FLEX POWER GENERATION, INC.

 

November 12, 2012

 

FlexEnergy, Inc.

9400 Toledo Way

Irvine, California 92618

Attention: Jay Mitchell, CEO

 

Dear Jay:

 

FlexEnergy, Inc., a Delaware corporation (“FlexEnergy”), FlexEnergy Energy
Systems, Inc., a Delaware corporation (“FEES”; FEES and FlexEnergy collectively
referred to as “Flex”), and Flex Power Generation, Inc. (“FPG”) are entering
into that certain Contribution Agreement dated the same date hereof (the
“Contribution Agreement”).

 

FPG agrees that, to the extent that any of the following result in any
liabilities or obligations with respect to Flex (“Contingent Flex Liabilities”),
those liabilities and obligations shall be deemed to be Assumed Liabilities (as
defined in the Contribution Agreement) effective as of the date hereof and shall
be subject to indemnification as provided in Section 5 of the Contribution
Agreement, and contracts referenced below shall be deemed to have been assigned
to and assumed by FPG effective as of the date hereof:

 

(i)           the Flex-Microturbine System Development and License Agreement
dated September 17, 1999, as supplemented by that certain Supplemental
Agreement, dated September 22, 2000, executed by Edan Prabhu, Inc., a California
corporation formerly known as FlexEnergy, Inc. (“EPI”) and Capstone Turbine
Corporation;

 

(ii)           Agreement, dated May 19, 2000, between FlexEnergy, Inc. and the
California State Energy Resources Conservation and Development Commission; and

 

(iii)          any other liabilities or obligations of EPI, not already included
as Assumed Liabilities.

 

Section 7 of the Contribution Agreement is incorporated into this side-letter.

 

  Flex Power Generation, Inc.       By:     Name:      Title:  

 

ACKNOWLEDGED AND AGREED TO BY:       FlexEnergy, Inc.         By:       James M.
Mitchell, President/CEO