Shares

EXHIBIT A
to the Stock Pledge Agreement

STOCK POWER
(see attached)

Exhibit A to Stock Pledge Agreement

ASSIGNMENT SEPARATE FROM CERTIFICATE 

(Stock Power)

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto ______________________________, [________________] shares of common stock of FlexEnergy Green Solutions, Inc., a Delaware corporation, standing in its name on the books of the corporation represented by certificate number(s) [________]. The undersigned does hereby irrevocably constitute and appoint _______________________________________________ to transfer said stock on the books of the corporation with full power of substitution in the premises.

DATED effective as of _______________________, 2021.

FLEXENERGY POWER SOLUTIONS, LLC
By:
	Name:
	Title:

EX-21.1

Exhibit 21.1

FLEXENERGY GREEN SOLUTIONS, INC.

SUBSIDIARIES OF THE REGISTRANT

 

Name of Subsidiary	State or Other Jurisdiction of Incorporation or Organization
FlexEnergy, Inc.	Delaware
Flex Leasing Power & Service LLC	Delaware
FlexEnergy Energy Systems, Inc.	Delaware
FlexEnergy Support Services, Inc.	Delaware
Flex Power Co.	Delaware
Flex Leasing Power and Service ULC	Alberta, Canada

EX-23.1

Exhibit 23.1

CONSENTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the use in this Registration Statement on Form S-1 of our report dated June 4, 2021, relating to the financial statements of FlexEnergy Green Solutions, Inc. We also consent to the reference to us under the heading “Experts” in such Registration Statement.

/s/ Deloitte & Touche LLP

Hartford, Connecticut

October 7, 2021

CONSENTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the use in this Registration Statement on Form S-1 of our report dated June 4, 2021, relating to the financial statements of FlexEnergy, Inc. and Flex Leasing Power & Services, LLC. We also consent to the reference to us under the heading “Experts” in such Registration Statement.

/s/ Deloitte & Touche LLP

Hartford, Connecticut

October 7, 2021