Document:

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/CEORESTRUCTURING AGREEMENT

 

This Restructuring
Agreement (this “Agreement”) is entered into as of November 12, 2012, by and among Flex Power Generation,
Inc., a Delaware corporation (the “Company”), RNS Flex, LLC, a Delaware limited liability company (“RNS”),
SAIL Venture Partners II, L.P., a Delaware limited partnership (“SAIL” or “New Investor”),
Louisiana Sustainability Fund, a Louisiana limited partnership (“LSF”), Jay W. Decker (“Decker”),
Energy Special Situations Fund II, L.P., a Delaware limited partnership (“ESSF”), ESS Participation Fund II,
L.P., a Delaware limited partnership (“EPF”), and Mark McComiskey. RNS, SAIL, LSF, Decker, ESSF, EPF and McComiskey
are collectively referred to herein as the “Existing Investors.” Capitalized terms used herein and not otherwise
defined shall have the respective meaning ascribed thereto in Article I.

 

RECITALS

 

A.           The
Existing Investors received their direct ownership in the Company pursuant to either (i) an issuance of Shares by the Company on
November 12, 2012, or (ii) a spin-off of shares in the Company from FlexEnergy, Inc. on November 12, 2012.

 

B.           The
Company requires an infusion of new capital in order to pay or cover its obligations and operating costs until revenues are such
that the Company is cash flow positive and able to execute on its business plan.

 

C.           SAIL
is willing to provide new capital to the Company, provided that the Existing Investors agree to restructure their equity (other
than Common Stock) positions in the Company.

 

D.           The
Existing Investors are willing to restructure their positions on the terms and conditions set forth in this Agreement provided
that SAIL provides new capital to the Company as set forth in this Agreement.

 

NOW, THEREFORE, in
consideration of the parties’ mutual covenants and agreements set forth herein, and for other good, valuable and adequate
consideration received, the Parties agree as follows:

 

Article
I.

DEFINITIONS

 

For purposes of this
Agreement, the following terms shall have the following meanings:

 

“Affiliate”
means any Person that directly or indirectly, through one or more Persons, controls, is controlled by, or is under common control
with, the Person specified. The term “control” means the possession, directly or indirectly, 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, and the terms “controlled” and “controlling” have meanings correlative thereto.

 

“Agreement”
has the meaning set forth in the introductory paragraph.

 

    	 

    	 

    

 

“Closing”
has the meaning set forth in Section 2.3(a).

 

“Common Stock”
has the meaning set forth in Section 3.1(d)(i).

 

“Contribution
Agreement” means the Contribution Agreement dated November 12, 2012, between the Company, FlexEnergy, Inc. and FlexEnergy
Energy Systems, Inc.

 

“Company”
has the meaning set forth in the introductory paragraph.

 

“Governmental
Authority” means any federal, state, commonwealth or local governmental entity or municipality or subdivision thereof
or any authority, ministry, department, commission, board, bureau or instrumentality thereof, or other similar body exercising
executive, legislative, judicial, regulatory or administrative authority or functions of or pertaining to government, or agency
or any court, tribunal, or judicial or arbitral body.

 

“Investors”
means, collectively, the New Investor and the Existing Investors.

 

“Lien”
means any mortgage, pledge, hypothecation, right or offers, claim, security interest, encumbrance, lease, sublease, license, occupancy
agreement, adverse claim or interest, easement, covenant, encroachment, burden, title defect, title retention agreement, voting
trust agreement, interest, equity, option, lien, right of first refusal, charge or other restrictions or limitations of any nature
whatsoever, other than (i) statutory liens for Taxes or other payments that are not yet due and payable; (ii) statutory liens to
secure obligations to landlords, lessors or renters under leases or rental agreements which are not violated by the current use
or occupancy of any leased real property or the operation of the business of the Company; (iii) deposits or pledges made in connection
with, or to secure payment of, workers’ compensation, unemployment insurance or similar programs mandated by law; (iv) statutory
liens in favor of carriers, warehousemen, mechanics and materialmen, to secure claims for labor, materials or supplies and other
like liens; and (v) statutory purchase money liens.

 

“Material
Adverse Effect” means any change, effect, occurrence, event, state of facts or circumstance that, alone or in conjunction
with other changes, effects, occurrences, events, states of facts or circumstances, has had or could reasonably be expected to
have a material adverse effect on the condition (financial or other), business, results of operations, properties or assets of
the Company.

 

“Note”
means a $500,000 Convertible Note issued by FlexEnergy, Inc. to SAIL on October 15, 2012.

 

“Person”
means any individual, partnership, firm, corporation, limited liability company, association, joint venture, trust, unincorporated
organization or other entity, whether or not a legal entity, or Governmental Authority, as well as any syndicate or group that
would be deemed to be a person under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended.

 

“Refund”
means a return by FlexEnergy, Inc. to SAIL of $500,000 paid by SAIL to FlexEnergy, Inc. for the purchase of the Note, for which
SAIL shall return the Note to FlexEnergy, Inc. for cancellation.

 

    	-2-

    	 

    

 

“Restated
Certificate” means the Company’s Amended and Restated Certificate of Incorporation in the form of Exhibit A.

 

“Securities
Act” means the Securities Act of 1933, as amended.

 

“Series A
Shares” means shares of the Company’s Series A Preferred Stock, $0.001 par value per share.

 

“Series B
Shares” means shares of the Company’s Series B Preferred Stock, $0.001 par value per share.

 

“Series C
Shares” means shares of the Company’s Series C Preferred Stock, $0.001 par value per share.

 

“Series D
Shares” means shares of the Company’s Series D Preferred Stock, $0.001 par value per share.

 

“Shares”
means, collectively, the Series A Shares, the Series B Shares, the Series C Shares and the Series D Shares.

 

“Stockholders
Agreement” means the Stockholders Agreement in the form of Exhibit B.

 

“Taxes”
means any federal, state, local or foreign taxes, including all net income, gross receipts, license, payroll, employment, excise,
severance, stamp, occupation, premium, windfall profits, environmental, customs duties, equity, franchise, profits, withholding,
social security, unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative
or add-on minimum, or other tax of any kind whatsoever, including any interest, penalty or addition thereto imposed by the Internal
Revenue Service or any governmental agency, board, bureau, body, department or authority having or purporting to exercise jurisdiction
with respect to any tax.

 

“Transaction
Documents” means this Agreement, the Stockholders Agreement, the Restated Certificate and all other agreements, documents,
instruments and certificates contemplated hereby.

 

Article
II.

PURCHASE AND SALE OF PREFERRED STOCK

 

2.1           Restated
Certificate. The Company has adopted and filed the Restated
Certificate with the Secretary of State of the State of Delaware on or before the date hereof.

 

2.2           Issuance
of Shares for New Cash Investment and Share Cancellation.
Subject to the terms and conditions of this Agreement, each Investor agrees to purchase at the Closing, and the Company agrees
to sell and issue to each Investor at the Closing the number and series of Shares described in Section 2.3, at the
purchase prices described in Section 2.3.

 

    	-3-

    	 

    

 

2.3           Closing;
Delivery.

 

(a)          The
purchase and sale of the Shares shall take place remotely via the exchange of documents and signatures as described below in this
Section 2.3 (the “Closing”).

 

(b)          At
the Closing, which shall occur concurrently with the execution of this Agreement, the Company shall deliver to the Investors a
certificate representing the Shares being acquired by such Investor against payment of the purchase price therefor either by (i)
wire transfer to a bank account designated by the Company pursuant to Section 2.3(d) or (ii) cancellation of the Shares being
exchanged by such Investor pursuant to Section 2.3(c), as applicable.

 

(c)          At
the Closing, each of the Existing Investors shall acquire the respective Shares as set forth on Schedule 1, which Shares
shall be paid by the surrender and cancellation of the Existing Investor’s Shares owned immediately prior to Closing (and
with respect to RNS, its Common Stock owned immediately prior to Closing) (collectively, “Old Shares”) and the
surrender of its original certificates representing the Old Shares (“Original Old Share Certificates”) for cancellation,
all as illustrated on Schedule 1.

 

(d)          At
the Closing, SAIL shall acquire 2,259,928 Series A Shares for $500,000, which shall be paid by transfer of the Refund amount
from the account of FlexEnergy, Inc. to the account of the Company.

 

Article
III.

REPRESENTATIONS AND WARRANTIES

 

3.1           Representations
and Warranties of the Company. The Company represents
and warrants to the Investors as follows:

 

(a)          Organization,
Good Standing, Corporate Power and Qualification. 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 carry on its business as presently conducted and as proposed to be conducted. The
Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify
would have a Material Adverse Effect.

 

(b)          Subsidiaries.
The Company does not own or control, directly or indirectly, any interest in any other Person. The Company is not a participant
in any joint venture, partnership or similar arrangement.

 

(c)          Authorization.
All corporate action required to be taken by the Company’s Board of Directors and stockholders in order to authorize the
Company to enter into the Transaction Documents, and to issue the Shares and the Common Stock issuable upon conversion of the Shares,
has been taken. All action on the part of the officers of the Company necessary for the execution and delivery of the Transaction
Documents, the performance of all obligations of the Company under the Transaction Documents to be performed, and the issuance
and delivery of the Shares has been taken. The Transaction Documents constitute valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their respective terms except as limited by (i) 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) laws relating to the availability of specific performance, injunctive
relief, or other equitable remedies.

 

    	-4-

    	 

    

 

(d)          Capitalization.
The authorized capital of the Company consists of:

 

(i)          Twenty-two
Million (22,000,000 shares of common stock, $0.001 par value per share (the “Common Stock”), 3,728,881 shares
of which are issued and outstanding. All of the outstanding shares of Common Stock have been duly authorized, are fully paid and
nonassessable and were issued in compliance with all applicable federal and state securities laws.

 

(ii)         Thirty-three
Million (33,000,000) shares of preferred stock, $0.001 par value per share (the “Preferred Stock”), of which
Fourteen Million (14,000,000) shares have been designated Series A Preferred Stock, Five Million (5,000,000) shares have been
designated Series B Preferred Stock, Nine Million One Hundred Thousand (9,100,000) shares have been designated Series C
Preferred Stock and Four Million Nine Hundred Thousand (4,900,000) shares have been designated Series D Preferred Stock, none
of which are issued and outstanding immediately prior to the Closing except as set forth on Schedule 1 as Old Shares. The rights,
privileges and preferences of the Preferred Stock are as stated in the Restated Certificate and as provided by the Delaware General
Corporation Law.

 

(iii)        Schedule 3.1(d)(iii)
sets forth the pro forma capitalization of the Company following the transactions contemplated by this Agreement. Except for (A) the
conversion privileges of the Shares to be issued under this Agreement, and (B) the rights provided in the Stockholders Agreement,
there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal or similar
rights) or agreements, orally or in writing, to purchase or acquire from the Company any shares of Common Stock or Preferred Stock,
or any securities convertible into or exchangeable for shares of Common Stock or Preferred Stock.

 

3.2           Representations
and Warranties of the Investors. Each of the Investors,
severally and not jointly, hereby represents and warrants to the Company as follows:

 

(a)          Authorization.
The Investor has full power and authority to enter into the Transaction Documents to which it is a party. The Transaction Documents
to which the Investor is a party, when executed and delivered by the Investor, will constitute valid and legally binding obligations
of the Investor, enforceable in accordance with their terms, except as limited by (i) applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance, and any other laws of general application affecting enforcement of creditors’ rights generally
or (ii) laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.

 

    	-5-

    	 

    

 

(b)          Purchase
Entirely for Own Account. This Agreement is made with the Investor in reliance upon the Investor’s representation to
the Company, which by the Investor’s execution of this Agreement, the Investor hereby confirms, that the Shares to be acquired
by the Investor will be acquired for investment for the Investor’s own account, not as a nominee or agent, and not with a
view to the resale or distribution of any part thereof, and that the Investor has no present intention of selling, granting any
participation in, or otherwise distributing the same. By executing this Agreement, the Investor further represents that the Investor
does not presently have any contract, undertaking, agreement or arrangement with any Person to sell, transfer or grant participations
to such Person or to any third Person, with respect to any Shares. The Investor has not been formed for the specific purpose of
acquiring Shares.

 

(c)          Disclosure
of Information. The Investor has had an opportunity to discuss the Company’s business, management, financial affairs
and the terms and conditions of the offering of Shares with the Company’s management and has had an opportunity to review
the Company’s facilities. The foregoing, however, does not limit or modify the representations and warranties of the Company
in Section 3.1 or the right of the Investors to rely thereon.

 

(d)          Restricted
Securities. The Investor understands that the Shares being acquired by him, her or it have not been, and will not be, registered
under the Securities Act, by reason of a specific exemption from the registration provisions of the Securities Act which depends
upon, among other things, the bona fide nature of the investment intent and the accuracy of the Investor’s representations
as expressed herein. The Investor understands that the Shares being acquired by him, her or it are “restricted securities”
under applicable U.S. federal and state securities laws and that, pursuant to these laws, the Investor must hold those Shares indefinitely
unless they are registered with the Securities and Exchange Commission and qualified by state authorities, or an exemption from
such registration and qualification requirements is available. The Investor acknowledges that the Company has no obligation to
register or qualify any Shares, or the Common Stock into which they may be converted, for resale. The Investor further acknowledges
that if an exemption from registration or qualification is available, it may be conditioned on various requirements including,
but not limited to, the time and manner of sale, the holding period for the Shares, and on requirements relating to the Company
which are outside of the Investor’s control, and which the Company is under no obligation and may not be able to satisfy.

 

(e)          No
Public Market. The Investor understands that no public market now exists for the Shares, and that the Company has made no assurances
that a public market will ever exist for the Shares.

 

(f)          Legends.
The Investor understands that the Shares being acquired by him, her or it and any securities issued in respect of or exchange for
those Shares, may bear one or all of the following legends:

 

“THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT
AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.”

 

    	-6-

    	 

    

 

Any legend set forth
in, or required by, the other Transaction Documents.

 

Any legend
required by the securities laws of any state to the extent such laws are applicable to the Shares represented by the certificate
so legended.

 

(g)          Accredited
Investor. The Investor is an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the
Securities Act.

 

(h)          Exculpation
Among Investors. The Investor acknowledges that it is not relying upon any Person, other than the Company and its officers
and directors, in making its investment or decision to invest in the Company. The Investor agrees that neither any Investor nor
the respective controlling Persons, officers, directors, partners, agents, or employees of any Investor shall be liable to any
other Investor for any action heretofore taken or omitted to be taken by any of them in connection with the purchase of the Shares.

 

(i)          Residence.
If the Investor is an individual, the Investor resides in the state or province identified in the address of the Investor set forth
in Section 5.10; if the Investor is a partnership, corporation, limited liability company or other entity, the office
or offices of the Investor in which its principal place of business is identified in the address or addresses of the Investor set
forth in Section 5.10.

 

3.3           Representations
and Warranties of the Existing Investors. Each of the Existing Investors, severally with respect to itself only, represents
and warrants to the New Investor as follows:

 

(a)          No
Agreements with the Company. Except for the Transaction Documents and the other Agreements and instruments specifically referred
to in this Agreement, there is no oral or written contract, agreement or any other transaction between any Existing Investor or
any officer, director, employee, stockholder, member or Affiliate thereof, on the one hand, and the Company or any Subsidiary of
the Company, on the other hand.

 

(b)          Stock
Holdings. Upon consummation of the transactions contemplated by the Closing and, it will own the capital stock of the Company
set forth opposite its name on Schedule 1 of the Stockholders Agreement.

 

Article
IV.

CLOSING DELIVERIES

 

4.1           Deliveries
by the Company. At the Closing, the Company shall, unless
delivery of a particular item is waived in writing by the Investors, deliver or cause to be delivered to the Investors the following:

 

(a)          Restated
Certificate. A copy, certified by the Secretary of the State of Delaware, of the Restated Certificate.

 

    	-7-

    	 

    

 

(b)          Bylaws.
A copy, certified by the secretary of the Company, of the Amended and Restated Bylaws in the form of Exhibit C.

 

(c)          Board
and Stockholder Resolutions. Copies, certified by the secretary of the Company, of resolutions adopted by the board of directors
and the stockholders of the Company approving the transactions contemplated by this Agreement, including the spin-off documents
referred to in Section 4.1(e).

 

(d)          Stockholders
Agreement. The Stockholders Agreement, executed by a duly authorized executive officer of the Company.

 

(e)          FPG
Spin-off Documents. A Copy of the Contribution Agreement executed by duly authorized executive officers of the Company, FlexEnergy,
Inc. and FlexEnergy Energy Systems, Inc.

 

(f)          Share
Certificates. Certificates, executed by duly authorized executive officers of the Company, representing the Shares being acquired
at the Closing.

 

(g)          Refund.
Evidence of receipt of transfer by FlexEnergy, Inc. of the Refund amount to the Company’s bank account.

 

4.2           Deliveries
by the Existing Investors. At the Closing, the Existing
Investors shall deliver to the Company the following:

 

(a)          Canceled
Certificates. Original Old Share Certificates, surrendered for cancellation, representing payment for the Shares being acquired
by an Existing Investor at the Closing.

 

(b)          Stockholders
Agreement. The Stockholders Agreement, executed by a duly authorized representative of each Existing Investor.

 

4.3           Deliveries
by New Investor. At the Closing, the New Investor shall
deliver to the Company the following:

 

(a)          Stockholders
Agreement. The Stockholders Agreement, executed by a duly authorized representative of the New Investor.

 

(b)          Refund.
Written authorization from a duly authorized representative of SAIL for the transfer by FlexEnergy, Inc. of the Refund amount to
the Company’s bank account.

 

    	-8-

    	 

    

 

Article
V.

MISCELLANEOUS

 

5.1           Governing
Law. Pursuant to Title 6, Section 2708 of the Delaware
Code, the Parties hereby agree that all issues and questions concerning the construction, validity, enforcement and interpretation
of this Agreement and the Schedules and Exhibits hereto shall be governed by, and construed in accordance with, the laws of the
State of Delaware without giving effect to any choice of law or principles of conflict of law, rules or provisions (whether of
the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the
State of Delaware. In furtherance of the foregoing, the internal law of the State of Delaware shall control the interpretation
and construction of this Agreement (and all schedules and exhibits hereto), even though under that jurisdiction’s choice
of law or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily apply. In reference to Title
6, Section 2708(c) of the Delaware Code, the parties hereby agree that this Agreement involves more than $100,000.

 

5.2           Schedules,
Addenda and Exhibits. All Schedules, addenda and Exhibits
attached to this Agreement, including the Disclosure Schedules, are incorporated herein and shall be part of this Agreement for
all purposes.

 

5.3           Amendments.
This Agreement (including this Section 5.3) may be amended only by a writing executed by all of the parties.

 

5.4           Entire
Agreement. The Transaction Documents set forth the entire
understanding of the parties with respect to the subject matter hereof and supersede all prior contracts, agreements, arrangements,
communications, discussions, representations and warranties, whether oral or written, between or among the parties.

 

5.5           Assignment.
This Agreement shall be binding upon and inure to the benefit of the successors and assigns of each party but, except as otherwise
provided herein, no rights, obligations or liabilities hereunder shall be assignable by any party without the prior written consent
of the other parties, and any purported assignment in violation of this Section 5.5 shall be null and void ab initio.

 

5.6           Waivers.
Any term or provision of this Agreement may be waived, or the time for its performance may be extended, only pursuant to a writing
signed by the party or parties entitled to the term’s or provision’s benefit. Any waiver by any party of any violation
of, breach of or default under any provision of this Agreement by the other parties shall not be construed as or constitute a continuing
waiver of such provision, or a waiver of any other violation of, breach of or default under any other provision of this Agreement.
No failure or delay on the part of any party in the exercise of any right hereunder shall impair such right or be construed to
be waiver of, or acquiescence in, any breach of any representation, warranty or agreement herein, nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or any other right.

 

5.7           Third
Parties. Nothing in this Agreement, expressed or implied,
is intended, or shall be construed, to confer upon or give any Person other than the parties any rights or remedies under or by
reason of this Agreement. Nothing in this Agreement, expressed or implied, is intended to or shall constitute the parties as partners
or participants in a joint venture.

 

5.8           Headings.
The headings in this Agreement are solely for convenience of reference and shall not be given any effect in the construction or
interpretation of this Agreement. All references to Articles, Sections, Exhibits or Schedules refer to Articles, Sections, Exhibits
or Schedules of this Agreement, unless otherwise stated.

 

    	-9-

    	 

    

 

5.9           Interpretation.

 

(a)          No
party, nor its counsel, shall be deemed the drafter of this Agreement for purposes of construing the provisions of this Agreement,
and all provisions of this Agreement shall be construed in accordance with their fair meaning, and not strictly for or against
any party.

 

(b)          In
this Agreement, unless a clear contrary intention appears:

 

(i)          the
masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others whenever the
context so indicates;

 

(ii)         references
to “$” shall be to United States dollars;

 

(iii)        reference
to any Person includes such Person’s successors and assigns;

 

(iv)        “hereunder,”
“hereof,” “hereto,” and words of similar import shall be deemed references to this Agreement;

 

(v)         “including”
means including without limiting the generality of any description preceding such term;

 

(vi)        references
to documents, instruments or agreements shall be deemed to refer as well to all addenda, exhibits, schedules or amendments thereto;
and

 

(vii)       “or”
is disjunctive but not necessarily exclusive.

 

5.10         Notices.
Except as otherwise provided for herein, all notices and other communications provided for hereunder shall be in writing (including
facsimile communication and electronic mail) and mailed (via registered or certified mail), telecopied, e-mailed or delivered:

 

	To RNS:	 	RNS Capital Partners

309 Agate Street

Laguna Beach, CA 92651

Attention: Thomas R. Denison

Telephone: (949) 939-4090

E-mail: thomasdenison@gmail.com
	 	 	 
	With a copy (which shall not constitute notice) to:	 	Rutan & Tucker, LLP

611 Anton Boulevard, 14th Floor

Costa Mesa, CA 92626

Attention: Gregg Amber

Telephone:  (714) 641-3425

E-mail: gamber@rutan.com

 

    	-10-

    	 

    

 

	To the Company:	 	
        Flex Power Generation, Inc.

        9400 Toledo Way

        Irvine, CA 92618

        Attention: Boris Maslov

        Email: boris.maslov@fpgen.com

	 	 	 
	With a copy (which shall not constitute notice) to:	 	Bryan Cave LLP

3161 Michelson Drive, Suite 1500 

Irvine, CA 92612

Attention: Amit Parekh

Telephone: (949) 223-7105

E-mail: amit.parekh@bryancave.com
	 	 	 
	To SAIL:	 	SAIL Venture Partners II, L.P.

3161 Michelson Drive, Suite 750

Irvine, CA 92612

Attention: Walter Schindler

Telephone: (949) 398-5100

E-mail: wschindler@sailcapital.com
	 	 	 
	With a copy (which shall not constitute notice) to:	 	Bryan Cave LLP

3161 Michelson Drive, Suite 1500 

Irvine, CA 92612

Attention: Amit Parekh

Telephone: (949) 223-7105

E-mail: amit.parekh@bryancave.com
	 	 	 
	To LSF:	 	Louisiana Sustainability Fund

1441 Canal Street, Suite 324

New Orleans, LA 70112

and

3161 Michelson Drive, Suite 750

Irvine, CA 92612

Attention: Walter Schindler

Telephone: (949) 398-5100

E-mail: wschindler@sailcapital.com
	 	 	 
	With a copy (which shall not constitute notice) to:	 	Bryan Cave LLP

3161 Michelson Drive, Suite 1500 

Irvine, CA 92612

Attention: Amit Parekh

Telephone: (949) 223-7105

E-mail: amit.parekh@bryancave.com

 

    	-11-

    	 

    

 

	To Decker:	 	Jay W. Decker

23860 Messina Court

Bonita Springs, FL 34134

E-mail: deckerjay@comcast.net
	 	 	 
	
        To ESSF:

         
	 	Energy Special Situations Fund II, L.P.

1801 Patterson Street

Houston, TX 77007

Attention: Jon Linker

Telephone: (713) 869-0077

E-mail: jlinker@essfunds.com
	 	 	 
	To EPF:	 	ESS Participation Fund II, L.P.

1801 Patterson Street

Houston, TX 77007

Attention: Jon Linker

Telephone: (713) 869-0077

E-mail: jlinker@essfunds.com
	 	 	 
	With a copy (which shall not constitute notice) to:	 	Hogan Lovells US LLP

One Tabor Center, Suite 1500

1200 Seventeenth Street

Denver, CO 80202 

Attention: Mark L. Heimlich

Telephone: (303) 899-7324 

E-mail: mark.heimlich@hoganlovells.com 
	 	 	 
	To McComiskey:	 	Mark McComiskey

8 Richmond Hill Road

Greenwich, CT  06831

E-mail: mmccomiskey@mmccomiskey.com

 

or, as to each party,
at such other address as designated by that party in a written notice to the other party. All notices and communications shall
be deemed to have been validly served, given or delivered (i) if personally delivered, upon receipt or refusal to accept delivery,
(ii) if sent via facsimile, upon mechanical confirmation of successful transmission thereof generated by the sending facsimile
machine, (iii) if sent by a commercial overnight courier for delivery on the next business day, on the first business day after
deposit with such courier service (or the second business day if sent to an address not in the United States), (iv) if sent
by registered or certified mail, three business days after deposit thereof in the United States mail, or (v) if sent by electronic
mail, one business day after transmission when directed to the appropriate e-mail address (provided that the party giving notice
must verify the e-mail address of the recipient prior to transmission).

 

    	-12-

    	 

    

 

5.11         Attorneys’
Fees. If any action at law or in equity (including arbitration)
is necessary to enforce or interpret the terms of any of the Transaction Documents, the prevailing party shall be entitled to reasonable
attorneys’ fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.

 

5.12         Counterparts.
This Agreement may be executed and delivered in any number of counterparts, each of which shall be deemed to be an original, and
all of which together will constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail
(including .pdf) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered
and be valid and effective for all purposes.

 

5.13         Severability.
If any term or other provision of this Agreement is deemed by any court to be violative of law or public policy and therefore invalid,
illegal or incapable of being enforced, all other terms and provisions of this Agreement shall nevertheless remain in full force
and effect. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, 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 an acceptable manner in order that the transactions contemplated by this Agreement are consummated as originally contemplated
to the greatest extent possible.

 

5.14         Waiver.
Each Investor hereby waives all of his or its respective participation, anti-dilution, pre-emptive, first refusal, first offer,
co-sale or any other similar rights that would otherwise be applicable to the transactions contemplated by this Agreement and hereby
approves all of the transactions expressly set forth herein.

 

[Signatures on following
page]

 

    	-13-

    	 

    

 

IN WITNESS WHEREOF,
the parties have executed this Agreement as of the date first above written.

 

	COMPANY:	FLEX POWER GENERATION, INC.
	 	 
	 	 
	 	By:	 
	 	 	Boris Maslov, President
	 	 
	RNS:	RNS FLEX, LLC, a Delaware limited liability company
	 	 
	 	By:	RNS Management, LLC, its Manager
	 	 	 
	 	 	 
	 	 	By	 
	 	 	 	Thomas R. Denison, Manager
	 	 	
	SAIL and NEW INVESTOR:	SAIL VENTURE PARTNERS II, LP, a Delaware limited partnership
	 	 
	 	By:	SAIL Venture Partners, II, LLC,
	 	 	Its General Partner
	 	 	 
	 	 	 
	 	 	By:	 
	 	 	Name:	 
	 	 	Title:	 
	 	 	 	 
	LSF:	LOUISIANA SUSTAINABILITY FUND, a Louisiana limited partnership
	 	 
	 	By:	SAIL Sustainable Partners of Louisiana, LLC,
	 	 	its General Partner
	 	 	 
	 	 	By:	 
	 	 	Name:	 
	 	 	Title:	 
	 	 
	Decker:	 
	 	Jay W. Decker

 

Signature Page to Restructuring Agreement

 

    	-14-

    	 

    

 

	ESS:	ESS Participation Fund II, L.P.
	 	 
	 	By:	Energy Special Situations Fund Management II, LLC
	 	 	Its: General Partner
	 	 	 
	 	 	By:	 
	 	 	Name:	 
	 	 	Title:	 
	 	 
	 	Energy Special Situations Fund II, L.P.
	 	 
	 	By:	Energy Special Situations Fund Management II,
	 	 	LLC
	 	 	Its:  General Partner
	 	 	 
	 	 	By:	 
	 	 	Name:	 
	 	 	Title:	 
	 	 
	McComiskey:	 
	 	Mark McComiskey

 

    	-15-

    	 

    

 

SCHEDULE 1

OLD SHARES AND SHARES

 

	Holder	 	Old Shares	 	Shares
	RNS Flex, LLC	 	All Common Shares

    2,485,921 shares of Series B

    1,242,960 shares of Series B	 	2,485,921 shares of Series B

    1,242,960 shares of Series B
	 	 	 	 	 
	ESS Participation Fund II, LP	 	63,345 shares of Series B	 	63,345 shares of Series B
	 	 	 	 	 
	Energy Special Situations Fund II,
    LP	 	1,041,509 shares of Series B	 	1,041,509 shares of Series B
	 	 	 	 	 
	Jay W. Decker	 	103,580 shares of Series B	 	103,580 shares of Series B
	 	 	 	 	 
	Mark McComiskey	 	34,527 shares of Series B	 	34,527 shares of Series B
	 	 	 	 	 
	SAIL Venture Partners II, L.P.	 	3,795,618 shares of Series C

    2,043,795 shares of Series D	 	3,795,618 shares of Series C

    2,043,795 shares of Series D
	 	 	 	 	 
	Louisiana Sustainability Fund	 	5,238,443 shares of Series C

    2,820,700 shares of Series D	  	5,238,443 shares of Series C

    2,820,700 shares of Series D

 

    	-16-

    	 

    

 

EXHIBIT A

 

FORM OF AMENDED
AND

RESTATED CERTIFICATE OF INCORPORATION

 

    	-17-

    	 

    

 

EXHIBIT B

 

FORM OF STOCKHOLDERS
AGREEMENT

 

    	-18-

    	 

    

 

EXHIBIT C

 

FORM OF AMENDED
AND RESTATED BYLAWS

 

    	-19-

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