Exhibit 10.3


 


 


December
26, 2015


 


CONFIDENTIAL


 


Ener-Core,
Inc.

9400 Toledo Way


Irvine,
CA 92618

Attention: Domonic J. Carney, Chief Financial Officer


 


Re:
Proposed Equity Offering


 


Dear
Mr. Carney:


 


This
letter (the “Agreement”) will confirm the basis upon which Ener-Core, Inc. and/or its successor designation(s)
(“Client”) has engaged Northland Securities, Inc. (together with its affiliates, control persons, officers,
directors, employees and agents, “Northland”) and Lake Street Capital Markets (together with its affiliates,
control persons, officers, directors, employees and agents, “Lake Street”, and together with Northland, the
“Bookrunners”) in connection with a private placement of securities of Client (the “Securities”).
The Securities are expected to take the form of common stock and may include warrants. The transaction shall be referred to as
the “Offering”. ‘Northland Capital Markets’ is the trade name for certain capital markets and investment
banking activities of Northland Securities, Inc., member FINRA/SIPC.


 


The
sale of Securities in the Offering shall be made by Client pursuant to an exemption from the registration requirements of the
Securities Act of 1933.


 


		1.	Services
                                         to be Rendered.
                                         Client hereby appoints the Bookrunners to act as Client’s agent in connection with
                                         the Offering except for sales to Jeneration. The Bookrunners will use reasonable commercial
                                         efforts to offer the Securities, but there is no commitment by the Bookrunners to purchase
                                         or sell any of the Securities. Client acknowledges that it, and not the Bookrunners,
                                         is ultimately responsible for the successful completion of the Offering. Client acknowledges
                                         and agrees that the Bookrunners will be entitled to provide services pursuant to this
                                         Agreement, in whole or in part, through any current or future affiliate or co-agent selected
                                         by the Bookrunners and references to the Bookrunners shall, where the context so requires,
                                         include reference to any such affiliate or co-agent.



 


		2.	Intentionally
                                         Omitted.



 


		3.	Client’s
                                         Responsibilities, Representations and Warranties.
                                         Client and the Bookrunners hereby agree to the following:



 


		(a)	Client
                                         represents and warrants that it will, at all times during the term of this Agreement,
                                         comply in all material respects with all rules and regulations of the U.S. Securities
                                         and Exchange Commission (“SEC”), including, but not limited to, the
                                         rules and regulations promulgated pursuant to Regulation FD (Fair Disclosure) under the
                                         Securities Exchange Act of 1934 (“Exchange Act”) relating to the selective
                                         disclosure of material nonpublic information.



 


 


45
South 7th Street, Suite 2000 ▪ Minneapolis, MN 55402


Tel:
(612)851-9500 ▪ Fax: (612)851-5987


 










     


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		(b)	For
                                         a period of 90 days from the date of this Agreement, Client will give notice to the Bookrunners
                                         of any instance where Client shall sell, contract to sell or otherwise dispose of or
                                         issue any securities of Client, except for any securities sold pursuant to agreements
                                         entered into in connection with the Offering, pursuant to previously issued options or
                                         warrants (or prior commitments to issue options or warrants), any agreements providing
                                         for anti-dilution or other stock purchase or share issuance rights in existence on the
                                         date hereof or entered into in connection with the Offering, any employee benefit or
                                         similar plan of Client in existence on the date hereof or duly adopted hereafter, or
                                         any technology license agreement, strategic alliance or joint venture in existence on
                                         the date hereof.



 


		(c)	The
                                         Bookrunners may rely on any representations, warranties, covenants and opinions made
                                         to investors in the Offering as if such representations, warranties, covenants and opinions
                                         were made to the Bookrunners.



 


		(d)	The
                                         Securities will be offered and sold by Client in compliance with the requirements for
                                         the exemption from registration pursuant to Section 5 of the Securities Act of 1933 and
                                         with all other federal, state and foreign securities laws and regulations. Client will
                                         file appropriate notices with the SEC and with other applicable securities authorities.



 


		(e)	Directly
                                         or through the Presentation (as hereinafter defined) and the securities purchase agreement
                                         (including the related disclosure schedules) to be entered into with investors in the
                                         Offering, Client shall furnish to investors and the Bookrunners all information material
                                         to investors under applicable securities laws, which information will not contain any
                                         untrue statement of a material fact or omit to state a material fact required to be stated
                                         or necessary to make the statements made not misleading; provided, however,
                                         that any statement included in the Presentation that is deemed modified or superseded
                                         to the extent that a statement in an Exchange Act report that is subsequently filed modifies
                                         or replaces such statement shall not be deemed to constitute a part of the Presentation.
                                         The Bookruners will be relying, without assuming responsibility for independent verification,
                                         on the accuracy and completeness of all financial and other information that is and will
                                         be furnished to investors by Client.



 


		(f)	Client
                                         has the requisite power and authority to enter into and perform its obligations under
                                         this agreement. The execution and delivery of this agreement by Client and the consummation
                                         by Client of the transactions contemplated hereby, including, without limitation, the
                                         issuance of the Securities, have been duly authorized by Client’s Board of Directors
                                         and no further filing, consent, or authorization is required by Client, its Board of
                                         Directors or its stockholders. This agreement has been duly executed and delivered by
                                         Client, and constitutes the legal, valid and binding obligations of Client, enforceable
                                         against Client in accordance with its terms, except as such enforceability may be limited
                                         by general principles of equity or applicable bankruptcy, insolvency, reorganization,
                                         moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement
                                         of applicable creditors’ rights and remedies. Any necessary approvals, governmental
                                         and private, will be obtained by Client prior to any closing.



 


		(g)	All
                                         non-GAAP financial information included in the Presentation complies with the requirements
                                         of Item 10 of Regulation S-K under the Securities Act of 1933. There are no known trends
                                         or any known demands, commitments, events or uncertainties that are required to be disclosed
                                         by Items 303(a)(1), (2) and (3) of Regulation S-K that have not been so disclosed. SingerLewak
                                         LLP and Kelly & Company, which have expressed their opinion with respect to the financial
                                         statements of Client and related schedules included in the Presentation, are (i) independent
                                         registered public accounting firms within the meaning of the Securities Act of 1933 and
                                         the rules and regulations thereunder, and (ii) not in violation of the auditor independence
                                         requirements of the Sarbanes-Oxley Act.



 






     


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		(h)	Neither
                                         Client nor any of its subsidiaries, nor any or their directors, officers or employees,
                                         nor, to Client’s knowledge, any agent, affiliate or representative of Client or
                                         its subsidiaries, is an individual or entity that is, or is owned or controlled by an
                                         individual or entity that is: (1) the subject of any sanctions administered or enforced
                                         by the U.S. Department of Treasury’s Office of Foreign Assets Control, the United
                                         Nations Security Council, the European Union, Her Majesty’s Treasury, or other
                                         relevant sanctions authority (collectively, “Sanctions”), nor (2)
                                         located, organized or resident in a country or territory that is the subject of Sanctions
                                         (including, without limitation, Burma/Myanmar, Cuba, Iran, Libya, North Korea, Sudan
                                         and Syria). Neither Client nor any of its subsidiaries will, directly or indirectly,
                                         use the proceeds of the offering, or lend, contribute or otherwise make available such
                                         proceeds to any subsidiary, joint venture partner or other individual or entity: (1)
                                         to fund or facilitate any activities or business of or with any individual or entity
                                         or in any country or territory that, at the time of such funding or facilitation, is
                                         the subject of Sanctions; or (2) in any other manner that will result in a violation
                                         of Sanctions by any individual or entity (including any individual or entity participating
                                         in the offering, whether as underwriter, advisor, investor or otherwise). For the past
                                         five years, neither Client nor any of its subsidiaries has knowingly engaged in, and
                                         is not now knowingly engaged in, any dealings or transactions with any individual or
                                         entity, or in any country or territory, that at the time of the dealing or transaction
                                         is or was the subject of Sanctions.



 


		(i)	Any
                                         third-party statistical and market-related data included in the Presentation is based
                                         on or derived from sources that Client believes to be reliable and accurate in all material
                                         respects.



 


		(j)	No
                                         forward-looking statement (within the meaning of Section 27A of the Securities Act
                                         of 1933 and Section 21E of the Exchange Act) contained in the Presentation has been
                                         made or reaffirmed without a reasonable basis or has been disclosed other than in good
                                         faith.



 


		4.	Fees.
                                         In consideration for its services hereunder, concurrently with the closing of the Offering,
                                         Client shall pay the Bookrunners in cash a fee equal to 5% of the gross proceeds received
                                         from the sale of Securities in the Offering. Northland and Lake Street will employ gross
                                         fixed economics of the Offering on a 60% Northland and 40% Lake Street basis.



 


		5.	Expenses.
                                         In addition to any fees that may be payable to the Bookrunners hereunder pursuant to
                                         the provisions of Section 4, above, and regardless of whether any Offering is proposed
                                         or consummated, Client hereby agrees, from time to time upon the Bookrunners’ request,
                                         to promptly reimburse the Bookrunners for all reasonable third party expenses arising
                                         out of the Offering, including but not limited to travel and related expenses, the costs
                                         of document preparation, production and distribution such as printing, binding and photocopies,
                                         third-party research and database services, and the reasonable fees and disbursements
                                         of independent counsel retained by the Bookrunners; provided, however, that no such individual
                                         expense (other than legal expenses) shall exceed $2,500 and the aggregate of all of the
                                         expenses shall not exceed $30,000, without the prior written consent of Client having
                                         been obtained.



 


		6.	Confidentiality;
                                         Use of Information.
                                         Client acknowledges that this Agreement and all opinions and advice (whether written
                                         or oral) given by the Bookrunners to Client in connection with the engagement are intended
                                         solely for the benefit and use of Client. Client further acknowledges that neither the
                                         terms of this Agreement nor any of the Bookrunners’ opinions or financial advice
                                         will be disclosed to any third party, without the prior written consent of the Bookrunners,
                                         except as required by law. The Bookrunners agree that any non-public information relating
                                         to Client or any potential investor received by the Bookrunners from or at the direction
                                         of Client will be used by the Bookrunners solely for the purpose of performing their
                                         role and that the Bookrunners will maintain the confidentiality thereof. Notwithstanding
                                         the foregoing, the Bookrunners may disclose confidential information hereunder (i) to
                                         such of their employees and advisors as the Bookrunners determine have a need to know
                                         and who are bound to hold such information confidential, and (ii) to the extent necessary
                                         to comply with any order or other action of a court or administrative agency of competent
                                         jurisdiction. Client authorizes the Bookrunners to transmit to the prospective purchasers
                                         of the securities Client’s publicly filed reports filed under the Exchange Act
                                         with the SEC since January 1, 2014, with such exhibits and supplements as may from time
                                         to time be required or appropriate (the “Presentation”). Client represents
                                         and warrants that the Presentation does 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 or previously made not misleading; provided, however,
                                         that any statement included in the Presentation that is deemed modified or superseded
                                         to the extent that a statement in an Exchange Act report that is subsequently filed modifies
                                         or replaces such statement shall not be deemed to constitute a part of the Presentation.
                                         Client will advise the Bookrunners immediately, in writing, of the occurrence of any
                                         event or any other change known to Client which results in the Presentation containing
                                         an untrue statement of a material fact or omitting to state a material fact required
                                         to be stated therein or necessary to make the statements therein or previously made not
                                         misleading.



 






     


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		7.	Due
                                         Diligence.
                                         It is understood that the Bookrunners’ role in the Offering will be subject to
                                         the satisfactory completion of investigation and inquiry into the affairs of Client as
                                         the Bookrunners deem appropriate and necessary under the circumstances (“Due
                                         Diligence”) and the approval of the Bookrunners’ internal committees.
                                         The Bookrunners shall have the right, in their sole discretion, to terminate their involvement
                                         in the Offering if the outcome of the Due Diligence is not to their satisfaction or if
                                         approval of their internal committees is not obtained (“Early Termination”).



 


		8.	Exclusivity.
                                         During the term of this Agreement, Client will not, and will not permit its representatives,
                                         to: (i) contact or solicit institutions, corporations or other entities as potential
                                         purchasers of the Securities; or (ii) pursue any other placement or offering of the Securities
                                         or financing transaction that would be in lieu of the contemplated Offering. Furthermore,
                                         Client agrees that, during the term of this Agreement, all inquiries, whether direct
                                         or indirect, from prospective investors will be referred to the Bookrunners and will
                                         be deemed to have been contacted by the Bookrunners in connection with the Offering.



 


		9.	Term
                                         and Termination of Engagement.
                                         The term of this Agreement shall extend from the date hereof until February 1, 2016 and
                                         will renew upon the mutual consent of the parties on a month-to-month basis thereafter
                                         or until earlier termination under this Section 9. The
                                         Bookrunners’ engagement hereunder shall terminate prior to expiration upon the
                                         earlier to occur of: (i) Early Termination; (ii) the closing of the Offering; or (iii)
                                         the earlier termination of this Agreement by either Client or the Bookrunners at any
                                         time for any reason, upon 30 days written notice to the other party. In the event this
                                         Agreement expires or is terminated prior to the closing of the Offering, the rights and
                                         obligations of the parties shall cease except as set forth in Section 6, the following
                                         paragraph of Section 9 below and Section 10.



 


Notwithstanding
anything to the contrary herein, in the event this Agreement expires or is terminated or Client terminates its engagement of the
Bookrunners prior to the closing of the Offering, Client will reimburse the Bookrunners only for their reasonable out-of-pocket
accountable expenses actually incurred, as per Section 5 of this Agreement. The provisions of this Section 9 and of Sections 3(d),
5, 6, 10, 12, 13, 15 and 18 hereof shall survive such termination.


 


		10.	Indemnification;
                                         Contribution.
                                         In consideration of and as a condition precedent to the Bookrunners undertaking the engagement
                                         contemplated by this letter, Client agrees to the indemnification provisions and other
                                         matters set forth in Annex I, which is incorporated by reference into this Agreement.



 


		11.	Announcement
                                         of Offering.
                                         Client and the Bookrunners acknowledge and agree that the Bookrunners, the other agents
                                         and their counsel may, subsequent to the closing of an Offering, make public their involvement
                                         with Client and utilize without charge Client’s trademarks and logos in publications,
                                         press releases and marketing materials relating to publicizing their involvement. The
                                         other agents and the Bookrunners’ counsel are third-party beneficiaries of this
                                         Section.



 






     


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		12.	Governing
                                         Law; Arbitration.
                                         This Agreement shall be governed by and construed in accordance with the laws of the
                                         State of Minnesota without regard to the conflicts of law provisions thereof. This agreement
                                         contains a predispute arbitration clause. By signing an arbitration agreement, the parties
                                         agree as follows:



 


		●	All
                                         parties to this agreement are giving up the right to sue each other in court, including
                                         the right to a trial by jury, except as provided by the rules of the arbitration forum
                                         in which a claim is filed. 



 


		●	Arbitration
                                         awards are generally final and binding; a party’s ability to have a court reverse
                                         or modify an arbitration award is very limited. 



 


		●	The
                                         ability of the parties to obtain documents, witness statements and other discovery is
                                         generally more limited in arbitration than in court proceedings. 



 


		●	The
                                         arbitrators do not have to explain the reason(s) for their award. 



 


		●	The
                                         panel of arbitrators will typically include a minority of arbitrators who were or are
                                         affiliated with the securities industry. 



 


		●	The
                                         rules of some arbitration forums may impose time limits for bringing a claim in arbitration.
                                         In some cases, a claim that is ineligible for arbitration may be brought in court. 



 


		●	The
                                         rules of the arbitration forum in which the claim is filed, and any amendments thereto,
                                         shall be incorporated into this Agreement. 



 


Any
dispute or controversy arising out of this Agreement or regarding the interpretation, application, or breach of this Agreement
shall be determined by arbitration conducted in accordance with the rules of the Financial Industry Regulatory Authority as then
in effect. Any arbitration award shall be final and binding upon Client and the Bookrunners, and judgment on the award may be
entered in any court having jurisdiction. No person shall bring a putative or certified class action to arbitration, nor seek
to enforce any pre-dispute arbitration agreement against any person who has initiated in court a putative class action; or who
is a member of a putative class who has not opted out of the class with respect to any claims encompassed by the putative class
action until: (i) the class certification is denied; or (ii) the class is decertified; or (iii) the customer is excluded from
the class by the court. Such forbearance to enforce an agreement to arbitrate shall not constitute a waiver of any rights under
this Agreement except to the extent stated herein. Subject to Section 14 hereof, each party will bear its own costs and attorneys’
fees, and will share equally in the fees and expenses of the arbitrator and the arbitration. The proceedings will be conducted
in English. Notwithstanding the foregoing, it is expressly agreed that either party may seek injunctive relief, at any time, in
an appropriate court of law or equity to enforce its rights hereunder.


 


		13.	Reliance
                                         on Others.
                                         Client confirms that it will rely on its own counsel and accountants for legal and accounting
                                         advice.



 


		14.	Attorneys’
                                         Fees.
                                         In the event of any dispute or litigation or other proceeding between the parties with
                                         respect to any provision of this Agreement or arising from the engagement contemplated
                                         under this Agreement, the prevailing party shall be entitled to recover from the non-prevailing
                                         party any and all of the reasonable fees and disbursements of the prevailing party’s
                                         attorney to the extent that they relate to such dispute, litigation, or other proceeding.



 


		15.	No
                                         Partnership.
                                         Client is a sophisticated business enterprise that has retained the Bookrunners for the
                                         limited purposes set forth in this Agreement. The parties acknowledge and agree that
                                         their respective rights and obligations are contractual in nature. Each party disclaims
                                         an intention to impose fiduciary obligations on the other by virtue of the engagement
                                         contemplated by this Agreement.



 






     


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		16.	Research
                                         Matters.
                                         By entering into this Agreement or serving as an agent in the Offering, the Bookrunners
                                         do not provide any promise, either explicitly or implicitly, of favorable or continued
                                         research coverage of Client and Client hereby acknowledges and agrees that the Bookrunners’
                                         selection as an agent for the Offering was in no way conditioned, explicitly or implicitly,
                                         on the Bookrunners providing favorable or any research coverage of Client. In accordance
                                         with FINRA Rule 2711(e), the parties acknowledge and agree that the Bookrunners have
                                         not directly or indirectly offered favorable research, a specific rating or a specific
                                         price target, or threatened to change research, a rating or a price target, to Client
                                         or inducement for the receipt of business or compensation.



 


		17.	Other
                                         Investment Banking Services.
                                         Client acknowledges that the Bookrunners and their affiliates and other agents are securities
                                         firms engaged in securities trading and brokerage activities and providing investment
                                         banking and financial advisory services. In the ordinary course of business, the Bookrunners
                                         and their affiliates may at any time hold long or short positions, and may trade or otherwise
                                         effect transactions, for their own account or the accounts of customers, in Client’s
                                         debt or equity securities, its affiliates or other entities that may be involved in the
                                         transactions contemplated by this Agreement. In addition, the Bookrunners and their affiliates
                                         may from time to time perform various investment banking and financial advisory services
                                         for other clients and customers who may have conflicting interests with respect to Client
                                         or the Offering. Client also acknowledges that the Bookrunners and their affiliates have
                                         no obligation to use in connection with this engagement or to furnish Client, confidential
                                         information obtained from other companies. Furthermore, Client acknowledges that the
                                         Bookrunners may have fiduciary or other relationships whereby the Bookrunners or their
                                         affiliates may exercise voting power over securities of various persons, which securities
                                         may from time to time include securities of Client or others with interests in respect
                                         of any Offering. Client acknowledges that the Bookrunners or such affiliates may exercise
                                         such powers and otherwise perform its functions in connection with such fiduciary or
                                         other relationships without regard to the Bookrunners’ relationship to Client hereunder.



 


		18.	Severability.
                                         If any
                                         term, provision, covenant or restriction herein is held by a court of competent jurisdiction
                                         to be invalid, void or unenforceable or against public policy, the remainder of the terms,
                                         provisions and restrictions contained herein will remain in full force and effect and
                                         will in no way be affected, impaired or invalidated.



 


		19.	Intentionally
                                         Omitted.



 


		20.	Miscellaneous.
                                         Nothing in this Agreement is intended to obligate or commit the Bookrunners to provide
                                         any services other than as set forth above. This Agreement may be executed by electronic
                                         or facsimile signature and in counterparts, each of which shall be deemed an original,
                                         but which together shall be considered a single instrument. This Agreement constitutes
                                         the entire agreement between the parties hereto, and supersedes all prior agreements
                                         and understandings (both written and oral) of the parties hereto with respect to the
                                         subject matter hereof, and cannot be amended or otherwise modified except in writing
                                         executed by the parties hereto. Notwithstanding the foregoing, the parties acknowledge
                                         and agree that certain letter agreement dated June 10, 2015 remains in full force and
                                         effect with the termination date extended until February 28, 2016, which may be extended
                                         beyond such date per the terms of such agreement. Neither party may assign its rights
                                         or delegate its obligations hereunder without the prior written consent of the other
                                         party. Client and the Bookrunners represent and warrant that each has the requisite power
                                         and authority to enter into and carry out the terms and provisions of this Agreement
                                         and that the execution, delivery and performance of this Agreement does not breach or
                                         conflict with any agreement, document or instrument to which it is a party or bound.



 


[Remainder
of page left blank intentionally; signature page follows]


 






     


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If
you are in agreement with the foregoing, please sign where indicated below, whereupon this Agreement shall become effective as
of the date hereof.


 





	 	Sincerely,
	 	 	 
	 	Northland
    Securities, Inc.
	 	 	 
	 	By:	/s/
    Shawn D. Messner
	 	 	Shawn
    D. Messner
	 	 	Head
    of Energy, Investment Banking
	 	 	 
	 	Lake
    Street Capital Markets
	 	 	 
	 	By:	/s/
Thomas C. Cullum Jr.
	 	Name:	Thomas C. Cullum Jr.
	 	Its:	CEO




 


Accepted
and agreed to as of the date first written above:


This
agreement contains an arbitration provision in Section 12.


 





	Ener-Core,
    Inc.	 
	 	 	 
	By:	/s/ Domonic
    J. Carney	 
	 	Domonic J.
    Carney	 
	 	Chief
    Financial Officer	 




 






     


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ANNEX
I


 


In
the event that Northland Securities, Inc. or any of its affiliates (collectively, “Northland”), Lake Street
Capital Markets or any of its affiliates (collectively, “Lake Street” and together with Northland, the “Bookrunners”),
the respective shareholders, directors, officers, agents or employees of Northland or Lake Street, or any other person controlling
Northland or Lake Street (collectively, the “Indemnified Persons”) becomes involved in any capacity in any
action, claim, suit, investigation or proceeding, actual or threatened, in connection with or as a result of (i) the engagement
contemplated by the letter agreement to which this Annex I is attached (the “engagement”), or (ii) any untrue
statement or alleged untrue statement of a material fact contained in any offering materials, including but not limited to any
registration statement, prospectus and any prospectus supplement used to offer securities of Client in a transaction subject to
the engagement as such materials may be amended or supplemented (and including but not limited to any documents deemed to be incorporated
therein by reference) (collectively, the “Offering Materials”), or any omission or alleged omission to state
therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they
were made, not misleading, Client will reimburse such Indemnified Person for its reasonable legal and other expenses (including
without limitation the reasonable costs and expenses incurred in connection with investigating, preparing for and responding to
third party subpoenas or enforcing the engagement) incurred in connection therewith as such expenses are incurred; provided,
however, that with respect to clause (i) above if it is finally determined by a court or arbitral tribunal in any such
action, claim, suit, investigation or proceeding that any loss, claim, damage or liability of the Bookrunners or any other Indemnified
Person has resulted primarily and directly from the gross negligence or willful misconduct of the Bookrunners or any other Indemnified
Person, then the Bookrunners will repay such portion of reimbursed amounts that is attributable to expenses incurred in relation
to the act or omission of the Bookrunners or any other Indemnified Person which is the subject of such determination. Client will
also indemnify and hold harmless each Indemnified Person from and against any losses, claims, damages or liabilities (including
actions or proceedings in respect thereof) (collectively, “Losses”) related to or arising out of (i) the engagement,
or (ii) any untrue statement or alleged untrue statement of a material fact contained in the Offering Materials, or any omission
or alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except, with respect to clause (i) above, to the extent any such Losses are finally
determined by a court or arbitral tribunal to have resulted primarily and directly from the willful misconduct or gross negligence
of the Bookrunners or any other Indemnified Person.


 


If
such indemnification is for any reason not available or insufficient to hold an Indemnified Person harmless (except by reason
of the gross negligence or willful misconduct of the Bookrunners (as described above), Client and the Bookrunners shall contribute
to the Losses involved in such proportion as is appropriate to reflect the relative benefits received (or anticipated to be received)
by Client, on the one hand, and by the Bookrunners and/or any other Indemnified Person, on the other hand, with respect to the
engagement or, if such allocation is determined by a court or arbitral tribunal to be unavailable, in such proportion as is appropriate
to reflect other equitable considerations such as the relative fault of Client on the one hand and of the Bookrunners and/or any
other Indemnified Person on the other hand; provided, however, that in no event shall the amounts to be contributed
by the Bookrunners exceed the fees actually received by the Bookrunners in the engagement. Relative benefits to Client, on the
one hand, and the Bookrunners, and/or any other Indemnified Person, on the other hand, shall be deemed to be in the same proportion
as (i) the total value actually paid or received by Client or its security holders, as the case may be, pursuant to the transaction(s),
whether or not consummated, contemplated by the engagement, bears to (ii) all fees actually received by the Bookrunners in the
engagement.


 






     


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Client
also agrees that neither the Bookrunners nor any other Indemnified Person shall have any liability to Client or any person asserting
claims on behalf or in right of Client in connection with or as a result of the engagement or any matter referred to in the engagement,
except to the extent that any Losses incurred by Client are finally determined by a court or arbitral tribunal to have resulted
primarily and directly from the willful misconduct or gross negligence of the Bookrunners or any other Indemnified Person in performing
the services that are the subject of the engagement.


 


Client’s
obligations hereunder shall be in addition to any rights that any Indemnified Person may have at common law or otherwise.


 


The
provisions of this Annex I shall apply to the engagement (including related activities prior to the date hereof) and any modification
thereof and shall remain in full force and effect regardless of the completion or termination of the engagement. If any term,
provision, covenant or restriction herein is held by a court of competent jurisdiction to be invalid, void or unenforceable or
against public policy, the remainder of the terms, provisions and restrictions contained herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.


 


In
the event Client proposes to engage in any sale, distribution or liquidation of all or substantially all of its assets, or any
merger or consolidation and Client is not to be the surviving or resulting corporation or entity in such merger or consolidation,
Client will give prompt prior notice thereof to the Bookrunners and will use commercially reasonable efforts to make proper provision
in a manner reasonably satisfactory to the Bookrunners so that Client’s obligations hereunder are expressly assumed by the
other party or parties to such transaction.