Document:

ex_456742.htm

Exhibit 4.1

 

 

FORM OF

 

SECURITIES PURCHASE AND REGISTRATION RIGHTS AGREEMENT

 

This SECURITIES PURCHASE AND REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into and effective as of December 14, 2022, among BioCardia, Inc., a Delaware corporation (the “Company”), and the several investors set forth on Schedule I attached hereto (each, an “Investor” and, collectively, the “Investors”).

 

WHEREAS, the Company and the Investors desire that, upon the terms and conditions set forth in this Agreement: each Investor will purchase from the Company, and the Company will issue and sell to such Investor, the number of shares of the Company’s common stock, par value $0.001 per share (“Common Stock”), set forth opposite such Investor’s name in Schedule I attached hereto (the “Shares”), for a purchase price equal to $1.68 per share (the “Purchase Price Per Share”); and

 

WHEREAS, each Investor will have registration rights with respect to its Shares and its other Registrable Securities (as defined herein) pursuant to the terms of this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing premises and the covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.    Agreement to Sell and Purchase the Shares. At the Closing (as defined below), the Company will sell to each Investor, and each Investor will purchase from the Company, upon the terms and subject to the conditions hereinafter set forth, Shares in the amounts set forth opposite such Investor’s name on Schedule I attached hereto and for the aggregate purchase price set forth opposite such Investor’s name under the heading “Aggregate Purchase Price” on Schedule I attached hereto.

 

2.    Delivery of the Shares at Closing. The completion of the purchase, sale and issuance of the Shares (the “Closing”) shall occur on December 16, 2022 or on such other date as the Company and each Investor shall agree (the “Closing Date”), at the offices of the Company. At the Closing, the Company shall issue to each Investor, as indicated on Schedule I attached hereto, such Investor’s Shares in book-entry form, registered in such Investor’s name and address as set forth on Schedule I attached hereto, subject to the Company’s receipt of the applicable Investor’s purchase price.

 

3.    Representations, Warranties and Covenants of the Company. The Company hereby represents and warrants to, and covenants with, each Investor as follows as of the date of this Agreement and as of the Closing Date:

 

3.1    Organization. Each of the Company and its Subsidiaries (as defined in Rule 405 under the Securities Act of 1933, as amended (the “Securities Act”)) is duly organized and validly existing in good standing under the laws of the jurisdiction of its organization. Each of the Company and its Subsidiaries has full power and authority to own, operate and occupy its properties and to conduct its business as presently conducted and is registered or qualified to do business and in good standing in each jurisdiction in which it owns or leases property or transacts business except where the failure to be so qualified would not have a material adverse effect upon the financial condition or business, operations or assets of the Company and its Subsidiaries, taken as a whole (a “Material Adverse Effect”).

 

 

 

 

 

3.2    Due Authorization. The Company has all requisite power and authority to execute, deliver and perform its obligations under this Agreement, and has taken all necessary corporate action to enter into and perform this Agreement and to issue the Shares in accordance with the terms of this Agreement. This Agreement has been duly authorized, validly executed and delivered by the Company and, when duly authorized and validly executed and delivered by the Investors, constitutes, or will constitute, legal, valid and binding agreements of the Company enforceable against the Company in accordance with their terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ and contracting parties’ rights generally and except as enforceability may be subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). Upon their issuance in accordance with the terms of this Agreement, the Shares will be duly authorized, validly issued, fully paid and non-assessable.

 

3.3    Non-Contravention. Except as would not reasonably be expected to have a Material Adverse Effect, the execution and delivery of this Agreement, the fulfillment of the terms of this Agreement and the consummation of the transactions contemplated hereby will not (i) conflict with or constitute a violation of, or default (with or without the giving of notice or the passage of time or both) under, (A) any material bond, debenture, note or other evidence of indebtedness, or under any material lease, indenture, mortgage, deed of trust, loan agreement, joint venture or other agreement or instrument to which the Company or any Subsidiary is a party or by which it or any of its Subsidiaries or their respective properties are bound, (B) the charter, bylaws or other organizational documents of the Company or any Subsidiary, or (C) any law, administrative regulation, ordinance or order of any court or governmental agency, arbitration panel or authority applicable to the Company or any Subsidiary or their respective properties, or (ii) result in the creation or imposition of any lien, encumbrance, claim, security interest or restriction whatsoever upon any of the material properties or assets of the Company or any Subsidiary or an acceleration of indebtedness pursuant to any obligation, agreement or condition contained in any material bond, debenture, note or any other evidence of indebtedness or any material indenture, mortgage, deed of trust or any other agreement or instrument to which the Company or any Subsidiary is a party or by which any of them is bound or to which any of the property or assets of the Company or any Subsidiary is subject. No consent, approval, authorization or other order of, or registration, qualification or filing with, any regulatory body, administrative agency, self-regulatory organization, stock exchange or market, or other governmental body in the United States is required for the execution and delivery of this Agreement or the valid issuance and sale of the Shares pursuant to this Agreement, except such as (a) have been or will be obtained or made under the Securities Act or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), (b) the filing of any requisite notices and/or application(s) to the Nasdaq Capital Market for the issuance and sale of the Shares and the listing of the Shares for trading or quotation, as the case may be, thereon in the time and manner required thereby, or (c) may be required under the securities, or blue sky, laws of any state jurisdiction in connection with the offer and sale of the Shares by the Company in the manner contemplated herein or such that the failure of which to obtain would not have a Material Adverse Effect.

 

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3.4    SEC Filings. Since January 1, 2022, the Company and its Subsidiaries have filed all reports, schedules, forms, statements and other documents required to be filed by them with the Securities and Exchange Commission (the “Commission”) pursuant to the reporting requirements of the Exchange Act (such reports, including exhibits thereto and documents incorporated by reference therein, collectively, the “SEC Documents”). To the Company’s knowledge, as of their respective filing dates, none of the SEC Documents contained an untrue statement of material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements made therein, in the light and circumstances under which they were made, not misleading, except to the extent corrected by subsequently filed or furnished SEC Documents.

 

3.5    Absence of Certain Changes. Except as disclosed in the SEC Documents or otherwise publicly disclosed by the Company, since September 30, 2022, there has been no adverse change or adverse development in the business, properties, assets, operations, financial condition, prospects, liabilities or results of operations of the Company or its Subsidiaries which, to the knowledge of the Company, would reasonably be expected to have a Material Adverse Effect.

 

3.6    Capitalization. The authorized capital stock of the Company consists of 100,000,000 shares of Common Stock and 25,000,000 shares of preferred stock, par value $0.001 per share. The Company’s issued and outstanding capital stock is as set forth in the most recent periodic report filed by the Company containing such disclosure as of the date indicated in periodic report (except for subsequent issuances, if any, pursuant to this Agreement or pursuant to reservations, agreements or employee benefit plans, in each case, referred to in the SEC Documents or pursuant to the exercise of convertible securities or options or the vesting of restricted stock units referred to in the SEC Documents).

 

3.7    Broker. Other than Arcadia Securities, LLC, the Company has taken no action which would give rise to any claim by any person for brokerage commissions, finder’s fees or similar payments by the Company or any Investor relating to this Agreement or the transactions contemplated hereby.

 

3.8    No Material Non-Public Information. The Company has not provided any material non-public information to any Investor except for such information as will be included in the Form 8-K to be filed pursuant to Section 4.15 hereof (the “Transaction 8-K”).

 

3.9    Certain Proceedings. The Company is not the subject of a voluntary bankruptcy or solvency action, has not made a general assignment for the benefit of creditors, and has not taken any corporate action to authorize any of the foregoing.

 

4.    Representations, Warranties and Covenants of the Investors. Each Investor severally for itself, and not jointly with the other Investors, represents and warrants to, and covenants with the Company as follows as of the date of this Agreement and as of the Closing Date:

 

4.1    Due Authorization; Organization. Such Investor has all requisite power, authority and capacity to execute, deliver and perform its obligations under this Agreement, and has taken all necessary corporate, company, partnership or individual action, as the case may be, to enter and perform this Agreement. This Agreement has been duly authorized and validly executed and delivered by such Investor and, when duly authorized and validly executed and delivered by the Company, constitutes a legal, valid and binding agreement of such Investor enforceable against such Investor in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ and contracting parties’ rights generally and except as enforceability may be subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

 

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4.2    Non-Contravention. The execution and delivery of this Agreement, the purchase of Shares under this Agreement, the fulfillment of the terms of this Agreement and the consummation of the transactions contemplated hereby will not (i) conflict with or constitute a violation of, or default (with or without the giving of notice or the passage of time or both) under, (A) any material bond, debenture, note or other evidence of indebtedness, or under any material lease, indenture, mortgage, deed of trust, loan agreement, joint venture or other agreement or instrument to which such Investor is a party, (B) the charter, bylaws or other organizational documents of such Investor, as applicable, or (C) any law, administrative regulation, ordinance or order of any court or governmental agency, arbitration panel or authority applicable to such Investor or its property, or (ii) result in the creation or imposition of any lien, encumbrance, claim, security interest or restriction whatsoever upon any of the material properties or assets of such Investor or an acceleration of indebtedness pursuant to any obligation, agreement or condition contained in any material bond, debenture, note or any other evidence of indebtedness or any material indenture, mortgage, deed of trust or any other agreement or instrument to which such Investor is a party or by which such Investor is bound or to which any of the property or assets of such Investor is subject. No consent, approval, authorization or other order of, or registration, qualification or filing with, any regulatory body, administrative agency, self-regulatory organization, stock exchange or market, or other governmental body in the United States is required for the execution and delivery of this Agreement and the purchase of Shares by such Investor, other than such as have been made or obtained.

 

4.3    Private Placement. Such Investor represents and warrants to, and covenants with, the Company that such Investor is acquiring Shares for its own account for investment only and with no present intention of distributing any Shares in violation of the applicable securities laws, or pursuant to any arrangement or understanding with any other persons regarding the distribution of any Shares. Such Investor has been advised and understands that none of the Shares have been registered under the Securities Act or under the “blue sky” or similar laws of any jurisdiction and that they may be resold only if registered pursuant to the provisions of the Securities Act and such other laws, if applicable, or, subject to the terms and conditions of this Agreement, if an exemption from registration is available. Such Investor has been advised and understands that the Company, in issuing the Shares, is relying upon, among other things, the representations and warranties of such Investor herein in concluding that such issuance is a “private offering” and is exempt from the registration provisions of the Securities Act.

 

4.4    Certain Trading Activities. Neither such Investor nor any of its affiliates has directly or indirectly, nor has any person acting on behalf of or pursuant to any understanding with such Investor, engaged in any purchase or sale of Common Stock (including, without limitation, any Short Sales (as defined below) involving the Company’s securities) since the date that such Investor first became aware of the transactions contemplated hereby. For the purposes of this Section 4.4, “Short Sales” include, without limitation, all “short sales” as defined in Rule 200 of Regulation SHO adopted under the Exchange Act and all types of direct and indirect stock pledges, forward sales contracts, options, puts, calls, short sales and other transactions through non-US broker-dealers or foreign regulated brokers having the effect of hedging the securities of the Company or the investment contemplated under this Agreement. Such Investor covenants that neither it, nor any person acting on its behalf or pursuant to any understanding with it, will engage in any transaction in the securities of the Company (including short sales) prior to the filing of a Current Report on Form 8-K, Annual Report on Form 10-K, press release, or other applicable Exchange Act report reporting this transaction.

 

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4.5    No Advice. Such Investor understands that nothing in this Agreement or any other materials presented to such Investor in connection with the purchase and sale of the Shares constitutes legal, tax or investment advice. Such Investor has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with its purchase of Shares.

 

4.6    Accredited Investor; Big Boy. Such Investor is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D under the Securities Act and is able to bear the risk of its investment in the Shares. Such Investor has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the purchase of the Shares. Such Investor acknowledges that it does not have any material non-public information relating to the Company. Such Investor further acknowledges that the Company and its agents, officers, directors and affiliates possess material non-public information not known to such Investor regarding or relating to the Company and/or the securities being offered hereby, including, but not limited to, information concerning the business, financial condition, results of operations, legal matters associated with ongoing or past litigation matters, investigations, the Company’s corporate transition matters (including transactions related to the corporate transition matters and amounts that become payable by the Company), prospects and other plans of the Company. Such Investor acknowledges that any material non-public information may be indicative of a value of the securities being offered hereby that is substantially less than the purchase price paid by such Investor, or may be otherwise adverse to such Investor, and such material non-public information, if known to such Investor, could be material to such Investor’s decision to acquire the securities being offered hereby. Accordingly, such Investor understands and accepts that there is an information disparity between such Investor and the Company, confirms that the Company is not obligated to disclose, and consistent with such Investor’s instructions, has not disclosed, material non-public information to such Investor, and acknowledges and agrees that the Company has no liability arising from such non-disclosure. Such Investor acknowledges that neither the Company nor any of its agents, officers, directors, or affiliates has delivered any information or made any representations to such Investor, except as expressly set forth herein.

 

4.7    Limited Representations. Such Investor and its advisors, if any, have been furnished with all materials relating to the business, finances and operations of the Company and its Subsidiaries and all materials relating to the offer and sale of the Shares in each case that have been requested by such Investor. Such Investor and its advisors, if any, have been afforded the opportunity to ask such questions of the Company as they deem appropriate for purposes of the investment contemplated hereby. Such Investor acknowledges and agrees that the most recent disclosure of the Company’s results is for the three and nine month periods ended on, and the most recent disclosure of the Company’s financial condition is at, September 30, 2022, as reported on the Company’s Quarterly Report on Form 10-Q, filed with the Commission on November 9, 2022, and that, except as disclosed in the SEC Documents, no information more recent than such date has been provided to or requested by such Investor as to the Company’s results, operations, financial condition, business or prospects. Such Investor understands that its purchase of Shares involves a high degree of risk and that it may lose its entire investment in the Shares, and such Investor further acknowledges and agrees that it can afford to do so without material adverse consequences to its financial condition. Such Investor is not relying on, and does not have, any information provided by the Company and its Subsidiaries, except to the extent provided in Section 3 herein.

 

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4.8    No Recommendation. Such Investor understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Shares or the fairness or suitability of an investment in the Shares, nor have such authorities passed upon or endorsed the merits thereof.

 

4.9    Restrictive Legends. The Shares issued to such Investor will bear the restrictive legends described in Section 6 below. Such Investor covenants that, in connection with any transfer of any Shares pursuant to the registration statement contemplated by Section 5 hereof, including the prospectuses contained therein, such Investor will comply with the applicable prospectus delivery requirements of the Securities Act, provided that copies of a current prospectus relating to such effective registration statements are available to such Investor.

 

4.10    Residence. Such Investor is a resident of, or is organized under the laws of, the jurisdiction set forth below such Investor’s name on Schedule I attached hereto.

 

4.11    No Market. Such Investor understands that the Shares are restricted securities, and that the Shares must be held indefinitely unless and until the resale of such Shares is registered under the Securities Act or subject to the terms and conditions of this Agreement and the applicable securities laws, an exemption from registration is available. Such Investor has been advised or is aware of the provisions of Rule 144 promulgated under the Securities Act.

 

4.12    No Commissions. Such Investor has taken no action that would give rise to any claim by any person for brokerage commissions, finder’s fees or similar payments by the Company or any Investor relating to this Agreement or the transactions contemplated hereby.

 

4.13    Transactional Exemption. Such Investor understands that the Shares are being offered and sold in reliance on a transactional exemption from the registration requirements of federal and state securities laws and that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of such Investor set forth herein in order to determine the applicability of such exemptions and the suitability of such Investor to acquire Shares (as applicable).

 

4.14    Investor Undertaking. Such Investor understands that (i) none of the Shares may be offered for sale, sold, assigned or transferred unless (A) subsequently registered under the Securities Act, (B) such Investor shall have delivered to the Company (if requested by the Company) an opinion of counsel to such Investor, in a form reasonably acceptable to the Company, to the effect that such Shares may be sold, assigned or transferred pursuant to an exemption from such registration, or (C) such Investor provides the Company with reasonable assurance that such Shares can be sold, assigned or transferred pursuant to Rule 144 promulgated under the Securities Act (or a successor rule thereto) (collectively, “Rule 144”); and (ii) any sale of the Shares made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144, and further, if Rule 144 is not applicable, any resale of such Shares under circumstances in which the seller (or the Person (as defined below) through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the Securities Act) may require compliance with some other exemption under the Securities Act or the rules and regulations of the Commission promulgated thereunder.

 

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4.15    Disclosure of Transactions. On or before 5:30 p.m., New York time, on the first (1st) business day following the date of this Agreement, the Company shall file a Current Report on Form 8-K (or other form permitted under the federal securities law) disclosing the material terms and conditions of the transactions contemplated by this Agreement in compliance with the requirements of Form 8-K (or such other form).

 

5.    Registration Rights.

 

5.1      Certain Definitions.

 

“Holder” and “Holders” shall include each Investor and any transferee or transferees of Registrable Securities to whom the registration rights conferred by this Agreement have been transferred in compliance with this Agreement.

 

The terms “register,” “registered” and “registration” shall refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act and applicable rules and regulations thereunder, and the declaration or ordering of the effectiveness of such registration statement.

 

“Registrable Securities” shall mean: (i) the Shares issued or issuable to each Holder upon any conversion, exercise or exchange of any securities issued in connection with any such distribution, exchange or replacement; (ii) securities issued or issuable upon any stock split, stock dividend, recapitalization or similar event with respect to the foregoing; and (iii) any other security issued as a dividend or other distribution with respect to, in exchange for or in replacement of the securities referred to in the preceding clauses, except that any such Shares or other securities shall cease to be Registrable Securities when and to the extent (A) they have been sold to the public or (B) they may be sold by the Holder thereof without restriction pursuant to Rule 144 or pursuant to a Prior Registration Statement.

 

“Registration Expenses” shall mean all expenses to be incurred by the Company in connection with each Holder’s registration rights under this Agreement, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel for the Company, and blue sky fees and expenses.

 

“Selling Expenses” shall mean all underwriting discounts, selling commissions and transfer taxes applicable to the sale of Registrable Securities and all fees and disbursements of counsel for Holders.

 

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5.2    Registration Requirements. The Company shall use its commercially reasonable efforts to effect the registration of the resale of the Registrable Securities (including, without limitation, the execution of an undertaking to file post-effective amendments, appropriate qualification under applicable blue sky or other state securities laws and appropriate compliance with applicable regulations issued under the Securities Act) as would permit or facilitate the resale of all the Registrable Securities in the manner (including manner of sale) and in all states reasonably requested by the Holder, except that the Company shall not be obligated to include an underwritten offering as a manner of sale. Such commercially reasonable efforts by the Company shall include, without limitation, the following:

 

(a)    The Company shall, as expeditiously as possible:

 

(i)    But in any event within ten (10) days of the Closing, prepare and file a registration statement with the Commission pursuant to Rule 415 under the Securities Act on Form S-3 under the Securities Act (or in the event that the Company is ineligible to use such form, such other form as the Company is eligible to use under the Securities Act provided that such other form shall be converted into a Form S-3 promptly after Form S-3 becomes available to the Company) covering resales by the Holders as selling stockholders (not underwriters) of the Shares (the “Registration Statement”). The Company shall use its commercially reasonable efforts to cause such Registration Statement and other filings to be declared effective as soon as possible, and in any event prior to 60 days (or, if the Commission elects to review the Registration Statement, 90 days) following the Closing. The Company, in its sole discretion, may elect to include for offer and sale securities in addition to the Registrable Securities in the Registration Statement. Promptly following the effective date of the Registration Statement, the Company shall file with the Commission in accordance with Rule 424(b) under the Securities Act the final prospectus to be used in connection with sales pursuant to the Registration Statement (whether or not such a prospectus is technically required by such rule).

 

(ii)    Without limiting the foregoing, the Company will promptly respond to all Commission comments, inquiries and requests, and shall request acceleration of effectiveness of the Registration Statement at the earliest possible date. The Company shall provide the Holders reasonable opportunity to review the portions of any such Registration Statement or amendment or supplement thereto containing disclosure regarding the Holders prior to filing.

 

(iii)    Prepare and file with the Commission such amendments and supplements to such Registration Statement and the prospectus used in connection with such Registration Statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement and notify the Holders of the filing and effectiveness of such Registration Statement and any amendments or supplements.

 

(iv)    Furnish or otherwise make available to each Holder copies of a current prospectus included in the Registration Statement conforming with the requirements of the Securities Act, copies of the Registration Statement, any amendment or supplement thereto and any documents incorporated by reference therein and such other documents as such Holder may reasonably require in order to facilitate the disposition of Registrable Securities owned by such Holder.

 

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(v)    Register and qualify the securities covered by the Registration Statement under the securities or “blue sky” laws of all domestic jurisdictions, to the extent required; provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions.

 

(vi)    Notify each Holder as soon as practicable of the happening of any event (but not the substance or details of any such event) as a result of which the prospectus (including any supplements thereto or thereof) included in such Registration Statement, as then in effect, includes an untrue statement of material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, and use its commercially reasonable efforts to promptly update and/or correct such prospectus.

 

(vii)    Notify each Holder immediately of the issuance by the Commission or any state securities commission or agency of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose. The Company shall use its commercially reasonable efforts to prevent the issuance of any stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible time.

 

(viii)    Upon request, permit counsel to the Holders to review the Registration Statement within a reasonable period of time (but not less than two (2) full trading days) prior to each filing; provided, however, that the Company will not be obligated to comply with this Section 5.2(a)(viii) if compliance would cause the Company to fail to comply with any other provisions hereunder.

 

(ix)    Qualify the Registrable Securities covered by such Registration Statement for listing on the principal securities exchange and/or market on which the Common Stock is then listed, including the preparation and filing of any required filings with such principal market or exchange.

 

(b)    In the event that the Registration Statement has been declared effective by the Commission and, afterwards, any Holder’s ability to sell Registrable Securities registered for resale under the Registration Statement is suspended for more than (i) 45 days in any 90 day period or (ii) 90 days in any calendar year, including without limitation by reason of any suspension or stop order with respect to the Registration Statement or the fact that an event has occurred as a result of which the prospectus (including any supplements thereto) included in the Registration Statement then in effect includes an untrue statement of material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, then the Company shall take such action as may be necessary to amend or supplement the Registration Statement or the prospectus (including any supplements thereto) included in the Registration Statement, such that the Registration Statement or the prospectus, as so amended, shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements not misleading.

 

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(c)    Notwithstanding Section 5.2(b), the Company may suspend the use of any prospectus used in connection with the Registration Statement only in the event, and for such period of time as, (i) such a suspension is required by the rules and regulations of the Commission or (ii) it is determined in good faith by the Board of Directors of the Company that because of valid business reasons (not including the avoidance of the Company’s obligations hereunder), it is in the best interests of the Company to suspend such use, and prior to suspending such use in accordance with this clause (c)(ii) the Company provides the Holders with written notice of such suspension, which notice need not specify the nature of the event giving rise to such suspension. The Company will use commercially reasonable efforts to cause such suspension to terminate at the earliest possible date.

 

(d)    The Company shall prepare and file with the Commission such amendments (including post-effective amendments) and supplements to the Registration Statement and the prospectus used in connection with the Registration Statement, which prospectus is to be filed pursuant to Rule 424 promulgated under the Securities Act, as may be necessary to keep the Registration Statement effective at all times during the Registration Period (as defined below), and, during such period, comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities of the Company covered by the Registration Statement. In the case of amendments and supplements to the Registration Statement that are required to be filed pursuant to this Agreement (including pursuant to this Section 5.2(d)) by reason of the Company filing a report on Form 10-K, Form 10-Q or Form 8-K or any analogous report under the Exchange Act, the Company shall have incorporated such report by reference into the Registration Statement, if applicable, or shall file such amendments or supplements with the Commission on the same day on which the Exchange Act report is filed which created the requirement for the Company to amend or supplement the Registration Statement.

 

(e)    Each Holder agrees by its acquisition of the Registrable Securities that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Sections 5.2(a)(vi) or 5.2(a)(vii), and upon notice of any suspension under Section 5.2(c), such Holder will forthwith discontinue disposition of such Registrable Securities under the Registration Statement until such Holder’s receipt of the copies of the supplemented prospectus and/or amendment to the Registration Statement contemplated by this Section 5.2, or until it is advised in writing by the Company that the use of the applicable prospectus may be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such prospectus or the Registration Statement. The Company may provide appropriate stop orders to enforce the provisions of this paragraph.

 

5.3    Expense Registration. All Registration Expenses in connection with any registration, qualification or compliance with registration pursuant to this Agreement shall be borne by the Company, and all Selling Expenses of a Holder shall be borne by such Holder.

 

5.4    Registration on Form S-3. The Company shall use its commercially reasonable efforts to remain qualified for registration on Form S-3 or any comparable or successor form or forms, or in the event that the Company is ineligible to use such form, such form as the Company is eligible to use under the Securities Act, provided that if such other form is used, the Company shall convert such other form to a Form S-3 promptly after the Company becomes so eligible, provided that the Company shall maintain the effectiveness of the Registration Statement then in effect until such time as the Registration Statement covering the Registrable Securities has been declared effective by the Commission.

 

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5.5    Registration Period. In the case of the registration effected by the Company pursuant to this Agreement, the Company shall keep such registration effective from the date on which the Registration Statement initially became effective until the earlier of (i) the date on which all the Holders have completed the sales or distributions described in the Registration Statement relating to the Registrable Securities registered for resale thereunder, (ii) until such Registrable Securities may be sold by the Holders without restriction pursuant to Rule 144 (or any successor thereto) (provided that the Company’s transfer agent has accepted an instruction from the Company to such effect), and (iii) the two year anniversary of the date hereof (the “Registration Period”). Thereafter, the Company shall be entitled to withdraw such Registration Statement and the Holders shall have no further right to offer or sell any of the Registrable Securities registered for resale thereon pursuant to the Registration Statement (or any prospectus relating thereto).

 

5.6    Indemnification.

 

(a)    Company Indemnity. The Company will indemnify and hold harmless each Holder, each of its officers, directors and partners, and each person controlling each of the foregoing, within the meaning of Section 15 of the Securities Act and the rules and regulations thereunder with respect to which registration, qualification or compliance has been effected pursuant to this Agreement, against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on any material breach of this Agreement (including any representation herein) or any untrue statement (or alleged untrue statement) of a material fact contained in any prospectus, offering circular or other document (including any related registration statement, notification or the like) incident to any such registration, qualification or compliance, or based on any 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 light of the circumstances under which they were made, or any violation by the Company of the Securities Act or any state securities law or in either case, any rule or regulation thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, qualification or compliance, and will reimburse each Holder, each of its officers, directors and partners, and each person controlling each of the foregoing, for any reasonable and documented out-of-pocket legal and any other expenses reasonably incurred in connection with investigating and defending any such claim, loss, damage, liability or action, provided that the Company will not be liable in any such case to a Holder to the extent that any such claim, loss, damage, liability or expense arises out of or is based (i) on any untrue statement or omission based upon written information furnished to the Company by a Holder, (ii) the failure of a Holder to deliver at or prior to the written confirmation of sale, the most recent prospectus, as amended or supplemented, or (iii) the failure of a Holder otherwise to comply with this Agreement. The indemnity agreement contained in this Section 5.6(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent will not be unreasonably withheld).

 

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(b)    Holder Indemnity. Each Holder will, severally and not jointly, if Registrable Securities held by it are included in the securities as to which such registration, qualification or compliance is being effected, indemnify and hold harmless the Company, each of its directors, officers and partners, each other Holder (if any), and each of their officers, directors and partners, and each person controlling such other Holder(s) against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on any material breach of this Agreement by Holder (including any representation herein) or any untrue statement (or alleged untrue statement) of a material fact contained in any such registration statement, prospectus, offering circular or other document, or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make a statement therein not misleading in light of the circumstances under which it was made, and will reimburse the Company and such other Holder(s) and their directors, officers and partners or control persons for any reasonable and documented out-of-pocket legal or any other expenses reasonably incurred in connection with investigating and defending any such claim, loss, damage, liability or action, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular or other document in reliance upon and in conformity with written information furnished to the Company by such Holder and stated to be specifically for use therein, and provided that the maximum amount for which such Holder shall be liable under this indemnity shall not exceed the net proceeds received by such Holder from the sale of the Registrable Securities pursuant to the registration statement in question. The indemnity agreement contained in this Section 5.6(b) shall not apply to amounts paid in settlement of any such claims, losses, damages or liabilities if such settlement is effected without the consent of such Holder (which consent shall not be unreasonably withheld).

 

(c)    Procedure. Each party entitled to indemnification under this Section 5.6 (the “Indemnified Party”) shall give notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim in any litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or any litigation resulting therefrom, shall be approved by the Indemnified Party (whose approval shall not be unreasonably withheld), and the Indemnified Party may participate in such defense at its own expense, and provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 5.6 except to the extent that the Indemnifying Party is materially and adversely affected by such failure to provide notice. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation. Each Indemnified Party shall furnish such non-privileged information regarding itself or the claim in question as an Indemnifying Party may reasonably request in writing and as shall be reasonably required in connection with the defense of such claim and litigation resulting therefrom.

 

5.7    Contribution. If the indemnification provided for in Section 5.6 is unavailable to the Indemnified Parties in respect of any losses, claims, damages or liabilities referred to herein (other than by reason of the exceptions provided herein), then each such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such losses, claims, damages or liabilities as between the Company, on the one hand, and any Holder, on the other, in such proportion as is appropriate to reflect the relative fault of the Company and of such Holder 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 fault of the Company, on the one hand, and of any Holder, on the other, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or by such Holder.

 

-12-

 

 

In no event shall the obligation of any Indemnifying Party to contribute under this Section 5.7 exceed the amount that such Indemnifying Party would have been obligated to pay by way of indemnification if the indemnification provided for under Sections 5.6(a) or 5.6(b) hereof had been available under the circumstances.

 

The Company and the Holders agree that it would not be just and equitable if contribution pursuant to this Section 5.7 were determined by pro rata allocation (even if the Holders were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraphs. The amount paid or payable by an Indemnified Party as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraphs shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this section, no Holder shall be required to contribute any amount in excess of the net proceeds received by such Holder from the sale of Registrable Securities pursuant to the registration statement in question. 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.

 

5.8    Survival. The indemnity and contribution agreements contained in Sections 5.6 and 5.7 shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Indemnified Party or by or on behalf of the Company, and (iii) the consummation of the sale or successive resales of the Registrable Securities.

 

5.9    Information by Holders. Each Holder shall promptly furnish to the Company such information regarding such Holder and the distribution and/or sale proposed by such Holder as the Company may from time to time reasonably request in writing in connection with any registration, qualification or compliance referred to in this Agreement, and the Company may exclude from such registration the Registrable Securities of any Holder who fails to furnish such information within a reasonable time after receiving such request. The intended method or methods of disposition and/or sale of such securities (other than underwritten offerings) as so provided by such purchaser shall be included in the Registration Statement covering the Registrable Securities. Each Holder agrees that, other than ordinary course brokerage arrangements, in the event it enters into any arrangement with a broker dealer for the sale of any Registrable Securities through a block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, such Holder shall promptly deliver to the Company in writing all applicable information required in order for the Company to be able to timely file a supplement to the prospectus pursuant to Rule 424(b), or take any other action, under the Securities Act, to the extent that such supplement or other action is legally required. Such information shall include a description of (i) the name of such Holder and of the participating broker dealer(s), (ii) the number of Registrable Securities involved, (iii) the price at which such Registrable Securities were or are to be sold, and (iv) the commissions paid or to be paid or discounts or concessions allowed or to be allowed to such broker dealer(s), where applicable.

 

-13-

 

 

6.    Stock Legend.

 

6.1    Upon payment therefor as provided in this Agreement, the Company will issue to each Investor, in the name of such Investor, the Shares purchased by such Investor. Any certificate representing the Shares shall be stamped or otherwise imprinted with a legend in substantially the following form:

 

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION AND MAY NOT BE OFFERED, SOLD, ASSIGNED, PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT.

 

7.    Use of Proceeds. The proceeds from the sale of Shares pursuant to this Agreement shall be used for general corporate purposes.

 

8.    Notices. All notices, requests, consents and other communications hereunder shall be in writing, shall be mailed (i) if within the domestic United States, by first-class registered or certified mail, or nationally recognized overnight express courier, postage prepaid, or by facsimile, or (ii) if delivered from outside the United States, by International Federal Express or facsimile, and shall be deemed given (A) if delivered by first-class registered or certified mail domestic, three business days after so mailed, (B) if delivered by nationally recognized overnight carrier, one business day after so mailed, (C) if delivered by International Federal Express, two business days after so mailed, and (D) when delivered, if sent by electronic mail or facsimile, with receipt confirmed during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day, and shall be delivered as addressed as follows:

 

(a)    if to the Company, to:

 

BioCardia, Inc.

320 Soquel Way

Sunnyvale, California 94085

Telephone: (650) 226-0120

Attention: Chief Financial Officer

 

with copies to:

 

Wilson Sonsini Goodrich & Rosati, P.C.

Attn: Michael Danaher

650 Page Mill Road

Palo Alto, CA 94304-1050

Telephone: (650) 493-9300

 

-14-

 

 

(b)    if to an Investor, at its address set forth under its name on Schedule I attached hereto, or at such other address or addresses as may have been furnished to the Company in writing.

 

9.    Changes; Waivers. This Agreement may not be modified or amended except pursuant to an instrument in writing signed by the Company and the Investors holding a majority of the total number of Shares issued pursuant to this Agreement. No provision of this Agreement may be waived except in a written instrument signed by the party against whom enforcement of any such waived provision is sought.

 

10.    Headings. The headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be part of this Agreement.

 

11.    Severability. In the event that any provision contained in this Agreement is found by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby.

 

12.    Governing Law. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York, without giving effect to the principles of conflicts of law. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its affiliates, directors, officers, stockholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

 

13.    Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto pertaining to the subject matter hereof, and any and all other written or oral agreements relating to such subject matter are expressly cancelled.

 

14.    Counterparts. This Agreement may be executed in two or more counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute one instrument, and shall become effective when one or more counterparts have been signed by each party hereto and delivered to the other parties; provided that a facsimile signature or signature delivered by e-mail in a “.pdf” format data file, including any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com, www.echosign.adobe.com, etc., shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original signature.

 

-15-

 

 

15.    Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the Investors. No Investor shall assign any rights or obligations under this Agreement, other than, solely with respect to any Shares transferred in accordance with this Agreement, including the legends described herein, to any permitted transferee of such Shares, provided, however, that no such assignment shall relieve any Investor of its obligations under this Agreement.

 

16.    Expenses. The Company and each Investor shall bear its own expenses in connection with the preparation and negotiation of this Agreement.

 

17.    Independent Nature of Investors’ Obligations and Rights. The obligations of each Investor under this Agreement are several and not joint with the obligations of any other Investor, and no Investor shall be responsible in any way for the performance of the obligations of any other Investor under this Agreement. Nothing contained herein, and no action taken by any Investor pursuant hereto, shall be deemed to constitute the Investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by this Agreement, and the Company acknowledges that the Investors are not acting in concert or as a group with respect to such obligations or the transactions contemplated by this Agreement. Each Investor confirms that it has independently participated in the negotiation of the transaction contemplated hereby with the advice of its own counsel and advisors. Each Investor shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement, and it shall not be necessary for any other Investor to be joined as an additional party in any proceeding for such purpose.

 

18.    Pronouns. All pronouns or any variations thereof shall be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the person, persons, entity or entities may require.

 

19.    Press Release. The Company shall not use any Investor’s name in any press release issued by the Company related to this Agreement or the transactions contemplated hereby, without the consent of such Investor.

 

[Signature pages follow.]

 

 

-16-

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

 

	 	
			BIOCARDIA, INC.

			
	 	 	 
	 	
			By:

				 
	 	 	 
	 	
			Name:

				
			Peter Altman

			
	 	 	 
	 	
			Title:

				
			Chief Executive Officer

			

 

-17-

 

 

INVESTOR COUNTERPART SIGNATURE PAGE

 

TO THE SECURITIES PURCHASE AND REGISTRATION RIGHTS AGREEMENT

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

 

	 	 	 
	 	 
	 	
			Name of Investor

			
	 	 
	 	
			By:

				 
	 	 	 
	 	
			Name:

				 
	 	 	 
	 	
			Title:

				 
	 	 	 
	 	
			Investment Amount: $

			

 

-18-

 

 

SCHEDULE I

 

Schedule of InvestorsExhibit
10.162

 

LIMITED
LIABILITY COMPANY OPERATING AGREEMENT

OF

VERMONT
RENEWABLE GAS, LLC

 

Dated
as of December 14, 2022

 

THE
INTERESTS ISSUED UNDER THIS AGREEMENT MAY BE SOLD OR TRANSFERRED ONLY IN COMPLIANCE WITH THE RESTRICTIONS ON TRANSFER SET FORTH HEREIN.

 

IN
ADDITION, THE SECURITIES ISSUED UNDER THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR REGISTERED OR QUALIFIED UNDER THE APPLICABLE STATE SECURITIES LAWS, BUT HAVE BEEN ISSUED IN RELIANCE UPON EXEMPTIONS
FROM REGISTRATION AND QUALIFICATION PROVIDED FOR IN THE SECURITIES ACT AND THE APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD
OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND QUALIFICATION OR REGISTRATION UNDER
THE APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION OR QUALIFICATION IS
NOT REQUIRED.

 

    	 

     

    

 

OPERATING
AGREEMENT

 

OF
VERMONT RENEWABLE GAS, LLC

 

A
VERMONT LIMITED LIABILITY COMPANY

 

THIS
OPERATING AGREEMENT (this “Operating Agreement”, or “Agreement”), made effective as of this 14th
day of December, 2022, of VERMONT RENEWABLE GAS, LLC, a Vermont Limited Liability Company (the “Company”), with principal
offices located at ___________________________________________________, by and among each member who is a signatory to this Agreement
and as set forth on Schedule A attached hereto and each new member who has executed the form of Joinder attached hereto as Schedule B,
each of whom intend to be legally bound (each individually a “Member” and collectively, the “Members”). This
Operating Agreement, as it may be amended from time to time, shall be binding on any Person who at the time is a Member regardless of
whether or not the Person has executed this Operating Agreement or any amendment hereto. The Company and its Members hereby agree as
follows:

 

WITNESSETH:

 

WHEREAS,
the Company was organized as a limited liability company by the filing of Articles of Incorporation on ______with the Secretary of State
of the State of Vermont under and pursuant to the Act;

 

WHEREAS,
the Members formed the Company in order to exclusively provide debt and/or equity financing to develop and construct a biomass energy
facility to be sited in Vermont and owned by the Company;

 

WHEREAS,
the Company has transferable security interests and liens on all of the tangible assets and intangible of the Company;

 

WHEREAS,
Vermont Renewable Gas, LLC is a pyrolysis plant established to convert approximately 10,000 tons/year of woody biomass feedstock into
approximately 16,500 MWh electricity/year, 1,400 MT/year of biochar and 26,000 MM BTU/year of thermal energy by using high temperature
ablative fast pyrolysis reactor for which Clean Energy Technology, Inc. holds an exclusive license to exploit the technology;

 

WHEREAS,
the Company shall establish a trust account which will receive all cash flow generated from the accounts receivables and other receivables
of the Company which shall secure the payment of all principal and interest of all debt and loans incurred to finance the Company as
well as all expenses of the Company; and

 

WHEREAS,
all distributions to Members shall be in accordance with the terms hereof and subject to any covenants in the debt/loan documents the
Company enters into with creditors and lenders of the Company;

 

    	2

     

    

 

NOW,
THEREFORE, in consideration of the premises, mutual covenants and agreements herein contained, and intending to be legally bound,
the parties hereby agree as follows:

 

Article
I

DEFINED
TERMS

 

The
following capitalized terms shall have the meaning specified in this Article 1. Other terms are defined in the text of this Agreement;
and, throughout this Agreement, those terms shall have the meanings respectively ascribed to them.

 

		1.1.	Registered
                                            Agent. The name and address of the registered agent of the Company in the State of Vermont
                                            shall be as set forth in the Articles.
	 	 	 
		1.2.	“Act”
                                            shall have the meaning ascribed to it in Section 2.1.
	 	 	 
		1.3.	“Agreement”
                                            shall mean this Operating Agreement, as amended from time to time.
	 	 	 
		1.4.	“Additional
                                            Capital Contributions” shall have the meaning ascribed to it in Section 8.1(b).
	 	 	 
		1.5.	“Additional
                                            Members” shall have the meaning ascribed to it in Sction 8.3.
	 	 	 
		1.6.	“Capital
                                            Contributions” shall have the meaning ascribed to it in Sction 8.1(b).
	 	 	 
		1.7.	“Capital
                                            Account” or “Capital Accounts”, as the case may be, means the
                                            Capital Account maintained for each Member pursuant to Article 8.
	 	 	 
		1.8.	“Articles”
                                            shall mean the Articles of Incorporation of the Company, as amended from time to time.
	 	 	 
		1.9.	“Class
                                            A Member” or “Class A Members”, the Class A Members of the Company
                                            shall be as set forth in Schedule A attached here to as may be amended as provided herein.
                                            The Class A Members shall have voting rights as provided herein.
	 	 	 
		1.10.	“Class
                                            A Membership Interest” shall mean, with respect to each Class A Member, all of
                                            the economic rights, title and ownership interests in the Company held by such Class A Member,
                                            including the Class A Member’s rights to receive allocations of Net Profits, Net Losses
                                            and Distributions.
	 	 	 
		1.11.	“Class
                                            A Voting Interests” shall mean the voting interest equal to the pro rata portion
                                            of the Class A Members’ Class A Membership Interest.
	 	 	 
		1.12.	“Class
                                            B Member” or ‘‘Class B Members”, shall mean the Class
                                            B Members of the Company who are non-operating members who have invested in the Company and
                                            are set forth in Schedule A attached here to as may be amended as provided herein. The Class
                                            B Members shall have any voting rights as provided herein.
	 	 	 
		1.13.	“Class
                                            B Membership Interest”, shall mean, with respect to each Class B Member, all of
                                            the economic rights, title and ownership interests in the Company held by such Class B Member,
                                            including such Class B Member’s rights to receive allocations of Net Profits, Net Losses
                                            and Distributions.
	 	 	 
		1.14.	“Class
                                            B Voting Interests”, shall mean the voting interest equal to the pro rata portion
                                            of the Class B Members’ Class B Membership Interest.
	 	 	 
		1.15.	“Class
                                            C Member” or “Class C Members”, shall mean the Class C Members
                                            of the Company who have received membership interests in connection with debt or tax credit
                                            financing as set forth in Schedule A attached here to as may be amended as provided herein.
                                            The Class C Members shall have the voting rights as provided herein.

 

    	3

     

    

 

		1.16.	“Class
                                            C Membership Interest”, shall mean, with respect to each Class C Member, all of
                                            the economic rights, title and ownership interests in the Company held by such Class C Member,
                                            including such Class C Member’s rights to receive allocations of Net Profits, Net Losses
                                            and Distributions.
	 	 	 
		1.17.	“Class
                                            C Voting Interests” shall mean the voting interest equal to the pro rata portion
                                            of the Class C Members’ Class C Membership Interest.
	 	 	 
		1.18.	“Class
                                            D Member” shall mean any transferee of a Class A Member, Class B Member or Class
                                            C Member after the Company and its Members exhaust the right of first refusal set forth in
                                            Section 9.8 hereof.
	 	 	 
		1.19.	“Class
                                            D Membership Interest” shall mean, with respect to a Class D Member all of the
                                            economic rights and participation in the Company’s profit and losses of the Class A
                                            Members, Class B Members and Class C Members, however, the Class D Member shall have no voting
                                            rights.
	 	 	 
		1.20.	“Code”
                                            shall mean the Internal Revenue Code of 1986, as amended, or any corresponding provisions
                                            of superseding federal revenue statute.
	 	 	 
		1.21.	“Confidential
                                            Information” shall have the meaning ascribed to it in Section 12.5.
	 	 	 
		1.22.	“Company”
                                            shall mean Vermont Renewable Gas, LLC.
	 	 	 
		1.23.	“Core
                                            Business” shall mean engaging in biomass pyrolosis conversion of biomass feedstock
                                            into electricity, heat, and biochar or any other lawful business activity under the Act consistent
                                            with such business purpose.
	 	 	 
		1.24.	“Distribution”
                                            or “Distributions”, as the case may be, shall mean a cash distribution
                                            to all Members made pursuant to Article 7.
	 	 	 
		1.25.	“Election
                                            Period” shall have the meaning ascribed to it in Section 9.8(a).
	 	 	 
		1.26.	“ERISA”
                                            shall mean the Employee Retirement Income Security Act of 1974, as amended.
	 	 	 
		1.27.	Family
                                            Member” shall have the meaning ascribed to it in Section 9.1(a).
	 	 	 
		1.28.	“Fair
                                            Market Value” shall mean, with respect to any property (including the Membership
                                            Interests), the value that would be obtained in an arm’s length transaction for ownership
                                            of such property for cash between an informed and willing seller and an informed and willing
                                            purchaser, each with an adequate understanding of the facts and under no compulsion to buy
                                            or sell. The Managers shall determine in good faith, the Fair Market Value, (i) based on
                                            a valuation by a third-party advisor with experience in valuing business or (ii) by the Managers
                                            using some other generally accepted methodology for business valuation. Such determination
                                            and choice of methodology shall be final and conclusive evidence of the Fair Market Value.
	 	 	 
		1.29.	“Fiscal
                                            Year” means the fiscal year of the Company, which shall be the calendar year; but,
                                            upon termination of the Company, “Fiscal Year” means the period from the end
                                            of the last preceding Fiscal Year to the date of such termination.
	 	 	 
		1.30.	“Initial
                                            Capital Contributions” shall have the meaning ascribed to it in Section 8.1(a).

 

    	4

     

    

 

		1.31.	“Liquidation”
                                            shall mean the process of winding up and terminating the Company after its Dissolution.
	 	 	 
		1.32.	“Liquidators”
                                            shall have the meaning ascribed to it in Section 11.2.
	 	 	 
		1.33.	“Manager
                                            (s)” shall mean the individuals or entities designated manager(s) by the Class
                                            A Members pursuant to Article 5 of this Agreement.
	 	 	 
		1.34.	“Membership
                                            Interests” shall collectively mean and refer to the Class A Membership Interests,
                                            the Class B Membership Interests, Class C Membership Interests and Class D Membership Interests
                                            and any class of additional membership interests issued by the Company.
	 	 	 
		1.35.	“Net
                                            Profit” and “Net Loss” or “Net Profits” and
                                            “Net Losses”, as the case may be, for any accounting period as determined
                                            by the Managers shall mean the income or loss of the Company during any such period as determined
                                            in accordance with generally accepted accounting principles and pursuant to Article V herein.
	 	 	 
		1.36.	“Net
                                            Cash Flow” shall have the meaning ascribed to it in Section 7.2(c).
	 	 	 
		1.37.	“Notice
                                            of Election” shall have the meaning ascribed to it in Section 9.8(a).
	 	 	 
		1.38.	“Offering
                                            Member” shall have the meaning ascribed to it in Section 9.8(a).
	 	 	 
		1.39.	“Proposed
                                            Transferee” shall have the meaning ascribed to it in Section 9.8(a).
	 	 	 
		1.40.	“Responding
                                            Member” shall have the meaning ascribed to it in Section 9.8(a).
	 	 	 
		1.41.	“ROFR
                                            Notice” shall have the meaning ascribed to it in Section 9.8(a).
	 	 	 
		1.42.	“Representatives”
                                            shall have the meaning ascribed to it in Section 12.15.
	 	 	 
		1.43.	“Substitute
                                            Member” shall have the meaning ascribed to it in Section 9.2(a).
	 	 	 
		1.44.	“Tag
                                            Along Right” shall have the meaning ascribed to it in Section 9.8(a).
	 	 	 
		1.45.	“Tag
                                            Period” shall have the meaning ascribed to it in Section 9.8(a).
	 	 	 
		1.46.	“Transfer”
                                            shall have the meaning ascribed to in in Section 9.1(a).

 

Article
II

ORGANIZATION

 

2.1 Formation
and Continuation.

 

a) The
Company has been organized as a Vermont limited liability company on by the filing of Articles of Organization (the “Articles”)
with the Secretary of State of the State of Vermont pursuant to and in accordance with the Vermont Limited Liability Company Act, as
amended from time to time (the “Act”).

 

b) The
rights, liabilities and obligations of the Members with respect to the Company shall be determined in accordance with the Act, the Certificate
and this Agreement. To the extent anything contained in this Agreement modifies, supplements or otherwise affects any such right, liability,
or obligation arising under the Act, this Agreement shall supersede the Act to the extent not restricted thereby.

 

    	5

     

    

 

c) The
Managers shall accomplish all filing, recording, publishing and other acts necessary or appropriate for compliance with all the requirements
for the formation and operation of the Company as a limited liability company under this Agreement and the Act and under all other laws
of the State of Vermont and such other jurisdictions in which the Members determine that the Company may conduct business.

 

2.2 Name.
The name of the Company is Vermont Renewable Gas, LLC”.

 

2.3 Purposes.
The purpose of the Company is to engage in any activity for which limited liability companies may be formed under the Act for purposes
of advancing the Core Business and to engage in any and all activities necessary or incidental thereto, as well as to engage in any lawful
act or activity for which limited liability companies may be formed and/or conduct business under the Act in furtherance of the Core
Business. The Company shall have all the powers necessary or convenient to affect any purpose for which it is formed, including all powers
granted by the Act.

 

2.4 Duration.
The term of the Company commenced as of the date of filing of the Articles, and the Company shall be dissolved and its affairs wound
up as provided in the Articles, in this Agreement or as otherwise provided in the Act.

 

2.5 Principal
Place of Business. The Principal Place of Business of the Company shall be___________________________________________________, or
at such other location as may be determined by the Managers from time to time.

 

2.6 Intention
for Company. The Members have formed the Company as a limited liability company under and pursuant to the Act. The Members specifically
intend and agree that the Company shall not be, for legal purposes, a partnership (including, a limited partnership) or any other venture,
but shall be a limited liability company under and pursuant to the Act, desiring partnership tax treatment. No Member or Manager shall
be construed to be a partner in the Company or a partner of any other Member, Manager, or person; and the Articles, this Agreement, and
the relationships created thereby and arising therefrom shall not be construed to suggest otherwise.

 

2.7 Registered
Agent. The name and address of the registered agent of the Company in the State of Vermont shall be as set forth in the Articles.

 

Article
III

MEMBERS

 

3.1 Membership.
The names and addresses of the Members are set forth on the signature page hereof and, in the case of any new members, upon the Joinder
annexed hereto as Schedule B. The address of the members shall be as kept on the records of the Company. A Member may be removed as a
Member and/or as a Manager for a material breach of its fiduciary duty to the Company, fraud, willful malfeasance against the Company,
or a material breach of a material term of this Agreement after given six (6) months to cure, in each case as determined by a court of
competent jurisdiction located in the State of Vermont, after exhaustion of all appeals.

 

3.2  Limited
Liability. No Member or Manager of the Company shall be personally liable under any judgment of a court, or in any other manner,
for any debt, obligation, or liability of the Company, whether that liability or obligation arises in contract, tort, or otherwise, solely
by reason of being a Member or Manager of the Company except as provided by law.

 

    	6

     

    

 

3.3 Actions
Requiring Majority Vote of the Class A, Class B and Class C Members. The following actions may be taken by the Managers solely upon
a vote of the majority of Class A Voting Interests, Class B Voting Interests and Class C Voting Interests, each voting as a separate
class approving such matter, which shall include the affirmative vote of CETY or its assignees:

 

a) Any
amendment of the Articles;

 

b) Any
amendment of the Operating Agreement of the Company;

 

c) The
merger, consolidation, dissolution, liquidation or cessation of business activities of the corporation;

 

d) The
consent to: (i) the entry of a decree or order for relief against the Company by a court of competent jurisdiction in any involuntary
case brought against the Company under any debtor relief laws generally affecting the rights of creditors and relief of debtors now or
hereafter in effect; or (ii) the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator or other similar agent
under applicable debtor relief laws for the Member or for any substantial part of its assets or property;

 

e) The
Company’s filing of a petition for relief under the Federal Bankruptcy Code (or any corresponding future United States Debtor Relief
Law now or hereafter in effect);

 

f) Any
material change in the nature of the Core Business; or

 

g) The
making of any general assignment for the benefit of the Company’s creditors.

 

3.4 Actions
Requiring Majority Vote of the Class A Members. The following actions may be taken by the Managers solely upon a vote of the majority
of Class A Voting Interests; provided that any such action is permitted by any lending, credit or funding agreement entered into by the
Company, which vote shall include the affirmative vote of CETY or its assignees:

 

		a)	A
                                            withdrawal of any part of a Member’s Capital Contribution other than upon the Dissolution
                                            of the Company or in accordance with the provisions of this Agreement for distributions;

 

b) Any
change in the amount or character of Capital Contributions

 

c) The
selection of a Manager, and employment of same individual, and setting compensation of a Manager;

 

d) The
sale and/or issuance by the Company of Membership Interests and fixing consideration thereon;

 

e) Revisions
of Schedule A in order to reflect the transfer, sale or termination of any Membership Interest;

 

f) The
entering into, modification or termination of any lease, contract or agreement with a term of one year or more;

 

g) The
purchase of any interest in the stock, assets or business of any corporation, partnership or other entity other than in the ordinary
course of business;

 

h) The
sale, purchase, transfer, hypothecation or lease of any asset other than in the ordinary course of business;

 

i) The
borrowing of money in excess of $50,000;

 

    	7

     

    

 

j) The
making by the Company of any loan to any person, corporation, partnership or other entity;

 

k) The
guaranty of any obligation or debt of any third party except for the Company’s wholly owned subsidiaries;

 

l) The
making of any capital expenditure of $50,000 or more;

 

m) The
making of capital expenditures which aggregate $100,000 or more within any fiscal year;

 

n) The
declaration or payment of distributions upon the Membership Interests, unless otherwise provided for in this Agreement;

 

o) The
purchase of disability and/or life insurance on the lives of certain key persons;

 

p) The
fixing of a new class of Membership Interests and the terms thereof

 

q) The
sale of any subsidiary of or investment by the Company;

 

r) Such
other matters, obligations and limitations as may be required in the documents executed by lenders, creditors, government incentive programs,
or the sale of tax incentives by the Company.

 

s) The
approval of any action to be taken by the Managers in Section 4.2 or as not explicitly granted herein or

 

t) The
investment in or creation of any new subsidiary of the Company.

 

A
new Member may be admitted by an affirmative vote of a majority of the Class A Members, which vote shall include the affirmative vote
of CETY or its assignees.

 

3.5 Meetings.
Meetings of the Members may be held at any place, either within or without the State of Vermont , as may be determined by the Managers
from time to time. A special meeting of the Members may be called by the Managers or by any Member or Members representing more than
fifteen (15%) percent of the Class A Membership Interests or 85% of the Class B Membership Interests for the purpose of addressing any
matters on which the Class A Members may vote. The Company shall have no obligation to conduct annual or special meetings or to keep
minutes thereof. Meetings will be conducted in a manner the Managers determine to be fair and reasonable in the circumstances. In conducting
meetings, the Managers may, but are not obligated to, refer to sources such as The Modern Rules of Order or other similar publication
setting forth a method of parliamentary procedure. The Managers may provide that meetings be held by telephone, internet, or other form
of telecommunication.

 

3.6 Notice
for Meetings. Written notice of a meeting shall be given to each Member entitled to vote not less than ten (10) days nor more than
sixty (60) days before the date of the meeting. The notice shall state the place, date, and hour of the meeting and the general nature
of the business to be transacted.

 

3.7 Required
Vote. When the Managers call a meeting, they shall determine the matters to be considered at the meeting, and whether any Members
other than the Members with the right to vote, will be entitled to vote at the meeting. Unless a greater vote is required by the Act
or the Articles or specifically set forth in this Agreement, the affirmative vote or consent of a majority of the Class A Voting Interests
of the Class A Members entitled to vote or consent on such matter shall be required to affirm any matter considered at a meeting or by
consent.

 

    	8

     

    

 

3.8 Consents.
Any action required or permitted to be taken at an annual or special meeting of the Members may be taken without a meeting, without prior
notice, and without a vote, if consents in writing, setting forth the action so taken. Every written consent shall bear the date and
signatures of all Members required to vote.

 

3.9 Members
and Assignees Have No Agency Authority. Except as expressly provided by resolution of the Managers, no Member or Assignee (in their
capacity as Members and Assignees) shall have any agency authority to take any action on behalf of the Company, whether or not such Person
is a Member.

 

Article
IV

MANAGEMENT

 

4.1 Management
of the Company. Except as otherwise specifically set forth in this Agreement, (i) the business and affairs of the Company will be
Member-managed by and under the direction of these managing Members (“the “Board”), and (ii) the Board
is hereby authorized to take any action of any kind, and to do anything, and everything, in furtherance of the purposes of the Company,
in accordance with the provisions of this Agreement and the Vermont Act. Pursuant to 11 V.S.A. § 4054 of the Vermont Act, the Board
will be the “manager” of the Company as provided in the Vermont Act and shall have such rights, duties and powers as are
specified in this Agreement and the Vermont Act. The Board will have the power and authority to delegate its rights and powers to manage
and control the business and affairs of the Company, hereunder or otherwise, subject to any limitations set forth in the Articles, this
Agreement and the Vermont Act, and accordingly the Board may appoint officers who shall be responsible for the day-to-day management
of the Company. No such delegation will relieve the Board of any of its obligations under this Agreement. The composition of the Board
shall be as set forth in Section 3.3. The Board shall determine the frequency of Board meetings (if any) from time to time.

 

4.2 Powers
of the Board. The Board shall be afforded all powers, rights and authority of managers under the Vermont Act with respect to the
business and purpose of the Company. Except as otherwise set forth herein, approval by the Board of any matter shall require the vote
of a majority of the Managers of the Board, with each Member holding total voting rights proportionate to its shares in the Company as
shown in Schedule A. Without in any way intending to limit the powers of the Board, the Board shall, subject to any rights of approval
of the Class A Members, have the right, power and authority on behalf of the Company, which vote shall include the affirmative vote of
the CETY designated manager unless expressly stated herein:

 

a) To
purchase, hold, own, pledge, and sell any assets of the Company;

 

b) To
obtain financings, loans and borrowings in connection with the businesses and assets of the Company on such terms as may be determined
by the Board in and to execute and deliver in the name of the Company all documents in connection therewith;

 

c) To
acquire and enter into any contract of insurance that the Board deems necessary or appropriate for the protection of the assets of the
Company and/or the Members and their respective employees, officers and affiliates, or for any purpose convenient or beneficial to such
entities or individuals;

 

d) To
engage persons, whether full-time or part-time, in the operation and management of the business of the Company, on such terms and for
such compensation as the Board shall determine;

 

    	9

     

    

 

e) To
file, conduct, prosecute and defend legal proceedings of any form, including proceedings against Members, and to compromise and settle
any such proceedings, or any claims against any person, including claims against Members, on whatever terms deemed appropriate by the
Board;

 

f) To
open brokerage, bank and other accounts and to deposit and maintain funds in the name of the Company, in such accounts and to temporarily
invest such funds in short-term United States government securities, money market accounts and/or other short-term interest bearing instruments;

 

g) To
cause the Company to make or revoke any of the elections referred to in Section 754 of the Internal Revenue Code of 1986, as amended
(the “Code”), or any similar provision enacted in lieu thereof;

 

h) To
select as its accounting year the period ending December 31 or other Fiscal Year as is permitted by the Internal Revenue Service;

 

i) To
engage and replace attorneys, independent accountants and auditors and such other service providers as the Board may deem necessary or
advisable;

 

j) To
transact business through agents and other persons selected by the Board in its sole discretion, and in selecting such agents and other
persons, and determining the compensation payable to such persons, even though other persons may be able to provide transactional services
at lower rates of compensation;

 

k) To
prepare, or cause to be prepared, to execute, acknowledge and deliver any and all instruments to effectuate the business of the Company,
including, but not limited to, annual and/or final reports, a copy of which shall be delivered to each Member;

 

l) To
purchase and sell assets of the Company, at such prices or amounts for cash, securities or other property and upon such terms as are
deemed in the Board’s absolute discretion to be in the best interests of the Company;

 

m) To
acquire, hold, manage, operate, sell, transfer, assign, convey, exchange or otherwise dispose of or deal with all or any part of the
investments held by the Company;

 

n) To
waive, defer, reduce or change, in whole or in part, the minimum investment amount, access to information, or any other requirement or
limitation imposed on a Member by this Agreement, regardless of whether such waiver, deferral, reduction or change operates for the benefit
of the Company, all of the Members or fewer than all of the Members of the Company;

 

o) To
establish such reserves as the Board shall, in its sole but reasonable discretion, deem appropriate to pay Expenses (as defined below)
and current and future, definite, contingent and possible obligations of the Company (“Reserves”); and

 

p) To
do any act, engage in any activity or execute any agreement of any nature, necessary or incidental to the accomplishment of the purposes
of the Company in accordance with the provisions of this Agreement and all applicable foreign, Federal, state and local laws and regulations.
If such act, activity, or execution entails expenses no greater than $10,000.00 USD, it shall not require the affirmative vote of the
CETY designated manager.

 

    	10

     

    

 

4.3 Board
Composition. The Board shall initially consist of two (2) individuals (each, a “Manager”), as follows:
(i) CETY Capital, LLC shall be entitled to designate one (1) Managers to represent CETY (the “CETY Manager”),
which Manager shall initially be its Chief Executive Officer, Kambiz Mahdi; and (ii) Synergy Bioproducts Corporation (“Synergy”)
shall be entitled to designate one (1) Manager to represent Synergy (the “Synergy Manager”), which Manager
shall initially be its President, Evan Dell’Olio. The value of the votes of both the CETY Manager(s) and Synergy Manager (s) shall
be equivalent to the respective shares held by each Member as shown in Schedule A. The size of the Board may be increased or decreased
only with the unanimous approval of the Class A Members. However should the Board be increased or decreased, the aggregate votes of the
CETY Manager(s) and Synergy Manager(s) shall be equal to no more than the shares of their respective Members as shown in Schedule A.
A Manager will hold such role until such Manager’s death, resignation, incapacity or removal in accordance with the provisions
of this Section 3.3. Managers may only be removed as follows: (i) CETY may remove the CETY Manager(s) at any time for any reason
and appoint replacement CETY Manager(s) at any time by delivering notice to the Company and to each of the Members; and (ii) Synergy
may remove the Synergy Manager(s) at any time for any reason and appoint replacement Synergy Manager(s) at any time by delivering notice
to the Company and to each of the Members. Any Manager may resign at any time upon notice to the Company. If the office of any Manager
becomes vacant for any reason, the Member that appointed such Manager shall be entitled to appoint a replacement.

 

4.4 Exculpation
and Indemnification.

 

a) The
Board shall not be liable to the Company or the Members for any action taken or omitted to be taken in connection with the business or
affairs of the Company so long as the Board acted in good faith and is not found to be guilty of gross negligence or willful misconduct
with respect thereto. It shall be conclusively presumed and established that the Board acted in good faith if any action is taken, or
not taken, on the advice of legal counsel or other independent outside consultants.

 

b) The
Company agrees to indemnify and hold harmless each Manager and his agents and affiliates from and against any and all claims, actions,
demands, losses, costs, expenses (including attorney’s fees and other expenses of litigation), damages, penalties or interest,
as a result of any claim or legal proceeding related to any action taken or omitted to be taken in connection with the business and affairs
of the Company (including the settlement of any such claim or legal proceeding); provided, however, that the party
against whom the claim is made or legal proceeding is directed is not guilty of gross negligence or willful misconduct as determined
by a court of competent jurisdiction. Any indemnity under this Section shall be paid from and to the extent of assets of the Company
only, and only to the extent that such indemnity does not violate applicable Federal and state laws.

 

c) Compensation
of Managers; Reimbursement of Expenses. A Manager shall not be entitled to compensation for his or her service as a Manager of the
Company or be entitled to any reimbursement of any general overhead expenses incurred by it unless provided for through a separate written
agreement between the Members. However, the Managers shall be entitled to reimbursement from the Company for direct out-of-pocket expenses
incurred on behalf of the Company.

 

d) Incapacity
of Manager. If any Manager shall become “incapacitated”, as herein defined, such Manager shall immediately cease to be
a Manager and such Manager shall be treated as if he or she had resigned on the date that such Manager shall have become incapacitated,
and the successor Manager, appointed by the Members, shall become a Manager of the Company; provided, that the successor to a
CETY Manager shall be selected by CETY, the successor to a Synergy Manager shall be selected by Synergy. Any individual Manager shall
be deemed “incapacitated” at such time as there shall be:

 

		i.	A
                                            currently applicable court order adjudicating such individual to be legally incapacitated
                                            to act on his or her own behalf or appointing a conservator or guardian to act for such individual;
                                            or

 

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		ii.	Duly
                                            executed, witnessed, and acknowledged written Articles of two (2) doctors of medicine who
                                            are licensed to practice medicine in the State of Vermont. Each such certificate shall state
                                            that such doctor has examined such individual and has concluded that such individual was,
                                            at the date indicated in the certificate, incapacitated, either physically or mentally, such
                                            that such individual was unable to manage his or her affairs with judgment and reason. Such
                                            certificates shall be in the possession of the Company and any successor Manager to such
                                            individual designated, or pursuant to, the provisions of this Agreement, or if none, in the
                                            possession of one or more other Managers.

 

e) Quorum;
Action without a Meeting. A quorum of any meeting of the Board shall require the presence of all of the Managers. Any matter or action
that is to be voted on, consented to or approved by the Managers may be taken without a meeting, if consented to in writing by the Managers.
Each such action taken by written consent of the Board shall be maintained by the Board in the records of the Company.

 

Article
V

 

ALLOCATION
OF PROFIT AND LOSS

 

5.1 Allocation
of Net Profit and Net Losses. For purposes of this Agreement, “Net Losses” or “Net Profits”
shall mean the net losses or net income of the Company, if any, determined in accordance with federal income tax principles.
Net Profits and Net Losses of the Company shall be allocated among the Members each Fiscal Year (or such other period as the case may
be) as follows. First, Net Profits (if any) up to the amount of distributions made with respect to such Fiscal Year shall be allocated
to the Members receiving such distributions in the ratio of such distributions according to each Member’s Membership Interests
as shown in Schedule A. Thereafter, Net Profits and Net Losses shall be allocated among the Members in such a manner as to cause the
balance in the Capital Account of each Member, as adjusted to reflect the allocations provided hereunder, to be equal to the aggregate
amount of cash such Member would receive if all the assets of the Company were sold for an amount of cash equal to the their book value,
all debt obligations were satisfied in accordance with their respective terms and the remaining cash was distributed as provided in Section
7.4 hereof.

 

5.2 Regulatory
Allocations. Notwithstanding Section 5.1 hereof, appropriate adjustments shall be made to the allocations of Net Profits and
Net Losses to the extent required to comply with the “qualified income offset” provisions of Section 1.704-1(b)(2)(ii)(d)
of the Treasury Regulations; the partnership “minimum gain chargeback” provisions of Section 1.704-2(f) of the Treasury Regulations;
and the “partner nonrecourse deduction” and “partner nonrecourse debt minimum gain chargeback” provisions of
Section 1.704-2(i) of the Treasury Regulations, all issued pursuant to Section 704(b) of the Code. To the extent permitted by such Treasury
Regulations, the allocations in such year and subsequent years shall be further adjusted so that the cumulative effect of all the allocations
shall be the same as if all such allocations were made pursuant to Section 4.1 hereof without regard to this Section 4.2.

 

5.3 Allocation
for Tax Purposes.

 

(a) Taxable
income, losses and deductions of the Company for each Fiscal Year shall accrue to, and be borne by, the Members holding Interests in
proportion to their sharing of profits and losses in accordance with Section 5.1, the allocations of various types of taxable
income and losses likewise being as nearly as possible proportionate.

 

    	12

     

    

 

(b) All
allocations under this Section 5.3 shall be made pursuant to the principles of Section 704 of the Code and in conformity with
Treasury Regulations promulgated thereunder, or the successor provisions to such Section and Regulations.

 

(c) All
matters concerning the allocation of profits, gains and losses among the Members (including the taxes thereon) and accounting procedures
not expressly provided for by the terms of this Agreement shall be determined by the Board in its sole and absolute discretion in consultation
with the accountants for the Company. The Board’s determination of the foregoing matters shall be final and conclusive as to all
Members.

 

(d) Any
taxes, fees or other charges that the Company is required to withhold under applicable law with respect to any Member shall be withheld
by the Company (and paid to the appropriate government authority) and shall be treated as having been distributed to such Member pursuant
to Section 7.2 and correspondingly deducted from the Capital Accounts of such Member, as they may occur with respect to which
amounts are required to be withheld

 

Article
VI

 

BOOKS
AND RECORDS; FINANCIALS; BANK ACCOUNTS; TAX MATTERS

 

6.1 Books
and Records.

 

a) At
all times during the existence of the Company, the Board shall keep true and complete records and books of account, in which shall be
entered fully and accurately each transaction of the Company and maintained at all times at the principal offices of the Company or,
subject to the provisions of the Vermont Act, at such other place as the Board may from time to time determine. The Board shall delegate
some or all of the administrative bookkeeping and accounting functions relating to the Company to a certified public accounting firm
designated by CETY and approved by Synergy, which approval shall not be unreasonably withheld. In the event that the Company lacks the
funds to make timely payment for any of the costs incurred by the use of services from such certified public accounting firm designated
by CETY, CETY shall hold complete and total responsibility for payment for all such costs incurred and not paid by the Company. Synergy
shall have no responsibility, legal or otherwise for contributing to these payments.

 

b) Upon
reasonable advance written notice to the Board, a Member or its authorized representative may inspect and copy, at the Member’s
expense and solely for use in connection with such Member’s interest as a member (and for no other purposes, competitive or otherwise),
the records of the Company required to be maintained pursuant to the Vermont Act and any financial statements maintained by the Company.
Any such inspection must be in good faith without any intent to damage the Company, the Board, any of the other Members or any of their
respective principals or affiliates in any manner.

 

    	13

     

    

 

6.1 Reports
to Members. At the close of each Fiscal Year, the Company shall have unaudited annual financial statements prepared in accordance
with generally accepted accounting principles. It shall be the responsibility of CETY or the certified public accounting firm referenced
in Section 6.1(a) to prepare such unaudited annual financial statements. In the event that the Company lacks the funds to make timely
payment for any of the costs incurred in the preparation of such unaudited annual financial statements, CETY shall hold complete and
total responsibility for payment for all such costs incurred. Synergy shall have no responsibility, legal or otherwise for contributing
to these payments. The Company shall also prepare and file all Federal, state, local and foreign income, and other tax returns that the
Company is obligated to file. It shall be the responsibility of CETY or the certified public accounting firm referenced in Section 6.1(a)
to prepare and file such Federal, state, local and foreign income, and other tax returns. In the event that the Company lacks the funds
to make timely payment for any of the costs incurred in the preparation and filing of any such taxes, it shall be the sole responsibility
of CETY to cover the costs of such preparation. Synergy shall have no responsibility, legal or otherwise for contributing to these payments.
In addition, as soon as practicable after the close of the Company’s Fiscal Year, the Company shall deliver to each Member the
relevant tax information required by such Member for the completion of its federal and state income tax returns. Copies of all Company
tax returns, information returns or reports shall be available to all Members as soon as possible after the close of the Fiscal Year
at the offices of the Company.

 

6.2 Bank
Accounts. Funds of the Company shall be used only for Company purposes and shall be deposited in such accounts in banks or other
financial institutions as may be established from time to time by the Board. Withdrawals shall be made by such persons as are designated
from time to time by the Board

 

6.3 Partnership
Representative. Kambiz Mahdi shall serve as the “partnership representative” of the Company under Code Section 6223,
for all purposes of the Code and for the corresponding provisions of any state or local statute (the “Partnership Representative”).
The Partnership Representative shall cause the Company’s accountant to prepare, and timely file, all Company tax returns, and shall
timely make all other filings required by any governmental authority having jurisdiction to require such filing, the cost of which shall
be borne by the Company. In the event that the Company lacks the funding to make timely payment for any or all of these filings and the
services associated with their preparation, the cost(s) shall be borne by CETY. Synergy shall have no responsibility, legal or otherwise
for contributing to these payments. The Partnership Representative shall also cause to be delivered to the Members, within ninety (90)
days after the expiration of each tax year of the Company, such information relating to the Company as the Partnership Representative
determines is necessary for the Members to complete their federal, state and/or local income tax returns that include such tax year including
a Form K-1 prepared by the Company’s accountant. This form shall show the allocation of profits and losses of the Company for federal
income tax purposes, including all separately stated items, to each Member. No election shall be made by the Company or any Member to
be excluded from the application of the provisions of subchapter K of the Code or from any similar provision of state tax laws. Each
Member shall furnish to the Partnership Representative such information as the Partnership Representative may reasonably request to permit
it to provide the Internal Revenue Service with sufficient information in accordance with any provisions of the Code or the published
regulations thereunder which require the Partnership Representative to obtain information from the Members. The provisions of this Section
6.5 shall survive the termination of the Company (as well as any termination, purchase or redemption of a Member’s Interests in
the Company for any reason whatsoever), and shall remain binding on the Members and all former members for a period of time necessary
to resolve with the appropriate taxing authorities any and all material matters regarding the taxation of the Company and the Members
by reason of their Interests.

 

6.4 Taxation
as Partnership. The Members intend that the Company shall be treated as a partnership for federal, state and local income and franchise
tax purposes.

 

    	14

     

    

 

Article
VII

 

DISTRIBUTIONS

 

7.1  Definitions.
For purposes of this Agreement, “Sharing Percentage” means with respect to any Member a fraction, expressed
as a percentage, the numerator of which is the number of Units held by such Member and the denominator of which is the sum of all of
the Units held by all of the Members.

 

7.2  Net
Cash Flow. The gross cash proceeds received by the Company from any and all sources and the reduction in any and all Reserves and
escrows previously established, shall be used for the following as shall be determined by the Board, in its sole discretion:

 

(a) first,
to pay all Company operating expenses then due and owing;

 

(b) second,
to establish, fund and increase Reserves and escrow accounts as appropriate or necessary to provide for the payment of Company expenses,
debt payments, lease payments, capital improvements and replacements, contingencies and all other purposes, all such determinations by
the Board to be made in its sole discretion; and

 

(c) finally,
the balance (the “Net Cash Flow”) shall be distributed to the Members in accordance with Section 7.3.

 

7.3 Distributions
in General.

 

(a) Subject
to maintaining the Company in a sound financial and cash position, which shall include the provision for losses affecting the cash position
of the Company and the payment or provision of payment, when due, of obligations of the Company and establishing such Reserves (defined
below), the Board, in its sole discretion, shall distribute Net Cash Flow to the Members. Distributions of Net Cash Flow shall be made
to the Members on a pro-rata basis in accordance with their respective Sharing Percentages;

 

(b) Notwithstanding
any provision to the contrary contained in this Agreement, the Company shall not make any distribution to the Members if such distribution
would violate the Act or other applicable law.

 

7.4 Liquidating
Distributions. Upon the liquidation or dissolution of the Company as contemplated in Article XI of this Agreement, the Board
shall cause the Company to distribute the net liquidation proceeds and any other liquid assets of the Company, after the payment of expenses
of liquidation of the Company and the establishment of a reasonable Reserve in an amount estimated by the Board to be sufficient to pay
any amounts reasonably anticipated to be required to be paid by the Company, as follows:

 

(a) First,
to the creditors of the Company, whether by payment or by establishment of adequate Reserves; and

 

(b) Second,
to the Members in accordance with the priorities set forth in Section 7.3.

 

7.5 Withholding.
The Company is authorized to withhold from distributions to the Members, and to pay over to the applicable foreign, federal, state or
local government authorities, any amounts required to be so withheld pursuant to the Code, Regulations or any provisions of any other
federal, state or local law and shall allocate such amounts to the Members with respect to which such amount was withheld. All amounts
withheld pursuant to the Code, the Regulations or any provisions of any other foreign, federal, state or local tax law with respect to
any payment, distribution, or allocation to the Company or the Members shall be treated as amounts distributed to the Members pursuant
to this Article VII for all purposes under this Agreement.

 

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Article
VIII

 

CAPITAL
ACCOUNTS, INITIAL CAPITAL CONTRIBUTIONS, AND ADDITIONAL CAPITAL CONTRIBUTIONS

 

8.1
(a) Initial Capital Contributions. Each Member hereby agrees to make contributions to the capital of the Company (the “Initial
Capital Contributions”) as set forth on Schedule A.

 

(b)
Additional Capital Contributions. Unless expressly provided in this Agreement, or if consented to by the Board in its sole discretion,
Members may, but shall not be required to, make additional capital contributions (the “Additional Capital Contributions”
and together with the Initial Capital Contributions, the “Capital Contributions”) to the Company in such amounts and
on such terms as may be determined by the Board.

 

(c)   No Member is entitled to any interest or compensation by reason of its Capital Contributions
or by reason of being a Member.

 

(d) The
Board must reflect in the books and records of the Company the addresses of Members and changes thereto and the transfer of Interests
and changes in Capital Contributions which are accomplished in accordance with the provisions hereof.

 

8.2 Capital
Accounts. A “Capital Account” of any Member attributable to its Interest as of a particular date shall
consist of the following:

 

(a) an
amount equal to the value of such Member’s Initial Capital Contribution with respect to such Membership Interest;

 

(b) the
increases, if any, to such account by reason of Additional Capital Contributions;

 

(c) the
decreases, if any, to such account by reason of distributions to such Member; and

 

(d) the
increases or decreases, if any, to such Capital Account to reflect allocations of profits and losses, respectively, in accordance with
the provisions of Section 4.1 and 4.2.

 

Each
Capital Account shall be maintained and adjusted in accordance with the Treasury Regulations promulgated pursuant to Section 704 of the
Code. Without limiting the foregoing, to each Member’s Capital Account there shall be debited or credited, as the case may be,
adjustments (other than adjustments already reflected in Net Profits or Net Losses) which are necessary to reflect a revaluation of Company
assets to reflect the fair market value of all Company assets, as required by Treasury Regulations Section 1.704-1(b)(2)(iv)(f), and
such regulations are hereby incorporated in this Agreement by reference.

 

8.3 Section
8.3  Subsequent Closings. Subject to Article IV, the Board may, in its sole and absolute discretion, admit additional Members
(the “Additional Members”), or permit any existing Member to increase its Capital Contributions.

 

    	16

     

    

 

Article
IX

 

RESTRICTIONS
ON TRANSFERS OF INTERESTS OF MEMBERS; ADMISSION OF

SUBSTITUTE MEMBERS; OTHER MATTERS AFFECTING INTERESTS

 

9.1 Restrictions
on Transfer of Interests of Members.

 

a) Subject
to Section 9.8 below, no Member may offer, sell, transfer, assign, exchange, hypothecate or pledge, or otherwise dispose of or
encumber (hereinafter collectively, “Transfer”, including correlatives of such term), in whole or in part, such Member’s
Interest without the consent of the Board, which may be given or withheld in the sole and absolute discretion of the Board, except
a Transfer to a Family Member for bona fide estate planning purposes or by laws of descent and distribution upon the death of a Member
who is a natural person or Transfer to a parent entity or subsidiary entity of any Member controlled by such Member. “Family
Member” shall mean, with respect to a Member who is a natural person, (i) the spouse, parents, grandparents, children, grandchildren
and great grandchildren of such Member, (ii) any trust all of whose trustees and beneficiaries are one or more of the individuals listed
in clause (i) above, or (iii) any partnership or other entity all of whose owners are one or more of such individuals or trusts listed
in clauses (i) or (ii) above. Family Members shall include such relationships by adoption.

 

b) No
Member may Transfer, in whole or in part, such Member’s Interest if such Transfer would cause the termination of the Company for
Federal income tax purposes, and any purported Transfer that would cause the termination of the Company for Federal income tax purposes
shall be void ab initio.

 

c) Without
limiting the generality of Section 9.1(a) above, each Member agrees that it will not Transfer all or any portion of its Membership
Interests in the Company unless the Board determines that such proposed Transfer may be effected without:

 

(i) registration
of the Interests being made under the Securities Act of 1933, as amended;

 

(ii) violating
any applicable state securities or “Blue Sky” law (including investment suitability standards) or the laws of any other jurisdiction;

 

(iii) causing
the Company to relinquish its status as a partnership for Federal, state or local income or franchise tax purposes;

 

(iv) causing
the Company to become a “publicly traded partnership” within the meaning of the Code; or

 

(v) violating
the Vermont Act.

 

b) In
no event shall an Interest or any portion thereof be Transferred: (i) to a person or entity that does not qualify as an “accredited
investor” within the meaning of Regulation D promulgated under the Securities Act, or (ii) to a minor or incompetent.

 

9.2 Admission
of Substitute Member. Subject to the provisions of this Article IX, an assignee of the Interest of a Member (which shall include
any purchaser, transferee, or other recipient of any disposition of such Interest) shall be deemed admitted to the Company as a Member
thereof (hereinafter a “Substitute Member”) only upon the satisfactory completion of the following:

 

(a) The
consent of the Board shall have been given, which consent shall be evidenced by a written consent executed by the Board or by the execution
by the Board of a supplement or amendment to this Agreement or an amendment, if required, to the Certificate evidencing the admission
of such person as a Member which consent shall be given in the case of a Transfer to a parent entity or subsidiary controlled by such
a Member;

 

    	17

     

    

 

(b) the
assignee shall have accepted and agreed to be bound by the terms and provisions of this Agreement (as it may be amended from time to
time) by executing a counterpart hereof and such assignee shall have expressly assumed all of the obligations of the assignor Member
hereunder, and shall have executed such other documents or instruments as the Board may reasonably require in its sole and absolute discretion
in order to effect the admission of such person as a Member;

 

(c) an
amendment to the Certificate, if required by the Vermont Act, evidencing the admission of such person as a Member shall have been filed;

 

(d) the
assignee shall have delivered a letter containing a representation that the assignee’s acquisition of the Interest is made as a
principal, for the assignee’s own account, for investment purposes only and not with a view to the resale or distribution of such
Interest, and that the assignee will not Transfer such Interest or any fraction thereof to anyone in violation of this Agreement;

 

(e) if
the assignee is an entity, the assignee shall have provided to the Board evidence satisfactory to counsel for the Company of its authority
to become a Member under the terms and provisions of this Agreement;

 

(f) the
assignee shall have complied with all applicable governmental rules and regulations, if any;

 

(g) the
assignee meets the requirements for investing in the Company and the assignee completes subscription documents if required by the Board;
and

 

(h) all
costs and expenses incurred by the Company and the Board in connection with this Section 9.2 shall have been paid by the person
or entity seeking to become a Substitute Member (or the relevant assignor).

 

9.3 Obligations
of Assignee of Interest in the Company.

 

(a) Subject
to the provisions of Section 9.2, and except as required by operation of law, the Company shall not be obligated for any purposes
whatsoever to recognize the assignment by any Member of such Member’s Interest until the Company has received notice thereof.

 

(b) Any
person or entity who is the assignee of all or any portion of an Interest of a Member, but who has not become a Substitute Member, and
desires to make a further disposition of such Interest, shall be subject to all the provisions of this Article IX to the same extent
and in the same manner as any Member desiring to make a disposition of such Interest.

 

9.4
Further Actions. The Board will cause this Agreement to be amended to reflect as appropriate the occurrence of any of the transactions
referred to in this Article IX as promptly as is practicable after such occurrence.

 

9.5 Effect
of Bankruptcy, Death or Incompetence of a Member. The bankruptcy of a Member, the death of a Member or any adjudication that a Member
is incompetent (which term shall include, but not be limited to, insanity), shall not cause the termination or dissolution of the Company
and the business of the Company shall continue.

 

    	18

     

    

 

9.6 Attachment
by Creditors. If a Member’s Interest is subject to attachment by a creditor, or is assigned for the benefit of any creditor,
the Interest so obtained by such creditor shall be only that of an assignee, and in no event shall such creditor have the rights of a
Substitute or Additional Member.

 

9.7 Assignee.
If a Member Transfers all or a portion of such Member’s Interest involuntarily, by operation of law or voluntarily, without the
consent required by this Article IX, the transferee or assignee shall be entitled only to receive that proportion of profit and loss,
and any distribution of assets of the Company attributable to the Interest so acquired by reason of such disposition from and after the
effective date of such disposition, and only upon written notification of same to the Board, and in no event shall any such transferee
or assignee have the rights of a Substitute or Additional Member.

 

9.8 Right
of First Refusal.

 

(a) Prior
to any Transfer of his Interest, a Member (the “Offering Member”) shall give to the other Member (the “Responding
Member”) a notice in writing (the “ROFR Notice”), stating its intention to dispose of all of its Interest
in the Company to a bona fide third party purchaser (“Proposed Transferee”) and setting forth (i) the identity of
the Proposed Transferee and (ii) the terms and conditions of such proposed Transfer. The Responding Member shall have a period of forty-five
(45) business days, commencing with the date on which such notice is transmitted (the “Election Period”), to give
notice in writing (the “Notice of Election”) to the Offering Member that it will purchase all and not less than all
of the offered Interest. If such Notice of Election is delivered to the Offering Member, then the Responding Member shall purchase all
and not less than all of the offered Interest in accordance with the terms and conditions set forth in the ROFR Notice.

 

(b) If
the Responding Member does not timely exercise his option to purchase all of the offered Interest, then the Offering Member shall have
the right to sell the offered Interest to the Proposed Transferee for a price not less than, and on terms not more favorable than, the
price and terms offered to the Responding Member; provided that such Transfer (A) occurs within sixty (60) days following the
expiration of the Election Period and (B) complies with the provisions of Section 9.2.

 

9.9 Tag
Along Right.

 

(a) In
the event that the Offering Member sells its Interest in accordance with Section 9.8(b), the Responding Member shall have the
right, exercisable in its sole discretion, to elect to sell its Interests to the Proposed Transferee on the same terms and conditions
as the Offering Member sells its Interest in accordance with Section 9.8(b) (“Tag Along Right”). Any such election
must be made no later than thirty (30) business days after the expiration of the Election Period (“Tag Period”). If
the Responding Member makes the election described in this Section 9.9, the Responding Member shall have the right to participate
in the sale of Interests described in Section 9.8(b) upon the same terms and conditions set forth in the ROFR Notice.

 

(b)
In the event that the Responding Member elects to sell its Interest to the Proposed Transferee pursuant to this Section 9.9, the
Proposed Transferee shall purchase the amount of the Responding Member’s Interest equal to the product of (x) the total percentage
of Membership Interests that the Proposed Transferee proposes to buy (as set forth in the ROFR Notice) and (y) a fraction (A) the numerator
of which is equal to the percentage of Membership Interests then held by the Responding Member, and (B) the denominator of which is equal
to the total percentage of Membership Interests then held by the Offering Member and the Responding Member (the “Tag Along
Portion”). The Responding Member may sell the amount of its Interests up to its Tag Along Portion. If the Responding Member
notifies the Offering Member that it elects to exercise its Tag Along Right with respect to less than its full Tag Along Portion, then
the Offering Member may sell its Interests so that the Proposed Transferee purchases the full amount of Interests set forth in the ROFR
Notice.

 

    	19

     

    

 

(c) If
the Responding Member does not timely exercise its Tag Along Right to sell its Interests to the Proposed Transferee, then the Offering
Member shall have the right to sell the its offered Interest to the Proposed Transferee on the terms and conditions set forth in the
ROFR Notice; provided that such Transfer (A) occurs within sixty (60) days following the expiration of the Tag Period and (B)
complies with the provisions of Section 9.2.

 

Article
X

 

POWER
OF ATTORNEY

 

10.1 Power
of Attorney. Each Member hereby constitutes and appoints the Board and the liquidators, with full power of substitution, as his or
its true and lawful agent and attorney-in-fact, with full power and authority in his or its name, place and stead, to execute, swear
to, acknowledge, deliver, file and record in the appropriate public offices (a) this Agreement, all certificates and other instruments
and all amendments thereof in accordance with the terms hereof that the Board deems appropriate or necessary to form, qualify, or continue
the qualification of, the Company as a limited liability company in the State of Vermont and in all other U.S. or foreign jurisdictions
in which the Company may conduct business or own property; (b) all instruments that the Board deems appropriate or necessary to reflect
any amendment, change, modification or restatement of this Agreement in accordance with its terms; (c) all conveyances and other instruments
or documents that the Board or the liquidators deem appropriate or necessary to reflect the dissolution and liquidation of the Company
pursuant to the terms of this Agreement, including a certificate of cancellation; and (d) all instruments relating to the admission,
withdrawal or substitution of any Member pursuant to this Agreement.

 

10.2 Procedural
Aspects. The power of attorney granted by each Member to the Board is irrevocable and coupled with an interest, and shall survive
the death, disability, incapacity, dissolution, bankruptcy, insolvency or termination of any Member and the Transfer of all or any portion
of his or its Units and shall extend to such Member’s heirs, successors and assigns.

 

Article
XI

 

DISSOLUTION
AND LIQUIDATION

 

11.1 Dissolution
of the Company. The Company shall be dissolved upon the earliest to occur of:

 

(a) the
unanimous determination of the Members to dissolve the Company;

 

    	20

     

    

 

(b) the
happening of any other event, including the entry of a decree of judicial dissolution under the Vermont Act, that under the law of the
State of Vermont, mandatorily requires the dissolution of the Company.

 

11.2 Liquidation.
Upon the dissolution of the Company, the liquidators, who shall consist of the Managers (such persons, the “Liquidators”)
shall cause the cancellation of the Certificate, liquidate the assets of the Company, pay off known liabilities, establish reserves for
contingent liabilities and expenses of liquidation, apply and distribute the balance of the proceeds of such liquidation in accordance
with the provisions set forth in Section 7.4 hereof, and shall take all other steps necessary to wind up the affairs of the Company
as promptly as practicable. To the extent reasonable, the business of the Company may continue to be conducted until liquidation is complete.
For purposes hereof, the term “Liquidators” shall also include the trustees, receivers or other persons required by law to
wind up the affairs of the Company.

 

11.3 Distribution
in Kind. Notwithstanding the provisions of Section 11.2 hereof, if, upon dissolution of the Company, the Liquidators shall
determine that an immediate sale of part or all of the assets attributable to the Company would be impractical or would cause undue loss
to the relevant Members, the Liquidators may, in their absolute discretion, either defer for a reasonable time the liquidation of any
assets except those necessary to satisfy liabilities of such entity (other than those to Members) or distribute to the Members, in lieu
of cash, the securities of issuer(s) underlying the investments held by the Company as the Liquidators deem not suitable for liquidation
(provided, however, that the Liquidators shall first distribute available cash after payment of liabilities and reserves for contingent
liabilities and expenses, including, without limitation, the costs of any independent appraisals). Each Member shall receive an amount
of securities with a fair market value (as determined by an independent appraiser approved by the Liquidators) equal to the proceeds
the Members would have received if such underlying investments had been liquidated for cash equal to such fair market value and such
cash were distributed in accordance with Section 11.2.

 

11.4 Final
Statement. As soon as practicable after the dissolution of the Company, a final statement of its assets and liabilities shall be
prepared by the accountants for the Company

 

11.5 Costs
of Dissolution and Liquidation. For the avoidance of doubt, Synergy shall never be required to contribute financially or otherwise
to the costs associated with dissolution and/or liquidation of the Company.

 

Article
XII

 

GENERAL
PROVISIONS

12.1 Address
and Notices. The address of each Member for all purposes shall be the address set forth on the signature page or Joinder annexed
to this Agreement or such other address of which the Board has received written notice. Any notice, demand or request required or permitted
to be given or made hereunder shall be in writing and shall be deemed given or made when delivered in person or when sent to such Member
at such address by registered or certified mail, return receipt requested, or by electronic mail if sent during normal business hours
of the recipient, and on the next business day if sent after normal business hours of the recipient.

 

12.2 Titles
and Captions. All Article and Section titles and captions in this Agreement are for convenience only. They shall not be deemed part
of this Agreement and in no way define, limit, extend or describe the scope or intent of any provisions hereof.

 

    	21

     

    

 

12.3 Expenses.
Except as otherwise expressly provided herein or in writing between the Members, all costs and expenses, including fees and disbursements
of counsel, financial advisors and accountants incurred in connection with the preparation and execution of this Agreement, or any amendment
or waiver hereof, and the transactions contemplated hereby shall be paid by the Member incurring such costs and expenses.

 

12.4 Further
Assurances. In connection with this Agreement and the transactions contemplated hereby, the Company and each Member hereby agrees,
at the request of the Company or any other Member, to execute and deliver such additional documents, instruments, conveyances and assurances
and to take such further actions as may be required to carry out the provisions hereof and give effect to the transactions contemplated
hereby.

 

12.5 Governing
Law. This Agreement shall be construed in accordance with and governed by the laws of the State of Vermont without regards to any
choice or conflict of law provision or rule that would cause the application of laws of any jurisdiction other than those of the State
of Vermont.

 

12.6 Forum.
The Members hereby agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out
of or in connection with, this Agreement or the transactions contemplated hereby, whether in contract, tort or otherwise, shall be brought
in the United States District Court for the District of Vermont or in the Superior Court of the State of Vermont so long as one of such
courts shall have subject-matter jurisdiction over such suit, action or proceeding, and that any case of action arising out of this Agreement
shall be deemed to have arisen from a transaction of business in the State of Vermont. Each of the parties hereby irrevocably consents
to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably
waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such
suit, action or proceeding in any such court or that any such suit, action or proceeding that is brought in any such court has been brought
in an inconvenient form. Service of process, summons, notice or other document by registered mail to the address set forth in Section
13.6 shall be effective service of process for any suit, action or other proceeding brought in any such court.

 

12.7 Fees.
The prevailing party or parties in any action or other adjudicative proceeding arising out of or relating to this Agreement shall be
reimbursed by the party or parties who do not prevail for their reasonable attorneys, accountants and experts fees and related expenses
(including reasonable charges for in-house legal counsel and related personnel) and for the costs of such proceeding. In the event that
two or more parties are deemed liable for a specific amount payable or reimbursable under this Section 13.7, such parties shall be jointly
and severally liable therefor.

 

12.8 Binding
Effect. This Agreement shall be binding upon and inure to the benefit of the parties and their heirs, executors, administrators,
successors, legal representatives and assigns.

 

12.9 Integration;
Entire Agreement. This Agreement and the transaction documents executed in connection with the purpose of the Company constitute
the entire understanding among the Members and supersede any prior understanding and/or written or oral agreements among them with respect
to the Company. No covenant, representation or condition not expressed in this Agreement shall affect or be deemed to interpret, change
or restrict the express provisions hereof.

 

    	22

     

    

 

12.10 Amendment.
No provision of this Agreement may be amended or modified except by an instrument in writing executed by the Company and all the Members.
Notwithstanding the foregoing, the Board may amend the Agreement to clarify any clerical inaccuracy or manifest error, or amend Schedule
A following any name or address change, new issuance, or Transfer of Interests or any Capital Contribution or return thereof, in each
case in accordance with this Agreement, may be made by the Board without the consent of or execution by the Members. The Board shall
send prompt notifications of all amendments of this Agreement to the Members.

 

12.11 Waiver
of Jury Trial. Each Member hereby acknowledges and agrees that any controversy that may arise under this Agreement is likely to involve
complicated and difficult issues and, therefore, each such Member 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.

 

12.12 No
Third Party Beneficiaries. Without limiting any of the provisions of this Agreement, including any obligations of Members to make
Capital Contributions or to return money or other property to the Company, the provisions of this Agreement are intended solely to benefit
the Company and the Members and, to the fullest extent permitted by applicable law, shall not be construed as conferring any benefit
upon any creditor of the Company (and no such creditor shall be a third party beneficiary of this Agreement), and the Members shall have
no duty or obligation to any creditor of the Company to make any contributions or return any money or other property to the Company.
None of the provisions of this Agreement shall be for the benefit of or enforceable by any creditors of the Company.

 

12.13 Severability.
If any provision of this Agreement, or the application of such provision to any person, entity or circumstance, shall be held invalid
by a court of competent jurisdiction, the remainder of this Agreement, or the application of such provision to persons or circumstances
other than those to which it is held invalid by such court, shall not be affected thereby.

 

12.14 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 rules of strict construction will be applied against any party.

 

12.15 Confidentiality.
The Board and the Members agree that they will keep, and will cause their respective members, managers, officers, directors, principals,
employees, affiliates, agents, attorneys, accountants, advisors and representatives (“Representatives”) to keep, in
strictest confidence, all of the confidential information regarding each other, the Company, the Managers, and the strategies and investments
of the Company (collectively the “Confidential Information”) received by them prior to and after the execution of
this Agreement. Furthermore, the Members agree that they will only disclose the Confidential Information to those of their Representatives
who have a specific need to know such Confidential Information for the purpose of analyzing and effectuating the transactions contemplated
herein. Notwithstanding the foregoing, a Manager or a Member or any of its Representatives may disclose the Confidential Information
to the extent they are requested or become legally compelled (by oral questions, interrogatories, requests for information or documents,
subpoena, civil investigative demand or similar process, or applicable law, regulations or orders) or to the extent the Confidential
Information is already in the public domain, other than as a result of a disclosure by such Manager or Member or any of their respective
Representatives.

 

12.16 Waiver
by Member. Any Member by notice to the Board may, but shall be under no obligation to, waive any of its rights or any conditions
to its obligations hereunder, or any duty, obligation or covenant of any other Member or the Board. No such waiver shall affect or alter
the remainder of this Agreement, but each and every covenant, agreement, term and condition hereof shall continue in full force and effect
with respect to any other existing or subsequent breach.

 

12.17 Equitable
Remedies. Each party hereto acknowledges that a breach or threatened breach by such party of any of its obligations under this Agreement
would give rise to irreparable harm to the other parties, for which monetary damages would not be an adequate remedy, and hereby agrees
that in the event of a breach or a threatened breach by such party of any such obligations, each of the other parties hereto shall, in
addition to any and all other rights and remedies that may be available to them in respect of such breach, be entitled to equitable relief,
including a temporary restraining order, an injunction, specific performance and any other relief that may be available from a court
of competent jurisdiction (without any requirement to post bond).

 

12.18 Counterparts;
Facsimile Signatures Valid. This Agreement may be executed in counterparts, all of which taken together shall constitute one agreement
binding on all parties, notwithstanding that all the parties are not signatories to the original or the same counterpart. Each party
shall become bound by the Agreement immediately upon affixing his or its signature hereto, independently of the signature of any other
party. A facsimile signature or other electronic signature shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original and not a facsimile signature.

 

Remainder
of Page Left Blank

 

Signature
Pages Follow

 

    	23

     

    

 

SIGNATURE
PAGE

 

IN
WITNESS WHEREOF, the undersigned hereto makes and executes this Operating Agreement of Vermont Renewable Gas, LLC on the 14th
day of December 2022.

 

	VERMONT
    RENEWABLE GAS, LLC	 
	 	 
	CLASS
    A MEMBERS	 
	 	 
	CETY
    CAPITAL, LLC	 
	 	 	 
	By:
    	 	 
	Name:	Kambiz
Mahdi	 
	Title:
    	Chief
    Executive Officer	 

 

Address:
2990 Redhill Avenue Costa Mesa, California 92626 USA

 

	SYNERGY
    BIOPRODUCTS CORPORATION	 
	 	 	 
	By:
    	 	 
	Name:
    	Evan
    B. Dell’Olio	 
	Title:
    	President	 

 

Address:
145 Pine Haven Shores Road #1000A Shelburne, VT 05482 USA

 

    	24

     

    

 

SCHEDULE
A

 

	Member	 	Percentage

    Class
    A

    Interest
	 	Percentage

    Class
    B

    Interest
	 	Percentage

    Class
    C

    Interest
	 	Percentage

    Class
    D

    Interest

    

 

	CETY
    Capital LLC	49%
	 	 
	SYNERGY
    BIOPRODUCTS CORPORATION	51%

 

Member
Capital Contribution

 

	Name	Contribution
	 	 
	CETY
    Capital LLC	$49
	 	 
	Synergy
    Bioproducts Corporation 	$51

 

    	25

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